contentSlug

type

ContentSlug_ContentQuery

slug

ContentPageContentQuery

content

trendingContent

query ContentSlug_ContentQuery(
  $contentSlug: String!
  $type: [ContentType!]
) {
  ...ContentPageContentQuery_13QmVO
}

fragment CompanyDetails_Content on Content {
  __isContent: __typename
  companies {
    name
    description
    pageUrl
    id
  }
}

fragment ContentBasicInfo on Content {
  __isContent: __typename
  id
  type
  title
  lang
  companies {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  tags {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  ...PublishingDetails
  ...Reactions
}

fragment ContentMetadata on Content {
  __isContent: __typename
  type
  title
  lang
  pageUrl
  alternatePageUrls: translations {
    __typename
    pageUrl
    lang
  }
  imgUrl
  description
  ... on Video {
    liveTime
    videoUrl
  }
  ... on Webcast {
    liveTime
    videoUrl
  }
}

fragment ContentPageContentQuery_13QmVO on Query {
  content(slug: $contentSlug, type: $type) {
    __typename
    id
    type
    title
    isPremium
    lang
    htmlBody
    summary
    companies {
      forum {
        latestPosts {
          ...ForumPosts
        }
      }
      name
      id
      viewerIsFollowing
      pageUrl
      defaultInstrument {
        isin
        id
        marketOpen
        marketClose
        marketplace {
          region
        }
        returns {
          total
        }
      }
    }
    tags {
      viewerIsFollowing
      id
      name
      pageUrl
    }
    createdAt
    ... on Video {
      liveTime
    }
    ... on Webcast {
      liveTime
    }
    slug
    ... on CompanyReport {
      reportUrl
    }
    ... on ThirdPartyCompanyReport {
      reportUrl
    }
    ... on StockExchangeRelease {
      reportUrl
    }
    ...ContentBasicInfo
    ...ContentMetadata
    ...PriceAndRecommendation_Content
    ...CompanyDetails_Content
    ...ReportLink_Content
    ...KeyFigures_Content
  }
  ...TrendingContent_1jQ2Cn
}

fragment ForumPosts on ForumPost {
  text
  likesCount
  url
  author
  postedAt
  authorImgUrl
}

fragment KeyFigures_Content on Content {
  __isContent: __typename
  companies {
    defaultInstrument {
      estimateData {
        modelType
        reportingCurrency
      }
      snapshot {
        transaction {
          date
          actualized {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
          estimates {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
        }
      }
      id
    }
    id
  }
}

fragment PriceAndRecommendation_Content on Content {
  __isContent: __typename
  createdAt
  companies {
    name
    pageUrl
    defaultInstrument {
      priceData {
        tradeCurrency
      }
      snapshot {
        priceData {
          date
          lastPrice
          tradeCurrency
        }
        transaction {
          date
          recommendation
          targetPrice
        }
        prevTransaction {
          recommendation
        }
      }
      id
    }
    id
  }
}

fragment PublishingDetails on Content {
  __isContent: __typename
  createdAt
  publishers {
    name
    imgUrl
  }
  authors {
    __typename
    id
    name
    slug
    imgUrl
    jobTitle
  }
  ... on Video {
    liveTime
  }
  ... on Webcast {
    liveTime
  }
}

fragment Reactions on Content {
  __isContent: __typename
  id
  reactionGroups {
    reactionType
    reactionsCount
    viewerReacted
  }
}

fragment ReportLink_Content on Content {
  __isContent: __typename
  type
  isPremium
  ... on CompanyReport {
    reportUrl
  }
  ... on ThirdPartyCompanyReport {
    reportUrl
  }
  ... on StockExchangeRelease {
    reportUrl
  }
}

fragment TrendingContent_1jQ2Cn on Query {
  trendingContent(type: ARTICLE) {
    __typename
    id
    title
    lang
    pageUrl
    createdAt
    type
    imgUrl
    companies {
      squareLogoUrl
      name
      id
    }
    authors {
      __typename
      imgUrl
      id
    }
    publishers {
      imgUrl
    }
  }
}


dnb-carnegie-access-sensys-gatso-group-margin-expansion-and-impressive-free-cash-flow-q4-review

__typename

title

isPremium

lang

htmlBody

summary

companies

createdAt

publishers

authors

reactionGroups

pageUrl

translations

imgUrl

description

Sensys Gatso Group is an international technology company focused on the development and manufacturing of traffic safety and surveillance systems. The company's products are aimed at authorities and companies that need advanced traffic surveillance and security solutions. Sensys Gatso Group was founded in 1982 and is headquartered in Jönköping, Sweden.

Yes, and that is certainly one reason for the recent gloom. I tried to mention the same topic in the opening post, but I mixed up Ohio and Utah (thanks to the Lauri Markkanen documentary I was watching out of the corner of my eye).  For example, in Utah (correction: Ohio), systems already sold are waiting for deployment permits after the administration changed approval practices. Thus, the time gap between sales and cash flow can depend on factors other than the company’s own performance.  Political risk cannot be ignored, but based on RedEye’s old report, the general atmosphere seems to favor camera enforcement:  There has recently been a trend shift in the USA, where traffic fatalities are now increasing. This has caused many states to favor speed cameras more positively. Two major additions from the last months are Florida and California - states that substantially increase the market potential for Sensys Gatso.  The situation is new for the authorities as well, and speed bumps are even likely. Still, the situation is the same for all players, meaning the duration of deployment approvals doesn’t just affect SG’s equipment and services. Different levels of administration (state vs. county vs. city) come up with their own bureaucratic hurdles, just like here. RedEye’s report is the usual bullish nonsense regarding target prices. Currently, we are at roughly the bear case (65 SEK) valuation. For this year, SG changed its provider of commissioned research. RedEye/ 17.11.2023                  redeye.se              Sensys Gatso: Underestimated potential in the USA    Redeye believes Sensys Gatso has just entered a very interesting period with increasing momentum in both sales and earnings growth. Further, Sensys Gatso reiterated its ambitious 2025 targets. With o                             In addition, a more detailed article on the situation in Iowa, with party politics in the background:  Some Republican lawmakers, as well as the ACLU of Iowa, have been trying to ban automated traffic enforcement for years. Some opponents of traffic cameras have accused cities of abusing automated traffic enforcement to boost local budgets.                    Iowa Public Radio – 1 Oct 24              Most of Iowa’s fixed traffic cameras must be turned off as DOT implements new...    Most of Iowa’s traffic cameras that issue speeding tickets in permanent locations must be turned off after the Iowa Department of Transportation denied the vast majority of cities’ requests to operate them.

Great opening! Interesting company with a strong presence also in Australia (Tasmania) and the Middle East (Saudi Arabia). The TRaaS business recently faced setbacks in the state of Iowa, where a legislative change put SGG’s speed cameras under a “use ban”, link below:                  sensysgatso.com              Implementation of new legislation in Iowa, USA      | Sensys Gatso

Name: Sensys Gatso  Country: Sweden, listed on the Stockholm Stock Exchange since 2003  Industry: traffic enforcement solutions  Revenue: 624 MSEK  Market Cap: 700 MSEK  P/B: 1.11  P/S: 1.05  IR: https://www.sensysgatso.com/investors History: Sensys Gatso (SG) is a company that has been operating in the traffic enforcement solutions field for over 40 years. The company has grown organically and through acquisitions, the most significant being the merger with a Dutch company named Gatso about 10 years ago. Today, Sensys Gatso is a global player whose business covers several countries in Europe, North America, Asia, and Africa. Industry and products: Sensys Gatso specializes in providing traffic enforcement solutions that help improve road safety and efficiency. The product range can be divided as follows:  Traffic cameras: Speed enforcement, traffic control, and intersection monitoring (red lights, etc.) Traffic light control systems: Intelligent systems that optimize traffic flow Traffic information systems: Real-time information on traffic Services: Installation, maintenance, and consulting  Market Situation: SG is one of the largest players in the industry and the largest of those focused solely on this sector. The total market is growing, and for a European company, SG is strong in the US market. One reason for this is TrAAS (traffic enforcement as a service), where a municipality or city outsources traffic enforcement to the company for a fixed term. For the public sector, this solution is asset-light and lowers the barrier to procurement. In Europe, this model is not popular, at least not yet, which is why systems are still sold in the domestic market and operations remain with the buyer. The image below shows (copyright: Kepler Cheuvreux, like the other images) the company’s internationalization in just under 10 years. At the same time, we see the relative shrinkage of the European domestic market’s share from 61% → 22%.  The company’s own sales mix clearly reflects the fluctuation between system sales and traffic enforcement services (TRaaS). TRaaS is growing steadily, but system sales vary according to the deals secured and their implementation schedules. As in so many other sectors, the company is trying to smooth out seasonally fluctuating revenue streams from system sales by “servitizing” its operations and raising its margin percentage through TRaaS and aftermarket sales. In terms of orders, they are (mostly) at the mercy of public sector procurement processes and political trends. For example, in Ohio, systems already sold are waiting for deployment permits after the administration changed approval practices. Thus, the temporal gap between sales and cash flow can depend on things other than the company’s own performance. The company has a goal to reach over a billion kronor in sales by 2025, with TRaaS accounting for over 60%. Since significant deals in Sweden and the Netherlands (totaling 1,250 MSEK, spread over several years) will start generating full revenue streams from next year onwards, the jump from the 2023 revenue of 624 MSEK is not impossible.  The Bottom Line and Cash flow In system sales, the EBITDA margin has been between 10-15% in recent years, and in services, between 17-22%. Significant tender wins and the growth of the TRaaS model create front-loaded costs, and the sales mix affects the company’s annual margins. In next year’s target, the EBITDA level should be over 15%.  By the end of 2025, our ambition is to exceed SEK 1 billion in net sales, with more than SEK 600 million from TRaaS, while increasing our EBITDA margin to over 15%  Due to growth and front-loaded costs (tenders, TRaaS), the company cannot finance growth with cash flow alone, so this autumn a 30 MEUR bond loan was taken (euribor + 4.75) to finance growth and roll over previous debts. The company is not particularly indebted. Nevertheless, one must keep an eye on large project receivables turning into cash so that growth doesn’t stall due to running out of “ammunition.” An advantage of the public sector is that the sensitivity to bankruptcy is lower than usual. The image below clearly shows how annual Capex expenditures vary significantly. For the same reason, free cash flow fluctuates, although in the future, TRaaS income should smooth out the need for debt to cover project financing costs.  Risks and Threats Autonomous traffic will eventually dry up one of the revenue streams, but realistically speaking, it will only bite into revenue from the late 2030s onwards, if even then. In any case, it takes time for the vehicle fleet to update. In my opinion, this known risk is perceived as larger than it actually is. Regarding the United States, a bigger risk is the political situation—I assume a Democratic victory would be a better option for the company, although the state-specific situation likely matters more. The competitive situation could change with AI and bring new players alongside traditional operators. However, one cannot succeed in this industry without a moderate capital requirement and credibility gained through a proven track record, so rapid disruptions are, in my opinion, unlikely. The field is naturally competitive, so SG’s position and earnings level are not set in stone, just like with any other firm. Why buy this too? Why would now be a good time to buy? I’m not a real estate agent and therefore don’t advise buying all the time, but with the stock price at five-year lows (61.4 SEK), not much value is being placed on the company’s growth story and its turn towards profitability. A long downward slide is, of course, not a great reason to buy in itself.  I don’t know what negative factors the market can or cannot price in, but with basic performance and without major political upheavals, 2025 should bring growing revenue and positive free cash flow as large project deliveries are recognized as revenue. Exchange rate fluctuations add their own flavor to the game (especially the USD/SEK pair). The gap to the Kepler Cheuvreux (buy) analysis target price of 95.0 SEK has widened significantly. Penser/Carnegie determines the DCF value to be 84 SEK and the fair value range to be 80-100 SEK. (Everyone can assign whatever value they wish to a paid analysis.) Based on Kepler Cheuvreux’s estimates, the P/E would be around 11 with 2025 figures, with growth still around 20%. Based on the company’s comments, the largest growth investments are now behind them, so the benefits of TRaaS should be increasingly visible toward the end of the decade. You won’t get dividends from this machine for several years yet, but instead of dividends, I’d rather enjoy the growth of the TRaaS business. (Hardcore dividend fans, put away the tar and feathers, it itches  ) Reasons to sell the stock would be stalling growth and loosening cost discipline. Disclaimer: If you somehow managed to trudge this far (or are just a masochist), thank you for your attention. This is not (either) a purchase recommendation, and the responsibility lies with the listener. In the writing of this, nothing was harmed except the Finnish language in the form of occasional anglicisms, limping grammar, and accidental typos. –  Paid analyses: It’s worth looking at these (especially the Kepler presentation) for numerical data on market size, etc., and a more detailed nuanced view. In this post, I focused on the big picture and the broad brushstrokes. Kepler Cheuvreux: https://sponsored-research.keplercheuvreux.com/be/kepler-file/document?file=EQ360P_1069137.pdf&id=8c7ae4d2-add6-11ed-bd0b-0050568f8cb8  Penser / Carnegie: https://www.carnegie.se/pdf/commissioned_research/Y3JpZF84MDE4XzE0MTVfMQ==

Sensys Gatso Group

DNB Carnegie has published a new commissioned research report on Sensys Gatso Group.To access the full report and subscribe to future updates, visit https://access.dnbcarnegie.com/companies/...

<div class="mfn-preamble"><p><strong>DNB Carnegie has published a new commissioned research report on Sensys Gatso Group.</strong></p></div><div class="mfn-body"><p>To access the full report and subscribe to future updates, visit <a rel="noopener" href="https://access.dnbcarnegie.com/companies/1415">https://access.dnbcarnegie.com/companies/1415</a></p></div><div class="mfn-footer mfn-6fcd5977fc3f"><p><strong class="mfn-heading-1">Information</strong><br>This is a press release from DNB Carnegie. For information about DNB Carnegie commissioned research, see <a rel="noopener" href="https://access.dnbcarnegie.com/">https://access.dnbcarnegie.com/</a>, or contact our commissioned research team at <a rel="noopener" href="mailto:cr@carnegie.se">cr@carnegie.se</a>.</p></div><div class="mfn-footer mfn-about mfn-f597257b14ff"><p><strong class="mfn-heading-1">About Us</strong><br>DNB Carnegie is the leading and independent Nordic investment and private bank. Our operations within Corporate Finance, Securities and Research, Private Banking and Wealth Management are among the market leaders within their respective sectors. Together, they build an unbeatable combination of integrated knowledge, guiding our clients towards better business. DNB Carnegie operates in six countries and has more than 800 employees.</p></div>