Scanfil is acquiring 80% of ADCO Circuits Inc. (“ADCO”), an Electronics Manufacturing Service company (“EMS”) based in the Greater Detroit area, the USA. This strategic acquisition accelerates Scanfil’s growth in the Americas region and the Aerospace & Defense industry, where ADCO generates 37% of its turnover.

Scanfil's Q1 report was rather neutral. Revenue decreased by 3% and the negative top-line development was mainly caused by sluggish demand, while the ramp-up of several new projects at various factories also limited sales.

In our view, the overall picture of Scanfil's Q1 report published yesterday was rather neutral, and we did not make any changes to our forecasts following the report. In our view, the stock is reasonably valued (2025e: P/E 13x, EV/EBIT 10x), but the expected return no longer exceeds the sustainable required return on a 12-month horizon due to elevated macro risks. Hence, we reiterate our target price of EUR 9.00 on Scanfil and lower our recommendation to Reduce (previously Accumulate) as the stock's upside narrows.

Scanfil's Q1 numbers were slightly below our estimates in a quarter dominated by the ramp-up of new projects. The company updated its earnings guidance indicator, but in practice the guidance remained unchanged, which was also in line with our expectations.