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Freemelt - First eMELT delivery in Q2e

31 juli 2024

<a id="bm-comp-b8819d07-6b4f-40d3-a1da-30a44b3de2ca" name="bm-comp-b8819d07-6b4f-40d3-a1da-30a44b3de2ca" class="BMCustomAnchor"></a><table><tr><td bm-component-id="b8819d07-6b4f-40d3-a1da-30a44b3de2ca" style="vertical-align: top; width:100.000000%;"><ul><li>Q2e: one eMELT-iD and two Freemelt ONE deliveries</li><li>Sales of SEK 13.7m (5.5m) and adj. EBIT of SEK -5.8m (-11.0m)</li><li>Collaborations: Sandvik, 3DMX, Georgia Tech; fusion study</li></ul></td></tr></table><a id="bm-comp-dc0eb39e-aed7-4a6c-8717-519b650b249c" name="bm-comp-dc0eb39e-aed7-4a6c-8717-519b650b249c" class="BMCustomAnchor"></a><table><tr><td bm-component-id="dc0eb39e-aed7-4a6c-8717-519b650b249c" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q2e: First eMELT delivery</h3><p>During Q2, we expect one eMELT-iD and two Freemelt ONE deliveries to have been made, resulting in sales of SEK 13.7m (5.5m). With costs remaining fairly stable, we forecast adj. EBIT of SEK -5.8m (-11.0m). While we expect FCF to remain negative, this will be offset by the SEK 60m share issue in the quarter, leaving the company with a cash balance of SEK 58m, vs. R12m lease adj. FCF of SEK -59m.</p><h3 class="bm-h3">Continues entering interesting partnerships</h3><p>As order intake has been somewhat slower than expected, we reduce '24e-'26e sales by 7-5%, and with largely unchanged costs, this results in SEK 2-4m lower EBIT. Nevertheless, Freemelt is clearly making progress, as Q2 marks the first eMELT sale, and the company continues to enter interesting collaborations and projects, such as the Sandvik, 3DMZ and Georgia Tech Manufacturing 4.0 partnerships, as well as the North American Fusion Energy tungsten feasibility study. We expect these initiatives to start converting into additional machine sales over the estimate period.</p><h3 class="bm-h3">Trading at 4.0-1.5x EV/sales</h3><p><font color="#000000">The share is up 26% L3M (vs. peers -39%, OMXSSMAC +11%), and is currently trading at 4.0-1.5x '24e-'26e EV/sales. We reiterate our fair value range of SEK 5-15.</font></p></td></tr></table>

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