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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 2018 2019e 2020e
Sales 197 198 209
Sales growth (%) -7,3 0,4 5,5
EBITDA -9 19 27
EBITDA margin (%) -4,7 9,8 13
EBIT adj 4 14 18
EBIT adj margin (%) 1,9 7 8,8
Pretax profit -15 11 16
EPS rep -0,23 0,09 0,13
EPS growth (%) 42 136,8 47,2
EPS adj -0,01 0,12 0,13
DPS 0 0 0
EV/EBITDA (x) -14,5 10,4 6,8
EV/EBIT adj (x) 36,2 14,5 10
P/E (x) -5,5 19,9 13,5
P/E adj (x) -117,5 14 13,5
EV/sales (x) 0,7 1 0,9
FCF yield (%) -7,6 7,1 13,4
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -3,4 2,1 0,9
EURm 2018 2019e 2020e
Sales 197 198 209
COGS 0 0 0
Gross profit 197 198 209
Other operating items -206 -178 -182
EBITDA -9 19 27
Depreciation on tangibles -5 -5 -4
Depreciation on intangibles 0 0 0
EBITA -14 10 18
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -14 10 18
Other financial items 0 2 0
Net financial items -1 0 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -15 11 16
Tax -3 -3 -4
Net profit -18 8 12
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -18 8 12
EPS -0,23 0,09 0,13
EPS Adj -0,01 0,12 0,13
Total extraordinary items after tax -17,6 -3,4 0
Tax rate (%) 20,3 -25,3 -27
Gross margin (%) 100 100 100
EBITDA margin (%) -4,7 9,8 13
EBITA margin (%) -7 5,3 8,8
EBIT margin (%) -7 5,3 8,8
Pretax margin (%) -7,8 5,5 7,8
Net margin (%) -9,4 4,1 5,7
Growth rates Y/Y 2018 2019 2020
Sales growth (%) -7,3 0,4 5,5
EBITDA growth (%) 26,8 310,1 40,4
EBIT growth (%) 22,8 175,2 75
Net profit growth (%) 41,5 143,7 47,2
EPS growth (%) 42 136,8 47,2
Profitability 2018 2019 2020
ROE (%) -18 7,8 10,4
ROE Adj (%) -0,8 11 10,4
ROCE (%) -8,8 8 10,5
ROCE Adj(%) 2,7 10,1 10,5
ROIC (%) -11,7 4,9 8,3
ROIC Adj (%) 3,1 6,5 8,3
Adj earnings numbers 2018 2019 2020
EBITDA Adj 8 23 27
EBITDA Adj margin (%) 4,2 11,5 13
EBITA Adj 4 14 18
EBITA Adj margin (%) 1,9 7 8,8
EBIT Adj 4 14 18
EBIT Adj margin (%) 1,9 7 8,8
Pretax profit Adj 2 14 16
Net profit Adj -1 11 12
Net profit to shareholders Adj -1 11 12
Net Adj margin (%) -0,4 5,8 5,7
EURm 2018 2019e 2020e
EBITDA -9 19 27
Net financial items -1 0 -2
Paid tax -3 -3 -4
Non-cash items 30 -9 -2
Cash flow before change in WC 16 8 18
Change in WC -15 6 6
Operating cash flow 1 14 25
CAPEX tangible fixed assets -7 -2 -2
CAPEX intangible fixed assets -2 -1 -1
Acquisitions and disposals 0 0 0
Free cash flow -8 11 22
Dividend paid -1 0 0
Share issues and buybacks 0 19 0
Other non cash items -15 -30 2
Decrease in net IB debt -12 -9 17
Balance Sheet (EURm) 2018 2019 2020
Goodwill 45 45 45
Indefinite intangible assets 0 0 0
Definite intangible assets 8 7 5
Tangible fixed assets 20 20 21
Other fixed assets 18 18 18
Fixed assets 92 110 109
Inventories 39 44 39
Receivables 72 57 56
Other current assets 6 6 6
Cash and liquid assets 21 19 37
Total assets 230 235 247
Shareholders equity 100 108 120
Minority 0 0 0
Total equity 100 108 120
Long-term debt 49 18 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 4 22 4
Accounts payable 27 28 30
Other current liabilities 38 28 26
Total liabilities and equity 244 211 230
Net IB debt 32 40 23
Net IB debt excl. pension debt 32 40 23
Capital invested 153 165 157
Working capital 61 55 48
EV breakdown 2018 2019 2020
Market cap. diluted (m) 102 160 160
Net IB debt Adj 32 40 23
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 134 200 183
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 89,4 85 86,6
Capital invested turnover (%) 137,4 124,7 129,7
Capital employed turnover (%) 128,8 123,3 120
Inventories / sales (%) 19,4 21 19,8
Customer advances / sales (%) 8,4 10,4 8,5
Payables / sales (%) 15,4 13,8 13,7
Working capital / sales (%) 27,1 29,2 24,6
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) 31,7 37,3 19,4
Net debt / market cap (%) 18,5 25,2 14,5
Equity ratio (%) 43,5 46 48,7
Net IB debt adj. / equity (%) 31,7 37,3 19,4
Current ratio (%) 198,1 154,9 220,5
EBITDA / net interest (%) -491,3 978,9 1358,2
Net IB debt / EBITDA (%) -343,9 208,3 85,7
Interest cover (%) -740,5 528 913,2
EURm 2018 2019e 2020e
Net IB debt / share 0,4 0,4 0,2
Share price 2,17 1,7 1,7
Market cap. (m) 172 160 160
Valuation 2018 2019 2020
P/E -5,5 19,9 13,5
EV/sales 0,68 1,01 0,88
EV/EBITDA -14,5 10,4 6,8
EV/EBITA -9,6 19,2 10
EV/EBIT -9,6 19,2 10
Dividend yield (%) 0 0 0
FCF yield (%) -7,6 7,1 13,4
P/BVPS 1,02 1,48 1,33
P/BVPS Adj 2,19 2,83 2,29
P/E Adj -117,5 14 13,5
EV/EBITDA Adj 16 8,8 6,8
EV/EBITA Adj 36,2 14,5 10
EV/EBIT Adj 36,2 14,5 10
EV/cap. employed 0,9 1,2 1
Investment ratios 2018 2019 2020
Capex / sales 4,7 1,3 1,6
Capex / depreciation 197,9 56,5 75,9
Capex tangibles / tangible fixed assets 37,2 8,9 11,2
Capex intangibles / definite intangibles 21,2 12,1 21,3
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 23,3 22,8 21,4
Shares outstanding adj. 79 94 94
Fully diluted shares Adj 79 94 94
EPS -0,23 0,09 0,13
Dividend per share Adj 0 0 0
EPS Adj -0,01 0,12 0,13
BVPS 1,26 1,15 1,28
BVPS Adj 0,59 0,6 0,74

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Main shareholders - Cavotec

Main shareholders Share capital % Voting shares % Verified
Bure Equity 27.1 % 27.1 % 31 Oct 2019
Fjärde AP-fonden 9.8 % 9.8 % 31 Oct 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 Oct 2019
Fondita Fonder 3.5 % 3.5 % 31 Aug 2019
Brevetti Stendalto 3.0 % 3.0 % 31 Jan 2019
Catella Fonder 2.6 % 2.6 % 31 Oct 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
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
Mikael Norin + 34 505 BUY 15 Jan 2019
Patrik tigerschiöld + 30 000 BUY 14 Jan 2019

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