Embellence Group: Legacy brands keep growing abroad - ABG

Relaunch in Artscape was a clear contributor
We raise '24e EBITA by 6%
Trading at an accumulated 36% FCF yield in '24e-'26e


Q1 takeaways: RoW was the strongest performing region

Embellence delivered a strong start to the year. Organic growth picked up further (8% org. growth y-o-y) on a tougher comp than in Q4 (+6% org.), driven by strong momentum in the Rest of World segment especially, which grew by 42% y-o-y. A majority of this growth can be attributed to Artscape's relaunch with a key customer, however both Wall&Deco and Boråstapeter also enjoyed strong momentum in the US. Gross margins were strong, +110bp y-o-y, despite the higher share of Artscape sales, typically sold with a lower gross margin, and Embellence Group scaled well on opex for a 1pp opex ratio improvement vs last year. The resulting EBITA of SEK 34m beat cons. expectations by 24%, and is 24% higher than last year.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/embellence-group/Equity-research/2024/5/embellence-group---legacy-brands-keep-growing-abroad/