Interim Report 3 months – 1 January-31 March 2026

First-quarter net sales rose 4% to MSEK 2,922 from MSEK 2,819, with currency-adjusted sales up 9% and the HMY acquisition contributing +16 percentage points. That growth was offset by -7% organic growth, indicating underlying demand weakness despite the acquisition boost. EBITDA excluding non-recurring items improved to MSEK 274 from MSEK 293, while EBITA excluding non-recurring items fell to MSEK 164 from MSEK 192.

Analysis

The key signal is not headline growth but the widening gap between reported sales and underlying demand. A large acquisition contribution masking negative organic growth implies integration is currently propping up the top line while core pricing/volume remains soft; that usually creates a lagged earnings problem as cost synergies arrive slower than revenue dilution from weaker legacy business. If the acquired asset is lower-margin or requires restructuring, near-term EBITDA can look stable while cash conversion and working capital quietly deteriorate over the next 1-2 quarters.

The second-order winners are likely upstream suppliers and service providers tied to the acquired platform, while legacy competitors with cleaner organic growth profiles should gain relative valuation support. In situations like this, customers often use the integration window to renegotiate terms, so gross margin pressure can extend beyond the reported quarter even if management frames it as one-off noise. The market will likely reward evidence of synergy capture only if it shows up in sequential EBITA improvement, not just adjusted growth metrics.

The main catalyst/risk is the next print on organic growth and margin bridge: if organic stays negative for another quarter, investors will start capitalizing this as a roll-up story rather than a durable compounder, and the multiple should compress. Conversely, if management can show that acquired revenues are high-quality and cross-sell is converting within 6-9 months, the market may rerate the stock despite weak standalone demand. The contrarian view is that the acquisition may be less about growth and more about buying time to restructure the core business, which can be value-creative if debt levels are modest and integration costs are front-loaded.

Key Decisions for Investors

• Avoid adding on the headline sales beat alone; wait 1-2 quarters for organic growth and margin bridge confirmation before paying up for the acquisition story.
• If HMY is liquid enough, consider a tactical short or put spread into the next earnings window if the stock has rerated on M&A optimism; target 10-15% downside if organic weakness persists.
• Pair trade: long a cleaner organic grower in the same end-market, short HMY, for 2-4 month horizon; the spread should work if investors rotate toward self-funded growth over acquisition-led revenue.
• For longs, require evidence of sequential EBITDA/EBITA expansion and working-capital improvement before entering; upside case is 15-20% if synergy delivery is visible by the next two quarters.