Q2 2024 CIE Automotive SA Earnings Call Transcript
Key Points
- CIE Automotive SA (CUOTF) reported a growth in sales at constant exchange rates of 2.5% in the second quarter and 3.1% in the first half of 2024, outperforming the market by 3 points.
- The company achieved an EBITDA margin of 18.6% over sales in the second quarter, showing an improvement compared to both the second quarter of 2023 and the first quarter of 2024.
- CIE Automotive SA (CUOTF) has maintained a well-balanced geographic distribution in sales, with a gradual dilution of Europe in favor of American and Asian markets.
- The company reported a 3% growth in net income in a challenging interest rate environment, reaching EUR184 million in the first half of 2024.
- CIE Automotive SA (CUOTF) continues to deleverage, with a debt ratio of 1.45 times net financial debt over EBITDA, below their usual comfort zone of 2 times.
- The European market experienced a contraction of 6% in the second quarter, with a forecasted overall contraction of 5% for 2024.
- Brazil faced a 2% drop in production in the first half of 2024, impacted by poor export performance and increased imports of Chinese vehicles.
- The Chinese market is experiencing an intense price war, with prices estimated to have reduced by 20% on average compared to last year.
- CIE Automotive SA (CUOTF) underperformed in the Chinese market due to the growth of local Chinese customers and suppliers, which are not profitable for the company.
- The company faces challenges with high labor costs in various markets, including Europe and the United States, impacting overall profitability.
Good afternoon, everyone, and welcome to the results preparation, the second quarter 2024 at CIE Automotive. Today, we have Ms. MarÃÂa Herrera, CEO; Lorea Aristizabal, Director of Corporate Development. At the end, there will be a Q&A and then the questions can only be asked, inviting would provide the tool provided in the webcast. And now I'll hand over to Lorea. Go ahead, please.
Hello. Good afternoon, everyone, and welcome back to the conference call on the results for the second quarter. We can start if you agree by reviewing the market situation. In this second quarter, global production has shrunk by half a point compared to the second quarter of 2023 with a clear dispersion between markets with the Mexican and Asian markets that show a strong growth going versus markets like the European or the Brazilian markets that have fallen. Let's look at the details.
Starting with European and the CIE market with the worst performance in the second
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