FY25 guidance likely met // FY26 returning to growth

Q4 revenue looks set to come in at € 179.6m, +5.7% yoy (eNuW), benefitting from sequential improvements following the particularly weak Q1, due to challenging market conditions and project delays; FY revenue -2% yoy to € 663m (eNuW). Q4 EBITDA of € 21.7m (eNuW), implies a largely flat margin; FY EBITDA of € 73.7m. With this, the company should meet its FY guidance of € 78m op. EBITDA (excl. ERP-related one-off expenses of approx. € 5m (eNuW)).

Semperit’s two segments are seen to paint two different pictures in Q4:

• SIA is expected to contribute € 72.3m (eNuW) revenue (+1% yoy) and € 12.8m EBITDA (+29% yoy), implying a 17.7% margin. The return of demand for hoses (following destocking earlier this year) should have largely compensated for a weak profiles business (no installation at cold temperatures). FY SIA revenue -6.8% yoy.

• SEA is seen to add € 107.8m (eNuW) revenue (+10% yoy) thanks to stronger belting, LSR and forms business. The EBITDA margin of 11% (eNuW) looks set to be slightly down 1.8pp yoy as the company should incur output ramp up expenses as a reaction in increasing demand.

Despite less working capital releases and the weaker operational performance, FCF should remain positive as the company benefits from lower CAPEX (€ 42m vs. € 65m in FY24) due to postponements of non-essential projects and production capacity investments.

While cost-control/reduction was a key focus area in FY25 (€ 6-7m of planned € 10m savings were already realized), FY26 should be marked by a return to profitable growth.

A return to growth. FY26e group sales are seen to rise by 7.2% yoy to € 711m, looking set to benefit from gradually improving end market demand, partial price increases and additional growth optimizing initiatives in the short-term. Importantly, both segments are seen to contribute to growth. EBITDA to rise disproportionally by 18% yoy to € 87m (margin +1.1pp yoy to 12.2%) on the back of an improving fix-cost coverage, the full effect of last-years cost saving initiatives (€ 10m total savings p.a.) and likely lower raw material headwinds (e.g. synthetic rubber).

Semperit’s prospects are bright, as its strong technological edge, high product quality and reliability continue to ensure its leading position in the internal rubber and plastics industry. In recent years, the company has reviewed processes and headcounts, reduced costs, now increasingly reflected by higher margins but also laid grounds for future growth by expanding its production sites to get ahead of the next cyclical upswing. The latter should benefit from the fact that construction industries of several end markets have likely passed the trough (based on building permits and PMI). The still outstanding infrastructure package could turn into an additional notable tailwind.

Maintaining BUY at € 18.5 based on DCF.