Original-Research: R. STAHL AG - from NuWays AG

Classification of NuWays AG to R. STAHL AG

Company Name: R. STAHL AG


Reason for the research: Update

Recommendation: Kaufen

from: 10.05.2024

Target price: EUR 29.00

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Christian Sandherr

Final Q1 out // Good start into 2024; chg. est.

Topic: R. Stahl reported a solid final Q1 underpinning the strong demand

for electrical explosion protection solutions, which should continue due to

favorable structural trends. Management confirmed FY24e guidance, which

looks well in reach (eNuW).

To recap, Q1 sales grew 8.5% yoy to EUR 84.7m, driven by a strong order

backlog of EUR 115m at the end of FY23. Further, while global supply chains

remained partially disrupted in the previous year, there were no

significant restrictions in Q1 FY24. Q1 adj. EBITDA decreased 19% to EUR 8.4m

with a lower but still solid margin of 9.9% (-3.4 pp) due to inflationary

effects from personnel costs, a higher material expense ratio and a EUR 2m

one-off from the implementation of the EXcelerate strategy program; 12.3%

adj. EBITDA margin excluding one-offs.

After a subdued order intake of EUR 74.5m in the fourth quarter, order intake

came in surprisingly positive at EUR 92.3m, only slightly below the

exceptionally strong order intake of last year's Q1 (EUR 96.7m). Driven by an

increasing stabilization of global supply chains, the order intake in Q4

2023 was negatively affected by active destocking activities from customers

in addition to a soft chemical industry in the DACH region. While demand in

the chemical industry remained muted, the LNG, and petrochemical industry

as well as the nuclear sector showed positive momentum during Q1. Due to

the strong order intake, order backlog increased 6% to a solid level of EUR

122m (end of FY23: EUR 115m).

Management confirmed its FY24e guidance with sales in the range of EUR 335 -

350m and adj. EBITDA between EUR 35 - 45m. Thanks to the good start into the

year and a solid order backlog, the guidance seems to be well in reach

(eNuW sales: EUR 347m; adj. EBITDA: EUR 39.7m). Even more importantly, R.

Stahl's mid-term prospects remain bright as the company strongly benefits

from (1) its superior market share along the LNG value chain (liquefaction

and shipping: 75%, natural gas production: 50% and regasification 25%), (2)

a rising need for production automation across offshore oil and gas rigs,

and production plants of several industries and (3) the ongoing nuclear

renaissance across Europe.

With that, R. Stahl is well positioned to gradually improve margins,

returns and cash flow generation. As shares are trading on only 5.9x

EV/EBITDA 2024e we confirm our BUY rating with an unchanged EUR 29 PT, based

on DCF.

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