Bredband2: ABGSC's Investor Days feedback - ABG

Reiterates 7.5% EBIT margin in Q4e (vs. 6.5% in Q1)...
...chiefly driven by price hikes
10x '23e EV/EBITA


Price hikes on the agenda

Today, we hosted Bredband2's CEO Daniel Krook at ABGSC's Investor Days. Mr Krook reiterated the optimistic outlook of an improved EBIT margin throughout 2023, reaching ~7.5% in Q4'23 (vs. 6.5% in Q1) on the back of raised prices and further cost synergies. Since the acquisition of A3 in H2'20, Bredband2 has driven its operations through three phases: 1) consolidate the different brands into the Bredband2 brand, 2) increase marketing activities (which pressured its margins in Q2'22-Q4'22), and 3) now hike prices to enhance margins. The latter is also a result of increased network prices - particularly from the largest private actors; Telia and GlobalConnect - which means that Bredband2 is now looking to defend its margins (similar to recent comments from key peer/competitor Bahnhof). Mr Krook highlights the current inflationary environment as a driver for the increased network prices, and expects a slowdown in the growth of these rates in 2024.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/bredband2/Equity-research/2023/5/bredband2---abgscs-investor-days-feedback/