The different markets display widely different market dynamics. Decorator/hospitality-oriented Europe segment holds up well, and commentary around hospitality is optimistic. To counteract the experienced margin pressure in Nordics and protect margins into a downturn, Embellence launches a personnel-related cost-savings program expected to save SEK 9m on an annual basis starting from Q1’23, incurring one-off costs of SEK 5m in the quarter. The company will also implement another round of price increases in the beginning of ‘23e facing expected cost inflation. Main focal points for 2023 will be profitability, cash flow and a resilient balance sheet.
Share trading at 6-5x '23e-'24e EV/EBITA
The Embellence share is up 2% YTD and is on our unrevised estimates trading at ’23e-‘24e EV/EBITA of 6-5x. Embellence hosts a conf. call at 10:00 AM CET. It can be followed at https://ir.financialhearings.com/embellence-group-q4-2022 or by dialling +46 8 525 07003. PIN: 5009313#.
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