* Solid Q4 but continued cautious order environment
* Industry bright spot, initiatives delivering
* Customer caution in P&M, expected to soften up into '26e
Q4 results
Cavotec reported sales above expectations at EUR 50m (+9% y-o-y, 34% vs ABGSCe). P&M: -5% y-o-y, Industry: +36% y-o-y. Order intake of EUR 48m was in line with estimates. Adj. EBIT was better than expected at EUR 3.9m vs. ABGSCe 0.7m, mainly due to the higher volumes. The highlight of the report was the continued momentum in Industry, with good demand for motorised cable reel systems. This, coupled with recent operational improvements, drove EBITDA margins to 16.1% vs. 6.7% LY. For P&Ms, however, EBITDA margins contracted (11.7% vs 17.6% Q4'24), albeit against tough comps. Management pointed towards increased customer caution towards the end of the year in P&M, which we expect will weigh on Q1 orders.
Estimate changes and outlook
We raise '26e-27e sales by 4% on stronger-than-expected sales in Q4, but lower total '26e-'27e EBIT by 2-5%, mainly reflecting our lowered margin expectations in P&M. Management reiterated that P&M softness is largely linked to delayed decisions (pushing forward rather than cancellations) and said customer caution is already “softening up” into 2026. In addition, the company is initiating cost-savings in '26, with details to be announced in Q1.
A soft year
While FY'25 was a soft year for Cavotec, we continue to see attractive long-term potential in shore power and mining electrification. Despite a more cautious order environment, we find it positive that Industry is showing a positive trend. Notably, management also highlighted that Industry momentum is supported by increased field activity and earlier customer involvement/co-development. The share is trading at 19x-11x '26e-'27e EV/EBIT on our post-report estimates vs. the peer median of 17x-13x.