Aumann AG
XETRA:AAG
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Aumann AG
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Good day, and a warm welcome to today's earnings call of the Aumann AG following the publication of the Q3 figures of 2024. The CEO, Mr. Sebastian Roll; and the CFO, Mr. Jan-Henrik Pollitt, will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to a Q&A session in which you will have the possibility to place your questions directly to the management. And having said this, Mr. Roll, the stage is yours.
Yes. Good afternoon, and thank you for the kind introduction. Also a warm welcome from both of us. So allow me to briefly introduce myself. So my name is Sebastian Roll, and I'm the CEO of Aumann AG. Joining me is my colleague, Jan-Henrik Pollitt, who is our CFO, and I'm very pleased that you are interested in Aumann and taking part on our earnings call. So in our upcoming presentation, we will start with a brief overview of Aumann, share our perspective on current market trends and introduce our new renamed Next Automation segment. And of course, we will dive into our KPIs, including our strong financial performance for the first 9 months of 2024.
So let's start with our business model. We deliver cutting-edge fully automated production lines tailored for our well-known international customers. With decades of experience, the industry-leading players rely on Aumann's solutions to set production standards. One of our competitive advantage is staying ahead in fast-growing markets, enabling us to quickly provide customized solutions.
Given this context, the automotive market, especially the E-mobility sector remains highly attractive. The transition to E-mobility and the shift in products continues to drive a market dynamic that is beneficial for us. In addition, there's a fast-growing robotics and automation market. Trends like demographical change leading to labor shortages and cost reductions will further drive growth. We plan to focus even more on these opportunities in the future.
So with this in mind, let's take a closer look at Aumann's Solutions. Our portfolio ranges from modular solutions and complex process solutions to large-scale production solutions. In Modular Solutions, Aumann offers standardized cell systems. They enable our customers to react fully flexible and cost optimized on market demands.
In addition, Aumann develops production lines for complex processes such as winding, coating and testing. The aim is to implement special process steps in the most efficient way. Moreover, Aumann offers customized large-scale production solutions tailored to the unique needs of our customers. These systems are designed to generate a maximum output while ensuring high quality. Thanks to Aumann's wide range of solutions, we can fully support different production goals of our customers.
So this slide shows how Aumann became a technology leader in E-mobility. Starting from the traditional automotive market, E-mobility was identified as a target market. Through strategic M&A, Aumann took the first step into the E-motor. Combined with existing know-how, we directly develop different solutions for the rotor, quickly followed by solutions for the stator and in the end for the complete e-motor assembly.
After the e-motor, we continued our journey using our turnkey and R&D skills to sell large-scale production solutions for battery modules and battery packs. In addition, we developed our own modular production system to offer inverter assembly solutions. Furthermore, with our latest acquisition, we ventured into a new field converting technology. This allows us to provide production solutions for electrode manufacturing. The result of our journey can also be seen in this illustration. This illustration showcases the drivetrain of a fully electric car.
And all components can be manufactured using Aumann production lines. Of course, this requires a colorful mix of competencies. Alongside our key competencies such as assembly, automation and joining, we also offer specialized processes like, for example, converting, winding and testing.
Right from the start, Aumann placed, as you know, a clear focus on the e-Drive unit. Currently, each customer follows very different approaches in development. As a turnkey provider, Aumann offers all the latest production solutions for both stators and rotors. In addition to our existing operations, Aumann has ventured into the inverter business over the past 2 years. To support this business, Aumann developed its own modular production system perfectly suited for inverters.
Now let's shift our focus to our battery portfolio. Our growth over the years is mainly driven by our strong position in the field of battery systems. From our perspective, we benefit for 2 reasons. Firstly, as a pioneer in technology, Aumann provides the complete range of battery modules, battery packs and even cell-to-X solutions.
Secondly, the latest design such as the cell-to-pack design set the highest standards for production solution and processes. Additionally, with our converting technology, we are now able to provide production solutions for electrode manufacturing.
Last but not least, we complete our portfolio in E-mobility with our activities in the field of fuel cells, a business where Aumann has been active for over 15 years. Aumann is able to offer cutting-edge production solutions from coating and stacking all the way to final assembly. As a result, Aumann can provide tailor-made solutions across the entire value chain.
Let's explore the current and future E-mobility market. Looking at BEV sales by regions shows a mixed picture. Outside of Europe, there are double-digit growth rates year-over-year. The Chinese market driven mainly by national OEMs is growing by 40% year-over-year, reaching already more than 4 million vehicles in just 9 months. The U.S. market, which currently shows the lowest volume in comparison is growing by 18%.
Unlike this general growth trend, the European market shows a decline of 6%. The European automotive industry is facing unexpectedly weak end customer demand for electric vehicles. However, also due to their global presence, our customers are fully committed to the transition towards E-mobility. Nevertheless, the industry is unfortunately adjusting the pace to better align the launch timing of new car models with the market demand.
As a result, there is a temporary slowdown in investment until consumer demand rebounds. But what does this mean for the European automotive industry? So reduced interest rates and an automotive-friendly government in Germany are expected to support this recovery because in our point of view, it remains true that the transformation for our customers is far from complete and a large part of the traditional production capacity still needs to be converted.
So while the general trend in E-mobility is clear, the current slowdown in investments is also disappointing for us. However, Aumann is not just about E-mobility. As you know, within the Classic segment, we have done a lot of different and complex projects with very interesting customers. So this slide shows a selection of them, but there's much more potential.
Let us come back to the beginning of the presentation. As I said, in addition to the automotive industry, our second focus is the automation and robotics industry. This industry is attractive for Aumann because of the growing demand for operational efficiency and productivity improvements.
Manufacturers aim to streamline processes, reduce manual intervention and minimize human errors. In addition, they face rising labor costs and a shortage of skilled workers, driving them to invest in automation technologies. Companies are adopting automation to reduce energy consumption, aligning with global efforts towards greener production.
In this context, we decided to transform the opportunistic approach of the Classic segment into a strategic approach. We named in Next Automation, the segment will focus on automation solutions for growth areas outside automotive, such as clean tech, aerospace and life science.
Now I would like to hand over to Jan.
Yes. Thank you, Sebastian, and also a warm welcome from my side. I would now like to share with you the financial figures of the first 9 months of 2024. Let me start with a quick overview. The revenue and earnings situation continues to develop in line with our guidance and the Q2 results. Our revenue increased by 16.8% year-over-year and EBITDA jumps by 86.4% with an EBITDA margin of 10.8%.
After the very successful past years, this year's order intake is influenced by a challenging market environment. With EUR 157.9 million order intake after 9 months 2024, we are 37% below the strong previous year's figure. Nevertheless, at the end of September, we still have a solid order backlog of EUR 223.6 million.
And our balance sheet remains strong with EUR 133.5 million cash. Let us now jump into a few details. As already announced in our guidance for 2024, we see a strong revenue development for this year. After 9 months, we can report a significant increase in revenue from EUR 199.6 million to EUR 233.1 million, which means a growth of 17% year-over-year.
In our E-mobility segment, we were able to grow particularly strong and increase revenue by 26% to EUR 191.1 million. Our profitability shows an even more significant development. EBITDA jumps from EUR 13.5 million to EUR 25.2 million. and the EBITDA margin increased by 4 percentage points from 6.8% to 10.8%.
Also here, the E-mobility segment is the main driver of the development. EBITDA more than doubled to EUR 23.3 million, which means a margin increase of almost 5 percentage points to 12.2% EBITDA margin. Not shown on this slide, but worth mentioning is that 10.8% EBITDA margin overall mean 9.8% EBT margin and therefore, EUR 22.8 million earnings before taxes after 9 months 2024. The revenue and earnings development illustrates the reward from the very strong and profitable order intake from the last 2 years.
Let us now have a look at our order intake and backlog. Across segments, the 9-month figures show a decline in order intake of 37% year-over-year to EUR 157.9 million. We are still seeing, as Sebastian said, a reluctance to invest in the automotive sector for several reasons. The end customer demand for electric vehicles is weaker than expected. OEMs are still partly faced with technical or software problems and high costs.
Vehicle models and platforms are currently under review and the regulatory framework continues to be uncertain. This results in a decreased total order backlog of EUR 223.6 million, which means a total reduction of 28% -- after the record high order backlog up to and including Q1 of this year, the current level decreased but is still solid from both the volume and quality perspective. However, the lower order backlog level will lead to a decline in revenue in the coming financial year.
Let's jump into our segments in detail. Starting with the E-mobility segment. Order intake of EUR 136.1 million in the first 9 months of 2024 is 33% under the previous year due to the mentioned market conditions. As a result, order backlog decreased by 24.3% to EUR 189.7 million. In the same time, revenue increased significantly with 25.7% to EUR 191.1 million, resulting in an increased EBITDA margin of plus 111% to -- EBITDA to EUR 23.3 million, which means a 5% point improvement of the EBITDA margin to 12.2%.
Let's continue with the Next Automation segment. Important to know is that the 9-month figures are not yet affected by the new positioning of the segment. Order intake decreased notably year-over-year to EUR 21.8 million as 2023 included a large-scale order. Order backlog came down to EUR 33.9 million and revenue after 9 months is with EUR 42 million, slightly below the previous year's level. And EBITDA increased by 12% to EUR 4.8 million, which means the EBITDA margin increased by 2.4 percentage points to 11.4%.
By the end of September 2024, our balance sheet continues to be in an excellent shape with an equity ratio of 57.2% and EUR 133.5 million cash, of which EUR 126 million are net cash. With our wide range of innovative production solutions and our solid finances, we are proving to be a strong partner.
Finally, let us look at the full year 2024. With today's interim statement, we have specified our forecast for this year. Revenue will be around EUR 320 million, and EBITDA will reach the upper end of our initial guidance of 9% to 11%. Let me now hand over to Sebastian again.
Yes. Thanks, Jan. So to sum up our presentation, the revenue and earnings are performing great. Last quarter was the best in our history in terms of revenues and profitability. Year-over-year, the revenue increased by roughly 17%, and our EBITDA nearly doubled and continues in double digit. But despite our strong overall financial performance, there are still insecurities in the automotive market. Unfortunately, this has been reflected in our order intake. Nevertheless, based on our financials and our solid order backlog, we are set for 2024 on the upper range in the profitability. In general, we are confident that E-mobility will continue to grow. However, we want to use the current situation. With the renamed Next Automation segment, we will focus on high-growth areas beyond automotive.
So thank you very much for your attention, and we are now happy to answer your questions.
Thank you very much for your presentation. We will now move on to the Q&A session. [Operator Instructions] And if you do not have the possibility to speak freely today, you can also place a questions in our chatbox, which one person already has done and I will read out the question for you. Due to your higher net liquidity, another share buyback would be a good idea, especially after the last 2 buybacks were carried out at much higher prices. What is MBB's strategy? Will you increase your position at the extremely low prices?
Speaker 2.
Yes, I can answer that question. Of course, another share buyback is something which will be discussed. There is no decision made on that topic yet, but I think it will be a topic in our regular internal discussions. And of course, we, as Aumann cannot speak for MBB. So we cannot answer that part of the question.
But I think what we can do is to say that MBB is totally committed to Aumann.
Thank you so much for your question. And we have 2 more hands up. Yasmin Steilen, you should be able to place a question now.
And I have 4, if I may. So the first one on your renamed Next Automation segment. What are your ambitions for the growth out of the automotive business? And what investments, for example, in sales and distribution are required?
Then on -- the second question is on the current business and the RFQ dynamics. So any color when you expect market dynamics to improve would be highly appreciated.
The third question, does the acceleration of the order intake decline in Q3 reflect mainly lower market demand? Or does it also reflect a more selective approach from your side to safeguard the margins?
And the last question on the sales outlook for next year. So given the book-to-bill of [ 0.3 ] in Q3 and the order backlog declining, do you see a scenario of declining sales for the next year?
Yes. So -- maybe we'll just start with our Classic segment. I mean, maybe starting a little bit in the beginning of this discussion. So as you know, we were totally and only focused on our E-mobility segment. So this allows us in the past to quickly enter into new technologies. So we were really, really fast. And as you know, we had a growing rate of 27% over the years. So this means that the Classic segment, on the other hand, was purely opportunistic.
And with the approach of be purely opportunistic, we had a lot of nonautomotive topics, including yes -- so this made up to 30% to 50% of the whole segment. So in many cases, these were customer projects that were, I would say, anything but classic, often very dynamic projects, for example, also in the field of renewables, and you know that we did even very big projects there as well. So we think that with the renaming of the classic segment, we are now starting a strategic shift to focus much more on these customers and on these segments. So that means what I would like to say is the good news is that we are not starting from scratch, which is the opposite to our starting point in the E-mobility because we have already 30% to 40% -- 30% to 50% in the segment with other customers in other fields.
So that means, for sure, we see the potential to grow there. Let's see if we can grow there like we have grown in E-mobility. That's something we have to figure out. And now all these activities, let's say, are structured. And for sure, I think that we will see the first effects in the first half of next year. In general, there are not big investments needed. As I said, we have focused on this new -- we have to focus these new customers. We have to focus a little bit more on the products in the different areas, but we don't have to spend much money. We have to focus our technology and sales activity.
So the market dynamics, so means, I think, especially the order intake, what can we say about the order intake? So the last quarter, as you know, with EUR 27 million stands out negatively. This is also due to the fact that we have particular focus on 2 major projects to improve our order situation. But unfortunately, we didn't win this project, especially due to the pricing even if we were, let's say, in the final round. Nevertheless, the margin of the order intake, so the quality, maybe something which Jan can underline later on as well is fantastic. I think we never had this kind of quality.
So -- and then I think your third question was concerned market demand and also about the quality. So the market demand right now is a little bit in the way that you know normally or, let's say, in the other years, especially last year, we had a strong year-to-year end well. And this is something we are not expecting this year, honestly speaking. But we, for sure, anticipate that the Q4 figures in order intakes will be better than Q3. And for sure, nevertheless, the size of the projects, and you can imagine that we are now also focusing big projects are risk in concentration. And that means, I think, important for the sales.
And then -- and this is, I think, coming to your last question, it is important for the sales that we get these kind of orders in the next 3 quarters because these are the orders which will definitely affect the sales of 2025.
We go on with another question in the chat box regarding also the order intake, but to the revenue decline in 2025. Historically, the company has maintained positive cash flows on much lower sales levels. Do you think that the company can remain cash flow positive in the event of a sales decline next year?
Yes, of course, that's our target. So it's not -- we cannot directly say yes because we have to look on the mix and on the timing of the orders. But of course, we are dealing often, especially when it comes to OEM business with higher prepayments. So in our planning and in an ideal way, we will see these prepayments in the order intake on the one hand. We will maybe also see the working capital level coming a bit down due to a bit softer revenue figures. And therefore, our target, of course, is to be cash flow positive.
But it's from today's position, hard to say where the revenue will be in the next year. Therefore, the Q4 order intake will be crucial, but it will be also the situation, and that's what we didn't see too much in the last 2 years because we were very highly utilized -- but yes, we also had other situations in the past where we executed 30% to 40% of the order intake -- in the year of the order intake in addition to the complete backlog. And therefore, we need to see where also the revenue figures will be next year.
Thank you so much for that question. And we will go on to the hands up, the person with the phone number ending 521. [Operator Instructions] And we will come to you later. There's one more head up. Carlos Aizpurua, you should be able to speak now.
Just they asked you about the cash flow next year. But to be more and more precise, let's say, you do EUR 150 million, EUR 180 million in revenue. Do you think that with the current backlog margins, you would be EBIT breakeven, I mean, to support the fixed costs and everything? Or yes, do you have a minimum number of revenue you need for the EBIT breakeven?
I think what we -- I mean, it's -- as Jan explained, it's not so easy to see the sales for 2025 because as Jan said, we have to see what order intake we will have in the Q4. And then for sure, as Jan and also I said, the first 2 quarters of 2025, yes, are very important for the sales. But what I really can say is that we will be positive in profitability next year. I mean we have a double-digit margin in our order backlog, much higher than the figures you are seeing right now in our profit and loss. As mentioned also in several other conversations, yes, for sure, we will be positive next year.
And then -- so you mentioned the Next generation platform and these new orders. So do you have an estimation of your capacity of winning orders for the next year? Do you have a number like EUR 30 million, EUR 40 million or it's just too difficult to do the estimation?
Yes. As I said, we are very optimistic that Q4 for sure will be better than Q3 because Q3 was very negatively due to the, unfortunately, 2 projects we lost. But as I said, I mean, also before crisis, it was not easy to estimate the quarters because, as you know, we are offering big projects. We are offering projects from EUR 30 million to EUR 50 million, just 1 project. So that means 1 or 2 projects can really change the current situation. So that's the reason why, for sure, we see what big projects are in the market. And we are offering these kind of projects. And now we have to see if we will be success because we will not do these kind of projects for any price, for sure not. And then -- yes, and then for sure, we are doing our budgeting process in the end of the year, and then we come up -- we came up with a guidance in the beginning of next year when it is possible to see what's going to happen in this market.
Okay. So the Q4 uptick in orders is because it's outside auto, right?
No, it's partly, yes. For sure. I mean, we just started this new strategy, yes. So as I said, I mean, we will see the first effects of this new strategy, I'm quite sure in the first half of next year. So that means that Q4 is still a mix of E-mobility projects and for sure, also of these maybe new projects.
Okay. Great. And finally, do you -- I mean, have you seen any changes in the attitude of your customers after the U.S. elections? And I guess this year has been a really politically unstable year. Do you feel that there has been a sentiment change in the recent weeks or nothing?
I mean we had -- yes, honestly, we had a project which was originally postponed and which now seems to be time critical again. But I cannot say that I have already a view if this is a general change. I don't see -- I don't think that we see a general change within this year. But we had a few projects. As I said, I mean, everybody is a little bit taking into account all these topics and deciding very precisely which project is the next project, which launch of a car is the next launch. And therefore, for sure, we see a kind of dynamic, but I cannot say if this dynamic is a general trend already. This is something -- I mean, you know the election was just a few days ago.
Okay. And just one extra question. The M&A you are mentioning, do you -- I mean, do you feel confident that 2025 could be the year where you acquire a company? And do you feel that it will be a big company? I mean, do you have any ranges of size or not?
What I can say is that we are currently really looking at a handful of companies. Once again, for sure, one goal, one target is the market access, especially in the United States to have a regional footprint over there, taking into account also the elections in the United States and what maybe is going to happen in the market. And the other topic for sure is that we have already focused with our M&A activities, yes, the acceleration of our expansion in the Next Automation segment.
And yes, and I mean -- and for the size of the company, it's a little bit depending. I mean it is like often said, I mean, for us, it doesn't make sense or it is not so easy to acquire a company which is less than, for example, EUR 30 million in revenues because then you don't have the structure in the company, the structure for -- to grow the business. Therefore, we are looking for bigger companies. And for sure, in the current situation, taking into account our cash, why shouldn't this new company be a little bit bigger, maybe something between EUR 15 million and maybe EUR 100 million of revenues.
Okay. And do you have any, I mean, ideas of the price you would pay would be an EBITDA multiple or sales multiple, yes, anything?
Yes. I mean, you know that especially in these areas, I think we were very successful in the past, taking our latest deal with LACOM, a very successful deal. So that means we will not pay any strategic price. We will have a really deep look on our targets. And I think in the end of the day, if we are able to make a deal, then for sure, it will be also a really good deal.
And we have one more question in the chat box. [Operator Instructions]. And the one is, it looks like your staff cost this year and potentially last year increased more on a per employee basis than might have been implied by what we are seeing in collective bargaining agreements. Could you comment on other factors that might have impacted personnel cost at Aumann?
Yes. So -- when we compare the current 9-month personnel costs with the previous year, it is firstly important to know that in the first 9 months last year, there were an average 840 people working for Aumann because the personnel figures increased during the year. So 840 as an average in the first 9 months 2023 versus 940 people in the first 9 months 2024 as an average. So this 12% difference is roughly half of the effect we see in the personnel cost increases and the other half is a mixture of wage increases. So the full year effect of the 2023 increases then the '24 increases, which are included partly in the '24 figures.
And of course, we have a very high utilization this year. This means we have a lot of provisions for overtime accounts in this year's figures. And of course, it's a very successful year, which also means that the incentive provisions are higher than last year. So half of the effect is a quantitative effect and the other half is a mixture of overtime, wage increases and also incentive topics.
And in the meantime, we have received no further questions. I will hold the room for another moment. And it doesn't look like that. We, therefore, come to the end of today's earnings call. Thank you for joining, listening and all your questions. A big thank you also to the gentlemen for the presentation and the time you took to answer the questions. Should further questions arise, please feel free to contact Investor Relations. And with this, I wish you all a lovely remaining Thursday, and I hand over to you again, Mr. Roll for some final remarks.
Yes. Thank you. So we are satisfied, as you know, with the first 9 months of the year 2024 in terms of revenues and profitability. And also for 2025, we have double-digit margins in our order backlog. So finger crossed that the rebound of the automotive industry will not take so much time. But nevertheless, at the same time, we will expand into new markets because we have set up a new strategy for our former classic segment, now new Next Automation segment. So thank you very much for your interest.