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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 3026 3103
Sales growth (%) 6,9 -7,6 2,5
EBITDA 155 194 225
EBITDA margin (%) 4,7 6,4 7,3
EBIT adj 60 91 121
EBIT adj margin (%) 1,8 3 3,9
Pretax profit 44 61 103
EPS rep 0,13 0,13 0,24
EPS growth (%) -83 1,4 79,5
EPS adj 0,08 0,22 0,24
DPS 0 0,05 0,1
EV/EBITDA (x) 9,9 7,7 6,2
EV/EBIT adj (x) 25,7 16,6 11,6
P/E (x) 19,5 18,6 10,4
P/E adj (x) 32,5 11,3 10,4
EV/sales (x) 0,5 0,5 0,5
FCF yield (%) 1,1 3,6 13,3
Dividend yield (%) 0 2,1 3,9
Net IB debt/EBITDA 4,3 3,3 2,4
SEKm 2019 2020e 2021e
Sales 3276 3026 3103
COGS -2254 -1858 -1918
Gross profit 1022 1169 1185
Other operating items -867 -975 -960
EBITDA 155 194 225
Depreciation on tangibles -94 -120 -104
Depreciation on intangibles 0 0 0
EBITA 60 91 121
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 60 91 121
Other financial items 0 0 0
Net financial items -34 1 -18
Associated income 0 0 0
Other EO items 18 -30 0
Pretax profit 44 61 103
Tax 1 -15 -21
Net profit 45 46 83
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 45 46 83
EPS 0,13 0,13 0,24
EPS Adj 0,08 0,22 0,24
Total extraordinary items after tax 18 -30 0
Tax rate (%) 2,3 -24,8 -20
Gross margin (%) 31,2 38,6 38,2
EBITDA margin (%) 4,7 6,4 7,3
EBITA margin (%) 1,8 3 3,9
EBIT margin (%) 1,8 3 3,9
Pretax margin (%) 1,3 2 3,3
Net margin (%) 1,4 1,5 2,7
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 6,9 -7,6 2,5
EBITDA growth (%) -49,5 24,9 16,3
EBIT growth (%) -74,5 51,1 33,7
Net profit growth (%) -76,1 2,2 79,5
EPS growth (%) -83 1,4 79,5
Profitability 2019 2020 2021
ROE (%) 4,2 4,1 6,9
ROE Adj (%) 2,5 6,7 6,9
ROCE (%) 4,5 4,6 6,3
ROCE Adj(%) 3,5 6,1 6,3
ROIC (%) 3,6 3,7 5,3
ROIC Adj (%) 3,6 3,7 5,3
Adj earnings numbers 2019 2020 2021
EBITDA Adj 155 194 225
EBITDA Adj margin (%) 4,7 6,4 7,3
EBITA Adj 60 91 121
EBITA Adj margin (%) 1,8 3 3,9
EBIT Adj 60 91 121
EBIT Adj margin (%) 1,8 3 3,9
Pretax profit Adj 26 91 103
Net profit Adj 27 76 83
Net profit to shareholders Adj 27 76 83
Net Adj margin (%) 0,8 2,5 2,7
SEKm 2019 2020e 2021e
EBITDA 155 194 225
Net financial items -34 1 -18
Paid tax 1 -15 -21
Non-cash items 0 0 0
Cash flow before change in WC 122 179 187
Change in WC 21 -58 28
Operating cash flow 147 104 214
CAPEX tangible fixed assets -137 -73 -100
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 10 31 114
Dividend paid -34 0 -18
Share issues and buybacks 0 0 0
Other non cash items -83 -29 0
Decrease in net IB debt -84 20 96
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 193 198 198
Definite intangible assets 0 0 0
Tangible fixed assets 948 934 930
Other fixed assets 8 7 20
Fixed assets 1149 1139 1148
Inventories 667 576 603
Receivables 329 469 440
Other current assets 0 0 0
Cash and liquid assets 86 135 231
Total assets 2231 2320 2422
Shareholders equity 1102 1166 1230
Minority 0 0 0
Total equity 1102 1166 1230
Long-term debt 593 685 685
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 30 48 48
Short-term debt 157 94 94
Accounts payable 348 340 364
Other current liabilities 0 0 0
Total liabilities and equity 2230 2333 2422
Net IB debt 664 644 548
Net IB debt excl. pension debt 664 644 548
Capital invested 1797 1845 1826
Working capital 648 706 678
EV breakdown 2019 2020 2021
Market cap. diluted (m) 877 856 856
Net IB debt Adj 664 644 548
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 1500 1404
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 152,2 133 130,9
Capital invested turnover (%) 190,7 166,2 169,1
Capital employed turnover (%) 184,1 159,4 157
Inventories / sales (%) 20,1 20,5 19
Customer advances / sales (%) 0 0 0
Payables / sales (%) 10,8 11,4 11,3
Working capital / sales (%) 20,1 22,4 22,3
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 60,3 55,2 44,5
Net debt / market cap (%) 68 75,2 64
Equity ratio (%) 49,4 50,3 50,8
Net IB debt adj. / equity (%) 60,3 55,2 44,5
Current ratio (%) 214,3 272,1 277,8
EBITDA / net interest (%) 455,9 -38728,8 1251,1
Net IB debt / EBITDA (%) 428,4 332,4 243,3
Interest cover (%) 172,2 457,4 569,1
SEKm 2019 2020e 2021e
Shares outstanding adj. 344 347 347
Fully diluted shares Adj 344 347 347
EPS 0,13 0,13 0,24
Dividend per share Adj 0 0,1 0,1
EPS Adj 0,08 0,22 0,24
BVPS 3,21 3,36 3,55
BVPS Adj 3,21 3,36 3,55
Net IB debt / share 1,9 1,9 1,6
Share price 2,84 2,47 2,47
Market cap. (m) 976 856 856
Valuation 2019 2020 2021
P/E 19,5 18,6 10,4
EV/sales 0,47 0,5 0,45
EV/EBITDA 9,9 7,7 6,2
EV/EBITA 25,7 16,6 11,6
EV/EBIT 25,7 16,6 11,6
Dividend yield (%) 0 2,1 3,9
FCF yield (%) 1,1 3,6 13,3
P/BVPS 0,8 0,73 0,7
P/BVPS Adj 0,8 0,73 0,7
P/E Adj 32,5 11,3 10,4
EV/EBITDA Adj 9,9 7,7 6,2
EV/EBITA Adj 25,7 16,6 11,6
EV/EBIT Adj 25,7 16,6 11,6
EV/cap. employed 0,8 0,8 0,7
Investment ratios 2019 2020 2021
Capex / sales 4,2 2,4 3,2
Capex / depreciation 145,7 60,8 96,2
Capex tangibles / tangible fixed assets 14,5 7,8 10,8
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 12,8 11,2

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 Mar 2020
Futur Pension 5.3 % 5.3 % 30 Mar 2020
Åke Bergh 3.1 % 3.1 % 31 Mar 2020
Niklas Sjöfors 2.9 % 2.9 % 31 Mar 2020
Setra Trävaror AB 1.7 % 1.7 % 31 Mar 2020
AB Fogelfors Bruk 1.7 % 1.7 % 31 Mar 2020
Per Anders Bendt 1.7 % 1.7 % 31 Mar 2020
Swedbank Försäkring 1.0 % 1.0 % 31 Mar 2020
Nordnet Pensionsförsäkring 1.0 % 1.0 % 31 Mar 2020
Íslandsbanki hf. 0.7 % 0.7 % 31 Mar 2020
Source: Holdings by Modular Finance AB

Insider list - Bergs Timber

Name Quantity Code Date
Peter Nilsson + 50 000 BUY 17 Jun 2020
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

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