Original-Research: Nabaltec AG (von NuWays AG): BUY

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Original-Research: Nabaltec AG - from NuWays AG

05.08.2025 / 09:00 CET/CEST
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Classification of NuWays AG to Nabaltec AG

     Company Name:                Nabaltec AG
     ISIN:                        DE000A0KPPR7

     Reason for the research:     Update
     Recommendation:              BUY
     from:                        05.08.2025
     Target price:                EUR 18.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Christian Sandherr

Revised FY25 guidance due to FX effect and weaker demand

With the release of its preliminary Q2 figures Nabaltec also lowered its
FY25 sales guidance, expecting a 1-2% yoy decline (old: 3-5% yoy sales
growth, eNuW old: 5.7% sales growth). This is the result of an adverse FX
effect ($ 30m exposure with USD/EUR of 1.17 vs 1.05 at the beginning of the
year) but also continued weaker demand from industrial and automotive
customers, especially for boehmite (coating solution for separator foils in
EV batteries. Positively, management left the FY EBIT margin guidance
unchanged at 7-9% (eNuW old: 9.7%) despite lower sales volumes as the
material cost ratio improved (lower energy price mix). The H1 margin stood a
8.4%.

Q2 recap: Preliminary Q2 group sales decreased by 4.6% yoy to EUR 51.8m.
Specialty Alumina remained weak at EUR 13.6m (-8.1% yoy) due its dependency on
the steel industry. Functional Fillers sales of EUR 38.2m were down 3.3% yoy,
mainly as a result of continued weak demand for boehmite. The sales decline
witnessed during recent years (FY24 -25% yoy) looks set to persist
throughout FY25 due to lackluster EV demand across Europe and the ongoing
absence of notable cell and separator production capacities.

Positively, the underlying demand for its core product, aluminum hydroxide
(ATH), the environmental friendly flame retardant used in cables and
plastics, but also the visco-optimized gap filler remained strong. After the
latter has grown some 100% yoy in FY24 to EUR 10m, we expect anther 25%
increase for FY25e. The EBIT margin in Q2 came in at 9.1% (-1.7pp yoy),
notably better than in Q1 as energy prices moved in favour of Nabaltec.

While the current operational performance remains subdued, the prospects
remain promising. Nabaltec is able to benefit from growing demand for ATH on
the back of tightening regulations across its core end markets, vast
investments into data centers and renewable energies but also Germany's EUR
500bn infrastructure spending bill. The latter is seen to also turn into a
tailwind for the company's Speciality Alumina segment, which is strongly
tied to the European steel industry. While boehmite sales have been
declining for several years, the product continues to have potential during
the mid-term, depending on European ramp up of battery cell productions.
From 2026e onwards, first positive implications as well as general demand
normalizations are seen to materialize, eNuW.

Amid the currently subdued operational performance, the valuation remains
low with shares trading 15% below their book value. Further, Nabaltec offers
a healthy balance sheet with good sustainable operating cash flow generation
throughout economic cycles. We hence continue to regard Nabaltec as a must
own stock within its space. BUY with a new EUR 18 PT (old: EUR 24) based on FCFY
2025e.



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https://eqs-cockpit.com/c/fncls.ssp?u=b5dc8ff242dd5a5f891d5188976b7a9b
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Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
++++++++++
Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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2179348 05.08.2025 CET/CEST

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