2024 figures inline with prelims. To recap: FY24 sales grew by 1.7% yoy to € 203.6m, largely driven by higher sales volumes of fine hydroxides and viscosity optimized hydroxides (sales +100% yoy to € 10.2m), which compensated for weaker demand for boehmite (-25% yoy to only € 12.5m due to lacklustre EV demand across Europe and the absence of notable cell and separator production capacities) and Specialty Alumina (41% refractory share, 11% on group level) as well as generally lower sales prices. While Functional Fillers grew its top-line by 4%, Specialty Alumina recorded a 3.8% decline.
At 10.8%, the EBIT margin increased by 1.7pp yoy; € 22.3m absolute EBIT. Thanks to the good operational performance coupled with working capital improvements (wc/sales -3.4pp to 17.8%), the operating cash flow stood at € 35.2m, sufficient to cover the company's growth investments (€ 32m capex).
Soft start into the year. Nabaltec also released Q1 prelims with sales growing 1.2% yoy to € 54.7m and an EBIT of € 4m, a 7.5% margin (-1.8pp yoy) as higher input costs (gas, electricity and labour) weighed on profitability. Yet, improvements are seen to gradually materialize throughout the year thanks to the announced selling price increases that will be implemented from Q2 onwards (eNuW: ~ 3.5%).
Cautious FY25 guidance. Due to the expected gradual improvements outlined above, management's expectations of 3-5% FY25 sales growth (eNuW: 5.7%) and an EBIT margin of 7-9% (eNuW: 9.7%) look conservative.
Potential tailwinds from Germany's € 1tn spending bazooka. On March 4th, election winner Friedrich Merz from the Christian Democrats (CDU) as well as the Bavarian Christian Social Union (CSU) and the Social Democrats (SPD) discussed a € 500bn special fund for infrastructure investments over the coming 10 years, next to a sizeable fund for defense. With 25% of group sales being directly tied to Germany (Europe 76%) and construction being the most important end market, this could turn into a notable tailwind.
Valuation remains low. Nabaltec is trading at a 12% discount to its book value, while the company offers a strong balance sheet and good free cash flow yield, even in a macro-economically challenging year. We continue to regard to stock to be mispriced and confirm our BUY rating with a € 24 PT (old: € 25) based on FCFY 2025.
ISIN: DE000A0KPPR7
