Topic: R. Stahl released its Q3 results yesterday with sales in line and adj. EBITDA below our estimates. Further, the company specified its FY24e adj. EBITDA guidance.

Q3 revenue increased slightly by 1.7% yoy to € 87.4m (eNuW: € 90m) due to a strong oil & gas, marine and pharmaceutical sector. Adj. EBITDA came in at € 8.8m (eNuW: € 12m), a 35% decrease yoy with a 5.7ppts margin reduction to 10.0%. While personnel expenses remained roughly unchanged yoy, other operating expenses increased 9.5% yoy to € 15.9m due to one-time effects such as from the implementation of the EXcelerate strategy program as stated in the CC (c. € 1m in Q3’24, c. € 3.7m in 9M’24). The materials cost ratio increased slightly to 34.1% (vs. 33.4% in Q3’23) mainly driven by a € 0.85m stock write off. From a geographic perspective, Americas performed well with 11.7% yoy sales growth thanks to a strong order backlog in the oil & gas industry. In contrast, Germany, the Central region and Asia/Pacific showed a flat sales development in Q3.    

Order intake decreased 9.4% yoy to € 74m attributable to economic uncertainties and investment reluctance, leading to € 108m in order backlog (vs. € 132m in Q3’23). While order intake in Americas was soft due to uncertainties from the US election, demand is seen to bounce back in Q4 especially for oil & gas. Order intake in the chemical industry remained muted and improvements are not expected soon.

FCF improved considerably yoy to € 6.0m, despite a lower net income and thanks to a reduction in working capital as supply chains eased compared to last year. This development should continue in Q4, leading to a mid single-digit €m FCF for FY24e (vs. € 0.3m in FY23; eNuW: € 6.5m).

R. Stahl reiterated its sales (€ 335-350m) and FCF guidance for FY24e (mid single-digit €m) but specified its adj. EBITDA forecast to € 35-40m (previously: € 35-45m). The top-line guidance looks plausible in our view (eNuW: € 344m), even though we decreased our Q4 estimate due to the lower than expected order intake. However, while Q4’24e can still benefit to a large extent from the current backlog, H1’25e is more dependent on order intake in the coming quarters. Hence, we take a more cautious stand for FY25e. Moreover, the adj. EBITDA outlook looks reasonable (eNuW: € 36m) as Q3’24 was impacted by one-offs that will not occur in Q4’24e to a similar extent.

We reiterate our BUY rating with a new PT of € 25 (old: € 29), based on DCF.