Flügger Q2'25/26 preview: Gradual growth and margin expansion to continue with positive fx impacts
Oversigt
- Flügger's Q2 2025/26 results are expected to show modest group revenue growth, driven by strong international momentum and favorable FX impacts, with a strategic shift in Denmark towards higher-margin own brands.
- H1 2025/26 revenue is forecasted at MDKK 1,294, reflecting ~4% y/y growth, with an EBIT margin improvement to ~12.1%, supported by stronger Swedish performance and positive currency effects.
- Poland remains the key growth driver with double-digit local currency growth, despite some softness in Unicell's outdoor product sales due to weather conditions.
- Flügger's margin improvement is expected to continue, aided by a favorable market and product mix, with structural changes under the Flügger Organic strategy enhancing efficiency and profitability.
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Flügger will publish its Q2 2025/26 results on Friday, December 12. We maintain our forecasts, which were updated following the solid Q1 performance, where strong growth in Poland continued, and Sweden also saw a growth acceleration, while Danish revenues remained flat. For Q2, we continue to expect a balanced performance with modest group revenue growth supported by strong International momentum and favourable FX tailwinds, while Denmark executes its shift of production output from builders’ merchants back towards Flügger’s (higher margin) own brands.
Estimates unchanged – offsetting dynamics across markets
Our H1 2025/26e revenue forecast remains MDKK 1,294, corresponding to ~4% y/y growth, and EBIT (adj.) of MDKK 156, implying an EBIT margin of ~12.1% (from MDKK 140, and 11% margin in H1 2024/25). The outlook is unchanged, as softer growth in Denmark is offset by stronger Swedish performance and positive currency effects. In Denmark, lower sales through builders’ merchants are expected to have a positive margin impact as Flügger continues to convert low-margin private-label volumes into higher-margin own-brand products. Sweden remains the primary source of Nordic growth, driven by organic revenue growth and a stronger Swedish kroner against the Danish kroner, while Norway contributes stable revenues.
Poland remains the key growth driver, despite temporary Unicell softness
The International segment, led by Poland, remains the primary growth engine, supported by steady demand and FX benefits. We continue to expect double-digit local currency growth from Poland, offsetting weaker development in other markets. Within Partnerships, we expect some softness in Unicell’s sales of outdoor products due to wet weather conditions, partially balanced by stable performance in Ukraine (Eskaro).
Margin improvement to continue with stronger market mix and product mix
Despite uneven market performance, we expect a continued improvement in Flügger’s group margin profile driven by the product mix shift in Denmark, and double-digit growth in higher-margin Poland. Gradual volume growth across markets also enables the operational leverage from production assets and own stores to contribute positively to margins. The structural changes made under the Flügger Organic (2024-27) strategy continue to support efficiency and profitability.
Risk/reward remains positive
We maintain our view that valuation presents a favourable risk/reward, with a DCF value of DKK 385/share and valuation multiples now also presenting a clear gap to its peer group. We believe current valuation multiples of EV/EBIT 2025/26e and 2026/27e of 13.3x and 10.5x, and PE for 2025/26e and 2026/27e of 12.1x and 9.4x, respectively, present a favourable profile given the gradual growth and margin expansion expected during Flügger’s profitable turnaround.
Disclaimer: HC Andersen Capital receives payment from Flugger for a digitalIR and research agreement. / Philip Coombes 15:47 11/12-2025.