Overall, the Q2 results were better than expected. Topline improved from recent price hikes, coming in slightly above our forecast. Meanwhile, the customer intake was flat q-o-q (ABGSCe -2,500), which we find encouraging given that churn was likely high as a result of the price hikes. While the gross margin saw pressure due to recent price increases from network owners - coming in at 33.7% (vs. 33.9% in Q1 and ABGSCe 33.5%) - the higher sales combined with slightly lower opex led to the 14% EBITA beat. Opex was solid (-6% y-o-y), resulting in an EBITA margin of 8.7% (ABGSCe 7.8%), up from 7.7% in Q2'22 (but sequentially flat).
On outlook, Bredband2 is upbeat on improving the margin, while it cautions that churn might stay elevated in the near term.Valuation and estimate changesBredband2's share is -8% YTD and is trading at 10x EV/EBITA on our unrevised 2023 estimates. Meanwhile, the lease adj. FCF is 9%. Following the Q2 numbers, we expect consensus to raise '23-'25 EBITA forecasts by mid-single digit.Deviation tableSource: ABG Sundal Collier, company data
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