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 UK, USA, France, Thailand 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 during the period 2017–2021 was 12 per cent.
  • Growth in 2020 and 2021 was very negatively impacted by the pandemic, which brings down the average growth for the period.
  • Despite the challenges in the business environment, INVISIO
    decided to continue to carry out its growth strategy for product
    development and organizational development.
  • Expanded revenue base through the acquisition of Racal Acoustics.
  • The market for INVISIO’s offer is not cyclically dependent and is growing structurally.

Sound profitability
enables offensive R&D

  • The gross margin for the period 2017-2021 was on average
    58 per cent. For 2021 the gross margin was 57 per cent.
  • The average operating margin for 2017-2021 was 17 per cent.
    For 2021 the gross margin was just over 4 per cent.
  • Investments in R&D for the period 2017-2021 amounted to an
    average of 14 per cent per year of the company’s total revenue.
  • For 2021 investments in R&D amounted to 15 per cent.

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 product development and sales.
  • Cash flow from operating activities before changes in working capital amounted to SEK 62.2 million (96.7).
  • INVISIO has a sound financial position. The Group's cash and cash equivalents at the year end amounted to SEK 134.8 million (157.7). Group equity at year-end amounted to SEK 417.5 million (378.9), which gave an equity/assets ratio of 61 per cent (73).

Strong market position in a growing niche market

Growing niche market with high entry barriers

  • The market is growing structurally as
    increasing numbers of users in defense
    and law enforcement are issued with
    personal communication equipment.
  • 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, for which American veterans
    receive compensation.
  • Entering the market and winning a
    public procurement normally takes
    several years. High entry barriers have
    meant that there are 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. Contracts with the Racal Acoustics brand can run for considerably longer. Examples of customers: US Department of Defense, several NATO armies and the Swedish Police. The framework agreements and programs enable recurrent sales.
  • Access to two strong brands, INVISIO and Racal Acoustics – leading in their respective markets.

Growth strategy and corporate culture

Broadened customer offer, new user categories and geographical markets

  • The new Intercom system is an entirely new source of revenue for INVISIO. The value of the addressable market is estimated to be about SEK 7 billion per year.
  • The police are a growing user group. The addressable market for the personal system intended for the police is about SEK 1.5 billion per year.
  • INVISIO is addressing 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 employees and strengthen the culture.
  • The company’s staff turnover is low 4 per cent (3).
  • 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 14 years.