Consti: Slow and steady wins the race - Evli
21 juli, 08:53
Order backlog at its highest level since Q2/23
Consti’s steady development continued during the second quarter as net sales grew 2.3% to EUR 84.8m while we had expected slight sales decline. On the other hand, profitability fell more than we had estimated as EBIT came in at EUR 2.5m (Evli est. EUR 2.7m). According to our understanding, the main negative in terms of profitability development remain Consti’s service business where sales continued to be at a low level. The company has continued to implement adaptation measures throughout the H1 to stabilize the business. The project side of the business advanced largely according to the company’s plans, although the market remains challenging and competition is intense. Once again, the order development was positive as order intake grew 15.8% and backlog reached EUR 276.7m, the highest level seen since Q2/23.
Market environment limits short-term momentum
After the Q2 figures and slight adjustments to our estimates, we model net sales of EUR 334.8m and EBIT of EUR 10.0m for FY 2025. We had anticipated some improvement in the service business during the second quarter, which did not materialize. We now expect that the adaptation measures implemented in the first half will begin to gradually improve profitability in the second half of the year. However, we do not foresee a significant recovery yet, as the competitive landscape will continue to limit achievable margins in the project business. Roughly the same amount of 6/25 backlog will materialize during the second half compared to last year, we model slight net sales growth throughout the second half. We have kept our forecasts for the coming years mostly unchanged, as they were lowered ahead of the quarterly results. The slow pace of market recovery continues to limit the potential for substantial earnings growth in the near to medium term.
BUY with a TP of EUR 12.0
Consti is priced at 9-7x EV/EBIT based on our estimates for 2025-2026. The valuation discount compared to peers continues to be larger than warranted as Consti is priced at a discount of 30-40%. After only slight adjustments to our estimates, we retain our TP at EUR 12.0 and rating at BUY.
Evli Research
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Consti: Slow and steady wins the race - Evli
21 juli, 08:53
Order backlog at its highest level since Q2/23
Consti’s steady development continued during the second quarter as net sales grew 2.3% to EUR 84.8m while we had expected slight sales decline. On the other hand, profitability fell more than we had estimated as EBIT came in at EUR 2.5m (Evli est. EUR 2.7m). According to our understanding, the main negative in terms of profitability development remain Consti’s service business where sales continued to be at a low level. The company has continued to implement adaptation measures throughout the H1 to stabilize the business. The project side of the business advanced largely according to the company’s plans, although the market remains challenging and competition is intense. Once again, the order development was positive as order intake grew 15.8% and backlog reached EUR 276.7m, the highest level seen since Q2/23.
Market environment limits short-term momentum
After the Q2 figures and slight adjustments to our estimates, we model net sales of EUR 334.8m and EBIT of EUR 10.0m for FY 2025. We had anticipated some improvement in the service business during the second quarter, which did not materialize. We now expect that the adaptation measures implemented in the first half will begin to gradually improve profitability in the second half of the year. However, we do not foresee a significant recovery yet, as the competitive landscape will continue to limit achievable margins in the project business. Roughly the same amount of 6/25 backlog will materialize during the second half compared to last year, we model slight net sales growth throughout the second half. We have kept our forecasts for the coming years mostly unchanged, as they were lowered ahead of the quarterly results. The slow pace of market recovery continues to limit the potential for substantial earnings growth in the near to medium term.
BUY with a TP of EUR 12.0
Consti is priced at 9-7x EV/EBIT based on our estimates for 2025-2026. The valuation discount compared to peers continues to be larger than warranted as Consti is priced at a discount of 30-40%. After only slight adjustments to our estimates, we retain our TP at EUR 12.0 and rating at BUY.
Evli Research
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