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Ovzon

Rare combination of speed and mobility

Ovzon is supplier of mobile end-to-end satellite services. Through its self-developed terminal, the company’s patent-protected offering combines great mobility with high bandwidth. The company is looking to launch a proprietary satellite. Besides more than doubling Ovzon’s saleable capacity, having its own satellite would expand the total offering.

The market for mobile satellite communication services is large and growing, and many governments and media organisations have already announced that they will continue to invest in the coming years. Ovzon offers a unique solution for customers in need of a mobile satellite terminal with high bandwidth. That combination has not existed historically, and the company might capture significant market share.

Ovzon relies on satellite capacity from third parties to provide its communication services. Satellites are subject to operational risks while in orbit, many of which cannot be foreseen and may not be included in Ovzon's insurance policies. Almost all of the company’s sales are generated via IGC (a subsidiary to the operator Intelsat) and the sales agreement with IGC is subject to annual renewal. Furthermore, the company generates almost all of its revenues in USD, and reports in SEK.

Financials

SEKm 2018 2019e 2020e
Sales 210 224 427
Sales growth (%) 3,7 6,8 90,3
EBITDA -14 10 88
EBITDA margin (%) -6,8 4,6 20,6
EBIT adj margin (%) 3,1 -4,1 8,8
Pretax profit -27 40 18
EPS rep -3,9 1 0,41
EPS growth (%) -421,3 125,7 -58,9
EPS adj -0,21 1,37 0,41
DPS 0 0 0
EV/EBITDA (x) -17,9 193,8 27,7
EV/EBIT adj (x) 38,7 -215,1 64,6
P/E (x) -10,7 69,6 169,3
P/E adj (x) -195,8 51 169,3
EV/sales (x) 1,2 8,9 5,7
FCF yield (%) -22,7 -15,7 -19,1
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2,9 -35 1
EBIT adj 7 -9 38
SEKm 2018 2019e 2020e
Gross profit 93 104 204
Other operating items -107 -93 -116
EBITDA -14 10 88
Depreciation on tangibles 0 0 -38
Depreciation on intangibles -5 -5 -11
EBITA -19 3 38
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 -12 0
EBIT -19 -9 38
Other financial items 0 0 0
Net financial items -7 50 -20
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -27 40 18
Tax -1 -7 -4
Net profit -28 34 14
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -28 34 14
EPS -3,9 1 0,41
EPS Adj -0,21 1,37 0,41
Total extraordinary items after tax -26,1 0 0
Tax rate (%) 3,8 -16,5 -22
Gross margin (%) 44,2 46,2 47,7
EBITDA margin (%) -6,8 4,6 20,6
EBITA margin (%) -9,3 1,4 8,8
EBIT margin (%) -9,3 -4,1 8,8
Pretax margin (%) -12,7 18 4,2
Net margin (%) -13,1 15 3,2
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 3,7 6,8 90,3
EBITDA growth (%) -148,9 171,8 759,4
EBIT growth (%) -181,1 52,5 508,7
Net profit growth (%) -554,1 222,1 -58,9
EPS growth (%) -421,3 125,7 -58,9
Profitability 2018 2019 2020
ROE (%) 115,9 7,7 1,7
ROE Adj (%) 6,3 10,5 1,7
ROCE (%) -24,6 -2 4,1
ROCE Adj(%) 8,3 0,7 4,1
ROIC (%) -127,3 -3,2 4,4
ROIC Adj (%) 43,2 -3,2 4,4
Adj earnings numbers 2018 2019 2020
EBITDA Adj 12 10 88
EBITDA Adj margin (%) 5,6 4,6 20,6
EBITA Adj 7 3 38
EBITA Adj margin (%) 3,1 1,4 8,8
EBIT Adj 7 -9 38
EBIT Adj margin (%) 3,1 -4,1 8,8
Pretax profit Adj -1 53 18
Net profit Adj -2 46 14
Net profit to shareholders Adj -2 46 14
Net Adj margin (%) -0,7 20,5 3,2
Sales 210 224 427
COGS -117 -121 -223
SEKm 2018 2019e 2020e
EBITDA -14 10 88
Net financial items -7 50 -20
Paid tax -1 -7 -4
Non-cash items 3 2 2
Cash flow before change in WC -19 55 66
Change in WC -28 -11 -4
Operating cash flow -60 44 62
CAPEX tangible fixed assets -2 -324 -402
CAPEX intangible fixed assets -5 -87 -108
Acquisitions and disposals 0 0 0
Free cash flow -67 -368 -449
Dividend paid 0 0 0
Share issues and buybacks 223 695 0
Other non cash items 3 -7 0
Decrease in net IB debt 159 318 -450
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 0 0 0
Indefinite intangible assets 7 48 95
Definite intangible assets 0 0 0
Tangible fixed assets 38 389 801
Other fixed assets 1 1 1
Fixed assets 46 445 905
Inventories 0 0 0
Receivables 8 101 107
Other current assets 0 0 0
Cash and liquid assets 77 365 115
Total assets 131 911 1126
Shareholders equity 73 802 815
Minority 0 0 0
Total equity 73 802 815
Long-term debt 0 0 200
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 1 1 1
Other long-term liabilities 0 0 0
Short-term debt 37 0 0
Accounts payable 20 101 102
Other current liabilities 0 0 0
Total liabilities and equity 69 95 131
Net IB debt -41 -359 92
Net IB debt excl. pension debt -41 -359 92
Capital invested 33 444 908
Working capital -11 0 4
EV breakdown 2018 2019 2020
Market cap. diluted (m) 295 2344 2344
Net IB debt Adj -40 -358 93
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 255 1987 2437
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 185,6 43 41,9
Capital invested turnover (%) 1323,5 93,9 63,1
Capital employed turnover (%) 265,5 48,8 46,6
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 15,7 26,9 23,8
Working capital / sales (%) -12 -2,5 0,5
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -55,9 -44,7 11,2
Net debt / market cap (%) -13,3 -15,3 3,9
Equity ratio (%) 55,6 88 72,4
Net IB debt adj. / equity (%) -54,4 -44,6 11,4
Current ratio (%) 149,9 461,8 216,4
EBITDA / net interest (%) -201,1 -20,7 440,4
Net IB debt / EBITDA (%) 285,5 -3499,3 103,9
Interest cover (%) -274,1 -6,2 188,7
SEKm 2018 2019e 2020e
Shares outstanding adj. 7 34 34
Fully diluted shares Adj 7 34 34
EPS -3,9 1 0,41
Dividend per share Adj 0 0 0
EPS Adj -0,21 1,37 0,41
BVPS 10,33 23,87 24,28
BVPS Adj 10,33 23,87 24,28
Net IB debt / share -5,8 -10,7 2,7
Share price 43,33 69,8 69,8
Market cap. (m) 306 2344 2344
Valuation 2018 2019 2020
P/E -10,7 69,6 169,3
EV/sales 1,22 8,86 5,71
EV/EBITDA -17,9 193,8 27,7
EV/EBITA -13,1 649,3 64,6
EV/EBIT -13,1 -215,1 64,6
Dividend yield (%) 0 0 0
FCF yield (%) -22,7 -15,7 -19,1
P/BVPS 4,04 2,92 2,87
P/BVPS Adj 4,04 2,92 2,87
P/E Adj -195,8 51 169,3
EV/EBITDA Adj 21,7 193,8 27,7
EV/EBITA Adj 38,7 649,3 64,6
EV/EBIT Adj 38,7 -215,1 64,6
EV/cap. employed 2,3 2,5 2,4
Investment ratios 2018 2019 2020
Capex / sales 3,1 183,5 119,5
Capex / depreciation 125,4 7362 1046,7
Capex tangibles / tangible fixed assets 4,7 83,5 50,2
Capex intangibles / definite intangibles N/A N/A N/A
Depreciation on intangibles / definite intangibles N/A N/A N/A
Depreciation on tangibles / tangibles 0,8 0,1 4,8

Equity research

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Media

Ovzon - Interview with VP Per Wahlberg
Ovzon - Company presentation with VP Per Wahlberg & CFO Johan Brandt

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Main shareholders - OVZON

Main shareholders Share capital % Voting shares % Verified
Investment AB Öresund 14.9 % 14.9 % 31 Oct 2019
Bure Equity 14.3 % 14.3 % 30 Sep 2019
AFA Försäkring 11.6 % 11.6 % 30 Sep 2019
OverHorizon (Cyprus) PLC 9.1 % 9.1 % 30 Sep 2019
Handelsbanken Fonder 6.7 % 6.7 % 31 Oct 2019
Catella Fonder 4.3 % 4.3 % 31 Oct 2019
Danica Pension 2.9 % 2.9 % 30 Sep 2019
Avanza Pension 2.7 % 2.7 % 30 Sep 2019
Familjen Olsson med stiftelse 2.4 % 2.4 % 10 Sep 2019
Staffan Persson 2.3 % 2.3 % 30 Sep 2019
Source: Holdings by Modular Finance AB

Insider list - Ovzon

Name Quantity Code Date
Anders Georg Björkman + 4 000 BUY 14 May 2019
Nicklas Paulson + 100 000 UTFÄ 6 May 2019
Magnus René + 200 000 BUY 6 May 2019
Nicklas Paulson + 15 000 UTFÄ 6 May 2019
Pål Ekberg + 20 000 BUY 6 Mar 2019
Peter Näslund + 30 000 SUBS 5 Feb 2019
Kennet Lejnell + 40 400 BUY 4 Feb 2019
Kennet Lejnell + 40 400 BUY 4 Feb 2019
Nicklas Paulson + 769 426 BUY 1 Feb 2019
Per Wahlberg + 335 856 BUY 1 Feb 2019

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