Inderes Group - The market is turning, but Sweden takes time - SEB

Ahead of Inderes’s Q1 report, we make no changes to our estimates. We think that strategy execution is progressing well in Finland, which should also see some market tailwinds in 2025. However, for the Swedish business, which holds the largest upside potential in our investment case, progress is slow (or in fact declining). Our fair value range is unchanged at EUR 19-21, with the mid-point translating into a 2027E adj. P/E of 10x.

Q1E: Jan-Feb sales were in line, timing of AGMs impacting Mar-Apr

Inderes’s January-February sales data were broadly in line with our estimate, and we keep our estimates unchanged ahead of the Q1 report. We estimate March sales decline slightly from the previous year, as we expect AGMs to be more tilted to Q2 than last year. Overall, we forecast growth of just 1% for Q1/25 with an acceleration in Q2 driven by IR software and a modest increase in Finnish AGM market share. After a drop in commissioned research coverage in Q4, we expect the company to return to modest growth again and even see risks to the upside given signs of a thawing IPO market.

Finnish operations performing well, Sweden lagging

With the first IPO processes started in Finland too, we think Inderes’s market could grow in 2025. Newly listed companies are valuable prospects for Inderes, as it can offer the whole spectrum of services for clients that do not already have vendors and processes in place. Also, we see some market penetration potential within IR software in the Finnish market while the other business lines are close to their full potential. However, the Swedish business, which in our view should offer the best catalyst for the investment case, seems to remain at standstill. In January-February, sales in Sweden followed the decline seen in Q4.

Fair value range unchanged at EUR 19-21

Inderes trades somewhat below our DCF outcome. However, compared with peers, its valuation is a bit elevated, lowering somewhat our blended fair value range.