Q3 FY25/26: Adhesive Solutions driving the bottom-line

Yesterday, hoenle reported Q3 25/26 results, clearly reflecting turnaround progress despite the guidance cut on July 26. In detail:

Bottom line strengthened. EBITDA came in at € 1.7m (eNuW: € 0.7m), up 54.3% yoy. This against moderate top-line growth of 4.6% to € 23.7m (eNuW: € 22.6m). The profitability gains were especially driven by a stronger-than-anticipated contribution from Adhesive Solutions, carried by project-related growth in electronics and med tech as well as internal optimization efforts. The Q3 EBITDA margin improved from 2.5% to 3.6%.

Adhesive Solutions EBITDA more than tripled to € 1.71m (eNuW: € 0.6m), while revenue rose by 17.5% yoy to € 9.2m (eNuW: € 8.4m). The beats were driven by higher project-related revenue in electronics and med tech as well as stronger-than-anticipated profitability gains from portfolio optimization and operational efficiency measures.

Disinfection grew 22.8% yoy, with sales reaching € 7.5m (eNuW: € 6.6m). The bottom-line improved by 26.3% yoy to € 0.8m (eNuW: € 0.7m). In addition to anticipated demand from new customers, hoenle was able to leverage new sales potential from existing customers on the basis of an expanded product portfolio.

Curing improved but remained under pressure. The business unit's EBITDA contribution of € -0.8m came in lower than expected (eNuW: € -0.5m) but notably improved on restructuring initiatives compared to € -2.2m in Q3 24/25. This came against a 19.6% top-line decline to € 7.0m (eNuW: € 7.6m) on headwinds from a weak investment environment in mechanical engineering and partially due to the insolvency of key customer manroland.

Turnaround progress clearly visible, further internal optimization expected. Both Adhesive Solutions and Curing show marked bottom-line improvements on a yoy basis. This clearly shows progress made on various initiatives within hoenle aimed at reducing costs and improving margins. However, given the weak environment in Curing we view further cost reduction measures, i. e. capacity adjustments due to prolonged demand reduction, as essential to returning to a positive bottom-line contribution. Hence, we expect management to remain focused on internal optimization efforts in Curing, while leveraging growth opportunities in Disinfection and Adhesives. With our core estimates and valuation assumptions unchanged, we reiterate BUY at € 14.0, based on DCF.