Sales were 1% above our expectations, with 1% organic sales (ABGSCe +1%), which in turn was driven by stronger system sales (+61% y-o-y vs. ABGSCe 37%) and softer aftermarket sales (-10% y-o-y vs. ABGSCe 0%). Despite the negative mix (75% aftermarket sales vs. ABGSCe 78%), EBIT grew 6% (ABGSCe -20%), as the margin came in at 41% (ABGSCe 31%) due to favourable FX. On a positive note, VIP sales clearly improved and reached SEK 8m (ABGSCe 4m). The DPS was SEK 5.35 (ABGSCe 5.55).
Outlook and estimate changes
For Q1'25, CTT expects sales of SEK 50-60m, vs. ABGSCe FY'25 sales 471m, where we had assumed a gradual ramp-up in sales though 2025. This is due to "significantly lower AM demand" due to well-stocked distributors, which is expected to result in lower AM sales y-o-y also in Q2. OEM is expected to pick up clearly as deliveries are starting to mirror aircraft build-rates, while VIP sales are expected to remain flat vs. Q4'24 (8m), supported by SEK 11m in orders won during Q1'25. In addition, management sees solid progress towards VIP OEM Bombardier and is in a contractual phase with another private jet OEM. Mechanically, we estimate that the lower start to 2025 could negatively impact FY'25e sales by 10-15%, with a greater impact on EBIT due to AM's high margins.
Final thoughts
Although AM sales have been surprisingly volatile in recent quarters, the fluctuations should be transitory as the overall installed base is still growing well, while the pick-up in system deliveries were key heading into 2025. That said, we believe that the H1'25 comments on AM sales will be seen as negative for the share, and overshadow the positive comments on the OEM and Private Jet side. The share has returned +1% L1M, below the broader market (OMXSGI) at +5%, and is currently trading at 21-16x EBIT (pre-Q4) '25e-'26e (20x L10Y). There is a conference call at 09:30 CET
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