Solwers is updating its EBITA calculation method to align with market practice and makes a corresponding adjustment to its mid-term EBITA margin target, while the target level of profitability remains unchanged.
Solwers has previously excluded depreciation of right-of-use assets, which has historically had a 3pp impact on EBITA. Consequently, the mid-term EBITA margin target is lowered from over 12% to over 9%.
The growth target of over 20% annual sales growth and equity ratio target of over 40% remain unchanged.
In addition, Solwers also introduces adjusted EBITA which takes into account items affecting comparability, which consist of e.g. M&A costs (inlcuding changes in contingent consideration liabilities), capital market transaction costs, restructuring and integration costs, income and expenses arising from claims and credit losses.
We have estimated an EBITA (new definition) of EUR 4.5m in 2027, corresponding to an EBITA margin of 5.0%.
We view the change as positive as movements in contingent liabilities have historically been rather volatile and reported in EBITA.