Today, Nolato announced it has signed a long-term agreement with an "existing customer" (ABG note: almost certainly Novo Nordisk) for supply of medical devices for obesity and diabetes treatment. The agreement will not have a material impact on sales or earnings over the next two years, but within a five-year period it is estimated to ramp-up to annual sales of ~SEK 700m (~7% of '24e sales). We also believe there could be room for this agreement to be expanded over time, and as such even if the current agreement in itself is a sizeable one, the most exciting part is that Nolato now has a foot in the door in the fast-growing obesity field.
Invests SEK 600m, of which 120m in 2024 (~30% of '24e FCF)
To be able to deliver on this new agreement, Nolato will invest SEK 600m to increase manufacturing capacity in existing facilities. Of this, SEK 120m will be taken in 2024, which removes ~30% of our estimated '24e FCF. However, given the long-term prospects within the obesity field, we see the investment as highly attractive.
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