Embellence Group

In this fundamental analysis report, analysts Michael Sedigh and Viktor Gautvik take a closer
look at Embellence Group, a Swedish premium interior design company operating a House of
Brands within wallpaper, textiles, and window films. Embellence benefits from a strong brand
portfolio, in-house production capabilities, and a growing exposure to attractive markets
such as the U.S. and hospitality. The market underestimates the Company’s margin expansion
potential, driven by a sales-mix shift toward Direct-To-Consumer (D2C) channels through new
E-commerce platforms. As D2C penetration increases, EBIT margins are estimated to expand
from 12.0% in 2024A to 15.1% by 2028E. Based on an equally weighted DCF and peer
valuation using a target multiple of 9.4x EV/EBIT 2027E, a target price of 51.5 SEK per share is
implied, corresponding to an upside of 35.5%.

Investment Thesis
● Sales-mix Shift Toward Increasing D2C Strengthens Margins
● The U.S. Market Offers Strategic Growth Opportunity
● Embellence’s Subsidiary Borås Tapetfabrik Becoming a Stronger Backbone