Release Date: October 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nexam Chemical Holding AB (OSTO:NEXAM, Financial) reported an increase in contribution margin, reaching 47% this quarter, up from 43% in the same quarter last year.
- The company has implemented a strategic retake, focusing on market development and a sharpened commercial strategy, which has allowed them to fund operations with their own cash flow.
- Nexam Chemical Holding AB has secured a significant order from a long-standing customer in the USA worth SEK17 million over four quarters.
- The company has a stable financial situation with an unused credit facility of about SEK20 million, providing a strong base for future growth.
- Nexam Chemical Holding AB has expanded its customer base and increased sales activities, particularly in Central Europe, with new PET sheet recycling customers ramping up production.
Negative Points
- Nexam Chemical Holding AB experienced a temporary setback in sales this quarter, attributed to seasonal effects and reduced call-offs from major customers.
- The market temperature is described as cold, with some customers facing difficulties, impacting sales volumes.
- Despite the positive EBITDA, the company expressed dissatisfaction with the current sales level, indicating room for improvement.
- The company does not provide revenue forecasts, making it challenging for investors to predict future performance.
- The project in India is still in the early stages, with technical approvals but slow progress towards significant launches and production.
Q & A Highlights
Q: How important was it to achieve a positive EBITDA of SEK1.2 million compared to SEK0.7 million in the same quarter last year?
A: Ronnie Tornqvist, CEO: It was very important as it shows that we've been doing the right things. Despite being disappointed with sales, we are happy to have improved our profit compared to last year.
Q: Some larger customers ordered significantly lower volumes this quarter. Why do you believe this is temporary?
A: Ronnie Tornqvist, CEO: The production is ongoing, and there is a long-term growth in the segment. The reduction seems temporary as efforts are being made to return to normal sales levels.
Q: The contribution margin was the best since significant volumes began. Can this level be expected going forward?
A: Ronnie Tornqvist, CEO: The improvement is due to continuous optimization efforts. We expect to maintain a margin between 46% to 49% in the coming quarters.
Q: Can you provide details on the contribution of new customers to sales this quarter?
A: Marcus Nyberg, CFO: New customers contributed approximately SEK5 million this quarter. This includes both new customers and new products sold to existing customers.
Q: Could you elaborate on the new business manager, Johannes, and the motivation behind his hiring?
A: Ronnie Tornqvist, CEO: Johannes was hired for his technical expertise and commercial acumen, particularly in the aesthetics and performance masterbatch segments. His presence strengthens our market position in Germany and surrounding regions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
