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First quarter with Water & Segment out of the numbersIn Q4'25, Infrea sold its Water & Sewage segment. We included the segment in the comparable numbers for '24, while it is shown as an asset held for sale in the Q4'25 numbers. Infrea delivered a Q4 with sales growth in both remaining segments: +5% y-o-y in Land & Construction (L&C) and +4% Paving Services (PS). Organic sales growth was +2.5% y-o-y (0% Q3'25), while total sales were -4% due to the divestment. EBITA improved in PS by SEK 8m, to SEK 25m, driven by more good results in Asfaltsgruppen while EBITA in L&C declined SEK 3m, to SEK 11m, due to a SEK 8m reservation. Cash flow was weak at ~75% of adj. EBITA due to customer discussions, that is estimated by Infrea to be solved in '26, yielding a net cash position of ~SEK 3m, which enables a DPS of SEK 0.65 (SEK 0.5 '24) Varied performance in the group but overall positiveWe raise '26e-'27e EBITA by 8-11% on continued progress in PS, where we argue that Duo Asphalt will have a better '26 than '25, and in L&C now that Mikaels Grävtjäns is off the books. Infrea continues to focus on internal efficiency and margins over volumes. We think improving margins should support SEK 63m EBITA in '26e and a 13% CAGR '24-'27e. The net cash position makes us more confident that Infrea could add growth through potential M&A. Margins to improve and FCF to stabiliseWe believe that Infrea is well-positioned to grow organically and improve its margins given its exposure to underlying demand and to public customers (~55%), as well as support from M&A (13% sales CAGR in '21-'24). For '25-'28e, we expect Infrea to deliver profitability growth and FCF above peers but with slightly lower margins and sales growth. The share is trading at 5-4x adj. EBITA on '26e-'27e with a 31-12% lease-adj. FCF yield, while peers are trading at 7-6x. |