Over the week, Astor announced two important order intakes for their subsidiaries Airsafe and Oscilion. In detail:
Airsafe secures major order worth SEK 68m. The parachute system company secured a milestone order from an undisclosed "country in the Western world", with an additional option for further SEK 22m. Deliveries are planned for 2026. Considering Airsafe's FY'24 revenues of SEK 34m with a 15% EBITDA margin, this order adds significantly to the company's already solid growth path. To put this into perspective, Astor acquired Airsafe in early 2024 for SEK 25m (5.3x FY'24 EV/EBITDA). This order alone (assuming the option fully drawn and a 15% EBITDA margin) could deliver a SEK 14m EBITDA contribution (vs. FY'24 EBITDA of SEK 4.9m), in our view.
Oscilion secures second EW order for the drone jammer "Astor Eclipse". Following the first commercial order in May (SEK 21m), the electromagnetic warfare (EW) company Oscilion received a second large order for their drone jammer "Astor Eclipse", other materials and testing, worth SEK 15m for delivery in Autumn 2025. Again, the customer was not disclosed due to national security interests, only the fact that it is a country in the "Western world" (we expect it to be NATO member as well), which leaves two interpretations open: 1) this order is a follow-up order by the same customer that ordered in May, proving our thought of the first order being a test order which now triggered follow up orders or 2) this order is from a different customer, showing that other NATO members are in dire need to up their defense capabilities against drones.
Especially the latter is a direct result of the Ukraine war, where FPV drones have radically changed warfare. For example, the use of FPV drones (that cost triple-digit € amounts) have the capability to disable a multi-million € vehicle. Therefore, the effective protection against FPV drones is of great importance for the Western (NATO) countries.
Following many years of development, Oscilion has now proven the successful commercialization of their advanced mil-tech products, leaving the pre-revenue phase behind. With that, positive bottom-line contributions from Oscilion in FY'25e for the first time since foundation should also be in the cards, in our view.
In sum, Astor remains in the driver seat to execute a strong H2 regarding further acquisitions. With the recently resolved SEK 320m capital increase as well as the new SEK 128m credit facility from Swedbank (with only 4-5% interest rate), Astor has large flexibility to execute on the well-filled M&A pipeline.
Against this backdrop, we reiterate our BUY recommendation and Astor's position in our NuWays AlphaList with an unchanged PT of SEK 56.00, based on DCF.
ISIN: SE0019175274
