Sales above expectations on strong FW performance

Long-term estimates relatively unchanged

Value range unchanged at SEK 5-16

Strong report with sales 12% above our expectations
Organoclick’s Q1 report was strong. Sales grew by 33% and came in at SEK 30m, 12% above our expectations of SEK 26m. On a segment basis, we continue to see the legacy business, i.e. FW and GCM, outperform. The two segments beat our expectations by 21% (FW) and 4% (GCM), respectively. We continued to be negatively surprised by the BC segment, which grew by a meagre 2% due to capacity constraints. NWT grew by 158% from low levels. While the announced deal in February has not started to show in numbers, we note that the company’s existing customers are increasing the number of products with ORGC’s binders. As we know, one of the already existing customers is a top-10 non-woven producer in terms of size globally, which could turn out to become an attractive growth addition. All in all, the operational highlights from the report were in our view the FW growth, with a nice addition from Germany, prompting us to raise our estimates by 6% for the segment. In total, we raise our sales forecasts by 4-1% for ‘21e-‘23e.

Organisational building leading to higher opex
EBIT came in 4% above our expectations. The company has begun to employ management for each segment and has invested in a selling organization. With opex coming in above our expectations, we raise our opex estimates by 5-2% for ’21-23, explaining our estimate changes by lowering EBIT by 0.8m for 2022e. in sum, we make miniscule changes to our long-term estimates, leaving our ‘23e EBIT unchanged. Hence, we also leave our value range at SEK 5-16 per share untouched.

Exciting times in NWT with new shoe product
During the quarter, Organoclick announced the launch of OrganoTex shoe products. The addition is an attractive one, as the distribution network is already built up through its older OrganoTex products. We estimate OrganoTex to post annual sales of c. SEK 5m today with a gross margin of >
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