Nexam Chemical (NEXAM) Q2 2024 earnings summary

Executive summary

• Achieved highest-ever EBITDA in Q2 2024, with sales up 29% year-over-year to SEK 53.6 million and positive cash flow.

• Profitability improved due to cost-saving programs, increased in-house production, and more cost-effective products.

• All business segments showed growth, supported by a sharpened commercial strategy.

• Company is now cash flow positive and funds operations with internally generated cash.

• Delivery reliability and product quality remained strong despite supply chain disruptions.

Financial highlights

• Q2 2024 sales reached SEK 53.6 million, up from SEK 41.6 million in Q2 2023.

• Gross margin improved to 46% from 43% a year ago, marking six consecutive quarters of margin growth.

• EBITDA was SEK 2.62 million, a turnaround from SEK -8.3 million in Q2 2023 and the highest in company history.

• Cash flow from operations was SEK 4.5 million; SEK 20 million credit facility remains unutilized.

• Earnings per share improved to SEK -0.03 from SEK -0.12 year-over-year.

Outlook and guidance

• Positive outlook for H2 2024 and beyond, with expectations of continued growth and increasing profitability.

• Management expects to maintain at least a 46% coverage ratio throughout 2024.

• Anticipates seasonally weaker Q3 but confidence in continued positive development and future sales growth.

• Breakeven on EBIT level is within reach with a few million SEK more in quarterly sales.

• Growth to be driven by new customer contracts and expansion with existing customers, especially in recycling and high temperature segments.