Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Montana Aerospace AG (XSWX:AERO, Financial) achieved a net sales increase of more than 17% for continued operations compared to the previous year.
- The company's adjusted EBITDA grew by over 44%, indicating a faster growth rate than net sales.
- The aerostructures segment experienced a net sales growth of more than 22%, with an adjusted EBITDA increase of over 68%.
- The energy segment saw a sales increase of 10% and an adjusted EBITDA growth of 35%, benefiting from strong market demand.
- Montana Aerospace AG (XSWX:AERO) successfully signed the sale of its loss-making e-mobility segment, which is expected to close in the fourth quarter of 2024, allowing for debt reduction and strategic investments.
Negative Points
- The aerospace market remains volatile, with lower build rates from major customers like Airbus and Boeing impacting sales.
- The company anticipates a reduction in sales by EUR50 million to EUR70 million due to lower rates from major OEMs.
- The e-mobility segment, although sold, showed a negative impact on net income, with a loss of over EUR20 million.
- Montana Aerospace AG (XSWX:AERO) faces challenges in managing supply chain instability and requires clarity from OEMs to plan resources effectively.
- The company's net debt increased slightly due to higher inventory levels, impacting free cash flow, which was negative in the first half of the year.
Q & A Highlights
Q: Can you explain the strong Q2 margin performance in the aerostructures segment, given the low rates? Is there any upside risk to the EBITDA guidance for the year?
A: Michael Pistauer, Co-CEO & CFO, explained that despite the volatile market, Montana Aerospace achieved better EBITDA margins through good industrialization and new market share wins. There were no extraordinary factors affecting Q2 margins. Kai Arndt, Co-CEO, added that the company is improving margins by optimizing production locations and insourcing supply chain elements, aiming for a 20% margin by 2025.
Q: How should we model aerostructures revenue for Q3 and Q4, considering the impact of space and other factors?
A: Michael Pistauer indicated that the company expects around EUR900 million in aerostructures revenue for the year, with Q4 anticipated to be the strongest quarter. The guidance suggests a quarterly average slightly below EUR250 million, with Q3 expected to be lower than Q4.
Q: Regarding the e-mobility segment, how does its performance compare to the plan, and does it affect the timing or terms of its sale?
A: Michael Pistauer stated that the sale is based on a fixed price structure, and the first half of the year was expected to be weak. However, the second half is projected to show better performance, aligning with the original guidance.
Q: What is the current view on the energy segment's importance in the portfolio, and are there plans similar to the e-mobility segment's sale?
A: Michael Pistauer mentioned that while there is interest in the energy segment, no decision has been made yet. The company is focusing on developing the segment, which shows strong growth potential. They remain open to opportunities but are not in a rush to sell.
Q: What is the CapEx guidance for this year, and how should we expect free cash flow to develop in the coming quarters?
A: Michael Pistauer provided a CapEx guidance of EUR60 million to EUR70 million. He explained that free cash flow is expected to be positive for the full year, with improvements in trade working capital and EBITDA in the second half. The strongest cash flow is anticipated in Q4, similar to previous years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
