* EBITA margins in line with expectations * Cost focus likely to drive margin uplift in H2 * Trading at 9-6x EV/EBITA on '26e-'27e, 20% below peers
Right steps in a cautious market
Prevas delivered a stable quarter given the market headwinds the consulting companies are facing. Sales came in at SEK 426m, in line with our expectations, although organic growth remained negative for the 7th consecutive quarter. Defence continues to be the clear standout, with sales up 22% y-o-y in the quarter, and Finland is also showing growth despite cautious customer behaviour and some delayed projects. The EBITA margin landed at 8.4%, which we think is encouraging and a sign that the cost focus initiated last year is starting to show benefits. Worth noting is that this quarter had restructuring costs related to 1) a weak market in Denmark and 2) the restructuring of the business units in southern Sweden; we think Q2 will have some one-offs as well.
Margin uplift on the horizon
We leave estimates relatively unchanged and expect the company to reach EBITA margins of 9% in '26e (7% '25) with EPS growth of ~40%. Importantly, Prevas also signed an EAM contract together with Hexagon (Octave) worth SEK 80m over 12 years, with material effects from Q2e and adding ~SEK 5m to '26e sales.
Trading a 9-6x EV/EBITA, ~20% below peers
The market remains cautious, but management is taking the right actions on costs, and we expect the full margin uplift to materialise in H2'26. With defence as a strong growth engine, a healthy balance sheet supporting potential M&A, and structural improvements working their way through, we continue to view Prevas as a quality consulting firm. The stock is trading at 9-6x EV/EBITA on '26e-'27e, roughly 20% below peers.