Gabriel prelimary FY'2024/25 results: Margin recovery strengthens but FurnMaster result drags

Following the preliminary full year 2024/25 results, Gabriel is building confidence in its turnaround, after a cyclical market downturn, and restructuring of its FurnMaster (discontinuing) Mexican subsidiary. Execution in the core continuing operations remained solid with revenue growth of 6.7%  y/y to MDKK 516, and EBIT margin expansion of 4.4 p.p. to 8.5% from 4.1% in 2023/24, despite ongoing macro headwinds. However, the FurnMaster unit remains uncertain with an implied negative full-year EBIT of MDKK -16 for 2024/25, and uncertainty relating to the carve-out and development of tariffs. In our view, a valuation of EV/EBIT 11.6x for 2025/26E does not favor short-term risk/reward, given FurnMaster’s ongoing weaker performance, carve-out uncertainty, and lingering market weakness. We reiterate our Reduce recommendation and slightly raise our price target to DKK 210/share. 

Gabriel refocusing on core upholstery textiles growth through planned FurnMaster carve-out

Gabriel Holding is a Danish textile and furniture solutions group supplying upholstery fabrics, finished furniture, and sampling concepts to leading global design and contract furniture brands. The group operates through three business units: Fabrics, the core earnings driver focused on premium upholstery textiles; SampleMaster, providing design and marketing tools for the furniture and interior industry; and FurnMaster (currently in a carve-out process), offering full-service furniture manufacturing across Europe and Mexico. The ongoing FurnMaster carve-out process, initiated in August 2024, remains a cause of uncertainty, both regarding timing and valuation, and once complete, will sharpen the strategic focus on core textile activities. The company combines Scandinavian design heritage with an international production platform in Lithuania, Poland, and Mexico, positioning it to capture renewed growth as global office and interior demand gradually normalizes after a post-Covid downturn.

Medium-term earnings estimates revised slightly higher on stronger continuing operations EBIT margin

Preliminary FY 2024/25 figures show that Gabriel’s continuing operations have advanced the turnaround, with EBIT of DKK 44 million (8.5% margin), exceeding the latest company full-year EBIT guidance interval of MDKK 35-40, and HCA estimate of MDKK 43m, and validating the structural margin recovery achieved over the past year. This outperformance supports a modest uplift to medium-term profitability forecasts, as Gabriel has effectively utilized its operating leverage to convert revenue growth into margin expansion. Existing production capacity and cost focus can enable continued margin expansion in 2025/26E. FurnMaster remains a drag on consolidated earnings but is showing signs of stabilization in Europe. However, the negative EBIT implied in Q4 2024/25 was greater than anticipated, and significant uncertainty remains regarding the full or partial carve-out, and ongoing drag on group results. We continue to see Gabriel’s medium-term outlook underpinned by gradual continuation of growth driven by selective market-share expansion and gradually recovering but weak global furniture markets.

We reiterate our Reduce recommendation as valuation does not favor the current risk/reward

In our view, current 2024/25E valuation multiples of EV/EBIT 28.2x and P/E 31.6x are nearing normalized levels but do not fully reflect still elevated risks relating to an ongoing carve-out of FurnMaster and lingering market uncertainty. The DCF tells a similar story of declining risk and improving outlook, but does not yet demonstrate a clear positive risk-reward. We look ahead to triggers which may shift this balance, such as clearer progress on divestments, sustained stabilization of discontinuing operations, further evidence that growth and margin expansion are durable into 2025/26E and beyond, and further balance sheet strengthening.

Disclaimer: HC Andersen Capital receives payment from Gabriel for a research and digitalIR subscription agreement. / Philip Coombes 08:20 30/10/2025.