Q2 Preview: Transmission Visibility Remains Key

Research evidence excerpt

Q2 Preview: Transmission Visibility Remains Key

margin level as sustainable and

further upside coming from the ability to push utilisation and win high margin projects for the

capacity not set aside for frame agreements (~30%).

Weak markets & mix weighing on Connect. Momentum in EU construction markets remained

weak overall in H1, with the ME conflict bringing further uncertainty & higher inflation, price

upside is likely to partly offset the lower volumes, however. Similar to H2 last year, mix is likely

to remain unfavourable with higher growth in the lower margin Southern Europe region and

continued weakness in the high margin Nordic region. We model 4% growth helped by price

upside and weak comps, with margins improving slightly sequentially to 11.5%.

Guidance upgrade on Republic Wire (RW) but likely no underlying change. We expect mgmt

to include ~7 months of RW into the guidance driving an additional ~€30m EBITDA helped

by delivery starting on the synergies. However, with limited visibility on improved utilisation of

MI lines this year and a relatively weak EU construction market, we see limited upside to the

underlying guidance. We model €790m EBITDA 2026e, in line with cons.

Limited changes to estimates, PT to €155 - Retain Hold. We make limited changes to our

group estimates for 2026-2028e, however behind this are cuts to revenues in the Connect

segment offset by upgrades in Transmission from better margins. We keep our SOTP valuation

and lower the multiple in Connect to 6x from 7x EBITDA, with our group multiple staying at ~8x

EV/EBITDA 2027e and our PT moving to €155.

Lucas Ferhani * | Equity Analyst

44 (0) 20 7548 4728 | lferhani@jefferies.com

FY (Dec) 2025A 2026E 2027E 2028E Rizk Maidi * | Equity Analyst

44 (0) 20 7029 8632 | rmaidi@jefferies.com

Rev.