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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 224 427 607
Sales growth (%) 6,8 90,3 42,3
EBITDA 10 88 232
EBITDA margin (%) 4,6 20,6 38,2
EBIT adj margin (%) -4,1 8,8 23,7
Pretax profit 40 18 80
EPS rep 1 0,41 2,38
EPS growth (%) 125,7 -58,9 478,5
EPS adj 1,37 0,41 2,38
DPS 0 0 0
EV/EBITDA (x) 174,8 25,5 11,4
EV/EBIT adj (x) -194 59,4 18,4
P/E (x) 63,9 155,3 26,8
P/E adj (x) 46,8 155,3 26,8
EV/sales (x) 8 5,3 4,4
FCF yield (%) -17,1 -20,9 -18,8
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -35 1 2,1
EBIT adj -9 38 144
SEKm 2019 2020e 2021e
Gross profit 104 204 365
Other operating items -93 -116 -133
EBITDA 10 88 232
Depreciation on tangibles 0 -38 -71
Depreciation on intangibles -5 -11 -15
EBITA 3 38 144
Goodwill impairment charges 0 0 0
Other impairment and amortisation -12 0 0
EBIT -9 38 144
Other financial items 0 0 0
Net financial items 50 -20 -64
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 40 18 80
Tax -7 -4 0
Net profit 34 14 80
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 34 14 80
EPS 1 0,41 2,38
EPS Adj 1,37 0,41 2,38
Total extraordinary items after tax 0 0 0
Tax rate (%) -16,5 -22 0
Gross margin (%) 46,2 47,7 60,1
EBITDA margin (%) 4,6 20,6 38,2
EBITA margin (%) 1,4 8,8 23,7
EBIT margin (%) -4,1 8,8 23,7
Pretax margin (%) 18 4,2 13,2
Net margin (%) 15 3,2 13,2
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 6,8 90,3 42,3
EBITDA growth (%) 171,8 759,4 163,3
EBIT growth (%) 52,5 508,7 281,7
Net profit growth (%) 222,1 -58,9 478,5
EPS growth (%) 125,7 -58,9 478,5
Profitability 2019 2020 2021
ROE (%) 7,7 1,7 9,4
ROE Adj (%) 10,5 1,7 9,4
ROCE (%) -2 4,1 10,6
ROCE Adj(%) 0,7 4,1 10,6
ROIC (%) -3,2 4,4 12,5
ROIC Adj (%) -3,2 4,4 12,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 10 88 232
EBITDA Adj margin (%) 4,6 20,6 38,2
EBITA Adj 3 38 144
EBITA Adj margin (%) 1,4 8,8 23,7
EBIT Adj -9 38 144
EBIT Adj margin (%) -4,1 8,8 23,7
Pretax profit Adj 53 18 80
Net profit Adj 46 14 80
Net profit to shareholders Adj 46 14 80
Net Adj margin (%) 20,5 3,2 13,2
Sales 224 427 607
COGS -121 -223 -242
SEKm 2019 2020e 2021e
EBITDA 10 88 232
Net financial items 50 -20 -64
Paid tax -7 -4 0
Non-cash items 2 2 2
Cash flow before change in WC 55 66 169
Change in WC -11 -4 35
Operating cash flow 44 62 204
CAPEX tangible fixed assets -324 -402 -480
CAPEX intangible fixed assets -87 -108 -129
Acquisitions and disposals 0 0 0
Free cash flow -368 -449 -405
Dividend paid 0 0 0
Share issues and buybacks 695 0 0
Other non cash items -7 0 0
Decrease in net IB debt 318 -450 -407
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 48 95 150
Definite intangible assets 0 0 0
Tangible fixed assets 389 801 1268
Other fixed assets 1 1 1
Fixed assets 445 905 1426
Inventories 0 0 0
Receivables 101 107 121
Other current assets 0 0 0
Cash and liquid assets 365 115 308
Total assets 911 1126 1856
Shareholders equity 802 815 896
Minority 0 0 0
Total equity 802 815 896
Long-term debt 0 200 800
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 0 0 0
Accounts payable 101 102 152
Other current liabilities 0 0 0
Total liabilities and equity 95 131 911
Net IB debt -359 92 498
Net IB debt excl. pension debt -359 92 498
Capital invested 444 908 1395
Working capital 0 4 -30
EV breakdown 2019 2020 2021
Market cap. diluted (m) 2149 2149 2149
Net IB debt Adj -358 93 499
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 1792 2242 2649
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 43 41,9 40,7
Capital invested turnover (%) 93,9 63,1 52,7
Capital employed turnover (%) 48,8 46,6 44,6
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 26,9 23,8 20,9
Working capital / sales (%) -2,5 0,5 -2,1
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -44,7 11,2 55,6
Net debt / market cap (%) -19,3 4,3 23,2
Equity ratio (%) 88 72,4 48,3
Net IB debt adj. / equity (%) -44,6 11,4 55,7
Current ratio (%) 461,8 216,4 283
EBITDA / net interest (%) -20,7 440,4 362,3
Net IB debt / EBITDA (%) -3499,3 103,9 214,8
Interest cover (%) -6,2 188,7 225,1
SEKm 2019 2020e 2021e
Shares outstanding adj. 34 34 34
Fully diluted shares Adj 34 34 34
EPS 1 0,41 2,38
Dividend per share Adj 0 0 0
EPS Adj 1,37 0,41 2,38
BVPS 23,87 24,28 26,67
BVPS Adj 23,87 24,28 26,67
Net IB debt / share -10,7 2,7 14,8
Share price 55,32 64 64
Market cap. (m) 1858 2149 2149
Valuation 2019 2020 2021
P/E 63,9 155,3 26,8
EV/sales 7,99 5,25 4,36
EV/EBITDA 174,8 25,5 11,4
EV/EBITA 585,6 59,4 18,4
EV/EBIT -194 59,4 18,4
Dividend yield (%) 0 0 0
FCF yield (%) -17,1 -20,9 -18,8
P/BVPS 2,68 2,64 2,4
P/BVPS Adj 2,68 2,64 2,4
P/E Adj 46,8 155,3 26,8
EV/EBITDA Adj 174,8 25,5 11,4
EV/EBITA Adj 585,6 59,4 18,4
EV/EBIT Adj -194 59,4 18,4
EV/cap. employed 2,2 2,2 1,6
Investment ratios 2019 2020 2021
Capex / sales 183,5 119,5 100,3
Capex / depreciation 7362 1046,7 706,7
Capex tangibles / tangible fixed assets 83,5 50,2 37,8
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 4,8 5,6

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 Dec 2019
Bure Equity 14.3 % 14.3 % 31 Dec 2019
AFA Försäkring 11.6 % 11.6 % 31 Dec 2019
OverHorizon (Cyprus) PLC 9.1 % 9.1 % 31 Dec 2019
Handelsbanken Fonder 7.1 % 7.1 % 31 Dec 2019
Catella Fonder 4.3 % 4.3 % 31 Dec 2019
Danica Pension 4.1 % 4.1 % 31 Dec 2019
Avanza Pension 2.4 % 2.4 % 31 Dec 2019
Dan Sten Olsson med familj och stiftelse 2.4 % 2.4 % 17 Dec 2019
Staffan Persson 2.3 % 2.3 % 31 Dec 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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