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Cavotec

Cavotec

International engineering group

Cavotec is an international engineering group that designs and manufactures systems within power transmission and distribution, remote controlling and automation for end markets such as ports, maritime, airports, mining and tunnelling. Its Ports & Maritime segment provides systems such as automated mooring, motorised cable reels, shore power connection systems. The Airports & Industry segment offers ground-support equipment (GSE) for aircraft at airports such as power and pre-conditioned air (PCA), while also providing motorised cable reels and radio remote controls (RRC) for mining and general industry.

Cavotec’s product offering enables substantial efficiency improvements in terms of both cost and environmental savings, such as the automated mooring system that greatly reduces mooring time and space for ships in ports. Its ground-support equipment for aircraft greatly reduces the need for fossil-fuel-generated operations by the aircraft themselves. Should sales efforts and penetration of Cavotec’s end markets prove successful, above-market growth is likely. Cavotec is undergoing a large internal transformation project, which, if successful, will significantly improve the company’s profitability and growth prospects.

Cavotec has a history of declining sales, high fixed costs and poor acquisitions. A positive future for Cavotec is heavily reliant on the success of the current transformational turnaround initiatives. While there are concrete arguments for using Cavotec’s products and solutions, it is always difficult for a smaller firm to penetrate large end markets where investments are large and decision-making often takes a long time.

EURm 2019 2020e 2021e
Sales 196 180 209
Sales growth (%) -0,5 -8,3 16,4
EBITDA 21 23 32
EBITDA margin (%) 11 12,7 15,2
EBIT adj 16 13 22
EBIT adj margin (%) 8 7,4 10,4
Pretax profit 11 14 20
EPS rep 0,08 0,1 0,15
EPS growth (%) 134,2 30 44,2
EPS adj 0,12 0,1 0,15
DPS 0 0 0
EV/EBITDA (x) 8,9 7,9 5,4
EV/EBIT adj (x) 12,2 13,6 7,8
P/E (x) 22,3 17 11,8
P/E adj (x) 15,4 17 11,8
EV/sales (x) 1 1 0,8
FCF yield (%) 7,5 8,6 8,7
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 1,1 0,6 0,1
EURm 2019 2020e 2021e
Sales 196 180 209
COGS 0 0 0
Gross profit 196 180 209
Other operating items -175 -157 -178
EBITDA 21 23 32
Depreciation on tangibles -5 -5 -6
Depreciation on intangibles 0 0 0
EBITA 12 13 22
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 12 13 22
Other financial items 0 2 0
Net financial items -2 1 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 11 14 20
Tax -3 -4 -6
Net profit 8 10 14
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 8 10 14
EPS 0,08 0,1 0,15
EPS Adj 0,12 0,1 0,15
Total extraordinary items after tax -3,4 0 0
Tax rate (%) -29,8 -29,1 -29
Gross margin (%) 100 100 100
EBITDA margin (%) 11 12,7 15,2
EBITA margin (%) 6,3 7,4 10,4
EBIT margin (%) 6,3 7,4 10,4
Pretax margin (%) 5,5 7,7 9,5
Net margin (%) 3,8 5,4 6,7
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -0,5 -8,3 16,4
EBITDA growth (%) 333 6,1 39,4
EBIT growth (%) 188,7 7,5 64,2
Net profit growth (%) 140,7 30 44,2
EPS growth (%) 134,2 30 44,2
Profitability 2019 2020 2021
ROE (%) 7,2 8,6 11,3
ROE Adj (%) 10,5 8,6 11,3
ROCE (%) 8,4 10,3 13,4
ROCE Adj(%) 10,7 10,3 13,4
ROIC (%) 6 6,5 10,6
ROIC Adj (%) 7,7 6,5 10,6
Adj earnings numbers 2019 2020 2021
EBITDA Adj 25 23 32
EBITDA Adj margin (%) 12,7 12,7 15,2
EBITA Adj 16 13 22
EBITA Adj margin (%) 8 7,4 10,4
EBIT Adj 16 13 22
EBIT Adj margin (%) 8 7,4 10,4
Pretax profit Adj 14 14 20
Net profit Adj 11 10 14
Net profit to shareholders Adj 11 10 14
Net Adj margin (%) 5,6 5,4 6,7
EURm 2019 2020e 2021e
EBITDA 21 23 32
Net financial items -2 1 -2
Paid tax -3 -4 -6
Non-cash items -25 -4 -3
Cash flow before change in WC -8 16 21
Change in WC 16 -3 -7
Operating cash flow 14 16 17
CAPEX tangible fixed assets -1 -1 -2
CAPEX intangible fixed assets 0 -1 -1
Acquisitions and disposals 0 0 0
Free cash flow 13 14 14
Dividend paid 0 0 0
Share issues and buybacks 19 0 0
Other non cash items -13 4 3
Decrease in net IB debt 8 10 10
Balance Sheet (EURm) 2019 2020 2021
Goodwill 45 45 45
Indefinite intangible assets 0 0 0
Definite intangible assets 7 6 5
Tangible fixed assets 18 16 14
Other fixed assets 18 18 18
Fixed assets 108 105 101
Inventories 39 36 42
Receivables 45 46 48
Other current assets 5 5 5
Cash and liquid assets 13 23 34
Total assets 211 216 230
Shareholders equity 108 118 132
Minority 0 0 0
Total equity 108 118 132
Long-term debt 3 3 3
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 2 2 2
Other long-term liabilities 9 9 9
Short-term debt 14 14 14
Accounts payable 25 24 28
Other current liabilities 28 24 21
Total liabilities and equity 211 216 230
Net IB debt 24 14 4
Net IB debt excl. pension debt 24 14 4
Capital invested 144 144 148
Working capital 36 39 46
EV breakdown 2019 2020 2021
Market cap. diluted (m) 168 166 166
Net IB debt Adj 24 14 4
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 192 180 170
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 88,9 84,3 93,9
Capital invested turnover (%) 136,5 125 143,7
Capital employed turnover (%) 131,3 119,5 128,9
Inventories / sales (%) 20 20,8 18,5
Customer advances / sales (%) 11 10,9 9,4
Payables / sales (%) 13,4 13,9 12,5
Working capital / sales (%) 22,3 20,9 20,4
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 22,3 11,9 2,9
Net debt / market cap (%) 20 8,4 2,3
Equity ratio (%) 51,4 54,7 57,4
Net IB debt adj. / equity (%) 22,3 11,9 2,9
Current ratio (%) 142,5 165,4 190,5
EBITDA / net interest (%) 1134,5 1338,3 1670
Net IB debt / EBITDA (%) 112,2 61,4 12
Interest cover (%) 650,7 778,2 1143,7
EURm 2019 2020e 2021e
Net IB debt / share 0,3 0,1 0
Share price 1,28 1,77 1,77
Market cap. (m) 120 166 166
Valuation 2019 2020 2021
P/E 22,3 17 11,8
EV/sales 0,98 1 0,81
EV/EBITDA 8,9 7,9 5,4
EV/EBITA 15,6 13,6 7,8
EV/EBIT 15,6 13,6 7,8
Dividend yield (%) 0 0 0
FCF yield (%) 7,5 8,6 8,7
P/BVPS 1,55 1,41 1,26
P/BVPS Adj 3,03 2,51 2,04
P/E Adj 15,4 17 11,8
EV/EBITDA Adj 7,7 7,9 5,4
EV/EBITA Adj 12,2 13,6 7,8
EV/EBIT Adj 12,2 13,6 7,8
EV/cap. employed 1,3 1,2 1
Investment ratios 2019 2020 2021
Capex / sales 0,8 1 1,2
Capex / depreciation 33,5 35,4 45,7
Capex tangibles / tangible fixed assets 7 6,7 11,7
Capex intangibles / definite intangibles 4,6 11,6 16,6
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 26,6 31,4 38,3
Shares outstanding adj. 94 94 94
Fully diluted shares Adj 94 94 94
EPS 0,08 0,1 0,15
Dividend per share Adj 0 0 0
EPS Adj 0,12 0,1 0,15
BVPS 1,15 1,25 1,4
BVPS Adj 0,59 0,7 0,87

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Main shareholders - Cavotec

Main shareholders Share capital % Voting shares % Verified
Bure Equity 36.2 % 36.2 % 31 May 2020
Fjärde AP-fonden 9.8 % 9.8 % 31 May 2020
Lannebo Fonder 8.7 % 8.7 % 31 May 2020
Fabio Cannavale 8.4 % 8.4 % 30 Apr 2020
Fondita Fonder 3.2 % 3.2 % 31 May 2020
Brevetti Stendalto 2.9 % 2.9 % 31 Mar 2020
Emma Jeppson 2.3 % 2.3 % 31 Mar 2020
PRI Pensionsgaranti 1.6 % 1.6 % 31 May 2020
Eric Isaac 1.3 % 1.3 % 31 Mar 2020
SEB Fonder 1.3 % 1.3 % 31 May 2020
Source: Holdings by Modular Finance AB

Insider list - Cavotec

Name Quantity Code Date
Patrick Mares + 1 000 BUY 19 Mar 2020
Martin Riegger + 10 000 BUY 18 Mar 2020
Patrick Mares + 1 000 BUY 17 Mar 2020
Patrick Mares + 1 000 BUY 12 Mar 2020
Patrick Mares + 1 000 BUY 10 Mar 2020
Patrick Mares + 2 000 BUY 6 Mar 2020
Patrick Mares + 1 000 BUY 5 Mar 2020
Niklas Edling + 15 000 BUY 12 Dec 2019
Giorgio Lingiardi + 26 667 GIFT 4 Dec 2019
Patrik Tigerschiöld + 500 000 BUY 8 Nov 2019

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