BTS Group: Q2 beat, guidance downgrade not unexpected - ABG

Sales -2% vs ABGe, EBITA +13% vs ABGe from stronger margin
2023 guidance lowered to "EBITA in line with 2022" ("better than")
Estimates down 3-5% but H2 should return to earnings growth

Q2 details
Sales SEK 703m (-2% vs ABGSCe 720m, no cons), adj. EBITA 106m (13% vs ABGSCe 94m), adj. EBITA margin 15.1% (ABGSCe 13.0%). FX adj growth 0% (vs ABGSCe 1%) and EBITA fell -5% y-o-y (ABGSCe -16%).

Longer sales cycles cause guidance downgrade
The cautiousness seen in the US has started to be visible in Europe in Q2, causing sales growth to decelerate amid longer sales cycles from corporates for consulting services. Cost measures are paying off in the US, with North American EBITA +45% vs us, while the margin decline in Europe causing an EBITA -8% vs us. 2023 guidance is being lowered to “earnings in line with 2022” from “earnings will be better than in 2022” vs cons FY EBITA growth of 6% pre report, so not entirely unexpected in our view, but reflecting a slightly slower market than BTS saw at the Q1 report.

Estimates down slightly
The Q2 beat will be off-set by the guidance downgrade but not materially, and H2 should still show positive earnings growth y-o-y in both Q3 and Q4 to meet the new guidance as Q1 EBITA fell -16% and Q2 -5%. Consensus EBITA to come down 3-5% and share likely to underperform market slightly today although the set-up for coming quarters looks solid. The share trades at13.1x 2023e EV/EBITA on unrevised estimates. Conf call at CET 9.30. DeviationSource: ABG Sundal Collier, company data

Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/bts-group/Equity-research/2023/8/bts-group---q2-beat-guidance-downgrade-not-unexpected/