* Adj. EBITA +16% y-o-y, 9% above Infront consensus
* Beat driven by strong margins, while organic growth remains muted
* Estimates to come up 3-4% on '26e-'27e; CC at 10:00 CET
Q1 results
Sales were SEK 3,014m (-2% vs ABGSC 3,087m and -1% vs cons 3,058m), -1% y-o-y whereof 0% organic (vs ABGSC 2%). Sweden was a tad better (1%) while other segments were below. Adj. EBITA was SEK 167m (7% vs ABGSC 156m and 9% vs cons 153m), +16% y-o-y due to positive effects of the reorganisation and higher volumes in Sweden for a group margin of 5.5% (4.7%) compared to ABGSC and consensus at 5.0%. Adj. EBITA was 7% better in Sweden and below in other segments. Lower central cost also contributed to the margin beat. Cash flow was solid, but with a lower conversion y-o-y: the r12m FCF/EBITA conversion declined to 47% (64% in Q4). Gearing continued to improve to 2.3x (2.6x in Q4).
Outlook and estimate changes
Management said activity in the market remains high, highlighting the public sector in Sweden and Denmark (Denmark has been highlighted as a weaker market earlier). That said, it expects organic growth to remain muted near-term due to churning contracts. We expect that the stronger than expected margins will drive 3-4% higher consensus EBITA for '26e-'27e with growth relatively unchanged (if anything a bit lower).
Final thoughts
The share is +13% YTD but has underperformed recently, -5% L1M vs OMXSGI +12%, which should warrant a positive reaction on the report. The share is trading at 11-10x EBITA on our unrevised '26e-'27e (8-10% lease adj. FCF yield). Management will host a conference call at 10:00 CET, use this link to participate.