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Written by 09:00 Analysartiklar, Analys

Strong momentum in internal development behind short-term lull this quarter

KebNi’s reporting continues to have an emphasis on the company’s comprehensive internal work. The sales organization reached full strength in August, and the company is preparing for activities during the autumn in parallel with the development of its own IMU application for scaffolding and the launch of NG IMU in spring 2022. Following lower revenues than we anticipated from the existing operations, we have lowered our expectations for the full year and extended the expected run-up for KebNi’s re-styled operations, which is why we also expect a renewed need for capital during the winter.

Johan Widmark | 2021-08-25 10:15

This commissioned research is for informational purposes only. It is not an investment recommendation or investment advice. For more information, please see disclaimer. 
Strong momentum in build-up behind the lull this quarter

The report for the second quarter reflects a high level of internal activity at KebNi, demonstrating excellent potential to re-style the company into a more sales-oriented organization with a broader and more current product offering, including everything from the new 1.8 meter drive-away antenna, an IMU offering that highlights the forefront of technology with the launch of NG IMU, and a sales organization with a tripled reach in terms of partner presence by 2022. At the same time, short-term growth continued to weaken in the second quarter, with basically non-existent sales, earnings of SEK -10 million and operating cash flow of SEK -17 million.

Mixed performance in the existing portfolio

In addition to the final delivery to IAI during Q2 2021 and scheduled deliveries of IMU prototypes to SAAB, Satmission is now preparing a road show during the autumn that should be able to make an impact on sales in the medium term. At the same time, development work is underway on the company’s own IMU application for monitoring scaffolding, which is expected to be launched in 2022. Although we expect small volumes initially, our calculations show (see our most recent update Scaffolding focus in new vertical with great potential) annual revenue potential of SEK 100 million, and the application will be able to expand to real-time monitoring of a variety of other areas with little or no modification.

Read our report on KebNi here

Expected strengthening of cash reserves towards winter

As the support from the underlying satellite operations has proven to be more variable and less predictable, we have lowered our expectations for sales this year and do not now expect numbers in the black until 2024. With operating cash flow so far this year of SEK -29 million and our lower level of expectation for the coming year, we anticipate a renewed need for capital during the winter. Adjusted for the dilution from an expected rights issue of SEK 20 million, our forecast provides support for a fair value based on DCF and comparative multiples of SEK 1.5-2.2 (2.5-2.9) per share on a horizon of 18-24 months.

DISCLAIMER
Information provided here or on Emergers’ website emergers.se is not intended to be financial advice. Emergers receives compensation for writing about the company in question. The company has been given the opportunity to influence factual statements before publication, but forecasts, conclusions and valuation reasoning are Emergers’ own. Articles of analysis shall not be construed as a recommendation or solicitation to invest in the companies described. Emergers cannot guarantee that the conclusions presented in the analysis will be met. Emergers cannot be held liable for either direct or indirect damages caused by decisions made on the basis of information in this analysis. Investors are encouraged to seek additional information as well as consult a financial advisor prior to any investment decision. 

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