Teqnion AB (TEQ.ST) — PoorCharlie Research Report

Price N/A live quote

Market cap $299M 17.165M shares (flat since IPO; ~kr 3B at kr 175 reference)

Enterprise value N/A Net debt / EBITDA 1.6x (kr 1B credit facility)

Overall score 68 Average · out of 100

Score breakdown

68/100

Average

Moat

13/20

The model itself is the moat: disciplined 5-year-payback acquisitions, decentralised ownership, eternal holding horizon, 1.2% HQ overhead managing 38+ subsidiaries. Niche-leadership criteria deliver pricing power at the subsidiary level. Capped because the serial-acquirer category is crowded with proven Nordic peers.

Management

18/20

Founder-CEO Johan Steene (20 years), CCO Daniel Zhang. Extraordinary intellectual honesty — publicly graded 2025 performance “D minus,” named the exact failure mechanisms, credited team. Zero dilution, zero dividends, survival-first capital allocation. The strongest pillar.

Business risk

10/20

Small cap (~kr 3B), illiquid on First North, no analyst coverage. Key-person concentration in Steene + Zhang. FX volatility structural and growing with UK expansion. Active Irish lawsuit. EPS down 25% from 2022 peak. The lowest pillar.

Key ratios

11/20

ROIC 6.46% (well below 21%+ universe benchmark), 5yr ROIC median 12.13%, 3yr ROIIC -5.8%, 5yr FCF/share CAGR +1.7%. EBITA margin 14.3% record in Q1 2026; net debt/EBITDA 1.6x conservative. ~6.3% FCF yield at snapshot. Improving but currently the weakest set of ratios in the universe.

Valuation

16/20

~15.9x P/FCF TTM (below 10yr median 23.7x). Market implying 10–13% FCF/share CAGR — achievable if turnaround executes. Bear (flat / decline) = -47%. Base (kr 200) = +6%. Bull (15%+) = +86%. Score moves inversely with price.

0–39 Poor 40–59 Weak 60–74 Average 75–89 Strong 90–100 Exceptional

One-line thesis: Bet on a founder-led, decentralised Swedish serial acquirer of niche industrials whose management DNA is exceptional but whose execution track record is still being rebuilt after a 2022–2024 stumble — price is fair, not cheap, and the proof period is still early.

Part 1

Business Overview

1.1Business Model

Swedish serial acquirer of small profitable niche industrial businesses. Targets: specialty fasteners, compressed-air systems, aerospace servo motors, bogmats, beverage coolers, polymers, gravestones. Explicitly not a technology company despite the name.
Acquisition criteria: stable post-tax earnings of 10–30 MSEK; margins >10%; light balance sheets; niche market leadership; simple business models; a founder or long-tenured operator who wants to stay on; preference for businesses governed by physical standards or regulations.
Decentralised model. Tiny HQ team in Solna sets “ownership directives” and provides capital; acquired CEO runs the company. Holding period: forever. HQ overhead 1.2% of net sales (down from 1.7% in 2022).
Two segments (Q1 2026): Teqnion Nord (Sweden/Nordics) ~72% of revenue, 26+ subsidiaries; Teqnion Väst (UK/Ireland) ~28% of revenue, 12+ subsidiaries running at materially higher margins.
The serial-acquirer ROIC math. At ~5–6x EBITA the return on each acquisition is ~17–20% if performance holds; at 8x the return drops to ~12.5%. The KPI since founding: double EPS every 5 years (15% CAGR).
Three financial targets, ranked: (1) survive — net debt/EBITDA below 2.5x; (2) profitability — EBITA margin >9%; (3) shareholder value — double EPS every 5 years.
Emerging cluster/vertical model. From Q4 2024 onward, subsidiaries do their own bolt-ons (Avelair in compressed air; Eloflex into France; Wallmek into UK). The Constellation Software operating-group pattern is appearing bottom-up.

SourceTEQ-DOSSIER.md §1 · teqnion-arsredovisning-2025.pdf ^{[1] [2]}

1.2Revenue Sources

Metric	Q1 2025	Q1 2026	YoY change
Net sales	kr 406M	kr 474M	+17%
Organic revenue	—	-5%	(deliberate pruning)
FX-neutral organic	—	~-0.5%	roughly flat
EBITA	kr 33M	kr 68M	+106%
EBITA margin	8.1%	14.3%	+6.2 ppt (record Q1)
Teqnion Nord EBITA margin	5.0%	11.6%	+6.6 ppt
Teqnion Väst EBITA margin	27.5%	26.4%	-1.1 ppt
Profit before tax	kr 46.5M	kr 53.0M	+14%
EPS	kr 2.13	kr 2.04	-4%
FCF (excl. acquisitions)	kr 18.5M	kr 19.8M	+7%
Net debt / EBITDA	1.8x	1.6x	improved

Why EBITA +106% but EPS -4%? Three forces: (1) FX headwind — GBP weakened against SEK in 2026 vs strengthening in 2025; kr 15M EBT swing from FX alone (~30% of EBT); (2) higher taxes — operating profits roughly doubled, taxes followed (kr 9.9M → kr 18.1M); (3) financial items swing — +kr 14.6M → -kr 14.5M, a kr 29M negative swing, almost entirely FX on loans and earn-out discounting. Underlying EBT (stripping FX) grew approximately +79% to +147%.

SourceTEQ-DOSSIER.md §2 · interim-report-january-march-2026-teqnion-ab.pdf ^{[1] [3]}

1.3Key Performance Indicators

38+ subsidiaries across two business areas (Nord 26+, Väst 12+).
Q1 2026 EBITA margin 14.3% — record Q1. Nord went from 5.0% to 11.6% in one year.
Teqnion Väst EBITA margin 26.4% — more than double Nord, structurally higher quality.
HQ overhead 1.2% of net sales (down from 1.7% in 2022). 3-person core HQ team managing 38+ subsidiaries.
Net debt / EBITDA 1.6x vs 2.5x ceiling. Credit facility expanded to kr 1 billion.
FY2025: 9 acquisitions (record, vs 2–3/year historically). 2026 guided to “a handful” with higher quality and average size.
EPS trajectory: 4.95 (2021) → 7.54 (2022 peak) → 5.74 (2025) → 5.64 R12 at Q1 2026. Down 25% from peak. The single most-watched metric.
Share count 17.165M, flat since IPO. Zero dilution. Zero dividends. SBC negligible (6,000 CEO options, 3,000 CCO options total).
FCF (excl. acquisitions): kr 64M (FY2023) → kr 82M (FY2024) → kr 173M (FY2025, WC-boosted). Normalised FY2025 FCF kr 120–130M.

SourceTEQ-DOSSIER.md §5 & §7 · TEQ-Q1-2026-QA-Insights.md ^{[1] [4]}

Part 2

Moat

2.1Industry Overview & Growth

Nordic serial-acquirer category has multiple proven compounders (Lifco, Indutrade, Sdiptech). Teqnion is the smallest and youngest of this cohort — the bull case is that it is where Lifco was 15–20 years ago.
Hunting ground: Sweden + UK + Ireland for now. Management said they are “carefully looking for a third leg in the EU.” UK is a vastly larger acquisition pool than Sweden.
Target businesses: niche industrial leaders governed by physical standards / certifications / regulations — defense, aerospace, infrastructure, specialty machining, polymers. “Things that solve real problems and cannot be taken away by anything due to the laws of physics.”
Anti-fragile portfolio construction — subsidiaries designed so external shocks affect different subs in opposite directions: defense benefits from geopolitical tension; diesel-cost-saving solutions benefit from high oil; bogmats benefit from UK rain.
5-year payback discipline at 5–6x EBITA implies ~20% IRR on acquisition cost — the structural arithmetic of the model.

SourceTEQ-DOSSIER.md §1 & §5 ^[1]

2.2Qualitative Competitor Analysis

Lifco (STO:LIFCO)Tier 1

Proven, 20+ years. ~kr 100B market cap, ~kr 25B revenue, ~18% EBITA margin. The compounding benchmark for what Teqnion could become if execution holds for two decades. Disciplined acquisition culture, decentralised ownership model, very similar DNA. The peer that explains the bull case.

Indutrade (STO:INDT)Tier 1

Proven, 20+ years. ~kr 60B market cap, ~kr 28B revenue, ~14% EBITA margin. Larger industrial product distribution focus. Demonstrates the serial-acquirer category at scale; another reference compounder.

Lagercrantz (STO:LAGR-B)Tier 2

Niche tech and industrial products. Smaller than Lifco / Indutrade but proven over multiple cycles. Often grouped with the Nordic serial-acquirer cohort in valuation comparisons.

Sdiptech (STO:SDIP-B)Tier 2

Proven 10+ years. ~kr 15B market cap, ~kr 7B revenue, ~16% EBITA margin. Infrastructure niche focus. A useful middle reference point between Lifco scale and Teqnion scale.

SourceTEQ-DOSSIER.md §1 ^[1]

2.3Moat Analysis

Moat type	Strength	Evidence
Decentralised culture	Strong	1.2% HQ overhead on 38+ subsidiaries. Ownership directives + sub-boards. Owners want to sell to Teqnion because of the “Run far, be nice!” culture, not for the highest price.
Capital allocation discipline	Strong	5-year-payback rule. 5–6x EBITA target multiples. Survival-first priority ordering. Never used stock as acquisition currency — share count flat since IPO.
Sub-level pricing power	Medium	Niche-leadership criterion: subsidiaries chosen because they avoid price competition. Margins >10% required pre-acquisition.
Founder-CEO continuity	Strong	Steene 20-year tenure; Zhang since 2021. Personal accountability for failures (“D minus”) signals trustworthiness with capital.
Switching costs (sub-level)	Medium	Subsidiaries governed by physical standards, certifications, regulations. Defense / aerospace / infrastructure customers are sticky.
Network effects	Weak	Limited — subsidiaries operate independently; no group-level platform effect yet (though cluster/vertical bolt-ons are an emerging pattern).
Scale (vs peers)	Weak	~kr 3B market cap vs Lifco ~kr 100B. Smallest of the Nordic serial-acquirer cohort. Cost of capital and deal access disadvantaged vs peers at scale.

SourceTEQ-DOSSIER.md §1 & §5 · Teqnion 2026 Q1 Q&A — YouTube.txt ^{[1] [5]}

2.4Additional Moat Considerations

Selected from the 26-item framework. Items shown are the strongest supporting points and the most material concerns for Teqnion specifically.

YesFounder-CEO ownership cultureSteene 20 yrs; flat share count since IPO; signs every letter “Run far, be nice!”

YesLow HQ overhead1.2% of net sales for 38+ subsidiaries — structural serial-acquirer quality gate

YesZero dilution17.165M shares since IPO; never used stock as acquisition currency

YesDiversified subsidiary portfolioDefense, aerospace, infrastructure, polymers, gravestones — anti-fragile design

YesSub-level niche leadershipAcquisition criteria require margin >10% and niche position pre-deal

YesCapital allocation rules5-year payback at 5–6x EBITA; conservative net debt/EBITDA <2.5x

YesIntellectual honestyCEO publicly grades 2025 performance “D minus,” names internal failure mechanisms

ModOperating leverageQ1 2026 EBITA +106% on revenue +17% — operational fix is working but early

ModPredictability of revenueOrganic -5% in Q1 2026 (deliberate pruning); structural organic growth path not yet quantified

NoROIC vs universe benchmarks6.46% vs 21%+ universe range — below cost of capital as reported

NoKey-person concentrationAcquisition origination still in Steene + Zhang; full delegation “not in a while”

NoFX volatility / EPS noiseGBP/SEK translation drove kr 29M financial-items swing in one quarter

SourceTEQ-DOSSIER.md §5 & §6 · Meta analysis from poorcharlie.io.txt (framework) ^{[1] [9]}

Part 3

Management

3.1Leadership & Tenure

Johan Steene — Founder, CEO. At Teqnion since 2006 (20th year as of Q1 2026). Ultramarathon runner. Signs every letter “Run far, be nice!”
Daniel Zhang — CCO (chief commercial officer) and deputy CEO. Former McKinsey/Bain. Joined 2021. Leads all acquisition origination and deal execution.
Founder direct stake: Johan Steene holds 861,471 shares + 6,000 options = ~5.0% of 17,165,756 shares outstanding. Steene takes zero board fee (only CEO compensation); CEO variable pay capped at 18 months’ salary, calculated as 3% of (current pre-tax profit − 3-year average), not pensionable.
Senior management stakes: Daniel Zhang (CXO, deputy CEO) 108,000 shares + 0 options; Jonathan Alexandersson (CCO) 2,250 shares + 3,000 options. ELT variable-pay pool capped at 4% of (PBT − 3-yr avg), max 18 months’ salary, not pensionable.
Board ownership (per 2026-03-07): Christopher Mayer 769,000 shares via Woodlock House Family Capital (4.48% — also top-10 shareholder); Mikael Vaezi 16,202 direct (Spiltan, his employer, owns 1,958,100 = 11.41%); Henrik Joelsson 2,750; Lena Almefelt (Chair) 3,000; Helena Nathhorst & Boel Sjöstrand 0. No director options outstanding.
Top-10 shareholder concentration: 66.19% of capital. Largest holders: Stravaigin AB 17.74%, Investment AB Spiltan 11.41%, Vixar AB 10.94%, Johan Steene (direct) 5.02%, Woodlock Family Capital 4.48%. Founder + aligned long-term Swedish small-cap investors dominate the register.
Equity comp structure: cash-based variable pay only (no LTIP / share-based plan for executives disclosed). Bonus tied to growth in pre-tax profit vs 3-year average, excluding goodwill impairments and earnout reversals. No dividend for FY2025 — capital reinvested.
Day Barton — Business area head, Teqnion Väst (UK). Newly appointed as part of Q4 2025 restructuring.
Martin Lagerberg — Business area head, Teqnion Nord (Sweden). Newly appointed at the same time.
Management narrative across Q3 2024 through Q1 2026 has been strikingly consistent: own mistakes, survival-first capital allocation, 5-year acquisition payback discipline, eternal holding horizon, “Run far, be nice!” culture.

SourceTEQ-DOSSIER.md §3 · teqnion-arsredovisning-2025.pdf pp.15–23 · Teqnion 2026 Q1 Q&A — YouTube.txt ^{[1] [2] [5]}

3.2M&A History

Year	Pace / Notable targets	Strategic role	Outcome
2021–2024	2–3 acquisitions / year	Building Nord base; UK expansion from 2022	Mixed — older Nord acquisitions of “lesser quality” (own words)
2022	Irish business (name undisclosed)	UK/Ireland geographic add	Vendor misrepresentation; provisional liquidation; ~kr 73M goodwill impairment in Q3 2025; lawsuit ongoing
Q3 2022 onward	UK expansion (Teqnion Väst)	Higher-margin geographic leg	Väst EBITA margin 26.4% in Q1 2026, more than double Nord
2025	9 acquisitions (record), incl. Birketts Bogmats, HT Servo, Midlands Special Fasteners	Higher-quality cohort; Formula 1 / aerospace / infrastructure niches	Margins above group average; credit facility expanded to kr 1B
Q4 2024 onward	Subsidiary-level bolt-ons (Avelair→Cambs+Power Air; Eloflex→France; Wallmek→UK)	Cluster/vertical model emerging bottom-up	Constellation Software operating-group pattern appearing
2025 organisational restructuring	Two business areas (Nord / Väst) with dedicated heads	Scalable platform replacing flat structure	Q1 2026 record EBITA margin; “multitasking like madmen days are gone”
2026 guidance	“A handful” with higher quality and average size	Quality over volume after the 2025 record	Pace in 2026 to be confirmed

Track record Mixed — the model is fundamentally sound but the 2022 Irish acquisition was a real failure (vendor misrepresentation, lawsuit, kr 73M impairment). The post-mortem changes (personal background checks, early IT/bank system control) are credible. The 2025 cohort (9 deals at higher quality) is the proof set; FY2026 execution will tell whether the structural fix is durable.

SourceTEQ-DOSSIER.md §3 & §5 ^[1]

3.3Said vs Delivered

Promise	When	Outcome	Consistent?
“Get our money back on acquisitions in ~5 years”	Ongoing, every Q&A	Cohort-level analysis confirms for pre-2022 acquisitions; Irish sub is the known failure (~2% of revenue)	Confirmed at portfolio level
“EPS will double every 5 years (15% CAGR)”	Every annual report	EPS 4.95 (2021) → 5.74 (2025): +16% in 4 years; from 2022 peak EPS down 25%	Target not met from peak; barely met from 2020 trough
“EBITA margin target above 9%”	Ongoing	FY2025: 11.3%; Q1 2026: 14.3% record	Exceeded
“Net debt/EBITDA below 2.5x”	Ongoing	Q1 2026: 1.6x	Comfortably within
“We made mistakes in DD process [Irish sub]; we have strengthened it”	Q3 2025 onward	No new impairments or DD failures since; 3 prospective deals walked away from due to shaky personal backgrounds	Actions taken; too early to fully prove
“The 2025 restructuring will create a scalable platform”	Q4 2024 / Q1 2025	Q1 2026 EBITA margin 14.3% record; “multitasking like madmen days are gone”	Early evidence confirms
“Organic revenue down due to deliberate removal of unprofitable business”	Q4 2025, Q1 2026	5 companies most responsible for negative organic saw combined earnings +68% (kr 10.3M → kr 17.3M)	Margin expansion from pruning is real
“We never use stock as acquisition currency”	Multiple Q&As	Share count flat at 17.2M since IPO; all acquisitions cash + earn-outs	Consistent
“A handful of acquisitions per year”	Every year	2021–2024: 2–3/yr; 2025: 9 (record)	2025 was anomalous; 2026 pace to be confirmed

Verdict The EPS target is the clear miss. Everything else has been delivered or is tracking as stated. The miss is partly explained by non-cash FX accounting, taxes on higher profits, and the Q3 2025 goodwill impairment, but the fact remains. Management owns this (“D minus,” “our fault”) without deflection. Operational metrics (EBITA, margins, FCF) are all healing as promised.

SourceTEQ-DOSSIER.md §4 · Teqnion 2025 Q3/Q4 Q&A — YouTube.md ^{[1] [6]}

Part 4

Key Ratios

4.1Growth Rates

Metric	1Y	3Y CAGR	5Y CAGR	10Y CAGR
FCF Growth (Per Share) %	51.80%	18.20%	1.70%	0%
Revenue Growth (Per Share) %	17.40%	8.80%	19.60%	0%
EPS without NRI Growth %	-12.80%	-14.50%	6%	0%

1Y FCF/share growth 51.80% Exceptional bounce off a cyclical low, but the 5Y CAGR is just 1.70% — the question is whether 2026 is the start of a new trend line or another peak in a choppy series.

EPS 1Y -12.80% and 3Y -14.50% Both windows are negative and well below the <0% concerning bar; acquisitions are diluting per-share earnings rather than compounding them, which is the wrong direction for a serial acquirer.

SourcePortfolio snapshot 30.05.2026.txt (GuruFocus export) ^[10]

4.2Margins

Metric	Current	5Y Growth Rate	5Y Median
Gross Margin %	48.41%	3.30%	N/A
Operating Margin %	8.61%	-12.40%	9.73%
FCF Margin %	9.32%	N/A	7.76%

Operating margin 5Y growth +3.30% Slow but real mix improvement; gross margin 48.41% at the group level reflects deliberate selection toward more defensible niches.

Operating margin 8.61% vs 5Y median 9.73% Currently <10% (thin bracket) and ~110 bps below the 5Y baseline; Q1 2026 EBITA margin of 14.3% suggests the trough is set, but the trailing print still flags compression.

SourcePortfolio snapshot 30.05.2026.txt ^[10]

4.3Capital Efficiency

Metric	Current	5Y Median
ROIC %	6.46%	12.13%
ROCE %	11.88%	19.35%
ROE %	11.12%	21.24%
Cash Conversion Ratio	1.80	0.92

ROIIC % (Return on Incremental Invested Capital)

Period	ROIIC %
1-Year	5.59%
3-Year	-5.80%
5-Year	0.80%

Note — capital efficiency below benchmark ROIC 6.46% vs portfolio 21%+ benchmark, and 5Y ROIIC near zero. The serial-acquirer model is the moat; current ratios trail because deals have not yet compounded.

3Y ROIIC -5.80% Three years of value-destructive incremental capital deployment — the recent cohort of deals collectively earns less than the cash and debt put into them, which is the opposite of the serial-acquirer thesis.

Cash Conversion Ratio 1.80 vs 5Y median 0.92 Cash flow is well ahead of accounting profit this year (working-capital release plus low capex); a useful tailwind that softens the capital-efficiency picture if it persists.

SourcePortfolio snapshot 30.05.2026.txt ^[10]

4.4Balance Sheet Health

Metric	Current
Debt-to-Equity	0.73
Cash-to-Debt	0.26
Interest Coverage	3.43
Current Ratio	1.89

Current Ratio 1.89 above the liquid bar Cleanly above the >1.5 liquid benchmark; short-term solvency is not the issue here.

Interest Coverage 3.43 Below the <5 stressed line, which is uncomfortable for an acquirer carrying GBP earn-out debt; pairs with Debt/Equity 0.73 to show the balance sheet has less room than the equity narrative implies.

SourcePortfolio snapshot 30.05.2026.txt ^[10]

4.5Shareholder Returns & Other Metrics

Metric	Current
1-Year Dividend Growth Rate (Per Share) %	N/A
3-Year Dividend Growth Rate (Per Share) %	N/A
Dividends per Share (TTM)	0
1-Year Share Buyback Ratio	N/A
3-Year Share Buyback Ratio	-2.10
5-Year Share Buyback Ratio	-1.60
Goodwill-to-Asset %	0.48
Stock Based Compensation (mm)	0
Free Cash Flow (mm)	kr 174.20M

Stock-based compensation = 0 Confirms cash-only variable comp; nothing leaking to dilution on the kr 174.20M FCF, well clear of the <5% clean bar.

Goodwill-to-Asset 0.48 with 3Y buyback ratio -2.10% Goodwill clears the >0.4 acquisition-heavy threshold and the float has expanded over three years — the 38+ deals at chunky multiples are showing up on both sides of the balance sheet and per-share count, which is the cost behind the weak ROIIC.

SourcePortfolio snapshot 30.05.2026.txt ^[10]

Part 5

Valuation

5.1Current Multiples vs 10-Year Context

Multiple	Current	10yr median	Read
P / FCF	15.9x	23.6x	Compressed vs history
EV / FCF	18.8x	—	Includes net debt
EV / EBIT	17.3x	—	Reasonable for serial acquirer
P / E (no NRI)	28.6x	—	Elevated; EPS suppressed
FCF Yield	6.29%	—	Cheap on multiples

Price is not the problem Teqnion looks cheap on every multiple, but ROIC is the issue, not price. The capital-efficiency question (covered in Part 4) is whether the operational fix is structural or cosmetic — that determines whether these multiples re-rate up or whether earnings drift down to meet them.

SourceTEQ-DOSSIER.md §8 ^[1]

5.2Reverse DCF — What the Market Prices In

Reference price kr 175. Normalised FCF/share ~kr 7–8 (FY25 reported kr 10.1 is WC-boosted). P/FCF on normalised ~22–25x.

Stage	Growth rate	Comment
Growth stage (10yr)	~10–13%	Below management 15% target but above the achieved 5yr
Terminal stage	3%	Standard long-run assumption
Implied fair value	—	~kr 175

What this means The market is implying approximately 10–13% FCF/share CAGR over 10 years on the normalised FCF base. Management's 15% EPS CAGR target would over-deliver vs the implied rate. The valuation is fair, not cheap — the upside depends on the operational fix being structural, not cosmetic.

SourceTEQ-DOSSIER.md §8 ^[1]

5.3DCF Scenarios

Scenario	Growth path	Terminal	Fair value (3–5yr)	vs kr 175
Market implied	10–13% FCF CAGR	3%	~kr 175	—
Bear (turnaround stalls)	flat / decline	2%	~kr 100–120	-31% to -43%
Base (turnaround executes)	10–15% EPS CAGR	3%	~kr 200–250	+14% to +43%
Bull (Lifco-like 20yr arc)	15%+ sustained	3%	~kr 350+	+100%+

Asymmetry / conclusion Base case (kr 200): +6% spread to today. Bull case (kr 350+): +86% if the Lifco-like 20yr arc plays out. Bear (kr 100–120): -47% if the turnaround stalls. Position sized so a failure is a 50–70 bps portfolio impact; large enough to matter meaningfully if the turnaround produces upside. The trigger to add is R12 EPS sustainably above kr 7.00, which would confirm the turnaround is compounding, not just recovering.

SourceTEQ-DOSSIER.md §8 & §9 ^[1]

Part 6

Risks

6.1Red flags, ranked by severity

ROIC is the lowest in the portfolioSeverity: high (structural, improving slowly). ROIC 6.46% vs 21–90% range elsewhere; 5yr median 12.13%; ROCE 11.88%; 3yr ROIIC -5.80%. Goodwill (kr 1,022M = 48% of assets) inflates the capital base — inherent to serial acquirers paying 5–8x EBITA. The real question is incremental ROIC: at 5–6x EBITA, ~17–20% is the target. 1Y ROIIC has just turned positive (+5.59%). ROIC must improve to 10%+ on a trailing basis to validate the model.
EPS down 25% from 2022 peakSeverity: high (improving but unresolved). 3.5 years below 2022 peak (kr 7.54 → kr 5.64 R12 at Q1 2026) is the single most important number for a company whose stated primary KPI is doubling EPS every 5 years. Mitigants are real (FX non-cash swings, taxes, Q3 2025 goodwill impairment) but the fact stands. Thesis requires R12 EPS to resume upward trajectory toward kr 7.00 and then kr 8.00+. Watch Q2 and Q3 2026.
Organic revenue negative (-5%) with no clear timeline to turning positiveSeverity: medium. All net revenue growth is acquisition-driven. Organic -5% in Q1 2026 (FX-neutral ~-0.5%). Management says this is deliberate pruning — credible given the margin record — but the compounding model eventually requires organic top-line growth alongside acquisitions. Zhang acknowledged: “we need to increase organic revenue growth.” No quantified timeline.
FX translation volatility is structural and growing with UK expansionSeverity: medium. Väst generates GBP earnings translated to SEK. GBP-denominated loans and earn-out liabilities add another FX layer. Q1 2026 showed kr 29M swing in net financial items from FX alone (~55% of reported PBT). As Väst grows from 28% toward potentially 40–50% of revenue, this volatility increases. No practical hedge. EPS will remain noisy for years.
Key-person concentration (Steene + Zhang) at HQSeverity: medium. With new area heads (Day Barton, Martin Lagerberg) direct reporting dependency has reduced, but acquisition origination and cultural glue are still concentrated in two people. Zhang confirmed acquisition process is not yet delegated. If either departed, deal flow would suffer and the management premium in the valuation would evaporate. Smaller company with no deep bench beyond the two founders and two new area heads.
Irish lawsuit (active, multi-year, unknown quantum)Severity: medium-low. Provisional liquidation of the Irish subsidiary in Irish courts; Teqnion pursuing damages from vendors. No monetary recovery expected soon. The sub represents ~2% of revenue (already written down; kr 73M goodwill impairment in Q3 2025 captured most of the loss). The risk is reputational and legal cost drag rather than financial. Described as “probably long” in timeline.
Goodwill 48% of assetsSeverity: low. Mathematical consequence of the acquisition model. At 1.6x net debt/EBITDA with a kr 1B credit facility, Teqnion can absorb occasional impairments without existential risk. Post-Ireland DD improvements (personal background checks, early IT/bank system control) reduce future impairment probability at the margin.

SourceTEQ-DOSSIER.md §6 ^[1]

Verdict

Hold at current size · do not add until R12 EPS sustainably exceeds kr 7.00

Stance: Hold at current size. ~15.9x P/FCF with the market implying 10–13% FCF/share CAGR. Bear: -47%. Base: +6%. Bull: +86%. Do not add until R12 EPS sustainably exceeds kr 7.00.
Add zone: R12 EPS confirmed above kr 7.00 (currently kr 5.64); evidence of the operational fix being structural, not cosmetic; ROIC ticking up toward 10%.
Trim trigger: EBITA margin reversion below 12% sustained; OR new DD failure / impairment; OR Steene or Zhang departure; OR EPS still below 2022 peak by end of FY2026.
Watching: R12 EPS trajectory (priority 1), Q2 2026 results July 18, 2026, EBITA margin sustainability, ROIC trend toward 10%, 2026 acquisition pace and quality, Väst margin normalisation, third EU geographic leg, Irish lawsuit, credit facility utilisation.
Next review: Q2 2026 interim report — July 18, 2026.

Last reviewed May 25, 2026 after Q1 2026 results · Next review Jul 18, 2026 (Q2 2026)

References

Where every claim came from

[1]Company information/Teqnion/TEQ-DOSSIER.mdLiving research-report source file, last updated 2026-05-25. Primary reference for all qualitative and quantitative content unless otherwise noted.
[2]Company information/Teqnion/teqnion-arsredovisning-2025.pdfFY2025 annual report — primary source for business model, segment structure, FY25 financials, capital-allocation framework.
[3]Company information/Teqnion/interim-report-january-march-2026-teqnion-ab.pdfQ1 2026 raw interim report — primary source for Q1 2026 financials and segment tables.
[4]Company information/Teqnion/TEQ-Q1-2026-QA-Insights.md and TEQ-earnings-analysis-Q1-2026.mdInternal Q1 2026 earnings analysis and Q&A insights.
[5]Company information/Teqnion/Teqnion 2026 Q1 Q&A — YouTube.txtQ1 2026 earnings call Q&A transcript — primary source for management commentary on EBITA bridge, FX, organic pruning, restructuring.
[6]Company information/Teqnion/Teqnion 2025 Q3/Q4 Q&A — YouTube.md (and full Q&A series 2024 Q3 → 2026 Q1)Full quarterly Q&A transcript series for the trailing 7 quarters; the source for the “said vs delivered” consistency check.
[7]Company information/Teqnion/TEQ-Financials-Snapshot-2026-05-01.mdSnapshot of multiples, ROIC, ROCE, GF Score as of 2026-05-01.
[8]Company information/Teqnion/teqnion_annual_report_2024.pdf and teqnion-ar-2023.pdfFY2024 and FY2023 annual reports — used for prior-period EPS, EBITA, FCF history.
[9]Stock portfolio/Meta analysis from poorcharlie.io.txtScoring framework and 26-item additional-moat checklist; used for the structure of Part 2.4 only, not for Teqnion-specific content.
[10]Stock portfolio/Portfolio snapshot 30.05.2026.txtGuruFocus portfolio snapshot exported 2026-05-30; primary source for Part 4 ratios.

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