Q3e: Continued restructuring expected

hoenle looks set to publish its Q3 FY25/26 results August 18th. Here is what to expect:

A flat-ish topline from mixed segment performance coming in at € 22.6m (eNuW: -0.1% yoy). We expect the segments Disinfection and Adhesives to show continued growth largely mitigating a challenging environment and persisting headwinds at Curing. At the same time, gross profit margin improvements and restructuring efforts are seen to contribute a bottom-line strengthening of 24.5% yoy to € 0.7m (eNuW) in EBITDA, leading to an implied EBITDA-margin of 3.2%, up by 0.6pp yoy.

Disinfection positioned as key growth driver should contribute a 7.9% yoy improvement to € 6.6m (eNuW) revenue, due to a strengthening demand in water purification solutions. The persistent top-line improvement is seen to support a slight margin expansion by 0.2pp to 11% (eNuW); absolute EBITDA +9% to € 0.7m (eNuW).

Adhesives should grow 6.8% yoy to € 8.4m sales (eNuW), in particular driven by optoelectronics, where demand for components developed strongly during the quarter and a solid demand for medical devices, especially in North America, supporting suppliers of medical-grade adhesives and bonding solutions. EBITDA is seen to improve by 15% to € 0.6m (eNuW), as a result of successful portfolio optimization and internal process improvements.

Curing to remain under pressure. Given a continued challenging environment in mechanical engineering with a reduced growth outlook for FY26 (source: VDMA) and continued negative one-off effects from key client Manroland having entered insolvency in early March, we anticipate revenue to come in at € 7.6m (eNuW), down 12.1% yoy. Given the anticipated top-line development, a negative bottom-line contribution looks set to remain despite positive effects from restructuring measures taken in FY25. Yet, EBITDA is to come in at € -0.5m (eNuW), improved from € -2.2m in Q3 24/25. Mind you, the weak performance of Curing is largely the driver behind the company's recent FY guidance cut (now: € 92-95m sales and € 5-6m EBITDA).

Continued internal optimization efforts expected. In light of the particularly challenging situation at Curing (key end market is still printing), we would expect the company to further right-size its respective cost structure.

Reiterating BUY at € 14, based on DCF.