Gestamp, the multinational specialized in the design, development, and manufacture of highly engineered metal components for the automotive industry, announced today the 2024 first quarter results. The reported figures confirm that the path of the business since its IPO in 2017 has been uninterruptedly positive and it has substantially increased its positioning in the global automotive market.
Francisco J. Riberas, Executive Chairman of Gestamp: “These quarterly results confirm our leadership position to continue outperforming the market and our commitment to meet the guidance for 2024. This sustained growth allows us to continue strengthening our financial structure to ensure future developments and the execution of our strategy. Since our stock market debut, we have diversified our geographic presence and have focused on technology, innovation and talent to develop new solutions that have enabled us to differentiate ourselves by supporting our customers.”
Gestamp consolidates its growth path
Gestamp's revenues between January and March 2024 stood at €3,049 million, with solid organic growth (excluding the impact of the exchange rate) that has allowed the company to outperform the market, once again, by 3.9 percentage points.
The strategy of geographic diversification and specialization in its products and services has allowed Gestamp a solid growth trend in its sales above the market, which has achieved a 5.9% CAGR (Compounded Annual Growth Rate) since 2018.
EBITDA between January and March amounted to €315 million, with a 10.3% profitability (excluding the impact of the Phoenix Plan). Reported EBIT for the period was €135 million and Net Income reached €55 million.
Improvement in NAFTA as a strategic priority
As announced in the 2023 annual results presentation last February, Gestamp is executing the Phoenix Plan. The objective of this initiative is to restructure the business in NAFTA, which is currently not aligned with the results performed by the rest of the markets where the company operates.
During the first quarter, expenses derived to the Phoenix Plan amounted to €4.4 million. This figure represents 13.3% of the €33 million of operating expenses foreseen in this plan for the 2024 financial year.
Financial discipline
Gestamp's strategy to reduce its leverage has continued in the first quarter of the year. The decrease has been recorded in absolute terms, both at the level of net debt (-1.4%) and gross debt (-14%) compared to the first quarter of 2023. The leverage level in the first quarter of 2024 was 1.7x net debt-to-EBITDA, with a slight increase compared to the end of 2023, which is mainly due to the seasonality of the business in the quarter. The company reiterates its commitment to maintaining a solid balance sheet structure for the year, with an expected leverage of between 1 and 1.5x net debt-to-EBITDA, which will enable the multinational to achieve its targets for the full year.
This approach of excellent financial discipline has been acknowledged by rating agency Moody's, upgrading Gestamp's rating from Ba3 with a positive outlook to Ba2 with a stable outlook last March. The upgrade of Gestamp's rating highlights the group's balance sheet discipline and cash generation despite a highly volatile market environment.
Market forecast
Estimates for 2024 remain steady, with production volumes that will be similar in absolute value to those of 2023, leading up to 2025, when vehicle production will start to grow. Therefore, 2024 remains as a transition year.
In this context, Gestamp reiterates its commitment to meet the guidance for 2024, maintaining market outperformance in the low-single digit range in the regions where it is present, preserving the profitability of the automotive business, a free cash flow of around €200 million and a leverage level between 1 and 1.5x net debt-to-EBITDA.
Shareholders meeting: dividend approvement
Gestamp has held its Annual General Shareholders Meeting today, during which the Individual and Consolidated Accounts of Gestamp for the year 2023, have been approved. Additionally, among other agreements, the distribution of a supplementary dividend in July in the gross amount of 0.0773 euros per share has been approved. The total dividend payment has been 0.1473 euros gross per share, fulfilling our commitment announced in the CMD of a 30% net profit payout for the year.