“2023 is a year of changes for Varta AG,” said the spokesman for the board, Markus Hackstein, on Monday according to the announcement. The restrained customer demand in the majority of the segments requires a very strict austerity course. The management is currently implementing measures of its savings program. Unfortunately, this also means painful cuts in human resources. Customer business is generally focused on the second half of the year, only business with home storage systems is consistently strong throughout the year.
Among other things, Varta is burdened by high energy and raw material costs. In addition, the company has long been struggling with weak demand for the once so fast-growing lithium-ion button cells, which are installed in headphones, for example. In addition, devoured their own electric car-Battery cell V4Drive plenty of money. The group had recently initiated a comprehensive savings and conversion program. Group-wide, 800 full-time positions are to be cut. According to the information, around 390 jobs are to be cut in Germany over the next two years, 240 of them this year.
In the first three months of the year, a loss before interest, taxes, depreciation and amortization (Ebitda) of two million euros was incurred in day-to-day business, the SDAX-listed company announced on Monday in Ellwangen. A year ago, Varta had earned around 38 million euros. Sales in the first quarter fell by eleven percent to 164 million euros. The bottom line is that Varta reported a loss of almost 37.8 million euros, after a profit of a good six million a year earlier.
The company also confirmed the forecast that was only lowered at the end of April. Since demand is difficult to forecast at the moment, Varta had lowered its expectations for the current year and thus forced the share price to fall.
Instead of the previous 850 to 880 million euros, the management expects sales of 820 to 870 million euros in 2023, after 807 million a year earlier. The adjusted operating result should be at least at the level of the previous year, when 69.5 million euros were achieved. When presenting its figures for the third quarter in mid-November, Varta had still assumed an operating profit of EUR 90 to 110 million for this year.
On the stock exchange, this had led to further losses in the share, which had already been shaken for some time. The price has fallen by another fifth since the lowered forecast was announced at the end of April. Despite the current stabilization, the price losses add up to around 75 percent over a twelve-month period; since the record high of EUR 181.30 at the beginning of 2021, it has been almost 90 percent. Until the countermovement that started now, the value of the Varta share was even slowly approaching the issue price of EUR 17.50 at the IPO.
The company, which is currently valued at around 800 million euros, belongs to the company Montana Tech Components of the Austrian investor Michael Tojner. It was only at the end of March that he increased his stake through a capital increase and as part of a refinancing concept with banks.
This is how the analysts react – and so do the Varta shares
Varta shares have laboriously stabilized at their lowest level since 2018 on Monday after the quarterly report. After a weak start at EUR 19.10, the battery manufacturer’s papers turned positive and most recently rose 0.57 percent to EUR 19.47. It remains an annual loss of 13 percent after already falling by 80 percent in the previous year.
According to analyst Philipp Konig from Goldman Sachs, the group closed the first quarter at the level of the low targets. In the CoinPower area, with the lithium-ion button cells for wireless headsets, for example, there is no recovery in sight. The main customer Apple has reduced demand significantly. Varta is trying to counteract this with reduced capacities and short-term short-time work in order to keep costs under control. ELLWANGEN (dpa-AFX)
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