in accordance with the market

Gestamp reported 2Q24 results that were fully in line with market consensus, except for net profit, which was reduced by a significant increase in results driven by minority interests due to several factors, including hyperinflation in Turkey.

The quarterly results show a decline in billings of 1% in 2Q24 and 2% for the full semester (-1.7% in Automotive), in a context where global production grew by only +0.5% in 1H24, but with a significant decline in Western Europe (-4.6%), a market in which Gestamp has a more significant presence, but in Gestamp the company recorded a stronger performance than the market: its sales in the Automotive division grew by 5.1% for the semester at constant exchange rates (+4.6% “outperformance” in 1H24 and +6.4% in 2Q24 (unchanged). Gescrap sales fell by 10% due to lower scrap prices, although the company managed to maintain its results thanks to margin expansion.

EBITDA for the quarter thus fell by 9% to €331 million and by 8.3% to €641 million for the semester as a whole, a decline that would narrow by 6.5% if we exclude the extraordinary costs of the Phoenix Recovery Plan. profitability in North America (€339 million in 2Q24 and €654 million in 1H24, adjusted). We highlight the low adjusted EBITDA margin for 2Q24, which reached 11% of turnover (10.6% in 1H24), improving by 80 bps compared to 1Q24 and only 65 bps below 2Q24, despite the requirements of the comparison, as 1H23 was particularly positive in an environment of strong volume recovery. The positive dynamics are particularly evident in Asia and NAFTA, where the recovery of profitability following the implementation of the Phoenix Plan is developing very positively.

Free cash flow adjusted for exceptional items reached €77 million in 2Q24 (€69 million unadjusted), ending the semester at -€54 million (€66 million unadjusted) and allows the company to maintain its guidance of over €200 million for the year as a whole, while simultaneously resulting in a €41 million reduction in DFN in the second quarter.

The second half of the year’s automotive market outlook is gradually deteriorating, with a 2% decline expected in the second half of the year, so Gestamp will have to continue to grow above it and improve its efficiency to achieve its annual targets. For now, and until we adjust our estimates, we maintain our target price and value recommendation. In the review.

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Alvaro Aristegui
Tel.: 91 398 48 05 Email: client@renta4.es