INVISIO - D&A weighed on Q1, market activity improving
Q1’21 EBIT SEK 13m, -17% vs. ABGSCe, -35% vs. cons Estimate changes driven by new D&A assumptions DCF fair value range remains SEK 125-305 per share Q1 sales of SEK 144m, +23. 0% y-o-y, with strong order intake Invisio reported Q1’21 net sales of SEK 144m, +4.
3% vs. ABGSCe and +1. 6% vs.
cons. for y-o-y growth of 23. 0%.
Management reported that there was an uptick in market activity during Q1’21, especially in the latter parts, following the easing of lockdowns and an increasing vaccination rate, especially in the U. S. , driving a strong order intake of SEK 137m (purely small order intake).
We find this very encouraging as the U. S. is a very important market for Invisio, usually generating the majority of net sales.
The gross margin was 57. 5%, -0. 1pp vs.
ABGSCe, which was slightly muted due to product mix and Racal Acoustics being consolidated for ~2 months. Opex in Q1 was SEK -70m, 8. 3% above our estimate of SEK -64m.
This was mainly driven by higher D&A than we anticipated, driven by new product launches, PPA amortisations relating to the acquisition of Racal Acoustics, and higher leasing amortisations. Q1’21 EBITDA was SEK 23m, +7. 3% vs.
ABGSCe and -6. 4% vs. cons.
but the EBIT of SEK 13m was -17. 0% vs. ABGSCe and -34.
9% vs. cons. We lower ’21e-‘23e EBIT by 3.
0-4. 4% On the back of the Q1’21 report we have adjusted our D&A assumptions, where the main drivers are increased amortisation of capitalized development expenses, following new product launches, and of right-of-use (leasing) assets. This lowers our ‘21e-‘23e EBIT by 3.
0-4. 4%, but has no effect on cash flow. DCF fair value 125-305 per share, EV/EBIT 62x-30x ’21e-’23e We maintain our DCF fair value range of SEK 125-305 per share given that our estimate changes have no meaningful effect on cash flow.
Based on our estimates, Invisio is trading at an EV/EBIT of 62x-30x for ‘21e-‘23e, which is ~5% above the median of our peer group consisting of Nordic general technology peers, based on FactSet consensus.
