Administer - Steady development expected
Administer is set to report its Q1 results on Wednesday, May 7. We expect the company to deliver solid profitability, while net sales are likely to grow only marginally, with little to no organic contribution.
Solid profitability base entering 2025
Administer’s FY 2024 demonstrated a clear improvement in profitability, with the EBITDA margin rising from 3.8% to 7.4% y/y, driven by cost-efficiency measures. As these savings are now reflected in the comparison period, we do not anticipate further y/y margin expansion in Q1 but expect profitability to remain solid. Meanwhile, top-line development was weak in 2024, with net sales declining by 1.6%. In addition to overall market softness, the decline was largely driven by personnel leasing specialist Econia, where net sales declined by 9%. According to Employment Industry Finland, the sector contracted further in early 2025 (−9.5% y/y in Jan–Feb) and we believe Econia will weigh on growth in Q1. That said, we expect Administer’s Q1 net sales to post a slight y/y increase, supported by acquisitions, while profitability is expected to remain solid.
Organic growth outlook limited, expected to improve in H2
Administer expects FY 2025 net sales to be EUR 72-78m and EBITDA margin in the range of 7-10%. We keep our estimates unchanged ahead of the Q1 report, forecasting net sales of EUR 76.1m and EBITDA margin of 8.2% for FY 2025. For Q1, we expect 1.4% y/y net sales growth to EUR 19.3m, driven by smaller acquisitions made in January. The current market climate remains unfavorable for organic growth, though we expect conditions to gradually improve in H2. We estimate EBITDA in Q1 to be EUR 1.7m (margin 8.9%), in line with the comparison period, which already reflected the impact of cost-saving actions. While we believe the market climate to have remained largely unchanged in Q1, ongoing trade tensions and tariff risks could pose a future threat and indirectly affect Administer through further weakened economic activity.
BUY with a target price of EUR 2.8
Following implemented cost-efficiency measures in 2024, Administer has stabilized profitability to a solid level. Going forward, top-line growth is key, and we expect gradual improvement in H2. On our 2025–2026E estimates, Administer trades at an EV/EBITDA of 6–5x and P/E of 11–8x (excl. goodwill amortization), levels we view as undemanding.