WOOD Flash – Kety: Investor Day takeaways

Yesterday (30 September), we co-organised Kety’s Investor Day and visited plants operating in the company’s Extruded Products Segment and Aluminium Systems Segment. Below, we list the key takeaways from our site visit. We see the key takeaways from the investor day as positive. First, we like the comment on the very strong demand in the Extruded Products Segment, despite the all-time high aluminium prices, as this implies that Kety is able to expand the nominal (PLNk/t) margins it commands. Second, we are pleased with the comment on the potential additional production capacity that may be utilised in the Flexible Products Segment, as it creates an opportunity for cushioning the potential normalisation of the EBITDA in the segment in 2022E (by means of higher volumes sold). Third, we like management’s comment on the “comfortable debt level” as we read it as an assurance that the aluminium price hike (and working capital build up, as well as growth in leverage, consequently) should not have an adverse impact on the dividend recommendation from the 2021E profit. Lastly, we feel encouraged by the company’s comment on the likely peak in the aluminium price in 4Q21E, as it should facilitate the operations of the Aluminium Systems Segment. We remain BUYers of Kety and the company is still at the top of our top Polish industrial picks.