Topic: Cantourage released Q2'26 figures showing a further step-up in earnings quality. Sales declined yoy on a deliberate exit from low-margin German volumes, while EBITDA grew 45% yoy.
Q2 sales came in at € 21.8m, down 21.9% yoy but up 5.8% qoq (Q1'26: € 20.6m), marking the second consecutive quarter of sequential growth. Importantly, the yoy optic reflects the last hard comparable of the cycle: Q2'25 (€ 27.9m) was the peak quarter of the German volume boom, before the price war in the standard flower segment set in. With Q3'25 and Q4'25 at c. € 19.9m and € 18.6m respectively, group sales should return to yoy growth from Q3'26e onwards (eNuW).
Geographic rebalancing. Germany contributed € 10.1m (-56% yoy), or 46% of group sales, versus 84% in Q2'25, as management has largely discontinued low-margin strains (oversupply + significant market price reductions). Importantly, Q2 should mark the floor, with management pointing towards sequential growth as premium supply expands. Mind you, the ramp is supply- rather than demand-constrained: premium volumes require biomass that takes time to scale, while new form factors (edibles, extracts) await import permits currently taking 7-8 weeks instead of the statutory 10-14 working days, pushing first batches into Q4.
The UK grew 146% yoy to € 9.6m (ramp up of its clinic) and is now effectively at parity with the home market, while Poland tripled to € 2.1m. For the first time, the majority of group revenue was generated outside Germany, an important de-risking event in the equity story: the German price cycle and the still unresolved domestic regulatory debate are no longer the dominant swing factor for group earnings. Management has flagged France, Spain and Italy as potential next entries over the medium term.
gramz. is an early validation of the own-brand strategy. The house brand launched in Q2 generated some € 0.5m sales in its first partial quarter with initial batches selling out. While immaterial in absolute terms, it underpins that Cantourage is able to successfully distribute own rather than only third-party products.
All eyes on profitability. The gross margin expanded by 7.9pp yoy to 36.4%, the clearest evidence that the strategy shift (focus on premium flowers) is working out well. Q2 EBITDA rose 45% yoy to € 2.9m, a 13.1% margin (+6.1pp yoy, +2.5pp qoq). With this, H1'26 EBITDA thus stands at € 5.1m (12.0% margin), already well ahead of our old 9.8% FY26e.
Two short-term catalysts ahead. Management is expected to release a FY26 guidance which should be carried by a high FY EBITDA margin, in our view. Mind you, FY25p margin stood at 6.1%. Cantourage should also release the final consolidated FY25 report early September, decreasing risk discounts that are likely baked into the current share price.
At 6.2x FY26e and 4.8x FY27e EV/EBITDA, the valuation of Cantourage remains attractive. For reference, Organigram acquired Sanity Group at c. 4.2x EV/sales for a wholesale-only, barely profitable asset, against c. 0.7x for Cantourage with a double-digit and rising EBITDA margin. We confirm our BUY rating with a slightly raised € 10.50 PT (old: € 10.00) based on DCF.
ISIN: DE000A3DSV01
