* Expected return to growth pushed out to Q4
* Adj. EBIT cut by 2.6%-3.6% for '26e-'28e
* Fair value range revised down to SEK 3.8-6.2 (4.0-6.3)
Small miss on sales, but lower opex in Q2
OssDsign reported mixed results in Q2: sales were 1% below expectations, but adjusted EBIT was 10% above, despite a lower gross margin (92.1% vs. ABGSCe 95.0%). The organic decline was 16% (ABGSCe -15%) in Q2, driven by the transition of the US sales team and lower activity levels among certain key accounts during contract negotiations. Management highlighted that leading indicators for commercial momentum are pointing in the right direction, suggesting a return to growth later this year. However, Q3 will be negatively impacted by the holiday period in the US, which accounts for 100% of sales. Opex was below our forecast at SEK -46.8m (ABGSCe SEK -49.4m), with sales commissions and fees coming in at 44.8% of sales (vs. ABGSCe at 47.0%). Cash flow generation was better than expected, i.e. less negative, with OCF of SEK -11.8m vs. ABGSCe SEK -15.7m.
Sales development in Q3 expected to be subdued
In our view, the main negative surprise in the Q2 report was the commentary related to the near-term sales development for Q3. After two quarters with flattish sales development, we had expected to see a sequential improvement in Q3 based on management's actions, but now it seems like that improvement has been pushed out to Q4. We are now forecasting an 18% organic decline for Q3, followed by a return to positive organic sales growth in Q4 at 5%.
Fair value range tweaked down to SEK 3.8-6.2 (4.0-6.3)
Based on our updated estimates, we lower our DCF-based fair value range to SEK 3.8-6.2 (4.0-6.3). A return to commercial momentum with improved sales growth in Q4'26 remains the key catalyst.