Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Industrials
AAC Clyde Space (AAC) remains an interesting avenue into the fast-growing low Earth orbital space sector. A strong Q324 performance has seen the supplier-related issues that affected Q2 largely reversed, albeit the supply chain remains stretched. The order book is strong, which, with two satellite launches due in Q4, offers the potential to build momentum into 2025.
AAC Clyde Space |
Back on track |
Q324 results |
Aerospace and defence |
11 November 2024 |
Share price performance
Business description
Next events
Analyst
AAC Clyde Space is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
AAC Clyde Space (AAC) remains an interesting avenue into the fast-growing low Earth orbital space sector. A strong Q324 performance has seen the supplier-related issues that affected Q2 largely reversed, albeit the supply chain remains stretched. The order book is strong, which, with two satellite launches due in Q4, offers the potential to build momentum into 2025.
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
196.7 |
(23.2) |
(5.6) |
0.0 |
N/A |
N/A |
12/23 |
276.6 |
(18.4) |
(4.2) |
0.0 |
N/A |
N/A |
12/24e |
375.0 |
(8.1) |
(1.4) |
0.0 |
N/A |
N/A |
12/25e |
600.0 |
44.5 |
7.6 |
0.0 |
6.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q3 performance: A strong pick-up
Q324 reported a positive turnaround from the issues, largely external supplier orientated, that affected Q2. Net sales were up 58% on Q2 and 51% on the previous year. Gross margin was strong at 72% and, with controlled personnel and SG&A costs, EBITDA margins rebounded to 20.6% and operating margin to 8.0%. Cash conversion was 133% of operating profit after working capital outflow of SEK6m to support the top-line expansion. After investing SEK11.3m and financing costs of SEK9.3m the group ended the quarter with gross cash of SEK25.4m and available cash of SEK81.5m, including an unused banking facility. The order book at the period end stood at SEK641m, marginally down from the record SEK660m at the end of June.
Strategic momentum continues
The flow of new orders remains positive. The largest in the quarter being a SEK11.6m order for four Starbuck power systems and related services. There were two major launches in Q3: a further maritime services satellite to expand space data as a service (SDaaS) capabilities and an Arctic Weather Satellite equipped with multiple AAC products including microwave sounder instruments, a Starbuck power system and Sirius computer. Q4 is set to provide further milestones including the upcoming launch of two further satellites.
Valuation: Unchanged at SEK278/share
Our discounted cash flow valuation of SEK278/share remains unchanged (see our August note for details). This suggest significant upside but clearly there are risks and uncertainties for a company such as AAC at its current stage of development operating in a fast-moving and frontier sector such as space. Contract wins highlight that AAC is well positioned while the SDaaS business provides the opportunity to develop lucrative recurring revenue streams.
Q324 results
Operational highlights
Key for the quarterly financial performance was recovering from the supplier delays and other issues that affected Q2, which, as highlighted below in the financial performance table, was successfully achieved. Order intake remained positive, as outlined later, with an order book at the period end of SEK641m, less than 3% below the record level reported at the half year.
Highlights in the quarter included:
■
The launch of another maritime services satellite (Sedna-1) to enhance the range of services that can be supplied to maritime customers. The constellation now contains 9 satellites with another 1 waiting launch and 2 in manufacturing.
■
The launch of an Arctic Weather Satellite equipped with multiple AAC products including microwave sounder instruments, a Starbuck power system and Sirius computer. This is the first satellite in a new array offering future potential opportunities.
■
The acquisition of Spacemetric was completed, which will deepen the capabilities of AAC’s data business, expanding the SDaaS division.
■
A licence with a US company for the manufacture of power and data handling systems, leading to a one-off payment of US$2.0m, replacing an existing royalty agreement.
The final quarter of the year is expected to see significant operational milestones including two satellite launches in November.
Financials
Q3 reported strong overall performance, recovering from Q2 which was affected primarily by external supplier issues. This is highlighted by the strong core sales performance, up 58% on Q2 and 51% on the previous year. Gross margin remained strong at 75% and with controlled additional personnel (period end 196 vs 185) along with controlled SG&A costs delivered a strong EBITDA margin of 18.4%, ahead of the full year target of 5–10%, leading to a positive operating margin of 7.2%.
Exhibit 1: Summary performance (SEKm)
Q323 |
Q324 |
Change |
|
Net sales |
56.131 |
84.811 |
51% |
Other income |
5.677 |
5.956 |
5% |
Own work capitalised |
6.395 |
4.240 |
-34% |
Total |
68.204 |
95.007 |
39% |
Raw materials & subcontractors |
(8.974) |
(23.672) |
164% |
Personnel costs |
(38.937) |
(41.131) |
6% |
Other external expenses |
(10.331) |
(9.612) |
-7% |
Other operating expenses |
(3.251) |
(3.112) |
-4% |
EBITDA |
6.711 |
17.480 |
160% |
Depreciation & amortisation |
(7.669) |
(10.682) |
39% |
Underlying EBIT |
(0.958) |
6.798 |
N/A |
Financing income/(costs) |
(1.471) |
0.852 |
N/A |
Underlying PBT |
(2.429) |
7.650 |
N/A |
EPS (SEK) |
(0.48) |
1.34 |
N/A |
Gross margin |
84.0% |
72.1% |
-1192bps |
EBITDA margin |
12.0% |
20.6% |
+865bps |
EBIT margin |
-1.7% |
8.0% |
+972bps |
Source: AAC Clyde, Edison Investment Research
Cash performance benefited from the improved operating performance. Despite the working capital required to support the top line, cash flow from operations was strong with conversion from EBIT of 133%. Investing and financing outflows led to a net cash outflow in the quarter, leaving the group with gross cash of SEK25.4m at the period end.
Exhibit 2: Cash flow (SEKm)
Q323 |
Q324 |
Change |
|
Cash generated from operations |
7.297 |
15.298 |
110% |
Changes in working capital |
(9.534) |
(5.968) |
|
Cash flow from operations |
(2.237) |
9.330 |
|
Investing activities |
(12.581) |
(11.315) |
|
Financing activities |
24.618 |
(9.306) |
|
Net cash flow |
9.800 |
(11.291) |
|
Cash and equivalents at end of period |
22.677 |
25.427 |
12% |
Source: AAC Clyde, Edison Investment Research
Divisional performance
Exhibit 3: Quarterly divisional breakdown
Q323 |
Q324 |
Change |
|
Sales by division |
|||
AAC Data & Services |
4.809 |
6.095 |
27% |
AAC Missions |
7.740 |
23.339 |
202% |
AAC Products |
48.118 |
63.586 |
32% |
Eliminations |
-4.536 |
-8.209 |
81% |
Total core sales |
56.131 |
84.811 |
51% |
EBITDA by division |
|||
AAC Data & Services |
3.275 |
0.878 |
-73% |
AAC Missions |
-8.900 |
-0.055 |
-99% |
AAC Products |
19.071 |
22.325 |
17% |
Other segments |
-5.901 |
-4.470 |
-24% |
Eliminations |
-0.835 |
-0.925 |
11% |
Total |
6.711 |
17.480 |
115% |
EBITDA margin by division |
|||
AAC Data & Services |
68.1% |
14.4% |
|
AAC Missions |
-115.0% |
-0.2% |
|
AAC Products |
39.6% |
35.1% |
|
Total |
12.0% |
20.9% |
Source: AAC Clyde
|
Exhibit 4: Divisional sales (SEKm) |
|
|
Source: AAC Clyde |
Order book and intake
The order book has reduced marginally in the period from the record SEK660m at the half year to SEK641m, due in part to the strong sales in the period. The backlog remains at an elevated level, less than 3% off the all-time high. Key recent wins include:
■
The first order for the Cyclops Earth observation satellite constellation through a pre-commercial agreement valued at £612k (c SEK8.3m) with the Scottish government. The two-year project will provide high-resolution image data enabling, among many other applications, the efficient monitoring of tree health.
■
A €1.025m (c SEK11.6m) order for four Starbuck power systems and related services. AAC expects to have completed delivery of the order in the second quarter of 2025.
■
A US$0.69m (c SEK7.1m) order for reaction wheels to be used on a number of small satellites. The order comes from a US blue chip company and follows an order received in February 2023 on the same type of equipment.
■
A €0.5m (c SEK5.8m) order for a Starbuck power system for small satellites and related services expected to be delivered by the third quarter of 2025.
|
Exhibit 5: Order backlog (SEKm) |
|
|
Source: AAC Clyde |
Outlook and expectations
Management guidance for the year is unchanged with revenue of SEK350–400m and EBITDA margins of 5–10%. Clearly this will require a positive Q4, which the order book and Q3 performance support although management notes that it is somewhat dependent on the timing of deliveries from key suppliers in order to achieve milestones on major projects, in a supply chain that remains stretched. There are no changes to our forecasts for the full year.
Valuation
There is no change to our valuation as per our last note in August.
Exhibit 6: Financial summary
SEKm |
2021 |
2022 |
2023 |
2024e |
2025e |
||
Year-end December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|
||||||
Net sales |
|
|
180.0 |
196.7 |
276.6 |
375.0 |
600.0 |
Own work capitalised and other operating income |
30.9 |
47.0 |
48.8 |
26.8 |
39.0 |
||
Group income |
210.8 |
243.7 |
325.5 |
401.8 |
639.0 |
||
EBITDA |
|
|
(12.4) |
(30.0) |
1.0 |
24.9 |
75.0 |
Operating Profit (before amort. and except). |
|
|
(21.9) |
(40.3) |
(12.5) |
(5.1) |
50.0 |
Intangible Amortisation |
(0.9) |
(0.7) |
(2.6) |
(1.5) |
(2.4) |
||
Other |
(15.8) |
(26.0) |
(21.7) |
(21.7) |
(21.7) |
||
Operating Profit |
(38.6) |
(67.0) |
(36.8) |
(28.3) |
25.9 |
||
Associates & Other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net Interest |
(4.2) |
17.9 |
(4.2) |
(1.6) |
(3.1) |
||
Profit Before Tax (norm) |
|
|
(27.0) |
(23.2) |
(19.3) |
(8.1) |
44.5 |
Profit Before Tax (FRS 3) |
|
|
(42.8) |
(49.1) |
(41.1) |
(29.8) |
22.8 |
Tax |
3.3 |
2.6 |
(0.5) |
1.5 |
(1.1) |
||
Profit After Tax (norm) |
(24.9) |
(22.0) |
(18.4) |
(7.7) |
42.3 |
||
Profit After Tax (FRS 3) |
(39.5) |
(46.5) |
(41.6) |
(28.3) |
21.7 |
||
Average Number of Shares Outstanding (m) |
3.5 |
3.9 |
4.8 |
5.7 |
5.7 |
||
EPS - fully diluted (SEK) |
|
|
(7.17) |
(5.58) |
(4.16) |
(1.35) |
7.59 |
EPS - normalised (SEK) |
|
|
(7.17) |
(5.58) |
(4.16) |
(1.35) |
7.59 |
EPS - (IFRS) (SEK) |
|
|
(11.36) |
(11.82) |
(8.73) |
(4.97) |
3.97 |
Dividend per share (SEK) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
EBITDA Margin (%) |
-6.9 |
-15.2 |
0.4 |
6.7 |
12.5 |
||
Operating Margin (before GW and except.) (%) |
-12.2 |
-20.5 |
-4.5 |
-1.3 |
8.3 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
681.0 |
728.6 |
746.2 |
728.2 |
728.3 |
Intangible Assets |
639.5 |
665.5 |
672.6 |
668.1 |
668.0 |
||
Tangible Assets |
26.4 |
46.4 |
57.8 |
44.3 |
44.5 |
||
Right of use asset |
15.1 |
16.8 |
15.8 |
15.8 |
15.8 |
||
Investments |
|||||||
Current Assets |
|
|
193.4 |
152.8 |
192.2 |
199.8 |
321.8 |
Stocks |
13.2 |
20.2 |
22.1 |
29.9 |
47.9 |
||
Debtors |
23.0 |
24.5 |
23.5 |
31.9 |
51.0 |
||
Cash |
96.1 |
52.1 |
59.5 |
20.0 |
34.1 |
||
Other |
61.1 |
56.0 |
87.1 |
118.0 |
188.8 |
||
Current Liabilities |
|
|
(129.2) |
(182.0) |
(249.4) |
(267.2) |
(353.5) |
Creditors |
(128.5) |
(175.8) |
(218.7) |
(261.7) |
(348.0) |
||
Lease liabilities |
0.0 |
(5.5) |
(5.5) |
(5.5) |
(5.5) |
||
Short term borrowings |
(0.6) |
(0.7) |
(25.2) |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(16.6) |
(35.9) |
(26.2) |
(31.9) |
(45.0) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Lease liabilities |
(15.1) |
(11.0) |
(10.2) |
(10.2) |
(10.2) |
||
Other long term liabilities |
(1.5) |
(24.9) |
(16.1) |
(21.8) |
(34.9) |
||
Net Assets |
|
|
728.6 |
663.5 |
662.8 |
628.9 |
651.6 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(37.3) |
6.4 |
11.1 |
21.7 |
67.5 |
Net Interest |
(0.2) |
(0.2) |
(2.9) |
(1.6) |
(3.1) |
||
Tax |
2.1 |
0.2 |
(1.3) |
0.0 |
(1.1) |
||
Capex |
(29.2) |
(40.9) |
(51.0) |
(35.3) |
(49.2) |
||
Acquisitions/disposals |
2.6 |
(38.3) |
(2.5) |
0.0 |
0.0 |
||
Financing |
94.1 |
33.3 |
37.6 |
0.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
0.0 |
(2.0) |
0.0 |
0.0 |
|||
Net Cash Flow |
32.0 |
(39.4) |
(11.0) |
(15.1) |
14.1 |
||
Opening net debt/(cash) excluding lease liabilities |
|
|
(62.2) |
(95.5) |
(52.1) |
(35.1) |
(20.0) |
HP finance leases initiated |
0.0 |
||||||
Other |
1.3 |
(4.0) |
(6.0) |
0.0 |
0.0 |
||
Closing net debt/(cash) excluding lease liabilities |
|
|
(95.5) |
(52.1) |
(35.1) |
(20.0) |
(34.1) |
Net financial liabilities including lease liabilities |
|
|
(80.4) |
(35.6) |
(19.5) |
(4.3) |
(18.4) |
Source: Edison Investment Research
|
|
Research: Metals & Mining
Wheaton Precious Metals’ (WPM’s) Q324 results, announced 7 November, showed a less than 1% variance for the quarter relative to our forecasts at the earnings level. Notably, however, three mines (Constancia, Stillwater and Voisey’s Bay) outperformed our expectations in terms of production but underperformed in terms of sales. This arguably sets up the potential for a rebound in Q4 when Wheaton’s streaming partners traditionally flush through sales ahead of the end of the financial year. Note that, at current metals prices, our EPS forecast for FY25 would be US$1.68 per share compared to the base case of US$1.23 per share.