Invisio: Prepared for continued strong demand
Research Update
2024-07-22
07:22
Analyst Q&A
Closed
Hjalmar Ahlberg answered 2 questions.
Redeye updates on Invisio post Q2-results which came in above our forecast owing to larger than expected deliveries of the large Intercom order received in March. The outlook remains strong, and we make limited changes to estimates and our valuation range is left unchanged.
Hjalmar Ahlberg
John Westborg
Invisio reported revenue of SEK553m and EBITDA of SEK115m which was above our forecasts of SEK442m and SEK101m. The strong beat was driven by the large Intercom order received in March, where deliveries was more tilted towards Q2 than we had expected. Underlying gross margin was strong at 63.2% while the overall gross margin was negatively impacted by third-party radios that was delivered during the quarter.
Invisio reiterates a positive outlook where it sees potential for increased military budgets to impact positively during late 2024 or early 2025. The company is experiencing high market activity and continues to build inventory to meet strong demand and short lead times from order to delivery. We see potential for a growing order intake in the coming quarters which should support growth for Invisio in 2025-26E.
Overall, we make limited changes to our estimates on the back of the Q2-report (2024-26E EBITDA lowered c2%). While deliveries were stronger than expected in Q2, we have lowered assumptions for Q3 and our 2024E topline forecast is largely unchanged. We also leave our valuation range unchanged where the base case is SEK265 while the bull case is SEK400 and the bear case SEK140. While the share currently trades above our base case, we believe this could remain to reflect upside optionality from increased military budgets.
| SEKm | 2022 | 2023 | 2024e | 2025e | 2026e |
| Revenues | 775.4 | 1,238.5 | 1,618.6 | 1,666.5 | 1,916.4 |
| Revenue Growth | 30.8% | 59.7% | 30.7% | 3.0% | 15.0% |
| EBITDA | 112.7 | 301.4 | 368.5 | 470.7 | 588.3 |
| EBIT | 65.1 | 242.8 | 307.7 | 407.2 | 522.7 |
| EBIT Margin | 8.4% | 19.6% | 19.0% | 24.4% | 27.3% |
| Net Income | 44.3 | 178.3 | 226.5 | 305.4 | 392.0 |
| EV/Sales | 10.4 | 7.0 | 7.4 | 7.1 | 6.1 |
| EV/EBITDA | 71.4 | 28.7 | 32.5 | 25.1 | 19.8 |
| EV/EBIT | 124 | 35.7 | 38.9 | 29.0 | 22.3 |
Invisio reported revenue of SEK553m and EBITDA of SEK115m which was above our forecasts of SEK442m and SEK101m, respectively. The strong topline growth of 105% was driven by the larger Intercom order received in March and includes third-party radios which generated sales of SEK164m in the quarter. The third-party radios have a lower gross margin of less than 10%, and as deliveries of third-party radios were higher than expected, the gross margin was lower than expected. However, excluding the third-party radios, the gross margin was 63.2%, which is at the high end of the historical average. Order intake was SEK245m and in line with our expectations of a level between SEK200m-300m. Total opex came in at SEK158m which was above our estimate of SEK140m, however, this includes one-off costs of SEK15m related to a cyber attack on Racal Accoustics, preparations for CSRD reporting and activities related to Invisio’s 25 year anniversary. Excluding the one-off costs, underlying opex was close to our expectations.
Disclosures and disclaimers