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Introduction & Market Context
Nexam Chemical Holding AB (STO:NEXAM) presented its Q2 2025 results on July 11, 2025, revealing a mixed financial performance with the company’s stock dropping 5.9% to 3.83 SEK following the presentation. The chemical additives manufacturer continues to position itself as a key player in the circular plastics economy, with patented solutions covering approximately 50% of the global plastics market.
The company operates in a market where recycled plastics are expected to grow substantially according to OECD and EU targets, though fossil-based plastics still dominate the global market. Nexam’s additives enable manufacturers to increase the use of recycled materials while maintaining performance standards, addressing growing regulatory and consumer pressure for more sustainable plastic products.
Quarterly Performance Highlights
Nexam Chemical reported Q2 2025 net sales of 54.3 million SEK, a slight increase from 53.6 million SEK in Q2 2024. The company maintained a strong gross margin of 47%, up from 46% in the same period last year. However, EBITDA declined to 1.3 million SEK compared to 2.6 million SEK in Q2 2024, reflecting ongoing challenges in certain segments.
As shown in the following business update summary:
The financial results reveal contrasting performance across business segments. While the recycling and Central/Eastern European markets showed strong growth, the lightweight segment experienced a significant 22% year-over-year decline due to persistently low end-customer demand.
Recycling Segment Growth
The standout performer in Nexam’s portfolio was the recycling segment, which achieved another quarter with over 50% quarter-over-quarter growth. Q2 2025 sales in this segment reached 5.8 million SEK, up from 2.6 million SEK in the previous year, now representing over 10% of total company sales.
The following chart illustrates the impressive growth trajectory of Nexam’s recycling business:
Nexam’s "Reactive Recycling" technology enables customers to increase the use of recycled materials while maintaining product quality. The company highlighted a strong value proposition, demonstrating how its additives can help customers achieve a 25% reduction in final product costs despite the additional cost of the additive itself.
This compelling cost-benefit analysis is illustrated in the following slide:
The company also presented a case study of a global food packaging producer that began using Nexam’s recycling solutions, progressing from initial trials in Q2 2024 to a current run rate of approximately 30,000 kg per annum:
Geographic Expansion
Nexam Chemical reported significant growth in Central and Eastern European markets. Hungary achieved all-time high quarterly sales of 10.3 million SEK (up 11% year-over-year), while Poland reached 2.1 million SEK (up 10% year-over-year). The company plans to hire an additional business developer in Poland to capitalize on growing opportunities in the region.
The company’s collaboration with Kullaplast, using Nexam’s additive to increase the share of recycled materials while maintaining end product quality, has generated significant international interest. The company estimates the potential value of annual additive sales to this segment at 28-35 million USD.
Financial Analysis
Despite the positive developments in recycling and geographic expansion, Nexam’s overall financial results showed some concerning trends. Cash flow from operations was negative at -1.2 million SEK, compared to positive 4.5 million SEK in Q2 2024. The company attributed this to large payments occurring just before the end of the quarter.
The detailed financial update reveals the company’s current position:
Nexam ended the quarter with a cash and bank balance of 9.1 million SEK and a remaining credit facility of 13.1 million SEK. The company emphasized that it has achieved financial stability funded by self-generated cash flow, though the negative operational cash flow in Q2 raises some questions about consistency.
Strategic Initiatives and Outlook
Nexam Chemical’s business is divided into three main segments with different underlying business logics:
The company highlighted its scalability potential, noting that break-even (EBITDA) currently occurs at less than 50 million SEK per quarter, with top-line increases contributing approximately 35% to the bottom line beyond the break-even point. Management believes they can potentially double volume with the current organization and cost base.
Looking forward, Nexam Chemical presented several reasons for investors to consider the company:
The company expects continued growth in recycling for the second half of 2025, with a focused commercial strategy and major recycling breakthroughs anticipated. The strong performance in Eastern and Central Europe is expected to continue, while the company also aims to expand its position in structural foams and explore long-term opportunities in the high-temperature segment.
However, investors should note the contrast between the company’s optimistic outlook and the market’s reaction to its Q2 results. With the stock trading closer to its 52-week low of 2.5 SEK than its high of 5.94 SEK, market sentiment appears cautious about Nexam’s ability to translate its technological advantages and growth in select segments into overall improved financial performance.
Full presentation:
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