Cavotec: Miss driven by P&M, but Industry improving - ABG
Q1 disappointed, but likely better from here Orders -33%, sales -13%, EBIT adj. EUR -2.1m vs. ABGSCe Industry improving, sales +2% y-o-y, EBITDA margin of 13% (8%)
ANNONS
Lower orders, sales and EBIT
Cavotec reported sales of EUR 39m (-10% y-o-y and -13% vs. ABGSCe) and orders of EUR 29m (-28% y-o-y and -33% vs. ABGSCe), implying a book-to-bill of 0.74x (vs. 0.93x in Q1'24 and 1.35x in Q4'24). EBIT adj. came in at EUR 1m (vs. ABGSCe 3.1m), for a margin of 3% vs. ABGSCe at 7%. The miss was driven by P&M, which reported lower sales of EUR 22m (-17% y-o-y), and orders of EUR 12m (-50% y-o-y). The deliveries of the large P&M orders signed in Q4 are expected to begin from the second half of the year, and we expect these to contribute to growth in H2'25e. We believe that the weak Q1 was a temporary setback, and we expect Cavotec to lift margins to >7% for FY'25e (6.2% in '24) and return to sales growth. In addition, the company managed to improve FCF lease adj., which came in at EUR 4.6m (1.3m), a result of its increased focus on cash flow and working capital, which we expect to continue.
