Q1: underlying performance in line

Large orders in comps distort Q1'25e

Diversification is key

EBITA in line, strong dividend

New CEO could accelerate DTC efforts

Non-retail channel strength not enough

Manufacturing can't outweigh soft retail

D2C unit economics could lift gross margins

Borås Tapetfabrik edge seen in numbers

Factory sales more than doubled. We raise '24-'26e EBITA by 7-6%. Share trading at 8x-6x our '24e-'26e EV/EBITA.

Showing off the industry-leading factory

Signs of housing market recovery

Borås Tapetfabrik gives edge on the competition

Greater focus on brands following CMD

Embellence hosted a CMD on 20 May 2024. New financial targets leverage brand strength. We raise '24e-'26e EBITA by 1%.

Legacy brands keep growing abroad

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

Big Artscape-driven beat

Embellence Group - Mirror, mirror on the wall

Q3 report was a profitability beat (16% above ABGSCe) We raise ‘22e-‘24e EBITA by 4-1% Visibility limited, no substantial negative signals yet

Embellence Group - Sales in line, margin beat

Sales SEK 169m, -5% vs ABGSCe, -1% vs cons. Adj. EBITA SEK 23m, 18% vs ABGSCe, 16% vs cons. We expect cons. to lift ests by mid-single digits

Embellence Group - Patterns remain relatively resilient

Q3 report due on October 25 We forecast sales of SEK 178m and adj. EBITA of 20m Share trading at EV/EBITA 6.3x-4.3x for ‘22e-‘24e

Embellence Group - Rolling up for uncertain times

Q2 sales in-line, adj. EBITA below (-16% vs ABGSCe) Adj. EBITA estimates down 17-7% ’22-‘24e Value range lowered to SEK 31-42 (33-44) per share

Embellence Group - Volumes holding up, SG&A hurting margins

Sales 0% vs ABGSCe, organic growth of -4% Adj. EBITA -16% vs ABGSCe, -26% vs FactSet cons. We expect cons. to lower estimates some 5-8%