(News Bulletin 247) – The company’s current operating profit jumped by more than 70% in the first half, thanks to a positive jaws effect on costs and selling prices.

The year 2023 may be the year of revenge for auto parts manufacturers. Last year, the sector suffered from production disruptions by manufacturers and inflation in raw materials, energy and wages. Which is all the more restrictive since the equipment manufacturers have fewer levers than the manufacturers who, for their part, can directly pass on the costs to the selling prices of the vehicles.

But the climate is clearly improving this year, with a rebound in volumes and less violent inflation. The margins of Valeo and Forvia thus recovered significantly in the first half. Forvia also represents the fifth largest increase (+40%) in the SBF 120 since the start of the year.

Much smaller than the two large French groups in the sector, Akwel is no exception and thus published sharply increased results for the first six months of the year, Thursday after the market closed.

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Uncertainties with strikes in the United States

The group specializing in fluid systems and mechanisms and structural parts for electric vehicles had already published at the end of July a half-year turnover up 11.7% in published data. The group was forced to adjust this figure for purely accounting reasons to reflect the devaluation of the Turkish lira, which lowers the increase to 8.6%. On a like-for-like basis, growth remains at 16.2%.

Further down the income statement, current operating profit jumped 70.6% to 30 million euros in the first half, while the corresponding margin increased from 3.6% in the first half of 2022 to 5.7% . The net profit amounts to 19.2 million and has increased tenfold over one year.

“Continued growth in business volumes combined with better control of costs and sales prices makes it possible to return to a more significant level of profitability. Pressure on costs, however, remains significant, particularly on payroll, even if the prices of energy and transport are today more contained”, developed the company.

Regarding its prospects, Akwel confirmed that it expects growth in its turnover of around 10% this year, even if the company recognizes that the current strikes in the United States could create “new uncertainty in the northern market”. -American”. The company also indicates that it now expects an increase in its operating profitability over the entire financial year.

Future pressures?

“Very good publication combining surprise on the margin and new increase in guidance (outlook, Editor’s note)”, appreciates TP ICAP Midcap, in its note of the day.

On the Paris Stock Exchange, Akwel shares rose 5.2% to 16.20 euros, bringing the group’s capitalization to 433 million euros.

However, TP ICAP Midcap remained “hold” on the stock, with a price target adjusted to 17 euros compared to 15 euros previously.

“Leading indicators (order books, promotions) point to a deterioration in European automobile demand,” says the research office.

“We believe that historical double-digit profitability standards will remain out of reach in the medium term due to the group’s necessary adaptation to the accelerated electrification of the European automobile fleet (duplicated product lines, less differentiated electric vehicle products than for thermal)”, he continues.

“Finally, Akwel’s European industrial footprint makes the group particularly sensitive to structural pressure on volumes in the region where the peak of automotive demand has been exceeded and which tends to become increasingly competitive (notably from manufacturers importing their production from Asia), adds TP ICAP Midcap lastly.