<a id="bm-comp-113c5e49-37b2-4552-8bdf-dc9291104c76" name="bm-comp-113c5e49-37b2-4552-8bdf-dc9291104c76" class="BMCustomAnchor"></a><table><tr><td bm-component-id="113c5e49-37b2-4552-8bdf-dc9291104c76" style="vertical-align: top; width:100.000000%;"><ul><li>Sales down 14% y-o-y as restaurant market headwinds intensify</li><li>GC&MP strength improves mix, cost control, EBIT held up better</li><li>We reduce '24e-'26e sales by 4-8% on soft Q3 and NW&FT outlook</li></ul></td></tr></table><a id="bm-comp-a68cbf8f-5da8-4e7e-ab8e-78e06237da35" name="bm-comp-a68cbf8f-5da8-4e7e-ab8e-78e06237da35" class="BMCustomAnchor"></a><table><tr><td bm-component-id="a68cbf8f-5da8-4e7e-ab8e-78e06237da35" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3"><font color="#000000">Q3 results</font></h3><p>The Q3 numbers came in below our expectations, with sales down 14% y-o-y, and adj. EBIT down to SEK -3.0m (-2.8m). The main difference maker compared to recent quarters was intensified headwinds in the restaurant and hotel markets, causing a 31% sales drop in the NW&FT segment. The company also stated that it had to implement some price reductions on its binders due to falling prices of fossil-based alternatives. EBIT held up better due to good cost control and a better mix thanks to the continued growth in the higher margin GC&MP segment. The company ended the quarter with a cash balance of SEK 4m, and unutilised overdraft facilities of SEK 5m, compared to a R12m lease adj. FCF of SEK -13m.</p><h3 class="bm-h3"><font color="#000000">Estimates and outlook</font></h3><p>GC&MP continues to deliver strong growth, and management expects this to continue into '25, but simultaneously, it expects the restaurant market to remain weak and to continue to affect NW&FT negatively. There are however customer projects targeting other markets, which it believes can generate revenue in '25. FW has been weak in tandem with the construction market for the past two years, and should start to stabilise from here. We reduce '24e-'26e sales by 4-8% on the weaker Q3 numbers, and the soft outlook provided for the NW&FT segment.</p><h3 class="bm-h3"><font color="#000000">Valuation</font></h3><p><font color="#000000">The share is down 8% L3M (vs. peers +6%, Swedish small cap -10%), and is currently trading at 2.6-2.0x '24e-'26e EV/Sales vs. the peer median of 2.5-1.7x. As we expect growth in the NW&FT segment to be delayed by the current market weakness, we reduce our fair value range to SEK 2.0-3.0 (2.0-4.0).</font></p></td></tr></table>