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Ovzon

Ovzon

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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 2019 2020e 2021e
Sales 232 215 284
Sales growth (%) 11,4 -7,4 32,5
EBITDA 29 11 24
EBITDA margin (%) 12,3 5 8,4
EBIT adj margin (%) -0,4 1,1 5,2
Pretax profit 39 40 15
EPS rep 0,86 0,82 0,25
EPS growth (%) 124 -4,3 -69,4
EPS adj 0,86 0,82 0,25
DPS 0 0 0
EV/EBITDA (x) 67,4 186,5 108,3
EV/EBIT adj (x) -2193,8 832,3 174,5
P/E (x) 74,5 63 206
P/E adj (x) 74,5 63 206
EV/sales (x) 8,3 9,3 9,1
FCF yield (%) -23 -15,8 -25,1
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -8,8 -41 7,2
EBIT adj -1 2 15
SEKm 2019 2020e 2021e
Gross profit 109 104 141
Other operating items -81 -94 -117
EBITDA 29 11 24
Depreciation on tangibles 1 -3 -3
Depreciation on intangibles -4 -4 -4
EBITA 24 2 15
Goodwill impairment charges 0 0 0
Other impairment and amortisation -12 0 0
EBIT 11 2 15
Other financial items 0 0 0
Net financial items 27 38 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 39 40 15
Tax -10 -2 -3
Net profit 29 38 12
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 29 38 12
EPS 0,86 0,82 0,25
EPS Adj 0,86 0,82 0,25
Total extraordinary items after tax 12,3 0 0
Tax rate (%) -24,6 -4,9 -21
Gross margin (%) 47,1 48,6 49,5
EBITDA margin (%) 12,3 5 8,4
EBITA margin (%) 10,2 1,1 5,2
EBIT margin (%) 4,9 1,1 5,2
Pretax margin (%) 16,7 18,9 5,2
Net margin (%) 12,6 17,9 4,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 11,4 -7,4 32,5
EBITDA growth (%) 331,5 -62,7 125
EBIT growth (%) 165,1 -79,1 523,5
Net profit growth (%) 214 31,7 -69,4
EPS growth (%) 124 -4,3 -69,4
Profitability 2019 2020 2021
ROE (%) 6,7 3,5 0,8
ROE Adj (%) 6,7 3,5 0,8
ROCE (%) 2,5 0,2 0,9
ROCE Adj(%) 2,5 0,2 0,9
ROIC (%) 3 0,3 0,9
ROIC Adj (%) -0,2 0,3 0,9
Adj earnings numbers 2019 2020 2021
EBITDA Adj 16 11 24
EBITDA Adj margin (%) 7 5 8,4
EBITA Adj 11 2 15
EBITA Adj margin (%) 4,9 1,1 5,2
EBIT Adj -1 2 15
EBIT Adj margin (%) -0,4 1,1 5,2
Pretax profit Adj 39 40 15
Net profit Adj 29 38 12
Net profit to shareholders Adj 29 38 12
Net Adj margin (%) 12,6 17,9 4,1
Sales 232 215 284
COGS -123 -110 -144
SEKm 2019 2020e 2021e
EBITDA 29 11 24
Net financial items 27 38 0
Paid tax -10 -2 -3
Non-cash items -19 0 0
Cash flow before change in WC 27 47 21
Change in WC -17 24 -7
Operating cash flow 10 71 14
CAPEX tangible fixed assets -509 -424 -584
CAPEX intangible fixed assets 0 -30 -39
Acquisitions and disposals 0 0 0
Free cash flow -499 -383 -609
Dividend paid 0 0 0
Share issues and buybacks 695 571 0
Other non cash items 17 0 0
Decrease in net IB debt 211 186 -611
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 3 29 64
Definite intangible assets 0 0 0
Tangible fixed assets 532 954 1534
Other fixed assets 1 1 1
Fixed assets 543 991 1606
Inventories 0 0 0
Receivables 91 86 114
Other current assets 0 0 0
Cash and liquid assets 257 443 433
Total assets 892 1520 2153
Shareholders equity 796 1406 1418
Minority 0 0 0
Total equity 796 1406 1418
Long-term debt 0 0 600
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 0 0 0
Accounts payable 89 107 128
Other current liabilities 0 0 0
Total liabilities and equity 892 1520 2153
Net IB debt -251 -437 173
Net IB debt excl. pension debt -251 -437 173
Capital invested 545 968 1591
Working capital 3 -21 -14
EV breakdown 2019 2020 2021
Market cap. diluted (m) 2176 2426 2426
Net IB debt Adj -250 -436 174
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 1926 1989 2600
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 45,3 17,8 15,5
Capital invested turnover (%) 80,1 28,4 22,2
Capital employed turnover (%) 50,7 19,4 16,5
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 23,4 45,6 41,4
Working capital / sales (%) -1,8 -4,3 -6,3
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -31,6 -31,1 12,2
Net debt / market cap (%) -13,5 -18 7,1
Equity ratio (%) 89,3 92,5 65,8
Net IB debt adj. / equity (%) -31,4 -31 12,3
Current ratio (%) 393,9 493,3 427
EBITDA / net interest (%) -104,5 -28 0
Net IB debt / EBITDA (%) -878,8 -4100,6 722,1
Interest cover (%) -86,7 -6,3 N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 34 47 47
Fully diluted shares Adj 34 47 47
EPS 0,86 0,82 0,25
Dividend per share Adj 0 0 0
EPS Adj 0,86 0,82 0,25
BVPS 23,46 30,08 30,33
BVPS Adj 23,46 30,08 30,33
Net IB debt / share -7,4 -9,4 3,7
Share price 54,74 51,9 51,9
Market cap. (m) 1858 2426 2426
Valuation 2019 2020 2021
P/E 74,5 63 206
EV/sales 8,32 9,27 9,14
EV/EBITDA 67,4 186,5 108,3
EV/EBITA 81,2 832,3 174,5
EV/EBIT 168,7 832,3 174,5
Dividend yield (%) 0 0 0
FCF yield (%) -23 -15,8 -25,1
P/BVPS 2,73 1,73 1,71
P/BVPS Adj 2,73 1,73 1,71
P/E Adj 74,5 63 206
EV/EBITDA Adj 118,2 186,5 108,3
EV/EBITA Adj 168,7 832,3 174,5
EV/EBIT Adj -2193,8 832,3 174,5
EV/cap. employed 2,4 1,4 1,3
Investment ratios 2019 2020 2021
Capex / sales 219,8 211,7 218,9
Capex / depreciation 15512,1 6806,4 8303,3
Capex tangibles / tangible fixed assets 95,7 44,5 38,1
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 -0,1 0,3 0,2

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 11.8 % 11.8 % 30 Jun 2020
Bure Equity 11.3 % 11.3 % 30 Jun 2020
AFA Försäkring 9.2 % 9.2 % 30 Jun 2020
Fjärde AP-fonden 8.8 % 8.8 % 30 Jun 2020
Futur Pension 8.2 % 8.2 % 30 Jun 2020
Handelsbanken Fonder 7.3 % 7.3 % 30 Jun 2020
OverHorizon (Cyprus) PLC 6.6 % 6.6 % 30 Jun 2020
Staffan Persson 6.2 % 6.2 % 30 Jun 2020
Stena 3.3 % 3.3 % 30 Jun 2020
Dan Sten Olsson med familj och stiftelse 2.3 % 2.3 % 16 Mar 2020
Source: Holdings by Modular Finance AB

Insider list - Ovzon

Name Quantity Code Date
Dan Jangblad + 650 BUY 14 Jul 2020
Per Wahlberg + 50 000 ALTM 3 Jul 2020
Magnus René + 100 000 ALTM 3 Jul 2020
Pål Ekberg + 50 000 ALTM 3 Jul 2020
Nils Norén + 909 BUY 25 Jun 2020
Nils Norén + 909 BUY 25 Jun 2020
Cecilia Driving + 18 BUY 18 Jun 2020
Johan Brandt + 909 BUY 16 Jun 2020
Magnus René + 7 272 BUY 16 Jun 2020
Cecilia Driving + 45 BUY 16 Jun 2020

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