* Q3 sales -9%, EBIT -20% vs. ABGSCe on timing and tech costs
* We lower ‘26e-‘28e sales by 3% and EBIT adj. by 4%/6%/5%
* EU vote outcome expected within a few weeks
Q3 affected by order timing and technology costs
Q3 sales were SEK 49m (-9% vs. ABGSCe), representing 18% organic growth. Management attributed the q-o-q decline to order timing, as a few customers placed large orders. Growth was driven mainly by the second-largest customer, which is now at a sustainable run rate, as well as smaller customers. The gross margin was strong at 60% (57% LY), as Q2 price adjustments and supplier work mitigated elevated raw material prices. EBIT was SEK 13m (ABGSCe 17m), including a one-off purchase price for an aquaculture technology (undisclosed, not adjusted for) and the annual minimum fee for the Titanium Technology licence, which will be recurring and performance-based. We estimate the two at ~SEK 2m combined.
Estimate changes and outlook
We lower ‘26e-‘28e sales by 3% on lower ‘26e organic growth and a weaker FX assumption for ‘27e. On EBIT adj., we cut ‘26e/’27e/’28e by 4%, 6% and 5%, mainly on lower sales, while '26e is also affected by Q3 technology costs, which we do not adjust for. We keep the EOGRT study costs unchanged (SEK 5m in Q4'26e and SEK 5m in '27e), although the timing remains uncertain given that no CRO is yet in place.
EU vote outcome within weeks
Voting by member states closes on 21 October, with the outcome usually announced within one to two weeks, followed by the Commission's signature. If negative, I-Tech expects the entry into force to likely occur within this year, with a 180-day grace period. Management sees a direct impact of ~5% of the addressable market, as EU port calls remain allowed, and has prepared a legal challenge. The company is trading at ‘27e-‘28e EV/EBIT of 6x-4x & 10x-8x P/E, ~50-70% below peers.