• Investments in sales held back margins in Q1...
• ...but we think opex increase will pay off in growth
• 29-15x EV/EBITDA '25e-'27e; 45% EBITDA CAGR

We expect the growth momentum to continue

Clavister continued on its solid growth trajectory in Q1 with 24% FX-adjusted growth, supported by both defence and the base firewall business. The defence business is still coming from a low base, and we thus expect it to have a greater effect on group growth in the coming quarter and years. In the meantime, the base business targeting government agencies and critical infrastructure is doing well. We understand that the company still has a relatively low market share in the Nordics compared to its US-based competitors. With an increased share of customers looking for European alternatives, we think Clavister is best positioned to take market share, which should allow the company to continue posting strong growth numbers.

Estimate changes

We raise our sales by 2% and opex by 4% for '25e-'27e on the back of slightly higher investments in sales and marketing. We therefore cut 2025e EBITDA by 9%, and '26e-'27e by 2-1%. We think the company has demonstrated good cost control in recent years, delivering accelerated sales growth on a shrinking opex base between 2021 and 2024 since the new sales strategy was introduced. But to make sure it does not miss out on the growth opportunities presented by current geopolitics, we think it would be wise to be a bit more forward-leaning on sales efforts.

Continued order momentum seems likely in '25e

We still expect that the company will deliver positive EBIT in H2'25e. With an expected incremental EBIT margin of >40%, we believe Clavister could deliver a >20% EBIT margin within three years while continuing to grow sales >15%. We believe there will be continued good order momentum in 2025e, especially within Defence, which could result in us raising our estimates, as we only include already-announced orders in our forecasts.