* Net sales SEK 181m, -5% vs ABGSCe
* EBITA SEK 23m vs ABGSCe SEK 24m
* The share is trading at 7.2-5.9x '26e EV/EBITA
Q2 in brief: Softer growth, margins in line with forecasts
Overall, we believe Embellence Group's Q2 report is softer than our expectations on growth, but with margins in line. Net sales of SEK 181m was -5% vs ABGSCe and corresponded to organic growth of -5%. The shortfall was concentrated in two brands: Boråstapeter SEK 61m (-7% y-o-y, -10% vs ABGSCe) on weak Swedish traditional retail, and Wall&decò SEK 19m (-14% y-o-y, -14% vs e), where management explicitly conceded its own commercial execution was not strong enough. Gross margins were 62.3%, +60bp y-o-y driven by the move to DTC, which coupled with a higher opex ratio owing to initiatives to drive future growth, e.g. the replacement of Cole & Son management, resulted in a 12.6% EBITA margin, -90bp y-o-y. EBITA of SEK 23m was -5% vs ABGSCe SEK 24 and corresponded to y-o-y growth of -12%.
Outlook: CEO says Cole & Son will weigh less in H2
Embellence Group gives little in terms of outlook commentary. Management reiterated the DTC/international/hospitality diversification strategy and flagged that the last 2026 platform rollout (Boråstapeter) went live in April, with conversion and data-driven-traffic work now beginning; all brands grew DTC in H1, Pappelina delivered the strongest (+130% y-o-y). On trajectory, Cole & Son's self-inflicted commercial-decision drag (net sales of SEK 30m, -12% y-o-y) is expected to be "more limited" in H2 than H1, and group resources have been reallocated to fix Wall&decò execution.
Conclusion: The Q2 report moves our '26e EBITA by -1%
Using yesterday's closing price and unrevised estimates, Embellence Group is trading at 7.2x-5.9x our '26e-'27e EV/EBITA vs a historical trading range of 7x-8x NTM. L3M, the share has returned -3%. The Q2 report alone moves our '26e EBITA by -1%.
The company hosts a conference call today at 10:00 CET. Call-in details can be found here.