* 42% beat (less negative) on adj EBIT but miss on sales * -20% organic growth (ABGSCe -18%) * No change in outlook
ANNONS
Q3 results
OssDsign reported a mixed set of numbers in Q3 with 3% lower sales, gross margin in line, but good cost control on opex resulting in a 40% beat on EBIT (less negative). Q3 sales came in at SEK 35.7m (-3% vs ABGSCe SEK 36.7m, no consensus) and adj. EBIT of SEK -6.6m, +42% vs ABGSCe of -11.4m. Organic sales growth in Q3 amounted to -20% (ABGSCe -18%). The beat on adj. EBIT is attributable to lower opex in Q3, and mainly driven by seasonal factors according to management. Q3 gross margin was 93.2% vs ABGSCe 93.0%). Even tough total opex came in some 12% below (better) than expected, we are a bit concerned to see that the 'sales and commission and fees' as percentage of sales jumped up to 49.9% in Q3 (ABGSCe 45%). Cash flow generation was better than expected, i.e. less negative, with OCF of SEK -5.3m vs. ABGSCe SEK -12.1m.
Estimates
Company is not providing any outlook for 2026 or changing its mid-term financial targets of reaching sales of SEK >400m by 2028 and to become cash flow and EBIT positive in the second half of its 'Strategy Period' (2025-2028). Based on the deviation on adj. EBIT in Q3, we expect FY'26e EBIT to be revised up by 5-7%.
Share price view
Management talk about being focused on levers that support a return to growth, but after several quarters in a row with declining sales, and no clear sign of improvements we expect investors to remain cautious until a turnaround in the sales trajectory becomes visible. The stock has traded up 4-5% into Q3 (-5d), but is down 69% YTD. We expect to see a negative share price (low single digit) reaction today on the soft sales development.
