MADRID, SPAIN — 2017 was a good year for Gestamp which saw its revenues increase over 2016 and the good news continued into 2018 with its global workforce growing to more than 41,000 and the construction and/or announcement of the construction of seven new production facilities around the world.
In a statement released Wednesday, Gestamp, the multinational company specialized in the design, development and manufacture of highly engineered metal components for the automotive industry, announced that it has recorded revenues of €8,202m in 2017, according to its full year results.
The press release states that company revenues have increased by 8.6% over the previous year, more than six times the growth of production volumes in Gestamp’s footprint in the same period. At constant currency, this increase would have been 11.0%.
During 2017, the press release states that Gestamp recorded an EBITDA of €890m, up by 5.8% versus last year despite the impact of the one-off costs in NAFTA. EBITDA growth at constant FX would have been 8.8%, ahead of revised guidance announced in September. EBIT reached €485m, representing a 4.8% and the Company also increased its net income by 8.3% to €240m.
(€ is the symbol for the Euro, the currency of the European Union of which Spain is a member. The revenues recorded by Gestamp for 2017 are the equivalent of $10,004,881,620.)
The press release states that fourth quarter results for 2017 have been good despite increased FX headwinds as Revenue and EBITDA grew by 4.5% and 8.1% at constant FX, respectively.
It states that results have been driven by good performance across almost all regions as well as the recovery of Gestamp’s operations in NAFTA, in line with expectations. Gestamp`s net debt stood at €1,898m at the end of 2017, consistent with guidance given by the Company, of circa 2 times EBITDA.
(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 company’s global workforce has continued to grow to more than 41,000 employees across 21 countries.
Gestamp’s CEO, Francisco López Peña, stated: “The Company benefits from high revenue visibility due to the nature of its business. In fact, our estimated volumes for order book covers more than 90% of the targeted revenues for the period up to 2020”.
Good Performance In All Regions
The press release states that Mercosur and Eastern Europe achieved strong revenues in 2017 growing by 40.8% at constant FX to €562m and by 27.9% reaching €1,043m, respectively. Western Europe increased its revenues by 9.9% to €4,011m and Asia by 8.4% to €1,102m.
During this period, the press release states that NAFTA declined by 1.9% reaching €1,483m which was in line with expectations, impacted by the change-over of large programs, which resulted in lower volumes in certain models in the US and Mexico, as well as FX headwinds and lower tooling revenues.
During the last quarter, the press release states Gestamp has recorded a good performance across its regions, especially in Mercosur, Eastern Europe and Asia.
(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.)
In September last year, Gestamp provided an update on its project launches in this region. The Company has informed today that its operations in NAFTA are performing in line with expectations.
López Peña remarked: “Growth has been driven by sound macro and auto sector dynamics, as well as good volume of existing programs and the ramp-up of new projects, particularly in Eastern Europe and Mercosur. All this growth relies on our long-term strategic relationships with customers.”
“We have made steady progress with the action plan implemented in NAFTA to solve the one-off cost issues. Our on-going project executions and launches are progressing according to plan,” López Peña highlighted.
Seven Plants Under Construction
Among the most recent corporate milestones, was the signing in November by Gestamp of a JV Agreement with BHAP, a Chinese company specialized in auto components, which is a subsidiary of BAIC Group, the fifth automotive manufacturer in China.
The press release states that the new alliance improves Gestamp’s strategic positioning, in order to support not only Daimler, Hyundai and other non-Chinese brands in the Beijing area, but also BAIC’s own vehicle brands in all of China.
Gestamp announced in February its entry into Morocco and its acquisition of a new plant in Brazil, which will supply Toyota and reinforces Gestamp’s stated strategy of growing with Japanese customers.
In line with this strategy, the press release states `Gestamp is already building a greenfield in Japan, which will be the company’s first plant in the country and is expected to start operations in H2. The Group also inaugurated a new R&D center in Tokyo at the end of last year that will enable to co-develop projects jointly with Japanese customers.
Gestamp is also building a plant in Slovakia (Nitra) that will open this year and will manufacture aluminum parts. The company currently has seven plants under construction including Japan, the United States, Mexico, Slovakia, the United Kingdom and Morocco.
Regarding the global strategy, the Executive Chairman, Francisco J. Riberas, explained: “Gestamp grows according to its business plan accompanying our clients where they request. We are a growth company that will benefit from the outsourcing trend among the OEMs as a reliable, global and strategic partner.”
Gestamp’s growth in 2017 includes the expansion of the Gestamp facility in Union County. In March 2017, 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 way in the last quarter of this year (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 more than 100 manufacturing plants and 7 under construction, 13 R&D centers, a workforce of more than 41,000 employees worldwide. Its turnover was €8,202m in 2017. Gestamp is listed on the Spanish stock market under the GEST ticker.