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Third party research

Vestum: Balance sheet in shape, ready to accelerate - ABG

Vestum

This is a third party research report and does not necessarily reflect our views or values

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We cut underlying '25e-'26e EBITA by 5-4%, mainly in service units
Positioned to accelerate M&A in margin-accretive business areas
Trading at 10-6x EBITA (9-12% FCF yields), 10-20% below key peers


High-quality Flow Tech. ~40% of EBITA, 11% CAGR

Q4 was slightly weaker than we expected, primarily within the Services segment where a higher share of lower-margin contracts and a few credit losses had a negative impact (Services EBITA -12% vs. Modular Fin cons.). We expect margins in service units to remain subdued in Q1, but return to growth and better margins in H2'25. The Water segment continued to be the bright spot with performance more in line (EBITA -3% vs. cons). Water is now part of Flow Technology (~40% of EBITA), which we expect will deliver an 11% EBITA CAGR in '24-'27e, excluding new M&A, and generate ~18% average margins.
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