PROF-B.ST — mttssn research

HOLD

Conviction: MEDIUM

ProfilGruppen is a Swedish aluminum extrusion manufacturer (B-share; B-shares are the primary listed class). FY2025 revenue SEK 5,380M; adj NOPAT SEK 218M; ROIC 12.7% above 9% WACC — EP +SEK 63M. EV/adj EBIT 4.6x and P/book 0.62x screen as cheap, but earnings are cyclically depressed by lower aluminum prices and weak construction volumes. HOLD; base SEK 195.

Adj. ROIC

12.7%

WACC 9% → spread +3.7pp

Economic Profit

+SEK 63M

ROIC 12.7%, EP +SEK 63M above 9% WACC on IC SEK 1,720M — trough-cycle positive EP

FCF Yield

n/a

Low capex (maintenance-focused); FCF tracks EBIT at ~80% conversion

Price / Target

SEK 104 → SEK 110

+6% base; HOLD

Revenue (LTM)

SEK 5.4B

FY2025 SEK 5,380M (pressured vs normalized SEK 6B+)

EBIT Margin

n/a

EBIT margin ~5.2% (trough); normalized 6-8%

EV / IC

n/a

Enterprise value / invested capital

Net Debt

n/a

Net debt SEK 570M (IC SEK 1,720M - equity SEK 1,150M); modest leverage for a cyclical

Thesis

ProfilGruppen extrudes aluminum profiles for construction (windows, facades, structural profiles), transport (vehicle bodies, rail), and industrial uses. FY2025 revenue SEK 5,380M; EBIT SEK 280M; adj NOPAT SEK 218M; IC SEK 1,720M = ROIC 12.7% above 9% WACC (EP +SEK 63M). EV/adj EBIT 4.6x is a very low multiple — but the EBIT is currently depressed: aluminum prices fell 2023-2025 from the commodity spike, and Swedish construction is at cycle lows (housing starts). ROIC ranges 8-20% through the cycle; at the current mid-cycle 12.7%, EP is marginally positive.

The normalised EBIT (at cycle-average aluminum and construction volumes) would be SEK 350-400M, implying EV/normalized EBIT ~3.2x — extremely cheap on normalized earnings. The investment case is a cyclical recovery in Swedish construction (2027?) + aluminum price stabilization driving ROIC toward 16-18% = EP +SEK 120-170M. HOLD at current; the B-share is the primary listed instrument for ProfilGruppen.

Valuation · reverse-DCF & scenarios

EV/adj EBIT 4.6x (trough); P/book 0.62x. At normalized EBIT SEK 375M: EV/normalized EBIT 3.4x — extremely cheap. Base SEK 195 (EV ~SEK 2.2B at 6x normalized EBIT): implies recovery toward normalized earnings; bull SEK 240 (strong construction recovery + aluminum prices + 7x EBIT); bear SEK 130 (trough extended, EV/trough-EBIT 4.6x persists at lower multiples).

Reverse-DCF panel unavailable: non-positive ic.

Scenario	24m target	Upside	Prob.	Driver
Bull	SEK 145	+39%	30%	Construction recovery + aluminum price stabilization + ROIC back to 16-18%
Base	SEK 110	+6%	45%	Modest recovery; normalized earnings support SEK 195 on 6x EBIT
Bear	SEK 75	-28%	25%	Construction cycle extended; trough EBIT persists; P/book further derates
Prob-weighted	SEK 112	+7%	100%	Scenario-weighted expected value

Key drivers

1. Swedish construction recovery

Housing starts and non-residential construction at cycle lows; recovery 2026-2027 lifts demand for aluminum profiles.

2. Aluminum price stabilization

Lower aluminum input costs squeeze margins; stabilization allows margin expansion.

3. Vertical integration

In-house surface treatment and fabrication adds value vs pure commodity extruders.

4. Customer relationships

Long-term contracts with established construction and industrial customers.

Key risks

Construction cycle durationSwedish construction remains in a multi-year downcycle; EBIT recovery delayed.
Aluminum commodity exposureAluminum price is uncontrollable; further price drops pressure raw material margins.
CompetitionEuropean extrusion capacity from lower-cost producers (Eastern Europe) compresses pricing.
Thin margins4-5% EBIT margins leave little buffer for volume declines.

Conclusion

ProfilGruppen is a cheap-on-normalized-earnings cyclical with ROIC 12.7% above WACC in a trough year. EV/adj EBIT 4.6x, P/book 0.62x — wait for construction recovery signals. HOLD; base SEK 195.

Footnote evidence & sources

Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.

Adjustment / figure	Value	Source	Why mttssn treats it this way
Revenue	5,380	Consolidated Income Statement	Revenue SEK 5,380M. Lower YoY from LME aluminum price normalization. Volume stable
GAAP EBIT	280	Consolidated Income Statement	EBIT SEK 280M (5.2% margin). Mid-cycle profitability. No PPA, no restructuring
Invested capital	1,720	Balance Sheet	IC SEK 1.72B = equity SEK 1.15B + net debt SEK 0.57B. PP&E-intensive extrusion business

Analysis history

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

2026-06-15 · HOLD/MEDIUM · Streamlined — this version
2026-06-11 · HOLD/MEDIUM · Streamlined
2026-06-10 · HOLD/MEDIUM · Streamlined
2026-05-31 · Hold/low

Quality · Buffett tenets8 / 15

Understandable business●●●

ProfilGruppen — Swedish aluminum extrusion manufacturer (profiles for construction, transport, industry); simple industrial model.

Durable moat●○○

Narrow: established customer relationships + vertical integration in Swedish/European aluminum extrusion; but aluminum extrusion is commoditized; limited pricing power.

Able & honest management●●○

Conservative; disciplined capex; consistent dividend; family-founded heritage; transparent APM.

Financial strength●○○

ROIC 12.7% above 9% WACC — EP +SEK 63M; cyclical; aluminum price and construction volumes are the key variable. Revenue pressured in 2024-2025 cycle.

Margin of safety●○○

EV/adj EBIT 4.6x — extremely cheap vs normalized earnings; but cyclically depressed EBIT means the multiple can remain low. Limited margin of safety vs trough.