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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 201 193 321
Sales growth (%) -43,4 -4,1 66,7
EBITDA 45 59 129
EBITDA margin (%) 22,5 30,7 40,2
EBIT adj 32 52 121
EBIT adj margin (%) 15,8 26,9 37,7
Pretax profit 40 52 120
EPS rep 2,49 3,23 7,45
EPS growth (%) -66,4 30 130,5
EPS adj 1,96 3,23 7,45
DPS 1,74 2,26 5,21
EV/EBITDA (x) 42,5 31,8 14,3
EV/EBIT adj (x) 60,5 36,2 15,3
P/E (x) 61,2 47,7 20,7
P/E adj (x) 77,7 47,7 20,7
EV/sales (x) 9,6 9,8 5,8
FCF yield (%) -2,3 4,5 3,1
Dividend yield (%) 1,1 1,5 3,4
Net IB debt/EBITDA 0,3 -0,8 -0,6
Lease adj. FCF yield (%) -2,3 4,5 3,1
Lease adj. ND/EBITDA 0,4 -0,8 -0,6
SEKm 2020 2021e 2022e
Sales 201 193 321
COGS 0 0 0
Gross profit 201 193 321
Other operating items -156 -134 -192
EBITDA 45 59 129
Depreciation on tangibles -4 -5 -4
Depreciation on intangibles -2 -2 -4
EBITA 38 52 121
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 38 52 121
Other financial items 0 0 0
Net financial items 1 0 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 40 52 120
Tax -9 -11 -27
Net profit 31 40 93
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 31 40 93
EPS 2,49 3,23 7,45
EPS Adj 1,96 3,23 7,45
Total extraordinary items after tax 6,6 0 0
Tax rate (%) -21,4 -22 -22,3
Gross margin (%) 100 100 100
EBITDA margin (%) 22,5 30,7 40,2
EBITA margin (%) 19,1 26,9 37,7
EBIT margin (%) 19,1 26,9 37,7
Pretax margin (%) 19,7 26,9 37,4
Net margin (%) 15,5 21 29,1
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -43,4 -4,1 66,7
EBITDA growth (%) -64,2 30,8 118,5
EBIT growth (%) -67,9 35,2 133,4
Net profit growth (%) -66,4 30 130,5
EPS growth (%) -66,4 30 130,5
Profitability 2020 2021 2022
ROE (%) 13,5 17,6 34,3
ROE Adj (%) 10,7 17,6 34,3
ROCE (%) 14,5 19,5 39,2
ROCE Adj(%) 12 19,5 39,2
ROIC (%) 14,6 18,5 44,3
ROIC Adj (%) 12,1 18,5 44,3
Adj earnings numbers 2020 2021 2022
EBITDA Adj 39 59 129
EBITDA Adj margin (%) 19,2 30,7 40,2
EBITA Adj 32 52 121
EBITA Adj margin (%) 15,8 26,9 37,7
EBIT Adj 32 52 121
EBIT Adj margin (%) 15,8 26,9 37,7
Pretax profit Adj 33 52 120
Net profit Adj 25 40 93
Net profit to shareholders Adj 25 40 93
Net Adj margin (%) 12,2 21 29,1
Depreciation and amortisation -7 -7 -8
Of which leasing depreciation 0 0 0
EO items 7 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 39 59 129
EBITDA lease Adj margin (%) 19,2 30,7 40,2
Leasing payments 0 0 0
SEKm 2020 2021e 2022e
EBITDA 45 59 129
Net financial items 1 0 -1
Paid tax -35 -11 -27
Non-cash items 21 0 0
Cash flow before change in WC 33 48 101
Change in WC -44 59 -27
Operating cash flow -11 106 74
CAPEX tangible fixed assets -13 -4 -5
CAPEX intangible fixed assets -21 -15 -10
Acquisitions and disposals 0 0 0
Free cash flow -44 87 60
Dividend paid -51 -22 -28
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 53 54
Other fixed assets 2 2 2
Fixed assets 129 141 147
Inventories 79 56 83
Receivables 79 43 74
Other current assets 0 0 0
Cash and liquid assets 22 87 118
Total assets 308 326 423
Shareholders equity 221 239 304
Minority 0 0 0
Total equity 221 239 304
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 44 75
Other current liabilities 0 0 0
Total liabilities and equity 308 326 423
Net IB debt 15 -50 -81
Net IB debt excl. pension debt 15 -50 -81
Capital invested 242 195 229
Working capital 113 55 82
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1907 1929 1929
Net IB debt Adj 15 -50 -81
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 1880 1848
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 59,9 60,8 85,7
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 43,7 21,3
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 6,9 -20,8 -26,8
Net debt / market cap (%) 0,8 -2,6 -4,2
Equity ratio (%) 71,7 73,3 72
Net IB debt adj. / equity (%) 6,9 -20,8 -26,8
Current ratio (%) 396 408,6 359,5
EBITDA / net interest (%) -3614,4 0 12908,3
Net IB debt / EBITDA (%) 33,9 -84,3 -63
Interest cover (%) -3071,2 0 12108,3
Lease liability amortisation 0 0 0
Other intangible assets 73 86 91
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 -50 -81
Net IB debt / EBITDA lease Adj (%) 39,7 -84,3 -63
SEKm 2020 2021e 2022e
Shares outstanding adj. 13 13 13
Fully diluted shares Adj 13 13 13
EPS 2,49 3,23 7,45
Dividend per share Adj 1,7 2,3 5,2
EPS Adj 1,96 3,23 7,45
BVPS 17,6 19,09 24,28
BVPS Adj 11,77 12,23 16,99
Net IB debt / share 1,2 -4 -6,5
Share price 154,37 154 154
Market cap. (m) 1934 1929 1929
Valuation 2020 2021 2022
P/E 61,2 47,7 20,7
EV/sales 9,57 9,76 5,76
EV/EBITDA 42,5 31,8 14,3
EV/EBITA 50,1 36,2 15,3
EV/EBIT 50,1 36,2 15,3
Dividend yield (%) 1,1 1,5 3,4
FCF yield (%) -2,3 4,5 3,1
P/BVPS 8,65 8,07 6,34
P/BVPS Adj 12,93 12,59 9,06
P/E Adj 77,7 47,7 20,7
EV/EBITDA Adj 49,8 31,8 14,3
EV/EBITA Adj 60,5 36,2 15,3
EV/EBIT Adj 60,5 36,2 15,3
EV/cap. employed 7,5 6,8 5,4
Investment ratios 2020 2021 2022
Capex / sales 16,7 10 4,5
Capex / depreciation 494,8 267,5 180,6
Capex tangibles / tangible fixed assets 24,4 7,3 8,9
Capex intangibles / definite intangibles 28,1 17,9 10,6
Depreciation on intangibles / definite intangibles 3,2 2,9 4,7
Depreciation on tangibles / tangibles 8,4 9 6,8
Lease adj. FCF yield (%) -2,3 4,5 3,1

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Media

CTT Systems - Company presentation with CEO Torbjörn Johansson
CTT Systems - Company presentation with CEO Torbjörn Johansson (in English)

Main shareholders - CTT Systems

Main shareholders Share capital % Voting shares % Verified
Tomas Torlöf 13.4 % 13.4 % 28 Feb 2021
Rockwell Collins / Collins Aerospace 9.0 % 9.0 % 31 Dec 2020
Swedbank Robur Fonder 8.0 % 8.0 % 28 Feb 2021
ODIN Fonder 4.4 % 4.4 % 28 Feb 2021
Catron Design AB 4.3 % 4.3 % 28 Feb 2021
Nya Jorame Holding AB 4.3 % 4.3 % 28 Feb 2021
Lannebo Fonder 4.2 % 4.2 % 28 Feb 2021
If Skadeförsäkring AB 4.1 % 4.1 % 28 Feb 2021
SEB Fonder 3.9 % 3.9 % 28 Feb 2021
Avanza Pension 2.9 % 2.9 % 28 Feb 2021
Source: Holdings by Modular Finance AB

Insider list - CTT Systems

Name Quantity Code Date
Per Anders Fyrenius + 350 BUY 17 Feb 2021
Kaj Ola Häggfeldt + 450 BUY 15 Feb 2021
Kaj Ola Häggfeldt + 500 BUY 15 Feb 2021
Kaj Ola Häggfeldt + 922 BUY 12 Feb 2021
Kaj Ola Häggfeldt + 716 BUY 12 Feb 2021
Kaj Ola Häggfeldt + 1 000 BUY 12 Feb 2021
Tony Rosendal + 800 BUY 10 Sep 2020
Anna Höjer + 337 BUY 27 Aug 2020
Margaretha Rahm + 85 BUY 26 Aug 2020
Henrik Höjer + 1 000 BUY 26 Aug 2020

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