INTERIM REPORT JANUARY – MARCH 2026

First-quarter 2026 net sales declined 5% to SEK 13,962m, but organic growth was positive at 2%, with a 7% FX drag offsetting underlying demand. Operating income rose to SEK 1,710m from SEK 1,532m and the operating margin improved to 12.3% from 10.4%, while EPS increased to SEK 2.05 from SEK 1.69. Excluding items affecting comparability, operating income was SEK 1,718m and the margin was also 12.3%.

Analysis

The key read-through is that management is showing pricing/mix discipline strong enough to offset a meaningful FX headwind, which matters more than the headline top-line softness. In a flat-to-slow-growth demand environment, a 12%+ operating margin implies the business is operating with unusually high incremental margin leverage, so even modest organic growth can translate into outsized earnings resilience over the next 1-2 quarters.

Second-order, the currency hit likely masks underlying share stability rather than real volume weakness. If the FX drag persists, reported revenue growth will stay noisy, but the market should increasingly anchor on local-currency execution and margin conversion; that favors suppliers with exposed operating leverage and disciplined cost bases, while pressuring weaker peers that need mid-single-digit reported growth to defend valuation. Competitors with lower gross margins may be forced into promotional activity, which can quietly widen the spread in profitability over the next 2-3 reporting cycles.

The main risk is that this is a margin peak rather than a durable step-up: if input costs re-accelerate or pricing normalizes, earnings momentum can flatten quickly despite stable organic sales. Another reversal catalyst is a stronger currency trajectory over the next 3-6 months, which would cap reported EPS upside even if underlying demand stays intact. Consensus may be underestimating how much of the improvement is operational vs. transitory FX noise, creating a setup where the stock can re-rate only if management proves this margin floor is sustainable into the next quarter.

The contrarian angle is that the market may be too focused on the sales miss and not enough on the quality of earnings. When organic growth is low but margins are expanding, the right question is whether free cash flow is inflecting; if so, the equity can still work even without faster revenue. That makes this more of a cash-generation story than a growth story, which often supports the shares longer than the headline print suggests.

Key Decisions for Investors

• Go long the stock on post-earnings weakness for a 4-8 week horizon if the market over-penalizes the reported sales decline; use a tight stop if management commentary implies margin normalization next quarter.
• If accessible, buy 1-2 quarter call spreads rather than outright calls to express a modest upside re-rating from earnings quality, with capped premium outlay and better skew versus implied volatility.
• Pair long the company against a lower-margin peer with more FX-sensitive reported sales over the next 1-3 quarters; the thesis is margin durability versus headline growth noise.
• If the stock rallies sharply on the print, take partial profits and retain a core position only if the company guides to stable margins, since the next catalyst risk is currency drag and cost pass-through lag.