Tempest Security: Guarding gains ground - ABG
This is a third party research report and does not necessarily reflect our views or values
* Q4: +27% sales growth, 1.5% EBITDA margin
* '26e-'27e EBITDA up 2-3%
* Continues to show improvements
2025 was an important year
Tempest continues to deliver improvements, with Q4 sales 12% above ABGSCe but EBITDA SEK 1.2m below. Guarding grew sales by 35% and EBITDA from SEK 1m to SEK 8m. A solid improvement, where the contracts signed in late 2024 are starting to show in the numbers. It is still far from historical levels, and we think more can be done on efficiency. Risk Solutions declined SEK 1m on top line but improved its EBITDA from loss-making in Q4'24 to SEK 2m profit in Q4'25, with solid results in the UK and profitable results in Denmark. Looking ahead, management pointed to good demand with the need for reliable deliveries, flexibility and long-term thinking rather than short-term needs, and that price is not always the decisive factor. Pricing has been a factor in the security space, and we think that Tempest, with help from the shifting focus in the market, can raise its margins by having price discipline and being selective on bidding.
'26e sales up 8% and EBITDA up 2%
We raise '26e sales by 8% on the good performance and momentum in Guarding. We expect the performance to continue as Tempest maintains its core business focus and continues its efficiency improvements, while Denmark and the UK are delivering better results. Q4 is a seasonally weaker quarter, but we expect the progress to continue.
Focus on core operations
We believe the company has taken important steps throughout the year, with the divestment of the US and the turnaround in Denmark. There are further efficiencies to be gained from the newly signed contracts in Guarding, as profitability typically increases gradually after the initial start-up period. This is because the additional costs associated with extra hiring decrease, planning and efficiency improve and Tempest can sell additional services that improve profitability.
* '26e-'27e EBITDA up 2-3%
* Continues to show improvements
2025 was an important year
Tempest continues to deliver improvements, with Q4 sales 12% above ABGSCe but EBITDA SEK 1.2m below. Guarding grew sales by 35% and EBITDA from SEK 1m to SEK 8m. A solid improvement, where the contracts signed in late 2024 are starting to show in the numbers. It is still far from historical levels, and we think more can be done on efficiency. Risk Solutions declined SEK 1m on top line but improved its EBITDA from loss-making in Q4'24 to SEK 2m profit in Q4'25, with solid results in the UK and profitable results in Denmark. Looking ahead, management pointed to good demand with the need for reliable deliveries, flexibility and long-term thinking rather than short-term needs, and that price is not always the decisive factor. Pricing has been a factor in the security space, and we think that Tempest, with help from the shifting focus in the market, can raise its margins by having price discipline and being selective on bidding.
'26e sales up 8% and EBITDA up 2%
We raise '26e sales by 8% on the good performance and momentum in Guarding. We expect the performance to continue as Tempest maintains its core business focus and continues its efficiency improvements, while Denmark and the UK are delivering better results. Q4 is a seasonally weaker quarter, but we expect the progress to continue.
Focus on core operations
We believe the company has taken important steps throughout the year, with the divestment of the US and the turnaround in Denmark. There are further efficiencies to be gained from the newly signed contracts in Guarding, as profitability typically increases gradually after the initial start-up period. This is because the additional costs associated with extra hiring decrease, planning and efficiency improve and Tempest can sell additional services that improve profitability.