ChromoGenics Q3 2023: Robust order intake and cost reduction continue. But weak sales in the quarter
Research Note
2023-11-30
09:11
Redeye comments on ChromoGenics Q3 2023 report. The cost reduction efforts made throughout the quarter resulted in a smaller loss than anticipated. Although sales were significantly lower, a robust order intake provides a positive outlook
Fredrik Reuterhäll
Rasmus Jacobsson
Net sales were down to SEK1.6m, -54% Y/Y. This was below our estimates of SEK4.6m. Order intake was SEK8.3m, vs SEK2.1m in Q2’23.
| Chromogenics: Actuals vs Estimates | |||||
| MSEK | Q3'23A | Q3'23E | Last year | Diff vs Est. | Y/Y Growth |
| Net Sales | 1.6 | 4.6 | 3.5 | -65% | -54% |
| COGS | -1.1 | -3.5 | -7.3 | -70% | -86% |
| Gross margin | 35% | 44% | n/a | -9pp | n/a |
| OPEX | -11 | -13.8 | -14.9 | 20% | -26% |
| EBITDA | -9.2 | -11.7 | -11.9 | 22% | -23% |
| EBIT | -10.0 | -12.5 | -12.8 | 21% | -22% |
| Source: Redeye Research |
COGS was SEK-1.1m vs. our estimate of SEK-3.5m; the deviation is mainly due to lower sales. Gross margin, adjusted for capitalized own work and change in inventory, was 35%. EBIT was SEK-10m. This was better than our estimates of SEK-13m. Cash position at the end of the quarter is SEK20m, vs SEK5.6m in Q2’23 due to capital increase during the quarter.
ChromoGenics had an order intake of SEK8.3m in Q3 2023, expected to be delivered in the coming quarters. Moreover, an order of SEK5m to be delivered in the first half of 2024 will support sales next year.
With a number of new collaboration agreements, Smartglass International being the most important one, ChromoGenics is in a better position than it has been for a long time. It continues to be a challenging market, but with the rights issue completed, ChromoGenics has a cash reserve of 20 million SEK. The operational cash flow for the quarter was -2.6 million SEK, indicating effective cost control.
We will review the Q3 report in more detail and talk with management about the outlook. Redeye will publish updated sales estimates and valuation range in the next update.
Disclosures and disclaimers