InfraCom’s net sales were 2% higher than RRe, while OPEX was higher weighted on EBITDA, which resulted in a 21% miss. Adjusting for a SEK2.4m restructuring charge, EBITDA was still 17% below RRe. InfraCom wrote down Connect’s second earnout, implying InfraCom expects Connect’s EBITDA to be below SEK22m for 4/24-4/25. Last quarter, the earnout was written down to SEK5m, implying Connect was expected to achieve SEK27m in EBITDA during the same period.

Some media amplified a view that InfraCom had strained liquidity, failing to consider the TRS. However, following Q3 2024 end, InfraCom expanded its credit facility to SEK300m (prev. SEK175m) and relaxed covenants (Net debt/EBITDA less 3.0x, prev. 2.5x). Thus, InfraCom’s liquidity is SEK95m (inc. TRS), and InfraCom’s cash flow remains positive. With a slightly improved outlook, InfraCom states that it can continue acquisition-driven growth and that the acquisition market remains attractive. TRS’s returns directionally follow Bredband2 – hence, we are increasingly confident that Bredband2 is the underlying asset. However, outside a buyout, we do not understand the rationale.

With an improved balance sheet, we have made minor adjustments to our acquisition expectations (expect SEK22.5m for 2025e; Prev: SEK15m). Additionally, we raised Q4 2024e OPEX somewhat but reduced 2025e. Estimate changes have a minor effect on our fair value range. InfraCom is valued at EV/EBITDA 7.5x on our updated 2025e versus its historical 5-year average. 10.5x. We believe the stock will trade between bear and base case until the market regains confidence in management. Each report will be a scorecard for the market and a potential catalyst for the share. We expect improved EBIT from Q1 2025e as restructuring takes effect.