Cooper-Standard faces headwinds, ends 2024 on high note

NORTHVILLE, Mich.—There were plenty of headwinds facing Cooper-Standard Automotive Inc. in 2024, but the company managed to navigate them all and came out stronger in the end.

"We were able to deliver profit, cash flow and margin improvement essentially in line with our original guidance and expectations, despite lower production and foreign exchange headwinds," Chairman and CEO Jeffrey Edwards said in a statement. "The new organizational structure we implemented at the beginning of 2024 continues to drive significant efficiencies and cost savings, and we expect to continue the momentum of operational excellence and margin enhancement in 2025."

Yes, the company finished the year in the red—posting a full-year net loss of $78.7 million, but it's an improvement over 2023's net loss of $123.2 million.

And, yes, full-year sales dropped about 3 percent compared to 2023, coming in around $2.73 billion, but operating income stood at $69.8 million, a 51.7 percent increase over 2023. And that, Edwards told investors during the company's recent earnings call, is something to be proud of.

"The combined efficiency improvements in our plants and lean initiatives in our supply chain also generated $76 million in cost savings during the year," Edwards said. "In addition, we realized $24 million in savings related to the jobs reduction action that we implemented in the second quarter.

"As a result of the increases in operating efficiency and cost savings, we achieved a solid 52-percent improvement in operating income for the year. Despite continued headwinds from lower production volumes, inflation and unfavorable foreign exchange."

Adjusted EBITDA was $180.7 million (6.6 percent of sales), which marked an increase of $13.6 million over 2023.

Cooper-Standard rounded out 2024 with fourth-quarter sales of $660.8 million, a 1.9 percent drop compared to the same period of 2023. The company attributed this to unfavorable foreign exchange, price adjustments and unfavorable volume and mix.

Meanwhile, operating income, however, showed a marked improvement coming in at $31.7 million or $36.2 million higher than the fourth quarter of 2023.

Net income for the quarter was $40.2 million, a $95.4 million increase over the same period of 2023.

Adjusted EBITDA stood at $54.3 million.

Sales in the sealing segment slipped just slightly to $350.4 million from the $351.6 million during the fourth quarter of 2023. Fluid Handling, meanwhile, saw sales fall by about $10.5 million compared to Q4 2023, coming in at $294.8 million for the quarter.

The adjusted EBITDA for sealing segment stood at $40.2 million, a marked improvement from 2023's $27.3 million.

Likewise, adjusted EBITDA in the fluid handling segment was up about $11.6 million year over year, coming in at $27.3 million.

"The streamlined, product-based organization structure that we put in place in the beginning of the year has accelerated our operating improvements and cost reduction achievements," Edwards said. "Again, after just one year, there are still more efficiencies to be gained. We expect to build on the successes of 2024 to drive further margin expansion and value for our stakeholders in 2025."

With all of those headwinds in mind, Cooper-Standard is predicting a 2025 that looks an awful lot like 2024.

Sales are expected to fall in the $2.7 billion to $2.8 billion range, while adjusted EBITDA is expected to improve, coming in around $200 million to $235 million.

"The flat sales outlook is being driven by weak production volume," Edwards said. "Current forecasts suggest the global light vehicle production will be down another half percent in 2025 after declining 1.1 percent in 2024. The production declines are expected to be greater in our largest markets: here in North America and in Europe.

"To offset these production headwinds we expect to further drive cost savings through improved operating efficiencies and additional lean initiatives, including specific actions to drive raw material costs lower as a percent of sales.

"We also expect to benefit from a full year of savings related to the restructuring we implemented in the second quarter of last year," he added. "In addition, continuing launches of new, higher margin business will be a positive driver during the year. We are confident that the increased operating efficiency and the ramp up of higher margin business will enable us to lift our strategic target of double-digit EBITDA margins as we exit 2025."