Q1 details
Strong profitability while sales came in below CTT's own forecasts. Sales grew 5% organically (ABGSCe +10%) to SEK 78m (-5% vs. ABGSCe 83m), mainly driven by a decline y-o-y in system sales as the aftermarket business continued to grow well (+20% y-o-y, 0% vs. ABGSCe). Adj. EBIT grew 28% y-o-y to SEK 33m (+16% vs. ABGSCe 28m), for a margin of 42% (ABGSCe 34%, 34% Q1'23) due to the higher share of aftermarket sales. Free cash flow was also solid at ~25m. According to the CEO, Q1 sales were negatively affected by delayed shipments, which should be recuperated already in Q2. For Q2, CTT guides for revenues of SEK 85-90m, with the mid-point implying 11% growth y-o-y, and -6% vs. ABGSCe 93m, driven by flat OEM sales q-o-q, no VIP sales and continued good aftermarket demand. On outlook, the CEO states that aftermarket growth should be "significantly lower" in 2024 vs. 2023 (we have +9% vs. +30%) while OEM sales should pick up due to increased production rates, while penetration has also improved on the A350. On the retrofit and VIP side, opportunities remain but that lead times mean this will likely first materialise towards late 2024 / early 2025.
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