Margin pressure partly offset by lower opex - Q3 initial

Q3 2026 proved both surprising and unsurprising; sales growth was slightly lower than we expected, while both the gross margin and opex declined Y/Y as anticipated, but by more than we had estimated. Instability in the Strait of Hormuz affected prices for chemicals, packaging and freight, weighing on the gross margin. Clemondo has started to raise prices, although the effects have yet to fully materialise. Management also emphasised its continued focus on growth, alongside greater efficiency and cost control.

Q3 is a seasonally slow quarter. We do not place too much emphasis on the sales-growth deviation, given that Q3 is typically the weakest quarter for demand. Both of Clemondo’s largest segments, Medical Care and Vehicle, reported lower growth than expected. In contrast, Contract Manufacturing delivered stronger growth, with the company using this segment to help balance production volumes.

Gross margin declined. As highlighted ahead of the quarter, we expected the gross margin to decline Y/Y in Q3. It came in at 32.6%, versus our estimate of 37.9%. Clemondo has implemented price increases for certain products, but the full effect has not yet been realised. For government customers, contracts are fixed-price, meaning the Medical Care segment, representing c40% of sales in the period, may have had an additional negative impact.

Lower opex offset some of the gross-margin pressure. Despite slightly lower sales and a significantly weaker gross margin, EBIT was only SEK1m below our estimate. This was driven by opex coming in SEK3.3m lower than expected, which may partly reflect seasonality alongside the recently announced cost focus. Positive operating cash flow, supported by underlying operations and working-capital movements, resulted in positive free cash flow during the period.