Flügger closed 2025/26 with revenue of MDKK 2,313 (+2% y/y), marginally above our MDKK 2,298 estimate, and EBIT of MDKK 108 (+15%), both within guidance. Reported EBIT met our forecast, though earnings quality was a touch softer, with EBITDA, PTP and EPS landing a few percent below as admin and ERP costs ran ahead of our modelling. Poland again led growth at +11% local currency for the full year, while the Nordic segment rose 2% as the planned private-label phase-out masked improving core demand from professional painters and consumers. The new 2026/27 guidance of MDKK 2,400-2,500 revenue and MDKK 105-125 EBIT lifts our revenue outlook but trims our EBIT trajectory, the main change to our estimates for 2026/27e. We reiterate our "Accumulate" recommendation, with the ongoing sanctions case remaining the key risk factor.

Nordic coatings group with international growth engine

Flügger is a family-controlled decorative paints group with strong Nordic market position and a growing Central European footprint, operating through three segments: Nordics, International and Partnerships. A central thread of the strategy is the deliberate tilt toward the professional painter (B2B), where the exit from low-margin private-label volumes both lifts the sales mix toward higher-margin own brands and reduces exposure to the more volatile, consumer-driven DIY market, leaving a more stable and resilient revenue base. In the Nordics, housing and renovation activity remains subdued, but profitability is improving as professional-painter demand shows the first signs of recovery. The International segment is anchored in Poland, which is the group's key growth engine, where continued store openings have expanded the network to 68 own stores and sustained double-digit local-currency growth. Partnerships is the smaller, more locally focused part of the group and carries longer-term optionality tied to an eventual Ukrainian rebuild. With the strategy staying purely organic and no M&A planned, the margin-expansion case rests on execution rather than acquisitions.

 Stronger revenue guidance and softer EBIT outlook

Full-year revenue grew 2% to MDKK 2,313, held back by the Danish private-label phase-out but supported by strong Polish growth and an improving product mix that lifted the gross margin to a historically high level. Strong cash generation enabled further deleveraging, with cash flow after investments reaching a record MDKK 272 and net interest-bearing debt excl. leases down to MDKK 124 (from MDKK 250). On the stronger topline guidance, we raise our revenue estimates for 2027e and 2028e, while the softer EBIT range leads us to cut EBIT and align DPS with the realized DKK 20.00 ordinary payout plus a buyback. The ongoing sanctions case remains the principal risk, alongside raw-material inflation and the cyclicality of Nordic construction.

Updated estimates leave absolute and relative valuation supportive of a higher target  

Our DCF-based model value of DKK 423 per share highlights the value to be unlocked from a sustained, purely organic margin recovery toward 7-8% EBIT margins, with improving professional painter demand indicating the rebound is intact. The DCF implies value-creation potential even after a risk-weighted adjustment for the ongoing sanctions case. Flügger also screens at a clear discount to its coatings peers while offering an aboveaverage dividend yield, and with downside reduced following deleveraging and the medium-term return exceeding our required rate, we reiterate our "Accumulate" recommendation and raise our target price to DKK 410 per share (prev. DKK 360).

Disclaimer: HC Andersen Capital receives payment from Flügger for a DigitalIR and research agreement. Rasmus Køjborg and Victor Skriver 07:00 30/06-2026, updated 16:33