In This Article:
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Sales: SEK48.6 million in Q4, slightly lower than the previous year.
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Gross Margin: Increased to 47% from 44% a year ago.
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EBITDA: SEK2 million in Q4, compared to SEK1.6 million a year ago.
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Cash Flow: Negative SEK5.5 million in Q4, improved from negative SEK7.6 million a year ago.
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Annual Sales: Approximately SEK200 million, up from SEK190 million last year.
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Annual EBITDA: SEK8.1 million, compared to negative SEK5.9 million the previous year.
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Unused Credit Facility: Increased to SEK25 million, still unutilized.
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Contribution Margin: Stable at 47.4%.
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Breakeven for EBITDA: Reduced from SEK55 million to SEK45 million per quarter.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nexam Chemical Holding AB (STU:NC4) has achieved eight consecutive quarters of improving gross margins, reaching 47.4%.
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The company has a strong financial stability with an unused credit facility increased from SEK20 million to SEK25 million.
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Nexam Chemical has a robust pipeline of business development activities, particularly in the recycling segment, with 60 paying customers.
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The company has successfully reduced its breakeven EBITDA level from SEK55 million to SEK45 million per quarter.
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Nexam Chemical's innovative additives for recycling can significantly reduce raw material costs for customers, offering a strong economic incentive.
Negative Points
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Sales in the fourth quarter were slightly lower than the previous quarter, impacted by reduced demand in the PET-foam segment.
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The cash flow for the quarter was negative at minus SEK5.5 million, attributed to late incoming raw materials and seasonal payment delays.
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There is uncertainty in the lightweight market, particularly in Europe and North America, affecting sales predictability.
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The company faces challenges in getting customers to adopt its reactive recycling solutions due to technical and commercial hurdles.
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Nexam Chemical's revenue potential per project in recycling requires a higher number of customers compared to other segments like high-temperature and lightweighting.
Q & A Highlights
Q: You mentioned that you grew your gross margin for the eighth consecutive quarter. How far can you go with this growth? A: It depends on the product mix and cost control. We can't promise continuous growth every quarter, but we believe we can maintain the current level long-term. - Marcus Nyberg, CFO
Q: Could you describe the development with the large customer with lower deliveries mentioned in Q3 and Q4? A: The second half of the year was worse than the first. We face uncertainty in the lightweight market short-term, but orders are coming in. The European and North American markets are weak, but there's strength in Asia, particularly India and China. - Ronnie Tornqvist, CEO