In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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HELLA GmbH & Co KGaA (HLLGY) reported stable sales of around 2 billion euros, aligning with internal expectations.
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The electronics segment showed strong growth with an 8.9% increase, driven by the radar business, outperforming the market by 7.5%.
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The company successfully secured strategic projects with Chinese OEMs in the lighting segment, indicating competitiveness in a key growth market.
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Cost reduction measures are showing positive results, with a global headcount reduction of 5.8% year-on-year, supporting profit improvement ambitions.
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HELLA GmbH & Co KGaA (HLLGY) confirmed its full-year outlook, expecting sales between 7.6 and 8 billion euros, with an operating income margin between 5.3% and 6%.
Negative Points
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The lighting segment experienced a 5.7% decline due to the discontinuation of a major project, impacting regions in the Americas and Asia.
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Life cycle solutions saw an 8.7% decrease, with significant declines in the special application business, particularly in agriculture and construction sectors.
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Operating income margin slightly decreased to 5.5% from the previous year, affected by a one-off asset impairment related to electrified cars.
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Net cash flow was negative in the first quarter, similar to the previous year, with a slow increase in working capital.
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Tariffs on parts imported from China to the US pose a significant cost impact, estimated at around $30 million, with ongoing discussions with customers to mitigate this.
Q & A Highlights
Q: Could you elaborate on the strong performance in Europe and America during Q1 and whether this trend will continue into Q2? Also, are there any supply chain disruptions due to tariffs on goods from China to the US? A: The strong performance in Europe and America is primarily driven by good momentum in our electronics segment. We do not foresee significant changes in lighting sales. Currently, there are no disruptions in the supply chain, but we are monitoring potential risks, especially with suppliers in Asia. Regarding tariffs, we are working to mitigate costs and have negotiated some price decreases for semiconductors, although costs remain higher than pre-pandemic levels. Bernard Jeffabato, CEO
Q: What are the key drivers for the expected improvement in Q2 margins? A: The improvement in Q2 margins is expected to come from cost reductions and material cost savings. We are seeing month-by-month improvements in our cost-saving measures and material cost ratios. Additionally, we anticipate more positive effects from commercial settlements in Q2 compared to Q1. Bernard Jeffabato, CEO