We raise adjusted EBITA by 2% for 2026E-27E, following the stronger-than-expected profitability in Q4, with adjusted EBITA increasing 8% y/y despite a 19% y/y sales decline. Although Q4 marked an inflection point in earnings, we look for this to take a significant leap upwards in H1 2026 – reaching ~41% y/y – bolstered by easier comps. Additionally, the 220bp y/y margin uplift in the Q4 2025 report clearly confirms our view of the ongoing margin trajectory for Elanders in SCS. Coupled with a volume recovery in the upcoming years, supporting improved capacity utilisation across the group, we expect Elanders to better capitalise on rebounding demand. We look for an 11% adjusted EBITA CAGR for 2025-27E. Although the Q4 cash flow was a slight disappointment, burdened by the WC tie-up, this ought to revert as early as in Q1. Along with strong earnings growth in 2026E, we pencil in lease adjusted net debt/EBITDA of 2.8x for 2026. We derive a higher multiples-based fair value range of SEK 52-97 (49-89), implying 2026E EV/EBITA of 10-12x.
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