INVISIO - Stable Q1’21e with order intake picking up
ABGSC: Q1’21e EBIT of SEK 15m, +6. 2% y-o-y Estimate changes driven by new D&A assumptions Maintain fair value DCF range of SEK 125-305 per share Stable Q1’21e with improving order intake We forecast a stable Q1’21e report from Invisio, driven by improving small order intake. We forecast sales of SEK 138m, +18. 0% y-o-y.
No major orders have been delivered during the quarter, but the small order intake has been strong throughout Q1 and continuously improving in the latter part of the quarter due to the new US administration establishing itself and the COVID-19 vaccine rollout proceeding faster than estimated. We do not expect any gross margin dilutive orders (through third parties) in Q1’21e, but the inclusion of Racal Acoustics does have a small negative impact. We therefore forecast a gross margin of 57.
6%. Given our estimate changes (see below), we forecast an Q1’21e EBIT of SEK 15m, growing 6. 2% y-o-y for a margin of 11.
1%. M&A & new product launches drive increased D&A Our estimate changes are driven entirely by new D&A assumptions following recent M&A and new product launches. The acquisition of Racal Acoustics is estimated to create SEK ~12m in annual PPA amortisations, which we now factor into our estimates.
Additionally, we believe that Invisio is set to begin amortising newly launched products, which we think will add another SEK 10-12m in annual intangible D&A. All in all, this generates negative EBIT revisions of 12. 8-7.
1% ‘21e-‘23e, but has no effect on cash flow. Maintain DCF fair value range We maintain our DCF fair value range of SEK 125-305 per share given that our estimate changes have no effect on cash flow. Based on our estimates, Invisio is trading at an EV/EBIT of 65-32x for ‘21e-‘23e, which is 50-20% above the median of our peer group consisting of Nordic general technology peers, based on FactSet consensus.
In terms of ‘21e, we think that we will see a gradual ramp-up in large order intake in conjunction with the easing of COVID-19.
