(News Bulletin 247) – The automotive supplier indicated that it outperformed automobile production in all regions in the third quarter. Opmobility confirms its annual objectives despite a still complex market environment.

The automotive sector is clearly the disappointment of this year 2024, after profit warnings affecting many European manufacturers. In this adverse market environment, the publications of automotive equipment manufacturers are also closely monitored.

Last week, Forvia delighted the market with slightly better than expected results and the confirmation of its 2024 objectives when Valeo published revenues lower than expected, lowered its revenue target for 2024 and withdrew its outlook for 2025, citing a “high uncertainty” around its customers’ production volumes.

This latest disappointment then reignited concern on the stock market about automobile equipment manufacturers. Opmobility came to somewhat ease investors’ fears this Monday, by delivering a quality copy, accompanied by confirmation of annual objectives.

The title of the former Plastic Omnium increased by 6.8% around 11:30 a.m., marking the largest increase in the SBF 120. Burelle, the holding company which owns Opmobility, gained 4.1%.

Over the period from July to the end of September, the group specializing in lighting, front modules, bumpers and even propulsion systems published a turnover of 2.457 billion euros, up 3% in published data. This level of income turns out to be “in line” with the consensus cited by Oddo BHF, which expected 2.433 billion euros.

An impressive performance

Its economic turnover, which includes the contribution of joint ventures, stood at 2.75 billion euros, up 4.7% on a like-for-like basis.

The company notably recorded sustained momentum in its “modules” division (module design, development and assembly activities), with annual growth of 23.7% over the quarter, thanks to the ramp-up of its manufacturing plant. ‘Austin in Texas for a major American player in electric mobility (i.e. Tesla, according to Oddo BHD) as well as by increasing volumes for European manufacturers in factories in Bratislava, Slovakia, and Kvasiny, Czech Republic.

With this increase in revenue, Opmobility outperforms the evolution of global automobile production in the third quarter, which fell by 4.8%. The automotive supplier explains that this decline “comes in particular from the continued slowdown in electrification, a high level of vehicle stocks mainly in North America and Europe, leading to the postponement of a certain number of vehicle launches. programs”.

In this context, the outperformance of the French equipment manufacturer, a closely followed indicator in the equipment manufacturer sector, stood at 9.5 percentage points. “It is significantly higher than that published by peers so far, which reflects the very good commercial dynamics of the equipment manufacturer, particularly in Europe and North America and in the Modules activity, in a difficult production environment (in drop of 5.5% in the third quarter)”, explains Oddo BHF.

“By region, Europe and North America both displayed marked and identical outperformance (+11.1 points) which allowed them to grow (+4% and +5%) despite the drop in automobile production ( respectively -6.9% and -5.9% in the third quarter). Finally, outperformance also remains marked in Asia (+8.3 pts) with in-line growth in China (a much better performance than peers) and clear growth elsewhere (outperformance of +18.5 points in Asia excluding China, i.e. mainly South Korea),” explain the analysts.

The group’s performance in Europe and North America “impresses” even TP ICAP Midcap, which appreciates a publication that “stands out” in a stricken sector.

Annual objectives confirmed

This solid publication allows Opmobility to renew its annual objectives. The group is still targeting an improvement in all of its financial indicators (operating margin, net profit, cash flow and net debt) in 2024 compared to 2023.

“The strong outperformance observed in the third quarter (clear progress after an already solid first half at +3.5 points) should allow OPmobility to achieve its 2024 financial objectives without too much difficulty, with room for maneuver “higher” than most peers”, estimates Oddo BHF.

“More generally, it seems to us that this publication and this exercise should perfectly reflect the strengths of Opmobility in a difficult context, whether on a commercial level (via the strong outperformance of the group) but also (on an Editor’s note level) costs and (of) financial discipline”, argue Oddo BHF analysts. The latter renew their opinion to “outperformance” on Opmobility, considering “the course still well maintained by management in an environment which remains generally adverse”.