Gabriel FY'25/26 preview: Go-to-market strategy to drive continued growth

Gabriel is expected to report Q1 2025/26 results on Thursday 05 February. The 2024/25 results strengthened confidence in Gabriel's turnaround following a cyclical market downturn and restructuring of its FurnMaster (discontinuing) Mexican subsidiary. Ahead of Q1 results, we believe the market share gains across geographies in 2024/25 reflect a sustained competitive advantage from the "grow with the biggest" key account strategy, supported by global showrooms and dedicated field sales managers. Continuing operations can therefore maintain positive development with more stable markets and reduced tariff uncertainty.

This report will test whether turnaround momentum is sustainable as Gabriel enters a new fiscal year with guidance for continuing operations revenue of MDKK 510-550 and EBIT of MDKK 40-55, signalling ongoing positive topline momentum and benefits from operating leverage. Mid-point guidance implies 2.7% revenue growth y/y and EBIT margin of 9.0%, up from 8.5% in 2024/25. We view this guidance as somewhat conservative given strong market share gains in 2024/25.

We expect continued year-on-year revenue and earnings improvement

We forecast Q1 continuing operations revenue growth of around 7% to MDKK 133 (from MDKK 124), at the high-end of the full-year guidance range, with EBIT margin improvement to 5.9% (from 0.1% in Q1 2024/25). Our estimates reflect solid momentum from Gabriel's targeted go-to-market strategy, with dedicated key account managers driving growth with the ~70 largest global furniture OEMs.

We expect the geographic growth mix to broaden beyond North America and Asia to include Europe, as economic uncertainty has generally lessened. While Gabriel does not report geographic segmentation in interim reports, management commentary may confirm European momentum. With Europe representing over 75% of 2024/25 revenue, a return to positive growth there is key to reaching the top-end of guidance. In 2024/25, continuing operations growth was driven by North America (+50% YoY) and Asia Pacific (+30% YoY), while Europe (+0.2% YoY) held stable against falling markets.

We monitor progress on FurnMaster carve-out and market conditions

FurnMaster revenue may remain lower as unprofitable contracts were terminated during the Mexican restructuring, but this improves profitability and carve-out prospects. We will focus on commentary regarding the FurnMaster carve-out process and market conditions.

Management expects to complete a sale of FurnMaster in 2025/26, and we believe the restructuring completed in 2024/25 improves the business unit's attractiveness to potential buyers. A sale at or near book value would unlock value versus our estimates. We also monitor comments on demand trends across geographies, particularly whether the strong momentum in North America and Asia Pacific is continuing, and whether European markets are showing signs of stabilization.

We will be looking for confirmation that the growth in 2024/25 was not a one-off but instead a sustainable result of the go-to-market strategy and work to strengthen key customer relationships during a period of broader market turmoil.

Disclaimer: HC Andersen Capital receives payment from Gabriel for a digitalIR and research agreement. /Philip Coombes 12:31 28/01/2026