Nabaltec - industry value of the last row

A brief introduction 🏭

We've all been there:

You go to the supermarket and buy dozens of foods wrapped in foil. However, hardly anyone thinks about whether the film is coated. Because that's exactly what it is with food.

Cable insulation is flame retardant. Thank goodness, otherwise the child would have tried to set fire to the new home again.

Fire resistance, ceramic filters and a supplier for microelectronics can be found in this medium-sized company. Although it is debatable whether a company with a value of ~€150 million can still be called a medium-sized company, the technology behind Nabaltec's products does hold some potential for the future.

Nabaltec $NTG (-1,97 %) is a producer of fillers for the plastics industry and a producer of technical ceramic applications in almost all sectors. It is owned by the Witzany and Heckmann families, who are still the company's largest shareholders.

The company operates just 3 production sites worldwide. One of them in Schwandorf, Bavaria, and two others in the USA. By centralizing its own sales in the EU, North America and China, the company is present on the most important international markets.

A major aspect that reflects the future potential of the company is the basic need for safety, as well as increasing international regulations for fire protection and occupational safety.

Portfolio

Aluminum hydroxides under the Apyral brand are in demand internationally as fire retardants in plastics. The basic idea here is strongly anchored in personal and environmental protection.

However, the boehmite applications of the Apyral-AOH brand in particular are the company's growth driver.

Why? Many critics of increasing electrification argue that there is a lack of fire protection, which is supposedly inadequate according to current guidelines and therefore jeopardizes general safety. Many manufacturers in the electronics sector can reduce these risks structurally, but also offer additional protection through coated printed circuit boards. Increasing electrification and digitalization, which is inevitable, will reinforce this feeling of general safety. In addition, safety regulations are regularly adapted and could therefore also become relevant to insurance for domestic use in the future.

The company is recording double-digit growth rates in this area.

Future prospects

Although the company is a German producer and is also based in Germany for tax purposes, the European economic area is the largest market. The domestic German market follows with a sales share of only around 25%. The company is organized in various important associations and therefore has a considerable market influence in relation to its own size. The main driver is the USA. Here in particular, the guidelines for fire and occupational safety have become much stricter in recent years, meaning that this is where the market will have the greatest potential to catch up in the future.

In addition, despite high energy prices, the company is still in a profitable growth phase, is investing in the double-digit capex range to ensure future security and also has stable liquid funds.

A small dividend is also distributed annually.

Do you also invest in companies in the early company phase? Small companies usually have a higher growth rate than large corporations, especially niche companies. Investing at an early stage can pay off significantly over decades.