INVISIO (IVSO) Q3 2017 earnings summary

Executive summary

• Jan–Sep revenue was broadly flat YoY; expansion investments and higher operating costs reduced operating profit, while Q3 gross margin improved.

• Strategy focused on expanding the product range and geographic reach; strong order intake lifted the quarter-end backlog to SEK 171.1m.

Financial highlights

• Jan–Sep revenue was SEK 247.6m vs SEK 248.7m; comparable-currency sales increased 3%, and gross profit was SEK 131.2m vs SEK 130.6m.

• Jan–Sep EBITDA was SEK 54.6m, operating profit SEK 51.3m vs SEK 73.5m, and net income SEK 47.4m vs SEK 75.5m.

• Q3 revenue was SEK 75.5m vs SEK 85.6m, down 12%; customer-requested color changes delayed SEK 10–15m of deliveries, with possible spillover into Q4.

• Q3 operating profit was SEK 14.3m vs SEK 27.7m; profit for the period was SEK 13.1m vs SEK 29.9m.

Outlook and guidance

• Vehicle-intercom testing with selected customers is planned for early/spring 2018; commercial availability is targeted for the latter half of 2018.

• First vehicle-product orders could arrive in late 2018; larger orders, particularly formal tenders, may follow in 2019.

• Financial targets are average annual sales growth of 20% and an operating margin of at least 15%; stated gross-margin range is 50%–55%.

• OPEX is expected to stabilize at a higher level in Q4 and 2018; hiring should slow, with only marginal additions anticipated.

• The vehicle-intercom market may be at least as large as the existing product market over the long term; broader products are intended to reduce exposure to uneven procurement cycles.