Nexam Chemical: Continued improvements from here - ABG

Sales and EBIT up from Q2 low, reaching SEK 46m and SEK -2.8m
Order situation seems to be improving as destocking wears off
We expect earnings to improve from here, and break-even in '25e


Q3: Recovery from Q2 low, as expected

In Q3, Nexam had sales of SEK 46m, down -19% y-o-y (we estimate -22% org., +3% FX), but recovering from the dip to SEK 42m in Q2. Profitability also recovered compared to Q2, as the company's cost-savings programme and production insourcing started benefitting margins. Adj. EBIT was SEK -2.8m (-2.2m), compared to SEK -9.1m in Q2. Financial expenses increased in the quarter, as higher interest rates started affecting the company's interest expenses. This resulted in EPS of SEK -0.05 (-0.03). WC did not change significantly, and the company ended the quarter with a cash balance of SEK 16m, compared to R12m lease adj. FCF of SEK -25m. Excluding extraordinary capex in Q4'22, this figure is closer to SEK -10m.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nexam-chemical/Equity-research/2023/10/nexam-chemical---continued-improvements-from-here/