Stabilus SE

XETRA:STM

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen, and welcome to the Stabilus SE web conference regarding the results in the second quarter of the fiscal year 2024. [Operator Instructions]. Let me now turn the floor over to your host, Dr. Michael Büchsner. Please go ahead.

[Michael Büchsner, executive]

Thank you very much. Good morning, and welcome to everybody. Wish you a great day. Also here with me in the call is Stefan Bauerreis, our CFO; and then Andreas Schroder, Investor Relations, and we are happy to share the latest results with you. We had an exciting quarter, a very good performance in a challenging environment. I would say that's the headline of today's meeting as well. Revenue growth, very strong, again, good growth both particularly specific that did move the needle also particularly when it comes to automotive products, still good growth there. We also confirm and reconfirm our guidance for the year. That's, I think, in a very, very important point in these challenging days. We had enlightening meetings with our new colleagues from this take. We have the closing on the 31st of March, as you know. And one point, which was extremely exciting on our new product scale was we sold first time more than 100,000 parts in 6 months of our door actuation system. Door actuation system, the future of comfort in cars enjoys very good growth rates. And particularly in Asia, the growth rates are extremely high. So more than 100,000 units sold of the DA.90 door actuation product in Asia. We had a very nice road show, along with our new colleagues from this take and this is what we'll talk about right away on the next page. Because there, you see some impressions of the different plants. And the most important thing to us was to visit our new colleagues right away, right after closing, we've been on a plane visiting from the management side, all the different locations, the big locations where all these nice products are built to atomize tomorrow. And I can tell you the feedback was extremely good. Why was it extremely good because this takeout and they are all happy to be with Chavous now. They've been part of a big organization, the Dover Group. In the Dover Group, the automation business was not their core technology, their core business to grow upon. With Stabilus, for sure, that's different. Now the leadership team of the stake reports directly to Stefan and myself, and they have a really big voice now in the organization shaping our future, shaping our future in terms of the element of automizing processes of tomorrow. And this is where they are also very proud of, we are very proud of, and we shape now one unified team and this did work out in an excellent way, and we are very prosperous and positive about our joint future. So those were the highlights of the past quarter. And now I turn it over to Stefan to talk a bit about our financial position.

[Stefan Bauerreis, executive]

Good morning, ladies and gentlemen, also from my side, and thank you, Michael, for handing over. So you've heard quite interesting and challenging weeks are behind us. So what I can present to you today, these are the Q2 numbers for the financial year for the fiscal year 2024, which ended end of March, the 31st of March. Here, we have to know, as Michael indicated, we were able after hard work to close the deal for the M&A activity with DESTACO. So at the end of the day, now the first consolidation date of DESTACO is the 31st of March. That will mean whatever you see here in this presentation, we were talking about P&L numbers. They are not impacted, obviously, by DESTACO in the perspective that will change then in the quarters to come because the first consolidation date is exactly the date or let's even say the last second of the date of the second quarter. That's why on a balance sheet perspective, obviously, DESTACO is already consolidated with, let's say, obviously not with a clear purchase price allocation here done because that is a process to be started. That's why also technically all those different amounts are posted in the goodwill, but this is only preliminary and that is to be changed and to be worked on, and we already started with that, as you can understand, to make that happen until the end of our fiscal year, that we then have a complete and structured and agreed purchase price allocation also from DESTACO. But now let's jump in directly in our P&L numbers for Q2. So therefore, we can say this is the last time, let's say, in brackets, only the old Stabilus group. And we had a revenue of about EUR 313.5 million all overall. That is a very slight increase of 0.9%. We believe that with this very challenging environment that we saw with strikes in the U.S. with a lot of uncertainty in the different economies, I think to be more or less flat on the revenue side is already a big success. But we also have to see what will come on later on to that point as well. The growth here is mainly also driven by the region APAC and a very good development of our automotive business here, but I will come later on to that perspective more in detail. So at the end, revenue mainly would grow in APAC, flat in Europe, and obviously, economic downturn and issues in Americas, but you will see that in a while and during the next slides. When we then go to the adjusted EBIT numbers, so EBIT numbers, we are now EUR 38.9 million. So that is a reduction of 4.7%. But nevertheless, an EBIT-adjusted quote in percent of sales of 12.4%. This is mainly impacted by, as you all know, just by reading the newspaper, significant cost challenges, mainly in those high COVID former low-cost countries, which are mainly Mexico and also in Europe, Romania, there are significant cost increases. We are working on countermeasures to get that compensated. But this is always, let's say, always a little bit postponed that we can manage that. So all over that, we nevertheless were able to reach the 12.4% and in that challenging environment that we are, this is a good point, but still to come more. And because as you know from last year's also this year, we have to say that our profitability will be back-end loaded, and there will be increases. We are working on that for the second half of the fiscal year. And that is what also is our clear view on the further development. Talking about the profit. Here, you can see that the profit went down significantly. So where does it come from? So from our perspective, there's nothing really much to be very much very much taking that into series because you have to know that last year, we worked over several years on a tax ruling in Germany where we finally received last year exactly in the second quarter that the financial authorities in Germany said, "Yes, Stabilus, you are right," and we got a tax reimbursement for the years 2010 to 2014 of about EUR 18 million, and that was obviously then impacting significantly the profit because that was all to be shown in the P&L of the financial year of the fiscal year 2023. And this is, as it was a one-timer, obviously missing in the fiscal year 2024.So very much to be explained with that specific onetime. The same you can see here on the adjusted free cash flow, also here on the first view a significant reduction in the adjusted free cash flow. But also here, if you even would take out the impact on the tax reimbursement, we nevertheless are quite positive. Also here can continue in following the path as Stabilus has a really good cash-generating entity. So also here significantly impacted by this tax refund in the last year. Also here, I just wanted to mention that, for sure, we made here, let's say, an adjustment in the free cash flow of all the acquisition-related payouts, which is mainly the purchase price itself, but also all the deal-related costs so that we really are able to compare apple with apple and not apple with peers. So if we then continue on the next slide, you can see here the split on the different regions. And I think here, you can see exactly what I already started to explain in the previous slide that the revenue development was not equal in all the different regions, but very, very different, and I would like to explain that also to you now and in the next slides to come when we go into different regions a little bit more in detail. Once again, Asia Pacific in the second quarter was very much our, let's call it, shooting star with a 12.1% increase even knowing that this comes mainly out of automotive and out of Powerise sales. And if we take into consideration that the growth in the car production is on a 1-digit level, and we were able to increase in the double-digit level our sales. So therefore, I think that is a very, very positive and a very good achievement of our colleagues and of our organization in APAC. Going down to EMEA and the Americas, for sure, the picture is here different. EMEA is with all the economic uncertainty with all the problems with all the unclear structure of, let's say, what the governments are providing for which cars on subsidies or not. So there is a quite uncertainty with the end consumer, which is always not good for the industries. Also here, we are quite flat. At the end, it was plus/minus 0 development in the revenues. And we just went across a small growth because we acquired last year a Cultraro Group, with headquarter in Italy, and that was here the major point to bring that higher than the 0. So EMEA, we have to say, flat sales development, positive is the impact of Cultraro. But on the other side, Americas, here, we really see a downturn on the sales, it's minus 4.1%. And with, nevertheless, a quite stable development of automotive side. But here, mainly, we have a significant reduction in our industrial business. Also, we have some issues on the solar business, where, on the one side, we lost part of one customer. But we will regain another one in the next months to come. So that is also already compensating itself. Starting directly with Americas here and the revenues side, as I already explained, the good growth on the industry side even when it was currently our biggest challenge in that region this business unit, we were able to grow significantly on the Aerospace, Marine & Rail business, but we see issues on energy and construction. I explained that with that one customer on the solar side, but we get compensation in the second half to come. And also industrial machinery and automation, we see that mainly on the distributor side that we have, they now reduced once again their stock. And also here, we believe that we will see better growth rates in the month and in the quarters to come.So at the end of the day, a quite challenging environment on the revenue side. Also when you have a look on the adjusted EBIT side, it still gets in the same way because here, we have our main issues and challenges with our plants in Mexico with a significant increase of labor costs, which we are on the way to find efficiency gains. But once again here, that impact will be back-end loaded, and that's why we have a reduced adjusted EBIT with about 10.6% in the second quarter this year. If we then go to Europe and then the next slide, we see then the region EMEA. So here, as I already said, 0.2% revenue increase, mainly impacted by Cultraro, without Contraro, it would be mainly flat. I think also in that economic environment, not a bad development in that perspective and also to maintain here a quite good level of structural EBIT with more than 11%. I think that is, nevertheless, a good message. We are able to, let's say, to variabilize more or less our costs. So we are in a good cost reduction and cost management structure. So here, I think we are on track, and also the plants are developing in a good way. Last but not least, having a look on the next region on Asia Pacific and Asia Pacific, as I already explained at the beginning, that is in terms of the revenue increase that what we like to see. And what I'd first like to present to you is the revenue increase by 12.1% year-over-year compared to the second quarter of the last fiscal year, mainly impacted by our good performance on the Powerise business side. I think it's even important to know that the car production in that second quarter was significantly lower than the 12.2%. So we were able to overachieve significantly the market growth. So in China, passenger car production increased by about 4.3% and our organic revenue growth even was 8.2%, eliminating all the FX impacts coming across. So I think that is a very, very good achievement in a very good development. What is important, you also can see that in the development of the EBIT margin. Also here, we were able to increase it once again by 1.9 percentage points. So also here, our plants, all our activities in terms of cost efficiency, in terms of continuous improvements, brings home the fruits and therefore, overall, a very good development. So that's why, finally, to summarize, very good development in the Asia Pacific with good growth and also a good development of our results, a challenging environment, mainly in the Americas. That is what we knew that is what we're working on establishing all the efficiency programs are in place and a flat development in Europe. But despite having that in the context of the economic situation, I think, nevertheless, a quite good result to be presented today. Thank you. With that, I will hand over to Michael to bring a little more details on the market segment.

[Michael Büchsner, executive]

Thank you very much, Stefan. We will talk a bit about the business split of the industrial business going forward. And this picture is also a well-known picture value, and it will shift over the course of the coming quarters further towards the industrial sector away from the automotive sector. And this is indeed what we said as a strategic priority is important to us if you remember. We said we want to leverage 50-50 between automotive and industrial business because that's a vital position for us. We indeed bring the spirit, the quality, the power in terms of cost management from the automotive sector in the industrial sector and harvest the fruits of these nice margins, and that's what we continue to do. That means over the course of the coming quarters, you will see a shift from the automotive towards the industrial part of this pie cake on the left-hand side of the chart, and that's exactly what we intended to do. So far on the automotive side, business is going well. On the other hand, as well, in terms of health and recreation, we see positive lights, and particularly when it comes to the aerospace business, we see good growth as people are traveling more. They take more airplanes into consideration for their travels and all these different airplanes are equipped with our Gas Spring stampening systems around the world for both Boeing and also Airbus and the other smaller airplane producers. However, Stefan also talked a bit about the energy and construction sector. This is particularly driven by the energy sector. And here, a shift is happening. We also said is one of the megatrends, reshoring activities. Now the Americans are particularly proud of their American production, so in America's production first. That's the slogan, as you know. This drove an interesting trend in terms of energy and construction because when it comes to the solar business of our site, we are now reducing the share of our Mexican production and ramping up the line in the U.S., which will then, going forward, give it another boost in terms of the energy sector when it comes to solar field equipment because formerly, all these elements were produced in Mexico, those customers gradually are reducing their call-offs in the Mexican side. And as there is promotions from the government to produce things in North America, in the U.S. particularly, they shaved now production to North America. While they clean up their stocks for sure, you see this dip in this quarter, but this will back up as we ramp up our business in the U.S. with our solar business going forward. So a good and solid business performance after all, driven by predominantly the transportation sector in our industrial market share, and it will further down the road lean towards the industrial sector as DESTACO kicks in. On the next page, you see basically our net leverage ratio, not a surprise. We are now at 2.8 because we spent the money to get DESTACO as part of our Stabilus family, which we're proud of. And from today on, from 31st of March on, we for sure work on bringing our net leverage ratio down again to our target net leverage ratio 1. And as you see from the history, we've been always very successful even in crisis times to gain momentum to pay back debts and to reduce our net leverage ratio, and we'll continue to do that in the future. One thing is very important. We also got this question, there will be no capital increase. So we do not intend the capital increase in order to pay back debts. This is something which we will do from our own forces. That's the plan, and this is what we live up and execute upon. On the next slide, you also see our net working capital. You see it now with 20% for sure, with DESTACO on board and some affects you see now that industrial business in general terms has lower turns. And this impacts now in the months in the quarter and probably in the next 2 quarters, our net leverage ratio, but only a bit will not be above and beyond our levels, which we've been seeing in '22. So this is also what we constantly work on along with our colleagues from DESTACO going forward. On the next page, an important figure as well, and you see it's permanently now in our deck to also talk about CapEx. CapEx in the range of 5% to 6% is what we are aiming for. Why is that? In times of '22, '23, and even before that, we have been always in the range of 4% to 6% with CapEx. Yes, we had a spike when we had to invest a lot more in fully automated systems. As you know, we did that, and we are progressing that path, but this spike in peak investment is basically in the back that was in '23 when we did that. Now in '24 and going forward, we stick to our CapEx as a percent of sales in the range of 5% to 6%. We, yes, continue to invest in automation here and there, wherever it makes sense. And by the way, also the DESTACO friends are in the same range, 5% to 6% in terms of CapEx ratio is the same number within the Stabilus group as well in the DESTACO Group, and this is the number we also strive for in the future to be successful and to further grow our business. Sure. Talk about our guidance. Our guidance, as I said, we still stick to our guidance. We are for sure in rough waters with these economic situations. You hear that all over the place. However, we stick to our guidance. We will be, however, on the lower end of the guidance of EUR 1.4 billion to EUR 1.5 billion and 13% to 14% EBIT margin, but we stick to our guidance, and this is extremely important to us. The plan is back-end loaded for various reasons. The main reason is that for sure now, as you have a better leverage with your supply base. We are in these negotiations with our suppliers to crop back some inflation. We had to give them a year back. Now material prices are coming down. We are in these negotiations with the suppliers. We see the first lights at the end of the tunnel made first deals, and this is something which comes back and loaded into our P&L as well as the roots of the automation processes and for sure negotiations with the customers. So we are fighting on 3 areas, which is customers croak money on the supplier side, do as good as we can in terms of gaining efficiencies, and getting our share back from inflation. Last but not least, the third element, investing in automation. And these are the 3 elements which then lead to success throughout the year, and that's what we're massively working on. By the way, not only on Stabilus side but also with our new colleagues from DESTACO from the first day. I'd like to conclude the presentation with a summary slide this time around. We continue to pursue our 2030 strategy, which is predominantly working on automation as well as comfort now with our colleagues from DESTACO in conjunction with our core business of Stabilus, we're pursuing these 2 directions in terms of industrialization and automation.That's extremely vital for us. Target is 50-50 between automotive and industrial build business in general terms. Also, again, the highlight of the quarter is that in the first half of this year, we were able to sell more than 100,000 units of store actuation systems, which is a groundbreaking technology. Comfort is all over the place, particularly in cars. And this is something where not only are successful in Asia, but just keep it in mind again, we won substantial contracts already also in Europe and are in America, the main supplier for those elements. So it's an extremely outstanding achievement. The second thing is then the DESTACO integration plan. That's what we're heavily working on. The DESTACO team is part of our success since the 1st of April. We visited them all. We did the first workshops for sales synergies, for cost synergy conclusions, and we are well on track with that. And last but not least, despite the challenging market environment, we look in a positive future for us based on that because we are investing in the right areas of the business. We follow the megatrends of Comfort. We follow the megatrends of automation, and these megatrends are here to stay. And our products and our progress underlines that success in difficult times. So thank you very much. With this slide, we would close the presentation section and would be happy to hear questions now.

[Operator]

Thank you very much. [Operator Instructions] And the first question comes from Akshat Kacker from JPMorgan.

[Akshat Kacker, analyst]

Three questions from my side, please. The first one on your revenue guidance for FY '24. As you said, you're probably navigating rough waters at this point. And in terms of what you've delivered in the first half, it looks like you still need a meaningful step up in the second half to reach your full-year revenue guidance. Could you share more details on where that growth is coming from other than, obviously, the $100 million roughly revenue contribution from the stack in the second half? The second question is on your APAC Powerise business. Obviously, an area that has done very well for the business in the last few years. We might end this year as that region being the highest revenue contributor within Powerise for tables. So I just wanted to check back on my assumptions for growth in 2025, '26, when you think about that APAC Powerise business, and how much of that will also come from door actuators. And the last one, if I may, on DESTACO. Could you just talk about your overall expectations for the business as you look into the books? How do you think about 2024 in terms of the 2 key KPIs that you lay out, revenue and adjusted EBIT, please?

[Michael Büchsner, executive]

Good. Thank you very much, Akshat, for your questions. The exciting questions for Sue. As always, thank you very much for them. I would give it a starting point for the first 2, and then I would hand over also to Stefan for the third one when it comes to the take 2024 and what our expectation eventually is. So starting with revenues, yes, for sure, you already mentioned it when you asked your question, we are basically in economic terms all over the world in rougher waters than the years before. So in terms of revenues, and you mentioned already, DESTACO will have its share compared to the first half of the year. So DESTACO is a firm share of our growth plan for the second half of the year. Then there is something also not to underestimate. We had companies purchased, which is Cultraro, over the course of the last year. We got up to -- instead of 40, we got up to 60% of share. There will be a consolidation. They have very good products on the start, predominantly for the automotive sector, which goes into the direction of dampening systems for seeds, all kinds of interior dampening elements, and these elements and products enjoy very good growth as well these days. And then in general terms, on the industrial side. When it comes to economic outlook, there are analysts, which also underline that January, February, and March probably were the most difficult months in this winter season and over the course of the past quarters. So we also see particularly some refreshing news on the one or other industrial area of our business where we see light at the end of the tunnel, we still see good growth opportunities for our Powerise systems going forward because the fitment rates are not equally about the different regions. So that means the Powerise systems actually in the toy in some areas in the world, more growth than in others. And this will kind of balance because you know as a comfort company, comfort is an important selling argument. In case OEMs want to sell their cars, they in many case, offer bundle fitments of Powerise systems and other fitments moving towards more comfort in cars, and this also should help us. So this is where we see some growth opportunities for the second half. And then the second question you mentioned was kind of related, particularly pounding a bit on Asia Pacific because Asia Pacific, we saw good growth rates in Powerise. How sustainable is that? That's what you've been asking for. In terms of our general business scope, we are now in the early stage of our multiyear planning process at Stabilus, which typically starts in April, and then it ends into the business planning process towards August and September. But one thing is for sure, we did look already into the numbers and one thing becomes obvious that still, the fitment rate in Asia Pacific of Powerise systems is about 10% less on the car population than in other regions, where we see fitment rates between 20% and 25% of the respective car population in Europe and North America, you would find only 15% in Asia Pacific. So this is something which we still see in the Asia Pacific area. And this is something which, at the end of the day, we see over the course of the past quarters and even 2 years, extraordinary sales growth numbers in Asia Pacific. And coming back to our multiyear planning process, this is something which we always also see for at least 2 to 3 years to come because those contracts which we are winning now are realized over the course of the next 1.5 to 2 years. And then you typically have a contract for the next 5 years in the future. That means we have a very good visibility of how the volumes will develop, and they draw a very positive picture after all in Asia Pacific. You mentioned also doo actuation. Door actuation is picking up a lot last year. And I remember when we also personally met in one of the investor meetings, I mentioned, yes, we sold in the year '22 around about 50,000 to 60,000 on a yearly basis. Now we are -- if you accumulate and rather picture for the full year will be beyond 200,000. So it's rapidly growing. It's rapidly growing, for sure, on a lower overall revenue for the time being, but this growth curve indicates that this will be coming because one thing is for sure, if Asia Pacific starts with some comfort features, the Western OEMs need to follow that trend because otherwise, and you see that all over the place, the OEMs cannot sell their cars anymore because the expectation of customers is now that you show some superior interior and comfort features in your car in order to deal with the huge pressure which is coming from Asia to the OEMs. And this only works out if you have premium features like duration. So that's why we are very positive about door actuation. Your third question was in terms of DESTACO. It's a solid business, and we also displayed some numbers, but maybe I hand over here to Stefan to bring some more light on the numbers for '24 in terms of revenue and EBIT.

[Stefan Bauerreis, executive]

So first of all, perhaps, still to add one comment to APAC. When you have a look and compare the car production in China and the development of our sales, I think that is something we are very proud about is here, we are in very good relationship with all Chinese car manufacturers. So that will mean that it's not that like others, they are still relying on a very, very huge portion on just 1 or 2 customers. Here, we are really much in a very good relationship with the Chinese OEMs, and that is what is important, I think, for the success in China also for the years to come. That's just to add on that -- to give that flavor in addition. Talking about DESTACO, actually, you're quite right about the EUR 100 million expected to come in additional sales for the second half of the year with the consolidation impact that obviously we started on April first now with the first sales. So the good message here is that despite a lot of other industrial companies, we saw a significant downturn in sales. So DESTACO was very stable in their perspective. Yes, they saw from last year some postponements of some projects into this fiscal year and also some of those into the next fiscal year, but these are not canceling topics that are slightly timing deviations that will come. So that is a really stable business to be expected. And here also, just having a look on the DESTACO side stand-alone, we feel very comfortable to maintain also this year the 20% EBIT margin as a starting point, and that is what we have done further develop to increase with our sales activities to increase with our cost synergy activities, which obviously will take some time, no question. But I think it's a very good, it's a very stable business currently, which will bring us the 20% EBIT in stand-alone activities for sure. We also have to take in mind that there are still due to those carve-out activities, some additional integration costs. But we are happy that from an operational perspective, we can count on the 20% this year.

[Operator]

The next question comes from Marc-René Tonn from Warburg Research.

[Marc-Rene Tonn, analyst]

Just coming back on the door actuation systems and congratulating on your success in terms of sales, which you've shown so far, but you could give us some, let's say, update on the tenders you see for this product, let's say, also in Europe and the timing when we may -- I think we have one major order already. And when we could expect the some further news flow on that side also for the business. Outside Asia, that would be my first question. Secondly, looking at Powerise performance in North America, I think there had been a particularly a little bit more in the first quarter, but as also in the second quarter, some negative effect from, let's say, this strike induced, let's say, change in the product mix at U.S. production at the beginning of this year, whether this is still something which has said weighed on the second quarter and whether you expect, let's say, an improvement for the second half in North America in this regard? And thirdly, I think probably not just, let's say, as an update question. From the shift of kind of tactical shift a bit switch back to ICE-powered vehicles currently versus the electric cars. Any impact on your sales mix, which you experienced in some of the markets? Or is it really that you are let's say, so broadly positioned with all the car manufacturers in our platform being powertrain agnostic with your product that this is nothing which is affecting your business at all?

[Michael Büchsner, executive]

Thank you very much for your questions, Marc-René Tonn. And I'll give you the starting point as well here with your questions, and then I would hand over to Stefan to add some flavor. So in terms of door actuation, outside of Asia Pacific, for sure, the Asia Pacific region was the starting point. Why is that? The tricky thing about door actuation systems is that you don't only need the actuator, but you also need the software, the sensor systems in the car, and the ECU in order to make it happen because you need to have obstacle detection when you open and close the doors. And this is something which -- and we all know that in terms of experimenting, Tesla is very open, but also the Asians are very open in bringing new technologies in, may be more open than the one or other traditional OEMs. And this is why it started off with Tesla and it started off in Asia Pacific. And this is why Geely and also Hyundai are frontrunners here. And then in the Western world, it's predominantly Tesla.So in Tesla, it's also a nice feature in the Molex and this is something which enjoys very good growth rates. And then on top of it, there is, for example, Bentley, where we are in, there is Rolls-Royce where we're in, there is also the area of electric cars, for example, in the Revin truck has the door actuation, for example, then we won the big contract with BMW lately, which we've been talking about a couple of times, which is outstanding. Then General Motors in terms of the Cadillac brand, they are in the sourcing process as well as Mercedes and Mercedes will sell to us later this year. So that means a lot of things are going on. There is a good reason why the Western world OEMs are perceived to be a little more cautious and conservative in terms of the technical maturity of new technology. So that's why the Asians and also Tesla were front-runners here. However, the sourcing panel indicates how successful this technology will be in the future. And we are here as technology leaders. And this is the position which we, at the end of the day, want and will maintain. You also talked about the Powerise in North America, you're absolutely right. The strike topic was kind of leaning into the first calendar quarter of this year. This was kind of an effect, which we still saw in January and February. And we expect for the rest of the year that this kind of effect flats out. There was an effect which happened to be impacting our numbers in the first half of the year. And in the second half of the year, we see this kind of effect of the strike activities of Detroit 3 when it comes to Powerise sales. And then ICE versus electric cars, and this is the beautiful thing about Stabilus. Stabilus is independent of the driveline. So that means whether it be an electric vehicle or a combustion engine. The most important thing is that our products are bought by companies, by customers who are eager to have comfort in their car. So it's rather the upper segment car for the upper segment car, also the $100 or more does not matter too much, but people want to have this comfort feature. That means our products, be it the door actuation or be it the Powerise systems enjoy good growth rates. And coming back to the indication already given earlier to action, we see also in the multiyear planning a good and steady growth beyond market growth with that product. Stefan, anything to add from your perspective?

[Stefan Bauerreis, executive]

Yes, Bret, one flavor on what you said, how we are positioned e-mobility versus combustion engine. So that is exactly what you said a very important message that Stabilus is completely independent with this product from -- if you go with this or in that way, and we are very broad positioned. I said that with the question from Accor in the Asia Pacific. The same is also for all the other regions. And this is also not limited either on the combustion engine or the e-mobility. At the end of the day, the main question is the wish of comfort of the end customer and what they want to have. And there, we see a continuous, let's say, big trend, obviously, more and currently a higher trend because they still have to recover some way in Asia compared to the other regions. But this is at the end of the day, that is the key, what the end consumer currently is asking for. And as we believe on that the megatrend Comfort, the megatrend reshoring, the megatrend industrial automation, all those mega trends supporting Stabilus, not only the automotive business, obviously, but also on the other one will stay and will not disappear. So also here, we do not see a trend of getting down in the demand of Powerise due to the fact that currently, perhaps e-mobility is a little bit less on mode than other ones. So the very key question is what is the key decision regarding comfort, the end consumer, what he wants to have in the strike area. In U.S. and in America to come back to that region. What we saw is that the car producer and that is obviously different to what we have in Europe where you go there and ask exactly what you want to have in a car. So there, the cars are mostly preproduced. There was a certain period where they started to not bring in all the comfort gaming into the cars. They now are selling, but also this is a trend which is only on a short-term perspective from our perspective and will change and we'll come back to the norm.

[Operator]

And the next question comes from Yasmin Steilen from Berenberg.

[Yasmin Steilen, analyst]

I have 2 questions left. So coming back to DESTACO, thanks of all for the first indications on DESTACO and the confirmation of the 20% EBIT margin target. However, as our Industrial Automation business down some 10% year-over-year in the second quarter. Could you share some color on the development of DESTACO in the second quarter, and I was a little bit late in the call. So just I apologize if you've mentioned this already. And also in terms of the indications for the business in the current quarter would be highly appreciated. I mean you mentioned already the postponement of some of the projects, but any color would be very helpful. And the second one is on one-offs. So after finally closing the deal, is there any update you can share in terms of the expected integration costs?

[Michael Büchsner, executive]

Thank you very much for these questions. I will also give you a starting point with some general comments before Stefan kicks in. In terms of DESTACO development for the second half of the year, you know the number, which also was mentioned in the presentation was EUR 206 million, which at the end of the day is a solid number and which actually is also the number to strive for. We see coming back to our business plan, good growth opportunities also for the years to come. We actually saw, and this is what Stefan was mentioning, some delays of a project, which was driven predominantly by one project where they did some conveyor belts for the industry or for the assembly industry automotive. And this project kind of was shifted from the first quarter of this calendar year to the second quarter of the calendar year, and this is something which they are currently dealing with. So other than that, we see, at the end of the day, a robust second half of the year also with overall, the EBIT number outlined by Stefan. For sure, now we are in the first 30 days in this new relationship. So 1 month in this relationship, we are actually in the midst of our multiyear planning process. So that means we are still working on pulling all the data together and haven't had a chance to look in all corners of the house. But from today's perspective, we see a very stable position. And only this project, which was delayed a bit, which is in the nature as many of OEMs and customers these days try to push out some investments from the first to the second quarter. However, in terms of DESTACO, the wonderful thing is they are not stuck with one product strategy. They're in multiproduct segments active. Half of their business is related to assembly lines, which at the end of the day, supply parts to automotive. That means they are assembly batteries, assembly of components, their assembly of engines, their assembly of electric equipment, equally spread also between combustion engines and electric engines. So independent of the driveline that's very positive for us. And then also the vast majority, more than 50% of their business is actually reaching out into consumer goods and areas of the food and packaging industry, which seems and appears to be very robust also in crisis times. And with the huge portfolio, they kind of flatten out different economic situations in different regions and at the end of the day, guarantee stability. And this is something which is extremely important to us. Coming back to your other question, you mentioned the one-off means integration costs at the end of the day. We always said that the integration costs would be in the area of EUR 5 million to EUR 10 million and sure that was calculated as on day 1, which we assume to be earlier than it really happened because if you remember, we had to push out the day 1 a bit. But at the end of the day, this leads to a little less one-off costs. We have this year, we'll push some of these activities of integration predominantly on the IT side, a little into the next fiscal year for us. The bottom line is we are well on track and are monitoring these costs and they will not dilute the profitability of next year at all. That's, I think, the important message right, Stefan?

[Stefan Bauerreis, executive]

Exactly. So the integration cost, as you said, ranges between EUR 5 million and EUR 10 million. We still will remain in that range. So we said in our first planning that we have overall more than the EUR 10 million in the full scope or split it over 2 fiscal years. We said that this fiscal year, it will be a little bit less than SEK 10 million. So still the range between EUR 5 million and EUR 10 million is valid. For sure, as we have 1 month later to start not everything in our detailed project plan then can be stretched in 1 month less. So there will be some activity not postponed in terms of to say we want to save money. That is not the point, but that is following exactly our project and integration plan. And as it just started 1 month later than originally planned. So therefore, also, there will be a slight change in the overall timing. But that is due to the fact that we started a little bit later. But it will be obviously a little bit less than the EUR 10 million that is for sure. And these are the points that we will see. And the other point, Michael explained already about the development of the business, we confirm the 20%. So I think that is, first of all, a very important message that we bring. So it's a very stable business. And the good thing is this trend of what we saw in some of those smaller activities with the minus 10%, that is what you cannot extrapolate exactly on the DESTACO side. So therefore, very stable. And we will make, once again, excluding the integration costs, obviously, we have the key target to make the 20%.

[Operator]

So at the moment, there seem to be no further questions. So I will leave the line open for a couple more seconds. [Operator Instructions].

[Andreas Schröder, executive]

If there are no further questions, thank you very much to all of you, and I wish you a successful day and a good remainder of the week. Thank you very much. Bye, everybody.

[Stefan Bauerreis, executive]

Thanks from my side. Bye-bye. Thank you.