MWC 2024: what we learned

We attended the Mobile World Congress in Barcelona. Significant potential for improved 5G monetisation, leading to higher potential 5G capex.

Operational leverage driving earnings growth

Sales +5% y-o-y, EBITA +38% y-o-y. We lift '24e-'25e EBITA by 3% on 1% lower opex. 10x '24e EV/EBITA, we estimate 14% EBITA growth in '24.

12% EBITA beat on lower costs

We lift '25e EBITA 5% on new M&A

We include Stockholms Stadsnät AB into our forecasts, raising '24e-'25e EBITA by 3-5%. Share is trading at 10x '24e EV/EBITA.

Acquires Stockholm Stadsnät

Feedback from ABGSC Investor Days

More margin expansion in Q4e

Improved org. growth on price increases. '23e EBITA +3%, '24e-'25e largely unchanged. 11x-9x '23e-'24e EV/EBITA, 8-10% lease adj. FCF yields.

5% EBITA beat on better gross margin

Price hikes starting to bear fruit

EBITA up 17% y-o-y, 14% ahead of ABGSCe. We lift '23e-'25e EBITA by 5-4%. 10x '23e EV/EBITA, easy comps near-term.

Better across the board

Soft Q2e, but improved growth rates in H2e

Q2 report due 9 August. We expect GM pressure and churn to stay high, but this should reverse in H2e on recent price hikes.

SE fibre market: 10% growth 2022 (vs. 11% '21)

ABGSC's Investor Days feedback

EBIT margin in the limelight

With Q1 sales of SEK 383m (-1% vs. ABGSCe SEK 387m), Bredband2 delivered flat growth (both y-o-y and q-o-q), reflecting increased churn on the back of price increases.

Slight EBIT beat on lower opex