Ahead of its CMD today, Relais updated its strategy for 2026-28 and provides new financial targets. The company is clearly putting efforts on returns with strategy execution focusing on 1) building the foundation for the next wave of profit growth 2) improving the quality of growth 3) scaling with capital efficiency.
Following the acquisition spree, the company is aiming to convert the platform into strong EBITA growth with increased focus on return on capital. Relais targets double-digit EBITA growth, on average over a business cycle, and ROCE above 13%.
Pre-Q1 Modular Finance consensus expected 12% adjusted EBITA CAGR for 2025-28E (Nordea 14%). Hence, we view new targets well in line with expectations. On addition, dividend payout policy is set at 30%, over the cycle.
We view the focus on capital returns and profitable growth positively as it likely will reduce inedptness of the company (leverage 3.55x in Q1) which we have viewed as slightly elevated.