Märkte & Kurse

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Original-Research: Nabaltec AG - from NuWays AG

23.08.2024 / 09:06 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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The issuer is solely responsible for the content of this research. The
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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:                       23.08.2024
     Target price:               EUR 25.00
     Last rating change:
     Analyst:                    Christian Sandherr

Strong Q2 figures // FY guidance raised; chg.

Q2 sales grew 11% yoy to EUR 54.4m (eNuW: EUR 55m) thanks to 18% volume growth.
Functional Fillers (+16% yoy) compensated for the still lagging Specialty
Alumina segment (-1% yoy). Besides a pick up of demand for boehmite (+20%
yoy), its environmental flame retardants (~63% of group sales) were the key
driver, benefiting from rising investments into data centres and renewable
energy sources and an improving US construction industry. H1 group sales
+2.2% yoy to EUR 108m.

Q2 EBIT jumped 79% yoy to EUR 5.9m, a 10.8% margin (+4.2pp yoy) thanks to
improved capacity utilizations but also lower energy costs. H1 EBIT +28% yoy
to EUR 10.9m (9.9% margin).

The strong operational performance coupled with working capital
normalizations lead to an operating cash flow of EUR 24m in H1, FCF of EUR 10m
was due to planned investments into boehmite and gap filler capacities. The
balance sheet remains strong with EUR 93m of cash and a net cash position of EUR
2.5m.

FY24 guidance raised. Thanks to continued operational improvements in Q2 and
sufficient visibility throughout H2, management raised its FY24 targets, now
expecting 2-4% yoy sales growth (old: xxx; eNuW old: +3.9%) and an EBIT
margin of 8-10% (old: 7-9%; eNuW old: 8.6%). The lower end of the margin
guidance looks conservative (eNuW), as it implies a margin of only 5.7% for
H2 (eNuW 8.1%).

We confirm our BUY rating with an unchanged EUR 25 PT based on FCFY 2025e;
Nabaltec remains on our Alpha List. Why to own the stock:

  * Improving end markets. As highlighted during the earnings call, the
    positive momentum across its key end markets is seen to continue
    throughout H1, especially within the US.

  * Regulatory tailwinds should fuel the core business with environmental
    friendly flame retardants (ATH). Demand for those is driven by
    tightening regulation, wherever cables and hard plastics are used (e.g.
    buildings, cars, trains, etc.) to maximize escape times during a fire.

  * Upside from boehmite. Despite the current weakness, boehmite still has
    the potential to notably contribute to EPS growth going forward. At the
    current valuation, this seems to be completely priced out.

  * Attractive valuation. Nabaltec trades on a 5% discount to its book value
    (vs. historical avg. of 2x P/ BV), while offering a healthy balance
    sheet and ongoing op. improvements.



You can download the research here: http://www.more-ir.de/d/30599.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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1973561 23.08.2024 CET/CEST

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