Vestum: Overall stable, but softer activity in Infra - ABG

Q2 report due 15 August
'24e-'26e EBITA down 5-1%; 9% CAGR '23-'26e
10-6x EBITA '24e-'26e, 11-15% FCF yields


Q2 expectations

We believe that the positive business momentum has continued for Water in Q2 with 6% organic growth, while we expect Services to deliver negative but improving growth versus Q1 (-13% vs. -17%), potentially marking a bottom for the installation business, and Infrastructure to see a continued slowdown in activity, resulting in negative organic growth (-2%), following the development we have seen in Infrastructure peers like Nordisk Bergteknik in recent quarters. All in all, we expect Vestum to deliver sales of SEK 1,513m and organic growth of -5% in Q2 (-3% in Q1). In terms of profitability, we expect stable margins in Water and Services of 22% and 9%, respectively, but a smaller improvement than previously expected for Infrastructure following the divestments (10% versus 8% Q2'23). We forecast a group adj. EBITA of SEK 160m for a margin of 10.6% (9.4%).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/vestum/Equity-research/2024/6/vestum---overall-stable-but-softer-activity-in-infra/