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OrganoClick: Slow start to '25e, but consumer brands strong - ABG

OrganoClick

This is a third party research report and does not necessarily reflect our views or values

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Sales down 7% y-o-y, headwinds from weak end-markets persist
Cut '25e-'27e sales by 4-2%, EBIT by SEK 3.5m on soft Q1
Consumer products showing good momentum


Recovery delayed, but good development in GC&MP

OrganoClick reported Q1 sales of SEK 35m (-7% y-o-y, -9% vs. ABGSCe) and EBIT adj. of SEK -2.1m (vs. ABGSCe 0.5m). The decline in sales was driven by a weak sales development in NW&FT (-16%) and FW (-18%), while GC&MP continued to show good momentum (+9%). NW&FT faced tough comps in the quarter as the company cut prices in Q2'24 in response to price pressure from fossil-based competitors, and comps were therefore on a higher price component. However, management says volumes in its existing segments have now stabilised and with comps easing from here, we expect NW&FT to return to growth in Q2'25. As for FW, the decline was driven by a significant loss of sales from the Swedish market and a continued sluggish construction market. On the other hand, sales in the German market doubled, and we expect this trend to continue, partly offsetting the weaker Swedish market and leading to a pick-up in growth in H2'25e. In terms of liquidity, the company ended the quarter with total liquidity of SEK 5.7m, which compares to R12m FCF lease adj. of SEK -17m.
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