Good performance in core business

Inderes’ Q3 report was broadly in line with our estimate, with a small miss in EBITA. Still, our takeaway is that the company remains well positioned to continue its core business growth in 2024 despite market headwinds that are set to continue at least in H1. We expect growth of c. 6% for 2024, driven by AGM and research services as well as cross-selling in Sweden. Despite small EBITA estimate cuts, our fair value range is unchanged at EUR 17-19.

Q3 outcome: Core business on track given difficult market

The Q3 results were broadly in line with our estimates, with a small miss in EBITA due to slightly higher-than-expected materials and services costs. Our main conclusion is that the core operations (IR-related services for listed companies) are performing well under current market conditions, and the weakness is due to discretionary event services, where clients are squeezing their budgets. Revenue from the Swedish operations was also in line with our estimates, and according to management progress there has gone broadly according to plan.

In a good position for growth in 2024, despite the market situation

Inderes’ faces two main headwinds: the lack of IPOs means the market is not growing (in fact, we believe the market is more likely to decline short term); and customer caution in spending on events, especially outside those related to IR. However, positives for sales growth in 2024 are AGM services, where Inderes has a holistic and cost-efficient solution. We also understand that the momentum for IR solutions is promising, although this business is still relatively small. In Sweden, we believe the growth efforts will bear fruit and the easiest cross-selling opportunity is in AGM services.

Fair value range unchanged at EUR 17-19

We end up slightly reducing our EBITA estimates for 2024-25. However, we retain our fair valuation range of EUR 17-19.