Delivery delays due to the pandemic caused a sales decline of 4.4% in Q1. Despite rising transportation and product costs, the GM came in strong at 59.7%, 3.3pp better than our expectations at 56.5%, boosted by a positive sales mix. The opex was slightly higher, so the low profitability (EBIT came in negative at SEK -3.9m) is due to the low sales in the quarter. What stood out this quarter was the order book at SEK 482m, which is the strongest in the company’s history. The order intake grew 189% y-o-y (+37% if we exclude the large, announced orders of SEK 209 at the end of March), which corresponds to a very strong book-to-bill of 2.9x. Most of the orders in the order book are planned to be delivered this year, with the majority in the second half. However, the company expects supply chain challenges to continue in Q2, but is confident that H2 will be better. To summarise, Q2 will probably not be strong in terms of sales but H2 will likely be better.
Adjust quarterly sales estimates, but keep FY ’22 outlook
Since the company also expects supply chain challenges in Q2’22, we slightly adjust our quarterly estimates by lowering our sales expectations by 10% for Q2e, but we raise our sales expectations by 7% for Q3e. The full-year effect on sales of -3.6% is mainly due to the Q1 sales effect. We keep our opex expectations at current levels and expect an EBITDA CAGR of 26% in ’20-’24e.
Share trading at 10.8x ’22e EV/sales, 5y NTM average of 7.8x
Although the outlook for the company is strong, there are risks related to the delivery, as mentioned above. However, the long-term outlook is positive due to the increased military spending from many countries around the world. On our new estimates, the company is trading at EV/sales of 11x-8x for ’22e-’23e, ab ...
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