Embellence Group: Signs of housing market recovery - ABG

Q2 preview: EBITA growth of 16% y-o-y
In Q2, we expect easy growth comps to result in a sequential acceleration over Q1. Artscape's 57% organic growth in Q1 is not likely to be repeated, as our understanding is that the growth spurt was largely driven by an assortment relaunch; on the other hand, we expect Boråstapeter to accelerate by a significant 15pp for organic growth of 5% in Q2. On the group level, we forecast net sales of SEK 185m for organic growth of 8%. The strong Q2'23 gross margin was driven by high capacity utilisation in the factory ahead of a Borosan launch in H2'23. We see no such phasing in 2024 for a 2pp lower gross margin y-o-y in Q2e. We extrapolate the Q1 SG&A savings into Q2e, for EBITA of SEK 18m (+16% y-o-y).

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/87f3b7627f124c4d88984e2cc1dec143/pdf/signs-of-housing-market-recovery.pdf