• Q1: +29% org. sales growth, SEK 9m adj. EBITA improvement
• '25e-'27e adj. EBITA up 19-4%, 34% CAGR '24-'27e
• 9-5x EBITA '25e-'27e, 16-19% FCF yields

Growth took off in Q1

Infrea delivered a solid Q1 with sales 25% above ABGSCe, while organic sales were +29% (ABGSCe +3%, +4% Q4'24) due to Land & Construction and Paving services growing 30% and 67% organically, respectively, as services could continue in the mild winter. Adj. EBITA improved by SEK 9m y-o-y, or SEK 6m above our expectation due to a one-off from the divestment of Mikaels Grävtjänst adding SEK 6m to adj. EBITA. L&C had ~SEK 7m negative project revisions in Q1'24; adjusting for this, earnings growth was flat y-o-y. Water & Sewage was flat, both in terms of sales and earnings, and we expect no change to this. After passing the smallest quarter (~15% of sales) and as the market remains tough, we expect adj. EBITA to increase by SEK 9m y-o-y in Q2'25 and then continue with ~13% growth in H2'25e, supported by stable organic growth of 2-3%. Cash flow was weak at ~23% of adj. EBITA, and yielded a gearing of 2.0x.

Earnings growth to continue

We increase '25e-'27e adj. EBITA by 19-4% (19% in '25e due to a SEK -6m one-off from the divestment of Mikaels Grävtjänst), and we expect 8% organic sales growth in '25, which together with gradually improving margins should support SEK 25m adj. EBITA growth in '25e (+SEK 17m '24) and a 34% CAGR '24-'27e. Additionally, we continue to believe that Infrea could add growth through potential M&A.

Margins to improve and FCF to stabilise

We 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 '24-'27e, we expect Infrea to deliver growth and FCF in line with peers with slightly lower margins. The share is trading at 9-5x adj. EBITA 25e-27e with a 16-19% FCF yield, while peers are trading at 7