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Ovzon: Ovzon-3 launched, time for improved orders - ABG

Solid Q4, but soft Q1e on uncertainty in the US....
... but Ovzon-3 to start generating sales in H2'24e
Gradual ramp-up in capacity, 15x '25e EV/EBIT

Solid quarter, and Ovzon-3 finally launched

On the back of solid sales of terminals, Q4 net sales of SEK 91m improved well from SEK 73m in Q3. This was chiefly driven by the SEK 135m order from the Swedish Space Corporation - a particularly important deal for Ovzon, as order volumes from one of its most important customers, US DoD, have recently declined markedly. We believe the latter reflects recent uncertainties in US Congress about the US defence budget, which also aligns with comments from peers. Our visibility into when this will resolve is low, but we expect further clarity during Q2. Even so, this will hurt Q1. That said, the most important recent news was the successful launch of Ovzon-3 on 3 Jan. Compared to the current offering, Ovzon-3 will provide improved resiliency, lower latency, and less dependency on leased-capacity agreements, while also generating margin-accretive sales (~95% gross margin, vs. leased-capacity sales at ~35%). The satellite is currently on its way to its geostationary orbit, and will be fully operational from mid-'24.
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