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Bergs Timber

Bergs Timber

Timber pure-play

Bergs Timber is the only listed timber pure-play in Sweden. It sells sawn and processed wood products. ~80% of the group’s products are exported, mainly to the UK, US and other European countries. In January 2018, the company announced its intention to acquire Norvik Timber, a transformational acquisition that will approximately double the group’s production capacity and revenues. Norvik Timber is a vertically integrated group with sawmills, production of processed wood products like windows, houses and furniture, and distribution of own and third-party products.

Historically, Bergs Timber has been a typical sawmill group with a high degree of commoditised wood products. Going forward, however, the group’s strategy is to increase focus on value-added processing and perform complementary acquisitions. Combined with strong macroeconomic fundamentals, industry consolidation and improvement programs there should be room for earnings uplift over the coming years. The acquisition of Norvik Timber will transform the group into a more vertically integrated player with potential for margin improvement and a higher degree of earnings stability.

The primary end-market for the group’s products is the building and construction industry. As a result, demand for the group’s products is cyclical and depends on global economic developments. Due to a high degree of commoditised products, the group’s earnings are highly sensitive to the market prices of its products. An increase in the price of saw logs could have negative impact the group’s earnings since it is the most important input factor in its operations. ~80% of the group’s products are sold in foreign currencies like GDP, EUR and USD. Currency fluctuations is therefore another major risk factor.

SEKm 2019 2020e 2021e
Sales 3276 3195 3316
Sales growth (%) 6,9 -2,5 3,8
EBITDA 155 223 243
EBITDA margin (%) 4,7 7 7,3
EBIT adj 60 115 135
EBIT adj margin (%) 1,8 3,6 4,1
Pretax profit 44 97 117
EPS rep 0,13 0,22 0,27
EPS growth (%) -83 70,3 20,6
EPS adj 0,08 0,22 0,27
DPS 0,04 0,09 0,11
EV/EBITDA (x) 9,9 5,7 5
EV/EBIT adj (x) 25,7 11,1 9
P/E (x) 19,5 8,3 6,9
P/E adj (x) 32,5 8,3 6,9
EV/sales (x) 0,5 0,4 0,4
FCF yield (%) 1,1 6,4 14,8
Dividend yield (%) 1,6 4,8 5,8
Net IB debt/EBITDA 4,3 2,9 2,4
SEKm 2019 2020e 2021e
Sales 3276 3195 3316
COGS -2254 -2008 -2109
Gross profit 1022 1187 1207
Other operating items -867 -964 -964
EBITDA 155 223 243
Depreciation on tangibles -94 -108 -108
Depreciation on intangibles 0 0 0
EBITA 60 115 135
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 60 115 135
Other financial items 0 0 0
Net financial items -34 -18 -18
Associated income 0 0 0
Other EO items 18 0 0
Pretax profit 44 97 117
Tax 1 -19 -23
Net profit 45 77 93
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 45 77 93
EPS 0,13 0,22 0,27
EPS Adj 0,08 0,22 0,27
Total extraordinary items after tax 18 0 0
Tax rate (%) 2,3 -20 -20
Gross margin (%) 31,2 37,1 36,4
EBITDA margin (%) 4,7 7 7,3
EBITA margin (%) 1,8 3,6 4,1
EBIT margin (%) 1,8 3,6 4,1
Pretax margin (%) 1,3 3 3,5
Net margin (%) 1,4 2,4 2,8
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 6,9 -2,5 3,8
EBITDA growth (%) -49,5 43,6 9
EBIT growth (%) -74,5 91 17,4
Net profit growth (%) -76,1 71,7 20,6
EPS growth (%) -83 70,3 20,6
Profitability 2019 2020 2021
ROE (%) 4,2 6,8 7,8
ROE Adj (%) 2,5 6,8 7,8
ROCE (%) 4,5 6,3 7,1
ROCE Adj(%) 3,5 6,3 7,1
ROIC (%) 3,6 5,1 5,9
ROIC Adj (%) 3,6 5,1 5,9
Adj earnings numbers 2019 2020 2021
EBITDA Adj 155 223 243
EBITDA Adj margin (%) 4,7 7 7,3
EBITA Adj 60 115 135
EBITA Adj margin (%) 1,8 3,6 4,1
EBIT Adj 60 115 135
EBIT Adj margin (%) 1,8 3,6 4,1
Pretax profit Adj 26 97 117
Net profit Adj 27 77 93
Net profit to shareholders Adj 27 77 93
Net Adj margin (%) 0,8 2,4 2,8
SEKm 2019 2020e 2021e
EBITDA 155 223 243
Net financial items -34 -18 -18
Paid tax 1 -19 -23
Non-cash items 0 0 0
Cash flow before change in WC 122 185 201
Change in WC 21 -57 -18
Operating cash flow 147 129 183
CAPEX tangible fixed assets -137 -88 -88
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 10 41 95
Dividend paid -34 -14 -31
Share issues and buybacks 0 0 0
Other non cash items -83 0 0
Decrease in net IB debt -84 27 64
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 193 193 193
Definite intangible assets 0 0 0
Tangible fixed assets 948 928 908
Other fixed assets 8 7 7
Fixed assets 1149 1128 1108
Inventories 667 691 719
Receivables 329 347 347
Other current assets 0 0 0
Cash and liquid assets 86 113 177
Total assets 2231 2279 2351
Shareholders equity 1102 1165 1228
Minority 0 0 0
Total equity 1102 1165 1228
Long-term debt 593 663 663
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 30 30 30
Short-term debt 157 87 87
Accounts payable 348 333 343
Other current liabilities 0 0 0
Total liabilities and equity 2230 2279 2351
Net IB debt 664 637 573
Net IB debt excl. pension debt 664 637 573
Capital invested 1797 1833 1831
Working capital 648 705 723
EV breakdown 2019 2020 2021
Market cap. diluted (m) 877 640 640
Net IB debt Adj 664 637 573
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 1541 1277 1213
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 152,2 141,7 143,2
Capital invested turnover (%) 190,7 176 181
Capital employed turnover (%) 184,1 169,6 170,4
Inventories / sales (%) 20,1 21,3 21,3
Customer advances / sales (%) 0 0 0
Payables / sales (%) 10,8 10,7 10,2
Working capital / sales (%) 20,1 21,2 21,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 60,3 54,7 46,7
Net debt / market cap (%) 68 99,6 89,6
Equity ratio (%) 49,4 51,1 52,2
Net IB debt adj. / equity (%) 60,3 54,7 46,7
Current ratio (%) 214,3 273,7 288,9
EBITDA / net interest (%) 455,9 1236,7 1347,5
Net IB debt / EBITDA (%) 428,4 286,2 236,3
Interest cover (%) 172,2 539,1 629,8
SEKm 2019 2020e 2021e
Shares outstanding adj. 344 347 347
Fully diluted shares Adj 344 347 347
EPS 0,13 0,22 0,27
Dividend per share Adj 0 0,1 0,1
EPS Adj 0,08 0,22 0,27
BVPS 3,21 3,36 3,54
BVPS Adj 3,21 3,36 3,54
Net IB debt / share 1,9 1,8 1,7
Share price 2,84 1,85 1,85
Market cap. (m) 976 640 640
Valuation 2019 2020 2021
P/E 19,5 8,3 6,9
EV/sales 0,47 0,4 0,37
EV/EBITDA 9,9 5,7 5
EV/EBITA 25,7 11,1 9
EV/EBIT 25,7 11,1 9
Dividend yield (%) 1,6 4,8 5,8
FCF yield (%) 1,1 6,4 14,8
P/BVPS 0,8 0,55 0,52
P/BVPS Adj 0,8 0,55 0,52
P/E Adj 32,5 8,3 6,9
EV/EBITDA Adj 9,9 5,7 5
EV/EBITA Adj 25,7 11,1 9
EV/EBIT Adj 25,7 11,1 9
EV/cap. employed 0,8 0,7 0,6
Investment ratios 2019 2020 2021
Capex / sales 4,2 2,8 2,7
Capex / depreciation 145,7 81,5 81,5
Capex tangibles / tangible fixed assets 14,5 9,5 9,7
Capex intangibles / definite intangibles N/A N/A N/A
Depreciation on intangibles / definite intangibles N/A N/A N/A
Depreciation on tangibles / tangibles 9,9 11,6 11,9

Equity Research

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Media

Bergs Timber - Interview with CFO Anders Marklund (in Swedish)
Bergs Timber - Company presentation with CFO Anders Marklund

Main shareholders - Bergs Timber

Main shareholders Share capital % Voting shares % Verified
Norvik Hf 63.6 % 63.6 % 31 Dec 2019
Futur Pension 5.3 % 5.3 % 30 Mar 2020
Åke Bergh 3.1 % 3.1 % 31 Dec 2019
Niklas Sjöfors 2.9 % 2.9 % 31 Dec 2019
Setra Trävaror AB 1.7 % 1.7 % 31 Dec 2019
AB Fogelfors Bruk 1.7 % 1.7 % 31 Dec 2019
Per Anders Bendt 1.4 % 1.4 % 31 Dec 2019
Swedbank Försäkring 1.1 % 1.1 % 31 Dec 2019
Nordnet Pensionsförsäkring 0.8 % 0.8 % 31 Dec 2019
Íslandsbanki hf. 0.7 % 0.7 % 31 Dec 2019
Source: Holdings by Modular Finance AB

Insider list - Bergs Timber

Name Quantity Code Date
Patrik Ivarsson - 20 336 SELL 28 Mar 2019
Patrik Ivarsson - 5 239 SELL 18 Mar 2019
Peter Nilsson + 50 000 BUY 11 Mar 2019
Patrik Ivarsson - 7 425 SELL 25 Oct 2018
Patrik Ivarsson - 9 000 SELL 15 Oct 2018
Christina Marianne Brav + 7 000 BUY 11 Oct 2018
Anders Marklund + 25 000 BUY 5 Oct 2018
Norvik hf. +170 000 000 BUY 8 Jun 2018
Patrik Larsson + 1 000 BUY 28 Feb 2018
Sampsa Auvinen + 500 000 BUY 1 Sep 2017

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