Carnegie Investment Bank
Sensys Gatso Group
Date Title Alternative
2024-04-29 Solid order intake in seasonally weak quarter on earnings front Download | Show Close
2024-02-23 Robust report with clear signs of scalability Download | Show Close
2023-11-17 Accelerating growth in orders, sales, and profits Show Close
Research | 17 Nov 2023 | Sensys Gatso Group

Accelerating growth in orders, sales, and profits

 

Robust results on all fronts

Sensys Gatso delivered a solid report on all fronts. Order intake grew by 174%, driven by the US, the Middle East, and the Netherlands. Net sales were up 65%, driven by high systems sales, with deliveries for a large Middle Eastern contract resuming. EBITDA of SEK 19.2m surpassed Q3 2022 (6.4m) and was unchanged q/q, in what is normally a weak quarter. Cash flows were negative as the company has invested in new platforms and equipment, while it has also built up working capital to handle the recent solid order intake. Cash flows should improve from here as deliveries increase and these adjustment investments normalise.

Preparation phase drawing to a close – favourable conditions for recurring revenues

The company has been in a heavy investment phase that is now reaching its conclusion. The first prototypes have been delivered to Trafikverket (Swedish Transport Administration), and serial deliveries are a few months away. At the same time, demand for TRaaS services is increasing in the US, where federal programmes support speed control, especially in proximity to schools. Even in states like Florida, speed control is becoming increasingly politically viable. In emerging markets, there is widespread openness to the TRaaS model, while previous equipment deliveries to the Middle East increase the potential for recurring service revenues.

 

Unchanged estimates and fair value

The Q3 report was in line with our full-year 2023 scenario. We thus leave our forecasts and fair value unchanged. Given the recent solid order intake, we see considerable potential for healthy earnings growth, suggesting the company will hit its long-term target of SEK 1bn in sales and an EBITDA margin of 15% in 2025. Performance has been weak for a time owing to costs for adjustments and investments in software and staff. This year, which should be considered a time of transition, is soon over, and the share is trading at appealing multiples based on our forecasts. The sustainability aspect is clear when considering the UN’s targets, and an indicator like rolling 12-month EBITDA is now rising after a period of weakness.

 

Download (EN)
2023-06-19 2023 guidance and reverse split prompt updated forecasts and new fair value Show Close
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2021-03-04 Comments on Q4 Show Close
2021-02-11 Thoughts on 2021 Show Close
2020-12-02 Sensys Gatso – Sales up 80% Show Close

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