• Revenue Decline: 2.7% decrease compared to Q1 2024.

• EBITDA: EUR 33.8 million, with an EBITDA margin of 13.2%.

• EBIT: EUR 15.1 million, with an EBIT margin of 5.9%.

• Net Profit from Operating Activities: EUR 9.8 million, up from EUR 5.6 million in Q1 2024.

• Free Cash Flow: EUR 13.7 million, lower than EUR 29.2 million in Q1 2024.

• Net Debt: EUR 44 million, reduced from EUR 55 million at the end of December 2024.

• Air and Cooling Business Unit Sales: EUR 214 million in the USMCA region in 2024.

• Warning! GuruFocus has detected 6 Warning Signs with MIL:SGF.

Release Date: April 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sogefi SpA (MIL:SGF) achieved a higher net income from continuing operations compared to the first quarter of 2024.

• EBITDA remained stable at EUR33.8 million with an improved EBITDA margin of 13.2%, better than the previous year.

• The company significantly reduced its net debt to EUR44 million, including IFRS-16, from EUR235 million at the end of March 2024.

• Sogefi SpA's Air and Cooling business unit achieved substantial sales in the USMCA region, with a large portion compliant with USMCA regulations, minimizing tariff impacts.

• The company maintains its guidance for 2025, showing confidence in its ability to manage potential market fluctuations.

Negative Points

• Revenue declined by 2.7% compared to the first quarter of 2024, indicating a weaker operating market.

• Free cash flow from ongoing operations was EUR13.7 million, significantly lower than the EUR29.2 million recorded in the first quarter of 2024.

• Higher capital expenditures were required due to new product developments, impacting cash flow.

• Potential indirect impacts from tariffs could lead to a slowdown in the American car market, affecting future sales.

• The company faces challenges in maintaining profitability in its Suspension division amidst market slowdowns.

Q & A Highlights

Q: Should the worldwide car production fall further due to a slowdown in the USA, what actions can Sogefi take to address market deterioration? A: Olivier Proust, CFO, stated that Sogefi can reorganize its plans, reduce shifts and temporary workers, and reallocate production among plants. The company has demonstrated flexibility in the past to adapt to market changes.

Q: Can you provide an indication of the 2025 margins for the Suspensions division? A: Olivier Proust mentioned that Sogefi aims to continue improving the profitability of the Suspension division. However, a major market slowdown could stabilize margins, as higher activity levels typically enhance profitability.