Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GVS SpA (STU:4YQ, Financial) reported a 3.2% increase in first-quarter sales compared to the previous year, despite facing exceptional events that delayed sales.
- The company achieved a 21.6% increase in net income, reaching 12 million, with an improvement in marginality from 9.5% to 11.2%.
- EBITDA improved from 24.3 million to 25.8 million, marking a 6.1% increase and a 70 basis points improvement in margin.
- The company is on track to reduce its leverage ratio below 2 by the end of the year, indicating strong financial management.
- GVS SpA (STU:4YQ) has a positive outlook for the second quarter, expecting to recover from the first-quarter delays and maintain its growth trajectory.
Negative Points
- The energy mobility segment is currently underperforming, with the company acknowledging challenges in this area.
- The safety division's growth was below expectations at 4.9%, compared to the anticipated 9%, due to order timing issues.
- The company's net financial position was flat during the first quarter, with cash generated being absorbed by an increase in stock.
- There were production delays in the Monterrey plant, impacting sales by approximately 2 million, which the company aims to recover.
- The acquisition of Boreus had a dilutive impact on EBITDA margin by around 70 basis points.
Q & A Highlights
Q: Can you clarify how much of the 3.2% growth is like-for-like and how much is linked to M&A?
A: Calculating like-for-like growth can be misleading due to intercompany sales adjustments. The guidance remains mid-high single digits, around 7-8%. The first quarter's lower growth was due to specific events, including a delay in the Boreas project and production issues in Monterrey, which are expected to be resolved in the second quarter.
Q: Can you provide more details on the safety division's performance and the exceptional event in Monterrey?
A: The safety division's order book is full, and the delay was due to an order delivered at the start of the second quarter instead of the end of the first. The Monterrey issue involved broken molds, delaying deliveries, but this has been resolved, and recovery is expected in the second quarter.
Q: What is the EUR/USD exchange rate embedded in your guidance?
A: The guidance assumes a EUR/USD exchange rate of 1.10. Additionally, 75% of the US dollar cash flow is hedged at a rate of 1.08, minimizing cash impact.
Q: Can you provide a trading update for April and May, and confirm the expected revenue impact from Boreas?
A: April and May are aligned with guidance, and Boreas is expected to contribute between 25 and 30 million euros annually, equating to about 2.5 million euros per month.
Q: Regarding tariffs, have any remedial actions been taken, and how do regulatory approvals affect your business?
A: No specific actions have been taken regarding tariffs yet, as the impact is minimal. Regulatory approvals are standard for selling in US states and were required due to the asset deal nature of the acquisition, which has now been completed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
