The focus in Q1 has been to receive orders and we expect the underlying order intake to be in line with our estimates. On the last day of the quarter, Invisio announced three large orders for a total value of SEK 209m, one with delivery in Q2’22, one with delivery start in Q3’22 and one under the five-year framework agreement that the company announced in January ’22 where deliveries are planned to go on until 2026. We expect the company to be somewhat affected by increased component costs, which will put pressure on the GM. However, we do not expect a shortage of components and we expect the company to be able to deliver on orders.
We raise opex by 7% in Q1’22e
We were expecting the company to announce orders and see these as included in our estimates, but since the size was so large, we raise our sales estimates slightly. Furthermore, we raise opex by 7% for Q1’22e to match the higher cost base that the company has taken on since the acquisition of Racal. To summarise, we expect Racal to be the driver of 10% M&A sales growth, while we expect 0% organic growth for Q1e. We expect an EBITDA margin of 13% for Q1’22, compared to 12% for the FY 2021.
Positive wording in Q1 given increased military spending
For the Q1 report, we expect positive wording regarding the increased expectation of higher military spending. The current situation, with rising military budgets especially around the number of soldiers and the size of armies, has had limited impact so far but will likely benefit Invisio in the long run and we therefore expect a forward leaning company with a positive outlook in the Q1 report. Finally, the company trades at EV/sales of 12x in 2022e, which is above the 5Y historical average of 8x NTM.
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