Montana Aerospace AG

Thank you very much and a warm welcome from my side, Michael Pistower, my name, co-CEO and CFO of Montana Aerospace. I will guide you together with my colleague, Kai Arndt, co-CEO of the company through today's earnings call for the first quarter 2024. We're very proud to present today's quarterly results and happy to answer any questions after the presentation. Let me directly jump into the key financial highlights of the first quarter 2024. And here you see that, again, we can probably present the growth within the most crucial KPIs, so like net sales and EBITDA or net income. And to start with net sales, here we have a growth in comparison to last year's first quarter of, again, double-digit 12%. to almost 400 million for the first quarter. And let me explain it like this. We had the growth exactly at the right areas, exactly there where we wanted it. And this is the reason when you have a look at the adjusted EBITDA, why we grew over proportionately on the adjusted EBITDA. Strong growth came, as you will see later in the details, in the segment aerospace mainly, followed by Energy in these areas where over-proportional EBITDA is also resulting, ending the first quarter with 38.2 million adjusted EBITDA or reflecting a growth of over 60% on a year-on-year change. Very proud and according also our guidance, a positive net income. We guided for 2024 on a positive income for the total year, but we show it in comparison to last year, also in the first quarter, and it's 2.7. It's a clear growth in comparison to the negative net income in 2023. Cap expense, more or less the same, I would say, level of what we had last year, absolutely in line with our guidance and the internal plans for 2024. It's set beside the... Capacity expansion in energy, all major CapEx projects are finished or closed, either the ramp up or are already in the production phase, in the serial production, and therefore in tendency in comparison to the last years, a much lower CapEx is resulting, which is sustainable capital maintenance, and as I said, expansion in the energy segment. Great working capital. And please note that trade working capital total assets net debt as shown here on the slide are always compared to the last quarter 2023. Yes, there is an increase in the trade working capital to a level of 346 million. But if you compare it to the first quarter 2023, where the amount was 391, you see what we guided. But since the year 2022, we gradually, continuously reduce the trade working capital and streamline it to a more normal level in the different segments where we think that we have then to finalize, I would say, find the right levels by the end of the year 2024 and gradually develop in the right direction. Total assets, also the same picture. more or less the same amount, but in comparison to last year, to the refinancing, the structuring of the balance sheet, we reduced approximately 200 million of total assets, balance sheet sum, less debt, to be fair. And in comparison to last year's first quarter, which was at the level of 2 billion and 120 million, we see that around 200 million total assets were reduced. The net debt position slightly increased or increased in comparison to last quarter 2023, so last year's final numbers. But we had some, I would say, optimization programs in place by the end of the year in comparison to last year's first quarter. The net debt was those days 391 million. We see the positive cash flow over 12 years running time, but with now a net debt of 322. So therefore, we reduced on a year-to-year basis around 70 million on net debt position, reflecting the positive cash flow structure of our business in general and also then here in the numbers in detail. Free cash flow, yes, we had a very negative free cash flow in 2023 due to optimization topics which were taking place in the end of 2022. As I said, also some of it was taking place at the end of 2023. Therefore, a negative free cash flow for the first quarter, which will level out over the next quarters to come to end up with as our guidance is clearly indicating, a positive free cash flow for the total year, which was already positive also in the last year, 2023, but on a higher level to be expected for 2024. Let me shortly show the total numbers in a, I would say, time row in the comparison on a year-to-year basis. Here, the gross plan of Montana Aerospace as a group clearly is seen. We grew net sales over the last three years or four years by 134%, another 12% in the last year comparison. And what is more important and what we are really proud of and what we always guided is that with every single euro sales additionally, we over proportionately fill not only our capacities but earn more EBITDA, and therefore this is resulting in a not only better margin level, but therefore also in an overproportional growth of EBITDA, which was almost tripling in the last three, four years, and over 60% growth in the last year in comparison to first quarter 2024. Saying that, I would like to hand over to Kai giving you more details on the first segment, our most important and name-giver, Aerostructures, to give you some details and background and also development discussion on this segment and with the customers and other tendencies. Please, Kai.

Yeah, good morning from Canton in Georgia. So you might know in Canton we have the origin of the aerostructures segment and we are operating roughly 20 exclusion presses here. I hope the connection will be stable over the course. It's important that I'm here because I can see by hand what is the current demand coming from the suppliers who are delivering to the big OEMs. So here we see on a day-to-day basis what is happening in terms of the demand from the big OEMs, but also from the suppliers in the market. And I'm pretty sure some of your questions will be related to what we see in terms of the rate 737, 787, but even also for Airbus. So I will come back later to this one. We are starting in the aerostructure segment with a picture, and you might say, well, okay, it's a bit boring and maybe not too sexy what you see here on the picture. But this picture, I think, explains in a very simple way what we think is our USP for the market. So every single structural part you see on the picture is built by us. So that means that we extrude every of the parts, we machine every of the parts, we surface treatment every of the parts, and we also assemble then the complete cross structure for the A350 freighter. So that's the latest big package we won and we delivered in time to our dear customer, Airbus Aerostructures. So this picture shows what we call the USP of Aerostructures and what we think why we get more and more work packages like this into our company. So that's a real success story. And this is why I thought this picture was worth to show what we do and why we are successful winning new packages. And based on this USP, also this year we won some quite significant packages again. And this is why we saw that it's a good start for this presentation. What does it mean in terms of numbers? If we go to the next page, definitely you see the good development in the aerostructures segment. We are proud that we are in line with our strategy, even though the times are really challenging and giving us some headaches in terms of what is coming from the big OEMs in terms of rates. And it's not the demand I'm focusing on, it's more the volatility of information you get So it's very unstable, and the communication about what is really demanded over the year is not really concrete, and that's giving us some headaches. I will also come to this a little bit later. You see the year-on-year development, as mentioned by Michael Pistow already. So the growth and net sales is in line with what we guided, but even more important, you see the EBITDA growth. and this is definitely based on the volume. If the volume is kicking in, you see that our industrial model is delivering. So the performance in terms of what we deliver is quite significant and it is good. Unfortunately, as mentioned, with the rate developments in the market, we definitely see that in the second quarter and maybe also across the year, We don't see the big ramp up in the 737. In the last call, we already mentioned that we were more conservative in our guidance, so it will not hit us as hard as maybe others, but there will definitely also an impact on our side. What means impact? It means that in terms of net sales, Currently, if we don't mitigate the impact, we see an impact of let's say 30 to 60 million over the year in net sales. But as we are very diversified and we still have energy and also the automotive sector in our portfolio, we definitely think that we can mitigate the impact on the EBITDA. to a certain extent, so that's very good. But for the net sales, we definitely see a drop in terms of the demand from the big OEMs. This is what we will manage over the year, but I'm quite positive that we will find mitigation actions to overcome this impact. This is for me short term. As said, I think we are completely in line with our strategy. And for investors, and I'm still also an investor in our company, for me, mid and long term, we are definitely in good shape and in line with the strategy. And I also see for the next year to come, with the additional packages we win, that we will definitely stay in our guidance for the next year to come. So I... That's quite a positive outlook. I'm expecting some more questions in terms of the rate developments in the Q&A session. But for the moment, I think the number speaking for itself and definitely confirming and it's a testimony of our strategy. Thank you.

Let me continue with the other two segments. But before we start with the other two segments, We want to reiterate that our mid-term and long-term strategy is clear to develop more into a pure play aerostructures. This is the emphasis we are relying on, even so we are very proud also of the other segments. And as you saw, also the fastest growth, the most growth, and the fastest overproportional EBTA is coming out of aerostructures. Immobility on a general blue sky, a slight cloud, I would say. Yes, we had a not very strong Q1 in sales, also in comparison to the other quarters of the last years in terms of margin or EBITDA. However, to be fair, We also guided for this year to be a quite difficult year for e-mobility in general. And here, in comparison to our guidance and also our internal plan, the first quarter was more or less in line with our net sales expectation and slightly above even what we expected concerning the adjusted EBITDA. We expect a slightly increasing and stronger market demand. We see it already in our order intake from the second quarter onwards and therefore keep on also here to guide concerning the profitability and the sales of immobility as guided in the previous sessions and discussions. The reason for the, I would say, slightly lower sales in comparison to the last year is mostly the weakness of our customer industries and the shift into the second and third quarter of their demand. Immobility, we discussed. Energy, constantly strong. We continue to produce what capacities allow. We increase steadily the capacities. This is also a good portion out of the CapEx, which we showed. Why? Because the market demand is unbroken, extremely high. And every single ton of production is already pre-sold and sold. So the only constraint is the speed of the capacity increase. which is taking place. So therefore, you see also a constant growth, again, a growth of a very good quarter 2023 to an even better quarter 2024, not only in sales with plus minus 6%, but mostly, again, also with the EBITDA with a 14% growth to a good level over 6% margin level or 8 million, which we are quite proud of it. We expect the energy segment to continue this path continuously, also for the next quarters quite constantly. As I said, in the meantime, over the last years, developed very stable and reliable demand structure and a strong tailwind. Some KPIs of the company. Operating cash flow is And cash flow, free cash flow, negative in the first quarter, 2024, as announced in the overview. Reason was some, I would say, optimization programs taking place in the last quarter, 2023, which you see here on the slides. But I said also in comparison to what was in 2023 in the first quarter, a highly positive impact, so much positively developed. And we continue to guide also for free cash flow for the full year 2024 on a much higher level than what we have seen in 2023. Trade working capital, also as already explained, 391 in comparison, 2023 reduced right now to a level of 346. We continuously develop more or streamline our trade working capital. Two topics around what behind it, the reasons behind it on the one topic is ramp up is taking place. So the inventory ready to be produced is produced. Therefore, it's reducing also trade working capital levels, better conditions also with customers and suppliers. but mainly also then also optimization of our own supply and this at the end results in a better portion or a quote of trade working capital in comparison to sales. And very proud of it, the first quarter 2024 is the net income reflecting our clear guidance to be a very positive net income company and the first step is done I would say with this quarter. Production performance, personnel expenses, other operating expenses most reflect the reasons why we have a proportional EBTA growth. So, in comparison to the performance or the sales, we have underproportional personnel expenses and other expenses. And therefore, the result is the positive net income. This is in short terms, and this is more or less the usage of the existing capacity. So every single euro more sales is resulting in an additional overproportional growth of EBTA. Therefore, we want to end the very short presentation, which we are very proud to present those, I think, very positive numbers with our reiteration of the guidance. In general, tendency to more and more structure ourselves in a pure play aerostructures company. 2024 numbers around 1.7 billion on total sales. Just the DBT continuously at this level of 180 plus. Positive free cash flow on a full year's basis. Positive net income continuously then to be shown and also for the full year, and the streamlining trade working capital where we think we have reached a good portion at the end of the year 2024 for the different segments. Outlook has already announced, yes, there are topics around in a very volatile discussion on build rates and the OEMs, but still for the mid-term and long-term, there is a extremely strong demand for airplanes. The backlog is enormous. There's a massive need, however, to build more planes. And therefore, we continuously also guide for around $2 billion on total sales for 2025 and around above $250 million adjusted EBITDA. Saying that, we would like to close the presentation part of this earnings call and over to the moderator. And I'm happy to answer your questions.