Ovzon: ABGSC’s Investor Days feedback - ABG

We hosted a presentation with CEO Per Norén today

Ovzon’s offering seems more relevant than ever

Ovzon-3 is set to be launched in Dec’22-Feb’23

Strong growth in H1’22, driven by efforts made in 2020-2021
Today, we hosted Ovzon’s CEO, Per Norén, at ABGSC’s Investor Days, talking about its current business momentum, recent market development, and status for its Ovzon-3 project. The company has seen a good start to 2022 with H1 sales growing +153% y-o-y, driven by several new customer contracts, including the Italian Fire and Rescue Service. Furthermore, recent geopolitical events demonstrate the need for reliable communication infrastructure, which plays well in the hands of Ovzon. However, lead-times in the industry are long, meaning that current business momentum mainly reflects efforts made in 2020-2021. In our view, this bodes well for the future.

Improved visibility in the launch date of Ovzon-3
The company’s Ovzon-3 project (proprietary satellite) has entered its final phase and is scheduled to be launched in Dec’22-Feb’23 with its launching partner, Arianespace. Although the project has been delayed – solely due to external factors - we understand that the visibility has improved well lately. Given the accumulated Ovzon-3 related capex of SEK 1.3bn, most investments into the project have now been taken. Besides adding more capacity (and, in our view, with attractive financials), one of the key elements with Ovzon-3 is its integrated On-Board-Processor, which allows for closed-loop communication between the satellite and the terminal. Not only does this enhance the reliability of the connection, but also the security, which is essential for many of its customers.

We expect Ovzon-3 to start generating sales in Q3’23e
Ovzon is guiding for significantly improved sales in 2022 vs. 2021, which we also see given our ’22e sales forecast of SEK 334m, up 75% y-o-y. We continue to see a bright outlook for the company, and expect a gradual ramp up in sales from Ovzon-3 as of Q3’2 ...
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