The automotive supplier Stabilus started the new financial year with an increase in sales and earnings.
The Koblenz company particularly benefited from the takeover of the US industrial service provider Destaco. Revenues climbed by 6.7 percent year-on-year to 326 million euros, the company announced on Monday. However, sales fell by 5.8 percent due to our own efforts.
“The challenging market environment that prevailed in the last financial year is currently continuing in many of our target industries, especially in the automotive sector,” explained company boss Michael Büchsner. This is particularly evident in the Asia-Pacific (APAC) region. A shift in the product mix is having a particularly negative impact. This is due, among other things, to the current weak demand for premium vehicles with appropriate comfort features. However, stronger development is expected for the second half of the financial year, added CFO Stefan Bauerreis.
The stock lost more than six percent in early trading and later turned significantly positive. Most recently, the price rose by more than two percent, making it one of the biggest winners in the SDax, the index for smaller companies.
JPMorgan expert Akshat Kacker particularly pointed out the below-average performance in the Powerise area of drive systems. Marc-René Tonn from Warburg also expects explanations for the sharp decline in sales here. According to analyst Stephen Reitman from the US analysis firm Bernstein Research, Stabilus SE slightly missed the consensus estimate in terms of sales. However, the automotive supplier performed better in terms of profitability.
Earnings before interest and taxes (EBIT), adjusted for special effects, increased by 13.5 percent to 37.8 million euros in the first quarter. The bottom line was a profit of 14.3 million euros after 12.2 million in the previous year.
For the current 2024/25 financial year (end of September), the trunk gas spring specialist is still targeting sales of 1.3 to 1.45 billion euros, after 1.31 billion in the previous year. 11 to 13 percent should remain as operating profit (adjusted EBIT). In the worst case scenario, Stabilus would be less profitable than in the past financial year with a margin of 12 percent.
Stabilus has suffered in recent months from slower demand from major car manufacturers. Many of the manufacturers are struggling with sharply declining sales figures – due, among other things, to weak demand in the important Chinese market.
Stabilus was also affected by sharp increases in wage and material costs. The group had therefore introduced numerous measures to reduce expenses and increase its own productivity. This also included price negotiations with our own suppliers and increasing automation.
Stabilus cost $680 million to purchase Destaco, a provider of automation and clamping technology products. With the help of the US company, Stabilus wants to expand its industrial business and, according to its own statements, further strengthen its position as an industry leader in this area.
Warburg Research leaves Stabilus at ‘Buy’ – ‘Solid start’
According to figures for the first quarter, the analysis house Warburg Research has left Stabilus at “Buy” with a price target of 58 euros. The automotive supplier made a solid start to the new financial year in a very challenging environment, wrote analyst Marc-Rene Tonn on Monday. However, an explanation is needed for the rather sharp decline in sales in the Powerise division. The main question is when a return to growth can be expected.
Bernstein leaves Stabilus at ‘Outperform’ – target of 48 euros
The US analysis house Bernstein Research has left the rating for Stabilus at “Outperform” with a price target of 48 euros based on quarterly figures. Sales fell slightly short of the consensus estimate, analyst Stephen Reitman wrote in an initial reaction on Monday. However, the automotive supplier performed better in terms of profitability.
The Stabilus share temporarily gained 2.42 percent to 31.75 euros in XETRA trading.
KOBLENZ/HAMBURG (dpa-AFX) / NEW YORK (dpa-AFX Broker)
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