OrganoClick: Seasonal weakness ahead - ABG

Seasonal slowdown: Q3e sales SEK 30m, EBIT SEK -4m
We expect profitability in '25e: sales SEK 157m, 9% EBIT margin
DCF and peer valuation yield fair value range of SEK 2.0-4.0


Q3e: Going into the seasonally weaker half of the year

For Q3, we expect sales of SEK 30m, up 34% y-o-y (33% org., 1% FX), mainly driven by 335% growth in the Nonwoven & Fiber Technologies segment, while we expect Green Coatings & Maintenance Products to grow 25%, and Functional Wood to decline 20%, as the construction market remains challenging. We estimate adj. EBIT of SEK -4.3m (-7.9m), for a margin of -14.3% (-35.5%). The expected q-o-q decline in revenue and profitability is due to H2 being the seasonally weaker half of the year for the company, with Q4 being the weakest quarter. We expect this will convert into adj. EPS of SEK -0.06 (-0.09). Our estimate for lease adj. FCF is SEK -5m (-3m), leaving a cash balance of SEK 7m.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/organoclick/Equity-research/2023/11/organoclick---seasonal-weakness-ahead/