Ovzon: Soft start to 2023, but Q2 should be better - ABG

-46% org. growth due to recent bad debt provision
We lift '23e sales by 3% on recent order announcement
Share is now trading at 5x '25e EV/EBIT

Slowdown in Q1

Ovzon's Q1 results were soft amid fewer announced orders and the recent situation with its Italian partner. Sales of SEK 57m saw -46% org. growth y-o-y, where it should be noted that company did not recognise the SEK 22m in Italian-related Q1 sales due to the recent payment issue. Meanwhile, it recognised full costs for delivering the service, resulting in a gross margin of 9% (vs. 16% in Q1'22), while adj. EBIT was SEK -34m (vs. SEK -18m in Q1'22). Ovzon commented that there is still some uncertainty around the exact time of completion of Ovzon-3, although it reiterated its assessment of a Q3 launch. Although the project is in its final stage, there are still some steps remaining, including the final assembling and dynamic testing. While our visibility into this remains low, we optimistically expect a launch in Q3.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ovzon/equity-research/2023/4/ovzon---soft-start-to-2023-but-q2-should-be-better/