CTT Systems: Tailwinds continue, and not just from FX - ABG

12% EBIT beat, ~45% FX-adjusted EBIT margin
‘22e EBIT +5%, ‘23e-‘24e down 7-2% (FX +10%)
28-16x EBIT ‘22e-‘24e on 29% EBIT CAGR ‘22e-‘24e


Impressive strength in aftermarket momentum (+70% org)

CTT delivered a solid report, as a continued recovery in air travel (and favourable FX) drove 62% sales growth y-o-y (+5% vs. ABGSCe), of which 34% was organic. System sales (OEM, Retrofits, VIP) remained subdued (down ~50% y-o-y organically), but we note that OEM deliveries have historically been resilient in economic downturns, and we expect a continued recovery in 2023 from low levels (above 2019 levels in 2024). The key earnings driver continued to be strong aftermarket (AM) demand (+70% org, 86% of sales), which in turn yielded 51% EBIT margins (ABGSCe 48%, c. 45% FX-adjusted EBIT margins). For Q4, we expect sales of SEK 71m, up ~50% y-o-y organically and slightly above CTT’s guidance of SEK 65-70m, supported by FX, AM and VIP sales.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ctt-systems/Equity-research/2022/10/ctt-systems---tailwinds-continue-and-not-just-from-fx/