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Montana Aerospace AG reported a robust performance for the first quarter of 2025, with significant growth in revenue and profitability. The company saw its sales rise by 15% year-over-year to €408.8 million, while EBITDA increased by 32% to €48.5 million. Despite a CHF 10 million non-cash foreign exchange impact, net income doubled to €5.3 million. Following the earnings announcement, Montana Aerospace’s stock surged by 11.44%, closing at €17.14, reflecting investor confidence in the company’s growth trajectory. According to InvestingPro analysis, the company is currently trading below its Fair Value, suggesting potential upside opportunity. For deeper insights, InvestingPro offers 8 additional key tips about Montana Aerospace’s financial outlook.
Key Takeaways
- Sales increased by 15% to €408.8 million, driven by strong demand in aerospace and energy segments.
- EBITDA margin improved significantly from 6% to 12%.
- Stock price rose by 11.44% following the earnings release.
- The company is expanding into the space market with new contracts.
- Management is optimistic about maintaining a high EBITDA margin.
Company Performance
Montana Aerospace demonstrated strong performance in Q1 2025, benefiting from increased demand in both its Aerostructures and Energy segments. The company’s strategic focus on producing mission-critical parts for commercial aircraft and copper core products for green innovation has positioned it well amid volatile market conditions. With a strong current ratio of 4.45, InvestingPro data shows the company maintains robust liquidity to support its operations. The expansion into the space market with new contract packages further underscores its growth ambitions.
Financial Highlights
- Revenue: €408.8 million, up 15% year-over-year
- EBITDA: €48.5 million, up 32% year-over-year
- EBITDA margin: Improved from 6% to 12%
- Net income: €5.3 million, up from €2.7 million
Market Reaction
Montana Aerospace’s stock experienced a notable increase of 11.44%, reflecting investor enthusiasm about the company’s robust financial performance and strategic initiatives. The stock’s movement places it closer to its 52-week high of €21.45, indicating strong market confidence. InvestingPro analysis reveals a beta of 1.39, suggesting higher volatility than the broader market. Get access to comprehensive valuation metrics and 10+ additional ProTips with an InvestingPro subscription.
Outlook & Guidance
The company has set ambitious targets for the coming years, with 2025 sales expected to slightly exceed €1.6 billion and adjusted EBITDA projected to surpass €200 million. For 2026, Montana Aerospace anticipates sales around €2 billion and adjusted EBITDA slightly over €250 million. These projections highlight the company’s confidence in its growth strategy and market positioning.
Executive Commentary
Michael Grister, Co-CEO and CFO, emphasized the company’s global yet local approach, stating, "We are one of those suppliers who is on a global scale, still local to local with entities in Asia, in Europe and in Americas." Co-CEO Kai Arndt noted the potential for volume growth, saying, "If the volume is kicking in, it shows definitely the potential we have in this segment."
Risks and Challenges
- Supply chain challenges remain a concern, with potential impacts on production timelines.
- Volatility in the aerospace market, particularly in OEM deliveries, could affect demand.
- Tariff impacts and regulatory changes pose risks to international operations.
- The CHF 10 million non-cash FX impact highlights exposure to currency fluctuations.
Q&A
During the earnings call, analysts inquired about the sustainability of the improved EBITDA margin. Management expressed confidence in maintaining around an 18% margin, citing potential volume increases and improved cost absorption as key factors. Additionally, the company addressed industrialization payment mechanisms and their impact on financial performance.
Full transcript - Montana Aerospace AG (AERO) Q1 2025:
Conference Call Operator: And gentlemen, welcome to the Montana Aerospace Q1 twenty twenty five Earnings Call and Live Webcast. I’m the TV Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded.
The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast. At this time, it’s my pleasure to hand over to Michael Pistauer, Co CEO and CFO. Please go ahead, sir.
Michael Grister, Co CEO and CFO, Montana Aerospace: Thank you very much, and hello, everybody, and welcome to our Montana Aerospace earnings call for the first quarter twenty twenty five. Time is passing fast. We will show you and present you the numbers for the first three months twenty twenty five, compare them to development in comparison to 2024, the first quarter give you an expectation of what we see as an outlook also for the next months ahead and the rough guidance and some detailed expectations from our side on the different segments for the rest of the year and the rough outlook also for 2026. I will guide you through the presentation. My name is Michael Grister, Co CEO and CFO of the company.
Against the announcement, also Kai Arndt, Co CEO and responsible for Aerostructures could make it in time. He come directly back from a large OEM from The U. S. And we will then hand over once we come to the Aerostructures to Kai to give you a more detailed background of the developments there. Let’s flip directly into the results, which we are very happy to present.
The maybe we can hopefully, you can see the presentation already on the necessary pages. Here we have a result, which is I don’t know if you can see the presentation page is flipping, at least from my screen. I don’t see it changing. Hopefully, you can see it. In any case, I just announced the page number so that you know where we are.
On Page number three, we still talk about Montana Aerospace as a two segment business. So Aerostructures and Energy. Aerostructures is not only the main driver of the business, but also the name giver. Here we produce this mission critical aerostructure parts for all kinds of airplanes and all the different stages. And I guess we can see that we are mission critical for every commercial aircraft in the sky and also many others.
Energy, second segment. Here, are powering the green innovation with our copper core products and driven by the energy transition by the large demand for new applications concerning transformation and generation. The development of the company, Montane Aerospace, as we see on Page number four of the presentation, was extremely solid and we’re happy to present. We have seen strong growth in sales and what is out of our view more important is the concentration on the EBITDA, on the earnings and the net income and on the cash flow, which we will see over the following pages to be strong and over proportionate to the growth of sales. But as said, good driver of the business is the development of the sales.
And here we saw a solid growth of over 15% from first quarter twenty twenty four in comparison to now the first quarter twenty twenty five. Or if you compare it two years backwards, it’s over 34%. So every year, the same procedure over proportional growth and we are well in track to our guidance of a bit more than DKK 1,600,000,000.0 for the full year 2025, which is DKK 408,800,000.0 on sales, which we generated in the first quarter. EBITDA, as we said, concentration on the results, followed by a good mix of customers where we are where we were able to compensate and generate more sales in the, let’s say, all the good market share in with other new customers or newer customers. And here in general, we were able not only to generate a good EBITDA, but also a strong development over the years.
We see another growth of 32% from €36,700,000 in the first quarter twenty twenty four to €48,500,000 in the first quarter twenty twenty five. Or if you compare it over the last two years, we see that we rose the EBITDA margin by a factor two from around 6% to now 12%, which is well in track with our guidance and also with our development of course. It’s even a bit stronger than what we expected ourselves. And we’re happy about this development as we see that the concept of economies of scale, scaling up a good mix of customers is working out well and that our products are mission critical. Important on the right hand side of this Page number four, you see net income.
As said, concentration on cash and income and earnings. We have seen in comparison to first quarter twenty twenty four also here a strong growth DKK 5,300,000 versus 2,700,000.0 the last year. Nevertheless, it was negatively impacted by very, I would say, unfavorable development of the U. S. Dollar, mostly or the FX in the first quarter twenty twenty five, we had an impact of almost CHF 10,000,000 only as non cash impact on the balance sheet, which are shown in the financial results.
Otherwise, our net income would have been even stronger. But I guess the development of what we see right now in the net income and the earnings EBITDA and also in the sales is quite promising and gives us tailwind also for our guidances for 2025 and 2026. If we flip to the next page, here we see on Page number five, the development of the operating cash flow and the free cash flow. Every year the same procedure. First quarter of the year is typically the weakest one concerning the cash flow.
Why? Because there is a seasonality concerning the earnings, the increase of the working capital, which we see them on the later pages. There is typically a large negative impact from financing of the working capital, which influences heavily over the cash flow in the first quarter. That’s what we see also in 2025. Nevertheless, in comparison to last year, 2024, we see already a positive impact.
So we in comparison to 15,800,000.0 now minus €5,400,000 Operating cash flow is three times better, if you may call it like that one. And therefore, with the same or similar development ahead for the next quarters to be awaited, We look quite positive also into the future. Free cash flow, similar development. And if you flip them to the next page, the impact from the cash flow is mostly driven by a good EBITDA, which we saw in the previous pages. On the other hand, the negative side, but also an increase of the trade working capital.
We expect strong sales in the second, third and fourth quarter twenty twenty five. Also, would say, still some topics out of the strike of Boeing and expected higher build rates somewhere later this year, of course, impacted the need for inventory on our side. Therefore, you see in comparison to 2024 an increase in the trade working capital. Of course, we also had an increase in sales, but in comparison also to sales, it rose slightly. And the reason is we see some stronger sales ahead.
And as I said, some impact out of 2024, which influenced heavily the trade working capital. Net debt, nevertheless, crucial KPI out of our view, as we usually always envisage cash flow strong business and the cash strong business and therefore, intend to reduce constantly the net debt level of the Montana Aerospace group. And here we are on a good track. So in comparison to the last year, same period, so Q1 twenty twenty four by approximately DKK 70,000,000. A reduced net debt is shown right now with DKK $252,000,000.
Saying that, we, I guess, can summarize that for Mutane Aerospace, we had a very strong solid slightly above expectations Q1 concerning sales, but mainly concerning the earnings, EBITDA, net income and also cash flow, small impacts out of the trade working capital, but by clear strategy. Saying that, I would like to hand over to Kai for giving you more details on Page number seven and the following on the Aerostructure segment and development there.
Kai Arndt, Co CEO, Responsible for Aerostructures, Montana Aerospace: Thank you, Michy, and good afternoon. I hope everybody can hear me good. I’m in the parking slot of the supermarket and I don’t see the presentation. So it’s a little bit challenging today, but of course, I’m happy to be in the call and can answer all the questions, which hopefully come later. As you can see on Page seven, this is the Q1 of the Aerostructures segment.
And from my point of view, it shows definitely the potential we have in this segment if the volume is kicking in. So we had some stable demand in most of the programs, but in others there was a lot of volatility in the demand from several programs, very unpredictable to plan for. This is also then reflected in the working capital, of course. But we expect that this is simply the what is coming from the last years where we had Mickey mentioned it, the Boeing strike and some other topics. And also for Airbus, you see the deliveries by yourself.
April, both again for the big OEMs, Not a real fantastic month. You see that there are in Airbus, they announced 56 deliveries. Boeing will be 40 ish, more or less on the level of the average of the first quarter, but not more. So this gives us the challenge in terms of the following months to come, how to plan for it. And this, as Michy said, is also reflected a little bit in the working capital, but we managed to bring this down and we will see that over the next months to come that also here, we hopefully then will have the impact from the good EBITDA into the cash conversion.
In numbers, if you compare Q1 twenty twenty four to Q1 twenty twenty five, it’s a 7% growth only, I like to say, because of course, this is then again reflecting that the growth rates with the OEMs is not as big as maybe we saw that in the newspapers and the announcements. But on the other side, the growth rate on the EBITDA from 29% to 39% is reflecting a 36% in terms of growth. And again, this is from my point of view showing how strong the company is if we get the volume, if we get some other businesses not only relying on the OEMs. So also space is a very fast growing market for us and we are winning some good packages on this side. We had some NRC payments from the OEMs for several industrialization projects we are doing right now.
So this is all reflected in this number and again is showing the potential of the Aerostructures segment. The outlook and I guess there will be also some questions on the tariffs. This is again a very volatile discussion we have there with global setup of the Aerostructures segment, of course, there are very, very different impacts from the tariffs for the moment. And as Mickey said, I’m just coming from Seattle. There’s definitely also a willingness from the OEMs to source it for the supply chain.
And you can easily imagine we are talking about 10,000 suppliers having more or less the same problem. So somehow the OEMs have to step in and to balance it if there is any impact. And from yesterday’s discussions, I definitely think that there will be the support which we might need if there is no solution from the politicians. So that’s good. In terms of the growth rates, deliveries, if we start talking about Boeing, then you can see that there’s still the ceiling of the deliveries on the seven thirty seven.
And hopefully, in the next weeks or maybe months to come, the FAA will release this. And then of course, the growth rates will come like announced by Boeing. I think they are in a pretty good shape operationally to fulfill everything to make this happen. And for Airbus, it’s more or less the same. We saw some impacts on the A350, for example.
But overall, it’s a stable growth and with winning more and more packages with better margins, obviously, as you can see, I’m quite positive that we at least will make it to the guidance for this year. Yes, that’s so far from the Aerostructure segment and I’m happy to answer questions after the presentation. Thank you.
Michael Grister, Co CEO and CFO, Montana Aerospace: So talking about Aerostructures, we flip to the next segment, which shows the other segment, which is Energy. In the Energy segment, which we see on Page number eight, we had again a growth, still a tailwind is driving the business. Limitations for more sales or EBITDA is only limited by the present capacity. Capacity is built or established and installed, but it takes some while, the four years program, to increase the capacity accordingly to the market demand. What we see is nevertheless that every, I would say, kilogram of copper cores for the transformers and generators, which are needed by our customers worldwide is sold.
And this is driving the business on the net sales basis by from one year to another one by 15% as we saw from 2024, ’20 ’20 ’5, increasingly fast concerning the growth rates due to the ongoing installed new capacity and overproportionately, shown in the EBITDA with, I would say, ongoing development on the price increases, still in the partnership style together with the OEMs and our customers. And this is then reflected by growth of the EBITDA by 25% or plusminus double the growth of sales on a unit basis. For the Energy segment, again, try to find a solution concerning more and more developing pure play Aerostructures business. Then the strong development, of course, also from the Energy segment helps to support the development of the total group. Talking about the two segments, we come to the guidance 2025 and also 2026.
We published this guidance already a couple of weeks or months ago. In sales for the two segments, Multana Aerospace in total slightly above DKK 1,600,000,000.0 in total sales. Adjusted EBITDA of over DKK 200,000,000 and fairly good net positive net income and the positive free cash flow, reduced net debt and also a streamlined trade working capital. We stick to this guidance. There are, of course, in the meantime challenges like tariffs, ongoing volatility of the OEM demands.
Still I would say issues concerning the supply chain as already mentioned by Kai. On the other hand, big, big changes for us more midterm than short term, but still as we are one of those suppliers who is on a global scale, still local to local with entities in Asia, in Europe and in Americas. And this supports strongly together with our mission critical performance in the meantime in products. Our development, therefore, we stick to the guidance 2025 and also for 2026. We reiterate the rough guidance of around DKK 2,000,000,000 on total sales with around a bit more than DKK $250,000,000 adjusted EBITDA.
Thank you for the again, for this conference call. We would now come to the Q and A session where we are happy to try to give you the best possible answers to your questions. Think that I would hand over to the moderator.
Conference Call Operator: Thank you. We will now begin the question and answer session. You. The first question is from Christian Bader, Societe Generale Bank. Please go ahead.
Christian Bader, Analyst, Societe Generale Bank: Yes. Good afternoon, gentlemen. Congratulations to these excellent numbers. And I have two questions, and I’d like to do them one after the other. So first of all, obviously, the EBITDA margin in Aerostructures was excellent and almost four percentage points ahead of last year.
So last year, the EBITDA margin improved sequentially. And the full year EBITDA margin 2024 was significantly higher than the first quarter of last year. So I’m wondering, are we now able to model a similar improvement of EBITDA margin for the rest of the year? This is my first question.
Michael Grister, Co CEO and CFO, Montana Aerospace: I guess you split the Okay. Thank you
Kai Arndt, Co CEO, Responsible for Aerostructures, Montana Aerospace: for the wonderful question.
Michael Grister, Co CEO and CFO, Montana Aerospace: I would start and then I hand over to Kai directly to give you more insights. I’ll start with the financial topics about it. Principle, there is a certain seasonality, yes, not only from the build rates by the OEMs or the pull rates, which are more crucial for us, but also concerning certain price developments, for instance, also Kai mentioned in our fees, which are then booked in the third and the fourth quarter, which usually, therefore, it’s what you have also seen in the last years was on the price increases, which are in the meantime contracted. They are accounted then in the third and fourth quarter. And therefore, you see a development, which is usually impacted by a strong EBITDA absolute and also on relative margins level in the third and fourth quarter.
Details on the driving force, the build rate I would hand over, which is the main driver I would hand over to Kai.
Kai Arndt, Co CEO, Responsible for Aerostructures, Montana Aerospace: Yes. Thank you, Mickey. First of all, thank you very much for the comment. I mean, also we, of course, are proud for the results. And it’s definitely a pleasure to present these numbers instead of having always the critical calls when there were crisises from the OEMs downsized to us.
That’s better to report on this one. When it comes to the margins, of course, we have the ambition to at least stay on this level. But knowing that hopefully the volume will come back and the growth rates which are announced by the big OEMs will kick in, mechanically the cost absorption should give us another push on the margins. If it’s very high, I don’t dare to say. But as Michy said and I mentioned also, we had some extraordinary payments in the first three months of the year, which are reflected in the margins.
And of course, I’m talking about NRC, then there is normally not the operations behind. So this is mainly paid for the industrialization projects we had. So on the other side, we won some quite nice new packages reflecting Can you still hear me?
Christian Bader, Analyst, Societe Generale Bank: Yes.
Michael Grister, Co CEO and CFO, Montana Aerospace: Can
Kai Arndt, Co CEO, Responsible for Aerostructures, Montana Aerospace: you
Michael Grister, Co CEO and CFO, Montana Aerospace: hear me?
Christian Bader, Analyst, Societe Generale Bank: Yes.
Kai Arndt, Co CEO, Responsible for Aerostructures, Montana Aerospace: Okay. So then because my car shut off. So this is reflected then also in the EBITDA margins that we won some nice new packages in normal aerostructures business, which are kicking in now. And there are still some big, big calls for tenders with the OEMs. So I hope that also in the coming years that the margin will at least stay on this amount so that we can definitely build that in our guidance for the years to come.
And I’m quite positive that we have good chances even to increase the margins.
Christian Bader, Analyst, Societe Generale Bank: But I think you mentioned some one off payments for industrializations. Is it possible to quantify those? Or how exceptional are those payments in the first The
Michael Grister, Co CEO and CFO, Montana Aerospace: business works in a way that we usually win a contract after investment or CapEx. CapEx already costs only the CapEx, but it’s usually also impacting some costs, which are then reducing the EBITDA. Once you have the contract, the industrialization starts. It’s a process depending on the customer, the product and in the end somewhere between six and eighteen months. And in the meantime, we are seen as a, I think, partner also for the OEMs and therefore, a lot of this industrialization work is leading to our end and also paid.
So it means it’s not a one off, which you get them deposit. There is personnel expenses. There’s a lot of industrialization work behind. Then this is only then invoiced to the customer and paid. So it’s what kind of a cost absorption of what we have or at least partly cost absorption of the industry regulation.
So I would not call it, therefore, one offs, but what and therefore, it’s not an impact you have to calculate also for the guidance or for the calculation of the model for the next quarters somewhere as a one off. It’s only partly compensation of the work which is already done within this month.
Christian Bader, Analyst, Societe Generale Bank: Okay. So in terms of profitability for the Aerostructures business, is it fair to assume at least a steady margin for the next couple of quarters, at least the 18% that you achieved in the first quarter?
Michael Grister, Co CEO and CFO, Montana Aerospace: There will be maybe some ups and downs on a monthly basis, but on the quarterly on a full year range, we are quite positive to provide this one on a constant basis, yes.
Christian Bader, Analyst, Societe Generale Bank: I see. All right. Okay. That’s clear. And my second question has to do with some cash flow items.
I saw in your quarterly report that you had a positive lease. So it was a lease repayment or something of 3,900,000.0 in the quarter. I assume this is unusual and, let’s say, regular lease payments will come back from the second quarter. Can you maybe help me understand this number in the first quarter, please?
Michael Grister, Co CEO and CFO, Montana Aerospace: I can help provide you. We had a negative take a look at the on the report. So if you excuse me for a second to give you the detailed answer there. But usually, we have, of course, lease payments. Yes.
And if there’s a prolongation of the lease payments or a change of the lease structure, of course, you have to adjust it. I don’t have to explain your IFRS, I’m sure you’re much more familiar than me. And those typically those changes of long term contracts then lead to a change of the lease amount in the P and L and those prolongations and changes then impact in the lease structure what we have in the P and L.
Christian Bader, Analyst, Societe Generale Bank: Okay. So going forward, you do expect lease expenses or lease payments to return? We
Michael Grister, Co CEO and CFO, Montana Aerospace: have a normal level of lease payments on corporate level and definitely not typically no major change.
Christian Bader, Analyst, Societe Generale Bank: Okay. All right. Thank you. That’s it for me.
Michael Grister, Co CEO and CFO, Montana Aerospace: You’re welcome. The one point which I would like to mention, if you look at the cash flow at the result is what I said already, the financial result, there is around EUR 10,000,000 impact of noncash FX impact. But it’s something I mentioned when we went through the presentation.
Christian Bader, Analyst, Societe Generale Bank: Yes. Thank you.
Conference Call Operator: Gentlemen, this was the last question. I would like to turn the conference back over to you for any closing remarks. Thank you.
Michael Grister, Co CEO and CFO, Montana Aerospace: Thank you very much for attending today’s earnings call. We were proud and we are proud and happy to provide those numbers. We work everybody of the more than 7,500 people work hard to achieve those numbers, and we do our best also to overachieve expectations in us for the next three quarters. They will be again challenging. That’s what we count with.
But we are quite positive that at least we meet or even overachieve the expectations in us and we will then hear each other for the next quarterly earnings call. Thank you very much.
Conference Call Operator: Ladies and gentlemen, the conference call is now over, and thank you for participating. You may now disconnect your lines. Goodbye.
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