Embellence Group Q4: platform upgrades continue - ABG
This is a third party research report and does not necessarily reflect our views or values
* Net sales SEK 195m, +1% vs ABGSCe, -1% vs Factset cons.
* EBITA SEK 26m, vs ABGSCe SEK 25m, cons. SEK 26m
* Keeps upgrading e-commerce platforms
Q4 in brief: in line, external manufacturing grew strongest
Overall, we believe Embellence Group's Q4 report is in line with expectations. Net sales of SEK 195m was +1% vs ABGSCe, -1% vs Factset cons. and corresponded to organic growth of 1%. Growth was driven by the Boråstapeter and External manufacturing segments, which grew 10% and 21% respectively. We had expected Boråstapeter to grow 4% and External manufacturing to grow 5%. Artscape's -25% growth should be seen in light of an extreme comparable growth figure, boosted by a large order from one of its largest customers, and was expected. Gross margins were 61.8%, +90bp y-o-y, which coupled with a higher opex ratio owing to initiatives to drive future growth resulted in a 13.2% EBITA margin, -60bp y-o-y. EBITA of SEK 26m was just below ABGSCe SEK 25m but in line with cons. SEK 26m, and corresponded to y-o-y growth of -7%. Embellence Group's board has proposed a SEK 1.5 DPS (In line with ABGSCe and vs 1.25 last year), corresponding to 51% of '25 EPS.
Outlook: keeps building foundations for growth
In Q3, Embellence Group commented that it saw positive signals from the upgrading of its website platforms. During Q4, it upgraded its Cole & Son website, says it sees strong growth from the already upgraded platforms (we interpret commentary as being of 40% DTC growth for Pappelina and Artscape) and expects to upgrade the Boråstapeter platform during H1'26. Boråstapeter is the largest brand in the Group, which suggests that this could be the most impactful upgrade. The CEO notes that recent organisational changes means the Group is now stable enough to resume looking for M&A targets.
Q4 moves our '25e EBITA by +1%
Using yesterday's closing price and unrevised estimates, Embellence Group is trading at 7x-6x our '26e-'27e EV/EBITA vs a historical trading range of 7x-8x NTM. L3M, the share has returned -8%. The Q4 report alone moves our '25e EBITA by +1%.
* EBITA SEK 26m, vs ABGSCe SEK 25m, cons. SEK 26m
* Keeps upgrading e-commerce platforms
Q4 in brief: in line, external manufacturing grew strongest
Overall, we believe Embellence Group's Q4 report is in line with expectations. Net sales of SEK 195m was +1% vs ABGSCe, -1% vs Factset cons. and corresponded to organic growth of 1%. Growth was driven by the Boråstapeter and External manufacturing segments, which grew 10% and 21% respectively. We had expected Boråstapeter to grow 4% and External manufacturing to grow 5%. Artscape's -25% growth should be seen in light of an extreme comparable growth figure, boosted by a large order from one of its largest customers, and was expected. Gross margins were 61.8%, +90bp y-o-y, which coupled with a higher opex ratio owing to initiatives to drive future growth resulted in a 13.2% EBITA margin, -60bp y-o-y. EBITA of SEK 26m was just below ABGSCe SEK 25m but in line with cons. SEK 26m, and corresponded to y-o-y growth of -7%. Embellence Group's board has proposed a SEK 1.5 DPS (In line with ABGSCe and vs 1.25 last year), corresponding to 51% of '25 EPS.
Outlook: keeps building foundations for growth
In Q3, Embellence Group commented that it saw positive signals from the upgrading of its website platforms. During Q4, it upgraded its Cole & Son website, says it sees strong growth from the already upgraded platforms (we interpret commentary as being of 40% DTC growth for Pappelina and Artscape) and expects to upgrade the Boråstapeter platform during H1'26. Boråstapeter is the largest brand in the Group, which suggests that this could be the most impactful upgrade. The CEO notes that recent organisational changes means the Group is now stable enough to resume looking for M&A targets.
Q4 moves our '25e EBITA by +1%
Using yesterday's closing price and unrevised estimates, Embellence Group is trading at 7x-6x our '26e-'27e EV/EBITA vs a historical trading range of 7x-8x NTM. L3M, the share has returned -8%. The Q4 report alone moves our '25e EBITA by +1%.