RIAS distributes technical plastics (Industry Division — stable/strong demand, slightly higher H1 volume) and building-products plastics (Building Division — hit by severe Jan–Feb winter weather, management calls it temporary). It is a debt-free-ex-leases distributor with a long Danish history, but a structurally low-return one: adjusted ROIC 3.4% against an 8% WACC leaves economic profit at −9.6 MDKK. EP has been thin-to-negative through the cycle even before the logistics step-up.
The new Randers national logistics centre and ERP roll-out lifted invested capital from ~176 to 208 MDKK (ROU assets 4.7→32.4 MDKK) and depressed current returns; management frames both as one-time platform investments for future growth. LTM revenue 300 MDKK (−2.1% in H1) and reported EBIT of 5.6 MDKK including special items confirm a business running below its cost of capital.
Guidance for FY2025/26 is maintained at adjusted EBIT DKK 12–15 MDKK, expected at the lower end on raw-material and supply-chain volatility — a level that still implies through-cycle returns short of WACC. This is a sub-WACC distributor where growth adds capital, not value.
Capitalising trough adjusted NOPAT of 7.1 MDKK at the 8% WACC and bridging through 20.4 MDKK net debt and 0.231 M B-shares gives a zero-growth fair value near 294 DKK/share. On maintained mid-cycle guidance (adjusted EBIT 12–15 MDKK → NOPAT ~9–12 MDKK) the through-cycle fair value runs ~420–480 DKK. Against a 655 DKK price the equity sits ~1.4–2.2× its through-cycle worth — no margin of safety, and because ROIC is below WACC, growth is value-destructive.
Base 500 DKK (−24%) is a partial de-rate toward mid-cycle intrinsic; bull 640 DKK assumes the logistics/ERP investment plus Building-Division normalisation restores returns toward WACC; bear 350 DKK reflects the deeper through-cycle sub-WACC value on trough earnings. The tiny ~130 MDKK float and thyssenkrupp control mean the market price is a weak signal — conviction is LOW despite the clear intrinsic gap.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 3% ≈ WACC 8%) it cannot reach the current EV. No-growth value is DKK 136/share (21% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 640 | ≥-50% | -2% | 25% | Logistics/ERP leverage + Building normalisation restore returns toward WACC |
| Base | DKK 500 | ≥-50% | -24% | 45% | Partial de-rate toward mid-cycle intrinsic ~420–480 DKK |
| Bear | DKK 350 | ≥-50% | -47% | 30% | Deeper through-cycle sub-WACC value on trough earnings |
| Prob-weighted | DKK 490 | — | -25% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 191 | 103 | 34 | -85 | -176 | -452 |
| 7.25% | 160 | 70 | -0 | -122 | -215 | -494 |
| 8.00% (base) | 137 | 46 | -25 | -147 | -241 | -521 |
| 8.75% | 119 | 28 | -43 | -165 | -259 | -539 |
| 9.50% | 105 | 13 | -57 | -179 | -272 | -549 |
Green = fair value above the current price of DKK 655.00. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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A normal weather year restores Building volumes; management flags the Jan–Feb winter hit as temporary.
The completed Randers centre and ERP could lift throughput and efficiency, easing the capital drag as the ramp matures.
Stable-to-strong demand and slightly higher volumes give a resilient earnings floor.
No bank debt (leverage only via leases) leaves room to fund investment and dividends without dilution.
If supply-chain and raw-material volatility eases, margins recover toward the guided EBIT range.
RIAS is a clean, candidly-reported, debt-free distributor — but a structurally low-return one that earns below its cost of capital and trades well above its through-cycle worth. We rate it SELL, low conviction; base target 500 DKK (−24%), reflecting a partial de-rate toward mid-cycle intrinsic rather than a distressed mark.
The thesis flips only if the logistics/ERP investment plus a normal Building-Division year push ROIC durably toward WACC. Conviction is deliberately low: the ~130 MDKK thyssenkrupp-controlled float makes the market price a weak, control-tinted signal, so this is an avoid rather than an actionable short.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue LTM | 300 | H1 IS p.8 (FY303.111 - H1'25 137.798 + H1'26 134.911) | LTM revenue rolled from FY2024/25 anchor plus H1 2026 less H1 2025. |
| EBIT reported LTM (after special items) | 5.584 | H1 IS p.8 (FY12.858 - H1'25 0.605 + H1'26 -6.669) | Reported operating profit including the one-off special items. |
| Special items normalized back | 3.431 | Note 4 Special items p.13 | ERP implementation + Randers warehouse-move costs; management-flagged one-time, non-recurring — added back to adjusted EBIT. |
| Goodwill (no impairment) | 53.085 | Note 5 Intangibles p.13 | Goodwill flat; impairment test passed 31/3/2026 — no impairment addback. Not amortized under Danish GAAP. |
| Equity (IC base) | 182 | Balance sheet p.9 / Equity statement p.10 | Total equity at 31/3/2026; zero OCI so equity_ex_oci = equity. |
| Lease liabilities in IC | 32.703 | Balance sheet p.9 (28.189 + 4.514) | New Randers logistics-centre lease is a primary distribution asset (ROU 32.432); leases included in invested capital. |
| Cash | 12.348 | Balance sheet p.9 | operational_cash capped at 2% of revenue (6.004); excess 6.344 removed from IC. |