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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 198 209 221
Sales growth (%) 0,7 5,3 5,7
EBITDA 20 27 32
EBITDA margin (%) 10 13,1 14,4
EBIT adj 14 18 23
EBIT adj margin (%) 7,2 8,8 10,3
Pretax profit 11 16 21
EPS rep 0,09 0,13 0,16
EPS growth (%) 137,4 46,3 26,9
EPS adj 0,12 0,13 0,16
DPS 0 0 0
EV/EBITDA (x) 11 7,4 5,9
EV/EBIT adj (x) 15,3 10,9 8,3
P/E (x) 21,8 14,9 11,7
P/E adj (x) 15,4 14,9 11,7
EV/sales (x) 1,1 1 0,9
FCF yield (%) 6,3 12,2 10,1
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2 0,8 0,3
EURm 2019 2020e 2021e
Sales 198 209 221
COGS 0 0 0
Gross profit 198 209 221
Other operating items -178 -182 -189
EBITDA 20 27 32
Depreciation on tangibles -5 -4 -4
Depreciation on intangibles 0 0 0
EBITA 11 18 23
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 11 18 23
Other financial items 2 0 0
Net financial items 0 -2 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 11 16 21
Tax -3 -4 -6
Net profit 8 12 15
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 8 12 15
EPS 0,09 0,13 0,16
EPS Adj 0,12 0,13 0,16
Total extraordinary items after tax -3,4 0 0
Tax rate (%) -27,5 -27 -27
Gross margin (%) 100 100 100
EBITDA margin (%) 10 13,1 14,4
EBITA margin (%) 5,5 8,8 10,3
EBIT margin (%) 5,5 8,8 10,3
Pretax margin (%) 5,7 7,9 9,4
Net margin (%) 4,1 5,7 6,9
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 0,7 5,3 5,7
EBITDA growth (%) 315,5 37,6 16,2
EBIT growth (%) 178,8 68,3 23,5
Net profit growth (%) 144,4 46,2 26,9
EPS growth (%) 137,4 46,3 26,9
Profitability 2019 2020 2021
ROE (%) 7,9 10,5 11,9
ROE Adj (%) 11,1 10,5 11,9
ROCE (%) 8,3 10,6 12,1
ROCE Adj(%) 10,4 10,6 12,1
ROIC (%) 5 8,4 10,5
ROIC Adj (%) 6,5 8,4 10,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 23 27 32
EBITDA Adj margin (%) 11,7 13,1 14,4
EBITA Adj 14 18 23
EBITA Adj margin (%) 7,2 8,8 10,3
EBIT Adj 14 18 23
EBIT Adj margin (%) 7,2 8,8 10,3
Pretax profit Adj 15 16 21
Net profit Adj 12 12 15
Net profit to shareholders Adj 12 12 15
Net Adj margin (%) 5,8 5,7 6,9
EURm 2019 2020e 2021e
EBITDA 20 27 32
Net financial items 0 -2 -2
Paid tax -3 -4 -6
Non-cash items -9 -2 0
Cash flow before change in WC 8 19 24
Change in WC 6 7 -3
Operating cash flow 14 25 22
CAPEX tangible fixed assets -2 -2 -2
CAPEX intangible fixed assets -1 -1 -1
Acquisitions and disposals 0 0 0
Free cash flow 11 22 18
Dividend paid 0 0 0
Share issues and buybacks 19 0 0
Other non cash items -30 2 0
Decrease in net IB debt -9 17 13
Balance Sheet (EURm) 2019 2020 2021
Goodwill 45 45 45
Indefinite intangible assets 0 0 0
Definite intangible assets 7 5 3
Tangible fixed assets 20 21 21
Other fixed assets 18 18 18
Fixed assets 110 109 108
Inventories 44 39 41
Receivables 57 56 59
Other current assets 6 6 6
Cash and liquid assets 19 37 50
Total assets 235 247 264
Shareholders equity 108 120 135
Minority 0 0 0
Total equity 108 120 135
Long-term debt 18 36 36
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 22 4 4
Accounts payable 28 30 32
Other current liabilities 28 26 26
Total liabilities and equity 211 230 235
Net IB debt 40 23 10
Net IB debt excl. pension debt 40 23 10
Capital invested 165 157 159
Working capital 55 48 51
EV breakdown 2019 2020 2021
Market cap. diluted (m) 178 178 178
Net IB debt Adj 40 23 10
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 219 201 188
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 85,2 86,6 86,4
Capital invested turnover (%) 124,9 129,7 139,5
Capital employed turnover (%) 123,6 120 117,6
Inventories / sales (%) 20,9 19,8 18,2
Customer advances / sales (%) 10,4 8,5 8
Payables / sales (%) 13,8 13,7 13,9
Working capital / sales (%) 29,2 24,7 22,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 37,3 19,2 7,5
Net debt / market cap (%) 33,6 13 5,7
Equity ratio (%) 46 48,7 51,3
Net IB debt adj. / equity (%) 37,3 19,2 7,5
Current ratio (%) 155 220,8 241,6
EBITDA / net interest (%) 1004,4 1365,8 1670,2
Net IB debt / EBITDA (%) 203,3 84,6 31,9
Interest cover (%) 553,5 920,8 1196,5
EURm 2019 2020e 2021e
Net IB debt / share 0,4 0,2 0,1
Share price 1,28 1,9 1,9
Market cap. (m) 120 178 178
Valuation 2019 2020 2021
P/E 21,8 14,9 11,7
EV/sales 1,1 0,96 0,85
EV/EBITDA 11 7,4 5,9
EV/EBITA 20 10,9 8,3
EV/EBIT 20 10,9 8,3
Dividend yield (%) 0 0 0
FCF yield (%) 6,3 12,2 10,1
P/BVPS 1,65 1,48 1,32
P/BVPS Adj 3,15 2,54 2,05
P/E Adj 15,4 14,9 11,7
EV/EBITDA Adj 9,4 7,4 5,9
EV/EBITA Adj 15,3 10,9 8,3
EV/EBIT Adj 15,3 10,9 8,3
EV/cap. employed 1,3 1,1 1
Investment ratios 2019 2020 2021
Capex / sales 1,3 1,6 1,6
Capex / depreciation 56,7 75,9 80,3
Capex tangibles / tangible fixed assets 8,9 11,2 11,4
Capex intangibles / definite intangibles 12,2 21,3 33,5
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 22,8 21,4 20,7
Shares outstanding adj. 94 94 94
Fully diluted shares Adj 94 94 94
EPS 0,09 0,13 0,16
Dividend per share Adj 0 0 0
EPS Adj 0,12 0,13 0,16
BVPS 1,15 1,28 1,44
BVPS Adj 0,6 0,75 0,93

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Main shareholders - Cavotec

Main shareholders Share capital % Voting shares % Verified
Bure Equity 27.1 % 27.1 % 31 Dec 2019
Fjärde AP-fonden 9.8 % 9.8 % 31 Dec 2019
Fabio Cannavale 8.1 % 8.1 % 2 May 2019
LCL Life & Pension Ltd 6.4 % 6.4 % 2 May 2019
Lannebo Fonder 5.4 % 5.4 % 31 Dec 2019
Fondita Fonder 3.4 % 3.4 % 31 Dec 2019
Brevetti Stendalto 3.0 % 3.0 % 31 Jan 2019
Catella Fonder 2.6 % 2.6 % 31 Dec 2019
Emma Jeppson 2.3 % 2.3 % 31 Jan 2019
Peter Brandel 1.9 % 1.9 % 2 May 2019
Source: Holdings by Modular Finance AB

Insider list - Cavotec

Name Quantity Code Date
Niklas Edling + 15 000 BUY 12 Dec 2019
Giorgio Lingiardi + 26 667 GIFT 4 Dec 2019
Patrik Tigerschiöld + 500 000 BUY 8 Nov 2019
Niklas Edling + 6 000 BUY 23 May 2019
Niklas Edling + 54 000 BUY 1 Apr 2019
Martin Riegger + 1 961 BUY 22 Mar 2019
Martin Riegger + 3 000 BUY 22 Mar 2019
Juergen Strommer + 8 500 BUY 21 Mar 2019
Mikael Norin + 28 186 BUY 12 Mar 2019
Mikael Norin + 21 812 BUY 11 Mar 2019

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