• Q2 sales SEK 54m, EBIT SEK -2.8m (-1% and -2.7m vs. ABGSCe)
• Increased investments in Central and Eastern Europe
• EBIT-positive in '26e (prev. '25e)

Recycling momentum continues

Nexam reported sales of SEK 54m, +1% y-o-y and -1% vs. ABGSCe. Reactive Recycling continued its strong growth trajectory (+70% q-o-q) and now accounts for >10% of Nexam's revenue. We expect this positive trend to continue in the coming quarters, offsetting the weaker performance of other areas of the business—such as lightweight, which has recently been affected by weak end markets (-22% y-o-y). EBIT was lower at SEK -2.8m (vs. ABGSCe SEK -0.2m) due to increased operating costs, primarily due to proactive investments in Central and Eastern Europe to facilitate growth in these regions.

Estimate changes

We have kept our '25e-'27e sales fairly intact, but lowered '25e-'27e EBIT by SEK 7m due to higher costs (mainly linked to the company's increased investments in Central and Eastern Europe, geographies where the company sees huge untapped potential). We expect Q3e to be seasonally weaker, but for the company to end FY'25e with sales growth and improving volumes, to reach positive EBIT margins in '26e (previously '25e).

Long-term potential intact

We still find the company's niche in Reactive Recycling attractive, believing it to represent a good growth opportunity driven by cost savings and environmentally friendly solutions. Moreover, the company has experienced heightened interest in its ReColour+ applications, which combines the Aesthetics area with recycling technology. This interest has emerged not only in the Nordic region, but also in Central and Eastern Europe—a geography that we consider attractive for Nexam. The share has returned +31% L3M (vs. peers at 33%, OMXSALLS at 14%) and is currently trading at 1.6x-1.1x '25e-'27e EV/Sales.