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CTT Systems

CTT Systems

Systems for climate control in airplanes

CTT Systems develops climate control products for aircraft, including dehumidification systems to prevent condensation and humidifiers for crew and passenger wellbeing. CTT’s products are offered on the Boeing 787 and 777X as well as the Airbus A380 and A350. The company holds a majority market share within both dehumidification and humidification products and is a tier-1 supplier to the Boeing 787 and 777X.

CTT holds virtually a 100% market share in airplane dehumidification systems and a big majority share of the market for humidification systems. Its dehumidification products offer large fuel and cost savings while its humidification products increase humidity levels and comfort for passengers. Should the company be able to penetrate the market for narrow-body aircraft (Boeing 737 MAX/Airbus A320Neo), it would have a strong pipeline of sales and high profitability from aftermarket sales for 20-40 years ahead. The market also offers considerable barriers to entry due to customer relationships, certifications and proven reliability among OEM suppliers.

The high profitability in CTT’s systems could attract new competitors, or result in the OEM suppliers providing their own solutions. While CTT’s relationships with Airbus and Boeing are highly valuable, they have little influence over pricing and therefore are sensitive to contract renegotiations. Almost all revenues are dollar-based, implying a strong currency sensitivity. The main risks entail a lack of market penetration due to low willingness among airliners to have dehumidifiers and humidifiers installed.

SEKm 2020 2021e 2022e
Sales 201 159 313
Sales growth (%) -43,4 -20,9 96,8
EBITDA 45 50 126
EBITDA margin (%) 22,5 31,5 40,2
EBIT adj 32 34 118
EBIT adj margin (%) 15,8 21,3 37,6
Pretax profit 40 34 115
EPS rep 2,49 2,14 7,11
EPS growth (%) -66,4 -14 232,6
EPS adj 1,96 1,76 7,11
DPS 1,74 1,5 4,98
EV/EBITDA (x) 42,5 56,8 22
EV/EBIT adj (x) 60,5 84,1 23,5
P/E (x) 61,2 105,2 31,6
P/E adj (x) 77,7 128,2 31,6
EV/sales (x) 9,6 17,9 8,8
FCF yield (%) -2,3 0,6 3,5
Dividend yield (%) 1,1 0,7 2,2
Net IB debt/EBITDA 0,3 0,4 -0,5
Lease adj. FCF yield (%) -2,3 0,6 3,5
Lease adj. ND/EBITDA 0,4 0,4 -0,5
SEKm 2020 2021e 2022e
Sales 201 159 313
COGS 0 0 0
Gross profit 201 159 313
Other operating items -156 -109 -187
EBITDA 45 50 126
Depreciation on tangibles -4 -5 -4
Depreciation on intangibles -2 -2 -4
EBITA 38 39 118
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 38 39 118
Other financial items 0 0 0
Net financial items 1 -5 -3
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 40 34 115
Tax -9 -7 -26
Net profit 31 27 89
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 31 27 89
EPS 2,49 2,14 7,11
EPS Adj 1,96 1,76 7,11
Total extraordinary items after tax 6,6 4,8 0
Tax rate (%) -21,4 -21,1 -22,3
Gross margin (%) 100 100 100
EBITDA margin (%) 22,5 31,5 40,2
EBITA margin (%) 19,1 24,3 37,6
EBIT margin (%) 19,1 24,3 37,6
Pretax margin (%) 19,7 21,4 36,7
Net margin (%) 15,5 16,9 28,5
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -43,4 -20,9 96,8
EBITDA growth (%) -64,2 10,7 151,3
EBIT growth (%) -67,9 0,5 205,2
Net profit growth (%) -66,4 -14 232,6
EPS growth (%) -66,4 -14 232,6
Profitability 2020 2021 2022
ROE (%) 13,5 12 34,2
ROE Adj (%) 10,7 9,9 34,2
ROCE (%) 14,5 14,8 39,5
ROCE Adj(%) 12 13 39,5
ROIC (%) 14,6 12,3 37
ROIC Adj (%) 12,1 10,8 37
Adj earnings numbers 2020 2021 2022
EBITDA Adj 39 45 126
EBITDA Adj margin (%) 19,2 28,5 40,2
EBITA Adj 32 34 118
EBITA Adj margin (%) 15,8 21,3 37,6
EBIT Adj 32 34 118
EBIT Adj margin (%) 15,8 21,3 37,6
Pretax profit Adj 33 29 115
Net profit Adj 25 22 89
Net profit to shareholders Adj 25 22 89
Net Adj margin (%) 12,2 13,8 28,5
Depreciation and amortisation -7 -11 -8
Of which leasing depreciation 0 0 0
EO items 7 5 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 39 45 126
EBITDA lease Adj margin (%) 19,2 28,5 40,2
Leasing payments 0 0 0
SEKm 2020 2021e 2022e
EBITDA 45 50 126
Net financial items 1 -5 -3
Paid tax -35 -7 -26
Non-cash items 21 0 0
Cash flow before change in WC 33 38 97
Change in WC -44 -9 13
Operating cash flow -11 29 110
CAPEX tangible fixed assets -13 -2 -5
CAPEX intangible fixed assets -21 -10 -8
Acquisitions and disposals 0 0 0
Free cash flow -44 17 97
Dividend paid -51 -22 -19
Share issues and buybacks 0 0 0
Other non cash items 5 0 0
Decrease in net IB debt -93 65 32
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 73 86 91
Tangible fixed assets 54 48 49
Other fixed assets 2 2 2
Fixed assets 129 129 133
Inventories 79 95 109
Receivables 79 64 78
Other current assets 0 0 0
Cash and liquid assets 22 17 96
Total assets 308 305 417
Shareholders equity 221 225 296
Minority 0 0 0
Total equity 221 225 296
Long-term debt 36 36 36
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 6 6 6
Short-term debt 1 1 1
Accounts payable 44 37 78
Other current liabilities 0 0 0
Total liabilities and equity 308 305 417
Net IB debt 15 20 -59
Net IB debt excl. pension debt 15 20 -59
Capital invested 242 251 243
Working capital 113 122 109
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1907 2819 2819
Net IB debt Adj 15 20 -59
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 1922 2839 2760
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 59,9 51,9 86,6
Capital invested turnover (%) 97,2 88,1 151,3
Capital employed turnover (%) 75,8 72,2 104,1
Inventories / sales (%) 37,9 34,9 21,7
Customer advances / sales (%) 0 0 0
Payables / sales (%) 31,3 22,9 18,6
Working capital / sales (%) 45,5 74,2 37,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 6,9 8,7 -20
Net debt / market cap (%) 0,8 0,7 -2,1
Equity ratio (%) 71,7 73,9 70,9
Net IB debt adj. / equity (%) 6,9 8,7 -20
Current ratio (%) 396 466,6 357,2
EBITDA / net interest (%) -3614,4 1087,3 4189,5
Net IB debt / EBITDA (%) 33,9 39,4 -47
Interest cover (%) -3071,2 838,4 3922,8
Lease liability amortisation 0 0 0
Other intangible assets 73 79 83
Right-of-use asset 0 0 0
Total other fixed assets 2 2 2
Leasing liability 0 0 0
Total other long-term liabilities 6 6 6
Net IB debt excl. leasing 15 20 -59
Net IB debt / EBITDA lease Adj (%) 39,7 43,5 -47
SEKm 2020 2021e 2022e
Shares outstanding adj. 13 13 13
Fully diluted shares Adj 13 13 13
EPS 2,49 2,14 7,11
Dividend per share Adj 1,7 1,5 5
EPS Adj 1,96 1,76 7,11
BVPS 17,6 18 23,61
BVPS Adj 11,77 11,66 16,99
Net IB debt / share 1,2 1,6 -4,7
Share price 154,37 225 225
Market cap. (m) 1934 2819 2819
Valuation 2020 2021 2022
P/E 61,2 105,2 31,6
EV/sales 9,57 17,87 8,83
EV/EBITDA 42,5 56,8 22
EV/EBITA 50,1 73,6 23,5
EV/EBIT 50,1 73,6 23,5
Dividend yield (%) 1,1 0,7 2,2
FCF yield (%) -2,3 0,6 3,5
P/BVPS 8,65 12,5 9,53
P/BVPS Adj 12,93 19,3 13,24
P/E Adj 77,7 128,2 31,6
EV/EBITDA Adj 49,8 62,8 22
EV/EBITA Adj 60,5 84,1 23,5
EV/EBIT Adj 60,5 84,1 23,5
EV/cap. employed 7,5 10,8 8,3
Investment ratios 2020 2021 2022
Capex / sales 16,7 7,5 4
Capex / depreciation 494,8 104 156,3
Capex tangibles / tangible fixed assets 24,4 3,3 9,6
Capex intangibles / definite intangibles 28,1 13 9,4
Depreciation on intangibles / definite intangibles 3,2 4,9 5,2
Depreciation on tangibles / tangibles 8,4 15,8 7,6
Lease adj. FCF yield (%) -2,3 0,6 3,5

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CTT Systems - Company presentation with CEO Torbjörn Johansson
CTT Systems - Company presentation with CEO Torbjörn Johansson

Main shareholders - CTT Systems

Main shareholders Share capital % Voting shares % Verified
Tomas Torlöf 13.4 % 13.4 % 30 Sep 2021
Rockwell Collins / Collins Aerospace 9.0 % 9.0 % 30 Sep 2021
SEB Fonder 8.8 % 8.8 % 19 Oct 2021
ODIN Fonder 6.7 % 6.7 % 30 Sep 2021
Catron Design AB 4.3 % 4.3 % 30 Sep 2021
Nya Jorame Holding AB 4.3 % 4.3 % 30 Sep 2021
If Skadeförsäkring AB 4.1 % 4.1 % 30 Sep 2021
Allianz Global Investors 3.3 % 3.3 % 31 Aug 2021
Christer Torlöf 2.1 % 2.1 % 30 Sep 2021
Nordnet Pensionsförsäkring 2.0 % 2.0 % 30 Sep 2021
Source: Holdings by Modular Finance AB

Insider list - CTT Systems

Name Quantity Code Date
Anna Höjer - 1 500 SELL 20 Sep 2021
Per Gustafsson + 123 BUY 28 May 2021
Hans Torbjörn Erland Johansson + 1 181 BUY 28 May 2021
Torleif Nilsson + 262 BUY 28 May 2021
Maria Vester + 206 BUY 28 May 2021
Stefan Hammar + 239 BUY 28 May 2021
Daniel Ekstrand + 311 BUY 28 May 2021
Kaj Ola Häggfeldt + 141 BUY 28 May 2021
Peter Landquist + 378 BUY 28 May 2021
Hans Torbjörn Erland Johansson - 5 000 SELL 29 Mar 2021

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