Inderes Group - Inderes 2024 was solid given the tough market - SEB

Ahead of Inderes’ Q4 report we have slightly cut our estimates based on Oct-Nov sales data. However, we do not extrapolate the miss of a couple of months of sales. We continue to see the IPO market becoming more active in 2025, offering market-driven growth for Inderes, which despite the challenging market we see heading for 7-8% growth in 2024. Our fair value range is cut a notch to EUR 20-22 (EUR 21-23).

Q4 expectations: modest growth, with Swedish sales down in November

Inderes’ Oct-Nov sales were some EUR 0.2m below our expectations, which has led us to cut Q4 estimates. The company attributed the November softness to the event business. However, while December (sales not disclosed yet) tends to be a quieter month in terms of events, we expect it to be up slightly y/y thanks to a 3-4% higher commissioned research base and continued increase in software business sales. November also saw sales decline in Sweden, which we take as a negative sign. Thus, for Q4, we will again focus on management comments about the status of its Swedish business expansion. All in all, we expect Q4 sales growth of just 2% y/y and EBITA margin of 4.5%, down from 5.4% in 2023.

IPO market to become more active, allowing market-driven growth in 2025E

We continue to believe that market headwinds are fading for Inderes in 2025. We expect the IPO market to become more active, resulting in a growing home (Finnish) market for the company. We note that a company newly listing is a better prospect for Inderes, as selling the whole offering is easier when a company has no existing processes or service providers in place yet.

Fair value range down a notch to EUR 20-22

Our fair value range suggests slight upside from the current share price. We continue to see further upside potential in the Swedish market. However, the business outside quarterly earnings calls remains small and we would require more evidence of Inderes’ ability to win new clients to price in the potential.