Equity research Zinzino Q2 2026: Strong profitability trend

Read the full report here:

An unexpectedly high margin well above company targets drove a significant 32% EBITDA beat versus our estimates. It demonstrates improved operating leverage despite slower growth compared to recent quarters. We raise our near-term margin expectations and the base-case valuation.

Full-year sales outlook intact

In our view, Q2 2026 followed a similar pattern to the previous quarter, with growth moderating, but significantly strengthened margins. The 18% total revenue growth was in line with the preliminary sales pre-announcement from July. The company reiterates its target of at least 20% growth for 2026 while acknowledging that the strong development in 2025 makes the comparison difficult. In this respect, while we conclude that the contribution from acquisitions so far has been smaller than expected, group organic growth (not disclosed) appears to remain positive and slightly above our expectations. We believe this is encouraging given that the comparison period in Q2 2025 was extremely strong. Expected growth drivers in the second half include new markets in e.g., Asia, as well as the core regions of North America and Central Europe.

Mix effects and contained costs continue to drive margin increase

The EBITDA result improved to SEK 153m (80), 32 per cent above our expectations, corresponding to a near-record margin of 16.3% (10) or 15.9% YTD 2026. The outperformance was driven by a significantly improved gross margin and a more contained increase in OPEX than expected. Zinzino’s target of at least 11% EBITDA margin looks decidedly conservative, at least in the near term. The report attributes the improved gross margin to lower raw material costs, a favourable geographical mix, and normalised distributor remuneration during the quarter. The higher EBITDA margin was also supported by scale benefits and the gradual realisation of synergies from ItWorks!. While we are cautious about fully extrapolating the Q2 margin, we have arguably been conservative on profitability and now assume a more drawn-out contraction from current levels.

Earnings beat and growth outlook support increased estimates

We have raised our EBITDA forecast by an average of 7 per cent over 2026-2028E. As before, we assume slightly below ten per cent organic growth for 2026. The updated forecasts boost the DCF and multiple valuations, resulting in an increased base case valuation to SEK 228 per share (210). This corresponds to an EV/EBIT NTM multiple of 14.2x.

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyses. The information has been compiled from sources that Carlsquare considers to be reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or the like. Opinions and conclusions expressed in the analysis are intended only for the recipient.

The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns.

The analysis is not directed to US persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution.

The analysis is a so-called Commissioned Research Report where the analysed company has signed an agreement with Carlsquare for analysis coverage. The analyses are published on an ongoing basis during the contract period and for a usual fixed remuneration.

Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Niklas Elmhammer and Markus Augustsson do not own and are not allowed to own shares in the company analysed.