<a id="bm-comp-4f1c9645-9b37-46d4-af14-3717a43f5d79" name="bm-comp-4f1c9645-9b37-46d4-af14-3717a43f5d79" class="BMCustomAnchor"></a><table><tr><td bm-component-id="4f1c9645-9b37-46d4-af14-3717a43f5d79" style="vertical-align: top; width:100.000000%;"><ul><li>Europe and other markets continue to perform, North America less so</li><li>We reset our expectations-post Q2 PW, adj. EBITA cut 6-11%</li><li>Stock trading at 10.7x 2025e EV/adj. EBITA, 9.1x 2026e</li></ul></td></tr></table><a id="bm-comp-013c070a-7971-4c3f-9324-bd2516e08a4a" name="bm-comp-013c070a-7971-4c3f-9324-bd2516e08a4a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="013c070a-7971-4c3f-9324-bd2516e08a4a" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Clear actions to turn North America around</h3><p>Compared to the Q2 profit warning at the beginning of August, we were positively surprised by the Q2 actual report due to: 1) weakness concentrated in North America while Europe and other markets continue to perform well, and 2) the EBITA figures provided in the profit warning included larger one-offs than we thought, holding up adj. EBITA better than expected. Looking ahead, we expect that the North American growth recovery will be visible in H1'26e at earliest, in line with company communication. CEO Jessica Skon getting closer to the North American business should fuel focus on BTS' core offering and a return to higher growth (as she delivered as Head of North America between 2016-22). The new FY guidance of 'EBITA worse than 2024' already sets expectations low, as this is the lowest guidance phrase BTS uses. Essentially, even if there is downside to estimates, there is no risk of further guidance cuts. We expect 0-2% organic growth in Q3-Q4e before a recovery to 7% in 2026e on the North American rebound and easy comps.</p><h3 class="bm-h3">Adj. EBITA cut by 6-11%</h3><p>Given both the profit warning and the full report released last week, we are trimming our 2025-27e sales estimates by 3-5% and adj. EBITA by 6-11% (mainly driven by the North American business).</p><h3 class="bm-h3">DPS growth at risk</h3><p>On our updated estimates, the share trades at 10.7x 2025e EV/adj. EBITA and 9.1x 2026e. Given that we expect EPS to decline 60% in 2025e vs. 2024 (which saw a positive one-off), we estimate that the DPS will be cut by 35%, which would be the first-ever DPS reduction since 2001 (except during the pandemic in 2020). However, BTS possesses a net cash position and we believe it could conceivably prioritise a flat or increasing DPS above the payout ratio (y-o-y) to show that 2025e was an exceptionally weak year.</p></td></tr></table>