<a id="bm-comp-7a506ba8-5461-4e15-9a90-aa4d68d70ca7" name="bm-comp-7a506ba8-5461-4e15-9a90-aa4d68d70ca7" class="BMCustomAnchor"></a><table><tr><td bm-component-id="7a506ba8-5461-4e15-9a90-aa4d68d70ca7" style="vertical-align: top; width:100.000000%;"><ul><li>Sales -12% and EBIT -2m vs. ABGSCe</li><li>Weak performance in NW&amp;FT, as market headwinds intensify</li><li>Expect continued weakness in NW&amp;FT, gradual stabilisation in FW</li></ul></td></tr></table><a id="bm-comp-8b2593fc-b8ad-4a1c-ac70-edd40aed41ae" name="bm-comp-8b2593fc-b8ad-4a1c-ac70-edd40aed41ae" class="BMCustomAnchor"></a><table><tr><td bm-component-id="8b2593fc-b8ad-4a1c-ac70-edd40aed41ae" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3"><font color="#000000"><strong>Q3 results</strong></font></h3><p><font color="#000000">Sales came in at SEK 29m (-12% vs. ABGSC 33m), -14% y-o-y (-14% organic). Adj. EBIT was -3m (-317% vs. ABGSC -1m) for a margin of -10% (ABGSC -2%). The company produced lease adj. FCF of -4m, and ended the quarter with a cash balance of 4.3m vs. R12m FCF -11.1m, and SEK 25m in unutilised bank overdraft facilities. The miss was driven by weak performance in the NW&amp;FT segment, which faced intensified headwinds from the soft restaurant and hotel markets, forcing the implementation of some price reductions, as fossil-based alternatives fell in price.</font></p><h3 class="bm-h3"><font color="#000000"><strong>Estimate changes and outlook</strong></font></h3><p><font color="#000000">On the Q3 numbers alone, '24e-'26e sales come down 3% and '24e adj. EBIT comes down by SEK 2m. Management states that the restaurant market is likely to remain weak for the company's nonwoven binders, but that it also has several customer projects in other segments that it believes can generate revenue in 2025. For Functional wood, it believes sales will stabilise and gradually improve after two years with weak development for the building market.</font></p><h3 class="bm-h3"><font color="#000000"><strong>Valuation</strong></font></h3><p><font color="#000000">The share is down 3% L3M (vs. peers +7%, Swedish small cap -9%), and is currently trading at 2.5-1.8x '24e-'26e EV/Sales on our pre-report estimates.</font></p><table id="bm-img-5ad88b98-9fd3-4dc1-b2f2-94c99b16313a" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Deviation table</td></tr><tr><td><img bm-img-encrypt="5ad88b98-9fd3-4dc1-b2f2-94c99b16313a" bm-img-original-height="610" bm-img-original-width="603" bm-img-svg="image:image_upload/83110_f3709a3f-f0d8-44eb-94a9-001244886cc4.svg" bm-img-width-hint="82.94%" id="bm-id-373d3cc0-485f-4a4c-9901-a7d4a00d3bcc" src="https://abgsc.bluematrix.com/images/image_upload/83110_f3709a3f-f0d8-44eb-94a9-001244886cc4_603.png" svg="/nas/web/clients/abgsc/images/image_upload/83110_f3709a3f-f0d8-44eb-94a9-001244886cc4.svg" width="603" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier Estimates, Company Data</td></tr></table></td></tr></table>