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Third party research

CTT Systems: Sales as expected, EBIT hurt by FX - ABG

CTT Systems

This is a third party research report and does not necessarily reflect our views or values

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In-line Q1 sales, solid Q2 guidance, steeper EBIT decline in Q1
2025e EBIT: tailwinds from higher deliveries, headwinds from mix+FX
Return to earnings growth likely to happen first in Q3


Q1 details

Sales were in-line with our expectations, with a 33% organic sales decline (ABGSCe -36%), which in turn was driven by higher system sales (+44% y-o-y vs. ABG +64%) and lower aftermarket sales (-50% y-o-y vs. ABGSCe -55%). Aftermarket share of sales was 58% (ABG 53%). Encouraging to see that OEM sales ramped up well (18m vs. ABG 14m) while private jet/VIP deliveries (1m vs. ABG 9m) were postponed from Q1 to Q2. EBIT declined 88% y-o-y (ABG -72%), as the margin came in at 7% (ABG 17%) due to less favourable mix y-o-y as well as negative FX. In addition, CTT claims that distributors resumed placing orders in the aftermarket business in Q1 and early Q2, which supports management's view that AM sales troughed in Q1.
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