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Third party research

Prevas: Costs came down, margins came around - ABG

Prevas

This is a third party research report and does not necessarily reflect our views or values

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* Margin improvement in Q3* We raise '26e-'27e adj. EBITA by 4-3%* Trading ~30% below current peers on '26e-'27e EV/EBITACost-cutting starting to take effectPrevas' Q3 report was better than we expected, with a 1% sales beat of SEK 355m (351m vs. ABGSCe) and a 29% adj. EBITA beat of SEK 30m (23m vs. ABGSCe), mainly driven by strong Finland sales and cost-cutting from previous quarters starting to take effect. The adj. EBITA margin came in at 8% (7% in Q3'24), supported by workforce optimisation and cost control. Finland posted strong results of SEK 50m in sales, reflecting 36% y-o-y growth and contributing positively to group margins. Prevas' strongest segments continued to perform well, with defence growing by 33% y-o-y in terms of sales growth, followed by energy of 13%.We raise adj. EBITA estimates by 4-3% for '26e-'27eWe raise our adj. EBITA estimates by 4-3% for '26e-'27e, driven by improved sales execution, ongoing cost control, and staffing adjustments that should enhance efficiency. While we remain cautious on Denmark, where sales declined 9% y-o-y (mainly due to Novo Nordisk cutting costs), we note that segments such as export-related industry (excluding automotive, e.g. Volvo Cars) are performing well. Additionally, life science is showing early signs of recovery.Trading ~30% below its peersOn our revised estimates, Prevas is trading at 8-6x EV/EBITA for '26e-'27e, which is ~30% below its peers' median. Market demand seems to be cautious but stable, and we continue to expect gradual market stabilisation in H1'26e. We maintain our positive view on Prevas, given its solid positioning in high-growth segments and potential for further margin expansion as market conditions normalise.
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