OrganoClick: Tough comps in NW&FT segment - ABG

Q1e sales SEK 43m, down 2% y-o-y, adj. EBIT SEK 0m (0m)
Tough comps due to Duni product-launch inventory build-up in Q1'23
Liquidity of SEK 4.5m vs. R12m lease adj. FCF of SEK -17m (-37m)


Q1 expectations

For Q1, we expect sales of SEK 43m, down 2% y-o-y. While we see the Green Coatings & Maintenance Products and Functional Wood segments growing, Non-woven & Fiber Technologies faces very though comps due to the inventory build-up in connection with last year's Duni product launch. Despite the slight sales decline, we forecast EBIT at SEK 0m to be flat y-o-y, as the company's cost control measures counteract this decline. We expect this to convert into EPS of SEK -0.02 (SEK -0.01). Q1 is seasonally a quarter of NWC build-up, and we thus expect a lease adj. FCF of SEK -20m, leaving the company with liquidity of SEK 4.5m vs. a R12m lease adj. FCF of SEK -17m (SEK -37m). Cash flow should however improve during the remainder of the year.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/organoclick/Equity-research/2024/4/organoclick---tough-comps-in-nwft-segment/