OrganoClick: NW&FT weakness to continue, set for better H2 - ABG
- Report out 18 July - Q2e: sales SEK 37m, -3% y-o-y, EBIT SEK -0.1m - Headwinds in NW&FT and FW, good momentum in GC&MP
ANNONS
Q2 expectations We estimate Q2 sales of SEK 37m, -3% y-o-y and +6% q-o-q. We expect GC&MP will remain the growth driver (+9% y-o-y), driven by strong demand for OrganoClick's consumer products. For NW&FT and FW, we anticipate continued softness due to weak end-markets. NW&FT has been facing price pressure from fossil-based competitors, which led the company to reduce prices in Q2’24. However, with stabilising volumes, and with easier comps ahead, we expect NW&FT to return to growth in H2'25. On EBIT, we estimate SEK -0.4m (-0.1m). We estimate the company will end the quarter with a cash balance of SEK 1.6m, which can be compared to the lease-adj. R12m FCF of SEK -17m.
EBIT positive in '26e Due to the continued weakness in the hotel, restaurant and construction markets, we lower '25e-'27e sales by 4-3% and '25e-'27e EBIT by SEK 4m. We expect the end-markets to gradually recover and NW&FT to regain momentum in H2'25 and OrganoClick to end FY'25e with positive growth, supported by good traction in the company's GC&MP segment. Furthermore, we expect EBIT to turn positive in '26e on improving volumes and the company's continued focus on cost control.
Valuation The company is currently trading at 2.4x-1.8x '25e-'27e EV/Sales vs. peers at 4.2x-2.3x. As our long-term view of the company remains largely unchanged, we reiterate our fair value range of SEK 2.0-3.0.
