<a id="bm-comp-8ffa2a53-9232-46b1-ad91-d4b54a8c4449" name="bm-comp-8ffa2a53-9232-46b1-ad91-d4b54a8c4449" class="BMCustomAnchor"></a><table><tr><td bm-component-id="8ffa2a53-9232-46b1-ad91-d4b54a8c4449" style="vertical-align: top; width:100.000000%;"><ul><li>Solid Q3, particularly on EBITA margins</li><li>Price hikes to help margins in Q4e and beyond</li><li>Expect cons to do small revisions on '25e-'26e EBITA</li></ul></td></tr></table><a id="bm-comp-63255037-3d46-4746-bb0e-288421065071" name="bm-comp-63255037-3d46-4746-bb0e-288421065071" class="BMCustomAnchor"></a><table><tr><td bm-component-id="63255037-3d46-4746-bb0e-288421065071" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q3 results</h3><p>Sales SEK 438m (0% vs ABGSCe 437m), EBITDA 72m (-1% vs ABGSCe 73m), EBITA 45m (-1% vs ABGSCe 45m), EBIT 39m (5% vs ABGSCe 37m), EPS 0.03 / share (12% vs ABGSCe 0.03 / share). Please note that we had not included the acquisition of Bredbandsson into our forecasts, which likely contributed with sales of ~SEK 4m. FCF (excl. leasing and M&A) was strong at SEK 76m, up 52% y-o-y.</p><h3 class="bm-h3">Q3 thoughts</h3><p>The end-of-Q3 customer base was 512,500, up 9,500 of which Bredbandsson contributed with 7,500 customers (i.e. organic +2,000 q-o-q, vs. +2,600 q-o-q in Q2). The main driver for the solid organic growth was the recent marketing activity, which we find encouraging given our view that the Swedish fibre market is close to maturity. The gross margin of 32.2% declined from 33.6% in Q2, probably due to increased marketing activities and recent M&A activity. Nevertheless, Bredband2 managed to deliver a robust EBITA margin of 10.2% due to good cost control. In terms of guidance, the company highlights margin-enhancing efforts towards the second half of 2024, which we interpret as price increases. Historically, such efforts have paid off for both gross and EBITA margins, while the latter will also benefit from cost synergies with Bredbandsson.</p><h3 class="bm-h3">Valuation and estimate changes</h3><p>Bredband2’s share is trading at 11x EV/EBITA on our unrevised 2025 estimates. We expect consensus to leave ’25-'26 EBITA estimates largely unchanged.</p></td></tr></table><a id="bm-comp-fb28c22b-8a48-41a5-94df-9c79aa6b5788" name="bm-comp-fb28c22b-8a48-41a5-94df-9c79aa6b5788" class="BMCustomAnchor"></a><table><tr><td bm-component-id="fb28c22b-8a48-41a5-94df-9c79aa6b5788" style="vertical-align: top; width:100.000000%;"><table id="bm-img-065a02cd-42c4-4574-8f6d-8f2cc4d44efd" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Deviation table</td></tr><tr><td><img bm-img-encrypt="065a02cd-42c4-4574-8f6d-8f2cc4d44efd" bm-img-original-height="644" bm-img-original-width="845" bm-img-svg="image:image_upload/83124_6d3f1b95-3b41-462e-b383-dee9442d02c1.svg" bm-img-width-hint="100%" id="bm-id-f04ebc4a-90f4-44b5-bc26-b7cabea66c5e" src="https://abgsc.bluematrix.com/images/image_upload/83124_6d3f1b95-3b41-462e-b383-dee9442d02c1_726.png" svg="/nas/web/clients/abgsc/images/image_upload/83124_6d3f1b95-3b41-462e-b383-dee9442d02c1.svg" width="726" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table>