Gestamp Automocion S A

of this presentation, which has been posted on our website, and that sets out the legal framework, and this presentation must be considered. The conference call will be led by our Executive Chairman, Mr. Francisco Herrera, and our CFO, Mr. Dante Mosquera. As usual, at the end of this conference call, we'll open the floor for Q&A session. Now, please let me hand the call over to our executive chairman.

So, good afternoon, and thanks for attending this call with us in this busy day. So, moving forward, overall, 2025 has been a good year for STAMP, a year which has been marked by a complex context, with global tariffs, a world that is still alive, with many regulatory changes in different geographies, but mainly in U.S. and Europe, a year also with the major OEMs realigning their strategies to slower EV adoption, and also with a limited growth in terms of volumes everywhere but in China or India. In this context, Gestant has focused on delivering a strong set of results in 2025, taking action in order to align our exposure to EV programs in line with our customers, and enhancing our balance sheet profile with adding more flexibility and more optionality for us in the future. And of course, also delivering in our commitment for North America in the frame of the Phoenix plan. In terms of the market, in terms of global manufacturing of light vehicles in our footprint has had limited volumes, again, another year. But probably volumes which were better, which have been better than initially forecasted. In fact, by February 2025, we were expecting volumes in 2025 to be very much in line with 2024. Then when the tariffs were started in April, the forecast was reduced. But at the end of the year, final volume has been around 85.5 million, so that meaning around a 4% increase. So a growth, clear growth, but only driven by Asia. In fact, between China mainly and India, the growth has been around 3.5 million units, comparing with 2024, and it's been again a decrease in Europe, and also in this case, this year in North America. So moving to slide six, and as mentioned, Hestan has met all the 2025 updated targets. In terms of revenues, we have been below the market goals with HESCRAP also performing below 2024 due to the lower prices of the scrap. But in this environment, we have been able to increase our auto margin profitability by 78 basic points. generating a very sound free cash flow of 228 million euros more than guided, and reducing our leverage ratio to 1.4 times EBITDA, which is the lowest since the IPO. So basically, a quite solid year, reinforcing our fundamentals. So that means focusing in increasing profitability and increasing our balance sheet strength. With more focus in revenues, Hestam revenues at FX constant have underperformed the market. In fact, the light vehicle manufacturing in our footprint has increased by 4.1%, while at the same time, Hestam sales at FX constant have been reduced by 1.2%. So that means a 5.2% underperformance, only 0.6% underperformance if we exclude in this analysis the China impact. by regions in Europe, the over performance in East Europe has compensated some slight under performance in Western Europe. Basically in North America, we are in line with the market. We had some underperforming in Mercosur due to some specific problems of some of our relevant customers in that area. And in Asia, we have a clear under performance in China, but in the rest of the Asian countries, including India, we have more than a 15% over performance. In our revenues, in our reported basis, we are below 2024 figures by the 5.4%. From 12 billion euros reported revenues in 2024, we have this year 11 billion 350 billion in 2025. It's a decrease which is mainly coming from FX impact versus Euro in most of the geographies, but also due to some lower activity and also to some lower scrap prices. If we go to the slide number nine, during 2025, Stam has entered into different agreements with certain customers. impacting our profit and loss accounts mainly in the fourth quarter 2025 and around 34 million positive accounting impact at the EBITDA level with an asset breakdown totaling 52 million regarding these programs. So overall, these both items generating a net 19 million negative impact at EBITDA level. So these are effects which are linked to the realignment strategies announced by several of our customers, largely driven by slowdown in their EV rollout plan. And of course, these settlements fall within the framework of Hestan ongoing constructive negotiations with customers and always preserving our long-term relationship with them. So moving to slide number 10, so basically, 2025 has been another year of increasing profitability without growth. Our EBITDA margin for the auto business has increased from 11.1% in 2024 to 11.9% in 2025. Even without taking into consideration the extraordinary impact explained before, this increase has been to 11.6%. So, again, a very solid recovery of profitability in our out-of-business activities. And we have been able to increase this profitability because we have a very clear focus in different actions, like cost reduction initiatives, trying to introduce all kinds of flexibility measures. Of course, these constructive customers' negotiations are with a clear focus in delivering on the Phoenix plan. Moving to the slide 11 about the Phoenix Plan. For the second year of the Phoenix Plan, we have been able clearly to match the target. And in this case, the target was to achieve more than 8% EBITDA market. And we have done it in a market which has been much weaker than expected when the Phoenix Plan was launched. At that time, We were forecasting a manufacturing level in North America of around 14.9 million units of light vehicles, but the real figures in 2025 have been 14 million. So that means almost 6% decrease in terms of volumes in terms of car manufacturing in North America. In this context, in the full year with sales of 2,241 million, we have being able to generate 182 million euros EBITDA. So that means 8.1%, which means a clear improvement compared with the 7% EBITDA margin we had in 2024. And that we have been able also to do it with a very solid results in the fourth quarter with more than 11% EBITDA margin. So we say, and we have been able to do it with externally Phoenix cost below the plan. with $60 million in terms of profit and loss account and $30 million in terms of capex cost. And in terms of scrap, we had a year which has been the performance of the scrap has been clearly impacted by the scrap prices evolution. These scrap prices have been going down month after month in Europe with a total decrease of 12% in the scrap prices in Europe, more than 20% decrease in China, and then a little bit more stable in US. So that means that our revenues in terms of sales have been decreasing by 6.8%, even though in terms of tons, we have been able to preserve a very good level of activity, but this continued decrease of the price of the scrap has forced our company to reduce the profitability in terms of EBIT from 42 million EBIT in 2024 to 28.3 million. But we are expecting for 2025, the scrap of the prices to be stabilizing and even growing. So that means that the profitability of the scrap for the future should be able to recover. Apart of that, we have also made an important commitment in this case, the company Industrias López Suariano. With this acquisition in Hesquab, basically in the Iberian Peninsula, we have been able to get ourselves introduced in a different sector, the sector of the Sweden, and also in the sector that now we are an active player in the recycling of waste of electrical and electronic equipment. Okay, so now with this, now I hand it over to Ignacio Mosquera.

Thank you very much, Paco, and good evening to everyone. Moving to slide number 14, let's have a closer look to our financial performance in 2025. We have reached revenues of $11,349,000,000, which entails a 5.4% decrease when compared to the $12,001,000,000 from 2024. As we have seen before, revenue has been strongly impacted by Forex in most of our geographies. In the auto business, RFX constant revenues have declined by 1.2% year on year. In terms of EBITDA, we have generated 1,307,000,000 in 2025, meaning an 11.5% margin and a 1% increase year-on-year. Excluding the Phoenix impact, EBITDA in absolute terms would amount to 1,323,000,000, therefore an EBITDA margin of 11.7%. As a result of the one-off impacts mentioned before by Paco and higher amortizations, reported EBIT decreased by 6.2% year-on-year to 546,000,000, with an EBIT margin of 4.8% or 5% excluding FedEx impact. Fenix Plant, aimed at restructuring our NAFTA operations, has had a $16 million impact in P&L and a $13 million impact in CAPEX for the entire year. Net income in the year has been $152 million that compares to the $188 million reported in 2024, mainly due to an increase of depreciation and amortization levels and a higher interest expense due to increased exchange impacts in 2025. Net debt has closed the year at 1,821,000,000, therefore a decrease of 276,000,000 on a reported basis. As for free cash flow, we have reached 278,000,000 in 2025, excluding the extraordinary impacts of the Phoenix Plan, or 249,000,000 as reported. To sum up, we continue to demonstrate our ability to perform strongly and strengthen our balance sheet in a challenging market environment together with a negative forex evolution. If we now move to slide number 15, 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 4.2% year-on-year in 2025 to around $4 billion. Performance in the region has been strongly affected mainly by volume pressure in the period and, to a lesser extent, the fall in raw material prices. In terms of EBITDA, it reached almost 453 million, and the EBITDA margin stood at 11.2% in the period, down from the 11.4% reported in 2024. Profitability in the period has been impacted mainly by volume drop with still limited operating leverage, despite the flexibility measures which have been taken. As we mentioned in our previous call, results of these measures will take some time, with limited tangible results in the short term. In Eastern Europe, the performance in 2025 has been very solid, proving again our strong market positioning in the region. On a reported basis, during 2025, revenues have grown year-on-year by 1.2%, up to levels of 1,925,000,000, and the beta levels have increased by 15.4% to 293,000,000. Eastern Europe region has been strongly impacted by Forex this year. The beta margin of 15.2% is above the 13.3% reported last year. The profitability improvement is mainly attributed to a better project mix, highlighting the strong project ramp-up 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 underlying operations, with a very good EBITDA margin evolution in 2025, despite the underlying end market conditions and debt tax impact. Our revenues have decreased by 6.7% year-on-year, while EBITDA has increased by 7.8% if we exclude Phoenix's impact of 16 million in full year 2025. These higher EBITDA in absolute terms leads to an EBITDA margin of 8.1%. improving last year's profitability and also slightly surpassing the target we had set of 8% for 2025. As you all know, turning around the operations in NAFTA to improve our market position in unprofitability is at the top of our priorities, and these two results and the profitability achieved in Q4 sets the way to achieve the target of a 10% margin in 2026. In Mercosur, 2025 has been marked by the first evolution in Brazil and Argentina, leading to lower revenues in the period decreasing by 15.7%. Despite the revenue decrease, EBITDA has increased by 4.9% year-on-year, leading to an 11.8% EBITDA margin versus 9.4% last year. We have been able to improve our profitability in 240 basis points thanks to the flexibility measures and the turnaround of our business in Argentina, where last year we did some restructuring. In Asia, Reported revenues have decreased by 7.7% year-on-year in 2025 to $1,823,000,000 within a complex and very competitive market environment. Our negative revenue evolution in the period is partially explained by the Forex evolution in China. However, our performance continues to evolve very positively. Despite negative revenues evolution in the period, we have managed to maintain similar levels of profitability with an EBITDA margin of 14.5% for 2025, which places Asia as the second most profitable region for the group. Our approach continues to be focused on premium products in the region. We keep on working to gain positioning in this region, maintaining strong levels of profitability. Asian region remains a great opportunity for us, not only China, where we continue to develop these high-value-added products, but also India, where we have undertaken new projects with a strong performance. Finally, headscrap has seen revenues decreasing by 6.8% year-on-year to $534 million as a result of the sustained decline in the scrap prices as mentioned before. As a consequence, EBITDA in absolute terms has decreased by 23.5% year-on-year, reaching $39 million in the period. Overall, we have seen that our unique business model and geographic diversification has supported and driven our performance in a year marked by volumes, volatility, and lack of growth. Turning to slide 16, we see that we ended 2024 with a net debt of $1,821 million, which is $276 million below the $2,097 million reported in December 2024. This $276 million decrease includes dividend payments of $111 million and cashing of $220 million of minorities' acquisitions and money and equity contributions, mainly due to the transaction executed with Banco Santander earlier in the year. During the year, the company has generated a positive free cash flow of $278 million, excluding extraordinary Phoenix costs, surpassing significantly the updated guidance for 2025 partly due to one of compensations mentioned earlier by Paco, which came in in Q4. Moving to slide number 17, we ended December 2024 with a net financial debt of $1,821,000,000, which implies a net debt to DITA of a ratio of 1.4 times, driven by pre-cash flow generation as well as cash inflow from the partial real estate asset sale of $246,000,000. This is the lowest debt level since the IPO of the company, both on net level and on leverage ratios, and complying with our commitment to be between 1 to 1.5 times net debt to evict the target. As we have mentioned, our priority is to preserve our financial strength, and we remain disciplined over leverage in absolute and relative terms. Looking at slide number 18, we are proud to share the actions carried out during 2025 and that have been key to provide a strong balance sheet. Firstly, and as a reminder, in September we closed our partial real estate sale and lease back agreement of our assets located in Spain, strengthening our balance sheet. Secondly, in October we closed the new senior secure bonds issuance that contributed to extend our debt maturities structure at a very attractive cost. As a reminder, STAM's new 500 million senior secured bonds represent the tightest price callable bond by an auto parts issuer since September 2021, with a coupon of 4%, 375%, which underpins the debt investor supports to the group. Further to that, in January, we executed an amendment to our syndicated facility agreement and to revolving create facility, extending the maturity from 2027 and 2028 to 2030 and 2031. These two transactions have allowed us to increase pro forma average debt life from 2.6 to 4.3 years. We continue actively managing our balance sheet structure to strengthen it and flexibilize our financial supply. Finally, on slide number 19, we present the return on capital employed. We have managed to reach 15.8% return on capital employed in 2025, improving by 80 bps between 2024 and 2025 and by 180 bps since 2022 when we first released our new return on capital employed KPI. As we have made clear, Hestamp aims at remaining disciplined on capex investments and improving profitability. Our long-term strategy is focused on generating value for shareholders. Thank you all, and now I hand over the presentation to Paco for the outlook and closing remarks. Thank you, Nacho.

So moving to the slide 21, I would say that in terms of the market, nowadays we are not expecting any growth for the market in 2026 versus 2025. And for the following years, up to 2029 or 2030, we're assuming a limited growth of around 0.9% CAGR. In 2026, even though we are assuming a flat market, we are considering that the volumes in Europe will be stable, with some decrease in Western Europe that could be more or less compensated by some increase in Eastern Europe, which is an increase in terms of volumes in areas like Mercosur or India, and probably we are now expecting a slight decrease for the first time in many years in China. In terms of what we can expect, for example, in 2026, so basically very similar to what we had in 2025. So we see a market, a context in 2026, which means with a limited volume growth in our key geographies, with, of course, still regulatory changes, especially in Europe, but also in Africa, to happen. with cost pressure expected coming from customers and also coming from the environment. And of course, some slower EV adoption, but probably with a little bit less volatility. So in this context, we will remain executing the same way we have done it in 2025, trying to base ourselves in kind of this execution of this solid backlog, trying also to to focus ourselves in increasing profitability, even though we are not expecting any kind of volume increase. The idea is that we need to keep on improving the strength of our balance sheet and also increasing the flexibility of our balance sheet. And of course, we're trying to focus in meeting the guidance for 2026. In terms of the backlog, At the end of 2025, we had a 47.5 billion backlog, which is covering more than 85% of the revenues expected by the group in the next five years. Solid backlog, but less backlog than we had one year ago because it has been impacted in terms of euros due to the negative forex. And also it has been impacted by the rethinking of some of our customers of some of their EV programs. So basically now what we have is a kind of a change in the backlog that we have because we have more content of the programs which are carried over with a less capital intensive profile. And of course we are using our CapEx in the future in a kind of conservative approach, trying to ensure the profitability and to be able to mitigate risk, but also to preserve some CapEx in order to be able to support the new customers and to support also for diversification with the new area. So, again, I think, again, the message is the same. We are going to keep on, in 2026, being very focused in working on profitability with a clear roadmap. The idea is to reinforce all kinds of actions in order to have a very good control of all levels of cost, whether it's corporate, the division level, or the plant level. trying to increase flexibility, trying to implement all kinds of right sizing of our operation whenever it is required, and trying to be more flexible and try to do a capex more in a stage basis. Of course, trying to be able to keep on moving with constructive negotiation with our customers and all the different regions. And of course, also trying to be able to remain very focused in the third year of the Phoenix plan, which is a very important milestone, as stated two years ago, and which is going to provide our group to be able to get the profitability levels in NAFTA region equivalent to the rest of the group. In terms of the financial profile, and as Nacho has already explained in the previous slide, by the end of 2025, we have been able to achieve a very, very solid financial profile. with a leverage of 1.4 times net debt to EBITDA, which is the lowest since the IPO, and mainly thanks to a very positive free cash flow generation during the last six years of more than 1.4 billion euros. So taking all into account for 2026, In terms of the guidance, what clearly the focus of the group is going to be to be another year of reinforcing our financial positioning. We are assuming an S scenario in terms of market, which is going to remain very flat. And in this environment of flat market, we are guiding in terms of profitability to be able to increase our EBITDA margin as a reported basis of more than 11.7% EBITDA margin in 2026, that means that we are guiding for an increase of the profitability in our outdoor market to be able to be above 11.9%. And in terms of scrap to increase also the profitability of more than 7.4% that we have in 2025. And in terms of our balance sheet, we are, again, looking for a less capital-intensive business profile. And what we are guiding is to have a good operating cash flow conversion in the range of 35%. So that means that the operating cash flow defined as reported EBITDA minus the net cash capex. So, again, clear focus in increasing profitability, a commitment to increase profitability in both auto business and infrastructure apps, and improving our financial position by limiting our cash capex to the EBITDA that we are going to generate in this year. Moving to slide 27, in the Phoenix plan, the last year of the Phoenix plan, the third year of the Phoenix plan, We are expecting to complete the plan with capex impact expectation of 21 million and 19 million impact in terms of profit and loss account, so total of 40 million. And in the total amount, if we include the three years in the plan of 100 million as guided three years ago or two years ago. And for 2026, we stress again our commitment to generate an EBITDA of more than 10% in 2026. And of course, a target that is right now very achievable in what we see. And of course, a first stage in order to be able to increase the profitability of our North American operations to the level, average levels of the rest of the world. That's all with that. So message that the full year 2025, we have been able to achieve very solid results in a difficult environment. For 2026, we are not expecting the market to recover, but we commit ourselves to increase our profitability and to increase also our financial profile. And of course, third year of the Phoenix plan, absolutely committed to be able to deliver. So that's all from my side and now open to your questions.

Thank you. Ladies and gentlemen, we will now begin the Q&A session. If you wish to ask a question, please press star five on your telephone keypad. If you change your mind, please press star five again. Please ensure that your device is unmuted locally before proceeding with your question. And our first question comes from the line of Francisco Ruiz from BNP Paribas. Please go ahead.

Hello. Good afternoon. I have three questions, if I may. The first one is on your guidance for top line. I mean, you commented that you do not expect any growth in this year, mainly also with in Asia. Mainly, I still remember the old stamp when we talk about the, I mean, the increase on growth about the market due to the increase of outsourcing. I mean, what is this driver? I mean, it's already over, and on the other hand, I mean, could we think that the flat growth that the market expected and you are also assuming is because you are rejecting non-profitable projects that in the past you used to assume? The second question is a more modeling question, and if you could give us with respect to the 34 million euros extraordinaries in the different divisions, and if this is something that we could expect also in the future, or there are more contracts like this to be accounted in 2026 or 7. And last but not least, on the leverage, I mean, you are reaching a level which is well below being all times low. What are you going to do with the cash, I mean, from here? Thank you.

Okay. Thank you very much for your questions. In terms of the revenues, in terms of the top line, it's true that we are not giving a clear guidance for that. It's true that also that the market has not been growing in the last years, and also we have been, as reported in Europe, we have been quite impacted by the effects. In fact, we have made the analysis, and if we were to have the revenues in the kinds of currency levels that we had in 2022, we are losing more than 1.5 billion euros just because of FX, because we are reporting in euros. For this year, we don't see a growth. As mentioned, the market is not assuming any growth. And of course, we are always planning that we will do our best, but we consider that it's better for us now to assume that we need to focus in profitability and rather just to be waiting for volumes to come back. And so we are doing our job. We are assuming that the bad news are going to be there, and we are putting a lot of stress in the operations. As you know well, because you know us for years, We have been growing for many years. We have a very good position in the market. We have this kind of position with the traditional customers and also with the new customers. And that's why I feel very comfortable that our positioning and our market share remains quite intact. In terms of the leverage that you mentioned, I think it is true that we have reached this 1.4 times, which is below all the different levels. I think for us right now the focus is in the cash flow generation. I think it's very clear for us. And what to do in the future with that is something that is not now our first priority. Of course, as we have already commented, the market will have some opportunities. There will be some consolidation. There will be opportunities to increase the remuneration to shareholders. But today, it's very early. Today, I think the clear focus for us is just to really focus in profitability and focus in generating a very sound free cash flow. You had another question around the claims. I prefer not to provide you with data around what kind of customers or problems or regions, but I think I am quite positive, surprised that even though customers are suffering, the kind of negotiations that we are having with them are very positive and are fair, not easy, but are fair. And I think the kind of impact at the end of the day is no more than a compensation of the different expenses that we had in these programs, and now these programs are canceled, and the customers are doing a clear recognition of what we have been doing. doing for them because they also want to preserve our long-term relationship. So I would prefer not to give you much more details, but probably there will be more, a little bit more in the, during 2026.

Okay. Thank you.

Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star 5 on your telephone keypad. And our next question comes from the line of Robert Jackson from Banco Santander. Please go ahead.

I think the first question is related to your comments, Francisco, on the footprint diversification. Could you elaborate more on this comment? Give us a bit more detail on this outlook. That was my first question.

Okay, so if I understand well, around our footprint diversification, so that means that we are trying to, of course, to try to invest whenever the markets are growing, even though, of course, we are trying to preserve our strength in terms of balancing. Probably in terms of the more clear bets in terms of growth is India. In India, it's a place that we are growing, we are investing. We are investing in opening the new plants over there. And also, which is something which was a kind of surprise to me, increasing in some specific high-tech technologies for that market. And we are growing a lot in areas like specific chassis solutions and also a lot in new hot forming lines. So India is a market that we see growth and we are investing in that growth. Of course, in terms of growth, there could be other opportunities. There are other markets that we have a very good position, like Brazil, that we see still some room to grow. Areas like, for instance, in Morocco that we are growing. But this is what we are expecting to do that. In terms of where we need to reduce, in some extent, our position, I think clearly we are doing year after year some kind of downsizing of our operations in Western Europe.

Second question is related to the NAFTA improvements. We saw a significant improvement in the rising EBITDA margin from the third to the fourth quarter. What are the main drivers behind these relevant increases or is it just a general improvement?

Robert, just to confirm, you're asking, because we cannot hear you very well, you're asking about EBITDA margin drivers in fourth quarter?

Yes, yes. EBITDA margins in NAFTA. More specifically, the improvements in NAFTA. In NAFTA, yeah. Why has the NAFTA EBITDA margin increased so significantly? Just to get a better understanding, looking forward into the next few quarters, into 2026.

Yeah. Well, I think, Robert, as you know, we usually have some kind of increase in the EBITDA margin in the fourth quarter compared with the other. That happened also in 2024. So it's in line with the trend that we have every year because we have, and we have also this year, some kind of agreement by the end of the year, for instance, when we are trying to repay by the different agreements with customers around touring and programs. So basically, it's a kind of trend that we have that we try to do this settlement and accounting of this agreement and negotiation with customers by the end of the year. So that's why basically we have this EBITDA margin in the fourth quarter more than the average EBITDA margin of the previous quarter. But this was very similar to the kind of evolution we had in 2024.

Okay, I was just wondering whether there was anything, any specific changes on an operational level. But you've answered my question. Thank you very much. That would be it.

Okay, thank you.

There are no further questions from the conference call at this time, so I will hand back to the management team. Thank you.