Antolin - comment

Antolin’s Q2 2024 were held back by weaker-than-forecast vehicle sales, but cost control meant EBITDA (and margins) beat our expectations. We will be looking for a steer on the call this afternoon on how management expects demand to evolve over the rest of the year. The results were the first after its debt refinancing and issuance of its new €250 million senior secured notes. Revenues were €1.1 billion (-10%) below our expectation of €1.3 billion due to a weak market for light vehicles and production delays from EV programs with both Product Systems and Technology Solutions below Sarria estimates. However, despite weak top-line growth, Q2 2024 EBITDA came in at €97.2 million (ahead of our projection of €83 million) due to cost cuts within the supply chain and cost initiatives. Antolin burned €27 million of cash due to higher-than-expected working capital swings, but liquidity was strong at €421 million (including €92 million from proceeds for asset sales in July 2024). Net leverage remained at 3.3x. While execution seems sporadic at best, the company is raising cash from asset sales which is in line with our thoughts on the credit in the past.