Nordrest is a Swedish company that operates restaurants at approximately 200 locations in Sweden, catering to natural guest flows. Their clientele includes employees of Volvo Cars and Ericsson, as well as travelers at Arlanda airport. A significant portion of their customers come from the public sector, such as schools, hospitals, and nursing homes.
Founded in 2013, Nordrest went public in May 2024 with a listing price of 108 SEK. The company’s CEO, Thomas Dahlstedt, who holds 43.8% of the shares, along with the second-largest shareholder, investor Lars Lindgren with 18.6%, are key figures in the company’s ownership structure.
One of the recent focal points of Nordrest’s business is its operations in the defense sector. They manage restaurants in military facilities in southern Sweden under a long-term contract that began in 2022. Additionally, they own Outmeals, a company that produces food rations for soldiers in the field and emergency stockpiles. This product, known as Meals-ready-to-eat (MRE), has gained traction and contributed to Nordrest’s revenue growth.
In their 2023 annual report, Outmeals generated 420 million SEK in revenue, indicating a substantial portion of military-related restaurant sales for Nordrest. With an increase in defense personnel, more exercises, and the stocking of emergency supplies, Nordrest’s defense-related businesses are poised for significant growth in the future.
Despite challenges in the defense sector in 2024, Nordrest maintained a solid financial performance, with a revenue growth of 7.7% and a 8.4% operating margin. The company’s profitability remained strong, meeting their target of 8-10% Ebita margin for the second consecutive year. Nordrest’s expansion in the travel segment, taking over roadside diners and opening new units at Arlanda airport, also contributed to their growth.
Looking ahead, Nordrest does not provide specific forecasts but aims for organic growth of over 10% annually, an Ebita margin of 8-10%, and a net debt-to-Ebitda ratio of no more than 2x. With a sector valuation of EV/Ebit 10, Nordrest’s valuation at 9x suggests a potential upside in the stock.
In conclusion, Nordrest’s strong organic growth and impressive margins make it an attractive investment opportunity. Despite uncertainties surrounding their Outmeals business, the company’s solid financial performance and growth prospects indicate a positive outlook for investors.