Gestamp Reports Revenue Decline in First Half of 2023

On July 28, Spanish automotive parts manufacturer Gestamp announced that its revenue for the first half of this year reached €5.844 billion, down from €6.14 billion in the same period last year. The company's EBITDA was €641 million, slightly lower than €642 million last year, resulting in an EBITDA margin of 7.1%. Net profit fell to €75 million from €106 million last year. Despite facing negative exchange rate impacts and fluctuations in some core markets, Gestamp managed to reduce its net debt from €2.191 billion last year to €2.141 billion this year. The net debt to EBITDA ratio stood at 1.7 times, marking the lowest level for the first half since adopting IFRS 16. Positive free cash flow reached €99 million. In the second quarter, Gestamp reported an EBITDA of €343 million with a 12% EBITDA margin and positive cash flow of €182 million. Gestamp's Executive Chairman, Francisco J. Riberas, stated that despite severe industry challenges, the company remains focused on maintaining its leadership in a rapidly changing sector while strengthening its balance sheet and improving profitability. Efficiency improvements and cost control measures have reflected positively in their financial performance, and the strong free cash flow generation in Q2 has reinforced their robust financial position. In the first half of the year, light vehicle production increased by 3.7%, primarily driven by the Asian market, despite significant declines in Europe and the NAFTA region. Despite facing high uncertainty and limited market growth, Gestamp's financial performance allows it to reaffirm its commitment to achieving set expectations for 2025. The company aims to maintain its automotive business profitability at levels consistent with the end of 2024 and generate free cash flow comparable to that year. Additionally, Gestamp's strategic focus is to achieve an EBITDA margin of around 8% by the end of 2025. To enhance its balance sheet, Gestamp has signed an agreement with Santander Bank, under which the bank will acquire minority stakes in four of Gestamp's companies holding real estate assets in Spain, investing €245.5 million upon completion of the agreement in September. This transaction is expected to reduce Gestamp's net debt, aligning with the company's commitments made during its 2023 capital markets day.