Acerinox (AO) | Buy | Feedback from Paris roadshow: upbeat message

Research evidence excerpt

Acerinox (AO) | Buy | Feedback from Paris roadshow: upbeat message

Acerinox Buy | Target Price: EUR15.05

Acerinox’s main focus was to explain to investors what the new annual normalised EBITDA through the cycle could be (c. EUR800m

according to our estimates), with a range of EUR400-1.2bn. Doing the numbers, we believe that more than 70/75% of EBITDA will come

from the US, the remaining 25/30% non-US, and stainless steel will represent more than 2/3, whilst special alloys (HPA) could represent

the remaining 1/3 of EBITDA.

The projects in its Strategic Plan ensure Acerinox’s leadership in the new geopolitical context, and ACX estimates that they will contribute

EUR500m in EBITDA through the cycle via organic growth (EUR300m), synergies (EUR70m) and savings (EUR120m). ACX is moving

forward with its Strategic Plan. In NAS, the expansion of the melting shop and the new cold rolling mill have been in operation since the

beginning of this year.

Capital allocation is very clear: 1) organic and inorganic capex (slightly below the EUR300m capex seen in 2025); and 2)

shareholder remuneration, which is a combination of a nice stable DPS (EUR0.62/share) and buy-backs (once leverage is reduced

to 1.2x net debt to EBITDA over the cycle).

Consolidation in Europe: Acerinox does not see any consolidation after the conversations they had with Aperam during the

summer of 2022 (very complementarity deal with the best exposure to the US thanks to Acerinox combined with the most

profitable European player and a good asset in Brazil from Aperam) as the two companies have accelerated their own strategies

(ACX, more America, alloys and aerospace whilst Aperam, more alloys, more the US and more vertical integration) since then and

this merger is not that important.