CIE Automotive SA (CUOTF) Q3 2024 Earnings Call Highlights: Strong Margins and Debt Reduction ...

• Revenue Growth: Turnover at a constant exchange rate rose by almost 2% in the third quarter.

• EBITDA Margin: Improved to 18.6% in the third quarter.

• EBIT Margin: Increased to 13.8% in the third quarter.

• Net Profit Growth: Increased by 2% for the first nine months of the year, with a comparable perimeter increase of more than 6%.

• Operating Cash Flow Growth: Grew by more than 3% compared to the same quarter the previous year.

• CapEx: Higher due to the new plant in the north of Mexico.

• Dividend Payment: EUR54 million paid out in the third quarter.

• Net Financial Debt: Reduced by EUR15 million in the third quarter, leaving it at EUR1.06 billion.

• Leverage Ratio: Reduced to 1.43 times net financial debt over EBITDA.

• Warning! GuruFocus has detected 3 Warning Sign with CUOTF.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• CIE Automotive SA (CUOTF) reported a significant outperformance in turnover at a constant exchange rate, rising by almost 2%, which is around six points above market expectations.

• The company achieved significant improvements in EBIT and EBITDA, growing by 2% and 3% respectively, with margins reaching 18.6% and 13.8%.

• CIE Automotive SA (CUOTF) has successfully managed its net financial debt, reducing it by EUR15 million in the third quarter, resulting in a historically low leveraging ratio of 1.43 times net financial debt over EBITDA.

• The company has seen strong growth in key markets such as Mexico, Brazil, and India, with Mexico showing a 7% growth in vehicle production and Brazil experiencing a 17% growth in the third quarter.

• CIE Automotive SA (CUOTF) has maintained a high EBITDA to operating cash conversion rate of close to 66%, demonstrating strong cash flow management.

• The European market has been challenging, with a 7% drop in the third quarter and an expected 11% decline in the fourth quarter, impacting overall performance.

• The United States market has faced a 5% decline in vehicle production in the third quarter, influenced by the Stellantis destocking strategy and political uncertainties.

• China's market remains difficult despite subsidies, with a 3% fall in production in the third quarter and ongoing fierce price competition affecting performance.

• The company has faced increased financial expenses in the third quarter, partly due to negative contributions from derivatives and foreign exchange impacts.

• CIE Automotive SA (CUOTF) has experienced a slowdown in improvements in the Chinese market, with ongoing underperformance due to customer mix and market conditions.