Cavotec: Margin progression set to continue - ABG

Q4 report due Friday, 23 February at 07:00 CET
6.0-9.1% margins '24e-'25e (9.1-10.8% prev.) behind revisions
12-7x EBIT '24e-'25e, 4-7% FCF yields


Seasonal uptick in sales and margins

We expect Cavotec to finish the year in relatively good fashion, as sales should ramp up vs. Q3 while less pressure from low-margin orders will support a continued uplift in profitability, both y-o-y and vs. Q3. Although Cavotec continues to win orders within shore power and automated mooring, we believe the increased focus on securing projects with good profitability will weigh on the backlog. We therefore expect a backlog of EUR 126m (down 15% y-o-y), sales of EUR 48m (up 3% y-o-y) and adj. EBIT of EUR 2.7m (neg. in Q4'22), for a margin of 5.6% (neg. in Q4'22, 4.1% in Q3'23). Finally, we expect lower working capital to support cash flow and yield a ND/EBITDA of 1.6x by YE'23 (vs. 2.8x in Q3).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/cavotec/Equity-research/2024/1/cavotec---margin-progression-set-to-continue/