Standard Profil - comment

Volume, volume and more importantly, the lack of volume.  Standard Profil reported disappointing results yesterday, with revenue down 9% from Q3 ’23.  The Company is projecting c. €100m revenue for Q4, which is down 3-5% on Q3 but 25% down on a strong Q4 ’24.  With EBITDAR expected to be €55-58m, EBITDA (pre IFRS16) c.€48m, the business will struggle to be cashflow neutral in Q4.  

What will FY25 bring? Annualising Q3 and expected Q4 revenue equates to c. €400m of revenue, which would imply EBITDA (pre IFRS16) of c. €40m at best.  Annual Capex has been €40-50m p.a., resulting in neutral cashflow before interest at best.  Revenue was expected to be €500m+ in FY25 on the back of the order book, but the uncertainty in the automotive industry makes it difficult to predict.  

Standard Profil has appointed PWC to conduct an independent Business Review, which should be completed by January 2025. This review will be the basis for any discussions with bondholders, so we expect a vacuum of news until then.  Standard Profil has reduced its cost base and benefits from a significant order book.  The problem is the depressed level of OEM production, which coupled with short-term cancellations leads to lower profitability figures.  The Company has previously benefited from OEM implicit support and we would expect Working Capital to improve over the coming quarters as OEMs continue “soft” support for Standard Profil.