ODDO : More Rack ‘n’ Roll ahead from 2026 onwards

We initiate coverage on two Swiss Industrials midcaps, Kardex (Outperform, target price CHF 330) and Interroll (Neutral, CHF 2,375). Both niche players should continue to benefit from steadily growing automation needs (low ~15-20% penetration) in the increasingly global intralogistics market where client activities indicate a gradual revival in growth of the e-commerce / project business (attractive payback times of only 12-36 months). Both high-quality names should see ongoing high growth investments in 2025 but gradual benefits from 2026 onwards. We currently prefer Kardex on the back of increasingly better and broader-based growth opportunities (3Ye organic sales CAGR of 10.5% vs 7.0% / € as reporting currency / EBIT CAGR of 8% vs 7%) and partly still underestimated quality profile (10Y historical pre-tax ROCE of 45% vs 25%).