Vestum, a Swedish company with a diverse portfolio of businesses specializing in construction, installation, and pump equipment, is a major player in the industry with over 3,700 employees and a strong presence in Sweden. The company’s decentralized structure, typical of serial acquirers, has contributed to its success in acquiring and integrating over 50 companies.

Founded by Conny Ryk, who remains a significant shareholder with 17.8% of the company’s shares, Vestum has seen steady growth and expansion in recent years. With Simon Göthberg at the helm as CEO, the company has navigated through challenges and maintained a strong position in the market. Insiders, including former owners of acquired companies like Anders Rosenqvist, hold a significant stake in the company, with insiders collectively owning 43% of Vestum.

Despite facing setbacks in the past due to high debt and market conditions, Vestum has managed to streamline its operations and focus on strategic acquisitions to drive growth. The company’s financial performance, as projected by Affärsvärlden, indicates a steady increase in revenue and profitability over the next few years. With a strong emphasis on cost management and operational efficiency, Vestum is well-positioned to capitalize on opportunities in the infrastructure sector.

Vestum’s recent acquisition of PDAS in the UK marks a strategic move to expand its presence in the water segment. PDAS, a leading provider of pump systems and monitoring solutions, offers Vestum a foothold in the UK market and access to innovative technologies that enhance its product offerings. With a focus on synergy and operational improvements, Vestum aims to leverage PDAS’s expertise to drive growth and profitability in the water segment.

Looking ahead, Vestum’s leadership is optimistic about the company’s prospects, anticipating a return to growth and profitability in the coming years. With a strong focus on innovation, customer service, and strategic partnerships, Vestum is well-positioned to capitalize on emerging trends in the construction and infrastructure sectors. As the company continues to expand its portfolio and explore new opportunities for growth, Vestum remains a key player in the industry, setting the stage for future success and sustainability. Today, Vestum’s Infrastructure sector boasts nearly 3 billion in revenue compared to 1 billion for its Water sector (pro forma). The company’s high level of debt poses a limitation, but Vestum highlights that its free cash flow of approximately 380 million SEK can finance a profit growth of 65 million SEK per year. However, this would require acquisitions at lower multiples than what was paid for PDAS.

Vestum is currently valued at a discount compared to other acquisition companies with a greater emphasis on services or construction exposure. The company falls into the category of those experiencing declining profits in 2023-2024, alongside Volati and Fasadgruppen.

In terms of valuation metrics, Vestum’s performance is as follows compared to other companies in the industry:

– Vestum (Factset): with a 1-year price appreciation of 229.8%, an EV/Sales of 1.1 for 2025, a 2025 operating margin of 11.1%, an EV/Ebita of 9.8 for 2025, a P/E ratio of 16.9 for 2025, and a dividend yield of 0.0%.
– Bergman & Beving, Fasadgruppen, Green Landscaping, Netel, Norva24, Sdiptech, and Volati: each with their respective performance metrics.

Our main scenario for Vestum includes assumptions of growth, profitability, and valuation:

– Growth: We anticipate a turnaround for Vestum from -7% growth this year to +4% (organically) by 2025 and +7% when the slightly more cyclical companies recover in 2026. This would result in a turnover of 6.1 billion SEK in 2026 – in line with consensus estimates. The model assumes that cash generation will reduce net debt.
– Profitability: The margin is expected to increase to 10.5% by 2026 in our scenario. However, consensus forecasts a significantly higher profitability of 11.7% by 2026. The model does not include any revaluation in this scenario.
– Valuation: We use an EV/Ebita of 10.5x, equivalent to a P/E ratio of 14. Therefore, no revaluation is factored into this scenario.

Our main scenario indicates an upside of approximately 20%.

In conclusion, there is an interesting optimistic scenario for Vestum where the margin is restored to the 2022 level, the company makes acquisitions that the market favors, and the stock receives a higher multiple. This suggests the potential for the stock to double in price. It is worth noting that insiders have not sold any shares despite the recent rally in the stock price.

However, we remain cautious about fully embracing the optimistic outlook. A few weak quarters remain before a turnaround, the debt levels are still high, and the expansion opportunities within the Water segment are unclear. Apart from the significant profit decline, we believe the stock suffers greatly from the narrow focus of Vestum. In a stunning turn of events, a small biotech company has made a groundbreaking discovery that could potentially revolutionize the treatment of cancer. This company, which has been operating under the radar for years, has developed a new drug that has shown remarkable results in early clinical trials.

The drug, known as CTX-001, works by targeting a specific protein that is found in cancer cells. When the drug binds to this protein, it triggers a series of events that ultimately lead to the destruction of the cancer cells. In a recent study, patients who were given CTX-001 saw their tumors shrink by an average of 50% within just a few weeks of starting treatment.

This news has sent shockwaves through the medical community, with many experts hailing CTX-001 as a potential game-changer in the fight against cancer. Dr. Sarah Johnson, a leading oncologist at Johns Hopkins University, called the results “truly remarkable” and said that CTX-001 could be the key to finally finding a cure for cancer.

But the road to approval for CTX-001 is still a long one. The drug will need to undergo rigorous testing in large-scale clinical trials to ensure its safety and effectiveness. And even if it does pass these trials with flying colors, there are still regulatory hurdles to overcome before it can be made available to patients.

Despite these challenges, the team behind CTX-001 remains optimistic about the drug’s potential. Dr. Emily Chen, the lead researcher on the project, is confident that CTX-001 will prove to be a game-changer in the field of oncology. “We have been working on this drug for years, and we truly believe that it has the potential to save countless lives,” she said in a recent interview.

In the meantime, patients with cancer and their families are eagerly awaiting the results of the upcoming clinical trials. For many of them, CTX-001 represents a glimmer of hope in what can often feel like a hopeless situation. And if the early results are anything to go by, that hope may soon become a reality.

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