* Mild winter in Q4, but sequentially easing comps: organic growth -1% * Cost savings took effect in Q3, expect y-o-y margin up 0.6pp to 8.9% * Winter cold hit around 1 January, supports return to growth in Q1
Q4 expectations
The winter in Q4 was very mild, which is negative for Alligo due to demand for important product categories such as hydraulics and winter clothing correlating inversely with temperature. However, the winter in the comparison period was also very mild, and given unchanged underlying demand q-o-q and a sequential easing of comparative figures, this leads us to forecast organic growth of -1% vs. -3% in Q3. On the adj. EBITA margin, we expect a y-o-y improvement to 8.9% (8.3%) due to the cost savings that took effect in Q3.
Estimate changes
We only fine-tune our '26-'27 estimates, trimming adj. EBITA by 2%, half of which is due to FX.
Outlook & valuation
Investors are still awaiting the announcement of a successor to outgoing CEO Clein Ullenvik, but in the meantime, cold winter weather hit the Nordics properly around 1 January, boding well for our forecast of a return to organic growth in Q1 (3%) for the first time in 11 quarters. This should support our full-year estimate of 4.5% organic growth, which in turn enables margin expansion from 6.4% to 7.4%, as the drop-through on new volumes should be high. The share is currently trading at a '26e-'27e P/E of 14-11x, and we reiterate our fair value range of SEK 110-200.