Bildkälla: Stockfoto

Organoclick: A bump in the road - ABG

Key takes from the Q2’21 report
Organoclick reported its Q2 results this morning, which were clearly below our expectations. It was also below the company’s expectations, and it saw several issues during the second quarter that were partly out of its control, resulting in lower sales and increasing costs, a large share of which we deem to be non-recurring. Sales came in at SEK 40m, 11% below our expectations of SEK 45m. The main reason for this was the FW segment. With soaring wood prices and limited timeframes for price hikes, the company has been forced to push volumes from Q2 to Q3 – meaning that volumes should be relatively unhurt in the long run. The second surprise was the margins in GCM, which largely explained the low profitability (SEK -4m vs. ABGSCe of SEK 2m). With the company reaching production bottlenecks in the wait for its purchased automation equipment, it saw an increase in production staff of up to 70% during a 2-3 month period, putting a dent in margins.

Outlook: long-term case intact
After today’s report, we leave our sales estimates relatively intact. With bottlenecks and quarterly pushbacks as the key factor, we lower our sales by 2.6% for 2021e and 0% for ‘22e-‘23e. On EBIT, we note both a worse-than-expected gross margin and a slightly higher opex build-up, which leads us to reduce our EBIT forecasts by c. SEK 2m for ‘22e-‘23e, with the percentage changes appearing more dramatic than they are on such low numbers.

Value range intact at SEK 5-16
There are three main value drivers to keep track of that have happened since the Q1 report: 1) slightly negative estimates, 2) the new share issue and 3) the buyback of the preferred shares. Given the risk-off related to the capital structure and financing, especially given the cost of capital related to the preferred shares (12% p.a.), we believe the positives balance out the negatives, and reiterate our value range of SEK 5-16 per share.

Finwire / Börsvärlden

Publicerad 23 August 2021, 08:29

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