Dr. Hönle (ETR:HNL) reported broadly stable revenue for the first nine months of fiscal 2025-2026 while lifting EBITDA, helped by a more favorable sales mix, cost-saving measures and growth in its Adhesive Systems and Water Disinfection businesses.
Revenue for the nine-month period was approximately unchanged from the prior year at EUR 69 million, while EBITDA increased 26% to EUR 4.5 million. EBIT returned to positive territory at EUR 0.4 million, Chief Financial Officer Robert Stark said during the company’s third-quarter earnings call.
Chief Executive Officer Franz Richter said investment demand remained subdued, particularly for equipment and engineering projects, although consumables performed more favorably. The company implemented efficiency measures during the prior year with the aim of supporting cash flow and profitability despite pressure on equipment sales.
Adhesive Systems and Disinfection Offset Curing Pressure
Adhesive Systems revenue increased 6.8% to EUR 26.6 million in the first nine months, while EBITDA rose to EUR 4 million. Stark said industrial adhesive projects in electronics and medical technology more than offset continued weakness in curing equipment for adhesives.
Richter said the company is restructuring its Adhesive Systems approach around medical, optics and electronics markets, with a greater focus on higher-volume customer programs. He said the process requires engineering-level cooperation with key customers, including support during qualification and product-development stages.
“If we support our customers with their challenges, then we become a partner, then we are designed in, and then we can benefit from higher volumes,” Richter said.
He said there are a “handful” of meaningful qualification projects under way that could lead to higher-volume orders, but cautioned that major customer qualifications can take nearly a year. Richter said he expected the company could report meaningful results from these projects within the next year, while noting that the timing and final volumes remain uncertain.
Water Disinfection continued to expand, with revenue growing 12.6% to EUR 21.5 million and EBITDA rising to EUR 2.7 million. Growth was supported by higher sales of UV lamps and components, particularly for water disinfection and food-industry surface treatment.
The company is increasing its sales force in regions where it had been weaker in disinfection and is targeting water and surface applications. Richter identified ultra-pure water for process-water treatment, including semiconductor fabrication plants, as a potential growth area. However, he said related qualification projects and customer infrastructure investments have longer lead times and some projects have been postponed.
Curing Unit Remains Unprofitable
The Curing business remained the company’s principal area of weakness. Nine-month revenue declined nearly 19% to EUR 20.9 million, and EBITDA was negative EUR 2.2 million.
Stark attributed the decline to weak investment activity in mechanical engineering, particularly the printing segment, as well as lower business with Manroland Sheetfed following its bankruptcy proceedings. The year-over-year comparison was also affected by the discontinuation of Dr. Hönle’s solar simulation business.
While cost-saving actions improved profitability, Stark said they did not fully offset the decline in volume. Richter said customers have continued to purchase consumables and spare parts but have delayed investments in new equipment.
Still, management pointed to signs of improving activity. Richter said order intake in industrial curing applications was about 15% above the prior-year level to date, with a significant portion of orders coming from the U.S. The company is expanding its distribution network in Brazil, Mexico and the Gulf region and increasing its U.S. sales force.
Richter said quotation volumes have risen across the Curing unit, including in sheet-fed offset printing, and that quotations can convert into orders in roughly three to six months. He said the company aims to return the Curing unit to positive EBITDA during the next fiscal year, assuming investment demand continues to recover and is not disrupted by further international conflicts.
Cash Flow, Debt Reduction and Outlook
The company generated EUR 4.6 million in cash from operations during the first nine months, up 23% from the prior-year period. Investing cash flow was negative EUR 1 million, which Stark said was fully covered by operating activities.
Financing cash flow was negative EUR 2.7 million, primarily reflecting repayments of bank and lease liabilities. Cash at the end of the quarter stood at EUR 7.2 million, down EUR 0.5 million since the beginning of the fiscal year. Net financial debt declined to EUR 37.4 million from EUR 38.4 million at the end of September of the previous year, while the equity ratio improved to 53%.
Stark said Dr. Hönle has reduced net financial debt by EUR 12 million since fiscal 2021-2022 and intends to continue emphasizing positive cash flow and gradual deleveraging.
Management maintained guidance revised on July 22, forecasting full-year revenue of EUR 92 million to EUR 95 million and EBITDA of EUR 5 million to EUR 6 million. Stark said the company does not expect a specific fourth-quarter margin deterioration, despite the implied range in the full-year outlook, and expects fourth-quarter profitability to be broadly in line with the third quarter.
Dr. Hönle plans to publish preliminary full-year results on Dec. 8 and its annual report at the end of January.
About Dr. Hönle (ETR:HNL)
Dr. Hönle AG engages in the supply of industrial UV technologies and systems in Germany and internationally. The company operates through three segments: Adhesives, Equipment & Systems, and Glass & Lamps. The Adhesives segment provides industrial adhesives for applications, such as consumer electronics, automotive, optics and opto-electronics, medical technology, and glass processing. The Equipment & Systems segment engages in the provision of solutions used for drying inks and coatings, curing adhesives and plastics, disinfecting surfaces, and solar simulation.
