Standard Profil - comment

Headline numbers from Friday’s release are strong, with the Gross Profit margin inflated by a reversal of the IAS 37 impact. Despite this reversal from Q1 23, the Gross Profit margin improved year on year, ahead of our margins. This compensated for the slightly lighter revenue number for Q4 than we had anticipated. Cashflow was further boosted by an inflow from working capital, a c.€10m differential from our forecasts. 

Leverage has improved, dropping to 3.5x on a pre-IFRS 16 basis. More importantly, the order book increased with €76m of new orders in Q4, resulting in FY23 beating the record level recorded in FY22. Standard Profil continues to demonstrate its ability to win new contracts. Tesla and VW are now the largest two customers, with 17.5% of revenue for each, with Ford at 11%, leaving the top 3 at c.50% of revenue.  

Guidance is likely to be expanded on the call on Thursday (1 pm UK time), but the Company notes market analysts anticipate only minor growth rates in global car production due to persistently challenging market conditions and macroeconomic uncertainties.

Bonds have rallied this morning on the back of management's comment that "to further enhance our financial profile, we are exploring various options around refinancing our existing indebtedness before its maturity".