Q1 2025 on track – next stage of transformation underway

PRESS RELEASE

ElringKlinger: Q1 2025 on track – next stage of transformation underway 

• Results for the first quarter of 2025: 
  • Group revenue at EUR 423.1 million (Q1 2024: EUR 465.3 million), year-on-year improvement of 2.2% in organic terms
  • Adjusted EBIT margin of 4.9% (Q1 2024: 5.2%) in line with annual target of around 5%
  • Operating free cash flow at EUR -120.3 million (Q1 2025: -5.8 million EUR) due to pre-financing of projects and extensive investment activity, net financial liabilities at EUR 370.4 million (Q1 2024: EUR 329.1 million)
• Management Board adopts STREAMLINE cost reduction program to enhance competitiveness; savings target: at least EUR 30 million p.a. from 2026
• CEO Thomas Jessulat: “We have already made strategic decisions for the purpose of focusing our activities, and we will concentrate on our profitable areas of business as we move forward. As part of the STREAMLINE program, we are now adapting our internal structures to ensure we are effectively positioned for the next stage of transformation."

ElringKlinger AG (ISIN DE0007856023 / WKN 785602) has presented its financial results for the first quarter of 2025. In the period under review, the ElringKlinger Group generated revenue of EUR 423.1 million (Q1 2024: EUR 465.3 million). In this context, it should be noted that the two divested Group entities in Switzerland and the United States had contributed revenue of EUR 44.7 million in the first quarter of 2024, i.e., the corresponding comparative base with regard to the same quarter of the previous year is EUR 420.6 million. Additionally, revenue was diluted by currency effects equivalent to EUR 7.9 million or 1.7%. In organic terms, i.e., adjusted for currency and M&A effects, revenue increased by EUR 10.4 million or 2.2%. This translates into a better performance than the market as a whole, which changed by +1.3% globally and -6.7% in Europe in the first quarter of 2025.

Sustained growth of E-Mobility business unit
While the Aftermarket segment expanded by 12.8% and Engineered Plastics by 12.1%, the Original Equipment segment saw a slight contraction, taking into account the sale of the two Group entities. Within the segment, the E-Mobility business unit once again more than doubled its revenue from EUR 11.3 million to EUR 26.8 million. This was driven in particular by the further ramp-up of a large-scale series production order for cell contacting systems at the Neuffen (Germany) site.

Adjusted EBIT margin on track
In terms of earnings, the Group remained on course amid difficult conditions in the first quarter of the year and recorded an adjusted EBIT margin of 4.9% (Q1 2025: 5.2%) on the back of adjusted EBIT of EUR 20.5 million (Q1 2024: EUR 24.0 million). With investments amounting to EUR 45.0 million (Q1 2024: EUR 16.9 million) and net working capital standing at EUR 454.4 million (Q1 2024: EUR 489.3 million), operating free cash flow totaled EUR -120.3 million in the first quarter of 2025 (Q1 2024: EUR -5.8 million); around a third of this was attributable to investments in property, plant, and equipment. In view of the forthcoming ramp-up of further high-volume series production orders and the associated preparations, elevated figures had been anticipated for investments and diluted figures with regard to cash flow compared to previous year’s quarter. As a result of these changes, net financial liabilities of EUR 370.4 million (March 31, 2024: EUR 329.1 million) were up on the corresponding prior-year figure.

Commenting on the quarterly results, Thomas Jessulat, CEO of the ElringKlinger Group, said: “We are currently investing in the manufacture of E-Mobility products on the basis of the high-volume orders we have received. In Neuffen, production relating to the first order for cell contacting systems continues to ramp up, with work on a further order scheduled to commence at the end of the year. We are also making preparations for series production in China and are in the process of setting up our Battery Hub Americas in South Carolina in the United States. These key steps towards growth are reflected in investments as well as in cash flow and net financial liabilities. Essentially, we are on track to meet our annual targets for 2025."

Guidance confirmed
The Group's projections for revenue in 2025 remain in line with the prior-year figure in organic terms, while the adjusted EBIT margin is expected to be around 5%. As regards operating free cash flow, ElringKlinger's guidance remains at around 1 to 2% of Group revenue. The Group's target for its net debt-to-EBITDA ratio (net financial liabilities in relation to EBITDA) is around 2. Alongside the other key metrics for 2025, the medium-term outlook has also been confirmed.

STREAMLINE cost reduction program in support of greater competitiveness
In an effort to further bolster ElringKlinger's targeted positioning for the future and to improve the Group's ability to compete on a sustainable basis, the Management Board has resolved to implement the STREAMLINE program aimed at reviewing and trimming the Group's staff cost structure. STREAMLINE includes selective measures for various groups of employees and is aimed at optimizing the Group's capacity levels in its individual corporate and business units. The guiding principle for employees at the German locations is that all actions are mutually voluntary in nature. In this context, one of the core elements of the program is an intragroup job market to help reassign employees to other areas. The program aims to streamline the Group's staff costs by at least EUR 30 million per annum from 2026.

Thomas Jessulat, CEO: “Over the past few years, ElringKlinger has established a broad product portfolio and evolved its organizational capabilities accordingly. As part of the transformation of our industry, we have already made strategic decisions for the purpose of focusing our activities, and we will concentrate on our profitable areas of business as we move forward. Our STREAMLINE program is aimed at adapting our internal structures to the new circumstances so that we are effectively positioned for the next stages of transformation."

In rolling out its SHAPE30 transformation strategy, the Group has already put in place key measures to ensure it remains competitive well into 2030. Alongside the sale of two entities in Switzerland and the United States, this also includes the decision to discontinue its system business for electric drive units and concentrate on the profitable components business. The Group is also consolidating its global network of sites.

Key financials for Q1 2025

* The figures for the first quarter of 2025 reflect the completion of the divestiture of the two subsidiaries in Buford, GA (USA) and Sevelen (CH) at the end of 2024.

^◊ Figures adjusted for the contribution of the two subsidiaries in Buford, GA (USA) and Sevelen (CH)

About ElringKlinger  
As an independent supplier operating worldwide, the ElringKlinger Group has established itself as a powerful and trusted partner to the automotive industry – acknowledged for its exceptional depth of expertise. Our product portfolio encompasses innovative solutions for passenger cars and commercial vehicles powered by electric motors, hybrid technology, or combustion engines. Alongside the powertrain, other areas of application include the underbody, chassis, braking system, interior, and vehicle body. We were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility – with pioneering battery and fuel cell technology, and associated components and assemblies, such as plastic housings, and punched and formed metal parts.

Customized lightweight components engineered by ElringKlinger can be used throughout the entire vehicle; they deliver tangible benefits in terms of weight reduction, efficiency, and functional integration, especially in e-mobility applications.

Additionally, we serve the aftermarket in more than 140 countries with an extensive range of spare parts.

These efforts are supported by a dedicated workforce of more than 9,000 people employed within the ElringKlinger Group. Operating at more than 40 sites worldwide, ElringKlinger has established a global presence and is closely aligned with its customers in all major automotive regions.

Legal notice
This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.