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Q2 resultsAlligo delivered a solid Q2, with adj. EBITA of SEK 187m, 1% above our estimate (2% above FactSet consensus), on sales 2% above us. Organic growth was +3%, with FX and acquisitions taking the headline to +6%, while the gross margin rose to 40.7% (40.1%) on a higher own-brand share, better mix and lower USD costs. Finland was again the standout, its adj. EBITA margin recovering to 7.0% (4.6%) as the turnaround, industrial sales recovery and defence sales more than offset two phased-out customers; Sweden improved to 8.8% (7.2%), while Norway stayed the drag, its margin easing to 3.2% (3.4%) on continued oil & gas weakness. The result was, however, somewhat flattered by a SEK 9m (4m) contingent-consideration reversal not adjusted for by the company. Estimate changesWe raise our '26e-'28e adj. EBITA by 1-2%, as a much stronger Finland more than offsets a somewhat weaker Norway, with Sweden broadly unchanged. The Finland upgrade reflects a margin recovery ahead of plan and the lost volumes now largely replaced, although we do not fully extrapolate the 7.0% Q2 margin yet. Management still calls the market stable but uneven and cautious; we think organic growth is trending in the right direction and will continue to do so. Outlook and valuationWe believe the margin-recovery story remains intact, supported by encouraging organic growth figures and better than expected progress on the Finnish turnaround. We forecast the adj. EBITA margin moving up to 8.8% from last year's 6.5% by '28e, steadily approaching the 10% target. The share is trading at 13-10x '26e-'28e P/E. The next catalyst is likely to be some kind of strategy update from the new CEO Samuel Alteborg once he has landed in his new role. |