De Nora sticks to IPO plan as hydrogen rush trumps market chaos

Italian electrochemistry group Industrie De Nora will push ahead with a Milan listing this month despite market turbulence as its performance exceeds “even the most optimistic forecast” amid a global rush into hydrogen-based power.

The initial public offering, which analysts and bankers say could value the family-owned company at €4bn to €5bn, comes as many businesses in Europe and the US postpone their IPO plans because of rising inflation, monetary policy shifts and the war in Ukraine.

“We can press ahead with our plans in spite of what is happening around us because the company is performing well and we have the highest order backlog in our history, which is a clear sign of our growth trajectory,” said Paolo Dellachà, De Nora’s chief executive.

De Nora, founded in Milan in 1923, is the world’s leading manufacturer of electrodes traditionally employed in chlorine-soda production that are now an important part of the technology used to produce green hydrogen.

The group reported revenues last year of €616mn, with a core profit of €127mn.

Hydrogen is set to play an important role in the push to decarbonise and wean European energy off its dependence on Russia. The European Commission has increased its renewable hydrogen targets fivefold by 2030.

Thierry Breton, EU commissioner for the internal market, and a group of chief executives including Dellachà signed a joint declaration last month committing the industry to a 10-fold increase of its electrolyser manufacturing capacity by 2025.

“What is happening in Europe will greatly support our growth, but we need clear EU-wide targets and regulations; the continent can’t afford the same mistakes it made on solar energy and Brussels knows this,” said Dellachà.

“The good news for us is that technology, which is what we do, isn’t dependent on renewable energy . . . all we need is clean electricity which also can be sourced through nuclear energy or biomass.” 

Under the listing plan, at least 25 per cent of the company will be floated, with the De Nora family and Italian energy infrastructure company Snam reducing their stakes.

Snam bought a 36 per cent stake of the company from Blackstone for a little more than €400mn in 2020, which valued the company at about €1.2bn. The De Nora brothers own the remaining 64 per cent.

The IPO’s prospectus and the price range will be published this week.

When the IPO was first announced, analysts said De Nora’s equity value would be in the range of €4bn to €7bn, depending on the valuation of its hydrogen business. But the expectation now is that the listing will be in the lower range because of market turbulence.

“Our pipeline of green hydrogen projects worldwide has significantly increased since gas prices have begun to soar,” said Dellachà.

The company’s largest markets are Europe, the US and the Middle East.

De Nora’s portfolio also includes a 34 per cent stake in the Thyssenkrupp Nucera joint venture, which specialises in green hydrogen production processes.

Nucera, another IPO candidate this year, is also working on the construction of the world’s largest green hydrogen plant in Saudi Arabia.

Analysts expect the traditional electrodes and the hydrogen businesses to be valued at about €1.5bn each and the water treatment technology at €1bn, while the Thyssenkrupp joint venture stake would be valued at roughly €1bn.

“This IPO is the natural evolution of our growth trajectory,” said Dellachà. “It will give us more recognisability and the peace of mind to be able to always say ‘yes’ when the time to sustain further and larger acquisitions comes.”

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