Partnera extensive report: Investment company turned construction product company

Translation: Original published in Finnish on 5/27/2025 at 9:25 am EEST.

Foamit Group, a foam glass production company, has become central to the strategy of the investment company Partnera. Foamit Group is currently undergoing significant growth investments in its production facilities, and its strategy also includes acquisitions and geographical expansion. In our view, the expected return based on earnings growth in the coming years will be at the level of our required return, which has been raised by large investments. Therefore, we reiterate our target price of EUR 0.85 and downgrade our recommendation to Reduce.

Partnera is an investment company in transition

After the unsuccessful KPA Unicon investment, Partnera's strategy was renewed in 2024. The new strategy aims to develop the Foamit Group foam glass company through investments and acquisitions, while the intention is to divest other holdings. Following the divestments that have already taken place, Foamit Group is Partnera's only majority holding and the company's balance sheet position is very strong. Foamit Group has been formed as a result of acquisitions, and it consists of Uusioaines Oy (Finland), Hasopor AB (Sweden) and Glasopor AS (Norway). The Group is the leading and only manufacturer of foam glass in the Nordic countries, and it also owns Finland's only glass recycling plant. In recent years, development has been strong especially in Sweden, supported by large infrastructure construction projects, while development has been weak especially in Norway. Foam glass is a construction material made from glass powder from glass recycling, and it is particularly suitable for construction needs that require lightness, insulation and moisture control. The main applications have been in frost insulation and lightweight fill in large road and railway projects. Foamit Group mainly competes against alternative construction materials, and in our opinion, foam glass is seen as a more ecological and higher-performance, albeit premium-priced, product compared to alternative construction materials.

Foamit Group’s strategy is growth-oriented

Partnera aims to increase Foamit Group's revenue to 100 MEUR by 2028, which corresponds to more than doubling the revenue from the 2024 level. Achieving the target requires expansion into new markets through acquisitions. Supported by ongoing significant organic investments, we expect revenue to grow by 7% to 44 MEUR this year and by 12% to 50 MEUR next year. The nascent growth outlook for infrastructure construction in the Nordic countries in the coming years, as well as the low market share of foam glass, enable revenue growth. In terms of profitability, Foamit Group is targeting a 20% EBITDA margin, while in recent years the company has reached an average of just over 15%. Especially by improving the efficiency of the Norwegian production unit, we see room for improvement in the current profitability level, and our EBITDA forecasts for Foamit Group for the next few years are in the range of 16-17.5%. Tesi (Finnish Industry Investment Ltd) is a significant minority owner in Foamit Group, meaning that one-third of Foamit Group's earnings belong to minority owners.

Valuation in neutral zone

We value Partnera based on a sum-of-the-parts calculation. The value of the share capital is currently concentrated in the holding in Foamit Group (EUR 0.55 per share) and Partnera's net cash position (EUR 0.58 per share). The sum-of-the-parts value is EUR 1.1 per share. In our view, the significant discount relative to the sum-of-the-parts value is justified, considering the delay in value unlocking and the risk factors associated with investments. In our view, Foamit Group's earnings growth rate in the coming years will be the primary driver of the share's returns. We require more concrete signs of earnings growth before relying on a valuation closer to the sum-of-parts value.