• Sales -5% vs. cons, adj. EBITA -33% vs. cons
• Enters Norway with Habberstad acquisition
• Acquisition offsets negative consensus estimate revisions

Q4'24 report

Q4 was softer than expected. B3 generated net sales of SEK 336m (-5% vs. FactSet cons, -5% vs. ABGSCe) and adj. EBITA SEK ~15m (-33% vs. cons, -33% vs. ABGSCe). We note that the organic decline was approx. -12% y-o-y, and that figure is a bit lower than the expected -5%. This report confirms that conditions continue to be tough. However, both Swedish and Norwegian peers (Knowit & Bouvet) have also suffered, and missed the respective consensus estimates, as cyclical and industry-wide headwinds continue.

Thoughts and outlook

Conditions remain challenging for IT consultants as demand, utilisation and net recruitment are at relatively low levels. Directionally, B3 is no different. That said, B3 announced an acquisition of 51% of Habberstad, a Norwegian IT consulting business. The implied multiple is ~6x EV/EBIT based on the ~SEK 16m consideration for the 51% share (could be a somewhat higher multiple since the rest will be paid with performance-based earn-outs). B3 decided to scrap its dividend for 2024 in favour of the recently announced acquisition, a decision that is likely to be beneficial to mid-to-long-term earnings. We continue to believe that B3 has the necessary operating characteristics to generate margins in line with its financial targets.

Consensus estimate revisions

The B3 share is flat YTD and is trading at ~8x '25e EV/EBITA on our unrevised estimates. Mechanically, the organic impact on consensus estimates should be within a negative high single-digit range, but due to the announced acquisition of Habberstad, the negative impact is likely limited to a low single-digit range for '25e-'26e consensus EBITA. A presentation by the company will be hosted at 9.00 CET (link).