HELLA GmbH & Co. KGaA (ETR:HLE) reported preliminary results for fiscal year 2025 showing stable organic sales of around EUR 8 billion, higher operating income, and a sharp improvement in net cash flow, while management highlighted continued pressure in the Lighting business and growth in Electronics.
Leadership update and 2025 overview
New CEO Dr. Peter Laier, who said he joined HELLA on Feb. 16, opened the call with a brief introduction and outlined that 2025 was marked by “strong net cash flow performance” and an increase in profitability.
Profitability and cash flow improved as cost measures accelerated
HELLA’s operating income rose to EUR 474 million in 2025 from EUR 446 million in 2024, lifting the operating income margin by 48 basis points to 6%. Laier said accelerated cost reduction measures—particularly savings in R&D—improved efficiency and supported structural adjustments, though benefits were partly offset by negative volume and mix effects.
Net cash flow increased by EUR 129 million year over year to EUR 318 million, representing 4% of sales. Management attributed the improvement to higher cash flow from operating activities (EUR 58 million improvement) and lower capital expenditures (EUR 105 million savings), describing these as elements of its improvement program.
Business group results: Lighting pressured, Electronics margin expanded
CFO Philippe Grenier detailed performance by segment:
- Lighting: Sales fell to EUR 3.7 billion from EUR 4.0 billion in 2024. Operating income was EUR 106 million, for a 2.9% margin versus 3.2% a year earlier. Grenier said Lighting was impacted by discontinuation of “very large volume series project[s], especially in America and in China,” and by weakness in Europe for specific products. Ramp-ups and higher volumes for U.S. OEMs were not enough to offset the decline in China and Europe. Structural measures in SG&A and R&D partially offset the impact but did not prevent margin erosion.
- Electronics: Sales increased to EUR 3.4 billion from EUR 3.3 billion. Operating income rose to EUR 269 million, lifting the margin to 7.8% from 6.9%. Grenier said growth was driven by radar and electronic power steering, mainly in the Americas and Europe, alongside a “good startup” in Smart Car Access in Europe and Asia and ramp-up of low-voltage battery products in China. He also cited tooling sales that helped margins in the fourth quarter, alongside lower R&D spending and administrative savings.
- Lifecycle Solutions: Sales were nearly stable at about EUR 1.0 billion, with an operating margin of 11.1% (EUR 109 million). Grenier described the spare parts business as mostly stable, with slightly negative reported sales due to FX, while demand was lower in commercial and agricultural businesses. He said there was a rebound in the second half of 2025. Margin improvement was attributed to savings and restructuring, along with lower R&D and distribution costs.
Order intake of EUR 10 billion and increased share outside Europe
Management reported order intake of EUR 10 billion for 2025 and said more than 50% of new business came from outside Europe, pointing to gains in North and South America, business with local OEMs in China, and wins in Japan and India. Laier said the order intake reflected demand for core products and innovations such as intelligent power distribution modules and sonar modules.
In Lighting, Laier highlighted wins in the Americas and Asia, including headlamp and car body lighting packages for European OEM models, U.S.-market headlamp packages with start of production (SOP) in 2028 and 2029, and awards from Chinese OEMs for SOP from 2026 onward. He said these wins supported HELLA’s strategy to grow with Chinese OEMs.
In Electronics, he pointed to approximately EUR 1 billion in orders for intelligent power distribution management and zonal modules from an international premium OEM, with SOP staggered from 2025 to 2028, as well as large radar and Smart Car Access awards, including multi-million unit orders and programs targeted to the India market.
In Lifecycle Solutions, management cited customized lighting wins for buses, off-road vehicles, trailers, and agriculture applications, including awards linked to the Indian market and SOPs ranging from 2026 to 2027.
2026 outlook: stagnating market, Lighting still a drag
Looking ahead, Grenier said the company expects a stagnating global vehicle production environment in 2026, citing S&P figures published in February 2026 that indicate a 0.2% decline versus 2025, with the Americas, Europe, and Asia-Pacific each slightly down.
Against that backdrop, HELLA guided for 2026 sales of EUR 7.4 billion to EUR 7.9 billion, an operating margin of 5.4% to 6% (Laier later referenced 4.5% to 6% during his summary), and net cash flow of at least 1.8% of sales. Grenier said the revenue outlook largely reflects continued top-line pressure in Lighting, with a rebound expected in 2027 and 2026 described as “still the turnaround year.”
For cash flow, he said the company expects lower funds from operations, higher cash outflows tied to restructuring as headcount reductions are implemented in 2026, and higher restructuring spend. CapEx is also expected to increase by about EUR 50 million versus 2025, after CapEx was reduced by about EUR 100 million in 2025, to support future launches and the anticipated 2027 rebound.
During Q&A, management reiterated that the 2026 guidance is primarily driven by Lighting, where sales declines are expected to continue due to ongoing reductions in China and weakness in Europe, only partly offset by North America. Grenier also said tooling-related sales can fluctuate and should be viewed as more “one-off.” On inflation, he said HELLA is not assuming a major increase in material price inflation in 2026 and noted that after supply disruption tied to Nexperia in 2025, the company established alternative sources and dual sourcing, reducing expected impact in 2026. Management said it was too early to comment on a proposed dividend for 2025.
About HELLA GmbH & Co. KGaA (ETR:HLE)
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: Lighting, Electronics, and Lifecycle Solutions. The Lighting segment offers headlamps, rear combination lamps, and car body lighting including radomes, illuminated logos, and front phygital shields, as well as interior lighting products. The Electronics segment provides automated driving products, such as radar sensors and steering electronics; sensors and actuators; body electronics, including lighting electronics and access systems; and energy management products.
