JOST Werke SE Financial Results Q1 2024 | High Profitability and Free Cash Flow Surge

JOST Werke SE Q1 2024: Key Takeaways

Overview of JOST Werke SE Financial Results Q1 2024

In this detailed video presentation, Romy Acosta of JOST Werke SE, a leading global producer and supplier of safety-critical systems for the commercial vehicle industry, presents the company’s financial results for the first quarter of 2024 to professional stock investors. The presentation provides an in-depth analysis of JOST’s performance amidst a challenging market environment, emphasizing the company’s ability to maintain high profitability and significantly improve free cash flow.

Financial Highlights of Q1 2024

Romy Acosta begins by outlining the headline figures for the quarter. Despite a 12.6% decline in sales, down to EUR 299 million from EUR 342 million in Q1 2023, JOST successfully maintained an adjusted EBIT margin of 11.6%. This was achieved through effective operational flexibility and strategic cost management, resulting in an adjusted EBIT of EUR 35 million compared to EUR 40 million in the same period last year.

Significant Improvement in Free Cash Flow

One of the standout achievements highlighted by Acosta is the remarkable increase in free cash flow, which soared by 164% to EUR 35 million from EUR 13 million in Q1 2023. This improvement is attributed to the company’s stringent efficiency measures and strategic financial management. Additionally, JOST’s net debt reduction efforts strengthened its financial position, bringing the leverage ratio down to 0.93x from 0.998x at the end of 2023.

Performance Analysis by Region

Europe

The region saw a 7.9% decline in sales to EUR 174 million from EUR 189.1 million in Q1 2023, largely due to softened demand in the transport and agriculture sectors. Despite this, JOST mitigated the impact on operations, although the higher fixed costs associated with headquarters’ administrative expenses led to a 13.1% decrease in adjusted EBIT to EUR 13.9 million, maintaining an adjusted EBIT margin of 8.0%.

North America

Sales in North America decreased by 28.8% to EUR 73.2 million from EUR 102.8 million in Q1 2023. The region’s cyclical market fluctuations were pronounced, but JOST’s proactive adaptation strategies and efficiency measures helped cushion the impact, resulting in an adjusted EBIT of EUR 8.1 million and an improved EBIT margin of 11.0%.

Asia-Pacific-Africa (APA)

This region displayed resilience, with sales increasing by 3.1% to EUR 51.3 million, driven by strong demand in India, Australia, and South Africa and a recovering truck market in China. The acquired company LH Lift Oy contributed EUR 1.7 million in sales. Adjusted EBIT for APA stood at EUR 10.7 million, with a margin of 20.9%.

Consolidated Profit and Future Outlook

Romy Acosta also discusses the consolidated profit, noting that earnings after taxes amounted to EUR 20 million, down from EUR 24 million in Q1 2023. Adjusted earnings per share were EUR 1.70, compared to EUR 1.99 the previous year.

Outlook for 2024

The presentation concludes with an optimistic outlook for the remainder of 2024. Despite the anticipated single-digit percentage declines in group sales and adjusted EBIT compared to 2023, JOST expects to maintain its adjusted EBIT margin within the strategic range of 10.0% to 11.5%. This projection reflects JOST’s robust financial strategy and ability to navigate ongoing market challenges effectively.

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