I-tech - A pause in pace, not the story

• Q4: -23% organic growth (vs. ABGSCe -12%)
• Financially constrained customer weighed on ’25 org. growth
• Long-term potential intact, expect continued CMP growth in '26e

2025, a mixed financial year

Q4 organic growth came in below our estimate at -23% (vs. ABGSCe -12%, +120% in Q4'24). This implies FY’25 organic sales growth of +1%, a sharp slowdown from the +47% delivered in FY’24. The weaker performance was primarily due to a sizeable customer facing financial constraints, which led to a 2/3 reduction in volume offtake during FY’25. This has weighed on I-Tech’s volumes since Q2’25. Moving forward, we expect this customer’s volumes to be limited in H1’26, followed by an anticipated gradual recovery in H2’26. For '26e, we forecast +15% organic growth, driven by 1) continued CMP volume growth, 2) a gradual recovery in the large customer’s volumes and 3) growth among smaller customers (e.g. PPG, Jotun, Kansai Paints).

Estimate changes

We cut '26e-'27e sales and EBIT by 5% and 7-5%, respectively, on the back of the weaker than expected Q4 report.

We remain positive on the long-term potential

While organic growth was weaker in FY’25, we continue to believe I-Tech is gaining market share. Importantly, CMP volumes grew +21% in FY’25, and we expect CMP to continue growing volumes in '26e. Additionally, we find it positive that China’s share of sales increased to 26% in FY’25 (13%), suggesting improving penetration in the Chinese market, where I-Tech has exposure to the dry-docking market, which is materially larger than the currently dominant newbuild market. The company is trading at 7x-4x EV/EBIT on '26e-'27e, and 11x-9x P/E, i.e. ~60-70% below peers.