• Momentum improved for Svedbergs and Roper Rhodes
• Signals of strong H2'25 EBITA growth
• We raise our fair value range to SEK 46-62 (44-59)

Solid Q2, UK is the star of the show

We saw signs of improvement for both Svedbergs and Roper Rhodes in Q2. Svedbergs grew 0% org. y-o-y (vs. -10% in Q1) and EBITA margins tripled to 3.6%. The segment's target of returning to 10% margins by Q4'25 is thus alive. Roper Rhodes accelerated to org. growth of 8% y-o-y, in a market that we assess shrank. Its EBITA grew 11%. Thebalux also grew, +7% org. y-o-y, although some additional costs to improve production meant margins were slightly lower y-o-y. At group level, organic growth accelerated 150bp vs Q1 to +5% y-o-y. Gross margins improved 280bp on better FX (Roper Rhodes imports in SEK and sells in GBP, primarily) and lower freight rates. This drove a 110bp EBITA margin expansion and EBITA growth of 10%.

We expect further margin improvement in H2

The Q2 outlook comments are slightly more cautious vs Q1, suggesting a delayed recovery in net sales. We believe that Svedbergs Group is well-positioned to continue its profitable growth journey, however. In Q3, Roper Rhodes is raising prices yet again and the FX-driven gross margin gain is likely to be (even) larger. Macro Design's margin improved 6.5pp y-o-y to 15.7%, and we find nothing to suggest this was temporary. Our forecasts suggest Macro Design alone will add 3pp to H2'25 EBITA growth. Upon acquisition in 2016, Macro Design delivered 7% margins. All in all, the M&A strategy seems to work.

Trading at 9.5x '25e EV/EBITA

We raise our '25e-'26e EBITA by 3-2% after the strong Q2. We expect Svedbergs to deliver EBITA margins above its 15% group financial target in 2025, as we forecast a 15.3% margin for the full year. On our estimates, the share is trading at 9.5x '25e EBITA vs. a historical trading range of 7-11x NTM. We raise our fair value range to SEK 46-62 (44-59) on the higher estimates, corresponding to 8.5-11x '25e EBITA.