Vow

Country:
Sector:
Market cap (m):
Norway
Capital Goods
NOK 2,153.80
Bloomberg:
Reuters:
Website:
VOW NO
VOW.OL
Share price (close):
NOK 18.85

Latest Reports

26 AUG 2022
Commissioned Research: Record-high revenue, profit and backlog
Vow reported strong headline figures across the board for H1. Cruise activity is picking up speed, while Landbased continues its strong performance, beating our expectations and growing more than 4x y/y. We consider the report yet another step in the right direction for the company, which currently trades at a large discount to cleantech peers – despite its positive EBITDA contributions across the board. We keep our SOTP-based fair value range of NOK 35-39 unchanged, arguing the company is significantly undervalued at current levels. Marketing material commissioned by Vow.

25 AUG 2022
Commissioned Research: Flash Comment: All-time-high revenue, profits and backlog in H1
Vow published its H1 report this morning, with strong headline figures. Revenues came in highest ever, along with profits and backlog. Revenue came in at NOK 400m, 7% above our estimate and 4% above consensus. Adjusted EBITDA reached NOK 53m, 7% above us and consensus. We note that the main beat was in the Landbased segment which was now the highest revenue generator for the first time for Vow, also delivering margins well above our estimates (4 pp). Recurring net income came in at NOK 17m (vs NDA estimate of NOK 28m and consensus of NOK 25m), mainly due to a large negative item in net financials and slightly higher-than-expected depreciation.

23 AUG 2022
Commissioned Research: Operational momentum set to continue
We expect that Q2 was yet another strong quarter for Vow, which reports its H1 results on 25 August. Cruise activity is bouncing back, while the order intake for the Landbased segment is booming. Combining this with a solid order backlog that provides revenue visibility well into 2025/26, we argue that Vow is an intriguing cleantech play to have on the radar. We make minor estimate changes ahead of the report and maintain our fair value range of NOK 35-39, implying about 50-70% upside to current levels. Marketing material commissioned by Vow.

16 MAY 2022
Commissioned Research: Flash Comment: Largest single Landbased contract in Vow’s history
This morning, Vow announced that it has entered into an agreement valued up to USD 27m – the largest single Landbased contract signed by Vow to date. The agreement is with an undisclosed North American renewable energy company, with Vow to deliver a complete biocarbon production system (this includes four BioGreen lines). With regards to timing, engineering starts immediately with timing of subsequent stages in the project is pending government permits and final design.

6 MAY 2022
Commissioned Research: Flash comment: Q1 operational update: All-time-high results, growth in all ends of the business
Vow published an operational update for Q1 yesterday (the company reports semi-annually). We have seen an overall positive development across all the segments, with clear signs of increased activity. We argue that the trading update was in line with the development we expected in the short-term. However, we note several positive datapoints, thus providing further confidence around our full-year estimates. Revenue in Q1 doubled y/y, reaching NOK 182.5m, in addition to an EBITDA of NOK 23.6 (12.9% margin). Lastly, contract newsflow has been strong for the past months, and we see strong demand across all parts of Vow’s business. The order backlog (incl. options) is at high levels, reaching NOK 2.1bn in the quarter (up 31% y/y). The company reiterated its full-year revenue guidance, and we expect limited consensus estimate revisions following the update. We still view Vow as attractive at current levels, trading at 2024E EV/EBIT of 10.5x and P/E of 14.0x and still see between ~55-70% upside to current share price on our fair value range of NOK 35-39 per share.

24 FEB 2022
Commissioned Research: Long-term story remains attractive
Vow published its H2 update on 23 February with numbers slightly below our expectations. However, the report contained several positive datapoints validating the equity story. The order backlog remains high, providing clear visibility on 2022 revenue. The Landbased segment delivered its first ever positive EBITDA and we have seen an increasing number of cruise ships in service from Q3 and Q4 2021. We still believe in Vow's green credentials and flag that the Landbased segment will become a significant growth engine. Following the report, we make only minor revisions to our 2022E-2024E estimates and reiterate our SOTP-based fair value range of NOK 35-39 per share. Marketing material commissioned by Vow.

28 OCT 2021
Commissioned Research: Transitory softness in Q3
Vow published its Q3 trading update yesterday (27 October), with overall numbers falling short of street expectations. Cruise activity has started to pick up again after the COVID-19 slump in H1, but longer lead times than expected are impacting Vow's earnings. Group revenue has remained stable y/y, albeit with deflated margins and EBITDA down 25% over the same period. The soft numbers in the quarter were mainly driven by the phasing of project delivery schedules; we expect a catch-up effect going into 2022 – but highlight that visibility is low on earnings for the rest of the year. We therefore take a more cautious approach on the recovery pace and lower our estimates. We still see scope for a sequential improvement in the underlying market going forward. Following the report, we revise our fair value range to NOK 35-39 (38-41) per share based on SOTP valuation. Marketing material commissioned by Vow.

27 OCT 2021
Commissioned Research: Flash comment: Vow – Soft Q2 results
Q3 trading update released this morning (the company reports semi-annually, no quarterly consensus available). The numbers were on the soft side. On a group basis, revenue came in at NOK 97.8m, down from NOK 97.9m in Q3 2020, while EBITDA reached NOK 8.1m (8.3% margin), down from NOK 10.7m (8.3%) in Q3 2020. Restrictions relating to the COVID-19 pandemic were gradually lifted during the quarter which resulted in increased activity in the cruise industry and growth in the aftersales business. During the quarter, the company secured several milestone contracts, resulting in an all-time high current order backlog of NOK 2.1 billion (incl. options). Overall, however, the results were below our expectations, but we argue that the long-term outlook still remains attractive for the company.

31 AUG 2021
Commissioned Research: An attractive growth story ahead
The long-term equity story for Vow remains attractive, with significant growth potential within Landbased backed by increased activity within Cruise. The company offers technology that creates a circular economy for a range of industry verticals – and it has secured contracts and partnerships with key industrial pioneers such as ArcelorMittal, Repsol and Wakefield. Increased cruise activity following the reopening of societies should boost revenue and margins for its legacy business. Following the H1 2021 report, we cut our estimates for 2021-23. The negative estimate revisions are also partly due to the spin-off of Vow Green Metals. After the spin-off of Vow Green Metals, we reduce our fair value estimate range to NOK 38-41 (49-60) per share, based on our SOTP valuation model. Marketing material commissioned by Vow.

29 APR 2021
Commissioned Research: Flash comment: Q1 trading update
Vow published its Q1 2021 trading update today (it reports semi-annually). The results were soft due to an inactive cruise fleet, which continues to have a negative impact on Aftersales, in addition to negative margins within the Landbased operation as the company prepares its business to cope with future demand. Revenues came in at NOK 92.8m, down 20% y/y, and EBITDA at NOK 10.2m, down 27.1% y/y. Despite this, Cruise Projects delivered a record-high EBITDA margin of 26.3% compared to last year’s 24.3%. In addition, its order backlog was down marginally y/y, as cruise owners are looking beyond the current lockdowns caused by the pandemic and preparing for the future. We expect Cruise Projects to continue to perform well, as the order backlog secures revenues until 2024-25, and we expect a rebound in Aftersales towards the summer as cruise owners prepare to activate their fleets. We would highlight the significant potential within Landbased activities, as its partnerships with Repsol, ArcelorMittal and Elkem could result in system deliveries beyond today’s orders within cruise. Note that Vow Green Metals, to be listed within months (and which will build/run/operate the plant at Follum), has with its first production phase of 10,000 tonnes of biocarbon an order backlog potential that could contribute NOK 250m in revenues for 2021 and 2022 for Vow.

Equity analysts

Key persons

CEO: Henrik Badin

CFO: Erik Magelssen

Chairman: Narve Reiten

Numbers
Export to Excel
Nordea
NOKm
2018
2019
2020
2021
2022E
2023E
2024E
Total revenues
329.6
380.7
459.8
454.0
879.3
1,102.3
1,260.4
Ebitda (adj.)
39.20
45.78
46.76
43.50
133.18
199.02
251.87
Ebitda - margin
11.9%
12.0%
10.2%
9.6%
15.1%
18.1%
20.0%
EBIT (adj.)
35.7
34.9
24.9
19.3
109.5
178.5
231.0
EBIT (adj.) margin
10.8%
9.2%
5.4%
4.3%
12.5%
16.2%
18.3%
PTP (adj.)
33.5
10.1
36.3
341.9
68.2
165.7
222.2
Net profit from cont oper (adj)
29.29
14.90
13.56
-1.02
55.92
129.23
173.35
Shareholders´ Equity
93.4
228.8
319.9
524.9
623.7
767.2
917.1
Net interest bearing debt
-4.0
132.6
138.3
166.3
145.3
75.4
4.8
Net gearing
-4.3%
57.7%
43.1%
31.6%
23.1%
9.6%
0.5%
Net debt/EBITDA
-0.1
5.0
3.6
4.9
1.1
0.4
0.0
Free cash flow to equity
19.8
-102.7
-73.0
-240.6
16.3
58.5
69.1
Diluted number of shares in issue, year-end (m)
96.4
99.9
108.9
114.3
114.3
114.3
114.3
Nordea Markets estimates published on Aug 26, 2022
Source: Company data, Nordea estimates
Per share data and multiples
Export to Excel
Nordea
NOK and %
2018
2019
2020
2021
2022E
2023E
2024E
EPS (adj.)
0.30
0.15
0.12
-0.01
0.49
1.13
1.52
EPS (adj.) growth
154.6%
-50.9%
-16.5%
-107.2%
5,586.8%
131.1%
34.1%
DPS
0.20
0.00
0.00
0.00
0.00
0.00
0.00
BVPS
1.0
2.3
2.9
4.6
5.5
6.7
8.0
P/E (adj.)
15.1
n.a.
n.a.
n.a.
38.5
16.7
12.4
EV/Sales
1.33
8.22
9.29
6.27
2.62
2.04
1.72
EV/EBITDA (adj.)
11.18
68.39
91.36
65.47
17.29
11.27
8.63
EV/EBIT (adj.)
12.26
89.76
171.70
147.56
21.04
12.57
9.41
P/BV
4.74
13.10
12.92
5.11
3.45
2.81
2.35
Dividend yield
4.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
FCF Yield bef A&D, lease adj
4.5%
-0.6%
-1.8%
-9.0%
1.9%
2.7%
3.2%
RoE
35.2%
-9.1%
9.8%
78.9%
9.3%
18.6%
20.6%
ROIC
36.5%
13.5%
5.4%
3.0%
13.6%
19.7%
23.0%
Nordea Markets estimates published on Aug 26, 2022
Source: Company data, Nordea estimates

Source: Refinitiv