I-tech: Customer pullback weighing on growth - ABG
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Sales -13% vs. ABGSCe, EBIT SEK 7.6m vs. ABGSCe 9.4m
* Three coating products launched in Korea in Q4
* Sizeable customer with financial constraints impacting volumes
Q4 results
I-Tech reported sales of SEK 39m, falling 13% short of our estimate (-33% y-o-y, -23% org.). Despite lower sales, costs were lower than expected and EBIT was SEK 7.6m (vs. ABGSCe 9.4m), for a margin of 20% (ABGSCe 21%). Gross margins remained stable at 57% (vs. ABGSCe 57% and 54% LY). Cash flow was strong and FCF lease adj. came in at SEK 12m (vs. ABGSCe 3.3m). In addition, the Board proposes an ordinary dividend of SEK 1.25 per share (compared to SEK 1.75 last year, including an extra dividend). This corresponds to 45% of the net profit (53% LY).
Estimates and outlook
On numbers alone, '25e-'27e sales change by -3%, and EBIT adj. changes by -4%. I-Tech's sizeable customer with financial constraints reduced volume offtake by two thirds for 2025, which had a negative impact on growth for the year. However, CMP continued to develop positively, with volumes growing 21% y-o-y. Furthermore, the company announced it has launched three new coating products that comply with upcoming legislation in Korea (low biocide content) during Q4. However, significant volume contributions from these products are expected to materialise gradually.
Valuation
The share has returned -27% L3M (vs. peer median -20% and OMXSSMAC +4%), and is currently trading at 14x-10x '26e-'27e P/E on our pre-report estimates vs. the peer median of 28x-21x. The company will host a presentation of the Q4 results at 13:00 CET.
* Three coating products launched in Korea in Q4
* Sizeable customer with financial constraints impacting volumes
Q4 results
I-Tech reported sales of SEK 39m, falling 13% short of our estimate (-33% y-o-y, -23% org.). Despite lower sales, costs were lower than expected and EBIT was SEK 7.6m (vs. ABGSCe 9.4m), for a margin of 20% (ABGSCe 21%). Gross margins remained stable at 57% (vs. ABGSCe 57% and 54% LY). Cash flow was strong and FCF lease adj. came in at SEK 12m (vs. ABGSCe 3.3m). In addition, the Board proposes an ordinary dividend of SEK 1.25 per share (compared to SEK 1.75 last year, including an extra dividend). This corresponds to 45% of the net profit (53% LY).
Estimates and outlook
On numbers alone, '25e-'27e sales change by -3%, and EBIT adj. changes by -4%. I-Tech's sizeable customer with financial constraints reduced volume offtake by two thirds for 2025, which had a negative impact on growth for the year. However, CMP continued to develop positively, with volumes growing 21% y-o-y. Furthermore, the company announced it has launched three new coating products that comply with upcoming legislation in Korea (low biocide content) during Q4. However, significant volume contributions from these products are expected to materialise gradually.
Valuation
The share has returned -27% L3M (vs. peer median -20% and OMXSSMAC +4%), and is currently trading at 14x-10x '26e-'27e P/E on our pre-report estimates vs. the peer median of 28x-21x. The company will host a presentation of the Q4 results at 13:00 CET.