Nolato: CMD recap: back to earnings growth focus - ABG

>12% EBITA margin target looks doable...
...more uncertainty on the 8% org. growth target, in our view
Back to earnings growth focus after a couple years of putting out fires


>12% EBITA margin target looks doable...

On its Capital Markets Day today, Nolato gave more colour on the new financial targets presented this morning (see our comment here). The EBITA margin target of >12% implies ~2pp expansion from the '24 base of 9.9%, with roughly equal margin expansion in each segment according to the company. In Medical, the main levers for increasing profitability are gradual improvements in cost optimisation and pricing, particularly in the underperforming North American business. In Engineered, margin expansion will be driven by improving utilisation, not least in the facility in China where VHP production has been phased out, and a positive mix effect as the high-margin Materials sub-segment grows it share of sales. In our view, the margin target looks doable, but the effects above will take some time to fully play out.