Earnings call transcript: Gestamp Automocion sees Q1 revenue dip, stock rises

Gestamp Automocion reported a decrease in revenue for Q1 2025, with figures showing a 2.2% decline year-on-year. Despite the drop, the company’s stock experienced a 2.65% increase, closing at €2.64. According to InvestingPro analysis, the stock appears undervalued, trading at an attractive P/E ratio of 7.95. This comes as Gestamp maintains its full-year guidance amid global market uncertainties.

Key Takeaways

• Q1 2025 revenue fell to €2.983 billion, a 2.2% decrease from the previous year.
• Net income dropped to €27 million, down from €55 million in Q1 2024.
• Stock price rose by 2.65%, suggesting positive investor sentiment despite revenue decline.
• Gestamp is focusing on cost-cutting and operational flexibility.
• The company maintains its full-year guidance for sales, profitability, and free cash flow.

Company Performance

Gestamp Automocion’s performance in the first quarter of 2025 reflects a challenging market environment, with a notable 2.2% decrease in revenue compared to the same period last year. The company’s net income also saw a significant drop, falling from €55 million in Q1 2024 to €27 million this quarter. Despite these challenges, Gestamp’s diversified global presence and strategic initiatives in emerging markets, particularly in Eastern Europe and Asia, provide a strong foundation for future growth.

Financial Highlights

• Revenue: €2.983 billion, down 2.2% year-on-year
• EBITDA: €300 million, representing a 10.1% margin
• Net income: €27 million, compared to €55 million in Q1 2024
• Net debt: Reduced by €14 million to €2,219 million
• Free cash flow: Negative in Q1, with a target for positive flow by year-end

Outlook & Guidance

Gestamp continues to project a positive outlook for the remainder of the year, maintaining its full-year guidance for sales, profitability, and free cash flow. The company’s financial health score of 2.83 on InvestingPro indicates GOOD overall condition. The company is targeting an 8% EBITDA margin in the NAFTA region and is preparing for potential market uncertainties. Additionally, Gestamp is exploring partnerships with Chinese automotive manufacturers to bolster its global expansion efforts.

Executive Commentary

Executive Paco stated, "We are convinced that we have started the year with a quite solid start," highlighting the company’s resilience amid market challenges. Financial Executive Nacho emphasized the priority of preserving financial strength, while Paco noted the importance of reacting quickly to market changes.

Risks and Challenges

• Potential global vehicle manufacturing reduction by 1.6 million units in 2025.
• Regional market variations, with significant declines in Western Europe and North America.
• Ongoing restructuring efforts in Europe and Mexico may pose operational challenges.
• The need for strict capital expenditure policies could limit growth opportunities.
• Uncertainties in the global economic environment may impact future performance.

Gestamp Automocion’s strategic focus on cost-cutting and operational flexibility, coupled with its strong positioning in emerging markets, positions the company to navigate the current economic landscape effectively. With a consistent dividend growth track record and strong fundamentals, the stock presents interesting potential. For detailed valuation analysis and more exclusive insights, visit InvestingPro, where you’ll find comprehensive research reports and real-time financial metrics.

Full transcript - Gestamp Automocion SA (GEST) Q1 2025:

Ana Fuente, M&A and IR Director, Headcount: Evening, and thank you very much for taking the time to attend Headcount First Quarter twenty twenty Results Presentation. I’m Ana Fuente, M and A, an IR Director. Before proceeding, let me refer you to the disclaimer of Slide number two of this presentation that has been posted in our website and will state out the legal framework under which this presentation must be considered. The conference call will be led by our Executive Thank

Paco, Executive, Headcount: you, and good afternoon, and thanks for attending this call in which we will be presenting our first quarter results. Moving to the so we have been able even if we had in the first quarter twenty twenty five, we had quite challenging environment. In first time, we have been able to deliver quite strong positive results. In terms of revenues, we have recorded almost EUR 3,000,000,000, which means a reduction of 0.7 year on year in terms of our auto business in FX constant. In terms of EBITDA, we have generated EUR $3.00 7,000,000, excluding the Fenics plant expenses, which means a 10.3% EBITDA margin, which means a flat profitability year on year.

And in terms of Fenics, we are quite satisfied with the performance during this first quarter. We have been able to reach 6.4% EBITDA margin, which means an improvement compared with first quarter twenty twenty four of 187 basis points. So with all this, now we are in a position to reiterate our guidance for the full year 2025. Going to Slide five. In terms of the market, the global light vehicle manufacturing during first quarter twenty twenty five has reached an amount of 21,700,000 units, which means an increase from first quarter twenty twenty four of 1.3%.

However, this increase quarter on quarter is mainly due to an increase of in China of 11.5%, which is offsetting an additional increase or a new decrease in the Western European market of 7% and a decrease in this quarter compared with the quarter twenty twenty four in North America of 5.3%. During this first quarter twenty twenty five, the stand revenues have underperformed our market by 3.2% at FX constant and mainly because of China. In a weighted basis, average stand has outperformed the market by 1.7 percentage points. Stamps have been able to outperform the market clearly in North America and in Mercosur. Also in Europe, we have been able to do well because in Eastern Europe, we have been able to offset and balance the lower sales in Western Europe, and we have underperformed in Asia, mainly because of China, even if our sales in India are growth.

Our net sales during the first quarter twenty twenty five have amounted almost €3,000,000,000 which means, as I mentioned before, a 2.2 year on year decrease, but only €21,000,000 less sales due to organic sales and an impact of €51,000,000 coming from ForEx impact. Our auto business has performed well in terms of profitability during the first quarter of this year with two ninety five million euros EBITDA excluding Fenics expenses, which means a 10.5% EBITDA margin, in line with the margin we generated in first quarter twenty twenty four. Even if in this quarter, we have impacted by tougher volumes in our key geographies, especially in Europe, our client and geographical diversification has helped us to maintain our profitability. And of course, we have been able to react quickly, implementing several short term initiatives, including cost reductions and flexibility and restructuring measures. As mentioned before, in the appendix, we are on track during first quarter twenty twenty five.

And even if volumes in North America, especially in U. S, have dropped from the volumes we had in first quarter twenty twenty four, we have been able to perform well. In fact, in U. S, the volumes in the first quarter twenty twenty five have dropped compared with first quarter twenty twenty four by 8.3%. In terms of the expenses associated with the Fenics plan, we had recorded $6,900,000 which is in line what we were expecting and still in terms of CapEx, if we have a limited CapEx impact during this quarter and probably will come in next quarter to come.

Overall, we have been able to improve substantially by 187 basis points our EBITDA margin comparing with first quarter twenty twenty four to 2025. That means that in the first quarter twenty twenty five, we have already generated 6.4% EBITDA margin. So that means that we are absolutely on track to be able to achieve the 8% EBITDA margin that we have already announced for the full year. And in Slide number 10, in terms of scrap, we had an environment where the scrap prices at the world level are going down compared with the first quarter twenty twenty four, especially in Europe and in China. During this quarter, in the scrap, we have been able to sold more tons, but with a lower price during the quarter.

So that means that we have had an impact in terms of a reduction in terms of our EBIT margin quarter on quarter. And I think now I get back over to Inacio Mucera.

Nacho, Financial Executive, Headcount: Thank you very much, Paco, and good afternoon to everyone. Moving on to Slide number 12. We can have a closer look to our financial performance in the first quarter of twenty twenty five. As Paco has already explained, Fenics plan aimed at restructuring our NAFTA operations has had a €6,900,000 impact on our P and L and a €1,400,000 impact on CapEx for the quarter. And as a reminder in the first quarter of twenty twenty four, we had an impact of 4,400,000.0 on P and L.

We have included comparable figures for both periods ex with NUPENIX. For the first quarter of twenty twenty five we have reached revenues of EUR2983 billion, which entails a 2.2% decrease when compared to the €3,049,000,000 from Q1 twenty twenty four. Revenues for the auto business, therefore excluding the scrap, our FX constant have been almost flat with a 0.7 decrease year on year in Q1 twenty twenty five, as FX has negatively impacted our result by €51,000,000 In terms of EBITDA, we have generated €300,000,000 in Q1 twenty twenty five, meaning a 10.1% margin. Excluding Fenics impact, EBITDA in absolute terms would amount to $3.00 €7,000,000 with an EBITDA margin of 10.3% preserving the same level of profitability as in Q1 twenty twenty four. Reported EBIT decreased by 10.7% year on year to €120,000,000 with an EBIT margin of 4% as a result of slightly higher amortizations in the period.

Excluding Phoenix impact, it would amount to €127,000,000 or 4.3%. Net income in the quarter has been €27,000,000 that compares to the €55,000,000 reported in the first quarter of twenty twenty four, mainly by higher minority interest and to a lesser extent a lower year on year EBITDA in absolute terms and a slight increase in depreciation and amortization levels compared to last year. Net debt has closed the quarter in €2,219,000,000 reducing net debt in €14,000,000 compared to the first quarter of twenty twenty four. As for free cash flow, we have a negative free cash flow generation in the quarter due to the normal seasonality. However, we remain confident on reaching our full target for the year of generating positive free cash flow in the range of 2024 levels.

To sum up, we continue to demonstrate our ability to perform strongly and preserve our profitability and balance sheet discipline in a volatile market environment. If we now turn to Slide 13, we can see the performance by region on a year on year basis. Looking at each region in detail, revenues in Western Europe have decreased by 6.6% year on year in Q1 twenty twenty five to EUR1064 million. Revenue evolution in the region has been strongly affected mainly by volume pressure in the period and to a lesser extent the fall in raw material prices. In terms of EBITDA, it reached almost EUR 93,000,000 and EBITDA margin stood at 8.7% in the period, down from the 10.4 reported in the first quarter of twenty twenty four.

Profitability in the quarter has been impacted mainly by volume drop that led to a limited operating leverage and to a lesser extent impact from specific restructuring measures we are taking in the region. In Eastern Europe, the performance in Q1 twenty twenty five has been very solid, proving again our strong positioning in the region. On a reported basis, during Q1 twenty twenty five, revenues have grown year on year by 8.5% up to levels of $5.00 8,000,000 and EBITDA levels have increased by 30.5% to €80,000,000 EBITDA margin of 15.7% in Q1 twenty twenty five is above the 13.1% margin reported last year mainly due to a better project mix and operational leverage. In fact quarter on quarter EBITDA margin also improves beating the 14.5% levels from the Q4 twenty twenty four. In NAFTA, Fenics plant continues to show signs of improvement in the start of the year with good underlying operations that led to an EBITDA margin improvement in Q1 twenty twenty five.

Our revenues have decreased 2.8% year on year mainly due to the volumes production performance in the quarter. However, on the other hand, EBITDA has strongly increased by 37.2% if we exclude Fenics impact of 4,400,000.0 in Q1 twenty twenty four and €6,900,000 in Q1 twenty twenty five. This higher EBITDA in absolute terms leads to an EBITDA margin of 6.4% improving last year’s profitability in around 190 bps and setting the pace to achieve the target of around 8% EBITDA margin range for 2025. As you all know, turning around the operations in NAFTA to improve our market positioning and profitability is at the top of our priorities. In Mercosur, the first quarter of twenty twenty five has been strongly marked by the ForEx evolution in Brazil and Argentina leading to revenues almost flat in the period.

Our FX constant, we grow in the region more than 15% outperforming the market once again. EBITDA levels dropped in the quarter by 16.4% that led to an EBITDA margin of 9.6%. More similar situation to how we ended the second half of the year mainly due to the restructuring we’re undertaking in part of the business in Argentina. In Asia, our performance in the period is mainly impacted by the difficult comparable with 2024, where in the first quarter we achieved an extraordinary revenues growth of almost 11%. In the first quarter of twenty twenty five, reported revenues in this region have reached €469,000,000 in a complex and very competitive market.

As we have been mentioning in the recent quarters, our approach continues to be focusing on premium products in the region. EBITDA levels in absolute terms have decreased by 9.3% compared to Q1 twenty twenty four and EBITDA margin stood at 14.1% in the period, down from the 15% reported in the first quarter of twenty twenty four, although at the same levels as the full year 2024 will be reported at 14% margin. We keep on working to gain positioning in this region with a strong organic and profitable growth. Finally, Hedge Scrap has seen revenues increasing by 4.3% year on year to €161,000,000 despite the sustained declines in scrap prices as Paco mentioned before. Nevertheless, as explained in previous slides, we have suffered a slight decrease in EBITDA absolute terms by 2.5% that led to a margin of 7.8%.

This lower profitability in hedge scrap is mainly due to the product mix in the quarter. Overall, we have seen that our unique business model and geographic and global diversification has driven all performance and support our profitability levels in the quarter. Turning to Slide 14, we see that we started 2025 with a net debt of €2,290,000,000 which is €122,000,000 above the €2,097,000,000 reported in December 2024. This €122,000,000 increase includes dividend payment of €28,000,000 and €12,000,000 of minorities acquisitions, M and A and equity contributions and €8,000,000 of ForEx impact in the quarter. From now on we will exclude the ForEx impact in our reported free cash flow to eliminate the effect either positive or negative.

The company has generated a negative free cash flow of €83,000,000 excluding extraordinary Fenics cost in the first quarter negatively impacted by our traditional business seasonality. For 2025, we’re committed to meet full year guidance generating free cash flow in the twenty twenty four’s range. In fact, we ended the first quarter with a slightly better level than the reported last year first quarter. Finally, in terms of liquidity, we have closed March with a solid liquidity position of €2,100,000,000 which includes total cash balance of €1,300,000,000 as well as undrawn credit lines on our revolving credit facility. As a result of this and if we move to the next slide number 15, we ended the first quarter of twenty twenty five with a net financial debt of €2,210,000,000 if we exclude Phoenix plan impacts, which implies a net debt to EBITDA ratio of 1.7 times.

We have managed to improve our net financial debt delivering the lowest first quarter level since IFRS 16 implementation and sustaining the same leverage for the quarter as of Q1 twenty twenty four. Our priority is to preserve our financial strength and we remain disciplined over leverage in absolute and relative terms. Finally, we present in the slide number 16 our dividend payments in 2025 against 2024 full year net income. A total of 0.1 per share will be distributed in two payments. An interim payment that we have already paid in January 2025 and a complementary dividend approved at today’s General Shareholders’ Meeting that will be paid next July.

Restamp maintains a clear shareholder remuneration policy within a stable dividend payout of 30% of reported net profit in line with the target that was announced on 2023 CMD for the period twenty twenty three-twenty twenty seven. The long term strategy is focused on generating value for our shareholders. Thank you all. Now I hand over the presentation back to Paco for the outlook and final remarks.

Paco, Executive, Headcount: Okay. Thank you, Nacho. So during this first month of the year, U. S. Tariffs announcement have created a lot of uncertainty and volatility.

So that’s why it’s difficult right now to estimate full year volumes. And if we take into consideration the latest revision by S and P, we are now estimating that it’s going to be a reduction in terms of manufacturing of light vehicles in 2025 compared with 2024, ’1 point ’6 million units. And also, there is an estimation that the volumes are going to be also reduced for the next years to come. We focus in 2025, the most important decrease in terms of volumes are going to come from North America market and also in Western Europe. For Xhestanpe, the direct impact of tariff increase will be very much limited as we are a global and diversified payer.

So that means that we have our business model is very local to local. So that means that we are manufacturing very close to where the vehicles are assembled. So that means that our export of components to different countries is very limited, and our supplies are basically local. And in the case that they are local, we have also a pass through system we have agreed with our customers. And also, we have a very much diversified portfolio of customers.

We’re working in many countries, in 24 countries with most of the OEMs and with many models all over the world. So during this period of uncertainty, our group is very much focused in items which are fully under our control. So we try to focus right now in trying to preserve our profitability, trying to be able to keep constant and constructive negotiation and discussion with our customers, implementing all kind of measures in order to control these expenses and costs in our organization and, of course, trying to put in place any kind of measures around flexibility and restructuring as soon as possible. And of course, also trying to increase and maintain our financial profile with a very strict CapEx policy, trying to revise any existing programs, of course, preserving and very much focused, as Nacho has explained, in the liquidity level and managing our working capital cost control. So even if we have tougher market conditions with the existing measure we have in place, we reiterate our guidance for twenty twenty five full year in terms of sales, profitability, free cash flow generation and also leverage of debt.

And just to end up, just to summarize, we are convinced that we have started the year with a quite solid start, trying to be able to generate or to keep our EBITDA margin even if lower volumes, of course, prepare for a quick reaction if we have a further deterioration of the market And of course, trying to be very much focused in our priorities, like in the case of the Fenics plan that we have performed quite well in the first quarter and that we are on track to achieve our target for 2025. And with this now, I now hand it over for your questions. Over. Thank

Conference Moderator: you. Ladies and gentlemen, we will now begin the Q and A session. And our first question comes from the line of Francisco Reeves from BNP Paribas. Please go ahead.

Francisco Reeves, Analyst, BNP Paribas: Good morning, Carlos. I have three questions. The first one is, I mean, when I listen to you, I mean, you’ve been very pragmatic on your ability to reach this 8% EBITDA margin this year in NASDAQ with the Fenics plan with the 6.4% that you have announced in this quarter. So I wonder what’s the scenario that you are managing? Because I mean if the situation get worse probably it’s going be more difficult on this.

Nacho, Financial Executive, Headcount: I mean, I would like

Francisco Reeves, Analyst, BNP Paribas: to know if this 8% is under the current conditions, some of the current tariffs, etcetera, etcetera. The second question is that during the presentation, Matthew has commented several cost cutting measures. I mean, correct me if I’m wrong, but it’s Europe and Mexico. So if you could give us more detail about the impact that of the cost here and what’s the savings you expect in these geographies? And the last question is a modeling question, which is what we should expect on the minorities for the year?

Thank you.

Paco, Executive, Headcount: Okay. Thank you for your questions. I focus on the first one. In terms of how we believe that we are going to be able to reach this 8% target in terms of EBITDA profitability for the year 2025 in North American region. Of course, last year, we had a challenge in the beginning of the year because we were starting the project.

Right now, the project is already running for a full year. We have very good expectation. We have the teams very much prepared. And in terms of the environment, of course, what is going on right now with the tariffs, we are not expecting at all any kind of problems in our U. S.

Operations. And even in the case of Mexico, there could be some impact that should be very minor. So I think what we have been really focusing the different programs that we have started already last year, and that’s why we are focusing in the four levels we mentioned, discussing with customers in terms of prices and conditions, also negotiating more and more with the suppliers, of course, trying to be able also to consider a different approach in terms of our human resources and trying to improve efficiency of our operations overall and of course, also the efficiency of our assets. So overall, to be honest with you, we feel that everything is basically aligned with the expectation we had in the beginning of the year. And the kind of uncertainties around The U.

S. Studies should not impact our performance targets for 2025. I think your second question was regarding the kind of OpEx measure that we have and that we are implementing. I think this is a bunch of different measures we do in every single area in the world. Of course, there are some areas that last year were impacted with some problems, and now we have some room to improve.

But in any case, what we are now is sending a clear message to all our divisions, is it time to react quickly? We should not wait for volumes to come back. We should react. And we are implementing different measures. In terms of flexibility, as you know, we tend to preserve, especially in Europe, a kind of flexibility in terms of non fixed workforce.

So we are using this flexibility in order to be able to react. But also, we are trying to study and analyze and also already implementing some restructuring measures in some specific areas, for instance, in Europe, in some countries in Europe and also in the area of megaphone. Maybe

Nacho, Financial Executive, Headcount: Sure. Your point of the minorities, the impact of the minorities this quarter has been basically because of the acquisition we did of our participation in North America last year, which was basically done around May area in 2024. So basically, if we’d model the minorities for the full year 2025 in relation to 2024, it would be more likely to be similar to the second half of twenty twenty four applied to the full year 2025.

Francisco Reeves, Analyst, BNP Paribas: Okay. Thank you. Very clear.

Paco, Executive, Headcount: Okay. Thank you.

Conference Moderator: The next question comes from the line of Christoph Laskawi from Deutsche Bank. Please go ahead.

Christoph Laskawi, Analyst, Deutsche Bank: Good evening. Thank you for taking my questions. The first one, just following up on your NAFTA comments on the 8% margin target. So if I understand it correctly and being cost driven, we should see sequential improvements quarter by quarter until Q4 in the run up to the target, if you could comment on that? And then the second question, Block, on essentially the supply chain and potential impacts from the tariff already?

Do you see any disruption in the supply chain or any hiccups that you’ve encountered since the tariffs have been introduced? And then also on momentum in Western Europe, down 6.6%. Is the run rate essentially unchanged into Q2? Or do we see some sort of improvement with call offs stabilizing? Thank you.

Paco, Executive, Headcount: Okay. Thank you for your questions. I think in terms of the target we have for North American operations of this 8%, it’s not going to be so linear because there are some kind of negotiation, for instance, with the customer that we have agreed several price negotiations, and probably that will be taking place in some specific moment. So it’s not going to be so linear. But it’s true that we have right now more or less detailed what kind of improvement we are going to have.

And part of it is coming also for the improvement of the different operations. I think right now, last year, we did a very important improvement in some of the operations. So these operations are already running well. So when we compare with the quarters of last year, we are going to have a real reasonable improvement. But it’s not going to be so linear, but we feel quite sure, quite convinced that this 8% target is going to happen, but not quarter by quarter.

If we talk about the supply chain, of course, as you can imagine, all these announcements around tariffs is creating uncertainty in all the supply chain. But to your question, we have not seen any specific disruption in the supply chain so far. What is clear is that customers and suppliers are we are all talking. We are all having a lot of conversations together, but there is not a clear definition on any change in the volumes expected for the full year. So I think right now, it’s a moment that we need to see.

We need to wait and see what is going to happen. And of course, to be ready and to implement all kind of activities and measures that we can do in our different plans. And for Western Europe, it’s true that we have suffered many years already in a row that Western Europe volumes have been going down. We now feel that Europe is starting to react. At least we have the action plan coming out from the European Commission.

Still, we need to see these volumes going up. There is not a clear view what is going to happen and when this reaction is going to come. But we feel that the European Commission is, in some extent, prepared to help the demand, the European demand in order to offset potential problems coming out from the implementation of the tariffs and the exports that Europe is usually doing to U. S. So I think we are rather positive about the potential reaction of the European Commission and the way to stimulate the demand here in Europe.

Christoph Laskawi, Analyst, Deutsche Bank: Thank you.

Conference Moderator: And our next question comes from the line of Juan Canva from Alantra Equities. Please go ahead.

Juan Canva, Analyst, Alantra Equities: Hi, good afternoon. I wanted to know if you could give a bit more detail on your underperformance in Asia beyond what you already said and whether this could be for the whole year? Also, you made some comments recently about your intention to look for alliances or acquisitions in China. I wonder whether you could comment on that. And finally, overall, was wondering whether the volume decreases that you that IHS is forecasting will

Paco, Executive, Headcount: not

Juan Canva, Analyst, Alantra Equities: have an impact on your operating margins, given that they are expecting a 9% decrease in North America and 6% in Western Europe? You.

Paco, Executive, Headcount: Yes, thank you. Thank you for the questions. I think we have already presented to you what we are expecting for Asia. It’s true that last year, we had a very solid performance in the first quarter. And this year, we still have a 14% EBITDA margin for the first quarter.

It’s true that this year, the sales in from our Indian operations are growing. So that means that the part of the profitability this year is coming more a bigger part of the profitability this year is coming from India. And it’s also true that we keep a good level of sales China. But it’s also true that the competition in the Chinese market is strong and that our teams are working very hard in order to be able to preserve profitability. In any case, the profitability of the last year was quite strong, and we are intending to have the same levels or similar levels of profitability for this year.

In terms of what kind of alliances we are doing in terms of potential acquisitions or whatever in China. I think the most important part of what we are doing in China is trying to be able to increase our sales in China for domestic Chinese players. But also, we are doing a huge effort in order to be the partner of the Chinese companies when they become global. That means, as you know well, that there are many, many different brands in China, but not all of them are going to be able to become global players. And we are natural partners of the biggest of them.

Right now, there are three, four, five big companies in China, which are starting to become global, opening industrial plants in different areas in the world. We already work with them in China. We have a very solid footprint all over the world, and we are absolutely convinced that we are the natural partner for these Chinese companies when they become global. And then the last question around how we feel about trying to be able to offset the potential decrease in volumes for the year in Europe or in North America. We have a visibility today, which is coming from IHS and the demand and the EDs from our customers.

So the volumes, we already know that they are lower. So that’s why we are implementing measures. And with this environment, we feel that we can reiterate the guidance that we provided by the February. Of course, we don’t know how the scenario is going to be. Maybe it could be better or worse, but we are prepared to react.

And the important message to all the teams, all the members of our teams is that we need to react quickly because we are now in a special moment, and it’s time to take decisions very soon.

Juan Canva, Analyst, Alantra Equities: Thank you.

Francisco Reeves, Analyst, BNP Paribas: Thank you.

Conference Moderator: The next question comes from the line of Jose Maria Soumendi from JPMorgan. Please go ahead.

Paco, Executive, Headcount: Thank you

Jose Maria Soumendi, Analyst, JPMorgan: very much. Good evening, Paco. A few questions, please. I was wondering if you could give us an update with regards to the process of winning additional business with Chinese OEMs in Europe and the opportunity you have there expand the business with them, linking this with your previous comment of following the Chinese across the world? Second, can you comment please on CapEx?

How should we think about it maybe first half, second half of the year or for the full year? And then three, maybe also linked to the first question, I saw some comments from Patricia on the Shanghai Auto Show. Can you give us an update on impressions from the Shanghai Auto Show product exposition that you did there? Any reaction you got from the clients? Any additional business opportunities you could share with us?

Thank you.

Paco, Executive, Headcount: Okay. Thank you for your question. So I think I could take the China ones, and maybe, Natu, you can help me with the CapEx. So if as you know, we usually don’t like to give too many details about what we are doing with the different customers. But I think it’s quite known that there are already some Chinese players starting operations everywhere in the world.

We are a natural partner everywhere in the world in our footprint, but especially in Europe. In Europe, big players like Cherry that already announced, the new plant started in Barcelona or new plants potential in Turkey in the case of BYD. We are also a natural partner of Geely from Gears. And also there is MD with Saipe. There are some groups that are very active.

We are already a very important supplier of them in China. In some cases, we have been working and we have been already receiving request for quotation for some of them for the potential programs. And we feel we have a very good position in order to be able to become the natural partners of them, especially in Europe, not only in Europe because we have also supported some request for quotations in other areas, especially in Latin America. And regarding the Shanghai Auto Show, it’s true that we were there two weeks ago. And it’s I think we all know that right now, the most important auto show in the world is happening in Shanghai.

We saw a lot of new models coming out from domestic Chinese brands, but also from European or American brands, a lot of different brands, models and innovations. And so that’s why we decided this year we have done another year, but this year more than ever to prepare a booth with a lot of our innovations. And we have had a lot of visits from different customers. So we feel like we have done a very good job. We are optimistic about how this is going to impact in the future in our sales in China and of course, in our sales with Chinese OEMs outside from China.

And maybe on CapEx, Natza?

Nacho, Financial Executive, Headcount: Sure. Thank you. Jose, as you may recall, we are not providing specific guidance on CapEx as we are focusing on leverage and we provided guidance to be in the range of last year’s to which we’re fully committed as Paco mentioned in his final remarks. However, just to give you a flavor of what has happened this quarter, we had CapEx levels of $2.00 €4,000,000 versus €236,000,000 which a little bit demonstrates what also the comment that we have been making about a strict CapEx policy and reviewing our investments.

Paco, Executive, Headcount: Thank you. Thank you very much. Okay. Thank you.

Conference Moderator: There are no further questions from the conference call at this time. So I’ll hand back to the management team. Thank you.

Ana Fuente, M&A and IR Director, Headcount: Well, thank you very much for having joined us today. And as usual, the IR team remains at your disposal for any further questions. And we hope you have a very good evening.

Paco, Executive, Headcount: Okay. Thank you very much.

Nacho, Financial Executive, Headcount: Thank you.

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