EQT AB's Strategic Share Buyback Program: A Value-Creation Engine in a Volatile Market

EQT AB’s 2025 share buyback program has emerged as a cornerstone of its capital efficiency strategy, reflecting a disciplined approach to shareholder value creation amid market volatility. With a maximum budget of SEK 2.5 billion, the program aims to repurchase up to 5.535 million shares (0.45% of its capital) between July 18 and September 26, 2025 [1]. This initiative builds on a prior buyback in May 2025, where 4.931 million shares were repurchased at an average price of SEK 287, signaling EQT’s commitment to neutralizing dilution from employee incentives and enhancing earnings per share (EPS) [2].

The program’s execution has been robust, with EQT repurchasing 534,181 shares in late August 2025 at a weighted average price of SEK 340.25 [3]. By mid-September, cumulative repurchases under the program had reached 2.779 million shares, with SEK 1.75 billion remaining in the budget [1]. This aggressive buyback pace aligns with EQT’s broader capital recycling strategy, which includes strategic exits from portfolio companies like Beijer Ref AB, where a SEK 3.1 billion partial sale was executed to free up capital [4].

EQT’s capital efficiency metrics further validate the rationale for its buyback strategy. As of June 2025, the firm reported a Return on Invested Capital (ROIC) of 12.74%, significantly exceeding its Weighted Average Cost of Capital (WACC) of 10.51% [1]. This excess return underscores the company’s ability to generate value from its capital base, making share repurchases a logical use of funds. Additionally, EQT’s debt-to-adjusted EBITDA ratio of 1.2x and net debt of €1,928 million as of June 30, 2025, indicate a prudent leverage profile, supporting the sustainability of its buyback program [4].

Historically, EQT has demonstrated a consistent focus on optimizing capital structure. The 2025 program marks a shift from dilution mitigation to permanent share count reduction, with shares to be canceled post-repurchase [2]. This structural adjustment, combined with the allocation of shares to board members, reinforces alignment with shareholder interests. Analysts note that EQT’s buybacks are executed at a discount to intrinsic value, enhancing return on equity (ROE) and signaling management’s confidence in the company’s long-term prospects [3].

The strategic implications of EQT’s approach are clear. By leveraging its strong balance sheet—backed by €273 billion in assets under management—the firm is positioning itself to navigate market uncertainties while rewarding shareholders [2]. The buyback program complements EQT’s fundraising activities, such as the successful closure of EQT Infrastructure VI at €21.5 billion, demonstrating its ability to balance growth and capital returns [4].

In a volatile market environment, EQT AB’s share repurchase strategy exemplifies how disciplined capital allocation can drive value creation. With a clear focus on optimizing EPS, ROE, and capital structure, the company is not only mitigating short-term risks but also reinforcing its long-term competitive position.

Source:
[1] EQT AB (FRA:6EQ) ROIC % [https://www.gurufocus.com/term/roic/FRA:6EQ]
[2] EQT AB's Strategic Share Buybacks: A Blueprint for Value [https://www.ainvest.com/news/eqt-ab-strategic-share-buybacks-blueprint-creation-capital-efficiency-2505/]
[3] Repurchases of Shares by EQT AB During Week 34, 2025 [https://eqtgroup.com/en/news/repurchases-of-shares-by-eqt-ab-during-week-34-2025-2025-08-25]
[4] EQT AB (publ) Half-year Report 2025 [https://eqtgroup.com/en/news/eqt-ab-publ-half-year-report-2025-2025-07-17]