* Sales of EUR 42.6m, adj. EBIT of EUR 1.0m
* Record-high order book providing long-term visibility
* Trading at 12-8x EV/EBIT
Higher volumes underpin strengthened profitability
Cavotec returned to positive adj. EBIT, marking a welcome improvement both y-o-y and sequentially. Sales were above expectations at EUR 43m, +19% y-o-y (+12% vs. ABGSCe). P&M was +27% and Industry +10% y-o-y. Similar to Q1 and Q2, order intake was strong, at EUR 47m (+29% y-o-y), 23% above ABGSCe of EUR 38m; it was driven by shore power systems and motorised cable reels and included the ~EUR 8m shore power order and the ~EUR 5m automated mooring order in India. This took the order backlog to a record EUR 160m. With the R12m book-to-bill at ~1.2x, we see a healthy demand outlook for P&M. Adj. EBIT came in above expectations at EUR 1.0m vs. ABGSCe of EUR 0.2m, supported by volume leverage in P&M. However, management noted intensified competition in on-vessel shore power products weighing on margins, and Industry's margin was somewhat lower y-o-y (EBIT margin 10.6% vs. 12.3% LY). More NRIs of EUR -0.2m were incurred in the quarter relating to restructuring costs under the ongoing cost-savings programme. A release of NWC led to improved lease-adj. FCF of EUR 7.2m.
Earnings beat drives EBIT uplift
We raise sales by 3% for '26e-'28e following the stronger-than-expected sales in the quarter. Adj. EBIT is up EUR 1.4-0.9m for '26e-'27e on the earnings beat.
12-8x '27e-'28e EV/EBIT
We remain vigilant on near-term margins given the intensified competition in vessel-side shore power and a backlog with uncertain margin quality. Longer term, the record EUR 160m order book should be a support, and the EUR 3m cost-savings programme should add to earnings from early 2027. The share is currently trading at 12-8x EV/EBIT on '27e-'28e vs. the peer median of 17-13x.