Embellence Group: Growth across all geographies - ABG

Net sales SEK 183m, 10% vs ABGSCe, 13% vs Factset cons.
Adj. EBITA SEK 27m, 19% vs ABGSCe, 39% vs cons.
Report moves cons. '23e EBITA by 5%


Q3 report in brief

The report is strong in general, especially the strong demand is a positive signal. Net sales of SEK 183m is 8% higher y-o-y (4% org.), and is also above ABGSCe and Factset cons. by 10% and 13% respectively. The three geographical segments Nordics, Europe and RoW grew by 1%, 9.5% and 16.6% respectively, with Embellence reporting large-order support from a few hospitality customers in RoW. Gross margins, which were ATH in Q2 at 61.4%, are softer sequentially at 57.6%, -50 bp y-o-y, which could be an effect of a strong development for the Boråstapeter brand in the quarter and also a lower share of premium sales across all geographies except the Nordics y-o-y. SG&A expenses were largely flat y-o-y despite the higher scale due to ongoing cost savings programs across the organisation, which together with the decent gross margin resulted in adj. EBITA growth of 13% for adj. EBITA of SEK 16.5m (14.4% margin). This was 19% above ABGSCE SEK 22m and 39% above cons. SEK 19m. Leverage is flat sequentially for Q3'23 ND/EBITDA of 2.2x after SEK 7m FCF.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/embellence-group/Equity-research/2023/10/embellence-group---growth-across-all-geographies/