These are top 10 stocks traded on the Robinhood UK platform in July
Envisio (ENVS) reported its Q4 2024 earnings, showcasing record revenues and robust EBIT margins. The company achieved nearly $600 million in quarterly revenue, marking an 80% increase from the previous year. With a 46% revenue growth for the full year, Envisio reached the highest annual revenues in its history. The company’s stock, trading under the symbol IVSO, saw a 5.57% increase, closing at $350.5, reflecting investor optimism following the earnings announcement. According to InvestingPro, the company maintains a "GREAT" financial health score of 3.45, with impressive year-over-year returns of nearly 55%.
[Discover 20 additional InvestingPro Tips for Envisio, including detailed insights on profitability and growth metrics.]
Key Takeaways
- Envisio’s Q4 2024 revenue surged by 80% year-over-year.
- The company reported a record EBIT margin of 22.3% for 2024.
- Order intake increased significantly, with a $830 million backlog entering 2025.
- The addressable market estimate was revised to $25 billion, an 80% increase.
- Envisio’s stock rose by 5.57% following the earnings release.
Company Performance
Envisio demonstrated impressive performance in Q4 2024, with revenues nearly doubling compared to the previous year. The company attributed this growth to strong demand for its soldier communication systems and a robust order intake, which increased from SEK 1.3 billion to almost SEK 2 billion. The acquisition of UltraLynx and the development of the Invisio Link wireless intercom system further bolstered its market position.
Financial Highlights
- Revenue: Approximately $600 million in Q4 2024, up 80% year-over-year.
- Full-year revenue growth: 46%, excluding third-party radio deliveries, 32%.
- Gross margin: Stable at around 60%.
- EBIT margin: Record high in Q4, with full-year margin at 22.3%.
Outlook & Guidance
Looking forward, Envisio anticipates continued strong demand in 2025, particularly in the U.S. and European markets. The company plans to focus on expanding its soldier communication systems and exploring additional M&A opportunities. With a history of 28% average growth over the past five years, Envisio is well-positioned for future expansion.
Executive Commentary
CEO Lars Heugard Hansen emphasized the company’s strategic focus, stating, "We are committed to play a very central role in the advancement of modern soldier systems." He highlighted the company’s flexible business model, which enables quick responses to market demands and significant acquisitions. Hansen also noted, "We have a strong financial position, so we are able to not only act fast but also do significant acquisitions."
Risks and Challenges
- Supply chain disruptions could impact production timelines.
- Market saturation in key regions may limit growth opportunities.
- Geopolitical uncertainties could affect international operations.
- Dependence on defense contracts poses a risk if government budgets shift.
- Technological advancements by competitors could challenge market position.
Q&A
During the earnings call, analysts inquired about the rationale behind the UltraLynx acquisition and its potential value to the soldier systems. Envisio clarified its methodology for estimating market size and discussed potential product development and market expansion strategies.
Full transcript - Invisio Communications AB (IVSO) Q4 2024:
Conference Operator: Welcome to Envisio Q4 Report 2024. Today I am pleased to present CEO Lars Heugard Hansen and CFO Thomas Larsen. For the first part of the call, all participants will be in listen only mode. During the questions and answers session, participants are able to ask questions by pressing star five on their telephone keypad. Now I will hand the conference over to CEO Lars Heugard Hansen.
Please go ahead.
Lars Heugard Hansen, CEO, Envisio: Thank you very much and welcome all to the presentation of our fourth quarter and full year report which we characterize as record breaking. And indeed, it is. In addition to the numbers, we also report on our acquisition of the product line called UltraLynx that is a new growth opportunity for us going forward. So in the final quarter of twenty twenty four, we saw a continuation of the positive trend we have seen throughout the year and this led to a record quarter for us with revenues close to $600,000,000 and order intake around $550,000,000 So we leave $24,000,000 with a very strong order book and ’24 also shows the last quarter that we have a very agile business model where we are able to react quickly on customer requirements for deliveries and that includes the fact that we have significant inventory for immediate delivery. And this has a direct impact on our operating margin, which in Q4 was record high at almost 33%.
Two important custom activities that we will return to with the U. S. Defense Innovation Unit and a large order that we received and then we will also get back to the Ultralix acquisition and a little explanation to exactly what that is. So turning to order intake, again a very strong quarter and the demand continues to be strong across all our portfolio and also in our main geographical market areas, North America and Europe. So we almost 80% up compared to last year on the order intake.
And for the full year, we went from SEK1.3 billion to almost SEK2 billion in order intake. And if we exclude the radio in the first quarter of twenty twenty four, we ended at SEK 1,700,000,000.0. So a strong increase in our order intake both with and without the third party radios. Now that means that we go into 2025 with a well filled order book of around $830,000,000. This gives us a strong start because a big part of that will be delivered during the first half of the year.
Again, we have a good inventory situation and we always try to deliver according to customers’ wishes. So we should be seeing good deliveries in the first half of twenty twenty five. The revenues for Q4 was record high. As I said, almost million compared to million last year. And for the full year, we ended at billion also highest in the company history.
So our growth in 2024 was 46% in revenues or 32% if we exclude the radio deliveries earlier in the year. So this is a very strong performance and it shows the advantage of our business model with external manufacturing where we are able to scale up within a reasonably short amount of time. And we see this as a strong competitive advantage in the marketplace where we are able to respond to customers’ needs within a very short period of time. Our gross margin also remained stable in the quarter, a little above 60% improvement from last year. And for the full year, we were also above 60%, sixty point nine % if we exclude the third party radio deliveries, which impacted us with around 5%.
So and the majority of the deliveries of the radius took place in the third sorry, second quarter and were completed in the third quarter. So all in all, stability across the line here and that also goes for our underlying trend for our operating expenses. We have a plan for how we continue to invest in R and D and in our sales team. And so we added net about 25 people to the company in 2024 and then additionally we have added six people through the acquisition of the Linx product line in early twenty twenty five. So this is a sort of stable development we have seen and that is in line with our expectations for market growth and development over time.
We, as most know, expand about 15% of our revenues in R and D. We have many new products under development. And in 2025, we will see several of our larger projects go into the final development stage, which is where we also do external testing and verification. And therefore, we are expected to see a little higher amount for depreciation than in previous year due to large projects being terminated and ready for sales. So EBIT, margin, as I said, the revenue is a direct impact on EBIT with the light business model that we have with external manufacturing and it was record high in the quarter.
And for the full year, it was also satisfactory at 22.3%, well above our financial target of 15%. But as we all know from history, it fluctuates between quarters. And therefore, as usual, the development and performance of Envysio should be evaluated on a longer term perspective and not on a single quarter alone. But we are of course very pleased with the performance that we saw in both Q4 and for the full year of 2024. Cash flow, yes, not so much to say.
We invoiced quite a lot of our revenues in the last part of the quarter and therefore, payments will be received in Q1 and that has an impact on the cash flow. But this is our usual way of operating and we will receive payment for the many shipments in the first half of Q1. A couple of highlights from the business side. Another order for our intercom system with hearing protection solutions. So it’s a combo system for a customer in Europe that wants intercom systems for vehicles together with hearing protection systems for the people inside the vehicles.
And this is what we have seen growing demand for in 2024 and we keep inventory of these solutions to be able to deliver relatively swiftly, which also was the case here where we delivered the majority of the order already in the same quarter Q4 where we received the order. Another significant customer activity was the co development with an organization called DIU, U. S. Defense Innovation Unit that has resulted in a product solution called Invisio Link that we have announced during 2024, which is a wireless addition to our intercom system. And the advantage of cooperation with the USDIU is, of course, that we’ve had access to special users that have been able to give us necessary feedback and testing verification on the product solutions back and forth throughout the development phase.
So we’ve been very pleased with the collaboration and this gives us further opportunities for developing products but also for sales throughout this collaboration. We received the first test order worth around US3.5 million dollars for the Invisio Link solution and we definitely expect this to be increasing over time and already in 2025. Then the acquisition of the product line Linx that we have announced a little earlier this year which is a new addition to our product portfolio. The explanation, so to speak, behind this is that it relates to the modern soldier system that we have tried to illustrate a little bit on the picture that a modern soldier has a complex network of items on the body, radios, weapon sites, navigation tools, sensors, etcetera, etcetera. And all these devices have different standards.
They must also often share data, audio and power to be efficient. The integration of all these different devices is often difficult because they come from different manufacturers, they use different protocols, they have different power demands and different needs for real time communication. Now the product line from AlterLinks will streamline this by making sure that things work together, talk together, harmonizing protocols and manage power and ensuring interoperability between the different devices. And as we can see, modern soldier systems are transitioning from analog to digital and this means that more soldiers will be equipped with this type of advanced technology that not only enhances their safety but also their coordination and mission success. So we think that greater connectivity, navigation and faster information sharing will improve their decision making and effectiveness.
So the system is a plug and play. It has plug and play functionality and it will reduce both the cognitive and the physical burden on the user. So it’s very much a product of the future. So what we have acquired is a product line, physical products with software from a UK company called Ultra PCS. And the product line will be renamed, rebranded to Envisio.
It consists of intelligent data hubs, software insights, more computers insights and a range of variety of cables to connect with. The know how is secured. It’s not only the physical products, it’s also the know how by the fact that all employees that have been directly involved with the product line have now joined Envysio and are based in The U. K. We have products that are already at display at trade shows and are being promoted to customers, but we don’t expect to see significant revenues from this until 2026 and onwards.
The functionality, as I said, here you can see Sotter with a data hub on his back. The functionality enable integration of devices from different suppliers, including those that have not been designed to work together. So you get an ecosystem which will provide audio data connectivity and power and help the soldier maneuver and be more efficient. And it will allow FornVissio to provide a seamless and really robust plug and play communication system that meets the evolving needs of modern soldiers and defense operations. On the next slide, we just try to illustrate one example of what it could look like.
It could be used as a stand alone system, but here in this case, it is a user who has a V60 ADP control unit on his body with a headset. The user has two tactical radios and a laser range finder that are connected to his V60. But then he needs more devices on his body and therefore the Ultralinks hub is really perfect because here you can connect an end user device, a small PDA. You can connect a battery to power the entire system and you can connect an extra tactical radio and other types of equipment that you might want to have. And the hub will make sure that all of these devices talk together, they share power, you can transfer audio and data in an efficient manner.
So it allows for modular setup to enhance flexibility and Envisio will still remain central to the user through our control units and communication headsets. So this acquisition will align with our vision to expand and enhance our product offerings. We have now added a product line that we think will be very successful over time. It will be a catalyst also for development of future innovative products that will combine our knowledge and history within audio and communications with the knowledge and technologies that is contained in the hubs. So by that, we will be bringing future innovative and cutting edge products to the market.
And as a total, it strengthens our position in the market for the modern soldier systems with many digital components. What we have also released today is an update to our addressable markets. And our first attempt to do that was back in 2017, so it was time to update the numbers. It is important to say that the numbers are our own internal estimates. They are based on certain available data and knowledge and data, but they are estimate.
And we are talking about addressable markets for our different product areas. And what has happened since 2017 is of course a couple of things. First of all, it is a more mature market today, which means there are more potential users. Modernization programs have been ongoing in many countries, which has brought more radios and the need for our products up. There is an increased trend for digitalization and also a need for communication systems with hearing protection are receiving higher priority.
And as we all know, for the last two, three years, the geopolitical uncertainty has further contributed to market growth. In parallel with that, Invisio has also been driving the market. We have done that by extensive product development and this gives us a higher average price per user and system simply because a user will buy more of our things in a system. And the last example of that now is the UltraLynx hubs that will be part of the Envisio ecosystem, so to speak, the solar system. So our continuous investments in R and D has also brought us to a position where the market is more attractive.
But of course, also the general increase in prices and inflation since 2017 has contributed to a higher market value. The countries that we have included are the countries that are within NATO or NATO friendly and are basically the same that we have used in the previous estimates. And calculation are based on number of potential users, average prices and the purchasing intervals that we see within each submarket. So the conclusion to this is that we believe our current addressable market to be around 25,000,000,000 per year, which is an increase with almost 80% from the previous estimate of 14,000,000,000. And more details can be found in the press release that we sent out today in connection with the annual report.
And again, it’s important to say this is our internal estimate for addressable markets. There are no exact data available. So these are in visio estimates. The Board of Directors are proposing a dividend of DKK2.30 per share, up by DKK1.30 from last year. Company policy and objective is that over time the dividend should be between 2550% of our profits after tax.
And over the last five years, we can now calculate and see that the average dividend has totaled 48% of the total profit after tax. And if we include the proposed dividend for 2024, the number will be at 42%. So we are within our policy. So a proposed dividend of 2.3 percent. So going forward into 2025, we still expect strong demand.
We are committed to play a very central role in the advancement of modern solar systems with our personal hearing protection systems, our vehicle systems, our intercom and now also reinforced by the acquisition of the data hubs from AlterLinks. And we have a head start with a good strong order book and very high market activities and that supports our sentiment that we are looking into another strong year in 2025. So before we go to questions, I would just like to mention that we have many different types of customers around the globe. And today, there is a short video after this call if you would like to see that. Otherwise, it’s also available from our web page.
It is a short customer case where our U. S. Team is or has put together a so called command station that helps different types of law enforcement to communicate together, which is often a challenge when they go to very large activities like for instance, the pre presidential rallies that we saw we see in The U. S. As a problem for local states and federal police to talk together.
And there we have communication solutions that have been demonstrated and that is something we expect to be a sellable solution going forward. So if you have time, watch the movie. That was the presentation for Q4 and full year. So operator, we are ready for questions
Conference Operator: The next question comes from Jacob Marken from Danske Bank (CSE:DANSKE). Please go ahead.
Jacob Marken, Analyst, Danske Bank: Hello, Lars. And first of all, congratulations on a fantastic quarter, of course. So just a couple of questions from my side. I’m just wondering on the new market size, of course, a big adjustment upwards. How much of that is related to the UltraLynx acquisition?
Lars Heugard Hansen, CEO, Envisio: Not that much. And thank you, Jacob. So, yes, it’s about SEK1.5 billion. I would think at this point in time we are being very conservative because it is a product category that is new and it’s definitely growing. But we also are a little bit cautious not to be too optimistic until we actually start selling.
But I’m sure that this will develop into a very interesting product category over time. I will not disclose what we intend to sell it for and what we expect out of it, but I know that certain competing products are in the 4,000 to €5,000 range per user. So it’s an attractive price point and it’s a very attractive product solution as well.
Jacob Marken, Analyst, Danske Bank: Okay, perfect. That’s very helpful. And on the same topic, how much of the Raikkel adjustment is related to the American market and the Bose situation and all of that?
Lars Heugard Hansen, CEO, Envisio: I think, yes, some of it, but I think it is also simply because when we made the previous estimate for Raquel, we had just acquired Raquel and it was maybe done without having the full picture. And we can see now that with the revenues we have in vehicles, we probably have more than 100% market share if those numbers were still correct. So we’ve been trying to re estimate there. And of course, some of it is related to both exiting, but some of it is also just because we have a very market leading portfolio. And it’s also important for me to say that the numbers are based on what we know today.
We have not been trying to estimate what the market would or the number of vehicles would be in ten years from now or five years from now. So it is a little bit based on where we are today.
Jacob Marken, Analyst, Danske Bank: Yes. Okay. Thank you. And then last question on cash flow. So you usually say that it’s bullish for the next quarter when you tie some inventory.
And in this quarter, you actually released some. So I’m just wondering if we should read anything into that or if you had any comment on that one? No.
Lars Heugard Hansen, CEO, Envisio: That’s just the normal fluctuations of the business where we sometimes build a little more we build more inventory if we know that orders are coming and yes, and then we release it. So yes, no, there’s no hidden agenda.
Jacob Marken, Analyst, Danske Bank: Okay, perfect. Thank you. That was all for me.
Conference Operator: The next question comes from Jaume Alberg from Redeye. Please go ahead.
Jaume Alberg, Analyst, Redeye: First question on your new addressable market estimate here and putting those that into relation to your financial targets. Did you feel that this kind of confirms your growth potential or is it even more upside to the kind of financial targets you have in terms of growth potential?
Lars Heugard Hansen, CEO, Envisio: Yes, Bill. I mean, the financial targets have been around for quite a while and that is, of course, also a task for the Board of Directors to decide whether they should be adjusted in any form or shape. But I think it is clear that historically we have at least on a revenue growth, we have exceeded the targets. And now we are just with the new numbers here showing that the market is still very attractive. And then I assume going forward that we will continue to add new product lines to our business either through acquisitions like Ultralinks or through our own internal R and D efforts.
So I think there will be ample growth opportunities even going forward.
Jaume Alberg, Analyst, Redeye: All right. And also thinking about the I mean, your profitability was very strong this quarter. Maybe this was kind of an exceptional quarter. But if you think about your kind of financial target or historical levels of profitability, do you think that with your larger size that you should have like a higher lower end of the profitability or it can still be quite variable on a corporate level?
Lars Heugard Hansen, CEO, Envisio: Hard to say, but it is of course again we are not trying to optimize like that. We are just trying to meet customers’ requirements for deliveries. And then luckily our business model is very flexible, so we are able to do these kind of things. But I think so I think there will be quarters even going forward where we will see these fluctuations because again with the inventory and with the network of manufacturing companies we have, we are able to react fairly quickly when we need to.
Jaume Alberg, Analyst, Redeye: Okay. In terms of order intake and order intake and your increased kind of product portfolio, do you see that the kind of average order is more including a large number of your different products? Or is there a trend there in terms of the orders?
Lars Heugard Hansen, CEO, Envisio: Yes, I think the fact that we have a much broader product portfolio is slowly but surely leading also to that some customers will start buying parts of the portfolio and then they will add other parts of the portfolio. So there is a trend in those customers being very Envisio focused. And we can see also now that when we sell intercom systems they often buy the entire suite of products with control units and headsets and even to some extent, vehicle headsets also to go with some of these intercom systems. So it is a great advantage for us to have a large product portfolio that is plug and play.
Yiwei Zhu, Analyst, SEB: All
Jaume Alberg, Analyst, Redeye: right. Thank you. That was all for me.
Lars Heugard Hansen, CEO, Envisio: Thank you.
Conference Operator: The next question comes from Daniel Thorson from ABG Sundal Collier. Please go ahead.
Daniel Thorson, Analyst, ABG Sundal Collier: Yes. Hi. Thank you very much, Lars. I also have a question on the UltraLink’s product portfolio here. Is that well developed and ready to go to the market so that you can mainly add sales and marketing efforts?
Or do you need to do some more product development yourself before that?
Lars Heugard Hansen, CEO, Envisio: Yes, good question, Dan. I mean, yes and no. They have already sold products, so it is in the market, is in small volume. But I would also say that we will probably give it another round in the Envisio machinery just to make sure that everything is we will also move of course manufacturing to our sites and make sure that everything from the cable quality to plastics and everything else is well tested and verified. So, you can say we are already promoting the products.
They will be at trade shows already next week. And then throughout the year here we will start making the first arrangements with customers. So you can say we are they are ready to sell but we cannot probably not deliver within this quarter. So and also simple things like changing logos and so on. But they are already developed, yes.
Daniel Thorson, Analyst, ABG Sundal Collier: Yes. I see. And then a follow-up, who are the main competitors here? I guess it’s not really the radio players, it’s not communication companies per se, which are offering
Lars Heugard Hansen, CEO, Envisio: services? There are some smaller companies out there selling data ops. And again, it is a new category that hasn’t been around for too long even though also Lexan has been developing it for a while. So it is a growing category. There’s a U.
S. Based company called Glenair who has a portfolio of these types of products. But and then some smaller ones that I don’t have the names for at this point in time.
Daniel Thorson, Analyst, ABG Sundal Collier: Okay. Will you sell the product separately to customers or will you combine it with the Invisio products?
Yiwei Zhu, Analyst, SEB: We will combine
Lars Heugard Hansen, CEO, Envisio: it. Yes, we will combine it. But it’s also it’s not it’s a very, very capable product solution. As you can imagine, there is a small computer inside that are able to handle all these different things that you connect to it. So it’s more complex to sell than selling a hearing protection headset, which is more straightforward.
So we will, of course, adapt the sales process and the sales team and the technical sales support to reflect that this is a much more advanced product.
Daniel Thorson, Analyst, ABG Sundal Collier: Yes. Okay. I see. Sounds promising. And then the second question on 2025 outlook here.
Do you expect to see strongest development in The U. S. Or Europe?
Lars Heugard Hansen, CEO, Envisio: That is hard to say. I think we are as many other companies in related to defense sector, it is still a little uncertain when we are going to see the impact of the NATO investments that everyone talks about and all the money starting to be deployed. So but if that is the case, I would see strong development in Europe. But I think also we have some very interesting activities going on in The U. S.
Quite a lot of activities. And as you’ve seen with the TIU for the Enviso Link, we have high hopes for this new category also when we get that out in the middle of the year. So fifty-fifty.
Daniel Thorson, Analyst, ABG Sundal Collier: Strong from both. That sounds promising. And then when you guide, when you have this outlook for 2025, do you exclude the radio order and deliveries in 2024? How should we think about them being included in full year 2024 numbers?
Lars Heugard Hansen, CEO, Envisio: Again, we don’t really guide to be precise, but I would say that the radio sales that was happening in 2024 is not normally part of our business model. Whether it will happen again, I don’t know. It could, but I’m not sure that it will. So it is also a little bit new for us. But at the end of the day, we are here to try to help our customers.
And if they would ask us to deliver a solution like that, we will probably do it again.
Daniel Thorson, Analyst, ABG Sundal Collier: Yes. So when you say that you expect the strong order year and sales here, we should think about the year without this type of third party orders.
Lars Heugard Hansen, CEO, Envisio: Yes. We don’t include radios as part of our regular business, no.
Daniel Thorson, Analyst, ABG Sundal Collier: Yes, clear. Thank you very much, Lars. Congratulations on a strong quarter.
Yiwei Zhu, Analyst, SEB: Thank you.
Conference Operator: The next question comes from Yiwei Zhu from SEB. Please go ahead.
Yiwei Zhu, Analyst, SEB: Hi, Lars. Congrats to the strong report. Also a few questions from my side and do one at a time. Firstly, could you please give an update on the Bose Exceed? Based on your new market estimates, I calculate that you have around 35% of market share in this segment.
But I understand you have received some replacement order from Ricoh. And I understand Ricoh is largest both is the dominator in this segment and followed by Ricoh. Any other competition coming up or any local players also have a share of this market?
Lars Heugard Hansen, CEO, Envisio: Thanks, Wei. Yes, I think to my I don’t have all details, but to my knowledge, I believe that Bose have exited the market. They have, of course, as we have said before, been required to do last time buys. So certain customers, especially in The U. S, have inventory of Bose until they start buying from us hopefully.
And I don’t and we don’t have visibility into what those inventories are. So we will have to wait and see and see how fast they run out and then hopefully start buying from us. We have not seen any, at least to my knowledge, any movements from any new entrants or competitors in this field. So we are still confident that this is a very strong area of interest for us going forward and we have a very strong position with the entire portfolio of products from Regal.
Yiwei Zhu, Analyst, SEB: Great. Could you also indicate that the replacement cycle for those high noise hearing protection has asked you for the vehicles?
Lars Heugard Hansen, CEO, Envisio: Yes, I would think it’s about six to eight years. They have a little longer lifetime because they are then parked as you can say inside the vehicle and they don’t get out and get and they are also the regular solutions are repairable to some extent. So I would say six to eight years.
Yiwei Zhu, Analyst, SEB: Okay. So you will also take quite many years for you to sort of fully take the market share from them?
Lars Heugard Hansen, CEO, Envisio: I don’t think so. Because even though again, yes, it’s hard to say. I don’t think so. I still think there are inventory in certain areas, but normally they could be consumed quite fast depending on what type of activity the customer is involved in and that’s where we don’t have any insight. So I would find it strange if we don’t start seeing orders and we’re not only talking U.
S, but also in Europe. As we have all seen, lots of new vehicles are being brought into the market in Europe. And these vehicles need some communication solutions. So I’m sure that we will see good opportunities in Europe as well.
Yiwei Zhu, Analyst, SEB: Very clear. Thanks. And my next question is on this ecosystem of the sodium communication. And now with this ArcherLynx connection box, could you maybe indicate that it’s implications of your value per soldier?
Lars Heugard Hansen, CEO, Envisio: You mean the total value on the soldier?
Yiwei Zhu, Analyst, SEB: Yes.
Lars Heugard Hansen, CEO, Envisio: You mean for our products or in general or?
Yiwei Zhu, Analyst, SEB: I mean, I remember initially it was only one system, one the headsets X5 plus
Lars Heugard Hansen, CEO, Envisio: the unit
Yiwei Zhu, Analyst, SEB: and the cables was 10,000. And I know that has been sort of expanded a few times over the recent years. But now with the ArcherLinks, what would be the new value per soldier?
Lars Heugard Hansen, CEO, Envisio: Yes. It, of course, depends a little bit on how many things you would need to connect to because the cables are also expensive. But if and again without indicating our sales price, I would say it’s not unrealistic that the data hub could be around €4,000 and then you have a hearing protection system let’s say around 15,000 to 2,000 depending on how many cables and so that you put on. So, yes.
Yiwei Zhu, Analyst, SEB: Great. Very clear. And then could you also maybe talk about the future M and A target? Any other product category would be interesting to you?
Lars Heugard Hansen, CEO, Envisio: No, absolutely. I mean, we are looking at both what the soldier is using, but also again what is relevant to the vehicles and also any expansion related to our intercom and the wireless part and so on. So there’s many, many things we could be looking at. And as you can see, we have a strong financial position. So we are able to not only act fast, but also do significant acquisitions if the right opportunities turn up.
So we are of course interested in that, but we are also a little bit cautious and we want to make sure that whatever we acquire there should be a good not only product fit, but also a cultural fit with the existing Invisio company.
Yiwei Zhu, Analyst, SEB: Great. Thanks. I’ll ask my last question and I’ll jump back to the queue. Regarding the market expansion, 80% sounds very bullish. And could you confirm that you are also seeing now the upside to the current 20% annual growth target?
I’m talking about an organic basis.
Lars Heugard Hansen, CEO, Envisio: I mean, as you have seen in 2024, we can grow quite significantly. And so but again, we are always very conservative and cautious in not giving any guidance because it is a volatile market and sometimes things takes a
Daniel Thorson, Analyst, ABG Sundal Collier: little
Lars Heugard Hansen, CEO, Envisio: longer. And back again to the fact that we don’t really know when the money from the many defense budgets will start being deployed. But historically, we have been at I think the last five years the growth in average has been 28%. So that’s above our target. So but I think with the many opportunities that we have and the continued addition of products and R and D that we spend a lot of money on, we are definitely in a good position for continued growth.
Yiwei Zhu, Analyst, SEB: Great. Thank you. I’ll jump back to the queue.
Lars Heugard Hansen, CEO, Envisio: You’re welcome.
Conference Operator: The next question comes from Tom Ginchard from Pareto. Please go ahead.
Tom Ginchard, Analyst, Pareto: Thank you. I was just wondering about the step up in D and A here from the larger development projects being finalized. Can we read anything into that in terms of sales conversion here? Should we expect anything already in 2025 or is that for 2020?
Lars Heugard Hansen, CEO, Envisio: Yes, I mean, not it’s more sort of a timing thing that sometimes we have several larger things running in parallel and then they end at the same time. We have several things ending like for instance the link product, the wireless intercom link that we have been developing on for quite some time. And as I said, we plan to start shipping products in the second quarter or the end of the second quarter or somewhere in the middle of the year. And once we start shipping, then of course, we need to end the project and start depreciations and so on. So that’s so we have things that are in the pipeline that will hit the market in 2025.
That’s what you can read into it at least that we have products coming.
Tom Ginchard, Analyst, Pareto: Perfect. Thanks. And then just a follow-up on R and D spend here as a percentage of sales. Can we expect that to go up a bit for 25% especially given UltraLynx and continued investments that you mentioned?
Lars Heugard Hansen, CEO, Envisio: A little bit. I think we will we also when it comes to Alta Links, we have the team that we have now and we will continue to expand from that to make sure we can support the market introduction in a good way and support the sales of that. But also in our normal R and D group, so to speak, we will continue to expand in line with how our revenues are also growing. So I think there’s still a lot of things in the pipeline that we would like to develop and get into the market. So we will continue to have a high speed on the R and D side as well.
Tom Ginchard, Analyst, Pareto: Perfect. Thanks. And just on the order book split, can you give any indications on how much is Invisio and Raycom or the new X7?
Lars Heugard Hansen, CEO, Envisio: We don’t do that anymore because also going forward, the branding could be a little bit random. It could be so that actually something that is developed at Invisio will go into a vehicle or something that we develop in The UK would go into the field. So, for us the branding is a little bit random. It’s not separated between Rakel and Invitio in that sense. So we don’t split that up.
The only thing we will say is that, yes, the majority it’s not for long lead deliveries. Majority of the pipeline is for delivery within six months, six to nine months.
Tom Ginchard, Analyst, Pareto: All right, perfect. Thanks.
Lars Heugard Hansen, CEO, Envisio: Thanks, Tom.
Conference Operator: The next question comes from Jacob Marken from Danske Bank.
Jacob Marken, Analyst, Danske Bank: Sorry to disturb again. Just a very short question to follow-up on the product releases. I’m just wondering, should we think that you are releasing new products that we don’t know about? Or are you talking link and those that we already know?
Lars Heugard Hansen, CEO, Envisio: I would expect. I mean with the kind of R and D rate we have and so on, I would expect us to release things in 2025 that you don’t know about.
Yiwei Zhu, Analyst, SEB: Okay. Perfect. Thank you.
Lars Heugard Hansen, CEO, Envisio: You’re welcome.
Conference Operator: The next question comes from Yiwei Ju from SEB. Please go ahead.
Yiwei Zhu, Analyst, SEB: Hi, Lars. I have one additional question here regarding our drilling. I’m a bit surprised that they only paid only $3,500,000 and the market potential annual market potential is $1,500,000,000 What is the reason for the for the company to sell us? I mean, I understand this is a pretty big U. K.
Company.
Lars Heugard Hansen, CEO, Envisio: I would like to say that we are very good at making deals, but you will probably not believe me. But no. So I think UltraLynx is a fantastic technology product and so on. But a little bit like Raquel, it was part of a very large and very professional U. K.
Company also PCS where it didn’t fit in with the products that they have. They are doing a lot of things around aircrafts and so on. So this little product line that they started maybe ten years ago has developed into an area that they did not support. Ultra does not have a setup, a sales or anything that support this. So for them, it was very hard to take it to market.
For them it was difficult to make a business out of it. Whereas for Invisio, as you know, we have all the other products it fits perfect in with our setup and our product line and we of course have to invest something into it with a few more people and also laser to next generation products and so on. But for us, it has a high value and we can make something out of it which I think would have been difficult for Alta PCS in the same way because they are focused on something else.
Yiwei Zhu, Analyst, SEB: Okay, makes sense. Thanks a lot. By the way, I do believe you are a very good deal maker, given you have made money back from a negotiation within two years. I remember that. All right.
Thank you. Thanks.
Conference Operator: There are no more questions at this time. So I hand the conference back to CEO Lars Heugard Hansen for any closing comments.
Lars Heugard Hansen, CEO, Envisio: Yes. Thank you very much everyone for calling in and for your questions. Always great to talk to you and look forward to speaking in after Q1. And again, if you have time, stay on for the short movie after this. Thank you.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.