Invisio: Strong sales to come, but with a delay - ABG

Q2 report due on 22 July We move sales slightly further into the future Our positive LT perspective remains, already better in H2 Long lead times delay sales, but H2 better than H1 We expect market activity in Q2’22 to be strong, although order announcements during the quarter have been poor with only one initial order of SEK 16m announced in combination with the renewal of a long-term contract with the UK Ministry of Defence. However, we expect the underlying order intake to be strong at SEK 180m, corresponding to a book-to-bill of 1.1x in Q2’22e. The biggest risk we see is long lead times for components delaying sales. The long delivery times are not only for Invisio’s products; Invisio is also indirectly affected by delays of communication radios, which are often used in combination with Invisio’s products. As such, our view remains that H2 will be significantly better than H1 in 2022e in terms of sales, supported by the large amount of announced orders at the end of Q1’22.

Move sales to the future We only make tiny estimate revisions for Invisio. We lower Q2, Q3 and Q4 sales by 1pp each quarter and forecast that these will be realised in 2023 and 2024 instead of this year. Our estimates correspond to a 4%, 35% and 42% sales growth in Q2, Q3 and Q4 2022, respectively. Moreover, we estimate a 21% sales CAGR in ’20-‘24e. We retain our opex assumptions which corresponds to a 16-24% EBITDA margin in 2022-24e (vs. the last three years’ historical average of 20%).

EV/sales drops below historical average of 8x NTM next year We remain positive on Invisio from a long-term perspective, as significant capital will be added to the sector due to the global rearmament trend. The current supply chain problems only delay sales which does not mean lost revenues. In line with this, the EV/sales multiple drops below the historical 5Y average of 8x NTM already next year. For the EV/EBITDA multiple, on the other hand, the share is trading at 34x for ‘23e, while the historical NTM average i ... Läs mer på ABG Sundal Collier

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