* Adj. EBITA -6% vs ABGSC, -5% vs ModFin consensus * Org. growth -1% vs ABGSC +1%; WC build-up weighed on FCF * Estimates to come off 1-3%; conference call at 11:00 CET Q3 results Vestum reported sales of SEK 889m (-4% vs ABGSC, -4% vs cons), and -30% y-o-y whereof -1% was organic (vs ABGSC +1%), -1% FX, and -28% from divestments. The adj. EBITA was SEK 98m (-6% vs ABGSC, -5% vs cons), and -33% y-o-y, for a margin of 11.0% (ABGSC 11.3%, cons 11.1%). The adj. EBITA was better than we expected in Flow Technology (+11%) but weaker in Niched Products and Solutions (-16-22%). The cash conversion was also softer, with FCF/EBITA of -2% (vs 31% in Q2) and management highlighted that increases in working capital, partly related to Niched Products and Solutions was a reason for this, which it expects will lead to higher sales volumes for the two segments ahead, however. The gearing was relatively unchanged, but increased somewhat to 2.8x, from 2.7x in Q2 on the negative FCF. We expect gearing to increase further, short-term, when the DFS acquisition is integrated in Q4. Outlook and estimate changes Management reiterated a favourable outlook for Flow Technology, which is currently facing difficult comps organically, but still grew EBITA 27% y-o-y supported by acquisitions. The new investment plan in the UK, AMP8, is still expected to have a positive impact, although the transition to the new program means somewhat cautious demand short-term, according to management. For the installation units in Solutions, management highlighted continued price pressure but a slight improvement in both volumes and pricing at the end of Q3. Final thoughts Overall, the report was slightly weaker than expected, although the most important segment, Flow Technology, was better than expected and should see accelerating momentum coming quarters. The newest acquisition, DFS, which was closed in October, will also further strengthen the segment's earnings growth in 2026. The share has traded down 15% in the last three months vs. OMXSGI which is +5% in the same period. It currently trades at 14-8x EV/EBITA on our unrevised '25-'27 estimates. Management will host a presentation of the report at 11:00 CET.
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