Cavotec: Better across the board - ABG

Sales +17% org., EBIT margin 7.6% (ABGSCe 5.6%), good FCF
Encouraging momentum, Q4 beat in isolation lifts '24 EBIT by ~10%
Better growth, profitability and cash flow, 12-7x EBIT '24e-'25e


Q4 details

Continued good trend in sales, but especially margins and gearing. The backlog declined 16% y-o-y and 9% q-o-q to EUR 124m (-2% vs. ABGSCe) while sales grew 17% organically (ABGSCe +5%) to EUR 54m (+11% vs. ABGSCe). This was mainly driven by 27% growth in Industry (+26% vs. ABGSCe). EBIT improved from a loss in Q4'22 to EUR 4.0m (+49% vs. ABGSCe 2.7m), for a margin of 7.6% (ABGSCe 5.6%, neg. Q4'22, 4.1% Q3'23) as both divisions made clear profitability improvements, but especially within Ports & Maritime. Lease adj. FCF was solid at EUR 3.1m (~80% of EBIT), which led to gearing (R12m ND/EBITDA coming down from 2.8x to 1.3x. On outlook, the CEO highlights how focus on profitable growth has resulted in a normalisation of the backlog, but that there is a continuous steady stream of customer inquiries and strong interest in Cavotec's solutions and service offering. In addition, the work on improving profitability has progressed the most in P&M but that Industry is expected to do "significant progress".

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/cavotec/Equity-research/2024/2/cavotec---better-across-the-board/