Klockner Pentaplast - comment

The company underperformed our Q2 2024 revenues by EUR 28 million (by nearly 6%) due to lower pharma volumes, rigid films and reduction in raw material and energy prices which, however, also lifted the gross profit line to EUR 83.5 million, also below our expectations, but less so. Management did a better job with variables that are within its control which was reflected in the Q2 2024 Adjusted EBITDA at EUR 63 million which was slightly ahead of our projections of EUR 61 million. EBITDA benefited from volume leverage and cost productivity. Liquidity remained healthy at EUR 212 million due to improving working capital management with net leverage improving to 6.4x. The company stated on the call that it is targeting a Q4 2024 refinancing with improving order rates in H2 2024. Our view always was that this was a second-half improvement and refinancing story. In the meantime, we expect more headlines around the EUR 300 million senior notes and how SVP intends to tackle their refinancing.