* Organic momentum improved in all segments * A recovery in Swedish housing could drive 18% EBITA growth * We reiterate our SEK 50-66 fair value range Q3: acceleration and ATH GM All segments accelerated in Q3: the group grew 7% organically vs. 5% in Q2. The primary driver of this acceleration was the Svedbergs segment, which went from flat org. growth in Q2 to 7% in Q3. We believe the change to be market-driven to a large extent. BHG commented on improved demand for bathroom products as well in Q3, but it appears the project market is still somewhat sluggish, making up only 10% of the segment vs 30-40% pre-pandemic. As such, an improvement in the primary housing market would be incremental from here. Gross margins improved to 48.5%, an all-time high, supported by price adjustments and lower shipping costs for Roper Rhodes. In Q3'25, Svedbergs also passed its financial target of a 15% margin in LTM terms: EBITA of SEK 80m corresponded to 12% growth y-o-y. Margins could expand further in '26e We find reason to believe the Svedbergs segment's margin story is not over. Since 2019, the Svedbergs brand has reported an incremental margin around 30%. There is significant upside in the event of a recovery in the housing market, to the tune of SEK ~60m in EBITA (assuming Svedbergs reaches a historical 30% share of sales in the project market), which equals 18% of '25e EBITA, even assuming efficiency improvements in the factory do not lead to improved profitability for the business toward secondary markets. We also assume margin savings from upgraded production facilities in Thebalux and expect gross margin support from lower freight rates in Roper Rhodes, a tailwind until Q2'26 at least. We reiterate our SEK 50-66 fair value range We raise our '25e-'27e EBITA by 1%, seeing better top-line momentum than expected and stronger gross margins. We thus maintain our SEK 50-66 fair value range, corresponding to 8x-11x '26e EV/EBITA. Svedbergs Group's leverage looks ready for M&A.
