* Strong Q1 beat with 110bps margin expansion on adj. EBITDA * Adj. EBITDA up 1% for '26e-'28e on Q1 beat * FVR unchanged at SEK 190-270 on minor estimate revisions
A solid start to '26 despite weather drag
Q1 was 8%/6% above ABGSCe/Infront consensus, with sales of EUR 624m, adj. EBITDA of EUR 105m and a margin of 16.8% (up 110bps y-o-y). Management quantified the weather drag at a few pp on growth, less than feared, with January and February most affected before normalisation in March. The ability to protect and expand margins despite the volume drop in the first two months underlines the resilience of the model. HS posted organic growth of 12% and an EBITDAaL margin of 11.3% (9.9% Q1'25), driven by Polish sports/wellness and the Indian and Romanian hospitals, with India revenue up 34% (local currency) on the opening of the new Hyderabad hospital. DS delivered organic growth of 7% and an EBITDAaL margin of 16.7% (15.7%), with continued German FFS momentum and SYNLAB supporting the mix despite weather and Ukraine power outages. The slightly soft OCF was flagged as timing-related and is expected to normalise in Q2. Leverage declined to 2.9x (R12).
Estimate changes
We raise '26e-'28e adj. EBITDA by 1% on the Q1 beat, while sales are broadly unchanged. Management noted that around half of the margin improvement over the last quarter relates to the previous acquisitions and that margin tailwinds from prior acquisitions will moderate going forward. Against that backdrop, we find our adj. EBITDA margin improvements of ~40/20/50bps for Q2/Q3/Q4'26e to be reasonable. The 2028 targets (sales >EUR 3.25bn, adj. EBITDA >EUR 600m) appear within reach.
FVR unchanged at SEK 190-270We leave our FVR at SEK 190-270 on the minor estimate revisions. We derive our range from the multiples of two peer groups, one with healthcare providers in developing countries and one in developed countries, alongside a DCF. The range corresponds to a '26e EV/EBITDA of 9x-12x.