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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 268 285 301
Sales growth (%) 6 6,4 5,6
EBITDA 24 34 39
EBITDA margin (%) 8,9 11,8 13
EBIT adj 11 21 26
EBIT adj margin (%) 4 7,2 8,7
Pretax profit 11 21 26
EPS rep 0,19 0,37 0,47
EPS growth (%) -68 91,9 26,9
EPS adj 0,19 0,37 0,47
DPS 0,2 0,3 0,35
EV/EBITDA (x) 11,2 7,8 6,5
EV/EBIT adj (x) 24,7 12,7 9,8
P/E (x) 29,3 15,3 12
P/E adj (x) 29,3 15,3 12
EV/sales (x) 1 0,9 0,8
FCF yield (%) 8,4 10,2 12,2
Dividend yield (%) 3,6 5,4 6,3
Net IB debt/EBITDA 0,9 0,5 0,3
SEKm 2019 2020e 2021e
Sales 268 285 301
COGS -29 -30 -32
Gross profit 240 255 270
Other operating items -216 -221 -231
EBITDA 24 34 39
Depreciation on tangibles -2 -2 -2
Depreciation on intangibles 0 0 0
EBITA 11 21 26
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 11 21 26
Other financial items 0 0 0
Net financial items 0 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 11 21 26
Tax -2 -5 -6
Net profit 8 16 20
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 8 16 20
EPS 0,19 0,37 0,47
EPS Adj 0,19 0,37 0,47
Total extraordinary items after tax 0 0 0
Tax rate (%) -22 -22 -22
Gross margin (%) 89,4 89,4 89,5
EBITDA margin (%) 8,9 11,8 13
EBITA margin (%) 4 7,2 8,7
EBIT margin (%) 4 7,2 8,7
Pretax margin (%) 4 7,2 8,6
Net margin (%) 3,1 5,6 6,7
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 6 6,4 5,6
EBITDA growth (%) -16,5 41,2 16,7
EBIT growth (%) -56,5 91 26,8
Net profit growth (%) -67,3 91,9 26,9
EPS growth (%) -68 91,9 26,9
Profitability 2019 2020 2021
ROE (%) 9,8 18,7 21,8
ROE Adj (%) 9,8 18,7 21,8
ROCE (%) 10,2 17 20,4
ROCE Adj(%) 10,2 17 20,4
ROIC (%) 8,9 15 18,7
ROIC Adj (%) 8,9 15 18,7
Adj earnings numbers 2019 2020 2021
EBITDA Adj 24 34 39
EBITDA Adj margin (%) 8,9 11,8 13
EBITA Adj 11 21 26
EBITA Adj margin (%) 4 7,2 8,7
EBIT Adj 11 21 26
EBIT Adj margin (%) 4 7,2 8,7
Pretax profit Adj 11 21 26
Net profit Adj 8 16 20
Net profit to shareholders Adj 8 16 20
Net Adj margin (%) 3,1 5,6 6,7
SEKm 2019 2020e 2021e
EBITDA 24 34 39
Net financial items 0 0 0
Paid tax -2 -5 -6
Non-cash items 0 0 0
Cash flow before change in WC 21 29 33
Change in WC 9 -1 0
Operating cash flow 30 28 33
CAPEX tangible fixed assets -3 -3 -3
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -7 0 0
Free cash flow 20 25 30
Dividend paid -15 -9 -13
Share issues and buybacks 0 0 0
Other non cash items -24 0 0
Decrease in net IB debt -29 5 6
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 3 4 5
Other fixed assets 4 4 4
Fixed assets 98 100 101
Inventories 0 0 0
Receivables 65 68 72
Other current assets 0 0 0
Cash and liquid assets 13 18 24
Total assets 176 186 197
Shareholders equity 82 89 97
Minority 0 0 0
Total equity 82 89 97
Long-term debt 1 1 1
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 1 1 1
Short-term debt 9 9 9
Accounts payable 57 60 63
Other current liabilities 0 0 0
Total liabilities and equity 154 160 176
Net IB debt 23 17 12
Net IB debt excl. pension debt 23 17 12
Capital invested 106 108 110
Working capital 7 9 9
EV breakdown 2019 2020 2021
Market cap. diluted (m) 244 244 244
Net IB debt Adj 23 17 12
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 267 262 256
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 160 157,8 157,6
Capital invested turnover (%) 283,9 266,6 276,7
Capital employed turnover (%) 254,5 235,9 234,7
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,8 20,5 20,4
Working capital / sales (%) 4,5 2,8 2,9
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 27,5 19,5 12,3
Net debt / market cap (%) 8,6 7,1 4,8
Equity ratio (%) 46,7 48,1 49,1
Net IB debt adj. / equity (%) 27,5 19,5 12,3
Current ratio (%) 101,6 109,6 116,7
EBITDA / net interest (%) 23790,3 33592,1 39216
Net IB debt / EBITDA (%) 94,8 51,9 30,2
Interest cover (%) 10787,3 20608 26132
SEKm 2019 2020e 2021e
Shares outstanding adj. 44 44 44
Fully diluted shares Adj 44 44 44
EPS 0,19 0,37 0,47
Dividend per share Adj 0,2 0,3 0,3
EPS Adj 0,19 0,37 0,47
BVPS 1,88 2,05 2,21
BVPS Adj 0,37 0,54 0,7
Net IB debt / share 0,5 0,4 0,3
Share price 6,04 5,6 5,6
Market cap. (m) 263 244 244
Valuation 2019 2020 2021
P/E 29,3 15,3 12
EV/sales 0,99 0,92 0,85
EV/EBITDA 11,2 7,8 6,5
EV/EBITA 24,7 12,7 9,8
EV/EBIT 24,7 12,7 9,8
Dividend yield (%) 3,6 5,4 6,3
FCF yield (%) 8,4 10,2 12,2
P/BVPS 2,98 2,73 2,53
P/BVPS Adj 15,04 10,39 7,95
P/E Adj 29,3 15,3 12
EV/EBITDA Adj 11,2 7,8 6,5
EV/EBITA Adj 24,7 12,7 9,8
EV/EBIT Adj 24,7 12,7 9,8
EV/cap. employed 2,3 2,1 1,9
Investment ratios 2019 2020 2021
Capex / sales 1 1 1
Capex / depreciation 137,3 142,6 143,5
Capex tangibles / tangible fixed assets 92,8 76,2 64,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 67,6 53,4 45,1

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 9.6 % 9.6 % 31 Dec 2019
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 % 31 Dec 2019
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
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
Johan Westman + 5 000 BUY 7 Nov 2019
Johan Westman + 8 505 BUY 3 Jun 2019
Johan Westman + 10 000 BUY 27 Feb 2018
Johan Westman + 3 932 BUY 25 Jan 2018

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