Tessenderlo 2025 slides: EBITDA rises 8.5% amid €80M net loss

Tessenderlo reported a net loss of €80.2m for 2025 driven by €78.3m of EBIT adjusting items (impairments/restructuring), despite adjusted EBITDA rising 8.5% to €288.1m and revenue of €2,763.1m (+4.4%). The company moved from €5.0m net debt to €41.3m net cash, returned €82.0m to shareholders (€45.0m dividends, €37.0m buybacks) and reduced outstanding shares to 59,062,556. Management guides 2026 adjusted EBITDA to be flat at €288.1m, citing Agro and Machines momentum offset by Industrial Solutions weakness and macro/FX uncertainty; the stock fell ~4.8% on the results.

Analysis

The market is punishing headline impairments while ignoring the durable structural levers that should re-rate the equity over 6–12 months: lower capital intensity via the collagen/gelatin JV, executed buybacks/cancellations that mechanically boost per‑share cash flow, and capacity additions in higher‑margin Agro products. Impairments are largely a timing/accounting recognition that crystallizes downside now but also clears the runway for margin expansion if raw‑material and end‑market conditions normalize; that increases the likelihood of positive operating leverage once cyclical demand stabilizes.

Second‑order winners include the JV majority owner (Darling) which inherits scale and pricing leverage in gelatin/collagen — consolidation tends to compress volatility in commoditized specialty proteins and can raise EBITDA conversion for the combined entity within 12–18 months. Conversely, smaller niche suppliers to construction and mining chemicals face continued volume risk if industrial capex remains muted, increasing the probability of further consolidation or asset sales in that sub‑segment.

Immediate catalysts to watch are regulatory sign‑offs and close dates for the JV and the SOP plant transaction, EUR/USD moves that drive reported finance costs and working capital translation, and T‑Power’s incremental merchant dispatch beyond tolling levels if energy prices spike. Tail risk centers on a commodity downcycle that forces additional impairments or a sudden FX move that reopens covenant/interest pressure; these are eventable in the next 3–9 months and would materially alter the recovery path.

Key Decisions for Investors

• Long TESB (EBR:TESB) equity — 6–12 month horizon, position size 3–5% of portfolio. Rationale: buybacks + asset rationalization create upside if operational momentum continues; set a protective stop at ~20% downside and target 35–50% upside (roughly 2:1 to 2.5:1 R/R). Watch JV close and SOP plant integration as primary catalysts.
• Long DAR (DAR) — 3–9 month horizon, 2–4% position. Rationale: majority ownership of the combined gelatin/collagen business increases scale and pricing optionality; catalyst = regulatory approval and initial synergy announcements. Risk: regulatory conditions or integration missteps; target 20–40% upside with 15% stop.
• Structured play: Buy TESB 9–12 month calls (or deep‑ITM equity if illiquid) and hedge with a small short put to monetize time decay — net leverage to upside while limiting capital at risk. Rationale: lever exposure to non‑cash impairments being digested; maintain cash reserve to add on any additional impairment headlines within 3 months.
• Relative trade (risk‑managed): Long TESB / short a euro‑industrial peer with weak balance sheet (size ratio 1:0.6) for 3–6 months. Rationale: isolates operational recovery vs broad European cyclical weakness; unwind at JV close or after Q2 results. Keep size small and monitor FX — this is a tactical, event‑driven pair.