Inderes Group - Headwinds in Sweden, but foundation is solid - SEB

Our read from the Q1 result is that the AGM season looks to be more profitable for Inderes than we initially thought. Q1 saw a large number of AGMs while the volume of AGMs this year is tilted to Q2. Positively, the event business in Finland seems to have taken a step ahead. Sweden was again negative though with continued declining sales. This is partially due to churn in the research business. Also, in Finland, the market for commissioned research is not as promising as it was a few months ago. The recent turbulence will likely affect IPO activity, which means fewer potential clients; this leads us to cut our estimate slightly for the number of contracts.

We find the Inderes story very much intact. The Finnish business forms the foundation with excellent customer retention and some growth potential still in certain products. Yet, the major Finnish potential lies in market growth, which is dependent on IPO activity. The Swedish and other international businesses hold significant potential. However, the company faces challenges in building its presence in markets. This will take more time than we previously assumed and estimates have high uncertainty.

Our fair valuation range rises slightly to EUR 20-22. This is driven by our peer valuation benchmark multiples while our DCF valuation remains unchanged.