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Bredband2

Bredband2

Broadband via fiber network

Bredband2 supplies broadband, IP Telephony, data storage and safety solutions through the fiber network. In addition, the company offers co-location for webservers, e-mail and other operation-critical systems with associated network services such as Internet and VPN. The customer base is mainly private clients, but Bredband2 also offers a variety of different products to companies. Today, Bredband2 is primarily operating in the open city networks, where there is free competition between different operators.

The digitalization trend favors Bredband2. There is an increasing demand on faster and more stable network connections. This is due to more and more connected devices, higher TV resolutions, video-on-demand and online games, to mention a few examples. Hence, there is a shift from older network connections to newer ones, like ADSL to fiber. Furthermore, the Swedish government has a set goal that 95% of the Swedish population should have access to broadband by 2020. If this market starts to saturate, there is an opportunity for Bredband2 to seize a better position in the B2B market.

The main risks for Bredband2 are 1) generic product, which makes price an important factor for customers. 2) Market maturity and increased competition, mainly from bigger players, could cause decline in growth without increased margins. 3) High dependence to the net owners, and their continued investments in market expansion.

SEKm 2021 2022e 2023e
Sales 1512 1551 1635
Sales growth (%) 91,9 2,6 5,4
EBITDA 220 245 275
EBITDA margin (%) 14,5 15,8 16,8
EBIT adj 97 96 132
EBIT adj margin (%) 6,4 6,2 8,1
Pretax profit 85 86 122
EPS rep 0,08 0,07 0,1
EPS growth (%) 119,1 -13,1 35,6
EPS adj 0,12 0,11 0,13
DPS 0,08 0,11 0,14
EV/EBITDA (x) 10,2 6,9 6
EV/EBIT adj (x) 23,1 17,7 12,6
P/E (x) 25,5 22 16,2
P/E adj (x) 18,3 14,5 12,3
EV/sales (x) 1,5 1,1 1
FCF yield (%) 9,4 12,1 14,9
Dividend yield (%) 3,7 6,8 8,6
Net IB debt/EBITDA 0,8 0,6 0,4
Lease adj. FCF yield (%) 5,9 6,6 9,3
Lease adj. ND/EBITDA -0,4 -0,5 -0,7
SEKm 2021 2022e 2023e
Sales 1512 1551 1635
COGS -978 -1005 -1043
Gross profit 533 546 592
Other operating items -314 -301 -317
EBITDA 220 245 275
Depreciation on tangibles -35 -41 -44
Depreciation on intangibles 0 0 0
EBITA 123 132 162
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 -17 -15
EBIT 94 96 132
Other financial items 0 0 0
Net financial items -9 -10 -10
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 85 86 122
Tax -3 -15 -26
Net profit 81 71 96
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 81 71 96
EPS 0,08 0,07 0,1
EPS Adj 0,12 0,11 0,13
Total extraordinary items after tax -3 0 0
Tax rate (%) -4,1 -17,8 -21,4
Gross margin (%) 35,3 35,2 36,2
EBITDA margin (%) 14,5 15,8 16,8
EBITA margin (%) 8,1 8,5 9,9
EBIT margin (%) 6,2 6,2 8,1
Pretax margin (%) 5,6 5,5 7,4
Net margin (%) 5,4 4,5 5,9
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 91,9 2,6 5,4
EBITDA growth (%) 176,2 11,6 12,2
EBIT growth (%) 119,4 2,1 37,4
Net profit growth (%) 162,7 -13,1 35,6
EPS growth (%) 119,1 -13,1 35,6
Profitability 2021 2022 2023
ROE (%) 15,8 13,3 18,3
ROE Adj (%) 22,1 20,1 24,1
ROCE (%) 12,3 11,1 15,5
ROCE Adj(%) 16,5 15,4 19
ROIC (%) 14,3 11 15,4
ROIC Adj (%) 14,8 11 15,4
Adj earnings numbers 2021 2022 2023
EBITDA Adj 223 245 275
EBITDA Adj margin (%) 14,7 15,8 16,8
EBITA Adj 126 132 162
EBITA Adj margin (%) 8,3 8,5 9,9
EBIT Adj 97 96 132
EBIT Adj margin (%) 6,4 6,2 8,1
Pretax profit Adj 117 122 152
Net profit Adj 113 107 126
Net profit to shareholders Adj 113 107 126
Net Adj margin (%) 7,5 6,9 7,7
Leasing payments -74 -86 -86
Depreciation and amortisation -97 -113 -113
Of which leasing depreciation -73 -86 -86
EO items -3 0 0
Impairment and PPA amortisation -29 -36 -30
EBITDA lease Adj 149 159 189
EBITDA lease Adj margin (%) 9,9 10,3 11,6
SEKm 2021 2022e 2023e
EBITDA 220 245 275
Net financial items -9 -10 -10
Paid tax -3 -15 -26
Non-cash items -5 0 0
Cash flow before change in WC 202 220 239
Change in WC 16 12 18
Operating cash flow 218 232 257
CAPEX tangible fixed assets -15 -13 -14
CAPEX intangible fixed assets -8 -11 -12
Acquisitions and disposals 0 -20 0
Free cash flow 195 188 230
Dividend paid -48 -77 -105
Share issues and buybacks 0 0 0
Other non cash items -234 -1 0
Decrease in net IB debt -142 1 18
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 653 653 653
Indefinite intangible assets 100 79 56
Definite intangible assets 0 0 0
Tangible fixed assets 32 26 23
Other fixed assets 47 47 47
Fixed assets 1086 1066 1035
Inventories 0 0 0
Receivables 122 116 123
Other current assets 0 0 0
Cash and liquid assets 126 150 190
Total assets 1333 1333 1347
Shareholders equity 534 528 518
Minority 1 0 0
Total equity 535 528 518
Long-term debt 53 53 53
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 32 32 32
Other long-term liabilities 0 0 0
Short-term debt 43 43 43
Accounts payable 162 166 175
Other current liabilities 283 286 302
Total liabilities and equity 1333 1333 1347
Net IB debt 171 146 107
Net IB debt excl. pension debt 171 146 107
Capital invested 730 698 649
Working capital -324 -336 -354
EV breakdown 2021 2022 2023
Market cap. diluted (m) 2067 1550 1550
Net IB debt Adj 171 146 107
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 2239 1697 1658
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 121,9 116,4 122
Capital invested turnover (%) 348,5 290,9 310,8
Capital employed turnover (%) 213,5 224 227,5
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 20,6 11,5 11,1
Payables / sales (%) 10,7 6,1 6
Working capital / sales (%) -20,6 -21,3 -21,1
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 32 27,7 20,7
Net debt / market cap (%) 8,1 9,4 6,9
Equity ratio (%) 40,1 39,6 38,5
Net IB debt adj. / equity (%) 32 27,7 20,7
Current ratio (%) 43,2 46,1 51,8
EBITDA / net interest (%) 2377,2 2438 2735
Net IB debt / EBITDA (%) 78 59,7 39
Interest cover (%) 1331 1315,9 1612,8
Lease liability amortisation -74 -86 -86
Other intangible assets 119 106 77
Right-of-use asset 249 249 249
Total other fixed assets 32 32 32
Leasing liability 232 232 232
Total other long-term liabilities 24 24 24
Net IB debt excl. leasing -61 -86 -125
Net IB debt / EBITDA lease Adj (%) -40,9 -53,9 -66,2
SEKm 2021 2022e 2023e
Shares outstanding adj. 957 957 957
Fully diluted shares Adj 957 957 957
EPS 0,08 0,07 0,1
Dividend per share Adj 0,1 0,1 0,1
EPS Adj 0,12 0,11 0,13
BVPS 0,56 0,55 0,54
BVPS Adj -0,12 -0,13 -0,14
Net IB debt / share 0,2 0,2 0,1
Share price 2,22 1,62 1,62
Market cap. (m) 2123 1550 1550
Valuation 2021 2022 2023
P/E 25,5 22 16,2
EV/sales 1,48 1,09 1,01
EV/EBITDA 10,2 6,9 6
EV/EBITA 18,2 12,8 10,2
EV/EBIT 23,8 17,7 12,6
Dividend yield (%) 3,7 6,8 8,6
FCF yield (%) 9,4 12,1 14,9
P/BVPS 3,87 2,94 2,99
P/BVPS Adj -17,38 -12,4 -11,51
P/E Adj 18,3 14,5 12,3
EV/EBITDA Adj 10,1 6,9 6
EV/EBITA Adj 17,8 12,8 10,2
EV/EBIT Adj 23,1 17,7 12,6
EV/cap. employed 2,6 2 2
Investment ratios 2021 2022 2023
Capex / sales 1,5 1,5 1,6
Capex / depreciation 98,3 87,4 97,6
Capex tangibles / tangible fixed assets 46 49,3 61,6
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 73,2 102,6 114,8
Lease adj. FCF yield (%) 5,9 6,6 9,3

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Media

Bredband2 - Company presentation with CEO Daniel Krook (in Swedish)
Bredband2 - Company presentation with CEO Daniel Krook (in Swedish)

Main shareholders - Bredband2

Main shareholders Share capital % Voting shares % Verified
Anders Lövgren 13.5 % 13.5 % 28 Jun 2022
Mark Hauschildt 9.7 % 9.7 % 28 Jun 2022
Alcur Fonder 9.2 % 9.2 % 28 Jun 2022
ODIN Fonder 9.1 % 9.1 % 31 Jul 2022
Aeternum Capital AS 4.9 % 4.9 % 28 Jun 2022
BI Asset Mgmt Fondsmaeglerselskab A/S 3.2 % 3.2 % 30 Jun 2022
Futur Pension 2.2 % 2.2 % 28 Jun 2022
Berenberg Funds 2.1 % 2.1 % 28 Jun 2022
Ulf Östberg 2.0 % 2.0 % 31 Mar 2022
Avanza Pension 1.9 % 1.9 % 28 Jun 2022
Source: Holdings by Modular Finance AB

Insider list - Bredband2

Name Quantity Code Date
Claes Fägersten - 307 956 SELL 19 May 2022
Claes Fägersten - 527 044 SELL 18 May 2022
Claes Fägersten - 320 000 SELL 17 May 2022
Claes Fägersten - 145 000 SELL 16 May 2022
Anders Lövgren +1 000 000 BUY 14 Feb 2022
Rolf Johansson + 500 000 BUY 11 Feb 2022
Rolf Johansson +1 500 000 BUY 14 May 2021
Joachim Landhager + 30 000 BUY 9 Apr 2021
Joachim Landhager + 15 000 BUY 9 Apr 2021
Mark Hauschildt +9 897 433 BUY 9 Dec 2020

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