Solwers Q1: weak but activity improved towards quarter-end - Nordea

Solwers reported its results for Q1 (condensed business review) with sales of EUR 20.4m, slightly above our estimate of EUR 20.1m. The reported EBITA (Solwers definition) was EUR  0.9m, clearly below our EUR 1.5m estimate and down from EUR 1.5m a year ago. EBIT of EUR 0.1m came in clearly below our estimate of EUR 0.9m. The result was still burdened by non-recurring items such as costs related to potential main list transition. Tough price competition and low billable hours also contributed to the weaker result, while order backlog and billing rate improved towards the end of the quarter. No numerical guidance was given, but the company anticipates market recovery to strengthen towards the year-end 2025. The company aims to grow via acquisitions in at least three countries during the year, implying M&A in Poland this year. We expect a slightly negative share price reaction although shares have been weak into the report.

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