* We see 1% organic growth in Q2 as the winter weather boost fades
* Cost savings and FX lift adj. EBITA margin 1.4pp y-o-y to 7.2%
* New CEO Samuel Alteborg took over the helm on 1 June
Q2 expectations
The strong Q1 organic growth of 5% was boosted by cold winter weather, which naturally did not recur in Q2. With underlying demand stable q-o-q, we forecast organic growth of 1%, with FX and bolt-on M&A lifting total growth to around 4%. The positive gross margin trend should persist, driven by own-brand sales and favourable FX, and we forecast 41.5% (40.1%). Together with the final quarter of benefit from the H2'25 cost savings, this takes the adj. EBITA margin to 7.2% (5.8%). We expect the Finland restructuring to continue, but at a lower one-off cost than in Q1, at around SEK -4m.
Estimate changes
We make only very minor changes, leaving our '26e-'28e estimates broadly unchanged. Sweden continues to develop well, while the Finland restructuring keeps weighing somewhat on the near-term results, albeit with lower one-off costs in Q2 than in Q1.
Outlook and valuation
Samuel Alteborg took over as CEO on 1 June, having previously led rental company Cramo, and we look forward to hearing his strategy for Alligo after the summer. Our early impression is that his experience is highly relevant and that near-term continuity is intact. Our overall view is unchanged: Alligo should reap the rewards of an improving market over the coming years, with organic growth driving further margin recovery and, in turn, substantial adj. EPS growth of around 25% in '26e. The share is trading at a '26e-'28e P/E of 12-9x, and we reiterate our fair value range of SEK 120-190.