GOMspace: Focus on profitabilty is becoming clearer - ABG

Soft Q2, while orderbook profitability is increasing FY’22 guidance reiterated, expecting a stronger H2 Scenario based fair value range reiterated at SEK 7-45 Orderbook make-up is trending towards a 60/40 split by 2024

Q2’22 revenues came in at SEK 51m, 3% above ABGSCe at SEK 50m, and 21% below FactSet cons. at SEK 65m, while EBIT was SEK -32m, vs. ABGSCe of SEK -15m and cons. at SEK -9m. With quarterly fluctuations common for GomSpace, it is not alarming that the Q2 numbers came in weaker than expected on the bottom line, as FY’22 guidance remain reiterated. Order intake in Q2 was decent at SEK 85m, with a total orderbook now at SEK 507m. The profitability of the backlog furthermore increased in Q2, as the percentage of orders containing a high degree of “standard” products, increased. During today’s conference call, the management confirmed that the orderbook split is trending towards reaching a 60 (high-margin product orders) /40 (low margin, high on engineering orders) split within the next two years, which is a key component of the transformation strategy to gain profitability.

Wages and engineer access remain a hurdle FY'22 guidance is reiterated at revenues of SEK 264-292m (ABGSCe SEK 278m, cons. SEK 281m) and an EBIT margin of "Better than -15%” (ABGSCe -13.6%, cons. -12%). The reiteration accounts for a continued impact from a lag of access to skilled engineers and wage inflation.

Transformation strategy is in progress With key aspects to the transformation strategy including 1) the product investment plan and 2) the industrial investment plan, we are noting that the R&D spending is accelerating, in order for GomSpace to build out its offering of standard products, and to ensure modularity going forward. We thus change our estimates to reflect higher R&D costs for FY ’22-‘24, while remaining confident in our topline estimates for the period. Overall, while the percentage changes look material, we reiterate our scenario based fair value range of SEK 7-45, as the ... Läs mer på ABG Sundal Collier

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