Embellence Group: Key product launches to lift 2024 – ABG


Artscape and Borosan temporary margin dampeners
We forecast 10% EBITA growth in ’24e
Accumulated FCF yield 40% ’24e-’26e

Q4 report in brief: good momentum into 2024

Embellence reported continued growth for the Group overall (7% y-o-y, of which 6% org.). Rest of World was the softest geographical segment: destocking ahead of a product revamp for a key customer meant RoW sales shrank by 5% y-o-y in Q4. Gross margins were pressured by Borosan sales, the Artscape effect and input costs, for a 210bp lower GM y-o-y. We assess the effects could be reverted in 2024, as new products could lift sales and input prices are now lower. SG&A expenses were slightly lower y-o-y, which helped keep the EBITA margin at a level 30bp below last year at 12.2%, for an EBITA of SEK 23m.


ABGSC Commissioned Research