OssDsign: Weak gross margin - ABG
This is a third party research report and does not necessarily reflect our views or values
* In line with pre-announced numbers
* Adj. EBIT -2% vs ABGSCe
* No change in outlook, cautious near-term
Q1 results
OssDsign pre-announced preliminary Q1 sales and an EBIT range on 10 April. The reported figures are in line with the preliminary figures with Q1 sales coming in at SEK 36.9m (0% vs pre-announced SEK 36.9m, 0% ABGSCe SEK 36.9m, no consensus) and adj. EBIT of SEK -13.4m (pre-announced SEK -12 to -14m, -2% vs ABGSCe of -13.1m). The miss on EBIT is mainly attributable to a lower than expected gross margin as sales came in line and opex came in slightly lower. Reported gross margin in Q1 was 91.6% (vs ABGSCe 95.5%). The 'sales and commission and fees' as percentage of sales came in at 47.1%, very close to our forecast (47.0%). The organic sales growth in Q1 amounted to -3.6%, in line with the pre-announced figure. (ABGSCe -3.6%).
Estimates
Company is not providing any outlook for 2026 or changing its mid-term financial targets of reaching sales of SEK >400m by 2028 and to become cash flow and EBIT positive in the second half of its 'Strategy Period' (2025-2028). However, management talk about an expected improved commercial momentum in H2'26. We have assumed 0% organic sales growth in Q2'26, up from -3.6% in Q1, and then an acceleration to 10-15% in H2'26. Based on the deviation on adj. EBIT in Q1, we expect FY'26e EBIT to be revised down by mid-single digit.
Share price view
The stock has been soft into Q1, -10% (-5d), down 30% since pre-announcement (10 April) and down 65% YTD. Based on the small miss on the adj EBIT and cautious near-term outlook, we expect to see a small negative share price reaction today.
* Adj. EBIT -2% vs ABGSCe
* No change in outlook, cautious near-term
Q1 results
OssDsign pre-announced preliminary Q1 sales and an EBIT range on 10 April. The reported figures are in line with the preliminary figures with Q1 sales coming in at SEK 36.9m (0% vs pre-announced SEK 36.9m, 0% ABGSCe SEK 36.9m, no consensus) and adj. EBIT of SEK -13.4m (pre-announced SEK -12 to -14m, -2% vs ABGSCe of -13.1m). The miss on EBIT is mainly attributable to a lower than expected gross margin as sales came in line and opex came in slightly lower. Reported gross margin in Q1 was 91.6% (vs ABGSCe 95.5%). The 'sales and commission and fees' as percentage of sales came in at 47.1%, very close to our forecast (47.0%). The organic sales growth in Q1 amounted to -3.6%, in line with the pre-announced figure. (ABGSCe -3.6%).
Estimates
Company is not providing any outlook for 2026 or changing its mid-term financial targets of reaching sales of SEK >400m by 2028 and to become cash flow and EBIT positive in the second half of its 'Strategy Period' (2025-2028). However, management talk about an expected improved commercial momentum in H2'26. We have assumed 0% organic sales growth in Q2'26, up from -3.6% in Q1, and then an acceleration to 10-15% in H2'26. Based on the deviation on adj. EBIT in Q1, we expect FY'26e EBIT to be revised down by mid-single digit.
Share price view
The stock has been soft into Q1, -10% (-5d), down 30% since pre-announcement (10 April) and down 65% YTD. Based on the small miss on the adj EBIT and cautious near-term outlook, we expect to see a small negative share price reaction today.