Stabilus Holds Guidance Amid Q1 Revenue Decline

Revenue Pressure but Resilient Profitability in Q1

Stabilus SE reported first‑quarter fiscal 2026 revenue of EUR 291 million, a 7% decline from the prior year, with foreign‑exchange headwinds of roughly 3% to 4%. The drop was driven largely by weaker demand in China and softer conditions in automotive and industrial markets. Despite the top‑line pressure, the company generated EBIT of EUR 29.3 million, corresponding to an EBIT margin of 10.1%, and improved free cash flow to EUR 23.9 million from EUR 8.9 million a year earlier.

CEO Dr. Michael Büchsner and CFO Andreas Jaeger told analysts they are “holding course” in a difficult environment, citing cost control, forecasting discipline, and working‑capital execution as key contributors to the cash‑flow performance. Management reiterated that fiscal 2026 is expected to be “back‑end loaded,” with margin expansion anticipated in the second half as restructuring benefits and new product launches ramp up.

The company highlighted foreign exchange as a significant factor, noting that currency effects accounted for roughly half of the reported revenue decline. Even so, Stabilus generated an EBIT margin within its long‑term target range, supporting management’s decision to leave full‑year guidance unchanged at EUR 1.1–1.3 billion of revenue, a 10–12% EBIT margin, and EUR 80–110 million of adjusted free cash flow.

Regional Performance: China Prioritizes Margin, North America Hit by Plant Issues

In Asia Pacific, revenue declined 13.6% year over year in reporting currency, reflecting weaker consumer sentiment and mix effects in China, particularly in upper‑segment vehicles where Stabilus has higher exposure. Despite the drop in volume, the region delivered an EBIT margin of 18.1%, which Büchsner described as a record for a first quarter in China, as the company prioritized higher‑margin business rather than pursuing volume at any price.

Management broke down the China revenue decline as being driven by pricing, foreign exchange, consumer sentiment, and product mix. Around 8% of the year‑over‑year change was attributed to pricing carryover from last year’s elevated price pressure, above the company’s typical expectation of 4% to 4.5%. FX effects were estimated at 3% to 4%, while weaker consumer sentiment contributed roughly 4%, compounded by a mix shift away from upper‑segment vehicles with higher electromechanical content.

In EMEA, revenue fell 1.4% in euros and 0.3% organically, but the region’s EBIT margin improved to 10.8%. Jaeger said margin expanded by 1.9 percentage points despite lower volume, citing fixed‑cost reductions and a more flexible cost base. The Americas saw revenue decline 5.7% in euros, with organic growth at –0.5% after FX. EBIT margin in the region was 4.7%, which management called unsatisfactory, pointing to operational issues at two automotive plants in Mexico and Gastonia.

Operational Headwinds and Cost‑Reduction Program

Büchsner estimated that efficiency‑related issues in North America had an impact of around EUR 2 million in the quarter. These were linked to workforce fluctuation affecting direct labor and maintenance staffing, which in turn hurt line uptime and output and led to knock‑on effects such as premium freight and quality challenges. The company expects these headwinds to persist into the second quarter, with performance targeted to return “back under control” in the third and fourth quarters.

Alongside local corrective actions, Stabilus is executing a group‑wide transformation and restructuring program aimed at removing EUR 19 million of fixed costs by 2027. The initiative started in the first quarter and is expected to ramp progressively over coming quarters. Management anticipates that the program will contribute about one percentage point of EBIT margin improvement in the second half of fiscal 2026, with a further one percentage point expected from resolving the North American operational issues.

Jaeger said reducing net financial debt and leverage remains a priority. The company cut net financial debt by EUR 13.3 million in the quarter and reiterated an objective to bring leverage to 2.0 within the next two years. Net working capital stood at EUR 218.6 million, or 17.3% of revenue, reflecting the focus on cash generation and balance‑sheet strength.

Growth Drivers: POWERISE, Door Actuation and Automation via DESTACO

Stabilus reiterated three growth pillars it expects to support results over the coming quarters and years: Industrial POWERISE, door actuation, and automation and robotics via its DESTACO business. POWERISE, an electromechanical motion‑control product built on automotive production lines, generated more than EUR 5 million of revenue in the first 12 months after its introduction last year and is growing at a double‑digit rate. Management described POWERISE margins as “exceptionally high.”

Door actuation was highlighted as a “next generation of vehicle comfort,” with broad‑based customer interest. Büchsner cited activity with OEMs including Geely and Hyundai and a planned start with MIH Auto, saying that launches in the second half of the year are expected to “greatly help” sales. In response to analyst questions, management said door‑actuation profitability is comparable to, or slightly higher than, POWERISE margins, supporting the company’s margin‑accretive growth outlook.

Within automation and robotics, Stabilus is pursuing synergy initiatives at DESTACO, including intelligent gripping systems for humanoids and industrial robots and a development project for electromechanical hinge solutions for humanoid robots with a U.S.-based OEM that is also an automotive customer. Hinge‑related humanoid work is still in development and not expected to generate significant sales this year, while gripping systems had already delivered EUR 200,000 in the first half. Management noted that DESTACO’s reported profitability now reflects newly allocated group overhead of roughly 2% to 2.5%.

Outlook: Sideways Near Term, Back‑End Loaded Year

Management confirmed its fiscal 2026 outlook, maintaining guidance for EUR 1.1–1.3 billion of revenue, an EBIT margin of 10–12%, and EUR 80–110 million of adjusted free cash flow. Büchsner said second‑quarter revenue is expected to move “rather sidewards” versus the first quarter, citing seasonality around the Chinese New Year and relatively flat automotive conditions in North America and Europe. Margin improvement is weighted to the second half, supported by restructuring measures, operational normalization in North America, and new product launches.

The company’s regional strategy remains focused on protecting profitability in China, improving efficiency in North America, and continuing fixed‑cost discipline in EMEA. Management emphasized that in China it will continue to emphasize higher‑margin business rather than “hunting for each and every business,” even if that constrains volume in the near term. Overall, Stabilus framed the quarter as evidence of resilient profitability and strong cash generation in a challenging market, while positioning the business for margin expansion as its transformation program and growth initiatives take hold.