Higher profit forecast for D’Ieteren thanks to Belron
Belgian car importer and mobility service provider, D’Ieteren, has increased its profit forecast for the second time this year. The company now expects to achieve a 35% higher profit than in 2018. D’Ieteren’s share price promptly went up to its highest-ever rating.
The positive outlook is mainly due to the good results at Belron, the automotive glazier in which D’Ieteren has a 54% stake. D’Ieteren expects Belron’s profit to double this year, significantly increasing the outlook of a 70% increase it gave in May.
Belron is making more money because of the multiplication of sensors and cameras integrated into car windshields it has to replace. Known in Europe for its Carglass franchise, it made a 225 million euro profit on a 3,8 billion euro turnover last year.
Sensors increasing profits
D’Ieteren has three main income sources: Importing VW Group and Yamaha vehicles, production and sales of the famous Moleskine notepads, and its stake in automotive glazier Belron. It is the last activity that now increases the company’s rosy financial outlook.
Belron is doing exceptionally well. The reason for that is the multiplication of Advanced Driver Aid Systems (ADAS). These sensors, cameras, and radars are often mounted behind the windshield. They serve several comfort and safety purposes but are expensive when the windshield needs replacing.
ADAS is a real goldmine for automotive glaziers like Belron. Changing a windshield now requires a lot more knowledge and equipment to recalibrate the systems. According to Degroof Petercam, Belron does each recalibration at a 50% profit margin. These technologies used to be the privilege of high-end models, but they now feature in most new cars. They will even become mandatory on all new cars in Europe, which makes for a bright outlook for Belron.