Signs of recovery in fashion - Q3 review

We were encouraged to see accelerating organic growth and that fashion showed signs of improvement in Europe as well as in North America. Supply Chain Solutions (SCS) is in good shape, and as volumes recover, we expect the EBITA margin to accelerate. We leave our fair value range at SEK80–115.

Signs of recovery in fashion... Driven by new customers, sales grew 6% organically Y/Y. Electronics suffered from the memory chip shortage, fashion saw signs of improvement in Europe as well as North America, automotive grew 7% despite negative growth in Print & Packaging and industrial grew somewhat, driven by Europe. The UK and US developed positively, but Europe and Asia were the main drivers. SCS posted 7% organic growth, while Print & Packaging showed no organic growth.

… and expanding margins in SCS. The EBITA margin contracted 40bps Y/Y to 6.9% in Q3 on the back of Print & Packaging, whose EBITA margin more than halved to 2.9%. SCS, the contract logistics division, kept improving – the EBITA margin expanded 30bps to 8.2%. The company announced structural measures in Print & Packaging in Germany and has also changed management in Poland. We expect the group EBITA margin to improve gradually in 2027–28.

Exit of lease agreements set to enhance capacity utilisation. While demand improved, overcapacity remains in some logistics operations. We think the measures to reduce the footprint announced earlier this year, including the option to exit a number of major lease agreements in the UK and US in late 2026 and 2027, together with improving market conditions in both markets, are set to enhance capacity utilisation, reduce the cost base and further strengthen profitability.

Low single-digit estimate changes. We raise our 2026–28e adj. EPS by 1–3% on the back of slightly better EBITA than we had expected. Our fair value range remains SEK80–115.