Byggmästaren Q1'26: A widening discount, a wider opportunity

Byggmästaren's Q1 report showed a slight increase in NAV per share to SEK 67.6 (2% q/q), driven primarily by a substantial upward revaluation of DP Patterning (“DPP”) following its very strong Q1 print, which more than offset continued share price pressure in Green Landscaping. Total shareholder return (TSR) was -14% (SIXRX: -1%), resulting in a widening P/NAV discount to 22% (Q4'25: 8% / 5Y avg. 9%). We consider the NAV development resilient given the volatile market conditions, with the company maintaining 465 MSEK in available liquidity*, providing significant dry powder for new investments. Following the report and core holdings' Q1 performance, we have slightly trimmed our fair value range to SEK 52-76 per share (was SEK 54-77), where we have balanced a meaningful uplift in our DPP valuation against a more cautious near-term margin outlook for Green. We continue to view the current P/NAV discount as excessive, creating an attractive risk-adjusted upside in the share. We upgrade our recommendation to Buy (was Accumulate) following the further widened discount, while trimming our target price to SEK 65 (was SEK 66).

DPP revaluation lifts NAV, but TSR lags the market

Total NAV stood at 1,961 MSEK at the end of Q1, corresponding to a +2% increase (q/q) and SEK 67.6 per share (Inderes est: SEK 65). The increase was driven entirely by a substantial upward revaluation of DPP (+57%, q/q), reflecting the company's strong operational momentum during the quarter. The rest of the unlisted portfolio saw broadly stable valuation adjustments, while listed assets declined a net -5 MSEK as Green's continued share price pressure was partially offset by gains in Infrea. We feel the -14% TSR underperformance versus the +2% NAV increase reflects a mix of heightened market volatility, the portfolio’s ~60% allocation to unlisted assets, and low liquidity in the shares.

Strong liquidity provides flexibility

During Q1, Byggmästaren completed the previously announced Ge-Te Media divestment, built on its conviction in Green Landscaping with an additional 12 MSEK investment, acquired the remaining minority stake in Fasticon, and executed share buybacks of ~2 MSEK. The company ended Q1 with 465 MSEK in available liquidity, providing material flexibility as it continues to look for a fourth core holding alongside Safe Life, DPP, and Green. While we believe this "option value" is valuable in the current uncertain market, we also acknowledge that a high cash position has historically diluted Byggmästaren's portfolio returns. That said, we expect the company to remain disciplined in its capital allocation.

Mixed performance from core holdings in Q1

Byggmästaren’s core holdings showed quite mixed Q1 results. On the one hand, DPP delivered a sharp upside surprise, with revenue and profitability materially above our forecast. On the other hand, while Green returned to organic growth, it missed on profitability due to continued weakness in Norway, resulting in a 24% decline post-report. We view this as an overreaction given Green's already depressed valuation following the -35% drop during 2025, particularly as Sweden continues to progress in the right direction. That said, the report raises questions around the timing of Norway's turnaround. Safe Life came in modestly below our estimates on both revenue and margin, reflecting slower US progression and ongoing platform investments. On a net basis, our estimate revisions post-Q1 resulted in an upward revaluation of DPP, which was offset by reductions in Green and Safe Life, resulting in a broadly unchanged derived NAV.

Fair value range of SEK 52-76 per share

We value Byggmästaren through a sum-of-the-parts (SOTP) analysis, which indicates a fair value range of SEK 52-76 per share. Given its track record, active ownership model, net cash position, and portfolio concentration, we believe a reasonable P/NAV is in the range of -10% to -3% (vs 3-5Y avg. -14% & -9%), with -5% at our midpoint scenario. In our valuation, we believe we have been relatively conservative in our assessment of the portfolio holdings. Overall, we feel Byggmästaren's current share price and implied P/NAV discount create an attractive risk/reward.