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Third party research

Organoclick: Weak Q2 triggers PW - ABG

OrganoClick

This is a third party research report and does not necessarily reflect our views or values

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- Q2 sales SEK 30m, EBIT -4.7m (vs. ABGSCe 37m and -0.4m)
- Costs savings of SEK 3m per year from Q4
- Cash balance SEK 2m in Q2, 10m loan booked in Q3

Sales and EBIT miss of SEK 7m and 4m vs. ABGSCe
This morning, OrganoClick issued a PW and presented sales of SEK 30m for Q2 (vs. ABGSce 37m). The sales miss was partly due to weakness in Functional Wood (SEK -3m vs. ABGSCe), but also GC&MP and NW&FT (combined sales miss of SEK -4m vs. ABGSCe), which faced headwinds from customer de-stocking and weaker end-markets, respectively. EBIT was lower at SEK -4.7m vs. ABGSCe -0.4m, mainly from a result reduction of SEK -3.1m from OrganoWood. However, cash flow from operating activities was higher than expected at 7.7m vs. ABGSCe 0.3m.

Savings programme initiated
In order to adapt to the new conditions, the company has initiated a savings program in OrganoWood that will save SEK 3m on an annual basis from Q4 (no one-off cost specified) and aims to licence out the production of OrganoWood Nowa wood within 12-18 months.

Outlook
On numbers alone, '25e-'27e sales is impacted by -6% and EBIT by SEK -4m. In addition to this, we believe the negative factors driving the miss are not isolated to Q2, but rather that the headwinds will persist in coming quarters. In Q2 the company had a cash balance of SEK 2m. In the near-term financing has been secured through a SEK 10m shareholder loan (booked in Q3), but in order to minimise the long-term liquidity risk it needs to demonstrate improved profitability.
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