Relais: In line Q1 - M&A activity to remain high - Nordea

Relais reported Q1 adjusted EBITA of EUR 9.2m was down 5% y/y, in line with LSEG Data & Analytics consensus. Organic sales growth was -4% y/y in Q1, burdened by mild winter in the Nordics (we anticipated 1% growth). Net sales were EUR 82.8m (flat y/y), 1% below consensus expectations. Gross margin came 350bp above consensus expectations and was up 350bp y/y to 49.6%, supported by sales mix. Operating cash flow declined slightly owing to mild winter impact on net werking capital and was EUR 2.7m (EUR 4.6m a year ago) taking leverage to 2.9x (2.7x at the end of Q4). Relais does not give short-term outlook for 2025 but notes that it aims to continue active on M&A following two acquisitions during April. We continue to view EUR 50m adjusted EBITA pro forma target for 2025 as de-risked following the acquisitions of Matro and Team Verkstad. On initial take, we expect consensus to make only minor underlying estimate revisions while fully incorporate latest acquisition.