As the Q2 report deviated less than 1% on both sales and EBITA vs our expectations, and the outlook was kept, we make small underlying changes to our estimates where we primarily raise North America and Other markets, while reduce Europe, somewhat. We also add the acquisitions of Wonderway in Germany and SEAC in Thailand completed during the summer. Overall, we raise group EBITA by 0-2% in 2024e-26e.
Upside risk if targets are being met
We expect BTS to grow 9% organically beyond 2024e (target 20% total growth) and reach an EBITA margin of 15.1% in 2026e (target 17% mid-term) which clearly shows the potential upside in the case of reaching the financial targets in 2026-27. We think that the growth opportunity is possible to reach if the market improves, while the margin target looks stretched given that the margin peaked at 15.0% in 2021 when BTS delivered a large share of services virtually (low cost). To reach the targets would need both improved pricing, better utilisation and a higher share of revenues from SaaS/licence sales, which the acquisition of Wonderway is a step towards. The share is currently trading at 14.4x 2024e EV/EBITA and 11.7x 2025e on our revised estimates.
