Cavotec: The positive margin ramp-up continues - ABG

• Good sales and margins, lower orders and FCF
• EBIT estimates largely unchanged '23e-'25e
• 19-7x EBIT '23e-'24e, 17% org. sales CAGR '22-'25e

45% org. sales, margins up second quarter in a row
Cavotec continued to show a gradual improvement during Q2. Although the order backlog declined 6% q-o-q due to hesitant customer activity, sales grew 45% y-o-y organically (ABGSCe 44%), with the main growth driver being Ports & Maritime ('P&M', 66% org.). The main positive was the sequential margin increase, as EBIT reached 2.6% (ABGSCe 1.9%, 0.8% in Q1). Thus, given the timing of deliveries and fading effects from low-margin orders, we expect sequential growth in sales (EUR 49-54m) to yield margins of 3.8-8.0% in Q3-Q4, and 4.0% for FY'23. FCF remained subdued, but both inventories and receivables declined q-o-q, and we expect working capital effects to turn positive in Q3, which combined with higher earnings should yield a YE'23e ND/EBITDA of 1.3x.

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/5fd5989e7d2b45c2b458cf6779af2841/pdf/the-positive-margin-ramp-up-continues.pdf