Inderes Group - Sweden shows improving activity - SEB

Inderes’s Q4 report was well in line with our forecast and we highlight the improved activity in the Swedish market. However, we have lowered our profit estimates somewhat as the internationalisation requires further investment in opex. We believe the investments, if rightly executed, to be necessary as gaining momentum internationally is the key catalyst for the case. We have trimmed our fair value range to EUR 18-20 (EUR 19-21).

Q4 outcome: in line report on second read

After a more thorough read of the Q4 report, we find the small beat in EBITA was due to other operating income, i.e. an item we do not extrapolate. The EBITA guidance was cautious compared with our pre-Q4 and we end up taking down margin estimates while our sales forecasts remain broadly unchanged. The higher costs arise from continued investments in internationalisation, which ultimately is the key case driver given Inderes has virtually covered the Finnish markets with most of its services. Operationally, we find the key positive of the Q4 report was the improved momentum in the Swedish event business.

Projecting mid to high single digit growth

We estimate 6% sales CAGR for 2026-28. We think the market with improved IPO activity should be more benign. We also think software is set to remain a key growth driver with a potential boost coming from cooperation with Euronext in the medium term. Lastly, the improved momentum in the Swedish event business (apparently new CMD customers) hints that Inderes’s determined work should gradually bear fruit. We see every new client relationship in Sweden as crucial as cross-selling is always easier than finding a totally new client.

Fair value range a notch down to EUR 18-20

The small decline in fair value range is due to lower profit estimates. Inderes now trades at 10x EBITDA. Given the capital light business model, safe position in Finland and overall growth profile, we justify a touch higher valuation multiple.