(BFM Stock Exchange) – The equipment supplier exceeded expectations on its operating profit while its cash flow increased by 5% in the first half.

The automobile is clearly one of the sectors most weakened by American customs duties.

Monday, Stellantis issued a major warning on results, announcing a net loss of 2.3 billion euros in the first half and 2.3 billion euros in cash burned over the same period. The Franco-Italian-American group then mentioned a net impact of 300 million euros linked to customs duties on the first half. On Tuesday, General Motors indicated that the customs surcharge had entrenched $ 1.1 billion to its operating profit adjusted in the second quarter.

Manufacturers import many parts and vehicles from abroad to the United States, including Canada and Mexico. In the extreme case of Ferrari, all of the vehicles sold are even imported, the group with only one and famous factory, in Maranello, Italy.

This situation only adds uncertainty for automotive equipment manufacturers, a compartment that has already suffered a lot, in recent years, from the inflation of the costs of labor and raw materials, “stop and go” in the production calendars of their customers (the manufacturers therefore), unknown in regulation, or even the competition of their Chinese rivals.

However, in this almost perfect storm, the ex-Plastic Omnium Opthubility (its new name since 2024) is highlighted.

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Operating result and cash clearly above expectations

Its action jumped more than 8% this Thursday, July 24 at the end of the session, after the publication of semi -annual results welcomed by investors.

Over the first six months of the year, the group has generated an “economic” turnover (which includes participation in joint ventures) of 5.96 billion euros up 1.6 in comparable data. The consolidated turnover established it at 5.3 billion euros, down 0.6% in comparable data.

“Thanks to its location as close as possible to customer sites, the impact of customs duties on production volumes remains, at this stage, relatively limited for the group,” says Option.

The operating margin reached 260 million euros, or 11.1% of turnover, ratio up 0.6 points over one year.

Analysts of Bernstein note that despite the lower income of 2% in consensus, the operating margin exceeded the expectations of 6%, carried by the recovery of the profitability of the “PowerTrain” divisions (the propulsion systems) and “modules” (the front blocks of vehicles). The operating margin rate of the first division increased from 4.5% to 5.8% and that of the second from 2.2% to 2.7%.

“It is a commendable result in an eventful period for the sector,” appreciates Bersntein.

Net profit limited its withdrawal to 10% to 90 million euros. The free cash flow increased 5% to 165 million euros, exceeding expectations by 14%, according to Oddo BHF. This reduced the company’s net debt to 1.46 billion euros to the end of June against 1.58 billion euros six months earlier.

“A quality profile”

At the end of these good results, the company confirmed its objectives for 2025 which include an increase in its operating margin, its net profit, and its cash flow as well as a drop in its net debt. Oddo BHF believes that confirmation of these targets should push consensus upwards, because the design offices anticipated an average of a stable operating margin and a decreased cash flow.

“This publication once again confirms our opinion according to which Optility still stands out from the majority of European automotive equipment manufacturers thanks to its’ superior ‘quality’ profile”, judges Oddo BHF.

“This quality manifests itself at all levels: in its ability to outperform in a difficult market (European Union, United States, Asia), in its operational management (additional costs for reducing costs already implemented to protect profitability, like general and administrative costs down 0.3 percentage points in the first half) and in its generation of treasury flows available always robust (slowdown in investments Cash), which has always been a priority given the independent and family profile of the group “, develops the broker.

Oddo BHF estimates that the share of the company should grow by 20% per year between 2025 and 2027 and its cash flow of 11% per year. Despite the impressive outperformance of the title in its sector (33% since the start of the year against a decline of 1% for the European sectoral index “Stoxx Europe 600 Automobile and Parts”), the broker estimates that these prospects are not reflected in the enhancement of the action, close to its lower historical. Oddo BHF thus confirms his advice to “outperformance” on action.