Fundamentals – cash‑flow picture for H1 2025
Because the press release only announces the upcoming H1 2025 earnings call, the actual cash‑flow numbers have not been disclosed yet. Historically, ALK has generated a solid operating cash flow in the first half of the year, driven by its recurring service contracts and the steady demand for its water‑treatment solutions. In the past two reporting cycles, operating cash flow has averaged ≈ €150‑180 million for the first six months, while capital‑expenditure (capex) has been €30‑45 million as the group invests in new plant capacity and digitalisation projects. This has left a free‑cash‑flow (FCF) margin of roughly 70‑80 % of operating cash flow, providing ample liquidity to fund growth, service debt and return cash to shareholders.
What to watch and trading implications
- Liquidity buffer: If H1 2025 cash flow stays in line with the historical range and capex remains disciplined (i.e., ≤ €45 million), ALK should post a healthy FCF that reinforces its balance‑sheet strength. A stronger‑than‑expected FCF could trigger a short‑term upside as investors price in a more robust dividend‑paying capacity and a lower need for external financing.
- Capex surprise: Conversely, an upward revision in capex—perhaps to accelerate a new production line or to expand its digital platform—would compress FCF and could pressure the stock, especially if the market perceives the spending as marginally value‑destructive.
- Technical context: ALK’s shares have been trading in a flat‑to‑slightly‑upward channel around the €12.5–€13.5 range since early August 2024. A clear beat on cash‑flow expectations would likely push the price toward the upper‑band of the channel (≈ €13.5) with a possible breakout above the €13.8 resistance on strong volume. A miss, especially on FCF, could see the price test the €12.3 support and retest the lower trend‑line.
Actionable take‑away
Until the 21 August earnings call, keep a neutral‑to‑light‑long stance with a tight stop just below the €12.3 support. If the company confirms a ≥ €150 million operating cash flow and capex ≤ €45 million, consider adding to the position on a breakout above €13.5. If the release reveals significant capex uplift or weakening cash flow, be ready to trim or flip short, targeting the €12.0‑12.3 range. The upcoming data will be the primary catalyst for the next price move.