The recovery continues, but the pandemic will continue to have an impact on air traffic during 2022e. CTT delivered sales of SEK 42m (0% vs. ABGSCe 42m), up 5% q-o-q and 20% y-o-y organically (ABGSCe 20%), driven by 85% growth in aftermarket sales (‘AM’, -12% vs. ABGSCe 29m). Adj. EBIT reached SEK 8m (-36% vs. ABGSCe 12m), for a margin of 19% (ABGSCe 30%, neg. in Q4’20) as aftermarket revenues accounted for ~60% of sales (ABGSCe 70%). AM revenues remain ~70% below 2019 levels. For Q1, CTT guides for revenues of SEK 42-47m (up 34-50% y-o-y, mid-point -11% vs. ABGSCe 50m) driven by higher private jet sales q-o-q and flat AM sales. For the full-year, CTT expects a return to revenue growth, driven by growth in private jets and recovering AM sales offsetting a slower pick-up in OEM sales. According to CTT, the restart in B787 deliveries should begin in April 2022. 2021 DPS was SEK 0.79 (ABGSCe 1.05), ~70% of net profit.
Estimate changes
We currently expect significant growth in 2022 (100% org sales y-o-y), driven by AM sales surpassing 2019 levels and OEM sales tripling from very low levels. However, if we assume that the guidance would mean AM revenues in line with 2019 levels and OEM sales growing at a slower pace, we believe the estimate risk to our 2022e EBIT could amount to 15-20%. This will likely be partly offset by positive FX revisions of 5-8%. These effects should be fairly isolated to 2022e numbers, in our view.
Final thoughts, valuation at 25-19x EV/EBIT ‘22e-‘23e
We find it positive to see that CTT continues to meet its guidance, despite the pandemic uncertainty, while delivering solid profitability. However, the stock has outperformed the small cap index (-4% L1M vs. the CSXE at -10%) into numbers and is trading at 25-19x EV/EBIT ‘22e-‘23e. Given the downside risk to current expectations and the ongoing
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