I-Tech (ITECH) Q3 2024 earnings summary

Executive summary

• New CEO Markus Jönsson appointed in September 2024, bringing experience in specialty chemicals and business development, with a focus on growth and market expansion.

• The company operates in the shipbuilding and maintenance industry, focusing on antifouling coatings with Selektope® technology, positioned as a sustainable solution for reducing marine fouling and CO2 emissions.

• Achieved 27% sales growth in Q3 2024 compared to Q3 last year, with net sales reaching 40,766 TSEK and operating margin at 23%.

• Diversification efforts resulted in over one-third of sales from a broader customer base, with significant growth outside main customer CMP.

• Market penetration remains low relative to the global fleet, with significant growth potential, especially in Asia.

Financial highlights

• Q3 2024 net sales reached 40,766 TSEK (32,175 TSEK in Q3 2023), with operating income at 9,436 TSEK and net income at 7,790 TSEK.

• Gross margin stable at 52% for Q3 2024; operating margin at 23% (down from 25% last year); EBITDA for Q3 2024 was 11,500 TSEK.

• Cash and cash equivalents at period end: 94,264 TSEK, with a strong equity ratio of 87% and cash liquidity of 621%.

• Net working capital nearly doubled since year-end 2023 due to prepayments and higher receivables, rising to 19,000 TSEK.

• Year-to-date turnover as of September already exceeds the previous full year.

Outlook and guidance

• Favorable market conditions and new customer product launches expected to support continued growth, especially in Asia.

• Ongoing business development initiatives aim to expand into adjacent and new markets, with regulatory approvals progressing in Malaysia, USA, and New Zealand.

• Regulatory process in the EU for Selektope® will continue to absorb attention and resources into the first half of 2025.

• Visible gross margin improvements from new suppliers expected in Q4 2024 or H1 2025.

• Short- and medium-term sales growth expected to remain strong, with limited short-term impact from the EU re-approval process.