Standard Profil - Persistent cost pressures, Shaky topline leave little room for manoeuvre
- Alex Manolopoulos
Standard Profil could be in for another uncomfortable earnings call this coming Thursday (sign up here). With Q3 numbers due Wednesday (24 November), investors should be wary of continuing chip shortages hitting the top line, as several of Profil’s key European customers experienced drops in vehicle output in Q3 vs Q2. A major focus of attention will be on the cost side, with rising raw material and operational costs likely to weigh on EBITDA and push leverage higher. Given free operating cash flow constraints, liquidity will be another point of emphasis. In Q2, investors were told there were “running discussions” with relationship banks regarding an RCF, a necessary cushion until the anticipated topline recovery and hoped for easing of cost pressures in Q4 21/Q1 22.