<a id="bm-comp-36a493e2-ff8a-4f2a-90ed-966e07c449da" name="bm-comp-36a493e2-ff8a-4f2a-90ed-966e07c449da" class="BMCustomAnchor"></a><table><tr><td bm-component-id="36a493e2-ff8a-4f2a-90ed-966e07c449da" style="vertical-align: top; width:100.000000%;"><ul><li>We forecast net sales of SEK 178m in Q3'26e</li><li>DTC-related cost ramp-up now in comps, EBITA +3% y-o-y</li><li>We reiterate our fair value range of SEK 35-42</li></ul></td></tr></table><a id="bm-comp-c90a1d79-c142-49d9-95d4-09c18fe790aa" name="bm-comp-c90a1d79-c142-49d9-95d4-09c18fe790aa" class="BMCustomAnchor"></a><table><tr><td bm-component-id="c90a1d79-c142-49d9-95d4-09c18fe790aa" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Pappelina and external manufacturing drive growth</h3><p>We expect growth in Q3'26 to be driven by Pappelina and external manufacturing. Pappelina (+20% net sales growth y-o-y) mostly due to its newfound momentum from DTC, external manufacturing (+10%) driven by strong growth for digital print especially, whereas we expect Cole & Son (-3%) to underperform after the agent switch, for net sales growth of 2% y-o-y for the Group (+1.4% org.). From Q3, Embellence will meet comparison quarters in which it had ramped up its DTC efforts (and thus also its cost base), e.g. through hiring a new e-commerce manager. After four straight quarters of margin declines y-o-y, we thus expect a return to margin expansion, primarily driven by continued gross margin gains. For Q3, we forecast a 20bp EBITA margin expansion to 13.8%, for EBITA of SEK 24.5m, +3% y-o-y.</p><h3 class="bm-h3">Pappelina's acceleration came with a 6m lag</h3><p>We make very limited estimate changes in this note. Our forecasts reflect accelerating organic growth into 2027, driven by Embellence's DTC efforts. Pappelina migrated to a new e-commerce platform in July 2025, and the growth in recent quarters (12% in Q1'26, 27% in Q2'26) is an indicator of the potential. The larger brands Cole & Son and Boråstapeter went live on the new platform in Q4'25 and Apr'26, respectively, so an acceleration may have to wait until 2027 assuming the same lag as for Pappelina. We will look for any DTC data in the report.</p><h3 class="bm-h3">We reiterate our fair value range of SEK 35-42</h3><p>As we make only minor estimate revisions, we reiterate our fair value range of SEK 35-42, based on the company's own historical trading range of 7.1x-8.1x NTM EV/EBITA. The share is currently trading at 7.4x/6.1x EV/EBITA '26e/'28e, in the lower end of this range. We estimate a 12%/14% FCF yield '27e/'28e, and a dividend yield of 6.1-6.9% for the same years.</p></td></tr></table>