Sensys Gatso delivered what we consider a convincing report. Order intake ramped up 253% Y/Y to SEK318m. TRaaS operations accounted for 86% of the order value. The biggest driver of order intake was the US, where the company signed nine contracts, of which four covered new cities, with a deal value of SEK154m. Sales growth was 11%, with the largest equipment deliveries to Sweden and the Netherlands only contributing marginally. The company incurs the expenses for these contracts. This, in combination with a seasonally weak development in the US, owing to weather conditions and the legally prompted halting of automatic traffic control around school zones during school holidays, led to EBIT of SEK-7m. However, this was somewhat better than the Q1(23) results of SEK-9m. Operating cash flows were strong at SEK55m (SEK-8m), mainly thanks to large customer payments that aided tied-up working capital. On the day of the report, the company also announced a large US order of SEK197m, of which SEK160m was new business and SEK37m an extension of an existing contract.

We leave our forecasts unchanged as the results for Q1(24) support our expectations for 2024e suggesting Y/Y improvements. The company reiterated its targets for 2025: sales of SEK1bn, an EBITDA margin of at least 15%, and TRaaS sales accounting for 60% of total sales. It is worth noting that a large share of the order book for equipment sales – primarily to Trafikverket (Swedish Transport Administration) – has not yet been invoiced, and that the order flow from the US still supports the growth the company has previously seen in Managed Services – a 2018–2023 CAGR of 27%.

Unchanged fair value – solid growth on the cards as company closes in on 2025 targets