Modulaire Group - comment

The results were below our estimates, but an improving gross margin and stable unit sales will keep the bonds from widening as we expected. Modulaire needs construction to rebound (particularly in France), but easier comps in H2 will take some of the pressure off. In Q1 25, the impact on EBITDA was reduced due to strong gross margins, driven by increasing VAPS. Modulaire needs activity to pick up in Europe as average utilisation rates were down 1% to 76%, and Rental rates were down 4%. Management denies the market is oversupplied, but if utilisation rates fall further, making price rises stick will be difficult.