Translation: Original comment published in Finnish on 05/27/2024 at 7:30 am EEST Solwers will publish its Q1 business review on Friday. This is the company's first quarterly report, as previously the company only reported twice a year. No quarterly comparison data have been published so assessing seasonal fluctuation poses forecasting challenges and increases forecasting risk. In addition to operational development, we are interested in comments on the development of the market and companies’ order backlogs. We suspect Q1 is a slower period, growth from acquisitions Solwers will publish its first quarterly report as the company reports its Q1’24 business review. Assessing the seasonality of the business is challenging due to the lack of comparison data, but we estimate that Q1 is seasonally quieter than the other quarters due to the timing of holidays. In addition, Q1 had one working day less than in the previous year. Thus, in line with a slowdown in organic revenue, but following completed acquisitions, our Q1 revenue forecast is 16 MEUR. Since no comparison data are available, we find it more important to compare the actual growth rate of Q1 to our full-year estimates than to our Q1 estimate. In general, we estimate that the recent sluggish economic development and resulting decline in organic revenue will focus more on H1. Lower revenue also slows down the earnings level in our forecasts  Our Q1 EBITA estimate is 1.3 MEUR, corresponding to a reasonable EBITA margin of 8.2%. However, this is below our full-year profitability forecast (2024e EBITA-% 10.2%), which reflects the lower Q1 EBIT forecast compared to the other quarters. In general, the company’s cost structure is fixed in the short term, as most of the costs consist of personnel costs, as is typical of service companies. We expect that the company will only report operational figures in the lighter business review. The company has not provided a numerical guidance As expected, Solwers has not provided numerical guidance for the current year. Based on the market outlook presented in the financial statements, the company has estimated that the workload in Finland will decrease in H1, but will improve toward the end of the year. The company also commented that its order backlog is on a good level in the public sector and infra. In connection with the business review, we are interested in recent market comments and whether the company has already seen a pick-up in the market. We believe the order activity should have improved in the early part of the year for it to be reflected in H2 revenue.

info@inderes.fi (inderes.fi)

© Inderes Oyj. All rights reserved.