Thank you very much, and a warm welcome from my side. Michael Pistauer, my name, Co-CEO and CFO of Montana Aerospace. I will guide you, together with my colleague, Kai Arndt, Co-CEO of the company, through today's Earnings Call for the First Quarter, 2024. We're very proud to present, today's quarterly results, and, happy to answer then any questions after the presentation. Let me directly jump into the key financial highlights of the first quarter, 2024. And here you see that, again, we can proudly present the growth within the most crucial KPIs, so like net sales and EBITDA or net income. Let's start with net sales. Here we have a growth in comparison to last year's first quarter of, again, double digits, 12% to almost EUR 400 million for the first quarter.
Let me explain it like this: we had the growth exactly at the right areas, exactly there where we wanted it. This is the reason when you have a look at the Adjusted EBITDA, why we grew over proportionately on the Adjusted EBITDA. Strong growth came, as you will see later in the details, in the segment aerospace, mainly, followed by energy. And these are areas where overproportional EBITDA is also resulting, ending the first quarter with EUR 38.2 million Adjusted EBITDA, while reflecting a growth of over 60% on a year-on-year change. Very proud, and according also our guidance, a positive net income. We guided for 2024 on a positive income for the total year, but we show it in comparison to last year, also in the first quarter.
With 2.7, it's a clear growth in comparison to the negative Net Income in 2023. CapEx spend, more or less the same, I would say, level of what we had last year. Absolutely in line with our guidance and the internal plans for 2024. As said, besides the capacity expansion in energy, all major CapEx projects are finished or closed, either in the ramp-up or are already in the production phase, in the serial production, and therefore, in tendency, in comparison to the last year's, a much lower CapEx is resulting, which is sustainable capital maintenance and, as said, expansion in the energy segment. Trade Working Capital, and please note that Trade Working Capital, total assets, Net Debt, as shown here on the slide, are always compared to the last quarter, 2023.
Yes, there is an increase in the Trade Working Capital to a level of EUR 346 million, but if you compare it to the first quarter 2023, where the amount was EUR 391 million, you see what we guided. That since the year 2022, we gradually, continuously reduce the Trade Working Capital and streamline it to a more normal level in the different segments, where we think that we have then to finalize, I would say, find the right levels by the end of the year 2024, and gradually develop in the right direction.
Total assets, also the same picture, more or less the same amount, but in comparison to last year, due to the refinancing, the structuring of the balance sheet, we reduced approximately EUR 200 million of total assets, balance sheet sum, less debt, to be fair. And in comparison to last year's first quarter, which was at the level of EUR 2.12 billion, we see that around EUR 200 million total assets were reduced. The net debt position slightly increased or increased in comparison to last quarter, 2023. So last year's final numbers. But we had some, I would say, optimization programs in place by the end of the year. In comparison to last year's first quarter, the net debt was, those days, EUR 391 million.
We see the positive cash flow over 12 years running time, but with now a net debt of EUR 322 million. So therefore, we reduced on a year-to-year basis, around EUR 70 million on net debt position, reflecting the positive cash flow structure of our business in general, and also then here in the numbers in detail. Free cash flow. Yes, we had a very negative free cash flow in 2023 due to optimization topics which were taking place in the end of 2022. As said, also, some of it was taking place at the end of 2023.
Therefore, a negative Free Cash Flow for the first quarter, which will level out over the next quarters to come to end up with, as our guidance is clearly indicating, a positive Free Cash Flow for the total year, which was already positive also in the last year, 2023, but on a higher level to be expected for 2024.... Let me shortly show the total numbers in a, I would say, time row. On the comparison on a year-to-year basis, here, the growth plan of Montana Aerospace as a group clearly is seen. We grew Net Sales over the last three years or four years, by 134%, another 12% in the last year, comparison.
What is more important, and what we are really proud on, and what we always guided, is that with every single euro sales, additionally, we over proportionately fill not only our capacities, but earn more EBITDA. And therefore, this is resulting in a not only better margin level, but therefore also in a, I would say, over proportional growth of EBITDA, which was almost tripling in the last three, four years, and over 60% growth in the last year in comparison to first quarter 2024. Saying that, I would like to hand over to Kai, giving you more details on the first segment, our most important and name giver, Aerostructures, to give you some details and background and also development discussion on this segment and with their customers and other tendencies. Please, Kai.
Yeah, good morning from Canton in Georgia. So you might know in Canton, we have the origin of the Aerostructures segment, and we are operating roughly 20 extrusion presses here. I hope the connection will be stable over the call. It's important that I'm here because I can see by hand what is the current demand coming from the suppliers, who are delivering to the big OEM. So here we see on a day-to-day basis, what is happening in terms of the demand, from the big OEMs, but also from the suppliers in the market. And I'm pretty sure, some of your questions will be related to, what we see in terms of the rate 737, 787, but even also for Airbus. So I will come back later to this one.
We are starting in the Aerostructures segment with a picture, and you might say, "Well, okay, it's a bit boring and maybe not too sexy what you see here on the picture." But this picture, I think, explains in a very simple way what we think is our USP for the market. So every single structural part you see on the picture is built by us. So that means that we extrude every of the parts, we machine every of the parts, we surface treatment every of the parts, and we also assemble then the complete floor structure for the A350 freighter. So that's the latest, the big package we won, and we delivered in time to our dear customer, Airbus Aerostructures.
So this picture shows what we call the USP of Aerostructures, and what we think why we get more and more work packages like this into our company. So that's a real success story, and this is why I thought this picture is worth to show what we do and why we are successful winning new packages. And based on this USP, also this year, we won some quite significant packages again, and this is why we thought it's a good start for this presentation. What does it mean in terms of numbers? If we go to the next page. Definitely, you see the good development in the Aerostructures segment.
We are proud that we are in line with our strategy, even though the times are really challenging and giving us some headaches in terms of what is coming from the big OEMs in terms of rate. And it's not the demand I'm focusing on, it's more the volatility of information you get. So it's very unstable, and the communication about what is really demanded over the year is not really concrete, and that's giving us some headaches. I will also come to this a little bit later. You see the year-on-year development, as mentioned by Michael Pistauer already. So the growth in net sales is in line with what we guided, but even more important, you see the EBITDA development, and this is definitely based on the volume.
If the volume is kicking in, you see that our industrial model is delivering. So the performance in terms of what we deliver is quite significant and it is good. Unfortunately, as mentioned, with the rate developments in the market, we definitely see that in the second quarter and maybe also across the year, we don't see the big ramp up in the 737. In the last call, we already mentioned that we were more conservative in our guidance, so it will not hit us as hard as maybe others, but there will be definitely also an impact on our side. What means impact?
It means that in terms of Net Sales, currently, if we don't mitigate the impact, we see an impact of, let's say, EUR 30 million-EUR 60 million over the year in Net Sales. But as we are very diversified and we still have energy and also the automotive sector in our portfolio, we definitely think that we can mitigate the impact on the EBITDA to a certain extent. So that's very good. But for the Net Sales, we definitely see a drop in terms of the demand from the big OEMs. This is what we will manage over the year, but I'm quite positive that we will find mitigation actions to overcome this impact. This is, for me, short term.
As said, I think we are completely in line with our strategy and for investors, and I'm still also an investor in, in our company. For me, mid and long term, we are, we are definitely in good shape and, and in line with the strategy. And, I also see for the next years to come, with the, with the additional packages we win, that, we will definitely stay in, in our guidance for the next years to come. So I think that's quite a positive outlook. I'm expecting some more question in terms of the rate developments in the Q&A session, but for the moment, I think, the numbers speaking for itself and definitely confirming, and it's a testimony of our strategy. Thank you.
Let me continue with the other two segments, but before we start with the other two segments, we want to reiterate that our midterm and long-term strategy is clear, to develop more and more into a pure-play Aerostructures. This is the emphasis we are relying on. Even so, we are very proud also of the other segments. And as you saw, also the fastest growth, the most growth, and the fastest over proportional EBITDA is coming out of Aerostructures. E-Mobility, on a general blue sky, a slight cloud, I would say. Yes, we had a not very strong Q1 in sales, also in comparison to the other quarters of the last years in terms of margin or EBITDA. However, to be fair, we also guided for this year to be a quite difficult year for E-Mobility in general.
And here, in comparison to our guidance and also our internal plan, the first quarter was more or less in line with our net sales expectation, and slightly above even what we expected concerning the Adjusted EBITDA. So, we expect slightly increasing and stronger market demand. We see it already in our order intake from the second quarter onwards, and therefore, keep on also here to guide concerning the profitability and the sales of E-Mobility as guided in the previous sessions and discussions. The reason for the, I would say, slightly lower sales in comparison to the last year is mostly the weakness of our customer industries and the shift into the second and third quarter of their demand. E-Mobility, we discussed. Energy, constantly strong. We continue to produce what capacities allow. We increase steadily the capacities.
This is also a good portion out of the CapEx, which we showed. Why? Because the market demand is unbroken, extremely high, and every single ton of production is already pre-sold and sold. So the only constraint is the speed of the capacity increase, which is taking place. So therefore, you see also a constant growth. Again, a growth of a very good quarter 2023 to an even better quarter 2024. Not only in sales with ±6%, but mostly again, also with the EBITDA, with a 14% growth to a good level, over 6% margin level or EUR 8 million, which we are quite proud of it. We're expecting Energy segment to continue this path continuously, also for the next quarters, quite constantly.
As said, in the meantime, over the last years, developed very stable and reliable demand structure and a strong tailwind. Some KPIs of the company. Operating cash flow and free cash flow negative in the first quarter 2024, as announced in the overview. Reason was some, I would say, optimization programs taking place in the last quarter 2023, which you see here on the slides. But as said, also in comparison to what was in 2023, in the first quarter, a highly positive impact, so much positively developed. And we continue to guide also for a free cash flow for the full year 2024, on a much higher level than what we have seen in 2023.
Trade Working Capital, also as already explained, EUR 391 in comparison, 2023, reduced right now to a level of EUR 346. We continuously develop more or streamline our Trade Working Capital. Two topics around or behind it, the reasons behind it, on the one topic is ramp up is taking place, so the inventory ready to be produced is produced, therefore, it's reducing also Trade Working Capital levels. Better conditions also with customers and, suppliers, but mainly also then also optimization of our own supply, and this at the end, results in a better portion of the quote, of Trade Working Capital in comparison to sales.
and very proud of it, as in our first quarter 2024, with the net income reflecting our clear guidance to be a very positive net income company, and the first step is done, I would say, with this quarter. Production performance, personnel expenses, other operating expenses more reflect the reasons why we have a proportional EBITDA growth. So in comparison to the performance or the sales, we have under proportional personnel expenses and all the other expenses, and therefore, the result is the positive net income. This in short terms, and this is more or less the usage of the existing capacity, so every single euro more sales is resulting in an additional over proportional growth of EBITDA.
Therefore, we want to end the very short presentation, which we are very proud to present those, I think, very positive numbers with our reiteration of the guidance. In general, tendency to more and more structure ourselves in a pure-play aerostructures company. 2024 numbers around EUR 1.7 billion on total sales. Adjusted EBITDA continuously at this level of EUR 180+ million, a positive Free Cash Flow on the full year basis, a positive Net Income continuously then to be shown and also for the full year, and the streamlining Trade Working Capital, where we think we have reached in a good portion at the end of 2024 for the different segments.
Outlook is already high, and announced, yes, there are topics around in a very volatile discussion on build rates and the OEMs, but still for the midterm and long term, there is a extremely strong demand for airplanes. The backlog is enormous. There's a massive need, however, to build more planes, and therefore we continuously also guide for around EUR 2 billion on total sales for 2025, and around above EUR 250 million Adjusted EBITDA. Saying that, we would like to close the presentation part of this earnings call and over to the moderator, and I'm happy to answer your questions.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, then you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Phil Buller with Berenberg. Please, go ahead.
Oh, hi, good afternoon, guys. Well done on the Q1. I've got three questions, please. The first one is for Kai. I fully understood on the 737 situation, that, that comes as no surprise, but the, the comments we're mentioning demand volatility from the big OEMs more generally. So I guess that would suggest it's not just the MAX. And I understand this is all temporary, but perhaps you can talk us through what you're seeing on the ground in recent months on the 787, the 777, and perhaps we could go through the same process on some of the key Airbus programs as well. I guess it's key—it's helpful to understand what has got better or slightly harder on any program in particular, please. That's question one. Thanks.
Yeah, thanks for the question, and of course, this question is no surprise. Yeah, so what do we see? And as mentioned, sitting here in Canton, I'd like to give you some perspective what that means. So we are roughly 12 months before the parts are getting installed in the final assembly line or delivered into the final assembly line. So we definitely see what is going on in the demand market, and then the volatility is extreme. So there are some of the suppliers are still demanding on a, let's say, 40+ rate for the next 12-18 months, and some others are around 20.
So that's what we see, a strong volatility in the market, and I think that's due to the fact that we don't have the clear communication to the suppliers from the big OEMs, what is really expected. So what do we see in terms for this year? Because we are also machining and assembling parts, and that there we see the more recent demand. I think we see that we will end up with an average in the low 30s for the 737. Boeing also announced that the 787 rate increase will not come as steep as announced a couple of months ago, so we also see an impact there.
I think they guided in the for the full year, 80, and now they, they reduced it to somehow 60 in terms of the deliveries. Deliveries not mean that we have to deliver from our side. So deliveries means really aircraft, and this is, of course, going along with inventory, how they manage the supply chain, how much inventory they build up, and I think in the Boeing call, you, you have seen how much inventory they built up already, and that means they want to stabilize the supply chain, and I can only support this initiative. We, we need that, otherwise we will fail at the industry to do the ramp up in 12, 18 months, and I'm pretty sure it will come like this. For Airbus... I think a different picture.
So there's a stable rate in A320. The, this A320 is, is running like, expected. For the moment, we, we also hear that there are some problems in the supply chain, which might cause some delivery delays in, in Airbus. But from the procurement side, we still see the demand as announced to us, for the full year. So there, there's really a stable, demand, except the wing areas, where we deliver from ASCO, the wing movables. And also there, we, we saw a drop in terms of the demand for the full year. But, overall, Airbus seems to be far more stable than, than Boeing, and I, I think that's also no surprise. You mentioned the other programs, and, you, you saw on the first picture I, I showed in the, in the presentation, A350, that's the A350 freighter.
So there we see, we see a steep increase in the demand, which is really good, and it's backing some of the or balancing some of the, the impact we see on the other programs. For the 787, we are mainly impacted in the US, for ASCO. But also there, there is an increase, but it's not as fast as maybe announced before. So that's in terms of the rate, what we see, and I think based on the fact that we control the complete supply chain from the very upfront end, I think we should have a very good overview what is really happening in the market. And then, this is also giving us the possibility to react and to manage our inventory on our side.
So it's definitely a difficult time to manage with the OEMs, and we are more or less in day-to-day talks with them to see how we can manage the situation and to make sure that we see the demand which is needed for the ramp up.
Thanks. Just to follow up on that answer, if I may. So it... Montana isn't the bottleneck, is that correct? You're ebbing and flowing based on the demands of the OEMs who have bottlenecks in the wider supply chain, as opposed to Montana being a bottleneck in some way more recently.
That's, that's-- I think that's my most favorite question of the day. Because we received recently from Airbus, from Boeing, from the first-tier suppliers a recognition of our delivery performance. I think we are in all of the KPIs. We are definitely not the bottleneck. It's vice versa. So we are getting awards for our quality and also delivery performance, and there is definitely no bottleneck in terms of what we deliver. As said, for the extrusion, there we see a quite well different situation in terms of demand, but we are delivering to our customers, and that's also one of the aspects why we see also that it's ending up in the financials.
Thank you. And my second question related to that, I guess, is: Since the last update, it now looks increasingly likely or imminent that Spirit is going to be acquired by Boeing and a small part by Airbus. So how should we think about your competitive positioning in the medium term? Is this ultimately positive news for Montana, in terms of the ability to win more work scope or an ability to look for preferable pricing or better contract terms? Or does it make it tougher in some way? Perhaps you can just talk us through the pros and cons of that development specifically, please. Thanks.
Yeah. Also, thank you for that question. I definitely see it positive. We have a good relationship with Boeing, and we also have a good relationship with Spirit. So, if there will be this takeover, as mentioned by you, I definitely see that positive. And that's clearly a sign that they want to more and more go into the direction to have really risk-sharing partners. So the partnership for the ramp up is key for them, and that's where we are coming into play. I think we are a reliable partner. We now have a big work statement with both OEMs, also with Airbus, and for all of our work statements, we are delivering. So that will give us a good position for future work packages.
In the discussion of the new, let's say, split between Airbus, Boeing, and the different sides, I definitely, definitely see that very positive, and I hope this will even strengthen our position.
That's great. Thank you. And just finally, I appreciate this is one for Michael. I appreciate there's no rush on the portfolio simplification topic, but the comment in the press release about targeting to streamline the portfolio and embark on this journey of becoming a more pure play aerospace company. I know that that's been the vision for a little while. But what's your current view on the financial market conditions for that simplification today? Thanks.
There are two aspects. The first thing is that you see that, by far, the strongest growth is out of the segment in Aerostructures. So therefore, by origin, by also these basic numbers, we simply develop more into the direction of Aerostructures as a pure-play. Nevertheless, yes, all of the announcements we did, I would say somewhere in last year starting, immediately also reflected in some, I would say, good feedback from potentially interested parties, whether it's over a potential carve-out for the IPO like we did at ASCO already. Think about it, energy segment, think about it also for the E-Mobility. And this is something we definitely look at very detailed, and therefore, also we guide in this direction. Like we say, for the midterm basis, we-...
We think that we develop more and stronger into a pure-play Aerostructures. So concerning the detailed timeline, we don't give any guidance. As you know, there is always some back and forth, but as we guided already in this direction, let me say it's something which is supposed to take more substance within the next 24 months.
Thanks, that makes sense. Thanks very much.
Maybe only one thing to add, Phil, is concerning the top topic of Spirit and Airbus. I would like to add another, and Boeing. I only want to add that right now, already, as mentioned in the last earnings call, we do have quite some effort and also some costs implied to secure our position, and I would say our receivables and inventory for Spirit. And so therefore, if there is a more stronger partnership between Spirit and, for instance, Boeing or even a takeover, it also would help us financially, immediately.
Very good. Thank you.
The next question comes from the line of Carlos Iranzo Pérez with Bank of America. Please go ahead.
Hey, guys. Good afternoon, and thanks for taking my questions. I actually have two. The first one is on e-mobility. If you can provide some color on what has been limiting growth on e-mobility through the last two, three quarters, and especially in Q1 2024. I'm following up on this one. How should we think about growth for the next three quarters of the year? Because we really need to see a material acceleration in growth through the next 3 quarters, if you still plan to deliver around EUR 200 million in 2024. And then the second one on ASCO, you have highlighted in the release supply chain issues. So could you expand a bit more on this, please? Thank you.
So let me answer the first question. For the second one, I would maybe hand over to Kai. E-mobility, it's a bit more, I would say, to be differentiated. We had already in last year the impacts out of, I would say, gray imports. As you know, we have a very long value chain there. Also in e-mobility, recycling the material, we then not only use the recycled material for ourselves, for our own products, but also partly sell the capacities to external market. And this market of, I would say, recycled material to external partners, was not existing in 2023. Why? Because there was, as we call it, gray imports out of maybe Russia or Iran or Turkey into the European market.
This, of course, not only ruined the total price, but also more or less made a very weak demand, and therefore, this business was not existing. E-mobility itself, within e-mobility, so the battery cases and the crash-relevant material, which is surrounding those battery boxes and cases for the mostly, I would say, U.K. and mostly German OEMs or tier ones, was performing very strong and is still performing very strong. So here the demand is very good. However, as said, this, I would say, recycling material and third-party business out of it was not very strong, and it's something we expected already for the first quarter. Also other industrial or other applications also of OEMs was not that strong, to be fair. However, it met our expectations, so we expect it to be the first quarter, quite weak.
We still guide for around EUR 200 million of total sales for the full year. So you see that also for the full year, we expect the growth in the second, third, and fourth quarter to come, and ± on an EBITDA basis, which is ± the basis of what we have seen last year. So long term, no change of it. It's only over the short term and someone hopefully, also there's a return of this recycling business, then we can reach above EUR 200 million back again, also in sales there. For the supply chain issues, I would like to hand over to Kai, and he can explain it a bit more in detail concerning ASCO.
Yeah. Thanks again. Unfortunately, the supply chain issues on ASCO are ongoing. As mentioned also in the last call, we see still some of the suppliers heavily struggling to deliver. This is creating a backlog in ASCO in terms of the delivery. On the other side, it sounds a bit bizarre, but if the delay increases are not coming like expected, that will help us, of course, a little bit on this side. Yeah, so this is the story of the supply chain, and if you are not having the supply chain completely under your own control, then you see, and you feel this impact from suppliers which are not reliable.
There, again, I can only emphasize that we want to control the supply chain in our own, and this means that we will continue to in-source as much as we can in our own portfolio. ASCO will be one of the areas which will benefiting a lot because these guys can all of the part they can in-source on our own portfolio, and then we will deliver out of the facilities we have in Romania, Vietnam, into the ASCO facilities. So that will be mid to long term, but the strategy, we are in good shape in terms of the timeline. So we started to project roughly six months ago.
We are in line with the timeline in terms of insourcing and bringing the parts which are causing some headaches today into our own system. In terms of the supply chain for the short term, we see a stabilization in Q2 and Q3. We even strengthened also our management in ASCO in terms of the supply chain. So we think that in Q2, Q3, the backlog we see we have today will be less.
Super clear. Thank you.
Yeah. Wait, let me, let me answer the second part of your first question. So the guidance on the quarterly basis for all three segments. And even so we don't have it here on the EBITDA basis and sales, at least on the slide here concerning the operating cash flow, which more reflects also the business development of our quarters. Usually, the first quarter is the weakest one. So therefore, the second and mainly the third and fourth quarter are the strongest one. You saw it in the year 2022, you saw it in the year 2023, and it's also to be expected by two out of two reasons in 2024. The one reason is that we continuously grow by ramping up in Aerostructures.
So therefore, new programs start, and therefore, more and more starts at the end result in more sales, and therefore, also better EBITDA. In mobility, I talked about it, that it's mostly the demand return in different areas, and also, then in many cases, also a strengthening of the industries we are delivering to. In energy, it's mainly concerning sales, that every month we increase slightly our capacities. The capacities are fully booked and fully sold. So therefore, every single more capacity gives us also a better sales possibility and also EBITDA. EBITDA is developing over the quarters, over proportionately, more or less in line what we have seen in 2022 and 2023. Why is this the case? It's also in certain fourth quarter, we invoice in many, many areas.
There, I would say, additional excess costs or changes, on a one-time basis, also the inflationary costs. This is then impacting over proportionately also the EBITDA. So therefore, that's how to read the first quarter. So if you compare it with the last years, you would also see that the first quarter was by far the weakest. Now, seeing this strong impact already in the first quarter gives us high confidence, to at least reach what we have guided.
Understood. Thank you.
As a reminder, if you would like to register for a question, please press star and one on your telephone. The next question comes from the line of Christian Bader with Zürcher Kantonalbank. Please, go ahead.
Yes. Yes, good day, gentlemen. I have several questions regarding your comment about the impact from the Boeing 737 MAX. If you are unable to, let's say, achieve any mitigation effect, when will we see this negative impact on sales? Will this be only in the last quarter, or will we see this already earlier? Then my second question is related to that. Can you maybe give some examples how you'd like to mitigate? And thirdly, how likely are those mitigation effects to be achieved? Thank you.
Thanks, Christian. So the impact, I guess, the impact will be seen already in Q2. As you know, in the first quarter, there were, in terms of the rates, from the supply chain, Boeing got high 30s rate income, so that means that they built up inventory, and I think they will now stop a little bit the high inflow, and this will have an impact in quarter two, overall of the supply chain. How big is the impact for us? I definitely guess that we will see a demand in the low 30s for the second quarter, too, so we will also see in terms of sales, we will see some impact.
On the other side, fortunately, as mentioned, we, we won several other packages and also outside of the pure aerospace sector, so we won some significant space packages, which are kicking in already in the second quarter. So how likely is it that we will mitigate some of the impact? It's very highly likely, likely, so that there, there will be some mitigations in place very soon, and that's, that's good for us. But the, I think the, the impact will be seen already in the second quarter and will, will last until the end of the year on this level.
But it's mostly on the sales and less on the EBITDA, so the profitability, we see less, at risk, in essence to sales.
Yeah, correct. That's true. And the reason for it is, it's also true that this is what I've mentioned. We want some significant margin packages, which are kicking in now and will help us to mitigate on the EBITDA side.
Okay, thank you.
The next question comes from the line of Beltrán Palazuelo with DLTV. Please go ahead.
... Hello, good afternoon, Michael, Kai, Marc. I have two questions. First of all, congratulations for the solid results. First question is regarding financial costs. If you could give us, let's say, exactly what, what you're paying for the gross debt, and, if you improve your, your ratios, what costs will, will happen in the, let's say, the midterm? The second question is regarding M&A. If you could give us, let's say, a little update regarding what things you're seeing. And then the, the third question is regarding, let's say, balance sheet and, and free cash flow. Assuming that you, you hit your target, that, hearing what I hear, I assume it's still in place. What, what-- Let's say, what net debt, EBITDA ratio should, should the range occur?
Just to try and understand what Free Cash Flow generation, more or less, is the company targeting? Thank you very much.
Well, for the first question, what is our financial cost? We didn't give a detailed guidance on that point. We gave a rough estimation. Fair to say it's also partly linked, of course, to the development of the EURIBOR and other interests, depending on where we are, in which, I would say area. But it's around between ± 6%, 6%+ , percentage, for the growth that we have in place. We did some, I would say, swaps, therefore, reduced also the interest costs also for the year 2024, and we are completely in line with our expectations, to be fair, in the first quarter. Concerning cash flow expectations, for the full year, we gave a guidance on that one.
We very simply said that, much higher positive than last year. In terms of what we have, we have reduced CapEx, we have, I would say, stabilized the trade working capital at higher sales by the year's end. Financial result, highly reduced. You can remember that 2023, we were impacted mostly by FX, but, on the other hand, also by high interest rates still before the, the high cost that we had before the refinancing to September, October 2023, and this, of course, had hit some scars within our P&L. So therefore, this year, 2024, we calculate is around EUR 25 million ±, financial result out of interest, and, and therefore, with a much higher also, at the end, resulting with this higher EBITDA, cash flow.
Double-digit million EUR amount, but on the higher end.
Okay. So, regarding the M&A question, Michael, and then it's just that what am I missing? I'm seeing EUR 11.3 million of cost. Clearly, there are some, let's say, of lease cost and the—but, it seems that the gross debt cost is more around 8.5%, 8% than the 6% you're saying.
There's been some also, as you know, FX topics and topics around it, but on the year - total year's basis, it's on the basis I gave, the guidance to. It's. So the financial cost of the debt itself is more on this side, yeah?
Understood. Thank you.
And it's, as you know, it's only at the end of the month, you see the financial result or the quarter. On the other hand, it's in the P&L, it's more or less over a certain period. Therefore, it's always tough to calculate, but it's more on the area of which I gave you as a guidance. There was another part of your question concerning M&A activities. Yes, we looked at many companies. As you know, our strategy is not to just say we're taking part at the tender and let's see on a short-term basis. We usually, I would say, surround our potential targets and companies many, many months, quarters, if not years. Most also announced and brought somehow on the served by the OEM, so the Tier 1s.
But right now, this year, I think we won't see an M&A transaction by buying something. If so, we would prepare everything to be then ready by 2025 on that point. Why? Because we will have our own restrictions only out of own Free Cash Flow, and here only at a certain stage, a certain part of it, and only if it's highly accretive. Highly accretive means margin increasing. And in many cases, we did kind of indirect M&A also in 2023 by not taking over the targets, but more or less taking over the work packages. This was, in those cases, the more accretive version of, I would say, indirect M&A, and that's something we have to evaluate again and again.
This year, I think we probably more or less won't see a closing of a transaction, but in preparation, could be easily done for the year 2025.
Thank you very much, and all the support from my side. Thank you.
Thank you.
Ladies, and gentlemen, this was our last questions. I would now like to turn the conference back over to Michael Pistauer for his final remarks.
Yeah, Kai, me, and 7,000 other employees of Montana Aerospace are really proud of what we have achieved. It's easy sometimes to give a guidance than to make it happen. It's a lot of work of very engaged people, sometimes with all the challenges. The challenges are here. They are constantly here. So something we see right now in the industry is something which is on our table on a daily basis, but that makes it really then the difference. If you can convene those, I would say, challenges, you come out stronger, and that's exactly our plan also for the next quarters and for this year. So we're looking forward, and we're looking also forward to hopefully present the next quarter, again, positive and highly accretive numbers together with you as the audience.
Thank you very much from our side.