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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
Group AG.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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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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