Nabaltec reported H1 figures, which confirm the guided return to growth from Q2. Despite higher energy costs and increased depreciation levels, the Q2 EBIT margin points towards the company being able to reach the mid- to upper end of the FY margin guidance. In detail:
Q2 sales grew 6.9% yoy to € 55.3m (eNuW: € 55.0m). Growth was volume-driven (+8.3% yoy), partly offset by a weighted ASP decline of ~1.4%. H1 sales thus reached € 109m (+1.9% yoy, vs € 107m).
Functional Fillers Q2 sales rose 6.7% yoy to € 40.7m (H1: € 80.1m, +2.2% yoy). Drivers matched our expectations: viscosity optimized hydrates (VH) surged 36.0% yoy in H1, underscoring the strength of the young product group. Positively, and ahead of our flat-ish assumption, boehmites returned to growth (+5.8% yoy), with management flagging a bottoming after a difficult phase.
Specialty Alumina Q2 sales rose 7.4% yoy to € 14.6m (H1: € 28.4m, +1.3% yoy). The segment returned to profitability after a Q1 loss, though weak steel demand keeps weighing on the refractory market.
Q2 EBIT came in at € 3.8m (-19.3% yoy; 7.2% margin); H1 EBIT thus stood at € 6.6m (-26.1% yoy; 6.2% margin. The decline was driven by higher energy costs and planned depreciation from the recently completed capacity build-outs.
Balance sheet remains strong. H1 operating cash flow slightly improved to € 21.7m (vs € 20.5m) as working capital releases compensated for a weaker result. Despite the planned investments into the capacity expansion for viscosity optimized hydrates, the overhaul of a rotary kiln, and measures to ensure a reliable steam supply (€ 14.6m total), FCF remained positive at € 7.1m putting net debt at just € 3.9m at the end of H1 (cash € 90.9m).
Guidance confirmed, visibility increased. Management reiterated FY26 sales growth of 4-6% and an EBIT margin of 5-7%. With the strong order backlog (€ 52.2m, +36.3% yoy) and continued VH/data-centre momentum, the lower end of the sales range (eNuW: +4.2%) but mid to upper end of the margin guidance (eNuW: 6.6%) look achievable, in our view.
Attractive long-term set-up. Nabaltec holds a globally leading position in environmentally friendly flame retardants, a market underpinned by tightening regulation and structural demand growth, most notably from data centres, which increasingly offset softer public spending. Additional levers come from newer product ranges such as VH. Even against a difficult backdrop for specialty chemicals, Nabaltec stands out for its solid balance sheet, resilient margins and sizeable untapped capacity (€ 300m revenue potential, eNuW) to be filled over the mid- to long-term; value we see as insufficiently reflected in the current share price.
We confirm our BUY rating with an unchanged € 16 PT based on FCFY26e.
ISIN: DE000A0KPPR7
