Topic: Semperit released soft Q1 results which were burdened by persistent market headwinds, including weakened demand and US tariff uncertainty. However, Semperit is seen to be well positioned to benefit from an anticipated market recovery in H2'25e.
Q1 sales declined by 13.8% yoy to € 152m (eNuW: € 157m) due to ongoing market challenges and project delays. Sales in SEA decreased by 19.7% yoy to € 86m mainly driven by market cyclicality and projects delays in the belting business. In contrast, SIA experienced a more moderate sales decrease of 4.7% to € 66m, attributed to softer overall demand.
EBITDA decreased by 52% yoy to € 11.1min Q1, leading to a 7.3% margin (-5.7pp yoy). The decline was largely attributable to lower sales volumes, which could not be fully covered by cost-saving measures. Personnel expenses decreased only slightly by 2% yoy due to wage inflation pressure and despite a 7.2% yoy reduction in the average headcount. Cost of materials increased by 1.7% yoy to € 76m, leading to a 50.1% cost ratio (+7.6pp yoy). This was partly driven by a 25% yoy price increase in natural rubber as well as a noticeably increase in butadiene prices, which is used in synthetic rubber production.
Mixed order intake: A challenging macro environment and uncertainty from US tariffs led to investment reluctance among customers. However, after a difficult start into the year, demand improved already in March and April, exceeding last year's figures. Order intake for hoses and profiles remained low. While hoses recovered slightly in March, profiles is seen to remain subdued at least in the short-term due to continued weakness in the construction industry. Orders in the Form business were above last year, mainly due to Mountain Applications, whereas demand in Belting was significantly lower yoy due to project postponements. Order intake for RICO was solid, thanks to a strong healthcare and food sector.
FY guidance reiterated: Management confirmed its € 65-85m operating EBITDA guidance (eNuW: € 74m), as a recovery is expected for H2'25e. Thanks to strategic investments in recent years, Semperit in our view is well positioned to benefit from a potential market recovery, which could be supported by the announced € 500bn German special infrastructure fund.
Reiterate BUY with a price target of € 18.20, based on DCF.
ISIN: AT0000785555
