Welcome to the results press call for Q2 of CIE Automotive. Today we have Jesús María Herrera, CEO, and Lorea Aristizabal, Director for Corporate Development. At the end of the presentation, there will be a Q&A. I'd like to remind you that questions can only be asked in writing via the tool provided in the webcast. Now I'll hand over to Lorea. Go ahead, please.
Good afternoon, everyone, and welcome to the conference call on the results for the second quarter at CIE, the quarter where the global volumes have stayed flat compared to last year with almost 19 million vehicles produced. Although sequentially, there has been a fall of 6% compared to the first quarter, with almost 1.2 million vehicles less. By markets, their evolution has varied significantly.
On the one hand, we have the markets with the worst evolution during the quarter. This would include Europe and China. Europe with 3.8 million vehicles that have been produced in the second quarter, representing a drop of 5% compared to the previous year, very similar to the figures for the first quarter. In the first quarter, we suffered the Omicron impact, and in this second quarter, the main negative impact have been the temporary disruptions in the supply chain caused by the war, especially regarding wiring and other materials from Russia and Ukraine, as well as the energy issue we are all aware of. In the case of China, the lockdown started in March in certain locations, but the lockdowns of Shanghai and other important economic regions during the second quarter that have had a much more relevant effect.
A total of 5.5 million vehicles were produced in the second quarter. This is 6% less than last year, but 13% below the first quarter. Although the good news is that there has been a significant sequential improvement during the months of April, May and June, with the productions in June doubling those of April and exceeding the monthly average for the first quarter. In other words, a clear V-shaped recovery is in sight. On the other hand, we have the group of markets with a better evolution, and there we find North America. The United States, where demand is still strong. This can be seen in various indicators such as the high average price of vehicles or the low discounts from the manufacturers.
In an economy with full employment levels technically, and with inventory levels that are still very low. Meanwhile, Mexico has maintained healthy production levels, very similar to those of the first quarter. With all this, production in North America in the second quarter has been 3.6 million vehicles, 12% more than last year and very much in line with the first quarter. We have the case of Brazil, too. Production in Brazil that has been improving month after month from the beginning of the year. In the second quarter, almost 600,000 units produced, a growth of 9% compared to the previous year, and +21% in a sequential improvement compared to the first quarter, which was especially hard hit by Omicron.
May can be highlighted as a record vehicle sales in Brazil in the last twelve months. Finally, we have the India market. To understand the extremely strong growth of 32% in this second quarter compared to the previous year, we have to remember that in May 2021, India suffered a serious COVID wave that had a very negative impact on the industrial activity levels. The fact is that the 1.3 million vehicles produced up to in the first quarter of this year and the 1.2 million produced in the second quarter are already above our 2019 levels, which confirms the strength of this Indian market. Among other factors, the latent demand, the growing preference for private vehicles, the strength of the rural economy. Several of these factors are behind the excellent market situation.
We now move on to talk about CIE in this second quarter, where we've beaten the market performance by 16 points. Our quarterly sales have grown more than 24% compared to last year and have set a new historical record, this time over EUR 1 billion. A growth in sales that is partially explained by the pass-through to customers, but with a real, very significant gain in market share, resulting from the fact that many of our direct competitors, especially those that are smaller in size, are not being able to survive in this very complex environment. Focusing on results, we have presented a second quarter with an EBITDA of EUR 164 million, which has grown 13% compared to the same period last year, and which represents the highest quarterly EBITDA in the history of the company.
We have achieved this operating result in spite of a negative context, where we have taken on a sequential drop in volumes, where we have continued to manage the volatility of supply programs to our customers with the stop and goes, where we have negotiated pass-throughs with our customers of raw materials and other cost items such as energy and labor in an attempt to mitigate the impact of inflation on our results. Lastly, a quarter where we have managed a context and where we have set as an ultimate goal, making up for what we haven't been able to pass through to our customers by using cost flexibility and productivity increases. These results were accompanied by a net result, which for the quarter amounted to EUR 78 million, and in the full half year, EUR 160 million.
The highest half year net result for CIE so far. A profit that shows that our diversification works, and it works especially well under complex circumstances like these, because it is enabling us to make the most of the fact that not all geographies or all customers are equally affected by market dysfunctions. Talking about realities, talking about flows, talking about generation, the combination of a high EBITDA with a conversion rate of 68% has taken us in this second quarter to EUR 107 million in operating and cash generation, and EUR 74 million in cash flow, post working capital and post growth CapEx.
A cash flow that in the full semester has represented EUR 138 million, and which we have used practically entirely to reward our shareholders, not only with the recurring dividends, but also with an investment of EUR 59 million in treasury stock to reduce capital, and another investment of EUR 25 million in an additional stake in Mahindra CIE. All this, while we continue to deleverage the balance sheet as we had promised to do. Our debt has been reduced from 2.59x net financial debt over EBITDA a year ago to 2.28x now. Without the investment of EUR 135 million in remuneration to the shareholder, our debt would be at 2.06x , a level that we will continue to move toward gradually in the coming quarters.
If we talk about the future, how we see the future evolution, we can start by discussing Brazil, where we expect an improvement of 16% in the second half versus the first. In this way, Brazil would consolidate the consensual improvements we've seen during the year. We propose the year 2022 with 2.2 million vehicles produced, a 5% growth in the year. As an additional reference, approximately 20% below pre-COVID levels. An issue to be monitored in a specific case for Brazil during the second half of the year will be the presidential elections, an event that traditionally brings a certain uncertainty to the consumer and could affect demand. We'll see. We have China with an expected improvement of 13% in the second half compared to the first.
This will have a lot to do with the comparable baseline effects caused by the lockdowns during the first half of the year. That's not all. We also have to consider the recent stimuli implemented by the Chinese government, initially to incentivize economic activity, and in particular, to incentivize automotive demand. China, in this context, would close the year at practically 25 million vehicles, which are levels that are similar to last year's and similar to those of 2019. Europe, with a sequential improvement of 8% in the second half compared to the first, includes a very powerful fourth quarter that would reach 4.5 million vehicles produced. It's true that these 4.5 million would still be significantly below the pre-COVID levels, but undoubtedly, it's 4.5 million vehicles, and this is pretty demanding in the current context.
We will need to monitor the evolution of the different variables that can affect it. These estimates would represent the growth of 2% in the year, up to 16 million vehicles, which would put Europe at approximately 25% below the year 2019. In the case of North America, we expect production to improve gradually in the third and fourth quarters with certain recovery in the inventory based on a strong demand. Estimates talk about 7.5 million vehicles in the second semester, 6% more than in the first. 2022 would finish with around 15 million units produced. This is a major rebound of 13%, although we would still be 10% below 2019 levels.
Finally, the Indian market, which has brought special joy, reached pre-COVID levels last year already, with a forecast for the second half pretty similar to the first. 2022 would grow with a growth of 17%, reaching 4.8 million vehicles produced, historical record in the country, and this would make India the world's fourth producer. Globally, we're talking about a better scenario in the second half of the year, 9% better than in the first half of the year in volume, with 42 million vehicles produced versus the 39 million in the first, an improvement that occurs in practically all geographies and that would imply a 2022 with 81 million vehicles, 5% more than in 2021, although a long way from the 89 million in 2019. It's true that the situation is fragile.
It's true that the geopolitical framework is complex. There's inflation, rising interest rates, and there are even new fronts that have opened up, such as the threat of cutting off the Russian gas. It's also true that we're seeing signs of improvement. We're seeing a greater availability of semiconductors, a certain containment in the price of some materials, announcements of a relaxation of the COVID restrictions in China. It's difficult to visualize the net effects of all these positive and negative impacts. At CIE, we are inevitably optimistic. The sector comes from two years of sunken production levels, and we are seeing growth in spite of the uncertainty about the timing. Meanwhile, many of our competitors are suffering. They're suffering a great deal.
We have proved that we know how to make the most of the opportunities of the crisis, and that's why we expect to continue to improve our results in the future. With this message, with this positive message, we come to the end of the conference call. I hope it's been useful. I'd like to remind you that this quarter we have our CEO, Jesús María Herrera, with us to answer your questions during this Q&A session that we're going to open immediately. Thank you very much for your time.
We have several questions. We'll group them together by subject, so to make sure we don't leave any out and in order not to repeat any. We start from the first question, and that is whether we can quantify the impact of the pass-through in the second quarter. The explanation on the sequential margins, Europe and NAFTA fall, China goes up.
Good afternoon, everyone. I'm Jesús María Herrera. It's a pleasure to be here with you all. In reply to the first question, to give a simple answer as usual that everyone can understand, in the first half, we've had EUR 300 million in sales last year, and this is more or less broken down into EUR 100 million for the pass-through you mentioned for raw materials, EUR 100 million in the inorganic growth of our company, and almost another EUR 100 million because of the euro devaluation. Regarding the margins, well, obviously, the performance isn't the same in all geographic areas. The issue of inflation is not the same. The issue of having one technology or another in one country or another also varies significantly.
Let's say nothing significant. We continue to improve in all business units, in all divisions, in all geographic areas. That is why we have produced the record historical results at our company.
What would be the expectations for sales figure be in the second half of 2022 in sales and margins, considering the better second half that IHS implies?
We believe. I can't talk about the numbers, but we expect another historic second half. 2022, although there are all these geopolitical issues that nobody has control over, but 2022 is our year, a tough year, as Lorea said, extremely difficult.
I can assure you that we're under continuous tension because it's not easy with the cost increase, the pass-throughs, et cetera. Management is complicated. We're reducing structure, reducing costs, reducing everything to try to continue to maintain very high margins. These margins we're providing, if we put all the negative things on the table, the margin should have dropped three or four points. A drop of only one point, compared to last year, is a result of the improvements we're carrying out day to day. Regarding the question on the second half, like the first half, it's going to be a bit better than last year. It's going to be a year that's going to be rounded off.
On the one hand, we're going to have a historic record in sales in EBITDA and in net results. I think that we're going to reach a figure we've never reached in our history, and obviously a very significant reduction in debt, even with all the corporate operations and the increase in EBITDA. The investment and cost control we're carrying out means the generation is going to be so significant that we'll be at a net financial debt, EBITDA ratio that will be far below what we had in the month of June.
You have acquired an additional minority stake in Mahindra CIE. Do you consider acquiring 100% and using shares from headquarters from the mother company?
Well, we have respect for our partners. We started on this path together, and we continue together, and we want to continue together. The share price is very low. We've made approximately 20% with what we bought in the first few months. When the share price is low, the best investment there is Mahindra CIE or CIE Automotive. Because if we analyze the corporate operations and the integration of new companies, everything is expensive compared to the shares of CIE and Mahindra CIE. We continue to be the best investment for ourselves, and that's what we're doing. If there's an opportunity, and if our partner puts it on the table, we would obviously acquire a higher percentage within the legal limits that may be established. As I say, they are the best investments, the investments with the best future, the cheapest, to use a term we can all understand.
Regarding the possible gas rationing in Germany, what would your contingency plans be?
I'll let Lorea answer that one.
Talking about gas, the fact is that we are not the biggest gas consumers. To give you a ratio, we have approximately 70% electricity versus 30% gas. Let's see if those cutbacks happen. To give you a figure, in Europe, for example, practically 60% of our consumption is here in Spain, where we foresee fewer availability problems. So of course, we have plans in each and every country.
You need to understand that, each country in turn has a different dependence on Russian gas. We can't compare Germany, where you will know that, we have some plants, but, they have a very limited contribution to the result of the group versus other countries like Romania that, have no dependence, or Spain and so on. We have to stay calm. We'll see the effects, but we don't see anything significant, and that's where we are.
Can we think that the evolution of CIE in China is going to continue to be negative because of the OEM mix? Now, I think that we have to consider this figure you were discussing for China.
We've had a significant growth in China in recent years, and what's happened is that when we integrated Inteva had a problem with a customer, Daimler. Let's say that that issue forbade Inteva from obtaining the replacement of a project, and that's what we're suffering today. That replacement with the Inteva project. Otherwise, we would be on a market level. The roof unit business, they each have a significant turnover. The figure is a reflection that can be explained very easily. Regarding M&A, when should we see a significant reactivation, and in what areas? In M&A, as you well know, it's something we constantly analyze. As I said earlier, everything is extremely expensive.
Good, bad, medium companies with a future and with less of a future, technologies with good results, bad results. The market, as I said, is very complicated. It's true that we have a couple of operations that have made a lot of progress, but they're far from closing. I don't think we'll close any of them this year. Again, the most important investment continues to be ourselves. We are absolutely undervalued. We know our companies, and it's much easier and much cheaper and much more profitable to acquire stakes in our own companies. The rest, well, we're analyzing, looking at things as usual. Managing this sector is very complicated. There are many companies that have been in agony for years and they want to give us something that's in intensive care.
We don't want to integrate things that are in intensive care because the problem is the customer's problem. They're going to lose capacity and customers. If they lose capacity, we gain because we'll have a much bigger negotiating power. We're calm as usual. M&A is an important part of our business. We continue to do it. We continue to work on it. Until there are clear and safe opportunities, we will stay calm.
This is Jesús María Herrera. Well, I think that you made it so clear that there are no more questions. If there are no more questions, I'm being told there aren't, we'll say goodbye for now. Our analysts have a great deal of work with many companies that are publishing today. We'll leave it at this, and you know where to find us if you need us. Thank you all very much. A pleasure. Continue to follow CIE, which continues to be a great project. Thank you all very much.