Varta Stock on the Rise: Positive Signals After the Third Quarter for the Battery Manufacturer

After a solid Q3, battery manufacturer Varta is confident of achieving its annual targets despite challenges.

11/10/2023, 3:19 PM
Eulerpool News Nov 10, 2023, 3:19 PM

The battery conglomerate Varta, which had recently been struggling with its crisis, surprisingly recorded solid numbers in the third quarter that even exceeded market expectations. The reaction of investors was correspondingly positive, and the share price rose significantly. After the share experienced a crash last autumn and fell from its value of 60 euros to a historical low, there is finally hope for the beleaguered investors.

The company, once one of the growth stars on the stock exchange and considered a world market leader for rechargeable lithium-ion button cells, has faced increasingly strong competition and a slump in demand for consumer electronics in recent years. The diversified business segments, including household batteries, home storage, and the production of round cells for electric car batteries, were unable to offset the loss of business from wireless headphones.

The profit warnings and the subsequent loss made it necessary for Varta to agree on a restructuring concept with banks. This also includes the reduction of hundreds of jobs as part of a comprehensive restructuring, which is expected to last until next year.

But now there is reason for hope. In the third quarter of the current year, the company was able to generate a turnover of 215 million euros, which corresponds to an increase of around 10% compared to the same period of the previous year. The adjusted earnings before interest, taxes, and depreciation were at 29.4 million euros, after Varta was slightly in the red in operational terms last year.

CEO Markus Hackstein confirmed the company's annual forecast, which anticipates a turnover of 820 million euros and an operating profit between 40 and 60 million euros. After nine months, the turnover amounts to 554 million euros and the operating profit to 22.6 million euros.

Next Tuesday (14th November), Varta will present detailed quarterly figures to show whether the company is on the right track to achieve its annual targets. Investors are eagerly anticipating and hoping for a more sustainable positive development in the future.

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