Equity Research Svenska Aerogel, Q4 2024: Growing n.o customers and share issue in Q2

Svenska Aerogel Holding AB’s (“Svenska Aerogel” or the “Company”) sales in Q4 2024 exceeded our estimates. At the same time, the Company has announced a significant new share issue. According to CEO Tor Einar Norbakk, 2024 ended with a 60% increase in the number of customer projects compared to the previous year. Carlsquare Equity Research lowers the justified value to 15.0 (15.0) SEK per share for the next 6–12 months due to increased uncertainty regarding when revenues can be expected to accelerate.

Lower costs and new supplier agreements can improve revenues

In Q4 2024, Svenska Aerogel generated revenues of just over 1.0 MSEK. Our revenue estimate was 0.7 MSEK, making the actual outcome slightly higher than our estimates. The Company reported an EBITDA of minus 5.7 MSEK, compared to our estimate of minus 4.7 MSEK. EBIT came in at minus 7.7 MSEK, versus our estimate of minus 6.7 MSEK.

CEO Tor Einar Norbakk states in the report that the number of customer projects increased by approximately 60% during 2024, with a larger share of customers entering the ramp-up phase. According to the report, several of these customers are preparing for product launches in which Svenska Aerogel’s materials and technology are said to play a central role. At the same time, a new segment, Advanced, is being introduced, targeting customers with highly innovative applications. This includes, among other things, thermally insulating textiles, where Outlast® Technologies launched its product containing Quartzene® globally in January.

The night before the Q4 2024 report, the Company announced a rights issue of 42.7 MSEK, which was in line with our expectations following the Q3 2024 report. The subscription period runs from March 10 to March 24, 2025. The issue is secured to 57.5%, corresponding to a guaranteed liquidity of 24.6 MSEK before issuance costs. The subscription price in the issue is 2.25 SEK per share. If fully subscribed, the dilution will be approximately 66.7%. Given the current market conditions for the rights issue, we do not expect the subscription rate to exceed the secured level. In our updated scenario, we therefore assume that the Company will only receive the 24.6 MSEK that is secured. Given this, the Company may require additional capital injection as early as the first half of 2026.

In our updated scenario, we have kept our revenue estimates for 2025 and beyond relatively unchanged. Although the number of agreements is increasing and existing customers are entering a new phase, we see significant uncertainty regarding when revenues will actually start to accelerate. We estimate a net revenue of approximately 5.8 MSEK for the full year 2025. In our adjusted scenario, we assume sales of around 140 tons of Quartzene® and a positive result in 2028.

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