TCM.CO — mttssn research

HOLD

Conviction: LOW

TCM Group is Scandinavia's #3 kitchen/bathroom manufacturer, reaching ~220 points of sale through ~140 independent dealers plus the newly consolidated Celebert e-commerce arm. Adjusted ROIC 8.52% barely clears the 8% WACC (EP +DKK5.0m, thin); reverse-DCF prices near-zero perpetual growth, so the DKK69.8 shares sit at fair value, not a discount. A housing-cycle recovery (Q1 gross margin +2.2pp YoY) is the swing factor. HOLD, low conviction.

Adj. ROIC

8.5%

WACC 8% → spread +0.5pp

Economic Profit

+DKK 5M

Thin -- adjusted ROIC 8.52% ~= 8% WACC, EP +DKK5.0m

FCF Yield

n/a

LTM FCF DKK95.7m (> adjusted NOPAT DKK81.3m); Q1 2026 cash conversion 106.1%

Price / Target

DKK 70 → DKK 70

+0% base; HOLD

Revenue (LTM)

DKK 1.3B

LTM DKK1,333.5m; Q1 2026 +17.6% YoY (organic +8.2%)

EBIT Margin

9.2%

Adjusted EBIT margin 7.8% (company definition); gross margin 23.3%, +2.2pp YoY

EV / IC

n/a

Enterprise value / invested capital

Net Debt

n/a

NIBD DKK371.2m; leverage 2.57x adj. EBITDA, down from 3.04x at FY2025-end

Thesis

TCM Group is Scandinavia's third-largest kitchen manufacturer (Svane Koekkenet, Tvis Koekken, Nettoline, AUBO, private label), designing and manufacturing in-house at four Danish sites and reaching customers mainly through ~140 independent dealers and franchise stores (220 points of sale) rather than a company-store network. The November 2025 Celebert ApS acquisition (45%->100%, DKK80m cash) adds a full-owned online channel and pushes the group incrementally toward owned retail (111 branded stores, four acquired in 2025).

Economics are thin, not exceptional: adjusted ROIC of 8.52% only just clears the 8% WACC, leaving economic profit of +DKK5.0m on a DKK954.2m invested-capital base that is 91.8% goodwill/brand intangibles from three M&A vintages (2016 TCM buyout, 2023 AUBO, 2025 Celebert). The spread has been positive in 6 of the last 8 years, but the current LTM cut is a trough print, not a widening one.

The near-term thesis rides the Nordic housing/renovation cycle: Q1 2026 revenue grew 17.6% YoY (organic +8.2%) with gross margin up 2.2pp to 23.3% on efficiency projects and a B2C mix shift, and FY2026 guidance (revenue DKK1,400-1,500m, adjusted EBITA DKK120-140m) implies real growth from the DKK110.2m FY2025 base. Reverse-DCF already prices close to zero perpetual growth, so the equity is fairly valued on a conservative read -- upside requires the guidance step-up to actually land against emerging raw-material/freight cost pressure.

Valuation · reverse-DCF & scenarios

Bridging adjusted NOPAT (DKK81.3m) through the EV/reverse-DCF sensitivity table: fair enterprise value at 0% perpetual growth (DKK1,053.2m) implies a per-share value of ~DKK69.8 -- essentially today's price. At GDP-level 2.5% growth, fair value is ~DKK71.5 (+1.6%); at 5%, ~DKK72.8 (+2.9%). The market is not pricing meaningful growth, but nor is there a cushion below intrinsic value -- the shares are fair, not cheap.

Base DKK70 (flat to current, thin spread persists, modest growth); bull DKK88 (Nordic housing recovery sustains, FY2026 guidance of DKK120-140m adjusted EBITA delivered, gross-margin gains hold, Celebert integration accretive -- roughly +26%); bear DKK55 (raw-material/freight inflation erodes the recent gross-margin gain, B2B project-market order intake stays weak, EP turns negative -- roughly -21%).

Market-implied growth

+0.0%

NOPAT CAGR over 5y the EV already requires

No-growth value / share

DKK 70

100% of price; rest = priced-in growth

ROIC − WACC

+0.5 pp

ROIC 8.5% vs WACC 8.0% — positive = value creation

CAP (priced-in)

n/a

years of excess returns the price implies (fades to WACC)

The market pays today’s enterprise value for roughly 0.0% NOPAT growth over 5 years. The business earns 9% on capital against a 8% cost of capital (spread +0.5 pp); the no-growth value is DKK 70/share (100% of price), so the rest is priced-in growth.

Scenario	24m target	Impl. g	Upside	Prob.	Driver
Bull	DKK 88	≥8%	+26%	30%	Nordic housing recovery sustains, FY2026 guidance (EBITA DKK120-140m) delivered, gross-margin gains hold
Base	DKK 70	+0%	+0%	45%	Fair value near current price; thin ROIC-WACC spread persists, modest growth
Bear	DKK 55	-15%	-21%	25%	Raw-material/freight inflation erodes margin gain; B2B project-market order intake stays weak
Prob-weighted	DKK 72	—	+3%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at WACC × growth

WACC \ g	0%	3%	5%	8%	10%	15%
6.50%	105	111	116	123	128	139
7.25%	84	88	91	95	97	101
8.00% (base)	70	72	73	74	74	73
8.75%	59	59	59	58	57	53
9.50%	50	49	48	46	44	37

Green = fair value above the current price of DKK 69.80. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

Method & data. NOPAT DKK 81, invested capital and ROIC 8.5% are observed (adjustments.json); WACC 8.0% and terminal g 2.5% are assumptions. EV→equity uses net debt DKK 332. The model holds ROIC constant (no fade) over the explicit horizon; the CAP figure instead fades excess returns to WACC.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Nordic housing-cycle recovery

Denmark +20.0% and Norway +9.3% Q1 2026 revenue growth signal a gradual market recovery from a prolonged downturn, the primary top-line lever.

2. Gross-margin efficiency gains

Internal efficiency projects plus a B2C mix shift lifted gross margin to 23.3% (Q1 2026) from 21.1% (Q1 2025), the direct driver of the recent EBIT-margin improvement.

3. Celebert omnichannel integration

Full ownership of a leading Nordic online kitchen retailer (Kitchn.dk, Billigskabe.dk, Celebert, Just Wood) broadens the dealer-led distribution model into e-commerce.

4. FY2026 guidance step-up

Revenue DKK1,400-1,500m and adjusted EBITA DKK120-140m guided, both above the LTM Q1 2026 base (DKK1,333.5m / DKK116.7m) -- the key re-rating catalyst if delivered.

5. Independent-dealer distribution reach

~140 dealers across 220 points of sale give TCM shelf presence without carrying company-store operating leverage or lease exposure (ROU assets just 2.9% of assets).

Key risks

Thin economic spreadAdjusted ROIC 8.52% barely clears the 8% WACC; EP only +DKK5.0m leaves little buffer against a cost or demand shock.
Input-cost inflationManagement flagged rising raw-material and freight costs late in Q1 2026 from higher oil prices -- a direct threat to the recent gross-margin gain.
Customer concentrationTwo B2B customers each exceeded 10% of FY2025 revenue (DKK195m and DKK140m, ~26% combined) within the single kitchens/bathrooms/storage segment -- order-timing risk in the project channel.
Goodwill-heavy balance sheetIntangibles are 91.8% of adjusted invested capital across three M&A-built CGUs; a future impairment would hit book value even though none has been triggered to date.
Data-freshness edgeQ1 2026 (118 days stale at computed_at) is the freshest report available; Q2 2026 is due 2026-08-20 -- re-stream promptly to confirm whether the guidance trajectory is on track.

Conclusion

TCM Group is a well-run, dealer-distributed Nordic kitchen manufacturer whose returns barely clear the cost of capital and whose equity, on a conservative reverse-DCF, is fairly valued rather than discounted. HOLD, low conviction; base target DKK70 (essentially flat).

A confirmed Nordic housing-cycle recovery that delivers the FY2026 guidance step-up (DKK120-140m adjusted EBITA) without raw-material/freight cost erosion would widen the economic-profit spread and support the bull case; a stalled recovery or margin reversal would push toward the bear case. Re-stream on the Q2 2026 report (due 2026-08-20) to test the guidance trajectory.

Footnote evidence & sources

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 revenue (1,333.5 MDKK)	1,334	Consolidated income statement, p.54; rolled forward with Q1 2026 IS p.9 📄 p.54	LTM = FY2025 revenue 1,279.2 − Q1 2025 308.1 + Q1 2026 362.4.
Adjusted EBIT (company definition, LTM 104.2 MDKK)	104	Definitions, p.82 ('Adjusted EBIT = Operating profit before non-recurring items'); FY figure in Key figures table 📄 p.82	mttssn adjusted EBIT is anchored on TCM's own 'Adjusted EBIT' (excludes non-recurring items only, keeps all intangible amortisation in opex) rather than 'Adjusted EBITA' (which adds back amortisation) — consistent with mttssn's PPA-amortisation rejection rule.
Non-recurring items, net (FY2025: +17.95 MDKK gain)	-18	Note 9, Non-recurring items, p.69 📄 p.69	Celebert 45%-stake fair-value step-up gain (DKK 20.3m, non-cash, non-taxable) net of DKK 2.3m acquisition transaction costs; removed from adjusted EBIT (sum_pretax -18.0) to normalize for the one-off M&A gain.
Intangible assets: goodwill 519.7 / brands 217.9 / customer contracts 34.4 (Q1 2026)	876	Q1 2026 consolidated balance sheet, p.11 (carrying amounts); FY2025 movement schedule in Note 12, p.70-72 📄 p.11	Goodwill/brand carrying amounts from three CGUs (TCM 2016 buyout, AUBO 2023, Celebert 2025); no impairment in FY2025/2024 per Note 12. Kept in invested capital as deployed capital (mttssn does not strip goodwill from IC).
PPA/intangible amortisation add-back TCM rejects (LTM 12.5 MDKK)	12.5	Definitions p.82 (Adjusted EBITA = Adjusted EBIT + amortisation); FY2025 amortisation detail Note 12 p.70-71 📄 p.82	Company's own 'Adjusted EBITA' adds back all intangible amortisation (mostly acquisition-related brands/customer-contracts). mttssn standing rule rejects this add-back — kept in opex, tracked in company_addbacks_we_reject.
Right-of-use assets 41.4 MDKK / total assets 1,407.6 MDKK (Q1 2026) = 2.9%	41.4	Q1 2026 consolidated balance sheet, p.11; FY2025 lease roll-forward Note 14, p.72-73 📄 p.11	Basis for lease_liabilities_in_ic = false: ROU assets are immaterial vs owned land & buildings (125.8 MDKK) — TCM's operating model is manufacturer/dealer-network, not company-store-led, unlike the retail-checklist default.
Cash-flow-hedge reserve (OCI), Q1 2026: -0.6 MDKK	-0.6	Change in consolidated shareholders' equity, p.13; FY2025 equivalent in Statement of changes in equity, p.57 📄 p.13	Only OCI component disclosed (no FX translation reserve found); immaterial at 0.1% of equity, stripped from equity_ex_oci per standard mttssn OCI convention.
Interest-bearing debt ex-lease, Q1 2026: mortgage 34.9 + bank 285.5 = 320.4 MDKK	320	Q1 2026 consolidated balance sheet, p.11-12 📄 p.11	Sum of current+non-current mortgage loans and bank loans, excluding lease liabilities (tracked separately given lease_liabilities_in_ic=false).
Celebert ApS acquisition — remaining 55% for DKK 80m cash, 25 Nov 2025	80	Note 26, Acquisition of entities, p.78-79 📄 p.78	Source for the non-recurring FV step-up gain and the DKK 107.7m goodwill / DKK 44m brand additions; also confirms no NCI retained (100% owned post-acquisition).
Customer concentration — two customers >10% of FY2025 revenue (DKK 195m, DKK 140m)	335	Note 4, Revenue and segment information, p.66 📄 p.66	Single reportable operating segment; customer concentration flagged qualitatively, no IC/NOPAT adjustment made.

Quality · Buffett tenets8 / 15

Understandable business●●○

Scandinavia's #3 kitchen/bathroom/storage manufacturer (Svane Koekkenet, Tvis Koekken, Nettoline, AUBO, private label), single reportable segment, sold via ~140 independent dealers/franchisees (220 points of sale, 111 branded stores) with in-house manufacturing at 4 Danish sites. Legible model, but the 2025 Celebert ApS roll-up (45%->100% for DKK80m) and 4 acquired retail stores reshape the operating mix, so the track record in its current form is short.

Durable moat●●○

[kostnads-skalfoerdel . stabil] Distribution reach (~140 dealers, 220 points of sale, 111 branded stores vs 110 a year ago) and in-house Danish manufacturing are the claimed cost-scale source. Direct test: gross margin -- the line the scale advantage should show up in -- widened to 23.3% in Q1 2026 from 21.1% Q1 2025 on internal efficiency projects, not just mix. ROIC-WACC spread has been positive in 6 of the last 8 years (75% persistence per mechanical scorer); frame: mid-cycle persistence, not the thin +0.52pp LTM print, which is a trough quarter not erosion. Falsifierare: raw-material/freight inflation (flagged by management late Q1 2026) reverses the gross-margin gain, or the independent-dealer network defects to a competing brand.

Management & capital allocation●●○

[allokering . candor] DKK4.50/share FY2025 dividend (~DKK46m, ~59% of net profit DKK77.8m), Celebert bolt-on self-funded in cash (DKK80m) with share count essentially flat (10.328m -> 10.332m). APM candor is clean -- our adjusted EBIT (104.2 LTM) matches TCM's own 'Adjusted EBIT' line to the decimal, 0.0% divergence. Roed flagga: management guides off 'Adjusted EBITA' (adds back DKK12.5m LTM of PPA/brand amortisation mttssn rejects) rather than the stricter line we anchor on, and TCM's own reported NIBD does not fully reconcile to the disclosed balance-sheet lines (~DKK40m unexplained gap) -- a transparency gap to watch, not a fraud flag.

Financial strength & returns●○○

Adjusted ROIC 8.52% barely clears the 8% WACC (EP +DKK5.0m, spread only +0.52pp) -- a marginal, not exceptional, value creator on this LTM base. LTM FCF DKK95.7m exceeds adjusted NOPAT DKK81.3m (Q1 cash conversion 106.1%), and leverage improved to 2.57x adj. EBITDA from 3.04x at FY2025-end -- balance sheet survives a bad year, but the return spread itself offers no cushion against a cost or demand shock.

Valuation margin of safety●○○

At DKK69.8 the reverse-DCF is already close to fair at zero perpetual growth (EV upside -0.02%) and only +1.6% at GDP-level 2.5% growth -- the market prices almost no growth, yet there is no meaningful discount either. Fairly valued, not a bargain: upside depends on delivering the FY2026 guidance step-up (EBITA DKK120-140m vs DKK110.2m LTM), not on a mispriced cushion already in the shares.