Well, this hasn’t exactly brought cheers, but my initial interest in the company arose when it became known that Mandatum wants out of it. That’s why I can follow the company, as it’s not a core stock in my portfolio. Otherwise, I probably wouldn’t have even touched it. Without major announcements, this might just muddle along for the next few years. That’s how I think as a casual investor.
If I remember correctly, Mandatum announced that it would hold a CMD in June. I believe by then, its fate will have become clear one way or another. Will there be discussions about an acquisition here, or will these shares then be sold to a new owner who would actively take new measures in the company? Mandatum has stated that as long as the price is right.
Of course, the situation might be so obvious that the second-largest owner wants out of the company. Which is why everyone is waiting for some interesting arrangements here. (Me too) Which ultimately might not come, but I’ll wait for the next few months. Otherwise, I’ll sell, because I can also find more interesting companies on the stock exchange.
@Roni_Peuranheimo already managed to interview Jeanette Jäger, I’ll be listening to this over the weekend:
Topics:
00:00 Introduction
00:11 Successes and failures of 2024
02:23 Profitability declined sharply at the end of the year
03:51 Regulatory changes in Sweden
05:18 Business Insight business in Sweden
06:21 Consumer Insight business in Finland
07:07 Stronger development in Denmark and Norway
08:34 Guidance
09:34 Financial targets
Enento’s Q4 figures fell short of our expectations, and the guidance provided for 2025 was subdued compared to our previous expectations. Regulatory changes affecting the Swedish credit market continue to keep the outlook cloudy and will likely dull the support for demand brought by a potential recovery in the economic environment. Forecast changes for the coming years were negative, and with the current valuation and outlook, we do not consider the stock’s risk/reward ratio particularly interesting.
Apparently, I looked at the wrong line after all; I myself thought I had seen that @Roni_Peuranheimo’s earlier forecasts for adjusted EBITDA for 2025 were 50.8 million.
From Roni’s new report: “adjusted EBITDA of 50-55 MEUR. The guidance was subdued compared to our expectations, with our previous forecasts being at the very top end of the range.”
Well, nothing new under the sun that I looked incorrectly; these adjusted figures seem to cause me great difficulty. Inderes certainly forecasts quite a fire sale for the stock, especially since the economic cycle might actually be changing, and if peace is achieved in the war in Ukraine, it could boost consumer confidence. Well, of course, this Inderes report must worry owners: “The main reason for the weakness, however, is still the Swedish credit information market, which, in addition to the headwind from the weak macroeconomic environment, is undergoing structural change.” and this “It is likely that these changes will cause headwinds for the Swedish market this year, even if the general economic environment picks up.”
Considering potential ownership arrangements, I definitely consider Enento at figures starting with 16 as an ‘add’ paper and will under no circumstances reduce my holdings. Well, let’s again consider that Inderes does not have a ‘hold’ recommendation, which forces analysts to choose a side.
Yes, reported and adjusted EBITDA probably got mixed up there. The EBITDA on our company page is indeed reported, which is somewhat lower than the adjusted one, as the company has some cash-flow-affecting one-off items (expected especially during H1 this year). The adjusted EBITDA forecast was around the upper end of the given range.
Good points, but we are not necessarily forecasting any major sales here; the target price remained higher than the stock price. To quote the report, “When the company returns to sustainable and clear earnings growth, the stock has clear return potential at current valuations, but regulatory changes, neutral short-term valuation, and lack of drivers do not make the stock’s risk/reward ratio interesting in our opinion at the moment.” This summarizes the analysis’s view quite well. It’s a bit unfortunate that the situation in Sweden may blunt the boost from an recovering economy. Although, a recovering macro is positive for the company in any case. You read the analysis well, a “hold” recommendation would certainly be quite apt if one were available . As always, every investor can and should draw their own conclusions!
In the autumn, there was speculation about a merger between Alma Media and Enento. These speculations have since ceased. Otava, in turn, bought Enento shares in January. It’s interesting to see if the purchases have continued in February. I haven’t personally observed any larger block trades. Potential purchases would, in my opinion, indicate that an insider project is not underway and Otava could buy more shares from the stock exchange. Otava’s Enento purchases, by the way, were on hold in the autumn when the rumors were at their peak…
In Alma Media’s Q4 webcast, CEO Telanne was asked about a potential larger acquisition, and Telanne admitted it was possible and that the balance sheet allows for it. Enento would be a large acquisition by Alma’s standards, but perhaps within the realm of possibility. The share price has come down to around 16 euros, which, with a premium, could mean a fair market capitalization of 400 million euros. At least in my view, Alma Media and Enento would fit together very well. Both also seem to be favored large holdings for Otava.
Alma Media’s head of legal affairs sold Alma shares at the beginning of February, and this would likely not be possible if a larger arrangement were currently underway.
Enento’s board is being renewed in an interesting way as the chairman changes from Patrick Lapveteläinen to Veli-Matti Mattila. Lapveteläinen has previously commented that Mandatum would be willing to sell Enento shares (he is also Mandatum’s chairman). Can anyone say what the change in chairman could mean for corporate arrangements?
In any case, Enento’s valuation is currently low, and it could attract potential buyers. Whether the valuation is suitable for the seller is another matter.
Next Monday we’ll see who has sold and who has bought. The buyer can probably be guessed based on history, and there’s also a strong suspicion about the seller. Surely some bigger arrangement will come sooner or later.
A bit of a conflicting feeling. The stock has performed poorly, and it doesn’t seem to be catching up to growth this year either. No wonder Enento doesn’t seem to interest investors in the big picture. The stock doesn’t even interest insiders; the last management transaction (purchase) seems to be from November 2023.
However, at the same time, someone is accumulating the stock in fairly large blocks (possibly the largest owner, Otava, based on the broker ID and recent months). If the main owner Otava’s purchases indeed continue, then it’s quite an interesting matter, and some potential is being seen there that others don’t currently recognize.
Mandatum’s departure from the board likely indicates that its shares will also soon be for sale. In my opinion, as long as Manta still owns its shares, there’s also some small option for a larger arrangement.
I myself hope for and expect above all a pick-up in the top line, not a potential takeover bid at such a low valuation level. Let’s stay and hang in there patiently.
Regulatory changes affecting the Swedish credit market are causing uncertainty in the short term, but players like Otava make investments with a much longer time horizon. Enento is, however, a good quality company and generates good results and strong cash flow in a difficult market. Short-term difficulties are opportunities for long-term investors. In addition, Otava may be considering corporate arrangements to accelerate value creation. Surely the merger rumors between Alma Media and Enento had some basis last year. I would not be surprised at all if it were to happen as early as 2025.
Otava was a buyer in February’s block trades, as was assumed. Evli Fund Management Company and The Church Pension Fund were sellers. Additionally, the new chairman Veli-Matti Mattila was buying, immediately 50k! The best news of the day for Enento’s owners.
4.6 on Mandatum’s CMD. I myself am of the opinion that before that, a solution regarding Enento can well be heard and seen. That would be the smartest thing for all parties.
Mandatum would no longer need to carry Enento with it, but on the other hand, Enento’s owners would get clarity on what is happening. Mandatum’s share in Enento is, however, the second largest owner. And they have clearly expressed a desire to get rid of their stake, which brings uncertainty to Enento.
@Roni_Peuranheimo What is this customer transfer to new sales partners all about? How significant a quantity are we ultimately talking about here? Janette told Matti in an interview that it’s a really large number of customers and products, and the change is apparently being made unilaterally to get higher value from new contracts.
Apparently, there might also be a clear decrease in revenue, but an improvement in profit margin?
Apparently, this concerns a sales partner dating back to the independent UC era. The partner has been expensive and hasn’t produced the desired results, and now sales are being decentralized, automated, and partly brought more in-house. Of course, the number of customers is certainly large, but the revenue impact of Swedish SME customers is still limited. The company has not disclosed any figures on this, but I believe we are still talking about a single-digit percentage of the group’s revenue. And the partner has indeed been apparently expensive and inefficient, so even if the company were to lose some revenue in the change, in terms of results, the change is apparently ultimately profitable. And I wouldn’t yet consider that revenue loss as certain or clear that there will be a “clear decrease.” However, it’s good to be aware of this risk, and the company mentioned this as one possible variable for the current year’s development (in my previous interview, this was mentioned at the 9:05 mark when discussing guidance).
Enento published its annual report for 2024 yesterday.
The Annual and Sustainability Review includes an overview of the strategy, business, markets, highlights, financial development, and a voluntary sustainability review in accordance with the principles of the European Sustainability Reporting Standards (ESRS).
The annual report thus provides a good insight into our business.
The Financial Review, including the Board of Directors’ report, financial statements, auditor’s report, and a statement on the corporate governance system, and the remuneration report, have already been published separately on February 14, 2025.
. As always, every investor can and should draw their own conclusions!