Volkswagen distributor D'Ieteren flags softer auto glass repair demand in N America

By Dimitri Rhodes and Dagmarah Mackos

(Reuters) -Belgian car distributor D'Ieteren on Wednesday reported 3.06 billion euros ($3.30 billion) in first-quarter sales and flagged lower volumes for its auto glass repair business in North America due to milder weather.

The group, which distributes Volkswagen, Audi, SEAT, Škoda cars in Belgium, reported combined sales of 3.83 billion euros over the same period a year earlier. The numbers were not comparable as the company changed the way it reported its results.

Still, sales in Berlon, the company's auto glass repair unit and its biggest division, increased by 5.7% organically, as strong demand in Europe and other regions mitigated flat results in North America.

Volumes in its North American business, which accounts for 55% of the unit, dropped as mild weather reduced demand, echoing comments made earlier this month by Canadian peer Boyd Group Services.

"During the winter periods they kept technician staff to cope with capacity issues, but now they have the capacity but not the volume," said KBC Analyst Michiel Declercq.

"This might weigh a bit on profitability in the first half," he added.

D'Ieteren reiterated its forecast, typically considered conservative by analysts, of mid- to high single-digit percentage growth in its adjusted profit before tax for 2024.

Its aftermarket parts distributor unit, TVH, recovering from a recent cyberattack, showed strong organic growth of 12.2%.

Excluding the reversal of the cyber impact, underlying volume trends are roughly flat, said Declercq.

Moleskine, the group's luxury notebook brand, recorded a 6.3% organic decline in earnings, reflecting the impact of inventory management at e-commerce platforms since early 2023.

D'Ieteren shares, which rose around 14% this year, were broadly flat in morning trade.

(Reporting by Dimitri Rhodes and Dagmarah Mackos; Editing by Himani Sarkar, Bernadette Baum and Sriraj Kalluvila)