BTS Group: We expect improvements ahead - ABG

Guiding for higher organic growth and margin expansion in 2025e
Acquisition of Sounding Board should be followed by more
12.1x '25e EV/adj. EBITA with 15% EBITA CAGR '25-27e


We expect improved organic growth in 2025e

The relatively weak organic growth in North America in Q4 (3% vs. 6% in Q3) was due to two larger clients cancelling their annual January kick-offs, which usually generate revenue during Q4 for BTS. We do not get the impression that this will have a larger impact on Q1 and expect organic growth to pick up to 6% again before accelerating during 2025e in North America. Due to the strong end to '24, we make positive revisions for the European segment, where we have seen an impressive growth comeback since the weak Q2'24, while we take a somewhat more cautious stance on Other markets due to the weak Q4 numbers and comments about caution in Italy and Spain. On our call earlier this week, CEO Jessica Skon was clear that we should see better organic growth and margin improvements in 2025e vs. 2024, and we agree — particularly given the recent improved growth momentum supported by e.g. US peer Accenture. We estimate 8% organic growth and 16% adj. EBITA growth in 2025e, which aligns well with the outlook of “2025 EBITA better than 2024”.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/bts-group/Equity-research/2025/3/bts-group---we-expect-improvements-ahead/