Enea’s focus areas (Network and Security) delivered 10% growth y/y in local currencies. Adj. EBITDA margin for the quarter and the full year came in at 36% and 34%, respectively. Thus, close to the 35% EBITDA target reiterated in the Q4 2024 report. Operating Systems, which is in run-off mode, contributes about 17% of EBITDA while only being 9% of sales. We calculate Operating System’s EBITDA-margin to ~60%, suggesting a SEK50m headwind as Operating System runs off. Network and Security has EBITDA margin of 25% and 32%, respectively. OEPX was somewhat higher than anticipated. CEO Anders Lidbeck, said on the earnings call that upsell opportunities of at least SEK500m exist. Thus, Enea can increase its sales by 55% if it fully captures this potential. We have increased our OPEX estimates 3% for 2025e-2026e.

Enea named Teemo Salmi CEO effective 1 April 2025. Salmi joins from Nixu, where he recently led post-acquisition integration. His cybersecurity, telecom, and global sales expertise aligns with Enea’s strategy. However, the leadership change introduces uncertainty, as the prior transition saw weak share performance, forcing Anders Lidbeck to take the helm again. Additionally, we have revised our WACC due to the uncertainty introduced by the CEO transition.

Enea de-levered its balance sheet reaching net debt of SEK117m. Some competitors have faced financial difficulties which Enea plans to capitalize on through by M&A and showing its customers — where Enea is critical — that it is a stable supplier. Additionally, Enea is committed to continue capital returns though buybacks which will support the share. Enea has ~SEK44m remaining on its repurchase authorization. Despite many positive signals from Enea, we think most of the potential is reflected in the share. Hence, we reduce our fair value range to SEK60(65)-170(180) with base Case of SEK115(120).