EQS-News: JOST reports on highly successful fiscal year 2023 with adjusted EBIT growing by 14% to EUR 141 million and adjusted EBIT margin reaching a new record high of 11.3%

JOST reports on highly successful fiscal year 2023 with adjusted EBIT growing by 14% to EUR 141 million and adjusted EBIT margin reaching a new record high of 11.3%

• Sales stable year-over-year: Sales reach EUR 1,249.7 million (2022: EUR 1,264.6 million)
• Adjusted EBIT grows faster than expected: Adjusted EBIT up 13.7% to EUR 140.8 million (2022: EUR 123.8 million)
• Profitability improves significantly: Adjusted EBIT margin rises by 1.5 percentage points to 11.3% (2022: 9.8%)
• Record free cash flow achieved: Free cash flow up significantly to EUR +112.3 million (2022: EUR +23.7 million)
• The targets set for fiscal year 2023 were reached or surpassed: Reported sales down 1.2% year-over-year; sales adjusted for acquisition and currency effects up 0.1% year-over-year (guidance: sales stable year-over-year). Adjusted EBIT increased by a double-digit 14% year-over-year (guidance: high single-digit percentage growth). Adjusted EBIT margin improved significantly by 1.5 percentage points (guidance: significant improvement).

Neu-Isenburg, February 20, 2024. JOST Werke SE (“JOST”), a leading global producer and supplier of safety-critical systems for the commercial vehicle industry, today published its preliminary and unaudited results for fiscal year 2023.

Joachim Dürr, Chief Executive Officer (CEO) of JOST Werke SE, said: “2023 was a very successful year for JOST. In a highly dynamic market environment, we were able to strengthen our company’s strategic position by expanding our regional presence and our product portfolio in the agricultural business with two strategic acquisitions and a greenfield investment. In the transport sector, we launched new products into the market and reliably served our customers with our high-quality solutions. Our diverse and well-balanced product portfolio of trucks, trailers and tractors components enabled us to perform successfully in a challenging market, generating the highest adjusted EBIT in the group’s history so far. This result demonstrates JOST’s high flexibility and adaptability – two key strengths for achieving continued profitable growth going forward.”
 

Significant improvement in profitability

Consolidated sales decreased slightly by 1.2% year-over-year to EUR 1,249.7 million in fiscal year 2023 (2022: EUR 1,264.6 million). This development was influenced by strong negative currency effects amounting to EUR -41.7 million. On the other hand, the consolidation of the newly acquired companies Crenlo do Brasil and LH Lift effective as of September 1, 2023, contributed EUR 26.0 million in sales. Adjusted for acquisition and currency translation effects, sales in fiscal year 2023 were stable on prior’s years level, up by 0.1% compared to 2022.

In 2023, JOST was able to benefit from the robust demand in the transport sector, offsetting weaker demand for agricultural components. Reported sales in the transport sector increased by 6.0% to EUR 993.4 million in 2023 (2022: EUR 936.9 million). Adjusted for currency effects, transport sales grew organically by 9.0% year-over-year. In contrast, sales of agricultural components went down by 21.8% nominally to EUR 256.3 million (2022: EUR 327.7 million). This figure includes sales from the acquired companies Crenlo do Brasil and LH Lift as well as negative currency translation effects. Adjusted for acquisition and currency effects, organic sales in the agriculture sector declined by 25.4% year-over-year.

JOST succeeded in significantly increasing its profitability in this mixed market environment. The group was able to considerably lift its adjusted EBIT by a double-digit percentage of 13.7% to EUR 140.8 million in fiscal year 2023, thus exceeding the guidance of high single-digit percentage growth compared to the previous year (2022: EUR 123.8 million). The adjusted EBIT margin increased significantly by 1.5 percentage points to 11.3% (2022: 9.8%). This is a stronger improvement in profitability than forecast at the beginning of 2023 and is testament to JOST's ability to adapt quickly and effectively to changing market conditions.
 

Europe

Demand for trucks in Europe increased considerably year-over-year. This positive trend was further boosted by shifts in demand from the previous year due to supply bottlenecks experienced in 2022. In contrast, demand for components for trailers and agricultural tractors decreased. These diverging market trends, together with the sales of the acquired companies consolidated in Europe, partially offset each other. As a result, reported sales in Europe in 2023 fell slightly by 1.1% to EUR 687.8 million compared to the previous year (2022: 695.5 EUR million). Adjusted for acquisition and currency translation effects, sales in Europe declined by 2.6 % year-over-year. By quickly implementing cost-cutting measures, JOST was able to compensate for the negative impact on earnings of the declining demand for trailers and agricultural front loaders. JOST succeeded in improving adjusted EBIT in Europe by 10.5% year-over-year to EUR 46.2 million in 2023 (2022: EUR 41.8 million). The adjusted EBIT margin rose by 0.7 percentage points to 6.7% (2022: 6.0%).
 

North America

In North America, sales in fiscal year 2023 declined by 10.6% to EUR 354.2 million year-over-year, driven by a sharp contraction in the agricultural compact tractor segment (2022: EUR 396.3 million). Robust demand in the transport sector could not compensate for the decline in sales in agriculture. JOST was able to quickly adjust costs to the low level of activity seen in the agricultural sector while at the same time significantly boosting profitability in the transport sector year-over-year. This lifted adjusted EBIT by 25.4% to EUR 44.8 million (2022: EUR 35.7 million), with the adjusted EBIT margin improving by 3.6 percentage points to 12.6% (2022: 9.0%).
 

Asia-Pacific-Africa (APA)

In fiscal year 2023, JOST continued to benefit from highly dynamic growth in India, Australia, South Africa and Southeast Asia. This positive trend was further bolstered by the slow recovery of the Chinese transport market. This enabled JOST to significantly increase sales in the Asia-Pacific-Africa (APA) region by 20.2% to EUR 207.6 million in 2023 (2022: EUR 172.8 million). Adjusted EBIT also rose sharply by 15.5% to EUR 43.2 million year-over-year (2022: EUR 37.4 million). The adjusted EBIT margin amounted to 20.8% (2022: 21.7%). The slight reduction is attributable to a change in the regional product mix since the proportion of off-road applications is lower in China. On the backdrop of the recovering transport market in China, the relative share of high-margin off-road applications in APA declined compared to the previous year.
 

Differed earn-out payment for the takeover of the Ålö Group finalized

In connection with the takeover of Ålö Holding AB in fiscal year 2020, a contingent earn-out payment of up to EUR 25 million was agreed, the amount of which depended on the adjusted gross profit achieved by Ålö Holding AB. In December 2023, the final earn-out amount for the acquisition of the Ålö Group was set at EUR 20.2 million by way of arbitration. JOST had recognized EUR 10.2 million as contingent consideration based on the assessment made for the purchase price allocation as of December 31, 2020. Thus, the amount of the final earn-out payment not covered by provisions totals EUR 10.0 million and will be reflected in the 2023 earnings as an adjustment item, plus interest and consulting fees. The differed payment of the earn-out was made in January 2024.
 

Free cash flow at record level

In fiscal year 2023, JOST generated the largest free cash flow (cash flow from operating activities less payment made for the acquisition of property, plant and equipment and intangible assets) in its history, more than quadrupling it to EUR +112.3 million compared to 2022 (2022: EUR +23.7 million). This increase is due to the group’s positive operating performance and the improvements achieved in working capital. As a result, free cash flow per share rose sharply to EUR +7.54 (2022: EUR +1.59).

Overall, capital expenditure (excluding takeovers) fell slightly to EUR 30.8 million in fiscal year 2023 (2022: EUR 32.3 million), amounting to 2.5% of sales as forecast (2022: 2.6%).

Working capital decreased by 1.2% to EUR 240.0 million in 2023 compared to the previous year (2022: EUR 243.0 million), despite the newly acquired companies Crenlo do Brasil and LH Lift contributing additional working capital of EUR 21.0 million as part of initial consolidation. The ratio of working capital to sales also improved year-over-year to 18.3%, thus achieving the forecast target level of below 19% (2022: 19.2%). The last-twelve-months sales of Crenlo do Brasil and LH Lift were included in this calculation.

Net debt as of December 31, 2023, decreased by EUR 16.7 million to EUR 180.7 million (December 31, 2022: EUR 197.4 million), even though JOST fully financed the net purchase price for the acquisition of Crenlo do Brasil and LH Lift (purchase price less acquired cash) amounting to EUR 52.8 million by using existing credit lines and its own liquid assets. This development reflects JOST's strong cash flow generation in 2023. The reduction in net debt combined with the sharp increase in adjusted EBITDA led to a considerable improvement in the leverage ratio (ratio of net debt to adjusted EBITDA for the last twelve months) to 0.998x (December 31, 2022: 1.278x). JOST has thus achieved its goal of further reducing its leverage ratio compared to 2022 while at the same time coming in at a level of below 1.0x EBITDA.

Oliver Gantzert, Chief Financial Officer of JOST Werke SE, said: “JOST generated a record operating result in 2023 with adjusted EBIT of EUR 140.8 million and an adjusted EBIT margin of 11.3%. Particularly, I would like to highlight the strong cash flow generation. We were able to boost our free cash flow to EUR +112.3 million in 2023, which represents a free cash flow per share of EUR +7.54. This enabled us to further improve our net debt and leverage ratio. Thus, we are in an excellent financial position to seize new strategic growth opportunities going forward.”

The final, audited results for fiscal year 2023, the dividend proposal, and the outlook for fiscal year 2024 will be published on March 26, 2024, together with the Annual Group Report 2023 and the Sustainability Report 2023. In this context, JOST will hold a virtual conference on March 26, 2024, at 11:00 am CET.

Contact:

JOST Werke SE
Romy Acosta
Head of Investor Relations
T: +49 6102 295-379
romy.acosta@jost-world.com

About JOST:

JOST is a leading global manufacturer and supplier of safety-relevant systems for the commercial vehicle industry with its core brands JOST, ROCKINGER, TRIDEC and Quicke. JOST’s global leadership position is driven by the strength of its brands, its long-standing client relationships serviced through its global distribution network, and its efficient and asset-light business model. With sales and production facilities in over 25 countries across six continents, JOST serves manufacturers, dealers and end customers in the transportation, agriculture and construction industries worldwide. JOST currently employs more than 4,500 staff across the world and is listed on the Frankfurt Stock Exchange. For more information about JOST, please visit www.jost-world.com