Translation: Original published in Finnish on 08/14/2026 at 08:01 am EEST

Source: Inderes

Orthex will publish its Q2 report on Tuesday, August 18. The company's earnings webcast can be followed here at 11:00 am EEST. With the rise in oil prices following the conflict in Iran, we estimate that Q2 has been a balancing act between growth and profitability for the company. We expect revenue to have grown moderately, driven by the Nordics, but for sharply increased raw material prices to have weighed on margins since May.

Nordic countries support growth, export markets gloomier

We expect Orthex' Q2 revenue to increase by 3% to 21.2 MEUR. Retail revenue indicators have developed positively in the Nordics, especially in Sweden, as a result of which we have raised our invoiced sales growth estimate for the Nordics to 3% (was 2%). In Central Europe, on the other hand, retail trade has developed sluggishly, making it difficult to achieve growth in export markets. We have lowered the sales growth estimate for the rest of Europe to 3% from the previous 5%. We estimate that revenue growth is also hampered by the company's decision to reduce promotional sales to support relative profitability and the negative impact of price increases on new customer acquisition. This particularly impacts growth markets, where campaigns are a key tool for securing new distribution agreements and gaining shelf space.

Raw material price peak hits earnings with a delay

In connection with the earnings preview, we have lowered our Q2 adjusted EBIT estimate to 1.2 MEUR (was 1.4 MEUR), as plastic raw material prices were higher than we expected. During the quarter, plastic raw material prices rose significantly, and due to the company's own inventory, we expect the sharp cost inflation to have impacted earnings since May. However, according to management, the company has reacted more proactively to cost inflation in early 2026 than to the 2022 price peak with its own price increases, which, in our estimation, softens the pressure on the gross margin. In addition, we expect Orthex to have slightly limited its discretionary growth investments due to cost inflation, which will partly curb the margin pressure on EBIT. Due to the high raw material price, Orthex’s profitability for the current year will, according to our estimate, remain below its potential. However, we expect the company's earnings to remain clearly profitable, and with its strong balance sheet, the company has, in our view, optionality in capital allocation that its competitors envy.

Eyes on pricing power and inflation control

Orthex does not typically provide short-term numerical guidance, so in the report, our attention will be focused on management's comments on cost inflation management and the outlook for the rest of the year. The price pressure caused by the conflict in Iran strongly shapes the company's short-term outlook, as it utilizes oil-based raw materials in its production. We are looking for confirmation from the report on how well the proactive price increases in the early part of the year are addressing the margin pressure in H2.

We are also interested in management's comments on the development of export markets. As the company has had to reduce campaign sales to protect its relative profitability, we are trying to understand how much this slows down the acquisition of strategically important new key accounts in Central Europe. However, the company's strong balance sheet provides resilience and leeway even in a challenging market environment.