Investment case

The investment case aims to show significant value drivers for the INVISIO share. In recent years the company has made considerable investments in both the customer offer and its sales organization. The investments have resulted in a new offer – the Intercom system – and sales offices in the USA, France and Italy.

The sales target for INVISIO is average annual growth of 20 per cent. The target for the operating margin is that it should exceed 15 per cent.

Steady growth but unevenly distributed order inflow

INVISIO’s market is characterized by large procurements at irregular intervals. Both order intake and sales can fluctuate substantially between quarters and the company’s development should therefore be evaluated in a longer time perspective than individual quarters.

Financial development and investments in R&D

Good long-term
organic growth

  • INVISIO’s average annual growth – which was entirely organic – during the period 2016-2020 was 18.3 per cent.
  • The acquisition of Racal Acoustics expands the revenue base.
  • The market for INVISIO’s system is not cyclically dependent and is growing structurally.

Sound profitability
enables offensive R&D

  • The gross margin for the period 2016-2020 was on average 57 per cent. For 2020 the gross margin was 58 per cent.
  • The average operating margin for 2016-2020 was 22 per cent. For 2020 the operating margin was almost 18 per cent.
  • Investment in R&D for 2016-2020  corresponded on average to 14 per cent per year of the company’s total revenue, allowing offensive product development in close collaboration with key customers.

High scalability and strong financial position

  • All volume production takes place with the help of contract manufacturers, which enables scalability, flexibility and full focus on R&D and sales.
  • Cash flow from operating activities before changes in working capital amounted to SEK 96.7 million (140.0).
  • At the close of the year the Group had no loans and the equity/assets ratio was 73 per cent. After the acquisition, the interest-bearing debt amounts to about SEK 100 million.

Strong market position in a growing niche market

Growing niche market with high entry barriers

  • The market is growing structurally as communication becomes increasingly important for police and military personnel. An increasing number of radio users benefits INVISIO.
  • According to the US Department of Veterans' Affairs, tinnitus and hearing loss together accounted for about 17 per cent of the total number of claims registered in 2019, for which  American veterans receive compensation.
  • Entering the market and winning a public procurement takes several years.
  • High entry barriers have meant that the market has relatively few active players.

Market leading position and a portfolio of multi-year framework agreements and programs

  • INVISIO’s market leadership was further strengthened by the acquisition of Racal Acoustics.
  • INVISIO has a portfolio of framework agreements and programs that run for 3–7 years. The customers include the US Department of Defense, several NATO armies and the Swedish Police. The framework agreements and programs enable recurrent sales.

Growth strategy and corporate culture

Broadened customer offer, new user categories and geographical markets

  • The new Intercom system is a unique solution developed together with customers and originating from their needs. The market for the system is estimated to be worth about SEK 7 billion. The Intercom system is an entirely new source of revenue for INVISIO.
  • The police is a new user group. The market for the personal system intended for the police is about SEK 1.5 billion and has considerable potential. 
  • INVISIO addresses new geographical markets in South America, the Middle East and Asia.
  • The acquisition of Racal Acoustics means that the offer is being broadened with a new, complementary product category. The acquisition increases the value of the annual addressable
    market by about SEK 0.5 billion.

Strong corporate culture

  • INVISIO’s corporate culture is strong. Clear targets and incentive programs that include all employees help to motivate and strengthen employees.
  • The company’s staff turnover is low and was 3 per cent in 2020. 
  • The company has an experienced leadership with many years of cooperation behind it. The President/CEO, the SVP Global Sales & Marketing and the SVP R&D have each worked for INVISIO for more than 13 years.