Elmos Semiconductor (ELG) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales reached €126.9 million, down 7.3% year-over-year, reflecting subdued demand and customer inventory adjustments, but adjusted free cash flow improved significantly to €21.5 million.

• EBIT was €25.6 million, a 24.1% decrease from Q1 2024, with EBIT margin at 20.2%.

• The company is implementing cost optimization programs targeting personnel and material costs to address lower volumes and increased R&D expenses.

• The automotive semiconductor market remains structurally attractive, driven by increased electronics and software in vehicles.

• No major order postponements; gradual upward trends in the order book are visible for upcoming quarters.

Financial highlights

• Q1 2025 gross margin was 43.4%, down from 45.8% a year ago, impacted by fixed costs and lower volumes.

• Net income after non-controlling interests was €18.5 million, a 24.5% decrease year-over-year; basic EPS was €1.08, down from €1.44.

• Capital expenditures dropped 33.6% to €13.5 million (10.6% of sales), including a €6 million office building acquisition.

• Adjusted free cash flow reached €21.5 million, a significant improvement from -€48.9 million in Q1 2024.

• Operating cash flow turned positive at €39.5 million versus negative €23.1 million in Q1 2024.

Outlook and guidance

• Full-year 2025 guidance confirmed: sales expected at €580 million ± €30 million, EBIT margin at 23% ± 3pp, and positive adjusted free cash flow at 7% ± 2pp of sales.

• Q1 is anticipated to be the weakest quarter; strong sequential growth expected in Q2 and a better second half.

• Capital expenditures for 2025 projected at 7% ± 2pp of sales, including the new building.

• Inventory adjustments are expected to end gradually, with order volumes anticipated to increase, though visibility remains limited.

• Guidance based on EUR/USD exchange rate of 1.05.