Gabriel Q2'25/26 preview: Focus on continued operations momentum

Gabriel Holding will report its Q2 2025/26 results on Thursday, May 7, 2026. We expect the group results to show a continued revenue decline y/y, driven entirely by the ongoing FurnMaster wind-down, while continuing operations should demonstrate sustained growth from the key account strategy. We estimate that the EBIT margin in Q2 will expand slightly, despite being at a similar level in absolute terms, reflecting operating leverage in the continuing business, and a less negative effect from FurnMaster. Our recommendation remains Accumulate with a target price of DKK 270 per share.

Continuing operations growth masked by FurnMaster decline at the group level

We forecast Q2 group revenue of MDKK 229, representing a 7.3% decline y/y (Q2'25: MDKK 247). The decline is attributable to the continued wind-down of FurnMaster's North American operations, where unprofitable contracts are being terminated as part of the restructuring ahead of the planned carve-out. We expect FurnMaster quarterly revenue to stabilize around MDKK 80-85, below prior-year levels. Conversely, we expect the continuing Gabriel Fabrics business to have maintained its positive growth trajectory, supported by the "grow with the biggest 70 furniture producers" key account strategy that delivered 4.7% growth in Q1. Continued market share gains across Europe, North America, and Asia Pacific, combined with a gradually improving contract furniture market outlook, should underpin further progress. For the full year, we estimate group revenue of MDKK 882, with continuing operations revenue towards the high end of the guidance range of MDKK 510-550.

Margin expansion continues as operating leverage builds in continuing operations

We estimate Q2 EBITDA of MDKK 29.3 (Q2'25: MDKK 30.9) and EBIT of MDKK 15.3 (Q2'25: MDKK 15.7), implying an EBIT margin of 6.7% (Q2'25: 6.3%). Despite group revenue declining, we expect the profitability picture to improve, driven by further operating leverage in the continuing business as production assets and showrooms exhibit scale benefits and gross margins benefit from favourable pricing with large global clients. We expect FurnMaster to remain loss-making but with narrowing losses compared to prior year, consistent with the Q1 trend. Pre-tax profit is estimated at MDKK 13.7 (Q2'25: MDKK 12.0), benefiting from improved operating results partially offset by financing costs. We forecast Q2 EPS of DKK 5.53 (Q2'25: DKK 5.52), essentially flat y/y as the improving continuing operations offset FurnMaster headwinds. For the full year, we estimate EBIT around MDKK 49 for continuing operations, near the high end of the EBIT guidance of MDKK 40-55, with an EBIT estimate at the group level for MDKK 41.9, given some ongoing drag from FurnMaster.

Continued operations and guidance in focus with ongoing monitoring FurnMaster carve-out

Gabriel delivered growth of 4.7% in the first quarter, which is above the midpoint of the guidance for continuing activity at 2.7% (-1.2% to 6.6%). We will therefore monitor whether this development continues in the second quarter, as well as the overall performance in the first half, and whether management maintains or narrows its guidance for continuing operations for the full year. In the Q2 report, we continue to monitor progress in the FurnMaster carve-out. Management expects proceeds at least in line with the book value, most recently measured at MDKK 208, and a potential sale, as assessed by management, could take place in 2025/26. Based on the lower gearing level, we assume management can wait to until a reasonable valuation is agreed with a buyer. The current valuation of EV/EBIT 18.3x for FY 2025/26e compressing to 10.4x for FY 2026/27e continues to support an attractive risk/reward, with FurnMaster completion providing an additional catalyst.

Disclaimer: HC Andersen Capital receives payment from Gabriel for a DigitalIR and research agreement. /Philip Coombes and Victor Skriver 11:35 23/04/2026