Sales and EBIT 0% and +5% vs. ABGSCe

Consolidation of private A3 customers now completed

Cons. likely to raise its ‘21-’23 EBIT forecasts by ~1-5%

Q2 results
Sales SEK 381m (0% vs ABGSC 380m), EBITDA SEK 54m (+4% vs ABGSC 52m), adj. EBITDA SEK 54m (+4% vs ABGSC 52m), EBIT SEK 25m (+5% vs ABGSC 24m).

Q2 thoughts
As in the previous two quarters, the integration of A3 remains in the limelight. The company says that this is progressing above its initial expectations, although that the customer intake has been hurt by its decision to consolidate all customers under the Bredband2 brand. As of Q2 this has been completed for its private segment, while migration of customers in its business segment is due in H2. For 2021, the firm’s key focus is to reap cost synergies with A3, whereas the focus for 2022 is to also find sales synergies. Owing to the latter, it seeks to hire some new salespeople in H2. All this should, in our view, already be largely reflected in consensus’ expectations.

Valuation and estimate changes
The Q2 report alone mechanically lifts our 2021 EBIT forecast by 1%. For 2022-2023e, we believe that estimates should come up mid- to low single digit. The stock is up 4% L1M and is currently trading at (pre-Q2 numbers) 15-12x EV/EBITA ‘21e-‘23e.

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ABG Sundal Collier - Introduce.se