INVISIO: Strong momentum and easy comps in Q2e - ABG

85% organic growth in Q2e and EBIT of SEK 61m
H1 announced orders +52% y-o-y supports 2023e growth
Fine-tuning estimates, EBIT -2%, share at 37x '23e EV/EBIT


Impressive acquisition of Racal Acoustics paves the way

Invisio acquired Racal Acoustics for SEK 170m in December, when Racal had sales of SEK 130m, and the acquisition multiple was around 9x EV/EBIT if we assume that Racal had an EBIT margin of 15%. Since 2020, Racal's competitor Bose has left the US market for commercial hearing protection and the Russian/Ukraine situation has caused several governments to increase military budgets. So far in 2023, Invisio has announced three orders for Racal products for a total value of SEK 262m (77% of announced orders), which is a strong growth from the acquisition. If we assume that Invisio manages to generate a 20% EBIT margin on the Racal products, it would result in SEK 52m in EBIT, and that Invisio has acquired the company for 3.2x EV/EBIT, for just the 1H 2023 of announced orders. The multiple is therefore likely even lower than that. Given that Invisio has been able to recruit employees from competitors and that the market has likely expanded, the opportunities for further growth in the Racal brand looks promising in our view.

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