Release Date: November 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stabilus SE (WBO:STA2, Financial) achieved record sales and a strong free cash flow in fiscal 2024, despite challenging macroeconomic conditions.
- The integration of the recent acquisition, Dako, is on track, contributing significantly to revenue and margin improvements.
- The company reported a 14% sales growth in the Asia Pacific region, highlighting strong performance in that market.
- Stabilus SE successfully refinanced a 250 million bridge loan, which was oversubscribed, securing favorable rates.
- Innovations in product offerings, particularly in automation and electrification, are well-received by the market, driving future growth.
Negative Points
- The economic situation in EMEA and the Americas was soft, impacting overall performance in these regions.
- Organic revenue experienced a downtrend of 2.4% globally, excluding recent acquisitions.
- Adjusted EBIT margin decreased from 14% to 12.5% in Q4, partly due to negative FX impacts.
- The company faced significant inflation-related increases in labor costs, particularly in regions like Mexico and Romania.
- There was a notable reduction in profit due to purchase price allocation and increased interest expenses from higher debt levels.
Q & A Highlights
Q: Can you provide more details on the cost actions planned for the upcoming year across Europe and North America?
A: Dr. Michel Buchsner, CEO, explained that the focus will be on materials management and controlling labor costs. They expect a material price reduction of 1.5% to 2% and labor inflation of about 3.5% to 4%. These measures are being intensified through supplier conventions and automation activities.
Q: What impact could a second Trump presidency have on your North American business?
A: Dr. Michel Buchsner, CEO, noted that while a second Trump presidency might increase volatility, Stabilus is well-prepared. The company has adjusted its operations and has a strong presence in the US with the acquisition of the US-based company, this take. The strategy of "in the region for the region" is expected to mitigate potential impacts.
Q: Can you discuss the trends in China and the outlook for the Powerise business in FY 2025?
A: Dr. Michel Buchsner, CEO, highlighted that Powerise saw significant growth in Q4, driven by successful wins in China against local competition. The company expects continued double-digit growth in FY 2025, supported by strong order books and increasing demand for actuation systems.
Q: What are your expectations for margin development in FY 2025, considering potential volume weaknesses?
A: Dr. Michel Buchsner, CEO, stated that they expect stable performance with some positive signs in Asia Pacific. The focus will be on material and labor cost management, with pricing expected to be neutral. The company anticipates stable sales in Europe and North America, with potential upside in Asia Pacific.
Q: Can you provide clarity on the integration costs for this take and the expected impact on EBIT?
A: Dr. Michel Buchsner, CEO, mentioned that integration costs were below initial guidance, with about 4 million spent in the last fiscal year. They expect to remain below the 10 million initially projected, with further costs anticipated in the next two quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
