Implenia (AO) | Buy | Small deal but strong strategic fit

Research evidence excerpt

Implenia (AO) | Buy | Small deal but strong strategic fit

Implenia Buy | Target Price: CHF90.00

The more important aspect is the quality of the earnings being acquired. Engineering and structural design businesses typically

earn higher margins than traditional construction because they carry limited execution risk, require little capital, have lower

working-capital requirements and are not exposed to material inflation or subcontractor risk to the same degree as contractors.

Strategically, Zigmo also strengthens Implenia's positioning in Design & Build and integrated project delivery models. Projects are

moving away from traditional lowest-price tendering toward collaborative models where engineering expertise and early

involvement matter more. Owning additional engineering capability allows Implenia to engage earlier with clients, influence

project design, improve win rates and potentially capture downstream construction work later. This is particularly relevant in

Germany, where management sees substantial growth opportunities over the coming years.

The closest listed peers are engineering and consulting groups such as Sweco, AFRY, Arcadis and WSP Global. These businesses

generally trade at significantly higher valuation multiples than construction companies because investors value their higher

margins, stronger cash conversion, lower risk profile and recurring client relationships. In that sense, the acquisition marginally

shifts Implenia's business mix toward areas that public markets typically reward more highly.

The acquisition itself will not change group earnings forecasts. What matters is the signal. Implenia is moving upstream in the

value chain, increasing engineering exposure and building higher-margin service activities.

keplercheuvreux.com 2