Announcing full year results for 2020, metal components supplier Gestamp said it had reduced its net debt by EUR271m to EUR2,058m, adding it was "proving its resilience, ability to react fast and the strength of its business model".
In a statement, the company described 2020 as "a year of two halves" as it implemented COVID emergency related measures in the first half and executed cost control measures in the second "even with a pick-up in volume".
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"The group will continue to focus on FCF and the execution of the transformation plan, with the aim of reaching the 13% EBITDA margin target by 2022," Gestamp added.
Full year group revenue fell 17.8% year on year to EUR7,546m, down 13.6% adjusted for currency exchange effects.
"This represents a 7.8 [percentage point] outperformance versus the global auto production market," Gestamp claimed.
It said the group had outpaced the market in all its markets last year.
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By GlobalDataEBITDA was down to EUR757m from EUR1,027m.
The supplier booked a net loss of EUR71m last year versus a EUR212m profit in 2019.
"The market has experienced two different dynamics: the Chinese with most of the impact taking place in February but with a strong recovery in H2 and the European and US one with strong volume decreases during April as a result of widespread plant closures and then a slower volume recovery during H2."
During H2 2020, the group reached an EBITDA margin of 12.3% versus 12.1% in H2 2019. The implementation of cost reduction measures and debt control, including strict capex reduction and focus on working capital management, led to a EUR271m net debt reduction to EUR2,058m in 2020 versus EUR2,329m.
Despite experiencing a difficult year, Gestamp managed to achieve its full year 2020 guidance targets announced in July 2020 and updated last October. Net debt was well below 2019 levels, EBITDA margin above the top of the range of 9-10% (excluding restructuring costs) and capex was around.
2021 guidance
During 2021, Gestamp expects revenue to outperform the global auto production market by a "mid-single digit".
"The continued focus on executing the transformation plan will allow the Group to reach an EBITDA margin above 12% by the end of 2021. Capex for 2021 is expected to be at [circa] 7% of revenue and net debt to be below EUR2bn.
"All efforts will be in line with the objective of reaching a 13% EBITDA margin target by 2022, which will be driven by improvement of volumes similar to 2019 levels, reduction of fixed cost structure, operational stabilisation and contribution from industry 4.0 initiatives.
Chairman Francisco Riberas said: "In an unprecedented market environment we have moved fast and demonstrated our resilient business model by preserving our balance sheet and generating positive FCF, as we already did in the 2008-2009 crisis.
"Gestamp will continue to grow with the focus on FCF generation by taking advantage of its invested capital and new technologies, supporting the needs of our customers in their road towards electrification," Riberas added.
