R+S Group ($RSGN), the European leader in electricity transformers, reported strong numbers.
The thesis is playing well, rerating in progress. Still a long way to go 24 CHF today vs 40 CHF in September, when it was valued in line with its peers. Congratulations to those who bought at 17 CHF with us.
Overall, the new figures reinforce our constructive stance on the company.
Operational EBITDA reached cCHF85m, corresponding to a margin of c20.5%
What stands out most is the very strong free cash flow generation. FCF of CHF48m significantly exceeded the Bernberg CHF16m estimate, pointing to solid working-capital discipline and strong cash conversion from earnings.
Robust cash generation allowed the company to delever the balance sheet much faster than we expected, with net debt declining to CHF63m or just 0.7x EBITDA, compared with the Bernberg estimate of 1.1x.
Order intake of CHF477m in 2025 resulted in a book-to-bill ratio of around 1.15x and lifted the backlog to CHF326m, providing solid revenue visibility into 2026 and, to a degree, 2027.
We would be buyers, as the case is being derisked. We are fully invested up to our max positioning.
Read the previous post here on R+S Group – includes the full investment thesis.
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