Flügger's Q1 2026/27 revenue rose 4% to MDKK 678 (Q1 2025/26: MDKK 653), slightly ahead of our MDKK 674 estimate, with organic growth of around 3.5%. All three segments delivered organic growth, led by International at 5% and Nordic at 3%, while Partnerships grew 2% organically but was flat reported due to currency. Management highlights high delivery reliability through the peak season and a continued slight market improvement among Nordic professional painters, though activity remains at a low level. Guidance is unchanged, and we reiterate our "Accumulate" recommendation and DKK 410 price target.

Nordics grow on both customer groups, Sweden still lags

Nordic revenue grew 4% to MDKK 453 (3% organic, 1% currency). Denmark rose 5% to MDKK 213, as sales to both professional painters and private consumers more than offset the loss of private -label low-price volumes, extending the inflection from Q4. Norway was the strongest market, up 14% to MDKK 81, with 7% in local currency, primarily driven by professional painters. Sweden declined 1% to MDKK 159 ( -2% organic). Sales to both professional and private customers grew, but not enough to compensate for the earlier DIY phase -out.

Poland drives International while Partnerships is held back by DIY demand

International grew 5% to MDKK 140. Poland rose 11% to MDKK 114 across customer groups, supported by another store opening in a new area. That comes on top of 4 openings in 2025/26 and 8 in 2024/25, and a relaunch of one of Flügger's largest Polish products was well received through the peak season. Other countries declined 18% to MDKK 24, partly due to ended collaborations. Partnerships was flat at MDKK 85. Unicell in Poland declined 1% on lower demand among DIY chains, while Ukraine grew 5% in local currency but was offset by a 6% currency headwind.

H1 to show whether an improved mix lifts margins

Q1 is Flügger's most profitable quarter and accounted for 52% of H1 revenue last year, while demand typically starts to taper off in Q2, so the quarter provides a good starting point for the half -year. However, with only revenue disclosed, the H1 report will be the first test of how much the shift toward professional painters and the DIY phase-out benefit margins. Last year's H1 gross margin rose 1.6pp to 56.5% and EBIT reached MDKK 141. Beyond the mix, we will watch how much ERP-related consultancy costs weigh on the cost base.

DCF value and high dividend yield underpin the total return profile

We have raised our risk-free rate to 2.5% from 2.0%, reflecting the higher interest rate environment, and lowered the market risk premium to 4.75% in line with current market  implied estimates, resulting in a WACC of 8.2% from 8.3%. Our DCF value of DKK 428 per share continues to support the recovery potential, even after a risk-weighted adjustment for the sanctions case. Flügger trades broadly in line with peers on EV/EBIT, at a discount on P/E, and with a dividend yield of around 5%, well above the peer median. We therefore reiterate our "Accumulate" recommendation and DKK 410 price target.

Disclaimer: HC Andersen Capital receives payment from Flügger for a DigitalIR and research agreement. Rasmus Køjborg and Victor Skriver 08:30 05/10-2026.