Solwer: Q2 results weak; amendment to covenant received - Nordea

Solwers' Q2 results remained weak, with profitability still at an unsatisfactory level. Net sales of EUR 20.8m came in 12% below our estimate and were down 5% y/y, while adjusted EBITA of EUR 0.1m was 86% below our estimate of EUR 0.7m (versus EUR 0.7m a year ago). The company also highlighted that it has agreed with its principal bank on a temporary amendment concerning the net debt/EBITDA covenant, effective until the end of June 2027. Solwers needs to improve its profitability clearly; the main concern is profitability, not the level of debt, we argue. Solwers has not given financial guidance for 2026; we expect adjusted EBITA to remain flat y/y at EUR 1.1m. Following the Q2 report, we cut our top-line estimates by 4-5% for 2026-28, and we cut adjusted EBITA by 64% for 2026E and by 7-21% for 2027E-28E. We derive a clearly lower DCF- and peer-based fair value range of EUR 1.7-2.0 (2.6-3.0), including EUR 0.2 (0.4) per share for the present value of unannounced acquisitions.