2Q26 – Growth Slows Further, While Margin Beats. €90m Additional Share Buyback Announced

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2Q26 – Growth Slows Further, While Margin Beats. €90m Additional Share Buyback Announced

UpdateMof -6% compared with our -3% forecast and revenue was 2% below consensus, and

Indtech, where organic growth was flat versus our +3% forecast and revenue was

4% below consensus. Management flagged Banktech's 6ppt legacy contract run-off

headwind, alongside softer market conditions, but we think underlying growth

slowed from the ~3% it delivered in Q1 to around 0%. Indtech was weighed down by

weak performance in Pulp, Paper & Fibre and volume-based businesses. Caretech

organic growth of -2% was in line with our forecast, with management calling out

strength in its modern software portfolio despite a 5ppt legacy headwind. In

aggregate, the phase-out of legacy contracts (already flagged) reduced organic

growth by 2pps at the group level. Order backlog was organically down 4% y/y and

2% q/q, providing limited evidence of an imminent growth recovery.

Margin strength an offset, but questions remain around the sustainability of

margin expansion: Adjusted EBITA was 13% above consensus, with the 14.9%

margin around 200bps above MS and consensus and up materially y/y. The beat was

broad-based, with Tech Consulting, Banktech and Indtech margins around 120bps,

190bps and 190bps above consensus, respectively, while Caretech was broadly in

line. Lower non-allocated costs also contributed approximately €2.3m, accounting

for around one-third of the group-level EBITA beat vs. consensus. Management

attributed the improvement primarily to the cost-optimisation programme, further

supported by improved capacity utilisation in Tech Consulting. The programme has

now delivered €115m of its €130m run-rate savings target, leaving only €15m of

additional run-rate savings under the formal programme.