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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 232 313 599
Sales growth (%) 10,3 35,1 91,3
EBITDA 29 49 229
EBITDA margin (%) 12,3 15,5 38,2
EBIT adj margin (%) 4,9 4,7 23,2
Pretax profit 39 -17 75
EPS rep 0,87 -0,48 2,15
EPS growth (%) 124,2 -155,2 547,5
EPS adj 1,24 -0,48 2,15
DPS 0 0 0
EV/EBITDA (x) 67,4 35,6 8,9
EV/EBIT adj (x) 168,7 118,6 14,7
P/E (x) 74,5 -93,4 20,9
P/E adj (x) 52,4 -93,4 20,9
EV/sales (x) 8,3 5,5 3,4
FCF yield (%) -23 -31,5 -20
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -8,8 3,3 2,1
EBIT adj 11 15 139
SEKm 2019 2020e 2021e
Gross profit 109 144 363
Other operating items -81 -95 -134
EBITDA 29 49 229
Depreciation on tangibles 2 -26 -76
Depreciation on intangibles -5 -7 -12
EBITA 24 15 139
Goodwill impairment charges 0 0 0
Other impairment and amortisation -12 0 0
EBIT 11 15 139
Other financial items 0 0 0
Net financial items 27 -31 -64
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 39 -17 75
Tax -10 0 0
Net profit 29 -17 75
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 29 -17 75
EPS 0,87 -0,48 2,15
EPS Adj 1,24 -0,48 2,15
Total extraordinary items after tax 0 0 0
Tax rate (%) -24,6 0 0
Gross margin (%) 47,1 45,9 60,7
EBITDA margin (%) 12,3 15,5 38,2
EBITA margin (%) 10,2 4,7 23,2
EBIT margin (%) 4,9 4,7 23,2
Pretax margin (%) 16,7 -5,4 12,5
Net margin (%) 12,6 -5,4 12,5
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 10,3 35,1 91,3
EBITDA growth (%) 335,1 69,9 371
EBIT growth (%) 165,8 27,8 853,4
Net profit growth (%) 214,8 -157,4 547,5
EPS growth (%) 124,2 -155,2 547,5
Profitability 2019 2020 2021
ROE (%) 6,7 -2 8,4
ROE Adj (%) 9,6 -2 8,4
ROCE (%) 2,5 1,6 9,9
ROCE Adj(%) 5,2 1,6 9,9
ROIC (%) 3 1,9 11,4
ROIC Adj (%) 3 1,9 11,4
Adj earnings numbers 2019 2020 2021
EBITDA Adj 29 49 229
EBITDA Adj margin (%) 12,3 15,5 38,2
EBITA Adj 24 15 139
EBITA Adj margin (%) 10,2 4,7 23,2
EBIT Adj 11 15 139
EBIT Adj margin (%) 4,9 4,7 23,2
Pretax profit Adj 51 -17 75
Net profit Adj 42 -17 75
Net profit to shareholders Adj 42 -17 75
Net Adj margin (%) 17,9 -5,4 12,5
Sales 232 313 599
COGS -123 -169 -235
SEKm 2019 2020e 2021e
EBITDA 29 49 229
Net financial items 27 -31 -64
Paid tax -10 0 0
Non-cash items -19 0 0
Cash flow before change in WC 27 17 165
Change in WC -14 0 33
Operating cash flow 10 17 198
CAPEX tangible fixed assets -402 -402 -402
CAPEX intangible fixed assets -107 -108 -110
Acquisitions and disposals 0 0 0
Free cash flow -499 -493 -314
Dividend paid 0 0 0
Share issues and buybacks 695 81 0
Other non cash items 17 0 0
Decrease in net IB debt 211 -414 -315
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 3 54 102
Definite intangible assets 0 0 0
Tangible fixed assets 532 958 1334
Other fixed assets 1 1 1
Fixed assets 543 1021 1444
Inventories 0 0 0
Receivables 91 78 120
Other current assets 0 0 0
Cash and liquid assets 257 44 328
Total assets 892 1143 1892
Shareholders equity 796 861 936
Minority 0 0 0
Total equity 796 861 936
Long-term debt 0 200 800
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 75 150
Other current liabilities 0 0 0
Total liabilities and equity 892 1143 1892
Net IB debt -251 162 478
Net IB debt excl. pension debt -251 162 478
Capital invested 545 1023 1413
Working capital 3 3 -30
EV breakdown 2019 2020 2021
Market cap. diluted (m) 2176 1567 1567
Net IB debt Adj -250 163 479
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 1731 2046
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 45,3 30,8 39,4
Capital invested turnover (%) 80,1 39,9 49,1
Capital employed turnover (%) 50,7 33,4 42,6
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 23,4 26,1 18,8
Working capital / sales (%) -1,8 1 -2,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -31,6 18,9 51,1
Net debt / market cap (%) -13,5 10,4 30,5
Equity ratio (%) 89,3 75,3 49,4
Net IB debt adj. / equity (%) -31,4 19 51,2
Current ratio (%) 393,9 162,4 299,4
EBITDA / net interest (%) -104,5 154,9 357,6
Net IB debt / EBITDA (%) -878,8 334,1 208,8
Interest cover (%) -86,7 46,5 217,3
SEKm 2019 2020e 2021e
Shares outstanding adj. 34 35 35
Fully diluted shares Adj 34 35 35
EPS 0,87 -0,48 2,15
Dividend per share Adj 0 0 0
EPS Adj 1,24 -0,48 2,15
BVPS 23,71 24,63 26,77
BVPS Adj 23,71 24,63 26,77
Net IB debt / share -7,5 4,6 13,7
Share price 55,32 44,85 44,85
Market cap. (m) 1858 1567 1567
Valuation 2019 2020 2021
P/E 74,5 -93,4 20,9
EV/sales 8,32 5,53 3,42
EV/EBITDA 67,4 35,6 8,9
EV/EBITA 81,2 118,6 14,7
EV/EBIT 168,7 118,6 14,7
Dividend yield (%) 0 0 0
FCF yield (%) -23 -31,5 -20
P/BVPS 2,73 1,82 1,68
P/BVPS Adj 2,73 1,82 1,68
P/E Adj 52,4 -93,4 20,9
EV/EBITDA Adj 67,4 35,6 8,9
EV/EBITA Adj 81,2 118,6 14,7
EV/EBIT Adj 168,7 118,6 14,7
EV/cap. employed 2,4 1,6 1,2
Investment ratios 2019 2020 2021
Capex / sales 219,8 163 85,5
Capex / depreciation 15512,1 1574,1 580,5
Capex tangibles / tangible fixed assets 75,6 41,9 30,1
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 -0,3 2,7 5,7

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 14.3 % 14.3 % 29 Feb 2020
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 7.0 % 7.0 % 29 Feb 2020
Futur Pension 4.1 % 4.1 % 31 Dec 2019
Stena 4.0 % 4.0 % 29 Jan 2020
Catella Fonder 3.9 % 3.9 % 29 Feb 2020
Avanza Pension 2.4 % 2.4 % 31 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 + 15 000 UTFÄ 6 May 2019
Nicklas Paulson + 100 000 UTFÄ 6 May 2019
Magnus René + 200 000 BUY 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
Nicklas Paulson + 769 426 BUY 1 Feb 2019
Per Wahlberg + 335 856 BUY 1 Feb 2019
Patrik Tigerschiöld + 200 000 BUY 29 Jan 2019

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