Qben Infra: Divesting Rail, building core business - ABG
* The strong focus on profitability continues
* '25e-'27e adj. EBITA down 5-1%
ABGSCe FVR of SEK 9-20 (7-21), trading at 7-4x '25e-'27e EBITA
ANNONS
Q2 highlights
Qben Infra reported Q2 sales of SEK 714m (inc. Rail, SEK 310m ex. Rail) vs. ABGSCe of SEK 794m. The LOI signed for the divestment of Rail is proceeding according to plan, and the business is now reported separately. Pro forma organic growth y-o-y for the remaining business was down SEK 140m due to the weak construction and telecom (effecting Power) markets. In Q3 Qben signed an agreement to acquire Jan Erik Hagelund AS, a Norwegian specialist concrete contractor. Jan Erik Hagelund AS had EBIT margins of ~7% in '24 and an EBIT multiple of 5x.
Adj. EBITA was SEK 28m (ex. Rail), corresponding to a 9% adj. EBITA margin, held back by Inspect due to some locations not performing. We expect Inspect to contribute positively from Q3'25. With org. growth in Q3-Q4 and improved margins, we expect adj. EBITA growth for Qben Infra in Q3-Q4, although from a low base. Cash flow was weak due to a seasonal working capital build-up and financing costs, yielding a pro forma gearing of 4.7x.
Outlook and estimate changes
We lower '25e-'27e adj. EBITA by 5-1% on Inspect taking longer than expected to turn around and the weak market for Power. Furthermore, we expect to see a 14% sales increase in '25 due to strong order intake, and we also anticipate that the announced M&A will boost sales as ININ Group and others merge into the figures.
Change in fair value range
We still believe that Qben Infra is well-placed to grow organically over time, further improving its margins, given its exposure to a growing market that we expect will receive significant investments. We slightly narrow our fair value range to SEK 9-20 per share (7-21). The share is trading at 7-4x '25e-'27e EBITA.
