• Report out on 25 July
• Q2e sales of EUR 43m (+1% y-o-y), order intake: EUR 41m
• Trading at 13x-9x '25e-'27e EV/EBIT

Q2 expectations

We expect Q2 sales of EUR 43m, +1% y-o-y and +11% q-o-q. For Ports & Maritime we expect sales of EUR 26m (+1% y-o-y) and for Industry EUR 17m (+2% y-o-y). After a weak order intake in Q1 (after a strong Q4), we expect orders to pick up somewhat in Q2e and estimate EUR 41m (+3% y-o-y), implying a b-t-b of 0.96x (0.95x). We anticipate the company's change programmes to continue to yield higher margins, and on EBIT we estimate EUR 3.4m (2.4m), for a margin of 8% (7%).

Estimate changes and outlook

We lower '25e-'27e sales by 1-2% and EBIT by 4%, 2%, and 1% for '25e, '26e and '27e, respectively. During Q2, the company announced two major shore power orders valued at EUR 8m and 1.6m, respectively. We expect shore power demand to continue to gather pace due to regulatory drivers, but for the increasingly uncertain market environment to delay customer decisions somewhat. Industry showed improved performance in Q2 due to the company's margin-enhancing initiatives, and we expect this improvement to continue throughout '25e-'26e. We expect Industry to demonstrate EBITDA margins of >10% for '25e (~8% in '24).

Near-term focus: driving volume growth

We find it encouraging that the company has improved profitability recently. The focus will shift toward growing volumes, which we believe is essential for achieving the company’s financial targets of a +10% EBIT margin and +5% sales growth. We expect Cavotec to reach >10% margins from '28e, provided management is successful with its transformation. The share is trading at 13x-9x '25e-'27e on EV/EBIT and 26x-15 on P/E. Additionally, as of 9 July, Cavotec completed its redomiciliation from Switzerland to Sweden via a share exchange offer, with its new parent company, Cavotec Group AB, now trading on Nasdaq Stockholm.