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96. Bull, Bear & Beyond – PWO Group: executive interview
7 Plays7 months ago
In this interview, PWO Group CFO Jochen Lischer gives an overview of the company and comments on the main events and milestones in its recent transformation. He also discusses market dynamics, particularly the growth potential for lightweight engineering, as well as the competitive landscape. Lastly, Jochen talks about the group’s ambitions for the longer term.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
About Edison:
Edison is a content-led IR business. We believe quality investment content should inform all investors, not just brokers. Our mission: engage and build bigger, better-informed investor audiences for our clients.
Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
Original interview published on 16/06/2025 and reposted as a podcast
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Transcript
Introduction to PwO Group
00:00:07
Speaker
Hello everyone and welcome to Addison TV. I'm Johan van der Hoven, one of the equity analysts at Addison Group. Today we welcome PwO Group, the German specialist in lightweight metal components for the automotive industry.
00:00:22
Speaker
My guest is CFO Jochen Liescher. Welcome Jochen. Welcome Jochen, hello.
PwO Group's Industry Role and Innovations
00:00:28
Speaker
Can you please start with describing how investors should look at PwO Group?
00:00:34
Speaker
Yes. We are a global player in the mobility industry, shaping the environmental friendly mobility of the future through innovation. To this end, we engineer and manufacture climate friendly lightweight metal components, primarily from steel, with which we constantly push the boundaries of what is technological possible.
00:00:57
Speaker
Our business model is completely independent of combustion engines, allowing us to focus all our resources on the future.
Decarbonization and Business Strategy
00:01:07
Speaker
Climate change is and will remain the most important challenge of our time.
00:01:12
Speaker
By ambitiously decarbonizing our business, we are supporting our customers in achieving their own climate targets. And PWO is a classic example of a German medium-sized company that can pursue a long-term global growth strategy without thinking in the short term.
00:01:31
Speaker
On the other hand, medium-sized also means flat hierarchies. We are able to react quickly to opportunities as they arise. And last but not least, we are committed to a shareholder-friendly dividend policy so that our investors anticipated participate in the success of the T.W.O. Group.
00:01:54
Speaker
Thank you, Jochen, for this introduction of P.W.O. Group.
Growth and Financial Performance Since 2020
00:01:58
Speaker
What were the main events or milestones in P.W.O.' 's recent transformation? Well, since Carlo Lazzarini took over as CEO in 2020 and I took over as CFO in 2023, we have focused the PwO group strictly on internationalization, growth and financial strength.
00:02:21
Speaker
Our increased sales, our expanded new business and our improved financial ratios are clear evidence of this. As CFO, I am particularly proud of the significantly reduced net debt ratio.
00:02:35
Speaker
and the clearly positive free cash flow. We are steadily refining our control mechanisms, enabling us to permanently reduce the capital required for our business and to effectively respond to market changes.
00:02:51
Speaker
Today, I can say the future expansion of our market position is planned, budgeted and financed in detail.
Lightweight Engineering in Automotive
00:02:59
Speaker
PwO Group is focused on the automotive market. Can you please describe the market dynamics and particularly the growth potential for lightweight engineering?
00:03:10
Speaker
Lightweight engineering reduces the weight of vehicles and thus makes all vehicles, regardless of the drive system, more environmentally friendly. That is why demand for these components and systems is always above the market average.
00:03:27
Speaker
However, in the mass market, where high volume series are awarded, lightweight construction is not an absolute objective at any price. What is key is that lightweight solutions can be produced economically.
00:03:43
Speaker
And this is where we are particularly strong because our sales, development and production departments work very closely together and keep an eye on the entire production chain from day one.
00:03:57
Speaker
So how do we select new orders? We manage our growth in a capacity optimized way. First, our aim is to fill existing capacities with the most appropriate orders.
00:04:12
Speaker
Second, we only invest in new presses or production halls if there is a lasting prospect of them being used to full capacity with profitable orders.
Market Competition and Challenges
00:04:24
Speaker
Now that we have a look at the market dynamics, who do you see as your main competitors? We have a very broad portfolio of more than 2000 product solutions.
00:04:35
Speaker
Consequently, we meet different competitors in the vi various market segments. For example, in electric motor housings, the German private companies Ernst and Erdrich have a significant market position.
00:04:49
Speaker
In the caddies of body components and instrument panel carriers, On the other hand, we find well-known international companies such as Penteler, Kirchhoff and Gistam. And in other fields such as seeds, our customers still have their own in-house production.
00:05:08
Speaker
Going to the last question of this interview, and of course we also want to look forward. What PwO's ambition on the longer term?
Future Revenue Goals and Current Challenges
00:05:18
Speaker
On the longer term, the low level of unit sales in the global market is currently causing a small pause in our growth. We are using this period to prepare for the planned leap forward over the next five years, in which our international operations will continue to be quote the growth drivers.
00:05:37
Speaker
By 2029, we want to set our sights firmly on the 700 million euro revenue mark with good profitability. And the quality of the balance sheet is planned to remain high and growth is to be financed internally.
00:05:53
Speaker
But on the short term, of course, the tariff discussion is impacting our planning as well, especially in Mexico and Canada, where we are locations.
00:06:04
Speaker
We are impacted by the tariffs, obviously. But as of today, it's not clear how much it will be. And globally, as the US government is changing their decisions from the today, it's not yet shown and seen how this will be impacting our business.
00:06:25
Speaker
Excellent. Thank you very much, Jochen Liescher, for providing us with more insights about PwO Group and his long-term ambition. Thank you very much for joining me today.
00:06:37
Speaker
Thank you very much, Jochen, as well. And thank you for the chance to presenting our company in this interview.