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Research
Weak organic Q1 results amid market uncertainty. Still a BUY.
Q1 FY25 organically down; reported growth supported solely by M&A. Stabilus reported weak organic (org.) results for Q1 FY25, with revenue and adjusted (adj.) EBIT down 5.8% yoy and 11.1% yoy, respectively, burdened by challenging market conditions, especially in the automotive sector. However, the reported yoy numbers benefitted solely from the inclusion of Destaco, which contributed c. EUR 45m to the overall reported sales of EUR 326m (+6.7% yoy) and EUR 8.5m (margin of 18.9%) to the overall adj. EBIT of EUR 37.8m (+13.5% yoy; margin of 11.6%). FY25 guidance was left largely intact for now, with revenue of EUR 1.3bn-1.45bn (+5% yoy at the mid-point) and an adj. EBIT margin of 11%-13% (12.0% in FY 24); the overall full year results are expected to be back-end loaded.
Revenues weak organically in all geographies. Destaco boosts the reported print. The Americas, EMEA, and APAC recorded org. revenue declines of 4.7%, 4.6%, and 8.6% yoy, respectively, the positive org. yoy growth in DIAMEC (mainly spare parts) and flat yoy revenues at energy & construction were more than offset by a general decline in all other market segments. By segment, automotive powerise reported an org. decline of 12.2% yoy in Q1, while automotive gas spring fell 4.2% yoy org. and industrial components witnessed a modest growth of 0.7% yoy.
Destaco and cost efficiency measures support adj. EBIT. Consolidation of the higher-margin Destaco business, along with other cost efficiency measures, offset inflationary pressures and enabled a yoy margin expansion of 3.2ppt and 0.5ppt in the Americas and EMEA, respectively. However, APAC margins narrowed by 1.0ppt yoy, due to a weak automotive business and higher cost base. Overall adj. EBIT grew 13.5% yoy to EUR 37.8m, with the margin expanding to 11.6% (Q1 24: 10.9%).
Leverage stable, but prudent measures needed to achieve targets. Leveraging (net debt/EBITDA) was stable qoq but high at 2.8x as of end-Q1 FY25, due to the recent M&As. Management has strict targets to bring it down to below 2.0x within the next 2-3 years and then to 1.0x over the medium term. Higher product development capex and unfavourable market conditions may exacerbate the situation, requiring more prudent steps to be taken to adhere to the strict targets set.
Conclusion. The global macroeconomic weakness and sluggish automotive, construction and powerise markets have negatively impacted Stabilus' business performance in the recent quarters. However, Stabilus’ M&A strategy has paid off and helped enhance the reported revenue and adj. EBIT numbers. Even then, the company has to wait for more macro stability to get back to its sustainable org. growth path. For now, we broadly maintain our estimates and reiterate our BUY recommendation on the stock at an unchanged target price of EUR 42.00.
Previous Updates
Key Figures
| Key P&L Data (EURm) | 2022 | 2023 | 2024 | 2025E | 2026E | 2027E |
|---|---|---|---|---|---|---|
| Sales | 1,116.3 | 1,215.3 | 1,305.9 | 1,351.6 | 1,439.5 | 1,493.5 |
| Sales growth | 19.1% | 8.9% | 7.5% | 3.5% | 6.5% | 3.8% |
| EBITDA | 211.2 | 208.3 | 215.2 | 261.3 | 269.6 | 279.5 |
| EBITDA margin | 18.9% | 17.1% | 16.5% | 19.3% | 18.7% | 18.7% |
| EBIT | 142.2 | 137.1 | 113.3 | 138.5 | 149.7 | 163.5 |
| EBIT margin | 12.7% | 11.3% | 8.7% | 10.3% | 10.4% | 10.9% |
| Key B/S Data (EURm) | 2022 | 2023 | 2024 | 2025E | 2026E | 2027E |
| ROCE | 13.3% | 11.9% | 6.7% | 7.8% | 8.2% | 8.6% |
| Net financial debt | 122.1 | 98.3 | 711.5 | 650.2 | 548.2 | 463.0 |
| Net debt/EBITDA | 0.6x | 0.5x | 3.3x | 2.5x | 2.0x | 1.7x |
| EPS reported | 4.17 | 4.12 | 2.84 | 3.62 | 3.94 | 4.33 |
| DPS | 1.75 | 1.75 | 1.15 | 1.25 | 1.35 | 1.45 |
| 2022 | 2023 | 2024 | 2025E | 2026E | 2027E | |
| EV/Sales | 0.8x | 0.7x | 1.1x | 1.1x | 0.9x | 0.8x |
| EV/EBITDA | 4.3x | 4.2x | 6.9x | 5.5x | 4.9x | 4.4x |
| EV/EBIT | 6.3x | 6.4x | 13.1x | 10.3x | 8.9x | 7.6x |
| P/E | 7.5x | 7.6x | 11.1x | 8.7x | 8.0x | 7.3x |
| P/B | 1.2x | 1.1x | 1.2x | 1.1x | 1.0x | 0.9x |
| FCF yield | 15.5% | 21.5% | 21.6% | 9.6% | 17.1% | 15.3% |
| Dividend yield | 5.6% | 5.6% | 3.7% | 4.0% | 4.3% | 4.6% |
Source: Company data; mwb research
Key Figures 2025E
Sales in EURm
Investment Case
A pioneer with decades of experience
As a pioneer in the production of gas springs, Stabilus has set the standards since 1962 and that is still the leading market position of the company. With more than eight decades of demonstrated expertise and experiences, the company is always driven by innovative approaches and solutions which answer today’s and tomorrow's demands.
Deep know-how of motion control
Stabilus offers reliable and innovative motion control solutions that enable, enhance and automate opening, closing, lifting, lowering and adjusting actions. The company's customized damping and vibration isolation technology protects against shocks, vibrations and noise.
Diversified in every direction
Stabilus is serving almost every industry, which diversifies its revenues streams. The company is one of the world's leading providers of motion control solutions for customers across a broad spectrum of industries including mobility, health, recreation, furniture, energy, construction, industrial machinery, and automation.
In addition, Stabilus is globally active by both production and sales. Stabilus has a global production network encompassing plants in eleven countries. Additionally, the group maintains regional offices and relations to sales partners in over fifty countries in Europe, North and South America, as well as in Asia-Pacific. By covering nearly the entire world, the company is successfully reducing risk factors.
Transparency and ESG
Stabilus is reporting by Operating Segments (regionally) and Business Units (customers). This makes it easier to understand the business model and structure of the company. Lately, the legal structure of the company was adjusted. Stabilus legal form was changed from a Société Anonyme (S. A.) under Luxembourg law to a European Company (Societas Europaea) and a subsequent transfer of the company’s registered office from Luxembourg to Germany. The primary objective is to simplify the overall group’s structure and thus reduce complexity, which will lead to efficiency gains and support further growth. In the end, this should increase the quality of the company, from which investors will also benefit.
Investment case in Charts
Segment Sales in %
Sales and earnings momentum
SWOT-Analysis
ROCE
- Global sales force and distribution network – close to customers
- Despite cyclical industries and high fixed costs, Stabilus delivered solid results during Covid-pandemic
- Increasing global presence and shift of applications away from automotive into other industries (e.g. solar, medicine, furniture, etc.) further diversify revenues
- High barriers to entry: validation and capex requirements
Valuation
At mwb research, we apply different valuation techniques. The DCF model results in a fair value of EUR 42.14 per Stabilus SE share. This is based on the following assumptions: for the top line, we expect a CAGR 2025E-2032E in the range of 3.3% p.a. The long-term growth rate is set at 2.0%. Cost of equity is calculated as 12.1%. This results in a long-term WACC of 7.9%. For further detail and a sensitivity analysis, see the DCF model below. We also perform a free cash flow analysis. The adjusted Free Cash Flow Yield results in a fair value between EUR per share based on 2025E and 61.33 EUR per share on 2029E estimates. Again, more details can be found below.
| 2022 | 2023 | 2024 | 2025E | 2026E | 2027E | |
| EV/Sales | 0.8x | 0.7x | 1.1x | 1.1x | 0.9x | 0.8x |
| EV/EBITDA | 4.3x | 4.2x | 6.9x | 5.5x | 4.9x | 4.4x |
| EV/EBIT | 6.3x | 6.4x | 13.1x | 10.3x | 8.9x | 7.6x |
| P/E | 7.5x | 7.6x | 11.1x | 8.7x | 8.0x | 7.3x |
| P/B | 1.2x | 1.1x | 1.2x | 1.1x | 1.0x | 0.9x |
| FCF yield | 15.5% | 21.5% | 21.6% | 9.6% | 17.1% | 15.3% |
| Dividend yield | 5.6% | 5.6% | 3.7% | 4.0% | 4.3% | 4.6% |
Source: Company data; mwb research
DCF 2025E
Multiples 2025E
Financials
| Profit and loss (EUR m) | 2022 | 2023 | 2024 | 2025E | 2026E | 2027E |
|---|---|---|---|---|---|---|
| Sales | 1,116.3 | 1,215.3 | 1,305.9 | 1,351.6 | 1,439.5 | 1,493.5 |
| Cost of sales | 819.5 | 894.1 | 963.6 | 996.8 | 1,058.0 | 1,094.0 |
| Gross profit | 296.8 | 321.2 | 342.3 | 354.8 | 381.5 | 399.5 |
| SG&A expenses | 126.6 | 152.8 | 203.9 | 174.4 | 184.3 | 186.7 |
| Research and development | 31.8 | 31.1 | 34.4 | 51.4 | 57.6 | 59.7 |
| Other operating expenses (income) | -3.8 | 0.2 | -9.3 | -9.5 | -10.1 | -10.5 |
| EBITDA | 211.2 | 208.3 | 215.2 | 261.3 | 269.6 | 279.5 |
| Depreciation | 38.7 | 39.1 | 47.3 | 51.1 | 53.9 | 54.5 |
| EBITA | 172.5 | 169.2 | 168.0 | 210.2 | 215.7 | 225.0 |
| Amortisation of intangible assets | 30.3 | 32.1 | 54.6 | 71.7 | 66.0 | 61.5 |
| EBIT | 142.2 | 137.1 | 113.3 | 138.5 | 149.7 | 163.5 |
| Financial result | 1.0 | -17.8 | -13.0 | -11.0 | -11.0 | -11.0 |
| Recurring pretax income from cont. operations | 143.2 | 119.3 | 100.4 | 127.5 | 138.7 | 152.5 |
| Extraordinary income/loss | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Earnings before taxes | 143.2 | 119.3 | 100.4 | 127.5 | 138.7 | 152.5 |
| Taxes | 38.9 | 16.0 | 28.3 | 35.7 | 38.8 | 42.7 |
| Net income from continuing operations | 104.3 | 103.3 | 72.0 | 91.8 | 99.9 | 109.8 |
| Result from discontinued operations (net of tax) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net income | 104.3 | 103.3 | 72.0 | 91.8 | 99.9 | 109.8 |
| Minority interest | -1.4 | -1.5 | -1.9 | -2.4 | -2.6 | -2.8 |
| Net profit (reported) | 102.9 | 101.7 | 70.2 | 89.5 | 97.3 | 107.0 |
| Number of Shares | 24.70 | 24.70 | 24.70 | 24.70 | 24.70 | 24.70 |
| EPS reported | 4.17 | 4.12 | 2.84 | 3.62 | 3.94 | 4.33 |
Source: Company data; mwb research
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