Novem Group (NVM) Q1 2025 earnings summary

Executive summary

• Q1 2024/25 revenue declined 20% year-over-year to €140.1 million, mainly due to weak automotive demand and reduced customer call-offs, especially in Europe and Asia, while Americas saw growth.

• Adjusted EBIT was €14.2 million, with a margin of 10.1%, down from 11.4% last year, supported by cost management, restructuring, and customer compensation.

• Free cash flow turned negative at -€3.0 million, impacted by higher stock levels, capital expenditure, and lower operating cash flow.

• A significant contract was secured for the Mercedes-Benz GLE SUV in China, expanding presence in both the U.S. and China, with SOP in Q4 2026.

• An impairment on receivables from an insolvent tier-1 client was recognized and adjusted in the period.

Financial highlights

• Revenue fell to €140.1 million from €175.2 million year-over-year; adjusted EBIT dropped to €14.2 million from €20.0 million.

• Adjusted EBIT margin decreased to 10.1% from 11.4% year-over-year.

• Free cash flow was negative at €-3.0 million, down from €11.2 million in the prior year.

• Net leverage increased to 1.8x adjusted EBITDA from 1.0x year-over-year.

• Liquidity stood at €134.4 million, down €7.1 million sequentially.

Outlook and guidance

• Market conditions are expected to remain challenging in the short term, especially in Europe and Asia, with continued volatility in customer demand.

• Ongoing commitment to operational excellence, cost-cutting, and restructuring to support margins.