Continued solid performance, margins further improving; chg.

More importantly, Q3 EBIT increased strongly by 30.4% yoy to € 6.0m with an implied margin of 11.8% (+2.6pp yoy); 9M EBIT of € 16.8m, a 10.6% margin. This was despite the particularly weak boehmite business and the continuously weak Specialty Alumina Segment (1.4% margin) as the company benefitted from generally higher utilization rates but also positive mix effects within Functional Fillers (segment margin +4.4pp yoy to 16.2%).

The strong operational performance coupled with working capital normalizations lead to a 9M operating cash flow of € 32.2m (€ 8m in Q3), FCF amounted to € 10.8m due to planned CAPEX (€ 20.8m during 9M) into boehmite and gap filler capacities. The balance sheet remained strong with € 93.7m cash (€ 2.4m net cash). This and next year‘s op. cash flow should be sufficient to cover the company‘s current capex program with € 50-55m until the end of 2025.

Upper end of FY EBIT margin guidance in reach. Management confirmed its FY24 guidance of 2-4% yoy sales growth and an 8-10% EBIT margin. While we expect the lower end of the sales guidance to be reached (eNuW: 1.7% yoy sales growth), the upper end of the margin guidance should be in reach. Our current 9.3% margin estimate would imply only a 4.9% margin in Q4 (10.6% after 9M).

We confirm our BUY rating with an unchanged € 25 PT based on FCFY 2025e; Nabaltec remains on our Alpha List as we regard it as „too cheap to ignore“. At € 14 per share, Nabaltec trades roughly 18% below its book value of € 17, while offering 11.6% adj. FCFY, a strong balance sheet and significant mid- to long-term potential. Following the current investment program, Nabaltec should be able (once fully utilized) to generate some € 300m sales, € 55m EBITDA and € 40m FCF (eNuW).