Contracting economics: revenue EUR 546m to 872m (2023-25) on a rising adj EBIT margin (4.6% to 6.7%) with negative net working capital funding growth internally. Judge quality on the margin and backlog, not ROIC/EP which are mechanically degenerate on structurally negative invested capital (-44.8m) as the company itself flags.
Cyclical, low-moat civil engineering: public-infra single-buyer tenders, cost-index clauses hedge bitumen but competition commoditises pricing. The 6.7% margin is a cycle-high, not a durable structural spread; the >6% through-cycle target is aspirational for the sector.
Record EUR 883m backlog (+22% QoQ) plus ~EUR 400m pipeline optionality (Turku tramway, Rail Baltica, Luleaa port) give forward visibility, weighted to Sweden — the strategic growth market — but Stegra project wind-down and Q1 revenue -35.9% YoY show the lumpiness.
EV EUR 533m against LTM adj EBIT 55.4m is ~9.6x (~9.2x on FY2025 58.2m); 2026 guidance adj EBIT 45-60m brackets the LTM print, so the multiple re-rates to ~9-12x on the guide midpoint. Fair for a cyclical contractor at a margin peak, not a value entry.
Net cash EUR 234m (EV 30% below market cap 767m) is real downside support and unusual for the sector; but ROIC/EP cannot underwrite an intrinsic-value case here, so the margin of safety rests on the balance sheet and backlog rather than a modelled discount.
Reverse-DCF panel unavailable: non-positive ic.
| Scenario | 24m target | Upside | Prob. | Driver |
|---|---|---|---|---|
| Bull | €26 | +39% | 25% | Backlog + ~EUR 400m optionality convert, Sweden scales, margin holds >6.7%; re-rate to ~12x EV/adj-EBIT on EUR 60m guide-high. |
| Base | €19 | +1% | 50% | Through-cycle adj EBIT ~55m at ~9.6x EV/adj-EBIT, backlog steady; net cash supports fair-value hold near current price. |
| Bear | €13 | -31% | 25% | Cycle rolls, margin mean-reverts toward 5% and a large fixed-price contract slips; de-rate despite net-cash cushion. |
| Prob-weighted | €19 | +3% | 100% | Scenario-weighted expected value |
Record EUR 883m backlog + ~EUR 400m optionality convert into 2026-27 revenue
Norrbotniabanan / Luleaa wins scale the strategic 40% Sweden leg
Holding >6% adj EBIT margin through-cycle validates the quality thesis
EUR 234m liquidity funds M&A or buybacks without dilution
Contract clauses pass bitumen/oil inflation to public clients
HOLD. A well-run, net-cash Nordic contractor on a record backlog, but a cyclical, low-moat business priced fairly (~9.6x EV/adj-EBIT) at a demonstrated margin peak. The quality case leans on the balance sheet and through-cycle margin target, not on returns-on-capital, which are degenerate on negative invested capital.
Re-rate to BUY on a durable break above the 6% through-cycle margin with backlog conversion in Sweden, or a pullback that puts EV/adj-EBIT toward mid-cycle earnings at a clear discount. Trim into any thesis-breaking large-contract loss.
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 / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue (LTM Q1 2026) | 810 | Consolidated statement of comprehensive income / p.19 📄 p.19 | LTM = FY2025 872.311 - Q1_2025 174.470 + Q1_2026 111.917. Q1 revenue -35.9% YoY off an exceptionally strong prior-year comparison; full-year guidance EUR 720-870m. |
| Operating profit / EBIT (LTM) | 51.365 | Consolidated statement of comprehensive income / p.19 📄 p.19 | LTM = FY2025 53.506 - Q1_2025 8.051 + Q1_2026 5.910. |
| Items affecting comparability (FY2025) | 4.696 | Reconciliation of alternative performance measures / p.21 📄 p.21 | Disposal gains/losses 2.896 + listing costs 1.319 + restructuring 0.298 + acquisition transaction costs 0.182; genuine IPO-window one-offs, normalized out of NOPAT. |
| Company adjusted EBIT (FY2025) | 58.201 | Adjusted EBIT reconciliation / p.21 📄 p.21 | APM sanity anchor: reported EBIT 53.506 + comparability 4.696 = 58.201; our bridge matches exactly on FY basis. |
| Total equity (31 Mar 2026) | 174 | Consolidated balance sheet / p.20 📄 p.20 | All attributable to parent; no NCI. Reduced from 190.142 at YE by EUR 21.7m dividend. |
| Cash + current investments (31 Mar 2026) | 270 | Consolidated balance sheet / p.20 📄 p.20 | Cash 234.548 + current investments 35.218 = liquid assets driving deeply negative net debt (-233.4m) and negative invested capital. |
| Interest-bearing debt + leases (31 Mar 2026) | 35.778 | Consolidated balance sheet / p.20 📄 p.20 | Borrowings 14.876+7.986=22.862 plus lease liabilities 7.618+5.298=12.916. |
| Contract liabilities (31 Mar 2026) | 177 | Consolidated balance sheet / p.20 📄 p.20 | Customer advances / POC over-billings fund operations → negative net working capital (-156.8m) → negative invested capital; ROIC/EP not meaningful. |
| Order backlog (31 Mar 2026) | 883 | Summary / p.3 📄 p.3 | Record all-time high, +22% vs year-end; forward-revenue visibility, strong in Sweden (strategic expansion market). |
| Intangible assets / goodwill (FY2025) | 2.464 | Note 12 Intangible assets / p.132 📄 p.132 | Total intangibles 2.464 incl goodwill 1.048 — negligible; no PPA amortisation stream to reject, no material impairment (only 0.213m write-down). |