<a id="bm-comp-c483fbee-c7ca-4792-9589-be6cd4146143" name="bm-comp-c483fbee-c7ca-4792-9589-be6cd4146143" class="BMCustomAnchor"></a><table><tr><td bm-component-id="c483fbee-c7ca-4792-9589-be6cd4146143" style="vertical-align: top; width:100.000000%;"><ul><li>Orders -9%, sales +10% vs. ABGSCe</li><li>EBIT EUR 3m (vs. ABGSCe 2m), for a margin of 7%</li><li>Profitability improvements driven by P&M division</li></ul></td></tr></table><a id="bm-comp-f9b700fb-96aa-48c9-8a98-806c8251770f" name="bm-comp-f9b700fb-96aa-48c9-8a98-806c8251770f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="f9b700fb-96aa-48c9-8a98-806c8251770f" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q3: Profitability improvements</h3><p>Order intake came in at EUR 36m (-9.3% vs. ABGSCe 40m), -5.4% y-o-y. Sales came in at EUR 44m (+10% vs. ABGSCe 40m), +5.1% y-o-y (+4.8% org.). EBIT improved and came in at EUR 3m (+49% vs. ABGSCe 2m), for a margin of 6.8% (ABGSCe +5.1%), driven by its Ports & Maritime segment. FCF lease adj. came in at EUR -1.7m (-142% vs. ABGSCe 4m), -150% y-o-y. We find it promising that the company demonstrated an improvement in profitability through increased cost control. However, FCF was negative due to lower customer pre-payments and increased receivables. Management states that the development of its working capital will remain a key focus area for the company.</p><h3 class="bm-h3">Estimates and outlook</h3><p>On numbers alone, we expect '24e-'26e sales to change by roughly +2-3%, and EBIT by high single digits. The EBIT improvements the company has seen so far have been driven by its Ports & Maritime segment, and we expect the Industry segment to gradually improve with the help of the company's strategic initiatives that are in place.</p><h3 class="bm-h3">Valuation</h3><p>The share has returned -10% L3M (vs. peer median +15% and OMXSALLS +5.1%), and is currently trading at 34x-13x '24e-'26e P/E on our pre-report estimates vs. the peer median of 21x-16x. The company will host a <a href="https://ir.financialhearings.com/cavotec-sa-q3-report-2024" target="_blank">conference call</a> of the Q3 results at 10:00 CET.</p></td></tr></table><a id="bm-comp-45004b85-7797-46ce-b7ac-07a8516ca0d5" name="bm-comp-45004b85-7797-46ce-b7ac-07a8516ca0d5" class="BMCustomAnchor"></a><table><tr><td bm-component-id="45004b85-7797-46ce-b7ac-07a8516ca0d5" style="vertical-align: top; width:100.000000%;"><table id="bm-img-423b71ce-0464-4cb1-b487-cba593422949" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Deviation table</td></tr><tr><td><img bm-img-encrypt="423b71ce-0464-4cb1-b487-cba593422949" bm-img-original-height="724" bm-img-original-width="524" bm-img-svg="image:image_upload/83189_732b501e-fedb-4942-81bf-b3ab7f56db69.svg" bm-img-width-hint="72.08%" id="bm-id-29a4f243-3498-45e1-9a1e-246d8895f9b0" src="https://abgsc.bluematrix.com/images/image_upload/83189_732b501e-fedb-4942-81bf-b3ab7f56db69_524.png" svg="/nas/web/clients/abgsc/images/image_upload/83189_732b501e-fedb-4942-81bf-b3ab7f56db69.svg" width="524" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier Estimates, Company Data</td></tr></table></td></tr></table>