Better Collective: US market weakness drags down outlook
Research Update
2024-10-29
07:03
Redeye updates on Better Collective following preliminary Q3-results which were significantly weaker than expected. The company has also updated its financial guidance for 2024 which suggests continued soft performance in Q4, where the main negative impact seems to be driven by the US market. While the company also launches a cost savings program, the near-term growth outlook has weakened, and we lower our 2024-26E EBITDA by 19-20%.
Hjalmar Ahlberg
Anton Hoof
| EURm | 2022 | 2023 | 2024e | 2025e | 2026e |
| Revenues | 269.3 | 326.7 | 363.2 | 383.4 | 438.4 |
| Revenue Growth | 52.1% | 21.3% | 11.2% | 5.6% | 14.4% |
| EBITDA | 85.1 | 111.1 | 104.1 | 128.4 | 153.9 |
| EBIT | 70.4 | 82.8 | 64.5 | 87.6 | 112.6 |
| EBIT Margin | 26.2% | 25.4% | 17.8% | 22.9% | 25.7% |
| Net Income | 48.1 | 39.8 | 33.0 | 59.7 | 84.5 |
| EV/Sales | 3.6 | 4.9 | 2.6 | 2.2 | 1.7 |
| EV/EBITDA | 11.5 | 14.5 | 9.1 | 6.7 | 4.8 |
| EV/EBIT | 13.9 | 19.5 | 14.8 | 9.8 | 6.6 |
Better Collective's preliminary results for Q3 2024E indicate revenue coming in at EUR81m and EBITDA at EUR22m (EBITDA margin of 27%). This is significantly lower than Redeye’s forecasts, where we expected revenue of EUR103m and EBITDA of EUR32m (EBITDA margin of 31%). The company states that the soft performance is mainly due to lower-than-expected activity from US partners, while it also sees a continued slowdown in Brazil ahead of regulation. While the company sees continued strong long-term growth potential in both markets, the near-term outlook is soft. As such, the company also lowers its 2024E guidance, where it now expects topline of EUR355m-375m (previous EUR395m-425m) and EBITDA of EUR100m-110m (previous EUR130m-140m).
Disclosures and disclaimers