OrganoClick: ABGSC Investor Days feedback - ABG
This is a third party research report and does not necessarily reflect our views or values
Three NWT contracts in late-stage negotiations
No promises made for a contract in Q4’21
Wood prices are easing, positive for FW
Focus remains on new NWT contracts going into 2022This morning, we hosted Mårten Hellberg, OrganoClick’s CEO, at our Investor Days seminar. Besides giving a general overview of OrganoClick as a company, Mr. Hellberg also gave a status update regarding potential new contracts within the Non-woven & Technical Textiles (NWT) segment. He specified that there are currently three contract negotiations in a late-stage phase, but made no promises as to if any of these will be signed and announced by year-end. He also did not specify the exact size of the contracts; however our belief is that these contracts are, on average, roughly similar in size to the existing Duni contract (~SEK 30m annual sales each at full volume).
Headwinds in FW from wood prices should diminish in H1’22
For the last few quarters, the Functional Wood (FW) segment has struggled due to higher wood prices negatively affecting gross margins. The company is now well on their way to renegotiating contracts within this segment to push cost increases on to customers. Moreover, wood prices have dipped recently, and Mr. Hellberg expects that 2022 should see a more normalised gross margin.
37% sales CAGR ’20-’23e, NWT at 40% of sales in ’23e
On our current estimates, we forecast sales of SEK 251m in ’23e, for a ’20-’23e sales CAGR of 37%. In our estimates we have included one more NWT contract (á SEK 30m per year) signed in Q4’21, which will ramp-up fully by Q3’22. Moreover, we have included two more contracts, one signed in H1’22 and one in H2’22.
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