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Eurocon

Eurocon

Engineering consultancy with broad competence

Eurocon Consulting, a consulting service company founded in 1990, provides the forestry, energy, mining, and chemistry markets with engineering services. The offering covers the whole life cycle of customer investment, from preliminary study to implementation, deployment and maintenance. The customers are almost exclusively major industrial companies and municipalities. The company’s main vision is to be the obvious choice for customers and employees who want to build and optimize for a sustainable future.

Eurocon has a solid financial position with stable cash flows. This positions Eurocon for further acquisitions, which in turn will generate most of the firm’s future growth. Together with its consultancy offering, Eurocon also provides customers with its developed software Sitebase. The software scales well with increased volumes and can hence strengthen the company’s operating margins.

The markets that Eurocon is exposed to are cyclical markets such as mining and forestry, and hence, Eurocon is dependent on investments in these markets. As other consulting businesses are experiencing as well, hiring consultants is hard, and especially within engineering. As the company grows, keeping competent and experienced employees is essential.

SEKm 2019 2020e 2021e
Sales 261 263 278
Sales growth (%) 3,3 0,6 6
EBITDA 18 28 34
EBITDA margin (%) 6,8 10,8 12,2
EBIT adj 5 15 21
EBIT adj margin (%) 2 5,9 7,5
Pretax profit 6 15 21
EPS rep 0,12 0,27 0,37
EPS growth (%) -80,3 131,1 34,4
EPS adj 0,12 0,27 0,37
DPS 0,1 0,2 0,25
EV/EBITDA (x) 15,3 5,8 4,7
EV/EBIT adj (x) 52 10,7 7,6
P/E (x) 48,5 12,1 9
P/E adj (x) 48,5 12,1 9
EV/sales (x) 1 0,6 0,6
FCF yield (%) 3,2 10,4 18,9
Dividend yield (%) 1,8 6,1 7,6
Net IB debt/EBITDA 1,6 0,7 0,4
SEKm 2019 2020e 2021e
Sales 261 263 278
COGS -28 -24 -25
Gross profit 234 239 254
Other operating items -216 -211 -220
EBITDA 18 28 34
Depreciation on tangibles 0 -2 -2
Depreciation on intangibles 0 0 0
EBITA 5 15 21
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 5 15 21
Other financial items 0 0 0
Net financial items 1 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 6 15 21
Tax -1 -3 -5
Net profit 5 12 16
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 5 12 16
EPS 0,12 0,27 0,37
EPS Adj 0,12 0,27 0,37
Total extraordinary items after tax 0 0 0
Tax rate (%) -21,1 -22 -22
Gross margin (%) 89,4 91 91,2
EBITDA margin (%) 6,8 10,8 12,2
EBITA margin (%) 2 5,9 7,5
EBIT margin (%) 2 5,9 7,5
Pretax margin (%) 2,4 5,9 7,4
Net margin (%) 1,9 4,6 5,8
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 3,3 0,6 6
EBITDA growth (%) -37,4 59,6 18,9
EBIT growth (%) -78,9 195,6 34,2
Net profit growth (%) -80,3 138,1 34,4
EPS growth (%) -80,3 131,1 34,4
Profitability 2019 2020 2021
ROE (%) 5,8 13,4 16,6
ROE Adj (%) 5,8 13,4 16,6
ROCE (%) 4,8 12,2 15,4
ROCE Adj(%) 4,8 12,2 15,4
ROIC (%) 4,2 10,5 14
ROIC Adj (%) 4,2 10,5 14
Adj earnings numbers 2019 2020 2021
EBITDA Adj 18 28 34
EBITDA Adj margin (%) 6,8 10,8 12,2
EBITA Adj 5 15 21
EBITA Adj margin (%) 2 5,9 7,5
EBIT Adj 5 15 21
EBIT Adj margin (%) 2 5,9 7,5
Pretax profit Adj 6 15 21
Net profit Adj 5 12 16
Net profit to shareholders Adj 5 12 16
Net Adj margin (%) 1,9 4,6 5,8
SEKm 2019 2020e 2021e
EBITDA 18 28 34
Net financial items 1 0 0
Paid tax -1 -3 -5
Non-cash items 0 0 0
Cash flow before change in WC 18 25 29
Change in WC -4 0 1
Operating cash flow 6 25 30
CAPEX tangible fixed assets 9 -3 -3
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -7 -7 0
Free cash flow 8 15 27
Dividend paid -15 -4 -9
Share issues and buybacks 0 0 0
Other non cash items -17 7 0
Decrease in net IB debt -35 7 7
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 62 62 62
Indefinite intangible assets 0 0 0
Definite intangible assets 4 4 4
Tangible fixed assets 2 3 4
Other fixed assets 2 2 2
Fixed assets 95 95 96
Inventories 0 0 0
Receivables 73 73 78
Other current assets 0 0 0
Cash and liquid assets 10 16 24
Total assets 177 185 198
Shareholders equity 86 93 101
Minority 0 0 0
Total equity 85 93 100
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 2 2 2
Short-term debt 13 13 13
Accounts payable 53 53 58
Other current liabilities 0 0 0
Total liabilities and equity 177 185 198
Net IB debt 28 21 14
Net IB debt excl. pension debt 28 21 14
Capital invested 115 116 116
Working capital 20 20 19
EV breakdown 2019 2020 2021
Market cap. diluted (m) 244 145 145
Net IB debt Adj 28 21 14
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 272 166 159
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 155,1 145 145,3
Capital invested turnover (%) 263,8 227,6 240,3
Capital employed turnover (%) 241,2 207,1 207
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,5 20 20
Working capital / sales (%) 7,1 7,8 7,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 33,1 22,9 14
Net debt / market cap (%) 10,9 14,7 9,7
Equity ratio (%) 48,1 50,2 50,5
Net IB debt adj. / equity (%) 33,1 22,9 14
Current ratio (%) 107,7 116,6 123,3
EBITDA / net interest (%) -1552,9 28460,3 33845,8
Net IB debt / EBITDA (%) 158 74,9 41,3
Interest cover (%) -456 15476,3 20761,8
SEKm 2019 2020e 2021e
Shares outstanding adj. 43 44 44
Fully diluted shares Adj 43 44 44
EPS 0,12 0,27 0,37
Dividend per share Adj 0,1 0,2 0,3
EPS Adj 0,12 0,27 0,37
BVPS 2 2,12 2,28
BVPS Adj 0,46 0,62 0,78
Net IB debt / share 0,7 0,5 0,3
Share price 6,04 3,28 3,28
Market cap. (m) 259 145 145
Valuation 2019 2020 2021
P/E 48,5 12,1 9
EV/sales 1,04 0,63 0,57
EV/EBITDA 15,3 5,8 4,7
EV/EBITA 52 10,7 7,6
EV/EBIT 52 10,7 7,6
Dividend yield (%) 1,8 6,1 7,6
FCF yield (%) 3,2 10,4 18,9
P/BVPS 2,85 1,55 1,44
P/BVPS Adj 12,45 5,3 4,18
P/E Adj 48,5 12,1 9
EV/EBITDA Adj 15,3 5,8 4,7
EV/EBITA Adj 52 10,7 7,6
EV/EBIT Adj 52 10,7 7,6
EV/cap. employed 2,2 1,3 1,1
Investment ratios 2019 2020 2021
Capex / sales -3,3 1 1
Capex / depreciation N/A 131,3 132,6
Capex tangibles / tangible fixed assets -388,1 92 78,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 0 70,1 59,4

Equity research

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Media

Eurocon - Interview with CEO Peter Johansson (in Swedish)
Eurocon - Company presentation with CEO Peter Johansson (in Swedish)

Main shareholders - Eurocon

Main shareholders Share capital % Voting shares % Verified
Ronald Andersson 10.2 % 10.2 % 31 Dec 2019
Nordea Fonder 9.5 % 9.5 % 29 Feb 2020
Avanza Pension 7.9 % 7.9 % 31 Dec 2019
Christer Svanholm 4.2 % 4.2 % 31 Dec 2019
Ulf Rask 4.2 % 4.2 % 31 Dec 2019
KLT Holding AB 4.1 % 4.1 % 31 Dec 2019
Fredrik Forsgren 4.1 % 4.1 % 31 Dec 2019
Johan Westman 3.8 % 3.8 % 6 Mar 2020
Mikael Lindqvist 2.6 % 2.6 % 31 Dec 2019
Peter Johansson 2.6 % 2.6 % 5 Dec 2019
Source: Holdings by Modular Finance AB

Insider list - Eurocon

Name Quantity Code Date
Johan Westman + 4 000 BUY 6 Mar 2020
Johan Westman + 3 100 BUY 4 Mar 2020
Johan Westman + 3 400 BUY 4 Mar 2020
Johan Westman + 3 000 BUY 24 Feb 2020
Gunnar Peter Johansson + 3 309 BUY 5 Dec 2019
Gunnar Peter Johansson + 5 691 BUY 5 Dec 2019
Rickard Karl Gustav Hellekant + 20 000 BUY 2 Dec 2019
Per Christer Svanholm + 5 000 BUY 8 Nov 2019
Johan Westman + 4 243 BUY 8 Nov 2019
Johan Westman + 63 BUY 7 Nov 2019

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