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 € 49.8m (eNuW: € 50.4m), largely flat yoy; 9M sales +1.5% yoy to € 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 € 6.0m with an implied margin of 11.8% (+2.6pp yoy); 9M EBIT of € 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 € 32.2m (€ 8m in Q3), FCF amounted to € 10.8m due to planned CAPEX (€ 20.8m during 9M) into boehmite and gap filler capacities. The balance sheet remained strong with € 93.7m cash (€ 2.4m net cash). This and next year‘s op. cash flow should be sufficient to cover the company‘s current capex program with € 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 € 25 PT based on FCFY 2025e; Nabaltec remains on our Alpha List as we regard it as „too cheap to ignore“. At € 14 per share, Nabaltec trades roughly 18% below its book value of € 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 € 300m sales, € 55m EBITDA and € 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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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