MADRID, SPAIN — 2017 continues to be good year for Gestamp which this week reported revenue for the first nine months of the year totaling just over €6 billion.
In a statement released Tuesday, Gestamp, the multinational company specialized in the design, development and manufacture of highly engineered metal components for the automotive industry presented its results for the first nine months of 2017. It states the company has continued to build on its long-standing growth trajectory, outperforming the market by 6 times.
The press release states that during the first nine months of 2017 Gestamp has recorded revenues of €6,005m, 12.1% more than in the same period last year, and an EBITDA of €627m, representing a 7.3% increase. At constant FX rates, the press releases states that revenue growth would have been 13.6% while EBITDA would have increased by 9.2%. Net profit reached €153m, up by 18.3%.
(€ is the symbol for the Euro, the currency of the European Union of which Spain is a member. The revenues recorded by Gestamp in the first nine months of 2017 are the equivalent of $7,062,120,200.)
The press release states that third quarter results for 2017 have been impacted, as anticipated, by non-recurring higher launch costs in NAFTA (already announced in September), as well as increased FX headwinds. Despite these challenges, it states that Gestamp has reported an EBITDA for the third quarter of 2017 of €175m, which is in line with Q3 2016.
(EBITDA stands for “earnings before interest, tax, depreciation and amortization” and is a measure of a company’s operating performance, evaluating it without having to factor in financing decisions, accounting decisions or tax environments. FX stands for foreign exchange rate and is the rate which one currency is exchanged for another. NAFTA stands for the North American Free Trade Agreement which covers the United States of America, Canada and Mexico and has been in force 1994.)
The press release states that in NAFTA, the performance is evolving in accordance with the action plan implemented with significant “one-off” costs impacting Q3 2017. It states that Gestamp expects NAFTA to experience a recovery of its profitability levels in 2018 with a continued upward trend in the future.
The announcement states that the company’s full year targets for 2017 remain unchanged as per the revised guidance provided in September andthat Gestamp reiterates its mid-term guidance and continued focus on long-term value creation.
Outperforming The Market Across Regions
The press release states that Gestamp’s revenues have outperformed the market in all of its regions. It states that growth has been driven by sound macro and auto sector dynamics, as well as good volumes of existing programs and ramp-up of new projects, especially in Eastern Europe and Mercosur.
• Western Europe grew by 11.3% to €3,060m
• Eastern Europe increased sales by 31.6% to €699m
• Mercosur by 39.9% to €392m
• North America by 0.2% to €1,077m
• Asia by 7.7% to €778m
(Mercosur is a sub-regional customs union and trading bloc of mostly South American countries dedicated to the promotion of free trade and the fluid movement of goods, people, and currency. Its full members are Argentina, Brazil, Paraguay, and Uruguay. Venezuela was also a full member but was suspended in December 2016. Associate countries are Bolivia, Chile, Peru, Colombia, Ecuador and Suriname. Observer countries are Mexico, New Zealand and Japan.)
“Third quarter results for 2017 have been in line with our expectations, mainly impacted by the project launch issues faced in NAFTA, which we anticipated in September, but operational improvements are already being achieved as we are making steady progress with the action plan implemented,” the President and CEO of Gestamp, Francisco J. Riberas, highlighted.
“Other than the “one off” issues highlighted in NAFTA, our on-going project executions and launches are progressing according to plan, underpinning growth in particular in Mercosur and Eastern Europe,” he added.
“Regarding the first nine months of the year, we have seen sound macro and auto sector trends which provide a solid foundation and continue to support our vision, long-term strategy and objectives,” Riberas concluded.
Gestamp’s growth in the first nine months of 2017 includes the expansion of the Gestamp facility in Union County. In March, the company announced that the $129 million capital investment it will make in its Union County facility will result in the creation of 130 new jobs. Hiring for the new positions is expected to get under in the last quarter of 2018.
The expansion of Gestamp’s Union County manufacturing facility on LSP Road off US 176 involves the addition of more than 300,000 square feet of additional space. This includes the construction of 123,000 square feet at the Gestamp facility itself and leasing 182,000 square feet in another building.
Gestamp is a Spanish multinational specialized in the design, development and manufacture of highly engineered metal components for top vehicle manufacturers. It develops products with an innovative design to produce lighter and safer vehicles, which offer improved energy consumption and a reduced environmental impact. Its products cover the areas of body-in-white, chassis and mechanisms.
The company is present in 21 countries with 101 manufacturing plants and 8 under construction, 12 R&D centers, and a workforce of over 36,000 employees worldwide. In 2016, its turnover was €7,549m. Gestamp is listed on the Spanish stock market under the GEST ticker.