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Sentia (SNTIA.OL)
Industrials · Nordic construction contractor · LTM Q1 2026
Analysis date: 2026-06-08
Price at analysis: NOK 76.90
Method: mttssn_streamlined_v1
Conviction: MEDIUM
HOLD
Conviction: MEDIUM
A capital-light Nordic construction contractor (HENT Norway + Sentia Sweden, IPO'd from Ratos June 2025) whose clients prepay, giving structurally negative working capital and a net-cash fortress. Invested capital is negative, so ROIC is n/a — value is on EV/EBIT ~5.7x and ROACE ~34%. Cheap with a strong balance sheet and improving orders, but thin ~5% margins + customer concentration. HOLD, medium conviction.
Adj. ROIC
undefined
Net cash + negative WC → IC≈0; value on earnings
Economic Profit
n/a
n/a — negative invested capital
FCF Yield
12.8%
~13% FCF yield; ~7% dividend yield
Price / Target
NOK 77 → NOK 85
+11% base; HOLD
Revenue (LTM)
NOK 12.1B
LTM; Q1 +12.7% YoY
EBIT Margin
5.1%
~5% EBIT margin (contractor)
EV / IC
n/a
Enterprise value / invested capital
Net Debt
n/a
Net cash ~NOK 4.2bn (> equity)
Thesis

Sentia is a Nordic general contractor — HENT (Norway, ~80% of revenue: schools, offices, healthcare) + Sentia Sweden — spun out of Ratos and listed on Euronext Oslo Børs in June 2025. The moat is relationship-driven early-phase project access (collaborative/target-price contracts, ~70% public-sector backlog of NOK 18.3bn ≈ 1.5x revenue) plus Norwegian scale via HENT.

The economic engine is negative working capital: clients fund operations, so the business needs near-zero net capital and the equity sits in cash. Invested capital is therefore negative (net cash ~NOK 4.2bn > equity NOK 1.8bn), so ROIC and economic profit are not meaningful — we mark them n/a and value the business on ROACE ~34%, EV/EBIT ~5.7x and the cash return. Capital allocation is aggressive return-of-cash (96% payout, minority buyout).

Valuation · reverse-DCF & scenarios

With negative invested capital the reverse-DCF is uninformative; value rests on EV/EBIT ~5.7x, NOPAT/EV ~13.8%, a ~7.2% dividend yield, and the net-cash balance sheet.

Base NOK 85 on a stable-to-improving Nordic construction cycle and the cash return; bull NOK 105 if order intake and margins firm; bear NOK 60 on a construction downturn or a fixed-price project loss.

Reverse-DCF panel unavailable: non-positive ic.

Scenario24m targetUpsideProb.Driver
BullNOK 105+37%30%Order intake and margins firm
BaseNOK 85+11%45%Stable Nordic construction cycle + cash return
BearNOK 60-22%25%Construction downturn or fixed-price project loss
Prob-weightedNOK 85+10%100%Scenario-weighted expected value
Key drivers

1. Negative-working-capital model

Clients prepay → near-zero net capital, net cash ~NOK 4.2bn, ROACE ~34%.

2. Cheap + high yield

EV/EBIT ~5.7x, ~13% FCF yield, ~7% dividend yield — value + income.

3. Improving order intake

HENT won Equinor Forus East + Tinden; SSEA won Stockholm University of the Arts.

4. Public-sector backlog

~70% public backlog of NOK 18.3bn (~1.5x revenue) — visibility.

Key risks
Conclusion

Sentia is a cheap, cash-rich, capital-light Nordic contractor whose prepaid model gives a fortress balance sheet and high ROACE, but with thin margins and customer concentration. Value is on EV/EBIT and the cash return (ROIC is n/a on negative IC). HOLD, medium conviction; base NOK 85.

Constructive on sustained order/margin improvement; the net-cash balance sheet and high payout underpin the downside.

Footnote evidence & sources

Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open  ·  Latest interim: 📄 open

Adjustment / figureValueSourceWhy mttssn treats it this way
Revenue (operating income, FY2025)11,772Income statement / Note 4-5 📄 p.112Consolidated income statement line 'Operating income' 11,772 (2024: 10,531). 'Total income' incl. other income is 11,798. LTM revenue 12,131 derived as FY 11,772 - Q1'25 2,836 + Q1'26 3,195.
EBIT / Operating profit (FY2025)576Income statement 📄 p.112Consolidated 'Operating profit' 576 (2024: 566). Cross-checked in segment note p120 (HENT 550 + Sweden 97 + Other -71) and APM p160. LTM EBIT 617 = 576 - 103 + 144, matching the company's own four-quarter LTM EBIT of 617 (Q1 APM p22).
EBIT LTM Q1 2026 (company-disclosed cross-check)617APM — ROACE reconciliation 📄 p.22Company states 'Operating profit (EBIT) over the last four quarters 617' — exact match to our independently built LTM EBIT, validating the LTM bridge.
Goodwill (carrying, FY2025)1,131Note 12 Goodwill and intangible assets 📄 p.129Goodwill HENT 870 + Sweden 261 = 1,131 carrying value, unchanged YoY, no impairment. Total intangibles incl. 22 other intangibles = 1,153 (matches BS p113). Only NOK 5m ordinary intangible amortization for the year (not PPA).
One-off / items affecting comparability0APM reconciliation + Income statement 📄 p.160Neither the income statement nor the APM reconciliation discloses any adjusted EBIT or items affecting comparability — operating profit is the single figure. IPO costs were taken to equity (share premium), not P&L; only +6m IPO-related audit fees in opex (Note 8, immaterial). No restructuring, no impairment. Hence zero NOPAT normalization.
Cash and cash equivalents (31.03.2026)4,433Balance sheet 📄 p.14Latest BS cash 4,433 (FY2025-12-31: 4,323, p113). All bank deposits in a Nordea cash pool (Note 18, p134); no disclosed restricted cash. Drives the excess-cash strip (4,190) and the negative invested capital.
Interest-bearing debt (31.03.2026)197APM — interest-bearing liabilities 📄 p.21Total interest-bearing liabilities 197 = lease liabilities 188 + financial derivative/other 9. No bonds or bank loans. Lease interest (9, Note 14) is already below EBIT under IFRS 16, so no NOPAT add-back; leases excluded from IC (offices/equipment, ~2.5% of assets).
Total equity (31.03.2026)1,802Balance sheet / Changes in equity p16 📄 p.14Total equity 1,802 (FY2025-12-31: 1,696, p113). NCI = 0 (minorities of 188 at end-2024 fully bought out in 2025 for -157, p16). Currency translation reserve (OCI) = 21 at 31.03.2026 -> equity_ex_oci = 1,781.
Tax (effective rate)0.22Note 10 Tax 📄 p.126FY2025 total tax 160 on PBT 731 = 21.9% effective; Norway statutory 22%, Sweden 20.6%. LTM tax 174 / EBT 789 = 22.0%. Clean reconciliation (only minor non-deductible/non-taxable items). 0.22 applied to EBIT for NOPAT.
Net working capital (31.03.2026)-3,398APM — net working capital 📄 p.21NWC -3,398 (FY: -3,454). Strongly negative: contract liabilities/advances + payables exceed receivables/contract assets — the structural reason the contractor needs ~zero net invested capital and carries net cash, making ROIC undefined.
Net financial position / net cash (31.03.2026)4,244Group key figures / APM p21 📄 p.4Net financial position +4,244 (cash+IB receivables 4,441 minus IB debt 197). Net cash exceeds equity 1,802 — confirms the negative-IC special case and that valuation/return analysis must lean on earnings + ROACE, not ROIC/EP.
Analysis history

How the mttssn view has evolved — each prior dated note is preserved.

Quality · Buffett tenets9 / 15
Understandable business
Nordic general construction contractor (HENT Norway + Sentia Sweden) — large/complex public buildings; legible project economics, lumpy.
Durable moat
Low: relationship-driven early-phase project access + Norwegian scale via HENT, but a contractor with thin ~5% margins and fixed-price execution risk.
Able & honest management
Aggressive return-of-cash (96% payout), minority buyout, trivial capex; the open question is whether the net-cash fortress gets returned or deployed into M&A.
Financial strength
Negative invested capital (clients prepay → net cash exceeds equity) makes ROIC n/a; on the proxies, ROACE ~34% and net cash are strong, but margins are thin.
Margin of safety
Cheap on EV/EBIT ~5.7x with a fortress balance sheet and improving order intake; margin thinness and customer concentration cap it.