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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 3321 3413 3561
Sales growth (%) 8,4 2,8 4,3
EBITDA 158 232 243
EBITDA margin (%) 4,8 6,8 6,8
EBIT adj 62 124 135
EBIT adj margin (%) 1,9 3,6 3,8
Pretax profit 59 106 117
EPS rep 0,16 0,24 0,26
EPS growth (%) -78,9 51 7,7
EPS adj 0,1 0,24 0,26
DPS 0,07 0,1 0,11
EV/EBITDA (x) 9,9 6,7 6,3
EV/EBIT adj (x) 25,2 12,5 11,3
P/E (x) 15,7 10,4 9,7
P/E adj (x) 25,2 10,4 9,7
EV/sales (x) 0,5 0,5 0,4
FCF yield (%) -0,4 6 5,2
Dividend yield (%) 2,6 3,8 4,1
Net IB debt/EBITDA 4,4 2,8 2,7
SEKm 2019 2020e 2021e
Sales 3321 3413 3561
COGS -2274 -2145 -2282
Gross profit 1046 1268 1279
Other operating items -888 -1036 -1036
EBITDA 158 232 243
Depreciation on tangibles -95 -108 -108
Depreciation on intangibles 0 0 0
EBITA 62 124 135
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 62 124 135
Other financial items 0 0 0
Net financial items -25 -18 -18
Associated income 0 0 0
Other EO items 21 0 0
Pretax profit 59 106 117
Tax -3 -21 -26
Net profit 56 85 91
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 56 85 91
EPS 0,16 0,24 0,26
EPS Adj 0,1 0,24 0,26
Total extraordinary items after tax 21 0 0
Tax rate (%) -5,1 -20 -22
Gross margin (%) 31,5 37,2 35,9
EBITDA margin (%) 4,8 6,8 6,8
EBITA margin (%) 1,9 3,6 3,8
EBIT margin (%) 1,9 3,6 3,8
Pretax margin (%) 1,8 3,1 3,3
Net margin (%) 1,7 2,5 2,6
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 8,4 2,8 4,3
EBITDA growth (%) -48,5 46,7 4,7
EBIT growth (%) -73,6 99,4 8,9
Net profit growth (%) -70,4 52,3 7,7
EPS growth (%) -78,9 51 7,7
Profitability 2019 2020 2021
ROE (%) 5,1 7,3 7,5
ROE Adj (%) 3,2 7,3 7,5
ROCE (%) 4,8 6,6 7
ROCE Adj(%) 3,6 6,6 7
ROIC (%) 3,4 5,3 5,6
ROIC Adj (%) 3,4 5,3 5,6
Adj earnings numbers 2019 2020 2021
EBITDA Adj 158 232 243
EBITDA Adj margin (%) 4,8 6,8 6,8
EBITA Adj 62 124 135
EBITA Adj margin (%) 1,9 3,6 3,8
EBIT Adj 62 124 135
EBIT Adj margin (%) 1,9 3,6 3,8
Pretax profit Adj 38 106 117
Net profit Adj 35 85 91
Net profit to shareholders Adj 35 85 91
Net Adj margin (%) 1 2,5 2,6
SEKm 2019 2020e 2021e
EBITDA 158 232 243
Net financial items -25 -18 -18
Paid tax -3 -21 -26
Non-cash items 0 0 0
Cash flow before change in WC 131 193 199
Change in WC -11 -52 -65
Operating cash flow 146 141 134
CAPEX tangible fixed assets -149 -88 -88
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow -3 53 46
Dividend paid -34 -23 -34
Share issues and buybacks 0 0 0
Other non cash items -93 0 0
Decrease in net IB debt -111 30 12
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 194 194 194
Definite intangible assets 0 0 0
Tangible fixed assets 957 937 917
Other fixed assets 8 9 9
Fixed assets 1159 1140 1120
Inventories 655 730 819
Receivables 408 380 391
Other current assets 0 0 0
Cash and liquid assets 80 110 122
Total assets 2301 2360 2453
Shareholders equity 1123 1185 1242
Minority 0 0 0
Total equity 1123 1185 1242
Long-term debt 611 681 681
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 26 26 26
Short-term debt 160 90 90
Accounts payable 383 378 414
Other current liabilities 0 0 0
Total liabilities and equity 693 2074 2302
Net IB debt 691 661 649
Net IB debt excl. pension debt 691 661 649
Capital invested 1839 1871 1916
Working capital 680 731 796
EV breakdown 2019 2020 2021
Market cap. diluted (m) 875 882 882
Net IB debt Adj 691 661 649
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 1566 1543 1531
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 151,8 146,4 148
Capital invested turnover (%) 191 184 188
Capital employed turnover (%) 184,5 177,3 179,5
Inventories / sales (%) 19,7 20,3 21,8
Customer advances / sales (%) 0 0 0
Payables / sales (%) 11,2 11,2 11,1
Working capital / sales (%) 20,3 20,7 21,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 61,6 55,8 52,2
Net debt / market cap (%) 70,8 74,9 73,5
Equity ratio (%) 48,8 50,2 50,6
Net IB debt adj. / equity (%) 61,6 55,8 52,2
Current ratio (%) 210,5 260,4 264,6
EBITDA / net interest (%) 645,5 1288,6 1349,8
Net IB debt / EBITDA (%) 437 284,9 266,9
Interest cover (%) 236,9 581,6 631,6
SEKm 2019 2020e 2021e
Shares outstanding adj. 344 347 347
Fully diluted shares Adj 344 347 347
EPS 0,16 0,24 0,26
Dividend per share Adj 0,1 0,1 0,1
EPS Adj 0,1 0,24 0,26
BVPS 3,27 3,42 3,58
BVPS Adj 3,27 3,42 3,58
Net IB debt / share 2 1,9 1,9
Share price 2,84 2,54 2,54
Market cap. (m) 976 882 882
Valuation 2019 2020 2021
P/E 15,7 10,4 9,7
EV/sales 0,47 0,45 0,43
EV/EBITDA 9,9 6,7 6,3
EV/EBITA 25,2 12,5 11,3
EV/EBIT 25,2 12,5 11,3
Dividend yield (%) 2,6 3,8 4,1
FCF yield (%) -0,4 6 5,2
P/BVPS 0,78 0,74 0,71
P/BVPS Adj 0,78 0,74 0,71
P/E Adj 25,2 10,4 9,7
EV/EBITDA Adj 9,9 6,7 6,3
EV/EBITA Adj 25,2 12,5 11,3
EV/EBIT Adj 25,2 12,5 11,3
EV/cap. employed 0,8 0,8 0,8
Investment ratios 2019 2020 2021
Capex / sales 4,5 2,6 2,5
Capex / depreciation 156,8 81,5 81,5
Capex tangibles / tangible fixed assets 15,6 9,4 9,6
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 11,5 11,8

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
Danica Pension 4.9 % 4.9 % 18 Apr 2019
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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