INVISIO (IVSO) Q1 2018 earnings summary

Executive summary

• Q1 revenue was SEK 84.2m, down 4% YoY; repeat and new-customer orders supported sales close to the strong comparative quarter, with a higher share of smaller orders.

• Gross margin rose to 59.6% from 54.9%, while operating profit fell to SEK 18.5m from SEK 22.7m as strategic product and market investment raised costs.

• Order book was SEK 127.2m at quarter-end, versus SEK 148.5m a year earlier.

Financial highlights

• Revenue was SEK 84.2m, down 4% YoY and 3% in comparable currencies; gross profit rose to SEK 50.1m from SEK 48.2m.

• Operating profit was SEK 18.5m versus SEK 22.7m; EBITDA was SEK 19.5m versus SEK 24.0m. Operating expenses rose to SEK 31.6m from SEK 25.5m amid growth activities and a larger organization.

• Net income was SEK 13.8m versus SEK 22.7m; EPS was SEK 0.31 versus SEK 0.52.

• Operating cash flow was SEK 41.2m versus SEK 24.7m; total cash flow was SEK 37.4m versus SEK 21.4m.

Outlook and guidance

• 2018 priorities included expanding the business, strengthening positions in key markets, reinforcing defense and security customer relationships, and continuing R&D and marketing investment at a slower pace than in 2017.

• Gross margin guidance remained 50%-55%, with direct sales potentially supporting higher margins over time and product mix affecting results.

• The first vehicle intercom system was expected to become commercially available toward year-end 2018; meaningful business was not expected before 2019-2020.

• Financial targets were average annual sales growth of 20% and an operating margin of at least 15%.