Nexam Chemical Holding
Nexam Chemical - Weaker than expected Q4'22 (ABG Sundal Collier)
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Q4 resultsNexam delivered a weaker than expected report. Sales came in at SEK 56m (-10% vs. ABGSCe SEK 62m), down 2% y-o-y. Perfomance Chemicals contributed with SEK 30m (-10% vs. ABGSCe SEK 34m) and Performance Masterbatch sales was SEK 25m (-9% vs. ABGSCe SEK 28m). Gross profit was SEK 21m (-17% vs. ABGSCe SEK 26m), for a margin of 39% (ABGSCe 42%). All in all, EBITDA was SEK -1m (vs. ABGSCe SEK 0m) and EBIT was SEK -4m (vs. ABGSCe SEK -3m). This resulted in a net profit of SEK -5m (vs. ABGSCe SEK -4m). We had expected growth in Performance Chemicals, driven by PET-foam additive sales, and thus the growth of -1% for the segment was disappointing. The company has a cash position of SEK 23m (ABGSCe SEK 45m), which is starting to look somewhat thin. Estimate changes and outlookOn the Q4 numbers alone, this would imply negative EBITDA revisions of 16-8%. The company also launched a cost savings programme, which the company says should save SEK 5m on an annual basis. This would add 46-22% to our '23e-'24e EBITDA, although for now we do not have any details on what the programme entails. Final thoughts and valuationOn our pre-Q4 report estimates and yesterday's closing price, the share is trading at 2x ’24e EV/Sales and at 20x '24e EV/EBITDA. The company host a conference call at 11.00 CET today, https://youtu.be/sWQJ7A_Gapw. |
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