Earnings call highlights further upside to our estimates. CFO Billström commented that Q1 “could have been higher, but was a fairly good quarter”, emphasizing the seasonality of softer Q1s and Q3s, but stronger Q2s and Q4s. Mind you, the Q1 EBITDA margin came in at 11%, despite being a “soft quarter”. Against this backdrop, our estimate of a 10% FY’25e EBITDA margin seems conservative at the moment.

High margin acquisition of “Carbonia Composites”. Through its subsidiary Marstrom, Astor acquired 100% of tier 1 supplier of advanced carbon fiber and fiberglass components “Carbonia Composites” for SEK 55m (+ an option to acquire Carbonia’s real estate for SEK 57m), which implies a superb acquisition multiple of only 3.9x EV/EBITDA (8x EV/EBITDA incl. RE). The acquisition will be financed by cash (SEK 11m), debt (SEK 27.5m) and new shares (SEK 16.5m with a 6-12 month lock up). The acquisition fits strategically well into Marstrom, filling an important production method gap that comes with high volumes, but also can use Astor to enter the defence market, as it currently supplies (civil) automotive OEMs. Moreover, it is also highly margin accretive with a staggering 27% FY’24 EBITDA margin (vs. 11.5% at Marstrom or 15% at the Astor Industry segment)

At equity investment in “Nordic Shield Group” (NSG) and indirectly in “Cesium”. In a more complex deal, Astor acquired 30% of NSG, a Swedish civil defence group offering shielded structures like shelters, data centers, and containers, primarily for civil use. NSG is also in advanced talks to acquire 100% of “Cesium”, a producer of patented MSVs (mobile security vaults for rapid military deployment, bullet- and explosionproof). Cesium reported SEK 125m in FY’24 sales with a 26.4% EBITDA margin and has an order backlog of c. SEK 100m. Astor will support NSG’s acquisition by subscribing to a 30% capital increase (SEK 54.5m in cash), with the option to raise its stake to 39% (for another SEK 50m) if no other NSG shareholders participate. Based on this, the standalone acquisition multiple of Cesium is 8.1x EV/EBITDA, excluding NSG, whose financials are undisclosed. Thus, the blended multiple (NSG + Cesium) should be well below 8x EV/EVITDA. NSG will be part of the new segment Astor Protect, next to Airsafe (prev. Astor Tech). Mind you, NSG will not be consolidated, but recorded at equity.

Against this backdrop, we reiterate our BUY recommendation with an unchanged PT of SEK 40.00, based on DCF.