<a id="bm-comp-f9b9800f-bf01-4c3c-b91a-b51d9d51ac99" name="bm-comp-f9b9800f-bf01-4c3c-b91a-b51d9d51ac99" class="BMCustomAnchor"></a><table><tr><td bm-component-id="f9b9800f-bf01-4c3c-b91a-b51d9d51ac99" style="vertical-align: top; width:100.000000%;"><ul><li>No real progress in Q1</li><li>Market to turn positive in '25e, according to report</li><li>Turnaround delayed, '25e EBITA down 26%</li></ul></td></tr></table><a id="bm-comp-dfa0bf2c-fd2d-4851-bcc7-0c985994336a" name="bm-comp-dfa0bf2c-fd2d-4851-bcc7-0c985994336a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="dfa0bf2c-fd2d-4851-bcc7-0c985994336a" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q1: Sales -11% y-o-y, adj. EBITA margin of 4.2% (8.3%)</h3><p>Projektengagemang's (PE) Q1 numbers saw similar development as in the Q4 report, with a sales decline of 11% y-o-y and underlying profitability (adj. EBITA margin) lower than last year. There was some slight progress q-o-q, however, as sales contracted more slowly and profitability improved, although it was still down around 4pp y-o-y. Sales were SEK 195m (218m) and adj. EBITA was SEK 8.1m (18.2m); we expected SEK 200m and 13.4m, respectively. The deviation was primarily driven by a lower number of FTEs and higher-than-expected personnel expenses per FTE. We are within a long downturn for the Swedish contracting market that started in '23, but according to Veidekke's latest market <a data-bm-trackable="false" href="https://chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mb.cision.com/Public/17348/4121265/8bd6d1ba6c243a4b.pdf" target="_blank">update</a>, there are positive signs going into '25e. The company sees the Swedish contracting market increasing by 2% in '25e and a further 10% in '26e, which is a slightly slower recovery than previously anticipated.</p><h3 class="bm-h3">We continue to believe in an H2'25 recovery</h3><p>Although the Q1 report was below our expectations, we maintain our view that there is a possibility for a turnaround during '25, albeit a bit later than we previously thought. In the quarter we saw positive signs within the Systems business, but Civil Engineering is still struggling. For the group, we now forecast sales growth y-o-y first in Q4. We also lower our profitability forecast, resulting in 26% lower EBITA for '25e.</p><h3 class="bm-h3">Fair value range adjusted to SEK 9-16 (10-19)</h3><p>We lower our fair value range to reflect our negative earnings revisions. The long-term profitability assumptions are not adjusted to the same extent, as we think PE has managed to decrease the cost base and stabilised profitability in this downturn, resulting in a company that should be able to prosper when market conditions improve.</p></td></tr></table>