• Orders -6% vs ABGSCe, sales in line, EBIT 31% above
• Adj. EBIT margin improved to 7.0% (2.6%)
• Focus will now be on change initiatives within Industry segment

Q2 results

Order intake came in at EUR 40m (-6.0% vs. ABGSCe 43m), +11% y-o-y. Sales came in at EUR 43m (0% vs. ABGSCe 43m), -7.0% y-o-y (-7.0% org.). EBIT adj. was EUR 3.0m (-10% vs. ABGSCe 3.3m), excluding a one-off charge of EUR -0.6m due to a cyber incident in the quarter, for a margin of +7.0% (ABGSCe +7.7%). EPS adj. came in at EUR 0.01 (ABGSCe 0.02). FCF lease adj. came in at EUR 3.6m (ABGSCe 0.84m). It is encouraging to see that Cavotec's change programme is having a positive impact on the company's profitability and FCF.

Estimates and outlook

On numbers alone, we expect '24e-'26e sales to stay flat, and EBIT adj. changes by -3%. The key margin driver continues to be the Ports & Maritime division and management expresses that it is not satisfied with the development within the Industry segment and will now focus on implementing similar change initiatives within the Industry segment to improve performance.

Valuation

The share has returned +33% L3M (vs. peer median +12% and OMXSALLS +6.0%), and is currently trading at 35x-14x '24e-'26e P/E on our pre-report estimates vs. the peer median of 21x-13x.