<a id="bm-comp-4e5959fb-05f6-4b85-831c-4bf8bfe8f4f0" name="bm-comp-4e5959fb-05f6-4b85-831c-4bf8bfe8f4f0" class="BMCustomAnchor"></a><table><tr><td bm-component-id="4e5959fb-05f6-4b85-831c-4bf8bfe8f4f0" style="vertical-align: top; width:100.000000%;"><ul><li>We expect an uneventful Q3</li><li>Q3e net sales of SEK 179m, EBITA of SEK 29m</li><li>We reiterate our SEK 36-43 fair value range</li></ul></td></tr></table><a id="bm-comp-d7e12d17-313a-40fb-b8c7-a1e0e1f32474" name="bm-comp-d7e12d17-313a-40fb-b8c7-a1e0e1f32474" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d7e12d17-313a-40fb-b8c7-a1e0e1f32474" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Accelerating into Q3e on easier comps</h3><p>Heading into Q3, we expect little change in underlying momentum vs. Q2, and forecast organic acceleration of close to 5pp on easier comps for all Group brands. While it is unlikely to have a meaningful impact on Group performance, we are particularly interested in Pappelina's (6% of Q3e sales) performance. Pappelina's management team has recently been replaced, and work on DTC has ramped up with e.g. a new <a data-bm-trackable="false" href="https://pappelina.com/sv" target="_blank">website</a>. The next few quarters' growth outcome could thus be indicative of what's to come for the other brands, in our view. We expect gross margins to stabilise at a level close to 2024 (+20bp y-o-y), while added efforts in improving the DTC experience and the hiring of new competencies (e.g. a new head of e-commerce role) could drive SG&amp;A 4% higher y-o-y. Overall, we forecast an EBITA margin expansion of 110bp for EBITA of SEK 29m (+13% y-o-y).</p><h3 class="bm-h3">We lower '25e-'27e EBITA, mainly on updated FX</h3><p>We lower EBITA by 3-1%, primarily driven by updated FX rates. We also fine-tune our near-term gross margins on the back of the strong SEK, and raise our SG&amp;A estimates to account for the accelerated hiring of new DTC competencies. So far, we do not expect added investments in e.g. marketing, but instead expect the near-term focus to be on improving websites. The Pappelina site is much-improved, and Cole &amp; Son could be next.</p><h3 class="bm-h3">We reiterate our SEK 36-43 fair value range</h3><p>The Embellence share is trading at 7.5x-6.6x our '25e-'26e EBITA. On our 3-1% lower EBITA for '25e-'27e, we leave our fair value range unchanged at SEK 36-43, which corresponds to 8x-9x NTM EV/EBITA vs. its L3Y trading range of 6.8x-7.8x NTM. Embellence Group is inching closer to its 15% EBITA margin target; we expect it to be reached in LTM terms in Q4'25e, and we also forecast 8-12% post-lease FCF yields for '25e-'27e.</p></td></tr></table>