Eckert & Ziegler's Q3 delivered a clear return to growth in adj. EBIT. Group sales increased 6% yoy to € 79.6m (eCons: € 79.3m), with adj. EBIT rising 25% yoy to € 19.3m (eCons: € 18.8m). The margin expanded by 3.8pp to 24.2%, supported by a favourable Medical mix and improving IP profitability. The quarter provides a firmer operational base ahead of an expected Q4 licence contribution.
Medical remains the main earnings driver. Q3 segment sales rose 4% yoy to € 40.6m, with adj. EBIT increasing 46% yoy to € 11.3m, implying a margin of c. 28%. This reflects a shift towards higher-margin activities. Over 9M, Lu-177 sales increased 280% yoy, CDMO grew 57% and generators added 5% (growth expected to accelerate in Q4), cushioning continued weakness in lower-margin plant engineering (-40%, expected to recover in Q4). These operating improvements were achieved without licence income.
IP returned to earnings growth in Q3. Sales increased 8% yoy to € 39.1m, with adj. EBIT rising 9% yoy to € 8.6m, following a 24% yoy decline in H1. Medical radiation sources and project business supported the recovery despite continued weakness in oil well logging.
FY26 guidance implies further underlying earnings growth in Q4. The confirmed FY26 guidance of c. € 320m sales and € 80m adj. EBIT implies Q4 sales of € 91m (+4% yoy) and adj. EBIT of € 27.4m (+2% yoy). Q4 licence income is seen to come in at € 3-5.6m, with the upper end reflecting the remaining contractual amount. With this contribution below Q4 25's € 9.4m, the underlying business needs to offset the decline in licence income and deliver the implied increase in group adj. EBIT.
Therapeutic isotopes offer substantial medium-term growth potential. Lu-177 is moving beyond its initial contribution: sales are expected to rise from c. € 2m in FY25 to € 7-8m in FY26, with c. € 15m realistic in FY27 (eNuW). Alongside generator growth of c. 10% CAGR, our 2030e forecasts include € 25m of sales each for Lu-177 and Ac-225. October's Ac-225 GMP certification adds another step towards supplying the emerging clinical market. Increasing treatment volumes and further drug launches should gradually turn today's development activity into recurring isotope demand.
Sector consolidation strengthens the rationale for an independent supplier. EUZ provides critical isotopes and specialist manufacturing without competing with customers' drug pipelines. Its broad portfolio offers exposure across developers and therapies, supported by established production capabilities that are hard to replicate. This makes EUZ an attractive way to participate in radiopharma's expansion (c. 15% market CAGR expected into 2030e). At c. 8x FY26e EV/EBITDA (eNuW), the valuation still looks modest against this opportunity and compared to recent sector M&A multiples (>5x EV/sales; vs. EUZ at c. 2.5x).
BUY, PT € 21.50, based on DCF.
ISIN: DE0005659700