Embellence Group (EMBELL) investor relations material

Executive summary

• Net sales for Q2 2026 were SEK 181 million (MSEK 181), a 6% year-over-year decline, with organic sales down 5% and a 1% negative currency impact, mainly due to tough comps and weak Swedish retail.

• D2C (Direct to Consumer) and international channels drove strong growth, with Pappelina and Borås Tapetfabrik achieving double-digit increases.

• Strategic focus remains on expanding D2C, internationalization, and hospitality channels to diversify revenue and reduce reliance on traditional retail.

• New Managing Directors appointed for Cole & Son and Pappelina, with ongoing restructuring and commercial focus.

• Investments in e-commerce platforms and commercial initiatives began to yield results despite weak traditional retail.

Financial highlights

• Gross margin improved to 62.3%, up 0.4 percentage points year-over-year, supported by higher D2C sales and premium product mix.

• EBITDA/EBITA margin declined to 12.6% from 13.5% last year, impacted by volume decline and restructuring costs.

• Operational cash flow increased to SEK 21 million (MSEK 21), up from SEK 16 million last year.

• Net debt/EBITDA improved to 0.7 from 0.9 year-over-year.

• Dividend of SEK 1.5 per share (MSEK 35 total) paid, up from SEK 1.25 per share last year.

Outlook and guidance

• Management expects the negative impact from Cole & Son restructuring to be limited in H2, with improvements spread across Q3 and Q4.

• Continued focus on D2C, international expansion, and hospitality channel expected to drive future growth.

• Investments in digital platforms and product offerings to continue supporting growth.