Cavotec - Near-term operations still impacted by COVID
16% sales decline, adj. EBIT remains positive (2. 5%) Customer delays, getting ready for a recovery 11-8x EBIT ‘21e, 10% adj. EBIT CAGR ’19-‘22e Q4 results Another slow quarter as the pandemic and general uncertainty continues to impact customer decision-making, thereby delaying projects and the resulting orders.
The order backlog declined 15% y-o-y and 7% q-o-q, primarily due to lower order intake within Ports & Maritime (‘P&M’, -26% y-o-y), while the backlog in Airports & Industry (‘A&I’) grew 1% y-o-y. Sales arrived at EUR 40m (+6% vs. ABGSCe 38m), down 16% y-o-y (-14% organically), with A&I (-11%) offsetting the lower deliveries in P&M (-21%).
Service revenue amounted to c. 22% in the quarter. Adj.
EBIT came in at EUR 1m (ABGSCe -1. 1m), for a margin of 2. 5% (11.
8% in Q4, 2. 0% in Q3’20), while reported EBIT arrived at EUR -0. 9m (ABGSCe -1.
1m). Operating cash flow was strong at EUR 9. 6m, which means that the company is now at a net cash position (ex IFRS 16 leases).
Looking ahead, the company remains optimistic in its value proposition and the long-term prospects within its end markets, and aims to be ready to fully capitalise on demand once the pandemic uncertainty subsides. Estimate changes Based on the Q4 numbers alone, the implicit revisions to our numbers would be fairly small in absolute terms. On an adj.
EBITDA level, we note that both business areas generated 10% margins, while the company continues to trim its cost base through personnel reductions. Final thoughts Looking ahead, we believe that the company should see a strong recovery in sales and earnings once the pandemic uncertainty begins to ease. The demand is there, in our view, within marine, and the drivers behind automated mooring and port electrification remain.
The stock is up 2% in the L3M vs. the Carnegie Smallcap index at +8% and is currently trading at (pre-Q4 numbers) 11-8x EV/EBIT ‘21e-‘22e. There is a conference call at 10:00 CET, dial-in: SE +46856642703.
