We expect the Q2 report to show solid order intake, but with revenue growth held back by slow backlog execution due to delayed project starts in Q1. That said, we expect the company to catch up on the postponed volumes in H2, leaving our full-year revenue and earnings estimates largely unchanged. In our view, the strong order backlog and the anticipated pick-up in project execution provide a solid foundation for earnings growth going forward, particularly in the latter part of the year. Against this backdrop and combined with low medium-term valuation multiples (2026–2027 adj. EV/EBITA of 6-7x), we believe the risk/reward profile remains attractive.

Slow backlog execution should weigh on Q2

Fasadgruppen will publish its Q2 report on Thursday, 20 August, and the earnings presentation can be followed here. We expect Q2 revenue of 1,348 MSEK, a decline of roughly 6% year-on-year and below consensus. By segment, we forecast Total Solutions at 682 MSEK (-6% y/y), reflecting weak backlog execution in Norway, where the project backlog is seasonally weighted toward post-summer starts, while Sweden and Denmark should have developed more steadily. For Specialist Solutions, we estimate revenue of 505 MSEK (-8% y/y), with growth held back by the divestment of Alnova, and for Clear Line we forecast 161 MSEK (-1% y/y), still weighed by regulatory delays at BSR though improving sequentially from the very slow backlog execution in Q1. We expect Q2 adjusted EBITA to decline to roughly 102 MSEK, a margin of 7.6% (Q2'25: 9.2%) and below consensus, with the contraction driven primarily by lower volumes limiting the efficient absorption of fixed costs.

Bottleneck pushes volumes into H2, full-year estimates largely unchanged

We believe backlog execution has been slower than we anticipated in our Q1 update, particularly in Norway, where the project backlog, according to our understanding, is seasonally weighted toward post-summer starts. We believe the cold start to the year delayed the ramp-up to full production during the quarter. With capacity limited by the availability of craftsmen and subcontractors, the postponed projects likely could not be absorbed on top of those already scheduled to start, creating a bottleneck that has pushed some revenue into H2 rather than allowing it to be recovered within Q2. Against this backdrop, we lower our Q2 revenue and near-term profitability estimates, as the softer volumes weigh on fixed-cost absorption. Importantly, though, we view this as a timing shift rather than lost business. We expect the company to catch up in H2, leaving our full-year estimates largely unchanged, with volumes now more backloaded towards the second half.

Over the medium to long term, we still believe Fasadgruppen is well-positioned to deliver solid organic growth, supported by efficient project execution, continued investment in fire safety remediation in the UK, growing demand for energy-efficient renovations, and a more normalized macroeconomic environment in terms of inflation and interest rates. As activity levels rise, we expect a gradual improvement in profitability, driven by better capacity utilization.

We reiterate our Buy recommendation

We believe that the fair value of Fasadgruppen’s share is SEK 26-32, supported by a combination of earnings multiples (adj. EV/EBITA ~8-9x, adj. P/E ~10-12x), which are based on the company’s historical valuation and peers, as well as our DCF value. Given the uncertain market environment, rather limited visibility into the ongoing turnaround, and the decline in return on capital in recent years, which increases the risk related to future capital allocation, we still lean towards the lower end of our valuation range. As such, we reiterate our target price of SEK 26 per share and Buy recommendation.