* Demand stabilising, but reduction in FTEs a headwind
* We cut adj. EBITA by 6% for '26e and 10% for '27e
* Trading at historical lows, 40% below Nordic peers
Stabilising, but no recovery yet
The market remains weak but is stabilising, and the latest data from the National Institute of Economic Research show improving demand for technical consultants. However, the lower number of FTEs means fewer billable hours, and we therefore expect an organic decline of 1.7%. Growth should be supported by continued strong demand in defence and some pick-up in the life science market in Denmark following years of slow market growth. With fewer FTEs, we expect utilisation to increase as demand picks up, which should in theory lift margins. However, Nordic salaries typically increase by 3-4% per year, and with price increases at a similar level, the net effect is flat to slightly positive. We expect an adj. EBITA margin of 8.4% (8.4% Q3'25), as Finland continues to weigh on margins (layoffs at a large customer), and we expect Finland to remain soft in Q3'26e.
Heading towards a stronger '27e
We lower our estimates on the back of the soft data. For ‘27e, we expect sales growth of 5% y-o-y and an adj. EBITA margin of 9.7% (7.9% ‘26e), as we expect next year to be a much stronger year for Prevas.
Trading at historical lows
Prevas is trading at historical lows, at 6-4x ‘27e-‘28e EV/adj. EBITA, ~30% below its historical multiple. Over the past five years, peers have averaged sales growth of ~10% and margins of 8%, compared with 17% and 10% for Prevas. Yet Prevas trades ~40% below the peer average. Recent years have been challenging for consulting firms, with lower demand and price pressure affecting margins and forcing layoffs. This has in turn hurt organic growth, which has been negative for eight consecutive quarters. As utilisation improves and the cost savings come through, we see Prevas well positioned for a stronger ‘27e.