Administer - Sarastia execution and turnaround key
Administer's Q2 was slightly weaker than expected, with the y/y EBITDA improvement streak coming to a pause. Adjustment measures have been initiated to support margins going forward. The Sarastia acquisition, which will increase revenues by close to 50%, continues to represent a potential catalyst for 2026 and beyond.
Stable as expected, although some profitability pressure
Administer's net sales in Q2 were stable y/y at EUR 19.3m, slightly below our estimate of EUR 19.5m. Organic net sales declined modestly, but the integration of Kuntalaskenta offset this, keeping total sales flat. Most of the organic decline came from Econia, where sales fell 9.3%, in line with the broader staffing market downturn. Comparable EBITDA decreased to EUR 1.8m (Q2'24: EUR 1.9m), with profitability development slowing down due to higher costs and increased credit losses. Kuntalaskenta, acquired in Q3'24 in a distressed situation, also continued to weigh on margins, though management expects the most difficult period to be behind it. Reported EBITDA was EUR 1.6m, further impacted by one-off expenses.
FY estimates around the midpoint of guidance
Economic activity in Finland remains subdued, with management maintaining a cautious stance. Both Administer’s accounting business and Econia have launched adjustment measures to support margins from Q4 onwards. We expect Q3 to remain somewhat soft, with a modest recovery in EBITDA anticipated in Q4 as the impact of these measures begins to materialize. Guidance remains unchanged at EUR 72–78m in net sales and a 7–10% EBITDA margin, with an update expected once the Sarastia acquisition is finalized. Our estimate is EUR 75.0m for net sales and EUR 6.5m for EBITDA (prev. EUR 7.0m), implying an 8.7% margin. The transformational Sarastia acquisition remains a key catalyst, with closing anticipated in the coming months.
BUY with a target price of EUR 2.9
With only minor updates to our estimates, we maintain our TP of EUR 2.9 and BUY rating. On our 2025E-2026E estimates, Administer is priced at 11-8x P/E (adj. for goodwill amortization), which we consider undemanding. The Sarastia acquisition represents further potential upside for 2026 and beyond, should the acquired business recover from recent losses and achieve similar margin levels as Administer's current payroll and accounting business as management expects.