Gestamp, the multinational specialized in the design, development and manufacture of highly engineered metal components for the automotive industry, presented today its results for the third quarter of 2024. During this period, despite the unexpected drop in light vehicle production volumes and the negative impact of foreign exchange, Gestamp has maintained its revenues quarter by quarter and achieves revenues of €2,787 million between July and September 2024.
Francisco J. Riberas, Executive Chairman of Gestamp: "These quarterly results reflect the uncertain and volatile moment that the sector is going through and the slowdown in the transition to electric vehicles, generating a scenario of instability. This context has led us to react in order to optimize our operations in this environment, in which we expect to close the year with a level of revenue in line with our objectives ".
Stable revenues despite the context
During the first nine months of the year, Gestamp achieved revenues of €8,927 million, with above-market growth of 6,3 percentage points (at FX constant); driven by geographical diversification and an innovation-based strategy. These figures are achieved despite a context of transition for the automotive industry, with an uncertain outlook in the short term as a result of volatility in some of the markets in which Gestamp operates. Between January and September 2024, light vehicle production volumes reached 59.7 million vehicles, pre-COVID levels, due to the drop in global demand. In particular, if vehicle production volumes of the first nine months of 2024 are compared with the same period in 2023, the decrease is -0.6%.
The company’s revenue performance remained stable at €2,787 million in Q3 demonstrating the resilience of its business model to the slowdown in electric vehicle penetration and negative forex impact during the year.
In this scenario, the company’s profitability and cash flow have been affected, with an EBITDA of €299 million (excluding the impact of Phoenix Plan) and an EBITDA margin of 10.7%. Free cash flow is €-214 million, excluding the Phoenix Plan, due to the decrease in EBITDA and negative currency fluctuations. However, the company’s forecast is that cash flow will improve significantly in the fourth quarter.
Phoenix Plan in NAFTA
One of the company’s main levers is the implementation of the Phoenix Plan in NAFTA, in line with its objective of increasing the profitability of this market to the same levels as the rest of the regions where the company operates. The plan remains on track, confirming the objectives previously set.
Despite the general decline in the market in terms of light vehicle production volume, with a -2% in NAFTA in the third quarter of 2024, the forecast is to close the year with an EBITDA margin similar with that reported in 2023.
Strategy adapted to the changing context
These results are marked by the deterioration of market conditions throughout the year, a fact that has led to an unstable scenario with short-term forecast. The volatility caused by the decrease in the penetration of electric vehicles, especially in Europe; and currency fluctuations, together with global geopolitical instability, are leading to a current scenario of slowdown.
In this context, Gestamp is focused on preserving its financial strength and maintaining its profitable and sustainable growth, as committed at the last Capital Markets Day. To this end, it has updated its expectation to adapt to the current situation. Under this premise, Gestamp expects to close 2024 outperforming the market by a low-single digit range and a slightly below 2023 EBITDA margin, generating positive free cash flow and preserving a leverage level of 1.7x net debt to EBITDA.
Gestamp maintains its strategy of improving efficiency, enhancing flexibility in operations to respond to market volatility, and thus protecting the company’s profitability while implementing a strategy based on balance sheet discipline and selective cash generation of investments to preserve its financial strength.