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Bredband2

Bredband2

Broadband via fiber network

Bredband2 supplies broadband, IP Telephony, data storage and safety solutions through the fiber network. In addition, the company offers co-location for webservers, e-mail and other operation-critical systems with associated network services such as Internet and VPN. The customer base is mainly private clients, but Bredband2 also offers a variety of different products to companies. Today, Bredband2 is primarily operating in the open city networks, where there is free competition between different operators.

The digitalization trend favors Bredband2. There is an increasing demand on faster and more stable network connections. This is due to more and more connected devices, higher TV resolutions, video-on-demand and online games, to mention a few examples. Hence, there is a shift from older network connections to newer ones, like ADSL to fiber. Furthermore, the Swedish government has a set goal that 95% of the Swedish population should have access to broadband by 2020. If this market starts to saturate, there is an opportunity for Bredband2 to seize a better position in the B2B market.

The main risks for Bredband2 are 1) generic product, which makes price an important factor for customers. 2) Market maturity and increased competition, mainly from bigger players, could cause decline in growth without increased margins. 3) High dependence to the net owners, and their continued investments in market expansion.

SEKm 2020 2021e 2022e
Sales 788 1574 1686
Sales growth (%) 17,5 99,8 7,1
EBITDA 79 197 217
EBITDA margin (%) 10,1 12,5 12,9
EBIT adj 56 127 141
EBIT adj margin (%) 7,2 8,1 8,4
Pretax profit 42 101 120
EPS rep 0,04 0,08 0,1
EPS growth (%) -33,2 115,1 18,8
EPS adj 0,06 0,11 0,12
DPS 0,06 0,11 0,13
EV/EBITDA (x) 20,8 10,4 9,3
EV/EBIT adj (x) 29,3 16,1 14,3
P/E (x) 54 25,8 21,7
P/E adj (x) 36,2 20,2 18,7
EV/sales (x) 2,1 1,3 1,2
FCF yield (%) -24,9 5,9 6,8
Dividend yield (%) 2,9 5,1 6
Net IB debt/EBITDA -0,2 -0,1 -0,2
Lease adj. FCF yield (%) -24,9 5 6
Lease adj. ND/EBITDA -0,2 -0,4 -0,4
SEKm 2020 2021e 2022e
Sales 788 1574 1686
COGS -529 -1112 -1193
Gross profit 259 463 492
Other operating items -179 -266 -275
EBITDA 79 197 217
Depreciation on tangibles -35 -41 -44
Depreciation on intangibles 0 0 0
EBITA 44 140 157
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 -17 -15
EBIT 43 122 141
Other financial items 0 0 0
Net financial items -1 -21 -21
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 42 101 120
Tax -11 -22 -26
Net profit 31 80 95
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 31 80 95
EPS 0,04 0,08 0,1
EPS Adj 0,06 0,11 0,12
Total extraordinary items after tax -13,7 -5 0
Tax rate (%) -26,9 -21,4 -21,4
Gross margin (%) 32,8 29,4 29,2
EBITDA margin (%) 10,1 12,5 12,9
EBITA margin (%) 5,6 8,9 9,3
EBIT margin (%) 5,4 7,8 8,4
Pretax margin (%) 5,4 6,4 7,1
Net margin (%) 3,9 5,1 5,6
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 17,5 99,8 7,1
EBITDA growth (%) 6,3 147,9 10,2
EBIT growth (%) -15,9 185,5 15,6
Net profit growth (%) -23,9 157,8 18,8
EPS growth (%) -33,2 115,1 18,8
Profitability 2020 2021 2022
ROE (%) 10,8 15,7 18,3
ROE Adj (%) 16,2 20,1 21,2
ROCE (%) 11,6 17,4 19,1
ROCE Adj(%) 15,7 20,6 21,1
ROIC (%) 13,8 17,7 20,5
ROIC Adj (%) 18,3 18,5 20,5
Adj earnings numbers 2020 2021 2022
EBITDA Adj 93 202 217
EBITDA Adj margin (%) 11,8 12,8 12,9
EBITA Adj 58 145 157
EBITA Adj margin (%) 7,4 9,2 9,3
EBIT Adj 56 127 141
EBIT Adj margin (%) 7,2 8,1 8,4
Pretax profit Adj 57 124 136
Net profit Adj 46 102 110
Net profit to shareholders Adj 46 102 110
Net Adj margin (%) 5,9 6,5 6,5
Leasing payments 0 -17 -17
Depreciation and amortisation -35 -57 -60
Of which leasing depreciation 0 -17 -17
EO items -14 -5 0
Impairment and PPA amortisation -2 -17 -15
EBITDA lease Adj 93 185 200
EBITDA lease Adj margin (%) 11,8 11,8 11,9
SEKm 2020 2021e 2022e
EBITDA 79 197 217
Net financial items -1 -21 -21
Paid tax -11 -22 -26
Non-cash items 0 0 0
Cash flow before change in WC 68 154 170
Change in WC 17 4 7
Operating cash flow 84 158 177
CAPEX tangible fixed assets -8 -19 -19
CAPEX intangible fixed assets -8 -19 -19
Acquisitions and disposals -485 0 0
Free cash flow -416 121 140
Dividend paid -35 -48 -105
Share issues and buybacks 417 0 0
Other non cash items -270 -55 0
Decrease in net IB debt -142 1 18
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 690 690 690
Indefinite intangible assets 100 79 56
Definite intangible assets 0 0 0
Tangible fixed assets 33 34 35
Other fixed assets 47 47 47
Fixed assets 870 905 883
Inventories 0 0 0
Receivables 158 157 169
Other current assets 0 0 0
Cash and liquid assets 119 175 193
Total assets 1148 1237 1245
Shareholders equity 492 523 513
Minority 17 17 17
Total equity 509 541 530
Long-term debt 102 102 102
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 32 32 32
Other long-term liabilities 0 0 0
Short-term debt 48 48 48
Accounts payable 95 98 105
Other current liabilities 361 361 372
Total liabilities and equity 1148 1237 1245
Net IB debt -16 -16 -35
Net IB debt excl. pension debt -16 -16 -35
Capital invested 526 557 528
Working capital -297 -301 -308
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1669 2058 2058
Net IB debt Adj -16 -16 -35
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 1653 2041 2023
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 107,5 132 135,8
Capital invested turnover (%) 348,5 290,9 310,8
Capital employed turnover (%) 213,5 224 227,5
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 20,6 11,5 11,1
Payables / sales (%) 10,7 6,1 6
Working capital / sales (%) -26,4 -19 -18,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -3,1 -3 -6,5
Net debt / market cap (%) -1,3 -0,8 -1,7
Equity ratio (%) 44,3 43,7 42,6
Net IB debt adj. / equity (%) -3,1 -3 -6,5
Current ratio (%) 55 63 66,3
EBITDA / net interest (%) 15253,6 947 1043,5
Net IB debt / EBITDA (%) -19,6 -8,3 -15,9
Interest cover (%) 8502,7 671 753,1
Lease liability amortisation 0 -17 -17
Other intangible assets 100 79 56
Right-of-use asset 0 55 55
Total other fixed assets 47 47 47
Leasing liability 0 55 55
Total other long-term liabilities 32 32 32
Net IB debt excl. leasing -16 -71 -90
Net IB debt / EBITDA lease Adj (%) -16,7 -38,6 -44,7
SEKm 2020 2021e 2022e
Shares outstanding adj. 798 957 957
Fully diluted shares Adj 798 957 957
EPS 0,04 0,08 0,1
Dividend per share Adj 0,1 0,1 0,1
EPS Adj 0,06 0,11 0,12
BVPS 0,62 0,55 0,54
BVPS Adj -0,25 -0,17 -0,19
Net IB debt / share 0 0 0
Share price 1,56 2,15 2,15
Market cap. (m) 1247 2058 2058
Valuation 2020 2021 2022
P/E 54 25,8 21,7
EV/sales 2,1 1,3 1,2
EV/EBITDA 20,8 10,4 9,3
EV/EBITA 37,3 14,6 12,9
EV/EBIT 38,6 16,7 14,3
Dividend yield (%) 2,9 5,1 6
FCF yield (%) -24,9 5,9 6,8
P/BVPS 3,39 3,93 4,01
P/BVPS Adj -8,41 -12,35 -11,61
P/E Adj 36,2 20,2 18,7
EV/EBITDA Adj 17,7 10,1 9,3
EV/EBITA Adj 28,5 14,1 12,9
EV/EBIT Adj 29,3 16,1 14,3
EV/cap. employed 2,5 2,7 2,8
Investment ratios 2020 2021 2022
Capex / sales 1,9 2,4 2,2
Capex / depreciation 42,6 93,1 85,1
Capex tangibles / tangible fixed assets 23 55,3 53
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 107,7 118,8 124,6
Lease adj. FCF yield (%) -24,9 5 6

Equity research

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Media

Bredband2 - Company presentation with CEO Daniel Krook (in Swedish)
Bredband2 - Interview with CEO Daniel Krook (in Swedish)

Main shareholders - Bredband2

Main shareholders Share capital % Voting shares % Verified
Mark Hauschildt 13.9 % 13.9 % 31 Dec 2020
Anders Lövgren 13.4 % 13.4 % 31 Dec 2020
ODIN Fonder 8.8 % 8.8 % 31 Mar 2021
BI Asset Mgmt Fondsmaeglerselskab A/S 4.0 % 4.0 % 30 Sep 2020
Berenberg Funds 2.8 % 2.8 % 31 Oct 2020
Ulf Östberg 2.3 % 2.3 % 31 Dec 2020
Mikael Holmlund 1.7 % 1.7 % 31 Dec 2020
Johan Åsberg 1.7 % 1.7 % 31 Dec 2020
Avanza Pension 1.7 % 1.7 % 31 Dec 2020
SEB Fonder 1.5 % 1.5 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Bredband2

Name Quantity Code Date
Joachim Landhager + 30 000 BUY 9 Apr 2021
Joachim Landhager + 15 000 BUY 9 Apr 2021
Mark Hauschildt +9 897 433 BUY 9 Dec 2020
Thomas Nygren + 400 000 BUY 7 Dec 2020
Thomas Nygren + 991 000 BUY 7 Dec 2020
Thomas Nygren + 609 000 BUY 7 Dec 2020
Joachim Landhager + 100 000 BUY 14 Sep 2020
Bo Anders Lövgren +1 500 000 BUY 29 Jul 2020
Loevgren Anders +10 000 000 BUY 7 May 2020
Claes Fägersten +1 300 000 BUY 23 Aug 2019

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