Embellence Group (EMBELL) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales declined 6% year-over-year to SEK/MSEK 202, mainly due to a strong comparison quarter and extraordinary effects in Hardscape and Artscape.

• Gross margin improved to 62.0%, up 3.7 percentage points year-over-year, driven by favorable product mix and manufacturing efficiencies.

• EBITA/EBITDA margin reached 16.0%, with EBITA/EBITDA at SEK/MSEK 32, slightly down year-over-year, but margin improved.

• Net profit rose to SEK/MSEK 24, up from SEK/MSEK 16 last year, mainly due to lower debt and positive currency effects.

• Boråstapeter and Cole & Son returned to growth, supported by new collections and anniversaries, while Artscape and Wall & decò underperformed.

Financial highlights

• Group/net sales were SEK/MSEK 202, down 6% year-over-year.

• Gross margin reached 62.0%, up 3.7 percentage points year-over-year.

• EBITA/EBITDA margin was 16.0%, with EBITA/EBITDA at SEK/MSEK 32.

• Net profit was SEK/MSEK 24, compared to SEK/MSEK 16 last year.

• Operating cash flow was SEK/MSEK 5, down from SEK/MSEK 14 last year.

Outlook and guidance

• Hardscape business expected to return to growth in Q2 as phasing effects normalize.

• Focus on profitable organic growth through sales, marketing, and product innovation, with DTC and Hospitality segments targeted.

• Manufacturing segment growth to stabilize as comparison quarters become tougher.

• Gross margin expected to remain slightly above 60%, with some fluctuation depending on brand and product mix.

• New financing agreement in April 2025 increases flexibility and lowers costs.