Belgian semiconductor supplier Melexis has lowered its revenue forecasts for this year, as the company said its clients in the automotive industry are looking to "significantly" reduce their inventories.
Founded in 1989 and now headquartered in Ypres in Flanders, Melexis employs more than 2,000 people across 12 countries.
In the third quarter of 2024, Melexis reported sales of €247.9 million, stable compared to the same time last year and up 1% on the previous quarter, although the company noted that sales were "at the lower end" of expectations.
Sales for the first nine months of 2024 were €735.4 million, a 3% increase compared to the same period in 2023.
Sales to automotive customers represented 90% of total sales in the third quarter of 2024, and 89% of total sales for the first nine months of 2024.
Challenges in automotive market
Melexis CEO Marc Biron said the company "performed well" over the first nine months of 2024, despite "more challenging end-market circumstances."
He said that recent discussions with customers have revealed that they want to "significantly" reduce their inventories by the end of the year.
"While the inventory correction at our automotive customers is temporary and global car production is projected to grow in 2025, visibility on next year is limited today," he said.
He added that the company's growth trajectory and leadership position in supplying sensors and drivers for the automotive market are "intact."
Profits and forecasts lower
The company's operating profit (earnings before interest and taxation) was €64.2 million in the third quarter, a decrease of 10% compared to the same quarter last year.
Looking at the first nine months of the year, operating profits reached €192.3 million, down 4% compared to the same period in 2023.
Melexis revised down its sales forecast for the full year, from €1 billion to between €935 million and €945 million, with a gross profit margin above 43% (previously above 44%) and an operating margin above 24% (previously above 25%).
