* Sales SEK 20m vs. ABGSCe 26m, EBIT roughly in line
* Cost control holds EBIT despite soft top line
* Management guides to approach FY break-even
Q2 results
ES reported soft sales of SEK 20m (vs. ABGSCe 26m), as the company had guided for in its Q1 report. Residential continues to be the sales driver, with sales of SEK 17m (vs. 13m LY), while Commercial sales remain softer but were up slightly y-o-y (SEK 2.4m, +36% y-o-y). We find it encouraging that ES-branded sales continue to grow (+23% y-o-y), representing ~70% of quarterly sales. EBIT came in only modestly below our estimate (SEK -1m vs ABGSCe) at SEK -13m (-16m LY), as cost savings largely offset the miss on the top line. Inventory levels were down, though FCF remained negative at SEK -7m (-8.6m LY). The company ended the quarter with a cash balance of SEK 18m (21m LY), which the post-quarter SEK 17.8m unit issue will roughly double.
Estimate changes and outlook
On numbers alone, '26e-'28e sales is impacted negatively by 3-2% and EBIT changes by SEK -1m (vs. FY'26e estimate of SEK -10m). Management reiterated that H2 should be seasonally stronger, as postponed ODM/white-label orders are placed, and writes it expects to approach break-even for the full year. Post-quarter, ES entered a technology partnership with Enrad on propane heat pumps for commercial properties. Moreover, the targeted unit issue (SEK 17.8m, with management and board participating) strengthens the balance sheet ahead of the H2 ramp.
Valuation
Prior to today's report, the share was down 7% L3M and is on our pre-report estimates and is trading at 17-6x '27e-'28e P/E on our pre-report estimates.