OrganoClick: Non-woven driving growth while FW struggling - ABG

• Q2 report due on Thursday, 17 August
• Non-woven in high gear, FW likely to struggle
• NWC release important in Q2 as cash position is slim

Non-woven in high gear, but weak market for FW
We expect OrganoClick to report Q2 sales of SEK 43.3m, up 12% y-o-y, with growth driven by non-woven sales. The Duni contract should continue running at full speed, supported by Duni's Q2 comment that "Bio Dunisoft continues to perform particularly well", while several other contracts (Ahlstrom-Munksjö, Glatfelter, and Sharpcell) are ramping up. Functional Wood (FW), however, is highly reliant on newbuild activity, and as such we expect sales to come down notably (-25% y-o-y). For Green Coatings & Maintenance, we estimate that sales growth will now turn positive y-o-y, as comps get easier and newly signed OrganoTex deals contribute to sales. The mix effect with higher non-woven sales and lower FW sales should support gross margin expansion; we estimate 32% (18%), and this results in our estimated EBIT of SEK -2m (-7m).

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/bab06b03a5be46d78c7a63c464fe9287/pdf/non-woven-driving-growth-while-fw-struggling.pdf