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Third party research

BTS Group: Q2 PW not out of the blue - ABG

BTS Group

This is a third party research report and does not necessarily reflect our views or values

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North American weakness behind yesterday's Q2 PW
FY guidance cut more than feared
Estimates likely down 10-15%, stock closed -12% yesterday


Late Q2 PW, but not entirely unexpected

As we argued for in our preview (link), North America has likely been tough in Q2 for larger consulting projects, and the FY guidance was at risk. Yesterday morning, BTS sent out a PW with sales -1% vs FactSet consensus and EBITA -20% (-14% vs ABG), as well as adjusting its FY EBITA guidance from “better than 2024” to “worse than 2024”, while we feared a cut to “in line with 2024”. EBITA declined -23% y-o-y in Q2, vs 0% y-o-y in Q1. BTS blames underperformance in the North American market and business, and acts immediately by doing organisational changes. CEO Jessica Skon was previously Head of North America, so she clearly knows the market, the business and the organisation well. Having been with BTS for more than 20 years, Mrs Skon is hopefully making the right changes to get the Group's largest business unit back on track again. BTS also said that the other segments (Europe and Other markets) as well as the recently acquired Boda in the US are performing both revenue and EBITA growth, which is a positive sign. FX has also had a negative effect on earnings growth y-o-y and impacts the new FY guidance.
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