- The specialist said KP faces challenges in retaining volume, especially as “the highest-priced player out there” and its preference to push for price increases when commodity prices move.
- They told us KP is targeting approximately EUR 70m annual CAPEX but that high maintenance requirements leave little room for expenditure growth.
“I would just be worried about the leverage, what it is now and the risks of moving into a recession, because if EBITDA goes down to EUR 220m or whatever, I think it’s starting to bleed cash.”
- We heard KP typically targets four years for payback on new production lines. New extruders cost EUR 4-5m, with one or two machines added “every year or other year”.
- The specialist concluded that KP is a “good company in the declining industry”. However, it might have leverage concerns if EBITDA drops to EUR 220m – at which point it could start “to bleed cash”.
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