Cost reduction initiatives in DE and NL short-term Focus on margin improvement journey and selective M&A Adj. EBITA -5-9% in '25e-'27e, trades at 8.2x '25e EV/EBITA
ANNONS
Q1 beat but a bit weaker under the hood
Despite the 8% EBITA beat vs ABGSCe in Q1, we conclude that it was driven by a strong development in the segment Nordics & Baltics (growing 21% organically and expanding the EBITA margin from 10.9% to 11.2% y-o-y), while all other segments declined by -9-19% organically and delivered lower margins y-o-y. Increased customer churn in the German market from aggressive price competition in the market will be addressed by upcoming cost reductions. We therefore expect some non-recurring costs (SEK 5m) in Q2 and growth rates to remain muted for some quarters, while margins should start to recover later during 2025e. We are careful to extrapolate the strong Q1 in Nordics & Baltics due to the quarterly volatility nature of the business. However, on a group level, we continue to see Proact as a relatively stable performer.
