Gestamp H1 2025 presentation: Record Q2 profitability despite revenue decline

Introduction & Market Context

Gestamp Automoción (BME:GEST) presented its H1 2025 results on July 28, 2025, reporting a 4.8% year-over-year revenue decline to €5,844 million while achieving record Q2 profitability. The automotive component manufacturer’s stock closed at €3.13, down 1.14% following the announcement, as investors weighed improved margins against top-line challenges.

The company operated in a mixed global automotive production environment, with overall light vehicle production growing 1.2% in H1 2025, primarily driven by strong performance in Asia (+8.2%) that offset declines in Western Europe (-3.0%) and North America (-3.7%).

As shown in the following chart detailing automotive production trends across regions:

Quarterly Performance Highlights

Despite challenging market conditions, Gestamp achieved record profitability in Q2 2025, with EBITDA margin increasing to 12.0% from 11.1% in Q2 2024. This improvement came despite a revenue decline, demonstrating the company’s focus on operational efficiency and cost management.

The following slide illustrates this achievement, showing how Gestamp maintained EBITDA levels while revenues decreased:

For the entire first half, Gestamp reported EBITDA of €651 million with an 11.1% margin, alongside positive free cash flow generation of €99 million. The company’s auto business at constant exchange rates declined by 0.9% in H1 2025, underperforming the market by 0.6 percentage points on a weighted basis.

This comprehensive overview of key financial metrics demonstrates the company’s performance:

Detailed Financial Analysis

Gestamp’s revenue decline was significantly impacted by currency effects, with forex accounting for a negative €205 million impact. Additional headwinds included a €36 million decline from Gescrap (due to falling scrap prices) and a €55 million reduction from organic growth, primarily in Western Europe and NAFTA regions.

The following bridge chart breaks down these revenue impacts:

Regionally, Gestamp’s performance varied significantly. Eastern Europe stood out with 11.5% growth against a market decline of 2.4%, while the company underperformed in Western Europe, NAFTA, and Asia. This geographic diversification provided some resilience despite challenges in key markets.

The company’s financial position remained solid, with net debt decreasing to €2,141 million, the lowest level for a first half since IFRS 16 implementation. Free cash flow generation was particularly strong in Q2 at €182 million, providing visibility for full-year targets.

The following slide details the company’s strong Q2 free cash flow performance:

Strategic Initiatives

Gestamp highlighted two key strategic initiatives: the Phoenix Plan and a partnership with Santander Bank. The Phoenix Plan, focused on improving NAFTA profitability, showed progress with sequential EBITDA margin improvement from 6.4% in Q1 to 7.7% in Q2 2025, tracking toward the full-year target of 8%.

Additionally, Gestamp announced a significant partnership with Santander Bank to strengthen its balance sheet. Under this agreement, Santander will take a 38.6% stake in a set of companies owning Gestamp’s Spanish real estate assets, making a capital injection of €246 million. This transaction is expected to reduce Gestamp’s net debt and improve its leverage ratio to 1.5x on a pro forma basis.

The following slide outlines the key elements of this strategic partnership:

Forward-Looking Statements

Looking ahead, Gestamp maintained its 2025 guidance despite market uncertainties, including concerns around tariff implementations across numerous countries. The company expects low single-digit outperformance versus the market, with auto business profitability slightly improving compared to 2024.

The company’s strategic focus has shifted toward profitability over growth, emphasizing cost control, operational improvements, and efficient capital allocation. Management highlighted the importance of the Phoenix Plan in reaching EBITDA margin targets and reinforcing the company’s financial profile.

As shown in the guidance slide below, Gestamp aims to maintain its leverage and free cash flow in line with 2024 levels:

Francisco Riberas, Executive Chairman, emphasized this strategic shift, stating, "We need to be able to deliver in limited growth," and highlighting the commitment to "increase this profitability in the long run."

With a clear roadmap focused on being a trusted partner supplier, technological innovation, operational excellence, and disciplined balance sheet management, Gestamp appears positioned to navigate ongoing market challenges while improving its financial performance.

Full presentation:

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