Nexam Chemical: A return to growth, approaching profitability - ABG

Performance Chemicals grows 17% as EBIT nears breakeven
Cost-savings programme successful, but still potential left
Markets remain sluggish, but working with sales to drive growth


Q1: Cost-savings programme completed

We take up coverage of Nexam Chemical again. Q1 sales came in at SEK 53m, growing 2% y-o-y, driven by the Performance Chemicals segment (+17%), while Performance Masterbatch lagged (-9%). Growth was possible despite underlying market weakness thanks to numerous new projects, according to management. Profitability also improved, with EBIT reaching SEK -1.3m (-3.7m) as the cost-savings programme came into full effect towards the end of the quarter. This was largely driven by a higher gross margin 45% (42%), possible due to increased in-sourcing, optimised product recipes, and improved purchasing decisions. Cash flow of SEK 0.8m was also solid, as NWC decreased somewhat.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nexam-chemical/Equity-research/2024/5/nexam-chemical---a-return-to-growth-approaching-profitability/