GICS Sector : Industrials
Aalberts N.V. engineers mission-critical technologies.The company operates in two segments: Building Technology and Industrial Technology.The Building Technology segment develops, manufactures, and monitors hydronic flow control systems for heating and cooling to enhance the energy efficiency; and develops, designs, and manufactures integrated piping systems to distribute and regulate water or gas flows in heating, cooling, water, gas, and sprinkler systems in eco-friendly buildings and industrial niches.
Aalberts' first-half 2025 performance was impacted by market headwinds and global trade policy uncertainty, leading to a 3.2% organic revenue decline. The company reported a mixed picture across its three segments: building (organic growth of 1.4%), industry (organic decline of 5%), and semicon (organic decline of 13%). EBITA margin was 13.5%, down 1.5% from the previous year, with EBITA at €1.38. Free cash flow improved to €56 million, driven by reduced inventories and managed capital expenditure. Earnings per share (EPS) came in at €1.1, below estimates of €1.42. According to a Bloomberg analyst, "Aalberts' H1 results were impacted by weak semicon and industry performance, but the company's cost actions and focus on free cash flow are positives."
Publication Date: Jul -28
The company's semicon segment saw a 13% organic growth decline in H1, mainly due to customer destocking. The industry segment's EBITA margin was strong in Q2, but sustainability in H2 is uncertain due to top-line developments. The building segment reported organic growth of 1.4%, driven by innovation and system integration.
The company adjusted its full-year outlook to reflect market conditions, focusing on protecting its EBITA margin and optimizing free cash flow. The full-year outlook for EBITA margin is adjusted to 13-14%. Aalberts expects CapEx of €200-225 million for 2025 and aims to reach less than 90 inventory days this year and 85 days next year.
At current prices, Aalberts trades at a P/E ratio of 17.49, a P/B ratio of 1.23, and a P/S ratio of 0.98. The EV/EBITDA multiple is 7.19, and the dividend yield is 3.99%. The free cash flow yield is 6.24%, and ROIC is 6.74%. With a net debt/EBITDA ratio of 1.17, the company's valuation appears reasonable, but investors will need to monitor progress on its strategic actions and market conditions.
Analysts estimate next year's revenue growth at 6.3%, which could support a higher valuation multiple. However, the company's guidance and market uncertainty are key risks to consider. Aalberts' long-term strategic actions, including its Thrive2030 plan, aim to refocus and rebalance its portfolio, and recharge its three segments.
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Aalberts N.V.'s Building Technology segment growth of 3.5% is driven by increasing demand for energy-efficient solutions, rising adoption of digital building technologies, and growing investments in sustainable infrastructure. Additionally, the segment benefits from Aalberts' strong market position, innovative product offerings, and strategic acquisitions.
Aalberts N.V.'s Industrial Technology segment growth of 4.5% is driven by increasing demand for sustainable and energy-efficient solutions, expansion in emerging markets, and strategic acquisitions. Additionally, investments in digitalization and Industry 4.0 technologies enhance operational efficiency and drive innovation, further fueling growth.
Aalberts N.V. designs and manufactures heat exchangers for various industries, including oil and gas, chemical processing, and power generation.
Aalberts N.V. provides flow control systems for the oil and gas, chemical, and power industries, including valves, actuators, and control systems.
Aalberts N.V. manufactures industrial pumps for various industries, including oil and gas, chemical processing, and power generation.
Aalberts N.V. provides surface treatment solutions, including coatings, plating, and anodizing, for various industries, including aerospace, automotive, and industrial manufacturing.
Aalberts N.V. designs and manufactures fluid control systems, including valves, pumps, and control systems, for various industries, including oil and gas, chemical processing, and power generation.
Aalberts N.V. provides heat transfer solutions, including heat exchangers, coolers, and condensers, for various industries, including oil and gas, chemical processing, and power generation.
Aalberts N.V. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the increasing competition in the industrial manufacturing sector.
Aalberts N.V. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch suppliers.
Aalberts N.V. relies on a few large suppliers for raw materials, which gives them some bargaining power. However, the company's long-term relationships with suppliers and its diversified supply chain mitigate this risk.
The industrial manufacturing sector has high barriers to entry, including significant capital requirements and the need for specialized expertise. This makes it difficult for new entrants to compete with established players like Aalberts N.V.
The industrial manufacturing sector is highly competitive, with many established players competing for market share. Aalberts N.V. faces intense competition from companies like Sandvik, Kennametal, and Sumitomo Electric Industries.
| Value | |
|---|---|
| Debt Weight | 18.90% |
| Debt Cost | 7.42% |
| Equity Weight | 81.10% |
| Equity Cost | 11.39% |
| WACC | 10.64% |
| Leverage | 23.30% |
Value: 7.8
Growth: 6.2
Quality: 7.1
Yield: 4.4
Momentum: 6.5
Volatility: 3.7
1-Year Total Return ->
Value: 4.2
Growth: 3.4
Quality: 6.2
Yield: 5.0
Momentum: 4.0
Volatility: 8.3
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Value: 1.6
Growth: 8.1
Quality: 8.5
Yield: 3.1
Momentum: 6.0
Volatility: 3.7
1-Year Total Return ->
Value: 3.1
Growth: 6.2
Quality: 5.3
Yield: 4.4
Momentum: 4.0
Volatility: 5.7
1-Year Total Return ->
Value: 4.7
Growth: 3.9
Quality: 4.0
Yield: 5.6
Momentum: 2.5
Volatility: 4.3
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Value: 2.6
Growth: 5.8
Quality: 6.2
Yield: 3.8
Momentum: 4.0
Volatility: 2.7
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