Fasadgruppen's Q2 report beat our expectations and, in our view, signaled that the recovery is building, albeit at a slow pace for now. Despite the beat, we leave our estimates largely unchanged, having already factored in a strong H2'26 rebound, and we await clearer evidence of recovery before turning more bullish. In our view, the strong order backlog and the expected pickup in project execution provide a solid foundation for earnings growth going forward, particularly in the latter part of the year. Against this backdrop, combined with low medium-term valuation multiples (2026-2027 adj. EV/EBITA of 6–7x), we believe the risk/reward profile remains attractive. As a result, we reiterate our Buy recommendation and target price of SEK 26 per share.

Recovery builds gradually, ending Q2 in growth

Fasadgruppen's Q2 group revenue reached 1,410 MSEK, corresponding to an organic decline of 1.8%. As we had anticipated, delayed project starts from Q1 pushed volume into the second half of the year, but activity picked up gradually and the quarter ended with organic growth in June. By segment, Total Solutions (707 MSEK, -2.2% organic y/y) came in ahead of our estimate, still weighed down by a weak Norwegian market. Specialist Solutions (555 MSEK, +4.4% organic y/y) also outperformed our expectations, mainly driven by the Finnish business. The UK-based Clear Line segment (148 MSEK, -8.6% organic y/y) fell short on slow order backlog conversion, though it showed solid sequential improvement. Fasadgruppen's adjusted EBITA of 108 MSEK also beat our expectations, corresponding to a margin of 7.6%. The contraction versus last year was mainly driven by lower volumes, which limit the efficient absorption of fixed costs.

Mixed markets, but the trajectory is improving

Fasadgruppen does not provide formal financial guidance but offered some commentary on market dynamics alongside the Q2 report. According to the company, most Nordic markets are developing in the right direction, while Norway remains challenging, still characterized by weak new construction activity and low project margins. In the UK, the company noted it continues to be affected by regulatory delays at the BSR, but appeared confident in improved order backlog execution from H2’26.

While the Q2 report came in above our expectations, we have made only minor fine-tuning to our estimates, leaving them largely unchanged, as we already expect a fairly strong rebound in H2'26 continuing into 2027 and would like to see clearer evidence of a recovery before taking a bolder view. Over the medium term, we continue to believe Fasadgruppen is well positioned to deliver solid organic growth, supported by efficient project execution, continued investment in UK fire safety remediation, increasing demand for energy-efficient renovations, and a more normalized macroeconomic environment. Reflecting this, we forecast organic growth of around 5% annually in 2027-2029. We expect revenue growth to drive operating leverage, lifting EBITA to 585 MSEK in 2029, corresponding to a margin of around 9%, slightly below the company's long-term target.

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, still limited visibility into the ongoing turnaround, and declining returns on capital in recent years – which raises the risk around future capital allocation – we lean toward the lower end of our valuation range. As such, we reiterate our target price of SEK 26 per share and Buy recommendation.