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1. Company Snapshot

1.a. Company Description

HELLA GmbH & Co. KGaA, together with its subsidiaries, develops, manufactures, and sells lighting systems and electronic components for automotive industry worldwide.It operates through three segments: Automotive, Aftermarket, and Special Applications.The Automotive segment offers headlamps, rear combination lamps, car body and interior lighting products, and radomes; and body electronics, energy management, lighting electronics, and power steering solutions, as well as driver assistance systems and components, including sensors and engine compartment actuators.


The Aftermarket segment produces and sells automotive parts and accessories primarily in the areas of lighting, electrics, and electronics; and provides workshop solutions in the areas of diagnostics and calibration, as well as various services for wholesalers and workshops.The Special Applications segment develops, manufactures, and markets lighting technology and electronic products for special vehicles comprising construction and agricultural machinery, buses, caravans, and marine vessels.The company was formerly known as HELLA KGaA Hueck & Co. and changed its name to HELLA GmbH & Co. KGaA in October 2017.


HELLA GmbH & Co. KGaA was founded in 1899 and is headquartered in Lippstadt, Germany.HELLA GmbH & Co. KGaA is a subsidiary of Faurecia S.E.

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1.b. Last Insights on HLE

HELLA GmbH & Co. KGaA faced challenges in its recent quarter, with a significant decline in earnings. The company's EPS plummeted to €0.40, down from €1.46 in the same period last year. Revenue also contracted by 2.3% to €1.98 billion. Weak profitability and declining sales are concerning. According to a recent report, the company's problems extend beyond weak profit, suggesting deeper issues. The second-quarter earnings report revealed a notable deterioration in financial performance.

1.c. Company Highlights

2. HELLA's Q3 FY2025 Earnings: A Mixed Bag

HELLA's financial performance for the first nine months of FY2025 was a mixed bag, with revenues coming in at EUR 5.868 billion, a decrease of 1.1% versus the prior year, or a 0.4% increase when adjusting for FX rates. The company's Electronics business continued to grow, with an 8.3% increase in the first nine months, driven by the Radar business and energy management product center. However, the Lighting business was down 8.4% due to the end of larger projects and reduced volumes on some programs. The company's EPS came in at EUR 0.76, beating analyst estimates of EUR 0.65. The operating income was EUR 208 million, with a net income of EUR 108 million.

Publication Date: Nov -08

📋 Highlights
  • Sales Growth Adjusted for FX:: 0.4% increase vs. 1.1% overall decline to EUR 5.868 billion.
  • Electronics Business Growth:: 9.5% organic increase driven by Radar and energy management.
  • Lighting Business Decline:: 7.3% drop due to project closures and reduced production volumes.
  • Net Cash Flow Improvement:: EUR 68 million, up EUR 76 million from prior year via reduced CapEx.
  • Q3 Order Intake Momentum:: Strong growth in U.S. and Asia, with significant program wins globally.

Segment Performance

The Electronics business was the bright spot, with a 9.5% organic growth rate driven by the Radar business. In contrast, the Lighting business was down 7.3% due to the end of production on some programs. As CEO Bernard Schaferbarthold noted, "Our Electronics business continues to grow strongly, driven by our Radar business and energy management product center." The Lighting business, on the other hand, is undergoing a transformation program aimed at improving profitability.

Cash Flow and Outlook

The company's net cash flow improved by EUR 76 million to EUR 68 million, driven by reduced CapEx and an increase in factoring. HELLA's outlook for sales is in the range of EUR 7.6 billion to EUR 8 billion, with an operating income margin of 5.3% to 6% and a net cash flow of at least EUR 200 million. Analysts estimate revenue growth of 1.5% for next year.

Valuation

HELLA's valuation metrics suggest that the stock is trading at a premium, with a P/E Ratio of 29.38 and a P/S Ratio of 1.13. The company's ROE is 9.92%, and its ROIC is 5.12%. The EV/EBITDA ratio is 8.74, indicating that the company's enterprise value is roughly 8.7 times its EBITDA. The Dividend Yield is 1.16%, and the Free Cash Flow Yield is 1.8%.

3. NewsRoom

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We Think That There Are More Issues For HELLA GmbH KGaA (ETR:HLE) Than Just Sluggish Earnings

Nov -15

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Automotive Lighting Systems Market Innovation Report, Q3 2025 Featuring Koito Manufacturing, Valeo, HELLA, Stanley Electric, and Marelli

Oct -22

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HELLA GmbH & Co. KGaA (ETR:HLE) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?

Oct -21

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HELLA GmbH KGaA's (ETR:HLE) Problems Go Beyond Weak Profit

Aug -01

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HELLA GmbH KGaA Second Quarter 2025 Earnings: EPS: €0.40 (vs €1.46 in 2Q 2024)

Jul -27

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HELLA Heads To Pikes Peak With Robb Holland, a Porsche 911 GT3 RS, Cayman GT4 RS, Race Sponsorship & Special Awards

Jun -19

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This Gen X entrepreneur launched a multimillion-dollar business with $2,500 on a credit card—He ditched his 9-to-5, and now works with Disney and Delta

Jun -01

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HELLA GmbH KGaA First Quarter 2025 Earnings: EPS: €0.19 (vs €0.57 in 1Q 2024)

May -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.68%)

6. Segments

Lighting

Expected Growth: 5.5%

HELLA's 5.5% growth in Lighting is driven by increasing demand for energy-efficient LED solutions, rising adoption of advanced driver-assistance systems (ADAS), and growing electrification of vehicles. Additionally, the company's strong market position, innovative product portfolio, and strategic partnerships contribute to its growth momentum.

Electronics

Expected Growth: 6.5%

HELLA GmbH & Co. KGaA's 6.5% growth in Electronics is driven by increasing demand for advanced driver-assistance systems (ADAS), electrification of vehicles, and rising adoption of autonomous driving technologies. Additionally, growing sales of electric and hybrid vehicles, as well as increasing focus on vehicle safety and connectivity, contribute to the segment's growth.

Lifecycle Solutions

Expected Growth: 5.8%

HELLA's Lifecycle Solutions segment growth of 5.8% is driven by increasing demand for advanced driver-assistance systems (ADAS) and autonomous driving technologies, as well as growing aftermarket sales. Additionally, the company's strategic partnerships and investments in digitalization and electrification are contributing to its growth momentum.

Elimination of Intersegment Sales

Expected Growth: 0.0%

HELLA GmbH & Co. KGaA's elimination of intersegment sales with 0.0% growth is driven by stagnant internal sales, lack of diversification, and inefficient resource allocation. This indicates a need for strategic restructuring, improved operational efficiency, and enhanced product offerings to stimulate growth.

Other

Expected Growth: 5.2%

HELLA GmbH & Co. KGaA's 5.2% growth in 'Other' segment is driven by increasing demand for advanced driver-assistance systems, growing electrification of vehicles, and expansion into new markets. Additionally, strategic partnerships and acquisitions have enhanced the company's product offerings and capabilities, contributing to the segment's growth.

7. Detailed Products

Lighting

HELLA offers a wide range of lighting products for the automotive industry, including headlamps, rear lamps, and interior lighting.

Electronics

HELLA's electronics segment offers a variety of products, including body control modules, sensor systems, and battery management systems.

LifeCycle Solutions

HELLA's LifeCycle Solutions segment provides aftermarket products and services, including repair and maintenance solutions.

Special Applications

HELLA's Special Applications segment offers customized solutions for non-automotive industries, such as agriculture, construction, and marine.

Software and Services

HELLA's Software and Services segment offers software solutions, data analytics, and consulting services for the automotive industry.

8. HELLA GmbH & Co. KGaA's Porter Forces

Forces Ranking

Threat Of Substitutes

HELLA GmbH & Co. KGaA operates in the automotive industry, which is characterized by a moderate threat of substitutes. While there are alternative products available, they are not significantly different from Hella's offerings, and the company's strong brand recognition and quality products mitigate the threat of substitutes.

Bargaining Power Of Customers

HELLA GmbH & Co. KGaA's customers, primarily automotive manufacturers, have limited bargaining power due to the company's strong market position and the complexity of its products, which require significant investment and expertise to develop and manufacture.

Bargaining Power Of Suppliers

HELLA GmbH & Co. KGaA's suppliers, primarily raw material providers, have moderate bargaining power due to the company's dependence on high-quality materials and the limited number of suppliers that can meet its quality standards.

Threat Of New Entrants

The threat of new entrants in the automotive industry is low due to the high barriers to entry, including significant investment requirements, complex regulatory frameworks, and the need for established relationships with automotive manufacturers.

Intensity Of Rivalry

The automotive industry is highly competitive, with several established players competing for market share. Hella faces intense competition from companies such as Bosch, Continental, and Valeo, which drives innovation and investment in research and development.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.54%
Debt Cost 9.01%
Equity Weight 71.46%
Equity Cost 9.73%
WACC 9.53%
Leverage 39.94%

11. Quality Control: HELLA GmbH & Co. KGaA passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Pirelli

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Value: 7.6

Growth: 3.8

Quality: 5.5

Yield: 6.9

Momentum: 6.5

Volatility: 8.3

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CIE Automotive

A-Score: 5.8/10

Value: 6.6

Growth: 5.4

Quality: 2.6

Yield: 6.2

Momentum: 5.0

Volatility: 9.0

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Autoliv

A-Score: 5.7/10

Value: 5.4

Growth: 5.7

Quality: 5.2

Yield: 6.2

Momentum: 6.5

Volatility: 5.0

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HELLA

A-Score: 4.8/10

Value: 3.6

Growth: 5.7

Quality: 4.6

Yield: 2.5

Momentum: 3.0

Volatility: 9.3

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Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

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Knorr-Bremse

A-Score: 4.5/10

Value: 3.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 4.0

Volatility: 6.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

80.9$

Current Price

80.9$

Potential

-0.00%

Expected Cash-Flows