Stille's Backorders Finally Turn Into Revenue — and a Tariff Rebate Steals the Headline

Q3 organic growth of 16.5% and a tripled operating cash flow are real; the reported EBIT jump is helped by a SEK 5.2m US tariff refund that management says is only ~60% collected.

STIL.ST · Earnings Call · 2026-10-23

The constraint moved from demand to supply — and then eased

For several quarters Stille's problem has not been finding surgeons who want its instruments; it has been getting the instruments to them. Q3 is the first quarter where that changed in the numbers rather than in the commentary. Revenue rose 22.9% to SEK 170.6m, organic growth was 16.5% (15.2% in constant currency), and rolling twelve-month sales crossed SEK 700m for the first time at SEK 711.4m. Surgical Instruments — two-thirds of the group — grew 27% to SEK 133.8m with 18.9% organic. The CEO framed it as an operating fix, not a demand surprise: “Within Surgical Instruments, more effective supply management and increased production, particularly at S&T in Switzerland, allowed us to shorten delivery times and reduce backorder levels.” — Ulrik Berthelsen, Group CEO · 2026-10-23 That matters because a supplier that cannot deliver loses the right to be promoted by distributors and reps; restoring delivery performance is a leading indicator for future order flow, and management is explicit that deliveries are not back to normal. “We expect a gradual decrease in backorder level, and the following Q3, we still remain with elevated backorder levels.” — Ulrik Berthelsen, Group CEO · 2026-10-23 The backorder level is expected to fall again in Q4. Here is the tension. Growth this quarter is a blend of genuinely new orders and the clearing of an old queue, and management will not quantify the split: “We have not disclosed our backorder levels simply because we don't think that this is a long-term situation where we should have.” — Ulrik Berthelsen, Group CEO · 2026-10-23 That is defensible housekeeping, but it leaves the investor unable to size how much of the 18.9% instrument growth is catch-up that cannot repeat. The honest read: the underlying demand is real, the reported rate is flattered, and Q4 organic growth should decelerate mechanically as the queue drains.

The tariff refund is the market's story, not Stille's

Non-recurring items swung from SEK -7.1m (Surgical Holdings deal costs) to a net SEK +4.0m, made up of SEK 5.2m of US tariff refunds less SEK 1.2m of restructuring. Reported EBIT went from SEK 10.2m to SEK 28.5m largely on that swing. Strip it out and EBIT before non-recurring items was SEK 24.5m, up 42%, at a 14.4% margin versus 12.5% — a genuine 1.9pp improvement, and 2.3pp excluding the Surgical Holdings consolidation. But note the direction of causality. Tariff refunds are the single hottest theme in this quarter's global keyword set — tariff refund sat at the very top of the whole-market table in 2026Q2, with net tariff refunds and IEEPA refunds cascading through the following quarters across names as varied as Deckers, Fiskars, SCA and Light. Stille is riding a wave here, not creating one, and the wave is administrative rather than commercial. The CFO was careful about the remaining balance: “It is a part of what we expect to see or expect to recover. I would guesstimate it at around 60% of what we would expect to see.” — Niklas Tyrén, Group CFO · 2026-10-23 The other ~40% is a Q4/Q1 timing question that depends on US processing, not on anything Stille controls — a small but real source of reported-earnings noise for a company this size.

Tables: extraordinary, and management says don't extrapolate

Surgical Tables is where the story gets interesting. After a record Q2, the segment still grew 9% to SEK 36.8m, and segment EBIT went from SEK 0.5m to SEK 4.1m — an 11.2% margin against 1.5% a year ago, 11.8% for the nine months versus 3.8%. Year-to-date table sales are up roughly 30%, driven by the imagiQ3 launch from late 2024 plus visible share gains and, importantly, end-market tailwinds the CEO was unusually specific about: US ambulatory surgery centres and office-based labs, and infrastructure programmes in Central and Eastern Europe. He also pre-empted the extrapolation trap: “When you look at the growth we've had in 2026, that has clearly been extraordinary... 30% next year might be a stretch.” — Ulrik Berthelsen, Group CEO · 2026-10-23 Capital equipment is lumpy; a strong replacement cycle does not compound. And when asked whether Tables might be divested — the segment is now 23% of year-to-date revenue, down from being the largest business five years ago — the answer was a flat no:

Tables is an important part of who we are, and it's an important part of the business... we are very pleased with the performance of this segment and see this as being an integral part of who the group is.
Ulrik Berthelsen, Group CEO · 2026-10-23

That closes off a speculative angle some investors had been circling, at least for now.

The margin question that refuses to die

Instruments EBIT margin fell to 15.3% from 16.0% despite 27% sales growth, and this is now a recurring interrogation point. The CFO's answer is consistent and, to be fair, non-evasive: the Surgical Holdings consolidation and adverse currency translation explain the gap, and excluding both the margin is essentially flat. He also pushed back on the framing itself — “This is a dear topic for most of our calls with the margin.” — Niklas Tyrén, Group CFO · 2026-10-23 The company's stated philosophy is that mix, channel and geography will swing the margin profile quarter to quarter, and that sales growth is the engine of bottom-line growth rather than margin optimisation. Investors who own this for the 25% group EBITDA target should note that Q3's 19.7% is still a long way from it. What is unambiguous is the balance sheet. Operating cash flow tripled to SEK 34m from SEK 10.2m, and was SEK 91.2m for the nine months against SEK 39.5m. Stille ended with SEK 170.7m of cash, a net cash position of SEK 60.6m, net debt/EBITDA of -0.4x and an equity/assets ratio of 69.2%. That is the currency for the acquisition agenda, and the geographic preference revealed in Q&A is a useful tell: more targets numerically in Western Europe at the historical 7-8x EBITDA, but “the U.S. market... is high on our radar and so is Western Europe.” — Ulrik Berthelsen, Group CEO · 2026-10-23

What to watch into Q4

Three things. First, whether commercial execution can hold organic growth in double digits as backorder fill fades — the +10% long-term target now requires pure share gains rather than queue-clearing. Second, the residual tariff recovery, which is a reported-profit event with no operating content and could reverse the optics of this quarter's strong print. Third, the tables comp: lapping 30% growth in 2027 is the single most likely source of disappointment, and management has already told you so. Nothing here is broken; the question is simply whether Q3's headline growth, once you separate the queue from the orders and the refund from the margin, is as good as it looks. Mostly it is — but 'mostly' is doing real work in that sentence.