Q3 2024 CIE Automotive SA Earnings Call Transcript
Key Points
- 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.
Welcome to the conference call for the results for the third quarter here with us. At the end of the presentation, there will be a round of questions, and the questions can only be asked by the tool provided in the webcast. Now hand over to Lorea. Go ahead please.
Good afternoon, everyone and welcome to the conference call on the results of the third quarter and we can begin by reviewing the market situation. A situation which again this quarter has not been at all homogeneous with markets like the Mexican, Indian and Brazilian market with a much better trend than the average and markets like the European, US or Chinese markets are evolving more in line with or even worse than the average.
Let's start with Europe, which is the geography with the worst performance with a drop of 7% in the third quarter and 5% in the first nine months of the year. A form framed by a context of inventory normalization, undecided this by the consumer regarding which
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