Q4 2022 sales amounting to cSEK383m, corresponding to a 2% y/y growth, which was largely in line with our expectations. The net customer intake of broadband customers via fibre turned negative at 1,900 q/q, while the gross margin fell short at 34.4% versus an estimated 35.3%. Despite slightly lower OPEX offsetting the lower gross margin to some extent and recently suggested margin prioritising from management, the EBITDA margin amounted to 15.5% (16.4%), compared to an estimated 15.9%.

Looking ahead, management has stated continued margin prioritising, which will likely continue to affect its customer intake in the next few quarters. However, management sees this as temporary, and looking further into 2023, Bredband2 aims to maintain solid margins while increasing its organic growth focus, seeing solid growth prospects both within its private- and corporate segments.

On the back of Bredband2’s Q4 2022 report, we make minor 2023e and 2024e forecast adjustments. We cut our sales, gross margin and OPEX assumptions for the period, leading to slightly lowered margin assumptions. Consequently, our DCF gives rise to a new Base Case of SEK1.9 (2.0) per share and new Bear and Bull Cases of SEK1.0 (1.2) and SEK2.5 (2.7).