Nabaltec — Resilience and margin expansion

Nabaltec (XETRA: NTG)

Last close As at 22/11/2024

EUR13.85

0.00 (0.00%)

Market capitalisation

EUR122m

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Research: Industrials

Nabaltec — Resilience and margin expansion

Nabaltec recorded revenue growth across the group of 1.5% y-o-y to €158.2m at 9M24, with sales volumes increasing 7.9% y-o-y despite selling prices falling. Functional Fillers revenue grew by 3.8% y-o-y to €114.1m due to strong demand for its viscosity optimised and fine precipitated aluminium hydroxides. Speciality Alumina revenue, however, decreased 4.1% y-o-y, partially offsetting group revenue growth due to a lack of impetus for reactive alumina in the wider market. Group EBIT grew 28.2% y-o-y to €16.8m (10.3% margin), due to higher capacity utilisation and lower costs of materials, energy and maintenance, particularly in Q324.

Written by

Andrew Keen

MD - Head of Content, Energy & Resources, Industrials

Industrials

Nabaltec

Resilience and margin expansion

Q324 results

Chemicals

25 November 2024

Price

€14.05

Market cap

€124m

€1.18/£

Net cash (€m) at 30 September 2024

2.4

Shares in issue

8.8m

Free float

45%

Code

NTG

Primary exchange

Xetra

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(8.3)

(12.3)

(11.2)

Rel (local)

(7.8)

(16.1)

(26.7)

52-week high/low

€19.35

€12.45

Business description

Nabaltec develops, manufactures and distributes environmentally friendly, specialised products based on aluminium hydroxide and aluminium oxide. It is one of the world’s leading suppliers of mineral flame-retardant fillers and speciality alumina.

Next events

FY24 results

6 May 2025

Analysts

Andrew Keen

+44 (0)20 3077 5700

Harry Kilby

+44 (0)20 3077 5700

Nabaltec is a research client of Edison Investment Research Limited

Nabaltec recorded revenue growth across the group of 1.5% y-o-y to €158.2m at 9M24, with sales volumes increasing 7.9% y-o-y despite selling prices falling. Functional Fillers revenue grew by 3.8% y-o-y to €114.1m due to strong demand for its viscosity optimised and fine precipitated aluminium hydroxides. Speciality Alumina revenue, however, decreased 4.1% y-o-y, partially offsetting group revenue growth due to a lack of impetus for reactive alumina in the wider market. Group EBIT grew 28.2% y-o-y to €16.8m (10.3% margin), due to higher capacity utilisation and lower costs of materials, energy and maintenance, particularly in Q324.

Year end

Revenue
(€m)

EBIT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

12/22

218.8

29.2

3.00

0.25

6.5

12/23

200.1

18.3

1.30

0.28

14.9

12/24e

204.1

18.2

1.27

0.29

11.0

12/25e

212.3

19.1

1.35

0.34

10.4

Note: *EBIT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Diverse product range enabling resilience and growth

Fine precipitated hydroxides remain the driving factor within Nabaltec’s Functional Filler segment, with the macroeconomic trend of AI data centre expansion. Nabaltec’s high-quality flame-retardant wire and cable is increasingly attractive in the long run, positioning the company strongly to capture further market upside. Despite strong growth in viscosity optimised hydroxides, the e-mobility market experienced continued deceleration throughout 2024. Boehmite revenue declined 46% in Q324 compared to Q323, reflecting weaker demand in the e-mobility sector and intensified competition from China. However, Nabaltec’s diverse product portfolio has maintained resilience, offsetting market weakness and navigating challenges of shorter customer order cycles, which are expected to continue over the short and medium term.

Preparation for momentum shifts

Nabaltec’s maintains a strong balance sheet (net debt/EBITDA of -0.1x and net cash of €2.4m at 9M24). This financial strength has supported €21.4m in capex spending so far this year, focusing on capacity expansion of boehmites and viscosity optimised hydroxides as the main projects. These investments signal Nabaltec’s strategic positioning to benefit from potential future momentum shifts in the EV battery market. Management reaffirmed its FY24e guidance, anticipating slight revenue growth of 2–4% on an FY23 basis and an EBIT margin of 8–10%. Our forecasts remain unchanged, with FY24e revenue of €204m and an EBIT and EBIT margin of €18.2m and 8.9%, respectively.

Valuation: Unwarranted discount to peers

We maintain our valuation of €29.9 per share (c 113% above its current share price). Nabaltec trades at a discount to peers on a multiple basis, with an FY25e EV/EBITDA discount of 25% and an FY25e P/E discount of 47%. We view this discount as unwarranted given Nabaltec’s diversified portfolio mix, strong position in high-growth markets and robust EBIT margins.

Exhibit 1: Financial summary

€’000s

2020

2021

2022

2023

2024e

2025e

Year-end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

159,576

187,017

218,839

200,133

204,102

212,266

Cost of Sales

(74,987)

(88,151)

(106,399)

(101,856)

(102,051)

(106,133)

Gross Profit

83,244

101,755

120,042

102,018

105,113

109,317

EBITDA

23,552

37,288

42,369

31,003

31,395

34,193

Operating profit (before amort. and excepts.)

(15,863)

24,551

29,167

18,339

18,175

19,108

Exceptionals

0

0

0

0

0

0

Operating Profit

(15,863)

24,551

29,167

18,339

18,175

19,108

Other

0

0

0

0

0

0

Net Interest

(1,972)

(1,768)

(1,714)

(2,200)

(2,373)

(1,061)

Profit Before Tax (norm)

(17,835)

22,783

27,453

16,139

15,802

18,048

Profit Before Tax (reported)

(17,835)

22,783

27,453

16,139

15,802

18,048

Tax

(1,818)

(6,522)

(1,078)

(4,721)

(4,582)

(5,234)

Profit After Tax (norm)

(19,653)

16,261

26,375

11,418

11,219

12,814

Profit After Tax (FRS 3)

(19,653)

16,261

26,375

11,418

11,219

12,814

Minority interests

0

0

0

0

0

0

Discontinued activities / Other

(1,137)

3,398

12,796

(609)

0

0

Average Number of Shares Outstanding (000’s)

8,800

8,800

8,800

8,800

8,800

8,800

Net income (normalised)

(19,653)

16,261

26,375

11,418

11,219

12,814

Net income (FRS3)

(20,790)

19,659

39,171

10,809

11,219

12,814

EPS - normalised (€)

(2.23)

1.85

3.00

1.30

1.27

1.35

EPS - normalised fully diluted (€)

(2.23)

1.85

3.00

1.30

1.27

1.35

EPS - reported (€)

(2.23)

1.85

3.00

1.30

1.27

1.35

Final distributed dividend per share (€)

0.15

0

0.25

0.28

0.29

0.34

Gross Margin (%)

52.2%

54.4%

54.9%

51.0%

51.5%

51.5%

EBITDA Margin (%)

14.8%

19.9%

19.4%

15.5%

15.4%

16.1%

Operating Margin (before GW and except.) (%)

-9.9%

13.1%

13.3%

9.2%

8.9%

9.0%

BALANCE SHEET

Fixed Assets

128,127

122,516

135,315

120,716

137,495

147,411

Intangible Assets

452

396

575

880

880

880

Tangible Assets

124,018

119,982

118,789

118,985

135,764

145,680

Right of use assets

0

0

15,000

0

0

0

Investments/Other

3,657

2,138

951

851

851

851

Current Assets

70,485

98,190

145,754

160,166

155,209

155,396

Stocks

32,888

33,935

45,737

51,131

48,984

46,699

Debtors

11,243

12,049

12,503

23,080

23,472

24,411

Cash

26,354

52,206

87,514

85,955

82,753

84,287

Other

0

0

0

0

0

0

Current Liabilities

(16,947)

(79,625)

(24,918)

(16,511)

(18,220)

(20,833)

Creditors

(16,442)

(24,034)

(27,084)

(16,524)

(18,646)

(21,259)

Short term borrowings

(505)

(59,268)

(783)

(971)

(558)

(558)

Long Term Liabilities

(104,830)

(44,587)

(122,686)

(122,561)

(122,561)

(122,567)

Long term borrowings

(58,977)

0

(89,954)

(89,962)

(89,962)

(89,968)

Other long term liabilities

(45,853)

(44,587)

(32,732)

(32,599)

(32,599)

(32,599)

Net Assets (ex minority)

76,835

96,494

133,465

141,810

151,924

159,407

CASH FLOW

Operating Cash Flow

30,193

33,280

33,235

20,724

25,944

30,798

Net Interest

(1,765)

(1,423)

(781)

(949)

(2,373)

(1,061)

Tax

(5,745)

(2,767)

(2,944)

(6,011)

(4,582)

(5,234)

Capex

(10,323)

(6,736)

(25,810)

(13,994)

(30,000)

(25,000)

Acquisitions/disposals

0

0

77

0

0

0

Financing

0

0

0

0

0

0

Dividends

(1,320)

0

(2,200)

(2,464)

(2,580)

(3,203)

Other

(13,536)

3,614

2,262

5,407

4,582

5,234

Net Cash Flow

(2,496)

25,968

3,839

2,713

(9,009)

1,534

Opening net debt/(cash)

41,900

33,128

7,062

3,223

4,978

7,767

HP finance leases initiated

0

0

0

0

0

0

Other

11,268

98

0

(4,468)

6,220

(6)

Closing net debt/(cash)

33,128

7,062

3,223

4,978

7,767

6,239

Source: Nabaltec accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Nabaltec and prepared and issued by Edison, in consideration of a fee payable by Nabaltec. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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London │ New York │ Frankfurt

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United Kingdom

General disclaimer and copyright

This report has been commissioned by Nabaltec and prepared and issued by Edison, in consideration of a fee payable by Nabaltec. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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