Kardex (AO) | Buy | Remstar weakness drives profit warning, but dynamics rebound in H2

Research evidence excerpt

Kardex (AO) | Buy | Remstar weakness drives profit warning, but dynamics rebound in H2

erse mix and growth investments trigger a profit warning

The delta to expectations relates exclusively to the Automated Products division (Remstar). Remstar had a sluggish H2 2025 and

started FY 2026 with a low backlog. Order intake was apparently also weak in Q1, disappointing expectations for a US market

rebound.

There is a second top-line and gross margin-related issue within the Automated Products division: mix within Remstar has been

adverse (more systems vs single machines), which weighed on segment revenues and eroded margins. Within the portfolio,

Remstar is still the main activity and the highest margin franchise.

At the same time, the company is and remains committed to substantial growth investments in marketing, sales, and IT spanning

at least two years. Management has no intention of scaling these back despite the margin impact of a soft quarter. Kardex views

the long-term market opportunity as too significant to compromise on growth positioning and has therefore taken no cost

measures.

These elevated investments, combined with the adverse product mix, produced very low margins in Q1 that cannot be recovered

across the full year (Kardex has semi-annual reporting). Group EBIT margin fell below the 10–14% target range (plan was ~12%),

triggering the profit warning.

The elevated cost base required to fund growth investments, combined with temporarily depressed volumes at Automated

Products, will compress H1 2026 EBIT to roughly 60% of H1 2025 levels.

Even with a materially stronger and more profitable H2 2026 that hits the target range, this H1 collapse prevents the company

from achieving its full-year EBIT margin target of 10–14%.