Relais Q2'25 preview: Comparison period sets the bar high

Translation: Original published in Finnish on 8/12/2025 at 7:30 am EEST.

Relais publishes its Q2 result on Thursday at about 9:00 am EEST. Despite a strong comparison period and sluggish market development, we forecast revenue to have grown driven by acquisitions. However, reflecting this overall picture,  we expect the result to have climbed only slightly above the comparison period. We have made minor adjustments to our forecasts and incorporated recent acquisitions, reflecting which our forecasts for the coming years increased slightly. The stock's valuation has remained moderate, so we reiterate our Accumulate recommendation and raise our target price to EUR 18.5 (was EUR 17.0).

M&A kept the top-line forecast on an upward trajectory in a subdued market

With our updated estimates, we expect Relais' Q2 revenue to have grown by 7% year-on-year to 79.5 MEUR (was 74.9 MEUR). Revenue growth is driven by inorganic drivers, as Technical Wholesale is boosted by the Team Verksted Holding acquisition. Despite this acquisition, we forecast the total growth of the business area to remain slightly negative (-2%), which reflects a very strong comparison period and the forecast organic decline in revenue (-4%). The aforementioned acquisition, together with two other acquisitions, raises the estimated revenue growth of Commercial Vehicle Repair and Maintenance to 25% in Q2, which is also influenced by the estimated 2% organic decline in revenue. Overall, we believe the company's main markets contracted organically in Q2, and based on comments from peer company Mekon, among others, price competition seems to have been tougher than usual in the spring.

We estimate Relais' adjusted EBITA (adjusted for PPA amortizations) in Q2 to have been 7.2 MEUR (was 6.2 MEUR), which is marginally above the comparison period and corresponds to a profitability of 9.1%. We expect the contraction of organic revenue to have depressed profitability below the comparison period's level, especially in repair and maintenance operations, where a high utilization rate of service points is quite critical for profitability. At the same time, with the acquisitions made, the revenue structure has changed, and the structurally lower profitability of Commercial Vehicle Repair and Maintenance pressures the Group-level profitability relative to the comparison period.

Organic and inorganic estimate revisions

We have updated our full-year forecasts in connection with the earnings preview. We do not expect the weak market situation in Q2 to strengthen quickly, reflecting which we slightly lowered our organic revenue forecasts for H2'25 and the coming years. However, these minor forecast changes were largely offset by recent acquisitions. As a net effect of these drivers, our estimates for the current year remained largely unchanged, but our revenue and operating profit estimates for 2026-2027 rose by 4-5%.

Valuation picture has remained attractive

According to our forecasts, the adjusted P/E ratios for 2025 and 2026 are about 12-11x, and the corresponding adjusted EV/EBITA multiples are 12x and 10x. Current year's valuation multiples do not fully account for recent acquisitions, so we believe the 2026 valuation multiples provide a better measure for Relais in its current form. We believe these multiples are absolutely at a moderate level. Relatively, with 2026 forecasts, Relais is valued roughly in line with companies engaged in similar operational businesses, whereas compared to serial acquirers, the valuation is at a significant discount. In our view, Relais' justified valuation lies between these two peer groups, considering the company's historical track record of successful capital allocation and elevated quality. Therefore, despite the recent share price increase, we believe the stock's risk/reward profile is still attractive.