Eurogroup Laminations, profit slump and falling margins. CEO Arduini: 'Market volatile and uncertain'

EuroGroup Laminations (EgLa) closed a first half marked by trade tensions, currency volatility, and still fragile industrial demand in Europe and North America. The balance sheet of the pocket-sized multinational company from Baranzate (just outside Milan), known in particular for the production of rotors and stators for electric motors, as at 30 June shows a slight increase in revenues to €429.2 million (+1.6%), but a sharp drop in profitability: adjusted EBITDA stopped at €44.8 million (-12.2%), with a margin that dropped to 10.4% from 12.1% a year ago. Even more drastic was the drop in net profit, which plummeted to EUR 1.3 million from the EUR 17.9 million recorded in the first half of 2024.

"The context has been extremely uncertain, with the threat of new tariffs between the US, Europe and China affecting the North American market in particular," commented CEO Marco Arduini. "Asia remains our locomotive, but to counter the pressure on margins we have initiated an efficiency plan aimed at recovering profitability in the second half of the year."

The scenario remains fragile, but the direction is set: reduce costs, improve operating leverage and select investments. The relaunch plan, which has been operational since May, has already involved the Emea region and will be extended to the North American market in the third quarter. "The objective is to return to an adjusted Ebitda margin of 12% by the end of the year," said cfo Matteo Perna, confirming a strategy focused on capex selectivity (EUR 40.1m in the half year) and working capital control.

The E-mobility segment, the industrial heart of the group, grew by only 0.4%, penalised by the drop in North America (-7%), while China posted a robust +52%. The Emea area dropped by 5.8%, Usmca (USA-Mexico-Canada) fell by 10.7%, while Asia rose from 5.7% to 14.4% of total revenues, partly due to the consolidation of the Indian subsidiary Kumar and the acquisition of minority interests in Chinese joint ventures.

On the corporate side, EgLa is preparing to turn over a new leaf: the global fund FountainVest, headquartered in Hong Kong, has signed an agreement to buy 45.7% of the capital from EMS, the controlling shareholder, at EUR 3.85 per share, with a total valuation of EUR 626 million, a strong premium compared to the company's valuation on the Italian Stock Exchange, which fell from over EUR 5 at the debut to just over EUR 2 before the offer. Currently, the price is almost in line (EUR 3.6). The transaction, which involves the reinvestment of 50% of the proceeds by EMS and the exit of Tikehau Capital (7.9%, a French investment company and asset manager), will lead to the launch of an IPO and delisting from Euronext Milan by 2026.