• Sales +4% vs. cons, adj. EBITA +20% vs. cons
• Minor positive consensus estimate revisions
• Awaiting improving market conditions

Q3'24 report

Q3 was slightly better than expected. B3 generated net sales of SEK 245m (+4% vs. FactSet cons, +4% vs. ABGSCe) and adj. EBITA SEK ~6m (+11% vs. cons, +20% vs. ABGSCe). We note that organic growth is approx. -7% y-o-y, and that is slightly better than our expected -9%. As we unpack the organic growth decline, we note that it originates primarily from a reduction of consultants, while the minor offsetting factors are primarily a higher share of sub-contractors and a positive calendar effect. Net income is SEK ~75m, and that is due to a non-cash revaluation of B3 Poland because of step-up accounting rules according to IFRS.

Thoughts and outlook

Macroeconomic data looks challenging for IT consultants, and B3 is still adversely impacted by these market conditions. That said, the utilisation appears to have stabilised according to the Q3 report, and the comps are also significantly easier going forward. On a positive note, we highlight that B3 Poland performs rather well in the context of the rest of the Group. Over time, this will add operating stability, which may materialise in smaller margin variations over the years. From a long-term point of view, we maintain our view that B3 has the necessary operating characteristics to generate margins in line with its financial targets.

Consensus estimate revisions

The B3 share is down ~31% YTD and is trading at ~7x '25e EV/EBITA on our unrevised estimates. Mechanically, the positive effect on consensus EBITA estimates based on isolated Q3 numbers would be within a low single-digit range for '24e-'26e EBITA. A presentation by the company will be hosted at 9.00 CET (link).