OrganoClick - Q2e a repeat of Q1 with easier comps - ABG

Q2e: return to growth as comps ease
For Q2, we expect sales of SEK 45m, up 10% y-o-y, marking a return to growth after a decline in Q1 due to extraordinarily tough comps in the NW&FT segment. The growth will be driven by the NW&FT (+30%) and GC&MP (+25%) segments continuing their strong momentum while the FW (-10%) segment will remain held back by the challenging construction and consumer markets. For adj. EBIT, we estimate SEK 1.8m (-0.4m) for a margin of 4.0% (-0.9%), as higher volumes and continued cost discipline drive profitability. We forecast SEK -6m (4m) in lease adj. FCF, leaving the company with total liquidity of SEK 12.3m compared to R12m lease adj. FCF of SEK -12.3m, but note that we expect positive cash flow in H2 due to WC effects.

'24e EBIT to break even, liquidity improved
We make only minor adjustments to our estimates, as the outlook for the company remains largely unchanged. We expect the company will finish the year with break-even EBIT, and continue improving its profitability from there by leveraging its spare production capacity and volume growth over the remaining estimate period. We feel more comfortable with the liquidity situation following the WC-intensive Q1, but the margin for error is still quite slim.

2.7-2.4x EV/Sales vs. peers at 3.2-1.9x
The share is up 16% L3M (vs. peers -11%, Swedish small cap +5%), and is currently trading at 2.7-2.4x '24e-'26e EV/Sales, vs. the peer median of 3.2-1.9x. We reiterate our fair value range of SEK 2.0-4.0.

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