Stabilus SE Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Akshat Kacker - JPMorgan - Analyst : I'm Akshat from JPMorgan. I have three questions, please. The first one on current trading. Given the uncertainties and market volatility that you have flagged, could you please provide some color on Q1 trading? I think it would generally be helpful considering the wide range that we have on the fiscal year 2025 outlook. Could you just talk about expectations around total growth or organic growth in Q1 and how has the quarter started in terms of margin? The second question is on the margin guidance and thank you for all the details by region, I think it's really helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2024 / 9:30AM, STM1.DE - Q4 2024 Stabilus SE Earnings Call So when I look at your guidance in Europe and North America, I think it tells us that ongoing cost initiatives just offset the incremental cost inflation that we're going to see in fiscal year 2025 without recovering the margin headwinds as such over the last few years. So could you just talk about all the actions that you're taking? And if you could also accelerate some of these measures to reclaim a portion of those earnings? And the last question is on APAC and China. You have clearly mentioned that pricing pressure in the region is higher than expected and generally when I think about China, it hasn't been an easy market for Western players specifically over the last two years. So how do you think about sustainable margins in the region and what makes you confident that the ongoing margin performance of the region is around that 15% to 17% level and not the 10% to 12% range?

Question: Akshat Kacker - JPMorgan - Analyst : Thank you, both. Yes, it does. Thank you.

Question: Marc-Rene Tonn - Warburg Research - Analyst : Yes. Good morning. Thank you for taking my questions as well. Perhaps coming a bit back on growth. When we look at your guidance, I think at midpoint and considering the around EUR100 million you probably still expect as a tailwind from the DESTACO acquisition. You're probably guiding more towards organically a slight decrease in revenues rather than an increase. But if you could give us some indication, which sectors or target industries you're seeing performing a bit better and which are a bit more difficult? And perhaps you can also give us some reinsurance that when we look at the order intake that we are still currently gaining more orders when compared to your current market share, whether this statement still holds. The second question would be on the free cash flow target for the current year. I think very promising particularly when considering that you had alluded that you expect some rewinding of some temporary positive effects, which supported last year for the free cash flow. Has that changed or is it really just an underlying very strong expectation we also should expect for the current year? And then just coming to your long-term 15% EBIT adjusted margin target. Given that probably things like price pressure, inflationary cost pressure is something which will probably stay there also in the future, what would you see as the major ingredients to improve the margins from the 12% last year, 12% at midpoint of the guidance for this year to regain these 3 percentage points, which you have lost? Where will you be the main driver to get that back? Given the technical improvement of the product longer term that should support, is it business mix? Any information would be helpful there.

Question: Yasmin Steilen - Berenberg - Analyst : Good morning, all. Thanks for taking my questions. I have three questions if I may. So first, coming back to the sales guidance. You mentioned automotive should be flattish in terms of sales. However, the lower end of your guidance point to a sales decline in the ballpark of 8% stripping out DESTACO. So could you elaborate what the volume price assumptions are reflected in this range? And does this lower end also reflect potential impacts from strike actions for example at Volkswagen Group? Then the second question coming back to the margin development. Profitability in automotive seems not below 10% adjusted EBIT margin in the last year and your guidance implies further deterioration. Could you provide us a more precise update on your own automation projects in particular for Powerise, and how should we think about a sustainable automotive margin midterm? And finally, on cost synergies, integration costs seem to come in not below the initial guidance range at around EUR6 million. Could you provide us an update on the expected sales and cost synergies? And what is baked into your fiscal year guidance for the current year?

Question: Yasmin Steilen - Berenberg - Analyst : Yes, very clear. Thank you.