Following Columbus's Q1 2026 Interim Report published on 7 May, we have updated our investment case.

Q1 2026 was a soft start to the year, with revenue declining 4% to DKK 418m and an EBITDA margin of 6.3% (Q1 2025: 10.7%), reflecting weaker-than-expected contribution margins across most Business Lines, particularly in January. More importantly, management notes that activity levels improved gradually through the quarter and that the positive trend has continued into early Q2, supported by a strengthened pipeline, solid order intake and several larger project wins during the quarter.

On this basis, Columbus maintains its full-year 2026 guidance of 0-5% organic revenue growth and an 8-10% EBITDA margin. Achieving this guidance implies a clear step-up over the remainder of 2026, with margin recovery back-end loaded and dependent on efficiency improvements and the ramp-up of signed contracts. The Q1 EBITDA margin of 6.3% versus the 8-10% full-year guidance underlines the execution risk, but the combination of a rightsized cost base and high operational gearing means even modest topline improvement should translate into meaningful margin expansion.

In our updated investment case, we highlight that AI is moving from ambition to execution at Columbus. Data & AI grew 23% in service revenue in Q1, and initiatives such as the Agentic Framework and "Agent in a Day" are generating concrete use cases with customers. Columbus's continued Microsoft Inner Circle position - for the 21st consecutive year - supports capture of the next product cycle as agentic AI gains traction. Geographically, Norway stood out with 26% service revenue growth, driven by major contract wins in Dynamics 365 and Data & AI, providing an early indication that demand normalisation is beginning to materialise in selected markets.

Among the key risks, we highlight that long-term margin visibility remains topline-dependent. The 15% EBITDA margin ambition under the "New Heights" strategy has been pushed out pending a new strategy expected in November 2026, and until new building blocks for closing the gap to the long-term targets are revealed, the market will have a hard time buying into them. We also highlight AI disruption and competitive intensity as concerns that may persist until Columbus demonstrates sustained growth and scaling AI use cases, while talent retention remains key for a ~1,440-employee consultancy, though high employee satisfaction and strategic AI hires indicate the risk is well-managed.

On valuation, Columbus trades at 0.9x EV/Sales (2026E) on guidance midrange, below Nordic IT peers at ~1.1x. The discount partly reflects the lower margin profile (8-10% EBITDA guidance vs. peer average). On EV/EBITDA, Columbus trades at 9.7x versus peers at ~7.6x, with the premium partly explained by Columbus being earlier in its margin recovery, with operational gearing to harvest as activity normalises. And management's shareholder value focus through the 2025 strategy review on ownership/consolidation - which ended without resolution but could resume if pricing conditions improve - acts as an additional anchor on the current share price levels.

For further insights into the Q1 2026 results and the outlook for the remainder of the year, you can watch the event we hosted with management: https://www.inderes.dk/videos/columbus-presentation-of-interim-report-q1-2026

Disclaimer: HC Andersen Capital receives payment from Columbus for a Digital IR subscription agreement. /Michael Friis, 16:50 11/05-2026.