– Q2 deliveries impressed, less support ahead but still good demand
– 2024e adj. EBIT -17%, 2025-26e -3% to +4% on some moving parts
– Momentum remains, share at 40x 2024e EV/EBIT and 41x 2025e

In the middle of a strong demand situation
The customer activity level remains high, and the upcoming increased military budgets are yet to support Invisio in the latter part of 2024 and into 2025. We understand that Invisio gains market share from being able to deliver with short delivery times to customers, especially the Intercom system (vehicle-based), but also that new products like the Invisio X7 headset have attracted good interest initially. Q2 was helped by a large delivery of an Intercom system but also a third-party radio delivery that came with a lower gross margin, as we expected. Invisio closed Q2 with an ATH inventory of SEK 274m (up 9% q-o-q and 39% y-o-y), which should in light of short delivery times be a competitive advantage, as well as prepayments of products for the upcoming radio order delivery. We therefore view the current inventory level as a good indicator for further high order intake in H2e, although the hurdle has become increasingly more difficult to clear for announcing orders.

We cut our estimates for 2024e, small changes in 2025-26e
Adjusting for the radio order in Q2, the growth rate was 44% y-o-y, but we estimate that Q2 also included a relatively large share of the Intercom part of the order, with high margins, and that less will be recognised in Q3 than we thought previously. We estimate that Q2 sales excluding the full effect of the large order (Intercom + radio part) was down 15-20% y-o-y. Some parts of the delivery will also move to Q3’25, according to the company. Combined with a miss on order intake, we reduce 2024e sales by 10% and adj. EBIT by 17%, while we make less changes on 2025-26e (sales +1% and EBIT -3% in 2025e and +4% in 2026e).

Trades at 40-41x EV/adj. EBIT
The share is up 49% YTD, and on our updated estimates it trades at 40x 2024e EV/adj. EBIT and 41x 2025e.

https://cr.abgsc.com/foretag/invisio/Equity-research/2024/7/invisio—working-down-the-order-book/

ABGSC Commissioned Research