Stabilus (STM) Q3 2025 earnings summary

Executive summary

• Profits and margins are stabilizing despite a soft market, with an 11.1% EBIT margin for the first nine months, though profit for the period fell 34.7% year-over-year due to higher costs and lower organic growth.

• Q3 revenue declined 9.9% year-over-year to €316 million, mainly due to global tariff conflicts, unfavorable product mix, and FX headwinds.

• Cost-cutting measures have been intensified across purchasing, overhead, and plant operations to maintain profitability.

• Destaco Group integration completed, contributing to revenue and adjusted EBIT, with full purchase price allocation finalized.

• Successful refinancing secured a €150 million term loan maturing in June 2029, increasing covenant headroom to 4.0 until September 2026.

Financial highlights

• Q3 revenues declined by 9.9% to €316 million, with about half the drop due to FX effects; adjusted EBIT margin at 10.5%.

• 9M FY2025 revenue reached €980 million, up 1.1% year-over-year, with adjusted EBIT at €108.6 million and margin at 11.1%.

• Free cash flow for Q3 was €33.3 million; nine-month free cash flow stands at €60.3 million, down 22.5% year-over-year.

• Net leverage ratio increased to 3.03x, mainly due to Destaco acquisition financing.

• CapEx for 9M FY2025 was €66.2 million, up 10.1% year-over-year.

Outlook and guidance

• FY2025 guidance narrowed to the lower end: approx. €1.3 billion revenue, 11% adjusted EBIT margin, and €105 million adjusted free cash flow.

• No recovery anticipated in the remaining months of FY2025 due to ongoing trade conflicts and protectionist measures.

• Q4 is expected to be sequentially flat in revenues and adjusted EBIT.

• Margin is expected to bottom this year, with a 1% improvement anticipated next year.

• Industrial business is expected to recover next year, while automotive remains soft.