Polytec Holding AG (PYT) Earnings Call Transcript & Summary

Thank you very much. Hello, everybody. Good morning. Welcome to our Q3 financial report. As the recent quarters, also Q3 was again challenging as everybody is aware of the industry is still not settling. Car registrations in Europe are minus 10% compared to 2021, noticeable for our [indiscernible] business, which represents approximately 20% of our sales. The combustion engine car sales are 20% down compared to last year. The total expected production volume in Europe for the full year of 2022 is expected to be 24% below precrisis of 2019 level. Still, we see sudden reductions of call-offs from our customers so that even the very near future is not predictable in sales. Volatility causes inefficiencies and production interruptions. We faced further increases in material costs and energy prices, which have outrageous economic impact. However, material prices tend to stabilize now. Selectively, we also see first reductions on specific materials. All these challenges still meet changes. Yes, the major management attention needed to deal with cost increases and volatility to secure our positive EBIT line year-to-date. We managed that we can largely put forward the increased prices of raw material and energy, which we understand is a confirmation of our market position and a cooperation with our customers. Still cash hunting is one major issue to get paid what is agreed running after tooling payments and everything so cash hunting is still a major issue. In addition, the volume shortfall and the cost for volatility remains our major burden. However, it is expected that we will reach a positive EBIT on the full year, even so Q2 and Q3 were slightly negative. We are all aware that unforeseeable sudden impact of several external factors will -- can have significant input on production volumes of cars, which we cannot predict at the moment. On the other hand, we see a very promising order pipeline, and we see a confirmation of our solution for strategy, which have already resulted in major new orders, for example, in electric power storage or electric charging infrastructure. Bottom line, the key figures for Q1 to Q3 from 2021, group sales amounted to EUR 430 million compared to EUR 415 million. Again, the remark, the sales volume itself is not representative for the volume is a middle 2-digit million-euro value arising out of material price push forward. Totally, the EBITDA amounted to EUR 25 million compared to EUR 28 million in the previous year. EBIT to slightly positive EUR 240,000 compared to EUR 7 million the preceding period. Earnings after tax to minus EUR 1.9 million compared to EUR 3.6 billion the previous year. Earnings per share, EUR 0.09 minus and an equity ratio still stable at 43% compared to 42% the previous year. Net debt slightly increased to EUR 92 million, mainly driven by the stock. And as I mentioned, the working capital in total, yes, compared to EUR 80 million, and we have employed 3,588 employees compared to 3,440 (sic) [ 3,442 ]. The outlook for 2022, we still expect a positive EBIT for 2022. However, in view of the considerable current uncertainties at present, a well-founded quantitative estimation of the sales and result expectations for '22 financial year is fairly possible. If in the preceding quarters, customers are unable to provide reliable planning volumes. In addition, short-term call-out cancellations continue to result in disproportionate production costs and simultaneous reductions in sales revenues. Therefore, the achievement of a positive operating result is subject to various uncertainties as described in the risk report. Negotiations with customers regarding price increases and compensations, particularly for raw materials and the energy are currently in progress. However, to date, these discussions have only been partially concluded. As previously, the POLYTEC Group management continues to react flexibly and promptly on the ongoing changes in the economic environment and elation closely with the group's customers and suppliers in order to jointly overcome the present challenges. This was, as usual, in very brief the overview of the Q3 results. Thanks for listening.