Strong profitability development continued. Strong momentum in Security Solutions.
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Frans spoke with Loihde’s Samu Konttinen about Loihde’s Q1 and the company’s outlook 
Topics:
00:00 Introduction
00:13 Q1 update
01:09 Profitability
03:13 Security solutions
05:20 Cybersecurity, cloud and connectivity
07:01 IT consulting
09:56 War in Iran
12:41 BLC Turva acquisition
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Frans was on the evening shift on Sunday and has finished the company report on Loihde.
Loihde’s Q1 report was clearly better than our expectations regarding profitability. Adjusted EBITDA grew strongly, even though revenue fell slightly short of our expectations. We raised our earnings forecasts for the current year due to strong Q1 profitability, but our forecasts for the coming years remain nearly unchanged. We consider the BLC Turva acquisition, currently under review by the FCCA (KKV), as a positive option in the valuation, as if realized, it would bring synergy benefits, nearly double the size of the Security Solutions segment, and sharpen the company’s profile as a focused security operator. However, in our view, Loihde’s valuation for 2026-27 (adj. P/E 16-15x) has already reached a tight level in terms of the risk/reward ratio following the strong share price performance. We are raising our target price to EUR 14.6 (prev. EUR 13.2), but we are waiting for a better buying opportunity and are changing our recommendation to Reduce (prev. Accumulate).
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Revenue fell -2%. At a quick glance, this company makes acquisitions annually, but revenue is growing clearly slower compared to the combined revenues of the acquired companies + existing revenue. Organic growth is likely significantly negative?
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Here are my estimates for organic development, taken from the company report.
In my opinion, organic growth has actually been at a quite healthy level in recent years, considering the overall market situation. Especially given the very weak market for IT consulting and new construction, the downturn in the Finnish economy, and companies’ need for cost savings. Organic growth has been driven by the Security business and particularly the largest business area, Security Solutions, whose development has been impressive.
At the moment (before the BLC Turva acquisition), revenue growth is almost entirely organic.
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