Deceuninck Looking out of the window – model update

After a solid 1H operating performance, supported by margin growth in Europe on the back of improving cost discipline and lower energy costs, we raise our adjusted EBITDA forecasts for the FY24-FY26 period by between 4 and 7%. A fairly low capacity utilization in the key European market means limited capex is needed over the next few years and as such we expect Deceuninck to generate sizeable FCF in the coming years, which will allow the company to become net cash in the course of 2027. While acknowledging the cyclical character of Deceuninck's window profile business, we expect support from the EU Green Deal to increase in the coming years while also Recycling activities still have significant structural growth potential. Valuation is very compelling and justifies our BUY rating with a € 4.2 TP.