Gestamp Automocion S A

Good evening, and thank you very much, all of you, for taking the time to attend GSTAM's nine-month 2025 results presentation. I am Ana Fuentes. I'm an A&I Director. Before proceeding, let me refer you to the disclaimer of number two of this presentation that has been posted in our website and will set out the legal framework under which this presentation must be considered. The conference call will be led by our Executive Chairman, Mr. Francisco Riveras, and our CFO, Mr. Ignacio Mosquera. As usual, at the end of the conference call, we will open up for a Q&A session. Now, let me turn the call to our Executive Chairman.

Okay, good evening. Thanks for attending this call in which we will be presenting STEM results for the first nine months of the year. So far, this year remained very challenging with adverse effects impact for us and also negative volumes in our core markets. But even in this negative context, the standard is performing quite well year-to-date, with revenues very close to 8.5 billion, which means a minus 0.8% outdoor business sales at FX cost and compared with the previous year. But even if lower sales, our EBITDA margin has grown to 11% up 38 basis points versus 2024. In terms of FENIX plan, I think we are running quite well, improving already 96 basic points EBITDA margin versus 2024, and moving forward to ensure our balance sheet strength, ending this period with a leverage of 1.6 times debt to LTM EBITDA. So, solid results year-to-date and providing a good visibility for the full year. In terms of the market, light vehicle manufacturing in the first nine months of the year is up by 4.3% compared with 2024, reaching already 62.2 million units. However, there are big differences in geographical areas. Mainly in Asia is where we have all the growth, growth by 8.1% compared with previous year, and especially in China with a growth of 12% increase year-to-date. And in the rest of the areas, and especially in Western Europe, with some additional decreasing volumes in line with previous years. Moving to slide six, to talk on HESTAM revenues versus the market. The market has grown, as stated, by 4.3% up to September, while HESTAM sales, auto sales, at FX constant has decreased by 0.8%. So that means an underperformance of 5.1%. and the performance, which is mainly due to China. In fact, without considering China, stamp could have had a slight outperformance to the market. If we go to the analysis for different regions, we see in Europe that we have some underperforming in Western Europe, but it's fully offset by our continuous growth in Eastern Europe. We have also some slight underperformance in North America and Mercosur, and we have the huge underperformance in Asia of 12%. mainly due to China, because without China, we are outperforming the growth of the market, especially due to the growth that we have in our Indian operations. In China, in fact, we are growing very quickly our business with Chinese OEMs. We have, for instance, a growth of more than 45% in the Q3 compared with Q3 2024, especially in EDs. And also, we are working in different projects with Chinese OEMs all around the world. We have a negative impact of the forex. In fact, we have a revaluation of the euro versus most of the currencies, which is impacting HESTAM revenues and also impacted our EBITDA. In fact, out of the decrease of our revenues year to date of 4.9% in euros, 3.7% comes from negative forex impact. 0.5 from the decline of scrap revenues due to the scrap prices decline. And only 0.7% is a negative organic growth year-to-date. But even if we are not able to control in the short time what is going on with the market and the effects, we have been able to improve our every time margin year-to-date with lower sales. And in fact, in terms of our auto sales, we have decreased ourselves compared with nine months of 2024 by 400 million euros. And at that time, in this period of time, we have decreased our EBITDA only by 9 million. So that means that we have increased our EBITDA margin by 42 basic points. And we have been able to do that with very important measures all around the organizations in terms of cost reduction. We have also implemented very important flexibility measures, especially in our European operations. We have some constructive customer negotiations, especially around volume deviations and also, of course, delivering in the Phoenix plan. So, we are delivering on the upper range of our full-year target. And in fact, if we go to Phoenix, we are performing well. We are performing well in a market which is worse than expected with 1% decrease in volumes year-to-date. and still with uncertainty around tariffs, and that's why we are adapting the speed of our actions and the impact in the profit and loss accounts and the capex. But altogether, in Q3, we have increased our EBITDA in North America from 31 million to 44 million, reaching a 7.6% EBITDA margin from 5.5% in Q3 2024. At year-to-date, with sales moving down, we have increased our EBITDA margin by 96 basic points, already reaching a 7.2%, and clearly committed to reach our targets of 8% EBITDA in full year 2024, again, with lower sales. And in SESCAP, even if in terms of tones, our volumes are okay, Due to the decrease of scrap prices, our revenues year-to-date is down 9% below the one we had in 2024, with scrap prices moving down in Europe, in China, and but quite steady in U.S. And due to this declining trend in scrap prices, we have reduced our EBIT margin to 5.8%, lower than the one we had in 2024 of 6.9%. But we are expecting clearly to improve back our margin as soon as the scrap prices stabilize. So now, I hand it over to Ignacio Mezquera.

Thank you, Paco, and good evening to everyone. We move on to slide 12. We can have a closer look to our financial performance in the first nine months of 2025. As Paco has already explained, Phoenix's plan aimed at restructuring our NAFTA operations has had a 12.2 million impact on P&L and a 10.2 million impact on CapEx for the first nine months in 2025. And as a reminder, in the same period of 2024, we had an impact of 16.8 million in P&L and a 3.8 million impact on CapEx. We have included comparable figures for both periods except Infinix. For the first nine months of 2025, we have reached revenues of 8 billion, 486 million, which entails a 4.9% decrease when compared to the 8,927,000,000 from nine months, 2024. Mainly due to the strong negative Forex impact that we carried over from the first half and which has remained in Q3, 2025 in all key geographies. Revenues for the auto business, excluding the scrap at FX constant have been almost flat with a 0.8% decrease year on year in nine months, 2025 as FX has negatively impacted results by 334 million euros. In terms of EBITDA, we have generated 925 million euros in the first nine months of 2025, meaning a 10.9% reported EBITDA margin. Excluding Phoenix impact, EBITDA in absolute terms would amount to 937 million, with an EBITDA margin of 11% improving the first nine months of 2024 profitability in almost 40 bps and providing visibility to reach the full year 2025 EBITDA margin target. Reported EBIT is almost flat in the period, decreasing by 1.7% year-on-year to 399 million with an EBIT margin of 4.7%, improving profitability in the period in almost 20 bps. Excluding Phoenix Impact, it would amount to 411 million, reaching a 4.8% margin. Net income in the first nine months has been $104 million that compares to the $127 million reported in the first nine months of 2024. This lower net income is explained mainly by the negative financial result performance, which has been strongly impacted by Forex evolution in the first nine months of 2025 and a comparable nine months 2024, which has positively impacted by one of hyperinflation impacts. Net debt has closed in $2,107,000,000, reducing net debt in $330 million compared to the first nine months of 2024. The positive net debt evolution in absolute terms is driven by our partnership with Santander announced in the previous quarter and due to the comparable free cash flow figures with last year, where we had some extraordinary working capital negative items in the third quarter of 2024. As for free cash flow in the first nine months of 2025, We had a negative pre-cash flow generation in the third quarter, mainly due to Q3 normal business seasonality offsetting first half 2025 positive pre-cash flow generation. To sum up, a solid set of results, despite continuing to be strongly impacted by the negative Forex evolution and a complex and volatile environment. Despite that, we have been able to improve our profitability levels and strengthen our financial profile that provides good visibility for full-year guidance in terms of margin, leverage, and free cash flow. If we now turn to slide 13, we can see the performance by region on a year-on-year basis. Looking at each region in detail, revenues in Western Europe have decreased by 5% year-on-year in the first nine months of 2025 to 3 billion and 1 million. Revenues evolution in the region has been affected mainly by volume pressure in the period, and to a lesser extent, the continuous fall in raw material prices. In terms of EBITDA, it reached almost €298 million and EBITDA margin that stood at 9.9% in the period down from the 10.8% reported in the first nine months of 2024. Profitability in the period has been impacted mainly by volume drop with a still limited operating leverage despite flexibility measures being taken. Results of these measures will still take some time with no tangible results in the very short term. In Eastern Europe, the performance in the first nine months of 2025 have been very solid, proving once again our strong positioning in the region. On a reported basis, during the nine months of 2025, revenues have grown year on year by 6% up to levels of $1,418,000,000, despite the strong impact of Forex evolution in the region. EBITDA levels have increased by 25.6% to $216,000,000, with an EBITDA margin of 15.2% in the first nine months of 2025, beating the 12.8% margin reported last year nine-month period. The profitability improvement is mainly attributed to a better project mix, highlighting the strong project ramp-up among others in Turkey and the good evolution of the business in the remaining countries. In Europe overall, considering both regions as a whole, we have managed to improve our profitability partly due to the shift in the mix to Eastern Europe. In NAFTA, Phoenix's plan continues to show signs of improvements in the year. with good underlying operations, despite complex market evolution. Our revenues have decreased by 7.2% year-on-year, mainly due to negative volume production performance in the first nine months, and furthermore, the negative Forex impact in Mexico and the U.S. However, on the other hand, EBITDA has increased by 7% if we exclude Phoenix's impact of 16.8 million, in the first nine months of 2024 and 12.2 million in the first nine months of 2025. We have succeeded in continuing to deliver the plan in the context of limited visibility. And the good evolution of our Phoenix plan leads to an EBITDA margin of 7.2%, improving versus last year profitability in almost 100 bps and setting the pace to achieve the target of around 8% EBITDA margin range for 2025. As you all know, turning around the operations in NAFTA to improve our market positioning and profitability is a key priority for Gestant. In Mercosur, the first nine months of 2025 have been marked by the forecast evolution in Brazil and Argentina, leading to lower revenues in the period, decreasing by 10.4%. At a text constant, we grow in the region 3.4%, slightly below the market. In the other hand, reported EBITDA levels have remained flat in the period leading to an EBITDA margin of 12.2%. Despite the decline in revenues in the period, we have been able to maintain EBITDA levels in absolute terms and improve profitability in 127 bps, thanks to the flexibility measures we implemented in the region and a favorable comparative with last year due to the floods suffered in the first nine months of 2024. In Asia, reported revenues have decreased by 8.3% year-on-year in the first nine months of 2025 to 1,338,000,000 within a complex and very competitive market. Our negative performance in the period is partially explained by the forest evolution in China and the extraordinary revenue growth in the first nine months of 2024, almost 8% in the same period. Despite negative revenues evolution in the period, we have managed to maintain similar levels of profitability with an EBITDA margin of 14.5% for the first nine months, which places Asia as the second most profitable region in the group. Our approach continues to be focusing on premium products in the region. We keep on working to gain positioning in this region, maintaining the strong levels of profitability. Asian region remains a great opportunity for us, not only in China, where we continue to develop high value-added products, but also India, where we're undertaking new projects with a strong performance. Finally, the Scrap has seen revenues decreasing by 9.4% to 395 million and an EBITDA in absolute terms by 16.1% year-on-year, reaching 31 million in the period. This situation is mainly by the sustained decline in the Scrap prices during the period due to a weaker demand, as Paco mentioned before. This negative evolution has led to an EBITDA margin of 7.9%, slightly lower than the first nine months of 2024, although above the reported profitability in 2023. which was 7.5% of the margin. Overall, we have seen that our unique business model and geographic and global diversification has driven our profitability improvement in the first nine months of 2025. Turning to slide 14, we see that we have ended the first nine months of 2025 with a net debt of 2,107,000,000, which is 10 million above the 2,097,000,000 reported in December 2024. This net debt increase considers mainly dividend payment of $79 million and $220 million of minority acquisitions and M&A, due to partial real estate asset sale agreement of $246 million closed in September. During the nine months of the year, the company has generated a negative free cash flow of $41 million, excluding $22 million extraordinary finished costs. We have experienced a negative evolution in the nine-month period due to a decrease in nominal terms in the third quarter and a deterioration of working capital related to business seasonality and temporary one-off impact. We expect significant improvement in cash flow in the next quarter to meet full-year guidance, generating positive free cash flow in the 2024's range. As a result of this, I'm moving to slide number 15. We ended up the first nine months of 2025 with a reported net financial debt of $2,107,000,000, which implies the lowest reported net debt in a nine-month period since IPO. This lower net debt in absolute terms leads to a leverage of 1.6 times, well below the nine-month 2024 figure, which was impacted by extraordinary negative impacts of last year's third quarter. While this quarter we have benefited from the cash inflow from the partial real estate asset sale agreement of 246 million. This leverage ratio provides us with strong visibility to be below full year 2025 guidance as we are already in the 2024 range. Furthermore, as we commented in the previous slide, we expect to generate positive free cash flow in Q4 to keep on improving our leverage ratio for full year. our priorities to preserve our financial strength and we remain disciplined over leverage in absolute and relative terms. As we turn to page 16, we're proud to share our latest actions which we have carried out in recent months and that have been key to provide a strong balance sheet flexibility. Firstly, and as a reminder, in September, we closed our partial real estate sale and leaseback agreement for our assets located in Spain strengthening our balance sheet. And secondly, the new senior bonds issuance that we recently closed as of 6th of October that will contribute to extend our debt maturity structure. The new bonds have allowed us to increase pro forma average debt lag from 2.6 years to 3.4 years by replacing the bond that was due to maturing the Q2, 2026. Furthermore, STAM's new 500 million senior secured bonds issuance represent the tightest price callable bond by an auto parts issuer since September, 2021, with a coupon of four and three-eighths. We continue to actively manage our balance sheet structure to strengthen and flexibilize our financial profile. Thank you all, and now I hand over the presentation back to Paco for the outlook and final remarks.