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Boule Diagnostics: Mixed Q3 - ABG

- Weak on sales but higher gross margin
- More restrucrings to come
- Estimates likely up 5-10% on adj. EBIT

Q3 results
Net sales came at SEK 130.4m (-4% vs. ABGSCe 136.3m) with organic growth of -2% (ABGSCe -1.0%). The gross margin was 46.8% (ABGSCe 44.5%). Q3 adj. EBIT of SEK 15.3m (+45% vs. ABGSCe 10.5m). The beat on adj EBIT was driven by higher gross margin and lower opex. The negative deviation on sales was mainly related to lower instrument sales in Q3. Instrument sales in Q3 was SEK 28.4m (-40% vs. ABGSCe 47m) and total consumables sales was SEK 87.8m (+11% vs. ABGSCe 78.9m).

Outlook and estimates
Boule Diagnostics do not have specific targets for 2024, but keeps its long-term financial targets unchanged. The CEO is talking about making additional restructuring of the business. Based on the deviation, we expect to revise up our full year '24e adj. EBIT by 5-10% following the Q3 report.

Share price view
A mixed bag in Q3 with various non-recurring items, lower sales, but higher gross margin. The stock is down ~38% YTD and down 2% over the past 5 days ahead of the report. We expect to see a positive share price reaction on the Q3 results, in similar magnitude as the expected earnings revisions. Conference call today at 10.00 CET.
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