• Sales +5% and EBIT adj. +3% vs. ABGSCe
• Strong momentum in Selektope sales
• Diversified customer base - CMP now two thirds of sales

Q3 results

Sales came in at SEK 41m (+5.2% vs. ABGSCe 39m, -0.6% vs. cons. 41m), +27% y-o-y (+30% org.). EBIT was SEK 9.4m (+5.2% vs. ABGSCe 8.9m), for a margin of +23% (ABGSCe +23%). EBIT adj. was SEK 11m (+2.8% vs. ABGSCe 11m), for a margin of +27% (ABGSCe +28%). EPS came in at SEK 0.65 (0% vs. ABGSCe), +9% y-o-y. FCF lease adj. came in at SEK 10m (-37% vs. ABGSCe 17m), -39% y-o-y. During the quarter Markus Jönsson formally took office as CEO of I-Tech. In connection with this, the company experienced extra costs and an increase in personnel expenses. Despite this, the company maintained its high margin.

Customer base diversification continues

We expect that cons. will only make small changes to '24e-'26e. I-Tech continues to grow with strong momentum in Selektope sales, driven by favourable macroeconomic conditions and the market success of its new and existing customers. We find it promising that the customer base diversification continued during the quarter, with more than third of total sales now coming from customers other its largest customer, CMP. The ongoing regulatory process continues to be an issue for I-Tech and in its report, the company highlights that the risk of re-registration of Selektope in the EU market threatens its good reputation and long-term market potential, but that it is important to note that Europe only accounts for less than 10% of I-Tech's sales and that this is unlikely to impact medium-term sales growth.

Valuation

The share has returned +16% L3M (vs. peer median -6.4% and OMXSSMAC -14%), and is currently trading at 14x-10x '24e-'26e P/E on our pre-report estimates vs. the peer median of 37x-18x.The company will host a presentation of the Q2 results at 10:30 CET.