Amberg, Germany – EBITDA at automotive interiors company Grammer plunged by 108% between the third quarter of 2017 and 2018, as sales remained static and exceptional costs soared.
Grammer reported an EBITDA loss of EUR 1.8m in the third quarter of 2018, compared to EUR 23.2m in the 2017 quarter. The company issued a trading statement on 15 October.
This was a result of the lack of a seasonal recovery, which hit the company's automotive division. European automotive sales were down in the quarter, Grammer said.
Additionally, exceptional costs of EUR27 m in Q3 2018 were much higher than EUR 6.9m incurred in the 2017 quarter. These included non-recurring transaction costs associated with Ningbo Jiafeng's acquisition of the majority of the company, restructuring, and other acquisition expenses.
Rising sales volumes in agricultural machinery, construction machinery and truck markets drove volumes in the commercial vehicles division. Sales were EUR 456m in the first nine months of 2018. In the same 2017 period, sales were EUR 397.8 m, 14.6% lower.
Over the first nine months of 2018, sales in the automotive division were down by EUR 31m to EUR 973.9m. This was caused by a large number of new car launches, and the ramp-up in volumes associated with this. Additionally, auto sales in the US and Europe were weaker in the quarter.
Overall EBITDA at the company was EUR 63.3m for the first nine months of the year. This is a fall of 23% over the period.
Looking ahead to the rest of the year, Grammer's management fears that the slump in passenger car sales in the final quarter of the year will get worse. It adds that macroeconomic conditions 'remain challenging'.
However, the company started incorporating revenue from the recent TMD purchase in its accounts from 1 October, and this will take revenue to EUR 1.85 bn.
|Grammer Q3 and 9 months 2018 (EUR m)|
|Q3 2018||Q3 2017||% change|