Pfleiderer - comment

No hockey stick. Details are scant this morning as the company published a one-page Q425 update and 2027 outlook on each of its two divisions, EWP and Silekol. As regards EWP, the division slightly missed our assumptions in Q425, and also the outlook going forward is a little more muted than we had in mind. Margin assumptions going forward are on target. Silekol Q425 volumes made up for the lower Q3 performance, bringing actuals and forecasts back into alignment. In spite of Project Nord only ramping up this year, management’s 2026 projections are significantly more bullish for the Polish segment, but a little flatter going forward, suggesting that perhaps the ramp-up is progressing faster than we had assumed. While that is more positive on the revenue line overall, percentage margin assumptions are more muted, and thus the overall forecast is lower for the years ’27-’29. WC was slightly better than expected, but that was consumed by a €22m one-off charge, likely paying for the restructuring. CapEx is expected to be higher in '25/26 than we had forecast, but long-term assumptions undershoot the forecast significantly. So much so that we don’t trust those figures. The company has never spent as little as far as we can look back. In the absence of a hockey stick scenario, these figures are likely needed for the plan to work mathematically and will be based on some aggressive definition of “maintenance CapEx", but they won’t be guiding our assumptions. Still, we continue to think of Pfleiderer as potentially attractive at these cyclically low levels, subject to more information and only after the restructuring has concluded.