Q4 results due on 14 February
We expect sales of SEK 181m and EBIT of SEK 18m
Share trading at EV/EBIT of 58x-32x in ‘22e-‘23e.Q4 expectations
Invisio reports its Q4 results on 14 February. We expect sales of SEK 181m in Q4, 5% y-o-y (-21% organic), driven near-solely by M&A growth from Racal (26% y-o-y contribution). Invisio has only announced two orders: one order of SEK 30m and one of less than SEK 10m in the quarter and therefore we do not expect a major raise in sales during Q4. Moreover, we expect the price increase in components to slightly affect the GM negatively, but we still expect Invisio to be able to deliver. We look at 2021 as a challenging year due to difficult momentum in the market – customers have chosen to wait with orders due to the pandemic, cancelled physical sales meetings have slowed the ordering processes and all this has come in combination with long order cycles. However, we expect 2022, and especially H2’22, to be a comeback year for Invisio for three major reasons. Firstly, we expect the first orders of the Intercom system in the quarter will lead to more orders and sales going forward. Secondly, we expect a strong orderbook going into 2022, as the book-to-bill has been >1 over the last few quarters. Lastly, we have seen large activity among radio manufacturers; L3Harris had plenty of radio orders in 2021 (with one very large one in Q4), which we expect will lead to more orders for Invisio in the near term.
We cut sales and GM estimates
On the back of the above, we cut sales by 5% for Q4’21e and by 11% for full-year 2022e, as we do not expect the improvements to become visible until H2’22e. We expect to see orders in Q1’22e and Q2’22e that will bear fruit in H2’22e. Moreover, we lower our GM by 10pp in Q4’21 and 14pp for FY’22e due to the increased component prices. We leave opex intact for Q4’21e, which results in an EBIT margin of 10%.
Share is trading at EV/EBIT 58x in 2022e
Invisio’s share is down 40% LTM and is currently trading at EV
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