Märkte & Kurse

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Original-Research: Nabaltec AG - from NuWays AG

21.01.2025 / 09:00 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:                        21.01.2025
     Target price:                EUR 25.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Christian Sandherr

Ending FY24 on a high note; FY25 with additional growth

Nabaltec to reach upper end of FY24e EBIT margin guidance. With Q3 figures,
management confirmed its FY24 guidance of 2-4% yoy sales growth and an 8-10%
EBIT margin while achieving 1.5% yoy growth and a 10.6% EBIT margin during
the first nine months. 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 likely. Our current 9.3% margin estimate would imply only
a 4.9% in Q4.

2025 to show further growth carried by rising volumes as well as expected
price increases. Considering generally rising production costs (raw
materials, energy and labour) as well as expected sales price increase of
its peers, we would expect Nabaltec to also slightly increase prices (eNuW:
3.5%). On top, demand for the company's core product (ATH, an environmental
friendly flame retardant, which is primarily used in cables and wires) is
seen to remain strong. This should be driven by several trends including
investments into data centres and an improving US construction industry.

Further, the gap filler is growing in importance. Sales from the white
powder, that improves thermal management capabilities of adhesives used in
EV batteries, should reach EUR 8m in FY25e. Once the current capacity
expansion is completed, Nabaltec will be able to produce EUR 40m worth of
product p.a.

All in all, Nabaltec looks well positioned to grow its top-line by a mid
single-digit percentage (eNuW: 7.3%) while slightly expanding its EBIT
margin. The past few quarters have underpinned the sustainability of the
company's double-digit margin target.

2nd year of growth investments no burden on the balance sheet. Following
some EUR 30m of capex in FY24e (~ EUR 18m for expanding boehmite gap filler
production capacities), Nabaltec is seen to spend additional EUR 32m in FY25e
to complete the capacity expansion for gap fillers, build a fully automized
warehouse and special maintenance of its Specialty Oxides production.
Nevertheless, the company's op. cash flow should once again be sufficient
(eNuW EUR 29m) to largely cover those investments.

Valuation remains attractive. Despite macroeconomic headwinds, unlike many
of its peers, Nabaltec is able to show top-line and margin growth. With some
EUR 30m operating cash flow in FY24e and a slight net cash position, the
current valuation of 8.4x PE '24e looks undemanding. We confirm our BUY
rating with a EUR 25 PT, which is based on FCFY 2025e, and keep the company on
out Alpha List.

You can download the research here: http://www.more-ir.de/d/31643.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed

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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2071277 21.01.2025 CET/CEST

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