GOMspace - On the right track

Strong Q4’20 – sales growth of 88% (ABGSCe 84%) Solid FY’21 guidance, supported by a robust backlog We expect a positive share reaction today Gross margin acceleration GomSpace delivered a strong Q4, proving that the company is benefiting from the turnaround strategy, with them focusing on optimizing their operations and efficiency. The company posted Q4’20 revenue growth of 88% (ABGSCe 84%) and gross profits of SEK 24m (ABGSCe 22m) or a 33% gross margin, significantly up from 10% y-o-y. The company furthermore reached a milestone in FY’20, by reporting a positive cash flow from operations of SEK 41m (up from SEK -96m in 2019), a trend we expect will continue. Strong outlook with higher upside vs.

downside potentials GomSpace reported their FY’21 outlook of revenues between SEK 210-235m, with the high-end of guidance being ~3% higher than ABGSC estimate of SEK 228m and 11% higher than FactSet cons. at SEK 212m. Going into FY’21, we see a strong order backlog of SEK 210m (up from SEK 153m) which has been vetted and account for solid and secure clients, such as the European Space Agency (SEK 28m backlog orders) and the Colombian Air Force (SEK 12m backlog orders).

The order backlog does not include the more risky orders from “new space” companies. We therefor see more potential upside vs. downside to the guidance, as these companies might still place orders that are commercialized.

Estimates likely have to come up Based on the strong quarter and FY’20 results, combined with the fact that we are seeing the company’s operational foothold having improved significantly over the last year (with the optimization of their operations, staff, modular development etc. ) we acknowledges that the company is on the right track. We also think consensus estimates will likely have to come up a bit, supported by the solid FY’21 guidance and strong order backlog, we therefor think the share will react positive to the report today.