Orthex is a Finnish household-products manufacturer — storage boxes (SmartStore), kitchenware (GastroMax) and home & garden — with 92% of invoiced sales under own brands and exceptionally clean accounts (APM divergence 0.0%, no capitalized R&D ever). Adjusted ROIC of 16.0% against an 8% WACC produces +€4.0M of economic profit on €50M invested capital.
At €4.36 the market implies roughly −1% perpetual growth: the zero-growth perpetuity of €8.0M adjusted NOPAT already covers the €92M enterprise value with room to spare. A 9.9% FCF yield, 5.3% dividend yield and 1.0x net debt/adjusted EBITDA say the equity is paying you to hold a value-creating small cap.
The tension is near-term and real: the Hormuz Strait crisis pushed oil-linked resin prices up from March 2026, the margin hit lands from Q2 with pricing offsets only gradual, and Nordic consumers (77% of sales) remain cautious (FY2025 net sales −2.8%, cc −4.7%). Rest-of-Europe distribution wins (+16.2% Q1 invoiced) are the offsetting growth engine. The 2022 print — adjusted EBITA margin 6.5% in the last resin spike — shows how far margins can travel.
Capitalising LTM adjusted NOPAT of €8.0M at the 8% WACC with zero growth gives ~€100M enterprise value; less €14.6M net debt (incl. leases and the unfunded Swedish pension) that is ~€4.8 per share on 17.8M shares — above the €4.36 price. In the value-driver frame (reinvestment at 16% ROIC) the market-implied perpetual growth is ~−1.5%: the price embeds decline against a business that earned positive economic profit in four of the last five margin years.
Base €4.80 (+10%): the zero-growth perpetuity value, assuming pricing eventually recovers the resin shock but Nordic demand stays flat. Bull €5.80 (+33%): ~2% perpetual growth at 16% ROIC as Rest-of-Europe distribution compounds and raw materials normalise. Bear €3.10 (−29%): a 2022-style resin squeeze (adjusted EBITA margin toward 6.5–8%) cuts NOPAT to ~€5.5M and the perpetuity to ~€3 per share.
The market pays today’s enterprise value for roughly -9.1% NOPAT growth over 5 years. The business earns 16% on capital against a 8% cost of capital (spread +8.0 pp); the no-growth value is €6/share (133% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | €6 | +0% | +33% | 25% | Resin normalises; Rest-of-Europe compounds (~2% growth) |
| Base | €5 | -6% | +10% | 45% | Zero-growth perpetuity; pricing recovers resin hit |
| Bear | €3 | -19% | -29% | 30% | 2022-style resin squeeze; adj EBITA margin toward 6.5–8% |
| Prob-weighted | €5 | — | +4% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 8 | 9 | 10 | 11 | 12 | 14 |
| 7.25% | 7 | 7 | 8 | 9 | 9 | 11 |
| 8.00% (base) | 6 | 6 | 7 | 7 | 8 | 9 |
| 8.75% | 5 | 5 | 6 | 6 | 7 | 8 |
| 9.50% | 4 | 5 | 5 | 5 | 6 | 6 |
Green = fair value above the current price of €4.36. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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Q1-26 invoiced sales +16.2% outside the Nordics on shelf wins at major chains in France, Switzerland and Germany — the growth engine.
92% of invoiced sales under SmartStore/GastroMax/Orthex brands; gross margin 28.8% and improving product mix.
Net debt/adjusted EBITDA down to 1.0x (2.8x in 2022), equity ratio 49% — capacity for the flagged 2026 strategic investments.
LTM FCF €7.6M (9.9% yield) funds a raised €0.23 dividend (60% payout, ~5.3% yield).
APM divergence 0.0%, all R&D expensed, only €41k of items affecting comparability — reported numbers are the real numbers.
Orthex is a genuinely simple, cleanly reported value creator (16.0% ROIC, +€4.0M EP) priced below its zero-growth worth — but the known, unquantified resin-cost hit from Q2 2026 and a soft Nordic consumer argue for patience over immediacy. HOLD with a constructive lean, medium conviction; base target €4.80 (+10%).
Evidence in the Q2/Q3 2026 prints that price increases are recovering the raw-material shock — or a resin-driven sell-off toward the bear range — would upgrade this to a BUY; a leveraged 2026 acquisition would do the opposite.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| LTM net sales 87.8m (FY 87,212 - Q1-25 20,975 + Q1-26 21,551) | 87.788 | Consolidated statement of comprehensive income, p.20 📄 p.20 | LTM flow anchored on FY2025 income statement (FY p.89) with Q1 comparatives from the interim report |
| LTM operating profit 10.1m | 10.142 | Consolidated statement of comprehensive income, p.20 📄 p.20 | Q1 2026 EBIT 2,076k vs 1,716k - margin up 1.4pp on lower raw material costs and Rest-of-Europe growth |
| FY2025 operating profit 9,782k (LTM anchor) | 9.782 | Consolidated income statement, p.27 of financial statements 📄 p.89 | FY anchor for the LTM build |
| Restructuring add-back 41k | 0.041 | Reconciliation of APMs - items affecting comparability 📄 p.83 | One-off restructuring expense normalized out of LTM NOPAT; Q1 2026 and Q1 2025 had zero items affecting comparability |
| Goodwill 22,718k - entire intangibles balance, no impairment | 22.718 | Note 8 Intangible assets, p.41-42 📄 p.103 | Goodwill from 2015 group formation kept in IC (capital actually deployed); impairment test passed, pre-tax WACC 13.6-14.1%. Other intangibles carry EUR 0 - no PPA amortization to separate |
| No capitalized development costs | 0 | Note 8 - R&D policy 📄 p.103 | Orthex expenses all R&D (IAS 38 criteria never met) - no R&D capitalization reversal needed; reported EBIT is already conservative |
| Lease liabilities 7,632k excluded from IC | 7.632 | Statement of financial position; FY Note 10 p.44-45 📄 p.21 | ROU assets 6,624k = 7.8% of total assets - leased plants/offices/machinery are peripheral vs owned factories; below IC-inclusion threshold |
| Unfunded pension liability 3,863k in IC | 3.863 | Statement of financial position; FY Note 5 p.36-37 📄 p.21 | Swedish defined-benefit plan, no plan assets - debt-like claim on operating capital; net interest (138k FY) sits in financial items so no NOPAT reclass |
| Equity 41,529k at 31 Mar 2026, no NCI | 41.529 | Statement of financial position 📄 p.21 | IC equity leg; translation reserve +32k immaterial (<1%) so no OCI strip. Equity ratio 49% of total assets |
| Cash 13,270k - excess cash 11,514k removed from IC | 13.27 | Statement of financial position 📄 p.21 | Operational cash capped at 2% of LTM revenue (1,756k); the remainder is not deployed operating capital |
| LTM tax 1,831k / PBT 8,671k = 21.1% effective rate | 0.211 | Comprehensive income statement + FY p.89 📄 p.20 | Cash-adjacent effective rate applied to adjusted EBIT for NOPAT |