<a id="bm-comp-1652f021-0139-48b9-b3c2-0b7160eac4f0" name="bm-comp-1652f021-0139-48b9-b3c2-0b7160eac4f0" class="BMCustomAnchor"></a><table><tr><td bm-component-id="1652f021-0139-48b9-b3c2-0b7160eac4f0" style="vertical-align: top; width:100.000000%;"><ul><li>Capitalising on the wave of infrastructure and defence investments</li><li>58% adj. EBITA CAGR '23-'26e, ex M&A growth potential</li><li>FVR of SEK 10-16 per share</li></ul></td></tr></table><a id="bm-comp-033dc84e-c548-4bcd-8c72-089adf9200e9" name="bm-comp-033dc84e-c548-4bcd-8c72-089adf9200e9" class="BMCustomAnchor"></a><table><tr><td bm-component-id="033dc84e-c548-4bcd-8c72-089adf9200e9" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">National company, local acquisitions</h3><p>Infrea operates in the growing Swedish infrastructure market within land, construction, water and wastewater through 15 regionally strong and entrepreneurially managed subsidiaries. The group has delivered a solid sales CAGR '20-'23 of 31%: ~8% organic, ~24% M&A. It operates through a decentralised model that focuses on subsidiaries that serve private (~45%) and public clients (~55%), with contracts ranging from SEK 2-10m and lasting from 1 week to 2 years. The Swedish government is proposing to invest SEK 1,171bn in infrastructure between 2026 and 2036, driven by the need for investments in defence, roads, and water and wastewater systems.</p><h3 class="bm-h3">Focus on margin expansion</h3><p><font color="#000000"><font style="background-color:#ffffff;">Infrea says its market is worth</font></font> ~<font color="#000000"><font style="background-color:#ffffff;">SEK 120-150bn, and it expects it to grow by 5-7% in the coming years.</font></font> We estimate a 3% organic sales CAGR in '23-'26e, not including potential M&A. We expect M&A to resume in '25 after a pause because of a weak market and a focus on internal improvements, which also took their toll on margins. We expect the most recent acquisitions, which better support the group margin in their third year, and the new CEO's hard focus on internal policies to help the adj. EBITA margin go from 0.6% in '23 to 2.3% in 26e, for a 58% adj. EBITA CAGR.</p><h3 class="bm-h3">Fair value range of SEK 10-16</h3><p>Compared to its peers, we expect Infrea to deliver similar organic sales (3% CAGR '23-'26e vs. peers at 3%), higher adj. EBITA growth (58% vs. 8%), lower margins (2% average vs. 5%) and a lower ROCE (2% average vs. 14%). The share is trading at 24-9x EBITA '24e-'26e, >50% above peers. Our fair valuation range of SEK 10-16 per share is based on a peer valuation looking at EV/EBITA in relation to EBITA growth and ROCE in relation to EV/CE, and a DCF valuation.</p></td></tr></table>