Syensqo Earnings: Weak Demand Environment Leads to Full-Year Guidance Reduction

Narrow-moat Syensqo delivered second-quarter 2024 underlying EBITDA of EUR 378 million, 13% lower than the prior year and slightly below the EUR 383 million company-compiled consensus. Although the volume momentum improved sequentially compared with the first quarter, management does not expect a further amelioration of macroeconomic conditions in the second half of the year. Weak demand is expected to persist across key end markets such as automotive, agriculture, industrial, and medical. Given this, the full-year underlying EBITDA guidance range was reduced to EUR 1.4 billion-EUR 1.475 billion from EUR 1.4 billion-EUR 1.55 billion previously. We decrease our fair value estimate by around 4% to EUR 110 per share after reflecting in our forecast the 2024 demand headwinds and the lower CAGR expected in the near term for battery materials. The company announced a delay of up to two years in its investment in a North American battery materials facility given weaker customer demand amid slower electric vehicles growth.