Fasadgruppen Q1'26 preview: Weak start expected before backloaded recovery

Source: Inderes & Bloomberg, 2025.05.13, 4 analysts

Fasadgruppen will publish its Q1 report on Thursday, 21 May, and the earnings presentation can be followed here. We expect a weak start to the year with notable year-over-year declines in both revenue and profitability, primarily driven by a lower opening order backlog, soft market conditions, and typical seasonal headwinds. However, we anticipate a gradual recovery from Q2'26 and especially in H2'26 as market sentiment improves and the execution of Clear Line's UK backlog increases. In the upcoming Q1 report, we will look for signs of stabilizing demand and progress in the execution of the UK project backlog.

Weak start to the year expected due to soft market conditions

We estimate Q1 revenue to decline by roughly 14% to 1,010 MSEK, below the consensus forecast. However, we expect reported revenue growth to be negatively affected by the divestment of Alnova, as well as FX effects. Adjusted for these, we expect the FX-adjusted organic growth to amount to -9% in Q1. This negative growth is largely driven by weaker order intake at the end of 2025 and continued soft market conditions, particularly in Norway. Furthermore, we believe that the company has been negatively affected by a cold winter in January and February, delaying project starts within renovation. While new construction projects can sometimes offset seasonal weakness because winter work is more common in that segment, we believe the new-build market remains very slow, which will weigh on revenues. By segment, we expect Total Solutions to generate 492 MSEK in revenue (-15% y/y), reflecting the lower order backlog entering the year. For Specialist Solutions, we estimate revenue of 374 MSEK (-12% y/y), with growth hampered by the divestment of Alnova. In the Clear Line segment, we forecast revenue of 143 MSEK (-18% y/y), as we anticipate a weaker first half of the year before project execution ramps up following earlier regulatory approval delays in the UK.

Margins pressured by lower volumes

We expect Q1 adjusted EBITA to decline sharply to roughly 15 MSEK, corresponding to a margin of 1.4% (Q1'25: 6.5%), below the consensus forecast. We believe the margin contraction is primarily driven by lower volumes, which limits the efficient absorption of fixed costs, as well as continued intense competition in the renovation market. We believe that companies previously focused on new-build construction have increasingly entered the renovation segment, putting downward pressure on pricing. We note, however, that Q1 is typically weaker than the rest of the year (adj. EBITA constituting only around 10-15% of full-year adj. EBITA during the past five years on average). Further down the income statement, we estimate that high financial expenses will continue to weigh on profitability, leading to an estimated EPS of -0.23 SEK (Q1'25: -0.10 SEK).

Focus on order intake and signs of H2 recovery

Fasadgruppen does not provide formal financial guidance. Therefore, our focus will be on management's commentary regarding market dynamics, order intake, and project pipelines. Even though we expect the first quarter to be weak, we believe this is largely due to delayed project starts. Therefore, we expect the company's performance to be backloaded, with a gradual recovery anticipated from Q2'26 and especially in H2'26 as market sentiment improves and the execution of Clear Line's UK backlog increases. The company previously indicated that around 750 MSEK of its backlog has been cleared for execution following regulatory delays, and any updates on the pace of these project starts will be crucial for our full-year estimates. Finally, we will look for commentary on how the Middle East conflict affects the company. This includes its impact on demand via investment decisions and its impact on costs, as higher energy prices can raise building material prices.