Administer - Profitability improving again in soft market
Administer’s profitability continued to improve in Q1, with EBITDA margin up by 17% y/y. Net sales were in line with the comparison period despite acquisitions.
Sales remained flat, EBITDA margin in double digits
Net sales in Q1 totaled EUR 19.0m, flat y/y and slightly below our expectations. We had estimated net sales growth through the acquisition of Kuntalaskenta and other smaller acquisitions, but customer attrition linked to integration challenges in some acquired businesses held back growth. The market climate also remained soft, particularly affecting Econia and Administer’s accounting operations, which saw net sales decline by 8.4% and 4.8%, respectively, while Silta and EmCe reported net sales broadly in line with the comparison period. While top-line growth was limited, profitability showed strong momentum, with all key metrics above our estimates. EBITDA reached EUR 2.0m (Q1’24: EUR 1.7m), yielding a 10.7% margin above the FY guidance, reflecting well-executed cost control, especially amid limited revenue progress. EBITA improved to EUR 1.6m (Q1’24: EUR 1.3m) and EBIT came in at EUR 0.5m (Q1’24: EUR 0.2m).
2025E EBITDA margin estimate up by some 10%
Administer maintained its guidance, expecting net sales of EUR 72–78m and an EBITDA margin of 7–10%. Management’s tone on the market environment remained cautious, with no short-term relief in sight. We share a reserved view, but see potential in a gradual recovery as the year advances. A more supportive interest rate backdrop should help revive overall economic activity, which is a key driver for Administer’s operations. Despite the Q1 EBITDA margin exceeding the guidance range, we anticipate some seasonal softening in H2, bringing the margin back within the guided range. Reflecting the stronger-than-expected profitability, we have raised our 2025E EBITDA estimate by ~10%, while slightly lowering our net sales forecast. We now expect 2025E net sales of EUR 75.3m (prev. EUR 76.1m) and an EBITDA margin of 9.2% (prev. 8.2%), with these revisions also modestly impacting our 2026-2027E estimates.
BUY with a target price of EUR 2.9 (2.8)
Based on our 2025E estimates, Administer is trading at ~10x P/E (excl. goodwill amortization), which we continue to view as undemanding. Although market uncertainty persists, the year started on a solid note, and cost-saving measures have clearly helped turn the profitability trend. We raise our target price to EUR 2.9 (prev. EUR 2.8) and keep our BUY rating.