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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 210 231 491
Sales growth (%) 3,7 10,1 112,5
EBITDA -12 27 107
EBITDA margin (%) -5,8 11,6 21,7
EBIT adj margin (%) 4,1 1,2 15,4
Pretax profit -24 49 -5
EPS rep -3,6 1,37 -0,15
EPS growth (%) -396,7 138,1 -111
EPS adj 0,09 1,74 -0,15
DPS 0 0 0
EV/EBITDA (x) -21 55,5 17,8
EV/EBIT adj (x) 29,3 529 25
P/E (x) -11,6 47,2 -429,4
P/E adj (x) 485,3 37,3 -429,4
EV/sales (x) 1,2 6,4 3,9
FCF yield (%) -22,7 -1,8 -18,7
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 3,4 -25,9 -2,7
EBIT adj 9 3 76
SEKm 2018 2019e 2020e
Gross profit 93 113 240
Other operating items -105 -87 -133
EBITDA -12 27 107
Depreciation on tangibles 0 -9 -13
Depreciation on intangibles -5 -2 -18
EBITA -17 15 76
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 -12 0
EBIT -17 3 76
Other financial items 0 0 0
Net financial items -7 46 -81
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -24 49 -5
Tax -1 -3 0
Net profit -25 46 -5
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -25 46 -5
EPS -3,6 1,37 -0,15
EPS Adj 0,09 1,74 -0,15
Total extraordinary items after tax -26,1 0 0
Tax rate (%) 4,1 -6 0
Gross margin (%) 44,2 49,1 48,8
EBITDA margin (%) -5,8 11,6 21,7
EBITA margin (%) -8,3 6,5 15,4
EBIT margin (%) -8,3 1,2 15,4
Pretax margin (%) -11,6 21,2 -1
Net margin (%) -12,1 19,9 -1
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 3,7 10,1 112,5
EBITDA growth (%) -141,7 320,7 296,9
EBIT growth (%) -172,3 116,2 2588,8
Net profit growth (%) -519,3 281,2 -111
EPS growth (%) -396,7 138,1 -111
Profitability 2018 2019 2020
ROE (%) 107 10,4 -0,6
ROE Adj (%) -2,6 13,2 -0,6
ROCE (%) -21,9 0,6 6,1
ROCE Adj(%) 11 3,2 6,1
ROIC (%) -123,1 3,5 23,7
ROIC Adj (%) 61,8 3,5 23,7
Adj earnings numbers 2018 2019 2020
EBITDA Adj 14 27 107
EBITDA Adj margin (%) 6,6 11,6 21,7
EBITA Adj 9 15 76
EBITA Adj margin (%) 4,1 6,5 15,4
EBIT Adj 9 3 76
EBIT Adj margin (%) 4,1 1,2 15,4
Pretax profit Adj 2 61 -5
Net profit Adj 1 58 -5
Net profit to shareholders Adj 1 58 -5
Net Adj margin (%) 0,3 25,3 -1
Sales 210 231 491
COGS -117 -118 -251
SEKm 2018 2019e 2020e
EBITDA -12 27 107
Net financial items -7 46 -81
Paid tax -1 -3 0
Non-cash items 1 0 0
Cash flow before change in WC -19 70 26
Change in WC -28 20 56
Operating cash flow -60 90 82
CAPEX tangible fixed assets -2 -63 -241
CAPEX intangible fixed assets -5 -67 -247
Acquisitions and disposals 0 0 0
Free cash flow -67 -40 -406
Dividend paid 0 0 0
Share issues and buybacks 223 695 0
Other non cash items 3 0 0
Decrease in net IB debt 159 655 -406
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 0 0 0
Indefinite intangible assets 7 48 186
Definite intangible assets 0 0 0
Tangible fixed assets 38 103 422
Other fixed assets 1 9 9
Fixed assets 46 160 617
Inventories 0 0 0
Receivables 8 18 29
Other current assets 0 0 0
Cash and liquid assets 77 717 1111
Total assets 131 896 1758
Shareholders equity 73 814 809
Minority 0 0 0
Total equity 73 814 809
Long-term debt 0 8 808
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 37 23 23
Accounts payable 21 51 118
Other current liabilities 0 0 0
Total liabilities and equity 69 95 131
Net IB debt -41 -696 -289
Net IB debt excl. pension debt -41 -696 -289
Capital invested 32 118 520
Working capital -12 -32 -88
EV breakdown 2018 2019 2020
Market cap. diluted (m) 295 2176 2176
Net IB debt Adj -40 -687 -280
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 1490 1896
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 185,6 45 37
Capital invested turnover (%) 1430,7 307 154
Capital employed turnover (%) 265,5 48,4 39,5
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 16,2 15,5 17,2
Working capital / sales (%) -12,5 -9,7 -12,3
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -55,9 -85,5 -35,7
Net debt / market cap (%) -13,3 -32 -13,3
Equity ratio (%) 55,6 90,9 46
Net IB debt adj. / equity (%) -54,4 -84,3 -34,6
Current ratio (%) 147,1 996,4 809,4
EBITDA / net interest (%) -171,3 -58,1 131,9
Net IB debt / EBITDA (%) 335,1 -2590,8 -271,4
Interest cover (%) -244,3 -32,7 93,7
SEKm 2018 2019e 2020e
Shares outstanding adj. 7 34 34
Fully diluted shares Adj 7 34 34
EPS -3,6 1,37 -0,15
Dividend per share Adj 0 0 0
EPS Adj 0,09 1,74 -0,15
BVPS 10,33 24,24 24,09
BVPS Adj 10,33 24,24 24,09
Net IB debt / share -5,8 -20,7 -8,6
Share price 43,33 64,8 64,8
Market cap. (m) 306 2176 2176
Valuation 2018 2019 2020
P/E -11,6 47,2 -429,4
EV/sales 1,22 6,44 3,86
EV/EBITDA -21 55,5 17,8
EV/EBITA -14,7 98,6 25
EV/EBIT -14,7 529 25
Dividend yield (%) 0 0 0
FCF yield (%) -22,7 -1,8 -18,7
P/BVPS 4,04 2,67 2,69
P/BVPS Adj 4,04 2,67 2,69
P/E Adj 485,3 37,3 -429,4
EV/EBITDA Adj 18,4 55,5 17,8
EV/EBITA Adj 29,3 98,6 25
EV/EBIT Adj 29,3 529 25
EV/cap. employed 2,3 1,8 1,2
Investment ratios 2018 2019 2020
Capex / sales 3,1 56,4 99,4
Capex / depreciation 125,4 1109,8 1582,4
Capex tangibles / tangible fixed assets 4,7 61,1 57,1
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 0,8 9 3

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 Aug 2019
Bure Equity 14.3 % 14.3 % 30 Jun 2019
AFA Försäkring 11.6 % 11.6 % 30 Jun 2019
OverHorizon (Cyprus) PLC 9.1 % 9.1 % 30 Jun 2019
Handelsbanken Fonder 6.3 % 6.3 % 31 Aug 2019
Catella Fonder 4.5 % 4.5 % 31 Jul 2019
Danica Pension 2.6 % 2.6 % 30 Jun 2019
Familjen Olsson med stiftelse 2.4 % 2.4 % 10 Sep 2019
Staffan Persson 2.3 % 2.3 % 30 Jun 2019
Avanza Pension 2.0 % 2.0 % 30 Jun 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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