Equity research Lohilo Foods: Growth momentum in slow season

We expect continued solid growth in the first quarter, driven by good momentum and more listings for Lohilo’s own brands portfolio. However, the beginning of the year is a slow season, especially for the ice cream category. Also, in general, sales growth in Swedish grocery stores has been negatively affected by an unfavourable comparison due to the late Easter Holiday in 2025 (approx. -2.3 per cent negative calendar effect).  According to Svensk Dagligvaruhandel, Swedish grocery sales (including e-commerce) increased by 1.9 per cent in Q1 2025.

Profitability-wise, we have a somewhat cautious view of earnings as raw material effects may linger. Also, there is relatively lower capacity utilisation during winter. Consequently, we have assumed a break-even result (EBITDA) for Lohilo during this period. However, we expect less margin headwinds and better operating leverage going forward as sales increase. Cash flow is a bit of a challenge due to seasonal build-up in working capital. However, Lohilo stated that it has secured the means to manage the swings in cash.

We make no adjustments to our estimates ahead of the report. As Q1 could be viewed as an in-between quarter, we believe the primary focus will be on any forward-looking signals.

The share has been relatively stable in a volatile market environment. We do not see any immediate meaningful impact on Lohilo operations from the trade wars.

We will review our forecasts and valuation in more detail on 15 May in conjunction with the Q1 2025 report.

Read the initiation of coverage report here.

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