+1,400 customers q-o-q (ABGSCe +3,500)
Bredband2’s Q3 report saw similar trends as in Q2: sequentially contracting gross margins but with a positive net customer intake (+1,400 vs. ABGSCe 3,500), as the company has emphasised customer growth. This strategy also weighs on sales (due to price discounts), resulting in sales of SEK 382m (-1% vs. ABGSCe) growing a mere 1% y-o-y. For Q4e, however, we expect both growth and margins to improve with Bredband2 having started to raise prices. On the flipside, we estimate -500 customers in Q4 on increased churn due to the price hikes. Although Q3 opex was largely in line with our forecast, EBITDA came in 3% below on the weaker sales. While we note that headcount declined by 2 q-o-q, we expect marketing activities to remain high in the coming quarters. Here, Bredband2 says that it will focus on increasing the net customer intake in 2023, which we anticipate will take place in the latter part of the year as the initial focus will be to enhance margins. Even so, we expect increased network prices to offset some of the margin expansion in ‘23e, which was caused by elevated energy prices.
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