• Q4e sales SEK 50m, flat y-o-y, EBIT SEK -0.6m (-2.1m)
• Somewhat more cautious on Perf. Chem. sales, PET market weak
• Working to reduce customers' costs to help sales in weak economy

Q4 expectations

We expect sales of SEK 50m for Q4, roughly in line with last year, alongside EBIT of SEK -0.6m (-2.1m). The latter figure is improving y-o-y, but has not quite managed to break even as the continued weakness in the PET-foam market leads us to take a somewhat more cautious view on Performance Chemicals sales, pencilling in -5% organic growth y-o-y. For Performance Masterbatch, which is seeing somewhat better momentum, we have +5%.

Estimate changes

We partially extrapolate our more cautious view on Performance Chemicals sales into '25e, where we expect a slightly slower growth rate of 15% compared to our previous estimate of 25%, which causes '25e-'26e group sales to come down ~6% and in turn affects EBIT negatively by SEK 2-3m.

Company valuation

We remain impressed by the cost-cutting journey Nexam has successfully carried out, but now need to see a return to growth in Performance Chemicals. We believe Nexam is making progress towards this end behind the scenes, with interesting customer projects and patents announced in press releases providing some hints, but the generally weak economic environment might continue to hamper any reignition of momentum in the near term. Given the soft economic climate, Nexam is working to bring down costs for its customers in order to improve its business case. The company is currently trading at 1.8-1.2x '24e-'26e EV/Sales vs. peers at 1.9-1.1x. We revise our fair value range to SEK 3.0-5.0 (3.5-5.0) on the lower estimates and a higher market discount rate.