Semperit is set to deliver solid Q3 2025 results on 12th of November. Here is what to expect:
Group sales are seen to come in at € 170m (eNuW) implying an increase of 5.6% yoy, based on a strengthened order book at the end of H1 and further improvements across most end markets. At the same time, group EBITDA should grow 26% yoy, reaching € 20.8m. The implied 1.9pp margin increase (12.2% vs. 10.3%) looks set to be driven by continued operational improvements from cost saving efforts, favorable mix effects, but also a soft comparable base.
For the SIA segment (containing hoses and profiles), we expect 7.2% yoy growth, reaching € 67.7m in revenue. To recap, in Q3 2024 the segment encountered a notable demand softness, accompanied by an unfavorable product mix shift. These developments were followed by customer destocking activities, which should have ended in Q2. The expected demand recovery for Q3 is likely to be supported by a slow recovery of the construction end market in Europe and moderate Emerging Asia construction growth. During the last 12 months, the company took decisive action to lower costs, to operationally improve the segment and to price its products defensively, due to which EBITDA-margin looks set to increase by 2pp yoy to 19.5% (eNuW).
Revenues from the SEA segment (containing forms, belting and LSR) should increase by 4.6% yoy to € 102m against a weak comparable base of Q3 2024, which had been implicated by mixed demand drivers for business units form and belting and supported by the addition of the LSR unit. As project delays from Q1 2025 should be ending, and order activity already improved in Q2, moderate growth appears likely for Q3 against a backdrop of low manufacturing and mining activity growth in end markets. The segments EBITDA-margin is expected to increase by 1.9pp yoy to 11.1% (eNuW), partly due to segment top-line growth and cost cutting measures.
Expectations for the remainder of the year. Despite the businesses' seasonality (typically weaker Q1 and Q4), we expect further sequential and yoy improvements during the last quarter of the year thanks to further slightly improving demand patterns.
FY25 guidance in reach. With the expected 9M performance (eNuW € 491m sales and € 51.5m EBITDA), gradual end market improvements and cost saving efforts, the company should be on track to meet its guidance (€ 65-85m operating EBITDA). However, as reflected by our estimate, we expect rather the mid-point as a sensible target (eNuW € 73.7m). Reaching the upper end would require a Q4 EBITDA-margin of 19.5%, which seems too ambitious, in our view.
Semperit appears well-positioned, partially offsetting end-market weakness via broad market/application diversification and high product quality. In addition to its ERP system consolidation, the company plans ongoing cost-savings, which should unlock incremental margin expansion once demand accelerates. For example, this could materially impact the P&L once Germany deploys already-committed special infrastructure funds.
BUY with an unchanged € 18.2 PT, based on DCF.
ISIN: AT0000785555