North America beating expectations - Q3 initial

BTS’ Q3 report was significantly above our expectations and Bloomberg consensus, combining stronger-than-expected organic growth, particularly in NA, as well as an encouraging earnings improvement in Other Markets – a trend we expect to continue.

Overall impression. Organic growth was 13% Y/Y (-1% in Q3 2025), driven by double-digit growth in NA (+17%) and Europe maintaining good activity at +15% – albeit growth rates in the region are expected to slow in the remainder of 2026, in line with the company’s Q2 comments. EBITA was SEK81m (up 79% Y/Y, SEK45m in Q3 2025), c45% above our our forecast and consensus, with the corresponding margin at 11.4% (7.2%). Considering the turnaround in APAC, Other Markets saw organic growth of 7%, with the margin expanding to 11.0% (8.8%). We view it as encouraging that organic growth has returned in a solid fashion, while earnings growth could potentially improve further given management commentary around the yet-to-be-seen full impact of recovering demand and efficiency measures.

Guidance comments. Despite the solid Q3, the company maintained its explicit guidance of 2026 EBITA “significantly better” than 2025. We forecast 22% reported EBITA growth Y/Y in 2026 – a take only strengthened by the presented numbers.

Estimates. With a rebound for H2 already in expectations, combined with the significantly better than expected performance in Q3, we expect consensus to make small positive changes to 2026–27e EBITA.

Share price reaction. Despite a good run in the shares YTD, having recovered significantly since the Q1 lows, we believe the good growth delivery in North America, combined with the encouraging Q3 margin delivery, which diverts from recent years’ pattern of larger step-downs Q/Q, warrants a clear outperformance by the shares today.