CTT Systems: Strong earnings, but lower in Q3 - ABG
• 27% org. sales (ABGSCe 27%), 44% EBIT growth
• Cons 2023e EBIT could come down 5-7% (excl. FX)
• Q3 guidance below ABGSCe, 22-14x EBIT '23e-'25e
Q2 details
Sales came in at SEK 79m (+2% vs. ABGSCe 77m), 35% y-o-y of which 27% organically (ABGSCe 27%) as aftermarket sales remained strong (63% y-o-y, +22% vs. ABGSCe), while system sales declined y-o-y (-26%, -43% vs. ABGSCe) due to lower OEM sales and a deferred VIP delivery from Q2 into Q3. EBIT grew 44% y-o-y and reached SEK 34m (+14% vs. ABGSCe 30m), for a margin of 43% (ABGSCe 38%, 40% Q2'22). For Q3'23, CTT guides for sales of SEK 70-75m, with the mid-point of ~73m (-16% vs. ABGSCe 86m) implying a 8% decline q-o-q and 11% growth y-o-y. According to the CEO, this is due to 1) normalised demand for spares within the aftermarket, 2) a pause in B777X deliveries, 3) inventory adjustments among OEMs, which is expected to normalise in Q3-Q4 and 4) that CTT assumes a lower USD/SEK rate q-o-q for Q3 than in Q2. Looking ahead, the CEO aims to close the system sales gap vs. 2019 levels (SEK 150m to close), while also benefitting from the B777X program and VIP/private jet sales. Free cash flow was strong at SEK 60m (~180% of EBIT).
Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/e3ddba6f428b482c8128e65302c0fde6/pdf/strong-earnings-but-lower-in-q3.pdf
