Sogefi (SGF) Q1 2025 earnings summary

Executive summary

• Revenue declined 2.7% year-over-year to €256.0 million, mainly due to European market weakness, while operating results remained stable and net profit from operating activities rose to €9.8 million from €5.6 million.

• EBITDA was stable at €33.8 million, with margin improving to 13.2% from 12.8% year-over-year; EBIT increased slightly to €15.1 million, with margin at 5.9%.

• Free cash flow from operating activities was €13.7 million, down from €29.2 million, reflecting higher investments and absence of prior year non-recurring inflows.

• Net debt (excluding IFRS 16) dropped sharply to €0.8 million from €170.7 million a year ago, reflecting the impact of the Filtration business sale and dividend distributions.

Financial highlights

• Contribution margin improved to 29.6% of sales (from 28.4% year-over-year).

• Fixed costs/revenue ratio stable at 15.6%, with absolute fixed costs down.

• Financial expenses reduced to €2.7 million (from €5.1 million year-over-year); cash interest expenses fell to €1.5 million.

• Shareholders’ equity increased to €300.5 million at March 31, 2025.

• Dividend of €0.15 per share approved for FY 2024.

Outlook and guidance

• Forecasts a mid-single digit revenue decline for 2025, with a slight increase in EBIT margin compared to 2024, barring unforeseen negative events.

• Free cash flow guidance for 2025 is confirmed at €15 million, with higher CapEx expected for Air and Cooling business.

• Market outlook remains highly uncertain due to ongoing US-China trade tensions and potential tariff impacts; global car production expected to decline 1.7% in 2025.

• Tax rate for 2025 projected around 30%.