Auto parts supplier PWO posts strong figures.

Last Updated: 8. November 2023By

Many German car suppliers have struggled this year, but Progress-Werk Oberkirch AG (PWO) has seen successful business. This prompted the board of the PWO AG, based in the Black Forest of Germany, to raise their forecasts for the 2023 business year for a second time last month.

According to the company, the reasons for PWO’s successful economic development can be attributed to successful measures to increase productivity and competitiveness, as well as product mix shifts. Furthermore, the Black Forest company has benefited from optimized external services.

Today, PWO presented very strong figures for the third quarter and the first nine months of the current year. But first a short look at the business model for understanding.

Progress-Werk Oberkirch in a nutshell: Founded in 1919, PWO AG now employs around 3,000 people and focuses on the development and manufacture of metal components and sub-systems with lightweight construction. The company produces a total of more than 1,200 products that are delivered to numerous car manufacturers and their suppliers.

About 41% of PWO’s revenue is generated in the largest business area „Electronic, Chassis and Airbag Components“, which produces chassis, components for the electrification of vehicles as well as components of the drive train of electric vehicles, among other things.

PWO achieves 36% of its revenue in the „Body Components“ business area (instrument panel carriers, door components as well as reinforcements and brackets for the vehicle body). In the third business area „Steering and Seat Components“ (steering consoles and steering column tubes as well as metal structures of vehicle seats) PWO generates 23% of its revenue.

A look at the most recent figures and new forecasts In the first nine months of the current year, PWO increased its revenue by 5.6% from €395.2 to €417.3 million. The operating result (EBIT) before currency effects rose from €23.0 to €23.9 million. The free cash flow also developed very strongly, increasing from -€6.4 to +€8.9 million.

Now let’s look at the new forecasts for 2023, which were already raised in October. The PWO management now expects an EBIT before currency effects of between €26 and €29 million. Previously, the estimate had been €23 to €26 million.

There are also significant forecast increases in the liquidity area. Previously, the company had assumed a negative free cash flow (free cash flow) in the mid-single-digit million euro range for 2023. The raised forecast now assumes a positive free cash flow in the mid-single-digit million euro range.

The new business forecast for 2023, which had previously been around €700 to €800 million, has been increased to a figure of up to €900 million. In contrast to many competitors, the PWO share price has shown relatively stable performance over the course of the year. Given the good development, the price should still have potential upside.