Prevas: Cost-cutting focus ahead - ABG
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Prevas: Cost-cutting focus ahead - ABG

Q2 results
Prevas reported a weaker-than-expected Q2'25, with sales of SEK 409m, up 3% y-o-y (4% below ABGSCe). Organic sales declined 9% y-o-y, driven by a drop in FTEs (a net reduction of 20 employees), lower utilisation, and a negative calendar effect of ~2%. M&A contributed 12% y-o-y growth, with Finland delivering an EBITA of SEK 1m (SEK 0m in Q1'25), reflecting continued improvement following the merger of two regions and a clearer sales focus. Core segments such as energy grew sales by 41% y-o-y, followed by engineering at 21% and defence at 20%. EBITA came in at SEK 20m, with a margin of 5%, but weighed down by restructuring costs of ~SEK 6m. Excluding these and other one-offs, the underlying adj. EBITA margin came in at 7%.

Estimate changes
We cut our sales estimates by 2-1% for '25e-'27e, reflecting continued weak demand. We also lower adj. EBITA by 6-0% for the same period, as we expect net recruitment to remain negative and utilisation to stay soft through '25e, with a gradual recovery expected in '26e. Prevas continues to take active steps to improve margins through personnel optimisation, cost focus, and leadership changes in underperforming regions. Despite near-term margin pressure, we maintain a positive view of the business given its strategic positioning and long-term potential.

Valuation
Based on our revised estimates, Prevas is trading at ~9x '26e EV/EBITA. This is below Nordic peers at ~11x '26e EV/EBITA. We continue to see Prevas as well positioned for '26e-'27e, supported by a strong balance sheet and exposure to growing segments such as defence, energy, and engineering.
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