Original-Research: Nabaltec AG (von NuWays AG): Buy

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Original-Research: Nabaltec AG - from NuWays AG

22.11.2024 / 09:01 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to Nabaltec AG

Company Name: Nabaltec AG

ISIN: DE000A0KPPR7

Reason for the research: Update

Recommendation: Buy

from: 22.11.2024

Target price: EUR 25.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Continued solid performance, margins further improving; chg.

Q3 sales came in at EUR 49.8m (eNuW: EUR 50.4m), largely flat yoy; 9M sales

+1.5% yoy to EUR 158.2m. 8% higher volumes compensated for declining prices.

Worth highlighting, demand for ATH used in data centers and renewable energy

solutions and viscosity optimized hydroxides remained high, while boehmite

continued to suffer from a supply/demand imbalance (related sales -46% yoy).

More importantly, Q3 EBIT increased strongly by 30.4% yoy to EUR 6.0m with an

implied margin of 11.8% (+2.6pp yoy); 9M EBIT of EUR 16.8m, a 10.6% margin.

This was despite the particularly weak boehmite business and the

continuously weak Specialty Alumina Segment (1.4% margin) as the company

benefitted from generally higher utilization rates but also positive mix

effects within Functional Fillers (segment margin +4.4pp yoy to 16.2%).

The strong operational performance coupled with working capital

normalizations lead to a 9M operating cash flow of EUR 32.2m (EUR 8m in Q3), FCF

amounted to EUR 10.8m due to planned CAPEX (EUR 20.8m during 9M) into boehmite

and gap filler capacities. The balance sheet remained strong with EUR 93.7m

cash (EUR 2.4m net cash). This and next year's op. cash flow should be

sufficient to cover the company's current capex program with EUR 50-55m until

the end of 2025.

Upper end of FY EBIT margin guidance in reach. Management confirmed its FY24

guidance of 2-4% yoy sales growth and an 8-10% EBIT margin. While we expect

the lower end of the sales guidance to be reached (eNuW: 1.7% yoy sales

growth), the upper end of the margin guidance should be in reach. Our

current 9.3% margin estimate would imply only a 4.9% margin in Q4 (10.6%

after 9M).

We confirm our BUY rating with an unchanged EUR 25 PT based on FCFY 2025e;

Nabaltec remains on our Alpha List as we regard it as "too cheap to ignore".

At EUR 14 per share, Nabaltec trades roughly 18% below its book value of EUR 17,

while offering 11.6% adj. FCFY, a strong balance sheet and significant midto

long-term potential. Following the current investment program, Nabaltec

should be able (once fully utilized) to generate some EUR 300m sales, EUR 55m

EBITDA and EUR 40m FCF (eNuW).

You can download the research here: http://www.more-ir.de/d/31417.pdf

For additional information visit our website: www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2036131 22.11.2024 CET/CEST

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