Norbit ASA - Kasvua pinnan alla

[Ituhippinen]

https://norbit.com/media/NORBIT-ASA-Annual-Report-2024.pdf

2024 annual report is out. I’ll get back to the content later regarding what I deem necessary.

This year, we aim to reach a top line between NOK 2 200 and 2 300 million, with an EBIT margin that surpasses the 20 per cent we achieved in 2024.

I’ve been slowly trying to read through Norbit’s annual report. For 2025, a revenue of 2200-2300 MNOK with an EBIT margin >20% is guided. Revenue growth is thus guided at 25-30%. This is starting to give me a feeling that the 2027 target of >2750 MNOK revenue will be achieved ahead of schedule again. If we assume robust growth continues in 2026, a “modest” 20-25% revenue growth would be enough to meet that 2027 target a year early again. Oh right, the target is with organic growth. In addition, there is cash flow for acquisitions, the latest of which has been at least preliminarily very successful.

The EBIT-% also seems to be quite firmly included in the company’s targets. Monster-like growth is guided for this year, accompanied by an even better EBIT margin. What could it be then, when growth starts to slow down? Which, of course, I hope won’t happen for years to come.

The company trades at approx. 14.5x EBITA (2025, if the midpoint of the guidance is achieved).

More on geographical diversification (tariffs apparently being tinkered with somewhere).
Only Oceans takes a direct hit from larger tariff cuts. For Connectivity and PIR, the impact is negligible. Part of Oceans’ production is done in the United States, so not the entire share of revenue is imported through the hairy hands of customs officials.

Direct tariff impacts are therefore quite moderate, but impacts can, of course, occur through customers.

Oceans:

Connectivity:

PIR:

[Ituhippinen]

A few thoughts on the company’s valuation.

Enterprise value 7.9BNOK, share price 117.4NOK.
2024 EBIT 340MNOK.

Based on realized earnings, EV/EBIT is 23x, and based on current year 2025 guidance, it’s 17-18x.

If we get wild and assume 2027 targets are achieved already in 2026, EBIT would be 550MNOK, making EV/EBIT 14x at the current price. How much would be an acceptable multiple for Norbit then? Growth is likely to continue, so with a slight bullish outlook, an acceptable multiple could be 17-20x EBIT. In terms of market capitalization, this would mean 9.35-11 BNOK (if 2027 targets are met).

The “upside potential” in the share price would be 18-40%, which would mean a CAGR of 8-18% for a two-year period (targets one year early), or 5-12% for three years (company’s own target).

I feel that the valuation is still somewhat tight, and there isn’t a large margin of safety in the price. Nevertheless, considering the company’s quality and profitable growth, today’s price is not a rip-off either.

Note!

• I am a Norbit bull and enamored with the stock. There may be errors in the calculations, and the actual business performance may not follow my wonderful analysis.

[Ituhippinen]

Pareto raises Norbit’s target price to NOK 145 (previously 130) and reiterates its buy recommendation.

According to Pareto, Norbit has significant upside potential through its Defense and Security (D&S) unit. Pareto estimates that 2025 will likely mark a more visible contribution from that sector.

“As D&S grows to cover over 20 percent of the group’s revenue by 2027, the growth required from other businesses to achieve this target seems fully attainable. We still believe that the valuation does not fully reflect this growth rate or M&A potential (acquisitions), and we reiterate our buy recommendation,” writes Pareto’s analyst. (Translated from Norwegian to Finnish with the help of AI).

The drawing of that stock chart looks absolutely wonderful. I still consider Norbit a kind of “hidden gem” that isn’t talked about much.

And because only @Sijoittaja-alokas and Ituhippinen look at just the stock chart development, the fundamentals have also followed nicely (or which one follows which? )

And because sensei @Pohjolan_Eka is keeping a close eye on me, it should also be mentioned that the cash register is truly ringing, and these are not just magic numbers in black print.

[Ituhippinen]

I’m taking the liberty of a small zero-post!

Over the past couple of weeks, I’ve received several private messages regarding Norbitt! Feel free to discuss if interest arises! Although the intention is to keep the thread concise and an information-based quality thread, there’s certainly room for someone else to waste oxygen here.

[Ituhippinen]

The following, viewed critically, picked from Shareville’s oh-so-reliable forum! (I don’t personally see the original source written by Arctic’s Jeppe)

A price target increase, and justifications for such action. This is nothing new for us Norbit veterans!

Arctic raises price target from 135 to 150

We believe the equity deserves a re-rating, as 1) the company has demonstrated a strong track record delivering impressive growth from higher revenue levels, all while improving margins and cash flow, 2) it has historically adopted a conservative approach to financial guidance, which we believe de-risks the company’s 2025 and 2027 revenue targets, 3) earnings visibility has improved following a strong order intake since 2023, 4) clear and strong growth drivers include rising geopolitical tensions, homeshoring and favourable regulatory support for both smart tachographs and electronic toll systems, and 5) with its strong return on capital and high reinvestment rate, we argue that it deserves a higher valuation multiple."

[Ituhippinen]

That’s the day you decide to lighten up on Norbit…

NORBIT - Awarded NOK 125 million order - Inderes

\u003e NORBIT today announces that segment PIR has received a new contract manufacturing order, valued at approximately NOK 125 million from a European client in the defence and security sector.

\u003e Deliveries under the order are scheduled for the second half of 2025 and will be carried out from NORBIT’s production facilities in Norway.

The defense sector still seems to be pulling along quite nicely!

[Ituhippinen]

Tomorrow, the eagerly awaited Q1 2025 will be released! So be ready at 08:00 AM in the morning.

Why does this interest us Norbit fanatics? Well, because it should provide a very strong start to the year!

In February, in connection with the Q4’24 review, Norbit predicted the following for the first quarter:

@Ituhippinen

Oceans >200MNOK. revenue. This would be a rather significant improvement from Q1’24, when it was 121MNOK.

Connectivity 140-150MNOK revenue. Q1’24 was 151MNOK, which was a very strong quarter.

PIR 170-180MNOK revenue. Q1’24 was 145MNOK.

Overall, the company itself is thus forecasting 510-530MNOK in revenue. This would be an excellent start to the year, and analysts’ forecasts also fall in the middle of the range.

Below are the analyst forecasts compiled by the Quartr application!

[Ituhippinen]

NORBIT - Results for the first quarter 2025 - Inderes

Trondheim, 14 May 2025: In the first quarter, NORBIT recorded revenues of NOK 521.7 million, an increase of 29 per cent from the corresponding quarter of 2024. The EBIT result was NOK 127.4 million, representing a margin of 24 per cent. Diluted earnings per share were NOK 1.40 for the first quarter, up from NOK 0.50 one year earlier.

The Oceans segment delivered its second highest revenues ever of NOK 232.7 million, an increase of 92 per cent from the same quarter in 2024, with an EBIT margin of 35 per cent.
The Connectivity segment reported NOK 145.9 million in revenues, largely in line with Q1 2024, and an EBIT margin of 28 per cent.
The Product Innovation & Realization (PIR) segment saw revenue growth of 11 per cent, to NOK 160.6 million, with an EBIT margin of 14 per cent.

Great result once again. Oceans outperforms, Connectivity meets preliminary figures, and PIR lags slightly.

EBIT margin 24%!

Once again, when the market opens, I’ll have to be ashamed of the lightening I did…

E.

The company says at this point in the year that current outlook suggests the guidance is conservative. This would support my assumption that the company will achieve its medium-term targets a year ahead of schedule.

Q2 assumptions (company’s own):

Oceans: Revenue >220 MNOK. (Does not include 75MNOK security-side deal)
Connectivity: Revenue 160-180MNOK. (Q2’24 101MNOK)
PIR: Revenue: 330-350MNOK. (Q2’24 134MNOK) (large 260MNOK order, mostly recognized in Q2).

Q2 revenue is guided to be over 700MNOK.

[Ituhippinen]

Again, the quarterly results have been digested and the numbers entered into spreadsheets.

Arctic raises the target price to NOK 195 (150), reiterates “Buy” recommendation.
Pareto raises the target price to NOK 200 (145), reiterates “Buy” recommendation.

[Ituhippinen]

Norbit will be included in the MSCI Global Small Cap Index. This may or may not have some kind of impact on future share price development. The inclusion will take effect on May 30, i.e., at the end of this month!

MSCI_May25_SCPublicList.pdf

[Ituhippinen]

NORBIT ASA – Mandatory notification of trade by primary insider - Inderes

Petors AS, a company wholly owned by Per Jørgen Weisethaunet, CEO of NORBIT ASA, has today sold 153,000 shares in NORBIT ASA at an average price of NOK 193.23 per share.

The sale was made for tax-related purposes, primarily due to the Norwegian wealth tax regime, which imposes an annual tax on the assessed net wealth of individuals, including the market value of listed equity holdings.

[Ituhippinen]

The stock price is getting ahead too quickly, target prices are in too much of a hurry to keep up:

\u003e Pareto Securities raises its target price for Norbit to NOK 240 (200), reiterates buy recommendation.

The stock responds with a +4.5% rise.

[Ituhippinen]

One of Norbit’s competitors, Kongsberg, published its Q2 earnings today. The Kongsberg Discovery segment is particularly interesting to Norbit investors, as it compares very well to Norbit’s Oceans.

QoQ (quarter-on-quarter) a slight softness compared to Q1, though I don’t know what’s beneath the surface here. YoY (year-on-year) growth is, however, around 20%. Thanks to a strong sales mix, Kongsberg also managed to get the EBIT margin above 18%.

Kongsberg Discovery has an extensive portfolio of advanced technology combined with deep domain knowledge and advanced software. This is important in fisheries, marine research, marine operations, ocean-based energy production and monitoring of critical infrastructure. There is significant demand for technology across all these segments. The business area’s strong positions provide the solid foundation for continued growth in 2025

For Norbit’s Oceans, operating in the same segment, this sounds very good for the future as well.

[anon13733176]

The traditional buyers of these sonars are subcontractors for new builds of subsea oil and gas infrastructure and wind energy, such as Fugro C.

The policy of the new US administration has undermined the business, and for instance, the aforementioned major player has had to drastically reduce its North American operations.

To some extent, it’s about dual-use technology. Are you using sonar to check if an explosive has appeared next to a subsea oil pipeline, or are you using sonar to survey the seabed for a pipeline construction plan?

[Ituhippinen]

NORBIT - Invitation to presentation of NORBIT's second quarter and half-year...

The interim report for the first half-year and the presentation material will be available from 07:00 am CEST at the company’s homepage, www.norbit.com and Oslo Stock Exchange’s news site, www.newsweb.no (http://www.newsweb.no).

On Thursday, August 14th at 8 AM, the H1 report will be published. For the first time, I’m genuinely nervous about the report! The figures and guidance really need to be quite strong for the current multiples to be justified.

Expectations are 722MNOK revenue (+72% YoY), and 2.07 EPS (+73% YoY). Even more, I’m looking at the hopefully forthcoming guidance for the rest of the year and possible comments on the company’s 2027 targets, which will be achieved over a year in advance.

Adding my earlier comment in connection with Q1:

@Ituhippinen

The company states at this point in the year that current outlook suggests the guidance is conservative. This would support my assumption that the company will achieve its medium-term targets a year ahead of schedule.

Q2 assumptions (company’s own):

Oceans: Revenue >220 MNOK. (Does not include the 75MNOK security-side deal)
Connectivity: Revenue 160-180MNOK. (Q2’24 101MNOK)
PIR: Revenue: 330-350MNOK. (Q2’24 134MNOK) (large 260MNOK order, mostly recognized in Q2).

Q2 revenue is guided to be over 700MNOK.

[Ituhippinen]

https://www.inderes.fi/releases/norbit-results-for-the-second-quarter-2025

Revenue 684MNOK, est. 722MNOK.
(Oceans 239MNOK, est. >220MNOK)
(Connectivity 170MNOK, est. 160-180MNOK)
(PIR 293MNOK, est. 330-350MNOK)

EPS 2.06, est 2.07.

Earnings per share quite well in line with estimates, but revenue unfortunately fell short of expectations. Need to delve deeper when I have time from work!

Overall, H1 was incredibly strong performance, almost a 50% improvement from the previous year in terms of revenue, and at the same time, margins have been nudged upwards.

By segment:

Outlook for the year, positive updates.

The positive revenue revision was positive, which, in my opinion, has already been priced in, as I have written here. EBIT% is also expected to be approximately 25%, instead of the previously announced >20%.

---

Q3 Outlook:
Oceans 180MNOK (Typically the slowest Q, before a busy Q4)
Connectivity 120-130MNOK
PIR 220-230MNOK (The outlook for Q4 is already strong, and the company expects all-time high revenue for the segment)

Overall, the company forecasts Q3 revenue to be approximately >520MNOK. Last year’s Q3 revenue was 372MNOK, EBIT-% 14%.

Let’s add a word about valuation. At yesterday’s closing price (13.8.), with the current guidance, EV/EBIT is ~ 20-21x for the current year. I’m therefore changing my tune a bit, and state that in my opinion, the valuation is in a relatively good range. There may not be much safety margin, but the company has proven its ability to grow profitably, and this year’s performance, in my opinion, justifies the current multiples.

[Ituhippinen]

@Heikki_Keskivali keeps the analysis simpler, even though we reached the same conclusion (did you use my EV/EBIT calculation ) . This might not necessarily be a bubble yet at these prices.

[Ituhippinen]

NORBT: Potential block sale of existing shares in NORBIT ASA - Inderes

The family of the company’s founder Steffen Kirknes is exploring the possibility of divesting their entire shareholding. The family company owns just over 3 million Norbit shares through Draupnir Invest AS (approx. 5% of all shares).

The broker is investigating at what price such a block of shares would go at once. The process begins today, September 16th, and ends tomorrow, September 17th. These situations are new to me, but would such a short timeline mean that there are already quite certain buyer(s) ready? As a disclaimer, it is naturally stated that the seller may also choose not to sell if the price is not satisfactory.

In any case, I expect some movement in the share price during the rest of the week.

Ping @Pohjolan_Eka if you can help explain how such a procedure usually works and why there’s only a day? Is it common?

[Pohjolan_Eka]

These accelerated auctions for pre-selected wealthy investors are usually seen in connection with directed issues (private placements) and are always rushed through so that the announcement doesn’t have too much time to affect the share price and the auction can be completed as close to the market price as possible. However, some discount is usually inevitably offered to the buyer, but of course, the seller couldn’t dump such large quantities onto the market without the share price diving significantly more.

Block trades are often done directly between two parties, but if multiple parties are interested in a block of shares, an accelerated auction can certainly be arranged between the interested parties, and that is likely smart for the seller to maximize the price if the buyer doesn’t mind as much.

So, it’s not an everyday occurrence, but it’s not particularly exceptional either

[Critter1]

In practice, this involves collecting offers from sufficiently wealthy parties (this naturally depends on the stock; a party wealthy enough to participate in an Oriola placement might not be if 10% of Nokia shares become available), and based on these, a balance price is reached at which the shares are sold, if the price is agreeable to the seller. Some of the shares go into a longer hold, while others go to flippers.