The Q4 2022 net sales amounted to SEK108.8m and increased by 51% y/y due to solid acquired growth in the quarter, which exceeded our expectations by 8%. The EBIT amounted to SEK18.1m, corresponding to an EBIT margin of 16.7% (21.1%), compared to our expectations of 18.8%. According to management, the lower margin stems from the recent three acquisitions made within its Managed Service segment, which generally has lower margins than its Communication segments, while Infracom also made a reservation for increased electricity costs and a restructuring cost of SEK1.9m during the quarter.

According to management, the aim going forward is to realise synergies from the recent three acquisitions, where Infracom completed two in Q3 and one in Q4 2022, adding cSEK130m in sales based on pro forma figures. We note this implies continued substantial acquired growth ahead, while the somewhat lower margin in the quarter seems reasonable as it takes time to realise synergies. Moreover, management stated that the current market conditions give rise to continued interesting M&A opportunities. As such, we believe that Infracom will keep the acquisition pace ahead, as the current net debt/EBITDA of 0.2x makes room for further acquisitions.

We adjust our 2023e and 2024e forecasts following Infracom’s Q4 2022, increasing our sales estimates by c3-4% while we trim the EBIT margin for the same period. The revised forecast gives rise to a new Base Case of SEK34 (35), with new Bear and Bull Cases of SEK19 (20) and SEK46 (47), while Infracom is currently trading at an EV/EBIT of 10x based on our 2023e.