Lower demand in IT and Network Services, as well as reduced Media Distribution revenues due to eleven month of sales (Infrateq was integrated 2nd of February), affecting turnover in the first half of 2024, resulting in sales of SEK204m. Additionally, several extraordinary costs related to the acquisitions negatively impacted profitability. The EBITDA margin was 3%, compared to our estimate of 7%.

Redeye believes that the first half of 2024 has been a transformative period for Binero IT, with a strong focus on mergers, restructuring, new management, and new hires. Looking ahead, the company should be able to shift its focus to long-term growth and new sales, which should lead to a stronger performance in H2 2024. We are adjusting our revenue estimates down by 4% for the full year and by around 10% for 2025e and 2026e. However, we believe the company should be able to scale up its operations effectively, and we are increasing our profitability estimates to an EBIT margin of 10% in 2025e (previously 7%).

We are adjusting our Base Case from SEK3.4 to SEK3.3. The new valuation range is SEK2.1 - 5.50 (previously SEK2.6 - 5.7). On Redeye estimates, Binero IT is valued at EV/EBIT 7.7x 2025e, a 33% discount to peers, who trade at a median EV/EBIT 11.5x 2025e.