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LATEST RESEARCH


NETUM - PROMISING BETTER FIGURES IN 2023

07.03.2023 - 9.15 | Earnings Flash


ENDOMINES - UPDATED ORE ESTIMATE FOR PAMPALO

06.03.2023 - 09.30 | Company update

Endomines announced an update in ore reserves and mineral resources. The update
brings an 60% increase to Pampalo reserve ounces when comparing to the ore
reserves at the end of 2021. Due to a 13% share price decline since our previous
update, the company’s steady progress in accordance with the new strategy and a
strong gold market, we upgrade our rating to BUY (HOLD) while maintaining our
target price at EUR 6.5 (6.5).

Read more

Update increases ore reserves to 29 400 ounces of gold

The published update increases Pampalo reserves by 60% when comparing to the ore
reserve status at the end of 2021. The ore reserves are doubled in ore tonnes as
the open pit grades dilute the total grade, the Pampalo underground gold grades
are at similar level compared to the previous ore reserve update. Most of the
reserve increase comes from the underground drilling programme that was
completed in 2022, the programme included 117 drill holes in total between the
levels 815 and 875.

 

Visibility remains rather low

The current ore reserves in Pampalo are sufficient for roughly three years of
gold production at the current production rate. The remaining production
potential depends on the successfulness of the company’s exploration efforts in
both Pampalo underground mine and in the Karelian gold line. The company’s
mid-term target is to define over one-million-ounce gold mineralization on the
Karelian gold line by the end of 2025. To reach the target, the company has
started exploration drilling in the area. Despite limited visibility for
exploration, the company's targeted zones, which have not been thoroughly
investigated before, show promising potential.

 

BUY (HOLD) with a TP of EUR 6.5 (6.5)

We have made only slight adjustments to our SOTP-model. The increased reserves
provide slightly better visibility for the production in Pampalo, on the other
hand, we continue to see risks related to the value realization of the US asset
portfolio. Endomines trades currently at a slight discount to its peers based on
EV/Resources multiple when including the company’s historic resources (Figure
1). Due to a 13% share price decline since our previous update, we upgrade our
rating to BUY (HOLD), noting however that junior gold miners entail significant
risks.

Open report


ENERSENSE - INVESTMENTS TO CONTINUE

28.02.2023 - 09.30 | Company update

Enersense’s Q4 figures didn’t contain big news after the guidance revision, but
FY ’23 results may remain muted.

Read more

Q4 close to estimates, FY ’23 profitability guidance soft

Enersense top line grew 37% y/y to EUR 90m vs our EUR 87m estimate. All four
segments grew, especially Power and International Operations (high-voltage
projects in the Baltics drove revenue). Power’s EUR 8.7m y/y EBITDA gain
included EUR 7.5m in wind power gains as the projects progressed faster than
expected. Other segments’ profitability levels didn’t fare that well compared to
Q4’21 as inflation hadn’t yet surged then. Investments in the ERP system and
offshore wind power subtracted EUR 2.7m. Voimatel deal costs also weighed Q4; we
hadn’t included the deal in our estimates but note it would’ve been a positive
driver should it have gone through. The EUR 4.3m adj. EBITDA topped our estimate
by EUR 0.4m while the EUR 1.1m EBIT missed our estimate by EUR 0.6m. Guidance
didn’t surprise in terms of revenue, however the expectation for adj. EBITDA was
soft (EUR 15m midpoint vs our EUR 20m estimate).

We make downward revisions to our profitability estimates

We cut our profitability estimates for FY ’23 by EUR 5.5m while we make minor
upward revisions to our top line estimates. Last year’s Q2 was exceptionally
soft due to project delays and a Finnish ICT strike. FY ’23 should see more
regular project patterns, in addition to which inflation is moderating and at
least is no more any surprise. The ERP system costs will increase this year, in
addition to which wind power developments, both onshore and offshore, will
create additional costs.

Longer term upside potential, lacks short-term drivers

Enersense is valued almost 20x EV/EBIT on our FY ’23 estimates, which in our
view reflects the fact that profitability will remain below potential this year
due to investments in the ERP system and wind power. Last year’s results were
plagued by inflation, and even though the situation is easing we believe some
cost headwinds will remain this year. Double-digit growth is likely to continue,
and we estimate decent single-digit growth for FY ’24. Earnings growth potential
is thus strong from a medium-term perspective, but margins may stay somewhat
muted in the short-term. The valuation equals 8x EV/EBIT on our FY ’24
estimates. Our new TP is EUR 6.5 (7.0); we retain our HOLD rating.

Open report


ENERSENSE - FIGURES QUITE CLOSE TO OUR ESTIMATES

27.02.2023 - 13.00 | Earnings Flash

Enersense’s Q4 figures were overall relatively close to our estimates. Revenue
came in higher than we estimated, while adjusted EBITDA was higher and EBIT
lower than we estimated. Enersense’s guidance midpoint suggests profitability is
likely to increase at least a bit this year, however bottom line will still be
weighed down by development projects.

Read more

 * Enersense Q4 revenue increased 36.6% y/y to EUR 90.0m, compared to our EUR
   86.5m estimate. Top line grew especially within Power and International
   Operations due to high volumes and project progress.
 * Adjusted EBITDA was EUR 4.3m vs our EUR 3.9m estimate. EBIT landed at EUR
   1.1m, compared to our EUR 1.7m estimate. Power’s profitability improved
   significantly, while Smart Industry and International Operations weakened
   considerably due to e.g. inflation. Investments in offshore wind power and
   the new ERP system had a negative impact of EUR 2.7m.
 * Order backlog amounted to EUR 415m at the end of Q4, compared to EUR 291m a
   year ago. Onshore wind power project portfolio stood at approximately
   8,000MW, compared to 3,000MW at the end of Q3’22.
 * The BoD proposes EUR 0.10 per share return of capital to be distributed for
   the year, in line with our estimate.
 * Enersense guides FY ’23 revenue to be in the range of EUR 280-310m and
   adjusted EBITDA in the range of EUR 12-18m. Investments in and the
   development of the new ERP system as well as offshore and onshore wind power
   will impact profitability. The projects should not burden profitability any
   more next year.

Open report


DOVRE - MODERATION IN GROWTH TO BE EXPECTED

24.02.2023 - 09.30 | Company update

Dovre disclosed Q4 figures before the report and thus there were no big
surprises. We make some downward revisions to our estimates yet note guidance
appears conservative.

Read more

No surprises in Q4; FY ’22 growth not to be repeated

Dovre continued to grow at a 14% y/y rate in Q4 and reached EUR 48m in top line
vs our EUR 45m estimate. There were no big surprises as Consulting and Renewable
Energy both grew by double digits whereas Project Personnel remained flat. An
FPSO project in Singapore delivered to Equinor no longer contributed, but
otherwise growth continued in Norway, Finland, and North America. Dovre
disclosed preliminary Q4 figures before the report and the EUR 2.1m EBIT was in
line with our estimate. Last year’s growth is not to be repeated but many
Norwegian clients have extended their agreements while Consulting Finland has
performed as expected after the eSite industrial VR acquisition. The Finnish
wind power market helped Suvic grow 87% last year; growth is likely to be very
modest this year relatively speaking however we still estimate a high
single-digit figure.

EBIT should hold up at least flat in the short-term

The summer period is important for Renewable Energy and negotiations are still
going on. Norway introduces new legislation in Q2 which regulates temporary
staffing in various contexts, and it may also affect white collar work. Project
Personnel and Consulting are coordinating with clients to make sure they comply.
We make small revisions to our revenue estimates and see group growth at just
above 3% this year. We revise our EBIT estimate for FY ’23 down to EUR 8.6m
(prev. EUR 10.0m); we revise both Project Personnel and Consulting down by EUR
0.2m and Renewable Energy by EUR 1.0m. In our view Dovre’s guidance doesn’t seem
demanding and our estimates are conservative. The worst inflationary period has
likely passed and wasn’t such a big issue for Dovre, but the lingering level may
still limit margin expansion now that growth is much more modest.

There remains earnings growth potential beyond this year

Dovre still trades only 7x EV/EBIT on our FY ’23 estimates while peer multiples,
for all three segments, have gained significantly in the past few months. Our
SOTP valuation indicates current fair value to be slightly north of EUR 0.80 per
share. We thus update our TP to EUR 0.80 (0.75) and retain our BUY rating.

Open report


DOVRE - GROWTH LIKELY TO MODERATE THIS YEAR

23.02.2023 - 09.30 | Earnings Flash

Dovre announced preliminary Q4 figures already on Feb 3, and therefore the Q4
report didn’t hold many surprises. Growth continued in all segments, especially
in Consulting and Renewable Energy. EBIT should stay relatively high this year,
but there are a few uncertain factors which may limit earnings growth.

Read more

 * Dovre Q4 revenue grew by 13.6% y/y to EUR 48.1m, compared to our EUR 45.4m
   estimate. Project Personnel amounted to EUR 23.0m vs our EUR 22.8m estimate,
   while Consulting was EUR 4.8m vs our EUR 4.3m estimate. Renewable Energy
   landed at EUR 20.2m, compared to our EUR 18.3m estimate.
 * EBITDA came in at EUR 2.5m vs our EUR 2.3m estimate. EBIT was EUR 2.1m,
   compared to our EUR 2.1m estimate. Project Personnel EBIT was EUR 1.1m vs our
   EUR 1.1m estimate, whereas Consulting landed at EUR 0.9m vs our EUR 0.7m
   estimate. Renewable Energy amounted to EUR 0.4m vs our EUR 0.6m estimate.
 * The BoD proposes EUR 0.01 per share dividend to be distributed for the year,
   compared to our EUR 0.01 estimate.
 * Dovre guides FY ‘23 revenue to improve y/y and EBIT to be about the same as
   previous year. Norway introduces new legislation in Q2 which regulates the
   hire of temporary employees in various situations. Its impact on Project
   Personnel and Consulting is yet unclear as the segments typically employ
   white collar staff. Suvic’s sales cycle creates some uncertainty as
   negotiations for the summer period have not yet been fully completed.

Open report


SCANFIL - READY TO MEET HIGH DEMAND

22.02.2023 - 09.35 | Company update

Scanfil’s year concluded on a strong note without any big surprises. Valuation
has gained recently but in our view is still not too expensive thanks to growth
and margin upside.

Read more

Profitability advanced in Q4 as plant productivity improved

Scanfil Q4 top line grew 16% y/y to EUR 222m vs the EUR 216m/218m Evli/cons.
estimates. Without spot purchases growth was 17% y/y, compared with the
long-term target of 5-7%. There have been price increases, but volumes have
mainly driven revenue. Demand remained high especially within accounts belonging
to Automation & Safety, Energy & Cleantech as well as Medtech & Life Science.
Scanfil’s guidance suggested EBIT would improve over the year, yet the EUR 13.4m
EBIT was well above the EUR 12.8m/12.5m Evli/cons. estimates. EBIT margin,
excluding spot purchases, was 6.5% as better component availability helped
productivity. The component situation continues to normalize and should no
longer be such a major issue, while inflation is now seen mostly in the low
single digits.

Scanfil has already added some capacity to meet demand

Scanfil has achieved double-digit growth two years in a row and has already
added capacity. This year sees capex in new electronics manufacturing lines in
Atlanta (also widens services in the US) and Sieradz (a new building would make
the Polish plant the main electronics production site in Europe). We estimate
the guidance suggests close to 10% growth for the year excluding spot purchases;
growth should be mostly driven by volumes rather than prices. Advanced Consumer
Applications’ top line may decline this year due to the headwind from fading
component purchases, but other segments should be positioned to achieve either
flat or some positive headline revenue development. We estimate Automation &
Safety to grow 10% nominally this year (in the high teens excluding spot
purchases).

We don’t find valuation yet too expensive

The 9.5x EV/EBIT multiple, on our FY ’23 estimates, isn’t low in Scanfil’s
historical context but remains in line with peers’, while Scanfil’s is still
likely to achieve somewhat better margins than a typical peer. For FY ’24 we
estimate 5% growth and 6.2% EBIT margin, which we view conservative in the light
of long-term targets; the corresponding 8.7x EV/EBIT multiple is in line with
peers’. We update our TP to EUR 8.75 (7.0) and retain BUY rating.

Open report


SCANFIL - NO MAJOR SURPRISES, STRONG REPORT

21.02.2023 - 08.30 | Earnings Flash

Scanfil’s Q4 unfolded without any big surprises. The key figures developed well
and were all somewhat better than estimated. Continued high demand and improved
component availability supported profitability. Guidance suggests strong
performance is set to continue this year as well.

Read more

 * Scanfil Q4 revenue increased by 15.9% y/y to EUR 222.3m, compared to the EUR
   215.6m/218.3m Evli/consensus estimates. The figure includes EUR 14.6m in
   invoicing of spot market purchases.
 * Advanced Consumer Applications amounted to EUR 56.3m vs our EUR 59.8m
   estimate, while Energy & Cleantech was EUR 61.3m, compared to our EUR 60.3m
   estimate. Automation & Safety was EUR 51.4m vs our EUR 46.0m estimate.
 * EBIT landed at EUR 13.4m vs the EUR 12.8m/12.5m Evli/consensus estimates and
   hence EBIT margin amounted to 6%. FX rate changes had a positive impact of
   EUR 0.3m. Continued good customer demand and improved manufacturing
   performance (due to better component availability) supported profitability to
   a high absolute level, whereas spot market purchases with negligible margin
   limited operating margin.
 * The BoD proposes EUR 0.21 per share dividend to be distributed for the year,
   compared to the EUR 0.20/0.20 Evli/consensus estimates.
 * Scanfil guides FY ’23 revenue to be in the range of EUR 820-890m and EBIT of
   EUR 49-55m. The number of spot market purchases is likely to decrease
   significantly compared to previous year.

Open report


EXEL COMPOSITES - DEMAND PICKS UP TOWARDS YEAR’S END

20.02.2023 - 09.35 | Company update

Exel’s Q4 figures missed estimates as demand was still softer than expected.
H1’23 results are likely to remain modest relative to the high comparison
period, but guidance indicates at least some improvement for H2’23.

Read more

Heady growth continued in H1’22, but H2’22 was slower

Exel’s Q4 revenue landed at EUR 31m vs the EUR 36m/35m Evli/cons. estimates.
Destocking, after a period of high demand following the initial shock of the
pandemic, has been an issue lately and is expected to continue in H1’23.
Equipment and other industries, the third largest customer group, was
particularly soft relative to our estimates but there seems to have been nothing
special going on apart from the destocking issues as well as normal cyclicality.
The soft top line left adj. EBIT at EUR 0.9m vs the EUR 2.4m/2.0m Evli/cons.
estimates.

H1’23 will still be soft; guidance suggests better H2’23

Exel sees improvement from Q2 in orders as well as EBIT; top line is to remain
flat this year, while EBIT has ground from which to gain. The Runcorn cuts
should produce EUR 1.6m in annual savings. Inflation hasn’t been a big issue for
Exel and raw materials are stabilizing. Wind power should again grow, according
to Exel, at a 15% y/y pace from H2’23. Wind power was Exel’s largest customer in
2019-20 and continued to grow at a CAGR of 16.5% in FY ’20-21, however its
revenue fell by EUR 5.3m last year and was overtaken by Buildings and
infrastructure already in 2021. Exel got its challenges in the US sorted out
last year, but the relative softness in the three largest customer groups left
its adj. EBIT for the year at EUR 8.0m (we consider it a modest level). We note
the four smaller industries together grew by 19% last year, although this was
mostly attributable to Transportation as it enjoyed pent-up demand after the
pandemic and received initial orders for a new aerospace application.

Valuation is not challenging if growth returns in H2’23

Exel is valued 9.5x EV/EBIT on our FY ’23 estimates, which we consider a neutral
level. The multiple is not very low, however we estimate an EBIT margin of 6.3%
for the year whereas the company should still be on track towards its long-term
10% target (it reached almost 9% in FY ’20). For FY ’24 we estimate 7% growth
and 7.5% EBIT margin, which would translate to an EV/EBIT of 7.5x. Our new TP is
EUR 5.8 (6.5); our rating is BUY.

Open report


ETTEPLAN - LOOKING QUITE GOOD DESPITE HEADWINDS

20.02.2023 - 09.35 | Company update

Despite a below expectations Q4, at least partly due to increased
sickness-related absences, we see slightly improving expectations for 2023. We
adjust our target price to EUR 16.0 (15.0), HOLD-rating intact.

Read more

Q4 fell short of expectations
Etteplan reported Q4 results below expectations. Revenue grew 6.8% (organic
1.0%, org. const. FX 2.8%) to EUR 91.0m (EUR 99.0m/98.0m Evli/cons.) while EBIT
came in at EUR 8.4m (EUR 8.9m/9.0m Evli/cons.). Growth was affected by a high
level of sickness-related absences. On a service area level Engineering
solutions continued solid performance. Software and Embedded Solutions saw good
improvements in profitability from actions previously taken to enhance
operational efficiency. Technical Documentation Solutions saw lower
profitability due to below expectations performance of the in 2022 acquired
Cognitas. The BoD proposed a dividend of EUR 0.36 (0.32/0.34 Evli cons.). 

2023 expectations rather decent despite headwinds 
Considering the below expectations Q4, Etteplan’s 2023 revenue guidance (EUR
360-390m) is slightly better than we expected, with our pre-Q4 estimates at the
guidance range mid-point. The EBIT guidance of EUR 28-33m was slightly below
expectations on the mid-point. Our 2023 estimates are essentially unchanged,
revenue expectations at EUR 375.3m and EBIT at EUR 31.5m. Margins are under
pressure through wage inflation, but we continue to earnings improvement
potential through improved operational efficiency in Software and Embedded
Solutions and Technical Documentation Solutions while also assuming decent
prerequisites to transfer inflation to prices. Further M&A activity also
provides good potential for more rapid growth.

HOLD with a target price of EUR 16.0 (15.0)
Despite elevated uncertainty and cost inflation and a more recent slow-down in
recruitments having an impact, the outlook going forward still generally appears
quite favourable and Etteplan further noted a positive development direction of
market sentiment. We adjust our TP to EUR 16.0 (15.0), valuing Etteplan at ~17x
2023e P/E, HOLD-rating intact. 

Open report


PIHLAJALINNA - EARNINGS TO GAIN FROM A LOW BASE

20.02.2023 - 09.05 | Company update

Pihlajalinna’s profitability challenges continued to be way worse in Q4 than
estimated. The company has many tools to address the issue. Gains are very
likely this year due to the low comparison figures (and measures), but valuation
now appears neutral from a short-term perspective.

Read more

Q4 was still plagued by many profitability-hurting issues

Pihlajalinna’s top line continued to grow at an annual rate of 22% in Q4;
organic growth remained above 7% even with the headwind from lower Covid-19
services revenue. The lack of such services was one factor limiting
profitability, in addition to continued high absence costs as well as public
specialty care costs which were now tilted towards Q4. Employee benefit expenses
were especially high. Key profit measures missed estimates by EUR 7m.
Pihlajalinna guides increasing revenue (we estimate 3% growth) and improving
adj. EBITA for the year. Last year involved a lot of transient cost factors, but
the company also takes many measures to address the profitability challenge.

H2’23 should see meaningful earnings growth

Pihlajalinna has gone through a similar exercise in 2019. The company looks to
e.g. cut physicians’ administrative roles and prune its service network. Price
increases are to come in at 5-10%, especially within the private sphere while
public contracts are also under review. The company’s financial headroom is now
tight, but it stays within its covenant terms and doesn’t pay dividend for the
year. We cut our FY ’23 EBIT estimate by EUR 5m but estimate EUR 12m EBITA
improvement for the year.

At least the first quarters now seem to lack upside drivers

Valuation isn’t too cheap despite the profitability gains which are to be seen
this year. The 19x EV/EBIT valuation, on our FY ’23 estimates, is neutral at
best as it is in line or even slightly above that of peers. For FY ’24 we
estimate an EBIT margin of 5.4% (some 100bps gain y/y), which may well prove too
conservative, but the respective 14x multiple is still no more attractive than
peer multiples. Pihlajalinna’s profitability measures are more likely than not
to drive upside over the longer perspective, but in our view the share lacks
material upside drivers from a short-term perspective. Pihlajalinna could
specify its guidance upwards later this year, which would be one such driver. We
revise our TP to EUR 9.0 (10.0); our new rating is HOLD (BUY).

Open report


ETTEPLAN - GUIDANCE QUITE DECENT

17.02.2023 - 09.35

Etteplan's net sales in Q4 amounted to EUR 91.0m, below our estimates and below
consensus (EUR 99.0m/98.0m Evli/cons.). EBIT amounted to EUR 8.4m, below our
estimates and below consensus (EUR 8.9m/9.0m Evli/cons.). Dividend proposal:
Etteplan proposes a dividend of EUR 0.36 per share (EUR 0.32/0.34 Evli/Cons.).

Read more

 * Net sales in Q4 were EUR 91.0m (EUR 85.3m in Q4/21), below our and consensus
   estimates (EUR 99.0m/98.0m Evli/Cons.). Growth in Q4 amounted to 7% y/y, of
   which 1% organic growth.
 * EBIT in Q4 amounted to EUR 8.4m (EUR 7.8m in Q4/21), below our and consensus
   estimates (EUR 8.9m/9.0m Evli/cons.), at a margin of 9.2%.
 * EPS in Q4 amounted to EUR 0.30 (EUR 0.25 in Q4/21), above our estimates and
   consensus estimates (EUR 0.21/0.27 Evli/cons.).
 * Net sales in Engineering Solutions in Q4 were EUR 48.9m vs. EUR 50.6m Evli.
   EBITA in Q4 amounted to EUR 5.3m vs. EUR 5.3m Evli. 
 * Net sales in Software and Embedded Solutions in Q4 were EUR 24.3m vs. EUR
   28.8m Evli. EBITA in Q4 amounted to EUR 2.8m vs. EUR 3.1m Evli. 
 * Net sales in Technical Documentation Solutions in Q4 were EUR 17.7m vs. EUR
   19.4m Evli. EBITA in Q4 amounted to EUR 1.4m vs. EUR 2.0m Evli. 
 * Dividend proposal: Etteplan proposes a dividend of EUR 0.36 per share (EUR
   0.32/0.34 Evli/Cons.).
 * Guidance for 2023: Revenue is estimated to be EUR 360-390m (Evli EUR 375.8m)
   and the operating profit is estimated to be EUR 28-33m (Evli EUR 31.4m)

Open report


EXEL COMPOSITES - Q4 FIGURES MISSED ESTIMATES

17.02.2023 - 09.30 | Earnings Flash

Exel’s Q4 figures missed our and consensus estimates. Top line declined as there
was temporary softness in e.g. wind power orders. Cost management helped
profitability remain flat y/y. Exel guides flat revenue for the year and expects
adjusted EBIT to increase.

Read more

 * Q4 revenue decreased by 15% y/y to EUR 31.0m, compared to the EUR 36.3m/35.0m
   Evli/consensus estimates. All geographical regions declined y/y, particularly
   North America.
 * Wind power amounted to EUR 5.5m vs our EUR 7.2m estimate. Buildings and
   infrastructure came in at EUR 8.1m, compared to our EUR 7.8m estimate,
   whereas Equipment and other industries totaled EUR 4.3m vs our EUR 7.3m
   estimate. Machinery and electrical as well as Transportation grew y/y.
 * Adjusted EBIT was EUR 0.9m, compared to the EUR 2.4m/2.0m Evli/consensus
   estimates. Absolute profitability and operating margin hence remained roughly
   flat y/y as good cost management compensated for lower revenue.
 * Order intake amounted to EUR 25.6m in Q4, in other words decreased by 16%
   y/y.
 * The BoD proposes EUR 0.20 per share dividend to be distributed for the year,
   compared to the EUR 0.25/0.23 Evli/consensus estimates.
 * Exel guides FY ’23 revenue to be at last year’s level and adjusted EBIT to
   increase compared to last year. Wind power particularly should support
   development during the latter part of the year.

Open report


SOLTEQ - FINANCIAL GAP YEAR AHEAD

17.02.2023 - 09.00 | Company update

Solteq’s Q4 results were below our expectations, and the 2023 guidance appears
softer than we had anticipated. We see the long-term investment case intact
despite an incoming year of subpar performance.

Read more

Challenges visible in Q4
Solteq reported Q4 results below our expectations. Net sales in Q4 were EUR
16.9m (Evli EUR 17.4m), declining 7.5% y/y. The operating profit and adj.
operating profit in Q4 amounted to EUR -1.2m and -0.8m respectively (Evli EUR
0.7m/0.7m). Solteq Digital’s performance was fairly in line with expectations,
with a y/y decline in revenue and profitability. Solteq Software’s profitability
was clearly below expectations, with an adj. EBIT of EUR -1.3m (Evli EUR 0.0m).
The segment has been burdened by challenges in Solteq Utilities’ software
development and we had evidently underestimated the magnitude of the impact on
Q4. Solteq’s BoD as expected proposed that no dividend be paid. 

Guidance for 2023 softer than anticipated
Solteq’s 2023 guidance is soft in comparison with our pre-Q4 estimates,
expecting revenue to remain on 2022 levels and EBIT to be positive. Solteq has
typically not given numerical guidance ranges, which leaves room for speculation
regarding profitability, but with the expected flat revenue development and cost
pressure caused by inflation we now expect EBIT to be only slightly positive at
EUR 0.8m. We expect the challenges faced in Solteq Software to continue during
H1/23 and gradual improvement through the year, and the headwinds faced in
Solteq Digital through the market demand situation to continue to have a slight
negative effect.  

HOLD with a target price of EUR 1.3
Despite the weaker than expected Q4 and softer than anticipated expectations in
2023 we see no fundamental changes to the investment case. Financially 2023 will
clearly be a gap year on group level. Upside continues to lie in the long-term
development and success of profitably growing the Utilities-business and of
interest for the investment case in the near-term will be the development of
said business. 

Open report


PIHLAJALINNA - PROFITABILITY TOOK A BIG HIT

17.02.2023 - 08.30 | Earnings Flash

Pihlajalinna’s Q4 report was a clear disappointment in terms of profitability
even after the guidance downgrade late last year. The culprits for low
profitability have been discussed many times, but their adverse impacts on Q4
bottom line were clearly larger than estimated.

Read more

 * Q4 revenue grew by 21.8% y/y to EUR 188.4m vs the EUR 177.8m/179.1m
   Evli/consensus estimates. Organic growth was 7.4% and would have been 12.1%
   without Covid-19 services. Corporate customers amounted to EUR 65.1m,
   compared to the EUR 59.0m/58.6m Evli/consensus estimates. Private customers
   were EUR 28.3m vs the EUR 26.3m/26.9m Evli/consensus estimates, while Public
   sector customers totaled EUR 113.9m vs the EUR 112.4m/112.2m Evli/consensus
   estimates.
 * Covid-19 services revenue was EUR 2.8m, down by EUR 7.3m y/y.
 * Adjusted EBITDA amounted to EUR 12.0m, compared to the EUR 17.5m/18.5m
   Evli/consensus estimates. Adjusted EBITA was EUR 2.2m vs our EUR 9.0m
   estimate, while adjusted EBIT was EUR 0.1m vs the EUR 7.0m/7.0m
   Evli/consensus estimates. Employee benefit expenses were exceptionally high
   in Q4.
 * The BoD proposes no dividend distribution for the year vs the EUR 0.25/0.24
   Evli/consensus estimates.
 * Pihlajalinna guides revenue to increase (EUR 690.5m in 2022) and adjusted
   EBITA to improve (EUR 26.7m in 2022) in FY ‘23.

Open report


VAISALA - UNDERLYING DEMAND CONTINUES STRONG

17.02.2023 - 07.45 | Company update

Vaisala delivered strong topline growth in Q4. Orders received and order book
increased by double-digits which provides a firm foundation for 2023. The
company guides solid growth and clear EBIT improvement for 2023. With adjusted
estimates, we raise our TP to EUR 44.0 (41.0). Our rating remains at HOLD,
reflecting a neutral valuation.

Read more

Topline came in above expectations
In Q4, Vaisala grew by 13% (FX adjusted 8%) y/y to EUR 141.6m. The growth was
supported by IM’s all segments and W&E’s aviation and meteorology. Spot
component purchases continued, but the group gross margin remained flat. With
relatively high growth in fixed costs, EBIT fell short of expectations. Q4 EBIT
amounted to EUR 12.6m, reflecting a margin of 8.9%. Vaisala expects the
component availability to neutralize during H1’23, and there have emerged signs
of improvements already. In our view, this should result in an improved gross
margin from H2’23 onwards. For 2022, the BoD proposes a DPS of 0.72.

The hot market supports demand also during 2023-24
Underlying megatrends provide continuity for Vaisala’s growth story. In
addition, the company has made the right decisions during the past few years in
our view, which has resulted in an expansion of market share. For example,
investments in digital and renewable businesses have boosted W&E’s topline and
we foresee that earlier-known steadily growing and somewhat cyclical business
becomes more resilient to economic fluctuation. Moreover, with higher product
margins, we see some room for profitability improvement. In addition, the
company never halted R&D investments during the hardest times of COVID which
enhanced Vaisala’s technology leadership position in our view. Vaisala has also
benefitted from pent-up demand due to the pandemic which however likely fades
away. In other words, achieving annual double-digit growth becomes even harder.
We however see Vaisala as an attractive investment case with coming scalability
providing EPS growth.

HOLD with a target price of EUR 44.0
With estimate revisions made, our 23E EBIT saw a 5% increase. Vaisala trades
approx. in line with its peers. We retain the HOLD rating and adjust TP to EUR
44.0 (41.0), reflecting increased 23-24E estimates. 

Open report


FELLOW BANK - HEAVY LIFTING DONE, TIME TO SCALE

17.02.2023 - 07.45 | Company update

Fellow Bank’s outlook for 2023 remains quite good and we expect continued growth
and positive profitability to be achieved. We retain our TP of EUR 0.40 and
HOLD-rating.

Read more

H2 all in all slightly below our expectations
Fellow Bank’s H2 results came in slightly below our expectations. Total income
amounted to EUR 7.9m (Evli EUR 7.1m). Net income of EUR 6.6m was quite in line
with expectations (Evli EUR 6.8m), while net fee and commission income of EUR
1.5m beat our expectations (Evli EUR 0.3m), affected by changes to recognition
of commission fees under IFRS 15. The pre-tax profit during H2 amounted to EUR
-2.3m (Evli EUR -0.7m), with the difference compared with our estimates arising
mainly from larger than estimated expected and realized credit losses, with
total OPEX also above our estimates. OPEX was still affected by exceptional
items relating to the startup of operations of some EUR 0.7m. The total capital
ratio amounted to 16.8% (target adjusted: 18% -> 16%) and H2 cost / income ratio
to 76%. 

Growth and positive profitability expected in 2023
Fellow Bank expects revenues to grow in 2023 and to achieve a positive profit
level on a monthly basis during H1/2023. The market environment poses some
threats to lending volume growth, with Fellow Bank having adopted somewhat
stricter lending policies. We currently nonetheless expect solid y/y growth in
2023 mainly driven by the ramp-up focused comparison period but also good loan
portfolio growth. We have further raised our 2023e PTP estimate to EUR 2.9m
(1.8m) following a readjustment of the cost base assumptions. We expect 2023 to
be quite busy for Fellow Bank with the launch and ramp up of new services. The
company’s small business in Poland is also most likely to be divested and the
further strengthening of the company’s capital is to be expected.  

HOLD with a target price of EUR 0.40
Valuation upside continues to remain limited in the near-term, affected further
by some market uncertainties and on 2024 estimates, compared with peer
multiples, current valuation levels appear fair. We retain our TP of EUR 0.40
and HOLD-rating.

Open report


MARIMEKKO - SLIGHT UNCERTAINTY VISIBLE, BUT GROWTH CONTINUES

17.02.2023 - 07.05 | Company update

Marimekko delivered solid Q4 figures despite a challenging domestic market.
Q1’23 seems to continue soft in Finland, but on a group level, the company
expects to see growth in 2023. We retain our HOLD rating and TP of EUR 10.0.

Read more

Q4 EBIT came in above expectations
Marimekko delivered solid Q4 figures, especially considering the soft domestic
wholesale market and strong comparison figures. Q4 net sales grew by 1% y/y to
EUR 48.4m. The growth was mostly supported by int’l markets while sales in
Finland declined by 2% due to lower non-recurring wholesale deliveries.
Moreover, domestic wholesale customers experienced softness which was visible
also in Marimekko’s Q4 net sales. Higher discounts and lower licensing income
pushed the gross margin below the comparison period. In addition, Marimekko
accordingly continued its investments in future growth and scalability which
resulted in elevated fixed costs. Thus, EBIT fell short of the comparison period
but landed above our expectations. Q4 adj. EBIT amounted to EUR 6.9m (8.9%
margin). The BoD proposes a DPS of EUR 0.34 for 2022.

A strong brand provides growth in a challenging market
Finland discovered some softness in Q4 which we expect to continue also in
Q1’23. The company guides 2023 revenue to grow and an EBIT margin between 16-19%
(22: 18.2%). In our view, strong retail growth in 2022 reflects the power of the
Marimekko brand and its capability to deliver growth also in a challenging
market. In addition, non-recurring wholesale deliveries will support H2 growth
in Finland. However, we foresee the growth pace to slow down from levels seen
during the past few years. We expect Marimekko to grow by 5.3% in 2023, with
domestic growth of 6% and int’l increase of 5%. With 23E gross margin flat and
cost pressures arising from fixed costs, we expect no major expansion in 23E
EBIT margin, with it amounting to 18.3%.

HOLD with a target price of EUR 10.0
We made no major changes in our estimates with the company’s guidance coming in
quite in line with our expectations. The company’s 23-24E valuation seems quite
modest compared to history and peers, but with uncertainty elevated, we retain
our HOLD rating and TP of EUR 10.0. On the other hand, a subdued growth pace
also justifies lower multiples.

Open report


VAISALA - NET SALES CAME IN STRONG, EBIT BELOW EXPECTATIONS

16.02.2023 - 09.45 | Earnings Flash

Vaisala posted Q4 net sales roughly in line with our estimates. Orders continued
in a trend of growth. EBIT however came in below our expectations with higher
fixed costs. Guidance implies growth to continue also in 2023.

Read more

 * Group result: Order received continued in a growing trend with y/y increase
   of 17%. Order book was strong at EUR 181.5m, but declined q/q. Driven by both
   businesses, net sales topped our estimates, by increasing by 13% to EUR
   141.6m (140.0/139.0m Evli/cons.). Gross margin remained flat. With volumes
   high, EBIT also improved to EUR 12.6m, but fell short of our and cons.
   estimates (15.2/18.3m Evli/cons.). Profitability was harmed by higher fixed
   costs. EBIT margin was 8.9% (Q4’21: 9.5%). EPS amounted to EUR 0.25 (0.3/0.42
   Evli/cons.).
 * Industrial measurements (IM): Orders received increased by 11%. Order book
   was yet again record high, at EUR 41.8m. 27% y/y growth in order book was
   supported by good sales in industrial instruments, life science, and power.
   Net sales amounted to EUR 60.2m (Evli: 61.4m), representing y/y growth of
   20%. Growth was good in all market segments. Q4 EBIT improved and amounted to
   EUR 10.8m (Evli: 12.6m), reflecting a margin of 17.9%.
 * Weather and Environment (W&E): Orders received grew strongly by 24%. Order
   book was also strong, at EUR 139.6m, but below Q3’22. 10% y/y change in order
   book was driven by renewable energy and road weather. Net sales amounted to
   EUR 81.3m (Evli: 78.6m) and grew by 9% y/y. EBIT amounted to EUR 1.8m (Evli:
   2.7m) and was affected by higher fixed costs. EBIT margin was 2.2%.
 * 22 DPS: The BoD proposes EUR 0.72 (0.7/0.71 Evli/cons.) dividend per share
   for FY’22 with a payout rate of ~60%.
 * Market outlook: Industrial instruments, life science, power and energy and
   liquid measurements to grow. Renewable energy, road weather and automotive to
   grow. Aviation to remain flat or grow. Meteorology to remain flat.
 * 23 guidance: Net sales of EUR 530-570m, mid-point implying ~7% growth. EBIT
   is estimated to reach EUR 70-85m, mid-point indicating a ~14% margin.

Open report


FELLOW BANK - EARNINGS BELOW EXPECTATIONS

16.02.2023 - 09.35 | Earnings Flash

Fellow Bank’s top line figures were better than expected, while higher than
expected opex and expected and realized credit losses saw earnings fall below
our expectations. Positive profit levels on a monthly basis are expected to be
reached during H1/2023.

Read more

 * Total income during H2/22 amounted to EUR 7.9m (Evli EUR 7.1m). Net interest
   income amounted to EUR 6.6m (Evli EUR 6.8m) and net fee and commission income
   to EUR 1.5m (Evli EUR 0.3m). 
 * In H2 lending volumes exceeded those of H1 by 43% and the target increase of
   46% in the loan portfolio for personal customers was reached. 
 * The loan portfolio at the end H2 amounted to EUR 163.8m and the deposit
   amounted to EUR 246.8m.
 * The pre-tax profit during H2 amounted to EUR -2.3m (Evli EUR -0.7m). The
   difference compared with our estimates was mainly due to a larger than
   estimated expected and realized credit losses, with total OPEX also above our
   estimates.
 * Earnings per share amounted to EUR -0.03 compared with our estimate of EUR
   -0.01.
 * CET1 and the CET1 ratio amounted to EUR 17.7m and 12.6% and total capital
   ratio to 16.8% 
 * The cost / income ratio amounted to 113%.
 * Outlook for 2023: The bank’s revenues are estimated to grow from 2022 and a
   positive profit level on a monthly basis is estimated to be reached during
   H1/2023. Capital adequacy target set at 16%.
 * Dividend proposal: The BoD proposes that no dividends be paid (Evli EUR 0.00)

Open report


ENDOMINES - IMPORTANT YEAR AHEAD

16.02.2023 - 09.30 | Company update

Endomines volumes and revenue for H2 2022 were in line with our estimates yet
the profitability was weaker than expected. The company anticipates a
significant improvement in its financial performance in 2023 compared to 2022.

Read more

Volumes developed as expected

Revenue in H2 amounted to EUR 7.9m, roughly in line with our estimate of EUR
8.1m. Gold production amounted to 5,123 oz vs. our estimate of 5,402 oz. Both
EBITDA & EBIT missed our estimate as EBITDA for H2 2022 came at EUR -3.0 (Evli
EUR 0.6m) and EBIT at EUR -5.4m (Evli EUR -0.8m). The second half of the year
was negatively affected especially by increased cost of raw materials and
energy. The second half was also negatively affected by non-recurring costs
related to the transfer of domicile from Sweden to Finland.

 

2023 is an important year for the company

Endomines focused on building the foundation for its strategy implementation
during the second half of 2022. In 2023, the company aims to build on this
foundation and start to implement its strategy on a wider scale. In our view,
the most important operational factors for the company in 2023 include improved
mining operations in Pampalo, exploration activities in the Karelian gold line
and the partnership negotiations in the United States.

 

HOLD with a target price of EUR 6.5

We have done slight adjustments to our estimates for the Pampalo mining
operations as the company’s expectations for 2023 were slightly stronger than we
had earlier estimated. We currently include only reserves and resources between
the 755-815 and 815-875 levels in Pampalo to our estimates and therefore we do
not estimate production post 2024. In our SOTP valuation approach, the rest of
the value for the company’s operations in Finland is derived from a real option
model which considers the possibility of Pampalo LoM increase and the
possibility for the utilization of Karelian gold line satellite deposits.
Despite the cautiously positive outlook for 2023, we still see uncertainty
regarding the successfulness of the company’s exploration activities and the
value realization of the US assets. We retain our HOLD-rating and TP of EUR 6.5.

Open report


ASPO - SOME SOFTENING AFTER A RECORD YEAR

16.02.2023 - 09.30 | Company update

Aspo’s Q4 didn’t hold big news, however the segments’ EBIT paths may diverge a
bit this year after a very strong FY ’22.

Read more

ESL and Leipurin topped our estimates, while Telko was soft

Aspo’s Q4 revenue landed at EUR 165m, compared to the EUR 157m/158m Evli/cons.
estimates, while adj. EBIT was EUR 11.3m vs the EUR 12.1m/11.7m Evli/cons.
estimates. The figures were hence overall relatively close to estimates, however
Telko’s profitability was clearly below what we estimated whereas ESL and
Leipurin were both somewhat better. Telko saw certain positive developments in
Q4 as strong Western demand drove higher volumes organically and through
acquisitions; lubricants also fared well, but plastics and chemicals prices
decreased, in addition to which the challenging operating environment in
Ukraine, Russia and Belarus limited profitability.

We already expected considerable EBIT decline for Telko

In our view Telko’s EBIT should begin to stabilize in H1’23 but will not reach
the EUR 21m EBIT seen in recent years anytime soon. Aspo’s guidance doesn’t seem
to set the bar for Telko very high, which in our view reflects the still highly
uncertain environment for pricing and volumes. We previously expected Telko’s FY
’23 EBIT to decline some EUR 10m, and we now estimate the decline at EUR 11.5m.
ESL’s outlook remains stable, at least for Q1 when the Supramaxes are still
employed with good price levels, but it’s early to say how they might fare in
H2’23. Smaller vessels should still have no trouble achieving highly
satisfactory results, yet it may be hard to gain on last year. We expect ESL’s
EBIT to decline a bit this year, but some of the new hybrid vessels are due to
be delivered soon and hence EBIT should find further support even in the case of
extended pricing headwinds. The Kobia acquisition’s synergies weren’t yet
reflected last year, and hence we expect Leipurin EBIT to increase this year
even if inflation and volume trends set some limits to organic development.

Valuation not challenging despite EBIT softness this year

Aspo is valued ca. 9x EV/EBIT on our FY ’23 estimates, which we see reflects
relatively low valuation for ESL. An EV/EBIT multiple of 10x could be justified
for the niche carrier as Algoma Central, arguably the most relevant peer, is
valued above 10x as it derives a big share of its earnings through small dry
bulk vessels around the Great Lakes region. We retain our EUR 9.5 TP and BUY
rating.

Open report


FINNAIR - COMING THROUGH THE STORM

16.02.2023 - 09.00 | Company update

Finnair’s Q4 report was a bit better than expected, however we see current
valuation limiting upside potential too much unless more positive surprises are
yet to come.

Read more

Q4 report a bit better than expected but nothing major

Finnair’s EUR 687m Q4 revenue was near the EUR 679m/681m Evli/cons. estimates as
passenger revenues were some EUR 20m higher than we estimated (ancillary and
cargo were a bit soft relative to what we expected). Finnair’s Q4’22 saw 79% of
ASK relative to Q4’19, including wet leases, as demand stays high. Fuel prices
remained high in the historical context, a crucial factor limiting EBIT when
Finnair still missed major volumes due to the recent years’ double whammy.
Finnair achieved another positive adj. EBIT, at EUR 17.9m vs the EUR 13.5m/2.7m
Evli/cons. estimates, as unit yields continued to advance. Prices should hold up
also in Q1 and beyond as demand persists despite potential economic headwinds.
We didn’t find any big surprises in terms of cost inflation, but the topic
remains very much on the agenda as Finnair continues to proceed towards its 5%
EBIT margin target.

Volumes and pricing support profitability development

There are still uncertainties around Chinese demand in particular; from
Finnair’s point of view the focus now rests much on Shanghai and Beijing, as
opposed to any secondary Chinese cities. Finnair has extended its wet leases,
and dynamic pricing has helped unit revenues increase by 25%; ancillary revenue
per passenger also increased by 13% compared to 2019. Hence Finnair’s revenue
will increase significantly this year, but we expect it to remain 10% short of
that for FY ’19. We believe Q1’23 EBIT will be negative as the market has
recovered enough so that certain seasonal patterns can again be seen, but for FY
’23 we estimate a positive EBIT of EUR 105m.

Coming through, but most good news seem to be priced in

In our view Finnair is set to achieve a positive EBIT this year, and the
positive development should continue in FY ’24, but the company’s profitability
continues to lag other airlines. Finnair is valued about 16x and 10x EV/EBIT on
our FY ’23-24 estimates, which are levels well above peers’. We see Finnair’s
recovery already priced in and hence upside would probably require more than one
factor to deliver a positive surprise. We update our TP to EUR 0.47 (0.45) but
retain our SELL rating.

Open report


MARIMEKKO - SOLID EBIT DESPITE CHALLENGING MARKET

16.02.2023 - 08.50 | Earnings Flash

Marimekko’s Q4 net sales came in below our expectations while EBIT was stronger
than expected. Guidance for 2023 implies growth to continue and profitability to
remain on a good level. However, soft market is expected to continue also in
Q1’23 in Finland.

Read more

 * Q4 group result: Net sales came in below our expectation, by growing by 1% y/
   to EUR 48.4m (49.4/48.9m Evli/cons.). Growth was good in int’l markets while
   domestic sales declined as expected. Adj. EBIT landed at EUR 6.9m (14.3%
   margin), beating our and cons. expectations (6.4/6.5m Evli/cons.). Although,
   profitability was negatively impacted by softer gross margin and increased
   fixed costs.  Adj. EPS amounted to EUR 0.10 (0.13/0.13 Evli/cons.).
 * Finland: Net sales amounted to EUR 30.1m (Evli: 29.6m), reflecting y/y
   decline of 2%. Retail sales developed nicely by growing by 19% y/y while
   wholesale sales fell short of the comparison period due to a lack of
   extraordinary deliveries and soft market environment.
 * Int’l: Net sales grew by 5% to EUR 18.4m (Evli: 19.8m). Growth was good in
   the APAC and EMEA regions while Scandinavia and North America developed more
   moderately.
 * 22 DPS: The BoD proposes EUR 0.34 dividend per share for the year 2022
   (0.38/0.41 Evli/cons.).
 * Market outlook for 23: The company expects Finland to grow with larger
   extraordinary wholesale sales deliveries than in 2022 as well as both the
   APAC region and int’l sales to grow. Q1’23 group net sales to fall short of
   that of the comparison period due to challenging wholesale environment in
   Finland, lower licensing sales and strong comparison period. 2023 licensing
   income is expected to come in below the comparison period.
 * 23 guidance: The company expects net sales to grow and an EBIT margin between
   16-19%.

Open report


SOLTEQ - CHALLENGES VISIBLE IN EARNINGS

16.02.2023 - 08.30 | Earnings Flash

Solteq’s Q4 results were weak and below our expectations, with revenue at EUR
16.9m (Evli EUR 17.4m) and adj. EBIT at EUR -0.8m (Evli EUR 0.7m), with the
earlier noted challenges having a larger than anticipated impact. 2023 guidance
is below our expectations, with revenue expected to remain at 2022 levels and
EBIT to be positive.

Read more

 * Net sales in Q4 were EUR 16.9m (EUR 18.3m in Q4/21), slightly below our
   estimates (Evli EUR 17.4m). Growth in Q4 amounted to -7.5% y/y. 
 * The operating profit and adj. operating profit in Q4 amounted to EUR -1.2m
   and -0.8m respectively (EUR 1.3m/1.4m in Q4/21), below our estimates (Evli
   EUR 0.7m/0.7m). 
 * Q4 challenges relates to earlier communicated challenges in Solteq Utilities’
   software development and a weakened demand situation. 
 * Solteq Digital: revenue in Q4 amounted to EUR 10.3m (Q4/21: EUR 11.7m) vs.
   Evli EUR 10.8m. Growth amounted to -11.9%. The adj. EBIT was EUR 0.5m (Q4/21:
   EUR 1.4m) vs. Evli EUR 0.7m. 
 * Solteq Software: Revenue in Q4 amounted to EUR 6.6m (Q4/21: EUR 6.6m) vs.
   Evli EUR 6.6m. The adj. EBIT was EUR -1.3m (Q4/21: EUR -0.0m) vs. Evli EUR
   0.0m. 
 * Guidance for 2023: group revenue is expected to remain at same levels as in
   2022 and operating profit to be positive.
 * Dividend proposal: Solteq’s BoD proposes than no dividend be paid (Evli EUR
   0.00)

Open report


ENDOMINES - PRODUCTION DEVELOPING AS EXPECTED

15.02.2023 - 14.40 | Earnings Flash

The production ramp-up in Pampalo developed as expected during H2 2022, although
profitability was impacted by cost inflation, which is anticipated to ease next
year in 2023. Endomines anticipates a significant improvement in its financial
performance in 2023 compared to 2022 driven by higher volumes, easing cost
inflation and positive development of the price of gold.

Read more

 * Revenue in H2 amounted to EUR 7.9m, roughly in line with our estimate of EUR
   8.1m. Gold production amounted to 5,123 oz vs our estimate of 5,402 oz.
 * EBITDA in H2 was at EUR -3.0, lower than our estimate of EUR 0.6m. 
 * EBIT in H2 amounted to EUR -5.4m (Evli EUR -0.8m)
 * During H2, at Pampalo, gold production increased by 47% when comparing to H1.
   FY production came in at 8,601 oz, slightly lower than the middle point of
   2022 FY guidance of roughly 8000 – 9400 Oz.
 * Profitability in H2 2022 was affected by cost inflation and non-recurring
   costs related to the transfer of domicile from Sweden to Finland
 * For 2023, the company expects gold production of roughly 11,600 – 13,300 Oz,
   our estimate for 2023 gold production is currently at 11,693 Oz.
 * In terms of profitability, Endomines expects its financial performance to
   improve considerably from 2022 driven by lower energy prices, positive
   development of gold prices, lower production costs especially during H2 2023
   and higher volumes.

Open report


ASPO - RELATIVELY NEAR ESTIMATES

15.02.2023 - 10.00 | Earnings Flash

Aspo’s Q4 results landed relatively close to estimates. ESL once again produced
very high profitability, and outlook continues to be strong, while Telko’s
profitability has decreased considerably after H1’22.

Read more

 * Aspo Q4 revenue amounted to EUR 164.6m, compared to the EUR 156.6m/157.6m
   Evli/consensus estimates.
 * Adjusted EBIT was EUR 11.3m vs the EUR 12.1m/11.7m Evli/consensus estimates.
 * ESL Q4 top line was EUR 63.3m vs our EUR 66.1m estimate. Adjusted EBIT
   amounted to EUR 10.6m, compared to our EUR 9.6m estimate. Energy industry
   cargo demand was especially high and should remain so in H1. ESL’s main
   customers’ production volumes are expected to be satisfactory, albeit
   slightly lower than previous year.
 * Telko’s revenue was EUR 59.2m, compared to our EUR 52.7m estimate, while
   adjusted EBIT landed at EUR 1.3m vs our EUR 3.3m estimate. Telko’s net sales
   and profit will be significantly lower in FY ’23 than the previous year.
   Plastics and chemicals prices decreased steeply in H2’22 while still above
   their long-term averages. Some soft price development may continue in H1’23.
 * Leipurin revenue came in at EUR 41.3m vs our EUR 37.8m estimate. EBIT was EUR
   1.1m vs our EUR 0.7m estimate.
 * Other operations cost EUR 1.8m, compared to our EUR 1.5m estimate.
 * The BoD proposes EUR 0.46 dividend per share to be paid for the year,
   compared to the EUR 0.46/0.46 Evli/consensus estimates.
 * Aspo guides comparable EBIT to be higher than EUR 35m in FY ’23 (EUR 55.3m in
   FY ’22).

Open report


ETTEPLAN - MARKET OUTLOOK UNCERTAINTIES

15.02.2023 - 09.35 | Preview

Etteplan reports its Q4 results on February 17th. Sights are already set on the
outlook for 2023, with our expectations being on a notable y/y slow-down in
growth.

Read more

Expecting good progress in 2022 to show also in Q4
Etteplan reports its Q4 results on February 17th. Operative performance during
the year has so far been fairly solid and we expect the Q4 results to follow
suite. Our estimates for revenue and EBIT are EUR 99.0m and EUR 8.9m
respectively, with the implied Q4 guidance EUR 86-101m and EUR 7.8-10.8m
respectively. Some risks to Q4 growth are posed by more conservative recruitment
measures implemented in Q3 and the overall demand situation, although we expect
the impact of the former to be more visible in 2023. We expect dividends to
decrease y/y due to the exceptional items related to the Semcon offer, with our
estimate at EUR 0.32 per share (2021: EUR 0.40), although a y/y increase is not
out of question based on the on our estimates expected y/y adjusted earnings
improvement. 

Growth seen to slow down in 2023
Etteplan is heading into 2023 with some uncertainty relating to organic growth
given the more conservative approach to recruitments and more turbulent demand
situation, despite double-digit organic growth so far during FY2022. We
currently expect clearly slower organic growth, in the low-mid single digits. We
expect acquisitions to still be an important part of Etteplan’s growth strategy
in 2023 despite uncertainties and with a few more targeted acquisitions growth
could push towards the double-digit mark. In terms of margins, we expect rather
flat development y/y, seeing potential for earnings improvement through
operative enhancements but also noting inflationary pressure.

HOLD with a target price of EUR 15.0 (13.5)
We have made no changes to our estimates ahead of Q4. With a rise in peer
valuation levels, we adjust our target price to EUR 15.0 (EUR 13.5) and retain
our HOLD-rating. Our target price values Etteplan at ~16x 2023e P/E, quite in
line with peers but below historical levels given current uncertainties.

Open report


FINNAIR - CLOSE TO EXPECTATIONS

15.02.2023 - 09.30 | Earnings Flash

Finnair’s Q4 revenue hit estimates well, while adjusted EBIT was a bit stronger
than expected. At first glance the report doesn’t seem to contain any major
surprises. Travel demand continues high after the pandemic for now, while
inflation is still a challenge.

Read more

 * Q4 revenue landed at EUR 687.3m, compared to the EUR 679.0m/681.2m
   Evli/consensus estimates.
 * Adjusted EBIT was EUR 17.9m vs the EUR 13.5m/2.7m Evli/consensus estimates.
 * Fuel costs amounted to EUR 228m vs our EUR 222m estimate, whereas staff costs
   were EUR 115m vs our EUR 115m estimate. All other OPEX+D&A totaled EUR 364m,
   compared to our EUR 370m estimate.
 * Cost per Available Seat Kilometer was 8.18 eurocents vs our estimate of 8.13
   eurocents.
 * The BoD proposes no dividend to be paid for the year (as expected).
 * Finnair expects to operate an average capacity of 80-85%, in terms of ASKs,
   in 2023 compared to 2019. High demand should support unit revenues in the
   short-term, while normal seasonality returns, which may result in negative Q1
   EBIT. Finnair estimates FY ’23 revenue to increase significantly but will not
   yet reach the level of FY ’19.

Open report


RAUTE - WESTERN MARKETS HOLD UP WELL

15.02.2023 - 08.35 | Company update

We make some cuts to our estimates after Raute’s Q4 report, but the bigger
picture remains largely unchanged.

Read more

Bottom line and new orders a bit soft, but no major news

Raute’s EUR 45.7m Q4 revenue grew 4% y/y and was clearly above our EUR 38.0m
estimate. The EUR 0.5m Q4 EBIT was soft relative to our EUR 0.7m estimate,
despite the high revenue figure, as inflation still limited projects’
profitability; Services revenue continued to grow y/y, but there were changes in
mix and certain delivery challenges. The EUR 28m Q4 order intake lacked
modernization orders and was soft relative to EUR 36m estimate, however there
seem to have been no significant negative changes in market demand since Q3.

We revise our FY ’23 revenue estimate down to EUR 133m

Raute’s earnings recovery path continues without major surprises, however we
revise our estimates down as Q4 order intake was lower than we expected; the
company begins the year with slightly lower order book than we estimated.
European plywood investments (particularly within birch) should remain high, but
we estimate European and North American revenues to remain roughly flat this
year (both almost doubled in FY ’22); there is more scope for growth in Latin
America and Asia-Pacific, but these markets have traditionally been more
marginal for Raute. We likewise expect the Services and Analyzers businesses to
remain stable in FY ’23, whereas the missing Russian revenue could leave Wood
Processing top line down by 20%.

We now estimate FY ’23 EBIT at EUR 2.5m (prev. EUR 5.3m)

Raute’s guidance doesn’t seem challenging from profitability perspective as the
minimum implies comparable EBITDA of only ca. EUR 6m (Raute’s comparable EBITDA
amounted to EUR 8.7m in H2’22); further growth this year in Europe and North
America within smaller equipment orders may not be that easy but a larger
(European) order, should it materialize in early FY ‘23, could add a significant
amount of revenue and thus help Raute specify its guidance upwards. Raute’s high
operating leverage works both ways, but in our view comparable EBITDA of around
EUR 8m should be achievable this year even if revenue declines by some 15%. The
17.5x EV/EBIT multiple, on our updated FY ’23 estimates, is not low but
acceptable given earnings potential in the long-term. We retain our EUR 11 TP
and BUY rating.

Open report


RAUTE - ORDER INTAKE A BIT SOFT IN Q4

14.02.2023 - 09.45 | Earnings Flash

Raute’s Q4 revenue was clearly higher than we estimated, whereas EBIT was on the
soft side especially considering the strong top line. The EUR 28m in new orders
was also softer than we expected. Raute revealed a new reporting structure and
guides FY ’23 revenue to be above EUR 130m and comparable EBITDA margin of above
4%.

Read more

 * Raute Q4 revenue was EUR 45.7m vs our EUR 38.0m estimate. Top line grew by 4%
   y/y. Raute revealed a new reporting structure, according to which Wood
   Processing generated EUR 33.3m, Services EUR 8.7m and Analyzers EUR 3.7m in
   Q4.
 * EBIT came in at EUR 0.5m, compared to our EUR 0.7m estimate. Comparable
   EBITDA was EUR 2.7m, of which EUR 1.1m was attributable to Analyzers. Wood
   Processing generated EUR 0.9m and Services EUR 0.7m.
 * Q4 order intake amounted to EUR 28m, while we estimated EUR 36m.
 * Order book amounted to EUR 84m at the end of Q4, including EUR 4m
   attributable to Russia.
 * The BoD proposes (as expected) that no dividend is to be paid for the year.
 * Raute guides FY ’23 revenue to be above EUR 130m and comparable EBITDA margin
   of above 4%.

Open report


VAISALA - FORESEEING A FIRM END FOR THE YEAR

14.02.2023 - 09.15 | Preview

Vaisala reports its Q4 result on Thursday, 16th of Feb. We expect the company to
post double-digit growth and EBIT above the comparison period. With W&E estimate
upgrades, we adjust our TP to EUR 41.0 (40.0) and retain HOLD-rating.

Read more

Expecting strong Q4 
Vaisala guides topline between EUR 500-520m and EBIT between EUR 62-72m for
2022. We expect Vaisala to enjoy a strong end for the year 2022. In our
estimates, Vaisala faces a 12% growth by its Q4 topline amounting to EUR 140.0m.
We expect W&E to experience a 5% y/y growth in Q4. On the other hand, in Q4, we
anticipate IM to record a 23% y/y increase. Even though fixed costs face
pressures through front-loaded investments and material costs increase with
component shortage, we yet foresee Q4 EBIT improving to EUR 15.2m (10.9%
margin). In total, we expect Vaisala’s topline to land a bit above and EBIT a
bit below the mid-point of the guidance. With 22E EPS amounting to EUR 1.30, we
estimate the BoD to propose a DPS of EUR 0.70.

Outlook as a main interest
According to PM indices, US and Euro Area manufacturing might face declines in
the coming months. However, a large recession in Europe seems much unlike with
energy shortage resolved. Furthermore, Vaisala’s positioning provides some
protection against the slowing economy with investments in renewable energy. For
now, the record high order book provides some foundation for growth in H1’23,
but the visibility into H2 is yet somewhat foggy. Vaisala has generally been
quite conservative in giving its guidance; with the management’s 2023 outlook
providing some growth, we foresee the company having good trust/visibility for
the full year. Moreover, component availability is set to improve which should
provide some lifting support for EBIT.

HOLD with a target price of EUR 41.0
We revised our W&A’s near-term estimates, reflecting a better-than-expected
market outlook. With our revised estimates, Vaisala trades approx. in line with
its peer group, even below by considering 2023-24 figures. With minor estimate
changes, we adjust our TP to EUR 41.0 (40.0). Reflecting neutral valuation, we
retain our HOLD-rating ahead of the Q4 result.

Open report


MARIMEKKO - VALUATION ON PAR

13.02.2023 - 09.30 | Preview

Marimekko reports its Q4 result on Wednesday, 15th of Feb. We anticipate the
growth pace to slow down and cost pressures to cut margins. We retain a TP of
10.0, but adjust the rating to HOLD (BUY), reflecting a neutral valuation.

Read more

Q4 result should contain no surprises
Marimekko expects its 2022 revenue to grow and adj. EBIT margin to land between
17-20%. The growth rate already saw some decelerating in Q3 and came in at 4.0%.
In Q4, we expect the company to post a y/y growth of 2.7%, with revenue
amounting to EUR 49.4m. The growth is driven by int’l sales while we expect
revenue in Finland to decline due to a lack of extraordinary wholesale
deliveries. With cost pressures arising from higher material costs and elevated
fixed costs, our Q4 adj. EBIT estimate falls below that of the comparison
period, to EUR 6.4m (13.0% adj. EBIT margin). With 22E EPS amounting to EUR
0.59, we expect the BoD to propose a DPS of EUR 0.38 (~60% payout rate).
Overall, we foresee that Q4 should contain no large surprises.

Navigating through a tough market
We foresee the expected slowing economic growth and inflation to have an impact
on fashion spending in 2023 with consumers fighting against a decline in
purchasing power. Inflation has also risen in one of Marimekko’s core markets
Japan. We expect Marimekko’s strong brand to protect the demand for the company,
even during harder times. Although, we expect topline growth to significantly
slow down from the levels seen during the past few years. For 2023, we estimate
y/y growth of 6.9%, with revenue amounting to EUR 179.0m. The topline growth is
largely supported by int’l sales while we expect sales in Finland to grow only
by 4% in 2023. We anticipate profitability to remain at strong levels, 23E EBIT
margin amounting to 18.2%. Furthermore, with its new strategy, the company aims
to improve its scalability and aims for a 20% adj. EBIT margin.

HOLD with a target price of 10.0
We made no changes to our estimates ahead of the Q4 result. Since our last
update, Marimekko’s share price has improved by some 10% which in our view has
changed the valuation neutral. The company currently trades with 23-24E EV/EBIT
and P/E multiples of 13-11x and 16-15.5x respectively. We adjust our rating to
HOLD (BUY) and retain a TP of EUR 10.0.

Open report


PIHLAJALINNA - FOCUS SHIFTS TOWARDS BOTTOM LINE

10.02.2023 - 09.40 | Preview

Pihlajalinna reports Q4 results on Feb 17. Last year the company positioned
itself for growth, while this year focus rests more on profitability enhancing
initiatives.

Read more

Less growth and more earnings this year

Pihlajalinna revised FY ’22 guidance down in Q4 as the factors which hit EBITA
earlier in the year persisted. Capacity additions hurt earnings especially in
H1, while certain cost inflation and productivity issues continued to weigh H2.
Covid-19 services have also been missing, but other than that there have been no
demand side issues. Organic growth has been robust, and the Pohjola Hospital
acquisition helped the company grow at a high-teens rate in FY ’22. We make no
changes to our Q4 estimates. We estimate 3% growth for FY ’23 and ca. EUR 10m
profitability increase; we expect Pihlajalinna to guide flat growth and
increasing EBITA for the year as the company is now done with its late capacity
expansion and will focus on enhancing margins.

Capacity costs have been accompanied by other items

The two larger Finnish players, Mehiläinen and Terveystalo, had major issues
last year despite strong growth. Mehiläinen, more than twice the size of
Pihlajalinna in revenue, saw its profitability decrease by ca. EUR 35m due to
many issues such as inflation and labor shortages. Pihlajalinna likewise has
endured some cost inflation as well as labor issues due to both high sick rates
and tight availability of recruits. The announced negotiations play their part
in managing costs, while Pihlajalinna also divests its EUR 16m dental business,
a small alleviation to the indebtedness issues. Price hikes prop top line in FY
’23, but we would also like to hear views on volumes. Public queues need to be
dealt with, one area which could add volumes. Organic growth outlook is decent;
there are minor top line headwinds due to the dental divestment as well as
outsourcing restructurings, but these represent only ca. 5% of revenue and
support margins.

Valuation unchanged and relatively undemanding

Pihlajalinna’s valuation, 14x EV/EBIT on our FY ’23 estimates, hasn’t changed in
the past few months, while peer multiples have seen some gains. In our view the
valuation leaves adequate upside potential as the roughly 5% EBIT margin we
estimate for the year remains well short of the company’s long-term earnings
potential. We retain our EUR 10 TP and BUY rating.

Open report


INNOFACTOR - STARTING TO PROVE ITS WORTH

10.02.2023 - 09.15 | Company update

Innofactor posted solid Q4 figures and is well set to continue top- and
bottom-line growth in 2023e. We retain our BUY-rating with a target price of EUR
1.5 (1.25).

Read more

Good figures posted in Q4
Innofactor reported Q4 results in line with our expectations. Revenue grew 17.1%
y/y (12.7% organically) to EUR 20.5m (Evli EUR 20.5m) while EBITDA and EBIT
amounted to EUR 2.6m (Evli EUR 2.7m) and 1.8m (Evli EUR 1.9m) respectively. The
order backlog stood at EUR 75.8m, up 4.1% y/y. Innofactor’s BoD proposes a
distribution of EUR 0.06 per share as repayment of capital (Evli EUR 0.06).
Innofactor’s 2023 guidance was not a surprise, expecting net sales to increase
from 2022 (EUR 77.1m) and EBITDA to increase from 2022 (EUR 7.8m). Q4 figures
were solid, considering also the EUR 0.4m deduction made in Q4 revenue due to
uncertainty in receivables of a single project, without which the reported
EBITDA -margin of 12.7% would have been boosted by some 1.5%p. 

Expecting top- and bottom-line growth in 2023 
On our largely unchanged estimates, we expect revenue growth of 6.4% in 2023,
driven by the weak comparison H1 and a continued modest growth outlook.
Innofactor has not noted any demand issues but the prevailing economic
uncertainty in our view is nonetheless not to be disregarded. We expect EBITDA
to improve to EUR 9.7m (2022: 7.8m) supported by the improved operational
efficiency after H1/22 challenges, topline growth and improved sales mix, with
the SaaS+license share of revenue up 3%p by year-end. The deduced revenue in Q4
can still materialize in 2023, providing some further potential improvement to
figures. 

BUY with a target price of EUR 1.5 (1.25)
Current valuation levels in our view price in a flat earnings development at
best, with implied 2022 P/E of ~13x, still clearly below peer 2022 and 2023e
multiples. Some caution is however warranted, with Innofactor now having posted
only two solid quarters after challenges before that. We adjust our TP to EUR
1.5 (1.25) and retain our BUY-rating.

Open report


FINNAIR - CHALLENGING ALTITUDE FOR VALUATION

09.02.2023 - 09.25 | Preview

Finnair reports Q4 results on Feb 15. Travel demand may remain robust and fuel
prices have declined, but high valuation doesn’t seem to leave much upside
potential.

Read more

Q4 EBIT likely to be a bit subdued after strong Q3

Finnair’s Q3 topped expectations as yields proved higher than estimated. High
passenger revenues (some EUR 50m above estimates), helped by the seasonal
strength of Q3, as well as income from wet leases translated into an adj. EBIT
of EUR 35m (some EUR 40m above estimates). Q4 EBIT should have improved y/y but
should be down somewhat q/q; passenger volumes are still recovering from the
pandemic slump, but Q4 also includes slower periods and in the case of Finnair
there’s the lack of North Atlantic volumes as certain routes have been missing
after the summer months. We estimate Q4 revenue at EUR 679m and adj. EBIT at EUR
13m. We believe Finnair will not issue any specific guidance (beyond capacity
and load factors) as the company and its main markets are still going through
significant changes.

Volumes are still recovering while fuel prices have declined

Finnair now breaks out data for the Middle Eastern routes. The region, based on
the initial figures, contributed 25% of the volume in January which Europe and
Asia each lately turned out; we look forward to comments on how much these new
routes might grow over the year. Finnair’s Asian volumes are now 50% compared to
pre-pandemic levels, and even if China is only now opening it’s uncertain how
much further the flows may grow as the Russian airspace stays closed. We also
look forward to comments regarding ticket pricing as jet fuel prices began to
decline in Q4. Jet fuel prices have declined especially in EUR terms (around 20%
in the past 3 months) while there should still be significant pent-up travel
demand following the pandemic.

Upside appears elusive for now despite lower fuel prices

We estimate 6% EBIT for FY ’24 vs Finnair’s target of at least 5% after H1’24.
Lower fuel prices help airlines’ earnings and thus higher valuations are
justifiable, however the pace of gains has been rapid in the past few months and
sector multiples seem high. Some uplift may be warranted also in the case of
Finnair, but the company trades 18x EV/EBIT on our FY ’23 estimates (vs 11x for
a typical peer) and ca. 11x for next year (vs 8.4x). Our new TP is EUR 0.45
(0.40); our new rating is SELL (HOLD).

Open report


INNOFACTOR - NICE FINISH TO THE YEAR

09.02.2023 - 09.20 | Earnings Flash

Innofactor’s Q4 results were in line with expectations. Net sales grew 17.1% y/y
to EUR 20.5m (Evli EUR 20.5m). EBIT amounted to EUR 1.8m (Evli EUR 1.9m).
Innofactor’s net sales and EBITDA in 2023 are expected to increase compared with
2022. Dividend proposal EUR 0.06 per share (Evli EUR 0.06).

Read more

 * Net sales in Q4 amounted to EUR 20.5m (EUR 17.5m in Q4/21), in line with our
   estimates (Evli EUR 20.5m). Net sales in Q4 grew 17.1% y/y and 12.7%
   organically. Net sales increased in Finland and Norway but declined in Sweden
   and Denmark. 
 * EBITDA in Q4 was EUR 2.6m (EUR 1.7m in Q4/21, in line with our estimates
   (Evli EUR 2.7m), at a margin of 12.7%. 
 * Operating profit in Q4 amounted to EUR 1.8m (EUR 0.5m in Q4/21, in line with
   our estimates (Evli EUR 1.9m), at a margin of 8.8%. 
 * Order backlog at EUR 75.8m, up 4.1% y/y. New orders included an information
   management solution for the Finnish Defence Forces Logistics Command,
   approximately EUR 22 million (not yet in order backlog, slightly over half
   estimated to be entered in Q1/2023).
 * Guidance for 2023: Innofactor’s net sales is expected to increase from 2022
   (EUR 77.1m) and EBITDA is expected to increase from 2022 (EUR 7.8m).
 * Dividend proposal: Innofactor’s BoD proposes a distribution of EUR 0.06 per
   share a repayment of capital (Evli EUR 0.06).

Open report


RAUTE - PROFITABILITY IN RECOVERY MODE

08.02.2023 - 09.30 | Preview

Raute reports Q4 results on Feb 14. There’s still haze around revenue and
margins going forward, but long-term potential exists while downside should be
limited even if FY ’23 EBIT proves to be more on the soft side.

Read more

Q4 EBIT likely to be modest relative to Q3

Raute’s Q3 report was a positive surprise as Europe in particular drove top line
EUR 8m above our estimate. The very high EUR 19m services revenue helped EBIT
beat our estimate. Raute’s positive margin development is set to continue this
year as the worst inflation shock has passed; Raute should have also learned to
cope with inflation in project pricing. The Q3 report highlighted strong demand
in North America and Europe (partly due to the Russian import gap), in addition
to which there have been encouraging signs in Latin America and Asia. We expect
stable Q4 EBIT development y/y while we estimate revenue down 14% y/y to EUR
38m. We estimate Q4 EBIT at EUR 0.7m, down from the EUR 1.4m Q3 figure as
services revenue is unlikely to be that high this time due to a relative lack of
modernization orders.

Profitability should heal over the course of the year

Russian order book was already down to EUR 6m at the end of Q3 and therefore the
Q4 report should have no big news on that front, however we expect to hear an
update on net working capital issues related to the cancelled Russian projects
as well as recent component availability challenges. Raute’s guidance is always
loose; we expect the company to guide improving (positive) EBIT for the year. A
larger order could lift outlook further if demand remains strong over the course
of the year.

Short-term downside seems limited, lots of EBIT potential

Raute should reach at least some modest positive EBIT in FY ’23 as inflation
abates and the company achieves EUR 4-5m in annual savings. Favorable revenue
(and mix) development could drive FY ’23 EBIT to a very decent level, although
still likely well short of EUR 10m even in an optimistic scenario. We consider
FY ’23 EBIT of ca. EUR 5m a realistic scenario. Raute may miss our base case
estimate for FY ‘23 if Western demand begins to sour, but even in that case
downside should be limited as there seem to have been no changes to Raute’s
competitive positioning. We thus consider the 7x EV/EBIT valuation, on our FY
’23 estimates, undemanding. We retain our EUR 11 TP and BUY rating.

Open report


SUOMINEN - VOLUME GROWTH AND HIGHER MARGINS

06.02.2023 - 09.25 | Company update

Suominen’s Q4 figures remained below estimates; volumes and margins will rebound
this year, but valuation already reflects improvement amid uncertainty around
the factors.

Read more

Improvement continues, but Q4 earnings remained very low

Suominen’s Q4 revenue landed at EUR 133m vs the EUR 140m/140m Evli/cons.
estimates. Sales prices remained high, and the EUR 9m FX tailwind also helped,
while Q4 volumes were flat q/q and y/y as US volumes continued to improve but
not quite at the expected pace; raw materials deflation has led to some customer
caution, in addition to which there have been manufacturing workforce shortages.
The 5% gross margin, when adjusted for the EUR 4.8m hit in Italy, was a small
improvement q/q but still clearly below our 10% estimate. Adj. EBITDA, at EUR
5.0m, came in below the EUR 11.8m/9.8m Evli/cons. estimates. FX lifted EBITDA by
EUR 0.7m, while it lacked positive one-offs from the comparison period and was
burdened by CEO change costs. Cash flow was strong as inventories and
receivables declined q/q.

We estimate Americas revenue to grow by 13% in FY ‘23

Raw materials and energy prices continue to slide in Q1, which means Suominen’s
pricing adjusts down in Q1 but slower than input costs. Meanwhile volumes and
mix are improving; the US drives meaningful volume gains this year as especially
H1’22 was challenging. Sustainable nonwovens’ growing share supports margins,
but the relatively challenging European supply-demand balance in traditional
products poses a headwind. We make some further small estimate cuts for this
year; we estimate ca. 5% top line growth for the year, driven by double-digit
growth in the US.

Focus rests on volumes over the coming quarters

H1’23 enjoys a favorable dynamic between falling input costs and relatively high
(but already declining) nonwovens prices. The situation could extend to H2’23 if
input costs continue to decline after the spring, but in our view margin gains
are more likely to rely on improving volumes and mix after H1’23. FY ’23 results
should thus demonstrate stabilizing profitability levels for Suominen after the
rapid gains and declines seen in recent years. Suominen is valued below 5x
EV/EBITDA and 9x EV/EBIT on our FY ’23 estimates, which we consider neutral
levels since margins are likely to remain subdued especially during the early
parts of the year. Our new TP is EUR 3.0 (3.5); we retain our HOLD rating.

Open report


CONSTI - STRONG FINISH TO THE YEAR

03.02.2023 - 16.20 | Company update

Consti’s Q4 results were strong as both revenue and profitability figures
exceeded our estimates. The valuation is still rather undemanding despite the
recent share price strength, we also see the dividend yield attractive. We
retain our BUY-rating and adjust our target price to EUR 14.0 (13.0).

Read more

Q4 results were strong

Net sales in Q4 were EUR 93.3m (EUR 82.6m in Q4/21), above our and consensus
estimates (EUR 85.1m/86.0m Evli/cons.). Sales growth was impressive at 12.9%
y/y. Operating profit in Q4 amounted to EUR 4.8m (EUR 3.0m in Q4/21), above our
and consensus estimates (EUR 3.7m/3.4m Evli/cons.) at a margin of 5.2% (3.6%).
We estimated improvement in profitability y/y as the comparison period was
affected by poor performance of two regional business units, yet the published
figures were even stronger than anticipated. The order backlog in Q4 was EUR
246.7m (EUR 218.6m in Q4/21), up by 12.8% y/y driven by strong order intake of
EUR 109.1m in Q4 (Q4/21: EUR 66.9m). Consti’s BoD proposes a dividend of EUR
0.60 per share.

 

Positive development expected to continue

Consti expects that the operating result for 2023 will be in the range of EUR
9.5–13.5 million. We have made small adjustments to our forecasts, our current
estimate for 2023 revenue is at EUR 315.2m (EUR 303.8m) and EBIT slightly above
the guidance middle point at EUR 12.3m (EUR 11.6m). The estimate adjustments are
driven by the company’s order backlog, easing cost inflation and volume growth.
We still see potential margin pressure coming from salary cost inflation, on the
other hand, the material cost inflation is clearly slowing down.

 

BUY with a target price of EUR 14.0 (13.0)

We continue to see the case attractive despite the recent share price strength.
The company has shown its capabilities in a difficult market, and we expect the
positive development to continue. The valuation is still rather undemanding when
comparing to its key peers. In addition to the favorable relative valuation, we
see the company’s dividend yield attractive at the current price levels. We
adjust our target price to EUR 14.0 (13.0) with BUY-rating intact.

Open report


SUOMINEN - STILL VERY MODEST RESULTS

03.02.2023 - 10.00 | Earnings Flash

Suominen’s Q4 results remained below estimates. Top line grew 15% y/y but was
still soft relative to expectations, while cost inflation didn’t yet ease that
much to translate into significantly better margins. Profitability hence stayed
at a very modest level.

Read more

 * Suominen Q4 revenue grew by 15.1% y/y to EUR 133.1m vs the EUR 140.0m/140.4m
   Evli/consensus estimates. Americas came in at EUR 81.7m, compared to our EUR
   84.0m estimate, while Europe amounted to EUR 51.4m vs our EUR 56.0m estimate.
   Currencies had a positive impact of EUR 9.3m on sales.
 * Gross profit was EUR 1.8m, compared to our EUR 14.0m estimate, and gross
   margin was therefore 1.4% vs our 10.0% estimate.
 * Adjusted EBITDA landed at EUR 5.0m in Q4, compared to the EUR 11.8m/9.8m
   Evli/consensus estimates. Meanwhile adjusted EBIT was EUR -0.2m vs our EUR
   6.8m estimate.
 * Suominen guides its comparable EBITDA to increase in 2023 (EUR 15.3m in
   2022).
 * The BoD proposes EUR 0.10 per share dividend to be paid for the year,
   compared to the EUR 0.15/0.08 Evli/consensus estimates.

Open report


CONSTI - EVEN STRONGER THAN EXPECTED

03.02.2023 - 10.00 | Earnings Flash

Consti's net sales in Q4 amounted to EUR 93.3m, above our and consensus
estimates (EUR 85.1m/86.0m Evli/cons.), with growth of 12.9% y/y. EBIT amounted
to EUR 4.8m, also above our and consensus estimates (EUR 3.7m/3.4m Evli/cons.).
Guidance for FY 2023: operating result for 2023 will be in the range of EUR
9.5–13.5 million.

Read more

 * Net sales in Q4 were EUR 93.3m (EUR 82.6m in Q4/21), above our and consensus
   estimates (EUR 85.1m/86.0m Evli/cons.). Sales growth was impressive at 12.9%
   y/y.
 * operating profit in Q4 amounted to EUR 4.8m (EUR 3.0m in Q4/21), above our
   and consensus estimates (EUR 3.7m/3.4m Evli/cons.) at a margin of 5.2%
   (3.6%).
 * EPS in Q4 amounted to EUR 0.49 (EUR 0.30 in Q4/21), above our and consensus
   estimates (EUR 0.36/0.33 Evli/cons.).
 * The order backlog in Q4 was EUR 246.7m (EUR 218.6m in Q4/21), up by 12.8%
   y/y. Order intake was EUR 109.1m in Q4 (Q4/21: EUR 66.9m).
 * Free cash flow amounted to EUR 10.4m (Q4/21: EUR 6.1m).
 * The company’s order intake was impressive as it won multiple significant
   orders during Q4 such as Oulunkylä elementary school and kindergarten and
   Jorvi Hospital
 * The profitability continues to be strong despite the cost inflation having a
   negative effect, the projects progressed as planned during the quarter and
   Consti did not experience such problems with projects as it did during Q4
   2021
 * Guidance for 2023: Operating result for 2023 will be in the range of EUR
   9.5–13.5 million

Open report


CAPMAN - DECENT QUARTER WITH SOME SURPRISES

03.02.2023 - 09.30 | Company update

CapMan’s operative performance in Q4 was quite decent with the big surprise
being the divestment of JAY Solutions. The outlook for 2023 remains quite good
and the investment case attractive despite some uncertainty.

Read more

Operatively quite as expected
CapMan reported operatively rather decent Q4 figures. The larger surprises came
in the divestment of JAY Solutions (CapMan’s ownership 60%) and appointment of a
new CEO. JAY Solutions was sold to Bas Invest for a consideration of EUR 8.5m at
an attractive valuation of ~4x sales. CapMan, however, booked an EUR 2.6m
goodwill impairment charge due to an accounting technicality relating to the
option for the minority stake. As a result, EBIT came in softer than expected at
EUR 7.5m (EUR 11.4m/9.6m Evli/cons.), adj. EBIT at EUR 10.1m. CapMan’s BoD
proposed a dividend of EUR 0.17, a notch above expectations (EUR 0.16
Evli/cons.), for a dividend yield of ~6%. 

Outlook remains quite good
The overall fairly decent fundraising and transaction outlook does not appear to
have changed at least for the worse in the past months. The fundraising activity
is seeing some support from a rebound in previous investment decision making
slowness, with recent development in some funds having been slower than
expected. We expect similar operating profit levels in 2023 as in 2022. The
expected larger negative is in fund returns, after a stellar comparison period.
We expect the Management Company business to clearly improve mainly through
increased carried interest while expecting the Services business to improve on
an adj. basis through growth and divestment of the loss-making JAY solutions. 

BUY with a target price of EUR 3.2 (3.1)
CapMan in our view continues to convince despite some market softness. The
market situation and an on our estimates higher expected share of more uncertain
carried interest creates some uncertainty. With the not too challenging
valuation level and the ~6% dividend yield the investment case remains
attractive. We retain our BUY-rating with a TP of EUR 3.2 (3.1).  

Open report


DETECTION TECHNOLOGY - SHORT-TERM VALUATION REMAINS ELEVATED

03.02.2023 - 09.30 | Company update

DT delivered solid Q4 growth. EBIT came down with high cost inflation. The
growth outlook for H1’23 seems bright, but visibility into H2’23 is yet blurry.
With the valuation remaining elevated, we retain our SELL rating. TP adjusts to
EUR 16.5 (16.0) with minor estimate changes made.

Read more

Good growth, profitability came down as expected
Q4 group net sales accounted for EUR 28.2m (27.4m/28.3m Evli/cons.), reflecting
14.1% y/y growth. The growth was supported by the strong performance of SBU and
IBU, while MBU suffered from supply chain issues and a softer market. Gross
margin slightly decreased from the comparison period with continued
spot-component purchases. In addition, fixed costs faced notable increases and
DT’s Q4 EBIT fell clearly short of last year. Q4 EBIT amounted to EUR 2.8m (9.9%
margin). For the year 2022, the BoD proposes a dividend of EUR 0.20 which
reflects 58% of the company’s net result.

Minor estimate adjustments made
We raised our 23E EBIT by some 2%, reflecting upgraded net sales estimates and
the company’s comments on profitability development. However, we expect the
scalability to kick in more prominently in 2024 with additional cost pressures
easing and revenue growth continuing. Our 23E net sales estimate amounts to EUR
111.5m, reflecting y/y growth of 13.1%. We expect all DT’s businesses to show
growth, especially SBU to perform strongly with aviation investments and gained
market share. With strong topline growth, our 23 EBIT estimate lands at EUR
14.0m, reflecting an EBIT margin of 12.6% which yet falls short of the company's
15% target. There exists yet some tails from 2022 that deteriorate DT’s 23E
profitability. However, in 2024, we expect DT to exceed its profitability target
and record an EBIT margin of 15.2%.

SELL with a target price of EUR 16.5
With our 2023 estimates, DT continues trading above its peers. With small
estimate revisions made, we adjust our TP to EUR 16.5 (16.0). We however still
see the company as overvalued and hence retain our SELL rating. For a
longer-term investor, we see DT as an interesting investment case with both
topline and EBIT growth. 

Open report


SRV - WELL POSITIONED FOR A DIFFICULT MARKET

03.02.2023 - 09.30 | Company update

SRV enters difficult market with a low-risk project portfolio and a healthy
balance sheet. We see the near-term upside limited yet the valuation looks
rather undemanding in the long-term. We retain our HOLD-rating and TP of EUR
4.3.

Read more

Q4 was weaker than expected

SRV reported Q4 results which were below our estimates. Revenue amounted to EUR
181.2m (EUR 211.9m/214.0m Evli/cons.) and EBIT was EUR -6.3m (EUR 3.6/4.1m
Evli/cons.). The company estimates that 2023 group revenue is lower and
operative operating profit is positive but lower than in 2022. SRV also updated
its long-term financial targets (by 2026): Revenue EUR 900m and operative
operating profit margin 6%. In addition, SRV aims to distribute 30-50% of
earnings as dividend.

 

Challenging market ahead

The current estimates point towards a slowdown for 2023 in the Finnish
construction market driven particularly by decreasing housing construction
volumes. The market conditions are starting to show in the company’s numbers as
the housing construction backlog continued to decline and the company’s revenue
for Q4 was affected by delays in project starts. In our view, SRV is well
positioned for a difficult market as the company’s order intake in business
construction was strong during the fourth quarter. In addition to the strong
presence in the lower risk business construction contracting market, the
company’s balance sheet is healthy after the financing arrangements completed
during H1 2022.

 

HOLD with a target price of EUR 4.3

We estimate revenue to decline 13.7% y/y in 2023 driven by a lack of developer
contracted housing units and lower residential construction volumes while seeing
healthy conditions for business construction supported by backlog growth.
Because of the estimated project mix, we have also lowered our margin
expectations for 2023. In our view, the near-term upside is limited yet the
valuation looks rather undemanding in the long-term. We retain our HOLD-rating
and TP of EUR 4.3.

Open report


DETECTION TECHNOLOGY - EXPECTED DOWNTURN IN Q4 EBIT, SOLID FULL-YEAR GROWTH
DESPITE CHALLENGES

02.02.2023 - 09.50 | Earnings Flash

DT’s Q4 and 22 EBIT saw an expected decrease. Group topline however grew nicely
and soft Q4 profitability is explained by cost inflation.

Read more

 * Q4 group result: net sales grew by 14.1% y/y to EUR 28.2m, approx. in line
   with our and cons. estimates (24.7m/28.3m Evli/cons.). The growth was driven
   by strong demand for industrial and security solutions, while medical BU saw
   some softness during the period. EBIT of EUR 2.8m came in above our and cons.
   estimates (2.5m/2.6m Evli/cons.), but clearly below that of the comparison
   period. EBIT was negatively impacted by cost inflation arising from
   spot-component purchases, R&D, and logistics as well as personnel expenses.
   EBIT margin was 9.9%. EPS accounted for EUR 0.16, beating our expectations
   (0.13/0.15 Evli/cons.).
 * Medical (MBU): mainly driven by softer market and supply chain issues, MBU’s
   net sales decreased by 6.6% y/y to EUR 12.7m (Evli: 13.5m). According to the
   company’s management, the underlying long-term demand outlook for MBU is
   positive.
 * Security (SBU): with strong underlying demand for CT and line-scan security
   equipment, SBU’s net sales grew by 41% y/y to EUR 10.9m, topping our
   expectations (Evli: 9.8m). DT gained new customers during the period.
 * Industrial (IBU): IBU’s net sales grew by 34.5% to EUR 4.6m, beating our
   estimates (Evli: 4.1m). The strong performance was supported by improved
   delivery capabilities and new customers gained during 2022.
 * The BoD proposes a DPS of EUR 0.20 (0.19/0.21 Evli/cons.) for the fiscal year
   2022.
 * Outlook: DT expects group net sales and all its BUs to grow by double-digits
   in Q1 and H1’23. Outlook for medical solutions came in above our
   expectations, forcing some upward pressure on our 2023 estimates. DT
   anticipates not achieving its profitability target in 2023 yet, but says it’s
   on its way toward an EBIT margin of 15%. Long-term targets intact: at least
   10% annual growth and 15% EBIT margin.

Open report


CAPMAN - OPERATIVELY QUITE AS EXPECTED

02.02.2023 - 08.30 | Earnings Flash

CapMan's net sales in Q4 amounted to EUR 19.7m, in line with our estimates and
consensus (EUR 19.8m/18.9m Evli/cons.). EBIT amounted to EUR 7.5m adj. EBIT EUR
10.0m), below our consensus estimates (EUR 11.4m/9.6m Evli/cons.). Dividend
proposal EUR 0.17 per share (EUR 0.16/0.16 Evli/Cons.).

Read more

 * Revenue in Q4 was EUR 19.7m (EUR 14.7m in Q4/21), in line with our and
   consensus estimates (EUR 19.8m/18.9m Evli/Cons.). Growth in Q4 amounted to
   34% y/y.
 * Operating profit in Q4 amounted to EUR 7.5m (EUR 12.2m in Q4/21), below our
   estimates and consensus estimates (EUR 11.4m/9.6m Evli/cons.). An EUR 2.6m
   impairment of goodwill related to the disposal of the JAY Solutions business
   was booked, adj. operating profit was EUR 10.0m.
 * EPS in Q4 amounted to EUR 0.03 (EUR 0.06 in Q4/21), below our estimates and
   consensus estimates (EUR 0.06/0.05 Evli/cons.).
 * Management Company business revenue was EUR 17.1m vs. EUR 16.0m Evli.
   Operating profit EUR 7.6m vs. EUR 6.7m Evli. Carried interest EUR 4.1m (Evli
   4.0m)
 * Revenue in Investment business in Q4 was EUR 0.0m vs. EUR 0.0m Evli.
   Operating profit in Q4 amounted to EUR 3.7m vs. EUR 4.8m Evli. 
 * Revenue in Services business in Q4 was EUR 2.4m vs. EUR 3.3m Evli. Operating
   profit in Q4 amounted to EUR -1.9m vs. EUR 1.7m Evli. 
 * Dividend proposal: CapMan proposes a dividend of EUR 0.17 per share (EUR
   0.16/0.16 Evli/Cons.).
 * Capital under management by the end of Q4 was EUR 5.04bn (Q4/21: EUR 4.9bn). 
 * Pia Kåll appointed as CEO of CapMan, current CEO Joakim Frimodig to become
   full Chair of the Board.

Open report


DETECTION TECHNOLOGY - VALUATION TURNS EXPENSIVE

31.01.2023 - 14.50 | Preview

DT reports its Q4 result on February 2nd. Despite supply chain issues affecting
especially MBU’s Q4 growth, we expect DT to deliver double-digit growth in Q4.
However, a recent rally in stock price has turned DT’s valuation quite elevated.
We downgrade our rating to SELL (HOLD) and adjust TP to 16.0 (16.5).

Read more

Supply chain issues to cut MBU’s growth in Q4
In its pre-silent call, DT’s management indicated that additional supply chain
issues have caused some challenges to MBU’s deliveries. To our understanding,
these challenges concern especially China, in which DT holds a strong position
in medical solutions. Such issues are expected to have a significant impact on
MBU’s growth prospects and thus we have revised our Q4 MBU topline estimates
downwards. We now expect MBU’s Q4 net sales to decrease by 0.4% y/y to EUR
13.5m. We expect the situation not to limit in Q4’22 and MBU’s growth to see
some softness also in Q1’23.

SBU and IBU to perform well
We don’t expect MBU’s situation to reflect in the performance of SBU and IBU
since MBU operates mainly with a separate supply chain. In addition, the
underlying demand for security solutions is currently high. In Q4, we expect SBU
to grow by 26.4% to EUR 9.8m and IBU to increase by 20.2% to EUR 4.1m. In our
view, SBU’s growth is largely supported by increased investments in aviation.
Moreover, we see IBU facing solid momentum that results in recently won
customers despite uncertain macroeconomic trends. In total, DT’s Q4 revenue will
face a 10.9% y/y growth, amounting to EUR 27.4m (prev. 28.7m).

SELL with a target price of EUR 16.0 (16.5)
Continued spot-component purchases deteriorate DT’s profitability to some
extent, despite the company being able to transfer some of the increased
material costs to customer prices. We expect Q4 EBIT to amount to 2.5m (prev.
2.8m), reflecting a 9.2% margin. The company also faces cost pressures
originating from fixed costs. With our revised estimates and recent rally in
stock price, DT’s valuation turns expensive. We downgrade our rating to SELL
(HOLD) and adjust TP to EUR 16.0 (16.5) ahead of the Q4 result.

Open report


FELLOW BANK - SO FAR, SO GOOD

31.01.2023 - 09.15 | Company update

Fellow Bank has met the expectations that were set out for 2022. The market
environment changes provide some near-term benefits but increase uncertainty
regarding the lending outlook. We adjust our TP to EUR 0.40 (EUR 0.42),
HOLD-rating intact.

Read more

On track with set out expectations for 2022
Fellow Bank’s development during H2 has progressed in line with expectations set
out earlier. The loan portfolio at the end of 2022 was at EUR 159.9m (target >
EUR 150m). Deposits amounted to EUR 246.8m, showing an expected more modest
growth. The provided funding amounts on a monthly level have also showed a
slight positive trend, with the monthly average (R3m) near EUR 28m. Actions to
strengthen equity were also completed as expected with the issue of an EUR 6.1m
debenture loan during the fall.

Market environment development positives and negatives
The interest rate environment and macroeconomic uncertainties bring some added
flavour to the mix, the effects of which we currently view as slightly net
negative for Fellow Bank. The effect on near-term expected net interest income
is positive, although the higher interest rates on deposits and current loan
portfolio to deposit ratio reduces some of the positive impact. The interest
rate hikes coupled with the macroeconomic uncertainties, however, increase the
uncertainty in the growth of funding volumes going forward. The effects so far
appear to have been mostly visible through somewhat stricter lending policies
and higher loan loss provisions, but we foresee some increases in competition
through pricing going forward.  The overall financial impacts on our estimates
for the coming years are not substantial through the higher expected interest
income and somewhat lower growth and higher loan loss expectations. 

HOLD with a target price of EUR 0.40
Fellow Bank’s investment case relies on the growth of its loan book in the
coming years and the benefits of scalability. The current outlook has in our
view slightly weakened, and we adjust our target price to EUR 0.40 (EUR 0.42),
HOLD-rating intact.

Open report


CONSTI - POSITIVE DEVELOPMENT EXPECTED

30.01.2023 - 09.20 | Preview

Consti reports its Q4 2022 results on February 3rd. We expect that the steady
performance continues, and operative profitability improves year-on-year. We
retain our BUY-rating and adjust our target price to EUR 13.0 (12.0).

Read more

Steady performance expected to continue in Q4

Consti reports its Q4 results on February 3rd. The company’s performance has
been steady during the first nine months, and we expect that the development has
continued during the last quarter. We estimate revenue growth of 2.8% for Q4
driven by slightly higher backlog burn yet lack of inorganic growth when
comparing to Q4 2021. Consti estimates that the EBIT for FY will be in the range
of EUR 9-13 (EUR 2.4-6.4m implied guidance for Q4). Our estimate for FY EBIT
stands at EUR 10.3m (EUR 3.7m for Q4), slightly below the middle point of the
guidance. We expect that the company can improve its relative profitability y/y
despite the cost inflationary environment as Q4 2021 was affected by two
regional business units with poor profitability.

 

Renovation market is expected to grow slightly in 2023

Despite the anticipated decrease in new construction, the Finnish renovation
construction volumes are predicted to experience a slight increase in 2023. The
Confederation of Finnish Construction Industries RT predicts that renovation
output will increase by 2% in 2023. We currently forecast revenue growth of 2.2%
and EBIT margin of 3.8% for 2023, we expect the company's growth to continue,
though at a slightly slower pace due to a lack of inorganic growth. However,
margins are predicted to improve as a result of higher volumes and slowing cost
inflation. Consti’s backlog is still at healthy levels and the company has been
able to win projects especially on non-residential renovation. The demand for
renovations by housing companies in 2023 is uncertain due to the high interest
rates and renovation costs.

 

BUY with a target price of EUR 13.0 (12.0)

We have not made any adjustments to our estimates. Due to higher peer group
multiples, we adjust our target price to EUR 13.0 (12.0) with BUY-rating intact.

Open report


SUOMINEN - IMPROVING AGAIN AFTER CHALLENGES

27.01.2023 - 09.35 | Preview

Suominen reports Q4 results on Feb 3. It’s clear Q4 will be a lot better than
previous quarters, while FY ’23 profitability continues to improve. Many factors
now support margins, but valuation also reflects better performance.

Read more

US volumes recover while raw materials prices decline

Suominen’s Q3’22 top line recovered a lot even when its early part remained
difficult in the US. We expect the continued rebound to have helped Suominen
grow 21% y/y to EUR 140m in Q4 revenue. We estimate Suominen’s raw materials
prices to have declined by almost 10% q/q in Q4, which together with higher
delivery volumes and relatively stable sales prices should have helped the
company to a significant profitability improvement not only q/q but also y/y. We
estimate Q4 EBITDA at EUR 11.8m. USD has lately weakened by some 10% against EUR
but is still relatively strong compared to year ago. We therefore believe the US
business to drive growth also this year.

European volumes seem unlikely to grow much this year

Suominen plans to close another of its plants in Italy. European demand for
traditional wipes is soft, while Turkish and Chinese imports have added a lot of
supply within such segments, and the Mozzate plant isn’t positioned to produce
sustainable nonwovens. Italy’s position is also challenging in terms of energy
costs. The closure would result in EUR 9m in one-offs and EUR 3m in added annual
EBITDA as utilization rates improve. Q4’22 and Q1’23 energy costs in Europe
might prove to be a bit lower than feared due to the mild winter, whereas the
situation in the US may have been more challenging relative to expectations.
Suominen should guide at least some EBITDA improvement for this year as H1’22
comparison base is so weak, however the Q4 report might be a bit too early to
give very strong guidance.

Valuation neutral, uncertainties around improvement pace

The closure and lower USD represent some estimate headwinds, but we would still
expect Suominen to grow by at least a few percentage points this year.
Suominen’s valuation (8x EV/EBIT on our FY ’23 estimates) is not very
challenging as profitability continues to improve from the lows, driven by
higher top line and lower raw materials prices, but valuation already reflects
improvement while a lot of uncertainty remains around its pace. We update our TP
to EUR 3.5 (3.0); our rating is now HOLD (BUY).

Open report


ENERSENSE - ORGANIC IMPROVEMENT CONTINUES

24.01.2023 - 09.30 | Company update

The upgrade implies Q4 was a lot better than we previously estimated but also
suggests further improvement this year after recent challenges caused by high
inflation.

Read more

Q4 figures clearly better than previously estimated

Enersense upgraded its FY ’22 guidance. Revenue should be around EUR 265m while
adj. EBITDA will top EUR 12m. We had previously estimated relatively robust 8%
top line growth for Q4’22, however we update our estimate to 31% ahead of the
report. We saw Q4 EBITDA margin slightly below 2% but now update our estimate to
4.5%. The positive revision was driven by wind power projects, which proceeded
ahead of schedule, yet our EUR 15m top line and EUR 2.6m profitability revisions
suggest our previous estimates to have been cautious on other fronts as well.
Organic growth outlook seems to be stronger than we previously estimated as each
of the four segments appears headed for double-digit growth also this year.

High growth to continue even without the Voimatel deal

In our view Enersense is set to achieve significant earnings improvement in FY
’23 as inflation was a major challenge throughout last year, dragging
profitability over the crucial summer months. Enersense has been negotiating
inflation compensation for a while, the results of which are set to materialize
with a lag, and this year inflation should prove much more modest whereas top
line growth looks to remain in the double-digit territory. We note Connectivity
has recently announced EUR 65m in contracts for the coming years. We estimate
Enersense should be able to achieve roughly 200bps gains in operating margins
this year. The Voimatel acquisition, should it go through, would help drive
further operational improvement, but for now it’s still being processed by the
FCCA.

FY ’23 figures and wind power projects could drive upside

Enersense continues to invest in growth this year, helped by the EUR 26m in
proceeds from convertible notes. We have updated our FY ’23 EBIT estimate to EUR
11.4m (previously EUR 8.4m), on which Enersense trades roughly 10x. The
valuation is not particularly challenging, especially relative to peers; the
3.8% EBIT margin we estimate also doesn’t reflect full profitability potential
and hence earnings growth should continue next year. Our updated TP is EUR 7.0
(6.0) as we retain our HOLD rating.

Open report


SOLTEQ - CMD: TURNING THE TIDE 

19.01.2023 - 09.45 | Company update

Solteq presented its new strategy in its CMD 2023 event, reiterating near-term
challenges and setting forth steps to build a stronger Solteq in the long-term.
We retain our HOLD-rating and adjust our TP to EUR 1.3 (1.2)

Read more

New strategy set
Solteq hosted its Capital Markets Day 2023 on January 18th, giving more insight
into the recently set new strategy. Solteq had previously announced that it will
operate under two new segments, Retail & Commerce and Utilities. Long-term
growth and EBIT-% targets for the segments were set at 8%/8% and 15%/18%
respectively. The company’s primary focus in the near-term will be on
profitability, while also seeking to return on a growth path.

Near-term softness, building for the long-term
Solteq is heading into the new strategy period with a heavily renewed management
team, including both new segments. For the short-term, Solteq reiterated the
challenges faced in product development and macroeconomic headwinds. For the
Utilities-segment, 2023 is expected to be a turn-around year, with ramp-up
towards normalized operations and healthier financials towards H2/2023. In the
Retail & Commerce-segment the growth ambitions in our view appear reasonable,
although expectations in the near-term seem muted due to current headwinds.
Newly appointed EVP Jesper Boye previously successfully headed Solteq’s business
in Denmark and we see potential in future pan-Nordic growth. In our view the key
takeaway from the CMD was the confirmation of Solteq’s own abilities and focus
on near-term measures to build a much more capable Solteq towards the latter
part of the strategy period.

HOLD with a TP of EUR 1.3 (1.2)
From a valuation perspective, the near-term remains subdued by challenges in the
Utilities business. The significant upside potential in our view lies in the
turnaround and tapping into the other Nordic countries, assuming the
implementation of Datahub in Sweden. We adjust our TP to EUR 1.3 (1.2) due to a
slight rebound in peer multiples, HOLD-rating intact.

Open report


ENDOMINES - NEW DRILL RESULTS FROM PAMPALO

04.01.2023 - 09.50 | Company update

Endomines reported high-grade drill results significantly below the current
production level. Even though the result is based on a single drill hole, it
confirms the continuation of the deposit to the depth. We have not made changes
to our production estimates, yet we increase the possible Pampalo Life of Mine
in our option model. We increase our TP to EUR 6.5 (5.4), HOLD-rating intact.

Read more

High-grade drill results from Pampalo

Endomines is currently extracting ore from the 755-815 level and have inferred
resources (Pampalo deep) at the 815-875 level. The new drill hole intersected
6.0m grading 9.2g/t gold at the 1050 level, roughly 175-235m below the 815-875
level. The company has historically been able to produce approximately 20k
ounces of gold per 50 meters at the Pampalo underground mine.

 

Probability of extending Pampalo Life of Mine increases

The results are based on a single drill hole and further drilling is needed to
determine the economic feasibility of the mining area. Even though it is too
early to determine if the company is able to economically extract the ore, the
result confirms the continuation of the deposit. The gold was found in a
location where the company expected, which shows that the mineralization
continues according to the company’s previous expectations.  

 

HOLD with a target price of EUR 6.5 (5.4)

We have not made changes to our production estimates based on the published
results. Our valuation for the company’s Pampalo mine is based on DCF which
considers the ore reserves and resources between the 755-815 and 815-875 levels.
The rest of the value is derived from a real option model which considers the
possibility of Pampalo LoM increase. We have made adjustment to the real option
model regarding the possible scale of the LoM increase. As a result of the
changes to the model and the favorable gold price development, we increase our
target price to EUR 6.5 (5.4), HOLD-rating intact.

Open report


CONSTI - STEADY PROGRESS, FAVOURABLE VALUATION

22.12.2022 - 09.20 | Company report

Consti is the leading renovation construction company in Finland. Despite facing
an uncertain market with rising building costs, the company has been able to
successfully turnaround and maintain its profitability. We continue to see the
valuation rather undemanding and the discount to its main peers unjustified. We
retain our BUY-rating and adjust our target price to EUR 12.0 (11.0).

Read more

Finland’s leading renovation construction company
Consti is a construction service company focused on renovation construction and
building technology contracting and services. The company operates solely in
Finland with a focus on Finnish growth centers. Consti is the largest renovation
construction company in Finland measured by revenue and the company’s building
technology unit is the 5th largest building technology company in Finland.

Turnaround achieved amid uncertain market
During 2017-2018, Consti experienced challenges with project execution and
management that resulted in negative earnings. Due to the suboptimal
profitability, the company implemented corrective measures that began to show
results already in 2019. The company has posted over 3% adjusted EBIT margin
during 2020-2021. In 2022, the company has been able to maintain its
profitability despite the rising construction material costs. In our view, the
company’s long-term profitability target of 5% EBIT margin is ambitious but we
see potential for improvement through fixed cost containment, optimization of
the sales mix, and improved project management and procurement.

BUY with a target price of EUR 12.0 (11.0)
We see the case attractive despite the current construction market uncertainty
and the recent share price strength. In our view, the company’s valuation
discount to its new construction focused peer companies is unjustified. We also
see a strong long-term upside potential if the company can reach its long-term
operational targets. We retain our BUY-rating and adjust our target price to EUR
12.0 (11.0).  

Open report


ENDOMINES - STARTING A NEW CHAPTER

20.12.2022 - 09.10 | Company update

Trading with the company’s shares in Nasdaq Helsinki commences today under
ticker PAMPALO. Endomines raised gross proceeds of EUR 13m which are used
especially for exploration activities along the Karelian gold line. With the
funding, the company is starting a new chapter as it begins to implement its
updated strategy on a larger scale. We update our target price to EUR 5.4 (SEK
59), HOLD-rating intact.

Read more

Endomines raised gross proceeds of EUR 13m
The public offering of Endomines Finland was oversubscribed yet the company’s
BoD did not exercise the one million share upsize option. Therefore, the gross
proceeds from the offering stayed at EUR 13m, with EUR 4m paid in cash and
roughly EUR 9m paid by setting of the outstanding receivables based on the
convertible loans issued by Endomines Finland. The result of the offering was in
line with our prior assumptions.

Financing secured, strategy implementation ahead
Despite the dilution effect from the offering, we see the completion of the
offering positive for the investment case. The company has now resources to
begin larger scale exploration activities in the Karelian gold line which is one
of the company’s strategic focus areas. The funding also allows management to
focus on wider strategy implementation such as ramping up the Karelian gold line
gold concentrate production and partnerships and/or asset sales in the United
States. In addition, the company’s annual financing costs decrease as part of
the offering is paid by convertible note conversion.

HOLD with a target price of EUR 5.4 (SEK 59)
Our view of the company remains largely unchanged from the previous update. Even
though we see the completion of the offering as a great enabler for the
company’s strategy implementation, we still see uncertainty regarding the
successfulness of the company’s exploration activities and the value realization
of the US assets. We update our target price to EUR 5.4 (SEK 59), HOLD-rating
intact. 

Open report


NETUM - NEAR-TERM CHALLENGES CONTINUE

16.12.2022 - 09.35 | Company update

Netum issued a profit warning, lowering its EBITA-margin range. We see continued
solid mid-term potential through the public sector exposure despite near-term
challenges.

Read more

Lowered 2022E EBITA-% from 12-14% to 9-10%
Netum issued a profit warning on December 15th. The guidance for growth of over
30% in 2022 remains intact, while the EBITA-margin estimate was lowered from
12-14% to 9-10%. There is evidently no clear sole reason for the lowered
guidance, but a product of among other things slightly below expected top-line
growth, recruitments, additional expenses incurred from organizational
restructuring during H2 and wage and general cost increases. Project challenges
or delays have not been an issue. Growth and demand have to our understanding
overall remained good despite some softness within the more competed for
“general” projects and in private sector demand. The high share of public sector
clients and related solid demand and better prerequisites for transferring cost
increases to the customer remain beneficial.

Margin improvement potential in our view remains intact
With the lowered guidance we have lowered our 2022 EBITA-% estimate to 9.6% and
our sales growth estimate by some 3%p. We continue to see clear potential for
double-digit EBITA-margins and the long-term target of 14% not overly ambitious.
Uncertainty regarding 2023 is elevated but assuming that the demand situation
continues to support top-line growth and among other things the challenges with
Netum’s Cyber security business ease and savings from the organizational
restructuring and acquisition synergies materialize, we expect margins to
improve to 13% in 2023. Netum has continued active recruiting and although
profitability challenges will likely somewhat affect growth ambitions, we
continue to expect double-digit growth.

BUY with a target price of EUR 4.2 (4.5)
Netum’s investment case in our view remains supported by the public sector
exposure and good demand in the area and margin potential and we have yet to
identify any major weaknesses. We retain our BUY-rating but lower our TP to EUR
4.2 (4.5). 

Open report


ENDOMINES - OFFERING UNDERWAY, UNCERTAINTIES REMAIN

02.12.2022 - 09.50 | Company update

Endomines seeks to raise gross proceeds of EUR 13m (SEK 141m), the proceedings
are used especially for exploration activities along the Karelian gold line. The
investment case relies on the successfulness of the company’s exploration
activities, for which visibility remains low. Additionally, we see clear risks
in the value realization of the company’s United States asset portfolio.

Read more

Endomines to raise gross proceeds of EUR 13m

Endomines seeks to raise gross proceeds of EUR 13m (SEK 141m). The 2.6 million
new shares offered represents 38.9% of the current shares outstanding. The
subscription price is EUR 5.00 (SEK 54.25 at the current FX rate). In case of
oversubscription, the company’s BoD may increase the number of shares issued up
to 3.6m shares with a one million share upsize option. The net proceedings from
the issue (excl. upsize option) are roughly EUR 12.3m (SEK 134m). The company
has received commitments from investors worth of EUR 12.2m in total (or roughly
94% of the total offering) of which roughly EUR 3.4m is paid in cash.

 

Proceeds used to fund exploration activities in Finland

Endomines updated its strategy earlier this year which set the company’s focus
back to Finland. The company aims to conduct wide scale exploration activities
in the Karelian gold line with a mid-term target of defining a deposit with more
than one million ounces of gold resources. The proceeds of the issue are used
for the implementation of the new strategy and especially for exploration
activities along the Karelian Gold Line.

 

HOLD with a target price of SEK 59 (64)

We have adjusted the shares outstanding and net debt figures with an assumption
that the offering will be fully subscribed. In addition, we have made changes to
our estimates and the SOTP valuation. The favorable gold price development is
outweighed by the dilution effect from the offering and the uncertainty
regarding the successfulness of the company’s exploration activities, the value
realization of the US assets and changes in the FX rates. We decrease our target
price to SEK 59 (64), HOLD-rating remains intact.

Open report


PIHLAJALINNA - EBITA MUTED IN THE SHORT-TERM

22.11.2022 - 09.30 | Company update

Pihlajalinna’s guidance downgrade wasn’t very big news as costs have remained
relatively high over the course of this year. Demand is strong, but short-term
upside is now more limited due to the uncertainty around FY ’23 improvement.

Read more

Q4 EBITA not to improve that much

Pihlajalinna downgraded its guidance. Top line will still increase
substantially, but FY ‘22 adj. EBITA is to decrease relative to the EUR 37.3m
comparison figure. The earlier guidance suggested flat EBITA, and we previously
estimated the figure at EUR 36.5m. We revise our Q4 EBITA estimate down to EUR
9.0m and hence now see the FY ’22 figure at EUR 33.5m. We note the EUR 7.8m
figure seen in Q4’21 was weighed down by some EUR 2m in extraordinary high
service costs within complete outsourcing contracts, and hence Pihlajalinna
should be able to achieve at least flattish y/y profitability development in
Q4’22.

EBITA is bound to improve next year

Pihlajalinna has scaled up its capacity over the past year; volumes and revenue
have followed pretty much according to plan. Pohjola Hospital burdened
profitability in H1, while new clinic ramp-ups continued to drag Q3 results.
Personnel absence-related costs moderated a bit in Q3 but were still EUR 1m.
Lower Covid-19 services revenue was another headwind. Pohjola Hospital cost
synergies have already been realized and the units are profitable, but there’s
still work to be done in driving higher capacity utilization rates across the
network and especially within high value-added categories such as surgery
procedures. Demand continues at a high level and Pihlajalinna has scope to raise
prices; in our view profitability is set to follow up with top line next year,
however we revise our FY ’23 profitability estimates down by EUR 3m.

Uncertainty around FY ’23 improvement pace limits upside

We make no changes to our revenue estimates as in our view the update concerns
the cost levels which have continued relatively high. Pihlajalinna is valued at
14x EV/EBIT on our FY ’23 estimates, which is still not a high figure relative
to peers while we estimate the respective EBIT margin almost 300bps below
peers’. Long-term potential should remain large, but uncertainty around costs
limits upside at least in the short-term perspective. Our updated TP is EUR 10
(11); we retain BUY rating.

Open report


ADMINISTER - BUMPING UP GROWTH

15.11.2022 - 09.45 | Company update

Administer acquired financial and HR administration services specialist Econia,
taking a clear leap towards its 2024 net sales target of EUR 84m.

Read more

Acquired Econia and adjusted 2022 guidance
Administer announced the acquisition of Econia Ltd. Econia is a company
specialised in financial and HR administration and international services
operating in 13 locations in Finland and in Fuengirola, Spain. Econia’s pro
forma net sales and EBITDA in 2021 were EUR 19.1m and EUR 1.7m, with
corresponding predicted 2022 figures at around EUR 25m and EUR 3m. Growth has
been aided by acquisitions, but organic growth has to our understanding been
solid. The debt-free purchase price of the acquisition is EUR 20m, of which EUR
18m is paid in cash at the time of closing, with an additional purchase price of
max. EUR 4m to be paid by June 30th, 2025. The acquisition is funded by IPO
proceeds and long-term debt of EUR 13m.

Back on track to achieve growth targets
In conjunction with the acquisition Administer adjusted its 2022 guidance for
net sales to EUR 50-52m (prev. 47-49m) and the EBITDA-margin to 5.5-7.5%
(5.0-7.0%). The adjustment is purely related to the completed acquisition and
according to management no notable deviations in the underlying business have
been seen from what was communicated in the H1 earnings release. The acquisition
puts Administer well back on track to achieve its 2024 net sales target of EUR
84m, also providing an additional avenue for growth internationally. Econia will
also aid near-term profitability and we expect Administer to move to
double-digit EBITDA-margins in 2023. Reaching the 2024 target of 24%, however,
still requires significant internal actions to improve efficiency.

BUY with a target price of EUR 3.6
Current valuation levels (0.6x 2023e EV/sales) continue to suggest essentially
no expectations of improvement potential. We see continued support for margins
picking up through acquisition synergies and improved efficiency, although we
still find the 24% EBITDA-margin target challenging.

Open report


VAISALA - UPDATE ON VAISALA’S W&E BUSINESS

14.11.2022 - 13.55 | Company update

We attended Vaisala’s investor event in its wind Lidar R&D and production
facilities in Saclay, France. The information we got further strengthened our
view of W&E’s long-term potential.

Read more

Profitability is currently driven by flagship businesses
Vaisala introduced its W&E business area and its strategy more in detail at its
investor event in Saclay, France. W&E aims for growth through its growing and
emerging businesses while the profitability is currently driven by the flagship
businesses, i.e., product and project sales in meteorological and aviation
markets. W&E is a clear market leader in selected niche markets in its flagship
businesses but the growth opportunities in named business areas are highly
restricted. Vaisala continues to selectively invest in its flagship markets, but
the growth potentials lie in the rest of its businesses.

From hardware to software
While in the past Vaisala was known for its highly accurate measurement
hardware, a general trend in W&E’s growing and emerging businesses is an
increased share of software which nowadays drives a significant part of the
value-add. With certain acquisitions made during the past, Vaisala has gained
access to technologies, such as Lidars and developer tools, with which it's
aiming to gain an annual double-digit topline growth. Growing businesses consist
of from-distance measurements, i.e., Lidar equipment as well as air quality
solution and road weather and environmental solutions. Meanwhile, in its
emerging businesses (Xweather), W&E provides only subscription-based data and
solution services combining hardware and software. Xweather’s profitability
potential is notable given its scalable platform, but the business is still in
its early stages. The presentations of W&E’s growing and emerging businesses
further strengthened our impression of W&E’s future potential from both growth
and profitability perspective.

Investment case unchanged for now
Although W&E’s prospects seem bright now, the uncertainty concerning economic
development keeps us cautious and we remain to wait for the company’s further
comments on visibility to 2023. We currently expect low single-digit growth in
23 due to strong comparison periods as well as weakening economic conditions.
With valuation remaining elevated and our estimates intact, we retain our
HOLD-rating and TP of EUR 40.0.

Open report


PIHLAJALINNA - EARNINGS TO IMPROVE A LOT IN Q4

07.11.2022 - 09.35 | Company update

Pihlajalinna’s Q3 ramp-up costs were larger than expected, but Q4 should already
show a clear y/y EBITA improvement.

Read more

There were still many profitability headwinds in Q3

Pihlajalinna’s Q3 revenue was EUR 165m, compared to the EUR 167m/165m Evli/cons.
estimates. The 17.5% growth was driven by corporate and private volumes, which
grew strong also on an organic basis when considering the headwind from lower
Covid-19 services revenue (e.g. surgical procedures grew 61%). The mix was
tilted less towards public customers, where profitability improved within
outsourcing agreements due to efficiency measures, than we estimated. Private
clinic capacity ramp-up costs, in addition to lower Covid-19 revenue, limited
profitability as fixed costs were high during the summer months.
Personnel-absence related costs, at EUR 1.0m, were lower than before, however
there’s still uncertainty as to how these will develop in Q4. The EUR 9.4m adj.
EBITA missed our estimate by EUR 2.6m, while the EUR 7.3m adj. EBIT was EUR 2m
below the consensus.

Q4 and FY ’23 EBITA are set to see meaningful gains

Pihlajalinna retained its guidance, which now implies ca. EUR 5m y/y EBITA gain
for Q4. The comparison figure suffered a EUR 2m hit from high costs within
complete outsourcing contracts, so Pihlajalinna should still be able to reach a
steep y/y improvement especially when ramp-up costs are to no more burden Q4
that much. Q4 also has some favorable seasonal demand patterns going on,
including influenza vaccines, and the capacity additions (high value-added
categories like surgical services) should have a significant EBITA contribution
throughout next year. Pihlajalinna’s growth strategy is focused on major Finnish
urban regions and increasingly relies on remote service paths to drive procedure
volumes. Pohjola Hospital cost synergies have been taken in and hence the focus
there is also on driving higher volumes. Pihlajalinna has already made some
upward pricing adjustments and the tailwind continues to support next year.

Uncertainty around improvement pace, yet plenty of upside

The capacity drive-up has lifted indebtedness, but Q4 should provide a clear
demonstration of higher EBITA. Pihlajalinna is valued around 13x EV/EBIT on our
FY ’23 estimates, where the 5.6% EBIT margin estimate is still well below peers’
and long-term potential. Our new TP is EUR 11.0 (12.5); retain BUY rating.

Open report


EXEL COMPOSITES - GROWTH AND EBIT POTENTIAL REMAIN

04.11.2022 - 09.05 | Company update

Exel’s Q3 results didn’t meet our estimates, but long-term EBIT potential
remains significant even if it materializes somewhat slower than we previously
estimated.

Read more

Top and bottom line a bit shy but no major issues

Exel’s Q3 revenue was EUR 33.8m vs our EUR 37.5m estimate. The two largest
regions, Europe and North America, continued to grow at a rate of some 5% y/y
while Asia-Pacific declined by 6%. The largest customer segments landed close to
our estimates, while relative softness within the smaller segments added up and
hence Exel’s volumes were not quite as high as we expected. The relative lack in
volumes also left the EUR 1.8m adj. EBIT muted vs our EUR 2.7m estimate. The
summer months were quiet in terms of new orders however the levels have begun to
improve over the autumn. Exel left its guidance unchanged; in our view Q4 EBIT
is set to improve y/y as the comparison figure is low, while there should be
potential for at least some improvement q/q.

Long-term CAGR should remain around 5-10%

Exel’s long-term drivers are in place as before and we believe the company has
been able to find the right types of customer accounts. The 6.7% adj. EBIT
margin seen this year is not too bad, yet there should be plenty of upside left
beyond that level. The consolidation of the two Chinese plants yields annual
cost savings of EUR 0.7m, while wind power is likely to remain an important
driver next year. The Indian JV may prove useful in this respect. The 24% growth
seen last year was a rate very difficult to sustain for long, and Exel’s top
line may not grow much this year, but in our view Exel’s accounts should still
support long-term CAGR of some 5-10%. Such rates, combined with further margin
upside, mean there’s still meaningful EBIT potential left.

Valuation not demanding even if growth slows a bit

Exel is valued at slightly above 8x EV/EBIT on our FY ’23 estimates, which is
not a particularly high level considering our respective 7.5% EBIT margin
estimate is well below the long-term benchmark level of 10% the company has been
able to touch on a few occasions with significantly lower top line. In our view
Exel’s key customer accounts could help the company grow even in a more
challenging macro environment, however short order visibility is one factor
limiting earnings multiples potential. We update our TP to EUR 6.5 (8.5) and
retain our BUY rating.

Open report


PIHLAJALINNA - Q3 EBIT NOT QUITE WHERE ESTIMATED

04.11.2022 - 08.30 | Earnings Flash

Pihlajalinna’s Q3 revenue landed close to estimates, whereas profitability came
in on the soft side. In our view the roughly EUR 2m miss in profitability could
be at least partly attributable to capacity ramp-up costs.

Read more

 * Pihlajalinna Q3 revenue was up 17.5% y/y to EUR 165.2m, compared to the EUR
   166.8m/164.9m Evli/consensus estimates. Organic growth was 3.3%. Corporate
   customers landed at EUR 52.8m vs our EUR 51.2m estimate, while private
   customers amounted to EUR 23.9m vs our EUR 21.4m estimate. Public sector
   customers were EUR 106.3m, compared to our EUR 111.9m estimate. Private
   clinic customer volumes grew 47% y/y (16% on an organic basis), while remote
   services use increased by 34%.
 * Covid-19 services revenue amounted to EUR 2.3m, a decrease of EUR 9.5m y/y.
   Organic growth would have been 10.0% without Covid-19 services.
 * Adjusted EBITDA was EUR 18.9m vs the EUR 20.5m/20.3m Evli/consensus
   estimates, whereas adjusted EBITA was EUR 9.4m vs our EUR 12.0m estimate.
   Adjusted EBIT landed at EUR 7.3m, compared to the EUR 10.0m/9.2m
   Evli/consensus estimates. Sickness-related personnel absences caused
   operational challenges and cost some EUR 1.0m in Q3. The costs of public
   services within complete outsourcing agreements also remained at a fairly
   high level.
 * Pihlajalinna guides FY ’22 revenue to increase substantially and adjusted
   EBITA to be on a par with 2021 (unchanged).

Open report


ELTEL - HIGH GROWTH, EARNINGS TO FOLLOW

03.11.2022 - 16.00 | Company update

Eltel is likely to grow at high single-digit rates from here, but valuation
already largely anticipates improving EBIT.

Read more

Growth and new orders, inflation still a major issue

Eltel’s Q3 revenue grew 7% y/y to EUR 207m vs the EUR 202m/201m Evli/cons.
estimates. We find the top line beat was attributable to Norway, which grew 16%.
Eltel has recently announced many new contracts, one-third of which are new
business, and the EUR 406m orders will help EBIT to bottom out especially when
they reflect higher costs. Inflation will, however, have a negative effect of
more than EUR 10m this year. Q3 produced an EBIT of EUR 4.1m vs the EUR
3.2m/3.4m Evli/cons. estimates. The inflation challenge may already be easing a
bit, but there are additional challenges such as employee turnover. Certain new
projects may also come with a learning curve; e.g. Norwegian Q3 profitability
was negatively impacted by the mix shift to more remote and smaller
Communication projects.

Demand should support high single-digit growth rates

The Q3 report produced no big surprises in the sense that demand was known to be
high, as highlighted by the many new contract announcements (further Power
agreements have been announced after Q3). Customer investment levels are
rebounding after the pandemic, but inflation is more widespread than previously
estimated and its precise effect on 2-3 year-long frame contracts is hard to
anticipate. Employee turnover is a particular problem in Sweden, but labor
shortage issues extend to other countries as well. Profitability development
hence remains highly uncertain for at least a couple of more quarters. Long-term
demand and profitability drivers are in place like before for both Power and
Connectivity. Eltel also announced its aim to capture 10% of the Finnish wind
power market by 2025.

Valuation unchallenging from long-term margins view

Valuation isn’t very challenging as EBIT is bottoming out this year, while
growth and inflation compensation are likely to drive margins for at least a
couple of years. Growth should continue at high single-digit rates from Q4 on,
yet we find the 11x EV/EBIT valuation, on our FY ’23 estimates, still neutral
relative to peers. Eltel’s EBIT potential extends beyond that, and the 6x
EV/EBIT on our FY ’24 estimates isn’t expensive but remains too far in the
future. Our new TP is SEK 7.0 (9.0); we retain our HOLD rating.

Open report


EXEL COMPOSITES - Q3 FIGURES A BIT SOFT

03.11.2022 - 09.30 | Earnings Flash

Exel’s Q3 results came in soft relative to our estimates. There appears to be
nothing particularly dramatic, but both top and bottom line landed relatively
low after the strong Q2 report.

Read more

 * Exel Q3 revenue grew by 1% y/y to EUR 33.8m vs our EUR 37.5m estimate. Growth
   was driven by North America while sales also increased in Europe.
 * Wind power landed at EUR 8.0m vs our EUR 8.0m estimate, while Buildings and
   infrastructure was EUR 7.8m vs our EUR 8.3m estimate. Equipment and other
   industries amounted to EUR 5.6m, compared to our EUR 6.0m estimate. Growth
   was particularly strong within Transportation.
 * Adjusted EBIT amounted to EUR 1.8m, compared to our EUR 2.7m estimate. The US
   unit performs at a better level compared to last year while Exel has
   succeeded quite well in transferring inflation to its prices.
 * Order intake was EUR 24.5m during Q3, in other words flat y/y.
 * Exel guides FY ’22 revenue to be at last year’s level and adjusted EBIT to
   increase compared to previous year (unchanged).

Open report


ASPO - HIGH RESULTS EVEN WITHOUT RUSSIA

03.11.2022 - 08.40 | Company update

Aspo achieved again very high profitability, this time even with Russia mostly
neutralized. This year makes for tough comparison figures, but valuation isn’t
that demanding.

Read more

Telko and Leipurin close to estimates, ESL drove the beat

Aspo’s EUR 160m in Q3 revenue and EUR 13m adj. EBIT were both roughly 15% above
the respective Evli/cons. estimates. Telko and Leipurin developed relatively
close to our estimates, at least in terms of profitability, while ESL’s
continued strong performance explained a large part of the earnings beat. ESL
has improved a lot in recent years due to both better operational efficiency and
market conditions; the latter factor may not provide much more tailwind going
forward, while the former still has potential especially in the long run. ESL’s
niche positioning means overall cargo demand and pricing environment remains
stable even if global spot markets have recently softened. Telko had already
close to zero EBIT contribution from Russia and Belarus while the respective top
line declines were roughly 40-50%. Leipurin exit process may lag that of Telko a
bit, but Aspo’s key figures are already relatively clean of Russia.

ESL and Telko Q3 figures are high but largely sustainable

Telko’s Western EBIT has remained strong y/y and q/q thanks to its focus on more
value-added categories. Telko’s EUR 3.7m Q3 EBIT implies an annual run-rate of
close to EUR 15m; in our view the current market environment is more likely to
soften than strengthen, but for now Telko’s demand and pricing situation stays
relatively stable. We continue to estimate Telko’s FY ’23 EBIT at above EUR 13m.
ESL has further long-term tailwinds thanks to its specialized positioning as a
critical Baltic player; improved route optimization could still support EBIT in
the short-term despite high comparison figures, while the hybrid vessels and
their pooling will naturally add to long-term EBIT potential. We expect only a
small ESL EBIT decline for FY ’23.

Telko H1 figures imply above EUR 10m EBIT gap for FY ‘23

We estimate Q4 EBIT at EUR 12.1m and believe Aspo is headed close to the upper
end of its current guidance range. FY ’23 EBIT is thus very likely to decline
after an extraordinary year. We make very little changes to our respective EUR
44.5m estimate. We still don’t view Aspo’s current EV/EBIT multiples of around
8x that challenging. We retain our EUR 9.5 TP and BUY rating.

Open report


MARIMEKKO - GROWTH CONTINUES WITH A GENTLER SLOPE

03.11.2022 - 08.10 | Company update

Marimekko's Q3 growth was solid although EBIT fell short of our expectations.
With higher-than-expected cost development, we modified our EBIT estimates
downwards.

Read more

Decent Q3 result, EBIT below market expectations
Marimekko posted solid Q3 figures. Although, due to strong comparison figures
both the top- and bottom line fell short of expectations. Group net sales grew
by 4% y/y to EUR 44.1m driven by strong int’l sales and good growth in domestic
retail sales. Domestic net sales declined by 7% y/y while int’l sales increased
by 28% y/y mostly driven by strong development of the APAC region. Increased
logistics costs pressed the gross margin slightly below that of the comparison
period. Moreover, fixed costs saw some pressure through elevated personnel and
IT-related costs which caused Q3 EBIT to fall below the comparison period. Q3
EBIT amounted to EUR 11.1m, reflecting an EBIT margin of 25.2% which was still
on a great level.

Market might challenge the company's increased ambitions
Marimekko renewed its strategy for 2023-27 and consequently raised its growth
target to 15%. Currently, against the company's growth ambitions, we see low
consumer purchasing power and slowing economy support rather single- than
double-digit growth seen during the recent years. On the other hand, increasing
brand awareness should support the demand also during uncertain times. We expect
the company to perform operatively well in a weaker market driven by lessons
learned during the pandemic, but we estimate the demand for Marimekko’s offering
to see some slowdown. For that reason, we expect the company not to reach its
growth target in the coming years.

Valuation remains favorable
We lowered our estimates, driven by higher-than-expected cost pressures. Despite
decreased EBIT estimates, we see upside potential in Marimekko’s current
valuation. Currently, Marimekko is valued with 23E EV/EBIT of 11x while we, with
our new target price, value the company with a corresponding multiple of 12x.
Reflecting estimate adjustments, we adjust our TP to EUR 10.0 (prev. 12.0). With
a moderate valuation, we retain our BUY-rating.

Open report


ASPO - ANOTHER STRONG QUARTER

02.11.2022 - 10.00 | Earnings Flash

Aspo’s Q3 results topped estimates. In our view the beat was driven by ESL,
where Q3 was again a very strong quarter.

Read more

 * Aspo Q3 revenue landed at EUR 160.1m vs the EUR 141.8m/143.5m Evli/consensus
   estimates.
 * Adjusted EBIT amounted to EUR 13.0m, compared to the EUR 11.3m/11.1m
   Evli/consensus estimates.
 * ESL Q3 revenue was EUR 65.0m vs our EUR 59.8m estimate, while EBIT amounted
   to EUR 9.7m, compared to our EUR 8.2m estimate. Contract traffic demand
   remained strong over the quarter while there was some softening in spot
   market rates towards the end of Q3, the energy industry being an exception.
 * Telko revenue amounted to EUR 60.5m, compared to our EUR 56.7m estimate.
   Comparable EBIT stood at EUR 3.7m vs our EUR 3.8m estimate. Plastics prices
   declined, especially within volume plastics, while chemicals prices declined
   during Q3 but stabilized towards the end of the quarter.
 * Leipurin top line was EUR 32.3m vs our EUR 25.3m estimate, while EBIT landed
   at EUR 0.6m vs our EUR 0.8m estimate.
 * Other operations cost EUR 0.9m, compared to our EUR 1.5m estimate.
 * Aspo guides comparable EBIT to be EUR 52-57m in FY ’22 (unchanged).

Open report


ELTEL - Q3 LANDED A BIT ABOVE THE ESTIMATES

02.11.2022 - 09.30 | Earnings Flash

Eltel’s Q3 results were somewhat above our and consensus estimates. Demand is
now strong and it helps to compensate for high inflation, however Q3 is a
seasonally favorable quarter and there are still uncertainties related to
improvement pace, including labor shortage issues.

Read more

 * Eltel Q3 revenue grew by 7% y/y to EUR 207.0m vs the EUR 201.8m/201.3m
   Evli/consensus estimates. Growth was attributable to Norway, Sweden and
   Finland while Denmark remained flat. Eltel also signed agreements worth a
   combined EUR 406m during the quarter, including one of Eltel’s largest fiber
   contracts ever. Workforce shortages are an issue, however high demand also
   helps to increase prices in tender offers.
 * EBIT landed at EUR 4.1m, compared to the EUR 3.2m/3.4m Evli/consensus
   estimates. Operative EBITA was EUR 4.1m, compared to our EUR 3.3m estimate.
   Profitability was burdened by increased costs and low utilization due to high
   sick-leave rates and employee turnover, while administrative costs were lower
   than in the comparative period.
 * Finland’s profitability remained flat y/y and was helped by a solid
   performance in Communication. Swedish and Danish profitability levels also
   remained roughly flat, while margins in Norway declined due to a change in
   production mix.
 * Eltel does not provide guidance for FY ’22.

Open report


MARIMEKKO - GROWTH RATE SLOWED DOWN AS EXPECTED

02.11.2022 - 09.05 | Earnings Flash

Marimekko delivered solid Q3 figures. Net sales came in with single-digit growth
and relative profitability was on a robust level.

Read more

 * Group result: Marimekko’s net sales came in slightly below expectations and
   grew by 4% y/y to EUR 44.1m (45.0/45.3m Evli/cons.). The growth was driven by
   both Int’l sales and retail sales in Finland. Adj. EBIT was clearly below our
   expectations and amounted to EUR 11.1m (25.2% margin) (13.0/12.3m
   Evli/cons.). Profitability was negatively affected by elevated fixed costs
   (increased IT-investments and personnel costs) and weaker gross margin
   (increased logistics costs and elevated discounts).  In turn, the
   profitability was supported by favorable sales-mix and pricing. EPS amounted
   to EUR 0.22 (0.25/0.24 Evli/cons.).
 * Finland declined by 7% y/y to EUR 26.7m (Evli: 29.1m) due to weaker wholesale
   deliveries which the company was already guided. However, retail sales saw
   solid 10% growth.
 * Int’l grew strongly by 28% y/y to EUR 17.4m and came in above our
   expectations (Evli: 15.9m). The growth was supported by retail and wholesale
   sales in the APAC region as well as abnormal wholesale deliveries compared to
   Q3’21. The growth was also strong in Scandinavia and EMEA region.
 * 2022 outlook: Domestic sales are expected to grow, but wholesale deliveries
   to be below that of the comparison period. The APAC region and international
   sales are expected to increase clearly on the comparison period. In total,
   net sales are expected to grow, but the growth pace to slow down in H2’22.
   Licensing income is expected to be above comparison period.
 * FY22 guidance intact: expecting net sales to grow and an EBIT margin between
   17-20%.
 * Analyst comment: Although the result came in below our expectations, the rate
   of int’l sales growth surprised us positively which we see crucial for
   Marimekko’s long-term success.

Open report


PIHLAJALINNA - PROFITABILITY GAINS TOWARDS NEXT YEAR

01.11.2022 - 09.40 | Preview

Pihlajalinna reports Q3 results on Nov 4. We still expect Q3 EBITA to have
remained a bit muted, but Q4 should see earnings growth while multiples and
margins imply upside.

Read more

High growth to have continued in Q3, EBITA flat y/y

Pihlajalinna grew strong in Q2, due to organic and inorganic growth within
corporate and private customers, and we wouldn’t expect Q3 to have been much
different in this respect. Capacity has increased a lot over the past few
quarters, while Q3 still saw an increase albeit a more marginal one. Demand has
kept up with the supply increases, and this should continue to be the case going
forward even with self-paying private customers as Pihlajalinna is the lowest
cost provider; the company has done some price hikes earlier this year, while
prices are to rise further in H2 and especially within private customers next
year. We don’t thus expect the inflationary environment to pose major hurdles as
Pihlajalinna should be positioned to find compensation for e.g. higher energy
costs (which are often not that significant except for certain specialty
practices). We estimate Q3 revenue to have grown 19% y/y to EUR 166.8m and see
EBITA at EUR 12.0m.

Q4 EBITA should see a significant y/y increase

We don’t expect EBITA to have yet increased y/y, despite high growth and
positive results from Pohjola Hospital, as we understand employee sick leave
rates to have remained relatively high in Q3 although a bit more moderate than
in H1. We continue to expect further improvements in capacity utilization rates
to drive Q4 EBITA to a gain of some EUR 3m y/y. Our H2 EBITA estimate is in line
with guidance; we don’t expect Pihlajalinna to make changes to its guidance at
this point, but in our view Q4 results could still end up driving FY ’22 EBITA
higher than the current guidance implies. In any case, longer term earnings
drivers are in place; Pihlajalinna has plenty of margin potential left as demand
picks up while Pohjola Hospital continues toward above 20% EBITDA margins.

Valuation very much on the undemanding side

Pihlajalinna is unlikely to make further M&A moves in the short and medium term
as organic growth potential remains plentiful. The 12x EV/EBIT valuation, on our
FY ’23 estimates, isn’t challenging as we estimate the margin at 6%, still well
below many peers. We retain our EUR 12.5 TP and BUY rating.

Open report


ETTEPLAN - DOWNGRADE TO HOLD

01.11.2022 - 09.15 | Company update

Etteplan’s operative performance was good in Q3 although bottom-line figures
were weaker than expected. The market outlook appears to be taking some toll on
growth ambitions and uncertainty is increasing. We lower our rating to HOLD
(BUY) with a target price of EUR 13.5 (15.0).

Read more

Operatively good quarter, bottom-line below estimates
Etteplan reported operatively good Q3 results. Net sales in Q3 were EUR 80.3m
(EUR 78.1m/78.4m Evli/Cons.), with growth of some 20% y/y (12.0% organic excl.
FX). EBIT amounted to EUR 5.8m (EUR 4.7m/5.2m Evli/cons.) and some EUR 6.5m
excl. one-offs (Evli EUR 5.7m). Bottom-line figures were below our expectations,
as financial items relating to the Semcon offer were clearly larger than
anticipated. As a result, despite the better operating performance, EPS was
negative at EUR -0.03 (EUR 0.04/0.01 Evli/cons.). Etteplan adjusted it guidance,
expecting revenue of EUR 345-360m (340-370m) and EBIT of EUR 28-31m (28-32m).

Taking growth ambitions down a notch
Etteplan’s comments related to the market outlook were slightly on the negative
side. Further softness is seen in China and Etteplan has also pre-emptively
taken a more conservative approach to recruitments. Expectations are still good
for the remainder of the year and signs of a significant decline in demand
remain somewhat limited, although fluctuations in different customer segments
are high and visibility going forward is lower. Our 2022 operative estimates are
slightly up given the better than anticipated Q3 figures, currency hedging still
poses a risk for the bottom line. We have also slightly lowered our estimates
for the coming years based on an anticipated slow-down in growth.

HOLD (BUY) with a target price of EUR 13.5 (15.0)
Uncertainty going forward is clearly increasing, and although we for now do not
see a reason to interpret the company’s comments in Q3 as indicative of any
major downswing, some added caution is warranted. We lower our TP to EUR 13.5
(15.0) and our rating to HOLD, valuing Etteplan at ~14.0x 2023e P/E.

Open report


ENERSENSE - ORGANIC AS WELL AS INORGANIC GROWTH

31.10.2022 - 09.45 | Company update

Enersense Q3 report didn’t contain major surprises. Profitability is set to
improve with growth and inflation compensation, but at least Q4 may see muted
bottom line.

Read more

Not many surprises while order backlog is now tall

Q3 revenue was EUR 64.4m vs our EUR 65.4m estimate. The 10.5% y/y growth was
driven by all segments except Smart Industry, where the lower volumes of the OL3
project left a gap soon to be filled by the EUR 200m Helen contract. Low
volumes, inflation, and Offshore ramp-up hurt margins, while the segment’s
EBITDA gained from EUR 2.1m in items due to a capital gain as well as a change
to the considerations related to an acquisition. Enersense’s headline EUR 4.3m
EBITDA was above our EUR 2.0m estimate, but in line considering the one-offs.
There were some items, such as Power’s costs with Megatuuli, which weren’t there
to burden the comparison period. Connectivity EBITDA increased, however orders
remained muted for now as top line is driven by long-term agreements, some of
which should be signed soon. Meanwhile Power backlog doubled.

Both organic and inorganic growth to be seen

We would expect Enersense’s organic growth to help it reach healthy
profitability levels in FY ’23, while the Baltics are likely to continue to
dilute margins for a while. The Voimatel deal’s EUR 130m revenue and EUR 4m
EBITDA, at an EV of EUR 10m, would add a lot of value with significant cost
synergies but is yet to be approved by the competition authorities. The
expansion to EV charging technology is another strategic addition. The initial
Unified Chargers price tag is negligible, while it remains to be seen just how
much value the deal will add (competition includes e.g. Kempower). The ERP
project will continue next year while Offshore projects should begin to
contribute then.

Q4 margins uncertain, but bound to get better next year

In our view Enersense is positioned for at least a high single-digit growth next
year. Enersense’s guidance suggests there’s still a lot of uncertainty around Q4
profitability, in our view due to inflation and the fact that seasonal project
patterns have been different this year. Enersense is valued some 5x EV/EBITDA
and 10x EV/EBIT, which are not high levels compared to peers while there remains
uncertainty around the improvement pace. We retain our EUR 6.0 TP and HOLD
rating.

Open report


ETTEPLAN - GOOD OPERATIONAL PERFORMANCE

31.10.2022 - 09.40 | Earnings Flash

Etteplan's net sales in Q3 amounted to EUR 80.3m, slightly above our and
consensus estimates (EUR 78.1m/78.4m Evli/cons.). EBIT amounted to EUR 5.8m,
above our estimates and above consensus estimates (EUR 4.7m/5.2m Evli/cons.).
Guidance for 2022 specified: revenue EUR 345-360m (EUR 340-370m) and EBIT 28-31m
(EUR 28-32m).

Read more

 * Net sales in Q3 were EUR 80.3m (EUR 66.9m in Q3/21), slightly above our
   estimates and consensus estimates (EUR 78.1m/78.4m Evli/Cons.). Growth in Q3
   amounted to 20% y/y.
 * EBIT in Q3 amounted to EUR 5.8m (EUR 4.7m in Q3/21), above our estimates and
   consensus estimates (EUR 4.7m/5.2m Evli/cons.), at a margin of 7.2%.
 * EPS in Q3 amounted to EUR -0.03 (EUR 0.14 in Q3/21), below our estimates and
   consensus estimates (EUR 0.04/0.01 Evli/cons.).
 * Net sales in Engineering Solutions in Q3 were EUR 41.9m vs. EUR 40.1m Evli.
   EBITA in Q3 amounted to EUR 4.3m vs. EUR 3.7m Evli. 
 * Net sales in Software and Embedded Solutions in Q3 were EUR 22.0m vs. EUR
   22.0m Evli. EBITA in Q3 amounted to EUR 2.2m vs. EUR 2.0m Evli. 
 * Net sales in Technical Documentation Solutions in Q3 were EUR 16.3m vs. EUR
   15.9m Evli. EBITA in Q3 amounted to EUR 1.3m vs. EUR 1.5m Evli. 
 * Guidance for 2022 (specified): Revenue is estimated to be EUR 345-360m (EUR
   340-370m) and the operating profit is estimated to be EUR 28-31m (EUR 28-32m)

Open report


FINNAIR - STILL WAY TO GO BEFORE TAKE-OFF

31.10.2022 - 09.25 | Company update

Finnair touched a milestone, but there’s more to go before EBIT reaches adequate
levels while valuation remains full.

Read more

High passenger yields drove a revenue and EBIT beat

Finnair’s Q3 revenue reached EUR 719m, clearly above the EUR 645m/667m
Evli/cons. estimates as passenger revenues were some EUR 50m higher than we
estimated. Seasonally strong Q3, including EUR 56m in other operating income
mostly attributable to wet leases, coupled with improving unit revenues helped
Finnair’s EBIT to EUR 35m vs the EUR -7m/-4m Evli/cons. estimates. In our view
the top line and EBIT beats were driven by higher than estimated passenger
yields. The positive EBIT was an important milestone for Finnair, but there’s
still distance left to go until profitability reaches a firm footing.

Improvement to continue, but not as steep as in Q3

Q3 EBIT was a major improvement q/q as passenger yields increased by some 10%
over Q2. Q4 will be a bit softer in terms of volumes; October bookings look
good, but November is seasonally soft before December’s seasonal travel volumes.
We estimate 5% q/q passenger yield decline for Q4, but high jet fuel prices
should still provide some ticket pricing tailwind in addition to a rebound in
corporate travel, which has reached around 80% of the pre-pandemic level when
adjusted for capacity. Meanwhile Finnair’s strategy includes efforts to secure
high unit revenues (e.g. the share of direct distribution has already roughly
doubled to 60%). Passenger yields are therefore likely to stay relatively high,
but there’s also uncertainty around next year’s passenger volumes as China’s
opening may be further delayed.

Valuation well anticipates long-term improvement

There’s a lot of uncertainty around factors such as yields, volumes as well as
costs (including fuel prices) going forward. Finnair should achieve a positive
FY ’23 EBIT, but it’s likely to be muted due to a certain lag in passenger
volumes and wouldn’t in any case be enough to justify current valuation, which
still isn’t cheap. Finnair’s valuation seems based on the assumption that it
will eventually catch up with peer profitability levels; valued about 12x
EV/EBIT on our FY ’24 estimates, clearly above peers while EBIT margin is to lag
by many percentage points. The assumption may be fair, but leaves Finnair pretty
much fully valued. We update our TP to EUR 0.40 (0.36); retain HOLD rating.

Open report


VAISALA - WELL POSITIONED FOR UNCERTAIN FUTURE

31.10.2022 - 08.45 | Company update

The strong demand for Vaisala’s solutions continued with the order received
increasing by 25% in Q3. Net sales saw double-digit growth and EBIT was on a
solid level. We believe Vaisala to enjoy solid growth during H2’22-H1’23 but
H2’23 being somewhat gloomy.

Read more

Orderbook was yet again on a record level
Vaisala has increased its orders received for four consecutive quarters and the
Q3 orderbook was on a record level. Q3 IM net sales grew by 22% y/y while the
growth was stronger than expected in W&E which recorded y/y growth of 18%. In
total, Q3 net sales amounted to EUR 133.3m (+20% y/y). Gross margin was hit by
continued spot-component purchases which eventually amounted to 54.7%. With
fixed costs elevated and gross margin weaker, relative profitability saw also a
slight decline. Q3 EBIT amounted to EUR 22.0m, representing a 16.5% EBIT margin.
The outlook for the near future remains bright despite the weakening economic
indicators.

2023 uncertain, but megatrends support the demand
Guidance implies growth to continue in Q4. The record orderbook provides a
foundation for H1’23 growth but the visibility to H2’23 is somewhat gloomy.
Vaisala’s resilience to possible economic slowdown is hard to estimate but the
company is exposed both for industrial investments and public spending. However,
the company operates within fields in which growth is boosted by several
megatrends. We consider these trends supporting the demand during uncertain
times. In addition, the energy crisis in Europe will likely increase investments
in renewable energy, power, and gas industries in which the company already
operates.

Valuation remains elevated
We made no significant changes to our estimates. We see Vaisala developing
favorably in Q4’22 and H1’23 but expect W&E to experience headwinds in H2’23. In
total, we expect 23E group net sales to grow only by 2.5% but EBIT margin to
further improve due to the margin impact of improved component availability.
Vaisala’s 23E valuation remains somewhat elevated. We don’t see significant room
for an upside in the share price, but we enjoy the ride with the high-class
business of Vaisala. We retain our HOLD-rating and TP of EUR 40.0.

Open report


ENERSENSE - RELATIVELY GOOD DEVELOPMENT

28.10.2022 - 12.30 | Earnings Flash

Enersense’s Q3 profitability topped our estimates as EBITDA development was
favorable in all other segments except International Operations, where we
believe inflation continues to be more of a problem than in Finland.

Read more

 * Enersense Q3 revenue grew 10.5% y/y to EUR 64.4m, compared to our EUR 65.4m
   estimate. Revenue grew in all other segments except Smart Industry, where the
   18% y/y decline was mainly due to the lower volumes of the Olkiluoto 3
   project. Power and Connectivity top lines were close to our estimates.
 * Adjusted EBITDA landed at EUR 4.3m vs our EUR 2.0m estimate, while EBIT was
   EUR 1.9m vs our EUR -0.3m estimate. EBITDA improved in Power as well as
   Connectivity while it remained flat in Smart Industry. International
   Operations saw EBITDA decrease due to high inflation in the Baltics. Q3
   EBITDA was burdened by investments in offshore wind power and a new ERP
   system to the tune of EUR 1.0m. Enersense has managed to negotiate price
   increases for new as well as existing contracts to compensate for inflation.
 * Order backlog amounted to EUR 385m at the end of Q3, while it was EUR 272m a
   year ago. Smart Industry order backlog increased significantly, including the
   EUR 100m agreement with the energy company Helen (EUR 200m including the
   options to extend the agreement). Development was strong also in Power.
 * Enersense guides FY ’22 revenue to be in the EUR 245-265m range and adjusted
   EBITDA EUR 6-12m (unchanged).

Open report


CONSTI - STEADY DEVELOPMENT IN A DIFFICULT MARKET

28.10.2022 - 09.45 | Company update

Consti reported Q3 figures that were in line with our estimates. The company was
able to defend its margins in a difficult market environment. Consti’s order
backlog decreased slightly but remains at healthy levels, which supports the
company’s near-term development. Although the construction market outlook is
quite grim, the near-term growth outlook for renovation construction remains
decent. We retain our BUY-rating and TP of EUR 11.0.

Read more

Q3 results in line with our estimates

Consti Q3 results were in line with our estimates. Net sales in Q3 were EUR
79.0m (EUR 76.0m in Q3/21), in line with our and consensus estimates (EUR
79.8m/79.6m Evli/Cons.). Sales grew 4.0% y/y. Adj. operating profit in Q3
amounted to EUR 3.3m (EUR 3.1m in Q3/21), in line with our and consensus
estimates (EUR 3.2m/3.3m Evli/cons.). The company was able to defend its margins
in a difficult market environment as the operating margin stood at 4.2% (4.1% in
Q3/21). The guidance for operating profit is intact at EUR 9-13m for FY 2022.

 

Strong backlog, market remains uncertain

Even though order intake and backlog decreased slightly y/y, both were still at
a healthy level supporting the company’s near-term development especially during
the rest of the year. According to the CFCI estimates, the Finnish renovation
construction market is expected to grow 2% in 2023 while Euroconstruct expects
volume growth of 1.3%. A survey study conducted by Talotekniikkaliitto in
September, however, pointed towards a slower market development especially in
the non-residential renovation building technology. The market environment also
remains uncertain due to the higher construction costs and rising interest
rates, although the labour-intensity of renovation alleviates some concerns.

 

BUY with a target price of EUR 11.0

Consti has been able to perform well in the turbulent market and the healthy
backlog supports continued good near-term development. We find the story still
attractive because of the supportive long-term drivers and undemanding
valuation.

Open report


SOLTEQ - NEW CHALLENGES MET

28.10.2022 - 09.45 | Company update

Solteq’s Q3 was somewhat below our expectations and most notably, challenges
were seen now also in Solteq Digital. We adjust our TP to EUR 1.2 (1.5), rating
still HOLD.

Read more

New challenges from Solteq Digital
Solteq reported Q3 results below our already rather low expectations. Net sales
declined 3.7% y/y to EUR 14.4m (Evli EUR 14.7m). The operating profit and adj.
operating profit amounted to EUR -5.0m and -0.5m respectively (EUR 1.1m/1.2m in
Q3/21), below our estimates (Evli EUR -4.1m/0.3m). Solteq Software’s EBIT was
negative as expected while the modest growth was a positive. Solteq Digital
unexpectedly showed a rather notable 9.6% y/y growth decline and profitability
as a result was also on the weaker side. Problems appear to relate market demand
and some delays and hesitation in customer activity.

Near-term outlook not the best
With the added woes of Solteq Digital, the near-term for Solteq looks rather
challenging. Fortunately, Solteq Software showed some signs of the product
development related challenges being alleviated and customer demand remains
healthy. Nonetheless, with the problems being more fundamental in nature a clear
recovery appears more likely to materialize during H1/2023. The market sentiment
driven challenges in Solteq Digital are quite worrisome, with the segment having
been the main driver of profitability. The challenges are likely to continue to
some extent going forward as customers review investment needs, but a larger
deterioration still appears unlikely supported by necessity-based investments.
With the challenges, our expectations for 2023 remain on the softer side.
Visibility is also subdued by the market environment and the pace at which
Solteq Software, with the key Utilities business, is able to ramp-up growth
again.

HOLD with a target price of EUR 1.2 (1.5)
With the added concerns and reduced visibility near-term upside remains somewhat
limited although Solteq still exhibits significant and proven potential. On our
estimates valuation upside relies on mid-term potential or significant
improvements next year. We lower our TP to EUR 1.2 (1.5), HOLD-rating intact.

Open report


VAISALA - THE MOMENTUM CONTINUED IN Q3

28.10.2022 - 09.40 | Earnings Flash

Preliminary figures given with the positive profit warning, Vaisala’s Q3 result
came in strong and included no large surprises. Net sales saw a double-digit
growth while EBIT remained on a good level.

Read more

 * Group result: Orders received grew nicely by 25% and the orderbook was 14%
   higher than in the previous year. Net sales grew by 20% y/y to EUR 133.3m
   (133.3/133.3m Evli/cons.). The growth was driven by both Vaisala’s business
   units. Spot-component impact continued stronger than a year ago, and gross
   margin fell short that of the previous year. EBIT slightly improved and
   amounted to EUR 22.0m (22.0/22.0m Evli/cons.), EBIT margin of 16.5%. EPS
   amounted to EUR 0.44 (0.45/0.47 Evli/cons.).
 * Industrial measurements (IM): Orders received grew by 30% (FX: 21%) y/y and
   the orderbook was 60% higher than a year ago. Net sales increased by 22% (FX:
   14%) y/y to EUR 57.6m (Evli: 59.9m). A weaker gross margin had an impact on
   the EBIT margin which amounted to 25.3%. Profitability was under pressure of
   increased material and fixed costs.
 * Weather and Environment (W&E): Orders received increased by 21% (FX: 14%) y/y
   and the orderbook was 6% higher than a year ago. Net sales grew by 18% (FX:
   11%) y/y to EUR 75.7m slightly beating our estimates (Evli: 73.4m).
   Spot-component purchases weakened the gross margin, but surprisingly EBIT
   margin improved to 9.9% against our expectations.
 * Market outlook: High-end industrial instruments, life science, power
   industry, and liquid measurements are expected to grow. Meteorology and
   ground transportation are expected to be stable. Aviation is expected to
   recover towards pre-pandemic level. Renewable energy market is expected to
   continue to grow. The global shortage of components is expected to continue
   during Q4’22 causing additional material costs.
 * Guidance intact (revised on 14th Oct): Net sales of EUR 500-520m and EBIT of
   62-72m.

Open report


FINNAIR - REACHED POSITIVE EBIT

28.10.2022 - 09.30 | Earnings Flash

Finnair’s Q3 results came in clearly above estimates as strong development in
unit revenues drove top line as well as profitability. Finnair turned in a
positive EBIT for the first time since Q4’19.

Read more

 * Q3 revenue was EUR 719.2m, compared to the EUR 645.0m/666.6m Evli/consensus
   estimates. Good development in unit revenues supported top line, and total
   passenger revenue was some EUR 50m higher than we estimated. The performance
   was also helped by the fact that Q3 is seasonally the strongest quarter.
 * Adjusted EBIT amounted to EUR 35.2m vs the EUR -7.3m/-4.1m Evli/consensus
   estimates.
 * Fuel costs were EUR 242m vs our EUR 215m estimate, while staff costs amounted
   to EUR 117m vs our EUR 115m estimate. All other OPEX+D&A amounted to EUR
   381m, compared to our EUR 353m estimate.
 * Cost per Available Seat Kilometer was 8.18 eurocents vs our estimate of 7.81
   eurocents.
 * Finnair expects to operate an average capacity of around 70% (ASK) in Q4’22
   in comparison to the figure in Q4’19. Leases of aircraft and crew would bring
   the total deployed capacity to about 80%. Strong travel demand should
   continue in the short-term and thus support unit revenues as in the summer
   months of 2022.

Open report


SRV - TOUGHER TIMES AHEAD

28.10.2022 - 09.20 | Company update

SRV’s Q3 was rather uneventful and construction profitability remained at
reasonable levels. Near-term upside remains limited in the challenging market,
and we lower our TP to EUR 4.3 (5.0), HOLD-rating intact.

Read more

Reasonable profitability given market conditions
SRV’s Q3 results were largely rather uneventful. Revenue in Q3 was EUR 186.8m
(EUR 176.7m/194.0m Evli/Cons.), near previous year levels. The operating profit
amounted to EUR 5.5m (EUR 3.1m/2.7m Evli/cons.). The difference was due to
capital gains from the sale of a commercial centre and the operating profit
margin in construction was slightly below our expectations (2.6%/2.9%
act./Evli). Profitability was supported by improved controllability of projects,
successful inflation control and ensuring the availability of materials. The
order backlog at the end of the review period stood at EUR 717.1m, down some 30%
y/y. SRV announced the initiation of change negotiations to meet the current
market demand situation.

Heading into challenging market conditions
SRV is heading into a quite tough market, with construction material costs and
inflation continuing to cause some hassle along with expectations of a decline
in new building construction volumes. The pipeline for business construction
appears to be somewhat fruitful but we see little support for the generally more
profitable housing construction volumes. The visibility into 2023 is weak and
currently we expect a sales decline of some 6%. There is still some potential
for margin improvement potential, although we see the current headwinds limiting
that in the short-term, and the completed financing arrangements will support
bottom-line figures.

HOLD with a TP of EUR 4.3 (5.0)
Although valuation looks cheap, with the market challenges we see little
potential for materialization of valuation upside compared with peers in the
near-term. In the mid-term, improved margins and initiation of dividend payments
could act as a catalyst, again however limited by current uncertainties. We
retain our HOLD-rating with a TP of EUR 4.3 (5.0).

Open report


VERKKOKAUPPA.COM - TOUGH TIMES AHEAD BEFORE MARKET RECOVERY

28.10.2022 - 08.15 | Company update

Verkkokauppa.com’s Q3 result came in soft as expected. The current market
includes a significant portion of uncertainty, and we find it better off to wait
for the first signs of market recovery. We downgrade our rating to SELL (HOLD)
and adjust TP to EUR 2.2 (3.5).

Read more

Topline came in above expectations, but EBIT was modest
Due to the challenging market, Verkkokauppa.com’s Q3 result came in modest. Net
sales declined by 2.3% y/y to EUR 137.8m. The decline was mostly driven by the
consumer segment and core categories. Sales grew in the Export and B2B segments.
B2B growth pace slowed down to 5% with reduced activity of SMB clients and
Export growth was mostly supported by new customers gained. Evolving categories
performed well in a challenging market and managed to grow by 3.1% y/y.
Unfavorable sales mix and increased price competition showed in a weaker gross
margin of 14.6%. The profitability was further harmed by increased cost
pressures through investments in personnel and elevated logistics costs. Q3 adj.
EBIT amounted to EUR 2.1m (1.5% margin).


2023 going to be challenging as well
The company guides for 2022: net sales of EUR 530-560m and adj. EBIT of EUR
5-9m. Lots of tasks must be done to reach the guidance since the weak market
doesn’t provide much support. At this moment, large inventory burns cash, and
the company has pressures to release capital from expanded inventories. A side
effect of inventory clearance, namely margin investments possibly hurt
profitability. We expect the inventory clearance to continue also in 2023. With
low sales volumes and existing cost pressures, we expect the profitability to
lag also in H1’23.


Negative view with elevated valuation
We decreased our estimates after the Q3 result. We see the upcoming year as
challenging and our previous 2023 estimates seemed quite optimistic. With
decreased topline estimates our 23 EBIT estimate saw a ~50% drop. We see it
challenging for the company to stay profitable in H1’23, but EBIT to notably
improve in H2’23. However, we find the current market as too uncertain. With our
revised estimates, uncertain market environment and high valuation, we downgrade
our rating to SELL (HOLD) and adjust TP to EUR 2.2 (3.5).

Open report


CAPMAN - SLIGHT HEADWINDS IN SIGHT

28.10.2022 - 08.15 | Company update

CapMan continued its good performance in Q3 and results apart from carried
interest corresponded to expectations. With some near-term softness seen in
fundraising and transaction activity, we lower our TP to EUR 3.1 (3.4),
BUY-rating remains intact.

Read more

Results apart from carried interest as expected
CapMan continued its good performance in Q3 and apart from carried interest (EUR
1.0m/5.0m act./Evli) coming in lower than we expected, the results were well in
line with our expectations. Revenue amounted to EUR 15.9m (EUR 19.7m/19.2m
Evli/Cons.) and operating profit to EUR 12.7m (EUR 16.5m/12.3m Evli/cons.).
Capital under management increased to EUR 4.9bn. Investment returns continued to
be at good levels despite valuation level decreases, aided by a few significant
exits and strong operational performance in several portfolio companies. Carried
interest was earned from Growth Equity and NRE funds.

Near-term softness seen in fundraising and transactions
In the near-term, some softness is anticipated in fundraising and transaction
activity, although the overall sentiment still remains rather solid. Alternative
asset AUM growth is forecasted to decline 3%p during 2021-2027e compared with
2015-2021, but the estimated growth of 11.9% p.a. is still at healthy levels. In
terms of our estimates, we have made slight downward tweaks to our end of year
expectations for carried interest and investment returns but otherwise no
significant changes. We expect operating profit levels of EUR 50-60m during
2022-2023e with further potential in the mid- to long-term should fundraising
activity remain at forecasted levels. Timing of carried interest realization and
investment returns remain key short-term uncertainties.

BUY with a target price of EUR 3.1 (3.4)
CapMan’s investment case continues to remain favourable in our view and
valuation still remains attractive. With some anticipated near-term softness and
the potential impact on non-recurring income we lower our TP to EUR 3.1 (3.4),
BUY-rating still intact.

Open report


CONSTI - IN LINE WITH OUR ESTIMATES

27.10.2022 - 09.45 | Earnings Flash

Consti's net sales in Q3 amounted to EUR 79.0m, in line with our and consensus
estimates (EUR 79.8m/79.6m Evli/cons.), with growth of 4.0% y/y. EBIT amounted
to EUR 3.3m, in line with our and consensus estimates (EUR 3.2m/3.3m
Evli/cons.). Guidance reiterated: operating result in 2022 is expected to be EUR
9-13m.

Read more

Consti's net sales in Q3 amounted to EUR 79.0m, in line with our and consensus
estimates (EUR 79.8m/79.6m Evli/cons.), with growth of 4.0% y/y. EBIT amounted
to EUR 3.3m, in line with our and consensus estimates (EUR 3.2m/3.3m
Evli/cons.). Guidance reiterated: operating result in 2022 is expected to be EUR
9-13m.

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SUOMINEN - RECOVERING WITH HIGHER US VOLUMES

27.10.2022 - 09.45 | Company update

Suominen’s margins remained very low in Q3, but the worst of cost pressures are
easing and continued high demand, especially in the US, should begin to drive
significant gains.

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High growth but still low profitability margins in Q3

Suominen’s EUR 131.9m Q3 revenue grew by 34% y/y and topped the EUR
123.0m/121.5m Evli/cons. estimates. Growth was attributable to higher volumes,
sales prices, and currencies in roughly equal portions. Early part of the
quarter was still difficult especially due to low volumes in the US, but August
and September were better as demand improved toward the end of Q3. There are
still account-specific differences in the US with regards to the inventory
build-up situation, but overall demand is clearly improving over the course of
Q4. Meanwhile cost pressures remained larger than we estimated as profitability
missed our estimates despite the high revenue. Gross profit was only EUR 5.2m vs
our EUR 9.2m estimate, while the EUR 5.1m Q3 EBITDA (vs our EUR 7.0m estimate)
benefited from tax credits.

US likely to continue to drive growth for some time

Americas already grew by 41% y/y to EUR 80m, while there should still be plenty
of additional capacity to utilize in the US. It remains to be seen at how high a
level Americas’ growth continues, but we would expect it to remain well above
20% for at least a couple of quarters. Meanwhile Europe’s growth should moderate
over the course of next year as sales prices are no more to increase with raw
materials prices (there’s also not that much additional capacity to utilize in
Europe). We update our Q4 revenue estimate to EUR 145m (prev. EUR 129m).

US recovery and cost compensation to drive earnings up

Q3’s relative softness and the comments regarding the pattern of demand in the
US over the quarter suggest Q4 will see steeper q/q improvement than we
previously estimated. Earnings are set to increase from here, however
considerable uncertainty persists around where the level will land next year.
Further top line growth should be expected, due to demand volume trends, while
energy costs will remain another profitability hurdle for at least a few
quarters. We estimate 7.5% growth for next year, which in our view appears to be
on the conservative side. Suominen remains valued a bit above 3x EV/EBITDA and
5.5x EV/EBIT on our FY ’23 estimates. We retain our EUR 3.0 TP and BUY rating.

Open report


SRV - DECENT PROFITABILITY, DIFFICULT MARKET

27.10.2022 - 09.30 | Earnings Flash

SRV's net sales in Q3 amounted to EUR 186.8m, above our estimates and below
consensus (EUR 176.7m/194.0m Evli/cons.). EBIT of EUR 5.5m was a positive,
beating expectations (EUR 3.1m/2.7m Evli/cons.).

Read more

 * Revenue in Q3 was EUR 186.8m (EUR 191.1m in Q3/21), above our estimates and
   below consensus estimates (EUR 176.7m/194.0m Evli/Cons.). Growth in Q3
   amounted to -2% y/y.
 * Operating profit in Q3 amounted to EUR 5.5m (EUR -1.6m in Q3/21), above our
   and consensus estimates (EUR 3.1m/2.7m Evli/cons.), at a margin of 2.9%.
   Profitability in Q3 was supported by improvement in the controllability of
   projects, successful inflation control and ensuring the availability of
   materials.
 * Revenue in Construction in Q3 was EUR 183.9m vs. EUR 176.7m Evli. Operating
   profit in Q3 amounted to EUR 4.7m vs. EUR 5.1m Evli. 
 * Revenue in Investments in Q3 was EUR 3.2m vs. EUR 1.1m Evli. Operating profit
   in Q3 amounted to EUR 1.9m vs. EUR -1.0m Evli. 
 * Revenue in Other operations and elim. in Q3 was EUR -0.3m vs. EUR -1.1m Evli.
   Operating profit in Q3 amounted to EUR -1.2m vs. EUR -1.0m Evli. 
 * SRV will start change negotiations to adjust the company’s cost structure and
   number of personnel to meet the demand of the current market situation.
 * The weakened consumer confidence, increased interest rates and investors’
   return requirements have deteriorated the outlook for the construction sector
 * Guidance for 2022 (updated 25.10): Revenue in 2022 is expected to be EUR
   770-820m (800-860m) and operative operating profit to amount to EUR 17-23m
   (15-25m).

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DOVRE - MARGIN POTENTIAL LEAVES UPSIDE

27.10.2022 - 09.20 | Company update

Dovre posted Q3 results above our estimates; in our view earnings growth should
continue next year, while valuation still leaves enough upside potential.

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Especially high growth in Norway during Q3

Q3 revenue grew to EUR 59.7m, above our EUR 54.1m estimate. The 28.5% growth was
driven by all three segments. High demand in Norway continued to support both
Project Personnel and Consulting, and in our view the latter’s 33% growth was
encouraging as it was driven by several larger projects within the Norwegian
public sector as well as energy. Consulting continues to grow in Finland, but
Suvic’s wind farm projects remain the more significant Dovre business. Dovre's
EUR 3.0m EBIT topped our EUR 2.2m estimate (due to all three); Renewable Energy
EBIT declined y/y (as the combination of busy construction season and inflation
causes some challenges) but was nevertheless above our estimate. Dovre also made
an upward revision to its guidance.

Renewable Energy and Consulting to drive FY ’23 EBIT

Dovre says this year has seen extraordinarily high growth (in our view the note
concerns particularly Project Personnel) and such a level is not to be expected
next year. This is no surprise, and we expect organic growth to slow to 7% in
Q4. We have previously estimated an organic CAGR of 5% to be a reasonable
long-term pace for Dovre, and we continue to expect such a rate for next year.
We also see there to be further earnings growth potential especially within
Renewable Energy; Suvic has managed well in terms of profitability despite the
inflationary environment, and we see scope for margin improvement next year as
wind farm demand remains high while the operating environment should be more
normal. We continue to expect flattish profitability for Project Personnel going
forward, while Consulting should be able to achieve earnings growth also next
year.

Multiples are down, earnings growth potential attractive

We see a 5% growth rate realistic for next year and wouldn’t be surprised by a
high single-digit rate, whereas such an organic double-digit rate as seen this
year shouldn’t be expected. Dovre’s valuation is reasonable, around 8x EV/EBIT
on our FY ’22 estimates, while we expect 50bps EBIT margin gain for next year.
Peer multiples have retreated a bit, but we retain our EUR 0.75 TP and BUY
rating as we make some upward estimate revisions.

Open report


CAPMAN - GOOD PERFORMANCE CONTINUES

27.10.2022 - 09.00 | Earnings Flash

CapMan's net sales in Q3 amounted to EUR 15.9m, below our estimates and below
consensus (EUR 19.7m/19.2m Evli/cons.). EBIT amounted to EUR 12.7m, below our
estimates and in line with consensus (EUR 16.5m/12.3m Evli/cons.). Apart from
carried interest (Act./Evli EUR 1.0m/5.0m), results were well in line with our
expectations.

Read more

 * Revenue in Q3 was EUR 15.9m (EUR 14.9m in Q3/21), below our estimates and
   consensus estimates (EUR 19.7m/19.2m Evli/Cons.). Growth in Q3 amounted to 7%
   y/y.
 * Operating profit in Q3 amounted to EUR 12.7m (EUR 10.9m in Q3/21), below our
   estimates and in line with consensus estimates (EUR 16.5m/12.3m Evli/cons.),
   at a margin of 79.7%.
 * EPS in Q3 amounted to EUR 0.06 (EUR 0.06 in Q3/21), below our estimates and
   above consensus estimates (EUR 0.08/0.06 Evli/cons.).
 * Results were in line with our expectations apart from carried interest
   (Act./Evli EUR 1.0m/5.0m).
 * Revenue in Management Company business in Q3 was EUR 12.6m vs. EUR 16.8m
   Evli. Operating profit in Q3 amounted to EUR 4.2m vs. EUR 8.2m Evli. 
 * Revenue in Investment business in Q3 was EUR 0.0m vs. EUR 0.0m Evli.
   Operating profit in Q3 amounted to EUR 7.9m vs. EUR 7.8m Evli. 
 * Revenue in Services business in Q3 was EUR 3.1m vs. EUR 2.9m Evli. Operating
   profit in Q3 amounted to EUR 1.8m vs. EUR 1.7m Evli. 
 * Capital under management by the end of Q3 was EUR 4.9bn (Q3/21: EUR 4.3bn).
   Real estate funds: EUR 3.3bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.5bn, and other funds: EUR 0.1bn.

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SCANFIL - PROFITABILITY CONTINUES TO IMPROVE

27.10.2022 - 08.55 | Company update

Scanfil’s Q3 results were largely as expected. Demand remains strong and EBIT
should continue to increase as the gradually easing component shortage situation
further helps plant productivity.

Read more

Q3 figures and management comments largely as expected

Scanfil Q3 revenue grew to EUR 212m, compared to the EUR 210m/209m Evli/cons.
estimates. Growth continued to stem across all customer segments. The 26% y/y
growth (23% without the EUR 20m transitory spot component purchases) was a
record pace and may not be reached again as it was driven by a very high level
of customer demand as well as inflation. EBIT amounted to EUR 11.5m vs the EUR
12.3m/11.5m Evli/cons. estimates, and EBIT margin was a decent 6% when excluding
the spot purchases. The amount of these transitory items already declined by a
third q/q and thus suggests component availability challenges continue to ease,
yet the situation will still take a while to wholly normalize.

Underlying growth should moderate a bit but remain strong

Scanfil’s business model allows incremental capacity additions, and hence
supply-demand balance is unlikely to be altered too unfavorably even if EMS
players, including Scanfil, expand their footprint in response to a particular
phase of high demand. The Atlanta investments (EUR 4m in an SMT line as well as
additional production space), in addition to production space increases in other
locations, will mostly address needs current customers have, although Scanfil is
also active in new customer acquisition. Customer demand forecasts remain strong
across all key markets, at least for now, and Scanfil’s diverse customer base
means demand risks are manageable even in the case of softening.

Further earnings growth with an undemanding valuation

The plant network is performing well, and no plant is lagging. The guidance
midpoint suggests y/y growth will continue at a 14% pace in Q4; Scanfil should
reach an above 6% EBIT margin even with some spot purchases. The estimated Q4
run-rate EBIT implies well above EUR 50m figure for FY ’23, which should be
achievable even if top line growth turns negative due to the lost transitory
invoicing items. Meanwhile Scanfil’s valuation is not too demanding, below 9x
EV/EBIT on our FY ’22 estimates and around 7x next year. Our updated TP is EUR
7.0 (8.0); retain BUY.

Open report


VERKKOKAUPPA.COM - A VICTIM OF POOR MARKET

27.10.2022 - 08.45 | Earnings Flash

Preliminary figures given, Verkkokauppa.com’s Q3 report included no large
surprises. Net sales continued in decline and profitability was hit by lower
volumes, weaker sales mix, price competition and elevated cost levels. Guidance
intact (revised ahead of Q3 result).

Read more

 * Group results: net sales declined by 2.3% y/y to EUR 137.8m (135.9/136.5m
   Evli/cons.). Acquired e-ville.com contributed to Q3 net sales and EBIT by EUR
   2.4m and 0.6m respectively. Gross margin was negatively impacted by weaker
   sales mix and price competition. Adj. EBIT was EUR 2.1m (3.1/2.6m Evli/cons.)
   as a result of the elevated cost level. EPS amounted to EUR 0.01 (0.05/0.04
   Evli/cons.).
 * Online sales: represented 58% of total net sales and decreased by 3.5% y/y
   while brick-and-mortar saw a 7.7% y/y decline.
 * Category split: demand was good in some segments of core categories, such as
   household appliances and home entertainment devices, but in total the
   category declined by 5.2% y/y. The demand for evolving categories continued
   as good by growing by 3.1% y/y in a challenging market environment.
 * Consumer segment: consumer segment continued lagging and declined by 7.8%
   y/y. The segment represented 70% of the group net sales.
 * B2B segment: growth pace saw a slowdown to 5% y/y with SME clients reducing
   their activity. The segment represented 21% of the group net sales.
 * Export segment: gained new customers from acquired e-ville.com and grew by
   35.1% y/y, being 9% of total net sales. Net sales came back to its levels
   before the disposal of sales to Russia.
 * Guidance was lowered ahead of Q3 result: net sales between EUR 530-560m and
   adj. EBIT between EUR 5-9m. Mid-point implies a revenue decline of 5.1% and
   an EBIT margin of 1.3%.

Open report


SOLTEQ - CERTAINLY NOT THE BEST OF QUARTERS

27.10.2022 - 08.30 | Earnings Flash

Solteq’s Q3 was below the already weak expectations, with revenue at EUR 14.4m
(Evli EUR 14.7m) and adj. EBIT at EUR -0.5m (Evli EUR 0.3m). The weakness
relates to earlier communicated challenges in Solteq Utilities’ software
development and lower revenue and profitability in Solteq Digital.

Read more

 * Net sales in Q3 were EUR 14.4m (EUR 14.9m in Q3/21), slightly below our
   estimates (Evli EUR 14.7m). Growth in Q3 amounted to -3.7% y/y. 
 * The operating profit and adj. operating profit in Q3 amounted to EUR -5.0m
   and -0.5m respectively (EUR 1.1m/1.2m in Q3/21), below our estimates (Evli
   EUR -4.1m/0.3m). 
 * Q3 challenges relates to earlier communicated challenges in Solteq Utilities’
   software development and lower revenue and profitability in Solteq Digital.
   Write-downs relating to Solteq Robotics had a negative one-off impact of EUR
   4.4m on EBIT.
 * Solteq Digital: revenue in Q3 amounted to EUR 8.6m (Q3/21: EUR 9.6m) vs. Evli
   EUR 9.4m. Growth amounted to -9.6%. The adj. EBIT was EUR 0.2m (Q3/21: EUR
   0.9m) vs. Evli EUR 0.8m. Demand in key business areas, such as digital
   business and commerce solutions, is expected to remain at a good level during
   the ongoing quarter.
 * Solteq Software: Revenue in Q3 amounted to EUR 5.7m (Q3/21: EUR 5.4m) vs.
   Evli EUR 5.3m. The adj. EBIT was EUR -0.7m (Q3/21: EUR 0.3m) vs. Evli EUR
   -0.5m. Growth was 6.6%. The business outlook for Solteq Software is expected
   to remain positive.
 * Guidance for 2022 (reiterated): group revenue is expected to remain at same
   levels as in 2021 and operating profit to be negative.

Open report


DETECTION TECHNOLOGY - BACK ON THE GROWTH TRACK

27.10.2022 - 08.00 | Company update

Detection Technology’s Q3 result was strong in terms of growth. Yet,
profitability deteriorated due to continued cost pressures and one-time
provision made. With increased volumes and elevated costs easing down, DT's
profitability is expected to improve.

Read more

Margins under powerful pressure despite solid growth
After soft Q2 DT delivered solid growth figures with SBU and MBU growing by
double-digits while IBU’s low single-digit growth was restricted by a very
strong comparison period. Group net sales increased by 17.5% y/y and amounted to
EUR 27.3m (Evli: 27.1m). Q3 growth was supported by solid demand for medical CT
devices, postponed Q2 deliveries, and strong aviation security sales. Despite
strong growth, profitability was weak due to elevated material, logistics, and
R&D costs. In addition, DT made EUR 1.3m provision due to the credit issues of
its North American customer which eventually deteriorated DT’s profits further.
Q3 EBIT accounted for EUR 0.6m (2.3% margin) which fell significantly short of
our expectations (Evli: 3.8m).


Outlook implies growth to continue
The outlook for security seems bright. Aviation CT equipment upgrades have
proceeded both in the US and Europe. Visibility to SBU’s demand continues far
but medical OEMs have indicated market growth slowing down. In addition,
visibility to industrial demand is somewhat foggy. In total, we expect DT to
show double-digit growth both in 2022 and 2023. With spot-component purchases
diminishing and additional R&D projects ending, we see DT’s profitability
improving significantly. The company guides double-digit growth for Q4’22 and
Q1’23 in all its business units.

Valuation neutral with our revised estimates
We made some minor downward adjustments to our 2023-24 estimates considering
recent news. DT is currently trading approx. in line with its peers, and we see
the valuation as not challenging. Security business provides visibility but
uncertainty concerning medical growth and general downward economic development
keeps us cautious. We retain our HOLD-rating and adjust TP to EUR 16.5 (prev.
17.0).

Open report


DETECTION TECHNOLOGY - DEMAND CONTINUED STRONG, EBIT FELL SHORT

26.10.2022 - 10.00 | Earnings Flash

Detection Technology’s Q3 topline came in strong. Net sales growth continued but
profitability was harmed by supply chain issues and one-time provision made.

Read more

 * Group results: net sales grew by 17.5% y/y to 27.3 and was in line with our
   and market estimates (27.1/27.2m Evli/cons.). Component shortage restricted
   DT’s growth in all its business segments. Adj. EBIT was a disappointment,
   amounting to EUR 0.6m (3.8/3.6m Evli/cons.). Adj. EBIT margin was 2.3%. With
   low profitability also Q3 EPS of EUR 0.05 fell short of our and market
   estimates (0.20/0.20 Evli/cons.).
 * Component shortage was present, and DT continued its sourcing of more
   expensive spot-components. Logistics costs were up, and the product
   modification project kept R&D costs elevated. In addition, a one-time
   provision worth EUR 1.3m had a significant impact on DT’s profitability.
   Component availability is expected to improve, and DT sees its profitability
   improving in Q4.
 * Medical (MBU) grew by 24% y/y to EUR 14.8m, beating our expectations (Evli:
   13.9m). The growth was driven by strong demand for CT-devices. In addition,
   postponed deliveries from Q2 supported medical growth in Q3.
 * Security (SBU) increased by 14.6% y/y to EUR 8.5 and was below our
   expectations (Evli: 9.3m). Growth was driven by increased demand for aviation
   solutions. DT strengthened its position in the US aviation market which is
   good news considering future growth.
 * Industrial (IBU): after a strong comparison period IBU showed y/y growth of
   2.8%. Net sales amounted to EUR 3.9m and was in line with our expectations
   (Evli: 3.9m). Demand in the food segment continued at a good level, and
   demand increased in mining and NDT applications.
 * Outlook: DT expects its group net sales and all business units to grow by
   double-digits in Q4’22 and Q1’23.

Open report


SUOMINEN - SOME IMPROVEMENT TO BE SEEN

26.10.2022 - 10.00 | Earnings Flash

Suominen’s Q3 profitability improved a bit from the recent lows but remained
very modest and below our estimate as energy costs seem to have been a bigger
challenge than we expected. Revenue topped estimates as sales volumes grew again
in North America.

Read more

 * Suominen Q3 revenue was up by 34% y/y to EUR 131.9m, compared to the EUR
   123.0m/121.5m Evli/consensus estimates. Higher volumes and prices helped,
   while there was a currency tailwind of some EUR 11.1m. Americas amounted to
   EUR 80.3m vs our EUR 73.0m estimate, while Europe was EUR 51.7m vs our EUR
   50.0m estimate.
 * Gross profit landed at EUR 5.2m vs our EUR 9.2m estimate. Gross margin was
   hence 3.9% vs our 7.5% estimate, which implies energy costs in particular
   were higher than we expected.
 * Q3 EBITDA amounted to EUR 5.1m, compared to our EUR 7.0m estimate, while EBIT
   was EUR 0.2m vs our EUR 2.0m estimate. Higher volumes had a positive effect
   on profitability, but sales prices could not entirely keep up with raw
   material and energy costs.
 * Suominen guides comparable FY ‘22 EBITDA to decrease clearly from previous
   year (unchanged). Suominen sees further US demand recovery as well as easing
   in high raw materials prices during Q4.

Open report


INNOFACTOR - SHOWING MUCH NEEDED IMPROVEMENT

26.10.2022 - 09.40 | Company update

Innofactor showed promising progress in Q3, boding well for 2023, and now needs
to provide further signs of sustained performance given recent challenges. We
retain our target price of EUR 1.25 and BUY-rating intact.

Read more

Clear growth boost in Q3
Innofactor reported better than expected results. Growth clearly picked up a
notch, 21.5% y/y (13.4% organic), with net sales of EUR 16.7m (Evli 14.9m).
Growth was aided by improved invoicing rates following actions implemented after
the weaker H1. Profitability came in line with our expectations, with EBITDA of
EUR 1.8m (Evli EUR 1.9m). Relative profitability was in our view slightly soft
but still at good levels. Subcontracting expenses increased y/y and the
improvement in invoicing was gradual throughout the quarter, with September
having been strong according to the company. The order backlog was up 7.3% y/y.

Potential for 2023 but too early to get overly excited
The achieved sales growth in Q3 along with the gradually improved invoicing rate
provides very good support for the end of the year and confidence for Q4 appears
to be strong. With the demand situation looking unchanged and should the
achieved efficiency be sustained, Innofactor is set for notable earnings
improvement potential heading into 2023. The sustainability of the higher
operative performance remains a key concern given recent challenges, and further
proof is warranted. We currently estimate a ~2%p increase in the EBITDA-margin
in 2023 should the late-Q3 performance be sustained in the near future, although
H1/22 was soft, and the potential is bigger than that.

BUY with a target price of EUR 1.25
Innofactor currently trades below peers. In our view this is not fully
unjustified given the sub-par performance during 2022. We, however, still see
that the shown improvement signs and potential still supports valuation upside.
We retain our target price of EUR 1.25, valuing Innofactor near the peer median,
and our BUY-rating intact. We note that peer multiples have come down recently
and in absolute terms, the implied 2023 target P/E of ~10.5x is not overly
challenging.

Open report


DOVRE - TOPPED ESTIMATES

26.10.2022 - 09.15 | Earnings Flash

Dovre’s Q3 results were clearly above our estimates as all three segments
recorded figures higher than we had expected. Dovre also issued a positive
guidance update yesterday; our latest estimates would still be in line with the
new guidance, but the very strong Q3 report suggests our Q4 estimates are too
modest.

Read more

 * Dovre Q3 revenue grew by 28.5% y/y to EUR 59.7m vs our EUR 54.1m estimate.
   Project Personnel top line was EUR 22.5m, compared to our EUR 21.8m estimate.
   Consulting amounted to EUR 4.4m vs our EUR 3.4m estimate, while Renewable
   Energy was EUR 32.9m vs our EUR 28.9m estimate.
 * Dovre EBITDA was EUR 3.2m, compared to our EUR 2.4m estimate, while EBIT was
   EUR 3.0m vs our EUR 2.2m estimate. Project Personnel EBIT amounted to EUR
   1.1m vs our EUR 0.9m estimate. Consulting managed EUR 0.7m, compared to our
   EUR 0.4m estimate, whereas Renewable Energy EBIT was EUR 1.4m vs our EUR 1.2m
   estimate. Other functions & unallocated cost EUR 0.3m vs our EUR 0.3m
   estimate.
 * Dovre’s new guidance is for revenue above EUR 195m and EBIT of more than EUR
   7.3m. The previous guidance was for revenue above EUR 185m and EBIT in the
   range of EUR 6.5-7.5m. Dovre raised guidance yesterday thanks to strong
   demand in Project Personnel and Consulting as well as solid execution of
   Renewable Energy construction projects. Our latest estimates remain still in
   line with the new guidance, but our Q4 estimates now look a bit modest given
   the strong Q3 performance.

Open report


SCANFIL - DECENT RESULTS, BETTER TO COME IN Q4

26.10.2022 - 08.30 | Earnings Flash

Scanfil Q3 results landed largely in line with expectations as top line was up
26% y/y and EBIT margin amounted to a decent 5.4%. Scanfil expects further
improvement for Q4.

Read more

 * Q3 revenue grew by 26.3% y/y to EUR 211.9m, compared to the EUR 210.3m/208.6m
   Evli/consensus estimates. Transitory component invoicing amounted to some EUR
   20m as the component availability challenges eased a bit. Customer demand
   remained strong in all customer segments.
 * Advanced Consumer Applications amounted to EUR 67.8m vs our EUR 70.4m
   estimate, while Energy & Cleantech was EUR 53.1m vs our EUR 52.6m estimate.
   Automation & Safety amounted to EUR 44.2m, compared to our EUR 41.0m
   estimate.
 * Adjusted EBIT landed at EUR 11.5m vs the EUR 12.3m/11.5m Evli/consensus
   estimates. Higher delivery volumes and lower FX losses had a positive effect.
   The pandemic did not have any significant effect and Scanfil expects further
   positive development for Q4.
 * Scanfil guides revenue of EUR 800-880m and adjusted EBIT of EUR 43-48m for FY
   ’22 (unchanged). The guidance’s midpoints now suggest EUR 219m revenue and
   EUR 13.5m EBIT for Q4.

Open report


INNOFACTOR - POSTED SOLID GROWTH FIGURES

25.10.2022 - 09.30 | Earnings Flash

Innofactor’s Q3 results were better than expected. Net sales turned to a clear
growth of 21.5% y/y to EUR 16.7m (Evli EUR 14.9m) aided by improved invoicing
rates after the more challenging first half of 2022. Q3 EBIT of EUR 1.0m was in
line with our estimates (Evli EUR 1.1m).

Read more

 * Net sales in Q3 amounted to EUR 16.7m (EUR 13.7m in Q3/21), clearly above our
   estimates (Evli EUR 14.9m). Net sales in Q3 grew 21.5% y/y and 13.4%
   organically. Net sales increased in all operating countries. Net sales growth
   was aided by improvements in invoicing rates.
 * EBITDA in Q3 was EUR 1.8m (EUR 1.7m in Q3/21, in line with our estimates
   (Evli EUR 1.9m), at a margin of 10.7%. EBITDA was positive in all operating
   countries.
 * Operating profit in Q3 amounted to EUR 1.0m (EUR 0.9m in Q3/21, in line with
   our estimates (Evli EUR 1.1m), at a margin of 5.8%. 
 * Order backlog at EUR 77.3m, up 7.3% y/y. New orders included for instance the
   Legal Register Centre (approx. EUR 4.0m) Aalto University Foundation’s
   (approx. EUR 5.0m).
 * Guidance for 2022 (reiterated): Innofactor’s net sales is expected to
   increase from 2021 (EUR 66.4m) and EBITDA is expected to increase from EUR
   7.5m, which would have been EBITDA without the proceeds of EUR 2.6m from the
   sale of the Prime business. 

Open report


FINNAIR - PIVOTING AND DOWNSIZING

25.10.2022 - 09.30 | Preview

Finnair reports Q3 results on Oct 28. We make only small adjustments to our
estimates ahead of the report.

Read more

We make no big estimate revisions before the report

Finnair’s Q3 RPK was as we expected, while the 80% load factor was about 5
percentage points higher than we estimated. North Atlantic RPK was already more
than 40% above the Q3’19 comparison figure, which is one of the clearest
demonstrations of the recent (necessary) updates to strategy. We estimate the
continued recovery in passenger volumes, along with some increases to ticket
prices, to have helped Finnair’s revenue to EUR 645m in Q3. Jet fuel prices seem
to have stabilized lately but remain still very high in the historical context.
We expect Finnair’s EBIT to have continued to improve, however we estimate it to
have remained slightly negative in Q3.

Qatar Airways partnership one of the major recent updates

Finnair formally announced the keys of its updated strategy in September. Many
of the points had been already discussed over the spring and summer months,
including the pivot to North America and India, but Finnair has also signed a
partnership with Qatar Airways which is to better connect Nordic capitals with
the Middle East. The updated network as well as favorable terms on leased out
planes and crew help Finnair’s continued recovery after the pandemic, but the
Russian airspace closure still forces the company to make some downsizing
choices. We estimate Finnair to reach positive EBIT next year, however our 2.3%
EBIT margin estimate remains well shy of the 5% level the company aims to reach
in H2’24. Finnair’s liquidity position is adequate, although the recent blows
will leave their mark on the balance sheet. Then again, Finnair has no need to
make major fleet refurbishments in the short to medium term. We look forward to
comments regarding ASK and LFs in the coming quarters.

Valuation has moderated a bit, but still not cheap

Finnair continues to trade at high FY ’23 earnings multiples relative to peers
as the pandemic already hurt the (legacy) Asian strategy more than those of
other airlines. Finnair is valued around 12x EV/EBIT on our FY ’24 estimates,
while other airlines are valued roughly that level on FY ’23 estimates. In our
view this puts Finnair’s valuation in the fair to fully valued range. We retain
our EUR 0.36 TP; our rating is now HOLD (SELL).

Open report


CONSTI - MARKET OUTLOOK OF KEY INTEREST

24.10.2022 - 09.40 | Preview

Consti reports Q3 results on October 27th. Financials are of lesser interest,
with some cost impact likely, while the currently mixed market outlook is of key
interest.

Read more

Expecting uneventful Q3, some cost impact likely
Consti reports its Q3 results on October 27th. Progress during the first half of
2022 was at a rather good level despite some negative impact from rising
material prices and inflationary pressure. Apart from some minor tweaks, our
estimates remain intact. We expect continued modest growth supported by the
order backlog and profitability levels similar to the comparison period given
the slight strains from construction material increases. Consti’s 2022 operating
profit guidance is at EUR 9-13m, with our estimate at EUR 10.2m.

Mixed signals on market outlook
The market outlook remains rather favourable for the on-going year aided by
order backlogs, while the outlook going forward is showing mixed signs. The
Confederation of Finnish Construction Industries RT (CFCI), in its October
business cycle review, estimates the renovation volumes to grow by 1.5% and 2.0%
in 2022e and 2023e respectively. On the other hand, a survey conducted by
Talotekniikkaliitto during autumn 2022 regarding the Finnish renovation building
technology market shows an increase of respondents expecting a slow-down of near
12%p to 31.4% compared with the survey conducted in spring 2022. The new
residential building construction outlook is grimmer, with CFCI estimating a
volume decline of 5.8% in 2023e. Data on construction cost development from
Statistics Finland suggests a clear slow-down in cost growth during Q3, although
still at a clearly elevated level on y/y basis.

BUY with a target price of EUR 11.0 (12.0)
Consti currently trades clearly below peers, which in our view remains hard to
justify given the exposure to the more stable renovation market compared with
the new construction focused peers. The continued high construction costs,
economic uncertainty and inflationary environment, however, remain a threat, and
we lower our target price to EUR 11.0 (12.0).

Open report


RAUTE - POSITIONED TO IMPROVE WITH WEST

24.10.2022 - 09.30 | Company update

Raute’s Q3 figures were encouraging, and although profitability may still be
muted for a few quarters we view valuation conservative enough to leave adequate
upside.

Read more

Some encouraging profitability development

Raute’s Q3 revenue grew 10% y/y to EUR 42m, above our EUR 34m estimate. The beat
was due to both projects and services, driven by Europe, and in our view the
high EUR 19m service revenue also helped EBIT back to black (EUR 1.4m vs our EUR
-0.3m estimate) as inflation has been more of a problem on the project front.
Inflation eased a bit, but we believe Raute has also learned to better price in
inflation within projects over the past year. The unwinding of the Russian book
has had an adverse effect on working capital, hurting cash flow, but the issue
is by nature temporary and Raute’s overall workload situation is not too bad
despite the fact that Russia was an important market.

Top line may not grow next year without larger mill orders

Raute booked EUR 35m in new orders for the quarter, compared to our EUR 38m
estimate. Services orders were soft compared to our estimate as modernization
orders declined from the recent high figures, but we find it encouraging Raute
has managed to gather solid order amounts for many quarters in a row without any
larger mill orders. Smaller orders from North America are especially helpful at
this point, while there’s a bit more uncertainty around Europe, the current
largest market, going forward. There’s a need to add capacity in order to fill
the gap left by the end to Russian imports. It’s unclear how this trend
continues to play out in the short-term, but demand for large mill projects
remains in place along the Eastern flank of Europe. Latin America is also
showing signs of improvement, although it’s likely to remain a smallish market
at least in the short-term.

We see more upside than downside from this point forward

Q4 is in our view still unlikely to be a great quarter in terms of
profitability, but overall development appears favorable going towards next
year, when the EUR 4-5m in cost efficiency measures should materialize, in
addition to the benefits of the ERP project. Raute is valued around 6x EV/EBIT
on our FY ’23 estimates, which we don’t view a challenging level considering our
EUR 5.6m EBIT estimate is still far from long-term potential. We update our TP
to EUR 11 (9); our new rating is BUY (HOLD).

Open report


VERKKOKAUPPA.COM - NO SIGNS OF MARKET RECOVERY YET

24.10.2022 - 09.25 | Preview

Verkkokauppa.com publishes its Q3 result on Thursday, 28th Oct. In addition to
the consumer segment and contrary to its performance in H1, we expect the B2B
segment to see some softness in H2. Due to no signs of market recovery yet, we
adjusted our short-term estimates downwards ahead of Q3 result.

Read more

Volumes still in decline
During H1’22, the consumer electronics market fell by ~6% in terms of volumes
(GfK, ETK, GoTech). However, during the same period, sales declined only by a
percent, which can be explained by the price increases made. Based on monthly
data, there are no signs of market recovery starting yet as electronics sales
declined by 12% y/y in August (Stat.fi).

Weak demand burdens Q3 profitability
Verkkokauppa.com has suffered from weak consumer demand, which started with the
soft consumer electronics market in Q4’21. We have adjusted our short-term
estimates downwards driven by the lack of evidence of market recovery. While the
B2B segment has shown strong growth during uncertain H1’22, we now expect the
segment to experience some headwinds. In Q3, we expect net sales to decrease by
3.6% y/y to EUR 135.9m. Weakness is seen throughout product segments and sales
channels. In total, we expect the full-year topline to amount to EUR 554.0m,
reflecting a y/y decline of 3.6%. The company has continued its long-term
investments according to its strategy despite the uncertain market environment.
We estimate that these investments will be visible in increased fixed costs.
With a narrow gross margin and lower net sales, Verkkokauppa.com’s profitability
sees an extensive decline. Our Q3 EBIT estimate amounts to EUR 3.1m, while with
2022 adj. EBIT estimate of EUR 7.8m, we expect the company to fall short of its
guidance slightly.

HOLD with a TP of EUR 3.5 (prev. 3.7)
Verkkokauppa.com currently trades with 23E P/E of 16x which is below its
historical levels. However, we currently see no notable upside potential in
valuation multiples given the company trading above the peer group’s median and
a weakening economic outlook. We retain our HOLD-rating and lower TP to EUR 3.5
(prev. 3.7), mainly reflecting decreased expectations.

Open report


RAUTE - REVENUE AND EBIT ABOVE ESTIMATES

21.10.2022 - 09.30 | Earnings Flash

Raute’s Q3 top line and profitability topped our estimates. Inflation pressures
eased up a bit while Western demand remained high.

Read more

 * Q3 revenue grew by 10% y/y to EUR 41.8m, compared to our EUR 34.0m estimate.
   Project revenue was EUR 22.6m, compared to our EUR 19.0m estimate, while
   services revenue amounted to EUR 19.2m vs our EUR 15.0m estimate.
 * EBIT amounted to EUR 1.4m vs our EUR -0.3m estimate. The remaining Russian
   project deliveries had a neutral profitability effect. The worst inflation
   pressures seem to have eased, but inflation remained a challenge in Q3.
   Component availability is still weak.
 * Order intake was EUR 35m, compared to our EUR 38m estimate. Project orders
   were EUR 24m vs our EUR 20m estimate, while services orders amounted to EUR
   11m, compared to our EUR 18m estimate. Modernization orders declined from the
   comparison period. Overall Western demand remained good, especially in North
   America.
 * Order book amounted to EUR 94m at the end of Q3, of which EUR 6m was
   attributable to Russia.

Open report


DETECTION TECHNOLOGY - OUTLOOK HAS SLIGHTLY DETERIORATED

21.10.2022 - 09.15 | Preview

DT releases its Q3 result on Wednesday, 26th of Oct. With weakened macroeconomic
outlook and increased cost pressures, we adjusted our short-term estimates but
still expect DT to deliver solid growth in coming years.

Read more

Growth is expected to continue in Q3 and H2
After the soft quarter of Q2, we expect DT to deliver double-digit topline
growth both in Q3 and H2. With delayed Q2 net sales (due to supply chain
issues), we expect MBU to grow by 16.4% y/y in Q3. Our SBU’s Q3 growth estimate
of 24.7% is supported by a favorable market trend after a weak performance
during the pandemic times. IBU had a strong comparison period (Q3’21: EUR 3.8m)
and thus we expect the BU to grow only by 2.4% y/y. Our Q3 group net sales
estimate amounts to EUR 27.1m, reflecting 16.8% y/y growth. In total, we expect
DT to grow by 9.8% to EUR 98.6m in 2022.

Margins are under short-term pressure
Due to reduced topline estimates and cost inflation, we expect Q3 EBIT to land
at EUR 3.8m (13.9% margin). Elevated material costs and higher investment in R&D
cause some stress on Q3 and H2 margins. Our 2022 EBIT estimate of EUR 9.7m (9.9%
margin) is quite moderate against DT’s margin potential and those seen in the
past. We expect margins to significantly improve in 2023 when component
availability improves and extraordinary R&D investments are over.

Outlook for security is favorable, medical growth to calm
Security market has performed well in 2022 and the demand outlook is bright.
Major countries are investing in infrastructure security, aviation being one of
the largest contributors. Both the company’s management and OEMs have indicated
that the growth in the medical markets might be slowing down. However, we expect
MBU to grow also in the future, at or above long-term the market.

Valuation neutral ahead of Q3, but risks are elevated
Our 23 EBIT estimate was decreased by some 17% due to elevated risk levels. With
the recent decline in DT’s share price, 23E valuation seems quite neutral (23E
EV/EBIT of 14x and P/E of 20x). We, however, don’t see much upside potential in
multiples given weakening economic and industrial activity. We retain our
HOLD-rating but lower TP to EUR 17.0 (20.0) ahead of Q3 result.

Open report


SUOMINEN - HIGHER VOLUMES TO SUPPORT MARGINS

20.10.2022 - 09.35 | Preview

Suominen reports Q3 results on Oct 26. We make only minor estimate revisions
ahead of the report as we continue to expect improvement over the coming
quarters.

Read more

H1 profitability was very weak, but H2 is set to be better

Suominen’s Q2 profitability proved a lot worse than we expected as margins
continued to decline. Higher raw materials and energy prices hurt while there
was still no remarkable recovery in US volumes. In our view US volumes are no
more such a big problem in H2, whereas the cost side developments are twofold.
Raw materials prices seem to have already reached their peak, while it’s far
from clear how much higher energy costs may climb over the coming winter months.

Higher margins driven by volumes and cost compensation

We find Suominen’s raw materials prices (a composite including pulp, polyester,
and polypropylene) declined by a couple of percentage points q/q in Q3. The
development helps H2 margins as Suominen’s mechanism pricing continues to catch
up with the price inflation seen earlier this year. Meanwhile energy costs,
especially for the two Italian plants but also in other locations including the
US, have continued to soar. Suominen has also implemented additional energy
surcharges in Q3 which will help profitability over the coming winter months. Q3
profitability will nevertheless remain very much subdued; we make only minor
estimate revisions ahead of the report, and now estimate Q3 revenue at EUR 123m
(prev. EUR 121m) and EBITDA at EUR 7.0m (prev. EUR 7.4m). We expect Americas’
revenue to have grown by 28% y/y, helped by strong USD as well as a recovery in
volumes (partly thanks to production line conversions to better address current
demand) and higher sales prices. We estimate line upgrades in Italy to have
helped Europe to a 20% y/y growth.

US volume recovery is a key value driver from now on

Mechanism pricing and energy surcharges mean Suominen’s margins adjust to
inflation incrementally and hence will rebound from the lows. US volume recovery
is thus the crucial operational profitability driver from now on. In our view
nonwovens wipes’ consumable nature helps their demand to stick high after the
initial pandemic boost. Suominen’s valuation remains undemanding, some 3x
EV/EBITDA and 5.5x EV/EBIT on our FY ’23 estimates. Our new TP is EUR 3.0 (3.5);
we retain our BUY rating.

Open report


RAUTE - TACKLING CHALLENGES

19.10.2022 - 09.35 | Preview

Raute reports Q3 results on Oct 21. We expect gradual improvement amid inflation
and shift to Western markets.

Read more

Cost inflation will continue to burden Q3 results

Raute’s Q2 bottom line was burdened by some EUR 11m in one-off items mostly
related to Russian orders, in addition to which cost inflation was a bigger
challenge than we had expected. Q3 figures should be clear of exceptional
provisions, but we expect inflation will still be a major limiting force on
profitability even if Raute has learned to better anticipate cost issues since
late last year. We estimate EUR 34m top line and EUR -0.3m in EBIT for Q3, which
implies q/q improvement but clearly below the y/y comparison period. Q2 report
saw a high level of EUR 40m in order intake as a bright spot; there have now
been a few quarters with such healthy order levels in a row without any larger
projects, and we expect EUR 38m in Q3 order intake.

Orders have developed favorably even without larger ones

Small order demand should have remained at a good level especially in North
America, while Europe is now Raute’s most important market. European demand
doesn’t currently appear quite as strong as in America, except for the Baltics
and Eastern Europe, but Raute’s order book should remain above EUR 100m going
into next year. We thus estimate FY ’23 revenue roughly flat at around EUR 140m.
In our view such a workload should be more than enough to help the company reach
positive EBIT next year, especially given the fact that Raute has recently
implemented cost savings measures. Raute could reach positive EBIT already in
Q4’22 assuming services demand remains high.

Downside is limited, but upside still waits a few triggers

We estimate some EUR 4m in FY ’23 EBIT, which we believe Raute should be able to
achieve even if top line remains modestly below EUR 140m. Such figures would
still fall clearly short of longer-term potential, and the 7.5x EV/EBIT
valuation on our FY ’23 estimates doesn’t seem very challenging. Any changes to
Raute’s competitive positioning appear unlikely, and hence downside should be
limited given the current low expectations. The upside potential, however, is
likely to be triggered only once Raute has demonstrated results after the recent
burst of inflation as well as continued solid demand in Western markets. Our new
TP is EUR 9 (11); we retain our HOLD rating.

Open report


ASPO - ESL SUPPORTS HIGH PROFITABILITY

18.10.2022 - 09.30 | Company update

Aspo upgraded its FY ‘22 guidance, thanks to ESL’s continued strong performance,
and gave an update on exits. We continue to see FY ’23 EBIT well above EUR 40m.

Read more

The guidance upgrade, due to ESL, wasn’t a major surprise

Aspo’s upgraded guidance has a midpoint of EUR 54.5m as ESL will continue to
drive high profitability also in H2. We view ESL’s current operating environment
relatively normal in the sense that the war has had only a very limited impact
(we note ESL’s performance is not sensitive to raw materials price changes),
however it should also be noted the dry cargo market has gained strength since
H2’20 and ESL may now have reached a point where it’s not easy to improve
without additional capacity; short term outlook remains strong, while some
softening may be due in the medium term. The hybrid vessel investments will
support long term profitability potential. The Baltic Dry Index is down by
double digits from its recent highs, but this may have only muted implications
for ESL due to its differentiated positioning compared to large global dry bulk
cargo carriers.

We make only small upward estimate revisions

Aspo disclosed progress regarding Telko’s Russian exit, for which the company is
set to receive some EUR 9.5m from a local industrial buyer after the authorities
have approved the deal. An exit from Belarus is also in the works. Leipurin is
similarly in the process of looking for an exit, but in our view the integration
with Kobian is a more significant short to medium term development. We
previously estimated EUR 52.7m for FY ’22 adj. EBIT and our revised estimate
stands at EUR 55.1m. Our updated estimate for next year is EUR 44.4m (previously
EUR 43.4m). Leipurin’s EBIT will likely continue to improve thanks to the Kobian
deal, whereas we estimate ESL’s EBIT to decline by some EUR 3m next year. In our
view Telko’s H2’22 and FY ‘23 performance remains the biggest question mark as
possible price declines could hit margins along with lower volumes.

Valuation not challenging on our ca. EUR 45m FY ’23 EBIT

We expect FY ’23 EBIT to remain well below EUR 50m, mostly due to Telko’s
softening, but the below 8x EV/EBIT valuation levels are not that challenging
especially when Telko and Leipurin continue to tilt West and ESL still has long
term potential left thanks to its upcoming investments. We retain our EUR 9.5 TP
and BUY rating.

Open report


ETTEPLAN - CLOSING ONE CHAPTER

17.10.2022 - 09.15 | Company update

We revise our estimates due to the financial impact of the unsuccessful Semcon
acquisition and accordingly lower our target price to EUR 15.0 (18.0).

Read more

One growth leap came to an end
Etteplan’s ambitions to acquire Semcon through a public offer were halted
earlier in October after a competing offer came in from Ratos AB. Etteplan had
announced that the offer price would not be increased, and the offer ended as
Etteplan’s offer was not accepted to an extent that would have enabled ownership
of more than 90% of outstanding shares. One-time costs related to the
preparation of the transaction are booked in the third quarter of the current
year. The financial guidance for 2022 remains unchanged, with revenue estimated
to be EUR 340-370m and EBIT EUR 28-32m. Currency hedging risks relating to the
transaction will have a significant negative impact on Q3 EPS and the final
effect is recorded in Q4.

2022 earnings impacted by one-offs relating to the offer
The unsuccessful offer is unfortunate given our assessment of the mid- and
long-term potential of the combined companies and the associated costs will
weigh on 2022 financials. We have revised our 2022 EBIT estimate to EUR 28.2m
(prev. EUR 29.2m) based on the perceived transaction costs and EPS to EUR 0.74
(prev. EUR 0.90), with our adj. EPS estimate still at EUR 0.90. The one-offs
have increased profit warning risks for H2 should market conditions deteriorate
but on the other hand, with the guidance still intact, slight added confidence
is provided for the level of operative performance.

BUY with a target price of EUR 15.0 (18.0)
With the offer for Semcon not being successful we adjust our target price to EUR
15.0 (EUR 18.0) based on the perceived missed out value creation potential.
Continued market uncertainty has further had a slight impact on peer multiples.
Our TP values Etteplan at ~16.5x 22e adj. P/E, above the peer median given
Etteplan’s historical and anticipated performance but below recent year
historical averages due to the market outlook. We retain our BUY-rating.

Open report


VAISALA - STRONGER H2 THAN EXPECTED UPCOMING

16.10.2022 - 12.30 | Company update

Vaisala upgraded its 2022 guidance and published preliminary figures for Q3’22.
With no major changes made to 2023 estimates, we retain our HOLD-rating and TP
of EUR 40.0 ahead of Q3 result.

Read more

Outlook even brighter than expected
Vaisala upgraded its guidance and reported preliminary figures for Q3’22.
Guidance raise was expected with strong demand seen throughout the year as well
as the record-high order book. In its new guidance, Vaisala expects 2022 revenue
to land between EUR 500-520m (prev. 465-495m) and EBIT to amount to EUR 62-72m
(55-70m). Mid-point of the guidance implies y/y growth of 16% and an EBIT margin
of 13%. Q3 received orders worth EUR 137.2m implies the demand continuing strong
also in Q4 and possibly in Q1’23.

Strong H2 upcoming
According to the preliminary figures, Vaisala had a successful Q3 in terms of
both sales and profitability considering the current market environment. Q3 net
sales grew by ~20% y/y to EUR 133.3m (Evli estimate: 119.2m) and EBIT amounted
to EUR 22.0m (Evli estimate: 19.6m). Q3 EBIT margin of 16.5% was approx. in line
with our expectations. In our estimates, both BUs delivered strong growth in Q3,
but the magnitude was more prominent in industrial measurements.

Estimating the growth to slow down in 2023
With upgraded guidance, we slightly adjusted our short-term estimates upwards.
Our 2022 net sales estimate amounts to EUR 512.6m (17.1% y/y growth) and the
EBIT estimate lands at EUR 65.1m (12.7% margin). We expect elevated cost
pressures to restrict profitability somewhat. Only minor adjustments were made
to 2023 estimates: we expect Vaisala to see more restrained growth with weaker
macroeconomic conditions decreasing the investment activity. We expect Vaisala
to show solid growth in H1’23 but slope to reverse in H2’23 due to a strong
comparison period and economic uncertainty. In our view, valuation still
stretches somewhat providing no large upside potential. We retain our
HOLD-rating and target price of EUR 40.0 ahead of the Q3 result.

Open report


ENDOMINES - REVERSE SHARE SPLIT

30.09.2022 - 12.45 | Analyst comment

Endomines EGM was held on 26 September 2022 which resolved on a reverse share
split through which forty existing shares will be consolidated into one share.
We update our TP to SEK 64.0 (1.6) due to the reverse split. HOLD-rating intact.

Read more

 * Following the reverse share split, the number of shares will decrease from
   267,198,378 to 6,679,959
 * From today, 30 September 2022, the share price will reflect the effect of the
   reverse share split
 * In addition to the reverse share split, the EGM resolved to approve the
   planned cross-border downstream merger
 * As a result of the merger, Endomines Finland will be the new parent company
   of the group
 * Shareholders of the company will receive one new share in Endomines Finland
   for each share owned in the company
 * Final conditions of the merger are expected to be fulfilled on or about 16
   December 2022 
 * We have updated our models regarding the number of shares, there are no
   changes to our estimates. We update our TP to SEK 64.0 (1.6) due to the
   reverse split. HOLD-rating intact.
 * The gold price has stayed roughly at the levels seen during our last update
 * No updates to other assumptions regarding the company’s financials 
 * Therefore, the target price change is purely driven by the change in number
   of shares

Open report


ENDOMINES - STRATEGY UPDATED, IMPLEMENTATION AHEAD

22.09.2022 - 09.30 | Company report

The updated strategy sets the company’s focus back to Finland. We see potential
upside through successful exploration and mining efforts in the Karelian gold
line, on the other hand, we see clear risks in the value realization of the
company’s United States asset portfolio. The increasing real interest rates put
further pressure to gold prices and the investment case. We decrease our TP to
SEK 1.6 (1.7), HOLD-rating intact.

Read more

Issues in the United States have continued to weaken the performance
During the recent years, the company has faced issues in the Friday mine and
processing plant ramp-up. According to the new strategy, the company’s assets in
the United States are developed through partnerships, additionally, divestments
are considered as a potential option. In our view, the company’s ability to
realize value in the United States is essential for the investment case.

Focus on the Karelian gold line
Production in Pampalo mine was commenced in Q1 2022 supported by the current
favorable gold prices. Endomines was able to produce 2 227 ounces of gold in the
second quarter of 2022 and posted a positive EBITDA for the Pampalo operations.
In the coming years, Endomines is planning to commence production from the
satellite deposits and conduct a wide scale exploration campaign in the Karelian
gold line. There is also likely to be life of mine increases in Pampalo
underground mine as the company is currently extending the decline deeper. We
see potential upside for the valuation via successful exploration and mining
efforts.

HOLD with a target price of SEK 1.6 (1.7)
We decrease our target price to SEK 1.6 (1.7). The positive assumptions changes
regarding the Pampalo underground potential and the Karelian Gold Line satellite
deposits are outweighed by adjustments to gold price estimates driven by souring
gold market sentiment.

Open report


SOLTEQ - HEADWINDS GROW STRONGER

20.09.2022 - 09.45 | Company update

Solteq issued its second profit warning for 2022, with challenges in both
segments and significant write-offs relating to the Solteq Robotics business. We
downgrade our rating to HOLD (BUY) with a TP of EUR 1.5 (2.7).

Read more

Second profit warning for 2022
Solteq issued its second profit warning this year. With the new guidance Solteq
expects group revenue to stay at the same level as in the previous year (prev.
grow) and operating profit to be negative (prev. weaken). A key item in the
downgrade is the write-off of product development investments made into the
Solteq Robotics business, resulting in a one-off impact of approx. EUR 4.4m in
the third quarter off 2022. Product development costs of Solteq Utilities have
also continued to affect the business and project and service delivery costs of
Solteq Utilities have increased. The revenue and profitability of the Solteq
Digital segment have also weakened.

Some challenges across the board
Solteq had issued a profit warning in May, largely relating to challenges in the
Utilities business. The challenges relate to productization of the solutions and
performance was hampered by resourcing challenges relating to deliveries and
customer project fixes. The previous guidance put quite some catch-up pressure
on operational performance in H2/2022 after the weak Q2 results. Those risks
appear to have materialized and with Solteq Digital also seeing some continued
weakness, the overall market uncertainties may be starting to show. The Solteq
Robotics business has seen commercialization challenges due to the pandemic and
we have not emphasized any potential in our estimates. The write-off is still
notably negative given previous fairly upbeat comments.

HOLD (BUY) with a target price of EUR 1.5 (2.7).
On our revised estimates, excl. the one-offs, valuation on current expected
current year performance is quite stretched. Uncertainty is clearly elevated and
overshadows coming years earnings improvement potential. We downgrade our rating
to HOLD (BUY) with a target price of EUR 1.5 (2.7).

Open report


MARIMEKKO - UPGRADE TO BUY

14.09.2022 - 22.50 | Company update

Marimekko elaborated the details of its revised strategy in its CMD and
increased its targets to a more ambitious level. We left our estimates broadly
intact with the uncertain market restricting future visibility. With the
declined stock price, Marimekko’s valuation seems quite attractive, and we raise
our rating to BUY (HOLD) but adjust TP to EUR 12.0 (13.2) reflecting the
uncertain market environment.

Read more

Long-term targets were raised
In its capital markets day, Marimekko introduced its revised strategy for the
period of 2023-27 and opened drivers for its updated long-term financial
targets. The company aims for an annual net sales growth of 15% (prev. 10%) and
a comparable operating profit of 20% (prev. 15%). Net debt to EBITDA ratio of
max. 2x and yearly dividends of 50% of net earnings were left intact. We see the
growth target as somewhat ambitious, especially during uncertain times that the
western economies are currently facing. Meanwhile, we believe that the margin
target is within a reach with the topline growth continuing and investments in
efficiency.

Five success factors for scalable growth
The success of Marimekko’s strategy is based on five different pillars of which
several relies on megatrends. The company emphasizes sustainability, a creative
vision to obtain a wider audience, accelerating growth in Asia, love for the
Marimekko brand and people, and end-to-end digitality to boost omnichannel
growth and efficiency in order to achieve its ambitious targets. We see that
Marimekko is well positioned in sustainability which is an ever-increasing trend
in lifestyle products. Moreover, Marimekko’s strong brand supports the demand
for Marimekko products even during uncertain times.

BUY with a TP of EUR 12.0
With the recent decline in Marimekko’s stock price, we see the company’s current
valuation as quite attractive and upgrade our rating to BUY (prev. HOLD).
However, with the uncertainty concerning the market environment and our
estimates, we lower our TP to EUR 12.0 (prev. 13.2).

Open report


VAISALA - CUTTING-EDGE QUALITY WITH HIGH PRICE TAG

09.09.2022 - 15.45 | Company report

Vaisala’s journey has developed well and with its revised strategy the company
continues to seek scalable growth within high-end measurement solutions. We find
Vaisala’s valuation stretched but a solid expected 14% annual EPS growth is in
favor of holding the stock.

Read more

Global player in value-adding high-end measurements
Vaisala operates in niche segments of weather, environmental and industrial
measurements. The company focuses high value-adding processes and delivers
mostly customized solutions. The company emphasizes its R&D activities with
annual investments of 13% of net sales on average. We see Vaisala having solid
competitive advantages, such as science-based technology leadership, elevated
knowledge in high-mix/low-volume operations, a broad product portfolio, and fast
and reliable delivery. Moreover, bolt-on acquisitions have boosted the company’s
market share and provided new growth opportunities in new market areas.

Continuity with the revised strategy
Vaisala updated its well-succeeded strategy in 2021 to better reflect the core
of its business, vision, and megatrends applying to its industry. The company
highlights its product and technology leadership, deep customer understanding
and application know-how, scalability, and engaged and talented personnel in its
current strategy. In our view, the execution of the company’s strategy has
started well. Vaisala has grown quite profitably in 2021 and 22, and in early
2022, the company acquired US-based SaaS company AerisWeather to increase its
technological capabilities and scalable digital business.

Uncertain market environment forms some gray clouds
We see the current market environment as quite uncertain and with slowing GDP
growth and industrial activity, we revised our 2023-24 estimates slightly
downwards. The company’s valuation is quite stretched, and valuation multiples
have no room for any upside in our view. With our revised estimates and
Vaisala’s elevated valuation, we lower our TP to EUR 40.0 (prev. 43.0) and
retain HOLD-rating.

Open report


CAPMAN - SEEKING PICKUP IN GROWTH

08.09.2022 - 09.15 | Company update

CapMan somewhat ambitiously set its sights on doubling AUM over the next five
years, but the CMD provided good insight into measures to achieve the target.

Read more

Seeking to double AUM over the next five years
CapMan held its Capital Markets Day 2022 event on September 7th. CapMan has
somewhat ambitiously set its sights on doubling AUM over the next five years and
raised the combined growth objective for the Management Company and Service
businesses (excl. carried interest) to more than 15% p.a. on average (prev.
>10%). The company is now also more proactively seeking M&A opportunities, which
to our understanding would lean towards the investment product scope. CapMan is
also clearly making sustainability an even more integral part of its operations
and seeking to act as a frontrunner in the industry. CapMan kept its ROE target
of over 20% p.a. on average and its objective to pay annually increasing
dividends intact, adjusting its equity ratio target to over 50% (prev. >60%).

Mid-term estimates slightly raised in light of growth target
We have made revisions to our mid-term estimates based on the new targets,
having raised our AUM growth estimates and Management company business turnover
and operating profit estimates accordingly. Reaching the AUM target will in our
view require M&A activity at some point in time and continued good traction for
private asset allocations. Growth will still rely on further scaling of CapMan’s
private equity strategies, having successfully built the foundations during the
previous strategy period, and new investment products indeed seem to be in the
pipeline across the board. The CMD overall acted as a further confidence boost
to the investment case and CapMan demonstrated that CapMan is a force to be
reckoned with.

BUY with a target price of EUR 3.4
The CMD further reaffirmed our positive views on CapMan’s investment case and
demand appears to remain fairly solid overall. Although we have slightly raised
our estimates, with the overall market uncertainty we retain our target price of
EUR 3.4 and BUY-rating.

Open report


MARIMEKKO - UPGRADES ITS LONG-TERM FINANCIAL TARGETS

06.09.2022 - 13.40 | Analyst comment

Marimekko raises its long-term financial targets and reveals its focus areas for
the new strategy period of 2023-27.

Read more

 * Marimekko’s new long-term financial targets are:
   * Annual growth of 15% in net sales (prev. over 10%)
   * Comparable EBIT margin of 20% (prev. 15%)
   * Net debt/EBITDA ratio max. 2x (unchanged)
   * Intentions to pay a yearly dividend, at least 50% of net income
     (unchanged).
 * In our view, net sales target is somewhat ambitious but well within reach
   with int’l growth succeeding. However, current macroeconomic trends,
   especially in western economies, might cause some challenges in achieving
   annual growth of 15% in the short-term.
 * A comparable EBIT margin target of 20% was expected as the company has
   outpaced its profitability target during the past two years. In 2021, the
   company recorded an EBIT margin of 20.5% while our margin estimate for 2022
   is 19.4%.
 * Marimekko intends to focus on scaling its business and growth, especially in
   international markets during the next strategy period of 2023–27. The success
   relies on factors such as focus on sustainability, vision to speak to a wider
   audience, accelerated growth in Asia, love for the Marimekko brand, and
   increased digitalization to boost omnichannel growth and efficiency.
 * The company will elaborate on the strategic direction and the new long-term
   financial goals in its Capital Markets Day on 14 September. We maintain our
   estimates and recommendation intact and publish an update on Marimekko after
   the CMD.

Open report


ADMINISTER - PROGRESS COUPLED WITH CHALLENGES

01.09.2022 - 09.35 | Company update

Administer reported better H1 results than we had expected. With on-going
uncertainties and challenges we have somewhat dimmed our coming year
expectations and lower our TP to EUR 3.6 (4.0), BUY-rating intact.

Read more

H1 results better than anticipated
Administer reported better H1 results than we had anticipated. Net sales in H1
amounted to EUR 23.9m (EUR 21.9m in H1/21) (Evli EUR 21.9m) and grew 20.5% y/y
driven by acquisitions. Net sales were burdened by the impacts of general
economic uncertainty on customer activity as well as by the customer losses in
Adner in 2021. EBITDA amounted to EUR 1.0m (Evli EUR 0.5m), at a margin of 4.2%.
Profitability was burdened by higher than anticipated overlapping costs for the
old and new system stemming from Administer’s subsidiary Adner’s system reform.

Somewhat dimmed expectations for coming years
Administer remained on track on its inorganic growth strategy, with five
acquisitions announced/completed YTD (2022 target 5-10). Investments are being
made into technology and strengthening the organization as part of the strategy.
Administer lowered its guidance on August 12th, expecting net sales of EUR
47-49m and an EBITDA-margin of 5-7%. Our estimates remain at the midpoint of the
guidance ranges. We have somewhat lowered our 2023 expectations, still expecting
rapid, largely inorganic growth. We expect profitability to improve because of a
lower impact of Adner’s system reform and small overall improvements. With the
current uncertainties we expect a more normalized run-rate level of
profitability in 2023, while further profitability improvements through
Administer’s strategy and acquisition synergies appears more distant.

BUY-rating with a target price of EUR 3.6 (4.0)
Administer currently trades clearly below peers. We have and continue to see a
clear discount as warranted given recent year challenges and rather low
profitability. Current valuation levels (0.6x 2022e EV/sales), however, suggest
little to no improvement potential. With somewhat lowered expectations for
coming years, we adjust our TP to EUR 3.6 (4.0), BUY-rating intact.

Open report


ADMINISTER - DECENT H1 DESPITE CHALLENGES

31.08.2022 - 09.15 | Earnings Flash

Administer’s H1 figures were better than expected. Revenue amounted to EUR 23.9m
(Evli EUR 21.9m), growing 20.5% mainly due to completed acquisitions. EBITA
amounted to EUR 0.6m (Evli EUR 0.1m), adversely affected by Administer’s
subsidiary Adner’s system reform but still better than anticipated.

Read more

 * Net sales in H1 amounted to EUR 23.9m (EUR 21.9m in H1/21), above our
   estimates (Evli EUR 21.9m). Net sales in H1 grew 20.5% y/y. Growth was mainly
   attributable to the acquisition of EmCe and acquisitions made during H1.
 * EBITDA and EBITA in H1 were EUR 1.0m (H1/21: EUR 0.6m) and EUR 0.6m (H1/21:
   EUR 0.2m) respectively, above our estimates (Evli EUR 0.5m/0.1m). The
   EBITA-margin amounted to 2.3%. Profitability was burdened by higher than
   anticipated overlapping costs for the old and new system stemming from
   Administer’s subsidiary Adner’s system reform
 * Operating profit in H1 amounted to EUR -0.5m (EUR -0.3m in H1/21), above our
   estimates (Evli EUR -0.9m).
 * During H1 Administer completed the acquisition of the payroll services of
   Konjunktuuri Oy, international financial and payroll management specialist
   WaBuCo Financial Services, and accounting services providers Sydän-Suomen
   Taloushallinta and Tilitoimisto Ollikainen.
 * Guidance for 2022 (updated 12.8.2022): Administer expects that its net sales
   will amount to EUR 47-49m and the EBITDA-margin to be 5-7%. The company
   further expects to make 5-10 acquisitions over the course of 2022. 

Open report


FELLOW BANK - DECENT START TO BANKING OPERATIONS

26.08.2022 - 09.30 | Company update

Fellow Bank’s H1 figures were weak due to ECL changes driven by the loan book
growth and non-recurring items but operatively decent. Additional capital (T2)
is sought to support growth. Early growth figures look promising and
profitability scaling potential remains, albeit at a slower pace than we
previously expected.

Read more

Weak H1 earnings but operatively decent figures
Fellow Bank reported H1 results which operatively were slightly better than we
estimated but the change in expected credit losses due to the loan book growth
clearly exceeded our expectations and as such the profitability was below
expectations (PTP act./Evli EUR -7.4m/-2.3m). Realized credit losses were on a
moderate level (EUR 0.7m). Total income of EUR 2.4m (Evli EUR 2.8m) was skewed
by the old P2P loans while NII of EUR 2.5m exceeded our expectations (Evli EUR
2.0m). Total OPEX excl. non-recurring items was quite in line with our
expectations. After starting the banking operations, Fellow Bank’s business
lending and consumer lending volumes increased by 49% and 35% respectively
compared with the beginning of the year, supported by competitiveness of the new
operating model.

Additional capital needed to support loan book growth
Fellow Bank estimates that the loss in H2 will be clearly smaller than in H1.
Potential for positive monthly profit levels during H1/23 is seen, assuming a
loan portfolio of around EUR 180m and the bank’s estimated cost level and
lending interest margin. The total capital ratio was at 19.4% and the need for
additional capital to continue growth kicked in sooner than we anticipated due
to the H1 losses. Fellow Bank announced actions aiming at the issue of a Tier 2
debenture in the early autumn.

HOLD with a target price of EUR 0.42
Apart from the clear difference to our estimates in the non-cash ECL changes and
the faster than anticipated need for additional capital, performance was quite
as expected, and growth figures look promising. Profitability scaling due to
growth ambitions appears slightly slower than we previously anticipated but
intact. We retain our HOLD-rating and TP of EUR 0.42.

Open report


FELLOW BANK - OPERATIONS LAUNCH BURDENED FIGURES

25.08.2022 - 11.00 | Earnings Flash

Fellow Bank started its banking operations in April and financial figures were
accordingly burdened. Lending volumes showed positive signs aided by the new,
more competitive business model. Fellow Bank started actions to strengthen the
capital adequacy to support growth after the reporting period.

Read more

 * Total income during H1/22 amounted to EUR 2.3m (Evli EUR 2.8m). Net interest
   income amounted to EUR 2.5m (Evli EUR 2.0m) and net fee and commission income
   to EUR 0.0m (Evli EUR 0.8m). 
 * After starting the banking operations, business lending and consumer lending
   volumes increased by 49% and 35% respectively compared with the beginning of
   the year
 * The loan portfolio at the end H1 amounted to EUR 114.5m and the deposit
   portfolio was EUR 223.4m.
 * The pre-tax profit during H1 amounted to EUR -7.4m (Evli EUR -2.3m). The
   difference compared with our estimates was mainly due to a larger than
   estimated ECL change due to growth in the loan book, total OPEX also slightly
   above our estimates at EUR 5.6m (Evli EUR 5.1m). Profitability was burdened
   by non-recurring costs relating to the launch of banking growth investments
 * Earnings per share amounted to EUR -0.1 compared with our estimate of EUR
   -0.02.
 * CET1 and the CET1 ratio amounted to EUR 19.6m and 19.4%. After the reporting
   period, Fellow Bank started actions aiming at the issue of a Tier 2 debenture
   in the early autumn.
 * The cost / income ratio amounted to 235%.

Open report


ETTEPLAN - SEEKING BIG LEAP IN GROWTH STORY

24.08.2022 - 09.45 | Company update

Etteplan announced a recommended cash offer for Swedish technology company
Semcon. The transaction would strengthen the market position and appears
favourable for shareholders of both companies. We adjust our TP to EUR 18 (16)
and upgrade our rating to BUY (HOLD)

Read more

Cash offer for Swedish technology company Semcon
Etteplan announced a recommended cash offer of SEK 149 per Semcon’s share, for a
total value of approx. SEK 2,699m. The Board of Directors of Semcon has
unanimously recommended that the shareholders of Semcon accept the offer. The
offer is conditional among other things upon the offer being accepted to more
than 90 percent and approval from the Swedish Competition Authority. Semcon is
an international technology company with more than 2,000 employees and 2021
revenue of SEK 1,711.3m and operating profit of SEK 175.1m. The combined entity
would on consensus estimates have a combined 2022e revenue of over EUR 500m and
have a strong market position in particular in the Nordics. Synergy effects are
estimated to amount to EUR 5m on an annual basis.

Financing secured, planning EUR 110-125m rights issue
The completion of the offer is not subject to any financing condition and
Etteplan is furthermore planning a rights issue of EUR 110-125m. Both the offer
and rights issue appear to have good support from existing shareholders of Both
Semcon and Etteplan. We see that the transaction would benefit both Etteplan as
a company as well as shareholders.

BUY (HOLD) with a target price of EUR 18 (16)
Considering consensus estimates for Etteplan and Semcon along with valuation
considerations and the impact of the transaction on net debt and nr. of shares,
we see a potential of some 10-20% in the coming years depending on realization
of synergy effects. Despite uncertainty, the offer appears favourable for
shareholders and with the size and geographic presences of both companies and
geographic presences the likelihood of regulatory obstacles appears limited. We
adjust our TP to EUR 18 (16), rating upgraded to BUY (HOLD). Our estimates
remain intact for now.

Open report


ETTEPLAN - ANNOUNCES CASH OFFER FOR SEMCON

23.08.2022 - 10.00 | Analyst comment

Etteplan announced a recommended cash offer of SEK 149 per Semcon’s share, for a
total value of approx. SEK 2,699m. Semcon would in our view be a suitable fit
for Etteplan, strengthening the service offering and international presence
along with offered synergy effects.

Read more

 * Etteplan announced a recommended cash offer of SEK 149 in cash per Semcon’s
   share. The total value of the offer is approximately SEK 2,699m. The offer
   price will not be increased.
 * The offer price represents a premium of of 31.6 percent compared to the
   closing price of Semcon shares on Nasdaq Stockholm on 22 August 2022 and
   32.0/27.6 percent compared to the volume-weighted average trading price
   during the last 30/180 trading days prior to the announcement of the offer.
 * The Board of Directors of Semcon unanimously recommends that the shareholders
   of Semcon accept the offer.
 * The Offer is conditional among other things upon the offer being accepted to
   such extent that Etteplan becomes the owner of shares in Semcon representing
   more than 90 percent of the total number of shares in Semcon (on a fully
   diluted basis).
 * Semcon is an international technology company with more than 2,000 employees
   in seven different countries. Semcon’s revenue in 2021 amounted to SEK
   1,711.3m and operating profit to SEK 175.1m. 
 * On 2022 estimates (one analyst) the offer would value Semcon at ~16x P/E and
   EV/EBIT of ~12x, roughly in line with Etteplan’s current valuation.

Open report


DOVRE - EARNINGS CONTINUE TO GROW

19.08.2022 - 09.35 | Company update

Dovre’s Q2 EBIT came in above our estimate due to Project Personnel. There were
no big surprises; we expect earnings growth to continue also next year.

Read more

Another strong quarter for Project Personnel

Dovre grew 38% y/y to EUR 47.3m top line vs our EUR 50.5m estimate. Project
Personnel and Consulting landed close to our estimates, while Renewable Energy
fell EUR 3m short. We reckon late Finnish spring to have caused Suvic project
delays, but the segment didn’t disappoint in terms of EBIT as it posted a big
y/y improvement despite Q2 being relatively slow and this year also challenged
by an inflation spike. Consulting EBIT was as expected as progress continued in
both Norway and Finland. Consulting is still mostly driven by early-stage
reviews of Norwegian civil & infrastructure projects, however the acquisition of
eSite has added a new angle to serve Finnish industrial clients with VR
solutions. Extended high demand in Norway also helped Project Personnel to top
our EBIT estimate, and as a result Dovre’s EUR 1.7m EBIT came in easily above
our EUR 1.2m estimate.

Renewable Energy could still drive another positive revision

Dovre revised its guidance only two weeks ago, so it came as no surprise there
was no further upgrade despite the continued high Q2 profitability and demand
outlook for H2. Oil prices stay high, which supports oil & gas capex levels and
hence Project Personnel, but risks seem to tilt more towards downside from here
on. We estimate 4.5% FY ‘22 EBIT margin for Project Personnel, which is more
than a satisfactory level yet still short of long-term potential. We continue to
expect only flat PP EBIT development for next year. Covid-19 may still cause
some sick leaves, while extraordinary inflation rates tend to be more of an
issue for Renewable Energy than the other two segments. Q3 is seasonally the
best one for Suvic but it may not achieve y/y EBIT improvement this year due to
a very strong comparison period.

EUR 7.5m EBIT leaves ample room for earnings growth

We see Dovre headed towards the upper end of its EBIT guidance range. Suvic’s H2
performance could yet lead Dovre to top the range, while Consulting should be
able to resume earnings growth next year. Renewable Energy’s expansion is also
set to continue. We see potential for EBIT to improve to EUR 9m next year and
thus we revise our TP to EUR 0.75 (0.70); retain BUY.

Open report


ENDOMINES - CLEARLY SHIFTING STRATEGIC FOCUS

19.08.2022 - 09.30 | Company update

Endomines saw good development on the production front in Finland in H1. The
updated strategy adds more emphasis on production in Finland while the US
operations are planned to be run through partnership models. We lower our TP to
SEK 1.7 (2.2), HOLD-rating intact.

Read more

Operative H1 figures quite in line with expectations
Endomines reported H1 operative figures well in line with our estimates. Pampalo
gold production amounted to 3,478 oz vs our estimate of 3,622 oz. Revenue
amounted to SEK 59.1m (Evli SEK 60.4m) while EBITDA amounted to SEK -38.0m (Evli
SEK -36.6m). EBIT of SEK -107.1m came below our estimate (SEK -73.6m) due to
amortizations of Friday assets. EBITDA of Pampalo operations turned positive in
Q2, at SEK 7.7m. Endomines expects production in H2/2022 to increase by 30-70%
compared with H1, putting the full year estimate at roughly 8,000-9,400 oz (Evli
updated estimate 8,847 oz). No production is expected from Friday in H2.

Strategy focusing on Finland and partnerships in the US
Endomines updated its strategy, with focus on Pampalo and development and
exploration along the Karelian Gold Line. Focus in the US will be on partnership
models, meaning that Endomines will not operate any assets by itself. We expect
production to rely on Pampalo in the near-term, with potential to bring Hosko
and/or Rämepuro to production in H2/2023, not yet included in our estimates. A
significant amount of resources will be used for exploration along the Karelian
Gold Line and the further funding in the near-term remains on the agenda. The
new strategy brings further uncertainty to the future of the US assets but given
the company’s resources and funding needs the logic is sound.

HOLD with a target price of SEK 1.7 (2.2)
With the new focus and corresponding changes to our SOTP- model, having lowered
the implied value of Friday and revisions to gold price estimates due to recent
volatility and changing interest environment, we adjust our TP to SEK 1.7 (2.2).
Our HOLD-rating remains intact.

Open report


ENDOMINES - PRODUCTION AT PAMPALO PICKING UP

18.08.2022 - 13.30 | Earnings Flash

Ramp-up of Pampalo progressed quite in line with our expectations. Friday
operations remain halted and appear to be on hold for the unforeseeable future.
The updated strategy revolves more heavily around Finland and the future of the
US operations remain a big question mark.

Read more

 * Revenue     in H1 amounted to SEK 59.1m, in line with our estimate of SEK
   60.4m. Gold production amounted to 3,478 oz vs our estimate of 3,622 oz.
 * EBITDA in H1 was at SEK -38.0, in line with our estimate of SEK -36.6m.
 * EBIT in H1 amounted to SEK -107.1m (Evli SEK -73.6m), including an impairment
   charge of SEK 54.9m for the Friday tangible assets. 
 * During H1, at Pampalo, gold production increased by 78% in Q2 to 2,227 oz
   compared with Q1. H2 production at Pampalo is estimated to be 30-70% higher
   than production during H1/2022, i.e. ~4,500-5,900 oz (Evli 5,671 oz).
 * Production at Friday remains halted and no gold production will be realized
   during H2/2022. Current focus is on investigating partnership options for
   both the mine and the Orogrande processing plant operations. 
 * At US Grant, Endomines is planning to undertake initial permitting activities
   and continue studies to define necessary development steps during H2/2022.
 * Endomines updated its strategy, which appears to lean on Pampalo and other
   deposits and exploration at the Karelian Gold Line, while focus in the U.S.
   is shifting towards partnership models.

Open report


DOVRE - HIGH PROFITABILITY CONTINUED

18.08.2022 - 09.45 | Earnings Flash

Dovre’s Q2 profitability topped our estimates mostly thanks to Project
Personnel, where demand remained high particularly in Norway.

Read more

 * Dovre Q2 revenue grew by 38% y/y to EUR 47.3m, compared to our EUR 50.5m
   estimate. The growth was all organic, some 75% of it due to Renewable Energy.
   Project Personnel amounted to EUR 22.4m vs our EUR 22.9m estimate, while
   Consulting revenue landed at EUR 4.6m vs our EUR 4.5m estimate. Renewable
   Energy recorded EUR 20.3m, compared to our EUR 23.1m estimate.
 * Q2 EBITDA came in at EUR 1.9m vs our EUR 1.4m estimate. EBIT was EUR 1.7m,
   compared to our EUR 1.2m estimate. Project Personnel EBIT amounted to EUR
   0.9m vs our EUR 0.6m estimate, while Consulting was EUR 0.6m vs our EUR 0.6m
   estimate. Renewable Energy was EUR 0.4m, compared to our EUR 0.3m estimate.
   Other functions & unallocated cost EUR -0.2m vs our EUR -0.3m estimate.
 * Dovre guides FY ’22 revenue to be more than EUR 185m and EBIT to be in the
   range of EUR 6.5-7.5m (unchanged).

Open report


MARIMEKKO - SOME UNCERTAINTY AHEAD

18.08.2022 - 09.25 | Company update

Marimekko’s Q2 result was strong and broadly in line with expectations. The
outlook provided for H2 is solid, but the upside potential is in our view
restricted.

Read more

Growth as expected, EBIT slightly above our estimates
Marimekko delivered solid topline growth in Q2 with net sales amounting to EUR
38.0m (Evli: 37.0m), representing 16% y/y growth. The growth was driven by
strong retail sales in Finland and solid development of int’l sales. According
to the company, int’l sales were impacted by unusual weightings of wholesale
deliveries, partly indicating a strong comparison period. Gross margin remained
at the comparison period’s level, thanks to a favorable sales-mix. With revenue
growing nicely, Q2 EBIT improved to EUR 5.7m (Evli: 5.3m), reflecting an EBIT
margin of 15%. However, increased fixed costs restricted the profitability
improvement somewhat.

We made some marginal estimate adjustments
We slightly adjusted our near-term estimates mainly driven by the solid outlook
provided for H2. We see the sales development strong given the company’s outlook
and the brands ATH awareness. In 2022, we expect net sales in Finland to grow by
9% y/y to EUR 100.9m while our estimate for int’l sales is EUR 67.4m, reflecting
y/y growth of 13%. Our group revenue estimate for 2022 amounts to EUR 168.3m.
With increased cost pressures, we expect a 22E EBIT of EUR 32.6m (19.4% margin).
In 2023, we expect group revenue to grow by 7% y/y, driven by both Finland (+5%)
and int’l sales (+10%). Meanwhile, with gross margin improving slightly and the
increase in fixed costs calming down, our 23E EBIT margin estimate is 19.7%.

HOLD with a target price of EUR 13.2 (14.5)
With the increased uncertainty and risks concerning the development of the
market environment, we have downgraded our valuation multiples for Marimekko. We
approximate Marimekko should be trading with 22-23E EV/EBIT multiples of 16-15x.
Now the company trades below our TP, but with the earnings growth being moderate
and upside potential not being massive, we retain our HOLD-rating and adjust TP
to EUR 13.2 (14.5).

Open report


MARIMEKKO - CONTINUES TO DELIVER STRONG RESULTS

17.08.2022 - 09.10 | Earnings Flash

Marimekko delivered strong Q2 result, with net sales broadly in line with and
EBIT beating our estimates. The growth was strong in domestic market with y/y
growth of 25% while int’l sales grew by 5% y/y.

Read more

•    Q2 group result: net sales increased by 16% y/y to EUR 38.0m, which was
broadly in line with our and consensus expectations (37.0/36.6m Evli/cons.). The
growth was driven by domestic sales while international growth was a bit
moderate. Gross margin was approx. flat y/y. With increased revenue, adj. EBIT
amounted to EUR 5.7m (5.3/5.8m Evli/cons.), reflecting an EBIT margin of 15%.
EPS amounted to EUR 0.12 (0.10 Evli/ cons.).
•    Finland: driven by strong retail sales, Finnish net sales increased by 25%
y/y to EUR 23.0m (Evli: 20.5m). Wholesale sales were flat y/y.
•    Int’l: with y/y growth of 5%, net sales amounted to EUR 15.0m (Evli:
16.5m). The growth was driven by Scandinavia, the EMEA region, and the APAC
region while North America saw low double-digit y/y decrease in its net sales.
Int’l business was negatively impacted by a different kind of weighting of
wholesale deliveries.
•    Category split: Fashion sales amounted to EUR 12.0m (+6% y/y). Home
category grew by 11% y/y to EUR 16.9m. Bags and accessories showed strong y/y
growth of 48% and amounted to EUR 9.0m.
•    Market outlook: Marimekko expects domestic sales to grow as well as APAC
sales and int’l sales to increase significantly. Both retail and wholesale
revenue are expected to increase in 2022. Licensing income is also estimated to
be higher than that of the comparison period. In percentage terms, net sales
growth is expected to be stronger at the beginning of 2022 than in H2.
•    FY’22 guidance intact: expecting revenue to grow and an EBIT margin ranging
between 17-20%.

Open report


NETUM - UPGRADE TO BUY

17.08.2022 - 08.45 | Company update

Netum’s H1 brought no surprises due to given preliminary figures but provided
further reassurance of a solid growth outlook. We adjust our target price to EUR
4.5 (4.3) and upgrade our rating to BUY (HOLD).

Read more

Investments into growth in H1
Netum had provided preliminary figures ahead of H1 and the earnings report as
such held no notable surprises. Net sales grew 47.8% y/y to EUR 15.4m, of which
22.6% was organic growth. The comp. EBITA increased by 14.0% y/y to EUR 1.8m,
but the comp. EBITA-margin declined by 4.0%p. The number of employees grew to
263 (H1/21: 171) mainly from successful new recruitments but also the Cerion
Solutions acquisition. H1 organic growth was supported by the increased
workloads under long framework agreements and the continued high level of
demand, while profitability was affected by front-loaded growth investments and
increased sick leaves due to the pandemic.

Public sector exposure proving to be beneficial
Demand in the public sector, accounting for the majority of Netum’s net sales,
has been and appears to continue to be at a high level, while the private sector
has shown some more fluctuation. New recruitments have notedly become more
challenging, but with the large number of recruitments made during H1, domestic
geographical expansion, and high public sector demand coupled with long
framework agreements, the near-term growth prospects remain solid. The wage
inflation/customer pricing equation currently appears to be well manageable and
although the current environment creates some margin pressure, we expect
profitability to remain at healthy levels. We have made limited revisions to our
estimates, expecting net sales growth of 42.5% (guidance >30%) and an
EBITA-margin of 12.5% (guidance 12-14%).

BUY (HOLD) with a target price of EUR 4.5 (4.3)
Netum currently trades quite in line with peers. With continued confidence in
the growth outlook through the public sector exposure, we adjust our TP to EUR
4.5 (4.3), valuing Netum at ~17x 2022e adj. P/E, and upgrade our rating to BUY
(HOLD).

Open report


NETUM - NO SURPRISES DUE TO PRELIMINARY FIGURES

16.08.2022 - 09.15 | Earnings Flash

Netum had provided preliminary figures before the H1 results and the earnings
report held no surprises. Revenue grew 47.8% y/y (22.6% organic) while the comp.
EBITA-margin fell by 4.0%p y/y to 11.4%. The number of employees grew 53.8% y/y.

Read more

 * Netum’s net sales in H1 amounted to EUR 15.4m (EUR 10.4m in H1/21), with
   preliminary figures provided pre-H1. Net sales grew 47.8% y/y, of which 22.6%
   was organic growth. Organic growth was attributable to increased workloads
   under long framework agreements and to the continued high level of demand.
 * EBITA in H1 was EUR 1.7m (EUR 1.8m in H1/21) and comparable EBITA EUR 1.8m
   (EUR 1.6m in H1/21). Comp. EBITA increased by 14.0% y/y, but the comp.
   EBITA-margin declined by 4.0%p. Profitability was affected by growth
   investments and increased subcontracting as well as sick leaves caused by the
   pandemic.
 * Operating profit in H1 amounted to EUR 0.9m (EUR 1.3m in H1/21), in line with
   our estimates (Evli EUR 0.9m), at a margin of 5.6%. 
 * Earnings per share was EUR 0.04 (H1/21: 0.01) vs. our estimate of EUR 0.05.
 * Personnel at the end of the period amounted to 263 (171).
 * Guidance for 2022 (updated 8.8.2022): Netum expects its revenue to grow by at
   least 30% and the EBITA-margin to be 12-14%.

Open report


PIHLAJALINNA - INVESTMENTS ARE STARTING TO PAY OFF

15.08.2022 - 09.35 | Company update

Pihlajalinna’s Q2 didn’t deliver many surprises; we expect further improvement
to materialize over the course of H2.

Read more

Q2 results were overall quite close to estimates

Pihlajalinna grew 22% y/y; the EUR 174m revenue topped the EUR 170m/167m
Evli/cons. estimates thanks to strong corporate as well as private customers,
although the latter volumes are still lagging relative to 2019. Outsourcing
profitability improved by EUR 0.7m y/y, despite continued high costs, due to
efficiency measures, index adjustments and service fee refunds. H1 employee
costs were exceptionally high by EUR 2.5m; the burden was slightly higher in Q1
than in Q2, but together with capacity additions (including four new private
clinics) meant profitability excluding outsourcing fell by EUR 2.3m y/y in Q2.
The EUR 16.9m adj. EBITDA was in line with estimates while the EUR 5.2m EBIT was
a bit soft relative to the EUR 5.9m/6.3m Evli/cons. estimates.

We expect H2 improvement to be visible in Q4 profitability

Q3 absences have been lower so far, but the situation could again change over
the fall. Capacity scales further up, however Pihlajalinna has already added
most of its targeted level and hence higher utilization rates should drive
profitability in H2. Pihlajalinna has also increased prices while inflation
appears to be manageable. Q3 EBITA will remain burdened y/y, yet Q4 could
achieve significant y/y improvement (Q4’21 was negatively affected, by some EUR
2m, by a spike in complete outsourcing specialized care costs while Covid-19
services revenue was still at a high level). High demand continues to support
profitability, and H2 tends to be seasonally favorable, but short-term cost
issues and Pohjola Hospital’s improvement pace create some uncertainty around H2
results. Meanwhile NIBD/EBITDA has been elevated, at least in the short-term,
due to the various recent investments for which Pihlajalinna now looks to reap
gains.

Long-term margin potential remains the big upside driver

We still don’t view the guidance challenging, although a positive revision may
not arrive until around Q4; earnings growth should in any case continue next
year. The 13x EV/EBIT valuation, on our FY ’23 estimates, is some 15% below
peers’ while Pihlajalinna’s EBIT margin is likely to stay at least a third below
a typical peer. Long-term upside potential hence continues to be meaningful. We
revise our TP to EUR 12.5 (13.0) and retain our BUY rating.

Open report


ADMINISTER - LOWERED FY2022 GUIDANCE

15.08.2022 - 09.30 | Company update

Administer lowered its guidance for net sales and profitability in 2022. The
mid-term potential remains but with the near-term uncertainty we lower our TP to
EUR 4.0 (4.7), BUY-rating intact.

Read more

Net sales and profitability seen to be weaker than expected
Administer issued a profit warning on Friday, Aug 12th. The company now expects
2022 net sales of EUR 47-49m (prev. >EUR 51m) and an EBITDA-margin of 5-7%
(prev. >8%). The lowering of the guidance is based upon the general economic
uncertainty and the impact on customer activity. Higher than anticipated
overlapping costs for the old and new system stemming from Administer’s
subsidiary Adner’s system reform have also impacted profitability negatively
during the current year. In addition, net sales from system consulting and
expert services in connection with EmCe’s client projects have been slightly
lower than the company had expected.

Organic growth and transactional volumes a concern
We have for now adjusted our estimates towards the mid-range of the new guidance
and our 2022 EBITDA estimate is as such down by near 40%. In our view the lower
customer activity due to the general economy is of more concern, as costs
relating to the system reform should ease at some point and we hypothesize that
the lower project-based revenue may at least partially be due to higher
sick-leaves that have been seen in Finland during H1 due to the pandemic.
Administer reports its H1/2022 results on August 31st. Inorganic growth plans
have progressed according to communicated plans, with four acquisitions so far
during 2022, and our interest in the results will be primarily oriented towards
the noted factors affecting growth and the development of organic growth
ambitions.

BUY-rating with a target price of EUR 4.0 (4.7)
Administer’s 2022 financials were known to be sub-par in 2022 due to previous
challenges but the guidance downgrade brings an unfortunate dent in the growth
and profitability trajectory. The company’s mid-term potential remains, but with
the noted challenges we lower our TP to EUR 4.0 (4.7), BUY-rating intact.

Open report


MARIMEKKO - THE UNDERVALUATION HAS NARROWED

14.08.2022 - 18.40 | Preview

Marimekko releases its Q2 result on Wednesday. The company delivered strong Q1
result, and we expect the trend to continue also in Q2. The demand for lifestyle
products has been favorable in H1, but strong comparison figures, low consumer
trust, and an inflationary environment might affect the magnitude of H2 growth.

Read more

Demand still strong, inflation kicks in during H2 and 2023
The demand for fashion and lifestyle products has been strong in H1. We see the
trend especially in fashion, bags, and accessories where the consumers have been
renewing their wardrobe collections after COVID-19 lockdowns. In addition,
Marimekko has consistently grown its brand awareness abroad which can be seen in
a strong international growth. However, we see the inflation starting to kick in
during H2 and 2023, and with the combination of low consumer trust and strong
comparison figures, we see the growth slowing down in H2.

Q2 is driven by both domestic and international growth
We made no changes to our estimates ahead of the Q2 result. In Q2, with the
favorable market environment, we expect revenue to amount to EUR 37.0m driven by
domestic growth of 12% and international growth of 15%. We expect all markets,
except North America, to see double-digit growth in Q2. We expect adj. EBIT to
improve y/y to EUR 5.3m, but adj. EBIT margin of 14.3% to fall below the
comparison period driven by softer gross margin and increased fixed costs. Our
2022 topline estimate is EUR 167.7m (+10% y/y) and EBIT is EUR 32.5m (19.4%
margin). The company expects its 2022 revenue to be higher that of the
comparison period and its EBIT margin to land within the range of 17-20%.

HOLD (BUY) with a target price of EUR 14.5
Marimekko is valued with 22-23E EV/EBIT multiples of 16-14.5x and 22-23E P/E
multiples of 21-20x. The current valuation is quite neutral, but most of the
undervaluation has shrunk since our last update. In our view, the visibility of
H2 is somewhat uncertain and with inflation starting to kick in, we see that
consumer demand could be diluted or skewing towards lower price point lifestyle
goods. We downgrade our rating to HOLD (prev. BUY) and retain TP of EUR 14.5.

Open report


SOLTEQ - NEAR-TERM CHALLENGES TO OVERCOME

12.08.2022 - 09.30 | Company update

Solteq reported weak Q2 figures, mainly due to challenges in the Utilities
business. Despite near-term uncertainty, the investment case in terms of focus
areas, demand, and increased share of software still looks favourable.

Read more

Q2 figures well below expectations
Solteq reported weak Q2 figures. Revenue declined 3.0% y/y to EUR 17.9m (Evli
EUR 19.9m) while EBIT fell clearly y/y to EUR 0.4m (Evli EUR 2.0m). Solteq
Software performed well below expectations, with revenue of EUR 6.5m (Evli EUR
7.3m) and adj. EBIT of EUR -0.9m (Evli EUR 0.1m). Solteq Digital was also
slightly below expectations due to some delays in the start of certain customer
projects, but relative profitability still remained at a good level. Solteq
still kept its guidance intact, expecting Group revenue to grow and profit to
weaken.

Challenges to overcome in Utilities business
The main reason behind the weak Q2 figures was challenges relating to product
development in the Solteq Utilities business. The Utilities business to our
understanding suffered from a combination of rapid growth, having previously
signed several significant orders, and non-sufficient standardization of
products. As a result, resources were in sub-optimal use due to more time having
to be spent on developing and improving products as opposed to project
deliveries. The situation is being alleviated but we see that some catch-up will
be seen during H2. The more fundamental issue relating to product development
and standardization will likely be a lengthier process, and Solteq noted an
updated strategy being worked on. Notably, Solteq did not amend its guidance,
which implies expectations of good performance during H2.

BUY-rating with a target price of EUR 2.7 (3.4)
Valuation on our 2022e estimates is stretched, but we still see that the market
demand, strategic focus on the Utilities business and recurring revenue
potential support the investment case in the mid-term. With the near-term
challenges and uncertainty, we adjust our TP to EUR 2.7 (3.4), BUY-rating
intact.

Open report


PIHLAJALINNA - RESULTS LARGELY IN LINE

12.08.2022 - 08.30 | Earnings Flash

Pihlajalinna’s Q2 results came in largely according to expectations. Top line
growth continued strong and certain cost items remained high.

Read more

 * Q2 revenue grew by 21.9% y/y and amounted to EUR 173.7m, compared to the EUR
   169.5m/166.6m Evli/consensus estimates. Corporate customer revenue was EUR
   56.0m vs the EUR 52.7m/51.8m Evli/consensus estimates, while private
   customers amounted to EUR 27.4m vs the EUR 22.4m/23.4m Evli/consensus
   estimates. Public sector customers came in at EUR 108.8m, compared to the EUR
   113.0m/109.8m Evli/consensus estimates. Revenue grew 5.3% on an organic basis
   and customer volumes, excluding municipal outsourcing arrangements and
   Covid-19 testing, grew 69% y/y (28% without M&A transactions). Organic growth
   was at an especially good level in occupational health services and surgical
   operations.
 * Covid-19 services revenue was EUR 3.2m in Q2 (EUR 8.2m a year ago).
 * Adjusted EBITDA was EUR 16.9m vs the EUR 16.4m/17.0m Evli/consensus
   estimates, while adjusted EBITA was EUR 7.3m vs our EUR 7.9m estimate.
   Adjusted EBIT landed at EUR 5.2m, compared to the EUR 5.9m/6.3m
   Evli/consensus estimates. Employee benefit expenses were again exceptionally
   high due to sickness-related absences which increased costs by some EUR 2.5m.
   Meanwhile Pihlajalinna’s supply of appointments and imaging services grew by
   nearly 38%. The costs of complete outsourcing arrangements were still fairly
   high, but profitability improved slightly in Q2 thanks to efficiency
   improvement programs, index adjustments and service fee refunds.
 * Pihlajalinna guides FY ’22 revenue to increase substantially, while adjusted
   EBITA is expected to be on a par with 2021 (unchanged).

Open report


ASPO - EARNINGS TO REMAIN RELATIVELY HIGH

11.08.2022 - 09.40 | Company update

Aspo’s record high H1 results are to face headwinds in H2, but in our view EBIT
may well stay above EUR 40m also next year thanks to ESL and developments in
Leipurin.

Read more

Telko especially will meet headwinds in H2 and FY ‘23

Aspo’s Q2 revenue grew by 16% y/y to EUR 161m vs the EUR 142m/148m Evli/cons.
estimates. All segments hit revenues above our estimates, and the EUR 16.0m adj.
EBIT clearly topped the EUR 9.3m/9.5m Evli/cons. estimates. H2 has typically
been Aspo’s stronger half in terms of profitability but this year will be
different, however the company seems headed close to EUR 50m FY ‘22 EBIT despite
some softening in H2. It’s still very early innings in terms of Aspo’s updated
compounder strategy, but the company appears poised to make further progress
with M&A as well as ESL’s vessel pooling partnership.

ESL and Leipurin to deliver robust results in H2 and FY ‘23

ESL may not improve next year given the EUR 17m adj. EBIT in H1’22, yet outlook
remains strong enough so that we wouldn’t expect a large EBIT decline either.
Meanwhile Telko’s quarterly EBIT has recently jumped to the EUR 7-8m ballpark,
compared to earlier levels of EUR 4-5m before raw materials prices shot up.
Telko’s H2’22 EBIT may stay relatively high as most prices are yet to decline,
but there’s a risk of reversion to more moderate levels by next year. Telko has
many different product categories, and the overall price outlook appears stable
although the risks tilt more towards downside. Telko has also placed more
Western volumes recently, and against this backdrop our ca. EUR 4m quarterly
EBIT estimates seem conservative. Leipurin closes the Kobia acquisition on Sep
1, which adds to our estimates in addition to the recent relatively strong
organic performance.

Valuation continues to be undemanding

Our estimate revisions for H2’22 and FY ’23 come in relatively small. We
estimate H2’22 EBIT at EUR 21.4m (prev. EUR 20.2m), while we see FY ’23 EBIT at
EUR 43.4m (prev. EUR 39.0m). The increases are especially due to Leipurin as the
company is making progress with its acquisition as well as the divestiture of
the machinery business. Multiples are still not demanding, despite the
inevitable short to medium term softening in EBIT, as Aspo is valued only around
8x EV/EBIT on our FY ’23 estimates. We update our TP to EUR 9.5 (8.5); we retain
our BUY rating.

Open report


ETTEPLAN - MARKET ENVIRONMENT MAIN CONCERN

11.08.2022 - 09.15 | Company update

Etteplan continued to post good growth figures in Q2, but profitability came in
slightly soft. Etteplan expects the demand situation to remain fairly good
throughout 2022, but we see some added uncertainty going forward.

Read more

Continued good growth, profitability on the softer side
Etteplan reported fairly good Q2 results despite some softness in profitability.
Revenue grew 18.9% y/y (10.3% organic excl. FX) to EUR 89.3m (88.8m/89.9m
Evli/cons.) and EBIT amounted to EUR 6.8m (7.4m/8.0m Evli/cons.). The
performance in Engineering Solutions was very good and slightly above our
estimates while Technical Documentation Solutions and Software and Embedded
Solutions performed below expectations. Group profitability overall was affected
by increased travel and personnel event/training related expenses along with
increased sick leaves and holidays. Organizational restructuring measures were
implemented in Software and Embedded Solutions due to a weakened operational
efficiency. Guidance kept intact, expecting revenue of EUR 340-370m and EBIT of
EUR 28-32m in 2022.

Earnings uncertainty increased heading into H2
Based on management comments the market environment is expected to remain at
fairly decent levels despite the uncertainty and some fluctuations. Our
estimates remain largely unchanged, having slightly lowered our profitability
expectations following continued weaker profitability in Technical Documentation
Solutions and Software and Embedded Solutions. A normalization of the high level
of travel and personnel expenses in Q2 should slightly benefit profitability but
the faced challenges relating to operational efficiency appear unlikely to be
fixed in the very short-term.

HOLD-rating with a target price of EUR 16.0 (17.0)
Etteplan’s Q2 report overall was slightly on the softer and we perceive a slight
increase in uncertainty related to the market environment, due to which we
adjust our target price to EUR 16.0 (17.0), HOLD-rating intact. Etteplan’s
valuation currently remains justifiably above the peer median but potential
upside remains limited in the current environment.

Open report


SOLTEQ - CHALLENGING QUARTER

11.08.2022 - 08.30 | Earnings Flash

Solteq’s Q2 fell short our expectations, with revenue at EUR 17.9m (Evli EUR
19.9m) and adj. EBIT at EUR 0.6m (Evli EUR 2.0m). Challenges were caused by the
development of software products in the Solteq Utilities business and the
resulting increase in project delivery costs.

Read more

 * Net sales in Q2 were EUR 17.9m (EUR 18.5m in Q2/21), below our estimates
   (Evli EUR 19.9m). Growth in Q2 amounted to -3.0% y/y. 
 * The operating profit and adj. operating profit in Q2 amounted to EUR 0.4m and
   0.6m respectively (EUR 2.4m/2.5m in Q2/21), clearly below our estimates (Evli
   EUR 2.0m/2.0m). 
 * Q2 was challenging for Solteq, with main challenges caused by the development
   of software products in the Solteq Utilities business and the resulting
   increase in project delivery costs. Despite the challenges, the outlook for
   Solteq Group’s international and domestic business is estimated to remain
   positive.
 * Solteq Digital: revenue in Q2 amounted to EUR 11.4m (Q2/21: EUR 11.9m) vs.
   Evli EUR 12.6m. Growth amounted to -4.1%. The adj. EBIT was EUR 1.5m (Q2/21:
   EUR 1.9m) vs. Evli EUR 1.9m. Demand in key business areas, such as digital
   business and commerce solutions, is expected to remain at a good level during
   the ongoing quarter.
 * Solteq Software: Revenue in Q2 amounted to EUR 6.5m (Q2/21: EUR 6.6m) vs.
   Evli EUR 7.3m. The adj. EBIT was EUR -0.9m (Q2/21: EUR 0.6m) vs. Evli EUR
   0.1m. Growth was -0.9%. The business outlook for Solteq Software is expected
   to remain positive.
 * Guidance for 2022 (reiterated): group revenue is expected to grow and
   operating profit to weaken.

Open report


ETTEPLAN - SOLID GROWTH CONTINUES 

10.08.2022 - 13.30 | Earnings Flash

Etteplan's net sales in Q2 amounted to EUR 89.3m (EUR 88.8m/89.9m Evli/cons.),
with continued solid growth of 19% y/y (10.3% organic). EBIT amounted to EUR
6.8m (EUR 7.4m/8.0m Evli/cons.), with lower relative profitability y/y due to
among other things increases in personnel events as well as sick leaves and
holidays.

Read more

 * Net sales in Q2 were EUR 89.3m (EUR 75.0m in Q2/21), in line with our
   estimates and consensus estimates (EUR 88.8m/89.9m Evli/Cons.). Growth in Q2
   amounted to 19% y/y, of which 10.3% organic growth.
 * EBIT in Q2 amounted to EUR 6.8m (EUR 6.7m in Q2/21), below our estimates and
   consensus estimates (EUR 7.4m/8.0m Evli/cons.), at a margin of 7.6%.
   Profitability was affected by increased costs relating to employee training
   and social events, sick leaves and holidays, and organizational restructuring
   in the software business.
 * EPS in Q2 amounted to EUR 0.22 (EUR 0.20 in Q2/21), slightly below our and
   consensus estimates (EUR 0.23/0.24 Evli/cons.).
 * Net sales in Engineering Solutions in Q2 were EUR 46.2m vs. EUR 46.0m Evli.
   EBITA in Q2 amounted to EUR 4.9m vs. EUR 4.6m Evli. 
 * Net sales in Software and Embedded Solutions in Q2 were EUR 25.1m vs. EUR
   24.6m Evli. EBITA in Q2 amounted to EUR 1.9m vs. EUR 2.3m Evli. 
 * Net sales in Technical Documentation Solutions in Q2 were EUR 17.7m vs. EUR
   18.0m Evli. EBITA in Q2 amounted to EUR 1.5m vs. EUR 2.0m Evli. 
 * Guidance for 2022 (intact): Revenue is estimated to be EUR 340-370m and the
   operating profit is estimated to be EUR 28-32m

Open report


ASPO - ANOTHER RECORD EBIT

10.08.2022 - 10.00 | Earnings Flash

Aspo’s Q2 results were broadly higher than expected as all three segments
reached record-high quarterly profitability levels. ESL’s H2 looks to remain
strong, while Telko needs to manage with decreasing top line due to the exit
from Russia.

Read more

 * Aspo Q2 revenue for continuing operations increased by 16% y/y to EUR 161.4m,
   compared to the EUR 142.0m/148.3m Evli/consensus estimates.
 * Q2 adjusted EBIT was EUR 16.0m vs the EUR 9.3m/9.5m Evli/consensus estimates.
 * ESL Q2 revenue amounted to EUR 60.3m vs our EUR 50.2m estimate, while
   adjusted EBIT landed at EUR 9.2m vs our EUR 6.3m estimate. All vessel
   categories’ profitability remained strong during the quarter. Demand looks to
   stay high at least over the course of H2.
 * Telko’s top line was EUR 71.8m, compared to our EUR 68.5m estimate, whereas
   adjusted EBIT amounted to EUR 7.2m vs our EUR 4.2m estimate. Price levels
   remained high, and volumes grew especially in Western markets. Western sales
   are expected to stay at a relatively stable level, but significantly
   decreasing sales in Russia will drag revenue lower during H2. The overall
   outlook on prices seems to be somewhat stable.
 * Leipurin Q2 revenue was EUR 29.3m vs our EUR 23.3m estimate. Adjusted EBIT
   came in at EUR 0.9m, compared to our EUR 0.3m estimate.
 * Other operations cost EUR 1.4m, compared to our EUR 1.5m estimate.
 * Aspo’s guidance remains unchanged as the company expects comparable operating
   profit to improve from previous year (EUR 42.4m).

Open report


SUOMINEN - MARGINS ARE CATCHING UP IN H2

10.08.2022 - 09.20 | Company update

Suominen’s Q2 earnings missed estimates, but valuation isn’t very demanding on
moderate estimate levels.

Read more

Suominen’s pricing will need to catch up some more in H2

Suominen’s Q2 revenue grew 4% y/y to EUR 118m, compared to the EUR 116m/118m
Evli/cons. estimates. Americas’ EUR 64m top line was soft relative to our
estimate despite the EUR 8m FX tailwind, however Europe continued to grow at a
16% y/y pace. We note neither Europe nor Brazil have seen inventory-related
demand issues like the US. Group sales volumes improved just a bit q/q, in both
Americas and Europe, but remained below the level seen a year ago as US
customers still suffered from high inventories which have been blocking up the
retail channel. The problem arose last summer and Suominen’s customers expected
earlier inventories to have melted by the middle of this year. The problem has
since eased somewhat, although not as fast as was expected. Sales prices
continued to follow raw materials but not enough to fully compensate for the
cost inflation, which resumed at a high single-digit q/q level in Q2. EBITDA
thus fell to EUR 1.9m vs the EUR 7.0m/6.7m Evli/cons. estimates. Raw materials
prices may now be stabilizing, however energy prices, especially in Italy, will
continue to climb in H2.

Volumes are growing, yet cost inflation remains a nuisance

Q3 will mark an improvement thanks to growing volumes, as seen already in July,
and higher prices as they continue to catch up with raw material inflation.
Moist toilet tissue volumes are set to rise over the course of H2 thanks to US
production line conversions, while Suominen has recently completed incremental
investments in Italy and announced a EUR 6m production line upgrade in Finland.
We do not hence view capacity utilization levels a pressing risk, however cost
inflation remains an acute issue. We make some upward revisions to our H2
revenue estimates, but we revise our Q3 EBITDA estimate to EUR 7.4m (prev. EUR
10.8m). We see H2’22 EBITDA at EUR 20.5m.

Multiples aren’t demanding in the light of H2 improvement

We estimate a marked improvement for H2, although the level is still quite
modest. Suominen is valued 4x EV/EBITDA and 7x EV/EBIT on our FY ’23 estimates,
which aren’t very high levels on moderate estimates. We retain our EUR 3.5 TP
and BUY rating.

Open report


SUOMINEN - PROFITABILITY FELL VERY LOW

09.08.2022 - 10.00 | Earnings Flash

Suominen’s Q2 profitability fell clearly below estimates as cost inflation
continued again relatively strong. Profitability will nevertheless improve in Q3
and especially in Q4.

Read more

 * Suominen Q2 revenue grew by 4% y/y to EUR 118.0m vs the EUR 116.0m/118.4m
   Evli/consensus estimates. The impact of currencies was EUR 8.0m. Americas
   landed at EUR 64.2m, compared to our EUR 67.0m estimate, while Europe
   amounted to EUR 53.8m vs our EUR 49.0m estimate. Overall sales volumes
   improved slightly q/q but remained well below y/y. Suominen has widened its
   product portfolio in the US for the production lines suffering from inventory
   imbalances and expects improved demand in H2’22 based on new contracted
   volumes.
 * Gross profit came in at EUR 5.0m, compared to our EUR 9.3m estimate. Gross
   margin was 4.2% vs our 8.0% estimate. Q2 did not see an improvement in demand
   for the hard surface disinfectant products which have caused trouble in the
   US supply chain. Cost inflation also continued in Q2, especially in Europe.
 * Q2 adjusted EBITDA was EUR 1.9m vs the EUR 7.0m/6.7m Evli/consensus
   estimates, while EBIT was EUR -2.9m vs our EUR 2.0m estimate. Fixed cost
   savings had a small positive impact on the result.
 * Suominen guides comparable EBITDA to decrease clearly in 2022 (unchanged).

Open report


PIHLAJALINNA - LOOKING FORWARD TO H2 IMPROVEMENT

09.08.2022 - 09.20 | Preview

Pihlajalinna reports Q2 results on Fri, Aug 12. Q2 earnings will remain modest
due to the integration process and a couple of other cost issues highlighted in
the Q1 report.

Read more

Q1 results were better than expected despite many burdens

Pihlajalinna’s Q1 results delivered a positive surprise as both revenue and EBIT
topped estimates. Organic growth amounted to 7%, driven by corporate customers
where the Pohjola Hospital acquisition was an additional help to top line. The
integration process went clearly better than expected over the first few months
while outsourcing profitability also improved. Surgical operations performed
better than the company expected in Q1. There were a few factors in Q1, in
addition to the integration process, which limited profitability and are likely
to do so at least to some extent also in Q2. High levels of sick leaves (+50%)
due to the pandemic led to exceptionally high employee costs as Pihlajalinna had
to resort to substitutes. Meanwhile Covid-19 services revenue continues to
decline and is no more very profitable. Pihlajalinna is at the same time scaling
up capacity in anticipation of near future demand, all of which means Q2
profitability will remain modest relative to long-term potential.

Focus rests on improvement over the course of H2

We make only marginal estimate revisions ahead of the report. We expect flat
profitability q/q, at EUR 7.9m in terms of adj. EBITA, or down by EUR 1.0m y/y.
We estimate top line growth to have increased to 19% y/y as Q2 was the first
quarter in which Pohjola Hospital was included from the beginning. The report
will update on the integration process; the acquisition reached positive results
in two months, and progress has likely continued over the summer. The report may
also provide an update on certain outsourcing restructuring negotiations. We do
not view the FY ‘22 guidance for flat adj. EBITA challenging and, although there
are many moving parts, we consider a guidance upgrade likely during or after Q3.

Valuation not demanding considering the margin upside

Pihlajalinna’s valuation is still not too challenging as the earnings multiples
are well below peers’ (by some 20%) while profitability margins only begin to
catch up. Peer multiples have however faced headwinds in the past three months
and hence we adjust our TP to EUR 13 (14). We retain our BUY rating.

Open report


NETUM - ON TRACK DESPITE SOME CHALLENGES

09.08.2022 - 09.15 | Company update

Netum lowered its earnings guidance for 2022 following elevated H1 costs, while
preliminary figures showed faster than expected growth, with the news in our
view overall on the neutral/slightly positive side. We retain our target price
of EUR 4.3 and HOLD-rating.

Read more

Solid growth in H1 but softness in profitability
Netum provided preliminary information on its H1 results and lowered its
earnings guidance. Netum’s revenue growth was faster than anticipated, up 47.8%
y/y to EUR 15.4m (Evli EUR 14.1m). EBITA amounted to EUR 1.7m (Evli EUR 2.0m),
with the EBITA-margin falling to 11.2% of revenue (H1/2021: 17.1%). Netum
lowered its earnings guidance for 2022, now expecting an EBITA-margin of 12-14%,
having previously expected to achieve an EBITA-margin of at least 14%. The
company’s revenue is intact, with revenue expected to grow over 30% y/y. The
lowered earnings guidance is due to larger than expected investments in
personnel growth made in the first half of 2022, a higher than usual volume of
subcontracting, sick leaves caused by the coronavirus and the general cost
increase.

Announcement in our view neutral/slightly positive
The lower relative profitability is slightly on the negative side but given that
the cost increase appears to be largely related to enabling growth, coupled with
a good demand and faster than anticipated H1 growth, the development in our view
is more on the neutral/slightly positive side. The revised guidance also implies
profitability improvements in H2, but the development of the company’s cost base
will still be something to watch going forward. We have revised our estimates,
now expecting 2022 revenue of EUR 31.9m (prev. 29.6m), a y/y growth of 42.4%,
and an EBITA of EUR 3.9m, (prev. 4.2m) for a 12.4% EBITA-margin.

HOLD-rating with a target price of EUR 4.3
We retain our target price of EUR 4.3 and HOLD-rating. Our TP values Netum at
16.1x and 11.9x 2022e and 2023e P/E (goodwill amort. adj.). We consider a
premium to peers justified given the rapid growth and still rather healthy
profitability, with the current valuation level rather fair given some
uncertainty.

Open report


NETUM - SOLID GROWTH, PROFITABILITY SOFTNESS

08.08.2022 - 10.15 | Analyst comment

Netum provided preliminary H1/2022 figures, with growth better than we had
expected while profitability was slightly weaker due to personnel growth,
increased subcontracting, sick leaves and general cost increase. Netum still
expects over 30% growth in 2022, EBITA now expected to be 12-14% of revenue
(prev. over 14%).

Read more

 * Netum provided preliminary information on its H1/2022 result and lowered its
   earnings estimate.
 * Netum’s revenue during H1/2022 grew 47.8% from the previous year and amounted
   to EUR 15.4m (Evli EUR 14.1m). EBITA was EUR 1.7m (Evli EUR 2.0m) or 11.2% of
   revenue.
 * Netum lowered its earnings estimate for the year 2022, expecting EBITA to be
   approximately 12–14% of revenue (prev. over 14%). The Group’s revenue
   estimate for 2022 is intact, with revenue expected to grow at least 30% from
   the previous year.
 * The company's profitability estimate is lowered due to the larger than
   expected investments in personnel growth made in the first half of 2022, a
   higher than usual volume of subcontracting, sick leaves caused by the
   coronavirus and the general cost increase.
 * Overall, the news is in our view slightly more on the positive side despite
   the profitability guidance downgrade given the rapid growth in the first half
   of the year and as the guidance implies expectations for improved
   profitability during H2. We had estimated a 2022 EBITA-margin of 14.3% and
   the difference to the mid-point of the new guidance is thus small.
 * Netum will publish its H1/2022 report on August 16th.

Open report


SCANFIL - HIGH DEMAND AND BETTER PRODUCTIVITY

08.08.2022 - 09.35 | Company update

Scanfil’s Q2 report didn’t reveal big surprises, although there were a couple of
profitability headwinds which should not limit performance that much going
forward.

Read more

Q2 profitability faced a couple of headwinds

Scanfil Q2 top line grew 23% y/y to EUR 213m vs the EUR 202m/213m Evli/cons.
estimates. Growth was 11% when excluding the spot component purchases; 3% was
due to inflation and thus underlying comparable growth was ca. 8%, neatly above
the 5-7% long-term organic target. Advanced Consumer Applications didn’t achieve
much growth without the transitory invoicing items, but other than that demand
remained favorable for all segments. EBIT landed at EUR 10.1m vs the EUR
11.3m/11.2m Evli/cons. estimates. The miss can be attributed to the FX loss
which was mainly due to strong USD; Scanfil has since put hedges into place,
although it’s still not entirely immune to FX moves. Lockdowns in China also hit
profitability in Suzhou during the spring, but the situation has since
normalized.

Component shortages seem to be easing already

The component availability situation has been a nuisance for well over a year,
but there are now signs of improvement. Scanfil sees Q3 spot market purchases
already lower than in Q2 yet still somewhat high. The stabilizing component
situation will help productivity and profitability going forward, and Scanfil
looks to manage its elevated inventory levels down. This easing should be a
major factor in helping H2 EBIT higher; Scanfil’s guidance implies meaningful
EBIT margin improvement for H2 without any significant changes in product mix.
Late increases in production space mean Scanfil can meet high customer demand at
least in the short-term, while M&A remains a likely tool for potential larger
increases in manufacturing footprint.

Profitability has room to improve quite a bit more

Scanfil may not achieve significant top line growth next year as the spot market
purchases fade away, however that should not limit absolute profitability
potential. Scanfil’s 7% long-term EBIT margin target remains a relevant
benchmark, but it is likely to take at least a few more years to reach that
level. Scanfil is valued 7.5x EV/EBITDA and 10x EV/EBIT on our FY ’22 estimates.
The multiples are in line with peers’ while Scanfil’s margins top those of the
typical peer. We retain our EUR 8 TP and BUY rating.

Open report


CAPMAN - STEADY AS SHE GOES

05.08.2022 - 09.15 | Company update

CapMan showed good progress across the board in Q2. The Services business is
showing signs of bringing the growth pace up a notch and the overall
expectations remain favourable. We retain our BUY-rating and TP of EUR 3.4.

Read more

Q2 results slightly better than expected
CapMan reported slightly better than expected Q2 results. Turnover amounted to
EUR 17.7m (EUR 16.5m/17.8m Evli/cons.) while operating profit amounted to EUR
14.1m (11.5m/11.9m Evli/cons.). The Management company business performance was
in line with expectations (EBIT 6.1m/6.1m act./Evli), with 3.2m in carried
interest (Evli EUR 3.0m) mainly from CapMan’s growth Equity fund. The Services
business growth pace increased, and the business area exceeded our expectations
on growth and profitability. The main deviations to our estimates came from fair
value changes (EUR 9.8m/6.0m act./Evli) aided by the Picosun exit, CapMan’s
largest exit measured by exit value. A one-off cost of EUR 1.4m due to the early
vesting of CapMan’s 2020 performance share plan had a negative impact on costs.

Good overall expectations for H2/2022
Our 2022 estimates revisions roughly correspond to the deviation in our Q2
estimates and actual figures, now expecting an operating profit of EUR 65.1m
(2021: 44.6m). The carry potential remains in place, noting however the
uncertainty relating to timing and magnitude. On-going and completed deals
post-Q2 provide additional support for continued solid investment returns. AUM
growth is supported by the Infra II fund (recent first close) and the new Social
Real Estate strategy fund (first close H2/22e) along with other on-going fund
raisings and open-ended products. We expect the net AUM growth pace to slightly
slow down following increased exits.

BUY-rating with a TP of EUR 3.4
Without larger changes to our estimates or views we retain our TP of EUR 3.4.
Valuation remains favourable, with 2022e P/E at just below 10x. The high share
of uncertain earnings from carry and investment returns remains a limiting
factor for valuation upside, support is provided by growing dividend payments.

Open report


ENERSENSE - RESULTS ARE BURDENED ON MANY FRONTS

05.08.2022 - 09.05 | Company update

Enersense’s Q2 was weak, and H2 is set to remain modest. There’s still much
uncertainty around the improvement slope, however valuation appears neutral
relative to peers.

Read more

Inflation and certain low project volumes hurt Q2 results

Enersense’s Q2 top line declined 3% y/y to EUR 59.8m. The softness was mostly
due to Smart Industry, where e.g. lower Olkiluoto project volumes explained the
fall. The war also led to project delays, and the ICT strike hurt volumes within
Connectivity (it also suffered from inflation particularly due to fuel).
Inflation, which in the case of Enersense mostly means higher metal and fuel
prices, is especially a problem in the Baltics, where long contracts also add to
the pain. International Operations thus saw a marked decline in profitability
even when revenue grew by 14% y/y. Existing framework agreements suffer from
inflation, although Enersense has been able to make some progress in adjusting
their rates for higher costs. Power fared relatively well due to its more
dynamic nature of business.

Enersense continues to work towards its targets

Inflation was a major issue as adj. EBITDA fell to EUR -0.4m from EUR 4.8m a
year ago. Enersense sees Q3 as the most profitable quarter also this year even
though inflation continues to hurt results in H2. Investments in offshore wind
capabilities will still be a burden in H2, in addition to which ERP investments
are set to continue for a few years. H2 profitability will remain far below
potential, but volumes continue to grow as recent orders announced over the
summer indicate. There are also no major issues with e.g. labor availability.
Enersense recently announced the acquisition of Voimatel to add to Connectivity
and Power, but the deal still waits for competition authority approvals.

Valuation appears broadly in line with peers

We cut our FY ’23 adj. EBITDA estimate to EUR 16.7m from EUR 22.2m due to the
current challenges. Enersense is valued some 5.5x EV/EBITDA and 12x EV/EBIT on
our FY ’23 estimates. The earnings multiples are broadly in line with those of
peers; there remains much uncertainty around next year’s margins, but our
estimated 2.9% EBIT is still not that high a level. Enersense’s multiples are
close to Eltel’s, and the two are also similar in the sense that FY ’22 results
are set to be modest for both. Our new TP is EUR 6 (8); we retain our HOLD
rating.

Open report


SCANFIL - STRONG H2 PROFITABILITY IN THE CARDS

05.08.2022 - 08.30 | Earnings Flash

Scanfil’s Q2 report didn’t serve any major surprises. Top line was largely
according to expectations, although Q2 profitability came in a little soft but
only implies stronger EBIT in H2.

Read more

 * Scanfil Q2 revenue grew by 23% y/y to EUR 212.9m, compared to the EUR
   201.7m/212.5m Evli/consensus estimates. Transitory component invoicing
   amounted to EUR 29.5m during the quarter. Customer demand was generally
   strong in all customer segments, however poor availability of electronic
   components remained a challenge. Spot market component purchases will remain
   high at least in Q3.
 * Advanced Consumer Applications amounted to EUR 68.7m vs our EUR 64.6m
   estimate, while Energy & Cleantech was EUR 53.5m vs our EUR 54.2m estimate.
   Automation & Safety landed at EUR 45.6m, compared to our EUR 41.6m estimate.
 * Q2 adjusted EBIT came in at EUR 10.1m vs the EUR 11.3m/11.2m Evli/consensus
   estimates. There was an FX loss of EUR 1.4m, mainly due to the strengthening
   of the US dollar. China’s lockdown measures affected the Suzhou factory’s
   profitability especially in April, but the level returned to normal in May
   and June. Scanfil’s guidance also implies strong H2 profitability.
 * Scanfil guides EUR 800-880m in revenue and EUR 43-48m in adjusted EBIT for FY
   ’22.

Open report


ENERSENSE - CHALLENGES WILL CONTINUE IN H2

04.08.2022 - 13.00 | Earnings Flash

Enersense’s Q2 results were known before the official release as the company
disclosed preliminary figures in connection with a negative earnings guidance
revision.

Read more

 * Enersense Q2 revenue amounted to EUR 59.8m, down by 2.9% y/y. Power revenue
   grew 17% y/y to EUR 14.0m, while International Operations grew by 14% to EUR
   16.8m. Smart Industry declined by 20% to EUR 18.7m and Connectivity by 10% to
   EUR 10.2m.
 * Q2 adjusted EBITDA was EUR -0.4m, compared to EUR 4.8m a year ago.
   Profitability declined the most in Smart Industry, followed by Connectivity
   and International Operations, whereas Power managed relatively strong
   absolute EBITDA. Inflation was a major negative affecting the results
   throughout the group, but there were also some project volume issues as well
   as the six-week ICT strike in Finland which had an impact on Connectivity.
   H1’22 adjusted EBITDA also includes EUR 2.4m in investments in offshore wind
   power and a new ERP system.
 * Order backlog amounted to EUR 295.4m at the end of Q2. The order backlog
   contracts partially reflect increased pricing adjusted for inflation, whereas
   new contracts better reflect the cost pressure.
 * Enersense guides EUR 245-265m in revenue and EUR 6-12m in adjusted EBITDA for
   FY ’22. Inflation continues to cast uncertainty over H2’22 results and
   project starts may also be delayed.

Open report


DOVRE - EBIT TO IMPROVE THIS YEAR AND NEXT

04.08.2022 - 09.30 | Company update

Dovre revised its guidance up earlier than we expected. We make some estimate
updates, but we don’t see major news.

Read more

We don’t see any big news behind the guidance revision

Dovre specified its guidance somewhat earlier than we would have expected. The
old guidance suggested revenue above EUR 165m and EBIT of more than EUR 6.1m,
whereas the new guidance is for revenue above EUR 185m and EBIT in the range of
EUR 6.5-7.5m. Our previous estimates were respectively for EUR 200.9m and EUR
8.4m. Dovre sees no negative changes in demand, which we do not consider
especially surprising considering the three segments’ favorable positioning
within energy markets as well as the Norwegian civil and infrastructure sectors.
Our updated FY ‘22 revenue and EBIT estimates stand at EUR 199.1m and EUR 7.4m
respectively.

Renewable Energy is operating in a busy environment

We leave our FY ’22 estimates for Consulting intact ahead of the report. We make
minor downward revisions for Project Personnel; the segment had a very strong Q1
thanks to its favorable positioning within the Norwegian oil & gas sector. We
previously estimated 4.2% EBIT margin for FY ’22, but we revise the estimate
slightly down to 4.0%. We continue to expect similar levels for the coming
years, although we don’t consider 5% EBIT that challenging as a long-term
target. Our downward revisions concern mostly Renewable Energy. We would expect
the specialty construction business to proceed mostly according to plan as Suvic
is set to deliver some EUR 90m in Finnish wind farm projects this year.
Materials challenges, including steel availability and prices, have not come as
a surprise, but there’s still some uncertainty around execution and supplier
networks given the current high demand. We thus revise our EBIT estimate for
Renewable Energy down to EUR 2.8m from EUR 3.6m.

Still more earnings potential over the following years

We estimate Dovre’s FY ’22 EBIT margin at 3.7%, down from our previous estimate
of 4.2%; in our view all three segments have further potential to improve beyond
this year. Earnings growth outlook remains solid as before, while there have
been no major changes in peer multiples. Dovre is valued around 9x EV/EBIT on
our FY ’22 estimates, and SOTP valuation still implies upside. We retain our EUR
0.70 TP and BUY rating.

Open report


SUOMINEN - LOOKING FOR MARGIN IMPROVEMENT

04.08.2022 - 09.10 | Preview

Suominen reports Q2 results on Tue, Aug 9. We continue to expect q/q improvement
over the weak Q1 results.

Read more

Some improvement should already be visible

Suominen’s Q1 figures were very soft, largely as expected although the EUR 3.3m
EBITDA was somewhat below estimates. Q2 profitability is to remain at a modest
level due to the spike in European energy costs, which in the case of Suominen
amounts to mostly electricity. We believe the energy surcharge Suominen
announced in Q1 will help Q2 profitability to improve q/q, however we estimate
EBITDA to have declined more than 50% y/y to EUR 7.0m. We note raw materials
prices surged at double-digit rates in H1’21, and even though there were some
signs of stabilization before the war price levels have continued to advance
over the spring and summer months. Suominen’s nonwovens pricing therefore
continues to catch up with higher raw materials costs at least over this summer.

H2’22 EBITDA should be clearly better than the recent lows

We make only marginal estimate revisions ahead of the report. US demand may
still fluctuate on a quarterly level due to the supply chain issues, but we
expect Americas revenue to be up by 4% this year relative to last, when
especially Q3 figures received a hit. Strong dollar will help top line and we
estimate 6% growth for this year. The estimated EUR 469m revenue would be above
the previous record of EUR 459m seen in FY ’20, however weak H1’22 profitability
means FY ’22 EBITDA will stay far below the previous record. Suominen’s EBITDA
amounted to only EUR 13m in H2’21 and we estimate the figure to have declined
even lower, to EUR 10m, in H1’22. It remains unclear how much the figure will
improve in H2’22 as cost inflation has not abated from the agenda; we estimate
the figure at EUR 23m.

Valuation multiples are low on modest earnings levels

Suominen’s earnings can deviate a lot from those of its peers, but valuation is
by no means challenging considering the low level from which profitability is
likely to bottom out this year. Suominen trades around 4x EV/EBITDA and 6.5x
EV/EBIT on our FY ’23 estimates. The level implies a discount of 50% relative to
peers while we don’t consider our margin estimates for FY ’23 very challenging.
We retain our EUR 3.5 TP and BUY rating.

Open report


DETECTION TECHNOLOGY - OUTLOOK FOR H2 REMAINS STRONG

04.08.2022 - 09.00 | Company update

DT’s Q2 EBIT faced a significant decline due to low sales and increased costs.
The outlook for H2 and 2023 seems bright and we expect the company to see a
clear profitability improvement in 2023.

Read more

SBU and IBU performed well
The strong growth of IBU and SBU wasn’t enough to offset the declined medical
segment and Q2 group revenue decreased by 3.3% y/y. MBU suffered from a
temporary supply chain issue and its topline decreased by 25.2% y/y while driven
by all market segments, IBU and SBU recorded strong double-digit y/y growth of
29.4% and 25.4% respectively. The growth rate could have been higher as some
sales were postponed due to the above-mentioned reasons as well as DT’s and its
customers’ challenges to acquire components. With lower volumes, spot-component
purchases, and increased logistic and R&D costs, DT’s margins tightened, and
EBIT fell below the comparison period to EUR 1.2m (5.2% margin).

Demand is expected to further pick up
DT reiterated its guidance for H2, expecting double-digit growth both in Q3 and
H2. Furthermore, the company clarified BU level outlook for Q3; expecting MBU
and SBU to see double-digit growth while IBU is expected to grow. We foresee
some uncertainty in the industrial markets with the global industrial activity
decreasing. Meanwhile, we see IBU positioned well in its markets and expect the
business to deliver growth even during uncertain times. Furthermore, the
company’s management noted that the demand in all segments is picking up.

HOLD with a TP of EUR 20.0
We made only minor changes to our near-term net sales estimates while with soft
Q2 profitability and increased cost pressures, our 22E EBIT estimate declined
significantly. However, with net sales increasing and component availability
improving, we expect 23E EBIT to improve significantly. In our view, with a 23E
EV/EBIT multiple of 14x, the company’s valuation is quite neutral. The market
environment however includes some uncertainty given signs of the global economy
slowing down. We retain our HOLD-rating and TP of EUR 20.0.

Open report


CAPMAN - GOOD PERFORMANCE ACROSS THE BOARD

04.08.2022 - 08.30 | Earnings Flash

CapMan's net sales in Q2 amounted to EUR 17.7m, slightly above our estimates and
in line with consensus (EUR 16.5m/17.8m Evli/cons.). EBIT amounted to EUR 14.1m,
above our and consensus estimates (EUR 11.5m/11.9m Evli/cons.).

Read more

 * Revenue in Q2 was EUR 17.7m (EUR 11.9m in Q2/21), slightly above our
   estimates and in line with consensus estimates (EUR 16.5m/17.8m Evli/Cons.).
   Growth in Q2 amounted to 49% y/y.
 * Operating profit in Q2 amounted to EUR 14.1m (EUR 11.3m in Q2/21), above our
   estimates and consensus estimates (EUR 11.5m/11.9m Evli/cons.), at a margin
   of 79.8%. Compared with our estimates the difference was primarily due to
   higher than estimated fair value changes (EUR 6.0m/9.6m Evli/act.).
 * EPS in Q2 amounted to EUR 0.07 (EUR 0.06 in Q2/21), above our estimates and
   consensus estimates (EUR 0.06/0.05 Evli/cons.).
 * Revenue in Management Company business in Q2 was EUR 14.5m vs. EUR 14.2m
   Evli. Operating profit in Q2 amounted to EUR 6.1m vs. EUR 6.1m Evli. 
 * Revenue in Investment business in Q2 was EUR 0.0m vs. EUR 0.0m Evli.
   Operating profit in Q2 amounted to EUR 9.6m vs. EUR 5.8m Evli. 
 * Revenue in Services business in Q2 was EUR 3.2m vs. EUR 2.3m Evli. Operating
   profit in Q2 amounted to EUR 1.7m vs. EUR 1.0m Evli. 
 * Capital under management by the end of Q2 was EUR 4.8bn (Q2/21: EUR 4.3bn).
   Real estate funds: EUR 3.2bn, private equity & credit funds: EUR 1.1bn, infra
   funds: EUR 0.5bn, and other funds: EUR 0.1bn.

Open report


DETECTION TECHNOLOGY - TEMPORARY SETBACK, DEMAND PICKING UP

03.08.2022 - 09.50 | Earnings Flash

Detection Technology’s Q2 net sales came down less than we expected. Net sales
decreased by 3.3% due to soft sales development in medical markets while SBU and
IBU saw strong double-digit growth during Q2.

Read more

 * Group results: Q2 net sales topped our estimates and decreased by 3.3% y/y to
   EUR 22.8m (22.4/22.5m Evli/cons.). Demand would have allowed for a higher
   growth rate in sales, but component shortages and temporary setbacks in
   supply chain postponed sales to Q3. The postponed sales, spot purchases, and
   increasing logistics and product development costs eroded DT's profitability.
   Adj. EBIT amounted to EUR 1.2m (1.8/1.8m Evli/cons.), implying an EBIT margin
   of 5.2%. Q2 EPS amounted to EUR 0.05 (0.09/0.10 Evli/cons.).
 * Medical (MBU): In line with DT’s guidance, MBU’s net sales saw a significant
   y/y decrease of 25.2%, amounting to EUR 10.1m (Evli: 10.6m). Soft development
   was attributed to the one-off technical problems at two sub-suppliers and
   challenges of both the company and its customers to acquire critical
   components.
 * Security (SBU): SBU sales came in strong, by showing y/y growth of 25.4%. Net
   sales amounted to EUR 8.6m (Evli: 8.1m). DT’s customer base widened, and net
   sales growth was driven by all market segments, also aviation which took a
   huge hit from the pandemic.
 * Industrial (IBU): IBU continued its solid sales development by growing by
   29.4% y/y with net sales amounting to EUR 4m (Evli: 3.7m). The growth was
   driven by all main market segments, especially the food industry.
 * Outlook: DT expects to see double-digit growth in Q2 and H2. In Q3, the
   company expects MBU and SBU to grow with double-digit figures while IBU is
   expected to grow. Demand for imaging solutions is expected to pick up in all
   BUs.

Open report


DETECTION TECHNOLOGY - A QUIET QUARTER AHEAD

28.07.2022 - 09.45 | Preview

DT releases its Q2 result on Wednesday, 3rd of Aug. With supply chain issues
prolonging DT’s lead times and delaying customer demand, we expect Q2 net sales
to decrease y/y and thus EBIT to experience a significant decline.

Read more

Net sales and EBIT to decline in Q2
In June, DT downgraded its outlook for Q2’22 with a product quality issue in its
supply chain and the challenges for the company and its customers to purchase
other critical components. With the company now expecting Q2 net sales to
decline y/y, our net sales estimate amounts to EUR 22.4m (22.5m cons.),
representing a y/y decline of 4.8%. We expect SBU and IBU to see nice
double-digit growth with SBU benefiting from the recovery of aviation solutions,
but MBU to decline by 22%, driven by the above-mentioned factors. With a
substantial decline in topline, we also expect EBIT to be below that of the
comparison period and amount to EUR 1.8m (8.1% margin). The consensus estimate
for EBIT is 1.8m.

Demand still on a good level, supply chain issues to ease
The outlook for H2 is brighter with the supply chain issues easing. Some medical
OEMs have indicated that component supply would improve in H2’22, which is in
line with DT’s outlook, providing group-level growth. DT has also mitigated its
exposure to component shortage and has modified its products so that the need
for most poorly available components will be reduced during H2. With that, we
expect the company to see strong 20% y/y growth in H2 driven by all BUs.

Valuation neutral ahead of Q2, but risks are elevated
DT trades with 22-23E EV/EBIT multiples of 18-13x. We find the current valuation
quite neutral as with our estimates the company’s valuation is roughly in line
with its peer group (based on 22-23E EV/EBIT). However, the market environment
contains multiple risks, such as the war in Ukraine, high inflation rates,
interest rate hikes, and slowing economic growth and industrial activity which
might affect DT’s short-term performance. With our estimates intact, we retain
our HOLD-rating and TP of EUR 20.0 ahead of Q2 result.

Open report


ELTEL - EARNINGS GAP FOR THIS YEAR

27.07.2022 - 09.35 | Company update

We see Eltel’s earnings are to decline this year as H1 cost challenges will
continue to burden H2 results as well.

Read more

Nordics are coping with inflation, but H2 will still be soft

The EUR 208.6m Q2 revenue was soft vs the EUR 216.5m/215.2m Evli/cons.
estimates. Finnish ICT strike hit top line in addition to a late spring, while
Denmark suffered from low volumes as Eltel expected but more than we estimated.
The other units’ top lines were above our estimates, but inflation was a lot
bigger burden than we estimated: EBIT fell to EUR 0.4m vs the EUR 3.6m/3.2m
Evli/cons. estimates. Finland performed better than we estimated despite
inflation, which affected through its large Power business. Sweden improved the
most in Q2, but the results beyond Finland and Sweden were clearly below our
estimates. Inflation cover within frame agreements isn’t a major issue in
Finland, Sweden and Denmark, whereas in Norway higher costs are yet to be
addressed to a similar extent. Fuel and materials had ca. EUR 4m H1 impact and
the level should be similar in H2.

We expect key markets to drive growth again next year

The inflation challenge is not that bad in the Nordics but remains a major issue
in Poland, where it’s unclear how long beneficial outcomes might take to
materialize. The possible divestiture of Poland has been on the agenda since
last autumn, and a decision could be reached by the end of this year. Eltel’s
long-term improvement path can still be seen as Finland and Sweden appear to
continue firm on their own tracks. Meanwhile further progress should be expected
from Norway and Denmark since both have recently signed large Communication
agreements. We estimate Eltel to return to earnings growth again next year,
however the weak H1 as well as the continued cost pressure over H2 imply FY ’22
will be a gap year in profitability terms.

Valuation appears fair in the light of margin potential

We shave our H2’22 EBITA estimates by EUR 5.3m, whereas our updated estimate for
FY ’23 amounts to EUR 17.3m (prev. EUR 26.3m). Eltel is valued 5x EV/EBITDA and
14x EV/EBIT on our FY ’23 estimates, the former implying a discount to peers
while the latter is a premium. We don’t consider valuation too challenging in
the light of Eltel’s margin upside potential, however there’s still way to go
before Eltel will be near its peers’ profitability. Our TP is now SEK 9 (10); we
retain our HOLD rating.

Open report


ELTEL - Q2 FIGURES FELL BELOW ESTIMATES

26.07.2022 - 09.30 | Earnings Flash

Eltel’s Q2 top line was soft relative to estimates and profitability fell
clearly below expectations as inflation hit results more than was expected.

Read more

 * Eltel Q2 revenue decreased by 0.8% y/y to EUR 208.6m, compared to the EUR
   216.5m/215.2m Evli/consensus estimates. Denmark’s top line was particularly
   soft, while Sweden and Norway advanced.
 * EBIT was EUR 0.4m vs the EUR 3.6m/3.2m Evli/consensus estimates. Operative
   EBITA amounted to EUR 0.5m, compared to our EUR 3.7m estimate. Inflation was
   the main culprit for the weak numbers, however elevated sick-leave rates due
   to the pandemic as well as the late arrival of spring also contributed. Eltel
   has secured agreements with most of its customers to recover parts of the
   cost increases, but the company will not be able to recover the costs in
   full.
 * Finnish profitability remained a bright spot in Q2 despite a six-week strike
   among ICT personnel. Swedish results continued to improve, while Norway and
   Denmark faced setbacks, the latter especially so.
 * Eltel removed guidance in connection with the Q1 report.

Open report


RAUTE - IMPROVING WITH WESTERN ORDERS

25.07.2022 - 09.30 | Company update

Raute has now largely cleaned its Russian exposure and Western orders are
materializing at a good pace, however H2’22 profitability will still be far from
satisfactory.

Read more

New Western orders will henceforth help profitability

Q2 top line fell 16.5% y/y to EUR 29.6m vs our EUR 38.0m estimate. The shortfall
was due to projects, in particular Russian orders, whereas services figured
above our estimate. The war led Raute to temporarily pause operations and assess
the Russian order book, while the Chinese lockdowns induced production
transfers. One-off issues led to EUR 11m in items, but cost inflation also
affected the results more than we had estimated and thus Q2 EBIT was EUR -15.1m
vs our EUR -10.7m estimate. Bottom line will now improve but we expect at least
Q3 EBIT to stay negative due to inflation. Meanwhile services profitability is
not suffering that much, in addition to which Q2 order intake amounted to EUR
40m vs our EUR 30m estimate. Demand has held up and there were again no large
orders.

We would expect positive EBIT early next year at the latest

Order intake in Europe and Asia, excl. China where the situation is yet to
normalize, drove the figure above our estimate. North American orders were soft
relative to our estimate after high Q1, but demand there is strong. There’s more
uncertainty around European demand, but the Baltics and Eastern European
countries are bright spots. The overall outlook and the EUR 104m order book is
not bad considering it has now been mostly cleaned of Russia while Raute has
been able to book EUR 40m in new quarterly orders even without any large ones.
Smaller order demand related to modernization and automation remains high on
customers’ agenda. Raute’s outlook for the coming years could improve with
larger orders, however EBIT will stay at a modest level for several quarters to
come. Investments in R&D remain high, while Raute has a program to improve
profitability.

High uncertainty but long-term multiples are undemanding

We make minor revisions and still expect positive EBIT for FY ’23, although it
looks set to be a modest one. Raute trades 9x EV/EBIT on our FY ’23 estimates;
next year’s EBIT is likely to stay far below potential, and valuation isn’t
challenging in the long-term context. There’s however still much uncertainty and
hence we view valuation fair. We retain our EUR 11 TP and HOLD rating.

Open report


CONSTI - ON TRACK TOWARDS Y/Y IMPROVEMENT

25.07.2022 - 09.15 | Company update

Consti reported Q2 results that corresponded quite well with expectations.
Prevailing market conditions still create some uncertainties for the end of the
year but overall, the outlook is still quite positive. We retain our target
price of EUR 12.0 per share and BUY-rating.

Read more

Q2 results quite as expected
Consti reported Q2 results which overall corresponded well with expectations.
The prolonged winter had a small impact on net sales growth, with growth
nonetheless at 3.1% y/y to EUR 73.1m (EUR 74.6m/74.7m Evli/Cons.). The operating
profit amounted to EUR 2.9m (EUR 3.0m/2.9m Evli/cons.), at a margin of 4.0%. The
increase in construction materials prices had a greater impact than in the
comparison period in certain on-going projects and inflation increased indirect
costs. The order backlog was at a quite good level of EUR 240.8m, up 1.9% y/y,
with a Q2 order intake of EUR 98.7m (98.5m). The 2022 operating profit guidance
of EUR 9-13m was kept intact.

Near-term uncertainty still present
We have made only smaller adjustment to our estimates, till expecting relative
growth to pick up slightly during the end of the year for an overall modest
full-year growth. Our 2022e operating profit estimate is slightly below the
guidance mid-point, at EUR 10.4m. The near-term demand situation remains
affected by current uncertainties, especially within corporate customers. The
situation with construction material prices and availability still has an
impact, although smaller within renovation projects. Some indications of price
peaks have been seen, but the uncertainty should still most likely be present at
least throughout the year.

BUY with a target price of EUR 12.0
Despite the prevailing market situation and uncertainties Consti has in our view
performed well and we remain rather optimistic also for the coming quarters.
Long-term drivers still remain. Compared with peers the current valuation
remains quite cheap. We keep our target price of EUR 12.0 intact, rating still
BUY.

Open report


VAISALA - PROFITABILITY UNDER SHORT-TERM PRESSURE

25.07.2022 - 09.10 | Company update

Despite robust growth shown in Q2, Vaisala’s EBIT was a bit softer driven by
increased cost pressures. We expect the demand for Vaisala’s products to
continue strong while we foresee some short-term pressures on margins. We retain
our HOLD-rating and adjust TP to EUR 43.0 (45.0).

Read more

IM driving group topline growth, EBIT bit softish
Vaisala’s net sales grew nicely, by 10% to EUR 120.5m. The growth was mainly
driven by the IM business unit (+24% y/y) while W&E’s revenue was approx. flat
y/y. Vaisala managed to hold on to its margins and the group gross margin was on
a solid level at 52.3%. The company continued its investments in its future
growth and operative costs increased according to its plans. To our
understanding, part of increased costs is short-term that will scale eventually
after the IT-system update has been complete. EBIT decreased by 5% y/y, and fell
short of our expectations, to EUR 10.3m (8.6% margin).

Guidance reiterated, some uncertainty ahead
Vaisala reiterated its FY’22 guidance; net sales between EUR 465-495 and EBIT
between EUR 55-70m. With IM’s market demand continuing strong and W&E’s order
book being all-time-high, we consider the company achieving its guidance easily.
However, with the COVID-19 situation in Asia continuing, the war in Ukraine not
ending, and the low visibility of component availability, H2 includes some
uncertainties that might affect the company’s performance. We slightly adjusted
our estimates; 2022 net sales estimate of EUR 491.1m nears the upper bound of
the guidance range while with cost pressures being elevated, our EBIT estimate
of EUR 58.2 is below the mid-point of the guidance range.

HOLD with a target price of EUR 43.0 (45.0)
We made only minor upward adjustments to our topline estimates while we adjusted
our short-term EBIT estimates downwards driven by increased costs pressures
stemming mainly from the company’s increased investments in its future growth.
Vaisala continues to trade above its peer group, with approx. 40% premium. We
adjust our TP to EUR 43.0 (45.0) and retain HOLD-rating.

Open report


SRV - HEADWINDS REMAIN, FINANCIALLY STABLE

22.07.2022 - 11.15 | Company update

SRV reported surprisingly good Q2 profitability, but headwinds still remain.
With the recently completed transactions the company is now financially in good
shape.

Read more

Q2 profitability exceptionally good
SRV reported good Q2 results in term of P&L figures. Revenue was on par with
comparison period figures at EUR 211.4m (EUR 191.7m/219.0m Evli/cons.), while
profitability was above expectations, with an operating profit of EUR 10.1m (EUR
4.1m/5.5m Evli/cons.). The relative profitability was exceptionally good and not
expected to be as high during H2. The order backlog development remained
unfavourable, at EUR 745.9m at the end of Q2. H1 contained new agreements of EUR
202.4m. SRV specified its guidance, now expecting revenue of EUR 800-860m (prev.
800-950m) and an operative operating profit of EUR 15-25m (prev, >5.3m), which
compared with our pre-Q2 estimates is slightly on the weaker side but
understandable given the current market situation.

Current uncertainty threatening growth outlook
We have lowered our 2022 revenue estimate by 5% while our operative operating
profit estimate is essentially intact nearer the upper end of the new guidance.
We have lowered our estimates somewhat for 2023. Although SRV currently has EUR
1.3bn in won projects that are not yet entered into the order backlog, with the
current uncertainty, order backlog development and lack of developer contracting
housing unit start-ups we currently see limited signs of growth. Cost pressure
is also still clearly present, but at least in some areas peak increases appear
to be behind and the sector in general appears to have coped quite well with the
pressure so far. With the completed financing arrangements SRV is now virtually
net debt-free (excl. IFRS 16), thus clearly improving the risk profile.

HOLD with a TP of EUR 5.0 (prev. 0.18 pre-reverse split)
Following revisions to our estimates and with the reverse split completed in
July we adjust our target price to EUR 5.0 (prev. 0.18) and retain our
HOLD-rating. Our target price values SRV at around 6x EV/EBIT.

Open report


VAISALA - STRONG DEMAND, EBIT BELOW EXPECTATIONS

22.07.2022 - 09.45 | Earnings Flash

Vaisala’s Q2 EBIT fell short of our and consensus expectations. Q2 received
orders came in with y/y growth of 10% and the order book was on a record-high
level. Group revenue grew by 10% y/y.

Read more

 * Group result: Q2 orders received grew nicely to EUR 131.9m (+10% y/y) and the
   order book amounted to EUR 182.9m (+11% y/y). Net sales grew by 10% y/y to
   EUR 120.5m, being slightly above our expectations (EUR 118.1m/118.1m
   Evli/cons.). With smart pricing decisions and a favorable sales mix, the
   gross margin was flat y/y despite continued spot component purchases. Fixed
   costs increased by 19% and EBIT came in below our expectations at EUR 10.3m
   (EUR 12.5m/14.6m Evli/cons.), reflecting an EBIT margin of 8.6%. EPS amounted
   to EUR 0.18 (EUR 0.26/0.32 Evli/cons.).
 * Industrial measurements (IM): Driven by industrial instruments, life science,
   and power, IM’s orders saw a strong y/y increase, amounting to EUR 56.2m.
   Order book was 43% higher than a year ago, amounting to EUR 37.2m. Driven by
   industrial instruments, life science, and power, net sales amounted to EUR
   54.7m (Evli: EUR 49.8m), reflecting y/y growth of 24%. EBIT improved y/y and
   amounted to EUR 11.5 (Evli: EUR 10.8m), reflecting an EBIT margin of 21%.
 * Weather & Environment (W&E): W&E’s quarter was solid with its orders received
   amounting to EUR 75.7m and order book accounting to 145.6m, reflecting y/y
   growth of 4%. Net sales increased by 1% (constant currencies -3%) y/y to EUR
   65.9m (Evli: EUR 68.3m). Growth was good in aviation while road weather and
   renewable energy were flat. With a softer gross margin and increased fixed
   costs, W&E’s EBIT fell below zero to EUR -1.1m (Evli: EUR 2.2m), implying an
   EBIT margin of -1.6%.
 * 2022 guidance intact: expecting net sales between EUR 465-495m and EBIT
   between EUR 55-70m.
 * Market outlook: IM’s markets are expected to continue their growth while
   W&E’s markets are estimated to be rather stable (renewable energy is expected
   to grow).

Open report


RAUTE - REVENUE AND EBIT LOW, ORDERS HIGH

22.07.2022 - 09.30 | Earnings Flash

Raute’s Q2 revenue and EBIT were clearly worse than we expected, however order
intake was well above our estimate. It is always unclear how well single quarter
order intake extrapolates, but if new orders remain near the EUR 40m level seen
in Q2 Raute will be able to fill the gap left by Russian business relatively
quickly.

Read more

 * Q2 revenue declined by 16.5% y/y and amounted to EUR 29.6m vs our EUR 38.0m
   estimate. Project revenue was EUR 12.7m, compared to our EUR 23.0m estimate,
   while services revenue was EUR 16.9m vs our EUR 15.0m estimate.
 * EBIT was EUR -15.1m vs our EUR -10.7m estimate. The result was burdened not
   only by the write-offs related to Russian projects but inefficiencies due to
   the reorganization of work. Cost inflation remained a significant
   profitability headwind.
 * Order intake came in at EUR 40m, compared to our EUR 30m estimate. Project
   orders were EUR 21m vs our EUR 15m estimate, while services orders amounted
   to EUR 19m vs our EUR 15m estimate. There were no single large orders,
   however modernization orders were at a high level and included a significant
   EUR 10m Latvian order.
 * Order book was EUR 104m at the end of Q2, including EUR 16m in Russian
   orders.

Open report


CONSTI - WELL IN LINE WITH EXPECTATIONS

22.07.2022 - 09.00 | Earnings Flash

Consti's net sales in Q2 amounted to EUR 73.1m, in line with our and consensus
estimates (EUR 74.6m/74.7m Evli/cons.), with growth of 3.1% y/y. EBIT amounted
to EUR 2.9m, in line with our and consensus estimates (EUR 3.0m/2.9m
Evli/cons.). Guidance reiterated: operating result in 2022 is expected to be EUR
9-13m.

Read more

 * Net sales in Q2 were EUR 73.1m (EUR 70.9m in Q2/21), in line with our and
   consensus estimates (EUR 74.6m/74.7m Evli/Cons.). Sales grew 3.1% y/y.
 * Adj. operating profit in Q2 amounted to EUR 2.9m (EUR 2.9m in Q2/21), in line
   with our and consensus estimates (EUR 3.0m/2.9m Evli/cons.), at a margin of
   4.0%. 
 * The increase in construction materials prices had a greater impact than in
   the comparison period in certain on-going projects and inflation increased
   indirect costs. COVID also had an impact primarily through increased sick
   leaves.
 * EPS in Q2 amounted to EUR 0.28 (EUR -0.09 in Q2/21), in line with our and
   consensus estimates (EUR -0.28/0.27 Evli/cons.).
 * The order backlog in Q2 was EUR 240.8m (EUR 236.2m in Q2/21), up by 1.9% y/y.
   Order intake was EUR 98.7m in Q2 (Q2/21: EUR 98.5m).
 * Free cash flow amounted to EUR 2.6m (Q2/21: EUR -1.4m).
 * Guidance for 2022 (reiterated): Operating profit is expected to be between
   EUR 9-13m.  

Open report


INNOFACTOR - NEED TO START DELIVERING

22.07.2022 - 08.05 | Company update

Innofactor’s Q2 results were weaker than anticipated to a weakened billing rate
and individual project delivery challenges. Improvement is needed during H2 to
achieve the FY ‘22 guidance. Near-term operational capabilities are still of
some concern, but the potential is still quite solid. We adjust our TP to EUR
1.25 (1.6), BUY-rating intact.

Read more

Top-line and bottom-line figures short of our estimates
Innofactor’s Q2 results fell short of our expectations. A weakened billing rate
and challenges relating to individual project deliveries resulted in a slight
y/y decline in revenue to EUR 16.9m (Evli EUR 17.7m). As a result, the operating
profit also fell to EUR 0.7m (Evli EUR 1.4m) for a rather meager operating
profit margin of 3.9%. The order backlog remained at a good level of EUR 77.2m,
up 6.1% y/y. During the quarter, Innofactor acquired Invenco Ltd, a company
specializing in data and analytics, with some 50 employees and EUR 6m in annual
revenue.

Improvement needed during H2
Following the weaker first half of the year, on our revised estimates, we expect
Innofactor to be able to beat its guidance with a slim margin essentially thanks
to the acquisition of Invenco. EBITDA-margins should return to ~12% during H2, a
level that under current circumstances could be seen as a normal level for
Innofactor. Despite the implied one-off nature of the project delivery
challenges we are slightly concerned for the operational delivery capabilities
and the revenue trend in relation to the order backlog growth. Still, the
potential is still quite solid and with the acquisition of Invenco and a normal
profitability EPS would on our estimates grow 30% y/y in 2023.

BUY with a target price of EUR 1.25 (1.60)
With our revised estimates and continued operational uncertainty, as well as
declines in peer multiples, we adjust our target to EUR 1.25 (EUR 1.60). Our TP
values Innofactor at a slight discount to peers. Upside potential is provided by
the profitability improvement potential. We retain our BUY-rating.

Open report


EXEL COMPOSITES - CONTINUED PROGRESS

21.07.2022 - 09.35 | Company update

Exel’s Q2 results topped estimates and confirmed the company is advancing again
after the recent profitability issues in the US.

Read more

Absolute profitability topped the previous record

Exel’s top line grew 13.5% y/y to EUR 38.1m vs the EUR 36.8m/35.7m Evli/cons.
estimates. Wind power customers developed soft relative to our estimate due to
China and the local policies, but the shortfall was more than made up by
Transportation where revenue grew by EUR 4.4m y/y to EUR 7.2m thanks to released
pent up demand after the pandemic. The orders were attributable to old
applications like train panels as well as a new aerospace application in North
America, on the details of which Exel will elaborate later this year. Exel can
already produce the application profitably even though it is only in the initial
phases of its lifecycle. Q2 adj. EBIT reached EUR 3.1m, compared to the EUR
2.4m/2.2m Evli/cons. estimates. The 8.2% adj. EBIT margin was not bad, but Exel
is still able to do better than that in the long-term assuming growth continues
and the US unit keeps improving.

Progress is set to continue

The US unit has already improved a lot in recent quarters yet still has EBIT
upside potential. This is also reflected by the EUR 37.0m order intake, which
developed flat q/q but declined by 15% y/y as there were certain US Wind power
orders last year which were later cancelled due to production challenges. The Q2
report confirmed Exel’s continued progress on its long-term track especially in
that the company can find suitable high-volume customers and is not overly
reliant on any one industry or application. The inflationary environment is not
a major challenge given Exel’s niche position in the value chain. Exel left its
guidance unchanged for now due to the well-known global uncertainties, however
an upgrade seems likely in the months ahead.

Valuation is unchallenging as potential materializes

We make only very marginal updates to our estimates. We expect 10% growth for
this year while we estimate a 7.4% adj. EBIT margin. The EUR 11m adj. EBIT
translates to a valuation multiple of 10x, which would continue to decrease to
8x EV/EBIT on our FY ’23 estimates. We retain our EUR 8.5 TP and BUY rating.

Open report


INNOFACTOR - SUBPAR PERFORMANCE 

21.07.2022 - 09.30 | Earnings Flash

Innofactor’s Q2 results were weaker than expected. Net sales declined 2% y/y to
EUR 16.9m (Evli EUR 17.7m) due to a weakened invoicing ratio and individual
project delivery challenges. Q2 EBIT of EUR 0.7m was also clearly weaker than in
the comparison period and our estimates (Evli EUR 1.4m).

Read more

 * Net sales in Q2 amounted to EUR 16.9m (EUR 17.5m in Q2/21), slightly below
   our estimates (Evli EUR 17.7m). Net sales in Q2 declined 2.0% y/y. Net sales
   increased in Norway and Denmark but decreased in Finland and Sweden due to a
   weakened invoicing ratio and challenges in individual project deliveries.
 * EBITDA in Q2 was EUR 1.4m (EUR 2.1m in Q2/21, below our estimates (Evli EUR
   2.1m), at a margin of 8.1%. EBITDA was positive in all operating countries
   except in Sweden.
 * Operating profit in Q2 amounted to EUR 0.7m (EUR 1.3m in Q1/21, below our
   estimates (Evli EUR 1.4m), at a margin of 3.9%. 
 * Order backlog at EUR 77.2m, up 6.1% y/y. According to Innofactor the sales
   performance was strong in Q2. New orders included for instance Senate
   properties (approx. EUR 2.2m), Danish pharmaceuticals company (approx. EUR
   2.1m) and the State Treasury of Finland (approx. EUR 5.5m).
 * In June, Innofactor acquired Invenco Ltd, a company specializing in data and
   analytics, with some 50 employees and EUR 6m revenue.
 * Guidance for 2022 (reiterated): Innofactor’s net sales is expected to
   increase from 2021 (EUR 66.4m) and EBITDA is expected to increase from EUR
   7.5m, which would have been EBITDA without the proceeds of EUR 2.6m from the
   sale of the Prime business. 

Open report


SRV - SOLID PROFITABILITY IN Q2

21.07.2022 - 09.00 | Earnings Flash

SRV's net sales in Q2 amounted to EUR 211.4m, above our estimates and in line
with consensus (EUR 191.7m/219.0m Evli/cons.). EBIT amounted to EUR 10.1m, above
our estimates and above consensus estimates (EUR 4.1m/5.5m Evli/cons.). SRV now
expects a revenue of EUR 800-860m (800-950m) and an operative operating profit
of EUR 15-25m (>5.3m) in 2022.

Read more

 * Revenue in Q2 was EUR 211.4m (EUR 218.0m in Q2/21), above our estimates and
   slightly below consensus estimates (EUR 191.7m/219.0m Evli/Cons.). Growth in
   Q2 amounted to -3% y/y.
 * Operating profit in Q2 amounted to EUR 10.1m (EUR 6.3m in Q2/21), above our
   estimates and consensus estimates (EUR 4.1m/5.5m Evli/cons.), at a margin of
   4.8%. Profitability in Q2 was supported by a higher profitability of the
   recognized income and a lower relative profitability is seen for the rest of
   the year. 
 * Revenue in Construction in Q2 was EUR 206.8m vs. EUR 191.7m Evli. Operating
   profit in Q2 amounted to EUR 9.9m vs. EUR 6.1m Evli. 
 * Revenue in Investments in Q2 was EUR 4.8m vs. EUR 1.1m Evli. Operating profit
   in Q2 amounted to EUR 1.4m vs. EUR -1.0m Evli. 
 * Revenue in Other operations and elim. in Q2 was EUR -0.2m vs. EUR -1.1m Evli.
   Operating profit in Q2 amounted to EUR -1.2m vs. EUR -1.0m Evli. 
 * Guidance for 2022 (specified): Revenue is estimated to be EUR 800-860m (prev.
   800-950m) and the operative operating profit is estimated to be EUR 15-25m
   (prev. improve compared with 2021, when the operative operating profit
   amounted to EUR 5.3m). 

Open report


EXEL COMPOSITES - CLEARLY ABOVE ESTIMATES

20.07.2022 - 10.30 | Earnings Flash

Exel’s Q2 report didn’t disappoint as both revenue and profitability clearly
topped estimates. Growth was driven by a new aerospace application within the
Transportation customer industry. Exel leaves guidance unchanged, which now
appears cautious, but the company seems set to advance on its improving track.

Read more

 * Exel Q2 revenue grew by 13.5% y/y to EUR 38.1m, compared to the EUR
   36.8m/35.7m Evli/consensus estimates. Growth in North America was an
   important contribution, which stemmed from a new aerospace application in the
   Transportation customer industry.
 * Wind power landed at EUR 6.5m vs our EUR 8.7m estimate, while Buildings and
   infrastructure was EUR 8.9m vs our EUR 9.2m estimate. Equipment and other
   industries amounted to EUR 5.9m, compared to our EUR 6.1m estimate.
 * Adjusted EBIT was EUR 3.1m vs the EUR 2.4m/2.2m Evli/consensus estimates.
   Adjusted EBIT margin was therefore a very decent 8.2%. The US unit’s
   performance continued to improve. Exel has been able to adjust its sales
   prices to reflect higher raw materials, logistics and energy prices.
 * Order intake amounted to EUR 37.0m in Q2, down by 14.9% y/y but flat q/q as
   there were large Wind power last year which were later cancelled.
 * Exel guides revenue in 2022 to be at last year’s level while adjusted
   operating profit will increase compared to 2021 (unchanged).

Open report


FINNAIR - EBIT OUTLOOK REMAINS CLOUDY

20.07.2022 - 09.15 | Company update

Finnair continues to address its challenges, and EBIT will improve, but a lot of
uncertainty lingers around outlook while valuation multiples remain high
relative to peers.

Read more

We make downward revisions to our estimates

Finnair’s EUR 550m Q2 revenue matched the EUR 549m/542m Evli/cons. estimates.
Top line continued to rebound with higher passenger loads while cargo revenue
was down q/q. Wet leases amounted to 6% of ASK and the figure continues to
increase to above 10% as strong demand will extend over the winter and probably
even up to next summer. The EUR -84.2m adj. EBIT missed the EUR -41.3m/-56.5m
Evli/cons. estimates as jet fuel prices spiked during Q2. Ticket prices are to
catch up with the resulting higher unit costs, but the big gap may not close for
a while; yields picked up in June as demand matched capacity sufficiently to
help revenue management efforts, but the pricing environment is to remain
somewhat volatile. Finnair’s guidance for H2’22 implies further top line
recovery, but we make some downward revisions to our ASK estimates. We expect Q3
EBIT to remain negative (EUR -9m vs our previous estimate of EUR 18m).

Roughly 10-15% of ASK could still be rerouted or sold

The EUR 60m in cuts should come in as planned and the new strategy, to be ready
during the autumn, is to deliver more savings. Partnerships play an important
role in the network strategy and the weight of previously marginal destinations,
such as the US and India, will increase. Yet the new strategy also likely
implies some aircraft sales. Leases can be included in the strategy, but we
believe they are unlikely to amount to more than 10% of ASK. Hence some 10-15%
of ASK needs to find new routes or be sold. Finnair has a strong record when it
comes to flight and crew performance, and we expect the strategy will be able to
secure profitability. FY ’23 is likely to see a meaningful positive EBIT, but
there remains much uncertainty around the level. We now estimate the figure at
EUR 77m (prev. EUR 116m).

Valuation appears tight relative to peer multiples

The competitive landscape remains stable; we see valuation tight against this
backdrop when Finnair’s outlook is still subject to elevated uncertainty.
Finnair trades around 26x and 12x EV/EBIT on our FY ’23-24 estimates; we find
the levels high relative to peers. Our new TP is EUR 0.36 (0.43); our rating is
SELL (HOLD).

Open report


VAISALA - SOLID QUARTER INCOMING

19.07.2022 - 09.45 | Preview

Vaisala reports its Q2’22 result on Friday, 22nd of July. With its record high
order book and solid outlook, we expect Vaisala to continue its robust revenue
growth in Q2.

Read more

Expecting solid growth to continue
Vaisala’s Q1’22 included some positive seasonality and revenue was on a great
level although Q1 has been historically the quietest quarter. We expect Q2’22 to
contain less seasonality and revenue amount to EUR 118.1m, reflecting y/y growth
of 7.9%. Revenue growth is driven by solid order book of W&E and strong sales
development of IM as well as Vaisala’s delivery reliability during uncertain
times. Our IM’s Q2 revenue estimate amounts to EUR 49.8m (+12.9% y/y) while
W&E’s revenue estimate lands at EUR 68.3m (+4.4% y/y). So far, the company has
been able to deliver all its orders without delays despite issues in its supply
chain. We remain to wait for the news of the company’s order book development
and management’s comments on the market environment as there have been some
signs of slowdowns in the global industrial activity.


Some supply chain disruptions might affect margins
With the lack of crucial components, the company has sourced components from
spot markets which have increased material costs during recent quarters. So far,
robust topline growth and sales mix have offset the spot component impact on
profitability and Q1 EBIT was surprisingly high. However, the company’s
management pointed out that it’s increasingly difficult to purchase spot
components. With the revenue growth, we expect Q2 EBIT to also improve y/y to
EUR 12.5m but the weaker gross margin to restrict the EBIT margin development to
10.6%. We foresee some increases in the OPEX development y/y. The uncertainty
lies in the gross margin development that in turn is associated with the level
of spot component purchases and sales mix, and therefore our EBIT estimate
include some uncertainty.


Estimates intact, valuation elevated ahead of Q2
We have made no changes to our estimates ahead of Q2. Like before, the company’s
valuation remains quite elevated which is in our view justified, given Vaisala’s
technology leadership and delivery reliability, but not providing a reason for a
rating upgrade. We retain our HOLD-rating and TP of EUR 45.0.

Open report


FINNAIR - REVENUE IN LINE, EBIT MISSED

19.07.2022 - 09.30 | Earnings Flash

Finnair’s Q2 top line was as expected, but EBIT came in below estimates as costs
were high especially because of fuel. We also find Finnair’s guidance leaves
some downward pressure on H2’22 estimates. Finnair is preparing a new strategy
and looks to complete the work on it this autumn.

Read more

 * Finnair Q2 revenue amounted to EUR 550.3m vs the EUR 548.7m/541.9m
   Evli/consensus estimates.
 * Adjusted EBIT landed at EUR -84.2m, compared to the EUR -41.3m/-56.5m
   Evli/consensus estimates.
 * Fuel costs were EUR 229m vs our EUR 175m estimate. Staff costs were EUR 114m,
   compared to our EUR 108m estimate. All other OPEX+D&A amounted to EUR 329m,
   compared to our EUR 355m estimate.
 * Cost per Available Seat Kilometer was 8.09 eurocents vs our estimate of 7.52
   eurocents.
 * Finnair expects to operate an average Q3’22 capacity of some 70%, in terms of
   ASK, relative to the corresponding period in 2019. Capacity in Q4 will be
   similar or slightly higher than in Q3. (We find these would imply levels
   slightly below our estimates for ASK). Leases would bring the total capacity
   deployed to more than 80% in Q3 and some 80-85% in Q4. The 2022 comparable
   operating result will remain significantly negative. Finnair is preparing a
   new strategy and aims to complete the work during the autumn of 2022.

Open report


RAUTE - IMPROVING AFTER THE CLEAN UP

18.07.2022 - 09.35 | Preview

Raute reports Q2 results on Jul 22. We make downward revisions to our estimates
due to the latest update as well as the deterioration in wider economic
conditions.

Read more

Profitability is set to improve in H2

Raute’s Q2 bottom line will be burdened by big one-offs, including EUR 8-9m in
write-downs related to Russian projects and receivables as well as some EUR 1m
in restructuring costs such as severance. We thus revise our Q2 EBIT estimate
down to EUR -10.7m (prev. EUR -1.4m). H1 results would have been poor even
without such items due to the inflation which affects already signed orders.
Raute expects profitability to improve in H2, which we do not find a big
surprise. Raute is also finding ways to improve margins and lower costs; results
should already materialize this year and be even better visible in 2023
especially if Western demand continues to develop favorably.

Western orders continue to pick up after slow years

Raute’s focus tilts to West, especially after the Russian orders have been
delivered. North American orders came in at a high level of EUR 15m in Q1, but
the level may not extrapolate that well even in a more favorable economic
backdrop let alone in a souring one. We still expect the American business
continues to pick up as the market was cool even before the pandemic, however we
trim our estimates for new orders. Similar logic applies to Europe as the local
market softened considerably towards 2019 but showed marked increases in orders
last year, including a large Baltic project. Additional large European orders
could improve outlook, but it’s difficult to estimate the materialization and
timing of such projects especially now that uncertainty tends to undermine plans
for larger investments. Our FY ’22 revenue estimate is intact at EUR 146m, but
we cut our FY ’23 estimate to EUR 141m (prev. EUR 152m). We cut our FY ’23 EBIT
estimate to EUR 4.8m (prev. EUR 6.2m).

Valuation not very challenging, but outlook a bit unclear

In our view Raute retains its position as the global leader within the niche of
plywood and LVL machinery, particularly at the upper end of the market. The
current valuation of 8x EV/EBIT, on our FY ’23 estimates, is not all too
challenging, however there’s still a lot of uncertainty around the next few
years’ profitability levels. We revise our TP to EUR 11 (14); our rating is
HOLD.

Open report


FINNAIR - WORKING THROUGH THE CHALLENGES

15.07.2022 - 09.30 | Preview

Finnair reports Q2 results on Jul 19. We revise our estimates up a bit due to
busy early summer, but valuation continues to reflect the on-going improvement
well.

Read more

We believe EBIT could turn positive already in Q3’22

Q2 RPK topped our estimate by 12% thanks to high passenger loads, especially in
June, as Europe was in line while Asian and North Atlantic flows were above our
estimates. The overall Q2 RPK figure was roughly half of the level seen in 2019;
Finnair’s European Q2 flows were already 70% of the corresponding 2019 figures,
which reflects the fact that short-haul routes have rebounded faster than
long-haul ones. Many airports have been strained under the traffic and Finnair
cannot have dodged the challenge although the impact may have been less
pronounced in its case. Finnair expected Q2 EBIT to land around the same level
seen in Q4’21 (EUR -65m); we previously estimated the figure at EUR -80m but
revise our estimate to EUR -41m due to the busier-than-expected early summer
season. Finnair appears poised to reach profitability in the coming quarters,
despite the Russian airspace closure, as Western routes continue to rebound and
high travel demand helps secure good prices for wet leases.

Expect to hear more on shoring up long-term potential

The Russian closure is likely to limit Finnair’s long-term potential to some
extent, however Finnair is yet to announce any sales of aircraft in response. It
would therefore be interesting to get some further color on where Finnair sees
itself standing now with respect to the already announced leases and potential
additional capacity reduction measures. Finnair was quick to identify further
EUR 60m in permanent cost savings, and there were hints the target could still
be upped a bit. The company has also recently expanded its Stockholm Arlanda
presence and may be able to pursue more growth from there.

Valuation reflects the improving environment

Jet fuel prices peaked in June and are already down by some 20% from those highs
but the current levels remain elevated by historical standards. We have revised
our EBIT estimates slightly upwards, but airline valuations have developed soft
over the summer weeks and are now trading about 12x FY ’23 EV/EBIT. We don’t
thus see upside on the 13-18x EV/EBIT multiples (on our FY ’23-24 estimates). We
retain our EUR 0.43 TP and HOLD rating.

Open report


VERKKOKAUPPA.COM - PROFITABILITY DETERIORATES NOTABLY

15.07.2022 - 09.05 | Company update

With lower volumes, increased fixed costs, and higher price competition,
Verkkokauppa.com’s profitability faced a notable headwind in Q2. The development
of consumer demand contains a large amount of uncertainty and the H2 result is
likely below what we earlier expected.

Read more

Market continued challenging
Verkkokauppa.com’s topline faced an expected decline y/y, and with lower
volumes, increased costs, and softer gross margin EBIT fell negative. Group
revenue decreased by 3.7% y/y to EUR 125.7m driven by soft development of the
consumer segment with the record low consumer trust and reduced consumer
purchasing power. B2B segment and evolving product categories brought light with
their y/y sales growth of 12.6% and 4.8% respectively. Q2 inventory was
significantly above the level that of the comparison period and hence logistics
costs faced a notable increase y/y which with a help of a softer gross margin
resulted in an EBIT of EUR -0.9m (adj. EUR -0.2m), implying an EBIT margin of
-0.7% (adj. -0.2%). Q2 EPS amounted to EUR -0.02.

Guidance was revised downwards
The company lowered its guidance for FY’22, now expecting revenue between EUR
530-570m (prev. 530-590m) and an EBIT of EUR 8-14m (prev. 12-19m). The downgrade
of the upper bound of the sales guidance was a result of weaker outlook for the
consumer segment while EBIT guidance was decreased due to lower expected sales
volumes and increased price pressures. In addition to rising price competition,
a high level of inventory forces the company to either lower product margins to
increase the inventory turnover or store products over a season both potentially
resulting in weaker profitability.

HOLD with a target price of EUR 3.7 (4.3)
In the light of guidance revision and Q2 result, we adjusted our estimates
downwards. We now expect 2022 revenue to amount to EUR 556.0m and adjusted EBIT
to land at EUR 7.9m (1.4% margin). 2022 result will be record soft; hence, we
value the company with 23E multiples. With the company trading above its peers,
we retain our HOLD-rating and adjust the TP to EUR 3.7 (4.3).

Open report


VERKKOKAUPPA.COM - CHALLENGING ENVIRONMENT CONTINUED

14.07.2022 - 09.00 | Earnings Flash

Verkkokauppa.com’s Q2 EBIT fell short of our expectations. Simultaneously, the
company lowered its FY’22 guidance, which was driven by weak consumer trust,
impaired consumer purchasing power, and increased operative costs.

Read more

 * Group result: Q2 net sales decreased by 3.7% y/y to EUR 125.7m (EUR
   123.7/122.9m Evli/cons.) driven by soft development of consumer and export
   segments. Price competition increased, resulting in a softer gross margin.
   Through lower net sales, increased fixed costs, and softer gross margin, the
   company’s EBIT fell below that of the comparison period to EUR -0.9m (EUR
   2.4/2.1m Evli/cons.) implying an EBIT margin of -0.7% (Q1’21: 3.9%). EPS
   amounted to EUR -0.02 (EUR 0.03/0.03 Evli/cons.).
 * Online sales: weaker sales development was seen through all sales channels
   and online sales represented 63% (Q1’21: 61%) of total sales.
 * Category sales split: core categories represented 82% of total sales while
   evolving categories saw a y/y increase of 5% representing 18% of total sales.
 * Consumer segment: The main driver for the soft development of the consumer
   segment was weak demand in core categories and the delayed summer season.
   Meanwhile, the sales of evolving categories increased by 4.8% y/y. The
   segment represented 68% of total sales (Q2’21: 72%).
 * B2B segment continued its trend of strong development and corporate sales
   grew by 12.6% y/y. B2B segment represented 26% of total group sales (Q2’21:
   22%).
 * Export segment: with the withdrawal of Russian markets, export sales declined
   y/y and represented 6% of total sales
 * FY’22 guidance lowered: last night the company lowered its FY’22 guidance,
   now expecting revenue to land between EUR 530-570m (prev. 530-590m) and EBIT
   to amount to EUR 8-14m (prev. 12-19m). According to the new guidance, the
   company’s topline will face a y/y decrease of 1-8% while EBIT is expected to
   clearly decline, by 31-61%.

Open report


VERKKOKAUPPA.COM - EXPECTING SOFTNESS TO CONTINUE IN Q2

11.07.2022 - 09.30 | Preview

The consumer demand for durable goods in the Nordic markets has continued softly
in Q2 and hence we have made no changes to our estimates. We expect Q2 revenue
to decline and profitability to weaken. We retain our HOLD-rating and TP of EUR
4.3 ahead of Q2’22.

Read more

Late start of summer season has delayed sales somewhat
In our view, the demand for durable goods in Finland hasn’t taken notable
positive steps ahead and hence we expect the company’s Q2 result to be soft.
Market estimates imply the Finnish consumer electronics market not to see growth
in 2022 which partly supports our Verkkokauppa.com expectations. In addition,
the summer started relatively late in Finland which has in our view had a
negative impact on Verkkokauppa.com’s sales from April to June.

Estimates intact, H2 defines full-year performance
Meanwhile, we expect the B2B segment to continue its ongoing trend with
double-digit growth in Q2, on our estimates, the consumer segment sees a decline
y/y. In our view, the trend of the consumer demand for H2 can be observed during
August-September at the earliest, after the summer holidays are over, which
eventually defines the company's full-year performance. Consequently, we expect
Verkkokauppa.com’s revenue to decline also in Q3 while our Q4 estimates include
some optimistic y/y growth. In Q2, we expect topline to decrease by ~5% y/y to
EUR 123.7m, driven by low demand for consumer electronics and the late start of
the summer in Finland. Our view is that the evolving categories might also have
performed somewhat softer due to delayed season sales (grills and bicycles
etc.). Due to lower revenue, softer gross margin, and increased fixed costs we
expect EBIT to fall significantly to EUR 2.4m, implying an EBIT margin of 2%.

HOLD with a target price of EUR 4.3
The company’s 22E valuation is quite elevated compared to peers which is mostly
explained by the company’s poor performance in 2022. However, on our 2023
estimates, the company’s EV/EBIT multiple falls below its peers with
Verkkokauppa.com’s expected profitability improvement. We retain our HOLD-rating
and TP of EUR 4.3 ahead of the Q2 result.

Open report


DETECTION TECHNOLOGY - DETECTING NEW SOURCES OF GROWTH

16.06.2022 - 09.50 | Company report

Underlying demand in the imaging markets remains strong but issues in the supply
chain have restricted DT’s growth. We expect revenue and profitability to see
solid development in 2023 with the completion of the R&D program. We retain our
HOLD-rating and TP of EUR 20.0.

Read more

External factors still restricting DT’s full potential
MBU performed well during the whole pandemic time while decreased demand for
aviation solutions caused a significant decline in SBU’s activity. Industrial
clients started investments early during the pandemic and IBU has enjoyed a
solid revenue growth since. The recovery of SBU has started but the revenue is
still significantly lacking from the levels of 2019. Moreover, COVID-19
lockdowns in China have further restricted the availability of critical
components, forcing DT and its clients to postpone their deliveries. Even though
the lockdowns in China would ease, the “normal” component shortage is expected
to continue.

R&D pipeline loaded with opportunities
DT initiated its R&D program in early 2022 to lower its exposure to the
component shortage which eventually enables faster lead times and higher revenue
growth. The company aims to renew its products so that the critical components
with low availability can be replaced by the components with better
availability. DT’s R&D pipeline provides a potential for future development as
the usage of data-emphasized imaging increases in all its market segments.
Furthermore, investments in multi-energy technology provide notable future
potential when ME solutions commercialize.

HOLD with a target price of EUR 20.0
Supply chain issues and increasing cost inflation as well as geopolitical tenses
have forced us to take a more conservative stance. However, we believe in DT’s
long-term story given its growth potential and developing technology and thus we
retain our HOLD-rating with a TP of EUR 20.0. Future earnings growth supports
the stock’s upward development, but we see DT’s current valuation compared to
its peers somewhat elevated, not providing a suitable moment for increasing the
position in DT.

Open report


ASPO - OUTLOOK REMAINS SOLID DESPITE EXITS

16.06.2022 - 09.30 | Company update

Aspo’s guidance upgrade arrived sooner than we expected.

Read more

Adj. EBIT will top the EUR 42.4m figure seen previous year

Aspo’s upgrade didn’t come as a big surprise since the guidance appeared to be
on the cautious side after strong Q1 results, however the update materialized at
least a few months before we would have expected. In our view there have been no
major news regarding ESL’s and Telko’s development since the Q1 report, but the
dry cargo shipping business is still likely to see additional improvement from
last year despite high uncertainty around macroeconomic trends. Telko’s Q1
results happened to benefit from the war’s effects as high plastics and
chemicals prices helped adj. EBIT margin to 11.3%, likely an unsustainable level
in the long run as high costs already had some impact on customers’ operations
in Q1. Short-term profitability outlook remains favorable for ESL and Telko as
the former is set to near EUR 30m EBIT while the latter continues to operate in
an inflationary environment in the short and medium term.

M&A will add on top of Western organic opportunities

We estimate Aspo to reach EUR 44m in adj. EBIT this year (prev. EUR 34m). We
believe Telko will see some softening in margins in the medium term and hence we
wouldn’t expect improvement in EBIT for next year. The impending exit from
Russia and Belarus limits overall organic growth rate, although Western markets
should be able to make up some of the lost volumes. Telko also continues to look
for M&A targets, while Leipurin just announced a major acquisition in Sweden.
The target, a bakery distributor called Kobia, seems a great fit for Leipurin
and is in line with Aspo’s Western M&A aims. The EUR 50m business isn’t that big
in the Aspo context but is a significant move for Leipurin and profitable with a
3% EBIT margin. We are yet to include the acquisition in our estimates, but it
should close in a few months. In our view the acquisition underlines Aspo’s
commitment to Leipurin as M&A focus has often seemed to be around Telko.

Valuation is undemanding in the light of EUR 40m EBIT

Aspo’s EBIT is likely to remain around EUR 40m in the coming years. It may be
hard to significantly improve from that level considering the already favorable
market outlooks, but we view valuation undemanding as our SOTP suggests equity
value closer to EUR 10 per share. We retain our EUR 8.5 TP and BUY rating.

Open report


ENDOMINES - FOCUS ON PRODUCTION IN FINLAND

14.06.2022 - 09.20 | Company update

Endomines is ramping up production at Pampalo, while the Friday operations
remain uncertain. Recent macroeconomic development is causing some potential
headwind.

Read more

Building up production volumes at Pampalo
Endomines has seen continued two-fold progress during H1 so far, with ramp-up of
operations at Pampalo progressing quite as planned while the mining operations
at the Friday mine appear to be halted for a prolonged period of time. At
Pampalo, Endomines produced 1259oz of gold during Q1. Focus has been on
achieving a state of steady gold production at the processing plant. Endomines
also announced plans to open the East open pit at Pampalo, which according to
the company would increase gold production volumes with 10-20%. Operations at
the open pit are expected to continue for approx. two years. At Friday,
Endomines has carried out an underground diamond drilling campaign, with
promising results. Further drilling is however still required and will be
considered in late 2022.

Investigating potential in Finland amid macro uncertainty
Our estimates for Friday now assume production to be restarted during H1/2023
(earlier assumption mid-2022). The company noted that it is investigating
partnership options, which could be beneficial given the company’s current lack
of cash flows and continued need for additional financing. Production ramp-up at
Pampalo and the assumed start-up of the East open pit this year provides some
additional leeway but further financing will in our view be needed to further
increase production. Endomines has also investigated possibilities to develop
known deposits within the Karelian Gold Line. Gold is still enjoying rather
favourable price levels, but precious metals have as safe haven assets been
under pressure due to a stronger dollar and anticipated interest rate hikes. Any
gold price deterioration would in our view clearly limit the economic
feasibility of the other assets in Finland.

HOLD with a target price of SEK 2.2 (2.3)
With estimates revisions both operatively and due to completed and anticipated
financing arrangements along with gold price uncertainty we adjust our TP to SEK
2.2 (2.3), HOLD-rating intact.

Open report


SRV - BALANCE SHEET TOWARDS BETTER SHAPE

09.06.2022 - 09.45 | Company update

SRV embarked on the last phases of its balance sheet strengthening program.
Following balance sheet estimate revisions and released subscription rights we
adjust our TP to EUR 0.18 (0.35), HOLD-rating intact.

Read more

Last steps of balance sheet strengthening program
SRV initiated a program to strengthen its balance sheet in conjunction with the
Q1 results, seeking to increase equity by around EUR 100m and reduce IB net-debt
by the same amount, due to the impact of the EUR 141.2m Q1 write-downs on its
holdings in Russia and in Fennovoima on SRV’s equity and gearing. SRV is now
approaching the final stages of the program to reorganize and strengthen its
balance sheet. SRV resolved on a rights issue of up to approximately EUR 34.8m
to existing shareholders on May 31st, with the subscription period running from
7.6.-21.6.2022 at a subscription price of EUR 0.10 per share offered.

Planned actions seen to increase equity ratio above 35%
Based on the company’s rights issue presentation, held on June 8th, we have
adjusted our estimates assuming that shares are subscribed for up to maximum
amount offered in both the rights issue and directed issue to hybrid note
holders. At completion, this would increase the number of shares from approx.
263m to 670m. We have further adjusted our balance sheet estimates for the
outcome of the tender offer and conversion regarding its senior unsecured notes.
We have adjusted our operative estimates for the change in financial expenses,
which according to SRV are expected to decrease by EUR 6m annually. After the
transactions SRV’s equity ratio should rise to over 35% and the company should
be close to being net-debt free (excluding the impact of IFRS 16).

HOLD-rating with a target price of EUR 0.18 (0.35)
On our revised estimates and the release of subscription rights we lower our TP
to EUR 0.18 (0.35) and retain our HOLD-rating. Valuation is currently quite in
line with peers, with 2022e EV/EBITDA, assuming full subscription, at 7.3x vs
7.6x for peers.

Open report


NORDEC - IPO RESEARCH REPORT - BUILDING FOR THE FUTURE

08.06.2022 - 09.45 | Company report

Nordec is one of the leading providers of steel frame structures and envelope
solutions for construction projects in the Nordics, measured by revenue, with a
strong position in the CEE countries. Nordec is through its planned IPO seeking
capital to invest in future growth.

Read more

Focus on the project execution
Nordec operates in the new non-residential construction market and designs,
manufactures, and installs frame structures, envelopes and bridges. The company
mainly uses steel in its structures but is able to complement its offering with
other elements and materials. The company emphasizes its project management
capabilities, which together with the wide service offering in our view provides
a competitive advantage and serves the establishment of strong customer
relationships.

Megatrends enable growth opportunities
Nordec operates in the traditional non-residential construction markets in
Nordic and CEE countries. The market growth has been quite moderate but by
focusing on growth pockets offered by current megatrends, the company gains
access to more rapid growth opportunities. The company has delivered solutions
for the battery value chain, logistics centers, and green transition investments
in which the company in our view is well positioned to seek futher growth.

Implied equity value of EUR 71.7-85.0m
We have approached Nordec’s valuation mainly through peer group analysis.
Nordec’s peers currently trade with 22-23E EV/EBITDA multiples of 6.4-6.2x and
EV/EBIT multiples of 9.5-8.8x. In our view, Nordec’s valuation should near that
of the peer group and should the company succeed in improving its profitability
along with the investment program we see it justified that the company could be
trading at or above its peers. Our implied equity value for Nordec lands between
EUR 71.7-85.0m.



Open report


FELLOW BANK - INITIATE COVERAGE WITH HOLD

07.06.2022 - 09.30 | Company report

Fellow Bank is through its new operating model in a better position to
accelerate growth and compete in new customer sub-segments. 2022 will be heavily
affected by the transition but will set a foundation for clear growth and
profitability improvements. We initiate coverage of Fellow Bank with a
HOLD-rating and TP of EUR 0.42.

Read more

Digital bank focused on own balance sheet lending
Fellow Bank is a digital bank providing lending and banking and financial
services to individuals and SME’s and offering savers a return on their
deposits. Through a recent merger, the company is shifting towards lending from
its own balance sheet, having been established as an international marketplace
lending platform. The new operating model and cheaper form of funding in our
view offers additional growth potential and improves the company’s
competitiveness, which opens up potential to target new customer sub-segments.

Seeking over 25% annual growth of loan portfolio
The company’s financial targets for 2022-2026 are: annual growth of more than
25% of the loan portfolio, a return on equity of more than 15% by the end of the
target period and a capital adequacy ratio of at least 18% (T1). 2022 will be a
tougher year financially due to exceptional costs relating to the merger and the
build up the company’s loan book. We expect the company’s financials to turn on
a clearly more favourable path in 2023 with the buildup of the loan book and
further new growth. We expect profitability to pick-up during 2023-2024 with the
growth and scalability of the operating model and expect the ROE to improve to
13.2% by 2024.

HOLD-rating with a target price of EUR 0.42
We initiate coverage of Fellow Bank with a target price of EUR 0.42 and
HOLD-rating. Valuation is currently rather stretched when comparing with peers.
Fellow Bank is however still in the early stages of its planned growth phase and
the near-term potential for rapid growth in our view presents a justifiable
reason to stay along for the early stages of the company’s growth story.

Open report


DETECTION TECHNOLOGY - GAP QUARTER

07.06.2022 - 09.20 | Company update

DT issued a profit warning and lowered its Q2 guidance due to a product quality
issue in the supply chain and component shortage. With our near-term estimates
lowered, we retain our HOLD-rating and lower TP to EUR 20.0 (22.5).

Read more

Soft quarter underway
DT lowered its Q2 guidance and expects group revenue to decline y/y. The
weaker-than-expected development of net sales is attributed to a product quality
issue in the supply chain and the challenges for the company and its customers
to purchase other critical components. Even though the product quality issue has
been resolved, some MBU sales will be postponed to Q3 due to delays in the
supply chain.

We lowered our estimates
Due to the issues mentioned above, we downgraded our 2022 estimates (especially
MBU’s) and took a more cautious stand on our near-future expectations, despite
the fact that the company is expecting to see double-digit growth in H2’22. DT
noted also that the underlying demand remains strong, and, to our understanding,
upcoming product updates are expected to reduce DT’s exposure to the component
shortage starting from Q3. Driven by DT’s strong leverage of earnings and with
net sales decreasing, our Q2’22E EBIT estimate faced quite hefty downgrade,
declining ~20% from what we earlier expected. More on page 2.

HOLD with a target price of EUR 20.0 (22.5)
Driven by the decline of our 22E EBIT estimate and increased uncertainty, we
have adjusted our TP to EUR 20.0 (22.5). Both peer group’s and DT’s valuations
have been quite stable since our last update (28th April). DT is now trading
with 22-23E EV/EBITDA multiples of ~16-13x and EV/EBIT multiples of ~20-15x. At
this stage, we will accept a 22E EV/EBIT multiple of 20x as in 2023 DT’s
valuation drops near its peer valuation with our new target price. We retain our
HOLD-rating.

Open report


SOLTEQ - SLOWER REALIZATION OF POTENTIAL

30.05.2022 - 09.45 | Company update

Solteq lowered its guidance for 2022 due to challenges relating to the Utilities
business. With the downgrade, the company’s journey to realize its potential is
prolonged. We lower our TP to EUR 3.4 (5.0), rating remains BUY.

Read more

Guidance for 2022 lowered
Solteq issued a profit warning, lowering its guidance for 2022 for both revenue
and operating profit. According to the new guidance revenue in 2022 is expected
to grow and operating profit to weaken, while the company previously expected
revenue to grow clearly and operating profit to improve. The guidance downgrade
is driven in particular by the Utilities business, where Solteq sees that
increased investments and project delivery costs will weaken the profitability
and reduce customer invoicing.

Scalability potential not materializing as expected
We have lowered our estimates for the on-going year, with a quite notable
decrease in operating profit. We now expect 2022 revenue of EUR 75.0m (prev. EUR
77.0m), for an implied growth of 8.7%. Taking into account the more recent
acquisitions, the estimated organic growth is heading towards lower single-digit
figures. We have lowered our operating profit estimates by some 15% to EUR 6.6m.
All the made revisions relate to our estimates for Solteq Software. The reasons
for the guidance downgrade appear to point to near-term challenges, but we
expect a spill-over effect on 2023 thus slowing down the expected scaling of
Solteq Software and with the added uncertainty we have also lowered our 2023
operating profit estimate by some 15%. The overall narrative is still seemingly
unchanged, only the expected scaling of Solteq Software appears delayed.

BUY with a target price of EUR 3.4 (5.0)
Following our estimates revisions we lower our target price to EUR 3.4 (5.0) and
retain our BUY-rating. We currently expect profitability in 2023 to improve to
2021 levels, with notable improvement potential still present through Solteq
Software. With the bumps in the road we now value Solteq close to the IT
services peers, having previously justified a larger premium.

Open report


SOLTEQ - LOWERS 2022 GUIDANCE

25.05.2022 - 09.30 | Analyst comment

Solteq issued a profit warning, lowering both its guidance for revenue and
operating profit by a notch. Revenue in 2022 is now expected to grow (prev. grow
clearly) and operating profit to weaken (prev. improve).

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 * Solteq’s new guidance for 2022: Solteq Group’s revenue is expected to grow
   and profit to weaken.
 * Previous guidance: revenue is expected to grow clearly and operating profit
   to improve.
 * Solteq noted as reasons for the guidance downgrade the impact of
   higher-than-estimated investments in product development in Solteq’s
   Utilities business unit along with increased project delivery costs on
   profitability and reduced customer invoicing during the on-going financial
   year.
 * Our estimates for 2022e revenue and operating profit have been EUR 77.0m and
   7.7m respectively, implying a revenue growth of 11.6% and ~8% improvement in
   operating profit y/y. The new guidance implies single-digit growth and
   compared with our estimates an over 10% decline in operating profit in 2022e.
 * The guidance downgrade is unfortunate for the near-term, but does not based
   on the reasons stated appear to give reason to assume that the long-term
   scalability drivers wouldn’t remain intact. 

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DOVRE - INITIATING COVERAGE WITH BUY

20.05.2022 - 09.35 | Company report

Dovre is now in a favorable position in the sense that demand is robust for all
three segments, yet we expect earnings growth to continue well beyond this year.

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Project Personnel continues to perform this year

The Norwegian oil and gas sector continues to stand in a favorable spot, and
Project Personnel delivered solid figures already in FY ’21; performance
continued to improve towards the end of the year with no sign of inflation
affecting the results. Q1’22 results demonstrated no sign of weakness. Meanwhile
there was some softness in Consulting due to a high comparison period, however
the segment has always been a stable performer and we expect earnings growth
again next year. Project Personnel may be in a particularly favorable spot right
now, but Consulting has arguably more long-term potential. This would require
successful execution in terms of new customers; Dovre may also find M&A targets
to help growth. The new customers will probably not be too far from Consulting’s
core Norwegian public sector civil and infrastructure projects, yet the segment
could be looking to expand in Finland as well.

Consulting and Renewable Energy have more potential

Inflation does not seem to bother Project Personnel or Consulting, and even
Renewable Energy appears to have been able to anticipate certain challenges well
enough. We estimate EUR 201m revenue for this year and see EBIT at EUR 8.4m. The
4.2% EBIT margin would already be very decent, and translate to a high
double-digit ROI, but we estimate Dovre’s profitability has more long-term
potential as the results for Consulting and Renewable Energy are likely to
remain a bit modest this year. The outlook for Dovre’s key client sectors is
robust; we view our 5% organic CAGR estimates moderate. We also see Dovre’s EBIT
margin poised to climb towards 5% in the coming years even when we estimate a
conservative 4% EBIT margin for Project Personnel.

Valuation is not demanding

We regard SOTP the most appropriate way to value Dovre with its three distinct
segments. We see the fair range around EUR 0.70-0.75 per share based on the FY
’21-22 peer multiples. We tilt towards the lower end of the range as valuations
have been under pressure lately. Our TP is EUR 0.70; our rating is BUY.

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MARIMEKKO - TOP PERFORMANCE

14.05.2022 - 10.50 | Company update

Marimekko delivered strong Q1 figures by showing double-digit growth in all its
markets. Although the market environment includes uncertainties, Marimekko is
trading with a quite moderate valuation. We upgrade our rating to BUY (HOLD) and
adjust TP to EUR 14.5 (12.8).

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Strong start for the year
Marimekko’s Q1 performance was clearly better than we had anticipated. Topline
saw an increase of 24% y/y driven by all markets. A favorable trend of retail
and wholesale sales in Finland and good development of int’l sales boosted the
revenue to high double-digit growth. The largest segment, Marimekko’s home
market Finland grew by 27% y/y while int’l sales increased by 20% y/y. Q1 group
topline amounted to EUR 36.0m (Evli: 30.4m). Gross margin (63%) was negatively
affected by increased logistics costs and higher discounts. Driven by softer
gross margin and increased fixed costs, Q1 adj. EBIT margin (18.4%) was below
that of the comparison period, adj. EBIT amounting to EUR 6.6m (Evli: 3.9m). EPS
totaled EUR 0.12 (Evli: EUR 0.08).

Guidance intact, we made estimate revisions
Marimekko reiterated its 2022 guidance: revenue above the 2021 level and adj.
EBIT margin between 17-20%. The company also expects the relative growth pace to
slow down in H2, which stems from the strong comparison figures as well as
lowered consumer confidence to which Marimekko was quite immune in Q1, in our
understanding. We raised our 22E EBIT margin estimate near the upper bound of
the guidance. Driven by a strong start of the year, we expect the company to
face low double-digit growth in 2022 by full-year net sales amounting to EUR
167.7m and adj. EBIT totaling EUR 32.5m (more on report page 2).

BUY with a target price of EUR 14.5 (12.8)
The company’s share price has fallen from the 2021 highs by some ~50%.
Meanwhile, Marimekko’s peers have also seen a decline in their valuation. Given
the strong start of 2022 and by accepting a 22E EV/EBIT multiple of 18x, we
upgrade our recommendation to BUY (HOLD) and adjust TP to EUR 14.5 (12.8).

Open report


MARIMEKKO - Q1 RESULT TOPPED OUR ESTIMATES

13.05.2022 - 09.10 | Earnings Flash

Marimekko came in strong with Q1 net sales as well as EBIT growing rapidly. The
company’s resilience to weakened consumer confidence was stronger than we were
expecting.

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•    Q1 group result: topline increased by 24% y/y to EUR 36.0m (EUR 30.4m/32.4m
Evli/cons.) beating our and consensus estimates. Net sales growth was driven by
solid development of wholesale and retail sales in Finland as well as good
performance of int’l sales. Adj. EBIT improved to EUR 6.6m (EUR 3.9m/3.9m
Evli/cons.), being 18.4% of revenue. Weakened relative profitability was driven
by increased material and fixed costs. On the other hand, EBIT was supported by
topline growth and lower D&A. EPS amounted to EUR 0.12 (EUR 0.08/0.08
Evli/cons.).
•    Finland: net sales grew by 27% y/y to EUR 18.5m (Evli: EUR 15.2m). The
growth was driven by both retail (+18% y/y) and wholesale sales (+41% y/y).
•    Int’l: revenue saw an increase of 20% y/y, amounting to EUR 17.5m (Evli:
EUR 15.2m). Good sales development was driven by all market segments. Topline
grew strongly in the EMEA region (+34% y/y), North America (+26% y/y), and
Scandinavia (+23% y/y) while the growth in the APAC region was more moderate
with an increase of 10% y/y.
•    2022 guidance reiterated: Topline is expected to be above that of the
comparison period (2021: EUR 152.2m) and adj. EBIT margin to be between 17-20%
(2021: 20.5%).
•    Outlook: although consumer confidence has been in a trend of decline, it
seems that Marimekko has enjoyed still solid demand in Q1. The company expects
retail, license, and wholesale sales to grow in 2022. In percentage terms,
Marimekko estimates the net sales growth to be stronger at the beginning of 2022
than in H2.

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MARIMEKKO - UNCERTAINTY AHEAD OF Q1

10.05.2022 - 18.05 | Preview

We revised our near-term estimates ahead of Q1 due to declined consumer
confidence, especially in Finland and Japan. We retain HOLD rating and adjust TP
to EUR 12.8 (15.8).

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New collaborations incoming
In early 2022, Marimekko announced of few collaborations with global lifestyle
brands to enhance its brand awareness in its growing markets. Adidas
collaboration got a sequel with new spring/summer collection that dropped during
April 2022. In addition, Marimekko collaborates with a luxury brand Mansur
Gavriel. The bag collection will be available starting from June 2022. Moreover,
Marimekko announced its collaboration with global furniture and décor company
IKEA. The collection will be released in spring 2023. Collaborations bring
Marimekko highly scalable licensing revenue but, more importantly, by
cooperating with popular lifestyle companies Marimekko’s brand awareness
improves abroad significantly.

Consumer trust in decline in Marimekko’s main markets
Driven by increased inflation and interest rate pressures as well as
geopolitical tenses due to Russia’s attack on Ukraine, consumer trust has been
in a trend of decline in the western markets. Also, in Marimekko’s
second-largest market, Japan, the inflation has picked up driven by material and
energy costs. We expect the declined consumer activity to have a slight impact
on Marimekko’s Q1 sales development and thus we have revised our quite
optimistic near-term estimates. From what we earlier expected, we have
downgraded our 22E topline estimate by 2% while our 22E EBIT estimate faced a
decrease of 5% (see report page 2).

HOLD with a target price of EUR 12.8 (15.8)
In recent months, Marimekko’s valuation has melted alongside its peer group’s
valuation. With our revised estimates, the company trades with 22E EV/EBIT and
P/E multiples of 15x and 19x respectively. Considering our acceptable 22E
EV/EBIT and P/E multiples of 17x and 21x respectively, we see slight upside
potential in Marimekko’s stock price but, at the same time, remind about the
uncertainty concerning the demand for Marimekko’s products. We retain our HOLD
rating and adjust TP to EUR 12.8 (15.8).

Open report


ETTEPLAN - OUTLOOK STILL FAIRLY FAVOURABLE

06.05.2022 - 09.45 | Company update

Etteplan saw strong growth and good profitability in Q1. Presently, no clear
signs of a notable deterioration in the demand situation appear to be seen, but
the uncertainty has understandably increased.

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Double-digit organic growth in Q1
Etteplan reported overall solid Q1 results and clearly better than we had
anticipated. Although increased sick-leaves and lockdowns affected operations,
revenue still grew 23% y/y and near 15% organically to EUR 89.6m (EUR
81.2m/87.7m Evli/cons.). Profitability was also at good levels, with EBIT of EUR
7.6m (EUR 6.5m/6.9m Evli/cons.), at a margin of 8.5%. On service area levels,
compared with our estimates, revenue and profitability was better across the
board. Profitability in Engineering Solutions in particular was solid following
as a result of excellent operational efficiency levels.

Market outlook still appears to be fairly favourable
Comments regarding the demand situation and market uncertainties were all in all
somewhat upbeat, and potential near-term demand declines in some sectors seem to
be offset by increased demand in others. The direct impacts of the war in
Ukraine have as expected so far been limited. COVID-19 still poses issues due to
sick-leaves and lockdowns in China. Etteplan kept its guidance intact, expecting
revenue of EUR 340-370m and EBIT of EUR 28-32m. Following the solid Q1 figures
and some slight tweaks to the following quarters our estimates are now quite in
line with the mid-range of the guidance. We take a rather neutral approach given
the current uncertainties, still seeing good organic growth but at a slightly
lower pace compared with Q1.

HOLD with a target price of EUR 17.0 (16.5)
Etteplan currently quite justifiably trades above peers given the good growth
and profitability. More optimal market conditions could well justify >20x P/E
levels but with the current uncertainties and ~20% y/y deterioration in peer
median NTM P/E current levels appear quite fair. We adjust our TP to EUR 17.0
(16.5) due to estimates revisions, HOLD-rating intact.

Open report


PIHLAJALINNA - STEPS TOWARDS HIGHER PROFITABILITY

06.05.2022 - 09.35 | Company update

The Q1 results and notes on Pohjola Hospital support the view Pihlajalinna is
advancing in terms of profitability.

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Growth helped profitability top estimates

Q1 revenue grew 17% y/y to EUR 163m vs the EUR 157m/157m Evli/cons. estimates.
Volume growth was even higher than the company expected, 7% on an organic basis.
The beat was due to corporate customers, where Pohjola Hospital added EUR 9.4m,
but also thanks to public sector, including Virta, where higher outsourcing
pricing helped. Outsourcing profitability improved by EUR 1.5m y/y. High levels
of sick leaves were a drag, and Covid-19 services are no more that profitable,
but the volumes helped the EUR 5.9m adj. EBIT top the EUR 3.3m/3.5m Evli/cons.
estimates. Pohjola Hospital’s integration has so far proceeded better than
expected, but Pihlajalinna nevertheless retains its guidance for now as there
remain a few uncertain factors.

Integration progress is ahead of plan in some ways

Pohjola Hospital posted positive results already two months after the
acquisition, although not every unit is yet profitable. There’s still some
uncertainty around how quickly the integrated whole can be turned to driving
higher volumes, but positive development is likely to continue in H2. In this
sense the guidance is on the conservative side, but it makes certain allowances
for issues which may affect results during the following quarters. Sick leaves
were high in Q1 due to infections, and this experience informs some caution.
Certain negotiations related to Pohjola Hospital are yet to be completed, as is
the case for outsourcing restructurings. Current labor market issues raise
uncertainty, and in the case of Pihlajalinna the potential implications follow
with a lag. Pihlajalinna is also scaling up capacity in advance to better meet
future demand.

Guidance remains moderate for now

Our estimates for rest of the year are moderate, in line with the guidance, and
there’s a good chance for an upgrade during or after Q3. Pihlajalinna’s margins
have a lot of catching up to do with peers, but the Q1 results and comments on
outlook suggest the company has established a firm footing. The 15.5x EV/EBIT
valuation on our FY ’22 estimate isn’t high in the sector context, and we
estimate the discount to grow and the multiple to drop to below 11x next year.
We retain our EUR 14 TP and BUY rating.

Open report


ETTEPLAN - SOLID GROWTH IN Q1

05.05.2022 - 13.30 | Earnings Flash

Our concerns for a softer Q1 were clearly unfounded, as Etteplan's net sales
grew 23% to EUR 89.6m, above our estimates and slightly above consensus (EUR
81.2m/87.7m Evli/cons.). EBIT amounted to EUR 7.6m, above our and consensus
estimates (EUR 6.5m/6.9m Evli/cons.).

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 * Net sales in Q1 were EUR 89.6m (EUR 73.0m in Q1/21), above our estimates and
   slightly above consensus estimates (EUR 81.2m/87.7m Evli/Cons.). Increased
   sickness-related absences affected Etteplan’s business, but growth was
   nonetheless strong, 23% y/y, of which 14.1% organic. 
 * EBIT in Q1 amounted to EUR 7.6m (EUR 6.6m in Q1/21), above our estimates and
   consensus estimates (EUR 6.5m/6.9m Evli/cons.), at a margin of 8.5%.
 * EPS in Q1 amounted to EUR 0.23 (EUR 0.21 in Q1/21), above our estimates and
   in line with consensus estimates (EUR 0.19/0.22 Evli/cons.).
 * Net sales in Engineering Solutions in Q1 were EUR 46.7m vs. EUR 44.0m Evli.
   EBITA in Q1 amounted to EUR 4.9m vs. EUR 4.2m Evli. 
 * Net sales in Software and Embedded Solutions in Q1 were EUR 24.6m vs. EUR
   21.8m Evli. EBITA in Q1 amounted to EUR 2.3m vs. EUR 2.0m Evli. 
 * Net sales in Technical Documentation Solutions in Q1 were EUR 18.1m vs. EUR
   15.2m Evli. EBITA in Q1 amounted to EUR 1.8m vs. EUR 1.6m Evli. 
 * Guidance for 2022 (reiterated): Revenue is estimated to be EUR 340-370m and
   the operating profit is estimated to be EUR 28-32m. In terms of market
   outlook, Etteplan expects the general demand situation to remain fairly good
   throughout 2022.

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SUOMINEN - MARGINS REMAIN SET TO IMPROVE

05.05.2022 - 09.25 | Company update

Suominen’s Q1 results and guidance downgrade weren’t that big negatives in our
view, however there’s high uncertainty around the upcoming improvement pace. We
nevertheless continue to expect significant gains for H2.

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Q1 results and guidance downgrade were minor negatives

Suominen’s EUR 110m Q1 top line landed close to the EUR 109m/115m Evli/cons.
estimates. Revenue declined by 4% y/y as volumes decreased to an extent where
higher sales prices could not help. Americas was a bit softer than we expected,
while Europe compensated for the shortfall. The EUR 6.6m gross profit didn’t
land that much below our EUR 7.1m estimate, but higher admin costs meant the EUR
3.3m EBITDA was below the EUR 4.8m/4.4m Evli/cons. estimates. Suominen revised
its guidance down, but this wasn’t such a significant negative in the light of
the current uncertain environment and Suominen’s P&L’s sensitivity to various
factors. In our opinion Suominen’s profitability is set to improve from the
current lows.

Q2 should already improve a bit q/q

Demand fluctuations remain in certain wiping product categories for now as high
inventory levels continue to caution some US customers. Suominen’s response is
to adjust its sales mix by repurposing manufacturing lines to better meet
demand. Suominen has also been looking for new customers. There’s uncertainty
around the overall improvement pace with regards to the whole supply chain, but
we continue to expect revenue growth for this year. Increased energy costs
(mostly electricity for Suominen) continue to weigh Q2 results to some extent,
along with higher raw materials prices, but we see Q3 performance a lot
improved. We trim our Q2 EBITDA estimate to EUR 7.5m (prev. EUR 9.7m). Our
revised EBITDA estimate for this year stands at EUR 36.0m (prev. EUR 39.8m).

Valuation is by no means demanding

Suominen is valued around 5.5x EV/EBITDA and 12x EV/EBIT on our FY ’22
estimates. These are yet not particularly low multiples, but we continue to
expect significant profitability improvement for H2. We now estimate 6.0% EBIT
margin for next year (prev. 6.5%), and hence Suominen is valued about 4x
EV/EBITDA and 6.5x EV/EBIT on our FY ’23 estimates. Our new TP is EUR 3.5 (4.0)
as we retain our BUY rating.

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ASPO - TELKO’S VALUE IS OVERLOOKED

05.05.2022 - 09.05 | Company update

Aspo’s Q1 results beat estimates. Uncertainty persists around H2, but we are now
more confident towards Telko.

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Q1 figures in fact gained from the turbulence

Aspo’s Q1 revenue was driven to EUR 160m, compared to the EUR 132m/136m
Evli/cons. estimates, by Telko’s high EUR 76m top line. We had estimated EUR
58m, and the figure was lifted by the extraordinary inflationary environment
created by the war. Telko’s markets’ normalization is now postponed. Telko’s
adj. EBIT reached EUR 8.6m, and Aspo’s EUR 10.3m EBIT was clearly above the EUR
8.0m/7.6m Evli/cons. estimates while there were EUR -4.9m in items affecting
comparability. ESL’s performance didn’t come as a big surprise as it was known
the war will have little direct impact on the dry bulk business.

We reckon Telko’s long-term potential hasn’t diminished

There are many moving parts but Q1 was overall a lot better than was estimated
as the environment lifted prices and for that part supported the two raw
material distributors. The war thus caused a short-term boost for Telko and
Leipurin, but downscaling creates uncertainty particularly around H2. Leipurin
will exit Russia, Belarus and Kazakhstan, which account for almost EUR 30m in
revenue. Telko is reviewing possibilities to exit Russia, and we understand some
30% of Telko revenue may be affected. The closure is thus significant, but we
understand its impact on margins will be modest. Telko’s long-term 8% EBIT
target should remain relevant. We see Telko’s FY ’23 revenue down 20% from Q1’22
LTM; uncertainty hangs around the figure for the next few quarters, but we
believe it shouldn’t take Telko too long to again reach EUR 15m EBIT. Demand for
ESL’s handysize vessels temporarily softens in Q2 as customers adjust to the
Russian situation, but larger vessel demand could compensate for this.

In our opinion valuation neglects Telko’s potential

Our estimate revisions are relatively small on an annual level. There are still
many questions around Telko’s performance going forward, but the Q1 results were
encouraging and in our view possibility for a positive guidance revision has
increased. We view an EBIT of about EUR 40m a relevant possibility again in the
coming years, which would correspond with the roughly EUR 30m and EUR 15m
long-term EBIT levels for ESL and Telko. Our new TP is EUR 8.5 (8.0), and our
rating is now BUY (HOLD).

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ELTEL - INFLATION CAUSED A SETBACK

05.05.2022 - 08.45 | Company update

Q1 profitability fell short of expectations and Eltel also removed guidance due
to inflation. Long-term potential remains there, but we continue to view
valuation fair.

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Revenue in line, profitability fell particularly in Sweden

Eltel’s Q1 revenue was EUR 184m vs the EUR 185m/180m Evli/cons. estimates. Top
line turned to growth in Q1, and there were no delays although some Polish
projects may be affected going forward. Winter conditions and infections also
had a negative effect on productivity, but fibre and 5G demand remained very
strong in the Nordics. Power grid works in the Nordics are prospects. Operative
EBITA was EUR -2.4m vs our EUR -0.2m estimate as inflation accelerated. Finnish
and Norwegian profitability levels were like we expected, Denmark was a bit
soft; the miss was mostly due to Sweden. Eltel removes its guidance for the year
because of the inflation spike, however the company expects to receive
compensation for higher costs already in Q2 in the Nordics, but Poland might
take longer.

Potential remains, but uncertainty is high

Inflation is really hurting the Power business through fuel, steel, cable and
concrete prices, and the war in Ukraine is also an issue as it might delay
projects in Poland. Eltel works on the assumption inflation will persist for now
and hence the company also pushed its long-term financial performance target
date forward by two years. We cut our Q2 EBITA estimate to EUR 3.7m (prev. EUR
7.1m). We therefore estimate only marginal profitability improvement this year.
We expect Eltel’s earnings improvement to continue next year as the company is
likely to receive adequate compensation for higher costs. We also expect Sweden
to be back to black later this year and note Eltel is implementing certain
profitability investments in the country.

Valuation is overall fair relative to peers

Our EBITA estimate for the year is now EUR 15.1m vs EUR 22.2m before the report.
We make basically no changes to our top line estimates and apply only a minor
cut to our FY ’23 profitability estimates. Eltel is valued at a relatively high
18x EV/EBIT level on our FY ’22 estimates, but the level should decline
relatively fast in the coming years as profitability lags most peers. The
valuation is modest relative to long-term potential, but in our view this is
fair. Our TP is now SEK 10 (15); we retain our HOLD rating.

Open report


PIHLAJALINNA - FIGURES ABOVE ESTIMATES

05.05.2022 - 08.30 | Earnings Flash

Pihlajalinna’s Q1 revenue came in 4% above estimates and helped profitability
land some EUR 3m higher than was expected.

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 * Q1 revenue grew by 16.6% y/y to EUR 163.1m, compared to the EUR 156.6m/156.7m
   Evli/consensus estimates. Corporate customer revenue was EUR 49.3m vs the EUR
   44.6m/44.6m Evli/consensus estimates, while private customers amounted to EUR
   22.8m vs the EUR 22.6m/24.1m Evli/consensus estimates. Public sector
   customers were EUR 109.2m, compared to the EUR 107.8m/105.2m Evli/consensus
   estimates. Inorganic growth contributed EUR 15.9m while organic growth was
   EUR 7.3m, or 5.2%.
 * Covid-19 services revenue amounted to EUR 8.1m.
 * Adjusted EBITDA was EUR 16.5m vs the EUR 13.1m/12.1m Evli/consensus
   estimates, while adjusted EBIT landed at EUR 5.9m, compared to the EUR
   3.3m/3.5m Evli/consensus estimates.
 * Pihlajalinna guides revenue to increase substantially and adjusted EBITA to
   remain flat (unchanged).

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ASPO - Q1 PROFITABILITY REMAINED HIGH

04.05.2022 - 10.20 | Earnings Flash

Aspo’s Q1 results clearly topped estimates, however the previous full-year
guidance is retained for now as much uncertainty persists around Telko’s H2.

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 * Aspo Q1 revenue was EUR 160.4m vs the EUR 132.2m/135.6m Evli/consensus
   estimates.
 * EBIT landed at EUR 10.3m, compared to the EUR 8.0m/7.6m Evli/consensus
   estimates. There were a total of EUR -4.9m in items affecting comparability,
   and Aspo’s adjusted EBIT amounted to EUR 15.0m.
 * ESL’s revenue was EUR 56.8m vs our EUR 50.9m estimate, while EBIT was EUR
   7.9m vs our EUR 7.5m estimate.
 * Telko’s top line amounted to EUR 75.9m, compared to our EUR 58.1m estimate.
   EBIT was EUR 4.0m vs our EUR 1.8m estimate. There were a total of EUR -4.6m
   in items affecting comparability, and adjusted EBIT was EUR 8.6m. Telko’s Q2
   performance should remain strong, but the situation for H2 is unclear.
 * Leipurin revenue was EUR 27.7m, compared to our EUR 23.2m estimate, while
   EBIT came in at EUR -0.4m vs our EUR 0.1m estimate. Items affecting
   comparability amounted to EUR -1.1m, adjusted EBIT being EUR 0.7m.
 * Other operations cost EUR 2.5m, compared to our EUR 1.4m estimate, including
   e.g. EUR 0.5m in extraordinary compensation to the former CEO.
 * Aspo retains its guidance and expects FY ‘22 EBIT in the EUR 27-34m range.

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SUOMINEN - EARNINGS GUIDANCE REVISED DOWN

04.05.2022 - 09.55 | Earnings Flash

Suominen’s Q1 results landed relatively close to estimates, although on the
softer side. The company revises its earnings guidance down due to intensified
cost inflation, while customer inventory levels in the US are normalizing but
not as fast as expected.

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 * Q1 revenue was EUR 110.3m, a decline of 4% y/y, compared to the EUR
   109.0m/114.7m Evli/consensus estimates. Americas amounted to EUR 61.7m vs our
   EUR 64.0m estimate while Europe was EUR 48.5m, compared to our EUR 45.0m
   estimate.
 * Gross profit was EUR 6.6m vs our EUR 7.1m estimate. Gross margin therefore
   amounted to 6.0%, compared to our 6.5% estimate.
 * EBITDA landed at EUR 3.3m vs the EUR 4.8m/4.4m Evli/consensus estimates. EBIT
   was EUR -1.3m vs the EUR -0.2m/-0.6m Evli/consensus estimates.
 * Suominen now guides EBITDA to decrease clearly this year. The war has
   intensified cost inflation. Customer inventory levels in the US have
   normalized to an extent, although somewhat slower than expected. Suominen
   expects demand to improve in H2.

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ELTEL - INFLATION HITS PROFITABILITY

04.05.2022 - 09.25 | Earnings Flash

Eltel’s Q1 top line was close to estimates, but the war and unforeseen inflation
hit bottom line hard. Eltel may get compensation for the higher costs later
during the year, but there is a risk the overall impact of inflation remains
negative this year and hence Eltel also removes its guidance.

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 * Q1 revenue grew by 1% y/y and amounted to EUR 184.0m vs the EUR 185.4m/179.8m
   Evli/consensus estimates. Growth was strong in Sweden and Norway, while
   Finland declined and Denmark especially so partly because of slower than
   anticipated ramp up of new agreements. The demand for fibre and 5G overall
   remains high.
 * EBIT landed at EUR -2.5m, compared to our EUR -0.3m estimate. Operative EBITA
   was EUR -2.4m vs our EUR -0.2m estimate. Inflation hit the results in all
   markets, especially in the form of higher fuel and asphalt prices. The
   Finnish and Polish power businesses also saw inflation in materials such as
   steel. Eltel is in dialogue with customers regarding compensation for the
   cost increases.
 * Profitability in Finland remained sound, along with Norway, but the Q1 loss
   in Sweden deepened and Danish results also declined a lot.
 * Eltel removes guidance as the war and increased inflation raise uncertainty.
   The previous guidance expected FY ’22 operative EBITA margin to increase.

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ENERSENSE - CMD NOTES

04.05.2022 - 08.35 | Company update

The CMD added color on Enersense’s plans to expand its print in the renewables
value chain. Wind power, on sea as well as land, is the key in multiplying
revenue and earnings as the company will both develop and own wind farms.

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EUR 500m revenue and EUR 100m EBITDA by 2027

Enersense targets EUR 300m revenue for the current construction and EUR 100m for
the current wind power business by 2027. The former would contribute EUR 30m
EBITDA and the latter EUR 35m. The Megatuuli acquisition helps the company to
have a say on the kinds of wind power projects that get developed. Proprietary
renewables production is to be ramped up to EUR 100m revenue, or 600-700MW of
mostly Finnish onshore wind power capacity, which requires some EUR 300m of
equity-like capital (assuming 40% equity ratio, depending on the exact financing
structure, which we assume could include e.g. hybrid instruments). The projects
would be valued at some 20x EV/EBITDA (an IRR of around 5-10%). Enersense
develops its offshore wind power platforms to tackle the pack ice challenges.
The Baltic wind power market also has plenty of growth potential as there’s not
yet much local capacity.

Wind power dominates, but other renewables also figure in

The Finnish wind power market is now the most important but not the only focus
area. Enersense also has interest towards solar energy as the company views it
an overlooked source in Finland. Within nuclear power Enersense is involved in
France and the UK, besides Finland. The new European project of energy
self-sufficiency in general greatly helps Enersense’s long-term outlook and
includes such concrete prospects as the Baltic transmission network’s
desynchronization from the Russian system. Another opportunity is found in
Finland, where the EV stock is expected to grow at an above 20% CAGR during this
decade. There’s always the potential for some additional M&A, but we believe the
already identified renewable production pipeline will claim most of the focus
during the years to come.

The transformation happens gradually over the years

We make no changes to our estimates for now, but it’s clear Enersense’s
financial profile is going to change a lot over the coming years as the company
begins to add its own renewable energy production. We retain our EUR 8 TP and
HOLD rating.

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ETTEPLAN - ANTICIPATING SOME SOFTNESS

03.05.2022 - 09.45 | Preview

Etteplan reports Q1 results on May 5th. We remain on the cautious side due to
the seen increase in sick leaves. Some uncertainty is brought by Ukraine crisis
but overall, we see no major changes to our views.

Read more

Cautious approach to Q1 due to increases in sick leaves
Etteplan reports Q1 results on May 5th. Our Q1 estimates remain more on the
conservative side as a precaution given the increases in sick leaves seen in
conjunction with the Q4 report, but with the good growth figures posted in Q4
there is certainly potential for faster growth. In terms of profitability, we
expect a similar trend as during 2021, with the full-year EBIT-margins set to
remain near the 9% mark. Our estimates for Q1 are unchanged ahead of the
earnings report, with our net sales and EBIT estimates at EUR 81.2m (Q1/21: EUR
73.0m) and EUR 6.5m (Q1/21: EUR 6.6m) respectively.

Some potential indirect demand uncertainty
The guidance given for 2022 in the Q4 report was in our view quite solid, with
revenue estimated to be between EUR 340-370m and EBIT to be between EUR 28-32m.
The mid-range of the guidance according to our estimates would imply an organic
growth of around 10% excluding potential new acquisitions. The situation in
Ukraine has caused some additional demand uncertainty, although potential direct
impacts should not be material, as Etteplan to our understanding does not have
any significant business in the countries directly affected. Although we do not
see any notable pressure on margins, we note that Etteplan proved its resilience
and adaptability to changes in the demand environment during the pandemic. Our
2022 estimates remain unchanged, with our revenue and EBIT estimates at EUR
344.5m and 29.3m respectively.

HOLD with a target price of EUR 16.5 (17.5)
Although our estimates remain intact, we adjust our target price slightly to EUR
16.5 (17.5) in light of the added uncertainty factors. Our target price values
Etteplan at approx. 19x 2022 P/E. We retain our HOLD-rating.

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PIHLAJALINNA - EARNINGS ARE TO IMPROVE IN H2

03.05.2022 - 09.30 | Preview

Pihlajalinna reports Q1 results on May 5. The company’s Q4 results were
negatively affected by higher outsourcing costs, and the situation will not much
improve for Q1. Pohjola Hospital will also have remained in the red during the
quarter. We do not expect changes to guidance.

Read more

We expect Q1 EBIT to have declined by EUR 3.4m y/y

Pihlajalinna’s organic growth was healthy throughout last year, including in Q4,
as corporate and private customer demand bounced back from the pandemic lows. We
estimate FY ‘22 organic growth to slow down to roughly half of the 13.5% rate
seen last year. Q4 profitability saw a temporary setback as specialized care
costs increased. We expect Pihlajalinna to receive compensation for these
complete outsourcing costs later this year, but the negative effect was some EUR
2m in Q4 and we expect it to have been similarly significant in Q1 as well.
Pohjola Hospital’s FY ’21 EBIT was ca. EUR -7m and hence Q1 EBIT will have to
bear another meaningful burden. The Q1 figures will not fully reflect the
acquisition as it was completed only by the beginning of February. We continue
to expect EUR 156.6m revenue and EUR 3.3m EBIT for Q1.

Pohjola Hospital should involve no big surprises

Pihlajalinna previously indicated Covid-19 services revenue to decline this
year. There was already some fading in Q4, and we expect this to have been the
case also in Q1 even when the Finnish virus situation was by some measures the
worst during the pandemic. We expect the Pohjola Hospital integration to have
proceeded very much according to plan so far. Losses will still be there in Q2
but H2 could already show positive results. The EUR 5m in projected cost
synergies are significant and the acquisition helps gain insurance customer
volumes, which is an attractive segment.

Earnings and multiple expansion potential remain as before

Pihlajalinna’s peer multiples have remained largely unchanged in the past few
months. The big picture on Pihlajalinna’s valuation is therefore intact:
Pihlajalinna’s profitability now lags the (mostly) larger peers’ but should
begin to catch up soon. Meanwhile the multiples for FY ’23-24 are some 30% below
those of peers. We retain our EUR 14 TP and BUY rating.

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CONSTI - SOME HEADWIND SEEN

02.05.2022 - 09.40 | Company update

Consti saw some seasonal softness in growth in Q1. Demand and construction
material uncertainty continues to have an impact, but we still see the
renovation market being fairly well positioned.

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Growth softness in Q1 due to long winter
Consti’s Q1 results were fairly decent compared with our estimates. Revenue
development was slow due to the longer winter, with y/y growth of 0.9% to EUR
59.8m (EUR 63.3m/64.4m Evli/cons.). Profitability was still at decent levels for
the seasonally slower quarter, with EBIT at EUR 0.4m (EUR 0.0m/0.4m Evli/cons.).
The increase in construction materials prices had a somewhat higher impact than
in the comparison period. The order backlog grew 4.4% y/y on new orders of EUR
37.6m (Q1/21: 69.8m). Consti kept its guidance intact, expecting the operating
profit in 2022 to be between EUR 9-13m.

2022 estimates still largely intact
We have only minor adjustments to our 2022 estimates, having slightly lowered
our growth and profitability estimates for the rest of the year, while our full
year EBIT estimate is slightly up due to the earnings beat in Q1. Our 2022
estimates for revenue and adj. EBIT are now at EUR 304.5m (2021: 288.8m) and
10.7m (2021: EUR 9.5m). The market continues to be affected to some degree by
construction material availability and prices, with the crisis in Ukraine having
further affected the situation and created short-term uncertainty relating to
new projects in the negotiation phase, but overall still does not appear to have
deteriorated materially and the long-term demand drivers for the renovation
market provide continued support.

BUY with a target price of EUR 12.0 (13.0)
The uncertainty relating to demand and construction material prices and
availability is currently at elevated levels and has understandably led to lower
valuation multiples. Consti is in our view still less prone to the shocks
compared with primarily new construction focused companies. Consti currently
trades below peers, which given the aforementioned appears unjustified. We
adjust our TP to EUR 12.0 (13.0) and retain our BUY-rating.

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ENERSENSE - INFLATION RESISTANCE TO BE TESTED

02.05.2022 - 09.30 | Company update

Enersense’s Q1 profitability figures beat our estimates but cost inflation can
hurt figures more during the rest of the year. Long-term outlook remains
favorable thanks to the green vertically integrated strategy, but we view
current valuation overall fair.

Read more

Strong headline EBITDA, but mixed results underneath

Enersense’s revenue was up by 1% y/y to EUR 53.8m, compared to our EUR 54.2m
estimate. Smart Industry’s figures declined due to the Staff Leasing sale as
well as the lower than estimated Olkiluoto nuclear power plant volumes. The
Olkiluoto project hit profitability, and together with the Enersense Offshore
integration helped produce an EBITDA of EUR -1.0m. Connectivity and
International Operations were able to grow at double-digit rates as Covid-19 was
no longer a major issue, but their EBITDA declined due to inflation. Power grew
a lot more than we expected and contributed to the group EUR 5.5m adj. EBITDA,
compared to our EUR 2.7m estimate, as high revenue, project execution and
Megatuuli acquisition drove profitability.

Cost inflationary effects on H2 figures remain to be seen

Enersense retains its guidance as the war causes some project delays this spring
and hence Q2 figures will be relatively low. Q3 and Q4 should again be
comparatively strong (winter and spring are always somewhat quiet), but
inflation and material availability add to uncertainty. The underlying
improvement pace in H2 is still unclear especially when acquisitions have
complicated the picture. We revise our adj. EBITDA estimates down by 17% for the
remainder of the year while our revenue estimate is almost intact. The war and
its effects may have a short-term negative effect on Enersense’s performance,
but its long-term consequences are likely to be beneficial ones as governments
accelerate e.g. wind power investments.

We consider current valuation neutral

Enersense’s multiples for the next few years are still low relative to peers,
assuming profitability continues to improve, whereas the multiples for FY ’22
represent a slight premium. We therefore argue the current valuation is overall
fair in the current high inflation environment. Successful execution and strong
underlying profitability in H2 would be a likely upside driver. We retain our
EUR 8 TP. Our rating is now HOLD (BUY).

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EXEL COMPOSITES - CATCHING UP WITH POTENTIAL

02.05.2022 - 09.00 | Company update

Exel’s EBIT appears bound to improve more from the recent lows. We make only
minor revisions to our estimates.

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Margins seem set to improve further during this year

Exel’s Q1 revenue grew 10% y/y to EUR 34.2m, compared to the EUR 37.1m/33.9m
Evli/cons. estimates. All industries continued to grow except Wind power and
Defense, where timing issues led to 8% y/y top line declines but for which
long-term outlook has clearly improved in the past few months. The latter
remains relatively small but has a lot more potential in markets such as India,
while we believe China’s weakness also contributed to the decline of the former.
Adj. EBIT amounted to EUR 2.2m vs the EUR 1.7m/1.4m Evli/cons. estimates.
Product mix and variable cost inflation had a negative impact on profitability,
masking some of the underlying positive development as Exel’s pricing adjusts
with a lag of few months. Energy costs are also up, but Exel should be able to
pass them on as well; we note Exel can also adjust already signed orders’
prices.

Guidance upgrade is much possible later this year

The US unit has now reached a break-even result; we estimate Exel’s EBIT margin
continues to improve towards 7% and beyond during this year. We estimate 7.5%
margin for H2’22, a level previously seen in H1’21 but with the difference that
this year top line will be 15% higher. The Chinese restructuring will also
produce EUR 0.7m in annual cost synergies. China’s virus situation pushed the
Asia-Pacific region down 22% y/y in Q1; we believe there’s a good chance Exel
will revise guidance upwards later this year, especially if Chinese demand
normalizes and productivity further progresses in the US.

Valuation appears very conservative

We estimate EUR 10.2m adj. EBIT for this year, on which Exel is valued about
11x. Exel has additional profitability potential beyond that and is valued 8x
EV/EBIT on our FY ’23 estimates. An 8.5% EBIT margin estimate doesn’t seem to be
too high for next year, considering Exel reached a higher margin in FY ’20 while
revenue will soon have grown by some 40% since then. There are no particularly
relevant peers for Exel and hence valuation is a matter of judgment, but in our
view Exel’s earnings-based multiples appear very undemanding in the short and
long-term perspective. Our new TP is EUR 8.5 (9); we retain our BUY rating.

Open report


RAUTE - LOOKING FOR MORE WESTERN ORDERS

02.05.2022 - 08.40 | Company update

Inflation hurt Raute’s Q1 EBIT more than we estimated, but the longer-term
picture wasn’t changed all that much.

Read more

Cost inflation was a greater challenge than we expected

Raute Q1 revenue grew 67% y/y to EUR 41m vs our EUR 34m estimate. Both projects
(EUR 26m) and services (EUR 15m) came in higher than our respective EUR 21m and
EUR 13m estimates. Raute delivered projects according to plan, without any major
component issues, and recognized EUR 14m in Russian revenue (vs our EUR 12m
estimate). Profitable execution in certain larger projects was challenged by
cost inflation more than expected and the EUR -1.5m EBIT didn’t meet our EUR
0.2m estimate. The EUR 36m order intake topped our EUR 29m estimate as North
American orders were EUR 15m, compared to our EUR 7m estimate, while the EUR 13m
European order intake was close to our estimate. Modernizations contributed a
significant share of order intake. Inflation may no longer be such a great
challenge in the coming quarters, but Raute is not yet able to provide guidance
for the year as there remains too much uncertainty around the delivery of the
EUR 78m Russian order book.

Some encouraging signs on Western orders’ outlook

We now estimate EUR 38m Russian revenue for this year. We expect no big losses
from the Russian deliverables, but neither do we estimate great profitability
for the coming quarters. Raute’s established Western footprint helps it to
withstand the loss of Russia; North America is a promising source for many
additional smaller orders, including modernizations, while Europe could support
larger mill projects in the years to come. The long-term demand outlook for
Raute’s technology is sound as before, but the short-term capex picture is
muddled by the war.

Western order levels will drive valuation over this year

We raise our FY ’22 revenue estimate to EUR 146m as we expect Europe, North
America and Russia to contribute more than we previously did. Western orders
will be a driver in the coming quarters as their level should shore up the
following years’ revenue at least for a certain portion of the hole left by
Russia. We expect no EBIT from Raute this year, but ca. EUR 6m could be possible
next year if Western orders stay high over the course of FY ’22. Raute is then
valued 7x EV/EBIT on our FY ’23 estimates. Our new TP is EUR 14 (15) as we
retain our HOLD rating.

Open report


VAISALA - PERFORMANCE ON TRACK

30.04.2022 - 08.45 | Company update

The underlying demand for Vaisala’s applications continued strong. With the
robust start of 2022, we upgraded our estimates. We retain our HOLD rating and
adjust TP to EUR 45.0 (41.0).

Read more

Revenue growth scaled nicely
With the strong Q4’21 order book, Vaisala’s Q1 topline topped our expectations
by growing by 29% y/y to EUR 118.8m (Evli: 108.6m). The growth was driven by
IM’s industrial instruments and life science as well as W&E’s renewable energy
and meteorology. While aviation saw the demand and orders growing, its Q1 sales
yet declined y/y. With improved gross margin, revenue growth scaled nicely and
EBIT over doubled from the comparison period. Group EBIT amounted to EUR 17.5m
(14.8% margin).

W&E’s aviation took a big step in orders received
Vaisala’s future seems bright as the order book broke another record at EUR
168.5m. Aviation took a big step in recovery towards the pre-pandemic level in
terms of orders received. We expect aviation to be one of the revenue growth
drivers of W&E during the next quarters. Strong order development continued also
in renewable energy, industrial instruments, and life science. Vaisala, once
again, managed to deliver all its orders and IM succeed in capturing market
share with its delivery reliability. In Q1, freshly acquired SaaS company
AerisWeather contributed Vaisala’s topline by EUR 0.6m and EBIT by some EUR
0.1m. The acquisition supports execution of W&E’s strategy to drive growth in
DaaS and SaaS recurring revenue businesses.

Low visibility of component availability continues
The component shortage had an impact on Vaisala’s Q1 gross margin of which
impact was eventually offset by revenue scalability. Gross margin impact was
smaller than in previous quarters, less than 1%-p. However, in Q1, the company
made a commitment on spot component purchases, most of which will be realized
later. In our understanding, the gross margin impact might be more visible
during the next quarters. In addition, COVID-19 lockdowns in China might cause
some extra constraints in Vaisala’s supply chains, resulting in postponed
product deliveries or forcing the company to place additional spot-component
purchases.

HOLD with a target price of EUR 45.0 (41.0)
Vaisala held its guidance intact, and with the same performance continuing, we
find the guidance quite cautious. However, the market possesses an increasing
amount of uncertainty. We have revised our near-term estimates upwards based on
the strong Q1 result and record-level order book. Now, we expect 22E revenue to
land near the upper bound of the guidance, at EUR 490.4m (+12% y/y). Revenue
growth is driven by both business units: we expect IM to grow by 17.7% y/y and
W&E to grow by 7.9% y/y in 2022. Our 22E EBIT estimate amounts to EUR 64.5m
(13.1% margin). While the Q1 growth pace was rapid, in Q2 we expect the slope of
revenue growth to smoothen. On a group level, we expect the topline to grow by
7.9% y/y to EUR 118.1m. In our understanding, Q1 included some seasonality, and
hence we expect Q2 revenue to be approx. flat q/q, while in previous years, Q1
has been the calmest quarter, especially in W&E. We expect the gross margin to
be a bit softer than in the previous year, but scalability to improve the Q2
profitability y/y to EBIT of EUR 12.5m (10.6% margin). With our upgraded
estimates, Vaisala (22E EV/EBITDA ~18x) is still trading with a premium to its
peers (22E EV/EBITDA ~16x). We find the premium justified but still remind that
valuation stretches. We retain our HOLD rating and raise our TP to EUR 45.0
(41.0).

Open report


ENERSENSE - PROFIT FIGURES TOPPED OUR ESTIMATES

29.04.2022 - 12.25 | Earnings Flash

Enersense’s Q1 profitability figures topped our estimates. The company
reiterates its guidance, however Q2 profitability will be relatively weak this
year due to project delays caused by the war.

Read more

 * Q1 revenue was EUR 53.8m, compared to our EUR 54.2m estimate. Smart Industry
   amounted to EUR 16.6m vs our EUR 22.5m estimate, while Power was EUR 14.3m vs
   our EUR 11.2m estimate. Connectivity came in at EUR 9.3m, compared to our EUR
   8.6m estimate, International Operations EUR 13.5m vs our EUR 11.9m estimate.
 * Adjusted EBITDA landed at EUR 5.5m vs our EUR 2.7m estimate. EBIT was EUR
   3.2m, compared to our EUR 0.4m estimate.
 * Order backlog was EUR 295.5m at the end of Q1.
 * Enersense expects Q2 to be the weakest quarter this year in terms of
   profitability as the war has caused delays in projects during the spring.
   Inflation, material availability issues and virus infections can also delay
   projects and impair their profitability.
 * Enersense guides EUR 245-265m in revenue and EUR 15-20m in adjusted EBITDA
   for FY ’22 (unchanged).

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RAUTE - LOW PROFITABILITY, HIGH ORDERS

29.04.2022 - 10.00 | Earnings Flash

Raute’s Q1 revenue and order intake were above our estimates, however inflation
had a larger negative effect than we had expected as EBIT clearly missed our
estimate.

Read more

 * Q1 revenue grew by 67% y/y and was EUR 41.3m, compared to our EUR 34.0m
   estimate. Russian revenue amounted to EUR 14m, compared to our EUR 12m
   estimate.
 * EBIT came in at EUR -1.5m, compared to our EUR 0.2m estimate. Inflation had a
   significant negative effect on the results.
 * Order intake amounted to EUR 36m during the quarter, compared to our EUR 29m
   estimate. The figure does not include any major mill projects. Project orders
   were EUR 16m vs our EUR 14m estimate. Service orders were EUR 20m vs our EUR
   15m estimate. Especially North American orders, at EUR 15m, were high and
   topped our EUR 7m estimate.
 * Order book stood at EUR 152m at the end of Q1, of which EUR 78m is
   attributable to Russia.

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VAISALA - EXCELLENT START FOR THE YEAR 2022

29.04.2022 - 09.55 | Earnings Flash

Vaisala’s Q1 result topped our expectations clearly. Both BUs saw double-digit
growth and solid order intake indicates the growth to continue.

Read more

•    Group results: Orders received were EUR 125m (18% y/y) and the order book
totaled EUR 168.5m (8% y/y). Net sales grew by 29% y/y to EUR 118.8m
(108.6m/104.5m Evli/cons.), driven by both BUs. Growth scaled nicely, and EBIT
amounted to EUR 17.5m (9.6m/10.1m Evli/cons.), implying a 14.8% margin. 
•    Industrial Measurements (IM): Orders received increased by 19% to EUR 54.7m
while the order book stood at EUR 35.1m (41% y/y). Order intake was strong in
industrial instruments and life science. IM saw a 34% y/y growth, with net sales
totaling EUR 53.1m (Evli: 49.1m). The topline growth was driven by all IM’s
segments. Operating profit was EUR 14.6m, 27.5% of net sales. Increased fixed
costs affected EBIT negatively.
•    Weather & Environment (W&E): Orders received increased by 17% y/y to EUR
70.3m. The order book was strong and grew by 2% y/y to EUR 133.4m. Order intake
grew in renewable energy and aviation while ground transportation and
meteorology decreased y/y. W&E delivered very strong growth of 26% y/y in Q1,
net sales totaling EUR 65.7m, beating our estimates (Evli: 59.5m). Supported by
~50% gross margin EBIT amounted to EUR 2.9m, implying a 4.4% margin.
•    2022 guidance unchanged: Net sales between EUR 465–495m and EBIT between
EUR 55–70m.
•    Market outlook: Markets for high-end industrial instruments, life science,
power industry, and liquid measurements are expected to continue to grow while
meteorology and ground transportation are expected to be stable. Aviation market
is expected to recover towards pre-pandemic level. Renewable energy market is
expected to continue to grow.

Open report


EXEL COMPOSITES - PROFITABILITY ABOVE ESTIMATES

29.04.2022 - 09.30 | Earnings Flash

Exel’s Q1 report showed the company is making progress in the US as the unit was
back to black. Exel’s adjusted operating margin was considerably above our
estimate even though there were certain other factors, namely product mix and
higher variable costs, which negatively affected profit.

Read more

 * Q1 revenue grew by 10.3% y/y and landed at EUR 34.2m, compared to the EUR
   37.1m/33.9m Evli/consensus estimates. Growth stemmed from Europe and North
   America. The virus situation in China led to a revenue decline in the
   Asia-Pacific region.
 * Wind power amounted to EUR 6.8m, compared to our EUR 8.3m estimate, while
   Buildings and infrastructure was EUR 7.7m vs our EUR 8.5m estimate. Equipment
   and other industries came in at EUR 7.4m vs our EUR 7.1m estimate.
 * Adjusted EBIT was EUR 2.2m vs the EUR 1.7m/1.4m Evli/consensus estimates. The
   US unit no longer had a negative impact as employee turnover has decreased
   and production yield has improved. Product mix as well as higher raw
   material, energy and logistics costs had a negative impact on profitability,
   but Exel continues to adjust sales prices to catch up with costs.
 * Order intake amounted to EUR 37.6m, down by 10.5% y/y.
 * The war has not so far limited raw material availability from Exel’s
   perspective.
 * Exel guides revenue in 2022 to be at last year’s level and adjusted operating
   profit to increase compared to 2021 (unchanged).

Open report


COMPANY UPDATE - CONTINUES TO SURPRISE POSITIVELY

29.04.2022 - 09.30 | Company update

CapMan reported Q1 earnings clearly above our and consensus estimates. Despite
current market uncertainty, we still see a good outlook for continued earnings
growth. We retain our BUY-rating with a TP of EUR 3.4 (3.2).

Read more

Record-level earnings in Q1 driven by investment returns
CapMan reported record-level Q1 earnings aided by strong investment returns.
Turnover amounted to EUR 14.2m (EUR 19.6m/17.2m Evli/cons.) and EBIT to EUR
18.9m (EUR 10.7m/4.1m Evli/cons.). Despite the market uncertainty FV changes
were at EUR 14.7m (Evli EUR 4.0m). No notable weakness was seen in any of the
operating segments. Capital under management grew well to EUR 4.75bn, up some
5.2% q/q and 22.1% y/y. CapMan reported carried interest from the NRE I -fund.

Expectations for 2022 remain good across the board
We have revised our estimates upwards based on the strong Q1 and better than
expected outlook for investment returns. We now expect an operating profit of
EUR 61.8m (51.6m) in 2022. Headwind from the on-going war in Russia does not
appear to have materialized in any notable way for CapMan apart from the
write-downs of the remaining fund holdings and receivables in Q1. In the
short-term investment returns are still under some uncertainty, while a
deterioration of investor sentiment could have a longer-term impact through
current fundraising projects. With the catch-up in NRE I our carry expectations
are more strongly set for H2, with the Growth Equity fund also approaching
carry. Growth in capital under management is providing good support for the
recurring fee-based revenues and we expect CapMan to reach a EUR 10m+ quarterly
management fee level in 2022.

BUY with a target price of EUR 3.4 (3.2)
Although there clearly is some market uncertainty present, the expected impact
currently does not appear too be considerable. With our raised estimates, in no
way challenging earnings multiples, and healthy dividend yields, CapMan in our
view remains an attractive investment case. We raise our TP to EUR 3.4 (3.2) and
retain our BUY-rating.

Open report


CONSTI - SOME SOFTNESS IN GROWTH

29.04.2022 - 09.00 | Earnings Flash

Consti's net sales in Q1 amounted to EUR 59.8m, slightly below our and consensus
estimates (EUR 63.3m/64.4m Evli/cons.), with growth of 0.9% y/y. EBIT amounted
to EUR 0.4m, slightly above our estimates and in line with consensus (EUR
0.0m/0.4m Evli/cons.). Guidance reiterated: operating result in 2022 is expected
to be EUR 9-13m.

Read more

 * Net sales in Q1 were EUR 59.8m (EUR 59.3m in Q1/21), slightly below our and
   consensus estimates (EUR 63.3m/64.4m Evli/Cons.). Sales grew 0.9% y/y.
 * Operating profit in Q1 amounted to EUR 0.4m (EUR 0.1m in Q1/21), slightly
   above our estimates and in line with consensus (EUR 0.0m/0.4m Evli/cons.), at
   a margin of 0.6%.
 * The increase in construction materials prices had a somewhat higher impact
   than in the comparison period, COVID also had an impact primarily through
   increased sick leaves.
 * EPS in Q4 amounted to EUR 0.01 (EUR -0.02 in Q1/21), slightly below our
   estimates and in line with consensus (EUR -0.03/0.01 Evli/cons.).
 * The order backlog in Q1 was EUR 205.1m (EUR 196.5m in Q1/21), up by 4.4% y/y.
   Order intake was EUR 37.6m in Q1 (Q1/21: EUR 69.8m).
 * Free cash flow amounted to EUR -0.8m (Q1/21: EUR -2.9m).
 * Guidance for 2022 (reiterated): Operating profit is expected to be between
   EUR 9-13m.

Open report


VERKKOKAUPPA.COM - NOT THE TIME TO JUMP IN YET

29.04.2022 - 08.40 | Company update

The market environment continued challenging and Verkkokauppa.com’s Q1 sales
declined mainly driven by the consumer and export segments. With the company’s
valuation stretched, we retain our HOLD rating and adjust TP to EUR 4.3 (4.7).

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EBIT fell short of expectations
Verkkokauppa.com’s Q1 net sales decreased by 6.9% y/y to EUR 124.8m beating our
expectations (Evli: EUR 120.1m). As expected, the drivers behind the decline
were the poor performance of core categories in the consumer segment as well as
the exports segment. The company ended exports to Russia and the segment
declined by ~30% y/y in Q1. Though market environment increased the price
competition which correspondingly reduced the gross margin to 15.4%. In
addition, the sales mix within core categories harmed the gross margin. Fixed
costs saw an increase due to personnel investments and inflationary pressures in
the other costs. The combination of lower gross margin and increased fixed costs
downgraded adj. EBIT stronger than we expected to EUR 0.9m (Evli: EUR 2.1m),
implying an adj. EBIT margin of 0.7%. Poor profitability pressed the bottom line
near zero and EPS amounted to EUR 0.00 (Evli: EUR 0.03).

Evolving categories performed well
While core categories saw a decline of 7.9% y/y, the sales of higher-margin
evolving categories evolved, and the product segment grew by 10.2% y/y,
representing 12.4% of total Q1 sales. The growth of the evolving categories was
driven by toys, baby & family, sports equipment, and luggage product categories.
In Q1, online sales decreased by 4.8% y/y following lower total sales and
represented 63 % of the total sales. The consumer segment represented 68% of
total sales while with sales growth of 10.4% B2B segment was 26% of total sales.
With Russian exports ended, the export segment represented only 5% of total
sales.

Growth requires a recovery of the consumer segment
Although, evolving categories and B2B delivered double-digit sales growth in Q1,
in order to achieve topline growth, Verkkokauppa.com needs the consumer segment
to recover. Consumer trust in Finland further decreased in April which reflect
in the company’s demand explicitly. The outlook for H2 is still blurred and it
might take a while for a recovery of demand for durable goods. The company noted
that it sees inflationary pressures stemming partly from personnel investment
but increasingly from Verkkokauppa.com’s service providers. Logistics costs are
set to rise, but on the other hand, commissioning of automated warehouse offset
increased costs somewhat. The company also invested in its IT capabilities by
recruiting ~10 new employees which increased the personnel costs in Q1. We
expect 22E fixed costs to increase to 12.6% of net sales. We also expect
material costs to increase due to global supply chain problems and inflationary
pressures.

HOLD with a target price of 4.3 (4.7)
We revised our short-term estimates, reflecting increased cost pressures,
uncertainty, and low visibility of H2’22. With the consumer segment’s poor
performance in H1 and Q3, we expect Verkkokauppa.com‘s 22E revenue to decrease
by 2.4% y/y to EUR 560.8m. Driven by increased fixed costs and low volumes, we
expect EBIT to be near the lower bound of the company’s guidance, at EUR 12.7m
(2.3% margin). In our estimates, the company faces topline growth of 6.5% and
8.3% during 2023-24. Driven by scalability and investment into efficiency, we
expect the company to report EBIT margins of 3.4% and 4.1% during 2023-24.
Furthermore, in Q2 we expect a good performance of evolving categories to soften
the decline of consumer electronics. We also expect the B2B segment to continue
double-digit revenue growth while expecting the export segment to decrease
significantly due to the end of exports to Russia. We expect the Q2 topline to
decrease by 5.2% y/y to EUR 123.7m. We expect Q2’22 gross margin (16.7%) to
improve q/q but be below that of the comparison period. Q/q improvement is
driven by an increased share of evolving categories. Our Q2 EBIT estimate lands
at EUR 2.4m (2% margin). With our revised 2022 estimates, the company trades
with a premium to its peers. With the EV/EBIT multiple taking balance sheet into
account, Verkkokauppa.com’s valuation starts to seem moderate in 2023 (23E
EV/EBIT of 8.6x), but we find no reason to hurry as long as the consumer market
environment seem uncertain. With Verkkokauppa.com's valuation stretched and
uncertainty concerning the near future, we retain our HOLD rating and adjust TP
to EUR 4.3 (4.7).

Open report


SRV - FROM ONE CHALLENGE TO ANOTHER

29.04.2022 - 08.30 | Company update

Main points in SRV’s Q1 report related to the write-downs of holdings relating
to Russia and Fennovoima and the program to strengthen the financial position.
Operationally, SRV fared rather decently. We lower our TP to EUR 0.35 (0.54) and
retain our HOLD-rating.

Read more

Write-downs on essentially all holdings related to Russia
SRV reported its Q1 results, with the main topic clearly being the write-downs
to its operations in Russia and the announced program to strengthen the balance
sheet. Operationally, Q1 was slightly better than expected. Construction revenue
amounted to EUR 175.2m (Evli 186.7m) and operative operating profit 6.3m (Evli
EUR 5.2m). The Group operating profit was clearly negative, at EUR -85.7m, as
SRV wrote-down essentially all of its holdings in Russia and the Fennovoima
project. The order backlog was at EUR 858m in Q1, down 19% y/y. SRV however says
that it has 1.4bn worth of won contracts not yet in the order backlog.

Initiated program to strengthen balance sheet
SRV initiated a program to strengthen its balance sheet (illustrated in Figure 1
of this report), seeking to increase equity by around EUR 100m and reduce IB
net-debt by the same amount, due to the impact of the write-downs on SRV’s
equity and gearing. Operationally, we have made no significant changes to our
estimates, expecting revenue of EUR 877.8m and operative operating profit of EUR
22.9m. The uncertainty relating to material prices and availability has
increased due to the war in Ukraine, with some more bulk type construction
material such as steel used in reinforcing concrete in particular being
affected. So far, the impact does not appear to have limited SRV’s abilities to
run current operations.

HOLD with a target price of EUR 0.35 (0.54)
Although SRV’s Russian assets still hold some value, due to the current
uncertainty valuation relies primarily on construction operations. On 2022e
EV/EBIT (using operative operating profit), SRV trades at 14.6x. We lower our TP
to EUR 0.35 (0.54) and retain our hold rating. We will account for the impact of
the financing program once details are finalized.

Open report


SOLTEQ - STEADILY REALIZING POTENTIAL

29.04.2022 - 08.15 | Company update

Solteq’s Q1 figures were well in line with expectations. Solteq in our view is
continuing to steadily realize its scalability potential and we expect
double-digit growth in 2022. We retain our BUY-rating and TP of EUR 5.0.

Read more

Q1 well in line with expectations
Solteq reported Q1 result well in line with our expectations. Net sales were EUR
19.2m (Evli EUR 18.9m), with growth of 10.7%. Roughly a third of the growth was
organic. The operating profit and adj. operating profit in Q1 amounted to EUR
1.4m and 1.6m respectively (Evli EUR 1.5m/1.5m). Solteq Software’s and Solteq
Digital’s y/y growth and adj. EBIT figures were 5.6%/19.7% and EUR 1.5m/0.1m
respectively, with both segments faring quite as expected. Solteq reiterated its
guidance, expecting group revenue to grow clearly and the operating profit to
improve.

Double-digit growth seen in 2022
We have made essentially no changes to our top-line and bottom-line figures. We
expect revenue to grow 11.6% y/y in 2022e. Our growth estimates assume continued
modest growth in Solteq Digital and over 20% growth in Solteq Software, in line
with the long-term segment targets of over 5% and 20% growth. Solteq Software’s
growth is clearly aided by the acquisition of Enerity Solutions, but we see
organic growth picking up through good demand and ramp-up of recurring revenue.
We expect EBIT to improve to EUR 7.7m (2021: 7.1m) through slight gains in both
segments. We expect Solteq Digital’s margins to remain steady in the coming
years. For Solteq Software we expect the scalability potential to start to show
in the coming years.

BUY with a target price of EUR 5.0
Solteq’s valuation is currently slightly below the IT-services peer median,
which in our view is unjustified given the healthy growth and profitability
trend and expectations and increasing share of recurring revenue. We value
Solteq at ~20x 2022e P/E. Our target price remains EUR 5.0 and rating BUY.

Open report


FINNAIR - WEATHERING ANOTHER MAJOR BLOW

28.04.2022 - 09.35 | Company update

The Q1 report didn’t contain many surprises, but we make some upgrades to our
estimates as Finnair may be able to maneuver the situation a bit better than we
expected.

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Network pivots to West and South Asia

Finnair’s EUR 400m Q1 revenue and EUR -133m adj. EBIT matched the respective EUR
397m/391m and EUR -128m/-141m Evli/cons. estimates. Air travel recovers and
Omicron caused only a brief but sharp dip in volume. Finnair sees the ratio of
bookings relative to capacity now above the pre-pandemic levels as available
capacity has been reduced. Major North Asian hubs such as Tokyo, Seoul and
Shanghai will remain on the schedule, but the Russian airspace closure will
limit possibilities to smaller North Asian cities. South Asia’s weight will
increase as it supports transfer flights to the US and hence Finnair’s network
will also pivot to West, where demand is now robust.

Volume outlook prompts us to raise estimates

We raise our estimates as our previous view on volumes seems a bit low in the
light of Finnair’s comments on capacity over the summer (we assume some 60-70%
load factors for Q2 and Q3). Finnair has already signed leases and the comments
on them indicate such deals are now profitable when many Western airlines have
need for additional capacity. These can add other operating income some EUR
10-100m annually. Finnair also looks for EUR 60m in further permanent cost
savings. The network adjustments, fleet redeployments (including potential
aircraft sales) and cost measures didn’t come as a surprise, although these may
help Finnair guard profitability better than we initially expected. We upgrade
our revenue estimates by more than 10% while we also revise our EBIT estimates
up a bit, but there remains a lot of uncertainty around volumes and costs.

Finnair will come through, but upside is still not evident

The EUR 400m hybrid between the State and Finnair will convert to a capital loan
and thus supports equity. In our view high demand helps Finnair to successfully
maneuver the challenges, but medium to long-term profitability potential remains
unclear in the current high inflation environment. Finnair is valued a bit below
14x EV/EBIT on our FY ’24 estimates, still not a low level although our FY ’23
EBIT estimate could prove too conservative. We retain our EUR 0.43 TP; our
rating is now HOLD (SELL).

Open report


SRV - WRITE-DOWNS BURDENED EARNINGS

28.04.2022 - 09.30 | Earnings Flash

SRV's net sales in Q1 amounted to EUR 190.7m, quite in line with our consensus
estimates (EUR 186.7m/179.0m Evli/cons.). Operative operating profit amounted to
EUR 4.9m, above our estimates (EUR 3.2m Evli). EBIT was significantly burdened
by write-downs relating to SRV’s holdings in Russia and amounted to EUR -85.7m.

Read more

 * Revenue in Q1 was EUR 190.7m (EUR 187.1m in Q1/21), quite in line with our
   and consensus estimates (EUR 186.7m/179.0m Evli/Cons.). Growth was 2% y/y.
 * Operating profit in Q1 amounted to EUR -85.7m (EUR 5.2m in Q1/21), below our
   estimates and consensus estimates (EUR 3.2m/2.2m Evli/cons.), at a margin of
   -44.9%. SRV wrote-down the value of essentially all of its holdings in
   Russia, which had a clear negative affect on EBIT. Operative operating profit
   amounted to EUR 4.9m, above our estimate of EUR 3.2m.
 * EPS in Q1 amounted to EUR -0.51 (EUR 0.00 in Q1/21), clearly below our
   estimates and consensus estimates (EUR 0.00/0.00 Evli/cons.).
 * The order backlog amounted to EUR 858m, down 19.1% y/y.
 * Construction revenue in Q1 was EUR 175.2m vs. EUR 186.7m Evli. Operative
   operating profit in Q1 amounted to EUR 6.3m vs. EUR 5.2m Evli. 
 * Investments revenue in Q1 was EUR 1.1m vs. EUR 1.1m Evli. Operative operating
   profit in Q1 amounted to EUR -105.4m vs. EUR -1.0m Evli. 
 * Other operations and elim. revenue in Q1 was EUR 14.4m vs. EUR -1.1m Evli.
   Operative operating profit in Q1 amounted to EUR 13.4m vs. EUR -1.0m Evli. 
 * Guidance for 2022 (reiterated): Revenue is estimated to be EUR 800-950m and
   the operative operating profit is expected to improve compared with 2021

Open report


SOLTEQ - WELL IN LINE WITH EXPECTATIONS

28.04.2022 - 09.00 | Earnings Flash

Solteq’s Q1 was in line with our expectations, with revenue at EUR 19.2m (Evli
EUR 18.9m) and adj. EBIT at EUR 1.6m (Evli EUR 1.5m). Guidance for 2022
reiterated: group revenue is expected to grow clearly and the operating profit
to improve.

Read more

 * Net sales in Q1 were EUR 19.2m (EUR 17.4m in Q1/21), in line with our
   estimates (Evli EUR 18.9m). Growth in Q1 amounted to 10.7% y/y, of which
   approximately a third was organic growth. 
 * The operating profit and adj. operating profit in Q1 amounted to EUR 1.4m and
   1.6m respectively (EUR 2.2m/2.3m in Q1/21), in line with our estimates (Evli
   EUR 1.5m/1.5m). 
 * Solteq Digital: revenue in Q1 amounted to EUR 11.8m (Q1/21: EUR 11.2m) vs.
   Evli EUR 12.0m. Growth amounted to 5.6%. The adj. EBIT was EUR 1.5m (Q1/21:
   EUR 1.4m) vs. Evli EUR 1.5m. Demand in key areas, such as digital business
   and commerce solutions, is expected to remain good during the on-going
   quarter. 
 * Solteq Software: Revenue in Q1 amounted to EUR 7.4m (Q1/21: EUR 6.2m) vs.
   Evli EUR 6.9m. The adj. EBIT was EUR 0.1m (Q1/21: EUR 0.9m) vs. Evli EUR
   0.0m. Growth was 19.7%. The business outlook is expected to remain positive.
 * Guidance for 2022 (reiterated): group revenue is expected to grow clearly and
   operating profit to improve.

Open report


CAPMAN - INVESTMENT RETURNS POSITIVE SURPRISE

28.04.2022 - 08.30 | Earnings Flash

CapMan's turnover in Q1 amounted to EUR 14.2m, below our estimates and below
consensus (EUR 19.6m/17.2m Evli/cons.). EBIT amounted to EUR 18.9m, clearly
above our estimates and consensus estimates (EUR 10.7m/4.1m Evli/cons.). Pre-Q1
concerns relating to investment returns were unwarranted, with stellar FV
changes of EUR +14.7m

Read more

 * Turnover in Q1 was EUR 14.2m (EUR 11.3m in Q1/21), below our estimates and
   consensus estimates (EUR 19.6m/17.2m Evli/Cons.). Growth in Q1 amounted to
   26% y/y.
 * Operating profit in Q1 amounted to EUR 18.9m (EUR 10.1m in Q1/21), clearly
   above our estimates and consensus estimates (EUR 10.7m/4.1m Evli/cons.), at a
   margin of 132.8%. Compared with our estimates, FV changes were significantly
   higher (14.7m/4.0m act./Evli), carried interest lower (6.5m/1.3m act./Evli).
 * EPS in Q1 amounted to EUR 0.09 (EUR 0.05 in Q1/21), above our estimates and
   consensus estimates (EUR 0.05/0.02 Evli/cons.).
 * Management Company business turnover in Q1 was EUR 11.7m vs. EUR 17.3m Evli.
   Operating profit in Q1 amounted to EUR 4.4m vs. EUR 7.2m Evli.
 * Investment business revenue in Q1 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q1 amounted to EUR 14.5m vs. EUR 3.8m Evli.
 * Services business revenue in Q1 was EUR 2.5m vs. EUR 2.3m Evli. Operating
   profit in Q1 amounted to EUR 1.4m vs. EUR 1.2m Evli.
 * Capital under management by the end of Q1 was EUR 4.75bn (Q1/21: EUR 3.9bn).
   Real estate funds: EUR 3.2bn, private equity & credit funds: EUR 1.1bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.1bn.

Open report


VERKKOKAUPPA.COM - CHALLENGING QUARTER

28.04.2022 - 08.20 | Earnings Flash

Verkkokauppa.com’s Q1 topline topped, but EBIT fell short of our expectations as
well as consensus estimates. Volumes suffered from a weak demand stemming from
lower consumer trust.

Read more

•    Group result: Q1 revenue declined by 6.9% y/y to EUR 124.8m (EUR
120.1m/120.1m Evli/cons.) driven by the soft performance of the consumer
segment. A challenging environment led the market to fierce price competition
which can be seen in a drop in margins. Sales mix had also a negative impact on
gross margin. Gross margin decreased from the comparison period to 15.4% (Q1’21:
16.2%). Lower gross margin, poor scalability through low volumes, and higher
transportation costs had a negative impact on profitability, adj. EBIT totaling
EUR 0.9m (EUR 2.1m/2.9m Evli/cons.), reflecting an adj. EBIT margin of 0.7%.
•    Online sales represented 63% (Q1’21: 64%) of total sales while the main
categories were 87.6% (Q1’21: 89.5%) of total sales.
•    Consumer segment: Consumer segment suffered from a soft market environment
mainly driven by consumer electronics, and the segment declined clearly from the
comparison period. Consumer segment represented 68% of total sales (Q1’21: 72%).
However, evolving categories saw a 10.2% y/y growth during Q1, driven by sports,
kid’s supplies, bags & traveling, and toys.
•    B2B segment: B2B performed well and grew by 12% y/y, representing 26% of
total sales (Q1’21: 22%).
•    Exports segment: end of Russia exports had a negative impact (-30.5% y/y)
on exports that represented only 5% of total sales.
•    FY’22 guidance (revised on March 23rd): net sales between EUR 530-590m and
EBIT between EUR 12-19m.

Open report


DETECTION TECHNOLOGY - THE FOCUS SHIFTS TOWARDS H2

28.04.2022 - 08.10 | Company update

DT’s supply chain issues continued, and the company’s Q1 result fell short of
our expectations. IBU delivered strong topline growth while SBU’s and MBU’s
growth was more moderate. We retain our HOLD rating and TP of EUR 22.5.

Read more

IBU grew very strongly
In Q1, IBU faced a revenue growth of 45.2% y/y, the BU’s topline totaling EUR
3.5m (Evli: EUR 2.9m). The growth was driven by all IBU’s main segments: imaging
solutions for the food, pharmaceutical, and mining industries. The BU was forced
to postpone some of its deliveries due to low component availability. MBU’s
growth drivers remained unchanged: Q1 revenue growth was mainly driven by CT
applications in both developing and developed countries. Lockdowns in China and
low component availability slowed down the development of MBU’s sales. MBU grew
by 4.5% y/y to EUR 10.5m (Evli: EUR 10.9m). SBU’s Q1 revenue amounted to EUR
6.3m and the growth of 7.5% y/y was mainly driven by non-aviation applications.
In total, group net sales grew by 10.9% y/y to EUR 20.3m (Evli: EUR 21.1m). 

Increased R&D investments and material costs cut margins
DT invested more heavily into R&D to mitigate the impacts of the component
shortage. R&D costs were 14.5% of net sales in Q1 (Q1’21: 13.1%). In addition,
component purchases made in spot markets increased DT’s material costs somewhat.
Q1 EBIT faced a slight improvement from the comparison period and amounted to
EUR 1.5m (7.4% margin). Earnings per share amounted to EUR 0.09 (Evli: EUR
0.08). As soon as the component availability improves, either through the
product modernization program or increase of market supply, we expect the
scalability to kick in. In history, DT has generated EBIT margins around 20%,
but we find those levels far fetch nowadays as, at that time, the organization
was quite thin compared to today. Our 25E EBIT margin estimate is ~17%.

The demand for detectors will continue strong
The demand DT faces is strong, and all factors indicate the trend to continue.
With new order allocations, the TSA’s CT upgrade program has seen progression.
However, in our understanding, the topline impact in 2022 is more moderate while
most of the orders will be delivered in the coming years. The component
availability is still low and a significant part of Q1 deliveries was postponed.
In Q1, DT focused on the modification of its product portfolio so that the most
rarely available components can be replaced by the components with more reliable
availability. According to the company, the program starts to impact the figures
in early Q3 and increasingly in Q4. With the program, the company achieves
better availability and more reliable deliveries as well as the need of
purchasing less spot-priced components. With the component availability
improving in H2 through the product modification program, we expect the strong
demand to actualize in H2.

HOLD with a target price of EUR 22.5
We slightly upgraded our topline estimates reflecting strong outlook in H2’22
while our 22E EBIT estimate saw only a minor negative revision due to increased
cost pressures. In 2022, we expect group revenue to grow by 14.7% y/y to EUR
103m and EBIT to amount to EUR 14.8m (14.4% margin). In Q2, we expect, in line
with DT’s outlook, MBU to face a slight decline of 2.7% y/y, net sales totaling
EUR 13.2m. In our estimates, SBU and IBU will grow more strongly. SBU’s Q2
revenue amounts to EUR 8.8m, representing a growth of 27.9% y/y while IBU also
sees strong growth of 33.8% y/y, net sales totaling EUR 4.1m. Group level Q2
topline amounts to EUR 26.1m (+11% y/y). Driven by increased material costs and
R&D investments, we expect OPEX to grow and EBIT to amount to EUR 3.4m (13%
margin) in Q2. DT’s valuation appears again quite elevated. With our 2022
estimates, the company trades with a premium to its peers, but in 2023 DT’s
valuation drops near the peer group. In our view, DT’s business still faces
short-term uncertainty given low component availability and lockdowns in China,
country that is crucial to DT in terms of supply chain, production, and sales.
We retain our HOLD rating and TP of EUR 22.5.


Open report


DETECTION TECHNOLOGY - GOOD GROWTH, SOME SALES WERE POSTPONED

27.04.2022 - 09.50 | Earnings Flash

DT’s Q1 result fell short of our expectations. All BUs grew, and total net sales
experienced double-digit growth. The component shortage increasingly limited the
growth, and part of the sales were postponed in all DT’s BUs.

Read more

 * Group results: Q1 net sales grew by 10.9% y/y to EUR 20.3m (EUR 21.1m/21.7m
   Evli/cons.) driven by all DT’s business units. Operating profit improved and
   grew by 9% y/y to EUR 1.5m (EUR 1.9m/2.1m Evli/cons.), indicating an EBIT
   margin of 7.4%. Soft scalability was driven by increased material costs and
   stronger investments into R&D to tackle the component shortage. Operative
   cashflow was down 39% y/y, totaling EUR 0.7m. R&D costs were 14.5% of net
   sales (Q1’21: 13.1%).
 * Medical (MBU): medical segment grew by 4.5% y/y to EUR 10.5m (Evli: EUR
   10.9m). Growth was strong in CT applications both in developing and developed
   countries.
 * Security (SBU): security experienced an increase of 7.5% y/y, net sales
   totaling EUR 6.3m (Evli: EUR 7.3m). Despite the demand for aviation solutions
   has increased significantly, Q1 growth was still driven by applications other
   than those used in the aviation sector.
 * Industrial (IBU): net sales came in strong and grew by 45.2% y/y to 3.5m
   (Evli: EUR 2.9m). The demand was strong in all IBU’s main segments: imaging
   solutions for the food, pharmaceutical, and mining industries.
 * The company had ongoing project to design product modifications to its entire
   product portfolio to mitigate the challenges in the availability of special
   materials and electronic components.
 * FY’22 outlook: IBU and SBU to show double-digit growth in Q2 and MBU to
   decrease in Q2. Group net sales to grow by double-digit figures in Q2, H1 and
   H2.
   

Open report


FINNAIR - NO BIG SURPRISES

27.04.2022 - 09.30 | Earnings Flash

Finnair’s Q1 results landed very close to estimates. The report does not appear
to contain any major surprises as demand continues to improve while Finnair also
works on deploying some of its current capacity through leases and sales.

Read more

 * Q1 revenue was EUR 399.8m, compared to the EUR 396.6m/390.9m Evli/consensus
   estimates.
 * Adjusted EBIT amounted to EUR -132.9m vs the EUR -128.2m/-141.4m
   Evli/consensus estimates.
 * Fuel costs were EUR 137m, compared to our EUR 115m estimate. Staff costs were
   EUR 102m vs our EUR 89m estimate. All other OPEX+D&A amounted to EUR 310m vs
   our EUR 333m estimate.
 * Cost per Available Seat Kilometer was 7.70 eurocents vs our estimate of 7.59
   eurocents.
 * Finnair sees Q2’22 adjusted EBIT around the same level as that of Q4’21 (EUR
   -65m). Finnair expects to deploy, in the summer season of Q2 and Q3 this
   year, approximately 70% of the ASK it did during the comparison period of
   2019. Leases to other airlines will raise the figure to almost 80%. The
   company also sees Q3 demand to be close to the pre-pandemic times in Europe,
   North America and South Asia (India, Singapore and Thailand).
 * Finnair seeks to find EUR 60m in additional permanent cost savings on top of
   the already achieved EUR 200m.

Open report


CONSTI - ELEVATED MATERIAL UNCERTAINTY

27.04.2022 - 09.30 | Preview

Consti reports its Q1 results on April 29th. Concerns relating to material
pricing and availability have increased due to Ukraine crisis, although Consti
through its renovation focus should be less affected than constructors. We
retain our BUY-rating with a TP of EUR 13.0 (14.0).

Read more

Growth picked up in H2/21 and is seen to continue
Consti reports its Q1 results on April 29th. Consti was able to turn to a
clearer track of growth during H2/2021 and our expectations are for the growth
to continue going into 2022. The growth was to a smaller part aided by the
acquisition of RA-Urakointi Oy, specializing in renovations of apartment and row
housing companies. The larger share of growth came from the improved order
intake, with the order backlog up 22.9% at the end of 2021, aided also by
Consti’s first projects within new construction. Profitability was to some
degree affected by rising material prices, with the impact slightly larger in
the latter half of the year.

Additional material pricing and availability concerns
The on-going Ukraine crisis has further affected the situation with construction
material prices and availability. The renovation market is less dependent on
larger quantities of construction materials and for instance the need for steel
construction parts, which have seen prices increase above previous year levels,
is low compared with new construction. Nonetheless, pricing and availability
issues are being seen in areas that also affect the renovation market. For now,
we have pre-emptively slightly lowered our Q1 profitability estimates. We see
pressure on profitability going forward and seek to gain further clarity on the
matter from the Q1 report.

BUY with a target price of EUR 13.0 (14.0)
With the uncertainty relating to material pricing and availability we slightly
lower our target price to EUR 13.0 (prev. EUR 14.0). We continue to see that
Consti through its renovation focus will be less affected but affected
nonetheless. We retain our BUY-rating.

Open report


SUOMINEN - IMPROVING AFTER WEAK Q1

27.04.2022 - 09.00 | Preview

Suominen reports Q1 results on May 4. We revise our H1’22 profitability
estimates down a bit due to higher raw materials and energy prices, yet we
continue to expect significant improvement for H2’22.

Read more

Q1 wasn’t great, but Q2 will already be much better

Suominen flagged in its Q4 report Q1 demand to be again on the low side as
certain customers, particularly in the US, still suffer from destocking. We see
no changes to this Q1 picture. Some logistics bottlenecks likely continue to
persist, although in general pandemic disruptions are subsiding. We also believe
wiping demand remains structurally above the pre-pandemic level, including in
categories like hard surface disinfecting wipes and moist toilet tissue, and
hence top line and margins should again improve after a muted Q1. Margins are to
rebound from the recent lows as Suominen has in the past few years tilted
towards mechanism pricing, which helps now when raw materials prices stay high.
Suominen has had no meaningful Russian sales or sourcing, but the war affects
the European plants’ profitability through higher energy costs. Suominen has
implemented an energy surcharge on all European products (there have been no
major energy issues in the US). This will not save Q1 results, but we understand
the customers have accepted the surcharge well and it supports margins from Q2
onwards.

We estimate significant profitability improvement for H2

We make only small estimate changes on an annual level. We now expect FY ‘22
revenue to top the record FY ’20 figure; we however estimate profitability to be
some EUR 20m below the respective figure especially due to muted H1. We revise
our Q1 EBITDA estimate to EUR 4.8m (prev. EUR 5.8m) as Suominen’s mechanism
pricing and energy surcharge lag the inflation seen early this year. We see
H1’22 EBITDA down by 57% y/y, however we estimate H2’22 EBITDA to increase by
92% y/y and 75% h/h.

Valuation is by no means challenging on our estimates

Suominen is valued 5.5x EV/EBITDA and 11x EV/EBIT on our FY ’22 estimates. In
our view these aren’t very high levels and would be down to about 4x and 6.5x in
FY ’23 if profitability continues to improve as we expect. We revise our TP down
to EUR 4 (5) as higher raw materials and energy prices have elevated uncertainty
around the estimates, but we retain our BUY rating.

Open report


INNOFACTOR - GROWTH PROGRESS STILL CHALLENGING

27.04.2022 - 08.15 | Company update

Innofactor’s revenue development in Q1 was weakened by increased absences due to
sickness, while profitability climbed back to rather healthy levels. Signs of
clear pick-up in growth remain limited but potential exists.

Read more

Revenue development affected by absences due to sickness
Innofactor’s Q1 results were two-fold. Revenue development was weaker than
expected, declining 1.5% y/y in comparable terms to EUR 17.0m (Evli EUR 17.7m).
Growth was affected by absences due to sickness as a result of the pandemic,
which approximately doubled in Q1 from the previous year, and revenue in Finland
and Sweden decreased. Despite the lower revenue profitability was still at a
fairly good level, with EBITDA of EUR 2.0m (Evli EUR 1.8m) and a corresponding
margin of 12.0%. The performance in Denmark and Norway was good according to
management. The order backlog grew only 3.5% to EUR 71.3m, but Innofactor has
received several significant orders not yet in the backlog and the growth could
as such have been better.

Slight growth and profitability improvement in 2022
Innofactor expects revenue to grow y/y and EBITDA to improve from EUR 7.5m in
2022. Growth continues to be somewhat challenging, although the impact of sick
leaves should reasonably decline going forward. Innofactor has had success in
recruitments, namely within younger talents, and the headcount turned to a very
slight growth. With minor estimates adjustments we now expect growth of 2.4% and
an EBITDA of EUR 8.4m (12.4% of sales). In the near-term, being able to improve
utilization rates could bring a boost to financials, while more rapid growth
would in our view require M&A activity.

BUY with a target price of EUR 1.6
With our estimates largely intact we retain our target price of EUR 1.6 and
BUY-rating. Innofactor’s growth outlook is currently admittedly rather
lack-luster, but the market situation remains good, and growth and profitability
improvement potential and rather healthy expected dividend yields support the
case.

Open report


VAISALA - EXPECTING A SOLID QUARTER

26.04.2022 - 11.25 | Preview

Vaisala reports its Q1 result on Friday, April 29th. We expect growth to
continue, but low component availability to restrict profitability improvement.
With our estimates intact, we retain our HOLD rating and TP of 41.0.

Read more

Vaisala faces strong demand in Q1
Vaisala reported strong order book in its Q4’21 financial bulletin. W&E’s order
book amounted to EUR 127m while IM’s order book was on a record level at EUR
33m. Q1 has typically been the quietest quarter for Vaisala, and we expect
topline to grow by 18.1% y/y to EUR 108.6m driven by a strong demand for IM’s
applications and W&E’s soft comparison period. In our estimates, W&E reports a
revenue of EUR 59.5m (+14% y/y) while after successful Q1 IM achieves a topline
of EUR 49.1m (+24% y/y), representing almost half of group net sales.

EBIT margin to remain flat
Despite ongoing component shortage, the company has been able to deliver all its
orders so far. We expect the company to continue component purchases from spot
markets and thereby material costs to stay at elevated level. However, the
company has transferred some increased material costs to consumer prices in
early 2022 and, hence, we expect gross and EBIT margin to remain approx. flat
compared to Q1’21. Our W&E Q1 EBIT estimate lands to EUR -1.5m while we expect
IM to report an EBIT of EUR 11.4m. In total, our Q1 EBIT estimate amounts to EUR
9.6m (8.8% margin).

HOLD with a target price of EUR 41.0
In our view, Vaisala’s valuation is quite elevated. Vaisala trades with 22E
EV/EBITDA and EV/EBIT multiples of 17.7x and 24.1x while its peer group is
valued with corresponding multiples of 16.2x and 18.3x. In short-term, we find
no reason for an upside in Vaisala’s valuation, but given solid earnings growth,
as a long-term investment, we find it reasonable to stay on Vaisala’s board
ahead of Q1 result. With our estimates intact, we retain our HOLD rating and TP
of EUR 41.0. 

Open report


RAUTE - FOCUS SHIFTS TO WESTERN MARKETS

26.04.2022 - 09.30 | Preview

Raute reports Q1 results on Apr 29. We continue to expect only break-even EBIT
for this year. In our view Europe and North America will now be Raute’s focus
markets.

Read more

Russia’s absence will be felt especially in the short-term

Raute will deliver its previously signed Russian orders to the extent feasible,
case by case, and the company will not sign any new Russian orders for now.
Raute has a staff of about 40 in Russia, but other than that no local assets.
Raute is therefore not precisely exiting Russia, however we believe the Russian
business will gradually shrink to zero and stay there for the foreseeable
future. Russia has historically been a very important market for Raute as orders
from the country averaged more than EUR 50m in recent years and there was good
momentum until the end of last year; the Russian order intake amounted to EUR
79m in FY ’21 and we had estimated a similar amount of Russian revenue for this
year. We cut this estimate down to some EUR 30m after the invasion. It remains
unclear where the figure will land in the end, but we now expect around EUR 130m
revenue for Raute vs the roughly EUR 175m estimate before the war.

Western markets’ strength is the best short-term remedy

In our view Europe and North America are the markets which could best help make
up the Russian shortfall in the short-term. These established markets have
historically belonged to the core of Raute’s strategy, and their order intakes
also picked up last year after a few slower years. These markets’ strength could
prove our short to medium term estimates too low. Latin America and Asia,
especially China, also have long-term potential. Raute’s competitive positioning
should in any case remain favorable, but we continue to see lots of uncertainty
around financial performance and hence it’s hard to view current valuation
particularly attractive.

We consider current valuation pretty much fair

In our view Raute’s financial profile hasn’t been altered much in the sense that
the company should still be able to achieve EUR 10m EBIT with some EUR 150m
revenue. Current valuation is cheap relative to this potential, but risks are
related to e.g. Western orders’ strength in the short and medium term. Raute is
now valued around 6x EV/EBITDA and 9x EV/EBIT on our FY ’23 estimates. We retain
our EUR 15 TP and HOLD rating.

Open report


INNOFACTOR - PROFITABILITY BACK ON TRACK

26.04.2022 - 09.30 | Earnings Flash

Innofactor’s Q1 results were slightly better than expected. Although net sales
of EUR 17.0m were below expectations (Evli EUR 17.8m), with sales having
decreased in Finland and Sweden due to increased sick leaves, profitability was
at good levels after some challenges during H2/21, with EBITDA amounting to EUR
2.0m (Evli EUR 1.8m).

Read more

 * Net sales in Q1 amounted to EUR 17.0m (EUR 17.8m in Q1/21), slightly below
   our estimates (Evli EUR 17.7m). Net sales in Q1 declined 4.7% y/y and 1.5% in
   comparable terms. Net sales increased in Norway and Denmark but decreased in
   Finland and Sweden, affected by increased sick leaves due to the pandemic.
 * EBITDA in Q1 was EUR 2.0m (EUR 2.1m in Q1/21, excl. Prime business
   divestment), slightly above our estimates (Evli EUR 1.8m), at a margin of
   12.0%. EBITDA was positive in all operating countries except in Sweden.
 * Operating profit in Q1 amounted to EUR 1.3m (EUR 1.3m in Q1/21, excl. Prime
   business divestment), above our estimates (Evli EUR 1.0m), at a margin of
   7.8%. 
 * Order backlog at EUR 71.3m, up 26.5% y/y. Innofactor received a handful of
   significant orders in Q1, for instance from the Finnish Ministry of Social
   Affairs and Health (approx. EUR 1.2m), the Housing Finance and Development
   Centre of Finland (approx. EUR 0.7m), Finnvera (approx. EUR 1.0m) and a
   Norwegian non-profit organization (EUR 1.2m).
 * Guidance for 2022 (reiterated): Innofactor’s net sales is expected to
   increase from 2021 (EUR 66.4m) and EBITDA is expected to increase from EUR
   7.5m, which would have been EBITDA without the proceeds of EUR 2.6m from the
   sale of the Prime business. 

Open report


CAPMAN - EXPECT A SOFTER START TO THE YEAR 

26.04.2022 - 08.00 | Preview

CapMan reports its Q1 results on April 28th. We expect rather good results but
have lowered our profitability estimates due to some expected softness in
investment returns and potential write-downs relating to Russia. We retain our
BUY-rating with a target price of EUR 3.2 (3.4)

Read more

Market environment seen to impact Q1
CapMan will report Q1 earnings on April 28th. With the on-going Ukraine crisis
and the impact on the market environment we expect some softness in the
earnings. We anticipate seeing lower investment returns q/q given the weaker
stock market development and resulting impact on valuation multiples. The direct
impacts on investment objects however appear to be limited. As a reminder,
CapMan has divested its market portfolio, which was a source of earnings
weakness in the early stages of the pandemic. CapMan wrote-down the goodwill
relating to its Russia business but still has some investments, commitments and
receivables relating to the operations. We have pre-emptively assumed that some
write-downs will be made. Our Q1 operating profit estimate is now EUR 10.7m
(prev. EUR 16.7m).

Still set for clear earnings improvements y/y
Our 2022e estimates are down by 14% following the aforementioned adjustments and
some further downward tweaks to our investment return estimates. Earnings are
still set to improve considerably y/y, aided by carried interest, with the NRE I
-fund expected to have entered carry during Q1. The uncertainty relating to the
amount of carry is very high and the Q1 report should add needed visibility. We
still see that CapMan is in a good position to achieve quarterly average
earnings levels of EUR 10m+ in the near-term.

BUY with a target price of EUR 3.2 (3.4)
We have as mentioned made some adjustments to our estimates and accordingly
finetune our target price to EUR 3.2 (prev. EUR 3.4). We retain our BUY-rating.
Valuation based on multiples is still not challenging (2022e P/E <10x) and
dividends continue to support the investment case.

Open report


SCANFIL - EARNINGS ARE TO IMPROVE

25.04.2022 - 09.30 | Company update

Scanfil’s profitability is set to improve over the course of the year despite
the still tight component market situation.

Read more

Profitability should improve throughout this year

Scanfil’s Q1 revenue grew by 20% y/y to EUR 197m, compared to the EUR 170/179m
Evli/cons. estimates, and was up by 10% y/y excluding the EUR 17m in transitory
spot purchases; inflation added around 2-3% to top line, hence volume growth
amounted to about 7%. Growth stemmed widely from all the five segments,
including also new customer accounts within Advanced Consumer Applications
(kitchen machines for professional as well as consumer use). The EUR 10.3m EBIT
was a bit above the EUR 9.2m/9.7m Evli/cons. estimates and the 5.3% margin
wasn’t a surprise. The margin would have been 5.7% without the spot purchases, a
decent figure but still well short of the 7% long-term potential as component
availability issues persisted.

M&A unlikely short-term as organic execution claims focus

Components will remain scarce at least until Q4, however Scanfil’s guidance and
comments imply there will be meaningful profitability improvement throughout
this year. Inflation isn’t a major issue for Scanfil, and neither is the war
likely to have any direct impact. The Chinese virus situation is probably the
most significant short-term risk as it could lead to local production halts, but
so far this hasn’t happened for Scanfil. Chinese demand also remains strong.
Scanfil’s inventory levels are still elevated as the company tries to manage
high customer demand and limited component availability. We estimate Scanfil to
touch EUR 800m top line already this year. Inorganic growth doesn’t now seem to
be that high on the agenda, but M&A could happen in North America or Asia within
the next 3-5 years.

Earnings growth is likely to continue next year as well

Scanfil’s valuation, 7.5x EV/EBITDA and 10x EV/EBIT on our FY ’22 estimates,
isn’t too demanding. We expect EBIT margin to remain a bit modest 5.8% this year
as component issues persist, however we see the margin improving to above 6% in
H2’22. We estimate 6.4% margin for FY ’23, and hence we expect Scanfil to reach
an above EUR 50m EBIT next year as we see growth continuing at an above 5%
annual rate from late ’22 onwards. FY ’23 multiples are therefore only around
6.5x EV/EBITDA and 8x EV/EBIT on our estimates. We retain our EUR 8 TP and BUY
rating.

Open report


SCANFIL - Q1 FIGURES TOPPED ESTIMATES

22.04.2022 - 08.30 | Earnings Flash

Scanfil’s Q1 top line continued to grow at a 20% annual rate while operating
margin remained decent at 5.3%. Relative profitability was therefore close to
estimates while the high revenue figure helped deliver a small earnings beat.

Read more

 * Scanfil Q1 revenue grew by 20.4% y/y and was EUR 196.6m vs the EUR
   170.0m/179.4m Evli/consensus estimates. Transient spot market component
   purchases amounted to about EUR 17m and excluding them revenue would have
   been EUR 179m.
 * Advanced Consumer Applications landed at EUR 55.0m, compared to our EUR 45.9m
   estimate, while Energy & Cleantech amounted to EUR 54.6m vs our EUR 45.5m
   estimate. Automation & Safety was EUR 42.6m vs our EUR 36.9m estimate.
 * Adjusted EBIT was EUR 10.3m, compared to the EUR 9.2m/9.7m Evli/consensus
   estimates. Component availability issues limited Q1 profitability.
   Profitability should improve throughout the year while spot market component
   purchases are to remain high at least in Q2 and Q3.
 * Scanfil guides FY ’22 revenue to be EUR 750-820m and adjusted EBIT EUR
   43-48m. The war hasn’t had any significant financial impact on Scanfil,
   likewise with the Chinese virus situation so far.

Open report


FINNAIR - FURTHER CHALLENGES UNDERMINE EBIT

21.04.2022 - 09.45 | Preview

Finnair reports Q1 results on Apr 27. The focus will be on the responses to the
change which alters the strategy’s viability; we view profitability potential
hard to gauge.

Read more

Finnair’s Asian strategy will now have to be reviewed

Q1 traffic was robust relative to expectations (the RPK metric was only 2% below
our estimate) despite the lag due to slow Asian openings. South Korea opened
only in the beginning of Q2, while Japan remains basically closed to foreigners
and according to our understanding is unlikely to open before H2. China was
previously set to open for H2, however even this conservative schedule may now
be in question considering the very strict local virus policies. Asian flight
volumes would thus remain subdued even without the closure of Russian airspace.
The Siberian flightpath is unlikely to open in the foreseeable future and
Finnair is revising its network plans in response to the fact that many Asian
routes will not be profitable due to the added costs.

We make some further estimate cuts

Finnair is in the process of leasing out some of its resources which it cannot
itself deploy under the circumstances. In our opinion some such deals, either
leases or sales, seem inevitable given the scale of the problem as the Asian
flights made more than 50% of Finnair’s pre-pandemic revenue. We cut our top
line estimates by some 10% at this point; in the long-term Finnair may be able
to employ some of its current idle capacity on new European and North American
routes, but there may still be need for additional revenue estimate cuts. We
revise our FY ’22 EBIT estimate to EUR -220m (prev. EUR -82m) and that for FY
’23 down to EUR 47m (prev. EUR 171m). Costs remain yet another issue as jet fuel
prices have continued to surge to new records.

Profitability potential remains highly uncertain for now

Finnair had EUR 1.7bn in cash at the end of last year; the financial position
and potential additional measures, be they leases or outright sales of aircraft,
should help the company manage through the extraordinary period of challenge.
Finnair was valued, before the war, in line with other carriers on FY ’23
estimates. It’s now very hard to say how Finnair’s next year will be like.
Finnair is valued roughly 15x EV/EBIT on our FY ’24 estimates, but this still
doesn’t seem like an attractive level. Our new TP is EUR 0.43 (0.60), and our
rating is now SELL (HOLD).

Open report


VERKKOKAUPPA.COM - EXPECTING SOFTNESS TO CONTINUE

20.04.2022 - 12.45 | Preview

Verkkokauppa.com publishes its Q1 result on April 28th. Transitory softness in
the consumer segment will restrict the company’s growth during H1 and Q3’22. We
retain our HOLD-rating and TP of EUR 4.7.

Read more

Early guidance revision
In mid of March, the company downgraded its FY’22 guidance. Now the company
guides a revenue of EUR 530-590m and an EBIT of EUR 12-19m, which implies a
decline in the earnings. Demand for consumer goods has been soft since Q4’21 and
Russia’s attack on Ukraine further lowered the consumer trust in Finland.
Increased consumption of services has also diminished the demand for durable
goods. In addition, the stop of Russian exports will cut approx. EUR 20m of
Verkkokauppa.com’s annual sales.

Soft market cuts growth opportunities
The company’s management noted that the market environment hasn’t changed since
the guidance revision. We expect the company to suffer from weak demand in H1
and Q3, but in our estimates, Verkkokauppa.com sees a clear upward drift in Q4
driven by a weak comparison period and improved demand in the consumer segment.
In Q1, we expect revenue to decrease by 10.4% y/y to EUR 120.1m due to the weak
performance of consumer and exports segments. Driven by increased price
competition, we expect softer gross margin to be the main driver of weak
profitability, an EBIT of EUR 2.1m (1.8% margin), alongside decreased net sales.


HOLD with a target price of EUR 4.7
Verkkokauppa.com’s peer groups’ valuation levels have continued the trend of
decline and we see the valuations as quite modest given their solid EPS growth
expectations; online-focused peers are now trading with 22-23E P/E and EV/EBIT
multiples of 14-12x and 14x-11x respectively while omnichannel peers trade with
corresponding multiples of 11-10x and 12-10x respectively. Meanwhile,
Verkkokauppa.com trades with 22-23E P/E and EV/EBIT multiples of 19-14x and
12-9x. With the current valuation elevated, we retain our HOLD-rating and TP of
EUR 4.7 ahead of the Q1.

Open report


DETECTION TECHNOLOGY - EXPECTING A CLEAR EBIT IMPROVEMENT

20.04.2022 - 11.50 | Preview

Detection Technology publishes its Q1 business review on April 27th. We expect
the underlying demand to remain strong, but component shortage to postpone some
deliveries also in Q1. We retain our HOLD-rating and adjust TP to EUR 22.5
(26.0).

Read more

Clear double-digit growth in expectations 
After great Q4’21, we expect DT to continue strong development in all its
business segments: in our estimates, MBU’s Q1 growth pace smoothens (7.8%) due
to low availability of components while we expect IBU (19.3%) and SBU (25.2%) to
grow significantly from the comparison period. We expect IBU’s freshly won
customers to generate new topline growth in Q1. SBU growth is mainly driven by
the recovery of the aviation segment. Q1 group topline increases by 15% y/y to
EUR 21.1m while EBIT also improves by 39% y/y, driven by increased net sales,
amounting to EUR 1.9m (9.2% margin). 


MBU to suffer the most from the component shortage 
In its Q4 review, DT noted that underlying demand remains strong, but low
component availability restricts growth, especially in the medical segment. In
our understanding, the availability of components used in industrial and partly
in security detectors isn’t as limited as in medical applications. In addition,
the war in Ukraine and the sanctions set for Russia have affected to
semiconductor sector through increased material and production costs. We,
however, remain to wait for the company’s comments on its supply chain
development before adjusting our estimates. 


HOLD with a target price of EUR 22.5 (26.0)
DT’s current valuation (22E EV/EBIT of 21x) appears quite elevated compared to
its peers (22E EV/EBIT of 17x) due to DT’s yet soft profitability. We now focus
on emphasizing DT’s 2023 potential as the current year’s development is
restricted by bottlenecks of the global supply chain, which we expect to ease
during 2023-24. With our new target price, 23E valuation drops near peer median
with DT’s earnings improvement. With the current valuation stretched compared to
peers, we retain our HOLD-rating and adjust our target price to EUR 22.5 (26.0).

Open report


MARIMEKKO - ISSUANCE OF NEW SHARES WITHOUT PAYMENT

13.04.2022 - 15.00 | Earnings Flash

Yesterday, the AGM approved the BoD’s dividend proposal and decided on a share
split with a ratio of 5:1. With our estimates intact, we update our target price
to EUR 15.8 (79) and retain HOLD-rating.

Read more

 * The AGM approved the Board of Directors’ proposal to distribute a regular
   dividend of EUR 1.60 per share plus an extraordinary dividend of EUR 2.00 per
   share to be paid for the financial year 2021.
 * At the same time, the AGM decided that new shares will be issued to the
   shareholders without payment in proportion to their holdings so that four new
   shares are issued for each share. In total, 32,519,336 new shares will be
   issued, increasing Marimekko’s total number of shares from 8.1m to 40.6m.
 * Split has no effect on Marimekko’s fair value and hence we have made no
   changes to our estimates. We update our target price to EUR 15.8 (79) and
   retain HOLD-rating.
 * Marimekko publishes its Q1 result on 13 May 2022.

Open report


ASPO - ESL CONTINUES TO SUPPORT EBIT

07.04.2022 - 09.30 | Company update

Aspo resumed guidance relatively fast due to ESL’s current strong positioning,
however much uncertainty remains around Telko’s performance in the coming few
quarters.

Read more

ESL’s market outlook remains very favorable for now

Aspo reinstated guidance after a month-long hiatus. The war necessitated its
withdrawal as the CIS countries generated a combined EUR 155m in FY ’21 revenue
for Telko and Leipurin. The situation causes uncertainty around their physical
operations, while the acceleration in inflation poses both risks and
opportunities for the raw material distribution businesses. ESL’s outlook has
however remained favorable, and we continue to expect EUR 29.9m EBIT for this
year. The dry bulk cargo market doesn’t seem to soften despite talks of Western
stagflation. Cargo volume outlook still appears robust while freight rates are
improving. In our view Aspo can now base its new EUR 27-34m EBIT guidance on
ESL’s strength, while uncertainty lingers especially around Telko in Russia and
Ukraine as well as the Leipurin Russian business.

We cut our Telko EBIT estimate by EUR 2.7m to EUR 7.4m

We revise our top line estimate for this year down from EUR 558m to EUR 541m.
Our EBIT estimate is down to EUR 32.4m from EUR 35.5m, and we also make some
downward revisions for the coming years, roughly to the tune of EUR 2m. It’s
unclear how much further ESL’s performance can improve in the short to medium
term, but the company continues to focus on its small vessel strategy as before
and is set to receive the new hybrid vessels in the coming years. Telko and
Leipurin have increasingly focused on Western markets in the past few years; the
Russian challenges will organically hasten this development, and Telko is also
likely to add some Western operations through M&A.

Telko could potentially drive upside later this year

Aspo is valued closer to 11x EV/EBIT on our FY ’22 estimates. Telko’s implied
value remains low while ESL shoulders a major part of estimated EBIT this year.
Aspo’s current valuation still reflects considerable caution and could turn out
to be too low if Telko manages to perform better than expected in the coming few
quarters. We believe the EUR 7m difference between the lower and upper points of
the guidance range is mostly due to Telko. We retain our EUR 8 TP; our new
rating is HOLD (BUY).

Open report


ADMINISTER - TIME TO ACCELERATE GROWTH

01.04.2022 - 09.00 | Company update

Administer reported H2 results and a gave a guidance that were well in line with
our expectations and we as such see no need to revise our estimates or views. We
retain our TP of EUR 4.7 and BUY-rating.

Read more

H2 well in line with expectations
Administer reported H2 results well in line with expectations. Revenue grew 3.2%
y/y to EUR 22.0m (Evli EUR 22.1m) driven by the acquisition of EmCe. EBITDA and
EBIT amounted to EUR 1.7m and EUR 0.3m respectively (Evli EUR 1.6m/0.4m).
Profitability was affected by the company’s investments into growth and
technological development. With the net result affected by IPO related expenses
and as such being clearly negative, the BoD proposed that no dividends be paid
for FY 2021 (Evli EUR 0.00).

Seeking to clearly pick up growth
Administer reiterated the earlier communicated outlook for 2022, expecting
revenue to grow to over EUR 51m and to achieve and EBITDA-margin of at least 8%.
With the H2 results and the guidance corresponding to our expectations, along
with no significant changes to our views on Administer’s potential, we make no
notable changes to our estimates. We expect 2022 revenue of EUR 52.1m and an
EBITDA-margin of 9.2%. Current estimate uncertainty mainly stems from growth
expected to be driven by acquisitions, with Administer seeing 5-10 acquisitions
being made during 2022. Near-term profitability improvements should mainly arise
from a lesser impact of challenges faced during 2021, with expectations of
measures to improve operational efficiency and synergies from acquisitions to
start to show from 2023 onwards.

BUY-rating with a target price of EUR 4.7
With our views and estimates essentially intact we retain our BUY-rating and
target price of EUR 4.7. On our estimates current valuation implies a 2022e
EV/sales of 0.7x, which in our view does not account for the improvement
potential, albeit we acknowledge that Administer has yet to prove its worth.

Open report


ADMINISTER - FIGURES AS EXPECTED

31.03.2022 - 10.00 | Earnings Flash

Administer’s H2 figures were well in line with our expectations, with revenue of
EUR 22.0m (Evli EUR 22.1m) and EBITA of EUR 1.3m (Evli EUR 1.3m). Administer
expects revenue in 2022 to grow to at least EUR 51m and an EBITDA-margin of at
least 8%. The BoD proposes that no dividend be paid for FY 2021 (Evli EUR 0.00).

Read more

 * Net sales in H2 amounted to EUR 22.0m (EUR 21.3m in H2/20), in line with our
   estimates (Evli EUR 22.1m). Net sales in H2 grew 3.2% y/y. Growth was mainly
   attributable to the acquisition of EmCe.
 * EBITDA and EBITA in H2 were EUR 1.7m (H2/20: EUR 2.9m) and EUR 1.3m (H2/20:
   EUR 2.6m) respectively, in line with our estimates (Evli EUR 1.6m/1.3m). The
   EBITA-margin amounted to 5.9%. Profitability was burdened by growth
   investments.
 * Operating profit in H2 amounted to EUR 0.3m (EUR 2.2m in H2/20), in line with
   our estimates (Evli EUR 0.4m).
 * During H2 Administer completed the acquisition of financial management
   software producer EmCe Solution Partner Oy and accounting firm Tilikamut Oy
   and its subsidiary Konnektor Oy. Administer has during Q1 announced two
   acquisitions, WaBuCo Financial Services Oy (2021 revenue EUR 0.9m) and the
   payroll services of Konjunktuuri Oy.
 * Guidance for 2022: Administer expects that its net sales will increase to at
   least EUR 51m and the EBITDA-margin to be at least 8%. The company further
   expects to make 5-10 acquisitions over the course of 2022.
 * Dividend proposal: Administer’s BoD proposes that no dividend be paid for FY
   2021 (Evli EUR 0.00).

Open report


VERKKOKAUPPA.COM - WEAK MARKET DECELERATES SALES DEVELOPMENT

25.03.2022 - 08.50 | Company update

Verkkokauppa.com downgraded its 2022 guidance. Now, the company expects revenue
of EUR 530-590m and adj. EBIT of EUR 12-19m. We retain our HOLD-rating and
adjust our TP to EUR 4.7 (6.0).

Read more

Weak market and war behind the guidance revision
Verkkokauppa.com downgraded its FY’22 guidance from expecting revenue of EUR
590-640m and adj. EBIT of EUR 19-25m to revenue of EUR 530-590m and adj. EBIT of
EUR 12-19m. The start of the year 2022 has been tough and consumer demand has
been lacking in durable goods. Russia’s military attack on Ukraine has further
decelerated consumer activity. Furthermore, Verkkokauppa.com decided to stop
export deliveries to Russia which in 2021 represented roughly EUR 20m, half of
the Exports segment’s sales. According to the company’s management, B2B segment
has continued its good performance, and in our understanding, the geopolitical
situation hasn’t affected the business. Softness in the Finnish consumer
electronics market has also infected the demand for evolving product categories,
but we expect the evolving categories to recover faster than the main
categories. The component shortage has continued and is expected to impact on
product availability throughout the year. The company’s management has indicated
that possible material cost increases could be shifted to consumer prices. If
the uncertainty diminishes during H1 or early H2’22 and consumer demand picks a
bit up, the guidance is, in our view, quite cautious.

Normalization of the demand in H2’22 seems uncertain
Before the profit warning, we expected H1’22 to be tough and the demand to
recover during H2’22, but now the recovery seems uncertain and H1’22 is clearly
weaker than we and markets were expecting. A wide guidance range also indicates
the uncertainty among Verkkokauppa.com’s management. In addition to uncertainty,
low attractivity of consumer goods is also explained by consumer demand’s shift
to services. Moreover, during the pandemic, consumers invested in expensive
electronics devices that drove strong sales development in that time.

We made significant downgrades to our estimates
As a result of the profit warning, we have downgraded our estimates. With the
exit of Russian exports, the company expects the Export segment not to recover
during 2022. Given the fact that B2B has performed well during 2022, the hardest
hit was taken by the consumer segment. Thus, we expect a double-digit decline
both in consumer and exports segments while B2B is expected to grow strongly
during H1’22. We expect consumer demand to start to recover during Q3 and the
topline to get back on a clear growth bath in Q4’22. In Q1’22 we expect net
sales to decline by 10.4% to EUR 120.1m, driven by weak consumer demand and the
end of Russian exports. In our estimates, Q1 operating profit is weak, totaling
EUR 2.1m (1.8% margin). Weaker profitability is driven by decreased revenue and
a relatively weak gross margin. 2021 full-year estimates lands to bit over the
midpoint of the guidance, revenue to EUR 565.1m and EBIT to EUR 15.8m (2.8%
margin). During 2023-24E, we expect Verkkokauppa.com’s topline to grow by 7.6%
and 8% respectively as well as the company to reach an EBIT margin of 3.4% and
3.8% respectively.

HOLD with a target price of EUR 4.7 (6.0)
Our 22E EBIT estimate was downgraded by some 28% and 22E EPS by some 24%, and we
find significant pressure to downgrade our target price after the company’s
profit warning. Currently, Verkkokauppa.com trades with 22-23E P/E multiples of
20-15x while with our current target price of EUR 6.0 the corresponding multiple
is 23-17x. At the same time, the company’s omnichannel peers are valued with
22-23E P/E multiples of 11-10x, indicating that the company is valued with ~70%
premium over its peers. We find it difficult to accept a premium of 70%, given
weak market conditions and uncertain near future. However, with a dividend yield
of ~5%, it’s reasonable to stay on the company’s ride. In addition, the annual
EPS growth of 24% (CAGR 2022-25) is supporting the long-run return potential.
Our new target price implies 22-23E P/E multiples of 18-14x which are still
quite stretched compared to peer group median. We retain our HOLD-rating and
adjust our target price to EUR 4.7 (6.0).

Open report


VERKKOKAUPPA.COM - TOWARDS ONLINE DRIVEN DEPARTMENT STORE

23.03.2022 - 13.05 | Company report

Online pioneer Verkkokauppa.com has shown strong growth figures over the years
and with its new strategy, the company targets strong, profitable growth by
expanding to new categories and utilizing its strong online platform.

Read more

Strong track record
Finnish online retailer Verkkokauppa.com has grown at a CAGR of 11.5% (2010-21).
The company has positioned well to the megatrend of online transition with its
most visited and known webstore among Finns. By expanding its presence in low
online penetration categories, the company aims to tap market share from the
original brick-and-mortar stores. With a low OPEX base, the company is committed
to executing price-driven business in price-sensitive consumer electronics
markets while improving its gross margin through evolving product categories.
With a strong brand, local warehousing, and fast deliveries the company aims to
expand its 150,000+ active customer base.

Strategy execution has started well
Verkkokauppa.com renewed its strategy in 2021 and expects to reach a revenue of
EUR 1bn and 5% EBIT margin by 2025. In Feb 2022, Verkkokauppa.com acquired a
Finnish webstore e-ville.com. With the acquisition, the company gets an
experienced sourcing team and new resources to develop its own brands. Moreover,
the automated warehouse is in a testing phase and is expected to operate by the
end of Q1’22. We expect to see some enhancements in efficiency during H2’22
since, with the new automated warehouse, the utilization rate of the rental
warehouse decreases, and efficiency improves in Jätkäsaari warehouse.

HOLD with a target price of 6.0 (6.5)
Verkkokauppa.com’s peers have also experienced a decline in valuation multiples.
Omnichannel peer group median is valued with a 22-23E P/E of 12-11x while
Verkkokauppa.com is trading at 15-13x. We find the premium justified, given
stronger earnings growth expectations. Even though we don’t see the war
affecting Verkkokauppa.com’s business directly yet, the uncertainty limits
potential returns in the short-term. We retain our HOLD-rating and adjust our TP
to 6.0 (6.5).

Open report


NETUM - SOLID PERFORMANCE SEEN TO CONTINUE

09.03.2022 - 08.45 | Earnings Flash

Netum’s H2 results were well in line with expectations. Continued rapid and
profitable growth is seen in 2022 despite some potential demand uncertainty.

Read more

No surprises in H2 results
Netum reported H2 results in line with our estimates. Revenue grew 33.4% (18.6%
organic growth) EUR 12.0m (Evli EUR 11.9m) and EBITA amounted to EUR 3.1m (Evli
EUR 3.1m, pre-announced). Growth was driven by successful recruitments and new
customer acquisition and also to some extent by higher pricing levels. Netum’s
BoD proposes a dividend of EUR 0.11 per share (Evli EUR 0.09). In 2022 the
company expects revenue to grow by over 30% from 2021 and the EBITA-margin to be
above 14%.

Expecting over 30% growth in 2022
Netum’s growth guidance is above our previous estimates (22%) and adjusted for
the impact of the Cerion Solutions acquisition implies continued clear
double-digit organic growth, which given the growth in headcount (2020: 130 ->
2021: 217) should be well achievable should the demand situation not
deteriorate. On our revised estimates we expect revenue of EUR 29.6m (+32% y/y)
and an EBITA-margin of 14.3%. Margins have been at good levels, and we see
limited near-term upside apart from a potential slight boost from frontloaded
recruitments converting to revenue and thus higher revenue/employee. Netum
updated its strategy and financial targets, seeking revenue of EUR 50m by 2025,
implying annual growth of over 20%. The company seeks to maintain an
EBITA-margin of over 14%. Netum noted that it is looking into expansion in the
Nordics/Baltics, which could help in achieving the growth target, but such a
move would in our view unlikely be seen before 2024.

HOLD with a target price of EUR 4.3
Demand uncertainty has increased due to the on-going conflict and peer multiples
have also seen some further depreciation from our previous update. With our
raised growth estimates, however, we retain our TP of EUR 4.3, valuing Netum at
13.7x 2022e adj. P/E.

Open report


NETUM - SEEING CONTINUED SOLID GROWTH

08.03.2022 - 09.30 | Earnings Flash

Netum’s H2 was in line with our expectations. Net sales grew 33.4% to EUR 12.0m
(Evli EUR 11.9m) while the comparable EBITA amounted to EUR 1.5m (Evli EUR
1.5m). Netum expects its revenue to grow at least 30% and an EBITA-margin of
over 14% in 2022. Dividend proposal: EUR 0.11 per share (Evli EUR 0.09).

Read more

 * Netum’s net sales in H2 amounted to EUR 12.0m (EUR 9.0m in H2/20), in line
   with our estimates (Evli EUR 11.9m). Net sales in H1 grew 33.4% y/y, of which
   18.6% was organic growth. 
 * EBITDA in H2 was EUR 1.5m (EUR 1.7m in H2/20) and comparable EBITA EUR 1.5m
   (EUR 1.5m in H2/20) in line with our estimates of EUR 1.6m and 1.5m.
 * Operating profit in H2 amounted to EUR 0.7m (EUR 0.5m in H2/20), slightly
   below our estimates (Evli EUR 1.0m), at a margin of 5.8%. 
 * Comparable earnings per share was EUR 0.12 (H2/20: 0.12)
 * Personnel at the end of the period amounted to 217 (130).
 * Dividend proposal:  Netum’s BoD proposes a dividend of EUR 0.11 per share
   (Evli EUR 0.09). 
 * Guidance for 2022: Netum expects its revenue to grow by at least 30% and the
   EBITA-margin to be over 14%.

Open report


ADMINISTER - INITIATE COVERAGE WITH BUY-RATING

04.03.2022 - 09.50 | Company report

Administer is one of the leading providers of financial management by revenue
and HR & payroll services by number of pay slips in Finland seeking rapid growth
and clear profitability improvements supported by M&A activity.

Read more

Seeking rapid and profitable M&A supported growth
Administer is one of the leading providers of financial management and HR &
payroll services in Finland. Founded in 1985, the company has grown rapidly in
recent years through acquisitions and today employs around 600 employees.
Administer is in its strategy seeking to continue growth inorganically as well
as boosting organic sales growth through investments into its sales organization
and looking to clearly improve its profitability through growth, synergies from
acquired companies and through enhancing the efficiency of own operations. The
company targets revenue of EUR 84m and an EBITDA-margin of at least 24% in 2024.

Set to return to rapid growth in 2022
Administer’s recent financial performance has been affected by the pandemic, a
loss of several larger customers in its subsidiary Adner and growth investments
and reported figures have so far during 2021 declined y/y. A clear pick-up in
growth is seen in 2022, aided by the acquisition of financial administration
SaaS solutions provider EmCe, with profitability also set to recover with a
reduction in the impact of previously noted challenges. The company’s growth and
profitability potential is in our view considerable but the potential
realization is still a long way away.

Initiate coverage with buy-rating and TP of EUR 4.7
We initiate coverage of Administer with a target price of EUR 4.7 and
BUY-rating. In deriving our target price for Administer we rely mainly on peer
multiples and further compile a scenario analysis to illustrate the impact the
company’s financial targets, should they materialize, could have on the value.
Our target price values Administer at 1.2x 2022e EV/sales and 16.6x 2022e
EV/EBITA, near the lower end of peer multiples, which we currently consider fair
as Administer’s financial performance is still quite clearly sub-par.

Open report


ASPO - VALUATION LEAVES TELKO VERY CHEAP

04.03.2022 - 09.30 | Company update

The war raises questions around Telko and Leipurin, but we view the recent
sell-off a bit overdone despite the risks.

Read more

The crisis affects Telko and Leipurin in various ways

Aspo withdrew guidance as the war in Ukraine and situation in Russia limit
visibility. The uncertainty directly concerns Telko and Leipurin, while ESL
ships only limited amounts of cargo from Russia and hence the situation affects
the dry bulk business mostly indirectly. Russia and other CIS countries,
including Ukraine, amounted to EUR 155m in FY ’21 Aspo revenue. Telko and
Leipurin both distribute basic raw materials and have managed to navigate
challenging market conditions before, but the full-scale war and dismal
prospects for the Russian economy mean the hit is bound to be larger this time.
Both companies are asset-light i.e. inventories and trade receivables constitute
their assets. There is also no dependency on any large customer accounts. The
Russian sanctions shouldn’t concern Leipurin that much as the company sources
for the most part local raw materials; Telko is more vulnerable in this sense as
it connects small local customers with Western principals.

We revise our FY ’22 EBIT estimate down by EUR 7.9m

We leave our FY ’22 estimates for ESL unchanged at this point, however we revise
our revenue estimates for Telko and Leipurin down by a combined EUR 50m. In our
view Leipurin will be especially affected by the Russian end-market challenges
as the local consumers struggle with hyperinflation. The situation is a lot more
unclear for Telko as e.g. elevated oil prices lift raw materials prices, which
by itself should support margins. Our new FY ’22 EBIT estimate for Telko is EUR
10.1m (prev. EUR 16.8m) and EUR 1.1m for Leipurin (prev. EUR 2.3m). We note
Telko also operates in 13 other countries besides Russia and Ukraine.

In our view Telko is now undervalued despite the risks

There are no very useful peer multiples as the strong global dry bulk earnings
translate to multiples which we view too low to be applied to ESL. In our view
ESL is worth close to EUR 350m, or some 11-12x EBIT. This would imply the
current valuation puts very little value on Telko; there are risks, but the EUR
155m CIS revenue represents 41% of the FY ’21 combined Telko and Leipurin
revenue. We thus view the recent sell-off somewhat overdone. Our new TP is EUR 8
(14); we retain our BUY rating.

Open report


RAUTE - RUSSIA SPELLS TROUBLE

03.03.2022 - 09.40 | Company update

Raute withdrew its guidance for the year due to the large Russian order book
exposure. We downgrade our estimates.

Read more

Others can’t make up the loss, at least in the short-term

The most acute uncertainty stems from the sanctions, including payment bans, and
their effect on Russian deliveries. Russia was 39% of Raute’s FY ’21 order
intake and 49% of revenue, an extension on the previous years’ similar high
figures. Raute has in the past done good Russian business, without direct ruble
exposure, despite the infamously stagnant economy. There are no other risk
exposures, like major assets, other than the orders already booked. The Russian
economy is to be decimated along with the ruble in the short and medium term
while long term outlook remains grim with no historical precedent.
Hyperinflation is imminent and many Russian customers will be unable to invest.
We believe Raute’s Russian orders will begin to recover sometime in the future,
but this may take long. In our view a recovery to previous levels might not
happen very fast even with a more comprehensive regime and societal change, and
such a scenario is on the rosy side. Other markets could help to shore up the
loss of Russia, e.g. Europe has recently developed well, but at least some of
the economic trouble may spill over.

We now downgrade only our Russian estimates

We have made changes only to our Russian revenue and order estimates. We
previously estimated EUR 49m Russian order intake and EUR 79m revenue for this
year. We cut these to respective EUR 14m and EUR 32m figures, noting a lot of
uncertainty around the exact levels. It’s early to say much about how the crisis
will affect Raute’s other customers, but Western stagflation is one prospect. We
expect roughly break-even EBIT.

Potential is still high, but so is the present uncertainty

Raute’s valuation remained modest before the invasion as inflation was a major
source of uncertainty. In our opinion no very useful peer multiples were
available for Raute before the war, and this is now true even more so. Raute is
valued ca. 6x EV/EBITDA and 9x EV/EBIT on our FY ’23 estimates, not challenging
levels but the environment is extraordinary. Long-term potential is significant
as Raute remains the leading player in its niche, however we consider the
valuation neutral given the circumstances. Our new TP is EUR 15 (22); rating
HOLD (BUY).

Open report


ENERSENSE - FAVORABLE TAILWINDS SET TO CONTINUE

01.03.2022 - 09.50 | Company update

Enersense’s Q4 figures were a bit higher than we estimated, earnings guidance
was softer, but the overall picture hasn’t changed much as renewables remain in
high demand.

Read more

No major surprises in connection with the report

Enersense’s Q4 top line declined by 3% y/y, mostly due to the sale of Staff
Leasing business, to EUR 65.9m and was above our EUR 63.0m estimate. The revenue
beat was largely due to International Operations, but Power was also above our
estimates. Certain M&A related items, both positive and negative, affected
results, but overall profitability was slightly above our estimates. Infections
continued to bother in certain projects, however these are unlikely to be a
major issue going forward. Long-term profitability improving investments in IT
and offshore wind power business will burden results this year, and we revise
our FY ’22 profitability estimates down by some EUR 3m.

Latest macro changes are more likely to be supportive

There is some inflation risk, especially in the Baltics as the local contracts
are long, but the contracts tend to compensate for cost pressures as now seen to
some extent in raw materials and wages. Enersense has expanded its value chain
presence with two recent acquisitions, and these don’t involve any significant
integration issues. Enersense will also update its long-term targets later in
H1’22 (the current target is 10% EBITDA margin by 2025 whereas we estimate 7.3%
margin for FY ’22). Offshore wind power is a major growth driver going forward
as it is a relatively underdeveloped space compared to onshore. The latest
shifts in geopolitics do not in our view pose significant risks for Enersense,
rather they are bound to accelerate the European transfer away from hydrocarbons
and major initiatives in e.g. Germany could yet play out favorably for
Enersense’s strategy.

Valuation is not challenging in either short or long term

Our EUR 18.2m EBITDA estimate for FY ’22 lands a bit above the midpoint of the
EUR 15-20m range, which we don’t view very challenging. The respective 5.5x
EV/EBITDA and 12x EV/EBIT multiples aren’t high compared to peers, and valuation
is even more attractive in the long-term perspective as Enersense should achieve
relatively steep earnings growth. Peer multiples have, however, continued to
decline in the past two months and we update our TP to EUR 8 (10). Our rating
remains BUY.

Open report


ENERSENSE - FIGURES MOSTLY IN LINE

28.02.2022 - 12.30 | Earnings Flash

Enersense’s Q4 report was overall relatively close to our expectations. The Q4
figures came in a bit higher than we estimated, while guidance represents a
small miss in terms of profitability. The BoD however proposes a dividend of EUR
0.1 per share to be paid, which we did not expect.

Read more

 * Enersense Q4 revenue was EUR 65.9m vs our EUR 63.0m estimate. Smart Industry
   amounted to EUR 21.0m vs our EUR 21.5m estimate. Power was EUR 13.8m vs our
   EUR 12.5m estimate. Connectivity was EUR 13.2m, compared to our EUR 14.8m
   estimate, while International Operations was EUR 18.0m vs our EUR 14.2m
   estimate.
 * Adjusted EBITDA landed at EUR 7.5m, compared to our EUR 7.4m estimate.
   Adjusted EBIT was EUR 5.8m vs our EUR 5.1m estimate. Smart Industry EBITDA
   amounted to EUR 6.6m, while Power EBITDA was EUR 0.0m. Connectivity was EUR
   0.7m and International Operations was EUR 0.3m.
 * Order backlog was EUR 291m at the end of Q4 (EUR 292m a year ago).
 * Enersense guides FY ’22 revenue to be between EUR 245-265m (vs our EUR 247m
   estimate) and adjusted EBITDA EUR 15-20m (vs our EUR 21.0m estimate).
   Investments in the new ERP system as well as in growing offshore wind power
   will burden results.
 * The BoD proposes EUR 0.1 per share dividend to be distributed, compared to
   our EUR 0 estimate.

Open report


ENDOMINES - PROGRESS MADE BUT DELAYS SEEN

28.02.2022 - 09.30 | Company update

Endomines met new challenges at Friday, with ore body irregularities mandating
further underground drilling. We see renewed ramp-up efforts in mid-2022.

Read more

Limited production with new challenges at Friday
Endomines reported weaker than expected results. At the company’s only producing
site (in Q4/21), Friday, mining operations were halted due to irregularities in
the ore bodies. Gold production as such was limited, at 460oz, with earlier
guidance of ~1,200oz. Revenue amounted to SEK 3.2m (Evli SEK 17.3m) and EBITDA
to SEK -41.6m (Evli SEK -28.0m). Due to the developments at Friday Endomines
carried out impairments of SEK 73.8m and EBIT was thus also clearly below
expectations, at SEK -121m (Evli SEK -33.7m).

Assuming renewed ramp-up at Friday in mid-2022
The halting of mining operations at Friday is unfortunately timed, as most
preparations for achieving full production capacity has been set in place. With
the needed underground drilling and analysis we for now assume a six month
delay, seeing renewed ramp-up efforts during the summer. News on Pampalo were
far more encouraging, with development so far essentially on schedule and budget
and first gold concentrate deliveries in January. The Pampalo mine and mill are
expected to achieve full production capacity during Q1/2022. When in full
production, the annual gold production is estimated to be between
10,000-11,500oz. Endomines has considerably strengthened its financial position
through several transactions after Q4. Cash flows from Pampalo will also begin
to support financial development, with gold prices at renewed higher levels. In
our view additional financing needs are however still on the table, as the
company on the longer run will seek to bring more assets to production.

HOLD with a target price of SEK 2.3 (2.7)
Following adjustments to our SOTP-model and the delay at Friday we adjust our
target price to SEK 2.3 (2.7) and retain our HOLD-rating. With the challenges at
Friday, upside potential from bringing other assets to production is still
distant.

Open report


ENDOMINES - PAMPALO PROGRESS, FRIDAY CHALLENGES 

25.02.2022 - 09.35 | Company update

Ramp-up of ore development and processing at Friday continues but mining was
temporarily halted due to a need to conduct further underground definition
drilling. Pampalo is progressing well, with the first batch of concentrate
delivered and full production capacity seen in Q1/22.

Read more

 * Revenue in Q4 amounted to SEK 3.2*m, below our estimate of SEK 17.3m. The
   company fell short of its earlier production guidance of around 1,200oz, with
   production of 460.3oz, at a head grade of 2.89g/t.
 * EBITDA in Q4 was at SEK -41.6m*, below our estimate of SEK -28.0m given the
   lower revenue.
 * EBIT in Q4 amounted to SEK -121.4m* (Evli SEK -33.7m), including larger
   write-downs on the Friday project.
   *Figures derived from Q1-Q3 and H1 figures
 * During Q4, at Pampalo, ore production from the mine reached mine development
   started. The decline reached target levels in September. The mill was
   refurbished and tested in December and the first concentrate was delivered in
   January.
 * Ramp up and ore processing continued at Friday. Ramp up was delayed by a need
   to conduct underground definition drilling due to ore irregularities. The
   production guidance for 2022 is as such under review and can be updated once
   new resource estimates have been completed.
 * Production guidance for 2022: The Pampalo mine and mill are expected to reach
   full production capacity during Q1/22. When in full production the annual
   gold production is expected to be 10,000 to 11,500oz. The production guidance
   for Friday is under review.

Open report


CIBUS NORDIC - POSITIONED TO EXPAND

25.02.2022 - 09.30 | Company update

Cibus should have no trouble to execute on its growth targets, but valuation
remains a bit high in the present situation with its extraordinary uncertainty
around yields.

Read more

Not many surprises in Q4 figures

Q4 NRI, at EUR 20.4m, topped the EUR 19.5m/19.7m Evli/cons. estimates. Operating
income was EUR 18.7m vs our EUR 18.2m as there were EUR 0.1m in one-off admin
costs. Not all deals closed by Cibus in Q4 were in our estimates, and this seems
to have been the case also for the consensus, yet the report never held much
potential for surprise as is always the case with Cibus.

We expect Cibus to be able to source and finance the deals

Cibus’ growth target for 2022-23 states the company is to add EUR 1.0-1.5bn in
properties over the two years. Cibus seeks an IG credit rating and thus a new
share class (D) is to be instituted. Two recent issues have already helped net
LTV down a bit, but according to Cibus the ratio should further decline to
around 50%. We calculate the targets to imply EUR 600-850m in equity issues. The
sums are considerable, but we believe Cibus will be able to source the
properties without bidding too high as the company’s current position in
Finland, by far its biggest presence, amounts to no more than 10% of the market.
Denmark is an obvious candidate for expansion as the country has a lot of small
grocery stores and is in that sense comparable to Norway. Cibus sees some yield
compression in Sweden, but Finnish yields appear to lag the Nordic market as the
levels are still around 6% while they are closer to 5% in the other three
countries.

Valuation continues to reflect underlying yield compression

In our view Cibus’ valuation has reflected yield compression expectations for a
while now. We don’t see the current 1.2x EV/GAV too high if yield compression
supports asset values going forward. Cibus traded around 1.4x EV/GAV in late
December and the yield almost touched those of other listed Nordic property
portfolios. Such a level yield wouldn’t by itself be too problematic for future
returns, but in our opinion the 1.4x EV/GAV would be on the aggressive side
considering properties’ inherent limited upside potential. Cibus’ portfolio
performance is very stable, however the premium valuation combined with
relatively high LTV means equity is sensitive to different assumptions. We
retain our SEK 215 TP and HOLD rating.

Open report


FELLOW FINANCE - NEW PHASE OF JOURNEY TO START SOON

24.02.2022 - 09.45 | Company update

Fellow Finance’s H2 result fell short of our estimates due to larger than
anticipated merger related expenses declines in interest income. Fellow Finance
will soon enter a new phase, with the merger anticipated to be carried out on
April 2nd.

Read more

H2 burdened by merger related non-recurring items
Fellow Finance’s H2 results fell short of our estimates, as interest income
declined more than expected, causing a slight y/y revenue decline to EUR 5.2m
(Evli EUR 5.8m). Fee income grew some 35% on a 59% increase in brokered
financing. EBIT amounted to EUR -1.4m (Evli EUR -0.5m), with non-recurring items
relating to the intended merger larger than expected along with an increase in
personnel expenses. Fellow Finance’s BoD proposed that no dividend be
distributed, and the company gave no guidance due to the merger.

Still sub-par but showing promising signs
In its current form Fellow Finance as a company is showing quite notable signs
of improvement. The growth in brokered financing during 2021 is now also
starting to show as revenue growth and the anticipated lower levels of interest
income are to a larger extent offset by a decline in impairment losses and
interest income from external debt, reducing the impact on profitability. We
have still substantially lowered our estimates for 2022, anticipating some
further non-recurring expenses and the increase in personnel expenses along with
the lower interest income levels to impact on profitability. Fellow Finance
anticipates formalizing the merger with the company carrying on Evli Bank’s
banking operations on April 2nd, 2022. We continue to see the transaction in
favourable light due to the potential in profitability gains from moving towards
balance sheet lending.

BUY with a target price of EUR 3.3 (3.5)
Fellow Finance’s current valuation level is challenging and relies upon the
potential benefits from the merger. The implied current valuation of Fellow Bank
of near EUR 50m would indicate a P/B of below 1.5x. We lower our target price to
EUR 3.3 (3.5) and retain our BUY-rating

Open report


CIBUS NORDIC - HIGH NET RENTAL INCOME

24.02.2022 - 09.30 | Earnings Flash

Cibus’ Q4 figures were somewhat above estimates as the company closed many
acquisitions towards the end of Q4 which the consensus didn’t seem to have fully
reflected. Our estimates didn’t include the purchases which were included after
the Q3 report.

Read more

 * Q4 rental income amounted to EUR 21.6m, compared to the EUR 20.7m/20.8m
   Evli/consensus estimates.
 * Net rental income landed at EUR 20.4m vs the EUR 19.5m/19.7m Evli/consensus
   estimates.
 * Operating income was EUR 18.7m vs our EUR 18.2m estimate.
 * Net operating income came in at EUR 12.8m, compared to the EUR 12.5m/12.7m
   Evli/consensus estimates.
 * Annual net rental income capacity was EUR 85.8m at the end of Q4.
 * GAV amounted to EUR 1,500m while EPRA NAV was EUR 13.5 (12.4) per share.
 * Net LTV ratio stood at 57.8% (60.1%).
 * Occupancy rate was 94.4% (94.2%).
 * WAULT was 5.0 years at the end of Q4.
 * Annual total dividend per share is proposed at EUR 0.99, compared to the EUR
   0.99/0.99 Evli/consensus estimates.

Open report


FELLOW FINANCE - PROFITABILITY BURDENED BY ONE-OFFS

23.02.2022 - 09.45 | Earnings Flash

Fellow Finance’s H2/21 results fell short from our estimates. Revenue declined
slightly to EUR 5.2m (Evli EUR 5.8m) despite a 59% increase in brokered
financing, as interest income decreased clearly. EBIT amounted to EUR -1.4m
(Evli EUR -0.5m), impacted by the one-offs relating to the intended merger and
increase in personnel expenses.

Read more

 * Revenue in H2 amounted to EUR 5.2m (EUR 5.3m in H2/20), below our estimates
   (Evli EUR 5.8m). Revenue declined 1.4% y/y. The amount of brokered financing
   during H2/21 grew 59% y/y while fee income grew 35%. Interest income
   decreased clearly more than expected to EUR 1.2m (H2/20: EUR 2.3m) vs. our
   expectation of EUR 2.1m.
 * Fellow Finance facilitated loans during H2 for a total of EUR 142.3m (EUR
   84.3m in H2/20), growing 59%. Loan volumes continued on a good growth track
   also in H2, as seen throughout 2021, with volumes passing the EUR 20m mark on
   a monthly basis during the last months of 2021.
 * The EBIT in H2 amounted to EUR -1.4m (EUR 0.8m in H2/20), below our estimates
   (Evli EUR -0.5m). Profitability was burdened by one-off expenses relating to
   the intended merger and a growth in personnel expenses. Without the
   non-recurring items, the result for 2021 would have been slightly positive.
 * The EPS in H2 amounted to EUR -0.23 per share (EUR 0.02 in H2/20), below our
   estimate of EUR -0.12.
 * Dividend proposal: The BoD proposes that no dividends be paid for FY2021
   (Evli EUR 0.0).
 * Guidance for 2022: Due to the significant changes in Fellow Finance’s
   business after the merger, the company does not currently provide a guidance.

Open report


SCANFIL - STEEPER EARNINGS ACCRETION AHEAD

23.02.2022 - 09.30 | Company update

Scanfil’s Q4 report didn’t provide any big surprises as figures were slightly
above estimates, while the guidance and long-term targets were pretty much as
expected.

Read more

High growth due to volumes and component inflation

The EUR 192m Q4 revenue, up 24.5% y/y, topped the EUR 183m/185m Evli/cons.
estimates by a fair margin. The EUR 14.4m in spot purchases were spread even
between the five segments, relative to their sizes. Energy & Cleantech grew the
most also in Q4. It was known before that Q4 would fall short of Scanfil’s EBIT
potential as component issues and infections limited productivity, but the EUR
10.2m adj. EBIT was a bit above the EUR 9.7m/9.6m Evli/cons. estimates. The Q4
issues are by their nature temporary; in our view Scanfil’s guidance and
comments suggest the situation is improving, or at least has stabilized.

Performance is set to improve this year and beyond

All the segments grew last year. We expect Energy & Cleantech to contribute most
growth this year as the segment benefits from many megatrends and includes
customers such as TOMRA. Inventories grew EUR 90m last year due to high demand
but also in response to the component challenges. Scanfil suggests spot
purchases may be lower again in H2’22; we estimate margin improvement throughout
the year. Scanfil mentioned possible expansion in Asia beyond China, and this
would be likely in countries such as India, Vietnam, and Malaysia. In our view
such an expansion would be more likely through M&A than greenfield. Scanfil has
recently announced expansions to its plants in the US and Germany, and hence
capex will be a bit above 2% of revenue this year. An expansion to the Suzhou
plant might also follow.

Multiples have declined, favorable outlook is much intact

We make only marginal estimate revisions. Scanfil is valued 6.0-7.5x EV/EBITDA
and 8.0-9.5x EV/EBIT on our FY ’22-23 estimates. In our view the medium to
long-term demand and earnings outlook hasn’t changed much in the past 3-6
months, while valuation has declined by 15-20% (peer valuations have declined by
roughly similar percentages). Scanfil’s multiples are now well in line with
peers, but in our view a premium can be justified by the fact that Scanfil’s
EBIT outlook remains somewhat higher than that of a typical peer. We revise our
TP to EUR 8 (9) as the sector’s valuations have declined, but our rating remains
BUY.

Open report


SCANFIL - A BIT ABOVE THE ESTIMATES

22.02.2022 - 08.30 | Earnings Flash

Scanfil’s Q4 top line grew by 24.5% y/y and was well above the estimates. We
find the beat stemmed from many customer segments. The EUR 10.2m adjusted EBIT
also topped estimates, while the guidance for this year should not prompt any
major estimate changes. In our view the 5-7% organic CAGR target is also in line
with expectations.

Read more

 * Scanfil Q4 revenue grew by 24.5% y/y to EUR 191.7m, compared to the EUR
   182.5m/184.8m Evli/consensus estimates.
 * Advanced Consumer Applications was EUR 52.9m vs our EUR 54.6m estimate, while
   Energy & Cleantech amounted to EUR 53.4m vs our EUR 47.1m estimate.
   Automation & Safety landed at EUR 41.1m, compared to our EUR 39.4m estimate.
 * Adjusted EBIT landed at EUR 10.2m vs the EUR 9.7m/9.6m Evli/consensus
   estimates. Adjusted EBIT margin was 5.3% vs our 5.3% estimate.
 * Scanfil guides FY ’22 revenue to be EUR 710-760m and adjusted EBIT of EUR
   43-48m. The respective consensus estimates for the year stand at EUR 718.6m
   and EUR 45.3m. Semiconductor availability, pricing, and supply chain
   functioning, as well as the pandemic, continue to pose uncertainty.
 * Scanfil’s (updated) long-term target is to grow at a 5-7% organic CAGR and to
   reach 7% EBIT margin, in addition to paying a growing amount of dividend to
   the tune of a third of EPS.
 * The BoD proposes EUR 0.19 per share dividend to be distributed, compared to
   the EUR 0.18/0.19 Evli/consensus estimates.

Open report


PIHLAJALINNA - STRATEGY EXECUTION SET TO CONTINUE

21.02.2022 - 09.45 | Company update

Pihlajalinna’s Q4 EBIT was soft relative to estimates, but in our view the issue
is temporary; Pihlajalinna continues its strategy execution with the acquisition
of Pohjola Hospital.

Read more

We view the Q4 cost challenge as a temporary issue

Pihlajalinna’s top line grew at a 13% y/y rate. The EUR 155m figure was well in
line with the EUR 156m/152m Evli/cons. estimates. Covid-19 services still
amounted to a high EUR 10.1m, only a small q/q decline, but the level is set to
fade this year. Q4 EBIT was hit by a spike in specialized care costs within
complete outsourcing contracts, induced by Covid-19, and the effect amounted to
some EUR 2m. The EUR 6.0m adj. EBIT therefore didn’t meet the EUR 9.2m/8.8m
Evli/cons. estimates. Pihlajalinna has been negotiating for compensation for
increased production costs before and expects to get favorable outcomes this
year.

Growth and profitability targets set the bar high

Pohjola Hospital’s FY ’21 figures improved a bit, but EBIT was still EUR 7m red.
Pihlajalinna sees EUR 5m in cost synergies and expects break-even during the
year; H1 is still soft but H2 could already show results. The acquisition drives
growth within private and insurance customers and thus helps margins as these
areas are more profitable than public ones. Pihlajalinna revised its long-term
financial targets accordingly: the new aim is above 9% EBITA margin and EUR 250m
more revenue by the end of 2025 (compared to 2021), which in our view implies
ca. 7.5% CAGR for the three years following the closing of the acquisition. Two
thirds of the growth is to stem from corporate and private customers, segments
where the acquisition is to prove useful. The profitability target can be seen
as a small positive revision on the previous one; it will take some time for
Pihlajalinna to reach that level, but we estimate by inferring from the guidance
that Pihlajalinna could reach 7.5% EBITA margin already in H2’22. The company
targets 4-6% margins within outsourcing, while other areas aim for levels
comparable with those of Terveystalo.

Overall valuation picture hasn’t been altered

The acquisition limits profitability in H1’22, but Pihlajalinna is valued only
around 6-8x EV/EBITDA and 12-18x EV/EBIT on our FY ’22-23 estimates. The
multiples represent discounts to peers while our estimates remain moderate
relative to long-term potential. We retain our EUR 14 TP and BUY rating.

Open report


VAISALA - THE GROWTH STORY CONTINUES

19.02.2022 - 10.30 | Company update

Vaisala’s Q4 revenue grew strongly, but increased costs drove EBIT below the
comparison period. Underlying demand was strong and Vaisala managed to deliver
all its orders. We retain our HOLD rating and adjust TP to EUR 41 (43).

Read more

Growth was strong, but increased costs tightened margins
Vaisala delivered strong Q4 figures with orders received totaling EUR 119m and
order book at a record level of EUR 160m. Strong order intake was driven by IM,
while W&E experience a 14% decline partly due to strong comparison figures.
Group net sales grew by 17% y/y to EUR 125 driven by both BUs. IM grew by 26%
y/y, driven by all its market segments. W&E experienced a 12% increase in net
sales, driven by renewable energy and meteorology. Increased usage of
spot-priced components decreased the gross margin to 53%. EBIT decreased by 3%
y/y to EUR 11.9m, driven by lower gross margin and increased fixed costs. Q4
EBIT included one-time costs worth EUR 1.1m. EPS declined by 11% y/y to EUR
0.21. Board proposed a dividend of EUR 0.68. Despite losing some margins,
Vaisala gained market share and “long-wanted” customers from its competitors
with its ability to respond to the demand in a difficult environment.

We made some adjustments to our estimates
Despite the problems on the supply side, the underlying demand remains strong.
We made minor adjustments to our estimates, reflecting a solid outlook, but also
risks stemming from the component shortage. The order book is strong and thus we
expect both BUs to grow also during 2022. We expect IM to grow by 16% y/y to EUR
209.8m in 2022, driven by all its market segments. In 2022, we estimate W&E to
increase by 6.3% y/y to EUR 273.1m, mostly driven by renewable energy. 2022
group revenue amounts to EUR 482.9m, near the mid-point of the guidance.
Vaisala’s management noted that some price increases have been made in Q1’22,
but the visibility to component availability remains weak and we expect material
costs to increase and gross margin to be a bit lower than in 2021. In our view,
IM suffers less from the component shortage with its pricing power, while W&E’s
gross margin falls more aggressively. Although the gross margin is a bit softer,
we expect EBIT to rise to EUR 59.9m (12.4% margin), driven by scalability. IM
contributes the EBIT with EUR 52.4m and W&E with EUR 9m.

HOLD with a TP of EUR 41 (43)
Vaisala’s valuation is quite stretched compared to its peers. With 22E EV/EBITDA
of 19x, Vaisala trades with a ~20% premium. We, however, find a premium
justified, given Vaisala’s technology leadership, increased market share, and
growth outlook. Our new TP values Vaisala at 22-23E EV/EBITDA of 17.6-16.4x.
With the acceptable valuation level decreased and uncertainties in component
availability, we retain our HOLD rating and adjust our target price to EUR 41
(43).

Open report


SOLTEQ - FOCUSING ON GROWTH

18.02.2022 - 11.20 | Company update

Solteq's growth remained good in Q4, but investments impacted on profitability.
With growth investments on the rise, we lower our profitability estimates for
2022 and our TP to EUR 5.0 (6.2), with our BUY-rating intact.

Read more

Growth on track but investments burdened profitability
Solteq reported weaker Q4 results on the profitability side while growth still
remained at a good pace. Revenue grew 11.4% to EUR 18.3m (EUR 18.0m Evli) and
the operating profit amounted to EUR 1.3m (EUR 2.0m Evli). Compared with our
estimates, profitability was weaker in Solteq Software, where adj. EBIT fell to
EUR 0.0m (EUR 0.8m Evli). Profitability was impacted by growth investments as
well as increases in subcontracting and general costs. Investments were made
into software development and into international growth. Solteq’s BoD proposes a
dividend of EUR 0.10 per share (EUR 0.11 Evli).

Estimates lowered as investments pick up
Solteq expects its revenue in 2022 to grow clearly and operating profit to
improve compared with 2021. We have not made any significant changes to our
revenue estimates but have lowered our profitability estimates by quite a bit,
now expecting 2022 operating profit of EUR 7.8m (prev. 10.5m). Although it is
unfortunate that profitability scaling in Solteq Software is not going as fast
as we (in retrospect probably overoptimistically) had expected, prioritizing
growth is still more beneficial with demand drivers in place and apart from cost
growth from subcontracting the operational profitability still appears to be on
track. We expect to see the growth investments weighing more heavily on H1 and
with pick-up in growth and recurring revenue we expect to see figures improve
towards the end of the year, creating good potential for the following years.

BUY-rating with a target price of EUR 5.0 (6.2)
With our estimates revisions we adjust our target price to EUR 5.0 (6.2),
valuing Solteq at approx. 21x 2022e P/E. Solteq has likely been somewhat
cautious in its profitability guidance, and we still see potential for some
improvement during the year as visibility improves. We retain our BUY-rating.

Open report


VAISALA - TOPLINE MET OUR EXPECTATIONS

18.02.2022 - 09.45 | Earnings Flash

Vaisala’s Q4 topline was in line with our expectations, but earnings fell short
due to declined margins.

Read more

 * Group results: Orders received was EUR 119.0m (+6% y/y) and order book
   totaled EUR 160.0m (+16% y/y). Net sales grew by 17% y/y to EUR 125m
   (125.5/123.5m Evli/cons.). EBIT decreased by -2.5% y/y to EUR 11.9m
   (16.4/16.8m Evli/cons.). Driven by soft EBIT the EPS was EUR 0.21 (0.39/0.40
   Evli/cons.).
 * Industrial Measurements (IM): Orders received grew very strongly by 42% y/y
   to EUR 58.2m and order book was at record level EUR 32.9m (+83% y/y) after
   Q4. Revenue grew strongly by 26% y/y to EUR 50.1m (49.5/49.5m Evli/cons.).
   Revenue growth was driven by high-end industrial measurements, life science,
   liquid measurements, and power. More expensive components bought from spots
   markets (negative impact of 4%-p.) drove down the gross margin to 59.9%
   (prev. 63.3%).
 * Weather & Environment (W&E): Orders received declined by 14% y/y to EUR 60.8m
   and order book was at EUR 127.1m (+6% y/y). Net sales grew by 12% y/y to EUR
   74.9m (76/74m Evli/cons.). Revenue grew in renewable energy and meteorology,
   while it was flat in aviation and transportation. Gross margin declined to
   48.9% (prev. 51.1%) due to higher component prices (negative impact of
   2%-p.).
 * 2022 guidance: Net sales between EUR 465-495m (2021: EUR 437.9m) and EBIT EUR
   55-70m (2021: EUR 50.1m).
 * Dividend proposal: EUR 0.68 (0.63/0.64 Evli/cons.)
 * Market outlook: Markets for high-end industrial instruments, life science,
   power industry, and liquid measurements are expected to grow. Markets for
   meteorology and ground transportation are expected to be stable. Aviation
   market is expected to recover towards pre-pandemic level. Renewable energy
   market is expected to grow.

Open report


ELTEL - ORGANIC PROGRESS CONTINUES

18.02.2022 - 09.30 | Company update

Eltel’s profitability continues to improve, but we find valuation still doesn’t
leave that much upside.

Read more

Positives, negatives, and one-off gains
Eltel’s Q4 revenue, at EUR 226m, topped the EUR 206m/207m Evli/cons. estimates
while EBITA came in ca. EUR 2m above estimates. Finland performed much according
to our expectations while Sweden topped our estimates; Norway and Denmark were a
bit soft. The EUR 2.5m positive one-off in Poland, due to a real estate sale,
drove the Other business segment to an EBITA of EUR 1.7m, clearly above our
estimates even when excluding the one-off. Eltel’s earnings were, however, much
in line with our estimates when adjusted for the one-off. Eltel’s turnaround
continues and the company guides increasing operative EBITA margin for FY ’22.
Q1, as happens to be the nature of the business, will represent a slow start for
the year.


We now estimate a positive rate of growth for the year
Eltel continues to make progress, but there remains much uncertainty with
respect to the gradient. Diesel prices, salaries, materials as well as logistics
costs are headwinds. Inflation isn’t a problem for the Communication business
(more than 60% of revenue), yet it affects Power. We make relatively small
estimate revisions, but we now expect Eltel to reach a positive 2% growth this
year, whereas we previously expected a 2% decline. Our new FY ‘22 revenue
estimate is EUR 829.6m (prev. EUR 774.0m). Our margin estimates are up by only
10bps for the year, but they rise by some EUR 2m in absolute terms due to the
growth revision. We however expect Q1 EBITA to remain slightly in the red and
see most of the profitability gains accruing over the summer. We believe Eltel
is still going to focus on turnaround for a while and thus e.g. M&A may have to
wait for a while, but should it occur Denmark and Sweden are perhaps the most
potential countries.


Valuation continues to stand neutral
Valuation still doesn’t seem to offer clear upside considering the uncertainty
around the improvement pace. We find the 6x EV/EBITDA and 15x EV/EBIT multiples,
on our FY ’22 estimates, to be neutral relative to peers. Eltel’s margins remain
modest compared to peers; quicker than expected improvement can drive upside,
but we wouldn’t expect much more than EUR 22m EBITA at this point. Our TP is now
SEK 15 (17); retain HOLD.

Open report


FINNAIR - UPSIDE REMAINS ON THE ELUSIVE SIDE

18.02.2022 - 09.10 | Company update

Finnair’s Q4 report didn’t include that significant news. Finnair’s
profitability is poised to rebound, yet valuation doesn’t seem to leave much
upside given the uncertainties.

Read more

The Q4 report didn’t deliver any major surprises

Finnair’s Q4 revenue grew to EUR 414m, compared to the EUR 452m/387m Evli/cons.
estimates. Adj. EBIT landed at EUR -65m vs the EUR -95m/-90m Evli/cons.
estimates. Q4 cargo revenue was very high, but Q1 losses are likely to be well
above EUR 100m due to Omicron and ramp-up costs. Finnair sees some delay to the
opening of most of Asia, which was to be expected.

The whole airline industry is staging rebound this year

Omicron doesn’t seem to be a major negative, only a short-term issue, but losses
still loom in Q2. Meanwhile Finnair implements a EUR 200m investment in improved
long-haul experience with refitted seats, and we also expect Finnair’s fixed
costs savings will continue to come through; inflation relating to e.g. Helsinki
airport charges is modest compared to those of larger hubs. Finnair’s long-term
profitability potential is no worse considering the fleet renewal and cost
positioning, but high jet fuel prices continue to limit the whole industry’s
profitability potential.

Valuations continue to reflect surging earnings levels

We believe other airlines’ valuations will continue to drive Finnair’s
multiples: Finnair’s profitability will materialize later due to the Asian
reliance, but it will nevertheless come through at a certain level. In our view
the most essential uncertainty, for Finnair as well as other airlines, now
lingers around overall operating cost levels, particularly with respect to jet
fuel prices. Higher ticket prices could compensate, but we view such increases
still to be uncertain. Air traffic will continue to rebound across the globe,
including Asia as well, and is set to reach the pre-pandemic levels sooner or
later. We estimate Finnair’s FY ’22 EBIT is most likely to remain in the red,
while some other airlines should be able to reach high profitability this year.
We believe the anticipation and materialization of these profits will determine
Finnair’s valuation over the course of this year. In our view Finnair’s current
valuation, ca. 12x EV/EBIT on our FY ’23 estimates, is somewhat neutral relative
to other airlines, however overall sector valuations may still stand on the
optimistic side. We retain our EUR 0.60 TP; our rating is now HOLD (SELL).

Open report


INNOFACTOR - MOVING ON FROM RECENT CHALLENGES

18.02.2022 - 08.45 | Company update

Innofactor’s Q4 fell well short of our expectations as the company saw
challenges relating to organizational changes and employee turnover. We have
lowered our 2022 estimates and our TP to EUR 1.6 (2.1), BUY-rating intact.

Read more

Challenging last quarter of 2021
Innofactor’s Q4 results fell well short of our estimates, as the company faced
challenges with the organizational changes in Finland and employee turnover. Net
sales amounted to EUR 17.5m (Evli EUR 18.6m), declining 4% y/y but in comparable
terms on par with Q4/20. EBITDA was EUR 1.7m (EUR 2.6m Evli), falling from the
Q4/20 adj. EBITDA level of EUR 2.6m. Profitability was effectively down solely
due to the challenges noted, although EBIT included larger one-off
amortizations. The order backlog was at EUR 72.8m, up 20.6% y/y.

Poised to improve but some concerns remain
Innofactor expects its revenue in 2022 to increase from 2021 while EBITDA is
expected to increase from EUR 7.5m, which would have been 2021 EBITDA without
proceeds from the Prime business divestment. We have lowered our estimates for
2022, now expecting net sales of EUR 69.0m (prev. EUR 70.1m) and EBITDA of EUR
8.1m (prev. 9.5m). The organizational changes were started during Q3 and should
impact to a clearly lesser extent going forward and the employee turnover
appears to have peaked in Q3, which led to a spillover in Q4. The situation was
more towards the normal in Q4 and the headcount began to grow, but the
recruitment market has however been challenging for a while and we see this as a
continued concern. Fundamentally Innofactor is in our view in a good position to
post improved profitability figures in 2022, with all countries also having
posted clearly positive EBITDA figures in Q4.

BUY-rating with a target price of EUR 1.6 (2.1)
On our revised estimates and some uncertainty going into 2022 we cut our TP to
EUR 1.6 (2.1), valuing Innofactor at approx. 17x 2022 P/E. We see reasonable
potential for higher than estimated profitability with the good order backlog
levels should challenges not persist. We retain our BUY-rating.

Open report


PIHLAJALINNA - OUTSOURCING COSTS BURDENED EBIT

18.02.2022 - 08.30 | Earnings Flash

Pihlajalinna’s Q4 revenue grew as expected but profitability fell short of
estimates due to the increased costs within total outsourcing arrangements.

Read more

 * Q4 revenue grew by 12.8% y/y to EUR 154.7m, compared to the EUR 156.4m/152.1m
   Evli/consensus estimates. Private customer revenue was EUR 23.3m vs the EUR
   26.4m/24.2m Evli/consensus estimates, while corporate customers contributed
   EUR 38.8m vs the EUR 40.8m/37.3m Evli/consensus estimates. Public sector
   customers were EUR 111.3m, compared to the EUR 107.2m/108.9m Evli/consensus
   estimates.
 * Covid-19 services amounted to EUR 10.1m.
 * Adjusted EBITDA landed at EUR 14.9m vs the EUR 18.0m/17.5m Evli/consensus
   estimates. Adjusted EBIT was EUR 6.0m, compared to the EUR 9.2m/8.8m
   Evli/consensus estimates. Higher costs within total outsourcing arrangements
   weighed down profitability. Negotiations concerning cost compensation had not
   produced desired outcomes by the end of the year. Pihlajalinna continues to
   negotiate with certain municipal clients.
 * Pihlajalinna expects FY ’22 revenue to increase substantially and adjusted
   EBITA to stay level. The integration of Pohjola Hospital means H1’22
   profitability will be below that of the previous year. The acquisition will
   increase revenue by at least EUR 50m in FY ’22. Covid-19 services revenue is
   expected to decline.
 * The BoD proposes EUR 0.30 per share dividend to be distributed, compared to
   the EUR 0.35/0.31 Evli/consensus estimates.

Open report


FINNAIR - UNCERTAINTY EXTENDS THROUGH SPRING

17.02.2022 - 10.00 | Earnings Flash

Finnair’s Q4’21 losses were a bit lower than estimated, however the company
expects the combination of Omicron and certain other operational expenses to
lead to somewhat higher losses again in Q1’22. Finnair expects Omicron to
postpone the opening of Asia to some extent.

Read more

 * Q4 revenue grew by 305.5% y/y and amounted to EUR 413.5m, compared to the EUR
   451.9m/387.4m Evli/consensus estimates.
 * Adjusted EBIT was EUR -65.2m vs the EUR -94.6/-90.1m Evli/consensus
   estimates.
 * Fuel costs were EUR 102m vs our EUR 126m estimate. Staff costs amounted to
   EUR 84m, compared to our EUR 95m estimate. All other OPEX+D&A amounted to EUR
   305m vs our EUR 340m estimate.
 * Cost per Available Seat Kilometer was 7.75 eurocents vs our estimate of 8.84
   eurocents.
 * Finnair sees Q1 losses due to Omicron notable but short-lived and as a
   result, in addition to increased fuel prices and incremental costs caused by
   the need to ramp up capacity for summer 2022, expects Q1’22 losses to be of a
   similar magnitude as in Q1’21 (EUR -143m in terms of EBIT). Finnair
   reiterates its previous estimate that the losses will continue during the
   entire H1’22. There’s prolonged uncertainty with respect to the opening of
   China and Hong Kong, while countries such as Japan and South Korea should
   open towards the end of Q2’22.
 * The EUR 200m cost savings programme’s full run-rate impact will be visible
   this year.

Open report


ELTEL - A CLEAR ESTIMATE BEAT

17.02.2022 - 09.30 | Earnings Flash

Eltel’s Q4 report delivered a clear positive surprise after a disappointing Q3
report. Sweden was able to break even, and positive development continues this
year as Eltel guides increasing operative EBITA margin.

Read more

 * Eltel Q4 revenue landed at EUR 226.3m vs the EUR 206.1m/207.0m Evli/consensus
   estimates, a decrease of 1% y/y.
 * EBITDA came in at EUR 14.5m, compared to the EUR 13.2m/13.4m Evli/consensus
   estimates. Operative EBITA was EUR 7.0m vs our EUR 4.8m estimate, meaning
   operative EBITA margin was 3.1% vs our 2.3% estimate, while EBIT amounted to
   EUR 6.9m vs the EUR 4.6m/4.9m Evli/consensus estimates. The results were a
   positive surprise especially considering record-high sick leave rates as well
   as further project postponements which were caused by the pandemic. The
   current winter environment in the Nordics, however, will negatively affect Q1
   results.
 * Profitability in Finland remained strong while Sweden was able to reach a
   positive result (operative EBITA margin was 1.4% vs our 0% estimate).
   Norway’s profitability was still decent while Denmark declined to a low 0.6%
   operative EBITA margin. Denmark’s decline was mainly due to a 35% y/y drop in
   revenue. Finnish top line declined a bit while Sweden and Norway both grew.
 * Eltel guides FY ’22 operative EBITA margin to increase.
 * The BoD proposes no dividend to be paid for the year.

Open report


INNOFACTOR - A SOFTER END TO THE YEAR

17.02.2022 - 09.30 | Earnings Flash

Innofactor’s Q4 results were below our expectations. Net sales amounted to EUR
17.5m (Evli EUR 18.6m), while EBITDA amounted to EUR 1.7m (Evli EUR 2.6m). Net
sales in 2022 are expected to increase from 2021 and EBITDA from comparable 2021
EBITDA of EUR 7.5m. Dividend proposal EUR 0.08 per share (Evli EUR 0.06).

Read more

 * Net sales in Q4 amounted to EUR 17.5m (EUR 18.3m in Q4/20), below our
   estimates (Evli EUR 18.6m). Net sales in Q4 declined 4.0% y/y but organically
   on par with Q4/20. Net sales increased in Norway and Denmark but decreased in
   Finland and Sweden.
 * EBITDA in Q4 was EUR 1.7m (EUR 1.6m in Q4/20), below our estimates (Evli EUR
   2.6m), at a margin of 9.5%. EBITDA was positive by a clear margin in all
   operating countries.
 * Operating profit in Q4 amounted to EUR 0.5m (EUR 0.4m in Q4/20), clearly
   below our estimates (Evli EUR 1.8m), at a margin of 3.0%.
 * Order backlog at EUR 72.3m, up 31% y/y. Innofactor received several
   significant orders in Q4, for instance a EUR 1.2m contract with a large
   Finnish manufacturing industry company.
 * Guidance for 2022: Innofactor’s net sales is expected to increase from 2021
   (EUR 66.4m) and EBITDA is expected to increase from EUR 7.5m, which would
   have been EBITDA without the proceeds of EUR 2.6m from the sale of the Prime
   business.
 * Dividend proposal: Innofactor’s BoD proposes a dividend of EUR 0.08 per share
   (Evli EUR 0.06).

Open report


SOLTEQ - INVESTMENTS WEAKENED PROFITABILITY

17.02.2022 - 08.40 | Earnings Flash

Solteq’s Q4 was below our lowered pre-Q4 expectations, with revenue at EUR 18.3m
(Evli EUR 18.0m) and adj. EBIT at EUR 1.4m (Evli EUR 2.0m). Guidance for 2022:
group revenue is expected to grow clearly and the operating profit to improve.
Dividend proposal EUR 0.10 per share (Evli EUR 0.11).

Read more

 * Net sales in Q4 were EUR 18.3m (EUR 16.4m in Q4/20), in line with our
   estimates (Evli EUR 18.0m). Growth in Q4 amounted to 11.4% y/y, of which the
   larger part was organic growth.
 * The operating profit and adj. operating profit in Q3 amounted to EUR 1.3m and
   1.4m respectively (EUR 1.8m/2.0m in Q4/20), below our estimates (Evli EUR
   2.0/2.0m). Solteq Software’s profitability was below expectations due to
   investments into product development and internationalization.
 * Solteq Digital: revenue in Q4 amounted to EUR 11.7m (Q4/20: EUR 10.6m) vs.
   Evli EUR 11.4m. Growth amounted to 10.3%. The adj. EBIT was EUR 1.4m (Q4/20:
   EUR 0.9m) vs. Evli EUR 1.2m. Demand in key areas, such as digital business
   and commerce solutions, is expected to remain good during 2022.
 * Solteq Software: Revenue in Q4 amounted to EUR 6.6m (Q4/20: EUR 5.8m) vs.
   Evli EUR 6.6m. The adj. EBIT was EUR 0.0m (Q4/20: EUR 1.1m) vs. Evli EUR
   0.8m. Growth was 13.3%. The business outlook is expected to remain positive.
 * Guidance for 2022: group revenue is expected to grow clearly and operating
   profit to improve.
 * Dividend proposal: Solteq’s BoD proposes a dividend of EUR 0.10 per share
   (Evli EUR 0.11).

Open report


ASPO - HIGH AND RESILIENT EBIT

17.02.2022 - 08.30 | Company update

Aspo’s Q4 adj. EBIT reached EUR 13.9m; we believe ESL’s and Telko’s results are
resilient while the guidance doesn’t appear to set the bar very high either for
H1 or H2.

Read more

Q4 adj. EBIT was very high, outlook still favorable for H1’22

Aspo Q4 revenue grew by 27% y/y to EUR 160m, somewhat above the EUR 153m/148m
Evli/cons. estimates. The EUR 13.9m adj. EBIT was clearly above the EUR 10.8m
estimates. Aspo’s H2’21 involved, in essence, a couple of positive profit
warnings as there were a few impairment losses which burdened the headline EBIT.
The cargo market situation was well-known and hence another record ESL EBIT was
in the cards; we expect some long-term pressure on the 16.5% ESL H2 EBIT margin,
although based on Aspo’s comments there shouldn’t be any imminent negative
factors. Forest, steel, and energy industries continue to drive robust cargo
volumes also in H1’22. Telko’s EBIT was a bit soft relative to our estimate but
still amounted to a very decent 6% margin. Leipurin recorded an impairment loss
of EUR 4.3m, but other than that the results were much as we expected.

We estimate EBIT well above EUR 40m in the coming years

The spot market for large vessels has slipped a bit from the recent tops, yet
ESL’s focus means results should be resilient even in the face of a marked drop.
The geopolitical tensions, should they happen to escalate, would cast some
uncertainty around the short-term performance of Telko and Leipurin, but in our
view any major long-term adverse effects would be unlikely given the fact that
both have a history of operating in challenging Eastern European countries. In
our opinion the flat EBIT guidance appears conservative, especially considering
the relatively undemanding H1’21 comparison figures and the fact that ESL’s
strong H2’21 performance should extend itself well this year. We make only minor
estimate revisions; our new FY ’22 EBIT estimate is EUR 43.4m (prev. EUR 42.4m).

Modest multiples given the guidance and LT positioning

We find Aspo’s current valuation level undemanding, not much more than 6x
EV/EBITDA and 10x EV/EBIT on our FY ’22 estimates, especially when we view a
positive profit warning much more likely than a negative one. We believe ESL can
well beat our estimates and our 5.8% EBIT estimate for Telko isn’t that high
either. We retain our EUR 14 TP and BUY rating.

Open report


ASPO - ESL Q4 EBIT TOPS ESTIMATES

16.02.2022 - 10.00 | Earnings Flash

Aspo’s headline EUR 8.8m Q4 EBIT missed estimates, however the shortfall stemmed
from Leipurin’s EUR 4.3m impairment loss. Telko’s EBIT was a bit soft relative
to what we expected, but ESL topped our estimate by a considerable margin.

Read more

 * Aspo Q4 revenue amounted to EUR 160.0m, compared to the EUR 153.2m/148.1m
   Evli/consensus estimates. EBIT, including Kauko, landed at EUR 8.8m vs the
   EUR 10.8m/10.8m Evli/consensus estimates.
 * ESL Q4 revenue was EUR 54.7m vs our EUR 49.3m estimate, while EBIT came in at
   EUR 9.8m vs our EUR 6.5m estimate.
 * Telko’s revenue amounted to EUR 73.6m, compared to our EUR 74.5m estimate.
   EBIT was EUR 4.4m vs our EUR 5.1m estimate. Telko’s short-term outlook
   remains positive but involves significant uncertainties due to the pandemic
   and the geopolitical situation in Eastern Europe.
 * Leipurin revenue was EUR 31.7m vs our EUR 29.4m estimate, while EBIT was EUR
   -3.6m vs our EUR 0.7m estimate. Leipurin recorded an impairment loss to the
   tune of EUR 4.3m. The foodservice business accounted for EUR 3.0m of the
   loss, while the remaining EUR 1.3m was attributable to machine manufacturing.
 * Other operations cost EUR 1.9m, compared to our EUR 1.5m estimate.
 * Aspo guides flat EBIT for FY ’22 (EUR 42.4m in FY ’21).
 * The BoD proposes EUR 0.23 per share dividend to be distributed, in addition
   to another distribution no more than EUR 0.22 per share at a later time,
   compared to the EUR 0.40/0.44 Evli/consensus estimates.

Open report


EXEL COMPOSITES - LONG-TERM EBIT TRAJECTORY INTACT

16.02.2022 - 09.15 | Company update

Exel’s Q4 EBIT was soft relative to estimates, yet demand doesn’t seem to abate
and in our view the US unit should, sooner or later, again reach the required
performance level. Long-term earnings potential therefore remains significant.

Read more

The EUR 1.0m Q4 adj. EBIT was soft relative to estimates

Q4 revenue grew 33% y/y to EUR 36.5m vs the EUR 32.0m/31.8m Evli/cons.
estimates. Buildings and infrastructure grew to be the largest industry and the
fact highlights how there are many industries besides Wind power driving growth.
Order intake was moderated due to the difficulties in the US and inflation had
some negative impact on Q4 EBIT, but Exel continues to lift its own pricing and
hence raw material price increases are not a major issue, at least not in the
long-term perspective. We gather Exel’s raw material inflation pace slowed down
somewhat late last year, which is not surprising considering the rate seen
earlier during the year. That said, raw material prices don’t seem to be
declining either and so the environment can still cause some short-term drag on
EBIT. We estimate most of the EUR 0.9m q/q profitability improvement was
attributable to the US unit.

We still estimate meaningful growth for this year

The US labor situation remains extraordinarily challenging and thus it will take
at least some additional quarters before Exel again reaches the high
single-digit EBIT margins it used to enjoy before the problems in the US
materialized. Exel is doing the best they can to hire and retain local
employees. Meanwhile demand appears to remain very strong across basically all
geographies and customer industries. We revise our FY ’22 revenue estimate to
EUR 150.7m (prev. EUR 146.8m), while our new EBIT estimate for this year is EUR
10.6m (prev. EUR 12.0m).

Long-term earnings potential continues to stand out

We believe Exel should have no trouble hitting EUR 150m top line especially when
the US unit continues to progress. Exel has previously been able to reach 10%
EBIT on a quarterly level (long-term target is above 10%). We expect FY ’22
results to still fall a lot short of the implied EUR 15m mark, and hence
long-term upside remains significant. Exel is valued around 5.5-7.0x EV/EBITDA
and 8.0-11.0x EV/EBIT on our FY ’22-23 estimates. Uncertainty around the US
limits upside in the short-term and we thus revise our TP to EUR 9 (10). We
retain our BUY rating.

Open report


MARIMEKKO - EARNINGS GROWTH SMOOTHENS

16.02.2022 - 09.15 | Company update

Marimekko delivered strong Q4 figures, outpacing our and consensus estimates.
Net sales development was very good in both domestic and international markets.
We downgrade our rating to HOLD (BUY) and adjust TP to EUR 79 (84).

Read more

Solid quarter
Marimekko came in strong with Q4 net sales of EUR 48.1m (+29% y/y). The growth
was driven by wholesale and retail sales in Finland as well as wholesale sales
in the APAC region and Scandinavia, while the EMEA region declined due to the
actions to control grey exports. Retail sales in North America developed very
strongly. Higher logistical costs reduced the gross margin to 57.9% (prev.
58.9%). Driven by increased net sales, the adj. EBIT improved by 17% y/y to EUR
7.6m (15.9% margin). Increased personnel (one-time bonus) and other costs
weakened the adj. EBIT margin from 17.4% to 15.9%. EPS amounted to EUR 0.72 and
the BoD proposed a dividend of EUR 3.60 (including an additional EUR 2
dividend).

Confirmation for international growth
International sales got back on a growth path in Q4’21 and the company guided
the segment’s largest market, the APAC region, to grow clearly in FY’22.
Segment’s strong development speaks about the increased brand awareness,
particularly seen in Asia. In FY’22, we expect int’l net sales to grow by 14%
y/y, while expecting domestic growth to slow down to 8% y/y due to the lack of
large one-time wholesale deliveries. In our estimates, group revenue amounts to
EUR 167.9m, and driven by increased logistical costs the gross margin falls
below the comparison period to 60%. Driven by reduced gross margin and increased
fixed costs, the adj. EBIT margin of 19.3% (adj. EBIT EUR 32.4m) falls also
short of the record high comparison period.

HOLD with a TP of EUR 79 (84)
With our revised estimates, Marimekko trades with a 22-23E EV/EBIT multiple of
19-18x. The company’s valuation has historically varied between EV/EBIT multiple
of 17-21x. With the slowdown in the earnings growth within the next few years
and the decline in the acceptable valuation level, we downgrade our rating to
HOLD (BUY) and adjust TP to EUR 79 (84).

Open report


SOLTEQ - SOME CONTINUED SOFTNESS SEEN

15.02.2022 - 09.30 | Preview

Solteq reports Q4 results on February 17th. We foresee some continued softness
due to the current environment but continue to expect earnings improvement in
2022. We retain our BUY-rating with a TP of EUR 6.2 (6.8).

Read more

Some softness expected in Q4
Solteq reports Q4 results on February 17th. Solteq’s Q3 results were softer than
anticipated, as deliveries for two large-scale retail customers were postponed
as a result of the impact of the global component shortage. Revenue still grew
by over 10%, mainly organically, and the adj. operating profit margin was at a
fairly decent 8.1%. We had previously expected fourth quarter figures to turn
back on track with the start-up of the postponed projects. With the
macroeconomic uncertainties still present we anticipate some softness to still
be seen in the fourth quarter and have slightly lowered our estimates, still
expecting fairly good growth but slightly lower margins y/y.

Potential remains but market uncertainties a disturbance
Solteq in our view remains in a good position to continue revenue and earnings
growth in 2022. We anticipate the recurring revenue from the implemented
Utilities business projects to start to show. We see that the demand for
Solteq’s solutions, in particular within utilities and ecommerce, should under
normalized circumstances remain at a healthy level. The market environment has
however been somewhat challenging and has not appeared to improve significantly
going into 2022. With the current uncertainties we have lowered our 2022e EBIT
estimates by some 9% but still see room for double-digit y/y growth in operating
profit. We expect revenue of EUR 76.3m and an adj. operating profit margin of
13.8%.

BUY with a target price of EUR 6.2 (6.8)
With our estimates revisions and current uncertainties, we adjust our TP to EUR
6.2 (6.8) and retain our BUY-rating. Our TP values Solteq at ~17x 2022 P/E,
which is still fairly low, and upside potential remains solid should the market
environment not threaten the earnings growth track.

Open report


EXEL COMPOSITES - LOTS OF GROWTH, SOFTISH PROFITABILITY

15.02.2022 - 09.30 | Earnings Flash

Exel’s Q4 results extended recent earnings reports trends to a certain degree.
Top line continued to grow a lot faster than was expected, but profitability was
still a bit soft relative to estimates. Exel made some progress with the
challenges in the US, but it remains unclear just how quick earnings will
improve this year.

Read more

 * Q4 revenue grew by 32.7% y/y and was EUR 36.5m vs the EUR 32.0m/31.8m
   Evli/consensus estimates. North America contributed by far the most to
   growth.
 * Wind power was EUR 8.3m vs our EUR 7.9m estimate while Buildings and
   infrastructure amounted to EUR 8.4m, compared to our EUR 8.5m estimate.
   Equipment and other industries landed at EUR 7.1m, clearly above our EUR 5.4m
   estimate.
 * Adjusted EBIT came in at EUR 1.0m vs the EUR 1.3m/1.4m Evli/consensus
   estimates. Exel USA’s profitability improved a bit q/q but continued to drag
   results.
 * Q4 order intake was EUR 30.5m, down by 8.8% y/y.
 * Exel guides flat revenue and increasing adjusted EBIT for FY ’22. In our view
   it is hard to guide increasing revenue this early in the year given the high
   comparison figure. Consensus estimates for FY ‘22 adjusted EBIT, at EUR
   10.5m, are clearly above the EUR 6.0m comparison figure and we see it is
   likewise difficult to give any stronger wording this early in the year.
 * The BoD proposes EUR 0.20 per share dividend to be distributed, compared to
   the EUR 0.25/0.22 Evli/consensus estimates.

Open report


MARIMEKKO - STRONG DEVELOPMENT CONTINUED IN Q4

15.02.2022 - 09.10 | Earnings Flash

Marimekko’s Q4 result outpaced our estimates and the company grew very strongly.
The guidance implies the trend to continue in 2022.

Read more

• Group net sales increased by 29% y/y to EUR 48.1m (41.6m/42.3m Evli/cons.).
The growth was driven by wholesale and retail sales in Finland as well as
wholesale sales in the APAC region and Scandinavia. Retail sales in North
America developed very strongly.
• Finland: Net sales grew by 32% and amounted to EUR 30.6m (26.8m/26.8m
Evli/cons.). Non-recurring promotional deliveries supported the good development
of wholesale sales.
• International: Revenue increased by 23% y/y to EUR 17.4m (14.7m/15.5m
Evli/cons.), representing 36% of total net sales. Sales development was strong
in North America (+57%), Scandinavia (+40%), and the APAC region (+36%). The
EMEA region (-21%) declined due to actions to control gray exports.
• Gross profit totaled EUR 27.8m (25.1m Evli). The company reported a gross
margin of 57.9% (60.3% Evli). The margin was affected by increased logistical
costs.
• Adj. EBIT improved by 35% y/y to EUR 7.6m (5.8m/6.0m Evli/cons.), meaning a
15.8% margin. The improvement in profitability was mainly driven by increased
net sales.
• EPS grew by 35.6% y/y to EUR 0.72 (0.54/0.55 Evl/cons.).
• Dividend proposal: The BoD proposes FY’21 DPS of EUR 1.60 and extraordinary
DPS of EUR 2.00 (1.60/1.60 Evli/cons.). In addition, the board has decided to
pay FY’20 DPS of EUR 1.00.
• Guidance 2022: Revenue is expected to be above that of the comparison period
(2021: EUR 152.2m). Adj. EBIT margin is expected to be between 17-20% (2021:
20.5%).

Open report


VAISALA - EXPECTING STRONG EARNINGS GROWTH

14.02.2022 - 14.45 | Preview

Vaisala reports its Q4 result on Friday. In Q4, we expect revenue growth to
scale till bottom rows and earnings improvement of 60% y/y. We retain our
HOLD-rating and TP EUR of 43.

Read more

Expecting a clear earnings improvement in Q4’21
We expect solid net sales growth of 17.4% from a weak comparison period, topline
totaling EUR 125.5m vs. 123.4m cons. The growth is driven by both BUs (W&E
+13.4% & IM +24.1%). We expect group adj. EBIT to improve by 29.6% y/y to EUR
18.3m (14.6% margin) vs. 16.8m cons. In our estimates, W&E contributes the EBIT
with EUR 7.8m (10.3% margin) and IM with EUR 10.9m (22% margin) respectively.
With the profitability improvement, we expect clear 60% EPS growth. We estimate
the BoD to propose a dividend of EUR 0.63 vs. 0.64 cons.

Strategy execution continued, but component shortage disturbs topline growth in
2022
The company has successfully continued its strategy execution by its solid
revenue growth in both BUs. The company also acquired software company
AerisWeather to strengthen its growth in DaaS and SaaS recurring revenue
businesses during Q1’22. Vaisala obtains valuable data-service and software
development capabilities through the acquisition in addition to a few million
recurring revenue impact. In 2022, we expect the growth pace to slow a bit down
to 8.3% mainly due to uncertainties regarding component availability. Despite
the supply chain issues, we expect solid 16% earnings growth in 2022.

HOLD with a target price of EUR 43
Vaisala has historically been trading with EV/EBITDA multiple around 20x.
Currently, with a 21-22E EV/EBITDA of 22-19x, the company trades with a slight
premium compared to its peers, but given Vaisala’s quality and lower risk
profile, we find the premium justified. With our estimates intact, we retain our
HOLD-rating and TP of EUR 43.

Open report


RAUTE - EBIT IMPROVES FROM A LOW BASE

14.02.2022 - 09.35 | Company update

Raute’s Q4 report didn’t provide that many news as recent profitability
challenges are familiar. Demand stays high, but inflation means H1’22 EBIT is to
remain well below potential. We continue to expect gradual improvement.

Read more

Results will improve this year (and next)

Raute’s Q4 revenue grew 13% y/y to EUR 44m, while EBIT was EUR 0.5m vs our EUR
-0.6m estimate; the gap was due to the allocation of cloud-based IT project
costs, which were spread retroactively over many quarters. Raute’s Q4 EBIT was
still a far cry from potential, but order momentum continued stronger than we
expected and even Raute was surprised by the EUR 50m in Q4 orders. Q1 orders
have remained robust, however not quite as high as in Q4, and we expect the
figure to top EUR 30m. Raute can meet the current level of demand, but delivery
times have naturally been prolonged. Raute guides improving EBIT, but various
factors, including inflation, will make the precise gradient hard to gauge. The
IT project also continues to burden short-term results yet will contribute to
EBIT going forward.

Inflation will still burden near-term results

We make no significant changes to our estimates; we expect Raute to reach around
5% EBIT margin this year. H1’22 EBIT will still suffer from inflation as the
orders signed earlier materialize, but the situation should improve somewhat
throughout the year as the order book rolls forward and so catches up with
higher component prices. We revise our FY ’22 EBIT estimate to EUR 8.6m (prev.
EUR 9.0m), while our new FY ’23 estimate is EUR 11.3m (prev. EUR 11.0m). The
inflationary environment’s precise impact on the order book’s unfolding remains
to be seen, but in our view the current active order level means EBIT is set to
improve for at least a few years.

We retain our EUR 22 TP and BUY rating

Raute’s valuation remains undemanding, around 5-6x EV/EBITDA and 6-8x EV/EBIT on
our FY ’22-23 estimates, and in our view some caution is in order considering
the uncertainty inflation imposes on near-term results. Yet we believe Raute is
poised to again reach EUR 10m EBIT in the coming years. That mark would imply
only around 6% EBIT margin, a level Raute has managed to top with some EUR 150m
annual revenue, while current demand in our view can support a top line EUR
20-30m higher than that.

Open report


ETTEPLAN - EXPECTATIONS SET QUITE HIGH FOR 2022

11.02.2022 - 09.40 | Company update

Etteplan’s Q4 figures were quite in line with expectations. The 2022 guidance
implies solid growth, which we currently have some challenges in envisaging.

Read more

Q4 quite in line with expectations
Etteplan reported Q4 results quite in line with expectations. Revenue grew some
21% to EUR 85.3m (EUR 82.9m/82.9m Evli/cons.), with organic growth of some 15%.
EBIT amounted to EUR 7.8m (EUR 7.9m/8.1m Evli/cons.). Growth was particularly
good in Software and Embedded solutions, although profitability suffered
slightly from growth investments and the increased use of subcontracting due to
the challenges with availability of professionals within certain areas.

Guidance implies solid growth
Etteplan gave a rather good guidance, in particular in terms of growth, with
revenue expected to amount to EUR 340-370m and EBIT to EUR 28-32m, with pre-Q4
expectations of EUR 338.3m/326.9m (Evli/cons.) and 29.6m/29.6m (Evli/cons.)
respectively. Taking into account the inorganic growth from the recent
acquisitions of Cognitas and Syncore Technologies along with acquisitions made
during 2021 the mid-range of the guidance would imply organic growth somewhere
near 10%, which although certainly not unachievable, currently seems somewhat
challenging due to the pandemic and some demand uncertainties. Growth could of
course still be boosted by further acquisitions in line with the company’s
strategy. The good organic growth in 2021 (8.9% y/y) was also skewed by the weak
comparison period. We have made only slight changes to our 2022 estimates,
expecting revenue of EUR 344.5m and EBIT of EUR 29.3m. Some weakness is seen
during the start of 2022 due to the pandemic but we expect relative
profitability and growth to pick up going forward.

HOLD with a target price of EUR 17.5 (17.0)
With only smaller changes to our estimates, we adjust our target price to EUR
17.5 (17.0), valuing Etteplan at approx. 20x 2022e P/E. Current valuation
appears quite fair looking at peers and historical multiples. We retain our
HOLD-rating.

Open report


RAUTE - A VERY STRONG ORDER INTAKE

11.02.2022 - 09.30 | Earnings Flash

Raute’s Q4 figures didn’t include that many surprises as the company had already
disclosed some preliminary info on FY ’21 results. The EUR 50m order intake was
nevertheless a positive surprise considering Raute booked no big orders during
the quarter.

Read more

 * Q4 revenue grew by 13% y/y to EUR 44.1m. Project deliveries amounted to EUR
   29.1m vs our EUR 27.0m estimate, while technology services stood at EUR 15.0m
   vs our EUR 17.0m estimate.
 * EBIT was EUR 0.5m, compared to our EUR -0.6m estimate. We see the difference
   was mostly due to the fact the IT project costs were booked over several
   quarters.
 * Order intake was EUR 50m vs our EUR 29m estimate. Project deliveries orders
   were EUR 36m, compared to our EUR 13m estimate, which we consider a very
   strong figure as there were no big orders. Technology services amounted to
   EUR 14m vs our EUR 16m estimate.
 * Order book stood at EUR 158m at the end of Q4 (EUR 94m a year ago).
 * Raute guides growing revenue and improving EBIT for FY ’22.
 * The BoD proposes a dividend of EUR 0.80 per share to be paid out vs our EUR
   0.85 estimate.

Open report


VERKKOKAUPPA.COM - A SMALL BREAK FOR MOMENTUM OF GROWTH

11.02.2022 - 08.45 | Company update

The slowdown of consumer electronics market pushed Verkkokauppa.com’s Q4 net
sales down by 4% y/y. We expect the softness in the market to continue also
during H1’22. We retain our HOLD rating and TP of EUR 6.5.

Read more

Tough quarter behind
The company’s net sales decreased by 4% y/y to EUR 168.9m driven by weak demand
for its core categories. The growth was good in the B2B segment as well as in
Computers, Games, Sports, and Toys products categories. The online transition
continued and e-commerce represented 63% of total net sales. Despite tough
market conditions, gross margin improved to 15.5% (15.1%), mainly driven by
category mix and wise pricing decisions. Adj. EBIT declined by 14% y/y to EUR
5.3m (3.2% margin) due to lower sales. EPS amounted to EUR 0.09 and BoD proposed
a dividend of EUR 0.246.

Guidance implies growth to continue
The company guides net sales growth and possible profitability improvement
during 2022. Revenue is estimated to reach EUR 590-640m and EBIT EUR 19-15m.
Driven by weakened visibility to the consumer electronics market, we have made
some adjustments to our estimates. In 2022, we expect net sales of EUR 610.0m
and EBIT of EUR 22.3m (3.7% margin). The growth is driven by online transition
and good development of the evolving categories. In Q1’22, we expect the core
categories to still suffer from weak demand and net sales amount to EUR 133.6m
and EBIT totaling EUR 3.9m (2.9% margin). Jätkäsaari’s automated warehouse is
estimated to be in production until the end of Q1’22 and we are expecting cost
savings to kick in during H2’22 as the utilization rate of Vantaa rental
warehouse will decrease.

HOLD with a target price of EUR 6.5
With our revised estimates, the company valuation is still slightly elevated.
The company’s peers trade with 22E P/E 14-17x, while Verkkokauppa.com is trading
at the upper bound of the range. We retain our HOLD rating and TP of EUR 6.5.

Open report


ETTEPLAN - QUITE AS EXPECTED, GOOD GUIDANCE

10.02.2022 - 13.45 | Earnings Flash

Etteplan's net sales in Q4 amounted to EUR 85.3m (EUR 82.9m/82.9m Evli/cons.)
and operating profit to EUR 7.8m (EUR 7.9m/8.1m Evli/cons.). Dividend proposal:
EUR 0.40 per share (EUR 0.40/0.40 Evli/Cons.). 2022 guidance: revenue EUR
340-370m and operating profit EUR 28-32m.

Read more

 * Net sales in Q4 were EUR 85.3m (EUR 70.3m in Q4/20), slightly above our
   estimates and consensus estimates (EUR 82.9m/82.9m Evli/Cons.). Growth in Q4
   amounted to 21% y/y, of which 15.2% organic growth.
 * Operating profit in Q4 amounted to EUR 7.8m (EUR 7.1m in Q4/20), in line with
   our estimates and slightly below consensus (EUR 7.9m/8.1m Evli/cons.), at a
   margin of 9.2%. EBITA amounted to EUR 9.0m vs. our estimate of EUR 8.9m.
 * EPS in Q4 amounted to EUR 0.26 (EUR 0.23 in Q4/20), above our estimates and
   consensus estimates (EUR 0.24/0.24 Evli/cons.).
 * Engineering Solutions net sales in Q4 were EUR 47.1m vs. EUR 47.6m Evli.
   EBITA in Q4 amounted to EUR 5.0m vs. EUR 4.9m Evli.
 * Software and Embedded Solutions net sales in Q4 were EUR 23.4m vs. EUR 21.5m
   Evli. EBITA in Q4 amounted to EUR 2.4m vs. EUR 2.8m Evli.
 * Technical Documentation Solutions net sales in Q4 were EUR 14.3m vs. EUR
   13.6m Evli. EBITA in Q4 amounted to EUR 1.7m vs. EUR 1.5m Evli.
 * Dividend proposal: Etteplan’s BoD proposes a dividend of EUR 0.40 per share
   (EUR 0.40/0.40 Evli/Cons.).
 * Guidance for 2022: Revenue is estimated to be EUR 340-370m (EUR 338.3m/326.9m
   Evli/cons.) and the operating profit is estimated to be EUR 28-32m (EUR
   29.6m/29.6m Evli/cons.).

Open report


PIHLAJALINNA - STRATEGY AND EBIT ON TRACK

10.02.2022 - 09.35 | Preview

Pihlajalinna reports Q4 results on Fri, Feb 18. We make small positive revisions
to our Q4 estimates as we expect Covid-19 services to have remained high due to
Omicron, but we don’t expect Pihlajalinna to guide much more than flat EBIT for
FY ’22 as M&A integration has barely begun.

Read more

We make small upward revisions to our Q4 estimates

Pihlajalinna’s EBIT continued to improve in Q3 despite an increase in
outsourcing costs for which the company hadn’t yet received much compensation.
The Finnish virus situation worsened again in Q4, and we believe Omicron has had
a slight positive net effect on Q4 top line and EBIT; we previously expected
Covid-19 services revenue to decline some in Q4 but we now estimate it to have
remained pretty much flat q/q. We update our Q4 revenue estimate to EUR 156.4m
(prev. EUR 153.9m) and thus expect y/y growth to have remained around 14%. We
estimate y/y EBIT improvement to have steepened a bit in Q4 and now estimate Q4
EBIT at EUR 9.2m (prev. EUR 8.9m).

The acquisition will limit EBIT guidance in H1’22

Pihlajalinna has just completed the acquisition of Pohjola Hospital, a chain
with a focus on orthopaedics and some EUR 60m in revenue, which make it a target
of reasonable size and complementary fit for Pihlajalinna. The target turned a
loss of EUR 10m in terms of EBIT in FY ’20 due to a dip in volumes; the losses
might have narrowed somewhat already in FY ’21, however this hadn’t happened
during the first 4 months of the year, but we expect losses or at least margin
dilutive impact in H1’22. Margin accretion should occur in FY ’23 as insurance
customers drive volumes and Pihlajalinna achieves cost synergies. We expect more
specific updates to financial targets either in connection with the Q4 report or
later during the spring. We continue to expect meaningful EBIT upside beyond
this year and last, although we believe Pihlajalinna will not guide much more
than flat or slightly improving EBIT for FY ’22 at such an early point when the
target’s integration has only started.

Both margins and multiples remain on the modest side

Our view is unchanged as Pihlajalinna trades ca. 6.5-8.0x EV/EBITDA and
13.0-16.5x EV/EBIT on our FY ’21-22 estimates. The multiples are well below
peers’ while margins remain at relatively modest levels. We retain our EUR 14 TP
and BUY rating.

Open report


VERKKOKAUPPA.COM - TOUGH Q4, ACQUISITION CAUGHT THE ATTENTION

10.02.2022 - 09.00 | Earnings Flash

Verkkokauppa.com’s Q4 topline fell short of our expectations. Net sales declined
by 4% y/y to EUR 168.9m, while adj. EBIT amounted to EUR 5.3m (3.2% margin). The
company acquired e-ville.com online store to strengthen its private label
offering.

Read more

• Q4 revenue declined by 4% y/y, totaling EUR 168.9m vs. 183.4m/183.7m
Evli/cons. Growth was good in B2B, Computers, Games, Sports and Toys, while core
categories suffered from weak demand. Gross margin improved to 15.5% (prev.
15.1%).
• Online sales represented 63% (prev. 62%) of total sales.
• Consumer segment represented 72% of total sales. B2B sales increased by 11%
y/y, representing 20% of total sales. Exports segment is still lacking and
represented 7% of total sales.
• Adj. EBIT amounted to EUR 5.3m (3.2% margin) vs. 5.5m/5.5m Evli/cons.
• EPS was EUR 0.09 vs. 0.09/0.12 Evli/cons.
• Board of Directors proposes dividend of EUR 0.246 vs. 0.25/0.25 Evli/cons.
• 2022 guidance: Net sales of EUR 590-640m and EBIT of EUR 19-25m.
• Last night, the company announced its acquisition of Finnish e-retailer
e-ville.com. The acquisition supports Verkkokauppa.com's strategy to strengthen
and expand its assortment in its own brands. E-ville.com generated net sales of
EUR 10m and EBIT of EUR 0.5m (5% margin) during 4/2020-3/2021. The preliminary
purchase price amounts to EUR 5.3m and is financed with cash (EUR 3.3m) and a
special offering (EUR 2.0m). The parties have also agreed to additional purchase
price installments of up to EUR 6.7m if certain sales-related terms are met. The
preliminary purchase price is valued at approx. same multiples as
Verkkokauppa.com is trading (EV/S: 0.5x vs. 0.5x and EV/EBIT: 11x vs. 14x). We
will open the acquisition more in our company update (published tomorrow).

Open report


FINNAIR - COST UNCERTAINTY SURFACES

09.02.2022 - 10.00 | Preview

Finnair reports Q4 results Thu, Feb 17. In our view the latest pandemic twists
do not stage any significant further operational challenges for Finnair, yet we
believe valuation has inched ahead of itself amid cost uncertainty. Our TP is
now EUR 0.60 (0.65); our new rating is SELL (HOLD).

Read more

Finnair will continue to lag peers especially in H1’22

Q4 RPK was very close to what we had estimated despite the onset of Omicron; the
latest variant(s) have indicated how there’s robust pent-up travel demand as
traffic figures continued to grow in December despite uncertainty related to
restrictions. Meanwhile Finnair’s flows continue to lag those of Western peers
as Asian volume recovery is further delayed. We believe China is still set to
open in H2’22, but we now expect Japan and South Korea not to contribute much
before Q2’22. In our view the Asian lag isn’t a major issue for Finnair
considering the measures taken to reinforce balance sheet as well as the fact
that cash flow already turned positive in Q3. The short as well as long term
effects of Omicron are hard to discern because the infection peak happens to
play out over months which are very different in terms of seasonal demand, and
it’s still too early to say whether the variant might accelerate the pandemic
towards its end.

OPEX cuts help but jet fuel prices have continued to gain

Jet fuel prices have continued to soar, the spot rate up by some 15% in the past
three months, meaning the achieved operating expenditure cuts will be valuable
in securing profitability during the quarters and years ahead. We expect Q1’22
EBIT to remain in the red similarly as in Q4’21, roughly to the tune of EUR
100m, while we believe some improvement will happen in Q2 but not nearly enough
to reach break-even. We make only very minor downward revisions to our volume
and revenue estimates, but we revise our FY ’22 EBIT estimate down to EUR -11m
(prev. EUR 30m) and that for FY ’23 down to EUR 164m (prev. EUR 232m).

Valuation seems to have turned dear amid cost uncertainty

Many carriers’ valuations have advanced in the past few months, and thus Finnair
also arguably deserves some further boost. Finnair’s recovery will however take
longer than those of peers; the company close 15x EV/EBIT on our FY ’23
estimates, a slight premium relative to a sector that seems itself fully valued.
Our TP is now EUR 0.60 (0.65); our new rating is SELL (HOLD).

Open report


ETTEPLAN - SET FOR CONTINUED GOOD GROWTH

08.02.2022 - 09.45 | Preview

Etteplan reports Q4 results on February 10th, with expectations of rather good
growth and margins. Growth is set to continue in the double-digits in 2022 with
the recent acquisitions.

Read more

Rather good Q4 figures expected
Etteplan reports Q4 results on February 10th. Etteplan’s Q3 results were on the
softer side due to the vacation season and a slower start to projects as well as
the global component shortage. Etteplan’s organic growth investments also
started to pick up, with the headcount up some 4% q/q (partly from
acquisitions), which had a slight impact on profitability. We expect revenue
growth of 17.9% to EUR 82.9m (cons. 82.9m), with pickup in demand from the
weaker comparison period and made acquisitions. We expect a quite good level of
profitability, although below the comparison period, with growth investments
having picked up. We expect an EBIT of EUR 7.9m (cons. 8.1m). The company
estimates 2021 revenue to be EUR 295-310m (Evli EUR 297.7m) and EBIT of EUR
25-28m (Evli 25.9m). Our Q4 estimates are intact ahead of the results.

Acquisitions boosting 2022 growth expectations
Etteplan recently acquired technical information lifecycle management company
Cognitas GmbH and technology services company Syncore Technologies Ab, focusing
on embedded systems. The combined historic revenue of the acquired companies is
at around EUR 20m. We have adjusted our estimates for the acquisitions,
expecting 2022 revenue of EUR 338.3m, for a y/y growth of 13.6%. We expect EBIT
of EUR 29.6m at an 8.8% margin, on par with expected previous year levels.
Margin uncertainty relating to growth investments and market environment is
present but should the growth investments translate into organic growth as
planned, then healthy margins should reasonably be expected.

HOLD with a target price of EUR 17.0
We retain our target price of EUR 17.0 and HOLD-rating. Current valuation on our
estimates appears quite elevated compared with peers, with 2022E P/E of ~20x.

Open report


RAUTE - ORDER BOOK WILL DRIVE RESULTS

07.02.2022 - 09.30 | Preview

Raute reports Q4 results on Fri, Feb 11. Last year was another gap in terms of
profitability, but Raute has managed to stack up a record-high order book in the
past year or so. We make some estimate revisions but continue to expect steep
earnings growth for this year and beyond.

Read more

Q4 results were still burdened by various factors

Raute gave preliminary info on FY ’21 results, according to which EBIT remained
negative. A large part of this negative revision was due to the agenda decision
on cloud-based IT systems, which dictates Raute to expense EUR 2.9m of costs
associated with a project capitalized earlier. EUR 2.0m will be booked for FY
’21 and EUR 0.9m retroactively for FY ’20. The booking decision is not a major
issue from financial performance standpoint, but Q4 figures were also burdened
by certain problems of varying acuteness, including infections which halted the
main production plant’s operations. Labor issues exacerbated the problem during
a busy season, and component availability challenges reduced top line while
price inflation weakened EBIT.

We expect improving EBIT over the year and beyond

Raute’s order book reached a record EUR 150m in Q3 and hence the company is
poised to turn a profit again this year. Just how much Raute’s profitability
will improve in FY ’22 is by far the most important question because there’s not
that much to discuss with respect to the adequacy of current demand and
workload. Raute’s business model does not make very specific guidance practical
and so we believe Raute will at this point guide only improving profitability.
We would be surprised by any stronger wording this early in the year. We have
made only relatively small revisions to our estimates. We now estimate FY ’22
revenue at EUR 164.0m (prev. EUR 162.2m) and EBIT at EUR 9.0m (prev. EUR 10.0m).
This represents a steep gain from last year yet still well short of the
company’s long-term potential.

Earnings multiples appear by no means demanding

Raute trades at multiples of some 6.0-7.5x EV/EBITDA and 8.5-10.5x EV/EBIT on
our FY ’22-23 estimates. Raute is the leader in a cyclical niche and so there
aren’t that relevant peers, but the multiples are low relative to Nordic capital
goods names at a time when Raute’s profitability is expected to remain subdued.
Our TP is now EUR 22.0 (26.5); we retain our BUY rating.

Open report


CONSTI - STEADILY MOVING FORWARD

07.02.2022 - 09.30 | Company update

Consti’s Q4 results were on the softer side, with some performance challenges in
two regional business units. The guidance implies rather healthy margins in
2022. We retain our BUY-rating with a TP of EUR 14.0 (14.5).

Read more

Q4 results on the softer side
Consti reported Q4 results that were on the softer side. Revenue amounted to EUR
82.6m (EUR 86.9m/86.4m Evli/Cons.), with growth of 5.8% y/y. Profitability
declined y/y with EBIT amounting to EUR 3.0m (EUR 3.7m/3.4m Evli/cons.).
Profitability was impacted by the performance of two regional business units,
where corrective actions are ongoing. The order backlog development was on a
good track, with new orders of EUR 66.9m and the order backlog up 28.4% y/y to
EUR 275.1m. Consti’s BoD proposes a dividend of EUR 0.45 per share (EUR
0.35/0.41 Evli/cons.).

Expect revenue and earnings growth in 2022
Consti’s estimates that its operating result for 2022 will be EUR 9-13m, in line
with our and consensus pre-Q4 estimates (EUR 11.0m/11.5m Evli/cons.). No
guidance was given on revenue but activity is seen to be higher going into this
year compared with the same time in the previous year. The acquisition of
RA-Urakointi is also set to boost revenue. We have only made small tweaks to our
2022 estimates, expecting revenue of EUR 309.7m (prev. EUR 314.3m) and EBIT of
EUR 10.9m (prev. EUR 11.0m). The situation with construction material prices and
availability still pose some margin risks going into 2022, with prices still on
elevated levels and material availability uncertainty. The market demand
situation appears to be rather adequate, but uncertainties due to the pandemic
continue to impact on demand from corporations

BUY with a TP of EUR 14.0 (14.5)
With only small estimate revisions we finetune our TP to EUR 14.0 (prev. 14.5)
per share, valuing Consti at approx. 14.0x 2022 P/E, and retain our BUY-rating.
Our target price puts valuation quite in line with both the Nordic construction
company peer and building installations and services company peers.

Open report


VERKKOKAUPPA.COM - SOFT MARKET WEAKENS Q4 FIGURES

04.02.2022 - 11.20 | Preview

Verkkokauppa.com reports its Q4 result next Thursday. We have made some
revisions to our near-term estimates as a result of soft market condition in
consumer electronics goods. We downgrade our rating to HOLD (BUY) and adjust TP
to EUR 6.5 (10).

Read more

Soft market environment seems to continue
After strong H1’21 the consumer electronics market turned soft and the market
participants have indicated that the trend has continued also in Q4. Part of the
consumer expenditure has moved from consumer goods to services as COVID
restrictions were removed during H2’21 and Finland’s decreased consumer trust
might indicate the lower attraction for consumption in general. In our
understanding, market performance was below expectations during important
campaigns and the new Omicron variant has increased the uncertainty during
higher-margin Christmas sales.


Estimate revision ahead of Q4
Based on the weakened market conditions, we have tweaked our near-term
estimates, expecting Q4 net sales of EUR 184.3m (prev. 194.5m) vs. 188m cons.
and an EBIT of EUR 5.5m (prev. 6.5m) vs. 5.9m cons. Our Q4 growth estimate of
4.7% is driven by strong performance in B2B and evolving categories. The
increased share of evolving categories partially offsets the decline in the
margin caused by price-driven competition. In 2021, we expect net sales of
589.8m vs. 594m cons. and an EBIT of EUR 20.5m vs. 21m cons. For 2022-23E, we
are expecting a net sales growth of 7.2% and 8.1% respectively as well as an
EBIT margin of 3.7% and 4.2% respectively. We expect the soft market to
continue, lowering the growth pace during H1’22. We estimate a dividend proposal
of EUR 0.25 vs. 0.25 cons.

HOLD with a target price of EUR 6.5
With our revised estimates, the company is trading with a P/E multiple of 17.5x
(22E), which is above its peer group median. Given the weakened market
environment, we have taken more cautious stand. We don’t see room for upside in
the valuation, and the expected return is not met with a 3.7% dividend yield. We
downgrade our rating to HOLD (BUY) and adjust TP to EUR 6.5 (10).

Open report


SRV - DOWNGRADE TO HOLD

04.02.2022 - 09.55 | Company update

SRV’s Q4 results were on the weaker side but operatively slightly above our
estimates. With the current uncertainties we struggle to see realization of
valuation upside and downgrade to HOLD (BUY) with a TP of EUR 0.54 (0.60).

Read more

Operatively slightly better than expected
SRV reported Q4 results, which operatively in fact slightly beat our estimates.
Revenue amounted to EUR 336.3m (EUR 316.0m/316.0m Evli/Cons.) while the
operative operating profit amounted to EUR -4.6m (Evli EUR -5.5m). The operating
profit however fell below expectations to EUR -11.5m (EUR -5.5m/-0.8m
Evli/cons.). SRV also wrote down the entire value of its holdings and
receivables relating to the shopping centre 4Daily, due to weak occupancy rates
and profitability, which had an EUR 6.1m negative impact on financial expenses.
The company estimates revenue in 2022 to amount to EUR 800-950m and operative
operating profit to improve on 2021. The profitability guidance could have
signalled more strength but reflects the current market uncertainties.

Profitability potential but also uncertainties
We now expect revenue of EUR 863.8m (prev. EUR 938.5m) and operative operating
profit of EUR 21.0m (prev. 29.1m). We expect revenue to decline within housing
construction given the still low number of developer contracted housing unit
start-ups. Uncertainty relating to profitability development is quite high.
Development could be substantial y/y, as the implied underlying profitability
excl. the Tampere Areena project in 2021 would have been fair. The situation
with construction material pricing and availability however still poses a risk.
Lower volumes and fewer expected potentially higher margin developer contracted
housing unit completions are also to be taken into consideration.

HOLD (BUY) with a target price of EUR 0.54 (0.60)
On our lowered estimates and the prevailing geopolitical uncertainties and
additional shopping centre woes we see that the potential realization of
valuation upside from exits and profitability improvement is currently beyond
grasp. We lower our target price to EUR 0.54 (0.6) and rating to HOLD (BUY).

Open report


SUOMINEN - SOFT START FOR THE YEAR

04.02.2022 - 09.45 | Company update

Suominen’s Q4 performance didn’t meet estimates, at least in terms of
profitability, and FY ’22 guidance also disappointed as the issues which
surfaced last summer continue to trouble in the short-term.

Read more

Certain customers still suffer from high inventories
Suominen’s Q4 revenue grew by 4% y/y to EUR 115.6m, ahead of the EUR
113.0m/113.3m Evli/cons. estimates. Europe amounted close to what we expected,
while Americas was ahead, but gross profit was only EUR 8.4m vs our EUR 14.4m
estimate. Suominen’s pricing improved but not to the extent we expected, and
hence high variable costs ate margins. The pandemic also caused plant-level
problems. The EUR 9.0m EBITDA benefited from cost cuts but didn’t meet the EUR
12.1m/12.6m Evli/cons. estimates. Some customers’ high demand resumed, but
others continued to languish as inventories remained elevated. There’s now a
short-term see-saw pattern in demand which manifests itself in y/y lower Q1’22
top line. The demand issues are very customer-specific but happen to impact
Americas for the most part. There seem to have been no major changes in this
respect. Suominen expects end consumer demand to remain above pre-pandemic
levels, and the picture should again improve in Q2.
We cut especially H1’22 estimates
Raw materials prices have overall stabilized, but there’s been mixed development
as e.g. pulp has declined while viscose has advanced. Meanwhile US logistics
issues persist, and transportation costs remain high. The completed investments,
on the other hand, pose no major ramp-up costs. We cut our FY ’22 revenue
estimate to EUR 455m (prev. EUR 467m) and that for EBITDA to EUR 40.8m (prev.
EUR 50.9m). We cut FY ’23 profitability estimates by ca. EUR 2-3m. The estimate
cuts concern particularly H1’22, from where we expect improvement.
Margins and multiples are low relative to peers
Suominen’s multiples remained low before the report, but they still didn’t
sufficiently reflect the persistent current uncertainty. Suominen is valued
around 5.0-6.5x EV/EBITDA and 8.0-12.5x EV/EBIT on our FY ’22-23 estimates. The
absolute multiples are not that low for this year, but we expect improvement
over the year; Suominen remains valued below peers while margins are also low.
Our new TP is EUR 5 (6); we retain our BUY rating.

Open report


CONSTI - GUIDANCE IN LINE WITH EXPECTATIONS

04.02.2022 - 09.00 | Earnings Flash

Consti's net sales in Q4 amounted to EUR 82.6m, below our and consensus
estimates (EUR 86.9m/86.4m Evli/cons.), with growth of 5.8% y/y. EBIT amounted
to EUR 3.0m, below our and consensus estimates (EUR 3.7m/3.4m Evli/cons.). The
BoD proposes a dividend of EUR 0.45 per share (EUR 0.35/0.41 Evli/cons.).
Operating result in 2022 is expected to be EUR 9-13m.

Read more

 * Net sales in Q4 were EUR 82.6m (EUR 78.1m in Q4/20), below our and consensus
   estimates (EUR 86.9m/86.4m Evli/Cons.). Sales grew 5.8% y/y.
 * Operating profit in Q4 amounted to EUR 3.0m (EUR 3.0m in Q4/20), below our
   and consensus estimates (EUR 3.7m/3.4m Evli/cons.), at a margin of 3.6%.
   During Q4 the increase in construction costs had a somewhat greater impact
   than in the beginning of the year.
 * EPS in Q4 amounted to EUR 0.3 (EUR 0.27 in Q4/20), below our consensus
   estimates (EUR 0.35/0.32 Evli/cons.).
 * The order backlog in Q4 was EUR 218.6m (EUR 177.9m in Q4/20), up by 22.9%.
   Order intake was EUR 66.9m in Q4 (Q4/20: EUR 54.3m).
 * Free cash flow amounted to EUR 6.1m (Q4/20: EUR 3.6m).
 * Consti’s BoD proposes a dividend of EUR 0.45 per share (EUR 0.35/0.41
   Evli/cons.).
 * Guidance for 2022: Operating profit is expected to be between EUR 9-13m. The
   guidance is well in line with our estimate of EUR 11.0m and EUR 11.5m
   consensus estimates.

Open report


CAPMAN - EARNINGS OUTLOOK STILL VERY FAVOURABLE

04.02.2022 - 08.30 | Company update

CapMan’s Q4 profitability beat expectations to finish an overall solid year.
Earnings are set to pick up further in 2022 driven by carried interest and our
views on CapMan remain clearly positive.

Read more

2021 was a solid year overall
CapMan reported solid Q4 results, rounding of a year of clear earnings
improvement. The operating profit amounted to EUR 12.2m, beating both our and
consensus estimates (EUR 10.7m/9.4m Evli/cons.). Y/y the operating profit
improved by 262%. The Management Company business saw good continued growth,
aided by a ~EUR 700m net increase in AUM during 2021, with management fees
surpassing EUR 10m during the last quarter. The Services business also continued
good growth, with CaPS showing profitable growth and JAY Solutions profitability
seen to start to pick up. The Investment business returns were strong also in
the final quarter and the main driver behind CapMan’s 2021 earnings. CapMan as
expected proposes a dividend of EUR 0.15 per share (0.15 Evli/cons.).

Carried interest expected to boost earnings further
We have not made any substantial revisions to our estimates post-Q4. We expect
continued growth in the Management Company and Service businesses, with the
former expected to pick up clearly in earnings due to carried interest as the
NRE-I fund is set to enter carry and the outlook for further funds entering
carry also appearing to be quite favourable. We are still somewhat cautious to
investment returns compared with the strong 2021 figures but still expect to see
a good level. Should the pace continue CapMan would be well set to continue on
an over EUR 40m annual operating profit track excluding carry. In 2022 we expect
a y/y increase in operating profit of some 30% driven largely by the expected
carried interest.

BUY with a target price of EUR 3.4
Absolute valuation on our estimates is very affordable and even excl. the highly
unpredictable carried interest is not too challenging. Dividend yields also
continue to support the investment case. We retain our BUY-rating and TP of EUR
3.4.

Open report


SUOMINEN - EBITDA OUTLOOK LOWER THAN EXPECTED

03.02.2022 - 10.00 | Earnings Flash

Suominen’s Q4 revenue topped expectations, but profitability didn’t reach
estimates. Suominen also guides decreasing EBITDA for FY ’22, particularly due
to challenging Q1, while we had expected flat development.

Read more

 * Q4 revenue was EUR 115.6m vs the EUR 113.0m/113.3m Evli/consensus estimates.
   Top line grew by 4% y/y. Europe amounted to EUR 46.7m vs our EUR 47.0m
   estimate, while Americas was EUR 68.9m vs our EUR 66.0m estimate.
 * Gross profit was EUR 8.4m, compared to our EUR 14.4m estimate. Gross margin
   was therefore 7.3% vs our 12.7% estimate.
 * EBITDA amounted to EUR 9.0m vs the EUR 12.1m/12.6m Evli/consensus estimates.
   EBIT was EUR 3.9m vs the EUR 7.1m/7.1m Evli/consensus estimates. Nonwovens’
   sales prices were higher y/y, but sales volumes were lower and raw material,
   freight and energy prices also increased. Manufacturing and SG&A cost savings
   actions had a positive impact on the result. Other operating income and
   expenses were positively impacted by insurance compensations and adjustments
   to certain previous year accruals. Currencies impacted EBITDA negatively by
   EUR 0.5m.
 * Suominen guides comparable EBITDA to decrease in FY ’22 (EUR 47.0m in 2021).
   Inventory levels remain high at certain customers, and the entire supply
   chain still faces operational issues due to the pandemic. These factors
   continue to have a negative impact on the result especially in Q1. We had
   estimated EUR 50.9m EBITDA for FY ’22.
 * The BoD proposes EUR 0.20 per share dividend to be distributed.

Open report


SRV - GUIDANCE APPEARS LACKLUSTER

03.02.2022 - 09.35 | Earnings Flash

SRV's net sales in Q4 amounted to EUR 336.3m, above our estimates and above
consensus estimates (EUR 316.0m/316.0m Evli/cons.). EBIT amounted to EUR -11.5m,
below our and consensus estimates (EUR -5.5m/-0.8m Evli/cons.). Group revenue in
2022 is expected to be EUR 800-950m and the operative operating profit is
expected to improve on 2021.

Read more

 * Revenue in Q4 was EUR 336.3m (EUR 292.5m in Q4/20), above our and consensus
   estimates (EUR 316.0m/316.0m Evli/Cons.). Growth in Q4 amounted to 15% y/y.
 * Operating profit in Q4 amounted to EUR -11.5m (EUR -8.0m in Q4/20), below our
   estimates and consensus estimates (EUR -5.5m/-0.8m Evli/cons.), at a margin
   of -3.4%. The operative operating profit in Q4 amounted to EUR -4.6m,
   slightly above our estimate of EUR -5.5m.
 * The order backlog in Q4 was EUR 872.3m (EUR 1153.4m in Q4/20), down by -24.4
   %.
 * Construction revenue in Q4 was EUR 335.8m vs. EUR 315.9m Evli. Operating
   profit in Q4 amounted to EUR -1.3m vs. EUR -3.0m Evli.
 * Investments revenue in Q4 was EUR 0.6m vs. EUR 1.1m Evli. Operating profit in
   Q4 amounted to EUR -8.6m vs. EUR -1.0m Evli.
 * Other operations and elim. revenue in Q4 was EUR -0.2m vs. EUR -1.0m Evli.
   Operating profit in Q4 amounted to EUR -1.5m vs. EUR -1.5m Evli.
 * Dividend proposal: The BoD proposes that no dividend be paid for FY 2021 (EUR
   0.00/0.00 Evli/Cons.).
 * Guidance for 2022: Group revenue is expected to be EUR 800-950m and the
   operative operating profit is expected to improve on 2021

Open report


CAPMAN - BETTER THAN EXPECTED FINISH TO YEAR

03.02.2022 - 08.45 | Earnings Flash

CapMan's net sales in Q4 amounted to EUR 14.7m (EUR 14.5m/15.0m Evli/cons.) and
EBIT to EUR 12.2m (EUR 10.7m/9.4m Evli/cons.). CapMan proposes a dividend of EUR
0.15 per share (EUR 0.15/0.15 Evli/Cons.).

Read more

 * Revenue in Q4 was EUR 14.7m (EUR 13.4m in Q4/20), in line with our estimates
   and consensus estimates (EUR 14.5m/15.0m Evli/Cons.). Growth in Q4 amounted
   to 10% y/y.
 * Operating profit in Q4 amounted to EUR 12.2m (EUR 9.7m in Q4/20), above our
   estimates and consensus estimates (EUR 10.7m/9.4m Evli/cons.), at a margin of
   83.2%.
 * EPS in Q4 amounted to EUR 0.06 (EUR 0.04 in Q4/20), slightly above our
   estimates and consensus estimates (EUR 0.05/0.05 Evli/cons.).
 * Management Company business revenue in Q4 was EUR 11.8m vs. EUR 11.7m Evli.
   Operating profit in Q4 amounted to EUR 3.2m vs. EUR 3.1m Evli.
 * Investment business revenue in Q4 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q4 amounted to EUR 9.6m vs. EUR 8.9m Evli.
 * Services business revenue in Q4 was EUR 2.4m vs. EUR 2.2m Evli. Operating
   profit in Q4 amounted to EUR 1.2m vs. EUR 0.7m Evli.
 * Revenue in Other in Q4 was EUR 0.5m vs. EUR 0.6m Evli. Operating profit in Q4
   amounted to EUR -1.7m vs. EUR -1.9m Evli.
 * Dividend proposal: CapMan proposes a dividend of EUR 0.15 per share (EUR
   0.15/0.15 Evli/Cons.).
 * Capital under management by the end of Q4 was EUR 4.5bn (Q4/20: EUR 3.8bn).
   Real estate funds: EUR 3.1bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.1bn.

Open report


DETECTION TECHNOLOGY - UNDERLYING DEMAND REMAINS STRONG

03.02.2022 - 08.35 | Company update

Detection Technology came in strong with topline growth in all its BUs, but the
growth pace was restricted by issues in the supply chain. The demand was strong
in medical and industrial applications, while security saw the demand to pick
up. We retain our HOLD-rating and adjust TP to EUR 26 (28).

Read more

Strong growth but some sales were postponed in H2’21
In Q4’21, underlying demand continued strong and DT saw a topline increase of
24.3% y/y, totaling EUR 24.7m. Driven by strong demand for high-end CT devices
and investments in health care, the medical business grew by 24% y/y to EUR
13.6m. IBU continued strong performance in all its segments and with new
customers, the segment grew by 21.7% y/y to EUR 3.4m. SBU faced strong growth
figures and net sales increased by 26.5% y/y to EUR 7.8m, driven by all segments
except aviation. DT’s management noted that over EUR 3m of sales were postponed
due to the lack of components. EBIT improved by 26% y/y to EUR 3.0m (12%
margin), falling short of the company’s and our expectations. The profitability
was lower than expected due to increased fixed costs.

Demand for detectors continues strong
The underlying demand in all BUs continues strong, but component shortages seem
to restrict and postpone some of the H1’22 deliveries. Risks regarding component
availability have increased, which might in the worst case lead to customer
outflow. We have adjusted our estimates, now expecting revenue growth of 13.3%
y/y in 2022, driven by a strong performance of SBU (22.1%) and IBU (16.2%),
while MBU’s growth pace (7.6%) sees a slight slowdown due to component shortage.
We estimate EBIT to improve to EUR 15.0m (14.8%) but fall slightly short of the
company’s medium-term target of 15% margin in 2022.

HOLD with a target price of EUR 26 (28)
With our revised estimates, DT is trading above its peer group and we don’t find
the premium justified given the uncertainties regarding component availability.
In our view, now it’s not the time to increase the position, rather wait for the
supply chain issues to ease. We retain our HOLD-rating and adjust TP to EUR 26
(28).

Open report


DETECTION TECHNOLOGY - COMPONENT SHORTAGE REDUCED THE GROWTH PACE

02.02.2022 - 09.45 | Earnings Flash

DT’s Q4 result fell slightly short of our estimates. Growth accelerated in all
BUs, but the component shortage had an impact on sales. Demand was strong in the
medical and industrial applications, while the security segment also grew and
saw the demand picking up.

Read more

• Group results: Q4 net sales grew by 24% y/y to EUR 24.7m vs. 25.8m/25.6m
Evli/cons. Profitability improved and adj. EBIT grew by 28% y/y, totaling EUR 3m
(12% margin) vs. 3.9m/3.9m Evli/cons. R&D costs amounted to EUR 2.9m and were
11.8% of net sales (Q4’20: EUR 2.2m, 11.3%).
• Medical (MBU): net sales came in strong and grew by 24% y/y to EUR 13.6m vs.
14.2m (Evli). The growth was driven by investments in healthcare and strong
demand for high-end CT devices.
• Security (SBU): the demand picked up and the topline grew by 26.5% y/y to EUR
7.8m vs. 8m (Evli). The growth was seen in all segments except aviation, but the
demand for aviation solutions has evolved positively.
• Industrial (IBU): net sales increased by 22% y/y, totaling EUR 3.4m vs. 3.6m
(Evli). The demand was strong in DT’s all main IBU segments.
• Dividend proposal: EUR 0.35 (0.38/0.35 Evli/cons.)
• DT reported that the risks of component shortage have increased and the
company has started actions to enhance operative efficiency and find other
components suppliers.
• FY’22 outlook: demand will continue to be strong in all of the company’s main
markets. The company expects double-digit growth in total net sales both in Q1
and Q2’22.
• No changes in medium-term targets: at least 10% net sales growth and an
EBIT-margin at or above 15%.

Open report


CONSTI - PROFITABLE GROWTH TRACK IN PLACE

02.02.2022 - 09.30 | Preview

Consti reports its Q4 results on February 4th. We expect double-digit growth,
with some margin uncertainty due to the situation with construction materials.
Growth is set to continue in 2022 supported by the order backlog and previous
acquisition, with some potential for margin improvement depending on the market
situation.

Read more

Expecting double-digit growth, some margin uncertainty
Consti will report its Q4 results on February 4th. Q3 saw growth accelerate to
double-digit figures compared with growth of 1.4% during H1/21. Growth has been
supported by the strengthened order backlog, up 15% y/y at the end Q3. The order
backlog has received support from the first projects within new construction
services, were Consti signed its first projects after the addition to being part
of the company’s strategy. Consti also made its first acquisition in a long
time, that of RA-Urakointi Oy, a company specializing in the repair of
apartments and row houses. We expect growth in Q4 to have remained at a good
pace supported by the order backlog and expect a net sales growth of 11.3%. We
expect the adjusted operating profit to be slightly below previous year levels
due to uncertainties related to construction material prices and availability,
at a margin of 4.2%.

Seeing continued good growth in 2022
We expect growth to continue in 2022 supported by the order backlog and
acquisition of RA-Urakointi, with our growth estimate at 7.3%. Consti has
typically only given a guidance for operating profit, and we expect for Consti
to estimate an improvement in operating profit during 2022 compared with 2021.
We currently estimate adjusted operating profit margins on par with 2021e, at
3.5%. There is potential for improvement, and we will be keeping an eye on
management comments relating to the situation with construction material.

BUY with a target price of EUR 14.5
We have made no changes to our estimates ahead of Q4. On our estimates Consti
currently trades at a 2022e P/E of 12.3x, which we do not see as overly
challenging. We retain our target price of EUR 14.5 and retain our BUY-rating.

Open report


CAPMAN - STRONG YEAR BEHIND, MORE TO COME

01.02.2022 - 09.45 | Preview

CapMan is set to finish a year of solid performance. With the news on CapMan’s
NRE fund we have shifted our end of the year carry expectations to 2022 but our
views on CapMan remain unchanged.

Read more

CapMan’s NRE fund set to enter carry early 2022
CapMan will report its Q4 results on February 3rd. We expect to see a steady q/q
earnings trend and overall good finish to a year of solid performance. CapMan
announced in early January that the CapMan Nordic Real Estate fund had made
exits in several properties, with the fund set to start distributing carry after
the completion of those transactions. After the transactions the fund will have
four assets remaining in Denmark and Sweden. As such, we have shifted most of
the carry we had estimated in Q4/21 to Q1/22. Apart from that, our estimates
remain essentially intact. We expect an operating profit of EUR 10.7m. During
2021 CapMan has seen y/y comparable earnings improvement across the board, most
notably within Investment services due to the weak comparison year. We expect a
dividend proposal or EUR 0.15 per share (2020: EUR 0.14), for an implied
dividend yield of 5.1%..

Room for further earnings improvement in 2022
CapMan does not give a numeric guidance and we do not expect one to be given for
2022. We expect carried interest to be a key driver in further earnings
improvement, with the NRE fund moving into carry. Growth in AUM is expected to
contribute to continued growth in fee-based earnings, with several on-going and
planned fundraising projects. Investment returns have been strong during 2021,
and we remain more modest in our expectations for 2022.

BUY with a target price of EUR 3.4
Apart from the shift in carried interest we have made no notable changes to our
estimates ahead of the Q4 results. The recent market uncertainty potentially
presents some headwind but at the same time the news on carried interest
provides an additional confidence factor. We retain our BUY-rating and target
price of EUR 3.4.

Open report


SUOMINEN - FLATTISH PROFITABILITY FROM Q4 ON

01.02.2022 - 09.35 | Preview

Suominen reports Q4 results on Thu, Feb 3. We leave our Q4 estimates unchanged
but make small upward revisions to our FY ’22 estimates due to FX changes.

Read more

Q4 figures should improve a lot from the Q3 lows

Suominen’s Q3 figures fell a lot more than was expected, but the report provided
encouraging comments on outlook; performance should improve significantly
already in Q4, and we continue to expect about EUR 8m q/q gain in Q4 EBITDA. We
estimate the figure at EUR 12.1m, while we see top line grow 2% y/y and close to
15% q/q from the Q3 lows. We expect European revenue to reach new highs, while
we see Americas still somewhat down from the peak levels but up 16% q/q. The
relatively modest and completed investments in Italy and the US support growth
this year, and we expect revenue to surpass the record set in FY ’20, but
profitability is unlikely to reach the recent peaks during the next few years.

We expect only marginal profitability improvement from Q4

We find Suominen’s key raw materials prices basically flatlined q/q in Q4; this
supports our view according to which incremental margin gains continue from Q4
onwards. USD has strengthened some 5% in the past three months and thus we raise
our FY ’22 revenue estimate to EUR 467m (prev. EUR 455m). We continue to expect
6.5% EBIT margin for this year and hence flat absolute profitability, in other
words EUR 50.9m in EBITDA. We expect Suominen to loosely guide flat
profitability for FY ’22; negative wording seems unlikely considering the
softness of Q3’21, while any commitment to positive development appears
premature as many key variables remain much in flux.

Peer margins are expected to gain some 200bps in FY ‘22

Suominen’s valuation and estimates haven’t changed much in the past few months.
The company continues to trade around 5.5x EV/EBITDA and 9x EV/EBIT on our FY
’21-22 estimates. The FY ’21 multiples are significantly below those of peers
because the group is expected to gain some 200bps in FY ‘22 EBIT margin.
Meanwhile we estimate Suominen’s FY ’22 EBIT margin down a bit due to the high
figures seen in early FY ’21. Suominen’s multiples discount narrows this year
due to the peers’ earnings accretion. We retain our EUR 6 TP and BUY rating.

Open report


DETECTION TECHNOLOGY - EXPECTING STRONG GROWTH FIGURES

27.01.2022 - 09.45 | Preview

Detection Technology will report its Q4 results next Wednesday. Driven by robust
topline growth, we expect the company to see strong earnings improvement. We
retain our HOLD-rating and adjust our TP to EUR 28.0 (30.5).

Read more

Expecting high double-digit growth
Driven by strong double-digit growth in all BUs, we expect Q4 revenue of EUR
25.8m (cons. 25.6m), meaning an increase of 30.1% y/y. We expect MBU to grow by
30.3% y/y, driven by strong demand for CT-scan devices. We estimate the earlier
growth in SBU’s order book to realize and expect topline increase of 30.5% y/y,
totaling EUR 8m. With new customerships, we estimate IBU to grow by 28.5% y/y to
EUR 3.6m. Despite the issues in the supply chain, we expect the revenue growth
to scale and EBIT to improve by 66% y/y to EUR 3.9m (cons. 3.9m).

Strong earnings growth despite the cost pressures
We expect the increased volume of air passengers and the growth of cross-border
e-commerce to support the growth in the number of SBU’s orders. We estimate the
security market to exceed pre-COVID levels within the next few years. The
company and other players expect the component shortage to continue also in
2022. To reach its EBIT-margin target of 15%, the company must be able to
enhance operative efficiency and show some pricing power. We expect the company
to be able to shift some of the increased costs to customer prices during the
new pricing period. Regarding the outlook, we remain waiting for the
management's comments on the pace of recovery in the security markets and
clarification of the company's earlier guidance for H1’22 (expecting
double-digit growth).

HOLD with a target price of EUR 28.0 (30.5)
The fundaments of DT’s business haven’t changed and we made no changes to our
estimates ahead of Q4. Market drivers remain bright, but the recovery of
aviation still includes some uncertainty in the short-run. With recent market
turbulence and depreciation of peer group valuation, we adjust our TP to EUR
28.0 (30.5) and retain our HOLD-rating.

Open report


NETUM - GROWTH TRACK CONFIRMED

26.01.2022 - 09.45 | Company update

Netum made some smaller adjustments to its guidance, with our main takeaway
being the continued solid growth pace. We adjust our TP to EUR 4.3 (4.6)
following recent market turbulence and peer multiple depreciation.

Read more

Some smaller tweaks to guidance
Netum specified its guidance for 2021 on January 24th, with the revisions
appearing to be rather small in relation to our expectations. The company now
expects revenue for FY 2021 to amount to slightly over EUR 22m, having
previously expected EUR 20-22m. The comparable EBITA is expected to be EUR 3.1m
(prev. EUR 3.1m-3.5m). The revised revenue forecast is due to the integration of
Cerion Solutions (as of 1.10.2021) and stronger than expected organic growth.
Netum’s profitability has been affected by new recruitments, with around 90 new
employees during 2021 (12/2020: 130 employees), along with weaker margins in a
single fixed-price customer project.

Solid growth prospects
We noted in conjunction with the Cerion Solutions acquisition, that the revenue
guidance being kept intact despite the expected EUR 1m positive impact on 2021
revenue was somewhat surprising. Fortunately, with the revised guidance the
concerns of implied slower growth are clearly reduced. The comparable EBITA was
somewhat below our previous EUR 3.4m expectations, with the project challenges
not accounted for. Considering the challenging recruiting environment, the rapid
growth in personnel is commendable and sets the foundation for continued strong
growth, and we expect a growth of 22% in 2022. We see some need for caution in
profitability improvement expectations due to the rapid growth and for now
expect similar unadj. margins as in 2021.

HOLD with a target price of EUR 4.3 (4.6)
The guidance revision was overall slightly positive news, should the noted
project challenges not impact further. However, with the recent market
turbulence and peer multiple depreciation we adjust our target price to EUR 4.3
(prev. EUR 4.6) and retain our HOLD-rating, valuing Netum at approx. 16x 2022e
adj. P/E.

Open report


ENERSENSE - SOME MORE GREEN TO COME

04.01.2022 - 09.45 | Company update

Enersense’s Q3 report was soft and left doubts with respect to the FY ’21
guidance. The company has now made upgrades to the guidance, but these seem to
have been to a large extent driven by acquisition-related revaluations.
Enersense nevertheless continues to progress with long-term strategy and is
about to close two investments.

Read more

We make some updates to our Q4 adj. EBIT(DA) estimates

Enersense revised its FY ’21 earnings guidance upwards. Enersense still expects
EUR 215-245m in revenue, but now sees adj. EBITDA over EUR 19m (prev. EUR
17-20m) and adj. EBIT over EUR 11m (prev. EUR 8-11m). We leave our revenue
estimate unchanged, update our Q4 adj. EBITDA estimate to EUR 7.4m (prev. EUR
5.6m) and that for adj. EBIT to EUR 5.1m (prev. EUR 3.3m). The underlying
performance remains somewhat unclear because the guidance update was driven by
revaluations related to the Enersense Offshore Oy acquisition.

Long-term earnings growth outlook should solidify

Enersense is about to expand its renewable energy solutions scope with the
closure of two acquisitions in a month or so. The company will buy a significant
stake in a green hydrogen producer called P2X and acquire an onshore wind farm
developer in an all-share transaction. The latter target will be earnings
accretive already in FY ’22; the acquisition of Megatuuli will contribute a
cumulative EUR 20-40m in EBIT by 2025. Meanwhile an ERP investment will burden
results this year along with a process related to the integration and
development of Enersense Offshore, however the latter initiative should
contribute to results in FY ’23. We leave our estimates for FY ’22 and ’23
unchanged for now, but Enersense will update its long-term financial targets in
Q1.

Valuation remains undemanding

Enersense’s peer multiples have stayed pretty much unchanged over the past few
months. Enersense continues to trade at modest multiples relative to peers. We
believe Enersense’s vertical integration within the renewables value chain
beyond construction and maintenance activities will help balance business risks,
and hence long-term upside remains significant. Meanwhile short-term visibility
isn’t still that great and thus we lower our TP to EUR 10 (11). Our rating
remains BUY.

Open report


SRV - PROJECT RISKS MATERIALIZED

14.12.2021 - 09.30 | Company update

SRV issued a profit warning due to the materialization of cost risks in the
Tampere Arena project and postponement of the expected Pearl Plaza divestment,
creating a dent in the improved progress so far during 2021.

Read more

Profitability guidance lowered
SRV issued a profit warning on Monday, December 13th. The company now expects
its operative operating profit to be positive (prev. EUR 16-21m). The revenue
guidance of EUR 900-1,000 remains unchanged. The guidance revision is mainly due
to cost risk materialization in the Tampere Arena project. The impact on 2021
figures has been approx. EUR -20m, of which EUR -13m was already included in
Q3/2021 figures. Further affecting the guidance revision is the postponement of
the sale of the Pearl Plaza shopping centre, which was earlier expected to be
finalized during 2021.

Project risks continue to materialize
SRV has previously had challenges in managing certain projects of significant
size, with these risks unfortunately materializing again. The project has been
completed and further risks should be limited to certain final cost
calculations. The P&L impact is unfortunate but shouldn’t cause financial risks,
especially with the completion of the Loisto tower project and subsequent cash
flows during Q4. The significant negative impact of the Tampere Arena project
does continue to highlight that the underlying construction profitability is
actually at rather good levels, but this is unfortunately of little consolation
when risks in single major projects continue to materialize. We have lowered our
2021 operative operating profit estimate to EUR 4.4m (prev. EUR 17.2m) but apart
from that our estimates remain largely unchanged.

BUY with a target price of EUR 0.6 (0.7)
With the risks to the company’s turnaround at elevated levels we lower our
target price to EUR 0.6 (0.7). Upside potential is in our view still clearly in
place but appears more remote with the postponement of expected Pearl Plaza
divestment. Our rating remains BUY.

Open report


SCANFIL - Q4 EBIT WILL REMAIN A BIT MODEST

13.12.2021 - 09.30 | Company update

Scanfil’s earlier guidance suggested Q4 to be highly profitable, and we had
estimated 6.9% EBIT margin, but well-known challenges have proved persistent for
now.

Read more

The fresh guidance implies some 5.1% Q4 EBIT margin

Scanfil issued a negative profit warning. Plants’ productivity has suffered due
to continued component availability challenges, and the worsened Covid-19
situation has also bothered production. Q4 EBIT is further hit by the FX
exposure due to the relatively high inventories, which the company build up
earlier this year to be better able to meet demand by anticipating needs early
on. Scanfil’s previous guidance suggested EUR 166-206m in Q4 revenue and EUR
11-14m EBIT. The new range implies EUR 176-196m top line and EUR 8-11m EBIT. We
don’t view the news as a major issue in the long-term context because the
challenges are to a large extent transitory in nature, although the pandemic and
component shortage situations will persist at least during the early part of
next year. Scanfil however doesn’t have to struggle with cost inflation since
the contracting logic covers component purchases. Customer demand has also
remained strong in Q4.

We continue to expect strong performance for next year

We make only small revisions to our top line estimates, but we revise our Q4
EBIT estimate down to EUR 9.7m from EUR 12.5m. We revise our FY ’22 EBIT
estimate down to EUR 46.3m (prev. EUR 48.5m). The Hamburg restructuring measure
by itself should help some EUR 2.5m in terms of cost savings; we hence expect
17% EBIT improvement for next year as the component and Covid-19 issues will
begin to ease. Scanfil is set to achieve a robust double-digit top line growth
this year, and we continue to estimate 7% growth for FY ’22. In our opinion 7%
EBIT margin remains very much an appropriate long-term profitability target for
Scanfil, and the company is unlikely to make any changes around that specific
figure.

Earnings multiples are not expensive relative to peers

Scanfil is valued 9.5x EV/EBITDA and 13x EV/EBIT on our FY ’21 estimates. The
levels aren’t particularly low, but in our view both demand and earnings growth
outlook remain robust enough to warrant a longer perspective. The multiples are
8.5x and 11x on our FY ’22 estimates. We retain our EUR 9 TP and BUY rating.

Open report


FELLOW FINANCE - SHORT-TERM BURDENS

09.12.2021 - 09.30 | Company update

Fellow Finance lowered its guidance, with transaction costs relating to the
planned merger a key part. Loan volumes have continued to grow but the relative
growth of lower margin business financing and reduction of Lainaamo’s loan
portfolio limit revenue growth.

Read more

Lowered its 2021 guidance
Fellow Finance issued a profit warning on Thursday, December 2nd. The company
now expects revenue in 2021 to be at previous year levels and the result to be
clearly unprofitable. Previously the company expected slight growth compared to
2020 and for the result to be slightly unprofitable. The lowered revenue
guidance is driven by the relative growth in lower margin business financing and
lower interest income from a reduction of the Company’s subsidiary’s,
Lainaamo’s, loan portfolio. The profitability is greatly affected by transaction
costs relating to the combination agreement with Evli Bank Plc, which are
estimated to be around EUR 950,000 in 2021. Profitability is further affected by
growth investments.

Loan volumes continuing steady growth
In relation to our earlier estimates, the main change is due to the expected
transaction costs, which are clearly higher than we had anticipated, while our
2021 revenue growth estimates are down by a few percentage points. Although
profitability is affected by the non-recurring transaction costs the underlying
business appears to be performing quite decently. Monthly facilitated loan
volumes have surpassed EUR 20m in the past few months, although fee income
growth has been slower due to stronger growth in business financing. Should the
merger be completed as planned and focus shift to balance sheet lending, the
growth would also start to show in profitability figures.

BUY with a target price of EUR 3.5 (3.8)
Excluding the one-off costs, Fellow Finance is showing rather good progress and
exhibits profitability upside, should the merger be completed as planned. In
light of the near-term challenges, however, we adjust our TP to EUR 3.5 (3.8)
with our BUY-rating intact.

Open report


ASPO - CMD NOTES

02.12.2021 - 09.30 | Company update

Aspo held its CMD, where the key message was that focus is more towards add-on
M&A as opposed to exits (except for the sale of Kauko and Leipurin’s Vulganus
machines).

Read more

EBIT margin target raised to 8% from the previous 6%

Aspo’s EBIT has gained a lot in the past year. Telko already had a strong ‘20,
while the recovery has come through in ESL’s figures this year. The revised ESL
and Telko EBIT targets, both up by 200bps to 14% and 8% respectively, are thus
not very surprising. Aspo introduced a 5-10% p.a. growth target, and we view
this the major update because it signals a commitment to hold and grow Telko. We
make upward estimate revisions to reflect the targets. ESL reached a 15% EBIT in
Q3, and while demand remains strong, we believe the next quarters will see some
softening since AtoB@C time charter costs are growing. ESL’s performance is
otherwise solid (e.g. contracts are better optimized from a logistics POV), and
it has retained an advisor to source investors for a portion of the hybrid
vessel capex. Leipurin retains its 5% EBIT target. There’s still way to go until
the target is reached, but Leipurin has a profit boost initiative (e.g. category
management) while the Food Industry is a good growth driver.

Aspo remains very committed to Telko and exit is unlikely

Aspo’s new 5-10% growth target reflects especially Telko add-on M&A potential.
There’s no major change in the sense that Eastern performance is to rely on
organic growth, but it seems Telko is now ready for somewhat larger deals should
a fitting target come up for sale. Telko’s own profitability is already running
so high that not every acquisition will provide an immediate boost to EBIT
margin. The geographic scope has also been expanded a bit westward beyond the
Nordics and Baltics. Aspo remains committed to the current three segments within
logistics (ESL) and trade (Telko & Leipurin), however a new stand-alone
subsidiary with an EV of some EUR 20-50m is also likely (B2C targets are not off
the table). Aspo’s focus is still to hold and grow its segments without any
definite exit plans/schedules.

Earnings growth outlook is attractive

We now expect FY ’22 EBIT margin at 7.0%, or EUR 42.4m (prev. EUR 40.9m). This
represents an EV/EBIT of only about 11x, and there’s still further earnings
potential in the following years. We retain our EUR 14 TP. Our rating is now BUY
(HOLD).

Open report


CIBUS NORDIC - STARVING FOR MORE YIELD

12.11.2021 - 09.45 | Company update

Cibus continued to perform as expected. Our view doesn’t change much as
valuation appears tight unless further yield compression continues to drive more
upside potential.

Read more

Not many surprises in Q3 performance and figures

Cibus’ Q3 was a bit better than expected due to lower-than-estimated costs. Net
rental income was EUR 19.3m vs our EUR 19.0m estimate and the difference was due
to lowish property expenses. The EUR 18.0m operating income was marginally above
the EUR 17.8m/17.9m Evli/cons. estimates, while the EUR 12.5m net operating
income topped our EUR 11.9m estimate as net financial costs were EUR 0.4m lower
than we estimated (there was a EUR 0.2m positive FX item).

The organization is competitive and continues to scale up

Cibus entered Norway through an acquisition of 8 small grocery properties, most
of them located in the vicinity of Oslo; the EUR 27.6m price is high in terms of
per sqm but is explained by high rents and the properties’ condition. The
characteristics are otherwise similar across the Nordics and we assume the
Norwegian portfolio yields almost 6%, in other words close to Cibus’ other
recent acquisitions. Cibus is now set to complete more than EUR 160m in add-ons
this year and a few more deals could materialize by the year-end (we are yet to
include the AB Sagax deal in our estimates as it involves an issue of 2m
shares). Annual admin costs will increase by only EUR 0.4m by the end of this
year and hence will decrease a bit relative to the higher net rental income. In
our view this testifies to Cibus’ organizational efficiency and the operation
will scale even better once the Norwegian portfolio grows. Danish entry is also
likely sometime.

1.3x EV/GAV continues to limit further upside potential

Nordic property sector valuations have remained pretty much unchanged in the
past few months; we continue to view Cibus’ book value a major limitation to
further upside from the current levels. Cibus’ equity is sensitive to yield
assumptions due to the 60% LTV ratio; if Nordic property yields continue to
compress, not to mention possible advances in the grocery property market, then
Cibus’ shares follow up in the wake, but there would be a major equity-level
headwind in a widened Nordic yield scenario even when the portfolio continues to
perform as expected. Our TP is now SEK 215 (205) and we retain our HOLD rating.

Open report


ENDOMINES - SHORT-TERM CONCERNS REMAIN

12.11.2021 - 09.45 | Company update

Endomines is set to start showing serious production figures in the coming
quarters, with Friday having started up and Pampalo set to follow during the
start of 2022. Cash flows remain crucial, as the company’s financial position
remains weak.

Read more

Friday restarted; full capacity seen to be reached in 2021
Endomines reported its Q3 results which, as production was still starting up,
were not particularly eventful in terms of production. Revenue* amounted to SEK
1.7m (Evli 0.0m) and EBIT* to SEK -38.2m (Evli -33.0m) *not reported, derived
from Q1-Q3 and H1. At Friday initial production started up during the quarter,
with most of the technical challenges that have faced the commissioning of the
mill having been addressed. The planned production capacity of 150 tons per day
is expected to be reached the end of Q4. The re-opening of Pampalo has gone
largely as planned. According to current schedules ore production will start in
December 2021. Ore processing at the mill is expected to commence early 2022.

Financial position remains challenging
As a result of refocusing the Pampalo production schedule to Q1 2022 from
previously planned Q2 2022 Endomines adjusted its short-term Q4 2021 production
guidance to 1,200 oz (prev. 1,500oz) and we have adjusted our short-term
estimates accordingly. Production should pick up clearly during 2022, with our
estimates for Friday and Pampalo at approx. 8,300oz and 6,300oz respectively
(co’s mid-term full production goals 7,800-9,000oz and 10,000-11,500oz
respectively). The cash flows remain essential, as Endomines has been without
production the last 12 months and has had to seek financing several times. The
liquid assets at the end of the period were only SEK 8.4m.

HOLD with a target price of SEK 2.7 (2.8)
We have made some adjustments to our SOTP-model relating to share issues and
changes in the financial position, based on which we adjust our target price to
SEK 2.7 (2.8). Financing remains a key concern but the company is steadily
nearing decent production figures, which would sort out some concerns.

Open report


ENDOMINES - INITIAL PRODUCTION STARTED

11.11.2021 - 09.45 | Earnings Flash

Initial production at Friday commenced during Q3, with planned milling capacity
seen to be reached at the end of Q4. The Pampalo startup is progressing well,
ore production at the mine and ore processing at the mill are expected in Q4
2021 and Q1 2022 respectively.

Read more

 * Revenue in Q3 amounted to SEK 1.7*m, with our estimates at SEK 0.0m. Revenue
   in Q3 was still as expected not significant, as the Friday mine and mill are
   only just re-starting production.
 * EBITDA in Q3 was at SEK -36.3m*, below our estimate of SEK -28.0m.
 * EBIT amounted to SEK -38.2m* (Evli SEK -33.0m).
   *Figures derived from Q1-Q3 and H1 figures
 * During Q3 the Pampalo mine decline was driven down to a new production area.
   Work remains within budget and timeline. At Friday, the technical challenges
   relating to the mill have mostly been resolved. An underground core drilling
   program is being carried out, to be completed during Q4.
 * The Orogrande processing facility is under commenced production and is
   forecasted to reach planned milling capacity (150 tons/day) by the end of Q4
   2021. Ore production at the Pampalo mine will start in Q4 2021 and ore
   processing at the mill will begin early Q1 2022.
 * Liquid assets amounted to SEK 8.4m at the end of Q3.
 * Due to the refocusing of the Pampalo production schedule from previously
   planned Q2 2022 to Q1 2022, the short-term Q4 2021 gold production guidance
   for the operations has been amended to approximately 1,200 oz by year end.

Open report


CIBUS NORDIC - A MINOR EARNINGS BEAT

11.11.2021 - 09.30 | Earnings Flash

Cibus’ Q3 report served no big surprises, however net operating income ended up
being EUR 0.6m higher than we had estimated as both property expenses and net
financial costs were a bit lower than expected.

Read more

 * Cibus’ Q3 rental income came in at EUR 20.2m, compared to our EUR 20.2m
   estimate.
 * Net rental income was EUR 19.3m vs our EUR 19.0m estimate. Property expenses
   were a bit lower than estimated.
 * Operating income amounted to EUR 18.0m vs the EUR 17.8m/17.9m Evli/consensus
   estimates.
 * Net operating income was EUR 12.5m, compared to our EUR 11.9m estimate. Net
   financial costs were EUR 0.4m lower than we estimated.
 * Annual net rental income capacity now stands at EUR 76.25m and will be EUR
   82.5m by the end of the year as certain previously announced transactions
   close.
 * GAV amounted to EUR 1,336m and therefore EPRA NAV was EUR 12.4 (12.3) per
   share.
 * Net LTV ratio amounted to 60.1% (60.1%).
 * Occupancy rate was 94.2% (94.8%).
 * WAULT was 5.0 years at the end of Q3.

Open report


EXEL COMPOSITES - PROFITABILITY IS ALREADY IMPROVING

05.11.2021 - 09.30 | Company update

Exel’s Q3 EBIT fell way more than estimated, but guidance implies improvement is
already happening and we expect Exel to be back on its earlier EBIT track soon
enough.

Read more

Q3 EBIT was weak but Q4 will already be a lot better

Q3 revenue grew 28% y/y to EUR 33.4m vs the EUR 30.4m/30.6m Evli/cons.
estimates. Buildings and infrastructure, the most significant contributor, grew
64% but positive top line development was broad; Exel also sees stabilization in
Transportation, where the pandemic hit demand. Inflation had only a limited
impact as Exel was able to transfer the effect of higher raw material prices
forward, and Exel’s pricing continues to advance. Profitable growth thus
continued excluding the US unit, where a high-volume Wind power product’s
ramp-up costs ate all other EBIT. Exel’s Q3 adj. EBIT was EUR 0.1m vs the EUR
1.9m/1.7m Evli/cons. estimates. The US labor market challenges exacerbated the
production problem. The US unit’s performance is expected to improve already in
Q4, but in our view it will not perform according to requirements at least
before Q2’22.

We make relatively small revisions to our FY ’22 estimates

Exel announced its long-planned Indian expansion. We view the Indian JV a
practical step to serve existing global customers in a new growth geography and
a chance to sign new accounts. We reckon the Indian plant (which we expect to be
driven by Wind power but not entirely) has an output smaller than that of Exel’s
existing assets. We expect the JV to add ca. EUR 5m in annual revenue starting
next year, considering Exel owns 55% of the entity, and we believe valuation is
below 1x EV/S. Exel’s FY ’21 adj. EBIT margin is to remain a modest 5%, but
profitability should already improve by 400bps q/q in Q4. We raise our FY ’22
revenue estimate to EUR 147m (prev. EUR 139m) due to the continued strong
outlook as well as the Indian contribution.

In our view annual EBIT is to rebound above EUR 10m soon

FY ’21 EBIT isn’t meaningful since Exel has managed above EUR 2.5m quarterly
EBIT many times with a significantly lower top line than what will be seen next
year. In our view Exel is unlikely to reach the 10% target margin in FY ’22 as
the US unit probably doesn’t fully perform in the early part of the year. We
don’t view Exel’s 7x EV/EBITDA and 10x EV/EBIT multiples (on our FY ’22
estimates) challenging. We retain our EUR 10 TP and BUY rating.

Open report


PIHLAJALINNA - POTENTIAL CONTINUES TO REALIZE

05.11.2021 - 09.00 | Company update

Top line drove EBIT as higher outsourcing costs remained a drag on relative
profitability. Corporate and private volumes were still below pre-pandemic
levels, meaning business normalization is set to support further gains.

Read more

Adj. EBIT gained EUR 1.3m y/y despite outsourcing costs

Revenue grew 13% y/y in Q3; the EUR 141m figure topped the EUR 136m/138m
Evli/cons. estimates. Public sector revenue grew 18%, more than estimated.
Corporate and private customer revenues were a bit soft relative to estimates;
the former was up 11% y/y while the latter was down 5%. Adj. EBIT improved to
EUR 10.0m vs the EUR 10.6m/9.0m Evli/cons. estimates despite the mix being
tilted more towards the public sector than expected while the outsourcing EBIT
margin declined by 330bps y/y to 3.5% (higher service care requirements raised
costs). We also gather Pihlajalinna is making progress on this front to receive
better compensation in the future. Q3 adj. EBIT margin improved only by 10bps
y/y to 7.1% due to the outsourcing cost drag; going forward there should be good
scope for meaningful improvement as private volumes continue to improve and
Pihlajalinna gets more compensation for outsourcing costs.

Organic improvement in addition to the Pohjola acquisition

Q3 is the most profitable quarter and the EUR 11.8m in Covid-19 services revenue
was an additional help. We believe Covid-19 revenue will decline a bit q/q in Q4
but should still reach a meaningful level. Pihlajalinna continues to make
additions to its facility network but capex levels are to remain modest while
focus is more towards digital services. The Pohjola Hospital acquisition is set
to close early next year and Pihlajalinna will provide an update on financial
targets near the completion. Pihlajalinna expects to realize sizable cost
synergies while insurance co-operation drives volumes. The target’s revenue fell
in part due to the pandemic, but size was also diminished because of the
decision to divest occupational health activities.

Good earnings as well as multiple expansion potential

We make minor estimate revisions. Our FY ’21 EBIT estimate stands almost
unchanged at EUR 32.1m. Valuation is undemanding relative to peers in the
short-term (8x EV/EBITDA and 16x EV/EBIT on our FY ’21 estimates) while margin
potential underpins further upside. Our TP is EUR 14.0 (13.5); rating is BUY.

Open report


EXEL COMPOSITES - Q3 PROFIT HIT HARDER THAN ESTIMATED

04.11.2021 - 09.30 | Earnings Flash

Exel’s top line continued to grow very fast in Q3, while the ramp-up of a Wind
power product in the US impacted profitability more than estimated. Exel expects
profitability improvement already for Q4 and specifies guidance.

Read more

 * Q3 revenue grew by 28.2% y/y and amounted to EUR 33.4m, compared to the EUR
   30.4m/30.6m Evli/consensus estimates. Europe and North America drove growth
   in Q3.
 * Wind power was EUR 8.6m vs our EUR 9.0m estimate. Buildings and
   infrastructure amounted to EUR 8.1m, compared to our EUR 6.8m estimate.
 * Adjusted EBIT was EUR 0.1m vs the EUR 1.9m/1.7m Evli/consensus estimates.
   EBIT margin amounted to 0.3% vs our 6.3% estimate. The low profitability was
   due to the ramp-up of a specific high-volume carbon fiber Wind power product.
   The current US labor market situation also poses its own challenges, and the
   poor profitability seen in the US masks profitable growth in the other
   regions.
 * Q3 order intake was EUR 24.6m and increased by 0.2% y/y. There were some
   cancelled orders.
 * Exel guides FY ’21 revenue to increase significantly and adjusted operating
   profit to decrease (unchanged). Exel specifies FY ’21 revenue to amount to
   EUR 125-135m and adjusted operating profit EUR 5.8-7.0m. The midpoints imply
   EUR 32.1m revenue and EUR 1.4m adj. EBIT for Q4 (vs the respective EUR 31.7m
   and EUR 2.3m estimates).

Open report


ELTEL - NOT IMPROVING QUITE THAT FAST

04.11.2021 - 08.55 | Company update

Eltel’s long-term earnings growth continues, however we make big cuts to our
estimates following the Q3 report as the pace doesn’t seem nearly as quick as we
had estimated. Our TP is now SEK 17.0 (29.5) and new rating HOLD (BUY).

Read more

The Q3 report produced mostly negative surprises

Eltel Q3 revenue fell 14% y/y and was EUR 194m vs the EUR 224m/214m Evli/cons.
estimates. The top line miss stemmed from all the reporting units and caused
margin pressure, resulting in a EUR 4.0m EBIT vs the EUR 9.0m/8.3m Evli/cons.
estimates. The 80bps y/y decline in operative EBITA margin was also due to
challenges in the Polish High Voltage business and cost inflation as steel
prices have doubled. The cost increases had a negative EUR 2m effect on Polish
profitability. Low Danish customer volumes hit local profitability, while
Norwegian EBITA margin remained good. Another positive was the narrowing of
losses in Sweden, and Finland reached a strong result despite cost inflation
(seen especially in Power while not in Communication).

Earnings growth continues, but not as quick as estimated

Eltel remains set for long-term earnings growth, however the gradient now seems
to be much less steep than we had estimated before. We cut our Q4 EBITA estimate
from EUR 8.3m to EUR 4.8m. We revise the following years’ EBITA estimates down
by some EUR 7-8m. In our view Eltel is set to reach above 2% EBITA margins going
forward, but we revise our FY ’22 estimate down to 2.6% from 3.3%. We expect
soft development for Denmark until next year; we see the Norwegian situation a
bit better as the local fiber market should bounce back. We expect Sweden to
break even soon enough, while Finland should continue to perform strong (street
lighting being one area of interest). There’s no fixed timeframe for the
possible Polish exit and so any decision will likely have to wait until next
year.

Improving performance seems to be fully valued for now

We cut our TP to SEK 17.0 (29.5) as earnings improvement continues to
materialize at a slower pace than we had estimated prior to the Q3 report.
Margin improvement potential should remain solid as Eltel’s margins are still
considerably below those of peers. Multiples are lower than peers’ in terms of
EV/EBITDA (7x on our FY ’22 estimate) and higher in terms of EV/EBIT (around
18x). Our rating is now HOLD (BUY).

Open report


PIHLAJALINNA - GOOD MARGIN DEVELOPMENT CONTINUED

04.11.2021 - 08.30 | Earnings Flash

Pihlajalinna’s Q3 report produced a top line beat while profitability was close
to our estimates and above the consensus. The revenue surprise was attributable
to public sector customers while Covid-19 services grew a lot y/y but also
meaningfully q/q.

Read more

 * Q3 revenue grew by 13.5% y/y to EUR 140.6m, compared to the EUR 136.4m/137.8m
   Evli/consensus estimates. Private customer revenue amounted to EUR 18.9m vs
   the EUR 20.9m/20.5m Evli/consensus estimates, while corporate customers were
   EUR 31.2m vs the EUR 34.5m/33.1m Evli/consensus estimates. Public sector
   customers’ top line was EUR 108.1m, compared to the EUR 99.0m/101.5m
   Evli/consensus estimates.
 * Covid-19 services contributed EUR 11.8m in Q3 revenue. The figure increased
   by EUR 8.4m y/y and EUR 3.7m q/q, which in our view in part helped the
   revenue beat.
 * Adjusted EBITDA was EUR 18.8m (13.4% margin) vs the EUR 19.4m/17.7m
   Evli/consensus estimates. Adjusted EBIT was EUR 10.0m (7.1% margin) vs the
   EUR 10.6m/9.0m Evli/consensus estimates. Normal seasonal profitability
   variation as well as Covid-19 services helped profitability, in addition to a
   customer volume recovery at the company’s private clinics.
 * Pihlajalinna’s FY ‘21 guidance remains unchanged; revenue is expected to
   increase while adjusted EBIT is expected to improve clearly.

Open report


MARIMEKKO - VALUATION STILL FAVORABLE

04.11.2021 - 08.25 | Company update

Marimekko released strong Q3 figures that overall outpaced our estimates.
Development was strong in its domestic market, but Int’l business was sluggish
due to temporal challenges and seasonality. We made only minor adjustments to
our estimates.

Read more

Strong domestic growth and a record EBIT

Marimekko’s Q3 result came in strong compared to our expectations. Net sales
growth of 11% y/y was driven by strong wholesale sales in Finland (+25% y/y).
Controls of grey exports and lower licensing revenue decreased international net
sales by 10% y/y. Despite the increased fixed costs, the company delivered its
record EBIT, totaling EUR 13.3m (31.3% margin). Profitability was boosted by
improved gross margin and increased net sales.

 

Int’l sales to get back on a growth path

We see the decline in international sales to be temporal and expect the company
to get back on a growth path in Q4’21. Although the int’l revenue declined, the
brand sales increased by 40% y/y in Q3 which indicates that the popularity of
the brand is still up and keeps growing. Marimekko has positioned well in its
domestic market, but we also expect that new and ongoing brand collaborations
are set to increase brand awareness abroad, which eventually grows the share of
int’l business. Like most of companies, Marimekko is also facing some challenges
in logistics and material availability. Cost inflation has woken up and is
raising its head. Due to relatively large inventories, the cost inflation shows
in figures with a lag. After considering above mentioned factors, we made only
minor adjustments to our estimates, now expecting 21E net sales of EUR 145.7m
and adj. EBIT of EUR 30.2m (20.7% margin). During 2022-23, we expect Marimekko
to grow by 10.8% and 8.5% respectively as well as reach an adj. EBIT margin of
18.9% and 17.8% respectively.

 

BUY with a target price of EUR 84.0

In our view, Marimekko has room for an upside as it's valued with a 22E EV/EBIT
multiple of 19.8x, reflecting a 20% discount to its luxury peers. We retain our
BUY-rating and TP of EUR 84.0.

Open report


MARIMEKKO - ESTIMATES WERE BEATEN

03.11.2021 - 09.30 | Earnings Flash

Marimekko’s Q3 result outpaced our expectations. Net sales grew by 11% y/y to
EUR 42.4m and adj. EBIT amounted to EUR 13.3m (31.3% margin). The company
reiterated its FY’21 guidance.

Read more

• Group result: net sales topped our estimates by growing 11% y/y to EUR 42.4m
vs. 40.9m/42.3m Evli/cons. The growth was driven by a favorable trend in
wholesales in Finland. Adj. EBIT improved to EUR 13.3m vs. 8.1m/10.1m Evli/cons.
with a 31.3% margin. EPS totaled EUR 1.30 and grew by 32% y/y.
• Finland: Marimekko brand’s popularity seemed to continue in Finland and net
sales increased by 25% y/y to EUR 28.8m (Evli: 25.3m). The growth was driven by
a favorable trend in wholesale sales (+65% y/y).
• International: One of Marimekko’s strategy’s backbones, international sales,
fell short of our expectations and was a bit disappointment. Net sales decreased
by 10% y/y to EUR 13.6m (Evli: 15.6m). Sales development was weak in the EMEA
and APAC regions, but Scandinavia and North-America managed to increase their
revenue y/y.
• Adj. EBIT: Adj. EBIT was very strong, totaling EUR 13.3m (31.3% margin) vs.
8.1m/10.1m Evli/cons. Profitability was boosted by net sales growth and improved
gross margin. Worth to notice is that fixed costs increased in Q3 and the trend
is expected to continue in Q4.
• No changes in FY’21 guidance (revised on Sep 23rd): expecting net sales and
adj. EBIT margin to be above that of the comparison period.
• Marimekko’s strong performance in Finland provides continuity, but
international sales especially in the APAC region cause some concerns. Our aim
is to find more information for the weak performance of international sales in
Marimekko’s Q3 webcast (today at 2 pm Finnish time).

Open report


ELTEL - EARNINGS MISS ESTIMATES

03.11.2021 - 09.30 | Earnings Flash

Eltel’s Q3 results were burdened by lower top line, continued challenges in the
Polish High Voltage business and cost inflation. Operative EBITA declined y/y
while our and consensus estimates expected improvement. Eltel retains its FY ‘21
guidance and expects operative EBITA margin to improve y/y.

Read more

 * Eltel Q3 revenue declined by 14% y/y and was EUR 193.8m, compared to the EUR
   223.9m/214.0m Evli/consensus estimates. Finland amounted to EUR 77.9m vs our
   EUR 86.3m estimate. Softness in volumes, relative to estimates, was seen
   across the board.
 * EBITDA came in at EUR 11.9m vs the EUR 17.6m/16.5m Evli/consensus estimates.
   Operative EBITA was EUR 4.1m, compared to our EUR 9.2m estimate, meaning
   operative EBITA margin was 2.1% vs our 4.1% estimate. EBIT was EUR 4.0m vs
   the EUR 9.0m/8.3m Evli/consensus estimates.
 * Finnish profitability remained at a strong level and increased y/y from EUR
   4.3m operative EBITA to EUR 4.8m (6.2% margin). The loss in Sweden also
   declined from EUR -0.8m to EUR -0.2m. Meanwhile operative EBITA levels in
   both Norway and Denmark declined by around EUR 1m as the areas had challenges
   with volumes. Losses in other businesses grew by more than EUR 1m y/y. Group
   function costs also increased by EUR 0.4m y/y.
 * The Polish operation has cost Eltel EUR 7.6m in operative EBITA this year and
   Eltel re-evaluates strategic options for the business.
 * Eltel guides FY ’21 operative EBITA margin to improve y/y (unchanged).

Open report


ENERSENSE - EARNINGS MULTIPLES ARE UNDEMANDING

03.11.2021 - 08.45 | Company update

Enersense Q3 figures didn’t meet our estimates, but the company retained its
guidance, and we see the Q3 softness was to a large extent attributable to
project timing issues.

Read more

Q3 figures were not as strong as we had expected

Enersense Q3 revenue was EUR 58.3m, compared to our EUR 63.8m estimate. The
softness was due to Smart Industry, where top line was EUR 18.7m vs our EUR
23.9m estimate. July was slow and pretty much according to the company’s own
expectations, as certain projects did not start until later. Power continued to
reach good profitability, while Connectivity still has some work ahead on that
front. International Operations’ profitability was burdened by challenges in the
Baltic states, where e.g. inflation is more of a problem than in Finland.
Enersense Q3 adj. EBITDA was EUR 4.4m vs our EUR 6.5m estimate. The company
retained its guidance, which implies relatively strong Q4. In our view Enersense
continues to progress well and according to their own plan, and the Q3 softness
was to a large extent attributable to project timing issues.

Q4 estimates up a bit, some downward annual revisions

Enersense sees Q4 margin gains to be driven by Finland and we expect improved
results already from Connectivity. The Baltic countries are a market where
Enersense will find more attractive projects long-term, however we don’t expect
alleviation to short-term profitability challenges during Q4. We now estimate Q4
adj. EBITDA at EUR 5.6m (prev. EUR 5.3m) and Q4 adj. EBIT at EUR 3.3m (prev. EUR
3.1m), and hence our FY ‘21 adj. EBITDA estimate is down to EUR 17.3m (prev. EUR
19.2m) and that for adj. EBIT to EUR 9.5m (prev. EUR 10.8m). The recent small
acquisition of Pori Offshore Constructions got off to a good start as the
company won a contract for a port of HaminaKotka project. Enersense still looks
for additional smaller or larger M&A targets, and the company had some EUR 27m
in cash at the end of Q3.

Peer group discount remains significant

We revise our FY ’21 profitability estimates down by some 10%, while we
downgrade our FY ’22-23 estimates by only a few percentage points. Enersense’s
peers’ earnings multiples have decreased by around 5% in the past few months,
and thus we update our TP to EUR 11 (13). Enersense’s earnings-based valuation
remains unchallenging; we retain our BUY rating.

Open report


ENERSENSE - SOFT Q3 BUT GUIDANCE INTACT

02.11.2021 - 13.20 | Earnings Flash

Enersense Q3 figures came in soft compared to our estimates, but the company
nevertheless retains its FY ’21 guidance, which implies stronger than expected
Q4. The Q4 tilt is due to project cycles and the result is a more balanced
quarterly performance since Q3 is often the strongest quarter.

Read more

 * Enersense Q3 revenue amounted to EUR 58.3m, compared to our EUR 63.8m
   estimate. Smart Industry was EUR 18.7m vs our EUR 23.9m estimate, while Power
   amounted to EUR 12.5m vs our EUR 12.7m estimate. Connectivity top line was
   EUR 12.3m, compared to our EUR 13.7m estimate. International Operations was
   EUR 14.6m vs our EUR 13.5m estimate.
 * Adjusted EBITDA came in at EUR 4.4m vs our EUR 6.5m estimate, while adjusted
   EBIT was EUR 2.6m vs our EUR 4.2m estimate. Smart Industry EBITDA amounted to
   EUR 2.2m. Meanwhile Power EBITDA was EUR 1.1m and that for Connectivity EUR
   0.8m. International Operations posted EUR 0.3m, where Latvian projects’ weak
   margin development was a drag.
 * Order backlog was EUR 272m at the end of Q3 (EUR 160m a year ago).
 * Enersense guides FY ’21 revenue in the EUR 215-245m range, while adjusted
   EBITDA is expected to be EUR 17-20m and adjusted EBIT EUR 8-11m (unchanged).
   The midpoints imply EUR 56.8m revenue, EUR 6.8m adj. EBITDA and EUR 3.4m adj.
   EBIT for Q4, compared to our respective EUR 63.9m, EUR 5.3m and EUR 3.1m
   estimates.

Open report


PIHLAJALINNA - EARNINGS ACCRETION SET TO CONTINUE

01.11.2021 - 09.35 | Preview

Pihlajalinna releases Q3 results on Nov 4. Our estimates remain intact for now.
We continue to see good upside potential due to earnings growth and multiple
expansion.

Read more

Solid Q2 gains represented a minor earnings beat

Pihlajalinna’s Q2 figures were pretty much in line with estimates. Top line grew
24% y/y from a soft comparison period. Private customer volumes recovered but
remained below pre-pandemic levels. Private revenue fell 18% in FY ’20, but
corporate and public sector revenues held up. Q2’20 was nonetheless a bit soft
for the two as well and thus the corporate and public sector groups were able to
post respective 31% and 18% y/y growth rates in Q2’21. The Q3 comparison base is
higher but we still expect 10% y/y growth. Q2 profitability improved by some EUR
6m y/y and was a bit better than estimated. Q3 is seasonally the most profitable
quarter due to low public sector costs and our EUR 10.6m EBIT estimate is ahead
of the EUR 9.0m consensus.

EBIT potential to materialize in the short and long term

Covid-19 services added EUR 8.1m in Q2 revenue and the Q3 level should remain
high (with some cost uncertainty), yet it will be of interest to hear to what
extent Pihlajalinna expects the level to decline from Q4 onwards as the Finnish
vaccination rate reaches 80%. The fading will cause its own top line headwind
but the private volume normalization as well as the public side handling of
queues, further stretched by the pandemic, should compensate. There’s more
profitability potential going forward even with current volume levels. We reckon
the Pohjola Hospital acquisition advances pretty much as planned, and thus
should be completed by the end of the year or early next year at the latest. We
have already added the EUR 60m revenue target to our FY ’22 estimates. The
smallish target has been loss-making, but Pihlajalinna seemed confident with
respect to achieving rapid results. We hence expect earnings accretion for next
year as well.

Current valuation is by no means challenging

Pihlajalinna hasn’t completed significant acquisitions for a while; we estimate
13% growth for FY ’21. We see FY ’21 EBIT at EUR 31.9m and on this basis the
multiples stand at ca. 8x EV/EBITDA and 16x EV/EBIT. Both profitability
estimates and multiples remain well below those of peers: we continue to
consider valuation attractive. We retain our EUR 13.5 TP and BUY rating.

Open report


SRV - WORK STILL TO BE DONE

29.10.2021 - 09.55 | Company update

SRV reported weaker than estimated Q3 results, as project margin woes pushed
EBIT into the red. Progress is however being made and Q4 completions and
potential Pearl Plaza divestment should further strengthen the balance sheet. We
adjust our TP to EUR 0.7 (0.8), BUY-rating intact.

Read more

Q3 results well below our estimates
SRV reported Q3 results below our estimates. Revenue amounted to EUR 191.1m (EUR
261.1m/235m Evli/cons.), falling below our estimates due to the timing of
recognization of income of the Loisto-project but also due to the lower activity
in business construction showing more clearly. The operating profit fell to EUR
-1.6m (EUR 5.3m/4.6m Evli/cons.), as the weak financial development of the
Tampere Areena project and construction material costs and availability impacted
on profitability. Actions to strengthen the balance sheet saw the IB net-debt
decrease further by almost EUR 53m. In light of the weak Q3 SRV revised its
guidance, expecting 2021 revenue of EUR 900-1,000m (prev. 900-1,050) and
operative operating profit of EUR 16-21m (prev. 16-26m).

Further strengthening of balance sheet seen
Our revenue estimates for 2021 remain rather unchanged, now at EUR 912.2m, as we
were already near the lower end of the guidance range. Q4 will see a clear
increase in housing construction revenue with the completion of Loisto. Our
revised estimates put 2021 operative operating profit at EUR 17.2m (prev. 21.1m)
with the weaker profitability in Q3. SRV targets to close a deal in regards to
the divestment of Pearl Plaza during 2021, which together with housing
completions in Q4, namely Loisto, would free up a considerable amount of capital
and further strengthen the balance sheet.

BUY with a target price of EUR 0.7 (0.8)
With the setback in margins in Q3 and uncertainty from construction material
availability and prices we lower our target price to EUR 0.7 (0.8) but retain
our BUY-rating.

Open report


SUOMINEN - VOLUMES AND MARGINS RECOVER IN Q4

29.10.2021 - 09.30 | Company update

Suominen’s Q3 gross margin was hit hard, but the guidance and comments on Q4
volumes prompt us to make some positive estimate revisions for next year.

Read more

Q3 figures were hit hard, but situation is already improving

Q3 revenue fell by 14% y/y to EUR 99m vs the EUR 96m/100m Evli/cons. estimates.
Americas’ top line declined by 21% y/y and that for Europe 4%. There weren’t
that many surprises in terms of volumes, but the decline hit gross margin more
than expected as the figure fell to 5.5% (vs our 12.0% estimate). Q3 EBITDA thus
came in at EUR 4.2m, compared to the EUR 9.5m/9.0m Evli/cons. estimates. Certain
(mostly) transient cost measures helped to the tune of EUR 1-2m. According to
Suominen there is considerable variation within US customer accounts’ demand,
which in our view reflects the local logjam situation where certain non-branded
wipes inundated the retail channels and thus blocked many Suominen’s brand wipe
customers’ sales.

Our new FY ’22 revenue estimate is EUR 455m (EUR 431m)

We estimate Q4 revenue at EUR 113m (prev. EUR 95m); Suominen sees Q4 volumes a
bit lower than in Q2’21, and we expect the respective revenue figures to be
similar as nonwovens pricing adjusts to higher raw material prices. Underlying
wiping demand remains robust, but there’s still a lot of uncertainty regarding
short as well as long term financial performance. Pricing adjusts up in Q4 and
we believe margins will continue to improve also early next year. The guidance
implies Q4 EBITDA will be roughly in the EUR 9-15m range. The midpoint suggests
EUR 48m annual EBITDA, and in our view the figure has a good chance of landing
in the EUR 45-50m range: we expect continued q/q improvement from Q4, meaning FY
’22 EBITDA should be well above EUR 40m even if Q4 EBITDA lands at the low end
of the range. We previously estimated FY ’22 EBITDA at EUR 48.5m and our revised
estimate stands at EUR 50.1m.

We expect annual EBITDA to stabilize around EUR 50m

The volume recovery also means the completed Cressa line as well as the other
two projects will not have to suffer from low utilization rates. Suominen is
valued around 5.5x EV/EBITDA and 9.5x EV/EBIT on our FY ’21-22 estimates as we
expect flat annual profitability development and meaningful volume improvement
from the Q3 lows. We retain our EUR 6 TP and BUY rating.

Open report


SOLTEQ - BUMPS ON THE ROAD

29.10.2021 - 09.00 | Company update

Solteq’s Q3 was weaker than expected due to two project postponements.
Uncertainty has increased but Solteq is still well on its way toward solid
growth and profitability.

Read more

Two project postponements drove weaker Q3 figures
Solteq’s Q3 results took an unfortunate turn from the solid development trend so
far during 2021. Net sales grew slower than expected by 12.2% y/y to EUR 14.9m
(Evli EUR 16.4m). The adj. operating profit declined slightly to EUR 1.2m (Evli
EUR 2.0m). Solteq Digital grew 4.3% to EUR 9.5m (Evli EUR 10.4m) and the adj.
EBIT improved slightly to EUR 0.9m (Evli EUR 1.1m) while Solteq Software grew
29.7% to EUR 5.4m (Evli EUR 6.0m) and the adj. EBIT declined slightly to EUR
0.3m (Evli EUR 1.0m). The Q3 results were mainly impacted by the postponement of
two larger customer deliveries in the retail-segment due to the prevailing
component shortage situation and to some extent by an increase in subcontracting
costs due to a lack of specialists in the IT-sector.

Larger part of Q3 concerns look to be temporary
At least on paper the challenges faced in Q3 appear to be of temporary nature.
The postponements should have a clearly smaller impact on Q4. The prevailing
demand uncertainty due to the pandemic, the component shortage and lack of
industry specialists, however, are a concern, but to our understanding no new
postponements are seen right now. The share of subcontracting is relatively low
but has been increasing and future growth could come at the cost of margins and
vice versa. Potential cost increases may in the future ultimately end up being
absorbed by the customer. We have made some minor downward tweaks to our Q4
estimates but no larger changes to our coming year estimates.

BUY with a target price of EUR 6.8 (8.0)
We see good potential for Solteq returning back on its H1 track but with our
minor estimates and higher uncertainty we lower our target price to EUR 6.8,
with our BUY-rating intact. Our TP values Solteq on a slight premium to
IT-services peers on 2021e P/E and on par with peers on 2022e P/E.

Open report


VAISALA - WILL ACHIEVE ITS TARGETS

29.10.2021 - 08.45 | Company update

Vaisala’s 3rd quarter was in our view well-executed considering issues Vaisala
is facing in the supply chain. With our revised estimates, we retain our
HOLD-rating and raise our target price to EUR 43.0 (42.0).

Read more

Well-executed Q3
Vaisala received a fair number of orders (EUR 109.9m, +29% growth y/y) and the
order book was on a record level at EUR 164.8m (+22% growth y/y). Topline growth
was strong (+19% y/y), totaling EUR 111.5m (Evli: 111.5m). Industrial
instruments, life-science, and power industry segments drove the IM to grow by
35% y/y, totaling EUR 47.1m (Evli: 48.1m). W&E grew by 9% y/y to EUR 64.4m
(Evli: 63.4m), driven by renewable energy and aviation. Gross margin remained
flat and was on a good level at 57.7%. Vaisala’s EBIT margin weakened from 20.7%
to 17.3% due to exceptional costs relating to old M&A activities and settlement
payments. EBIT ultimately amounted to EUR 19.2m. In Q3, Vaisala invested EUR
12.5m in R&D (11% of net sales).

Some segments are still in recovery mode
The demand in Vaisala’s target segments is one after another brightening up, but
there are still some segments stalling. W&E’s meteorology in developing
countries is expected to take a longer time to recover. After crawling for a
while, IM’s liquid measurements are expected to continue to recover. The good
news is that aviation has given some signs of life and the segment is expected
to recover gradually. There are still some uncertainties regarding component
availability and the company has noted that the visibility has weakened. Vaisala
expects the component shortage to last at least to H1’22. So far, Vaisala has
been capable to compensate the additional costs of spot priced components by
revenue scalability. However, the growth outlook is improved and therefore we
have raised our Q4’21 estimates so that the FY’21 figures add up to the upper
limit of the company’s guidance. We expect FY’21 revenue to grow by 15.5% y/y to
EUR 438.5m and an EBIT margin of 12.5%. During 2022-23, we expect revenue to
grow by 8.3% and 6.8% respectively. We estimate the company to reach an EBIT
margin of 12.8% and 13.9% respectively.

HOLD with a target price of EUR 43.0 (42.0)
We made minor adjustments to our 2021-23 estimates, based on target markets’
outlook and the company’s recent performance which gives a ground for a target
price revision. On our new target price and a 22E P/E multiple of 29.3x, Vaisala
is trading approx. in line with its peer group. Given Vaisala’s strong
performance during difficult times, technology leadership, and IM’s growth
potential, we find a premium to peer group justified during less uncertain
times. We raise our TP to EUR 43.0 (42.0) and retain our HOLD-rating.

Open report


ETTEPLAN - INVESTING INTO FUTURE GROWTH

29.10.2021 - 08.30 | Company update

Etteplan’s Q3 fell slightly short of our estimates. Investments into growth
should bear fruition in 2022 but near-term cost and demand uncertainty is seen.

Read more

Added softness to seasonally slower quarter
Etteplan reported its Q3 results, which overall were slightly softer than our
already somewhat cautious estimates. Revenue grew 21% on the weaker comparison
period to EUR 66.9m (EUR 69.3m/71.0m Evli/cons.), of which organic growth some
14%. The operating profit amounted to EUR 4.6m (EUR 5.2m/5.6m Evli/cons.).
Compared to our estimates the softness was seen in Engineering Solutions, while
Technical Documentation Solutions and Software and Embedded Solutions were quite
in line with our estimates. The softness was affected by the vacation season and
thereto related slower start of projects and the prevailing global component
shortage also start to show. Etteplan also invested into growth, with the
company’s headcount clearly on the rise.

Some uncertainty but ingredients for good growth
We have made only minor adjustments to our estimates, mainly from the lower than
expected Q3 results. Our 2021 revenue and EBIT estimates remain within the lower
half of the guidance range (revenue EUR 295-310m and EBIT 25-28m) at EUR 297.7m
and 25.9m respectively. We remain somewhat cautious in Q4 our estimates due to
some demand uncertainty and expected cost increases in returning to the new
normal after the hiatus caused by the pandemic. Industry views on the component
shortage issues varies but we expect to see challenges continue into H1/2022. We
currently expect Etteplan to grow 8.2% in 2022. Should the component shortage
not have a more material impact and acquisitions continue, growth should be
poised to remain double-digit.

HOLD with a target price of EUR 17.0 (17.5)
With the slight increase in uncertainty we adjust our target price to EUR 17.0
(17.5), valuing Etteplan at a slight premium to peers. Etteplan is clearly
investing more into future growth, which bodes well for 2022 should the market
conditions not deter.

Open report


CONSTI - GOOD GROWTH, MINOR MARGIN CONCERNS

28.10.2021 - 10.50 | Company update

Consti reported good Q3 results, with growth picking up better than anticipated
and profitability improving y/y. Construction material costs and availability
cause some concern for margins in coming quarters but overall, the outlook still
remains favourable. We retain our target price of EUR 14.5 and BUY-rating.

Read more

Overall better than expected Q3 results
Consti reported overall good Q3 results and the anticipated pick up in growth
was clearly visible. Revenue grew 11.4% to EUR 76.0m (EUR 73.3m/73.0m
Evli/cons.), with clear growth in housing companies’ revenue. Profitability also
beat our expectations, with EBIT of EUR 3.1m (EUR 2.7m Evli/cons.) and a 0.2pp
y/y increase in the EBIT-margin. The order backlog continued to develop
favourably, up 15% y/y at EUR 217.9m. Consti reiterated its 2021 EBIT guidance
of EUR 4-8m.

Growth picking up, some margin uncertainty
We have slightly raised our estimates in light of the accelerated growth in Q3.
We expect an average annual growth of approx. 7% during 2021-2022 (prev. ~3.5%).
Growth is driven by the improved order backlog and activity levels and also by
the acquisition of RA-Urakointi during the quarter. Demand in the housing market
appears to be at healthy levels again, while demand within commercial premises
is still seeing recovery. In terms of margins we still remain somewhat on the
cautionary side, expecting similar levels during 2021-2022 as seen in 2020 (adj.
EBIT-%: 3.4%). The impact of construction material costs and availability did
not significantly impact Q3 but will according to the company have a larger
impact in Q4. We assume that the impact could also be visible at least during
the first quarter of 2022.

BUY with a target price of EUR 14.5
With our estimates revisions ultimately relatively small, we retain our target
price of EUR 14.5 and BUY-rating. Our target price values Consti at 14.1x 2022E
P/E, roughly on par with the construction peers.

Open report


VAISALA - NO BIG SURPRISES

28.10.2021 - 10.00 | Earnings Flash

Vaisala had given preliminary figures ahead of Q3 and as such contained no
surprises on group level. Net sales grew by 19% y/y to EUR 111.5m and EBIT
amounted to EUR 19.2m. Order received grew by 29% y/y and order book remained on
a record level.

Read more

 * Group results: As expected, net sales grew by 19% y/y to EUR 111.5m vs.
   111.5/111.5m Evli/cons. and EBIT amounted to EUR 19.2m (17.3% margin) vs.
   19.2/19.2m Evli/cons. EPS was slightly below our expectations, EUR 0.44 vs.
   0.46/0.47 Evli/cons.
 * Orders received and order book: Orders received grew by 29% y/y, totaling EUR
   109.9m. Order book was on a record level and grew by 22% y/y, totaling EUR
   164.8m. Aviation over doubled its orders received, while industrial
   measurement, life-science, and renewable energy received strong number of
   orders.
 * Weather & Environment (W&E): W&E grew by 9% y/y to EUR 64.4m (Evli: 63.4m).
   Growth was driven by renewable energy and aviation. EBIT totaled to EUR 5.3m
   (8.2% margin).
 * Industrial Measurements (IM): IM grew by 35% y/y to EUR 47.1 (Evli: 48.1m),
   driven by industrial measurement, life-science, and power industry. EBIT
   totaled to EUR 14.2m (30.2% margin).
 * No change in FY’21 guidance (revised on Oct 19th): net sales of EUR 425-440m
   and an EBIT of EUR 48-58m.
 * Market outlook: High-end industrial instruments, life science, and power
   industry markets is expected to continue to grow. Liquid measurements market
   is expected to continue to recover. Meteorology market in developed countries
   is expected to remain flat, while in developing countries demand is expected
   to continue to suffer and recovery is expected to take longer. Aviation
   market is expected to recover gradually. Ground transportation market is
   expected to be stable. Renewable energy market is expected to continue to
   grow.

Open report


SUOMINEN - Q3 EBITDA WEAKER THAN EXPECTED

28.10.2021 - 10.00 | Earnings Flash

Suominen’s Q3 revenue was close to estimates, but gross margin plunged 5.5%.
EBITDA therefore fell to EUR 4.2m, way below estimates. Suominen nonetheless
sees demand recovery is already underway. Suominen’s guidance implies Q4’21
EBITDA will roughly triple q/q.

Read more

 * Q3 revenue fell by 14.5% to EUR 98.7m, compared to the EUR 96.0m/100.0m
   Evli/consensus estimates. Americas’ top line was EUR 57.0m vs our EUR 55.0m
   estimate, whereas Europe came in at EUR 41.6m vs our EUR 41.0m estimate.
   Suominen sees volume recovery is already happening as it began in late Q3,
   even a bit earlier than expected. Suominen expects Q4’21 volumes to be a bit
   lower than in Q2’21 but clearly above the pre-pandemic levels.
 * Gross profit amounted to EUR 5.5m vs our EUR 11.5m estimate. Gross margin was
   5.5%, compared to our 12.0% estimate.
 * Q3 EBITDA was EUR 4.2m vs the EUR 9.5m/9.0m Evli/consensus estimates, while
   EBIT was EUR -0.8m vs the EUR 4.5m/4.0m Evli/consensus estimates. There were
   some cost savings measures.
 * Suominen guides comparable FY ’21 EBITDA to decrease and sees it landing at
   EUR 47-53m (EUR 60.9m in FY ’20). The range’s midpoint suggests Q4 EBITDA
   will be EUR 11.9m, compared to our EUR 10.1m estimate. The current FY ’21
   consensus EBITDA estimate is EUR 53.1m.

Open report


ETTEPLAN - SLIGHTLY BELOW EXPECTATIONS

28.10.2021 - 09.50 | Earnings Flash

Etteplan's net sales in Q3 amounted to EUR 66.9m, slightly below our estimates
and below consensus (EUR 69.3m/71.0m Evli/cons.). EBIT amounted to EUR 4.6m,
below our consensus estimates (EUR 5.2m/5.6m Evli/cons.). Guidance specified:
Etteplan expects revenue to amount to EUR 295-310m (prev. EUR 295-315m) and
operating profit (EBIT) to amount to EUR 25-28m.

Read more

 * Net sales in Q3 were EUR 66.9m (EUR 55.2m in Q3/20), slightly below our
   estimates and below consensus estimates (EUR 69.3m/71.0m Evli/Cons.). Growth
   in Q3 amounted to 21% y/y, of which 13.8% organic growth.
 * Operating profit in Q3 amounted to EUR 4.6m (EUR 4.3m in Q3/20), below our
   estimates and consensus estimates (EUR 5.2m/5.6m Evli/cons.), at a margin of
   6.9%.
 * EPS in Q3 amounted to EUR 0.14 (EUR 0.13 in Q3/20), below our estimates and
   consensus estimates (EUR 0.16/0.17 Evli/cons.).
 * Engineering Solutions net sales in Q3 were EUR 36.9m vs. EUR 39.5m Evli.
   Operating profit in Q3 amounted to EUR 3.0m vs. EUR 3.6m Evli.
 * Software and Embedded Solutions net sales in Q3 were EUR 18.1m vs. EUR 17.8m
   Evli. Operating profit in Q3 amounted to EUR 1.6m vs. EUR 1.8m Evli.
 * Technical Documentation Solutions net sales in Q3 were EUR 11.8m vs. EUR
   11.8m Evli. Operating profit in Q3 amounted to EUR 1.2m vs. EUR 1.0m Evli.
 * Guidance specified: Etteplan expects revenue to amount to EUR 295-310m (prev.
   EUR 295-315m) and operating profit (EBIT) to amount to EUR 25-28m.

Open report


SRV - PROFITABILITY BURDENS

28.10.2021 - 09.20 | Earnings Flash

SRV's net sales in Q3 amounted to EUR 191.1m, below our estimates and below
consensus (EUR 261.1m/235m Evli/cons.). EBIT amounted to EUR -1.6m, below our
estimates and below consensus (EUR 5.3m/4.6m Evli/cons.).

Read more

 * Revenue in Q3 was EUR 191.1m (EUR 209.8m in Q3/20), below our estimates and
   consensus estimates (EUR 261.1m/235m Evli/Cons.). Growth in Q3 amounted to
   -9% y/y.
 * Operating profit in Q3 amounted to EUR -1.6m (EUR 1.7m in Q3/20), below our
   estimates and consensus estimates (EUR 5.3m/4.6m Evli/cons.), at a margin of
   -0.8%. Profitability affected by material costs and availability and weak
   financial development of the Tampere Areena project.
 * The order backlog in Q3 was EUR 1038m (EUR 1280m in Q3/20), down by -18.9 %.
 * Construction revenue in Q3 was EUR 188m vs. EUR 261m Evli. Operating profit
   in Q3 amounted to EUR 1.6m vs. EUR 7.2m Evli.
 * Investments revenue in Q3 was EUR 4.2m vs. EUR 1.1m Evli. Operating profit in
   Q3 amounted to EUR -2.6m vs. EUR -1m Evli.
 * Other operations and elim. revenue in Q3 was EUR -1.1m vs. EUR -1m Evli.
   Operating profit in Q3 amounted to EUR -0.6m vs. EUR -0.9m Evli.
 * Guidance specified: revenue to amount to EUR 900-1,000m (prev. EUR
   900-1,050m) and operative operating profit (EBIT) to amount to EUR 16-21m
   (prev. EUR 16-26m).

Open report


ASPO - EBIT IS HEADED ABOVE EUR 40M

28.10.2021 - 09.10 | Company update

Aspo’s Q3 EBIT was EUR 12.8m without the one-offs. Valuation is still not very
high as we see scope for well above EUR 40m EBIT next year, but we consider
multiples neutral. Our TP is EUR 14.0 (12.5), rating HOLD (BUY).

Read more

There were some EUR 5.2m in one-off Q3 items

ESL posted a record EUR 7.1m Q3 EBIT vs our EUR 4.5m estimate. The market is
very favorable as cargo volumes grew by 26% y/y and freight rates are now good
across the entire fleet. In our view the Supramaxes are already generating very
high margins, while smaller vessels’ pricing should continue to advance from
here on. Leipurin results were a bit better than we expected, while Telko
achieved EUR 5.9m EBIT (vs our EUR 4.9m estimate) excl. the EUR 3.4m Kauko
impairment. There was also the EUR 1.75m one-off item due to the CEO
change-related costs.

Strong performance should continue for quite some time

We revise our estimates and now see EUR 10.8m in Q4 EBIT (prev. EUR 9.8m). The
guidance constitutes in essence a positive revision and we wouldn’t be surprised
to see Aspo upgrade the range more in the coming months (Q4 hasn’t historically
paled in comparison to Q3). Port logistics challenges may limit ESL’s Q4
potential, but we view our EUR 6.5m EBIT estimate conservative. ESL and Telko
now enjoy very favorable markets, therefore some softening could be due next
year. Both subsidiaries nonetheless continue to progress strategy-wise. ESL’s
new EUR 70m investments (financing will be some combination of own cash and
external pooled funds) are to be ready in ’23 and we view the six small hybrid
vessels a good strategy fit. Meanwhile Telko continues to focus on higher margin
solutions with its latest acquisition of a small Estonian lubricant distributor.

FY ’22 EBIT should have no trouble topping EUR 40m

Our new FY ’22 EBIT estimate is EUR 40.9m (prev. EUR 39.7m), and on this basis
Aspo is valued ca. 13x EV/EBIT. The level is not that high considering cash flow
generation and further value creation potential yet reflects present strong
conditions. We view our EUR 40.9m estimate a bit conservative as we model only
flat EBIT for ESL: we see a reasonable chance for a well above EUR 25m ESL FY
‘22 EBIT. Telko has continued to surprise but for now we don’t expect much more
than EUR 18m EBIT going forward. Our new TP is EUR 14.0 (12.5), and our rating
is now HOLD (BUY).

Open report


SOLTEQ - SOME CHALLENGES FACED

28.10.2021 - 08.45 | Earnings Flash

Solteq’s Q3 was below our expectations, with revenue at EUR 14.9m (Evli EUR
16.4m) and adj. EBIT at EUR 1.2m (Evli EUR 2.0m). Figures were affected by
customer project postponements due to the on-going component shortage. Guidance
intact: group revenue in 2021 is expected to grow clearly and the operating
profit to improve clearly.

Read more

 * Net sales in Q3 were EUR 14.9m (EUR 13.3m in Q3/20), below our estimates
   (Evli EUR 16.4m). Growth in Q3 amounted to 12.2% y/y, of which the larger
   part was organic growth. 22.6% of sales came from outside of Finland.
 * The operating profit and adj. operating profit in Q3 amounted to EUR 1.1m and
   1.2m respectively (EUR 1.4m/1.4m in Q3/20), below our estimates (Evli EUR
   2.0/2.0m). Profitability was affected by the postponement of two larger
   customer projects in the retail sector due to the on-going component shortage
   as well higher subcontracting prices due to a shortage of IT-sector
   specialists.
 * Solteq Digital: revenue in Q3 amounted to EUR 9.5m (Q3/20: EUR 9.2m) vs. EUR
   Evli 10.4m. Growth amounted to 4.3%. The adj. EBIT was EUR 0.9m (Q3/20: EUR
   0.8m) vs. Evli EUR 1.1m. Recurring revenue 37.6% of the segment’s revenue.
   The segment is expected to continue to develop favourably.
 * Solteq Software: Revenue in Q3 amounted to EUR 5.4m (Q3/20: EUR 4.1m) vs.
   Evli EUR 6.0m. The adj. EBIT was EUR 0.3m (Q3/20: EUR 0.5m) vs. Evli EUR
   1.0m. Growth was 29.7%. Recurring revenue 31.5% of the segment’s revenue. The
   segment is expected to continue to develop favourably.
 * Guidance for 2021 intact: group revenue is expected to grow clearly and
   operating profit to improve clearly.

Open report


DETECTION TECHNOLOGY - PERFORMANCE IS IMPROVING

28.10.2021 - 08.15 | Company update

Despite the issues in the supply chain, Detection Technology grew in all of its
BUs and achieved double-digit growth rates in Q3. Net sales grew by 12.5% driven
by strong demand in medical and industrial applications, while security took the
first steps towards growth. We retain our HOLD-rating and adjust the target
price to EUR 30.5 (32.5).

Read more

Q3 fell short of our expectations

DT’s Q3 net sales grew by 12.5% y/y to EUR 23.2m (Evli: 21.7% y/y, 25.1m).
Healthcare investments continued globally and demand for high-end CT equipment
drove the MBU’s growth of 18.8% y/y. IBU scored record sales in Q3 by growing
21.5% y/y and managed to win new strategic customers and projects. Despite
challenges in the availability of materials, SBU sales were ultimately positive
and the market has taken an upward turn towards growth. SBU grew by 0.2% y/y
from a weak comparison period. Adj. EBIT improved by 26.5% to EUR 3.3m (14.1%
margin) and was below our estimates (Evli: 3.7m).

 

We made some adjustments

Despite the weaker Q3 result than expected, the growth outlook has brightened up
and the company expects double-digit growth from all of its BUs in Q4. However,
the component shortage is postponing revenue through prolonged delivery times
and increasing cost pressures that eventually might narrow the margins. After
considering such issues, we have decided to adjust our FY’21 and long-term
estimates, now expecting FY’21 net sales of EUR 90.9m and an EBIT margin of
12.7%. During 2022-23, we expect DT to grow by 16.3% and 12.9% respectively as
well as reach an EBIT margin of 16.3% and 17% respectively.

 

HOLD with a target price of EUR 30.5 (32.5)

Given the estimate revision, the current target price (EUR 32.5) doesn’t reflect
the fair value of DT. On our new target price, the company is still traded with
a premium (22E EV/EBIT 11% premium to peer median), but on our view, it’s
justified given the brightened outlook and growth potential. We retain our
HOLD-rating and adjust TP to EUR 30.5 (32.5).

Open report


CAPMAN - GROWTH MOMENTUM INTACT

28.10.2021 - 08.15 | Company update

CapMan reported solid quarterly figures once again. Our estimates remain largely
intact, with expected near-term carry set to boost profit levels further.

Read more

A strong quarter
CapMan reported its Q3 results, which on group level were slightly better than
expected. Revenue grew 67% to EUR 14.9m (EUR 12.2m/12.6m Evli/cons.). Operating
profit amounted to EUR 10.9m (EUR 10.7m/8.9m Evli/cons.). Business area figures
corresponded rather well with our estimates, the largest differences deriving
from the EUR 2.2m carried interest from CapMan’s Mezzanine V fund and the
Investment business operating profit coming in below our estimates (EUR
5.9m/7.9m act./Evli). Capital under management remained on par with previous
quarter levels at EUR 4.3bn, but with EUR 250m raised in October and on-going
fundraising growth is well set to pick up. In terms of new products CapMan
launched the CWS Investment Partners investment programme in co-operation with
AlpInvest, with some USD 90m committed to the first programme and more scheduled
for 2022.

Small estimate tweaks
Our estimates have seen only small tweaks post-Q3, for FY 21 a slight increase
in management fees in light of the good fundraising progress, seeing >EUR 10m
quarterly levels within grasp. Based on management comments we remain fairly
confident in a clear increase in carry during the coming quarters, as multiple
funds are expected to enter carry in the next six months. For 2022 we expect to
see continued growth in management fees and Management company operating profit
through carry and >10% growth in the Services business. The fair value changes
of own funds (1-9/2021: 26%) has been exceptionally good, and as such we expect
a smaller profit contribution in 2022.

BUY-rating with a target price of EUR 3.4
With only smaller estimates revision we retain our target price of EUR 3.4,
BUY-rating intact. Q3 in our view continued to prove CapMan’s potential and the
outlook remains very promising.

Open report


DETECTION TECHNOLOGY - DOUBLE-DIGIT GROWTH

27.10.2021 - 10.00 | Earnings Flash

Detection Technology’s Q3 result delivered some double-digit growth, but the
result fell short of our expectations. The company expect to see double-digit
growth in all of its BUs during Q4’21.

Read more

• Group level results: Q4 net sales grew by 12.5% y/y to EUR 23.2m vs. EUR
25.1m/25.2m Evli/cons. Adj. EBIT grew by 26.5% y/y and amounted to EUR 3.3m
(14.1% margin) vs. EUR 3.7m/3.9m Evli/cons. R&D costs totaled to 2.6m and were
11.2% of net sales (Q3’20: EUR 2.3m, 11.1%)
• Medical (MBU): sales growth of the MBU was mainly generated by next-generation
CT products and net sales grew by 18.8% y/y, totaling EUR 11.9m (Evli: 35.3%
y/y, 13.6m).
• Security (SBU): the normalization of demand has started in all segments, and
demand has taken an upward turn also in the aviation. Net sales increased by
0.2% y/y from weak comparison period and amounted to EUR 7.5m (Evli: 7.5% y/y,
8m).
• Industrial (IBU): demand was strong in all of the company’s main segments and
net sales grew by 21.5%, totaling EUR 3.8 (Evli: 11.6%, 3.5m).
• Component shortage has been affecting DT’s sales and margins throughout the
year and was also postponing product deliveries during 3rd quarter of 2021.
• FY’21 outlook: DT expects the demand to continue strongly both in the medical
and industrial applications, and the double-digit growth of the MBU and IBU will
be greater in Q4 than in Q3 of 2021. The demand in security applications will
improve, and the company expects the SBU to have double-digit growth in net
sales in Q4 of 2021. DT expects double-digit growth in its total net sales also
in H1 2022.
• No changes in medium-term targets: at least 10% net sales growth and an EBIT
margin at or above 15%.

Open report


ASPO - VERY STRONG UNDERLYING PERFORMANCE

27.10.2021 - 10.00 | Earnings Flash

Aspo’s headline EUR 7.6m Q3 EBIT didn’t meet estimates, but the figure includes
a EUR 3.4m Kauko impairment loss. Both ESL and Telko recorded new profitability
highs.

Read more

 * Aspo Q3 revenue was EUR 148.0m, compared to the EUR 143.1m/141.0m
   Evli/consensus estimates. Q3 EBIT amounted to EUR 7.6m vs the EUR 8.5m/9.0m
   Evli/consensus estimates. The EBIT figure includes Telko’s EUR 3.4m Kauko
   impairment.
 * ESL Q3 revenue came in at EUR 47.3m (a 50% y/y increase) vs our EUR 43.6m
   estimate, while EBIT amounted to EUR 7.1m vs our EUR 4.5m estimate. ESL
   achieved the record-high 15% EBIT margin despite extensive dockings as cargo
   volumes grew by 26% y/y.
 * Telko’s top line was EUR 73.0m, compared to our EUR 71.6m estimate. EBIT was
   EUR 2.5m vs our EUR 4.9m estimate. EBIT margin was thus 3.4% but would have
   been 8% without the EUR 3.4m Kauko impairment. Telko’s own operating result
   represents a record high. Plastics and chemicals prices remained high.
 * Leipurin Q3 revenue amounted to EUR 27.7m vs our EUR 27.9m estimate, while
   EBIT was EUR 0.6m vs our EUR 0.4m estimate.
 * Other operations cost EUR 2.6m, compared to our EUR 1.3m estimate.
 * Aspo guides EUR 30-36m in FY ’21 operating profit. The guidance includes the
   EUR 3.4m impairment loss.

Open report


FINNAIR - STILL SOME WAY UNTIL PROFITABLE LEVELS

27.10.2021 - 09.10 | Company update

Finnair’s Q3 results and updated outlook didn’t provide major surprises
considering the persistent uncertainty around long-haul air travel, however the
operating loss guidance until the end of H1’22 was a minor negative.

Read more

Some initial steps towards profitability

Q3 revenue amounted to EUR 199m, compared to the EUR 264m/247m Evli/cons.
estimates. Passenger revenue came in lower than we estimated, but cargo
continued to support operations and in our view the freight performance explains
a large part of the narrowing in Q3 operating loss. Q3 EBIT was EUR -109m vs the
EUR -149m/-144m Evli/cons. estimates. Demand is right now focused on European
leisure travel, while business travel has taken some tentative initial steps in
Northern Europe. Finnair’s operating cash flow already turned positive in Q3,
the first time since Q4’19. The company has built a EUR 1.2bn cash position; the
buffer stands high in part to meet loan repayments due next year. Finnair
doesn’t expect any major narrowing in Q4 operating loss. Our updated Q4 EBIT
estimate is EUR -76m (prev. EUR -65m).

Profitable RPK levels will still have to wait many quarters

Finnair opens routes to Thailand and the US in November, while Japan and South
Korea should follow around year-end. China may not open before H2’22; China is
an important destination for Finnair and thus decent profitability will probably
have to wait until H2’22. Q1’22 at least will remain in the red, but we would
expect losses to narrow considerably already in Q2’22 if destinations excluding
China are able to support adequate volumes. Q2’22 is still likely to result in
an operating loss. Finnair’s updated outlook wasn’t a huge surprise as it was
well known Asian passenger volume recovery will lag those of Western routes. We
revise our FY ’22 RPK estimate down by 12%. We now estimate FY ’22 EBIT at EUR
30m (prev. EUR 75m), however we make only minor revisions to our FY ’23
estimates.

We consider FY ’23 multiples to be in line with peers’

Finnair is valued high relative to peers on our FY ’22 estimates (6x EV/EBITDA
and 70x EV/EBIT) due to slow Asian route recovery, but on our FY ’23 estimates
the multiples narrow to 4x EV/EBITDA and 10x EV/EBIT. We find the levels to be,
overall, in line with peers. We retain our EUR 0.65 TP and HOLD rating.

Open report


CONSTI - GROWTH PICKING UP NICELY

27.10.2021 - 09.10 | Earnings Flash

Consti's net sales in Q3 amounted to EUR 76.0m, slightly above our and consensus
estimates (EUR 73.3m/73.0m Evli/cons.), with growth picking up clearly to 11.4%
y/y. EBIT amounted to EUR 3.1m, above our and consensus estimates (EUR 2.7m
Evli/cons.). The order backlog continued to grow well, up 15.0% to EUR 217.9m.

Read more

 * Net sales in Q3 were EUR 76.0m (EUR 68.2m in Q3/20), slightly above our and
   consensus estimates (EUR 73.3m/73.0m Evli/Cons.). Sales grew 11.4% y/y.
 * Operating profit in Q3 amounted to EUR 3.1m (EUR 2.5m in Q3/20), above our
   and consensus estimates (EUR 2.7m Evli/cons.), at a margin of 4.1%. Relative
   profitability improved slightly y/y, with the adjusted EBIT-margin up 0.2
   percentage points. Construction material price increases and material
   availability did not have a significant impact.
 * EPS in Q3 amounted to EUR 0.29 (EUR 0.22 in Q3/20), above our consensus
   estimates (EUR 0.25 Evli/cons.).
 * The order backlog in Q3 was EUR 217.9m (EUR 189.4m in Q3/20), up by 15%.
   Order intake was EUR 40.0m in Q3 (Q3/20: EUR 31.0m).
 * Free cash flow amounted to EUR 3.6m (Q3/20: EUR 4.6m).
 * During the reporting period Consti acquired RA-Urakointi Oy, a company
   specialising in the repair of apartments and row houses.
 * Guidance for 2021 (intact): Operating profit is expected to be between EUR
   4-8m.

Open report


SCANFIL - PERFORMANCE IS UNLIKELY TO FALTER

27.10.2021 - 08.50 | Company update

Scanfil’s Q3 EBIT faced some headwinds, but Q4 EBIT is set to improve and
outlook for FY ‘22 doesn’t seem bad either.

Read more

We expect the Q3 margin softness will prove temporary

Scanfil’s Q3 revenue grew by 18.5% y/y and amounted to EUR 167.8m vs the EUR
165.5m/171.2m Evli/cons. estimates. The growth was for the most part
attributable to Advanced Consumer Applications and Energy & Cleantech segments,
while Medtech & Life Science continued to grow at a 12% y/y pace. Advanced
Consumer Applications had to make many spot components purchases and excluding
all such transitory items top line grew by 10.2% y/y. Component availability
issues limited Scanfil’s ability to meet customer demand and the challenges also
hurt relative profitability. We understand the component scarcity situation
limited profitability to the tune of EUR 1.0-1.5m. Q3 EBIT amounted to EUR 9.5m
(5.7% margin), compared to the EUR 10.8m/10.9m Evli/cons. estimates. The
challenging component situation will not fade away for quite some time, however
Scanfil’s comments indicate there should be no major earnings drag going
forward.

Spot purchases’ margin dilution is likely to be transient

Inventories increased by 63% y/y and 24% q/q as Scanfil wanted to secure
necessary components to meet strong customer demand. This had a negative impact
on cash flow, but Scanfil sees the situation is under control and inventories
should not grow much more from here on. The new normal, in terms of component
availability challenges, might mean revenue streams related to component spot
sourcing will begin to generate adequate margins already during the next few
quarters.

In our view earnings growth is set to continue next year

We expect Scanfil’s Q4 EBIT to improve q/q and y/y; our EUR 12.5m estimate
translates to a very good 6.9% margin. The company’s comments on customer demand
and component pricing dynamics suggest favorable outlook for next year’s
earnings. We expect organic growth to continue in FY ’22 at a 7% pace; we see
Scanfil reaching a 6.6% EBIT margin then, which would translate to EUR 48.5m in
EBIT. The Hamburg restructuring also supports earnings growth going forward.
Scanfil is valued 7.8-8.6x EV/EBITDA and 10.1-11.7x EV/EBIT on our FY ’21-22
estimates. We retain our EUR 9 TP and BUY rating.

Open report


CAPMAN - STRONG FIGURES ONCE AGAIN

27.10.2021 - 08.40 | Earnings Flash

CapMan's net sales in Q3 amounted to EUR 14.9m, above our estimates and above
consensus estimates (EUR 12.2m/12.6m Evli/cons.). EBIT amounted to EUR 10.9m, in
line with our estimates and above consensus estimates (EUR 10.7m/8.9m
Evli/cons.).

Read more

 * Revenue in Q3 was EUR 14.9m (EUR 8.9m in Q3/20), above our estimates and
   consensus estimates (EUR 12.2m/12.6m Evli/Cons.). Growth in Q3 amounted to
   67% y/y. The difference to our estimates was largely due to EUR 2.2m carried
   interest in the Management Company business from the Mezzanine V fund.
 * Operating profit in Q3 amounted to EUR 10.9m (EUR 4.5m in Q3/20), in line
   with our estimates and above consensus estimates (EUR 10.7m/8.9m Evli/cons.),
   at a margin of 73%. The Investment business operating profit was below our
   expectations but compensated by the carried interest.
 * EPS in Q3 amounted to EUR 0.06 (EUR 0.02 in Q3/20), above our estimates and
   consensus estimates (EUR 0.05/0.04 Evli/cons.).
 * Management Company business revenue in Q3 was EUR 12.9m vs. EUR 10.3m Evli.
   Operating profit in Q3 amounted to EUR 5.1m vs. EUR 2.9m Evli.
 * Investment business revenue in Q3 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q3 amounted to EUR 5.9m vs. EUR 7.9m Evli.
 * Services business revenue in Q3 was EUR 1.9m vs. EUR 1.8m Evli. Operating
   profit in Q3 amounted to EUR 1.1m vs. EUR 1.0m Evli.
 * Capital under management by the end of Q3 was EUR 4.3bn (Q3/20: EUR 3.6bn).
   Real estate funds: EUR 2.9bn, private equity & credit funds: EUR 1.1bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.03bn.

Open report


INNOFACTOR - SOME CHALLENGES WITH GROWTH

27.10.2021 - 08.15 | Company update

Innofactor’s Q3 profitability remained at good levels but growth was not quite
as good as expected due to organizational restructuring causing a sales dip in
Finland. Recruitments pose some concerns for future growth but all in all the Q3
report did not change much.

Read more

Some weakness in sales but profitability remained good
Innofactor reported its Q3 results, which fell slightly short of our
expectations. Revenue declined 2.0% y/y but grew 3.0% organically to EUR 13.7m
(Evli 14.5m). Revenue growth was affected by organizational restructuring in
Finland, which led to a slight dip in domestic sales. EBITDA and EBIT amounted
to EUR 1.7m (Evli 1.8m) and EUR 0.9m (Evli EUR 1.0m) respectively, with all
other countries except Sweden showing positive EBITDA. With no significant new
orders, the order backlog growth halted q/q, but was still up 24% y/y at EUR
72.0m. Innofactor reiterated its guidance, expecting revenue and EBITDA to
increase compared to 2020. The Q3 report was in our view slightly more on the
negative side, as although profitability remained on good levels the slower
sales growth and lower headcount (-9.0% y/y) adds some pressure to growth
expectations going forward.

Expect modest growth, new recruitments a slight concern
We have made some minor downward tweaks to our estimates but overall no notable
changes. We expect growth of 1.9% and some 5-6% organically (excl. Prime
divestment) in 2021. We expect EBITDA (excl. NRI’s) to improve to EUR 8.3m
(2020: 7.2m), at a sound margin of around 12%. Our growth estimates for
2022-2023 remain quite low, at 4% and 3% respectively, given the company’s 20%
long-term growth target. The lower headcount in Q3 and the noted challenges in
the recruitment market raises some additional concerns for growth and is
something that we will be monitoring during the coming quarters.

BUY with a target price of EUR 2.1 (2.2)
With the slight additional pressure on growth we adjust our TP to EUR 2.1 (2.2)
and retain our BUY-rating. Our target price values Innofactor at approx. 19x
2021e adj. P/E.

Open report


INNOFACTOR - NO MAJOR SURPRISES

26.10.2021 - 10.45 | Earnings Flash

Innofactor’s Q3 results were close to our expectations. Net sales amounted to
EUR 13.7m (Evli EUR 14.5m), while EBITDA amounted to EUR 1.7m (Evli EUR 1.8m).
The order backlog growth halted due to a lack of new significant orders but was
still up 24% y/y at EUR 72.0m.

Read more

• Net sales in Q3 amounted to EUR 13.7m (EUR 14.0m in Q3/20), slightly below our
estimates (Evli EUR 14.5m). Net sales in Q3 declined 2.0% y/y but grew 3.0%
organically. Revenue growth in Finland saw a minor negative impact caused by
organizational restructuring.
• EBITDA in Q3 was EUR 1.7m (EUR 1.6m in Q3/20), in line with our estimates
(Evli EUR 1.8m), at a margin of 12.3%. EBITDA was positive in Finland, Norway
and Denmark.
• Operating profit in Q3 amounted to EUR 0.9m (EUR 0.4m in Q3/20), in line with
our estimates (Evli EUR 1.0m), at a margin of 6.7%.
• Order backlog at EUR 72.0m, up 24% y/y. Q3 saw no new significant orders
received and as such the order backlog remained on previous quarter levels.
• At the end of August, Innofactor decided to renew its strategy to support
growth even more strongly, tightening its offering according to the growth areas
in question: Digital Services, Business Solutions, Information and Case
Management, Data and Analytics, Cloud Infrastructure and Cybersecurity.
• Guidance reiterated: Innofactor’s net sales and EBITDA in 2021 are estimated
to increase compared to 2020 (net sales and EBITDA EUR 66.3m and EUR 7.2m
respectively).

Open report


ETTEPLAN - SEASONAL SLOWNESS AHEAD

26.10.2021 - 10.30 | Preview

Etteplan reports its Q3 results on October 28th. We expect to see solid growth
figures on the weak comparison period and continued good profitability, with
some reservation for potential cost inflation. We retain our HOLD-rating and
target price of EUR 17.5.

Read more

Growth on weak comparison figures in H1
Etteplan’s H1 started off on quite positively, with revenue growing 10.3%,
albeit on weaker comparison period figures due to the impact of the pandemic.
Growth was supported by recovery in demand but largely by inorganic growth. Good
operational efficiency kept the group EBITA-margin above the target 10% level at
10.5%. Etteplan raised its revenue guidance range to EUR 295-315m (prev. EUR
285-305m), with the EUR 25-28m EBIT guidance range intact. Etteplan has during
Q2-Q3 made several mainly smaller acquisitions, F.I.T. (DE) and Skyrise.tech
(PL) in Q2 and BST Buck Systemtechnik (DE) and Adina Solutions (FI),
strengthening especially the company’s Technical Documentation Solutions and
Software and Embedded Solutions service areas and the company’s presence in
Europe.

Potential minor cost inflation concerns
Etteplan is set to grow well on the weak comparison period figures, with our Q3
growth estimate at 25.4%. We estimate a group EBIT of EUR 5.2m, at a 7.6%
margin. We remain slightly more on the conservative side in particular in regard
to profitability in comparison to previous quarters, as some potential triggers
for cost inflation were seen in Q2 from new recruitments and own growth
initiatives picking up. Q3 is also seasonally slower which will have an impact
on figures compared to previous quarters. For the full year we estimate revenue
of EUR 300m and an EBIT of EUR 26.4m, quite near the mid-point of the guidance.

HOLD-rating with a target price of EUR 17.5
We have made no significant changes to our estimates ahead of the Q3 report and
retain our HOLD-rating and target price of EUR 17.5. Our TP values Etteplan at
~20x 2022e P/E.

Open report


FINNAIR - LOSSES WILL CONTINUE FOR NOW

26.10.2021 - 10.00 | Earnings Flash

Finnair’s Q3 operating loss was smaller than estimated despite certain top line
softness. Slow Asian traffic recovery nevertheless continues to limit potential
and losses will not subside in Q4. Finnair might not be back to black before
H2’22.

Read more

• Q3 revenue grew by 105% y/y and was EUR 199.4m vs the EUR 263.7m/246.7m
Evli/consensus estimates.
• Adjusted EBIT amounted to EUR -109.1m, compared to the EUR -149.3m/-144.0m
Evli/consensus estimates.
• Fuel costs were EUR 48m vs our EUR 77m estimate. Staff costs were EUR 58m vs
our EUR 72m estimate. All other OPEX+D&A combined amounted to EUR 212m, compared
to our EUR 275m estimate.
• Cost per Available Seat Kilometer was 9.37 eurocents vs our estimate of 12.50
eurocents.
• Finnair expects Q4 operating loss to be of similar magnitude as in Q3. This is
not a major surprise compared to the EUR -65.5m/-59.8m Evli/consensus estimate
for Q4. Finnair estimates positive operating cash flow for Q4.
• Finnair estimates operating losses will continue during H1’22 due to the slow
recovery of Asian traffic. Finnair doesn’t expect return to pre-pandemic traffic
levels before 2023, although the H2’22 operational environment could be already
closer to that era.

Open report


SCANFIL - GUIDANCE IMPLIES STRONG Q4 EBIT

26.10.2021 - 09.45 | Earnings Flash

Scanfil’s Q3 revenue landed close to expectations, but the EUR 9.5m EBIT fell a
bit short of estimates. Scanfil’s FY ’21 guidance, however, implies Q4 EBIT will
be considerably higher.

Read more

• Q3 revenue grew by 18.5% y/y to EUR 167.8m, compared to the EUR 165.5m/171.2m
Evli/consensus estimates. EUR 11.7m of revenue amounted to transitory separately
agreed low-margin customer invoicing due to component availability issues. Most
of this transitory revenue was located within Advanced Consumer Applications.
Revenue growth excluding the transitory items was 10.2% y/y.
• Advanced Consumer Applications’ top line was EUR 55.4m, while we expected EUR
46.7m. Energy & Cleantech amounted to EUR 43.5m vs our EUR 41.7m estimate.
Automation & Safety was EUR 32.5m, compared to our EUR 38.1m.
• Scanfil Q3 adjusted EBIT amounted to EUR 9.5m vs the EUR 10.8m/10.9m
Evli/consensus estimates. EBIT margin was 5.7% vs our 6.5% estimate. According
to Scanfil material constraints and the Hamburg factory closure caused about a
EUR 2m negative EBIT impact for the quarter. Scanfil’s guidance midpoint also
suggests Q4 EBIT will be some EUR 3m higher q/q.
• Scanfil guides FY ’21 revenue at EUR 670-710m and adjusted EBIT at EUR 41-44m
(unchanged).
• Scanfil retains its long-term financial targets for now (EUR 700m revenue on
an organic basis in FY ’23 with a 7% EBIT margin).

Open report


VERKKOKAUPPA.COM - GROWING IN A SOFT MARKET

25.10.2021 - 10.00 | Company update

With strong growth figures, Verkkokauppa.com achieved its 33rd consecutive
quarter of growth, but the competitive environment pressed margins below our
estimates. We retain our BUY-rating and adjust target price to EUR 10 (10.8).

Read more

Sales mix and increased costs pressed the margins
Verkkokauppa.com delivered strong growth figures, but decreased gross margin,
additional warehousing, and marketing costs pressed the profitability below our
estimates. Top line grew by 9.1% y/y to EUR 141m (Evli: 139.7m). Online sales
grew at an 18.7% y/y pace, while B2B sales were up 22% y/y. Export business
returned to the growth path with a sales increase of 4.5% y/y. Gross profit
remained even y/y and amounted to EUR 20.9m (Evli: 23m). Gross margin weakened
to 14.8% (Evli: 16.5%) and was affected by stronger sales in lower-margin
categories. Increased price competition pressed the margins further down. EBIT
fell short of our expectations (EUR 6.8m) and decreased by 17% to EUR 4.7m
(margin of 3.3%).

We made minor adjustments
While core categories performed well, growth was also seen in evolving
categories. Despite the softened markets, the company also gained some market
share in traditional consumer electronic markets. The Q4 has usually been
price-driven, meaning that coming campaigns might have an impact on the
company’s margins. Considering the increased cost pressures, marketing
investments, and changes in warehousing, we made only minor adjustments to our
FY’21-22 estimates.

BUY with a target price of EUR 10 (10.8)
Verkkokauppa.com reiterated its FY’21 guidance and expects revenue of EUR
570-620m and adj. EBIT of EUR 20-26m. We expect revenue of EUR 600.1m and an
adj. EBIT of EUR 21.4m (3.6% margin). Our view on the company’s growth path
remains bright, but increased competition made us tweak the profitability down
for 21-22E. On our adjusted target price, the company’s valuation is
approximately in line with its peer group. We retain our BUY-rating and adjust
TP to EUR 10 (10.8).

Open report


RAUTE - POSITIONED FOR EARNINGS RECOVERY

25.10.2021 - 09.30 | Company update

Raute’s profitability already improved. There’s uncertainty as to how much more
margins will improve in the short-term, but we remain confident Raute’s
positioning is favorable while the next expansion cycle has now begun.

Read more

Still shy of long-term profitability potential

Q3 top line was EUR 38m vs our EUR 36m estimate. Russia drove projects’ 28% y/y
growth, while services grew 50% y/y from a low comparison base. Raute has booked
many modernization orders in recent quarters and the pace didn’t falter, in fact
Q3 modernization orders helped services’ intake to a record high of EUR 21m.
EBIT improved to EUR 1.9m, vs our EUR 1.4m estimate, a reasonable level but
still short of long-term potential. Other operating costs remained high, at EUR
4.6m, as Raute continued to invest in R&D, digitalization, and marketing. These
efforts should help Raute’s emerging markets presence in the long-term.

Strong growth supports improving profitability estimates

We expect FY ’21 orders to top the record seen in ’18. Raute’s advanced markets
(Europe, North America & Russia) now drive activity, and there are two big
potential Russian projects to further secure outlook for the coming years.
Pandemic restrictions still limit potential within maintenance services, and the
pandemic has postponed emerging markets prospects, but we view Raute’s long-term
position favorable and there’s reason to conclude competitiveness has improved
due to the acquisition of Hiottu (a small vendor of e.g. machine vision
solutions). We don’t expect Q4 EBIT to be yet that great, but we see Raute is
set to achieve EBIT margins clearly above 5% in the coming years.

We make only marginal adjustments to our estimates

Raute has plenty of workload and outlook for further orders remains strong.
Project execution and margins are hence major short-term focus areas. Raute had
certain project execution issues in ’18, but this time the challenges will be
different and not Raute-specific. We expect Raute to reach EUR 10m in FY ’22
EBIT. There’s still uncertainty regarding how much Raute’s EBIT will improve in
the short-term (cost inflation is a risk), but we believe the company to be able
to achieve more than EUR 12m in FY ’23 (for now we estimate the figure at EUR
11.8m). Raute is valued 6.2-7.5x EV/EBITDA and 8.4-10.1x EV/EBIT on our FY
’22-23 estimates. We retain our EUR 26.5 TP and BUY rating.

Open report


CONSTI - EYEING PICK-UP IN GROWTH

25.10.2021 - 09.30 | Preview

Consti will report its Q3 results on October 27th. We expect to see growth to
start picking up supported by the good order intake during H1 and for
profitability to remain at healthy levels. We retain our BUY-rating and TP of
EUR 14.5.

Read more

Slight growth and healthy profitability (excl. NRI’s) in H1…
Consti’s first half of 2021 got off to a decent start. Revenue grew y/y, albeit
at a minor pace of 1.4%, with slight pick-up in the second quarter. The order
intake improved well, up 30.5% to EUR 168m. As a result, the order backlog was
also up y/y by 11.5% at 236.2m. Q2 saw an unfortunate hit to profitability due
to the unfavourable outcome of the Hotel St. George arbitration proceedings
resulting in a one-off loss of EUR 3.4m. Nonetheless the H1 adj. EBIT-margin
remained on par with previous year levels of 2.6% and improved slightly in Q2.
Consti lowered its guidance due to the arbitration proceedings ahead of Q2,
expecting an EBIT of EUR 4-8m in 2021 (prev. EUR 7-11m).

… with expectations of pick-up in growth during H2
We expect growth to pick up in H2 supported by the good order intake during the
first half of the year and a good activity level. Consti’s order intake was
aided by its first new construction projects and although demand in certain
commercial areas still remain affected by the pandemic, the housing company
market has been recovering well and should support demand going forward. We
expect growth of 7.5% in Q3 and 4.3% for FY 2021. In regard to profitability
Consti achieved rather decent margins already during the previous year and with
minor uncertainty due to the recent fluctuations in construction material costs
we expect little improvement in margins during H2. We expect Q3 EBIT of EUR 2.7m
and FY 2021 EBIT of EUR 5.9m, at the mid-point of Consti’s guidance range.

BUY-rating with a target price of EUR 14.5
We have made no adjustments to our estimates ahead of the Q3 report. We retain
our BUY-rating and target price of EUR 14.5 Our target price values Consti at
approx. 17x 2021 P/E (excl. arbitration proceedings items).

Open report


VERKKOKAUPPA.COM - STRUGGLING WITH MARGINS

22.10.2021 - 10.00 | Earnings Flash

Verkkokauppa.com’s Q3 earnings fell short from our estimates, while revenue
growth topped the estimates. Top line grew by 9.1% to EUR 141m, gross profit
remained steady y/y at EUR 20.9m and adj. EBIT amounted to EUR 4.7m.

Read more

• Net sales topped our estimates (EUR 139.7m) and grew by 9.1% y/y to EUR 141m,
driven by all business segments.
• The strategic growth area, B2B, grew strongly by 22% in quarter. Growth came
from the customer segments of large as well as small and medium sized
enterprises. The export business returned to the growth path once travel
restrictions were relieved, and export sales increased 4.5% during the period,
representing 6% of total sales. The company succeeded well in converting many
online visitors to regular buying customers during the comparison period, with
an improvement of conversion rate.
• Gross margin was 14.8% and fell below our estimates (16.5%). Gross profit
ultimately amounted to EUR 20.9m and was on the same level as in comparison
period. Gross margin was affected by tightened competition in lower-margin
categories like phones, computers, and home appliances. Also, the share of
low-margin products was increased in Q3.
• Adj. EBIT was below our estimates (EUR 6.8m) and was mostly affected by
tightened gross margin. The EBIT saw a decline of 17% and amounted to EUR 4.7m
(margin of 3.3%).
• Adj. EPS amounted to EUR 0.08 (Evli: EUR 0.12) and saw a decline of 15%.
• The company guides EUR 570-620m revenue and EUR 20-26m adj. EBIT for FY ’21
(unchanged)

Open report


DETECTION TECHNOLOGY - GROWTH IS EXPECTED TO PICK UP IN Q3

22.10.2021 - 09.45 | Preview

Detection Technology will report its Q3 result on October 27th. We have made no
changes to our estimates ahead of Q3, expecting revenue to grow by 21.7% to EUR
25.1m and an EBIT margin of 14.7%.

Read more

Q2 included some seasonality
The Q2 result was good on a group level, but there were deviations between BUs.
The company expected and saw pick-up in SBU’s growth towards the end of the
quarter, but with the sluggish performance of aviation SBU’s top line still
declined by 11.7% y/y. MBU had a strong quarter and saw a growth of 37% y/y
while IBU faced some short-term seasonality and declined by 10.4% y/y. The
company grew by 11.4% y/y to EUR 23.5m driven by MBU. The EBIT margin improved
from 12.3% to 12.6% y/y and
EBIT ultimately amounted to EUR 3m.

Medical expected to be in the driver’s seat
We expect Q3 net sales to grow from a pretty weak comparison period by 21.7% y/y
to EUR 25.1m. We estimate MBU to grow by 35.3% driven by strong demand for CT
equipment. We expect IBU to recover from the seasonal decline in Q2 and grow by
11.6% while we expect SBU to reverse the sales decline trend
and grow by 7.5%. We expect EBIT to improve to EUR 3.7m (margin of 14.7%) driven
by stronger revenue growth. The component shortage is still tightening the
margins as
component prices have increased. To our understanding, the shortage has affected
DT’s sales volumes. Depending on the source, the shortage is expected to last at
least until H1’22.

HOLD with a target price of EUR 32.5
We have made no changes to our estimates ahead of Q3. With 22E EV/EBIT 24.8x and
P/E 33.7x, DT’s premium to peer median is 15% and 25% respectively. The stock is
not cheap, but we see long-term potential in the business as the security market
growth kicks in and still emerging technologies develop and commercialize. We
retain our HOLD-rating and TP of EUR 32.5.

Open report


RAUTE - PROFITABILITY IMPROVED

22.10.2021 - 09.30 | Earnings Flash

Raute reached an already reasonable EUR 1.9m EBIT in Q3. Both revenue and
profitability beat our estimates. Q3 order intake did not quite reach our
estimate, but Raute’s order book touched an all-time high of EUR 150m.

Read more

 * Raute’s Q3 revenue grew by 36% y/y to EUR 37.9m vs our EUR 36.0m estimate.
   Project deliveries amounted to EUR 23.1m, compared to our EUR 21.5m estimate.
   Technology services’ top line was EUR 14.8m vs our EUR 14.5m estimate. Raute
   estimates maintenance service sales to have been even higher without the
   pandemic travel restrictions.
 * Q3 EBIT amounted to EUR 1.9m, compared to our EUR 1.4m estimate. The 5.1%
   operating margin topped our 3.9% estimate. The result was also weakened by a
   few unexpected cost items, including a large expense related to the repair of
   an important machine tool at Raute’s Nastola plant.
 * Order intake was EUR 58m vs our EUR 63m estimate. Project deliveries orders
   amounted to EUR 37m while we expected EUR 46m. Technology services orders
   were EUR 21m, compared to our EUR 17m estimate. Modernization projects helped
   services’ order intake.
 * Order book amounted to EUR 150m at the end of Q3 (EUR 62m a year ago).
 * Raute guides revenue to increase and operating profit to improve this year
   (unchanged).

Open report


SUOMINEN - IMPROVEMENT POTENTIAL BEYOND H2’21

21.10.2021 - 09.40 | Preview

Suominen releases Q3 results on Oct 28. The company issued a negative profit
warning just before the release of its Q2 report; we make no changes to our
lowered estimates ahead of the Q3 report.

Read more

We leave our estimates unchanged for now

Suominen’s Q2 was still good in terms of revenue and profitability, although the
US inventory pile-up already began to have an effect and led to some top line
softness. Americas’ Q2 revenue declined by 13% y/y and thus Suominen’s EUR 114m
top line fell short of the EUR 120m estimates (Europe still grew by 3% y/y).
Suominen’s gross margin however remained a strong 14.7%, which helped the
company to reach EUR 15.3m in EBITDA, in other words somewhat above estimates.
We revised our H2’21 as well as FY ’22 estimates down, and we leave our
estimates unchanged ahead of the report. We still expect Americas’ Q3 revenue to
have dipped by 24% y/y; we estimate 6% y/y drop for Europe. We estimate Q3
EBITDA at EUR 9.5m.

Focus will be on the US volume recovery from Q4 onwards

We see Suominen H2’21 revenue down by 16% y/y. The effect, when combined with
our estimated ca. 400bps y/y softening in gross margin, is a EUR 12m y/y
decrease in H2’21 EBITDA to EUR 19.6m. We find raw materials prices relevant for
Suominen did not gain that much during Q3, at least compared to the surge seen
in Q2. The Q3 report’s focus will be on how the US inventory situation looks now
and to what extent the supply jam can be expected to dissolve by the end of Q4.
We also expect Suominen to have either completed or to be near completing the
announced investments in Italy and the US.

Some y/y softness in FY ’22 EBITDA due to strong H1’21

We estimate FY ’22 revenue at EUR 431m, which implies on average 13% higher
quarterly revenue going forward from H2’21. We expect this growth to help
operating margins up by ca. 100bps from our estimated Q4’21 levels, and we
therefore estimate FY ’22 EBITDA at EUR 48.5m, down by some EUR 5m y/y. Suominen
is now valued around 5.5x EV/EBITDA and 9x EV/EBIT on our FY ’21-22 estimates.
We consider these levels very modest despite the uncertainties related to
volumes and gross margins. We retain our EUR 6 TP and BUY rating.

Open report


VAISALA - SIGNS OF STRONGER GROWTH

20.10.2021 - 09.45 | Company update

Vaisala revised its guidance for FY 2021 and disclosed preliminary figures for
Q3’21. The company is now expecting revenue of EUR 425-440m (prev. 400-420m) and
an operating profit (EBIT) of EUR 48-58m (prev. 40-50m).

Read more

Strong 3rd quarter
Preliminary orders received and net sales were strong, EUR 109.9m (growth 29%
y/y) and EUR 111.5m (growth 19% y/y) respectively. Preliminary EBIT was a bit
weaker at EUR 19.2m (19.5m), 17.3% (20.7%) of net sales. To our understanding,
the profitability was burdened by increased material costs. The company had a
robust Q3 and demand for Vaisala’s offering continued strongly in both BUs,
especially in Industrial Measurements. Despite the component shortage, Vaisala
found solutions to most availability issues together with suppliers and by
purchasing higher-priced components from the spot market.

The component shortage is expected to continue
The global shortage of components is expected to continue during the fourth
quarter and the first half of next year. Vaisala estimates, that component
shortages will continue to generate additional material costs during the fourth
quarter of 2021. We have revised our net sales and EBIT estimates for 2021-23E
to reflect the company’s strong performance and a solid outlook. We expect the
company to grow by 14.5% to EUR 434.5m driven by 26.1% growth in IM, while we
expect W&E to grow by 7.4% in 2021. We estimate the company to reach an EBIT
margin of 12.6% in 2021. For 2022-23E we expect Vaisala to grow by 8.3% and 6.8%
respectively.

TP of EUR 42 (prev. EUR 38) with HOLD-rating
On our revised FY 22 estimates, Vaisala trades at a premium compared to its
peers. Vaisala has performed well during FY 21 but considering the uncertainties
relating to component shortage and availability, we do not find the valuation
overly stretched (premium of 27% and 9% to 2022E EV/EBIT and P/E peer median).
With our raised estimates, we adjust our TP to EUR 42 (prev. EUR 38) and retain
our HOLD-rating.

Open report


FINNAIR - STILL WAITING FOR ASIAN PASSENGERS

20.10.2021 - 09.25 | Preview

Finnair reports Q3 results on Oct 26. Losses remain large and focus is on
narrowing them from Q4 onwards. We expect Finnair to achieve break-even EBIT in
H1’22 even if traffic still continues to normalize throughout H2’22.

Read more

Q3 losses are going to be steep like before

Q3 traffic figures show revenue passenger kilometers doubled y/y and tripled q/q
but were still only 13% of Q3’19 levels. The Q3 passenger volumes were also
significantly below our estimates and hence we revise our revenue estimate down
to EUR 264m (prev. EUR 332m). We now expect EUR 149m Q3 operating loss (prev.
EUR 132m). Jet fuel prices have also advanced by some 25% during the past three
months (average prices increased by about 10% q/q in Q3). We still expect losses
will begin to narrow in Q4, however we don’t see the recovery quite as fast as
before and now estimate Q4 operating loss at EUR 65m (prev. EUR 13m). Somewhat
slower-than-anticipated recovery should not be a major issue for Finnair,
considering e.g. the recent sale-and-leaseback transaction which untied more
than USD 400m.

We expect FY ’23 RPK to be 95% of FY ’19 levels

Important destinations like Japan and South Korea have progressed with
vaccinations, but Finnair’s Asian passenger volumes remain low for now. Asian Q3
RPK was only 4% of Q3’19 levels, while European RPK had already reached 21% of
similar comparable levels. North American RPK also progressed to 19%, however
Finnair does only marginal volumes on those routes. The Asian reliance means
Finnair’s volume recovery takes at least a bit longer than that for many other
Western airlines. We expect Finnair to reach break-even EBIT in H1’22, and
decent profitability should be possible during H2’22. The company could
therefore achieve modest profitability next year, but more significant annual
EBIT may have to wait until FY ’23. We cut our FY ’22 EBIT estimate from EUR
150m to EUR 75m, while our FY ’23 estimate remains basically unchanged at around
EUR 200m.

The inevitable passenger volume recovery is fully valued

Finnair is bound to make a strong operational recovery sooner or later, but in
our view this outlook is pretty much fully valued already. Finnair is valued ca.
30x and 11.5x EV/EBIT on our FY ’22-23 estimates, a level we find to be well in
line with primary European peers. We retain our EUR 0.65 TP and HOLD rating.

Open report


VERKKOKAUPPA.COM - GROWTH IS EXPECTED TO CONTINUE

19.10.2021 - 09.40 | Preview

Verkkokauppa.com reports its Q3 results on Fri, the 22nd of Oct. Preliminary
figures show a solid third quarter and our attention will concentrate on the
comments regarding end of the year as crucial campaign season arrives and
temporary supply chain problems still exist.

Read more

Q2 figures topped estimates

Verkkokauppa.com’s strong Q2 result topped estimates. Top line grew by 6% y/y to
EUR 131m, driven by strong B2B sales and online transition. Growth in consumer
sales was moderate and export sales decreased due to COVID-19 restrictions. The
pandemic restrictions still strengthened online sales share, not to mention the
positive effects of consumer purchase behavior. Profitability was boosted by
increased gross margin through strong sales in higher margin evolving categories
like Sports, Home & Lighting, and BBQ & Cooking. EBIT eventually amounted to EUR
5.1m (EBIT margin of 3.9%).

Waiting for further evidence on strategy execution

The company guides EUR 570-620m revenue and EUR 20-26m adj. EBIT for FY ‘21. We
expect Q3 net sales to grow by 8% y/y to EUR 139.7m (EUR 138.6m cons.) and an
adj. EBIT margin of 4.8% (4.5% cons.). Our FY ‘21 net sales estimate is approx.
at the midpoint of the company’s guidance, at EUR 599m (EUR 592m cons.), and
adj. EBIT estimate at the upper bound of the guidance, at EUR 24.8m (EUR 23.5m
cons.). Verkkokauppa.com’s CMD elaborated on its strategy execution. The
execution plans sound reasonable on paper, but further evidence is needed before
we raise our estimates nearer the company’s long-term targets.

Current valuation leaves long-term upside potential

Verkkokauppa.com’s absolute valuation has slightly increased since our last
update, but the company is still valued at a discount compared to its Nordic and
European online-focused peers. On our FY ‘22 estimates the company trades at an
EV/EBIT of 12.6x (12% discount to online-focused Nordic and European peers). We
retain our TP of EUR 10.80 and BUY-rating.

Open report


RAUTE - ORDER BOOK REACHES A RECORD HIGH

19.10.2021 - 09.15 | Preview

Raute reports Q3 results on Oct 22. We make only minor revisions to our
estimates to reflect recent new orders and continue to expect strong earnings
growth from here on.

Read more

We estimate Q3 order intake at EUR 63m

Raute’s environment showed considerable signs of improvement already in Q2. The
company booked one large EUR 30m Lithuanian order back then and the flow
continued in Q3 with two meaningful Russian orders worth a total of EUR 34m. It
will be of interest to hear Raute’s comments on current Russian and Eastern
European activity levels, not to mention the pace of potential recovery in other
geographies, but the fact is Raute now has enough workload for the foreseeable
future. The three mentioned orders will all be delivered next year and thus it’s
very clear both top line and profitability will continue to improve.

We make only minor order intake updates to our estimates

Raute began Q3 with an already very high EUR 129m order book and we estimate the
figure to have increased further to EUR 156m by the end of the quarter. We
understand this would be a new record high (Raute had a EUR 142m order book at
the end of Q1’18) and thus the company is in an excellent position to achieve
steep earnings growth during the next few years. We expect Raute to post EUR
1.4m in Q3 EBIT; this level is still far below potential since in our view Raute
should be able to reach at least EUR 2-3m EBIT per good quarter. The company was
able to post some EUR 3-4m quarterly levels during its previous boom cycle
(Q3’18 was a record with EUR 5.6m in EBIT). We expect profitability will
continue to improve from here on and estimate FY ’22 EBIT at EUR 10.5m.

Valuation is modest at a point where figures are improving

In our view Raute is now valued at undemanding multiples after a period of few
years during which both new orders and profitability came under pressure. There
are still uncertainties e.g. to what extent the pandemic might bother business,
but we reckon our steep earnings estimates for the coming years are reasonable
considering Raute was able to achieve EUR 11-15m EBIT in FY ’17-18. On this
basis next year’s multiples can be described on the low side, at around 7x
EV/EBITDA and 9x EV/EBIT, and even more attractive beyond that point. We retain
our EUR 26.5 TP and BUY rating.

Open report


SCANFIL - FURTHER ACCELERATION IN H2 GROWTH

14.10.2021 - 09.35 | Company update

Scanfil made a minor guidance update and by implication organic growth rate will
reach well into the double digits this year. We upgrade our FY ’21 growth
estimate by 4% and expect the positive momentum to spill over to next year as
well. We retain our EUR 9 TP; our new rating is BUY (HOLD).

Read more

FY ’21 revenue guidance midpoint increases by 5%

Scanfil issued a small guidance update. The new range is EUR 670-710m in FY ’21
revenue and EUR 41-44m in adj. EBIT, while the previous guidance was
respectively EUR 630-680m and EUR 41-46m. Most important recent trends, namely
strong customer demand and climbing component prices, have persisted. Scanfil
continues to flag the supply chain risk related to semiconductor availability
and the guidance update is not in our view that big news. Our previous estimates
for this year were EUR 658m in revenue and EUR 43m in adj. EBIT. Our updated
revenue estimate stands at EUR 681m; we make no changes to our absolute FY ‘21
adj. EBIT estimates.

Strong growth supports absolute profitability estimates

Scanfil H1’21 growth amounted to 12% y/y; we previously estimated H2’21 y/y
growth at above 8% and now expect more than 16%. We reckon the positive surprise
extends beyond this year and we have updated our FY ’22 growth estimate to 7.0%
(prev. 5.8%). The improved growth outlook supports our absolute profitability
estimates for the coming years to the tune of EUR 1-2m. The updated outlook also
means the EUR 700m organic revenue target for FY ’23 is now pretty much
irrelevant as the company might well break through that threshold already this
year. We expect Scanfil to communicate a new long-term target at some near
future date, however we don’t expect the company to make any revisions to its
long-term 7% EBIT margin target.

In our view valuation has now turned more attractive

Scanfil’s share price has slipped a bit since the previous update while growth
outlook has improved an additional notch. On our updated estimates for FY ’21-22
Scanfil is now valued 8.0-8.6x EV/EBITDA and 10.3-11.8x EV/EBIT. The multiples
remain slightly above those of a typical peer, but we continue to view the
premium warranted. We retain our EUR 9 TP; our rating is now BUY (HOLD).

Open report


VERKKOKAUPPA.COM - CMD NOTES

01.10.2021 - 09.30 | Company update

In its first-ever Capital Markets Day, Verkkokauppa.com presented details on its
new (revealed in Feb 2021) strategy’s implementation. The company’s target is to
achieve EUR 1bn revenue, EUR 50m operative profit (>5% EBIT margin), and to
lower its fixed costs to <10% of revenue by the end of 2025. We retain our TP of
EUR 10.80 and BUY-rating.

Read more

New sources for growth and improved margins

The management introduced factors to accelerate growth rate: a focus on the
assortment (core, evolving, and untapped categories), improved customer
experience, the capture of shift to online, and new business through
acquisitions or new private label products. Moreover, the company aims to speed
up delivery performance to maintain its market-leading position and offer new
financial, near-product, and standalone services to generate more profitable
growth.

By improving its gross margin and lowering fixed costs the company expects to
reach EUR 50m in operative profit by the end of 2025. According to the company,
the focus on increasing the amount of the evolving and untapped categories in
its assortment is set to contribute to higher gross margins. Fixed costs will be
lowered through the enhancement of logistics, the automation of supply chain and
product management, in addition to the improvement in marketing performance as
well as segmentation. These initiatives are also set to deliver better
operational efficiency and scalability.

No changes in the big picture

The CMD revealed further details on strategy execution, but the process is still
in the early stages and the event didn’t change the big picture. Outlook remains
bright and the management has confidence on strategy implementation. We keep our
estimates intact, expecting revenue in 21E-22E to reach EUR 599m and EUR 644m
respectively, and an adj. EBIT margin of 4.1% and 4.3% respectively. With our
estimates intact we retain our TP of EUR 10.80 and BUY-rating.

Open report


MARIMEKKO - EXPECTED GUIDANCE IMPROVEMENT

23.09.2021 - 13.45 | Earnings Flash

Marimekko specified its outlook for FY 2021, now expecting adj. EBIT margin to
be above that of the comparison period (2020: 16.3%). Revenue guidance remains
intact and is expected to grow from the previous year (2020: EUR 123.6m). Our
estimates were already in line with the new guidance; we make no changes to our
estimates or recommendation.

Read more

 * Marimekko specified its guidance today, now expecting the comparable
   operating profit margin to be higher than in the previous year (2020: 16.3%).
   The company previously expected the comparable operating profit margin to be
   on par with or above the comparison period. Marimekko expects revenue to
   exceed the comparison period (2020: EUR 123.6m). The uncertainties related to
   the pandemic situation concerning the rest of the year have been reduced from
   previous expectations, thus contributing to the guidance improvement.
 * Based on the guidance revisions we see no need for changes to our estimates.
   Our estimates already reflected growth and margin improvement, expecting the
   company to grow by 16% and reach an adjusted EBIT margin of 17.1% in FY 2021,
   and as such remain in line with the company’s new outlook.
 * As our estimates remain intact and our expectations for the H2 outlook
   already were quite positive we retain our target price of EUR 84 and
   BUY-rating. Valuation remains at a higher level compared with both peers and
   the company’s own historic multiples, which is justifiable by the good
   outlook and higher profitability levels.

 

Open report


VAISALA - AMBITIOUS PROFITABLE GROWTH

23.09.2021 - 09.15 | Company update

In its Capital Markets Day, Vaisala presented its revised strategy and financial
targets for 2021-2024. Revenue growth and EBIT-margin targets were raised to 7%
(5%) and 15% (12%) respectively.

Read more

Continuity by increasing growth ambition
According to the company’s management Vaisala’s strategy has so far been
successful and thus the renewed strategy saw no significant changes. What is new
in the strategy, is the increased ambition to grow and scale the businesses. The
company will continue investing in R&D, maintain a leading position in flagship
markets, grow in growth markets and generate new business in emerging markets.
The company’s management noted some factors to create synergies between BUs and
scale the business such as: units using common software and hardware modules and
platforms in their products, continuously developing the company’s production
system, and improvement of processes, tools, and competences.

Targets are set relatively high
During 2021-2024, Vaisala aims for an average annual revenue growth rate of 7%
(prev. 5%). The profitability target is to achieve a 15% EBIT-margin (prev.12%)
during the strategy period. During 2015-2020 Vaisala has achieved an annual
growth rate of ~3% and achieved an EBIT-margin of ~10% on average. The new
target is set relatively high, which reflects a higher ambition level. The
company’s management highlighted that increases in revenue will scale and
improve the EBIT-margin. According to the company’s management, the target
growth rate doesn’t include inorganic growth, and thus our focus is on organic
performance of IM and W&E’s capabilities to generate new businesses such as
renewable energy and air quality. In fact, IM has grown relatively well in past
few years and there is potential in W&E’s new emerging markets and applications,
such as renewed energy and Data/Software as a service (DaaS/SaaS). We see the
targets to be achievable should the company continue to perform well in its
flagship markets and growing and generating new growth/emerging markets.

HOLD with a TP EUR 38.0 (36.0)
We increased our estimates for FY 2022 and 23 and expect the company to grow
7.7% and 6.8% respectively. We expect the EBIT-margin to gradually improve
towards the long-term target level and estimate a 13.9% EBIT-margin in FY 2023
driven by scalability and revenue growth in both business units. Vaisala’s
valuation is quite stretched compared to peers. We still accept a premium to
Vaisala’s valuation due to the company’s technology leadership, good market
position, and increased growth and profitability outlooks. We retain our HOLD
recommendation and increase our target price to EUR 38.0 (36.0).

Open report


EXEL COMPOSITES - TEMPORARY PROFITABILITY CHALLENGES

17.09.2021 - 09.45 | Company update

Exel’s margins take a hit this year, but we see Exel’s favorable positioning
will remain intact and next year’s results should more than make up for the
interim dip.

Read more

The negative factors have been discussed earlier

Exel issued a negative profit warning yesterday. The company’s earlier outlook
guided revenue as well as adj. EBIT to increase, whereas the updated guidance
says revenue is to increase significantly while adj. EBIT is to decrease. We
don’t view the revenue update a major surprise but the FY ‘21 profitability
downgrade is negative news. According to Exel raw material availability has
weakened, and both material as well as logistics costs have increased. Exel also
says certain high volume carbon fiber Wind power customer applications have
generated low margins during their ramp-up phase. These negative factors were
discussed already over the spring and summer, but we expected margin improvement
in H2 after some softness seen in Q2.

We expect profitability back to high levels in FY ‘22

We already expected strong top line growth for this year and thus we revise our
estimate only a bit, from EUR 124.9m to EUR 125.8m. Our previous adj. EBIT
estimate for FY ’21 was EUR 10.8m, which we now revise down to EUR 8.9m. We
estimate 17% y/y revenue growth for Q3 (Exel grew 23% y/y in Q2). We now expect
EUR 1.9m in Q3 adj. EBIT (prev. EUR 2.7m), a bit below the EUR 2.0m comparison
figure. We therefore estimate Q3 EBIT margin to have softened to 6.3%. We now
expect 6.8% margin for Q4, in other words EUR 2.1m EBIT (prev. EUR 3.2m). In our
view Exel’s composites pricing will adjust to higher raw materials prices going
forward and hence the company should be able to make up for the interim
profitability drop next year when the raw materials and logistics markets have
normalized.

We still consider valuation not very demanding

Our FY ’22 revenue estimate is EUR 139.0m (prev. EUR 137.4m), while we revise
our EBIT estimate down to EUR 12.4m (prev. EUR 13.5m). The 8.9% EBIT margin
estimate is in line with the figure seen last year while our corresponding top
line estimate is 28% above the EUR 108.6m in FY ’20 revenue. Exel is valued 9x
EV/EBITDA and 15x EV/EBIT on our FY ’21 estimates. These levels are not that low
but turn attractive at ca. 7x and 10x on our FY ‘22 estimates. Our new TP is EUR
10.0 (11.5); retain BUY rating.

Open report


SCANFIL - CMD NOTES

15.09.2021 - 09.30 | Company update

Scanfil hosted its first-ever CMD yesterday, during which the company elaborated
on customer service and internal processes. Long-term financial targets were
left unchanged.

Read more

The focus was on Scanfil’s positioning and latest trends

The CMD added color on Scanfil’s comprehensive manufacturing service model and
value chain positioning. Scanfil’s service has over the years evolved to cover
the entire life cycle for many high-mix low-volume industrial electronics
products. Scanfil’s own processes now appear well harmonized across the factory
network. Scanfil can take care of the final product’s delivery to end-use
location, as highlighted in the case of TOMRA’s reverse vending machines and
grocery stores. Established OEM customers amount to 85% of accounts (95% of
revenue) while start-ups make up the rest. Each factory has its own P&L and
Scanfil monitors their strategic position as well as financial performance. The
divested plant in Hangzhou was performing well in financial terms but no more
seemed a great fit strategy-wise, whereas in the Hamburg closure case the
reverse was true. According to Scanfil the Connectivity segment should have the
highest relative growth potential, not a big surprise considering it is still by
far the smallest of the five. Semiconductor sourcing challenges seem set to last
at least until 2022 and affect accounts across all the segments. Scanfil doesn’t
see any internal bottlenecks an issue; business has mostly managed to stay on
course thanks to extended planning and demand forecasts.

Organic growth potential is strong for the coming years

Scanfil recently announced the EUR 6m planned investment in Suzhou to double the
current plant’s production capacity. We consider this an efficient way to
address organic growth opportunities driven by Chinese demand. Scanfil has also
added new staff in China and the US to help capitalize on local sales potential.
We continue to expect ca. 7% organic CAGR going forward, a strong figure in the
EMS context.

The overall valuation context has not changed

Scanfil left its long-term financial targets intact for now and we make no
changes to our estimates. Valuation hasn’t changed much since the last update;
Scanfil trades around 8.5-9.0x EV/EBITDA and 11-12x EV/EBIT on our FY ’21-22
estimates. We retain our EUR 9.0 TP and HOLD rating.

Open report


FELLOW FINANCE - RETURN TO GROWTH WITHIN REACH

30.08.2021 - 09.35 | Company update

Fellow Finance’s H1 revenue fell short of our expectations as a result of the
business financing driven growth. We expect a return to growth in H2 but have
lowered our 2022-2023 growth expectations by some ~10%. We adjust our TP to EUR
3.8 (4.0) and retain our BUY-rating.

Read more

Loan mix driven revenue decline in H1
Fellow Finance reported somewhat twofold H1 results. With the loan mix having
shifted more towards business financing and the relative fee income to loan
volume lower than anticipated revenue was below our estimates, declining 5.3%
y/y to EUR 5.5m (Evli EUR 6.2m), despite the 31% y/y growth in intermediated
loan volume. EBIT of EUR 0.5m was still in line with our estimate (Evli EUR
0.5m) as a result of reduced costs from lower broker fees and credit losses from
Lainaamo as well as a downsizing of Fellow Finance’s own balance sheet stock.
Costs did see some additional burden from growth investments, with new and
up-coming product launches and slight growth in personnel.

Set to return to growth but pace still somewhat lackluster
We have slightly lowered our 2021 estimates, now expecting revenue of EUR 11.7m
(prev. 13.1m) and EBIT of EUR 1.0m (EUR 1.4m) and lowered our 2022-2023 revenue
estimates by ~10%. We expect double-digit growth in H2 but for costs increases
due to growth investments and the announced combination agreement to keep
bottom-line figures at similar levels as in H1. We expect intermediated loan
volumes to rebound to 2019 levels but a lower revenue level with the growth in
business financing. The easing of temporary regulations domestically and abroad
provides support for continued growth in fee income in the near-term, while
interest income should see declines with the downsizing of the balance sheet
lending.

BUY-rating with a target price of EUR 3.8 (4.0)
In light of our slightly lowered estimates, mainly on the growth side, we adjust
our target price to EUR 3.8 (4.0). With the new growth initiatives and loan
volume rebounds Fellow Finance is set for a return to growth. We retain our
BUY-rating.

Open report


FELLOW FINANCE - EARNINGS FLASH - REVENUE GROWTH NOT THERE YET

27.08.2021 - 09.15 | Earnings Flash

Fellow Finance’s H1/21 results fell short from our estimates on the growth side,
with revenue of EUR 5.5m (Evli EUR 6.2m), driven by the loan mix due to growth
in lower margin business financing. EBIT amounted to EUR 0.5m (Evli EUR 0.5m).
The guidance for 2021 remains intact, expecting growth in 2021 but for the
result to remain slightly unprofitable due to growth investments.

Read more

 * Revenue in H1 amounted to EUR 5.5m (EUR 5.8m in H1/20), below our estimates
   (Evli EUR 6.2m). Revenue declined 5.3% y/y in H1. The 31% growth in loan
   volumes as expected did not translate into similar revenue growth due to the
   loan mix but the impact was larger than we had expected. Compared with H1/20
   commission fees declined by 8% and interest yields declined by 2%.
 * Fellow Finance facilitated loans during H1 for a total of EUR 91m (EUR 69.1m
   in H1/20), growing 31%. Loan volumes rebounded well from the weak comparison
   period levels. Growth was strong in business financing, but growth was also
   seen in Finnish consumer financing. International operations are still seeing
   challenges, with focus on relaunching the Polish and German operations and
   running down operations in Sweden and the Czech Republic, in line with Fellow
   Finance’s strategy.
 * The EBIT in H1 amounted to EUR 0.5m (EUR -0.1m in H1/20), in line with our
   estimates (Evli EUR 0.5m).
 * The EPS in H1 amounted to EUR -0.01 per share (EUR -0.1 in H1/20), in line
   with our estimate of EUR -0.01.
 * Guidance for 2021 (reiterated): Fellow Finance expects revenue growth
   compared to 2020 but for the result to remain slightly unprofitable due to
   investments in new products and growth.

Open report


NETUM - GROWTH IN GOOD SHAPE

25.08.2021 - 09.30 | Company update

Netum grew faster than expected in H1 but otherwise showed little other
surprises. Deal flow and growth in headcount provide good support for continued
clear double-digit growth. We retain our HOLD-rating and adjust our target price
to EUR 4.6 (4.4).

Read more

Growth surpassed expectations, no larger surprises
Netum reported its H1 results, which all in all were slightly better than
expected. Revenue grew organically at a good pace of 21.7% to EUR 10.4m (Evli
EUR 9.8m). The comparable EBITA grew to EUR 1.6m (Evli EUR 1.5m). The comp.
EBITA-margin declined slightly y/y to 15.4% (H1/20: 17.2%), which can be largely
explained by significant new recruitments. The company’s IPO had a negative
impact of EUR 0.9m on earnings figures and the comparable EPS was at EUR 0.12
(H1/20: 0.15).

Growth prospects looking good
Netum has been very successful in new recruitments and the personnel grew by
nearly 50% y/y to 171. As such the company has been able to manage profitability
well given the quite minor dip in relative profitability. The deal flow has been
good, including several significant long-term contracts, which with the success
in recruitments should support growth remaining well in the double-digits in the
near-term. The for Netum strategically important cyber security business was
made a separate business area at the start of the year and has according to the
company performed well, which in terms of relative growth has been a driver in
our growth estimates. We have made minor, relatively insignificant upwards
adjustments to our near- to mid-term estimates. Our 2021 estimates for net sales
and comp. EBITA of EUR 21.6m and EUR 3.4m remain quite near the top of the
company’s guidance of 2021 net sales and comp. EBITA of EUR 20-22m and EUR
3.1-3.5m respectively.

HOLD with a target price of EUR 4.6 (4.4)
In light of our minor estimates revisions and the good first half of 2021 we
adjust our target price to EUR 4.6 (4.4). Our target price values Netum at
approx. 20x 2021 adj. P/E (excl. IPO expenses and goodwill amortization). We
retain our HOLD-rating.

Open report


NETUM - GOOD PROFITABLE GROWTH

24.08.2021 - 09.35 | Earnings Flash

Netum’s H1 was slightly above our expectations. Net sales grew 21.7% organically
to EUR 10.4m (Evli EUR 9.8m) while the comparable EBITA amounted to EUR 1.6m
(Evli EUR 1.5m). Netum reiterated its 2021 guidance, expecting net sales and
comparable EBITA in 2021 to amount to EUR 20-22m and EUR 3.1-3.5m respectively.

Read more

 * Netum’s net sales in H1 amounted to EUR 10.4m (EUR 8.6m in H1/20), slightly
   above our estimates (Evli EUR 9.8m). Net sales in H1 grew 21.7% y/y, of which
   all was organic growth.
 * EBITDA in H1 was EUR 1.9m (EUR 1.5m in H1/20) and comparable EBITA EUR 1.6m
   (EUR 1.5m in H1/20) in line with our estimates of EUR 1.8m and 1.5m.
 * Operating profit in H1 amounted to EUR 1.3m (EUR 0.9m in H1/20), slightly
   above our estimates (Evli EUR 1.1m), at a margin of 12.0%.
 * Comparable earnings per share was EUR 0.12 (H1/20: 0.15)
 * Personnel at the end of the period amounted to 171 (116).
 * Netum completed its IPO in June and was listed on the Nasdaq First North
   Growth Market Finland marketplace. Listing expenses affecting comparability
   amounted to EUR 0.9m.
 * Guidance reiterated: Netum expects its net sales to grow to EUR 20-22m and
   its comparable EBITA to amount to EUR 3.1-3.5m in 2021.

Open report


ENDOMINES - ROAD TO PRODUCTION LONG AND BUMPY

20.08.2021 - 09.45 | Company update

Endomines’ Q2 was focused on production start-up and with delays at Friday
serious production figures will have to wait until 2022. We adjust our target
price to SEK 2.8 (2.9) with our rating now HOLD (BUY).

Read more

Working on production start-up
Endomines reported its Q2 results. With Friday still under care and maintenance
during Q2, Endomines as expected did not produce any new gold concentrate and no
revenue. Costs were higher than anticipated as the ramp-up of operations
progressed and with significant D&A, relating largely to the Friday mine, Q2
EBIT of SEK -76.9m was clearly below our expectation of SEK -20.0m. Endomines
continued its efforts to bring the Friday-mine back into production, having
invested one million USD on upgrading the Orogrande Processing facility and
enhancing the production capacity of the mine. Endomines has also begun n
exploration surface drilling program for the Montana gold assets, a fundamental
part of Endomines’ long-term value creation potential.

Seeing Friday + Pampalo production of ~20k oz in 2023
Endomines updated its mid-term goals for the Friday and Pampalo assets,
expecting annual gold production of 7,800-9,000 oz and 10,000-11,500 oz
respectively, at full production. Full production for Friday is expected by Q4
2021/Q1 2022 and Q2/Q3 2022 for Pampalo. The new Friday estimate is slightly
softer than the previous 9,000 oz initial production target but future capacity
expansion could still be viable. We have now also included estimates for
Pampalo, expecting production to rise to some 20k oz in 2023 as both sites
should have reached target capacity by then. With further near-term delays in
the start-up of the mill at Friday (expected in late August) the 2021 production
estimate was lowered to 1,500 oz (prev. 3,000-4,000 oz), which given pre-Q2 news
was not completely surprising.

HOLD (BUY) with a target price of SEK 2.8 (2.9)
We have made some adjustments to our SOTP-model, based on which we adjust our
target price to SEK 2.8 (2.9). With the recent share price increases we lower
our rating to HOLD (BUY).

Open report


MARIMEKKO - ONLY GETTING WARMED UP

20.08.2021 - 09.35 | Company update

Marimekko’s Q2 figures came in above estimates. The company is still only laying
out the foundation for sustained international expansion, and we believe this
underpins earnings growth potential for years to come.

Read more

EBIT margin potential will not fully materialize this year

Finland’s 61% y/y growth drove Q2 top line to EUR 32.7m, up 40% and above the
EUR 29.3m/29.3m Evli/cons. estimates (last year’s store closures softened the
comparison period). Both Finnish Retail and Wholesale advanced a lot while
International, up 20% y/y, was mainly driven by Wholesale. Home wares continued
to sell well and in our opinion the offering’s breadth is one point that
testifies to Marimekko’s strengths. Q2 EBIT was EUR 5.5m vs the EUR 2.9m/4.0m
Evli/cons. estimates; we find the positive surprise relative to our estimates
stemmed from the EUR 2.4m gross profit beat. Digital and omnichannel customer
experience projects will add to costs in H2 and Marimekko’s guidance moderates
estimates for the rest of the year.

We see there is a long earnings runway ahead

Collaborations like the Adidas one show how the strategy works as the Marimekko
brand is enjoying a rejuvenation period. We understand the Adidas deal generated
ca. EUR 1m in revenue and profits in Q1; we expect license revenue will remain
below EUR 3m this year, but the brand benefits extend beyond direct financial
gains. Marimekko doesn’t have that much more growth potential in Finland but is
still very modest in the global fashion & apparel context; upside potential
remains considerable and from this perspective the long-term 10%+ CAGR target
doesn’t seem very challenging. Marimekko began to gather pace towards long-term
ambitions a few years before the pandemic and has already been able to post
above 15% EBIT margins. In our view the company should be able to sustain
long-term profitability at least a few percentage points above the stated target
level.

Valuation remains reasonable considering the potential

Marimekko’s earnings-based multiples, roughly in the 19-25x EV/EBIT range on our
FY ’21-23 estimates, have continued to climb and are now near those of luxury
goods peers. Multiples are also high relative to their own historical levels,
but we view this justified since the company’s profile now stands on a whole new
level. Our new TP is EUR 84 (63); we retain our BUY rating.

Open report


ENDOMINES - PRODUCTION DELAYED BUT EN ROUTE

19.08.2021 - 11.00 | Earnings Flash

Due to some delays and changes the production guidance for 2021 was lowered to
around 1,500 oz (prev. 3,000-4,000 oz). Production is set to start again in Q3
after a 12-month halt.

Read more

 * Revenue in Q1 amounted to SEK 0.0*m, with our estimates at SEK 0.0m. The
   Friday mine was put into care and maintenance during Q3/20 and no significant
   new gold concentrate production took place during Q2.
 * EBITDA in Q2 was at SEK -25.9m*, below our estimate of SEK -16.0m, with costs
   in the second quarter larger than estimated.
 * EBIT amounted to SEK -76.9m* (Evli SEK -20.0m). Depreciations and write-downs
   of SEK 51.2m were clearly higher than expected.
   *Figures derived from Q1 and H1 figures
 * During Q3 2021 gold production will restart at the Orogrande Processing
   facility. Restaffing at both mine and the mill has taken slightly longer than
   Endomines expected due to market conditions caused by COVID-19, which along
   with delays in delivery of some vital mill equipment and components has
   caused a slight delay to the mill start-up from July to late August.
 * Liquid assets amounted to SEK 28.0m at the end of Q2.
 * The gold production guidance for the remainder of the year is now expected to
   be approx. 1,500 oz (prev. 3,000-4,000 oz).
 * Friday: When in full production Endomines expects the annual gold production
   from the Friday mine to reach 7,800-9,000 oz. Full production estimated by Q4
   2021/Q1 2022.
 * Pampalo: When in full production Endomines expects the annual gold production
   from the Pampalo mine to reach 10,000-11,500 oz. Full production estimated by
   Q2/Q3 2022.

Open report


CIBUS NORDIC - A PREMIUM FOR THE PREMIER

19.08.2021 - 09.15 | Company update

Cibus’ strategy proceeds according to plan and further Nordic expansion seems
inevitable. We find Cibus’ premium justified, while gains beyond the current
point seem unlikely without additional property market revaluations. Our TP is
now SEK 205 (195); our rating is HOLD (SELL).

Read more

Portfolio performance was again very close to estimates

Cibus’ portfolio continued to perform as expected and there were very little
changes to key metrics. Q2 net rental income amounted to EUR 18.5m, the same as
our and consensus’ estimates. Administration expenses were EUR 1.8m, as we
estimated, and included EUR 0.4m in one-offs (for the most part related to the
Nasdaq Stockholm transition). Net financial costs were EUR 5.9m, a bit higher
than our EUR 5.4m estimate.

We view Cibus the premier Nordic grocery property owner

The Nasdaq Stockholm switch has, among other developments, rendered Cibus’
shares more liquid and attractive for acquisitions. We consider Cibus the
leading owner for Nordic daily-goods properties and thus the company is in a
great position to gain further property mass within selected markets. We would
expect Cibus to expand to either Norway or Denmark (or both) next year at the
latest. This would be straightforward in the sense that the Nordic markets are
all quite similar. Meanwhile acquisitions within Finland and Sweden should
continue and Cibus has already announced more than EUR 130m in add-ons this
year. Cibus was able to purchase these at a 6% yield. Cibus sees the price level
remains stable for now and expects to make many more small deals in addition to
possible larger portfolio acquisitions, for which it can tap equity and debt.

We find valuation full barring further property revaluations

In our opinion a premium to book is justified, but we consider Cibus’ 1.25x
EV/GAV already significant, and at least any additional big gains would seem
hard from these levels. We view Cibus’ shares pretty much fully valued, but we
note the Nordic property sector’s revaluation could continue to drive further
gains also for Cibus’ shares. Cibus already has a competitive organization for
managing the leading Nordic grocery property portfolio, however we find Cibus’
valuation has in the past followed other Nordic property portfolios’ yields very
closely. Our TP is now SEK 205 (195) and our new rating is HOLD (SELL).

Open report


MARIMEKKO - GREAT FIGURES

19.08.2021 - 08.30 | Earnings Flash

Marimekko’s Q2 results came in above our and consensus’ estimates. Top line was
driven by 61% growth in Finland and gross margin was also some 120bps above our
estimate. Marimekko thus reached high absolute and relative profitability. The
company however left its guidance intact, which moderates H2 estimates.

Read more

 * Q2 revenue grew by 40% y/y to EUR 32.7m, compared to the EUR 29.3m/29.3m
   Evli/consensus estimates. Finland came in at EUR 18.4m vs the EUR 15.1m/14.9m
   Evli/consensus estimates, helped by a favorable trend in retail and wholesale
   revenue. Total Retail revenue was EUR 15.1m vs our EUR 13.9m estimate while
   Wholesale amounted to EUR 17.1m vs our EUR 15.2m estimate.
 * Gross profit amounted to EUR 20.4m vs our EUR 17.9m estimate. Gross margin
   was 62.3% vs our 61.1% estimate.
 * Adjusted EBITDA was EUR 8.5m, compared to our EUR 6.2m estimate. Adjusted
   EBIT was EUR 5.5m vs the EUR 2.9m/4.0m Evli/consensus estimates. Strong
   growth and gross margin helped profitability, while an increase in fixed
   costs had a weakening impact on earnings.
 * Marimekko left its guidance unchanged and expects 2021 revenue to be higher
   than previous year and adjusted EBIT margin to be approximately on a par with
   or higher than in the previous year. In our opinion the guidance now appears
   a bit on the cautious side, especially considering Marimekko has indicated
   the majority of its revenue and earnings this year will be generated in H2.

Open report


CIBUS NORDIC - CLOSE TO ESTIMATES

18.08.2021 - 09.30 | Earnings Flash

Cibus’ property portfolio performance once again matched estimates as net rental
income amounted to EUR 18.5m in Q2. Administration costs were as we expected,
while net financial costs were slightly higher than expected.

Read more

 * Cibus’ Q2 rental income was EUR 19.8m vs the EUR 19.6m/19.7m Evli/consensus
   estimates.
 * Net rental income was EUR 18.5m, compared to the EUR 18.5m/18.5m
   Evli/consensus estimates.
 * Operating income came in at EUR 16.7m, the same as our EUR 16.7m estimate, as
   administration costs were EUR 1.8m.
 * Net operating income amounted to EUR 10.8m vs the EUR 11.3m/11.5m
   Evli/consensus estimates. The EUR 5.9m net financial costs were a bit higher
   than estimated.
 * Annual net rental income capacity is now EUR 76.0m.
 * GAV amounted to EUR 1,331m, meaning EPRA NAV was EUR 12.3 (12.2) per share.
 * Net LTV ratio was 60.1% (61.6%).
 * Occupancy rate stood at 94.8% (94.7%).
 * WAULT remained 5.2 years at the end of Q2.

Open report


CIBUS NORDIC - EXPENSIVE LIQUIDITY

17.08.2021 - 09.30 | Preview

Cibus reports Q2 results on Wed, Aug 18. We make estimate revisions to include
the already closed deals. We view Cibus as the leading ownership structure for
Nordic grocery properties, but we consider valuation too steep. Our TP is now
SEK 195 (175) and our rating is SELL (HOLD).

Read more

Very busy deal-making in Q2

Cibus has announced, after the release of Q1 report, a total of EUR 124m in
acquisitions. The total comprises 88 properties and so the average lot is small
even by Cibus’ standards. Only some EUR 32m of these were closed so that they
had time to generate rental income during Q2 (we estimate the contribution to
have been EUR 0.2m), and an additional EUR 20m will add to Q3 numbers. We assume
Cibus has been able to purchase all the EUR 124m at a 6% yield and so estimate
together they will add some EUR 7.4m to next year’s net rental income. We expect
Cibus’ Q2 admin costs to have been elevated, at EUR 1.8m, due to the busy
deal-making. We thus see Q2 operating income at EUR 16.7m.

Cibus is a great home for small grocery store properties

The latest announced large acquisition, valued at EUR 72m (or 5% of Cibus’ GAV),
is set to close in Q4 and involves an equity issue of 2m shares to the seller,
AB Sagax; we are yet to include this portfolio in our estimates (Cibus has
already issued a EUR 30m hybrid bond). The AB Sagax deal comprises 72 small
grocery stores across Finland. The average asset is less than 600sqm in size and
all but one feature Kesko as the tenant. Cibus’ typical Kesko property has been
a 3,000sqm supermarket store, but Cibus is also a natural owner for such smaller
properties.

A high price to pay for public market liquidity

Cibus’ valuation has been driven up, in our opinion, to a large extent in the
wake of other Nordic property companies. Cibus’ 4% yield is still competitive
relative to the 3.25% level seen around the wider property sector, but in our
view Cibus’ current 1.3x EV/GAV and 1.9x P/NAV multiples limit further upside
potential. The Nordic grocery property market’s potential revaluation could
begin to lift book value, however we view Cibus’ 4% yield simply too tight and
ahead of the underlying market as long as the company is still able to acquire
additional assets at a 6% yield. Our SEK 195 (175) TP values Cibus at some 1.2x
EV/GAV and 1.6x P/NAV. Our rating is now SELL (HOLD).

Open report


GOFORE - FARING WELL DESPITE MINOR HEADWIND

16.08.2021 - 09.45 | Company update

Gofore continued to grow profitably and despite some minor bumps on the road
EBITA was quite as expected at EUR 6.8m (Evli EUR 7.0m). We continue to expect
above 30% in 2021. We retain our HOLD-rating and target price of EUR 21.

Read more

Continued profitable growth in H1
Gofore reported its H1 results, continuing on a track of profitable growth.
Revenue grew 38 % to EUR 51.7m driven mainly by inorganic growth, as organic
growth fell short of the around 10% long-term target. Gofore’s EBITA and adj.
EBITA in H1 amounted to EUR 6.8m and EUR 6.9m respectively, rather in line with
our estimates (Evli EUR 7.0m/7.2m). Billing rates were slightly weaker mid-H1
due to the transition between agreement periods with one of Gofore’s largest
customers but improved towards the end of the first half of the year. Gofore
also experienced an increase in personnel turnover during H1. Profitability in
H1 was still at a good level although below the 15% EBITA margin target.

Some uncertainty from increased personnel turnover
We have made smaller downward revisions to our 2021 profitability estimates
while our revenue estimate remains quite intact at over 30% y/y growth driven
mainly by inorganic growth. Some uncertainty is present from the sector-wide
increase in personnel turnover, as the wariness of switching jobs during the
pandemic has started to decrease. Gofore is in our view still well positioned in
the labour-market as an employer. Although an increase in turnover may be
unavoidable, Gofore should still fare well in new recruitments in the rather
challenging environment. Short-term this may still cause some pressure on growth
and margins.

HOLD-rating with a target price of EUR 21
In our view the H1 report didn’t really change much in Gofore’s investment case
and the noted increase in employee turnover is something we currently don’t view
as a major risk but will keep an eye on. We reiterate our target price of EUR 21
and retain our HOLD-rating.

Open report


SUOMINEN - A VOLUME SETBACK

16.08.2021 - 09.00 | Company update

Suominen’s earnings will now correct to a lower level from their recent peak. We
believe, despite the setback and increased uncertainty, that Suominen’s value
chain positioning is still good, and decent margins will remain.

Read more

US delivery volumes will take a big hit in H2’21

Q2 revenue fell 7% y/y to EUR 114m and missed the estimates, which were at EUR
120m. In our view the softness was due to Americas; the US supply chain has
lately been saturated with wipes as the local retailers sourced as much product
as possible, including unbranded wipes which then didn’t move forward from the
shelves and thus blocked volumes for many brand wipes. Suominen’s US brand name
customers were pushing for max delivery volumes as late as May and June, and by
the end of Q2 stocks began to pile up. Suominen says the logjam hasn’t for the
most part spread beyond the US; LatAm has continued to develop as before while
there has been some jamming in Europe. In our view the 14.7% GM was an
encouraging sign, considering the metric also benefits from high volumes, as
revenue was soft compared to estimates. Suominen thus reached EUR 15.3m in Q2
EBITDA, compared to the EUR 14.8m/13.5m Evli/cons. estimates.

We believe GM will remain near 13% going forward

Suominen’s nonwovens pricing is now to a large extent locked into mechanisms and
so we believe gross margin will remain at a decent level going forward, at
around 13% or so. We estimate Q3 revenue to decline by 17% y/y as we see
Americas down by 24%. We expect gross margin to decline to 12%, which translates
to EUR 9.5m in EBITDA. We expect some stabilization already in Q4, but we revise
our FY ’22 revenue estimate down to EUR 431m (prev. EUR 473m) and that for
EBITDA to EUR 48.5m (prev. EUR 56.0m). It is now clear earnings have peaked and
Suominen may not reach EUR 15m quarterly EBITDA for a while. We however believe
Suominen can achieve above EUR 10m quarterly EBITDA again soon enough.

The sell-off already neutralized earnings multiples

Suominen’s earnings multiples were low already before the profit warning, at
about 6x EV/EBITDA and 9x EV/EBIT. We find the net effect of the sell-off and
our earnings downgrade has been a marginal increase in multiples. We consider
these levels very reasonable. Our TP is now EUR 6 (6.8). We retain our BUY
rating.

Open report


ENERSENSE - ACCORDING TO PLAN

16.08.2021 - 09.00 | Company update

Enersense’s Q2 was much as expected. Margins are already decent, and we see
plenty of scope for long-term gains.

Read more

Q2 figures did not reveal many surprises

Enersense’s Q2 revenue amounted to EUR 61.6m, compared to our EUR 57.5m
estimate. We find the top line beat was for the most part due to International
Operations (EUR 14.8m vs our EUR 11.5m estimate) as the other three segments
were all close to our estimates. The positive surprise was in our view due to
strong development in the Baltics, but France also contributed. Connectivity
faced challenging winter conditions in Q2, but the segment’s revenue was
nonetheless a bit above our estimate. There are no meaningful comparison figures
due to the Empower acquisition, however Q2 profitability was as we expected.
Adj. EBITDA came in at EUR 4.8m vs our EUR 4.7m estimate, while adj. EBIT was
EUR 2.8m vs our EUR 2.6m estimate.

We make limited updates to our estimates

Empower integration proceeds according to plan and add-on acquisitions are
possible already near-term. Enersense reiterated its current guidance and sees
EUR 215-245m in revenue while adj. EBITDA should be in the EUR 17-20m range
(adj. EBIT EUR 8-11m). We have made only minor revisions to our estimates and
expect Enersense to land near the upper end of the guidance range. Enersense has
a long-term EBITDA margin target of 10% (by 2025); we see the company is headed
close to 8% already this year and 8.5% doesn’t seem that challenging to achieve
in the year following. We continue to expect 4.6% organic growth in FY ’22,
meaning Enersense should reach at least EUR 21m in EBITDA and EUR 12m in EBIT
then.

Organic performance and low multiples underpin upside

Enersense is valued 5x EV/EBITDA and 9x EV/EBIT on our FY ’22 estimates. We find
the earnings multiples imply a sizeable discount relative to peers while
Enersense’s organic growth outlook and profitability are, in our view, in line
with the general sector estimates. Our EBITDA margin estimates are also on the
conservative side compared to Enersense’s 10% target and we expect only some
3.5% organic CAGR for the coming years, whereas Enersense’s own EUR 300m
long-term organic top line target implies a CAGR many percentage points above
our estimates. We retain our EUR 13 TP and BUY rating.

Open report


PIHLAJALINNA - CATCHING UP WITH THE LARGER RIVALS

16.08.2021 - 08.45 | Company update

Pihlajalinna’s Q2 served a small positive surprise relative to estimates. We are
confident operating margin and multiple expansion potential enable solid
long-term upside.

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Small earnings beat as profitability continued to improve

Pihlajalinna’s Q2 revenue grew 24% to EUR 142.5m, compared to the EUR
140.7m/139.4m Evli/cons. estimates. There were no major surprises in terms of
customer group revenues; we find the small revenue beat was due to the public
sector. Private customer revenue recovered 44% from last year’s dip, but
appointments remained 24% below 2019 levels, while within corporate customers
visits were already close to pre-pandemic levels. Higher costs continued to
limit outsourcing’s profitability y/y, but there was improvement q/q. Q2
operating margin excluding outsourcing improved by almost 700bps y/y. The
combination of higher volumes and COVID-19 services drove profitability, but
there’s still potential for further gains, depending on the type of service,
even on current volume levels. Pihlajalinna reached EUR 6.5m adj. EBIT vs the
EUR 5.6m/6.2m Evli/cons. estimates. The company retained its guidance.

We make only minor revisions to our estimates

Oral care is one practice area where profitability can be improved even without
any increase in capacity utilization rates. COVID-19 services will remain high
in Q3, while there’s some associated cost uncertainty. Overall clinical
seasonality patterns should remain intact, but the current virus situation
probably limits standard services’ volume potential for now. We now estimate FY
’21 growth at about 13% and adj. EBIT at EUR 31.9m.

Significant long-term upside potential is on the horizon

The Pohjola acquisition adds capacity and improves Pihlajalinna’s ability to
compete with the two larger Finnish rivals. The focus will initially be on
private customers, but public sector growth is also likely long-term. The target
had by itself too limited scale to be profitable. Pihlajalinna will return with
more details on the deal, but in our view the target seems a good fit and
synergies should materialize already next year. Pihlajalinna remains valued 8x
EV/EBITDA and 16x EV/EBIT on our FY ’21 estimates. These are below peers’, and
Pihlajalinna also has more margin expansion potential considering its relatively
modest profitability. Our new TP is EUR 13.5 (13.2); we retain our BUY rating.

Open report


ENERSENSE - PROFITABILITY AS EXPECTED

13.08.2021 - 12.30 | Earnings Flash

Enersense’s Q2 report didn’t offer many surprises. Enersense’s operations and
strategy seem to proceed pretty much according to plan.

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 * Enersense Q2 revenue was EUR 61.6m vs our EUR 57.5m estimate. Smart Industry
   top line was EUR 23.5m, compared to our EUR 23.5m estimate. Power came in at
   EUR 12.0m (vs our EUR 11.5m estimate), while Connectivity was EUR 11.4m (vs
   our EUR 11.0m estimate).
 * Adjusted EBITDA was EUR 4.8m vs our EUR 4.7m estimate. Meanwhile adjusted
   EBIT amounted to EUR 2.8m vs our EUR 2.6m estimate. Smart Industry EBITDA
   amounted to EUR 5.1m. Power and Connectivity respectively reached EUR 0.9m
   and EUR 0.5m in EBITDA. Connectivity saw relatively challenging weather
   conditions in Q2.
 * Order backlog stood at EUR 301m at the end of Q2 (EUR 292m at Q4’20).
 * Enersense retains its guidance and expects to see 2021 revenue in the EUR
   215-245m range, adjusted EBITDA at EUR 17-20m and adjusted EBIT at EUR 8-11m.

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SUOMINEN - INVENTORY-INDUCED NEGATIVE REVISION

13.08.2021 - 10.00 | Earnings Flash

Suominen’s Q2 margins remained strong, but focus is now on the color Suominen
provides on demand slowdown and inventory build-up in North America. The issue
prompted the company to revise down its FY ’21 profitability outlook just ahead
of the report.

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 * Suominen Q2 revenue was EUR 113.6m vs the EUR 120.0m/120.0m Evli/consensus
   estimates. Top line decreased by 7.0% y/y. Americas was EUR 67.4m vs our EUR
   75.0m estimate, while Europe amounted to EUR 46.3m vs our EUR 45.0m estimate.
 * Gross profit amounted to EUR 16.7m, compared to our EUR 16.8m estimate. Gross
   margin was 14.7% vs our 14.0% estimate.
 * EBITDA was EUR 15.3m vs the EUR 14.8m/13.5m Evli/consensus estimates. EBIT
   came in at EUR 10.3m vs the EUR 9.8m/8.5m Evli/consensus estimates.
 * Suominen now expects its comparable FY ‘21 EBITDA will decrease due to the
   nonwovens demand slowdown seen in H2’21. Continued volatility in the raw
   material and transportation markets also plays a role. Suominen reached EUR
   60.9m in FY ’20 EBITDA, while our latest FY ’21 estimate was EUR 59.8m.
 * Suominen sees that especially North American customers have started to
   experience demand slowdown. This has had a negative impact on Suominen’s
   orders as there has also been some inventory pile-up throughout the supply
   chain. Suominen expects the imbalance to clear out in Q4 and sees favorable
   long-term demand drivers intact.
 * In our view the profit warning also exerts at least some downward pressure on
   our FY ’22 estimates (we had estimated EUR 56.0m in EBITDA).

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GOFORE - SOLID GROWTH AND GOOD PROFITABILITY

13.08.2021 - 09.40 | Earnings Flash

Gofore’s EBITA/adj. EBITA of EUR 6.8m/6.9m in H1 were rather in line with
expectations (Evli 7.0m/7.2m). Revenue grew 38.3% to EUR 51.7m in H1
(pre-announced). Revenue and adj. EBITA in 2021 are expected to grow compared
with 2020.

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 * Gofore’s H1/21 net sales amounted to EUR 51.7m (pre-announced), with sales
   growth of 38.3% compared to H1/20 figures. The growth was primarily
   attributable to increased volumes as a result of corporate acquisitions and
   organic growth, but the average hourly price of services sold also increased
   slightly. Private sector sales increased substantially, by almost 92 per
   cent, to EUR 18.4m. Gofore’s international business grew by 10 per cent y/y
   to EUR 4.5m.
 * EBITA and adj. EBITA in H1 amounted to EUR 6.8m and EUR 6.9m respectively,
   rather in line with our estimates (Evli EUR 7.0m/7.2m), at margins of
   13.1%/13.4%. EBIT amounted to EUR 5.7m (Evli EUR 6.3m), at a 11.0%
   EBIT-margin.
 * Guidance for 2021: Gofore estimates that its revenue and adj. EBITA in 2021
   will grow compared to 2020.
 * The number of employees at the end of the period was 803 (H1/20: 610).

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SOLTEQ - GOOD PERFORMANCE ACROSS THE BOARD

13.08.2021 - 09.15 | Company update

Solteq grew faster than expected in Q2, with Solteq Digital returning to clear
growth. The outlook is now looking even better with the pick-up in demand in
Solteq Digital and we expect good performance across the board. We raise our TP
to EUR 8.0 (7.2), BUY-rating intact.

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Rapid growth in Q2, Solteq Digital surprised positively
Solteq reported Q2 figures above our estimates. Revenue growth was clearly
faster than expected, with growth of 23% to EUR 18.5m (Evli EUR 17.1m). Solteq
Software as expected continued at a very rapid growth pace of 43%, while to our
surprise Solteq Digital moved to double-digit growth, aided by good demand in
retail, after having posted lower growth figures for the past year. The adj.
EBIT was quite in line with our estimates at EUR 2.5m (Evli EUR 2.3m). Our
overestimation of Solteq Software’s profitability was compensated by the over
15% EBIT-margin (target >8%) in Solteq Digital supported by the growth in the
quarter.

Poised for double digit growth and margins in 2021
We have slightly raised our 2021 estimates for revenue and EBIT to EUR 71.4m
(prev. 68.3m) and EUR 9.6m (prev. 9.2m). We expect Solteq Software to continue
to grow very rapidly supported by the backlog of Utilities project deliveries.
With the large projects sizes the recurring revenue should start to show more
strongly in 2022 and we estimate only minor EBITDA-margin improvement in 2021.
We expect the good demand in Solteq Digital to continue to show throughout the
year and for the growth also to be reflected positively in the segment’s
profitability. Positive signs were also seen in the commercialization of the
Solteq Robotics solutions through a few pilot projects, with the pandemic having
slowed down development in the near past.

BUY-rating with a target price of EUR 8.0 (7.2)
On our minor estimates revisions and overall good progress we raise our target
price to EUR 8.0 (7.2). Valuation of ~17x 2022 P/E is not particularly
challenging given the growth and profitability. We retain our BUY-rating.

Open report


PIHLAJALINNA - ABOVE ESTIMATES

13.08.2021 - 08.30 | Earnings Flash

Pihlajalinna’s revenue and profitability continued to improve and were slightly
above estimates. The company reiterates its existing guidance.

Read more

 * Pihlajalinna’s Q2 revenue grew by 24.3% y/y to EUR 142.5m, compared to the
   EUR 140.7m/139.4m Evli/consensus estimates. Public sector customers amounted
   to EUR 104.6m and grew by 17.5% y/y. Private customers grew by 44.1% y/y to
   EUR 21.7m. Meanwhile corporate customers grew by 30.7% y/y to EUR 34.7m.
 * COVID-19 related services contributed EUR 8.1m of revenue in Q2.
 * Adjusted EBITDA was EUR 15.2m vs the EUR 14.4m/14.8m Evli/consensus
   estimates. Adj. EBITDA margin was 10.7%.
 * Adjusted EBIT was EUR 6.5m vs the EUR 5.6m/6.2m Evli/consensus estimates.
   Adj. EBIT margin was 4.5%.
 * Pihlajalinna guides 2021 revenue to increase clearly and adjusted EBIT to
   improve clearly compared to last year (unchanged).

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ETTEPLAN - SIGHTS SET ON GROWTH

12.08.2021 - 09.30 | Company update

Etteplan’s Q2 results were quite in line with expectations. Growth is set to
return to double digits this year and Etteplan is taking steps to keep the
momentum going. Etteplan also raised its 2021 revenue guidance on the positive
H1 development to EUR 295-315m (285-305m).

Read more

Q2 quite in line with expectations
Etteplan reported its Q2 results, which overall were quite in line with
expectations. Revenue grew 19% y/y to EU 75.0m (EUR 73.7m/73.6m Evli/cons.).
EBIT amounted to EUR 6.7m (EUR 6.5m/7.3m Evli/cons.). Good operational
efficiency kept the group EBITA-margin above the target 10% level at 10.4% (Evli
10.2%). On our estimates the stronger performers of the quarter were the
Technical Documentation Solutions and Software and Embedded Solutions service
areas, which both surpassed expectations on growth and profitability. Customer
order intake has continued favourably and although the pandemic still causes
uncertainty, Etteplan raised its revenue guidance range to EUR 295-315m (prev.
EUR 285-305m), with the EUR 25-28m EBIT guidance range intact.

Preparing for continued growth
We have made only minor revisions to our estimates. For 2021 we have slightly
raised our expectations for the Technical Documentation Solutions and Software
and Embedded Solutions service areas in light of the good traction in Q2. We now
expect revenue of EUR 299.8m (prev. 294.9m) and EBIT of EUR 26.3m. The number of
employees has increased by over 200 since the end of 2020 to 3,491 and
recruitment is actively on-going, which together with other growth ambitions
will cause some cost inflation on H2 but also support organic growth going
forward given a continued healthier demand situation. Double-digit growth also
in 2022 is most certainly within grasp but will require continued M&A activity.

HOLD-rating with a target price of EUR 17.5
We have made no significant changes to our estimates and retain our HOLD-rating
and target price of EUR 17.5. Our TP values Etteplan at ~20x 2022e P/E.

Open report


ASPO - SOME MORE RESULTS TO BE ACCRUED

12.08.2021 - 09.25 | Company update

Aspo’s Q2 group-level EBIT was known before the report. We make minor upward
revisions to our estimates, and we see Aspo on a firm track towards full
profitability potential.

Read more

H1’21 results display a solid foundation to build on

Aspo’s Q2 revenue grew 24% y/y to EUR 142.9m vs the EUR 133.6m/134.5m Evli/cons.
estimates. ESL’s top line was up 40% y/y; the EUR 5.4m EBIT was a bit above our
estimate as utilization and rates continued to improve throughout the fleet.
That said, there should be more potential as efficiency obstacles like port
congestion, varying loading demand, virus measures and high dockings limited Q2
profitability. We expect ESL’s EBIT to decline by EUR 0.9m q/q in Q3 as dockings
will be roughly double of those seen in Q2. We believe ESL’s EBIT has now
reached a firm foundation since cargo volumes were still not abnormally high
(some 8% lower than in Q2’19 but up 19% y/y). Meanwhile the Baltic Dry Index has
reached multi-year highs and we believe the Supramax vessels’ freight rates are
now stabilizing. Telko’s revenue topped our estimate and the 7.7% EBIT margin
also marked another record. Strategy work at Leipurin continues but Q2 figures
remained soft compared to our estimates. We understand admin costs were a bit
elevated e.g. due to the CEO recruitment; Aspo’s long-time CEO Mr Aki Ojanen is
retiring and the successor, Mr Rolf Jansson, will begin his work next week.

The EUR 30-36m EBIT guidance moderates H2’21 estimates

We wouldn’t be very surprised to see Aspo top the current EBIT guidance range
set for this year. There’s still some uncertainty regarding Q4 results, but we
believe ESL’s contribution will then help Aspo reach another record quarterly
EBIT. We make minor revisions to our estimates; we remain at the upper end of
the FY ‘21 range while we now estimate FY ’22 EBIT at EUR 39.7m (prev. EUR
38.9m). Telko may find it hard to achieve further margin gains (in our view some
softness is to be expected), but growth could help sustain high absolute
profitability going forward.

Progression and cash flow generation back up valuation

Aspo is valued around 8x EV/EBITDA and 14x EV/EBIT on our FY ’21 estimates. We
don’t view these levels challenging considering the profitability potential that
is not yet quite fully realized. Our TP is now EUR 12.5 (11.5); we retain our
BUY rating.

Open report


SOLTEQ - GROWING FASTER THAN EXPECTED

12.08.2021 - 08.30 | Earnings Flash

Solteq’s Q2 was slightly above expectations, with revenue at EUR 18.5m (Evli EUR
17.1m) and adj. EBIT at EUR 2.5m (Evli EUR 2.3m). Guidance intact: group revenue
in 2021 is expected to grow clearly and the operating profit to improve clearly.

Read more

 * Net sales in Q2 were EUR 18.5m (EUR 15.1m in Q2/20), slightly above our
   estimates (Evli EUR 17.1m). Growth in Q2 amounted to 22.6% y/y, of which
   around four fifths was organic growth. 21.4% of sales came from outside of
   Finland.
 * The operating profit and adj. operating profit in Q1 amounted to EUR 2.4m and
   2.5m respectively (EUR 1.5m/1.5m in Q2/20), in line with our estimates (Evli
   EUR 2.3/2.3m).
 * Solteq Digital: revenue in Q2 amounted to EUR 11.9m (Q2/20: EUR 10.5m) vs.
   EUR Evli 10.5m. The adj. EBIT was EUR 1.9m (Q2/20: EUR 1.1m) vs. Evli EUR
   1.1m. The segment is expected to develop steadily during the rest of the
   year.
 * Solteq Software: Revenue in Q2 amounted to EUR 6.6m (Q2/20: EUR 4.6m) vs.
   Evli EUR 6.6m. The adj. EBIT was EUR 0.6m (Q2/20: EUR 0.4m) vs. Evli EUR
   1.2m. Growth was 44.6%. Recurring revenue 28.8% of the segment’s revenue. The
   Partiture Oy acquisition had a slight positive impact on growth. The business
   outlook for the segment is expected to remain positive
 * Guidance for 2021 intact: group revenue is expected to grow clearly and
   operating profit to improve clearly.

Open report


ETTEPLAN - FIGURES IN LINE, GUIDANCE SPECIFIED

11.08.2021 - 13.30 | Earnings Flash

Etteplan's net sales in Q2 amounted to EUR 75.0m, in line with our and consensus
estimates (EUR 73.7m/73.6m Evli/cons.). EBIT was also quite in line with our
estimates and slightly below consensus, at EUR 6.7m (EUR 6.5m/7.3m Evli/cons.).
Guidance specified: Etteplan expects revenue to amount to EUR 295-315m (prev.
EUR 285-305m) and operating profit (EBIT) to amount to EUR 25-28m.

Read more

 * Net sales in Q2 were EUR 75.0m (EUR 62.9m in Q2/20), in line with our
   estimates and consensus estimates (EUR 73.7m/73.6m Evli/Cons.). Growth in Q2
   amounted to 19% y/y, organic growth 12.4%.
 * EBIT in Q2 amounted to EUR 6.7m (EUR 5.4m in Q2/20), in line with our
   estimates and slightly below consensus estimates (EUR 6.5m/7.3m Evli/cons.).
 * Compared to our expectations, the Technical Documentation Solutions and
   Software and Embedded Solutions service areas exceeded expectations on growth
   and relative profitability.
 * EPS in Q2 amounted to EUR 0.20 (EUR 0.16 in Q2/20), in line with our
   estimates and consensus estimates (EUR 0.20/0.20 Evli/cons.).
 * Engineering Solutions net sales in Q2 were EUR 42.0m vs. EUR 42.5m Evli.
   EBITA in Q2 amounted to EUR 4.2m vs. EUR 4.3m Evli.
 * Software and Embedded Solutions net sales in Q2 were EUR 19.9m vs. EUR 18.6m
   Evli. EBITA in Q2 amounted to EUR 2.2m vs. EUR 2.0m Evli.
 * Technical Documentation Solutions net sales in Q2 were EUR 13.0m vs. EUR
   12.4m Evli. EBITA in Q2 amounted to EUR 1.6m vs. EUR 1.3m Evli.
 * Guidance specified: Etteplan expects revenue to amount to EUR 295-315m (prev.
   EUR 285-305m) and operating profit (EBIT) to amount to EUR 25-28m.

Open report


ASPO - A RECORD Q2 PROFITABILITY

11.08.2021 - 10.00 | Earnings Flash

Aspo released preliminary information regarding Q2 results already last week and
so the Q2 report was no news event in terms of group-level EBIT. Telko’s
profitability was higher than we expected.

Read more

 * Aspo’s Q2 revenue was EUR 142.9m vs the EUR 133.6m/134.5m Evli/consensus
   estimates. Q2 EBIT was EUR 9.6m.
 * ESL’s top line was EUR 46.0m, compared to our EUR 38.9m estimate, while EBIT
   amounted to EUR 5.4m vs our EUR 5.2m estimate. Market freight rates improved
   significantly y/y in all vessel categories, while there were strong
   fluctuations in loading demand. High dockings also limited profitability
   potential.
 * Telko recorded EUR 71.1m in revenue vs our EUR 67.3m estimate. EBIT was EUR
   5.5m, compared to our EUR 4.9m estimate. EBIT margin was 7.7% and prices
   remained high. The availability situation now seems to be normalizing, which
   would cause price decreases on the one hand and help Telko’s volumes up on
   the other.
 * Leipurin revenue was EUR 25.8m while we expected EUR 27.4m. EBIT stood at EUR
   0.3m, compared to our EUR 0.6m estimate.
 * Other operations cost EUR 1.6m vs our EUR 1.1m estimate.
 * Aspo guides EUR 30-36m in FY ’21 EBIT.

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PIHLAJALINNA - STRATEGY PROGRESS CONTINUES

10.08.2021 - 09.35 | Preview

Pihlajalinna reports Q2 results on Fri, Aug 13. Our FY ’21 estimates remain
intact, but we note the latest announced acquisition which is set to be closed
by the end of this year.

Read more

COVID-19 testing probably plays a big role also in Q3

Q1 top line grew 5% y/y, driven by public sector and corporate customers.
COVID-19 testing contributed a major share of the revenue increase within the
two groups. Meanwhile private customer revenue fell by 10% y/y, although
COVID-19 testing had a small positive contribution there as well. COVID-19
testing added a total of EUR 8.2m in revenue, while overall net revenue growth
was EUR 6.9m. We expect the tests to have played a similar important role in Q2
as the acute situation restrains other volumes. Finnish vaccination coverage was
negligible in Q1 but improved a lot in Q2; testing levels might otherwise begin
to fade in Q3 were it not for the fact that the virus situation has once again
turned for the worse over the summer. We believe the testing business does not
in any case reach abnormal margins and thus the back and forth with other
services should have a neutral effect on Pihlajalinna’s profitability going
forward.

On track towards higher profitability levels

The Q2 comparison figures are very low because the onset of the pandemic cut
non-urgent healthcare demand a year ago. We estimate Q2 revenue to be up 23% y/y
as there has been a rebound in private and corporate customer volumes. We expect
EBIT to have gained by EUR 5.0m y/y to EUR 5.6m. For FY ’21 we estimate 12% y/y
growth and some EUR 10m gain in EBIT.

Low multiples and profitability levels imply solid potential

Pihlajalinna is again active in M&A since the bid by Mehiläinen was curbed. The
latest target is Pohjola Sairaala, for which Pihlajalinna pays EUR 32m in cash.
The acquisition will add some EUR 60m in revenue next year and so the 0.5x EV/S
valuation looks modest relative to Pihlajalinna’s 0.9x multiple. The target has
been lately generating negative EBITDA and Pihlajalinna will provide more color
on its development in the coming months. Pihlajalinna is valued 8x EV/EBITDA and
17x EV/EBIT on our FY ’21 estimates. The company has plenty more profitability
potential and thus the multiples should decrease to 6.5x and 13x already next
year. Both earnings multiples and margin levels are clearly below those of
peers. We retain our EUR 13.2 TP and BUY rating.

Open report


ETTEPLAN - IMPROVING ON WEAK COMPARISON FIGURES

09.08.2021 - 09.45 | Preview

Etteplan reports Q2 results on August 11th and we expect notable improvement
from the weak comparison period. Etteplan has continued its growth strategy,
acquiring three smaller companies since Q1. We adjust our TP to EUR 17.5 (16.0)
on elevated peer multiples, HOLD-rating intact.

Read more

Expect clear improvement from weak comparison period
Etteplan reports its Q2 results on August 11th. Q1 results were still somewhat
mixed, with group revenue turning back to slight growth but organic growth still
negative at 4%. Relative profitability was well above comparison period levels,
with cost cutting measures made due to the pandemic having a notable impact. As
Q2/20 was the first quarter to bear the brunt of the impact of the pandemic we
expect clearly higher growth figures in Q2/21 from the weak comparison period.
We expect revenue to grow some 17% to EUR 73.7m, of which we expect some 6%
inorganic growth. We expect EBITA to remain above the 10% target level at 10.2%.

Several smaller acquisitions to continue growth strategy
Etteplan has made two acquisitions during Q2, software development company
Skyrise.tech and technical documentation specialist F.I.T. Fahrzeug
Ingenieurtechnik GmbH, and Adina Solutions after the review period, specialized
in planning and implementation of technical documentation of software. The
revenue impact on group level in 2021 should be rather marginal but we have made
minor tweaks to our estimates to account for the acquisitions. We now expect
2021 revenue of EUR 294.9m and EBIT of EUR 26.3m, quite in the middle of company
guidance (revenue EUR 285-305m and EBIT EUR 25-28m). We expect relative
profitability to improve y/y in H1 but to revert back to comparison period
levels in H2 as previously implemented cost savings measured are eased.

HOLD-rating with a target price of EUR 17.5 (16.0)
Etteplan’s valuation has risen clearly since our previous update, now trading
well above historical levels. Peer multiples have also increased quite a bit and
we raise our TP to EUR 17.5 (16.0), valuing Etteplan at ~20x 2022e P/E and
retain our HOLD-rating.

Open report


SCANFIL - OUTLOOK IS VALUED WELL ENOUGH

09.08.2021 - 09.30 | Company update

Scanfil’s Q2 top line was close to estimates while EBIT didn’t quite reach
expected levels. We make only minor estimate revisions. Our rating is now HOLD
(BUY).

Read more

Some softness in Q2 EBIT margin, but nothing major to flag

Q2 revenue, incl. transitory invoicing, grew 11% y/y to EUR 173m. The figure was
EUR 166m excl. the component-related items and can be compared to the EUR
165m/169m Evli/cons. estimates. Automation & Safety top line remained flat while
both Advanced Consumer Applications and Energy & Cleantech grew by more than
30%. Advanced Consumer Applications had account ramp-ups and high demand
persisted for familiar favorably positioned customers. Energy & Cleantech
performed strong even without big ramp-ups as the customers’ markets expand, and
we believe Scanfil has gained share within attractive accounts like TOMRA.
Component availability challenges remain, but the shortage situation didn’t have
any big negative effect on Q2 performance; the situation may now be improving or
at least isn’t worsening. The EUR 10.6m Q2 EBIT was a tad soft compared to the
EUR 10.9m/11.1m Evli/cons. estimates. In our view the Hamburg plant closure
costs explain a large part of the shortfall.

Our FY ’21 estimates remain close to the guidance midpoint

We make only very small revisions to our estimates. In our view cost inflation
is not an issue for Scanfil, while component availability is for now a challenge
for pretty much all EMS companies. Scanfil will host its first ever CMD in
September and we wouldn’t be surprised to see an upgrade to the current organic
growth target. We now see Scanfil is headed for the EUR 700m figure a year in
advance. Scanfil can top the 7% EBIT margin target at least on a quarterly
level, but we would view any upgrade to this target ambitious because growth in
the EMS business often doesn’t scale that much in terms of relative
profitability. This is one of the major factors that limit valuation.

We view current valuation picture neutral

Scanfil is now valued ca. 9x EV/EBITDA and 12x EV/EBIT on our FY ’21 estimates.
We believe growth continues to drive absolute earnings up in the coming years
and so the multiples should be down to around 8x and 11x already next year. The
valuation represents a premium relative to peers, but in our opinion is
warranted. We retain our EUR 9.0 TP; rating now HOLD (BUY).

Open report


CAPMAN - ON TRACK TOWARDS NEW PROFITABILITY LEVELS

06.08.2021 - 09.30 | Company update

CapMan reported higher than expected profitability figures due to solid
investment returns. Operating profit remains well on track towards a whole new
level. We raise our TP to EUR 3.4 (3.1) with our BUY-rating intact.

Read more

Q2 operating profit beat driven by investment returns
CapMan reported better than expected Q2 results mainly due to higher than
anticipated operating profit in the Investment business. Revenue was in line
with expectations at EUR 11.9m (EUR 11.7m/11.8m Evli/Cons.), growing some 36%
y/y. Growth in the Management company business and Services business (excl.
Scala) was clearly in the double digits during the first half of the year. The
operating profit amounted to EUR 11.3m, clearly beating expectations (EUR
9.4m/7.5m Evli/cons.). Compared with our expectations the clear positive was the
Investment business operating profit (EUR 9.4m/5.9m Act./Evli). On the other
hand personnel expenses increased clearly more than expected, and Management
company business operating profit was lower than expected (EUR 2.4m/3.1m
Act./Evli) despite higher revenue (EUR 9.9m/9.1m Act./Evli).

Operating profit pushing towards new levels
Q2 brought further good news in AUM growth, up 1.2bn y/y to EUR 4.3bn driven
mainly by Real estate, supporting continued healthy revenue growth in coming
years. We expect some EUR 45-50m in operating profit in the coming years, with
Investment business returns expected to decline somewhat from the anticipated
strong 2021 but operating profit increases in the other segments to largely make
up for the expected decrease. We have made some smaller changes to our 2021
estimates to account for cost inflation and higher investment returns, expecting
an operating profit of EUR 48.5m and a clear increase in EPS from the weak
comparison period to EUR 0.24 (0.03).

BUY-rating with a target price of EUR 3.4 (3.1)
Valuation upside is supported by peer multiples and the dividend yield, with the
solid financial performance and financial position potentially enabling faster
dividend growth in coming years. We raise our target price to EUR 3.4 (3.1),
BUY-rating intact.

Open report


SCANFIL - EBIT MARGIN A BIT BELOW ESTIMATES

06.08.2021 - 08.30 | Earnings Flash

Scanfil’s Q2 didn’t offer many surprises. Top line was close to expectations
while there was a small shortfall in operating margin relative to estimates.

Read more

Scanfil Q2 revenue was EUR 172.9m, compared to the EUR 165.3m/168.6m
Evli/consensus estimates. Top line grew by 11% y/y and included EUR 7.4m of
transitory separately agreed, low margin customer invoicing. This was related to
the ongoing component shortage situation and excluding these items revenue grew
by 6.4% y/y to EUR 165.5m.

Advanced Consumer Applications’ revenue amounted to EUR 53.4m vs our EUR 47.7m
estimate. Meanwhile Energy & Cleantech was EUR 44.8m, compared to our EUR 40.9m
estimate. Automation & Safety top line stood at EUR 36.8m vs our EUR 39.5m
estimate.

Q2 EBIT stood at EUR 10.6m vs the EUR 10.9m/11.1m Evli/consensus estimates. EBIT
margin was 6.1% vs our 6.6% estimate. According to Scanfil the production
transfer and planned closure of the Hamburg factory, which will happen by the
end of September, generated additional costs.

Scanfil guides EUR 630-680m revenue and EUR 41-46m adjusted operating profit for
FY ’21 (issued on Jun 11). Especially semiconductor availability continues to
create uncertainty around the outlook.

Open report


ASPO - SAILING TOWARDS EUR 40M EBIT

05.08.2021 - 09.15 | Company update

Aspo specified guidance and told Q2 EBIT was headstrong. In our view the latest
update dispels any remaining doubts about ESL’s and Telko’s financial
performance.

Read more

Aspo now guides EUR 30-36m in FY ’21 EBIT

The guidance range midpoint is a positive surprise compared to the EUR
31.2m/30.9m Evli/cons. estimates before the release, not by that much but the
guidance appears on the conservative side considering Aspo achieved EUR 9.6m in
Q2 EBIT. This record quarterly EBIT topped the EUR 7.1m/7.0m Evli/cons.
estimates by a mile and in our opinion Aspo seems poised towards the upper end
of the new guidance range. Steel and forest industry customers in particular
drive high cargo volumes for ESL. We also believe Telko has once again reached
an above 7% EBIT margin; there might still be some long-term downward pressure
on such a high profitability level, but nonetheless the prolonged strong
performance makes the long-term 6% target seem a bit modest.

Both ESL and Telko are hitting long-term margin targets

We estimate EUR 35.7m in FY ’21 EBIT. We see H2 EBIT at EUR 18.2m and so only a
bit above the EUR 17.5m H1 figure. H2 EBIT has tended to be meaningfully higher
than that for H1, and perhaps Telko’s recent high profitability faces some
headwinds going forward. ESL’s dockings this summer will dent Q3 EBIT, but Q4 is
shaping up to be another record and in our view the carrier’s Q4 EBIT could
touch EUR 6m. We estimate ESL to reach its 12% long-term EBIT target this year,
thus see ESL FY ’21 EBIT at EUR 20.1m (prev. EUR 18.3m) and estimate another EUR
1.5m gain next year. We expect Telko to reach EUR 18.4m (prev. EUR 16.2m) in FY
’21 EBIT. Telko may find it hard to improve from such levels, at least in terms
of margin expansion, as it has already reached the 6% long-term EBIT margin
target level.

Stable performance and cash flow turn valuation attractive

Aspo could reach EUR 40m annual EBIT in a few years. We expect EBIT to gain some
further EUR 3m next year. Going forward we see relatively stable performance for
ESL and Telko, while it remains to be seen how much Leipurin can improve. Aspo
is valued ca. 7x EV/EBITDA and 13x EV/EBIT on our FY ’21 estimates; we see
further earnings growth and deleveraging, thanks to cash flow generation,
helping the multiples lower in the years to come. Our TP is now EUR 11.5 (10.5),
retain our BUY rating.

Open report


CAPMAN - EARNINGS FLASH - EARNINGS BEAT, SOLID AUM GROWTH

05.08.2021 - 09.00 | Earnings Flash

CapMan's net sales in Q2 amounted to EUR 11.9m, in line with our estimates and
consensus (EUR 11.7m/11.8m Evli/cons.). EBIT amounted to EUR 11.4m, above our
estimates and above consensus estimates (EUR 9.4m/7.5m Evli/cons.). Capital
under management grew strongly to EUR 4.3bn, up 1.2bn y/y.

Read more

 * Revenue in Q2 was EUR 11.9m (EUR 8.7m in Q2/20), in line with our estimates
   and consensus estimates (EUR 11.7m/11.8m Evli/Cons.). Growth in Q2 amounted
   to 36.6% y/y.
 * Operating profit in Q2 amounted to EUR 11.4m (EUR 4.1m in Q2/20), above our
   estimates and consensus estimates (EUR 9.4m/7.5m Evli/cons.), at a margin of
   95.5%. The deviation compared to our estimates was mainly due to higher than
   estimated fair value changes (EUR 9.6m/6.0m Act./Evli).
 * EPS in Q2 amounted to EUR 0.06 (EUR 0.02 in Q2/20), above our estimates and
   consensus estimates (EUR 0.05/0.04 Evli/cons.).
 * Management Company business revenue in Q2 was EUR 9.9m vs. EUR 9.1m Evli.
   Operating profit in Q2 amounted to EUR 2.4m vs. EUR 3.1m Evli.
 * Investment business revenue in Q2 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q2 amounted to EUR 9.4m vs. EUR 5.9m Evli.
 * Services business revenue in Q2 was EUR 2.0m vs. EUR 2.6m Evli. Operating
   profit in Q2 amounted to EUR 0.7m vs. EUR 1.3m Evli.
 * Capital under management by the end of Q2 was EUR 4.3bn (Q2/20: EUR 3.2bn).
   Real estate funds: EUR 2.8bn, private equity & credit funds: EUR 1.1bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.03bn.

Open report


DETECTION TECHNOLOGY - RETURNING TO GROWTH

04.08.2021 - 09.30 | Company update

DT’s Q2 results were quite in line with our expectations. Growth is picking up,
with double-digit growth seen in all BU’s during H2, which should push H2
profitability close to the 15% target level. We raise our TP to EUR 32.5 (30.0)
and retain our HOLD-rating.

Read more

Group results quite in line with our expectations
Detection Technology reported its Q2 results, which were broadly in line with
our expectations. Net sales grew 11.5% to EUR 23.5m (EUR 23.8m Evli/cons.). SBU
net sales were still in decline but less so than in Q1 and security sales
started to grow in late Q2. DT has seen good traction in order intake from its
customers, in particular in security CT applications. Quarterly fluctuations saw
IBU sales growth turned negative, but the overall market remained stable. MBU
continued its strong growth supported by the demand situation in healthcare
infrastructure and CT equipment. EBIT In Q2 amounted to EUR 3.0m (EUR 3.0m/3.3m
Evli/cons.).

Double-digit growth seen in all BU’s in H2
DT’s business outlook has improved, and double-digit growth is expected in all
BU’s in H2. IBU and MBU are expected to grow double-digit in Q3 while SBU is
seen to take a turn towards growth in Q3 but demand uncertainty remains at
elevated levels. On group level we have made minor upward tweaks to our
estimates, expecting growth of 26% in H2. We are somewhat cautious to H2
profitability given the situation with component availability, but still expect
improvements due to the higher sales and estimate a H2 EBIT-margin of 14.3%. DT
is nearing its 15% target level and a stronger than estimated sales growth could
rather easily push margins above the target during the latter half of the year.

HOLD with a target price of EUR 32.5 (30.0)
With the minor estimates revisions and improved H2 outlook and visibility we
raise our target price to EUR 32.5 (30.0), valuing DT at 35x 2022 P/E. Valuation
is not cheap but DT still exhibits a nice amount of potential in EPS growth
considering target and pre-COVID profitability levels. Our rating remains HOLD.

Open report


SUOMINEN - PROFITABILITY REMAINS VERY DECENT

04.08.2021 - 09.30 | Preview

Suominen reports Q2 results on Fri, Aug 13. We make only small adjustments to
our estimates and continue to view valuation not too demanding.

Read more

There’s downward pressure from the late profitability peak

Suominen’s Q1 marked a record high profitability despite raw materials and
logistics challenges. Raw materials prices began to spike in Q1, but inventories
and nonwovens pricing dynamics meant the negative effect was not yet large. Raw
materials prices however continued to surge in Q2, and we now expect Suominen’s
Q2 gross margin to have declined by 350bps q/q to 14%. We estimate Q2 revenue at
EUR 120m, down by 2% y/y, and EBITDA at EUR 14.8m. Raw materials prices have
shown some cooling signs over the summer and we continue to expect gross margin
to settle around 13.5% going forward.

Additional investments appear forthcoming

Suominen’s business has received a pandemic boost, but high demand seems to
persist. The company has also sharpened its own operational performance.
Suominen recently issued a EUR 50m bond to be used for general corporate
purposes. In our opinion the company had more than ample liquidity already
before the transaction, and thus we see the extended financing hinting at growth
plans. Suominen may be planning organic investments, but M&A is not off the
table and we believe new geographies, in particular Asia, are now on the radar
screen.

We still see some upside to current valuation multiples

Glatfelter, which in our view is the most relevant listed Suominen peer, has
just announced the acquisition of Jacob Holm for an EV of USD 308m. Glatfelter
estimates Jacob Holm’s Jun-21 LTM EBITDA of USD 45m includes pandemic demand
benefit to the tune of USD 10-15m and expects to realize some USD 20m in annual
cost synergies within 24 months of closing. These figures suggest, in the most
optimistic scenario where the pandemic benefits persist and synergies are fully
realized, an EV/EBITDA as low as 4.7x. If the benefits vanish the synergized
multiple settles between 5.6x and 6.2x. Suominen is now valued around 6x
EV/EBITDA and 9x EV/EBIT on our estimates; these levels are somewhat below those
of Glatfelter and other peers. In our opinion Suominen’s valuation still appears
conservative. Our new TP is EUR 6.8 (6.5) per share; we retain our BUY rating.

Open report


DETECTION TECHNOLOGY - IN LINE WITH OUR EXPECTATIONS

03.08.2021 - 09.30 | Earnings Flash

DT’s Q2 result was broadly in line with our estimates. The net sales grew 11.5%
on a group level to EUR 23.5m (EUR 23.8m/23.8m Evli/cons.). The operating profit
grew to EUR 3.0m (EUR 3.0m/3.3m Evli/cons.). DT’s business outlook for the end
of the year has improved, and the company expects double-digit growth in all
business units in H2.

Read more

 * Q2 result: Q2 net sales amounted to EUR 23.5m (11.5% y/y) vs. EUR 23.8m/23.8m
   Evli/cons. estimates. Q2 EBIT was EUR 3.0m (12.6% margin) vs. EUR 3.0m/3.3m
   Evli/cons. R&D costs amounted to EUR 2.6m or 10.9% of net sales (Q2’20: 2.7m,
   12.7%).
 * Security Business Unit (SBU) net sales decreased 11.7% to EUR 6.9m vs. EUR
   7.0m Evli estimate. The security market is recovering slowly, and SBU sales
   decreased at the beginning of Q2, but took an upward turn at the end of the
   review period. Detection Technology has received a good number of orders from
   customers, in particular in security CT applications.
 * Industrial Business Unit (IBU) net sales decreased 10.4% to EUR 3.1m vs. EUR
   3.4m Evli estimate. IBU sales continue to grow although year-on-year sales
   decreased due to a quarter-over-quarter fluctuation.
 * Medical Business Unit (MBU) net sales increased 37.4% to EUR 13.6m which was
   broadly in line with our estimate of EUR 13.4m. Investments in healthcare
   infrastructure, globally and in particular in China, as well as the demand in
   higher-end CT equipment, boosted sales to grow strongly.
 * Detection Technology’s business outlook for the end of the year has improved,
   and the company expects double-digit growth in all business units in H2.

Open report


TALENOM - A GIFT THAT KEEPS ON GIVING

03.08.2021 - 09.00 | Company update

Talenom reported Q2 figures quite in line with expectations. With the on-going
solid momentum, we have raised our 2022-2023 sales growth estimates, expecting
continued solid double-digit growth. We adjust our target price to EUR 15.0
(13.3) and retain our HOLD-rating.

Read more

No major surprises in Q2 figures
Talenom reported its Q2 results, which were quite in line with expectations.
Revenue grew 29.6% to EUR 21.4m (EUR 21.0m Evli/cons.). Of the growth during
H1/21 around two-thirds were inorganic and the rest organic growth. The
operating profit improved 15% y/y to EUR 4.1m but was slightly below
expectations EUR 4.3m/4.4m Evli/cons.). Guidance remains intact, with net sales
expected to amount to EUR 80-84m and operating profit to amount to EUR 14-16m.
During the review period Talenom announced its expansion to Spain through the
acquisition of accounting firm Avail Services SL and continued to grow through
acquisitions in Finland and Sweden.

Growth prospects looking as good as ever
Growth in Q2 continued strong and a positive remark was the continued sign of
improvement in organic growth, with new customer acquisitions having recovered
to pre-pandemic levels. Talenom has also seen good traction in the new small
customer concepts, which we expect to pick up further once all steps have been
taken to enable acceleration of growth. Our 2021 estimates remain mostly intact,
but we have raised our 2022 and 2023 revenue estimates by 8% and 13%
respectively, expecting continued inorganic growth and improved organic growth
supported by accelerated new customer sales and sales from consulting work. We
expect revenue of EUR 82.4m and EBIT of EUR 15.0m respectively (co’s guidance
80-84m and 14-16m).

HOLD-rating with a target price of EUR 15.0 (13.3)
With the solid momentum in sales growth, we raise our target price to EUR 15.0
(EUR 13.3) and retain our HOLD-rating. Valuation remains a challenge, with 2022e
P/E of ~52x, but a case like Talenom is hard to come by and the outlook in terms
of profitable growth remains clearly positive.

Open report


TALENOM - FIGURES QUITE AS EXPECTED

02.08.2021 - 13.45 | Earnings Flash

Talenom's net sales in Q2 grew 29.6% to EUR 21.4m, in line with our and
consensus estimates (EUR 21.0m Evli/cons.). EBIT amounted to EUR 4.1m, slightly
below our and consensus estimates (EUR 4.3m/4.4m Evli/cons.).

Read more

 * Net sales in Q2 amounted to EUR 21.4m (EUR 16.5m in Q2/20), in line with our
   and consensus estimates (EUR 21.0m Evli/Cons.). Growth in Q2 amounted to
   29.6% y/y. Around two-thirds of the growth during H1/21 was inorganic growth
   and the remainder organic growth.
 * Operating profit in Q2 amounted to EUR 4.1m (EUR 3.6m in Q2/20), slightly
   below our and consensus estimates (EUR 4.3m/4.4m Evli/cons.), at a margin of
   19.4%.
 * EPS in Q2 amounted to EUR 0.07 (EUR 0.06 in Q2/20), in line with our and
   consensus estimates (EUR 0.07/0.08 Evli/cons.).
 * Talenom’s new customer acquisition recovered to pre-pandemic levels in late
   spring. The coronavirus pandemic no longer had a significant impact on
   Talenom’s business during the review period.
 * Net investments during H1/21 amounted to EUR 23.5m (H2/2020: EUR 9.0m).
 * Piloting of the KontoKalle service – a similar service to the TiliJaska small
   customer concept in Finland – began in Sweden in the summer.
 * Guidance intact (updated 15.4.2021): Net sales in 2021 are expected to amount
   to EUR 80-84m and operating profit to EUR 14-16m.

Open report


DETECTION TECHNOLOGY - EXPECT RETURN TO GROWTH

30.07.2021 - 09.45 | Preview

Detection technology will report is Q2 results on August 3rd. Q1 started off
rather slow and expectations are for growth to pick up in the coming quarters.
We expect the trend of net sales decline to be reversed in Q2 and sales to grow
12.8% y/y. We retain our target price of EUR 30.0 and HOLD-rating.

Read more

Q1 started off rather slow
Detection Technology will report its Q2 results next Tuesday on August 3rd. In
Q1 net sales in MBU and IBU saw double-digit growth y/y while SBU saw net sales
decline with the continued challenging situation in the security market. MBU
showed good momentum in sales growth driven by investments in healthcare
infrastructure and increased demand for CT applications. Group net sales overall
declined 8.0% y/y. Relative profitability increased y/y to a 7.5% operating
margin (Q1/20: 5.9%) but remained clearly below pre-COVID levels.

Growth seen to pick up in coming quarters
Detection Technology noted in Q1 that although the beginning of the year was
slow, the worst challenges are seen to have been left behind and growth is
expected to pick up again during 2021. MBU is seen to grow more in Q2 and H2
than in Q1 while IBU should turn to growth during H2. SBU is seen to head for
growth in late Q2 and grow in H2 but demand is characterized by uncertainty. We
estimate group net sales of EUR 23.8m for a growth of 12.8% y/y. We expect
growth to be driven by MBU (35.4% y/y) and a clearly smaller y/y growth decline
in SBU (-10.1% y/y). We expect group operating margins to remain quite on par
with previous year levels.

HOLD with a target price of EUR 30.0
We have made no changes to our estimates ahead of Q2. Valuation is quite
elevated, with 2022E P/E of ~36x, and growth recovery is still coupled with
uncertainty. Potential is however still large, with good market growth
expectations. We retain our HOLD-rating with a target price of EUR 30.0.

Open report


ELTEL - LONG-TERM MARGIN POTENTIAL

28.07.2021 - 09.35 | Company update

Eltel’s margins continued to gain in Q2 y/y. The report had no big surprises;
Eltel makes progress according to plan. We make some downward revisions to our
revenue estimates while we are a bit more positive on margins.

Read more

The 2.1% operative EBITA margin met our estimate

Q2 revenue declined by 14% y/y to EUR 210m, vs the EUR 228m/223m Evli/cons.
estimates. Other business made up 9% of top line, while Communication still
drove growth in Finland. Revenue declined in all other countries, and Swedish
EBITA didn’t improve as the comparison period had a positive EUR 0.9m one-off
item. The pandemic delayed Norwegian fiber activity, and together with tough
winter produced some softness in local results. Meanwhile Denmark saw a positive
EUR 0.8m one-off in profitability. Q2 EBIT landed at EUR 4.3m vs the EUR
4.4m/4.1m Evli/cons. estimates. Operative EBITA margin was 2.1% vs our 2.0%
estimate. Q3 tends to be the most profitable quarter and we see the respective
‘21 margin at 4.1%, up 110bps y/y. We estimate FY ’21 EBITA margin improving by
130bps to 2.5%.

FI & NO drive short-term, SE & DK hold long-term promise

We moderate our Norwegian estimates a bit but still see the business similarly
important for near-term results as Finland. Denmark is for now the smallest of
the four but already achieves good margins and probably has the best long-term
growth prospects. In our view traffic lighting presents a solid source of
business for all four (Finnish street lighting in particular). Finland, Norway
and Denmark also offer fiber opportunities, while in Sweden that market is more
challenging. There’s scope for M&A, but we believe it probably takes many
quarters before anything materializes. We expect Sweden to weigh figures at
least in Q3. Eltel is however making progress there, and we see group-level
growth turning positive in Q4 thanks to Finnish and Norwegian strength. We
estimate Eltel’s Q3 growth to remain negative.

Current valuation leaves solid upside potential

Eltel is valued ca. 7.5x EV/EBITDA and 16x EV/EBIT on our FY ’22 estimates. We
see the respective FY ‘23 multiples at 6.5x and 13x. These are somewhat neutral
levels compared to peers, but we continue to view valuation attractive as Eltel
advances towards its long-term 5% EBITA margin target (we estimate 3.9% for FY
’23). We retain our SEK 29.5 TP and BUY rating.

Open report


ELTEL - PROFITABILITY AS EXPECTED

27.07.2021 - 09.30 | Earnings Flash

Eltel’s Q2 produced a sixth consecutive annual improvement in operative EBITA
and the result was close to estimates. Eltel maintains its previous guidance and
expects similar development for the rest of the year.

Read more

 * Q2 group revenue amounted to EUR 210.4m, down by 14% y/y and compared to the
   EUR 228.4m/223.1m Evli/consensus estimates.
 * EBITDA was EUR 12.7m vs the EUR 13.0m/13.0m Evli/consensus estimates.
   Operative EBITA improved to EUR 4.4m (EUR 2.8m in Q2’20) vs our EUR 4.6m
   estimate. Operative EBITA margin was therefore 2.1%. EBIT amounted to EUR
   4.3m vs the EUR 4.4m/4.1m Evli/consensus estimates.
 * Profitability margins in Finland and Denmark were above our estimates
   (Denmark was exceptionally good this time), while the Swedish operative EBITA
   margin remained in the red. The Norwegian margin was a bit below our
   estimate, but Eltel expects volume pick-up there towards the end of the year.
   Eltel sees the restructuring in Sweden working out long-term.
 * Eltel guides operative EBITA margin to improve in 2021 compared to 2020
   (unchanged).

Open report


FELLOW FINANCE - INTERESTING TIMES AHEAD

26.07.2021 - 09.35 | Company update

Fellow Finance signed a combination agreement with Evli Bank to merge with
Evli’s banking services, intended to be carried out during H1/2022. In the more
near-term, Fellow Finance has seen a healthy rebound in loan volumes during
H1/2021, looking to get back on a growth trajectory.

Read more

Signed combination agreement to create “Fellow Bank”
Fellow Finance and Evli Bank signed a combination agreement, by which Evli Bank
will demerge through a partial demerger and Fellow Finance will merge with the
company that will carry on Evli Bank’s banking services and form “Fellow Bank”.
A main idea behind the merger is to combine Evli’s banking and risk management
expertise with Fellow Finance’s expertise in lending and assessment of
creditworthiness. The combination would in our view create clear synergies and
provide a sturdier foundation but with the shift to balance-sheet lending Fellow
Finance’s original idea of a scalable lending platform would be less valid. The
arrangement is intended to be carried out during the first half of 2022.

Good loan volume growth during H1
H1 has seen loan volumes rebound quite nicely, with the monthly average during
H1 at around EUR 15m compared with EUR 11m during H2/20, and most recent months
nearing all-time high. We have raised our 2021 estimate to EUR 201m (prev. EUR
160m). The growth should not translate as well into revenue given the growth
being driven by lower-margin business lending, but we still expect growth of
18.6% from the weak comparison period. The business lending driven growth should
also not burden costs as much, but earnings are still expected to remain low due
to growth investments.

BUY with a target price of EUR 4.0 (3.8)
The combination agreement could value Fellow Bank at EUR 50.8m (FF 25.2m, Evli
banking serv. 13.9m and 11.7m added capital through share issue), and with at
least EUR 30m equity would give a max 1.7x P/B. We will treat Fellow Finance as
is for now. On our revised estimates we raise our target price to EUR 4.0 (3.8)
and retain our BUY-rating.

Open report


RAUTE - STEEP EBIT CLIMB REMAINS IMMINENT

26.07.2021 - 09.30 | Company update

Raute’s Q2 profitability was still weak, but in our opinion the mix of
stabilizing costs and very high order book are bound to drive steep earnings
growth going forward.

Read more

Demand is improving somewhat faster than we expected

The EUR 35.5m in Q2 revenue was close to our EUR 36.0m estimate and had a
favorable tilt towards services (EUR 16.3m vs our EUR 12.0m estimate), but EBIT
nonetheless remained EUR -1.0m (vs our EUR 1.6m estimate). Employee costs grew
by EUR 2.8m y/y and EUR 1.0m q/q, while other operating expenses grew by EUR
1.8m y/y and EUR 0.9m q/q (due to e.g. a proprietary marketing event). The EUR
65m order intake surpassed our estimate by EUR 10m. The higher-than-expected
order intake stemmed, in geographic terms, across the board and so there were no
major individual surprises. Both project deliveries and technology services
orders topped our estimates. Modernizations drove services orders again to a
high EUR 18m figure. Demand is overall improving a bit faster than we expected,
order book is already a lofty EUR 129m and we expect it to swell further during
the remainder of this year. The book is also now less dependent on large
projects than it used to be just a while ago.

Traditional important markets now drive results

Raute’s guidance remains unchanged. Employee costs should stabilize going
forward and we also believe other expenses have now peaked. The big order book
will thus begin to drive higher profitability. Raute sees potential supply chain
challenges in H2, but in our view components and logistics issues are not a
major long-term topic in the context of Raute considering the company’s strong
value chain position. We make only small estimate revisions. We see Raute
reaching EUR 163m in FY ‘22 revenue with a 6.5% EBIT margin, whereas we
previously estimated a 7% margin, and further potential from there on.

Valuation is not stretched given the long-term potential

We continue to expect steep earnings climb for FY ’22. We make a small
moderation in our profitability estimates, on which Raute now trades some 8x
EV/EBITDA and 10x EV/EBIT; we see the FY ‘23 multiples contracting to about 7x
and 9x. In our view these are attractive levels considering Raute’s leading
position in advanced markets as well as long-term emerging markets
opportunities. We retain our EUR 26.5 TP and BUY rating.

Open report


CONSTI - UPGRADE TO BUY

26.07.2021 - 09.05 | Company update

Consti reported rather good Q2 results on an adj. basis, with both growth and
underlying profitability slightly better than expected. The solid order intake
also bodes well for continued growth during the latter half of the year. We
raise our target price to EUR 14.5 (13.0) and upgrade our rating to BUY (HOLD).

Read more

Q2 better than expected on adj. basis
Consti reported overall slightly better than expected Q2 results. Revenue grew
2.3% y/y (5.9% excl. IAC) to EUR 70.9m (EUR 68.5m/69.2m Evli/cons.). The
operating profit and adj. operating profit amounted to EUR -0.5m (EUR
-0.4m/-0.7m Evli/cons.) and EUR 2.9m (EUR 2.6m Evli) respectively. The operating
profit included EUR 3.5m of IAC’s relating to the Hotel St. George project
arbitration proceedings, which should no longer materially affect costs during
H2. The order backlog was back to growth, up 11.5% y/y to EUR 236.2m, supported
by a solid order intake of EUR 98.5m.

Growth picking up
We have made minor upward revisions to our estimates, now expecting 2021 revenue
of EUR 286.4m (prev. EUR 278.0m) and operating profit of EUR 5.9m (prev. 5.7m).
The growth exceeded our expectations in Q2 and with the solid order intake
Consti is poised to continue the growth during the latter half of the year. The
increases in building material costs could potentially affect costs during H2
and we for now assume a very minor impact as prices have been going recently.
With the new construction venture having gotten off to a good start with the
recently signed deals we expect continued growth of some 3% p.a. during
2022-2023 with relatively stable margins on adjusted basis.

BUY (HOLD) with a target price of EUR 14.5 (13.0)
With the signs of pick-up in growth and slightly better than estimated
underlying profitability (excl. IAC’s) we raise our target price to EUR 14.5
(13.0) and upgrade our rating to BUY (HOLD). Our TP values Consti at a quite
reasonable 14.7x 2022 P/E.

Open report


VAISALA - SOLID QUARTER, SOME UNCERTAINTY AHEAD

26.07.2021 - 08.30 | Company update

Vaisala reported its Q2 results which came with little surprises as preliminary
figures had been given, although the underlying profitability did exceed
expectations. We have made some upwards revisions to our estimates and adjust
our target price to EUR 36.0 (35.0) with our HOLD-rating intact.

Read more

Solid growth driven by Industrial Measurements
Vaisala reported its Q2 results, which with the preliminary figures given ahead
of the quarter did not come as a larger surprise. Revenue growth was at a solid
20% and the operating result also improved clearly y/y to EUR 10.9m (Q2/20: EUR
7.9m). Both BU’s posted double-digit growth figures, with IM growth at 31% and
W&E at 14%. Orders received grew 25% to EUR 120.1m and the order backlog as a
result was up 14% to EUR 165.3m. Vaisala updated its guidance ahead of Q2,
expecting revenue of EUR 400-420m and EBIT of EUR 40-50m. Vaisala will hold its
Capital Markets Day on September 21st.

Underlying profitability better than expected
We have raised our estimates slightly, now expecting revenue of EUR 418.4m
(prev. EUR 409.9m) and an operating result of EUR 48.2m (prev. EUR 45.0m).
Vaisala’s Q2 result included an additional of EUR 2.2m relating to an update of
the valuation of contingent considerations and the underlying profitability as
such was clearly better than the reported operating result figures. The
availability and cost of components was highlighted as a potential concern for
H2, which we have reflected also in our estimates. Should the impact turn out to
be small or negligible, the current guidance would appear to be rather
conservative.

HOLD with a target price of EUR 36.0 (35.0)
On our revised estimates we adjust our target price to EUR 36.0 (35.0) and
retain our HOLD-rating. Vaisala’s performance in Q2 was solid, but the already
stretched valuation (30.3x 2022 P/E) and uncertainty relating to component cost
and availability is something to consider.

Open report


VAISALA - SOLID FIGURES ACROSS THE BOARD

23.07.2021 - 09.35 | Earnings Flash

Vaisala had given preliminary figures ahead of Q2 and as such contained no
surprises on group level. Orders received and revenue grew well in both BU’s,
but more strongly in Industrial Measurements. Faster than expected recovery from
the pandemic had a positive effect on demand, in particular in APAC and Europe.

Read more

 * Group level results: Q2 net sales increased by 25% to 109.5 MEUR
   (pre-announced). Q2 EBIT came in at 10.9 MEUR (pre-announced), resulting in a
   10.0% EBIT-margin (Q2’20: 7.9 MEUR, 8.7% EBIT-margin)
 * Gross margin was 55.3% vs. 54.5% last year.
 * Orders received were 120.1 MEUR vs. 95.9 MEUR last year. Orders received grew
   by 25%; 17% in W&E and 41% in IM. Order book was 165.3 MEUR vs. 145.3 MEUR in
   Q2’20.
 * Weather & Environment (W&E) net sales increased by 14% to 65.4 MEUR vs. 65.9
   MEUR our expectation. W&E EBIT was 1.0 MEUR (1.7 MEUR Evli). W&E’s orders
   received grew by 17%. Orders received growth was very strong in the
   meteorology market segment and increased also in renewable energy and
   aviation market segments. Net sales grew in meteorology and renewable energy
   market segments, whereas net sales in ground transportation and aviation
   market segments decreased. Industrial Measurements (IM) net sales grew 31% to
   44.1 MEUR vs. 43.6 MEUR our expectation. IM EBIT was 10.5 MEUR (9.6 MEUR
   Evli), resulting in a 23.7% EBIT-margin (Q2’20: 20.9%). IM order intake
   growth was 41%. Orders received increased very strongly in life science and
   industrial instruments market segments. Net sales growth was strong in
   industrial instruments and life science market segments, and good in power
   industry market segment.
 * Vaisala raised its business outlook for 2021 ahead of Q2, expecting net sales
   to be in the range of 400–420 MEUR and EBIT in the range of 40–50 MEUR.

Open report


RAUTE - HIGH ORDERS, LOW PROFITABILITY

23.07.2021 - 09.30 | Earnings Flash

Raute’s Q2 order intake grew even more than we expected, while profitability
remained weak.

Read more

 * Q2 revenue grew by 45.5% y/y and amounted to EUR 35.5m, compared to our EUR
   36.0m estimate. Project deliveries top line was EUR 19.2m (vs our EUR 24.0m
   estimate) while technology services was EUR 16.3m (vs our EUR 12.0m
   estimate).
 * EBIT was EUR -1.0m vs our EUR 1.6m estimate, meaning EBIT margin was -2.9%
   while we expected 4.4%. The comparison period had exceptionally low payroll
   costs, in addition to which marketing and digitalization efforts were
   continued, and thus the result remained in the red.
 * Q2 order intake amounted to EUR 65m, while we expected EUR 55m. Project
   deliveries orders were EUR 47m, compared to our EUR 42m estimate, while
   technology services amounted to EUR 18m vs our EUR 13m estimate.
 * Order book stood at EUR 129m at the end of Q2 (EUR 80m a year ago).
 * Raute guides revenue to grow and operating profit to improve in 2021
   (unchanged).

Open report


CONSTI - RATHER UPBEAT REPORT

23.07.2021 - 09.00 | Earnings Flash

Consti's net sales in Q2 amounted to EUR 70.9m, in line with our and consensus
estimates (EUR 68.5m/69.2m Evli/cons.). EBIT amounted to EUR -0.5m, in line with
our and consensus estimates (EUR -0.4m/-0.7m Evli/cons.). The order backlog was
up 11.5% to EUR 236.5m. Excluding one-offs the report was in our view rather
upbeat, in particular on order intake.

Read more

 * Net sales in Q2 were EUR 70.9m (EUR 69.3m in Q2/20), in line with our and
   consensus estimates (EUR 68.5m/69.2m Evli/Cons.). Sales grew 2.3% y/y.
 * Operating profit in Q2 amounted to EUR -0.5m (EUR 2.4m in Q2/20), in line
   with our and consensus estimates (EUR -0.4m/-0.7m Evli/cons.), at a margin of
   -0.7%. Consti recognized a non-recurring loss of EUR 3.4m as a result of the
   arbitral award relating to the Hotel St. George project. Adj. EBIT was EUR
   2.9m (Q2/20: EUR 2.7m). On adj. basis EBIT was better than expected as we had
   expected EBIT excl. St. George items to amount to EUR 2.6m.
 * EPS in Q2 amounted to EUR -0.09 (EUR 0.21 in Q2/20), below our estimates and
   above consensus estimates (EUR -0.07/-0.12 Evli/cons.).
 * The order backlog in Q2 was EUR 236.5m (EUR 211.8m in Q2/20), up by 11.5%.
   Order intake was at a very healthy EUR 98.5m in Q2 (Q2/20: EUR 66.8m).
 * Free cash flow amounted to EUR -1.4m (Q2/20: EUR 8.1m).
 * Guidance for 2021 (intact): Operating profit is expected to be between EUR
   4-8m.

Open report


INNOFACTOR - CONTINUED STEADY PERFORMANCE

23.07.2021 - 08.30 | Company update

Innofactor’s Q2 results were well in line with expectations. We have made
essentially no changes to our estimates and continue to expect modest growth and
notable profitability improvement. We retain our BUY-rating and target price of
EUR 2.2.

Read more

Q2 well in line with our expectations
Innofactor reported its Q2 results, which were well in line with our
expectations. Revenue grew 3.2% y/y, 7.6% organically, to EUR 17.3m (Evli
17.3m). Revenue growth turned positive again in all countries. EBITDA and EBIT
amounted to EUR 2.1m (Evli 2.2m) and EUR 1.3m (Evli EUR 1.4m) respectively, with
all other countries except Sweden showing positive figures. The order backlog
continued to grow nicely, up 28% y/y to EUR 72.7m. Innofactor reiterated its
guidance, expecting revenue and EBITDA to increase compared to 2020. Innofactor
made an early repayment of loans for EUR 2.7m, improving the equity ratio and
net gearing to 49.9% and 30.5% respectively, while still leaving the cash
position on par with 2020 year-end figures. All in all, the Q2 report was quite
neutral and held little significant new information.

No notable changes to our estimates
We have made essentially no changes to our estimates. We expect revenue in 2021
to grow 3.4% EUR 68.4m and EBIT (excl. PPA and Prime divestment) to improve to
EUR 6.0m (2020: EUR 4.4m). We expect slight pick-up in growth during H2
accounting for the impact of COVID-19 on 2020 comparison figures supported by
the solid order backlog. Positive signs in the other Nordic countries speak for
a potential pick-up in the growth pace, with growth recently having been driven
to a larger extent by Finland.

BUY with a target price of EUR 2.2
With no essential changes to our estimates or view on Innofactor as an
investment case we retain our BUY-rating and target price of EUR 2.2. Our target
price values Innofactor at a slight discount to peers on adj. multiples, which
we still consider fair given the lower growth pace.

Open report


INNOFACTOR - FIGURES AS EXPECTED

22.07.2021 - 09.30 | Earnings Flash

Innofactor’s Q2 results were as expected. Net sales amounted to EUR 17.3m (Evli
EUR 17.3m), while EBITDA amounted to EUR 2.1m (Evli EUR 2.2m). The order backlog
continued to grow well, up 28% y/y to EUR 72.7m.

Read more

 * Net sales in Q2 amounted to EUR 17.3m (EUR 16.8m in Q2/20), in line with our
   estimates (Evli EUR 17.3m). Net sales in Q2 grew 3.2% y/y and 7.6%
   organically. Revenue grew in all countries.
 * EBITDA in Q2 was EUR 2.1m (EUR 2.0m in Q2/20), in line with our estimates
   (Evli EUR 2.2m), at a margin of 12.1%. EBITDA was positive in Finland, Norway
   and Denmark.
 * Operating profit in Q2 amounted to EUR 1.3m (EUR 0.9m in Q2/20), in line with
   our estimates (Evli EUR 1.4m), at a margin of 7.4%.
 * Order backlog at EUR 72.7m, up 28% y/y. Innofactor succeeded well in sales
   during the second quarter and received several significant orders.
 * Innofactor expects that the COVID-19 pandemic will not cause significant harm
   to Innofactor’s business in 2021.
 * Innofactor made an early repayment of loans for EUR 2.7m, improving the
   company’s equity ratio to 49.9% and net gearing to 30.5%.
 * Guidance reiterated: Innofactor’s net sales and EBITDA in 2021 are estimated
   to increase compared to 2020 (net sales and EBITDA EUR 66.3m and EUR 7.2m
   respectively).

Open report


SRV - STILL ON TRACK

22.07.2021 - 09.00 | Company update

SRV’s Q2 results were fairly in line with expectations and held little new
information. Progress is being made slowly but steadily and the company is quite
well on track to regain decent profitability levels. We retain our BUY-rating
and target price of EUR 0.8.

Read more

No surprises in Q2
SRV reported Q2 results that were fairly well in line with expectations. Revenue
declined some 18% y/y to EUR 218.0m (EUR 232.1m/243.0m Evli/cons.) mainly due to
lower business construction revenue. The operating profit was fairly good, at
EUR 6.3m (EUR 5.8m/5.0m Evli/cons.), and the operative operating profit stood at
EUR 5.7m (Evli 5.8m). The order backlog was down 21% y/y at EUR 1,048m. The
guidance for 2021 of EUR 900-1,050m in revenue and operative operating profit of
EUR 16-26m remains intact. The second quarter was rather limited in new
information content, one highlight being the completed financing arrangements
that clearly improved the maturity structure.

Estimates largely intact, potential minor headwind in H2
We have made some smaller adjustments to our 2021 estimates, now expecting
revenue of EUR 907.2m (prev. 904.3m) and operating profit of EUR 22.1m (23.9m).
Revenue in H2 is expected to improve clearly on H1 with for instance the
completion of the second Kalasatama tower, Loisto, but relative profitability is
expected to be weaker due to lower margins in key projects. Elevated building
material costs and availability could cause some headwind in the latter half of
2021 but so far, the impact does not appear to be material. Start-ups of
developer-contracted housing units continued on a slight positive trend, with
the financing arrangements opening up potential for accelerated pace given
sufficient demand.

BUY with a target price of EUR 0.8
Q2 was quite neutral and did not affect our view of SRV as an investment and
SRV’s potential is being unlocked, although slowly. We retain our target price
of EUR 0.8 and BUY-rating.

Open report


VAISALA - SOLID Q2 RESULTS INCOMING

21.07.2021 - 09.35 | Preview

Vaisala reports its Q2 results on July 23rd. Preliminary figures show a solid
second quarter and our attention will be drawn toward the rest of the year and
comments regarding the impact of component availability/costs.

Read more

Guidance upgraded pre-Q2 after solid quarter
Vaisala reports its Q2 results on July 23rd. Vaisala issued a guidance upgrade
last week and posted preliminary figures for sales, operating results and orders
received. The previous guidance range for 2021 net sales (EUR 380-400m) and
operating result (EUR 35-45m) was raised to EUR 400-420m and EUR 40-50m
respectively. The guidance upgrade appears to be driven largely by a solid
second quarter. Preliminary figures show Group sales growth of 20% to EUR 109.5m
in Q2 and operating result of EUR 10.9m (Q2/20: 7.9m). Vaisala’s preliminary
orders received in Q2 grew by 25% to EUR 120.1m. Vaisala did not specify figures
per segment but noted that pick-up in demand was reflected especially in the
Industrial Measurements business area.

Minor estimate changes based on preliminary Q2 figures
We have only revised our estimates for 2021 based on the preliminary figures for
Q2. Our estimates were already clearly in the upper end of the previous guidance
and the impact as such is relatively small on full year figures. Our sales
estimate is now at EUR 409.9m (prev. 396.9m) and operating result estimate at
EUR 45.0m (44.6m), in the middle of the guidance ranges. Vaisala noted that the
shortage of components has increased material and transportation costs, which
will have a negative impact on operating result in H2/2021, and we will be
following any comments on the potential magnitude of the impact in the upcoming
earnings report.

HOLD with a target price of EUR 35.0 (33.0)
Based on the more favourable outlook we have adjusted our target price to EUR
35.0 (33.0). The current rather stretched valuation and potential headwind from
component availability/cost limits upside potential. We retain our HOLD-rating.

Open report


EXEL COMPOSITES - EXTENDED HEADY GROWTH

21.07.2021 - 09.30 | Company update

Exel Q2 margins were close to what we expected, while the growth extension turns
us overall more positive. In our view the company isn’t that far from 10% annual
EBIT margins.

Read more

Q2 margins declined pretty much as expected

Sales mix (tilt to carbon fibers) as well as volumes continued to improve and Q2
top line grew by 23% y/y. The EUR 33.5m figure surpassed our EUR 30.4m estimate
despite certain quarterly softness in Wind power, which in our view testifies to
Exel’s extended wide positive development. Buildings and infrastructure, a
highlight customer industry, was driven by the conductor core application and
reached EUR 8.7m top line (vs our EUR 5.9m estimate). Q2 gross margin declined
by almost 400bps y/y and 200bps q/q to 56.3%, which wasn’t a surprise per Exel’s
comments in connection with the Q1 report. Higher raw materials costs and
certain growth category products’ ramp-up had a negative margin impact, but
Exel’s 7.3% adj. EBIT margin was in fact a bit above our 7.2% estimate. The
resulting EUR 2.5m adj. EBIT topped our EUR 2.2m estimate thanks to the high
revenue. Exel retained its previous FY ‘21 guidance.

Prolonged high growth further lifts profitability potential

Order intake didn’t show any signs of cooling and leaped by 90% y/y. The Q2
comparison figure was soft, but nevertheless the latest EUR 43.5m figure gained
another 4% q/q and can be compared to the EUR 30m quarterly levels that used to
be common. We now expect Exel to reach 15% growth this year. In our view H2
growth is bound to top 10% and thus we estimate H2 EBIT margins to increase by
ca. 100bps y/y. We still expect Exel’s composites pricing to adjust for higher
raw materials costs and see annual EBIT margin reach close to 10% already next
year. It’s a bit early to say much about FY ’22, but the recent order intake
levels suggest Exel might then grow another 10% or so. We therefore see EBIT
gaining almost another EUR 3m.

We now estimate EUR 13.5m FY ’22 EBIT (prev. EUR 12.7m)

Exel’s valuation has turned, in our view, more attractive now that recent strong
growth outlook has been extended. Exel is now valued ca. 9x EV/EBITDA and 14x
EV/EBIT on our FY ‘21 estimates. These are still somewhat high in the historical
context, but we expect them to contract to around 7.5x and 11x in one year’s
time. Our TP is now EUR 11.5 (11.0), new rating BUY (HOLD).

Open report


SRV - QUITE IN LINE WITH EXPECTATIONS

21.07.2021 - 09.00 | Earnings Flash

SRV's net sales in Q2 amounted to EUR 218.0m, below our and consensus estimates
(EUR 232.1m/241.0m Evli/cons.). EBIT amounted to EUR 6.3m, above our and
consensus estimates (EUR 5.8m/5.0m Evli/cons.).

Read more

 * Revenue in Q2 was EUR 218.0m (EUR 265.1m in Q2/20), below our and consensus
   estimates (EUR 232.1m/241.0m Evli/Cons.). Revenue declined 18% y/y in Q2.
 * Operating profit in Q2 amounted to EUR 6.3m (EUR 3.3m in Q2/20), above our
   estimates and above consensus estimates (EUR 5.8m/5.0m Evli/cons.), at a
   margin of 2.9%. The operative operating profit amounted to EUR 5.7m (Evli EUR
   5.8m).
 * EPS in Q2 amounted to EUR 0.01 (EUR 0.02 in Q2/20), above our and consensus
   estimates (EUR 0.00 Evli/cons.).
 * The order backlog in Q1 was EUR 1,048m (EUR 1,332m in Q2/20), down by -21%.
 * Construction revenue in Q2 was EUR 218.5m vs. EUR 231m Evli. Operating profit
   in Q2 amounted to EUR 7.0m vs. EUR 8.0m Evli.
 * Investments revenue in Q2 was EUR 1.0m vs. EUR 1.1m Evli. Operating profit in
   Q2 amounted to EUR 0.1m vs. EUR -1.3m Evli.
 * Other operations and elim. revenue in Q2 was EUR -1.5m vs. EUR 0.0m Evli.
   Operating profit in Q2 amounted to EUR -0.8m vs. EUR -0.9m Evli.
 * Guidance intact: Consolidated revenue for 2021 is expected to amount to EUR
   900-1,050m and operating profit is expected to improve on 2020 and amount to
   EUR 16-26m.

Open report


CONSTI - ONE-OFF TO BURDEN Q2 RESULTS

21.07.2021 - 08.00 | Preview

Consti reports its Q2 results on July 23rd. The Q2 figures will be burdened by
the outcome of the Hotel St. George renovation project arbitration proceedings
but operational performance should remain steady. The venture into new building
construction has gotten off to a good start with the signing of a larger office
construction project.

Read more

Arbitration proceedings outcome to burden Q2 results
Consti will report its Q2 results on July 23rd. Profitability figures are
expected to be rather grim due to the unfavourable outcome of the arbitration
proceedings relating to the Hotel St. George renovation project but apart from
that no larger deviations should be expected. The impact of the arbitration
proceedings on the operating result should be some EUR 3.0m and we expect an
operating result of EUR -0.4m. The impact is partly reflected also in revenue,
due to which we expect a slight decline in revenue y/y to EUR 68.5m (Q2/20: EUR
69.3m). Excluding the impact our estimates reflect slight improvement in both
revenue and operating result.

Promising start to new construction venture
Apart from the news regarding the arbitration proceedings, the other notable
news during the quarter was the announcement of Consti’s first significant new
building construction project. The project, consisting of two new office
buildings, is valued at approx. EUR 30m. New building construction was
implemented as part of Consti’s revised strategy, with the aim for 10-15% of
revenue to come from such projects in 2023, and the signing of a deal of such
size provides a solid foundation for achieving the target. With Consti having
implemented steps to improve profitability, our sights have been turned toward
the unfavourable revenue development, and revenue from new construction could
well be a driver in Consti’s investment case.

HOLD-rating with a target price of EUR 13.0
We have made no adjustments to our estimates ahead of the Q2 report. We retain
our HOLD-rating and target price of EUR 13.0. Our target price values Consti at
approx. 16.6x 2021 P/E (excl. arbitration proceedings items).

Open report


EXEL COMPOSITES - FIGURES ABOVE OUR ESTIMATES

20.07.2021 - 10.30 | Earnings Flash

Exel Composites’ Q2 report was throughout better than we expected. Absolute
profitability remained higher than we estimated as top line development was once
again very strong. Relative profitability was close to what we expected, while
order intake reached a new high.

Read more

 * Q2 revenue was EUR 33.5m, compared to our EUR 30.4m estimate. Top line growth
   was 23% y/y. Customers in Europe and North America drove growth.
 * Wind power amounted to EUR 7.8m vs our EUR 8.9m estimate, while Buildings and
   infrastructure was EUR 8.7m (we expected EUR 5.9m). Defense continued to grow
   very fast while Equipment and other industries was also very strong.
 * Q2 adjusted EBIT was EUR 2.5m vs our EUR 2.2m estimate. Adjusted EBIT margin
   was 7.3%, compared to our 7.2% estimate.
 * Order intake amounted to EUR 43.5m in Q2 and grew by 90% y/y. The Q2 figure
   was thus some 4% higher than that seen in Q1.
 * Exel retains the previous guidance, expects revenue and adjusted EBIT to
   increase in FY ’21 compared to FY ’20.

Open report


VERKKOKAUPPA.COM - CAPITALIZING ON STRENGTHS

19.07.2021 - 09.45 | Company update

Verkkokauppa.com’s Q2 marked a sixth consecutive earnings improvement. In our
opinion the company remains well positioned to improve plenty more long-term.

Read more

Earnings a small positive surprise, retains FY ’21 guidance

Verkkokauppa.com’s Q2 revenue increased by 6% y/y to EUR 131m, compared to the
EUR 130m/130m Evli/cons. estimates. Growth was driven by wide positive
development as traditional product categories like computers and cameras sold
well but evolving categories such as sports and home & lighting were also
popular. Online sales grew at a 15% y/y pace while B2B sales were up by 38% and
thus made up 22% of total revenue. Overall top line, excluding export sales,
advanced some 160bps faster than the market and in our view highlights the
strength of the Verkkokauppa.com brand. The 17.2% gross margin topped our 16.8%
estimate, and the resulting EUR 0.6m difference in gross profit helped the EUR
5.1m Q2 adj. EBIT beat our EUR 4.6m estimate (same as the consensus) and reach a
record high.

We believe strong positioning will deliver further results

Verkkokauppa.com has performed strong and steady for a while. Export sales have
been the only soft area, due to the pandemic, and according to the company will
probably not bounce back sharp this year. The company has recently built
inventories to buffer up for the busy autumn season and important Q4.
Verkkokauppa.com retains a strong position in the Finnish B2C channel but has
also gained traction in B2B, where volumes stem from many SME customers. The EUR
4m small-item logistics investment is relatively small and will only have a
negligible operative impact in H2’21 when inventories have to be moved to
accommodate the Jätkäsaari construction phase. We make small revisions to our
estimates and expect Verkkokauppa.com to achieve 8% growth and 4.1% EBIT margin
this year. We also make some upward revisions to our long-term estimates.

Overall valuation picture is still attractive

In our opinion Verkkokauppa.com’s valuation remains attractive considering the
steady performance and long-term potential. We see solid high single-digit CAGR
performance for the coming years and potential for positive surprises. We
continue to view current valuation picture overall very reasonable against this
backdrop. We retain our EUR 10.8 TP and BUY rating.

Open report


FINNAIR - FURTHER COST SAVINGS HELP RECOVERY

16.07.2021 - 09.10 | Company update

Finnair’s Q2 report didn’t contain major news, considering the big picture. We
revise our volume estimates down, however additional cost savings support our
EBIT estimates.

Read more

No big surprises, but Q3 profitability will not much improve

Finnair’s Q2 revenue amounted to EUR 112m, below the EUR 142m/145m Evli/cons.
estimates. Passenger, ancillary and cargo revenues were all soft compared to our
estimates, but travel is resuming as passenger revenue topped that for cargo in
June. Working capital situation is beginning to improve due to growing bookings
and Finnair expects monthly OCF to turn positive by the end of this year. The
situation, however, remains challenging from profitability perspective.
Finnair’s Q2 adj. EBIT was EUR -151m, compared to the EUR -144m/-144m Evli/cons.
estimates. Finnair sees similar losses for Q3 as well. We revise our Q3 adj.
EBIT estimate to EUR -132m (prev. EUR -91m).

Cost savings support profitability amid volume challenges

Finnair turned more cautious regarding the following years’ travel rebound, not
a big surprise considering the latest developments. Asian vaccination rates have
begun to pick up and important Northeast Asian countries are expected to have
fully vaccinated 70% of their population during Q4. Finnair’s passenger volume
rebound will lag those of Western short-haul focused carriers, but meaningful
recovery should begin to materialize during the next few quarters. We now expect
Finnair to reach ca. 90% of FY ’19 business levels (in terms of ASK & RPK) in FY
’23. We revise these estimates down a few percentage points and now expect EUR
2.8bn top line for FY ’23 (prev. EUR 3.0bn). Meanwhile Finnair’s upsized
permanent cost savings projection supports our EBIT estimates. In our view the
company could achieve healthy EBIT margins already next year and we see
potential for 7% profitability in FY ’23. We have made only very small revisions
to our absolute profitability estimates.

In our view profitability potential has been fully valued

In our opinion Finnair is set to return to good profitability levels, however
this potential has been appreciated for a while. Finnair is valued roughly 15x
EV/EBIT on our FY ’22 estimates, not an unreasonable level compared to other
airlines but nonetheless fully valued given the persistent level of uncertainty.
Our TP is now EUR 0.65 (0.7) and we retain our HOLD rating.

Open report


VERKKOKAUPPA.COM - PROFITABILITY CONTINUED TO HOLD UP

16.07.2021 - 08.30 | Earnings Flash

Verkkokauppa.com reported Q2 results that were overall somewhat above estimates.
Top line was close to the expected levels, while the strong gross margin helped
adj. EBIT to surpass estimates by some EUR 0.5m.

Read more

 * Q2 revenue amounted to EUR 130.5m vs the EUR 129.8m/130.1m Evli/cons.
   estimates. Top line increased by 6.1% y/y, while online sales grew 15.1% and
   B2B sales 38.4%. Product categories like computers and cameras as well as
   sports equipment and home & lighting were popular.
 * Gross profit was EUR 22.4m (17.2% margin), compared to our EUR 21.8m (16.8%
   margin) estimate. Product mix continued to move in a favorable direction.
 * Adj. EBIT was EUR 5.1m (3.9% margin) vs the EUR 4.6m/4.6m (3.5% margin)
   Evli/cons. estimates.
 * Verkkokauppa.com guides EUR 570-620m revenue and EUR 20-26m adj. EBIT for
   this year (unchanged).
 * Verkkokauppa.com will host its first CMD on Sep 29, 2021.

Open report


FINNAIR - Q3 WILL NOT BRING MUCH RELIEF

15.07.2021 - 09.30 | Earnings Flash

Finnair’s Q2 losses were pretty much as expected. The company estimates Q3
operating loss will also be roughly EUR 150m, in other words comparable to
recent quarters.

Read more

 * Q2 revenue amounted to EUR 111.8m, compared to the EUR 142.1m/145.0m
   Evli/cons. estimates. Top line grew by 63% y/y.
 * Available Seat Kilometers grew 312% y/y in Q2, while Revenue Passenger
   Kilometers increased by 281%. Passenger Load Factor was thus 30.6% and
   decreased by 2.4pp y/y. Cargo tonnes grew by 101% y/y and 8% q/q.
 * Q2 adjusted EBIT was EUR -151.3m vs the EUR -143.9m/-144.2m Evli/cons.
   estimates. Q2 comparable EBITDA was EUR -70.0m vs the EUR -58.9m/-58.0m
   Evli/cons. estimates.
 * Fuel costs were EUR 31m vs our EUR 38m expectation. Meanwhile staff costs
   amounted to EUR 54m, compared to our EUR 55m projection. All other OPEX+D&A
   combined were EUR 186m vs our EUR 205m estimate.
 * Cost per Available Seat Kilometer was 18.55 eurocents, compared to our
   estimate of 20.09 eurocents.
 * Finnair expects Q3’21 operating loss to be of similar magnitude compared to
   the previous quarters despite gradual increase in revenue (we had estimated
   EUR -91m Q3 EBIT). Finnair estimates monthly operating cash flow to turn
   positive by the end of this year.
 * Finnair now targets EUR 200m (prev. EUR 170m) in permanent cost savings by
   2022 based on 2019 operational volumes. Some EUR 125m are volume-driven and
   EUR 75m are fixed costs.

Open report


RAUTE - PROFITABILITY GAINS GOING FORWARD

14.07.2021 - 09.35 | Preview

Raute’s environment has improved faster than we expected, as seen in the recent
signing of two large orders. We don’t expect the ongoing year to be that great,
but from here on profitability gains appear inevitable. In our view FY ‘22
results could already touch the previous record levels.

Read more

EUR 46m in larger disclosed orders set the stage for FY ‘22

Raute has disclosed two new orders over the past couple of months, in total some
EUR 46m worth of business for FY ’22. Raute knows both customers well. The EUR
30m Lithuanian LVL mill order will be delivered before the end of Q3’22. The
delivery schedule looks much the same for the EUR 16m Russian order. The
projects didn’t arrive as a complete surprise since we had already expected
meaningful improvement in H2’21 orders, however we now see solid profitability
potential for FY ’22 and beyond. We do not expect Q2’21 to have been that great
yet, what with EUR 36m in revenue and EUR 1.6m EBIT, but we see profitability
can only improve from the recent lows.

We expect about EUR 160m top line for next year

The new orders will not affect Raute’s FY ’21 results. The previous guidance,
according to which both top line and operating profit will improve, remains
valid. We have made only minor revisions to our FY ’21 profitability estimates.
In our opinion annual operating profit will still not be great this year as
revenue stays at a somewhat modest level while pandemic restrictions also remain
a nuisance. The business is, for now, reliant on a large Russian order and the
associated low margin profile limits profitability. We believe, however, that
Raute is set to top EUR 10m in EBIT once again next year as the recent negative
factors will remain no more. We revise our FY ’22 revenue estimate from EUR 141m
to EUR 159m, while our respective EBIT margin estimate increases from 5.6% to
7.0%. We thus see Raute reaching EUR 11m in EBIT, a figure close to that of FY
’17.

Multiples turn attractive with EBIT north of EUR 10m

Our EUR 160m revenue estimate and corresponding 7% EBIT margin imply EBIT in the
EUR 11-12m range, which translates to around 7x EV/EBITDA and 9x EV/EBIT
multiples for FY ’22-23. We also note Raute reached EUR 15m EBIT in FY ’18,
although that level would be difficult to pull off in a steady fashion. Our TP
is now EUR 26.5 (21). Our new rating is BUY (HOLD).

Open report


VERKKOKAUPPA.COM - PLENTY OF UPSIDE POTENTIAL REMAINS

13.07.2021 - 09.30 | Preview

Verkkokauppa.com reports Q2 results on Fri, Jul 16. We leave our estimates
unchanged ahead of the report and continue to view current valuation levels
attractive.

Read more

Q1 met expectations, FY ‘21 growth seen around 7-8%

Verkkokauppa.com had a strong Q1. Top line grew by 7% y/y, in line with
estimates, and was driven by many product categories. Online sales grew by 33%
while B2B sales advanced by 12%. Gross margin amounted to a strong 16.2% (a bit
above our 15.9% estimate), driven by good contribution from higher margin
categories. The company thus achieved a small profitability beat with its EUR
5.2m adj. EBIT (3.9% margin), compared to the EUR 5.0m/4.8m Evli/cons.
estimates. We made only minor revisions to our Q2 estimates following the Q1
report and we leave our estimates unchanged for now. We expect Verkkokauppa.com
to post EUR 130m in Q2 revenue (5.5% y/y growth) and EUR 4.6m in EBIT (3.6%
margin).

Strategy is ambitious, but initial moves have been laid out

Verkkokauppa.com reiterated its FY ’21 guidance in connection with the Q1
report. The company guides EUR 570-620m top line and EUR 20-26m adj. EBIT. Our
EUR 594m revenue estimate touches the midpoint and thus we see the company
reaching above 7% growth this year. Our EUR 24m EBIT estimate (4% margin) is a
bit above the respective midpoint. The company has also announced a EUR 4m
investment in fully automated small item warehouse in Jätkäsaari, Helsinki. In
our opinion the plan seems a relatively low risk and efficient way to help
organic expansion. We expect Verkkokauppa.com will continue to grow at a high
single-digit rate for years to come, however the company’s own very ambitious
target is to achieve EUR 1bn top line and 5% EBIT margin by ’25.

12-15x EV/EBIT for FY ’21-23 isn’t high given the potential

Verkkokauppa.com trades ca. 15x EV/EBIT on our FY ’21 estimates. This level
represents a 25% discount compared to the Nordic & European online peer group.
The 14x EV/EBIT level on our FY ’22 estimates however turns into a 10% peer
premium and reflects the fact that we have taken a conservative approach to our
long-term estimates. We view the overall valuation picture undemanding given the
company’s growth potential. We retain our EUR 10.8 TP and BUY rating.

Open report


FINNAIR - LONG BUMPY RUNWAY AHEAD

12.07.2021 - 09.30 | Preview

Finnair reports Q2 results on Jul 15. Capacity is being scaled up while
passenger numbers have bottomed out, but there’s a lot of uncertainty with
regards to a meaningful recovery. The rebound will arrive in the years to come,
however in our view valuation doesn’t leave much upside. Our TP is now EUR 0.7
(0.75); we retain our HOLD rating.

Read more

Recovery may materialize somewhat slower than expected

Finnair’s Q2’21 passenger figures show strong recovery relative to the
exceptional halt witnessed in Q2’20, but in the big picture the volumes remained
very modest. International volumes increased towards the quarter’s end, however
they remained at only around 5% of those seen in e.g. Q2’19 (in terms of RPK).
Western passenger flows may pick up further in Q3, but strategically important
Asian flights will in our view have to wait at least until Q4’21, if not even
beyond that. Slow Asian vaccination rates may not matter that much because the
delta variant now seems to act as an additional speed bump on the path to
recovery. In our view Finnair’s EBIT is likely to remain in the red until the
end of this year. It’s unclear how quick the pent-up passenger flight demand
will materialize, but airlines are unlikely to return to normal before next
year. We don’t expect Finnair to see pre-pandemic EBIT levels before the year
2023.

We make some downgrades to our long-term estimates

Finnair’s Q2 passenger numbers were somewhat below our expectations as the
pandemic situation has proved very resilient. Cargo volumes, nonetheless, were
higher than we estimated. We thus make only small revisions to our Q2 estimates.
We expect EUR 142m in revenue and EUR 144m in operating losses. We revise our
long-term estimates down a bit due to the continued uncertainty that stems from
the latest pandemic updates. We also note jet fuel spot prices increased another
13% q/q in Q2.

Valuation recognizes Finnair’s long-term potential

In our opinion Finnair continues to hold a solid long-term strategic position as
an airline that connects Europe with Northeast Asia. This seems well recognized
as current valuation is not cheap. Finnair trades ca. 15x EV/EBIT on our FY ’22
estimates. We believe Finnair’s EBIT has plenty of room to improve beyond that,
however the pandemic is unlikely to alter the inherent competitive nature of the
airline industry.

Open report


ENERSENSE - GROWTH STRATEGY PROCEEDS

22.06.2021 - 15.40 | Company update

Enersense completed its directed share issue and thus raised some EUR 16m in
gross proceeds. The company is looking into some growth initiatives that would
deploy the capital. These could involve organic growth prospects but in our
opinion M&A is also high on the agenda. We have made small adjustments to our
estimates. Our TP is now EUR 13 (11) and we retain our BUY rating.

Read more

Current markets offer both organic and M&A potential

Enersense already had a healthy balance sheet with a positive net cash position
and there wasn’t any acute pressing need to raise additional cash. The company
had some EUR 23m in cash at the end of Q1. This suggests there will now be close
to EUR 40m in available funds plus possible additional debt facilities. In our
opinion such an amount could enable Enersense to acquire targets with around EUR
100m in revenue, considering the relatively low EV/S multiples seen across the
relevant sectors. At this point it remains unclear which segment Enersense might
be looking to bolster. In our view Enersense has wide M&A opportunities in both
Finland and abroad. The Finnish Power market is currently driven by e.g. wind
power investments, while 5G will remain a major driver for Connectivity for
years to come. Enersense is already a big Finnish player in these two related
construction and maintenance markets, and there remain some smaller service
suppliers the company might be contemplating to acquire. The Finnish smart
industry market, by contrast, represents a much wider opportunity set, not to
mention the potential overseas scope.

Long-term financial target amounts to EUR 30m in EBITDA

We make small adjustments to our estimates following the transaction. We
understand Empower synergies continue to materialize well and we see the company
is on track to reach annual EUR 20m run-rate EBITDA in the near-term, while the
long-term target implies EUR 30m.

Valuation remains undemanding relative to potential

Enersense still trades at modest multiples, and the ca. 6x EV/EBITDA and 11x
EV/EBIT on our estimates for next year represent meaningful discounts compared
to peers. Our new TP is EUR 13 (11) and we retain our BUY rating.

Open report


CONSTI - UNFORTUNATE ONE-OFF EARNINGS HIT

15.06.2021 - 09.15 | Company update

The arbitration proceedings relating to the Hotel St. George project
unfortunately came to a for Consti unfavourable conclusion. As a result, Consti
lowered its 2021 operating result estimate to EUR 4-8m (EUR 7-11m). Our 2021
estimate is now EUR 5.7m (EUR 8.7m), TP of EUR 13.0 and HOLD-rating intact.

Read more

Arbitration proceedings to an end
The arbitration proceedings between Consti’s subsidiary Consti
Korjausrakentaminen Oy and Kiinteistö Oy Yrjönkatu 13 relating to the Hotel St.
George construction project came to a conclusion. Compensations amounted to EUR
0.7m for the former and EUR 0.9m for the latter, along with penalty interest.
The net receivable related to the project in Consti’s balance sheet was
approximately EUR 3m at the end of Q1/2021. Costs relating to the arbitral award
will be recorded in Consti’s Q2/2021 results. The positive impact on cash flow
is approximately EUR 2m. As a result of the arbitral award Consti lowered its
operating result estimate range for 2021 to EUR 4-8m from the previous 7-11m.

Operating result estimate for 2021 down by EUR 3m
With the net compensation close to even the impact on the operating result will
be around EUR 3m due to the cancellation of receivables in Consti’s balance
sheet. The income statement will be partly effected through revenue and partly
costs and we have revised our Q2/2021 estimate for revenue and operating result
to EUR 68.5m (EUR 70.5m) and EUR -0.4m (EUR 2.6m). Our revisions solely reflect
the outcome of the arbitration proceedings, as operational performance appears
to have remained in line with expectations. The outcome, although unfortunate,
is essentially a one-off item and ultimately did have a positive cash flow
impact.

HOLD with a target price of EUR 13.0
We make no adjustments to our target price or rating based on the outcome of the
arbitration proceedings due to the one-off nature. Our target price of EUR 13.0
values Consti at 16.6x 2021 P/E (excl. arbitration proceedings items).

Open report


SCANFIL - ORGANIC GROWTH JUSTIFIES MULTIPLES

14.06.2021 - 09.20 | Company update

Scanfil upped guidance as demand remains strong and component supply risks
haven’t materialized. The upgrade isn’t a big surprise, but in our view supports
the long-term story. Our new TP is EUR 9.0 (8.5), rating now BUY (HOLD).

Read more

Not a big surprise, but hints at extended strong demand

Scanfil upgraded its FY ’21 guidance. The revision wasn’t a big surprise since
in our view Scanfil already seemed, following the Q1 report, bound towards the
upper end of its then current guidance range. The revenue midpoint increases by
5.6% with the upgrade. Our old EUR 630m revenue estimate lands at the lower
bound of the new EUR 630-680m range. We revise our estimate up by 2.5% to EUR
646m. Our old EUR 41.7m adj. EBIT estimate can be seen in the context of the new
EUR 41-46m range. Our new estimate is EUR 43.2m. In our opinion the new
outlook’s key meaning is in the fact that it lends long-term estimates even more
relevance. Our absolute EBIT estimates for FY ’22-23 increase by only ca. EUR
1m, but in our view Scanfil’s outlook now warrants some additional expansion in
multiples.

We see organic CAGR outlook has moved to 7% from 5%

Scanfil’s long-term organic growth target, which implies ca. 5% CAGR by the end
of FY ’23, has gained relevance ever since last fall. Scanfil has an unblemished
operational track record, its segments’ outlooks are either good or great, and
macro tailwinds continue to push many industrial sectors. From this perspective
Scanfil should have no trouble reaching EUR 700m top line in FY ’23. The updated
FY ’21 guidance range’s midpoint implies 10% growth for this year. We consider
this a bumper year for Scanfil and the situation is not unlike that for many
other companies operating within the industrial manufacturing value chain. We
would not extrapolate such growth rates very long into the future, but
nonetheless the general outlook suggests Scanfil is positioned for around 7%
CAGR in the years to come.

In our view some further multiple expansion is justified

Scanfil’s 8.5x EV/EBITDA and 11.5x EV/EBIT multiples, on our FY ’21 estimates,
are high in the historical context, but growth outlook warrants looking further
into the future. The multiples decrease to ca. 8x and 10.5x already next year.
In our view Scanfil’s performance and positioning also warrant a peer premium.
Our new TP is EUR 9.0 (8.5), rating now BUY (HOLD).

Open report


NETUM - INITIATE COVERAGE WITH HOLD

08.06.2021 - 09.00 | Company report

Netum is a Finland-based strongly growing and profitable IT services company
with over 20 years of experience of demanding IT projects. The company seeks to
grow sales to EUR 30m by 2023 (20% p.a. implied) while maintaining an EBITDA
margin of above 15%. We initiate coverage with HOLD and a target price of EUR
4.4, valuing Netum at approx. 18.4x 2021e adj. P/E.

Read more

Strong track record of profitable growth
Netum has been growing strongly in the past years, through both organic growth
and M&A, with a CAGR of 22% in 2016-2020. Strong growth has been coupled with
high margins as the average EBITA and EBIT margins between 2016-2020 have been
16.7% and 11.4% respectively. Both growth and profitability have been above the
average level of Finnish competitors.

Proceeds from the IPO will be used to accelerate growth
Netum aims to grow rapidly organically and according to its financial targets,
the company aims to achieve net sales of EUR 30m in 2023, which corresponds to
20% annual organic growth. In addition to organic growth, the company is
actively looking for opportunities for inorganic growth and seeks to grow
through selective acquisitions, aided by funds raised in the recently completed
IPO. A core part of Netum’s strategy is to continue to achieve a good level or
profitability while growing, and the target is to achieve an EBITDA margin of at
least 15%.

HOLD with a target price of EUR 4.4
We initiate coverage of Netum with a HOLD-rating and target price of EUR 4.4.
The share price rose clearly after the IPO and current valuation multiples are
rather in line with the Finnish peers. In our view, Netum’s strong track record
of growth, relatively high net sales/employee ratio and above-average
profitability could even warrant a premium to our peer group. On the other hand,
Netum’s smaller size, competition for skilled employees, concentrated customer
base, and intensifying competition are factors to be taken into consideration
when looking at valuation.

Open report


MARIMEKKO - 70 YEARS OLD AND STILL IN FASHION

21.05.2021 - 09.45 | Company update

Marimekko showed its strengths once again and delivered very strong Q1 figures.
Development was good internationally but also in Finland. Adj. EBIT was clearly
above expectations at EUR 5.6m. We have increased our FY21E-23E estimates and
keep our rating “BUY” with TP of EUR 63 (58.2).

Read more

Clear estimates beat in Q1

Marimekko delivered a very strong Q1 result. Net sales increased by 17% y/y to
EUR 29.1m vs. EUR 27.7m/27.6m Evli/cons. Sales were boosted by good wholesale
sales development in APAC region, Finland and Scandinavia as well as increased
licensing income in EMEA. Net sales in Finland amounted EUR 14.5m (7% y/y) vs.
our EUR 14.0m and international sales were EUR 14.6m (29% y/y) vs. our EUR
13.7m. The continuing pandemic situation continued to hamper customer flows in
stores, but retail sales were supported by good growth in online sales.
Marimekko’s adj. EBIT was 130-140% above expectations at EUR 5.6m. Profitability
was supported by increased net sales, improved relative sales margin and reduced
fixed costs. EPS was EUR 0.55 vs. EUR 0.21/0.18 Evli/cons.

Aiming to accelerate international growth

Marimekko has constantly been able to deliver solid results, even during times
like this. The company has a strong positioning in Finland, but its brand
awareness has increased internationally as well which was shown also in Q1
figures. Marimekko plans to accelerate its long-term international growth in
2021 and to invest especially in digital business, seamless omnichannel customer
experience, sustainability and brand awareness. This year, the company turns 70
years old, and this should increase brand visibility even more. Despite the
strong performance in Q1, we expect a peak in sales once the vaccination
coverage increases and restrictions are being lifted. Even though Marimekko had
an excellent start of the year, the company indicated that majority of its net
sales and earnings will be generated during H2’21E.

“BUY” with TP of EUR 63 (58.2)

Marimekko expects 2021E adj. EBIT margin to be approx. on a par with last year
or higher. Net sales are expected to increase from last year. We expect revenue
growth of 12% in 21E and 8% in 22E and adj. EBIT margins of 16.7% and 17.0%. On
our estimates, the company trades with 21E-22E EV/EBIT multiple of 19.9x and
17.9x which is 40-50% discount compared to the luxury peers. We keep our rating
“BUY” with TP of EUR 63 (58.2).

Open report


ENDOMINES - UPGRADE TO BUY

21.05.2021 - 09.15 | Company update

No major surprises were seen in Endomines Q1 results and operations startup
appears to be progressing according to plans. We raise our target price to EUR
2.9 (2.7) and upgrade our rating to BUY (HOLD).

Read more

No major surprises in figures
Endomines revenue was as expected insignificant (Act/Evli SEK 0.1m/0.0m), as
operations were still at a halt. Costs were somewhat higher than expected and
EBITDA of SEK -14.5m lower than our estimate (Evli SEK-11.0m). Focus during the
year has so far been on ramp-up of operations and strengthening the organization
through key recruitments. To our understanding the startup of operations has
proceeded quite according to plans and the issues with the tailings dewatering
system at the Orogrande processing facility have reportedly been addressed.

2021 production guidance 3,000-4,000oz
Endomines gave a production guidance for 3,000-4,000oz during 2021, above our
previous estimate of 2,869oz. Our revised estimate puts production at 3,061oz,
not yet including estimates for Pampalo, which given the likely startup in late
2021 and the low-grade development ore should be quite limited. With the mill at
Friday seen to reach full capacity by year end the production figures are
expected to pick up clearly in 2022. Cash flow from operations was at SEK -63.0m
but around half of it was due to transactions relating to the US Grant and
Kearsarge projects. Liquid assets stood at SEK 68.0m. The financing package with
LDA Capital (subject to AGM approval) could bring a further EUR 14m, which
should cover financing needs until sufficient own cash flows are achieved.

BUY (HOLD) with a TP of SEK 2.9 (2.7)
We have not made larger changes to our estimates or SOTP model apart from the
slightly increased production figures for 2021. With the anticipated lower
financial risk from the LDA Capital financing package (not yet included in our
estimates) and favourable gold price development we adjust our target price to
SEK 2.9 (2.7) and upgrade our rating to BUY (HOLD), noting however the
significant risks relating to junior gold miners.

Open report


MARIMEKKO - CLEAR ESTIMATES BEAT

20.05.2021 - 08.50 | Earnings Flash

Marimekko’s Q1 result was very strong and it clearly outpaced the expectations.
Net sales increased by 17% and were EUR 29.1m vs. EUR 27.7m/27.6m Evli/cons.
Sales were driven by good wholesale sales development in APAC region, Finland
and Scandinavia as well as increased licensing income in EMEA. Adj. EBIT was EUR
5.6m vs. EUR 2.4m/2.3m Evli/cons.

Read more

 * Finland: revenue was EUR 14.5m vs. EUR 14.0m Evli view. Revenue increased by
   7% y/y and was driven by good wholesale sales development. Nonrecurring
   promotional deliveries in particular contributed to an increase in wholesale
   sales in Finland.
 * International: revenue increased by 29% y/y and was EUR 14.6m vs. EUR 13.7m
   Evli view. Sales were driven by good wholesale sales development in APAC
   region and Scandinavia as well as increased licensing income in EMEA. Sales
   growth in APAC region was partly due to the transfer of some of the wholesale
   deliveries for Q4’20 to Q1’21.
 * Q1 adj. EBIT was clearly above expectations at EUR 5.6m (19.3% margin) vs.
   EUR 2.4m/2.3m (8.7%/8.3% margin) Evli/cons. Profitability was boosted by
   increased sales, improved relative sales margin as well as reduced fixed
   costs.
 * Q1 adj. EPS was EUR 0.55 vs. EUR 0.21/0.18 Evli/cons.
 * 2021E guidance: net sales are expected to increase from last year. Adj. EBIT
   margin is expected to be approx. on a par with last year or higher.

Open report


MARIMEKKO - IMPROVED OUTLOOK

17.05.2021 - 09.45 | Preview

Marimekko upgraded its 21E earnings guidance last week as sales outlook for the
full year has improved. The company said that Q1 has been very strong. We have
increased our 21E adj. EBIT estimate by ~9% and keep our rating “BUY” with TP of
EUR 58.2 (57). Marimekko reports its Q1 result on this week’s Thursday.

Read more

Upgraded guidance due to improved sales outlook

Marimekko upgraded its 21E earnings guidance last week. The company now expects
21E adj. EBIT margin to be similar compared to last year (2020: 16.3%) or
higher. Sales guidance remains unchanged and the company expects 21E sales to be
higher than last year. Based on the earlier guidance given in February, the
company expected 21E adj. EBIT margin to be in line with the company’s long-term
target of 15%. According to Marimekko, the upgrade is due, in particular, to
improved sales outlook for the full year, supported by a very strong Q1’21.
Despite the strong figures in Q1, the company still estimates that the major
portion of net sales and earnings are generated during H2’21 due to the
seasonality of Marimekko’s business.

We have increased our 21E adj. EBIT estimate by ~9%

We would have hoped more detailed information about the improved sales outlook,
but we expect to get more color on this during the Q1 result. Earlier, we
expected 21E sales growth of 9.5% y/y and adj. EBIT margin of 15.2% (EUR 20.5m).
As a result of the guidance upgrade, we have increased our estimates, especially
our Q1’21E estimates. We increased our Q1E sales expectation by ~2% and expect
sales of EUR 28m while we have more than doubled our adj. EBIT expectation. We
now expect Q1’21E adj. EBIT of EUR 2.4m (8.7% margin). We have increased our
FY21E adj. EBIT estimate by ~9% and we expect it to be EUR 22.4m (16.5% margin)
while we expect sales growth of ~10% y/y.

“BUY” with TP of EUR 58.2 (57)

Marimekko reports its Q1 result on this week’s Thursday, 20th of May. On our
estimates, the company trades with 21E-22E EV/EBIT multiple of 19.0x and 17.1x
which is ~50% discount compared to the luxury peers. We keep “BUY” with TP of
EUR 58.2 (57) ahead the Q1 result.

Open report


CIBUS NORDIC - DIGESTING PREMIUM TO BOOK VALUE

14.05.2021 - 09.25 | Company update

Cibus’ portfolio continued to perform as expected. Nordic daily-goods properties
remain valued at attractive levels, which in our view highlights the underlying
assets’ illiquid and idiosyncratic nature. Our new TP is SEK 175 (170).

Read more

Q1 was uneventful like so many other quarters

Cibus’ EUR 18.2m Q1 net rental income was in line with our EUR 18.1m estimate.
Admin costs were EUR 1.7m (vs our EUR 1.3m estimate) as some EUR 0.1m related to
the Nasdaq Stockholm main list transfer added to costs, in addition to certain
seasonal variation. Net financial costs were only EUR 4.9m, compared to our EUR
5.4m estimate, as there was a EUR 0.5m FX gain. Net operating income, at EUR
11.6m, was therefore a bit above our EUR 11.4m estimate. Q1 was not unlike all
other Cibus quarters despite the pandemic and somewhat extraordinary economic
developments. Cibus also didn’t close new acquisitions in Q1.

Relatively few buyers help maintain the markets cool

Cibus has made a couple of small acquisitions after Q1. The four properties
(three ICA and one Tokmanni) amounted to a total purchase price of EUR 8.7m. We
assume a 6% yield and thus update our estimates accordingly. We understand
Cibus’ acquisition pipeline remains plentiful beyond these few small deals.
Cibus will have no problem financing even larger portfolio acquisitions as
credit is available through various channels and equity can be accessed with a
directed share issue (an exercise completed twice last year) or by a hybrid
bond. Cibus also continues to act with restraint and is wary of paying a lot
more than the levels it has gotten used to in the past few years.

1.2x EV/GAV begins to beg some underlying asset inflation

There has been no marked heating in the Nordic daily-goods property markets; the
Swedish market shows some modest yield compression while Finland has remained
much the same. We wouldn’t be surprised to see some acceleration in yield
compression over the year, but in our view Cibus’ valuation already reflects
such expectations to an extent. Cibus is valued almost 1.2x EV/GAV and 1.5x
P/NAV, and in our opinion the levels don’t leave further upside even though
Cibus’ absolute yield remains competitive relative to other listed Nordic
properties. We update our TP to SEK 175 (170) as Swedish yield compression still
provides additional minor support for Cibus’ valuation.

Open report


CIBUS NORDIC - ADDITIONAL ACQUISITIONS TO COME

12.05.2021 - 09.30 | Earnings Flash

Cibus’ Q1 was quiet in terms of completed acquisitions but preparations
continued for the Nasdaq Stockholm main list move as well as the long pipeline
of potential property purchases. Meanwhile Cibus’ property portfolio performed
according to expectations.

Read more

 * Cibus’ Q1 rental income amounted to EUR 19.4m vs our EUR 19.1m estimate.
 * Net rental income was EUR 18.2m, compared to our EUR 18.1m estimate.
 * Operating income was EUR 16.5m while we estimated EUR 16.8m. Administration
   expenses were a bit higher than we estimated.
 * Net operating income stood at EUR 11.6m vs our EUR 11.4m estimate. Net
   financial costs were a bit lower than we estimated.
 * Annual net rental income capacity now amounts to EUR 72.6m.
 * The portfolio was valued at EUR 1,270m, translating to an EPRA NAV of EUR
   12.2 (12.1) per share.
 * Net LTV ratio was 61.6% (61.3%).
 * Occupancy rate was 94.7% (95.6%).
 * WAULT amounted to 5.2 years at the end of Q1.

Open report


ENERSENSE - UPDATED ESTIMATES DUE TO TRANSITION TO IFRS REPORTING

11.05.2021 - 09.25 | Company update

On Thursday, Enersense announced the transition to IFRS reporting and new
guidance. Enersense expects net sales to amount to EUR 215-245m, adj. EBITDA of
EUR 17-20m, and adj. EBIT of EUR 8-11m in 2021. We have updated our estimates in
accordance with IFRS reporting and retain our TP of EUR 11 and BUY-rating.

Read more

Staff Leasing segment will be discontinued
Enersense announced the transition to IFRS reporting and published consolidated
financial statements for 2020 and 2019. With the transition, the company updated
its guidance and expects net sales to amount to EUR 215-245m, adj. EBITDA of EUR
17-20m, and adj. EBIT of EUR 8-11m in 2021. Enersense also announced that it has
agreed to sell the entire share capital of its subsidiary Värväämö Oy to
Citywork Oy. Staff Leasing segment will be discontinued and it will be reported
as part of Smart Industry. Thus, the company will report its revenue in the
future based on four segments; Power, Smart Industry, Connectivity, and
International Operations.

We expect net sales of EUR 235.1m, adj. EBITDA of EUR 18.8m and adj. EBIT of EUR
10.4m in 2021E
We have adjusted our estimates with the transition to IFRS. Due to the
divestment of Värväämö, we have decreased our net sales estimate for 2021E to
EUR 235.1 million (prev. EUR 242m). Our growth estimates of 4.6% and 3.9% for
2022E-23E are unchanged. In 2021E, we expect adj. EBITDA of EUR 18.8m (8%
margin) and adj. EBIT of EUR 10.4m (4.4% margin), respectively. We note that
Enersense has not provided IFRS figures for Q1/21 and Q1/21 figures below are
our estimates.

No changes to our recommendation
Based on our updated estimates, we have not made changes to our recommendation.
We retain our TP of EUR 11 and BUY-rating.

Open report


PIHLAJALINNA - HIGH HOPES FOR H2

10.05.2021 - 08.55 | Company update

Pihlajalinna - High hopes for H2 Equity Research Read full report here →
Pihlajalinna’s Q1 result outpaced the expectations. Revenue increased by ~5% and
adj. EBIT by ~59% y/y. We have slightly increased our 21E estimates and keep our
rating “BUY” with TP of EUR 13.2 (13.0).

Read more

Q1 earnings outpaced expectations

Pihlajalinna’s Q1 result outpaced the expectations. Revenue increased by 5.2%
y/y to EUR 140m which was in line with the Factset consensus estimates but above
our EUR 137m. Revenue was once again supported by COVID-19 testing (revenue
increase of EUR 8.2m). Testing volumes increased by 65% q/q. On the other hand,
customer volumes of private clinics remained in a lower level. Revenue of
corporate customer group increased by ~12% y/y while revenue of private
customers was down by ~10% y/y. Revenue of public sector customer group
increased by ~8% y/y. Adj. EBITDA amounted EUR 15.2m vs. EUR 14.4m/14.7m
Evli/cons. and adj. EBIT was EUR 6.7m vs. EUR 5.6m/6.1m Evli/cons. EPS improved
clearly to EUR 0.20 (Q1’20: EUR 0.06) vs. EUR 0.15/0.17 Evli/cons.

High hopes for H2’21

Pihlajalinna’s margin improvement in the private sector is right on track. The
company has successfully renewed its sales strategy, and this was shown in Q1
figures. In the public sector, Pihlajalinna transitioned from the outsourcing
market to the service sales market, in which the impact of the planned SOTE
reform is low. The virus situation worsened towards the end of the first quarter
and nearly all Pihlajalinna’s fitness centers were closed during April which
will continue to hamper private customer segment in Q2. The situation has since
improved and the vaccination coverage is gradually increasing. We expect the
situation to normalize during H2’21 and the pent-up demand starting to release
in late summer.

“BUY” with TP of EUR 13.2 (13.0)

Pihlajalinna reiterated its 2021 guidance and expects revenue and adj. EBIT to
increase clearly compared to 2020. We have increased our 21E adj. EBIT
expectation by ~7%. We expect 2021E revenue to grow by ~12% y/y and adj. EBIT of
EUR 30.7m (5.4% margin). In 22E-23E, we expect adj EBIT margins of 5.6%. On our
estimates, the company trades with 21E-22E EV/EBIT multiple of 16.8x and 13.5x
which is ~15-20% discount compared to the peers. We keep “BUY” with TP of EUR
13.2 (13.0).

Open report


PIHLAJALINNA - BETTER THAN EXPECTED

07.05.2021 - 08.45 | Earnings Flash

Pihlajalinna’s Q1 figures beat our estimates. Q1 revenue amounted EUR 140m
(+5.2%) vs. EUR 137m/140m Evli/cons, while adj. EBIT landed at EUR 6.7m vs. EUR
5.6m/6.1m Evli/cons estimates. COVID-19 testing volumes continued to grow during
Q1 but customer volumes of private clinics are still lagging behind.

Read more

 * Q1 revenue was EUR 140m vs. EUR 137m/140m Evli/cons estimates. Revenue
   increased by 5.2% y/y. COVID-19 testing volumes increased by 65% compared to
   the previous quarter. Customer volumes of private clinics were ~13% lower
   than in the comparison period.
 * Q1 adj. EBITDA was EUR 15.2m (10.9% margin) vs. EUR 14.4m/14.7m Evli/cons
   estimates.
 * Q1 adj. EBIT was EUR 6.7m (4.8% margin) vs. EUR 5.6m/6.1m Evli/cons
   estimates.
 * Q1 EPS was EUR 0.20 vs. EUR 0.15/0.17 Evli/cons.
 * The company reiterated its guidance and expects 2021 revenue to increase
   clearly and adj. EBIT to improve clearly compared to 2020.

Open report


ASPO - LONG-TERM EBIT POTENTIAL SOLIDIFIES

06.05.2021 - 09.15 | Company update

ESL and Telko extended recent quarters’ strong figures. In our view Aspo now
warrants more long-term valuation perspective. Our TP is EUR 10.5 (9.5), rating
BUY (HOLD).

Read more

Aspo already reached 6% long-term EBIT target in Q1

Aspo’s EUR 132m Q1 revenue was in line with estimates while the EUR 7.9m EBIT
represented a record high and topped the EUR 6.8m/6.2m Evli/cons. estimates. In
our view the positive surprise was for the most part due to ESL, but Telko also
once again reached a record high EBIT. ESL managed a record Q1 EBIT despite the
cold winter, which caused challenges especially for the smaller vessels. Cargo
volumes remained flat y/y while shipping freight rates increased for smaller and
larger vessels alike. Supply challenges in plastics and chemicals limited
Telko’s revenue prospects but contributed to sharp price increases and so helped
profitability (in addition to mix improvement). The pandemic continued to limit
foodservice as well as machinery potential and thus Leipurin’s profitability
remained muted.

Vague guidance for now but long-term potential remains

The vague guidance is warranted by the chaotic conditions in the raw materials
and logistics markets. Historically H2 has been the more profitable part of the
year but now the effect may be more muted. ESL’s demand continues to look good
for the summer months while high docking levels will have a negative effect on
Q2 and Q3 EBIT. We expect Telko to reach a 6% EBIT margin going forward (vs the
7.4% Q1 EBIT margin) as the environment begins to normalize. We are now more
confident towards ESL’s and Telko’s long-term profitability levels and see how
Aspo’s EUR 7.9m Q1 EBIT hints at some EUR 35m annual potential.

ESL’s peer multiples now undervalue the niche carrier

In our view Aspo’s SOTP valuation doesn’t fully reflect ESL’s FV as the dry bulk
carrier has a special value chain position compared to a typical peer. In
Telko’s case the situation is more nuanced as the peers are large global
players. It’s nonetheless clear Telko’s FV has risen a lot in the past few
years. Leipurin also has plenty of yet to be realized potential. We saw ESL’s EV
at ca. EUR 300m before the pandemic and view that figure still relevant.
Meanwhile Telko’s EV has increased from some EUR 150-175m to above EUR 200m. We
see Aspo’s EV now at around EUR 500m. Our TP is now EUR 10.5 (9.5), our new
rating is BUY (HOLD).

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ETTEPLAN - LOOKING BETTER AND BETTER

06.05.2021 - 09.15 | Company update

Etteplan reported better than expected Q1 figures and raised its sales and EBIT
guidance. The market situation has continued to develop favourably and Etteplan
is seen to move towards a new normal during the latter half of the year. We
adjust our TP to EUR 16.0 (13.9) and upgrade our rating to HOLD (SELL).

Read more

Better than expected start to the year
Etteplan reported better than expected Q1 figures. Revenue grew slightly y/y to
EUR 73.0m (EUR 71.1m/71.3m Evli/cons.) but decreased 4% organically. EBIT
amounted to EUR 6.6m, above our and consensus estimates (EUR 5.4m/5.5m
Evli/cons.), with the EBITA-% at 10.5% (co’s fin. target 10%). Demand across
Etteplan’s markets continued to develop favourably, with China unaffected by the
pandemic and hours sold up 121% y/y from the weak comparison period. With the
strong start to the year and confidence in continued improvement in the market
situation throughout the year Etteplan also raised its guidance for 2021,
expecting revenue of EUR 285-305m (280m-300m) and EBIT of EUR 25-28m (23-26m).

Moving towards a new normal
We have slightly raised our 2021 sales estimate to EUR 292.6m and our EBIT
estimate by approx. 7% to EUR 26.1m, mainly due to the stronger than expected
Q1. Margins in the past two quarters have been exceptionally good due to the
strict cost control and with operations shifting back towards a new normal cost
will be on the rise and we as such expect weaker margins y/y in H2. Organic
growth is still somewhat of a concern but with market conditions improving and
the company actively recruiting as well as having increased usage of
subcontracting, the already begun more positive trend should pick up.

HOLD (SELL) with a target price of EUR 16.0 (13.9)
Looking at the solid start of the year we have been too bearish on Etteplan and
the development of the overall market situation. This being said, we still see
limits in valuation upside with Etteplan already trading rather clearly above
peers. We adjust our target price to EUR 16.0 (13.9) and upgrade to HOLD (SELL).

Open report


ETTEPLAN - SOLID FIGURES AND GUIDANCE UPGRADE

05.05.2021 - 13.30 | Earnings Flash

Etteplan's net sales in Q1 amounted to EUR 73.0m, in line with our estimates and
consensus (EUR 71.1m/71.3m Evli/cons.). EBIT amounted to EUR 6.6m, above our
estimates and above consensus estimates (EUR 5.4m/5.5m Evli/cons.). Guidance
specified: Etteplan expects revenue to amount to EUR 285-305m (280-300m) and
operating profit (EBIT) to amount to EUR 25-28m (23-26m).

Read more

 * Net sales in Q1 were EUR 73.0m (EUR 71.3m in Q1/20), in line with our
   estimates and consensus estimates (EUR 71.1m/71.3m Evli/Cons.). Growth in Q1
   amounted to 2.3% y/y.
 * EBIT in Q1 amounted to EUR 6.6m (EUR 5.7m in Q1/20), above our estimates and
   consensus estimates (EUR 5.4m/5.5m Evli/cons.), at a margin of 9%.
 * EPS in Q1 amounted to EUR 0.21 (EUR 0.17 in Q1/20), above our estimates and
   consensus estimates (EUR 0.17/0.17 Evli/cons.).
 * Engineering Solutions net sales in Q1 were EUR 41.4m vs. EUR 40.7m Evli.
   EBITA in Q1 amounted to EUR 4.4m vs. EUR 3.8m Evli. The MSI-% in Q1 was 63%
   compared to 56% in Q1/20.
 * Software and Embedded Solutions net sales in Q1 were EUR 18.8m vs. EUR 17.8m
   Evli. EBITA in Q1 amounted to EUR 2.1m vs. EUR 1.6m Evli. The MSI-% in Q1 was
   51% compared to 53% in Q1/20.
 * Technical Documentation Solutions net sales in Q1 were EUR 12.5m vs. EUR
   12.4m Evli. EBITA in Q1 amounted to EUR 1.4m vs. EUR 1.1m Evli. The MSI-% in
   Q1 was 82% compared to 79% in Q1/20.
 * Guidance specified: Etteplan expects revenue to amount to EUR 285-305m
   (280m-300m) and operating profit (EBIT) to amount to EUR 25-28m (23-26m).

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ASPO - PROFITABILITY FAR ABOVE ESTIMATES

05.05.2021 - 10.30 | Earnings Flash

Aspo’s Q1 profitability was a clear positive surprise relative to estimates.
EBIT reached a record high and both ESL and Telko topped our expectations.

Read more

 * Aspo Q1 revenue was EUR 132.3m vs the EUR 131.3m/132.4m Evli/consensus
   estimates.
 * Aspo Q1 EBIT amounted to EUR 7.9m, compared to the EUR 6.8m/6.2m
   Evli/consensus estimates. Markets continued to improve during Q1.
 * ESL’s revenue was EUR 43.4m vs our EUR 41.6m estimate. EBIT amounted to EUR
   4.5m while we expected EUR 3.6m. The EBIT was the best such Q1 figure ever
   for ESL. Shipping freight rates have improved but development is hard to
   predict for the rest of the year.
 * Telko’s revenue stood at EUR 61.0m, compared to our EUR 64.3m estimate.
   Meanwhile EBIT was EUR 4.5m vs our EUR 3.9m expectation. Raw materials prices
   are expected to remain high at least for the next few months. Prices may
   begin their decline in H2’21, and a rapid decline would hurt Telko’s
   profitability.
 * Leipurin revenue was EUR 27.9m vs our EUR 25.3m estimate. EBIT amounted to
   EUR 0.3m while we estimated EUR 0.4m.
 * Other operations cost EUR 1.4m, compared to our EUR 1.1m estimate.
 * Aspo restates the previous guidance and expects FY ’21 operating profit to be
   higher than in FY ’20 (EUR 19.3m). The guidance didn’t seem that informative
   in February and now even less so. In our view, however, Aspo now appears
   poised to reach EUR 30m in EBIT this year.

Open report


ENERSENSE - GOOD START TO THE YEAR

05.05.2021 - 09.30 | Company update

Enersense reported a better-than-expected Q1 result and 9% increase in the order
backlog compared to the end of Q4/20. The company also announced that it has
concluded negotiations on a new financing package. We have made upward revisions
to our estimates and raise our TP to EUR 11 (9.7), BUY-rating intact.

Read more

Orders increased especially in Power and the Baltics
Enersense’s Q1 net sales and profitability beat our expectations. Net sales
amounted to EUR 52.4m (Evli EUR 44.5m) and adj. EBITDA was EUR 1.7m (Evli EUR
0.5m). Order backlog increased by 9% from EUR 292m at the end of 2020 to EUR
319m at the end of Q1. Orders increased especially in the Power segment and the
Baltics. Enersense also announced that it has concluded negotiations on a new
financing package, which will be used to develop operations and manage working
capital.

Our revised estimates are at the upper end of the guidance
Q1 is typically a challenging quarter for Enersense due to the weather
conditions, and revenue and profitability are expected to increase towards the
end of the year. The order backlog continued to grow rapidly in Q1 and according
to the management, the market outlook is very positive as demand is expected to
remain strong especially in Power and Smart Industry. Supported by increased
orders and good outlook, we have raised our 2021E net sales estimate to EUR 242m
(prev. EUR 230m). We have also made upward revisions to 2022-23E sales
estimates, and forecast 4.6% and 3.9% growth, respectively. We expect adj.
EBITDA to increase from EUR 8.9m to EUR 14.4m in 2021E. Both our net sales and
adj. EBITDA estimates are at the upper end of guidance for 2021 (net sales: EUR
215-245m, adj. EBITDA: EUR 12-15m).

BUY with a target price of EUR 11 (9.7)
On our estimates for 2022E, Enersense is trading at EV/EBITDA of 5.6x and adj.
P/E of 10.8x, which translate into discount of 23-30% to our peer group median.
Better-than-expected results in Q1, renegotiated short-term financing and
continued growth in the order backlog increase our confidence in the investment
case, and we raise our TP to EUR 11 (9.7), BUY-rating intact. Our TP values
Enersense at EV/EBITDA of 6.3x and adj. P/E of 12.3x for 2022E, which are still
at 13-21% discount to peer group, reflecting Enersense’s currently lower
profitability profile. If Enersense manages to increase net sales and improve
margins in line with the midterm financial targets, we see further upside
potential in valuation.

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ENERSENSE - STRONG Q1 BEAT OUR EXPECTATIONS

04.05.2021 - 12.30 | Earnings Flash

Enersense’s Q1 net sales and profitability beat our expectations. Net sales
amounted to EUR 52.4m (Evli EUR 44.5m) and adj. EBITDA was EUR 1.7m (Evli EUR
0.5m). Enersense also announced that it has concluded negotiations on a new
financing package.

Read more

 * Net sales in Q1 amounted to EUR 52.4m, beating our estimates (Evli EUR
   44.5m).
 * Adjusted EBITDA also exceeded our expectations and was EUR 1.7m (Evli EUR
   0.5m).
 * Order backlog at the end of the first quarter amounted to EUR 319m, growing
   by 9% from EUR 292m at the end of 2020.
 * Guidance reiterated: Enersense expects net sales to be EUR 215-245 million in
   2021. EBITDA excluding non-recurring costs related to integration is
   estimated to be EUR 12-15 million in 2021.
 * Enersense also announced that it has concluded negotiations on a new
   financing package. The company will replace the existing EUR 12.7 million
   short-term financing facilities with two senior loans, totaling EUR 12m. Each
   senior loan amounts to EUR 6m and will mature in 2026. Enersense also
   replaces a part of its previous bank guarantee facilities with the new bank
   guarantee facilities. Enersense has bank guarantee facilities totaling EUR
   36.9m and invoice financing facilities totaling EUR 41.5m.

Open report


FELLOW FINANCE - GROWTH PACE PICKING UP

04.05.2021 - 09.35 | Company update

Fellow Finance’s intermediated loan volumes have picked up nicely in past
months, supported by improved availability of financing and less aggressive
competition. We now expect growth of 18.1% in 2021. We raise our target price to
EUR 3.8 (2.8) and upgrade to BUY (HOLD).

Read more

Favourable loan volume development
Fellow Finance has been seeing intermediated loan volumes developing favourably
since the second half of 2020, with the growth pace having picked up clearly in
recent months. The average monthly volumes in March-April were up close to 100%
compared to the volume seen during the early stages of the pandemic. The
increase in volumes has to our understanding been largely due to an increased
availability of financing and an increase in institutional investor volumes.
Within consumer loans the competition also appears to have eased and the
competitiveness of Fellow Finance’s offering improved as the more aggressive
competitors have taken less aggressive approaches.

Growth seen to pick up to double digits
We have raised our 2021 intermediated loan volume estimate to EUR 186m (prev.
160m), for a 40% y/y growth, and our sales growth estimate to 18.1% (prev.
7.5%). Our profitability estimates remain mostly intact, with the company having
estimated for growth projects to keep net earnings slightly negative, which is
looking to materialize for instance through the expansion to credit card
solutions in cooperation with Enfuce.

BUY (HOLD) with a target price of EUR 3.8 (2.8)
Current valuation puts the intermediation business 2021e EV/Sales at ~1.3x
(assuming Lainaamo at BV). Near-term earnings multiples are challenging but with
growth picking up, shifting the 2023 targets (sales ~EUR 23m and 15%
EBIT-margin) more within grasp, we still see a higher valuation being justified.
We raise our target price to EUR 3.8 (prev. 2.8) and upgrade our rating to BUY
(HOLD).

Open report


EXEL COMPOSITES - MULTIPLES ARE RERATING

03.05.2021 - 09.40 | Company update

Exel’s record Q1 orders surprised. In our view the next quarters’ orders
determine how much forward-look the multiples warrant. Our TP is EUR 11, now
rate HOLD (BUY).

Read more

The EUR 42m order intake sets a new benchmark level

Exel’s Q1 revenue grew 11% y/y to EUR 31m and was a bit above our EUR 30m
estimate. Customer industries performed close to our expectations while
Asia-Pacific contributed most of the growth. Adj. EBIT was EUR 2.5m vs our EUR
2.4m estimate. Strong demand was to be expected, yet the EUR 42m order intake
(up 22% y/y from a high comparison figure) is a record and can be compared to
the EUR 30m level Exel has averaged in the recent past. The orders stemmed from
many industries and no large orders drove the intake. Operations ran almost as
usual despite the pandemic, raw materials, and logistics issues. Exel managed to
balance its raw material pool across the eight plants.

Organic CAGR outlook now closer to 10% than 5%

Exel already saw some raw materials inflation affecting Q1 margins. We expect a
more pronounced negative effect in Q2 (we now estimate 7.2% Q2 EBIT vs our prev.
10.4% estimate), but also see EBIT margins bounce back to ca. 9-10% levels in
H2. Exel has been able to pass raw materials inflation forward before and this
is to be expected again considering the value chain position. Profitability
slope remains attractive especially if the Q1 order levels continue to persist
over the summer. We don’t consider the EUR 42m figure just a fluke and even if
Exel may not quite reach such high orders in the coming quarters we nevertheless
see the company is now positioned for high single-digit organic CAGR for years
to come. In our view Exel might well reach double-digit top line growth this
year and we see such growth rates driving long-term EBIT margins meaningfully
above 10%.

Earnings multiples have already rerated for a valid reason

Exel is valued ca. 9.5x EV/EBITDA and 15x EV/EBIT on our FY ’21 estimates. The
multiples are a bit high compared to the historical respective averages of 8x
and 13x but in our view warranted by the current growth prospects. Top line
growth continues to drive profitability and the multiples are some 8.5x and 12x
on our FY ’22 estimates. In our opinion the next few quarters’ orders will
determine how much forward into the future the multiples may lean. We retain our
EUR 11 TP, rating now HOLD (BUY).

 

Open report


CONSTI - ON A SLOW BUT STEADY TRACK FORWARD

03.05.2021 - 09.00 | Company update

Consti reported Q1 results slightly below our estimates, with EBIT below our
estimates driven by legal costs relating to the St. George arbitration
proceedings. We continue to expect minor growth and margin improvement in 2021.
We retain our HOLD-rating and target price of EUR 13.0.

Read more

Legal costs clearly affected profitability
Consti reported Q1 results that were slightly below our estimates. Revenue grew
slightly to EUR 59.3m (EUR 60.2m/60.2m Evli/cons.) while EBIT fell y/y to EUR
0.1m (EUR 0.5m/0.6m Evli/cons.). EBIT was affected by legal costs relating to
the St. George arbitration proceedings of EUR 0.4m (0.1m), without which
relative profitability would have been close to previous year levels. The
coronavirus pandemic also had an impact, with more worksite interruptions
despite a lower number of cases. Consti had a positive start to the year in
terms of order intake, with new orders of EUR 69.8m in the quarter, although the
order backlog was still down slightly y/y.

Expect minor growth and margin improvement
Apart from adjustments due to the lower than expected Q1 figures, we make no
changes to our estimates. The demand situation in general does not appear to
have shown clear improvements yet and was at a reasonable level in Q1. Consti
still sees that a higher share of the order backlog will be recognized during
the on-going financial year compared to the same time last year and as such we
continue to expect minor growth of 1.9%. We expect slight improvement in
relative profitability and a 2021 EBIT of EUR 8.7m.

HOLD with a target price of EUR 13.0
The Q1 report did not in any material way affect our view of Consti in the
near-term. Valuation in our view continues to appear fair given current limited
growth prospects and valuation upside drivers. With our estimates largely intact
we retain our HOLD-rating and target price of EUR 13.0.

Open report


PIHLAJALINNA - EXPECTING FAIRLY GOOD Q1 FIGURES

30.04.2021 - 09.50 | Preview

Pihlajalinna reports its Q1 report on next week’s Friday, 7th of May. Despite
the worsened COVID-19 situation during Q1, we expect fairly good quarterly
figures. We keep our rating “BUY” with TP of EUR 13.

Read more

We expect revenue to increase by 3%

We expect Pihlajalinna to report relatively good Q1 result, with sales growth of
3% y/y (EUR 137m). We expect the COVID-19 testing is once again boosting sales.
However, as the virus situation worsened towards the end of Q1 and new
restrictions came into force, we expect private demand is still in lower levels
than normally. As we saw at the end of last year, the company’s efficiency
improvement actions have paid off and we expect Q1’21E profitability to improve
from Q1’20. We foresee Q1 adj. EBIT of EUR 5.6m, resulting in adj. EBIT margin
of 4.1% (Q1’20: 3.2%).

Market drivers offer new opportunities

Pihlajalinna held its CMD in late March where it highlighted its strategic
priorities for the upcoming years as the market is changing in many ways. The
company aims to continue to strengthen its already strong partnership with the
public side and to engage in close cooperation with the future wellbeing
services counties. In addition, Pihlajalinna will make renewals to its private
services with new service concepts and digital innovation. Further, the company
will continue to strengthen digitalization. The market drivers have remained
unchanged (aging population, digital solutions, individuals’ interest in their
own health etc.) offering many new opportunities to Pihlajalinna.

“BUY” with TP of EUR 13

We have included the acquisition of Työterveys Virta to our estimates from
Q2’21E onwards. We expect 21E sales growth of ~11% (EUR 564m) and adj. EBIT of
28.8m (5.1% margin). We expect Pihlajalinna’s profitability to improve further
in 22E-23E and adj. EBIT margin of 5.6% in both years. With our estimates, the
company trades with 21E-22E EV/EBIT multiple of 17.8x and 13.4x which is 8-20%
discount compared to the peers. We keep our rating “BUY” with TP of EUR 13.

Open report


CAPMAN UPDATE - UPGRADE TO BUY

30.04.2021 - 09.50 | Company update

CapMan reported better than expected Q1 results. Q1 EBIT was clearly above our
estimates driven by investment returns. We have raised our 2021 EBIT estimate to
EUR 46.8m (prev. 38.2m). Improvement is being seen across the board but 2021
earnings look to be driven less by recurring profits and more by investment
returns and carry. We raise our TP to EUR 3.1 (2.7) and upgrade to BUY (HOLD).

Read more

Estimates beat on profitability figures
CapMan posted better than expected Q1 results. Revenue was slightly below
expectations at EUR 11.3m (EUR 12.5m/11.9m Evli/cons.) but the EBIT of EUR 10.1m
clearly beat expectations (EUR 7.8m/7.6m Evli/cons.). The EBIT beat was driven
by higher that expected fair value changes (EUR 8.2m/3.5m Act./Evli) while the
Management Company business EBIT was lower than expected (EUR2.5m/3.9m
Act./Evli). Capital under management stood at EUR 3.9bn, up 20% y/y. The Buyout
XI fund held a final close at EUR 190m, with a new Real Estate product of for
CapMan significant size in the pipeline.

Expect clear earnings improvement in 2021
CapMan’s development continues to look bright after the challenges faced in the
previous year. In terms of absolute profits, the Investment business has in the
near past been the clear driver, but good progress can be seen more or less
across the board. The performance of the own funds has during the start of the
year surpassed the collective return target. We have raised our 2021 operating
profit estimate to EUR 46.8m (prev. 38.2m), noting that some two-thirds consists
of the more unpredictable investment returns and carried interest.

BUY (HOLD) with a target price of EUR 3.1 (2.7)
Following adjustments to our estimates we raise our target price to EUR 3.1.
Compared with the Finnish peers the 2021e P/E is certainly not challenging, but
on our estimates a high share of the profit is from more uncertain sources and
thus remain somewhat on the cautious side.

Open report


EXEL COMPOSITES - PRETTY MUCH AS EXPECTED

30.04.2021 - 09.30 | Earnings Flash

Exel’s Q1 report was close to our expectations in terms of top line and
profitability. Order intake was very high. Exel also highlights the risk that
global raw materials challenges may hurt short-term profitability.

Read more

 * Exel Composites’ Q1 revenue amounted to EUR 31.0m vs our EUR 30.0m estimate.
   Top line thus grew by 11.3% y/y. Asia-Pacific drove growth (increased Wind
   power and Defense deliveries).
 * Wind power top line was EUR 7.4m, compared to our EUR 7.5m estimate.
   Meanwhile Buildings and infrastructure was EUR 7.0m vs our EUR 6.9m estimate.
 * Exel Q1 adj. EBIT was EUR 2.5m vs our EUR 2.4m estimate. Adjusted operating
   margin was 7.9%.
 * Q1 order intake amounted to EUR 42.0m and grew by 21.7% y/y. This is a very
   high figure and suggests, should similar momentum continue, upward revisions
   to full-year revenue and profitability estimates.
 * Exel retains the previously stated guidance and expects revenue as well as
   adjusted operating profit to increase in 2021 compared to 2020. In our view
   this is understandable, despite the high order intake, as it is still very
   early in the year.
 * According to Exel global raw material and logistics challenges have not so
   far had a significant impact on profitability. There is nevertheless an
   elevated risk that raw materials price inflation, as well as shortages, will
   have a short-term negative impact on profit margin.

Open report


VAISALA - A PERFECT STORM IN MANY WAYS

30.04.2021 - 09.00 | Company update

Vaisala’s Q1 result beat our and consensus expectations thanks to a better than
expected and solid performance in both BU’s. The improved market environment and
strong order book attributed to net sales growth and profitability improved
thanks to higher sales and lower OPEX level due to Covid-19. We have increased
our estimates for 2021-23E to reflect the expected market improvement. Based on
our renewed estimates and improved outlook, we raise our target price to €33
(prev. €32), our rating is now HOLD (prev. SELL).

Read more

Strong start to the year

Vaisala’s Q1 result beat our and consensus expectations thanks to solid
performance in both BU’s. Q1 net sales increased by 5% to 92 MEUR (86.5 Evli /
85.7 cons). Q1 EBIT came in at 8.1 MEUR (5.9 Evli / 5.0 cons), resulting in 8,8%
EBIT-margin (Q1’20: 5.2 MEUR, 6% EBIT-margin). Orders received grew by 18% to
106.1 MEUR (Q1’20: 88.7 MEUR). As a result of strong order intake, order book
was record high at 155.4 MEUR (Q1’20: 141.6 MEUR). IM continued its strong
performance; net sales grew 12% to 39.7 MEUR (39.5 MEUR Evli). IM EBIT was 9.4
MEUR (8.9 MEUR Evli), resulting in 23,8% EBIT-margin (Q1’20: 21,4%). IM net
sales growth was strong in life science and power industry market segments and
good in industrial instruments, but net sales declined in liquid measurements.
IM’s order intake growth was 22% coming from all market segments and boosted by
the economic recovery in China. W&E net sales increased by 1% to 52.2 MEUR (47
MEUR Evli). W&E EBIT was -0.9 MEUR (-2.6 MEUR Evli). W&E net sales grew in
renewable energy, ground transportation, and meteorology market segments, but
decreased in aviation, where market is still weak due to Covid-19. W&E’s orders
received grew nicely by 15%. W&E orders received increased in renewable energy
and ground transportation market segments, whereas meteorology market segment
was flat, and aviation decreased compared to previous year.

Outlook updated, more positive outlook upgrades likely to follow

As a result of strong start to the year, Vaisala raised the lower limits of its
business outlook for 2021; net sales are expected to be between 380–400 MEUR and
EBIT between of 35–45 MEUR (earlier net sales 370-400 and EBIT 30-45). The
outlook update did not come as a surprise given the strong orders received and
order book end of last year. We see further positive guidance improvements
likely given the strong order intake and order book, improving market
environment, and deliveries proceeding well.

Target price €33 (prev. €32) with HOLD rating

We have increased our net sales and EBIT estimates for 2021-23E to reflect the
expected market improvement. In 2021E, we expect +4,6 net sales growth driven by
+7% growth in IM, while we expect W&E growth to be around 3%. We expect EBIT of
44.6 MEUR (11,2 % margin), driven by good performance in IM. Both our net sales
and EBIT estimates are at guidance upper range. For 2022-23E we expect similar
net sales growth and Vaisala to achieve above 12% EBIT margins as IM continues
strong and W&E’s profitability improves. On our renewed estimates, Vaisala is
still trading at clear premiums compared to our peer group and we continue to
see valuation stretched given Vaisala’s weaker financial performance compared to
peer group. Based on our renewed estimates and improved outlook, we raise our
target price to €33 (prev. €32), our rating is now HOLD (prev. SELL). Our TP
values Vaisala at 22-23E EV/EBIT multiples of 22x and 21x which is above the
peer group, reflecting Vaisala’s technology leadership position, strong
sustainability profile, healthy dividend, and especially IM’s highly profitable
growth with possibility of further add-on acquisitions.

Open report


RAUTE - IMPROVING EARNINGS ARE IN THE CARDS

30.04.2021 - 08.50 | Company update

Raute’s environment is improving a bit faster than we expected, but FY ’21
profitability will still not be great. Valuation reflects earnings gains for
many years to come. In our view further upside appears elusive for now.

Read more

New capacity projects are yet to materialize

Raute’s Q1 order intake was EUR 30m, a 20% y/y increase and way above our EUR
22m estimate. There were no big orders. Project deliveries’ EUR 11m figure was
close to what we expected while the EUR 19m in services orders beat our EUR 12m
estimate due to high North American modernization orders. Pent-up US demand
drove the figure and thus we see cautious extrapolation is in order, but mills’
utilization rates are improving worldwide. Raute sees European demand to be at a
normal level. Russian order intake was muted in Q1 while demand potential
remains in place. Q1 revenue amounted to EUR 25m vs our EUR 34m estimate. Raute
foresaw Q1’s relative slowness. Pandemic restrictions also remain a nuisance.
The low top line also meant EBIT was EUR -2.5m, compared to our EUR 1.6m
estimate.

Orders are picking up, albeit from low levels

Raute also highlighted potential component shortages, however the company is
addressing the challenge and in our view the issue is not that meaningful given
Raute’s long-term story and overall competitive positioning. We make some
revisions to our estimates, however the overall valuation picture remains
unaltered. It’s clear Raute’s business is now picking up from the recent lows
and the favorable order intake development also begins to support FY ’22, for
which we now expect ca. 5% growth. It nevertheless seems the approximately EUR
160m revenue figure (of which some EUR 100m projects and EUR 60m services) that
helped Raute to achieve above EUR 10m EBIT in the past remains many years in the
future.

In our view valuation still doesn’t leave meaningful upside

The pick-up in orders turns us more confident towards next year. We expect Raute
to reach only some EUR 2m in EBIT this year, compared to the potential that is
many times the number. We estimate the figure to rise close to EUR 8m next year,
however Raute is already trading about 9x EV/EBITDA and 13x EV/EBIT on those
estimates. Full long-term earnings potential in our view remains too many years
away. Our TP is EUR 21, retain HOLD.

Open report


CONSTI - SLIGHTLY SOFTER THAN EXPECTED START

30.04.2021 - 08.45 | Earnings Flash

Consti's net sales in Q1 amounted to EUR 59.3m, in line with our and consensus
estimates (EUR 60.2m/60.2m Evli/cons.). EBIT amounted to EUR 0.1m, below our and
consensus estimates (EUR 0.5m/0.6m Evli/cons.). 2021 operating profit guidance
of EUR 7-11m intact.

Read more

 * Net sales in Q1 were EUR 59.3m (EUR 59.0m in Q1/20), in line with our and
   consensus estimates (EUR 60.2m/60.2m Evli/Cons.). Sales grew 0.4% y/y.
 * Operating profit in Q1 amounted to EUR 0.1m (EUR 0.5m in Q1/20), below our
   and consensus estimates (EUR 0.5m/0.6m Evli/cons.), at a margin of 0.2%.
 * EPS in Q1 amounted to EUR -0.02 (EUR 0.02 in Q1/20), below our and consensus
   estimates (EUR 0.02/0.03 Evli/cons.).
 * The order backlog in Q1 was EUR 196.5m (EUR 202.2m in Q1/20), down by -2.8%.
   Order intake EUR 69.8m in Q1 (Q1/20: EUR 62.1m).
 * Free cash flow amounted to EUR -2.9m (Q1/20: EUR 2.0m).
 * Guidance for 2021 (intact): Operating profit is expected to be between EUR
   7-11. The guidance range is large due to uncertainty factors brought by the
   COVID-19 pandemic.

Open report


SOLTEQ - STEAMING AHEAD

30.04.2021 - 08.30 | Company update

Solteq posted solid Q1 figures, clearly above our estimates. We have made clear
upward revisions to our estimates with on better than expected growth and
profitability. We adjust our target price to EUR 7.2 (4.5), BUY-rating intact.

Read more

Clear earnings beat across the board
Solteq reported solid Q1 figures, clearly beating our estimates. Net sales grew
10.9% to EUR 17.4m (Evli 16.5m) and EBIT improved to EUR 2.2m (Evli EUR 0.9m). A
clear highlight for the first quarter was the mainly organic 43.1% growth of
Solteq Software, aided by deliveries of the orders received within the Utilities
business. The profitability figures of Solteq Digital were surprisingly good,
with EBIT doubling compared to the comparison period, to our understanding
mainly driven by high utilization rates and streamlining of operations. Solteq
upgraded its profitability guidance ahead of Q1, now also expecting the
operating profit to grow clearly (prev. grow). This was not too surprising, as
we had already in conjunction with Q4 questioned the guidance softness.

Estimates raised quite a bit
We have clearly raised our estimates after the solid first quarter figures. We
now expect revenue growth of 13.0% (prev. 8.9%), driven mainly by Solteq
Software and customer deliveries in the Utilities business. We expect pick-up in
growth of Solteq Digital in the latter half of the year, as easing of the
pandemic should increase demand in some of the harder hit sectors. We have also
raised our EBIT estimate to EUR 9.2m (prev. 6.7m). We see limited margin upside
potential going forward in the less scalable Solteq Digital segment while Solteq
Software still has a lot more potential once the recurring revenue from the
deliveries now being made start ramping up.

BUY with a target price of EUR 7.2 (4.5)
Solteq has seen a rather hefty share price rally in the past year, being up over
400%. On our revised estimates valuation for the “new” Solteq still does not
appear overly challenging. We raise our target price to EUR 7.2 (4.5), valuing
Solteq at 24x 2021 P/E and retain our BUY-rating.

Open report


SRV - MARGINS IMPROVING, VOLUMES LACKING

30.04.2021 - 08.00 | Company update

SRV’s Q1 revenue was slightly below expectations but profitability beat our
estimates. The continued positive margin development is essential while we
remain rather dubious about construction volumes during 2021. We raise our
target price to EUR 0.80 (0.64), BUY-rating intact.

Read more

Revenue slightly below estimates but good profitability
SRV’s Q1 results were somewhat in line with expectations, as although revenue
came in a bit short at EUR 187.1m (EUR 205.7m/196.0m Evli/Cons.), EBIT amounted
to a rather solid EUR 5.2m (EUR 4.4m/3.2m Evli/cons.). The order backlog stood
at EUR 1,061m (Q1/20: EUR 1,362m). Order intake was quite weak at EUR 85.4m but
on a positive note these included new developer contracted housing units, with
start-ups picking up again after the break during Q1-Q3/2020. The most positive
news in our view was the continued improvement in the Construction segments
EBIT-margins (Q1/21: 3.7%, Q1/20: 3.0%) and the already earlier announced
approx. EUR 730m Laakso Joint Hospital alliance project, to which SRV was chosen
to develop and build (not yet final).

Favourable margin development, volumes a slight concern
With the lower than expected revenue and rather meager order development we have
lowered our 2021 sales estimates near the lower bound of the EUR 900-1,050m
sales guidance. Although SRV anticipates improved order intake in Q2 along with
the increase in completion of developer contracted housing units later on in
2021 a more conservative approach still appears warranted. On the current
profitability track and even if revenue were to decline clearly the upper bound
of the profitability guidance is well within reach assuming no major surprises
in the Investments-segment.

BUY with a target price of EUR 0.80 (0.64)
Although construction volumes are a slight concern going forward, the main thing
for SRV is that margins have continued to develop positively and even better
than we had expected. We raise our target price to EUR 0.80 (0.64), BUY-rating
intact.

Open report


RAUTE - ORDER INTAKE ABOVE OUR ESTIMATES

29.04.2021 - 09.30 | Earnings Flash

Raute’s Q1 remained low in terms of revenue and profitability but order intake
grew by some 20% y/y due to mid-size production line and modernization orders.

Read more

 * Raute Q1 revenue was EUR 24.8m vs our EUR 34.0m estimate.
 * Q1 EBIT amounted to EUR -2.5m, compared to our EUR 1.6m expectation.
 * Order intake amounted to EUR 30m vs our EUR 22m estimate. Project deliveries’
   orders were EUR 11m (EUR 14m a year ago), compared to our EUR 10m estimate.
   Meanwhile technology services orders were EUR 19m (EUR 11m a year ago) vs our
   EUR 12m estimate. Technology services’ order intake grew by 83% y/y thanks to
   modernization orders.
 * Order book stood at EUR 98m at the end of Q1, compared to EUR 92m a year ago.
 * Raute’s full-year outlook remains unchanged as net sales is to increase and
   operating profit to improve.

Open report


VAISALA - STRONG START TO THE YEAR AND OUTLOOK UPDATE

29.04.2021 - 09.30 | Earnings Flash

Vaisala’s Q1 result beat our and consensus expectations. Both Bu’s performed
better than expected thanks to good market environment. As a result of strong
start to the year, Vaisala raises lower limit of its business outlook for 2021:
net sales will be in the range of 380–400 MEUR and EBIT in the range of 35–45
MEUR (earlier was net sales 370-400 and EBIT 30-45). Outlook update did not come
as a surprise and our 2021e estimates were already within new guidance.

Read more

 * Group level results: Q1 net sales increased by 5% to 92 MEUR (86.5 Evli /
   85.7 cons). Q1 EBIT came in at 8.1 MEUR (5.9 Evli / 5.0 cons), resulting in
   8,8% EBIT-margin (Q1’20: 5.2 MEUR, 6% EBIT-margin)
 * Gross margin was 54,8% vs. 56,4% last year.
 * Orders received were 106.1 MEUR vs. 88.7 MEUR last year. Orders received grew
   by 18%; 15% in W&E and 22% in IM. Order book was 155.4 MEUR vs. 141.6 MEUR in
   Q1’20.
 * Weather & Environment (W&E) net sales increased by 1% to 52.2 MEUR vs. 47
   MEUR our expectation. W&E EBIT was -0.9 MEUR (-2.6 MEUR Evli). W&E’s orders
   received grew by 15%. Orders received increased in renewable energy and
   ground transportation market segments, whereas orders received in meteorology
   market segment were at previous year’s level. Aviation market improvement has
   stalled, and orders received in this segment decreased compared to previous
   year.
 * Industrial Measurements (IM) net sales grew 12% to 39.7 MEUR vs. 39.5 MEUR
   our expectation. IM EBIT was 9.4 MEUR (8.9 MEUR Evli), resulting in 23,8%
   EBIT-margin (Q1’20: 21,4%). IM order intake growth was 22%. Increase in
   orders received was strong in all market segments. Relative growth was
   strongest in power industry applications, although its share of orders
   received was still below 10%.
 * As a result of strong start to the year, Vaisala raises lower limit of its
   business outlook for 2021: net sales will be in the range of 380–400 MEUR and
   EBIT in the range of 35–45 MEUR (earlier was net sales 370-400 and EBIT
   30-45).

Open report


ELTEL - EXPECTING IMPROVEMENT IN Q2-Q4

29.04.2021 - 09.30 | Company update

Eltel’s Q1 results fell short of our expectations. Q1 is typically a weaker
quarter due to seasonality and we expect net sales and profitability to increase
towards the end of the year. We retain our BUY-rating but adjust TP to SEK 29.5
(30).

Read more

Profitability improved y/y despite the decline in net sales
Eltel reported a Q1 result that was below our expectations. Net sales decreased
by 23.1% to EUR 182m (Evli EUR 209.9m), while operative EBITA improved y/y from
EUR -2.1m to EUR -0.7m (Evli EUR 1.0m). Net sales continued to decline due to
the divestments made last year (EUR -15m), lower activity and postponements
among customers as a result of COVID-19 and harsh winter conditions. Q1 was good
in Finland (+3.2%), while last year’s loss of a major agreement affected the
volumes in Sweden and the ramp-up phase of the Telenor frame agreement was
reflected in lower sales in Norway. Good resource and production planning,
increased efficiency and better project management supported profitability,
while the effect of divestments was EUR -0.9m.

Sales and EBITA are expected to grow towards the end of the year
Eltel’s business is subject to seasonality and Q1 is typically a weaker quarter.
Net sales and profitability are expected to increase towards the end of the year
and according to management, the order backlog looks good, especially in Finland
and Norway. Based on the report, we have cut our net sales estimate for 2021E
from EUR 916.8m to EUR 890.6m. We see the targeted growth rate of 2-4% in the
Nordics achievable from 2022 onwards. In 2022-23E, we forecast net sales to grow
by 1.7% and 2.0%. Currently, the focus is on profitability and Eltel has managed
to increase its operative EBITA (y/y) for five consecutive quarters. We expect
Eltel to continue its efforts to improve operational efficiency and in line with
the guidance, we forecast operative EBITA margin to grow from 1.2% in 2020 to
2.4% (prev. 2.6%) in 2021E.

BUY with a target price of SEK 29.5 (30)
Despite lower-than-expected Q1 results, there have been no changes in the big
picture. Eltel has continued its transformation journey with a focus on
improving operational efficiency, profitability, financial position, and
restructuring of non-performing businesses, which will be negatively reflected
in this year’s sales. On our updated estimates for 2022-23E, Eltel is trading at
EV/EBITDA of 7.9x and 7.0x, which translate into discount of 4-10% to our peer
group median. On our revised estimates, we adjust our target price to SEK 29.5
(30) and retain our BUY-rating, which still values Eltel slightly below peers,
reflecting Eltel’s lower profitability profile and as we look for more signs of
further transformation progress.

Open report


SRV - PROFITABILITY SHAPING UP

29.04.2021 - 09.10 | Earnings Flash

SRV's net sales in Q1 amounted to EUR 187.1m, below our estimates and slightly
below consensus (EUR 205.7m/196.0m Evli/cons.). EBIT amounted to EUR 5.2m, above
our and consensus estimates (EUR 4.4m/3.2m Evli/cons.).

Read more

 * Revenue in Q1 was EUR 187.1m (EUR 208.1m in Q1/20), below our estimates and
   slightly below consensus estimates (EUR 205.7m/196.0m Evli/Cons.). Growth in
   Q1 amounted to -10.1% y/y.
 * Operating profit in Q1 amounted to EUR 5.2m (EUR 4.5m in Q1/20), above our
   estimates and consensus estimates (EUR 4.4m/3.2m Evli/cons.), at a margin of
   2.8%. The operative operating profit amounted to EUR 4.8m (Evli EUR 4.4m).
 * EPS in Q1 amounted to EUR 0.00 (EUR -0.04 in Q1/20), below our and consensus
   estimates (EUR -0.01/-0.01 Evli/cons.).
 * The order backlog in Q1 was EUR 1,061m (EUR 1,361m in Q1/20), down by -22 %.
 * Construction revenue in Q1 was EUR 187.1m vs. EUR 204.6m Evli. Operating
   profit in Q1 amounted to EUR 5.2m vs. EUR 6.6m Evli.
 * Investments revenue in Q1 was EUR 1.0m vs. EUR 1.1m Evli. Operating profit in
   Q1 amounted to EUR -0.4m vs. EUR -1.3m Evli.
 * Other operations and elim. revenue in Q1 was EUR -1.7m vs. EUR 0.0m Evli.
   Operating profit in Q1 amounted to EUR -1.3m vs. EUR -0.9m Evli.
 * Guidance intact: Consolidated revenue for 2021 is expected to amount to EUR
   900-1,050m and operating profit is expected to improve on 2020 and amount to
   EUR 16-26m.

Open report


SUOMINEN - ANOTHER RECORD AMID TURBULENCE

29.04.2021 - 08.50 | Company update

Suominen reached very high margins once again. We expect margins to settle in
H2’21 and continue to view earnings multiples attractive on such stabilized
levels.

Read more

Suominen once again topped previous profitability records

Suominen’s EUR 115.3m Q1 revenue was close to expectations while the EUR 18.5m
EBITDA topped the EUR 15.3m/15.2m Evli/cons. estimates. Gross margin hit a
record due to high volumes and improved production as well as raw materials
efficiency. Favorable sales mix helped pricing levels to improve a bit y/y.
There were some raw materials and logistics challenges, especially in the US,
which had a negative impact on production. The Texan winter disrupted oil-based
raw materials’ supply, but in our view the effect on overall results wasn’t that
big. Suominen carries some raw materials inventories, which in part explains why
the raw materials price spike didn’t yet have any notable negative effect on
profitability.

Suominen has increased its mechanism pricing exposure

The pandemic led to a wipes demand bump on both sides of the Atlantic; although
the US is ahead of Europe in vaccination rates the higher demand shows very
little signs of abatement. The raw materials inflation picture also looks
similar on both continents. Suominen increased its share of mechanism pricing
clauses already last year to protect itself against raw materials price
inflation. These measures, coupled with strong wiping demand and improved sales
mix, enhance our confidence regarding H2’21 gross margin, which we now expect to
settle around 13-14%. Suominen expects to complete the three announced
investments in H2’21. Two of these will add capabilities to existing lines while
one restarts and modernizes an idle line and so adds capacity.

We expect gross margin to settle around 13-14% in H2’21

Suominen is set to reach EUR 60m EBITDA this year even when raw materials
inflation begins to erode margins. This year is also proving extraordinary in
its own way as the raw material and logistics markets have been outright
chaotic. In our view H2’21 results should show stable gross margin levels. We
estimate ca. 14% GM for H2’21 that translates to some 12% EBITDA and 7.5% EBIT
margins. We expect Suominen to reach such figures in FY ’22. Suominen is valued
below 6x EV/EBITDA on our FY ’21-22 estimates. We retain our EUR 6.5 TP as well
as our BUY rating.

Open report


CAPMAN - INVESTMENT RETURNS DRIVE EBIT BEAT

29.04.2021 - 08.50 | Earnings Flash

CapMan's net sales in Q1 amounted to EUR 11.3m, below our and consensus
estimates (EUR 12.5m/11.9m Evli/cons.). EBIT amounted to EUR 10.1m, clearly
above our estimates and above consensus estimates (EUR 7.8m/7.6m Evli/cons.).

Read more

 * Revenue in Q1 was EUR 11.3m (EUR 12.0m in Q1/20), below our estimates and
   consensus estimates (EUR 12.5m/11.9m Evli/Cons.). Growth in Q1 amounted to
   -5.3% y/y.
 * Operating profit in Q1 amounted to EUR 10.1m (EUR -6.0m in Q1/20), clearly
   above our and consensus estimates (EUR 7.8m/7.6m Evli/cons.), at a margin of
   89.4%. Compared with our estimates the largest difference was in fair value
   changes (Act./Evli EUR 8.2m/3.5m).
 * EPS in Q1 amounted to EUR 0.05 (EUR -0.05 in Q1/20), above our and consensus
   estimates (EUR 0.04/0.04 Evli/cons.).
 * Management Company business revenue in Q1 was EUR 9.0m vs. EUR 9.4m Evli.
   Operating profit in Q1 amounted to EUR 2.5m vs. EUR 3.9m Evli.
 * Investment business revenue in Q1 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q1 amounted to EUR 7.9m vs. EUR 3.4m Evli.
 * Services business revenue in Q1 was EUR 2.3m vs. EUR 3.1m Evli. Operating
   profit in Q1 amounted to EUR 1.2m vs. EUR 1.3m Evli.
 * Capital under management by the end of Q1 was EUR 3.9bn (Q1/20: EUR 3.2bn).
   Real estate funds: EUR 2.5bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.03bn.

Open report


SOLTEQ - STELLAR START TO THE YEAR

29.04.2021 - 08.30 | Earnings Flash

Solteq’s Q1 was clearly above expectations, with revenue at EUR 17.4m (Evli EUR
16.5m) and comp. EBIT at EUR 2.2m (Evli EUR 0.9m). Solteq raised its guidance
ahead of Q1, expecting that Group revenue in 2021 will grow clearly and that the
operating profit will improve clearly.

Read more

 * Net sales in Q1 were EUR 17.4m (EUR 15.7m in Q1/20), slightly above our
   estimates (Evli EUR 16.5m). Growth in Q1 amounted to 10.9% y/y. 21.6% of
   sales came from outside of Finland.
 * The operating profit and adj. operating profit in Q1 amounted to EUR 2.2m and
   2.3m (EUR 0.7m/0.9m in Q1/20), clearly above our estimates (Evli EUR
   0.9/0.9m).
 * Solteq Digital: revenue in Q1 amounted to EUR 11.2m (Q1/20: EUR 11.3m) vs.
   EUR Evli 11.1m. The comp. EBIT was EUR 1.3m (Q1/20: EUR 0.7m) vs. Evli EUR
   0.5m. The segment is expected to develop steadily during the current quarter.
 * Solteq Software: Revenue in Q1 amounted to EUR 6.2m (Q1/20: EUR 4.3m) vs.
   Evli EUR 5.4m. The comp. EBIT was EUR 0.9m (Q1/20: EUR 0.2m) vs. Evli EUR
   0.5m. Growth was 43.1% and mainly organic. Recurring revenue 29.1% of the
   segment’s revenue. The Partiture Oy acquisition has a slight positive impact
   on growth. The business outlook for the segment is expected to remain
   positive
 * Guidance for 2021 (updated 27.4.): group revenue is expected to grow clearly
   and operating profit to improve clearly (added).

Open report


ETTEPLAN - DEMAND AND GROWTH IN FOCUS

29.04.2021 - 08.15 | Preview

Etteplan reports Q1 results on May 5th. We expect a relatively decent start to
the year and our focus will be less on current figures and more on demand
development and future growth drivers. We retain our target price of EUR 13.6
and SELL-rating.

Read more

Expect a decent start to the year
Etteplan reports Q1 results on May 5th. 2020 was a challenging year for Etteplan
due to the Coronavirus pandemic, with the organic decrease in revenue at 8.3%.
Due to rapid and efficient cost savings measures Etteplan was still able to
maintain solid profitability, with the EBITA-margin at 10.1% (2019: 9.9%). To
our understanding the customer demand during the beginning of the year has
continued to move in the right direction, with customer companies having adapted
to operating under the current environment. We have made no changes to our
estimates ahead of the Q1 results, expecting revenue of EUR 71.1m and EBITA of
EUR 6.4m.

Demand situation and growth drivers’ key themes
Going into 2021 key themes will be the development of customer demand and pick
up in Etteplan’s internal growth initiatives, with quite some work left to reach
the target of EUR over 500m in revenue in 2024. As earlier mentioned, customer
demand has been developing positively and has for instance been at a good level
in China, while demand in other countries could still see notable improvement.
We expect growth of 11.2% in 2021, aided largely by the Tegema and TekPartner
acquisitions. Our organic growth assumptions remain rather modest and an
improvement in the demand situation could warrant higher estimates. We expect
the EBITA-margin to remain near previous year levels at 9.9% (2020: 10.1%).

SELL with a target price of EUR 13.6
We have made no changes to our estimates and retain our target price of EUR 13.6
and SELL-rating. Etteplan currently trades above peers and with the prevailing
uncertainty due to the pandemic and growth pick-up we find the >21x 2021 P/E
multiples hard to justify.

Open report


SUOMINEN - CLEAR Q1 PROFITABILITY BEAT

28.04.2021 - 10.00 | Earnings Flash

Suominen’s Q1 profitability remained very strong and the quarter was actually
better, in terms of EBITDA and EBIT, than the previous record seen in Q3’20.
Suominen retains its full-year outlook.

Read more

 * Suominen Q1 revenue amounted to EUR 115.3m vs the EUR 117.0m/114.5m
   Evli/consensus estimates. Top line grew 5% y/y and currencies had a negative
   impact of EUR 8.1m.
 * European top line was EUR 43.4m whereas we estimated EUR 45.0m. Americas
   recorded EUR 71.9m, compared to our EUR 72.0m estimate.
 * Gross profit was EUR 20.2m vs our EUR 17.0m estimate. Gross margin was thus
   17.5% vs our 14.5% expectation.
 * Q1 EBITDA was EUR 18.5m, compared to the EUR 15.3m/15.2m Evli/consensus
   estimates. EBIT amounted to EUR 13.6m vs the EUR 9.8m/9.8m Evli/consensus
   estimates. SGA and R&D were also a bit lower than we expected.
 * Suominen retains the previously stated outlook and expects FY ‘21 comparable
   EBITDA to remain in line with FY ’20 (EUR 60.9m).

Open report


INNOFACTOR - GOOD START TO THE YEAR

28.04.2021 - 09.30 | Company update

Innofactor reported Q1 results well in line with our estimates. We expect sales
growth to pick up during the year in comparable terms supported by the healthy
order backlog and expect to see continued margin improvement. We retain our
BUY-rating and TP of EUR 2.2.

Read more

Q1 well in line with our estimates
Innofactor reported Q1 results that were well in line with our expectations.
Revenue grew 3.8% to EUR 17.8m (Evli EUR 17.9m) while EBITDA amounted to EUR
4.7m (Evli EUR 4.8m). EBITDA included the EUR 2.6m one-off relating to the Prime
business divestment and the adj. EBITDA of EUR 2.1m showed growth of 7.3% y/y.
The order backlog in Q1 was at a record level of EUR 68.9m (+27.4% y/y), aided
by the biggest individual deal in Innofactor’s history signed with the Finnish
Tax Administration. The report overall did not hold any material negative news
in our view. Management comments on the impacts of the COVID-19 pandemic and
sales development outside Finland, were sales have been more challenging, were
modestly upbeat.

No notable changes to our estimates
Our estimates remain essentially intact apart from minor adjustments due to
lower than estimated acquisition amortizations in Q1. We expect sales in 2021 to
grow 3.4% y/y (comparable growth 6.3%) to EUR 68.4m and EBITDA (excl. Prime
div.) to amount to EUR 8.7m. In relation to the past years performance our
growth assumptions appear unmerited and the company still has quite a lot to
prove in terms of growth. With the record-high order backlog and management
comments on the impacts of the pandemic and sales development outside Finland,
pick-up in sales growth should certainly be within grasp.

BUY with a target price of EUR 2.2
With no major changes to our estimates or the investment case we retain our
target price of EUR 2.2 and BUY-rating. Our TP values Innofactor slightly below
peers, which we see justified given its track-record in previous years.

Open report


FINNAIR - HEAVY TURBULENCE CONTINUES

28.04.2021 - 09.30 | Company update

There were no surprises with Finnair’s Q1 result. The company expects Q2
comparable operating loss to be similar compared to the previous quarters and
gradual recovery to start from late summer. Finnair also increased its cost
savings target to EUR 170m. We keep “HOLD” with TP of EUR 0.75.

Read more

Restrictions continued to hamper Q1 figures

Finnair’s Q1 result was relatively similar compared to the previous quarters.
Tight travel restrictions remained, and Finnair operated with limited network
and frequencies in January-March (approx. 75 daily passenger flights). Revenue
decreased by ~80% y/y to EUR 114m vs. EUR 96m/103m Evli/consensus. Once again,
revenue was supported by strong cargo demand (cargo revenue represented ~54% of
total revenue). ASK was down by ~88% y/y and PLF was 25.5% (-47.1pp). Adj. EBIT
amounted EUR -143m and was slightly better than expectations (EUR -155m/-159m
Evli/cons.).

Increased cost savings target

Previously, Finnair was targeting permanent costs savings of EUR 140m by 2022
(compared to 2019 levels) but as the savings program is proceeding well the
company increased the target to approx. EUR 170m. This is good news as it is
extremely important to be well positioned in the post COVID-19 world. Despite
the blurry outlook regarding the recovery of air travel, there are positive
signs in the market as the vaccination coverage is gradually increasing. Finnair
starts to accept vaccination certificates from mid-May onwards and will be
adding destinations and frequencies towards the summer. In summer, the company’s
plan is to operate over 60 destinations. However, we note that it is important
that European countries lift travel restrictions at a same pace but also that
traveling from non-EU countries becomes easier.

“HOLD” with TP of EUR 0.75

Due to the week visibility, Finnair did not provide a full year guidance but
expects Q2’21E comparable operating loss to be similar compared to the previous
four quarters. The company expects gradual recovery to start in late summer. As
the company has additional funding available if needed (e.g. hybrid loan from
the State of Finland) we expect the company is rather well positioned once the
market reopens. We expect 21E revenue of EUR ~1287m and adj. EBIT of EUR -372m.
Profitability should quickly improve once the recovery starts due to the cost
savings. We keep our rating “HOLD” with TP of EUR 0.75.

Open report


ELTEL - RESULTS BELOW OUR EXPECTATIONS

28.04.2021 - 09.30 | Earnings Flash

Eltel’s Q1 results were below our expectations. Net sales amounted to EUR 182m
(Evli 209.9m). Operative EBITA improved y/y to EUR -0.7m (EUR -2.1m in Q1/20)
but was also below our expectations. (Evli EUR 1.0m)

Read more

 * Net sales in Q1 decreased by 23.1% to EUR 182m (EUR 236.6m in Q1/2020) and
   were below our estimates (Evli EUR 209.9m). Net sales continued to decline
   partly due to the divestments made last year and partly due to lower activity
   among customers as a result of COVID-19. Last year’s loss of a major service
   agreement in Sweden also affected the volumes.
 * Operative EBITA improved y/y to EUR -0.7m (EUR -2.1m in Q1/20) but was below
   our expectations (Evli EUR 1.0m). The operative EBITA margin was -0.4% (-0.9%
   in Q1/20). Eltel has succeeded in adjusting the organization to meet the
   volume changes, which has contributed to the improved profitability.
 * Operating profit in Q1 amounted to EUR -0.8m (EUR -2.2m in Q1/20, Evli EUR
   0.8m).
 * Guidance reiterated: Eltel expects the full-year 2021 operational EBITA
   margin to improve compared to 2020.

Open report


DETECTION TECHNOLOGY - SLOWISH START, BUT THINGS ARE PICKING UP

28.04.2021 - 09.00 | Company update

DT believes that worst challenges in SBU are behind and security will head
toward growth starting in Q2. As the security market is slowly starting to
recover and demand in medical market remains strong, we remain positive towards
the investment case given both the market drivers as well as DT’s strategy and
execution capabilities. Based on increased confidence in security market
recovery and strong outlook in medical, we raise our target price to €30 (prev.
€28.5) but maintain HOLD recommendation.

Read more

A slow start to the year

DT’s Q1 result was broadly in line regarding net sales, but EBIT clearly missed
ours and consensus expectations, although EBIT improved somewhat y/y. Q1 net
sales amounted to EUR 18.3m (-8% y/y) vs. EUR 19.2m/19.2m Evli/consensus
estimates. Q1 EBIT was EUR 1.4m (7,5% margin) vs. EUR 2.2m/1.94m Evli/cons. R&D
costs amounted to EUR 2.4m or 13% of net sales (Q1’20: 2,6m, 13%). SBU net sales
decreased -37,7% to EUR 5.8m vs. EUR 6.0m Evli estimate. Decrease was mainly due
to COVID-19 situation continuing to affect the security market. IBU net sales
increased +11% to EUR 2.4m vs. EUR 2.7m Evli estimate. MBU net sales increased
+20% to EUR 10.1m which was broadly in line with our estimate of EUR 10.5m.
Growth was driven by continued good demand for medical CT applications,
especially in China.

 Strong medical to continue, security also starting to recover

The increased investments in healthcare infrastructure and demand for CT
applications have kept momentum for MBU strong. As a result, DT expects MBU
sales to grow over 20% in Q2 and H2. DT is also seeing early positive signals in
the security market after a difficult year. DT believes that worst challenges in
SBU are behind and security will head toward growth starting in Q2 and continue
to grow in H2. IBU sales is expected to be at the same level as in the
comparison period in Q2 but to grow in H2. In total, DT expects total net sales
to grow double-digit in Q2 and in H2 of 2021 driven mainly by the strong medical
demand.

 Target price of €30 (prev. €28.5), HOLD rating

Our estimates are broadly unchanged after the report. As the security market is
slowly starting to recover and demand in medical market remains strong, we
remain positive towards the investment case given both the market drivers as
well as DT’s strategy and execution capabilities. We expect both net sales and
EBIT growth to recover in 2021E, but accurately predicting the slope of the
recovery is challenging. We expect 2021E to be a year of recovery, and DT to
resume above 15% margins from 2022E onwards. Based on increased confidence in
security market recovery and strong outlook in medical, we raise our target
price to €30 (prev. €28.5) but maintain HOLD recommendation.

Open report


CONSTI - EYES ON DEMAND DEVELOPMENT

28.04.2021 - 08.45 | Preview

Consti will report Q1 results on April 30th. Our attention is drawn towards any
comments on demand development. Following share price increase we downgrade to
HOLD (BUY), target price of EUR 13.0 intact.

Read more

Looking for signs of growth
Consti will report Q1 results on April 30th. Consti posted stable profitability
figures throughout 2020 after challenges in previous years and with the pandemic
focus has shifted towards order intake and growth. The order backlog development
has been on a slightly declining throughout 2020, while order intake development
was essentially flat. With the housing company General Meeting season kicking
off any comments thereto could give some indication of demand development within
housing companies. In terms of top and bottom line figures Q1 is typically the
seasonally slowest quarter and we expect sales of EUR 60.2m and EBIT of EUR
0.5m.

Expect slight growth and profitability improvement in 2021
Consti has not given a sales guidance for 2021 while the guidance for EBIT is at
EUR 7-11, a wider range due to still present COVID-19 uncertainties. Consti
indicated in conjunction with Q4 that the activity level going forward is
expected to be higher compared with the same period a year ago despite no clear
growth in the order backlog. Our estimates assume only a rather minor growth of
2.3%, quite in line with historic pre-COVID market growth. Focus has in the past
been on organizational improvements and profitability, but we expect Consti to
increasingly adding attention towards sales growth. In terms of profitability we
expect a slight improvement in EBIT-margins, 20bps y/y, to 3.2%.

HOLD (BUY) with a target price of EUR 13.0
Consti’s valuation is currently rather in line with peers although still lower
compared to building installations and services peers. Consti is a solid case in
terms of cash conversion but on current growth outlook valuation appears quite
fair. We have not made changes to our estimates and retain our target price of
EUR 13.0. With Consti’s share price up slightly over 10% since our previous
update we downgrade to HOLD (BUY).

Open report


FINNAIR - NOTHING NEW WITH Q1 RESULT

27.04.2021 - 09.45 | Earnings Flash

Finnair’s Q1 result was similar compared to the previous quarters. Q1’21 adj.
EBIT was EUR -143m vs. our expectation of EUR -155m and consensus of EUR -159m.
Revenue decreased by ~80% y/y and was EUR 114m vs. our expectation of EUR 96m
and consensus of EUR 103m.

Read more

 * Q1 revenue was EUR 114m (-79.8% y/y) vs. EUR 96m/103m Evli/cons. Revenue was
   supported by strong cargo demand.
 * ASK decreased by ~88% y/y in Q1. PLF was 25.5% (-47.1pp). Strict travel
   restrictions continued to limit traveling in many countries and Finnair had
   to operate with limited network and frequencies during Q1.
 * Q1 adj. EBIT was EUR -143m vs. EUR -155m/-159m Evli/cons. Q1 comparable
   EBITDA was EUR -61m vs. EUR -71m our view and consensus of EUR -67m.
 * Absolute costs in Q1: Fuel costs were EUR 30m vs. EUR 28m our view. Staff
   costs were EUR 53m vs. EUR 41m our view. All other OPEX+D&A combined were EUR
   183m vs. EUR 193m our view.
 * Unit costs: CASK was 21.37 eurocents vs. 20.76 eurocents our view.
 * The company will continue to operate with limited network during Q2 and it
   expects Q2 comparable loss to be of a similar magnitude as in the previous
   quarters.
 * Finnair targets to reach permanent cost savings of approx. EUR 170m (prev.
   140m) by 2022 (compared to 2019 levels).

Open report


DETECTION TECHNOLOGY - HEADING TOWARDS BETTER TIMES

27.04.2021 - 09.30 | Earnings Flash

DT’s Q1 result was broadly in line regarding net sales, but EBIT clearly missed
ours and consensus expectations, although EBIT improved somewhat y/y. Most
importantly, DT is seeing early positive signals in the security market. DT
believes that worst challenges in SBU are behind and company will head toward
growth starting in Q2 of 2021. DT expects total net sales to grow double-digit
in Q2 and in H2 of 2021 driven mainly by the strong medical demand.

Read more

 * Q1 result: Q1 net sales amounted to EUR 18.3m (-8% y/y) vs. EUR 19.2m/19.2m
   Evli/consensus estimates. Q1 EBIT was EUR 1.4m (7,5% margin) vs. EUR
   2.2m/1.94m Evli/cons. R&D costs amounted to EUR 2.4m or 13% of net sales
   (Q1’20: 2,6m, 13%).
 * Security Business Unit (SBU) net sales decreased 37,7% to EUR 5.8m vs. EUR
   6.0m Evli estimate. Decrease was mainly due to COVID-19 situation affecting
   demand. Despite international passenger travel still stagnating, DT sees that
   domestic air transport has recovered in many countries close to the
   pre-pandemic levels and cargo transport is increasing. DT expects SBU sales
   will start to increase in late Q2 and continue to grow in H2, but demand is
   characterized by uncertainty.
 * Industrial Business Unit (IBU) net sales increased 11% to EUR 2.4m vs. EUR
   2.7m Evli estimate. IBU sales is expected to be flat in Q2 and to grow in H2,
   but demand may fluctuate.
 * Medical Business Unit (MBU) net sales increased 20% to EUR 10.1m which was
   broadly in line with our estimate of EUR 10.5m. Growth was driven by good
   demand for medical CT applications, especially in China. DT expect demand in
   medical CT applications to increase and MBU sales to grow even more in Q2 and
   H2 than in Q1.
 * No change in medium-term targets; at least 10% net sales growth, EBIT margin
   at or above 15%.

Open report


INNOFACTOR - WELL IN LINE WITH EXPECTATIONS

27.04.2021 - 09.30 | Earnings Flash

Innofactor’s Q1 results were in line with our expectations. Net sales amounted
to EUR 17.8m (Evli EUR 17.9m), while EBITDA amounted to EUR 4.7m (Evli EUR
4.8m). EBITDA included a one-off of approx. EUR 2.6m related to the Prime
business divestment.

Read more

 * Net sales in Q1 amounted to EUR 17.8m (EUR 17.2m in Q1/20), in line with our
   estimates (Evli EUR 17.9m). Net sales in Q1 grew 3.8% y/y. The growth was
   fully attributable to Finland but Innofactor expects to achieve growth also
   outside Finland from Q2 onwards.
 * EBITDA in Q1 was EUR 4.7m (EUR 2.0m in Q1/20), in line with our estimates
   (Evli EUR 4.8m), at a margin of 26.2%. EBITDA included a one-off of approx.
   EUR 2.6m relating to the Prime business divestment. EBITDA excl. NRI’s would
   have been EUR 2.1m, 7.3% higher y/y.
 * Operating profit in Q1 amounted to EUR 3.8m (EUR 0.8m in Q1/20), in line with
   our estimates (Evli EUR 3.6m), at a margin of 21.4%. EBIT excl. NRI’s would
   have been EUR 1.3m, 53% higher y/y.
 * Order backlog at EUR 68.9m, up 27.4% y/y. Innofactor succeeded well in sales
   during the first quarter and also received its largest order in history from
   the Finnish Tax Administration.
 * Innofactor expects that the COVID-19 pandemic will not cause significant harm
   to Innofactor’s business in 2021.
 * Guidance reiterated: Innofactor’s net sales and EBITDA in 2021 are estimated
   to increase compared to 2020 (net sales and EBITDA EUR 66.3m and EUR 7.2m
   respectively).

Open report


TALENOM - REALIZING FURTHER GROWTH POTENTIAL

27.04.2021 - 09.00 | Company report

Talenom is more strongly seeking to supplement its organic growth strategy with
inorganic growth, supported by the favourable market conditions. Near-term
margin upside appears limited due to the increased M&A activity, but margins are
set to remain healthy. We retain our HOLD-rating and adjust our target price to
EUR 13.3 (12.0).

Read more

Organic growth supplemented by acquisitions
Talenom has in the past years focused clearly on organic growth and achieved
double-digit growth figures in doing so. With favourable conditions for
acquisitions Talenom is now clearly seeking to supplement the organic growth,
which has slowed down slightly due to the pandemic, with inorganic growth. With
the acquisitions made so far during 2021 we expect growth of 25.2% y/y and a
sales CAGR of 16% during 2020-2023E, not including any likely new acquisitions.

Healthy margins but M&A limits near-term upside
Talenom has invested heavily in improving the efficiency of its bookkeeping
production line. Through digitalization and automation of bookkeeping tasks and
processes the company has been able to better allocate personnel resources,
resulting in sizeable improvements in margins. We expect further development to
be limited in the near-term due to the increased M&A activity, with the
typically lower margins of acquirees and integration costs burdening
profitability. Likely future efficiency improvements and thus profitability
should also be of smaller magnitude, with a larger share of actions already
taken.

HOLD with a target price of EUR 13.3 (12.0)
We retain our HOLD-rating and adjust our target price to EUR 13.3 (12.0). Our
target price values Talenom at 50x 2021E P/E. Valuation is certainly not on the
cheaper side but the multi-year track of rapid growth and profitability
improvement along with the very defensive nature of the business and pick-up in
M&A activity in our view justify the high valuation.

Open report


TALENOM - IN LINE WITH EXPECTATIONS

26.04.2021 - 13.45 | Earnings Flash

Talenom's net sales in Q1 grew 17.0% to EUR 20.3m, in line with our and
consensus estimates (EUR 19.9m/20.3m Evli/cons.). EBIT amounted to EUR 4.4m, in
line with our and consensus estimates (EUR 4.4m/4.3m Evli/cons.).

Read more

 * Net sales in Q1 amounted to EUR 20.3m (EUR 17.4m in Q1/20), in line with our
   and consensus estimates (EUR 19.9m/20.3m Evli/Cons.). Growth in Q1 amounted
   to 17.0% y/y.
 * Operating profit in Q1 amounted to EUR 4.4m (EUR 3.7m in Q1/20), in line with
   our and consensus estimates (EUR 4.4m/4.3m Evli/cons.), at a margin of 21.7%.
 * EPS in Q1 amounted to EUR 0.08 (EUR 0.07 in Q1/20), in line with our and
   consensus estimates (EUR 0.08 Evli/cons.).
 * The development of the organic growth and profitability of the accounting
   business in Finland during Q1, without the effect of acquisitions, was
   according to Talenom once again excellent.
 * Net investments during Q1/21 amounted to EUR 9.8m (Q1/2020: EUR 4.1m).
 * Guidance intact (updated 15.4.2021): Net sales in 2021 are expected to amount
   to EUR 80-84m and operating profit to EUR 14-16m.

Open report


VERKKOKAUPPA.COM - STRATEGY IMPLEMENTATION GOING WELL

26.04.2021 - 09.45 | Company update

Verkkokauppa.com’s Q1 result was as expected. Strategy implementation has
started well, and the outlook remains bright. We have made only small
adjustments to our estimates and keep our rating “BUY” with TP of EUR 10.80
(10.5).

Read more

Q1 result in line with expectations

Verkkokauppa.com delivered a solid Q1 result which was in line with
expectations. Q1 revenue increased by 7% y/y to EUR 134m (vs. EUR 135m/134m
Evli/cons.). Growth was good especially in major domestic appliances, small
domestic appliances, office & supplies, gaming & entertainment and sports.
Online sales (excl. export) increased by 33%, representing 64% of total sales.
Further, sales to B2B customers increased by 12%. Export continued to be in a
lower level due to the travel restrictions (6% of sales). Gross profit totaled
EUR 21.7m (16.2% margin) vs. our EUR 21.4m (15.9% margin). Gross margin was
driven by increased share of higher margin categories in total sales. Adj. EBIT
amounted EUR 5.2m (3.9% margin) vs. our EUR 5.0m (3.7% margin) and consensus of
EUR 4.8m (3.6% margin).

Everything is right on track

The market has continued to be favorable for Verkkokauppa.com as the COVID-19
situation has prolonged and consumer behavior is changing (shift to online). In
early 2021, the company published its refined, rather ambitious strategy for
2021-2025. The company targets a giant leap in revenue while improving
profitability. As a part of the strategy, the company will invest in the
logistics automation of the warehouse located in Jätkäsaari. The first stage of
the investment is to build a fully automated small item warehouse and the
building process will start this summer and is expected to be completed in early
2022. The total investment is expected to be completed by the end of 2022 and
the estimated capex is approx. EUR 4m.

“BUY” with TP of EUR 10.80 (10.5)

Verkkokauppa.com reiterated its guidance and expects revenue of EUR 570m-620m
and adj. EBIT of EUR 20m-26m in 2021. We have made only minor adjustments to our
estimates after the result and expect 21E revenue of EUR 594m and adj. EBIT of
EUR 24.0m (4% margin). Implementation of the strategy has started well, and the
outlook remains positive. On our estimates, the company trades with 21E-22E
EV/EBIT multiple of 16.8x and 15.8x which is 15% discount compared to the Nordic
& European online peers in 21E and 16% premium in 22E. We keep “BUY” with TP of
EUR 10.80 (10.5).

Open report


SCANFIL - SOUND DEMAND OUTLOOK FULLY VALUED

26.04.2021 - 09.25 | Company update

Scanfil’s Q1 featured very few surprises. The company remains well-positioned
and many customer megatrends continue to drive demand in the short as well as
long term perspective. Our TP is now EUR 8.5 (8), rating HOLD (BUY).

Read more

All five segments have developed positive since Q3’20

Scanfil’s EUR 163m Q1 revenue was above the EUR 152m/151m Evli/cons. estimates
even when excluding the discontinued trade in Hangzhou. Organic growth was 7%
y/y when excluding the discontinued business. Scanfil renewed its segment
structure as the previous Industrial segment had become too diverse. Advanced
Consumer Applications and Energy & Cleantech, the two largest segments, both
grew rapid. The former’s demand stemmed e.g. from elevators (as well as new
customers) while the latter was driven by e.g. reverse vending machines. The
other three segments have also continued to develop well since Q3’20, demand
overall improved throughout Q1 and March was especially strong and profitable.
Scanfil posted EUR 10.0m in Q1 EBIT, in line with the EUR 10.5m/10.0m Evli/cons.
estimates.

Strategy and day-to-day execution continue to work

In our view Scanfil is headed for the upper end of its FY ’21 revenue guidance
range. Demand outlook supports Scanfil’s long-term organic growth target and
implies 5-6% CAGR in the years ahead. The accounts are unlikely to build up
inventories, rather there seems to be solid demand that stems from many
megatrends. Component bottlenecks are possible but so far these haven’t had a
negative impact on Scanfil. The company takes proactive measures to better
anticipate demand and so secure relevant components early on. Scanfil also
reports no gross margin pressure and remains able to pass price inflation
forward to customers. M&A options remain relevant in the long-term.

In our view further upside is not found in the short-term

Scanfil is valued ca. 9x EV/EBITDA and 12x EV/EBIT on our FY ‘21 estimates. In
terms of EBITDA the share trades at a peer premium while the EBIT multiples are
in line. Scanfil is thus valued at a small premium and we see this well
justified. Scanfil’s and peers’ multiples have alike rerated recently. EMS
companies used to be valued very low, and in our view the current higher
multiples are warranted at least in Scanfil’s case. We view Scanfil’s valuation
now neutral. Our new TP is EUR 8.5 (8) and rating HOLD (BUY).

Open report


INNOFACTOR - DIVESTMENT SECURES A SOLID START

23.04.2021 - 09.40 | Preview

Innofactor is set to post solid Q1/21 figures with the one-off from the Prime
business divestment. With a solid cash position and ambitious long-term growth
targets we expect to start seeing measures to boost growth. We retain our
BUY-rating with a target price of EUR 2.2 (1.75).

Read more

Q1 boosted by divestment one-off
Innofactor will publish its Q1 results on April 27th. Innofactor earlier
announced that it had agreed to sell its resource management software solution
business, Innofactor Prime, to Total Specific Solutions. The transaction is to
have a positive impact of approx. EUR 2.6m on Q1/21 EBITDA and a negative impact
of approx. EUR 2.0m on 2021 sales. As such, Innofactor should report
exceptionally strong EBITDA in Q1/21, with our estimate at EUR 4.8m. We expect
sales to continue on the modest growth trend seen in late 2020 and expect sales
to grow 4.4% to EUR 17.9m. Growth is supported by the positive development of
the order backlog, which at the end of 2020 was up some 21% y/y.

Expecting to see measures to boost growth
With the divestment of Innofactor Prime we have lowered our 2021 sales estimates
and slightly lowered our profitability figures (excl. Prime div.). We now expect
sales of EUR 68.4m (2020: 66.2m) and EBITDA (excl. Prime div.) of EUR 8.9m
(2020: EUR 7.2m). Innofactor expects net sales and EBITDA in 2021 to grow
compared with 2020. Innofactor’s cash position was at a healthy level already at
the end of 2020, now further strengthened by the proceeds from the Prime
divestment, and it is likely only a matter of time until acquisitions start
picking up again to speed up growth.

BUY with a target price of EUR 2.2 (1.75)
Innofactor’s share price has now recovered from the dip in previous years and
valuation is no longer quite as cheap. Compared to peers, valuation is still not
too stretched. We expect to start seeing measures to boost growth further, which
would further warrant higher multiples. We adjust our TP to EUR 2.2 (1.75) and
retain our BUY-rating.

Open report


SCANFIL - CLEAR TOP LINE BEAT

23.04.2021 - 09.30 | Earnings Flash

Scanfil’s Q1 was a clear positive surprise in terms of revenue. Profitability
was more in line with expectations. Scanfil did not revise its guidance but
updated the segment structure.

Read more

 * Scanfil Q1 revenue was EUR 163m vs the EUR 152m/151m Evli/consensus
   estimates. Top line grew by 13% y/y.
 * Scanfil updated its segment structure. The new five segments are called
   Advanced Consumer Applications, Automation & Safety, Connectivity, Energy &
   Cleantech, and Medtech & Life Science. Q1 growth was strongest in Advanced
   Consumer Applications, the largest segment that also includes elevators
   business. Energy & Cleantech, the second largest (includes e.g. reverse
   vending machines), also developed well.
 * Scanfil Q1 EBIT amounted to EUR 10.0m, compared to the EUR 10.5m/10.0m
   Evli/consensus estimates. Operating margin was therefore 6.1% (6.0% a year
   ago).
 * Scanfil guides EUR 600-640m in revenue and EUR 40-44m in adjusted EBIT for FY
   ’21 (unchanged). Uncertainty continues with respect to the availability of
   certain materials, especially semiconductors. The pandemic may also have a
   negative impact on customer demand and supply chain delivery capability.
 * Scanfil says there was scarcity in certain materials, however this did not
   have any major impact.

Open report


VERKKOKAUPPA.COM - NO SURPRISES WITH Q1 RESULT

23.04.2021 - 08.35 | Earnings Flash

Verkkokauppa.com’s Q1 result was in line with expectations. Q1’21 revenue grew
by 7% y/y and was EUR 134m vs. Evli EUR 135m and consensus of EUR 134m. Adj.
EBIT was EUR 5.2m vs. EUR 5.0m/4.8m Evli/consensus. EPS was EUR 0.09 vs. EUR
0.08 Evli and consensus. Verkkokauppa.com reiterated its guidance.

Read more

 * Q1 revenue was EUR 134m (7% y/y) vs. EUR 135m Evli view and EUR 134m
   consensus. Growth was good especially in major domestic appliances, small
   domestic appliances, office & supplies, gaming & entertainment and sports.
   Online sales increased by 33%. Also, sales to B2B customers increased by 12%.
 * Q1 gross profit was EUR 21.7m (16.2% margin) vs. EUR 21.4m (15.9% margin)
   Evli view. Gross margin was driven by increased share of product categories
   with higher profit margins.
 * Q1 adj. EBIT was EUR 5.2m (3.9% margin) vs. EUR 5.0m (3.7% margin) Evli view
   and EUR 4.8m (3.6% margin) consensus.
 * Q1 eps was EUR 0.09 vs. EUR 0.08/0.08 Evli/cons.
 * The company also decided on a quarterly dividend of EUR 0.057 per share.
 * 2021E guidance: revenue of EUR 570-620m and adj. EBIT of EUR 20-26m.


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FINNAIR - SLOWLY TOWARDS BETTER TIMES

22.04.2021 - 09.35 | Preview

Finnair reports its Q1 result on next week’s Tuesday, 27th of April. We expect
Q1’21E to be relatively similar compared to the previous quarters. We keep our
rating “HOLD” with TP of EUR 0.75 (0.60).

Read more

Quiet quarter, as expected

In Q1, Finnair carried 259k passengers which is 90% decline compared to Q1’20.
Average Seat Kilometers (ASK) decreased by 87.6% y/y and Revenue Passenger
Kilometers (RPK) decreased by 95.6% y/y. Passenger Load Factor (PLF) declined by
47.1%-points y/y and was 25.5%. The pandemic situation worsened during the first
quarter of the year and strict travel restrictions remained. We expect Q1E
revenue of EUR 96m (-83% y/y) and adj. EBIT of EUR -155m.

Towards better times

Even though the coronavirus situation has continued severe in the beginning of
the year, there is light at the end of the tunnel as the vaccination pace has
slowly improved. However, it is still unclear when traveling can start to
normalize and how to make it safe. Possible vaccination certificates could be a
crucial solution to this as it is important that European countries, including
Finland lift travel restrictions at the same pace. Currently, it is estimated
that majority of Finnish people have been received the first vaccine dose by the
late summer thus air travel is expected to remain in a low level also during
April-June. Therefore, we have cut our Q2’21E estimates. Our H2’21E and 22E-23E
estimates are largely unchanged at this point.

“HOLD” with TP of EUR 0.75 (0.60)

The hybrid loan by the State of Finland to Finnair (max. of EUR 400m) was
approved by the EU Commission in March. Approx. EUR 350m of the loan can be used
by Finnair if its cash or equity position drop below specific limits. The
remaining approx. EUR 50m share needs the Commission’s approval at a later
stage. The interest rate of the hybrid loan has not been specified. We expect
the recovery of air travel to begin in H2’21 but highlight that there are still
significant uncertainties due to the changing pandemic situation. We expect 21E
revenue to increase by 72% y/y and adj. EBIT of EUR -336m. We keep our rating
“HOLD” with TP of EUR 0.75 (0.60) ahead the Q1 result.

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RAUTE - ORDERS ARE BOUND TO PICK UP

22.04.2021 - 09.25 | Preview

Raute reports Q1 results on Thu, Apr 29. We haven’t made changes to our
estimates. We continue to expect gradual improvement in Raute’s operating
environment. We retain our EUR 21 TP. Our rating is now HOLD (SELL).

Read more

The improvement gradient remains unclear

Recent news flow has been very encouraging across many sectors, and we believe
the improving conditions also apply to Raute at least to some extent. This
assumption is by no means a stretch given how meagre levels project deliveries’
small order intake reached in H2’20. Raute’s business environment is bound to
improve this year. There is even a relevant chance for an order boom in the
coming years, given the fact that Raute’s customers’ (plywood and LVL mills)
demand is mostly driven by the construction industry. We however continue to
estimate Q1’21 to have been relatively muted, albeit with some definite
improvement in small project orders relative to the few previous quiet quarters.

Pickup may prove fast, but we see this year as another gap

We leave our previous estimates unchanged. We estimate smaller equipment orders
to have been EUR 10m in Q1’21. The figure implies improvement on the EUR 3m
Q4’20 number that excludes the EUR 55m Russian mill order but remains below the
EUR 14m seen in Q1’20. We expect order book to have remained at a decent EUR 82m
level and revenue to have amounted to a likewise good EUR 34m. These relatively
strong figures reflect reliance on big Russian projects in an otherwise still
weak demand environment. We also expect Raute to climb back to black this year
in terms of EBIT and see the Q1 figure at EUR 1.6m. Raute’s global competitive
position means plenty more potential in the long-term perspective, but we
believe FY ’21 results will still be somewhat modest in the historical context.

In our view valuation now lands within a neutral range

The current context might warrant some stretch in valuation multiples
considering the potential for a rapid improvement in orders, not to mention
Raute’s strong competitive positioning. We nevertheless do not see upside on the
current ca. 8-10x EV/EBITDA and 12-16x EV/EBIT multiples on our estimates for FY
’21-22. We retain our EUR 21 TP. Our rating is now HOLD (SELL).

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SUOMINEN - EARNINGS MULTIPLES ARE UNDEMANDING

22.04.2021 - 09.05 | Preview

Suominen reports Q1 results on Wed, Apr 28. We leave our operative estimates
unchanged ahead of the report and retain our EUR 6.5 TP and BUY rating.

Read more

Demand remains strong but costs are also rising

Suominen’s FY ’21 outlook, issued in February, guides flat comparable EBITDA
development y/y. We didn’t find this guidance surprising and revised our FY ’21
EBITDA estimate up only a tad from EUR 55.3m to EUR 56.5m (Suominen posted EUR
60.9m in FY ’20 EBITDA). The guidance however contained a disclaimer with
respect to the present uncertainty in the raw materials and cargo markets.
Suominen had assumed pricier raw materials going forward, but the recent ca. 20%
quarterly level gains seen in inputs such as pulp, polyester and polypropylene
may have been larger than the company expected. It’s also unclear how e.g. the
Suez Canal blockage might have disrupted the relevant supply chains.

We expect gross margin declines over the year

The recent raw materials price gains exert clear negative pressure on Suominen’s
gross margin for their part, but on the other hand the company should still be
able to defend its own nonwovens pricing to some extent. The pricing dynamics
will also register with a certain lag. We leave our operative estimates
unchanged ahead of the Q1 report. We continue to expect gradual decrease in
gross margin throughout the year. We estimate Q1’21 gross margin at 14.5% and
arrive at EUR 15.3m EBITDA with our revenue and operative cost assumptions.
Suominen recently announced the sale of its minority stake in Amerplast, a
plastic packaging business, and the transaction will have a positive EUR 3.7m
impact on financial items. The sale is not all that meaningful in the big
picture given the fact that Suominen divested the majority share already in 2014
to focus on nonwovens. It will however further strengthen the already strong
balance sheet.

Cautious earnings multiples following the record year

Suominen remains valued at modest multiples of around 6x EV/EBITDA and 10x
EV/EBIT on our estimates for this year. We continue to see upside on these
levels as Suominen’s earnings are stabilizing and cash flow generation is
strong. We retain our EUR 6.5 TP and BUY rating.

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DETECTION TECHNOLOGY - LOOKING FOR SIGNS OF RECOVERY IN SBU

21.04.2021 - 08.58 | Preview

Detection Technology will report its Q1 result next Tuesday, April 27th, at 9:00
EET. As usual, we look forward to hearing the latest developments and outlook
regarding the security, industrial and medical imaging markets. We expect DT to
return to net sales and EBIT growth path this year, with the help of continued
good performance in MBU and a recovery in SBU. We maintain our previous target
price of €28.5 ahead of the earnings report, our recommendation is now HOLD
(prev. BUY).

Read more

Light in the end of the SBU tunnel

In its Q4 report, DT was cautiously optimistic that SBU growth is turning a
corner. SBU sales will still decrease in Q1 y/y, but start growing in Q2,
although demand is still uncertain, as for example China’s critical
infrastructure and rail transport recovery projects have progressed slowly. MBU
sales are expected to grow double digit in H1/2021. DT’s total net sales are
expected to decrease in Q1 and grow in H1 of 2021. We expect Q1 net sales to
decline 4% to 19.2 MEUR (19.1 MEUR cons) and Q1 EBIT of 2.2 MEUR (1.9 MEUR
cons).

 SBU split into two separate segments: SBU and IBU (Industrial Solutions
Business Unit)

DT announced in conjunction with its Q4 result that it is splitting SBU into two
separate business units to better boost both BU’s development. The new SBU
focuses solely on security application sales, while the newly launched
Industrial Solutions Business Unit (IBU) focuses on the industrial segment. In
2020, IBU accounted for EUR 11.6m (27%) of SBU sales and 14% of total sales. As
a result of the new segment, MBU currently represents the biggest segment with
approximately 50% of sales thanks to strong momentum in MBU and pandemic
headwinds in SBU. Industrial market is categorized as higher margin, but smaller
volumes, a more fragmented customer base, and a variety of end applications. DT
has said it aims to complement its industrial portfolio with software and
algorithms. DT expects IBU sales to grow in H1. We have incorporated the new
segment data with 2020 comparison figures into our models.

 We maintain our previous target price of €28.5

Based on the new segment data, we have slightly calibrated our estimates
upwards, but overall picture looks the same. We expect both net sales and EBIT
growth to recover in 2021e with the help of continued good performance in MBU
and a recovery in SBU. We maintain our previous target price of €28.5 ahead of
the earnings report, our recommendation is now HOLD (prev. BUY).

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GOFORE - SLIGHT WEAKNESS BUT STILL LOOKING GOOD

20.04.2021 - 09.30 | Company update

Gofore’s Q1 showed slight weakness y/y due to working day differences and lower
billing rates due to changes in a customer’s deliveries, but overall progress
remains good. With the recent share price rally, we lower our rating to HOLD
(BUY), with a TP of EUR 21.0.

Read more

Slight weakness in relative profitability
Gofore reported Q1/21 net sales of EUR 25.2m (Evli EUR 23.5m), for a growth rate
of 34.1% y/y, and adj. EBITA of EUR 3.5m (Evli 3.7m). The relative profitability
was slightly lower than expected and lower than in the comparison period, with
an adj. EBITA-% of 13.9% (Q1/20: 16.8%). This was due to the lower number of
working days and changes in project deliveries relating to Gofore’s largest
customer, which led to a lower than expected billing rate. On a general level,
apart from the slightly weaker relative profitability, the Q1 report did not
contain any noteworthy negatives, and customer demand appears to have continued
to be at a healthy level.

Growth pace still set to continue strong
We expect net sales of EUR 103.2m and an adj. EBITA of EUR 14.3m in 2021, a y/y
sales and adj. EBITA growth of 32.4% and 31.0% respectively. According to
Gofore’s guidance the net sales and adj. EBITA are expected to grow in 2021
compared to 2020. Growth is mainly driven by the Qentinel Finland acquisition in
September 2020 and the CCEA + Celkee acquisition in March 2021. Furthermore, we
expect for Gofore to continue on its track of good organic growth and aided by a
good order intake achieve double-digit organic growth figures. With the slight
weakness in relative profitability in Q1 and potential further weakness in Q2
from the project delivery changes of Gofore’s largest customer we expect
full-year margins to decrease slightly compared with 2020.

HOLD (BUY) with a TP or EUR 21.0
Gofore’s share price has rallied some 20% since our previous update in March.
With our estimates and the investment case overall intact we retain our target
price of EUR 21.0. With valuation pushing clearly above 30x 2021 P/E and ahead
of peers we downgrade our rating to HOLD (BUY).

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VERKKOKAUPPA.COM - EXPECTING GOOD Q1 FIGURES

19.04.2021 - 09.40 | Preview

Verkkokauppa.com reports its Q1 result on this week’s Friday, 23rd of April. We
have made small estimate adjustments and expect Q1 sales to grow by 7.5% y/y to
EUR 135m. We expect adj. EBIT of EUR 5m. We retain our rating “BUY” with TP of
EUR 10.5 (9.5).

Read more

We expect sales growth of 7.5% in Q1

We expect Verkkokauppa.com to report strong Q1 figures on Friday. The
coronavirus situation remained severe during the first quarter and due to the
restrictions people have stayed more at home. This should continue to support
online sales, benefiting Verkkokauppa.com. Additionally, most of Finland had a
proper winter which we expect to boost sales of sport and outdoor equipment.
Lower level of wholesale sales should also have a positive impact on gross
margin. We have slightly increased our H1’21E estimates ahead the Q1 result. We
expect Q1’21E sales to grow by 7.5% y/y to EUR 135m (cons. EUR 134m) while we
expect adj. EBIT of EUR 5.0m (cons. EUR 4.8m).

Domestic purchases are expected to remain high during ‘21

The coronavirus situation has prolonged and even though the Finnish population
is currently being vaccinated the pace is slow and it will take a while to get
back to normal life. We expect the situation to normalize towards the end of the
year, but we expect that for instance traveling abroad will remain in a low
level throughout 2021. Thus, consumption will continue to be more focused on
domestic purchases, supporting 2021 sales. The company introduced its refined
strategy for 2021-2025 earlier this year and it targets to reach sales of EUR
1bn and EBIT margin of 5% by the end of 2025. We expect the company’s good
momentum to continue with 21E-23E sales growth of 6-7% and adj. EBIT margin of
~4%. We however highlight that the competition is likely to continue tight after
the pandemic thus profitable growth doesn’t come easy.

We keep our rating “BUY” with TP of EUR 10.5 (9.5)

We expect 21E sales to grow by ~7% to EUR 594m (cons. EUR 592m) and adj. EBIT of
EUR 23.6m (cons. EUR 23m). On our estimates, the company trades with 21E-22E
EV/EBIT multiple of 16.8x and 15.6x, which is 17% discount compared to the
online-focused Nordic and European peers in 21E and 11% premium in 22E. We keep
our rating “BUY” with TP of EUR 10.5 (9.5).

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TALENOM - CONTINUING RAPID ACQUISITION PACE

16.04.2021 - 09.30 | Company update

Talenom acquired Balance-Team Oy, a specialist in financial management for
associations, and raised its 2021 sales guidance to EUR 80-84m (prev. EUR
78-82m). We now expect growth of 24.6% in 2021. We retain our HOLD-rating with a
target price of EUR 12.0 (11.5).

Read more

Acquired Balance-Team Oy and raises sales guidance
Talenom expands its operations in Finland by acquiring Helsinki-based
Balance-Team Oy, a specialist in financial management for associations. The
acquisition will make Talenom a leading provider of financial management
services for nonprofit organisations in Finland. The sales and EBITDA in 2020 of
the transferring operations were EUR 2.7m and EUR 1.0m respectively. The share
capital of the transferring operations was transferred to Talenom on April 15th.
The transaction price is EUR 5.3m, implying an approx. price of 5.0x EV/EBITDA
on 2020 figures, to be paid 50/50 in cash and shares. Due to the acquisition
Talenom raises its sales guidance for 2021 from EUR 78-82m to EUR 80-84m. The
EBIT guidance (EUR 14-16m) remains intact.

Rapid growth in 2021 with our estimate at 24.6%
The guidance revisions did not come as a major surprise given the guidance being
raised already in March due to acquisitions, while the EBIT guidance quite as
expected remains intact. The pace of acquisitions has been rapid so far during
H1 and a further guidance revision is not completely unlikely if the pace
continues. We have adjusted our 2021 sales estimate to EUR 81.2m, implying a
growth of 24.6%, with our EUR 15.3m EBIT estimate intact. Talenom reports Q1
results on April 26th, with our sales and EBIT estimates at EUR 19.9m and EUR
4.4m respectively.

HOLD with a target price of EUR 12.0 (11.5)
In light of the accelerating growth pace we adjust our target price to EUR 12.0
(11.5) and retain our HOLD-rating. Our target price values Talenom at approx.
45x 2021 P/E, which we see as justifiable given the stability of the business
and the rapid profitable growth.

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EXEL COMPOSITES - MANY SUSTAINED TAILWINDS ADD UP

16.04.2021 - 09.25 | Company report

Exel continued to perform despite the pandemic. In our view the company remains
positioned for strong organic growth in the years to come. The strategic
priorities now work solid. Our TP is EUR 11 (10); retain BUY rating.

Read more

The strategic priorities have already delivered results

In our view Exel Composites is a competitively positioned player in the
materials value chain and operates in a niche that has a strong long-term growth
outlook. The company manufactures composites for demanding industrial
applications. Strategy execution paid off in 2019-20 as adjusted operating
profit almost doubled to EUR 9.7m in FY ’20 from the level seen in FY ’18. The
excellent financial performance was due to a pick-up in organic growth as well
as successful cost reduction measures, both of which helped the company to scale
the relatively high fixed cost base. Exel seems to have found an advantageous
positioning within the Wind power customer industry but also in areas like
Buildings and infrastructure, among many others.

Growth outlook continues to support profitability gains

Exel posted a 5% organic top line growth last year despite the pandemic. Wind
power was a big driver but there were other notable positives such as Machinery
and electrical. Transportation and Telecommunications were the only two customer
industries, out of the seven, with revenue declines. The pandemic may still hurt
Transportation demand this year but in our view the area has good long-term
outlook. Telecommunications is the one industry with a bit muted outlook but
even there the situation may improve with the rollout of 5G. Exel guides
increasing revenue and adjusted EBIT for this year. We estimate 7% growth and an
additional EUR 1m EBIT gain. We view Exel positioned for ca. 5-6% CAGR in the
years to come.

We see more room for earnings-based multiple expansion

Exel has been historically valued around 8x EV/EBITDA and 0.9x EV/S. The current
valuation is ca. 8.5x EV/EBITDA on our estimates for this year, in other words
not that high in the historical context even though the shares have appreciated
a lot. Profitability gains have justified the rally. The valuation is now
historically rich in terms of EV/S, but we also find this justified since the
strategy is poised to deliver more in the years to come. Our TP is now EUR 11
(10) per share. We retain our BUY rating.

Open report


PIHLAJALINNA - CMD NOTES

31.03.2021 - 09.15 | Company update

Pihlajalinna held its CMD yesterday, 30th of March. The focus of the event was
on the company’s strategic priorities and the future of the social and
healthcare market. Financial targets remained unchanged. Thus, there were no
changes in the big picture. We keep our rating “BUY” with TP of EUR 13.0 (12.0).

Read more

New opportunities in both, public and private side

Pihlajalinna highlighted its strategic priorities for the upcoming years as the
market is changing in many ways (SOTE-reform, aging population etc.). The
company aims to strengthen its already strong partnership with the public side
and to engage in close cooperation with the future wellbeing services counties.
In addition, Pihlajalinna will make renewals to its private services with new
service concepts and digital innovation. Further, the company will continue to
strengthen digitalization. The company has already had a strong focus on this
and the importance of developing new digital solutions has only increased during
the pandemic. The long-term financial targets (EBIT margin of over 7% and net
debt/EBITDA under 3x) remained unchanged.

Big picture is unchanged

The main market drivers are unchanged as the Finnish population is rabidly aging
which increases social and healthcare expenditures. Digitalization offers new
opportunities and can improve efficiency. In addition, individuals’ interest in
their own health is increasing which creates new opportunities in the preventive
social and health care. The company seemed to be relatively positive about the
future wellbeing services counties and cooperation opportunities stemming from
these. However, Pihlajalinna has also strengthened its positioning e.g. in the
occupational healthcare market and has widened its cooperation with insurance
companies which reinforces our view that the company can grow in both, public
and private side. Expanding the service network should also provide support for
future partnerships.

“BUY” with TP of EUR 13 (12)

We have kept our estimates intact and expect 21E revenue growth of ~10% and adj.
EBIT of EUR 27.3m (adj. EBIT margin of 4.9%). In 22E and 23E, we expect revenue
growth of 5% and 3%. We expect profitability improvement to continue and expect
adj. EBIT margin of 5.4% in 22E and 5.6% in 23E. With our estimates, the company
trades with 21E-22E EV/EBIT multiple of 16.3x and 13.8x which is 14% discount
compared to the peers. We keep our rating “BUY” with new TP of EUR 13 (12).

Open report


ELTEL - DIVESTS ITS HIGH VOLTAGE BUSINESS IN GERMANY

22.03.2021 - 17.45 | Analyst comment

Read more

Eltel has signed an agreement to divest its German High Voltage business to
ENACO, a German service provider in the energy sector. Eltel classified its
German High Voltage business as assets held for sale at the end of 2020 and the
revaluation had EUR -5.7 million impact on Group EBIT in Q4/2020. The
transaction is estimated to have negative cash flow effect of EUR 3.8 million.
Eltel will as part of the divestment engage ENACO as a subcontractor for the
completion of certain projects, which are expected to be completed during 2021
and 2022. The divestment is subject to customary approvals, and the transaction
is expected to close during Q2/2021.

The divestment is in line with Eltel’s strategy and strengthens Eltel’s focus on
the Nordic countries in which it has a market-leading position and the business
model is more stable and repetitive. In 2020, Eltel’s German High Voltage
business had about 75 employees and net sales of about EUR 10 million. After the
divestments of the High Voltage and Communication business (in Q2/2020), Eltel
has only the Smart Grids business left in Germany, which accounted for a smaller
share of German net sales in 2020.

The divestment is relatively small and therefore has no effect on our current
forecasts. In our estimates, we have already forecast the net sales of other
business to decrease by EUR 26.9 million and we expect the share of other
business to be ~10% of group net sales in 2021E. We maintain our TP of SEK 30
with BUY.

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TALENOM - FURTHER GROWTH IN SWEDEN

19.03.2021 - 08.30 | Company update

Talenom announced the acquisition of two accounting firms in Sweden and raised
its net sales guidance to EUR 78-82m (prev. EUR 75-80m). We retain our
HOLD-rating and target price of EUR 11.5.

Read more

Two acquisitions in Sweden, net sales guidance raised

Talenom continues to expand in Sweden by acquiring accounting firms Crescendo AB
and Progredo AB and raised its net sales guidance for 2021. The acquired
businesses had combined net sales of EUR 2.3m in 2020 and operating profit of
EUR 0.3m. With the acquisitions Talenom expands to two new municipalities in
Sweden, Östersund and Åre. As a result of the acquisitions Talenom raised its
net sales guidance to EUR 78-82m (prev. 75-80m). The acquired businesses will be
transferred to Talenom on April 1st, 2021. The acquisitions will not increase
operating profit in the short term due to integration costs and the depreciation
of the transaction and the operating profit guidance remains intact at EUR
14-16m. The purchase price at maximum corresponds to 1.1x and 8.0x net sales and
EBIT respectively.

Minor increase to sales estimates

We have raised our 2021 net sales estimate to EUR 78.9m (prev. 76.7m) due to the
acquisition and an overall minor increase in net sales expectations, with our
operating profit estimate intact at EUR 15.3m. With the net sales guidance being
revised this early on in the year, potential further acquisitions could likely
prompt further revisions later on during the year, although the impact on
earnings would likely not be as significant. The increased growth through the
acquisitions, however, provide an additional base for continued organic growth
and ramp up of operations in Sweden in the coming years.

HOLD-rating and target price of EUR 11.5

With only rather minor revisions to our estimate revisions we retain our target
price of EUR 11.5 and HOLD-rating. Our target price values Talenom at approx.
43.5x 2021e P/E.

Open report


ENERSENSE - INITIATING COVERAGE WITH BUY

17.03.2021 - 09.25 | Company report

We initiate coverage of Enersense with a BUY rating and a TP of EUR 9.7.
Enersense’s turnaround in profitability progressed well in 2020 and, in our
view, the valuation looks moderate considering Enersense’s increased and
healthier order backlog as well as potential synergies of the Empower
acquisition.

Read more

2020 was a big year for Enersense
Enersense International Oyj is a service provider of emission-free energy
solutions in the industry, energy, telecommunication, and construction sectors.
In 2020, Enersense’s business changed significantly. Enersense acquired Empower,
thus expanding its business from recruiting and resource management services to
a solution provider for the Smart industry, Power, and Connectivity markets.
Enersense also managed to improve its EBITDA from EUR -0.8m in 2019 to EUR 7.2m
in 2020. The focus in 2021 is on improving profitability, growing in domestic
and selected international markets, and continuing the integration of the
Empower acquisition.

Our estimates for 2021E are at the midpoint of the guidance
In 2021E, we expect Enersense’s net sales to grow strongly as Empower’s figures
are included in net sales for the full year. The order backlog has increased
significantly from EUR 130m in August 2020 to EUR 300m at the end of 2020 and we
expect this strong order inflow to support Enersense in reaching net sales of
EUR 230m. In 2022-23E, we forecast the group revenue to grow by 3.2% and 3.0%,
respectively. We estimate adj. EBITDA to increase from EUR 8.9m (6.2% margin) to
EUR 13.5m (5.9% margin) in 2021E driven by the consolidation of Empower’s
full-year figures, a healthier project portfolio, and streamlining of
operations. We expect the synergies of the Empower integration to be more
visible in Enersense’s profitability from 2022 onwards and EBITDA margin to
increase to 6.5% in 2022E and 6.8% in 2023E.

BUY with a target price of EUR 9.7
In our view, the valuation looks moderate considering Enersense’s increased and
healthier order backlog as well as potential synergies of the Empower
acquisition. On our estimates for 2022E, Enersense is trading at EV/EBITDA of
5.5x and adj. P/E of 10.7x, which translate into discount of 21-28% to our peer
group median. We initiate coverage with a BUY-rating and a target price of EUR
9.7. Our TP values Enersense at EV/EBITDA of 6.1x and adj. P/E of 11.8x for
2022E, which are still at 13-21% discount to peer group, reflecting Enersense’s
lower profitability profile and as we look for more signs of further margin
improvement and faster organic growth. If Enersense manages to increase net
sales and improve margins in line with the midterm financial targets, there is
further upside potential in valuation.

Open report


GOFORE - UPGRADE TO BUY

08.03.2021 - 09.30 | Company update

Gofore’s H2 results showed little signs of weakness and with the more recent
acquisitions the growth pace is set to continue well into double-digit figures.
We upgrade our rating to BUY (HOLD) with a target price of EUR 21.0 (16.0).

Read more

Strong organic growth in 2020 despite pandemic
Gofore reported H2 revenue of EUR 40.6m (pre-announced) and EBITA and adj. EBITA
figures of EUR 5.0m/5.1m respectively (Evli EUR 4.8m/5.5m). The BoD proposes a
dividend distribution of EUR 0.24 per share (Evli EUR 0.25). In 2021 Gofore
expects that its revenue and adj. EBITA in 2021 will grow compared to 2020.
Despite the pandemic, Gofore posted solid organic growth figures of 15.5% for
the full-year 2020 and total growth of 21.7%.

Rapid growth to continue
Gofore completed the acquisition of change execution consulting specialist CCEA
and its fully owned subsidiary Celkee, expected to have a revenue impact of
approx. EUR 6m in 2021. With the newest acquisition and the Qentinel Finland
acquisition in the latter half of 2020 as well as expectations of around 10%
organic growth we now expect revenue growth of 28% in 2021, rapidly closing in
on over EUR 100m annual sales. We expect adj. EBITA margins to remain relatively
flat near the 15% adj. EBITA-% target, with the low scalability of the business
model providing little further upside. Gofore had a healthy cash position of EUR
21m at the end of 2020, supporting potential further acquisitions. Overall
demand appears to have remained at good levels after the initial dip in the
early stages of the pandemic and the outlook remains favourable.

BUY (HOLD) with a target price of EUR 21.0 (16.0)
On our revised estimates we adjust our target price EUR 21.0 (16.0), valuing
Gofore at approx. 30x 2021 P/E, and raise our rating to BUY (HOLD). Compared to
peers, near-term valuation is quite stretched, but the solid performance and
expectations of rapid growth along with further M&A potential certainly merits a
higher valuation.

Open report


GOFORE - EXPECTATIONS FAIRLY WELL MET

05.03.2021 - 09.30 | Earnings Flash

Gofore’s EBITA/adj. EBITA of EUR 5.0m/5.1m in H2 were somewhat in line with
expectations (Evli 4.8m/5.5m). Revenue grew 32.5% to EUR 40.6m in H2
(pre-announced). Revenue and adj. EBITA in 2021 are expected to grow compared
with 2020. Gofore’s BoD proposes a dividend of EUR 0.24 per share (Evli EUR
0.25).

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 * Gofore’s H2/20 net sales amounted to EUR 40.6m (pre-announced), with sales
   growth of 32.5% compared to H2/19 figures. Q4 was particularly strong, with
   growth of 40%, of which roughly half was attributable to organic growth and
   the other half to inorganic growth from the Qentinel Finland acquisition.
 * EBITA and adj. EBITA in H2 amounted to EUR 5.0m and EUR 5.1m respectively,
   somewhat in line with our estimates (Evli EUR 4.8m/5.5m), at margins of
   12.3%/12.7%. EBIT amounted to EUR 4.3m (Evli EUR 4.3m), at a 10.5%
   EBIT-margin.
 * Guidance for 2021: Gofore estimates that its revenue and adj. EBITA in 2021
   will grow compared to 2020.
 * Dividend proposal: Gofore’s BoD proposes a dividend distribution of EUR 0.24
   per share (Evli EUR 0.25).
 * The number of personnel at the end of the period was 724 (H2/19: 582).

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CIBUS NORDIC - STILL SOME YIELD IN STORE

26.02.2021 - 09.30 | Company update

Cibus’ Q4 report didn’t serve surprises. Our view on Cibus remains to a large
extent unchanged, however we update our TP to SEK 170 (165) to reflect minor
yield compression in the Swedish market. We retain our HOLD rating.

Read more

Transfer to the Nasdaq Stockholm main list happens in H1

Cibus’ EUR 16.7m Q4 net rental income was in line with our EUR 16.6m estimate.
Administration expenses amounted to EUR 1.8m vs our EUR 1.5m estimate (there
were non-recurring costs to the tune of EUR 0.5m). The planned switching to the
Nasdaq Stockholm main list, to be completed in H1’21, as well as costs for
conducting an inventory of fittings and equipment in the Swedish portfolio
elevated administration expenses temporarily. Operating income was therefore EUR
14.8m vs our EUR 15.1m estimate. Net financial costs amounted to EUR 5.5m,
compared to our EUR 5.2m estimate. There was a negative EUR 0.5m charge due to
currency exchange rates. Net operating income then amounted to EUR 9.3m while we
expected EUR 9.9m.

Still plenty of smaller property deals in the pipeline

Portfolio net rental income performance remains stable. Cibus has some
small-scale plans to develop e.g. parking lots attached to the properties. The
company also says it has plans for some adjacent residential developments in the
Swedish portfolio. We understand these would entail only limited balance sheet
risks. Cibus sees the Finnish market values stable and slight yield compression
in the Swedish market. Last year was a banner for Cibus in terms of acquisition
volume. The EUR 386m spree however doesn’t eat from this year’s target; Cibus is
confident about completing another EUR 50-100m of add-ons in 2021.

There is upside if the underlying market yields compress

Cibus remains valued at 1.12x EV/GAV and 1.35x P/NAV. We view this premium level
appropriate as Cibus still delivers high yields in comparison to other listed
Nordic property portfolios. In our opinion the Nordic grocery and daily-goods
store property space has some additional yield compression potential,
considering the attractive 6% valuation levels where Cibus has been lately able
to transact even relatively large (above EUR 100m) portfolios. We update our TP
to SEK 170 (165) in anticipation of modest Swedish yield compression. We retain
our HOLD rating.

Open report


SOLTEQ - CONTINUED SOLID PERFORMANCE SEEN

26.02.2021 - 09.30 | Company update

Solteq reported slightly better than expected Q4 results. The solid performance
is set to continue, and we see clear potential for a doubling of EPS in the
coming years. We retain our BUY-rating with a target price of EUR 4.5.

Read more

Q4 slightly above expectations
Solteq reported slightly better than expected Q4 results. Revenue amounted to
EUR 16.4m (Evli EUR 16.1m) and comp. EBIT to EUR 2.0m (Evli EUR 1.7m). Comp.
growth amounted to 9.3%. The BoD proposed a dividend distribution of EUR 0.15
per share (Evli EUR 0.06). To our understanding the high payout ratio is due to
no dividend payment in 2019, as such corresponding to an accrued two-year
distribution, and we do not expect as high relative payout in the future.

2021 outlook favourable
In 2021 Solteq expects Group revenue to grow clearly and operating profit to
improve. The profitability guidance sounds soft but with the on-going pandemic
and the related uncertainties the guidance is understandably more cautious this
early on in the year. We expect sales growth of 8.9% (prev. 3.7%) and an approx.
14% improvement in comp. EBIT to EUR 6.6m (prev. 5.5m). Growth and profitability
is on our estimates largely attributable to Solteq Software, in particular due
to project implementations and thereafter following accrual of recurring revenue
from the Utilities-sector orders received in 2020. We see clear potential for a
doubling of EPS during 2021-2022 compared with 2020, noting that 2020 was
affected to some extent by non-recurring financial expenses.

BUY with a target price of EUR 4.5 (1.9)
Solteq’s share price has over doubled since our previous update. Compared with
the Nordic software peers, valuation is still not very challenging. With Solteq
Software on our revised estimates contributing more clearly to growth and
earnings along with overall higher earnings estimates higher multiples are
certainly justifiable. We raise our TP to EUR 4.5 (1.9), valuing Solteq at
approx. 23x 2021 P/E, BUY-rating intact.

Open report


ELTEL - INITIATING COVERAGE WITH BUY

26.02.2021 - 09.25 | Company report

We initiate coverage of Eltel with BUY rating and a TP of SEK 30. We see that
Eltel has the potential to succeed in its turnaround and, as such, we expect
Eltel’s profitability to improve in the coming years and net sales to turn to
growth in H2/2021. In our view, the margin improvement potential is not fully
reflected in the current share price.

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Eltel is in the midst of its turnaround journey
Eltel is the leading Nordic field service provider for critical power and
communication networks. Eltel’s development since the IPO in 2015 did not meet
expectations, and following a strategic review in 2017, Eltel has focused on its
core businesses, Power and Communication in the Nordics, and the company is
currently in the midst of a turnaround journey. The focus is on improving
profitability, restructuring non-performing businesses, and strengthening its
financial position, with first signs of operational improvement already visible.

We expect the recovery in margins to continue
In 2021E, we expect that net sales will decrease by 2.3% to EUR 916.8 million
due to the focus on improving profitability and restructuring non-performing
businesses. We expect net sales to turn to growth in H2/2021 and we see the
targeted growth rate of 2-4% in the Nordics achievable from 2022 onwards. In
2022-23E, we forecast net sales to grow by 1.6% and 1.9% driven by growing 5G
demand in the Nordics, as well as new frame agreements and contract expansions.
Eltel has continued to take measures to improve operational efficiency and its
exposure to risky and unprofitable projects has reduced over the past couple of
years. In line with the guidance, we forecast operative EBITA margin to grow
from 1.2% in 2020 to 2.6% in 2021E. Despite the right actions, we are more
cautious in our profitability estimates compared to Eltel’s 5% EBITA margin
target by 2023 and expect operative EBITA margins to be 3.3% and 3.8% in
2022-23E.

BUY with a target price of SEK 30
Eltel is currently moving in the right direction thanks to a healthier balance
sheet, better quality of the order book with a focus on stable Nordic countries
and a reduced risk-level of projects. On our estimates for 2022-23E, Eltel is
trading at EV/EBITDA of 7.7x and 7.0x, which translate into discount of 11-14%
to our peer group median. In our view, Eltel has potential to improve its
profitability and the margin improvement potential is not fully reflected in the
current share price. We initiate coverage of Eltel with a BUY-rating and a TP of
SEK 30. Our TP values Eltel at EV/EBITDA of 8.3x and 7.6x for 2022-23E, which
are still slightly (~7%) discount compared to our peer group, reflecting Eltel’s
lower profitability profile and as we look for more signs of further
transformation progress.

Open report


CIBUS NORDIC - RENTAL PERFORMANCE AS EXPECTED

25.02.2021 - 09.30 | Earnings Flash

Cibus’ Q4 report was unsurprising, although administration and financial
expenses were slightly higher than we estimated.

Read more

 * Cibus Q4 rental income was EUR 17.6m, compared to our EUR 18.0m estimate.
 * Net rental income amounted to EUR 16.7m vs our EUR 16.6m estimate.
 * Operating income was EUR 14.8m while we expected EUR 15.1m. Administration
   expenses, at EUR 1.8m, were a bit higher than our EUR 1.5m estimate.
 * Net operating income stood at EUR 9.3m vs our EUR 9.9m estimate. The EUR 5.5m
   financial expenses were higher than our EUR 5.2m estimate.
 * Annual net rental income capacity is now EUR 72.6m.
 * The portfolio was valued at EUR 1,273m and thus EPRA NAV was EUR 12.1 (11.8)
   per share.
 * Net LTV ratio amounted to 61.3% (61.3%).
 * Occupancy rate was 95.6% (95.7%).
 * WAULT was 5.5 years at the end of Q4.
 * Annual dividend is proposed at EUR 0.94 per share, compared to our EUR 0.93
   estimate. The dividend is to be divided into twelve monthly installments.

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SOLTEQ - SOLID FINISH TO 2020

25.02.2021 - 09.15 | Earnings Flash

Solteq’s Q4 was slightly above expectations, with revenue at EUR 16.4m (Evli EUR
16.1m) and comp. EBIT at EUR 2.0m (Evli EUR 1.7m). Solteq expects that Group
revenue in 2021 will grow clearly and for the operating profit to improve.
Dividend proposal EUR 0.15 (Evli EUR 0.06).

Read more

 * Net sales in Q4 were EUR 16.4m (EUR 157m in Q4/19), in line with our
   estimates (Evli EUR 16.1m). Growth in Q4 amounted to 4.5% y/y. Comparable
   growth amounted to 9.3%. Comparable growth was attributable to both segments.
   20.6% of sales came from outside Finland.
 * The operating profit and comparable operating profit in Q4 amounted to EUR
   1.8m and 2.0m (EUR 1.7m/1.7m in Q4/19), slightly above our estimates (Evli
   EUR 1.7/1.7m). Capitalized product development investments during 2020
   amounted to EUR 3.0m. Investments in 2021 are expected to amount to EUR 2.5m.
 * Solteq Digital: Comparable revenue in Q4 amounted to EUR 10.6m (Q4/19: EUR
   10.2m) vs. EUR Evli 10.9m. The comp. EBIT was EUR 0.9m (Q4/19: EUR 0.3m) vs.
   Evli EUR 1.0m.
 * Solteq Software: Revenue in Q4 amounted to EUR 5.8m (Q4/19: EUR 4.8m) vs.
   Evli EUR 5.2m. The comp. EBIT was EUR 1.1m (Q4/19: EUR 0.6m) vs. Evli EUR
   0.7m.
 * Guidance for 2021: group revenue is expected to grow clearly and operating
   profit to improve.
 * Dividend proposal: EUR 0.15 (Evli EUR 0.06)

Open report


TOKMANNI - THE ERA OF DISCOUNT RETAILING

24.02.2021 - 09.45 | Company report

Tokmanni - The era of discount retailing Equity Research Read full report here →
Tokmanni’s 2010-2020 revenue CAGR was 5.4%. At the end of 2020, Tokmanni had 192
stores across the country and it is the largest general discount retailer in
Finland. We expect 21E revenue growth of 1.5% and adj. EBIT margin of 9%. We
keep our rating “BUY” with TP of EUR 20.

Read more

Largest general discount retailer in Finland

Tokmanni is the largest general discount retailer in Finland. Tokmanni’s revenue
CAGR in 2010-2020 was 5.4%. Tokmanni reached its targeted EUR 1bn in sales in
2020 with further store network expansion and strong LFL growth. Revenue grew by
13.6%. The company also reached its adj. EBIT margin target of ~9% (9.3%) last
year. The company had 192 stores across Finland at the end of 2020 and 98.8% of
Tokmanni’s revenue came from physical stores.

2020 was a record year

2020 was exceptional year due to the coronavirus and the company clearly
benefited from the changed environment and consumer behavior as LFL revenue
increased by 12.3%. It is also noteworthy that the company has been able to
attract new customers with broad product assortment and affordable prices as the
share of new customers was 20% in 2020. The company targets to increase its
retail selling space annually by 12,000m2 which means approx. 5 new stores per
year. Additionally, Tokmanni’s long-term target is to achieve low single digit
LFL revenue growth. The company will set its refined strategic targets in
connection with the CMD which takes place in March.

“BUY” with TP of EUR 20

We expect 21E revenue to increase by 1.5% to EUR 1089m. In 22E-23E we expect
revenue to grow by 3.5% and 3.4%, respectively. We expect 21E adj. EBIT to be on
a par with last year and adj. EBIT margin of 9%. In 22E, we expect adj. EBIT
margin of 9.2% and in 23E, 9.3%. We approach Tokmanni’s valuation through our
scenario analysis and valuation multiples. Our scenario analysis consists of
three scenarios: base case, optimistic and pessimistic. The scenario analysis
yields a fair value of EUR 20. On our estimates, Tokmanni trades with 21E-22E
EV/EBIT multiple of 13.8x and 12.9x, which is 6-7% discount compared to the
Nordic non-grocery peers and 17-18% discount compared to the int. discount
peers. We keep our rating “BUY” with TP of EUR 20.

Open report


FELLOW FINANCE - TIME TO HEAD BACK ON A GROWTH TRACK

24.02.2021 - 09.15 | Company update

Fellow Finance reported H2 results in line with our expectations. Growth is
expected in 2021, with investments into growth and new products seen to keep net
earnings negative. We retain our HOLD-rating and target price of EUR 2.8.

Read more

H2 results in line with expectations
Fellow Finance reported H2 results quite in line with our expectations. Revenue
amounted to EUR 5.3m (Evli EUR 5.5m) and adj. EBIT to EUR 0.7m (Evli EUR 0.7m).
Adj. EPS amounted to EUR -0.02 (Evli EUR -0.01). Commission fees declined 44%
y/y while interest income increased 16%. Facilitated loan volumes declined some
30% y/y. The BoD as expected proposes that no dividend be paid for FY2020.
Fellow Finance expects revenue growth in 2021 compared with 2020 and to remain
slightly unprofitable on net earnings level due to investments into new products
and growth.

Supportive factors for growth in place
We expect growth of 7.5% in 2021 and adj. EBIT and adj. EPS of EUR 0.9m and EUR
-0.04 respectively. We expect growth to be supported by a good traction in
business financing, invoice funding in particular, and easing of temporary
regulations on consumer financing in key markets. Investor sentiment also
appears better compared with mid-2020 and new co-operation agreements such as
the recently announced co-operation with Dynamic Credit also aid loan funding
concerns. The new strategic initiatives within payment and e-commerce financing
will also aid growth but the impact on 2021 will likely not yet be significant.

HOLD-rating and target price of EUR 2.8
We have made some larger downward revisions to our near-term estimates based on
the new guidance. Without clearer signs of Fellow Finance moving towards its
targets of around EUR 23m revenue and 15% EBIT-margin in 2023 we currently do
not see clear upside potential to valuation. We retain our HOLD-rating and
target price of EUR 2.8.

Open report


CIBUS NORDIC - HUNGRY FOR MORE

23.02.2021 - 09.25 | Preview

Cibus reports Q4 results on Feb 25. We update our estimates to include the
latest purchase. We see no big picture changes; we retain our SEK 165 TP, rating
HOLD.

Read more

Cibus’ GAV grew by 43% last year

2020 was an extraordinary year for Cibus only in the sense that the company was
very busy with acquisitions. Cibus acquired about EUR 375m worth of properties
in Finland and Sweden, financed in part by two equity issues that raised a
combined EUR 125m. The first large Swedish portfolio acquisition was completed
in March just before the pandemic lockdown. Cibus completed another large
Finnish portfolio acquisition in December, and we update our estimates
accordingly before the Q4 report. The latest deal adds some EUR 7m in annual net
rental income capacity but will only contribute around EUR 0.3m in Q4. Cibus’
quarterly administration expenses are budgeted at EUR 1.1m; we estimate the Q4
figure a bit higher at EUR 1.5m due to the acquisition. We thus see operating
income at EUR 15.1m. There should be no major extraordinary financial expenses
and so our bottom-line Q4 estimate, before taxes, is EUR 9.9m.

Some more acquisitions are to be expected

The pandemic has had very limited impact on Cibus. Portfolio performance is
unchanged. Cibus still has a long pipeline and is likely to add another EUR
50-100m of assets through smaller transactions this year. Cibus will probably
expand to either Norway or Denmark (or both) in the coming years. The expansion
is somewhat unlikely to happen this year as Cibus would prefer to inspect the
properties on location. Vaccination progress now suggests travel remains
difficult until at least the end of the year. Meanwhile Cibus has plenty of
prospects in Finland and Sweden. The recent EUR 116m in Finnish additions imply
6% net rental yield. The figure represents some 100bps extra on Cibus’ similar
metric, meaning add-ons are attractive. These relatively low valuations however
limit Cibus’ shares current upside potential.

We continue to view valuation neutral

Cibus is valued at 1.13x EV/GAV and 1.37x P/NAV. The premium on book value is
warranted considering Cibus’ still attractive ca. 4.75% yield, compared to the
below 4% yield seen in the wider Nordic property sector. We continue to consider
Cibus’ current valuation neutral. We retain our SEK 165 TP and HOLD rating.

Open report


FELLOW FINANCE - IN LINE WITH EXPECTATIONS

23.02.2021 - 09.15 | Earnings Flash

Fellow Finance’s H2/2020 results were quite in line with expectations, with
revenue of EUR 5.3m (Evli EUR 5.5m) and an adj. EBIT of EUR 0.7m (Evli EUR
0.7m). Fellow Finance expects growth in 2021 but for the result to remain
slightly unprofitable due to growth investments. The BoD proposes that no
dividend be paid for FY2020 (Evli EUR 0.00).

Read more

 * Revenue in H2 amounted to EUR 5.3m (EUR 7.0m in H2/19), slightly below our
   estimates (Evli EUR 5.5m). Revenue declined 24.4% in H2. Compared with H2/19
   commission fees declined by 44% and interest yields increased by 16%.
 * Fellow Finance facilitated loans during H2 for a total of EUR 64m (EUR 92m in
   H2/19), a decrease of 30%. Loan volumes were affected by uncertainty caused
   by the coronavirus pandemic, which interrupted new investments, along with
   temporary regulations in Finland and Poland, which limited loan
   intermediation possibilities.
 * Business financing volumes grew 48% compared to H2/19, with invoice funding
   products in particular faring well during the uncertain times.
 * The adj. EBIT in H2 amounted to EUR 0.7m (EUR 1.0m in H2/19), in line with
   our estimates (Evli EUR 0.7m).
 * The adj. EPS in H2 amounted to EUR -0.02 per share (EUR 0.01 in H2/19), in
   line with our estimate of EUR -0.01.
 * Guidance for 2021: Fellow Finance expects revenue growth compared to 2020 but
   for the result to remain slightly unprofitable due to investments in new
   products and growth.
 * Dividend proposal: The BoD proposes that no dividend be paid for the FY2020
   (Evli EUR 0.00).

Open report


PIHLAJALINNA - UPGRADED TO “BUY”

22.02.2021 - 09.45 | Company update

Pihlajalinna’s Q4 result and dividend proposal outpaced the expectations. We
have increased our 21E estimates and expect revenue growth of 10% and adj. EBIT
margin of 4.9%. We upgrade to “BUY” (“HOLD”) with TP of EUR 12 (10.5).

Read more

Positive surprise with Q4 result

Pihlajalinna’s Q4 result outpaced the expectations. Revenue increased by 2.6%
y/y to EUR 137.2m (135.2m/135.5m Evli/cons). Revenue growth was driven by
increased COVID-19 testing volumes which increased by 67% compared to the
previous quarter. At the same time, customer volumes in private clinics
locations were 10% lower compared to the comparison period. Adj. EBIT improved
by ~31% to EUR 7.3m (5.3m/4.8m Evli/cons). 2020 dividend proposal of EUR 0.20
beat also clearly the expectations (0.12/0.09 Evli/cons).

Revenue streams from several sources

Pihlajalinna’s measures taken towards improved profitability have worked and we
expect the company is able to increase its profitability further. Pihlajalinna
has growth opportunities in several markets and the company has strengthened its
positioning e.g. in the occupational healthcare market (e.g. Työterveys Virta).
The company has expanded its operations in the public side as the services of
Selkämeren Terveys Oy began in the beginning of the year. The Huhtasuo health
center outsourcing started in December. Additionally, Pihlajalinna won a
significant proportion of a competitive bidding process for the outpatient
clinic, surgery, and inpatient services of the Northern Ostrobothnia Hospital
District in early 2021.

“BUY” (“HOLD”) with TP of EUR 12 (10.5)

Pihlajalinna expects 2021 revenue to increase clearly and adj. EBIT to improve
clearly compared to 2020. The company will introduce its updated strategy soon
and we expect to get more color on that in connection with the CMD which takes
place in late March. We expect 21E revenue growth of ~10% (EUR 559m) and adj.
EBIT margin of 4.9% (EUR 27.3m). On our estimates, the company trades with
21E-22E EV/EBIT multiple of 15.6x and 13.2x which translates into 12-13%
discount compared to the peers. We upgrade to “BUY” (“HOLD”) with TP of EUR 12
(10.5).

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NEXT GAMES - INGREDIENTS FOR GROWTH IN PLACE

22.02.2021 - 09.30 | Company update

Next Games H2 results were overall rather neutral, with the highlight being the
continued good publishing operations profitability. The new games appear to be
well on the way but larger scale ramp-up will likely have to wait until H2/2021.
We retain our SELL-rating with a target price of EUR 1.8 (1.6).

Read more

Rather neutral H2, good publishing operations profitability
Next Games H2 revenue was EUR 12.8m (Evli 13.6m) and adj. EBIT EUR -0.2m (Evli
0.5m). Apart from an overly optimistic view on the contribution of the new
projects on our part the H2 figures were quite as expected, with the gross
bookings of the NML and Our World games in line with our expectations. NML
continued on a rather steady trajectory while Our World metrics continued on a
declining trend. Publishing operations EBITDA was at a good level of EUR 3.0m
(Evli EUR 3.4m) and FY2020 publishing operations EBITDA-% was at a commendable
24%.


New games key factor in 2021
Next Games expects revenue in 2021 to amount to over EUR 40m and for EBITDA to
remain positive. Based on the comments for the plans to scale the new games
(Blade Runner Rogue, Stranger Things: Puzzle Tales) we see that in our former
estimates our scaling assumptions may have been too optimistic. The Blade Runner
Rogue game is set for launch in its main market the US in Q1. The Stanger Things
game was launched in certain markets in December 2020 and is set for certain
feature updates before larger scale up. We have adjusted our 2021 revenue
estimate to EUR 44.2m (prev. 50.5m) and EBITDA estimate to EUR 2.1m (1.7m). We
expect larger ramp-up in scaling of games during H2.


SELL with a target price of EUR 1.8 (1.6)
Next Games remains a growth company, with yet little proof of growth on group
level in previous years. Success of new games is crucial, both for growth and
improvements in cash flows, with the proportionately high share of R&D affecting
profitability and cash position. On our new estimates and with increases in peer
multiples we raise our TP to EUR 1.8 (1.6), SELL-rating intact.


Open report


VAISALA - CAUTIOUS OUTLOOK

22.02.2021 - 08.54 | Company update

Vaisala’s Q4 missed expectations, but overall Vaisala managed to perform well in
2020 despite the pandemic affecting especially W&E. IM’s performance was once
again strong, even in difficult environment. Vaisala’s guidance for 2021 was
cautious, despite Vaisala seeing market starting to gradually recover and new
orders picking up nicely. Based on the report, we’ve lowered our 2021-23E
estimates and continue to see valuation expensive, thus we maintain our TP of
32€ and SELL rating.

Read more

Q4 orders received picked up nicely in both BU’s

Vaisala’s Q4 result missed ours and consensus expectations, but strong order
intake growth for both BU’s surprised positively and order book remains at good
level. Q4 net sales decreased by -10% to 106.9 MEUR (109.5 Evli /108 cons). Q4
EBIT came in at 12.2 MEUR (14 Evli / 13.6 cons), resulting in 11,4% EBIT-margin
(Q4’19: 17.7 MEUR, 15% EBIT-margin). Orders received grew +8% to 111.9 MEUR vs.
103.3 MEUR last year. Orders received grew +7% in W&E and +11% in IM. Order book
was 137.8 MEUR vs. 139 MEUR in Q4’19. W&E fell short of our expectations; net
sales decreased by -16% to 67 MEUR vs. 73.5 MEUR our expectation. W&E EBIT was
5.2 MEUR (7.3 MEUR Evli), resulting in 7,8% EBIT-margin (Q4’19: 14,7%). After a
few weaker quarters, IM continued its strong performance, beating our estimates;
net sales grew 10% to 39.9 MEUR vs. 36 MEUR our expectation. IM EBIT was 8.3
MEUR (6.8 MEUR Evli), resulting in 20,8% EBIT-margin (Q4’19: 15,1%). Dividend
proposal is 0.61 (0.63 Evli / 0.63 cons).

 Despite solid performance and expected market recovery, outlook remained
cautious

Looking at 2020, Vaisala managed to perform well despite the pandemic affecting
especially W&E and creating uncertainties regarding deliveries. IM’s performance
was once again strong, even in difficult environment. While W&E 2020 net sales
and EBIT declined -10% and -17,5% respectively (on high comparison figures), IM
2020 net sales and EBIT grew 1% and 22%. In addition, IM is currently seeing
strong growth led by pharmaceutical customer segment which includes COVID-19
vaccine suppliers. Despite continued uncertainties due to the pandemic, Vaisala
sees market gradually recovering in 2021, except for meteorology market in
developing countries. Vaisala issued 2021 guidance expecting net sales between
370–400 MEUR and EBIT between 30–45 MEUR. Pre-Q4, both we and consensus 2021E
expectations were above the EBIT guidance. The outlook was a disappointment,
given the decent performance last year, new orders picking up, lower opex level
and expected market recovery.

Maintain target price of 32 euros and SELL recommendation
 
Based on the report and new guidance, we have lowered our estimates for
2021-23E. In 2021E, we expect +1,6 net sales growth driven by +7% growth in IM,
while we expect W&E growth to be slightly negative. We expect EBIT of 41 MEUR
(10,6 % margin) which is above guidance mid-point, driven by good performance in
IM. On our renewed estimates, Vaisala is still trading at clear premiums
compared to our peer group and we continue to see valuation stretched given the
weaker financial performance compared to peer group. We maintain our TP of 32€
and SELL rating due to lowered estimates and expensive valuation. Our TP values
Vaisala at 21-22e EV/EBIT multiples of 28x and 22x which is still above the peer
group, reflecting Vaisala’s strong sustainability profile, healthy dividend, and
especially IM’s highly profitable growth with possibility of further add-on
acquisitions.

Open report


ENDOMINES - FUNDING SECURED, PRODUCTION AHEAD

19.02.2021 - 13.00 | Company update

With the rather successful completion of the rights issue, raising some SEK
214m, Endomines is now looking to restart production, with first significant
production likely to be seen in H2. We retain our HOLD-rating with a target
price of SEK 2.7 (2.9).

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Earnings clearly short of estimates
Endomines as expected did not report any significant revenue in Q4 (SEK
0.7m/0.5m act.*/Evli), as Friday has been under care and maintenance. EBIT fell
clearly short of our estimates (SEK -99.0m/SEK -16.9m act.*/Evli) due to
payments for claims of the US Grant project and write-downs of assets performed
at the year-end. As expected, no dividend distribution was proposed. *Figures
not reported, derived from Q1-Q3 and 2020 figures.

Production to ramp-up in H2
Endomines did not give a production guidance for 2021, aiming to give a guidance
in connection with the Q1 release. Deepening of the Pampalo is expected to start
mid-H1 while the goal is to have the first gold production by the end of the
year. Production start at Friday will be somewhat dependent on how long the
spring thaw will last but Endomines expects to be able to ramp-up production by
early summer. Endomines completed its rights issue in January, raising approx.
SEK 214m, which is a much-needed support to the previously very tight liquidity
situation. Although the proceeds fell short of the target, the outcome is in our
view still quite decent given the pressed financial situation the company has
been facing. The Coronavirus pandemic is still causing some stir in supply
chains but should not have any major short-term impact given the time the
company has had to prepare for restarting production at Friday.

HOLD with a target price of SEK 2.7 (2.9)
We have made changes to our estimates, with the outcome of the rights issue vs.
the assumed full subscription causing the largest changes to our SOTP model,
along with the slight pressure to gold prices in Q1. We adjust our target price
to SEK 2.7 (2.9) with our HOLD-rating intact.

Open report


MARIMEKKO - SOLID PERFORMANCE CONTINUES

19.02.2021 - 09.45 | Company update

Marimekko’s Q4 result met the expectations with revenue growth of 8% y/y. Adj.
EBIT improved by ~90%. The outlook remains good despite the uncertainties
related to the pandemic. We keep our rating “BUY” with TP of EUR 57 (50).

Read more

Q4 result met the expectations

Marimekko’s Q4 result was somewhat in line with the expectations. Revenue
increased by 8% y/y to EUR 37m (38m/38m Evli/cons.). Revenue was driven by good
wholesale sales development in Finland, EMEA and Scandinavia. Customer numbers
in stores declined as the pandemic situation worsened towards the end of the
year. This impacted negatively on retail sales. On the other hand, retail sales
were supported by strong growth in online sales. Adj. EBIT amounted EUR 5.8
(+90% y/y) vs. 5.0m/4.7m Evli/consensus. Profitability was boosted by increased
sales and decreased fixed costs but at the same time, gross margin declined,
resulting from increased online sales. 2020 dividend proposal is EUR 1.0
(1.2/1.1 Evli/cons.).

The outlook remains bright

Fashion industry has faced enormous losses due to the pandemic but despite the
situation, the management of Marimekko has shown good capabilities of being able
to adjust to the current environment. This reinforces our view of the company’s
ability to grow profitably in the future as well. Marimekko is also benefiting
from the changed consumer behavior where sustainability plays a big role.
Marimekko expects sales in Finland and APAC-region to grow in 2021. Domestic
wholesale sales will be boosted by nonrecurring promotional deliveries and a
vast majority of those will take place in H2’21. Marimekko expects to open ~5-10
new stores and shop-in-shops in 2021 of which most openings will be in Asia.

“BUY” with TP of EUR 57 (50)

The ongoing pandemic situation is still impacting on Marimekko’s sales and we
expect the situation to normalize in H2E. Marimekko expects 21E sales to
increase from 2020 and adj. EBIT margin to be on a par with the long-term target
of 15%. We have slightly increased our estimates and expect 21E sales of EUR
135m (+10% y/y) and adj. EBIT of EUR 20.5m (15.2% margin). On our estimates, the
company trades with 21E-22E EV/EBIT multiple of 20.1x and 16.9x which is 50-70%
premium compared to the premium peers. We see the premium acceptable due to the
strong revenue and profitability development. We keep our rating “BUY” with TP
of EUR 57 (50).

Open report


EXEL COMPOSITES - SHARP APPRECIATION IS JUSTIFIED

19.02.2021 - 09.30 | Company update

Exel beat estimates; we see the share is still not expensive all considered. Our
TP is now EUR 10.0 (7.25), rating BUY.

Read more

Broad positive development continued

Exel recorded EUR 27.5m in Q4 revenue, up 4% y/y. The figure was a bit above the
EUR 27.2m/26.5m Evli/cons. estimates. Wind power’s order timings meant the
segment’s EUR 6.6m top line, down 6% y/y, didn’t meet our EUR 8.9m estimate.
Relative strength in other segments nevertheless helped to make up. Buildings
and infrastructure developed especially strong and Exel continues to see
potential in the segment due to e.g. cable core rods. The segment’s EUR 7.0m Q4
revenue (up 22% y/y) was way above our EUR 5.1m estimate. Favorable mix and
further efficiency gains helped Exel to EUR 2.7m EBIT in Q4 vs the EUR 2.2m/1.8m
Evli/cons. estimates. Operating margin was thus again in line with the above 10%
long-term target. Order intake also grew by 6% y/y, which indicates brisk start
for the year and is notable considering the high comparison figure.

We estimate EBIT at EUR 10.7m this year

Exel is positioned for 5-6% top line growth in the coming years. There are now
other segments rising with Wind power. Wind however remains important and we see
no reason why it wouldn’t contribute growth also this year. Global wind capacity
grows by big numbers and we expect the Exel segment to post double-digit growth
also in FY ’21 (up 19% in FY ’20). The Austrian plant is up and ready to serve
European accounts across many segments, perhaps with a tilt towards Machinery
and electrical, a segment we understand has relatively high gross margins. Exel
already achieved high operating margin last year, and we estimate good potential
for further gains. Since the EUR 8.5m Austrian investment has now been completed
we see a solid organic growth outlook with relatively low EUR 5m annual capex
levels. We make only small adjustments to our estimates.

Valuation is still not demanding all things considered

Exel is valued at ca. 8x EV/EBITDA and 12x EV/EBIT on our FY ’21 estimates. In
our opinion Exel is making solid progress towards long-term targets; we see the
company reaching an annual 10% EBIT margin already in FY ‘22. This achievement
would help the respective earnings multiples to decrease to around 7x and 10x
levels next year. Our TP is now EUR 10.0 (7.25), retain BUY rating.

Open report


SCANFIL - OUTLOOK REMAINS ROBUST

19.02.2021 - 08.50 | Company update

Scanfil’s Q4 didn’t serve any major surprises, but the overall picture turned
even more encouraging. Our new TP is EUR 8.0 (6.5). Our rating is now BUY
(HOLD).

Read more

Q4 figures as well as FY ’21 guidance in line with estimates

Scanfil Q4 revenue, flat y/y at EUR 154m, met the estimates. The Communication
segment’s top line remained a bit soft. This wasn’t big news as the Hangzhou
divestment and low base station product sales were known. The pick-up in
Consumer Applications’ demand was a positive surprise given that the segment had
been underperforming already before the pandemic. Energy & Automation posted a
respectable 18% organic growth. Industrial and Medtec & Life Science performed
close to estimates. We view these two the most stable segments and positioned
for ca. 5% growth in the coming years (it should be noted Medtec & Life Science
hasn’t gained any meaningful demand due to the pandemic). Scanfil thus posted
EUR 10.4m Q4 EBIT, compared to the EUR 10.0m/9.9m Evli/cons. estimates.

Both guidance and comments are encouraging

We revise our estimates up a bit as the guidance implies demand holds even in an
environment best described as extraordinary. Our previous EUR 617m FY ’21
revenue estimate was close to the EUR 620m midpoint; we revise the figure up to
EUR 625m. We continue to expect the same EBIT margin as before and so our EBIT
estimate only increases from EUR 41.6m to EUR 42.2m. This is not a big
quantitative difference, but the report adds confidence. Scanfil says outlook is
perhaps a bit better now than a few months ago, in addition to which gross
margin improved slightly in Q4. It thus seems unlikely the guidance will fail,
particularly considering Scanfil’s history. The company’s balance sheet is ready
for M&A, although any deal is not imminent. Relatively low capex needs also help
the overall valuation picture, even if the share price has gained a lot in
recent months.

Performance and outlook warrant higher valuation

In our opinion Scanfil’s extended track record and robust outlook justify higher
multiples. Our updated EUR 8.0 (6.5) TP values Scanfil at about 8.5x EV/EBITDA
and 12x EV/EBIT on our estimates for this year. Earnings growth would help to
decrease the multiples to respective 8x and 10.5x levels next year. Our TP is
now EUR 8.0 (6.5). Our new rating is BUY (HOLD).

Open report


NEXT GAMES - NO MAJOR SURPRISES

19.02.2021 - 08.45 | Earnings Flash

Next Games' net sales in H2 amounted to EUR 12.8m, slightly below our estimate
(EUR 13.6m Evli). The adj. EBIT was below our expectations at EUR -0.2m (EUR
0.5m Evli). Publishing operations profitability improved to EUR 3.0m (Evli EUR
3.4m) compared with EUR 1.5m in H2/19.

Read more

 * Net sales in H2 amounted to EUR 12.8m (EUR 15.5m in H2/19), slightly below
   our estimate (EUR 13.6m Evli). Net sales in H2 declined 17% y/y. Compared to
   our estimates, gross bookings of published games were quite in line with
   expectations while the new games did not yet contribute as anticipated.
 * The adj. operating profit in H2 amounted to EUR -0.2m (EUR -2.2m in H2/19),
   below our expectations (EUR -0.2m Evli). The EBITDA of publishing operations
   in H2 amounted to EUR 3.0m (Evli EUR 3.4m).
 * EBIT amounted to EUR -1.7m (H2/19: -3.9m), slightly below our estimate of EUR
   -1.3m.
 * TWD: NML (Q3/Q4) - DAU 146k/142k (163k/183k), MAU 456k/429k (479k/651k),
   ARPDAU EUR 0.34/0.31 (0.21/0.25).
 * TWD: OW (Q3/Q4)- DAU 66k/62k (127k/114k), MAU 246k/231k (529k/591k), ARPDAU
   EUR 0.43/0.43 (0.36/0.38).
 * Games in development: Blade Runner Rogue is planned to be launched in the
   main market the US during early 2021. The Stranger Things game was launched
   in the first selected markets in December 2020.
 * Outlook for 2021: Revenue is expected to grow to at least EUR 40m and
   full-year EBITDA is expected to be positive.
 * Next Games’ BoD proposes that no dividends be distributed (Evli EUR 0.00).

Open report


PIHLAJALINNA - Q4 OUTPACED THE EXPECTATIONS

19.02.2021 - 08.40 | Earnings Flash

Pihlajalinna’s Q4 result outpaced the expectations. Q4 revenue amounted EUR
137.2m (+2.6%) vs. EUR 135.3m/135.5m Evli/cons, while adj. EBIT landed at EUR
7.3m vs. EUR 5.3m/4.8m Evli/cons estimates. Dividend proposal is EUR 0.20 vs.
EUR 0.12/0.09 Evli/cons. 2021 revenue is expected to increase clearly and adj.
EBIT is expected to improve clearly compared to 2020.

Read more

 * Q4 revenue was EUR 137.2m vs. EUR 135.3m/135.5m Evli/cons estimates. Revenue
   increased by 2.6% y/y. COVID-19 testing volumes increased by 67% compared to
   the previous quarter. Customer volumes of private clinic locations were ~10%
   lower than in the comparison period.
 * Q4 adj. EBITDA was EUR 15.7m (11.5% margin) vs. EUR 14.1m/14.0m Evli/cons
   estimates.
 * Q4 adj. EBIT was EUR 7.3m (5.3% margin) vs. EUR 5.3m/4.8m Evli/cons
   estimates.
 * Q4 EPS was EUR 0.15 vs. EUR 0.08/0.12 Evli/cons.
 * Dividend proposal is EUR 0.20 vs. EUR 0.12/0.09 Evli/cons.
 * Guidance for 2021E: the company expects revenue and adj. EBIT to improve
   clearly compared to 2020.
 * Pihlajalinna will publish new strategy during the beginning of 2021.

Open report


FINNAIR - WAITING FOR BETTER TIMES

19.02.2021 - 08.05 | Company update

Finnair - Waiting for better times Equity Research Read full report here →
Finnair’s Q4 figures were ugly, as expected. As the pandemic situation prolongs,
we expect slow recovery to start during the summer but better improvement is
expected to start in late 2021. We keep our rating “HOLD” with TP of EUR 0.60.

Read more

Revenue declined by 87% y/y

Once again, Finnair reported ugly quarterly figures, as the coronavirus
situation is not showing any signs of abating. Strict travel restrictions
remained, and there was an overall lack of demand during Oct-Dec. Finnair’s Q4
revenue decreased by 87% y/y to EUR 102m (94m/101m Evli/cons.). Adj EBIT was EUR
-163m (-172m/-167m Evli/cons.). Q4 ASK decreased by 89% and PLF was 29.2%
(-49.8pp). No dividend is distributed for 2020.

Recovery expected to start during the summer

According to the company, the comparable operating loss in Q1 will be of a
similar magnitude as in Q2-Q4’20. The company continues to fly with limited
network during Q1 and estimates that the travel begins to recover from summer
2021 onwards as the vaccination coverage increases and countries start lifting
travel restrictions. However, the visibility remains weak and therefore the
company is not giving revenue guidance for 2021. The company expects that
traffic will recover to 2019 levels in 2023 (measured in ASKs). We expect
Finnair is well positioned once the recovery starts and the profitability should
improve notably due to the permanent cost savings target of EUR 140m from the
beginning of 2022 (compared to 2019).

“HOLD” with TP of EUR 0.60

The State of Finland and Finnair are preparing an unsecured hybrid loan of up to
EUR 400m which is expected to be finalized during the first quarter of 2021. As
the company still has available funding, we are not concerned even if the
pandemic situation continues throughout the summer. We expect H1’21E to remain
extremely weak but slightly better recovery is expected to start in Q3E. We
expect 2021E revenue of EUR 1545m and adj. EBIT of EUR -312m. We highlight that
there are still significant uncertainties with our estimates. We keep our rating
“HOLD” with TP of EUR 0.60.

Open report


INNOFACTOR - ON A PATH OF SOLID PROGRESS

19.02.2021 - 08.00 | Company update

Innofactor reported solid Q4 figures, adjusted for one-offs, and proposed the
first dividend distribution in company history. We expect a pick-up in growth
and continued margin improvement in 2021. We retain our BUY-rating with a target
price of EUR 1.75 (1.45).

Read more

One-offs hampered otherwise solid figures
Innofactor reported in our view solid Q4 earnings. Although EBITDA was below our
estimates at EUR 1.6m (Evli EUR 2.1m), a one-off of approx. EUR 1.0m relating to
a final write-down and cost item of a customer project in Sweden was included,
without which EBITDA would have clearly exceeded expectations. Net sales were
also slightly above our estimates at EUR 18.3m (Evli EUR 17.6m), showing modest
growth of 4.7% y/y. A dividend distribution of EUR 0.04 per share was proposed
(Evli EUR 0.03), with authorization being sought for a further potential extra
dividend of max 0.04 per share, which if granted and utilized in full would
translate to a dividend yield of 5.6%.

Growth and improved profitability expected
Innofactor followed its usual line of guidance, expecting net sales and EBITDA
to increase in 2021 compared with 2020. We expect sales growth of 6.4% and
EBITDA-margins to improve to 13.1% (2020: 10.8%). With the good order backlog
and a balance sheet supportive of acquisitions growth could pick up more
clearly, but uncertainty, especially given the on-going pandemic, is still at
higher levels and as such we are still wary of assuming higher growth figures.
Innofactor is still quite some way from its 20% growth and EBITDA-% target but
the targets do not appear to be quite as out of grasp as earlier.

BUY-rating with a target price of EUR 1.75 (1.45)
On our revised estimates we raise our target price to EUR 1.75 (1.45), valuing
Innofactor at ~14x 2021 PPA adj. P/E, with our BUY-rating intact. Further upside
potential compared to peer multiples still exists, but we consider further
evidence of growth pick-up and earnings improvement mandated to justify a higher
valuation.

Open report


ENDOMINES - PRODUCTION LOOKING TO PICK UP IN H2

18.02.2021 - 11.00 | Earnings Flash

Revenue in Q4 was as expected very limited, with Friday in care and maintenance.
Profitability figures were burdened by US Grant payments and write-downs.

Read more

 * Revenue* in Q4 amounted to SEK 0.7m, with our estimates at SEK 0.5m. The
   Friday mine was put into care and maintenance during Q3 and as such no
   significant new gold concentrate production took place during Q4.
 * EBITDA* in Q4 was at SEK -39.6m, below our estimate of SEK -14.0m. Adj.
   EBITDA* excl. payments for claims of the US Grant project amounted to SEK
   -9.7m, slightly better than expected.
 * EBIT* amounted to SEK -99.0m (Evli SEK -16.9m). EBIT was affected by a clear
   increase in depreciations and write-downs due to write-downs performed at
   year-end.
   *Figures not reported, derived from Q1-Q3 and 2020 figures
 * At Pampalo, deepening of the mine is expected to start in late March/early
   April after mining contractor has been selected and mobilized to the site and
   mining to start later in the year. At Friday the technical problems at the
   mill are being addressed and production is expected to start as soon as
   weather conditions permits in late spring.
 * Liquid assets amounted to SEK 11.3m at the end of the quarter.
 * During January 2021 Endomines carried out its rights issue, raising
   approximately SEK 214m.
 * Endomines has not given a production guidance for 2021 but aims to specify
   its production guidance in connection with the Q1 release.

Open report


FINNAIR - THE SUFFERING CONTINUES

18.02.2021 - 09.35 | Earnings Flash

The pandemic continued to hamper Finnair operations during Q4. Finnair’s Q4’20
adj. EBIT was EUR -163m vs. our expectation of EUR -172m and consensus of EUR
-167m. Revenue decreased by ~87% y/y and was EUR 102m vs. our expectation of EUR
94m and consensus of EUR 101m.

Read more

 * Q4 revenue was EUR 102m (-87% y/y) vs. EUR 94m/101m Evli/cons.
 * ASK decreased by ~89% y/y in Q4. PLF was 29.2% (-49.8 points). Strict travel
   restrictions globally and overall lack of demand forced also Finnair to
   operate with limited network.
 * Q4 adj. EBIT was EUR -163m vs. EUR -172m/-167m Evli/cons. Q4 comparable
   EBITDA was EUR -72m vs. EUR -85m our view.
 * Absolute costs in Q4: Fuel costs were EUR 27m vs. EUR 31m our view. Staff
   costs were EUR 42m vs. EUR 56m our view. All other OPEX+D&A combined were EUR
   209m vs. EUR 190m our view.
 * Unit costs: CASK was 21.10 eurocents vs. 21.02 eurocents our view.
 * No dividend is distributed for 2020.
 * The company expects similar comparable operating loss in Q1’21 as in
   Q2-Q4’20. In Q1, Finnair continues to operate with limited network. As the
   visibility thereafter is weak, the company does not provide a full year
   revenue guidance.

Open report


INNOFACTOR - WRITE-DOWN BURDENED PROFITABILITY

18.02.2021 - 09.30 | Earnings Flash

Innofactor’s Q4 results were on an adj. basis above our expectations. Net sales
amounted to EUR 18.3m (Evli EUR 17.6m), while EBITDA amounted to EUR 1.6m (Evli
EUR 2.1m). EBITDA included one-offs of EUR 1.0m and adj. figures were better
than expected. Dividend proposal EUR 0.04 per share (Evli EUR 0.03). Net sales
and EBITDA in 2021 are estimated to increase compared to 2020.

Read more

 * Net sales in Q4 amounted to EUR 18.3m (EUR 17.4m in Q4/19), slightly above
   our estimates (Evli EUR 17.6m). Net sales in Q4 grew 4.7% y/y.
 * EBITDA in Q4 was EUR 1.6m (EUR 1.6m in Q4/19), below our estimates (Evli EUR
   2.1m), at a margin of 8.7%. EBITDA included a write-off of approx. EUR 1.0m
   relating to a customer project in Sweden. EBITDA excl. NRI’s would have been
   EUR 2.6m, at a margin of 14.0%.
 * Operating profit in Q4 amounted to EUR 0.4m (EUR 0.5m in Q4/19), below our
   estimates (Evli EUR 1.0m), at a margin of 2.2%. EBIT excl. NRI’s would have
   been EUR 1.4m.
 * Order backlog at EUR 60.4m, up 21.4% y/y. Innofactor received several
   significant orders during Q3, which boosted the order backlog in Q4.
 * Guidance for 2021: Innofactor’s net sales and EBITDA in 2021 are estimated to
   increase compared to 2020.
 * Dividend proposal: Innofactor’s BoD proposes a total distribution of EUR 0.04
   per share (Evli EUR 0.03).

Open report


EXEL COMPOSITES - STRONG PROFITABILITY ONCE AGAIN

18.02.2021 - 09.30 | Earnings Flash

Exel Composites’ Q4 top line was slightly above estimates, but the strong
profitability was a clear positive surprise. The overall impression is very
solid.

Read more

 * Exel Q4 revenue was EUR 27.5m, compared to the EUR 27.2m/26.5m Evli/consensus
   estimates. Revenue grew by 3.5% y/y. Q4 growth was strong in Europe and
   Asia-Pacific.
 * Wind power revenue was EUR 6.6m vs our EUR 8.9m estimate (down by 6% y/y).
   Strongness in other segments, notably Buildings and infrastructure, helped
   compensate for this weakness relative to our estimate. Wind power’s
   relatively low share may have also helped the earnings beat.
 * Exel Q4 adj. EBIT amounted to EUR 2.7m vs the EUR 2.2m/1.8m Evli/consensus
   estimates. Adjusted operating margin was therefore a very strong 9.9%.
 * Q4 order intake was EUR 33.4m and thus increased by 5.7% y/y.
 * Exel guides revenue and adjusted operating profit to increase in 2021
   compared to 2020.
 * The Board of Directors proposes EUR 0.20 per share dividend distribution, the
   same as our estimate.

Open report


MARIMEKKO - GOOD RESULT DESPITE THE UNCERTAINTIES

18.02.2021 - 08.35 | Earnings Flash

Marimekko’s Q4 result was somewhat in line with expectations. Net sales were EUR
37m (8% y/y) vs. EUR 38m/38m Evli/cons. Adj. EBIT was EUR 5.8m vs. EUR 5.0m/4.7m
Evli/cons. 2020 dividend proposal is EUR 1.0 vs. EUR 1.20/1.10 Evli/cons.

Read more

 * Finland: revenue was EUR 23.2m vs. EUR 24.9m Evli view. Revenue increased by
   6% y/y. Wholesale sales developed favorably and were boosted by non-recurring
   promotional deliveries.
 * International: revenue increased by 11% y/y and was EUR 14.1m vs. EUR 13.2m
   Evli view. Wholesale sales developed well also in EMEA and Scandinavia.
 * Q4 adj. EBIT was EUR 5.8m (15.5% margin) vs. EUR 5.0m/4.7m (13.1%/12.4%
   margin) Evli/cons. Profitability was boosted by increased sales and decreased
   fixed costs. On the other hand, relative sales margin declined due to higher
   logistics costs resulting from an increase in online sales.
 * Q4 adj. EPS was EUR 0.51 vs. EUR 0.46/0.43 Evli/cons.
 * 2020 dividend proposal is EUR 1.0 vs. EUR 1.20/1.10 Evli/cons. Dividend from
   2019 is EUR 0.90.
 * 2021E guidance: net sales are expected to be higher than in the previous
   year. Adj. EBIT margin is expected to be approx. on a par with the long-term
   goal of 15%.

Open report


SCANFIL - NO NEGATIVE SURPRISES

18.02.2021 - 08.30 | Earnings Flash

Scanfil capped 2020 strong and we didn’t find notable negatives from the Q4
report. Scanfil enters this year with confidence and the guidance is in line
with the long-term organic growth targets.

Read more

 * Scanfil Q4 revenue amounted to EUR 154.1m, compared to the EUR 153.7m/152.1m
   Evli/consensus estimates. The y/y top line change was -0.4%.
 * Communication top line amounted to EUR 19.5m vs our EUR 22.8m estimate.
 * Consumer Applications was EUR 27.5m vs our EUR 22.6m expectation. The
   positive surprise is encouraging given that the segment has been a soft
   performer recently. Scanfil says a new customer also contributed to the
   result.
 * Energy & Automation revenue stood at EUR 34.6m, compared to our EUR 30.3m
   estimate. According to Scanfil the 18% y/y growth stemmed broadly from the
   segment’s customer base.
 * Industrial was EUR 43.2m while we expected EUR 48.2m.
 * Medtec & Life Science revenue was EUR 29.3m, compared to our EUR 29.7m
   estimate.
 * Scanfil Q4 EBIT was EUR 10.4m vs the EUR 10.0m/9.9m Evli/consensus estimates.
 * Scanfil guides FY ’21 revenue to be EUR 600-640m, adjusted EBIT EUR 40-44m.
   The guidance is in line with our estimates and thus backs the long-term
   organic EUR 700m revenue and 7% operating margin targets for FY ’23.
 * The Board of Directors proposes EUR 0.17 per share dividend distribution,
   compared to our EUR 0.15 estimate.

Open report


PIHLAJALINNA - REVENUE SUPPORTED BY COVID-19 TESTING

17.02.2021 - 09.25 | Preview

Pihlajalinna reports its Q4 result on this week’s Friday, 19th of February. We
have made only small adjustments to our estimates and keep our rating “HOLD”
with TP of EUR 10.5 (9.5).

Read more

Expecting ~1% revenue growth in Q4

Despite the COVID-19 situation worsened towards the end of the year we expect a
fairly good Q4 result. We expect Pihlajalinna’s Q4E revenue to grow by ~1% y/y
to EUR 135m (cons. EUR 136m), supported by increased volumes of COVID-19
testing. On the other hand, as the virus situation has prolonged, we expect the
demand of private services (e.g. fitness centers) is still lagging behind. We
expect adj. EBIT of EUR 5.3m (cons. EUR 4.9m). We expect 20E dividend of EUR
0.12 (cons. EUR 0.09).

The virus is still hampering private services

The outlook of many private services e.g. fitness centers remains weak as the
pandemic shows no signs of abating and the vaccinations haven’t started as
quickly as first anticipated due to the delays in the vaccine supply. On the
other hand, we expect the COVID-19 testing to continue strong, supporting
revenue. The company started negotiations for the purchase of all shares in
Työterveys Virta at the end of 2020 which gives Pihlajalinna almost 30 % share
of the occupational healthcare market in the Oulu region. Revenue of Työterveys
Virta in 2019 was approx. EUR 13.6m. The Due Diligence review has been
completed, and the procurement has now advanced to the contract phase and
approval of bills of sale. The total price of the shares with cash reserve is
EUR 17.6m (meaning EV/Sales multiple of 1.3x). The acquisition is not yet
included to our estimates.

“HOLD” with TP of EUR 10.50 (9.5)

We expect FY20E revenue of EUR 507m (-2.3% y/y) and adj. EBIT of EUR 18.8m. On
our estimates, the company trades with 20E-21E EV/EBIT multiple of 23.3x and
15.9x. Which is 1-12% discount compared to the peers. We keep our rating “HOLD”
with TP of EUR 10.5 (9.5).

Open report


VERKKOKAUPPA.COM - AMBITIOUS PLANS FOR GROWTH

15.02.2021 - 10.10 | Company update

Verkkokauppa.com delivered a strong Q4 result which was in line with
expectations. The company introduced its refined strategy for 2021-2025 and
targets EUR 1bn of sales and EBIT margin of 5% by the end of 2025. We keep our
rating “BUY” with TP of EUR 9.5 (8.3).

Read more

Solid Q4 result

Verkkokauppa.com’s Q4 result was strong, as expected. Revenue grew by 10% y/y to
EUR 176m (171m/170m Evli/cons.). Revenue was boosted by good growth in mid-sized
categories (especially MDA and sport equipment). Gross margin (15.1% y/y vs. our
14.6%) was driven by strong performance of mid-sized, higher margin categories.
Adj. EBIT amounted EUR 6.2m (6.6m/6.3m Evli/cons.). 2020 dividend proposal of
EUR 0.45 (0.23 plus additional dividend of 0.22) was clearly above expectations
(0.23 Evli & cons.).

Targeting sales of EUR 1bn by the end of 2025

The company introduced its refined strategy for 2021-2025 and highlighted five
pillars on what the growth will be built. These pillars are: excellent customer
experience & strong brand, efficient fulfilment, superior technology backbone,
extensive assortment and cost competitiveness. The company targets to reach
sales of EUR 1bn and EBIT margin 5%. Growth is sought e.g. through core product
categories and new categories with attractive margin potential, especially
online. Further, the company aims to double its B2B and private label business
by 2025. Also, new business and M&A opportunities are on the table. However, the
growth will mainly be organic and stem from the transition from brick-and-mortar
to e-commerce. The company is also investing to its warehouse in Jätkäsaari. The
automation investment program (capex of EUR ~4m) is expected to be completed by
the end of 2022. The investment supports further growth and creates cost
efficiencies, boosting profitability development.

“BUY” with TP of EUR 9.5 (8.3)

The company expects 21E sales of EUR 570m-620m and adj. EBIT of EUR 20m-26m.
Improved brand image, high customer satisfaction and investments into growth and
more efficient operations reinforce our view of the company’s ability to grow
profitably. We have increased our 21E-22E sales expectations by 4-7% and expect
21E sales of EUR 592m. Our adj. EBIT expectation is EUR 22m. On our estimates,
the company trades with 21E-22E EV/EBIT multiple of 16.0x and 14.2x, which
translates into a discount compared to the peers. We keep our rating “BUY” with
TP of EUR 9.5 (8.3).

Open report


TOKMANNI - TOWARDS NEW MILESTONES

15.02.2021 - 09.25 | Company update

Tokmanni’s Q4 result outpaced the expectations. The company was also able to
reach its adj. EBIT margin target of 9% and sales target of EUR 1bn in 2020. New
strategic targets are introduced in March. We keep our rating “BUY” with TP of
EUR 20 (18.4).

Read more

Result outpaced the expectations
Tokmanni reported extremely strong Q4 figures. Revenue increased by 14.6% y/y to
EUR 327m (vs. 315m Evli & cons.). LFL growth was 13.4% y/y. Sales development
was at good level in all product categories. Online sales grew by 134% y/y and
accounted for 1.4% of total revenue. Adj. gross profit amounted EUR 120m (36.8%
margin) vs. EUR 110m Evli & consensus. Adj. EBIT totaled EUR 45m (38m/37m
Evli/cons.). Dividend proposal was also clearly above expectations as it was EUR
0.85 per share vs. EUR 0.78 our view and EUR 0.74 consensus.

Financial targets met – new ones to come
Tokmanni’s target was to reach adj. EBIT margin of 9% which was exceeded last
year. The company also exceeded sales of EUR 1bn. Tokmanni will introduce its
revised strategic targets in connection with the CMD which takes place in March.
We see that there is still gross margin improvement potential as the company
aims constantly to increase the share of direct import and private labels. This
boosts profitability development. We expect further growth in online sales,
though the share is still expected to remain relatively low compared to the
total sales (online sales grew by 124% in 2020). The company’s low price image
combined with broad product assortment has paid off and the company has been
able attract new customers. The share of new customers was 20% in 2020. Tokmanni
has also launched a review on the possibilities of expanding the logistics
center in Mäntsälä and we hope to get more color on that later during the year.

“BUY” with TP of EUR 20 (18.4)
Tokmanni expects slight growth in revenue in 2021. Adj. EBIT is expected to be
at the same level as in the previous year. We have increased our 21E sales
expectation by ~4% and expect sales of EUR 1089m (+1.5% y/y). We expect adj.
EBIT of EUR 99m (9.1% margin). On our estimates the company trades with 21E-22E
EV/EBIT multiple of 13.7x and 12.8x which is 7-8% discount compared to the
Nordic non-grocery peers. We keep our rating “BUY” with TP of EUR 20 (18.4).

Open report


RAUTE - POTENTIAL IS VALUED TOO STEEP

15.02.2021 - 09.15 | Company update

Raute’s Q4 was uneventful compared to preceding ones, not counting the large
Russian order. Raute seems to be doing correct things from a strategic
perspective, but we view the multiples simply too high given the current weak
market environment. Our TP is EUR 21 (20), retain SELL.

Read more

Still no marked improvement in smaller project orders

Raute’s EUR 39m Q4 revenue was known before. The EUR 0.8m EBIT didn’t meet our
EUR 2.0m estimate as the mix was tilted more towards projects than we expected.
Inventory write-downs and pandemic restrictions were further headwinds. Order
intake was EUR 70m (vs our EUR 74m estimate). Small project deliveries were
booked only to the tune of EUR 3m (vs our EUR 7m estimate), excluding the EUR
55m Russian order. The figure can be compared to the EUR 2m seen in Q3’20 and
EUR 4m in Q4’19. Technology services orders were EUR 12m as we expected, down by
8% y/y but improvement from the previous pandemic lows.

Results will improve in FY ‘21, we estimate EBIT at EUR 6m

Raute’s FY ’20 EBIT was negative due to low top line, unfavorable mix (low
services share but also the fact that projects were tilted towards a large
low-margin order), pandemic restrictions and high R&D investments. Revenue will
be higher this year and services outlook is improving. The most acute phase of
the pandemic has been passed and restrictions should fade away towards the end
of the year, but FY ’21 EBIT potential remains limited due to the continued
reliance on a large Russian order. The focus on R&D also remains. Raute’s strong
Russian traction and the strategic focus on developing more competitive
technology for emerging markets are long-term positives, but in the short-term
perspective profitability outlook is still muted relative to the recent years’
avg. EUR 11m EBIT. European mill orders are also unlikely to reach the levels of
recent high years.

Potential exists, but we view the multiples too steep

In our opinion Raute’s valuation still requires patience as there has not been,
so far, any concrete sign of smaller orders picking up. Raute is now valued ca.
10x EV/EBITDA and 16x EV/EBIT on our FY ’21 estimates. The multiples could
decrease to around 8x and 11x in the coming years. The outlook might well
improve fast, but right now this doesn’t seem to be the case. Our new TP is EUR
21 (20). We retain our SELL rating.

Open report


RAUTE - NO MAJOR PICKUP IN SMALLER ORDERS

12.02.2021 - 09.30 | Earnings Flash

Raute’s Q4 EBIT didn’t meet our estimate and order intake was also a bit soft,
excluding the big new Russian project. In our view significant improvement in
business conditions still waits.

Read more

 * Raute Q4 revenue was EUR 38.9m vs our EUR 39.0m estimate. Project deliveries
   amounted to EUR 28.6m, compared to our EUR 26.0m estimate. Meanwhile
   technology services’ top line was EUR 10.3m vs our EUR 13.0m estimate.
 * Q4 EBIT came in at EUR 0.8m, compared to our EUR 2.0m estimate.
 * Order intake in Q4 stood at EUR 70m vs our EUR 74m estimate. Project
   deliveries’ new orders were EUR 59m, while we expected EUR 62m. Technology
   services booked EUR 11m vs our EUR 12m estimate. This means there was no
   significant improvement in order intake from the previous quarters, excluding
   the EUR 55m Russian project.
 * Order book stood at EUR 94m, compared to EUR 88m a year ago.
 * Raute expects net sales to increase in 2021 compared to the level of the
   previous year. Raute expects the operating result to improve from the
   previous year due to growth in net sales.
 * The Board of Directors proposes EUR 0.80 per share dividend distribution vs
   our EUR 1.47 expectation.

Open report


ETTEPLAN - MOVING TOWARDS BETTER CONDITIONS

12.02.2021 - 09.15 | Company update

Etteplan reported better than expected profitability figures in Q4. The guidance
for 2021 is in line with our expectations and we make no larger changes to our
estimates. Uncertainty in demand pick-up is still present and we expect a
sluggish start to 2021. We retain our SELL-rating and target price of EUR 13.6.

Read more

Better than expected profitability in Q4
Etteplan reported solid profitability figures in Q4, with EBIT at EUR 7.1m (EUR
6.5m/6.6m Evli/cons.) and EBIT (excl. NRI’s) of EUR 7.4m. Revenue was slightly
below expectations, at EUR 70.3m (EUR 71.8m Evli/cons.). Etteplan proposes a
dividend distribution of EUR 0.34 per share (EUR 0.33 Evli/cons.). Positive news
on the rollout of Coronavirus vaccines aided demand in Q4. In 2021 Etteplan
expects revenue to amount to EUR 280-300m and EBIT to amount to EUR 23-26m.

Demand pick-up uncertainty but acquisitions boost growth
We have made only minor revisions post-Q4, with our estimates still near the
mid-point of the guidance range (revenue EUR 288.9m and EBIT EUR 24.5m). Growth
is aided by the Tegeman and TekPartner acquisitions and we expect double-digit
growth. 2021 should start of somewhat sluggish but we expect demand to pick up
going into mid-2021. Cost expansion after the strict cost discipline in 2020 and
recruitments in 2021 should limit margin upside and we expect to see margins
similar to 2020. The outlook for 2021 is looking brighter but we still see
uncertainty in organic growth capabilities. Lockdowns and restrictions are
continuing to impact the overall economy and the first half of the year in that
regard appears challenging, but we are carefully optimistic going forward.

SELL with a target price of EUR 13.6
With no larger changes to our estimates we retain our target price of EUR 13.6
and SELL-rating. Our target price values Etteplan at 18x 2021 P/E, which we
consider justified given the still present uncertainty.

Open report


TOKMANNI - Q4 RESULT OUTPACED THE EXPECTATIONS

12.02.2021 - 09.15 | Earnings Flash

Tokmanni’s Q4 revenue increased by 14.6 % y/y (LFL growth of 13.4%) and was EUR
327m vs. EUR 315m/315m Evli/cons. Tokmanni’s adj. EBIT was EUR 45m vs. EUR
38m/37m Evli/cons. Dividend proposal was EUR 0.85 vs. EUR 0.78/0.74 Evli/cons.
The company expects slight growth in revenue in 2021. Adj. EBIT is expected to
be on the same level as last year.

Read more

 * Q4 revenue growth outpaced the expectations as revenue increased by 14.6% y/y
   and was EUR 327m vs. our EUR 315m and consensus of EUR 315m. LFL growth was
   13.4%.
 * Q4 adj. gross profit was EUR 120m (36.8% margin) vs. EUR 110m (34.9%) Evli
   and consensus.
 * Q4 adj. EBITDA was EUR 62m vs. EUR 54m our view.
 * Q4 adj. EBIT was EUR 45m (13.9% margin) vs. EUR 38m (12.1%) our expectation
   and EUR 37m (11.8%) consensus.
 * Q4 eps was EUR 0.57 vs. EUR 0.48/0.47 Evli/consensus.
 * Divided proposal for 2020 is EUR 0.85 vs. EUR 0.78/0.74 Evli/consensus.
 * Tokmanni expects slight revenue growth in 2021. Adj. EBIT is expected to be
   on the same level as last year.

Open report


ASPO - PERFORMANCE IS NOW APPRECIATED

12.02.2021 - 08.45 | Company update

ESL helped Aspo Q4 EBIT top estimates. Both ESL and Telko now perform, but we
see valuation already appreciates this fact. Our TP is now EUR 9.5 (8.75),
rating HOLD (BUY).

Read more

ESL and Telko have now performed around target levels

Aspo’s EUR 133.5m Q4 revenue was in line with estimates (EUR 129.3m/132.9m
Evli/cons.) while the EUR 7.6m EBIT was a positive surprise relative to the EUR
7.0m/7.1m Evli/cons. estimates. The EBIT beat was driven by ESL. The Q4
improvement in ESL’s operating environment didn’t come as a surprise, but in our
opinion the EUR 4.8m Q4 EBIT was significantly better than expected (we
estimated EUR 3.2m) considering the EUR -0.1m Q3 figure and the fact that top
line and cargo volumes were still down from a year ago. ESL’s EBIT was indeed up
from the EUR 4.4m comparative figure thanks to cost savings measures. Telko
continued to perform close to expectations and posted a strong 6.2% operating
margin. Meanwhile Leipurin EBIT declined to EUR 0.2m from the EUR 1.1m
comparison figure.

Aspo didn’t issue numerical EBIT guidance range for FY ‘21

ESL’s strong Q4 profitability (already close to the 12% long-term margin target)
is encouraging as there’s now sound evidence Aspo’s two main cylinders are
firing and can perform close to their long-term target levels. In our view the
recent performance levels indicate ESL and Telko should by themselves help Aspo
reach EUR 30m EBIT this year. Aspo however didn’t give any numerical EBIT
guidance range. According to the guidance EBIT will be higher this year, and as
such the statement isn’t very informative. In our view ESL’s EBIT will improve a
lot this year but is probably not going to reach EUR 20m yet. We revise our FY
’21 EBIT estimate for ESL only from EUR 16.3m to EUR 16.4m as environmental
equipment installations mean there’ll be more lay-ups than usual. We expect
Telko FY ’21 EBIT to grow by 9%.

We consider current valuation to land within a neutral area

We revise our Aspo FY ’21 EBIT estimate up only a bit to EUR 29.7m. This means
ca. EUR 10m annual gain and in terms of EBITDA 25% y/y growth. In our opinion
Aspo’s valuation, at least in terms of SOTP, already reflects significant
earnings growth for this year. There’s likely to be more potential beyond ’21,
however we don’t see these gains should be fully valued right now. Our new TP is
EUR 9.5 (8.75) per share, rating HOLD (BUY).

Open report


VERKKOKAUPPA.COM - STRONG QUARTER, AS EXPECTED

12.02.2021 - 08.45 | Earnings Flash

Verkkokauppa.com’s Q4’20 revenue grew by 10% y/y and was EUR 176m vs. Evli EUR
171m and consensus of EUR 170m. Adj. EBIT was EUR 6.2m vs. EUR 6.6m/6.3m
Evli/cons. Dividend proposal was EUR 0.45 (incl. additional dividend of EUR
0.22) vs. EUR 0.23/0.23 Evli/cons.

Read more

 * Q4 revenue was EUR 176m (10% y/y) vs. EUR 171m Evli view and EUR 170m
   consensus. Growth was good especially in mid-sized product categories,
   especially in major domestics appliances (MDA) and sports equipment.
 * Q4 gross profit was EUR 26.7m (15.1% margin) vs. EUR 25.0m (14.6% margin)
   Evli view. Gross margin was driven by strong performance of mid-sized, higher
   margin categories.
 * Q4 adj. EBIT was EUR 6.2m (3.5% margin) vs. EUR 6.6m (3.9% margin) Evli view
   and EUR 6.3m (3.7% margin) consensus.
 * Q4 eps was EUR 0.10 vs. EUR 0.11/0.10 Evli/cons.
 * 2020 dividend proposal is EUR 0.45 (EUR 0.23 in quarterly installments and an
   additional dividend of EUR 0.22) vs. EUR 0.23/0.23 Evli/cons.
 *  2021E guidance: revenue of EUR 570-620m and adj. EBIT of EUR 20-26m.

Open report


FINNAIR - NO SIGNS OF RELIEF

12.02.2021 - 08.15 | Preview

Finnair reports its Q4 result on next week’s Thursday, 18th of February. We
expect Q4E revenue to decline by 88% y/y to EUR 94m and adj. EBIT of EUR -172m.
We retain “HOLD” and TP of EUR 0.60 ahead the result.

Read more

Expecting Q4E revenue to decline by 88% y/y

In Oct-Dec, Finnair carried 278k passengers which is 92% decline compared to
Q4’19. Average Seat Kilometers (ASK) decreased by 89% y/y and Revenue Passenger
Kilometers (RPK) decreased by 96% y/y. Passenger Load Factor (PLF) declined by
49.8%-points y/y and was 29.2%. The pandemic situation worsened towards the end
of the year and strict travel restrictions remained. We expect Q4E revenue of
EUR 94m (-88% y/y) and adj. EBIT of EUR -172m.

New virus variants increasing fears

During Q4, Finnair finalized a sale and leaseback arrangement for one of its
A350 aircrafts. The immediate positive cash effect is in excess of EUR 100m. The
total positive net impact of the amendments to the terms of Finnair pension fund
as well as pilots’ early retirement is EUR 133m on Q4 operating result (not
affecting comparable operating result). According to the company, the comparable
operating loss in Q4 will be similar to Q2-Q3’20. Despite the vaccine optimism
the catastrophic situation threatens to continue at least throughout H1’2021 and
deepen distress in the aviation sector as new virus variants are increasing
fears and there are delays in the vaccine supply for Europe. Therefore, we have
cut our H1’21E estimates and expect better improvement to start in the latter
half of the year.

“HOLD” with TP of EUR 0.60

We expect FY20E revenue of EUR 821m (-74% y/y) and adj. EBIT of EUR -604m. We
expect the situation to improve during 21E, but better improvement is seen later
in 22E. However, there are still significant uncertainties with our estimates as
visibility remains extremely weak. We keep our rating “HOLD” with TP of EUR 0.60
intact ahead the Q4 result.

Open report


ETTEPLAN - PROFITABILITY BETTER THAN EXPECTED

11.02.2021 - 13.30 | Earnings Flash

Etteplan's net sales in Q4 amounted to EUR 70.3m, slightly below our and
consensus estimates (EUR 71.8m/71.8m Evli/cons.). EBIT amounted to EUR 7.1m,
above our and consensus estimates (EUR 6.5m/6.6m Evli/cons.). Etteplan proposes
a dividend of EUR 0.34 per share (EUR 0.33/0.33 Evli/Cons.).

Read more

 * Net sales in Q4 were EUR 70.3m (EUR 71.6m in Q4/19), slightly below our
   estimates and consensus estimates (EUR 71.8m/71.8m Evli/Cons.). Growth in Q4
   amounted to -2.1% y/y and -6.3% organic.
 * EBIT in Q4 amounted to EUR 7.1m (EUR 5.6m in Q4/19), above our estimates and
   consensus estimates (EUR 6.5m/6.6m Evli/cons.), at a margin of 10.1%.
 * EPS in Q4 amounted to EUR 0.23 (EUR 0.16 in Q4/19), above our estimates and
   consensus estimates (EUR 0.20/0.20 Evli/cons.).
 * Engineering Solutions net sales in Q4 were EUR 40.6m vs. EUR 40.1m Evli.
   EBITA in Q4 amounted to EUR 4.2m vs. EUR 4.0m Evli. The MSI-% in Q4 was 59%
   compared to 55% in Q4/19. 
 * Software and Embedded Solutions net sales in Q4 were EUR 17.7m vs. EUR 18.3m
   Evli. EBITA in Q4 amounted to EUR 2.4m vs. EUR 2.1m Evli. The MSI-% in Q4 was
   51% compared to 58% in Q4/19. 
 * Technical Documentation Solutions net sales in Q4 were EUR 11.9m vs. EUR
   13.2m Evli. EBITA in Q4 amounted to EUR 1.3m vs. EUR 1.3m Evli. The MSI-% in
   Q4 was 80% compared to 79% in Q4/19. 
 * Dividend proposal: Etteplan proposes a dividend of EUR 0.34 per share (EUR
   0.33/0.33 Evli/Cons.).
 * Guidance for 2021: Etteplan expects revenue to amount to EUR 280-300m and
   operating profit (EBIT) to amount to EUR 23-26m (Evli 2021E EUR 290.3m and
   EUR 24.4m respectively).

 

Open report


ASPO - ESL DROVE A SHARP REBOUND

11.02.2021 - 10.30 | Earnings Flash

Aspo’s Q4 EBIT topped estimates thanks to ESL’s strong profitability. It is
clear EBIT is set to improve this year, however Aspo did not disclose numerical
EBIT guidance range.

Read more

 * Aspo Q4 revenue amounted to EUR 133.5m, compared to the EUR 129.3m/132.9m
   Evli/consensus estimates. Top line therefore declined by 9% y/y.
 * Aspo Q4 EBIT was EUR 7.6m vs the EUR 7.0m/7.1m Evli/consensus estimates.
 * ESL Q4 revenue was EUR 41.2m, whereas we estimated EUR 40.8m. EBIT was EUR
   4.8m vs our EUR 3.2m estimate. EBIT increased from the EUR 4.4m comparative
   figure despite a small decline in cargo volumes (from 4.0mt to 3.8mt). The
   result was thus already close to the 12% long-term EBIT margin target. Demand
   for loading and unloading operations was very high in Q4.
 * Telko’s top line stood at EUR 65.7m, compared to our EUR 60.9m estimate.
   Meanwhile EBIT was EUR 4.1m vs our EUR 4.3m estimate.
 * Leipurin Q4 revenue amounted to EUR 26.6m, while we expected EUR 27.6m. EBIT
   was recorded at EUR 0.2m vs our EUR 0.6m estimate.
 * Other operations cost EUR 1.5m vs our EUR 1.0m estimate.
 * Guidance: according to Aspo operating profit in 2021 will be higher than in
   2020 (EUR 19.3m). The guidance as such has very limited informational value.
 * The Board of Directors proposes EUR 0.35 per share dividend distribution,
   compared to our EUR 0.44 expectation.

Open report


VAISALA - A CHAMPION WITH A HEFTY PRICE TAG

10.02.2021 - 08.45 | Company report

Vaisala’s R&D leadership focused strategy and bolt-on acquisitions have paid off
well during the last years. Dark clouds are currently hanging over W&E, but
thanks to its strong financial position, and growing share of more profitable IM
sales, we see Vaisala on track to targeted above 5% growth and above 12% EBIT
margins. However, we continue seeing Vaisala’s valuation too expensive given the
expected financial performance. We maintain our target price of 32€ and our SELL
recommendation.

Read more

Maneuvering pass a challenging 2020

Vaisala has managed to maneuver pass the corona pandemic rather unscathed. Due
to lowered operating expenses caused by the pandemic and good order book &
deliveries, performance has been good in both BU’s. Currently, W&E is weighed
down by the weakened outlook for aviation and lack of larger infra projects,
especially in developed countries. IM on the other hand, is expected to be less
affected by COVID going forward.

 Profitable growth with R&D leadership strategy

Looking at the coming years, we see Vaisala’s targeted above 5% sales growth and
>12% margins achievable despite current gloomy outlook for aviation. We expect
the growing share of more profitable IM sales to continue supporting Vaisala’s
growth and operating margin. In 2021E-22E, we estimate Vaisala’ net sales to
grow by 4.5% and 5.3%, and EBIT margins of 12.2% and 12.6% respectively. We
expect W&E market to begin to gradually recover in 2021E-22E with an annual
growth rate of approximately 3% and W&E’s EBIT margins to gradually improve
towards 7% in 2022E. For IM, we expect 2021E-22E continued profitable growth at
7% and 9.6% annual growth rates, respectively. We expect IM’s EBIT margins to
stay above 20% in 2021-22E.

 Maintain SELL as valuation is expensive

Vaisala’s share price has rallied in last few years and is currently around all
time high levels. The share price rally is also visible in Vaisala’s valuation
multiples, which have increased strongly since around mid-2019, resulting in a
clear sustained valuation premium of 20-60% during this period. As peer group
multiples have rerated as of late, Vaisala’s EV/EBIT and P/E valuation premium
is now around 20-30% on our 2021-22E estimates. Despite recent surge in
valuation multiples, we see valuation too expensive given Vaisala’s weaker
growth rates and margins compared to our technology peer group. Thus, we
maintain our target price of 32€ and our SELL recommendation. Our target price
values Vaisala at 21-22e EV/EBIT multiples of 23x and 21x which is above peer
group, reflecting Vaisala’s strong sustainability profile, growing dividend, and
especially IM’s highly profitable growth with possibility of further add-on
acquisitions.

Open report


TALENOM - CONTINUED DOUBLE-DIGIT GROWTH

09.02.2021 - 09.30 | Company update

Talenom’s Q4 was rather well in line with our expectations and with our 2021
estimates corresponding well with the guidance our estimates remain largely
intact. Preparations for continued growth remain on the agenda. Our target price
remains unchanged at EUR 11.5, our rating is now HOLD (SELL).

Read more

Q4 report rather well in line with expectations
Talenom’s Q4 report all in all was rather well in line with our expectations.
Net sales amounted to EUR 16.5m (Evli EUR 16.8m) and operating profit to EUR
2.4m (Evli EUR 2.6m). The BoD proposes a dividend distribution of EUR 0.15 per
share (Evli EUR 0.15). In 2021 the company expects net sales to amount to EUR
75-80m and operating profit to amount to EUR 14-16m (Evli prev. est. EUR 77.3m
and EUR 15.5m respectively). Further acquisitions during 2021 could still see
net sales grow past the guidance range, while the typically lower profitability
of acquisition objects should limit earnings growth potential.

Preparations and build up for future growth
We have made only minor revisions to our estimates. The year 2021 will to quite
some extent be a year of preparing and building up the new growth avenues.
Organic growth figures should still be somewhat weaker, but the company sees
potential for sales efforts in 2021 to pave the way for better figures in 2022.
The small customer concept rollout has progressed quite as planned and the
launch in Sweden during 2021 also remains on schedule. We see a limited impact
of the new concept on sales in 2021. No new relevant information on the plans to
further expand internationally was given.

HOLD (SELL) with a target price of EUR 11.5
Our estimates at large remain intact post-Q4 and we make no adjustment to our
target price of EUR 11.5. Our TP values Talenom at approx. 43x 2021 P/E. After
the minor share price correction our rating is now HOLD (SELL).

Open report


ETTEPLAN - EYEING GROWTH PICK-UP IN 2021

09.02.2021 - 08.30 | Preview

We expect Etteplan to report solid Q4 figures and propose a dividend
distribution of EUR 0.33 per share. With the acquisition of TekPartner we now
expect double-digit growth in 2021. With valuation now at levels that we find
hard to justify, we lower our rating to SELL (HOLD) with a target price of EUR
13.6 (12.4)

Read more

Solid fourth quarter expected
Etteplan reports Q4 results on February 11th. We expect Etteplan to report solid
figures, with the guidance update given in December implying better figures than
in the comparison period. Our Q4 net sales and EBIT estimates are at EUR 71.8m
and 6.5m respectively. The fourth quarter development is seen to have been aided
by a pick-up in customer investment activity following positive news on
Coronavirus vaccine rollout. We expect Etteplan to propose a dividend
distribution of EUR 0.33 per share.

Expecting return to double-digit growth
We have made adjustments to our estimates after the acquisition of TekPartner
and expansion to Denmark. TekPartner’s revenue in 2019 amounted to approx. EUR
8m. We now expect growth of 11.2% in 2021. Growth is supported by the Tegeman
and TekPartner acquisitions. The 2021 guidance will be of key interest. We would
expect to see a guidance reflecting clear growth in revenue and possibly also
EBIT, although with the uncertainties a more careful approach may be taken this
early on in 2021. We have assumed relatively flat margin development in 2021,
expecting the strict cost savings measures in 2020 to be phased out during the
year and growth and internal project investments to pick up.

SELL (HOLD) with a target price of EUR 13.6 (12.4)
Etteplan’s share price has picked up clearly, now trading quite clearly above
peers. Although we could find justification for valuation above that of peers,
we have a hard time justifying current absolute valuation levels given the still
present uncertainty. We adjust our target price to EUR 13.6 (12.4) on our
revised estimates but downgrade our rating to SELL (HOLD).

Open report


VERKKOKAUPPA.COM - EXPECTING SALES BOOST FROM CAMPAIGNS

09.02.2021 - 08.15 | Preview

Verkkokauppa.com reports its Q4 result on Friday, 12th of February. We have
slightly increased our Q4E estimates ahead the result and keep our rating “BUY”
with new TP of EUR 8.3 (6.5).

Read more

Expecting sales growth of 7% in Oct-Dec
Year 2020 has so far been an excellent year for Verkkokauppa.com and it has
benefited from the changed environment and customer behavior (rapid shift into
online). The final quarter is normally the most important one for
Verkkokauppa.com in terms of both, sales and profitability and we expect the
company to reach strong figures in Oct-Dec, driven by campaigns and Christmas.
We have increased our Q4E sales expectation by ~1% and our adj. EBIT expectation
by ~6%. We expect Q4E sales of EUR 171m (+7% y/y) and adj. EBIT of EUR 6.6m
(+47% y/y). We expect 20E dividend of EUR 0.23.

Well positioned for the future
Last year was eventful not only due to the COVID-19 and its impacts on the
consumer behavior but also due to Amazon which launched its operations in Sweden
at the latter half of the year. In our view, the impacts of the launch on
Finland were negligible but it is clear that the presence of the online giant
will increase in Finland in the long run. Online sales have grown significantly
which has benefited Verkkokauppa.com but the company has also taken right
actions towards better profitability which reinforces our view that the company
is able reach profitable growth even after the pandemic.

“BUY” with TP of EUR 8.3 (6.5)
We expect 20E sales of EUR 549m (+9% y/y) and adj. EBIT of EUR 20.8m (3.8%
margin). Thus, our expectations are at the higher end of the given guidance
(sales of EUR 525-550m and adj. EBIT of EUR 17-21m). On our estimates, the
company trades with 20E-21E EV/EBIT multiple of 14.5x and 15.2x which translates
into 40-50% discount compared to the peers. We keep our rating “BUY” with TP of
EUR 8.3 (6.5).

Open report


EARNINGS FLASH - QUITE IN LINE WITH EXPECTATIONS

08.02.2021 - 14.00 | Earnings Flash

Talenom's net sales in Q4 grew 10.4% to EUR 16.5m, in line with our and
consensus estimates (EUR 16.8m Evli/cons.). EBIT amounted to EUR 2.4m, slightly
below our and consensus estimates (EUR 2.6m Evli/cons.). Net sales for 2021 are
expected to amount to EUR 75-80m and operating profit to EUR 14-16m.

Read more

 * Net sales in Q4 amounted to EUR 16.5m (EUR 14.9m in Q4/19), in line with our
   and consensus estimates (EUR 16.8m Evli/Cons.). Growth in Q4 amounted to
   10.4% y/y.
 * Operating profit in Q4 amounted to EUR 2.4m (EUR 1.5m in Q4/19), slightly
   below our and consensus estimates (EUR 2.6m Evli/cons.), at a margin of
   14.7%.
 * EPS in Q4 amounted to EUR 0.04 (EUR 0.02 in Q4/19), in line with our and
   consensus estimates (EUR 0.04/0.05 Evli/cons.).
 * Net investments during 2020 amounted to EUR 20.3m (2019: EUR 15.4m).
 * Talenom’s BoD proposes a dividend distribution of EUR 0.15 per share (O.15
   Evli/cons.).
 * Guidance for 2021: Net sales in 2021 are expected to amount to EUR 75-80m and
   operating profit to EUR 14-16m. Our 2021 net sales and operating profit
   estimates are EUR 77.3m and EUR 15.5m respectively.

Open report


CONSTI - GOOD AND STEADY PERFORMANCE

08.02.2021 - 08.45 | Company update

Consti reported slightly better than expected Q4 results. We continue to expect
minor sales growth in 2021 and improvement in operating margins. We adjust our
target price to EUR 13.0 (12.0), BUY-rating intact.

Read more

Q4 slightly above expectations
Consti reported slightly better than expected Q4 results. Net sales amounted to
EUR 78.1m (EUR 71.6m/71.1m Evli/cons.), with sales decline slowing down clearly
compared to previous quarters and Q4 net sales down only 0.2% y/y. EBIT amounted
to EUR 3.0m (EUR 2.7m Evli/cons.). A dividend distribution of EUR 0.40 per share
is proposed (EUR 0.35 Evli/cons.). The order backlog was now down only 4.3% y/y,
at EUR 177.9m, after a relatively decent Q4 order intake of EUR 54.3m.

Expecting margin improvement and minor growth
Consti expects an operating profit of EUR 7-11m in 2021, with our estimate
unchanged at EUR 9.1m. Activity is seen to increase slightly y/y in 2021 and our
net sales estimate is up some 3% to 281m, expecting minor growth of 2.3%.
COVID-19 induced uncertainty is still at elevated levels, thus also the wider
guidance range. Consti updated its strategy for 2021-2023, with clear focus on
the customer focused organization. Perhaps most unexpected was the ambition to
expand operations to new construction projects. This approach however appears to
be more of a complementary offering to serve existing customers and the share of
new construction projects could be seen to be some 10-15% of net sales at the
end of the strategy period. In our view Consti now appears to be seeking to take
more initiative after having focused on organizational changes and profitability
improvement.

BUY with a target price of EUR 13.0 (12.0)
Consti’s valuation has continued to approach that of peers but is still not too
stretched and with the good development and solid cash generation we see
continued upside potential. We adjust our target price to EUR 13.0 (12.0),
valuing Consti at 8.8x 2021 EV/EBITDA, our BUY-rating remains intact.

Open report


SRV - STILL LOOKING FAIRLY GOOD

05.02.2021 - 09.30 | Company update

SRV’s Q4 results were quite in line with our expectations. 2021 guidance is
slightly softer than anticipated but the wide range leaves room for solid
figures in 2021. We have made minor downwards revisions to our estimates but
good order intake during H1/2021 could swing our expectations more towards the
upper half of the guidance range.

Read more

Results quite in line with expectations
SRV’s Q4 results were rather well in line with our estimates. Net sales in Q4
amounted to EUR 292.5m, quite in line with our and consensus estimates (EUR
294.1m/299.6m Evli/cons.). EBIT amounted to EUR -8.0m, slightly below our and
consensus estimates (EUR -6.6m/-6.9m Evli/cons.). Although full-year EBIT was
quite weak due to the booked negative changes in the value of investments in Q4,
2020 operating cash flow was at a commendable EUR 46.3m. SRV as expected
proposed that no dividend be distributed for 2020.

Guidance slightly soft but room for solid figures in 2021
In SRV’s outlook for 2021 revenue is expected to amount to EUR 900-1,050m and
operative operating profit to EUR 16-26m. Our earlier estimates (EUR 999m and
EUR 23.8m) were slightly above the mid-point of the guidance range. The guidance
is somewhat soft, but the upper points of the range still leaves room for a
solid 2021. We have made minor downward revisions to our estimates, as we are
not fully convinced on sales development given the order backlog and order
intake. Solid order intake during H1/21 could still swing expectations more
strongly towards the upper half of the guidance range. We now expect revenue of
EUR 962.1m and operative operating profit of EUR 22.0m.

BUY-rating with a target price of EUR 0.64
SRV’s Q4 results and the outlook for 2021 all in all were quite as expected and
although earnings remained quite weak more importantly cash flows were at good
levels. We reiterate our target price of EUR 0.64 and BUY-rating.

Open report


SUOMINEN - ATTRACTIVE STABILIZING MULTIPLES

05.02.2021 - 09.20 | Company update

Suominen’s Q4 figures were close to what we expected, but the report turned our
overall view a bit more positive. Our TP is now EUR 6.5 (6.0) and we retain our
BUY rating.

Read more

Q4 was a strong ending for an extraordinary record year

Suominen’s Q4 revenue grew by 18% y/y to EUR 111m (vs our EUR 106m estimate).
Europe grew by 37%, albeit from a very low base. Americas still managed to grow
a decent 7%. The 15.6% GM was a tad above our 15.0% estimate. SGA were slightly
above our estimate and certain non-recurring expenses, such as bad debts,
weighed the bottom line a bit. The EUR 8.5m EBIT thus didn’t top our EUR 8.7m
estimate. Suominen sees nonwovens demand will remain on a high level. In our
view the 12% y/y revenue growth for FY ’20 makes further gains hard to achieve
in FY ’21. We expect Suominen to post flat top line this year.

In our opinion outlook and comments were encouraging

Suominen expects FY ’21 EBITDA to remain in line with FY ’20 (EUR 61m). We view
this outlook to be close to what we estimated prior the report. We revise our FY
’21 EBITDA estimate up only a bit, from EUR 55m to EUR 57m. The revision is not
big in quantitative terms, yet we see the outlook improves confidence with
respect to this year’s results. In our opinion there was a small risk Suominen
might have guided declining FY ’21 EBITDA. There remains considerable gross
margin uncertainty as raw material and transportation costs appear bound to
trend upward, but all in all we view Suominen’s comments to indicate the
nonwovens pricing environment is still relatively strong. In other words, gross
margin is unlikely to plunge.

We view current valuation attractive on stabilizing earnings

Suominen trades 6x EV/EBITDA and 10x EV/EBIT on our FY ’21 estimates. Recent
developments mean a high level of uncertainty persists around profitability
margins going forward, however we are now more confident on earnings
stabilization. Performance has improved with regards to plant-level efficiency,
although the pandemic boost makes it hard to quantify how much these own
measures have impacted figures. Suominen has announced certain small investments
to upgrade some of its existing production lines, and we see the company is now
in a strong position for possible larger investments, be they organic or
inorganic. Our new TP is EUR 6.5 (6.0). We retain our BUY rating.

Open report


TOKMANNI - STRONG TAILWIND EXPECTED TO CONTINUE

05.02.2021 - 09.10 | Preview

Tokmanni reports its Q4 result on next week’s Friday, 12th of Feb. Despite the
weakened COVID-19 situation, we expect a strong quarter. We have increased our
Q4E estimates and keep our rating “BUY” with TP of EUR 18.4.

Read more

Expecting sales growth of ~10%

Despite the weakened COVID-19 situation and new regional restrictions, we expect
Tokmanni to reach strong figures in Q4E, driven by campaigns and Christmas sales
as well as new store openings. We have increased our Q4’20E sales expectation by
~5% and our adj. EBIT expectation by ~10%. We expect Oct-Dec sales to grow by
10.4% y/y to EUR 314.5m and adj. EBIT of EUR 38m (margin of 12.1%). We expect
20E dividend of EUR 0.78 per share.

The final quarter is driven by campaigns and Christmas

The household consumption has been focused on domestic purchases during the
pandemic which has benefited Tokmanni throughout the year. Even though the virus
situation weakened towards the end of the year and fears of the new virus
variants rose we expect only limited impacts on customer flows. As consumers
have continued to spend more time at home, we expect the demand of e.g. leisure,
sport, and home products has been strong. The company’s increasing online
presence should also boost sales during campaigns such as Black Friday. We don’t
expect similar discount sales as seen in Q3 with apparel sales which should
support gross margin.

“BUY” with TP of EUR 18.4 intact

We expect FY20E sales of EUR 1061m (12.4% y/y) and adj. EBIT of EUR 92.9m. We
haven’t made significant changes to our 21E-22E estimates. On our estimates, the
company trades with 20E-21E EV/EBIT multiple of 14.4x and 14.3x, which is
similar compared to the Nordic non-grocery peers and ~20% discount compared to
the int. discount peers. We keep our rating “BUY” with TP of EUR 18.4 intact
ahead the Q4 result.

Open report


CONSTI - GOOD FINISH TO THE YEAR

05.02.2021 - 09.00 | Earnings Flash

Consti's net sales in Q4 amounted to EUR 78.1m, above our estimates and
consensus estimates (EUR 71.6m/71.1m Evli/cons.). EBIT amounted to EUR 3.0m,
slightly above our and consensus estimates (EUR 2.7m/2.7m Evli/cons.). Dividend
proposal EUR 0.40 per share (0.35 Evli/cons.). 2021 EBIT guidance EUR 7-11m.

Read more

 * Net sales in Q4 were EUR 78.1m (EUR 78.3m in Q4/19), above our and consensus
   estimates (EUR 71.6m/71.1m Evli/Cons.). Sales declined -0.2% y/y.
 * Operating profit in Q4 amounted to EUR 3.0m (EUR 2.8m in Q4/19), slightly
   above our and consensus estimates (EUR 2.7m/2.7m Evli/cons.), at a margin of
   3.8%.
 * EPS in Q4 amounted to EUR 0.27 (EUR 0.25 in Q4/19), slightly above our and
   consensus estimates (EUR 0.23/0.23 Evli/cons.).
 * The order backlog in Q4 was EUR 177.9m (EUR 185.8m in Q4/19), down by -4.3%.
   Order intake EUR 54.3m in Q4 (Q4/19: EUR 46.8m). New orders in 2020 EUR
   214.3m, down 0.2% y/y.
 * Free cash flow amounted to EUR 3.6m (Q4/19: EUR -5.1m) and 2020 cash flow
   amounted to a stellar EUR 18.3m (2019: EUR 4.0m).
 * Consti’s BoD proposes a dividend distribution of EUR 0.40 per share (0.35
   Evli/cons.).
 * Guidance for 2021: Operating profit is expected to be between EUR 7-11. The
   guidance range is large due to uncertainty factors brought by the COVID-19
   pandemic. Our 2021 estimate is EUR 9.1m.
 * Strategy updated for 2021-2023, long-term financial targets remain unchanged.

Open report


CAPMAN - STRONG Q4 BODES WELL FOR 2021

05.02.2021 - 08.15 | Company update

CapMan posted strong and clearly better than expected Q4 results, ending the
slightly challenging year on a clear positive note. In our view most importantly
management fees increased clearly, providing good support for fee-based
profitability in 2021. We have raised our 2021-2022E EBIT estimates by some 20%.

Read more

Strong fourth quarter beating our expectations
CapMan’s Q4 results were strong and clearly better than expected. Revenue
amounted to EUR 13.4m (Evli/cons. EUR 10.6m/10.7m) and the operating profit to
EUR 9.7m (Evli/cons. 4.4m/5.1m). The earnings beat was mainly attributable to
higher than expected fair value changes (act./Evli EUR 7.0m/3.4m). More
importantly and frankly also quite surprisingly management fees also grew
clearly from previous quarters. Management fees grew to EUR 9.7m (Evli EUR 7.5m)
and the Management Company business EBIT as such beat our expectations
(act./Evli EUR 3.6m/2.0m). CapMan expectedly proposed a dividend distribution of
EUR 0.14 per share, to be paid in two instalments.

2021-2022E EBIT estimates raised by some 20%
We have made larger revisions to our estimates and raised our 2021-2022E EBIT
estimates by some 20%. We have clearly raised our estimates for management fees,
with clear momentum being gained, and as such also fee-based profitability. Our
investment business return estimates remain somewhat conservative given the
solid Q4 returns (without larger exits), as we are not yet convinced of a clear
level shift. We still assume that carried interest will be earned during 2021E,
although COVID-19 has had a dent on the progress and timing is still highly
uncertain. On Group level in 2021 we expect CapMan to post much stronger results
than in 2020 with across the board improvements. Our 2021 EBIT estimate is at
EUR 38.2m (2019: EUR 12.3m).

HOLD with a target price of EUR 2.70 (2.40)
Based on our estimates revisions we adjust our target price to EUR 2.70 (2.40).
Current valuation still leaves some upside potential, but we still see some need
for more evidence on higher earnings levels. We retain our HOLD-rating.

Open report


SUOMINEN - NO VERY BIG SURPRISES

04.02.2021 - 10.00 | Earnings Flash

Suominen’s Q4 EBIT landed very near our estimate, but all considered the report
was perhaps a bit better than we expected.

Read more

 * Suominen Q4 revenue amounted to EUR 111.1m vs our EUR 106.0m estimate. Top
   line therefore grew by 18% y/y.
 * European revenue was EUR 44.3m vs our EUR 38.0m estimate. Americas recorded
   EUR 66.8m, compared to our EUR 68.0m estimate.
 * Gross profit stood at EUR 17.3m, while we expected EUR 15.9m. Gross margin
   thus amounted to 15.6% vs our 15.0% estimate.
 * Suominen Q4 EBIT amounted to EUR 8.5m, compared to our EUR 8.7m estimate. SGA
   and other expenses were higher than we estimated, and thus Suominen did not
   top our EBIT estimate despite bringing in revenue and gross margin higher
   than we expected.
 * Suominen guides FY ’21 comparable EBITDA to be in line with FY ’20. In our
   opinion the guidance sits well with our latest estimate and we don’t see
   scope for big estimate revisions. Suominen expects nonwovens demand to remain
   strong, however volatile raw material and transportation prices increase
   uncertainty.
 * The Board of Directors proposes EUR 0.10 per share dividend distribution for
   FY ’20, compared to our EUR 0.07 expectation. An additional EUR 0.10 per
   share return of capital is also proposed.

Open report


CAPMAN - SURPRISINGLY GOOD RESULTS

04.02.2021 - 09.15 | Earnings Flash

CapMan's net sales in Q4 amounted to EUR 13.4m, above our consensus estimates
(EUR 10.6m/10.7m Evli/cons.). EBIT amounted to EUR 9.7m, above our and consensus
estimates (EUR 4.4m/5.1m Evli/cons.). Dividend proposal: CapMan proposes a
dividend of EUR 0.14 per share (EUR 0.14/0.14 Evli/Cons.).

Read more

 * Revenue in Q4 was EUR 13.4m (EUR 16.6m in Q4/19), above our estimates and
   consensus estimates (EUR 10.6m/10.7m Evli/Cons.). Growth in Q4 amounted to
   -19.2% y/y.
 * Operating profit in Q4 amounted to EUR 9.7m (EUR 3.4m in Q4/19), above our
   estimates and consensus estimates (EUR 4.4m/5.1m Evli/cons.), at a margin of
   72.5%. Fair value changes were clearly higher than expected (Act./Evli EUR
   7.0m/3.4m) and Management Company business EBIT also exceeded our
   expectations (Act./Evli EUR 3.6m/2.0m).
 * EPS in Q4 amounted to EUR 0.04 (EUR 0.02 in Q4/19), above our estimates and
   consensus estimates (EUR 0.02 Evli/cons.).
 * Management Company business revenue in Q4 was EUR 10.3m vs. EUR 7.9m Evli.
   Operating profit in Q4 amounted to EUR 3.6m vs. EUR 2.0m Evli.
 * Investment business revenue in Q4 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q4 amounted to EUR 7.0m vs. EUR 2.9m Evli.
 * Services business revenue in Q4 was EUR 2.6m vs. EUR 2.4m Evli. Operating
   profit in Q4 amounted to EUR 1.0m vs. EUR 0.6m Evli.
 * Dividend proposal: CapMan proposes a dividend of EUR 0.14 per share (EUR
   0.14/0.14 Evli/Cons.).
 * Capital under management by the end of Q4 was EUR 3.8bn (Q4/19: EUR 3.2bn).
   Real estate funds: EUR 2.4bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.4bn, and other funds: EUR 0.03bn.

Open report


SRV - QUITE IN LINE WITH EXPECTATIONS

04.02.2021 - 08.45 | Earnings Flash

SRV's net sales in Q4 amounted to EUR 292.5m, quite in line with our and
consensus estimates (EUR 294.1m/299.6m Evli/cons.). EBIT amounted to EUR -8.0m,
slightly below our and consensus estimates (EUR -6.6m/-6.9m Evli/cons.).

Read more

 * Revenue in Q4 was EUR 292.5m (EUR 403.9m in Q4/19), in line with our and
   consensus estimates (EUR 294.1m/299.6m Evli/Cons.). Growth in Q4 amounted to
   -27.5% y/y.
 * Operating profit in Q4 amounted to EUR -8.0m (EUR -86.9m in Q4/19), slightly
   below our and consensus estimates (EUR -6.6m/-6.9m Evli/cons.), at a margin
   of -2.8%. The operative operating profit was in line with our estimates at
   EUR -6.8m (Evli EUR -6.6m). Profitability was affected by negative changes in
   the value of investments totaling EUR 12.3m.
 * EPS in Q4 amounted to EUR -0.05, in line with our estimates and consensus
   estimates (EUR -0.04/-0.05 Evli/cons.).
 * Construction: Revenue in Q4 was EUR 292.0m vs. EUR 293.5m Evli. Operating
   profit in Q4 amounted to EUR 8.7m vs. EUR 8.9m Evli.
 * Investments: Revenue in Q4 was EUR 0.9m vs. EUR 1.1m Evli. Operating profit
   in Q4 amounted to EUR –15.4m vs. EUR -13.5m Evli.
 * Other operations and elim.: Revenue in Q4 was EUR –0.3m vs. EUR -0.5m Evli.
   Operating profit in Q4 amounted to EUR -1.3m vs. EUR -2.0m Evli.
 * The order backlog amounted to EUR 1,153m, down 14.2% y/y. Order intake in Q4
   was EUR 140.7m, at similar levels as in the comparison period.
 * The BoD proposes that no dividend be paid for 2020.
 * Guidance 2021: Revenue is expected to be EUR 900-1,050m and operative
   operating profit EUR 16-26m (2020: EUR 15.8m adj.)

Open report


TALENOM - SOLID CASE, VALUATION STRETCHED

04.02.2021 - 08.00 | Preview

Talenom’s Q4 results should not contain any major surprises and our sights are
set on information on 2021 expectations. Recent acquisitions support continued
growth in 2021, with our growth estimate at 18%.

Read more

Good finish to year expected
Talenom will report Q4 results on February 8th. We expect revenue of EUR 16.8m
(Q4/19: 14.9m) and EBIT of EUR 2.6m (Q4/19: 1.5m). Our respective FY2020
estimates are EUR 65.5m and EUR 13.1m, with co’s guidance at EUR 64-68m and
12-14m respectively. With the predictability in revenue streams and the CMD held
in November we do not expect any major surprises and the guidance for 2021 will
be of most interest. We expect Talenom to propose a dividend distribution of EUR
0.15 per share (2019 EUR 0.125 adj.).

Acquisitions providing growth boost for 2021
Talenom announced the acquisitions of two accounting firms in Sweden earlier on
in Q4 and of acquisitions in Finland in February. The total combined net sales
of these acquisitions amounted to roughly EUR 4.5m, providing a good start for
growth in 2021. We had already assumed a pickup in inorganic growth and have
made only minor adjustments to our estimates. We expect revenue growth of 18.0%
in 2021, driven to a larger extent by acquisitions. Talenom has noted that
organic growth domestically has been more challenging, and the current
environment and digitalization needs offer opportunities for growing
inorganically.

SELL (HOLD) with a target price of EUR 11.5 (10.2)
Talenom’s share price has increased some 16% since our previous update and on
our estimates now trades at 2021 P/E of close to 50x. Talenom has a solid
multiyear track of rapid profitable growth, but with some uncertainty in the
somewhat different growth approach and organic growth slowdown we find the
current valuation hard to justify. We adjust our target price to EUR 11.5
(10.2), valuing Talenom at 43x and 38x 2021E and 2022E P/E respectively and
downgrade our rating to SELL (HOLD).

Open report


CONSTI - STEADY FINISH TO YEAR EXPECTED

03.02.2021 - 09.30 | Preview

Consti will report Q4 results on February 5th. We expect the steady development
seen during earlier quarters to continue and a first good year in a while after
previous year challenges. On our estimates Consti is set to double its
EBIT-margin in 2020 compared to 2019. We also expect dividend distribution to
pick up to EUR 0.35 per share (2019: EUR 0.16).

Read more

Expect a good finish to a year of improvement
Consti will report Q4 results on February 5th. We do not expect any major
deviations from the steady progress during earlier quarters in 2020 and expect
Q4 EBIT of EUR 2.7m. Consti has for FY2020 estimated that its operating result
will improve compared to 2019, which was achieved already by Q3. The second wave
of the coronavirus pandemic has had an impact on the construction industry
during Q4, with reports of temporary worksite shutdowns due to virus exposures.
To our understanding Consti has not been significantly affected, with some very
minor additional costs having been incurred already from earlier on in the year.

Cash generation supporting increased dividend distribution
We expect that Consti will propose a dividend of EUR 0.35 per share (2019: EUR
0.16), now being well back on track on profitability and cash generation after
challenges faced in previous years. The cash flow during 1-9/2020 was an
exceptionally solid EUR 14.7m (1-9/2019: EUR -1.1m). The outlook for 2021
remains somewhat weakened by demand uncertainty in particular among corporate
customers and we expect only limited growth. Room for some margin improvement
still exists, with supplier pricing power having impacted on the construction
industry during recent boom years.

BUY with a target price of EUR 12.0 (10.0)
We have not made any revisions to our estimates ahead of Q4. Valuation compared
to construction and building installations and services company peers is still
not challenging. With peer multiples also up since our previous update we adjust
our target price to EUR 12.0 (EUR 10.0) with our BUY-rating intact.

Open report


DETECTION TECHNOLOGY - SECURITY SEGMENT TURNING A CORNER

03.02.2021 - 09.00 | Company update

DT’s Q4 report was broadly in line with expectations. After a challenging year,
especially for the security segment, a gradual improvement is expected. Although
it’s difficult to estimate the slope of the recovery, improvement is still
ahead, and we see DT back on the road towards +10% growth and above 15% margins.
Based on the increased confidence in improving security demand coupled with DT’s
potential for better growth and profitability metrics than our peer group, we
raise our TP to 28.5 euros (prev. 26.5€) with BUY recommendation (prev. HOLD).

Read more

A decent Q4 and 2020 given challenging market situation

DT’s Q4 figures were broadly in line with expectations. Q4 net sales amounted to
EUR 19.9m (-20,4% y/y) vs. EUR 22.2m/22.2m Evli/consensus estimates. Q4 EBIT was
EUR 2.3m (11,8% margin) vs. EUR 2.7m/2.75m Evli/cons. R&D costs amounted to EUR
2.2m or 11,2% of net sales (Q4’19: 2.6m, 10,6%). SBU net sales were EUR 9.0m vs.
EUR 11.3m Evli estimate. SBU sales declined -45,5% y/y, mainly due the COVID-19
pandemic affecting security investments and challenging comparison figures. MBU
net sales were EUR 10.9m which was in line with our estimate of EUR 10.9m.
Dividend proposal is 0.28 (0.28/0.25 Evli/cons), which is at upper end of
distribution policy of 30-60%.

 Cautiously optimistic outlook

After a challenging year, especially for SBU, DT is cautiously optimistic that
the worst for SBU is soon behind. Demand in the security market is expected to
head for growth in Q2 of 2021 at the earliest. SBU sales will decrease in Q1
y/y, but will start to grow in Q2, although demand is still subject to
uncertainty. DT sees growth in industrial sales and double-digit growth in MBU
sales in H1 of 2021. Total net sales are expected to decrease in Q1 and grow in
H1 of 2021. DT sees predictability of the company's target markets still lower
than usual due to the extraordinary uncertainty caused by the pandemic. As of
Q1/21, DT will report three business segments; MBU, SBU and new Industrial
Solutions Business Unit (IBU), which previously was part of SBU. Industrial
sales accounted for over EUR 10m (25%) of SBU sales in 2020. Industrial market
is categorized as higher margin, but smaller volumes, more fragmented customer
base, and a variety of end applications.

 BUY with target price 28.5 euros (prev. 26.5€)

We have made slight calibrations to our estimates based on the report. We
continue to expect DT to return to sales and profit growth path this year. We
estimate 2021e net sales growth of 12,4 % and an EBIT of EUR 12.4m (13,5%
margin), as SBU will start contributing to growth from Q2/21 onwards. Although
it’s difficult to estimate the slope of the recovery, improvement is still
ahead, and we see DT back on the road towards +10% growth and above 15% margins.
On our 2022e estimates, DT is trading at 20.6x EV/EBIT, in line with peer group.
Despite valuation being in line with peer group, we’re willing to take a more
proactive stance based on the increased confidence in improving security demand
coupled with DT’s potential for better growth and profitability metrics than
peer group. We raise our TP to 28.5 euros (prev. 26.5€ with BUY recommendation
(prev. HOLD).

Open report


DETECTION TECHNOLGY - CAUTIOUS OUTLOOK

02.02.2021 - 09.30 | Earnings Flash

DT sees growth in IBU sales and double-digit growth in MBU sales in H1 of 2021.
Demand in the security market is expected to head for growth in Q2 of 2021 at
the earliest. SBU sales will decrease in Q1 year-on-year, but will start to grow
in Q2, although demand is still subject to uncertainty. Total net sales are
expected to decrease in Q1 and grow in H1 of 2021. DT sees predictability of the
company's target markets still lower than usual due to the extraordinary
uncertainty caused by the pandemic.

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 * Group level results: Q4 net sales amounted to EUR 19.9m (-20,4% y/y) vs. EUR
   22.2m/22.2m Evli/consensus estimates. Q4 EBIT was EUR 2.3m (11,8% margin) vs.
   EUR 2.7m/2.75m Evli/cons. R&D costs amounted to EUR 2.2m or 11,2% of net
   sales (Q4’19: 2.6m, 10,6%).
 * Security and Industrial Business Unit (SBU) had net sales of EUR 9.0m vs. EUR
   11.3m Evli estimate. SBU sales declined -45,5% y/y, mainly due the COVID-19
   pandemic affecting security investments. DT does not expect demand in the
   security market to improve before Q2 2021.
 * Medical Business Unit (MBU) delivered net sales of EUR 10.9m which was in
   line with our estimate of EUR 10.9m. Net sales of MBU increased by 27,7% y/y
   due continued strong demand in healthcare. DT expects double-digit growth in
   MBU sales in Q1 and Q2 2021.
 * Dividend proposal is 0.28 (0.28/0.25 Evli/cons).
 * Number of active customers increased by almost 20% in 2020 to reach 330
 * New segment; as of Q1/21, DT will report three business segments; MBU, SBU
   and new Industrial Solutions Business Unit (IBU), which previously was part
   of SBU. Industrial sales accounted for over EUR 10m (25%) of SBU sales in
   2020.
 * No change in medium-term targets; at least 10% net sales growth, EBIT margin
   at or above 15%.

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CAPMAN - DOWNGRADE TO HOLD

02.02.2021 - 09.05 | Preview

We expect CapMan to report rather good Q4 results, with our previous slight
concerns of investment returns having been alleviated since Q3. We expect CapMan
to propose a dividend distribution of EUR 0.14 per share, implying a dividend
yield of 5.6% (1.2.2021 closing price).

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Expecting a rather good last quarter
CapMan will report Q4 results on February 4th. Post-Q3 we saw slight concerns in
fair value changes of investments mainly in real estate due to the revaluation
time frames. These concerns now do not appear to be substantial and we have as
such raised our Q4/2020 estimates for the Investment Business. The lack of
significant success fees and carried interest will limit the earnings but with a
lower share of bonuses in personnel expenses (vs. Q4/2019) CapMan should still
post rather good earnings figures. We have adjusted our EBIT estimate to EUR
4.4m (prev. 2.9m) mainly due to the raised fair value change estimate.

Continued DPS growth expected
We expect CapMan to propose a dividend of EUR 0.14 per share, in line with the
target of paying an annually increasing dividend (2019: EUR 0.13 per share).
With the financing decisions made during Q4 the liquidity situation will remain
healthy despite the weaker earnings this year. We expect earnings figures to
improve clearly in 2021 driven by higher fee-based profitability from the growth
in AUM, higher investment returns after the weak 2020 and growth in the services
business. We expect 2021E EBIT of EUR 32.0m compared with EUR 7.0m 2020E.

HOLD (BUY) with a target price of EUR 2.40 (2.20)
Current valuation is after the share price increase since on our previous update
(+~28%) on our estimates somewhat higher than that implied by our SOTP-model and
peer multiples, but the anticipated dividend yield is still clearly supportive.
Following our estimates and multiples adjustments we raise our target price to
EUR 2.40 (EUR 2.20) but downgrade our rating to HOLD (BUY).

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SRV - CONSTRUCTION MARGINS SHAPING UP

02.02.2021 - 08.45 | Preview

Given the previously specified outlook the Q4 profitability is largely known,
with the Investments segment overshadowing good construction progress. The Q4
report should bring a lot to the table, especially in regards of previous
communication of restoring profitability back to 2017 levels, clearly above the
2020 guidance.

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Good construction development burdened by investments
SRV will report Q4 results on February 4th. SRV specified its guidance earlier
on, expecting the operative operating profit for 2020 to be in the range of EUR
3-6m. The Q4 results will be affected by changes in the value of the Investment
segment’s balance sheet items for a total negative impact of EUR 12m. Although
the negative impact casts a shadow on the good operative operating profit
development during earlier quarters these items should to our understanding be
non-cash, and the guidance still implies continued healthy construction margin
development. Our estimate for the Construction segment’s operative operating
profit margin in 2020 is at 2.9% (2019: 0.7%) and Group operative operating
profit estimate at EUR 6.0m.

Expectations of a better year in 2021
We do not expect a dividend distribution for FY2020. Although the company’s cash
flows have improved clearly through divestments and financial measures taken,
the company still has a rather strained balance sheet given current operating
cash flows. The guidance for 2021 will be of key interest, as SRV has previously
communicated intentions to restore the operative operating profit in 2021 to
levels seen in 2017 (EUR 27.0m). SRV will also release its updated strategy and
financial targets in conjunction with the Q4 results.

BUY with a target price of EUR 0.64
Apart from the changes to the Investments segment’s balance sheet item changes,
our estimates remain intact. We retain our BUY-rating and target price of EUR
0.64.

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SUOMINEN - ADDITIONAL IMPROVEMENT IS NOT EASY

28.01.2021 - 09.25 | Preview

Suominen reports Q4 results on Feb 4. Our Q4 estimates are intact but we make
small revisions due to changes in EUR/USD. In our view Suominen can achieve flat
top line in FY ‘21 while profitability faces headwinds after an extraordinary
year. We retain our EUR 6 TP and BUY rating.

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We expect gross margin to decline somewhat from now on

We estimate Americas and Europe to have continued to grow by 9% and 18% y/y
respectively in Q4. These rates are very similar to the ones seen in Q3. We
expect Q4 gross margin to have declined from the very high 17.1% Q3 figure to
15%, and thus estimate EBITDA down by EUR 4m q/q. USD has weakened by ca. 3%
relative to EUR in the past three months and we update our estimates to
incorporate the approximately EUR 10m headwind this represents to FY ’21
Americas revenue. We consequently estimate EBITDA down by about EUR 6m in FY ’21
due to pressure on gross margin. We would be surprised if Suominen guides
profitability development to be better than flat.

Wipes demand is strong while input prices are recovering

Raw materials prices found their lows in Q4; there wasn’t yet any major spike.
Prices have continued to climb so far this year, and this raises uncertainty
regarding Suominen’s H1’21 gross margins. There was already negative nonwovens
pricing pressure in Q4’20, following the weak H1’20 raw materials prices with a
lag. In a more ordinary environment such developments would represent a clear
hit on Suominen’s gross margin, however we see there’s still a chance these
adverse forces will be somewhat muted by the current extraordinary wipes demand
situation. Double-digit top line y/y growth is on the cards for Q4’20 and Q1’21,
but beyond that the respective comparison periods turn challenging. We expect
only flattish development beyond Q1’21.

Earnings multiples are still very reasonable

Last year has left the bar very high. We estimate Suominen to have recorded more
than EUR 60m in FY ‘20 EBITDA and some EUR 40m in EBIT. We don’t see the company
reaching such figures again any time soon, yet we expect EBITDA and EBIT to
stabilize around ca. EUR 55m and EUR 35m during the next few years. On these
estimates Suominen now trades around 6x EV/EBITDA and 10x EV/EBIT, a level which
we continue to view attractive. We retain our EUR 6 TP and BUY rating.

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DETECTION TECHNOLOGY - OUTLOOK BRIGHTENED BY VACCINE OPTIMISM AND CHINESE
RECOVERY

27.01.2021 - 09.00 | Preview

Detection Technology will report its Q4 next Tuesday, February 2nd, at 9:00 EET.
We look forward to hearing the latest developments and outlook regarding the
security and medical imaging markets, especially now with the backdrop of global
vaccine optimism and Chinese economic recovery. We expect DT to return to net
sales and EBIT growth path this year, and based on the increased confidence in
market improvement, we raise our target price to €26.5 (prev. €22) but maintain
HOLD recommendation.

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A challenging year coming to an end

We expect Q4 net sales of 22.2 MEUR (22.2 MEUR cons) and EBIT of 2.7 MEUR (2,75
MEUR cons), meaning a decline of -11% and -16% respectively compared to last
year. 2020 has been challenging with the pandemic negatively affecting DT’s
Security Business Unit, which represents roughly 60% of total net sales. With
our estimates, DT’s FY20 net sales are down -18% to 84 MEUR and EBIT is down
-46% to 9.1 MEUR (10,8% EBIT margin). As a result, we expect DT to distribute
0.28 dividend compared to 0.38 last year. Our dividend estimate is at upper end
of DT’s dividend distribution policy of 30-60%. Dividend could prove to be
smaller, but we see this as immaterial as DT in our view is more a growth case
than a dividend case.

 Global vaccine optimism and China brightening outlook

The key take from the upcoming Q4 result will be hearing management’s view on
the security and medical imaging markets. DT stated in its Q3 report that it
expects SBU sales to decrease in Q4, but to start improving in H1/21 driven by
Chinese demand. China’s economy has recovered swiftly from the pandemic with
Chinese’s GDP reaching pre-COVID levels at end of last year. China’s GDP
accelerated 6,5% y/y in Q4 (Q3: 4,9% y/y), which is the fastest pace in last two
years. The recovery in China coupled with the improved outlook for the battered
aviation segment thanks to vaccine optimism, should provide DT with good grounds
to improve on. MBU is expected to continue growing, albeit more slowly than in
2020.

 HOLD with new target price of €26.50 (prev. €22)

We expect DT to return to both revenue and EBIT growth in 2021 but estimating
the pace of recovery remains challenging due to low visibility. We have not made
any changes to our estimates before the Q4 report, but based on the increased
confidence in market improvement, we raise our target price to 26.5 euros (prev.
22 euros) reflecting both growth and earnings improvement potential, at or above
our peer group. Our target price values DT at 21-22E EV/EBIT of 27x and 19x
respectively, in line with our peer group as we look for more signs of security
market recovery.

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RAUTE - ANTICIPATION SEEMS OVERDONE

22.01.2021 - 09.20 | Company update

Raute has good potential to perform strong in the coming years, however in our
opinion valuation is now stretched too high. Our TP is now EUR 20 (18), rating
SELL (HOLD).

Read more

We make some upward revisions to our estimates

Raute said it expects FY ’20 revenue to amount to some EUR 115m. This implies
Q4’20 top line at approximately EUR 39m. Raute previously expected the FY ’20
figure to decrease y/y, and now the update guides a clear decrease. We don’t
view the update as substantial negative news and the preliminary ca. EUR 39m
Q4’20 revenue figure is in fact somewhat above our previous EUR 33m estimate. We
now estimate Q4 project deliveries revenue at EUR 26m (up 8% y/y) and that for
technology services at EUR 13m (down 14% y/y). Raute didn’t update profitability
guidance. We previously estimated EUR 1.7m in Q4 EBIT and we revise the estimate
up a bit to EUR 2.0m.

FY ’21 EBIT yet unlikely to reach the highs seen in the past

We now expect Q4 order intake at EUR 19m when excluding the large EUR 55m
Russian project. We estimate the smaller project deliveries orders at EUR 7m, a
figure which is clearly above the very low benchmark figures. We expect
technology services order intake at EUR 12m, in other words slightly down y/y
but meaningful improvement q/q. The past few reports have painted an overall
muted business picture, however there is a decent chance the outlook is already
improving. We nevertheless think the recent share price gains have made
near-term multiples too dear as the overall uncertainty level remains very much
elevated.

In our view recent gains make downside relatively likely

We expect Raute’s top line to grow meaningfully, by ca. 15% y/y, in FY ’21. We
make small revisions to our FY ’21 EBIT estimate, and now see the figure at EUR
6.4m (previously EUR 6.0m). This would still be far from the ca. EUR 11m EBIT
that Raute averaged annually in 2016-19. Significant earnings potential remains
for the coming years, but in our opinion the share has appreciated too steep
considering all the uncertainty. We don’t see upside on the current 8x EV/EBITDA
and 13x EV/EBIT multiples on our FY ’21 estimates. The valuation doesn’t look
that expensive relative to long-term potential and in terms of the respective FY
’22 7.5x and 10x multiples, but we think this potential remains too far in the
future. Our new TP is EUR 20 (18), rating SELL (HOLD).

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GOFORE - GROWTH NARRATIVE REMAINS INTACT

18.01.2021 - 09.15 | Company update

Gofore held its Capital Markets Day on January 14th, which for us acted mainly
as a confidence boost, as updated financial targets and strategy had been
communicated earlier. The company remains well on its track of profitable and
rapid growth, with little obstacles to be seen. We retain our HOLD-rating and
target price of EUR 16.0.

Read more

CMD mostly a confidence booster for us
Gofore held its Capital Markets Day on January 14th. With the company having
updated its strategy and long-term financial targets earlier, new information in
that regard was limited. From a financial perspective, focus in our view was
rather clearly on the commitment to continued rapid and profitable organic and
inorganic growth, with an increased focus on international operations and the
usage of subcontracting. The CMD increased our confidence in Gofore’s
international growth capabilities, which arguably has been one of the company’s
more challenging areas, as well as Gofore’s overall delivery capabilities.

Growth target well in sight
Gofore also published its December net sales figures, with full-year net sales
at EUR 78.0m, slightly beating our EUR 77.3m estimate. We have made slight
adjustments to our estimates but no major changes overall. Based on the
inorganic growth from the Qentinel Finland acquisition along with an organic
uplift we expect growth of 18.5% in 2021, with any potential acquisitions quite
easily being able to push growth over the 20% target. We expect relatively flat
margin development going forward given the already excellent levels and limited
scalability.

HOLD with a target price of EUR 16.0
Current valuation remains clearly above peers, which to a larger extent is
warranted given the solid growth and profitability, which in the long-term could
provide upside potential, while near-term potential remains rather limited. Our
target price of EUR 16.0 implies a 2021 P/E of 27.0x. We retain our HOLD-rating.

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ENDOMINES - STILL QUITE A LOT TO PROVE

15.01.2021 - 09.30 | Company report

Endomines currently holds sizeable assets in the United States, looking to
increase gold production to 40k oz p.a. within four years. Existing
infrastructure and the high gold price provide support for pick-up in production
volumes but given the track record in recent years the company still has quite a
lot to prove.

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Previous years have not gone quite as planned
Endomines established operations in the United States in 2018, after having been
active only in Finland throughout the majority of the 2010’s. The past years
have seen focus being on bringing the first asset, Friday, to production. The
company has been met with challenges along the way, relating both to technical
and financial challenges, but production commenced at the site in 2020.
Continued technical challenges and a tight liquidity situation, however, forced
the company to put the site under care and maintenance towards during the latter
half of 2020.

Seeking 40k oz p.a. production within four years
Endomines is seeking to bolster its financial position to be able to restart
production. With the high gold prices, plans have also been made for restarting
production at Pampalo in Finland, as production was halted due to the then
unfavourable gold price levels. Financial challenges have unfortunately been an
inherent feature in the past years, as the company has not been able to create
reliable cash flows. Now with assets that can be rapidly brought to production
due to existing infrastructure and the favourable gold price levels Endomines is
looking to improve production figures, targeting a production of 40k oz p.a.
within four years. With the recent year track-record, however, the company in
our view still has quite a lot to prove.

HOLD with a target price of SEK 2.9 (3.5)
We lower our target price to SEK 2.9 (3.5) following adjustments to our
assumptions with the information provided regarding the rights issue and
production plans. We retain our HOLD-rating.

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SCANFIL - A MOST RESILIENT PERFORMER

08.01.2021 - 09.20 | Company report

We remain confident towards Scanfil’s long-term value chain positioning, however
in our opinion recent share price gains have largely neutralized valuation. Our
new TP is EUR 6.5 (6.25) and our rating is now HOLD (BUY).

Read more

The performance amid the pandemic testifies to strengths

Scanfil’s business has remained robust to macroeconomic shocks throughout its
40+ year history. ‘20 is another testament to this resilience as the pandemic
hasn’t considerably affected Scanfil’s performance. The company has had to make
only very small revisions to FY ’20 guidance; the latest revenue and EBIT
outlook figures are down by respective 2% and 5% compared to the initial figures
issued before the pandemic broke out. We now expect Scanfil to achieve some 3%
top line growth for FY ’20; the increase is due to the 2019 HASEC acquisition.
Profitability has remained strong. The Energy & Automation, Industrial and
Medtec & Life Science segments have extended their good figures, while
Communication and Consumer Applications have been softer. Consumer Applications’
revenue is down by ca. EUR 40m since FY ’18, however we view the segment still
has good long-term outlook. We aren’t estimating rapid rebound for the segment
yet see Scanfil should be able to post a 4% organic CAGR in the coming years
thanks to its three largest ones.

We expect stellar performance to continue

We see Scanfil remains in top shape overall and is probably one of the best
performing decent-sized contract electronics manufacturers globally. In our
opinion Scanfil is unlikely to encounter profitability issues going forward and
long-term organic growth outlook still appears good despite the pandemic. The
company is also in a strong position to do more M&A and we are confident any
potential deal, small or large, is likely to further improve Scanfil’s
competitiveness.

Multiple expansion was overdue, yet visibility is limited

Scanfil’s share has appreciated significantly, and in our view some multiple
expansion was long overdue given the company’s strong track record. Scanfil now
trades in the range of 7-8x EV/EBITDA on our estimates for ’20-21, a level we
don’t consider that challenging, but also view to be enough to curb meaningful
additional gains for now since revenue visibility is limited even in the best of
times. Our TP is EUR 6.5 (6.25), rating HOLD (BUY).

Open report


ETTEPLAN - SIGNS OF IMPROVED DEMAND ACTIVITY

21.12.2020 - 09.30 | Company update

Etteplan raised its revenue and EBIT guidance for 2020, as investment demand has
been picking up on the positive news on Coronavirus vaccines, with the fourth
quarter set to show solid figures. We have raised our 2020-2022 EBIT estimates
by some 6-9%. We retain our HOLD-rating with a target price of EUR 12.4 (9.3)

Read more

2020 revenue and EBIT guidance raised
Etteplan issued a positive profit warning, raising its revenue and EBIT
guidance. Revenue in 2020 is now expected to be at same levels as in the
previous year (prev. decrease slightly or same levels as previous year) and
operating profit to decrease slightly or be at previous year levels (prev.
decrease clearly). According to Etteplan the positive news on Coronavirus
vaccines has had a favourable impact on investments and as such aided revenue
during the last quarter of the year. The impact has been seen across the board
but in particular within software and digitalization related solutions.

Moving in a better direction
The revised guidance implies solid results in the fourth quarter and is a clear
confidence boost after the demand weakness in previous quarters. We have raised
our 2020-2022 EBIT estimates by some 6-9%. We still remain somewhat cautious to
revenue growth, as demand pick-up visibility is still rather limited, expecting
a growth of 6.9% in 2021. We could certainly see potential for growth returning
to double-digit figures if demand activity continues to improve. The Tegeman
acquisition will also provide an inorganic boost to growth in 2021 and continued
M&A activity is likely, although hard to predict.

HOLD with a target price of EUR 12.4 (9.3)
On our estimates Etteplan trades quite in line with historic valuation and on
peer median multiples. The positive news has certainly raised our confidence
levels but with the still present uncertainty higher valuation for now appears
unwarranted. We adjust our TP to EUR 12.4 (9.3), valuing Etteplan at 18x 2021e
P/E, and retain our HOLD-rating.

Open report


GOFORE - GOOD THINGS GOING ON

18.12.2020 - 09.35 | Company update

Gofore announced its updated strategy and new long-term financial targets,
seeking over 20% annual growth and a 15% adj. EBITA-margin. With continued good
signs of rapid profitable growth and recent solid order intake we adjust our TP
to EUR 16.0 (12.1) and retain our HOLD-rating.

Read more

Seeking above 20% long-term growth
Gofore announced its updated strategy and gave and gave new long-term financial
targets. Gofore will continue to seek to grow profitably both domestically and
internationally while creating a positive impact on the society, customers and
employees. Approximately half of the growth in the coming years is targeted
through acquisitions and the aim for the international business is to achieve a
similar growth pace as the Group. The long-term aim is to achieve above 20%
annual net sales growth. The target for profitability is an adjusted
EBITA-margin of 15%. Gofore also announced that it aims to transfer to the
Nasdaq Helsinki Main Market during the first quarter of 2021.

Very promising signs from recent order intake
The new growth target is clearly above our previous expectations, with the
organic growth having become more challenging in previous years for the market
as a whole. Gofore has also grown to a size at which maintaining the relative
growth pace should become more challenging. The order intake during the last
quarter of 2020 has however been extremely promising, with the potential value
of new orders corresponding to around 2019 net sales. Gofore is also in a solid
position to continue inorganic growth, with a clear net cash position also after
the Qentinel Finland acquisition. We have raised our growth estimates, expecting
~17% annual growth during 2021-2022 (prev. ~12%), and made adjustments with the
transition to IFRS.

HOLD with a target price of EUR 16.0 (12.1)
On current multiples valuation is certainly not cheap, but with notable signs of
continued rapid and profitable growth there is certainly merit in staying on for
the ride. We adjust our TP to EUR 16.0 (12.1) and retain our HOLD-rating.

Open report


MARIMEKKO - STRONG MOMENTUM CONTINUES

11.12.2020 - 09.40 | Company update

Marimekko issued a positive profit warning yesterday. The company expects 2020E
net sales to be approx. at the same level or slightly lower compared to 2019.
Adj. EBIT is expected to be higher compared to last year. We have increased our
estimates and keep our rating “BUY” with TP of EUR 50 (44).

Read more

New guidance due to better than expected sales trend

Marimekko raised its 2020E guidance in particular due to better than expected
trend and improved outlook in the retail sales in Finland. The company now
expects 20E net sales to be approx. at the same level or slightly lower compared
to last year (2019: EUR 125m). Adj. EBIT is expected to be higher compared to
the previous year (2019: EUR 17.1m). Previously, Marimekko expected 20E net
sales to be lower compared to the previous year and adj. EBIT to be approx. at
the same level or lower compared to last year. We expected 20E sales to decline
by 3.5% y/y to EUR 121m and adj. EBIT of EUR 17.3m.

Appealing to consumers despite the uncertain times

The profit warning didn’t come as a total surprise as the company has constantly
been able to appeal to consumers, even despite the uncertain times. The company
indicated that most of the earnings for H2’20E were generated during Q3. The net
sales accrual in H2E is expected to be more balanced between the third and the
final quarter. We expect the campaign season has boosted especially Marimekko’s
domestic sales. In addition, the Christmas season is ongoing, and the household
consumption is more focused on domestic purchases this year. We expect this to
have a positive impact on Marimekko’s domestic sales and expect good demand
especially in home décor products. However, there are still uncertainties
related to the pandemic situation and the customer flows in retail stores. It is
also essential to maintain the operational reliability of the distribution
centers and logistics.

“BUY” with TP of 50 (44)

We have increased our 20E sales expectation by ~3% and our adj. EBIT expectation
by ~12%. We now expect 20E sales of EUR 124.4m (-0.8% y/y) and adj. EBIT of EUR
19.4m. On our estimates, the company trades with 20E-21E EV/EBIT multiples of
18.7x and 18.0x which is a clear discount compared to the luxury peers. We keep
our rating “BUY” with TP of EUR 50 (44).

Open report


ASPO - SAILING TOWARDS EUR 30M EBIT

10.12.2020 - 09.15 | Company update

Aspo revised FY ’20 guidance, which prompts us to update estimates particularly
for ESL and Telko. Our TP is now EUR 8.75 (8) per share, BUY rating remains
intact.

Read more

We raise our total Q4’20 EBIT estimate by EUR 2.9m

Aspo states especially steel and energy industry cargo volumes have developed
strong and so ESL has performed better than expected before. The upgrade is thus
not due to e.g. additional cost savings but driven by improving business
conditions. Aspo previously guided EUR 14-16m in FY ’20 EBIT and the revised
range is EUR 18-20m. The positive outlook revision was not such a big surprise
since the previous guidance seemed to us quite cautious with respect to Telko’s
development. We now estimate ESL to post EUR 3.2m in Q4 EBIT (prev. EUR 1.7m)
and Telko to improve slightly further to EUR 4.3m (prev. EUR 2.8m). The new
range suggests Aspo will achieve about EUR 7m in Q4 EBIT, which implies the
company is well on track towards more than EUR 30m annually in the coming years.

The upgrade is incrementally positive for our overall view

Only last year Aspo’s profitability development appeared to rely mostly on ESL.
There was potential in Telko that always waited for its materialization. Earlier
this year the roles reversed in a way when Telko delivered very strong Q2 and Q3
results while ESL was clearly suffering the pandemic’s adverse effects. It has
now become more apparent that ESL has not been left nursing any permanent
wounds. Given ESL’s intact prospects and Telko’s gains Aspo’s overall
development towards long-term financial targets can even be considered positive
in 2020 (despite that FY ’20 EBIT will likely decline a bit y/y). EBIT thus
seems bound towards the EUR 30m ballpark in the coming years, compared to the
EUR 20m level before the pandemic.

Current valuation still leaves good upside potential

The recently reaffirmed long-term financial targets now look maybe more relevant
than ever. There’s strong potential in all three segments, however 2020 also
raises macroeconomic uncertainty and thus the operational upside prospects
should still be valued somewhat cautiously. In our opinion Aspo’s equity value
per share could easily top EUR 10 in the future if ESL and Telko continue to
perform well next year. Our new TP is EUR 8.75 (8) and we retain our BUY rating.

Open report


FELLOW FINANCE - NEW STRATEGIC INITIATIVES

09.12.2020 - 09.15 | Company update

Fellow Finance held a strategy event, with sights set on launching new payment
and e-commerce products in 2021, for both SMEs and consumers. International
operations are being focused on current markets, with new openings unlikely. We
retain our HOLD-rating and TP of EUR 2.8.

Read more

New product launches expected in 2021
Fellow Finance held a strategy event on December 8th. Focus is being set on new
payment and e-commerce products for SMEs and consumers, which include credit
cards and invoice payment services. With the challenging consumer lending
environment and potential extension of the temporary cap on consumer credit
interest rates (credit cards excluded) the services could offer more recurring
and higher margin fees. The rollouts of the new products are planned for 2021.
The company has also restricted its international expansion plans, now focusing
on selected existing international markets and new openings in the coming years
are unlikely.

Rapid growth still expected
Fellow Finance set its 2023 financial targets, seeking EUR 23m in revenue, of
which a significant share from business finance and international markets, and
an EBIT-margin of 15%. In 2020 the company expects revenue of approx. EUR 11m
and earnings to be negative (H2/2020 close to zero). Our revenue estimates
remain largely intact while our 2020 EBIT estimate is up by EUR 0.5m and our
2021-2023 EBIT-margin estimates down by 2-6pp.

HOLD with a target price of EUR 2.8
Although we have lowered our mid-term profitability estimates, the new
initiatives appear rather appealing and raise our confidence in Fellow Finance’s
ability to navigate the challenging consumer lending environment. Performance in
business lending has also been better than anticipated, and loan volumes are
picking up nicely. We retain our HOLD-rating and TP of EUR 2.8.

Open report


MARIMEKKO - OUTLOOK REMAINS BRIGHT

02.12.2020 - 09.45 | Company report

Marimekko is a Finnish design and lifestyle company founded in 1951. The
company’s largest market area is Finland followed by the APAC region. As we
expect further earnings improvement potential via profitable, global growth, we
keep our rating “BUY” with TP of EUR 44 (43).

Read more

A Finnish design and lifestyle company

Marimekko, founded in 1951 is a Finnish design and lifestyle company. The
company is known for its unique colors and prints. The company’s product
portfolio includes high-quality clothing, bags and accessories as well as home
décor items ranging from textiles to tableware. The company aims to gain
profitable growth via broader target audience. The company has approx. 150
stores across the world. Marimekko’s revenue CAGR in 2013-2019 was ~4.9 percent.

20E hampered by the pandemic but outlook remains good

Year 2020 started well but the Covid-19 quickly spread across the world and
Marimekko was forced to close its retail stores temporarily in Finland as well
as in other market areas. Despite of the challenging times, Marimekko performed
relatively well during the lockdown. The company has benefited of having
different product segments (i.e. consumers have spent more time at home which
has increased the demand of home décor products while fashion sales have
dropped). We expect Marimekko’s sales to decline by ~4 percent y/y in 20E. Given
the circumstances, we consider this fairly good performance. We expect adj. EBIT
to be on a par with last year, totaling EUR 17.3m. We expect revenue to grow by
~8 percent in 21E and ~6 percent in 22E. We expect Marimekko is set to reach its
EBIT margin target of 15 percent by 22E.

“BUY” with TP of EUR 44 (43)

We value Marimekko by using valuation multiples. On our estimates, the company
trades with 20E P/E multiple of 24.8x and EV/EBIT multiple of 17.9x. Hence the
company trades with a discount compared to the premium and luxury peers.
Correspondingly, the company trades with 21E P/E multiple of 20.7x and EV/EBIT
multiple of 15.6x, which translates into a clear discount compared to the luxury
peers. We keep our rating “BUY” with TP of EUR 44 (43).

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ENDOMINES - DRIVEN INTO A TIGHT SPOT

02.12.2020 - 09.15 | Company update

Endomines Q3 figures were weaker than expected, as a tight funding situation
forced the company to put operations at Friday into care and maintenance. The
company is now seeking to bolster up its financial position through a series of
measures, seeking SEK 281m through a rights issue for ramp-up at Friday and for
other projects. We adjust our TP to SEK 3.5 (5.5), rating now HOLD (SELL)

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Friday operations put under care and maintenance
Endomines reported weaker than expected Q3 results, as the operations at Friday
were put under care and maintenance due to a very tight financial situation.
Ramp-up at Friday was previously delayed by problems with the tailings
dewatering system and although solving the problems would not have been a large
investment, the limited cash flows and very tight cash position (Q3/20: SEK
12.0m) forced the company to take more drastic measures. Q3 revenue and EBITDA
of SEK 1.9m and SEK -23.1m were as such clearly below our estimates (Evli SEK
11.1m and -15.6m respectively).

Taking measures to improve financial position
Endomines announced intentions to initiate a SEK 281m rights issue, at a
subscription price of SEK 2.5 per share, along with possible directed share
issues of near SEK 75m to cover guarantee undertakings and bridge financing
claim set-offs. With some 60 percent of the rights issue covered by subscription
undertakings and guarantee commitments Endomines should in our view be able to
secure enough funding to restart operations at Friday and potentially also
Pampalo if the gold price remains at >1,800 USD/oz levels. We estimate a six to
eight month delay in ramp-up of Friday due to the funding challenges.

HOLD (SELL) with a TP of EUR 3.5 (5.5)
With the estimated impact of the rights issue on share amounts and net debt we
adjust our TP to SEK 3.5 (5.5), assuming that the rights issue is subscribed in
full. The gold price remains at beneficial levels and is continuing to see
upwards pressure despite minor short-term declines. We raise our rating to HOLD
(SELL).

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ASPO - CMD NOTES

02.12.2020 - 09.10 | Company update

Aspo reaffirmed its long-term financial targets for FY ’23. The CMD didn’t
disclose any drastic news but we are slightly more positive than before
regarding the earnings rebound. Our TP is now EUR 8.00 (7.25), retain BUY
rating.

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ESL’s long-term 12% EBIT margin potential is still there

While the dry bulk cargo market has been hit by the pandemic ESL has not lost
market share. Large vessel operations have been especially challenging due to a
lack of cargo demand, however smaller vessel types, such as those of AtoB@C,
have performed better. ESL in fact reports the business has won market share in
e.g. wood-based products shipments. The fleet can also serve e.g. the Baltic
wind power industry in the effort to scale up renewable energy production in the
area. In the long-term the Arctic area (incl. Russia) holds strong cargo volume
potential for larger vessels. Such vessels’ cargo volumes began to increase in
late Q3. ESL’s capacity is now fully in use. In our opinion dry bulk cargo
markets are already on track to normalize in tandem with many industrial sectors
even if the pandemic is yet to fade away from more everyday life. ESL also says
it has achieved admin costs reductions that are not just one-offs in nature.

Telko already achieved long-term margin targets

Telko’s recent working capital management and pricing control measures have
already produced significant results in cash conversion cycle, and there remains
some more room for improvement relative to certain benchmarks. Telko now has
established the lubricants business besides the plastics and chemicals ones. We
believe lubricants is an area that can deliver more good results in the
long-term as the business is still quite small relative to plastics and
chemicals. We see Telko’s reinforced core is now better positioned to capture
profitable volumes. Telko has indeed already managed to top the 6% EBIT margin
target during the last two quarters. Leipurin however is yet to deliver gains
towards its 5% EBIT margin target.

Significant EBIT improvement appears possible next year

Although the long-term financial target confirmation is good news as such focus
nevertheless remains on more short-term profitability development. Our TP is now
EUR 8.00 (7.25); we retain our BUY rating since profitability continues to
improve and SOTP valuation supports further upside potential.

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ENDOMINES - RIGHTS ISSUE TO SECURE FUNDING

01.12.2020 - 09.15 | Earnings Flash

Endomines announced that the operations at Friday have been put under care and
maintenance due to funding challenges and has resolved on a rights issue of SEK
281m.

Read more

 * Total revenue* in Q3 amounted to SEK 1.9m, with our estimates at SEK 11.1m.
   Gold production during 1-9/2020 amounted to 538.1.1oz (Evli 986oz), with a
   head grade of 3.52g/t (Evli 3.39g/t). Gold concentrate was produced from
   pre-production development material, thus resulting in low head grades.
 * EBITDA* in Q3 was at SEK -23.1m, below our estimate of SEK -15.6m.
 * *Figures not reported, derived from Q1-Q3 figures
 * Due to challenges with the tailings dewatering system and as a result a
   faster than anticipated use-up of working capital, as production and revenues
   were delayed, the operations at Friday were put under care and maintenance in
   August. The start-up will be dependent on securing the required financing.
 * Liquid assets amounted to SEK 12.0m at the end of the quarter.
 * The BoD of Endomines has resolved on a rights issue of SEK 281m, at a
   subscription price of SEK 2.50. The rights issue is covered by subscription
   undertakings and guarantee commitments up to SEK 168m. Dilution for existing
   shareholders choosing not to participate in the rights issue will be
   approximately 46 percent assuming full subscription.
 * Endomines has not given a production guidance for 2020.

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NEXT GAMES - A LOT TO EXPECT IN THE NEAR FUTURE

26.11.2020 - 00.15 | Company update

Next Games held its CMD on November 25th, releasing what in our view are very
ambitious financial targets. The CMD confirmed continued commitment to
publishing IP based games and a more sound and calculated approach to scaling
games. The revised guidance for 2020 brought some good news for profitability
expectations.

Read more

Ambitious mid-term financial targets
Next Games held its Capital Markets Day on November 25th. The most surprising
content was the mid-term (our interpretation 3-5 years) financial targets of
achieving annual revenue of EUR 250m and EBITDA and EBIT-margins of over 23% and
18% respectively. Given current financial performance we consider these targets
very ambitious. The Stranger Things -game is set to launch in selected markets
during the end of the year and Blade Runner Rogue during Q1/2021. Growth
expectations are clearly set on the former, while the latter is quite as
expected looking to be more of a niche game.

Guidance revised, positive news on profitability
Next Games also revised its guidance for 2020, now expecting revenue of EUR
26-28m and to be EBITDA positive. The revenue guidance is below our previous
estimate (EUR 30.7m) but the profitability expectation was a positive surprise.
We had assumed a slightly larger contribution of new games and also expect that
Our World is continuing to face challenges. We adjust our 2020 revenue and
EBITDA estimates to EUR 28m and EUR 1.1m respectively. We expect growth of 80%
in 2021 driven primarily by the Stranger Things -game but note that visibility
is extremely limited.

SELL with a target price of EUR 1.6 (1.2)
On our estimates Next Games trades at a clear discount to peers on 2021-2022
EV/sales multiples. Risks are however substantial, as 62% of our estimated 2021
revenue stems from not yet published games. On the positive profitability news
and increased confidence in a more careful and sustainable scaling approach we
raise our TP to EUR 1.6 (1.2), SELL-rating intact.

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FINNAIR - DIM LIGHT AT THE END OF THE TUNNEL

25.11.2020 - 09.25 | Company report

Aviation industry has faced the worse ever crisis in 2020 due to the COVID-19.
Finnair has been forced to scale down its traffic and the ramp-up is expected to
start next summer. We expect heavy losses in 20E but also in H1/21E. We keep our
rating “HOLD” with TP of EUR 0.60 (0.38).

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Strategy focuses on the traffic between Asia and Europe

Finnair’s strategy focuses on the growing traffic between Asia and Europe. The
strategy is based on the geographic location of the Helsinki hub: the shortest
route from (North-East) Asia to Europe goes over Helsinki. Additionally, the
distance between Helsinki and most Asian destinations is such that Finnair is
able serve most routes in 24h rotations, which enables high utilization rate of
planes and reduces the need for additional crew. The most direct route to Asia
is enabled by having Russian overflight rights. Flights through the Siberian
corridor from Asia to Europe via Helsinki save ca. 2h on flight time compared to
one-stop flights via European hubs and ca. 4h compared to routes via the Middle
East.

COVID-19 caused the worst ever crisis

The aviation industry faced the worst ever crisis in 2020 as the COVID-19
pandemic spread from China across the world in early 2020. Global lockdowns and
travel restrictions forced also Finnair to scale down its traffic. Finnair
estimates that the passenger numbers will recover in 2-3 years. The company
continues to operate with a significantly limited network also in Q1/21E and the
ramp-up is expected to start in the summer 2021. However, the visibility is
extremely weak not only due to the pandemic situation itself but due to
different travel restrictions. The company expects 20E revenue and capacity
(ASK) to decrease more than 70%.

“HOLD” with TP of EUR 0.60 (0.38)

We expect Finnair’s 20E ASK to decline by 72% y/y and revenue to decrease by 73%
y/y while comparable operating loss is expected to be EUR 602m. We expect
significant losses also during H1/21E. We expect air travel to recover
relatively well in 2022E but passenger numbers are still expected to remain
below 2019 levels. Due to Finnair’s targeted annual cost savings of EUR 140m
from 2022 onwards, we expect good profitability development after the crisis.
Finnair’s share price recently took off due to the optimistic vaccine news. The
news are promising but we note that there are no effective vaccines in the
global distribution yet. We retain “HOLD” with TP of EUR 0.60 (0.38).

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GOFORE - CONTINUED PROFITABLE GROWTH

16.11.2020 - 09.40 | Company report

Gofore has a proven track-record of profitable growth, having grown and seeking
to grow faster than its target market. Supported by M&A activity and high public
sector exposure, growth is in our view set to continue in the double-digits,
with margins not looking to be under any major threat. We adjust our target
price to EUR 12.1 (8.6) and retain our HOLD-rating.

Read more

Seeking above target market growth
Gofore is one of the fastest-growing yet profitable public IT-services companies
in Finland, seeking to profile itself more towards a digitalization consultancy
company. Gofore aims to grow faster than the target market, new digitalization
services, while at the same time seeking to generate an EBITA-margin of 15%.
Gofore has a solid track-record, having achieved a net sales CAGR of 47.5%
between 2014-2019, while adj. EBITA-margins have remained well in double-digit
figures. Relative organic growth has slowed down from recent peak years, but M&A
activity supports continued double-digit growth.

Continued good growth and profitability outlook
Aided by the acquisition of Qentinel Finland we expect Gofore to grow 14.5% in
2021. The uncertainty brought by the coronavirus pandemic poses some risks to
customer activity, but the high share of revenue from public sector clients has
so far mitigated a lot of the potential impact, as private sector demand has
during the year been more affected. Apart from a potential impact of the recent
increased share of subcontracting, we do not see significant risks to margins
going forward and expect a 13.8% average adj. EBITA-margin during 2020E-2022E,
slightly below the target 15%.

HOLD with a target price of EUR 12.1 (8.6)
We value Gofore at 17.5x 2021 adj. P/E (excludes goodwill amortization),
implying a 26% premium to our peer group and a 34% premium to the finnish peers.
We adjust our target price to EUR 12.1 (8.6) and retain our HOLD-rating.

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CIBUS NORDIC - LONG-TERM STRATEGY IS IN PLACE

13.11.2020 - 09.25 | Company update

Cibus’ Q3 was uneventful. We make small revisions to our estimates, our TP is
now SEK 165 (160), rating HOLD (BUY).

Read more

No major property acquisitions were completed in Q3

Cibus reported EUR 17.0m in Q3 rental income (vs our EUR 17.5m estimate) and EUR
16.6m in net rental income (vs our EUR 16.2m estimate). Operating income was EUR
14.9m and slightly lower than our EUR 15.3m estimate as Swedish management costs
were reclassified from property expenses to administration costs. The management
agreement with Sirius has been terminated and Q4 will be clean in terms of cost
structure. Q3 net financial costs were EUR 5.4m i.e. somewhat higher than our
EUR 5.0m estimate due to an EUR 0.6m cost attributable to bond and bank loan
fees. Cibus’ annual net rental income capacity was updated only a bit and we
revise our estimates accordingly.

The long-term strategy is proceeding as planned

Cibus’ organization is developing as planned and the company sees some potential
to generate more income from the existing asset base through additional services
like car washes and parking lots. Cibus continues to focus on the Finnish and
Swedish markets for now, however entry to other Nordic markets remains likely in
the long-term. Cibus also upped the annual acquisition target from EUR 50m to
EUR 50-100m. Q3 was quiet in terms of new acquisitions, yet Cibus remains well
on track on the deal front this year after acquiring some EUR 70m in Finnish
properties besides the more extraordinary EUR 180m Swedish market entry. Cibus
reports very little changes in the daily-goods property markets’ transaction
dynamics, with deal flow and valuations basically unchanged throughout the
pandemic.

We see current valuation landing within a fair spot

While Cibus still trades at an attractive yield relative to other Nordic public
properties we however see the shares’ upside potential limited by the
daily-goods property market’s flat valuations. In other words, further
meaningful Cibus yield compression would need to be backed by a pricing pick-up
in the private markets. Cibus is valued 1.12x EV/GAV and 1.35x P/NAV, hence
additional gains would stretch the valuation premium rather large. Considering
the relatively high 4.75% yield and the premium to book and private markets
valuations we view Cibus’ valuation now fair. Our TP is SEK 165 (160), rating
HOLD (BUY).

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CIBUS NORDIC - MARKETS REMAIN UNCHANGED

12.11.2020 - 09.30 | Earnings Flash

Cibus Nordic’s property portfolio continued to perform well in Q3 as net rental
income exceeded our estimate, however administration and financial costs were
higher than we expected.

Read more

 * Cibus’ Q3 rental income amounted to EUR 17.0m vs our EUR 17.5m estimate.
 * Net rental income was EUR 16.6m, compared to our EUR 16.2m expectation.
 * Operating income was EUR 14.9m vs our EUR 15.3m estimate since administration
   expenses were clearly higher than we expected.
 * Net operating income stood at EUR 9.5m, while we estimated EUR 10.3m.
   Financial expenses were some EUR 0.4m higher than we expected.
 * Annual net rental income capacity is now EUR 65.6m (previously EUR 65.1m).
 * The portfolio was valued at EUR 1,143m, translating to an EPRA NAV of EUR
   11.8 (11.8) per share.
 * Net LTV ratio stood at 61.3% (60.5%).
 * Occupancy rate was 95.7% (95.2%).
 * WAULT remained at 5.4 years at the end of Q3.

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TALENOM - CMD NOTES

12.11.2020 - 08.15 | Company update

Talenom’s CMD provided an all-around update with limited new information given
the announcements in Q3. The core business continues to perform well, and
further automation of the accounting production line is sought, while domestic
growth is increasingly driven by acquisitions.

Read more

Largely business as usual
Talenom held its Capital Markets Day on November 11th. Having already announced
the new small customer concept and potential plans to expand in Europe in
conjunction with the Q3 report the CMD in our view offered rather limited new
information, mainly adding some more details to the aforementioned matters.
Focus is being set on further increasing the degree of automation in the
accounting production line, with a target of over 90% in 2023, currently
slightly over 70%. The performance of the core business remains solid and
customer acquisition is holding up quite well given the circumstances. Talenom
is domestically clearly adding emphasis on inorganic growth, with the
digitalization challenges faced by small accounting firms providing
opportunities for acquisitions.

New growth avenues with the long-term in mind
Talenom gave some insight into its approach for a potential expansion in Europe
and has clearly given it some serious thought. The plans are clearly intended
for continued growth in the long-term and any notable revenue during 2021-2022
would most likely be due to acquisitions in a similar manner to the Swedish
market entry. The TiliJaska small customer concept is expected to leave beta and
add on bank services in Finland during February-March 2021 and enter beta in
Sweden in mid-2021. The interest for the system has to our understanding so far
clearly exceeded expectations.

HOLD with a target price of EUR 10.2
We have not made revisions to our estimates based on the CMD. We expect 2020
revenue and EBIT of EUR 65.5m and 13.1m respectively (co’s guidance EUR 64-68m
and EUR 12-14m respectively). We retain our HOLD-rating and target price of EUR
10.2.

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PIHLAJALINNA - PRIVATE DEMAND LAGS BEHIND

05.11.2020 - 09.45 | Company update

Pihlajalinna’s Q3 result was in line with our expectations. Revenue increased by
1% y/y to EUR 124m. Adj. EBIT was EUR 8.7m. Guidance for 20E was not given due
to the uncertainties caused by the pandemic. We keep our rating “HOLD” with TP
of EUR 9.5 intact.

Read more

Result in line with our expectations

Pihlajalinna’s Q3 result was in line with our expectations. Revenue increased by
1% y/y to EUR 123.9m vs. EUR 125.0m/122.2m Evli/cons. Revenue was boosted by the
COVID-19 testing which increased revenue by EUR 3.4m. The recovery of the
private demand has been weaker than what we anticipated. Among private
customers, the demand for private clinic services declined by 6% and for dental
care services by 8%. The fitness centers have lost ~6000 member customers due to
the coronavirus restrictions. Adj. EBITDA was EUR 17.2m vs EUR 17.3m/16.0m
Evli/cons and adj. EBIT totaled EUR 8.7m vs. EUR 8.4m/7.2m Evli/cons.

Private demand hampered by the prolonging virus situation

Even though the pent-up demand has started to release, the private demand is
still lagging behind. We expect the demand to continue to normalize during the
final quarter, but the prolonging pandemic situation is still likely to have a
negative impact on demand. Especially the outlook of fitness centers remains
weaker due to the restrictions. At the same time, the COVID-19 testing has grown
significantly which should benefit Pihlajalinna in the future as well. The
company is targeting to strengthen its occupational healthcare services and has
started negotiations for the purchase of all shares in Työterveys Virta. The
transaction would give Pihlajalinna almost 30% share of the occupational
healthcare market in the Oulu region and it would be strategically very
important for the company.

“HOLD” with TP of EUR 9.5 intact

The FCCA has proposed the market court to prohibit the merger between Mehiläinen
and Pihlajalinna. The tender offer will run until 20th of Nov. We have therefore
returned to see Pihlajalinna as an independent service provider also in the
future. We have slightly decreased our estimates and expect 20E revenue of EUR
507m (-2.3% y/y) and adj. EBIT of EUR 18.9m. On our estimates, the company
trades at 20E-21E EV/EBITDA multiple of 7.9x and 6.4x, which translates into
17-23% discount compared the peers. We keep our rating “HOLD” and TP of EUR 9.5.

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MARIMEKKO - FIGHTS VICTORIOUSLY AGAINST THE VIRUS

05.11.2020 - 08.35 | Company update

Marimekko’s Q3 result outpaced the expectations as net sales increased by 10%
y/y despite of the challenging times. Adj. EBIT increased by ~35% y/y and
totaled EUR 10.5m. We have slightly increased our 20E-22E estimates and keep our
rating “BUY” with TP of EUR 43 (42).

Read more

Strong growth in Q3

Marimekko delivered extremely strong Q3 result despite of the challenging times.
Net sales were EUR 38.0m (+10% y/y) vs. EUR 36.0m/35.3m Evli/cons. Sales growth
was driven by good development in wholesale sales in Finland and EMEA. In
Finland, wholesale sales included nonrecurring promotional deliveries. Also,
retail sales included unrecognized sales from Q2 (EUR ~1m). Further, online
sales continued to perform well. Marimekko’s Q3 adj. EBIT totaled EUR 10.5m vs.
EUR 9.1m/8.4m Evli/cons. Profitability was boosted by good sales growth and
decreased fixed costs. Fixed costs were also reduced by subsidies granted in
various countries to mitigate the negative business impacts of the COVID-19.

Fighting against the pandemic

Fashion industry has been suffering from the COVID-19 but so far Marimekko has
survived relatively well in the turbulence. The company benefits of having
different product lines as the growth in home decor products has been strong in
Q3 (+44% y/y) which has compensated the drop in sales in fashion and bags &
accessories. The final quarter is important for Marimekko as several sales
campaigns take place during the quarter. We expect fairly good development in
Finland as currently the household consumption is more focused on domestic
purchases. However, sales are dependent on the pandemic situation and the trend
in customer numbers in retail stores. International sales are also heavily
impacted by the development of the pandemic.

“BUY” with TP of EUR 43 (42)

Marimekko expects 20E net sales to be lower than in the previous year. Adj. EBIT
is expected to be approx. at the same level or lower than in 2019. We have made
small adjustments to our estimates after the result and expect 20E sales of EUR
121m (-3.5% y/y). We expect adj. EBIT to be in line with last year (EUR 17.3m).
In 21E, we expect revenue growth of ~8% y/y and profitability to further
improve. On our estimates, the company trades at 20E-21E EV/EBIT multiple of
18.4x and 15.9x which is a clear discount compared to the luxury peers. We keep
our rating “BUY” with TP of EUR 43 (42).

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PIHLAJALINNA - Q3 IN LINE WITH OUR EXPECTATIONS

04.11.2020 - 08.55 | Earnings Flash

Pihlajalinna’s Q3 result was broadly in line with our expectations. Q3 revenue
amounted to EUR 123.9m vs. EUR 125m/122.2m Evli/cons, while adj. EBIT landed at
EUR 8.7m vs. EUR 8.4m/7.2m Evli/cons estimates. EPS was EUR 0.20 vs. our EUR
0.20.

Read more

 * Q3 revenue was EUR 123.9m vs. EUR 125.0m/122.2m Evli/cons estimates. Revenue
   increased by 1.0% y/y.
 * Q3 adj. EBITDA was EUR 17.2m (13.9% margin) vs. EUR 17.3m/16.0m Evli/cons
   estimates.
 * Q3 adj. EBIT was EUR 8.7m (7.0% margin) vs. EUR 8.4m/7.2m Evli/cons
   estimates.
 * According the company, the demand for healthcare services recovered but the
   pandemic and restrictions reduced customer flows the most in fitness centers,
   private clinics and dental clinics. Revenue from corporate customers
   increased by 9.4% and revenue from the public sector was stable.
 * The volume of COVID-19 testing began to grow significantly in August and
   testing operations grew Q3 revenue by EUR 3.4m.
 * The company didn’t provide a guidance for 20E at this point, due to the weak
   visibility caused by the virus.

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MARIMEKKO - Q3 RESULT OUTPACED EXPECTATIONS

04.11.2020 - 08.45 | Earnings Flash

Marimekko’s Q3 result outpaced the expectations. Net sales were EUR 38.0m (10%
y/y) vs. EUR 36.0m/35.3m Evli/cons. Adj. EBIT was EUR 10.5m vs. EUR 9.1m/8.4m
Evli/cons. Marimekko expects 20E net sales to be lower than in the previous year
and comparable operating profit is estimated to be approx. at the same level or
lower than in the previous year.

Read more

 * Finland: revenue was EUR 23.0m vs. EUR 21.7m Evli view. Revenue increased by
   17% y/y. Revenue was boosted by increased wholesale sales. The increase in
   wholesale sales was partly due to nonrecurring promotional deliveries.
 * International: revenue increased by 2% y/y and was EUR 15.0m vs. EUR 14.3m
   Evli view. Wholesale sales developed well also in EMEA.
 * Q3 adj. EBIT was EUR 10.5m (27.7% margin) vs. EUR 9.1m/8.4m (25.3%/23.8%
   margin) Evli/cons. Profitability was boosted by increased sales and decreased
   fixed costs. Fixed costs were also reduced by subsidies granted in various
   countries to mitigate the negative business impacts of the coronavirus
   pandemic. On the other hand, relative sales margin declined.
 * Q3 EPS was EUR 0.98 vs. EUR 0.86/0.81 Evli/cons.
 * 2020E guidance: group net sales are expected to be lower than in the previous
   year and comparable operating profit is estimated to be approx. at the same
   level or lower than in the previous year.

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EXEL COMPOSITES - LONG-TERM STORY ON TRACK

02.11.2020 - 09.15 | Company update

Exel Composites’ Q3 results were overall quite neutral relative to expectations,
however we are now more confident top line will continue to grow going forward.
Our new TP is EUR 7.25 (6.25) while we retain our BUY rating.

Read more

Overall outlook appears strong despite the pandemic

Exel’s EUR 26m Q3 revenue grew by 10% y/y and so topped the flat estimates. The
Wind power customer industry supports high volumes and grew by 37% y/y after
growing 52% in Q2. We now expect a 27% y/y increase for Q4. Defense is also
developing well, and there’s plenty of long-term potential (now only some 5% of
LTM revenue). Cable core rods remain one high potential application in the
long-term, although the Buildings and infrastructure customer industry continued
to develop soft for now due to the pandemic (which also undermined
Transportation demand). Exel progressed in areas outside Europe as Asia-Pacific
grew by 58% y/y, driven by Wind power.

We are now more confident towards next year

Although top line was strong, Exel had pandemic-related issues in Q3 which
affected bottom line and so the company was unable to reach similarly high
profitability as in Q2 (which was close to long-term targets). The 7.8% EBIT
margin was thus soft relative to our 9.5% estimate. We expect the Q3 US
operational efficiency hiccup to pass. Demand has developed positive since Q2
and based on Exel’s comments we are now more confident revenue continues to grow
in Q4 and next year alike. The Austrian investment is proceeding as planned and
Exel is also ready to readdress its capacity for different end-markets with
small capex. We see Exel has good handle on long-term customer account
management, arguably the single most important consideration given the business
model and strategy.

We see some more upside even with cautious multiples

The share has appreciated a lot lately, now close to the pre-pandemic highs. The
strong Q2 profitability development, driven especially by the US unit, and good
volumes justify higher multiples for their part. On the other hand, the growing
pandemic uncertainty limits multiple potential even if outlook is still
positive. Our new EUR 7.25 (6.25) TP values Exel roughly within the 7-8x
EV/EBITDA and 11-13x EV/EBIT ranges on our estimates for FY ’20 and ’21. We
retain our BUY rating.

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PIHLAJALINNA - EXPECTING SLIGHT REVENUE GROWTH IN Q3

30.10.2020 - 09.45 | Preview

Pihlajalinna reports its Q3 result on next Wednesday, 4th of November. As the
coronavirus situation is prolonging, we have slightly cut our estimates. We keep
our rating “HOLD” with TP of EUR 9.5 (11.0) ahead of the result.

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Expecting revenue growth of 1.8% y/y in Q3E

The coronavirus situation eased in the beginning of the summer but in the late
summer the infection waves started to increase again, and the situation has
gotten worse during the autumn. Therefore, we have slightly cut our estimates.
We expect that the pent-up demand has continued to release during Q3 but on the
other hand people have spent more time at home and in summer houses which might
have an impact on demand. We expect Q3E revenue to grow by 1.8% y/y to EUR
125.0m (prev. estimate of EUR 127.5m) and adj. EBIT of EUR 8.4m (prev. estimate
of EUR 9.9m).

Returned to see Pihlajalinna as an independent company

The Finnish Competition and Consumer Authority (FCCA) has proposed the market
court to prohibit the merger between Mehiläinen and Pihlajalinna. According to
the FCCA, the merger would significantly impede effective competition in the
Finnish health services market as there would be only two nationwide healthcare
companies (Mehiläinen and Terveystalo) in the market post-merger. Thus, we see
that the likelihood of the acquisition being completed has decreased
significantly and therefore we have returned to see Pihlajalinna as an
independent service provider also in the future. We also note that the political
uncertainties in Finland have increased.

“HOLD” with TP of EUR 9.5 (11.0)

We have cut our 20E-21E revenue expectation by ~1% and our adj. EBIT expectation
by ~10-11%. We expect 20E revenue to decline by 1.2% y/y (EUR 512m) and adj.
EBIT of EUR 19.8m. On our estimates, the company trades at 20E-21E EV/EBIT
multiple of 20.3x and 13.2x, which translates into 1-20% discount compared to
the peers. We keep our rating “HOLD” with TP of EUR 9.5 (11.0) ahead of the Q3
result.

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EXEL COMPOSITES - DECENT RESULTS

30.10.2020 - 09.30 | Earnings Flash

Exel Composites’ Q3 top line exceeded expectations while operating margin
remained at a good level and absolute profitability increased y/y.

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 * Exel Composites’ Q3 revenue was EUR 26.0m (up 10% y/y) vs the EUR 24.1m/23.4m
   Evli/consensus estimates.
 * Wind power recorded EUR 7.8m in revenue, compared to our EUR 6.5m estimate.
   Asia-Pacific developed strong, where Q3 revenue increased to EUR 6.8m from
   EUR 4.3m.
 * Adjusted EBIT amounted to EUR 2.0m, in comparison to the EUR 2.3m/2.0m
   Evli/consensus estimates. Adjusted operating margin was thus 7.8% vs our 9.5%
   estimate. According to Exel profitability was negatively impacted by the
   uneven distribution of revenues across business units, and together with the
   pandemic production efficiency and profitability were impaired especially in
   the US business unit.
 * Q3 order intake declined by 10% to EUR 24.5m mainly due to a partial
   cancellation of a large order in the US booked in Q1. Exel nevertheless says
   underlying demand across all customer industries has slightly improved
   recently.
 * Exel reinstates FY ’20 guidance and expects revenue to increase or to remain
   at previous year’s level, while adjusted operating profit is set to increase.
   In our view the guidance is rather unsurprising.

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ETTEPLAN - SHROUD OF UNCERTAINTY

30.10.2020 - 08.45 | Company update

Etteplan posted better than expected profitability figures in the challenging
circumstances. The uncertainty due to the second wave of the pandemic is causing
an increasing lack of visibility. The outlook at least for the first half of
2021 does not appear favourable but we continue to expect growth aided by the
recent acquisition.

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Earnings beat in challenging quarter
Etteplan posted good profitability figures in the seasonally slower quarter and
challenging environment. EBIT amounted to EUR 4.3m, beating expectations (EUR
2.9m/3.1m Evli/cons.). Revenue declined 10.3% y/y (organic decrease 13.3%) to
EUR 55.2m (EUR 55.6m/55.3m Evli/cons.). Etteplan also updated its guidance,
expecting revenue for the year 2020 to decrease slightly or be at the same level
as in the previous year and operating profit (EBIT) to decrease clearly compared
to 2019. Demand uncertainty continued and the second wave brought further
uncertainty especially after the summer holidays.

Uncertainty on the rise with the second wave
The increased uncertainty brought by the second wave reduces the already low
visibility going into 2021. Etteplan has so far fared well given the
circumstances, having adopted substantial cost savings measures. Compared with
Q2, lockdowns and restrictions are not affecting customer industries to the same
extent, but customers are still cautious in making investment decisions. We
assume the demand uncertainty to continue to impact on activity at least during
the first half of the year. We still expect recovery compared with 2020 and
supported by the Tegeman acquisition expect a 6.5% growth in 2021. We expect
margins to remain at 2020e levels.

HOLD with a target price of EUR 9.3
Peers’ multiples have been under pressure with the second wave uncertainty and
governments seeking to increase restrictions and the fwd. 12m median EV/EBITDA
for the selected peer group has dropped by some 9% in the past few days to 8.3x,
while Etteplan trades at 7.6x. With the uncertainty possibly still on the rise
we retain our HOLD-rating and target price of EUR 9.3.

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TOKMANNI - CHRISTMAS IS ALMOST HERE

30.10.2020 - 08.40 | Company update

Tokmanni delivered relatively good Q3 result. Revenue growth of 13% y/y outpaced
our and the consensus estimates but adj. EBIT (EUR 24.0m) fell short of
expectations due to decline in gross margin. We have made only small adjustments
into our estimates and keep our rating ”BUY” with TP of EUR 18.4.

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Strong growth in revenue but decrease in adj. gross margin

Tokmanni’s Q3 revenue outpaced the expectations but adj. EBIT was below our and
consensus estimates. Revenue grew by ~13% y/y, amounting to EUR 262m (vs. EUR
253m/255m Evli/cons). Growth was good especially in sales of yard and garden
furniture, sports and leisure, detergents and home cleaning, paper products and
groceries. Apparel sales have faced headwind due to the coronavirus and the
company decided to boost apparel sales with discount sales in Q3. This impacted
negatively on adj. gross margin which was 34.0% (35.4% in Q3’19). Tokmanni’s Q3
adj. EBIT totaled EUR 24.0m vs. EUR 25.8m/27.3m Evli/cons. Adj. EBIT was weighed
down by weakened gross margin but on the other hand, strong revenue growth and
strict cost control had a positive impact on profitability.

Towards the most important quarter

Tokmanni has benefited from the uncertain times as low prices and broad product
assortment attract consumers. Despite of the current situation, customer numbers
have increased in stores (LFL, Jan-Sep’20: +2.8%) and at the same time the size
of average basket has increased (LFL, Jan-Sep’20: +8.7%). During Q3, Tokmanni’s
online sales increased by ~155%, though the share of online sales is still
marginal (~1% of revenue). We expect the growth in online sales to continue
during Q4E, driven by the campaign season. The final quarter is the most
important for Tokmanni in terms of both, revenue and profitability. In retail,
the Christmas season has started earlier than normally this year and Tokmanni is
also well prepared for the upcoming season as the Christmas products have
arrived and some of those are already in stores.

“BUY” with TP of EUR 18.4 intact

Tokmanni expects strong growth in revenue and LFL revenue in 20E. Adj. EBIT
margin is expected to improve from ‘19. We have made only small adjustments into
our estimates. We expect 20E revenue to grow by 11% y/y (EUR 1046m) and adj.
EBIT of EUR 89m. On our estimates, the company trades at 20E-21E EV/EBIT
multiple of 13.0x and 12.4x which translates into ~30% discount compared to the
int. discount peers. We keep our rating “BUY” with TP of EUR 18.4.

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ASPO - UPSIDE STILL MORE LIKELY

30.10.2020 - 08.25 | Company update

Aspo’s earnings beat estimates, and even if the guidance doesn’t hint at a
particularly rapid q/q Q4 EBIT recovery in our view profitability has already
bottomed out. We retain our EUR 7.25 TP and BUY rating.

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Telko delivered another earnings surprise in a row

Aspo’s EUR 3.6m Q3 EBIT clearly beat the EUR 1.7m/1.1m Evli/cons estimates. The
surprise was largely due to Telko, which extended its Q2 performance by posting
a similar EUR 4.2m in EBIT. Yet Telko’s market outlook remains cautious and
Aspo’s new guidance in our view manages expectations slightly downwards. The
results nevertheless do showcase sound long-term potential. ESL fell to red as
expected and Leipurin’s profitability remained subdued. In terms of Q4 results
it should be noted that demand for ESL’s larger vessels began to improve in late
Q3. We see the implication of the earnings beat and Aspo’s specified guidance to
be that Q3 marks out the low point in Aspo’s profitability, however the q/q dip
was relatively small and thus Q4 results are unlikely to recover as sharply q/q
as we estimated before.

We now see H2 EBIT EUR 1.2m higher than before

With respect to Q4 EBIT we revise our estimates down for ESL (from EUR 2.8m to
EUR 1.7m) and Leipurin (from EUR 0.9m to EUR 0.5m) while we now expect Telko to
reach EUR 2.8m (prev. EUR 2.3m). In our view Aspo’s guidance seems a bit
conservative considering Telko’s recent development (that is unless we are
overestimating the q/q profitability recovery rates for ESL and Leipurin).
Although the pandemic continues to worsen some more, this spring’s initial shock
is now history and supply chains are better prepared. In this sense we see it
highly plausible that Aspo’s segments, essentially industrial logistics services
providers, can show some meaningful improvement next year as well.

A lot of uncertainty remains but we view upside more likely

We still see Aspo’s valuation attractive in terms of SOTP, however we note
especially ESL’s valuation is hard in such extraordinary times when dry bulk
carriers are off their normal earnings levels. Aspo’s segments still have plenty
to go before reaching their long-term financial targets, but we have grown more
confident that this year marks the bottoming out for Aspo’s overall
profitability. We thus view upside scenarios more likely than downside ones. We
retain our EUR 7.25 TP and BUY rating.

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CAPMAN - RAMPING UP RECURRING REVENUE

30.10.2020 - 08.15 | Company update

CapMan’s Q3 was slightly below expectations but still overall neutral. Newly
raised capital pushed AUM to ATH levels and the outlook for fee-based growth is
favourable. Although market uncertainty is on the rise, with the dividend story
intact we retain our BUY-rating and TP of EUR 2.2.

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Slightly below expectations, AUM at all-time high
CapMan’s Q3 results came in slightly below expectations, with turnover of EUR
8.9m (EUR 9.6m/9.9m Evli/cons.) and EBIT of EUR 4.5m (EUR 5.0m Evli/cons.). The
report in our view was all in all rather neutral. Low transaction-based fee
volumes still caused weakness in the Services business while the Management
Company business saw a boost from recent fundraising projects, albeit not quite
as much as we had anticipated. AUM grew to an all-time high mainly through the
first closing of the NRE III fund, having raised EUR 313m, with the target of
EUR 500m still seen to be reached in the not too distant future. No major
carried interest was received, and fair value changes were as expected.

Outlook for fee-based growth still favourable
CapMan’s recurring turnover continued to grow but at a slower pace. With the
newly raised funds and on-going fundraising as well as the overall relatively
new AUM the outlook for accelerating growth again is promising. The new CapMan
Wealth Services model was also launched recently, aiming to further boost
fee-based growth. The clear weakness currently continues to be the
transaction-based fees, where volumes have declined due to the pandemic and with
the recent increased uncertainty the near-term continues to look challenging.
Realization of carried interest is still looking more distant and we no longer
expect significant carry in 2020.

BUY with a target price of EUR 2.2
The market uncertainty is causing some stir to the near-term development and
justifying upside potential in relation to current valuation seems more
challenging, but the dividend yield and healthy financial position continue to
speak for CapMan. We retain our BUY-rating and target price of EUR 2.2.

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RAUTE - EXTENDED UNCERTAINTY FOR NOW

30.10.2020 - 08.00 | Company update

Raute’s Q3 results didn’t meet our estimates as the pandemic continued to
interfere with business more than we expected. Our new TP is EUR 18 (20), rating
still HOLD.

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The pandemic continued to hurt top line and order intake

Raute reported EUR 27.9m in Q3 revenue, down by 17% y/y and up 14% q/q, missing
our EUR 34.0m estimate. The 4.8% operating margin also fell short of our 6.2%
estimate. Although revenue grew q/q order intake nevertheless continued to
slide, and the EUR 11m Q3 figure missed our EUR 21m estimate largely because
project orders touched a low of EUR 2m, whereas we expected some recovery to EUR
10m. Services orders, at EUR 9m, were also lower than our EUR 11m estimate.

We revise our estimates slightly down

We still wait for signs of acceleration in smaller equipment as well as
relatively large-sized modernization orders (the latter are recognized under
services). Europe was digesting investments in new production capacity already
before the pandemic, and right now it’s quite unclear when actual orders might
begin to pick up again. Russia remains an important market and Raute describes
local demand still active, however uncertainty continues to plague decision
making there as well. It’s still early to talk much about China, although the
market seems to be maturing and thus developing favorably from Raute’s point of
view. The market is a big opportunity for Raute, however in our opinion the
prospect should be valued cautiously. We revise our top line estimate for FY ’21
down to EUR 132m from EUR 139m and EBIT estimate down to EUR 6.0m from EUR 6.6m.

It seems profitability is unlikely to be high next year either

Raute’s competitive positioning remains intact and earnings are bound to gain
significantly in the coming years from this year’s low point. However, next
year’s profitability outlook still appears quite modest and hence earnings
multiples seem to be on the high side of the acceptable range. In our view
Raute’s valuation is now full unless there’s imminent recovery in smaller
equipment orders and services. Such a pick-up in orders could happen quickly but
we are cautious towards this prospect as uncertainty currently shows no signs of
fading. Raute is trading at 6.8x EV/EBITDA and 11.4x EV/EBIT on our updated
estimates for next year. Our TP is now EUR 18 (20), rating still HOLD.

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SOLTEQ - STEADY AS SHE GOES

30.10.2020 - 07.45 | Company update

Solteq reported clearly better profitability figures than we had expected, with
comp. EBIT of EUR 1.4m (Evli 0.7m). We expect the good traction to show also in
2021 but remain slightly cautious on growth figures given the uncertainty. We
adjust our TP to EUR 1.90 (1.65), BUY-rating intact.

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Our profitability estimates clearly beat
Solteq reported Q3 results that were clearly better than we had expected.
Revenue grew 8.5% in comparable terms to EUR 13.3m (Evli 13.0m) and the
comparable operating profit to EUR 1.4m (Evli 0.7m). Profitability was better
than expected in both segments. The pandemic has had some effect on sales but
has not impacted the group’s performance as a whole so far. Solteq Software is
clearly gaining traction with the order backlog that has been building up, with
particular success in gaining new projects in the utilities-sector and positive
development is seen during the rest of the year. Solteq Digital has seen
continued good demand in core areas the outlook remains rather stable.

Solteq Software gaining traction
The good development in profitability, brought by previously taken measures and
sales growth, is showing a positive effect on the company’s cash generation
despite the interest expense burden and product development investments. We do
not expect Solteq to go completely unscathed through the pandemic and have
clearly lower growth expectations for Solteq Digital in 2021 while the good
order intake and the build-up of recurring revenue from long-term contracts will
support growth in Solteq Software. We also maintain margin estimates for 2021 at
similar levels as in 2020 for now given the uncertainty but see potential for
improvement in Solteq Software as the share of own products increases. On group
level we estimate growth of 3.7% and an EBIT-margin of 8.8% in 2021.

BUY with a target price of EUR 1.90 (1.65)
Current valuation implies a 2020e EV/EBITDA of 6.4x. Even when comparing solely
with the Nordic IT-service peers, valuation still appears attractive. We retain
our BUY-rating and raise our target price to EUR 1.90 (1.65) following our
revised estimates.

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SRV - PROGRESS BEING MADE

30.10.2020 - 07.15 | Company update

SRV’s Q3 results were fairly neutral and most importantly construction
profitability was rather good. Supported by construction cost declines, the
target of improving the 2021 operative operating profit to 2017 levels appears
feasible. We retain our BUY-rating, TP EUR 0.64 (0.66).

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Decent results, construction margins held up
SRV reported somewhat two-fold Q3 results. Revenue was below our expectations
(EUR 223.6m/234.0m Evli/cons.) despite more developer-contracted housing units
being recognized as income than we had expected. Operating profit was below
expectations at EUR 1.7m (EUR 2.9m/3.0m Evli/cons.) while the operative
operating profit amounted to EUR 7.1m (Evli EUR 2.9m), with the cancellation of
a EUR 3.1m provision for expenses that were recognized due to a ruling by a
Russian court impacting positively. Relative profitability in the Construction
segment held up well and corresponded to our expectations.

Margin improvement supported by cost decline
Visibility is somewhat weakened going into 2021. The housing prices recovered
well from the dip in H1/20 and activity has been at healthy levels. The order
backlog has been relatively stable in the past four quarters and with the
current project portfolio we see potential for minor growth in 2021, expecting a
slight sales decline in business construction and growth in housing
construction. The sales development is currently however clearly of secondary
importance as improvement in profitability to offset the interest expense burden
is essential. We expect margins to improve in 2021, as margins in 2020 have been
pressed by high construction costs and the situation should ease going forward.

BUY with a target price of EUR 0.64 (0.66)
The uncertainty has particularly affected the shopping centres in Russia and
exits continue to appear more distant. The construction outlook remains
relatively decent, although demand within certain business construction areas is
being affected by the pandemic. We adjust our target price to EUR 0.64 (0.66)
with our BUY-rating intact.

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ETTEPLAN - GOOD RESULTS GIVEN THE CIRCUMSTANCES

29.10.2020 - 13.25 | Earnings Flash

Etteplan's net sales in Q3 amounted to EUR 55.2m, in line with our estimates and
consensus (EUR 55.6m/55.3m Evli/cons.). EBIT amounted to EUR 4.3m, above our and
consensus estimates (EUR 2.9m/3.1m Evli/cons.). Guidance updated: revenue in
2020 is expected to decrease slightly or be at the same level as in 2019 and
EBIT to decrease clearly compared to 2019.

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 * Net sales in Q3 were EUR 55.2m (EUR 61.5m in Q3/19), in line with our and
   consensus estimates (EUR 55.6m/55.3m Evli/Cons.). Revenue declined 10.3% y/y
   in Q3, organic decrease 13.3%.
 * EBIT in Q3 amounted to EUR 4.3m (EUR 5.7m in Q3/19), above our and consensus
   estimates (EUR 2.9m/3.1m Evli/cons.), at a margin of 7.7%.
 * EPS in Q3 amounted to EUR 0.13 (EUR 0.19 in Q3/19), above our and consensus
   estimates (EUR 0.08/0.10 Evli/cons.).
 * Engineering Solutions net sales in Q3 were EUR 31.0m vs. EUR 30.7m Evli.
   EBITA in Q3 amounted to EUR 2.8m vs. EUR 2.1m Evli. The MSI-% in Q3 was 58%
   compared to 59% in Q3/19.
 * Software and Embedded Solutions net sales in Q3 were EUR 13.8m vs. EUR 14.5m
   Evli. EBITA in Q3 amounted to EUR 1.4m vs. EUR 1.2m Evli. The MSI-% in Q3 was
   52% compared to 55% in Q3/19.
 * Technical Documentation Solutions net sales in Q3 were EUR 10.2m vs. EUR
   10.3m Evli. EBITA in Q3 amounted to EUR 1.0m vs. EUR 0.7m Evli. The MSI-% in
   Q3 was 80% compared to 78% in Q3/19.
 * Guidance updated: Revenue for the full year 2020 will decrease slightly or be
   at the same level as in the previous year, operating profit (EBIT) will
   decrease clearly compared to 2019.

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ASPO - Q3 EBIT CLEARLY ABOVE EXPECTATIONS

29.10.2020 - 10.30 | Earnings Flash

Aspo’s Q3 EBIT meaningfully topped expectations as Telko continued to perform
strong.

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 * Aspo Q3 revenue was EUR 118.4m vs the EUR 117.7m/122.3m Evli/consensus
   estimates.
 * Aspo Q3 EBIT stood at EUR 3.6m, compared to the EUR 1.7m/1.1m Evli/consensus
   estimates. The expectations implied quite steep q/q EBIT drop for Q3, and now
   we see the overall H2 development will be rather flat.
 * ESL Q3 top line amounted to EUR 31.6m, compared to our EUR 33.8m estimate.
   EBIT was EUR -0.1m while we expected EUR -0.2m.
 * Telko revenue was EUR 62.5m vs our EUR 56.8m estimate. Meanwhile EBIT
   amounted to EUR 4.2m vs our 2.3m estimate. The continued strong performance
   (of which a lot are due to internal measures) looks promising, however there
   are still many macro uncertainties.
 * Leipurin posted EUR 24.3m in Q3 revenue, while we expected EUR 27.2m. EBIT
   was EUR 0.3m, compared to our EUR 0.7m estimate.
 * Other operations cost EUR 0.8m vs our EUR 1.1m estimate.
 * Aspo specifies guidance to the new range of EUR 14-16m for FY ’20, compared
   to the earlier EUR 12-16m range.

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FINNAIR - NAVIGATING THROUGH THE STORM

29.10.2020 - 09.35 | Company update

The third quarter wasn’t any better for Finnair and was heavily impacted by
strict travel restrictions. Revenue declined by 89% y/y and was EUR 97m while
adj. EBIT was EUR -167m. We have further cut our estimates and keep our rating
“HOLD” and TP of EUR 0.38 intact.

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Strict travel restrictions hampered Finnair’s operations

As expected, Finnair’s Q3 result was heavily weighed down by the coronavirus
pandemic and the strict travel restrictions especially in Finland. Therefore,
the company had to deviate from the previous plans and to continue to operate
with a limited network. Capacity (ASK) was down by 87% compared to last year and
PLF was 38.7% (-47.5pp). Revenue decreased by ~89% y/y, amounting to EUR 97m vs.
EUR 157m/145m Evli/cons. Adj. EBIT was EUR -167m vs. EUR -191m/-179m Evli/cons.
By the end of the quarter, Finnair had paid out over EUR 400m of COVID-19
related refunds (some EUR 40m left).

Winter season is expected to remain dark

Due to the prolonged pandemic situation and strict travel restrictions it is
likely that the better recovery of air travel isn’t starting anytime soon.
Finnair continues to fly with a limited network during the winter season. The
company informed earlier that it is aiming to fly approx. 75 daily flights to
~50 destinations during the winter season (~350 flights per day in ‘19). The
ramp-up is estimated to start from summer’21. According to the company,
comparable operating loss in Q4 will be of a similar magnitude than in Q2 and
Q3. The company also expects both, revenue and capacity (ASK) to decrease more
than 70% in 2020 compared to 2019. Further, the company raised its savings
target to EUR 140m (prev. EUR 100m) starting from the beginning of 2022
(compared to 2019).

“HOLD” with TP of EUR 0.38

Finnair has a fully undrawn EUR 175m revolving credit facility and a EUR 200m
short-term commercial paper program, which was unused at the end of September.
In addition, the remaining part of the statutory pension premium loan (EUR 200m)
can be drawn if needed. We have cut our 20E-21E estimates and expect revenue in
20E to decline by 73% y/y to EUR 850m and adj. EBIT of EUR -606m. We keep our
rating “HOLD” with TP of EUR 0.38.

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RAUTE - Q3 REMAINED VERY QUIET

29.10.2020 - 09.30 | Earnings Flash

Raute’s Q3 proved slower than we estimated as both recognized revenue and order
intake fell short of our expectations.

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 * Raute Q3 revenue was EUR 27.9m (down by 17 % y/y), compared to our EUR 34.0m
   estimate. The figure was EUR 18.1m for project deliveries (compared to our
   EUR 21.0m expectation) and EUR 9.8m for technology services (vs our EUR 13.0m
   estimate).
 * EBIT amounted to EUR 1.3m vs our EUR 2.1m estimate.
 * Q3 order intake was EUR 11m, while we expected EUR 21m. Raute booked EUR 2m
   in project deliveries vs our EUR 10m estimate. Meanwhile the figure for
   technology services was EUR 9m, compared to our EUR 11m expectation.
 * Order book stood at EUR 62m (compared to EUR 109m a year ago).

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SRV - RESULTS NEITHER GOOD NOR BAD

29.10.2020 - 09.10 | Earnings Flash

SRV's net sales in Q3 amounted to EUR 209.9m, below our and consensus estimates
(EUR 223.6m/234.0m Evli/cons.). EBIT amounted to EUR 1.7m, below our and
consensus estimates (EUR 2.9m/3.0m Evli/cons.).

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 * Revenue in Q3 was EUR 209.9m (EUR 227.1m in Q3/19), below our estimates and
   consensus estimates (EUR 223.6m/234.0m Evli/Cons.). Growth in Q3 amounted to
   -7.6% y/y.
 * Operating profit in Q3 amounted to EUR 1.7m (EUR -7.0m in Q3/19), below our
   estimates and consensus estimates (EUR 2.9m/3.0m Evli/cons.), at a margin of
   0.8%. The operative operating profit clearly beat our estimates at EUR 7.1m
   (Evli EUR 2.9m). The operating profit was positively affected by the
   cancellation of a EUR 3.1m provision for expenses that were recognized due to
   a ruling by a Russian court as well as lower rents from shopping centres due
   to the pandemic.
 * EPS in Q3 amounted to EUR -0.01, in line with our estimates and consensus
   estimates (EUR -0.01 Evli/cons.).
 * Construction: Revenue in Q3 was EUR 209.1m vs. EUR 222.9m Evli. Operating
   profit in Q3 amounted to EUR 5.2m vs. EUR 5.4m Evli.
 * Investments: Revenue in Q3 was EUR 1.1m vs. EUR 1.2m Evli. Operating profit
   in Q3 amounted to EUR -3.8m vs. EUR -1.5m Evli.
 * Other operations and elim.: Revenue in Q3 was EUR -0.3m vs. EUR -0.5m Evli.
   Operating profit in Q3 amounted to EUR 0.3m vs. EUR -1.0m Evli.
 * The order backlog amounted to EUR 1,280m, down 19.6% y/y. Order intake in Q3
   was EUR 154.4m, 25% more than in the comparison period.

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TOKMANNI - STRONG REVENUE GROWTH IN Q3

29.10.2020 - 09.05 | Earnings Flash

Tokmanni’s Q3 revenue increased by ~13% y/y (LFL growth of 11.6%) and was EUR
262m vs. EUR 253m/255m Evli/cons. Tokmanni’s adj. EBIT was EUR 24.0m vs. EUR
25.8m/27.3m Evli/cons. Adj. gross margin was 34.0%. The company expects strong
growth in revenue and LFL revenue in 20E. Comparable EBIT margin is expected to
improve on the previous year.

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 * Q3 revenue growth outpaced the expectations as revenue increased by 13% y/y
   and was EUR 262m vs. our EUR 253m and consensus of EUR 255m. LFL growth was
   11.6%. Growth was good especially in sales of yard and garden furniture,
   sports and leisure, detergents and home cleaning, paper products and
   groceries. Online sales grew by ~155%.
 * Q3 adj. gross profit was EUR 89.0m (34.0% margin) vs. EUR 89.3m (35.3%) Evli
   expectation. Gross margin was impacted by discount sales and different sales
   structure.
 * Q3 adj. EBITDA was EUR 40.3m vs. EUR 41.9m our view.
 * Q3 adj. EBIT was EUR 24.0m (9.2% margin) vs. EUR 25.8m (10.2%) our
   expectation and EUR 27.3m (10.7%) consensus. Strong growth in revenue and
   strict cost control had a positive impact on adj. EBIT despite of the
   decrease in gross margin.
 * Q3 eps was EUR 0.29 vs EUR 0.32/0.33 Evli/consensus.
 * Guidance for 20E: strong growth in revenue and like-for-like revenue.
   Profitability (comparable EBIT margin) is expected to improve on the previous
   year.

Open report


CAPMAN - SLIGHTLY BELOW EXPECTATIONS

29.10.2020 - 08.50 | Earnings Flash

CapMan's turnover in Q3 amounted to EUR 8.9m, below our and consensus estimates
(EUR 9.6m/9.9m Evli/cons.). Profitability was slightly below expectations and
EBIT amounted to EUR 4.5m, (EUR 5.0m Evli/cons.).

Read more

 * Turnover in Q3 was EUR 8.9m (EUR 9.7m in Q3/19), below our estimates and
   consensus estimates (EUR 9.6m/9.9m Evli/Cons.). Growth in Q3 amounted to
   -8.4% y/y.
 * Operating profit in Q3 amounted to EUR 4.5m (EUR 5.5m in Q3/19), slightly
   below our estimates and consensus estimates (EUR 5.0m Evli/cons.).
 * EPS in Q3 amounted to EUR 0.02 (EUR 0.03 in Q3/19), below our estimates and
   consensus estimates (EUR 0.03 Evli/cons.).
 * Management Company business revenue in Q3 was EUR 7.0m vs. EUR 7.2m Evli.
   Operating profit in Q3 amounted to EUR 2.1m vs. EUR 2.6m Evli.
 * Investment business revenue in Q3 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q3 amounted to EUR 2.5m vs. EUR 2.1m Evli. Fair value changes
   amounted to EUR 2.6m (Evli EUR 2.5m)
 * Services business revenue in Q3 was EUR 1.8m vs. EUR 2.4m Evli. Operating
   profit in Q3 amounted to EUR 0.6m vs. EUR 1.1m Evli.
 * Capital under management by the end of Q3 was EUR 3.6bn (Q3/19: EUR 3.2bn).
   Real estate funds: EUR 2.2bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.3bn, and other funds: EUR 0.03bn.
 * CapMan’s NRE III fund held its first closing at EUR 313m. CapMan Growth II
   exceeded its target size, having raised EUR 88m to date.

Open report


SOLTEQ - CLEAR EARNINGS BEAT

29.10.2020 - 08.25 | Earnings Flash

Solteq’s revenue in Q3 grew 8.5% in comparable terms to EUR 13.3m (Evli EUR
13.0m). The comparable operating profit clearly beat our expectations at EUR
1.4m (Evli EUR 0.7m). Guidance reiterated: Solteq Group’s comparable operating
profit in 2020 is expected to grow significantly.

Read more

 * Net sales in Q3 were EUR 13.3m (EUR 13.0m in Q3/19), slightly above our
   estimates (Evli EUR 13.0m). Growth in Q3 amounted to 2.3% y/y. Comparable
   growth, adjusted for the divestment of the SAP ERP business, amounted to
   8.5%. Comparable growth was attributable to both segments. Approximately a
   fifth of sales came from outside Finland.
 * The operating profit and comparable operating profit in Q3 amounted to EUR
   1.4m (EUR 0.3m/0.0m in Q3/19), clearly above our estimates (Evli EUR 0.7m).
   Capitalized product development investments during 1-9/2020 amounted to EUR
   2.3m. Solteq expects product development investments in 2020 to amount to
   less than EUR 3.0m (2019: EUR 3.9m).
 * Solteq Digital: Comparable revenue in Q3 amounted to EUR 9.2m (Q3/19: EUR
   9.3m) vs. Evli 9.2m. The comp. EBIT was EUR 0.8m (Q3/19: EUR 0.2m) vs. Evli
   EUR 0.5m.
 * Solteq Software: Revenue in Q3 amounted to EUR 4.1m (Q3/19: EUR 3.7m) vs.
   Evli EUR 3.8m. The comp. EBIT was EUR 0.5m (Q3/19: EUR 0.1m) vs. Evli EUR
   0.2m.
 * Guidance reiterated: the comparable operating profit in 2020 is expected to
   grow significantly.
 * The pandemic has slightly affected sales in several business areas and the
   Nordic subsidiaries but the good order backlog, the capability to deliver,
   and success in the Utilies sector drove growth and has so far not affected
   the group’s performance as a whole.

Open report


CONSTI - OUTLOOK ALL IN ALL STILL FAVOURABLE

29.10.2020 - 07.30 | Company update

Consti reported Q3 results well in line with our estimates, with highlights
being the continued good profitability and free cash flow. Despite a slightly
weaker sentiment the outlook in our view still looks favourable but healthy
near-term order intake will be of essence for the next year.

Read more

Reported rather good figures, in line with our estimates
Consti reported Q3 results well in line with our estimates. Revenue amounted to
EUR 68.2m (Evli EUR 69.6m) and EBIT to EUR 2.5m (Evli 2.5m), at a pretty healthy
margin of 3.6%. Order intake amounted to EUR 31.0m and the order backlog as such
declined y/y and q/q to EUR 189.4m but still slightly above 2019 year-end
levels. The highlight of the report along with the good profitability was the
free cash flow, which amounted to EUR 4.6m (Q3/19: EUR -0.4m). With a rolling
12m cash conversion of 174% the net debt (excl. IFRS 16) continued to decline,
now at EUR 4.8m (Q3/19: EUR 19.6m).

Coming quarters order intake will steer next year
Management comments for Q4/20 were of a more careful tone given the escalated
Coronavirus situation post Q3 but solid performance is nonetheless still
expected. The near-term development really depends on demand recovery and order
intake development during the coming quarters. Based on the current order
backlog activity is seen to be higher next year compared to the same situation
in 2019. We have slightly lowered our Q4 estimates for a more conservative
approach given order intake uncertainty, now expecting 2020 revenue and EBIT of
EUR 268.1m and 8.0m respectively. In 2021 we for now expect only a meager growth
of 1.4% and EBIT of EUR 9.1m, with housing company demand recovery a potential
key near-term uncertainty up until the housing company General Meeting season
next spring.

BUY with a target price of EUR 10.0
Although sentiment appears slightly less positive the order backlog, Consti’s
ability to adapt to lower volumes, and the long-term sector outlook along with
an attractive valuation remain as beneficial factors. We retain our BUY-rating
and TP of EUR 10.0.

Open report


FINNAIR - RESULT HEAVILY IMPACTED BY THE PANDEMIC

28.10.2020 - 09.45 | Earnings Flash

The coronavirus pandemic and strict travel restrictions especially in Finland
continued to hamper Finnair’s result in Q3. Finnair’s Q3’20 adj. EBIT was EUR
-167m vs. our expectation of EUR -191m and consensus of EUR -179m. Revenue
decreased by 88.7% y/y and was EUR 97m vs. our expectation of EUR 157m and
consensus of EUR 145m.

Read more

 * Q3 revenue was below expectations at EUR 97m vs. EUR 157m/145m Evli/cons.
 * ASK decreased by ~87% y/y in Q3. PLF was 38.7% (-47.5 points). Strict travel
   restrictions especially in Finland had a negative impact on Finnair’s flight
   plans.
 * Q3 adj. EBIT was EUR -167m vs. EUR -191m/-179m Evli/cons. Q3 comparable
   EBITDA was EUR -82m vs. EUR -103m our view.
 * Absolute costs in Q3: Fuel costs were EUR 29m vs. EUR 55m our view. Staff
   costs were EUR 57m vs. EUR 53m our view. All other OPEX+D&A combined were EUR
   189m vs. EUR 250m our view.
 * Unit costs: CASK was 15.86 eurocents vs. 20.81 eurocents our view.
 * Q3 EPS was EUR -0.15 vs. EUR -0.12/-0.12 Evli/cons.
 * According to the company, comparable operating loss in Q4 will be of a
   similar magnitude as in Q2 and Q3.
 * The company expects that revenue and capacity (ASK) will both decrease more
   than 70% in 2020 compared to 2019.

Open report


VAISALA - UNCERTAINTIES IN W&E OUTLOOK

28.10.2020 - 09.35 | Company update

Vaisala delivered a two-fold Q3 result. Despite W&E’s strong profitability
improvement, sales and orders declined and COVID-19 continues to pose
significant near-term risks. IM business remains resilient. We keep our
estimates broadly unchanged and maintain TP of 32€ with SELL.

Read more

Sales mix boosted profitability, orders and sales decreased
Q3 net sales decreased by 11% to 94 MEUR mainly due to the decline in W&E’s
project business. Gross margin improved to 57.7% (55.3%) and EBIT to 19.5 MEUR
(16.3 MEUR), 20.7% (15.5%) of net sales. W&E’s EBIT improved to 11.1 MEUR (9.7
Evli) and IM’s was 8.6 MEUR (10.3 Evli) According to Vaisala, lower share of
less-profitable project business, improved profitability of digital services in
W&E and higher share of IM sales boosted margins. Operating expenses also
decreased compared to previous year due to less travelling and some
non-recurring positive impacts. Orders received decreased overall by 19% as
W&E’s order intake was impacted by COVID-19 especially in airports segment and
emerging markets. IM’s orders received increased 2% supported by strong order
intake in APAC (+19%).

Our estimates broadly unchanged
Vaisala reiterated its 2020 outlook issued last week, as expected, estimating
FY20 net sales to be 370-390 MEUR and EBIT to be 40-48 MEUR. Based on the
report, we keep our estimates broadly unchanged. We expect 20e sales to decline
5.3% to 382.1 MEUR and EBIT to increase to 46.7 MEUR. W&E outlook is weighed by
the weakened outlook for aviation and restrictions will cause delays in project
deliveries. Thus, we expect W&E 20e sales to decrease by 7.3% to 242.1 MEUR and
EBIT to decrease to 16.7 MEUR. We expect IM to remain relatively resilient with
20e sales down 1.7% to 140 MEUR and EBIT increasing to 30.1 MEUR. In 21e, we
expect IM sales to continue growing (+7%), while W&E is expected to recover only
slightly (+3%) due to uncertainties and decreased order intake.

Valuation still challenging
On our estimates, Vaisala is still trading at clear premiums compared to our
peer group and we see valuation stretched given the weaker financial performance
compared to peer group. Based on the report, we retain our TP of 32€ and SELL
rating. Our TP values Vaisala at 21-22e EV/EBIT multiples of 22.9x and 20.7x
which are above the peer group, reflecting Vaisala’s strong sustainability
profile, growing dividend, and especially IM’s highly profitable growth with
possibility of further add-on acquisitions.



Open report


CONSTI - IN LINE WITH OUR ESTIMATES

28.10.2020 - 09.15 | Earnings Flash

Consti's net sales in Q3 declined 16.7% to EUR 68.2m, in line with our estimates
and slightly below consensus (EUR 69.6m/72.1m Evli/cons.). EBIT amounted to EUR
2.5m, in line with our estimates and slightly below consensus (EUR 2.5m/2.7m
Evli/cons.). Free cash flow at EUR 4.6m (Q3/19: EUR -0.4m).

Read more

 * Net sales in Q3 were EUR 68.2m (EUR 81.8m in Q3/19), in line with our
   estimates and slightly below consensus (EUR 69.6m/72.1m Evli/Cons.). Sales
   declined -16.7 % y/y.
 * Operating profit in Q3 amounted to EUR 2.5m (EUR 2.1m in Q3/19), in line with
   our estimates and slightly below consensus (EUR 2.5m/2.7m Evli/cons.), at a
   margin of 3.6%.
 * EPS in Q3 amounted to EUR 0.21 (EUR 0.17 in Q2/19), in line with our
   estimates and below consensus (EUR 0.21/0.23 Evli/cons.).
 * The order backlog in Q2 was EUR 189.4m (EUR 206.4m in Q3/19), down by -8.2 %.
   Order intake EUR 31.0m in Q3 (Q3/19: EUR 37.0m).
 * Free cash flow improved to EUR 4.6m (Q3/19: EUR -0.4m) and 1-9/2020 cash flow
   amounted to a stellar 14.7m (1-9/19: EUR -1.1m).
 * The coronavirus pandemic has impacted through the postponement of some
   projects and decreased demand in certain areas. Escalation of the coronavirus
   pandemic after the reporting period creates further uncertainty to the
   short-term outlook to the short-term demand outlook of renovations.
 * Guidance reiterated: The Company estimates that its operating result for 2020
   will improve compared to 2019. The coronavirus pandemic is negatively
   impacting on Consti’s sales, but performance is expected to remain solid also
   during Q4/2020.

Open report


SCANFIL - WELL-POSITIONED FOR THE WEATHER

28.10.2020 - 09.05 | Company update

Scanfil’s top line didn’t meet our estimate but profitability remained strong.
We retain our EUR 6.25 TP, rating BUY.

Read more

Some top line softness but in our view nothing dramatic

Scanfil posted EUR 141.6m in Q3 revenue, down 7% y/y. The figure didn’t meet our
EUR 156.2m estimate largely due to the Communication and Industrial segments.
Communication revenue fell by 28% q/q mostly as a result of low demand for
network elements. The segment also supplies other types of products and we
expect revenues to stabilize in Q4. Consumer Applications’ top line remained low
as expected, slightly up by q/q but down by 23% y/y. There are signs the
segment’s demand is bottoming out and we expect more improvement for Q4. Energy
& Automation and Medtec & Life Science performed close to expectations, but
Industrial managed only EUR 44.7m (vs our EUR 50.5m estimate) and was down by 9%
y/y. Industrial softness wasn’t attributable to any single customer and was
pronounced in July and August. Demand nevertheless improved in September. In
absolute profitability terms Scanfil’s EUR 9.9m Q3 adj. EBIT didn’t quite reach
our EUR 10.5m estimate, however the quarter still delivered a strong 7%
operating margin.

Guidance implies meaningful q/q improvement for Q4

The low-end of the updated FY ’20 guidance implies 5% q/q Q4 revenue increase,
while the high-end implies 19% growth. We make only small updates to our Q4
estimates, and now expect EUR 154m in Q4 revenue (prev. EUR 158m), down by 1%
y/y and up by 8% q/q. We now expect Q4 EBIT at EUR 10.0m (prev. EUR 11.1m).
Scanfil’s overall positioning within the value chain and relative to competition
remains unchanged. The company has a balance sheet ready to facilitate
acquisitions should a fitting opportunity arise. There’s a lot of uncertainty
but we note Scanfil’s customers tend to be well-positioned OEMs who compete
against each other directly only to a very limited extent.

Valuation is still very reasonable

Scanfil is valued at about 6.3x EV/EBITDA on our FY ’20 estimates. Scanfil’s
organic strategic growth target for ’23 implies some 5% CAGR for the coming
years. Although the target was decided on before the pandemic, we still view it
quite relevant considering the customer portfolio and performance so far this
year despite the uncertainty. Our TP remains EUR 6.25 and our rating BUY.

Open report


INNOFACTOR - EAGER TO SEE WHAT THE FUTURE HOLDS

28.10.2020 - 08.45 | Company update

Innofactor reported good results in the quarter expected to be most hit by
negative impact of the pandemic. The outlook for 2021 remains positive but we
have yet to see signs of the next clear steps of growth pick-up and margin
improvement. Valuation still remains attractive and we adjust our TP to EUR 1.45
(1.35) and retain our BUY-rating.

Read more

Good results in the by COVID-19 impact weakened quarter
Innofactor reported slightly better Q3 results than we had expected in the due
to the coronavirus pandemic more challenging quarter. Net sales grew 0.3% y/y to
EUR 14.0m (Evli 13.8m), with the negative impacts of the pandemic lowering sales
per employee by 1.6%. EBITDA amounted to EUR 1.6m (Evli EUR 1.3m), with slightly
negative figures in the other Nordic countries due to lower sales. The negative
impacts of the pandemic were in line with company expectations. Weaker demand
has mainly been seen among commercial customers. The order backlog amounted to
EUR 58.2m, up 9.4% y/y.

Awaiting signs of faster growth and earnings improvement
Innofactor expects net sales and EBITDA in 2020 to increase from 2019, with our
estimates now at EUR 65.5m (2019: EUR 64.2m) and EUR 7.7m (2019: EUR 5.1m)
respectively, with the latter estimate up slightly post Q3 following better than
expected relative profitability. The outlook for 2021 remains positive but we
still expect only a modest growth of 4.0% and minor EBITDA-% improvement (11.7%
->12.0%). Challenges continue to relate mainly to performance in the other
Nordic countries and any notable signs of improvement are yet to be seen. M&A
activity continues to appear likely in the coming years, with the company
committed to its 20% annual growth and 20% EBITDA-% target, but it is too early
to account for such.

BUY with a target price of EUR 1.45 (1.35)
On peer multiples Innofactor continues to trade at a clear discount. We also
expect Innofactor to initiate dividend payments in 2020. Non-cash items (mainly
PPA) affecting earnings will still keep dividend yields rather low (2020e:
2.3%). We raise our TP to EUR 1.45 (1.35) and retain our BUY-rating.

Open report


SUOMINEN - EARNINGS MULTIPLES REMAIN CAUTIOUS

28.10.2020 - 08.35 | Company update

Suominen again topped expectations. We update our estimates, our TP is now EUR
6.0 (5.5) and rating still BUY.

Read more

Another extension to a steep upward profitability trend

Suominen recorded EUR 115.4m in Q3 revenue, up by 12% y/y and down by 6% q/q,
meeting our EUR 114.0m estimate. FX had a negative EUR 5.6m impact. Europe
remained very strong (up by 17% y/y), and at EUR 43.5m topped our EUR 41.0m
estimate. Americas grew by 9% y/y and at EUR 71.9m was close to our EUR 73.0m
estimate. Suominen delivered high volumes and margins despite maintenance
breaks, which will also take place in Q4. While the results were near our
estimates in terms of top line, margins were again a positive surprise. Suominen
achieved a 17.1% gross margin, gaining more on the 16.0% in Q2 and clearly
higher than our 15% estimate. Low raw materials prices in general continue to
exert pressure on nonwovens pricing, however the pricing clauses work with a lag
and Suominen was also able to defend its pricing to some extent. Suominen has
been very successfully achieving production cost efficiencies and says the
variable cost optimization program continued to yield results on all sites. The
company managed strong with SGA, R&D and other expenses as well since the total
item was only EUR 6.8m, compared to our EUR 7.3m estimate. Suominen’s EUR 12.9m
Q3 EBIT thus clearly beat our EUR 9.8m estimate.

We expect Q4 earnings to decline by some EUR 4m q/q

Although the company continues to perform strong not only due to a favorable
environment but also thanks to in-house measures, we expect results to decline
q/q in Q4. We now expect Q4 gross margin at 15% and continue to see some further
pressure down next year. Raw materials prices have remained low for quite some
time and hence are unlikely to support additional boost in profitability. On the
positive side wipes demand should remain high for an extended time period.

Multiples attractive despite margin pressure going forward

Suominen is now valued ca. 5.5x EV/EBITDA on our estimates for this year. Going
forward, we see additional earnings gain hard next year. In our opinion somewhat
low earnings multiples are warranted given the extraordinary environment, but we
nevertheless continue to view the overall valuation picture attractive. Our TP
is now EUR 6.0 (5.5) and rating remains BUY.

Open report


DETECTION TECHNOLOGY - LOOKING PAST THE AIR TURBULENCE

28.10.2020 - 08.25 | Company update

Detection Technology’s Q3 report was below expectations as SBU continues to
struggle under the pandemic. Despite low visibility and the uncertainty related
to aviation, we see security market weakness as temporary and do not see DT’s
competitive position, strategy or longer-term drivers compromised. Therefore, we
see DT well positioned to perform again once security market normalizes. Despite
our estimates cut, we maintain our target price of 22 euros and HOLD rating.

Read more

Clear miss due to worse than expected SBU performance

DT’s Q3 result missed our and consensus expectations as SBU continued to
struggle due to the ongoing pandemic, which is postponing investments in
security market, especially airports. DT’s Q3 net sales were EUR 20.6m (-23.4%
y/y) vs. EUR 24m/23.5m Evli/consensus estimates. SBU sales declined -43% to EUR
10.6m (EUR 13.5m our expectation) due to COVID-19 affecting the demand for
security X-ray devices. MBU sales increased +20% to EUR 10.1m (EUR 10.5m our
expectation) due to continued strong demand in medical CT imaging. DT’s Q3 EBIT
came in at EUR 2.6m (12,6% margin) vs. our estimates of EUR 4m (EUR 3.4m cons).

 DT cautiously optimistic that worse is behind it

The COVID-19 pandemic is negatively affecting the demand for X-ray devices in
all DT’s target markets, apart from medical CT imaging. Apart from domestic air
transport in China, global air transport has failed to recover, which has led to
exceptionally low demand in aviation. In addition, extensive restrictions on
mass gatherings has negatively affected demand in security applications. DT
expects SBU sales to decrease in Q4, but to start improving in H1/21 driven by
Chinese demand. DT expects MBU sales to grow in Q4 and to continue to grow in Q1
of 2021, albeit more slowly than in 2020.

 Maintain HOLD with target price 22 euros

Based on the report, we have cut our sales and EBIT estimates for the coming
years. On our renewed lowered estimates, DT is now trading at premiums to our
peer group, but we note that there is high uncertainty in our estimates and
multiples can quickly change when security market recovery starts. It’s
difficult to estimate how long the challenging situation regarding aviation will
continue and at what point SBU will start recovering. We do not however see DT’s
competitive position, strategy or longer-term drivers compromised, and therefore
DT should be well positioned to perform again once security market normalizes.
Until we see some signs of security market stabilizing, we remain cautious. We
maintain our target price of 22 euros and HOLD rating.

Open report


VAISALA - STRONG PROFITABILITY IN BOTH SEGMENTS

27.10.2020 - 14.30 | Earnings Flash

Vaisala’s Q3 did not provide bigger surprises as the company updated its
business look for 2020 and published preliminary Q3 net sales and EBIT figures
last week. Vaisala’s Q3 net sales decreased by 11% to 94.0 MEUR. Q3 reported
EBIT was 19.5 MEUR.

Read more

 * Group level results: Q3 net sales decreased by 11% to 94.0 MEUR.
 * Gross margin was 57.7% vs. 55.3% last year.
 * Orders received were 85.3 MEUR vs. 105.1 MEUR last year. Orders received
   decreased by 19% due to weakened order intake especially in W&E’s airports
   markets and emerging markets. Order book was 134.6 MEUR vs. 154.4 MEUR in
   Q3’19.
 * Weather & Environment (W&E) net sales decreased by 14% to 59.2 MEUR vs. 59.9
   MEUR our expectation. W&E EBIT was 11.1 MEUR (9.7 MEUR Evli). W&E’s orders
   received decreased by 29% and was impacted by decreased order intake mainly
   from MEA and Latin America.
 * Industrial Measurements (IM) net sales declined 3% to 34.8 MEUR vs. 34.5 MEUR
   our expectation. IM EBIT was 8.6 MEUR (10.3 MEUR Evli). Industrial
   Measurements’ order intake growth was 2% and orders received grew by 19% in
   APAC, while order intake in EMEA and Americas decreased partially offsetting
   increase in APAC.
 * Business outlook for 2020 maintained: Vaisala estimates its full-year 2020
   net sales to be in the range of EUR 370–390 million and operating result
   (EBIT) to be in the range of EUR 40–48 million (updated on October 21st).

Open report


SUOMINEN - ANOTHER EXCEPTIONAL QUARTER

27.10.2020 - 10.00 | Earnings Flash

Suominen’s Q3 figures continued to defy our expectations as marginal
profitability increased further q/q despite being already exceptionally high in
Q2.

Read more

 * Suominen Q3 revenue amounted to EUR 115.4m (up 12% y/y), compared to our EUR
   114.0m expectation.
 * Europe top line was EUR 43.5m while we estimated EUR 41.0m. Americas posted
   EUR 71.9m, compared to our EUR 73.0m estimate.
 * Gross profit amounted to EUR 19.7m vs our EUR 17.1m estimate. Gross margin
   was therefore 17.1% vs our 15.0% expectation. In our view the additional
   improvement in gross margin (which amounted to 16.0% in Q2’20) indicates
   Suominen was able to defend its nonwovens pricing in a favorable
   supply-demand environment, despite low raw materials prices. Suominen hinted
   at such an opportunity during its CMD, and our view proved too conservative
   in this respect.
 * Suominen Q3 EBIT was EUR 12.9m, compared to our EUR 9.8m estimate. The beat
   was mostly due to the higher gross margin and resulting gross profit, however
   Suominen was also somewhat more efficient in terms of SG&A.

Open report


INNOFACTOR - FARED WELL IN CHALLENGING QUARTER

27.10.2020 - 09.30 | Earnings Flash

Innofactor’s Q3 results were slightly above our expectations and figures were
fairly good given the expected COVID-19 related weakness in the quarter. The net
sales amounted to EUR 14.0m (Evli EUR 13.8m), while EBITDA amounted to EUR 1.6m
(Evli EUR 1.3m). Guidance remains intact. The impact of the pandemic on Q3 was
in line with company expectations.

Read more

 * Net sales in Q3 amounted to EUR 14.0m (EUR 14.0m in Q3/19), slightly above
   our estimates (Evli EUR 13.8m). Net sales in Q3 grew 0.3% y/y. Net sales grew
   in Finland but declined in the other Nordic countries.
 * EBITDA in Q3 was EUR 1.6m (EUR 1.5m in Q3/19), above our estimates (Evli EUR
   1.3m), at a margin of 11.1%. EBITDA was clearly positive in Finland and
   somewhat negative in the other countries due to smaller than expected net
   sales due to the coronavirus pandemic.
 * Operating profit in Q3 amounted to EUR 0.4m (EUR 0.3m in Q2/19), above our
   estimates (Evli EUR 0.2m), at a margin of 2.8%.
 * Order backlog at EUR 58.2m, up 9.4% y/y. Innofactor received several
   significant orders during the quarter and the order backlog improved q/q.
 * Guidance intact: Innofactor’s net sales and EBITDA in 2020 are estimated to
   increase compared to 2019.
 * The impact of the coronavirus pandemic on the third quarter was in line with
   company expectations. On a monthly level August was weaker than anticipated
   but September instead better than expected and the trend is expected to
   strengthen during the end of the year.
 * Innofactor updated its strategy during Q3, with no major changes being made.
   The updated dividend policy was confirmed, and financial targets remain the
   same.

Open report


DETECTION TECHNOLOGY - RESULT MISS, BUT SOME LIGHT IN END OF TUNNEL

27.10.2020 - 09.25 | Earnings Flash

DT’s Q3 result clearly missed our and consensus expectations due to worse than
expected performance in SBU. DT’s Q3 net sales were EUR 20.6m (-23.4% y/y) vs.
EUR 24m/23.5m Evli/consensus estimates. SBU sales declined -43% to EUR 10.6m
(EUR 13.5m our expectation) and MBU sales increased +20% to EUR 10.1m (EUR 10.5m
our expectation). DT’s Q3 EBIT came in at EUR 2.6m vs. our estimates of EUR 4m
(EUR 3.4m cons). On the positive, DT says it is cautiously optimistic that the
worst may already be behind it.

Read more

 * Group level results: Q3 net sales amounted to EUR 20.6m (-23.4% y/y) vs. EUR
   24m/23.5m Evli/consensus estimates. Q3 EBIT was EUR 2.6m (12.6% margin) vs.
   EUR 4m/3.4m Evli/cons. R&D costs amounted to EUR 2.3m or 11% of net sales
   (Q3’19: 2.6m, 9.7%).
 * Security and Industrial Business Unit (SBU) had net sales of EUR 10.6m vs.
   EUR 13.5m Evli estimate. SBU sales declined -43% y/y, mainly due the COVID-19
   pandemic. SBU net sales are expected to decrease in Q4 y/y, but the company
   expects improvement in H1 of 2021.
 * Medical Business Unit (MBU) delivered net sales of EUR 10.1m which was
   broadly in line with our estimate of EUR 10.5m. Net sales of MBU increased by
   +20% y/y due continued strong demand in medical CT imaging. DT expects MBU
   sales to grow in Q4 and to continue to grow in Q1 of 2021, albeit more slowly
   than in 2020.
 * No change in medium-term targets; at least 10% net sales growth, EBIT margin
   at or above 15%.

Open report


SCANFIL - SOUND FIGURES

27.10.2020 - 08.40 | Earnings Flash

Scanfil reported Q3 revenue slightly on the soft side, however the overall
picture seems to remain pretty much unchanged with demand and profitability as
previously expected.

Read more

 * Scanfil Q3 revenue was EUR 141.6m vs the EUR 156.2m/147.6m Evli/consensus
   estimates. In our view the slight softness was due to Communication and
   Industrial segments.
 * Communication posted EUR 20.7m in revenue, compared to our EUR 27.8m
   estimate. The softness was due to lower demand for network elements.
 * Consumer Applications’ revenue was EUR 21.3m vs our EUR 20.9m estimate.
   Scanfil reports encouraging signs of demand picking up for the segment.
 * Energy & Automation revenue was EUR 28.9m while we expected EUR 30.4m. There
   was a lot of customer-specific sales variation.
 * Industrial recorded EUR 44.7m vs our EUR 50.5m expectation. July and August
   were slow, but demand improved in September.
 * Medtec & Life Science revenue amounted to EUR 26.1m, compared to our EUR
   26.6m estimate.
 * Scanfil Q3 EBIT stood at EUR 9.9m, compared to the EUR 10.5m/10.3m
   Evli/consensus estimates. Operating margin was thus 7.0% vs our 6.8%
   expectation.
 * Scanfil guides FY ’20 revenue to land in the EUR 590 – 610m range and EBIT
   EUR 38 – 40m. The estimate ranges were previously EUR 580 – 620m and EUR 38 –
   42m.

Open report


ETTEPLAN - WEAKER Q3 FIGURES EXPECTED

27.10.2020 - 08.30 | Preview

Etteplan reports Q3 results on October 29th. We expect weakish figures in the
seasonally slower quarter, as the impact on demand of the COVID-19 induced
uncertainty should also show clearly. We estimate a sales decline of 9.6% in the
quarter and an EBIT-margin of 5.3%. We adjust our target price to EUR 9.3 (8.7)
and retain our HOLD-rating.

Read more

Seasonal slowness and COVID-19 impact
Etteplan’s Q2 results were a clear positive in the challenging environment and
timely measures taken helped in keeping up profitability. The organic decline in
revenue was 11.3%. During Q3 the market environment overall saw improvement
compared with the restrictions during Q2 but with the third quarter being
seasonally slower and a trickle-down effect of the demand weakness in Q2 we
expect weakish figures. With the capacity reduction due to temporary layoffs to
our understanding somewhat similar to that of Q2 we expect a similar organic
revenue decline, expecting revenue of EUR 55.6m (Q3/19: EUR 61.5m). Despite good
cost control, we still expect the lower revenue to have an impact on
profitability and estimate an adj. EBIT of EUR 2.9m (Q3/19: EUR 4.9m), at a
margin of 5.3%.

2020E: sales decline 1.7% and EBIT of EUR 18.4m
Etteplan reissued a guidance in Q2, expecting 2020 revenue to decrease slightly
or be at 2019 levels and EBIT to decrease compared with 2019. We currently
estimate a sales decline of 1.7% in 2020 and EBIT of EUR 18.4m (2019: EUR
22.8m). The situation with the coronavirus pandemic has turned to the worse
again with the second wave and we will be keeping our eyes on comments on the
potential effect on demand development.

HOLD with a target price of EUR 9.3 (8.7)
We have made only minor tweaks to our estimates ahead of the Q3 results. With
the slightly improved sentiment after Q2 and peer multiple appreciation we
adjust our target price to EUR 9.3 (EUR 8.7), valuing Etteplan at 7.5x 2020
EV/EBITDA, and retain our HOLD-rating.

Open report


TALENOM - PREPARING NEW AVENUES FOR GROWTH

27.10.2020 - 08.00 | Company update

Talenom reported solid Q3 figures despite slight sales weakness. Attention was
drawn to the new small customer concept, with the for us surprising addition of
banking services. Although still in its infancy, the concept in our view appears
promising.

Read more

Solid profitability, slight COVID-19 sales weakness
Talenom reported solid Q3 results. Revenue was slightly weaker than expected, at
EUR 14.8m (Evli/cons. EUR 15.3m/15.2m), as the pandemic has a slight impact on
transaction volumes. Cost control however aided profitability and the EBIT of
EUR 3.1m beat expectations (Evli/cons. EUR 2.6m/2.8m). The financial figures
were clearly of lesser interest in the earnings report as focus lied on the new
small customer concept.

Seeking to cater previously underserved customer segment
Talenom launched a new small customer concept, the TiliJaska service, a free
accounting system, as well as Talenom Light Entrepreneur, designed for the
smallest, previously by Talenom underserved customers. Costs for the system
arise with usage after a certain threshold. The product is intended to broaden
the service offering and attracting growing enterprises to Talenom’s bookkeeping
services but also to be a profitable product in itself. The product will be in
beta until the end of the year and is also planned to be launched next year in
Sweden. A potentially very interesting and unexpected new angle was the addition
of banking services. In our view the service, or essentially the idea of in the
long-run potentially creating a much broader service platform, view has clear
potential. Talenom also mentioned that it is looking into other markets in
Europe, but we see it as too early to make any assumptions regarding such
expansion.

HOLD with a TP of EUR 10.2 (8.5)
Talenom’s valuation continues to be stretched but with the interesting new sales
growth potential and more light to be shed on the new services in the upcoming
Capital Markets Day (November 11th), we can justify to stay along for the ride.
We adjust our TP to EUR 10.2 (8.5), valuing Talenom at a 2020 P/E of 45x, and
retain our HOLD-rating.

Open report


TALENOM - SOLID PROFITABILITY FIGURES ONCE AGAIN

26.10.2020 - 14.00 | Earnings Flash

Talenom's net sales grew 10.0% in Q3 to EUR 14.8m, slightly below our and
consensus estimates (EUR 15.3/15.2m Evli/cons.). EBIT amounted to EUR 3.1m,
above our and consensus estimates (EUR 2.6m/2.8m Evli/cons.). Guidance remains
intact, net sales for 2020 are expected to amount to EUR 64-68m and operating
profit to EUR 12-14m.

Read more

 * Net sales in Q3 amounted to EUR 14.8m (EUR 13.5m in Q3/19), slightly below
   our and consensus estimates (EUR 15.3m/15.2m Evli/Cons.). Growth in Q3
   amounted to 10.0% y/y.
 * Operating profit in Q3 amounted to EUR 3.1m (EUR 2.4m in Q3/19), above our
   and consensus estimates (EUR 2.6m/2.8m Evli/cons.), at a margin of 21.2%.
 * EPS in Q3 amounted to EUR 0.05 (EUR 0.04 in Q3/19), in line with our and
   consensus estimates (EUR 0.04/0.05 Evli/cons.).
 * Net sales growth was slightly weakened by the impact of the pandemic on
   transactional volumes, but cost adjustments aided profitability.
 * Talenom launched its new small customer concept, TiliJaska, aimed to be
   launched also next year in Sweden. Talenom also launched the Talenom Light
   Entrepreneur service, a service platform catering the needs for customers
   ranging from part-time light entrepreneurs to listed companies.
 * Talenom clarified its long-term vision, seeking to broaden its offering to an
   increasing extent also towards banking services, supported by digital
   transformation and legislative changes.
 * Guidance intact: Net sales for 2020 are expected to amount to EUR 64-68m and
   operating profit to EUR 12-14m.

Open report


VERKKOKAUPPA.COM - TOWARDS THE IMPORTANT CAMPAIGN SEASON

26.10.2020 - 09.40 | Company update

Once again, Verkkokauppa.com delivered a strong result as revenue increased by
~7% y/y (EUR 129m) while adj. EBIT totaled EUR 5.6m. We have slightly increased
our estimates and keep our rating “BUY” with TP of EUR 6.5 (6.3).

Read more

Revenue increased by 7% y/y

Verkkokauppa.com’s good momentum continued throughout Q3, driven by strong
consumer web sales. Growth was particularly good in mid-sized and evolving
categories (MDA, BBQ, sports as well as office & supplies). Revenue increased by
~7% y/y amounting to EUR 129m (vs. our EUR 126m). Gross margin developed
favorably as well due to the sales mix, strong consumer sales as well as lower
level of wholesale sales but also due to operational improvements. The company’s
adj. EBIT was EUR 5.6m (vs. our 5.3m) in Q3.

The current environment supports further growth

Online migration has continued strong throughout the year partly due to the
COVID-19 and as the virus situation seems to be prolonging, we expect the same
trend to continue. Even though the company is known for its strong presence in
the consumer electronics market in Finland, the growth has been strong in other
product categories as well boosting the company’s sales and profitability
development. This also benefits the company’s growth in the future since the
consumer electronics market is extremely competed and price driven. The final
quarter is normally the most important for Verkkokauppa.com and it is driven by
campaigns (e.g. Cyber Monday and Black Friday) and the Christmas season. We
expect the good momentum to continue also in Q4E. Due to the travel
restrictions, wholesale sales should remain in a lower level also in Q4E, having
a positive impact on margins.

“BUY” with TP of EUR 6.5 (6.3)

We have slightly increased our estimates and expect 20E revenue of EUR 546m and
adj. EBIT of EUR 20.4m. Hence, our estimates are at the higher end of the given
guidance (revenue between EUR 525-550m and adj. EBIT between EUR 17-21m). On our
estimates the company trades at 20E-21E EV/EBIT multiple of 10.7x and 11.0x,
which translates into ~50% discount compared to the peers. We keep our rating
“BUY” with TP of EUR 6.5 (6.3).

Open report


FELLOW FINANCE - OBSTACLES TO OVERCOME

23.10.2020 - 09.15 | Company report

Fellow Finance is a highly scalable international marketplace lending platform.
Recent challenges due to increased competition, adverse regulatory decisions and
the Coronavirus pandemic caused a setback to the company’s solid growth and
profitability track and is now on a slightly challenging turnaround undertaking.

Read more

Good track record, challenging year behind...
Fellow Finance is an international marketplace lending platform connecting
investors and lenders and facilitates both consumer and business lending.
Operations have in the past years been expanded abroad, with operations now in
six countries. The company has been able to achieve a good track record on
growth and profitability but has since the latter half of 2019 been met with
challenges due to regulation, increased competition and volume declines due to
the Coronavirus pandemic. As a result of a decline in facilitated loan volumes
sales have decreased and profitability has suffered.

... but long-term potential remains
The business environment still remains challenging in the near-term, especially
with the temporary cap on interest rates on certain consumer credit. Potential
for disruptive growth in the addressable market and the scalability of the
platform still continues to offer ample opportunities in the long-term but with
the challenges being faced there is still work to be done. With the improving
investor demand after a dip in volumes due to the pandemic we expect the
negative sales trend to be reversed and profitability to improve as a result in
2021.

HOLD with a target price of EUR 2.8 (2.5)
We base our valuation on peer multiples and derive a fair value of EUR 2.78
using a 2021 P/sales multiple of 1.3x, at a discount to the consumer finance
companies given differences and faced challenges and above the somewhat
chronically underperforming lending platform peers. We adjust our target price
to EUR 2.8 (2.5) and retain our HOLD-rating.

Open report


DETECTION TECHNOLOGY - LOOKING FOR SIGNS OF RECOVERY

23.10.2020 - 08.42 | Preview

Detection Technology will report Q3 earnings next Tuesday, October 27th, at 9:00
EET. As usual, we look forward to hearing the latest developments and outlook
regarding the security and medical imaging markets. We maintain our target price
of 22 euros ahead of the report, our recommendation is HOLD (prev. BUY).

Read more

Expecting declining sales, but a better quarter than last

We expect Q3 net sales of 24 MEUR (23,5 MEUR cons) and EBIT of 4 MEUR (3,4 MEUR
cons), meaning a decline of around -11% and -20% respectively compared to last
year. Despite decline, we expect Q3 to be clearly better than Q2. The reason
behind net sales decline is the lower demand in SBU due to the COVID-19 pandemic
affecting the demand for security X-ray devices, especially in aviation segment.
We expect SBU net sales to decline -27% to 13,5 MEUR. MBU is compensating for
the decline in SBU, as demand for medical CT imaging is currently strong due to
the pandemic. We expect MBU net sales to grow 26% on slightly weak comparison
figures to 10,5 MEUR. We expect DT’s Q3 EBIT to be 4 MEUR (17% EBIT margin),
which is -20% lower y/y (high comparison figure), but clearly better than in Q2
(2,6 MEUR).

 Looking for signs of recovery in SBU amidst low visibility

DT has stated that it expects lower demand in the security segment to continue
in Q3 and SBU sales to decrease in 2020. DT however sees SBU sales starting to
improve towards end of the year. DT estimated in its Q2 report that airport CT
standard equipment upgrades in Europe and U.S. will be postponed at least 12
months. Regarding China, it remains unclear when similar Chinese airport
standardization will start and if any security infrastructure related government
recovery measures will take place. MBU sales growth is expected to continue in
H2 driven by the demand in CT applications.

 Situation regarding aviation main uncertainty

The situation regarding aviation remains the biggest near-term uncertainty for
DT as SBU represents roughly 2/3 of net sales and we’ve estimated aviation to
contribute roughly half of SBU net sales. We have not made any changes to our
estimates, thus we maintain our target price of 22 euros ahead of the report,
our recommendation is HOLD (prev. BUY).

Open report


VERKKOKAUPPA.COM - Q3 RESULT IN LINE WITH EXPECTATIONS

23.10.2020 - 08.35 | Earnings Flash

Verkkokauppa.com’s Q3’20 revenue grew by 7.3% y/y and was EUR 129m vs. Evli EUR
126m and consensus of EUR 127m. Adj. EBIT was EUR 5.6m vs. EUR 5.3m/5.3m
Evli/cons. 2020 guidance: the company expects revenue to be 525-550 million
euros and comparable operating profit to be 17-21 million euros.

Read more

 * Q3 revenue was EUR 129m (7.3% y/y) vs. EUR 126m Evli view and EUR 127m
   consensus. Growth was good especially in mid-sized and evolving categories.
 * Q3 gross profit was EUR 20.9m (16.2% margin) vs. EUR 20.7m (16.4% margin)
   Evli view.
 * Q3 adj. EBIT was EUR 5.6m (4.3% margin) vs. EUR 5.3m (4.2% margin) Evli view
   and EUR 5.3m (4.2% margin) consensus.
 * Q3 eps was EUR 0.09 vs. EUR 0.09/0.09 Evli/cons.
 * 2020 guidance: the company expects revenue of EUR 525-550m and comparable
   operating profit of EUR 17-21m.
 * The company also decided on a quarterly dividend of EUR 0.055 per share.

Open report


VAISALA - Q3 EBIT CLEARLY BETTER THAN EXPECTED

22.10.2020 - 09.30 | Company update

Vaisala updated yesterday its business outlook for 2020 and published
preliminary net sales and operating result for Q3. With the better than expected
profitability development, we raise our TP to 32€ (29), but due to continued
share price rally our rating is now SELL (HOLD).

Read more

Sales expected to be 370-390 MEUR and EBIT 40-48 MEUR
Vaisala narrowed net sales estimate and increased EBIT estimate, and now expects
2020 sales to be between 370–390 MEUR and EBIT to be between 40–48 MEUR (prev.
sales 370-405 MEUR and EBIT 34-46 MEUR). Vaisala also provided preliminary
figures for January–September 2020. Preliminary net sales were 273 MEUR (277.2
MEUR Evli) and EBIT was 33 MEUR (25.6 MEUR Evli).

EBIT clearly better than expected despite the decline in sales
Pandemic has affected negatively especially airports customer segment and
emerging markets, and W&E has been missing larger project orders. Some project
deliveries have also been delayed due to restrictions related to COVID-19. IM’s
industrial instruments and liquid measurements products has not met growth
targets due to volatile market situation during Q2 and Q3. On the other hand,
Vaisala’s profitability has developed clearly better than expected in Q3 (EBIT
19.9 MEUR vs. 12.6 MEUR Evli). According to Vaisala, W&E’s digital services and
IM’s product and service businesses improved their gross margins. In addition,
the decline in operating expenses caused by the prolonged pandemic, has improved
EBIT more than expected.

Valuation remains stretched
Based on the update, we have cut our sales estimates and increased EBIT
estimates for 2020e. We expect 2020e net sales to decline 5.2% to 382.5 MEUR and
EBIT to increase to 46.6 MEUR. We have also revised EBIT estimates slightly
upwards for 2021e. Despite the margin improvement, COVID-19 continues to pose
significant near-term uncertainties. Vaisala’s share price rally has continued
and, on our estimates, Vaisala is trading at clear premiums compared to our peer
group and we see valuation stretched given the weaker financial performance
compared to peer group. We look forward to hearing more about the drivers of
margin development in connection with Q3 report next Tuesday. With the better
than expected profitability development we raise our TP to 32€ (29), but
downgrade to SELL (HOLD).

Open report


SUOMINEN - MULTIPLES ARE STILL CONSERVATIVE

22.10.2020 - 09.30 | Preview

Suominen reports Q3 results on Tue, Oct 27. Our estimates, EUR 5.5 target price
and BUY rating all remain intact.

Read more

No clear reason to expect softening wipes demand for now

In our opinion outlook is solid even after an exceptionally strong Q2, when
revenues in Americas and Europe grew y/y by 19% and 16%. Fatigue and possibly
growing indifference towards hygienic considerations could limit wipes growth at
a certain near future point, however many reports suggest this unlikely to
happen at least during the next few quarters. According to a New York Times
article some consumers in the US prize canisters of Clorox disinfecting wipes as
kinds of trophies since the item remains such a rare sight on store shelves.
Many companies have formed partnerships with Clorox to reassure employees and
customers that surfaces can be kept disinfected. Clorox saw wipes demand grow by
500% in a few months and inventory usually enough for 1-2 months gone in 1-2
weeks. Clorox was able to up production and plans to add more early next year.
This is just one brand-specific example from the downstream part of the supply
chain, but we believe it’s still relevant for upstream nonwovens suppliers. The
US is also a key market for Suominen since the Americas BA contributes ca. 65%
of revenue. Although European consumers may not be as keen wipers as their
American counterparts, we believe the recent pandemic acceleration continues to
lift volumes on both sides of the Atlantic.

There are no changes to inform estimate revisions

We view Suominen well-positioned to post double digit y/y growth rates during
the next couple of quarters. With regards to H2’20 top line figures we see the
uncertainty associated mostly with the scheduled maintenance breaks at several
Suominen plants and to what extent exactly these will negatively affect
production and delivery volumes. Raw materials prices have continued to develop
flat and hence we still expect gross margin to decline from 16% in Q2 to 15% in
Q3. There has also been basically no change to FX rates lately and so our EUR
114m revenue and EUR 9.8m EBIT estimates for Q3 remain intact.

We consider the conservative multiples attractive

Suominen continues to trade well below 6x EV/EBITDA on our estimates, compared
to a historical average of 6.5x. We find this an attractive level and so retain
our EUR 5.5 TP and BUY rating.

Open report


RAUTE - EARNINGS NOT YET OUT OF THE WOODS

20.10.2020 - 09.10 | Preview

Raute reports Q3 results on Thu, Oct 29. Many issues point how order levels and
profitability might have bottomed out, yet we continue to view valuation
neutral. We retain our EUR 20 per share target price and HOLD rating.

Read more

A very large Russian order raises confidence on next year

While Q3 order intake likely remained at a subdued level Raute disclosed on Oct
16 the signing of a complete plywood mill project delivery. The EUR 55m Russian
greenfield is worth close to the record EUR 58m Segezha order now on delivery.
Raute begins delivering the new order next year and the mill is set to start
production in ‘22. Even though the order is very large such a project delivery
announcement is not that surprising given Raute’s Russian plywood mill track
record. As usual with such big projects, Raute’s margin potential is likely
quite limited. The order raises our confidence on next year’s workload. We now
expect FY ’21 revenue at EUR 139m (prev. EUR 127m). With regards to FY ’21 EBIT
we now estimate EUR 6.6m (prev. EUR 7.4m).

Long-term potential remains strong, short-term still hazy

While the pandemic has negatively affected Raute’s business it’s worth bearing
in mind the investment cycle was cooling already well before this year. Although
the pandemic and related uncertainty now only seem to prolong themselves by the
day, we nevertheless view the prospect of wider plywood and LVL sector
investment upturn entirely plausible. We see a reasonable chance Raute’s order
intake will bottom out during H2’20. Another positive is the high likelihood of
Raute emerging from the pandemic even stronger relative to competition. On the
negative side is the extended short-term pressure on profitability. While it is
clear this year’s valuation multiples should be overlooked, next year could
still fall meaningfully short of long-term potential. In our opinion Raute does
not face long-term profitability challenges, but on the other hand the sector’s
cyclical nature means long-term outlook should be valued cautiously.

We expect improvement, but multiples aren’t yet attractive

Now that a big project has been secured, we focus on smaller scale equipment
orders and services in the Q3 report. Raute is currently trading some 7x
EV/EBITDA and 11x EV/EBIT on our estimates for next year. We view these
multiples quite neutral in the current context. We retain our EUR 20 TP and HOLD
rating.

Open report


FINNAIR - DARK WINTER AHEAD

19.10.2020 - 09.40 | Preview

Finnair will report its Q3 result on next week’s Wednesday, 28th of October. We
have cut our 20E-21E estimates. We keep our rating “HOLD” with TP of EUR 0.38
(EUR 0.50) ahead of Q3 result.

Read more

Q3’20 ASK decreased by 87% y/y

In Jul-Sep, Finnair carried 454k passengers which is 89% decline compared to
Q3’19. Finnair’s Q3 Available Seat Kilometers (ASK) decreased by 87% y/y but
compared to Q2’20, ASK increased by ~380%. Revenue Passenger Kilometers (RPK)
decreased by 94% y/y. Passenger load factor in Q3, was 38.7% (-47.5pp compared
to Q3’19). Due to the strict travel restrictions and new infection waves, the
company was not able to operate as many flights as it first anticipated. We
expect Q3E revenue of EUR 157m and adj. EBIT of EUR -191m.

Aiming to fly ~75 daily flights during the winter season

The coronavirus has not shown signs of abating during the autumn and the travel
restrictions have remained relatively tight, impacting negatively on demand. The
company has been forced to adjust its traffic plans for several times and due to
the current situation, the company now expects to operate approx. 75 flights per
day from Nov’20 to Mar’21 (in 2019, ~350 daily flights) and will increase its
destinations for summer 2021. During Q3, the company finalized a sale and
leaseback arrangement for its A350 aircraft delivered in February this year.
This had an immediate EUR ~100m positive cash effect. The company also issued a
new EUR 200m hybrid bond (fixed interest rate of 10.250% p.a.).

“HOLD” with TP of EUR 0.38 (0.50)

We have further cut our 20E-21E estimates. We expect 20E revenue of EUR 1062m
and comparable operating loss of EUR 609m. We expect the better recovery to
start during ’21 spring but we highlight that the outlook is still very blurry.
We keep our rating “HOLD” with TP of EUR 0.38 (0.50).

Open report


PIHLAJALINNA - HEADWIND FROM MANY DIRECTIONS

01.10.2020 - 09.20 | Company update

The FCCA has proposed the market court to prohibit the merger between Mehiläinen
and Pihlajalinna. We now see the likelihood of the transaction being completed
significantly lower. The political landscape is also changing. We keep our
rating “HOLD” with new TP of EUR 11.0 (16.0).

Read more

FCCA proposes to prohibit the merger

The Finnish Competition and Consumer Authority (FCCA) has proposed the market
court to prohibit the merger between Mehiläinen and Pihlajalinna. According to
the FCCA, the merger would significantly impede effective competition in the
Finnish health services market as there would be only two nationwide healthcare
companies (Mehiläinen and Terveystalo) in the market post-merger. Hence, the
Finnish healthcare market would become even more concentrated post-merger and
the merger would create competition concerns and the proposed remedies are not
sufficient to address the identified competition concerns (Mehiläinen submitted
two remedies proposals). According to the FCCA, the merger is also likely to
lead to price increases. The combined market share of the companies would have
been ~7% of the total healthcare and social services market. The market court
has to issue its decision within three months (latest on 29th of December).

The probability of the acquisition being completed has dropped

The result of the investigation came as a surprise to the parties involved and
to us as well. It is possible that the FCCA’s methodology to assess the market
size has varied from the methodology used by the companies (e.g. public vs.
private sector). Anyhow, we see that the likelihood of the acquisition being
completed has decreased significantly thus we return to see Pihlajalinna as an
independent service provider also in the future. During the process,
Pihlajalinna has continued to develop its business as usual. The company has for
instance developed its digital services and other medical services.
Additionally, the company has a strong background of cooperating with
municipalities. Due to the economic difficulties, the public sector has seeked
more efficient ways to produce effective services (e.g. by outsourcings) which
has benefited the private sector. The political interests have however shifted
more towards the public side meaning that the landscape has become more negative
towards private social and healthcare service providers.

“HOLD” with TP of EUR 11.0

We have not made changes to our estimates but we see that the probability of
transaction being completed is significantly lower. On our estimates, the
company trades at 20E-21E EV/EBIT multiple of 19.5x and 12.9x which translates
into 15-30% discount compared to the peers. We keep our rating “HOLD” with a new
TP of EUR 11.0 (16.0).

Open report


VERKKOKAUPPA.COM - STRONG MOMENTUM CONTINUES

28.09.2020 - 09.10 | Company update

Verkkokauppa.com issued a positive profit warning and expects 20E revenue of EUR
525-550m and adj. EBIT of EUR 17-21m. We have slightly increased our estimates
and keep our rating “BUY” and TP of EUR 6.3 intact.

Read more

Guidance upgrade due to better than expected development

Verkkokauppa.com issued a positive profit warning and upgraded its 2020
guidance. The upgrade is due to a better than expected development during Q3 and
improved outlook for the remainder of the year. The company now estimates that
the revenue in 2020 is in a scale of EUR 525-550m while adj. EBIT is EUR 17-21m
(prev. revenue of EUR 520-545m and adj. EBIT of EUR 13-18m). This is the
company’s second positive profit warning within a short period of time as the
previous one was given in July.

Consumers still on the move

According to the company, sales and the consumer demand have continued stronger
than expected throughout Q3. Against the expectations, the strong demand in many
of the key product categories (e.g. consumer electronics) in Q2 has not resulted
in a weakened demand in these categories in Q3. It is however likely that the
growth in the consumer electronics market hasn’t continued as strong but rather
that Verkkokauppa.com has been able win market shares. The management indicated
that the demand has continued strong also in other smaller product categories.
We expect the lower margin wholesale sales to remain relatively low throughout
the year, boosting gross margin development. If the same momentum continues,
Verkkokauppa.com’s campaign season in Q4 is likely to be very strong. However,
there are still significant uncertainties due to the COVID-19 situation.

“BUY” with TP of EUR 6.3

We have only slightly increased our 20E revenue expectation (EUR 543m) while
increasing our adj. EBIT expectation by ~11% (EUR 19.8m). On our estimates, the
company trades at 20E-21E EV/EBIT multiple of 10.1x and 10.4x, which translates
into a 60-70% discount compared to the peers. We keep our rating “BUY” with TP
of EUR 6.3 intact.

Open report


SUOMINEN - ONE SWEEPING TURN

24.09.2020 - 09.15 | Company report

Our estimates and EUR 5.5 TP are intact; retain BUY rating.

Read more

Fundamentals now materially firmer in short and long term

Suominen’s turnaround materialized in a very swift fashion this past spring.
Figures were considerably soft as late as Q4’19 when top line slipped in both
business areas, especially so in Europe. Americas grew again in Q1’20 but Europe
still declined some 11% y/y. While overall Q1 was already a positive surprise in
terms of profitability, revenue nevertheless continued to develop flat y/y. Then
Suominen proceeded to issue two positive profit warnings during a span of two
months in spring and early summer. However strong indication of improving
performance this was, our estimates could not exactly keep up with the pace and
hence Q2 figures trounced our expectations. Although the groundwork for solid
improvement had been laying back there for some time (thanks to e.g. sustainable
product introductions), it seems basically all the factors happened to align
favorably during the spring. Both Americas and Europe posted revenue increases
in the high teens, which also helped production efficiency. Investments in US
production assets were ready to pay off. Product mix improved some more while
nonwovens prices did not decline quite as much as those of raw materials.

Success in sustainable products helps to reach targets

The notable pre-pandemic challenges have vanished. Strong wipes demand means
nonwovens supply-demand balance now tilts much more favorably from a
manufacturer’s point of view, at least in the short-term. Despite this we expect
some softening in Suominen’s H2 figures as nonwovens prices tend to follow raw
materials prices closely, in addition to which several Suominen plants will go
through scheduled maintenance breaks. The Q2 records place the bar high for next
year, but in our view Suominen’s long-term financial targets look credible.
Success in sustainable products (in Suominen’s case increasing share of
wood-based fibers) could well defend margins also in the long-term, although the
innovations’ profitability remains to be tested in a scenario where significant
new capacity enters the market.

We see upside relative to historical earnings multiples

We continue to view Suominen’s below 6x EV/EBITDA multiples attractive. Our TP
is EUR 5.5 and we retain our BUY rating.

Open report


MARIMEKKO - OUTLOOK BRIGHTENS

21.09.2020 - 09.00 | Company update

Marimekko announced a guidance for 2020E and expects net sales to be lower
compared to last year and adj. EBIT to be approx. at the same level or lower
than last year. Due to the improved outlook we have increased our estimates. We
upgrade to “BUY” (“HOLD”) with new TP of EUR 42.0 (32.0).

Read more

Guidance for 20E announced

Marimekko withdrew its earlier 20E guidance in March, solely due to the
estimated impacts of the COVID-19. The company stated during its Q2 result that
the coronavirus will have a significant negative impact on sales and
profitability in 20E. Now the company has announced a guidance for 20E and
expects net sales to be lower than in the previous year (EUR 125.4m) and adj.
EBIT to be approx. at the same level or lower than in the previous year (EUR
17.1m).

Better than expected trend in sales

According to Marimekko, the improved outlook is mainly due to better than
expected trend of Finnish retail sales during the summer and improved outlook of
wholesale sales but also due to better fixed cost savings during the rest of
20E. The company however highlights that there are still significant
uncertainties caused by the COVID-19. The travel restrictions remained tight
throughout the summer thus it is likely that the money normally spent on
traveling has now been put into other things. Additionally, during the pandemic,
the trend of domesticity has increased among Finnish consumers which should also
have a positive impact on domestic sales. According to the company, major
portion of its net sales and earnings for H2E will be generated during Q3E.

Upgraded to “BUY” (“HOLD”) with TP of EUR 42.0 (32.0)

We have increased our 20E sales expectation by ~2% and our 20E adj. EBIT
estimate by ~21%. In our view, Marimekko’s mid-term outlook is good despite of
the challenging times. On our estimates, the company trades at 20E-21E EV/EBIT
multiple of 18.6x and 16.4x which translates into a clear discount (~50%)
compared to the luxury peers and at 20E-21E P/E multiple of 25.0x and 21.6x –
also a clear discount compared to the luxury peers. We upgrade to “BUY” (“HOLD”)
with TP of EUR 42.0 (32.0).

Open report


ASPO - IMPROVEMENT AHEAD IN Q4

15.09.2020 - 09.25 | Company update

Aspo reissued guidance for this year. In our view the main takeaway is that
improvement will be visible in Q4 figures, albeit there’s still long way to
reach the targets set for ’23. Our TP is EUR 7.25 (6.00), rating BUY (HOLD).

Read more

Q4 will mark the beginning of profitability rebound

Aspo now guides FY ’20 EBIT to be in the EUR 12-16m range, compared to EUR 21.1m
last year. Aspo says Telko’s (including Kauko) development has proved a positive
surprise while Leipurin has been able to defend its profitability despite
exceptional circumstances. Aspo expects the combined EBIT for Telko and Leipurin
segments will be higher this year than in ‘19 (the combined figure amounted to
EUR 11.0m last year). Meanwhile Aspo estimates ESL will post a negative result
for Q3 but expects Q4 to be clearly profitable as e.g. steel industry production
shutdowns end and cargo volumes will begin to grow.

Q4 results will still be significantly below target levels

The new range’s EUR 14.0m midpoint is lower than our previous EUR 15.3m
estimate, the difference being mostly due to ESL’s expected negative Q3 result
(which we previously estimated at EUR 0.4m). We now expect ESL to post EUR -0.2m
in Q3 EBIT. We leave our FY ’20 estimates intact for other segments, and so we
now expect Aspo to post EUR 14.6m EBIT this year. In our view the guidance
reissue is positive news for Aspo shareholders in terms of informational content
as it hints at relatively brisk profitability rebound in Q4. On the other hand,
Q4 EBIT, which we now estimate at EUR 4.8m, will still be far from Aspo’s full
potential. According to the long-term targets published at last fall’s CMD, Aspo
aims for 6% EBIT margin in ‘23 (vs our 3.9% estimate for Q4). ESL’s targets
imply EUR 24m in annual EBIT, or some EUR 6m on a quarterly level (vs our EUR
2.8m estimate for Q4). Telko and Leipurin will likewise still be generating EBIT
margins clearly below their respective 6% and 5% targets.

Uncertainty remains, but we see surprises tilting to upside

The guidance pushes away some uncertainty, yet it was previously known this year
will fall significantly below long-term potential. Next year’s profit gradient
is the key question; the main upside driver is found in positive surprises for
‘21. Although it’s early to wait such news, we see valuation attractive already
in terms of SOTP. Our TP is EUR 7.25 (6.00), rating BUY (HOLD).

Open report


VERKKOKAUPPA.COM - RIDING THE WAVE

11.09.2020 - 09.20 | Company report

Verkkokauppa.com’s growth story has continued over the years and the company’s
revenue CAGR in 2010-2019 was 12.6 percent. Now the company has started to put
more emphasize on profitability. We keep our rating “BUY” with TP of EUR 6.3.

Read more

Focusing on profitable growth
Verkkokauppa.com’s revenue CAGR in 2010-2019 was 12.6 percent. The growth has
been mainly supported by competitive pricing, strong online positioning and new
product categories. The competition in the consumer electronics market has
continued fierce and price driven. The company’s efficient and scalable cost
base driven by small physical footprint enables competitive pricing and strong
reliance against competition. The company has a strong net cash position which
enables investments in growth. The company has started to put more emphasis on
profitability of which the first evidences have already been seen.

Better profitability improvement via gross margin increase
Verkkokauppa.com’s future growth is depended on the online migration. According
to the company, online sales represent some 12-13 percent of the total Finnish
retail market. The company’s extremely good performance in H1’20 has been partly
driven by the COVID-19, as sales grew by 11 percent and adj. EBIT grew by over
240 percent. It is challenging to estimate how permanent the market changes will
be. However, increased online demand benefits e-commerce players such as
Verkkokauppa.com. At the same time, risks related to the overall economic
outlook and declining purchasing power have increased. Due to the low and
scalable cost base we expect the company’s profitability to improve together
with revenue growth. However, we see that better profitability improvement stems
from higher gross margin levels.

“BUY” with TP of EUR 6.3 intact
We have slightly increased our estimates and expect sales in 20E-21E to grow by
~7 percent and ~4 percent, respectively. We also expect profitability to improve
and adj. EBIT margin of 3.2-3.3 percent in 20E-21E. We value Verkkokauppa.com by
using our scenario analysis which indicates a fair value of EUR 6.3. On our
estimates, Verkkokauppa.com trades at 20E-21E EV/EBIT multiple of 10.9x and
10.7x, which translates into ~60 percent discount compared to the peers. 20E-21E
EV/Sales multiple is ~30 percent below peers. We keep our rating “BUY” with TP
of EUR 6.3.

Open report


SUOMINEN - CMD NOTES; WIPING TRENDS ARE STRONG

03.09.2020 - 09.25 | Company update

Suominen hosted a virtual CMD yesterday. Although there were no major updates
the event nevertheless added some color on recent trends. Our TP remains EUR
5.5, rating BUY.

Read more

Volumes are up globally due to cleaning and disinfection

The pandemic has lifted volumes in all markets and Suominen expects elevated
demand to persist at least for the next few months. Permanently higher demand is
likely within cleaning and disinfection products. Suominen estimates it has an
above 15% wiping market share in Europe and is thus the leading player. All
segments have enjoyed strong demand, household wiping especially so. Americas’
development has been similar and stores in the US still often have trouble
shelving enough household cleaning products. Nielsen Homescan estimates 79% of
US households now consider disinfecting wipes a staple item (vs 50% prior to the
outbreak). Certain interesting consumer behavior anecdotes were discussed e.g.
how Uber riders can now check before boarding whether the ride will feature
Clorox disinfecting wipes. Luckily the new assets in Bethune and Green Bay were
ready to meet surging demand. Indeed, the plant in Bethune was able to finally
reach performance targets. In general, Suominen aims to grow with its current
major customers and we see the company well-positioned to capture above market
growth (thanks to competitive product portfolio), according to the long-term
financial targets updated previously this year. Margins should stay relatively
high in the short-term and Suominen might even be able to defend its nonwovens
pricing, despite lower raw materials prices, as high wiping demand continues to
persist together with the pandemic.

Our estimates remain unchanged for now

The CMD did not lead us to revise our estimates at this point. We expect some
softening in gross margin and thus in EBITDA following the exceptionally strong
Q2 (Suominen posted a 14.7% EBITDA margin, compared to the above 12% long-term
target).

Further improvement not very easy but multiples are low

2020 will be a new record year for Suominen in terms of financial performance
and in our view further gain in EBITDA next year can prove tricky. However, we
continue to view current valuation attractive (EV/EBITDA is ca. 5.5x on our
estimates for this year and next). We retain our EUR 5.5 TP and BUY rating.

Open report


NEXT GAMES - SHOWING SOME MORE POSITIVE SIGNS

31.08.2020 - 09.00 | Company update

Next Games reported better results than we had expected and clearly better
profitability, which effectively halted cash burn. The Stranger Things and Blade
Runner Rogue games are set for scaled launch in the year-end or later and growth
prospects in 2021 remain largely unchanged.

Read more

Profitability clearly above expectations
Next Games reported better H1 results than we had expected. Revenue amounted to
EUR 14.4m (Evli 13.8m) and the adj. operating profit to EUR 0.1m (Evli -2.4m).
NML performed above our expectations due to ARPDAU improvements while Our World
gross bookings continued to decline as DAU figures fell clearly, although the
ARPDAU continued to improve. Our World was affected by COVID-19 restrictions on
movement. With the improved profitability operating cash flow turned positive
and the cash position excluding debt repayment remained effectively unchanged
from the end of 2019.

Scaled new game launches set for the year-end
Next Games has clearly reevaluated its publishing strategy since the launch of
Our World and new games will be brought to market and scaled over a longer time
period. With Stranger Things expected to be launched in Q4/20 and Blade Runner
Rogue still seeing major updates the impact of new games on 2020 revenue will
likely be very limited and Next Games quite expectedly dropped its revenue
guidance. Publishing operations EBITDA is expected to grow clearly in 2020
following lower marketing costs. 2021 figures are highly dependent on the new
games to be launched and visibility as such is extremely low. With a larger
share of employees working on live games profitability should improve but
marketing costs should still limit near-term profitability potential.

SELL with a target price of EUR 1.2 (0.9)
The improved profitability and resulting halt to cash burn provide needed
support for the company’s financial position. With the uncertainty from the
dependency on new games, valuation in our view is still not justifiable. We
adjust our target price to EUR 1.2 (0.9) and retain our SELL-rating.

Open report


FELLOW FINANCE - UNCERTAINTY IN VOLUME RECOVERY

31.08.2020 - 08.15 | Company update

Fellow Finance’s H1 figures were somewhat below our expectations and EBIT barely
fell in the red. Volume recovery prospects in 2020 appear rather meager and
growth ambitions should pick up during H2 to put things back on track in 2021.
We retain our HOLD-rating and TP of EUR 2.5.

Read more

EBIT barely in the red
Fellow Finance reported H1 figures somewhat below our expectations. Revenue
amounted to EUR 5.8m (Evli 6.3m), declining 20% y/y, and EBIT to EUR -0.1m (Evli
0.3m). Facilitated loan volumes and commissions income declined around 37% y/y
respectively, while increases in interest yield income mitigated some of the
revenue impact. The uncertainty caused by the coronavirus was clearly visible in
loan volumes after March, dropping average volume levels to approx. EUR 9m per
month during 4-6/2020 compared with approx. EUR 14.5m during 1-3/2020.

2020 to be a challenging year
Investor’s demand has according to Fellow Finance seen recovery in recent
months. The temporary regulation on maximum interest rates on consumer loans in
Finland, valid during 1.7-31.12.2020, should have a negligible impact on volumes
as Fellow Finance is compensating investors with the difference to the actual
interest rate but will result in some additional costs during H2. We currently
expect loan volumes to rebound to an EUR 11m per month average level in Q4.
Although possible, with the current more challenging environment we do not see
Fellow Finance achieving the pre-corona volume levels during 2020. We still
expect notable improvements in 2021, assuming an ease in temporary regulations
and renewed focus on growth drivers.

HOLD with a target price of EUR 2.5
Our estimates have been slightly lowered post-H1 given the below expectations
figures and continued dim outlook for volume recovery. Near-term multiples on
our estimates remain unattractive but longer-term growth potential still
remains. We retain our HOLD-rating and target price of EUR 2.5.

Open report


ENDOMINES - FUNDING STILL A KEY ISSUE

31.08.2020 - 07.30 | Company update

Endomines commenced gold concentrate sales at its Friday mine but COVID-19
related challenges have pushed back ramp up to design capacity further. The
attractive gold price level unfortunately remains overshadowed by cash burn and
lack of more permanent financing solutions. We retain our SELL-rating with a
target price of SEK 5.5.

Read more

Sales commenced but head grades still low
Endomines Q2 results were slightly below our estimates, with revenue of SEK 7.5m
(Evli 9.0m), EBITDA of SEK -17.5m (Evli -20.6m) and EBIT of SEK -27.7m (Evli
-24.5m). The first concentrate sales at the Friday mine were made, but with
pre-production development material being milled head grades were low and with
the still low capacity revenue was not yet significant. COVID-19 related
challenges to supply chains and recruitment have further pushed back the ramp up
timetable of the processing facility and design capacity will unlikely be
reached in 2020.

Friday ramp-up delayed due to COVID-19
We have clearly lowered our 2020 estimates post-Q2 following the ramp-up delays
and update on the stockpiled pre-production development material. We expect 80%
of design capacity to have been reached in Q4 and atypical head grades
throughout the year due to stockpiled development material. We now expect
revenue of SEK 41.0m (prev. 77.1m) and EBITDA of SEK -68.9m (prev. -38.3m).
Endomines reported that plans are being made for a possible re-opening of
Pampalo given the current gold price, which in our view could provide a
production boost somewhere towards H1/21 if initiated.

SELL with a target price of SEK 5.5
Despite production and sales having recommenced, the unfortunate side of the Q2
report was the cash burn rate, with liquid assets again largely depleted and
some exploration activities having been put on hold. Gold price levels are
clearly attractive but with the expected cash burn rate during H2/20 and so far
lack of more permanent financing solutions risks are still substantial. We
retain our TP of SEK 5.5 and SELL-rating.

Open report


NEXT GAMES - PROFITABILITY SURPASSED EXPECTATIONS

28.08.2020 - 09.30 | Earnings Flash

Next Games' net sales in H1 amounted to EUR 14.4m, slightly above our estimate
(EUR 13.8m Evli). Gross bookings amounted to EUR 14.2m (Evli EUR 13.8m). The
adj. EBIT was clearly better than expected at EUR 0.1m (EUR -2.4m Evli).

Read more

 * Net sales in H1 were EUR 14.4m (EUR 19.2m in H1/19), slightly above our
   estimate (EUR 13.8m Evli). Net sales in H1 declined 25% y/y. Compared to our
   estimates, revenue was better than expected due to better than anticipated
   performance of No Man’s Land.
 * The adj. operating profit in H1 amounted to EUR -0.1m (EUR -1.8m in H1/19),
   clearly better than we had expected (EUR -2.4m Evli). The EBITDA of
   publishing operations in H1 amounted to EUR 3.4m. Research and development
   expenditure amounted to EUR 3.3m.
 * EBIT amounted to EUR -1.6m (H1/19: -3.5m), clearly above our estimate of EUR
   -4.0m.
 * TWD: NML (Q1/Q2) - DAU 162k/158k (225k/190k), MAU 483k/463k (669k/540k),
   ARPDAU EUR 0.27/0.28 (0.22/0.22).
 * TWD: OW (Q1/Q2)- DAU 83k/70k (211k/155k), MAU 309k/246k (982k/602k), ARPDAU
   EUR 0.50/0.51 (0.29/0.37).
 * Games in development: Blade Runner Rogue continues in development, with the
   rest of the major updates planned for this year. The Stranger Things game is
   planned to be brought to the market in stages during Q4/20.
 * Outlook updated: Revenue from already published titles expected to continue
   on flat or declining trend. Publishing operations EBITDA expected to improve
   clearly in 2020 compared with 2019. Next Games expects to start scaling 1-2
   games during 2020.

Open report


FELLOW FINANCE - SOMEWHAT WEAKER THAN EXPECTED

28.08.2020 - 09.00 | Earnings Flash

Fellow Finance’s H1/2020 results were somewhat weaker than expected, with
revenue of EUR 5.8m (Evli EUR 6.3m) and an adj. EBIT of EUR -0.1m (Evli EUR
0.3m). The adj. EPS was below our estimates at EUR -0.10 (Evli EUR -0.05).
Coronavirus uncertainty and temporary regulations affected facilitated loan
volumes, down 36.8% in H1/20 compared with H1/19.

Read more

 * Revenue in H1 amounted to EUR 5.8m (EUR 7.2m in H1/19), below our estimates
   (Evli EUR 6.3m). Revenue declined 19.8% in H1. Compared with H1/19 commission
   fees declined by 38% and interest yields increased by 31%.
 * Fellow Finance facilitated loans during H1 for a total of EUR 69m (EUR 109.3m
   in H1/19), a decrease of 36.8%. Loan volumes were affected by uncertainty
   caused by the coronavirus pandemic, which interrupted new investments, along
   with temporary regulations in Finland and Poland, which limited loan
   intermediation possibilities.
 * The adj. EBIT in H1 amounted to EUR -0.1m (EUR 1.4m in H1/19), below our
   estimates (Evli EUR 0.3m) driven by the lower than expected revenue.
 * The adj. EPS in H1 amounted to EUR -0.10 per share (EUR 0.07 in H1/19), below
   our estimate of EUR -0.05.
 * Guidance: Fellow Finance withdrew its guidance in March and did not reinstate
   a guidance in conjunction with the H1 report.
 * Repayment levels of business and consumer loans did not face any significant
   deterioration despite the challenging environment.
 * Business financing volumes grew 15% compared to H1/19 despite the environment
   and tightened credit approval criteria.

Open report


ENDOMINES - FIRST PRODUCTION FIGURES IN

27.08.2020 - 10.00 | Earnings Flash

Endomines’ gold production amounted to 326.1oz. Head grades were at a low level
of 2.9g/t due to the milling of pre-production development material. Near design
capacity at Friday is now sought to be reached in Q4, with the COVID-19 pandemic
having caused delays. Q2 revenue amounted to SEK 7.5m (Evli 9.0m) and EBITDA to
SEK -17.5m (Evli -20.6m).

Read more

 * Endomines made its first shipments of gold concentrate from the Friday mine
   during Q2.
 * Revenue* in Q2 amounted to SEK 7.5m, with our estimates at SEK 9.0m. Gold
   production amounted to 326.1oz, with a head grade of 2.9g/t. Gold concentrate
   was produced from pre-production development material, thus resulting in low
   head grades.
 * EBITDA* in Q2 was at SEK -17.5m, slightly above our estimate of SEK -20.6m.
   *Figures not reported, derived from Q1-H1 figures
 * At the processing facility at Friday Endomines was able to operate at an
   average rate of 41.1 tonnes per day. Ramp up to design capacity (3,445 tonnes
   per month) continued. The COVID-19 pandemic has continued to severely impact
   production ramp-up due to supply chain disruptions and slowdowns in hiring.
   Endomines now expects that near design capacity could be reached towards Q4
   (previously expected in Q2).
 * Endomines did not give any numeric production guidance for 2020.
 * Endomines sees interest in investing in the decline at Pampalo at current
   all-time high gold prices.
 * Liquid assets amounted to SEK 3.4m at the end of the quarter.

Open report


NEXT GAMES - TWO-FOLD IMPLICATIONS OF THE PANDEMIC

24.08.2020 - 09.15 | Preview

Next Games reports H1 results on August 28th. We expect the COVID-19
restrictions to have supported gaming in general but had an adverse impact on
the location based Our World game. The limited news on games in development
raises some concerns for the 2020 outlook.

Read more

Expect to see two-fold impact of the pandemic
Next Games will report H1 results on August 28th. We expect the outbreak of the
coronavirus pandemic to have had a two-fold effect on current live games. The
imposed restrictions on movement and self-isolation should have had an adverse
effect on the location based Our World game and Next Games did launch the Free
Roam feature to mitigate some of the impact. No Man’s Land should have continued
to perform seemingly well, with the restrictions to certain activities having
freed up more time for other activities such as gaming. We expect revenue of EUR
13.8m, a decline of 28% from the stronger comparison period, and an adj. EBIT of
EUR -2.4m, with positive publishing operations profitability.

Limited news flow on games in development
News flow on games in development has been essentially non-existent post
H2/2019. Blade Runner Rogue is running on app stores, but retention issues
previously saw the game being moved back to production phase. The Stranger
Things -game was in early access earlier on but no further news has been given.
The pandemic should not have significantly affected development progress, with
employees having rapidly shifted to remote working. Next Games expects modest
revenue growth in 2020 assuming one or two games are published in 2020. We see
some risks in achieving the outlook given the news flow and expect the H1 report
to shed some much-needed light on the progress.

SELL (HOLD) with a target price of EUR 0.9 (0.84)
Valuation continues to be clearly below peers as is profitability. The
restrictions due to the pandemic will have aided the gaming sector and peer
multiples have in the past months been on the rise. We adjust our TP to EUR 0.9
(0.84) but lower our rating to SELL (HOLD).

Open report


CIBUS NORDIC - SOMETHING MORE TO CHEW OVER

21.08.2020 - 09.15 | Company update

Cibus’ portfolio remains unaffected by the pandemic and additional acquisitions
are imminent despite already busy H1’20. Our TP is now SEK 160 (150) per share,
rating BUY.

Read more

Certain exceptional transactions burdened Q2 bottom line

Cibus was largely immune to the pandemic (shared certain small Finnish tenants’
troubles to the tune of EUR 0.2m). Property figures were as expected with rental
income at EUR 16.4m vs our EUR 16.2m estimate. Property expenses remained in
check and so net rental income amounted to EUR 15.1m i.e. same as our estimate.
Administration costs were elevated by some EUR 0.5m due to bond transactions as
well as the restructuring of Finnish books. The EUR 13.6m in operating income
thus fell short of our EUR 14.2m estimate. Net financial costs were driven high,
to EUR 5.8m, by a one-off EUR 2.9m item attributable to bond redemption premiums
and arrangement fees. Net operating income was thus EUR 7.8m vs our EUR 9.9m
estimate.

Both existing portfolio and prospects basically unchanged

The daily-goods property market remains stable and the pandemic hasn’t
discernibly altered deal flow. This means Cibus is in a strong position to add
to its property mass through smaller portfolio acquisitions and thus scale the
current organization. Yields are still attractive as Cibus can buy assets at
some 100-150bps pick-up relative to its own book valuation. In addition to the
EUR 180m Swedish entry, Cibus is well ahead of its annual EUR 50m acquisition
target since Finnish purchases total over EUR 70m YTD. With EUR 85m in cash and
long-term financing in place further additions might well happen in H2’20. Cibus
is also instituting additional shareholder-friendly effects in the near term,
namely the transitioning to monthly dividend payments as well as switching to
the Nasdaq Stockholm main list.

We see scope for further valuation rerating

In our opinion some tightening in valuation relative to the wider Nordic
property sector is warranted since the pandemic has very limited direct bearing
on Cibus. The situation is different for the bulk of commercial real estate e.g.
offices. Cibus’ yield spread relative to other listed Nordic entities has indeed
tightened a bit recently, however in our view there’s still room to go with
Cibus yielding ca. 5% vs some 4% for a typical Nordic portfolio. Our TP is now
SEK 160 (150) per share. We retain our BUY rating.

Open report


CIBUS NORDIC - TEMPORARILY ELEVATED EXPENSES

20.08.2020 - 09.30 | Earnings Flash

Cibus’ portfolio continued to perform according to expectations while
transactions and financing activities drove central administration expenses and
especially net financial costs exceptionally high.

Read more

 * Cibus’ Q2 rental income was EUR 16.4m while we estimated EUR 16.2m.
 * Net rental income (i.e. after property expenses) amounted to EUR 15.1m,
   compared to our EUR 15.1m estimate.
 * Operating income (after central administration expenses) was EUR 13.6m vs our
   EUR 14.2m estimate.
 * Net operating income (after net financial costs) stood at EUR 7.8m vs our EUR
   9.9m estimate.
 * Annual net rental income capacity is now EUR 65.1m (previously EUR 60.6m).
 * The portfolio was valued at EUR 1,124m and thus EPRA NAV amounted to EUR 11.8
   (11.6) per share.
 * Net LTV ratio was 60.5% (58.1%).
 * Occupancy rate was measured at 95.2% (94.8%).
 * WAULT remained at 5.5 years at the end of Q2.

Open report


PIHLAJALINNA - FOCUS ON THE TENDER OFFER

17.08.2020 - 09.20 | Company update

Pihlajalinna’s Q2 result was close to expectations. Revenue decreased by 11.6%
y/y and was EUR 114.7m while adj. EBIT totaled EUR 0.6m. The tender offer by
Mehiläinen is being under review of the FCCA and if approved, the process is
expected to be completed during Q3. We keep our rating “HOLD” with TP of EUR
16.0.

Read more

The pandemic hampered especially non-urgent healthcare

Pihlajalinna’s April-June revenue of EUR 114.7m (-11.6% y/y) was slightly above
our expectation of EUR 112.1m. Adj. EBITDA was EUR 9.0m vs. our EUR 9.1m and
adj. EBIT was EUR 0.6m vs. our EUR 0.2m. Complete outsourcings and other fixed
priced invoicing supported the company throughout Q2 (profitability of these
remains relatively stable despite of the demand situation). The situation didn’t
also have significant impacts on the demand of housing services for elderly,
recruitment services, public surgical operations or fertility treatments.
Customer flows and demand decreased especially in private clinics and dental
clinics. Revenue of Forever-fitness centers declined by over 80 percent y/y,
resulting from the temporarily closure of the centers.

Releasing pent-up demand

According to the company, the biggest drop in demand is now behind and as the
pent-up demand has started to release, the customer flows in private clinics,
occupational healthcare services and dental care services have recovered
relatively well and the demand is closer to a normal situation. As the
restrictions impacted the most on the demand of non-urgent healthcare services,
there are bottlenecks in the treatment queues especially on the public side.
This could potentially further increase the customer flows of the private
sector. However, the increasing number of new coronavirus infections is
indicating a new wave, which increases uncertainties and makes the visibility of
H2 blurry.

“HOLD” with TP of EUR 16.0

The tender offer by Mehiläinen is currently being under review of the FCCA
(phase two investigation). The deadline for the investigation is 27th of August
(plus possible extension period). Based on the current information, if the
tender offer is approved, the process is expected to be completed during Q3. We
have only made minor adjustment to our estimates after the Q2 result. We expect
20E revenue of EUR 517m (-0.3% y/y) and adj. EBIT of EUR 22.3m. We keep our TP
at the tender offer price of EUR 16.0 and retain our rating “HOLD”.

Open report


GOFORE - STEADY AS SHE GOES

17.08.2020 - 08.45 | Company update

Gofore’s H1 report did not provide any larger surprises. With net sales
pre-announced at EUR 37.4m adj. EBITA of EUR 5.8m was quite in line with our
estimates (Evli EUR 5.5m). The large share of public sector clients (73.5% of H1
net sales) is proving beneficial under these circumstances and the direct impact
of COVID-19 has been rather limited. We retain our HOLD-rating with a TP of EUR
8.6 (8.4).

Read more

No surprises in the H1 results

Gofore’s H1 results brought no larger surprises, as net sales had been
pre-announced at 37.4m the adj. EBITA was quite in line with our estimates at
EUR 5.8m (Evli 5.5m). Relative profitability was as expected weaker in the
second quarter compared to the first quarter but saw no major direct negative
impact of the coronavirus pandemic. Demand in the public sector clientele,
representing 73.5% of net sales in H1, saw demand remaining steady while the
private sector clientele saw some delays in development work and cancellations
of projects.

Acquisition seals growth prospects

Our estimates remain largely intact as our marginally lowered expectations for
H2 are offset by the slight profitability beat in H1. We expect 2020 net sales
of EUR 75.1m (co’s guidance EUR 70-76m) and an adj. EBITA of EUR 10.0m. Our
profitability estimates are more on the cautionary side given H1 profitability
but in our view reflects the company guidance and P&L changes from the Qentinel
Finland acquisition. In our estimates for net sales in the second half of the
year we currently expect similar organic growth as in H1 along with the expected
EUR 4m M&A impact. In 2021 we see Gofore set for solid earnings growth with help
of the large inorganic growth.

HOLD with a target price of EUR 8.6 (8.4)

With only minor estimates revisions post-H1 we fine-tune our target price to EUR
8.6 (8.4), valuing Gofore at ~17.0x 2020e adj. P/E. Demand uncertainty is at
elevated levels due to the pandemic but resilience has so far been provided by
the large share of public sector clients. Our HOLD-rating remains intact.

Open report


MARIMEKKO - FIRST WAVE SURVIVED

14.08.2020 - 09.40 | Company update

Considering the circumstances, Marimekko delivered relatively good Q2 result.
Net sales decreased by 20% y/y and amounted EUR 23.3m vs. EUR 18.3m/19.8m
Evli/cons. Adj. EBIT clearly beat expectations and was EUR 2.7m vs. EUR
0.6m/0.5m Evli/cons. We keep our rating “HOLD” with TP of EUR 32 (24)

Read more

Relatively good result, considering the circumstances
Marimekko’s Q2 net sales were down by 20% y/y and totaled EUR 23.3m (EUR
18.3m/19.8m Evli/cons). Especially retail sales in Finland, Scandinavia and
North America faced headwind amid the pandemic but also wholesale sales in the
APAC region declined. At the same time, licensing income in the APAC region
boosted sales. Adj. EBIT clearly beat estimates and was EUR 2.7m vs. EUR
0.6m/0.5m Evli/cons. Profitability was weighed down by lower net sales and
declined relative sales margin (sales margin was negatively impacted by
increased logistics costs and bigger discounts). In the early stage of the
pandemic situation, the company implemented cost saving measures resulting in
decreased fixed costs in Q2. Guidance for 20E was not given.

Sales and earnings depending on the pandemic situation
Even though the Q2 result beat the expectations, the uncertainties hover over
the H2’20. Despite of the strong online sales growth (more precise information
not disclosed), it is vital especially for the retail stores to remain open. In
the case of new infection waves, we expect the customers to become even more
price sensitive and cautious with their purchases, impacting negatively on
sales. This could also have an impact on the partners’ behavior. However, we
expect the mentality of “support your local” among the Finnish consumers to
continue, supporting domestic sales together with nonrecurring promotional
deliveries of which majority will take place in H2’20E. Marimekko is also
planning to reorganize its operations and initiates cooperation negotiations.
The aim is to seek annual cost savings of approx. EUR 1.5m.

“HOLD” with TP of EUR 32.0 (24.0)
After the Q2 result we have increased our 20E revenue estimate by ~6% (EUR 116m)
and our adj. EBIT estimate by ~27% (EUR 13.7m). We have also slightly increased
our 21E-22E estimates. However, we note that there are significant uncertainties
not only with our 20E estimates but also with our 21E estimates. On our
estimates, Marimekko trades at 20E-21E EV/EBIT multiple of 18.1x and 13.5x,
which translates into a clear discount compared to the luxury peers. We keep our
rating “HOLD” with TP of EUR 32.0 (24.0).

Open report


GOFORE - PROFITABILITY SLIGHTLY ABOVE ESTIMATES

14.08.2020 - 09.30 | Earnings Flash

Gofore’s adj. EBITA in H1 was slightly better than we had expected, at EUR 5.8m
(Evli 5.5m). Revenue amounted to EUR 37.4m (pre-announced). Little direct impact
of the coronavirus pandemic on the public sector client segment so far, private
sector more affected.

Read more

 * Gofore’s H1/20 net sales amounted to EUR 37.4m (pre-announced), with sales
   growth of 11.7% compared to H1/19 figures. Growth was driven by organic
   growth and the acquisitions of Silver Planet and Mangodesign.
 * Adj. EBITA in H1 amounted to EUR 5.8m, slightly above our estimates (Evli EUR
   5.5m), at a margin of 15.5%. EBIT amounted to EUR 4.0m (Evli EUR 3.7m), at a
   10.8% EBIT-margin.
 * The coronavirus pandemic has had little direct impact on the public sector
   client segment so far, in the private sector some cancellations of projects
   and delays in development work have been seen.
 * Guidance (upd. Aug 10th): Gofore's net sales in 2020 are expected to be EUR
   70-76m and the adjusted EBITA will grow compared to 2019.
 * The number of personnel at the end of the period was 610 (H1/19: 559).

Open report


SOLTEQ - ACTIONS TAKEN YIELDING RESULTS

14.08.2020 - 09.00 | Company update

Solteq reported clearly better than expected profitability figures following
cost reductions, with comp. EBIT at EUR 1.5m (Evli 0.5m). Possible demand
thinness remains a concern but with the lower cost base we raise our 2021-22
comp. EBIT estimates by some 30% on average. We adjust our TP to EUR 1.65 (1.15)
and our rating to BUY (HOLD).

Read more

Profitability clearly beat our estimates
Solteq reported solid Q2 results and profitability was clearly better than we
had expected. Revenue grew 7.8% in comparable terms to EUR 15.1m (Evli EUR
14.6m) with both segments contributing nearly equally. The comp. EBIT amounted
to EUR 1.5m, clearly above our estimates (Evli EUR 0.5m). The earnings
improvement was attributable to previously taken streamlining actions and to
some extent reduced travel expenses due to COVID-19. Solteq also reinstated a
guidance for 2020, expecting comp. EBIT to grow significantly. The operating
cash flow was also strong, at EUR 5.3m in H1 (2019: EUR 4.1m).

Coming year profitability estimates up by quite a bit
We have made larger estimates revisions post Q2, now expecting 2020 revenue of
EUR 60.2m (prev 58.9m) and comp. EBIT of EUR 4.8m (prev. 2.4m). We have also
raised our 2021-2022 comp. EBIT estimates by some 30% on average. The impact of
the coronavirus has so far been limited and sales growth has been good during H1
following good earlier order intake. Our main concerns going forward relate to
possible thinness in demand and as such expect lower relative growth figures.
Solteq has seen good demand in for instance the energy sector, while areas more
affected by the pandemic, such as the travel, restaurant and maritime sectors,
saw lower sales in Q2.

BUY (HOLD) with a TP of EUR 1.65 (1.15)
Solteq has been burdened by high leverage and as such low earnings, which to a
large extent will be reversed by the improved profitability and improved cash
flows will reduce financial risk. With our revised estimates we adjust our TP to
EUR 1.65 (1.15), implying a 2020e P/E of 16.5x. We adjust our rating to BUY
(HOLD).

Open report


PIHLAJALINNA - NO BIGGER SURPRISES WITH Q2 RESULT

14.08.2020 - 08.45 | Earnings Flash

Pihlajalinna’s Q2 result was somewhat in line with our expectations. Q2 revenue
amounted to EUR 114.7m vs. EUR 112.1m/119.1m Evli/cons, while adj. EBIT landed
at EUR 0.6m vs. EUR 0.2m/1.8m Evli/cons estimates. EPS was EUR -0.03 vs. our EUR
-0.03.

Read more

 * Q2 revenue was EUR 114.7m vs. EUR 112.1m/119.1m Evli/cons estimates. Revenue
   declined by 11.6% y/y.
 * Q2 adj. EBITDA was EUR 9.0m (7.9% margin) vs. EUR 9.1m/10.3m Evli/cons
   estimates.
 * Q2 adj. EBIT was EUR 0.6m (0.5% margin) vs. EUR 0.2m/1.8m Evli/cons
   estimates.
 * Q2 EPS was EUR -0.03 vs. EUR -0.03/0.02 Evli/cons.
 * According the company, the pandemic and restrictions reduced customer flows
   the most in fitness centers, private clinics and dental clinics but over half
   of the business remained stable during Q2, despite of the situation.
 * The company didn’t provide a guidance for 20E at this point, due to the weak
   visibility caused by the virus.

Open report


ASPO - NAVIGATION IS STILL CHALLENGING

13.08.2020 - 09.25 | Company update

Aspo Q2 was stronger than expected thanks to Telko, but the report and comments
painted a cautious short-term picture. Our TP remains EUR 6.0, retain HOLD
rating.

Read more

Some beacons of light but still surrounded by thick fog

ESL’s top line declined by 23% y/y and at EUR 32.9m was clearly below our EUR
40.1m estimate. Q2 EBIT, at EUR 0.6m, thus didn’t meet our EUR 1.6m estimate.
Steel industry cargo volumes fell steep and energy industry activity wasn’t much
better. Smaller vessels continued to perform quite well but many larger ones
operated in weak spot markets. ESL managed to shave fixed costs by EUR 0.9m and
Aspo says cost measures will be fully realized in Q3, however Q3 outlook is not
bright as steel industry volumes will be low with rebound now expected for Q4.
Meanwhile Telko posted EUR 4.2m EBIT (vs our EUR 1.1m estimate), a strong show
given that revenue declined by 26% y/y to EUR 59.5m (vs our EUR 63.1m estimate).
Telko’s performance is clearly on an improving trend thanks to efforts
addressing e.g. working capital efficiency. It however seems Q2 EBIT margin was
exceptionally high and current outlook is challenging especially in Ukraine and
Russia. Leipurin Q2 revenue fell by 17% y/y and the EUR 0.3m EBIT didn’t meet
our EUR 0.6m estimate as certain machinery deliveries bound for Russia were
postponed to H2.

We cut estimates due to cautious market comments

Aspo’s H1 figures already reflected the pandemic shock yet Q3 remains
challenging especially for ESL. We now expect ESL EBIT at EUR 0.4m and EUR 2.9m
respectively for Q3 and Q4. In our view Aspo’s unofficial soft guidance for
Telko FY ’20 (flat y/y absolute profitability i.e. some EUR 8m) seems a bit
conservative given the EUR 6.6m accumulated already in H1. We expect Telko Q3
EBIT at EUR 2.3m. We cut our H2 EBIT estimate all in all by EUR 4.0m to EUR
7.2m, reflecting Aspo’s cautious comments.

Strong rebound remains a possibility yet not imminent

It’s clear this year will be quite soft figurewise with ESL only beginning to
rebound in Q4. There’s thus clear upside relative to long-term estimates, yet in
our view given the prolonged pandemic uncertainty it takes a lot of conviction
to rely on that outlook. In terms of SOTP there’s potential with respect to the
’19 and ’20 average, however that approach relies on Telko’s FY ’20 improvement.
Our TP remains EUR 6, rating HOLD.

Open report


MARIMEKKO - Q2 RESULT BETTER THAN ANTICIPATED

13.08.2020 - 09.00 | Earnings Flash

Marimekko’s Q2 result beat the consensus expectations. Net sales were EUR 23.3m
(-20% y/y) vs. EUR 18.3m/19.8m Evli/cons. Adj. EBIT was clearly above estimates
at EUR 2.7m vs. EUR 0.6m/0.5m Evli/cons. Marimekko expects the coronavirus to
have a significant negative impact on net sales and profitability in 2020.
Guidance for ’20E was not given at this point.

Read more

 * Finland: revenue was EUR 11.4m vs. EUR 10.4m Evli view. Revenue decreased by
   32% (retail sales -41% y/y).
 * International: revenue declined by 3% y/y and was EUR 11.9m vs. EUR 7.9m Evli
   view. Retail sales declined especially in North America and Scandinavia.
   Wholesale sales decreased especially in the APAC region. On the other hand,
   increased licensing income in the Asia-Pacific region boosted sales.
 * Q2 adj. EBIT was EUR 2.7m (11.4% margin) vs. EUR 0.6m/0.5m (3.2%/2.7% margin)
   Evli/cons. Decreased net sales and weaker relative sales margin had a
   negative impact on profitability. On the other hand, fixed costs decreased
   significantly, resulting from the saving program.
 * Q2 EPS was EUR 0.27 vs. EUR 0.04/0.03 Evli/cons.
 * Marimekko is also planning to reorganize its operations and initiates
   cooperation procedure as the company seeks to achieve annual costs savings of
   approx. EUR 1.5m.
 * The company expects the coronavirus to have a significant negative impact on
   net sales and profitability in 2020 but guidance for ’20 was not given.

Open report


SUOMINEN - EXCEPTIONAL PERFORMANCE

13.08.2020 - 09.00 | Company update

Suominen’s Q2 was way above our estimates. The major question now is where gross
margin settles as the dance between nonwovens and raw materials prices plays
out. We have upgraded our estimates, our new TP is EUR 5.50 (4.75) and we retain
our BUY rating as multiples remain low.

Read more

Q2 performance was in our view exceptionally strong

Suominen posted EUR 122.2m in Q2 revenue (up 18% y/y and compared to our EUR
115.0m estimate), a record high despite lower nonwovens prices (reflecting soft
raw materials) as volumes grew considerably due to high wiping demand. Both
Americas and Europe did brisk volumes and posted revenues respectively at EUR
77.2m (up 19% y/y) and EUR 45.0m (up 16% y/y). Gross margin also increased
almost another 400bps q/q to 16.0%. We note this is a record figure (vs e.g.
14.7% GM back in Q3’14) and likely not sustainable long-term. Record revenue and
gross margin led to EUR 19.5m gross profit vs our EUR 14.4m estimate. SG&A and
R&D remained flat at EUR 7.8m and thus the EUR 12.4m EBIT trounced our EUR 6.8m
estimate.

We expect some softening in gross margin going forward

Suominen’s H1 was unexpectedly strong as improving product mix, production
efficiency and low raw materials prices led to big margin gains. The pandemic
also helped business as demand for wipes increased and Suominen was able to meet
the challenge. However, production volumes will be lower in H2 due to scheduled
maintenance stoppages at several plants. We nevertheless continue to see the
demand and volume outlook strong since the pandemic is unlikely to fade away
soon. With respect to profitability we expect the gross margin to have topped
out. We don’t expect significant downward correction in the short-term as
nonwovens and raw materials prices are in practice highly correlated. Given the
current price data we expect Q3 gross margin at 15% and Q3 EBIT thus at EUR
9.8m.

Multiples still quite reasonable on our updated estimates

Suominen also announced an EUR 8m investment in Cressa, Italy. The production
line upgrade will enhance capacity and seems a straightforward measure to
address growing demand. All in all, we see further upside potential despite
sharp rerating this year. On our updated estimates Suominen now trades slightly
below 6x EV/EBITDA FY ’20. Our new TP is EUR 5.50 (4.75), rating BUY.

Open report


SOLTEQ - OUR ESTIMATES CLEARLY BEAT

13.08.2020 - 08.30 | Earnings Flash

Solteq’s revenue in Q2 grew 7.8% in comparable terms to EUR 15.1m (Evli EUR
14.6m). The comparable operating profit clearly beat our expectations at EUR
1.5m (Evli EUR 0.5m) aided by cost savings from actions taken to improve
operational efficiency. Guidance reinstated: Solteq Group’s comparable operating
profit in 2020 is expected to grow significantly.

Read more

 * Net sales in Q2 were EUR 15.1m (EUR 14.7m in Q2/19), slightly above our
   estimates (Evli EUR 14.6m). Growth in Q2 amounted to 2.9% y/y. Comparable
   growth, adjusted for the divestment of the SAP ERP business, amounted to
   7.8%. Growth was attributable to both segments. Approximately a fifth of
   sales came from outside Finland.
 * The operating profit and adjusted operating profit in Q2 amounted to EUR 1.5m
   (EUR 0.6m in Q2/19), clearly above our estimates (Evli EUR 0.5m).
   Profitability was aided by cost savings resulting from streamlining measures
   taken earlier this year.
 * Capitalized product development investments during H1/20 amounted to EUR
   1.8m. Solteq expects product development investments in 2020 to amount to
   less than EUR 3.0m (2019: EUR 3.9m).
 * Solteq Digital: Comparable revenue in Q2 amounted to EUR 10.5m (Q2/19: EUR
   10.4m) vs. Evli 10.3m. The comparable EBIT amounted to EUR 1.1m (Q2/19: EUR
   0.5m) vs. Evli EUR 0.4m.
 * Solteq Software: Comparable revenue in Q2 amounted to EUR 4.6m (Q2/19: EUR
   4.3m) vs. Evli EUR 4.3m. The comparable EBIT amounted to EUR 0.4m (Q2/19: EUR
   0.0m) vs. Evli EUR 0.1m.
 * Solteq reinstated a guidance for 2020, expecting the comparable operating
   profit to grow significantly.

Open report


ASPO - MAJOR EARNINGS BEAT DUE TO TELKO

12.08.2020 - 10.40 | Earnings Flash

Aspo clearly beat estimates in terms of profitability, managing to post flat
EBIT despite a significant drop in revenue as Telko’s profitability proved a
huge positive surprise.

Read more

 * Aspo Q2 revenue amounted to EUR 115.6m vs EUR 130.5m/127.1m Evli/consensus
   estimates.
 * Q2 EBIT was EUR 4.1m, compared to the EUR 2.1m/2.0m Evli/consensus estimates.
   ESL and Leipurin underperformed relative to our estimates while Telko beat
   our EBIT estimate significantly.
 * ESL’s top line was EUR 32.9m while we expected EUR 40.1m. EBIT amounted to
   EUR 0.6m vs our EUR 1.6m expectation. Cargo volumes decreased to 3.0m tonnes
   (4.1m tonnes a year ago). Two-thirds of the volume decrease was due to steel
   industry and roughly one-third due to energy industry. Q3 result is expected
   to be weak.
 * Telko posted EUR 59.5m in Q2 revenue in comparison to our EUR 63.1m estimate.
   EBIT was EUR 4.2m while we had expected EUR 1.1m. Exceptional circumstances
   enabled highly active pricing, which temporarily increased margins. Gross
   margin is expected to decrease in H2 relative to Q2, but overall should
   improve slightly for FY ’20. Temporary cost measures will have a relatively
   significant impact in Q3 and FY ’20 profitability should be at the level of
   previous year.
 * Leipurin Q2 revenue amounted to EUR 23.2m vs our EUR 27.3m estimate.
   Meanwhile EBIT stood at EUR 0.3m in comparison to our EUR 0.6m expectation.
 * Other operations cost EUR 1.0m vs our EUR 1.2m estimate.
 * Aspo withdrew guidance in April and does not reinstate it for now.

Open report


SUOMINEN - CRUSHED OUR ESTIMATES

12.08.2020 - 09.55 | Earnings Flash

Suominen’s Q2 results wiped the table clean with our estimates.

Read more

 * Suominen Q2 revenue was EUR 122.2m while we had estimated EUR 115.0m. Revenue
   thus grew 18% y/y and reached a record on a quarterly basis. Nonwovens
   delivery volumes increased considerably while prices decreased following
   lower raw material prices.
 * Gross profit stood at EUR 19.5m vs our EUR 14.4m estimate. Gross margin was
   therefore 16.0% compared to our 12.5% expectation. While nonwovens prices
   decreased lower raw material and other direct product costs more than
   compensated.
 * Q2 EBIT amounted to EUR 12.4m compared to our EUR 6.8m expectation. EBIT thus
   more than quadrupled compared to year ago.
 * In terms of guidance Suominen expects 2020 comparable operating profit to
   improve significantly from 2019 (no change).

Open report


ETTEPLAN - STILL A BUMPY ROAD AHEAD

12.08.2020 - 09.30 | Company update

Ettplan’s timely actions to reduce costs saw EBIT remaining strong, at EUR 5.4m
(Evli/cons. EUR 3.2m/3.8m) despite the organic revenue decrease of 11.3%.
Challenges will continue in coming quarters but the hit from the pandemic so far
appears smaller than we had feared.

Read more

Timely cost reduction actions kept profitability strong
Etteplan reported Q2 results that were above expectations given the challenging
circumstances. Revenue was in line with expectations at EUR 62.9m (EUR
63.3m/63.3m Evli/cons.), decreasing 2.2% y/y and organically 11.3% y/y. EBIT was
clearly better than expected, at EUR 5.4m (Evli/cons. EUR 3.2m/3.8m).
Profitability was aided by timely actions made to reduce operating costs. With
operating costs declining faster than cash flow from sales, Etteplan posted an
exceptionally strong operating cash flow of EUR 18.0m (Q2/19: 8.8m). The
uncertainty in customer demand remains but we interpret comments by the company
pointing to expectations of some recovery in the second half of the year.
Etteplan reinstituted a guidance for 2020, expecting sales to light decrease
slightly or remain at 2019 levels and EBIT to decrease compared to 2019.

The hit to 2020 figures not as bad as feared based on H1
With the higher than anticipated reduction in operating expenses we adjust our
2020 EBIT estimate to EUR 18.1m (prev. 14.3m), while keeping our revenue
estimates largely intact. We expect 2020 revenue of EUR 258.3m for an estimated
organic decline of some 7%. Our estimates assume similar capacity decreases due
to temporary layoffs in Q3 as Q2 and roughly half the decrease in Q4. Visibility
into the coming years is weak but we expect to see Etteplan returning to growth
in 2021, as although a second wave of the pandemic may cause challenges, lessons
learned during the first wave should result in a lesser strain on both Etteplan
and customers.

HOLD with a target price of EUR 8.7 (8.3)
Based on our revised estimates we adjust our target price to EUR 8.7 (8.3), for
a 2020e P/E of ~16x, which we currently consider fair given the elevated
uncertainty. We retain our HOLD-rating.

Open report


ETTEPLAN - SURPRISINGLY GOOD PROFITABILITY

11.08.2020 - 13.30 | Earnings Flash

Etteplan's net sales in Q2 amounted to EUR 62.9m, in line with our estimates and
consensus (EUR 63.3m/63.3m Evli/cons.). EBIT amounted to EUR 5.4m, above our
consensus estimates (EUR 3.2m/3.8m Evli/cons.). Etteplan expects 2020 revenue to
decrease slightly or be at the same level as in 2019 and EBIT to decrease
compared to 2019.

Read more

 * Net sales in Q2 were EUR 62.9m (EUR 64.2m in Q2/19), in line with our and
   consensus estimates (EUR 63.3m/63.3m Evli/Cons.). Growth in Q2 amounted to
   -2.2% y/y, of which -11.3% organic growth.
 * EBIT in Q2 amounted to EUR 5.4m (EUR 5.8m in Q2/19), above our and consensus
   estimates (EUR 3.2m/3.8m Evli/cons.), at a margin of 8.6%.
 * EPS in Q2 amounted to EUR 0.16 (EUR 0.18 in Q2/19), above our and consensus
   estimates (EUR 0.09/0.09 Evli/cons.).
 * Engineering Solutions net sales in Q2 were EUR 35.9m vs. EUR 35.8m Evli.
   EBITA in Q2 amounted to EUR 3.7m vs. EUR 1.9m Evli. The MSI-% in Q2 was 57%
   compared to 57% in Q2/19.
 * Software and Embedded Solutions net sales in Q2 were EUR 15.2m vs. EUR 16.5m
   Evli. EBITA in Q2 amounted to EUR 1.7m vs. EUR 1.3m Evli. The MSI-% in Q2 was
   52% compared to 55% in Q2/19.
 * Technical Documentation Solutions net sales in Q2 were EUR 11.6m vs. EUR
   11.0m Evli. EBITA in Q2 amounted to EUR 1.0m vs. EUR 0.9m Evli. The MSI-% in
   Q2 was 79% compared to 75% in Q2/19.
 * Guidance given: Revenue for the full year 2020 will decrease slightly or be
   at the same level as in the previous year, operating profit (EBIT) will
   decrease compared to 2019 (prev. guidance withdrawn).

Open report


GOFORE - SIZEABLE ACQUISITION BOOSTING GROWTH

11.08.2020 - 09.15 | Company update

Gofore acquired software testing automation specialist Qentinel Finland Oy, with
some 100 employees, and specified its 2020 guidance. We now expect 2020 sales
growth of 17.2% and the adj. EBITA to improve to EUR 9.8m (2019: 8.0m). We
adjust our TP to EUR 8.4 (7.8), HOLD-rating intact.

Read more

Acquisition and guidance revision
Gofore announced the acquisition of Qentinel Finland Oy, a specialist in
software testing automation with roughly 100 employees and 2019 sales and EBIT
of EUR 12.0m and EUR 1.7m respectively. The debt-free purchase price is EUR 8.9m
and an additional purchase price has been agreed upon, expected to be EUR 1-2m,
with the deal estimated to be closed September 1st. EV/EBIT multiples of ~7.0x
on 2019 figures and upper range of the purchase price appear rather attractive
given the high profitability, with our peer group on 2020 estimates at a median
on 14.6x. Gofore specified its 2020 guidance in conjunction with the acquisition
announcement, with sales expected to be in the range of EUR 70-76m (prev. grow
from 2019) and adj. EBITA to grow compared with 2019. The sales impact of the
acquisition on 2020 figures is estimated at EUR 4m.

Expecting good H1 figures, acquisition boosting growth
Gofore reports H1 results on August 14th. H1 sales have been pre-announced at
EUR 37.4m, with the monthly figures in our view having shown little impact of
the pandemic. We see slightly weaker adj. EBITA-margins in H1 compared with the
solid 17.3% Q1 margins but still expect a commendable 14.7% adj. EBITA-%. We
expect full-year sales and adj. EBITA of EUR 75.1m and 9.8m respectively. The
acquisition should keep growth in the double-digits in 2021 assuming a continued
limited COVID-19 impact.

HOLD with a target price of EUR 8.4 (7.8)
Following revisions to our estimates based on the acquisition and guidance
revision we adjust our target price to EUR 8.4 (7.8), valuing Gofore at 16.5x
2020E adj. P/E, with our HOLD-rating intact.

Open report


PIHLAJALINNA - PANDEMIC HAMPERS NON-URGENT HEALTHCARE

10.08.2020 - 09.35 | Preview

Pihlajalinna reports its Q2’20E result on this week’s Friday, 14th of August. We
expect the COVID-19 and the movement restrictions have continued to hamper
Pihlajalinna’s business especially in April but the situation should have
started to normalize. The tender offer by Mehiläinen is still being under review
of the FCCA. We keep our rating “HOLD” and TP of EUR 16.0 intact.

Read more

Expecting weak demand in non-urgent healthcare

Pihlajalinna’s operations were heavily impacted by the emergency laws that came
into force in mid-March. We expect to see the most negative impacts in April as
especially the demand of non-urgent healthcare and oral healthcare started
rapidly to decrease in late March. The management indicated earlier in H1 that
the complete outsourcings and other fixed-priced invoicing have supported the
company during the unexceptional times as the profitability of these kinds of
contracts normally remains stable, even during times of lower demand. The demand
of housing services for the elderly and recruitment services should also remain
relatively stable.

Still waiting for the FCCA’s decision

We expect the customer flows have started slowly to recover. However, we expect
to see better improvement later in H2’E as the pent-up demand of social services
and non-urgent healthcare should normalize after the restrictions were lifted.
The visibility of H2E remains blurry and the demand is depended on the pandemic
situation. The tender offer by Mehiläinen is still being under review of the
FCCA and the second phase investigation should be ready by the end of August. If
approved, the process is expected to be completed during Q3’20E.

"HOLD” with TP of EUR 16.0

We have only made minor adjustments to our estimates. We expect Q2’20E revenue
of EUR 112.1m (-13.6% y/y) and adj. EBIT of EUR 0.2m (EUR 2.1m in Q2’19). We
expect 20E revenue of EUR 517m (-0.3% y/y) and adj. EBIT of EUR 22.3m (6.7%
y/y). We keep our rating “HOLD” and TP of EUR 16.0 intact.

Open report


SCANFIL - PROVEN RESILIENT RESULTS

10.08.2020 - 09.15 | Company update

Scanfil’s Q2 clearly beat our estimates. The company’s active plant network
management should help secure good profitability in the coming years even if the
pandemic will eventually begin to hurt business more. Our TP is now EUR 6.25
(5.25); we reiterate our BUY rating.

Read more

Communication and Energy & Automation up organically

Scanfil Q2 revenue was EUR 156m (up 9% y/y and of which two-thirds due to HASEC
i.e. mostly Industrial). Communication posted a 49% revenue surge. Business
jumped due to 5G networks but also e.g. camera surveillance systems. Energy &
Automation grew by 15% as many accounts drove growth. Industrial top line grew
by 17% mainly due to HASEC, yet also organically with e.g. KONE elevators.
Medtec & Life Science was flat. Consumer Applications demand fell as the
pandemic altered consumer behavior. The segment supplies e.g. TOMRA reverse
vending machines and Scanfil says many accounts cut business sharply in Q2,
leading to 26% y/y drop in revenue. Scanfil is however seeing signs of
stabilizing demand for the segment. The EUR 10.2m in Q2 EBIT (vs our EUR 8.7m
estimate) was more than satisfactory as Scanfil estimates the pandemic’s
effects’ net cost was EUR 0.8m in H1. The pandemic notably elevated freight and
safety costs. On the other hand, Scanfil also received state subsidies in
compensation for shortened working hours.

Fundamentally strong thanks to active plant management

We make minor estimate changes, mostly reflecting latest segment updates. We see
FY ’20 EBIT at EUR 40.4m. While FY guidance is likely to hold it’s early to say
much about next year. However, Scanfil’s Hamburg plant closure will further help
profitability going forward. Scanfil expects the decision to yield EUR 2.5m in
annual cost savings since two other nearby plants are in a better position to
serve the current Hamburg accounts. Scanfil also prunes its Chinese operations,
having sold the Hangzhou plant (sheet metal mechanics) and thus focusing on
Suzhou (electronics manufacturing and demanding integration).

In our opinion higher multiples are justified

The pandemic could begin to hurt volumes even if so far Scanfil’s overall levels
have not been impacted. Scanfil however remains valued at attractive levels, ca.
6.5x EV/EBITDA and 9.0x EV/EBIT on our FY ’20 estimates. Our new TP is EUR 6.25
(5.25), rating BUY.

Open report


ETTEPLAN - WEAKER RESULT TO BE EXPECTED

07.08.2020 - 09.00 | Preview

Etteplan reports Q2 results on August 11th. The coronavirus pandemic will have
had a detrimental impact on results, but we see a rapid adaption to have limited
some of the earnings impact. We expect an organic revenue decline of ~9% and
EBITA of EUR 4.1m. We retain our HOLD-rating with a TP of EUR 8.3 (8.0).

Read more

Weaker Q2 but rapid adaption should limit some downside
Etteplan will report Q2 results on August 11th. Earnings uncertainty is clearly
elevated due to the coronavirus pandemic, with Q1 challenges having been mainly
limited to operations in China. Etteplan adapted rapidly to the situation
through temporary layoffs and reducing its cost base which together with the
order backlog should according to our estimates still yield a fairly decent
profitability given the circumstances. We expect revenue of EUR 63.3m,
representing a perceived organic growth decline of approx. 9%, and group EBITA
to decline to EUR 4.1m (Q2/19: EUR 6.5m). With the loan agreements made earlier
we do not see any significant risk to Etteplan’s financial position.

Uncertainty remains elevated in 2020
The development in 2020 remains shrouded by uncertainty due to the pandemic but
we currently expect the biggest dent to be seen in Q3 and Q4 to also remain
weaker. The Engineering Solutions service area will have some challenging times
ahead while Software and Embedded Solutions should be rather resilient due to
digitalization demand. Reported new order values in Q2 for some key customers
indicate a double-digit decline y/y, with expectations of demand picking up
towards the end of the year. Etteplan’s customer base is relatively diverse and
thankfully for instance automotive and aviation, which have been hit hard by the
pandemic, account for only a small share of revenue.

HOLD with a target price of EUR 8.3 (8.0)
We have made minor upwards adjustments to our 2020 estimates following an in our
view somewhat improved sentiment post-Q1 and revisions based on updates on
temporary layoffs. We adjust our target price to EUR 8.3 (8.0) and retain our
HOLD-rating.

Open report


SCANFIL - CLEARLY TOPPED EXPECTATIONS

07.08.2020 - 08.40 | Earnings Flash

Scanfil’s Q2 clearly exceeded expectations. Revenue grew by 9% y/y and slightly
more than a third of the increase was organic, the rest being attributable to
the HASEC acquisition (mainly recognized in the Industrial segment).

Read more

 * Scanfil Q2 revenue was EUR 155.6m compared to the EUR 145.4m/147.0m
   Evli/consensus estimates. Scanfil says organic demand growth was especially
   strong in Communication and Energy & Automation.
 * Communication revenue amounted to EUR 28.9m vs our EUR 20.4m estimate.
 * Consumer Applications top line was EUR 20.3m compared to our EUR 26.2m
   expectation. Scanfil comments the pandemic has had an adverse effect on the
   segment’s demand.
 * Energy & Automation revenue was EUR 32.6m while we expected EUR 29.1m.
 * Industrial posted EUR 48.5m vs our EUR 43.2m estimate.
 * Medtec & Life Science revenue was EUR 25.3m compared to EUR 26.5m estimate.
 * Scanfil Q2 EBIT amounted to EUR 10.2m vs the EUR 8.7m/9.3m Evli/consensus
   estimates. Operating margin was therefore 6.5% while we had expected 6.0%.
 * Scanfil guides FY ’20 revenue in the EUR 580 – 620m range and sees adjusted
   EBIT at EUR 38 – 42m.

Open report


CAPMAN - EARNINGS IMPROVEMENT STORY STILL STRONG

07.08.2020 - 08.30 | Company update

CapMan’s Q2 results were better than expected on bottom-line figures. AUM growth
is seen to pick up with the establishment of the NRE III (target EUR 500m) and
Growth II funds (target EUR 85m). We have revised our 2020 EBIT estimate to EUR
9.4m (prev. 1.2m), with the solid 2021 earnings prospects intact.

Read more

EBIT beat from higher investment returns
CapMan’s delivered an upbeat Q2 earnings report. Q2 EBIT of EUR 4.1m beat our
expectations (Evli EUR 2.6m) following a clear recovery in investment returns.
Revenue amounted to EUR 8.7m, short of our expectations (Evli EUR 10.4m) due to
continued weaker Services business sales and somewhat soft management fees given
no new fund closings. AUM (EUR 3.2bn) continued to stall at near previous
quarter levels. AUM is seen to grow during H2 following the establishment of the
NRE III and Growth II funds, which combined could bring in near EUR 600m in
equity commitments. Investor demand for the new funds has according to CapMan
been strong.

Solid 2021 earnings prospects despite weak 2020
We continue to expect 2020 to be somewhat of a gap-year due to the weak start
but have raised our EBIT estimate to EUR 9.4m (prev. EUR 1.2m) mainly due to
higher expectations for investment returns. We expect a clear increase in
fee-based profitability in 2021 due to an increase in management fees from
fundraising during H2/20. Investment returns are also set to pick up clearly
after the challenging 2020. CapMan will re-organize its Service business (no
changes to CaPS) and Scala’s private placement business will be discontinued,
but the earnings impact is not seen to be notable. All in all, we see a clear
improvement in 2021 and expect an EBIT of EUR 33.7m.

BUY with a target price of EUR 2.20 (1.95)
The Q2 report in our view served to prove that CapMan remains on a healthy track
despite the elevated uncertainty of Q1 and with the solid earnings outlook 2021E
P/E of ~11x is not particularly challenging. We retain our BUY-rating with a TP
of EUR 2.20 (1.95).

Open report


SUOMINEN - PROFITABILITY OUTLOOK IS NOW STRONG

06.08.2020 - 09.40 | Preview

Suominen reports Q2 results on Wed, Aug 12. We have slightly lowered our revenue
estimates due to a currency headwind, while on the other hand we now expect
gross margin to have improved modestly q/q also in Q2. Our new TP is EUR 4.75
(4.25), and thus we reiterate our BUY rating.

Read more

Raw materials prices imply gross margin should hold high

Suominen posted a big gross margin jump in Q1 as the figure gained almost 400bps
q/q to 12.1%. Improved product mix and production efficiency as well as low raw
materials prices fueled the rise. Moreover, Suominen upgraded FY ’20 outlook in
June by changing the wording from clear to significant improvement in comparable
EBIT. The update had only a minor impact on our estimates since we changed our
FY ’20 EBIT estimate from EUR 23.1m to EUR 24.0m. Perhaps more important was the
fact that Suominen removed the previous disclaimer according to which estimating
the result for H2 was hard due to the pandemic. It seems Suominen’s strategy is
proceeding according to plan and financial performance is on a solid upward
trend thanks to strong outlook for value-add end-uses such as household and
workplace wipes. With respect to raw materials prices Suominen is unlikely to
suffer cost inflation pressure for a while. We see the outlook for pulp prices
muted, while the same is only true at best for oil-based inputs polyester and
polypropylene. In fact, raw materials prices have developed so soft Suominen
faces some negative pressure on nonwovens pricing. We expect gross margin
further improved modestly to 12.5% in Q2, and see the figure settling on this
level in the short-term.

Recent dollar weakness a (small) negative for top line

The dollar has lately declined by some 5% against the euro, the implication
being a negative translation impact on US revenue. We update our estimates to
reflect the headwind, which we estimate at some EUR 10m on an annual level. The
overall result of our update is that we now estimate Q2 EBIT at EUR 6.8m
(previously EUR 6.2m). We now see FY ’20 EBIT at EUR 24.4m.

Multiples are low while figures are on a solid trend up

Suominen trades some 6x EV/EBITDA on our estimates for this year while the
multiple for next year is about 5.5x. We view these multiples attractive now
that profitability is on a steep improvement path. Our TP is now EUR 4.75
(4.25), remain BUY.

Open report


CAPMAN - BACK TO HEALTHY PROFITABILITY

06.08.2020 - 09.00 | Earnings Flash

CapMan's net sales in Q2 amounted to EUR 8.7m, below our and consensus estimates
(EUR 10.4m/10.6m Evli/cons.). Profitability was better than expected due to
larger fair value changes and EBIT amounted to EUR 4.1m, above our estimates and
above consensus estimates (EUR 2.6m/2.5m Evli/cons.).

Read more

 * Revenue in Q2 was EUR 8.7m (EUR 13.4m in Q2/19), below our estimates and
   consensus estimates (EUR 10.4m/10.6m Evli/Cons.). Growth in Q2 amounted to
   -35 % y/y.
 * Operating profit in Q2 amounted to EUR 4.1m (EUR 5.8m in Q2/19), above our
   estimates and consensus estimates (EUR 2.6m/2.5m Evli/cons.), driven by
   higher than expected fair value changes.
 * EPS in Q2 amounted to EUR 0.02 (EUR 0.02 in Q2/19), above our estimates and
   consensus estimates (EUR 0.01/0.01 Evli/cons.).
 * Management Company business revenue in Q2 was EUR 6.5m vs. EUR 7.2m Evli.
   Operating profit in Q2 amounted to EUR 1.6m vs. EUR 2.0m Evli.
 * Investment business revenue in Q2 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q2 amounted to EUR 2.8m vs. EUR 0.1m Evli. Fair value changes
   amounted to EUR 3.2m (Evli EUR 0.8m)
 * Services business revenue in Q2 was EUR 2.2m vs. EUR 3.2m Evli. Operating
   profit in Q2 amounted to EUR 0.5m vs. EUR 1.5m Evli.
 * Capital under management by the end of Q2 was EUR 3.2bn (Q2/19: EUR 3.3bn).
   Real estate funds: EUR 1.9bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.3bn, and other funds: EUR 0.03bn.
 * CapMan Growth established a new growth fund with a target size of EUR 85m,
   having so far raised EUR 74m.

Open report


DETECTION TECHNOLOGY - CONTINUED AIR TURBULENCE AHEAD

05.08.2020 - 09.30 | Company update

Detection Technology delivered a decent Q2 operating result despite the
significant drop in net sales due to the ongoing corona pandemic. Medical
business is going strong, but challenging situation in aviation segment weighs
on SBU and visibility into how long situation will continue is poor. Although
2020E will be challenging, we see that DT is well positioned to weather out the
storm and its competitive position with its new products remains good. We
maintain our target price of 22 euros and BUY recommendation.

Read more

Decent quarter considering circumstances

Given the ongoing pandemic affecting especially DT’s security business, DT
delivered a decent and broadly in-line Q2 operating result despite a quite
significant drop in net sales. Q2 net sales amounted to EUR 21.1m (-23.2% y/y)
vs. EUR 25m/25.3m Evli/consensus estimates. Q2 EBIT was EUR 2.6m (12.3% margin)
vs. EUR 1.9m/3.0m Evli/cons. R&D costs amounted to EUR 2.7m or 12.7% of net
sales (Q2’19: 2.9m, 10.7%). SBU had net sales of EUR 11.2m vs. EUR 15.2m Evli
estimate. SBU sales declined -42.1% y/y, mainly due the COVID-19 pandemic
affecting the demand for security X-ray devices. MBU delivered net sales of EUR
9.9m which was in line with our estimate of EUR 9.8m. Net sales of MBU increased
by +22.5% y/y due to continued strong demand in medical CT imaging.

Short term visibility poor with aviation segment weighing on SBU

DT continues to expect lower demand in the security segment to continue in Q3
and SBU sales to decrease in 2020. DT however sees SBU sales starting to improve
towards end of the year. DT estimates airport CT standard equipment upgrades in
Europe and U.S. to be postponed at least 12 months. Regarding China, it remains
unclear when similar Chinese airport standardization will start and if any
security infrastructure related government recovery measures will take place.
The situation regarding aviation remains the biggest near-term uncertainty for
DT. We estimate aviation to contribute roughly half of SBU net sales. That said,
-42% drop in SBU Q2 net sales is a relatively good performance given that
aviation grinded almost completely to a halt in Q2. MBU sales growth is expected
to continue in H2, although product mix is likely to shift from basic CT devices
to more high-end devices, which should support MBU margins further.

Maintain BUY recommendation with TP of 22 euros

Based on the report, we have trimmed our 2020E sales and EBIT estimates by 7%
and 4% respectively. We expect SBU sales to decline -23,5% from last year’s
highs and MBU to grow +18%, resulting in 2020E net sales to decline -10% and
EBIT of 12.5 MEUR. We have increased our sales growth estimates for 2021-22E to
account for postponement of CT standardization related upgrades. On our revised
estimates, DT is trading at 19.8x and 13.6x EV/EBIT multiples for 20-21E, some
10-20% below our peer group now that peer multiples have rerated since DT’s Q1
report. Although 2020E will be challenging, we see that DT is well positioned to
weather out the storm and its competitive position with its new products remains
good. Therefore, we continue to see DT as an attractive investment story given
the strong longer-term drivers, especially in China, as well as DT’s compelling
strategy and execution capabilities. We maintain our target price of 22 euros
and BUY recommendation. Our target price implies EV/EBIT multiple of 16.4x on
our 21E estimates, which is still ~7% below peer group.

 

Open report


DETECTION TECHNOLOGY - DECENT RESULT DESPITE COVID HAMMERING NET SALES LOWER
THAN EXPECTED

04.08.2020 - 09.30 | Earnings Flash

DT’s Q2 net sales were EUR 21.1m (-23.2% y/y) vs. EUR 25m/25.3m Evli/consensus
estimates. SBU sales declined -42.1% to EUR 11.2m (EUR 15.2m our expectation)
and MBU sales increased +22.5% to EUR 9.9m (EUR 9.8m our expectation). DT’s Q2
EBIT came in at EUR 2.6m vs. our estimates of EUR 1.9m (EUR 3.0m cons). DT
continues to expect SBU sales to decrease and MBU sales to increase in 2020.

Read more

 * Group level results: Q2 net sales amounted to EUR 21.1m (-23.2% y/y) vs. EUR
   25m/25.3m Evli/consensus estimates. Q2 EBIT was EUR 2.6m (12.3% margin) vs.
   EUR 1.9m/3.0m Evli/cons. R&D costs amounted to EUR 2.7m or 12.7% of net sales
   (Q2’19: 2.9m, 10.7%).
 * Security and Industrial Business Unit (SBU) had net sales of EUR 11.2m vs.
   EUR 15.2m Evli estimate. SBU sales declined -42.1% y/y, mainly due the
   COVID-19 pandemic. DT continues to expect that security market will not
   return to growth path this year (same guidance in Q1’20).
 * Medical Business Unit (MBU) delivered net sales of EUR 9.9m which was in line
   with our estimate of EUR 9.8m. Net sales of MBU increased by +22.5% y/y due
   continued strong demand in medical CT imaging. DT expects MBU sales growth to
   continue in the second half driven by the demand in CT applications.
 * No change in medium-term targets; at least 10% net sales growth, EBIT margin
   at or above 15%.

Open report


TALENOM - STEADILY THROUGH THE PANDEMIC

04.08.2020 - 09.00 | Company update

Talenom’s Q2 results fell slightly shy of expectations, with the coronavirus
pandemic having had some impact on transaction-based invoicing volumes, but
relative profitability remained solid. Talenom’s potential remains unchanged,
which has been reflected in its share price and valuation is becoming rather
stretched. We retain our HOLD-rating with a target price of EUR 8.5 (7.0).

Read more

Minor impact from COVID-19 but profitability still strong
Talenom’s Q2 results fell slightly shy of expectations, with revenue of EUR
16.5m (EUR 17.2m Evli/cons.), affected by a decrease in transaction-based
invoicing in for instance payroll services due to customer layoffs. EBIT
amounted to EUR 3.6m (EUR 3.7m Evli/cons.) and relative profitability remained
on par with expectations, with an EBIT-margin of 21.8%. The new small customer
concept is expected to be released later on in the year and long-term potential
expectations appear to be high. The impacts of the coronavirus overall have been
quite in line with company expectations.

Continued growth and profitability improvement in 2020
Talenom’s guidance for 2020 (net sales EUR 64-68m, EBIT 12-EUR 14m) remains
intact and should in our view not be in jeopardy unless a clearly unfavourable
development in transaction-based invoicing volumes is seen during H2. We expect
net sales of EUR 66.3m and EBIT of EUR 12.4m. Growth potential remains intact,
with emphasis seen to be shifting towards M&A and Sweden as well as smaller
customers as regional coverage in Finland limits growth. We assume a relative
lower profitability of potential acquisitions to limit some margin upside in the
coming years.

HOLD with a target price of EUR 8.5 (7.0)
Talenom’s share price has risen to record-high levels, with the stability of the
business providing benefits under current market uncertainty and valuation
levels are becoming harder to justify. We raise our target price to EUR 8.5
(7.0), valuing Talenom at ~40x 2020E P/E, which we still consider reasonable
given growth potential and the defensive nature. Our rating remains HOLD.

Open report


TALENOM - QUITE IN LINE WITH EXPECTATIONS

03.08.2020 - 14.00 | Earnings Flash

Talenom's net sales in Q2 amounted to EUR 16.5m, slightly below our and
consensus estimates (EUR 17.2m Evli/cons.). EBIT amounted to EUR 3.6m, in line
with our and consensus estimates (EUR 3.7m Evli/cons.). Guidance remains intact,
net sales for 2020 are expected to amount to EUR 64-68m and operating profit to
EUR 12-14m.

Read more

 * Net sales in Q2 were EUR 16.5m (EUR 14.8m in Q2/19), slightly below our and
   consensus estimates (EUR 17.2m Evli/Cons.). Growth in Q2 amounted to 11.8%
   y/y.
 * Operating profit in Q2 amounted to EUR 3.6m (EUR 3.2m in Q2/19), in line with
   our and consensus estimates (EUR 3.7m Evli/cons.), at a margin of 21.8%.
 * EPS in Q2 amounted to EUR 0.06 (EUR 0.05 in Q2/19), in line with our and
   consensus estimates (EUR 0.06/0.07 Evli/cons.).
 * Sales and relative profitability in Q2 were affected by lower
   transaction-based invoicing and lower relative profitability of acquired
   businesses.
 * New sales have continued in the upper range of company expectations but below
   targets set before the coronavirus pandemic. Customer business defaults
   during Q2 developed as expected while transaction-based invoicing has been in
   the lower range of company estimates.
 * Guidance intact: Net sales for 2020 are expected to amount to EUR 64-68m and
   operating profit to EUR 12-14m.

Open report


TOKMANNI - DISCOUNT RETAIL REFLECTS THE UNCERTAIN TIMES

30.07.2020 - 09.35 | Company update

Tokmanni had a successful Q2 as sales grew by 19.2% y/y to EUR 286m. Adj. EBIT
amounted to EUR 30.6m (~64% y/y). The good momentum is expected to continue
throughout 20E. We keep our rating “BUY” with TP of EUR 18.4 (16.4).

Read more

Benefiting from the lockdown

Tokmanni continued its solid growth in Q2 with sales totaling EUR 286m, growth
of 19.2% y/y (LFL growth of 17.5% y/y). This also beat the revenue growth of
department store and hypermarket chains (10.7%, FGTA). Revenue was driven by
attractive pricing and growth was strong especially in leisure, gardening, home
improvement products and food products, reflecting the situation where people
are spending more time at home. At the same time, the demand in clothing was
weaker. Tokmanni’s adj. gross margin was 34.5% (35.2% in Q2’19) vs. our 34.1%.
The drop was due to cheaper prices and unusual structure of sales. Adj. EBIT
totaled EUR 30.6m vs. EUR 30.9m/28.5m Evli/cons.

The success story expected to continue in H2E

Supported by the broad product assortment, attractive pricing and a wide store
network, Tokmanni benefited from the situation where people are spending more
time at home. On the other hand, the sales structure has been different compared
to the normal conditions and the weaker share of Tokmanni’s private labels
weighed down adj. gross margin. As the situation is now recovering and people
are likely to return back to the offices we expect somewhat normalizing growth
in H2E. We expect the sales structure to move closer to normal which supports
margin development. The cost control has been successful and this is expected to
continue. Tokmanni has also taken precautions to secure its most important
season, Christmas (import from China has a key role) and some products are
already being shipped to Finland, which is earlier than normally. The company
reduced its investments during Q2 but these will continue relatively normally in
H2E. Capex in 20E is expected to be EUR ~15m.

“BUY” with TP of EUR 18.4 (16.4)

Tokmanni expects strong growth in revenue and LFL revenue in 20E. Adj. EBIT
margin is expected to increase from 2019. We have further increased our
estimates and we expect 20E sales growth of 9.5% y/y (EUR 1034m) and adj. EBIT
margin of 8.8% (EUR 90.6m). On our estimates, Tokmanni trades at 20E-21E EV/EBIT
multiple of 14.7x and 14.0x, which translates into 22-25% discount compared to
the int. discount peers. We keep our rating “BUY” with TP of EUR 18.4 (16.4).



Open report


DETECTION TECHNOLOGY - CHALLENGING QUARTER AHEAD

30.07.2020 - 09.15 | Preview

Detection Technology will report Q2 earnings next Tuesday, August 4th at 9:00
EEST. DT’s share price has been lagging the market due to its exposure to
aviation segment, but we see the overall investment case intact. We maintain our
target price of 22 euros and BUY recommendation ahead of the Q2 result.

Read more

Expecting declining sales and operating profit due to weakened demand in SBU

We expect Q2 net sales to decrease -9% to 25 MEUR (25,3 MEUR cons.) due to lower
SBU sales affected by the pandemic. For Q2, we estimate SBU declining -21,6% as
demand in security applications is lower due to COVID-19. We expect MBU growing
21% with the help of increased demand in medical CT solutions. Due to lower net
sales, our Q2 EBIT estimate is 1,9 MEUR (3,0 MEUR cons), which is down -60%
compared to 4,8 MEUR last year.

Focus on market outlook and situation in China

Our focus in the Q2 result will be on management’s comments on the outlook for
both security and medical imaging markets, as well as hearing the latest
developments in China. DT has indicated that it expects healthy demand in MBU
for Q2 and H2, whereas SBU sales are expected to decrease in Q2 and FY20.
Looking at other industries, we note that Chinese market has been first to
recover after the pandemic resided. That said, there is still a lot of
uncertainty related to aviation, which is a crucial part of DT’s security
business, accounting for roughly 2/3 of DT’s net sales. DT saw positive signs in
demand for medical CT solutions at the end of Q1 (after a slowdown around end of
2019), stemming from CT imaging being used to detect pulmonary changes caused by
the COVID-19 virus, as well as diagnosis and treatment of patients.

DT’s share price has been lagging the market, we see investment case intact

DT’s share price is YTD -23% vs. -5% HEX25, and since mid-March +26% vs. +41%
HEX25. We see this relating to SBU’s exposure to aviation segment. Although
2020e will be challenging, we see DT well positioned to weather out the storm
and its competitive position with its new products remaining good, thus
investment case is intact. We maintain our target price of 22 euros and BUY
recommendation ahead of the Q2 result.

Open report


INNOFACTOR - ON TRACK DESPITE THE PANDEMIC

29.07.2020 - 09.30 | Company update

Innofactor posted solid Q2 profitability figures, with EBITDA at EUR 2.1m (Evli
1.1m) for a 12.3% EBITDA-margin. We assume a slightly weaker H2 due to the
coronavirus pandemic, but progress made supports the long-term case. Our
2020-2022 EBITDA estimates are up some 20% post-Q2. We raise our TP to EUR 1.35
(0.95) with our BUY-rating intact.

Read more

Delivered a positive earnings surprise
Innofactor delivered a pleasant surprise in second quarter profitability
figures, with EBITDA of EUR 2.1m clearly topping our estimates (Evli EUR 1.1m).
Net sales grew 0.6% y/y to EUR 16.8m (Evli 16.6m). Net sales in the other Nordic
countries developed somewhat unfavourably due to the coronavirus pandemic,
resulting in negative EBITDA figures for their part, while Finland continued
strong. The impact of the pandemic was still not as large as the company had
anticipated. The order backlog continued y/y and q/q growth, up to EUR 56.9m
(Q2/19: 44.2m).

Profitability development on a solid track
We have raised our 2020E EBITDA estimate to EUR 7.2m (prev. EUR 5.9m) and our
2021-2022E estimates by ~20%. We expect some margin decline in H2 compared to H1
due to the pandemic given slower sales development, although cost base
reductions due to travel restrictions should ease some of the pressure. Our
sales growth assumptions in 2021-2022 remain modest (avg. 3.5% p.a.) given the
company target (~20% p.a.), with limited signs of more rapid pick-up in growth.
Innofactor acquired the remaining ~55% of shares in Arc Technology and with the
improved cash flows we expect likely further M&A activity to boost growth.

BUY with a target price of EUR 1.35 (0.95)
Innofactor’s share price has rallied some 40% since our previous update in May
but on our revised estimates and peer multiples we still see upside in
valuation. On our revised estimates we adjust our target price to EUR 1.35
(0.95), for an implied 2020 EV/EBITDA of 8.7x and retain our BUY-rating.

Open report


TOKMANNI - ACTIONS TAKEN IN Q2 WERE SUCCESSFUL

29.07.2020 - 09.05 | Earnings Flash

Tokmanni’s Q2 revenue increased by 19.2% (LFL growth of 17.5%) and was EUR 286m.
Tokmanni’s adj. EBIT was EUR 30.6m vs. EUR 30.9m/28.5m Evli/cons. Adj. gross
margin was 34.5%. The company expects strong growth in revenue and LFL revenue
in 20E. Comparable EBIT margin is expected to improve on the previous year.

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 * Q2 revenue grew by 19.2% and was EUR 286m. The preliminary figures were
   already given earlier thus there were no surprises with the sales
   development. The increase in sales of leisure, gardening and home improvement
   products and food products was particularly strong in Q2.
 * Q2 adj. gross profit was EUR 98.6m (34.5% margin) vs. EUR 97.5m (34.1%) Evli
   expectation. Adj. gross margin fell from last year due to strong sales
   program and unusual sales structure.
 * Q2 adj. EBITDA was EUR 46.7m vs EUR 46.9m our view.
 * Q2 adj. EBIT was EUR 30.6m (10.7% margin) vs. EUR 30.9m (10.8%) our
   expectation and EUR 28.5m (10.0%) consensus.
 * Q2 eps was EUR 0.38 vs EUR 0.38/0.35 Evli/consensus
 * Guidance for 20E: strong growth in revenue and like-for-like revenue.
   Profitability (comparable EBIT margin) is expected to improve on the previous
   year.

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INNOFACTOR - CONTINUED GOOD PROFITABILITY

28.07.2020 - 09.30 | Earnings Flash

Innofactor’s Q2 results were above our expectations and profitability remained
at a good level. The net sales in Q2 amounted to EUR 16.8m (Evli EUR 16.6m),
while EBITDA amounted to EUR 2.1m (Evli EUR 1.1m). Guidance remains intact. The
impact of the coronavirus pandemic was limited but EBITDA in Sweden, Norway and
Denmark fell in the red due to lowered sales.

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 * Net sales in Q2 amounted to EUR 16.8m (EUR 16.7m in Q2/19), in line with our
   estimates (Evli EUR 16.6m). Net sales in Q2 grew 0.6% y/y.
 * EBITDA in Q2 was EUR 2.1m (EUR 1.1m in Q2/19), clearly above our estimates
   (Evli EUR 1.1m), at a margin of 12.3%. EBITDA was clearly positive in Finland
   but somewhat negative in the other countries due to smaller than expected net
   sales due to the coronavirus pandemic.
 * Operating profit in Q2 amounted to EUR 0.9m (EUR 0.2m in Q2/19), clearly
   above our estimates (Evli EUR 0.0m), at a margin of 5.3%.
 * Order backlog at EUR 56.9m, up 28.8% y/y. Innofactor received several
   significant orders during the quarter and the order backlog improved q/q.
 * Guidance intact: Innofactor’s net sales and EBITDA in 2020 are estimated to
   increase compared to 2019.
 * The impact of the coronavirus pandemic on the second quarter was smaller than
   the company had previously expected. The pandemic lowered sales in Sweden,
   Norway and Denmark in the second quarter. Impact of the pandemic on Group net
   sales and profitability expected to be small during the rest of 2020. The
   company estimates a possibility that it will not achieve comparable net sales
   growth in Q3 as in Q1 and Q2.

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FINNAIR - SLOW RECOVERY AHEAD

27.07.2020 - 09.35 | Company update

Finnair’s April-June revenue decreased by 91% y/y (EUR 69m) while adj. EBIT
totaled EUR -174m. Flights are slowly recovering in Europe and Asia but the
costs related to the ramp-up will increase H2E comparable operating loss. We
keep our rating “HOLD” with TP of EUR 0.50 (0.60).

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Heavy losses during Q2
Finnair’s Q2 result was weak as expected. April-June passenger numbers were down
by ~98% y/y. Revenue declined by ~91% y/y and was EUR 69m vs. EUR 54m/49m
Evli/consensus. Adj. EBIT was EUR -174m vs. EUR -177m/-179m Evli/consensus. ASK
decreased by ~97% y/y and PLF was 33.1% (-49.4pp). Finnair’s revenue in the
second quarter was greatly supported by the cargo business, which generated more
than 70% of the revenue. The company reiterated its previous guidance (20E
revenue will decline significantly compared to the previous year and the
comparable operating loss will be significant). Revenue guidance for Q3E was not
given. However, the comparable operating loss in Q3E will be of a similar
magnitude than in Q2, due to clearly reduced capacity and costs related to the
ramp-up.


Slowly recovering
The historically gloomy quarter is now behind and Finnair is slowly recovering
its flights as travel restrictions in many European and Asian countries are
gradually being lifted. In July, the company operates approx. 25% of its normal
amount of flights. The estimated level in September is approx. 50%. The current
traffic plan might change based on the pandemic situation and changes in the
country specific restrictions. Finnair’s cargo business has increased its
importance during this time and especially on Asian long-haul routes, the
profitability is supported by the cargo business thus the good development of
freight supports the launch of passenger flights. The company has been able to
improve its cash position due to the rights offering proceeds of approx. EUR
500m (wasn’t fully booked by the end of June) and EUR 200m instalment of the EUR
600m statutory pension premium loan which was drawn in June.


“HOLD” with TP of EUR 0.50 (0.60)
Based on the new information we have further cut our estimates. We expect 20E
revenue of EUR 1497m and adj. EBIT of EUR -503m. We highlight that the
visibility remains very weak and there are significant uncertainties also with
our 21E-22E estimates. We keep our rating “HOLD” with TP of EUR 0.50 (0.60).

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CONSTI - UPGRADE TO BUY

27.07.2020 - 09.00 | Company update

Consti’s Q2 operating profit of EUR 2.4m was better than expected (Evli/cons.
1.8m/1.4m) and free cash flow and financial position improved clearly. The
coronavirus pandemic has and will have some impact on demand in 2020 but the
long-term demand situation remains favourable and the company now appears to be
in good shape after recent year challenges. We upgrade our rating to BUY (HOLD)
with a target price of EUR 10.0 (7.4).

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Q2 profitability better than expected
Consti’s Q2 results were better than expected, as although the revenue of EUR
69.3m came in around expectations (Evli/cons. 68.5m/70.3m), the operating profit
of EUR 2.4m clearly exceeded expectations (Evli/cons. EUR 1.8m/1.4m). The order
intake in the quarter was also favourable, with new orders of EUR 66.8m, and the
order backlog continued on a slight upwards trend since the end of 2019. Free
cash flow in the quarter (EUR 8.1m) was exceptionally strong, boosting the
rolling 12-month cash conversion ratio to 133.5%. As a result, net debt excl.
IFRS 16 improved to EUR 8.3m (2019: 15.3m).

Company in good shape after previous year challenges
Consti’s Q2 report was clearly positive and following measures taken during the
past years and management comments the company now appears to be in good shape.
We expect sales to continue to decline y/y in H2 due to stricter bidding
discipline but for profitability to continue to improve as a result of the
healthier order backlog. The coronavirus pandemic has and will in our view have
a slight impact on the demand situation during the year, but long-term demand
drivers remain intact.

BUY (HOLD) with a target price of EUR 10.0 (7.4)
We have raised our 2020 EBIT estimate by 10% and slightly raised our 2021-2022
profitability estimates. With the higher profitability as well as cash flow and
net debt improvements, possible near-term risks from the coronavirus pandemic
and St. George arbitration proceedings are reduced. We raise our target price to
EUR 10.0 (7.4) and upgrade our rating to BUY (HOLD).

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VERKKOKAUPPA.COM - EXPECTING NORMALIZING GROWTH IN H2

27.07.2020 - 08.40 | Company update

Verkkokauppa.com benefited from the lockdown and was able to increase its Q2
sales by ~14% y/y. At the same time profitability development was strong as adj.
EBIT totaled EUR 4.8m (EUR 0.2m in Q2’19). We keep our rating “BUY” with TP of
EUR 6.3 (6.2).

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Strong growth in both, revenue and profitability
E-commerce took a big leap during H1 as consumers moved online quickly once the
movement restrictions came into force. This boosted Verkkokauppa.com’s Q2
result. Sales were up by ~14% y/y (EUR 123m), outpacing the consumer electronics
market growth of ~9% (GfK). Adj. EBIT totaled EUR 4.8m (Q2’19: EUR 0.2m) and was
driven by improved gross margin (17.4% vs. our 16.4%). The improvement in gross
margin was due to the sales mix, improvements in category management and
declining wholesale sales. The preliminary Q2 figures were already given in
connection with the positive profit warning issued last week thus there were no
surprises with the result. The company expects 20E revenue of EUR 520-545m and
adj. EBIT of EUR 13-18m.


Expecting normalizing demand in H2
It is clear that Verkkokauppa.com has benefited from the epidemic situation. The
company has a low cost base which is supported by small physical footprint and
that has been a major advantage during this time. Category management has been
successful and as the demand of consumer electronics has increased, the
competition hasn’t probably been as price-driven as normally. On the other hand,
we expect that the strong growth in demand of consumer electronics during H1
will be shown as weaker sales growth and profitability development in H2E. Thus,
we see this only as a momentary market change. In addition, consumers are likely
to become more price aware, especially ahead of the campaign season in Q4 which
will add pressure on margins.


“BUY” with TP of EUR 6.3 (6.2)
We have kept our estimates largely intact and expect 20E revenue of EUR 535m and
adj. EBIT of EUR 17.1m. Thus, our estimates are at the higher end of the given
guidance. On our estimates, Verkkokauppa.com trades at 20E-21E EV/sales multiple
of 0.4x, ~17% below its online-focused Nordic & European peers. We keep our
rating “BUY” with TP of EUR 6.3 (6.2).

Open report


FINNAIR - UGLY Q2, AS EXPECTED

24.07.2020 - 09.50 | Earnings Flash

Finnair’s Q2’20 adj. EBIT was EUR -174m vs. our expectation of EUR -177m and
consensus of EUR -179m. Revenue decreased by 91% and was EUR 69m vs. our
expectation of EUR 54m and consensus of EUR 49m.

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 * Q2 revenue was EUR 69m vs. EUR 54m/49m Evli/cons.
 * ASK decreased by 97.2% y/y in Q2. PLF was 33.1% (-49.4 points).
 * Q2 adj. EBIT was EUR -174m vs. EUR -177m/-179m Evli/cons. Q2 comparable
   EBITDA was EUR -89m vs. EUR -91m our view.
 * Absolute costs in Q2: Fuel costs were EUR 33m vs. EUR 14m our view. Staff
   costs were EUR 48m vs. EUR 37m our view. All other OPEX+D&A combined were EUR
   173m vs. EUR 180m our view.
 * Unit costs: CASK was 70.5 eurocents vs. 67.1 eurocents our view.
 * Q2 EPS was EUR -0.25 vs. EUR -0.12/-0.12 Evli/cons.
 * In Q3, Finnair gradually increases its capacity and will operate ~25% of
   flights in July compared to the same period in 2019. Based on the current
   assumption, the share of flights operated increases to ~50% in September.
   There are uncertainties relating to COVID-19 development and lifting of
   travel restrictions. As a result, the outlook remains unclear and the company
   does not provide revenue guidance for Q3.
 * Finnair reiterates its previous guidance and states that the revenue will
   decrease significantly in 2020 compared to 2019 and that the comparable
   operating loss will be significant in the financial year 2020. In addition,
   Finnair's capacity will decrease significantly this year compared to 2019.

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VERKKOKAUPPA.COM - RESTRICTIONS BOOSTED Q2 RESULT

24.07.2020 - 09.15 | Earnings Flash

Verkkokauppa.com’s Q2’20 result was extremely strong. The report did not offer
surprises as the company issued a positive profit warning and released
preliminary information on April-June figures earlier this week. Revenue grew by
14.1% and was EUR 123m. Gross profit was EUR 21.4m (17.4% margin) vs. our EUR
20.2m (16.4% margin). Adj. EBIT was EUR 4.8m (3.9% margin). 2020E guidance: The
company expects revenue to be EUR 520-545m and comparable operating profit to be
EUR 13-18m.

Read more

 * Q2 revenue grew by 14% to EUR 123m. Revenue growth in Q2 was driven by strong
   online sales, positive performance in mid-sized and evolving categories, and
   successful marketing that resulted in increased online traffic.
 * Q2 gross profit was EUR 21.4m (17.4% margin) vs. EUR 20.2m (16.4% margin)
   Evli view. Gross margin improved due to good sales improvement in higher
   margin categories, improvements in category management and declining sales in
   lower margin wholesale.
 * Q2 adj. EBIT was EUR 4.8m (3.9% margin) and improved as a result of strong
   sales and improved gross margin.
 * Verkkokauppa.com updated its guidance on 21 July 2020, and estimates 2020E
   revenue to be between 520-545 million euros and comparable operating profit
   to be between 13-18 million euros.

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RAUTE - UNCERTAINTY CONTINUES TO RUN HIGH

24.07.2020 - 09.15 | Company update

Raute reported Q2 results below our expectations. We turn slightly more cautious
as uncertainty remains quite elevated. Our TP is now EUR 20 (21), rating HOLD
(BUY).

Read more

Uncertainty is high as many regions grapple with the crisis

Raute posted EUR 24m in Q2 revenue vs our EUR 29m estimate. Services revenue was
as expected (EUR 10m) while project deliveries were EUR 5m below our EUR 19m
expectation. Russian revenue, at EUR 12m, was EUR 7m lower than we estimated,
and the low figure is explained by order book timing with regards to the large
EUR 58m Russian order to be delivered mostly this year. Order book timing as
well as the pandemic (which complicated installations and services) meant
profitability was weak also in Q2 as the company recorded EBIT at EUR -1.0m vs
our EUR 1.3m estimate. Order intake, at EUR 13m, was also lower than we expected
(EUR 19m) and was due to softness in both machinery and services orders. Order
intake declined by half y/y as the pandemic postponed project decisions. Russian
orders were lower in Q2 than we expected (EUR 3m vs our EUR 9m estimate).
Although no major projects were initiated during the quarter Raute says
cancellations are unlikely and many investment decisions could receive green
light when the situation stabilizes.

We make minor estimate changes

According to Raute activity levels are still good in Russia and China, and
customers are planning some big strategic investment projects but for now
there’s no way to reliably estimate a time frame during which the leads might
translate to actual orders for Raute. We expect Q2 to prove the slowest quarter
for Raute in terms of order intake, but there’s significant uncertainty as to
how rapidly order intake might improve in H2.

Long-term strategy intact yet short-term outlook hazy

We continue to view Raute’s prospects beyond this year’s weak results. A
significant pick up in order activity would likely follow the operating
environment’s inevitable normalization, but this might take some time to be
reflected in the order book. We view Raute well positioned to capture large
plywood and LVL machinery orders in the coming years once the sector is ready to
commit itself to new capacity investments. However, in the current uncertain
environment we see the overall valuation picture neutral. Our new TP is EUR 20
(21), rating HOLD (BUY).

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CONSTI - PROFITABILITY BEATS EXPECTATIONS

24.07.2020 - 09.00 | Earnings Flash

Consti's net sales in Q2 amounted to EUR 69.3m, in line with our estimates and
consensus (EUR 68.5m/70.3m Evli/cons.). EBIT amounted to EUR 2.4m, above our and
consensus estimates (EUR 1.8m/1.4m Evli/cons.). Free cash flow improved to a
solid EUR 8.1m (Q2/19: EUR 2.7m).

Read more

 * Net sales in Q2 were EUR 69.3m (EUR 81.2m in Q2/19), in line with our
   estimates and consensus estimates (EUR 68.5m/70.3m Evli/Cons.). Sales
   declined -14.7 % y/y.
 * Operating profit in Q2 amounted to EUR 2.4m (EUR 0.1m in Q2/19), above our
   estimates and consensus estimates (EUR 1.8m/1.4m Evli/cons.), at a margin of
   3.4 %.
 * EPS in Q2 amounted to EUR 0.21 (EUR -0.04 in Q2/19), above our estimates and
   consensus estimates (EUR 0.14/0.11 Evli/cons.).
 * The order backlog in Q2 was EUR 211.8m (EUR 226.8m in Q2/19), down by -6.6 %.
   Order intake EUR 66.8m in Q2 (Q2/19: EUR 57.4m).
 * Free cash flow improved to EUR 8.1m (Q2/19: EUR 2.7m) driven by profitability
   improvement and release of working capital.
 * The corona pandemic had a limited impact, with worksites remaining open in
   all business areas. Short-term uncertainty in renovation demand outlook due
   to the possible moving forward of some projects in the negotiation stage.
 * Guidance reiterated: The Company estimates that its operating result for 2020
   will improve compared to 2019.

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RAUTE - RESULTS BELOW OUR EXPECTATIONS

23.07.2020 - 09.50 | Earnings Flash

Raute’s Q2 results were clearly below our expectations with respect to revenue
and profitability as well as order intake.

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 * Q2 revenue amounted to EUR 24.4m vs our EUR 29.0m estimate. The shortfall was
   attributable to project deliveries.
 * EBIT was EUR -1.0m, compared to our EUR 1.3m expectation. Order book timing
   affected the results negatively.
 * Q2 order intake stood at EUR 13m (EUR 26m a year ago) while we expected EUR
   19m. Order intake for both project deliveries and technology services
   declined by about half y/y. The pandemic postpones investment decisions but
   Raute says project cancellations are unlikely and the situation could
   normalize quickly.
 * Order book amounted to EUR 80m at the end of the quarter (EUR 72m a year
   ago), which we view a rather good figure.

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VERKKOKAUPPA.COM - EXTREMELY STRONG PERFORMANCE IN Q2

23.07.2020 - 09.05 | Company update

Verkkokauppa.com issued a positive profit warning and gave preliminary
information on April-June figures. The company now expects 20E revenue of EUR
520-545m and adj. EBIT of EUR 13-18m. The company’s Q2 result is due on Friday.
We keep our rating “BUY” with TP of EUR 6.2.

Read more

Strong performance during spring & summer

Verkkokauppa.com issued a positive profit warning as its spring/summer sales and
profitability have developed better than first anticipated but also due to the
brighter H2’20E outlook. The company now expects 20E revenue of EUR 520-545m
(Evli prev. 525m) and comparable operating profit of EUR 13-18m (Evli prev.
14.3m). The company previously expected 20E revenue of EUR 510-530m and
comparable operating profit of EUR 12-15m. Verkkokauppa.com also provided
preliminary Q2 figures. April-June revenue is approx. EUR 123m, growth of ~14%
y/y (Evli 113m/cons. 113m) while adj. EBIT is approx. EUR 4.8m (EUR 0.2m in
Q2’19) vs. EUR 1.3m/1.4m Evli/consensus. According to the company, comparable
operating profit improved as a result of strong sales and improved gross margin.

Consumers have been active during Q2

Based on the preliminary second quarter figures, it seems that the demand of
consumer electronics has continued strong. Due to the increased demand, we
expect less price driven competition in the consumer electronics market which
impacts positively on gross margin. However, we see this only as a temporary
change. Also, good demand in other smaller categories (offering higher margins)
supports gross margin development. We now expect Q2E gross margin of 16.4%
(14.2% in Q2’19). According to the management, the pandemic might not have as
big impact on consumer demand as first anticipated which is also likely to
impact on H2’20E.

“BUY” with TP of EUR 6.2

We have increased our estimates as a result of the positive profit warning. We
expect sales to grow also in H2’20E, although the growth is expected to
normalize from H1’20. We now expect 20E revenue of EUR 535m (6% y/y) and adj.
EBIT of EUR 17.1m (51% y/y). On our estimates, the company trades at 20E-21E
EV/sales multiple of 0.4x, ~20% below the online focused Nordic & European
peers. We keep our rating “BUY” with TP of EUR 6.2.



Open report


VAISALA - EYES ON THE HORIZON

22.07.2020 - 09.30 | Company update

Vaisala delivered a decent Q2 result, with improved EBIT despite decrease in net
sales and orders received. Vaisala maintained its 2020 guidance although market
outlook is still weighed down by COVID. Although there are still short-term
risks related to the pandemic, we see Vaisala coming out rather unscathed from
the pandemic, and therefore we are ready to emphasize more the coming years and
Vaisala’s post-COVID performance. Our estimates remain unchanged, and we
continue to see Vaisala executing well but valuation is challenging. We maintain
HOLD recommendation with target price of 29 euros (prev. 26).

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W&E stronger than expected, while IM soft

On a whole, Vaisala’s Q2 result was broadly in line. Q2 net sales decreased -5%
to 91,4 MEUR vs. 93,5 MEUR Evli and 94 MEUR consensus. Q2 EBIT improved 9,7% y/y
to 7,9 MEUR (8,7% margin) vs. 8,1 MEUR our expectation (cons. 7,9 MEUR). EPS was
0.16 (0.19 Evli, 0.20 consensus). Gross margins held up nicely (54,5% vs. 54,2%
last year) despite lower volumes. Orders received decreased -2% to 95,9 MEUR due
to weakened order intake in IM and especially in APAC region. Overall, W&E fared
slightly better than we expected with Q2 EBIT at 0,7 MEUR (0,2 MEUR Evli) and
decent orders received +1% due to strong EMEA. On the other hand, IM was softer
than we had expected. IM net sales declined -5% to 33,8 MEUR (37,1 MEUR Evli)
and EBIT was 7,1 MEUR (7,9 MEUR Evli), due to lower net sales. IM order intake
declined -8% in all regions, especially APAC. According to Vaisala, IM’s
high-end humidity and high-end carbon dioxide markets were affected by COVID as
customers suspended operations and delayed decision making.

2020 outlook maintained

Vaisala estimates that lost order intake during H1 was roughly 15–25 MEUR and
lost net sales was in range of 5–15 MEUR. Looking forward, it’s clear that
uncertainties will continue. W&E outlook is weighed by the weakened outlook for
aviation and lack of larger infra projects, especially in developed countries.
IM is also expected to suffer short term from COVID repercussions. Vaisala
maintained its 2020 outlook it issued in April, expecting FY20 net sales of
370–405 MEUR and EBIT of 34–46 MEUR. Our estimates remain broadly unchanged
after the report. We believe pulling out of COVID will help IM fare better in
H2, and our 20E estimates are at midpoint of guidance. We expect 2020e net sales
to decline roughly 4% to 388 MEUR and reported EBIT to decline to 39,5 MEUR. Our
2021-22E estimates remain unchanged and we continue to see Vaisala’s targeted
above 5% sales growth achievable and road to >12% margins resuming after
pandemic resides.

Valuation remains challenging

On our estimates, Vaisala is still trading at premiums compared to our peer
group, and as noted before, we see valuation stretched given Vaisala’s weaker
financial performance compared to peer group. Peer group valuation multiples
have however risen, and premiums are now more acceptable. Although there are
still short-term risks related to the pandemic, we see Vaisala coming out rather
unscathed from the pandemic, and therefore we are ready to emphasize more the
coming years and Vaisala’s post-COVID performance. We raise our target price to
29€ (prev. 26€) and maintain our HOLD recommendation. Our target price values
Vaisala at 21-22e EV/EBIT multiples of 22x and 19x which is above peer group,
reflecting Vaisala’s strong sustainability profile, growing dividend, and
especially IM’s highly profitable growth with possibility of further add-on
acquisitions.

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SRV - UPGRADE TO BUY

22.07.2020 - 09.30 | Company update

SRV’s Q2 profitability fell short of our estimates due to one-offs, with revenue
and construction profitability slightly better than expected. We have raised our
20-22E EBIT estimates by some 5-10% on a fairly good H1 order intake and higher
construction margin expectations. We upgrade our rating to BUY (HOLD) with a
target price of EUR 0.66 (0.64).

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One-offs affected profitability, good construction margins
SRV’s revenue in Q2 grew 28% y/y to EUR 265.0m for a slight expectations beat
(EUR 243.4m/243.0m Evli/cons.). The operative operating profit was at EUR 0.5m
(Evli 3.8m), affected by an EUR 3.1m provision for expenses recognized due to a
ruling by a Russian court as well as recovery programme costs and costs stemming
from impacts of the coronavirus. Construction profitability was good and
slightly better than expected, with an operative operating profit margin of 2.8%
(Evli 2.6%). The effects of the coronavirus were limited, although some
additional costs were incurred, and housing sales were slower during April-May.
Shopping centres were also affected and in Russia a large share of stores were
and remain closed due to restrictions.

20-22E EBIT estimates raised by some 5-10%
We have post-Q2 raised our 20-22E EBIT estimates by some 5-10%, prompted by a
fairly good H1/20 order intake and slightly raised construction margin
expectations. The coronavirus pandemic continues to pose a risk, but current
recovery prospects in Finland and a higher share of housing units sold to
investors in the construction portfolio remain supportive factors.

BUY (HOLD) with a target price of EUR 0.66 (0.64)
Uncertainty of shopping centre exits has increased due to the pandemic and will
most likely be delayed, with Pearl Plaza discussions already having been in late
stages. On our 21-22E estimates and peer multiples, current valuation levels in
our view essentially appear to only assign a value to SRV’s construction
operations. We upgrade our rating to BUY (HOLD) with a target price of EUR 0.66
(0.64).

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EXEL COMPOSITES - PROFITABILITY OUTSHINES UNCERTAINTIES

22.07.2020 - 09.25 | Company update

Exel’s Q2 volumes developed as expected while profitability was a big positive
surprise. We weigh the strong performance against valuation prudence; caution is
warranted since volumes are sensitive even in benign business climates. However,
we view the current valuation simply too low. Our TP is EUR 6.25 (5.50), rating
BUY.

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Top line as expected, profitability a major positive surprise

Exel’s Q2 was as expected in terms of group-level revenue. The figure was EUR
27.2m i.e. in line with the EUR 27.9m/27.2m Evli/cons. estimates and up 3% y/y.
Wind power grew by 52% y/y, and the EUR 7.9m figure was clearly above our EUR
6.6m estimate. The increase was driven by Asia-Pacific. All in all, it seems the
pandemic has had only a limited impact on Exel’s business so far. Revenues have
rolled in as expected and Q2 order intake only fell by 4% y/y, which in our view
is a remarkable result considering the business and the current macro context.
In this sense the Q2 update was a bit unsurprising relative to the Q1 release.
The surge in profitability, however, was unforeseen. Exel achieved EUR 2.9m in
adj. EBIT, compared to the EUR 2.0m/2.0m Evli/cons. estimates. The US unit
fueled the positive surprise.

Profitability outperformance has been extended

Guidance wasn’t reinstated (Exel guided increased revenue and adj. EBIT earlier
this year). In our view the reluctance to issue guidance for now reflects order
uncertainties. Deliveries could be hit should the environment rapidly worsen,
which is a relevant possibility. Yet in our view Exel is on a clear track to
achieve higher earnings, considering the EUR 5.0m in H1’20 adj. EBIT vs the EUR
4.2m in H1’19. The company has topped the expectations we had prior to the
pandemic. The earnings report changes our top line estimates very little, but we
upgrade our profitability estimates. We previously expected EUR 3.7m in H2’20
adj. EBIT, and now see the figure at EUR 5.1m. For FY ’21 we now estimate the
figure at EUR 11.1m (previously EUR 9.5m).

Valuation is undemanding especially compared to peers

Exel has continued to outperform our expectations while the macroeconomic
situation does justify some valuation caution. We nevertheless see clear upside
to current multiples. Our new TP of EUR 6.25 (5.50) implies ca. 6.5x EV/EBITDA
and 10.5x EV/EBIT on our estimates for this year. Our rating remains BUY.

Open report


VAISALA - Q2 BROADLY IN LINE, IM SOFTER THAN EXPECTED

21.07.2020 - 12.25 | Earnings Flash

Vaisala’s Q2 EBIT was broadly in line, but pandemic had its toll on both
business areas and orders received. Vaisala’s Q2 net sales decreased 5% to 91,4
MEUR vs. 93,5 MEUR our expectation and 94 MEUR consensus. Q2 reported EBIT was
7,9 MEUR (8,7% margin) vs. our expectation of 8,1 MEUR (7,9 MEUR consensus).

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 * Group level results: Q2 net sales decreased 5% to 91,4 MEUR vs. 93,5 MEUR our
   expectation and 94 MEUR consensus. Q2 EBIT was 7,9 MEUR (8,7% margin) vs. our
   expectation of 8,1 MEUR (cons. 7,9 MEUR). EPS was 0.16 (0.19 Evli, 0.20
   consensus).
 * Gross margin was 54,5% vs. 54,2% last year
 * Orders received was 95,9 MEUR vs. 98 MEUR last year. Orders received
   decreased by -2% due to weakened order intake in Industrial Measurements and
   especially in APAC region. Order book was 145,3 MEUR vs. 141,6 MEUR Q1’20.
 * Weather & Environment (W&E) net sales decreased -5% (-5% excl. FX) to 57,6
   MEUR vs. 56,4 MEUR our expectation. W&E EBIT was 0,7 MEUR (0,2 MEUR Evli).
   Order intake growth was 1% with strong orders received in EMEA offset by
   weaker APAC and Latin America.
 * Industrial Measurements (IM) net sales declined -5% (-5% excl. FX) to 33,8
   MEUR vs. 37,1 MEUR our expectation. IM EBIT was 7,1 MEUR (7,9 MEUR Evli), due
   to lower net sales. Industrial Measurements order intake declined -8% in all
   regions, especially APAC.
 * Business outlook for 2020 maintained: Vaisala estimates that its full-year
   2020 net sales will be in the range of 370–405 MEUR and EBIT will be in the
   range of 34–46 MEUR (updated previously on April 21st)

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EXEL COMPOSITES - EXCELLENT RESULTS

21.07.2020 - 10.45 | Earnings Flash

Exel Composites reported Q2 revenue in line with expectations while
profitability was clearly higher than expected. Higher profitability was mainly
due to the US unit’s improved performance. Overall Exel’s performance seems very
solid despite the pandemic, however the company does not yet reissue guidance.

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 * Q2 revenue amounted to EUR 27.2m, compared to the EUR 27.9m/27.2m
   Evli/consensus estimates.
 * With respect to customer industries, Wind power revenue stood at EUR 7.9m in
   Q2 i.e. some EUR 1.3m higher than we expected.
 * Adjusted operating profit was EUR 2.9m vs EUR 2.0m/2.0m Evli/consensus
   estimates. Adjusted operating margin was thus an excellent 10.6%. The
   profitability improvement was primarily driven by the US unit.
 * Q2 order intake declined by 3.8% y/y to EUR 22.9m, which in our view is more
   than a decent figure considering the extraordinary circumstances that
   prevailed during the quarter. One large order, attributable to Buildings and
   infrastructure (worth some EUR 3.5m), helped but overall the order book
   situation looks rather good for now.
 * Exel withdrew guidance for FY ’20 in connection with the Q1 earnings release.
   The company says it will reinstate guidance later this year.

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CONSTI - EYES ON THE DEMAND SITUATION

21.07.2020 - 09.30 | Preview

Consti will report Q2 results on July 24th. As the direct impacts of the
Coronavirus pandemic have been limited, we expect profitability to have remained
at a good level and clearly above the weak comparison period. The order backlog
will remain of support for the quarter while a thinness in demand may start to
show during the latter half of the year. We retain our HOLD-rating and adjust
our target price to EUR 7.4 (7.0).

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Limited direct pandemic impact to support profitability
Consti continued on a track of improved profitability in Q1 and we do not expect
any major deviations from that trend. The direct impacts of the Coronavirus
pandemic on the second quarter results are expected to be limited, as on-going
worksites have to our understanding been able to operate without significant
interruptions. We expect EBIT to improve clearly from the weak comparison period
(Q2/2019: EUR 0.1m), which was affected by certain weak-margin projects, to EUR
1.8m in Q2/2020. We expect a revenue of EUR 68.5m, a decline of 15.7% y/y, as a
result of the weakened order backlog from more disciplined bidding procedures.

Short-term demand thinness to be expected
Going forward, we expect our main attention to be pointing toward the overall
demand situation. Given the timing of the housing company General Meeting
season, decision-making for certain renovation projects will have been delayed
to the fall or possibly next year. Decisions of corporations will possibly also
have been affected while the public sector should have been less affected. The
renovation sector fundamentals, however, remain unaffected and the impact should
as such be of more temporary nature.

HOLD with a target price of EUR 7.4 (7.0)
Our estimates remain unchanged ahead of the Q2 results. Following lower COVID-19
uncertainty and increases in peer multiples we adjust our target price to EUR
7.4 (7.0) and retain our HOLD-rating.

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SRV - FARED RATHER WELL

21.07.2020 - 09.00 | Earnings Flash

SRV's net sales in Q2 amounted to EUR 265.0m, above our and consensus estimates
(EUR 243.4m/243.0m Evli/cons.). EBIT amounted to EUR 3.3m, below our estimates
and above consensus estimates (EUR 3.8m/2.4m Evli/cons.).

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 * Revenue in Q2 was EUR 265.0m (EUR 207.4m in Q2/19), above our estimates and
   consensus estimates (EUR 243.4m/243.0m Evli/Cons.). Growth in Q2 amounted to
   27.8 % y/y.
 * Operating profit in Q2 amounted to EUR 3.3m (EUR -3.1m in Q2/19), below our
   estimates and above consensus estimates (EUR 3.8m/2.4m Evli/cons.), at a
   margin of 1.2 %. The operative operating profit amounted to EUR 0.5m (Evli
   EUR 3.8m). The operating profit was affected by an EUR 3.1m provision for
   expenses that were recognized due to a ruling by a Russian court, as well as
   costs relating to the recovery programme among other things.
 * EPS in Q2 amounted to EUR 0.02, above our estimates and consensus estimates
   (EUR -0.02/-0.01 Evli/cons.).
 * Construction: Revenue in Q2 was EUR 264.1m vs. EUR 242.7m Evli. Operating
   profit in Q2 amounted to EUR 7.4m vs. EUR 6.3m Evli.
 * Investments: Revenue in Q2 was EUR 1.2m vs. EUR 1.2m Evli. Operating profit
   in Q2 amounted to EUR -1.7m vs. EUR -1.5m Evli.
 * Other operations and elim.: Revenue in Q2 was EUR -0.2m vs. EUR -0.5m Evli.
   Operating profit in Q2 amounted to EUR -2.4m vs. EUR -1.0m Evli.

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RAUTE - LONGER PERSPECTIVE IS WARRANTED

20.07.2020 - 09.20 | Preview

Raute reports Q2 results on Thu, Jul 23. Order book stands at a decent level but
Q2 must have been slow with respect to new orders. Raute issued two releases in
Q2 which speak of the company’s strategy proceeding according to plan; however,
these news items will not immediately impact our estimates. In our view
valuation is turning attractive on our unchanged estimates. Our TP is EUR 21,
rating BUY (HOLD).

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Order intake was likely low, but strategy appears on track

Raute didn’t disclose any large orders in Q2, which in our view is unsurprising.
However, the company did book an order for the delivery of modern veneer drying
and automated lay-up lines to South China. Although the order is moderate in
size, amounting to perhaps a few million euros, it may prove to hold significant
reference value for Raute as the machinery represents the inaugural Chinese
purchase of such advanced plywood production technology. The order will be
delivered by the end of this year. In our view the order is an initial
encouraging sign that the Chinese plywood market, by far the biggest, is
gradually maturing towards higher quality standards. Raute has so far been
unable to make meaningful inroads into the market and it remains to be seen in
what time frame significant results might materialize. Raute also recently
announced the acquisition of a Finnish software company specializing in
demanding industrial solutions, including machine vision. From a financial
perspective the deal has no impact on our current estimates but is consistent
with Raute’s strategy, according to which the company continues to invest in
further developing its technological edge.

We see soft Q2 order intake, expect improvement in H2

We expect Raute to have booked EUR 19m in Q2 new orders i.e. about half the
average quarterly level last year. As with so many other industries, the focus
will be on comments regarding the changes and improvement in activity following
the most acute weeks of the pandemic lockdown.

We view valuation low especially relative to peer multiples

This year will not be great in terms of profitability. On our estimates for next
year Raute currently trades ca. 5.5x EV/EBITDA and 8.5x EV/EBIT; despite
uncertainty regarding the sharpness of next year’s profitability improvement we
view these multiples attractive. Our TP remains EUR 21, rating now BUY (HOLD).

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VERKKOKAUPPA.COM - STRONG TAILWIND AMID THE PANDEMIC

17.07.2020 - 09.30 | Preview

Verkkokauppa.com reports its April-June result on next week’s Friday, 24th of
July. We expect Q2E sales of EUR 113m (5% y/y) and adj. EBIT of EUR 1.3m. We
keep our rating “BUY” with TP of EUR 6.2 (4.5).

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Expecting a strong Q2
Verkkokauppa.com had a strong start for the year as Q1’20 sales increased by
over 8% y/y, boosted by exploded online sales caused by the COVID-19. Remote
working has become the new normal during this time thus we expect good growth in
the consumer electronics market. The management indicated that the demand of
several other categories has developed favorably as well (e.g. sports, home). We
also expect the good weather in the early summer to have a positive impact on
sales. We have increased our Q2’20E sales expectation by 3% to EUR 113.2m. We
expect Q2’20E adj. EBIT of EUR 1.3m (Q2’19: EUR 0.2m).


Targeting improved brand awareness
Verkkokauppa.com transferred to the main list of Nasdaq Helsinki in early June
as the company is targeting to increase its brand awareness and to improve its
liquidity. The total expenses related to the listing are EUR ~0.8m. According to
the listing prospectus, some 16% of total sales in Q1’20 came from outside of
Finland (2019: 12%). Due to the global movement restrictions, we expect
significantly lower international sales during Q2E. We expect gross margin to
improve in Q2E (14.9% vs. 14.2% in Q2’19) as the consumer electronics market
should ease temporarily but also due to the good development of other smaller
categories (offering higher margins). We expect good control over costs,
supporting earnings development.


“BUY” with TP of EUR 6.2 (4.5)
We have increased our 20E adj. EBIT expectation by ~5% (EUR 14.3m) while
slightly increasing our 20E sales expectation (EUR 525.4m). The company expects
20E sales of EUR 510m-530m and adj. EBIT of EUR 12-15m thus our estimates are at
the higher end of the given guidance. We have also increased our 21E-22E sales
expectation by 1-1.5% and adj. EBIT expectation by 6-7%. On our estimates, the
company trades at 20E-21E EV/sales multiple of 0.4x, which translates into ~25%
discount compared to the online focused Nordic and European peers. We keep our
rating “BUY” with TP of EUR 6.2 (4.5).

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FINNAIR - GLOOMY Q2 FIGURES AHEAD

16.07.2020 - 09.30 | Preview

Finnair reports its Q2 result on next week’s Friday, 24th of July. As well
known, April-June figures will not be pretty. We expect Q2E revenue of EUR 54m
and adj. EBIT of EUR -177m. We upgrade to “HOLD” (“SELL”) with TP of EUR 0.60.

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Historically gloomy traffic
Finnair’s April-June traffic figures were extremely weak, as expected. Passenger
numbers decreased by 97% y/y as Finnair carried only ~100k passengers during
this time. ASK decreased by 97% y/y and RPK decreased by 99% y/y. The were no
flights to North Atlantic nor to Asia during most of the quarter and the
remaining operations have been mainly related to cargo. Finnair has estimated
that its daily comparable operating loss will be approx. EUR 2m throughout Q2.
We expect Q2’20E revenue of EUR 54m and adj. EBIT of EUR -177m.

Jet fuel prices dropped during Q2
Jet fuel prices have dropped significantly during Q2. The average price in both,
USD and in EUR dropped by 49% on a q/q basis compared to Q1’20. On a y/y basis,
the average price in USD fell by 62% and in EUR by 61%.

Flights starting gradually to recover
Finnair has gradually started to add frequencies and routes to its network as
many travel restrictions have now been removed and the pandemic situation has
improved, at least in Europe and Asia. The company estimated earlier that it
aims to fly some 30% of its normal amount of flights in July. Some 70% of the
normal capacity is expected to be operated by the end of the year. The company
should be able to expand its offering relatively quickly depending on the
country specific restrictions and demand.

“HOLD” (“SELL”) with TP of EUR 0.60
As a result of Finnair’s rights offering issued during the summer, Finnair
receives net proceeds of approx. EUR 501m. The total number of Finnair’s shares
increased to 1.4b. There are no major changes in our 20E-22E estimates. We
expect 20E revenue of EUR 1595m and adj. EBIT of EUR -304m. We expect the
traffic slowly to recover during 21E-22E but we don’t expect to see levels
reached prior the pandemic any time soon. We keep our TP of EUR 0.60 and upgrade
to “HOLD” (“SELL”).

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TOKMANNI - POSITIVE SURPRISE WITH Q2 SALES

10.07.2020 - 09.30 | Company update

Tokmanni’s Q2’20 sales increased by 19.1% y/y to EUR 286m which is a positive
surprise after the company withdrew its guidance in March due to the COVID-19.
Tokmanni will report its Q2 result on 29th of July. We keep our rating “BUY”
with TP of EUR 16.4 (13.5).

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Q2 sales increased by 19.1% y/y

Tokmanni published its Q2 sales beforehand (Q2 result will be published on 29th
of July) as its April-June sales increased by 19.1% y/y (EUR 286m). The
exceptional jump in sales came as a surprise as the company withdrew its
guidance in March, due to the coronavirus situation and the consensus
expectation indicated decrease in sales. According to the company, the customer
numbers decreased towards the end of March but have since recovered. LFL growth
was 17.4% y/y and online sales accounted for 1.4% of sales. Our previous Q2E
sales expectation was EUR 191m. Tokmanni expects comparable gross margin in Q2E
to decrease by ~1ppt y/y, resulting from the active measures to increase sales
and the structure of sales.

Restrictions impacting positively on consumer behavior

Due to the movement restrictions caused by the COVID-19, Finns have spent more
time at home and at their summer cottages and domestic tourism has become more
popular. Therefore, the demand of leisure, gardening and home improvement
products has strongly increased. Also, the demand of food products has been
strong during Q2. On the other hand, clothing sales decreased y/y. We don’t
expect a significant increase in customer numbers during the quarter but rather
in the average basket size. We expect that Tokmanni’s cost base has remained
stable despite of the increase in sales, resulting in improved profitability. We
expect Q2’20E adj. gross margin of 34.1% and adj. EBIT of EUR 30.9m.

“BUY” with TP or EUR 16.4 (13.5)

As result of the latest information, we return back to our view prior the
COVID-19 and expect Tokmanni to reach sales of over EUR 1bn in 20E. We expect
20E sales of EUR 1026m and adj. EBIT of EUR 90m. As the significant increase in
Q2’20 revenue was exceptional, we expect normalized sales during H2’20E and
sales to remain in the same level also in 21E. Our view of Tokmanni’s 21E-22E
hasn’t changed. On our estimates, Tokmanni trades at 20E-21E EV/EBIT multiple of
13.0x and 13.1x, which translates into 25-31% discount compared to the
international discount peers. We keep our rating “BUY” with TP of EUR 16.4
(13.5).

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SUOMINEN - CLEAN AND SHINING

25.06.2020 - 09.25 | Company update

Suominen revised its outlook upwards for the second time this year. We update
our estimates; the announcement has only minor impact in quantitative terms but
turns us more confident towards Suominen’s sustainable profitability
improvement. Our TP is now EUR 4.25 (3.25) and thus we rate the shares BUY
(HOLD).

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The update reflects conviction in value-add wiping demand
Suominen previously expected comparable FY ‘20 EBIT to improve clearly from ‘19.
The updated outlook guides significant improvement. The figure amounted to EUR
8.1m last year, and we now expect Suominen to post EUR 24.0m this year (our
previous estimate was EUR 23.1m). In our view the outlook update therefore has
somewhat limited information value as such, although it’s worth mentioning that
Suominen also removed the previous disclaimer according to which the result
estimate for the second half of the year was uncertain due to the pandemic. In
other words, the announcement does not change our estimates quantitatively as
much as it does qualitatively. Suominen did not comment on market developments,
but in our view the update reflects certain value-add wiping product
categories’, namely those meant for household and workplace uses, improved
prospects due to the pandemic.

Our higher gross margin estimate offsets weaker USD
During the last two months USD has declined by about 5% relative to EUR. We thus
update our revenue estimate for this year downwards to EUR 443m from the
previous EUR 454m. There have been no meaningful interim changes in raw
materials prices, and as we expect value-add wiping product demand to remain
brisk we revise our FY ’20 gross margin estimate up by some 50bps to 12.1%.
These changes’ net effect on our FY ’20 EBIT estimate is an increase to the tune
of EUR 0.9m.

Valuation is attractive as profit recovery gains traction
Suominen currently trades at about 5.7x and 4.8x EV/EBITDA on our estimates for
this year and next. In our view higher multiples are now warranted as
profitability improvement looks increasingly robust. Our new EUR 4.25 (3.25) TP
implies the respective multiples at levels of 6.2x and 5.3x. Suominen is also
valued clearly below peer group multiples. We now rate the shares BUY (HOLD).

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FINNAIR - STRENGTHENING ITS BALANCE SHEET

12.06.2020 - 09.25 | Company update

Finnair will strengthen its balance sheet with a rights offering of approx. EUR
500m, which have been fully underwritten. We have also cut our 20E estimates to
be in line with the latest traffic plan. We keep our rating “SELL” with TP of
EUR 0.6 (3.3).

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Aiming to raise gross proceeds of approx. EUR 500m

Finnair has announced the terms and conditions of its rights offering of approx.
EUR 500m, which have been fully underwritten. The proceeds from the offering are
intended for strengthening the company’s balance sheet and to support the
company’s long-term strategy. The company offers up to ~1279m new shares for
subscription for the existing shareholders. The existing shareholders receive
one subscription right for each share held on the record date and each
subscription right carries the right to subscribe for ten offer shares. The
subscription price is EUR 0.40 per offer share. The state of Finland, which is
the largest shareholder of Finnair, has committed to subscribe in full for offer
shares on the basis of subscription rights allocated to it (a total of 55.9% of
the offer shares). The subscription period commences on 17 June 2020 and ends on
1 July 2020.

Further estimates cut for 20E

We have also adjusted our H2’20E estimates downward based on the traffic plan
introduced earlier in May. Finnair will start gradually to add frequencies and
routes back starting from July. For instance, the company will fly to several
European destinations, concentrating first on the key cities. Also, long-haul
flights to Asia will start in phases. The company aims to operate approx. 30% of
its normal amount of flights in July. Finnair estimated that it will fly approx.
70% of its normal capacity at the end of this year.

“SELL” with TP of EUR 0.6 (3.3)

We now expect 20E revenue to decline by ~48% y/y, amounting to EUR 1605m (prev.
EUR 1752m). We expect 20E adj. EBIT of EUR -305m (prev. EUR -265m). We keep our
rating “SELL” with TP of EUR 0.6 (3.3).



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SRV - NEXT STEP OF RECOVERY MEASURES

03.06.2020 - 09.45 | Company update

SRV is approaching the final leg of its recovery programme and initiated a
rights issue, seeking to raise EUR 50m gross proceeds. The good progress so far
remains somewhat overshadowed by the development of the Russian economy. We
adjust our TP to EUR 0.64 (1.10), HOLD-rating intact.

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Seeking to raise EUR 50m gross proceeds
SRV initiated a rights issue with the aim of raising gross proceeds of EUR 50m
and resolved upon offering up to ~131m new shares, corresponding to 49.8% of all
shares if fully completed, with existing shareholders receiving one subscription
right for each owned share and the subscription price for new shares set at EUR
0.38. The share issue proceeds are primarily intended for strengthening of the
company’s balance sheet. SRV also completed a directed share issue in May,
resulting in gross proceeds of approx. EUR 75m but no cash proceeds, as
outstanding hybrid bonds were converted into equity. The company expects that
the issues along with measures taken as part of the company’s recovery programme
will improve the company’s equity ratio excl. lease liabilities from 26.4%
(31.12.2019) to 30-33% by the end of Q2.

Profitability improving, financial expenses hamper earnings
We assume full completion of the rights issue in our estimates given the EUR 40m
commitments made and the discount of the subscription price. Apart from
adjustments due to the expected expenses related to the share issues our
estimates remain intact. We expect the operative operating profit to improve to
EUR 15.3m following improved construction profitability, while expecting net
earnings to remain negative due to the high financial expenses.

HOLD with a target price of EUR 0.64 (1.10)
Our SOTP implies an equity value of EUR 0.69 per share while peer multiples
remain challenging. The ruble has seen recovery from its Q1 dip but together
with the state of the Russian economy pose a risk to easing balance sheet
strains through exits. We adjust our target price to EUR 0.64 (1.10) with our
HOLD-rating intact.

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CIBUS NORDIC - STAPLE AND STABLE

18.05.2020 - 09.20 | Company update

Cibus performed strong. The fundamentals are solid as before, yet wider property
valuations are subject to higher uncertainty. We retain our SEK 150 TP and BUY
rating.

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There’s little reason to expect performance to be impaired

Cibus’ portfolio performed as expected with Q1 rental income at EUR 14.0m vs our
EUR 13.9m estimate, while net rental income amounted to EUR 13.0m (vs our EUR
13.0m expectation). We did expect temporarily elevated administration costs due
to the Coop acquisition, as the company suggested, and estimated the Q1 figure
at EUR 1.1m. The figure came in at EUR 1.5m and thus the EUR 11.5m Q1 operating
income missed our EUR 11.9m estimate. Meanwhile we overestimated financial costs
(excluding currency losses) since net operating income excluding currency losses
was EUR 7.7m, compared to our EUR 7.6m estimate. In terms of earnings capacity,
the updated property expenses line is higher than we expected while the
administration cost line is slightly lower. We make only small revisions to our
estimates.

Cash flow is solid, yet valuation is not immune to macro

In our view Cibus’ figures and comments prove the pandemic will have little
impact operationally. While in the big picture retail rents are likely to be
under pressure (mainly due to shopping centers) in our opinion there’s no valid
reason to expect this will apply to daily-goods stores. Cibus hasn’t noticed
changes to deal flow and bank financing prospects. We see the daily-goods
property market remaining stable and would not expect distressed sellers to
surface in any meaningful numbers. Even though the pandemic will provide strong
tailwind for online grocery sales the fact remains that such operations still
struggle profit-wise in the Nordics. We expect Cibus will continue to generate
robust cash flow as before. We view wider property valuation trends as the main
risk for Cibus’ shareholders: uncertainty runs high and it remains to be seen
how exactly e.g. telecommuting practices will affect office vacancy rates.

We reiterate our SEK 150 TP and BUY rating

Cibus continues to scan e.g. the Norwegian market, but for now the focus is on
Finland and Sweden. The purchased Swedish properties are being converted into
Coop stores (Coop purchased them from Netto last year); Cibus says the
conversion is progressing well. We retain our SEK 150 TP and BUY rating.

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CIBUS NORDIC - NO MEANINGFUL SURPRISES

15.05.2020 - 09.30 | Earnings Flash

Cibus Nordic reported Q1 property portfolio performance in line with our
estimates, while operating income was slightly below our estimate due to the
Coop portfolio acquisition which temporarily elevated central administration
expenses.

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 * Q1 rental income amounted to EUR 14.0m vs our EUR 13.9m estimate.
 * Accounting for property expenses, net rental income was EUR 13.0m while we
   expected EUR 13.0m.
 * Subtracting central administration expenses, operating income stood at EUR
   11.5m in comparison to our EUR 11.9m estimate. The expenses were higher than
   we expected due to the Coop portfolio acquisition.
 * After considering net financial costs (including currency losses), net
   operating income was EUR 6.8m vs our EUR 7.6m expectation. The figure was EUR
   7.7m excluding currency losses.
 * Annual net rental income capacity now stands at EUR 60.6m (previously EUR
   50.9m).
 * The portfolio was valued at EUR 1,053m, meaning EPRA NAV amounted to EUR 11.6
   (11.4) per share.
 * Net LTV ratio was 58.1% (58.7%).
 * Occupancy rate stood at 94.8% (94.7%) at the end of Q1.
 * WAULT was 5.5 years (4.9 years), increasing due to the Coop portfolio
   acquisition.

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MARIMEKKO - CONSUMER BEHAVIOR LIKELY TO CHANGE

15.05.2020 - 09.25 | Company update

Marimekko’s Q1 result was below expectations as net sales declined by 8% y/y,
amounting to EUR 24.9m (27.9m/25.4m Evli/cons). Adj. EBIT was EUR 1.2m
(1.7m/1.4m Evli/cons). The coronavirus hampered sales in all Marimekko’s market
areas. We downgrade to “HOLD” (“BUY”) with TP of EUR 24 (28).

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All market areas were impacted by the coronavirus

COVID-19 hampered all Marimekko’s market areas which led to a decline in net
sales (-8%). Net sales totaled EUR 24.9m (27.9m/25.4m Evli/cons). Finland was
the only market area with a positive sales development (+6%) in Q1. Net sales in
the second largest market area APAC, declined by 28% y/y. Wholesale sales in
APAC fell by -30% y/y not only due to the coronavirus but also as the
corresponding figures in the comparison period were high due to an exceptional
delivery pattern. Relative sales margin was affected by increased logistics
costs and nonrecurring expenses resulting from the relocation of the company’s
main warehouse. Decline in sales and weakened relative sales margin weighed down
adj. EBIT which was EUR 1.2m vs.  EUR 1.7m/1.4m Evli/cons.

Consumers likely to become more cautious

Our expectations for the upcoming months are not high as the movement
restrictions and the temporary closure of stores will no doubt have a
significant negative impact on Marimekko’s sales and profit. The company’s
online store supports the business in some level as the online sales have
increased significantly, though the management did not provide information
regarding the magnitude of this. The outlook for ’20 wholesale sales in Asia is
affected by the temporary closure of partner-owned stores and changing customer
sentiment. At the same time, domestic wholesale sales in ’20 are boosted by
nonrecurring promotional deliveries, which will be mainly taking place during
H2. Going forward, the globally weakening economic outlook and declining
purchasing power will have a negative impact on consumer behavior. We expect
retail sales and wholesale sales to decline by 12% and 11%, respectively in 20E.

“HOLD” (“BUY”) with TP of EUR 24 (28)

We have cut our 20E sales expectation by ~4% and adj. EBIT expectation by ~8%.
The company expects COVID-19 to have a significant negative impact on sales and
profit in ‘20 but did not provide more detailed guidance at this point. Due to
the weakening economic outlook we have also cut our 21E-22E sales expectation by
7-9% and adj. EBIT expectation by 10-12%. On our estimates, Marimekko trades at
20E-21E EV/EBIT multiple of 17.3x and 10.3x, which translates into 50-60%
discount compared to the luxury peers. We downgrade to “HOLD” (“BUY”) with TP of
EUR 24 (28).

Open report


ENDOMINES - PRODUCTION FINALLY PICKING UP

15.05.2020 - 09.15 | Company update

Endomines Q1 report was largely uneventful, with no gold concentrate production
at Friday during the quarter. Financial transactions in Q2 will aid the strained
cash position. Q2 is set for first Friday gold concentrate sales, while the
COVID-19 pandemic is creating uncertainty around production ramp-up to design
capacity. We retain our SELL-rating with a target price of SEK 5.5 (5.0).

Read more

No gold concentrate sales in Q1
Endomines Q1 report contained limited new information of value. No gold
concentrate sales from Friday occurred and revenue amounted to SEK 3.1m due to
Pampalo clean up gold. Lesser cost activation saw costs higher than our
estimates and as a result a weaker EBITDA, at SEK -27.8m (Evli -13.6m). 3,700
tonnes of lower grade (5.7 g/t) ore was mined during the first quarter. Design
capacity (3,445 tonnes/month) at Friday is sought to be reached in Q2, however,
COVID-19 impacts on staff and component availability may cause delays. The first
gold concentrate shipment from Friday was made during Q2.

Financing arrangements to aid cash position
Post-Q1 financial transactions will bring much needed relief to Endomines’
strained cash position (Q1/20: SEK 1.3m), raising some SEK 81m through two loans
and a rights issue. We expect further financing to be needed during 2020, as
evident by the signing of an engagement letter with a financial advisor for
long-term financing. Closing of the transaction with Transatlantic Mining
provides additional production potential, although little is yet known of the
assets. 2020 will in our view revolve around ramping-up production at Friday and
planning for production at other assets from 2021 onwards.

SELL with a target price of SEK 5.5 (5.0)
Following adjustments to our valuation approach following the favourable gold
price development and taking into account the transactions in Q2 we raise our
target price to SEK 5.5 (5.0). Our SELL-rating remains intact.

Open report


ENDOMINES - FOCUS ON RAMP-UP

14.05.2020 - 10.00 | Earnings Flash

Endomines did not sell any gold concentrate from Friday in Q1. Design capacity
at Friday is sought to be reached in Q2, although impacts of the COVID-19
pandemic may cause delays. No numeric production guidance was given. 3,700
tonnes of ore at 5.7g/t grade mined during Q1. EBITDA lower than our
expectations at SEK -27.8m (Evli -13.6m).

Read more

 * Endomines did not sell any gold concentrate from Friday in Q1. An agreement
   for the sale of gold concentrate was signed and the first shipment of gold
   concentrate from the Friday mine was done in May.
 * Revenue in Q1 amounted to SEK 3.0m, with our estimates at SEK 3.1m.
 * EBITDA in Q1 was at SEK -27.8m, below our estimate of SEK -13.6m following
   higher than expected costs.
 * At the processing facility at Friday Endomines was able to operate at a rate
   of 36 tonnes per day. Ramp up to design capacity (3,445 tonnes per month)
   continued. The goal is to reach design capacity during Q2, however, the
   COVID-19 pandemic poses some challenges with staff and part availability and
   continued effects of the pandemic may postpone the reaching of design
   capacity. Endomines has mined approximately 3,700 tonnes of ore at a grade of
   5.7 g/t at Friday in Q1.
 * Endomines did not yet give any numeric production guidance for 2020.
 * Liquid assets amounted to SEK 1.3m at the end of the quarter. After the
   quarter Endomines raised SEK 81m net proceedings through the issuance of two
   loans and a directed share issue.
 * An agreement with Transatlantic Mining was signed after Q1 to buy US Grant
   Mine and mill and the Kearsarge Gold Project.

Open report


MARIMEKKO - DECLINE IN SALES IN Q1

14.05.2020 - 08.45 | Earnings Flash

Marimekko’s Q1 result was below expectations as net sales decreased by 8%,
amounting EUR 24.9m vs. EUR 27.9m/25.4m Evli/cons. Adj. EBIT was EUR 1.2m vs.
EUR 1.7m/1.4m Evli/cons. Marimekko expects the coronavirus to have a significant
negative impact on net sales and profitability in 2020. Guidance for ’20 was not
given at this point.

Read more

 * Finland: revenue was EUR 13.6m vs. EUR 13.3m Evli view. Revenue increased by
   6%.
 * International: revenue was EUR 11.3m vs. EUR 14.6m Evli view. Revenue
   declined by 21%. The decline in wholesale sales in APAC was due to an
   exceptional delivery pattern in the comparison period but the coronavirus had
   also a negative impact as some expected reorders were not placed.
 * Retail sales were at the same level as in the comparison period but wholesale
   sales declined by 13% and licensing income by 71%.
 * Q1 adj. EBIT was EUR 1.2m (4.6% margin) vs. EUR 1.7m/1.4m (5.9%/1.4% margin)
   Evli/cons. Lower sales and a decline in relative sales margin had a weakening
   impact on result whereas lower fixed costs had a positive impact.
 * Q1 EPS was 0.02 EUR vs. EUR 0.07/0.10 Evli/cons.
 * The company expects the coronavirus to have a significant negative impact on
   net sales and profitability in 2020. Guidance for ’20 was not given at this
   point.

Open report


CIBUS NORDIC - GRADUATING THE PROPERTY LADDER

12.05.2020 - 09.30 | Company report

Our updated TP is SEK 150 (155), rating now BUY (HOLD).

Read more

Cibus has performed according to expectations

Cibus’ portfolio performance has delivered the promises since the IPO in March
2018. Moreover, the portfolio’s exposure to supermarkets, in our view the
preferred daily-goods store type, has increased following a string of
acquisitions large and small. The company has also advanced on the
organizational side. Cibus is now more independent entity, and Sirius’ partial
exit made entry for other institutional investors easier and helped facilitate
the Swedish property market expansion earlier this spring.

The Swedish market entry fits the strategy well

Cibus was able to acquire the EUR 180m Coop supermarket portfolio at a yield of
close to 6%, which to us was a surprisingly high level, especially considering
the portfolio’s quality, 10-year triple-net lease structure as well as Coop’s
agreement to invest SEK 3m into each of the 110 stores for rebranding purposes
(Coop acquired the stores from Netto last year). We view the portfolio a good
base for further expansion in Sweden.

We base our TP on the portfolio’s current CF capacity

Cibus continues to trade at attractive levels relative to other listed Nordic
property portfolios since Cibus’ assets are small in the institutional investor
context and thus there’s a paucity of buyers as this specific asset class isn’t
the most convenient way to deploy large amounts of capital. Single grocery
stores can often be purchased at high yields. We’d describe Cibus a vehicle for
capitalizing on the yield differential. Since Cibus’ portfolio is well
diversified we see there’s scope for fair value gains every time Cibus buys a
property. Having said that Cibus isn’t the only Nordic daily-goods property
portfolio (although it’s the only publicly traded one) and so we view it prudent
to focus on the current portfolio cash flow capacity. We value Cibus’ current
cash flow prospects with a yield we see sufficiently below that of the
underlying daily-goods property market (to account for diversification benefits)
on the one hand, and adequately above that of the wider property market (the
vehicular benefits shouldn’t be exaggerated) on the other. Our TP is now SEK 150
(155), rating BUY (HOLD).

Open report


PIHLAJALINNA - GETTING READY FOR THE FCCA’S DECISION

11.05.2020 - 09.25 | Company update

Pihlajalinna’s Q1 revenue amounted to EUR 133m (+0.4% y/y) vs. our EUR 135m.
Adj. EBIT was EUR 4.2m vs. our EUR 5.2m. The tender offer by Mehiläinen is
currently being under review of the FCCA and the final decision should be ready
at the end of Q2 or latest in Q3. We keep our TP of EUR 16.0 and downgrade our
rating to “HOLD” (“BUY”).

Read more

Non-urgent and oral healthcare took hit from COVID-19

Pihlajalinna’s Jan-March result was rather good even though it slightly missed
our expectations. Q1 revenue increased by 0.4% y/y to EUR 133m (EUR 135m/133m
Evli/cons). Adj. EBIT landed at EUR 4.2m (EUR 5.2m/4.4m Evli/cons). According to
the management, revenue and profitability developed as expected during the first
months of the year but the coronavirus and the emergency laws that came into
force in mid-March had a negative impact on the company’s business. Negative
impacts were especially seen on the demand of non-urgent healthcare and oral
healthcare. Fitness centers were also closed at the end of March. The decreased
customer flows reduced the invoicing by approx. EUR 3.3m.

Demand should start slowly to recover

We expect the coronavirus had the most negative impacts on Pihlajalinna’s
business in April due to the movement restrictions but the demand should start
slowly to recover as the government is starting to ease the restrictions. Also,
the management of Pihlajalinna indicated that some signs of recovering demand
have already been seen. During these unexceptional times, complete outsourcings
and other fixed-price invoicing have supported the company as the profitability
of these kinds of contracts normally remains stable, even during times of lower
demand. Also, the coronavirus should not have significant impacts on the demand
of housing services for the elderly or recruitment services. Thus, more than
half of the business operations are expected to remain stable during this time.
The outlook for H2 still remains blurry as the visibility around the situation
is very weak. Therefore, guidance for 20E was not given at this point.

“HOLD” (“BUY”) with TP of EUR 16

We have cut our 20E adj. EBIT estimate by ~20% while making only minor
adjustments to our revenue expectation. We expect 20E revenue of EUR 517m (-0.3%
y/y) and adj. EBIT of EUR 21.6m (3% y/y). The tender offer by Mehiläinen is
currently being under review of the FCCA (in the phase two investigation). The
investigation process should be completed at the end of Q2 or latest during Q3.
We keep our TP at the tender offer price of EUR 16 and downgrade our rating to
“HOLD” (prev. “BUY”).



Open report


PIHLAJALINNA - Q1 RESULT SLIGHTLY BELOW EXPECTATIONS

08.05.2020 - 08.40 | Earnings Flash

Pihlajalinna’s Q1 result was slightly below our expectations but in line with
consensus. Q1 revenue amounted to EUR 133m vs. EUR 135m/133m Evli/cons, while
adj. EBIT landed at EUR 4.2m vs. EUR 5.2m/4.4m Evli/cons estimates. Guidance for
20E was not given at this point.

Read more

 * Q1 revenue was EUR 133m vs. EUR 135m/133m Evli/cons estimates. Revenue grew
   by 0.4% y/y.
 * Q1 adj. EBITDA was EUR 12.7m (9.5% margin) vs. EUR 14.2m/13.2m Evli/cons
   estimates.
 * Q1 adj. EBIT was EUR 4.2m (3.2% margin) vs. EUR 5.2m/4.4m (3.9%/3.3%)
   Evli/cons estimates
 * Q1 EPS was EUR 0.06 vs. EUR 0.12/0.10 Evli/cons.
 *  According the company, sales and profitability developed as planned during
   the first months of the year, prior the coronavirus epidemic.
 *  Pihlajalinna did not provide a guidance for 20E at this point due to the
   coronavirus.

Open report


EXEL COMPOSITES - THE STORY IS NOT DERAILED

07.05.2020 - 09.30 | Company update

Exel’s Q1 met expectations. The pandemic has so far had a limited impact on
operations. Short-term demand outlook is uncertain, but we don’t see long-term
fundamentals impaired. Our TP is now EUR 5.50 (6.75), rating still BUY.

Read more

Strong development continued during Q1

Exel’s EUR 27.8m Q1 revenue grew by 3% y/y and matched EUR 27.9m/27.2m Evli/cons
estimates. The company updated its reporting structure, now disclosing revenue
for seven customer industries instead of the previous three broad segments.
Buildings & infrastructure and Wind power, which previously made up the
Construction & Infrastructure segment, reported a combined EUR 12.0m in revenue,
which was in line with our estimate (Wind power only grew by 1% y/y due to
timing issues). Machinery & electrical, Transportation and Telecommunications,
i.e. the former parts of Industrial Applications, reported a combined EUR 8.4m.
This was less than we expected but Equipment & other industries and Defense made
up with a total of EUR 7.4m. Adjusted EBIT, at EUR 2.1m, also met EUR 2.2m/2.0m
Evli/cons estimates. ROCE increased to 12% from 3% a year ago and the US unit
reached profitability. Order intake growth accelerated to 23% y/y pace and the
EUR 34.5m in new orders meant order backlog stood at EUR 37.1m, up 50% y/y. A
big US order is scheduled to be delivered through FY ’20.

We now expect adjusted EBIT to increase to EUR 7.8m

Although strong development continued Exel is not immune to macro uncertainty
and thus the company withdrew guidance. We revise our estimates down. We
previously expected 6% top line growth for this year, and we have revised the
figure down to 3%. We cut our FY ’20 EBIT estimate down by EUR 0.9m to reflect
potential operational challenges. In our opinion the long-term case remains
intact. Exel also has a good liquidity situation. The EUR 10m overdraft facility
was extended by two years.

We cut our TP due to significantly higher uncertainty

In our view higher multiples are justified by the fact that Exel has continued
to perform according to expectations. Meanwhile the pandemic raises uncertainty
even if development has remained good. We update our TP to EUR 5.50 (6.75) due
to lowered estimates and higher uncertainty; yet in our view Exel still trades
at relatively low multiples and we thus retain our BUY rating.

Open report


ETTEPLAN - BETTER THAN FEARED

06.05.2020 - 10.00 | Company update

Etteplan’s Q1 results were better than feared and market turbulence had a rather
minor impact, with a slight decline in organic growth. We expect an average
organic growth of around -7% in 2020 and EBITA to decline to EUR 16.9m (2019:
25.9m). We retain our HOLD-rating with a target price of EUR 8.0 (6.9).

Read more

Q1 results better than expected
Etteplan’s Q1 results beat our and consensus estimates. Revenue amounted to EUR
71.3m (EUR 67.0m/70.0m Evli/Cons.) and EBIT to EUR 5.7m (EUR 4.4m/5.0m
Evli/cons.). The assumed effect of the COVID-19 pandemic and labor market
turbulence in Finland on Q1 was fortunately smaller than expected. The organic
growth did however turn negative and was -1.9% on comparable FX. The number of
hours sold in China decreased 25% y/y but business was nearly back to normal by
the end of March.

We expect 2020 organic growth of around -7%
Uncertainty in the coming quarters is elevated by the COVID-19 pandemic and
visibility is low, due to which Etteplan is also not giving a guidance for 2020.
We use the number of temporary layoffs as a benchmark for our 2020 estimates,
for which we assume an upper bound for the Q2 average FTE capacity decrease of
around 8%. Pricing pressure is further likely to increase along with a risk for
credit losses, for which Etteplan made minor reservations in Q1. We currently
assume that the situation will improve in the latter quarters but still expect
an average organic growth of around -7% in 2020, with our 2020 revenue estimate
at EUR 259.8m (2019: 262.7m). We expect 2020 EBITA to decline to EUR 16.9m (2019
25.9m).

HOLD with a target price of EUR 8.0 (6.9)
Etteplan is currently trading at 8.2x 2020 EV/EBITDA on our estimates, with
peers trading at ~8.8x. With the COVID-impact now more accurately reflected in
peer multiples we assign a higher weight on peer multiples, keeping the
pre-COVID average NTM EV/EBITDA of 9.0x as a benchmark, and along with some
added confidence from the Q1 report raise our target price to EUR 8.0 (6.9) and
retain our HOLD-rating.

Open report


EXEL COMPOSITES - Q1 AS EXPECTED BUT GUIDANCE IS OFF

06.05.2020 - 09.35 | Earnings Flash

Exel Composites’ Q1 results met expectations. The company nevertheless had to
withdraw FY ’20 guidance. The pandemic has so far had only a limited impact on
business.

Read more

 * Q1 revenue was EUR 27.8m vs EUR 27.9m/27.2m Evli/consensus estimates, thus
   increasing by 3% y/y. The pandemic impacted business only in China during Q1,
   where production has resumed to full capacity. The UK unit has been running
   at reduced capacity since April.
 * Exel Composites updated its reporting structure. The company previously
   reported revenue for three broad segments and now discloses figures for seven
   customer industries. In Q1 most of the customer industry revenues grew y/y,
   excluding Transportation and Telecommunications. 
 * Exel Q1 adjusted operating profit stood at EUR 2.1m compared to EUR 2.2m/2.0m
   Evli/consensus estimates.
 * Order intake increased by 23% y/y to EUR 34.5m. Order backlog was thus 50%
   higher than a year ago.
 * Exel Composites issued an outlook on Feb 18 according to which revenue and
   adjusted operating profit are expected to increase in 2020 compared to 2019.
   The company now withdraws the guidance due to poor short-term visibility.

Open report


ASPO - IMPROVEMENT OUTLOOK UNCLEAR

06.05.2020 - 08.55 | Company update

Aspo’s operations ran rather normal in Q1, but profitability is under more
pressure in Q2 and it’s quite uncertain how strong EBIT might rebound in H2’20.
We have cut our estimates, our TP is now EUR 6.00 (6.25), rating HOLD.

Read more

The segments will perform far short of their potential

The nascent pandemic began to impair ESL’s EBIT early on in Q1 as the escalating
situation in China had a substantial negative effect on shipping rates. ESL’s Q1
EBIT thus fell to EUR 2.3m from EUR 3.2m a year ago. ESL was able to run its
operations without interruptions and cargo volumes declined only slightly to
3.5m tonnes (3.6m tonnes a year ago), helped by stable levels for smaller
vessels. Demand for larger vessels, however, remains rather weak and this also
negatively affects demand for loading services. Q2 is thus set to be worse.
Telko’s EUR 2.4m EBIT in the face of falling volumes and prices was in our view
strong show (revenue down 12% y/y), yet the operational improvements are
probably not going to help figures that much in the near-term considering the
kind of macroeconomic outlook e.g. vaporizing oil prices are indicating.
Leipurin’s EBIT improved to EUR 0.6m, but many customers such as restaurants,
cafes and small bakeries are suffering. Large industrial bakeries saw demand
briefly spike but the situation has since normalized.

We now expect FY ’20 EBIT to decline almost 20%

We have cut our estimates especially for Telko. We now expect Telko’s FY ’20
revenue to decline by 14% and see EBIT down to EUR 6.4m compared to EUR 8.0m
last year. For Q2 we see Telko revenue down 22% y/y. We estimate Aspo’s FY ’20
EBIT at EUR 17.4m (previously estimated EUR 20.7m) as macroeconomic recovery
prospects have continued to deteriorate. H2’20 remains particularly uncertain in
terms of ESL’s cargo volume outlook (on which EBIT improvement mainly relies).
In our view Aspo’s creditworthiness is not in question (the company also has a
EUR 67m liquidity position), but from a shareholder point of view the pace of
improvement remains crucial, and right now it’s unclear just how quickly
profitability could reach more attractive levels.

We see current valuation fair in the present environment

Our view is unchanged in the sense that higher profitability potential remains,
but for now it’s difficult to rely on long-term estimates. Our TP is EUR 6.00
(6.25), rating still HOLD.

Open report


INNOFACTOR - RIGHT ON TRACK

06.05.2020 - 08.45 | Company update

Innofactor posted solid profitability figures in Q1 along with continued revenue
growth. A minor COVID-19 impact is expected for the rest of the year. We
continue to expect minor sales growth along with EBITDA improvement in 2020. We
retain our BUY-rating with a target price of EUR 0.95 (0.90).

Read more

Solid Q1 profitability and sales growth
Innofactor’s Q1 results beat our expectations and profitability reached solid
levels. Revenue amounted to EUR 17.2m (Evli 16.8m) and grew 6.2% y/y. EBITDA
amounted to EUR 2.0m (Evli 1.2m). All countries were profitable and showed sales
growth in Q1. Non-cash internal debt exchange rate fluctuations kept PTP in the
red but operating cash flow was a solid EUR 3.1m. The order backlog was at a
good level of EUR 54.1m and the pipeline remains healthy according to the
company. Guidance remains intact, with net sales and EBITDA expected to increase
compared to 2020.

COVID-19 impact expected to be minor
Innofactor expects the impacts of the Coronavirus pandemic on the rest of the
year to be minor. Our 2020 estimates remain largely intact as the solid Q1
offset adjustments due to the pandemic for the later quarters. We expect minor
growth in 2020, with revenue of EUR 65.1m (2019: 64.2m), and an EBITDA of EUR
5.9m (2019: 5.1m). The high share of recurring revenue, some 55% in Q1, will
prove to be beneficial under current circumstances. Additional funding of EUR
3.0m was secured for financial flexibility and possibly pursuing inorganic
growth opportunities. The ownership in Arc Technology was increased and will be
reported as a subsidiary from Q2, 2020 net sales impact is approximately EUR
1.0m.

BUY with a target price of EUR 0.95 (0.90)
Innofactor has been on a good track on EPS growth and improved operational
efficiency and the impact of COVID-19 is estimated to be limited. Valuation has
become fairer on peer multiples, but we see long-term potential intact. We
retain our BUY-rating with a target price of EUR 0.95 (0.90).

Open report


ASPO - Q2 WILL BE WEAKER

05.05.2020 - 10.50 | Earnings Flash

Aspo disclosed its preliminary Q1 figures already on Apr 9, in addition to
withdrawing guidance for FY ’20, so there was little surprise with regards to
the results released today. The pandemic did hurt Q1 figures to some extent, but
the impact will be felt harder during Q2.

Read more

 * Aspo Q1 revenue stood at EUR 133.2m, down 6% y/y.
 * Q1 EBIT was EUR 4.0m. Lower shipping rates in early Q1, due to the situation
   in China back then, affected ESL’s profitability, while in our view Telko and
   Leipurin managed relatively strong operating profits. Q2, however, is bound
   to be worse for all three.
 * ESL Shipping’s top line was EUR 42.7m (EUR 43.7m a year ago) while EBIT
   amounted to EUR 2.3m (EUR 3.2m a year ago). Q1 cargo volumes declined
   slightly y/y from 3.6m to 3.5m tonnes. Volumes for smaller vessels remained
   at a normal level. ESL can operate normally, but both demand and shipping
   rates are set to fall further during Q2.
 * Telko’s Q1 revenue was EUR 63.6m i.e. down 12% y/y, and EBIT came in at EUR
   2.4m (EUR 2.4m a year ago). Aspo expects volumes to decline rapidly during
   Q2.
 * Leipurin posted EUR 26.9m revenue, up 4% y/y, and EUR 0.6m EBIT (EUR 0.5m a
   year ago). Aspo says the pandemic will have a significant negative impact on
   Q2 figures.

Open report


INNOFACTOR - SOLID PROFITABILITY FIGURES

05.05.2020 - 09.30 | Earnings Flash

Innofactor’s Q1 results were above our expectations and profitability was at
solid levels. The net sales in Q1 amounted to EUR 17.2m (Evli EUR 16.8m), while
EBITDA amounted to EUR 2.0m (Evli EUR 1.2m). Guidance remains intact. COVID-19
impact so far limited, minor impact on net sales and profitability expected for
the end of the year.

Read more

 * Net sales in Q1 were EUR 17.2m (EUR 16.1m in Q1/19), slightly above our
   estimates (Evli EUR 16.8m). Net sales in Q1 grew 6.2 % y/y. Net sales grew in
   all countries.
 * EBITDA in Q1 was EUR 2.0m (EUR 0.9m in Q1/19), clearly above our estimates
   (Evli EUR 1.2m), at a margin of 11.4 %.
 * Operating profit in Q1 amounted to EUR 0.8m (EUR -0.1m in Q1/19), clearly
   above our estimates (Evli EUR 0.1m), at a margin of 4.8 %.
 * Order backlog at EUR 54.1m, up 32% y/y. Innofactor received several
   significant orders during the quarter and the order backlog improved q/q.
 * Guidance intact: Innofactor’s net sales and EBITDA in 2020 are estimated to
   increase compared to 2019.
 * The Coronavirus pandemic has so far not had a significant effect on the
   ability to provide services. Innofactor estimates that the pandemic will have
   a minor effect on the net sales and profitability of the rest of the year.
   Third and fourth quarter growth and profitability will depend on the schedule
   of removal of restrictions in the Nordics.
 * EUR 3.0m additional funding received, organic growth opportunities possible

Open report


SOLTEQ - GOOD START GIVEN PREVAILING UNCERTAINTY

04.05.2020 - 09.45 | Company update

Solteq’s Q1 growth was clearly better than expected, 11.6% in comparable terms,
with sales at EUR 15.7m (Evli 14.4m). The adj. EBIT was in line with our
expectation at EUR 0.9m (Evli 0.8m). We expect reasonable growth in comparable
terms in 2020 despite some COVID-19 headwind. We retain our HOLD-rating with a
TP of EUR 1.15 (0.95).

Read more

Growth in Q1 a positive surprise
Solteq’s revenue growth in Q1 was a clear positive, with revenue growing 5.0%
(comparable growth 11.6%) to EUR 15.7m (Evli EUR 14.4m). Growth was driven by
the Solteq Digital as a result of good order intake. The adj. EBIT was in line
with our estimates at EUR 0.9m (Evli EUR 0.8m), with a lower relative
profitability y/y (Q1/19: comp. EBIT 1.2m) due to higher product development
depreciation, long-term project revenue recognition and COVID-19 provisions.

Expect growth in comparable revenue despite COVID-19
Based on the positive Q1 revenue figures we have revised our 2020E estimates,
expecting revenue to amount to EUR 58.9m and increase some 6.5% from 2019
comparable revenue figures. We assume a dip in sales growth during mid-2020 due
to the COVID-10 pandemic but for growth to pick up in 2021. We expect the adj.
EBIT in 2020E (Evli EUR 2.4m) to be slightly below 2019 comparable figures
largely due to an increase in depreciation related to capitalized product
investments. Solteq does not provide a guidance for 2020 due to the pandemic.
During 2021-2022 we expect stronger relative growth pick up in Solteq Software
with the ramp-up of new projects and a perceived lesser impact of the pandemic
along with a notable improvement in relative profitability.

HOLD with a target price of EUR 1.15 (0.95)
On our revised estimates we retain our HOLD-rating with a target price of EUR
1.15 (0.95). Should growth continue at a similar pace as in Q1 valuation upside
potential would be clearer, but visibility is currently limited due to the
COVID-19 pandemic and earnings multiples on our estimates rather unattractive.

Open report


SRV - GOOD START TO THE YEAR

30.04.2020 - 09.45 | Company update

SRV’s Q1 results were better than expected, most importantly profitability
improved to healthy levels (EBIT Act./Evli EUR 4.5m/-5.1m), and order intake is
showing positive development. Steps to improve the financial position continue
to be of focus, COVID-induced uncertainty poses a threat to shopping centre exit
plans. We retain our HOLD rating with a TP of EUR 1.1 (1.0).

Read more

Back to healthier profitability in Q1
SRV’s Q1 results were better than expected. Revenue amounted to EUR 208.1m (EUR
187.0m/198.0m Evli/cons.) and EBIT to EUR 4.5m (EUR -5.1m/-0.4m Evli/cons.).
Compared to our estimates, profitability was higher mainly due to a misjudgment
of FX hedging and the higher revenue. Q1 included EUR 2.1m profit margin
eliminations from the sale of holdings in REDI and Tampere Deck and Arena.
Overall, Q1 profitability was in our view a clear but still early positive sign
of a turnaround. New orders have developed positively so far during 2020, with
EUR 198m new orders in Q1.

2020 EBIT estimate raised to 14.8m (4.3m)
Apart from adjustments based on Q1 figures, our 2020 estimates are largely
intact. SRV’s estimate for developer-contracted housing unit completions in 2020
was revised to 520 (586), but we had for housing construction already as a
precaution to possible near-term housing market uncertainty due to the
coronavirus pandemic assumed a clearly lower number of units recognized as
income compared to completion guidance. Our revised 2020E estimates for revenue
and EBIT are EUR 957.2m (prev. 956.2m) and EUR 14.8m (prev. EUR 4.3m).

HOLD with a target price of EUR 1.1 (1.0)
Following estimates revisions, we adjust our target price to EUR 1.1 (1.0) and
retain our HOLD-rating. Q1 showed good progress on the profitability front, next
steps will be the measures to improve the financial position. Received
commitments support the upcoming rights issues, shopping centre exits will
likely see delays due to the COVID-induced uncertainty.

Open report


FINNAIR - FIGURING OUT THE NEW NORMAL OF AIR TRAVEL

30.04.2020 - 09.25 | Company update

Finnair’s Q1 result was weak as expected due to the coronavirus pandemic.
Revenue declined by 16% y/y to EUR 561m while adj. EBIT was EUR -91m. We have
decreased our 20E-22E estimates and downgrade our rating to “SELL” (“HOLD”) with
TP of EUR 3.3 (4.0).

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Weak Q1 result due to COVID-19
Finnair’s Q1 result was heavily impacted by COVID-19. Revenue declined by 16%
y/y to EUR 561m vs. EUR 585m/555m Evli/cons. Adj. EBIT was below estimates at
EUR -91m vs. EUR -73m/-59m Evli/cons. ASK decreased by 9.4% y/y while RASK
decreased by 7.3% y/y. The company expects a significant comparable operating
loss in 20E. Earlier Finnair cut its capacity by over 90% due to the coronavirus
and the company will operate the current minimum network throughout Q2. Finnair
estimates that its comparable operating result will be a daily loss of approx.
EUR 2m throughout Q2.

Ugly Q2 ahead – H2 remains blurry
Due to the coronavirus pandemic, Q2E result will be even uglier than in Q1. We
expect Finnair’s Q2E ASK to decrease by 95% y/y, resulting in a significant
decline in revenue. We expect comparable operating loss of EUR ~170m in Q2E. The
situation should start slowly to recover after Q2 but we still expect
significant capacity cuts during the late summer and autumn. H2’20E remains
blurry as it still is unknown how the coronavirus situation will evolve in
different markets. Finnair also gave insights of how the mid-term outlook of air
travel might look like and indicated that the passenger numbers are not expected
to recover to the levels prior the crisis at least not during the next couple of
years. It is likely that the air travel will face permanent structural changes
and will never return as it was before the crisis.

“SELL” (“HOLD”) with TP of EUR 3.3 (4.0)
We have decreased our 20E revenue estimate by ~20% and adj EBIT estimate by
~80%. We have also cut our 21E-22E revenue estimates by ~14% and adj EBIT
estimates by ~30-50%. We now expect Finnair’s 20E revenue to decline by 43% y/y
to EUR 1752m and comparable operating loss of EUR 265m. We note that there are
significant uncertainties with our estimates. Prior the crisis, Finnair had a
strong cash position and a healthy balance sheet. The company is also
implementing a substantial funding plan, including sale and leasebacks of
unencumbered aircraft, a revolving credit facility of EUR 175m, which has
already been raised and a statutory pension premium loan totaling to EUR 600m.
Therefore, we see that Finnair is well placed to continue its operations after
the crisis, even if the situation is prolonged. Finnair is also planning for an
approx. EUR 500m share issue to strengthen its equity. We downgrade our rating
to “SELL” (“HOLD”) with TP of EUR 3.3 (4.0).

Open report


RAUTE - LONG-TERM STORY NOT MUCH CHANGED

30.04.2020 - 09.10 | Company update

Raute’s Q1 results missed our estimates due to order timing and certain delays,
while order intake was a positive surprise. The pandemic has so far had a
limited impact. In the big picture our view is not meaningfully changed since
Raute’s results tend to be volatile also in more normal times. Our TP remains
EUR 21 and rating HOLD.

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Outlook seems to have turned more positive in early Q1
Q1 revenue fell by 42% y/y to EUR 24m vs our EUR 36m estimate. Services’ EUR 10m
top line fell short of our EUR 13m expectation, but most of the gap was due to
project deliveries’ order timing as the EUR 58m Russian order was recognized at
a lower rate than we expected. Certain unseen delivery delays also had an
impact. Project revenue thus amounted to EUR 14m while we had estimated EUR 23m.
The EUR -3.0m EBIT (vs our EUR 1.5m estimate) was also due to higher investments
in R&D, which Raute booked EUR 1.4m in Q1, or slightly higher than our
expectation (Raute says there were certain exceptional items to the line and
says ca. EUR 1.2m would be a more normal figure). The report’s positive note was
found in order intake, which at EUR 25m was above our EUR 15m estimate.
Technology services’ order intake, at EUR 11m, was as we expected and so the EUR
14m in project deliveries orders clearly exceeded our estimate.

Raute’s competitive position is unlikely to be hit
Maintenance and spare parts demand continued good, but safety policies began to
restrict business with the onset of the pandemic. Raute saw positive signs in
terms of potential uptick in demand prior to the pandemic. Since then customers’
comments have been mixed and there’s no consensus on how long-term fundamentals
might have been altered. Our view is that end-demand, i.e. wood-based
construction, is not meaningfully impaired. Government actions could possibly
help construction but right now there are few facts. The EUR 92m order book is
highly current i.e. cancellations are unlikely. The EUR 40m cash position means
liquidity is no problem.

We see reasons why more long-term valuation is justified
Multiples for FY ‘20 begin to look high but should normalize next year. We see
Raute well-positioned for an uncertain macro environment and thus in our opinion
a more long-term view is justified. Our TP is still EUR 21, rating HOLD.

Open report


SOLTEQ - SOLID REVENUE GROWTH

30.04.2020 - 08.30 | Earnings Flash

Solteq’s revenue in Q1 was better than expected at EUR 15.7m (Evli EUR 14.4m).
Comparable growth was 11.6%. The adj. operating profit was in line with
expectations at EUR 0.9m (Evli EUR 0.8m). Product development investments in
2020E EUR 3.0m (2019 3.9m).

Read more

 * Net sales in Q1 were EUR 15.7m (EUR 14.9m in Q1/19), above our estimates
   (Evli EUR 14.4m). Growth in Q4 amounted to 5.0 % y/y. Comparable growth,
   adjusted for the divestment of the SAP ERP business amounted to 11.6%. Growth
   was mainly driven by the Solteq Digital segment. Approximately a quarter of
   sales came from outside Finland.
 * The operating profit in Q1 amounted to EUR 0.7m (EUR 1.5m in Q1/19), in line
   with our estimates (Evli EUR 0.8m). The adj. operating profit amounted to EUR
   0.9m (EUR 1.2m in Q1/19), in line with our estimate of EUR 0.8m.
 * Capitalized product development investments during Q1/20 amounted to EUR
   1.0m. Solteq expects product development investments in 2020 to amount to EUR
   3.0m (2019: EUR 3.9m).
 * Solteq Digital: Revenue in Q1 amounted to EUR 11.3m (Q1/19: EUR 10.7m).
   Comparable growth 15.5%. The adj. EBIT amounted to EUR 0.7m (Q1/19: EUR
   0.6m).
 * Solteq Software: Revenue in Q1 amounted to EUR 4.3m (Q1/19: EUR 4.2m). Growth
   was 2.5%. The adj. EBIT amounted to EUR 0.2m (Q1/19: EUR 0.7m).
 * Solteq announced a change to its dividend proposal due to uncertainty caused
   by the coronavirus pandemic and the BoD is to propose that no dividend be
   distributed.

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TOKMANNI - EXPECTING A QUICK RECOVERY AFTER THE CRISIS

30.04.2020 - 07.45 | Company update

Tokmanni’s Q1 revenue increased by 5.8% y/y to EUR 199m (EUR 197m our view),
while adj. EBIT was EUR 0.3m (EUR -2.2m our view). We expect sales and margins
to decline in Q2 due to the movement restrictions but the situation should
normalize relatively fast during the summer. We keep our rating “BUY” with TP or
EUR 13.5 (12.5).

Read more

Good sales and profitability development in Q1
Tokmanni’s Q1 result was slightly above estimates as revenue increased by 5.8%
y/y to EUR 199m vs. EUR 197m/194m Evli/cons. LFL growth was 4.4%. Revenue was
supported by good growth in online sales while the mild winter in Southern
Finland had a negative impact on sales. The movement restrictions that came into
force in mid-March had also a negative impact. For the first time in the
company’s history, adj. EBIT was positive in Q1 as it amounted to EUR 0.3m vs.
EUR -2.2m/-1.4m Evli/cons. The positive development in EBIT was mainly due to
improved adj. gross margin which was 32.1% (Q1’19: 31.2%). Due to the situation
around the coronavirus, the company did not provide a guidance for 20E.

Attracting new customer groups as the economic outlook weakens
The customer numbers in stores saw a significant drop when the movement
restrictions came into force in mid-March. The stores have been open during this
exceptional time. We expect the customer numbers to remain in a lower level
during Q2 compared to the normal levels but expect the numbers to increase
relatively fast after the restrictions are removed. We expect good growth in
grocery sales and as people are staying at home, the demand in categories such
as leisure and gardening is likely to remain strong. As an only nationwide
general discount retailer with a broad product assortment, we expect Tokmanni to
attract new customer groups as it is likely that consumers become more price
conscious when the economic outlook weakens and the purchasing power declines.
We expect a decline in sales and margins in Q2 compared to the previous year but
the situation should normalize relatively quickly after that. Due to the
temporary changes in the sales mix, we expect only a slight improvement in gross
margin in 20E.

“BUY” with TP of EUR 13.5 (12.5)
After the Q1 result we have increased our 20E revenue expectation by ~1% and
adj. EBIT expectation by 17%. We now expect 20E revenue of EUR 931m (-1.4% y/y)
and adj. EBIT of EUR 64.5m (-8% y/y). On our estimates, Tokmanni trades at
20E-21E EV/EBIT multiple of 16.0x and 11.9x, which translates into ~15-30%
discount compared to the international peers. With the estimates upgrade, we
increase our TP to EUR 13.5 (12.5) and retain our rating “BUY”.

Open report


CONSTI - ORDER BACKLOG DECLINES SHOWING

30.04.2020 - 07.30 | Company update

Consti’s Q1 revenue declined more than expected (Act./Evli EUR 59.0m/64.7m),
while EBIT was below our overly optimistic estimates (Act./Evli EUR 0.5m/1.9m).
The impact of COVID-19 has been limited, some headwind is seen in new projects.
We adjust our TP to EUR 7.0 (7.2), HOLD-rating remains intact.

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Below our optimistic estimates, good cash conversion
Consti’s Q1 results were below estimates but quite in line with company
expectations. Revenue declined more than expected, 19.7% y/y, to EUR 59.0m (EUR
64.7m/67.9m Evli/cons.). EBIT was below our estimates as a result of the lower
revenue and admittedly also our overly optimistic estimates, at EUR 0.5m (EUR
1.9m/0.4m Evli/cons.). Conti’s cash conversion remained solid (LTM cash
conversion ratio 105.7%) and free cash flow amounted to EUR 2.0m. The order
intake development was positive and amounted to EUR 62.1m, with the order
backlog at EUR 202.2m (-14.9% y/y).

Some headwind seen in new projects
We have lowered our estimates based on the perceived new revenue level after the
high volumes in 2019 and Q1 figures. We now expect revenue of EUR 271.9m (prev.
282.3m) and EBIT of EUR 7.6m (prev. 10.1m) in 2020E. The coronavirus pandemic
has so far had a limited impact on Consti, as worksites have been able to be
kept open. Negotiations for new renovation projects have been successful, for
instance a EUR 11.3m school renovation project. Some projects in the negotiation
stage have however been cancelled and the start of some projects have been
postponed. Our estimates currently only include a limited impact of the
pandemic.

HOLD with a target price of EUR 7.0 (7.2)
On our revised estimates we adjust our target price to EUR 7.0 (7.2), valuing
Consti at ~10x 2020E EV/EBIT, and retain our HOLD-rating. Uncertainty is
elevated by the pandemic and the St. George arbitration proceedings, which saw
the time limit for delivering the final arbitration award extended to June 2021.

Open report


FINNAIR - SIGNIFICANT LOSSES DUE TO COVID-19

29.04.2020 - 09.35 | Earnings Flash

Finnair’s Q1’20 adj. EBIT was EUR -91m vs. our expectation of EUR -73m and
consensus of EUR -59m. Revenue decreased by 16% and was EUR 561m vs. our
expectation of EUR 585m and consensus of EUR 555m.

Read more

 * Q1 revenue was EUR 561m vs. EUR 585m/555m Evli/cons.
 * ASK decreased by 9.4% y/y in Q1. RASK decreased by 7.3% y/y.
 * Q1 adj. EBIT was EUR -91m vs. EUR -73m/-59m Evli/cons. Q1 comparable EBITDA
   was EUR -8.6m vs. EUR 4.5m our view.
 * Absolute costs in Q1: Fuel costs were EUR 144m vs. EUR 132m our view. Staff
   costs were EUR 136m vs. EUR 117m our view. All other OPEX+D&A combined were
   EUR 386m vs. EUR 425m our view.
 * Unit costs: CASK was 6.75 eurocents vs. 6.81 eurocents our view.
 * Q1 EPS was EUR -1.14 vs. -0.61/-0.70 Evli/cons.
 * Finnair expects that comparable operating loss will be significant in 20E.
   The company estimates that with the current minimum network, its comparable
   operating result will be a daily loss of approximately 2 million euros
   throughout the second quarter, despite cost adjustments.

Open report


RAUTE - MISS DRIVEN BY ORDER BOOK TIMING

29.04.2020 - 09.35 | Earnings Flash

Raute’s Q1 revenue and EBIT came in clearly below our expectations. According to
Raute the pandemic had some negative impact, but the miss relative to our
estimates seems to have been mostly attributable to order book scheduling. Order
intake was clearly above our estimate, meaning order book increased slightly
during the quarter.

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 * Raute posted EUR 23.8m Q1 revenue, compared to our 36.0m estimate. Project
   deliveries generated EUR 14.0m revenue (which we had expected at EUR 23.0m),
   while technology services sales amounted to EUR 9.8m (vs our EUR 13.0m
   estimate). The rather low top line figure was due to the timing of order book
   and a few projects’ postponing but the pandemic also had a negative impact,
   which Raute says was limited but not insignificant.
 * Q1 EBIT amounted to EUR -3.0m vs our EUR 1.5m estimate.
 * Order intake was EUR 25m in Q1 while we expected EUR 15m. The intake
   consisted of small and mid-sized individual production line deliveries and
   modernizations. Most of the orders received were attributable to projects
   that were negotiated long before the pandemic. Raute’s customers have
   continued to start up their investment projects in the face of the pandemic.
 * Order book stood at EUR 92m, compared to our EUR 67m expectation. In our view
   this is a rather strong figure.

Open report


SRV - Q1 FIGURES BEAT EXPECTATIONS

29.04.2020 - 09.15 | Earnings Flash

SRV's net sales in Q1 amounted to EUR 208.1m, above our and consensus estimates
(EUR 187.0m/198.0m Evli/cons.). EBIT amounted to EUR 4.5m, above our and
consensus estimates (EUR -5.1m/-0.4m Evli/cons.). SRV estimates that 520
developer-contracted housing units will be completed in 2020 (previously 586).

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 * Revenue in Q1 was EUR 208.1m (EUR 222.6m in Q1/19), above our estimates and
   consensus estimates (EUR 187.0m/198.0m Evli/Cons.). Growth in Q1 amounted to
   -6.5 % y/y.
 * Operating profit in Q1 amounted to EUR 4.5m (EUR 3.3m in Q1/19), above our
   estimates and consensus estimates (EUR -5.1m/-0.4m Evli/cons.), at a margin
   of 2.2 %. Operative operating profit was EUR 5.0m (Evli EUR 0.9m).
 * EPS in Q1 amounted to EUR -0.13 (EUR -0.02 in Q1/19), below our estimates and
   consensus estimates (EUR 0.07/-0.08 Evli/cons.).
 * The order backlog in Q1 was EUR 1,361.5m (EUR 1,782.5m in Q1/19), down by
   -23.6 %.
 * Construction: Revenue in Q1 was EUR 204.9m vs. EUR 186.3m Evli. Operating
   profit in Q1 amounted to EUR 6.2m vs. EUR 3.4m Evli.
 * Investments: Revenue in Q1 was EUR 1.6m vs. EUR 1.2m Evli. Operating profit
   in Q1 amounted to EUR 1.4m vs. EUR -7.5m Evli.
 * Other operations and elim.: Revenue in Q1 was EUR 1.6m vs. EUR -0.5m Evli.
   Operating profit in Q1 amounted to EUR -0.2m vs. EUR -1.0m Evli.
 * SRV estimates that 520 developer-contracted housing units will be completed
   in 2020 (previously 586).
 * The coronavirus pandemic did not substantially affect SRV’s revenue and
   result for January–March.

Open report


TOKMANNI - Q1 RESULT SLIGHTLY ABOVE ESTIMATES

29.04.2020 - 09.05 | Earnings Flash

Tokmanni’s Q1 revenue increased by 5.8% (LFL growth of 4.4%) and was EUR 199.0m
vs. EUR 196.6m/193.5m Evli/consensus. Tokmanni’s adj. EBIT was EUR 0.3m vs. EUR
-2.2m/-1.4m Evli/cons. Adj. gross margin was 32.1% vs. 31.4% Evli. The company
did not provide a guidance for 20E, due to the coronavirus situation.

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 * Q1 revenue grew by 5.8% and was EUR 199.0m vs. EUR 196.6m/193.5m
   Evli/consensus. The leap day had a positive impact on sales. The restrictions
   caused by the coronavirus reduced customer flows towards the end of the
   quarter.
 * Q1 adj. gross profit was EUR 63.8m (32.1% margin) vs. EUR 61.7m (31.4%) Evli
   expectation.
 * Q1 adj. EBITDA was EUR 16.3m vs EUR 13.6m/14.5m Evli/consensus.
 * Q1 adj. EBIT was EUR 0.3m (0.1% margin) vs. EUR -2.2m (-1.1%) our expectation
   and EUR -1.4m (-0.7%) consensus.
 * Q1 eps was EUR -0.04 vs EUR -0.07/-0.06 Evli/consensus
 * Guidance for 20E was not given at this point due to the coronavirus crisis.
   
   

Open report


CONSTI - LOWER REVENUE DRIVES ESTIMATES MISS

29.04.2020 - 09.00 | Earnings Flash

Consti's net sales in Q1 amounted to EUR 59.0m, below our estimates and below
consensus (EUR 64.7m/67.9m Evli/cons.). EBIT amounted to EUR 0.5m, below our
estimates but in line with consensus (EUR 1.9m/0.4m Evli/cons.). Uncertainty has
increased as a result of the coronavirus pandemic, but impact so far limited.

Read more

 * Net sales in Q1 were EUR 59.0m (EUR 73.5m in Q1/19), below our estimates and
   consensus estimates (EUR 64.7m/67.9m Evli/Cons.). Growth in Q1 amounted to
   19.7 % y/y.
 * Operating profit in Q1 amounted to EUR 0.5m (EUR 0.4m in Q1/19), below our
   estimates and in line with consensus estimates (EUR 1.9m/0.4m Evli/cons.), at
   a margin of 0.8 %.
 * EPS in Q1 amounted to EUR 0.01 (EUR -0.08 in Q1/19), below our estimates and
   in line with consensus estimates (EUR 0.15/0.00 Evli/cons.).
 * Free cash flow EUR 2.0 (Q1/19: EUR -3.5m)
 * The order backlog in Q1 was EUR 202.2m (EUR 237.8m in Q1/19), down by -15 %.
   Order intake in the quarter amounted to EUR 62.1m (Q1/19: EUR 73.5m)
 * Uncertainty has increased as a result of the coronavirus pandemic, but impact
   so far limited. Worksites have remained open in all operational areas. Some
   projects in the negotiation stage have been cancelled, and the start of some
   projects that were at the contractual stage has been moved forward.
 * Guidance reiterated: The Company estimates that its operating result for 2020
   will improve compared to 2019.

Open report


VAISALA - CLOUDS OVER W&E WHILE IM KEEPS ON ROCKING

29.04.2020 - 08.45 | Company update

Vaisala delivered a better than expected Q1 result. Overall, Vaisala is well
positioned to weather the corona storm, but clouds are gathering above W&E as
project business is exposed to the pandemic. Given the uncertainty to W&E’s
performance in H2, we do not see short term risk/reward profile particularly
attractive now. Based on our slightly raised estimates, we raise our target
price to 26€ (prev. 25€), our recommendation is now HOLD (prev. SELL).

Read more

No major impact of corona in Q1
Vaisala delivered a better than expected Q1 result as corona did not have major
impact on business in the quarter and delivery capabilities remained good. Q1
net sales grew 4% to 87.2 MEUR vs. 84.5 MEUR our expectation and 84.3 MEUR
consensus. Q1 reported EBIT was 5.2 MEUR (6% margin) vs. our expectation of 2.1
MEUR (3.2 MEUR consensus). EBIT improvement was due to strong 3pp improvement in
gross margins (56.4% vs. 53.2% Q1’19), which was attributed to projects and
digital services in W&E and exceptionally high GM of 65.8% in IM. Q1 order
intake decreased -21% due to lower order intake in W&E. It’s worth noting
however that order intake comparison period was exceptionally good (including
two large projects) and variations between quarters can be large depending on
timing of projects. Order book grew +2% q/q and -6% y/y. The Ethiopian project
order (13 MEUR) is not yet included in order book.

W&E business exposed while IM continues on track
Vaisala reiterated its 2020 guidance (updated on April 21st); expecting net
sales of 370–405 MEUR and EBIT of 34–46 MEUR. With W&E’s current strong order
book, descent order intake, and delivery capabilities remaining at current
acceptable levels, we expect W&E business to perform well in H1. The effects of
the corona pandemic impact more on W&E business in H2, where delays or
postponements of projects become more likely if current situation is prolonged.
Vaisala sees developed countries market remaining more stable while developing
countries being more hit by the pandemic. IM is expected to continue growing,
albeit slower than last year’s organic growth of roughly 9.5%.

Valuation stretched given weakened financial outlook in W&E
We’ve only made small adjustments to our estimates based on the report. We
expect IM to continue performing well, while W&E to decline in H2 partly due the
pandemic and high comparison period. We expect 2020e net sales to decline 3% to
392 MEUR and reported EBIT to decline to 39 MEUR, mainly due to the lower
performance in W&E in H2. On our estimates, Vaisala is still trading at clear
premiums compared to our peer group. Also, our 2020-21e PPA-adjusted EV/EBIT
multiples of 22x and 19x, are ~25% above our peer group. Given the uncertainty
to W&E’s performance this year, we do not see short term risk/reward profile
particularly attractive now. Based on our slightly raised estimates, we raise
our target price to 26€ (prev. 25€), our recommendation is now HOLD (prev.
SELL). Our target price values Vaisala at 20-21e EV/EBIT multiples of 23.5x and
20x which is above peer group, reflecting Vaisala’s strong sustainability
profile, growing dividend, and especially IM’s highly profitable growth with
possibility of further add-on acquisitions.

Open report


DETECTION TECHNOLOGY - CORONA RELATED BUMP IN THE ROAD

28.04.2020 - 09.00 | Company update

DT’s Q1 result clearly missed expectations due to weaker than expected demand
and profitability development caused by COVID-19. DT expects weakness in SBU
sales to continue throughout the year, while MBU is enjoying good momentum. DT
is well positioned to weather out the corona storm and its competitive position
with new products remains good. We have lowered our estimates for 2020e and
based on the estimates cut, we lower our target price to 22€ (prev. 24€) but
maintain BUY recommendation.

Read more

Corona pandemic affecting SBU demand and profitability
DT’s Q1 net sales amounted to 19.9 MEUR (-13.6% y/y) vs. 22.2/22.0 MEUR
Evli/consensus estimates. Q1 EBIT was 1.2 MEUR (5.9% margin) vs. 2.8/2.6 MEUR
Evli/cons. R&D costs amounted to 2.6 MEUR or 13% of net sales (11% Q1’19). SBU
had net sales of 11.5 MEUR vs. 14.2 MEUR Evli estimate. SBU sales declined -20%
y/y, mainly due the COVID-19 pandemic. Both air and land transport decreased
from 30 to 90% in different segments. MBU delivered net sales of 8.4 MEUR which
was in line with our estimate of 8.0 MEUR. Net sales of MBU decreased by -2% y/y
due to the expected softness in the CT market outside China at the beginning of
the year, and the ramp-down in production of a product family started by one of
DT’s key customers last year. The COVID-19 pandemic increased demand in CT
applications towards the end of Q1, but relatively high comparison figures led
to the overall development in net sales remaining negative.

Mid-term fundamentals remain good for both BU’s
DT expects lower demand in the security segment to continue in Q2 and SBU sales
to decrease in 2020. DT sees that despite the short-term challenges in the
aviation segment, ECAC C3 standard equipment upgrades will continue at European
airports, but the deadline for CT machine installations will be probably
extended by 6-12 months. The CT upgrades in the US have continued, however a
slight delay is expected for future purchases. China is also preparing similar
standardization and has informed earlier that they will publish details by the
end of 2020. On the other hand, MBU sales is enjoying better momentum as CT
imaging is used to detect pulmonary changes caused by the COVID-19 virus, as
well as in the diagnosis and treatment of patients. DT sees demand in medical CT
applications remaining at a good level also in H2 and MBU sales to increase in
2020.

Investment story remains attractive despite bump in the road
Based on the report, we have cut our 2020e sales and EBIT estimates by 8% and
23% respectively, while keeping our 2021-22e estimates broadly unchanged. We
expect SBU sales to decline -13% from last year’s highs and MBU to grow 17%,
resulting in 2020e net sales to decline -3% and EBIT of 13 MEUR. On our revised
estimates, DT is trading at 19x and 13x EV/EBIT multiples for 20E-21E. Valuation
picture is now more mixed as 2020e metrics will be clearly lower due to the
pandemic, and growth and profitability should resume in 2021e. DT is now trading
on slight EV/EBIT premium on our 2020e estimates, but on a 12% discount on our
2021e estimates. Although 2020e will be challenging, DT is well positioned to
weather out the storm and its competitive position with its new products remains
good. Therefore, we continue to see DT as an attractive investment story given
the strong longer-term drivers, especially in China, as well as DT’s compelling
strategy and execution capabilities. Based on the estimates cut, we lower our
target price to 22€ (prev. 24€) but maintain BUY recommendation. Our target
price implies EV/EBIT multiple of 15.5x on our 2020e estimates, broadly in line
with our peer group.

Open report


TALENOM - DEFENSIVE CHARACTERISTICS SHOWING

28.04.2020 - 09.00 | Company update

Talenom’s Q1 results slightly beat our expectations, with net sales of EUR 17.4m
(Evli 16.9m) and EBIT of EUR 3.7m (Evli 3.5m). Net sales and EBIT guidance for
2020 was set at EUR 64-68m and 12-14m respectively. Growth outlook remains
favourable and any plausible impact from the coronavirus pandemic for now
appears limited. We adjust our target price to EUR 7.0 (6.7), HOLD-rating
intact.

Read more

Q1 slightly better than expected
Talenom’s Q1 results were slightly better than expected. Net sales grew 17.4% to
EUR 17.4m (Evli 16.9m) and EBIT amounted to EUR 3.7m (Evli 3.5m). Talenom gave a
numeric guidance for 2020, expecting net sales of EUR 64-68m and EBIT of EUR
12-14m. Sales plans have progressed almost in line with plans despite the
coronavirus pandemic. Investments are being made to customer interfaces and
plans for a new concept for small customers were floated, which sounds promising
but will likely have little sales impact before 2021. Additional financing of
EUR 10m was secured for acquisitions and growth projects in Finland and Sweden.

Near-term risks limited
Our post-Q1 estimates revisions are minuscule and we expect 2020E net sales and
EBIT of EUR 67.3m and EUR 12.5m respectively. Near-term risks due to the
pandemic are limited, with transactional volumes possibly affected. A prolonged
situation and an increase in defaults would have a heavier impact on 2021 due to
customer bookkeeping obligations. The resilience of the bookkeeping market is
noteworthy, and the near-term uncertainty may open more opportunities for
inorganic growth.

HOLD with a target price of EUR 7.0 (6.7)
Talenom remains an attractive investment case through its track-record and
defensive nature, valuation slightly less so, with the share price essentially
at pre-COVID levels. We adjust our target price to EUR 7.0 (6.7), valuing
Talenom at ~32x 2020E P/E, and retain our HOLD-rating.

Open report


TALENOM - EARNINGS FLASH - UPBEAT Q1 REPORT

27.04.2020 - 14.00 | Earnings Flash

Talenom's net sales in Q1 amounted to EUR 17.4m, slightly above our and
consensus estimates (EUR 16.9m/17.0m Evli/cons.). EBIT amounted to EUR 3.7m,
slightly above our and consensus estimates (EUR 3.5m/3.5m Evli/cons.). Net sales
for 2020 are expected to amount to EUR 64-68m and operating profit to EUR
12-14m.

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 * Net sales in Q1 were EUR 17.4m (EUR 14.8m in Q1/19), slightly above our
   estimates and consensus estimates (EUR 16.9m/17.0m Evli/Cons.). Growth in Q1
   amounted to 17.4 % y/y.
 * Operating profit in Q1 amounted to EUR 3.7m (EUR 3.4m in Q1/19), above our
   estimates and consensus estimates (EUR 3.5m/3.5m Evli/cons.), at a margin of
   21.4 %.
 * EPS in Q1 amounted to EUR 0.07 (EUR 0.06 in Q1/19), above our and consensus
   estimates (EUR 0.06/0.06 Evli/cons.).
 * Sales team has changed over to a distance sales model and sales still almost
   in line with plans despite the coronavirus pandemic.
 * An additional loan of EUR 10m has been negotiated, that can be used for
   acquisitions and for other projects in support of growth in Finland and
   Sweden.
 * Guidance 2020: Net sales for 2020 are expected to amount to EUR 64-68m and
   operating profit to EUR 12-14m (Evli 2020E: 68.8m and 12.6m respectively).
   Previous guidance: 2020 is expected to be in line with 2019 in terms of
   relative growth in net sales and relative profitability.

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DETECTION TECHNOLOGY - CLEAR MISS DUE TO WEAKENED DEMAND AND PROFITABILITY
CAUSED BY COVID-19

27.04.2020 - 09.20 | Earnings Flash

DT’s Q1 net sales were EUR 19.9m (-13.6% y/y) vs. EUR 22.2m/22.0m Evli/consensus
estimates. SBU sales declined -20% to EUR 11.5m (EUR 14.2m our expectation) and
MBU sales declined -2% to EUR 8.4m (EUR 8.0m our expectation). DT’s Q1 EBIT came
in at EUR 1.2 m vs. our estimates of EUR 2.8m (EUR 2.6m cons). DT expects SBU
sales to decrease and MBU sales to increase in 2020.

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• Group level results: Q1 net sales amounted to EUR 19.9m (-13.6% y/y) vs. EUR
22.2m/22.0m Evli/consensus estimates. Q1 EBIT was EUR 1.2m (5.9% margin) vs. EUR
2.8m/2.6m Evli/cons. R&D costs amounted to EUR 2.6m or 13% of net sales (11%
Q1’19).
• Security and Industrial Business Unit (SBU) had net sales of EUR 11.5m vs. EUR
14.2m Evli estimate. SBU sales declined -20% y/y, mainly due the COVID-19
pandemic. Both air and land transport decreased from 30 to 90% in different
segments.
• Medical Business Unit (MBU) delivered net sales of EUR 8.4m which was in line
with our estimate of EUR 8.0m. Net sales of MBU decreased by -2% y/y due to the
expected softness in the CT market outside China at the beginning of the year,
and the ramp-down in production of a product family started by one of DT’s key
customers last year. The COVID-19 pandemic increased demand in CT applications
towards the end of Q1, but high comparison figures led to the overall
development in net sales remaining negative.
• Outlook update: DT expects lower demand in the security segment to continue
and SBU sales to decrease in Q2. Demand in medical CT applications, however,
will remain at a good level, and MBU sales will grow. DT expects the demand in
medical CT applications to remain at a good level also in H2, and MBU sales to
increase in 2020. DT estimates that drop in demand in the security segment will
continue at least to the end of the year, and thus DT expects SBU sales to
decrease in 2020.

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VERKKOKAUPPA.COM - FOCUS ON SUSTAINABLE GROWTH

27.04.2020 - 09.20 | Company update

Verkkokauppa.com delivered a strong Q1 result as revenue increased by 8% y/y to
EUR 125m (121m/118m Evli/cons). Adj. EBIT increased by 63% y/y to EUR 3.8m
(2.7m/2.5m Evli/cons). The management had a good control over the business
despite of the challenging times. We have slightly increased our estimates and
upgrade our rating to “BUY” (“HOLD”) with TP of EUR 4.5 (3.5).

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Strong sales growth without forgetting profitability

Verkkokauppa.com delivered a strong Q1 result. Revenue increased by 8.2% y/y to
EUR 125m (121m/118m Evli/cons). Good sales growth was driven by strong online
sales and effective marketing. Development was good in all the major product
categories but strong performance was also seen in evolving categories such as
sports and home. Gross profit improved by 12% y/y to EUR 19.4m (15.5%) vs. our
EUR 18.3m (15.1%), resulting from good control over sales mix. This impacted
positively on adj. EBIT which was up by 63% y/y, totaling EUR 3.8m (2.7m/2.5m
Evli/cons).

A strong online presence offering competitive advantages

Verkkokauppa.com’s small physical footprint and strong online presence offer the
company competitive advantages amid the coronavirus and the movement
restrictions. The company’s agile business model and a strong cash position
support the company during these challenging times and it enables the company to
develop its business as planned. We don’t expect the coronavirus to have
significant negative impacts on Verkkokauppa.com’s operative business, although
some availability issues might occur in some product categories later in H2. The
increasing uncertainties are more related to the economic outlook and declining
purchasing power. The company has introduced new delivery methods and
sub-categories to enhance customer experience. Going forward, we expect the
sales mix and broad product assortment to be the key drivers behind sustainable
growth as the competition in the consumer electronics market is likely to remain
tight, meaning that seeking growth in this category might become too expensive.

“BUY” (“HOLD”) with TP of EUR 4.5 (3.5)

We have slightly increased our estimates after the Q1 result. We expect 20E
revenue of EUR 523m and EBIT of EUR 13.6m. Thus, our estimates are slightly
above the midpoint of the given guidance (revenue of EUR 510-530m and adj. EBIT
of EUR 12-15m). The outlook in the market remains blurry due to the weak
visibility of the coronavirus and its full impacts but it is likely that the
current situation speeds up the more permanent shift into online which benefits
players like Verkkokauppa.com. On our estimates, the company trades at 20E-21E
EV/sales multiple of 0.3x which translates into ~40 discount compared to the
peers. We upgrade to BUY (HOLD) with TP of EUR 4.5 (3.5).

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SCANFIL - OUTLOOK BASICALLY UNCHANGED

27.04.2020 - 09.15 | Company update

Scanfil operations continue to develop on a positive note as industrial OEM
customer demand seems remarkably strong in the face of the pandemic. We have
made rather small downward revisions to our estimates due to increasing
uncertainty. Our TP is EUR 5.25 (5.75), rating BUY.

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No dramatic effects to segment performances so far
Q1 revenue grew by 11% y/y (two-thirds due to the HASEC acquisition) to EUR 144m
and thus beat estimates by ca. EUR 10m. ROI, at 17.8% in Q1, continued to
develop strong. February saw the Chinese plants stall due to the coronavirus
situation that hadn’t back then escalated into a pandemic. There has been only
one production plant closure so far since (in Poland). In fact, March was the
strongest month in terms of (organic) growth and helped to compensate for slow
February. According to Scanfil supply chains have continued to work well and
only a few customer accounts have seen demand forecasts drop for Q2 and Q3.
Naturally uncertainty is growing but for now Scanfil can reiterate its previous
strong outlook for this year.

Scanfil continues to perform and is ready for acquisitions
We have slightly revised our estimates down due to increased uncertainty. The
adjustments are remarkably small, amounting to an average of EUR 6m in quarterly
revenue, or 4%. We have also done a small downward adjustment to operating
margin, now expecting 6.5% instead of the previous 6.75%. We thus see EBIT at
the low bound of the guidance range i.e. at EUR 39.0m; we previously expected
EUR 41.4m. Scanfil says it has a liquidity position of some EUR 60m ready to be
deployed for e.g. M&A.

A valuation above peer multiples is well justified
The pandemic seems to pose no cracks to Scanfil’s fundamentals. According to one
narrative the pandemic will reverse globalization and thus supply chains and
actors such as contract manufacturers are hit particularly hard. In our opinion
such stories fly a bit too high and are based on unsound reasoning. Scanfil’s
comments readily confirm industrial OEMs still want to outsource significant
amounts of production. We update our TP to EUR 5.25 (5.75) due to increased
macroeconomic uncertainty but note how few facts seem to impair Scanfil’s
long-term story. We see good upside to Scanfil’s 5.5x EV/EBITDA and 7.5x EV/EBIT
‘20e valuation multiples.

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RAUTE - OUTLOOK WEAKENS

27.04.2020 - 09.00 | Company update

Raute downgraded its outlook for FY ‘20 ahead of the Q1 report, which the
company releases on Wed, 29 Apr. We cut our estimates; TP now EUR 21 (25),
rating still HOLD.

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We expect FY ’20 revenue down almost 20% y/y
Raute issued a profit warning. The company had previously guided flat revenue
and decreasing operating profit for 2020 compared to 2019. The updated outlook
guides declining top line as well as clearly weakening operating profit. The
downgrade is not particularly surprising since Raute noted increasing
uncertainty in the operating environment already last year due to cooling demand
in the wake of major new capacity investments. There was a dearth of demand for
mid-sized projects like modernizations. Raute saw demand for large and small
orders at a good level, however it’s always hard to anticipate when big
investment decisions will receive green light and the current extraordinary
macroeconomic environment will not help. Safety policies will also limit
assembly, commissioning and maintenance works at plywood and LVL mills.

We estimate FY ’20 EBIT falling close to 40% y/y
We cut our estimates for this year and next. We expect Raute’s top line at EUR
123m in ’20 (previously estimated EUR 142m) while we see EBIT down to EUR 5.2m
(prev. EUR 7.6m). This year finds support from the record EUR 58m Segezha order,
but extended weakness in order intake will mean next year revenue prospects will
be under pressure as well. Should order intake begin to improve during the
latter half of ‘20 we expect Raute to achieve rather stable development in ’21.
We now estimate ’21 revenue at EUR 127m (prev. EUR 140m) and have revised ’21
EBIT estimate down to EUR 7.4m (prev. EUR 9.3m). We don’t see the pandemic
hurting Raute’s long-term competitive positioning as the market leader within
its niche. If anything, in our view it’s more likely that the opposite would be
true.

We still view valuation neutral given competitive position
Raute trades some 7x EV/EBITDA and 12x EV/EBIT on our new estimates for ‘20. On
our next year estimates the multiples stand at 5.5x and 8.5x, respectively. In
our view current valuation falls within an acceptable range considering earnings
have plenty of potential to rebound from the low level to be seen this year. Our
new TP is EUR 21 (25), rating remains HOLD.

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SUOMINEN - LONG-TERM STORY GAINS MORE GROUND

24.04.2020 - 09.10 | Company update

Suominen’s Q1 revenue only slightly exceeded our estimate but as gross margin
improved close to 400bps EBIT came in almost double our estimate. Suominen
upgraded FY ’20 EBIT guidance. We have updated our estimates, and our new TP is
EUR 3.25 (2.50), rating now HOLD (SELL).

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Profitability would have jumped even without the pandemic

Suominen reported flat y/y Q1 revenue at EUR 110.2m, while our estimate was EUR
108.0m. Suominen says its sustainable products sales are developing well (new
products contributed more than 25% of sales vs 20% previously). The investment
in Green Bay, WI plant helped volumes and contributed to a more favorable i.e.
higher quality product mix. The pandemic also began to have a positive effect on
volumes towards the end of Q1. Especially cleaning and disinfection applications
demand has increased. Nonwovens demand in general has received a boost due to
applications like surgical drapes and face masks, however such products
represent relatively small business for Suominen. New products, improved
production and raw material efficiency as well as low raw material prices
together lifted gross margin almost 400bps (we had expected only slight
improvement), and thus EBIT amounted to EUR 5.7m vs our EUR 2.9m estimate.

We now expect FY ’20 EBIT at EUR 23m (prev. EUR 12m)

Suominen sees Q2 another strong quarter, and thus updated FY ’20 guidance, now
guiding clear EBIT improvement (previously improving) even if there’s much
uncertainty with regards to H2’20 as the demand surge induced by the pandemic
may cool down. Nonwovens prices will adjust with a few months’ time lag to
accommodate changes in raw materials prices. We see some downward pressure on Q2
gross margin due to lower nonwovens prices, expecting a 60bps decline to 11.5%.
So far Suominen’s operations have run basically normal. There could be raw
material shortages and Suominen or its customers might have to close plants due
to the pandemic.

Long-term story receives a boost, yet uncertainty still high

Suominen trades 5x EV/EBITDA and 10x EV/EBIT on our estimates for ‘20. In our
view these are attractive levels, yet much depends on the gross margin going
forward. Although new products sell well, the size of the pandemic’s positive
impact is still hard to gauge. Our TP is now EUR 3.25 (2.50), rating HOLD
(SELL).

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SSH - NEW CEO TAKES THE REALM IN EXCEPTIONAL TIMES

24.04.2020 - 09.00 | Company update

SSH’s Q1 report was in line with our expectations and we have not made any
material changes to our estimates based on the report. We continue to see growth
as main value driver and, as noted previously, we see SSH’s limited growth
investment capacity as main strategic obstacle. We maintain our TP of 0.70€, our
recommendation is SELL (prev. HOLD).

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Q1 in line, more transparency to come in reporting

SSH’s Q1 net sales were 3.1 MEUR (3.1 MEUR Evli), an increase of 16% y/y on
relatively low comparison figures, mainly driven by strong license sales and
supported by growth in subscription revenue. Software fees were 0.9 MEUR (0.8
MEUR Evli), professional services were 0.0 MEUR (0.1 MEUR Evli), and recurring
revenue was 2.1 MEUR (2.2 MEUR Evli). Q1 operating loss was –0.6 MEUR (vs. -0.5
MEUR Evli). The report did not provide materially new information that would
affect our estimates at present, but SSH did provide a more transparent and
candid overview into its result and operations than previously. SSH plans on
introducing monthly recurring revenue (MRR) figures in coming quarters.
According to SSH, MRR was approximately 1 MEUR in December (reported FY’19
recurring revenue 8.6 MEUR).

Newly appointed CEO to update strategy in June

SSH’s new CEO, Mr. Teemu Tunkelo started in end of March. Mr. Tunkelo has held
various global management and technology leadership roles in companies such as
Voith, Siemens, ABB, Invensys, and Compaq. According to the CEO, preliminary
guidelines for SSH’s new strategy can be expected in June. He acknowledged the
need for further investments into go-to-market and talked about the potential in
being first mover in cloud PAM (PrivX) and IoT applications. The COVID-19
outbreak has not had a significant impact during the first quarter, but SSH has
seen some project delays and it is still too early to assess the full business
impact of the pandemic. As such, SSH’s cash position is good (11.7 MEUR Q1’20)
and share of recurring revenue around 60%, which should help SSH weather the
storm. SSH is reviewing options for further funding for product development, as
well as options for its 12 MEUR hybrid debt. Negotiations regarding the hybrid
have however stalled due to the pandemic. The hybrid debt’s interest rate
increased from 7.5% to 11.5 % as of March 30th. Under the current circumstances
the hybrid is valuable despite the increase in financial expenses.

Estimates unchanged, target price of 0.70€ maintained

We have not made any changes to our estimates based on the report and we note
that SSH is in a good position to ride out the corona pandemic. After the share
price rally yesterday, current valuation looks challenging given sales growth
uncertainty. On our estimates, SSH is trading at 2020-21e EV/Sales multiples of
2.8x and 2.4x, which is, as previously noted, clearly below the cyber security
sector and could prompt SSH to become an acquisition target of larger players
wanting to enter the space or a consolidation play. However, as a standalone
business, we’d like to see the results of SSH’s strategy materializing somewhat
in the growth figures in order to justify higher valuation multiples.We maintain
our TP of 0.70€, with SELL recommendation (prev. HOLD). Our target price implies
an EV/Sales multiple of 2.2x on our ‘20E estimate, slightly below Nordic
software peers, which we see as warranted given weaker growth and profitability
metrics and the uncertainty to our estimates.

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VERKKOKAUPPA.COM - A STRONG START TO THE YEAR

24.04.2020 - 08.40 | Earnings Flash

Verkkokauppa.com’s Q1’20 result beat our and consensus estimates. Revenue grew
by 8.2% and was EUR 125m vs. Evli EUR 121m and consensus of EUR 118m. Gross
profit was EUR 19.4m (15.5% margin) vs. EUR 18.3m (15.1% margin) Evli view. Adj.
EBIT was EUR 3.8m vs. EUR 2.7m/2.5m Evli/cons. 2020E guidance reiterated: The
company expects revenue to be EUR 510-530m and comparable operating profit to be
EUR 12-15m.

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 * Q1 revenue was EUR 125m vs. EUR 121m Evli view and EUR 118m consensus. Sales
   grew as much as by 8.2% y/y. Revenue growth in Q1 was boosted by strong
   online sales and marketing. All product categories performed well.
 * Q1 gross profit was EUR 19.4m (15.5% margin) vs. EUR 18.3m (15.1% margin)
   Evli view.
 * Q1 adj. EBIT was EUR 3.8m (3.0% margin) vs. EUR 2.7m (2.2% margin) Evli view
   and EUR 2.5m (2.1% margin) consensus. EBIT improved mainly due to gross
   margin improvement.
 * Q1 eps was EUR 0.05 vs. EUR 0.04/0.04 Evli/cons.
 * 2020 guidance reiterated: The company expects revenue to be EUR 510-530m and
   comparable operating profit to be EUR 12-15m.
 * The company also decided on a quarterly dividend of EUR 0.053 per share.

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CAPMAN - GOOD PROGRESS NEGATED BY FV CHANGES

24.04.2020 - 08.30 | Company update

CapMan’s Q1 results were slightly better than expected and underlying
performance remained good, although EBIT as a result of negative fair value
changes as expected fell clearly, to EUR -6.0m (Evli/cons. -7.5m/-3.9m).
Fundraising projects continue but delays of 0-6 months are seen. Cost savings of
up 10% of the cost base are sought without affecting growth ambitions. We retain
our BUY-rating and TP of EUR 1.95.

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Negative FV changes spoiled otherwise good profitability
CapMan’s Q1 results came in slightly better than we had expected, with revenue
of EUR 11.9m (Evli/cons. 10.7m) and EBIT of EUR -6.0m (Evli/cons -7.5m/-3.9m).
Termination of the 2018 share plan caused a one-off cost of approx. EUR 1.4m.
Unrealized FV changes amounted to EUR -10.5m. Profitability of the Management
company and Service businesses improved clearly y/y, the latter aided by success
fees from Scala but also seeing good development overall.

2020 an unfortunate dent to solid progress
With the significant negative FV changes in Q1 and assuming a cautionary view on
carry and success fees in the current market environment we expect adj. EBIT to
decline in 2020 to EUR 1.2m (25.0m). We expect the fee-based profitability to
continue to improve through growth in AUM. Fundraising projects are seen to be
delayed by 0-6 months but are continuing nonetheless, and CapMan also flashed a
second Growth fund. CapMan is seeking to achieve cost savings of up to 10% of
its cost base, which are sought to be achieved without affecting growth
ambitions.

BUY with a target price of EUR 1.95
The expected weak earnings in 2020, mainly due to the negative unrealized FV
changes, makes valuation on near-term figures more challenging. Upside potential
can be seen on 2021E peer multiples and dividend yields but with the weakened
visibility due to the Coronavirus we assume a near-term uncertainty discount and
retain our target price of EUR 1.95 and BUY-rating.

Open report


SCANFIL - GOOD RESULTS AMID THE PANDEMIC

24.04.2020 - 08.30 | Earnings Flash

Scanfil’s Q1 revenue clearly exceeded our and consensus estimates.
Communication, Energy & Automation as well as Industrial segments were stronger
than we expected. Scanfil says profitability developed as expected and reaffirms
FY ’20 outlook.

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 * Q1 top line stood at EUR 144.1m, compared to EUR 133.7m/135.2m Evli/consensus
   estimates.
 * Communication revenue was EUR 22.4m while we expected EUR 16.1m. Scanfil says
   5G network elements were the most important demand driver.
 * Consumer Applications revenue amounted to EUR 18.7m vs our EUR 24.7m
   estimate. Scanfil says the softness was due to a certain account whose demand
   begins in Q2 this year. The coronavirus also had an impact on a couple of
   accounts.
 * Energy & Automation recorded EUR 30.7m compared to our EUR 25.4m estimate.
   Demand was broad and strengthened during the quarter.
 * Industrial top line was EUR 45.6m vs our EUR 38.6m expectation.
 * Medtec & Life Science revenue amounted to EUR 26.7m, in comparison to our EUR
   28.9m estimate.
 * Scanfil’s Q1 EBIT was EUR 8.6m vs EUR 8.7m/8.3m Evli/consensus estimates. The
   6.0% operating margin was thus slightly lower than our 6.5% estimate.
 * Scanfil issued annual guidance on Feb 19, 2020 according to which the company
   saw FY ’20 revenue in the EUR 590-640m range and EBIT at EUR 39-43m. Scanfil
   said the guidance was subject to exceptional uncertainty due to the
   coronavirus situation that was evolving in China back then. The company made
   a certain allowance accordingly. Scanfil now reaffirms the outlook but
   updates the definition of uncertainties with a reference to potential
   negative effects of the pandemic.

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SUOMINEN - STRONG EBIT AND UPDATED GUIDANCE

23.04.2020 - 10.00 | Earnings Flash

Suominen reported Q1 revenue slightly above our estimate, while EBIT came in
double our estimate. The beat was driven by higher gross margin. Suominen
updates its guidance for FY ’20, expecting EBIT to improve clearly (previously
improve).

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 * Q1 revenue amounted to EUR 110.2m vs our EUR 108.0m estimate. EUR 37m was
   attributable to Europe and EUR 73m to Americas. Nonwovens volumes increased
   while prices decreased along with raw materials. Suominen says the pandemic
   helped volumes towards the end of Q1 (for all markets) and expects extended
   strong demand in the short-term. In the long-term the pandemic may lead to
   continued increased demand for nonwovens in cleaning and disinfection
   applications. For now the company’s operations have been running basically
   normal, and nonwovens production has been classified essential.
 * Gross profit stood at EUR 13.3m while our expectation was EUR 9.2m. This
   means gross margin was 12.1% vs our 8.5% estimate.
 * Q1 EBIT was EUR 5.7m, compared to our EUR 2.9m estimate. The strong figure
   was due to higher volumes, improved production and raw materials efficiency
   as well as favorable raw materials prices.
 * Suominen updates its guidance, and now expects FY ’20 EBIT to improve clearly
   (previously improve) but notes the result estimate for H2’20 is uncertain due
   to the pandemic.
   
   

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SSH - Q1 RESULT IN LINE WITH EXPECTATIONS

23.04.2020 - 09.30 | Earnings Flash

SSH reported a Q1 result that was in line with our expectations. New CEO says
financial performance was not significantly affected by the COVID-19 outbreak
during the first quarter, but they’ve seen some project delays and it is still
too early to assess the full business impact of the pandemic.

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• Q1 net sales were EUR 3.1 million (vs. 3.1m our expectation). Net sales
increased by 16% compared to the previous driven mainly by strong license sales
and supported by growth in subscription revenue.
• Software fees were EUR 0.9 million (0.8m Evli), Professional services were EUR
0.0 million (0.1m Evli), and Recurring revenue was EUR 2.1 million (2.2m Evli)
• Q1 operating loss was EUR – 0.6 million (vs. -0.5m our expectation)
• EPS was -0.02 (vs. -0.02 our estimate)
• Liquid assets were EUR 11.7m (12m Q4/19)
• PrivX update: development of the SaaS version of PrivX is proceeding well, and
SSH anticipates the pilot launch during Q2. SSH has started the active
conversion of existing CryptoAuditor customers to use PrivX.

Open report


CAPMAN - FV CHANGES BURDENED RESULTS

23.04.2020 - 09.00 | Earnings Flash

CapMan's net sales in Q1 amounted to EUR 11.9m, above our and consensus
estimates (EUR 10.7m/10.7m Evli/cons.). EBIT amounted to EUR -6.0m, above our
estimates and below consensus (EUR -7.5m/-3.9m Evli/cons.). Profitability
burdened by fair value changes amounting to EUR -8.4m (Evli -9.7m).

Read more

 * Revenue in Q1 was EUR 11.9m (EUR 9.3m in Q1/19), above our estimates and
   consensus estimates (EUR 10.7m/10.7m Evli/Cons.). Growth in Q1 amounted to 28
   % y/y.
 * Operating profit in Q1 amounted to EUR -6.0m (EUR 4.7m in Q1/19), below our
   estimates and above consensus estimates (EUR -7.5m/-3.9m Evli/cons.).
   Profitability burdened by fair value changes amounting to EUR -8.4m (Evli
   -9.7m). Portfolio companies average FV decline 20%, Infra/RE 4%.
 * EPS in Q1 amounted to EUR -0.05 (EUR 0.02 in Q1/19), in line with our
   estimates and below consensus estimates (EUR -0.05/-0.03 Evli/cons.).
 * Management Company business: Revenue in Q1 was EUR 7.2m vs. EUR 7.1m Evli.
   Operating profit in Q1 amounted to EUR 1.9m vs. EUR 1.4m Evli.
 * Investment business: Operating profit in Q1 amounted to EUR -8.4m vs. EUR
   -10.0m Evli.
 * Services business: Revenue in Q1 was EUR 4.8m vs. EUR 3.5m Evli, aided by
   Scala success fees during Q1. Operating profit in Q1 amounted to EUR 3.0m vs.
   EUR 2.0m Evli.
 * Capital under management by the end of Q1 was EUR 3.2bn (Q1/19: EUR 3.2bn).
   Real estate funds: EUR 2.0bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.3bn, and other funds: EUR 0.03bn.

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CONSTI - COVID-INDUCED UNCERTAINTY

23.04.2020 - 08.00 | Preview

Consti will report Q1 results on April 29th. We expect a third consecutive
quarter of healthier profitability, while the points of interest will be less on
Q1 financials and more on comments on any impact of the Coronavirus pandemic and
order backlog development. Our estimates overall remain intact for now. With the
added uncertainty we adjust our target price to EUR 7.2 (8.0) and retain our
HOLD-rating.

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Profitability expected to have remained at healthier levels
With the on-going Coronavirus pandemic, the Q1 financials will be of lesser
interest, as we expect that Consti should have been able to post a third
consecutive quarter of healthier profitability. Our Q1 revenue and EBIT
estimates are at EUR 64.7m and EUR 1.9m respectively. Of key interest in the Q1
report will be any comments regarding the possible impacts of the Coronavirus
pandemic and order backlog development. The renovation sector in general is less
prone to near-term shocks due to lengthier orders but the coinciding housing
company General Meeting season could affect order backlog development and
revenue later on in the year.

Sales decline 2020E, additional risk from COVID-19
Our estimates on annual basis remain largely intact for now. We expect a 10.3%
decline in 2020 revenue based on completion of larger projects in 2019 and the
order backlog development. We expect EBIT to improve to EUR 10.7m (2019: 4.6m)
as profitability burdening projects have been completed. The Coronavirus
pandemic poses a risk to our estimates through plausible project delays and
potential supply chain problems, dependent also on the general economic impact,
but we still see fundamental drivers in place and a slow-down in new
construction volumes due to the pandemic could benefit renovation construction.

HOLD with a target price of EUR 7.2 (8.0)
Our estimates remain largely intact for now in awaiting the Q1 results, but with
the elevated risk level we adjust our target price to EUR 7.2 (8.0), with our
HOLD-rating intact.

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FINNAIR - CORONAVIRUS HAMPERS Q1 RESULT

22.04.2020 - 09.15 | Preview

Finnair will report its Q1 result on next week’s Wednesday, 29th of April. The
company’s Q1’20 traffic data was below our expectations thus we have cut our
estimates. We expect Q1’20E revenue of EUR 585m and adj. EBIT of EUR -73m. We
keep our rating “HOLD” with TP of EUR 4.0 (3.5) ahead of Q1.

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Q1 traffic hampered by the coronavirus

Finnair’s traffic figures were substantially below our expectations in Q1, due
to March traffic figures, which slumped more than we expected. In Jan-Mar,
capacity (ASK) decreased by 9% vs. our +2% expectation, while sold capacity
(RPK) declined as much as by 16% vs. our -1% expectation. Thus, passenger load
factor (PLF) declined by 5.7 percentage points to 72.6%. Traffic figures and
cargo were heavily impacted by the coronavirus in all Finnair’s market areas.
Total passenger number declined by 16% y/y. We expect Q1’20E revenue of EUR 585m
(Q1’19: EUR 668m) and adj. EBIT of EUR -73m (Q1’19: EUR -16m).

Drop in fuel prices

Oil prices have dropped significantly since the beginning of the year amid the
coronavirus pandemic and the price war between Saudi Arabia and Russia. The
average fuel price in both USD and EUR dropped by 20% on a q/q basis compared to
Q4’19. The average price in Q1’20 was 19% lower y/y in USD and 17% lower y/y in
EUR.

“HOLD” with TP of EUR 4.0 (3.5)

We have cut our 20E estimates as the ongoing movement restrictions are likely to
continue for several weeks or even months and the air travel is not expected to
return to normal, not at least during this summer. Finnair has cut some 90% of
its capacity due to COVID-19. We now expect 20E revenue of EUR 2213m (-29% y/y)
and adj. EBIT of EUR -144m (-190% y/y). We note that there are significant
uncertainties with our short-term estimates due to the situation. We have also
decreased our 21E-22E revenue estimates by ~6% and adj. EBIT estimates by ~9%.
Despite of the weak short-term outlook we still see Finnair’s mid-term outlook
rather positive. Prior the crisis Finnair had a strong cash position and a
healthy balance sheet. The company is also implementing a substantial funding
plan, including sale and leasebacks of unencumbered aircraft, a revolving credit
facility of EUR 175m, which has already been raised and a statutory pension
premium loan totaling to EUR 600m. It has been proposed that the State of
Finland would guarantee the loan. Therefore, we see that Finnair is well placed
to continue its operations relatively normally after the crisis. We keep our
rating “HOLD” with TP of EUR 4.0 (3.5) ahead of Q1.



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VAISALA - W&E BUSINESS HURTING FROM CORONA

22.04.2020 - 09.10 | Company update

Vaisala issued yesterday a profit warning due to estimated impacts related to
the coronavirus pandemic. Consequently, we’ve revised down our estimates for
2020. Despite Vaisala being a great company, we see current valuation
unattractive given the weakened financial outlook. We maintain our SELL with new
target price of 25 euros (prev. 29.5).

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W&E’s project and services business suffering from corona
Vaisala expects delays or interruptions particularly in project and services
deliveries due to the extensive restrictions imposed by governments and
authorities. Demand in W&E has to some extent already weakened and Vaisala
estimates that the situation will become more challenging as governments have
tighter budgets, especially in emerging markets. The profit warning did not come
as a complete surprise given that Vaisala’s largest segment, W&E, consists
roughly 40-45% of projects and services, and the growth is very dependent on
investments from emerging market governments. Vaisala does not expect demand for
IM to change materially, but growth will slow down from last year (+22.2%).

New guidance broader as predicting is currently difficult
Vaisala’s now expects 2020 sales will be between 370–405 MEUR and EBIT between
34–46 MEUR (prev. sales 400–425 MEUR and EBIT 38–48 MEUR). The outlook’s range
for both net sales and EBIT is wide due to high uncertainty related to the
duration and impact of coronavirus pandemic as well as unknown speed of
recovery. Vaisala will provide an update to its market outlook in connection
with its Q1 report due next week on Tuesday 28th.

Valuation still stretched given weakened financial outlook
Based on the new outlook, we have cut our estimates for 2020e and the coming
years. For 2020e, we’ve cut our sales and EBIT estimates with 8% and 20%
respectively. We expect 2020e net sales to decline 3% to 390 MEUR and reported
EBIT to decline to 34.9 MEUR, mainly due to lower performance in W&E. On our
renewed estimates, Vaisala is still trading at clear premiums compared to our
peer group, which we do not see justified given the financial performance
outlook currently weighed down by W&E. We maintain our SELL with new target
price of 25 euros (prev. 29.5). Our target price values Vaisala at 20e EV/EBIT
multiple of 25x which is still above peer group, reflecting Vaisala’s strong
sustainability profile, growing dividend, and especially IM’s highly profitable
growth with possibility of further add-on acquisitions.

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CAPMAN - UPGRADE TO BUY

21.04.2020 - 09.15 | Preview

CapMan will report Q1 results on April 23rd. We expect weak earnings on paper
due to negative fair value changes (non-cash) as a result of implications of the
Coronavirus pandemic. CapMan was heading into a year of major AUM growth
potential, which is now put at some risk due to plausible fundraising
challenges. We adjust our target price to EUR 1.95 (2.50) following revised
estimates and upgrade to BUY (HOLD).

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Negative fair value changes to burden Q1 results
We expect CapMan to report weak Q1 results due to negative fair value changes,
although these are non-cash items. The largest relative hit will come from
portfolio companies due to peer valuation declines. We currently estimate fair
value changes of EUR -14.2m in 2020. We estimate a Q1 adj. EBIT of EUR -7.5m.
Apart from the fair value changes, the Coronavirus pandemic will not yet have
had a significant impact on other business areas and we expect decent results
from the Management Company and Service businesses, not expecting significant
carry or success fees in the quarter.

2020 growth outlook more challenging
CapMan was heading into a year of major AUM growth potential with on-going
projects as well as significant new fundraising projects announced in late 2019.
COVID-19 will in our view have a detrimental effect on fundraising and we will
be looking for any comments implying the magnitude of the impact from the Q1
results. Although growth expectations are pointing downwards, the Management
Company business enjoys a healthy base of recurring fees that for now remain
unaffected. We expect the Services business revenue and profits to decline in
2020, as Scala in particular would be affected by any possible dry-up of new
fundraising projects.

(BUY) HOLD with a target price of EUR 1.95 (2.50)
Following estimates revisions and the increased uncertainty we adjust our TP to
EUR 1.95 (2.50) based on our SOTP and peer multiples and upgrade to BUY (HOLD)
due to share price declines.

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DETECTION TECHNOLOGY - COVID-19 - A NEAR TERM THREAT WITH A SILVER LINING

21.04.2020 - 09.02 | Preview

Detection Technology will report Q1 earnings next Monday, April 27th. We’ve
slightly lowered our near term estimates due to the pandemic. Despite the
current headwinds related to coronavirus, we see longer term investment case
intact. We maintain our target price of 24 euros, rating is now BUY (prev.
HOLD).

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COVID-19 – both a threat and part opportunity

DT usually doesn’t give full year guidance due to short visibility into customer
demand. With the ongoing corona pandemic, it’s even harder to make predictions
now. As airline travel is constrained, the pandemic can be expected to weigh
negatively in H1 on SBU, which represents roughly 2/3 of DT’s sales. On the
other hand, CT scanning is used to detect virus-related pulmonary changes, which
in turn increases demand for CT scanners especially in China. DT’s recently
launched new production facility in Wuxi provides additional capacity to support
the possible increase in demand for CT equipment. As CT equipment plays an
important role in diagnosing and treatment of COVID-19, DT has been permitted to
keep its Beijing site operational and start manufacturing in Wuxi despite
restrictions set by the local and national authorities in China.

Estimates cut, but investment story remains compelling despite near term
uncertainties

Given the change in the landscape due to COVID-19, we’ve slightly lowered our Q1
estimates, especially for SBU. For Q1’20, we estimate SBU declining -2% and MBU
declining -7% y/y, with total Q1 net sales declining -4% y/y to 22.2 MEUR (22.3
MEUR cons). Our Q1 EBIT estimate is 2.8 MEUR (2.9 MEUR cons), which is down 30%
compared to 3.9 MEUR last year. We’ve revised down our FY’20E sales growth
estimate from 10% to 6%. We still expect most of the growth to materialize in H2
as growth returns, especially in China, and volumes of new Aurora and X-Panel
CMOS products ramp-up. Consequently, we’ve also lowered our FY’20E EBIT estimate
by 11% due to lower sales and increased spending. Our estimates beyond 2020E are
broadly unchanged, and we expect EBIT to improve in medium term due to volume
growth and better GM’s due to mix and new products. We note however that
coronavirus poses a clear near-term threat to our estimates, especially if the
current situation is prolonged.

We maintain TP of 24 euros, with rating BUY (prev. HOLD)

On our revised estimates, DT is trading at 15x and 12x EV/EBIT multiples for
20E-21E. This is roughly 15-20% below our peer group, which we see inexpensive
and unwarranted given strong market drivers, especially in China, as well as
DT’s compelling strategy and execution capabilities. We maintain our target
price of 24 euros, rating is now BUY (prev. HOLD).

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SUOMINEN - THE PANDEMIC TAILWIND IS NOT CLEAR

20.04.2020 - 09.30 | Preview

Suominen reports Q1 results on Thu, Apr 23. We have left our estimates
unchanged. We expect Suominen to perform relatively well in the current
environment, however we don’t see the pandemic producing absolute gains based on
current info. Our TP is EUR 2.50 (2.25), rating SELL (HOLD).

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Last year was weak for European sales

Suominen’s revenue declined by 5% last year to EUR 411m as the European business
lost volumes and sales fell by 13% to EUR 150m. Americas was flat. Product split
held steady as baby wipes were the largest group (40%) followed by personal care
and home care wipes with about a fifth each. Suominen gives no short-term sales
guidance but expects EBIT to improve this year. We estimate Q1 top line to have
declined by 2% y/y to EUR 108m assuming volumes have improved a bit while
nonwovens prices have declined slightly along with raw materials prices. We
still expect Q1 gross margin at 8.5% i.e. marginally up from the 8.3% Q4 figure.
We see SGA stable, and thus expect Q1 EBIT at EUR 2.9m (EUR 3.0m a year ago).
Assuming stabilizing raw materials prices and gross margins for the rest of the
year, we expect FY ’20 revenue up by 3% due to improving volumes. We thus see FY
’20 EBIT at EUR 12.0m vs EUR 8.1m last year.

In our view the pandemic might not inevitably help sales

Relatively speaking Suominen should perform well amid the pandemic, but in terms
of absolute gains we don’t see the picture that clear. Suominen’s recent
challenges were not due to lack of nonwovens demand, but rather caused by
abundance of supply. Also, customer specific considerations matter as the ten
largest accounts generate 65% of sales. We see a possibility that the pandemic
and its aftermath will help accelerate volume growth, which is what the company
needs in order to reach its long-term financial targets. Suominen is reportedly
planning to enter face mask production in Finland in co-operation with
Ahlstrom-Munksjö, however in our view it’s still early to estimate and value the
possible impact on bottom line.

Valuation seems to have gone ahead of itself

In our view the current share price reflects rather hasty assumptions about the
pandemic’s impact on the nonwovens market. We see caution warranted as a boost
to total volumes is not inevitable. Our TP is now EUR 2.50 (2.25), rating SELL
(HOLD).

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VERKKOKAUPPA.COM - COVID-19 BOOSTING ONLINE SALES

20.04.2020 - 09.00 | Preview

Verkkokauppa.com will report its Q1’20E result on Friday. We expect the
coronavirus to boost online sales but expect decreasing sales in the physical
stores. We have made small adjustments to our 20E estimates and retain our
rating “HOLD” with TP of EUR 3.5 ahead of Q1.

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Online sales boosted by COVID-19

The exceptional situation due to COVID-19 has pushed retailers online as the
demand in physical stores slumped quickly when the movement restrictions came
into force. This is likely to have a positive impact on Verkkokauppa.com’s sales
development in Q1’20E as the company has a strong online presence and only four
physical stores in Finland. According to the management, the demand for instance
in home office supplies has increased as people have switched their working
spaces to their homes.

Expecting good market growth in Q1’20E

We expect the market growth in consumer electronics to be relatively good in
Q1’20E but in the near future, consumers might become more cautious due to the
weakening economy, especially if the situation is prolonged. Despite of the good
online sales outlook we expect to see decreasing sales in Verkkokauppa.com’s
physical stores during this situation. We have slightly increased our Q1’20E
estimates. We expect Q1’20E revenue to increase by 4.5% y/y to EUR 121m (cons.
EUR 118m) and EBIT of EUR 2.7m (cons. EUR 2.4m).

“HOLD” with TP of EUR 3.5 intact

We have made small adjustments to our 20E estimates and expect revenue of EUR
518m (2.7% y/y) and EBIT of EUR 13.0m (~15% y/y). According to the guidance
given for 20E, the company expects revenue to be between EUR 510-530m and EBIT
of EUR 12-15m, thus our estimates are at the lower end of the guidance. COVID-19
might speed up the more permanent leap into online in long-term which should
benefit players such as Verkkokauppa.com. At the same time, the rumors of Amazon
entering the Nordic market have once again increased. On our estimates,
Verkkokauppa.com trades at 20E-21E EV/sales multiple of 0.3x which translates
into ~50% discount compared to the peers. We keep our rating “HOLD” with TP of
EUR 3.5 intact ahead of Q1 result.



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GOFORE - BACK ON TRACK IN Q1

15.04.2020 - 09.00 | Company update

Gofore released its business review for March 2020 and first quarter figures,
with net sales up 12.8% in Q1 and profitability at high levels, with the adj.
EBITA-% at 17.3%. We have slightly lowered our estimates due to the Coronavirus
pandemic but currently expect only a limited impact in particular due to the
comparatively large exposure to the public sector. With our lowered estimates we
adjust our TP to EUR 7.8 (8.2), HOLD-rating intact.

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Profitability in Q1 back at solid levels

Gofore released its business review for March 2020 and first quarter figures.
Net sales in Q1 grew 12.8% to EUR 18.8m. The adjusted EBITA amounted to a solid
EUR 3.3m, at a margin of 17.3% (Q1/19: 17.2%). EBITA amounted to EUR 2.5m,
affected by non-recurring costs and provisions relating to the divestment of the
UK business. Gofore’s profitability figures were clearly positive given the
challenges faced during the latter half of 2019.

Currently expect a rather limited impact of the pandemic

We have lowered our 2020 sales growth and EBITA estimates by 3pp and 12.5%
respectively. The adjustments relate mainly to the estimated impact of the
Coronavirus pandemic. We currently do not expect a major impact due to the
comparatively large public sector exposure. We assume some challenges in sales
of new projects due to customer investment caution, which we expect to show
during H2/2020 as a slightly lower billing rate and thus lower sales and
profitability. So far, the effects of the pandemic have been limited to
employees shifting to working remotely and March sales figures were at a solid
level.

HOLD with a target price of EUR 7.8 (8.2)

Current circumstances relating to the pandemic do not suggest a significant
negative impact on Gofore’s operations, but a further prolongation would without
a doubt have an adverse effect. On our revised estimates we lower our target
price to EUR 7.8 (8.2) and retain our HOLD-rating.

 

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ASPO - THE PANDEMIC STIRS THE PICTURE MORE

14.04.2020 - 09.20 | Company update

Aspo withdrew FY ’20 guidance as the pandemic is yet another setback for
operations. We have cut estimates according to our assumption that business will
begin to normalize during Q2 as many governments are reportedly about to ease
restrictions. Yet we remain cautious given the uncertainty; our TP is now EUR
6.25 (8.25), rating HOLD.

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Q1 was very weak for ESL, Telko performed relatively strong

Aspo disclosed preliminary Q1 figures. ESL operated in challenging conditions as
the Chinese situation in the beginning of the year already affected shipping
rates. ESL’s steel and energy transport volumes decreased in Q1 and the
uncertainty means there’s no solid view on cargo volume potential for the rest
of the year. Aspo says smaller vessels’ cargo volumes remained at a normal
level. ESL’s Q1 top line decreased by 2% y/y to EUR 42.7m (our estimate was EUR
46.7m) and EBIT decreased to EUR 2.3m compared to EUR 3.2m a year ago and our
EUR 4.9m expectation. Meanwhile Telko performed relatively good as Q1 revenue
amounted to EUR 63.6m i.e. down by 12% y/y but close to our EUR 63.9m estimate.
Telko’s Q1 EBIT, unchanged y/y at EUR 2.4m, was slightly above our EUR 2.2m
estimate. This indicates Telko’s profitability measures are having some effect.
Leipurin’s Q1 revenue amounted to EUR 26.9m, up 4% y/y and in line with our EUR
26.8m estimate. Leipurin’s EBIT increased slightly to EUR 0.6m while our
estimate was EUR 0.7m.

The H2’20 EBIT improvement slope is very hard to assess

Aspo previously guided FY ’20 EBIT to be higher than in ’19 (EUR 21.1m). In our
view Aspo’s profitability for this year is especially difficult to estimate with
current information as last year’s result doesn’t represent a high hurdle as
such given the long-term potential. In a scenario closer to normal we would have
expected Aspo to reach the guidance easy. Yet the potential is now even more
subject to uncertainty as the macro picture is very murky. We expect better
results in Q3 but see Q2 EBIT down to EUR 2.6m (we previously estimated Q2 EBIT
at EUR 7.0m).

The environment justifies low valuation relative to potential

In our view the potential for higher EBIT remains, however in the current
situation it’s challenging to rely on long-term estimates. Our TP is now EUR
6.25 (8.25), rating remains HOLD.

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SOLTEQ - SOFTWARE HOUSE JOURNEY SETBACK

07.04.2020 - 09.15 | Company update

Solteq withdrew its guidance for 2020 due to the prevailing uncertainty caused
by the Coronavirus pandemic. Customer deliveries within core business areas have
so far remained unaffected but we expect to see some weakness within smaller
project deliveries. Ramping up sales of newly developed own products will likely
also prove to be more challenging. We expect a 6.5% decline in revenue in 2020.
We retain our HOLD-rating with a TP of EUR 0.95 (1.40).

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Guidance withdrawn due to Coronavirus uncertainty
Solteq withdrew its guidance for 2020 for the time being due to the prevailing
uncertainty caused by the Coronavirus pandemic. Customer deliveries with core
business areas, with typically larger contracts and longer customer
relationships, have so far continued without interruption. We expect the
implications of the Coronavirus pandemic going forward to act as a driver for
digitalization, partly due to movement restrictions and increasing online
demand. In the near term we nonetheless expect revenue to be affected, mainly
from smaller project deliveries. We also expect a more challenging ramp up of
some of newer software products, some of which had already shown a promising
start.

Expect a 6.5% sales decline in 2020
We have lowered our 2020 sales growth estimate to -6.5% (-1.4%) and EBIT to EUR
2.1m (3.5m). We currently expect to see clear margin and sales growth picking up
in 2021 but note the high estimates uncertainty due to the Coronavirus outbreak.
An additional uncertainty element is caused by the high leverage and interest
expenses. Solteq informed of intentions to consider initiating a written
procedure to extend its outstanding EUR 24.5m notes by 12 months, that were to
mature July 1st, 2020.

HOLD with a TP of EUR 0.95 (1.40)
Solteq’s cash flows were set to improve in the near-term due to lower
investments and improved operational profitability. Although Solteq should be
able to show relative resilience, the increased uncertainty amid the company’s
ambitions to change track towards a software focus is clearly suboptimal and we
adjust our TP to EUR 0.95 (1.40), retaining our HOLD-rating.



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FELLOW FINANCE - LOAN VOLUMES AT RISK

06.04.2020 - 09.15 | Company update

The Ministry of Justice of Finland has informed that it will start preparing a
bill proposal to limit maximum consumer loan interest to 10%. According to
Fellow Finance the proposal in its current form would – ceteris paribus – reduce
current intermediated loan volumes by approx. 50% compared to March 2020
volumes. We keep our estimates largely intact for now but derive valuation
scenarios based on which we adjust our TP to EUR 2.5 (3.0), HOLD-rating intact.

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Proposal to cap consumer loan interest at 10% (20%)
The Ministry of Justice of Finland has informed that it will in the upcoming
weeks start preparing a bill proposal to limit maximum consumer loan interest to
10% from the current 20% due to the Coronavirus pandemic. The changes are
planned to be in effect until the end of 2020. According to Fellow Finance the
proposal in its current form would cut current intermediated loan volumes by 50%
compared with March 2020 volumes. Furthermore, if investors in a 12% interest
risk class would lower interest requirements to the proposed 10% cap, around 80%
of current loan volumes could be intermediated.


Proposal would affect near-term profitability
We keep our estimates largely intact for now as the outcome and content of the
bill proposal is not yet certain. Given the economic impact of the Coronavirus
pandemic and an ease of making drastic decisions we see a high likelihood of the
proposed bill passing. We derive scenarios for the possible effects of the
proposal and expect a 10% cap to put EBIT in the coming years at near zero or
negative.


HOLD with a target price of EUR 2.5 (3.0)
We derive three scenarios based on the planned bill proposal, described more in
detail on page two. Based on a weighted approach, assuming an 80% likelihood of
the bill passing, we derive a target price of EUR 2.5 (3.0) and keep our
HOLD-rating intact.

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ETTEPLAN - CHALLENGING TIMES AHEAD

01.04.2020 - 09.00 | Company update

Etteplan withdrew its guidance for the time being due to uncertainty caused by
the coronavirus outbreak. The increased uncertainty in the global economy has
adversely affected customer demand and will have a negative impact on financial
development. We have lowered our 2020 estimates, expecting revenue to remain at
2019 levels and EBITA to decline clearly. We lower our target price to EUR 6.9
(10.2) and retain our HOLD-rating.

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Guidance withdrawn due to coronavirus uncertainty
Etteplan withdrew its guidance for the time being due to uncertainty caused by
the coronavirus outbreak, having previously estimate revenue in 2020 to increase
clearly and EBIT to be at the same level or improve compared with 2019. The
coronavirus outbreak has adversely affected customer demand essentially across
all customer segments. Europe is expected to show weak figures in Q2, while the
in Q1 weak Chinese economy has now been picking up and demand development there
is showing favourable signs.

2020 EBITA estimate down some 35%
We expect the outbreak to have a clear negative effect on financial development
in 2020E. We expect the brunt of the impact on Q2/Q3 while Q1 is expected to
have been somewhat weaker due to the situation in China. We note the challenges
in near-term estimation due to the lacking visibility and unforeseeable nature
of the consequences of the outbreak. We currently expect 2020 revenue to remain
at 2019 levels, despite the current situation due to inorganic growth, and
profitability to decline clearly, with our EBITA estimate at EUR 18.1m (27.5m).

HOLD with a target price of EUR 6.9 (10.2)
Etteplan has on a three-year average NTM EV/EBITDA traded at around 9.0x.
Assuming a swift return to a normalized demand situation current valuation is in
no way challenging. The significant near-term uncertainty, however, warrants a
discount and we value Etteplan at 2020E EV/EBITDA of 7.0x, and with our 2020E
EBITDA estimate down some 25% we lower our target price to EUR 6.9 (10.2) and
retain our HOLD-rating.

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SRV - TURNING THE SHIP IN STORMY WATERS

31.03.2020 - 09.15 | Company report

SRV’s road has been bumpy in the past two years and measures are being taken to
turn the tide. The slowing down of the Finnish construction market has created
prerequisites for improved profitability by alleviating some supply chain
pressure. The unfortunate Coronavirus outbreak casts a shadow over the planned
turnaround and the uncertainty is reflected in valuation multiples. We adjust
our target price to EUR 1.00 (1.30) and retain our HOLD-rating.

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Seeking turnaround from recent weak profitability years
SRV’s profitability has been in the red the past two years and the company is
under new management seeking to turn the tide. Measures are being taken to
enhance operational profitability and improve the financial situation. Market
development has shown beneficial signs, as a slowing down of new construction
volumes should ease supply chain pricing pressure. The Coronavirus outbreak,
however, creates significant near-term uncertainty and any possible impact is
yet hard to quantify.

Volumes expected to decline, profitability improve
We expect sales to settle at a level of around 10% below the solid 2019 levels
(EUR 1,060.9m) following an expected overall decline in construction volumes.
2020 remains supported by the lengthy order backlog while the completion of
fewer developer-contracted housing units will lower sales. We expect
profitability to improve in 2020 from the recent weak comparison years due to a
diminishing burden of non-recurring items but margins to still remain relatively
low. We estimate a 2020 operative operating profit margin of 1.1%.

HOLD with a target price of EUR 1.00 (1.30)
Our DCF and SOTP implied equity fair values are EUR 1.10 and 0.64 respectively.
We derive a target price or EUR 1.00 (1.30) per share, assigning more weight to
our DCF fair value due to an unjust near-term weight on profitability of our
SOTP-model and retain our HOLD-rating.

Open report


PIHLAJALINNA - 20E GUIDANCE WITHDRAWN

30.03.2020 - 09.20 | Company update

Pihlajalinna withdrew its 20E guidance as it is challenging to assess and
predict the total impacts of the coronavirus. Half of the operations are
expected to remain stable but the demand for non-urgent health care and oral
health services has declined. We expect 20E revenue to remain at the same level
as in ’19 (EUR 519m) and adj. EBIT of EUR 27m (28% y/y). However, there are
significant uncertainties with our short-term estimates. Our rating is now “BUY”
(“HOLD”) with TP of EUR 16.

Read more

20E guidance temporarily withdrawn
Pihlajalinna withdrew its guidance for 20E as it is challenging to predict the
total financial and operational impacts caused by COVID-19 and the given
emergency laws. A new guidance will be given at a later point, when the total
impacts can be more reliably assessed. According to the company, during the
first months of the year, turnover and profitability have developed as expected.
Based on the previous guidance given in February, Pihlajalinna expected turnover
and adj. EBIT to improve from the previous year.

Non-urgent and oral health services hampered by COVID-19
According to the company, comprehensive outsourcing in the context of the social
welfare and healthcare reform and other fixed-price invoicing is related to a
steady recognition of income over time. Profitability of these kinds of
contracts normally remains stable, even during periods of low demand. Demand for
housing services for the elderly and recruitment services is not expected be
affected by the situation. Therefore, more than half of the business operations
are expected to remain stable. Also, demand for remote services has increased.
Pihlajalinna’s fitness centers have been temporarily closed since late March and
the demand for non-urgent healthcare and oral health services has decreased due
to the coronavirus. We expect the demand for these services to increase after
the situation, which should partly compensate this period of low demand.

“BUY” (“HOLD”) with TP of EUR 16
We have decreased our 20E turnover expectation by ~3% and adj. EBIT expectation
by ~24%. We now expect 20E turnover to remain at the same level as in ‘19 (EUR
519m) and adj. EBIT of EUR 27m (28% y/y). Adj. EBIT is expected to improve due
to the cost savings resulting from the efficiency improvement program that was
launched last summer. However, we note that there are significant uncertainties
especially with our short-term estimates. The tender offer by Mehiläinen is
currently being under review of the FCCA. As expected, the FCCA initiated the
phase two investigation, meaning that the process will be completed at the end
of Q2’20E or latest during Q3’20E. We keep our TP at the tender offer price of
EUR 16 and upgrade our rating to “BUY” (“HOLD”).

Open report


TOKMANNI - CUSTOMER FLOWS HAMPERED BY COVID-19

27.03.2020 - 09.35 | Company update

Tokmanni withdrew its 20E guidance as there is a clear decline in customer flows
due to the coronavirus. New guidance will be given at a later point when the
visibility is more clear. We expect 20E sales of EUR 919m (-2.7% y/y) and adj.
EBIT of EUR 55.3m (-21% y/y). We note that there are significant uncertainties
with our short-term estimates. We keep our rating “BUY” with TP of EUR 12.5
(16).

Read more

Coronavirus hampering customer flows
Tokmanni withdrew its guidance for 20E due to the situation around coronavirus.
According to the company, after the emergency restrictions that came into force
in March, the customer flows have clearly declined in stores. At the current
stage, the company doesn’t give a guidance for the year 20E but expects that the
coronavirus and the restrictions on movement will affect at least Q2’20E sales.
As stated by the company, it is very challenging to estimate the development in
H2’20E. Based on the guidance given in February, Tokmanni expected good revenue
growth and slight growth in LFL-sales for 20E and profitability (adj. EBIT
margin) to increase from the previous year.

Expecting declining sales in Q2’20E
We expect a clear decline in Q2’20E sales (-27% y/y) as the movement
restrictions are likely to last for several weeks. Tokmanni aims to keep all the
stores open during this unexpected time. We expect the consumer demand for
grocery to remain stable but at the same time demand for non-grocery products is
expected to decline. We expect online sales to increase but the contribution to
the total sales is still expected to remain marginal. As the visibility is very
weak it is difficult to estimate the total impacts on H2’20E sales. We expect
the lockdowns in China, occurred in Q1’20, to have a negative impact on
Tokmanni’s direct import, which will hamper gross margin development. As most of
Tokmanni’s employees work in stores (85%), the company should be able to adjust
its workforce in some level. We expect only limited adjustment possibilities in
other operations, hampering profitability in Q2’20E.

“BUY” with TP of EUR 12.5 (16)
We have decreased our 20E sales expectation by ~8% and adj. EBIT estimate by
~30%. We now expect 20E sales to decline by 2.7% y/y (EUR 919m) and adj. EBIT of
EUR 55.3m (-21% y/y), resulting in adj. EBIT margin of 6.0%. We note that there
are significant uncertainties with our short-term estimates. We expect the
customer flows and demand to normalize relatively fast after the situation and
expect Tokmanni is able to return back to its growth path. On our estimates,
Tokmanni trades at 20E-21E EV/EBIT multiple of 16.7x and 10.4x, which translates
into 4% premium in 20E and 29% discount in 21E compared to the int. discount
peers. We keep our rating “BUY” with TP of EUR 12.5 (16).



Open report


FELLOW FINANCE - GUIDANCE WITHDRAWN AMID UNCERTAINTY

27.03.2020 - 08.45 | Company update

Fellow Finance withdrew its 2020 guidance due to the weakened visibility caused
by the coronavirus outbreak. We expect the uncertainty to affect investor
sentiment and have lowered our estimates for facilitated loan volumes and as a
result our revenue and profitability estimates. Fellow Finance will also have to
put the brakes on some expansion plans, which will further impede growth. We
retain our HOLD-rating with a TP of EUR 3.0 (4.0).

Read more

Guidance withdrawn due to coronavirus uncertainty
Fellow Finance withdrew its 2020 guidance due to the weakened visibility caused
by the coronavirus outbreak. The company previously expected turnover to grow in
2020 and the growth efforts to decrease operating profit compared to 2019, with
growth expected to accelerate during 2021-2022. The uncertainty affects investor
sentiment, which we expect to have a negative near-term effect on facilitated
loan volumes. Furthermore, Fellow Finance will in the elevated uncertainty
situation have to put the brakes on some of its growth plans internationally,
which will affect growth in the coming years.

Estimates lowered on weakened investor demand prospects
We have lowered our estimates for facilitated loan volumes, driven by the change
in investor sentiment, and as a result our estimates for revenue and
profitability. Fortunately, fees from managing the current portfolio along with
fees from Lainaamo’s loan commitments will support revenue while the variable
cost components, mainly the commissions to loan brokers, should slightly soften
the profitability impact. We now expect a 6% revenue decline in 2020 (prev. 4%
increase) and an operating profit of EUR 0.6m (prev. EUR 1.3m).

HOLD-rating with a target price of EUR 3.0 (4.0)
On our revised estimates and increased uncertainty, we adjust our target price
to EUR 3.0 (4.0). We assume only a fairly moderate deterioration of the economy
due to the coronavirus, while a larger deterioration could result in a clear
increase in loan defaults and have a clear negative impact on the company.

Open report


MARIMEKKO - COVID-19 IMPACTING SALES AND PROFIT

26.03.2020 - 09.10 | Company update

Marimekko withdrew its guidance for 20E as the consumer demand in all the market
areas has dropped due to COVID-19. We now expect 20E sales to decline by 10% y/y
and adj. EBIT of EUR 11.7 (-32% y/y) but we note that there are significant
uncertainties especially with our short-term estimates. We upgrade to “BUY”
(“HOLD”) with TP of EUR 28 (44).

Read more

Weakened consumer demand outlook due to COVID-19
Marimekko withdrew its 20E guidance as the situation around COVID-19 has clearly
weakened the consumer demand outlook in all Marimekko’s market areas (prev. 20E
sales are expected to increase from the previous year and adj. EBIT is expected
to be at the same level or higher than on the previous year). At the current
stage, the company doesn’t give a guidance for 20E. However, if the situation is
prolonged, it will have significant impacts on the company’s sales and
profitability. As a result of the current situation, Marimekko is planning to
adjust its operations and initiates cooperation negotiations. Marimekko has also
changed its proposal for the ’19 dividend payment (prev. dividend proposition of
EUR 0.90) and proposes that the AGM would authorize the Board of Directors to
decide on a dividend payment of a max. of EUR 0.90 per share to be distributed
in one or several instalments at a later stage when the company is able to make
a more reliable estimate on the impacts of COVID-19 to the company’s business.

Expecting a significant drop especially in retail sales
As most of the market areas have some level lockdowns and thus many stores are
being closed, we expect negative impacts especially on Q2’20E sales. We have
lowered our Q2’20E sales estimate by ~44% and our EBIT estimate by ~82%. We
expect retail sales to face the hardest hit due to the rapid drop in consumer
numbers. We don’t expect as dramatical decline in wholesale sales as the buyers
(of distribution channels) should have already ordered the spring/summer lines.
However, it is difficult to estimate how the situation will impact on H2’20E
sales. We also expect negative impacts on production and supply chain in H1’20E.

“BUY” (“HOLD”) with TP of EUR 28 (44)
We’ve lowered our 20E sales expectation by 17% and adj. EBIT estimate by 42%. We
expect 20E sales of EUR 113 (-10% y/y) and adj. EBIT of EUR 11.7 (-32% y/y). We
note that there are significant uncertainties with our short-term estimates but
we see Marimekko’s mid-term investment case unchanged and positive as we see
Marimekko is able to achieve higher sales and margins after this shock. In
normal circumstances, Marimekko also offers an attractive dividend yield. On our
estimates, Marimekko trades at 20E-21E EV/EBIT multiple of 17.6x and 10.2x which
translates into 22-40% discount compared to the luxury peers. We upgrade our
rating to “BUY” (“HOLD”) with TP of EUR 28 (44).

Open report


SSH - WITHDRAWS 2020 GUIDANCE DUE TO COVID-19

24.03.2020 - 20.49 | Company update

SSH announced yesterday that it estimates the COVID-19 pandemic to negatively
impact its outlook and thus it withdraws its guidance for the year 2020. We’ve
clearly cut our estimates for 2020 and 2021. We note that estimating future
performance now is exceptionally difficult, as the depth and length of the
current crisis is unknown. Based on our lowered estimates and postponed
turnaround, we lower our target price to 0.70€ (prev. 1.00€) but maintain HOLD
recommendation.

Read more

Guidance for 2020 withdrawn due to COVID-19

SSH announced yesterday that as a result of the COVID-19 pandemic, operating
conditions in their markets have deteriorated significantly. Large enterprises
globally, including some of SSH’s customers, have already announced profit
warnings or cost savings programs. SSH expects this to affect customer’s
investment decisions and the timing of IT project deployments. Due to the
continued uncertainty of the situation, SSH’s visibility into the scope and
duration of these effects is limited. SSH notes, that they are pre-emptively
preparing for the effects of this situation by systematically reducing operating
expenses, although details regarding this were not given.

 Estimates cut; turnaround postponed further

After a challenging 2019, SSH was guiding for clear improvement. For the year
2020, SSH was expecting revenue growth of 10-15 percent and an improving EBIT
(FY’19: -1.2 MEUR), but this guidance is now withdrawn. We’ve cut our sales
estimates for 2020E and 2021E roughly -16%. We estimate 2020E sales to decline
-5%, resulting in -1.0 MEUR operating loss, despite measures to lower opex. Due
to lower sales estimates, we estimate profit turnaround to be pushed forward to
2021E.

 HOLD maintained with TP 0.70€ (prev. 1.00€)

We note that estimating future performance is now exceptionally difficult, as
the depth and length of the current crisis is unknown. Based on our lowered
estimates and postponed turnaround, we lower our target price to 0.70€ (prev.
1.00€) but maintain HOLD recommendation.

Open report


FINNAIR - SIGNIFICANT LOSSES DUE TO COVID-19

17.03.2020 - 09.25 | Company update

The continuing crisis around COVID-19 forces Finnair to cut its capacity by some
90% in April. We have cut our 20E estimates substantially and expect EUR -52m
comparable operating loss in 20E. We keep our rating “HOLD” with TP of EUR 3.5
(5.0).

Read more

Second profit warning due to COVID-19

Finnair issued its second profit warning within a month as the COVID-19
continues to hammer the global airline industry. Earlier the company withdrew
its capacity estimate for 20E and expected 20E comparable operating profit to be
significantly lower than on the previous year. Due to the flight restrictions
and low demand, Finnair now cuts its capacity by ~90% starting from April and
indicates that the comparable operating loss will be significant in 20E. Also,
the company decided to withdraw the ’19 dividend proposal of EUR 0.2 per share.

Strong financial position securing Finnair’s operations

In order to secure its financing, Finnair has started to implement a substantial
financing plan. This includes funding instruments such as available credit lines
(Finnair has an available non-used credit line of EUR 175m), sale and leasebacks
of unencumbered aircraft (Finnair currently has 42 unencumbered aircraft, which
represents about half of the balance sheet value of the total fleet) and a
substantial, market-based pension premium loan. Also, the Finnish government
will actively support the company. Prior the COVID-19 situation, the company had
a healthy balance sheet and a strong cash position, which should support
Finnair’s finance and operations even if the situation around COVID-19 is
prolonged. The company will also make further cost adjustments (prev. aiming
cost savings of some EUR 40-50m). We expect relatively quick savings from
personnel expenses but many of the other cost savings are expected to be
realized later in H1’20E.

“HOLD” with TP of EUR 3.5 (5.0)

We have significantly cut our 20E estimates. We now expect 20E revenue to
decline by ~13% y/y (EUR 2707m) while we expect comparable operating profit to
decline by ~132% y/y (EUR -52m). This is mainly due estimates cut in Q2’20E.
With our updated estimates, Finnair’s 20E gearing would be some 137% (64% in
2019), while the company’s target is to keep the ratio below 175%. Our net
debt/EBITDA estimate is 3.9 (1.3 in 2019). On our estimates, Finnair trades at
20E EV/EBITDA multiple of 5.4x, which translates into 105% premium compared to
the peers. Despite of the severe situation, we expect Finnair has good
possibilities to quickly continue its operations after the situation. As
Finnair’s financial position is strong we continue to see Finnair’s mid-term
outlook rather positive. Due to the exceptional situation, there are significant
uncertainties with our short-term estimates. We keep our rating “HOLD” with TP
of EUR 3.5 (5.0).



Open report


CIBUS NORDIC - A STRONG BASE FOR SWEDISH EXPANSION

06.03.2020 - 09.25 | Company update

Cibus Nordic enters the Swedish property market with the EUR 180m portfolio
acquisition of 111 Coop supermarkets. We view the deal as a fine way to gain
more property mass and extend geographical reach in a controlled manner. Our new
TP is SEK 155 (150), rating HOLD.

Read more

We believe Cibus is an ideal owner for the supermarkets

Cibus acquires a portfolio of 111 properties located in Southern Sweden for EUR
180m. The portfolio of grocery properties belonged to Coop, the second largest
grocery retailer in Sweden (19% market share), which had acquired the portfolio
last year from Netto. Coop will provide some SEK 3m into each store for
rebranding purposes and sign 10-year triple-net lease contracts. In this sense
the new Swedish portfolio is even more cost-efficient from Cibus’ point of view.
The longer lease contracts will lift Cibus’ WAULT to 5.5 years from 4.9 years.
Coop has in total about 800 stores in Sweden; thus the 111 properties mean
Cibus’ relationship with Coop can be compared to that with Kesko, considering
Cibus’ properties amount to more than 10% of Kesko’s facility sourcing. The
properties now acquired are relatively modern (83% were either constructed or
renovated during the last 15 years), and are mostly located in residential
areas, traffic routes and city centers. The typical property is only some 1,000
sqm in area (compared to old Cibus’ 3,500 sqm), so they can be best described as
rather small supermarkets. As Coop is now in the process of rebranding the
stores the inventory selection is set to expand from 1,800 items per store to
6,000.

The deal is valued at a yield above that where Cibus trades

The price implies a yield of almost 6%, which is undemanding as Cibus trades
only slightly above 5%. Cibus’ net debt LTV ratio stays close to the old almost
60% level. Cibus fully used the mandate to issue 6.22m shares and thus raised
EUR 84m new equity via a directed share issue. The EUR 123m new senior bank debt
carries a 2% interest; Cibus consequently has some EUR 25m more cash in its
balance sheet to make add-on acquisitions in Sweden. Cibus expects the deal to
close next week, on Mar 10.

Cibus’ valuation and yield development

Cibus trades at a 100bps wider yield compared to the median NTM EBITDA/EV of a
listed Nordic Real Estate company. Cibus managed to issue new equity at a 1.18x
P/NAV (or 2.7% below the day’s closing price) to fund the Swedish expansion,
which we see as a strong signal that investors view Cibus’ book value as quite
conservative. We have updated our estimates; we expect Cibus’ rental income to
continue to increase at the rate of inflation, and we estimate annual operating
income at more than EUR 10m higher going forward.

The deal adds some EUR 10m in operating income capacity

The deal is good news for Cibus as portfolio diversification further improves.
Our TP is SEK 155 (150), remain HOLD.



Open report


TOKMANNI - BRIGHT FUTURE OF DISCOUNT RETAILING

06.03.2020 - 09.15 | Company report

Tokmanni continued its strong performance in 2019 as sales grew by 8.5% y/y
while adj. EBIT margin improved to 7.5%. Profitability improvement through gross
margin improvement and OPEX scalability is high on the company’s agenda and we
see the set targets to be reachable. We keep our rating “BUY” with TP of EUR 16.

Read more

Targeting EUR 1bn of sales

Tokmanni targets EUR 1bn in sales with further store network expansion and LFL
growth. With 191 stores at the end of 2019 and at the targeted store network
expansion pace (12,000m2 or ~5 stores annually) Tokmanni is set to reach its
target of over 200 stores within the next few years. The company’s LFL growth
has notably improved from 2017 levels as it was 5.6% y/y in 2018 and 4.3% y/y in
2019. We expect Tokmanni to reach its sales target of EUR 1bn during 2020E.

Further adj. EBIT margin improvement potential

Tokmanni targets to increase its adj. EBIT margin to ~9%. The adj. EBIT margin
target implies ~1.5 percentage point (pp) margin improvement compared to the
level reached in 2019 (7.5%). Some 0.5-1.5pp of this is to come from gross
margin, which is to improve primarily driven by increased direct sourcing and by
increased share of private label products in the mix. The targeted gross margin
improvement is in line with what we had already incorporated into our estimates
and it reaffirms the validity of further sourcing improvement potential, which
has been key to our investment case. OPEX scalability should contribute the
remaining 0.5-1.0pp. Positive LFL growth and more efficient operations are
expected to be a key driver behind OPEX scalability.

We retain our rating “BUY” and TP of EUR 16

We approach Tokmanni’s valuation through our scenario analysis and valuation
multiples. Our scenario analysis, with emphasis on base case and optimistic
estimates, yields a fair value of EUR 16.0. On our estimates, Tokmanni trades at
20E-21E EV/EBIT multiple of 12.9x and 11.7x which translates into 7-10% discount
compared to the Nordic non-grocery peers and 12-17% discount compared to the
international discount peers. We keep our rating “BUY” and TP of EUR 16 intact.

Open report


RAUTE - ADAPTING TO A SHIFT IN DEMAND

04.03.2020 - 09.20 | Company report

Raute’s 2017-18 was busy as familiar customers executed major capacity
investments; thus ’18 marked a record year for the company. European order
intake fell substantially in ’19, and was soft in other markets as well, barring
Russia. This year may prove a relatively stable one owing to the record-large
Russian order, yet should the cool environment be prolonged revenue is bound to
fall further from the EUR 150m level. Our TP is EUR 25, rating HOLD.

Read more

Demand for large and small orders remains at a good level

Raute left the record-year ’18 behind with a strong EUR 95m order book. Order
intake remained at a decent level in early ’19, but activity began to cool
steadily during the year due to increasing market uncertainty. This was manifest
in mid-sized projects (such as repair and improvement investments) accounting
for an exceptionally low share of order activity. Uncertainty has stayed high,
but it should also be noted demand for spare parts and maintenance services
remains stable, implying good capacity utilization rates at plywood and LVL
mills. The record-large EUR 58m Segezha order means Raute can guide flat sales
development for this year. Nevertheless, Raute guides decreasing EBIT for the
year as the company has recognized a need to accelerate its investments in R&D
and marketing. Raute looks to segment its machinery in order to better address
lower price points and so achieve meaningful growth in emerging markets, but
also aims to further improve its digital solutions offering.

Focus now on the missing middle-sized order demand

Raute’s customer demand is now focused on both large and small orders i.e. major
new capacity projects, minor improvements and services. By contrast, demand for
mid-sized projects, like modernizations, is at an exceptionally low level. It’s
always hard to predict when big orders will materialize; we’ll focus on
monitoring how mid-sized order activity develops going forward.

We view the multiples neutral in current market situation

Raute is now valued at 7x EV/EBITDA and 11x EV/EBIT ‘20e. We view the valuation
neutral given the long-term fundamentals but high current uncertainty. Our TP is
EUR 25, rating HOLD.

Open report


TALENOM - SHARE ISSUE UPDATE, TP EUR 6.7

02.03.2020 - 09.30 | Company update

Talenom made a share issue without payment on the 28.2. to improve share
liquidity, with five new shares for each existing share, after which the nr. of
shares amounts to 41.836m. We adjust our target price to EUR 6.7 (prev. split
adj. EUR 6.83) accounting for dividend distribution (split. adj. EUR 0.125 per
share) and retain our HOLD-rating.

Read more

Share issue without payment to improve share liquidity

Talenom made a share issue without payment on the 28.2. to improve the liquidity
of its share, with five new shares given for each existing share, upon which the
number of shares increased to 41.836m (6x pre-issue). We have since our previous
update adjusted our quarterly estimates due to the impact of the Income
Register, which based on discussion with management should be just below double
the Q4/19 impact and we have as such lowered our Q1/20 revenue and EBIT
estimates by EUR 0.6m, while upward adjustments to the latter quarters in the
year keep our full year estimates intact. Talenom announced the acquisition of
Addvalue Advisors on the 28.2., a bookkeeping company with around EUR 0.5m in
revenue. The acquisition has no material impact on our estimates.

Growth and profitability improvement in 2020

Talenom expects relative growth in net sales and relative profitability in 2020
to be in line with 2019. We expect revenue in 2020 to grow 18.7% to EUR 68.8m
mainly due to organic growth in Finland, with revenue growth in Sweden in our
view expected to start to show in 2021. We expect EBIT to amount to EUR 12.6m,
with growth of ~21% y/y.

HOLD with a target price of EUR 6.7

We adjust our target price to EUR 6.7 (prev. split adj. EUR 6.83), taking into
account the distribution of dividend (record date 27.2., split adj. EUR 0.125
per share). Our target price values Talenom at ~30x 2020E P/E. With valuation in
line with our estimates we retain our HOLD-rating.



Open report


FINNAIR - 20E PROFIT HAMPERED BY CORONAVIRUS

02.03.2020 - 09.20 | Company update

Finnair came out with revised 20E outlook and issued a profit warning as the
impacts of the coronavirus are more severe and far reaching than first
estimated. We have cut our 20E revenue estimate by ~1% and comparable EBIT
estimate by ~23%. We keep our rating “HOLD” with TP of EUR 5.0 (EUR 6.3).

Read more

Revised outlook for 2020E

Finnair revised its 20E outlook due to the larger than first estimated impacts
of the coronavirus. During Q4’19 result, the company indicated that the impacts
on Q1’20E result will be limited and expected 20E capacity growth of ~4% y/y.
According to the new guidance, Finnair expects Q1’20E comparable EBIT to be
lower than in the previous year. The company foresees decreasing demand also in
Q2’20E, resulting in a negative impact on revenue. Q2’20E comparable EBIT is
expected to be significantly lower compared to Q2’19. Therefore, comparable EBIT
for 20E is also expected to be significantly lower than in FY19. In addition,
the company withdrew its capacity (ASK) growth estimate (~4%) for 20E and aims
to adjust its capacity to the current situation. Finnair has also commenced to
seek how to adjust its costs by EUR 40-50m to mitigate the negative financial
impact resulting from the virus.

20E estimates cut

We have made small adjustments to our Q1’20E revenue expectation and cut our
already rather conservative Q1’20E comparable EBIT estimate by ~15%. We also cut
our Q2’20E revenue estimate by ~4% and our comparable EBIT estimate by ~48%.
Thereby, our FY20E revenue estimate is reduced by ~1% and comparable EBIT
estimate by ~23%. We now expect 20E revenue growth of 1.8% y/y (EUR 3154m) while
we expect comparable EBIT to decline by ~19% y/y (EUR 133m). We foresee 20E
capacity (ASK) growth of 2.4% y/y (prev. estimate of 3.5% y/y). We expect
negative impacts especially on Asian routes (Finnair suspended all the flights
to mainland China, which might continue until the end of March) but also on
European routes and on global cargo during H1’20E. We also expect weaker demand
in travel services.

“HOLD” with TP of EUR 5.0 (prev. EUR 6.3)

We have kept our 21E-22E estimates intact as we don’t expect long-term financial
impacts resulting from the coronavirus. However, as the visibility around the
coronavirus and its development remain weak, there are uncertainties especially
with our short-term estimates. We keep our rating “HOLD” with TP of EUR 5.0
(6.3).



Open report


NEXT GAMES - VIEWING GAME LAUNCHES IN H2/2020

02.03.2020 - 08.00 | Company update

Next Games Q4 revenue (Act./Evli EUR 7.7m/8.2m) fell short of our expectations
despite total gross bookings in line with our estimates while EBIT (Act./Evli
EUR -1.8m/-1.7m) was in line with our estimates despite the revenue miss and a
low gross profit. With Blade Runner Nexus moved backed to production phase we
expect new game launches in mid to late H2/2020, with priority in our view set
on launching the Stranger Things -game.

Read more

Slight revenue miss, EBIT held up fairly well

Next Games revenue in Q4 amounted to EUR 7.7m (Evli 8.2m), with gross bookings
of EUR 8.2m (Evli 8.2m). EBIT was in line with our estimates at EUR -1.8m (Evli
-1.7m) despite the lower revenue and a low gross profit margin (Act./Evli
53%/67%). The adj. EBIT amounted to EUR -1.0m (Evli -0.7m). Our World continued
to be affected by retention issues and gross bookings continued to decline. Next
Games added Publishing Operations to its reporting (live games revenue – costs),
at an EBITDA of EUR 3.8m in 2019.

Next major steps should be seen during H2/2020

Next Games expects moderate revenue growth in 2020 and for its publishing
operations EBITDA to be profitable. Revenue from live games is expected to
continue on a flat or declining trend. Blade Runner Nexus was moved back to
production phase and we now expect new game launches in mid to late H2/2020.
Priority in our view will likely be on bringing the commercially more attractive
Stranger Things -game to the market. Successful new launches along with seeking
to solve Our World’s retention and reverse the declining will be key for 2020.
We expect a revenue growth of 5% in 2020 and EBIT to remain clearly in the red
due to development costs of new projects.

HOLD with a target price of EUR 0.84 (0.90)

We have overall slightly lowered our estimates post-Q4 and with the slight
increase in uncertainty brought by the postponement of a BRN launch we adjust
our target price to EUR 0.84 (0.90) and retain our HOLD rating.



Open report


CIBUS NORDIC - EUR 200M SWEDISH ENTRY THIS YEAR?

28.02.2020 - 09.20 | Company update

Cibus reported an unsurprising portfolio performance for Q4, however
administration costs were temporarily elevated due to development efforts.
Nordic expansion could well be on the cards this year. We see Cibus’ yield still
relatively attractive. Our TP is now SEK 150 (135), rating still HOLD.

Read more

The existing portfolio continues to perform well

Cibus’ Q4 rental income, at EUR 13.2m, was close to our EUR 13.3m estimate.
There were no surprises in terms of property expenses, as these summed up to EUR
0.6m and thus net rental income was EUR 12.6m, compared to our EUR 12.5m
estimate. Cibus’ budgeted admin costs run close to EUR 1.0m per quarter. The
admin costs amounted to EUR 2.0m in Q4 due to many one-off considerations.
First, the outsourcing contract with Pareto, now terminated, still had an
effect. Second, Cibus booked EUR 0.5m in restructuring costs in order to achieve
a more efficient legal structure. Cibus also incurred EUR 0.2m due to mapping of
Nordic markets beyond Finland. Therefore Cibus’ Q4 operating income missed our
estimate by ca. EUR 1.0m. There were no notable changes to key metrics as EPRA
NAV (EUR 11.4), LTV ratio (59%), occupancy rate (95%) and WAULT (4.9 years)
remained basically unchanged. Cibus also highlighted its active property
management successes in certain less-than-metropolitan areas like Nastola and
Kajaani by filling local vacancies with tenants such as Lidl and Rusta (a
discount store chain).

Authorization could enable a EUR 200m GAV acquisition

The acquisition of three Tokmanni-anchored properties helped lift the
portfolio’s annual net rental income capacity by about EUR 1.0m to EUR 50.9m.
Last year Cibus managed to achieve its annual EUR 50m acquisition target,
however this year a larger transaction might take place as Cibus is authorized
to issue up to 6.22m new shares. Cibus is eyeing other Nordic markets beyond
Finland. Sweden seems to be the most potential option; the market is, on
average, slightly higher priced than Finland, but Cibus believes it can apply
its own concept there successfully.

Cibus’ 1.23x P/NAV still offers a 100bps yield pick-up

Cibus’ shares have rerated along with the rest of the Nordic RE market. While
Cibus trades at a clear premium relative to GAV/NAV (1.08x/1.23x), the portfolio
remains priced at a competitive yield. Our TP is now SEK 150 (135), rating still
HOLD.

Open report


SOLTEQ - SLOWLY BUT STEADILY

28.02.2020 - 09.00 | Company update

Solteq’s Q4 results fell shy of our expectations. Revenue amounted to EUR 15.7m
(Evli EUR 15.7m) while the adj. EBIT amounted to EUR 1.1m (Evli EUR 1.5m),
affected by some project challenges. We expect revenue to decline slightly in
2020 due to the SAP ERP business divestment, while expecting the adj. EBIT to
remain at 2019 levels. Following estimates revisions, we adjust our target price
to EUR 1.40 (1.50) and retain our HOLD-rating.

Read more

Project challenges affected H2 profitability

Solteq’s revenue in Q4 amounted to EUR 15.7m (Evli 15.7m), growing 5.2% y/y. The
adj. EBIT amounted to EUR 1.1m (Evli 1.5m) and EBIT to 3.3m (Evli 3.8m) due to
the profit from the sale of Solteq’s SAP ERP business. Solteq seeks to
distribute a dividend of EUR 0.05 per share, to be decided upon later. Project
challenges in Finland during H2 affected revenue and as a result profitability.
Comments on the positive development of own software products (i.e. Utilities,
POS) and international growth were welcome, although near-term visibility is
still limited. Product development expenses amounted to EUR 3.9m in 2019 and are
expected to decrease clearly in 2020.

Slight sales decline expected in 2020

We expect revenue to decrease by 1.4% in 2020 following the impact of the sale
of the SAP ERP business. The adj. EBIT is expected to remain at 2020 levels and
with a pick-up in depreciation of capitalized development costs we expect
operational performance to improve in 2020. Our EBITDA and adj. EBIT estimates
for 2020-2021E are down by some 6-10% and ~20% respectively post-Q4 following an
updated view on profitability improvement progress.

HOLD with a target price of EUR 1.40 (1.50)

Solteq saw good earnings growth in 2019 but with the capitalization of
development costs cash flows remained weak. We expect improvements in 2020 but
at a slower pace than previously anticipated. On our lowered estimates we adjust
our target price to EUR 1.40 (1.50) and retain our HOLD-rating.



Open report


NEXT GAMES - REVENUE MISS, TOTAL GROSS BOOKINGS IN LINE

28.02.2020 - 08.30 | Earnings Flash

Next Games' net sales in Q4 amounted to EUR 7.7m, below our and consensus
estimates (EUR 8.2m/8.1m Evli/cons.). Gross bookings amounted to EUR 8.2m (Evli
EUR 8.2m). EBIT amounted to EUR -1.8m, in line with our and consensus estimates
(EUR -1.7m/-1.8m Evli/cons.). Next Games expects moderate growth in 2020 and
profitable publishing operations EBITDA.

Read more

 * Net sales in Q4 were EUR 7.7m (EUR 11.3m in Q4/18), below our and consensus
   estimates (EUR 8.2m/8.1m Evli/Cons.). Net sales in Q4 declined -48% y/y.
   Compared to our estimates, revenue was lower than expected due to lower
   revenue despite gross bookings being in line with our estimates (Act./Evli
   EUR 8.2m/8.2m).
 * Operating profit in Q4 amounted to EUR -1.8m (EUR --1.6m in Q4/18), in line
   with our and consensus estimates (EUR -1.7m/-1.8m Evli/cons.), at a margin of
   -24%. The EBITDA of publishing operations in H2 amounted to EUR 1.5m
 * Adj. EBIT amounted to EUR -1.0m (Q4/18: -0.5m), below our estimate of EUR
   -0.7m.
 * TWD: NML - DAU 183k (Q4/18: 253k), MAU 651k (Q4/18: 728k), ARPDAU EUR 0.25
   (Q4/18: 0.25).
 * TWD: OW - DAU 114k (Q4/18: 223k), MAU 591k (Q4/18: 759k), ARPDAU EUR 0.38
   (Q4/18: 0.28).
 * Guidance: Next Games expects moderate growth in 2020, weighted towards the
   end of the year. Publishing operations EBITDA is expected to be profitable.
   Revenue from already published games expected to continue on a flat or
   declining trend.
 * Changes to reporting: R&D now includes costs relating to unpublished
   products, costs relating to developing live games included in sales and
   marketing expenses



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CIBUS NORDIC - PORTFOLIO PERFORMED AS EXPECTED

27.02.2020 - 09.45 | Earnings Flash

Cibus Nordic reported property portfolio results in line with our expectations.
However, administration costs were higher than we had estimated due to certain
group restructuring and development-related costs.

Read more

 * Cibus’ Q4 rental income amounted to EUR 13.2m vs our EUR 13.3m estimate.
 * After subtracting property expenses, Q4 net rental income was EUR 12.6m,
   while we expected EUR 12.5m.
 * When taking central administration expenses into account, operating income
   was EUR 10.6m, compared to our EUR 11.5m estimate. Administration costs were
   higher than we anticipated due to non-recurring group restructuring costs
   totaling ca. EUR 0.5m (to simplify group structure and help facilitate
   internal funds transfers) as well as EUR 0.2m cost attributable to mapping of
   Nordic markets.
 * Including net financial costs, net operating income was EUR 7.0m vs our EUR
   8.1m expectation.
 * Annual net rental income capacity now stands at EUR 50.9m (previously EUR
   49.9m).
 * The portfolio was valued at EUR 875m, translating to an EPRA NAV of EUR 11.4
   (11.4) per share.
 * Net debt LTV ratio stood at 58.7% (58.9%).
 * Occupancy rate was 94.7% (94.5%) at the end of Q4.
 * WAULT remained basically unchanged at 4.9 years (5.0 years).

Open report


SOLTEQ - EBIT MISSES OUR ESTIMATES

27.02.2020 - 09.15 | Earnings Flash

Solteq's Q4 results were slightly below our estimates. Net sales in Q4 amounted
to EUR 15.7m (Evli EUR 15.7m), while the adj. EBIT amounted to EUR 1.1m (Evli
EUR 1.5m). Solteq expects that its adjusted EBIT will remain at the same level
as in 2019.

Read more

 * Net sales in Q4 were EUR 15.7m (EUR 14.9m in Q4/18), in line with our
   estimates (Evli EUR 15.7m). Growth in Q4 amounted to 5.2 % y/y. Revenue in
   Finland did not grow in 2019 compared to 2018, foreign subsidiary organic
   growth 26%.
 * The operating profit in Q4 amounted to EUR 3.3m (EUR 0.6m in Q4/18), below
   our estimates (Evli EUR 3.8m). The divestment of the SAP ERP business had a
   positive impact of EUR 2.5m. The adj. operating profit amounted to EUR 1.1m
   (EUR 0.6m in Q4/18), below our estimate of EUR 1.5m.
 * Product development investments during Q4/19 amounted to EUR 0.9m (2019: EUR
   3.9m).
 * Guidance for 2020: Solteq expects that its adjusted operating profit will
   remain at the same level as in 2019. In our estimates we have expected growth
   in the adj. operating profit in 2020.
 * Dividend proposal: a dividend of a maximum amount of EUR 0.05 per share may
   be distributed, conditional upon whether the requirements for distribution of
   dividends are fulfilled in term of the company’s solvency and / or financial
   position. A separate announcement will be made if a resolution to distribute
   dividend is made. (Evli est. 0.03 per share)



Open report


INNOFACTOR - SUSTAINING SUCCESSFUL TURNAROUND

26.02.2020 - 09.15 | Company update

Innofactor’s Q4 results were slightly below our expectations, with net sales of
EUR 17.4m (Evli 17.0m) and EBITDA of EUR 1.6m (Evli 2.0m). The business
development remains favourable through a continued healthy order backlog and
revenue mix. With significant improvements in cash generation and a reasonable
financial situation M&A activity could again be on the table to supplement the
service offering in the Nordics and speed up growth.

Read more

Continued healthier profitability

Innofactor’s Q4 results were slightly shy of our expectations. Net sales grew
9.7% from the relatively weak comparison period to EUR 17.4m (Evli 17.0m) while
EBITDA amounted to EUR 1.6m (Evli EUR 2.0m). Innofactor expects net sales and
EBITDA in 2020 to increase from 2019. The order backlog remained at a good level
of EUR 49.8m. Q4 saw no new significant orders but several orders have already
been received during early 2020. The net sales mix remains favourable through a
continued higher level of recurring revenue.

M&A activity could pick up

We continue to expect limited near-term growth (2020E: 4%) with the longer
duration of the order backlog while expecting some further pick-up in margins
(2020E: +1.2%p EBITDA-%). Wage inflation through changes to the Competitiveness
Pact may pose a risk while the margin improvement potential remains supported by
the to our understanding current suboptimal billing rates. With the improved
cash generation and not particularly challenging financial position M&A activity
could likely pick up again to supplement the offering of Innofactor’s pan-Nordic
platform and accelerate growth.

BUY with a target price of EUR 0.90 (0.85)

Innofactor is in our view continuing to show good progress in building up a
healthier business. With valuation not overly stretched we retain our BUY-rating
and raise our target price to EUR 0.90 (0.85).



Open report


NEXT GAMES - NEW GAME LAUNCHES CRUCIAL IN 2020

26.02.2020 - 09.00 | Preview

Next Games will report H2 results on February 28th. During Q4 Next Games
announced that the Blade Runner Nexus game will not be launched during 2019 and
updated its outlook. We expect Q4 revenue of EUR 8.2m, seeing some support from
season 10 of TWD and the typically stronger Q4, as gross bookings have been on a
declining trend for both live games, and an EBIT of EUR -1.7m.

Read more

Expect Q4 revenue of EUR 8.2m, EBIT EUR -1.7m

With Next Games having previously announced that the Blade Runner Nexus game
will not be launched during 2019, of key interest in the H2 report will be any
comments on the upcoming new products. We expect Q4 revenue of EUR 8.2m (Q4/18:
EUR 11.3m), seeing some support for gross bookings from season 10 of TWD and the
typically stronger Q4 due to holiday seasons, with gross bookings having been on
a declining trend so far during 2019. We expect an EBIT of EUR -1.7m.
Profitability has been burdened by the relatively high R&D costs in relation to
revenue from live games.

Launch of new games in 2020 remain crucial

With the delay in the BRN launch from the company’s previous expectations, no
new games were launched in 2019. Successful new game launches in 2020 remain
crucial for ensuring cash flow stability. Both live games have previously been
reported to be operated profitably as independent projects, but development
costs relating to new products have kept earnings figures in the red. Our
assumption is for BRN to be launched mid Q2/20 and the Stranger Things -game in
early Q4/20. The successful rights issue during Q4 together with cost savings
during 2019 provided some much-needed breathing room for the otherwise rather
strained financial position.

HOLD with a target price of EUR 0.90

Following some estimates revisions due to BRN launch timetable assumptions we
continue to expect weaker profitability in 2020 before revenue from new products
kick in. We retain our HOLD-rating and target price of EUR 0.90 ahead of the H2
results.



Open report


INNOFACTOR - MARGINS SLIGHTLY BELOW EXPECTATIONS

25.02.2020 - 09.15 | Earnings Flash

Innofactor’s Q4 results were slightly below our expectations. The net sales in
Q4 amounted to EUR 17.4m (Evli EUR 17.0m), while EBITDA amounted to EUR 1.6m
(Evli EUR 2.0m). Innofactor expects that its net sales and EBITDA in 2020 will
increase from 2019. The BoD proposes that no dividend be paid for 2019 (Evli EUR
0.00).

Read more

 * Net sales in Q4 were EUR 17.4m (EUR 15.9m in Q4/18), in line with our
   estimates (Evli EUR 17.0m). Net sales in Q4 grew 9.7 % y/y. Net sales per
   employee has improved by 15.6% since the previous year.
 * EBITDA in Q4 was EUR 1.6m (EUR -0.9m in Q4/18), below our estimates (Evli EUR
   2.0m), at a margin of 8.9 %.
 * Operating profit in Q4 amounted to EUR 0.5m (EUR - 1.7m in Q4/18), below our
   estimates (Evli EUR 1.0m), at a margin of 2.8 %. Profitability has been
   supported by the measures taken during the end of 2018 to improve
   profitability.
 * Order backlog at EUR 49.8m, up 62.4% y/y. No significant individual orders
   were signed during the quarter as several decisions were delayed until the
   turn of the year.
 * Guidance for 2020: Innofactor’s net sales and EBITDA in 2020 are estimated to
   increase compared to 2019.
 * Dividend proposal: The BoD proposes that no dividend be paid for 2019 (Evli
   EUR 0.00).

Open report


SOLTEQ - FINISHING OFF A YEAR OF GOOD PROGRESS

25.02.2020 - 09.00 | Preview

Solteq will report Q4 results on February 27th. Solteq will report exceptionally
good results, aided by gains from the sale of its SAP ERP business to Enfo. We
expect the operating profitability to have improved slightly from previous year
levels. The divestment should further improve debt ratios sufficiently for
Solteq to reinitiate dividend distribution and we expect a dividend proposal of
EUR 0.03 per share. We retain our HOLD-rating and target price of EUR 1.50
intact ahead of the Q4 results.

Read more

Expect healthy profitability in Q4

We expect Solteq’s Q4 revenue to amount to EUR 15.7m and the adj. EBIT to EUR
1.5m. Solteq sold its SAP ERP business to Enfo Oyj during the quarter and is
expected to book an approx. EUR 2.3m profit in Q4, which will clearly boost
earnings. The sales of the SAP ERP business in 2019 is expected to be EUR 4m.
With the sale of the business Solteq will focus more on the development of its
own software products and services. We expect the sale to sufficiently improve
debt ratios for Solteq to reinitiate dividend distribution, which have been on
hold for two years due to bond covenants and expect a dividend proposal of EUR
0.03 per share.

SAP ERP business sale to affect growth

With the divestment of the SAP ERP business we have lowered our coming year
estimates to account for the decrease in sales. With Solteq on a transformation
journey towards becoming more focused on its own software products and related
services we have not anticipated major growth in the near-term and with the
divestment now expect a minor sales decline in 2020. We continue to expect for
Solteq to remain on a margin improvement trajectory. 2020 guidance should in our
view likely reflect growth in adj. operating profit compared to 2019.

HOLD with a target price of EUR 1.5

Apart from adjustments made based on the divestment of the ERP SAP business, our
estimates remain unchanged. We retain our HOLD-rating and TP of EUR 1.5.

Open report


SCANFIL - HIGHER MULTIPLES ARE WARRANTED

20.02.2020 - 09.20 | Company update

Scanfil’s Q4 results fell slightly short of our expectations, yet overall there
were no significant changes in the wider picture. The HASEC acquisition helped
Industrial as well as Medtec & Life Science top line, however both segments
extended strong organic growth. Scanfil aims to grow at a 5% organic CAGR
according to its updated long-term target; in our view there’s still good upside
to current multiples. Our TP is now EUR 5.75 (5.25), remain BUY.

Read more

All segments continued to grow except Communication

Scanfil’s EUR 155m Q4 revenue didn’t quite meet our EUR 159m estimate yet grew
by 10% y/y. The Industrial segment (key accounts include Kone) jumped by a third
in Q4 (Q3 y/y growth was 52%), and so the EUR 47m revenue almost met our EUR 51m
estimate. Scanfil says the performance has been due to organic growth but the
HASEC acquisition also helped. Medtec & Life Science (potential customers
include Thermo Fisher Scientific and Vaisala) top line grew by 17% y/y and so
was in line with our EUR 29m estimate. Scanfil says the segment grew mostly in
an organic fashion, receiving only slight lift from the German acquisition.
Energy & Automation (e.g. Valmet) continued to grow at a stable organic 6%
annual rate. Consumer Applications has stabilized for two quarters now, but the
business is rather seasonal. Communication (e.g. Nokia) fell by 24%, yet Scanfil
says the segment could well stabilize this year. Scanfil’s Q4 operating margin,
at 6.5%, was 60bps below our estimate; we still think the company will easily
reach its 7% long-run target.

Scanfil targets 5% organic CAGR during the next four years

We estimate Scanfil has grown at a 6% organic rate during the last two quarters.
Considering Scanfil’s strong cost, quality and delivery record we view the
company’s 5% CAGR target as highly feasible, especially given a good positioning
in Industrial and Medtec & Life Science, which we estimate to contribute some
two-thirds of all the organic growth going forward.

In our view Scanfil can be valued above peer multiples

Although lowish valuation multiples are in general well-advised for contract
electronics manufacturers, in our view Scanfil’s strong profitability track
record as well as organic growth outlook justify higher than the current 6x
EV/EBITDA and 8x EV/EBIT ‘20e multiples. Our new TP is EUR 5.75 (5.25), retain
BUY.



Open report


GOFORE - ROOM FOR IMPROVEMENT IN 2020

20.02.2020 - 08.30 | Company update

Gofore’s H2 results came in slightly better than expected. EBITA was at
comparison period levels and amounted to EUR 3.0m (Evli EUR 2.8m). The BoD
proposes a dividend of EUR 0.23 per share (Evli EUR 0.20). Gofore expects
revenue and the comparable adj. EBITA to grow compared to 2019. We retain our
HOLD-rating with a TP of EUR 8.2 (8.0).

Read more

H2 EBITA slightly above our estimate at EUR 3.0m

Gofore’s H2 results were slightly better than expected. Revenue amounted to EUR
30.6m (pre-announced), with growth of 18.2% y/y, while EBITA remained at
comparison period levels and amounted to EUR 3.0m (Evli EUR 2.8m). The BoD
proposes a dividend of EUR 0.23 per share (Evli EUR 0.20). Full year relative
profitability declined slightly, driven by a 5% increase in average wages and a
1 %-point decrease in billing rates, while customer prices increased 2.3%.

Continued revenue and EBITA growth

Gofore expects revenue and the comparable adj. EBITA in 2020 to grow compared to
2019. Organic growth in H2 was according to our estimates clearly in the
single-digits, affected by the drop in demand among certain larger customers in
Q3. We expect organic growth to pick-up in 2020. Currently, the impact of
inorganic growth in 2020 will be clearly smaller and we expect a decline in
sales growth to 9.7% in 2020. Gofore is however sitting on a formidable cash
position and continued M&A activity is not unlikely. Profitability in 2020 will
be affected by one-offs relating to the divestment of the UK business but
cost-savings will bring the impact to a net positive. We expect an improvement
in adj. EBITA-margins to 13.6% in 2020.

HOLD with a target price of EUR 8.2 (8.0)

Gofore’s performance has slightly faltered, with slower organic growth and minor
margin declines, but we still see performance and thus valuation at above peers.
We value Gofore at 16x 2020 P/E (goodwill amortization. adj.) and adjust our
target price to EUR 8.2 (8.0) and retain our HOLD-rating.



Open report


GOFORE - SLIGHTLY ABOVE EXPECTATIONS

19.02.2020 - 09.30 | Earnings Flash

Gofore’s EBITA in H2 was slightly better than our expectations, at EUR 3.0m
(Evli 2.8m). Revenue amounted to EUR 30.6m (pre-announced). The BoD proposes a
dividend of EUR 0.23 per share (Evli EUR 0.20). Gofore expects that its net
sales and comparable adjusted EBITDA will grow in 2020 compared to 2019.

Read more

 * Gofore H2/19 net sales amounted to EUR 30.6m (pre-announced), with sales
   growth in at 18.2% compared to H2/18 figures. Growth was driven by organic
   growth and the acquisition of Silver Planet.
 * EBITA in H1 amounted to EUR 3.0m, slightly above our estimates (Evli EUR
   2.8m), at a margin of 10.0%. EBIT amounted to EUR 2.0m (Evli EUR 1.7m), at a
   6.5% EBIT-margin.
 * Dividend proposal: Gofore’s BoD proposes a dividend of EUR 0.23 per share
   (Evli EUR 0.20)
 * Guidance: Gofore's net sales and comparable adjusted EBITA will grow compared
   to 2019. Adjusted EBITA means EBITA, adjusted for nonrecurring items.
 * The number of personnel at the end of the period was 582 (H2/18: 495).



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EXEL COMPOSITES - IMPROVEMENT POTENTIAL STILL EXISTS

19.02.2020 - 09.10 | Company update

Exel’s Q4 EBIT failed our estimate due to one-off items. We believe the company
remains on an improvement track. Our TP is now EUR 6.75 (6.00), new rating BUY
(HOLD).

Read more

We continue to expect top line to grow at high single digits

Q4 top line, at EUR 26.6m, was flat y/y and a little soft compared to our EUR
27.8m estimate. This was due to Construction & Infrastructure, where Q4 revenue
declined by 2% y/y to EUR 12.6m, while we expected EUR 14.3m. Q4 was thus a
relatively slow quarter for the segment, as y/y revenue growth had amounted to
12% in Q3. Exel says there have been no changes to e.g. wind energy demand;
there can be wide variations in quarterly figures. Industrial Applications’ Q4
revenue declined by 1% y/y to EUR 8.5m and so the figure was above our EUR 8.0m
estimate. Other Applications’ Q4 revenue was in line with our EUR 5.5m estimate.
Although Exel’s Q4 top line fell short of our estimate only slightly, adj. EBIT
was only EUR 1.3m vs our EUR 2.3m estimate. The gap was due to other operating
expenses, which were high at EUR 6.4m (had averaged EUR 5.4m in the last few
quarters). Exel says the high expenses were due to items like temporary
production plant overlap in China as well as certain production-related
one-offs. We find no other surprises on the cost side as gross margin remained
at a 60% level and employee expense share continued to decline (down by 200bps
y/y to 28%). Order intake continued to increase by 9% y/y.

Exel guides increasing revenue as well as adj. EBIT for ‘20

Exel will likely record some EUR 15m capex in ’20 due to the production plant
investment in Austria and residual payments related to a past Chinese
acquisition. Overall, we continue to view Exel’s volume outlook favorable. We
expect wind energy to provide further strong uplift this year. Exel highlights
good volume potential in applications such as cable cores and certain
defense-related equipment. With regards to profitability, cost savings measures
by themselves should contribute another EUR 1m this year, following the EUR 2m
achieved last year.

We see more upside as volume outlook remains good

Exel’s valuation (ca. 8x EV/EBITDA and 13x EV/EBIT ‘20e) is still more than 20%
below peer multiples. Although we believe some discount is warranted, we see
upside from current levels. Our updated TP is EUR 6.75 (6.00), rating now BUY
(HOLD).

Open report


SCANFIL - NOT QUITE AS HIGH AS WE EXPECTED

19.02.2020 - 08.35 | Earnings Flash

Scanfil’s Q4 didn’t reach our expectations as top line missed our estimate by a
few percentage points while operating margin was some 60bps lower than we
expected.

Read more

• Scanfil Q4 revenue amounted to EUR 155m vs EUR 159m/157m Evli/consensus
estimates.

• Communication top line was EUR 21m, while we estimated EUR 23m.

• Consumer Applications’ revenue was EUR 28m, compared to our EUR 27m estimate.

• Energy & Automation recorded EUR 29m Q4 revenue vs our EUR 29m estimate.

• Industrial top line amounted to EUR 47m vs our EUR 51m expectation.

• Medtec & Life Science Q4 revenue was EUR 29m, compared to our EUR 29m
estimate.

• Scanfil’s Q4 EBIT stood at EUR 10.0m vs EUR 11.3m/11.0m Evli/consensus
estimates. Operating margin thus amounted to 6.5%, whereas we estimated 7.1%.

• The BoD proposes EUR 0.15 (0.13) dividend per share to be distributed, which
we had estimated at EUR 0.16.

• Scanfil guides ’20 revenue in the EUR 590-640m range and expects adjusted
operating profit to amount to EUR 39-43m. We find this guidance range
unsurprising as FY ’19 revenue stood at EUR 579.4m while adjusted operating
profit was EUR 39.4m. Scanfil says the guidance is subject to exceptional
uncertainty due to the coronavirus situation.

• Scanfil updates its long-term financial target, according to which Scanfil
aims to reach EUR 700m revenue organically in ’23 (previously EUR 600m in ’20)
with a 7% operating margin.

Open report


EXEL COMPOSITES - EBIT MISS DRIVEN BY ELEVATED COSTS

18.02.2020 - 09.35 | Earnings Flash

Exel Composites reported Q4 revenue slightly below our expectations, while
adjusted operating profit fell short of our estimate more dramatically, by about
EUR 1.0m, as other operating expenses were higher than we had estimated.

Read more

 * Q4 revenue amounted to EUR 26.6m, compared to EUR 27.8m/27.7m Evli/consensus
   estimates.
 * Construction & Infrastructure top line was EUR 12.6m (EUR 12.9m a year ago)
   vs our EUR 14.3m estimate.
 * Industrial Applications generated EUR 8.5m (EUR 8.6m) sales, whereas we
   expected EUR 8.0m.
 * Other Applications top line amounted to EUR 5.5m (EUR 5.2m), in line with our
   EUR 5.5m expectation.
 * Q4 adjusted EBIT was EUR 1.3m, compared to EUR 2.3m/2.2m Evli/consensus
   estimates. The figure missed our expectation as other operating expenses were
   about EUR 1.0m higher than we had estimated.
 * The BoD proposes EUR 0.18 (0.18) dividend per share be distributed, while we
   had expected EUR 0.20.
 * Exel Composites guides revenue and adjusted operating profit to increase in
   2020 compared to 2019, which is as we expected. The company says the
   coronavirus will have an impact on its Chinese production volumes in Q1 yet
   is not ready to estimate the impact in more detail.



Open report


VERKKOKAUPPA.COM - SHIFTS FOCUS TOWARDS PROFITABILITY

17.02.2020 - 09.35 | Company update

Verkkokauppa.com’s Q4 result didn’t meet the expectations as sales were
negatively impacted by the postal strike and the changed timing of tax refunds.
Q4 sales were EUR 159.9m (Evli 168.9m) while EBIT amounted to EUR 4.5m (Evli
6.0m). We keep our rating “HOLD” with TP of EUR 3.5 (3.3).

Read more

Q4 result hampered by the postal strike

Verkkokauppa.com’s Q4 result missed expectations as sales growth of 2.6% y/y
remained below market growth (Gfk: 4.4%), amounting to EUR 159.9m vs. our EUR
168.9m (cons. 164m). Headwind from the postal strike was stronger than
anticipated and the changed timing of tax refunds hampered December sales. Black
Friday sales were however better than ever. Gross profit was down by 3% y/y due
to heavy campaigning during Black Friday. EBIT was EUR 4.5m vs. our EUR 6.0m
(cons. 5.6m) resulting from weakened gross profit. ’19 dividend proposal was in
line at EUR 0.21 vs. our EUR 0.21 (cons. 0.21).

Prioritizing profitability in ‘20E

Verkkokauppa.com has normally prioritized growth over profitability, which has
weighed down margins, as the competition in the consumer electronics market has
been extremely tight and price driven. In ‘20E, the company shifts its focus
towards profitability and aims for more moderate growth. We thus expect the
growth to be somewhat in line with the market growth (GfK ’19 estimate: 2.9%
y/y). In order to strengthen efficiency especially in logistics, the company has
commenced to seek opportunities within drop shipping (direct delivery from
manufacturer to the customer). This allows Verkkokauppa.com to expand its
product assortment without logistical pressures. The company also aims to launch
a new subcategory in H1’20E and to increase its private label assortment during
20E, which should have a positive impact on profitability, as private labels
normally provide better margins. We expect ‘20E-‘21E sales growth of 3.2-3.5%
y/y and EBIT growth of 12-18% y/y.

“HOLD” with TP of EUR 3.5 (3.3)

Verkkokauppa.com guided ‘20E revenue of EUR 510m-530m and EBIT of EUR 12-15m. We
have lowered our ‘20E sales estimate by some 5% and expect ‘20E sales of EUR
520m (3.2% y/y), which is at the midpoint of the guidance. Our view of EBIT
development is rather conservative as the market is highly competitive and price
driven. Despite of the good control over costs we expect to get more visibility
on the actions to be taken for more efficient operations. We expect EBIT to grow
by ~18% y/y in ‘20E, amounting to EUR 13.3m. On our estimates, Verkkokauppa.com
trades at ‘20E-‘21E EV/EBIT multiple of 10.1x and 9.0x, which translates into
~60-70% discount compared to the peers. We keep our rating “HOLD” with TP of EUR
3.5 (3.3).



Open report


SSH - SMALL PROGRESS, BUT NOT ENOUGH

17.02.2020 - 09.10 | Company update

SSH’s Q4 was broadly in line, capping off a challenging year of sales decline.
Given the weak performance in FY’19, SSH’s guidance for 2020 was a small
disappointment. We’ve cut our estimates for the coming years and maintain our
target price of EUR 1.0, our recommendation is now HOLD (prev. SELL).

Read more

Q4 broadly as expected, capping off a disappointing year

Q4 net sales were EUR 4.1 million (vs. 4.7m our Evli). Net sales decreased by
-35.8% compared to the previous year mainly due to the end of the patent
licensing programme and reduced consulting revenue. Software business sales
decreased -11.8% y/y due to the smaller initial project size compared to last
year including a large license deal received in Q4’18. Software fees were EUR
1.8 million (2.2m Evli), Professional services were EUR 0.3 million (0.2m Evli),
and Recurring revenue was EUR 2.1 million (2.3m Evli). Q4 operating loss was EUR
-0.1 million (vs. 0.2m Evli). FY’19 as a whole; net sales of software business
(excluding patent income in FY’18) decreased -8% y/y and EBIT was -1.2 MEUR (0.5
MEUR FY’18), attributed to lower sales (despite OPEX reduction), less larger
license deals and with significant patent income received in FY’18.

2020 guidance disappointing given 2019 performance

SSH’s expectations for 2020 are revenue growth of 10-15 percent and an improving
operating result (-1.2 MEUR FY'19). SSH expect clearly faster growth rates for
PrivX and NQX, steady growth for UKM matching the industry growth rate, and
modest growth for Tectia, which is the most mature product. The combined effect
of these growth rates will result in moderate short-term growth, which SSH
expects to accelerate over the next several years. Given the weak performance in
SSH’s software business in FY’19, the guidance was a small disappointment and we
have consequently cut our sales estimates. We now estimate 16.6 MEUR net sales
for 2020E (prev. 17.5MEUR), resulting in 15% y/y growth, which is right at SSH’s
guidance upper range. Reaching that level of net sales will require several
larger one-off UKM license deals and/or some bigger NQX deals in 2020E. In
conjunction with our estimates revision, we have also now amended our estimates
regarding the 12 MEUR hybrid loan interest expenses, which as of March 30th 2020
will rise from 7.5% to 11.5%. Management did not provide any new commentary
regarding hybrid loan and its possible redemption or re-financing.

Maintain EUR 1.0 target price, recommendation HOLD (prev. SELL)

Despite our estimates cut, the bigger picture remains unchanged in our view;
with the underlying question in the investment case still regarding growth. SSH
has made progress, but the progress is slow and given SSH’s historical and
current growth profile, the question remains will growth materialize. We
maintain our target price of EUR 1.0, our recommendation is now HOLD (prev.
SELL). As noted before, SSH trades at a clear discount to the cyber security
sector. Our target price implies an EV/Sales multiple of 2.4 on our ‘20E
estimate, slightly below Nordic software peers, which we see as warranted given
weaker metrics and the uncertainty to our estimates.

Open report


FELLOW FINANCE - GROWTH INVESTMENTS IN 2020

17.02.2020 - 08.30 | Company update

Fellow Finance’s H2 results fell short of our expectations, with EBIT amounting
to EUR 0.3m (Evli 1.0m), affected by non-recurring personnel expense items of
EUR 0.7m. Margin pressure is expected to continue in 2020 due to growth
investments while accelerated turnover growth is expected in 2021-2022. Fellow
Finances BoD proposes that no dividend be paid for FY2019 (Evli EUR 0.04). We
retain our HOLD-rating with a target price of EUR 4.0 (4.2).

Read more

H2 EBIT below expectations mainly due to NRI’s

Fellow Finance’s H2 results fell short of our expectations. Turnover amounted to
EUR 7.0m. Turnover grew 9.1%, driven by an increase in interest yields as
commission income decreased slightly. EBIT amounted to EUR 0.3m (Evli 1.0m),
impacted by NRI’s of EUR 0.7m. The BoD proposes that no dividend be paid (Evli
EUR 0.04 per share). Turnover is expected to grow in 2020 while the operating
profit is expected to decrease compared to 2019 (EUR 1.6m) due to growth
investments.

Growth investments to lower margins in 2020

We have made downward revisions to our estimates post-H2. We expect an EBIT of
EUR 1.3m (prev. 2.1m) and turnover growth of 4% (prev. 6%) in 2020. The consumer
lending market in Finland is expected to remain challenging at least during
H1/20. We expect limited growth in 2020 as the international operations ramp up
and low average consumer loans in Poland, one of the furthest established
international markets, will limit the growth pace but offer some upside through
higher relative commission yields. We continue to expect growth pick-up in 2021.
Profitability will be burdened by higher personnel costs and credit loss
reservations associated with scaling up new markets.

HOLD with a target price of EUR 4.0 (4.2)

Fellow Finance’s growth story continues to be challenged by the competitive
situation in the consumer lending market in Finland and the visibility into
accelerated international growth remains limited. On our revised estimates we
adjust our target price to EUR 4.0 (4.2) and retain our HOLD-rating.

Open report


PIHLAJALINNA - EXPECTING A PROFITABILITY TURNAROUND IN 20E

17.02.2020 - 08.30 | Company update

Pihlajalinna’s Q4 revenue was as expected at EUR 133.8m (Evli 133.6m) but
profitability was weighed down by increased costs. Q4 adj. EBIT amounted to EUR
5.6m (Evli 7.8m). The tender offer by Mehiläinen is currently being reviewed in
FCCA and the process is expected to be completed at the end of Q2’20 or latest
during Q3’20. For ‘20E we expect a clear improvement in profitability. We keep
our rating “HOLD” with TP of EUR 16.

Read more

Q4 revenue in line – adj. EBIT missed expectations

Pihlajalinna’s Q4 revenue of EUR 133.8m (5.4% y/y) was as anticipated (Evli/cons
EUR 133.6m/134.4m) but adj. EBIT of EUR 5.6m missed the expectations (Evli/cons
EUR 7.8m/8.5m). Profitability was hampered by increased costs related to public
specialized care which were concentrated towards the end of the year. Volume and
profitability developed favorably in sales to insurance companies (revenue up by
18.1% y/y) but also in occupational healthcare, following the acquisition of
Terveyspalvelu Verso. Due to the tender offer by Mehiläinen, no dividend for ’19
is proposed (Evli/cons EUR 0.15/0.15).

Expecting a turnaround in profitability

In ’19, the performance especially in occupational healthcare was good as
revenue in the segment grew more than 25% y/y. Profitability was positively
impacted by increased share of fixed price services and development of
operational models. We expect further growth in occupational healthcare but also
in sales to insurance companies, of which, the latest agreement with Pohjola
Insurance is an example. Due to the uncertainties around the social and
healthcare reform, municipalities have become more active on outsourcing
projects. In late ’19, Kristiinankaupunki and Pihlajalinna agreed on a partial
outsourcing deal, starting in ‘21E, with total value of EUR ~90m. The contract
is at least for 15 years. For ‘20E we don’t expect any new outsourcings to
occur. We expect profitability (adj. EBIT) to improve by 68% y/y in ’20E and by
7% y/y in ‘21E due to the cost savings resulting from the efficiency improvement
program that was launched last summer. We expect ’20E-‘21E revenue growth of
~3-4%.

“HOLD” with TP of EUR 16 intact

The tender offer by Mehiläinen is currently being under review of FCCA. The
first phase investigation will be completed by mid-March though it is highly
likely that FCCA will initiate continued phase two proceedings after phase one,
meaning that the process is likely to be completed at the end of Q2’20E or
latest during Q3’20E. According to Pihlajalinna’s guidance, ‘20E revenue and
adj. EBIT are expected to increase from ‘19. We expect ‘20E revenue of EUR 538m
(3.8% y/y) and adj. EBIT of EUR 35.1 (68% y/y). Our target price is in line with
the tender offer price of EUR 16. We keep our rating “HOLD”.

Open report


GOFORE - EXPECT SLIGHTLY LOWER MARGINS IN H2

17.02.2020 - 08.30 | Preview

Gofore will report H2 results on February 19th. Revenue in H2 amounted to EUR
30.6m based on reported monthly figures. We expect margin decreases compared to
H1/19, driven by the weak development of Gofore’s UK operations and lower
revenue, and expect an EBITA-margin of 9.0%. We expect a dividend proposal of
EUR 0.20 per share. Growth will in our view slow down clearly in 2020 with a
lower impact of inorganic growth and a weaker market outlook. We retain our
HOLD-rating and TP of EUR 8.0.

Read more

Expecting weaker margins in H2 due to lower revenue

Gofore will report H2 results on February 19th. Revenue in H2 has based on
monthly figures been EUR 30.6m, with a y/y growth of 18.4%, of which a majority
will have been inorganic growth from the Silver Planet acquisition. Revenue
development during H2 has been sub-par, affected partly by a weak development of
Gofore’s UK operations, which were divested in early 2020. We expect the revenue
development to have had a negative impact on margins and expect the EBITA-margin
to decrease to 9.0% (H1/19: 15.1%). Our dividend proposal estimate is EUR 0.20
per share (2019: EUR 0.19).

Relative growth pace seen to slow down

Gofore revised its long-term financial target for growth in December 2019.
Growth is still seen to be faster than the target market, but the market growth
estimate was lowered from 15-25% to above the general ICT service sector growth
but below 10%. Our growth estimate for 2020 is 10.8%, of which some 9% organic
(not including possible new M&A activity). Cost savings from divesting the UK
operations will have a slight net positive effect on profitability in 2020 and
we expect an EBITA-margin of 13.5%.

HOLD with a target price of EUR 8.0

We have not made any notable changes to our estimates pre-H2 apart from
adjustments based on monthly revenue figures. We retain our HOLD-rating and
target price of EUR 8.0 ahead of the H2 results.

Open report


SSH - Q4 RESULT BROADLY AS EXPECTED, 2020 GUIDANCE SIGNALS CONFIDENCE IN
TURNAROUND

14.02.2020 - 09.30 | Earnings Flash

SSH Q4 result was broadly as expected. Outlook for 2020: SSH expects revenue
growth of 10-15 percent and an improving operating result.

Read more

 * Q4 net sales were EUR 4.1 million (vs. 4.7m our expectation). Net sales
   decreased by -35.8% compared to the previous year mainly due to the end of
   the patent licensing programme and reduced consulting revenue.Software
   business sales decreased -11.8% y/y due to the smaller initial project size
   compared to last year including a large license deal received in Q4’18.
 * Software fees were EUR 1.8 million (2.2m Evli), Professional services were
   EUR 0.3 million (0.2m Evli), and Recurring revenue was EUR 2.1 million (2.3m
   Evli)
 * Q4 operating loss was EUR -0.1 million (vs. 0.2m our expectation)
 * EPS was -0.02 (vs. 0.00 our estimate)
 * Liquid assets were EUR 12.0m (11.6m Q3/19)
 * Business outlook for 2020: SSH expects revenue growth of 10-15 percent and an
   improving operating result (-1.2 MEUR FY'19)
 * SSH expect clearly faster growth rates for PrivX and NQX, steady growth for
   UKM matching the industry growth rate, and modest growth for Tectia, which is
   the most mature product. The combined effect of these growth rates will
   result in moderate short-term growth, which SSH expects to accelerate over
   the next several years.
 * CEO comment: “We are making progress with our new products, PrivX and NQX,
   which we expect to start having an increasing impact on our revenue and
   bottom line in 2020 and beyond.”



Open report


MARIMEKKO - INVESTMENTS INTO GROWTH CONTINUE

14.02.2020 - 09.20 | Company update

Marimekko delivered good Q4 result. Sales grew by 17% y/y to EUR 34.7m (Evli
34.6m). Sales growth was strong especially in Finland and APAC region. Adj. EBIT
was EUR 3.0m (Evli 2.9m). We keep our rating “HOLD” with TP of EUR 44 (39).

Read more

Q4 revenue driven by strong sales in Finland

Marimekko’s Q4 net sales amounted to EUR 34.7m (17% y/y) vs. our EUR 34.6m
(cons. 34.3m). Sales performance was strong especially in Finland, driven by
increased retail and wholesale sales (retail LFL growth 21% y/y). APAC region
performed well also, as revenue was boosted by increased wholesale sales and
licensing income. Q4 adj. EBIT was EUR 3.0m vs. our EUR 2.9 (cons. 3.0m).
Profitability was driven by strong sales but weighed down by increased fixed
costs. Proposed ’19 dividend of EUR 0.90 was below expectations (Evli/cons EUR
1.14/1.08).

Expecting a strong year in home market

We expect the good performance in Finland to continue in ‘20E, driven by broader
target audience. Domestic wholesale sales are expected to be substantially
higher than in ‘19, due to nonrecurring promotional deliveries. We expect ‘20E
sales growth of 12% y/y in Finland, representing some 58% of Marimekko’s total
sales in ‘20E. We also expect sales to increase in APAC region, though the
coronavirus and political uncertainties could have a negative impact on sales.
The actions taken to control the grey export cases in APAC region will also have
an impact on sales and result. We expect APAC ‘20E sales growth of 2.5% y/y
(H2’19 sales included nonrecurring licensing income of EUR 1.6m).

Increased investments into growth

We expect profitability improvement of ~12-18% y/y in ‘20E-‘21E, supported by
strong sales growth and improved gross margin. According to the company,
investments into growth will be higher in ‘20E, resulting in increase in
personnel and marketing expenses. Store network will be expanded by ~10 new
stores and shop-in-shops and some existing stores will be renewed. The company
will also develop further its digital business and IT systems. We expect total
OPEX to increase by ~10% y/y, hampering profitability development.

“HOLD” with TP of EUR 44 (prev. EUR 39.0)

We have slightly increased our ‘20E sales expectation and expect sales growth of
9.2% y/y (136.9m) while we expect adj. EBIT of EUR 20.1m (17.5% y/y). We see
that Marimekko is able to achieve and maintain higher margins than the premium
goods peer group, which justifies higher multiples similar to our luxury goods
peer group median. On our estimates, Marimekko trades at ‘20E-‘21E EV/EBIT
multiple of 16.7x and 14.6x which translates into ~20% discount compared to the
luxury peer group. We keep our rating “HOLD” with TP of EUR 44 (EUR 39).



Open report


ASPO - HIGHER EBIT REMAINS MISSING

14.02.2020 - 09.15 | Company update

Aspo’s EUR 5.4m Q4 EBIT missed us and consensus by ca. EUR 1.0m. The miss was
due to Telko. We believe Aspo has operational upside long-term, however we also
view current valuation neutral given the uncertainty surrounding the improvement
slope. We have made only minor estimate revisions. Our TP remains EUR 8.25,
rating still HOLD.

Read more

ESL didn’t disappoint, yet macro uncertainty still weighs

ESL posted EUR 4.4m Q4 EBIT i.e. a 5% y/y increase and slightly above our EUR
4.3m estimate. In our view this was a decent performance considering Q4 cargo
volumes declined y/y from 4.5m tonnes to 4.0m tonnes as steel industry shipments
fell dramatically. Energy industry shipment volumes were also soft due to warm
weather. Aspo sees Baltic Sea steel industry cargo volumes now stabilizing. Even
though the LNG-powered vessels as well as AtoB@C are performing well, there’s
uncertainty regarding ESL’s EBIT improvement slope this year. Nevertheless, even
if steel industry shipments don’t rebound meaningfully in ’20 we would still
expect ESL to achieve significantly higher EBIT. Telko’s EUR 0.9m Q4 EBIT didn’t
meet our EUR 2.2m estimate and declined significantly y/y from EUR 3.4m. EBIT
took a EUR 0.9m hit due to low volumes and raw materials prices, and FX. Telko
also destocked low-margin low-turnover inventory, which also had a negative EUR
0.9m effect. Leipurin bakery business seems to be improving especially in
Russia, however given the macro uncertainties around ESL’s and Telko’s profit
development we don’t see this as a meaningful enough value driver currently.

Aspo guides improving EBIT for this year

We still view ESL able to post some EUR 5-6m in quarterly EBIT; should steel
industry volume development turn positive in ’20 the dry bulk carrier should
have no trouble achieving EUR 20m (compared to EUR 14.6m last year). Aspo says
Telko’s Q1 will still be burdened by destocking measures. In our view Telko
should still be able to achieve quarterly EBIT close to EUR 3m this year.

In our view valuation is neutral given uncertainty

There’s significant upside potential relative to Aspo’s long-term targets,
however in our opinion the bridge there is not as of now stable enough to turn
our view more positive. Our TP is still EUR 8.25, while our rating remains HOLD.



Open report


ENDOMINES - GROWTH STORY IN NEED OF FINANCING

14.02.2020 - 09.00 | Company update

Endomines is nearing commercial production at Friday, after several bumps on the
road, and ramp-up to design capacity is expected in March 2020. The production
delay has put a clear dent in Endomines’ financial situation and additional
financing will in our view be needed in the near-term to bring further assets
into production. With the financing risk overshadowing the future potential we
downgrade to SELL (HOLD) with a TP of SEK 5.0 (4.7).

Read more

Nearing commercial production at Friday

Endomines continued to post meager figures in Q4, as gold concentrate sales from
Friday have not yet commenced. Bottom-line figures were as a result clearly in
the red, with EBITDA at SEK -15.1m. Endomines expects to ramp-up production at
Friday to design capacity (3,445 tonnes/month) in March 2020. The concentrate
sales agreement is yet to be confirmed but should in our view be signed during
Q1. Built up ore stockpiles will speed up production ramp-up, but we expect head
grades to be well below expected typical grades during the first half of 2020.

Financial position again at risk

Endomines financial situation has again become a reason for concern, as group
cash fell to SEK 15.7m (Q3/19: SEK 61.9m) in Q4. The Friday production facility
investments are largely behind and cash flows will improve once production at
Friday picks up. Friday cash flows will however not suffice to develop new
assets and Endomines will in our view seek additional financing in the near
future. Previous debt-financing options have not been favourable and a rights
issue could be on the table.

SELL (HOLD) with a target price of SEK 5.0 (4.7)

Endomines is finally nearing production start at Friday and has continued
consolidating its land assets in Idaho and is seeking to expand further through
the transaction with Transatlantic. The gold price development has further
remained favourable. The positive drivers are in our view, however, overshadowed
by the near-term financial risks. We adjust our target price to SEK 5.0 (4.7)
and downgrade to SELL (HOLD).



Open report


RAUTE - GROWTH PURSUIT WEIGHS EBIT THIS YEAR

14.02.2020 - 08.40 | Company update

Raute’s Q4 was mixed relative to our estimates. More important was Raute’s
commitment to pursue emerging markets growth. We retain our EUR 25 TP and HOLD
rating.

Read more

Q4 put an end to a year following the record-high one

Raute reported EUR 39.3m in Q4 sales, above our EUR 37.0m estimate but down by
27% y/y. Project deliveries sales declined by 36% y/y to EUR 24.1m, while
technology services top line was also soft at EUR 15.2m (down 10% y/y) owing to
the low demand for cyclical modernization projects. We had expected Raute to
post EUR 3.0m in Q4 EBIT as the company indicated Q4 would be the strongest in
’19 in terms of profitability, however the figure was realized at EUR 1.8m due
to certain unforeseen costs owing to the record-high workload in ’18. With
regards to order activity, Raute booked EUR 17m in new orders during Q4. The
figure was slightly below our EUR 19m expectation and declined by 39% y/y. The
EUR 4m project order intake was indeed low, while services orders dropped by 32%
to EUR 13m due to lack of modernizations. In our view the cool market is not, at
least for now, a major problem for Raute as the company should still be able to
post relatively stable top line this year thanks to the EUR 58m Segezha project
(and total EUR 88m order book).

Raute guides flat sales and lower EBIT for this year

In our opinion Raute’s decision to guide stable sales development for ’20 wasn’t
a surprise. In practice Raute’s guidance policy is rather loose and given the
recent order flow we see sales slightly down this year. The picture could of
course change swiftly should larger orders materialize. In our view the main
takeaway was that Raute expects lower EBIT this year as the company is
responding to the market shift by committing itself to increased efforts in R&D
and marketing. As European activity remains low due to recent major investment
cycle in new capacity, Raute aims to grow in emerging markets more seriously
than before by segmenting its equipment to better reach lower price points.

We update our estimates following the report

We have cut our estimates for this year as the market environment has remained
cool. While we previously expected Raute’s ‘20e revenue to amount to EUR 148.6m,
we now expect EUR 141.8m. With regards to operating profit, we previously
expected Raute to achieve EUR 11.1m this year. We now see the figure down to EUR
7.8m as Raute has decided to invest more in developing its offering more
attractive for emerging markets. Raute used to spend some EUR 3m annually in
R&D; looking at Raute’s latest figures we think the company is on track to spend
more than EUR 5m this year. Moreover, the large Segezha order makes up a
significant portion of workload this year and thus its lower margin will
restrict operating profit potential.

We continue to view valuation neutral

In the long-term an expanded offering could have big financial potential. Still,
the current picture is rather murky. We view Raute’s valuation (8x EV/EBITDA and
12x EV/EBIT ‘20e) neutral in the current environment. Our TP is still EUR 25,
rating HOLD.



Open report


VERKKOKAUPPA.COM - EARNINGS MISS IN Q4

14.02.2020 - 08.35 | Earnings Flash

Verkkokauppa.com’s Q4’19 revenue grew by 3% and was EUR 159.9m vs. Evli EUR
168.9m and consensus of EUR 164.0m. Gross profit was EUR 22.2m (13.9% margin)
vs. EUR 24.7m (14.6% margin) Evli view. EBIT was EUR 4.5m vs. EUR 6.0m/5.6m
Evli/cons. 2020E guidance: The company expects revenue to be 510-530 million
euros and comparable operating profit to be 12-15 million euros.

Read more

• Q4 revenue was EUR 159.9m vs. EUR 168.9m Evli view and EUR 164.0m consensus.
Sales grew by 3% while market growth was 4.4% (GfK estimate). Revenue growth in
Q4 was boosted by record sales during Black Friday, additional marketing
activities and campaigning. Tax refund changes and Posti’s strike had a negative
impact on sales during the Christmas season.

• Q4 gross profit was EUR 22.2m (13.9% margin) vs. EUR 24.7m (14.6% margin) Evli
view. Gross profit weakened due to heavy campaigning during Black Friday.

• Q4 EBIT was EUR 4.5m (2.8% margin) vs. EUR 6.0m (3.6% margin) Evli view and
EUR 5.6m (3.4% margin) consensus. EBIT decreased mostly due to a lower gross
margin.

• Q4 eps was EUR 0.07 vs. EUR 0.10/0.09 Evli/cons.

• 2020 guidance: The company expects revenue to be 510-530 million euros and
comparable operating profit to be 12-15 million euros.

• The company also decided on a quarterly dividend of EUR 0.048 per share. Total
’19 dividend is EUR 0.21 vs. our EUR 0.21 and EUR 0.21 consensus.

Open report


PIHLAJALINNA - PROFITABILITY BELOW EXPECTATIONS

14.02.2020 - 08.30 | Earnings Flash

Pihlajalinna’s Q4’19 revenue amounted to EUR 133.8m vs. EUR 133.6m/134.4m
Evli/cons, while adj. EBIT landed at EUR 5.6m vs. EUR 7.8m/8.5m Evli/cons
estimates. Organic growth increased by 3.1% y/y. 20E consolidated revenue is
expected to increase from the 2019 level. Adjusted EBIT is expected to increase
compared to 2019.

Read more

• Q4 revenue was EUR 133.8m vs. EUR 133.6m/134.4m Evli/cons estimates. Revenue
grew by 5.4% y/y. Organic growth was 3.1% y/y.

• Q4 adj. EBITDA was EUR 14.4m (10.8% margin) vs. EUR 16.7m/17.5m Evli/cons
estimates. Profitability was affected by the costs of public specialized care
that were concentrated towards the end of the year. Personnel expenses were also
increased by stricter requirements imposed by the authorities.

• Q4 adj. EBIT was EUR 5.6m (4.2% margin) vs. EUR 7.8m/8.5m (5.8%/6.3%)
Evli/cons estimates.

• Q4 EPS was EUR 0.16 vs. EUR 0.23/0.21 Evli/cons.

• Due to the Mehiläinen’s tender offer, no dividend for ’19 is proposed (EUR
0.15/0.15 Evli/cons).

• Guidance for 20E: consolidated revenue is expected to increase from the 2019
level. Adjusted EBIT is expected to increase compared to 2019

Open report


FELLOW FINANCE - MISS ON EARNINGS, GUIDANCE WEAKNESS

14.02.2020 - 08.30 | Earnings Flash

Fellow Finance’s H2/2019 results fell short of our expectations. Revenue was as
per co’s previous guidance EUR 7.0m, while EBIT and adj. EBIT amounted to EUR
0.3m and EUR 1.0m respectively (Evli EUR 1.0m/1.0m). Fellow Finance’s BoD
proposes that no dividend be paid for 2019 (Evli EUR 0.04 per share). Fellow
Finance expects turnover to grow in 2020 while growth efforts are expected to
decrease the operating profit compared to 2019.

Read more

 * Revenue in H2 amounted to EUR 7.0m (EUR 6.4m in H2/18), in line with our
   estimates (Evli EUR 7.0m, pre-announced). Growth in H2 amounted to 9.1%.
 * Fellow Finance facilitated loans during H2 for a total of EUR 92m (EUR 96m in
   H2/18).
 * Adj. EBIT in H2 amounted to EUR 1.0m (EUR 1.7m in H2/18), in line with our
   estimates (Evli EUR 1.0m). EBIT amounted to EUR 0.3m (Evli EUR 1.0m).
 * Adj. EPS in H2 amounted to EUR 0.01 per share (EUR 0.14 in H2/18), below our
   estimate of EUR 0.04. EPS amounted to EUR -0.07 (Evli EUR 0.04)
 * Guidance: In 2020, turnover is expected to grow, and the company's growth
   efforts are expected to decrease operating profit compared to 2019. The
   guidance implies weaker figures than we had expected, as we have estimated
   minor growth in 2020 but EBIT of EUR 2.1m. New guidance implies EBIT of less
   than EUR 1.6m.
 * Dividend proposal: The BoD proposes that no dividend be paid for 2019 (Evli
   EUR 0.04).
 * During H2 new services and market openings were prepared and a subsidiary
   established in Estonia.



Open report


ASPO - EBIT MISS ATTRIBUTABLE TO TELKO

13.02.2020 - 10.40 | Earnings Flash

Aspo reported Q4 EBIT at EUR 5.4m i.e. missing our and consensus estimate by
about EUR 1.0m. In our view the EBIT miss was wholly attributable to Telko.

Read more

 * Group revenue amounted to EUR 147.0m in Q4, compared to EUR 150.5m/152.5m
   Evli/consensus estimates.
 * Aspo posted EUR 5.4m Q4 EBIT whereas the expectation was EUR 6.4m/6.6m
   Evli/consensus.
 * ESL Shipping’s Q4 revenue stood at EUR 45.3m, while we expected EUR 44.5m.
   ESL Q4 EBIT was EUR 4.4m vs our EUR 4.3m estimate.
 * Telko’s revenue amounted to EUR 69.8m in Q4 vs our EUR 71.9m expectation.
   Meanwhile Q4 EBIT was recorded at EUR 0.9m, in comparison to our EUR 2.2m
   estimate. Aspo says Telko’s EBIT was burdened by measures aiming to address
   the low-margin low-turnover material inventories (to the tune of EUR 0.9m).
   The figure was also burdened by decreased volumes and raw materials prices as
   well as FX (a combined EUR 0.9m).
 * Leipurin’s Q4 revenue was EUR 31.9m, compared to our EUR 34.1m estimate.
   Leipurin posted EUR 1.1m in Q4 EBIT vs our EUR 1.0m expectation.
 * The BoD proposes EUR 0.45 dividend per share to be distributed in two
   installments.
 * Aspo guides operating profit to increase this year compared to the EUR 21.1m
   figure last year.



Open report


ENDOMINES - FULL PRODUCTION AT FRIDAY SOUGHT DURING Q1

13.02.2020 - 10.00 | Earnings Flash

Endomines did not sell any gold concentrate from Friday in Q4, with commercial
production expected to commence in March 2020. Full production at Friday is
sought to be achieved during Q1. No numeric production guidance was given but
ramp-up to design capacity (3,445 tonnes per month) is expected in March 2020.

Read more

 * Endomines did not sell any gold concentrate from Friday in Q4 and had in
   early February announced the expected start-up of commercial production in
   March 2020, which was not included in our estimates.
 * Revenue* amounted to SEK 0.7m, with our estimates at SEK 22.0m, as we had
   expected gold concentrate sales from Friday.
 * EBITDA* in Q4 was at SEK -15.1m, below our estimate of SEK -0.8m given the
   lack of gold concentrate sales.
 * (*Not reported, derived from H1 and Q1-Q3 figures)
 * During December Endomines processed 420.5 ore tonnes with a head grade of
   2.65g/t Au (low-grade pre-production development ore) resulting in 2.65
   tonnes of concentrate grading 189.2g/t Au. In December Endomines took over
   all mining activities from the mining contractor at Friday. Endomines has
   mined approx. 5,000 tonnes of ore up to date, stockpiled at the mine and mill
   areas. Full mining production delayed to coincide with mill commissioning.
 * Endomines did not give a numeric production guidance for 2020, expecting
   ramp-up to design capacity (3,445 tonnes per month) in March 2020.
 * The BoD expectedly proposed that no dividend will be paid for 2019.



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RAUTE - GUIDES LOWER OPERATING PROFIT

13.02.2020 - 09.35 | Earnings Flash

Raute reported Q4 revenue above our expectations, however operating profit fell
clearly short of our expectations as Raute discovered costs attributable to ’18
workload. As expected, Raute guides flat sales development for ’20, however we
didn’t expect the company to guide lower operating profit for the year.

Read more

 * Raute reported EUR 39.3m Q4 sales (27% y/y decline) in comparison to our EUR
   37.0m estimate. Project deliveries generated EUR 24.1m in sales.
 * Q4 EBIT amounted to EUR 1.8m, while we had estimated EUR 3.0m. The figure was
   burdened by unforeseen costs stemming from record-high workload in ‘18.
   Apparently Raute discovered these issues not before late ’19. Operating
   margin was thus 4.6% vs our 8.1% expectation.
 * Q4 order intake was EUR 17m vs our EUR 19m expectation. Order intake thus
   decreased 39% y/y. Order book stood at EUR 88m (EUR 95m a year ago).
 * The BoD’s dividend proposal is EUR 1.45 per share.
 * Raute guides flat sales development for this year (as expected) but expects
   operating profit to decrease due to adaption measures taken to respond to
   shifting markets as well as investments in marketing, product development and
   digitalization.



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VAISALA - VALUATION RUNNING AHEAD OF THINGS

13.02.2020 - 09.10 | Company update

Vaisala ended a solid 2019 with a good Q4 that beat expectations. The outlook
for 2020 was rather cautious with current expectations already at upper range of
guidance. Both acquired companies contributed significantly in last year’s
growth, and we see further M&A as key to accelerate growth and maintain current
valuation. Our estimates remain broadly unchanged post Q4 and thus we maintain
previous TP of EUR 29.5. Due to continued share price rally our recommendation
is now SELL (prev. HOLD).

Read more

A good finish to a solid year

Vaisala ended a solid 2019 with a good Q4 that beat expectations. Q4 net sales
grew 9% y/y to 118.1 MEUR (118 Evli, 116 cons) and EBIT improved +27% to 17.7
MEUR (16 MEUR Evli/cons.). Dividend proposal is 0.61 (0.60 Evli/cons.). Net
sales growth was driven by good level of delivery volumes thanks to record high
order book during end of last year. Q4 EBIT improvement was driven by gross
margin improvement of 170 bps due to net sales growth and scale benefits.

Both business areas fuelled by M&A

W&E Q4 net sales grew 5% (1% excl. FX and M&A) to 81.9 MEUR (80.0 Evli), with
growth in all regions except China. W&E Q4 EBIT was 12.1 MEUR (10 Evli). W&E
order intake growth was -3%, -8% growth excl. FX and M&A, due to less larger
projects during Q4. IM Q4 net sales grew 18% (5% excl FX and M&A) to 36.3 MEUR
(38.0 Evli) and was strong in all regions. IM Q4 EBIT was 5.5 MEUR (7.6 Evli).
IM order intake grew by 19%, 8% excl. FX and M&A. Both acquired companies, i.e.
Leosphere (W&E) and K-patents (IM), have been successfully integrated to
Vaisala’s platform and contributed significantly in FY’19 growth. Half of IM’s
FY’19 net sales growth came from K-Patents acquisition, while W&E FY’19 net
sales growth excluding FX and M&A was 2%. Vaisala has indicated the possibility
of further add-on acquisitions in liquid measurements area. With its platform,
strong balance sheet and current valuation, Vaisala is in a good position to
continue value accreditive acquisitions in our view.

2020 outlook slightly soft as expectations already in upper end

Vaisala estimates its 2020 net sales to be in the range of 400–425 MEUR and EBIT
in the range of 38–48 MEUR, which practically means 0-5% growth and 9-12% EBIT
margins. Given that our previous 2020 estimates, as well as consensus figures
(FY’20E net sales 423M, EBIT 48.3 MEUR) were already in the upper end of the
outlook, the guidance is cautious. Vaisala expects W&E market segments to be
stable or somewhat grow, while industrial and liquid measurement market segments
are expected to continue to grow.

Estimates unchanged, valuation is running ahead of things

Apart from a slight trim to our sales estimates, our estimates are unchanged for
the coming years. With the acquired businesses integrated into Vaisala’s sales
channel and continued stable to good organic momentum in both W&E and IM, we see
Vaisala’s targeted above 5% sales growth achievable and road to >12% margins
progressing well. The underlying main driver for growth is continued good growth
in industrial business supported by further bolt-on acquisitions. As a result,
we estimate IM share of Vaisala’s EBIT to grow to 66% in ‘21E (vs. 56-57% in
’17-’18), driving ~10% EBIT growth in coming years. Vaisala’s share har
continued to rally, pushing new all-time highs. On our estimates, Vaisala is
trading at PPA amortizations adjusted EV/EBIT multiples of 24.7x and 22.4x for
‘20E and ‘21E, a ~50% premium to our peer group median despite exhibiting lower
profitability profile than our peer group. On our adjusted ‘20E P/E multiples,
premium is roughly 50% as well. Despite Vaisala’s strong sustainability profile,
growing dividend, and especially IM’s highly profitable growth with possibility
of further add-on acquisitions, we see current valuation too stretched given our
current growth and earnings estimates (which do not account for further M&A). We
maintain previous TP of EUR 29.5, which values Vaisala at EV/EBIT 23.5x and 21x
on ’20-21E, still at ~40% premium to our peer group. Due to continued share
price rally our recommendation is now SELL (prev. HOLD).

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MARIMEKKO - Q4 RESULT AS EXPECTED

13.02.2020 - 09.00 | Earnings Flash

Marimekko’s Q4 net sales increased by 17% and amounted to EUR 34.7m vs. EUR
34.6m/34.3m Evli/cons. Adj. EBIT was EUR 3.0m vs. EUR 2.9m/3.0m Evli/cons. In
2020E, revenue is expected to be higher than in the previous year while adj.
EBIT is estimated to be approximately at the same level or higher than in the
previous year.

Read more

 * Finland: revenue was EUR 21.9m vs. EUR 21.0m Evli view. Revenue increased by
   20%.
 * International: revenue was EUR 12.8m vs. EUR 13.6m Evli view. Revenue
   increased by 12%.
 * Retail sales increased by 16%. Wholesale sales increased by 15%. Growth came
   primarily from retail and wholesale sales in Finland as well as increased
   wholesale sales and licensing income in the Asia-Pacific region.
 * Q4 adj. EBIT was EUR 3.0m (8.7% margin) vs. EUR 2.9m/3.0m (8.4%/8.8% margin)
   Evli/cons. Profitability was boosted by sales growth whereas higher fixed
   costs had a negative impact on result.
 * Q4 EPS was EUR 0.26 vs. EUR 0.29/0.28 Evli/cons.
 * Proposal for ’19 dividend: EUR 0.90 vs. EUR 1.14/1.08 Evli/cons.
 * Guidance for 2020E: revenue is expected to be higher than in the previous
   year while adj. EBIT is estimated to be approximately at the same level or
   higher than in the previous year.



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VAISALA - Q4 RESULT SMALL BEAT, 2020 OUTLOOK SIGNALS 0-5% GROWTH AND 9-12% EBIT
MARGINS

12.02.2020 - 14.20 | Earnings Flash

Vaisala’s Q4 net sales grew 9% to 118.1 MEUR vs. 118 MEUR our expectation and
116 MEUR consensus. Q4 reported EBIT was 17.7 MEUR vs. our expectation of 16
MEUR (16 MEUR consensus). Dividend proposal is 0.61(0.60 Evli, 0.60 consensus).

Read more

• Group level results: Q4 net sales grew 9% to 118.1 MEUR vs. 118 MEUR our
expectation and 116 MEUR consensus. Q4 EBIT was 17.7 MEUR vs. our expectation of
16 MEUR (cons. 16 MEUR). EPS was 0.41 (0.35 Evli, 0.34 consensus).

• Dividend proposal is 0.61(0.60 Evli, 0.60 consensus).

• Gross margin was 56.0 % vs. 54.3 % last year.

• Orders received was 103.3 MEUR vs. 99.1 MEUR last year. Orders received
increased by 4% and growth without currency impact and acquisitions was -3%.

• Weather & Environment (W&E) net sales grew 5% (1% excl. FX and M&A) to 81.9
MEUR vs. 80.0 MEUR our expectation. EBIT was 12.1 MEUR (10 MEUR Evli). Order
intake growth was -3% in Weather and Environment, -8% growth excl. FX and M&A.

• Industrial Measurements (IM) net sales grew 18% (5% excl FX and M&A) to 36.3
MEUR vs. 38.0 MEUR our expectation. EBIT was 5.5 MEUR (7.6 MEUR Evli).
Industrial Measurements order intake grew by 19%, 8% excl. FX and M&A.

• Business outlook for 2020: Vaisala estimates its full-year 2020 net sales to
be in the range of EUR 400–425 million and its operating result (EBIT) to be in
the range of EUR 38–48 million.

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ETTEPLAN - SOME UNCERTAINTY HEADING INTO 2020

12.02.2020 - 09.00 | Company update

Etteplan’s Q4 results were below expectations, driven by the impact of the
industrial strike in Finland. The guidance for 2020 EBIT was softer than
expected, with some caution being taken due to the unpredictability in the
impact of the coronavirus. Demand outlook comments were nonetheless slightly
positive based on early 2020 development. We have slightly lowered our 2020
estimates to account for a likely weaker Q1. We retain our HOLD-rating with an
ex-div TP of EUR 10.2.

Read more

Clear negative impact of industrial strike

Etteplan’s Q4 results were below expectations. Revenue amounted to EUR 71.8m
(EUR 72.1m/72.7m Evli/cons.), with 14.2% growth y/y (1.4% organic excl. FX),
driven by the mid-2019 acquisitions. EBIT amounted to EUR 5.6m (EUR 6.1m/6.3m
Evli/cons.) and EBIT excl. NRI’s to EUR 5.1m. Profitability was below comparison
period figures in all service areas, driven mainly by the impact of the
industrial strike in Finland in December. Challenges in certain projects also
affected profitability of the Software and Embedded Solutions service area. The
BoD’s dividend proposal is EUR 0.35 per share (EUR 0.36 Evli/cons.)

Coronavirus prompts EBIT guidance cautiousness

Etteplan expects revenue to grow clearly in 2020 and EBIT to be at the same
level or improve compared to 2019. The EBIT guidance was softer than expected,
reflective of a more cautious approach due to uncertainty related to the
coronavirus. Comments on general demand outlook were slightly more positive,
with signs of pick-up following slightly decreased political uncertainty. We
have lowered our 2020 EBIT estimate by some 7%, expecting a weaker Q1 due to the
coronavirus.

HOLD with an ex-div target price of EUR 10.2

On our revised estimates and slightly increased caution due to the coronavirus
uncertainty we adjust our target price to EUR 10.2 ex-div and retain our
HOLD-rating, valuing Etteplan at 14x 2020 P/E.



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ETTEPLAN - SOME SOFTNESS IN RESULTS/GUIDANCE

11.02.2020 - 13.15 | Earnings Flash

Etteplan's net sales in Q4 amounted to EUR 71.8m, in line with our estimates and
consensus (EUR 72.1m/72.7m Evli/cons.). EBIT amounted to EUR 5.6m, below our
estimates and below consensus (EUR 6.1m/6.3m Evli/cons.). Dividend proposal:
Etteplan proposes a dividend of EUR 0.35 per share (EUR 0.36 Evli/Cons.).

Read more

 * Net sales in Q4 were EUR 71.8m (EUR 62.8m in Q4/18), in line with our and
   consensus estimates (EUR 72.1m/72.7m Evli/Cons.). Growth in Q4 amounted to
   14.2 % y/y, of which 0.7 % organic growth.
 * EBIT in Q4 amounted to EUR 5.6m (EUR 5.7m in Q4/18), below our and consensus
   estimates (EUR 6.1m/6.3m Evli/cons.), at a margin of 7.7 %. EBIT (excl. NRIs)
   amounted to EUR 5.1m (Evli EUR 6.1m).
 * EPS in Q4 amounted to EUR 0.16 (EUR 0.18 in Q4/18), below our and consensus
   estimates (EUR 0.19/0.20 Evli/cons.).
 * Engineering Solutions: Net sales in Q4 were EUR 40.8m vs. EUR 40.5m Evli.
   EBITA in Q4 amounted to EUR 3.6m vs. EUR 4.0m Evli.
 * Software and Embedded Solutions: Net sales in Q4 were EUR 17.7m vs. EUR 19.1m
   Evli. EBITA in Q4 amounted to EUR 1.4m vs. EUR 2.1m Evli.
 * Technical Documentation Solutions: Net sales in Q4 were EUR 13.1m vs. EUR
   12.5m Evli. EBITA in Q4 amounted to EUR 0.9m vs. EUR 1.0m Evli.
 * Dividend proposal: Etteplan proposes a dividend of EUR 0.35 per share (EUR
   0.36 Evli/Cons.).
 * Guidance: revenue for 2020 expected to increase clearly and EBIT to be at the
   same level or improve compared to 2019. The EBIT guidance appears somewhat
   soft compared to our expectations.



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FELLOW FINANCE - LOOKING FOR SIGNS OF GROWTH PICK-UP

11.02.2020 - 09.15 | Preview

Fellow Finance will report H2/19 results on February 14th. Revenue growth will
based on company guidance have been around 10% during H2 despite a minor decline
in intermediated loan volumes. We expect the slower growth and increased
competition in Finland to have had a negative impact on margins. We expect a
dividend proposal of EUR 0.04 per share. We retain our HOLD-rating and lower our
target price to EUR 4.2 (5.0) ahead of H2 results.

Read more

Slower loan volume growth puts pressure on margins

Company guidance for 2019 puts full-year revenue growth at around 19% and the
implied H2/19 growth will be around 10%. Intermediated loan volumes during H2
have seen minor declines compared with H2/18, affected by the increased
competition within consumer lending in Finland. Revenue growth is as such
expected to be driven by higher interest income. We expect margins to have
continued to decline with the slower revenue growth and the impact of the
increased competition on broker commissions. We expect a dividend proposal of
EUR 0.04 per share (2018: 0.04).

2020 expected to remain a ramp-up year

We expect 2020 to continue to be challenging for Fellow Finance. Fellow
Finance’s growth story was heavily dented by the stalling intermediated loan
volume development and profitability has declined. We expect 2020 to continue to
be a ramp-up year for international operations but do not expect the growth to
materialize significantly before 2021. Growth investments are also expected to
have an impact on margins, and we expect a minor decline in operating profit in
2020.

HOLD with a target price of EUR 4.2 (5.0)

Without any clear signs of growth pick-up, we find it hard to identify clear
near-term upside potential. The 2020 guidance should hopefully provide more
light on the matter. We lower our target price to EUR 4.2 (5.0) and retain our
HOLD-rating.



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DETECTION TECHNOLOGY - SLIGHT DENT IN GROWTH STORY

11.02.2020 - 09.10 | Company update

DT reported a Q4 that clearly missed ours and market expectations. DT’s lowered
medium-term financial target regarding sales growth also put a slight dent in
our growth story investment case. Due to the miss and lowered medium-term growth
target, we have clearly cut our estimates for the coming years. Despite our
estimates cut, we remain, as noted in our preview comment, positive towards the
longer-term investment case as we continue to see DT executing well on a growth
market with strong drivers. Our target price remains EUR 24, recommendation is
now HOLD (prev. BUY).

Read more

Q4 result missed clearly expectations, FY’19 growth decent

DT’s Q4 net sales amounted to EUR 25m (-2.5% y/y) vs. EUR 27.7m/27.4m
Evli/consensus estimates. Q4 EBIT was EUR 3.2m (12.8% margin) vs. EUR 5.1m/4.7m
Evli/cons. R&D costs amounted to EUR 2.66m or 10.6% of net sales. Dividend
proposal is 0.38 (0.38 Evli / 0.39 cons.). SBU had net sales of EUR 16.4m vs.
EUR 19m Evli estimate. SBU sales grew 6% y/y, but growth was affected by
temporarily lower sales in CT products and delayed deliveries to one key
customer. MBU delivered net sales of EUR 8.6m which was in line with our
estimate of EUR 8.7m. Net sales of MBU decreased by -15.4% y/y due to continued
softness in the medical imaging market. In FY’19, DT posted +9.2% growth (+5.5%
in FY’18), with 16.6% EBIT-margin (19.7% in FY’18) hampered by increased costs
and slowdown in MBU.

Growth to continue in 2020, but circumstances lower visibility

As usual, the visibility in DT’s case is quite low. DT estimates annual growth
to remain at previous 5-6% level in all market segments in 2020, but coronavirus
may have a temporary adverse impact on growth in H1. DT also estimates the
temporary slowdown in the global medical CT market to continue in Q1, and the
situation to normalize at the end of 2020. DT still sees H1 growth despite
headwinds. DT expects significant sales contribution in 2020E from recently
launched Aurora product family for SBU as well as roughly 1 MEUR contribution
from X-Panel on MBU side.

Updated financial targets puts slight dent in growth story

DT updated its medium-term financial targets; DT now aims to grow at least 10%
(prev. 15%) and achieve EBIT-margin at or above 15% (no change) in medium term.
DT announced in Q2’19 its updated strategy until 2025; the new strategic target
is to be the growth leader in digital x-ray imaging detector solutions and a
significant player in other technologies and applications where the company sees
good business opportunities. DT estimates that the market for digital x-ray
imaging detector solutions will be around EUR 3 billion in 2025. DT’s previous
strategy until 2020 was based on being the leader in computed tomography and
line-scan x-ray detectors and solutions. The total market, as per the company's
previous strategy, is estimated to be around EUR 700 million in 2020, of which
DT has roughly 20% share. Despite a larger market scope, DT sees moderating the
sales growth targets as prudent as growth becomes more difficult as a +100 MEUR
revenue company. We’ve emphasized the growth story in our investment case based
on the strong growth drivers, especially in China, where Beijing’s “Made in
China 2025” initiative has led to double digit growth rates for many local
Chinese OEM’s that are DT’s clients. Although market drivers remain intact, we
lower our sales growth estimates for 2020-21E from 14-15% to 10-12.5% based on
the updated financial targets.

Estimates cut, we maintain target price of EUR 24

Based on the Q4 report and lowered longer-term sales growth targets, we have cut
our sales estimates 7-9% and our EBIT estimates 17-20% for 2020-21E. We now
estimate DT to grow 10% and 12.5% in 2020-21E (prev.14-15%). We estimate 2020E
EBIT to grow 12% to 19 MEUR (17% EBIT margin) as SBU’s Aurora volumes ramp-up in
H2 and MBU returns to growth mode after temporary slowdown. On our new
estimates, DT is trading at ‘20E 17.2x EV/EBIT and 23.6x P/E, which is broadly
in line with our peer group. Despite our estimates cut, we remain, as noted in
our preview comment, positive towards the longer-term investment case as we
continue to see DT executing well on a growth market with strong drivers. We do
not however currently have enough conviction in our estimates; therefore, we
maintain our target price at EUR 24, recommendation is now HOLD (prev. BUY).

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DETECTION TECHNOLOGY - Q4 RESULT MISS, MODERATES ITS FINANCIAL TARGETS

10.02.2020 - 09.30 | Earnings Flash

DT’s Q4 net sales at EUR 25m (-2.5% y/y) vs. EUR 27.7m/27.4m Evli/consensus
estimates. SBU sales grew +6% to EUR 16.4m (EUR 19m our expectation) and MBU
sales declined -15.4% to EUR 8.6m (EUR 8.7m our expectation). DT’s Q4 EBIT came
in at EUR 3.2m vs. our estimates of EUR 5.1m (EUR 4.7m cons). EBIT excluding
non-recurring items was EUR 3.9 million (4.9 Q4’18). Dividend proposal is 0.38
(0.38 Evli / 0.39 consensus).

Read more

• Group level results: Q4 net sales amounted to EUR 25m (-2.5% y/y) vs. EUR
27.7m/27.4m Evli/consensus estimates. Q4 EBIT was EUR 3.2m (12.8% margin) vs.
EUR 5.1m/4.7m Evli/cons. R&D costs amounted to EUR 2.66m or 10.6% of net sales.
Dividend proposal is 0.38 (0.38 Evli / 0.39 cons.).

• Security and Industrial Business Unit (SBU) had net sales of EUR 16.4m vs. EUR
19m Evli estimate. SBU sales grew 6% y/y but growth was affected by temporarily
lower sales in CT products and delayed deliveries to one key customer.

• Medical Business Unit (MBU) delivered net sales of EUR 8.6m which was in line
with our estimate of EUR 8.7m. Net sales of MBU decreased by -15.4% y/y due to
softening in the medical CT market and the ramp-down of one key MBU customer’s
product.

• Outlook update: DT estimates annual growth to remain at previous 5-6% level in
all market segments in 2020, but the indirect impacts of the corona virus
epidemic in Asia may have a temporary adverse impact on growth in H1. DT also
estimates the temporary slowdown in the global medical CT market to continue in
Q1, and the situation to normalize at the end of 2020, but demand may fluctuate
significantly.

• New financial targets: DT aims to increase sales by at least 10% per annum and
to achieve an operating margin at or above 15% in the medium term. (Previous
target: to increase sales by at least 15% p.a. and to achieve an EBIT margin at
or above 15% in the medium term)

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FINNAIR - NORMALIZING CAPACITY GROWTH IN ‘20E

10.02.2020 - 09.25 | Company update

Finnair delivered strong Q4 result. Q4 revenue was EUR 774.9m vs. our 740m
(cons. 744m) while adj. EBIT amounted to EUR 31.2m vs. our 8.2m (cons. 9.0m).
Finnair expects ‘20E capacity growth of ~4% but didn’t provide more detailed
‘20E guidance due to the coronavirus. We keep our rating “HOLD” with TP of EUR
6.3 (6.5).

Read more

Q4 better than expected

Finnair’s Q4 result beat the expectations in terms of both revenue and
profitability. Revenue grew by 13.4% y/y and amounted to EUR 774.9m vs. our EUR
740m (cons. 744m). The difference is mainly due to Finnair’s better than
anticipated revenue management (i.e. ticket fares). Revenue development was good
especially in North America (38.5% y/y) and in Europe (17.3% y/y). Q4 costs were
as expected with fuel cost of EUR 171m (Evli 171m) and other OPEX (incl. D&A) of
EUR 588m (Evli 580m). Q4 adj. EBIT was EUR 31.2m vs. our EUR 8.2m (cons. EUR
9.0m). Proposed dividend for ’19 is EUR 0.20 vs. our EUR 0.11 (cons 0.10).

Expecting ASK growth of ~4% y/y

Finnair’s capacity (ASK) growth was strong in ’19 (11.3% y/y), driven by two new
A350s, received last year and one A350, received in Dec’18. The added capacity
was mainly put to Asian routes. Two more A350s are expected to be delivered
during H1’20E. For 20E, Finnair guides capacity growth of ~4% y/y while our
expectation is at 3.6% y/y. We expect the good performance to continue
especially in Europe where many airlines have cut capacity but also in North
America. We expect cargo to remain relatively soft in ’20E due to continuing
uncertainties around global trade.

Weak visibility due to the coronavirus

Finnair did not provide a revenue estimate for 20E, as the total impacts of the
coronavirus are still unknown. Finnair has suspended all the flights to mainland
China, which might continue until the end of March. Finnair estimates that the
Q1’20E financial impacts remain limited as the post Chinese New Year time is
usually relatively quiet in terms of traveling. Due to the coronavirus, one
delivery of A350 will be delayed from April to June. We have slightly decreased
our Q1’20E revenue expectation (approx. -1%) but expect the impacts for the full
year to remain limited.

“HOLD” with TP of EUR 6.3 (6.5)

We expect 20E revenue of EUR 3191m (3% y/y) and adj. EBIT of EUR 171m (5% y/y),
resulting in adj. EBIT margin of 5.4%. However, as the visibility of the
coronavirus is weak, there are uncertainties especially with our short-term
estimates. On our estimates, Finnair trades at ‘20E-'21E EV/EBIT multiple 9.2x
and 8.4x, which translates into ~10-20% premium compared to the peers. We keep
our rating “HOLD” with TP of EUR 6.3 (6.5).



Open report


RAUTE - THIS YEAR RELIES ON A RECORD ORDER

10.02.2020 - 09.20 | Preview

Raute reports Q4 results on Thu, Feb 13. Our estimates stand unchanged since we
see market softness still exists as before. We retain our EUR 25 TP and HOLD
rating.

Read more

Raute did not disclose any large orders in late ‘19

We see no reason to update our estimates for Q4 and beyond as Raute hasn’t
released information regarding any larger booked orders since the company
disclosed the record-large EUR 58m Russian project. Raute booked the Segezha
order at the end of Q3 and the project will be delivered this year, meaning
Raute has a decent backbone from which to work on in an environment of cooling
demand. All in all, our view towards Raute hasn’t changed in the sense that we
continue to wait to see more positive signals in the market, which is still
mostly cooling in the wake of a strong capacity investment boom in Europe.

We expect Q4 order intake to have declined to EUR 19m

Raute’s Q3 revenue decreased by 30% y/y to EUR 33.7m as project deliveries sales
fell by 51% y/y to EUR 16.5m. Meanwhile technology services top line grew by 20%
y/y to EUR 17.2m. However, we note services order intake fell to only EUR 8m in
Q3 because of the slow demand for more cyclical modernization projects (the
order intake had averaged some EUR 15m in recent quarters). Overall, Q3 order
intake increased to EUR 73m from EUR 42m in Q3’18 owing to the Segezha order. We
expect Q4 revenue to decline 32% y/y to EUR 37.0m as we see project deliveries
down by 47% to EUR 20.0m and services up marginally to EUR 17.0m. We see Q4 EBIT
at EUR 3.0m (EUR 3.4m a year ago); this would make Q4 the strongest quarter of
the year in terms of profitability, as Raute suggested before.

Our TP of EUR 25 per share and HOLD rating are unchanged

We don’t expect Raute to report meaningful changes to current market environment
i.e. the sentiment is still characterized by uncertainty. We expect Raute to
guide flat revenue and EBIT for FY ’20; we see Raute’s profitability improving
slightly this year as the company is in a relatively good position thanks to the
EUR 58m order. Still, Raute’s conservative guidance policy is unlikely to
reflect this. We view valuation (6.5x EV/EBITDA and 8.5x EV/EBIT ‘20e) neutral
given the market softness. We believe the BoD will propose a dividend of EUR
1.40 per share.



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CONSTI - MARGIN RECOVERY PROGRESSING WELL

10.02.2020 - 08.30 | Company update

Consti’s Q4 results were quite in line with our estimates, with net sales at EUR
78.3m (Evli EUR 80.9m) and operating profit at EUR 2.8m (Evli EUR 3.0m). We
expect sales to decline around 10% in 2020 due to continued weak order backlog
development. The new organization along with the related cost savings should
absorb the expected lower volumes and we continue to expect clear earnings
improvement. We retain our HOLD-rating with a target price of EUR 8.0 (7.0).

Read more

Q4 results largely in line, order backlog continued decline

Consti’s Q4 results were quite in line with our estimates. Net sales amounted to
EUR 78.3m (Evli EUR 80.9m) and operating profit to EUR 2.8m (Evli EUR 3.0m).
Profitability was still slightly affected by the project that had a significant
negative impact on H1/19 profitability. Consti’s BoD proposes a dividend of EUR
0.16 per share (Evli 0.17). The order backlog continued to decline and was down
17.4% y/y at EUR 186m.

Expecting sales declines but clear profitability improvement

Following the continued weak order backlog we have lowered our coming year sales
estimates by some 10% and now expect a 9.8% net sales decline in 2020. We expect
Consti to be able to absorb the volume declines without major margin pressure
due to the new organization and related cost savings. We have slightly raised
our 2020 EBIT estimate, now expecting an EBIT of EUR 10.7m. The Q4 results in
our view provided continued support for the sustainability of Consti’s
successful profitability turnaround.

HOLD with a target price of EUR 8.0 (7.0)

On our slightly raised earnings estimates and increased confidence in the
profitability turnaround, we adjust our TP to EUR 8.0 (7.0), valuing Consti at
~7.5x 2020E EV/EBIT, with the Hotel St. George arbitration proceeding still
warranting the clear discount to peers. We retain our HOLD-rating.



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TOKMANNI - TOWARDS EUR 1BN OF SALES

10.02.2020 - 07.50 | Company update

Tokmanni’s Q4 result was in line with expectations and the company executed well
its strategy to improve profitability. We expect further improvement in
profitability, driven by gross margin increase. We expect Tokmanni to reach EUR
1bn (6.2% y/y) of sales in 20E and adj. EBIT increase of ~17% y/y (EUR 82m). We
keep our rating “BUY” with TP of EUR 16 intact.

Read more

Good performance continued

Tokmanni’s Q4 result was broadly in line with expectations with revenue of EUR
284.8 (+6.1% y/y) vs. our EUR 287.7m (cons. 287.0m). Revenue was driven by
successful campaigns whereas the timing of tax refunds, late winter in certain
areas and the postal strike weighed down sales. Gross margin increased to 35.2%
(Q4’18:34.4%) vs. our 35.5%, reflecting the increase in direct import (28.6% vs
26.4% of total sales in Q4’18). Costs were well controlled and the decreased
relative share of operating expenses (18.9% vs. 19.8% in Q4’18) impacted
positively on adj. EBIT, which improved by ~26.5% y/y to EUR 32.0m vs. our EUR
32.7m (cons. 31.8m). Proposed ’19 dividend is EUR 0.62 (EUR 0.62/0.60
Evli/cons).

Expecting profitability to further improve and sales of EUR 1bn

Tokmanni successfully executed its strategy to improve profitability in ’19 as
adj. EBIT margin rose from 6.0% (2018) to 7.5%. In our view, there is still
potential for further profitability improvement, especially through gross margin
improvement. The company targets to increase its adj. EBIT margin gradually to
~9% and indicated that gross margin improvement potential is some 0.5-1.5% while
the operating expenses improvement potential is ~0.5-1.0%. We expect gross
margin (34.4% in ’19) to improve to 34.8% in ‘20E and to 35.1% in ‘21E, boosted
by increased share of direct import (and own products). We expect the relative
share of operating expenses to decrease by 30-40bps in ‘20E-21E, driven by more
efficient supply chain. Tokmanni targets to reach revenue of EUR 1bn (timeline
not specified) which we expect to be reached during 20E, as increased customer
flows and new store openings are boosting revenue growth. We expect LFL sales
growth of 2.0% and 1.7% in 20E-21E.

“BUY” with TP of EUR 16 intact

Tokmanni expects good revenue growth in ‘20E and slight growth in LFL sales. The
adj. EBIT margin is expected to increase from the previous year. We have
slightly increased our estimates and expect 20E sales of EUR 1bn (6.2% y/y) and
adj. EBIT of EUR 82.1 (~17% y/y), resulting in adj. EBIT margin of 8.2%. On our
estimates, Tokmanni trades at 20E-21E EV/EBIT multiple of 14.6x and 13.7x which
is on par with its Nordic non-grocery peers and 25-27% discount compared to the
international peer group. We keep our rating “BUY” with TP of EUR 16.

Open report


FINNAIR - EARNINGS ABOVE EXPECTATIONS

07.02.2020 - 09.35 | Earnings Flash

Finnair’s Q4’19 adj. EBIT was EUR 31.2m vs. our expectation of EUR 8.2m and
consensus of EUR 9.0m. Revenue was EUR 775m vs. our expectation of EUR 740m and
consensus of EUR 744m.

Read more

• Q4 revenue was EUR 774.9m vs. EUR 740m/744m Evli/cons.

• ASK increased by 10.6% in Q4. RASK increased by 2.5% y/y.

• Q4 adj. EBIT was EUR 31.2m vs. EUR 8.2m/9.0m Evli/cons. Q4 comparable EBITDA
was EUR 120.7m vs. EUR 89.7m our view.

• Absolute costs in Q4: Fuel costs were EUR 171m vs. EUR 171m our view. Staff
costs were EUR 136m vs. EUR 133m our view. All other OPEX+D&A combined were EUR
451m vs. EUR 447m our view.

• Unit costs: CASK was 6.42 eurocents vs. 6.31 eurocents our view.

• Q4 EPS was EUR 0.17 vs. -0.14/-0.12 Evli/cons.

• 2019 dividend: EUR 0.20 vs. 0.11/0.10 Evli/cons.

• Finnair expects capacity increase of ~4% in 2020 but due to the coronavirus
the company does not provide a full year revenue estimate.



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TOKMANNI - Q4 RESULT IN LINE WITH EXPECTATIONS

07.02.2020 - 09.00 | Earnings Flash

Tokmanni’s Q4 revenue increased by 6.1% and was EUR 284.8m vs. EUR 287.7m/287.0m
Evli/consensus. LFL growth was 3.1% vs. 3.7% our expectation. Tokmanni’s adj.
EBIT was EUR 32.0m vs. EUR 32.7m/31.8m Evli/cons. Gross margin was 35.2% vs.
35.5%/35.2% Evli/cons.

Read more

• Q4 revenue grew by 6.1% and was EUR 284.8m vs. EUR 287.7m/287.0m
Evli/consensus. Revenue was boosted by successful campaigns but at the same time
the change in the timing of tax refunds, delayed winter season and the postal
strike slowed down year-end sales.

• Q4 adj. gross profit was EUR 100.1m (35.2% margin) vs. EUR 102.1.m (35.5 %)
Evli expectation.

• Q4 adj. EBITDA was EUR 47.6m vs EUR 47.7m/46.3m Evli/consensus

• Q4 adj. EBIT was EUR 32.0 (11.2% margin) vs. EUR 32.7m (11.4%) our expectation
and EUR 31.8m (11.1%) consensus.

• Q4 eps was EUR 0.39 vs EUR 0.41/0.39 Evli/consensus

• 2019 dividend: EUR 0.62 vs. EUR 0.62/0.60 Evli/cons.

• Tokmanni expects good revenue growth for 2020, based on the revenue from the
new stores acquired and opened in 2019 and new stores to be opened in 2020, as
well as on slight growth in like-for-like revenue. Group profitability
(comparable EBIT margin) is expected to improve on the previous year.



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CONSTI - QUITE IN LINE WITH OUR EXPECTATIONS

07.02.2020 - 08.45 | Earnings Flash

Consti's net sales in Q4 amounted to EUR 78.3m, in line with our estimates and
below consensus (EUR 80.9m/86.0m Evli/cons.). EBIT amounted to EUR 2.8m,
slightly below our and consensus estimates (EUR 3.0m/3.0m Evli/cons.). Dividend
proposal: Consti proposes a dividend of EUR 0.16 per share (EUR 0.17/0.17
Evli/Cons.). Guidance: the operating result for 2020 will improve compared to
2019.

Read more

 * Net sales in Q4 were EUR 78.3m (EUR 96.8m in Q4/18), in line with our
   estimates and below consensus estimates (EUR 80.9m/86.0m Evli/Cons.). Growth
   in Q4 amounted to -19.2 % y/y.
 * Operating profit in Q4 amounted to EUR 2.8m (EUR -2.2m in Q4/18), slightly
   below our estimates and consensus estimates (EUR 3.0m/3.0m Evli/cons.), at a
   margin of 3.6 %.
 * EPS in Q4 amounted to EUR 0.25 (EUR -0.25 in Q4/18), slightly below our
   estimates and consensus estimates (EUR 0.26/0.26 Evli/cons.).
 * The free cash flow in Q4 was EUR 5.1m (Q4/18: 1.9m) and EUR 4.0m in 2019
   (2018: EUR -7.1m)
 * The order backlog in Q4 was EUR 185.8m (EUR 225.1m in Q4/18), down by -17.5
   %. Q4/19 order intake amounted to EUR 46.8m.
 * Dividend proposal: Consti proposes a dividend of EUR 0.16 per share (EUR
   0.17/0.17 Evli/Cons.).
 * Guidance: the operating result for 2020 will improve compared to 2019.
 * Consti updated its financial targets. Consti now expects revenue growth at
   above the market pace (previously: average growth exceeding 10% p.a.), while
   other targets remain unchanged.



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SRV - SHORT-TERM LOSSES FOR LONG-TERM GAINS

07.02.2020 - 08.15 | Company update

SRV’s Q4 results were on paper rather catastrophic due to significant impairment
charges relating mainly to the REDI shopping centre, with the Q4 operative
operating profit at EUR -87.2m (Evli EUR 2.3m). SRV announced a series of
measures to strengthen its financial position, that on a short-term perspective
appear unfavourable, but will benefit SRV in the coming years. We retain our
HOLD-rating with a target price of EUR 1.30.

Read more

Earnings clearly in the red due to impairment charges

SRV’s Q4 revenue amounted to EUR 403.8m (Evli 370.2m) and operative operating
profit to EUR -87.2m (Evli 2.3m). Q4 included impairment charges of EUR 92.9m,
relating mainly to the REDI shopping centre, as SRV has agreed to divest its
ownership. Although the Q4 results on paper were rather catastrophic,
construction margins (excluding one-off charges) were in fact clearly better
than we had expected, supported at least partly by the higher than expected
revenue.

Taking measures to improve financial situation

SRV announced a series of measures to strengthen its financial position, of
which the in our view in the near-term most important include the divestment of
the ownership in the REDI shopping centre and a larger part of the Tampere Deck
and Arena project, which should have a near-term positive cash flow impact of
some EUR 45m. The measures do not appear favourable in the short-term but are in
our view a positive sign as SRV is under CEO Saku Sipola clearly looking to
create a more sustainable financial situation and improve operational
performance.

HOLD with a target price of EUR 1.3

Our SOTP values SRV at EUR 1.9 per share. The valuation is still highly
dependent on improvement in the construction business profitability, which we
have yet to see significant proof of. The financial situation is still somewhat
challenging even with the measures announced and as such the investment risks
remain elevated. We retain our HOLD-rating and target price of EUR 1.3



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PIHLAJALINNA - PROFITABILITY IN FOCUS

07.02.2020 - 08.15 | Preview

Pihlajalinna reports its Q4 result on 14th of Feb. We expect Q4 sales of EUR
133.6m (5.2% y/y) and adj. EBIT of EUR 7.8m, resulting in adj. EBIT margin of
5.8%. We have kept our estimates intact ahead of Q4 and retain our rating “HOLD”
with TP of EUR 16.0.

Read more

Expecting further profitability improvements in Q4

Pihlajalinna implemented its efficiency improvement program last summer,
targeting annual cost savings of EUR 17m and indicated that already some EUR 5m
savings could be seen in H2’19. In Q3, we saw improvement in profitability as
adj. EBIT rose by ~60% y/y. Expansion particularly into regional capitals
continued in ’19 as multiple new clinics were opened, boosting revenue growth.
We expect Q4 revenue growth of 5.2% y/y (133.6m), driven by new clinics and adj.
EBIT of EUR 7.8m (~13% y/y), resulting in adj. EBIT margin of 5.8%.

Increased ownership in municipal joint-stock companies

In late Q4, Pihlajalinna increased its ownership in its municipal joint-stock
companies Kuusiolinna Terveys and Mäntänvuoren Terveys. After the transactions,
Pihlajalinna’s ownership in Kuusiolinna Terveys is 89% (51%) and in Mäntänvuoren
Terveys 91% (81%). Pihlajalinna pays EUR 16.3m for the shares of Kuusiolinna
Terveys and EUR 2m for the shares of Mäntänvuoren Terveys. The transactions have
no impact on our revenue or profitability estimates. In our view, the increase
in ownership is positive as the joint-stock companies represent a significant
part of Pihlajalinna’s revenue and profit (the combined revenue of Kuusiolinna
Terveys and Mäntänvuoren Terveys represented some 29% of total ’18 revenue) and
due to the transactions, the share of non-controlling interest decreases,
increasing earnings attributable to the owners of the parent company. We expect
‘20E revenue growth of 3.3% (536m), driven by new clinic openings and adj. EBIT
improvement of ~53% (EUR 35.1m). Mehiläinen’s cash tender offer of
Pihlajalinna’s shares is currently ongoing and being reviewed in FCCA.

“HOLD” with TP of EUR 16 intact

With our estimates intact, we expect 19E revenue of EUR 518.5m (6.3% y/y) and
adj. EBIT of 23.0 (~60% y/y), resulting in adj. EBIT margin of 4.4%. We expect a
dividend of EUR 0.15 (cons. EUR 0.14) for ’19. Our share price is in line with
the tender offer price of EUR 16.0. We keep our rating “HOLD” with TP of EUR 16.



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SRV - REDI AMORTIZATION DRIVEN MISS

06.02.2020 - 09.00 | Earnings Flash

SRV's net sales in Q4 amounted to EUR 403.8m, above our estimates and above
consensus estimates (EUR 370.2m/381.0m Evli/cons.). EBIT amounted to EUR -86.8m,
below our and consensus estimates (EUR 2.3m/0.2m Evli/cons.). Q4 was affected by
significant amortization charges relating mainly to the REDI shopping centre.

Read more

 * Revenue in Q4 was EUR 403.8m (EUR 299.7m in Q4/18), above our estimates and
   consensus estimates (EUR 370.2m/381.0m Evli/Cons.). Growth in Q4 amounted to
   34.7 % y/y.
 * Operating profit in Q4 amounted to EUR -86.8m (EUR 0.1m in Q4/18), below our
   estimates and consensus estimates (EUR 2.3m/0.2m Evli/cons.). SRV recorded
   amortization charges totaling EUR 92.9m, relating mainly to the REDI shopping
   centre sale.
 * Construction: Revenue in Q4 was EUR 403.1m vs. EUR 368.7m Evli. Operating
   profit in Q4 amounted to EUR 3.6m vs. EUR 8.8m Evli.
 * Investments: Revenue in Q4 was EUR 1.7m vs. EUR 1.5m Evli. Operating profit
   in Q4 amounted to EUR -87.5m vs. EUR -5.0m Evli.
 * Other operations and elim.: Revenue in Q4 was EUR -0.9m vs. EUR 0.0m Evli.
   Operating profit in Q4 amounted to EUR -2.9m vs. EUR -1.5m Evli.
 * SRV expects revenue in 2020 to decline compared with 2019 and the operative
   operating profit to be positive and improve compared with 2019.
 * SRV proposes that no dividend will be paid for 2019 (EUR 0.0 Evli/Cons.).
 * SRV further informed of a sale of its ownership in the REDI shopping centre
   and is decreasing its ownership in the Tampere Deck and Arena project along
   with a series of financing decisions.



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DETECTION TECHNOLOGY - CORONAVIRUS COULD POSE NEAR TERM THREAT TO OUR ESTIMATES

06.02.2020 - 08.45 | Preview

Detection Technology will report Q4 earnings next Monday, February 10th. As
majority of DT’s production and personnel is located in China, with Asia
representing some 2/3 of DT’s total net sales, the effects of the coronavirus
will be a key focus. Despite possible headwinds related to coronavirus, we
remain positive to the investment case. Our rating and target price of EUR 24
remain intact ahead of Q4.

Read more

Q4 wraps up a year of decent growth

The security imaging market has been experiencing strong demand due to
increasing CT investments related to new EU and US airport standards, while
medical imaging market is going through a temporary slowdown. For Q4’19, we
estimate SBU growing 23% and MBU declining 14% y/y, with total Q4 net sales
growing 8% y/y to 27.7 MEUR (27.4 MEUR cons). Our Q4 EBIT estimate is 5.1 MEUR
(4.7 MEUR cons), which is +15% compared to slightly low comparison figures of
4.4 MEUR in Q4’18. On a whole, we expect FY’19E sales growth of 12% (FY’18 5.5%)
and flat EBIT growth due to increasing R&D investments and lower MBU sales and
share in mix. Our DPS estimate is 0.38 (0.39 cons.), which is on par with last
year’s dividend due to flat net profit growth in 2019.

Growth story to continue despite coronavirus posing a near term threat

DT usually doesn’t give full year guidance due to low visibility into customer
demand. We look forward to hearing about the latest status of the medical
imaging market and the effects of the coronavirus. Most of DT’s production and
~80% of personnel are located in China, with Asia representing some 2/3 of DT’s
total sales. Our FY’20E sales growth estimate is +15% based on continued good
growth, especially in China, and volume ramp-up of new Aurora and X-Panel CMOS
products. Despite continued R&D spending, we expect EBIT improvement 2020E due
to increase in sales growth and better GM’s due to mix and new products. We note
however that coronavirus poses a clear near-term threat to our estimates.

Rating and TP of 24 euros maintained ahead of Q4

Despite the short visibility and possible headwinds related to coronavirus or
trade politics, we see longer term investment case intact due to strong market
drivers, especially in China, as well as DT’s compelling strategy and execution
capabilities. Our estimates, as well as our rating and target price of 24 euros
remain unchanged ahead of the Q4 report.

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ETTEPLAN - EXPECT GOOD Q4 DESPITE MINOR BUMPS

06.02.2020 - 07.45 | Preview

Etteplan will report Q4 results on February 11th. We expect Etteplan to finish
the year on a positive note, although the industrial strike in December is
expected to have had a minor negative impact. We expect revenue to grow 14.7% in
Q4 and an EBITA-margin of 9.9%, near the comparison period figure. Guidance
should reflect growth in revenue and operating profit. We expect a dividend
proposal of EUR 0.36 per share. Following peer multiple appreciation, we raise
our TP to EUR 10.6 (9.6) and retain our HOLD-rating.

Read more

Industrial strike expected to have a minor impact on figures

We expect Q4 revenue of EUR 72.1m, with growth of 14.7% y/y, driven by
acquisitions made during mid-2019. We expect an EBITA of EUR 7.1m, at a margin
of 9.9%. Some uncertainty in Q4 figures is brought by the industrial strike in
Finland in December, which we expect to have had a minor negative impact on Q4
figures. Etteplan made two smaller acquisitions during the quarter within
technical documentation, with some 50 employees combined, which will have a
minor impact on growth in 2020. We expect a dividend proposal of EUR 0.36 per
share.

Continued revenue and earnings growth expected in 2020

The outlook for 2020 remains somewhat hazy following demand uncertainties and a
slightly slower organic growth during 2019. We expect Etteplans guidance for
2020 to at least reflect clear growth in revenue and EBIT compared to 2019,
supported by the acquisitions made during 2019. A guidance reflecting
significant growth this early in 2020 would be a positive sign. We expect a
sales growth of around 10% and growth in EBIT of 8% in 2020.

HOLD with a target price of EUR 10.6 (9.6)

Valuation multiples for both peers and Etteplan have increased post-Q3 and
current valuation does not appear particularly attractive, although Etteplan
still remains on good track. We raise our target price with the increased peer
multiples and value Etteplan at 15x 2019E P/E, for a target price of EUR 10.6
(9.6) and retain our HOLD-rating.



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VERKKOKAUPPA.COM - CRITICAL Q4 AHEAD

05.02.2020 - 08.40 | Preview

Verkkokauppa.com reports it’s Q4’19 earnings on 14th of Feb. We expect the
competition has remained tight and price driven. We expect Q4E sales of EUR
168.9m (8.4% y/y) and EBIT of EUR 6.0m. We keep our rating “HOLD” with TP of EUR
3.3 intact ahead of Q4.

Read more

Black Friday and Christmas sales boosting Q4 growth

During ‘19, Verkkokauppa.com has faced ups and downs in the highly competitive
and price driven consumer electronics market. After a relatively weak H1’19, the
company was able to show a positive turn in earnings development in Q3, despite
of weaker sales growth. For Verkkokauppa.com, Q4 is critical, as most of its
sales and profit are generated during this quarter, driven by Christmas sales
and Black Friday. We expect only limited impacts resulting from the postal
strike but the changed timing of tax refunds might have a negative impact on
December sales compared to last year. We expect 8.4% y/y increase in Q4 sales
(EUR 168.9) and EBIT to be on par with the previous year at EUR 6.0m (Q4’18:
5.9m).

No ease of competition ahead

We don’t expect the consumer electronics market in ‘20E to grow much from last
year thus the management of sales mix plays an important role of supporting
further sales and profit development. We expect the growth investments (e.g.
increased marketing) to bear fruit in 2020E, resulting in new customers. We also
hope to get more color on the new plans regarding B2B sales with the Q4 result.
Due to the price driven competition and growth investments, we don’t expect
profitability (EBIT%) to improve from last year, although the company’s cost
base is scalable. We expect sales in ‘20E to increase by 7% y/y (EUR 549.1m) and
EBIT increase of ~10% y/y resulting in EBIT margin of 2.6%..

“HOLD” with TP of EUR 3.3 intact

We have kept our estimates intact ahead of Q4. Verkkokauppa.com guides ‘19E
sales of EUR 500-525m and EBIT of EUR 11-15m. Our estimates are in the mid-point
of the guidance with ‘19E sales of EUR 513m (7.4% y/y) and EBIT of EUR 12.8m
(FY18:13.3m). We continue to expect a growing dividend of EUR 0.21 (cons. EUR
0.21) vs. EUR 0.20 for ’18. We keep our rating “HOLD” with TP of EUR 3.3 intact
ahead of Q4.



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TALENOM - SIGHTS REMAIN SET ON GROWTH

04.02.2020 - 09.00 | Company update

Talenom’s Q4 results fell below our expectations, with EBIT at EUR 1.5m (Evli
2.6m), driven by higher than anticipated D&A and the impact of the introduction
of the Incomes Register. The impact of growth investments on profitability in
2020 appears somewhat larger than previously anticipated and we have lowered our
2020-2021E EBIT estimates by ~10%. We raise our TP to EUR 41 (37.5) but
downgrade to HOLD.

Read more

EBIT in Q4 clearly below expectations

Talenom’s Q4 results were below our expectations. Revenue grew 19.8% to EUR
14.9m (Evli 15.1m), while EBIT amounted to EUR 1.5m (Evli 2.6m). Compared with
our estimates the difference was largely due to higher than anticipated D&A and
introduction of the Incomes Register. D&A expenses increased as depreciation of
the latest implementations of the bookkeeping line began in Q4. One-off items
were limited although year-end reviews to our understanding also affected the
elevated expenses.

Growth investments pressuring margin improvements

Talenom’s expects relative growth in net sales and relative profitability in
2020 to be in line with 2019. We see that margin improvement potential remains
possible in 2020 through enhanced operational efficiency in acquired businesses
and from the bookkeeping line improvements. More importantly, Talenom is in our
view seeking to maintain momentum on growth and targeting geographical expansion
and growth in smaller customer segments domestically as well as growth pick-up
in Sweden. Talenom also emphasized focus on customer retention and satisfaction.
With growth investments expected to increase we now only expect a 0.4pp
EBIT-margin improvement and sales growth of 18.9% in 2020.

HOLD (BUY) with a target price of EUR 41 (37.5)

Talenom is in our view continuing on a healthy long-term track. We have lowered
our 2020-2021E EBIT estimates by around 10%. With the outlook still remaining
solid we raise our target price to EUR 41 (37.5), valuing Talenom at 30x 2020E
P/E. With the share price having picked up we downgrade to HOLD (BUY).



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MARIMEKKO - UPSWING EXPECTED TO CONTINUE IN Q4

04.02.2020 - 08.55 | Preview

Marimekko reports its Q4’19 result on 13th of Feb. We expect Q4 sales of EUR
34.6m (16.5% y/y) and adj. EBIT of EUR 2.9m. We have kept our estimates largely
intact and expect ’19 dividend of EUR 1.14 per share. We keep our rating “HOLD”
with TP of EUR 39.0 intact ahead of Q4.

Read more

Christmas sales expected to boost revenue growth

Marimekko’s upswing has continued in ’19 driven by positive sales development in
Finland and increased licensing income from APAC region, resulting in two
guidance upgrades in July and October. We expect Q4’19E sales to grow by 16.5%
y/y (EUR 34.6m), driven by Christmas sales and representing some 28% of total
year-end sales while we expect adj. EBIT to nearly double from Q4’18 to EUR 2.9m
(Q4’18: 1.6m) due to improved gross profit and lower relative share of fixed
costs. We expect good sales performance to continue in Finland (+15% y/y) but
also APAC region (+27% y/y).

A sequel of the UNIQLO collaboration

Marimekko gave its first positive profit warning for ‘19E ahead of Q2 due to
increased licensing income from APAC region. Licensing income of EUR 1.2m was
booked in Q3 and shortly after the result it was revealed that the collaboration
was with UNIQLO, a Japanese global apparel retailer, with who Marimekko
partnered also in 2018. The new fall/winter collection was launched in late
November ‘19 in all UNIQLO markets except in Japan. We thus see more far
reaching positive impacts resulting from the partnership as the collaboration
rises Marimekko’s brand recognition globally.

“HOLD” with TP of EUR 39.0 intact

Based on the second guidance upgrade given in October, sales are expected to
increase from ‘18 while comparable operating profit is expected be higher than
in ’18, amounting approx. EUR 17m. We have made only small adjustments to our
estimates and expect 2019E sales of EUR 125.3m (+12% y/y) while our adj. EBIT
expectation is in line with the guided EUR 17m (FY18: 12.2m). We expect
Marimekko to propose a dividend of EUR 1.14m per share in ‘19. In ‘20E, we
expect ~8% sales growth and further EBIT improvement (~21% y/y), driven by
positive gross margin development. We keep our rating “HOLD” with TP of EUR 39.0
intact ahead of Q4.



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TALENOM - MISS ON EBIT

03.02.2020 - 13.50 | Earnings Flash

Talenom’s Q4 results were below our expectations due to a miss on profitability.
Net sales amounted to EUR 14.9m (Evli/cons. EUR 15.1m) while the operating
profit amounted to EUR 1.5m (Evli/cons. EUR 2.6/2.4m). Talenom reiterated its
guidance for 2020, expecting relative growth and relative profitability to be in
line with 2019. Talenom proposes a dividend of EUR 0.75 (Evli/cons. 0.74/0.71).

Read more

 * Talenom’s net sales in Q4 amounted to EUR 14.9m (EUR 12.4m in Q4/18), in line
   with our and consensus estimates (Evli/cons. EUR 15.1m). Revenue growth in Q4
   was 19.8% y/y.
 * Introduction of the Incomes Register had a negative impact of EUR 0.33m on
   net sales and operating profit in Q4/19.
 * The operating profit in Q4 was EUR 1.5m (EUR 1.5m in Q4/18), below our and
   consensus estimates (Evli/cons. EUR 2.6/2.4m), at a margin of 9.8%. The
   operating profit miss was mainly due to higher than estimated depreciation
   and amortization.
 * Guidance reiterated: the relative growth in net sales and relative
   profitability in 2020 expected to be in line with 2019.
 * Net investments during in 2019 EUR 15.4m compared with 9.5m in 2018.
 * Talenom proposes a dividend of EUR 0.75 per share (Evli/cons. 0.74/0.71).



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TOKMANNI - INCREASING TARGET PRICE AHEAD OF Q4

31.01.2020 - 09.00 | Preview

Tokmanni reports its Q4 earnings on next week’s Friday, 7th of February. We
expect Q4 revenue to grow by 7.2% to EUR 288m and EBIT of EUR 32.7m. We keep our
rating “BUY” with updated TP of EUR 16 (13.5) ahead of Q4.

Read more

New store openings to support sales

Q4 is normally the strongest quarter in terms of both revenue and profit for
Tokmanni. According to PTY, revenue of department stores & hypermarkets grew by
some 6% in Oct-Nov but declined by 1.5% in December. Decline in sales was
exceptionally high in clothing (-11.6%) but also in home & leisure (-4.8%),
partly due to mild winter. We expect Tokmanni’s Q4’19E revenue to grow by 7.2%
to EUR 288m (Q4’18 268m) driven by new store openings and increased customer
flows. Two new stores were opened during Q4 with combined selling space of
~4500m2. We expect Q4’19E adj. EBIT of EUR 32.7m (Q4’18: 25.6m) resulting in
EBIT margin of 11.4%.

Expecting further profitability improvements in 2020E

So far Tokmanni’s ‘19 has been strong. In Jan-Sept’19 LFL sales grew +4.9% and
at the same time gross profit developed favorably as gross margin was 34.1% vs.
33.7% in Jan-Sept’18. The actions taken to improve profitability seem to work
although we hope to get more color on the progress made in improving the
efficiency of Tokmanni’s supply chain as the success of this is one of the key
drivers for further profitability improvement. In 2020E, we expect EBIT margin
to increase to 8.2%, stemming mainly from gross margin improvement and 4.4% y/y
revenue growth (EUR 989m) driven by store network expansion. The company’s
long-term target is to reach adj. EBIT margin of ~9%.

“BUY” with TP of EUR 16 (13.5)

We have kept our estimates intact ahead of Q4 and expect FY19E revenue of EUR
947m (FY18: 870m) and adj. EBIT of EUR 71m (FY18: 52m). We expect Tokmanni to
propose a dividend of EUR 0.62 per share in ’19 (cons. EUR 0.60). We keep our
rating “BUY” with updated TP of EUR 16 (13.5) due to the ~20-30% increase in
Nordic non-grocery peer multiples. On our estimates, with the new target price
of EUR 16, Tokmanni trades at ’20E-21E EV/EBIT multiple of 16.1x and 14.6x which
still translates into ~7-10% discount compared to its international peers.



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CAPMAN - ROBUST FUNDRAISING PIPELINE

31.01.2020 - 08.45 | Company update

CapMan posted strong Q4 results and the operating profit adjusted for the EUR
4.2m goodwill amortization related to CapMan’s operations in Russia improved
clearly to EUR 7.7m, aided by significant carried interest. On-going fundraising
projects, with the NRE III and NC III funds as new projects, provide major AUM
growth potential. The Q4 report overall provided clear support for continued
solid earnings growth in coming years. We raise our target price to EUR 2.5
(2.1) ex-div and retain our HOLD-rating.

Read more

Carried interest boosted Q4 profitability

CapMan’s Q4 results beat expectations. Revenue grew to EUR 16.6m, aided by EUR
5.4m carried interest mainly from the Hotels fund. The operating profit amounted
to EUR 3.4m but was affected by a non-cash amortization of goodwill relating to
CapMan’s business in Russia and the adj. operating profit was at EUR 7.7m. A
clear positive sign was the growth in management fees during Q4, up to EUR 7.3m.
CapMan proposed a dividend of EUR 0.13 per share.

Major AUM growth potential in coming years

CapMan has begun the fundraising for the NRE III and NC III funds, which should
add new AUM north of EUR 500m upon close. Together with other on-going
fundraising projects we see major AUM growth potential in the coming years. We
have post Q4 raised our estimates, with our 2020-2021E adj. operating profit
estimates up some 20%. We expect a 140% increase in the Management Company
business adj. operating profit (excl. carry) in 2020 driven by fee growth and
limited cost increases.

HOLD with an ex-div TP of EUR 2.5 (2.1)

CapMan’s share price has seen larger increases and on peer multiples the
expected major profitability improvement in 2020 appears to have been largely
accounted for. On our revised estimates we raise our target price to EUR 2.5
(2.1) ex-div and retain our HOLD-rating.



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SUOMINEN - VOLUMES HAVEN’T STABILIZED YET

30.01.2020 - 09.20 | Company update

Suominen’s Q4 results fell short of our expectations as volume pressure
continued. We have cut our estimates, our updated TP is EUR 2.25 (2.50), rating
still HOLD.

Read more

Suominen’s EUR 94.5m Q4 revenue missed our estimate

Suominen’s Q4 revenue declined by 14% y/y and 12% short of our EUR 107.1m
estimate. The decline was attributable to volume losses but also to lower prices
(due to lower raw materials prices). Volumes were lost in the Americas, with
revenue down by 6% to EUR 62m, but the drop was sharp in Europe as Q4 sales slid
by 26% y/y to EUR 32m. Suominen’s customer base is concentrated as the ten
largest accounts make 65% of sales. Suominen lost volumes last year as the
nonwovens price hikes became effective. Suominen says certain customer accounts
might still be negatively affected. Suominen reported an 8.3% gross margin in
Q4, in line with our estimates. The gross profit was thus EUR 7.8m while we
expected EUR 9.0m. SGA, R&D and other items were as expected, and therefore the
EUR 1.1m gap in EBIT relative to our estimate (EUR 1.4m vs EUR 2.5m) was due to
the low sales figure and resulting weak absolute gross profit.

Short-term growth uncertain, but EBIT should still improve

Although the Q4 sales shortfall was a disappointment relative to our
expectations, the softness didn’t fundamentally alter our view towards
Suominen’s wider picture as a high level of uncertainty continues to fog the
outlook. Suominen doesn’t guide sales outlook for FY ’20 but expects EBIT to
further improve from the FY ’19 EUR 8.1m figure. We have cut our estimates for
this year. We previously estimated Suominen to achieve 5% top line growth in
’20. We now expect 3% growth. Our expectation for FY ’20 EBIT is now EUR 12.0m
(previously EUR 16.1m). Nonwovens demand is expected to grow at a CAGR of more
than 4% in the markets where Suominen is present. Suominen targets to grow in
excess of this rate in the long-term, however the oversupply problem seems to
persist at least in the short-term.

Long-term targets are hard to price in given uncertainty

In our view Suominen’s valuation is neutral considering profitability has just
bottomed out. However, it’s hard to say when profitability reaches adequate
levels; we retain our cautious stance. Our TP is now EUR 2.25 (2.50), rating
HOLD.



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CAPMAN - CARRY OFFSET BY GOODWILL AMORTIZATION

30.01.2020 - 09.00 | Earnings Flash

CapMan's net sales in Q4 amounted to EUR 16.6m, above our estimates and above
consensus estimates (EUR 12.5m/11.4m Evli/cons.) following clearly higher
carried interest. EBIT amounted to EUR 3.4m, below our and consensus estimates
(EUR 4.7m/5.0m Evli/cons.). Adj. EBIT was EUR 7.7m. CapMan proposes a dividend
of EUR 0.13 per share (EUR 0.13/0.13 Evli/Cons.).

Read more

 * Revenue in Q4 was EUR 16.6m (EUR 8.9m in Q4/18), above our estimates and
   consensus estimates (EUR 12.5m/11.4m Evli/Cons.). CapMan recorded EUR 5.4m in
   carried interest, (Evli EUR 2.0m).
 * Operating profit in Q4 amounted to EUR 3.4m (EUR -2.9m in Q4/18), below our
   estimates and consensus estimates (EUR 4.7m/5.0m Evli/cons.). The operating
   profit includes a EUR 4.2m goodwill amortization relating to CapMan’s
   business in Russia and the adjusted operating profit amounted to EUR 7.7m
 * EPS in Q4 amounted to EUR 0.02 (EUR -0.02 in Q4/18), in line with our and
   consensus estimates (EUR 0.02/0.03 Evli/cons.).
 * Management Company business: Revenue in Q4 was EUR 13.0m vs. EUR 8.7m Evli.
   Operating profit in Q4 amounted to EUR 2.4m vs. EUR 2.9m Evli. Adj. operating
   profit was EUR 6.6m
 * Investment business: Operating profit in Q4 amounted to EUR 2.1m vs. EUR 1.6m
   Evli.
 * Services business: Revenue in Q4 was EUR 3.2m vs. EUR 3.4m Evli. Operating
   profit in Q4 amounted to EUR 0.9m vs. EUR 1.2m Evli.
 * Dividend proposal: CapMan proposes a dividend of EUR 0.13 per share (EUR
   0.13/0.13 Evli/Cons.).
 * Capital under management by the end of Q4 was EUR 3.2bn (Q4/18: EUR 3.0bn).



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SUOMINEN - MISS DUE TO LOW SALES

29.01.2020 - 12.40 | Earnings Flash

Suominen’s top line missed our estimate as Q4 sales declined by 14% y/y due to
lower volumes as well as prices. Suominen expects operating profit to improve
this year compared to FY ’19 (EUR 8.1m).

Read more

 * Q4 revenue amounted to EUR 94.5m, compared to our EUR 107.1m estimate. The
   miss was due to higher-than-expected volume losses. Declining raw materials
   prices also had a negative effect.
 * Gross profit was EUR 7.8m vs our EUR 9.0m expectation. The resulting 8.3%
   gross margin was close to our 8.4% estimate.
 * Q4 EBIT was recorded at EUR 1.4m, whereas we expected EUR 2.5m. SG&A and R&D
   were basically as expected, so the earnings miss was attributable to low
   gross profit, which was due to weak top line.
 * The BoD’s dividend proposal for FY ’19 is EUR 0.05 per share; our expectation
   was EUR 0.04 per share.
 * Suominen guides FY ’20 EBIT will improve compared to ’19 (EUR 8.1m). Suominen
   will no longer provide sales guidance on annual level, which in our view is
   understandable given the recent struggles with volumes. Suominen targets
   long-term sales growth above that of the relevant market.



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FINNAIR - STRONG Q4 TRAFFIC SUPPORTS REVENUE GROWTH

29.01.2020 - 09.20 | Preview

Finnair will report its Q4 result on next week’s Friday, 7th of February. The
company’s Q4’19 traffic was in line with our expectations thus we have made only
minor adjustments to our estimates. We expect Q4 revenue of EUR 740m and EBIT of
EUR 8.2m. We keep our rating “HOLD” with TP of EUR 6.5 ahead of Q4.

Read more

Good Q4 traffic data

Finnair’s traffic met the expectations in Q4. Capacity (ASK) grew by 10.6% vs.
our 9.4% expectation, while sold capacity (RPK) grew as much as 13.6% vs. our
9.4% expectation. Thus, passenger load factor (PLF) increased by 2.1 percentage
points to 79.0% in Q4. PLFs grew in all the market areas but especially in
Europe (+3.4pp) and in Finland (+3.4pp). Total passenger number rose by 11 %
y/y. Cargo development continued soft as the global uncertainty in world trade
continued to press the global air freight market, especially in Asia. We expect
Q4 revenue of EUR 740m (Q4’18: 684m) and EBIT of EUR 8.2m (Q4’18: 26.5m).

Slight increase in jet fuel prices

Jet fuel prices slightly increased towards the end of the year. The average
price in USD moved up by 1% and in EUR by 2% on a q/q basis compared to Q3’19.
Yet the average price in Q4’19 was still -7% lower y/y in USD and -4% lower in
EUR.

Coronavirus hampers share price

Finnair’s share price has slumped after the fears around Coronavirus rose. In
order to control the situation, China has restricted traveling and day-to-day
business in some areas, which affects Finnair’s operations in Asia. The impacts
for Finnair’s financial outlook are still unknown thus we have not made changes
to our estimates. We expect to get more color on this with the Q4 result.

“HOLD” with TP of EUR 6.5 intact

We have kept our estimates largely intact ahead of Q4 result. For FY19E we
expect revenue of EUR 3077m (FY18: EUR 2850m) and adj. EBIT of 140m (FY18: EUR
218m), resulting in EBIT margin of 4.6% which is at the lower end of the guided
adj. EBIT margin level of 4.5-6.0%. We expect Finnair to propose a dividend of
EUR 0.11 per share for ’19. We keep our rating “HOLD” with TP of EUR 6.5 intact
ahead of Q4.



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CONSTI - DOWNGRADE TO HOLD

29.01.2020 - 08.45 | Preview

Consti will report Q4 earnings on February 7th. We expect to see the favourable
profitability development trend from Q3 to continue but for revenue to decline
from the strong comparison period. Apart from margin development, the order
intake will be of key interest following order backlog declines during 2019.
Following a near 50% share price increase since our previous update we downgrade
to HOLD (BUY) with a target price of EUR 7.0 (5.8).

Read more

Expect continued positive profitability development trend

Consti’s Q3 saw profitability improve substantially, following a lengthy period
of weaker profitability, affected in particular by a few large renovation
projects. With some older projects still having an impact on Q3, we expect
profitability to improve q/q and estimate a EUR 3.0m operating profit in Q4. We
expect revenue to decline some 16% from the strong comparison period following
the completion of some larger renovation projects and estimate a revenue of EUR
80.9m.

Profitability to improve in 2020, sales growth unlikely

Consti has in recent years typically given a rather vague guidance and not
guided revenue development and we expect a likely guidance to reflect a higher
operating profit in 2020 compared to 2019. Based on the weak H1/19 we expect a
clear improvement in profitability in 2020 and the operating profit margin to
improve from 1.5% in 2019E to 3.3% in 2020E. The sales growth outlook for 2020
remains unfavourable based on the order backlog development. We currently
estimate only a minor decline of 1.7% in awaiting details on Q4 order intake.

HOLD (BUY) with a target price of EUR 7.0 (5.8)

Consti’s share price has increased near 50% since our previous update. We are
prepared to accept part of the increase following concurrent smaller peer
multiple increases and although valuation compared to peers remains attractive,
with the still limited proof of sustainable profitability improvement and the
on-going St. George arbitration proceedings we downgrade to HOLD (BUY) with a
target price of EUR 7.0 (5.8).



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CAPMAN - EXPECTING A GOOD FINISH TO THE YEAR

27.01.2020 - 09.15 | Preview

CapMan will report Q4 results on January 30th. We expect the operating profit to
remain on par with the quarterly average earnings during 2019 and expect and
operating profit of EUR 4.7m. CapMan should record higher carried interest (Evli
est. EUR 2.0m) in Q4, aided by the Hotels I fund, while we expect higher
personnel costs and lower investment returns to offset the positive impact. Our
DPS estimate is at EUR 0.13 (2018: EUR 0.12). We retain our HOLD-rating and TP
of EUR 2.1 intact ahead of the results.

Read more

Q4 operating profit estimate at EUR 4.7m

We expect Q4 revenue of EUR 12.5m (Q4/18: 8.9m) and an operating profit of EUR
4.7m (Q4/18: -2.9m). Pre-Q4 we have made downward adjustments to our estimates
mainly due to increases in personnel expenses relating to expected bonuses and
minor downward adjustments to revenue estimates. We have also lowered our
investment return estimates based on the news flow on exits during Q4. We expect
carried interest to increase clearly q/q (Evli est. EUR 2.0m) due to
continuation of the Hotels fund and thereto related realization of carried
interest.

Expect continued solid earnings growth in 2020

Our estimates imply a y/y improvement of 73% in operating profit during 2019.
CapMan has not given any guidance for 2020 but expects significant growth in
capital under management and we expect continued solid growth in operating
profit of around 40% in 2020 driven by earnings growth across the board. The
continuation of the Hotels I fund during Q4 will have a clear positive impact on
both management fees and operating profit following an expected limited impact
on costs.

HOLD with a target price of EUR 2.1

We expect CapMan to propose a dividend of EUR 0.13 per share, translating into a
dividend yield of 5.6% on previous closing price. We keep our HOLD-rating and
target price of EUR 2.1 intact ahead of the Q4 results.



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SUOMINEN - IMPROVEMENT GRADIENT STILL UNCERTAIN

24.01.2020 - 09.25 | Preview

Suominen reports Q4 results on Wed, Jan 29. Our estimates stand unchanged. We
expect positive FY ’20 guidance given ’19 figures represent a rather soft
comparison base. Our TP is now EUR 2.50 (2.25), rating remains HOLD.

Read more

Expect a stable Q4 result compared to preceding quarters

We note nonwovens demand unchanged since Q3, and thus leave our estimates
intact. We estimate Q4 revenue at EUR 107m i.e. down by few percent y/y due to
volume losses. All the nonwovens’ raw materials prices basically flatlined
during Q4 and so we expect gross margin stable at 8.4%. We also expect other
costs to have remained in control and thus see EBIT at EUR 2.5m (EUR -0.4m a
year ago). We see stabilizing prices and volumes helping Suominen to continued
improvement with FY ‘20e EBIT at EUR 16.1m (compared to ‘19e EUR 9.2m).

FY ’20 guidance should be positive for both sales and EBIT

Although Suominen’s FY ’19 figures will likely translate to an EBIT twice that
of ’18, the company’s profitability is still far off from satisfactory. We thus
expect continued meaningful profitability improvement this year. Suominen
recently published its new strategy and financial targets for 2020-25. The
targets were moderated; Suominen now aims for sales growth above that of the
relevant market. As Suominen’s markets grow ca. 3% p.a. we would expect this to
imply a CAGR of some 3-5%. In order to reach the targeted above 12% EBITDA
margin (which would imply an EBIT margin close to 8%) by ‘25, Suominen not only
needs to achieve improved operational efficiency but also robust sales growth.
We look forward to Suominen commenting on the outlook for the two currently
reported geographies, Europe and Americas, as well as any color on the possible
Asia expansion (about which the company has talked over the years). We would
also like to hear about turning customer relationships stickier since the
nonwovens markets are still well-supplied.

We update our TP but remain HOLD due to uncertainty

Our updated TP is EUR 2.50 (2.25) as peer multiples have gained in recent
months. Our rating is still HOLD. Valuation starts to look attractive longer
term (‘21e EV/EBITDA ~4.5x and EV/EBIT 10x) yet in our view there’s too much
uncertainty. We expect Suominen to declare EUR 0.04 dividend per share for ’19.



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VAISALA - UPGRADES OUTLOOK ON CONTINUED GOOD MOMENTUM

12.12.2019 - 08.08 | Company update

Vaisala upgraded yesterday its 2019 outlook. The upgrade did not come as a
surprise as momentum in both business units have continued strong and as such
our estimates were already taking this into account. We’ve made small upward
adjustments to our estimates. We maintain our HOLD recommendation with new TP of
29.5 (prev. 24.5).

Read more

Continued good momentum in both business areas

Vaisala cited that strong demand in both business areas has continued. In Q3
Vaisala’s orders received YTD was up +34% yoy with bulk of growth being organic,
supported by acquired businesses. Strikes in November and December have been a
significant risk to production and logistics, but Vaisala has been able to
maintain its good delivery capacity also during Q4. The continued strong demand
has had a positive impact on gross margin and project margins have also remained
at a good level. However, there are still uncertainties related to the rest of
the year, like the ongoing strikes in France, and estimating the impact of these
is challenging.

Outlook upgrade not a surprise, estimates slightly upwards

Vaisala now estimates 2019 net sales of 395-405 MEUR and EBIT to be in the range
of 36-42 MEUR. Previous outlook was net sales of 380-400 MEUR with EBIT of 25-35
MEUR including 10-12 MEUR acquisition related amortization and one-off expenses.
As our 2019E estimates for net sales of 398 MEUR were in the upper range of the
previous guidance and our EBIT estimate of 36.4 MEUR was slightly above previous
guidance, the outlook upgrade did not come as a surprise. We have slightly
adjusted our 2019 and onwards estimates upwards reflecting the continued good
momentum. As noted previously, with acquired businesses integrated into
Vaisala’s sales channel and continued good organic momentum in both W&E and IM,
we see targeted 5% sales growth clearly achievable and road to >12% margins
progressing well. The driver for profitability improvement is larger volumes and
continued good growth in industrial business. We estimate IM share of Vaisala’s
EBIT in ’20-21E to grow to 66% (vs. 56-57% in ’17-’18), driving Vaisala’s
~10-12% EBIT growth and EBIT margins of 10.5-11% (12-13% adj. for IAC).

Valuation is stretched, but justified

Vaisala’s share har rallied +105% YTD, being now at an all-time high. On our
raised estimates, Vaisala is trading at PPA amortizations adjusted EV/EBIT
multiples of 23x and 21.6x for ‘19E and ‘20E, a 30-38% premium to our peer group
median despite exhibiting lower profitability profile than our peer group.
However, a high valuation and premium are in our view justified due to the
current stable outlook for W&E, strong ESG profile and growing dividend, and
especially IM’s highly profitable growth with possibility of further add-on
acquisitions. On the back of our raised estimates, we raise our target price to
29.5 euros (prev. 24.5) and maintain our HOLD recommendation.

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ASPO - CMD NOTES; TARGETS SOFTENED

27.11.2019 - 09.15 | Company update

Aspo updated its long-term targets in connection with the CMD yesterday. There
were no actual downgrades to longterm EBIT margin targets, however Aspo
abandoned the target ranges’ upper limits for both ESL and Telko, in addition to
pushing the margin target dates further forward into the future for all
segments. Our updated TP is EUR 8.25 (8.75), while our rating remains HOLD.

Read more

ESL’s 12% EBIT margin target left intact, but pushed back

ESL now aims for EUR 200m revenue and 12% EBIT margin in ‘23. The previous
target was EUR 200m revenue and 12-15% margin in ‘20. A target softening wasn’t
a big surprise considering the recent cargo weakness, largely attributable to
the Nordic steel industry, although in our view the ‘23 target date should leave
ESL with potential for a positive surprise assuming the market challenges are
not seriously prolonged. No big news regarding the fleet’s current situation
were floated. ESL said it is assessing new fleet investments i.e. growth
prospects beyond ‘23. These would be in the form of environmentally friendly
coasters (consistent with the acquisition of AtoB@C). Such an evaluation
reflects ESL’s positive outlook on biofuels volumes. ESL also told it is
considering different types of ownership and financing alternatives for the
potential new smaller vessels. However, no major investments are likely soon.

Telko and Leipurin margin target dates pushed back

While Telko’s volumes have developed well (+10% this year), the focus will be on
improving profitability in the coming years, i.e. the story wasn’t changed.
Telko’s profitability in e.g. Ukraine hasn’t been developing as hoped. Aspo also
said Kauko’s annual revenue will decline to EUR 10m effective Jan 1. Telko now
targets 6% EBIT margin with EUR 300m revenue (excl. Kauko) in ‘23 (previously
EUR 300-350m revenue and 6-7% margin in ‘20). Leipurin still targets EUR 140m
revenue and 5% EBIT margin, however the date was pushed back by a year to ‘23.

Full potential will not materialize for a while

We have updated our estimates following the new targets. We revise our estimates
down especially beyond ‘20, but also see next year EBIT some EUR 2.4m lower than
previously. Our new TP is EUR 8.25 (8.75). Our rating remains HOLD.



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EXEL COMPOSITES - TURNAROUND PROGRESSING WELL

22.11.2019 - 09.20 | Company update

Exel Composites updated its guidance for FY ‘19. The update wasn’t big news as
progress has been good this year. We make small revisions to our profitability
estimates, and our new TP is EUR 6.00 (5.50), rating now HOLD (BUY).

Read more

EBIT has improved considerably this year

Exel Composites updated its FY ’19 guidance. The company had previously guided
improving revenue and adjusted EBIT compared to previous year. The updated
outlook guides increase in revenue (as before) and significant increase in
adjusted EBIT. The positive guidance update didn’t come as a major surprise as
Exel had already accumulated EUR 5.9m in adjusted EBIT during the first nine
months of the year, compared to the EUR 5.0m for FY ’18. Exel says there have
been no material changes to order activity since the release of Q3 figures. We
thus continue to expect further extension to the recent segmental performance
trends. We see Construction & Infrastructure growing at a 10% annual rate,
whereas we expect more muted 3-5% CAGR development for Industrial Applications
and Other Applications.

Good volumes and cost savings program have helped EBIT

We see no reason to make changes to our top line estimates, i.e. we still
estimate Exel’s revenue to grow at a 7% annual rate during the next few years.
Exel expects to fully realize the annual savings target of EUR 3m during 2020.
Although visibility is limited, we make small upward revisions to our
profitability estimates. We now expect EUR 2.3m in Q4 EBIT (previously EUR
2.1m). For FY ’20 we now estimate the figure at EUR 9.2m (previously EUR 8.6m).
In other words, we see Exel achieving operating margins at above 8% going
forward. Such a level still falls short of the company’s long-term target (Exel
targets long-term adjusted operating margin at above 10%).

Long-term upside remains due to operating leverage

In our view more positive development can be expected; higher revenues will
further lift operating margin. There’s still long-term upside potential in Exel,
however we see certain caution is in order due to limited visibility. We regard
EV/EBITDA and EV/EBIT multiples of some 7-8x and 11-12x for this year and next
as reasonable (roughly 30% below peer medians). We update our TP to EUR 6.00
(5.50); our new rating is therefore HOLD (BUY).



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ASPO - MARKET SOFTNESS TO CUT RESULTS SHORT

21.11.2019 - 09.15 | Company update

Aspo abandoned its former guidance for the rest of this year as ESL’s cargo
volumes will be soft due to low steel industry demand. Telko’s profitability
development will remain muted especially in the Western markets. We cut our
estimates, our TP is now EUR 8.75 (9.25), rating HOLD.

Read more

In our view ESL’s long-term case remains intact

As was known previously, SSAB will temporarily shut one of its two furnaces in
Raahe. The seizure is expected to last some 4-6 weeks, and the furnace should be
firing up again early next year. ESL had of course made allowances in its
budgeting for such an event, nevertheless the shipments materialized lower than
expected. We note the Baltic Dry Index has declined steeply during the last
couple of months, however ESL says its Supramaxes haven’t been materially
affected so far. As the new LNG-powered vessels and AtoB@C are now performing
according to expectations, it follows that the lowered near-term outlook is
entirely due to low steel industry shipping volumes. With regards to Telko, Aspo
says the Eastern market is developing basically as before, however the Western
market has proved more challenging than expected.

We cut our Q4 estimates, see higher uncertainty for Telko

We trim our Q4 estimates. We previously expected ESL to achieve EUR 5.5m in Q4
EBIT; our new estimate stands at EUR 4.3m. Our previous Q4 EBIT estimate for
Telko was EUR 2.7m, and the reduced expectation amounts to EUR 2.3m. We leave
our estimates for Leipurin intact. This means we estimate Aspo to post EUR 6.4m
Q4 EBIT, which can be compared to the EUR 6.7m figure recorded in the previous
quarter, and the adjusted EBIT of EUR 7.4m in Q4’18. We thus see Aspo reaching
EUR 22.1m in FY ’19 EBIT (EUR 20.6m in ’18, or EUR 25.4m when adjusted for the
Kauko write-off). Aspo now guides FY ’19 EBIT to be higher than in ’18. Aspo
previously expected the figure to be in the EUR 24- 30m range. We also cut our
next year estimates for Telko.

Improvement steepness is uncertain due to macro softness

Our updated TP is EUR 8.75 (9.25), rating remaining HOLD. In our view both ESL
and Telko continue to hold significant improvement potential, however caution is
in order considering the softness of certain key Aspo markets.



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CIBUS NORDIC - YIELD NOT YET ENTIRELY DIGESTED

18.11.2019 - 09.20 | Company update

Cibus’ portfolio performed as expected in Q3 as the EUR 12.5m net rental income
figure was in line with our estimate. Admin and financial expenses were elevated
due to administrative transition as well as IFRS 16 adjustments and other
financial costs. We make minor changes to our estimates, retain our SEK 135 TP
and HOLD rating.

Read more

Admin and financial expenses were temporarily elevated

Cibus’ portfolio developed without surprises during Q3 as the properties
generated EUR 13.2m in rental income (vs our EUR 13.3m estimate). Property
expenses also were largely as expected, and thus net rental income amounted to
EUR 12.5m (we expected EUR 12.4m). Cibus is currently in the process of
developing its organization and so transitions administration as well as asset
management back to itself. This meant central administration as well as
financial costs were temporarily elevated during the quarter, with admin
expenses amounting to EUR 1.2m (compared to the normal EUR 0.9-1.0m level), and
thus operating income stood at EUR 11.3m (vs our EUR 11.5m estimate). Cibus also
made IFRS 16 related adjustments to its reporting, and now records site
leasehold fees among its financial expenses, the effect being roughly EUR 0.15m
per quarter. Net financial expenses totaled EUR 4.0m in Q3, and Cibus sees the
level at around EUR 3.4m going forward.

Q3 was quiet in terms of portfolio development

There were no changes to Cibus’ portfolio during the quarter as the company
still holds 139 Finnish properties valued at EUR 862m. Net debt LTV ratio and
occupancy rate were basically unchanged at their respective 59% and 95% levels.
Average lease-length remains at 5.0 years. Likewise, annual net rental income
capacity continues to stand at EUR 49.9m, implying EUR 46.2m operating income
potential. Cibus says it expects to list on the Nasdaq Stockholm Main List by
Q3’20. Cibus continues to actively monitor the Nordic property market beyond
Finland.

Cibus’ portfolio still offers a 100bps yield pick-up

We leave our operative estimates largely intact following the report. We retain
our TP of SEK 135 per share, rating HOLD. Cibus’ portfolio net yield, at 5.1%,
remains almost 100bps above that of a typical listed Nordic Real Estate
portfolio.



Open report


CIBUS NORDIC - OPERATING PROFIT AS EXPECTED

15.11.2019 - 10.20 | Earnings Flash

Cibus posted Q3 results largely in line with expectations. Operating income
(rental income less property and central administration expenses), at EUR 11.3m,
was close to our EUR 11.5m estimate. Larger than expected financial expense
items meant profit from property management was a little soft as Cibus is
developing its own organization.

Read more

 * Q3 rental income amounted to EUR 13.2m vs our EUR 13.3m estimate.
 * Net rental income stood at EUR 12.5m, compared to our EUR 12.4m expectation.
 * Operating income was recorded at EUR 11.3m while we expected EUR 11.5m.
 * Net operating income (profit from property management) was EUR 7.3m, falling
   short of our EUR 8.5m projection due to higher than expected financial
   expense items. Cibus is in the process of transitioning administration as
   well as asset management back to the company from third-parties.
 * Annual net rental income capacity stands at EUR 49.9m (unchanged).
 * The property portfolio is valued at EUR 862m, which translates to an EPRA NAV
   of EUR 11.4 (previously EUR 11.3) per share.
 * Net debt LTV ratio was 58.9% (previously 59.0%) at the end of Q3.
 * Occupancy rate stood at 94.5% (94.3% in Q2’19).

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SSH - ISSUES PROFIT WARNING

14.11.2019 - 08.15 | Company update

SSH lowered on Tuesday its revenue estimate for 2019. The lowered outlook did
not come as a surprise as the bar was set really high for Q4. We’ve cut our
sales and EBIT estimates for 2019 and coming years. Despite the estimates cut,
the big picture remains unchanged in our view, with the underlying question in
the investment case still being growth. We note that, SSH is making progress,
but the speed of the transition is slow due to limited growth investment
capacity. On the back of lowered estimates, our new target price is 1.0 euros
(prev. 1.10), our recommendation remains SELL.

Read more

Lowering revenue estimate for 2019

SSH now estimates that its revenue from the software business (software fees,
professional services, and recurring revenue) will decrease somewhat compared to
2018 level, which was 15.6 MEUR (excluding patent income). The previous guidance
was for above 10% revenue growth. Reasons behind the lowered revenue outlook are
lower professional services revenue than expected, negative FX impact from
weakening euro, and postponement of significant NQX sales due to lengthy
procurement processes.

Estimates cut, NQX showing signs of traction

Due to the profit warning we have cut our 2019E net sales estimates from 17.1
MEUR to 15.0 MEUR, and 2019E EBIT from 0.9 MEUR to -0.9 MEUR. Consequently, our
net sales estimates for 2020-21E are also cut ~8%, while our EBIT estimates are
cut even further. The lowered net sales estimates have a clear negative effect
on our profitability estimates, thus postponing profit turnaround into the
future. On the positive, the firewall product NQX is showing promising traction,
with SSH citing that “significant sales” were now postponed to 2020. Our read is
that significant would mean deals in the seven-figure range. In Q3, SSH received
a request for information (RFI) by the Finnish Defence Forces Logistics Command
regarding NQX.

Target price 1.0 euros, recommendation unchanged

On our renewed 2019-20E estimates, SSH is trading at EV/Sales multiples of 3.0x
and 2.5x, which is clearly below the sector as noted before. Despite the
estimates cut, the big picture remains unchanged in our view, with the
underlying question in the investment case still regarding growth. We note that,
SSH is making progress, but the speed of the transition is slow due to limited
growth investment capacity. On the back of lowered estimates, our new target
price is 1.0 euros (prev. 1.10), our recommendation remains SELL. Our target
price implies an EV/Sales multiple of 2.2x on our ‘20E estimate, slightly below
Nordic software peers, which we see as warranted given weaker metrics and the
uncertainty to our estimates.



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FINNAIR - CMD NOTES

13.11.2019 - 09.45 | Company update

Finnair held its CMD yesterday where the company presented its road map for
sustainable and profitable growth after a phase of accelerated growth. The
company aims to grow in line with market growth, focusing on improving its
market position in Asia. The company provided a mix of efficiency improvement
actions in order to improve profitability. We don’t expect any short-term
impacts hence we retain our rating “HOLD” with TP of EUR 6.5.

Read more

Focusing on Asian mega cities

Finnair continues to focus on improving its market position in Asia. The
company’s geographical position provides Finnair a competitive advantage of
transfer traffic between Europe and Asia. Transfer traffic between the two
continents is essential as transfer traffic represents 62% of Finnair’s flown
ticket revenue of which transfer traffic from Asia represents 73%. The company
will concentrate on Asian mega cities which are providing higher yields. Japan
and China are the two main markets but Finnair increases its presence also in
other Asian countries, South Korea being an example as the company opens a new
route to Busan in March 2020. The market growth is estimated to be some 4%
between Europe and Asia. The company aims to be a modern premium airline and has
renewed its website and mobile app to better serve its customers globally. The
company is also renewing its ticket types and will offer a new option, premium
economy class alongside with the normal economy and premium classes.

Heavy investments on fleet renewal

During the past few years, Finnair has focused on accelerated growth. The
company has increased its capacity in 2015-2019 by 14 new A350 aircrafts and
five more has been ordered (for 2020-2022). During the strategy period, the
company aims to increase its wide-body fleet from 22 to ~30 and the total fleet
from 83 to ~100. The company has estimated that the fleet investments during
2020-2025 will be some EUR 3.5b-4.0b (including the five new A350s) depending on
the final fleet renewal plan. According to the company, one-third of the
investments will be invested into growth and the remaining two-thirds into fleet
renewal/replacement. The company aims to increase the share of its owned
aircrafts. The investments will predominantly be funded by the company’s
cashflow.

Updated financial targets for 2020-2025

Finnair updated its financial targets for 2020-2025 as the company is moving
towards a new phase where the company seeks sustainable and profitable growth.
The company’s opex (ex fuel) has increased by 6.1% (CAGR) since 2014, which
exceeds the revenue growth of 5.5% (CAGR). Based on the strategy update, the
company aims to moderate its growth and expects it to be in line with the market
growth. Finnair guides ASK growth (CAGR) of 3-5% which is in line with our
expectations (3-4% in 20E-21E). The company’s new target is to reach comparable
EBIT margin of over 7.5% (prev. over 6%) over the cycle (at constant fuel and
currency), after a 12-18 month build-up period. Profitability improvement will
be driven by operational efficiency. Key drivers for lower unit costs are fuel
efficiency, digitalization and automatization as well as improved on-time
performance. Finnair targets to improve its OTP rate to 85% (2018: 78%). Also,
fleet renewal should boost efficiency and updated ticket types to support
margins. We see Finnair’s profitability target achievable, although we don’t
expect any short-term impacts as the improvement of OTP is gradual and
implementation of new processes takes time. Finnair also updated its ROCE target
and expects ROCE of over 10% (prev. over 7%) over the cycle (at constant fuel
and currency), after a 12-18 month build-up period. The company will provide
more information of its sustainability targets in Q1’20.

HOLD with TP of EUR 6.5

We have made small adjustment mainly to our 21E estimates after the CMD. We
expect revenue to grow 3-4% in 20E-21E while we expect comparable EBIT margin of
5.2% and 6.6%. The updated strategy does not impact our short-term estimates but
we see the new targets to create positive outlook for Finnair’s earnings
development in the future. We keep our rating “HOLD” with TP of EUR 6.5.



Open report


ENDOMINES - UPGRADE TO HOLD

08.11.2019 - 09.15 | Company update

Endomines’ Q3 results were clearly below our estimates, as no concentrate from
Friday was sold during the quarter. Mining operations have progressed well but
issues with the commissioning of the mill delayed concentrate production. Full
forecasted production rates at Friday are expected by the end of the year. We
adjust our TP to SEK 4.7 (4.8) and upgrade to HOLD (SELL) following share price
declines.

Read more

Estimates miss from mill commissioning delays

Endomines Q3 results fell clearly below our estimates, as no gold concentrate
from the Friday-mine was yet sold, whereas we had expected minor sales. The gold
concentrate production was affected by issues with commissioning the mill at
Friday, which delayed previous plans of commencing production during Q3. Revenue
amounted to SEK 1.6m (Evli 10.9m) and EBIT to SEK -16.4m (Evli -7.2m). Revenue
was generated from gold recovered from the clean-up at Pampalo. Production at
the Friday-mine has progressed well and a significant ore stockpile has been
built up and Endomines expects to be reaching full forecasted production rates
by the end of the year.

Bumps on the road in the near-term not unlikely

We have slightly revised our 2019 estimates downwards following the delay in
concentrate production. The issues relating to the commissioning of the mill
continue to pose risks for concentrate production in Q4. The impact of any
further delays are however essentially not of any major importance and would
only shift cashflows to a slightly later stage and the improved financial
situation from the completed rights issue allows for some headwind.

HOLD (SELL) with a TP or SEK 4.7 (4.8)

Our view on Endomines post-Q3 in general remains intact. Our SOTP (Gold spot
price) implies a value of SEK 5.4 per share but with the production uncertainty
still present we continue to justify a discount and check our target price to
SEK 4.7 (4.8) per share following SOTP adjustments. Due to a near 10% share
price decline since our previous update we upgrade our rating to HOLD (SELL).



Open report


ENDOMINES - NO GOLD CONCENTRATE PRODUCTION IN Q3

07.11.2019 - 09.50 | Earnings Flash

Endomines did not sell any gold concentrate from Friday in Q3, as the
commissioning of the mill was delayed. Mining operations have progressed well,
and an ore stockpile has been built up. Due to the lack of gold concentrate sale
from Friday, Endomines’ Q3 figures were clearly below our estimates.

Read more

 * Endomines did not sell any gold concentrate from Friday in Q3, while gold
   recovered from the clean-up at Pampalo generated some revenue. Mining has
   progressed well at Friday and a significant ore stockpile at the mine and the
   mill sites has been produced.
 * Revenue* amounted to SEK 1.6m, with our estimates at SEK 10.9m. We had
   expected minor gold concentrate sales from Friday, while Q3 revenue consisted
   solely of sale of clean-up gold from the Pampalo mill.
 * EBITDA* in Q3 was at SEK -13.2m, below our estimate of SEK -3.2m given the
   limited gold concentrate sales. (*Not reported, derived from H1 and Q1-Q3
   figures)
 * In the third quarter Endomines was able to commence the ramp-up of the Friday
   mining and milling operations and the work is now fully ongoing. Issues
   relating to the commissioning of the mill delayed the start of gold
   concentrate production. Successful commissioning of the mill is expected to
   take place during Q4.
 * Endomines did not give an updated production guidance for 2019. The ramp-up
   of the Friday mine is on-going and an updated guidance will be given once
   completed the mill is successfully commissioned and ramp-up completed



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MARIMEKKO - STRONG OUTLOOK AHEAD

07.11.2019 - 09.35 | Company update

Marimekko delivered good Q3 result, as expected. We saw some concrete actions to
reach a wider target audience as the company launched its first streetwear
collection KIOSKI. We have slightly increased our estimates for 19E-21E. We keep
our rating “HOLD” with TP of EUR 39 (30).

Read more

Q3 earnings supported by increased sales both in Finland and international

Marimekko’s Q3 result was strong, as expected. Revenue grew by 15% and was EUR
34.5m vs. EUR 34.7m/33.8m Evli/consensus. Sales is Finland grew by 14% while
international sales increased by 17%. Marimekko’s sales grew in all the market
areas, growth being particularly good in Finland and APAC region. In Finland,
growth was driven by retail sales (16% y/y). In APAC region, retail sales
increased by 14% and wholesale sales by 9%. Also, increased licensing income
boosted sales in APAC. Comparable operating profit was slightly higher than
consensus estimates but in line with our estimate at EUR 7.8m resulting in EBIT
margin of 22.7% (vs. EUR 7.8m/7.6m Evli/consensus). Earnings development was
boosted by the good growth in net sales but at the same time profitability was
impacted by increased fixed costs which were partly due to the share-based
incentive scheme for management.

Successful launches appeal to a wider target audience

In Jan-Sept, Marimekko’s sales development has been good especially in Finland
(9% y/y) and APAC region (14% y/y), which are the two main markets for the
company but also in EMEA (25% y/y). Marimekko’s brand continues strong in
Finland and the company has been able to reach new customer groups while keeping
the existing customers, resulting higher sales. Marimekko’s first (unisex)
streetwear collection KIOSKI, which was launched in Q3 is an example of the
actions the company has taken in order to appeal to a wider audience. The launch
of the collection was successful and we see the collection to appeal well to a
younger customer base in particular. In addition to Marimekko KIOSKI, the new
leather bag line supports the company’s strategy as bags and accessories (share
of net sales ~26%) provide a convenient way to introduce the brand to new
customers. In Q3, Marimekko’s prints were also part of an anniversary collection
by Target, bringing a lot of visibility in the US. During Jan-Sept, most of the
company’s net sales were generated in Finland (54%) while 21% of net sales came
from APAC region. Finland and APAC both represent ~37% of brand sales.

Growth strategy to support outlook for 19E-21E

We expect 19E revenue to grow by 10% y/y in Finland and 14% y/y internationally.
In our assumptions, Finland represents ~55% of the total revenue in 19E-20E. We
expect retail and wholesale sales to develop favorably in the future resulting
from increasing global brand awareness and wider customer base. Increasing
retail sales should also support gross margin improvement. We have slightly
adjusted our 20E-21E outlook by increasing our revenue expectation by some 1%
while increasing our 20E-21E EBIT expectation by 0.5% and 5.7%. We foresee
revenue growth of ~8% in 20E-21E. Marimekko’s target is to achieve operating
profit margin of 15% which we see achievable given the growth outlook. We also
expect increasing e-commerce to support growth.

“HOLD” with TP of EUR 39 (30)

We expect Marimekko’s 2019E sales to grow by 12% and to total EUR 125.3m. We
have increased our EBIT expectation to EUR 17.0m (prev. EUR 16.8m), resulting in
EBIT margin of 13.6% (2018: 10.9%). We see that Marimekko is able to achieve and
maintain higher margins than the premium goods peer group, which justifies
higher multiples similar to our luxury goods peer group median. On our
estimates, Marimekko trades at 19E-20E EV/EBIT multiple of 18.8x and 15.4x which
translates into 14-18% discount compared to the luxury goods peer group median.
Our target price translates into EV/EBIT multiple of 19.6x and 16.0x on our
19E-20E estimates, which still are below the EV/EBIT multiples of Marimekko’s
luxury goods peer group. We keep our rating “HOLD” with TP of EUR 39 (prev. EUR
30).



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PIHLAJALINNA - BECOMES PART OF THE CONSOLIDATION

06.11.2019 - 09.40 | Company update

Pihlajalinna’s Q3 revenue was in line with expectations but profitability was
better than expected. Mehiläinen made a cash tender offer of all the shares of
Pihlajalinna with the offer price of EUR 16 per share. We see the offer likely
to be approved by the shareholders. With the TP of EUR 16 (12) our rating is now
“HOLD”.

Read more

Efficiency improvements already shown in Q3

Pihlajalinna delivered good Q3 result. Revenue grew by 5.5% (of which 3.7%
organic growth) and was in line with estimates at EUR 122.7m (EUR 123.0m/121.5m
Evli/consensus). The company’s adj. EBITDA beat expectations and was at EUR
17.4m (21.9% y/y) vs. our EUR 15.7m. Profitability improved mainly as a result
of the efficiency improvement program but was also supported by increased
revenue growth.

Mehiläinen plans to acquire Pihlajalinna

Mehiläinen has made a cash tender offer of all the shares of Pihlajalinna with
the offer price of EUR 16 per share which values Pihlajalinna’s total equity at
EUR ~362m. The offer price translates into a premium of ~46% compared to
Monday’s closing price of EUR 10.96. The tender offer is unanimously recommended
by the non-conflicted members of the board of directors of Pihlajalinna. We see
the offer likely to be approved by the shareholders as the largest shareholders
have already accepted the offer (~63% of shares). The combined revenue would
represent some 23% of the total private social and healthcare market and in
certain sectors the market shares might become too large, harming the
competition. At the same time Terveystalo’s acquisition of Attendo’s Finnish
branch in 2018 supports the approval. The offer is subject to the approval of
the Finnish Competition and Consumer Authority (FCCA).

“HOLD” with TP of EUR 16.0 (12.0)

After the good Q3 result, we have fine-tuned our 19E-21E estimates. We expect
2019E sales to grow by 6.3% to EUR 518.5m and adj. EBIT of EUR 23.0 resulting in
adj. EBIT margin of 4.4% (2018: 3.0%) The offer price of EUR 16.0 translates
into EV/EBITDA multiple of 9.6x and 7.7x on our 19E-20E estimates which is 5-10%
discount compared to the peer group. We have increased our TP to match the offer
price of EUR 16.0 (prev. EUR 12.0) and our rating is now “HOLD”.



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MARIMEKKO - Q3 RESULT IN LINE WITH EXPECTATIONS

06.11.2019 - 09.10 | Earnings Flash

Marimekko’s Q3 net sales increased by 15% and was EUR 34.5m vs. EUR 34.7m/33.8m
Evli/cons. Adj. EBIT was EUR 7.8m vs. EUR 7.8m/7.6m Evli/cons. Sales grew in all
the market areas which boosted earnings development. Marimekko reiterated its
guidance for 2019E.

Read more

 * Finland: revenue was EUR 19.7m vs. EUR 19.6m Evli view. Revenue increased by
   14%. Retail sales increased by 16%. Wholesale sales increased by 9%.
 * International: revenue was EUR 14.8m vs. EUR 15.1m Evli view. Revenue
   increased by 17%. Retail sales increased by 15% and wholesale sales increased
   by 4%.
 * Net sales growth was generated primarily by Finnish retail and wholesale
   sales as well as licensing income and wholesale sales in the APAC region.
 * Q3 adj. EBIT was EUR 7.8m (22.7% margin) vs. EUR 7.8m/7.6m (22.5%/22.5%
   margin) Evli/cons. Profitability was boosted by sales growth but at the same
   time higher fixed costs impacted negatively on profitability.
 * Q3 EPS was EUR 0.79 vs. EUR 0.77/0.73 Evli/cons.
 * Guidance for 2019: net sales in 2019E are forecasted to be higher than in the
   previous year and comparable operating profit is expected to be higher than
   in the previous year, amounting to approximately EUR 17m.

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PIHLAJALINNA - TENDER OFFER FROM MEHILÄINEN

05.11.2019 - 09.00 | Earnings Flash

Mehiläinen and Pihlajalinna have on 5th of November 2019 entered into a
combination agreement pursuant to which Mehiläinen will make a voluntary
recommended public cash tender offer for all issued and outstanding shares in
Pihlajalinna. The offer price is EUR 16.00 in cash for each issued and
outstanding share in Pihlajalinna, valuing the company’s total equity at EUR
~362m. The offer price represents a premium of ~46%. The non-conflicted members
of the board of directors of Pihlajalinna have unanimously decided to recommend
that the shareholders of Pihlajalinna accept the tender offer.

Read more

 * Q3 revenue was EUR 122.7m vs. EUR 123.0m/121.5m Evli/consensus estimates.
   Revenue grew by 5.5% y/y. Organic growth was 3.7% y/y.
 * Q3 adj. EBITDA was EUR 17.4m (14.2% margin) vs. EUR 15.7m/11.4m Evli/cons
   estimates. Adj. EBITDA increased by 21.9% y/y.
 * Q3 adj. EBIT was EUR 9.3m (7.5% margin) vs. EUR 6.8m/3.8m Evli/cons
   estimates. Profitability improved due to the efficiency improvement program
   which was launched in June but was also supported by revenue growth.
 * Outlook for 2019E remains unchanged: Pihlajalinna’s consolidated revenue is
   expected to increase from 2018. Adj. EBIT is expected to improve clearly
   compared to 2018.



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NEXT GAMES - AWAITING A LAUNCH OF BRN

04.11.2019 - 09.15 | Company update

Next Games Q3 results were below our estimates, with revenue of EUR 7.8 (Evli
8.7m) and EBIT at EUR -2.1m (Evli -1.6m). The number of active users in live
games continued to decline but monetization figures remained on good levels and
Next Games remained on target monthly fixed cost levels. The targeted growth in
2019 is looking more at risk with little news on the BRN launch. We retain our
HOLD-rating with a target price of EUR 0.9 (1.0).

Read more

Decline in active users impacted revenue and profitability

Next Games Q3 results fell short of our expectations. Revenue amounted to EUR
7.8m (Evli 8.7m). Revenue was affected by a continuing declining trend of the
number of active users in both NML and Our World, although monetization figures
continued to be on a good level. EBIT was as a result of the lower than
estimated revenue below our estimates, at EUR -2.1m (Evli -1.6m). Next Games
remained on target monthly fixed cost levels in Q3.

2019 growth target at risk

Next Games seeks moderate revenue growth during 2019 compared to 2018 assuming
NML and Our World maintain current levels and the plan of launching one game per
year remains on schedule. We now estimate a 2.6% revenue growth in 2019. We
assume slight overall improvement in revenue of live games in Q4, supported by
the post-Q3 NML update and the start of TWD season 10. We continue to assume the
launch of Blade Runner Nexus late 2019, although with the already prolonged soft
launch period and little update on the game’s situation in Q3, the risk of a
delay in launch to 2020 remains high. Comments on Our World do not suggest any
notable upscaling in 2019.

HOLD with a target price of EUR 0.9 (1.0)

We have made slight revisions to our estimates post-Q3 and have lowered our
2019-2020 EBIT-margin estimates by some 3-4pp respectively following lowered
gross bookings estimates. We adjust our TP to EUR 0.9 (1.0) and retain our
HOLD-rating.



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ETTEPLAN - CONTINUED GOOD PERFORMANCE

04.11.2019 - 07.45 | Company update

Etteplan’s Q3 results were better than expected, with both revenue and EBIT
beating our estimates. EBIT was aided by net one-offs of EUR 0.8m, at EUR 5.7m
(Evli 4.9m). Revenue growth was 17.0%, with a respectable 5.1% organic growth
given continued market uncertainty. The comments on market outlook saw some
continued signs of slow-downs, without any major changes. We retain our
HOLD-rating with a target price of EUR 9.6.

Read more

Exceptional Q3 profitability boosted by one-offs

Etteplan’s Q3 results were better than we had expected. Revenue amounted to EUR
61.5m (Evli 59.1m), with the difference mainly due to higher sales in
Engineering solutions. Growth was driven by acquisitions made during Q2-Q3/19,
with revenue growth at 17.0% y/y, of which 5.1% organic growth. EBIT was above
our expectations at EUR 5.7m (Evli 4.9m) due to non-recurring items of EUR 0.8m,
including a EUR 1.1m impact from a revaluation of the earn-out in the Eatech
acquisition. Challenges in Germany also continued to have an effect on
profitability.

No major changes in market outlook

The market outlook continued to reflect the more challenging environment posed
by uncertainty in the global economy. Comments on demand outlook point towards
some slow-down and the situation in China continued to be challenging, with a
decline in hours sold y/y. However, no signs of any larger deterioration in the
overall demand situation was observable and according to Etteplan remained
generally at a good level.

HOLD with a target price of EUR 9.6

Our top-line estimates remain largely unchanged post Q3. We have made some
adjustments to our coming year estimates due to a readjustment of amortization
of acquisition fair value adjustments, with our 2020-2021 EBIT estimates down by
some 5%. With only minor estimates revisions and the continued uncertainty in
demand outlook, we retain our HOLD-rating with a target price of EUR 9.6.



Open report


SRV - PERSISTING CHALLENGES

01.11.2019 - 08.45 | Company update

SRV’s Q3 results were below our expectations, as while revenue beat our
estimates slightly (Act./Evli 227.1m/222.1m), EBIT was below our estimates at
EUR -6.3m (Evli -2.5m). Profitability was impacted by impairments relating to
investments in Russia and weaker margins in the Construction segment, driven by
two larger projects. SRV announced the initiation of a recovery programme, with
the short-term goal of ensuring positive cash flow and operating profit in 2020.

Read more

Results below expectations

SRV’s Q3 results were weaker than expected. Revenue was slightly above our
estimates, at EUR 227.1m (Evli EUR 222.1m), while EBIT was below our estimates
at EUR -6.3m (Evli -2.5m). EBIT was weaker partly due to impairments relating to
investments in Russia, which we had forecast to Q4/19, but the weaker margins
also hit EBIT of the Construction segment harder than we had estimated and was
EUR -3.4m (Evli -0.5m). Positive operational news in the quarter were quite
frankly limited, but the announced recovery programme and comments from recently
joined CEO Saku Sipola point towards stronger determination in improving cash
flows and the balance sheet.

Initiated a recovery programme

SRV announced the launch of a recovery programme, with the short-term goal of
ensuring its operative operating profit and cash flow for 2020 are positive and
returning its operative operating profit for 2021 to the level of 2017 (EUR
27.1m). We interpret the information given as a continued subpar performance in
2020 and take a more conservative stance on earnings improvement, lowering our
2020 EBIT estimate to EUR 12.6m (prev. EUR 28.2m). The slowing down of the
construction sector and the more non-recurring nature of a larger part of the
problems in 2019 in our view, however, still continue to speak for clear
profitability improvements.

HOLD with a target price of EUR 1.30

Following revisions to our estimates we lower our target price to EUR 1.3 (1.4),
retaining our HOLD-rating.



Open report


NEXT GAMES - RESULTS BELOW EXPECTATIONS

01.11.2019 - 08.20 | Earnings Flash

Next Games's net sales in Q3 amounted to EUR 7.8m, below our estimates and in
line with consensus (EUR 8.7m/8.1m Evli/cons.). EBIT amounted to EUR -2.1m,
below our and consensus estimates (EUR -1.6m/-1.1m Evli/cons.).

Read more

 * Net sales in Q3 were EUR 7.8m (EUR 13.4m in Q3/18), below our estimates and
   in line with consensus estimates (EUR 8.7m/8.1m Evli/Cons.). Growth in Q3
   amounted to -41.8 % y/y. Compared to our estimates, revenue was lower than
   expected as the number of active users in NML and Our World declined compared
   to Q2, while we had expected flattish development. ARPDAU figures were quite
   in line with our estimates for both games.
 * Operating profit in Q3 amounted to EUR -2.1m (EUR -10.3m in Q3/18), below our
   and consensus estimates (EUR -1.6m/-1.1m Evli/cons.), at a margin of -27.1 %.
   The company’s cost base remained at target levels but the lower revenue
   compared to our estimates affected profitability.
 * Adj. EBIT amounted to EUR -1.2m (Q3/18: -9.2m), below our estimate of EUR
   -0.5m.
 * TWD: NML - DAU 163k (Q3/18: 275k), MAU 479k (Q3/18: 800k), ARPDAU EUR 0.21
   (Q3/18: 0.24).
 * TWD: OW - DAU 127k (Q3/18: 386k), MAU 529k (Q3/18: 2.1mk), ARPDAU EUR 0.36
   (Q3/18: 0.23).
 * The funds received from the rights offering were received post-Q3 and at the
   22.10 the company had a cash balance of EUR 10.3m.



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CAPMAN - SOLID PERFORMANCE ACROSS THE BOARD

01.11.2019 - 07.50 | Company update

CapMan posted solid Q3 results, largely in line with our estimates, with Q3
revenue amounting to EUR 9.7m (Evli 9.9m) and EBIT of EUR 5.5m (Evli 5.3m).
CapMan is showing good development across all business segments and in the light
of a good fundraising outlook we have slightly raised our AUM estimates and for
2020-2021 and made corresponding changes to the Management company business
EBIT. Following adjustments to expenses of Other operations our Group estimates
are largely intact. We retain our HOLD-rating with a TP of EUR 2.1 (1.95)

Read more

Solid results, carry contribution minor

CapMan continued to post solid results, on Group level largely in line with our
estimates. Q3 revenue amounted to EUR 9.7m (Evli 9.9m) and EBIT of EUR 5.5m
(Evli 5.3m). AUM development compared to Q2 was flattish given no new fund
closings but up 21% y/y. The Mezzanine V -fund entered carry but with a limited
impact and total carry was at Q2 levels of EUR 0.7m. The Investment business
contributed to a larger part of EBIT, aided by Buyouts exit from Kämp Collection
Hotels. Q3 in general in our view showed little signs of weakness.

Positive fundraising outlook

CapMan is currently raising capital more or less across the board and management
sees significant growth in AUM during 2020. Investment returns so far during
2019 surpassed the lower end of the 10-15% target return and all three service
businesses are reportedly performing well, with 1-9/2019 Services business
growth of over 90%. We have slightly increased our views on 2020-2021 AUM
development and as a result raised our Management company EBIT estimates by some
12%. Following an offsetting impact of revised Other operations expense
estimates our Group estimates remain largely unchanged.

HOLD with a target price of EUR 2.1 (1.95)

On Group level our coming year estimates remain largely unchanged. With the
outlook for the core business looking yet more favourable we adjust our target
price to EUR 2.1 (1.95) and retain our hold rating.



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ETTEPLAN - GOOD Q3 FIGURES

31.10.2019 - 13.40 | Earnings Flash

Etteplan's net sales in Q3 amounted to EUR 61.5m, slightly above our estimates
and in line with consensus (EUR 59.1m/60.4m Evli/cons.). EBIT amounted to EUR
5.7m, above our and consensus estimates (EUR 4.9m/4.9m Evli/cons.), in line with
our and consensus estimates after excluding EUR 0.8m one-offs.

Read more

 * Net sales in Q3 were EUR 61.5m (EUR 52.6m in Q3/18), slightly above our
   estimates and in line with consensus estimates (EUR 59.1m/60.4m Evli/Cons.).
   Growth in Q3 amounted to 17.0 % y/y, of which 5.1 % organic growth.
 * EBIT in Q3 amounted to EUR 5.7m (EUR 4.4m in Q3/18), above our estimates and
   consensus estimates (EUR 4.9m/4.9m Evli/cons.), at a margin of 9.3 %. EBITA
   amounted to EUR 6.6m (Evli EUR 5.5m), at a margin of 10.7%. Q3 EBIT/EBITA was
   improved by one-off items of EUR 0.8m related to a revaluation of the
   earn-out in the Eatech acquisitions.
 * EPS in Q3 amounted to EUR 0.19 (EUR 0.13 in Q3/18), above our estimates and
   consensus estimates (EUR 0.15/0.15 Evli/cons.).
 * Engineering Solutions: Net sales in Q3 were EUR 35.3m vs. EUR 31.9m Evli.
   EBITA in Q3 amounted to EUR 3.4m vs. EUR 3.0m Evli.
 * Software and Embedded Solutions: Net sales in Q3 were EUR 15.4m vs. EUR 15.8m
   Evli. EBITA in Q3 amounted to EUR 1.6m vs. EUR 1.6m Evli.
 * Technical Documentation Solutions: Net sales in Q3 were EUR 10.7m vs. EUR
   11.5m Evli. EBITA in Q3 amounted to EUR 0.8m vs. EUR 1.0m Evli.
 * The MSI-% of sales improved above 60% for the first time.



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TOKMANNI - UPGRADED TO “BUY”

31.10.2019 - 09.25 | Company update

Tokmanni’s Q3 sales were in line with our expectation and the company was able
to deliver strong earnings. The outlook for future earnings development looks
positive. We have increased our estimates for 20E-21E. We upgrade to “BUY” with
TP of EUR 13.5 (prev. EUR 10.2).

Read more

Solid Q3 performance

Tokmanni’s upswing continued in Q3 as the company beat the already high Q3
expectations. Sales grew by 9.9% (of which LFL growth of 4.9% vs. our 3.0%) to
EUR 231.5m vs. EUR 231.3/228.4m Evli/consensus. Sales were supported by
increased number of customer visits and higher average purchases but also by tax
refunds. Tokmanni’s adj. gross profit was EUR 82.0m (35.4%) vs. EUR 82.1m
(35.5%) our view. Gross margin improvement was driven by the structure of sales,
private labels and increased direct import. Improved profit margin and lower
relative share of costs reflected to the company’s operating result as
Tokmanni’s adj. EBIT increased to EUR 21.9m vs. EUR 19.4m/18.7m Evli/consensus.

Positive earnings outlook – estimates upgraded

Tokmanni updated its 2019E outlook for revenue and expects strong revenue growth
for 2019 based on the revenue from the new stores acquired and opened in 2018
and new stores to be opened in 2019, as well as on good growth in LFL revenue
(prev. Tokmanni expects good revenue growth for 2019, based on the revenue from
the new stores acquired and opened in 2018 and new stores to be opened in 2019,
as well as on slight growth in LFL revenue.). The company reiterated its
guidance for profitability and expects comparable EBIT margin to improve from
the previous year. We expect 2019E revenue to grow by 8.8% to EUR 947m and EBIT
to improve to EUR 71m (prev. estimate of EUR 68m) resulting in EBIT margin of
7.5% (2018: 6.0%). In our view, Tokmanni has succeeded in appealing more
customers by wide selection of products and low prices and the actions taken
towards improved profitability are working, creating positive outlook for the
earnings development also in the future. The company’s long-term comparable EBIT
margin target is about 9% which we believe to be achievable. We have increased
our 2020E-2021E revenue expectation by 0.5%-1% and adj. EBIT expectation by
3-4%. We expect 2020E-2021E LFL growth of 1.5% and EBIT margins of 8.2% and 8.6
%.

Seasonally strong final quarter ahead

Tokmanni will open two new stores during Q4’19 in Vääksy and Virrat, which will
increase the store network to 191 stores (Tokmanni targets to increase its store
network to above 200 stores). The new store openings as well as Christmas sales
should support the sales growth in the last quarter of the year, which is
normally the strongest quarter of the year for Tokmanni. The company indicated
that many of the “easy” ways of improving profitability have already been used
but the company continues to take actions towards improved operational
efficiency for example by continuing profitability improvements of its supply
chain. Margin expansion is also supported by increasing the share of direct
import and private labels (the current private label’s share of sales is 31.8%).

Upgraded to “BUY” with TP of EUR 13.5 (10.2)

Tokmanni’s EBIT margin levels in 19E-20E are at the same level with the
company’s international discount peers. We see that Tokmanni is able to achieve
and maintain higher margins than the Nordic peers, which justifies higher
multiples similar to our international discount peer group median. On our
estimates, Tokmanni trades at 19E-20E EV/EBIT multiple of 15.0x and 13.1x which
translates into 16-25% discount compared to the international discount peers and
to ~10% premium compared to the Nordic peers. Our target price translates into
EV/EBIT of 16.4x and 14.3x on our 19E and 20E estimates, which still are below
the EV/EBIT multiples of Tokmanni’s international discount peers. The company
also offers attractive dividend yield (~6%) in 19E-20E. Based on our estimates
increase, we upgrade to “BUY” with TP of EUR 13.5 (prev. EUR 10.2).



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EXEL COMPOSITES - MORE UPLIFT TO BE EXPECTED

31.10.2019 - 09.10 | Company update

Exel Composites posted Q3 results basically in line with our estimates. Wind
energy continued to support volumes. Exel left FY ’19 guidance unchanged,
expecting revenue and adjusted operating profit to increase. We update our TP to
EUR 5.5 (5.0) as we see further improvement in the cards. Our rating is still
BUY.

Read more

No major surprises in terms of segmental performance

Exel Composites posted EUR 23.6m in Q3 revenue, a figure slightly below our EUR
24.7m estimate. Industrial Applications, a segment which includes
telecommunications customers, continued soft as revenue declined by 10% y/y. We
expected flat development. Other Applications reported EUR 4.8m Q3 revenue, a
decent improvement y/y but not quite meeting our EUR 5.0m estimate. Construction
& Infrastructure, driven by wind energy, improved by 11% y/y to EUR 10.9m and
thus was basically in line with our expectations. The adjusted operating profit
of EUR 1.7m was also in line with our expectations. Overall, the Q3 report
didn’t provide major surprises as key customer industries such as wind energy
continued to support volumes.

We make relatively minor estimate changes

We make only minor updates to our revenue and profitability estimates. We have
revised our Q4 revenue estimate slightly upwards due to the strong 10% increase
in order intake. We continue to expect Exel to manage around 7.5% adjusted
operating margins going forward. Exel says it expects to fully reach the
targeted EUR 3m in annual cost savings in 2020.

We see further upside in the light of recent performance

We continue to expect Exel to post positive volume and profitability development
going forward. Although we do not make major changes to our estimates, in the
light of recent good performance we argue slightly higher valuation multiples
are warranted. Our updated TP is EUR 5.5 (5.0), which would imply roughly 8x
EV/EBITDA and 12x EV/EBIT (adj.) on our ‘19e estimates. On our ‘20e estimates
the multiples would amount to some 6x EV/EBITDA and 10x EV/EBIT. Such valuation
is still significantly below peer group median. Our rating remains BUY.



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CAPMAN - IN LINE WITH EXPECTATIONS

31.10.2019 - 09.00 | Earnings Flash

CapMan's net sales in Q3 amounted to EUR 9.7m, in line with our estimates and
slightly below consensus (EUR 9.9m/10.1m Evli/cons.). EBIT amounted to EUR 5.5m,
slightly above our estimates and in line with consensus (EUR 5.3m/5.6m
Evli/cons.).

Read more

 * Revenue in Q3 was EUR 9.7m (EUR 7.2m in Q3/18), in line with our estimates
   and slightly below consensus estimates (EUR 9.9m/10.1m Evli/Cons.). Growth in
   Q3 amounted to 34.7 % y/y.
 * Operating profit in Q3 amounted to EUR 5.5m (EUR 4.8m in Q3/18), slightly
   above our estimates and in line with consensus estimates (EUR 5.3m/5.6m
   Evli/cons.), at a margin of 56.7 %.
 * EPS in Q3 amounted to EUR 0.03 (EUR 0.03 in Q3/18), in line with our
   estimates and consensus estimates (EUR 0.03/0.03 Evli/cons.).
 * Management Company business: Revenue in Q3 was EUR 7.0m vs. EUR 6.9m Evli.
   Operating profit in Q3 amounted to EUR 1.9m vs. EUR 2.0m Evli.
 * Investment business: Revenue in Q3 was EUR 0.0m vs. EUR 0.0m Evli. Operating
   profit in Q3 amounted to EUR 3.2m vs. EUR 2.4m Evli.
 * Services business: Revenue in Q3 was EUR 2.7m vs. EUR 3.0m Evli. Operating
   profit in Q3 amounted to EUR 1.6m vs. EUR 1.3m Evli.
 * Capital under management by the end of Q3 was EUR 3.2bn (Q3/18: EUR 2.7bn).
   Real estate funds: EUR 1.9bn, private equity & credit funds: EUR 1.0bn, infra
   funds: EUR 0.3bn, and other funds: EUR 0.1bn.
 * The CapMan Mezzanine V fund under our CapMan’s Credit strategy started
   realizing carry in September.



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RAUTE - MARKET UNCERTAINTY CONTINUES

31.10.2019 - 09.00 | Company update

Raute’s Q3 missed our estimates, but overall a weak Q3 was as expected due to
low order book. Raute sees Q4 a lot stronger, yet when it comes to the wider
picture the report didn’t offer us a reason to change our cautious view. We thus
reiterate our EUR 25 TP and HOLD rating.

Read more

Elevated market risks continue to weigh on order intake

Raute’s Q3 revenue decreased by 30% y/y to EUR 33.7m, and hence EBIT declined to
EUR 1.7m from EUR 5.5m. Raute posted Q3 services revenue at EUR 17m, a figure in
line with our estimate and an increase of 20% y/y. Raute says certain customers
have seen deteriorating prices due to the recent boom in plywood and LVL mill
investments and subsequent high capacity utilization rates. Raute sees the
market currently polarized in the sense that a good level of demand remains for
both large as well as small orders (in addition to services and spare parts
demand), whereas activity for mid-sized orders such as mill modernizations is
weak. The modernization softness was reflected in the very low EUR 8m (EUR 15m)
Q3 services order intake. Elevated uncertainty continues to postpone major
investment decisions.

Raute is in a good shape to weather further softening

We don’t make major updates to our estimates following the report. We note Raute
expects Q4 to be strongest quarter of ’19 in terms of EBIT, which we now expect
at EUR 3.0m. In our view Raute is well-positioned for a cooling market
environment due to its strong balance sheet and leading product offering. Next
year will be greatly helped by the recently disclosed EUR 58m Russian project
delivery. On the other hand, excluding the Segezha order the current EUR 109m
order backlog implies only some EUR 50m in orders, a rather soft level. In other
words, even if the big order alleviates concerns regarding next year, we want to
see pick-up in orders before turning our view more positive.

We see valuation as neutral due to uncertainties

We view Raute’s valuation, at ca. 7x EV/EBITDA and 9x EV/EBIT for ‘19e, as
neutral. Valuation on ‘20e multiples could quickly turn attractive should orders
pick-up, however visibility on next year’s figures remains limited despite the
good groundwork laid by the record order. We reiterate our EUR 25 TP and HOLD
rating.



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SRV - EARNINGS WEAKER THAN EXPECTED

31.10.2019 - 08.45 | Earnings Flash

SRV's net sales in Q3 amounted to EUR 227.1m, in slightly above our and
consensus estimates (EUR 222.1m/222.0m Evli/cons.). EBIT amounted to EUR -6.3m,
below our and consensus estimates (EUR -2.5m/-2.9m Evli/cons.). SRV announced
the initiation of a recovery programme.

Read more

 * Revenue in Q3 was EUR 227.1m (EUR 208.7m in Q3/18), slightly above our
   estimates and consensus estimates (EUR 222.1m/222.0m Evli/Cons.). Growth in
   Q3 amounted to 8.8 % y/y.
 * Operating profit in Q3 amounted to EUR -6.3m (EUR -5.7m in Q3/18), below our
   estimates and consensus estimates (EUR -2.5m/-2.9m Evli/cons.), at a margin
   of -2.8 %. The operative operating profit amounted to EUR -7.0m, below our
   estimates (Evli -2.5m).
 * EPS in Q3 amounted to EUR -0.22 (EUR -0.15 in Q3/18), below our estimates and
   consensus estimates (EUR -0.13/-0.13 Evli/cons.).
 * The order backlog in Q3 was EUR 1,592.6m (EUR 1,661.5m in Q3/18), down by
   -4.1 %.
 * Construction: Revenue in Q3 was EUR 226.0m vs. EUR 220.9m Evli. Operating
   profit in Q3 amounted to EUR -3.4m vs. EUR -0.5m Evli.
 * Investments: Revenue in Q3 was EUR 1.4m vs. EUR 1.2m Evli. Operating profit
   in Q3 amounted to EUR -3.1m vs. EUR -1.5m Evli.
 * SRV further announced the initiation a recovery programme, with the
   short-term goal of ensuring its operative operating profit and cash flow for
   2020 are positive and returning its operative operating profit for 2021 to
   the level of 2017.



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RAUTE - NO CHANGES TO AN UNCERTAIN MARKET

30.10.2019 - 10.35 | Earnings Flash

Raute’s Q3 EBIT, at EUR 1.7m, fell short of our EUR 2.5m estimate due to delayed
new order development. Raute continues to comment the market situation in a
cautious manner.

Read more

 * Raute’s Q3 revenue stood at EUR 33.7m vs our EUR 35.0m estimate. Services
   revenue was in line with our estimate while project deliveries fell a little
   short of our expectation.
 * Q3 EBIT was EUR 1.7m whereas we expected EUR 2.5m.
 * Order intake amounted to EUR 73m in Q3 vs EUR 42m a year ago. The figure was
   greatly helped by the EUR 58m record order the company had disclosed
   previously.
 * Order book stood at EUR 109m at the end of Q3 vs EUR 121m a year ago.
 * Raute continues to comment the market environment in a cautious manner,
   citing prolonged negotiations and decision making. Services and spare parts
   demand remains stable, indicating good mill capacity utilization rates.
 * Raute reiterates existing guidance, expecting both revenue and operating
   profit to decline compared to previous year.



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EXEL COMPOSITES - PROCEEDING ACCORDING TO PLAN

30.10.2019 - 10.00 | Earnings Flash

Exel Composites reported Q3 figures very much in line with our estimates.
Revenue didn’t quite meet our estimate for the quarter, however operating margin
came in a bit above our estimate.

Read more

 * Q3 revenue was EUR 23.6m vs our EUR 24.7m estimate. Wind energy continued to
   support growth in the Construction & Infrastructure segment.
 * Exel Composites posted EUR 1.7m in Q3 EBIT i.e. in line with our expectation.
 * Operating margin, at 7.0%, was slightly above our 6.8% estimate.
 * Exel says Q3 order intake remained on a good level and grew 9.7% y/y.
 * The company says the cost savings program is proceeding according to plan,
   and the targeted EUR 3m in annual savings will be fully reached in 2020.
 * Exel reiterates FY ’19 outlook, expecting revenue and adjusted operating
   profit to increase compared to previous year.



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ASPO - Q4 NEEDS TO BE STRONG

30.10.2019 - 09.45 | Company update

Aspo’s EUR 6.7m Q3 EBIT fell short of our EUR 7.6m estimate, yet we see the key
segments making progress despite the prolonged series of disappointing earnings.
Macro weakness hit both ESL and Telko in Q3; we see the segments positioned to
improve despite macro headwinds. Our TP is now EUR 9.25 (9.50); we rate Aspo
HOLD (BUY).

Read more

ESL’s cargo volumes disappointed projections

ESL Shipping’s Q3 EBIT of EUR 4.4m is a step forward on the path towards a
materially elevated earnings level. However, we expected the dry bulk carrier to
achieve a EUR 5.3m EBIT for the quarter and as such view the result
disappointing. ESL shipped 4.2 million tonnes of dry cargo in Q3, which
according to our view fell almost 10% short of expected levels. The company
comments the volume miss was especially due to low Nordic steel industry
shipments, although softness was seen also in other cargo categories such as
forest products. Besides the weak Q3 cargo development, the report had a silver
lining as Aspo says the LNG-powered vessels and AtoB@C are performing strong.

Chemicals prices remained soft, pressuring Telko earnings

Telko’s underlying Q3 volumes grew by 8% y/y, yet revenue decreased by 4% as
plastics and chemicals prices extended their slide. The cited 16% y/y and 3% q/q
chemicals price decreases meant Telko’s EUR 74.7m in Q3 revenue and EUR 2.4m
EBIT fell short of our respective EUR 81.5m and EUR 2.7m estimates. This led to
EBIT margin decreasing by more than 100bps y/y. However, such a comparison is
not very meaningful due to the big drop in prices, and we note the 3.2% Q3 EBIT
margin a clear improvement relative to Q2 as prices have continued soft. We view
the figure as evidence that Telko is making progress in improving working
capital management.

Aspo’s key segments were affected by macro weakness

We leave our Q4 estimates for ESL intact despite the earnings miss as we see
certain positive comments (such as good demand for loading operations) balancing
the negatives regarding transportation volume softness. We expect ESL to achieve
EUR 5.5m in Q4 EBIT, thus bringing FY ’19 EBIT to EUR 15.7m. We update our
estimates for Telko to reflect the latest market developments. We now expect
Telko to achieve EUR 2.7m in Q4 EBIT (we previously expected EUR 3.0m) and thus
see the chemical distributor’s FY ’19 EBIT at EUR 9.8m. We note the uncertainty
is elevated concerning Telko’s profitability going forward. On the positive
side, we see the company making progress with its efficiency improvement
program, and thus in an improved position to post better results should markets
stabilize. On the other hand, the market and price outlook stays clouded for
now. Leipurin’s machinery business continued to strain profitability, and Aspo
sees the business line will post an annual loss. A change in schedule for a
significant Russian machinery delivery leads us to cut our Q4 EBIT estimate for
Leipurin to EUR 1.0m from the previous EUR 1.3m. On the positive side, Aspo’s
group administration costs only amounted EUR 0.9m (has been previously hovering
around EUR 1.3m).

We update our TP, rating now HOLD (BUY)

We update our estimates, and now expect Aspo to record EUR 24.0m in FY ’19 EBIT.
We expect ESL to further improve going forward and see Telko improving
materially should markets and plastics and chemicals prices stabilize. Aspo left
its FY ’19 guidance intact, indicating accelerating performance for Q4 and a
minimum of EUR 8.3m in EBIT. Our new TP is EUR 9.25 (9.50), rating now HOLD
(BUY).



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PIHLAJALINNA - TOWARDS PROFITABILITY IMPROVEMENT

30.10.2019 - 09.20 | Preview

Pihlajalinna will report its Q3 earnings on next week’s Tuesday, 5th of
November. Our interest is on how the execution of the efficiency improvement
program is going and what are the impacts for Q3. We have increased our revenue
and earnings estimates by 1-2%, resulting from the cooperation agreement with
Pohjola Insurance. We keep our rating “BUY” with TP of EUR 12 ahead of Q3.

Read more

Changes in service network

Pihlajalinna has faced efficiency problems especially with the new clinics which
has impacted negatively on the company’s profitability. In order to improve
profitability, the company launched an efficiency improvement program in H1 that
aims to achieve annual cost savings of EUR 17m. The planned cost savings are
expected to be realized during 2020. As a result of the efficiency improvement
program the company informed that it will merge units but closures of some of
the loss-making clinics are also possible. We have already seen some actions
taken during Q3 as the company has announced changes (mergers and unit closures)
to its service network at least in Eastern and Southwest Finland.

Cooperation agreement with Pohjola Insurance

Pihlajalinna and Pohjola Insurance signed a cooperation agreement in early
September which is a continuation to the successful pilot project that took
place during the summer. The company estimates that the turnover from the
contract could be some EUR 5-10m per annum, which means 1-2% increase in
revenue. As a result of the agreement we have increased our revenue and earnings
estimates by 1-2% for 2020E-2021E.

We retain “BUY” with TP of EUR 12

We expect Q3’19E revenue to grow by 5.8% to EUR 123m (cons. of EUR 122m) driven
by new clinics and fitness centers. We expect adj. EBIT of EUR 6.8m (cons. of
EUR 5.4m) resulting in EBIT margin of 5.6%. We expect profitability to improve
from last year as some of the costs savings are expected to be shown already in
Q3’19. We keep our rating “BUY” with TP of EUR 12.





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SOLTEQ - MINOR BUMPS, NARRATIVE UNCHANGED

30.10.2019 - 09.00 | Company update

Solteq’s Q3 results fell short of our expectations due to the postponement of
certain customer projects. Net sales were EUR 13.0m (Evli 13.5m) and EBIT EUR
0.3m (Evli 0.7m), with Q3 providing no other surprises. Solteq announced plans
to implement a new structure during 2020, with two business segments, and their
long-term financial targets. We retain our HOLD-rating with a TP of EUR 1.50.

Read more

Estimates miss from project postponements

Solteq’s Q3 results fell short of our as well as company expectations. Revenue
in Q3 grew 1.2% to EUR 13.0m (Evli 13.5m) and EBIT amounted to EUR 0.3m (Evli
0.7m). The third quarter was impacted by the postponement of certain customer
projects to the fourth quarter, with the value of a single postponed order at
more than EUR 0.3m. Aside from the impact of the postponed projects the Q3
results provided no surprises. Solteq noted a continued positive development of
its order backlog.

Plans to change segment structure during 2020

Solteq announced intentions to change its segment structure during 2020 into two
business segments: Solteq Software and Solteq Digital. Solteq Software will
focus on the company’s own products and Solteq Digital on IT expert services.
The long-term financial targets for Software/Digital are: minimum average annual
revenue growth 20%/5% and minimum EBIT-margin 25%/8%. For some perspective, this
could imply Group EBIT-margins well over 10% by 2022.

HOLD with a target price of EUR 1.50

We have lowered our 2019 net sales and EBIT estimates to EUR 58.3m (prev. 58.9m)
and EUR 3.9m (prev. 4.4m), with only minor adjustments to our coming year
estimates. Solteq as an investment case relies on the transition towards own
software and related services and some positive signs were seen from order
inflow during Q3, although not large enough to warrant changes to our views.
With our estimates largely intact we retain our HOLD-rating and target price of
EUR 1.50.



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TOKMANNI - STRONG PERFORMANCE CONTINUES

30.10.2019 - 09.00 | Earnings Flash

Tokmanni’s Q3 revenue increased by 9.9% and was EUR 231.5m vs. EUR 231.3m/228.4m
Evli/consensus. LFL growth continues to be above our estimates at 4.9% vs. 3.0%
our expectation. Tokmanni’s adj. EBIT was EUR 21.9m vs. EUR 19.4m/18.7m
Evli/cons. Gross margin was 35.4% vs. 35.5%/34.4% Evli/cons. Tokmanni updated
its 2019E outlook.

Read more

 * Q3 revenue grew by 9.9% and was EUR 231.5m vs. EUR 231.3m/228.4m
   Evli/consensus.
 * Q3 adj. gross profit was EUR 82.0m (35.4% margin) vs. EUR 82.1.m (35.5 %)
   Evli expectation.
 * Q3 adj. EBITDA was EUR 37.2m vs EUR 34.4m/33.9m Evli/consensus
 * Q3 adj. EBIT was EUR 21.9m (9.5% margin) vs. EUR 19.4m (8.4%) our expectation
   and EUR 18.7m (8.2%) consensus.
 * Q3 eps was EUR 0.27 vs EUR 0.23/0.22 Evli/consensus
 * Revenue was driven by increased customer numbers and customers’ average
   purchases but also due to tax refunds
 * Updated 2019E outlook: Tokmanni expects strong revenue growth for 2019, based
   on the revenue from the new stores acquired and opened in 2018 and new stores
   to be opened in 2019, as well as on good growth in like-for-like revenue.
   Group profitability (comparable EBIT margin) is expected to improve on the
   previous year.



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INNOFACTOR - RETURN TO SLIGHT SALES GROWTH

30.10.2019 - 08.15 | Company update

Innofactor’s Q3 saw a return to net sales growth and better than expected
profitability. The continued solid order backlog development remains a clearly
supportive factor. With order backlog conversion visibility being challenging
due to longer duration of signed contracts, we continue to expect only minor
growth in the near-term, however noting the advantages of the added sales
stability. We retain our BUY-rating with a TP of EUR 0.85 (0.80).

Read more

Profitability above estimates, solid order backlog growth

Innofactor’s Q3 results were better than our expectations. Net sales were in
line with our estimates at EUR 14.0m (Evli 14.1m), showing slight growth of
1.4%, for the first time since Q3/2017. EBITDA and EBIT beat our estimates at
EUR 1.5m (Evli 0.7m) and EUR 0.3m (-0.2m) respectively. Q3 EBIT was slightly
burdened by depreciation adjustments attributable to the period 1-9/2019.
Profitability improved compared with the previous year due to the measures taken
to improve profitability at the end of 2018 and the sales per employee improved
12% from the previous year. The order backlog further grew by 107% y/y to EUR
53.2m.

Continuing to show signs of improvement

Innofactor’s Q3 results in our view continued to show signs of good progress and
also saw the recurring components of the net sales mix increase to just slightly
over 50%. Interpreting the speed of translation of the order backlog to sales
remains challenging due to the increased share of long-term projects, which on
the other hand provides added stability in net sales going forward. We have made
minor revisions to our estimates post-Q3, expecting revenue growth of 3% during
2020-2021. Our 2020-2021 EBITDA estimates are up by around 5%, expecting
profitability to continue to improve.

BUY with a target price of EUR 0.85 (0.80)

Having made minor upwards revisions to our estimates we adjust our target price
to EUR 0.85 (EUR 0.80). On our estimates valuation on purchase price excluded
basis still remains fairly attractive and we retain our BUY-rating.



Open report


ASPO - ESL’S EBIT NOT THERE YET

29.10.2019 - 10.45 | Earnings Flash

Aspo’s Q3 EBIT, at EUR 6.7m, missed our EUR 7.6m estimate by 12% (the consensus
was EUR 7.8m). ESL improved, but still didn’t quite reach the level of EBIT we
were expecting. Nevertheless, Aspo retains its FY ’19 guidance, implying
steepening improvement for Q4.

Read more

 * Aspo booked Q3 revenue at EUR 148.0m, whereas we expected EUR 155.3m.
 * EBIT was EUR 6.7m vs our EUR 7.6m estimate.
 * ESL Shipping recorded EUR 43.4m in Q3 revenue vs our EUR 43.3m expectation.
   The dry bulk carrier posted EUR 4.4m in Q3 EBIT, compared to our EUR 5.3m
   estimate. Aspo says cargo volumes didn’t reach the previously estimated
   levels and this was especially due to steel industry shipments.
 * Telko’s Q3 revenue was EUR 74.7m compared to our EUR 81.5m estimate. The
   chemical distributor achieved EUR 2.4m in Q3 EBIT, while we expected EUR
   2.7m. The resulting 3.2% operating margin was therefore in line with our 3.3%
   estimate.
 * Leipurin’s Q3 revenue stood at EUR 29.9m vs our EUR 30.5m estimate.
   Leipurin’s Q3 EBIT amounted to EUR 0.8m vs our EUR 0.9m expectation. The 2.7%
   operating margin was slightly below our 3.0% expectation.
 * Aspo retains its FY ‘19 operating profit guidance, according to which the
   company sees EUR 24-30m in EBIT. As Aspo booked EUR 15.7m in EBIT for the
   first nine months of ’19, the implication is a minimum of EUR 8.3m EBIT for
   Q4. In our view such a level should still be achievable, although might be a
   close call.



Open report


INNOFACTOR - PROFITABILITY BEATS EXPECTATIONS

29.10.2019 - 09.15 | Earnings Flash

Innofactor’s Q3 results were better than we had expected. The net sales in Q3
amounted to EUR 14.0m (Evli EUR 14.1m), while EBITDA amounted to EUR 1.5m (Evli
EUR 0.7m). Innofactor reiterated its 2019 guidance, with net sales expected to
increase from 2018 and EBITDA to be in between EUR 4.0-6.0m.

Read more

 * Net sales in Q3 were EUR 14.0m (EUR 13.8m in Q3/18), in line with our
   estimates (Evli EUR 14.1m). Net sales in Q3 grew 1.4 % y/y. Sales per
   employee has improved by 12.0% since the previous year.
 * Operating profit in Q3 amounted to EUR 0.3m (EUR -1.2m in Q3/18), above our
   estimates (Evli EUR -0.2m), at a margin of 1.8 %. Profitability has been
   supported by the measures taken during the end of 2018 to improve
   profitability.
 * EBITDA in Q3 was EUR 1.5m (EUR -0.5m in Q3/18), above our estimates (Evli EUR
   0.7m), at an EBITDA-margin of 11.0 %.
 * Order backlog at EUR 53.2m, up 107% y/y, aided by several significant orders
   signed.
 * Guidance reiterated: Innofactor’s net sales in 2019 is estimated to increase
   from 2018 and EBITDA is estimated to grow up to EUR 4.0–6.0 million



Open report


SOLTEQ - EBIT MISS FROM PROJECT POSTPONEMENTS

29.10.2019 - 08.15 | Earnings Flash

Solteq's Q3 results were slightly below our estimates. Net sales in Q3 amounted
to EUR 13.0m (Evli EUR 13.5m), while EBIT amounted to EUR 0.3m (Evli EUR 0.7m).
The operating profit was affected by the postponement of certain customer
projects. Solteq reiterated its guidance, expecting the operating profit to grow
clearly compared to the financial year 2018.

Read more

 * Net sales in Q3 were EUR 13.0m (EUR 12.8m in Q3/18), slightly below our
   estimates (Evli EUR 13.5m). Growth in Q3 amounted to 1.2 % y/y. The revenue
   of overseas subsidiaries increased considerably.
 * Operating profit and adjusted operating profit in Q3 amounted to EUR 0.3m
   (EUR 0.5m in Q3/18), below our estimates (Evli EUR 0.7m), at a margin of 2.2
   %. The operating profit was below company expectations due to the
   postponement of certain customer projects to the fourth quarter.
 * Product development investments during Q3/19 amounted to EUR 0.9m (1-9/2019:
   EUR 3.0m), co’s FY2019 estimate EUR 3.7m.
 * The group’s order intake continued to develop positively during Q3/19 and
   improved considerably compared to Q3/18.
 * Guidance reiterated: Solteq's operating profit is expected to grow clearly
   compared to the financial year 2018
 * Solteq further announced a change in reporting structure and will during 2020
   implement and structure with two segments: Solteq Software and Solteq
   Digital. The average annual sales growth targets for the segments are 20% and
   5% respectively and EBIT-margin targets 25% and 8% respectively.



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VERKKOKAUPPA.COM - HIGH IMPORTANCE OF SALES MIX

28.10.2019 - 09.35 | Company update

Verkkokauppa.com was able to make a turnaround in profitability in Q3 but at the
same time sales growth decreased. Profitability improvement was mainly due to
sales mix and better terms with suppliers. The management had a good control
over the business in Q3. We keep our rating “HOLD” with TP or EUR 3.3.

Read more

Profitability improvement driven by sales mix

In Q3, Verkkokauppa.com focused more on profitability and achieved EBIT of EUR
4.3m vs. EUR 3.7m/3.0m Evli/cons. EBIT margin increased to 3.6% vs. 2.9%/2.4%
Evli/cons driven by higher gross margin (15.7% vs. 14.7% our expectation). Gross
margin improvement was mainly due sales mix (smaller product categories with
higher gross margins) and better terms and conditions from suppliers. The
company’s sales in Q3 were below expectations and the growth (3%) was only
slightly above the market growth of 2.5% (GfK), reflecting the tight and price
driven competition in consumer electronics. The company was also able to keep
good control over the costs (~8% y/y) in Q3.

Support from other product categories

Verkkokauppa.com has sought growth over profitability and as the company has
aggressively competed in a highly competitive consumer electronics market, the
company’s earnings development has been weak. In Q3, the company shifted more
focus towards other categories with higher margins. We see this as a positive
change as the aggressive competition in consumer electronics market is expected
to remain tight, and the growth might become too expensive. After Q3, the
pressure on EBIT has eased, although Q4 is critical for the business as Black
Friday and Christmas are important sales drivers for the company.

“HOLD” with TP EUR 3.3

Verkkokauppa.com updated its outlook for FY19 and expects sales of EUR 500-525m
and EBIT of EUR 11-15m (prev. sales of EUR 500-550m and EBIT of EUR 11-17m). We
expect 19E sales of EUR 513m and EBIT of EUR 12.8m. As we expect the aggressive
competition to continue we have decreased our 20E-21E sales expectation by 3-5%.
On our estimates Verkkokauppa.com trades at 19E-20E EV/EBIT multiple of 9.0x and
7.8 which translates into ~80% discount compared to the peer group. We keep our
rating “HOLD” with TP of EUR 3.3.



Open report


CONSTI - UPGRADE TO BUY

28.10.2019 - 09.30 | Company update

Consti posted good Q3 results, showing clearly positive profitability figures
again after four consecutive weak quarters. Although some open risks still exist
in older projects, the stricter bidding procedures, the new organizational
structure and lack of new significant negative impact projects supports
continued healthy profitability. Going forward the order backlog development
will be of larger interest and the Q3 development has prompted us to expect
sales declines in 2020.

Read more

Clear profitability improvement

Consti’s Q3 saw profitability returning back on a healthier track, with EBIT of
EUR 2.1m (Evli 2.2m). The improvement in profitability (Q3/18: -1.4m) was due to
a clearly smaller impact of old projects in the discontinued housing repair
unit, which however still did have an impact. Net sales growth was better than
we have expected, growing 3.7% y/y to EUR 81.8m (Evli 79.5m). The order backlog
development remained rather weak, amounting to EUR 206.8m in Q3, down -23.6%
y/y. The decline has been affected by stricter bidding procedures, but also to
some degree by a tie-up of resources in larger projects.

Order backlog development speaks for 2020 sales decline

We have lowered our net sales estimates post-Q3, now expecting a sales decline
in 2020 of ~5%. Our current estimate appears rather generous given the order
backlog development. More clarity will be given by order intake during
Q4/19-Q1/20, the quarters in which intake has typically been strongest. In our
view the freeing up of resources, improved profitability and the progression of
the organizational structure development speak for the potential for improving
order intake. Our bottom-line estimates remain largely intact.

BUY (HOLD) with a TP of EUR 5.8 (5.4)

The signs of profitability improvement alleviate some of the uncertainty
pressure, although risks still remain. Nonetheless, valuation still appears
attractive and we raise our target price to EUR 5.8 (5.4) and upgrade to BUY
(HOLD).



Open report


SCANFIL - WE SEE EXTENDED SOLID PERFORMANCE

28.10.2019 - 09.20 | Company update

Scanfil’s 7.9% EBIT margin topped our estimate, and while the result was partly
due to a favorable product mix, we now see the company in shape to post 7% EBIT
margins on a regular basis. Our new TP is EUR 5.00 (4.75), rating BUY.

Read more

HASEC contributed, yet organic growth was also decent

Scanfil’s sales have developed in a stable fashion during the last few years.
The Communication segment was the only one of the five where revenue declined
y/y. The segment supplies telecommunications companies with products such as
base stations, is arguably the most cyclical and challenging of Scanfil
segments, and with LTM revenue of EUR 86m the smallest. Nevertheless, even
Communication sales have been improving since Q2. Consumer Applications and
Energy & Automation grew slightly, and Medtec improved by 14% relative to the
soft comparison period. Most noteworthy was the Industrial segment, which
contributed ca. 80% of the revenue increase, and as such the most significant
segment generates almost a third of Scanfil revenue. Although HASEC added
revenue meaningfully, more than half of the Industrial segment’s growth was
organic.

We see Scanfil able to routinely post 7% EBIT margins

Scanfil says the integration of HASEC is proceeding according to plan. Revenues
attributable to HASEC will be mostly reported under the Industrial and Medtec
segments. Scanfil says the strong 7.9% operating margin was partly due to
favorable product mix, and so we wouldn’t extrapolate this profitability level
too far. However, Scanfil posted an above 7% operating margin also in Q2 with
what the company says was a normal product mix. It’s early to assess prospects
for next year, but in the light of such performance Scanfil’s 7% operating
margin target for ’20 might start to look a tad conservative.

We raise our TP due to continued good performance

We’ve made upward revisions to our EBIT estimates, now expecting Scanfil to
reach 7.0% margin already in ’19 (we previously expected 6.6%). We base our TP
on Scanfil’s historical multiples, which have valued the company at some 7x
EV/EBITDA and 9x EV/EBIT, and thus our updated TP stands at EUR 5.00 (4.75). Our
rating remains BUY. We also note Scanfil’s peer group multiples have gained
sharply during the last couple of months.



Open report


DETECTION TECHNOLOGY - GROWTH STORY UNABATED

28.10.2019 - 09.00 | Company update

Detection Technology delivered a healthy Q3 report, which was broadly in line
with expectations. We remain positive to the investment case and have slightly
adjusted upwards our estimates. Our rating remains BUY with revised target price
of 24.0 euros (prev. 23.5).

Read more

Healthy Q3 with strong growth in SBU and softness in MBU as expected

DT’s Q3 figures came in close to expectations. Net sales amounted to EUR 26.9m
(+9.5% y/y) vs. EUR 27.9m/27.6m Evli/consensus estimates. Q3 EBIT was EUR 5.1m
(19.1% margin) vs. EUR 4.9m/5.2m Evli/cons. SBU sales grew 42.3% y/y to EUR
18.6m (EUR 17.9m Evli) due to strong demand especially in airport applications.
MBU sales decreased by -27.6% y/y to EUR 8.4m (EUR 10m Evli) due to softening of
the medical CT market and the ramp-down of one key MBU customer’s product. R&D
costs amounted to EUR 2.6m or 9.7% of net sales.

Small estimate changes - growth drivers remain strong

Post Q3, we have made only minor upward adjustments to our estimates. Demand for
new standard CT systems for airports has accelerated, starting with Europe and
the US as previously noted. Chinese authorities are also commencing their
standardization of airport CT equipment, which will support security outlook
even further, likely starting 2021 onwards. The slowdown in medical market
remains a question which management does not have a clear answer on, but most
likely this is only temporary. Overall, DT’s growth drivers remain strong,
especially in China where Beijing’s “Made in China 2025” initiative, has led to
double digit growth rates for local Chinese OEM’s that are DT’s clients. Further
support for DT’s future sales growth is provided by DT’s new product launches
such as Aurora, a lower-end and price competitive product family for SBU, and
X-Panel, a CMOS flat panel detector product family for static imaging (e.g.
dental).

The strategy update in Q2 report affirmed that DT is committed to continue
growth - no change to medium-term financial targets

In conjunction with its Q2 result, DT announced its updated strategy until 2025.
The company's new strategic target is to be the growth leader in digital x-ray
imaging detector solutions and a significant player in other technologies and
applications where the company sees good business opportunities. The company
estimates that the market for digital x-ray imaging detector solutions will be
around EUR 3 billion in 2025. DT’s previous strategy until 2020 was based on
being the leader in computed tomography and line-scan x-ray detectors and
solutions. The total market, as per the company's previous strategy, is
estimated to be around EUR 700 million in 2020. Given DT’s current estimated
2019E sales of above 100 MEUR, it’s fair to say that DT is a leader in the scope
of the previous strategy. The new 2025 strategy expands the addressable market
to an estimated EUR 3 billion in 2025, which will provide plenty of growth
opportunity for DT going ahead. DT’s medium-term financial targets remain
unchanged; sales growth at least 15% per annum and operating margin at or above
15% in the medium term.

Valuation remains attractive, we maintain BUY recommendation

On our estimates, DT is trading at ~20% discount on EV/EBIT and P/E multiples
for ’19-20E, which we see as unjustified. Despite the short visibility, we see
investment case attractive due to strong market drivers, especially in China, as
well as DT’s compelling strategy and execution capabilities, which should enable
DT to grow faster than the market and maintain above target level margins. Due
to its proximity to the fastest growing market China and current valuation, DT
could be also become an acquisition target. Our target price translates into an
EV/EBIT multiple of 16.8x and 13.4x on our ‘19E and ‘20E estimates, some 6-20%
under our peer group median, i.e. still leaving upside potential should
investment case materialize as expected. Our rating remains BUY with revised
target price of 24.0 euros (prev. 23.5).

Open report


DETECTION TECHNOLOGY - Q3 RESULT BROADLY IN LINE

25.10.2019 - 09.45 | Earnings Flash

DT’s Q3 net sales at EUR 26.9m (+9.5% y/y) vs. EUR 27.9m/27.6m Evli/consensus
estimates. SBU sales grew +42.3% to EUR 18.6m (EUR 17.9m our expectation) and
MBU sales declined -27.6% to EUR 8.4m (EUR 10.0m our expectation). DT’s Q3 EBIT
came in at EUR 5.1m vs. our estimates of EUR 4.9m (EUR 5.2m cons).

Read more

 * Group level results: Q3 net sales amounted to EUR 26.9m (+9.5% y/y) vs. EUR
   27.9m/27.6m Evli/consensus estimates. Q3 EBIT was EUR 5.1m (19.1% margin) vs.
   EUR 4.9m/5.2m Evli/cons. R&D costs amounted to EUR 2.6m or 9.7% of net sales.
 * Medical Business Unit (MBU) delivered net sales of EUR 8.4m which was below
   our estimate of EUR 10.0m. Net sales of MBU decreased by -27.6% y/y due to
   softening of the medical CT market and the ramp-down of one key MBU
   customer’s product.
 * Security and Industrial Business Unit (SBU) had net sales of EUR 18.6m vs.
   EUR 17.9m Evli estimate. SBU sales grew 42.3% y/y due to strong demand
   especially in airport applications.
 * Outlook update: DT expects growth in net sales, but growth to slow down in Q4
   compared to the previous year. Previous guidance was for Q3.
 * Medium-term business outlook is unchanged: to increase sales by at least 15%
   p.a. and to achieve an EBIT margin at or above 15% in the medium term.

Open report


VAISALA - STRONG PERFORMANCE CONTINUES

25.10.2019 - 09.00 | Company update

Vaisala delivered a strong Q3 on all fronts but surprisingly kept their guidance
intact despite strong YTD performance and good momentum in both W&E and IM.
We’ve updated our estimates for the coming years due to better overall growth
profile and increasing profitability driven by IM’s continuing good performance.
On the back of our raised estimates, we raise our target price to 24.5 euros
(prev. 21) and maintain our HOLD recommendation.

Read more

Strong quarter on all fronts, with contribution from W&E

On the back of a good Q2 report, Vaisala delivered an even better Q3, which
clearly beat expectations. Orders received increased +37% y/y (+20% organic) to
105.1m (vs. 76.8m Q3’18), with orders received as well as sales growth coming
from both business areas and all geographies. Order intake for W&E was +45%
(+27% organic), with mostly mid-sized orders, a positive signal. Q3 net sales
grew +25% to 105.2m (vs. 100.4m Evli / 99.7m cons.). With the help of strong
sales growth (W&E +27%, IM +22%), EBIT was 16.3m (vs. 11m Evli/13m cons), an
15.5% EBIT margin. IM posted good figures, with +22.4% growth (9% organic), an
all-time high quarter, and solid 23.6% EBIT margin (24.7% adj. margin). Biggest
positive contribution was W&E with +27% (+14% organic) sales growth, and EBIT
margin of 13.5% (16% adj. margin).

Outlook unchanged despite strong performance so far

Despite the beat and good figures YTD, Vaisala repeated its FY’19 guidance:
sales between 380–400m, EBIT between 25–35m including 10–12m PPA amortization
and one-offs. Our pre-Q3 estimates were already in the upper end of the
guidance, and now with the result beat we have raised our FY’19E estimates
slightly above the guidance. We also increase by ~2% our estimates for 2020E-21E
due to better growth profile in both business areas. With the acquired
businesses integrated into Vaisala’s sales channel and continued good organic
momentum in both W&E and IM, we see targeted 5% sales growth clearly achievable.
We estimate that IM share of Vaisala’s EBIT in ‘19E and ‘20E will be around
65-67% (vs. 56-57% in ’17-’18), resulting in ~13-17% EBIT growth and EBIT
margins of 10-11% (12-13% adj. for PPA).

Valuation becoming stretched

Vaisala’s share har rallied +70% YTD and +30% since Q2 the report, being now at
an all-time high. On our raised estimates, Vaisala is trading at adj. EV/EBIT
multiples of 20x and 18.5x for ‘19E and ‘20E, a 20-26% premium to our peer group
despite exhibiting a lower growth and profitability profile than our peer group.
However, a high valuation and premium are in our view justified due to the
stable outlook for W&E and especially IM’s highly profitable growth with
possibility of further add-on acquisitions. On the back of our raised estimates,
we raise our target price to 24.5 euros (prev. 21) and maintain our HOLD
recommendation.

Open report


CONSTI - PROFITABILITY BACK AT HEALTHIER LEVELS

25.10.2019 - 08.45 | Earnings Flash

Consti's net sales in Q3 amounted to EUR 81.8m, slightly above our and consensus
estimates (Evli/cons. EUR 79.5m). EBIT amounted to EUR 2.1m, in line with our
estimates and above consensus (Evli/cons. EUR 2.2m/1.6m). The negative impact of
certain projects on profitability was clearly smaller than at the beginning of
the year, contributing to the clear improvement in profitability.

Read more

 * Net sales in Q3 amounted EUR 81.8m (EUR 78.9m in Q3/18), slightly above our
   estimates (Evli EUR 79.5m). Growth in Q3 amounted to 3.7 % y/y. Net sales
   development was still supported by sustained high volumes of large
   comprehensive renovation projects in Q3.
 * Operating profit in Q3 amounted to EUR 2.1m (EUR 0.1m in Q3/18), in line with
   our estimates (Evli EUR 2.2m), at a margin of 2.6 %. The profitability was
   still affected by old projects of the already discontinued housing repair
   unit, but the impact was clearly smaller than at the beginning of the year.
   All business areas were profitable in the third quarter
 * The order backlog in Q3 was EUR 206.4m (EUR 270.0m in Q3/18), down by 23.6 %.
   The order intake amounted to EUR 37.0m, down 5.7% y/y, reflecting the
   company’s more disciplined bidding procedures.
 * Guidance reiterated: The Company estimates that its operating result for 2019
   will improve compared to 2018.



Open report


SCANFIL - STRONG OPERATING MARGIN FOR Q3

25.10.2019 - 08.45 | Earnings Flash

Scanfil’s Q3 revenue, at EUR 152m, missed our EUR 163m estimate by 7%, however
the company still managed to beat our EUR 11.4m operating profit expectation by
posting a figure of EUR 12.1m.

Read more

 * The EUR 152.3m in Q3 revenue represents 16% y/y increase. The 7% q/q growth
   nevertheless didn’t meet our estimate.
 * Operating profit came in strong, the EUR 12.1m figure translating to an
   operating margin of 7.9% (vs 6.7% margin a year ago). Our expectation was for
   a 7.0% margin.
 * Scanfil says roughly half of the EUR 21m y/y increase in revenue was due to
   organic growth, the remainder being attributable to the HASEC acquisition
   closed at the end of Q2.
 * Industrial and Medtec segments performed well, and the strong operating
   profit was partly attributable to favorable product mix but also thanks to
   high utilization rate.
 * Scanfil expects the fourth quarter of 2019 to be the best in terms of sales,
   sees good activity also for the first quarter of next year.
 * Scanfil updates its FY ’19 guidance. The new guidance is EUR 570-590m in
   revenue and EUR 39-41m in operating profit (previously EUR 580-610m and EUR
   39-42m).



Open report


CAPMAN - DOWNGRADE TO HOLD

25.10.2019 - 08.30 | Preview

CapMan will report Q3 results on October 31st. With our expectation of only a
limited impact of carried interest and success fees on the quarter, for group
results remaining on par with H1/19 levels investment returns will need to be at
a good level. In general, the news flow during Q3 implies little out of the
ordinary and as such our interest will mainly be on the development of recently
launched products and fundraising projects. We retain our target price of EUR
1.95 but downgrade to HOLD (BUY) following a share price increase since our
previous update.

Read more

Estimates revisions ahead of Q3

We expect a Q3 revenue of 9.9m (prev. 11.5m) and operating profit of EUR 5.3m
(prev. EUR 7.2m). We have lowered our estimates mainly to reflect lower
expectations for carried interest from newer funds, now mainly from Access
Capital funds, and lower our management fee estimates given no new fund
closings. The first closing of the Buyout XI-fund in 6/2019 will however support
management fees and we expect to see continued growth. Investment returns pose
the biggest uncertainty risk to our estimates and would need to be at a good
level for group results remaining on par with H1/19 levels.

Development of newer products of interest

The news flow during Q3 in our view in general does not imply anything out of
the ordinary during the quarter. We will be looking for more information
regarding on-going fundraising projects and newly launched products as well as
any potential remarks on near-term carried interest outlook from the interim
report.

HOLD (BUY) with a target price of EUR 1.95

We have made minor downward revisions to our estimates ahead of Q3 and retain
our target price of EUR 1.95. With the share price having enjoyed clear
increases since our previous update we downgrade to HOLD (BUY).



Open report


VERKKOKAUPPA.COM - PROFITABILITY IMPROVED IN Q3

25.10.2019 - 08.25 | Earnings Flash

Verkkokauppa.com’s Q3’19 revenue grew by 3% and was EUR 120.6m vs. Evli EUR
126.7m and consensus of EUR 125.8m. Gross profit was EUR 18.9m (15.7% margin)
vs. EUR 18.6m (14.7% margin) Evli view. EBIT was EUR 4.3m vs. EUR 3.7m/3.0m
Evli/cons. The company updated its 2019E guidance and expects revenue of EUR
500-525m and EBIT of EUR 11-15m.

Read more

 * Q3 revenue was EUR 120.6m vs. EUR 126.7m Evli view and EUR 125.8m consensus.
   Sales grew by 3% while market growth was 2.5% (GfK estimate). Revenue growth
   in Q3 was boosted by successful season sales, campaigns and increased
   marketing.
 * Q3 gross profit was EUR 18.9m (15.7% margin) vs. EUR 18.6m (14.7% margin)
   Evli view. The improvement was due to a positive sales mix and better terms
   and conditions from suppliers.
 * Q3 EBIT was EUR 4.3m (3.6% margin) vs. EUR 3.7m (2.9% margin) Evli view and
   EUR 3.0m (2.4% margin) consensus. EBIT improvement was mainly due to higher
   gross margin.
 * Q3 eps was EUR 0.07 vs. EUR 0.06/0.05 Evli/cons.
 * 2019 guidance updated: The company expects 2019E revenue of EUR 500-525m and
   EBIT of EUR 11-15m.
 * The company also decided on a quarterly dividend of EUR 0.051 per share.



Open report


VAISALA - STRONG Q3 RESULT, CLEAR BEAT

24.10.2019 - 15.00 | Earnings Flash

Vaisala delivered a strong Q3 report, with a solid perfomance all around.
Vaisala’s Q3 net sales grew 25% to 105.2 MEUR vs. 100.4 MEUR our expectation and
99.7 MEUR consensus. Q3 reported EBIT was 16.3 MEUR vs. our expectation of 11
MEUR (13 MEUR consensus). Business outlook is unchanged.

Read more

 * Group level results: Q3 net sales grew 25% to 105.2 MEUR vs. 100.4 MEUR our
   expectation and 99.7 MEUR consensus. Q3 EBIT was 16.3 MEUR vs. our
   expectation of 11 MEUR (cons. 13 MEUR). EPS was 0.37 (0.23 Evli, 0.27
   consensus).
 * Gross margin was 55.3% vs. 55.9% last year
 * Orders received was 105.1 MEUR vs. 76.8 MEUR last year. Orders received
   increased by 37% and growth without currency impact and acquisitions was 20%.
 * Weather & Environment (W&E) net sales grew 27% (14% excl. FX and M&A) to 69.1
   MEUR vs. 66.0 MEUR our expectation. EBIT was 9.3 MEUR (5.0 MEUR Evli). Order
   intake growth 45% in Weather and Environment, 27% growth excl. FX and M&A.
 * Industrial Measurements (IM) net sales grew 22% (9% excl FX and M&A) to 36.1
   MEUR vs. 34.5 MEUR our expectation. EBIT was 8.5 MEUR (6 MEUR Evli).
   Industrial Measurements order intake grew by 23%, 9% excl. FX and M&A.
 * Business outlook for 2019 unchanged: 2019 net sales to be in the range of EUR
   380–400 million and operating result (EBIT) to be in the range of EUR 25–35
   million including EUR 10–12 million acquisition related amortization and
   one-off expenses related to a lease contract.





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ETTEPLAN - ACQUISITIONS BOOSTING GROWTH

24.10.2019 - 09.00 | Preview

Etteplan reports Q3 results on October 31st. The guidance revision in Q2 and
steady development track should limit information value from financial figures
of the seasonally slower quarter. Macro uncertainties, however, continue to pose
a risk on demand. The acquisitions made during mid-2019 will bolster growth
while opening some room for estimates deviations. Market outlook comments remain
of key interest but will likely remain limited given the near-term uncertainties
relating to the trade war and Brexit.

Read more

Acquisitions to boost growth in seasonally slower quarter

Etteplan raised its guidance in Q2, largely due to acquisitions made in
mid-2019, expecting revenue and EBIT for 2019 to grow significantly compared to
2018. With the revised guidance and the stable development that Etteplan has
shown, results of the seasonally slower Q3 should not be particularly eventful,
although the recent acquisitions may likely cause some estimates deviation due
to lack of comparison figures. We expect revenue to amount to EUR 59.1m, with a
growth of 12.5%. We expect over 10% growth in all service areas, with
Engineering Solutions in particular boosted by the acquisitions. We expect an
EBITA-margin of 9.3%.

Market outlook comments remain of interest

Our interest in the Q3 results will remain focused on remarks regarding market
outlook and any possible comments on the outlook for 2020, as we are rather
confident in the 2019 guidance being reached. Given the near-term nature of key
uncertainties (Brexit and U.S-China trade war) forward-looking comments will
likely still be limited. Some small positive signs have been seen post-Q3 but
without agreements the uncertainty will likely continue to have an effect on
investment decisions.

HOLD with a target price of EUR 9.6

We have not made changes to our estimates ahead of Q3. We retain our HOLD-rating
and target price of EUR 9.6 intact.



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SSH - HIGH EXPECTATIONS FOR Q4

24.10.2019 - 09.00 | Company update

SSH’s Q3 result missed our expectations and the company now needs a stellar Q4
in order to reach its guidance. SSH is progressing in the right direction, but
the pace is slow due to limited growth investment capacity. We maintain our
estimates and SELL recommendation with target price of 1.10 euros.

Read more

Result miss puts pressure on nailing Q4 to reach guidance

The Q3 result missed our expectations with sales being 3.6m vs our 5.0m
estimate. SSH’s prudent cost control led to lower opex than we had anticipated.
Despite this, EBIT missed our expectations due to lower sales, with Q3 EBIT
being -0.2m vs. 0.7m our estimate. Software fees were 1.3m (2.4m Evli),
professional services were 0.1m (0.3m Evli), and recurring revenue was 2.3m
(2.3m Evli). In order to reach FY’19 guidance, SSH needs some 7m sales in Q4,
which would be an all-time best quarterly result. According to management, sales
pipeline for Q4 is strong and they seem confident that the necessary key deals
will be closed in Q4.

Secures €2M EU Horizon 2020 funding for PrivX program

SSH successfully attained a €2m SME grant from the EU for development and
marketing of PrivX over the next 24 months. Based on our discussion with
management, we note that PrivX is still in a development phase and the new
funding will be instrumental to accelerating PrivX’s roadmap, with most of the
funding going towards R&D. The funding supports our estimates for the coming
years, but we do not make any estimate changes at this point. Management sees
critical applications even in sensitive fields, such as banks and financial
institutions which are important clients to SSH, eventually transitioning to
cloud or private cloud environments, but the transition will be over time and
gradual. Therefore, PrivX is adapted for on-premise, with full SaaS version
being part of the roadmap.

Maintain SELL recommendation with target price of €1.10

Post Q3 result, we have not made any changes to our estimates. Regardless of the
profit warning risk, the underlying question in the investment case is still
regarding growth. We note that, SSH is making progress, but the speed of the
transition is slow due to limited growth investment capacity. On our ’19-20E
estimates, SSH is trading at EV/Sales of 3.1x and 2.7x, which is below the
sector and could prompt SSH to become an acquisition target of larger players
wanting to enter the space or a consolidation play. However, as a standalone
business, we’d like to see stronger growth coming through in the numbers to
justify higher valuation. Our target price implies an EV/Sales multiple of 2.2x
on our ‘20E estimate, broadly in line with Nordic software peers.We maintain our
SELL recommendation and target price of 1.10 euros.



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SSH - Q3 RESULT MISSES OUR EXPECTATIONS, GUIDANCE UNCHANGED

23.10.2019 - 09.20 | Earnings Flash

SSH Q3 result missed our expectations due to lower than expected software fees.
As software fees fluctuate between quarters, one should not read to much of
this. CEO sees reaching guidance still possible and outlook for 2019 is
unchanged; SSH expects double digit percentage growth from software business
(software fees, professional services, and recurring revenue) at comparable
exchange rates.

Read more

 * Q3 net sales were EUR 3.6 million (vs. 5.0m our expectation)
 * Software fees were EUR 1.3 million (2.4m Evli), Professional services were
   EUR 0.1 million (0.3m Evli), and Recurring revenue was EUR 2.3 million (2.3m
   Evli)
 * Q3 operating profit was EUR -0.2 million (vs. 0.7m our expectation)
 * EPS was -0.01 (vs. 0.01 our estimate)
 * Liquid assets were EUR 11.6m (11.2m Q2/19)
 * Business outlook for 2019 unchanged: SSH expects double digit percentage
   growth from software business (software fees, professional services, and
   recurring revenue) at comparable exchange rates
 * CEO comment: “Entering the fourth quarter, our sales pipeline is strong, and
   we maintain our guidance despite the slightly slower than planned growth in
   the first nine months of the year. Achieving our full year target, however,
   requires some key customer wins during Q4.”



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FINNAIR - MARKET OUTLOOK REMAINS VOLATILE

23.10.2019 - 09.15 | Company update

Finnair’s Q3 earnings fell short of expectations. We have cut our estimates for
2019E-2021E after Q3 earnings. Considering the weakening profitability trend and
market outlook uncertainties we do not see valuation being particularly
attractive. We downgrade to “HOLD” with TP of EUR 6.5 (prev. EUR 7.4).

Read more

Profitability weighed down by fuel costs and currencies

Finnair’s Q3 revenue increased by 7.9% and was EUR 870.3m vs. our expectation of
EUR 889.2m and consensus of EUR 871.4m. The revenue was boosted by increased
passenger numbers (11.9% y/y). Especially the European traffic development was
good as well as traffic in North America due to the new Los Angeles route which
was opened last March. Finnair’s traffic from Asia to Europe remained at good
level, whereas demand from Europe to Asia was softer. Capacity (ASK) increased
by 9.5% y/y while RASK decreased by 1.5% y/y. Finnair’s Q3 profitability fell
short of expectations as comparable EBIT decreased by ~14% from last year and
was EUR 100.7m vs. our expectation of EUR 135.4m and consensus of EUR 121.9m.
Profitability was weighed down by fuel costs (incl. hedging), a decline in the
dollar-based discount rate on maintenance reserves and negative exchange rate
effects. Also, softening demand in cargo impacted Finnair’s Q3 earnings.

Global uncertainties increasing risks

We expect the market outlook to remain volatile in the latter half of the year
as the global economies of Finnair’s key markets are slowing down and the
uncertainties surrounding global trade, such as Brexit and US-China trade talks
continue which could have an impact on air travel and cargo demand. We have
already seen some softening in cargo demand especially in Asia and we expect the
market environment to remain challenging. Finnair experienced some lower air
travel demand in Hong Kong in Q3 and we expect this to continue as long as the
disorder continue. We expect Finnair to gain some competitive advantage in short
term, especially in the European routes as Norwegian has cut down its capacity
growth expectations for 2019 (Norwegian expects capacity growth of 0-5% in
2019). Considering the tight competition, we expect the advantages to last only
for a short time.

Guidance for 2019E unchanged

Finnair reiterated its guidance and expects capacity growth of 11%-12% which is
mainly due to the new route to Beijing’s Daxing International Airport which will
be opened in early November. The company expects revenue to grow at a slightly
slower pace than capacity in 2019E. Finnair expects adj. EBIT margin to be
between 4.5-6.0% in 2019, assuming no material changes in fuel prices and
exchange rates. We expect capacity to grow by 11% in 2019E while we expect RPK
growth of 10% and total revenue growth of 8%. Our expectation for 2019E adj.
EBIT margin is at the lower end of the guidance at 4.6%.

Estimates cut – downgrade to “HOLD”

After Q3’19 earnings we have cut our 2019E-2021E estimates. We have lowered our
2019E-2021E revenue expectations by ~1% and cut our EBIT estimate for 2019E by
23% and for 2020E-2021E by 12-17%. We now expect 2019E revenue of EUR 3074m
(prev. EUR 3104m) while our 2019E adj. EBIT expectation is at EUR 140m (prev.
EUR 181m) resulting in EBIT margin of 4.6%. Considering the weakening
profitability trend and market outlook uncertainties we do not see valuation
being particularly attractive. With our new TP of EUR 6.5 (prev. EUR 7.4)
Finnair trades on our estimates at its historical average of NTM EV/EBITDA of
3.5x. After estimates cut we downgrade our rating to “HOLD” (prev. “BUY”).



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SUOMINEN - PROFIT ASCENT MORE ELUSIVE

23.10.2019 - 09.15 | Company update

Suominen’s Q3 EBIT, at EUR 1.1m, missed our EUR 3.8m estimate by a wide mark.
Suominen achieved rather stable volumes compared to our expectations, however
this was achieved at the cost of margins. While the soft results were partly due
to inventory reductions and reorganization costs, we turn slightly more cautious
with respect to margin estimates. Our new TP is EUR 2.25 (2.50), reiterate HOLD.

Read more

Suominen sees nonwovens markets largely stable

Suominen posted EUR 103.4m in Q3 revenue (-1% y/y), close to our EUR 104.4m
estimate. The figure was helped to the tune of 3% by the strengthening of USD
relative to EUR. Volume losses were moderate, the pricing of Suominen’s
nonwovens remaining flat. Suominen’s profitability improvement proved modest
compared to our expectations as declining raw materials prices and significant
inventory reductions during Q3 led to flat pricing. Suominen recorded a 7.4%
gross margin, whereas we expected 9.9%. Suominen says the inventory reductions
had a EUR 0.5m negative effect on profitability i.e. the gross margin would have
amounted to roughly 8% without such reductions. The company says it is now close
to the targeted inventory level. Operating profit was further strained by EUR
0.2m items related to the reorganization of business areas, as Suominen now
reports business for the areas Americas and Europe. FX had a negative EUR 0.6m
effect through raw materials purchases.

We have adjusted our margin estimates downwards

We remain cautious following the report as margin improvement is proving harder
than we expected. In order to reach a 5% operating margin, a level where
corresponding returns on capital could be deemed adequate, Suominen needs to
achieve both improving (or at the minimum flat) volumes and gross margin north
of 10%.

Current valuation reflects modest expectations

While Q3 volumes were better than we expected, we see the softness in margins as
another source of uncertainty, and thus the steepness of Suominen’s ongoing
profit improvement remains clouded. We retain our HOLD rating, our new TP being
EUR 2.25 (2.50).



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SUOMINEN - INVENTORY REDUCTIONS STRAINED PROFIT

22.10.2019 - 13.45 | Earnings Flash

Suominen’s Q3 revenue came close to our expectations. However, gross margin fell
clearly short of our estimate and consequently operating profit improved only
rather modestly in absolute terms relative to the weak comparison period a year
ago. Suominen says cash flow was strong during the quarter due to inventory
reductions, however this had a negative effect on the operating result.

Read more

 * Q3 revenue stood at EUR 103.4m vs our EUR 104.4m estimate. The strengthening
   of USD compared to EUR contributed a positive EUR 2.7m, or 2.6%.
 * Gross profit amounted to EUR 7.7m vs our estimate of EUR 10.3m. The 7.4%
   gross margin was clearly below our 9.9% expectation.
 * Q3 EBIT was EUR 1.1m, whereas we expected EUR 3.8m. In other words, Suominen
   posted a 1.1% operating margin, compared to our 3.6% expectation.
 * Suominen cites significant inventory reductions during the quarter having had
   a positive impact on cash flow but a negative impact on the result.
 * Suominen reiterates its 2019 outlook, expecting flat sales and improving
   operating profit compared to 2018.



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FINNAIR - PROFITABILITY CLEARLY BELOW ESTIMATES

22.10.2019 - 09.25 | Earnings Flash

Finnair’s Q3’19 adj. EBIT was EUR 100.7m vs. our expectation of EUR 135.4m and
consensus of EUR 121.9m. Revenue was EUR 870.3 vs. our expectation of EUR 889.2
and consensus of EUR 871.4m. Finnair reiterated its guidance. The company
expects capacity growth of 11-12% and revenue to grow at a somewhat slower pace
than capacity in 2019. Finnair expects its EBIT% to be between 4.5%-6.0% in
2019.

Read more

 * Q3 revenue was EUR 870m vs. EUR 889m/871m Evli/cons.
 * ASK increased by 9.5% in Q3. RASK decreased by 1.5% y/y.
 * Q3 adj. EBIT was EUR 101m vs. EUR 135m/122m Evli/cons. Profitability was
   negatively impacted by the year-on-year increase in jet fuel price paid
   (incl. hedging), a decline in the dollar-based discount rate on maintenance
   reserves and negative exchange rate effects.
 * Q3 comparable EBITDA was EUR 182m vs. EUR 213m our view.
 * Absolute costs in Q3: Fuel costs were EUR 190m vs. EUR 187m our view. Staff
   costs were EUR 132m vs. EUR 131m our view. All other OPEX combined were EUR
   461m vs. EUR 455m our view.
 * Unit costs: CASK was 6.10 eurocents vs. 5.97 eurocents our view



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TALENOM - UPGRADE TO BUY

22.10.2019 - 09.05 | Company update

Talenom continued to post solid growth and profitability figures in Q3, with
revenue slightly below our optimistic estimates. Talenom gave a guidance for
2020, expecting net sales growth and relative profitability to be in line with
2019, rather similar to our expectations. With the added visibility given by the
guidance we set our sights towards 2020, raising our target price to EUR 37.5
(36.0) and upgrade to BUY (HOLD).

Read more

Gave guidance for 2020

Talenom’s net sales in Q3 amounted to EUR 13.5m (Evli 14.2m) and operating
profit to EUR 2.4m (Evli 2.5m). A decision to focus staffing services on
supporting the core accounting business saw staffing services volumes decline
but its profitability improving, although the impact on group figures is minor.
Discontinuation of annual payroll reports due to the change in income register
will smooth some seasonal variation, with H1 figures expected to gain at the
expense of H2 figures. Talenom further gave a guidance for 2020, expecting net
sales growth and relative profitability to be in line with 2019.

2019 estimates slightly lower, 2020 largely unchanged

We have lowered our 2019 estimate for net sales to 58.1m (prev. 59.9m) to
account for the changes in billing of payroll reports and also seeing some
overoptimism in our year end estimates. We expect Talenom to still be able to
slightly improve relative profitability in 2020 driven by development of the new
bookkeeping production line and scalability. Our 2020-2021 estimates overall
remain largely unchanged, as some of the expected net sales growth was shifted
to 2020. We expect a sales growth of 19% and EBIT-% of 20.7% in 2020.

Upgrade to BUY (HOLD) with a TP of EUR 37.5 (36.0)

With the added visibility given by the guidance for 2020, we are prepared to set
our sights towards 2020. With the narrative of Talenom’s profitable growth story
largely unchanged we raise our target price to EUR 37.5, valuing Talenom at a
target 2020 P/E of ~24x. With our target price increase and share price declines
since our last update we upgrade our rating to BUY.



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DETECTION TECHNOLOGY - EXPECTING GROWTH TO CONTINUE DESPITE MBU HEADWINDS

22.10.2019 - 09.00 | Preview

Detection Technology will report Q3 earnings this Friday, October 25th. We’ll be
looking for commentary regarding the market outlook and possible effects of
trade politics, with special focus on the extent of the slowdown in medical
imaging market growth and the effects of the ramp-down of one of DT’s key
medical customer’s product in H2. Despite some short-term headwinds, we remain
positive to the investment case. Our BUY rating and target price of EUR 23.5
remain intact ahead of Q3.

Read more

Expecting strong growth in SBU, MBU softness in turn

While the security imaging market is experiencing strong demand due to increase
in Chinese investments and increasing CT investments related to new EU and US
airport standards, DT noted in its Q2 report that it expects a temporary
slowdown in medical imaging market growth. DT has guided for Q3 sales to grow
above 10%, with SBU net sales growing and MBU sales decreasing. For Q3, we
estimate SBU growing 37% and MBU declining 13% y/y, with total Q3 net sales
growing 13.6% y/y to 27.9 MEUR (27.6 MEUR cons). Our Q3 EBIT estimate is 4.9
MEUR (5.2 MEUR cons) compared to 5.1 MEUR in Q3’18.

Flat EBIT this year, but growth story continues

For full year 2019E, we expect net sales to grow 14% to 107 MEUR driven by SBU’s
return to growth of 28% after a weaker 2018. We expect ‘19E MBU net sales growth
to decline 7.6% due to the temporary slowdown in customer demand and the
ramp-down of key customer’s product in H2. We expect ‘19E EBIT to be at last
year’s level due to increase in R&D spending, increasing share of SBU sales
affecting the mix, as well as increased pricing competition in both segments.

BUY rating and TP of 23.5 euros maintained ahead of Q3

Despite the short visibility and trade politics being unpredictable, we see
investment case intact due to strong market drivers, especially in China, as
well as DT’s compelling strategy and execution capabilities. Our estimates, as
well as our BUY rating and target price of 23.5 euros remain unchanged ahead of
the Q3 report.

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TOKMANNI - EXPECTING A GOOD QUARTER

22.10.2019 - 08.40 | Preview

Tokmanni will report its Q3 earnings on next week’s Wednesday, October 30th. The
company had a strong H1 and we expect the good momentum to continue throughout
the year. With the 11.2% share price increase, our rating is now “HOLD” (prev.
“BUY”) while our target price remains unchanged at EUR 10.2.

Read more

Market pick up providing tail wind

Tokmanni’s H1’19 was strong as the company was able to increase its revenue
(9.4% y/y) and keep a good EBIT level, particularly in Q2. We expect the good
momentum to continue throughout the year as we enter the seasonally stronger H2.
According to PTY, revenue of department store and hypermarket chains increased
by 5.3% and 7.4% in July-August (3% y/y in H1’19) which indicates good for
Tokmanni in Q3’19. We expect Q3’19E revenue of EUR 231.3m (9.8% y/y, LFL growth
3.0%) vs. EUR 229.6m/cons and EBIT of EUR 19.4m vs. 18.7m/cons. In Q3, Tokmanni
strengthened its existing private label assortment with a new label Pisara
(beauty and cleansing products). The current share of Tokmanni’s own brands as
of sales is ~30% and it plays an important part in Tokmanni’s earnings
improvement.

Efficiency improvements ongoing

Tokmanni targets to increase its store network to cover more than 200 stores.
The company currently has 189 stores and two new stores will be opened during
Q4’19. Tokmanni’s long-term target is to achieve comparable EBIT margin of ~9%
by improving gross margin and reducing the relative share of current opex. Some
results of the efficiency improvement actions were already shown during H1’19
and we expect further gross margin improvements in H2’19E (35.5% H2’19E vs.
34.3% H2’18). We also expect the profitability improvements of the company’s
supply chain to be on the right track, although most of the benefits will be
fully seen in midterm.

“HOLD” (prev. “BUY”) with TP of EUR 10.2

We have kept our estimates intact ahead of Q3 earnings and expect 2019E sales of
EUR 945.9m (8.7% y/y) and EBIT of EUR 67.6m resulting in EBIT margin of 7.1%.
With the share price increase, our rating is now “HOLD” (prev. “BUY”) while our
target price remains unchanged at EUR 10.2.



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TALENOM - SLIGHTLY BELOW EXPECTATIONS

21.10.2019 - 13.55 | Earnings Flash

Talenom’s first quarter results were slightly below our expectations. Net sales
amounted to EUR 13.5m (EUR 14.2m Evli) while the operating profit amounted to
EUR 2.4m (EUR 2.5m Evli). Talenom reiterated its guidance for 2019 and gave a
financial outlook for 2020, expecting growth and relative profitability to be in
line with 2019.

Read more

 * Talenom’s net sales in Q3 amounted to EUR 13.5m (EUR 11.1m in Q3/18),
   slightly below our estimates (Evli EUR 14.2m). Revenue growth in Q3 was 21.1%
   y/y.
 * The operating profit in Q3 was EUR 2.4m (EUR 1.9m in Q3/18), in line with our
   estimates (Evli EUR 2.5m), at a margin of 17.4%.
 * Talenom’s guidance intact: the net sales growth rate is expected to be
   greater than in 2018 and the operating profit margin to improve compared to
   2018
 * Financial outlook 2020: Growth and profitability expected to be in line with
   2019. Our estimates: 2020 revenue growth and EBIT-% 18.0% and 20.7%
   respectively (2019E: 22.5% and 19.6%)
 * Net investments during 1-9/2019 EUR 12.0m compared with 7.1m during 1-9/2018.



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CONSTI - CAREFUL OPTIMISM AMID CONTINUED UNCERTAINTY

21.10.2019 - 09.15 | Preview

Consti will report Q3 earnings on October 25th. We expect to see improved
profitability and a better indication of underlying profitability, although
risks related to the earnings improvements still remain at elevated levels given
the project impact on Q2/19 profitability. The order backlog development is also
of key interest. The negative impact of stricter bidding procedures on the order
backlog poses a considerable risk of sales declines in 2020, in our view,
without improvements in order intake during H2/19.

Read more

Expect profitability improvement but risks still present

During the first half of 2019 Consti’s profitability was materially affected by
performance obligations relating to an individual building purpose modification
project, which at the end of Q2/19 was essentially completed. Although the
project still poses a risk to our estimated profitability improvement in Q3
(Evli EUR 2.2m, Q3/18 EUR -1.4m), of more long-term importance would be the
absence of new, large profitability burdening projects in Q3, which is supported
by the company’s more selective bidding procedures for larger projects.

Order backlog development of interest

A downside of the stricter bidding procedures has been a weaker development of
the order backlog, which at the end of Q2/19 was down 21% y/y, at EUR 227m.
Sales growth in 2019 remains supported by a more rapid order backlog conversion
while a continued weaker order intake during H2/19 would impose a risk of sales
declines in 2020. We expect focus in the second half of 2019 to remain on
continued development of the organizational structure and cost savings.

HOLD with a target price of EUR 5.4 (5.8)

Compared to peer multiples, on our estimates valuation is in no way particularly
challenging, especially when looking at 2020. However, due to the profitability
challenges and the St. George arbitration proceedings the near-term uncertainty
continues to remain high and signs of stabilizing profitability in Q3 would be
needed. We retain our HOLD-rating with a TP of EUR 5.4 (5.8).



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VERKKOKAUPPA.COM - EYES ON COMPETITIVE OUTLOOK

18.10.2019 - 09.20 | Preview

Verkkokauppa.com will report its Q3 earnings on next week’s Friday. As before,
our interest is on how the competition has developed over the last months and
what impact this has had on margins. We have kept our estimates intact and
retain our rating “HOLD” with TP of EUR 3.3 ahead of Q3.

Read more

Profitability pressures expected to continue

Verkkokauppa.com was able to beat the market growth in H1’19 but the growth did
not come for free as the company’s profitability development has been lagging
behind. We expect the continuing growth investments (e.g. increased marketing
expenses) to further hamper Verkkokauppa.com’s profitability in 2019E.
Verkkokauppa.com has guided EBIT of EUR 11-17m in 2019E while our expectation is
at the lower end of the guidance, at EUR 12.2m (EBIT margin of 2.3%). We expect
the competition to remain fierce adding to pressure on profitability. Depending
on Q3 earnings, guidance revision for 2019E EBIT might be needed.

H2 has considerable impact on total year-end sales

We expect the competition in the consumer electronics market has continued tight
and price driven also in Q3’19. However, Verkkokauppa.com’s historical ability
to grow faster than the market and the ongoing growth investments create
positive outlook for the future sales development. H2 is normally stronger for
Verkkokauppa.com as the holiday season and campaigns are likely to boost sales.
Therefore, we expect H2 to have a considerable impact on Verkkokauppa.com’s
total sales in 2019E. We expect H2’19E sales of EUR 295.6m (8.4% y/y).
Verkkokauppa.com’s guidance for FY2019E total sales is EUR 500-550m while our
FY2019E sales expectation is at EUR 519.3m (8.7% y/y).

“HOLD” with TP of EUR 3.3

We have kept our estimates intact ahead of Q3 earnings. We expect Q3’19E sales
of EUR 126.7m and EBIT of EUR 3.7m resulting in EBIT margin of 2.9%. We keep our
rating “HOLD” with TP of EUR 3.3 ahead of Q3.

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FINNAIR - Q3 TRAFFIC CLOSE TO EXPECTATIONS

16.10.2019 - 09.20 | Preview

Finnair will report its Q3 result on next week’s Tuesday. The company’s traffic
data in Q3 was slightly above our estimates but did not provide any major
surprises. Q3 ASK growth was 10% while RPK growth was 12% (Finnair’s 2019E
guidance for capacity growth is 11-12% while revenue is expected to be slightly
below capacity growth). With the share price correction, our rating is now “BUY”
(prev. HOLD) while our target price remains unchanged at EUR 7.4 ahead of Q3.

Read more

No surprises with Q3 traffic data

Finnair’s Q3’19 ASK grew by 10% while we expected ASK growth of 9%. ASK
increased especially in North America as a result of the new Los Angeles route
which was opened in March 2019 and additional flights to San Francisco. ASK
growth in Asia was mainly due to additional frequencies to Hong Kong and Osaka.
Finnair’s RPK growth was 12% in July-September vs. our expectation of 10%.
Revenue increased especially in the European and North American routes where RPK
growth beat ASK growth. Passenger Load Factor increased in all the other market
areas expect in Asia where PLF declined by 2.3%. Global uncertainty in world
trade and the softening of demand and price pressures have lowered expectations
for cargo especially in the Asian market. The Q3 traffic data did not provide
any major surprises thus we have kept our estimates intact.

Ease in jet fuel prices during Q3

Jet fuel prices have eased during Q3’19. In Q3, the average spot price of jet
fuel in USD declined by 4% from Q2. On a y/y basis, the average Q3 USD price was
down by 13%. Similarly, the average spot price in EUR moved down by 3 % q/q and
by 9% on a y/y basis.

“BUY” (prev. HOLD) with TP of EUR 7.4

We have kept our Q3’2019E estimates intact after Q3 traffic information. We
expect Finnair’s Q3’19E revenue to be EUR 889m while we expect Q3’19E EBIT of
EUR 135m resulting in EBIT margin of 15.2%. We expect Finnair’s 2019E total
sales to be EUR 3104m (8.9% y/y) while we expect EBIT of EUR 181m. With the
share price correction, our rating is now “BUY” (prev. “HOLD”) while our target
price remains unchanged at EUR 7.4.



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SUOMINEN - FOCUS ON VOLUMES

16.10.2019 - 09.20 | Preview

Suominen posts Q3 results next week, on Tue, Oct 22. Suominen’s gross margin
improved to 9.3% in Q2, and as raw material prices further slipped during Q3 we
now expect the company’s gross margin at 9.9% for the quarter. However, we
remind Q2 volume losses proved larger than we expected, and thus we retain our
cautious view ahead of the report. Our target price remains EUR 2.50, rating
HOLD.

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Margin improvement story continues to solidify

The prices of key raw materials (i.e. viscose, polyester and pulp) have extended
their soft streak during the recent months. European softwood pulp prices
declined by more than 10% during Q3, therefore bringing the total price decline
for the past year to about 25%. The price trends are roughly similar for viscose
and polyester, whereas polypropylene prices have remained stable since spring.
Assuming stable pricing for Suominen’s nonwovens, we have consequently made
moderate upwards adjustments to our gross margin (and thus EBIT) estimates. We
now expect Q3 gross margin at 9.9% (we previously expected 9.2%). This implies
an EBIT of EUR 3.8m, or 3.6% operating margin (previously estimated at EUR 3.1m
and 3.0%). As the pricing of raw materials registers with a lag of few months,
we expect further improvement for Q4, which brings our new EBIT estimate for FY
’19 to EUR 14m (previously EUR 12m).

Q2 volume losses proved a strain on EBIT

While we are confident regarding additional improvement in gross margin, we note
volume losses pose a risk for our EBIT estimates. Even though Suominen posted Q2
gross margin above our estimate (9.3% vs our 8.7% estimate), the 15% volume
decline in Q2 led to EBIT falling short of our estimate by almost 20%. We expect
volume losses to have amounted to 9% in Q3.

In our view valuation is neutral given the uncertainty

Suominen is currently achieving a turnaround in earnings, and trades ca. 20%
below peer group multiples on our estimates for ’20 and ’21. Nevertheless, we
see the uncertainty due to volume losses posing a risk for our earnings
estimates. We therefore reiterate our EUR 2.50 TP and HOLD rating ahead of the
report.



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MARIMEKKO - RAISES EARNINGS OUTLOOK FOR FY19E

15.10.2019 - 09.15 | Company update

Marimekko updated its 2019E guidance yesterday. The company expects 2019E
comparable operating profit to be higher than in the previous year,
approximately of EUR 17m. The company reiterated its guidance for FY19E revenue;
revenue is expected to be higher than in the previous year. Marimekko will
report its Q3 result on November 6th. We retain our rating HOLD with TP of EUR
30.

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Updated guidance for 2019E

Marimekko raised its earnings estimates for FY19E and reiterated its FY19E
revenue guidance. According to the updated outlook, Marimekko expects FY19E
comparable operating profit to be higher than in the previous year, amounting to
approximately EUR 17 million (previous guidance; comparable operating profit is
expected to amount maximum of EUR 15 million). This is mainly due to stronger
than estimated sales growth and improved sales outlook in Finland but also
better than estimated trend in relative gross margin. Marimekko did not provide
much information other than that, so we wait for more color in the Q3 report.

We expect increase in sales in H2’19

We expect Marimekko’s H2’19 net sales to be EUR 69.4 million (16.4% y/y) while
we expect H2’19 adj. EBIT to be EUR 10.5 million (H2’18 adj. EBIT of EUR 7.9m),
resulting in EBIT margin of 15.1% (H2’18 EBIT margin of 13.3%). We expect sales
and profitability to increase especially in Finland and APAC due to stronger
sales growth in Finland and higher license revenue from APAC. We also expect the
holiday season in the last quarter to have a considerable impact on Marimekko’s
total sales in 2019E.

We maintain “HOLD” with TP of EUR 30

We have updated our estimates after the updated guidance. We have increased our
2019E revenue expectation and expect 2019E sales to total EUR 125.6m (previous:
EUR 123.4m). We expect 2019E adj. EBIT of EUR 16.8m (previous: EUR 14.7m)
resulting in EBIT margin of 13.4% We maintain our rating “HOLD” with TP of EUR
30.



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GOFORE - GUIDANCE REVISION FROM WEAKER Q3

14.10.2019 - 09.15 | Company update

Gofore released its Q3 business review on October 11th and revised it guidance
for FY2019 net sales, expected to be in between EUR 64-67m (prev. EUR 67-72m).
Q3 was burdened by lower sales in July and August, with net sales growth of 16%
y/y, and the EBITA-margin as a result lower than in the comparison period
(Q3/19: 9.2%, Q3/18: 13.3%). The near-term demand outlook has improved while
uncertainty going forward still remains at elevated levels. We retain our
HOLD-rating and target price of EUR 8.0.

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Weaker Q3 sales and lowered sales guidance

Gofore’s group net sales in Q3 amounted to EUR 13.3m, up 16 % y/y. Demand during
July and August was affected by a delay in project deliveries, as some already
signed projects did not pick-up as expected. The lower billing rate saw
profitability fall from previous year levels, with a Q3/19 EBITA-margin of 9.2%
(Q3/18: 13.3%). Gofore also noted that its UK business sales have decreased
considerably during the year, possibly due to uncertainty related to Brexit, and
the UK business being clearly loss-making. Gofore further revised its FY2019 net
sales guidance to EUR 64-67m (prev. 67-72m) based on the weaker Q3 figures.

Demand recovery to aid end of year figures

We have revised our 2019 sales and EBITA-margin estimates to EUR 65.3m (prev.
67.8m) and 12.6% (prev. 13.6%) based on the Q3/19 figures. The revised guidance
range indicates growth of some 18-40% during Q4/19, with the upper range
corresponding to monthly levels seen during H1/19. The near-term demand outlook
has improved compared with the earlier part of Q3/19, while the volatility in
demand seen during 2019 keeps the uncertainty regarding the coming years
development at higher levels.

HOLD with a target price of EUR 8.0

On our estimates valuation remains slightly above peers. Gofore continues to be
among the top performers based on sales growth and profitability while the
increased demand uncertainty remains a cautionary factor. With valuation in our
view still quite fair, we retain our HOLD rating and target price of EUR 8.0.



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ASPO - BACKED BY ESL, LIFTED FURTHER BY TELKO

11.10.2019 - 09.30 | Company report

Aspo’s H1’19 results were subdued as ESL was hampered by a plethora of one-off
problems, while Telko and Leipurin also posted weaker profits. We expect Aspo’s
results will improve sharply from H2’19 onwards, particularly due to ESL as the
dry bulk carrier’s recent investments start to contribute. We also expect
gradual improvement for Telko and Leipurin as both segments are taking actions
to address profitability. Our TP is now EUR 9.5 (9.0) due to higher peer
multiples raising SOTP valuation; our rating remains BUY.

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We expect ESL to carry Aspo to materially higher results

We estimate ESL’s H2’19 EBIT to almost double compared to H1’19 as the
malfunctioning cranes have been fixed, the market for Supramaxes has improved,
and acute issues with Baltic Sea steel industry and ports have subsided. For FY
’19 we expect ESL to record EUR 16.6m in EBIT. We estimate the figure to further
improve to EUR 23.6m in 2020 as synergies with AtoB@C fully materialize. In our
view ESL will remain the cornerstone of Aspo as the segment contributes ca. 60%
of the conglomerate’s value.

Telko and Leipurin have plenty of improvement potential

Telko’s operating margin weakened in H1’19 as the distributor carried high
inventories and plastics and chemicals prices declined. Although market outlook
remains soft we expect profitability to have bottomed out as the company is
taking measures to boost efficiency. In our view Telko could prove a source of
further upside for Aspo shareholders as there’s good potential for improved
profitability. The situation for Leipurin is not unlike that for Telko; Leipurin
is developing its operations and H2’19 results are bound to improve due to
machinery deliveries. We expect Telko and Leipurin to post a combined EBIT at a
level EUR 5.3m higher in 2020 compared to 2019.

Value is anchored to ESL, yet Telko could move the needle

Our updated TP is EUR 9.5 (9.0) as peer multiples have increased, boosting SOTP.
Our estimates for next year and beyond do not fully capture the profitability
potential of Telko and Leipurin, which could drive further upside beyond ESL.
Our rating is BUY.



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SRV - LOWERS PROFIT GUIDANCE

11.10.2019 - 09.15 | Company update

SRV issued a profit warning on October 10th, estimating that its operative
operating profit will be at a loss due to impairments relating to its
investments in Russia and decreasing margins in certain projects. We had
expected profitability to improve towards the end of 2019 with the completion of
a significant number of developer-contracting housing units and the new guidance
puts the operative operating profit well below our estimates (Evli EUR 14.7m).

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2019 operative operating profit to be negative

SRV downgraded its operative operating guidance for 2019, estimating that its
operative operating profit will be at a loss due to impairments relating to its
investments in Russia and decreasing margins in certain projects. Previous
guidance put the operative operating profit between EUR 0-27m. SRV’s estimate
for completed developer-contracting housing units in 2019 remains unchanged, at
809 units. We had estimated a 2019 operative operating profit of EUR 14.7m,
based on the expected large number of completions in Q4/2019.

We expect a 2019 EUR -6.3m operative operating profit

Based on the limited information given we have adjusted our H2/19 operative
operating profit estimate for the Construction segment by EUR -11m to account
for the weaker margins and costs related to the delay of REDI Majakka. We have
further included a EUR -10m impairment charge to Q4/19 relating to the Russian
investments, which on a speculative note may relate to the on-going Pearl Plaza
negotiations. Our revised operative operating profit for 2019 is at EUR -6.3m.
We do not expect a dividend in 2019/2020, with our other estimates unchanged
until further clarity from the Q3 results on October 31st.

HOLD with a target price of EUR 1.40 (1.80)

Following the vague guidance revision, uncertainty regarding our end of year
estimates is significant, but 2019 will nonetheless be another weak year. We
adjust our target price to EUR 1.40 (1.80) following the estimates revisions and
retain our HOLD-rating.



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RAUTE - A RECORD LARGE ORDER FOR NEXT YEAR

02.10.2019 - 09.30 | Company update

Raute received a big EUR 58m order to be delivered in 2020, alleviating some of
the short-term demand concerns that have clouded the outlook recently. We raise
our estimates from 2020 onwards but retain our HOLD rating for now as we wait
for more signs of improvement in demand outlook. Our new target price is EUR
25.0 (23.5).

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New order more than twice the size of a usual large order

Raute will deliver all machinery and equipment for a greenfield plywood mill to
be built in the Kostroma region of Russia. The order, commissioned by Segezha
Group, totals EUR 58m and is the largest single order in Raute’s history, a
demonstration of Raute’s technological competitiveness and core competence in
delivering entire production lines. This is not Raute’s first project delivery
for the Russian forestry group. The new project will be delivered during 2020
and the 125,000m3 mill is scheduled to commence operations in the summer of
2021.

We raise our estimates as visibility has improved

Raute says the order will have no impact on 2019 outlook as the company
continues to expect both revenue and EBIT to decrease compared to the record
year 2018. The EUR 58m new order is very significant in size considering the
project value matches Raute’s whole order intake for H1’19 (of which EUR 29m was
attributable to project deliveries and the other EUR 29m to services). In other
words, while the order is good news for Raute it also highlights the company’s
inherent project volume volatility. Raute’s order book, which stood at EUR 72m
at the end of Q2’19, covers an exceptionally long period of time as a
significant share of deliveries is scheduled for 2020 (and some even for 2021).
We adjust our estimates upwards from 2020 onwards. We now expect EUR 149m in
‘20e revenue (previously EUR 128m) and ‘20e EBIT of EUR 11m (previously EUR 9m).

New target price EUR 25.0 (23.5), HOLD rating maintained

Raute’s current EV/EBITDA and EV/EBIT multiples, approximately 6x and 8x
respectively, place the company’s valuation on neutral ground in terms of
historical averages. We raise our TP to EUR 25.0 (23.5) on the back of our
updated estimates yet maintain HOLD rating for now as we wait for more signs of
improvement in demand outlook.



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NEXT GAMES - FINAL LEG OF TURNAROUND COMMENCING

01.10.2019 - 00.00 | Company report

Next Games is through the initiated rights offering commencing the final leg of
its turnaround project. Future growth initiatives remain of key importance given
the declining revenue trend from live games. We expect growth to accelerate
during 2020-2021 following new game launches and profitability to improve but
remain at weaker levels.

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Rights offering to finance growth opportunities

Next Games has faced challenges following the launch of Our World, in which the
company invested heavily during launch, having failed to meet expectations and
seeing declines in the user base due to technical difficulties. As a result the
company initiated a turnaround project in late 2018. Q2/2019 saw the company
reach targeted cost savings levels and as such also improved profitability.
Following changes to its operating model Next Games now has nine projects or
prototypes under development in addition to Blade Runner Nexus in soft launch
and the Stranger Things -game in pre-production. The company is now seeking to
move to the final leg of its turnaround project by securing financing for growth
initiatives through an EUR 8m rights offering.

Growth dependent on new launches in the coming years

Having seen a declining trend in gross bookings in its two live games, growth in
the coming years is dependent on successful new games launches, with Next Games
target to launch at least one new game per year. We expect sales growth to
accelerate in 2020 with the expected launch of Blade Runner Nexus in late 2019
and the Stranger Things -game in 2020. The new game launches are expected to
impact on profitability, and we expect the EBIT-margin to remain negative until
2021.

HOLD with a target price of EUR 1.0 (1.5)

We adjust our target price to EUR 1.0 (1.5) following the expected dilution from
the rights offering, with our minor estimates revisions not having a significant
impact. Valuation still quite justifiably emphasizes near-term uncertainties and
we consider current valuation levels reasonable.



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CIBUS NORDIC - STILL MORE YIELD LEFT TO BITE

02.09.2019 - 09.30 | Company update

Cibus’ Q2 rental income of EUR 12.6m was a little soft (we expected EUR 12.8m)
due to a change in tenancy, while EUR 0.3m in accruals also had a negative
impact. However, the fundamentals remain as before, strategy is on track and
there is further room for yield compression. We update our TP to SEK 135 (125);
rating remains HOLD.

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Cibus is well ahead of its EUR 50m annual acquisition goal

Cibus completed the acquisition of five properties during the quarter (the total
number now stands at 139), meaning Cibus has already acquired EUR 45m worth of
properties this year, thus bringing the portfolio gross asset value to EUR 862m.
The net debt LTV ratio increased to 59.0% during the quarter, up from the
previous 56.7%, however Cibus’ average interest rate on borrowings declined by
ca. 30bps, to 2.6%. Adjusted EPRA NAV increased slightly to EUR 11.3 (11.2) per
share.

Occupancy temporarily lowish due to a tenancy change

Cibus reported a little soft Q2 net rental income due to a change in tenancy as
occupancy rate dropped to 94.3% (has typically been above 95%). Another one-off
was a EUR 0.3m accruals charge, and thus net rental income stood at EUR 11.5m vs
our EUR 12.0m estimate. The most important forward-looking metric, namely net
rental income less central administration costs, increased by EUR 2.0m to EUR
46.2m. We see the current portfolio posting EUR 46.7m next year, which
translates to a 5.2% yield.

Cibus continues to grow the portfolio, attracts new investors

So far this year Cibus has announced EUR 45m in Finnish daily-goods property
acquisitions, meaning the company is now well ahead of its stated annual EUR 50m
investment target for the year. The portfolio is now worth EUR 862m in terms of
gross asset value, comprising of 139 properties located around Finland and with
a total lettable area of some 500,000 sqm. Central portfolio metrics such as
occupancy rate (94.3%), weighted average unexpired lease term (5.0 years) and
net debt LTV ratio (59.0%) have remained steady. The tenant mix stays anchored
to Kesko (54%) and Tokmanni (28%), with S-Group (7%) and others (11%) making up
the rest. During the last twelve months the company has been able to improve its
cost of borrowing by around 60bps as the interest-bearing liabilities’ average
interest rate now stands at ca. 2.6%.

Cibus has also continued developing its own organization with the help of few
recruits, and in the long-term may eventually enter the Swedish property market.
Funds managed by Sirius Capital Partners sold three quarters of their stake in
May, which we see as a positive development as it widens Cibus’ institutional
investor base and so makes it easier to arrange e.g. an equity issue in
connection with a major portfolio acquisition.

Cibus trades above GAV and NAV, but yield still attractive

Cibus’ shares have rerated during the last year, now trading at a premium on
book value. In early 2019 Cibus was trading at ca. 0.95x EV/GAV and 0.85x P/NAV,
whereas the respective multiples now stand at 1.05x and 1.10x. We estimate the
corresponding yield compression at 75bps. Meanwhile major Nordic Real Estate
companies’ yields have also compressed, and Cibus’ absolute yield spread has
stayed largely unchanged at ca. 100bps. The high underlying portfolio yield, as
well as the resulting 7% dividend yield (itself a function of the property
yield, leverage and dividend payout ratio), means Cibus’ shares have further
potential. We update our TP to SEK 135 (125), valuing Cibus at a 1.10x P/NAV
multiple (1.05x EV/GAV). Our rating stays HOLD.



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CIBUS NORDIC - EXPENSES HIGHER THAN EXPECTED

30.08.2019 - 10.45 | Earnings Flash

Cibus’ Q2 rental income stood at EUR 12.6m, in line with expectations. Property
expenses were slightly higher than we expected, and thus net rental income, at
EUR 11.5m, was less than our EUR 12.0m estimate. Central operating metrics
remained largely unchanged.

Read more

 * Q2 rental income amounted to EUR 12.6m vs our EUR 12.8m estimate.
 * Net rental income was EUR 11.5m, whereas we expected EUR 12.0m. Property
   expenses were some EUR 300k higher than we expected. Annual net rental income
   capacity now stands EUR 49.9m from Q3 onwards (Cibus previously estimated the
   figure at EUR 49.3m).
 * Operating income (net rental income minus central administration costs) stood
   at EUR 10.5m vs our EUR 11.0m projection.
 * The portfolio’s GAV amounted to EUR 862m (a total of 139 properties), while
   EPRA NAV rose to EUR 11.3 (previously EUR 11.2) per share.
 * Net debt LTV ratio rose to 59.0% (56.7% in Q1’19).
 * Occupancy rate was 94.3% (95.1% in Q1’19).

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FELLOW FINANCE - GROWTH PICK-UP TAKING TIME

26.08.2019 - 09.15 | Company update

Fellow Finance’s H1 saw a weaker loan volume development, largely due to an
increased competition within domestic consumer loans. Larger investments into
international growth are expected to be seen in 2020, with some upfront
investments to show in 2019, and we expect to see weaker margins but a more
rapid growth going into 2020. We retain our HOLD-rating with a TP of EUR 5.0
(5.5)

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Increased competition affecting domestic consumer loans

Fellow Finance’s H1/19 figures in general were quite as expected, with revenue
at EUR 7.2m (Evli EUR 7.0m) and the adj. EBIT at EUR 1.4m (Evli EUR 1.3m).
Profitability was affected by the bond issue and upfront growth investments.
Overall facilitated loan volumes were below expectations, with consumer loans in
Finland showing a weaker development due to an increase in competition from
other lenders.

Expect more aggressive growth moves in 2020

Based on management comments we expect 2019 to remain a ramp-up year for the
international operations, building up a foundation for accelerating growth. We
had expected some more aggressive moves already in 2019 but now expect to see
this happening in 2020. As such we have lowered our profitability estimates for
2020 due to expected increases in marketing investments while increasing our
coming year growth estimates. Following recent recruitments, we expect to see
larger moves in Poland in the near term, followed by Germany.

HOLD with a TP of EUR 5.0 (5.5)

We view Fellow Finance at an elevated level of uncertainty following the lowered
guidance pre-H1 and the weaker the expected loan volume development. We consider
the indicated stronger growth investments towards 2020 a positive, as the weaker
loan volume development has mostly been due to domestic consumer loan
development, contrary to domestic business financing and international
financing, were we have expected the bulk of coming years’ growth. Due to
estimates revisions we lower our TP to EUR 5.0 (5.5), retaining our HOLD-rating.



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FELLOW FINANCE - GROWTH SOME 30% IN H1

23.08.2019 - 09.00 | Earnings Flash

Fellow Finance’s H1/2019 revenue and EBIT were quite in line with expectations,
with revenue of EUR 7.2m (Evli EUR 7.0m) and an EBIT of EUR 1.4m (Evli EUR
1.3m). EPS was below our estimates at EUR 0.06 (adj. EPS EUR 0.07, Evli EUR
0.09). Fellow Finance expects revenue in 2019 to grow by over 20 % and the
adjusted EBIT to be lower than in 2018 (updated 16.8.2019).

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 * Revenue in H1 amounted to EUR 7.2m (EUR 5.6m in H1/18), quite in line with
   our estimates (Evli EUR 7.0m). Growth in H1 amounted to 29.6%.
 * Fellow Finance facilitated loans during H1 for a total of EUR 109m (EUR 76.5m
   in H1/18).
 * EBIT in H1 amounted to EUR 1.4m (EUR 1.7m in H1/18), in line with our
   estimates (Evli EUR 1.3m).
 * EPS in H1 amounted to EUR 0.06 per share (EUR 0.14 in H1/18), below our
   estimate of EUR 0.09. The for listing expenses adjusted EPS amounted to EUR
   0.07.
 * Guidance: Fellow Finance expects revenue in 2019 to grow by over 20 % and the
   adjusted EBIT to be lower than in 2018 (updated 16.8.2019).
 * Fellow Finance will during the end of the year continue to expand to new
   markets.



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MARIMEKKO - GROWTH STRATEGY EXPECTED TO SUCCEED

19.08.2019 - 09.15 | Company update

Marimekko’s H1 has been impressive and we expect the good momentum to continue
throughout the year. The company has been able to target broader audience and
license sales in APAC is expected to increase in H2, which should support
revenue growth. We keep “HOLD” with TP of EUR 30 (26).

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Strong Q2 earnings

Marimekko’s Q2 revenue was in line with expectations at EUR 29.1m vs. EUR
31.1m/29.8m Evli/cons. Revenue growth was good especially in Finland where
comparable retail sales increased by 17% y/y and totaled EUR 16.8m vs. 16.7m
Evli view. Also, growth in wholesale sales in EMEA region was good. Wholesale
sales in Finland decreased by 18% y/y as there were large non-recurring
wholesale deliveries in Q2’18. International revenue was EUR 12.4m vs. EUR 14.4m
Evli view. Adj. EBIT was EUR 3.7m vs. EUR 3.5m/3.2m Evli/cons. Earnings were
supported by increased sales and gross margin improvements, which were impacted
by moderate sale campaigns and increased retail sales.

Broader customer segments support growth

Marimekko had a strong H1 as the company’s revenue grew by ~8% and adj. EBIT by
~46 % y/y. We expect the good momentum to continue as the company has been able
to target wider customer segments and seeks to improve growth through online
store, partner-led retail in Asia as well as by increasing the sales/m2 in its
physical stores. Marimekko has approximately 150 stores in 15 countries, of
which most of the stores are outside of Finland and the company aims to open 10
new shops or shop-in-shops in 2019. In APAC, Japan is the largest market area
but the company sees growth opportunities in other countries as well. Net sales
from APAC represented 21% of total sales in H1’19. During the last couple of
years, the company’s combined revenue from APAC has been flat but the company
has indicated that the revenue from APAC is likely to increase in the future as
the strategy is to appeal to broader target audience globally. We expect APAC’s
retail revenue in 2019E to increase by ~20% y/y and wholesale sales growth of
~13% y/y. In Q2, Marimekko updated its guidance for 2019, mainly as it expects
higher licensing income in APAC during H2’19. The company reiterated its
guidance for 2019E revenue and expects the revenue to be higher than in 2018 and
expects operating profit to be higher than in 2018, approximately maximum of EUR
15m (previous: operating profit expected to be in the same level as in 2018).
The company targets 10% y/y revenue growth and EBIT% of 15% in the long-term. We
expect 2019E revenue of EUR 123m (prev. EUR 125m) and EBIT of EUR 15m (prev. EUR
14m), resulting in EBIT% of 11.9%.

We retain ”HOLD” with TP of EUR 30 (prev. EUR 26)

We have kept our underlying estimates largely intact but increased our 20E-21E
estimates as we expect broader target audience and improved gross margin levels
to support growth. We expect the company’s revenue to grow ~8% y/y in 20E-21E
and EBIT growth of ~20% y/y. On our estimates, Marimekko trades at 19E-20E
EV/EBITDA multiple of 9.7x and 8.6x which translates into ~50% premium compared
to the premium goods peer group. We see Marimekko’s current valuation as
stretched, but as we expect the company to transition towards new customer
segments and markets, which should accelerate growth and enable the company to
reach a new profitability level, we accept the premium. Our EBIT% estimates are
already shifting towards the luxury goods peer group which also justifies higher
multiples. We keep our rating “HOLD” with new TP of EUR 30 (prev. EUR 26).

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ENDOMINES - EYEING PRODUCTION START IN Q3

19.08.2019 - 09.00 | Company update

Endomines did not produce any gold concentrate in Q2, as expected. Furthermore,
no production guidance was given. We have revised our 2019 production estimate
slightly downwards to ~3,000oz, expecting a smaller production already in Q3. We
revise our TP to SEK 4.8 (4.4) following NPV adjustments, retaining our
SELL-rating.

Read more

No production in Q2, production guidance yet to be given

Endomines’ Q2 results were uneventful, as no gold concentrate production
occurred during the quarter, as expected, and no new production guidance was
given. Costs were limited compared to our expectations and EBITDA as such was
SEK -9.3m compared to our estimate of SEK -15.0m. Ramp-up at Friday appears to
be progressing rather well given the delays experienced so far. Based on the
information given in Q2 we have, however, adjusted our Q3 production estimates
further downwards, and now expect 2019 production of ~3,000oz.

Friday ramp-up key in the near-term

Endomines long-term plan is to produce over 40,000oz by the end of 2023, with
near-term production relying on the Friday mine followed by the Rescue ore body
(production in 2021). With essentially no production currently on-going the
successful ramp-up of Friday remains vital to secure cash flows for on-going
operations, although the recently completed rights issue substantially
alleviated near-term financing concerns.

SELL with a TP of SEK 4.8 (4.4)

Our NPV values Endomines at SEK 4.8 per share, up from SEK 4.4 since our
previous update following net debt adjustments based on the Q2 balance sheet and
expected rights issue proceeds. We assume a 1,400USD/oz LT gold price,
reflecting analyst estimates and the nature of the recent gold price increases.
Drivers for long-term gold price through supply/demand remain in place but
near-term gold price development remains uncertain following the more short-term
macro event driven price increases.



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FELLOW FINANCE - GUIDANCE FOR 2019 LOWERED

19.08.2019 - 07.45 | Company update

Fellow Finance lowered its 2019 guidance due to weaker intermediated loan volume
development and a more aggressive execution of its international expansion
strategy. We have lowered our 2019 adj. EBIT estimate down by some 40%. On our
lowered estimates and given the increased uncertainty we downgrade to HOLD (BUY)
with a target price of EUR 5.5 (9.0).

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Lowered guidance for sales and profitability

Fellow Finance gave an updated guidance, according to which the 2019 revenue is
expected to grow by over 20% (prev. over 30%) while the adjusted operating
profit is expected to be lower than in (prev. grow from) 2018. The guidance
revision is mainly due to a lower than expected intermediated loan volume and a
more aggressive than international expansion strategy. Based on monthly figures
the intermediated loans saw good growth during early to mid H1, with the summer
months having exhibited a growth pace decline.

Our 2019 adj. EBIT estimate lowered by some 40%

For Fellow Finance to achieve the new guidance a pick-up in intermediated loan
volume growth will be needed in H2/19. The more aggressive execution of the
international expansion strategy should support volume growth. On our revised
estimates we expect a 25% y/y growth in intermediated loan volumes during H2/19
and 2019 sales to grow 22% to EUR 14.6m (prev. 16.5m). The guidance given for
operating profit leaves room for notable uncertainty regarding profitability
levels. We estimate a 2019 adj. operating profit of EUR 2.6m (prev. 4.5m), down
from EUR 3.5m in 2018, based on the expected lower revenue while keeping our
cost structure estimates essentially unchanged.

HOLD (BUY) with a target price of EUR 5.5 (9.0)

On our revised estimates valuation does not appear particularly attractive.
Fellow Finance will post H1/19 results on August the 23rd, which should provide
much-needed clarity on earnings development and outlook. On our clearly lower
estimates and increased uncertainty we downgrade to hold ahead of the H1 results
with a target price of EUR 5.5 (9.0).



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ENDOMINES - PRODUCTION GUIDANCE UPDATE NOT YET GIVEN

16.08.2019 - 10.00 | Earnings Flash

Endomines’ revenue and EBITDA in Q2 amounted to SEK 1.4m (Evli 0.0m) and SEK
–9.3m (Evli -15.0m) respectively. There was no gold concentrate production
during Q2. Endomines did not give an updated production guidance for Q2.

Read more

 * Endomines did not produce any gold concentrate in Q2.
 * Revenue amounted to SEK 1.4m (42.1m in Q2/18), while we had not estimated any
   revenue for Q2. The Q2 revenue derived from clean-up gold from the Pampalo
   mill.
 * EBITDA in Q2 was at SEK -9.3m, above our estimate or SEK -15.0m.
 * Construction of the Mill was ongoing and developmental drifting at the Friday
   Mine was the focus for Q2.
 * Endomines did not give an updated production guidance for 2019. A production
   plan is being worked on based on the results of the drilling campaign and
   test mining as well as the commissioning of the plant and an updated guidance
   will be given once completed.



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TAALERI - SUPPORTIVE FEE OUTLOOK

16.08.2019 - 09.40 | Company update

Taaleri’s H1 earnings were due to the previously given guidance quite
unsurprising and segment development corresponded roughly to expectations. A
better than anticipated AUM development supports the fee outlook going forward,
with 2019 earnings still expected to rely on the Texas wind farm project.

Read more

Favourable AUM development improving WM fee outlook

Taaleri’s had pre-H1 announced an H1 EBIT-margin range of 20-25%, with EBIT at
EUR 6.4m (Evli 6.8m), at a 20.6% margin. Segment results corresponded roughly to
our expectations, with solid investment returns boosting Financing’s earnings,
while Wealth Management earnings were weak, as indicated by the guidance
revision. Energy’s earnings remained negative as expected. The in our view most
positive information of the first half-year was AUM development, with group AUM
up 15.6% to EUR 6.6bn. Uncalled commitments along with the accumulation of AUM
towards late H1 is expected to benefit Wealth Management’s fees and continuing
earnings going into H2.

2019 earnings still dependent on Texas wind farm project

Taaleri has guided for the 2019 EBIT-margin to be slightly below that achieved
in 2018. Compared to H1/19 we expected clear improvements in Wealth Managements
operating profits, driven by higher AUM and an increase in performance fees
(-0.5m in H1). We expect a decline in Financing, both H2/19 and the coming
years, due to expected lower investment returns. The deciding factor for 2019
earnings will be Energy, were the divestment of the Texas wind farm project is
expected during H2/19, with SolarWind II fees also expected to boost the
operating profitability to a positive level. H1 group earnings were also
affected by elevated personnel expenses, which we expect to support earnings
improvement in H2.

BUY with a target price of EUR 7.6 (8.0)

Based on the H1 report, which given the favourable AUM development and expected
cost base decline in H2 was slightly more positive than we had expected, we
retain our BUY-rating with a target price of EUR 7.6 (8.0).



Open report


PIHLAJALINNA - AIMING FOR PROFITABILITY TURNAROUND

16.08.2019 - 09.15 | Company update

Pihlajalinna’s Q2 result fell short of expectations. The company faces
profitability issues in many of its units and has launched an efficiency
improvement program that aims at annual cost savings of EUR 17m. We keep our
rating “BUY” with TP of EUR 12 (prev. EUR 13).

Read more

Q2 earnings weaker than expected

Pihlajalinna’s Q2 earnings fell short of expectations. The company’s revenue was
EUR 130m vs. EUR 134m/132m Evli/cons. Revenue grew by 3.5% of which organic
growth was 1.5% y/y. Adjusted EBITDA was EUR 10.8m (8.3% margin) vs. EUR
13.3m/13.2m (9.9%/9.9%) Evli/cons. EBITDA was negatively impacted by unequal
resourcing of units and general salary increases. Adj. EBIT was clearly below
expectations at EUR 2.1m vs. EUR 4.8m/4.6m Evli/cons. In a group level, EBIT was
negative in April and May but improved in June. Profitability improved in the
Forever fitness center chain and in public specialized care but decreased in
outsourced primary care and social care services, private clinics, surgical
operations and dental care services. Seasonality impacted the Q2 result as well.

Strong actions to improve profitability

Pihlajalinna’s long-term target is to increase its EBIT margin to over 7%, which
so far has seemed rather distant. The company has faced efficiency problems
especially with the new clinics which has impacted negatively on the company’s
profitability. The company indicated that it has several loss-making clinics. In
order to improve its profitability, Pihlajalinna launched an efficiency
improvement program that aims to achieve annual cost savings of EUR 17m. The
planned cost savings are expected to be realized during 2020. As a result of the
efficiency improvement program the company informed that it will merge units but
closures of some of the loss-making clinics are also possible. The focus is on
operational management. The company estimated that the efficiency improvement
program will help to reduce costs in H2’19 by approximately EUR 5m. The program
involves a non-recurring item of approximately EUR 8m, which will be allocated
to Q3’19 as an adjustment item. Despite of the weak Q2 result the company
reiterated its guidance for 2019E and expects revenue to increase from 2018 and
EBIT clearly to improve from last year.

High activity in M&A and partnerships

Pihlajalinna has been active in M&A and partnerships in H1’19 but the company
has also been able to grow organically. During Q2, the company released a letter
of intent on co-operation with Pirkanmaa Hospital District. The partnership
seeks to design new and innovative service models with a strong customer focus.
The company has also agreed on pilot co-operation with Pohjola Vakuutus. During
the review period, Pihlajalinna has further expanded its occupational healthcare
network by acquiring Raisio’s Aurinkoristeys occupational healthcare units and
the Kouvola Työterveys occupational healthcare unit. Pihlajalinna also opened an
occupational healthcare center to Rovaniemi in August. In H2’19, the company
seeks to improve its services in its healthcare centers but also in mobile.
Improved remote services should further support the company’s efficiency.
Pihlajalinna sees that the collapse of social and healthcare service reform has
activated municipalities and the company has indicated that it has new possible
contracts in the pipeline.

We retain “Buy” with TP of EUR 12 (prev. EUR 13)

As a result of the weak Q2, we have decreased our 2019E estimates. We now expect
2019E revenue of EUR 516m (prev. EUR 525m). We expect adj. EBIT of EUR 20m
(prev. EUR 24m) resulting in EBIT% of 3.9% (prev. 4.6%). Despite of the expected
EBIT improvement (42.8% y/y) from 2018, 2019E earnings remain uncertain. If the
planned efficiency improvements succeed in 2020E we expect a turnaround in
profitability and the company to move towards its EBIT% target of 7%. On our
estimates, Pihlajalinna trades at 2019E-2020E EV/EBITDA multiple of 7.5x and
6.1x, which translates into ~27% discount compared to the peer group. We keep
our rating “Buy” with new TP of EUR 12 (prev. EUR 13).



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GOFORE - UNCERTAIN TIMES AHEAD

15.08.2019 - 09.45 | Company update

Gofore’s H1 results were slightly better than expected, with EBITA at EUR 5.0m
(Evli 4.8m). Of key interest were comments regarding market and demand
development, which lacked more precise detail but still imply a weakened
outlook. We retain our HOLD-rating with a target price of EUR 8.0 (8.5).

Read more

Comments point towards increased uncertainty

Gofore’s H1 results beat our estimates slightly. EBITA amounted to EUR 5.0m
(Evli 4.8m), as the impact of the drop in certain customers’ demand during Q2 on
margins was smaller than expected. There appears to have been no pattern in the
decreased demand per customer segment, which opens up reasons to view the
overall market development with further caution. Comments regarding the market
development were somewhat lacking in detail and we opt to interpret the
information given as likely weaker figures during H2 as filling the gaps caused
by the demand drop may prove to be challenging.

Uncertainty driven sales growth estimate revision

We have made revisions primarily to our coming year growth estimates as well as
our H2/19 estimates, having lowered our sales estimate to EUR 34.3m and EBITA-%
estimate to 12.3% to account for an uncertainty in the demand situation, while
our full-year estimates remain mostly intact due to the solid H1 figures. We
have also lowered our coming years sales estimates, having lowered our
2018-2021E CAGR estimate by 4pp to 17%.

HOLD with a target price of EUR 8.0 (8.5)

The near-term revenue and earnings development along with the uncertain tone in
the market outlook comments in our gives rise to additional concern relating to
development in the coming years. We still highlight that Gofore still is and has
been among the top performers in its field and as such we continue to justify a
valuation premium to peers. Upside nonetheless appears limited and we retain our
HOLD-rating but adjust our target price to EUR 8.0 (8.5) to account for the
added estimates uncertainty.



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TAALERI - FAVOURABLE AUM DEVELOPMENT AMID CHALLENGING HALF-YEAR

15.08.2019 - 09.00 | Earnings Flash

Taaleri’s H1 results were quite in line with our expectations, with group income
amounting to EUR 30.9m (Evli 31.1m) and EBIT to EUR 6.4m (Evli EUR 6.8m). AUM
development better than we had foreseen, increasing 15.6% y/y to EUR 6.6bn.

Read more

 * Income in H1 amounted to EUR 30.9m (EUR 35.5m in H1/18), in line with our
   estimates (Evli EUR 31.1m). The group’s continuing earnings declined some 8.6
   per cent y/y.
 * EBIT in H1 amounted to EUR 6.4m (EUR 12.4m in H1/18), slightly below our
   estimates (Evli EUR 6.8m). Taaleri had pre-announced the EBIT -margin in
   H1/19 to be between 20-25%
 * The Wealth Management segments income in H1 was EUR 17.2m (H1/18 EUR 29.7m)
   and EBIT EUR 2.0m (H1/18 EUR 14.1m), with our estimates at EUR 18.0m and EUR
   2.2m respectively.
 * The Financing segments income in H1 was EUR 10.4m (H1/18 EUR 6.2m) and EBIT
   EUR 6.1m (H1/18 EUR 2.4m), with our estimates at EUR 10.6m and EUR 6.5m
   respectively.
 * The Energy segments income in H1 was EUR 1.4m (H1/18 EUR 1.1m) and EBIT EUR
   -1.6m (H1/18 EUR -0.9m), with our estimates at EUR 2.0m and EUR -0.8m
   respectively.
 * Income from other operations in H1 amounted to EUR 1.8m (H1/18 EUR -1.5m) and
   EBIT EUR -0.1m (H1/18 EUR -3.3m), with our estimates at EUR 0.5m and EUR
   -1.1m respectively.
 * Assets under management at the end of H1/19 amounted to EUR 6.6bn, up 15.6%
   y/y.



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ASPO - ESL’S EBIT SET FOR STRONG GAIN IN H2

15.08.2019 - 08.50 | Company update

Aspo’s Q2 didn’t alter the bigger picture much as ESL is still expected to post
higher EBIT in H2’19 as investments are paying off. However, Telko’s subdued
results were a negative. Our TP is now EUR 9.00 (9.25), rating BUY (HOLD).

Read more

Q2 weaker than expected as Telko was unable to improve

Aspo’s EUR 151m Q2 revenue met our expectations, yet the EUR 4.1m EBIT missed
our EUR 5.2m estimate. The miss was largely attributable to Telko’s weak 2.9%
operating margin (we expected 4.5%), which declined both q/q and y/y. Telko’s
EUR 80.6m Q2 revenue was in line with our estimate, and improved q/q and y/y,
however declining plastic raw materials and chemicals prices continued to hurt
profitability as Telko’s inventories were high (although have since normalized).
The strengthening Russian and Ukrainian currencies had a further negative
impact. Leipurin also fell short of our expectations and last year due to the
machinery business’ weakness. Meanwhile ESL posted EUR 2.6m in EBIT (we cut our
estimate to EUR 1.8m after Aspo warned Q2 will be weak due to a challenging
market for the Supramax vessels).

ESL’s EBIT is set to almost double in H2 compared to H1

ESL’s LNG vessels are expected to reach their full potential in H2’19 as the
cranes are now functioning normally. AtoB@C is also contributing. The market for
Supramaxes has improved with the Baltic Dry Index rebounding sharply from its
early 2019 lows. Steel sector shipments have also normalized after Q2, a period
hampered by process challenges in Baltic steel mills as well as heavy traffic at
Baltic Sea ports. We thus leave our H2’19 estimates for ESL intact (expect EUR
11m in H2’19 EBIT vs EUR 8m in H2’18). We revise our Telko estimates down as the
market outlook in both West and East remains cautious. We previously expected
Telko to reach 4.5-5.0% EBIT margins in H2’19 but now expect ca. 3.5%. On a more
positive note, Aspo says Telko has managed to improve its inventory turnover
recently.

Aspo’s H1’19 was subdued, but EBIT should improve considerably in H2’19

ESL’s H1’19 was weak with EBIT amounting to EUR 5.8m vs EUR 6.9m previous year.
The results were hampered by the two new LNG vessels’ crane problems (which have
since been fixed) as well as challenging market for the two Supramax vessels.
Moreover, Q2 was slow for steel industry shipments as Baltic Sea steel mills’
annual maintenance procedures took longer than expected. Baltic Sea ports also
faced operational challenges, leading to extended waiting periods for vessels.
Meanwhile Telko and Leipurin struggled to improve their profitability in H1’19
due to the former suffering from declining chemicals prices and the latter
dragged by slow machinery business. Aspo’s H1’19 EBIT stood at EUR 9m (EUR 11m).
We expect Aspo’s EBIT to improve to EUR 16m in H2’19.

The bulk of Aspo’s value continues to tilt towards ESL

Telko’s contribution to our SOTP valuation has dropped as we have lowered our
estimates for the chemical distributor. We now expect Telko to manage EUR 10m
(EUR 14m) in FY ’19 EBIT. Our TP is now EUR 9.00 (9.25) due to lower SOTP as we
expect FY ’19 EBIT at EUR 25m (EUR 28m). Our rating is now BUY (HOLD).



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MARIMEKKO - GOOD EBIT GROWTH IN Q2

15.08.2019 - 08.30 | Earnings Flash

Marimekko’s Q2 revenue increased by 3% and was EUR 29.1m vs. EUR 31.1m/29.8m
Evli/cons. Adj. EBIT was EUR 3.7m vs. EUR 3.5m/3.2m Evli/cons. Revenue was
mainly driven by improved relative sales margin and sales growth. Marimekko
reiterated its guidance for 2019E.

Read more

 * Finland: revenue was EUR 16.8m vs. EUR 16.7m Evli view. Revenue increased by
   4%. Retail sales increased by 17%. Wholesale sales decreased by 18%.
 * International: revenue was EUR 12.4m vs. EUR 13.4m Evli view. Revenue
   increased by 2%. Retail sales decreased by 1% and wholesale sales increased
   by 6%.
 * Q2 operating profit was EUR 3.7m (12.7% margin) vs. EUR 3.5m/3.2m
   (11.3%/10.6% margin) Evli/cons.
 * Q2 EPS was EUR 0.32 vs. EUR 0.34/0.30 Evli/cons.
 * Guidance for 2019: net sales in 2019E are forecasted to be higher than in the
   previous year and adj. EBIT is expected to be higher than in the previous
   year, amounting at most to approx. EUR 15m.



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PIHLAJALINNA - Q2 EARNINGS BELOW EXPECTATIONS

15.08.2019 - 00.00 | Earnings Flash

In Q2’19, Pihlajalinna’s revenue amounted to EUR 129.7m vs. EUR 134.0m/132.4m
Evli/cons estimates, while adj. EBIT landed at EUR 2.1m vs. EUR 4.8m/4.6m
Evli/cons estimates. Organic growth increased by 1.5% y/y. The company
reiterated its 2019E guidance.

Read more

 * Q2 revenue was EUR 129.7m vs. EUR 134.0m/132.4m Evli/cons estimates. Revenue
   grew by 3.5% y/y. Organic growth was 1.5% y/y.
 * Q2 adj. EBITDA was EUR 10.8m (8.3% margin) vs. EUR 13.3m/13.2m (9.9%/9.9%)
   Evli/cons estimates. Adj. EBITDA increased by 5.6% y/y. Administrative and
   personnel costs were higher than planned as unequal resourcing and general
   salary increases impacted costs.
 * Q2 adj. EBIT was EUR 2.1m (1.6% margin) vs. EUR 4.8m/4.6m (3.6%/3.5%)
   Evli/cons estimates.
 * Q2 EPS was EUR -0.02 vs. EUR 0.1/0.1 Evli/cons.
 * Guidance: consolidated revenue is expected to increase from 2018. Adj. EBIT
   is expected to improve clearly compared to 2018.
 * The company has launched an efficiency improvement program that aims at
   annual cost savings of approx. EUR 17m.



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ASPO - WEAK Q2, BUT IMPROVEMENT AHEAD

14.08.2019 - 10.35 | Earnings Flash

Aspo’s Q2 revenue stood in line with our estimate, however the EUR 4m EBIT fell
short of our EUR 5m expectation mostly due to Telko’s relatively low 2.9%
operating margin. ESL’s EBIT came in above our estimate. Aspo had previously
warned about subdued Q2 for ESL due to a challenging market for the Supramax
vessels.

Read more

 * Aspo Q2 revenue amounted to EUR 151m vs our EUR 152m estimate.
 * Q2 EBIT was EUR 4.1m whereas we expected EUR 5.2m.
 * ESL Shipping posted EUR 42.6m in Q2 revenue vs our EUR 39.5m estimate. ESL’s
   EBIT was EUR 2.6m vs our EUR 1.8m expectation. Aspo had previously warned Q2
   to be weak as Supramaxes posted losses (EBIT was EUR 4.3m a year ago).
 * Telko recorded EUR 80.6m in revenue vs our EUR 80.9m estimate, whereas EBIT
   came in at EUR 2.3m compared to our EUR 3.6m projection. Operating margin was
   therefore 2.9% i.e. weaker than the 4.1% recorded previous year and clearly
   off our 4.5% expectation.
 * Leipurin managed EUR 28.0m in Q2 revenue while we expected EUR 31.6m. EBIT
   stood at EUR 0.6m vs our EUR 0.9m estimate.
 * Aspo guides EUR 24-30m operating profit for 2019 (EUR 20.6m in 2018).



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ETTEPLAN - NARRATIVE LARGELY UNCHANGED

14.08.2019 - 10.00 | Company update

Etteplan’s Q2 results were slightly below our and consensus estimates but at a
good level nonetheless. Etteplan upgraded its guidance mainly driven by the
acquisitions made. The market comments were mostly unchanged, with some hints of
weakened demand. We retain our HOLD rating with a target price of EUR 9.6.

Read more

Below estimates, acquisition driven guidance upgrade

Etteplan’s Q2 results were slightly below our and consensus estimates, but
continued to be at a good level nonetheless. Revenue grew 3.7% to EUR 64.3m
(Evli/cons. 66.6m/66.4m), with organic growth falling clearly to 1.2%, although
impacted by working day differences. Profitability surpassed the target level,
with EBITA at 6.5m (Evli 6.9m) for a margin of 10.1%. Etteplan further upgraded
its guidance (prev. upgrade in Q1) following the acquisitions made during Q2/Q3,
expecting its revenue and operating profit for 2019 to grow significantly (prev.
clearly) compared to 2018. Market outlook comments were mostly neutral compared
to Q1, with some signs of negative development for instance in China.

No major estimates revisions

Our estimates remain mostly unchanged post-Q2, as we had already included the
acquisitions in our estimates. Profitability of the acquired companies had not
been given pre-Q2 but management comments implied similar profitability to
Etteplan or possibly better when accounting for synergies, in line with our
expectations. We expect revenue growth of 11.4% in 2019 (2018: 10.1%) and an
EBITA-margin of 9.9% (2018: 9.5%).

HOLD with a target price of EUR 9.6

The prevailing uncertainty in customer activity and the lower organic growth in
Q2, although affected by working day differences, gives continued reasons for
caution while the upgraded guidance did reduce some near-term uncertainty. With
no major changes to our estimates, we retain our HOLD-rating and target price of
EUR 9.6.



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GOFORE - SLIGHT EARNINGS BEAT

14.08.2019 - 09.20 | Earnings Flash

Gofore’s EBITA in H1 came in slightly above our expectations, at EUR 5.0m (Evli
4.8m). Revenue was pre-announced at EUR 33.4m, with the organic growth amounting
to 16%. Gofore expects net sales in 2019 between EUR 67-72m (unchanged).

Read more

 * Gofore H1/19 net sales amounted to EUR 33.4m (pre-announced), with sales
   growth in at 35.5% compared to H1/18 figures. Growth was driven by the
   acquisitions of Solinor and Silver Planet. Organic growth amounted to 16%.
   The company’s international business net sales amounted to EUR 3.6m,
   corresponding to 10.7% of total net sales.
 * EBITA in H1 amounted to EUR 5.0m, slightly above our estimates (Evli EUR
   4.8m), at a margin of 14.9%. Profitability remained on par with the company’s
   long-term target (15%) following the strong Q1 figures, as the Q2 EBITA-%
   fell to 12.6%.
 * Guidance: Gofore expects net sales in 2019 between EUR 67-72m (updated
   10.7.2019).
 * The number of personnel at the end of the period was 559 (H1/18: 423).



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SOLTEQ - SHOWING PROMISING PROGRESS

14.08.2019 - 08.15 | Company update

Solteq’s Q2 results were slightly better than our expectations, with net sales
at EUR 14.7m (Evli 14.4m) and EBIT at EUR 0.6m (Evli 0.5m). The report mostly
implied business as usual, with encouraging comments on order intake
development. We have made minor estimates revisions, now expecting a 2019
EBIT-margin of 7.4% (prev. 6.8%). We raise our target price to EUR 1.5 (1.4) and
retain our HOLD-rating.

Read more

Q2 slightly better than expected

Solteq posted Q2 results slightly better than our expectations. Net sales
amounted to EUR 14.7m vs. our estimate of EUR 14.4m. Growth picked up slightly
in Q2, at 3.0% y/y, with the revenue of the international subsidiaries having
grown significantly. The order intake has according to the company continued to
develop positively and was larger than in the comparison period. Q2 EBIT
amounted to EUR 0.6 vs. our estimate of EUR 0.5m. Product development
investments grew to EUR 1.1m (0.6m), with the co’s full year estimate still at
EUR 3.5m.

Slight upwards revisions of our estimates

We have made only minor adjustments to our estimates post-Q2. We expect sales in
2019 to grow 3.5% to EUR 58.9m, supported by a favourable order intake
development and expect continued solid growth internationally. We expect the
operating profit margin in 2019 to improve to 7.4% (prev. est. 6.8%) from 4.3%
in 2018, driven by the actions taken to improve operational efficiency during
2018. Solteq has guided for its operating profit in 2019 to grow clearly
compared to 2018.

HOLD with a target price of EUR 1.5 (1.4)

On 2019 peer multiples valuation still appears reasonably fair. Although we are
not yet prepared to fully emphasize 2020 multiples, with the good progress so
far during the year and our slightly raised estimates we raise our target price
to EUR 1.5 (1.4) and retain our HOLD-rating.



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ETTEPLAN - UPGRADES GUIDANCE

13.08.2019 - 13.15 | Earnings Flash

Etteplan delivered solid Q2 results, although slightly below Evli and consensus
estimates. Etteplan's net sales in Q2 amounted to EUR 64.3m, slightly below our
and consensus estimates (Evli/cons. EUR 66.6m/66.4m). EBITA amounted to EUR 6.5m
compared to our estimates (Evli EUR 6.9m). Etteplan upgraded its guidance,
expecting the revenue and operating profit (EBIT) for the year 2019 to grow
significantly (prev. clearly) compared to 2018.

Read more

 * Net sales in Q2 were EUR 64.3m (EUR 62m in Q2/18), slightly below our
   estimates (Evli EUR 66.6m). Growth in Q2 amounted to 3.7 % y/y.
 * EBITA in Q2 amounted to EUR 6.5m (EUR 6.2m in Q2/18), slightly below our
   estimates (Evli EUR 6.9m), at a margin of 10.1 %.
 * Engineering Solutions: Net sales in Q2 were EUR 35.3m vs. EUR 36.4m Evli.
   EBITA in Q2 amounted to EUR 3.8m vs. EUR 3.9m Evli. The MSI-% in Q2 was 57 %
   compared to 52 % in Q2/18.
 * Software and Embedded Solutions: Net sales in Q2 were EUR 17.1m vs. EUR 17.9m
   Evli. EBITA in Q2 amounted to EUR 1.6m vs. EUR 1.8m Evli. The MSI-% in Q2 was
   55 % compared to 46 % in Q2/18.
 * Technical Documentation Solutions: Net sales in Q2 were EUR 11.8m vs. EUR
   12.4m Evli. EBITA in Q2 amounted to EUR 1.0m vs. EUR 1.2m Evli. The MSI-% in
   Q2 was 75 % compared to 73 % in Q2/18.
 * Overall development of Etteplan’s business environment remains favourable.
 * Guidance updated: Etteplan expects the revenue and operating profit (EBIT)
   for the year 2019 to grow significantly (prev. clearly) compared to 2018.



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TAALERI - EYES ON WEALTH MANAGEMENT

13.08.2019 - 09.15 | Preview

Taaleri has previously given guidance for an operating profit margin of 20-25%
in H1/19, affected by a decline in Wealth Management’s continuing earnings and a
postponement of planned projects. We expect the bulk of earnings from Financing
following a favourable investment environment during H1. We keep our long-term
view intact pre-H1 and retain our BUY-rating, lowering our TP to EUR 8.0 (8.5)
to reflect increased Wealth Management uncertainty.

Read more

Co’s H1/19 operating profit margin guidance 20-25%

Taaleri will report H1/19 results on August 15th. Taaleri has previously given
guidance for a H1 operating profit margin of 20-25%, mainly following a decline
in continuing earnings in Wealth Management and the postponement of planned
projects to H2/19. The corresponding full year margin is expected to be slightly
lower than in 2018 (33.0%).

Financing main earnings contributor in H1/19E

We expect the bulk of Taaleri’s H1 results to be delivered by Financing,
following expected solid investment returns from the favourable market
environment during H1. Wealth Management’s continuing earnings are as per
company guidance expected to be lower y/y, and we further expect performance
fees and investment returns to have been only minor. We see reason for viewing
AUM development with caution and will focus our attention in the H1/19 report on
the development of Wealth Management. We expect the operating profit of Energy
to have remained in the red during H1 but the first closing of the SolarWind II
-fund at EUR 220m post-Q2 as well as the expected exit from the
Truscott-Gilliland East wind farm are expected to significantly boost both
Energy’s and group earnings in H2.

BUY with a target price of EUR 8.0 (8.5).

The development of Wealth Management’s continuing earnings gives some reason for
concern. However, with the currently limited information we do not see a basis
for extrapolating any long-term conclusions before the H1 report. As such we
retain our BUY rating but lower our target price to EUR 8.0 (8.5).



Open report


SOLTEQ - RESULTS QUITE AS EXPECTED

13.08.2019 - 08.30 | Earnings Flash

Solteq's Q2 results were slightly above our estimates. Net sales in Q2 amounted
to EUR 14.7m (Evli EUR 14.4m), while EBIT amounted to EUR 0.6m (Evli EUR 0.5m).
Solteq reiterated its guidance, expecting the operating profit to grow clearly
compared to the financial year 2018.

Read more

 * Net sales in Q2 were EUR 14.7m (EUR 14.2m in Q2/18), slightly above our
   estimates (Evli EUR 14.4m). Growth in Q2 amounted to 3.0 % y/y. Revenue
   growth of international subsidiaries was significant.
 * Operating profit in Q2 amounted to EUR 0.6m (EUR 0m in Q2/18), above our
   estimates (Evli EUR 0.5m), at a margin of 3.9 %. The adjusted operating
   profit amounted to EUR 0.6m (Evli 0.5m), at a margin of 4.3%.
 * Product development investments during Q2/19 increased to EUR 1.1m (0.6m),
   co’s FY2019 estimate EUR 3.5m.
 * The group’s order intake developed positively during Q2/19 and was clearly
   better than in Q2/18.
 * Guidance reiterated: Solteq's operating profit is expected to grow clearly
   compared to the financial year 2018



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VERKKOKAUPPA.COM - COMPETITION REMAINS FIERCE

12.08.2019 - 09.10 | Company update

Verkkokauppa.com’s Q2 result fell short of expectations. The competition is
expected to remain fierce and the company’s growth investments are hampering
EBIT improvement in 19E. H2 has a high emphasis on the company’s total
performance. We downgrade to “HOLD” with TP of EUR 3.3 (prev. EUR 4.7).

Read more

Q2 earnings below expectations

Verkkokauppa.com’s Q2 result was a disappointment as earnings fell short of
expectations. However, the company was able to increase its market share despite
of the declining consumer electronics market. The company’s revenue grew by 5.0%
while GfK estimated 0.5% decline in the consumer electronics market in
April-June. Verkkokauppa.com’s revenue totaled EUR 108m vs. EUR 111m/111.5m
Evli/consensus. Revenue growth was impacted by increased marketing and
campaigns. Gross profit was EUR 15.3 (14.2%) vs. our view of EUR 16.1m (14.5%).
Fixed costs (incl. staff costs of EUR 8.1m) totaled EUR 14m vs. our view of EUR
14m. The increase in personnel costs was mainly due to growing personnel costs
in IT, retail stores and purchasing. Low gross margin level and continuing
marketing expenses dragged the company’s operating profit down, which totaled
EUR 0.2m vs. EUR 0.9m/1.3m Evli/consensus.

Growth still prioritized

Verkkokauppa.com prioritizes growth and the company has made extensive
investments in marketing from Q4’18 onwards. The company seeks to increase its
visibility and brand recognition via tv-commercials as well as through online
advertising. Increased marketing expenses are expected to continue throughout
the year which will hamper the company’s EBIT improvement in 19E.
Verkkokauppa.com targets to increase the share of its private labels which
should increase gross margins. The company also informed that the outsourced
warehouse with Posti will move to new premises during Q3. According to the
company, there are no significant costs related to the moving. We expect 2019E
total fixed costs of EUR 59m (9.7% y/y). The company expects the competition to
remain fierce and price driven throughout the year. Declining GDP growth is also
likely to have an impact on sales (the Ministry of Finance estimates 2019 GDP
growth of 1.6%). As consumer electronics market is declining, other product
categories are expected to support growth. H2 is critical for the company as
sales and profitability are normally higher than in H1. Verkkokauppa.com
reiterated its guidance for 2019E and expects revenue of EUR 500-550m and EBIT
of EUR 11-17m. We expect 2019E revenue of EUR 519m (prev. EUR 522m) and EBIT of
EUR 12m (prev. EUR 13m).

“HOLD” with TP of EUR 3.3 (4.7)

After a weak Q2 we have lowered our 2019E-2020E estimates. Our 19E estimates are
now at the lower bottom of the company’s guidance. As continuing growth
investments and fierce competition weigh down the company’s EBIT in 2019E we
expect 2019E EBIT margin of 2.3% (2018: 2.8%). We expect the market outlook to
remain uncertain which adds pressure on EBIT. On our estimates, Verkkokauppa.com
trades at 19E-20E EV/EBIT multiple of 9.6x and 7.3x, which translates into ~53%
discount compared to the peer group. Due to our weakened estimates and
continuing pressure on EBIT we downgrade to “HOLD” with TP of EUR 3.3 (prev. EUR
4.7).





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SCANFIL - EXPECTING FURTHER PICKUP IN H2’19

12.08.2019 - 08.55 | Company update

Scanfil didn’t meet our revenue estimate but nevertheless managed to beat in
terms of EBIT. Overall Q2 was rather undramatic, yet we note that volumes need
to continue to improve during H2’19 if the company is to deliver on FY guidance.
We retain our EUR 4.75 TP and our BUY rating.

Read more

Scanfil expects improved customer demand during H2’19

Scanfil posted EUR 143m in Q2 revenue (vs our EUR 158m estimate), thus adding
10% q/q but losing 6% y/y. Revenues were quite evenly spread between the five
segments. The y/y revenue decline was mostly attributable to the Consumer
Applications segment, which decreased by 29% (a major product will fold due to
low demand), however the Communication segment (e.g. base stations) was also
soft, declining by 18%. Despite soft Q2 revenue Scanfil managed to top our EUR
10.0m EBIT estimate. The reported EUR 10.3m figure (7.2% EBIT margin vs our 6.3%
estimate) testifies to plant network efficiency (strong EBIT margin with a
normal product mix). Scanfil notably has a strong record in cost control.

Scanfil writes down Hamburg, closes the HASEC acquisition

Scanfil’s Hamburg unit has underperformed and so the company impaired the
plant’s goodwill. The line is now fully impaired (the write-off was EUR 3.6m),
but the company still works to expand the unit’s customer base and volumes.
Scanfil also closed the HASEC deal near the end of Q2 (the German unit
contributed EUR 1.5m to Q2 revenue). Scanfil expects HASEC to contribute EUR 20m
in revenue and EUR 1m in EBIT during H2’19. We now expect EUR 321m in H2’19
revenue (EUR 301m) and EUR 22m in H2’19 EBIT (EUR 20m). Scanfil’s updated
guidance for FY 2019 is EUR 580-610m in revenue and EUR 39-42m in EBIT
(previously EUR 560-610m and EUR 36-41m).

Minor estimate changes as the thesis remains unchanged

Scanfil’s H1’19 was on the slow side (largely due to Q1) in revenue terms,
meaning volumes need to improve further in H2’19 if the FY ’19 guidance is to be
met. The main risk is on the volume side; in our view Scanfil will have no
problem reaching the EBIT target if the revenue goal is met. Scanfil still
trades ca. 15-20% below its historical averages. We value Scanfil according to
these multiples and thus hold our EUR 4.75 TP and BUY rating.



Open report


ENDOMINES - FRIDAY PRODUCTION FURTHER DELAYED

12.08.2019 - 08.00 | Company update

Endomines’ announced that the ramp-up of production at Friday will be further
delayed and the earlier production guidance for 2019 will not be achieved.
Recent increases in gold prices are a welcome development but has bloated
valuation. We re-establish our rating with SELL (N/A) and a target price of SEK
4.4 (N/A).

Read more

Production to fall short of 2019 guidance

Endomines announced on August 9th that its production guidance for 2019
(5,000-8,000oz gold) will not be achieved due to reparations of damages to
Friday’s tailings pond causing longer than expected delays to production.
Ramp-up of the processing plant is expected to take a couple of weeks before
being fully commissioned. No new guidance was given. We now estimate a gold
production in 2019 of 4,340oz. Although the added delay to production timewise
is relatively short, this will cause additional strain on the already limited
near-term cash flows.

Sounder financial situation following the rights issue

With the completion of Endomines’ rights issue, having raised gross proceeds of
SEK 156m, the company’s financial situation is now at a much sounder level. The
raised funds should as such cover the by the company earlier estimated next
twelve-month capital need of SEK 100m. Proceeds will mainly be used to
short-term debt repayment and ramp-up of Friday as well as start-up of other
assets.

SELL (N/A) with a target price of SEK 4.4 (N/A)

Endomines’ share price has seen recent rapid increases, as the gold price has
climbed to levels last seen in 2019, driven by macroeconomic uncertainties.
Although the rise in gold prices certainly is a welcome development, the current
valuation in our view does not reflect the high uncertainty relating to
Endomines’ gold production, with Friday having seen several delays and
additional costs, and production has not yet commenced. We re-establish our
rating with SELL (N/A) and a target price of SEK 4.4 (N/A), in line with our
SOTP.



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CAPMAN - STEAMING AHEAD

09.08.2019 - 09.30 | Company update

CapMan’s Q2 results were above estimates, largely due to Scala’s success fees.
The Buyout XI fund held a first closing at EUR 160m, to aid management fees
during H2/19 and onwards. The Q2 report gave little reason to change our views
on CapMan’s development; on the contrary, we have made upward revisions to our
estimates. We retain our BUY-rating with a target price of EUR 1.95 (1.85).

Read more

Earnings boosted by significant Scala success fees

CapMan’s Q2 results beat both our and consensus expectations, with revenue at
EUR 13.4m (Evli/cons. 10.8m/11.0m) and EBIT at EUR 5.8m (Evli/cons. 4.5m/4.2m).
The stronger earnings were in our view largely due to stronger than expected
Scala success fees. The solid Services business operating profit (Act./Evli
4.9m/2.1m) was slightly offset by weaker investment returns, due to weaker
performance of certain portfolio companies, according to management of a more
temporary nature. The Buyout XI fund held a first closing at EUR 160m, with
management fees expected to kick in during Q3.

Solid Services business development

We have revised our 2019 estimates slightly upwards, mainly due to the strong Q2
earnings. We have further raised our estimates for the coming years, with our
2020 operating profit estimate up 10%, reflected mainly through the Services
business. Our estimates continue to rely on more rapid accumulation of carried
interest starting from H2/19, the timing and materialization of which remains
the biggest near-term uncertainty. For 2019 we expect an operating profit of EUR
24.7m, with a diversified contribution split from all business areas.

BUY with a target price of EUR 1.95 (1.85)

Our SOTP implies a fair value of EUR 1.82 per share, which together with peer
multiple valuation implies a limited valuation upside. However, when considering
the top-class dividend yield and expected ~35% improvement in operating profit
in 2020, CapMan in our view remains an attractive case. Following our estimates
revisions, we lift our target price to EUR 1.95 (1.85) and retain our
BUY-rating.



Open report


VERKKOKAUPPA.COM - WEAK Q2 EARNINGS

09.08.2019 - 08.45 | Earnings Flash

Verkkokauppa.com’s Q2’19 revenue grew by 5% despite of declining market and was
EUR 108m vs. Evli EUR 111m and consensus of EUR 111.5m. Gross profit was 15.3m
(14.2% margin) vs. EUR 16.1m (14.5% margin) Evli view. EBIT was EUR 0.2m vs. EUR
0.9m/1.3m Evli/cons. The company reiterated its 2019E guidance.

Read more

 * Q2 revenue was EUR 108m vs. EUR 111.0m Evli view and EUR 111.5m consensus.
   Sales grew by 5% despite of declining market growth (-0.5% y/y according to
   GfK). Revenue growth in Q2 was boosted by campaigns and increased marketing.
 * Q2 gross profit was EUR 15.3m (14.2% margin) vs. EUR 16.1m (14.5% margin)
   Evli view.
 * Q2 EBIT was EUR 0.2m (0.2% margin) vs. EUR 0.9m (0.8% margin) Evli view and
   EUR 1.3m (1.2% margin) consensus. This was impacted by lower gross profit and
   increased marketing expenses.
 * Q2 eps was EUR 0.00 vs. EUR 0.02/0.02 Evli/cons.
 * 2019 guidance intact. The company expects 2019E revenue of EUR 500-550m and
   EBIT of EUR 11-17m.
 * The company also decided on a quarterly dividend of EUR 0.05 per share.

Open report


SCANFIL - STRONG EBIT DESPITE SOFT REVENUE

09.08.2019 - 08.45 | Earnings Flash

Scanfil reported Q2 revenue clearly below our expectations yet managed to beat
our operating profit estimate. Operating margin remained strong despite 6%
decline in revenue compared to previous year.

Read more

 * Q2 revenue, at EUR 143m, missed our EUR 158m estimate by 10% and declined by
   6% compared to previous year (but increased by 10% compared to previous
   quarter). Scanfil says revenue developed favorably in all segments except
   Medtec & Life Science.
 * Q2 adjusted operating profit amounted to EUR 10.3m vs our EUR 10.0m estimate.
   Adjusted operating margin was thus 7.2% vs our 6.3% expectation.
 * The adjustment items include expenses related to the acquisition of
   HASEC-Elektronik GmbH (EUR 0.4m) and the impairment of Scanfil GmbH’s
   goodwill (EUR 3.6m).
 * Scanfil adjusts 2019 outlook to reflect the HASEC acquisition it completed at
   the end of Q2. Scanfil says HASEC will contribute ca. EUR 20m in revenue and
   EUR 1m in operating profit during 2019 and hence the new FY 2019 guidance is
   EUR 580-610m in revenue and EUR 39-42m in adjusted operating profit
   (previously EUR 560-610m and EUR 36-41m).
 * Scanfil also said it will initiate a share repurchase program. The
   authorization is to purchase a maximum of 300,000 shares, or approximately
   0.46% of the total number of shares (the maximum amount to be used is EUR
   1.35m). The repurchasing will start on Aug 12, 2019 at the earliest.



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TOKMANNI - GOOD MOMENTUM EXPECTED TO CONTINUE

09.08.2019 - 08.05 | Company update

Tokmanni delivered good Q2 earnings. The company focuses on improving
profitability in 2019E but will also strengthen its store network in H2 and
launch two own brands. Tokmanni reiterated its guidance and expects revenue and
EBIT margin to improve from last year. We upgrade to “BUY” with TP of EUR 10.2
(prev. EUR 9.0).

Read more

Strong Q2 earnings

Tokmanni delivered strong Q2 earnings. The company’s revenue increased by 10.2 %
and was EUR 240m vs. EUR 236m/234m Evli/consensus. The sales were boosted by new
store openings and the timing of Easter. The company was also able to reduce the
dependence of weather during the spring season. The company’s gross margin was
EUR 84.5m (35.2 %) which was close to our expectation of EUR 83.9m (35.6 %).
Gross margin improvement was mainly driven by the structure of sales and reduced
waste in groceries. Tokmanni’s Q2 EBIT was 18.7m (7.8 %) vs. EUR 15.8m (6.7 %)
Evli and 15.0m (6.4 %) consensus. Operational efficiency improvements impacted
positively on the company’s profitability in Q2.

Focus on profitability improvements

Tokmanni’s target in 19E is to improve its profitability through improved gross
margin and more efficient operations. The company stated that it will keep its
customer promise of low prices thus gross margin improvements are made by
increasing the share of own brands and direct import as well as by reducing
waste in groceries. The profitability improvements of the company’s supply chain
are on the right track, although most of the benefits will be seen later in the
future.

Upgraded to “BUY” with TP of EUR 10.2 (prev. EUR 9)

Based on the Q2 result, we have raised our 19E-20E estimates and expect 19E
revenue of EUR 946m (prev. EUR 936m) and EBIT of EUR 68m (prev. EUR 62m)
resulting in EBIT margin of 7.1 %. We expect 20E revenue of EUR 984m and EBIT of
EUR 78m (7.9 %). On our estimates, Tokmanni trades at 19E-20E EV/EBIT multiple
of 13.4x and 11.4x which translates into ~28 % discount compared to the
international discount peers but is valued at par to its Nordic peers. The
company also offers attractive dividend yield (~7 %) in 19E-20E. We upgrade to
“BUY” with TP of EUR 10.2 (prev. 9.0).



Open report


SUOMINEN - WAIT TO SEE IMPROVING VOLUMES

08.08.2019 - 09.45 | Company update

Suominen’s Q2 unfolded without surprises in terms of prices and input costs i.e.
margins were stable. Yet volume losses were larger than we expected, and thus
the EUR 104m in Q2 sales missed our EUR 113m estimate and EBIT fell short. We
have revised our estimates slightly down; our TP is now EUR 2.50 (2.85), rating
HOLD (BUY).

Read more

Margins continued stable, volume losses were larger in Q2

Suominen’s Q2 revenue, at EUR 104m, declined by 6% y/y and missed our estimate
by 8%. Strong USD added some 3% y/y, and considering the implemented price
increases, we estimate ca. 15% of delivery volumes were lost y/y (we estimate
the losses to have amounted to ca. 10% in Q1). We expect Suominen to lose 10% of
volumes in ‘19 (expect FY revenue to decline by 1%). We expect stable GM for the
rest of ’19, and hence EBIT at EUR 12m. Suominen guides flat revenue and
improving EBIT for FY ’19.

Suominen changes its business area structure

Suominen has reorganized its business areas, opting for a geographical split
(Americas and Europe) instead of the previous application-based reporting
(Convenience and Care). The new structure will be effective from Q3 onwards.
Suominen says the new organizational model should further help improve
efficiency especially when it comes to optimizing regional capacity utilization.
There was scant news about Bethune, although the company said the China-US trade
war could potentially help Suominen’s competitive positioning in the US market
as Chinese imports are hurt by tariffs. Suominen also noted the EUR 6m capacity
improvement investment in its Green Bay, WI, plant will support additional
volumes from Q3 onwards. Regarding the European market, Suominen says
competition among nonwovens producers remains tight but stable.

Estimates

Suominen has achieved an earnings turnaround in ’19 as improved pricing and
stabilizing raw material costs have led to a clear improvement in gross margin
from the lows of ’18, when the margin was hit by significantly higher input
costs. The implemented price increases have, however, led to volume losses. Even
though profitability has improved lately, we expect FY ’19 EBIT margin at a
relatively low 2.9%. Going forward Suominen needs to achieve higher volumes in
order to reach further improvement in EBIT margin. Following the Q2 report, we
have revised our FY ’19 EBIT estimate down to EUR 12m (previously EUR 13m),
while our revenue estimate stands at EUR 425m (EUR 436m). For ’20 we expect
further improvement in EBIT margin (3.9%), assuming gradual improvement in
delivery volumes.

We wait to see evidence of stabilizing (improving) volumes

Although Suominen’s valuation is not demanding (ca. 6x EV/EBITDA ‘19e vs. 6.5x
historically), volume uncertainty still remains. As the price hikes pass through
during ‘19, we are waiting to see evidence of stabilizing (and improving)
volumes that would lead to further EBIT improvement in ‘20. We lower our TP to
EUR 2.50 (2.85) due to volume uncertainty, and thus our rating is now HOLD
(BUY).



Open report


TOKMANNI - STRONG Q2 PERFORMANCE

08.08.2019 - 09.05 | Earnings Flash

Tokmanni’s Q2 revenue increased by 10.2 % and was EUR 239.9m vs. EUR 236m/234m
Evli/consensus. LFL growth continues to be clearly above our estimates at 5.3 %
vs. 2.5 % our expectation. Gross margin was 35.2 % vs. 35.6 % our expectation.
Tokmanni reiterated its 2019E guidance.

Read more

 * Q2 revenue grew by 10.2 % and was EUR 239.9m vs. EUR 236m/234m
   Evli/consensus.
 * Q2 adj. gross profit was EUR 84.5m (35.2 % margin) vs. EUR 83.9.m (35,6 %)
   Evli expectation.
 * Q2 adj. EBITDA was EUR 34.0m vs EUR 30.8/29.7m Evli/consensus
 * Q2 adj. EBIT was EUR 18.7 (7,8 % margin) vs. EUR 15.8m (6.7 %) Evli
   expectation and EUR 15.0m (6.4 %) consensus
 * Q2 eps was EUR 0.21 vs EUR 0.18/0.18 Evli/consensus
 * Revenue was driven by the timing of Easter and good sales in spring season.
   Also, the operational efficiency measures progressed in the right direction
   during Q2.
 * 2019 guidance intact: revenue will grow in 2019 based on the sales from new
   openings in 2018 and in 2019. Profitability will increase y/y in 2019E.



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CAPMAN - EARNINGS BEAT THROUGH SUCCESS FEES

08.08.2019 - 09.00 | Earnings Flash

CapMan's net sales in Q2 amounted to EUR 13.4m, above our estimates (Evli EUR
10.8m), with EBIT also above our estimates (Evli EUR 4.5m), at EUR 5.8m. Scala
recorded significant success fees in the quarter, larger than we had
anticipated, contributing strongly to the earnings beat.

Read more

 * Revenue in Q2 was EUR 13.4m (EUR 11.4m in Q2/18), above our estimates (Evli
   EUR 10.8m). Growth in Q2 amounted to 18 % y/y.
 * Operating profit in Q2 amounted to EUR 5.8m (EUR 6m in Q2/18), clearly
   beating our estimates (Evli EUR 4.5m).
 * Management Company business: Revenue in Q2 was EUR 6.4m vs. EUR 6.7m Evli.
   Operating profit in Q2 amounted to EUR 0.9m vs. EUR 0.8m Evli.
 * Investment business: Revenue in Q2 was EUR 0m vs. EUR 0m Evli. Operating
   profit in Q2 amounted to EUR 1m vs. EUR 2.3m Evli.
 * Services business: Revenue in Q2 was EUR 6.9m vs. EUR 3.9m Evli. Operating
   profit in Q2 amounted to EUR 4.9m vs. EUR 2.1m Evli.
 * Capital under management by the end of Q2 was EUR 3.3b. Of the capital under
   management EUR 1.9bn was attributable to Real Estate, EUR 1.0bn to Private
   Equity & Credit and EUR 0.3bn to Infra and other.



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ETTEPLAN - EXECUTING GROWTH STRATEGY

08.08.2019 - 08.00 | Preview

Etteplan will report Q2 results on August 13th. Etteplan has during and after
the quarter made acquisitions with a combined number of employees of over 250,
expected to have an insignificant impact on Q2 but to aid in achieving the
FY2019 guidance amid continued global uncertainty. We expect minor overall
margin improvement y/y in Q2 while still remaining cautious to margin
development in Technical Documentation Solutions. Following the post-Q1 share
price rally we downgrade our rating to HOLD (BUY) with a target price of EUR
9.6.

Read more

Executing its M&A aided growth strategy

Our estimates ahead of Q2 remain intact apart from adjustments made for the
acquisitions of Devex Mekatronik (Sweden) and EMP Engineering Alliance
(Germany). The two companies combined had revenue of around EUR 26m and over 250
employees in 2018. To our understanding the revenue generated will mainly fall
under Engineering Solutions and a smaller share under Software and Embedded
Solutions. Our 2019 and 2020 net sales estimates are up by some 3% and 8%
respectively. For Q2 we expect net sales and EBITA of EUR 66.6m (Q2/18: 62.0m)
and EUR 6.9m (Q2/18: 6.2m).

Market outlook comments of interest

Etteplan expects its revenue and operating profit for 2019 to grow clearly
compared to 2018. The acquisitions made will certainly aid in achieving the
guidance and reduces 2020 sales growth concerns, but recent macro development
still warrants cautionary remarks and our focus in the Q2 report will be on
market outlook comments.

HOLD (BUY) with a target price of EUR 9.6

Etteplan’s share price has climbed after the Q1 guidance upgrade and although
still at a slight discount to peers, valuation is looking fairer when also
considering Etteplan’s historical valuation. We downgrade our rating to HOLD
(BUY) and retain our target price of EUR 9.6.



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PIHLAJALINNA - FOCUS ON PROFITABILITY

08.08.2019 - 07.55 | Preview

Pihlajalinna reports its Q2 earnings on next week’s Thursday, August 15th.
During Q2, the company has actively expanded its service network across the
country. The company also announced the launch of an efficiency improvement
program in mid-June. We keep our rating “BUY” with TP of EUR 13.0 ahead of Q2.

Read more

Expanding occupational healthcare network continues

Pihlajalinna has grown fast in H1’19 through M&A and expanding the company’s
service network. The company indicated earlier that it sees opportunities in
expanding its occupational healthcare network as municipalities and other public
sector entities are interested in divesting the occupational healthcare
providers they currently own. As a result of that, Pihlajalinna has expanded its
occupational healthcare network actively in Q2’19 as the company announced the
acquisitions of Raisio’s occupational healthcare center Aurinkoristeys and
Kouvola’s Työterveys. In addition to acquisitions, the company announced that it
will open an occupational healthcare center to Rovaniemi and a healthcare center
to Vaasa. The company has also agreed on cooperation with Sydänsairaala and
pilot cooperation with Pohjola Vakuutus.

Pihlajalinna seeks annual cost savings of EUR 14m

Pihlajalinna announced in mid-June that the company will launch the preparations
of an efficiency improvement program. Through the program, the company seeks to
achieve annual cost savings of EUR 14m. The cost savings sought are meaningful
as the company’s adj. EBIT in 2018 was EUR 14m. Last year, the company underwent
organizational restructuring and in connection with that, conducted
codetermination negotiations. The estimated annual cost savings of these were
EUR 2.8m. The company stated earlier in Q1’19 that its focus in 2019E is to
improve profitability by organic growth, increasing cross-selling and by
addressing profitability issues in the new medical service centers. The commence
of the newest efficiency improvement program supports the company’s long-term
target to reach EBIT margin of 7%, which so far has seemed rather distant. We
will update our estimates accordingly once we have more detailed information
about the program.

We maintain “BUY” with TP of EUR 13

Our 2019E estimates are intact ahead of Q2 earnings. The company expects 2019E
revenue to increase from last year while EBIT is expected to increase notably
from last year. We foresee 2019E revenue of EUR 525m (7.6% y/y), while consensus
is at EUR 520m and EBIT of EUR 24m (71.4% y/y) vs. consensus of EUR 22.7m. The
targeted cost savings add upward pressure on our estimates, but these will be
updated once we have more detailed information. We expect Q2’19 revenue of EUR
134m (cons. EUR 132.5m) and EBIT of EUR 4.8m (cons. EUR 4.6m) resulting in EBIT
margin of 3.6%. On our estimates, Pihlajalinna trades at 19E-20E EV/EBITDA
multiple of 7.2x and 6.6x, which translates into ~25% discount compared to the
peer group. We keep our rating “BUY” with TP of EUR 13 ahead of Q2.



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SUOMINEN - SALES MISS, PROFITABILITY STABLE

07.08.2019 - 13.35 | Earnings Flash

Suominen reported Q2 results with revenue missing our estimate by 8%. However,
the company managed a 9.3% gross margin, which was clearly above our 8.7%
estimate. At first glance we see no major surprises in the sense that margins
have stabilized at higher levels, yet significant nonwovens delivery volumes
were also lost. Suominen also reorganized its business areas into a new
geographical reporting structure (Americas and Europe).

Read more

 * Q2 revenue amounted to EUR 103.8m vs our EUR 112.7m estimate. Revenue
   declined by 6% compared to previous year. USD strengthening relative to EUR
   contributed a positive EUR 3.4m.
 * Gross profit stood at EUR 9.7m vs our EUR 9.8m expectation. Suominen thus
   managed a 9.3% gross margin, whereas we expected 8.7%.
 * EBIT amounted to EUR 2.7m in Q2 vs our EUR 3.3m estimate i.e. Suominen posted
   a 2.6% EBIT margin (compared to our 2.9% projection).
 * Until Jun 30, Suominen’s business areas were Convenience and Care. Since Jul
   1, Suominen’s business areas are Americas and Europe. More than 60% of Q2
   sales were attributable to Americas.
 * Suominen reiterates its 2019 outlook, expecting 2019 sales at 2018 level
   while guiding improving operating profit.



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DETECTION TECHNOLOGY - MBU SLOWDOWN, BUT GROWTH STORY CONTINUES

05.08.2019 - 09.15 | Company update

Detection Technology's Q2 result slightly missed our and consensus expectations.
MBU outlook remains mixed for the rest of the year, but this is temporary, and
we see investment case intact. We maintain BUY rating and target price of 23.5
euros.

Read more

Strong growth in SBU, MBU softness in turn

DT’s Q2 result slightly missed our and consensus expectations with Q2 net sales
of EUR 27.5m (+12.8% y/y) vs. EUR 28.5m/28.1m Evli/consensus estimates. Q2 EBIT
was EUR 4.8m (17.5% margin) vs. EUR 5.4m/5.1m Evli/cons. SBU sales were clearly
better than we expected at 19.4 MEUR (+27.4%, 17.8 MEUR Evli estimate), due to
strong demand in China and increasing CT investments related to new EU and US
airport standards. MBU Q2 sales were 8.1 MEUR (-11.5% y/y, 10.7 MEUR Evli
estimate), which was unexpected since DT in Q1 expected both BU’s to grow in Q2.
The decline was attributed to a slowdown in medical CT demand and the sooner
than expected ramp down of a key customer’s product. While SBU is now in turn
enjoying good demand, the softness in the medical market is expected to be
temporary but continuing at least until the end of the year.

Visibility remains low, but overall investment case intact

DT revised its outlook for the rest of the year citing short visibility into
customer demand and unpredictable trade politics. DT previously expected total
sales to grow during the second half of the year. DT is now guiding for Q3 sales
to grow above 10%. Based on the result, we have made only small changes to our
headline estimates 2019 and onwards. We expect 2019E net sales to grow 13.7% to
EUR 107m driven by SBU’s return to growth of 28% on weak comparables. We expect
‘19E MBU net sales to decline by -7.6% due to the ramp-down of key customer’s
product in H2 and slowdown in medical demand. We expect ‘19E EBIT to be at last
year’s level due to increase in R&D spending, increasing share of SBU sales
affecting the mix, as well as increased pricing competition in both segments.

Strategy update for 2025 period, no change to medium-term financial targets

In conjunction with the result, DT announced its updated strategy until 2025.
The company's new strategic target is to be the growth leader in digital x-ray
imaging detector solutions and a significant player in other technologies and
applications where the company sees good business opportunities. The company
estimates that the market for digital x-ray imaging detector solutions will be
around EUR 3 billion in 2025. DT’s previous strategy until 2020 was based on
being the leader in computed tomography and line-scan x-ray detectors and
solutions. The total market, as per the company's previous strategy, is
estimated to be around EUR 700 million in 2020. Given DT’s current estimated
2019E sales of above 100 MEUR, it’s fair to say that DT is a leader in the scope
of the previous strategy. The new 2025 strategy’s market scope is broader, but
DT’s medium-term financial targets remain unchanged; sales growth at least 15%
per annum and operating margin at or above 15% in the medium term.

DT is well positioned to benefit from digitalization since the company’s product
portfolio already consists of digital radiography products that are used in
digital X-ray solutions. There are also new emerging technologies (e.g. CMOS,
multi energy) that DT has invested in with the strategic goal to be the growth
leader when the emerging technologies become more adapted. To our understanding,
the security X-ray equipment manufacturers have been quick to adopt
digitalization. However, medical and industrial equipment manufacturers are at
an earlier stage of adopting the technology.

BUY recommendation maintained

On our estimates, DT is trading at discounts on EV/EBIT and P/E multiples for
’19-20E. Although visibility is short and trade politics unpredictable, we see
longer term investment case intact and therefore discount unjustified. With our
estimates broadly intact, we maintain our BUY recommendation with target price
of 23.5 euros. Our target price values DT at EV/EBIT-multiple of 16x and 13x on
our ‘19E and ‘20E estimates, which is still clearly lower than peer group
despite DT’s strong metrics.

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DETECTION TECHNOLOGY - Q2 RESULT MISS, MBU OUTLOOK SOFTER

02.08.2019 - 09.20 | Earnings Flash

Q2 net sales at EUR 27.5m (+12.8% y/y) vs. EUR 28.5m/28.1m Evli/consensus
estimates. MBU sales were EUR 8.1m (EUR 10.7m our expectation) and SBU sales
were EUR 19.4m (EUR 17.8m our expectation). DT’s Q2 EBIT came in at EUR 4.8m vs.
our estimates of EUR 5.4m (EUR 5.1m cons).

Read more

 * Group level results: Q2 net sales amounted to EUR 27.5m (+12.8% y/y) vs. EUR
   28.5m/28.1m Evli/consensus estimates. Q2 EBIT was EUR 4.8m (17.5% margin) vs.
   EUR 5.4m/5.1m Evli/cons. R&D costs amounted to EUR 2.9m or 10.7% of net
   sales.
 * Medical Business Unit (MBU) delivered net sales of EUR 8.1m which was below
   our estimate of EUR 10.7m. Net sales of MBU decreased by -11.5% y/y due to
   softening demand and earlier than expected ramp down of one key customer’s
   product.
 * Security and Industrial Business Unit (SBU) had net sales of EUR 19.4m vs.
   EUR 17.8m Evli estimate. SBU sales grew 27.4% y/y due to strong demand in
   China.
 * Outlook updated: sales will grow in the SBU business and decrease in the MBU
   business in the third quarter. The company expects its net sales to increase
   in the third quarter in line with the company's financial targets. (Previous:
   the company's total net sales are expected to grow in the second half of the
   year.)
 * Medium-term business outlook is unchanged: to increase sales by at least 15%
   p.a. and to achieve an EBIT margin at or above 15% in the medium term.
 * Strategy update: new strategic target is to be a growth leader in digital
   x-ray imaging detector solutions. DT estimates the market size of digital
   x-ray detectors to be around EUR 3 billion in 2025. DT’s focus in the 2020
   strategy done five years ago was primarily on the CT and line scan x-ray
   detector and solution markets, which size is estimated to be around EUR 700
   million in 2020.



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ASPO - SUPRAMAXES POSTED LOSSES IN Q2

02.08.2019 - 09.15 | Company update

Aspo lowered its FY 2019 guidance yesterday due to ESL Shipping’s weak Q2 result
as the dry bulk carrier’s two Supramax vessels operated at a loss. Aspo
previously expected 2019 operating profit to be in the EUR 28-33m range, but now
guides EUR 24-30m (the company managed EUR 20.6m in 2018). We previously
estimated Aspo’s FY 2019 EBIT at EUR 31m; our revised estimate stands at EUR
28m. Our target price is now EUR 9.25 (9.75) per share. Our new rating is HOLD
(BUY).

Read more

We update our estimates for ESL Shipping

Aspo says ESL’s Q2’19 EBIT will decline y/y as the two Supramax vessels posted
losses. Aspo also states main customers’ shipping volumes (e.g. SSAB) decreased
substantially during the summer months, thus weakening operational efficiency.
ESL reported EUR 4.3m in Q2’18 EBIT. Whereas we previously expected ESL to post
EUR 4.2m in Q2’19 EBIT, we now expect the dry bulk carrier to have generated EUR
1.8m in EBIT during the quarter. We also update our estimates for the coming
quarters. We previously expected ESL’s FY 2019 EBIT at EUR 19m, and now estimate
EUR 16m. For FY 2020 we project EUR 23m (previously EUR 26m). There was no
update concerning the two new LNG vessels, but Aspo has previously said the
crane problems have now been fixed and thus we continue to expect ESL to achieve
significant earnings improvement during the second half of 2019.

We leave Telko and Leipurin estimates unchanged

We are not making changes to our estimates for Telko and Leipurin this time. Our
revised estimates for ESL mean we now expect Aspo to have generated EUR 5.2m in
Q2 EBIT (vs EUR 7.1m a year ago). Our previous estimate stood at EUR 7.6m. We
now expect Aspo to manage EUR 28m in FY 2019 EBIT (previously EUR 31m). Aspo’s
new guidance range for FY 2019 EBIT is EUR 24-30m (previously EUR 28-33m).

Our updated TP is EUR 9.25 (9.75); new rating HOLD (BUY)

Following our model update we now expect Aspo to post EUR 40m in EBIT next year.
Our new TP is EUR 9.25 (9.75), reflecting lower SOTP valuation. Our rating is
now HOLD (BUY).



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VERKKOKAUPPA.COM - GROWTH INVESTMENTS IMPACTING PROFITABILITY

02.08.2019 - 09.10 | Preview

Verkkokauppa.com will report its Q2 earnings on next week’s Friday, August 9th.
We expect the competition in consumer electronics market has continued tight and
price driven. We expect Q2’19 revenue to grow and profitability to remain flat.
We keep our rating “Buy” with TP of EUR 4.7 ahead of Q2.

Read more

Marketing expenses hampering EBIT improvement

According to Verkkokauppa.com, the company continues focusing on growth and
enhancing consumer experience. The company has made extensive investments in
marketing from Q4’18 onwards and has indicated that the investments will
continue throughout 2019. We expect these to hamper EBIT improvement this year.
Verkkokauppa.com’s guidance for 2019E revenue is EUR 500-550m while EBIT is
expected to be between EUR 11-17m. We expect 2019E revenue of EUR 522m (cons.
EUR 524m) and EBIT of EUR 13m (cons. EUR 13m). We expect the increased revenue
from the Raisio store, which was opened in Q1’18, to stabilize Q2’19 onwards.

Tight competition expected to continue

Despite of the tight competition, the company was able to strengthen its market
share in Q1’19 but as the company has indicated, Q2 is normally weaker. As we
expect the competition has remained fierce and price driven, we do not expect
any improvements in Q2 margins. We expect Q2 revenue of EUR 111m (8.4% y/y)
while consensus is at EUR 114m and EBIT of EUR 1m (cons. of EUR 1.4m) resulting
in EBIT margin of 0.8%. We expect gross margin of 14.5% in Q2’19 (Q2’18: 14.7%).
Possible wholesale/B2B deliveries might further impact gross margin in Q2.

“Buy” with TP of EUR 4.7

We have kept our estimates intact ahead of Q2 earnings. On our estimates,
Verkkokauppa.com is trading at 19E-20E EV/EBIT multiple of 10.7x and 7.7x which
translates into ~50-70% discount compared to the online-focused Nordic and
European peer group. We keep our rating “BUY” with target price of EUR 4.7 ahead
of Q2.



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RAUTE - MORE ORDERS NEEDED

01.08.2019 - 09.25 | Company update

Raute’s Q2 EBIT missed our estimates, but overall picture remains unchanged.
Market uncertainty is postponing investment decisions. We adjust our estimates
slightly downwards, lower our TP to 23.5 (25.5). Our rating is now HOLD (BUY).

Read more

Market uncertainty continues

Raute’s Q2 EBIT was EUR 2.3m, missing our estimate of EUR 2.9m. The miss was due
to due to a few projects causing extra delay costs. Revenue amounted to EUR
37.0m vs. our EUR 35.6m estimate (EUR 43.7m in Q2’18). While project deliveries
stood at a relatively low EUR 18m (vs EUR 30.7m a year ago), services revenue
was EUR 19m, i.e. increasing by almost 50% y/y. Raute held its outlook and
repeated the market remains uncertain, with current demand mostly attributable
to larger as well as smaller projects, while within mid-sized orders there’s
unusual silence. Raute says so far it has only seen investment decisions and
negotiations being delayed instead of actual cancellations. Activity concerning
potential larger projects remains at a good level, and services demand remains
stable.

Order book and intake still healthy, but more is needed

Raute’s Q2 order intake, at EUR 26m, declined only slightly compared to the EUR
28m figure a year earlier. Considering Q2’19 did not include any new major
capacity projects the figure could even be described as relatively strong. The
current EUR 72m order book is clearly below the EUR 120-140m record 2018 highs.
The book covers an exceptionally long period of time as a significant share of
deliveries is scheduled for 2020 (and some even for 2021). Therefore, Raute
needs clear pick-up in orders during H2’19 to reach our previous FY 2019 revenue
estimate (EUR 158m). While larger orders may materialize shortly (e.g Russia),
we adjust our FY 2019 estimates downwards to reflect the increased uncertainty.
We now expect for 2019E EUR 148m in revenue and EUR 10m in EBIT (6.8% margin).

European revenue exposure set to decline due to low orders

Geographical sales split didn’t change much during the second quarter as Europe
accounted for roughly 45% of revenue, Russia for 25% and North America ca. 15%.
While the split has remained steady compared to last year, Europe’s share is
bound to decline significantly in the coming quarters due to much lower order
intake during 2019. So far this year European order intake has been a fraction
of previous year’s volume (EUR 9m in H1’19 compared to EUR 49m in H1’18). Russia
has developed strong, almost doubling order intake in H1’19 (EUR 26m) compared
to year earlier (EUR 14m), while North American orders have been stable,
increasing by a couple of million to EUR 12m. In other words, Russia and North
America are set to generate major portions of revenue next year.

Valuation is low but earnings development uncertain

On our revised estimates Raute trades ca. 4x EV/EBITDA and 6x EV/EBIT ‘19e
(compared to their respective 6x and 8x historical averages). Due to uncertain
earnings development, we see lower multiples justified. We revise our TP to
reflect our slightly lower estimates; our TP is EUR 23.5 (25.5); rate HOLD
(BUY).



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RAUTE - PROJECT DELAYS BURDEN EBIT MARGIN

31.07.2019 - 09.45 | Earnings Flash

Raute’s EUR 37m Q2 revenue topped our estimate slightly, helped by strong
services sales. Nevertheless, operating margin remained on the weak side due to
the cost burden caused by a few delayed projects. Order book stands some 40%
lower than a year ago, however it now spans an exceptionally long period.

Read more

 * Q2 revenue amounted to EUR 37.0m vs our EUR 35.6m estimate (EUR 38.2m
   consensus).
 * Order intake was EUR 26m compared to EUR 28m a year ago. Order book stood at
   EUR 72m at the end of Q2 (compared to EUR 127m a year ago). Raute says a
   significant proportion of the order book is scheduled for 2020 (and a small
   amount for 2021) i.e. the order book is stretched exceptionally long.
 * Q2 operating profit was EUR 2.3m vs our EUR 2.9m estimate (EUR 2.7m
   consensus). Operating margin therefore amounted to 6.3% vs our 8.1%
   expectation (7.1% consensus). A few delayed projects lead to extra costs.
 * Raute says current demand is focused on major new capacity projects as well
   as services and small-scale improvements, whereas the share of mid-sized
   projects is exceptionally low and causes fluctuations in order intake. All in
   all, market uncertainty has increased, causing delays in project
   negotiations.
 * Raute changed its FY 2019 guidance on Jun 25, expecting revenue and operating
   profit to decrease compared to previous record-high year.



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TOKMANNI - BOOM IN STORE OPENINGS IN Q2

31.07.2019 - 09.00 | Preview

Tokmanni will report its Q2 result on next week’s Thursday, August 8th. The
company has opened and relocated stores in a good pace in Q2 and therefore the
company should clearly exceed its annual expansion targets in 2019. We expect Q2
LFL growth of 2.5% and continued profitability improvements. We keep our rating
“HOLD” with TP of EUR 9.0 ahead of Q2.

Read more

New store openings in Q2

Tokmanni’s target is to increase its store network to above 200 stores and to
increase its retail space by some 12,000 square meters annually which means
approximately five new store openings per year. During Q2’19, Tokmanni has
reopened the old Ale-Makasiini stores under the Tokmanni brand in Central
Finland, which the company acquired in Q4’18. The company has also relocated
stores and opened new stores in Tesoma and Loppi in Q2. Due to the active
opening pace in H1, Tokmanni will exceed its annual target of approx. five new
store openings/year.

Improving profitability in 2019E

Tokmanni is focusing towards improved profitability in 2019E. The company aims
to reach ~9% adj. EBIT margin in long-term. Profitability improvements will be
made through gross margin and operational efficiency improvements such as
pushing OPEX as % of sales down. Some results were shown already in Q1’19 and we
expect the same trend to continue in Q2. We expect 2019E EBIT of EUR 62m (~19%
growth y/y), while consensus is at EUR 61m.

We keep our rating “HOLD” with TP of EUR 9.0

We have kept our estimates intact and expect Q2 revenue of EUR 236m (cons. EUR
234m) and gross margin of 35.5%. Tokmanni’s LFL growth was exceptionally high in
Q2’18 (7.7%). We have taken a more conservative view for Q2’19 LFL growth and
expect LFL growth of 2.5%. We foresee Q2 EBIT of EUR 16 (cons. EUR 15m) and EBIT
margin of 6.7%. On our estimates, Tokmanni trades at 19E-20E EV/EBIT multiple of
13.8x and 11.8x (~2-5% premium compared to the peer group). We keep our rating
“HOLD” with TP of EUR 9.0 ahead of Q2.



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TALENOM - DOWNGRADE TO HOLD

30.07.2019 - 09.15 | Company update

Talenom’s top- and bottom-line figures in Q2 were quite in line with our
estimates, and the larger piece of news was the change of CEO. We have made
mostly minor upwards revisions to our estimates due to acquisitions and a faster
than anticipated implementation of new automation procedures to the bookkeeping
automation line. With valuation becoming stretched due to share price inclines
we downgrade to HOLD (BUY) with a TP of EUR 36.0 (35.0)

Read more

Earnings in line, CEO to change

Talenom’s Q2 earnings did not deliver any major surprises, with net sales of EUR
14.8m (Evli 14.4m) and EBIT of EUR 3.2m (Evli 3.2m) well in line with our
estimates, with the main news being the change of CEO. Otto-Pekka Huhtala
(former deputy CEO) has started as CEO as of the 29.7.2019. Talenom gave a
limited update on the Talenom Financing Services, having provided EUR 31m
financing during H1/19. The potential for the service area remains promising but
we expect an insignificant near-term impact.

Estimates revisions mostly minor

We have made minor upwards revisions to our estimates, with only minor
adjustments to our 2019 estimates, now expecting 2019 sales of EUR 59.9m and
EBIT of EUR 11.7m. We have made slight adjustments to sales estimates to account
for the Wasa Tilit and WT Företagstjänster acquisitions, also raising our 2020E
sales growth estimate by 2pp to 18%. Talenom has also started to implement the
new instance of automation, thus eliminating dependencies to other third-party
accounting software. The implementation schedule is ahead of our previous
estimates, prompting a minor adjustment to our H2/19 earnings estimates.

HOLD (BUY) with a target price of EUR 36.0 (35.0)

Talenom has enjoyed substantial share price inclines and although Talenom on our
estimates is set to continue to deliver solid sales and earnings growth,
valuation is becoming a stretch. Our target price and estimates value Talenom at
a 2019 P/E multiple of 28.5x, which we still consider justifiable. We downgrade
our rating to HOLD (BUY).



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SUOMINEN - MARGIN GAINS, VOLUME LOSSES

30.07.2019 - 09.15 | Preview

Suominen reports Q2 results next week, on Wed, Aug 7. In Q1 the company’s gross
margin improved to 8.1% (compared to the 6.2% low in Q4’18) as raw material
costs remained stable and price hikes came into effect. We expect the gross
margin improvement trend to continue throughout 2019, but the main question
concerns volume losses following price hikes. We leave our previous estimates
unchanged for now. Our target price still stands at EUR 2.85 per share; our new
rating is BUY (HOLD).

Read more

Volume declines in focus following the hiking of prices

In our view Suominen’s declining earnings trend bottomed out in Q1 as price
hikes and stabilizing raw material costs drove improvement in gross margin.
Q1’19 gross margin stood at 8.1%; we expect Q2 gross margin at 8.7%. However,
the company lost significant delivery volumes. We estimate Suominen’s delivery
volume losses amounted to some 9% in Q1; we expect losses of similar magnitude
for the remainder of 2019. Our expectation for Q2 is EUR 113m in revenue and EUR
3.3m in EBIT.

Expect flat input costs and price hikes to lift ‘19e earnings

While the EURUSD exchange rate has remained steady during the last three months,
European softwood pulp prices have declined further, by about 10%. The
development is beneficial from Suominen’s point of view, softwood pulp being a
key nonwovens raw material. Meanwhile polypropylene prices have increased by a
roughly similar percentage. According to Lenzing, viscose and polyester prices
remained stable during spring (development until Apr 15). All in all, raw
material costs have been flat. We expect ‘19e revenue at EUR 436m and EBIT at
EUR 13.3m, assuming stable input costs for the remainder of the year.

We leave our estimates intact ahead of the report

Suominen is valued at ca. 6.0x EV/EBITDA ‘19e (on our estimates) vs historical
average of 6.5x. Suominen’s peer group multiples have gained during the last
three months, and although there is still uncertainty concerning delivery
volumes, we consider the current valuation undemanding. We retain our TP of EUR
2.85 per share, and thus our updated rating is BUY (HOLD).



Open report


TALENOM - IN LINE WITH ESTIMATES

29.07.2019 - 13.15 | Earnings Flash

Talenom’s Q2 results were well in line with our estimates, with revenue at EUR
14.8m (Evli EUR 14.4m) and EBIT at EUR 3.2m (Evli EUR 3.2m). Talenom also
reported that its CEO will change, with deputy CEO Otto-Pekka Huhtala taking
over as CEO from the 29.7.2019.

Read more

 * Talenom’s net sales in Q2 amounted to EUR 14.8m (EUR 12.5m during Q2/18),
   slightly above our estimates (Evli EUR 14.4m). Q2 revenue growth was at 17.7%
   y/y.
 * The operating profit in Q2 amounted to EUR 3.2m (EUR 2.6m in Q2/18), in line
   with our estimates (Evli EUR 3.2m), at a margin of 21.4%.
 * Talenom’s CEO will step as of the 29.7.2019 and will be replaced by current
   deputy CEO Otto-Pekka Huhtala
 * Talenom’s guidance intact: the net sales growth rate is expected to be
   greater than in 2018 and the operating profit margin to improve compared to
   2018
 * Net investments during the H1/19 amounted to EUR 9.5m (H1/18: 5.5m). The
   acquisitions of Wakers Consulting and Wasa Tilit and Företagstjänster
   amounted to EUR 4.2m



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RAUTE - MARKET UNCERTAINTY JUSTIFIES CAUTION

29.07.2019 - 09.45 | Preview

Raute reports Q2 results this week, on Wed, Jul 31. The company downgraded its
FY 2019 guidance recently, on Jun 25. Raute had previously expected flat revenue
and operating profit for FY 2019, but now expects revenue and EBIT to be lower
than last year. We keep our target price at EUR 25.5 per share; our rating is
now BUY (HOLD).

Read more

We expect strong Q2 EBIT margin due to inventory timings

Even though Raute recently moderated its guidance for FY 2019, we expect Q2 to
have been quite strong in terms of operating margin; Raute’s Q1 operating margin
amounted to a relatively weak 6.3% due to unfavorable timing of certain
inventory-related line items, which the company said were some EUR 0.5- 1.0m in
magnitude. We therefore expect Q2 operating margin at 8.1% (vs 7.3% a year ago
and 6.3% in Q1). Our EUR 35.6m revenue and EUR 2.9m EBIT estimates for Q2
compare to the respective EUR 38.2m and EUR 2.7m consensus estimates.

Lowered FY 2019 outlook as project deliveries were delayed

Raute lowered guidance on Jun 25 due to delayed schedules of certain challenging
project deliveries and postponed negotiations concerning some larger orders not
yet closed. Upon lowering its outlook, Raute said it continues to view the
operating environment stable and sees healthy activity related to potential mill
capacity expansion projects. However, Raute also cited elevated uncertainty due
to increased share of smaller customers, whose decision-making is more
unpredictable. We expect 2019 revenue to decrease by a double-digit percentage
to EUR 158m (EUR 156m consensus) and EBIT to decline to EUR 11m (same as
consensus) due to project uncertainties and slower order book development (EUR
84m Q1’19 vs. EUR 142m Q1’18).

Low multiples warranted due to outlook uncertainties

Raute trades around 4x EV/EBITDA and 5x EV/EBIT on our 2019 estimates. We leave
our estimates unchanged for now and retain our EUR 25.5 target price. Our new
rating is thus BUY (HOLD) as Raute’s share price has declined since our previous
update.



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DETECTION TECHNOLOGY - EXPECTING GOOD GROWTH, FLAT EBIT

29.07.2019 - 09.30 | Preview

Detection Technology will report Q2 earnings this Friday, August 2nd. Our focus
will be on commentary regarding the market outlook for both security and medical
business units. With SBU currently exhibiting a good growth profile, we’re
looking for color on the possibility of MBU growth mitigating the negative
effects of the ramp-down of one of DT’s key medical customer’s product in H2.
Our rating and target price remain intact ahead of Q2.

Read more

Expecting good growth in both SBU and MBU

DT has guided for double digit growth for both BU’s in Q2. We estimate SBU
growing 17% and MBU 16% y/y, which is in line with DT’s Q2 guidance. We expect
Q2 net sales of 28.5 MEUR (+16.7% y/y, 28.1 MEUR cons.) and 5.4 MEUR EBIT (+2%
y/y), 5.1 MEUR cons.). Our EBIT expectation is flat due to increase in R&D
spending. Overall, the outlook for SBU is positive with the security market
picking up momentum after a decline in the end of last year. Demand is
increasing due to the Chinese security market returning to growth and increasing
CT investments related to new EU and US airport standards. The outlook for MBU
is however more mixed with one key MBU customer ramping down sales of one of
DT’s product in H2. Despite this, H2 net sales are expected to grow compared to
last year. With SBU exhibiting a good growth profile, we’re looking for color on
the possibility of MBU growth mitigating the effects of the product ramp-down in
H2.

Flat EBIT this year, but growth story continues

For full year 2019E, we expect net sales to grow 11% to EUR 104m driven by SBU’s
return to growth of 17.8% on weak comparables. We expect ‘19E MBU net sales
growth to be flat due to the ramp-down of key customer’s product in H2. We
expect ‘19E EBIT to be at last year’s level due to increase in R&D spending,
increasing share of SBU sales affecting the mix, as well as increased pricing
competition.

BUY rating and TP of 23.5 euros maintained ahead of Q2

Our estimates, rating and target price of 23.5 euros remain unchanged ahead of
Q2 report.

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CONSTI - EARNINGS VISIBILITY STILL AN ISSUE

29.07.2019 - 08.05 | Company update

Consti’s Q2 results were slightly weaker than expected, as the EBIT of EUR 0.1m
fell below our estimates (Evli 0.6m), further impacted by an individual building
purpose modification project. The order backlog development raises some concerns
for near-term sales growth, but our eyes are still on profitability
improvements.

Read more

Project burden still visible in profitability

Consti’s Q2 results fell slightly short of our expectations. Profitability was
as expected further burdened by the impact of an individual building purpose
modification project, but EBIT in Q2 was still weaker than anticipated, at EUR
0.1m (Evli EUR 0.6m). The revenue of EUR 81.2m was in line with our estimates
(Evli EUR 81.3m), aided by the completion of certain larger projects. The order
backlog of EUR 227m was down 20.8% y/y due to the high sales and lower orders
received.

Order backlog raises some concerns for sales growth

We have made slight revisions to our estimates, mainly to near-term net sales
estimates. Consti’s order backlog and orders received development has in our
view been relatively meager during H1/19, which coupled with the continued sales
growth during H1 opens up some concern for sales development in 2020. We have
lowered our 2019-2021E sales CAGR estimate to 1%, with essentially flat growth
in 2020. Due to the past profitability challenges we do not however see sales
growth as a primary concern and see that Consti’s near-term focus will remain on
improving profitability. We expect a notable increase in profitability during
H2/19, as the project that burdened H1 is expected to be completed and expect
2019 EBIT of EUR 5.2m.

HOLD with a TP of EUR 5.80

Consti trades below peers, in particular on 2020 estimates when earnings are
expected to rebound. Although profitability according to Consti has remained at
good levels, when excluding the profitability burdening large projects, we see
that weak visibility in the underlying profitability still warrants caution and
retain our HOLD-rating with a target price of EUR 5.80.



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NEXT GAMES - WELCOME TURNAROUND PROGRESS

29.07.2019 - 00.00 | Company update

Next Games’ profitability saw improvement during Q2, with the adj. EBIT rising
to EUR -0.5m (Q2/18: -2.0m). Revenue grew 65% y/y to EUR 9.4m but was below our
estimates mainly due to a lower than expected DAU for Our World. Development of
the financial situation saw positive signs, but game launch financing still
remains a concern.

Read more

Earnings improvement and mixed Our World progress

Next Games reported decent Q2 results, with EBIT still in the red, at EUR -1.1m,
but seeing improvements and in line with our estimates (Evli EUR -1.0m). The
adj. EBIT was slightly below our estimates, at EUR -0.5m (Evli 0.1m). Revenue
saw growth of 65% y/y to EUR 9.4m, below our estimates (Evli 10.4m) mainly due
to a lower than expected DAU for Our World. Q2 did however see the game’s ARPDAU
improve to a commendable EUR 0.34 (from IAP’s). Retention issues, however, led
to marketing investment levels for the game rising to above planned levels.

Financial situation progress but concerns remain

We have made some adjustments to our estimates, mainly due to having revised our
launch timetable estimate for Blade Runner Nexus from Q3/2019 to Q4/2019. Our
estimates also include a minor adjustment for marketing revenue from Our World,
which based on figures posted in Q2 shows promising revenue potential. We expect
revenue in 2019 to grow 21% to EUR 42.5m (prev. 47.8m), while expecting
profitability to remain negative, with an adj. EBIT of EUR -3.0m (prev. EUR
-0.5m). A key near-term concern remains the launch of Blade Runner and financing
of any more substantial marketing investments that are to be expected in
conjunction with the launch. A positive sign for the financial situation was the
stabilization of the cash balance and a renewed credit limit guarantee.

HOLD with a target price of EUR 1.50

Next Games turnaround project has seen good progress and earnings have seen
improvements compared to the near past. With the uncertainty relating to
financing of upcoming game launches justifying valuation upside remains a
challenge and we retain our HOLD-rating and target price of EUR 1.50.



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CONSTI - EARNINGS REMAIN WEAKER

26.07.2019 - 09.00 | Earnings Flash

Consti's net sales in Q2 amounted to EUR 81.2m, in line with our estimates (Evli
EUR 81.3m). EBIT amounted to EUR 0.1m, below our estimates (Evli EUR 0.6m).
Profitability continued to be affected by performance obligations of a single
building purpose modification project.

Read more

 * Net sales in Q2 were EUR 81.2m (EUR 77.8m in Q2/18), in line with our
   estimates (Evli EUR 81.3m). Growth in Q2 amounted to 4.4 % y/y. Growth was
   aided by an increase in volume of large comprehensive renovation projects.
 * Operating profit in Q2 amounted to EUR 0.1m (EUR 1.7m in Q2/18), below our
   estimates (Evli EUR 0.6m), at a margin of 0.1 %. The profitability was still
   burdened by remaining performance obligations of an individual building
   purpose modification project, that was essentially completed by the end of
   Q2/19. The impact was included in our estimates but was larger than
   anticipated.
 * The order backlog in Q2 was EUR 227m (EUR 286m in Q2/18), down by 20.8 %. The
   order intake amounted to EUR 57.4m, down 35.2% y/y, reflecting the company’s
   more disciplined bidding procedures.
 * Guidance reiterated: The Company estimates that its operating result for 2019
   will improve compared to 2018.



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NEXT GAMES - HEALTHY EARNINGS IMPROVEMENT

26.07.2019 - 08.40 | Earnings Flash

Next Games' net sales in Q2 amounted to EUR 9.4m, below our estimates (Evli EUR
10.4m). EBIT amounted to EUR -1.1m, in line with our estimates (Evli EUR -1.0m)
and the adj. EBIT to EUR -0.5m (Evli EUR 0.1m). TWD: OW boasted an impressive
ARPDAU of EUR 0.34 (from IAP’s) during the quarter, while challenges with
retention led to higher than planned marketing investments levels.

Read more

 * Net sales in Q2 were EUR 9.4m (EUR 5.7m in Q2/18), below our estimates (Evli
   EUR 10.4m). Growth in Q2 amounted to 65 % y/y.
 * Operating profit in Q2 amounted to EUR -1.1m (EUR -2.4m in Q2/18), in line
   with our estimates (Evli EUR -1m), while adj. EBIT amounted to EUR -0.5m
   (Evli EUR 0.1m). Monthly fixed costs in Q2 amounted to EUR 1.2m following
   successful implementation of the savings program (co’s target EUR 1.1-1.2m).
 * DAU during Q2/19 was 350k (Q2/18: 306k). MAU was 1.16m (Q2/18: 0.98m). ARPDAU
   was EUR 0.28 in Q2/19 (Q2/18: EUR 0.2).
 * TWD: NML - DAU 190k (Q2/18: 287k), MAU 540k (Q2/18: 884k), ARPDAU EUR 0.22
   (Q2/18: 0.21).
 * TWD: OW - DAU 155k, MAU 602k, ARPDAU EUR 0.34 (from IAP’s).
 * TWD: OW boasted an impressive ARPDAU of EUR 0.34 (from IAP’s) during the
   quarter, but challenges with player retention led to marketing investments
   being at a higher level than planned.
 * With the new operating model, the company now has nine new concepts or
   prototypes in development.
 * The company’s cash balance stood at EUR 4.7m at the end of the quarter
   compared to EUR 4.8m at the end of the first quarter of 2019.



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EXEL COMPOSITES - IMPROVEMENT AMID BREEZY CONDITIONS

24.07.2019 - 09.30 | Company update

Exel Composites achieved an 8.5% adjusted operating margin in Q2, a
profitability level some 200bps above our and consensus expectations. Exel’s
recent decision to retain its ambitious long-term financial targets also speaks
volumes about the company’s conviction on wind energy growth potential. So far
development in 2019 has been encouraging, although the targets represent a gap
which will not be closed for a while yet. We retain our BUY rating; our target
price still stands at EUR 5 per share.

Read more

Wind energy sector continued to support volumes

Muted development extended within the Industrial Applications segment and
Asia-Pacific region as telecommunications sector volumes remained weak. The Rest
of the World region more than doubled its H1’19 revenues y/y due to the DSC
acquisition; the transaction also boosted the Construction & Infrastructure
segment thanks to the U.S. unit’s wind energy exposure. DSC remained
unprofitable in Q2 (cost measures’ fruits should be visible already during Q3).

Financial targets remain stiff compared to current figures

Exel lately confirmed its long-term financial targets for 2019-22, continuing to
target adjusted operating margin at a level above 10% while aiming for ROCE
north of 20%. Exel’s Q2 recorded the respective figures at 8.5% and 14.1%. Q2
gross margin was strong at 63% i.e. somewhat above the typical level. We
continue to expect the company’s ongoing volume shift to wind energy
applications will put slight pressure on gross margin; hence the realization of
profit-based targets depends on continued strong volume growth. Exel also
introduced a net gearing target (at or below 60%), according to which the
company should more than halve its indebtedness from the current 123% level.
Exel retained its guidance for FY 2019 (expects higher revenue and adj. EBIT).

Current valuation level means there’s room for upside

We leave our revenue estimates largely intact but revise our operating margin
estimates slightly upwards. Exel currently trades below 7x EV/EBITDA ‘19e (on
our estimates) vs the historical 8-9x levels. Our rating remains BUY, our TP at
EUR 5.



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INNOFACTOR - STARTING TO SHOW EARNINGS STABILITY

24.07.2019 - 09.15 | Company update

Innofactor’s Q2 results did not present any surprises and both net sales
(Act./Evli EUR 16.7m/16.8m) and EBITDA (Act./Evli EUR 1.1m/1.0m) were well in
line with our estimates. With a sales decline during H1/19 Innofactor will need
to deliver a pick up in sales during H2/19, which should be made possible by the
solid order backlog and new recruitments and actions to turn the sales growth in
Denmark and Sweden back on track. We retain our BUY-rating with a target price
of EUR 0.80.

Read more

Q2 results well in line with our expectations

Innofactor’s Q2 results did not present any surprises and were well in line with
our estimates. Revenue declined 2.1% y/y to EUR 16.7m (Evli EUR 16.8m) while
EBITDA improved to EUR 1.1m (Evli EUR 1.0m). Profitability continues to be aided
by the actions taken during H2/18, as the revenue per employee increased by some
8%. The improved profitability also saw the operating cash flow increasing to
EUR 2.1m in H1/19 (H1/18: EUR 0.4m).

Sales growth uplift needed during H2/19

Our estimates remain unchanged post-Q2, expecting net sales of EUR 64.0m and an
EBITDA of EUR 4.7m in 2019. Innofactor has estimated for its net sales in 2019
to increase from 2018 and EBITDA to amount to EUR 4.0-6.0m. We expect net sales
in 2019 to increase on slightly, by 1.3% from 2018. With net sales in H1/19 2.0%
below H1/18 a pick-up in sales growth is required during H2/19. According to
management sales growth is supported by the order backlog and recent larger new
recruitments. Denmark and Sweden are expected to show growth in sales by Q4.

BUY with a target price of EUR 0.80

On our estimates Innofactor trades at a discount to peers, namely on EV/EBITDA
and purchase price amortization adjusted multiples. With our estimates and views
on Innofactor unchanged post-Q2 we retain our BUY-rating and target price of EUR
0.80.



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EXEL COMPOSITES - POSITIVE DEVELOPMENT CONTINUED

23.07.2019 - 10.45 | Earnings Flash

Exel Composites reported Q2 revenue at EUR 26.5m, in line with our expectations.
Adjusted operating profit, at EUR 2.2m, was above our estimate. The company’s
cost savings program is delivering good results.

Read more

 * Q2 revenue amounted to EUR 26.5m vs our EUR 26.7m estimate (consensus at EUR
   27.4m).
 * Q2 adjusted operating profit stood at EUR 2.2m vs our EUR 1.7m expectation
   (consensus at EUR 1.8m). The 8.5% adjusted operating margin was clearly above
   our 6.3% estimate, as well as the consensus.
 * The 4.8% increase in revenue y/y was mainly attributable to the acquisition
   of DSC (completed in May 2018). The wind energy industry continued to support
   volumes. The telecommunications sector remained weak.
 * The acquisition of DSC was reflected in the increase in revenue within the
   Rest of the World region. Asia- Pacific revenues declined due to
   telecommunications volumes. European revenue remained flat y/y.
 * The cost savings program is proceeding according to plan. The company expects
   to fully realize the EUR 3m annual savings target in 2020. DSC remained in
   the red during Q2.
 * Guidance for full year 2019 remains unchanged as the company expects revenue
   and adjusted operating profit to increase compared to previous year.



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INNOFACTOR - IN LINE WITH EXPECTATIONS

23.07.2019 - 09.15 | Earnings Flash

Innofactor’s Q2 results were in line with our estimates. The net sales in Q2
amounted to EUR 16.7m (Evli EUR 16.8m), while EBITDA amounted to EUR 1.1m (Evli
EUR 1.0m).

Read more

 * Net sales in Q2 were EUR 16.7m (EUR 17m in Q2/18), in line with our estimates
   (Evli EUR 16.8m). Net sales in Q2 declined -2.1 % y/y.
 * Operating profit in Q2 amounted to EUR 0.2m (EUR -0.6m in Q2/18), in line
   with our estimates (Evli EUR 0.1m), at a margin of 0.9 %.
 * EBITDA in Q2 was EUR 1.1m (EUR 0m in Q2/18), in line with our estimates (Evli
   EUR 1m), at an EBITDA-margin of 6.8 %.
 * Order backlog at EUR 44.2m, up 87% y/y, aided by several significant orders
   signed during the first half of 2019.
 * Guidance reiterated: Innofactor’s net sales in 2019 is estimated to increase
   from 2018 and EBITDA is estimated to grow up to EUR 4.0–6.0 million



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MARIMEKKO - UPDATED GUIDANCE FOR 2019E

23.07.2019 - 09.15 | Preview

Marimekko will report its Q2 result on August 15th and the company updated
yesterday its guidance for FY19E. The company expects 2019E EBIT to be higher
than in previous year, approximately maximum of EUR 15m. The company reiterated
its guidance for revenue; revenue is expected to be higher than in previous
year. We retain our rating “HOLD” with TP of EUR 26 (25) ahead of Q2.

Read more

Updated guidance ahead of Q2

Marimekko updated its 2019E guidance ahead of its Q2 result. The company
reiterated its FY19E revenue guidance but updated its guidance for FY19E
comparable operating profit. According to the new guidance for 2019E, revenue is
expected to be higher than in previous year while operating profit is expected
to be higher than in previous year at maximum of EUR 15m (previous: 2019E
operating profit expected to be in the same level as in 2018). Marimekko did not
provide much information other than that. Increased EBIT guidance for 2019E is
mainly due to increased licensing income in APAC. The company also expects H2’19
costs to be higher than in H2’18.

Sales expected to increase in Q2

We expect Marimekko’s Q2 total sales to be EUR 31.1m (10.4% y/y) while we expect
Q2’19E adj. EBIT of EUR 3.5m (2018 adj. EBIT of EUR 3.1m) resulting EBIT margin
of 11.2% (2018 EBIT margin of 11.1 %). Marimekko’s business is cyclical and H2
and especially the outcome of Q4 holiday sales have a high impact on Marimekko’s
total sales and profitability. The company also became aware of grey export in
Asia in Q1’19 and the actions taken might have an impact on sales and earnings.

We retain “HOLD” with TP of EUR 26 (25)

We have updated our estimates after the guidance update. We have increased our
FY19E revenue expectation to EUR 125m (previous EUR 118m) and adjusted our cost
estimates to be in line with the new guidance. We expect 2019E adj. EBIT to be
EUR 14.2m (previous estimate EUR 12.5m). We keep our rating “HOLD” with TP of
EUR 26 (previously EUR 25).

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VAISALA - PERFORMANCE ON TRACK

22.07.2019 - 09.00 | Company update

Vaisala delivered a good Q2 result with a clear EBIT beat. The outlook for 2019
remains positive as Vaisala enters H2 which is seasonally stronger for W&E. The
acquisitions of Leosphere and K-Patents are bearing fruit and we see both
accelerating sales further when fully integrated into Vaisala’s sales channel.
We raise our target price to 21 euros (prev. 20) but maintain HOLD
recommendation.

Read more

Acquired businesses bearing fruit

Vaisala’s Q2 net sales were 96.1 MEUR vs. 94.2 MEUR our expectation (93.5 MEUR
consensus). Q2 EBIT was 7.2 MEUR vs. our expectation of 3.2 MEUR (4.5 MEUR
consensus). The EBIT beat was driven by slightly better sales growth and 4
percentage points higher gross margin (54% vs. 50% Q2/18) in both business
units, which was a result of product and project profitability, and currency
tailwind. W&E’s net sales growth was 16.7% and it came mostly from wind lidars.
IM net sales growth was 26%, with K-Patents contributing around 12% of the
growth. The integration of Leosphere is now complete and K-Patents is expected
to be integrated during Q3, therefore sales synergies should start to become
more visible during H2.

H2 seasonally stronger for W&E, estimates revised upward

After the solid Q2 result, Vaisala is on track to deliver in H2, which is
seasonally stronger for W&E. Post Q2 result, we have adjusted slightly upward
both our sales and EBIT estimates for this year and coming years reflecting the
confidence we have in Vaisala’s strategy. We expect 2019E net sales to be 392
MEUR (12% growth yoy) and reported EBIT to be 35 MEUR (46 MEUR adjusted for PPA
and one-offs), representing 9% EBIT margin (12% adj. EBIT margin). Our EBIT
estimates are now in the upper end of the company’s 2019 guidance. For 2020-21E,
we expect 4-5% net sales growth, and we estimate EBIT margin to gradually
improve from 9% 2019E towards 11% 2021E (adjusted EBIT margin from 12% 2019E
towards 13% in 2021E).

HOLD maintained with revised TP of 21 euros (prev. 20)

On our adjusted EBIT estimates, Vaisala is trading some 10-15% under our peer
group on EV/EBIT multiples. Reflecting our estimates revisions, we raise our
target price to 21 euros (prev. 20) but maintain HOLD recommendation.



Open report


VAISALA - CLEAR Q2 BEAT, WITH GOOD CONTRIBUTION FROM ACQUIRED BUSINESSES

19.07.2019 - 12.15 | Earnings Flash

Vaisala’s Q2 net sales at 96.1 MEUR vs. 94.2 MEUR our expectation and 93.5 MEUR
consensus. Q2 EBIT was 7.2 MEUR vs. our expectation of 3.2 MEUR (4.5 MEUR
consensus). Adjusted EBIT was 9.4 MEUR vs. our 6.2 MEUR adjusted EBIT
expectation.

Read more

 * Group level results: Q2 net sales at 96.1 MEUR vs. 94.2 MEUR our expectation
   and 93.5 MEUR consensus. Q2 EBIT was 7.2 MEUR vs. our expectation of 3.2 MEUR
   (4.5 MEUR consensus). Adjusted EBIT was 9.4 MEUR vs. our 6.2 MEUR adjusted
   EBIT expectation. EPS was 0.14 (0.06 Evli, 0.08 consensus).
 * Gross margin was 54.2% vs. 50.1% last year
 * Order received was 98.0 MEUR vs. 71.1 MEUR last year
 * Weather & Environment (W&E) net sales was 63.2 MEUR vs. 60.2 MEUR our
   expectation. EBIT was 0.6 MEUR (-1.5 MEUR Evli)
 * Industrial Measurements (IM) net sales was 34.8 MEUR vs. 34.0 MEUR our
   expectation. EBIT was 7.5 MEUR (4.7 MEUR Evli)
 * CEO comment: “Vaisala’s second quarter orders received and net sales were
   strong in all geographical areas. Around half of the order growth came from
   acquired companies. Excellent growth of orders received in Weather and
   Environment Business Area reached 49%. This growth was generated by
   medium-sized orders and especially in sounding and wind lidar businesses.”
 * Business outlook for 2019 unchanged: 2019 net sales to be in the range of EUR
   380–400 million and operating result (EBIT) to be in the range of EUR 25–35
   million including EUR 10–12 million acquisition related amortization and
   one-off expenses related to a lease contract.



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CONSTI - EXPECTING WEAKER EARNINGS QUARTER

19.07.2019 - 08.15 | Preview

Consti will report Q2/19 earnings on July 26th. A key uncertainty factor still
remains any potential profitability impacts of the building purpose modification
project that affected Q1 earnings. With the project having been on-going still
post-Q1 we remain conservative in our profitability estimates but still expect
Q2 EBIT to be slightly positive, at EUR 0.6m, and net sales at EUR 81.3m. We
retain our HOLD rating with a target price of EUR 5.8 (6.0).

Read more

Expect project burden impact on Q2 earnings

Consti’s Q1 EBIT was barely negative, at EUR -0.4m, due to performance
obligations of an individual building purpose modification project. As the
project has been on-going also during Q2, we expect a continued negative impact
on profitability. We estimate a Q2 EBIT of EUR 0.6m. We expect slight y/y sales
growth to EUR 81.3m. Although the order backlog declined slightly in Q1 sales
remain supported by strong Q1 growth and order intake as well as an expected
faster order backlog conversion.

Risk levels still highish but declining

Consti has in our view been showing signs of lower project pipeline risks after
having struggled with project management issues since the latter half of 2017.
H1/19 has seen the completion and near or expected completion of several
significant projects. The share of more demanding building purpose modification
projects in the order backlog has also decreased. The likelihood of new major
surprises in our view is declining, while we note that the arbitration
proceedings relating to the St. George project are still on-going.

HOLD with a target price of EUR 5.8 (6.0)

Consti trades at a discount to its peers, which we consider partly justifiable
given profitability challenges and a still weaker near-term earnings visibility.
We retain our HOLD rating with a target price of EUR 5.8 (6.0).



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FINNAIR - WEAKER 19E PROFITABILITY EXPECTATIONS

18.07.2019 - 09.15 | Company update

Finnair’s Q2 profitability fell short of expectations. The company issued new
FY19E guidance for profitability. Global market uncertainties and weaker outlook
for cargo business are likely to impact H2’19. We have cut our 19E-20E adj. EBIT
estimates after Q2 result. Despite of the sizeable drop in share price we do not
see valuation being particularly attractive considering the weakening
profitability trend. Hence, we retain “HOLD” with TP of EUR 7.4 (prev. 8.0).

Read more

FY19E outlook remains volatile

Finnair expects EBIT% of 4.5%-6.0% for 2019E, which is clearly weaker than 2018
EBIT% of 7.7%. Increased fuel costs and high irregular maintenance costs in Q2
as well as weak profitability Q1 are burdening profitability expectations for
FY19E. The operating environment is expected to remain volatile and continued
uncertainties in global trade, such as Brexit and US-China trade talks could
have an impact on air travel and cargo.

Good capacity growth in 2019E

Finnair’s capacity growth in Q2 (+14.8%) was good and the company strengthened
its market share in both Asia and Europe. Finnair updated its guidance for 19E
capacity growth as the new route to Beijing’s Daxing International Airport will
be opened in early November. The company expects capacity growth to be 11%-12%
(previously 10%) and revenue growth slightly below that in 2019E. Our capacity
growth estimate is 11%, while we expect revenue to grow 9% in 2019E.

“HOLD” with TP of EUR 7.4 (prev. 8.0)

As a result of updated FY19E guidance and weak H1 profitability we have
decreased our 2019E EBIT expectation from EUR 203m to EUR 181m resulting EBIT%
of 5.8% (prev. 6.5%). We see revenue of EUR 3104m for 2019E. Considering the
weakening profitability trend and market outlook uncertainties we do not see
valuation being particularly attractive for 2019E-2020E. With our new TP of EUR
7.4 (prev. 8.0) Finnair trades on our estimates at its 3yr historical average
NTM EV/EBITDA of 3.4x. We retain our rating “HOLD”.



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SRV - PROFITABILITY REMAINS UNDER PRESSURE

18.07.2019 - 09.00 | Company update

SRV’s profitability in Q2 was clearly weaker than we had expected following
margin reductions in certain construction projects. We adjust our 2019E
operative operating profit estimate downward to EUR 14.7m (prev. 21.1m). We
retain our HOLD rating with a TP of EUR 1.8 (1.9)

Read more

Weaker margin projects pushed profits back in to the red

SRV’s Q2 earnings were weak, with the operative operating profit at EUR -3.1m
compared to our estimate of EUR 2.9m. Q2 saw the completion of a low number of
developer-contracted housing units and as such a y/y revenue decline to EUR
207.4m, in line with our estimate of EUR 209.8m, which had an impact on
profitability. Earnings were further affected by construction margin reductions
in three projects, expected to be completed by the end of this year, totaling
EUR 6.8m, along with other minor non-recurring items.

2019 earnings to be dictated by Q4 housing completions

Our estimates remain intact apart from minor H2/19 adjustments and a revision
for 2019 profitability due to the weaker than expected Q2. For 2019E we estimate
revenue of EUR 1,026m (prev. 1,029m) and an operative operating profit of EUR
14.7m (prev. 21.1m). Earnings in 2019 are heavily skewed towards Q4 due to
developer-contracting housing unit completion timing, with REDI Majakka
accounting for some half of the expected completions. We continue to expect a
divestment of Pearl Plaza in 2019, although not included in our earnings
estimates as the possible transaction would according to SRV have no significant
impact on group profits.

HOLD with a target price of EUR 1.80 (1.90)

Valuation based on peer multiples appears more than challenging, in particular
on EV metrics due to the high leverage, while our SOTP offers some leeway due to
the shopping centres not reflected through earnings comparison. Caution due to
weak near-term earnings visibility following a sequence of negative surprises is
also warranted and we retain our HOLD rating, adjusting our TP to 1.80 (1.90)
following our estimates revision.



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SSH - TALL ORDER FOR H2

18.07.2019 - 09.00 | Company update

SSH delivered a decent Q2 result that was in line with our expectations. The
good Q2 result sets the company up for the seasonally stronger H2, but SSH will
need to execute well in order to reach its 2019 guidance. We maintain our SELL
recommendation and target price of 1.10 euros.

Read more

Q2 result in line with our expectations

SSH’s Q2 result was in line with our expectations. Q2 net sales were EUR 4.0
million (vs. 4.4m our expectation), and operating profit was EUR 0.4 million
(vs. 0.4m our expectation). Software fees were EUR 1.7 million (1.9m Evli),
Professional services were EUR 0.1 million (0.3m Evli), and Recurring revenue
was EUR 2.2 million (2.2m Evli). There were no larger UKM perpetual deals during
Q2, but SSH did sign several PrivX deals with larger corporations, e.g. Western
Union. Revenue impact of PrivX is however still expected to be modest this year.
Noteworthy also that during Q2 SSH entered into a global partnership with Tech
Mahindra, a large global IT services company.

Estimates unchanged, focus on execution in H2

In order to reach its 2019 guidance (>10% growth in software business), SSH
needs to execute well in H2. Sales need to grow about 30% in H2 from last year,
which is a tall order and it will depend heavily on closing larger UKM deals.
Based on yesterday’s result, we have not made any changes to our estimates. We
expect 2019E net sales to decline -6% to 17.2 MEUR (reaching guidance though)
and 2019E EBIT to be 0.6 MEUR thanks to efficient cost control. Our estimates
for the coming years are also intact, with net sales growth expectations for
2020E and 2021E at 11% and 12% and gradually improving EBIT. Our sales estimates
reflect the company’s current short and mid-term guidance.

No change in recommendation

On our estimates, SSH is trading at 2019-20 EV/Sales multiples of 3.3x and 2.9x.
As noted previously in our reports, we’d like to see the results of SSH’s
strategy materialising somewhat in the growth figures in order to justify higher
valuation multiples. We maintain SELL recommendation with target price of 1.10
euros.

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FINNAIR - Q2 RESULT BELOW OUR ESTIMATES

17.07.2019 - 09.35 | Earnings Flash

Finnair’s Q2’19 adj. EBIT was EUR 47m vs. our expectation of EUR 65m and
consensus of EUR 62m. Sales was EUR 793m. Finnair’s Q2 number of passengers rose
to a new Q2 record and the company’s market share strengthened in both Asian and
European markets. The growth development of cargo and travel services was not as
favorable in Q2. Finnair issued its guidance for 2019E. The company expects
capacity growth of 11-12% and revenue to grow at a somewhat slower pace than
capacity in 2019. Finnair expects its EBIT% to be between 4.5%-6.0% in 2019.

Read more

 * Q2 revenue was EUR 793m vs. EUR 806m/799m Evli/cons.
 * ASK grew by 14.8% in Q2. RASK growth decreased by 3.8%.
 * Q2 adj. EBIT was EUR 47 m vs. EUR 65m/62m Evli/cons. This was impacted by a
   EUR 13m increase in fuel price and exceptionally higher maintenance costs.
 * Q2 comparable EBITDA was EUR 126m vs. EUR 143m our view.
 * Absolute costs in Q2: Fuel costs were EUR 181m vs. EUR 174m our view. Staff
   costs were EUR 137 m vs. EUR 137m our view. All other OPEX combined were EUR
   441m vs. EUR 370m our view.
 * Unit costs: CASK was 6.06 eurocents vs. 6.02 our view while CASK ex fuel was
   4.59 eurocents vs. our view of 4.61



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SRV - WEAKER MARGIN PROJECTS BURDEN EBIT

17.07.2019 - 09.15 | Earnings Flash

SRV’s Q2 earnings overall were weaker than expected. Revenue was in line with
our expectations (Act./Evli EUR 207.4m/209.8m) as Q2 saw the completion of fewer
developer-contracted housing units. The operative operating profitability was
negative at EUR -3.1m (Evli 2.9m) and clearly weaker than expected, seemingly
mainly due to an underestimation of the impact of weaker margin projects.

Read more

 * SRV’s revenue in Q2 amounted to EUR 207.4m (Q2/18: EUR 235.8m), in line with
   our estimates and below consensus estimates (EUR 209.8m/220.0m Evli/cons.).
   Revenue in Q2 declined some 12% y/y. Revenue was as expected weaker due to
   the completion of fewer developer-contracted housing units.
 * The operating profit in Q2 amounted to EUR -3.1m (Q2/18: EUR -5.5m), clearly
   below both our and consensus estimates (EUR 3.6m/2.4m Evli/cons.), at an
   operating profit margin of -1.5%. The operative operating profit amounted to
   EUR -3.2m (Evli EUR 2.9m). The deviation seems to arise mainly from an
   underestimation of the impact on weak margin projects.
 * The order backlog remained largely unchanged at EUR 1,667.2m (Q2/18: EUR
   1,716.7m)
 * SRV issued an EUR 58.4m hybrid bond, of which EUR 20.5m was used to repay an
   existing hybrid bond and EUR 37.9m for early repayment of existing notes.



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SSH - Q2 IN LINE WITH OUR EXPECTATIONS

17.07.2019 - 09.15 | Earnings Flash

SSH Q2 result was in line with our expectations. Outlook for 2019 is unchanged;
SSH expects double digit percentage growth from software business (software
fees, professional services, and recurring revenue) at comparable exchange rates

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 * Q2 net sales were EUR 4.0 million (vs 4.4m our expectation)
 * Software fees were EUR 1.7 million (1.9m Evli), Professional services were
   EUR 0.1 million (0.3m Evli), and Recurring revenue was EUR 2.2 million (2.2m
   Evli)
 * Q2 operating profit was EUR 0.4 million (vs 0.4m our expectation)
 * EPS was 0.00 (vs. 0.00 our estimate)
 * Liquid assets were EUR 11.2m (12.3m Q1/19)
 * Business outlook for 2019 unchanged: SSH expects double digit percentage
   growth from software business (software fees, professional services, and
   recurring revenue) at comparable exchange rates

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GOFORE - REVISED NET SALES GUIDANCE

12.07.2019 - 09.15 | Company update

Gofore revised its guidance for FY2019 net sales on the 10th of July, expected
to amount to EUR 67-72m (prev. guidance EUR 71-79m). The revised guidance is
mainly due to unforeseen reductions in demand of some of Gofore’s largest
customers. We expect some impact on H1 billing rates but full-year margins to
remain at healthy levels. We retain our HOLD rating with a target price of EUR
8.50.

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FY 2019 sales guidance EUR 67—72m (prev. 71-79m)

Gofore revised its FY2019 sales guidance to EUR 67-72m (prev. EUR 71-79m) due to
reduced demand among some of its largest customers. Based on monthly net sales
figures the revision was not completely unexpected, with figures during Q2 in
particular being weaker than our estimates. The reduced demand to our
understanding stems from a cooling down of customer digitalization investment
eagerness and the permanence is difficult to judge. The sales growth in 2019 is
nonetheless expected to remain solid, at 32-42% based on the guidance range.

Expect some impact on H1 billing rates

We estimate FY2019 net sales at 69.9m (prev. 73.3m). Growth is supported by
several significant orders as well as the Silver Planet and Mango Design
acquisitions, with an expected impact on revenue on an annual basis of closer to
EUR 10m. Pick up in public sector spending with the recently-elected Finnish
government may also offer further growth opportunities going forward. We expect
the weaker revenue in Q2 to impact on billing rates and as such on margins but
the strong Q1 EBITA-margin (17.2%) will support overall margins in H1. We expect
an EBITA margin of 13.7% in 2019.

HOLD with a target price of EUR 8.50

Compared to peer multiples the current valuation does not appear to offer any
notable near-term valuation upside. With the rapid sales growth and healthy
margins Gofore in our view still remains an attractive case and we retain our
HOLD rating with a target price of EUR 8.50.



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FINNAIR - STRONG PASSENGER NUMBERS SUPPORT SALES

10.07.2019 - 08.50 | Preview

Finnair’s traffic data in April-June indicates Q2’19 revenue of EUR 806m. We
expected Q2 revenue of EUR 785m while consensus was at EUR 778m. Capacity growth
in Q2 was above the company’s 2019E guidance (14.8% vs. 10% 2019E guidance) and
our Q2 expectation of 12%. Fuel price continued to move up in Q2. We maintain
our rating “HOLD” with to TP of EUR 8 ahead of Q2.

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Strong passenger number growth and improved load factor

Finnair’s passenger numbers in Q2 grew by 13% y/y and hit the monthly all-time
company record in June with 1.4m passengers in total. Overall capacity (ASK)
grew by 14.8% y/y which was above our expectation of 12%. Capacity increase was
mainly supported by three new A350-aircrafts that entered the service in
December 2018, February 2019 and April 2019 and by one new A321-aircraft that
was added to European routes. In North America, capacity increased following the
new Los Angeles route and frequency additions to San Francisco. Sold capacity
(RPK) growth was in line with the capacity growth at 14.7% y/y and clearly beat
our growth expectation of 10%. Q2 passenger load factor (PLF) improved from Q1
and was 82.5% (-0.1% y/y growth vs. our expectation of -1.4% y/y).

Fuel price continued to move up in Q2

Jet fuel price development has continued in line with Q1. In Q2, the average
spot price of jet fuel in USD moved up by 4% from Q1. On a y/y basis, the
average Q2 USD price was down by 8%. Similarly, the average sport price of jet
fuel in EUR moved up by 5% q/q and was down by 3% on a y/y basis.

“HOLD” with TP of EUR 8

As a result of Finnair’s strong April-June traffic data we have increased our Q2
revenue expectation from EUR 785m to EUR 806m (12% y/y) while keeping other
estimates intact. We foresee Q2 adj. EBIT of EUR 65m (8.0% margin). We maintain
our rating “HOLD” and TP of EUR 8 intact ahead of Q2.



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VERKKOKAUPPA.COM - E-COMMERCE TAKING MARKET SHARE

28.06.2019 - 09.00 | Company report

Verkkokauppa.com is a growth story with good fundamentals and solid business
model. The company continues focusing on growth and enhancing consumer
experience. We see Verkkokauppa.com’s mid-term outlook remaining favorable,
despite of the tightened competition.

Read more

Growth company with strong focus on consumer experience

Verkkokauppa.com’s revenue CAGR in 2010-2018 was 13.5%, which has been mainly
supported by competitive pricing, strong online positioning, new product
categories as well as the new Raisio store. The competition has continued fierce
and price-driven, forcing the market to consolidate and smaller competitors exit
the market. With a small physical footprint, the company has an efficient and
scalable cost base enabling competitive pricing and strong reliance against
competition. The company has strong net cash position which enables investments
in growth. Verkkokauppa.com has made extensive investments in marketing from
Q4’18 onwards and focuses on improving consumer experience. These investments
should support further growth but will hamper EBIT improvement this year.

Growth expected to continue despite of tight competition

We see Verkkokauppa.com’s outlook for mid-term favorable and expect the company
to continue growing in FY19-21E with annual growth of ~9%. We see that if
consumer migration to online shopping continues strong, the company’s scalable
cost base will support improvements in profitability. We expect EBIT to be flat
at EUR 13m in 2019E but to improve in 2020E-2021E. The biggest concerns are
related to the Finnish GDP growth which is expected to slow down in 2019-2020
and to fierce competition in the market.

“Buy” with TP of EUR 4.7

We have not made changes to our estimates. On our estimates, Verkkokauppa.com is
trading ~45% EV/EBIT discount vs. peer group in 2019E-2020E. We value
Verkkokauppa.com’s base case at EV/EBIT multiple of 11x. Our recommendation
remains BUY with TP of EUR 4.7



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SOLTEQ - INITIATING COVERAGE WITH HOLD

27.06.2019 - 00.00 | Company report

Solteq has during the past years sought to shift its focus towards own
cloud-based software products and services from a more IT-services oriented
past. The strategic approach coupled with an increased focus on expansion
internationally and new product development investments offer growth
opportunities and margin improvement potential but the early stages of Solteq’s
transition warrants caution. We initiate coverage of Solteq with a HOLD-rating
and a target price of EUR 1.40.

Read more

Shifting focus towards own products and related services

Solteq is striving to transition from its more IT-services oriented past towards
a company focused on own software products and related services, with strengths
within commerce related solutions. Growth is sought from expansion
internationally and product development investments such as autonomous service
robotics solutions, while actions taken to enhance operational efficiency have
and continue to aid margins.

Expect margin improvement and moderate growth

We expect a sales CAGR of near 3.5% between 2018-2021E, not including likely
acquisitions, which have been elemental in achieving an average growth rate of
over 10% p.a. since 2010. Operating profit margin development has been aided by
actions to enhance operational efficiency and we expect further improvement to
6.8% in 2019E (2018: 4.3%).

Initiating coverage with HOLD and TP of EUR 1.40

We initiate coverage of Solteq with a HOLD-rating and a target price of EUR
1.40. Our valuation relies mainly on public Nordic IT-services oriented peer
multiples. Based on our estimates and current valuation the 2019E and 2020E
EV/EBIT and P/E multiples do not imply any notable upside, with the multiples
generally in line with peers. Main drivers for valuation upside would in our
view be faster revenue growth and margin improvement through a more rapid shift
in the product mix and growth internationally. Investments into autonomous
service robotics solutions are also a yet unproven but potentially very
lucrative bet.



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RAUTE - MODERATED GUIDANCE FOR 2019

26.06.2019 - 09.25 | Company update

Raute has downgraded its 2019 guidance. The company now expects 2019 revenue and
operating profit to decline compared to the record highs set in 2018. Raute
previously guided flat 2019 figures. We don’t see the profit warning as a major
negative development relative to our own expectations as we have previously
acknowledged Raute is unlikely to reach similarly lofty figures anytime soon.
Our rating remains HOLD; we adjust our TP to EUR 25.5 (27.0).

Read more

Raute doesn’t see marked changes in environment

Raute refrains from issuing too specific guidance due to the company’s
project-like business. We understand the previous flat guidance covered a
relatively wide revenue and profitability range, and we continue to expect
double-digit revenue decline in 2019. We expect quarterly revenues at levels
close to Q1’19 for the remainder of the year. We lower our 2019 operating margin
expectation slightly, to 7.1% (we previously expected 7.4%). In comparison,
Raute averaged 8% operating margin in 2017-18. The company cites delays in
challenging project deliveries and postponement of larger order negotiations as
the reason for lowered guidance. Raute still views the operating environment
stable, and sees healthy activity related to possible capacity expansion
projects. The company has several large projects pending. On the other hand,
Raute highlights additional uncertainty stemming from the increased share of
smaller customers, the types of whose decision-making isn’t as straightforward
as those of the likes of more established and traditional customers, such as
UPM. Raute will assess the need for possible adaptation measures only later in
the summer along with the realization of certain orders.

Multiples are undemanding amid uncertainties

Raute continues to trade at low multiples (4.3x EV/EBITDA ‘19e and 5.5x EV/EBIT
‘19e on our estimates). However, the investment cycle for plywood and LVL
industries is probably past its peak and demand volumes are shifting to smaller
customer accounts, thus making any predictions of potential investment project
realizations doubly more difficult. We retain our HOLD rating and adjust our
target price to EUR 25.5 (27.0) per share.



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SCANFIL - EXPECT FURTHER ROBUST RESULTS

18.06.2019 - 09.25 | Company report

We expect Scanfil to remain one of the contract electronics manufacturers with
better positioning amid a perennially competitive market for outsourced
industrial electronics production. We view Scanfil’s strength premised on
quality control, competitive pricing and good relationships with its key
customers. In our view Scanfil’s valuation is at an attractive level as the
current multiples represent a discount of some 20% compared to its own
historical averages. We rate the shares BUY, TP at EUR 4.75 per share.

Read more

Scanfil remains well-positioned strategy-wise

While Scanfil’s short-term success is dependent on its most important customers’
products (the ten largest accounts generate ca. 60% of revenues), and these
large industrial OEMs often face cyclical demand, Scanfil’s plant network can
serve accounts both in the early stages of a product cycle and industrial
electronics that are already being manufactured at high volumes, meaning Scanfil
is able to nurture initially small customers and in the longer perspective
graduate them to more significant revenues. However, such development demands
patience as it will take a few years to reach a couple of million in annual
sales (and this is only a fraction of the tens of millions required to be
recognized as a major Scanfil customer).

Scanfil set to grow both organically and inorganically

Scanfil targets organic growth of ca. 3% in 2019-20 and a slight improvement in
operating margin (7% in 2020). In our view these remain realistic targets,
although success could be hampered by the softening of demand for a major
customer product. Scanfil is still committed to screening the German market for
acquisition targets (after announcing a deal in May).

Both Scanfil and its peers valued at undemanding multiples

Scanfil has historically traded at EV/EBITDA and EV/EBIT multiples above 7x and
9x, while the company is currently valued at 5.7x and 7.4x (based on our 2019
estimates). This 20% discount is in line with the recent peer group development.
We rate Scanfil BUY, our target price being EUR 4.75 per share.



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VAISALA - CMD NOTES: ROADMAP FOR PROFITABLE GROWTH

17.06.2019 - 08.45 | Company update

Vaisala held its CMD last Friday, where the company provided insight into its
businesses and updated strategy. Based on the CMD and updated financial targets,
we see Vaisala’s roadmap for profitable growth as attainable and we have made
smaller upward adjustments to our sales estimates. We maintain HOLD
recommendation with new target price of 20 euros (prev. 18).

Read more

Updated financial targets – more emphasis on growth

Vaisala targets an average annual growth exceeding 5% and EBIT margin exceeding
12%. Earlier Vaisala’s objective was growth with an average annual growth of 5%,
and to achieve 15% EBIT margin. The slightly more ambitious growth target is
based on both organic and non-organic opportunities, with key areas of growth
being liquid measurements, new industrial instruments, digital solutions, and
wind lidars. The recent acquisitions of Leosphere (wind lidars) and K-Patents
(liquid measurements), provide growth areas for both W&E and IM segments.

Roadmap for profitable growth

We have made minor upward changes to our sales estimates based on the presented
roadmap and new financial targets. We expect 2019E net sales to be 390 MEUR (12%
growth yoy, driven by Leosphere and K-Patents acquisitions) and EBIT to be 31
MEUR (43 MEUR adjusted for PPA and one-offs), representing 8% EBIT margin (11%
adj. EBIT margin). For 2020-21E, we expect above 4% net sales growth, and we
estimate EBIT margin to gradually improve from 8 % 2019E towards 10% 2021E
(adjusted EBIT margin from 11% 2019E towards 12% in 2021E). Non-organic growth
is very likely (although not reflected in our estimates), hence we see above 5%
growth very achievable.

HOLD maintained with TP of 20€ (prev. 18)

On our estimates, Vaisala is trading close to par with our peer group on
adjusted EV/EBIT multiples. On EV/Sales multiples, Vaisala is trading below
peers, reflecting the potential valuation upside should Vaisala succeed in
accelerating its profitable growth. We raise target price to 20 euros (prev. 18)
but maintain HOLD recommendation.



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ENDOMINES - RIGHTS ISSUE ON-GOING

17.06.2019 - 00.00 | Company update

The subscription period of Endomines’ rights issue commenced on June 14.
Endomines is seeking to raise gross proceeds of SEK 165m. The proceeds of the
rights issue are intended to be used to repay debt and interest of existing debt
and development of its assets in Idaho, as well as exploration along the
Karelian Goldline and for general corporate costs.

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Seeking to raise SEK 165m

Endomines is through a rights issue seeking to raise gross proceeds of around
SEK 165m, with expenses related to the rights issue estimated at SEK 10m.
Endomines has estimated that its current financial position does not cover the
capital needs for the following twelve months. Trading in subscription rights
will take place during the 14-25 June 2019 while subscription using the
subscription rights will take place from the 14th of June to the 1st of July,
2019.

Proceeds mainly to cover debt and project development

Of the proceeds some SEK 36m would be used to repay debts and interest relating
to the TVL Gold acquisition. The larger share of the proceeds from the rights
issue are intended to be used for development of its projects in Idaho. To our
understanding some of the proceeds would be used for further development of the
Friday mine while the bulk would be allocated to development of the Rescue,
Kimberly, and Unity projects. Furthermore, part of the proceeds would be used to
continue exploration along the Karelian Goldline as well as to cover general
corporate costs. The cost allocation and project timelines are described in
further detail in figures 1 and 2.

Rating withdrawn during rights issue

Evli Bank is the financial advisor of the rights issue, and although a
segregation of duties is followed, we refrain from expressing our views on the
rights issue. Our estimates have not been revised to include any new information
given in the prospectus and we withdraw our rating and target price (prev. HOLD,
TP SEK 6.0). We will publish an updated view after the rights issue.



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SSH - CMD NOTES: HIGH AMBITIONS

11.06.2019 - 11.20 | Company update

SSH held a CMD yesterday, where the company offered insight into its business
and outlined its long-term ambitions. The recently announced SSH200 Growth
Vision aims at EUR 200m net sales during the 2020’s, with primary growth engines
being UKM and PrivX. We do not make any changes to our estimates or
recommendation at this moment.

Read more

Addressable market not lacking in size or growth potential

To reach EUR 200M in sales by 2029, SSH would need to grow around 24% annually.
From the underlying market’s perspective this is achievable, given the strong
growth profiles in the markets. According to SSH, the Enterprise Key Management
market is estimated to be USD 3.5 bln and expected to grow annually 21% by 2024.
Looking at PrivX’s market, the Privileged Access Management is estimated to be
USD 6 bln, with 30% annual growth expectations by 2023.

The SSH200 Growth Vision

The growth engines for the vision are UKM and PrivX. SSH estimates that there
are thousands of potential customers for UKM, with deal sizes ranging from a
hundred thousand up to millions of euros. PrivX poses an even bigger
opportunity, but currently the number of customers is small, and sales ramp up
is still very much on-going. SSH does not expect any material revenue impact
from PrivX this year, nor was the company ready to give any estimate on the
number of customers or ARR it expects to have from PrivX in the coming years.

No changes to estimates and recommendation

SSH maintained its 2019 guidance (>10% growth from software business) and
mid-term target (similar or faster growth than market). Apart from previously
announced partnerships and alliances, SSH did not specify what concrete new
measures it would take to accelerate growth or what investments it requires.
Based on yesterday’s CMD, we note that the vision is bold, but we’d like to see
growth materializing in the figures. Thus, we have not made any changes to our
estimates or recommendation. Our estimates reflect the company’s current short
and mid-term guidance.

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INNOFACTOR - UPGRADE TO BUY

05.06.2019 - 09.30 | Company update

Innofactor revised its guidance for EBITDA, expecting EBITDA in 2019 in between
EUR 4-6m, compared to EUR -1.0m in 2018. The sales guidance remains intact, with
sales expected to increase from 2018 (EUR 63.1m). Our revised EBITDA estimate
for 2019 is EUR 4.6m (prev. EUR 4.0m). With the alleviated earnings uncertainty
and our slightly revised estimates we raise our rating to BUY (HOLD) with a
target price of EUR 0.80 (0.60).

Read more

2019 EBITDA guidance range EUR 4-6m

Innofactor revised its guidance for EBITDA while keeping the sales guidance
intact. Under the new guidance Innofactor expects sales to increase from 2018
(EUR 63.1m) and EBITDA to be in between EUR 4-6m (prev. increase from 2018),
compared to EUR -1.0m in 2018. To our understanding the revised guidance was not
triggered by any extraordinary items but instead mainly due to increased
visibility into the full year development.

Our 2019 EBITDA estimate at EUR 4.6m

Based on Q1 figures and historical development, with Q4 typically being strong,
the mid-range of the guidance would certainly be achievable. The upper range of
the guidance appears challenging but would, when considering the impact of IFRS
16 changes, imply similar EBITDA levels as Innofactor has achieved pre-2017.
Innofactor’s Q1 showed promising development but with two weaker years behind we
opt to stay more on the cautious side of the guidance range and adjust our 2019
EBITDA estimate to EUR 4.6m (prev. 4.0m).

BUY (HOLD) with a target price of EUR 0.80 (0.60)

On 2019E EV/EBITDA valuation is only slightly below peers. As the guidance range
offers increased visibility into 2019 development we shift some more focus on
2020E multiples. On the 2020E multiples valuation looks more attractive, in
particular when considering the PPA adjusted multiples. We upgrade to BUY (HOLD)
with a target price of EUR 0.80 (0.60).



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INNOFACTOR - STILL WARRANTS CAUTION

03.06.2019 - 09.30 | Company update

Innofactor’s Q4 earnings release did not in our view bring any major surprises
and the results were only slightly below our estimates. Significant evidence of
a turnaround remains to be seen, although the guidance and order backlog give
some support for improving figures in 2019. We retain our HOLD-rating with a
target price of EUR 0.45 (0.40).

Read more

Signs of improvements seen, evidence still lacking

Innofactor’s Q4 results were slightly below our estimates, with revenue and
EBITDA at EUR 15.9m (Evli 16.4m) and EUR -0.9m (Evli -0.7m), and due to the
profit warning issued in January did not bring any major surprises. In our view
the results still did not show solid evidence of a major turnaround. The
guidance given was at least at this point still vague, with net sales and EBITDA
in 2019 expected to increase from 2018 levels, which given the 2018 results
should clearly be viewed as a minimum requirement. A positive sign for 2019 was
the order backlog, which was reported for the first time, standing at around EUR
32m, up some 40% y/y.

Estimates intact apart from IFRS 16 adjustments

Our estimates remain largely intact post Q4, apart from IFRS 16 revisions to
EBITDA of approx. EUR 1m. We continue to expect Innofactor to reach a barely
positive EBIT in 2019. We expect profitability improvements mainly from a higher
billing rate, supported by the order backlog and a smaller headcount. Sale of
Dynasty product family updates are expected to support early 2019 but we expect
overall stronger profitability during H2. Although potential for larger
profitability improvements exists we still remain cautious due to the weak track
during previous years and operations in Denmark continue to cause headaches.

HOLD with a target price of EUR 0.45 (0.40)

With IFRS 16 adjustment causing possible comparability issues with EV/EBITDA
multiples we adjust EV/EBIT multiples for purchase price amortizations to arrive
at 2019E and 2020E multiples of 12.5x and 6.7x respectively, compared to peer
median multiples of 10.9x and 10.0x. We retain our HOLD-rating with a target
price of EUR 0.45 (0.40).



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PIHLAJALINNA - CMD NOTES

20.05.2019 - 09.15 | Company update

Pihlajalinna hosted the 2019 CMD last Friday. The focus of the event was on
increased health and social care costs, cooperation of private and public
sectors as well as the digitalization of health care. Pihlajalinna did not make
any changes to its ‘19E guidance nor its long-term financial targets. We
maintain our rating “Buy” with TP of EUR 13.

Read more

Need of new solutions for arranging services

The finances of Finnish municipalities have continued to deteriorate and
municipalities are forced to find new solutions to balance their increased
health and social care costs. Cooperation with private sector is no longer
purely voluntary. As Pihlajalinna stated in Q1, municipalities’ activity has
increased after the failure of the SOTE reform, despite of the restriction law.

New opportunities on occupational healthcare

Pihlajalinna has been able to use its network to expand services across the
country. The company sees opportunities in expanding its occupational healthcare
network as municipalities and other public sector entities are interested in
divesting the occupational healthcare providers they currently own. The company
targets to expand in basic-level specialized care and non-urgent specialized
care as the public sector has made cuts in operations and centralized
specialized care in fewer units.

Focusing on profitability improvements in 2019E

Pihlajalinna’s plan is to improve its profitability by organic growth,
increasing cross-selling, and by addressing profitability issues in the new
medical service centers. Pihlajalinna will also improve its customer service
experience by bringing new digital solutions to the market, which will also be a
significant profitability driver in the future.

Guidance for 2019E intact

Pihlajalinna reiterated its guidance for 2019E; to increase its revenue and EBIT
in 2019E from 2018 levels. The company did not make changes to its long-term
targets and expects EBIT % of 7% in long-term. We keep our estimates intact. We
maintain our rating “Buy” with TP of EUR 13.



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INNOFACTOR - PROFITABILITY IMPROVING

20.05.2019 - 09.00 | Company update

Innofactor’s profitability improved in Q1, aided primarily by the cost savings
program from Q4/18 and a higher revenue per employee. Prerequisites for further
improvements remain, as the personnel base has decreased while the order backlog
remains at healthy levels. We retain our HOLD-rating with a target price of EUR
0.60 (0.45).

Read more

Improved profitability in Q1

Innofactor’s profitability in Q1 improved in line with our expectations, with
EBITDA amounting to EUR 0.9m, at a margin of 5.4%. Revenue fell slightly short
of our expectations, affected partly by a smaller impact of the timing of
Dynasty product sales than we had expected. Profitability was aided primarily by
the restructuring efforts and cost savings done during Q4/18 but also by a
higher revenue per employee (+9.2% y/y). The adoption of IFRS 16 had a EUR 0.3m
positive impact on EBITDA.

Prerequisites for improving profitability in place

The level of impact on profitability of the cost savings efforts that were
executed during Q4/18 was largely visible in Q1 figures. Focus will remain on
improving profitability and further increases of the revenue per employee
remains a key source for improvement in our view. The prerequisites certainly
exist, as the number of personnel has decreased 10% y/y while the order backlog
is up some 85% y/y. The positive development has still been largely attributable
to operations in Finland, as challenges in both Denmark and Sweden have
persisted and remain a key uncertainty. We have made only minor adjustments to
our estimates post Q1, with our 2019 revenue and EBITDA estimates at EUR 64.0m
and EUR 4.0m respectively.

HOLD with a target price of EUR 0.60 (0.45)

Innofactor trades at a 2019E EV/EBITDA of 9.5x, in line with peers. Given the
challenges Innofactor has faced and an elevated level of uncertainty we would
normally consider this quite a stretch. With signs of improving profitability
and more attractive 2020E multiples we are however prepared to give Innofactor
the benefit of the doubt and retain our HOLD-rating with a target price of EUR
0.60 (0.45).



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MARIMEKKO - INVESTING IN GROWTH IN 2019E

17.05.2019 - 08.20 | Company update

Marimekko’s Q1 result hit all-time record and beat our estimates. Growth was
mainly boosted by strong retail sales in Finland and wholesale sales in APAC.
Even though adj. EBIT in 2019E is expected to remain flat, annual growth is
likely to continue with good momentum. We upgrade our rating to “Hold” (“Sell”)
and our TP to 25 (22).

Read more

Growth on the right track

Q1 revenue growth was 13% y/y and totaled EUR 27.1m. This was driven by
wholesale sales growth in APAC and retail sales growth in Finland where
LFL-growth was 12% y/y. As APAC wholesale sales was mainly impacted by
deliveries that were transferred from Q4’18 to Q1’19, we expect wholesale sales
to normalize during 2019E. In Finland, similar sized, non-recurring promotional
deliveries as in 2018 (in Q2 and Q4 especially) are not expected to occur in
2019E. The company’s total sales are expected to grow from last year.

Investments in growth will increase 2019E expenses

Marimekko’s plan for 2019E is to invest in growth, which increases expenses.
Major part of the investments will be used to revamp store network. Marketing
expenses are expected to increase in 2019E as well as investments into IT and
digitalization. These will weigh down adj. EBIT in 2019E but are likely to boost
growth in the upcoming years. Marimekko has also become aware of grey exports in
Asia, which could incur further costs.

Upgraded to “Hold” (“Sell”) with TP of 25 (22)

We have updated our estimates to take into account the IFRS 16 changes but kept
the underlying 2019E figures mostly intact. We expect 2019E sales of EUR 118m
(6% growth) and EBIT of EUR 13m (’18 EUR 12m). We have increased our growth
expectations for ‘20E with sales growth of 7% y/y. On our estimates, Marimekko
trades at EV/EBITDA 19E-20E multiple of 9.1x and 8.0x, which translate into 19%
and 13% premium compared to the premium goods peer group. Investments in 2019E
should support future growth but we are not ready yet to put emphasis on
‘20E-‘21E. We upgrade to “Hold” (“Sell”) with TP of 25 (22).



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MARIMEKKO - Q1 RESULT BEATS OUR ESTIMATES

16.05.2019 - 09.15 | Earnings Flash

Marimekko’s Q1 revenue increased by 13% and was EUR 27.1m vs. EUR 25.3m Evli
view. Adj. EBIT was EUR 2.6m vs. EUR 1.2m Evli view. Revenue was mainly driven
by strong wholesale sales in APAC and increased retail sales in Finland.
Operating result was boosted by increased sales and improved gross margin.
Guidance for 2019E is kept intact.

Read more

 * Finland: revenue was EUR 12.8m vs. EUR 12.1m our expectation. Revenue grew by
   7% y/y, split to 12% own retail and -1% wholesale. Own retail sales growth
   was driven by well performed regular-priced sales and the favorable trend in
   the domestic market. Wholesale was lower than last year as wholesale sales
   for the corresponding period included nonrecurring promotional deliveries, of
   which there were none this year.
 * International: revenue was EUR 14.3m vs. EUR 13.1m our view. Revenue
   increased by 18% y/y, mainly driven by wholesale sales in APAC region where
   the increase was 21%, as Q4’18 deliveries were transferred to Q1’19. Net
   sales increased also in all the other areas. In Japan, net sales grew by 18%
   of which retail sales growth was 13%.
 * Adj. EBIT was EUR 2.6m EUR vs. EUR 1.2m our view. Operating result was
   impacted by increased sales and improved gross margin. Net effect of IFRS 16
   on operating result was +125 thousand. It is notable that our estimates do
   not reflect the IFRS 16 changes yet.
 * Guidance: Marimekko reiterated its guidance and expects 2019E revenue to
   increase from last year while adj. EBIT is expected to remain flat.



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CIBUS NORDIC - PROPERTY INCOME AS EXPECTED

16.05.2019 - 09.05 | Company update

Cibus’ Q1 developed without surprises as NOI, at EUR 12.1m, was 1.7% above our
estimate. Cibus is now well on track to achieving the annual target of EUR 50m
in dailygoods property acquisitions this year. At the end of Q1 the portfolio
GAV stood at EUR 821m and is expected to reach EUR 850m by the end of Q2 as
already announced deals will be closed. We update our estimates to reflect the
situation as expected from Q3 onwards. We update our TP to SEK 125 (120) per
share while our rating remains HOLD.

Read more

No significant changes in key metrics during Q1

Valuation per sqm (EUR 1,740), EPRA NAV (EUR 11.2 per share) and net LTV ratio
(57%) all improved a bit. Occupancy rate declined by a percentage point to 95%.
Cibus’ average borrowing rate now equals 2.8%, and there is still room for
improvement as the third senior debt facility is yet to be refinanced. The EUR
135m bond is trading above par and Cibus is likely able to refinance at a rate
more than 100bps below the current coupon.

The portfolio WAULT remains stable at 5.0 years

The portfolio is stable in terms of the weighted average unexpired lease term.
The measure has proved steady at around 5.0 years as the portfolio has an even
number of leases coming up for renewal each year. The leases are typically
extended with the same terms for the next 5 years. Cibus also continues with its
plans to develop the organization while monitoring the Swedish property market
even if there are yet no concrete entry plans.

We update estimates based on earnings capacity for Q3

Cibus has so far this spring announced EUR 30m in acquisitions; these are
reflected in the current earnings capacity figure for Jun 30 (the deals will
close in Q2). We therefore update our estimates from Q3 onwards. Cibus now
trades close to par in terms of EV/GAV and P/NAV. In our view a slight premium
(somewhere in the 0-10% range) can be justified as the valuation methodology for
individual daily-goods properties doesn’t capture the risk diversification
effect Cibus can achieve with its property portfolio (currently numbering 132
assets). We update our target price to SEK 125 (120) per share and retain our
HOLD rating.



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CIBUS NORDIC - INCOME SLIGHTLY ABOVE OUR ESTIMATE

15.05.2019 - 11.00 | Earnings Flash

Cibus’ Q1 net rental income came in a bit above our expectations. Q1 earnings
capacity was unchanged, but is expected to increase by about 3% by the end of Q2
as recently announced acquisitions will be closed.

Read more

 * Net rental income amounted to EUR 12.1m vs. our EUR 11.9m estimate.
 * Central administration expenses totaled EUR 1.0m vs. our expectation of EUR
   0.9m. EBIT therefore stood at EUR 11.2m vs. our EUR 11.0m projection.
 * Gross asset value was EUR 821m (EUR 816m previously).
 * EPRA NAV was booked at EUR 11.2 (11.1) per share.
 * Occupancy rate stood at 95.1% (96.0%).
 * Net LTV amounted to 56.7% (58.4%).
 * The current NTM earnings capacity (in terms of net rental income minus
   central administration expenses, or EBIT) stood unchanged at EUR 44.2m as of
   Mar 31, 2019. Cibus expects the figure increase to EUR 45.6m by Jun 30, 2019
   as the recently announced property acquisitions will be included in the
   portfolio.



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INNOFACTOR - NET SALES SLIGHTLY LOWER, OPERATING MARGIN IN LINE

14.05.2019 - 09.30 | Earnings Flash

Innofactor reported Q1 net sales of EUR 16.1m and EBITDA of EUR 0.869m. Net
sales missed our estimate of EUR 17.1m, but EBITDA was in line with our
expectation of EUR 0.8m. Innofactor commented that measures for improving
profitability, carried out near the end of 2018, have started to take an effect
in the first quarter as planned. Innofactor expects net sales and operating
margin (EBITDA) in 2019 to increase from 2018 (2018: net sales EUR 63.1m EBITDA
EUR -1.0m)

Read more

 * Q1 net sales were approximately EUR 16.1 million (2018: 16.5) vs. EUR 17.1m
   our expectation
 * EBITDA was EUR 0.869 (+155% yoy), vs. EUR 0.8m our expectation.
 * The order backlog was EUR 41.0 million (2018: 22.2), which shows an increase
   of 85%.
 * Innofactor got several significant orders in the first quarter, for example,
   Traficom VISA, approximately EUR 0.5 million; a decision-making system for
   the City of Espoo, approximately EUR 1.5 million; and a membership management
   project for a Swedish organization, approximately EUR 1.3 million
 * Guidance maintained; Innofactor’s net sales and operating margin (EBITDA) in
   2019 is estimated to increase from 2018, during which the net sales were EUR
   63.1 million and operating margin was EUR -1.0 million



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VERKKOKAUPPA.COM - FOCUSING ON GROWTH IN 2019E

13.05.2019 - 08.50 | Company update

As competition is likely to remain tight and price-driven, we are not expecting
margins to improve in 2019E. Investments in marketing should bring more
visibility and support sales growth. We retain our rating “BUY” with TP of EUR
4.7.

Read more

Attractive pricing and marketing likely to support sales

Verkkokauppa.com was able to increase its market share, driven by solid revenue
growth of 13% y/y (revenue of EUR 116m) in Q1. In 2019E, the company still seeks
to win market share and compete with low prices. The company has made
investments into marketing and targets to reach larger audience by new campaigns
and tv-commercials. Vekkokauppa.com also continuously aims to improve the user
experience online and in mobile. With these investments, we expect revenue
growth to continue in ‘19E.

No expectations of margin improvements in 2019E

Verkkokauppa.com’s Q1 operating profit decreased by 14% y/y and was EUR 2.3m.
This was mainly due to lower gross margin and increased marketing expenses.
Revenue growth in 2019E is unlikely to come for free and price-driven
competition adds pressure on the margin. Gross margin is also impacted by
wholesale/B2B sales which varies by each quarter. As investments into marketing
are expected to continue, we believe OPEX will remain at higher level in ‘19E.
The revenue from Apuraha continued to grow and was EUR 0.83m (EUR 0.67m) in Q1.
Apuaraha financing is expected to continue growing and supporting margins also
in 2019E.

Retaining “Buy” with TP of EUR 4.7

We have slightly adjusted our estimates with 2019E sales totaling EUR 522m
(prev. EUR 519m), gross margin of 14.7% and EBIT of EUR 13m (prev. EUR 14m). The
company reiterated its guidance for 2019E and expects revenue of EUR 500-550m
and EBIT of EUR 11-17m. On our estimates, Verkkokauppa.com trades at 11.9x and
8.7x EV/EBIT in ’19-‘20E, which translates into 67% and 49% discount compared to
the online focused Nordic & European peers. We retain our rating “Buy” with TP
of EUR 4.7.



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VERKKOKAUPPA.COM - STRONG REVENUE GROWTH IN Q1’19

10.05.2019 - 09.00 | Earnings Flash

Verkkokauppa.com’s Q1’19 revenue was EUR 116m compared to EUR 114m Evli and EUR
117m consensus estimates. Sales grew by 13% y/y. Adj. EBIT was slightly below
Evli/cons. estimates at EUR 2.3m. Verkkokauppa.com reiterated its guidance for
2019E.

Read more

 * Q1 revenue was EUR 115.8m vs. EUR 113.9m Evli view and EUR 116.5m consensus.
   Sales grew by 13% y/y. Revenue growth was driven mainly by marketing
   improvements, effective campaigning and sales from Raisio store. The market
   remained competitive and price-driven and grew by 4.9% in January-March,
   according to GfK.
 * Q1 gross profit was EUR 17.4m (15.0% margin) vs. EUR 17.8m (15.6% margin)
   Evli view.
 * Q1 adj. EBIT was EUR 2.3m (2.0% margin) vs. EUR 2.5m (2.2% margin) Evli view
   and EUR 3.0m (2.6% margin) consensus. Slightly lower operating profit y/y was
   mainly due to lower gross margin and increased marketing investments.
 * 2019E guidance is intact: Verkkokauppa.com expects revenue to be between EUR
   500-550m and operating profit of EUR 11-17m.



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ENDOMINES - DOWNGRADE TO HOLD

09.05.2019 - 09.10 | Company update

Endomines’ revenue in Q1 was limited to SEK 2.1m due to lack of production at
Friday and as such profitability remained weak, with EBIT at SEK -13.0m. Ramp-up
of production at Friday is expected in Q2. With Endomines’ financial situation
becoming a concern we downgrade to HOLD (BUY) with a target price of SEK 6.0
(8.0).

Read more

Friday production expected in Q2

Endomines’ Q1 revenue and EBIT amounted to SEK 2.1m and -13.0m respectively. Ore
production at the Friday mine is on-going but due to damage to the processing
facility no new gold concentrate was produced and revenue was only generated
from sales of remaining concentrate from Pampalo. Ramp-up of gold concentrate
production at the Friday site is expected to start in Q2. Although the
concentrate production was delayed Endomines has remained on schedule with the
mining of ore and retained its 2019 guidance production for Friday of
5,000-8,000 oz gold concentrate.

Financial situation concerning

Endomines’ financial situation has increased causes for concern. The liquid
funds at the end of the period amounted to SEK 7.8m, despite issuance of the EUR
3.7m bond, as Q1 cash flow after investments amounted to SEK -46.7m. The
situation should be alleviated with the ramp-up of production at Friday, with
the larger investments also having been done. With the additional costs of the
processing plant at Friday the financial situation is in our view now even more
fragile and Endomines can’t really afford more setbacks in production start-up
without additional financing.

HOLD (BUY) with a target price of SEK 6.0 (8.0)

Endomines is in our view in a delicate situation financially and the need for
additional financing, at least to finance any new projects, seems inevitable.
Endomines already issued a rather expensive bond and further financing will
likely not come easily or cheap. We downgrade to HOLD (BUY) with a target price
of SEK 6.0 (8.0).



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ASPO - VALUE INCREASINGLY RELIANT ON ESL

09.05.2019 - 09.00 | Company update

Aspo posted a 3.5% EBIT margin, missing our expected 4% level as Telko and
Leipurin disappointed. Telko suffered from declining plastic raw materials and
chemicals prices, while Leipurin’s Q1 fell short due to timing of Easter and
machine sales. However, we see ESL proceeding on track. Our rating stays BUY; we
update our TP to EUR 9.75 (9.50).

Read more

ESL’s operations on track towards higher EBIT

ESL’s Q1 was expectedly subdued as the two new LNG vessels’ cranes were being
repaired. The warranty repairs were mostly finished by the end of Q1. Aspo says
some parts are still being changed, but the ships are expected to be fully
operational in Q2. However, we note that it will likely be a few more months
before maximum efficiency is achieved, and consequently we do not expect ESL to
reach its full operating profit potential in Q2. We estimate ESL to post EUR 6m
EBIT in Q3, seeing the annual EBIT potential from thereon at around EUR 25m.

Telko now includes Kauko; Leipurin slow due to timings

The old Telko beat our EUR 63.6m revenue estimate, posting EUR 65.8m in Q1 sales
(EUR 71.9m w/ Kauko). The comparable y/y growth amounted to 14% (11% w/ Kauko).
Q1 sales growth was high y/y due to the slowness of the comparison period
(itself impacted by exceptionally cold weather which affected Russian and
Ukrainian construction). Volume growth was strong, however the price levels of
plastic raw materials continued to decline, hurting margins. The prices declined
by 5-6% q/q and 7- 10% y/y (margins on raw materials held in storage will be
particularly impacted). Meanwhile chemicals prices declined by 10% q/q and 3%
y/y. As a result, the old Telko managed a 3.6% EBIT margin (3.8% in Q1’18).
Telko targets EBIT margin at 6-7% in ‘20. The target may prove challenging, and
we don’t expect improvement on last year’s 4.5% margin (old Telko) this year.

Our expectations for ESL remain unchanged

We expect large EBIT growth in ‘19-20 as ESL’s new ships’ contribution will
fully materialize. We lower our estimates for the other businesses slightly,
update our TP to EUR 9.75 (9.50) as higher peer multiples lift SOTP valuation.
Our rating stays BUY.



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ETTEPLAN - A GOOD START FOR THE YEAR

09.05.2019 - 08.00 | Company update

Etteplan’s Q1 saw all business areas achieving margins near the financial target
of a 10% EBITA-margin. With a good order backlog development during the
beginning of the year Etteplan also raised its guidance for 2019. We expect a
2019 revenue and EBITA of EUR 258.6m and 26.0m respectively. We retain our BUY
rating with a target price of EUR 9.6 (9.0).

Read more

Good performance across the board and guidance upgrade

Etteplan’s Q1 results were good across the board, with especially profitability
beating our estimates, driven by better than expected profitability in
Engineering Solutions and Technical Documentation Solutions. Revenue also saw
good growth of 11.3% in the quarter following a continued good demand situation
despite market uncertainties. Etteplan upgraded its guidance, expecting the
revenue and operating profit for 2019 to grow clearly (prev. only grow) compared
to 2018.

Technical Documentation Solutions still faces challenges

Etteplan’s Q1 results showed little weakness, as although the on-going trade war
did have some impact on the development in China, the significant new orders
signed, the guidance upgrade and customer order backlog development alleviate
some of the near-term uncertainty. The Technical Documentation Solutions
business area remains the likely subpar performer due to elevated costs related
to a larger project in Germany. Our revised revenue and EBIT estimates are
258.6m and 23.4m respectively, implying an increase of 9.4% and 12.4% from 2018
figures.

BUY with a target price of EUR 9.6 (9.0)

On our estimates Etteplan trades at a 26% and 12% discount on 2019E peer median
EV/EBITDA and P/E. With our increased estimates and lesser near-term uncertainty
we raise our target price to EUR 9.6 (9.0), valuing Etteplan at a P/E and
EV/EBITDA of 13.5x and 7.6x respectively, and retain our BUY-rating.



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ETTEPLAN - EARNINGS BEAT AND GUIDANCE UPGRADE

08.05.2019 - 13.20 | Earnings Flash

Etteplan’s Q1 results beat expectations especially for profitability, with EBIT
at EUR 5.8m (EUR 5.2m/5.1m Evli/cons.) and revenue at EUR 65.6m (EUR 63.5m/64.0m
Evli/cons.). Performance was solid across all business areas. Etteplan upgraded
its guidance and now expects its revenue and operating profit for the year 2019
to grow clearly compared to 2018.

Read more

 * Etteplan’s net sales in Q1 amounted to EUR 65.6m (EUR 59.0m in Q1/18),
   slightly above our estimates (Evli EUR 63.5m). Sales growth in Q1 amounted to
   11.3% y/y (organic growth 7.0%).
 * EBITA in Q1 was EUR 6.4m (EUR 4.9m in Q1/18), above our estimates (Evli EUR
   5.8m), at a margin of 9.8%.
 * Engineering Solutions: Net sales in Q1 were EUR 35.6m vs. EUR 35.5m Evli.
   EBITA in Q1 was EUR 3.7m vs. EUR 3.2m Evli.
 * Software and Embedded Solutions: Net sales in Q1 were EUR 17.3m vs. EUR 16.4m
   Evli. EBITA in Q1 was EUR 1.7m vs. EUR 1.7m Evli.
 * Technical Documentation Solutions: Net sales in Q1 were EUR 12.5m vs. EUR
   11.6m Evli. EBITA in Q1 was EUR 1.2m vs. EUR 0.9m Evli.
 * Guidance upgraded: Etteplan expects its revenue and operating profit for the
   year 2019 to grow clearly (added) compared to 2018.



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ASPO - SALES ABOVE OUR ESTIMATE

08.05.2019 - 10.45 | Earnings Flash

Aspo’s Q1 net sales grew 23% y/y, reaching EUR 142m and thus exceeding our EUR
137m estimate. Group operating margin, at 3.5%, fell a little short of our 4.0%
expectation. ESL’s top line came in 9% above our estimate (operating margin was
in line with our expected 7.2%). In other words, Telko’s and Leipurin’s
profitability fell short of our expectations.

Read more

 * Group Q1 net sales amounted to EUR 142m vs. our EUR 137m estimate.
 * Aspo posted EUR 4.9m in EBIT vs. our expectation of EUR 5.4m. Group operating
   margin therefore amounted 3.5% (vs. our 4.0% estimate).
 * ESL Shipping revenue was recorded at EUR 44m vs. our EUR 40m expectation. ESL
   managed EBIT at EUR 3.2m (7.3% margin), whereas we expected EUR 2.9m (7.2%
   margin).
 * Telko posted EUR 72m in net sales (including Kauko) vs. our EUR 69m combined
   estimate for Telko and Kauko. Meanwhile EBIT stood at EUR 2.4m vs. our EUR
   2.5m projection.
 * Leipurin sales were EUR 26m, while we expected EUR 28m. Leipurin achieved EUR
   0.5m EBIT (our estimate was EUR 1.0m).
 * Kauko is now included within the Telko figures (effective Jan 1, 2019).
 * Previous guidance stays valid as Aspo expects 2019 EBIT at EUR 28-33m (EUR
   20.6m in 2018).



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ENDOMINES - CONCENTRATE PRODUCTION MISSING IN Q1

08.05.2019 - 09.20 | Earnings Flash

Endomines’ revenue and EBITDA in Q1 amounted to SEK 2.1m (Evli 8.0m) and SEK
-11.5m (Evli -3.9m) respectively, below our estimates mainly due to our
estimates not accounting for the processing plant damage during Q1 and revenue
only generated from sale of remaining Pampalo concentrate. No gold concentrate
was produced at Friday in Q1 but production is expected to commence in Q2.

Read more

 * Endomines did not produce any gold concentrate in Q1. The revenue was
   generated by sales of remaining Pampalo gold concentrate. Gold concentrate
   production at Friday has been delayed due to damage to the tailings area of
   the processing plant. Concentrate production is expected to commence in Q2.
 * Revenue amounted to SEK 2.1m (29.4m in Q4/18), below our estimates of SEK
   8.0m due to our estimates not having accounted for the processing plant
   damage.
 * EBITDA in Q1 was at SEK -11.5m, below our estimates of SEK -3.9m, mainly due
   to the lower revenue.
 * Friday’s processing plant repairs expected to amount to USD 400,000 and to
   take four to six weeks to complete.
 * Guidance reiterated: Annual gold production at the Friday mine in Idaho, USA,
   is expected to be approximately 9,000oz at a cash cost of 650-900 USD/oz,
   depending on the area of production, over the life time of the mine.
   Endomines anticipates production of 5,000 – 8,000oz gold (~156-249kg) in
   concentrate during the year.



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TALENOM - SOLID PERFORMANCE TO CONTINUE

07.05.2019 - 09.15 | Company report

Talenom has seen success in achieving well above market growth while
simultaneously vastly improving profitability, relying on technological advances
to automate processes and enhance efficiency. We continue to see room for
near-term margin improvement, while the fragmented bookkeeping services market
offers continued room for growth.

Read more

Focusing on rapid organic growth

Talenom has taken a different approach from the mainly inorganic growth focused
competitors in the fragmented bookkeeping services market by successfully
focusing on organic growth, having achieved a sales CAGR of 14% during
2015-2018. Growth has been enabled by Talenom’s separation of accountants and
sales force, which we expect to continue supported by benefits of digitalization
and the market fragmentation. We expect a sales CAGR of 17% during 2018-2021E.

Margin improvements from process efficiency

Talenom has invested heavily in improving the efficiency of its bookkeeping
production line. Through centralization of bookkeeping tasks and automation of
processes the company has been able to decrease resource needs, resulting in
sizeable improvements in margins. We expect further development in 2019 to give
a slight boost to margins, with our 2019E operating profit margin estimate at
19.5% (2018: 17.5%).

BUY with a target price of EUR 35.0

We retain our BUY rating and target price of EUR 35.0. Our target price values
Talenom at 27.5x 2019E P/E, slightly above our business support services peer
group, which we consider warranted due to the highly recurring nature of revenue
and stability of the bookkeeping services market. The high valuation is further
supported by earnings growth through both sales growth and margin improvements
(Evli 2019E sales growth +20.9% and EBIT margin +2 %p).



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PIHLAJALINNA - ‘19E FOCUS ON IMPROVING PROFITABILITY

06.05.2019 - 09.15 | Company update

Pihlajalinna’s Q1 earnings were close to expectations. After a weak ’18, the
company was able to improve its profitability and increase its organic growth.
Pihlajalinna’s focus in 2019E is to take further actions to improve its
operating profit. We keep our rating “BUY” with new TP of EUR 13 (12).

Read more

Profitability improvements continue in 2019E

In Q1, Pihlajalinna improved its operating profit with adjusted EBIT margin of
3.0% (-0.1% in Q1’18). Revenue growth was supported by new customer
relationships in occupational healthcare but also by the new partnership with
Fennia. Organic growth was 2.8% in Q1. In 2019E, the company continues focusing
to improve profitability especially in clinics with weaker profitability levels.
The company will also strengthen its services locally in mobile. Pihlajalinna’s
interest is to expand its cooperation with municipalities and expand its
occupational healthcare network in ‘19E.

SOTE collapsed but change is still needed

The health and social services reform collapsed in March. It is still unsure,
whether the new government will start again with the SOTE reform but
municipalities still need to find solutions for finding balance of financing
health and social services. After the collapse of the reform, Pihlajalinna sees
activity from municipalities has increased and expects that there is demand for
their healthcare services.

We keep our rating “BUY” with new TP of EUR 13

Pihlajalinna targets to increase its revenue and EBIT in 2019E from 2018 levels.
We foresee EBIT of EUR 24m (4.5% margin) and EUR 25m (4.6% margin) in ’19-‘20E.
As Q1 revenue was above our expectations, we have increased our revenue
expectation in 2019E to EUR 525m (previous EUR 515m). On our estimates,
Pihlajalinna trades in 2019-2020E EV/EBITDA multiple of 7.3x and 5.9x. which
translates into 23% and 26% discount compared to peer group. We maintain “BUY”
with TP of EUR 13.



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EXEL COMPOSITES - Q1 TAILWINDS

06.05.2019 - 08.50 | Company update

Exel Composites recorded Q1 sales and EBIT above our estimates as organic growth
came in higher than we expected, while DSC also contributed more than we had
projected. We make minor adjustments to our estimates. We retain our target
price of EUR 5 per share. Our rating remains BUY. Exel is valued at ca. 7x
EV/EBITDA ‘19e.

Read more

Q1 topped our estimates due to high wind energy volumes

Exel recorded an 8% organic growth in Q1. DSC (a U.S. company acquired in Apr
2018) contributed another 18%, bringing the total top line increase to 26% y/y.
Construction & Infrastructure revenues doubled due to the DSC contribution (the
unit has a high wind energy exposure) and strong organic wind energy growth.
European sales were stable; the growth was attributable to Rest of the World and
APAC geographies. Industrial Applications revenues declined by 18% y/y as the
telecommunications market continued challenging.

Cost program helped to lift EBIT from the recent lows

Exel recorded Q1 adj. operating margin at 7.2% (vs. 8.3% a year ago). The margin
averaged 2.5% in H2’18 as the DSC acquisition diluted profitability. Exel says
it managed cost savings according to its own plans, expecting DSC to reach
break-even profitability during 2019. In addition to improving DSC’s
performance, Exel has implemented cost savings throughout the group e.g. by
closing the German plant in April. Exel expects further synergy savings between
the company’s two Chinese production plants, both located in the city of
Nanjing. The group-wide cost savings program targets EUR 3m in annual savings
and the measures are expected to be fully effective in 2020.

We make minor revisions, reiterate BUY rating and TP

Our growth and profitability estimates do not change materially. We continue to
expect Exel to achieve an organic top line growth of around 7% in the coming
years, and therefore gradual improvement in operating margins. Our rating
remains BUY, our target price being EUR 5 per share.



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RAUTE - PROFITABILITY DROP DUE TO INVENTORIES

06.05.2019 - 08.30 | Company update

Raute recorded Q1 revenues at a healthy EUR 41.3m level (vs. EUR 35.3m a year
ago), yet EBIT margin declined as timing of certain inventory-related items was
unfavorable. Order intake, at EUR 32m, more than halved as the comparison period
was also rather unfavorable in this regard. We retain our HOLD rating and EUR 27
target price.

Read more

Timing of certain inventory items dragged profitability

According to Raute, the low recorded Q1 EBIT was due to certain exceptional cost
items (related to timing of inventories). The company says these amounted to the
tune of EUR 0.5-1.0m. As a result, EBIT margin fell to 6.3% (7.8% a year ago).
We continue to expect Raute to achieve EBIT margin at slightly above 7% in the
coming quarters. Raute’s 2019 guidance remains unchanged.

Russia’s share of order intake high due to a large order

Earlier this spring, Raute announced a relatively large order to be delivered to
Russia. The order, valued at over EUR 12m, is for Plyterra’s plywood mill
machinery. The order will be delivered in Q1’20. The order pushed Russia’s share
of Q1 order intake to 57% (without the order the share would have been around
30%). Raute continues to see Russia and Eastern Europe as promising markets,
highlighting Ukraine and Poland as specific countries with good potential.
Overall, Raute says the environment has remained stable. There is healthy
activity concerning potential capacity expansion projects as well as other
larger orders. Demand for maintenance and spare parts continues at a brisk
level, signaling high mill capacity utilization rates. Modernization project
orders remained low. One source of uncertainty is the rising portion of demand
from smaller customers, whose decision-making processes Raute is unable to
predict to the same extent as those of a larger customer (e.g. UPM).

Our estimates remain intact, TP at EUR 27 per share

Raute is unable to give very specific guidance. We expect ‘19 sales to decline
by some 10% compared to the very high ’18 benchmark figure. We make relatively
small adjustments to our estimates based on the report. Our rating remains HOLD,
target price at EUR 27 per share.



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RAUTE - SALES BEAT, OPERATING MARGIN LOWER

03.05.2019 - 10.00 | Earnings Flash

Raute managed a 17% y/y top line growth in Q1. Order intake remained at a
healthy level considering there were no major mill-scale orders. However, EBIT
fell in both absolute and relative terms due to some exceptional cost items
(while the comparison period also included some positive items).

Read more

 * Q1 net sales amounted to EUR 41.3m vs. our EUR 32.3m estimate.
 * Order intake was EUR 32m compared to EUR 68m a year ago. The orders mainly
   consisted of smaller items. Technology services orders grew strongly. Order
   book totaled EUR 84m (vs. EUR 142m a year ago).
 * Operating profit stood at EUR 2.6m vs. our expectation of EUR 3.5m.
   Exceptional cost items burdened operating profit.
 * The company managed an operating profit margin of 6.3%, whereas we expected
   10.9%.
 * Raute maintains its 2019 outlook, expecting 2019 net sales and operating
   profit at a similar level compared to the previous year. Overall, activity
   has remained at a good level.



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EXEL COMPOSITES - WIND ENERGY PUSHED TOP LINE

03.05.2019 - 09.30 | Earnings Flash

Exel Composites’ Q1 exceeded our expectations. Actual revenues topped our
estimate by 12%, and the company also surprised in terms of EBIT margin.

Read more

 * Net sales totaled EUR 27.1m vs. our projected EUR 24.3m. Revenue grew by 26%
   y/y thanks to the Construction & Infrastructure segment, which was driven by
   wind energy. Organic growth was recorded at 8.3%.
 * Growth in Construction & Infrastructure as well as Other Applications made up
   for the decline in Industrial Applications. The telecommunications market
   continued to be challenging.
 * The wind energy growth and the consolidation of DSC contributed to higher
   Rest of the World and Asia- Pacific revenues. European sales remained roughly
   flat.
 * EBIT amounted to EUR 2.0m, beating our EUR 1.4m estimate. EBIT margin was
   7.2% vs. our 5.9% expectation. The improvement was due to operational
   leverage, but also owed to improved efficiency achieved with the help of the
   cost savings program.



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ETTEPLAN - UPGRADE TO BUY

03.05.2019 - 09.00 | Company update

Etteplan reports Q1 results on May 8th. We expect continued good margin
development in Engineering Solutions, and Software and Embedded Solutions.
Project delivery challenges are expected to continue to have an impact on
margins in Technical Documentation Solutions. With valuation looking more
attractive due to peer multiple elevation we upgrade to BUY (HOLD) with a TP of
EUR 9.0.

Read more

Expect stable development

Our estimates ahead of Q1 remain largely intact, with some minor adjustments
mainly to incorporate the transition from EBIT from business operations to EBITA
as Etteplan’s measure for operational profitability following updated strategic
and financial targets in April. Our group level Q1 revenue and EBITA estimates
are at EUR 63.5m and EUR 5.8m respectively. We expect continued good margins in
Engineering Solutions and Software and Embedded Solutions while still remaining
cautious to margin improvement in Technical Documentation Solutions due to
project delivery challenges in Germany.

Uncertainty has decreased but remains a key topic

The uncertainty relating to the development of the global economy remains a key
topic as the development of macroeconomic indicators and sentiment has been
mixed but in general more positive considering the uncertainty during the latter
half of 2018. Both customer engineering companies’ and peers’ valuation have
been on the rise during 2019. The order intake among engineering companies has
also been positive, with the aggregate value for a selection of customer
companies up some 7% y/y.

BUY (HOLD) with a target price of EUR 9.0

The valuation of peer companies has been on the rise during 2019, while Etteplan
has been largely unaffected, and as such trades on a discount compared to peers.
On 2019E P/E Etteplan trades at an in our view unjustifiably large discount of
~20%. We retain our target price of EUR 9.0 but upgrade our rating to BUY
(HOLD).



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PIHLAJALINNA - Q1 REVENUE ABOVE OUR EXPECTATIONS

03.05.2019 - 08.55 | Earnings Flash

In Q1’19, Pihlajalinna’s revenue amounted to 132.5m vs. EUR 126m/128m Evli/cons
estimates, while adj. EBITDA landed at EUR 12.6m vs. EUR 13,0m/13,0m Evli/cons
estimates. Organic growth improved y/y. Revenue growth was supported by new
customer relationships in occupational healthcare and the insurance company
partnership with Fennia.

Read more

 * Q1 revenue was EUR 132.5m vs. EUR 126m/128m Evli/cons estimates. Revenue grew
   11.2 y/y%.
 * Growth from M&A was 8.3%. Most significant M&A transactions were the
   acquisitions of Doctagon and the Forever fitness center chain as well as the
   acquisition of Terveyspalvelu Verso.
 * Q1 organic growth was 2.8% (EUR 3.4m)
 * Q1 adj. EBITDA was EUR 12.6m (9.5% margin) vs. EUR 13,0m/13,0m (10.3%/10.1%)
   Evli/cons estimates. Adj. EBITDA increased by 81.6% % y/y. Profitability
   improved significantly especially in occupational healthcare services, public
   sector specialized care and private clinic operations.
 * Q1 adj. EBIT was EUR 3.9m (3.0% margin) vs. EUR 5,0m/4,7m (4,0%/3,7%)
   Evli/cons estimates.
 * Guidance for 2019E: Revenue is expected to increase from the 2018 level and
   adjusted EBIT is expected to clearly improve from last year.



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VERKKOKAUPPA.COM - COMPETITION EXPECTED TO REMAIN TIGHT IN ‘19E

03.05.2019 - 07.55 | Preview

Verkkokauppa.com will report its Q1 earnings on May 10th. As before, our
interest is on how competition has developed in the beginning of the year. We
have kept our estimates for 2019E intact and retain our rating “BUY” with TP of
EUR 4.7 ahead Q1.

Read more

Guidance for 2019E wide

Verkkokauppa.com updated its guidance in February. The guidance seems quite
wide; with 10-20% annual revenue growth, operating profit between EUR 11-17m and
2.5-4.5% EBIT margin. Our revenue estimate for 2019E is EUR 519m which lands on
the lower half of the range of EUR 500-550m, guided by the company. We expect Q1
revenue of EUR 114m/116m cons. with adj. EBIT of EUR 2.5m/3.0m cons.

Launch of a new product category

In March, Verkkokauppa.com launched a new product category: sporting equipment
for more than ten ball games, such as football, floorball and golf. The new
range added some 1300 new products to the company’s product range.
Verkkokauppa.com aims to lower the prices of the sporting equipment and
accessories and be one of the market leaders within the category in the next 3-5
years. Based on Finnish Commerce Federation, Finnish online shopping 2019E
growth is expected to be ~9%. Price competition is expected to remain tight and
challenging throughout 2019E.

We keep rating “BUY” with TP of EUR 4.7

Verkkokauppa.com published its IFRS 16 updated figures for 2017-2018 earlier in
Q1 and our estimates reflect the changes. We have kept our estimates intact. On
our estimates, Verkkokauppa.com is trading at 2019-‘20E EV/EBIT multiples of
11.3x and 8.9x, which translate into 70% and 49% discount compared to the peer
group. We keep our rating “BUY” with target price of EUR 4.7 ahead Q1.



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DETECTION TECHNOLOGY - SBU BACK IN BUSINESS

29.04.2019 - 09.10 | Company update

DT’s Q1 result was in line with our expectations. The updated outlook and
comments regarding SBU market support our positive view on DT. On the back of
our revised estimates and valuation, we maintain our BUY recommendation with new
target price of 23.5 euros (prev. 19).

Read more

Good start to the year, SBU back on track

Q1 result was in line with our expectations. Q1 net sales amounted to EUR 23.1m
(+19.3x% y/y) vs. EUR 22.3m/22.6m Evli/consensus estimates. Q1 EBIT was EUR 3.9m
(16.7% margin) vs. EUR 4.1m/4.0m Evli/cons. SBU sales grew 22.9% to EUR 14.5m
vs. EUR 13.6m Evli estimate. MBU sales were EUR 8.6m vs. EUR 8.8m Evli estimate.
R&D costs were EUR 2.5m, up 28% as indicated earlier. SBU market demand has
picked up, with increasing CT investments starting in US airports. We have
estimated the upcoming airport related EU and US standards to offer DT
additional sales in the range EUR 20-30m in the coming years. See our report for
more details.

EBIT growth taking a breather this year, longer-term investment case intact

Based on the SBU market pick up, we have moderately raised our sales estimates
for ’19-21E. We expect ‘19E net sales to grow 11% to EUR 104m driven by SBU’s
return to growth of 17.8% on weak comparables. We expect ‘19E MBU net sales
growth to be flat due to the ramp-down of key customer’s product in H2. We
expect ‘19E EBIT to be at last year’s level due to increase in R&D spending,
increasing share of SBU sales affecting mix, as well as increased pricing
competition. Despite flat EBIT this year, longerterm investment case is intact.
We see DT’s investments this year securing its growth and profitability drivers
for the coming years.

Maintain BUY recommendation with new TP of 23.5 (19)

On our estimates, DT is trading at discounts on EV/EBIT, EV/EBITDA and P/E
multiples for ’19-20E. We see discount as unjustified given the attractive
longer-term investment case. On the back of our revised estimates and valuation,
we maintain our BUY recommendation with new target price of 23.5 euros (19).

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SRV - BIGGEST TROUBLES NOW BEHIND

29.04.2019 - 08.30 | Company update

SRV’s operative operating profit remained barely positive, at EUR 0.5m, despite
notable FX impact and one-off items burden. SRV specified its guidance for the
operative operating profit, implying a range of EUR 0-27m. Our revised estimate
for 2019 stands at EUR 21.1m (prev. 32.7m), attributable to a re-evaluation of
the impact of on-going lower margin projects. We retain our HOLD-rating with a
target price of EUR 1.9 (2.0)

Read more

Earnings impacted by approx. EUR 3m one-offs

SRV’s Q1 revenue amounted to EUR 222.6m, supported by increased housing unit
completions. The operative operating profit fell below expectations, at EUR
0.5m, primarily due to approx. EUR 3m expense entries for REDI Majakka’s water
damage and the dissolution of the VTBC fund. The operating profit was aided by a
stronger ruble and amounted to EUR 3.3m. SRV further specified its operative
operating profit guidance for 2019, expecting it to be positive but below the
EUR 27m operative operating profit in 2017.

Downwards revisions on our estimates

We have lowered our 2019 revenue estimates by approx. 5% to EUR 1,029m, mainly
through lowered business construction estimates. We have also lowered our
operative operating profit estimates to EUR 21.1m (prev. 32.7m) in accordance
with the specified guidance. We note that in our pre-Q1 estimates we
underestimated the impact of on-going lower margin projects, which are expected
to continue to have an effect during 2019. With the delay of REDI Majakka we
expect a bulk of housing units to be completed in late-2019 and such our
estimates, especially for earnings, are heavily skewed towards Q4/19.

HOLD with a target price of EUR 1.9 (2.0)

The introduction of IFRS 16 and the treatment of plot leases, causes severe
comparability uncertainty for peer multiples, as for SRV the change increased
net interest-bearing debt by more than 50%, and for now we refrain from relying
on per multiples. With the downward revisions of our estimates we lower our
target price to EUR 1.9 (2.0) and retain our HOLD-rating.



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NEXT GAMES - MAKING HEADWAY

29.04.2019 - 08.00 | Company update

Next Games Q1 EBIT and adjusted operating result amounted to EUR -2.4m and -1.3m
respectively, while revenue grew 104% y/y to EUR 9.8m. The company’s cost
savings program started to show, and further notable progress is expected in Q2.
We retain our HOLD-rating with a target price of EUR 1.5

Read more

Positive TWD: Our World signs

Next Games’ Q1 results saw profitability remaining in the red, with EBIT at EUR
-2.4 (Evli -2.1m) and the adjusted operating result at EUR -1.3m. Q1 revenue
grew 104% y/y to EUR 9.8m. TWD: No Man’s Land continued on a steady pace while
implementation of new sales strategies in TWD: Our World saw the games ARPDAU
and daily conversion rates improve towards the end of the quarter and reached an
ARPDAU of EUR 0.31 in March (Q1: EUR 0.26). Management comments point towards a
prolonged soft launch period for Blade Runner Nexus due to the nature of the
game mechanics. Our estimates assume launch during Q3/2019.

Cost savings starting to show

Next Games’ expects to achieve annual cost savings in fixed costs of
approximately EUR 6.5m and monthly fixed costs excluding game marketing
investments to amount to EUR 1.1-1.2m during 2019 after achieving the targeted
cost savings. As the held consultation proceedings still affected Q1 results, a
reduction in the cost base is expected to be seen in Q2. On our revised
estimates we expect an EBIT and adjusted operating result of EUR -4.8m and EUR
-0.5m respectively in 2019. Actions taken to stabilize the operational cash flow
saw the company’s cash position start to stabilize during the quarter.

HOLD with a target price of EUR 1.5

Next Games has made progress in scaling down its cost base and we expect further
progress in Q2. A major boost in revenue would be necessary for further
improving profitability which despite positive signs from Our World and the
expected Launch of Blade Runner Nexus still seems challenging in the near-term.
we retain our HOLD-rating with a target price of EUR 1.5



Open report


CONSTI - SINGLE PROJECT STILL CAUSING TROUBLES

29.04.2019 - 07.30 | Company update

Consti’s Q1 saw good sales growth of 18%, while performance obligations relating
to a building purpose modification project kept earnings in the red, with a Q1
EBIT of EUR -0.4m. With the project still on-going the earnings outlook for 2019
continues to appear somewhat meagre, despite otherwise decent profitability
development.

Read more

Solid sales growth but earnings still slightly negative

Consti’s first quarter revenue beat expectations, growing 18.0% y/y to EUR 73.5m
supported by strong sales growth in Housing Companies. Profitability only just
remained negative, with EBIT at EUR -0.4m, with remaining performance
obligations relating to a building purpose modification project still affecting
results. Pick up in order intake compared to H2/18 aided in pushing the order
backlog to a healthy EUR 237.8m. Stricter tendering criteria in Building
Technology continued to weigh in on revenue and order backlog but management
considers the quality of the order backlog to have improved.

On-going project still casting a shadow on 2019 earnings

With the good growth in Q1 we adjust our 2019 revenue estimate to EUR 337m
(prev. EUR 324.1m) while the stagnant order backlog development prompts us to
remain cautious on growth in the mid-term. We expect growth above all in the
Housing Companies and Public Sector business areas. With the profitability
burdening building purpose modification project still on-going (expected
completion during Q2/19) we lower our Q2 EBIT estimates while keeping our H2/19
estimates intact for a 2019 EBIT estimate of EUR 5.9m (prev. EUR 7.1m).

HOLD with a target price of EUR 6.0

On our estimates Consti trades in line with the construction company peer group
on 2019E P/E but on a significant discount on 2020E multiples. With the
profitability burdening on-going obligations and uncertainties relating to
Consti’s earnings capacity under a healthier project pipeline, without major
negative margin projects, we retain our HOLD-rating with a target price of EUR
6.0



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TOKMANNI - FOCUS ON IMPROVING PROFITABILITY IN ‘19E

26.04.2019 - 10.00 | Company update

Tokmanni’s focus in 2019E is to increase profitability and profit margin.
Tokmanni’s revenue and LFL growth grew well in Q1 driven by campaigns and
clearance sales. We see valuation of being moderate. Hence, we retain TP of EUR
9.0, but downgrade our rating to “HOLD”

Read more

LFL growth was clearly above expectations

Tokmanni’s Q1 revenue grew by 8.3% and was EUR 188m vs. EUR 186m our
expectation. LFL growth continued to be high with 4.1 % growth vs. 1 % our view.
Sales was driven by clearance sales, Nettopäivät campaign and the change in
assortment of newly-aqcuired Ale-Makasiini stores. Sales development was
particularly good in clothing and tool products categories. At the same time,
discounted prices weighed down gross margin (31,2% vs. 33,3% our view).
Tokmanni’s target is to increase its gross margin and profitability and reduce
the relative share of fixed costs in 2019E.

Focus on new store openings and increase in profitability

Tokmanni’s target to expand its store network has been efficient. In Q1’19
Tokmanni’s store network was 188 stores (175 stores in Q1’18). Tokmanni
reiterates its guidance and targets to increase its retail space by some 12,000
square meters annually which means approximately five new store openings per
year. Tokmanni has agreed on opening of seven new stores and two relocated
stores during 2019, hence, Tokmanni will exceed its targets in 2019E.

Retaining TP of EUR 9 with “HOLD”

Tokmanni’s figures were impacted by the changes of IFRS 16. We have updated our
figures to reflect the changes. Based on Q1 results, we have slightly adjusted
upwards our estimates. We now see revenue of EUR 936m and EBIT of EUR 63m for
2019E compared to previous estimates of EUR 921m and EUR 58m. In 2019E Tokmanni
trades at 13x EV/EBIT which is some 18% discount to Nordic grocery focused
peers. We retain our TP of EUR 9, but downgrade our rating to “HOLD”.



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DETECTION TECHNOLOGY - Q1 RESULT IN LINE, UPDATED OUTLOOK

26.04.2019 - 09.20 | Earnings Flash

Q1 net sales at EUR 23.1m (+19.3% y/y) vs. EUR 22.3 m/22.6m Evli/consensus
estimates. MBU sales were EUR 8.6m (EUR 8.8m our expectation) and SBU sales were
EUR 14.5m (EUR 13.6m our expectation). DT’s Q1 EBIT came in at EUR 3.9m, which
is in line with our estimates of EUR 4.1m (EUR 4.0m cons).

Read more

 * Group level results: Q1 net sales amounted to EUR 23.1m (+19.3x% y/y) vs. EUR
   22.3m/22.6m Evli/consensus estimates. Q1 EBIT was EUR 3.9m (16.7% margin) vs.
   EUR 4.1m/4.0m Evli/cons. R&D costs amounted to EUR 2.5m or 10.8% of net
   sales.
 * Medical Business Unit (MBU) delivered net sales of EUR 8.6m which was in line
   with our estimate of EUR 8.8m. Net sales of MBU increased by 13.8% y/y due to
   continued good demand from key customers and successful shipments.
 * Security and Industrial Business Unit (SBU) had net sales of EUR 14.5m vs.
   EUR 13.6m Evli estimate. SBU sales grew 22.9% y/y due to increased demand for
   security solutions.
 * Updated outlook: sales of both business units will grow in line with the
   company's financial targets in the second quarter. The company expects demand
   to decline in the MBU business in the second half of 2019, as a significant
   customer will ramp down production of a device that uses DT's solution.
   Despite this, the company's total net sales are expected to grow in the
   second half of the year. There is uncertainty regarding demand, and the
   intensification of competition might be reflected in product prices.
 * Medium-term business outlook is unchanged: Detection Technology aims to
   increase sales by at least 15% per annum and to achieve an operating margin
   at or above 15% in the medium term.

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SCANFIL - SLOW START FOR THE YEAR

26.04.2019 - 09.10 | Company update

Scanfil’s Q1 EBIT, at EUR 6.8m, came in below our EUR 8.0m estimate, while the
EUR 130m sales topped our EUR 125m estimate. Scanfil did warn Q1 would be slow
due to a few major customers and still expects clear pick-up in activity in Q2.
We leave our growth and margin estimates unchanged, retaining our TP of EUR 4.75
and BUY rating.

Read more

The 7% y/y revenue decline was due to two segments

Scanfil reorganized its segments in the beginning of 2019. The new structure
includes Communication (previously Networks & Communications; 14% of Q1 sales),
Consumer Applications (parts of Urban Applications and Other Industries; 18% of
Q1 sales), Energy & Automation (some contracts added from other segments; 20% of
Q1 sales), Industrial (parts of Urban Applications and Other Industries; 28% of
Q1 sales), and Medtec & Life Science (21% of Q1 sales) segments. The Q1 revenue
decline was attributable to the Consumer Applications (35% y/y decrease) and
Communication (20% y/y decrease) segments. The other three segments’ revenues
were either flat or increasing. Scanfil also expects Consumer Applications’ top
line to grow in 2019 despite the plan to halt the production of a single major
product where demand has been low since Q3’18.

Q1 EBIT margin low due to volumes and product mix

Scanfil managed a meagre 5.3% operating margin in Q1 (7.4% a year ago) owing to
both low sales volumes and a suboptimal product mix. Although Scanfil has now
posted substandard margins for two consecutive quarters (Q4 EBIT was similarly
low due to product mix), we continue to expect 6-7% operating margins going
forward. Scanfil targets 7% operating margin.

Our target price remains unchanged at EUR 4.75 per share

Scanfil’s peer group valuation multiples have stayed largely flat since the
previous earnings report. Scanfil currently trades at 6.1x EV/EBITDA ‘19e and
7.8x EV/EBIT ‘19e, a valuation level in line with the peer group. Moreover, as
we see no changes to Scanfil’s longer term outlook, we retain our target price
of EUR 4.75 per share and leave our rating BUY.



Open report


CONSTI - EBIT STILL SLIGHTLY NEGATIVE

26.04.2019 - 09.05 | Earnings Flash

Consti’s Q1 EBIT was in line with consensus but slightly below our estimates, at
EUR -0.4m (EUR 0.1m/-0.3m Evli/cons.). Consti’s Q1 revenue of EUR 73.5m beat
both our and consensus estimates (EUR 64.4m/62.4m Evli/cons.). Consti’s order
backlog amounted to EUR 237.8m.

Read more

 * Net sales in Q1 amounted to EUR 73.5m (EUR 62.3m in Q1/18), beating both our
   and consensus estimates (EUR 64.4m/62.4m Evli/cons.). Sales growth in Q1 was
   18.0 % y/y.
 * EBIT in Q1 amounted to EUR -0.4m (EUR -0.2m in Q1/18), slightly below our
   estimates but in line with consensus (EUR 0.1m/-0.3m Evli/cons.). EBIT
   remained negative due to performance obligations relating to a building
   purpose modification project while profitability development otherwise was
   mainly positive.
 * The order backlog at the end of Q1 was EUR 237.8m, down 5.0 % y/y.
 * Guidance reiterated: Consti estimates that its operating result for 2019 will
   improve compared to 2018.



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NEXT GAMES - REVENUE MISS, EBIT NEGATIVE AS EXPECTED

26.04.2019 - 08.30 | Earnings Flash

Next Games Q1 revenue and EBIT amounted to EUR 9.8m (Evli EUR 12.0m) and EUR
-2.4m (Evli EUR -2.1m) respectively. Next Games expects to achieve annual
savings of approx. EUR 6.5m from its cost savings program. The company’s cash
position was at EUR 4.8m at the end of the quarter.

Read more

 * Next Games’ revenue in Q1 amounted to EUR 9.8m, below our estimates of EUR
   12.0m. Revenue growth y/y on was 104%.
 * EBIT in Q1 amounted to EUR -2.4m, slightly below our estimate of EUR -2.1m.
   The adjusted operating profit amounted to EUR -1.3m. As a result of the
   company’s cost savings program, annual savings of approx. EUR 6.5m compared
   to H2/18 averages are to be achieved.
 * TWD: No man’s land: DAU during Q1 was 225k (Q4/18: 253k). MAU during Q1 was
   669k (Q4/18: 728k). ARPDAU was EUR 0.22 during Q1 (Q4/18: 0.25).
 * TWD: Our world: DAU during Q1 was 211k (Q4/18: 223k). MAU during Q1 was 982k
   (Q4/18: 759k). ARPDAU was EUR 0.26 during Q1 (Q4/18: 0.28).
 * The company’s cash position at the end of the quarter amounted to EUR 4.8m
   and has according to the company began to stabilize.
 * Next Games expects to get at least two games into testing phase during 2020.



Open report


CAPMAN - OUTLOOK REMAINS POSITIVE

26.04.2019 - 08.00 | Company update

CapMan posted solid Q1 results, although slightly below our estimates. Of
particular interest were comments relating to carried interest, with potential
materialization from H2/19 onwards. The fundraising of the newest Buyout fund is
progressing well, while Infra has also seen positive development, with AUM now
at EUR 270m. We retain our BUY-rating with a target price of EUR 1.85 (1.80)

Read more

Comparable operating profit at a solid EUR 5.6m

CapMan’s Q1 results fell slightly below our estimates, with group turnover at
EUR 9.3m (Evli 10.7m) and operating profit of EUR 4.7m (Evli 5.5m). The
comparable operating profit, excluding one-off costs relating mainly to the
acquisition of JAM Advisors, amounted to EUR 5.6m. The combined revenue of the
Management Company business and Services business grew 27% y/y. No significant
carried interest was booked during the quarter, but Scala success fees aided the
Services business turnover. The operating profit was aided by a EUR 1.5m fair
value change of the company’s market portfolio, with EUR 20m of the portfolio
remaining at the end of the quarter.

Positive comments on carried interest outlook

Management comments regarding the carried interest outlook were positive.
Carried interest materialization already during H2/19 appears plausible and
potential in the coming years remains solid in both private equity funds and
real estate. Near-term interest also remains on the progress of fundraising of
the new Buyout fund and development of the first Infra fund, with total AUM in
Infra already at EUR 270m, while management also hinted on new projects in the
pipeline.

BUY with a TP of EUR 1.85 (1.80)

We have made no major revisions to our estimates post-Q1. We expect an operating
profit of EUR 23.4m, supported by carried interest during the latter half of the
year. Although uncertainties with carried interest are always present, the
encouraging management comments alleviate some uncertainty concerns. We retain
our BUY-rating with a target price of EUR 1.85 (1.80).



Open report


SRV - RESULTS QUITE IN LINE, GUIDANCE SPECIFIED

26.04.2019 - 00.25 | Earnings Flash

SRV’s Q1 results were in general quite in line with our and consensus estimates.
The operating profit was EUR 3.3m (EUR 3.8m/2.8m Evli/cons.) and operative
operating profit EUR 0.5m (Evli 4.8m). Revenue was EUR 222.6m (EUR 224.7m/232.7m
Evli/cons.). SRV specified its guidance, adding that the operative operating
profit is expected to be lower than in 2017 (EUR 27m).

Read more

 * SRV’s revenue in Q1 amounted to EUR 222.6m (EUR 215.7m in Q1/18), quite in
   line with our and consensus estimates (EUR 224.7m/232.7m Evli/cons.). Growth
   in Q1 amounted to 3.2% y/y.
 * The operating profit in Q1 amounted to EUR 3.3m (EUR -8.7m in Q1/18),
   slightly below our estimates but above consensus (EUR 3.8m/2.8m Evli/cons.),
   at an operating profit margin of 1.5 %. The operative operating profit
   amounted to EUR 0.5m (Evli EUR 4.8m) and includes an expense entry of approx.
   EUR 3m relating to REDI Majakka’s water damage and the dissolution of the
   VTBC fund.
 * The order backlog strengthened to EUR 1,782.5m (Q1/18: EUR 1,634.0m)
 * Guidance specified: SRV expects the full-year consolidated revenue for 2019
   to grow compared to 2018 (EUR 959.7m). The operative operating profit is
   expected to improve compared to 2018 (EUR -10.0m) and to be positive, but
   lower than operative operating profit in 2017 (EUR 27m).
 * SRV is investigating the possibility to strengthen its balance sheet through
   the issuance of a new hybrid bond with an estimated size of EUR 45-60m.



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TOKMANNI - LFL GROWTH CONTINUES TO BE IMPRESSIVE

25.04.2019 - 09.30 | Earnings Flash

Tokmanni had revenue of EUR 188,1m, which beats EUR 186/184m Evli/consensus
estimates by ~ 1 %. LFL growth continues to be clearly above estimations at 4.1%
vs. 1% our expectation. Strong revenue and LFL growth were driven by Nettopäivät
campaign, change of assortments of Ale-Makasiini stores and clearance sales.
Gross margin was 31,2 % vs. our 33,3% expectation. Due to the changes of IFRS
16, adj. EBITDA of 12.8 is not comparable with our estimate of 5.1. Tokmanni
2019E guidance reiterated; profitability and adj. gross margin are expected to
increase from last year.

Read more

 * Q1 revenue was EUR 188m vs. EUR 186m/184m Evli/cons, ~1 % above estimates.
   Revenue grew by 8.3% y/y, driven by 4.1% LFL growth (Evli LFL expectation 1%)
   and new openings.
 * Q1 adj. gross profit was EUR 58.8m (31.2% margin) vs. EUR 62.0m (33,3%) Evli
   expectation.
 * Q1 adj. fixed costs in total were EUR 46.8m (24.9% of revenue) vs. EUR 57.8m
   (31.1% of sales) Evli view.
 * Q1 adj. EBITDA was EUR 12.8m (6.8% margin) vs. EUR 5.1m (2.7%) Evli and EUR
   5.3m (2.9%) consensus.
 * 2019 guidance intact: revenue will grow in 2019 based on new openings in 2018
   and in 2019. Profitability (adj. EBITDA margin) will increase y/y in 2019E.

Open report


CAPMAN - A SOLID START TO THE YEAR

25.04.2019 - 09.00 | Earnings Flash

CapMan’s Q1 results were slightly below our estimates. Group turnover amounted
to EUR 9.3m (Evli EUR 10.7m) and the operating profit amounted to EUR 4.7m (Evli
5.5m), while the comparable operating profit was at EUR 5.6m. CapMan continued
reallocation of its market portfolio capital, with EUR 20.0m remaining. Capital
under management rose to EUR 3.2bn.

Read more

 * Group turnover in Q1 amounted to EUR 9.3m (EUR 7.3m in Q1/18), below our
   estimates (Evli EUR 10.7m). No significant carried interest was booked during
   the quarter.
 * Operating profit in Q1 was EUR 4.7m (EUR 4.1m in Q1/18), below our estimates
   (Evli EUR 5.5m). Operating profit excl. IAC was EUR 5.6m
 * Management Company business revenue in Q1 was EUR 6.4m vs. EUR 7.2m Evli.
   Operating profit in Q1 was EUR 0.8m vs. EUR 1.8m Evli.
 * Investment business: Revenue in Q1 was EUR 0.0m vs. EUR 0.2m Evli. Operating
   profit in Q1 was EUR 3.9m vs. EUR 2.9m Evli.
 * Services business: Revenue in Q1 was EUR 2.9m vs. EUR 3.3m Evli. Operating
   profit in Q1 was EUR 1.8m vs. EUR 1.3m Evli.
 * Capital under management by the end of Q1 was EUR 3.2bn. Of the capital under
   management EUR 1.9bn was attributable to real estate funds, EUR 0.9bn to
   private equity funds and EUR 0.3bn to Infra.
 * CapMan continued reallocation of its market portfolio funds and had EUR 20.0m
   remaining at the end of Q1.



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SCANFIL - SALES BEAT, EBIT SUBDUED

25.04.2019 - 09.00 | Earnings Flash

Scanfil missed our Q1 EBIT estimate of EUR 8.0m, the figure coming in at EUR
6.8m. The company said earlier Q1 will be relatively slow, citing low demand
among a few significant customers. Scanfil continues to expect customer demand
to pick up during Q2, holding on to its earlier guidance for the year.

Read more

 * Q1 revenue amounted to EUR 130m vs. our expectation of EUR 125m. Revenue
   declined by 7% y/y due to customer-specific considerations.
 * The sales decrease was attributable to the Consumer Applications and
   Communication segments. Other customer segments’ revenues were stable or
   developed positively.
 * Q1 EBIT stood at EUR 6.8m (5.3% margin) vs. our estimate of EUR 8.0m (6.4%
   margin). The operating profit declined by a third on an annual basis due to
   lower turnover and unfavorable product mix.
 * Scanfil retains 2019 guidance for EUR 560-610m in revenue and EUR 36-41m in
   EBIT. The company expects Q2 to be much stronger in terms of revenue and
   EBIT.



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PIHLAJALINNA - PROFITABILITY EXPECTED TO INCREASE IN Q1

25.04.2019 - 08.20 | Preview

Pihlajalinna will report its Q1 earnings on May 3rd. As before, profitability
and new contract pipeline are of interest but also comments on the failure of
SOTE reform and its impacts. Our estimates reflect the IFRS 16 changes. We keep
our rating “BUY” with target price of EUR 12.0 ahead of Q1.

Read more

No major pipeline changes in Q1

Pihlajalinna expects its profitability and organic growth to increase in 2019E.
The company will continue its expansion especially into regional capitals in
2019E-2020E. However, the failure of SOTE reform keeps the pipeline uncertain as
municipalities’ eagerness to strike new contracts is impacted by SOTE. Provision
of occupational healthcare services for Stora Enso started in Jan 2019 (we
estimate value at EUR ~4m).

Acquisition of fitness centers continued in Q1

Pihlajalinna has expanded its services into wellbeing and preventative
occupational healthcare. The company bought Forever fitness center chain in Feb
2018. The acquisition of Leaf Areena in Turku further expanded Pihlajalinna’s
wellbeing services and the first Forever LITE fitness center was opened in
Tampere in late 2018. Following the strategy, Pihlajalinna acquired FIT1 chain
in Q1’19, adding five new fitness centers to its portfolio.

Retaining “Buy” with TP of EUR 12 ahead of Q1

Pihlajalinna published its restated financials for 2018 with IFRS 16 changes.
Right-of-use assets increased by EUR 86.7m and interest-bearing debt by EUR 88m.
We have updated our model to be in line with the restated figures but kept the
underlying estimates unchanged. We expect Q1 revenue of EUR 126m and adj. EBITDA
of EUR 13 (10.1 % margin). We expect profitability to increase in 2019E from
last year’s weaker results caused by high start-up costs, transfer and M&A fees
as well as high public specialized care costs. Our rating and target price
(“Buy”, TP EUR 12) are unchanged ahead of Q1.



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VAISALA - FOCUS ON INTEGRATION AND EXECUTION IN H2

25.04.2019 - 08.15 | Company update

Vaisala’s Q1 missed our estimates, but overall our expectations for full year
2019E remain intact. After two recent acquisitions and subsequent increase in
operating expenses, Vaisala needs to succeed in integrating the acquired
business. Strong received orders and pick up in larger projects support outlook.
We maintain HOLD recommendation with target price of 18 euros.Vaisala’s Q1
missed our estimates, but overall our expectations for full year 2019E remain
intact. After two recent acquisitions and subsequent increase in operating
expenses, Vaisala needs to succeed in integrating the acquired business. Strong
received orders and pick up in larger projects support outlook. We maintain HOLD
recommendation with target price of 18 euros.

Read more

Q1 miss, but order book and projects support outlook

Vaisala’s Q1 result miss was due to lower than expected seasonal net sales in
Weather & Environment. W&E net sales were 49.6 MEUR vs. 55 MEUR our expectation,
while Industrial Measurements net sales were 34.6 MEUR vs. 33 MEUR our
expectation. On Group level, Q1 EBIT came in at 0.0 MEUR vs. our expectation of
2.3 MEUR. Despite Q1 miss, the outlook for both BU’s looks supportive with
strong orders received (+30%) and recent pick up in larger W&E projects (15 MEUR
Argentina and 7 MEUR Sweden deals announced).

Estimates unchanged, OPEX increase to weigh on 2019E EBIT

Post Q1, our estimates are unchanged. We expect 2019E net sales to be 382 MEUR
(10% growth yoy) and EBIT to be 31 MEUR (41 MEUR adjusted for PPA and one-offs),
representing 8.1% EBIT margin (10.8% adj. EBIT margin). Estimated EBIT decline
in 2019E is due to acquisitions related increase in operating expenses, which we
estimate to increase roughly 16% to 172 MEUR (vs. 148 MEUR 2018).

HOLD maintained with target price of 18 euros

On our estimates, Vaisala is trading at adjusted EV/EBIT and EV/EBITDA multiples
of 17x and 14x for 2019E, which is 4-8% lower than our peer group. Looking at
2020E multiples, valuation looks slightly more attractive given our estimated
EBIT improvement, but we are not ready to put emphasis on next year due to the
on-going process of integrating the acquired businesses. We see current
valuation as fair, thus we maintain HOLD and target price of 18 euros.



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FINNAIR - GLOBAL TRAFFIC EXPECTED TO GROW IN ‘19E

25.04.2019 - 08.15 | Company update

Finnair’s Q1’19 results fell short of expectations. Comparable EBIT was EUR
-16.2m vs. -6m our view. Especially passenger growth in China was low. The
company expects increased competition due to increased capacity especially on
routes between Europe and Asia. Finnair reiterates its guidance: 10 % capacity
growth in 2019 and revenue growth of slightly slower. We keep our “HOLD” rating
with TP of EUR 8.0.

Read more

Q1: costs and fuel weighed down the result

Finnair’s revenue was in line with our expectation (EUR 673m vs. 679m our view).
The company’s Q1 adj. EBIT was clearly below expectations at EUR -16.2m vs. EUR
-6m Evli and EUR -6m cons. Compared to our estimates the loss was driven by
increased costs. Operating costs (excl. fuel and staff costs) were EUR 353m vs
EUR 339 our view. Increase in OPEX was driven by higher passenger and handling
costs as well as increased aircraft materials and overhaul costs. Fuel costs
increased from the year end but was below our expectations (EUR 145m vs. 155m
our view).

Competition expected to increase in 2019

Finnair guides 10 % ASK growth in 2019 with passenger revenue slightly behind.
This will be driven by Feb-2019 delivered A350 and a second A350 which will be
delivered in Q2’19. Added capacity will be mostly put to Asian routes. Finnair
expects increased competition due to added capacity especially on routes between
Europe and Asia. Based on Q1 results, we have made small adjustments to our cost
estimates but revenue remains intact. We expect EBIT 2019E to be EUR 195m
(previous estimate EUR 203m).

Retaining “Hold” with TP of EUR 8

It is notable that the peer multiples might not reflect the changes of IFRS 16
yet which makes the comparison challenging. On our estimates Finnair trades at
an EV/EBITDA of 3.4x and P/B of 1.1x in FY19E-20E, while generating ROCE of ~7%
with a WACC of 8.9. We see valuation as fair and hence retain “Hold” with TP of
EUR 8.0.



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SUOMINEN - IMPROVEMENT ON THE CARDS

25.04.2019 - 08.00 | Company update

Suominen has disappointed expectations several quarters in a row. The company
now posted EUR 3.0m Q1 EBIT, a figure clearly above our EUR 2.0m estimate. The
earnings beat was driven by improved gross margin; the product of price hikes
and stabilizing raw materials costs. Volume outlook is still uncertain, yet in
our view Suominen’s earnings have now bottomed out. We increase our target price
to EUR 2.85 (2.40) per share, while retaining our HOLD rating.

Read more

2019 volume outlook remains uncertain

The company has managed to improve its gross margin through price hikes, however
this has meant losing volumes. We expected the company to lose Q1 volumes by
around 5% y/y. Therefore the 9% Q1 volume decline we estimate from the disclosed
figures came as a negative surprise. We had previously expected volume declines
of around 8% for the remaining quarters of 2019, while estimating 7% volume
decline for the whole year. We now expect 2019 volumes to decline by 9%.

History suggests 11-12% gross margin potential

Suominen achieved an 8.1% Q1 gross margin (vs. our 7.0% expectation and 7.4% a
year ago). The GM had previously touched the low of 6.2% in Q4’18. We expect the
2019 GM to improve to 8.7% as higher prices continue to pass through. We
estimate Suominen to reach a roughly 11% GM by 2021 as the recent years’
oversupply situation balances out. According to our analysis, this would imply
an EBIT margin of ca. 5% in 2021E.

We increase our target price to EUR 2.85 per share

We expect Suominen to reach 3.1% EBIT margin in 2019, while estimating further
margin upside to the tune of 200bps by 2021 on the back of stabilizing nonwovens
market. In our view a 5% EBIT margin is a reasonable assumption in a long-term
valuation context. However, given the company’s recent challenges we are not yet
ready to fully weight this long-term potential in our TP. We do note that the 5%
margin assumption would justify a share price materially above EUR 3 per share.
Suominen now trades at 6.1x EV/EBITDA ‘19e, a 20% discount to peer multiples.



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SUOMINEN - THE RESULTS LOOK PROMISING

24.04.2019 - 16.00 | Earnings Flash

Suominen posted Q1 adj. EBIT, at EUR 3.0m (vs. our EUR 2.0m estimate),
substantially above our expectations. The company’s gross profit (and margin)
improved due to higher prices and stabilizing input costs. Volumes were lost,
yet the results point to Suominen having achieved a turnaround in earnings.

Read more

 * Q1 revenue amounted to EUR 110m vs. our estimate of EUR 116m. Revenue grew by
   3% y/y (EUR 3.2m in absolute terms). The EUR/USD exchange rate accounted for
   EUR +4.7m, quite in line with our EUR 4.3m positive expectation. This means
   organic growth was roughly EUR -1.5m. We expected clearly positive organic
   growth (around EUR 4m), estimating improved pricing would outweigh volume
   losses.
 * Gross profit totaled EUR 8.9m (8.1% margin) vs. our EUR 8.0m (7.0% margin)
   projection.
 * In other words, even though Suominen lost substantial volumes, price hikes
   and stabilizing input costs helped the company to achieve a major
   profitability improvement.
 * Adj. EBIT reached EUR 3.0m (2.7% margin) vs. our EUR 2.0m (1.8% margin)
   estimate.
 * Suominen retains its 2019 guidance for flat revenue and improving adj. EBIT.
 * The company also announced the appointment of Mr. Toni Tamminen as CFO
   (effective 30 Jul 2019).



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VAISALA - Q1 BELOW OUR EXPECTATIONS

24.04.2019 - 14.20 | Earnings Flash

Vaisala’s Q1 net sales at 84.2 MEUR vs. 87 MEUR our expectation and 88.5 MEUR
consensus. Q1 EBIT was 0.0 MEUR vs. our expectation of 2.3 MEUR. Adjusted EBIT
was 3.0 MEUR vs. our 5.0 MEUR adjusted EBIT expectation.

Read more

 * Group level results: Q1 net sales at 84.2 MEUR vs. 87 MEUR our expectation
   and 88.5 MEUR consensus. Q1 EBIT was 0.0 MEUR vs. our expectation of 2.3
   MEUR. Adjusted EBIT was 3.0 MEUR vs. our 5.0 MEUR adjusted EBIT expectation
 * Gross margin was 53.2% vs. 51.3% last year
 * Orders received was 113 MEUR vs. 87.1 MEUR last year
 * Weather & Environment (W&E) net sales was 49.6 MEUR vs. 55 MEUR our
   expectation. EBIT was -4.3 MEUR
 * Industrial Measurements (IM) net sales was 34.6 MEUR vs. 33 MEUR our
   expectation. EBIT was 4.6 MEUR
 * CEO comment: “Integration of Leosphere is proceeding according to plan and
   integration of K-Patents has started well during the first quarter. We expect
   to complete these integration projects during the second half of this year.”
 * Business outlook for 2019 unchanged: 2019 net sales to be in the range of EUR
   380–400 million and operating result (EBIT) to be in the range of EUR 25–35
   million including EUR 10–12 million acquisition related amortization and
   one-off expenses related to a lease contract.



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FINNAIR - EBIT BELOW EXPECTATIONS

24.04.2019 - 10.05 | Earnings Flash

Finnair’ Q1 adj. EBIT was clearly below what we expected at EUR -16.2 vs. our
expectation of EUR -6m. Consensus was at -6m. Finnair 2019E guidance reiterated;
10% capacity growth and revenue growth somewhat behind capacity. Especially
transfer traffic between Asia and Europe grew well as well as cargo. Finnair
expects the competition to increase especially between Europe and Asia and in
Asian traffic as the capacity increases. Finnair’s figures were largely impacted
by IFRS 16 changes.

Read more

 * Q1 revenue was EUR 673m vs. EUR 679m/680m Evli/cons.
 * ASK grew by 10.4 % whereas RASK decreased 4.9 % in Q1.
 * Q1 adj. EBIT was EUR -16m vs. EUR -6m/-6m Evli/cons. The difference is caused
   by increased expenses and higher price of fuel compared to the previous year.
 * Q1 comparable EBITDA was 60m vs. 75m our view. Pre-tax profit was -49m vs.
   -31m our view. The difference comes partly from financial expenses that were
   EUR 31.6m vs. EUR 25m our view.
 * Absolute costs: Fuel costs were EUR 145m vs EUR 155m our view. Staff costs
   were EUR 130 vs. 128m our view. All other OPEX combined were EUR 429m vs.
   339m our view.
 * Unit costs: CASK was 6.46 eurocents vs. 6.42 our view while CASK ex fuel was
   5.02 eurocents vs. 4.97 our view.



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TALENOM - SMOOTH SAILING

24.04.2019 - 08.45 | Company update

Talenom’s Q1 earnings brought no larger surprises. The acquisition of
Sweden-based Wakers Consulting and the upgraded guidance greatly reduced two of
the in our view main uncertainties and the outlook continues to look solid. We
retain our BUY-rating with a TP of EUR 35 (24.5).

Read more

No larger surprises in Q1 results

Talenom’s Q1 results did not deviate substantially from our estimates, with
revenue at EUR 14.8m (Evli 14.7m) and EBIT at EUR 3.4m (Evli EUR 3.2m). Talenom
revised its guidance earlier in Q1 and expects net sales growth in 2019 to
increase (prev. remain at a similar pace) compared to 2018 (18.0%) and the
operating profit margin to improve (prev. improve slightly) (2018: 17.5%). The
hidden gem in our view is the profitability guidance upgrade, as the improvement
is expected to stem from development of the accounting production line during
H2/19, which we expect to support margin improvement in 2020.

Viewing expansion with caution

Talenom acquired Wakers Consulting during Q1, opening up its first operations
outside Finland. The characteristics of the acquired firm in our view proves to
show a continued healthy sense of risk aversity, as by size Wakers Consulting is
not far from what we would consider a minimum for soundly being able to
implement the intended organically driven growth strategy. Management comments
on expansion plans imply limited investment needs and erases the in our view
biggest uncertainties related to the expansion.

BUY with a target price of EUR 35 (24.5) per share

We have pre-Q1 been cautious to margin improvement potential, which now looks
probable also in 2020 through accounting line development during H2/19. Although
share price inclines have stretched valuation, with the lower expansion and
margin improvement uncertainty we are prepared to accept higher multiples and
value Talenom at 27.5x and 22.1x 2019E and 2020E P/E respectively, for a TP of
EUR 35 (24.5), reiterating our BUY-rating.



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TALENOM - MINOR EARNINGS BEAT

23.04.2019 - 13.50 | Earnings Flash

Talenom’s first quarter results were quite in line with our expectations. Net
sales amounted to EUR 14.8m (EUR 14.7m Evli) while the operating profit was
slightly above our estimates, at EUR 3.4m (EUR 3.2m Evli). The guidance was
revised already earlier during Q1 and Talenom expects net sales growth to be
greater than in 2018 and the operating profit margin to improve compared to
2018.

Read more

 * Talenom’s net sales in Q1 amounted to EUR 14.8m (EUR 12.7m in Q1/18), in line
   with our estimates (Evli EUR 14.7m). Q1 revenue growth was at 16.1% y/y.
 * The operating profit in Q1 was EUR 3.4m (EUR 2.6m in Q1/18), above our
   estimates (Evli EUR 3.2m), at a margin of 23.3%.
 * Talenom revised its guidance after the acquisition of Wakers Consulting
   during Q1, now expecting the net sales growth rate to be greater than (prev.
   same rate) in 2018 and the operating profit margin to improve (prev. improve
   slightly) compared to 2018
 * Net investments during Q1 increased to EUR 10.5m due to adoption of IFRS 16,
   with the adjusted net investments (excl. IFRS 16) at EUR 2.3m compared to
   3.3m in Q1/18.



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TOKMANNI - LFL GROWTH EXPECTED TO NORMALIZE

18.04.2019 - 09.15 | Preview

Tokmanni will report its Q1 earnings on April 25th. Last year’s LFL growth was
surprisingly high and for Q1’19 we expect LFL growth to normalize. Tokmanni’s Q1
revenue should be driven by the positive retail growth in early 2019. We retain
our “Buy” rating with TP of EUR 9.0

Read more

Store network growing fast in 2019

Tokmanni’s store network was 186 at the end of 2018 and in Q1’19 the store
network grew by four new stores in Northern Finland through acquisitions. In
February Tokmanni agreed on the opening of three new stores in 2019 and on one
store reopening. Tokmanni’s revised target is to increase its store network to
cover more than 200 stores, which implies of five new store openings or
relocated stores each year. With this year’s store network growth Tokmanni
should clearly exceed its yearly target.

LFL growth expected to normalize in Q1

As retail market is highly seasonal, Q1 is normally weaker than other periods.
Tokmanni’s LFL growth hit records in 2018 with annual LFL growth of +5.6%. In
Q1’18 Tokmanni’s reported LFL growth was as high as of 6,1%. We have kept our
expectations conservative in 2019E and foresee of LFL growth of 1%. We have
retained our gross margin expectation for Q1 at 33,3% even though Tokmanni’s
target is to increase the gross margin in 2019.

Retaining estimates intact with “Buy” and TP of EUR 9

We foresee Q1 revenue of EUR 186m (7.2% growth y/y, of which LFL 1.0%) and adj.
EBITDA of EUR 5.1m. (EUR 0.9m Q1’18). We retain “Buy” rating with TP of EUR 9.0.
On our estimates Tokmanni trades 10.7x and 9x EV/EBIT in FY19-20E (prior IFRS 16
changes) and offers attractive dividend yield in FY19-20E. Our estimates do not
reflect IFRS 16 changes yet but will be updated when Q1 results are out.



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SSH - STRATEGY PROCEEDING BUT PAINFULLY SLOW

18.04.2019 - 09.05 | Company update

SSH’s Q1 result missed our expectations due to lackluster software fees in the
period. Q1 net sales were 2.7 MEUR and operating loss was -1.3 MEUR vs. our
expectation of 3.6 MEUR net sales and -0.9 MEUR operating loss. We maintain SELL
recommendation with revised target price of 1.10 euros (previously 1.60).

Read more

Q1 miss puts pressure on closing licensing deals

Q1 net sales missed our estimates due to the lack of larger licensing deals in
the period. Software fees were EUR 0.5 million (1.1m Evli), Professional
services were EUR 0.1 million (0.3m Evli), and Recurring revenue was EUR 2.1
million (2.2m Evli). Although there is still plenty of time left to catch up for
the miss, this puts pressure on closing several larger licensing deals in the
coming quarters to reach the guided 10% growth for 2019E. According to
management UKM pipeline looks good.

Strategy proceeding but painfully slow

No material new news was provided in conjunction with result regarding sales
ramp up of PrivX and NQX. PrivX remains at the heart of SSH’s growth strategy,
but revenue is not expected to be material yet. We have made small downward
changes to our estimates after the Q1 result. We estimate SSH’s 2019E net sales
to decline -7% to 17.1 MEUR (reaching guidance though) and 2019E EBIT to be 0.2
MEUR. Our estimates for the coming years are also broadly intact, with net sales
growth expectations at 12% for 2020E and 2021E and EBIT improving towards 2021E.

Risk/reward still not attractive, SELL maintained

On our estimates, SSH is trading at 2019-20 EV/Sales multiples of 3.0x and 2.6x.
Given the slow growth pace, lack of profitability and uncertainty to our sales
estimates, we see valuation still challenging from a risk/reward perspective. We
maintain SELL recommendation with revised target price of 1.10 euros (previously
1.60). Our target price is based on EV/Sales multiples of 2.5x and 2.2x on our
2019 and 2020 estimates.

Open report


SSH - Q1 RESULT BELOW OUR EXPECTATIONS

17.04.2019 - 09.15 | Earnings Flash

SSH Q1 result was below our expectations. No larger licensing deals were
announced during Q1, which led to Software fees being clearly lower than last
year. Comparables were high, due to last year’s Q1 figures including 1 MEUR Sony
related patent income.

Read more

 * Q1 net sales totaled EUR 2.7 million (3.6m our expectation)
 * Software fees were EUR 0.5 million (1.1m Evli), Professional services were
   EUR 0.1 million (0.3m Evli), and Recurring revenue was EUR 2.1 million (2.2m
   Evli)
 * Q4 operating loss was EUR -1.3 million (-0.9m our expectation)
 * EPS was -0.04 (vs. -0.03 our estimate)
 * Liquid assets were EUR 12.3m (vs. 12.6m Q1/18)

Business outlook for 2019 unchanged: SSH expects double digit percentage growth
from software business (software fees, professional services, and recurring
revenue) at comparable exchange rates

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FINNAIR - CAPACITY GROWTH AS EXPECTED

17.04.2019 - 09.15 | Preview

Finnair’s capacity growth in Q1 was in line with the guidance for 2019E (10.4%
vs. guidance 10%) and with our Q1 expectation of 11 %. Passenger growth on the
other hand was weaker than expected. We have implemented the IFRS 16 changes to
our estimates and kept Q1 expectations mainly intact. We keep our rating “HOLD”
and target price of EUR 8.0 ahead the Q1.

Read more

Soft start in Q1 traffic information

Finnair’s traffic continued soft in Q1. Overall capacity (ASK) grew by 10.4 %,
which is somewhat in line with our 11 % expectation. Sold capacity (RPK) growth
was only 4.2 % which stayed clearly below our estimation of 7 %. As a result of
that, passenger load factor (PLF) continued decline by 4.6 % percentage points
in Q1 to 78,3 %. Largest drop was in Asia (-6.2pp) but also in Europe (-3.2pp)
and domestic (-3.2pp).

Fuel prices rising from its lowest point

Jet fuel prices reached its lowest point during the turn of the year but has
increased since then. Average price moved on q/q basis by -7% in EUR and by -8%
in USD compared to the average prices of 4Q18. Also, on a y/y basis the prices
moved by -3% in USD when compared to the average price of 1Q18. However, the
average price in EUR was 5% higher.

IFRS 16 changes implemented to our estimates

The effects of IFRS 16 to Finnair’s financials are noteworthy. Lia-bilities in
2018 increased by 1,1b euros and assets by 992 million euros. 2018 EBIT improved
from EUR 169m (margin 6,0 %) to EUR 218m (margin 7.7%). We have kept Q1
estimates largely un-changed apart from the changes caused by IFRS16 and the
changes in the accounting principle of aircraft frame components. We expect
Finnair’s Q1 revenue to be EUR 679m (6 % growth) while foreseeing adj. EBIT of
-6m (margin -0.9 %). We keep our rating “HOLD” and TP (EUR 8.0).



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DETECTION TECHNOLOGY - EXPECTING TO FIRE ON BOTH CYLINDERS IN Q1

17.04.2019 - 08.20 | Preview

Detection Technology will report Q1 earnings next week on Friday April 26th. We
expect both business units to perform well in Q1, with SBU growth coming back on
track and MBU’s good momentum continuing. Our focus will be on the expected pick
up of the security market and market comments. Our rating and TP remain intact
ahead of Q1.

Read more

Security market expected to pick up again

DT said in their Q418 result that they saw signs of security market picking up
again and overall the beginning of the year is expected to be strong in all
markets. Consequently, DT expects double digit sales growth in the first half,
but second half is however more uncertain, with of one of MBU’s major customers
ramping down manufacturing of a certain device. We expect both BU’s to perform
well in Q1, with SBU growing 15% and MBU 17% yoy. We expect Q1 net sales to be
22.3 MEUR (19.3 MEUR Q118) and Q1 EBIT to be 4.1 MEUR (3.7 MEUR Q118). Consensus
is expecting Q1 net sales of 22.6 MEUR and EBIT of 4.0 MEUR.

Varex acquiring Direct Conversion AB for 75 MEUR

DT’s peer company, Varex Imaging, recently announced its intent to acquire 90%
of Direct Conversion AB for a price of 75 MEUR for the whole company. The
Swedish company had net sales of 16 MEUR in 2018, which means a 4.7x EV/Sales
deal multiple. This further proves the potential seen in direct conversion and
photon counting, an area which DT is also investing in with its asset purchase
deal of the French MultiX.

BUY rating and TP of 19 euros maintained ahead of Q1

For 2019E, we expect DT’s net sales to grow 7.5% to EUR 100.9m driven by SBU’s
return to growth of 11.5% on slightly weaker comparables. We expect 2019E MBU
net sales growth to be flat due to the ramp-down of key customer’s product in
H2. We estimate 2019E EBIT to be EUR 18.9m (19.1m 2018) and EBIT margin to
decrease to 18.8% from 19.7% level of 2018 due to higher R&D costs (30% higher
vs. 2018). Our rating “BUY” and TP EUR 19.0, remain unchanged ahead of Q1.

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SUOMINEN - RESULTS FINALLY ON THE HORIZON?

16.04.2019 - 09.10 | Preview

Suominen reports Q1 results next week, on Wed, Apr 24. Q4 proved another miss in
a long series, however there are tentative signs pointing to earnings having
bottomed out. The company has hiked prices since last autumn (although volumes
are likely to be lost as a result), and raw materials pricing pressure has
become a less acute problem with all the major inputs registering double-digit
price declines during the last six months.

Read more

Focus will be on the gross margin and volume dynamics

Gross margin continued to decline in Q4, hitting a low of 6.2%. We expect the Q1
gross margin at 7.0% (vs 7.4% a year ago). With the onset of nonwovens price
hikes and recent declines in raw materials prices the gross margin is bound to
increase, yet it is hard to say to what extent volumes might have been lost. We
are forecasting 5% y/y volume decline for Q1. We expect Q1 revenue at EUR 116m
(8% y/y increase) and adj. EBIT at EUR 2.0m, or 1.8% margin (vs EUR 1.5m and
1.5% a year ago). Our forecast could be topped on the gross margin level as
input prices have been weaker than expected. However, we leave our operative
estimates unchanged as the gross margin positives and volume negatives should
cancel each other out on the absolute gross profit level.

First quarter with the new CEO behind the wheel

Mr. Petri Helsky (previously CEO of Metsä Tissue) has held the seat as
Suominen’s President & CEO since Jan 7. Suominen guides flat revenue and
improving adj. EBIT for 2019. We expect 2019 revenue to increase by 3% (mostly
due to FX), and EBIT at EUR 12.5m (EUR 4.6m) as gross profit is set to improve.

Estimates remain largely intact, FX basically flat

We retain our HOLD rating and target price of EUR 2.40 per share ahead of the Q1
report. We stay cautious for now despite expected gross margin improvement as it
is unclear how much volume might be lost. Peer group multiples have gained
sharply in recent months, meaning there is solid upside potential should
Suominen manage to turn around earnings trajectory in 2019.



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EXEL COMPOSITES - INITIATING COVERAGE WITH BUY

12.04.2019 - 09.20 | Company report

Exel Composites has grown mainly through acquisitions in recent years. Organic
growth has been weak due to challenges in telecommunications and infrastructure
markets. Moreover, the company’s EBIT margin, at ca. 5% last year, has declined
to way below the desired level. A recent acquisition further cut profitability.
Volume visibility is limited, yet we take a constructive view based on Exel’s
repositioning towards the wind energy sector, where longterm fundamentals are
strong and carbon fiber reinforcements are gaining further market share.

Read more

The wind energy sector is now Exel’s top customer industry

The wind energy sector recently claimed the position as Exel’s most important
customer industry. Exel has selected wind turbine blade reinforcements as the
main application to drive order volumes. We estimate this market to grow at low
double-digit rates in the coming years, and thus expect Exel to be able to add
EUR 3-5m in sales p.a. within the segment. According to our analysis,
operational leverage should help Exel to achieve a 7% EBIT margin in 2021 (up
from adjusted 2018 operating margin of 5.2%) despite a 100bps gross margin
decline due to the increased share of lower margin wind energy sector
deliveries.

Execution is key, the company needs to win large accounts

In our view Exel is to gain from volume tailwinds within select customer
industries and thus set to grow especially within the Construction and
Infrastructure segment. While efficiency measures such as the cost reduction
program targeting EUR 3m in annual savings by 2020 are important for improving
the operating margin, we recognize higher volumes as the main value driver. To
move the needle, Exel should add such new customers that could generate annual
revenues in the EUR 5m ballpark.

Our rating is BUY, target price EUR 5 per share

We initiate coverage with BUY based on our multiple and DCF analysis. Our target
price implies a 2019E EV/EBITDA multiple of 8x vs. historic average of almost 9x
and the peer group currently trading at around 9-10x.



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CONSTI - TIME TO REGAIN PROFITABILITY

29.03.2019 - 00.00 | Company report

Consti has had project management related issues, which has dented earnings
during the past year, and has been taking measures to improve profitability. We
expect margin recovery, although risks to future earnings still remain. We
downgrade to HOLD (BUY) with a target price of EUR 6.0.

Read more

Leading renovation company seeking to regain profitability

Consti is a market leader in the less cyclical Finnish renovation market, where
the demand outlook remains good due to among other things an ageing building
stock. Consti’s performance has during the past years however been hampered by
internal project management and execution related issues, which has left a dent
in profitability. Consti has been implementing changes towards a more
customer-centric organization and to increase operational efficiency, expected
to also aid profitability through cost-savings.

Expecting margin recovery

We expect Consti’s focus to be on improving margins and as such estimate only
slight sales growth for the coming years, with our estimated 2018-2021E sales
CAGR at 2.2%. Sales growth has been affected by the implementation of stricter
tendering criteria, which we expect to continue to have an effect, but on the
other hand has a reductive effect on possible further unprofitable projects. A
larger share of the unprofitable projects have been completed but open risks
still remain. We expect profitability to be supported by a lesser impact of the
unprofitable projects along with an alleviation of the pressure from
subcontractors and suppliers following boom years in building construction
volumes. Our EBIT-margin estimate for 2019E is 2.2%.

HOLD (BUY) with a target price of EUR 6.0

Consti trades at a 22%/31% discount on 2019E EV/EBIT to our mainly Nordic
construction and building installations and services peer groups. With and
elevated risk profile due to internal project management issues and the on-going
arbitration proceedings in the Hotel St. George project we consider a discount
justifiable. We value Consti at 9.2x 2019E EV/EBIT for a target price of EUR 6.0
and downgrade to HOLD (BUY).



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CAPMAN - GAINING MOMENTUM

20.03.2019 - 09.00 | Company report

CapMan has been continuing to show signs of its business moving in the right
direction, having successfully launched several important funds and signed new
and additional mandates and recently seen AUM again passing the EUR 3bn mark.
2018 saw earnings fall due to negative returns on the non-core market portfolio
but the earnings outlook for 2019 onwards remains attractive with core business
area earnings picking up pace. We retain our BUY rating with an ex-div target
price of EUR 1.80 (1.75).

Read more

Additional earnings stability through increased fee income

CapMan is seeking to create a healthier earnings base, with the role of volatile
carried interest decreasing and the more stable fee income increasing. CapMan is
further seeking to expand its investor base, currently consisting mainly of
local tier 1 investors. 2018 in our view was a year of clear signs of the
business improving as intended, although profitability fell due to negative
returns on the non-core market portfolio. Several important funds have been
launched in the past few years along with the signing of new and additional
mandates, for instance the additional EUR 320m BVK mandate, that will have a
positive impact on growth and earnings in early 2019 and over time.

Dividends an important part of the investment case

CapMan has raised the absolute DPS now six years in a row and revised its
dividend policy, targeting to annually increase DPS. We expect CapMan to
distribute a dividend of EUR 0.13 per share in 2019E, corresponding to an
estimated dividend yield of 7.7%.

BUY with a target price of EUR 1.80 (1.75)

Our sum-of-the-parts approach implies a fair value of EUR 1.75 per share. On
earnings-based multiples, primarily P/E, valuation compared to the three by size
comparable peers appears fair. The dividend yield on our estimates however shows
a clear disparity, with CapMan’s dividend yield on our estimates approx. 20%
above the peers. We retain our BUY-rating with an ex-div (post equity repayment
of EUR 0.06) target price of EUR 1.80 (1.75).



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INNOFACTOR - SLIGHTLY BELOW ESTIMATES

05.03.2019 - 09.30 | Earnings Flash

Innofactor’s Q4 earnings were as expected negative and the results as a whole
were slightly below our estimates. Innofactor’s net sales in Q4 amounted to EUR
15.9m (Evli 16.4m) and EBITDA was -0.9m (Evli -0.7m). Innofactor expects its net
sales and EBITDA in 2019 to increase from 2018 levels (EUR 63.1m and EUR -1.0m
respectively). Innofactor reported an order backlog of EUR 32m, up some 40% y/y.

Read more

 * Innofactor’s net sales in Q4 were EUR 15.9m, slightly below our estimates of
   EUR 16.4m. Sales growth in Q4 was -7.3 % y/y.
 * The EBITDA in Q4 amounted to EUR -0.9m, falling slightly below our estimates
   (Evli EUR -0.7m), at an EBITDA-margin of -5.7 %. The weaker profitability was
   according to Innofactor due to weaker Dynasty product sales, weaker than
   anticipated revenue in Denmark and some project write-downs.
 * Guidance: Innofactor’s net sales and EBITDA in 2019 are expected to increase
   from 2018 levels, when the net sales and EBITDA amounted to EUR 63.1m and EUR
   -1.0m respectively.
 * Dividend proposal: Innofactor’s BoD proposes that no dividend be paid for
   2018 (Evli EUR 0.0).
 * Operating cash flow during 2018 was EUR -0.6m.
 * Active personnel at the end of the period 550 (2017: 601)
 * Order backlog at around EUR 32m, up around 40% y/y. Has not previously been
   reported.



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ASPO - LARGER EBIT GAIN TO MATERIALIZE IN ‘20

01.03.2019 - 13.15 | Company update

We met with Aspo’s management to discuss near term outlook for ESL and Telko.
Based on the discussions, we revise our estimates for 2019-20. While in our view
Aspo companies are on a steady track towards higher EBIT margins, we acknowledge
that our estimates have been too optimistic, especially for 2019. We update our
projections to reflect the fact that the earnings improvement trajectory for ESL
and Telko is likely to play out over a longer period than we previously
expected.

Read more

We now expect flat H1’19 EBIT for ESL Shipping

Whereas we previously expected close to EUR 7m quarterly EBIT for ESL starting
from the beginning of Q2’19, we now expect the second quarter to stay relatively
muted (EUR 4m EBIT). Compared to our initial expectations, we now see it will
take longer for ESL to reach the two new LNG vessels’ optimal performance level.
While the crane issue should be fixed by the end of Q1, it will be a few more
months before operational efficiency will achieve the desired standards. We
expect ESL to demonstrate more significant EBIT improvement during the second
half of 2019, and we estimate a quarterly EBIT above EUR 6m to be feasible after
2019.

Telko’s 2019 EBIT margin to improve by 30bps

Telko’s EBIT margin improved by 40bps in 2018, reaching 4.5%. Whereas we
previously expected further margin expansion to the tune of 100bps in 2019, we
now moderate our estimate to equal a 30bps increase. Procurement efficiency will
improve slower than we estimated earlier. Telko’s stated target for 2020 is an
EBIT margin of 6-7%. We now expect Telko to reach this target only during the
last quarter of 2020.

Our rating is BUY, target EUR 9.50 (9.75) per share

Aspo now trades at 13.6x our 2019e EBIT. We update our target price to EUR 9.50
(9.75) per share based on SOTP and DCF valuations. Our rating remains BUY.



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CIBUS NORDIC - PROPERTY INCOME TO GROW FURTHER

28.02.2019 - 09.15 | Company update

Cibus updated its dividend policy. Dividend payments will now increase on a
quarterly basis (at a 5% annual pace). While there have been no major changes in
the underlying portfolio fundamentals, the company has managed to increase its
cash flow by 10% since the March 2018 IPO due to acquisitions and refinancing
activities. The portfolio now holds 132 Finnish properties with a gross asset
value of EUR 816m; 2019 pipeline might add another EUR 50m.

Read more

NOI capacity unchanged at EUR 47.8m, income at EUR 31m

Profit from property management was 1.5% below our expectations. Administration
costs were higher during Q4, amounting to EUR 1.4m vs the budgeted EUR 0.9m
cost. The higher expenses were attributable to the CEO departure. Cibus has now
shifted to financial year that follows the calendar year. Dividends will be paid
out on a quarterly basis; the first 2019 payment has a June record date. From
now on, Cibus targets a 5% annual increase in dividends. In our view, Cibus has
ample capacity to increase its annual payments. The proposed 2019 distribution
of EUR 0.84 per share implies a total dividend of EUR 26.1m, or a 7.8% yield. We
have estimated that the current portfolio has an annual distribution capacity
amounting to close to EUR 30m. Cibus estimates its operating income capacity at
EUR 31m, up from the previous EUR 30.6m figure.

EPRA NAV amounted to EUR 11.1 (11.2) per share

The central portfolio metrics were basically flat. Occupancy rate improved
slightly to 96.0% (95.8%), with LTV at 58.4% (58.3%). Cibus has increased its
bank financing to EUR 354m (EUR 325m), while the margin has decreased by 20bps,
to 1.9%, and the weighted average tenor increased to 2.9 years (2.3).

Our target still stands at SEK 120, downgrade to HOLD

Our expectations for Cibus’ portfolio remain unchanged. We expect Cibus’ 2019
acquisition pipeline (approximately EUR 50m) to comprise mainly of grocery
properties let to Kesko. We are waiting to see the acquisitions materialize. We
retain our target price of SEK 120 per share and update our rating to HOLD
(BUY).



Open report


MARIMEKKO - DOWNGRADED TO “SELL”

28.02.2019 - 08.55 | Company update

Marimekko’s soft international sales in Q4 were largely attributed to timing
issues of wholesale deliveries . While growth appears to remain on the right
track also in 2019E, flat adj. EBIT in 2019E is not enough to carry the recent
clear increase in valuation multiples – “Sell” (”Buy”).

Read more

15% int. revenue drop largely attributed to timing issues

Marimekko’s international revenue declined by 15%, or by EUR 2.0m in Q4. This
was driven primarily by APAC (-26%, EUR -1.4m) but also by EMEA (-11%, EUR
-0.3m) and North America (-12%, EUR -0.3m). Management attributed to decline in
APAC largely to a timing issue, as certain wholesale deliveries were postponed
to Q1’19. The decline in EMEA and Norther America was also largely attributed to
timing of wholesale deliveries.

Finland still strong and a bit better than we expected in Q4

Revenue in Finland grew by +12%, split to +8% own retail (own retail LFL +6%)
and +22% wholesale. Wholesale was supported by non-recurring promotional
deliveries, but retail revenue continued good growth, even though comps are
tougher.

Adj. EBIT in 2019E weighted down by growth investments

Marimekko guides revenue to grow and adj. EBIT to remain flat in 2019E. Revenue
will be flat in Finland, as non-recurring promotional deliveries will not reach
the level of 2018. Revenue in APAC is expected to grow, supported by start of
online sales in China and new stores. Despite revenue growth adj. EBIT will
remain flat, as marketing and other growth spend is increased to spur growth in
2019E and beyond. CAPEX will also increase with store refurbishments, IT and HQ
premise improvements.

Downgraded to “Sell” (“Buy”), ex-div TP intact at EUR 22

We have slightly cut estimates for 2019E. On our estimates Marimekko now trades
at a clear premium to the peer group. While growth appears to remain on the
right track also in 2019E, flat adj. EBIT in 2019E is not enough to carry the
recent clear increase in valuation multiples, in our view. We downgrade to
“Sell” (“Buy”) and keep our ex-div TP at EUR 22.

Open report


CIBUS NORDIC - DIVIDEND PROPOSED AT EUR 0.84 (0.80)

27.02.2019 - 11.35 | Earnings Flash

Cibus disclosed a new dividend policy with quarterly increases. From now on, the
company targets a 5% annual increase in dividends.

Read more

 * Rental income for the Jul-Dec 2018 period amounted to EUR 25.0m, and NOI
   totaled EUR 23.4m. Occupancy rate was 96%.
 * The portfolio had a year-end gross asset value of EUR 816m.
 * Cibus expects to make acquisitions to the tune of EUR 50m during 2019.
 * The quarterly increasing dividend means that the first partial payment will
   be EUR 0.2062 per share, the second EUR 0.2087 per share, the third EUR
   0.2113 per share and the fourth EUR 0.2138 per share.
 * NOI capacity remains at EUR 47.8m.
 * Since the March 2018 IPO, acquisitions and refinancing have helped cash flow
   to improve by 10%. While the portfolio is currently exclusively invested in
   Finnish properties, Cibus restates its long-term plan to enter other Nordic
   markets.



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MARIMEKKO - WEAK INTERNATIONAL SALES

27.02.2019 - 09.00 | Earnings Flash

Marimekko’s Q4 revenue was EUR 29.7m vs. EUR 31.6m/31.1m Evli/cons expectations,
while adj. EBITDA landed at EUR 2.2m vs. EUR 2.3/2.6m Evli/cons views.
International sales surprisingly declined by as much as 15% in Q4, explained in
part by a timing issue of deliveries in APAC. However, international revenue
declined somewhat in others markets as well. Dividend is in line. Guidance is
mostly as expected, although the flat adj. EBIT guidance looks somewhat cautious
vs. our estimates: we have expected adj. EBIT of EUR 13.1m in 2019E vs. EUR
12.2m in 2018A. Consensus for 2019E has been EUR 12.4m.

Read more

 * Finland: revenue was EUR 18.3m vs. EUR 17.6m our expectation. Revenue grew by
   +12% y/y, split to +8% own retail (own retail LFL +6%) and +22% wholesale.
 * International: revenue was EUR 11.4m vs. EUR 14.0m our view. Int. revenue
   decreased by 15% y/y, driven primarily by APAC (-26%), but also EMEA (-11%)
   and North America (-12%). Sales in APAC were weakened by a timing issue
   related to deliveries.
 * Adj. EBITDA was EUR 2.2m vs. EUR 2.3m/2.6m Evli/cons.
 * 2018 dividend: EUR 1.85 per share, consisting of EUR 0.60 ordinary and 1.25
   extra. Dividend is in line.
 * 2019E guidance: revenue will increase, while adj. EBIT will be flat in 2019E.
   We have expected adj. EBIT of EUR 13.1m in 2019E vs. EUR 12.2m in 2018A.
   Consensus for 2019E has been EUR 12.4m.

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FINNAIR - DELIVERING ON ASIAN STRATEGY

27.02.2019 - 08.25 | Company report

Finnair’s Asian strategy has proven successful and the remaining seven A350s
deliveries in 2019-2022E support strategy execution and growth further.
Evolution of competition in short-to-mid-term remains a key risk, in our view.
We expect earnings to weaken slightly in 2019E and consider valuation as largely
fair. We retain “Hold” rating.

Read more

A350 fleet carries from Asia to Europe via shortest route

Finnair’s strategy is based on the geographic location of Helsinki hub, as the
shortest route from (North-East) Asia to Europe goes over Helsinki. Finnair is
able to serve most Asian routes in 24h rotations, which enables high utilization
rate of planes and reduces the need for additional crew. New A350s, 12/19 of
which were delivered by the end of 2018, are an essential part of the Asian
strategy and form the cornerstone of cost management as they have higher seat
capacity, lower maintenance cost and better fuel efficiency vs. the replaced
A340s. The remaining seven A350s will be delivered in 2019-2022E, enabling
further growth.

New A350s enable growth and balance capacity in 2019E

For 2019E Finnair guides 10% capacity growth (largely based on new A350s) and
revenue growth slightly behind capacity. New capacity will be mostly put to
Asian routes. This should enable further growth and improve weakened PLFs in
European traffic, as a good part of capacity adds in 2018 was short-haul. Key
risks for 2019E are demand and competition: demand could soften with economic
growth, while competition is expected to increase in traffic between Europe and
Asia and in intra-European traffic. Fuel is no longer at record levels, although
hedged price should continue to edge up. At present we see adj. EBIT, excl.
impact of IFRS 16, to weaken slightly in 2019E, assuming steady fuel.

Valuation appears fair - “Hold” reiterated

On our estimates Finnair’s current P/E multiples are 10.8x for 2019E and 9.7x
for 2020E, vs. the 3yr historical NTM average of 10.1x. On P/B Finnair trades
1.2-1.1x when the EUR 200m hybrid removed from equity, while generating ROCE of
8.8% in FY19E vs. our WACC of 8.9%. Overall, Finnair’s current valuation appears
largely fair to us. We hence retain “Hold” rating with an ex-div TP of EUR 8.0
(7.3). Our TP values Finnair close to par with Finnair’s 3yr historical NTM P/E
(10.1x) on our FY19E estimates.



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PIHLAJALINNA - MORE FAVORABLE OUTLOOK FOR 2019E

25.02.2019 - 09.10 | Company report

Pihlajalinna’s organic growth, profitability and outlook for 2019E improved
towards the end of 2018. The new contract pipeline improved somewhat, and
clarity on SOTE in the coming weeks might increase activity in the municipality
field, further boosting the pipeline. We think valuation looks attractive
considering the recovery in margins and somewhat more promising outlook.

Read more

Profitability recovered to reasonable levels

Pihlajalinna’s profitability weakened in 2018 with to weak H1, but recovered to
reasonable level in H2 as cost savings from co-determination negotiations kicked
in, negative EBITDA-contribution from new clinic openings contracted and as
organic growth turned back to positive territory in H2 with insurance revenue
drop levelling off. Improved performance of H2 supports the outlook for 2019E,
for which co. guides adj. EBIT to improve significantly. While competition has
increased in certain service areas and cities, Pihlajalinna’s altered expansion
plan and OP’s retreat from expansion plans should reduce risk of further
capacity increases burdening profitability in the mid-term.

Growth prospects somewhat brighter; clarity on SOTE needed

Pihlajalinna started production of residential services in Laihia in Sep 2018.
Provision of occupational healthcare services for Stora Enso started in Jan
2019. Additionally co. has been negotiating with Laitila, Ruovesi and
Kristiinankaupunki, although at present each remain undecided. Overall,
municipalities’ eagerness to strike new contracts remains impacted by the lack
of clarity on how the SOTE reform turns out. Improved clarity on SOTE in the
coming weeks might improve activity in the municipality field. Additionally,
Pihlajalinna’s geographical reach has expanded in 2017-2018, improving its
positioning to win new business.

“Buy” with TP of EUR 12 intact

On our estimates Pihlajalinna is now valued 8.4x EV/EBITDA in FY19E, which
translates into 10% discount to its own 3yr NTM historical average (9.3x) and to
16% discount to the peer group. We think valuation looks attractive considering
the recovery in margins and a more promising outlook since H2’18. We retain
“Buy” rating with TP of EUR 12. Our TP values the shares 9.0x EV/EBITDA on 2019E
estimates, close to 3yr historical avg (9.3x).



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GOFORE - DOWNGRADE TO HOLD

20.02.2019 - 09.30 | Company update

Gofore’s profitability in H2 fell below our estimates (EBITA EUR 3.0/4.1m
act./Evli) largely due to a lower billing rate. Growth is expected to continue
to be rapid in 2019, with net sales guidance of EUR 71-79m (2018: 50.6m). We
have lowered our profitability estimates, expecting EBITA-margins of around
13.5% in the near to mid-term. With fairer valuation on our revised estimates we
downgrade to HOLD (BUY) with an ex-div TP of EUR 8.5 (9.8).

Read more

Profitability impacted by a lower billing rate

Gofore’s profitability in H2 fell below our expectations, with EBITA at EUR 3.0m
(Evli EUR 4.1m), at an EBITA-margin of 11.5%. The weaker profitability was
largely due to a lower billing rate, with wage inflation, the integration of
Solinor, and the sales mix also having an impact. Gofore’s guidance for net
sales in 2019 is EUR 71-79m, revised from the previous EUR 65-73m mainly due to
the acquisition of Silver Planet, with no profitability guidance given.

Margin development uncertainty remains

We have raised our sales estimates to account for the Silver Planet acquisition,
while lowering our profitability estimates. Although some elements of the weaker
profitability in H2 in our view could be seen as temporary, we take a more
conservative stance to margin development and expect EBITA-margins slightly
below the 15% long-term financial objective. We expect the Silver Planet
acquisition to have a minor positive impact on margins. Our revised estimates
for 2019 net sales and EBITA are 73.3m (prev. 67.5m) and 9.8m (prev. 10.4m)
respectively. Our estimates assume EBITA-margins of around 13.5% in the near to
mid-term (prev. ~15.5%).

HOLD (BUY) with an ex-div target price of EUR 8.5 (9.8)

On our revised estimates Gofore trades at a slight premium on 2019E EV/EBITDA.
We continue to see a premium to peers as justifiable due to the expected rapid
growth but with our lowered estimates valuation appears fairer. We downgrade to
HOLD with an ex-div target price of EUR 8.5 (9.8).



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GOFORE - PROFITABILITY BELOW EXPECTATIONS

19.02.2019 - 09.30 | Earnings Flash

Gofore’s EBIT in H2 amounted to EUR 2.6m, falling below our estimate of EUR 3.8m
due to among other things a lower billing rate and increase in subcontracting.
Gofore expects net sales in 2019 between EUR 71-79m. The dividend proposal is at
EUR 0.19 per share (Evli 0.18).

Read more

 * Gofore H2 net sales amounted to EUR 25.9m, with sales growth in H2 at 32.2%
   compared to H2/17 figures. The company’s international business net sales
   amounted to EUR 5.7m, corresponding to 11.3% of total net sales.
 * EBIT in H2 was EUR 2.6m, falling below our estimates (Evli EUR 3.8m), at an
   EBIT-margin of 9.9%. Profitability was affected by a somewhat lower billing
   rate during the autumn and integration of acquired companies along with an
   increase in subcontracting and volume of low-margin cloud capacity.
 * Guidance: Gofore expects net sales in 2019 between EUR 71-79m. The guidance
   before the acquisition of Silver Planet was EUR 65-73m.
 * Dividend: Gofore’s BoD proposes a dividend of EUR 0.19 per share (Evli 0.18).
 * The number of personnel at the end of the period was 495 (2017: 374).



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VERKKOKAUPPA.COM - UPGRADED TO “BUY”

19.02.2019 - 09.00 | Company update

While Verkkokauppa.com’s revenue growth is unlikely to come for free in 2019E
either, we think normalizing OPEX growth and increasing margin support from
Apuraha should support an earnings improvement after two years of flattish
development, even if price pressure tightens further. We upgrade to “Buy”
(“Hold”) , TP of EUR 4.7 (4.2).

Read more

Q4: strong growth via market share take, but not for free

Verkkokauppa.com’s Q4 revenue growth (+22%) remained solid from Q3 (+11%). Some
part of the 22% growth was due to increased wholesale/B2B deliveries as we
expected, but most of the growth was attributed to clearly increased market
shares in the B2C market. Strong growth in a flattish market (+0.7% in Q4
according to GfK) did not come for free, however: the gross margin declined to
14.7% from 15.8% y/y, while OPEX grew by 22%, due to increased marketing and the
Raisio store.

Guidance for 2019E EBIT is wide, reflecting uncertainties

Verkkokauppa.com guides 5-15% revenue growth and 11-17m EBIT for 2019E. EBIT was
EUR 13.3m in 2018A. Vague guidance appears to reflect uncertainties related to
potentially softening demand and competition. While visibility into how
competition evolves remains short, we expect OPEX growth to normalize in 2019E
as Raisio’s ramp-up costs will be reflected in comps.

Apuraha financing should grow further, supporting margins

Apuraha financing grew in 2018: company-financed Apuraha income was reported at
EUR 3.1m in 2018 vs. EUR 1.5m in 2017. We understand the company will continue
to increase Apuraha financing, which would support margins.

Upgraded to “Buy” (“Hold”), ex-div TP of EUR 4.7 (4.2)

We have converted our model to IFRS (16) reporting from 2017 onwards.
Additionally, we no longer assume a 5th store opening in our 2020E estimates. On
our estimates the shares trade 11.4x and 9.0x EV/EBIT in 2019-2020E. While
growth will most likely not come for free in 2019E either, normalizing OPEX
growth and increasing margin support from Apuraha should support an earnings
improvement after two years of flattish development, even if price pressure
tightens further. We upgrade to “Buy”.



Open report


FINNAIR - VISIBILITY REMAINS SHORT

18.02.2019 - 09.15 | Company update

Finnair’s Q4 was surprisingly strong, but guidance for 2019E indicates the
operating environment will remain at least as tough as in H2. Valuation appears
largely fair to us – we hence retain “Hold” rating.

Read more

Q4: fuel and yield behind the earnings beat

Finnair’s Q4 adj. EBIT came in well above estimates at EUR +9m vs. EUR -9m Evli
and EUR -6m cons. Compared to our estimates the beat was driven by somewhat
stronger revenue (EUR 683m vs. EUR 671m) and fuel costs, which were EUR 10m less
than what we expected. On the revenue side the beat was driven by unit revenues
–RASK declined less than we expected, and yield surprisingly grew by 3.5% while
we expected yield decline to continue as increased competition had been flagged
during H2.

Increasing competition and potentially softer demand

For 2019E Finnair guides ASK growth of 10% and revenue growth slightly behind
ASK. We expected only 5% ASK growth for 2019E. Finnair will receive both of its
2019-delivered new A350s during H1, on top of which the Dec 2018 -delivered A350
will contribute to ASK growth. Added capacity will be mostly put to Asian
routes. However, at the same time competition is expected to increase further
with capacity increases, especially on routes between Europe and Asia and in
intra-European traffic, even though Norwegian’s planned capacity cuts may impact
Finnair positively on some routes. At the same time, demand is seen to be at
risk of softening with slowdown in economic growth. Increasing competition and
potentially softer demand keep visibility short even though fuel appears to have
stabilized.

Retaining “Hold”

On our estimates Finnair trades at an EV/EBITDA discount, but at a P/E premium
to its primary peers. On P/B Finnair trades 0.9x in FY19E, or 1.1x when the EUR
200m hybrid removed from equity, while generating ROCE of ~8.5% in FY19E, close
to our WACC (8.9%). We continue to think valuation does not look too attractive
and hence we retain “Hold” rating with TP of EUR 7.3 (6.8). Our TP values the
shares at par with Finnair’s 3yr historical P/E on our FY19E estimates.



Open report


SCANFIL - Q4 SOFTNESS UNLIKELY TO PERSIST

18.02.2019 - 09.05 | Company update

Scanfil’s Q4 EBIT didn’t meet our expectations. However, the weakened operating
margin was attributable to Scanfil’s account idiosyncrasies. Certain contracts
with above average profitability lacked volumes in Q4. Overall, the company sees
business continuing as before, and we expect organic revenue growth to add
around EUR 20m in 2019. 2020 sales target stands at EUR 600m. We update our
target price to EUR 4.75 (4.60); our rating stays BUY.

Read more

Individual contracts determine quarterly segment results

Although Other Industries segment grew 18% in 2018, the segment’s Q4 results
were weak due to a significant decrease in demand from a certain notable
customer. Urban Applications Q4 top line declined by 12% y/y due to one or two
accounts’ seasonal variation. In other words, the Q4 EBIT margin weakness was
entirely attributable to a couple of accounts that are above average in terms of
profitability. Broadly speaking, demand continued to develop positively and the
company’s guidance for 2019 is in line with our earlier expectations. While
individual accounts may have large impact on specific segment results, we expect
MedTech, Life Science and Environmental Measurement to be the most stable
performer. Conversely, within a segment such as Networks and Communication, it
is hard to say when larger order volumes may materialize (i.e. when a standard
such as 5G starts to have an impact).

Scanfil expects Q1 to be slower, demand to pick up in Q2

Scanfil says the year will have a sluggish start; the company expects clear
demand pick up during the second quarter. The company is adding new customers
particularly in Sweden. In addition to organic growth, initiatives such as a EUR
50m acquisition in e.g. Germany are not off the table.

Our rating is BUY, update target to EUR 4.75 (4.60)

Our long-term expectations for Scanfil are intact. Increased peer multiples
provide lift for valuation, and thus we update our target price to EUR 4.75
(4.60) per share.



Open report


PIHLAJALINNA - LIMITED SURPRISES

18.02.2019 - 08.35 | Company update

Pihlajalinna’s Q4 financials were close to estimates and guidance did not
surprise. While new outsourcing contracts from previous or ongoing negotiations
remains uncertain, the expanded geographical reach should improve prerequisites
for growth in other areas as well. We think valuation continues to look
attractive. We retain “Buy” rating with TP of EUR 12.

Read more

Profitability at reasonable level in Q4

Pihlajalinna’s adj. EBITDA margin improved y/y in Q4, after improving to flat
y/y level in Q3 from weaker H1. However, of the EUR 2.6m y/y adj. EBITDA
improvement EUR 2.4m was explained by improved profitability in public
specialized care, which seemed to be largely due to service provider refunds
from hospital districts related to cost accruals. Amount of these refunds has
fluctuated a lot historically. Profitability thus looked better than it was in
underlying terms, but it was still at a reasonable level in our view.

Not much new to tell of the new contract pipeline

Pihlajalinna has been in negotiations over new potential contracts with Laitila,
Ruovesi and Kristiinankaupunki. While decisions from some of these were expected
by the end of 2018, each remains undecided. Overall, municipalities’ eagerness
to strike new contracts remains impacted by the uncertainty related to the SOTE
reform. Activity could increase if SOTE fails in the coming weeks, but overall
visibility for how municipal activity develops is not great, in our view. Yet
with the expanded clinic network the company should be better positioned to win
new business for example in occupational healthcare, in our view.

Retaining “Buy” with TP of EUR 12

On our estimates Pihlajalinna trades 7.7x and 6.8x EV/EBITDA in FY19-20E,
respectively. We think valuation continues to look attractive. We retain “Buy”
rating with TP of EUR 12.



Open report


NEXT GAMES - SHROUD OF UNCERTAINTY YET TO LIFT

18.02.2019 - 00.00 | Company update

Next Games’ had pre-announced Q4 revenue and EBIT of EUR 11.3m and EUR -1.6m and
the most significant news was the discontinuation of a games project that had
proceeded to production. We have lowered our 2019 and 2020 revenue estimates by
15 % and 21 % respectively. We retain our HOLD rating with a target price of EUR
1.5 (2.0)

Read more

One project discontinued, another started

Next Games revenue and EBIT in Q4 amounted to EUR 11.3m and EUR -1.6m. Profits
improved significantly from the Q3 operating loss of EUR 10.3m, that was
burdened by TWD: Our World marketing cost, but remained negative due to product
development costs. Next Games announced that the game project with Universal
Games and Digital Platforms has been discontinued. The project had proceeded to
production and was after Blade Runner: Nexus the game furthest in the pipeline.
Next Games started a new game project, that currently does not have an external
IP attached to it, focusing on a new game concept.

2019/2020 revenue estimates lowered by 15%/21%

We have lowered our 2019 and 2020 revenue estimates by 15 % and 21 %
respectively due to the discontinued game project and lowered Our World
estimates. Although ARPDAU metrics in particular improved favourably during Q4
(both NML and OW), we have yet to see signs of significant growth in OW active
users, which would be much needed for sales and profitability improvement. The
new games pipeline still remains decent, with two projects tied to a third-party
IP along with the new game concept project in concepting and Blade Runner: Nexus
in soft launch. We expect profitability in 2019 to improve due to the savings
program but to remain negative, with our estimate at EUR -5.3m.

HOLD with a target price of EUR 1.5 (2.0)

The near-term uncertainty in our view remains high due to the estimated negative
profitability in 2019 and Next Games’ decreased cash position. We retain our
HOLD rating with a target price of EUR 1.5 (2.0).



Open report


TAALERI - OPPORTUNITIES BUT ALSO CONCERNS AHEAD

15.02.2019 - 09.45 | Company update

Taaleri’s H2 results were affected by the impact of market volatility on
Financing and Wealth Management. Fundraising has begun for the second SolarWind
fund, with target investment capital at EUR 300m. New product launches are
expected also in PE funds and Financing. Market turbulence remains a concern for
the performance of Wealth Management.

Read more

Market volatility impacted on segment results

Taaleri’s group income in H2/2018 amounted to EUR 37.3m (Evli 37.9m) and EBIT to
EUR 11.5m (Evli EUR 10.7m). Wealth Management’s profitability declined to EUR
2.7m (H2/17: EUR 8.8m) mainly due to lower performance fees and investment
income but lower costs mitigated part of the impact. Profitability in Financing
also fell due to lower investment income while the insurance operations
continued to report solid results. The group results were aided by the impact of
the listing of Fellow Finance.

Fundraising for second SolarWind fund started

Taaleri has started fundraising for its second SolarWind fund, seeking to raise
investment capital of EUR 300m. Taaleri will most likely seek to sell the
Truscott-Gilliland wind project to the fund during 2019, which would
significantly boost Energy’s profitability. New product launches are also to be
expected in Wealth Managements PE funds and Financing. The market turbulence has
increased concerns relating to the performance of Wealth Management and AUM
development was somewhat dissatisfactory, partly due to the write down of the
geothermal fund. We have revised our estimates and now expect group income and
revenue of EUR 74.8m and 23.4m respectively. We have not yet included estimates
for the likely sale of the Truscott-Gilliland wind project but include it
through our SOTP.

BUY with a TP of EUR 8.5 (11.4)

On our estimates and revised valuation metrics, with the multiples for Wealth
Management lowered due to the increased uncertainty, our SOTP-value is EUR 8.9
per share while peer EV/EBIT valuation suggests an implied price of EUR 8.0. We
retain our BUY rating with a target price of EUR 8.5 (11.4).



Open report


FINNAIR - STRONG EARNINGS

15.02.2019 - 09.45 | Earnings Flash

Finnair’ Q4 adj. EBIT was clearly better than we expected at EUR +9m vs. our
expectation of EUR -9m. Consensus was at -6m. Compared to our estimates the beat
looks to be driven by EUR 10m lower fuel costs, and by better revenue. For 2019E
Finnair guides 10% capacity growth and revenue growth somewhat behind capacity.
We have expected 5% growth for both and hence there is upside to our estimates.
Finnair also expects competition to tighten, especially in EU-Asia routes and in
short-haul traffic. Dividend is close to estimates. Overall, a good report.

Read more

 * Q4 revenue was EUR 683m vs. EUR 671/674m Evli/cons.
 * Q4 adj. EBIT was EUR +9m vs. EUR -9m/-6m Evli/cons views. Compared to our
   estimates the beat looks to come from lower fuel costs and better revenue in
   Q4.
 * Absolute costs: actual fuel cost (incl. hedging) was EUR 145m vs. EUR 155m
   our view. Staff costs were EUR 102m vs. 102m our view. All other OPEX
   combined were EUR 364m vs. 364m our view.
 * Unit costs: CASK was 6.43 eurocents vs. 6.49 our view, while CASK ex fuel was
   5.05 eurocents vs. 5.01 our view. CASK in fixed FX and excl. fuel declined by
   4% y/y.
 * Dividend is EUR 0.274 per share vs. 0.30/0.26 Evli/cons.
 * 2019E guidance: Finnair expects capacity growth of about 10% and revenue
   growth somewhat behind capacity. Adj. EBIT guidance will be provided with Q2
   earnings, as usual.





Open report


RAUTE - FLAT GUIDANCE ABOVE OUR EXPECTATIONS

15.02.2019 - 09.30 | Company update

While we are cautious with our estimates for the next few years, expecting
declining sales and EBIT, the company guides flat sales and EBIT for 2019.
Meanwhile Raute’s balance sheet is strong enough for the distribution of EUR
1.40 per share as 2018 dividends. The 5.5% dividend yield, along with other
valuation metrics, reflects the company’s current cyclical positioning where
further growth is not expected. Excluding a development such as a major entry
into the Chinese market, we continue to estimate declining sales for the time
being. Our cautious stance is supported by the fact that Raute’s order book
seems to have peaked in early 2018.

Read more

Demand still buoyant, yet uncertainty is rising

Raute disclosed already in January that 2018 sales and EBIT would be higher than
previously expected. Consequently, yesterday’s results presentation provided
little new concrete information. Many of Raute’s pre-existing customers have
already invested heavily during the past few years. While the major markets have
been developing positively and Raute’s customers’ mills have been running at
high utilization rates, we are waiting to see how the company’s order book will
develop during the first months of 2019.

We maintain our HOLD rating and EUR 27 target price

Raute’s flat guidance for 2019 gives us pause to consider if our own estimates
are too pessimistic. Yet we are not updating our projections this time. We will
revise our estimates if Raute’s order intake for the beginning of 2019 comes in
higher than we are currently expecting.



Open report


VERKKOKAUPPA.COM - WIDE GUIDANCE RANGE FOR EBIT

15.02.2019 - 09.10 | Earnings Flash

Verkkokauppa.com Q4 headline financials were known before this morning’s
earnings release. Hence the information content of the Q4 report is mostly in
the dividend and guidance. Dividend proposal is EUR 0.198 per share, marginally
above estimates. Guidance implies 5-15% revenue growth for 2019E. EBIT in 2019E
is to be between EUR 11-17m (2018A with IFRS: EUR 13.3m) – this is a wide range
and leaves room for weakening. It is not specified whether guidance includes
estimated impact of IFRS 16, but considering the upper range it looks to be
included. Guidance should not surprise estimates, in our view.

Read more

 * Dividend was EUR 0.198 vs. EUR 0.19 Evli and cons.
 * Guidance for 2019E: revenue is expected to be between EUR 500-550m and EBIT
   between EUR 11-17m (2018A with IFRS: EUR 13.3m). Revenue range implies growth
   of 5-15% for 2019E.
 * Wholesale deliveries increased y/y, and were partly behind the strong sales
   growth in Q4 as we expected. However most of growth is attributed to
   successful Black Friday campaign and Christmas season. The gross margin
   remained at fairly good level of 14.7% vs. 15.8% last year.
 * Headline financials were known prior to the Q4 report, as figures were
   pre-announced.
 * Apuraha’s earnings impact specified: company-financed customer financing grew
   in Q4 and proceeds totaled EUR 0.9m (EUR 0.5m y/y) including both interest
   income and fee income.
 * Financial targets were updated: annual revenue growth 10-20% (intact),
   growing EBIT and EBIT margin between 2.5-4.5%, and growing dividend.
   Previously co. targeted for adj. EBITDA margin between 3-5%.





Open report


ASPO - TEETHING PROBLEMS WITH CRANES

15.02.2019 - 09.05 | Company update

Aspo’s Q4 EBIT didn’t meet our expectations as ESL Shipping suffered from
serious technical problems with cranes. Both MS Viikki and MS Haaga, the two new
LNG vessels, were impacted, leading to inefficient operation. The warranty
repairs should be completed by the end of Q1’19. Telko’s Q4 results were in line
with our estimates, while Leipurin fell short. We update our rating to BUY
(HOLD).

Read more

ESL is on path to EUR 25-30m EBIT in the coming years

The deployment of ESL Shipping’s new LNG vessels has been slowed down by both
ships’ mechanical problems with cranes. The problem concerns all the six cranes.
In the meantime, other ESL ships have been filling in the slack for the SSAB
contract. The crane supplier, Cargotec MacGregor, is expected to fix the problem
by the end of Q1. In other words, the first quarter of 2019 will be similarly
sluggish for both vessels. While this is an inconvenient setback, the company
expects the vessels to meet the high requirements starting from the second
quarter. ESL Shipping has a target of net sales above EUR 200m and an EBIT
margin of 12-15% by 2020. We expect ESL to reach an EBIT of EUR 23m in 2019 and
EUR 28m next year. We previously expected comparable figures of EUR 25m and EUR
29m.

Telko should accelerate margin gains during 2019

Aspo has set Telko a 2020 sales target of EUR 300-350m, while the EBIT margin
should be in the 6-7% range. One of the key measures for reaching this
profitability level is the improvement of procurement efficiency. The company
expects to see results regarding the planning and rationalization of raw
material purchases by the end of 2019. Telko was able to reach an EBIT margin of
4.5% in 2018, improving by about 40bps.

Aspo long-term outlook intact, higher multiples boost SOTP

Our expectations for ESL and Telko are unchanged. Valuation multiples have
lifted since late December, when Aspo revised its outlook for the final quarter.
As a result, we see the sum-of-the-parts valuation providing added support for
the shares. We raise our target price to EUR 9.75 (9.25) and upgrade to BUY
rating.



Open report


NEXT GAMES - GAME PROJECT DISCONTINUED

15.02.2019 - 08.45 | Earnings Flash

Next Games Q4 revenue and EBIT amounted to EUR 11.3m and EUR -1.6m respectively
(pre-announced). Next Games announced the termination of collaboration on the
game project with Universal Games and Digital Platforms. The company concluded
consultation proceedings.

Read more

 * Next Games’ revenue during H2 amounted to EUR 24.8m (pre-announced). Revenue
   growth y/y on was 90 %. Revenue in Q4 amounted to EUR 11.3m
 * EBIT in H2 amounted to EUR -12.0m. Next Games pre-announced H2 figures (FAS).
   Next Games has adopted IFRS reporting in its 2018 financial statements
   bulletin. EBIT in Q4 amounted to EUR -1.6m.
 * TWD: No man’s land: DAU during Q4 was 253k (Q3/18: 275k). MAU during Q4 was
   728k (Q3/18: 800k). ARPDAU was EUR 0.25 during Q4 (Q3/18: 0.24).
 * TWD: Our world: DAU during Q4 was 223k (Q3/18: 386k). MAU during Q4 was 759k
   (Q3/18: 2.1m). ARPDAU was EUR 0.28 during Q4 (Q3/18: 0.25).
 * Next Games and Universal Games and Digital Platforms have agreed to
   terminating their collaboration on the game project that had proceeded to
   production.
 * The company concluded consultation proceedings and the company’s headcount
   will decline to 117 from 143.
 * The company initiated a new project that does not have an external IP
   attached to it at the moment.



Open report


SCANFIL - EBIT BELOW OUR EXPECTATIONS

15.02.2019 - 08.45 | Earnings Flash

Scanfil’s Q4 results didn’t reach our estimates. We expected an EBIT margin of
6.0%, while the company delivered 5.4%. Nevertheless, the full year saw robust
growth and operating profit development. The BoD proposes a dividend of EUR 0.13
per share for 2018 (vs our expectation of EUR 0.14).

Read more

 * Q4 sales increased by 6.3% compared to Q3, supported by almost all customer
   segments. Energy and Automation, Medtec and Life Science and Other Industries
   segments achieved over 10% growth.
 * The quarterly decrease in operating margin was mainly due to significantly
   decreased demand from a few notable customers, and partly due to seasonal
   variation.
 * The demand decline was restricted to a few customers. Overall, demand has
   remained steady. Customers’ forecasts are looking strong.
 * Guidance: Scanfil estimates 2019 revenue will be EUR 560-610m, expects
   operating profit will amount to EUR 36-41m. These figures are in line with
   our estimates.
 * Scanfil’s target is to reach EUR 600m sales in 2020 and an EBIT margin of 7%.



Open report


PIHLAJALINNA - LITTLE SURPRISES

15.02.2019 - 08.35 | Earnings Flash

Pihlajalinna’s Q4 revenue and adj. EBITDA were close to both our and consensus
estimates. Profitability improved y/y, but looks to be largely explained by
service provider refunds, which have involved a lot of fluctuation historically.
Organic growth remained positive (+1.3%) from Q3. Dividend proposal is EUR 0.10
per share, marginally better than expected. Guidance for 2019E looks to be
largely reflected in consensus: revenue is to improve while adj. EBIT is to
improve clearly. Overall, the Q4 report looks just fine.

Read more

 * Revenue was EUR 127m vs. EUR 127m/125m Evli/cons estimates. Revenue grew by
   17.6% y/y, of which 16.3% was due to M&A. This implies organic growth of
   +1.3%. Organic growth was similar to Q3 (+1.1%).
 * Adj. EBITDA was EUR 11.1m (8.7% margin) vs. EUR 10.9m/11.2m (8.6%/8.9%)
   Evli/cons estimates. Adj. EBITDA improved by EUR 2.6m y/y, of which EUR 2.4m
   looks to be explained by service provider refunds from hospital districts for
   public sector specialized care cost accruals. Volumes and profitability of
   clinic and surgical operations were lower y/y, due to the competitive
   situation and patient guidance by insurance companies. New clinics still had
   a negative EBITDA contribution (as expected), but this now lower than in
   previous quarters at EUR -0.4m in Q4.
 * Dividend is EUR 0.10 per share vs. EUR 0.08 Evli and EUR 0.09 consensus.
 * Guidance for 2019E looks to be largely reflected in consensus: Revenue will
   increase and adj. EBIT will improve clearly.





Open report


FELLOW FINANCE - UPGRADE TO BUY

15.02.2019 - 07.20 | Company update

Fellow Finance’s H2 revenue and EBIT amounted to EUR 6.4m (Evli 6.7m) and EUR
1.7m (Evli 1.7m) respectively. Fellow Finance expects revenue in 2019 to grow
over 30% and the adjusted operating profit to grow compared to 2018. Consumer
loans in Finland still accounted for the majority loan volume but international
operations and business financing saw growth picking up. We upgrade to BUY
(HOLD) with a TP of EUR 9.0 (8.0).

Read more

Revenue grew 38.2% and adj. EBIT 41.7% in 2018

Fellow Finance’s H2 revenue and EBIT amounted to EUR 6.4m (Evli 6.7m) and EUR
1.7m (Evli 1.7m) respectively. Full year revenue growth amounted to 38.2% and
fee income growth to 50.1%. Fellow Finance estimates revenue in 2019 to grow
over 30% and the adjusted operating profit (2018: EUR 3.5m) to grow compared to
2018. Focus in 2019 will be on continuing the expansion in Europe and broadening
the product offering to investors. Fellow Finance expanded its services to
Denmark during early 2019. In absolute terms growth in 2018 still derived mainly
from Finland but growth was also solid in particular in Germany, were the
company’s services only kicked off properly in the latter half of 2018. Growth
in business financing has also been good, with the relative share of loan volume
at 27%.

Expect continued solid growth and margins

We have made only slight adjustments to our near-term estimates. We expect sales
of EUR 16.5m in 2019, with growth of 38%, and adjusted EBIT of EUR 4.5m. We
expect relative profitability to be slightly below 2018 levels driven by rapid
expansion of services to new markets and ramp-up of existing ones but above the
long-term strategic goal of 25%.

BUY (HOLD) with a TP of EUR 9.0 (8.0)

On 2019E figures valuation appears challenging but with signs of pick-up in
international operations and a good outlook for business financing we are
prepared to emphasize 2020E peer multiples. We value Fellow Finance at 16.4x
2020E P/E, closer to the payment processing and financing platform peers, for a
target price of EUR 9.0 (8.0) and upgrade to BUY (HOLD).



Open report


ENDOMINES - MINOR BUMPS ON THE RAMP-UP ROAD

15.02.2019 - 07.00 | Company update

Endomines commenced mining operations at the Friday-mine. Equipment delivery
delays have put production ramp-up slightly behind schedule. Production of gold
concentrate at the Friday-mine in 2019 is estimated at 5,000-8,000oz. The
leasing rights to the Unity mine were acquired, which we expect to be the next
area of focus in Idaho along with the adjacent Rescue property. Endomines
commenced the sale of a EUR 5m bond, which we expect to cover near-term needs
but anticipate a need for additional financing.

Read more

Friday gold production 5,000-8,000oz in 2019

Endomines’ gold production in Q4 amounted to 27.9kg (98.7kg), impacted by the
suspension of mining operations at Pampalo. Revenue and EBITDA in Q4 amounted to
SEK 7.9m (Evli 5.4m) and SEK -6.1m (Evli -6.4m) respectively. Mining operations
at the Friday-mine have commenced but production has seen slightly behind
schedule due to delays in equipment deliveries at the processing plant. The
project’s capex estimate was revised to USD 9.5-10m (prev. 7.7m) due to cost
overruns. Production of gold concentrate in 2019 is estimated at 5,000-8,000oz.

Acquired additional assets, seeking to secure financing

Endomines acquired leasing rights to the Unity mine adjacent to its Rescue
property. We expect the company’s development operations during 2019 to focus on
Unity/Rescue along with Friday. We have shifted our production estimates as we
view any significant production figures (apart from Friday) to be achieved
during 2020 unlikely. Endomines commenced the sale of an up to EUR 5m bond with
associated warrants (strike price EUR 0.90). Although the financing covers at
least the near-term investment needs we expect Endomines to need additional
financing to develop additional assets.

BUY with a target price of SEK 8.0 (7.2)

The gold price saw favourable development during H2/2018, returning to above
1,300USD/oz levels, driven by the increased market uncertainty. Our revised
estimates put our NAVPS at SEK 8.5. We retain our BUY-rating with a target price
or SEK 8.0 (7.2).



Open report


FELLOW FINANCE - EBIT ABOVE EXPECTATIONS

14.02.2019 - 11.25 | Earnings Flash

Fellow Finance’s H2/2018 revenue and EBIT amounted to EUR 6.4m (Evli EUR 6.7m)
and EUR 2.3m (Evli EUR 1.7m) respectively. Fellow Finance expects revenue in
2019 to grow by over 30 % and the adjusted EBIT to grow compared to 2018. The
dividend proposal is EUR 0.04 per share (Evli EUR 0.10).

Read more

 * Revenue in H2 amounted to EUR 6.4m (EUR 4.7m in H2/17), slightly below our
   estimates (Evli EUR 6.7m).
 * Fellow Finance facilitated loans during 2018 for a total of EUR 172m (Evli
   164m).
 * EBIT in H2 amounted to EUR 2.3m (EUR 1.5m in H2/17), above our estimates
   (Evli EUR 1.7m). The adjusted EBIT amounted to EUR 2.5m excluding expenses
   related to the company’s IPO.
 * EPS in H2 amounted to EUR 0.0 per share. The for listing expenses adjusted
   EPS amounted to EUR 0.14.
 * Dividend: Fellow Finance’s BoD proposes a dividend of EUR 0.04 per share
   (Evli EUR 0.10)
 * Guidance: Fellow Finance expects revenue in 2019 to grow by over 30 % and the
   adjusted EBIT to grow compared to 2018.
 * Fellow Finance expanded its service offering to Denmark during early 2019,
   now having a presence in five countries.



Open report


ASPO - ESL OPERATING PROFIT DISAPPOINTS

14.02.2019 - 10.50 | Earnings Flash

Back in December, Aspo restated its 2018 EBIT guidance. The company announced
that the figure will land at the lower end of the initial range. ESL and Telko
both topped our Q4 revenue estimates, while ESL’s operating profit failed to
match our expectations (even after we adjusted our estimate following the
December profit warning).

Read more

 * Group headline figures: Q4 net sales amounted to EUR 156.6m vs our EUR 154.0m
   estimate. Q4 EBIT stood at EUR 2.6m vs our EUR 3.9m expectation.
 * ESL Shipping: Q4 sales recorded at EUR 46.4m vs our EUR 42.2m estimate. Q4
   EBIT came in at EUR 4.2m vs our EUR 5.3m estimate.
 * Telko: Q4 revenue amounted to EUR 69.5m vs our EUR 68.8m estimate. EBIT stood
   at EUR 3.4m, exactly as we expected.
 * Leipurin: Q4 sales totaled EUR 31.6m vs our EUR 33.0m estimate. EBIT was EUR
   0.8m vs our EUR 1.1m estimate.
 * Kauko: sales were EUR 9.1m vs our EUR 10.1m estimate. EBIT (including the
   impairment loss) was EUR -4.4m vs our EUR -4.8m expectation.
 * Guidance: Aspo guides 2019 EBIT at EUR 28-33m. This compares to the EUR 25.4m
   2018 figure adjusted for the EUR 4.8m impairment loss on Kauko’s goodwill.
   ESL Shipping aims at net sales of more than EUR 200m and an EBIT margin of
   12-15% by 2020.
 * The BoD proposes 2018 dividend per share at EUR 0.44, to be paid in two
   installments.



Open report


RAUTE - OPTIMISTIC GUIDANCE AND DIVIDEND

14.02.2019 - 09.40 | Earnings Flash

Raute already disclosed in January that 2018 sales and EBIT would be higher than
previously expected. Raute confirmed the previously announced strong numbers.
The proposed dividend came in slightly above our estimate, while the company
expects flat figures for 2019. Our stance for 2019 and beyond has been more
cautious as the market has been going through a very favorable cycle.

Read more

 * Q4 sales amounted to EUR 54.2m vs EUR 39.4m a year ago.
 * Q4 operating profit stood at EUR 3.4m vs EUR 3.1m a year ago.
 * Q4 order intake was EUR 28m vs EUR 60m a year ago.
 * Order book amounted to EUR 95m vs EUR 110m a year ago.
 * Raute proposes that a dividend of EUR 1.40 (EUR 1.25) per share be paid for
   financial year 2018. The amount was slightly above our EUR 1.35 per share
   estimate.
 * Guidance: Raute expects 2019 net sales and operating profit to stay at
   similar levels compared to 2018. The company cites high order book and
   sustained brisk demand.



Open report


ENDOMINES - NO MAJOR SURPRISES

14.02.2019 - 09.30 | Earnings Flash

Endomines’ revenue and EBITDA in Q4 amounted to SEK 7.9m (Evli 5.4m) and SEK
-6.1m (Evli -6.4m) respectively. Endomines expects to produce 5,000-8,000 oz
gold (~156-249kg) in concentrate during 2019. Endomines further announced that
it has commenced the sale of a up to EUR 5 million senior secured bonds and
warrants.

Read more

 * Endomines gold production in Q4 amounted to 27.9kg (98.7kg), affected by the
   suspension of the Pampalo mine in October. Milled ore amounted to 7,559
   tonnes (39,692), at head grades of 2.6g/t (3.0g/t). Cash cost was 948 USD/oz
   (1,264).
 * Revenue amounted to SEK 7.9m (28.5m in Q4/17), above our estimates of SEK
   5.4m.
 * EBITDA in Q4 was at SEK -6.1m (Evli -6.4m) and EBIT at SEK -14.2m (Evli
   -11.7m).
 * Total cash flow was SEK -43.5m (1.8m).
 * Guidance: Annual gold production at the Friday mine in Idaho, USA, is
   expected to be approximately 9,000oz at a cash cost of 650-900 USD/oz,
   depending on the area of production, over the life time of the mine. In the
   first quarter of 2019, Endomines has commenced ramp-up of the mine and
   anticipates producing 5,000 – 8,000oz gold (~156-249kg) in concentrate during
   the year.
 * Endomines has commenced the sale of a up to EUR 5 million senior secured
   bonds and warrants. The bond carries a coupon of 12.0 per cent and has 3-year
   maturity. The number of the associated warrants is 5,555,555 and their
   exercise price is EUR 0.90 per warrant.



Open report


VAISALA - PRESSURE ON PROFITABILITY IN 2019

14.02.2019 - 09.00 | Company update

Vaisala’s dividend proposal was in-line with expectations, but outlook was
slightly weaker than expected. Due to increase in R&D and sales & marketing
spend, we’ve cut our EBIT estimates for 2019. We maintain HOLD recommendation
with new target price of EUR 18 (prev. 19).

Read more

Outlook for 2019

Vaisala expects market for traditional weather solutions to be flat in 2019,
while market for industrial measurement solutions is expected to continue to
grow in all regions. Increasing investments in R&D and sales & marketing are
expected to burden profitability in 2019. Vaisala estimates its full-year 2019
net sales to be in the range of EUR 380–400 million and its operating result
(EBIT) to be in the range of EUR 25–35 million including EUR 10–12 million
acquisition related amortization and one-off expenses related to a lease
contract. The new outlook with an adjusted EBIT range of EUR 35-47m was slightly
weaker than what we had expected; our previous EBIT estimate of EUR 45m (46m
cons) being in the higher end of the range.

Estimates revised down for 2019

We expect Vaisala’s 2019E net sales to be EUR 385m representing +10% growth y/y.
Sales growth will be driven by the recent acquisitions, Leosphere and K-Patents,
which we estimate to add around 24 MEUR and 12 MEUR to top line in 2019E. We’ve
adjusted our 2019E EBIT estimates downwards to reflect increase in R&D and sales
& marketing spend. We estimate 2019E reported EBIT to be EUR 31m (EUR 42m
adjusted for EUR 11m PPA and one-off expenses). For 2020-21 we expect 3.6% and
4.3% growth, with operating margin improving to 11.6% and 11.8% respectively.

HOLD maintained with new TP of 18 (prev. 19)

On our revised estimates Vaisala is trading at EV/EBIT and EV/EBITDA multiples
that are ~10% lower than our peer group, but we see this as fair given the
near-term weaker outlook. We maintain HOLD recommendation with TP of EUR 18
(prev. 19).



Open report


TAALERI - MARKET VOLATILITY VISIBLE IN SEGMENT RESULTS

14.02.2019 - 09.00 | Earnings Flash

Taaleri’s group income in H2/2018 amounted to EUR 37.3m (Evli 37.9m) and EBIT to
EUR 11.5m (Evli EUR 10.7m). EBIT in Wealth Management declined largely due to
declines in performance fees while the market volatility affected investment
income in Financing. Group EBIT was aided by the listing of Fellow Finance.

Read more

 * Income in H2 amounted to EUR 37.3m (EUR 42.3m in H2/17), in line with our
   estimates (Evli EUR 37.9m). The group’s continuing earnings grew 5.4 per
   cent.
 * EBIT in H2 was EUR 11.5m (EUR 11.6m in H2/17), slightly above our estimates
   (Evli EUR 10.7m). Taaleri had pre-announced the EBIT -margin in 2018 to be at
   similar levels to 2017.
 * The Wealth Management segments income in H2 was EUR 19m (H2/17 EUR 30.7) and
   EBIT EUR 2.7m (H2/17 EUR 8.8m). EBIT was affected by declines in performance
   fees.
 * The Financing segments income in H2 was EUR 6.3m (H2/17 EUR 10.1m) and EBIT
   EUR 2.5m (H2/17 EUR 6.0m). EBIT was affected by weaker income from investment
   activities.
 * The Energy segments income in H2 was EUR 1.2m (H2/17 EUR 1.0m) and EBIT EUR
   -1.4m (H2/17 EUR -0.9m).
 * Income from other operations in H2 amounted to EUR 10.3m (H2/17 EUR 0.9m) and
   EBIT EUR 7.7m (H2/18 EUR -1.9m). EBIT positively impacted by the listing of
   Fellow Finance (EUR 13.8m) and negatively impacted by the write-off on a
   geothermal project (EUR -3.1m)-
 * Assets under management at the end of H2/18 amounted to EUR 5.7bn
 * Dividend: Taaleri’s BoD proposes a dividend of EUR 0.30 per share (Evli EUR
   0.29)



Open report


SSH - GROWTH REMAINS AN ISSUE

13.02.2019 - 09.10 | Company update

SSH’s Q4 result missed our expectations. On a positive, the company issued an
outlook for 2019 and proclaimed the end of further litigation. We see current
valuation as stretched given the relatively low and uncertain sales growth, thus
we downgrade to SELL with target price EUR 1.6 (prev. 1.8).

Read more

Q4 misses our expectations

SSH Q4 missed our expectations, with net sales being EUR 6.4m (7.2m Evli) and
EBIT being EUR 1.3m (1.8m Evli). The miss was due to abnormally low underlying
software fees (0,6m excluding 1.5m license deal in Q4). Excluding patent income
(2.7m) and a few larger license deals (2.8m), growth in 2018 would have been
~10% negative.

Outlook for 2019 given

In 2019 SSH expects double digit percentage growth from its core software
business exceeding the projected annual cyber security market growth of
approximately 10 %. In the medium term, SSH expects similar or faster growth and
will also explore avenues for accelerated growth through inorganic growth
opportunities. We had previously modeled 16% growth for 2019E based on the
attractive growth opportunity apparent in the PAM market.

Estimates cut, slow growth with prudent cost control ahead

We’ve cut our net sales estimates for 2019-2021. We expect net sales in 2019E to
be EUR 17.5m (-4% decline y/y) due to absence of patent income. For 2021E and
2022E we model 11% and 12% net sales growth respectively. No growth this year
and slight growth in the coming years coupled with less litigation costs and a
prudent cost control, means SSH will slowly start reaching organic
profitability. We estimate EBIT of EUR 0.8m and EUR 1.9m in 2020 and 2021.

Downgrade to SELL with TP of 1.6 (prev. 1.8)

On our revised estimates, SSH is trading at EV/Sales 2019-20 of 3.9x and 3.5x.
Our DCF indicates fair value of EUR 1.6. We see valuation as stretched given the
uncertainty in sales growth, thus we downgrade to SELL with target price of EUR
1.6 (prev. 1.8). Our target price represents EV/Sales of 3.4x and 3.1x for 2019
& 2020.

Open report


SSH - Q4 RESULT BELOW EXPECTATIONS, OUTLOOK PROVIDED

12.02.2019 - 09.25 | Earnings Flash

SSH Q4 result was below our expectations. On a positive, company is providing
business outlook for 2019 and medium term.

Read more

 * Q4 net sales totaled EUR 6.4 million (7.2m our expectation)
 * Software fees were EUR 2.1 million (2.9m Evli), Professional services were
   EUR 2.1 million (2.0m Evli), and Recurring revenue was EUR 2.2 million (2.3m
   Evli)
 * Q4 operating profit was EUR 1.3 million (1.8m our expectation)
 * EPS was 0.03 (vs. 0.04 our estimate)
 * Business outlook for 2019: SSH expects double digit percentage growth from
   software business (software fees, professional services, and recurring
   revenue) at comparable exchange rates, exceeding the projected annual cyber
   security market growth of approximately 10 %.
 * In the medium term, SSH expects similar or faster growth and will also
   explore avenues for accelerated growth through inorganic growth
   opportunities. Possible significant quarterly variation in revenue growth is
   still to be expected due to timing of larger deals over the financial year.

Open report


VAISALA - OUTLOOK FOR 2019 DISAPPOINTS

12.02.2019 - 00.00 | Earnings Flash

Vaisala had previously announced preliminary Q4 results, so the focus was on
dividend proposal and outlook. The outlook guides for clearly lower EBIT than
what we or consensus were expecting.

Read more

 * Dividend proposal is 0.58 (0.55 Evli / 0.58 consensus)
 * Business outlook for 2019: Vaisala estimates its full-year 2019 net sales to
   be in the range of EUR 380–400 million and its operating result (EBIT) to be
   in the range of EUR 25–35 million including EUR 10–12 million acquisition
   related amortization and one-off expenses related to a lease contract.
 * Our estimates for 2019E are net sales of EUR 387m (382m cons.) and EBIT of
   EUR 45m (46m cons.)



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TOKMANNI - TOWARDS IMPROVING PROFITABILITY IN 2019E

11.02.2019 - 08.55 | Company update

Tokmanni’s focus is shifting towards improving profitability in 2019E. We
continue to consider valuation is being moderate against the margin improvement
potential and hence we retain “Buy” rating with an ex-div TP of EUR 9.

Read more

Q4 was just fine

Tokmanni’s Q4 revenue grew broadly as expected, with LFL still strong at 4.7%
vs. our 4.0% expectation. However, adj. EBITDA missed estimates by EUR 3m,
driven by one-off costs due to a product recall in the quarter (adj. EBITDA
impact EUR -1.4m) and other one-off costs related to integration of the
acquisitions carried out in late 2018. Integration costs should not have a
meaningful impact on Q1’19, we understand. The negative impact of the product
recall on gross profit was estimated at EUR 1.1-1.2m – excluding this the gross
margin would have been in line with our estimate of 34.8%. Overall, Q4 looked
just fine.

Focus shifting towards improving profitability in 2019E

Tokmanni’s 2018 was about improving customer trust by investing in prices,
marketing and selections. In 2019E focus is shifting towards improving
profitability by increasing the revenue share of direct imports (ie. increasing
the gross margin) and pushing OPEX as % of sales down. Certain real estate -
related costs have already been negotiated down.

Now targeting above 200 stores

Tokmanni updated its financial targets to reflect IFRS 16. These included no
drama, but at the same time the target for the store network was revised to
“above” 200 stores vs. “about” 200 stores previously. This is based on a view
that demand will be sufficient.

Retaining Buy” with ex-div TP of EUR 9

We continue to consider valuation is being moderate against the margin
improvement potential and hence we retain “Buy” rating with an ex-div TP of EUR
9.



Open report


ETTEPLAN - REMAINING ON TRACK

08.02.2019 - 21.45 | Company update

Etteplan posted good Q4 results, although slightly below our estimates, with net
sales at EUR 62.9m (Evli 66.0m) and EBIT at 5.7m (Evli 6.2m), affected at least
partly by the impact of vacation timing and activities of two major customers in
December. The market outlook remains encouraging and Etteplan expects revenue
and operating for 2019 to grow compared to 2018. Our estimates remain largely
unchanged and we retain our HOLD-rating with a target price of EUR 9.0.

Read more

Market outlook and guidance remaining favourable

Etteplan posted good Q4 results, although falling slightly below our estimates
due at least partly to the impact of vacation timing and activities of two major
customers in December. The Technical Documentation continued to see challenges
while Embedded Systems and IoT saw solid development, as actions to improve
profitability have taken effect. Etteplan expects the revenue and operating
profit for the year 2019 to grow compared to 2018. Comments regarding the market
outlook were encouraging, as Etteplan continues to see favorable development in
all market areas but with demand growth in Europe expected to slow down
slightly. The BoD’s dividend proposal for 2018 is EUR 0.30 per share, in line
with expectations.

Estimates largely unchanged post-Q4

Our estimates remain largely unchanged post-Q4. We have raised our estimates for
profitability for Embedded Systems and IoT after the solid performance in Q4. We
expect net sales and EBIT BO of EUR 251.6m and EUR 24.7m respectively, with
margins near Etteplan’s strategic target of 10%. We do not expect the growth
target of 15% to be reached without acquisitions.

HOLD with a target price of EUR 9.0

On our estimates Etteplan trades largely in line with peers on 2019E EV/EBIT and
P/E. With our estimates largely unchanged we retain our HOLD-rating with a
target price of EUR 9.0.



Open report


TOKMANNI - ADJ. EBITDA MISSES DUE TO ONE-OFFS; DIVIDEND BEATS; GUIDANCE IN LINE

08.02.2019 - 12.40 | Earnings Flash

Tokmanni’s revenue grew broadly as expected, with LFL still strong at 4.7% vs.
our 4.0% expectation. Adj. EBITDA misses estimates (EUR 28.2m vs. EUR ~31m Evli
and cons), driven by one-off costs due to a product recall in the quarter
(impact EUR -1.4m) and other costs related to integration of Ale-Makasiini and
by prerarations related to the purchase of stores in Northern Finland. Dividend
is a bit better than expected, while guidance for 2019E is unsurprising.
Tokmanni updated its financial targets to reflect IFRS 16, and now targets
“above” 200 stores vs. “about” 200 stores previously. Overall, the report looks
just fine.

Read more

 * Q4 revenue was EUR 268m vs. EUR 267/269m Evli/cons. Revenue grew by 8.0% y/y,
   driven by 4.7% LFL growth (Evli exp. 4.0%) and new openings.
 * Q4 adj. EBITDA was EUR 28.2m (10.5% margin) vs. EUR 31.0m (11.6%) Evli and
   EUR 31.3m (11.7%) consensus. The miss is driven by one-off costs due to a
   product recall in the quarter (impact EUR -1.4m) and other costs related to
   integration of Ale-Makasiini and by preparations related to the purchase of
   stores in Northern Finland.
 * 2018 dividend: EUR 0.50 vs. EUR 0.45/0.47 Evli/cons.
 * 2019 guidance is unsurprising: Tokmanni expects good revenue growth for 2019,
   based on the revenue from the new stores acquired and opened in 2018 and new
   stores to be opened in 2019, as well as on slight growth in LFL revenue.
   Group profitability (comparable EBIT margin) is expected to improve on the
   previous year.





Open report


CONSTI - UPGRADE TO BUY

08.02.2019 - 09.00 | Company update

Consti’s Q4 EBIT remained negative in Q4 at EUR -2.2m, impacted further by the
impact of a building purpose modification project. Consti initiated a program to
improve profitability and is also renewing it segment reporting. Consti expects
the operating profitability to improve in 2019 compared to 2018. We upgrade to
BUY (HOLD) with a TP of EUR 6.0

Read more

Renewing segment reporting

Consti’s Q4 results were further burdened by costs relating to a demanding
building purpose modification project and EBIT was negative at EUR -2.2m, below
our expectations (Evli EUR -1.0m). Consti estimates that its operating result
for 2019 will compared to 2018 (EUR -2.1m). Consti launched a program to improve
profitability and will renew its segment reporting with the intention of moving
towards a customer-oriented organisation structure. The current segments will be
re-organised into customer specific business areas, which is intended to among
other things benefit in sales by offering a larger part of the relevant services
from one entity. The program’s costs are estimated at approx. EUR 0.5m with the
aim of achieving savings of EUR 2m from 2020 onwards.

Estimates mainly intact post-Q4

Our earnings estimates remain mainly intact post-Q4, with our sales estimates up
by some 3%. We continue to expect profitability improvements in 2019 as the
effects of the projects that impacted 2018 diminishes, although we note that
risks related to the projects are not all resolved. We further expect the
slow-down in new construction to alleviate some of the supply chain pressure and
enable margin improvement.

BUY (HOLD) with a TP of EUR 6.0

On our estimates Consti trades at a 33%/28% discount on 2019E EV/EBITDA and
EV/EBIT. We note that there are risks associated with our estimated
profitability improvement, but we see the measures taken during recent years,
including among other things stricter tendering processes, to support
profitability. We upgrade to BUY (HOLD) with a target price of EUR 6.0.



Open report


CONSTI - REVENUE BEAT, EARNINGS BELOW EXPECTATIONS

07.02.2019 - 09.00 | Earnings Flash

Consti’s EBIT was below expectations, at EUR -2.2m (EUR -1.0m/-1.3m Evli/cons.),
while Q4 revenue of EUR 96.8m was higher than expected (EUR 87.0m/87.8m
Evli/cons.). Consti estimates that its operating result for 2019 will improve
compared to 2018. The BoD proposes that no dividend be paid.

Read more

 * Net sales in Q4 amounted to EUR 96.8m (EUR 86.3m in Q/17), beating both our
   and consensus estimates (EUR 87.0m/87.8m Evli/cons.). Sales growth in Q4 was
   12.1 % y/y.
 * EBIT in Q4 was EUR -2.2 (EUR -2.6m in Q4/17), falling below both our and
   consensus estimates (EUR -1.0m/-1.3m Evli/cons.). EBIT was negative due to
   weaker than expected profitability in the housing repair unit included in the
   Building Facades business area.
 * Technical Building Services: Net sales in Q4 were EUR 31.0m vs. EUR 30.1m
   Evli.
 * Renovation Contracting: Net sales in Q4 were EUR 28.5m vs. EUR 24.1m Evli.
 * Building Facades: Net sales in Q4 were EUR 42.5m vs. EUR 36.8m Evli.
 * Order backlog at the end of Q4 was EUR 225m, down 0.3 % y/y.
 * Guidance: Consti estimates that its operating result for 2019 will improve
   compared to 2018.
 * Dividend: Consti’s BoD proposes that no dividend be paid for 2018 (Evli/cons.
   expectation no dividend)
 * Consti announced the initiation of a cost savings program with a target of
   EUR 2m annual savings, expected to be achieved by 2020.



Open report


SSH - EXPECTING A SOLID Q4

07.02.2019 - 08.45 | Preview

SSH will report Q4 earnings next week on Tuesday, the 12th of February. We
expect a solid Q4 result driven by patent license agreement and UKM license
deal. Our focus in the Q4 report will be on strategy execution and actions to
further accelerate SSH´s growth in 2019. Our HOLD rating and target price of EUR
1.80 remain intact ahead of Q4.

Read more

Expecting a solid Q4 result driven by patent and UKM deals

SSH announced in the end of last year that it had entered into a patent license
agreement with a leading provider of patent risk management solutions. SSH has
received a one-time payment of approximately EUR 1.75m which will be recognized
in Q418. In addition, SSH previously announced a UKM license deal with a major
global retail company, which is expected to contribute roughly EUR 1.5m in
revenue in Q4.

Raising estimates for Q418, estimates for 2019 unchanged

We raise our Q4 estimates to take into account the EUR 1.75m patent license
agreement. We now expect Q4 net sales to be EUR 7.2m (prev. 5.4m) and Q4 EBIT to
be EUR 1.8m (prev. 0.3m). Our estimates for 2019 and onwards remain intact. We
expect FY2018E net sales to be EUR 19.1m (vs. 16.2m 2017) and EBIT to be EUR
1.0m (vs. -1.8m 2017).

HOLD rating and target price of 1.80 euros maintained

Our focus in the Q4 call will be on strategy execution and actions to further
accelerate SSH´s growth in 2019. We’re also keen on hearing an update on PrivX
sales development, as SSH announced several partnerships regarding PrivX during
the end of last year. We do not expect SSH to give any revenue or earnings
guidance for 2019 (guidance ceased in 2017). We maintain our HOLD rating and
target price of EUR 1.80 ahead of Q4.

Open report


SRV - LEAVING FIRST UNPROFITABLE YEAR BEHIND

07.02.2019 - 08.15 | Company update

SRV’s Q4 profitability was below our expectations mainly due to additional REDI
shopping centre costs. We continue to expect significant profitability
improvement in 2019 but have lowered our estimates due to expected slower
shopping centre development in Russia and continued higher construction costs
during 2019. We retain our HOLD-rating with a TP of EUR 2.0 (2.4).

Read more

Weak profitability in Q4

SRV’s Q4 earnings fell below our estimates, with operating profit at EUR 0.1m
(Evli EUR 7.8m). The operating profit was affected by EUR 11.1m additional costs
from the REDI shopping centre along with an EUR 4m impairment charge in
International Operations but aided by the EUR 14m capital gain of the sale of
SRV Kalusto. The operational profitability in Operations in Finland, adjusted
for the REDI impact, remained rather weak despite the high revenue and many
completed developer-contracting housing units, affected by weaker margins in
certain projects.

2019 profitability estimates lowered

SRV expects revenue to grow in 2019 compared to 2018 and the operative operating
profit to improve compared to 2018 and be positive. The profitability in 2019 is
expected to be affected by higher construction costs due to long-term
procurement agreements. We have lowered our 2019E operative operating profit
estimate to EUR 32.7m (EUR 40.2m) due to both expected lower profitability in
International Operations from slower shopping centre development in Russia and
Operations in Finland due to the expected higher construction costs.

HOLD with a target price of EUR 2.0 (2.4)

On our revised estimates valuation looks challenging based on peer multiples,
with SRV trading at a larger premium to peers, but is still supported by our
SOTP. The balance sheet remains excessive, although some EUR 90m in capital
employed was released during the year and with the uncertainty regarding
shopping centre divestments we retain our HOLD rating with a TP of EUR 2.0
(2.4).



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ETTEPLAN - EXPECTING REVENUE AND OPERATING PROFIT GROWTH TO CONTINUE

07.02.2019 - 00.00 | Earnings Flash

Etteplans Q4 revenue (EUR 62.9m/66.0m Act./Evli est.) and EBIT (EUR 5.7m/6.2m
Act./Evli est.) fell slightly below our estimates but remained at good levels
nonetheless. Etteplan expects its revenue and operating profit for the year 2019
to grow compared to 2018. The BoD proposes a dividend of EUR 0.30 per share
(Evli EUR 0.30).

Read more

 * Net sales in Q4 were EUR 62.9m (EUR 58.5m in Q4/17), slightly below our
   estimates (Evli EUR 66m). Growth in Q4 amounted to 7.5 % y/y.
 * EBIT in Q4 was EUR 5.7m (EUR 4.6m in Q4/17), below our estimates (Evli EUR
   6.2m), at a margin of 9.1 %.
 * Engineering services: Net sales in Q4 were EUR 34.6m vs. EUR 37m Evli. EBIT
   BO in Q4 was EUR 3.3m vs. EUR 3.8m Evli.
 * Embedded systems and IoT: Net sales in Q4 were EUR 16.5m vs. EUR 16.2m Evli.
   EBIT BO in Q4 was EUR 2.0m vs. EUR 1.7m Evli.
 * Technical documentation: Net sales in Q4 were EUR 11.7m vs. EUR 12.8m Evli.
   EBIT BO in Q4 was EUR 1.0m vs. EUR 1.2m Evli.
 * Etteplan sees its business environment continuing to develop favorably in all
   market areas while demand growth in Europe is expected to slow down slightly
   due to political uncertainty.
 * Dividend proposal: Etteplan’s BoD proposes a dividend of EUR 0.30 per share
   (Evli EUR 0.30).
 * Guidance: Etteplan expects its revenue and operating profit for the year 2019
   to grow compared to 2018. The guidance is in line with our expectations



Open report


SRV - PROFITABILITY BELOW EXPECTATIONS

06.02.2019 - 09.10 | Earnings Flash

SRV’s Q4 profitability fell below our expectations, with the operating profit at
EUR 0.1m (Evli EUR 7.8m). Revenue was EUR 299.8m (Evli 299.6m). Profitability
was burdened by additional costs from the REDI shopping centre and impairment
charges in International Operations. SRV expects revenue to grow in 2019
compared to 2018 (EUR 959.7m) and the operative operating profit to improve
compared to 2018 (EUR -10.0m) and be positive.

Read more

 * Revenue in Q4 was EUR 299.8m (EUR 338.7m in Q4/17), in line with our
   estimates (Evli EUR 299.6m). Growth in Q4 amounted to -11.5 % y/y.
 * Operating profit in Q4 was EUR 0.1m (EUR 11.2m in Q4/17), below our estimates
   (Evli EUR 7.8m), at a margin of 0 %. The operative operating profit amounted
   to EUR 1.5m and was affected by rising costs, additional REDI costs of EUR
   11.1m, an impairment of EUR 4m in International Operations, and a EUR 14m
   capital gain for the sale of SRV Kalusto.
 * The order backlog strengthened to EUR 1,832m (2017: EUR 1,574.9m)
 * Guidance: SRV expects the full-year consolidated revenue for 2019 to grow
   compared to 2018 (EUR 959.7m). The operative operating profit is expected to
   improve compared to 2018 (EUR -10.0m) and to be positive. A total of 809
   developer-contracted housing are estimated to be completed in 2019 (526 in
   2018).
 * Dividend proposal: SRV proposes that no dividend be paid for FY2018.



Open report


TALENOM - UPGRADE TO BUY

05.02.2019 - 09.30 | Company update

Talenom’s Q4 results were quite in line with our estimates, with net sales and
operating profit at EUR 12.5m and EUR 1.5m respectively (Evli EUR 12.6m/EUR
1.3m). Talenom’s guidance exceeded our expectations, with net sales growth
expected to remain at 2018 levels (18.0%) and the operating profit margin to
increase slightly. We upgrade to BUY (HOLD) with an ex-div TP of EUR 24.5 (19.2)

Read more

Upbeat guidance

Talenom’s Q4 results were quite in line with our estimates, with revenue at EUR
12.5m (Evli 12.6m) and EBIT at EUR 1.5m (Evli EUR 1.3m). The dividend proposal
is EUR 0.55 per share (Evli EUR 0.50). Talenom’s guidance for 2019 is for net
sales growth to remain at a similar pace to 2018 (18.0%) and the operating
profit margin to improve slightly (2018: 17.5%), exceeding our expectations of
slightly slower sales growth and flattish operating margin development.

Franchising network expansion supporting growth

In absolute figures, net sales growth is mainly expected from new bookkeeping
customers. Talenom signed a large number of new franchising contracts during the
latter half of 2018, which is expected to increase inflow of new customers
during 2019. Growth in other businesses is expected to continue to be rapid, in
our view driven largely by staffing services. We expect profitability
improvements from further increases in the efficiency of bookkeeping services.
We have raised our 2019E and 2020E net sales growth and operating profit
estimates by 3%pts/15% and 5%pts/21% respectively. Our 2019E net sales and
operating profit estimates are at EUR 57.5m and EUR 10.6m respectively.

BUY (HOLD) with an ex-div target price of EUR 24.5 (19.2)

Talenom trades at a 2019E P/E of 19.8x. We have previously viewed P/E levels of
around 20x as reasonable but with the growth expected to remain strong and
operating profit margins to increase we justify slightly higher valuation
levels. We value Talenom at 21x 2019E P/E for an ex-div target price of EUR 24.5
(19.2) and upgrade to BUY (HOLD).



Open report


TALENOM - GUIDING CONTINUED STRONG GROWTH

04.02.2019 - 13.45 | Earnings Flash

Talenom’s fourth quarter results were quite in line with our expectations. Net
sales amounted to EUR 12.5m (EUR 12.6m Evli) while the operating profit beat our
estimates slightly, at EUR 1.5m (EUR 1.3m Evli). The dividend proposal for 2018
is EUR 0.55 per share (EUR 0.50 Evli). Talenom expects net sales growth to
continue at a similar pace as in 2018 (18.0%) and the operating profit margin to
improve slightly compared to 2018.

Read more

 * Net sales in Q4 were EUR 12.5m (EUR 10.7m in Q4/17), in line with our
   estimates (Evli EUR 12.6m). Growth in Q4 amounted to 16.5% y/y.
 * The revenue from additional services in Q4 amounted to EUR 3.4m, with a
   growth of 62.8%.
 * Operating profit in Q4 was EUR 1.5m (EUR 0.9m in Q4/17), above our estimates
   (Evli EUR 1.3m), at a margin of 11.8 %. Talenom had pre-Q4 guided 2018
   operating profit to be in the range of EUR 8.2-8.7m, with actual 2018 figures
   at EUR 8.5m
 * Dividend proposal: Talenom proposes a dividend of EUR 0.55 per share (Evli
   EUR 0.5).
 * Guidance for 2019: Talenom expects net sales growth to continue at a similar
   pace as in 2018 (18.0%) and the operating profit margin to improve slightly
   compared to 2018.
 * Net investments during 2018 amounted to EUR 9.5m compared to EUR 7.4m in
   2017.



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DETECTION TECHNOLOGY - OUTLOOK FAVORABLE WITH ATTRACTIVE POCKETS OF GROWTH

04.02.2019 - 08.30 | Company update

Detection Technology’s Q4 result was in line with our expectations. Post Q4, our
estimates for 2019E and 2020E remain intact. DT is trading at a discount, which
we see as unjustified given the attractive longer-term investment case. We raise
our recommendation to BUY with a target price of 19 euros (16.5).

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Q4 result in line with our expectations

DT’s Q4 net sales amounted to EUR 25.7m (-6.8% y/y) vs. EUR 25.8m/27.7m
Evli/consensus estimates. MBU sales were EUR 10.1m (EUR 10.8m our expectation)
and SBU sales were EUR 15.5m (EUR 15.0m our expectation). DT’s Q4’18 EBIT came
in at EUR 4.9m, which was in line with our estimates of EUR 5.2m (EUR 5.8m
cons). Dividend proposal was 0.38, which was lower than our estimate of 0.45.

Outlook favorable with attractive pockets of growth

Our estimates for 2019E and 2020E remain intact post Q4. We expect DT’s 2019E
net sales to grow 7.5% to EUR 100.9m driven by SBU’s return to growth of 11.5%
on weak comparables. We expect MBU net sales growth to be flat due to the
ramp-down of key customer’s product. We estimate 2019E EBIT to be EUR 18.9m
(19.1m 2018) and EBIT margin to decrease to 18.8% from 19.7% level of 2018 due
to higher R&D costs (30% higher vs. 2018). Despite our modest sales growth and
flattish margin expectations for 2019E and the uncertainty around the extent of
the ramp-down impact on MBU in H2, DT has several interesting pockets of growth
(such as the MultiX acquisition, CMOS flat panel detectors for dental
applications, and the Aurora product family for lower mid SBU clients), which
are not reflected in our estimates but if materialized, offer clear support for
the investment case.

Upgrade to BUY and target price of 19 euros (16.5)

On our estimates, DT’s 2019E-2020E EV/EBIT, EV/EBITDA and P/E are roughly 30%,
20%, 20% respectively below our peer group median. Despite a small cap discount,
we see discount as unjustified given the attractive longer-term investment case.
We raise our recommendation to BUY with a target price of 19 euros (16.5).

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DETECTION TECHNOLOGY - Q4 RESULT IN LINE, OUTLOOK STABLE

01.02.2019 - 09.30 | Earnings Flash

Q4 Net sales amounted to EUR 25.7m (-6.8% y/y) vs. EUR 25.8m/27.7m
Evli/consensus estimates. MBU sales were EUR 10.1m (EUR 10.8m our expectation)
and SBU sales were EUR 15.5m (EUR 15.0m our expectation). DT’s Q4’18 EBIT came
in at EUR 4.9m, which is in line with our estimates of EUR 5.2m (EUR 5.8m cons).
Dividend proposal is 0.38, which is lower than our estimate of 0.45.

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 * Group level results: Q4 net sales amounted to EUR 25.7m (-6.8% % y/y) vs. EUR
   25.8m/27.7m Evli/consensus estimates. Meanwhile, Q4 EBIT was EUR 4.9m (19.2%
   margin) vs. EUR 5.2m/5.8m Evli/cons. R&D costs amounted to 9.3% of net sales.
 * Medical Business Unit (MBU) delivered net sales of EUR 10.1m which was
   slightly above our estimate of EUR 10.8m. Net sales of MBU increased by 24.3%
   y/y due to well-developed demand from key customers.
 * Security and Industrial Business Unit (SBU) had net sales of EUR 15.5m vs.
   EUR 15.0m Evli estimate. SBU sales declined by -19.9% y/y due to Chinese
   transport infrastructure projects being on hold and intensified competition.

Outlook: DT expects sales to grow in both business units and geographically in
all markets and believes that the company will achieve double-digit revenue
growth. However, the second half of the year will be challenging for MBU sales,
because one of DT’s major customers will ramp down manufacturing of a device
that uses a DT solution.

Medium-term business outlook is unchanged: Detection Technology aims to increase
sales by at least 15% per annum and to achieve an operating margin at or above
15% in the medium term.

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CAPMAN - PICKING UP THE PACE WITH M&A

01.02.2019 - 00.00 | Company update

CapMan’s Q4 results were as expected weaker and in line with our expectations,
despite our underestimation of the negative impact on the market portfolio. The
acquisition of JAM Advisors (60%) is seen by CapMan as a means to expanding its
customer base but we expect CapMan to also seek to rapidly grow the business. We
retain our BUY rating with an ex-div TP of EUR 1.75 (1.80).

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Weaker results, raises dividend

CapMan’s Q4 results were quite in line with our expectations, with revenue of
EUR 8.9m (Evli 8.2m) and EBIT of EUR -2.9m (Evli -2.8m). Despite having
underestimated the market portfolio decline positive fair value changes in
especially Real estate and Infra aided Investment business returns. The dividend
proposal is EUR 0.12 per share as expected (2017: 0.11).

Acquisition of the majority of JAM Advisors

CapMan announced the acquisition of 60% of JAM Advisors, to be paid for with
5.11m CapMan shares. The company, established in 2012, had EUR 3.3m revenue in
2018 and EBITDA was barely positive. Valuation appears reasonable as it is to be
expected that CapMan will seek for rapid expansion of the business, likely also
internationally. CapMan will also use JAM Advisor’s customer network to expand
its own offering towards tier 2 and 3 investors.

BUY-rating with an ex-div target price of EUR 1.75 (1.80)

CapMan has during Q4, through among other things the additional BVK mandate and
second Infra mandate, seen AUM growth of EUR over 400m, that will contribute
with over EUR 4m annual fee income. Together with the acquisition of JAM
Advisors this will boost revenue and profitability in 2019 and we have raised
our 2019 estimates for revenue and operating profit by 13% and 5% respectively.
We expect management fee growth of 23% in 2019. Despite the negative Q4 earnings
from the impact of the non-core market portfolio CapMan is in our view
continuing to show solid progress. With valuation still looking attractive we
retain our BUY rating with an ex-div target price of EUR 1.75 (1.80).



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CAPMAN - EARNINGS WEAKER AS EXPECTED

31.01.2019 - 09.15 | Earnings Flash

CapMan’s Q4 results were weaker as expected due to the market volatility. A
dividend of EUR 0.12 per share is proposed (Evli EUR 0.12). AUM grew to over EUR
3bn driven by the additional BVK mandate. CapMan further announced the
acquisition of 60% of analysis and wealth management company JAM Advisors.

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 * Income in Q4 was EUR 8.9m (EUR 8.8m in Q4/17), above our estimates (Evli EUR
   8.2m).
 * Operating profit in Q4 was EUR -2.9m (EUR -3.4m in Q4/17), quite in line with
   our estimates (Evli EUR -2.8m).
 * Management Company business revenue in Q4 was EUR 6.2m vs. EUR 6m Evli.
   Operating profit in Q4 was EUR 0.5m vs. EUR -0.1m Evli.
 * Investment business: Revenue in Q4 was EUR 0.2m vs. EUR 0.2m Evli. Operating
   profit in Q4 was EUR -4m vs. EUR -3.2m Evli.
 * Services business: Revenue in Q4 was EUR 2m vs. EUR 2m Evli. Operating profit
   in Q4 was EUR 0.8m vs. EUR 1m Evli.
 * Dividend proposal: CapMan proposes a dividend of EUR 0.12 per share (Evli EUR
   0.12).
 * Guidance: CapMan does not provide a numeric guidance for 2019.
 * Capital under management by the end of Q4 was EUR 3.0bn. Of the capital under
   management EUR 1.9bn was attributable to real estate funds, EUR 0.8bn to
   portfolio companies and EUR 0.3bn to Infra and Credit.
 * CapMan announced that it has acquired 60% of analysis and wealth management
   company JAM Advisors. The acquisition will provide opportunities for CapMan
   to expand into new customer segments. The company’s turnover in 2018 was
   approx. EUR 3.3m and EBITDA barely positive.



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ETTEPLAN - OUTLOOK IN FOCUS

30.01.2019 - 09.15 | Preview

Etteplan reports Q4 results on February 7th. With signs of slower growth in the
global economy the market outlook and guidance are of key interest. We expect
the Q4 results to show good performance, with our revenue and EBIT BO estimates
at EUR 66.0m and 6.7m (Q4/17: 58.5m and 5.4m) respectively. We expect a dividend
proposal of EUR 0.30 per share. With valuation looking fairer after share price
inclines we downgrade to HOLD (BUY) with a target price of EUR 9.0.

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Comments on market outlook and guidance of key interest

The growth in the global economy has been showing signs of slowdowns due to
among other things the US-China trade war and changes in GDP growth forecasts
for the near-term have been seeing a slightly declining trend. An adverse shift
in engineering companies’ willingness to make investments would have an effect
on the engineering services sector. As the effect of any weaker demand is not
yet clearly comprehensible Etteplan’s comments on the market outlook along with
the guidance for 2019 are of key interest. Despite increased uncertainty we
still expect guidance to reflect growth in revenue and operating profit.

Expect DPS proposal of EUR 0.30

Our estimates ahead of Q4 remain intact. Our Q4 revenue and EBIT BO estimates
are at 66.0m and 6.7m respectively. Etteplan has not specified a dividend policy
but as the dividend has typically corresponded to around 50 % of EPS, we expect
a dividend proposal of EUR 0.30 per share.

HOLD (BUY) with a target price of EUR 9.0

Etteplan’s share price has seen increases during 2019 and valuation when
comparing to peers seems fair. We value Etteplan at 8.8x 2019E EV/EBITDA. We
downgrade our rating to HOLD (BUY) with a target price of EUR 9.0.



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PIHLAJALINNA - PROFITABILITY AND PIPELINE IN FOCUS

29.01.2019 - 09.10 | Preview

Pihlajalinna will report its Q4 earnings on Feb 15th. Profitability development
and news flow regarding the new contract pipeline are of interest, as before.
Our rating and target price (“Buy”, TP EUR 12) are unchanged ahead of Q4.

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Company lost two small contracts during Q4

Kymijoen Työterveys, which Pihlajalinna acquired in early 2018, lost two
customer contracts (Kouvola and Kotka) in Q4, following tendering processes.
Contracts were transferred to Terveystalo from start of 2019. Personnel of
Kymijoen Työterveys was given protection against dismissal for two years.
Pihlajalinna plans to utilize the resulting personnel surplus in other
undersupplied regions as well as in its other private service provision within
the region. Management has estimated that the revenue impact of the two lost
contracts is about EUR -2m in total annually. We assume the negative earnings
impact at EUR 1m+ for 2019E.

Terveyspalvelu Verso acquired in Q4

Pihlajalinna executed on its altered expansion plan by acquiring Terveyspalvelu
Verso, which produces occupational healthcare services at 17 clinics in Northern
Savo region. Price tag was not disclosed. Transaction was completed at the end
of Q4.

We expect profitability to improve in Q4

Pihlajalinna’s profitability and organic growth showed signs of turning to
better in Q3, supported by a streamlined cost structure and the drop of
insurance revenue leveling out. We expect cost savings to continue supporting
profitability and foresee adj. EBITDA margin improving y/y in Q4.

Rating and TP unchanged ahead of Q4

We expect Q4 revenue of EUR 127m (growth 18%) and adj. EBITDA of EUR 10.9m
(margin 8.6%) vs. EUR 8.5m (margin 7.9%) last year. We expect a dividend to be
cut to EUR 0.08 vs. EUR 0.16 last year, due to higher leverage and lower
earnings in 2018E. Our rating and target price (“Buy”, TP EUR 12) are unchanged
ahead of Q4.



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INNOFACTOR - SECOND PROFIT WARNING FOR 2018

28.01.2019 - 09.30 | Company update

Innofactor issued a second profit warning, expecting net sales to decline from
2017 and EBITDA to be negative, from previously having expected net sales to be
at a similar level to 2017 (EUR 65.7m) and EBITDA in between EUR 0.0-1.3m. Our
revised 2018 net sales and EBITDA estimates are at EUR 63.7m and -0.9m
respectively. We retain our HOLD-rating with a target price of EUR 0.4.

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Lowered guidance for 2018

Innofactor issued its second profit warning for 2018 on January 25th. Innofactor
now expects its net sales to decline from 2017 and EBITDA to be negative.
Innofactor’s previously expected its net sales to be at a similar level to 2017
and the operating margin to be positive but weaker than in 2017. Innofactor’s
net sales and EBITDA in 2017 amounted to EUR 65.7m and EUR 1.3m respectively.
The weaker than expected sales is according to Innofactor due to the timing of
customer’s purchases related to the Dynasty product family along with lower
sales in Denmark. Profitability is affected by the lower sales along with some
write offs related to project deliveries, of which to our understanding the
lower sales have a bigger impact. Innofactor further held co-operation
negotiations during Q4 that is expected to have affected profitability.

Expect improvements in 2019

Following the updated guidance, we have revised our 2018 estimates, with our net
sales and EBITDA estimates at EUR 63.7m and EUR -0.9m respectively, with our
other estimates largely intact. We expect to see a minor improvement in sales
going into 2019 and a more notable profitability improvement, mainly from the
organizational changes made in late 2018.

HOLD with a target price of EUR 0.4

On our estimates valuation continues to appear justifiable on EV/EBITDA
multiples, as the improvement we expect to see in profitability in 2019 is still
well below historically seen levels. We retain our HOLD-rating with a target
price of EUR 0.4.



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CAPMAN - WEAKER FINISH TO OTHERWISE SOLID YEAR

24.01.2019 - 09.15 | Preview

CapMan will report Q4 results on January 31st. We expect Q4 to based on earnings
be a weaker end to an otherwise solid year, driven by the impact of the market
volatility on CapMan’s trading portfolio. Our revised Q4 estimates for revenue
and operating profit are at EUR 8.2m and EUR -2.8m respectively. We expect a
dividend of EUR 0.12 per share. We retain our BUY-rating with a target price of
EUR 1.80 (1.75).

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Market volatility to weigh on Q4

We expect CapMan to report weaker Q4 earnings due to the effect of market
volatility on the trading portfolio during the quarter. CapMan has been shifting
funds from the trading portfolio to own funds, with some EUR 20m transferred
during H1/18, but was still at near EUR 60m at the end of Q3. As to our
understanding some 60% of the portfolio is hedged, we expect an EUR 3m fair
value loss. We also do not expect any notable carried interest or success fees
for the quarter. We have revised our Q4 revenue and operating profit estimates
to EUR 8.2m (10.0m) and EUR -2.8m (5.0m) respectively. Although we anticipate a
weaker result in 2018 compared to 2017, we expect CapMan to increase dividends
to EUR 0.12 (2017: 0.11) per share.

BVK mandate addition to support management fee growth

During Q4 CapMan reported the increase of the BVK mandate to EUR 820m (prev.
500m), which we expect to have an additional earnings contribution of around EUR
1.5m p.a. The whole mandate is to our understanding close to being fully
invested and will boost management fees from 2019 forward.

BUY-rating with a target price of EUR 1.80 (1.75)

Looking at 2019E and 2020E P/E multiples, coupled with the high dividend yield,
valuation in our view does not yet appear challenging, with a ~15% discount to
peers on P/E. We retain our BUY-rating with a target price of EUR 1.80 (1.75).



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DETECTION TECHNOLOGY - FOCUS ON OUTLOOK FOR 2019 AND CHINA

24.01.2019 - 08.50 | Preview

Detection Technology will report Q4 earnings next week on Feb 1st. Our focus
will be on the latest comments regarding China and the overall medical and
security market outlook for 2019. We expect a dividend of EUR 0.45, which
corresponds to a 40% EPS payout and 3% dividend yield. Our rating and target
price remain intact ahead of Q4.

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SBU net sales to decline in Q4, MBU still going strong in Q4

Due to a slowdown in China’s security market and tightening competition, DT has
said it expects SBU sales to decline y/y in Q4’18, in contrast to the earlier
guided single-digit y/y growth for H2’18. The visibility is limited due to the
suspension of many Chinese infrastructure projects. We expect SBU Q4 net sales
to be 15.0 MEUR (vs. 19.4 MEUR Q417). We expect continued good growth in MBU
with Q418E net sales of 10.8 MEUR (vs. 8.1 MEUR Q417).

2019 outlook in focus, especially comments on China

DT expects net sales to grow moderately at the beginning of 2019. This estimate
is based on the growth outlook for the overall X-ray imaging market, which is
similar for 2019 as 2018, according to DT. In the Q4 call we look forward to
hearing an update on the outlook and the Chinese market, as well as any new news
regarding the recently released Aurora X-ray detector family (expected to
support SBU’s net sales at end of 2019).

Estimates unchanged ahead of Q4, HOLD rating and target price of 16.5 euros
maintained

We expect Q4 net sales to be 25.8 MEUR (vs. 27.5 MEUR Q417) and Q4 EBIT to be
5.2 MEUR (vs. 7.0 MEUR Q417). Thus, we expect 2018E net sales to grow 6% to 94.1
MEUR from last year’s 89 MEUR and EBIT to decline 3% from last year (19.3 MEUR
2018 vs. 19.9 MEUR 2017) due to lower SBU sales and higher R&D costs. We expect
a dividend of EUR 0.45, which corresponds to a 40% EPS payout and 3% dividend
yield. Our rating and target price, “HOLD” and target price EUR 16.5, remain
unchanged ahead of Q4.

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TOKMANNI - EXPECTING GROWTH IN REVENUE, EARNINGS AND DIVIDEND

23.01.2019 - 09.05 | Preview

Tokmanni will report its seasonally strong Q4 earnings on Feb 8th. As usual LFL
growth and margins are of interest. We expect revenue and earnings to grow with
continued LFL growth and stable gross margin. We foresee the dividend at EUR
0.45, which corresponds to 70% EPS payout and yields 5.6%. Our rating and target
price (“Buy”, TP EUR 9) remain intact ahead of Q4 earnings.

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Store network approaching 200 stores with acquisitions

Tokmanni acquired 4 stores in Northern Finland in December with combined revenue
of some EUR 9m in 2017. The stores were transferred to Tokmanni at the beginning
of 2019. These together with the earlier Ale-Makasiini acquisition (9 stores,
revenue EUR 20m in 2017) put Tokmanni's store count at 190 vs. the target of
about 200 stores. At the targeted opening pace of ~5 stores per year, Tokmanni
is set to reach its 200 store target in the next couple of years. Growth beyond
this was not addressed at the CMD in December, but plans are likely to receive
increased attention going forward.

Expecting continued LFL growth and stable GM in Q4

Tokmanni’s LFL growth has surprised positively in Q1-Q3 (+6%), considering the
company has had zero or slightly negative LFL growth in recent years. Solid LFL
growth has been supported by weak comparables, better weather, assortment
improvements and somewhat more active take on campaigning. Revenue guidance was
raised to reflect good LFL performance with Q3 earnings. We expect LFL growth to
continue at solid 4% level in Q4, but for 2019E we maintain a more conservative
1% LFL growth assumption. We foresee the gross margin at 34.8% in Q4, which is
in line with the average level of Q4s in 2015-2017.

Expecting growth in revenue, earnings and dividend

We expect Q4 revenue of EUR 267m (7.5% growth y/y, of which LFL 4.0%) and adj.
EBITDA of EUR 31.0m (EUR 28.6m y/y). We expect a dividend of EUR 0.45, which
corresponds to ~70% EPS payout and yields 5.6%. Our rating and target price
(“Buy”, TP EUR 9) remain intact ahead of Q4 earnings.



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VERKKOKAUPPA.COM - GUIDANCE DOWNGRADE BY SURPRISE

18.01.2019 - 08.35 | Preview

Verkkokauppa.com downgraded its guidance yesterday for 2018E adj. EBITDA. The
warning came as a surprise, even if major turmoil took place in the wider retail
industry in Q4. We have cut estimates for Q4 and for 2019-2020E.

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Guidance downgraded for adj. EBITDA

Verkkokauppa.com downgraded its guidance yesterday and gave preliminary figures
for full-year revenue and adj. EBITDA. FY18E revenue was EUR 477m, in line with
the guided range of EUR 460-500m and somewhat above EUR 467-468m Evli and
consensus estimates. However, adj. EBITDA landed at EUR 10.2m, below previously
guided range of EUR 11-14m and below EUR 12.7m Evli and cons expectation.
Full-year figures imply Q4 revenue of EUR 155m (growth 22%) and adj. EBITDA of
EUR 3.4m (EUR 5.9m y/y). Adj. EBITDA for Q4 thus lands at its lowest level since
2014. Seasonally strong Q4 has thus clearly disappointed. Tight price
competition and higher marketing costs were mentioned as negative contributors
in 2018E.

We expect wholesale volumes to have increased y/y in Q4

Federal Customs Service of the Russian Federation announced on Dec 7th that
starting from Jan 2019 the duty-free limit for private goods imports will be
reduced to EUR 500 from EUR 1000 previously. We expect this to have supported
wholesale volume sales for Verkkokauppa.com in Q4 and consider this as a likely
contributor to the Q4 revenue beat.

Estimates cut - target price to EUR 4.2 (4.7)

We have cut 2019 and 2020E estimates by 12% and 9% respectively. We continue to
expect a growing dividend of EUR 0.19 vs. EUR 0.18 for 2017. This represents
122% of EPS, but can be backed by the sizeable net cash position. We cut target
price to EUR 4.2 (4.7), which corresponds to 12x 2019E EBIT. Our “Hold” rating
is intact. Our estimates do not yet reflect the upcoming IFRS 16 changes.



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RAUTE - HIGHER SALES, LOWER ORDER INTAKE

17.01.2019 - 09.10 | Preview

Raute announced 2018 sales and EBIT to be higher than previously expected. The
company reported 2018 sales at EUR 181m and EBIT at EUR 14.9m. Our respective
estimates previously stood at EUR 171m and EUR 15.1m. The higherthan- estimated
sales were the result of strong execution throughout the entire delivery chain
during the last months of the year. Services sales were also higher than
estimated. However, the order book amounted to EUR 95m vs. our estimate of EUR
114m.

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Higher revenue negated by lower margin and order intake

Stronger than expected Q4 project deliveries (EUR 39m vs. EUR 33m in the
previous quarter, according to our estimates) pushed the company to book a
record quarter. On the other hand, the released figures reflect a lower EBIT
margin on project deliveries. We estimate the Q4 project deliveries EBIT margin
at below 5%, while previously the business has averaged margins above 6%. It
should be noted that the lower margin may be due to possible conservative
assumptions by the company regarding the unfinished projects. Whereas Q4 sales
came in EUR 10m higher than our expectations, the order intake fell short by EUR
9m (at EUR 28m vs. our estimate of EUR 37m).

We maintain HOLD with a TP of EUR 27.0 (27.5)

All in all, we don’t see material changes in the company’s operating
environment. We continue to expect negative sales and EBIT development for the
next couple of years following a very strong investment cycle by Raute’s
customers. Our estimates for 2019 sales and EBIT remain at EUR 149m and EUR 12m,
respectively. We make no significant changes to our longer-term estimates and
maintain our HOLD rating, lowering our target price as peer valuation multiples
have declined during the recent months. In our view an EBIT level of around EUR
10m and EV/EBIT multiple of 8x remain the relevant yardsticks for long-term
over-the-cycle valuation.



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VAISALA - POSITIVE PROFIT WARNING

15.01.2019 - 09.20 | Preview

Vaisala issued a positive profit warning yesterday, with operating result being
better than previously guided (EBIT range 30-36 MEUR). Operating profit for 2018
was 39 MEUR vs. 35.5 MEUR our estimates. Net sales for 2018 was 349 MEUR vs. 349
our estimate. W&E net sales in Q4 were 78 MEUR vs. 78 MEUR our estimates, IM net
sales in Q4 were 31 MEUR vs. 30 MEUR our estimates. Most of the profitability
beat was due to better than expected profitability in W&E, were EBIT was 10 MEUR
vs. 5.2 MEUR our estimates (IM EBIT 6 MEUR vs. 5.5 MEUR our estimate).

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Favorable mix in W&E and higher sales in IM impacted EBIT

In the fourth quarter 2018, operating result was higher than estimated due to
higher than estimated gross profit and other operating income. In W&E, gross
margin was higher than estimated due to favorable sales mix. In IM, net sales
were higher than estimated resulting in higher operating result. Other operating
income included EUR 1.5 million of reversal of earn-outs and other contractual
liabilities related to acquisitions in the recent years.

2019E growth mainly non-organic, TP 19 and HOLD recommendation maintained

We estimate Vaisala’s net sales to grow 11% to 387 MEUR in 2019E. Growth is
mainly driven by the Leosphere and K-Patents acquisitions (adding 24 MEUR and 12
MEUR to top line in 2019E). We estimate 2019E EBIT to be 45 MEUR. On our
estimates Vaisala is trading at 2019/20E at P/E 20.4 and 17.9, which is ~17%
higher than peer group. On our estimates, EV/EBIT multiples for 2019/20E are
14.5 and 12.8 respectively, which are in line with peer group. We await some
more color from the Q4 call, especially regarding China and the W&E project
outlook. We retain our HOLD recommendation and target price of 19 euros.



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CONSTI - 2018 EARNINGS TO BE IN THE RED

15.01.2019 - 09.00 | Preview

Consti issued a profit warning, expecting the operating result for 2018 to be
negative and decline compared to 2017. The profitability in Q4 will be burdened
by higher than expected costs of a building purpose modification project. We
expect EBIT of EUR -1.0m (prev. 1.5m) in 2018. We do not expect Consti to
distribute dividends for FY 2018. We retain our HOLD-rating with a target price
of EUR 6.0 (7.5).

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Lowered guidance

Consti lowered its guidance, now expecting the operating result to be negative
and decline (prev. grow) compared to 2017, when the operating result was EUR
-0.4m. Consti’s Q4 results will be negative due to weaker than expected
profitability in the housing repair unit included in the Building Facades
business area. The profitability issues relate to higher than expected costs of
a building purpose modification project. The project will be finalized during
H1/2019.

2018E EBIT EUR -1.0m (1.5m)

We have cut our Q4 profitability estimates, with both our Q4/18 and 2018E EBIT
estimates now at EUR -1.0m (prev. 1.5m). Due to the weaker result we have
revised our dividend estimate and do not expect Consti to distribute dividends
for FY 2018. We have cut our 2019E EBIT estimate and now expect EBIT of EUR 7.0m
(8.7m). We anticipate further profitability impacts of the building purpose
modification project during 2019E but continue to expect notable profitability
improvements as the projects that have burdened profitability are completed.

HOLD with a target price of EUR 6.0 (7.5)

On our estimates Consti trades at a 2019E EV/EBIT of 8.4x, at a ~10/20 %
discount to the Construction peers and Building Installations and Services
peers. Given the profitability challenges and weaker visibility into near-term
profitability we see the discount as justified and retain our HOLD-rating with a
target price of EUR 6.0 (7.5).



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NEXT GAMES - UPBEAT Q4 FIGURES, INITIATING SAVINGS PROGRAM

11.01.2019 - 09.00 | Company update

Next Games released preliminary Q4 figures and announced an intention to
streamline operations, expecting annual cost savings in the range of EUR 4-8m.
Next Games is still reviewing financing options but no update on the situation
was given with the releases. Financing remains a concern but with a stronger
than expected cash position we upgrade to HOLD (SELL) with a target price of EUR
2.0 (1.8).

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Q4 losses smaller than anticipated

Next Games announced preliminary Q4 figures. Revenue amounted to EUR 11.3m (Evli
EUR 12.2m) while EBITDA amounted to EUR -1.3m (Evli -3.6m). The gross margin
improved more than we had expected, at 37% in Q4 (-11% in Q3). User acquisition
and marketing costs relating to Our World have normalized, which helped boost
the gross margin. The company’s cash position at the end of Q4 was EUR 7.3m.

Seeking to streamline operations

Company management has been authorized to initiate a program to review the
company’s cost structure, including consultation proceedings covering the entire
organization. The company estimates annual cost savings in the range of EUR 4-8m
during the full year 2019. Next Games is further still looking into alternatives
to strengthen its financial position.

HOLD (SELL) with a target price of EUR 2.0 (1.8)

We have revised our estimates, with our 2019E sales estimate lowered to EUR
67.2m (prev. 73m) due to expected lower Our World revenue and EBIT estimate
raised to EUR -5.7m, to account for the cost savings program and lower than
expected UA costs. Although the financing situation remains a concern, we view
the situation as less dire than previously anticipated. We expect the cost
savings program to further alleviate the financing situation but will likely
have some impact on new game launches. We upgrade to HOLD with a target price of
EUR 2.0 (1.8).



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FINNAIR - SOFT TRAFFIC CONTINUED

10.01.2019 - 09.15 | Preview

Finnair’s traffic came in below our (and consensus) expectations in Q4 and the
company appears to have slightly missed its FY2018 guidance ranges for capacity
growth (14.8% vs. guidance “above 15%”) and passenger growth (11.6% vs. guidance
12-13%). We have cut Q4 estimates with weaker than expected traffic, whereas our
2019E estimates remain largely unchanged.

Read more

Q4 traffic softer than we expected

Finnair’s traffic continued soft in Q4. Overall Q4 capacity (ASK) grew by 9% vs.
our 12% expectation, while sold capacity (RPK) grew by only 4% vs. our 10%
expectation. Thus passenger load factor (PLF) declined quite notably by 3.4
percentage points in Q4 to 76.9%. This was driven by weakening PLFs in European
(- 3.6pp), Asian (-3.5pp) and domestic (-3.0pp) traffic. Finnair flagged in Q3
that competition had tightened especially in the Nordics, which is a likely
contributor to soft traffic performance. Finnair stopped reporting unit revenue
(RASK) with end-quarter monthly traffic, but we expect it to have continued to
decline in Q4.

Fuel price eased somewhat q/q in Q4

As a positive the price of jet fuel eased in November and December, after
climbing to a multi-year high in October. On a q/q basis average price moved by
-5% in USD and by -3% in EUR compared to average price of Q3. Yet average price
for Q4 was still 15% higher y/y in USD and 18% higher in EUR.

Q4 estimates cut

We have cut Q4 estimates and expect Finnair’s Q4 revenue to be EUR 671m (4%
growth), while foreseeing adj. EBIT at EUR -9m (margin -1.4%). We foresee FY2018
revenue growth at the low-end of the guided “about 10-11%” range. Our rating
(“Hold”) and TP (EUR 6.8) remain intact, with 2019E estimates largely unchanged.



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ASPO - GUIDES EBIT AT THE RANGE’S LOW-END

19.12.2018 - 09.05 | Company update

Aspo announced the restructuring of its subsidiary Kauko. Effective in 2019,
Aspo will no longer report Kauko as a separate segment. The corporate action
does not come as a major surprise, yet Aspo also restated its 2018 EBIT guidance
at the lower end of the initial range. We adjust our estimates for Kauko
accordingly, while making small adjustments to ESL’s estimates due to the new
LNG vessels taking longer than initially expected to reach their full
operational efficiency.

Read more

Kauko plays a minor role in the sum-of-the-parts analysis

According to the plan, Kauko’s energy solutions business will be either sold off
or terminated, while the offering for mobile knowledge work as well as Kauko’s
administration will be restructured. The energy solutions business generates
approximately one third of Kauko’s revenue. It was expected that Aspo might take
more concrete measures regarding Kauko as the subsidiary has not been able to
reach its targets. We recognize the announced EUR 5m goodwill impairment in
Kauko’s Q4 EBIT.

We expect ESL’s acquisitions to lift 2019 EBIT to EUR 25m

We make slight adjustments to ESL’s estimates, reflecting the longer learning
curve for the new LNG vessels to reach their full operational efficiency (Q4
EBIT EUR 1.2m lower than previously expected, 2019 EBIT lower by EUR 0.4m).
Nevertheless, the new LNG vessels and the acquisition of AtoB@C are expected to
be major contributors to next year’s EBIT growth. Our EBIT estimates for Telko
and Leipurin remain unchanged.

Lower peer multiples cut our target to EUR 9.25 (EUR 10)

Overall, we don’t see any significant changes in Aspo’s operations. We expect
Aspo’s 2018 EBIT at EUR 21.9m (including the EUR 5m impairment of Kauko). We
retain our HOLD rating but decrease our target price to EUR 9.25 (EUR 10). The
change in our target price mainly reflect’s Telko’s lowered peer multiple, while
the write-down of Kauko figures only as a minor loss in the sum-of-the-parts
valuation.



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TALENOM - ISSUED POSITIVE PROFIT WARNING

13.12.2018 - 09.00 | Company update

Talenom raised its guidance for FY2018 EBIT, expecting EBIT to be in the range
of EUR 8.2-8.7m. The raised guidance is mainly due to increased operational
efficiency through technological improvements and to our understanding also due
to some postponement of investments in the company’s internationalization plans.
We retain our HOLD-rating with a target price of EUR 19.2 (18.5).

Read more

Guidance for 2018 EBIT raised

Talenom raised its guidance for FY2018 EBIT, expecting EBIT to be in the range
of EUR 8.2-8.7m (prev. EUR 7.4-8.0m). The sales guidance remains intact, with
sales growth expected to clearly exceed previous year levels. The improved
profitability outlook is mainly due to increased operational efficiency through
technological improvements. To our understanding some investments relating to
the company’s internationalization plans were postponed, which we expect in part
to have contributed to the raised guidance. Our revised 2018 EBIT estimate is at
EUR 8.4m.

Remain cautious to margin improvement

We continue to remain cautious to margin improvement in the near term. Talenom
still has room to improve margins through enhanced operational efficiency. We
continue to expect Talenom to establish a presence outside Finland next year,
most likely in Sweden, which would put some pressure on margins through up-front
personnel costs.

HOLD with a target price of EUR 19.2 (18.5)

We retain our HOLD rating with a target price of EUR 19.2(18.5). On our
estimates and target price Talenom trades at a target P/E and EV/EBIT for 2019E
of 19.4x and 16.3x, levels that we have previously consider reasonable.



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INNOFACTOR - WAITING FOR SIGNS OF A TURNAROUND

11.12.2018 - 08.30 | Company report

Innofactor has in the near past seen sales growth declines and profitability
being burdened by internal problems. Actions to decrease organizational levels
and improve decision-making are being taken and we expect profitability to see
some recovery in 2019, while signs of accelerated sales growth remain to be
seen. We retain our HOLD rating with a target price of EUR 0.40 (0.55).

Read more

Sales growth uncertainty

Innofactor has seen sales declining in the near past due to weaker sales
activity, with the organizational structure having had an effect. Actions have
been taken to decrease the organizational levels and improve decision-making,
but we remain wary to sales growth being remedied in 2019 and expect flat sales
growth.

Market outlook remains supportive

The Nordic IT-services market has seen healthy growth in recent years and is
expected to continue in the coming years. Furthermore, Microsoft has shown solid
performance within enterprise solutions, expected to grow at a double-digit
pace.

Expect to see margin improvement

The weaker sales in the near past along with other factors have had a negative
effect on profitability. Organizational actions being taken are expected to have
both a direct and indirect positive effect on profitability from 2019 onward and
we expect to see margin improvement in the coming years.

HOLD with a target price of EUR 0.40 (0.55)

On our estimates valuation is quite in line with peers on 2019E EV/EBITDA while
on 2020E multiples valuation appears more attractive. As profitability has been
an issue in the near past and evidence of significant margin improvements are
still lacking we emphasize the 2019E peer EV/EBITDA multiple and value
Innofactor at 8.6x 2019E EV/EBITDA, giving a target price of EUR 0.40 and
HOLD-rating.



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TOKMANNI - CMD: STRATEGY AND TARGETS REAFFIRMED

05.12.2018 - 09.10 | Company report

Tokmanni’s CMD provided an update into the company’s strategic focus areas and
targets. The CMD reaffirmed that the sourcing improvement potential, which has
been key to our investment case, remains intact and is of high importance in
management’s agenda. We continue to expect margins to improve in upcoming years
and hence retain “Buy” rating with TP of EUR 9 for the shares.

Read more

Targeting EUR 1bn in sales by 2020E

Tokmanni targets EUR 1bn in sales by 2020E with further store network expansion
and LFL growth. After the recent Ale- Makasiini acquisition the store count is
now 186 stores vs. the target of 200 stores. At the targeted expansion pace
(12,000m2 or ~5 stores annually) the target of 200 stores will be reached within
the next few years. Growth plans beyond this were not addressed.

EBITDA to 10% via improved sourcing and OPEX scalability

Tokmanni continues to target 10% adj. EBITDA margin. This does not include
impact of upcoming IFRS 16. The target implies 2- 3% margin improvement compared
to the level reached in recent years. 1-2% of this is to come from the gross
margin, which is to improve primarily driven by increased direct sourcing and by
increased share of private label products in the mix. The targeted gross margin
improvement is in line with what we had already incorporated into our estimates
and it reaffirms the validity of further sourcing improvement potential. OPEX
scalability should contribute the remaining 1-1.5%. Positive LFL growth is
expected to be a key driver behind OPEX scalability.

Maintaining “Buy” on margin improvement potential

We have included the acquired Ale-Makasiini into our estimates, but for other
parts our estimates remain broadly intact. We expect earnings to improve in
2019-2020E driven primarily by gross margin improvements via more efficient
sourcing. We consider valuation moderate against the margin improvement
potential and hence retain “Buy” rating for the shares.



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CAPMAN - CMD NOTES

29.11.2018 - 09.00 | Company update

CapMan’s CMD revolved around the strategic changes that have taken place during
the past few years and CapMan’s position going forward. Key emphasis will, based
on our take on the CMD, lie on earnings stability, asset diversification, and
broadening of the investor base.

Read more

Multi-asset manager

CapMan’s CMD clearly signaled the continued strive towards an increasing Nordic
presence and to a larger extent becoming a multi-asset manager. In our view key
areas of interest will be the fairly recently established areas of Growth equity
and Infra. The presented performance metrics for exits in CapMan Growth are
impressive, with significant further potential going forward. The Infra fund has
had a good start and a second mandate, still subject to approval, has been
signed.

Broadening of investor base

Another strategic area of focus lies in the broadening of the investor base.
Currently some 85 % of AUM stems from local tier 1 investors. CapMan is seeking
to increase the share of tier 2 and 3 investors along with international tier 1
investors. Targeting investors with smaller ticket sizes could likely be
reflected in new product launches similar to the open-ended NPI fund.

Seeking earnings stability, carry potential remains

CapMan’s financial objective remain unchanged. Currently the average ROE of 20 %
in our view remains the most challenging. Realization of mid- to long-term carry
potential remains a key factor but CapMan is also seeking to increase the share
of fee income to achieve more stability in earnings.

BUY with a target price of EUR 1.75

Our estimates remain unchanged, with earnings expected to improve in the coming
years. The effect of recent market uncertainty on CapMan is in our view
currently mostly neutral. We expect several new products to be launched during
2019 and the uncertainty could impact on fundraising, although fund track
records remain supportive. We retain our BUY-rating and target price of EUR
1.75.



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ETTEPLAN - MORE THAN JUST AN ENGINEERING COMPANY

29.11.2018 - 09.00 | Company report

Etteplan has seen favourable development in the past few years following
improving market conditions. Market uncertainty has increased recently and we
expect organic growth figures to slow down going in to 2019. Acquisitions remain
essential in achieving the 15 % average growth target. Margins are close to the
10 % EBIT from business operations target, under some pressure but with room for
improvements. We retain our BUY-rating with a target price of EUR 9.0 (9.5).

Read more

Market uncertainty casting a shadow on sales growth

Etteplan’s revenue in 2017 and during Q1-Q3/2018 increased by 16.8 % and 11.1 %,
of which organic growth amounted to 10.4 % and 7.6 %, supported by improved
market conditions from early 2017 onward. With some uncertainty relating to
market development visible we expect organic growth to slow down going in to
2019 and achieving the target of an average growth of 15% would in our view
require further acquisitions.

Margins near 10 % target

Etteplan has during 2018 been able to achieve group EBIT from business
operations margins of close to the 10 % target (9.1 % during Q1-Q3/2018). A key
driver for profitability has been Engineering Services due to the good demand
situation and improved operational efficiency. We see some pressure on the
already exceptionally good margins in the service area, while Embedded Systems
and IoT as well as Technical Documentation in our view still have room for
margin development.

BUY with a target price of EUR 9.0

Compared to peer 2019E and 2020E multiples Etteplan trades at a discount.
Increased uncertainty in coming years market development warrants some caution
but the ’19- ‘20E discount of ~20 % to peer ‘19E and ‘20E EV/EBITDA does not
appear justified. We value Etteplan at 8.8x 2019E EV/EBITDA, giving a target
price of EUR 9.0 (9.5) and BUY recommendation.



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CIBUS NORDIC - A ROUTINE TRIP FOR GROCERIES

28.11.2018 - 09.10 | Company update

Cibus’ quarterly results closely reflected the company’s earnings capacity. We
update our estimates to account for the acquisition of six properties the
company announced in early November. The add-on properties are expected to
contribute ca. EUR 2m in annual rental income. We retain our BUY rating and
target price of SEK 120 per share.

Read more

The portfolio now includes 132 properties

Following the company’s latest acquisition of six Finnish daily-goods properties
(all let to Kesko and Tokmanni), the portfolio now has a total lettable area of
some 477,000 sqm and NOI capacity of EUR 47.8m. The latest add-on portfolio was
acquired at a total cost of EUR 30m, the acquisition yield estimated at 6.5%.
Consequently, Cibus’ portfolio gross asset value currently stands at around EUR
815m. After subtracting the central administration and net financial costs,
Cibus now has capacity to pay ca. EUR 30m in annual dividends. The dividend
guidance currently remains at EUR 0.2 per share per quarter, or EUR 24.9m on an
annual basis.

EPRA NAV increased to EUR 11.2 (11.0) per share

Going forward, Cibus’ financial year will follow the calendar year. This means
the company’s next year-end report will be published in late February 2019 for
the period covering the second half of 2018. Meanwhile board member Jonas
Ahlblad will serve as an interim CEO until a new CEO has been appointed. During
the coming months we are expecting the company to announce the refinancing of
two bank loans. Cibus might increase its borrowings and use the proceeds to
acquire additional daily-goods properties in Finland. We expect the completed
refinancing to meaningfully cut the company’s average borrowing rate, which
currently stands close to 3%.

Retain BUY rating with TP of SEK 120 per share

We update our estimates to reflect the latest add-on acquisition. We expect the
company to announce further portfolio acquisitions during the next quarters. We
retain our BUY rating and target of SEK 120 per share.



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CIBUS NORDIC - NO SURPRISES; UPDATED EARNINGS CAPACITY PROVIDES COLOR ON THE
LATEST TRANSACTION

27.11.2018 - 11.40 | Earnings Flash

Cibus’ Jul-Sep 2018 quarter proceeded in-line with estimates. Net rental income
and operating income came in as guided by the company’s earnings capacity. From
now on, dividends will be paid on a quarterly basis.

Read more

 * Operating income during the quarter, at EUR 7.2m, was consistent with the
   annual earnings capacity previously communicated by the company for the
   period (EUR 28.8m).
 * Cibus previously announced an acquisition of six daily-goods properties in
   Finland at a cost of EUR 30m. The updated earnings capacity hints at an
   acquisition yield of ca 6.5%, i.e. an increase of EUR 2.0m in rental income.
   Correspondingly, the annual NOI capacity now stands at EUR 47.8m vs. EUR
   45.8m previously. The six recently acquired properties are all let to Kesko
   and Tokmanni.
 * Going forward, Cibus will pay dividends quarterly. Moreover, Cibus’ financial
   year will now follow the calendar year, meaning that the company’s next
   year-end report will be published in Feb 2019 for the period Jul-Dec 2018.
   Meanwhile board member Jonas Ahlblad (Sirius Capital Partners) will serve as
   an interim CEO until a new CEO has been appointed.



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GOFORE - UPGRADE TO BUY

22.11.2018 - 09.30 | Company update

Gofore specified guidance for 2018 and gave an outlook on net sales for 2019, at
EUR 50-52m (prev. 48-52m) and EUR 65-73m respectively. The long-term financial
objectives remain unchanged. The demand outlook in broad has remained good. On
our revised estimates we expect net sales of EUR 67.5m and EBITA of EUR 10.4m in
2019. On our estimates Gofore trades at a nearly 20 % discount to peers on ‘19E
EV/EBIT, which we do not consider justified. We upgrade to BUY (HOLD) with a
target price of EUR 9.8 (9.2).

Read more

Guidance for 2018 specified and 2019 forecast given

Gofore’s BoD specified guidance for 2018, expecting net sales to be EUR 50-52m
(prev. 48-52m). An outlook for 2019 was also given, according to which net sales
are expected to grow to EUR 65-73m, excluding any potential acquisitions in
2019. The long-term financial objectives remain unchanged, at 15-25 % net sales
growth in the next few years and an EBITA margin of 15 %. The demand situation
has in broad remained good and growth is expected across the board of customer
areas.

2019E net sales EUR 67.5m and EBITA EUR 10.4m

We have revised our estimates, now expecting net sales of EUR 67.5m (prev.
62.9m), to include for the Solinor acquisition. Our revised EBITA estimate is
EUR 10.4m (prev. 9.6m). Our 2019E net sales estimate is on the lower side of the
2019 outlook, leaving sales growth upside along with any potential acquisitions.
The availability of skilled professionals remains a limiting factor and the
lower range of the 2019 outlook would imply limited organic growth when
accounting for the Solinor acquisition.

BUY (HOLD) with a target price of EUR 9.8 (9.2)

Valuation levels have seen declines following recent market uncertainty but, on
our estimates, Gofore trades on a nearly 20 % discount to peer on ‘19E EV/EBIT.
Having been among the strongest performers both in sales growth and
profitability we do not see the discount as justifiable and upgrade to BUY
(HOLD) with a target price of EUR 9.8 (9.2).



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FELLOW FINANCE - INITIATING COVERAGE WITH HOLD

22.11.2018 - 08.15 | Company report

Fellow Finance is a P2P lending platform with high scalability at the core of
its business model, seeking rapid organic and profitable growth domestically and
internationally, with a proven track of growth and profitability. We initiate
coverage with HOLD and a target price of EUR 8.0.

Read more

Seeking rapid and profitable growth

Fellow Finance is a P2P consumer and business lending platform aiming at rapid
organic and profitable growth domestically and internationally. The company has
during its rather short existence been able to achieve solid growth while
retaining good profitability. The financial targets by the end of 2023 are net
sales of over EUR 80m, an EBIT-margin of over 25 per cent, annual loan
facilitations of EUR 1.5 billion, and to facilitate loans in ten countries in
Europe. The alternative financing market generally still accounts for only a
small share of total lending but companies like Fellow Finance are seeking to
challenge the traditional financial markets through innovation and technology.

Business model relies on highly scalable platform

Fellow Finance’s business model relies on its self-developed platform, which
enables high scalability. The platform further enables expansion into new
markets and launching of new products with little investment. Fellow Finance’s
subsidiary Lainaamo functions as a financing company and acts as a market maker
when entering new markets.

Initiate coverage with HOLD and target price of EUR 8.0

We initiate coverage of Fellow Finance with a HOLD rating and target price of
EUR 8.0. Our valuation is based mainly on payment processing and financing
platform peer multiples, emphasizing 2019E P/E ratios. Our target 2019E P/E of
21.9x values Fellow Finance above the lending platform peers, that on average
have a lower expected growth rate and profitability. The internationalization
plans offer significant upside but in our view Fellow Finance still needs to
show proof of international success.



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ENDOMINES - RAMP-UP PHASE AHEAD

15.11.2018 - 09.15 | Company update

Endomines’ gold production in Q3 amounted to 81.6kg and revenue to SEK 25.9m.
EBITDA remained barely positive at SEK 0.6m, aided by higher head grades and
lower costs due to suspension of the mining operations. Production at the Friday
mine is expected to begin in December 2018. We retain our BUY rating with a
target price of SEK 7.2 (7.8).

Read more

EBITDA positive despite mining operation suspension

Endomines gold production amounted to 81.6kg in Q3. Production figures were
aided by the high head grades of 3.9g/tonne. Revenue and EBITDA in Q3 were SEK
25.9m and 0.6m respectively. Mining operations at the Pampalo mine were
suspended in mid-September, which along with the higher head grades contributed
to a positive EBITDA, despite lower volumes. Gold production during 1-9/2018 was
303.5kg, with another 15kg produced in October and the total 2018 output
expected to exceed 320kg.

Limited new information in the earnings release

Endomines’ third quarter earnings release contained limited new information
regarding the Idaho projects. The start-up timetable of the Friday mine was
updated, with production anticipated to start in December. Details on the
progress of the exploration activities in the vicinity of Pampalo were given,
noting some samples with anomalies warranting further evaluation. Endomines had
earlier specified the expected cash costs of the Friday mine, estimated to be
around USD 650-900 per oz following ramp-up. We have updated our estimates for
the cash costs for Friday and expect levels of around 900 USD/oz during 2019 and
a decrease to 700-800 USD/Oz levels towards later production phases.

BUY with a target price of SEK 7.2 (7.8)

Following our revised estimates, we lower our target price to SEK 7.2 (7.8) but
retain our BUY rating. The gold price has hovered at around 1,200 USD/oz
following declines in Q3 but has seen slight upward pressure following recent
stock market uncertainty.



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ENDOMINES - EBITDA REMAINED POSITIVE

14.11.2018 - 09.15 | Earnings Flash

Endomines’ revenue and EBITDA amounted to SEK 25.9m and SEK 0.6m respectively.
Initial production at Friday is anticipated to commence in December 2018 but no
substantial volumes are expected until 2019.

Read more

 * Endomines had pre-announced Q3 production figures, with gold production of
   81.6kg (94.1kg). Milled ore amounted to 26,876 tonnes (37,422), at head
   grades of 3.9g/t (3.0g/t). Cash cost was 768 USD/oz (1,081).
 * Revenue amounted to SEK 25.9m (26.7m in Q3/17), above our estimates of SEK
   21.1m, driven by the higher head grades.
 * EBITDA in Q3 was at SEK 0.6m (Evli -11.4m) and EBIT at SEK -11.2m (Evli
   -21.7m), with depreciations and write-downs of assets of SEK -11.8m. The
   suspension of mining activities in mid-September and higher revenue
   contributed to the higher than anticipated EBITDA. Adjusted EBITDA, excluding
   costs associated with the TVL acquisition and co-operation negotiations
   amounted to SEK 4.3m.
 * Total cash flow was SEK -27.7m (1.6m).
 * Guidance: Gold production in January-October amounted to 318.5kg. Total
   output from Pampalo, including additional gold recovery in connection with
   maintenance of the processing facility, is expected to exceed 320kg.
 * Initial production at Friday is anticipated to commence in December 2018. No
   substantial production volumes are expected before the year-end.



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NEXT GAMES - DOWNGRADE TO SELL

06.11.2018 - 09.15 | Company update

Next Games Q3 results were weak and highlighted the volatility in earnings
stability when developing and launching new games. The company’s cash assets
have taken a big dent and with the existing games not being able to finance the
development of new games Next Games is looking into other funding options. With
the financing situation overshadowing the long-term potential we downgrade to
SELL with a target price of EUR 1.8 (8.5).

Read more

Our World launch burdened results

Next Games Q3 results were weak, with EBIT at EUR -10.7m. Profitability was
significantly affected by user acquisition and marketing costs relating to Our
World, released in mid-July, along with development costs. Revenue in Q3 was EUR
13.4m (NML 5.6m, Our World 7.8m). Our World saw a good start after release, but
a growing number of active users lead to technical issues and a weaker second
half of the quarter. The technical issues have decreased, and key metrics saw
stabilization towards the end of the quarter. A new license agreement was signed
during the quarter and Next Games now has four games in development.

Financial situation in focus

With the larger than anticipated loss in Q3, impacted by the weaker sales of Our
World, Next Games is looking into options for securing its financing. The
company’s cash balance at the end of the quarter was EUR 8.8m along with an
unused credit limit of EUR 5m. Next Games did not comment further on the types
of financing sought, but we note that the effect of dilution in the case of a
share emission at current share prices could be significant.

SELL (BUY) with a target price of EUR 1.8 (8.5)

At the current development pace and with only two live games the need for
financing in the near future appears evident. We now expect clearly deeper
losses and we emphasize the financing risk. We downgrade to SELL (BUY) with a TP
of EUR 1.8 (8.5).



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MARIMEKKO - MAINTAINING “BUY”

05.11.2018 - 08.50 | Company update

Marimekko had a strong Q3 and the company is now on an improved growth
trajectory, following own actions that are now bearing fruit. We consider
Marimekko’s outlook as being positive and retain “Buy” rating for the shares.

Read more

Guidance gives room for only EUR 1.4m EBIT in Q4

Marimekko had a very strong Q3. Performance remained solid in most markets.
Despite strong Q3 guidance of max EUR 12m adj. EBIT in 2018E was kept intact.
EUR 10.6m has been reached after Q3, implying guidance gives room for only EUR
1.4m for Q4. Earnings in Q4 are to be weakened by a revenue timing issue (part
of revenue was timed from Q4 into Q3) and higher costs.

Shares could reach EUR 30 level if EBIT margin meets 15%

Marimekko revised its financial targets. Most notable change is in EBIT margin
target, which is now 15% vs. 10% earlier. The 10% will be reached in 2018E. If
15% was reached, our DCF model and multiple exercises imply shares could reach
EUR ~30 level, even without assuming higher growth than currently.

Extra dividend of EUR 1.25 to be distributed

Marimekko board proposes to distribute an extra dividend of EUR 1.25 per share,
which is EUR ~10m. This corresponds to the divestment proceeds of the
Herttoniemi real estate. Net cash was EUR 17m at the end of Q3. The remaining
EUR 7m is reserved for general business development needs.

Maintaining “Buy” with an ex-div TP of EUR 22 (18)

We have raised FY19-20E estimates and expect a dividend of EUR 1.85 (0.60
ordinary + 1.25 extra) to be distributed for FY18E. We continue to see
Marimekko’s outlook to be positive and valuation attractive. Our TP of EUR 22
(18) values the shares at 12.7x EV/EBIT with our 2019E estimates, or at 11%
premium to the peer group, justified by a clear turn in sales and further margin
upside upon continued growth.



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CAPMAN - ON A HEALTHY DEVELOPMENT TRACK

02.11.2018 - 09.15 | Company update

CapMan’s Q3 results were good and the EBIT of EUR 4.8m beat our estimates (Evli
EUR 4.1m). In our view the Q3 progress continued to show a move towards
realizing built up long-term potential and developing into a healthier business
in terms of earnings stability. We retain our BUY-rating with a target price of
EUR 1.75.

Read more

Q3 EBIT beat, first closing of Infra fund

CapMan’s Q3 earnings beat our expectations, with EBIT at EUR 4.8m (Evli EUR
4.1m). The earnings were driven by CapMan Growth Fund’s successful exit from
Fluido. Revenue in Q3 was EUR 7.2m, below our estimates of EUR 8.6m, as no major
carried interest was booked. CapMan further announced the first closing of
CapMan Infra’s Nordic midcap infrastructure fund, with committed funds of EUR
115m.

Showing continued healthy development

CapMan in our view is nearing a point were some of the long-term potential is
starting to realize and the business is becoming healthier in terms of recurring
earnings, as opposed to high quarterly variability witnessed in previous years.
Management comments regarding the NRE I-fund were positive, with foreign
investor interest remaining good and on-going discussions regarding properties.
The BVK mandate is set to reach full utilization in 2019 along with the Infra
fund expected to reach the target of raising EUR 300+m, which along with growth
in other on-going newer ventures will benefit fee income. The NPI-fund saw
slower growth amid internal sales focus on the Infra-Fund, with investor demand
still remaining good. Although predictability of materialization of carried
interest is low, we continue to see good potential for 2019.

BUY with a target price of EUR 1.75

It is worth noting that the recent stock market uncertainty, were it to increase
further, would undoubtedly also affect CapMan. In our view the risks due to the
PE exposure are smaller and mainly long-term, as market uncertainty could affect
ability to raise funds and exit timing and valuations. We retain our BUY-rating
with a target price of EUR 1.75.



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NEXT GAMES - EARNINGS FLASH - EBIT DEEP IN THE RED

02.11.2018 - 09.00 | Earnings Flash

Next Games’ Q3 results fell significantly off expectations, with EBITDA at EUR
-10m (EUR -2.0m Evli/cons.), driven by investments into the Our World -game.
Revenue beat expectations, at EUR 13.4m (EUR 11.5m Evli/cons.). Next Games is
considering options to strengthen its financial status.

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 * Next Games’ revenue in the second quarter came in at EUR 13.4m (EUR 11.5m
   Evli&cons). Revenue growth y/y on was 110 %. Q3 was the first quarter with
   Our World significantly contributing to revenue.
 * EBITDA in Q3 was as expected negative, but the magnitude of the loss was
   significantly larger than our and consensus expectation, at EUR -10.0m and
   EBIT EUR –10.7m. Development costs during Q3 amounted to EUR 2.0m. The No
   Man’s Land -game remained profitable, with EBITDA of EUR 1.0m, while the
   large negative results were mainly affected by investments into promoting the
   Our World -game, with the game’s EBITDA at EUR -7.7m. According to management
   both games are currently operated at positive EBITDA but the combined revenue
   is not enough to cover games in development.
 * The company is considering options to strengthening its financial status as a
   part of its risk-management plan.
 * The number of employees grew to 143.
 * DAU during Q3 was 669k compared to Q3/17 figures of 371k. MAU was 3.2m
   compared to 1.14m during Q3/17. ARPDAU (EUR) was 0.26 compared to 0.21 during
   Q3/17. Key metrics saw significant growth due to the launch of the Our World
   -game.
 * Next Games announced that it has signed a new license agreement with a
   leading partner in the entertainment industry.



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PIHLAJALINNA - UPGRADED TO “BUY”

02.11.2018 - 08.25 | Company update

Pihlajalinna profitability turned to positive in Q3. Growth prospects now also
look better, with new contracts and a more promising pipeline. We think
valuation is now attractive against improving growth and profitability
prospects. We upgrade to “Buy” (“Hold”) with TP of EUR 12.

Read more

Profitability turned to the better

The main surprise in Pihlajalinna’s Q3 report was better than expected
profitability. Adj. EBITDA margin was at last year’s level in Q3, after
weakening clearly in H1. Organic growth also turned positive (+1%), after being
negative in H1 (-2%). Profitability is still not at the targeted level, but the
worst should now be behind. Management sees potential to improve profitability
both in the private and public sides of the business.

Growth prospects now look brighter

Pihlajalinna started production of residential services in Laihia in Sep 2018,
with an annual value of about EUR 5m. Provision of occupational healthcare
services for Stora Enso will start in Jan 2019 (we estimate value at EUR ~4m).
Negotiations for provision of residential services with about EUR 5m value are
ongoing in Laitila. Ruovesi is considering joining Pihlajalinna’s existing
Mänttä-Vilppula contract, with potential value of some EUR 15m, and a decision
from the Kristiinankaupunki tendering should arrive by the end of the year.

Less risk of profitability pressure

Pihlajalinna altered its expansion plan and no longer expects to open new
surgical units this or next year. Expansion will be primarily based on M&A and
potential municipal projects, rather than new larger clinic openings.
Additionally, OP recently announced its retreat from expansion plans. These
reduce the risk of added capacity burdening profitability in the mid-term.

Upgraded to “Buy” (“Hold”), TP intact at EUR 12

On our estimates Pihlajalinna now trades 8.6x and 7.2x EV/EBITDA in FY19-20E,
which translate into 12-17% discount to the peer group. We consider valuation
attractive against improving growth and profitability prospects and upgrade to
“Buy” (“Hold”) with an intact TP of EUR 12.



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MARIMEKKO - VERY STRONG Q3; DISTRIBUTES EXTRA DIVIDEND; REVISES FINANCIAL
TARGETS

01.11.2018 - 09.10 | Earnings Flash

Marimekko’s Q3 headline numbers are very strong for both revenue and profits.
The company keeps 2018E guidance intact, but the max EUR 12m limit for adj. EBIT
gives room for only EUR 1.4m adj. EBIT in Q4, which would be weaker than what
has been reached during the last two years. Extra dividend of EUR 1.25 is
proposed, and financial targets are revised.

Read more

 * Finland: revenue was EUR 17.2m vs. EUR 16.2m our expectation. Revenue grew by
   +14% y/y, split to +11% own retail (own retail LFL +9%) and +24% wholesale.
   Strong retail sales growth was implied by the guidance upgrade in Sep 2018.
   Wholesale growth of 24% was primarily due to non-recurring promotional
   deliveries.
 * International: revenue was EUR 12.7m vs. EUR 12.3m our view. Revenue
   increased by +4% y/y, driven primarily by growth in EMEA (+20%). Growth in
   APAC excl. royalties was also strong at 14%.
 * Adj. EBITDA was EUR 6.9m (margin 23.2%) vs. EUR 4.5m our view and EUR 5.2m
   consensus. The beat is driven primarily by stronger than expected revenue,
   good trend in retail sales in Finland and growth in regular-priced sales.
 * Extra dividend: Board proposes of EUR 1.25 per share.
 * New financial targets: EBIT margin 15% (prev: 10%), net debt/EBITDA max 2.0x
   (new), annual sales growth over 10% (intact), dividend at least 50% of EPS
   (intact).
 * 2018 guidance intact: revenue and adj. EBIT will increase y/y. Adj. EBIT will
   be max EUR 12m. Marimekko expects revenue to grow in Finland and in APAC.
   License revenues are expected to remain flat in 2018E. Marketing costs will
   increase.



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PIHLAJALINNA - PROFITABILITY BEATS

01.11.2018 - 08.40 | Earnings Flash

Pihlajalinna’s revenue is in line, but profitability improved more than
expected. Organic growth also now turned positive and was +1.1%, after being
negative in H1. Guidance for 2018E is intact.

Read more

 * Revenue was EUR 116m vs. EUR 117m/116m Evli/cons estimates. Revenue grew by
   17.0% y/y, of which 15.9% was due to M&A, implying organic growth of +1.1%.
   Organic growth was -1.8% in H1.
 * Adj. EBITDA was EUR 10.7m (9.2% margin) vs. EUR 9.6m/9.7m (8.2%/8.4%)
   Evli/cons estimates. Adj. EBITDA improved by EUR 1.7m y/y, of which EUR 1.6m
   came from M&A. Profitability was hurt by EUR -0.8m start-up costs related to
   new clinics, while we had incorporated EUR -0.6m. Profitability excl. the
   clinics’ impact thus improved more than we expected, supported by
   profitability improvements in occupational healthcare and higher volumes of
   diagnostics.
 * Guidance for 2018E is intact: Revenue will increase clearly from 2017 level
   (2017A: EUR 424m) especially due to M&A transactions. Adjusted EBIT is
   expected to fall short of the 2017 level (2017A: EUR 20m).





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CAPMAN - CONTINUED SOLID EARNINGS

01.11.2018 - 00.00 | Earnings Flash

CapMan’s posted good Q3 results. EBIT was EUR 4.8m vs. Evli EUR 4.1m. The exit
from Fluido significantly contributed to earnings. Net sales were EUR 7.2m (Evli
8.6m) and no larger carried interest was booked. CapMan held the first closing
of its Nordic mid cap infrastructure fund, receiving commitments of EUR 115m.

Read more

 * CapMan’s Q3 net sales amounted to EUR 7.2m, below our estimates of EUR 8.6m.
   No larger carried interest was booked in Q3. Management Company and Service
   businesses fees grew 24 % during Jan-Sep 2018.
 * EBIT in Q3 amounted to EUR 4.8m, above our estimates of EUR 4.1m. The
   Management Company business EBIT was EUR 0.8m, Service business EBIT EUR
   0.6m, Investment business EBIT EUR 3.8m, and Other EUR -0.4m. The exit from
   Fluido had a significant positive impact on Q3 earnings.
 * Capital under management by the end of Q3 was EUR 2.7b. Of the capital under
   management EUR 1.7b was attributable to real estate funds and EUR 0.8b to
   portfolio companies and EUR 0.2b in Infra and Credit.
 * The first closing of CapMan Infra’s Nordic mid cap infrastructure fund was
   held. The fund received commitments of EUR 115m. CapMan’s commitment to the
   fund is EUR 30m. Target size of EUR 300m is believed to be reached next year.



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ETTEPLAN - CONTINUED IMPROVEMENT

31.10.2018 - 09.20 | Company update

Etteplan’s Q3 results on group level were quite in line with our estimates.
Engineering services and Embedded Systems and IoT continued to improve, while
Technical documentation saw continued problems in Germany. The market outlook
remains favourable albeit with increased uncertainty. We retain our BUY-rating
with a TP of EUR 9.5 (10.0).

Read more

Continued improvements

Etteplan’s Q3 results were on group level quite in line with our expectations.
Revenue amounted to EUR 52.6m (Evli EUR 54.5m) and EBIT from business operations
EUR 4.8m (Evli EUR 4.7m). Engineering services continued on a very good track,
with sales growth of 11.4 % and an EBIT BO margin of 10.0 %. The measures to
improve profitability in Embedded Systems and IoT have shown results and the
EBIT BO margin increased to 9.8 % (7.4 % in Q3/17). Technical documentation was
weighed down by continued challenges in Germany, with the EBIT BO margin at 8.0
%.

Market outlook remains favourable, increased uncertainty

No major changes were noted in the market outlook, although uncertainty has
increased, and Etteplan expects a favourable end of the year. We have not made
any major changes to our estimates. We remain cautious to improvements in
profitability in Engineering services due to already solid levels. We expect
improvement in Technical documentation as the problems in Germany appear to have
been alleviated. Embedded Systems and IoT has seen improvements but still lies
below previously achieved levels. The availability of professionals in the area
is limiting growth and we see continued M&A activity in the area as likely. Our
2018 net sales and EBIT BO estimates are EUR 239.5m and EUR 22.9m respectively.

BUY with a target price of EUR 9.5 (10.0)

Etteplan trades on a ~20 % and ~15% discount on 19E EV/EBITDA and P/E, which we
do not consider as justifiable. We retain our BUY-rating with a target price of
EUR 9.5 (10.0)



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INNOFACTOR - STILL A LOT TO PROVE

31.10.2018 - 00.00 | Company update

Innofactor’s Q3 results were below our estimates, mainly on profitability, with
EBIT at EUR -1.2m (Evli -0.3m). Focus lies on reorganization and with the
measures taken Innofactor expects a positive impact on EBITDA of 2.4m from 2019
onwards. We retain our HOLD rating with a TP of EUR 0.55 (0.70).

Read more

Profitability affected by lower sales

Innofactor’s Q3 results fell below our estimates. Revenue amounted to EUR 13.8m
(Evli 14.2m) while EBIT fell to EUR -1.2m (Evli -0.3m). The low profitability
was at least partly due to the lower sales. Innofactor completed cooperation
negotiations and combined with reorganizations expects a positive impact on
EBITDA of EUR 2.4m from 2019 onwards. Reorganizations are expected to contribute
EUR 1.0m, to be achieved through reorganizing tasks, enabling more customer work
hours. The Finnish delivery organization is being scaled down from seven to four
organizational levels. The Finnish organization will further be reorganized into
smaller self-organized teams. To our understanding one key goal is to enhance
decision making especially in sales.

Profitability upside potential, sales growth a question mark

We expect EBITDA to turn positive in Q4, which typically is a stronger quarter
for Innofactor. Our 2018 sales and EBITDA estimates are at EUR 65.1m and EUR
0.3m respectively. The organizational actions being taken in our view give
prerequisites for improved profitability in 2019. The scaling down of the
organization alone should prove beneficial, as the organization has been growing
faster than sales. We remain conservative on sales growth in 2019, as we expect
the changes to have some negative short-term impact and with the sales track
recently Innofactor still has a lot to prove.

HOLD with a target price of EUR 0.55 (0.70)

The reorganization measures, if successful, would provide some breathing room
for Innofactor, but pick-up in sales in our view remains a key driver for
normalizing profitability. We retain our HOLD-rating with a target price of EUR
0.55 (0.70).



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ETTEPLAN - IN LINE WITH EXPECTATIONS

30.10.2018 - 13.20 | Earnings Flash

Etteplan posted solid Q3 results, largely in line with our estimates. Net sales
amounted to EUR 52.6m (Evli 54.5m) and EBIT from business operations was EUR
4.8m (Evli 4.7m). Development was good in Engineering services and Embedded
Systems and IoT, while Technical documentation continued to see some weakness.
The demand situation is expected to remain good throughout the end of year
despite some market uncertainty.

Read more

 * Net sales in Q3 were EUR 52.6m (EUR 47.1m in Q3/17), slightly below our
   estimates (Evli EUR 54.5m). Sales growth in Q3 was 11.6 % y/y.
 * EBIT in Q3 was EUR 4.4m (EUR 2.9m in Q3/17), slightly above our estimates
   (Evli EUR 4.2m), at an EBIT-margin of 8.3 %.
 * Engineering services: Net sales in Q3 were EUR 28.8m vs. EUR 29m Evli. EBIT
   BO in Q3 was EUR 2.9m vs. EUR 2.5m Evli. The MSI-% in Q3 was 52 % compared to
   53 % in Q3/17.
 * Embedded systems and IoT: Net sales in Q3 were EUR 13.6m vs. EUR 14.4m Evli.
   EBIT BO in Q3 was EUR 1.3m vs. EUR 1.2m Evli. The MSI-% in Q3 was 46 %
   compared to 53 % in Q3/17.
 * Technical documentation: Net sales in Q3 were EUR 10.1m vs. EUR 11.1m Evli.
   EBIT BO in Q3 was EUR 0.8m vs. EUR 1m Evli. The MSI-% in Q3 was 74 % compared
   to 78 % in Q3/17.
 * The demand situation is expected to remain good in Q4 despite some market
   uncertainty.



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INNOFACTOR - EBIT MISSES ESTIMATES

30.10.2018 - 09.20 | Earnings Flash

Innofactor’s Q3 results were below our estimates. Net sales amounted to EUR
13.8m (Evli 14.2m) while EBIT was weak, at EUR -1.2m (Evli -0.3m), partly due to
the lower net sales. Innofactor concluded co-operation negotiations and
reorganizations, expecting a total positive impact on group EBITDA of EUR 2.4m
beginning in 2019.

Read more

 * Net sales in Q3 amounted to EUR 13.8m, slightly below our estimates of EUR
   14.2m. Sales growth in Q3 was -2.5 % y/y.
 * EBIT in Q3 was EUR -1.2m, falling below our estimates (Evli EUR -0.3m), at an
   EBIT-margin of -8.6 %. The weaker profitability was partly due to lower than
   expected sales.
 * Guidance (updated 8.10.2018) intact: Innofactor’s net sales are expected to
   remain at 2017 levels (EUR 65.7m) and operating margin (EBITDA) in 2018 is
   estimated to be weaker than in 2017 (EUR 1.3m) but positive.
 * Operating cash flow during Jan-Sep 2018 was EUR -1.9m.
 * Active personnel at the end of the period 591 (2017: 623)
 * Innofactor concluded co-operation negotiations and reorganizations, expecting
   a total positive impact on group EBITDA of EUR 2.4m beginning in 2019.



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VERKKOKAUPPA.COM - BACK TO DOUBLE-DIGIT GROWTH

29.10.2018 - 09.00 | Company update

Verkkokauppa.com returned to double-digit growth in Q3 as we expected. The
company also delivered a surprisingly strong gross margin, considering active
campaigning by competitors during the quarter. However, competition is seen
tightening even further, which keeps the outlook somewhat uncertain when going
into the seasonally strong Q4. We continue to see the shares quite fairly valued
at present and hence retain “Hold” with TP of EUR 4.7 (4.5).

Read more

Back to double-digit growth, as expected

Verkkokauppa.com returned to double-digit 11% revenue growth in Q3, after only
3% growth in H1. Growth was in line with expectations. Wholesale volumes were
broadly flat as guided and no longer provided headwind as in H1. Revenue growth
is guided to continue at a stronger level in Q4 than in H1. We expect revenue
growth of 15% in Q4, supported by both Raisio and underlying growth.

Surprisingly strong GM despite tightening competition

Verkkokauppa.com’s earnings beat in Q3 was fully driven by the gross margin,
which improved to 14.9% from last year’s very low level of 13.2%. We expected
14.3%. Stronger than expected margin improvement came despite competition
tightened from Q2 as we expected. The company responded to increased campaigning
by competitors as expected, but managed its campaigns more efficiently and had
better terms with suppliers. Also, a part of the actions to boost sales was
marketing, which was visible in OPEX.

“Hold” with TP of EUR 4.7 (4.5)

Our estimates are slightly up for Q4 and FY19-20E after the Q3 report. On our
base case estimates Verkkokauppa.com trades 14x,11x and 10x EV/EBIT in FY18-20E.
We see valuation as fairly neutral at present and hence retain “Hold” rating
with TP of EUR 4.7 (4.5) for the shares.



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CONSTI - PROFITABILITY REMAINS A CONCERN

29.10.2018 - 08.45 | Company update

Consti’s third quarter results were affected by lower profitability in a limited
number of projects, with group EBIT at EUR -1.4m. The weaker profitability was
largely related to electrical installations and project delays leading to
additional costs from catching up with timetables and in our view of more
temporary nature. Sales growth continued at a slower pace, as Consti has
tightened tendering criteria. We retain our HOLD-rating with a target price of
EUR 7.5 (8.2).

Read more

A fraction of projects driving weak profitability

Consti’s third quarter EBIT was EUR -1.4m, affected by lower than expected
profitability in project deliveries of the technical installations business
included in the Technical Building Services business area and the housing repair
business included in the Building Facades business area. The problems related
largely to electrical installations and projects being delayed, resulting in
additional catch up costs. The issues concern a limited number of projects, of
which most will be completed during 2018. The profitability issues in our view
are more of a temporary nature. Of some concern is the communication between
worksites and management, as the problems appear to have come as a complete
surprise.

Seeking to further tighten project tendering criteria

Consti’s Q3 sales growth continued at a slower pace, at 1.4 % y/y, as Consti has
been tightening project tendering criteria. Consti will also continue to tighten
criteria, with building purpose modification projects being one area under
scrutiny, having seen a EUR 4.0m negative impact from two such projects during
2018.

HOLD with a target price of EUR 7.5 (8.2)

Our estimates post-Q3 remain unchanged. We remain conservative on Q4
profitability due to the project issues but see potential for notable
improvement. We retain our HOLD-rating with a target price of EUR 7.5 (8.2).



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FINNAIR - COMPETITION AND FUEL CONCERNS

29.10.2018 - 08.40 | Company update

Finnair’s Q3 earnings were somewhat better than expected, but guidance for FY18E
adj. EBIT was cut to reflect increased competition and fuel. Combination of
increased competition and higher fuel price keeps the outlook tough. We retain
“Hold” rating with TP of EUR 6.8 intact.

Read more

Guidance cut due to increased competition and fuel

Finnair cut its guidance for adj. EBIT. Company now expects adj. EBIT to
somewhat weaken vs. be flat previously. Guidance was cut to reflect increased
competition, especially in the Nordics, and the fuel price increase. Increased
capacity by competitors was visible in Q3 traffic and suggests yield compression
is likely to continue at least in European traffic in the short-term, despite
fuel price has been increasing for almost two years now.

Fuel price looks to be moving up further in Q4

Fuel price looks to be moving up further in Q4, with USD spot prices in October
averaging 8% higher compared to the average spot of Q3. Current spot price is 4%
higher than the Q3 average.

Challenging outlook – “Hold” intact

On our estimates Finnair trades at an EV/EBITDA discount, but at a P/E premium
to its primary peers. On P/B Finnair trades 0.8x in FY18-19E, or 1.0-0.9x when
the EUR 200m hybrid removed from equity, while generating ROCE of ~7-8% in
FY18-19E, slightly below our WACC. We think valuation does not look too
attractive, considering increasing competition and fuel. We retain “Hold” rating
with TP of EUR 6.8. Our TP values the shares at a discount to Finnair’s 3yr
historical average NTM EV/EBITDA, but close to par with P/E on our FY19E
estimates.



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CONSTI - PROFITABILITY BURDENED BY OLDER PROJECTS

26.10.2018 - 09.15 | Earnings Flash

Consti had pre-announced Q3 revenue and EBIT of EUR 78.9m and EUR -1.4m
respectively. Profitability was weakened by a limited number of projects
launched in 2016 and 2017 within the Technical Building Services and Building
facades business areas. Revenue growth continued at a slow pace, but the order
backlog remains strong, at EUR 270m.

Read more

 * Consti had pre-announced Q3 revenue and EBIT on October 17th
 * Net sales in Q3 were EUR 78.9m (EUR 77.8m in Q3/17). Sales growth in Q3 was
   1.4 % y/y.
 * EBIT in Q3 was EUR -1.4m (EUR -0.8m in Q3/17), at an EBIT-margin of -1.8 %.
   The weaker profitability concerns a limited number of projects launched in
   2016 and 2017 in project deliveries within the Technical Building Services
   and Building Facades business areas, with the majority of projects to be
   completed in 2018.
 * Free cash flow was negative, at EUR -3.5m (2.9m).
 * Technical Building Services: Net sales in in Q3 were EUR 25m vs. EUR 23.9m
   Evli.
 * Renovation Contracting: Net sales in in Q3 were EUR 23.8m vs. EUR 22.7m Evli.
 * Building Facades: Net sales in in Q3 were EUR 34.1m vs. EUR 36.4m Evli.
 * Order backlog at EUR 270m, up 35.9 % y/y.
 * Guidance intact, Consti estimates that its operating result for 2018 will
   grow compared to 2017.



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VERKKOKAUPPA.COM - PROFITS BEAT

26.10.2018 - 08.30 | Earnings Flash

Verkkokauppa.com delivered a profit beat on revenues that were as expected.
Compared to our estimates the beat is fully driven by better than expected gross
margin. OPEX were in line. Guidance for 2018E is kept intact.

Read more

 * Q3 revenue was EUR 117m vs. EUR 117m Evli and EUR consensus. Sales grew by
   11%. Wholesale volumes were broadly flat y/y. Market growth was 2% in
   Jul-Sep, according to GfK.
 * Q3 gross profit was EUR 17.4m (14.9% margin) vs. EUR 16.5m (14.1%) Evli.
 * Q3 adj. EBIT was EUR 3.4m (2.9% margin) vs. EUR 2.3m/2.0m (2.0%/1.7%)
   Evli/cons estimates.
 * 2018 guidance intact: revenue is expected to be EUR 460-500m and adj. EBITDA
   between EUR 11-14m. Raisio store opening costs will mainly accrue in H1’18.
   Wholesale revenue in H2 is expected to be more in line with the previous
   year. Revenue growth and profitability will be clearly higher in H2’18 vs.
   H1’18.
 * CEO comments: “The company expects the market to get even tougher because of
   flat summer sales for the whole sector.”





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SRV - MOVING TOWARDS POSITIVE PROFITABILITY

26.10.2018 - 08.10 | Company update

SRV’s Q3 results were slightly better than we expected. Revenue fell slightly
short of our estimates due to lower revenue in business construction.
Profitability was better than expected, mainly due to a smaller impact of the
REDI project than we had anticipated. Further cost exceeding in the project is
still possible but unlikely and with the project having been completed the
potential additional costs should be significantly smaller. We retain our HOLD
rating with a target price of EUR 2.4 (2.7).

Read more

Q3 slightly better than anticipated

SRV’s Q3 revenue came in at EUR 208.4m (Evli 216.8m), while the operative
operating profit amounted to EUR -3.1m (Evli EUR -6.9m). The revenue was mainly
in line with expectations but fell short of our estimates in business
construction in Finland. The profitability beat was mainly due to the negative
impact of the REDI project being smaller than we had anticipated. SRV’s order
backlog remained solid at EUR 1,678.5m, up 9.3 % y/y. SRV made agreements for
releasing capital tied on the balance sheet for approx. EUR 50m, of which around
EUR 20m will materialize in Q4 along with an additional goal of EUR 20-30m.

Estimates revisions minor

We have made minor changes to our estimates, with our 2018E revenue and
operative operating profit figures at EUR 959.3m (prev. 960.5m) and EUR -2.3m
(prev. -5.2m). SRV expects revenue in 2018 to decline compared to 2017 (EUR
1,114.4m) and the operative operating profit to be negative. We have also
checked down our 2019E sales growth estimates by approx. 2 percentage points,
mainly in business construction in Finland.

HOLD with a target price of EUR 2.4 (2.7)

On our estimates SRV trades at EV/EBIT and P/E 2019E of 10.8x and 7.7x
respectively. SRV trades at a discount to peer P/E 2019E multiples, which we
currently consider reasonable following the profitability issues. We retain our
HOLD-rating at a target price of EUR 2.4 (2.7).



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FINNAIR - GUIDANCE CUT

25.10.2018 - 09.40 | Earnings Flash

Finnair’ Q3 adj. EBIT came in at EUR 108m, above our estimate (EUR 102m) and
consensus (EUR 105m). However, Finnair cut its FY18E guidance and now expects
adj. EBIT to be somewhat below last year’s level of EUR 170m, vs. flat
previously. Finnair states it is experiencing increased competition in its main
markets. We have expected EUR 159m adj. EBIT in 2018E, ie below last year’s EUR
170m. Consensus has been EUR 160m. However, separately released discontinuation
of incentive plan for pilots will have a positive EUR 11m adj. EBIT impact in
Q4, which with new guidance seems to imply underlying estimates for Q4 adj. EBIT
may be too optimistic.

Read more

 * Q3 adj. EBITDAR was EUR 184m vs. EUR 177m our view.
 * Q3 adj. EBIT was EUR 108m vs. EUR 102m/105m Evli/cons views. Compared to our
   estimates the beat comes from lower fuel and staff costs in the quarter.
 * Absolute costs: actual fuel cost (incl. hedging) was EUR 163m vs. EUR 166m
   our view. Staff costs were EUR 109m vs. 116m our view. All other OPEX
   combined were EUR 363m vs. 359m our view.
 * Unit costs: CASK was 6.01 eurocents vs. 6.06 our view, while CASK ex fuel was
   4.60 eurocents vs. 4.62 our view. CASK in fixed FX and excl. fuel declined by
   6.4% y/y. After Q1-Q3’2018 CASK in fixed FX and excl. fuel is down by 6.9%.
 * 2018E guidance cut: Finnair expects capacity growth at least 15% (intact),
   passenger volume growth of 12- 13% (prev: in line with capacity growth) and
   revenue growth of 10-11% (prev: slightly lower than capacity growth). Adj.
   EBIT is expected to be somewhat below last year’s level of EUR 170m (prev: to
   remain broadly flat). Finnair is experience increased competition in its main
   markets. We have expected 11% revenue growth and adj. EBIT of EUR 159m for
   2018E.



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VAISALA - LEOSPHERE AND ORDER INTAKE REFLECT ON W&E ESTIMATES

25.10.2018 - 09.15 | Company update

In Q3’18, Weather and Environment (W&E) order intake was y/y lower for the
second consecutive quarter, partly due to the absence of large orders. Vaisala
maintained its cautious view on the Chinese demand for traditional weather
observation solutions during 2018. We have updated our estimates particularly
for W&E. On our estimates, the positive net sales and EBIT margin impact of the
recently acquired Leosphere is partly offset by more cautious growth estimates
for the rest of W&E. We maintain HOLD rating with a TP EUR 19 (21).

Read more

Timing of W&E projects caused some surprises

After the Q2’18 result, Vaisala estimated that the high share of project revenue
will negatively affect W&E’s profitability during H2’18. However, Q3’18 turned
out to be an exception: the timing of W&E projects resulted in weaker net sales
but supported gross margin and EBIT margin, as the share of typically low margin
project deliveries fell to 25% (37% in Q3’17) in W&E. According to Vaisala,
project gross margins also happened to be better y/y.

Low W&E order intake continued in Q3’18

In Q3’18, W&E order intake amounted to 48.7 MEUR (-33% y/y) which was the second
consecutive weak quarter, even when we adjust for the 6.3 MEUR Vietnamese
contract order in Q3’17. According to Vaisala, the demand for W&E products in
China has not changed significantly from Q2’18 to Q3’18. The company repeated
its view that the Chinese demand for traditional weather observation equipment
is expected to decline moderately y/y in 2018. Vaisala sees that the main
Chinese customer for traditional weather stations may have saturated its
network, which could explain the weaker demand in 2018. Meanwhile, Vaisala sees
that sales to Chinese airports are a growing business.

HOLD maintained with a TP of EUR 19 (21) per share

We have updated our estimates, which now reflect the acquired Leosphere. In
addition, we lower W&E sales growth estimates for other segments due to the
continued weak development in order intake and continued cautiousness regarding
the Chinese market. In our estimates the weak W&E order intake partly offsets
the estimated growth boost from Leosphere. Our 2019E estimates and peer EV/EBIT
multiples imply a value of 18.8 EUR per share when we adjust for Vaisala’s net
debt. We maintain HOLD rating with a target price of EUR 19 (21) per share.



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SRV - EBIT ABOVE EXPECTATIONS

25.10.2018 - 09.10 | Earnings Flash

SRV’s Q3 results were slightly better than expected. Although revenue fell
slightly short of our estimates, EUR 208.4m vs. Evli EUR 216.8m, EBIT came in
above our estimates, at EUR -5.7m vs. Evli EUR -8.4m. The earnings impact of
REDI was slightly smaller than we had anticipated in Q3. SRV expects a positive
operative operating profit and cash flow in Q4/18.

Read more

 * SRV’s revenue in Q3 amounted to EUR 208.4m, compared to EUR 216.8m/233.7m
   Evli/cons. Sales declined 22 % y/y.
 * EBIT in Q3 was EUR -5.7m compared to EUR -8.4m/-7.6m Evli/cons. International
   Operations stood for EUR -3.7m of EBIT. The EBIT-margin in Q3 was -2.7 %. The
   operating operative profit amounted to EUR -3.1m vs. EUR -6.9m Evli.
 * Order backlog at EUR 1,678.5m, up 9.3 % y/y.
 * Negative impact of the REDI project on earnings during Jan-Sep 2018 was EUR
   29.7m, and EUR 9.4m in Q3.
 * In its preliminary outlook SRV expects the operative operating profit and
   cash flow to be positive in Q4.
 * Operations Finland: Business construction revenue EUR 159.1m (Evli 167.1m),
   housing construction revenue EUR 47.4m (Evli 48.2m). Operative operating
   profit EUR -1.8m (Evli -4.7m)
 * International operations: Revenue EUR 1.8m (Evli EUR 1.5m) and operative
   operating profit EUR -1.1m (Evli EUR -1.2m)
 * The completion of the REDI Majakka housing project I expected to be delayed
   from May 2019 to June-July 2019.



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TOKMANNI - DELIVERING LFL GROWTH

25.10.2018 - 08.00 | Company update

Despite adj. EBITDA miss Tokmanni’s Q3 report looked quite good overall, with
solid LFL growth, upgraded guidance and stable gross margin. Sourcing did not
improve, but work continues. More efficient sourcing remains key to our
investment case in the mid-term. We think valuation looks attractive against the
margin/sourcing improvement potential, and hence retain “Buy” rating with TP of
EUR 9.

Read more

Continued LFL growth prompted a revenue guidance upgrade

Tokmanni delivered 4% LFL growth in Q3 vs. our 2% expectation, and thereby
continued good performance from H1. Assortment improvements and investment in
prices were mentioned as positive contributors, as earlier. Continued LFL growth
improves trust on own actions yielding results and prompted a revenue guidance
upgrade for 2018E.

Adj. EBITDA missed due to OPEX

Despite a sales beat adj. EBITDA missed estimates in Q3, driven by OPEX. Store
refurbishments and changes to the store network burdened OPEX, which increased
slightly as % of revenue in Q3 vs. decreased in H1. Management was not happy
with the development and seeks to turn the trend.

More efficient sourcing remains key to our investment case

Tokmanni’s gross margin improved slightly in Q3 and was broadly as we expected.
Yet the share of direct imports and PL products of sales was flat in Q3. More
efficient sourcing remains key to our investment case in the mid-term, as
without this Tokmanni is unlikely to meet the gradual gross margin improvement
we have incorporated in our estimates for 2019-2020E.

Estimates largely unchanged – “Buy” retained, TP EUR 9

Our estimates remain largely unchanged after Q3. On our estimates Tokmanni is
valued at par to its Nordic peers in FY19- 20E on EV/EBITDA, but at a discount
on EV/EBIT and EV/FCF. Our DCF model yields fair value of EUR 11, but this is
with a 6.5% terminal EBIT margin assumption that has not been reached
historically – using 5% our DCF model would yield a fair value of EUR 9 per
share (company has reached ~6% each year in 2013- 2016). We retain “buy” rating
with TP of EUR 9.



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TOKMANNI - ADJ. EBITDA MISS DESPITE REVENUE BEAT; UPGRADES GUIDANCE

24.10.2018 - 09.00 | Earnings Flash

Tokmanni beat estimates on revenue, but missed them on adj. EBITDA. Stronger
revenue is driven by LFL growth of 4.0% vs. our 2.0% expectation, whereas the
adj. EBITDA miss is driven by higher than expected OPEX. Tokmanni upgrades its
guidance after the third quarter for revenue: revenue growth will be “strong”
(prev: “good”) in 2018, based on new openings and “good” (prev: “low
single-digit”) LFL growth. Adj. EBITDA margin guidance is intact. The change in
guidance wording improves trust for seasonally strong Q4, in our view. Despite
the adj. EBITDA miss we consider the report to be fairly good, due to stronger
LFL growth and stable gross margin.

Read more

 * Q3 revenue was EUR 211m vs. EUR 207m/208m Evli/cons, 1-2% above estimates.
   Revenue grew by 7.8% y/y, driven by 4.0% LFL growth (Evli exp. 2.0%) and new
   openings. Good LFL growth is attributed to assortment improvements and
   investments in prices.
 * Q3 adj. gross margin was 34.2% vs. 34.4% Evli estimate. the share of direct
   imports and PL products of total sales remained flat y/y.
 * Q3 adj. fixed costs in total were EUR 54.9m (26.1% of revenue) vs. EUR 52.6m
   (25.4% of sales) Evli view.
 * Q3 adj. EBITDA was EUR 18.2m (8.6% margin) vs. EUR 19.6m (9.5%) Evli and EUR
   19.2m (9.2%) consensus.
 * 2018 guidance upgraded: revenue growth will be “strong” (prev: “good”) in
   2018, based on new openings and “good” (prev: “low single-digit”) LFL growth.
   Profitability (adj. EBITDA margin) is expected to increase in 2018E (intact).
   CAPEX will be at the level of depreciations in 2018.



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CIBUS NORDIC - INITIATING COVERAGE WITH BUY

23.10.2018 - 09.05 | Company report

We initiate coverage on Cibus with BUY rating and target of SEK 120. We expect
the grocery retail portfolio to generate stable and predictable inflation-linked
cash flows while from a valuation standpoint there is room for further yield
compression.

Read more

Solid grocery retail portfolio with anchoring tenant strategy

Cibus’ property portfolio is largely occupied by three leading Finnish
daily-goods retailers. A natural outcome due to the market’s oligopolistic
structure, we view the portfolio’s tenant risk as negligible. We expect the
average lease duration to remain at its current level of ca. 5 years and the
occupancy rate to stay at 95%. The portfolio’s rental income is fully linked to
inflation while the properties’ operating costs are mostly borne by the tenants
owing to the contracts being largely net lease in nature.

We like the portfolio’s large exposure to supermarkets

In our view the supermarket-size store is the most attractive and resilient type
of daily-goods store, offering a good balance between logistic efficiency and
daily convenience. 43% of the portfolio’s rental income is attributable
supermarkets spread around Finland, while another 25% is contributed by discount
stores located for the large part in Southern Finland.

Groceries to manage e-commerce in cities and rural areas

In our view e-commerce currently represents a manageable tail risk for grocery
retailers. The economics of grocery e-commerce remain challenging, especially in
a country as sparsely populated as Finland. We think supermarkets as
particularly well-positioned to weather the e-commerce threat and even benefit
owing to their status as a distribution network.

Initiating coverage with a BUY rating and TP of SEK 120

We expect Cibus’ income to grow in-line with the Finnish CPI and property
expenses to stay at ca. 7%, paving the way for a highly predictable financial
performance. As the shares currently trade slightly below par in terms of
EV/GAV, we see potential for both price gain as well as solid income from
dividends.



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TALENOM - SOLID QUARTER, INVESTMENTS AHEAD

23.10.2018 - 09.00 | Company update

Talenom’s Q3 profitability beat expectations. Based on Jan-Sep profitability
development potential for guidance beat is strong but investments in Q4 are
expected to affect profitability. We anticipate a further impact during early
2019 and expect slower EPS growth. Continued increases in new customers support
continued robust sales growth. Our 2019E estimates do not give significant
support for valuation increases and we retain our HOLD-rating with a target
price of EUR 18.5 (18) per share.

Read more

Solid earnings, investments to impact from Q4

Talenom’s Q3 results beat profitability expectations, with EBIT at EUR 1.9m vs.
EUR 1.0m Evli, improving some 136 % y/y. Sales were in line with expectations,
at EUR 11.1m, growing 19.8 % y/y. With Jan-Sep EBIT at EUR 7.1m, the FY 2018
guidance of EUR 7.4-8.0m appears conservative, but investments into the
additional services are expected to impact in Q4. We anticipate the investments
to continue to show during early 2019. We expect profitability to remain at
solid levels but with slower EPS growth, with our 2018E and 2019E EPS growth
estimates at 55 % and 6 % respectively.

No signs of larger sales growth slow down

We expect sales growth to remain good, supported by growth in new customers and
pick-up in the sales of additional services, mainly in staff leasing. We have
mainly made minor estimates adjustments post-Q3 but increase our 2019E sales
growth estimates by 2 percentage points. We also raise our DPS estimates, with
our FY 2018E estimate at EUR 0.45. Our 2018E sales and EBIT estimates are at EUR
49m and EUR 7.9m respectively.

HOLD with a target price of EUR 18.5 (18)

We retain our HOLD rating with a target price of EUR 18.5 (18). On our estimates
and target price Talenom’s 2019E target P/E and EV/EBIT are at 20.5x and 17.3x
respectively and do not give support for significant valuation increases.



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TALENOM - CLEAR EARNINGS BEAT

22.10.2018 - 13.45 | Earnings Flash

Talenom earnings were clearly better than expected. Net sales in Q3 were in line
with our estimates, at EUR 11.1m (EUR 10.9m/11.0m Evli/cons.). Profitability
beat both our and consensus estimates, with EBITDA at EUR 3.1m compared to EUR
2.2m/2.3m Evli/cons.

Read more

 * Talenom’s net sales in Q3 amounted to EUR 11.1m, compared to EUR 10.9m/11.0m
   Evli/cons. Sales growth amounted to 19.8 % y/y.
 * The revenue from additional services during Jan-Sep 18 amounted to EUR 2.4m,
   with growth of 66 % to the comparison period.
 * EBITDA in Q3 was EUR 3.1m compared to EUR 2.2m/2.3m Evli/cons. EBITDA
   improved 59 % y/y. The EBITDA-margin in Q3 was 27 %.
 * EBIT in Q3 was EUR 1.9m compared to EUR 1.0m/1.1m Evli/cons. The EBIT-margin
   in Q3 was 16.6 %.
 * Net investments in Q3 were EUR 1.6m compared to EUR 1.6m in Q3/17.
 * Talenom’s guidance was kept intact, expecting sales to grow clearly faster
   than in 2017 (12.1 %) and the EBIT to be between EUR 7.4-8.0m.



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RAUTE - INITIATING COVERAGE WITH HOLD

22.10.2018 - 09.30 | Company report

In the last 3 years, Raute’s strong performance has been largely driven by
European investment activity. We estimate that the activity normalizes in 2019,
which reflects negatively on Raute’s net sales and EBIT-% in 2019-2020.
Meanwhile, we estimate that the share of technology services grows and drives
Raute’s long-term growth and profitability. We initiate coverage of Raute with a
HOLD rating and a target price of EUR 27.0 per share. The rating and target
price are based on Raute’s historical valuation and our DCF model.

Read more

Recent growth driven by project deliveries to Europe

In 2017, 67% of Raute’s net sales was project sales which are highly cyclical
and drive Raute’s EBIT-% together with fixed costs. During the last 3 years,
Raute’s sales and EBIT have hit new records, largely driven by European
investment activity. We estimate that order intake from Europe normalizes in
2019 since growth in the European construction output is estimated to decelerate
in 2018. As a result, we estimate y/y declining net sales and EBIT-% in 2019 and
2020.

We estimate that tech services drive long-term growth

In 2021-2023, we estimate that Raute’s net sales grow at a CAGR of 3.6%, driven
by growth in technology services (5.0% CAGR). Raute has not disclosed the
profitability of technology services but, based on peer data, we estimate that
the increasing share of services supports Raute’s long term EBIT-%. In contrast,
we estimate that project sales grow at a CAGR of 2.5%, limited by slow GDP
growth in developed economies and challenging competitive environment in
emerging economies.

HOLD with a target price of EUR 27.0 per share

In our valuation approach, we emphasize 2020 estimates since we see that they
represent Raute’s performance at a neutral stage of the investment cycle. On our
estimates, Raute’s 2020E EV/EBIT amounts to 9.7x. This is clearly above the
2012-2017 median trailing 12m EV/EBIT of 7.0x and limits valuation upside, even
though the growing share of technology services reduces volatility and risks.
Meanwhile, our DCF model implies EUR 28.0 per share, assuming a 6.5% terminal
EBIT margin.



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ETTEPLAN - UPGRADE TO BUY

22.10.2018 - 00.00 | Preview

Etteplan reports Q3 earnings on October 30th. Etteplan has apart from smaller
problems in the Technical documentation and Embedded Systems and IoT business
areas seen steady progress and we do not expect Q3 to have changed the trend.
Profitability in Engineering Services has reached solid levels and we expect to
see margin development slowing down in the near future. With recent share price
development valuation looks more attractive. We upgrade to BUY (HOLD) with a TP
of EUR 10.

Read more

Profitability at healthy levels, still room for improvement

Etteplan’s EBIT from business operations margin improved to 9.7 (8.6 in Q2/17)
per cent in Q2/18, driven by profitability developments in Engineering Services,
while margins in Technical documentation and Embedded Systems and IoT saw
flattish development y-on-y. The EBIT BO margin in Engineering services reached
10.7 % and has according to management reached solid levels. We expect margin
improvement in Embedded Systems and IoT due to a weaker comparison period. In
Technical documentation delays in a significant project delivery has impacted on
margins and we expect this to still have some effect on Q3.

Seasonally slower quarter

We have not made changes to our estimates ahead of Q3. Market conditions have
remained favorable and along with the acquisition of Eatech we expect continued
good growth in Q3. Our net sales and EBIT BO estimates for Q3 are EUR 54.5m and
EUR 4.7m respectively.

BUY (HOLD) with a target price of EUR 10

Following recent share price development valuation again looks more favourable.
We upgrade to BUY (HOLD) with a target price of EUR 10.



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VERKKOKAUPPA.COM - ESTIMATES CUT AHEAD OF Q3

12.10.2018 - 09.00 | Preview

We cut estimates ahead of Q3 on anticipation of tighter competition. Peer
multiples have also dropped notably since our latest update in mid-Aug. We
conclude risk/reward is still not attractive enough, and keep “Hold” rating
intact.

Read more

Revenue growth has been guided to improve in H2

Verkkokauppa.com reached only 3% revenue growth in H1 as wholesale volumes
declined significantly compared to last year. Market growth was also limited in
H1 at ~2%, according to GfK. We understand market growth in Q3 has offered no
better tailwind than in H1. However, in H2 wholesale volumes should no longer
give headwind as they have been guided flat in H2. We expect revenue growth to
improve to 11% in Q3 from the 3% in H1, driven primarily by the new store in
Raisio but also by slight underlying growth. Stronger growth has been guided for
H2.

Competition seems to have intensified during Q3

Based on a talk with management intensity of competition seems to have increased
during Q3 with more active campaigning by competitors. Verkkokauppa.com has
repeatedly reminded that it stands ready to respond should pricing tighten and
to use price as tool to speed up growth. We expect a modest gross margin of
14.1% in Q3, which is better than last year’s multi-year low of 13.1%, but
slightly below 14.3% of Q2.

Raisio to continue burdening margins in H2

Verkkokauppa.com’s new store in Raisio had a somewhat disappointing start with
higher than expected OPEX and slower than anticipated ramp-up. The company has
stated it will continue to invest in prices and OPEX to boost the store in H2.

Estimates cut ahead of Q3 – “Hold” intact, TP EUR 4.5 (5.7)

We have cut estimates and expect Q3 revenue of EUR 117m with adj. EBITDA of EUR
2.6m. Our FY18E adj. EBITDA estimate is down by 6%. Corresponding FY19-20E
estimates are down by 3%. Peer multiples for FY18-20E have also dropped by
~10-15% since our latest update in mid-Aug. We reflect lower estimates and peer
valuation in our scenario analysis and conclude risk/reward is still not
attractive enough, considering there is little room for disappointments in H2
for guidance to hold, and as the risk of Amazon remains an overhang on the
stock.



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TOKMANNI - LFL GROWTH SHOULD NORMALIZE

11.10.2018 - 09.00 | Preview

Tokmanni will report its Q3 business review on October 24th. In Q3 comparables
no longer provide tailwind as in H1, which should make the quarter more normal
and better representative of how assortment improvements and other development
actions yield results. Our estimates, rating and TP are intact ahead of the Q3
report.

Read more

Non-grocery market growth figures indicate softer demand

PTY statistics indicate the non-grocery market grew by -4.2% in July and by
-1.4% in August. Still in H1 non-grocery market grew by +1.5%. PTY statistics
thus seem to indicate somewhat softer demand in the market in Q3 vs. H1.

We expect positive LFL growth to continue from H1

Tokmanni delivered 7.0% LFL growth in H1, supported by weak comparables, better
weather, assortment improvements and somewhat more active take on campaigning
and their better management. In Q3 comparables no longer help and hence LFL
growth should normalize. We have incorporated LFL growth of +2.0% for Q3.

Estimates, rating and TP intact ahead of Q3

We expect revenue of EUR 207m (6.1% growth y/y, of which LFL 2.0%) and adj.
EBITDA of EUR 19.6m (EUR 16.1m y/y) in Q3. Our “Buy” case and TP EUR 9 remain
intact ahead of the Q2 report, as valuation remains attractive against the
sourcing improvement potential and related gross margin improvement potential,
in our view.



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FINNAIR - WEAKER TRAFFIC, MORE EXPENSIVE FUEL

10.10.2018 - 09.00 | Preview

Finnair’s traffic performance in July-September indicate Q3 revenue of EUR 801m.
We expected EUR 814m while consensus was at EUR 816/817m. On the cost side fuel
moved up further in Q3. We expect earnings to weaken in Q3 after 15 quarters of
improvement and have cut FY18- 19E adj. EBIT estimates by ~10%.

Read more

Q3 traffic: capacity growth in line, PLF below our estimates

Finnair’s capacity (ASK) continued double-digit growth in Q3 at +14% and was
close to our +15% expectation. Sold capacity (RPK), however, grew somewhat less
than we expected at +11% vs. +14% our expectation and hence passenger load
factor (PLF) came in below our estimate at 84.5% vs. 86.5%. Unit revenue (RASK)
declined by 4.6%, ie. at about the same rate as in H1 and what we expected in
Q3. Overall, Jul-Sep traffic and revenue came in slightly below our expectations
driven by weaker PLF.

Fuel moved up and reached multi-year high at end of Q3

Jet fuel moved up further in Q3. Average price increased by +1% in USD and by
+4% in EUR compared to average price of Q2. Average price for Q3 was ~37% higher
than last year in USD and ~39% higher in EUR. Fuel reached new multi-year high
at the end of Q3. We foresee EUR 60m+ negative earnings impact from higher fuel
price in 2018E (incl. FX and hedges but excl. impact of capacity growth),
assuming price remains at the average level of Q3 for the remainder of the year.

Estimates cut

Finnair has improved its adj. EBIT for 15 straight quarters, but we expect this
trend to turn in Q3, due to higher fuel costs. We foresee Q3 adj. EBIT at EUR
102m vs. EUR 119m last year. Following estimate cuts our FY18-19E adj. EBIT
estimates are down by ~10%. With lower estimates and somewhat lower multiples
among peers, we cut TP to EUR 6.8 (8.0) and keep “Hold” intact ahead of Q3. We
think valuation still does not look too attractive considering the weakening
earnings trend.



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SRV - INITIATE COVERAGE WITH BUY

05.09.2018 - 09.00 | Company report

We initiate coverage of SRV with a BUY rating and target price of EUR 3.2. We
expect profitability to see recovery during H2/18 with the completion of the
REDI project. We expect sales growth of 14.5 % in 2019E, driven by an increase
in developer contracting housing unit completions, and an EBIT margin of 3.7 %,
supported by improved business construction profitability and a smaller foreign
exchange rate impact.

Read more

Profitability expected to see recovery in H2/18

SRV’s sales have declined during H1/18 following fewer completed developer
contracting units along with a lowered construction activity in international
operations. EBIT was negative at EUR -14.3m due to a negative impact of EUR
20.3m from exceeding costs in the REDI project along with exchange rate impacts.
Profitability is expected to see recovery during H2/18 with the completion of
the REDI project and increased housing completions.

Sales growth and profitability improvement in 2019

We expect sales to see growth in 2019, with our sales growth estimate at 14.5 %.
Growth is mainly expected from an increase in developer contracting housing unit
completions, supported by a large number of start-ups in 2017. We expect the
increased sales, along with the completion of the REDI project in 2018 and
reduced exchange rate impact from redenomination of loans to support
profitability improvements in 2019 and expect an EBIT of EUR 41.1m, at an
EBIT-margin of 3.7 %.

BUY with a target price of EUR 3.2

We initiate coverage of SRV with a BUY-rating and a target price of EUR 3.2. Our
sum-of-the-parts and DCF values are at EUR 3.8 per share. On peer 2019E EV/EBIT
SRV trades at a slight premium but taking into consideration an estimate range
for the earnings impact of a potential Pearl Plaza exit valuation looks more
attractive.



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TAALERI - GOOD OUTLOOK FOR 2018

17.08.2018 - 09.15 | Company update

Taaleri’s H1 results exceeded our estimates following higher than expected
investment income and performance fees in in Wealth Management, while Financing
saw lower profits following weaker investment income. The outlook for 2018E
looks promising following the H1 results. We retain our BUY-rating with a target
price of EUR 11.4 (11.0)

Read more

Wealth Management drives profits

Taaleri’s operating profit in H1 amounted to EUR 12.4m. Wealth Management’s
operating profit was EUR 14.1m, driven by performance fees and investment income
of EUR 5.6m and EUR 4.9m respectively. Performance fees were higher than
anticipated, as the mutual funds continued to contribute significantly despite a
weaker first half of the year in comparison to the previous year. Financing’s
operating profit was below previous year levels, at EUR 2.4m compared to EUR
7.9m in H1/17. The operating profit was affected by investment income, with
return on investment at fair value of -0.1%, as high-yield bonds saw a shaky
first half of the year. Energy’s operating profit remained negative as expected,
at EUR -0.9m, due to ramp up of the business. A new product launch remains
likely in H2/18.

Good 2018E outlook following solid Q2 results

We have revised our full-year estimates upwards following the good H1 results.
While our H2 estimates remain mostly without significant changes we have
adjusted downward our estimates for Financing to reflect an expected lower
investment income also in H2. AUM growth was stronger than expected, despite
stagnating PE funds development due to slower commitment calls, and we expect to
see AUM growth in PE funds during H2. Our 2018E sales and EBIT estimates are EUR
73.2m and EUR 23.1m respectively.

BUY with a target price of EUR 11.4 (11.0)

Following our revised estimates and a stronger than previously expected result
in 2018E we adjust our target price to EUR 11.4 (11.0) and retain our
BUY-rating.



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SUOMINEN - WAITING FOR EARNINGS TO TURN

17.08.2018 - 09.15 | Company report

Suominen has faced clear challenges in recent years and there is way to go to
reach the historical earnings level. Own efforts and Bethune’s improving outlook
support the outlook for earnings gradually turning to the better. Valuation on
2019E multiples looks moderate, but evidence of earnings turning remains to be
delivered. We retain “Hold” rating for Suominen’s shares.

Read more

Business has suffered in recent years

Capacity increases by competitors in certain product areas have had a clear
negative impact on Suominen’s business in 2016, 2017 and H1’18. Particularly
price/mix and profitability have been key issues. Suominen addresses these via
its 3P program. Some early results were delivered in H1’18. Bethune’s increasing
contribution should help in gradually turning price/mix to the better. We expect
earnings in 2018E to remain modest, in line with guidance, but expect earnings
to gradually improve in 2019-2020E, driven by both Bethune and Suominen
ex-Bethune.

Bethune’s outlook seems to be finally improving

After a lengthy period of ramp-up troubles, Suominen’s new production line in
Bethune finally reached positive gross profit towards the end of Q2’18.
Management indicated production volumes in July 2018 were good, which improves
outlook for a gradual turn finally taking place. We expect Bethune to have a
more significant topline impact from H2’18 and its gross profit contribution to
turn to positive in H2’18.

Waiting for earnings to turn - “Hold” reiterated

Suominen’s valuation looks unattractive with 2018E multiples, but on 2019E
multiples valuation looks much more moderate: on our 2019E estimates Suominen
trades 5.4x EV/EBITDA, 10.3x EV/EBIT and 13.1x P/E, which are close to
Suominen’s historical multiples. While valuation does not look particularly
challenging on 2019E estimates, evidence of earnings turning to better is needed
to justify material upside. With 2019E multiples close to historical valuation
we keep “Hold” rating intact with target price of EUR 3.4 (3.5). If Suominen was
to move towards its financial targets, there would be clear upside to valuation.



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TAALERI - CLEAR EARNINGS BEAT

16.08.2018 - 09.00 | Earnings Flash

Taaleri’s H1 results clearly beat our estimates, with income of EUR 35.2m vs.
31.9m Evli and EBIT of EUR 12.4m vs. 6.9m Evli. The earnings were attributable
to the Wealth Management segment, mainly due to investment income.

Read more

 * Net sales in H1 were EUR 35.2m (EUR 38.7m in H1/17), beating our estimates
   (Evli EUR 31.9m). The group’s continuing earnings grew seven per cent.
 * EBIT in H1 was EUR 12.4m (EUR 15.4m in H1/17), well above our estimates (Evli
   EUR 6.9m). The higher than expected earnings were attributable to the Wealth
   Management segment, where performance fees and investment income of EUR 5.6m
   and EUR 4.9m respectively were recorded, along with growth in fee income.
 * The Wealth Management segments net sales in H1 were EUR 28m vs. EUR 23.2m
   Evli and EBIT EUR 14.1m vs. EUR 6.1m Evli.
 * The Financing segments net sales in H1 were EUR 6.2m vs. EUR 9m Evli and EBIT
   EUR 2.4m vs. EUR 4.8m Evli.
 * The Energy segments net sales in H1 were EUR 1.1m vs. EUR 1.4m Evli and EBIT
   EUR -0.9m vs. EUR -0.5m Evli.
 * Net sales from other operations in H1 were EUR -1.5m vs. EUR -1.7m Evli and
   EBIT EUR -3.3m vs. EUR -3.5m Evli.
 * Assets under management at the end of H1/18 amounted to EUR 6.0m.



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VAISALA - INITIATING COVERAGE WITH HOLD

28.06.2018 - 09.45 | Company report

We estimate net sales to grow at a CAGR of 4.1% in 2018E-2020E, driven by
Industrial Measurements and growth areas in Weather and Environment. Meanwhile,
we estimate that improving sales mix and economies of scale raise Vaisala’s EBIT
margin to 13.7% in 2020E. We initiate coverage with a HOLD rating and a target
price of EUR 21 per share.

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Industrial Measurements - Strong growth and profitability

In 2010-2017, Industrial Measurements (IM, 33% of sales) net sales grew at a
CAGR of 8.2%. In the past five years, IM’s operating margin has improved from 12
to 20 percent, driven by scale economies. The business area follows a product
leadership strategy and the current focus is on the power transmission and life
sciences markets.

Weather and Environment – Focusing on growth areas

In 2010-2017, Weather and Environment (W&E, 67% of sales) net sales grew at a
CAGR of 2.3%. Operating margin was 8.2% in 2017E. W&E is currently focusing on
meteorological projects in developing countries, digital solutions, and air
quality related solutions. Meanwhile, growth is relatively slow for traditional
meteorological equipment in the developed countries.

Estimating EUR 376m sales, 13.7% EBIT margin in 2020E

Vaisala targets 5% CAGR sales growth (4.0% CAGR in 2010-2017) and 15% EBIT
margin (12.3% in 2017) in the long term. We estimate 4.1% CAGR sales growth for
18E-20E, driven by IM sales and growth areas in W&E. We estimate that Vaisala’s
EBIT margin improves to 13.7% in 2020E, driven by economies of scale and the
increasing share of IM sales.

Initiating coverage with a HOLD rating and TP of EUR 21

Our 2019E estimates and peer EV/EBIT multiples imply a value of 20.4 EUR per
share. Meanwhile, our DCF model implies a value of EUR 21.3 per share. We see
that Vaisala’s current share price already reflects our expectations of
continued growth and gradual profitability improvements. We initiate coverage
with a HOLD rating and a target price of EUR 21 per share.



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TAALERI - INITIATE COVERAGE WITH BUY

29.05.2018 - 00.00 | Company report

We initiate coverage of Taaleri with a BUY-rating and target price of EUR 11. We
expect continued growth in continuing earnings while viewing stronger investment
and performance based return potential in the mid- to long-term. Taaleri has
seen considerable profitability improvements and we expect profitability to
remain at good levels.

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Growth in continuing earnings

We expect to see growth in continuing earnings in all three segments. In Wealth
Management we expect growth to be supported by increasing AUM, driven by private
equity funds, and in Financing from growth in the insurance portfolio. Growth in
Energy is supported by the newly completed SolarWind fund. We expect continuing
earnings to grow at a CAGR of some 13 % during 2017-2020E. We expect performance
and investment returns to decline in 2018 following strong returns in 2017 and
expect the returns to increase in the mid- to long-term. Our revenue estimate
for 2018 is EUR 72.2m.

Expect continued good profitability

Taaleri’s profitability has seen improvements in recent years, with 2017 being
an exceptionally strong year in terms of both revenue and profitability. We
expect profitability to remain at good levels but to decline slightly in 2018
due to lower revenue. In 2019-2020 we expect profitability to pick up following
higher revenue and cost discipline. We expect to see the largest profitability
increases in Wealth Management and Energy, with Energy expected to be profitable
from 2019 onwards.

BUY with a target price of EUR 11

We initiate coverage of Taaleri with a BUY-rating and target price of EUR 11,
based on our SOTP and DCF valuation. On our estimates Taaleri trades at P/E of
17.9x and 12.3x for 2018E and 2019E respectively. On our estimates relative
valuation is somewhat elevated on 2018 multiples following expected weaker
earnings. On 2019E multiples valuation is in line. We expect stronger mid and
long-term potential.



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SSH - INITIATE COVERAGE WITH HOLD

26.03.2018 - 09.30 | Company report

We initiate coverage of SSH with a HOLD-recommendation and a target price of EUR
2.0. Our target price is based on our DCF value and 4.5x EV/Sales multiple on
our 2019 revenue estimates. Current valuation is high, but we see compelling
longer-term revenue and profitability potential which supports valuation.

Read more

Transformation in process

Under the management of the new CEO Ms. Kaisa Olkkonen, the company has taken a
new strategic direction to reposition SSH into a more inclusive strategic PAM
vendor for companies of all sizes operating in all IT-environments. With the
launch of PrivX and further developing its PAM offering, the company intends to
drive its growth by increasing its focus towards the subscription model, faster
deployments and expanding into new customer segments.

Building up momentum in 2018

We expect only slight revenue growth for 2018, but see growth accelerating
during towards the end of ’19-’21 period as sales of PAM offering picks up
speed. We expect EBIT-margin to improve, but to remain negative during 2018-2020
due to further investments in growth. We have not included potential patent
income and possible firewall related revenue in our estimates. If these projects
were to materialize, they represent an upside risk to our estimates.

HOLD with a target price of EUR 2.0

On our estimates 2019E-2020E, SSH is trading at EV/Sales 4.3x and 3.7x, which is
in line with the average 4.5x and 3.6x EV/Sales multiples for our small sample
peer group. Current valuation is high, given that that the company is in the
beginning of its transformation phase and risks are elevated, but we see
compelling longer-term revenue and profitability potential which supports
valuation.

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ENDOMINES - INITIATE COVERAGE WITH BUY

22.03.2018 - 09.00 | Company report

Through a recent transaction Endomines acquired American entity TVL Gold and the
five gold assets it holds. Along the completed rights issue and financing
arrangements the company is in a stronger position to continue production as
resources at the Pampalo mine have neared depletion. We initiate coverage of
Endomines with a BUY rating and target price of SEK 9.3

Read more

Acquisition and strengthening of balance sheet

Endomines recently acquired TVL Gold and its five gold projects in the Orogrande
mining district in Idaho, USA. In conjunction with the acquisition and completed
rights issue, with net proceeds of some SEK 180m, Endomines completed a series
of financial transactions after which the company has no remaining bank debt.

Production focus to shift to the acquired assets

With the current reserves Endomines targets production of 250-300kg gold at the
Pampalo mine after which investments into an extension would need to be made.
Production at the first of the acquired assets is expected within a year of the
acquisition and within 2-5 years at the other assets.

Potential coupled with uncertainty

The acquisition and a planned expansion of the exploration program offer
increased potential but we note a high uncertainty relating to the TVL Gold
assets as resource estimates are limited and no production is currently on-going
at the assets and resources at Pampalo are nearing depletion.

Initiate coverage with BUY and target price of SEK 9.3

We initiate coverage of Endomines with a BUY rating and a target price of SEK
9.3. Our target price is based on a 0.95x multiple to our NAVPS estimate, taking
into consideration the stability of the operating jurisdictions and the early
stages of the assets.



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GOFORE - INITIATE COVERAGE WITH BUY

23.01.2018 - 08.30 | Company report

We initiate coverage of Gofore with a BUY rating and target price of EUR 9.2. We
expect growth to continue strong in 2018-19E and profitability to remain at good
levels.

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Targeting above market growth rate in the IT-services sector

Gofore aims to grow faster than the company’s target IT-services market.
Gofore’s long-term profitability target is to generate an EBITA-margin of 15%.
We expect Gofore to have good possibilities to reach its profitability target
during 2017E-2018E mainly supported by price increases and a good cost
discipline due to a competitive personnel cost structure. Our EBITA-margin
estimate for 2018E is 18.0 %. Historically, Gofore has grown faster than its
main competitors and profitability has been above the competitor average in
2012-2016.

Recruitments in 2017 support good growth in 2018

Gofore’s personnel increased to 374 in 2017 from 196 in 2016. The increase came
mostly from new recruitments and a smaller part from the acquisition of Leadin.
The recruitments will support the continued growth in 2018E, with our sales
growth estimates at 46.2 %. We also expect Gofore to continue expansion
internationally, giving further support for continued good near-term growth. We
expect sales growth to slow down going forward from 2018. The certain
sector-wide difficulties in recruitments could put pressure on further slow-down
of growth.

BUY with a target price of EUR 9.2

We initiate coverage of Gofore with a BUY-rating and target price of EUR 9.2.
Our target price is based on our DCF-value and the peer multiples for 2018E.
Gofore trades at a discount on earnings-based multiples for 2018E. Our target
price values Gofore at 12.2x EV/EBIT 2018E.



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