Q2’21 EBIT SEK 14m, -2.2% vs. ABGSC, -34.2% vs. cons

Minor estimate changes on the back of Q2 report

DCF fair value range remains at SEK 125-305 per share

Q2 sales of SEK 154m, up 24.8% y-o-y (~2% organic)
Invisio reported Q1’21 net sales of SEK 154m, +1.3% vs. ABGSCe and -5.0% vs. consensus for y-o-y growth of 24.8%. Adjusting for the acquisition of Racal Acoustics, organic growth was ~2%. Management noted an uptick in market activity, especially in the US, where customers and partners are increasingly receiving visits and testing equipment. This was reflected in a strong order intake of SEK 167m. The order intake continues to be characterised by a larger number of small orders, which reduces the historical lumpiness of Invisio’s revenues and diversifies the revenue base. The gross margin was 58.0%, +0.5pp vs. ABGSCe, again slightly below historical levels due to the acquisition of Racal. Opex in Q2 was SEK 75m, 3.1% above our estimate of SEK 73m, yielding an EBIT of SEK 14m, -2.2% vs. ABGSCe and -34.2% vs. consensus, for a margin of 9.2%.

‘21e EBIT down by 1.5% on back of report
We make only minor estimate changes following the report, lowering ‘21e EBIT by 1.5% and slightly increasing our opex estimates for Q3’21e.

Maintain fair value DCF range of SEK 125-305 per share
We maintain our DCF fair value range of SEK 125-305. Based on our estimates, Invisio is trading at an EV/EBIT of 58x-27x for ‘21e-‘23e, which is ~10% below the median of our peer group consisting of Nordic general technology peers, based on FactSet consensus. In terms of H2’21e outlook, we expect the intake of large orders to pick up in conjunction with Invisio’s customers being able to receive Invisio’s sales teams and properly test Invisio’s products. Coupled with a stable intake of small orders, this suggests a strong H2’21.

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