Nexam Chemical (NEXAM) Q3 2024 earnings summary

Executive summary

• Gross margin reached a record 47% in Q3 2024, up from 43% year-over-year, despite a 4% sales decline due to lower volumes from major customers and seasonal effects.

• EBITDA improved to SEK 1.2 million from SEK 0.7 million in Q3 2023, reflecting ongoing profitability initiatives.

• The company remains confident in its strategy, with new customers and applications partially offsetting the sales decline.

• Nexium Chemical Holding operates in four segments: light weighting, high temperature, aesthetics, and recycling, with a strong emphasis on sustainability and recycling solutions.

• Strategic initiatives included a savings program, sharpened commercial strategy, and achieving self-funded operations.

Financial highlights

• Q3 2024 net sales were SEK 44.1 million, down 4% year-over-year; gross margin improved to 47%.

• EBITDA for Q3 2024 was SEK 1.2 million, up from SEK 0.7 million in Q3 2023.

• Cash flow from operations increased year-over-year, with a stable financial position and an unused SEK 20 million credit facility.

• Earnings per share improved to SEK -0.04 from SEK -0.08 year-over-year.

• New customer sales contributed approximately SEK 5 million in the quarter.

Outlook and guidance

• Management expects the current margin level (46%-49%) to be sustainable in coming quarters.

• Market conditions remain challenging, but the company is optimistic due to a robust pipeline and stable finances.

• No specific revenue forecast was provided for Q4, but seasonal effects are expected to be less pronounced than in Q3.

• Growth is anticipated from new projects, especially in recycling and international markets.

• Ongoing technical development and validation projects in PET recycling and composites are expected to drive future sales.