Bredband2: Feedback from ABGSC Investor Days - ABG

Focus in 2024e is on growth...
...while maintaining current EBITA margins amid operational leverage
10x-9x '23e-'24e EV/EBITA


Margin-expansion has recently been in the limelight

Today, we hosted Bredband2's CEO Daniel Krook at ABGSC's Investor Days. Mr Krook highlighted the successful merger with A3 (consolidated in H2'20), where the pro-forma based EBITA margin has improved to 10% (vs. the pre-merger metric of around mid-single digit) amid operational leverage, cost synergies, and an improved business mix (i.e. reduced consultancy-related sales in A3). On prices, Bredband2 has gradually been increasing prices during 2023; both to mitigate price hikes from the network owners (e.g. Telia Skanova) - which look to increase prices to a lesser extent in 2024 than in 2023 - and due to the inflationary environment. Bredband2 wants to remain in the low-price segment, as price is one of the key differentiators while its profits can still benefit from operational leverage. The company has so far seen limited impact from any weakening macro trends and could potentially be a relative benefiter due to its market position. Finally, Mr Krook said that he does not see international expansion as likely in the near-term, although he did not rule it out for the longer term.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/bredband2/Equity-research/2023/11/bredband2---feedback-from-abgsc-investor-days/