It's a difficult time for German auto suppliers. Even without the gyrations on tariffs from US President Donald Trump, the weak economic situation in the industry means holding on to cash. This is especially true for companies specialising in electromobility, as electric cars are nowhere near reaching the sales figures that were predicted in recent years. It's therefore surprising when a relatively small supplier like the specialty machinery and plant manufacturer Aumann, from Beelen in the Münsterland region, with a market capitalisation of around 200 million euros, launches a share buyback program and then increases the buyback price. This price rose from an initial 12.37 euros per share to 14.25 euros last week, even while the stock markets are experiencing erratic movements daily. A 15% premium on the initial offer, while the situation in the auto industry has deteriorated even further since the announcement of the buyback offer on March 14, is remarkable.

Shareholders are being made an offer involving the repurchase up to 1,434,523 of their shares (approximately 10% of the share capital). This means that the total value of the repurchase at the increased price will amount to 20.44 million euros if the quota is filled. The period for accepting the offer began on March 25 and ends on April 22.

In addition, the Executive Board and Supervisory Board resolved to cancel almost 905,000 of the company's shares already held to reduce its capital. The number of no-par value shares has thus decreased by almost 6% from 15.25 million to approximately 14.35 million.

Aumann stated in response to an inquiry that the company had decided to return part of the liquidity built up over the past two years to shareholders. Against the backdrop of its solid assets and high cash flow, Aumann aims to increase earnings per share with the share cancellation and buyback. Even after the completion of the buyback, Aumann will continue to have a „very solid financial basis – with sufficient scope for future M&A activities and strategic investments,“ the Investor Relations department said in a reply to Börsen-Zeitung.

A dividend of 0.22 euros (previous year: 0.20 euros) per share will be proposed to the Annual General Meeting on June 13. With currently 14,345,231 dividend-bearing shares, this corresponds to a total of 3.2 million euros (2.9 million euros). This sum will therefore also be withdrawn from the company.

A predecessor of today's Aumann AG is Claas Fertigungstechnik GmbH, which was outsourced to Beelen by the Claas Group in 1992 and sold to the MBB Group in 2012. The other predecessor is Aumann GmbH, founded in 1936, which became part of the MBB Group in 2015. Shortly thereafter, the Aumann Winding and Automation Group merged with Claas Fertigungstechnik GmbH (later: MBB Fertigungstechnik GmbH). In 2016, the company was renamed Aumann AG. The company went public in 2017, with the issue price being 42 euros. In the first few months after the listing, the share price temporarily rose to over 90 euros, which led to temporary membership in the SDax. However, a prolonged decline in the share price began in the fall of 2017. MBB SE remains Aumann's majority shareholder (51.6%). Their customers include car manufacturers such as BMW, Daimler, Stellantis and the Volkswagen Group, suppliers such as Bosch, Continental and ZF as well as industrial groups such as Siemens.

Aumann's management is also citing the „very successful year 2024“ as the reason for now making use of the authorization granted at last year's Annual General Meeting to purchase its shares. According to the preliminary figures announced in mid-March, revenue increased by 7.9% year-on-year to 312.3 million euros. Operating profit (EBITDA) jumped by 73% to 35.8 million euros, corresponding to a margin of 11.5% (7.1%). Thanks to these results, net financial liquidity reached a record high of 138.2 million euros. According to the company, equity amounted to 201.7 million euros, resulting in an equity ratio of 62%. So much for the positive news. However, it then states: „Due to the difficult environment in the European automotive industry and cautious investments in production capacities for electric vehicles in 2024, order intake fell by 41.1% to 200.1 million euros. The order backlog decreased by 39.3% to 184 million. euros“ These dramatic declines would be a reason for many companies to be cautious and allow as little cash to flow out as possible.

The sales forecast for 2025 is bleak due to the decline in orders: Aumann expects a decline to between 210 million euros and 230 million euros. Even if the upper end of the target range is reached, this would correspond to a drop in revenue of a good 26%. In contrast, management expects a continued strong EBITDA margin of 8 to 10%. The outlook for the industry – "Aumann expects initial signs of recovery in the industry over the year“ – already appeared optimistic in March, but from today's perspective, it is more a wish than a realistic expectation.

The supplier of manufacturing equipment for series production, primarily of electric and hybrid, but also conventional vehicle powertrains, has some experience with share buybacks: From November 22, 2023, to May 13, 2024, a total of 463,281 shares were repurchased at an average price of 17.27 euros, with a total value of 8 million euros (excluding transaction costs).

It is debatable whether this was a good deal for Aumann – the offer provided for the repurchase of shares up to a price of 20 euros per share via the stock exchange. Due to the significantly lower average repurchase price, the company likely received more shares than management had expected for the specified capital framework of 8 million euros. On the other hand, the share price has been on a downward trend since June of last year, when it was just under 19 euros. In November, the share price reached 9.60 euros, its lowest level since October 2020. After that, the share price remained in the range of 10 euros to 11 euros until the publication of the current repurchase offer. This means that Aumann could have repurchased shares at a significantly lower price than from the end of 2023 to spring 2024.

The question for Aumann shareholders is whether to tender their shares at the increased price of 14.25 euros. For six years, the share price has fluctuated between 10 euros and 19 euros – apart from a few short-term outliers. The offer price is therefore almost exactly in the middle of this range. The decisive factor will likely be whether the auto industry has at least reached its lowest point in the mood and whether figures, especially in electric car sales, will pick up again at the end of this year or the beginning of next year—in which case, Aumann shares should be held. Or whether the industry is in a prolonged crisis—in which case, selling would be advisable. Unfortunately, no one can answer this question reliably.