Tessenderlo Moving towards more diversification
We have lowered our adjusted EBITDA forecasts for 2026-2028 by 5-8% following weaker than expected FY25 results & FY26 guidance. We continue to appreciate Tessenderlo for its healthy FCF generation which we estimate at slightly over € 100m per annum on average in the coming three years. Tessenderlo wants to develop a new Investment business unit, which can either invest minority stakes in strategic companies that are adjacent to its current businesses or invest more opportunistically in liquid participations. Although we do not exclude to still see part of the FCF generation flowing towards buybacks in the future, it seems clear that Tessenderlo will even become more diversified in the future. We consider valuation to be still attractive and maintain our Accumulate rating, but based on the lowered forecasts, we reduce our target price from € 28 to € 26.Tessenderlo Group is engaged in providing solutions for food, agriculture, water management and use and re-use of natural resources. Co. has three operating segments: Agro, which is engaged in the production and marketing of crop nutrients (liquid crop fertilizers and Sulfate of Potash) and crop protection products; Bio-Valorization, which combines Co.'s activities in animal by-product processing, comprised of Akiolis (rendering, production and sales of proteins and fats) and PB Gelatins (production and sales of gelatins); and Industrial Solutions, with activities including the production and sales of plastic pipes systems and water treatment chemicals.
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