Stuttgart Actually, the new Varta boss Markus Hackstein should appear for the first time this Tuesday and explain the difficult situation at the battery manufacturer. However, the company from Ellwangen postponed the press conference at short notice to a later date that has not yet been determined.
Varta called “technical reasons” for the delay. The final quarterly figures, which were actually announced for 7 a.m., are still a long time coming.
The breakdown does not reflect well on the already tense situation of the medium-sized company. The share is already under pressure: investors reacted to the delays by selling on Tuesday. The Varta titles lost more than nine percent in early trading at the top before limiting their losses to a good five percent.
According to preliminary figures, Varta is in the loss zone
According to the preliminary figures published, the Swabian battery manufacturer is in the red. In the third quarter, a loss before taxes, interest, depreciation and amortization (Ebitda) of 2.5 million euros was accumulated. A year earlier, an operating profit of EUR 70.2 million had been posted.
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The reason given by the company at the time was raw material and energy prices with simultaneous delays in customer projects in the micro-battery division. That pushed sales between July and September by 14 percent to 194 million euros.
Varta had already overturned the profit forecast for the year as a whole at the end of September. According to the preliminary figures, after nine months sales were eight percent below the previous year at EUR 571 million, adjusted Ebitda fell by almost two thirds to EUR 66 (182.5) million. The company supplies Apple with batteries for the “Airpods” headphones, among others. But with the latest model, Varta has lost its monopoly. Apple is now also relying on the supplier Samsung.
Ambitious goal traction battery
Varta is trying to make the leap from a manufacturer of mini batteries to traction batteries for electric cars. Despite lavish state subsidies, the company threatens to take over itself. According to the company, the production for the first customer is running. The series delivery for the so-called V4Drive cells should then start at the end of 2023.
It’s about a battery for accelerating sports cars, not main propulsion batteries yet. But theoretically, the booster technology of the new Varta battery can also be used as the main drive after appropriate adjustment. But so far Varta has not been able to present any new customers. Even if customers are won in the near future, the dry spell could be long before the order turns into sales three years later.
The longtime CEO Herbert Schein had to vacate his post at the end of September. The manager, who successfully took the company public, will in future only be concerned with building up the business with lithium-ion cells for electric cars. The business is to be spun off to bring partners on board for the expensive build-up of new production capacity.
High debts, little cash
Because the company’s own funds have been severely depleted in recent months. At the end of June, the company had less than 40 million euros in cash reserves. At the same time, Varta’s debts have quadrupled in the past three years, to almost 900 million euros. And now interest rates are rising.
For each of the past two years, 100 million euros in dividends were paid out – money that is now missing in the company. The major shareholder is the Austrian investor Michael Tojner. With his investment company, he still holds just over 50 percent of the shares, after repeatedly parting with blocks of shares.
At a good EUR 30, the share price has lost around 73 percent since the beginning of the year, but is still above the issue price of EUR 17.50 in 2017. Aggressive hedge funds, however, are betting on further price losses.
Most analysts distance themselves from Varta shares. Warburg Research only lowered its target price from EUR 48.50 to EUR 21 at the beginning of November. And Kepler Cheuvreux even halved their target to 15 euros at the end of October.
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