Amotiv’s $190m Impairment Raises Questions on Long-Term Growth Outlook
Amotiv Limited reported modest revenue growth and a slight EBITA decline in FY25, offset by a significant non-cash impairment and strong capital returns. The company anticipates growth in FY26 amid ongoing market headwinds.
- FY25 revenue up 1.0% to $997.4 million
- Underlying EBITA down 1.3% to $192.0 million
- Non-cash $190 million impairment on APG business
- Returned $105 million to shareholders via dividends and buybacks
- FY26 outlook expects revenue growth and ~$195 million underlying EBITA
Solid Performance Amid Market Headwinds
Amotiv Limited has released its full year results for FY25, revealing a resilient performance despite a challenging operating environment. The company posted a modest 1.0% increase in revenue to $997.4 million, while underlying EBITA slipped slightly by 1.3% to $192.0 million. This outcome reflects a mixed divisional performance, with growth in the Powertrain & Undercar and 4WD & Trailering segments offset by softness in Lighting, Power & Electrical.
CEO Graeme Whickman highlighted the company’s disciplined cost management and strategic pricing initiatives, which helped mitigate margin pressures from lower original equipment volumes and inflationary costs. The company’s cash conversion remained robust at 90.6%, underscoring operational resilience.
Significant Non-Cash Impairment and Strategic Capital Management
A notable feature of the FY25 results was a non-cash impairment charge of approximately $190 million related to Amotiv’s APG business. This adjustment reflects a more cautious long-term outlook driven by subdued new vehicle sales forecasts in Australia and New Zealand, ongoing macroeconomic uncertainties, and tariff considerations affecting certain export markets. Importantly, management emphasized that this impairment does not impact underlying trading performance or cash flows.
On the capital management front, Amotiv returned $105 million to shareholders through dividends and an ongoing share buyback program, which acquired 3.6% of shares on issue during FY25. The company plans to complete a 5% buyback by October 2025, signaling confidence in its balance sheet strength and commitment to shareholder returns.
Transformation and Growth Initiatives
Amotiv’s transformation program, Amotiv Unified, delivered $15 million in annualized savings in FY25, primarily through workforce reductions and operational efficiencies. The company plans to reinvest these benefits into digital capabilities, e-commerce, and product development to support future growth. Expansion efforts continue with manufacturing investments in South Africa and Thailand, alongside growing offshore revenue streams, particularly in the US and Europe.
Despite ongoing cyclical headwinds in the Australia and New Zealand markets, especially in reseller and original equipment channels, Amotiv expects FY26 to deliver revenue growth and underlying EBITA of around $195 million. The company anticipates continued resilience in core wear and repair categories and plans further pricing actions to support margins.
Navigating Tariffs and Market Dynamics
Amotiv’s exposure to US tariffs remains limited, with approximately 8% of group revenue linked to the US market. The company has implemented pricing strategies to offset tariff impacts anticipated in FY26 and continues to monitor geopolitical developments. Its diversified manufacturing footprint and strong original equipment partnerships provide a defensive moat amid evolving market conditions.
Bottom Line?
Amotiv’s FY25 results underscore a cautious yet confident approach, balancing transformation gains and capital returns against market uncertainties as it eyes growth in FY26.
Questions in the middle?
- How will Amotiv’s APG impairment influence investor sentiment and valuation in the medium term?
- What impact will ongoing tariff changes have on Amotiv’s offshore revenue growth and margins?
- How effectively can Amotiv’s Unified transformation program sustain cost savings and drive innovation beyond FY26?
