Administer - Solid profitability continues
Administer’s Q2 EBITDA soared by 320% y/y, reaching EUR 1.9m and exceeding our expectations. Despite a continued slight decline in net sales (Q2: 1.3% y/y), the turnaround in profitability offers encouraging signs for the future.
Profitability exceeded expectations
Administer reported Q2 net sales and EBITDA of EUR 19.3m and 1.9m respectively (Evli: EUR 19.7m and 1.7m). The 1.3% y/y decline in net sales was mainly driven by the sluggish demand for personnel leasing, which is more sensitive to macroeconomic cycles in contrast to the rather defensive nature of the other business areas. The EBITDA-margin more than tripled to 9.6%, as a result of the profitability programme and a weaker comparison period, slightly beating our estimates of 8.7%.
Growth outlook remains uncertain
Given the stronger-than-expected profitability, we have slightly raised our 2024E EBITDA-margin estimate to 8.5%, approaching the upper end of the guidance range. Conversely, we have revised our net sales estimate slightly downward to EUR 76.2m and 2025e growth from 5% to 3.5%, with y/y sales still on the decline during H1. As further profitability improvements from the cost savings programme are expected to be limited, achieving the desired growth and enhancing profitability will primarily depend on securing additional market momentum. In the current market environment, achieving organic growth is challenging, and without a significant market push, the 15% EBITDA-margin target for 2026 appears ambitious.
BUY with a target price of EUR 3.0
Although Administer has shown good signs during the start of its turnaround phase, weak visibility into growth and further profitability improvements in these market conditions leads us to maintain a cautious stance in terms of potential valuation upside. We continue to monitor the demand situation and retain our TP at EUR 3.0, valuing Administer at approximately 12.5x 2024e P/E (excl. goodwill amortization), BUY-rating intact.