Neodecortech: Bright 1H’22, cloudy outlook

1H’22 results from Neodecortech (NDT) continued the trend of FY’21. Total revenue was up 20% compared with 1H’21, to a record €103m, demonstrating the continued strength of NDT’s new products and its European markets. The increases in energy prices and the impact of the Ukraine conflict have caused a reduction in the order backlog at the beginning of 2H’22, but the company remains confident of maintaining operating and financial results roughly in line with FY’21.

  • Trading: Decorative paper, bolstered by its new, higher-margin products – EOS and PPLF – saw revenue up 14%. Cartiere, the paper business, also saw strong revenue gains (+40%). The energy division booked revenues down 7%. Growth came mostly from Italy (+32%) and Europe (=11%). The US was also strong.
  • Margins: Materials as a percentage of revenues rose from 59% to 69%, but the EBITDA margin only slipped from 11.9% to 11.0%, as staff costs were kept stable. Not all higher input costs have yet been passed on to end customers. There remains strong upward pressure on most raw material prices and energy costs. We are expecting broadly flat EBITDA margins for the next two years.
  • Valuation: Having performed strongly in 2021, Neodecortech has, along with the market, had a poor 2022 and is down 25% YTD. It appears cheap on our forecast multiples, at a ca.21% EV/EBITDA discount to its nearest quoted peer (Surteco) for FY’22E, and the market is still over-discounting for its smaller scale, in our view. Our central DCF valuation is €6.04 per share.
  • Risks: The key risk in the immediate term is the impact on the economy of the energy crisis. Increasing energy prices squeeze everybody along the value chain. Raw material price rises look here to stay for a while and are sure to have an impact on overall demand, or see margins squeezed.
  • Investment summary: Neodecortech specialises in high-quality décor paper and plastic film, and has strong relationships with its customers. It has been increasing investment in further improvements in its machinery and new technologies. As familiarity with the company grows, and as the new products comprise a larger proportion of the business, we would expect the valuation discount to continue to narrow. The business is operating at full capacity, currently, with good forecast orders, albeit down on the first half. The very strong business performance since the worst of COVID-19 shows what a resilient and high-quality business it is.


Click to view all articles for the EPIC:
Or click to view the full company profile:
    Share on facebook
    Share on twitter
    Share on linkedin
    Hardman & Co

    More articles like this

    Hardman & Co

    Neodecortech: Very strong 2021

    FY’21 results from Neodecortech (NDT) confirmed the trend of the first half. Total revenue was up 37% vs. FY’20, but, more tellingly, it was up 33% vs. pre-COVID FY’19, demonstrating the strength of NDT’s new products and its

    Hardman & Co

    Neodecortech: Business booming

    1H21 results from Neodecortech (NDT) confirmed the trend of the first quarter. Revenue was up 41% vs. 1H20, but, more tellingly, it was up 21% vs. 1H19, demonstrating the strength of NDT’s new products and its European markets.

    Hardman & Co

    Neodecortech: Upgrade following strong trading

    Neodecortech (NDT) has announced that the strong trading in 3Q had continued into 4Q and it expected to significantly outperform its baseline projection from the summer. We have upgraded our forecasts and central valuation estimate to reflect this

    Hardman & Co

    Neodecortech: Reassuringly robust

    Neodecortech (NDT) shut its main plants for several weeks in March/April, but has traded strongly since reopening. We have cut our 2020 forecasts significantly, but see 2021 bouncing back close to 2019 levels. NDT trades at a ca.36%

    Hardman & Co

    Neodecortech Well placed for 2020

    Neodecortech (NDT) performed well in 2019, in our view, against a difficult economic backdrop with trading picking up in 2H after a tricky 1H. The immediate outlook for 2020 remains uncertain. We have trimmed our forecasts accordingly. NDT

    Hardman & Co

    Neodecortech Robustly positioned for 2019/20

    Neodecortech (NDT) has performed well in 2019, in our view, against a difficult economic backdrop. 1H, 3Q and October revenue rose 2%, 6% and 9%, respectively. We are forecasting the year to end strongly, with full-year revenue up

    Hardman & Co

    Neodecortech Strong 2018, robustly positioned for 2019

    Neodecortech (Italian AIM:NDT) had an impressive 2018 in our view. Revenue rose by 6% and adjusted EBITDA by 25%. Margins rose across the divisions as new products were developed, the power plant operated fully and the 2017 cost

    Hardman & Co

    Neodecortech Innovative décor paper printer

    Neodecortech (AIM:NDT.MI)  is a vertically integrated business from power generation through to paper manufacturing, through to printing and impregnating paper. It specialises in high-quality printed décor paper and film in natural patterns to sell to the interior decoration