Year-end report Rejlers AB January – December 2025

Rejlers AB reported 2025 revenue of SEK 4,741.0m, up 7.0% y/y with 6.5% organic growth, and Q4 sales of SEK 1,310.7m (+7.1%). EBITA rose to SEK 377.7m for the year (8.0% margin) and SEK 120.0m in Q4 (9.2% margin); operating profit was SEK 302.1m while net profit after tax totaled SEK 200.7m (EPS SEK 8.74), weighed down by negative net financial items driven by a SEK –20.3m revaluation of debt and acquisition costs. The Board proposes increasing the dividend to SEK 5.25 per share (from 5.00), underscoring management confidence after record sales and EBITA performance.

Analysis

Market structure: Rejlers (Nasdaq: REJL B) emerges as a beneficiary — 2025 organic sales +6.5% and Q4 EBITA margin 9.2% show demand resilience in energy, infrastructure and defence where public capex is sticky. Direct winners include Nordic utilities, defence primes and subcontractors able to scale engineering work; smaller regional consultancies and low-margin contractors face price pressure. Credit-sensitive instruments may reprice: Rejlers reported net financial items -51.6m SEK (revaluation of debt), so corporate bond spreads could widen near-term while equity dividends (proposed 5.25 SEK) support yield buyers.

Risk assessment: Tail risks include large project write-downs, adverse M&A revaluations (contingent consideration), and a regional recession reducing capex 15–25% — low-probability but >10% P/L impact. Immediate (days) risk is headline reaction to net financials; short-term (3–6 months) is integration and backlog conversion; long-term (1–3 years) depends on execution of cross-border projects and leverage management. Hidden dependencies: working-day effects distorted margins and EPS; covenant thresholds tied to net debt/EBITDA could trigger refinancing risk if leverage >3x.

Trade implications: Direct play — establish a modest long (2–3% portfolio) in REJL B, target 12–18 month total return 15–25% driven by multiple expansion and dividend; set stop-loss on >12% drawdown or if net debt/EBITDA >3.0x. Pair trade — long REJL B vs short SWECO.ST (or AFRY.ST) to capture Rejlers’ faster organic growth (6.5% vs peers ~3–5%); size neutral to beta. Options — buy 12-month call 15% OTM financed by selling 3-month calls to collect premium and enhance yield while limiting downside.

Contrarian angles: Consensus may underweight the balance-sheet headline — EPS fell to SEK 8.74 and net financials are volatile, so the market could over-penalize equity if debt revaluations normalize. Alternatively, the reaction may be underdone: stable EBITA margins and a higher dividend point to earnings resilience and potential rerating if backlog conversion accelerates. Watch for two triggers in 30–60 days: (1) Q1 backlog conversion and (2) confirmation of contingent consideration movements; fail either and trim exposure to zero.

Key Decisions for Investors

• Initiate a 2–3% long position in Rejlers AB (Nasdaq: REJL B) within the next 2–4 weeks to capture dividend (proposed 5.25 SEK) and expected 12–18 month re-rating; set stop-loss at 12% and hard exit if net debt/EBITDA exceeds 3.0x on next report.
• Implement a market‑neutral pair trade: long REJL B vs short SWECO.ST (or AFRY.ST) sized to equal beta exposure, hold 6–12 months to exploit Rejlers’ higher organic growth (6.5% vs peers ~3–5%) and margin resilience.
• Use options to enhance yield: buy a 12‑month REJL B call ~15% OTM and sell rolling 3‑month calls ~5% OTM to finance premium; target annualized carry >6% while keeping upside participation.
• Reduce or avoid exposure to Rejlers corporate debt/bonds until next 60 days’ disclosure on revalued liabilities; prefer IG Nordic contractors’ bonds instead if yield pick-up <150bps versus issuer-specific credit risk.
• Trigger checklist (monitor next 30–60 days): if Q1 backlog growth <+3% q/q OR contingent consideration revaluation flows create >SEK 50m negative P&L impact, reduce REJL B position to zero and redeploy proceeds to large-cap infrastructure names (e.g., VINX/AFRY) with stronger balance sheets.