• New partnership with major European defence company
• Expected to materialise in orders relatively near-term
• Could have a significant positive impact on consensus estimates

Likely related to a new weapon system, software only

Clavister announced today that it has been selected as a supplier of cybersecurity technology to a major European defence company. This is a new customer for Clavister that is part of a multi-national group that develops and manufactures a wide range of defence systems used by several armed forces around the world. Clavister has not disclosed who the new partner is. So far, the partnership only involves one newly developed system in which Clavister's CyberArmour technology is integrated, but we understand that the partner has many other systems where cybersecurity could be relevant in the future. After discussions with management, we understand that Clavister will deliver software plus support services (no hardware). We think the system is unlikely to be a vehicle, and more likely to be some kind of weapon system (so the customer is most likely not Thales or General Dynamics, which Clavister already has announced agreements with).

Potential for orders already in 2025

Clavister wrote in the press release that it expects deliveries to start already in 2025, which strengthens our view that this is not related to a new vehicle system that could take years to ramp up production of, but rather some kind of weapon system. Given that Clavister only will deliver software, order volumes will likely be significantly lower than its recent orders from BAE Systems, but with significantly higher margins. Our best guess is that we could see total orders of ~SEK 5-10m in 2025 but with over 90% gross margins. Hence, we believe the partnership could have a material effect on consensus estimates relatively near-term. For reference, we forecast EBITDA of SEK 52m in 2025, increasing to SEK 70m in 2026e. The share is trading at 18-11x EBITDA '25e-'27e.