Sweden's Svedbergs Q3 net sales rise on UBC acquisition

Overview

• Sweden bathroom products maker Q3 net sales rose 16.5%, driven by UBC acquisition

• Q3 EBITA margin declined to 13.4% from 15.1% due to lower-margin UBC and higher costs

• Company incurred SEK 9.5 mln in non-recurring restructuring costs during the quarter

Outlook

• Company sees cautiously positive market signals despite continued uncertainties

• Company aims to gradually return to its long-term EBITA margin target of 15%

• Logistics costs expected to normalize after new solution is implemented in Q1 2027

Result Drivers

• UBC ACQUISITION - Co said Q3 revenue growth was mainly driven by UBC acquisition, which contributed 17.1% and expanded presence in Central Europe

• HIGHER COSTS - Co attributed lower profit margin to UBC's lower margin, increased transportation costs, adverse currency effects in UK, and elevated logistics costs

• RESTRUCTURING COSTS - Non-recurring restructuring costs of SEK 9.5 mln affected operating profit in Q3

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the construction supplies & fixtures peer group is "buy"

• Wall Street's median 12-month price target for Svedbergs Group AB is SEK74.75, about 29.8% above its October 21 closing price of SEK57.60

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 14 three months ago

Reuters Recommended Reads

• Oct 20 - Sweden's Byggmax Q3 sales and profit rise

• Oct 21 - Sweden's Inwido Q3 sales rise 22%, order backlog hits record

• Oct 20 - Wickes' third-quarter sales climb as low-price strategy draws shoppers

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)