Flora - Spreading It Thinly - Q3 26 · Model Update

Flora’s Q3 results highlight the tension in the credit, with management continuing to protect margins at the expense of volumes while leverage remains stubbornly high. The change in guidance did not come as a surprise, and we remain comfortable with our existing model. However, the results raise other questions, which we have explored in our recent analysis. We work out the upside and downside for both instruments and conclude which one the market is misplacing.