CTT Systems: Strong performance, positive guidance - ABG

36% org. sales (ABGSCe 31%), 82% adj. EBIT growth
Consensus 2023e EBIT could come up 5-10%
Strong report and positive guidance, 20-12x EBIT '23e-'25e


Q1 details

Sales came in at SEK 75m (+9% vs. ABGSCe 69m), 52% y-o-y of which 36% organically (ABGSCe 31%) as aftermarket sales were clearly stronger than expected (42% y-o-y), in light of the cautious comments after Q4 concerning inventory adjustments, while system sales also grew strongly (+83%). Adj. EBIT grew 82% y-o-y and reached SEK 26m (+21% vs. ABGSCe 21m), for a margin of 36% (ABGSCe 31%, 28% Q1'22). For Q2'23, CTT guides for sales of SEK 75-80m, with the mid-point of ~78m (+11% vs. ABGSCe 70m) implying 3% growth q-o-q and 33% growth y-o-y. For 2023, the CEO guides for "significantly higher" system sales in 2023 (ABGSCe 113%) and that the company was able to fully compensate inventory adjustments in the aftermarket sales among distributors with sales to other channels. On the aftermarket, the CEO indicates c. 10% population growth in 2023 (we have 6% y-o-y in sales), and also expects private jet/VIP orders to pick-up in H2'23. FCF was subdued at -6m due to receivables expected to be paid in April instead of March.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ctt-systems/Equity-research/2023/4/ctt-systems---strong-performance-positive-guidance/