• Sales -1%, adj. EBIT -2.7m vs. ABGSCe
• EBIT lower on higher than expected opex
• Recycling continues to be growth driver (+70% q-o-q)

Q2 results

Nexam reported in line sales of SEK 54m (-1% vs. ABGSCe), +1% y-o-y. Recycling continues to be the fastest growing segment for the company and grew +70% q-o-q, reaching SEK 5.8m in Q2 (3.4m in Q1). This marks the second quarter of strong growth for the segment. However, Lightweight continues to face challenges due to weak end markets, resulting in low volumes from end customers. EBIT adj. came in lower than expected at SEK -2.8m (vs. ABGSCe -0.18m), for a margin of -5%. The lower figure stems mainly from higher than expected operating expenses, as the company managed to maintain a steady gross margin of 47% (vs. ABGSCe 48%). The company reported FCF lease adj. of SEK -3.8m and ended the quarter with a cash balance of SEK 9.1m.

Estimates and outlook

On numbers alone, '25e-'27e sales remains unchanged, and EBIT adj. changes by SEK -1.9m. The company notes that individual quarters may be impacted by delayed deliveries or currency fluctuations due to growing uncertainty in international trade. Looking ahead, management acknowledges that Q3 will be impacted by seasonal customer shutdowns. However, they remain confident that the underlying growth of its segments is robust and that the company is entering the second half of 2025 with a broader customer base and a stronger market presence, both of which should support continued growth.

Valuation

The share has returned +38% L3M (vs. peer median +22% and OMX Stockholm Allshare +7%), and is currently trading at 1.7x-1.2x '25e-'27e EV/Sales on our pre-report estimates vs. the peer median of 2.2x-1.6x. The company will host a conference call at 09:00 CEST, link here.