Berner Industrier: Progress materialising rapidly - ABG

* Q3 beat our expectations handily, EBITA 29% above* Raise '26e-'27e EBITA 15-14% on higher margin assumptions* Increased confidence in operational improvements, FV SEK 65-95Another great quarterFollowing an already very impressive Q2, Q3 beat our raised expectations handily, with EBITA coming in 29% above our estimate thanks to a record margin of 12.6% (7.6%), 3.5pp above our expectation. The outperformance vs. our estimates and the y-o-y improvement was driven by both segments and lower central costs. T&D continued to benefit from the operational improvements, mainly in Christian Berner AB, which we started to see clearly in Q2, as well as a positive seasonality effect, while the favourable business mix in E&E persisted into Q3. Orders were also strong, up 24% y-o-y and beating our estimate by 11%.Raise EBITA 15% on higher marginsFollowing the report, we raise '26e-'27e adj. EBITA by 15-14%, driven by 1.3pp higher margin assumptions. In T&D, we raise our '26 and '27 margin expectations to 7.5% and 8.0% (6.0%, 6.5%), as we gain more confidence in the operational improvements (we believe the 7.9% Q3 margin was a bit seasonally boosted). In E&E, while we still believe that the currently favourable business mix that enabled the 17.1% Q3 margin should not be fully extrapolated, we raise our '26e-'27e margin expectations to 15.5% (14.0%), as we now think a larger share of the margin strength seen this year is due to underlying improvements.Increased confidence in improvementsThe Q3 report further increased our confidence in the margin impact of the operational improvements that management has implemented over the past three years. While we still caution that the margin, especially in E&E, can be volatile between quarters depending on the mix, we now believe the company will exceed its 9% EBITA margin target already this year, and forecast that it will get above 10% in '26e. We therefore raise our fair value range to SEK 65-95 (55-85).