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MT Højgaard Holding

MT Højgaard Holding

Full-service construction consortium

MT Højgaard Holding (MTHH) dates back to 1918, and today is a full-service construction consortium that solves different types of tasks within its four subsidiary companies. The holding company owns six segment companies that are involved in the stages of project development, design and engineering, construction, civil works, renovations and other operations. With ~93% of revenue generated in Denmark, the company employs ~1,100 FTEs and is one of the three largest construction companies in Denmark.

We expect the Danish infrastructure development market to be saturated in the mid-term, but in a decentralized competitive market, MTHH has opportunities to win projects. Our pipeline infrastructure model suggests signs of saturation, but MTHH aims to have a steady build-up of its order backlog, which will result in flat revenue growth, but the aim is 2022 4% EBIT margin. This can be achieved by 1) decentralisation, 2) bottom-up responsibility, 3) more external collaboration, 4) innovation and 5) ESG principles for small/medium projects.

Threats of project delays and contractor and legal issues would hurt the performance. If competitors begin to pose a larger threat, issues could arise relating to the workforce or project completions, which would challenge the fundamental investment case. Several negative EBIT projects are expected to be completed in the near term. However, after several years of a boom cycle, history shows a bust cycle or period of saturation is pending. Therefore, the company is exposed to a cyclical risk of lower order intake, which has been challenging in the past.

DKKm 2020 2021e 2022e
Sales 5951 6796 7492
Sales growth (%) -13,3 14,2 10,2
EBITDA 266 333 495
EBITDA margin (%) 4,5 4,9 6,6
EBIT adj 137 142 322
EBIT adj margin (%) 2,3 2,1 4,3
Pretax profit 1 111 291
EPS rep 12,98 12,85 28,78
EPS growth (%) 385,4 -1 124
EPS adj 28,58 17,88 29,47
DPS 0 0 0
EV/EBITDA (x) 6,8 6,4 4,1
EV/EBIT adj (x) 13,1 14,8 6,3
P/E (x) 13,1 15,7 7
P/E adj (x) 5,9 11,3 6,9
EV/sales (x) 0,3 0,3 0,3
FCF yield (%) 40,8 -4,5 4,9
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2,3 2 1,2
Lease adj. FCF yield (%) 40,8 -4,5 4,9
Lease adj. ND/EBITDA 2 2 1,2
DKKm 2020 2021e 2022e
Sales 5951 6796 7492
COGS -5516 -6202 -6731
Gross profit 435 594 761
Other operating items -169 -261 -267
EBITDA 266 333 495
Depreciation on tangibles -75 -86 -92
Depreciation on intangibles -75 -86 -92
EBITA 140 176 322
Goodwill impairment charges -16 -5 -5
Other impairment and amortisation -37 -34 0
EBIT 87 137 317
Other financial items 0 0 0
Net financial items -52 -26 -26
Associated income 0 0 0
Other EO items -35 0 0
Pretax profit 1 111 291
Tax 13 -11 -67
Net profit 14 100 224
Minority interest 87 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 101 100 224
EPS 12,98 12,85 28,78
EPS Adj 28,58 17,88 29,47
Total extraordinary items after tax -69 0 0
Tax rate (%) 1123,3 -10 -23
Gross margin (%) 7,3 8,7 10,2
EBITDA margin (%) 4,5 4,9 6,6
EBITA margin (%) 2,3 2,6 4,3
EBIT margin (%) 1,5 2 4,2
Pretax margin (%) 0 1,6 3,9
Net margin (%) 0,2 1,5 3
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -13,3 14,2 10,2
EBITDA growth (%) 82,8 24,9 48,7
EBIT growth (%) 38 57,2 131,2
Net profit growth (%) 138,8 628,7 124
EPS growth (%) 385,4 -1 124
Profitability 2020 2021 2022
ROE (%) 14,9 15,2 27,3
ROE Adj (%) 32,8 21,1 27,9
ROCE (%) 4,1 9,7 19,7
ROCE Adj(%) 12,5 12,3 20
ROIC (%) 65,6 7,3 13,3
ROIC Adj (%) 103,3 7,6 13,5
Adj earnings numbers 2020 2021 2022
EBITDA Adj 301 333 495
EBITDA Adj margin (%) 5,1 4,9 6,6
EBITA Adj 174 176 322
EBITA Adj margin (%) 2,9 2,6 4,3
EBIT Adj 137 142 322
EBIT Adj margin (%) 2,3 2,1 4,3
Pretax profit Adj 123 150 296
Net profit Adj 135 139 229
Net profit to shareholders Adj 222 139 229
Net Adj margin (%) 2,3 2 3,1
Depreciation and amortisation -127 -156 -172
Of which leasing depreciation -51 -63 -69
EO items -35 0 0
Impairment and PPA amortisation -52 -39 -5
EBITDA lease Adj 301 333 495
EBITDA lease Adj margin (%) 5,1 4,9 6,6
Leasing payments 0 0 0
DKKm 2020 2021e 2022e
EBITDA 266 333 495
Net financial items -52 -26 -26
Paid tax 13 -11 -67
Non-cash items -16 -5 -5
Cash flow before change in WC 212 290 396
Change in WC 169 -192 -132
Operating cash flow 381 98 264
CAPEX tangible fixed assets -22 -102 -112
CAPEX intangible fixed assets -2 -68 -75
Acquisitions and disposals 182 0 0
Free cash flow 539 -72 77
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -433 11 11
Decrease in net IB debt -49 4 233
Balance Sheet (DKKm) 2020 2021 2022
Goodwill 217 211 206
Indefinite intangible assets 0 0 0
Definite intangible assets 217 165 145
Tangible fixed assets 0 55 116
Other fixed assets 701 695 690
Fixed assets 1647 1616 1620
Inventories 548 531 585
Receivables 1611 1894 2088
Other current assets 0 0 0
Cash and liquid assets 204 143 230
Total assets 4010 4184 4524
Shareholders equity 610 710 934
Minority 15 15 15
Total equity 624 724 948
Long-term debt 766 766 766
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 102 102 102
Other long-term liabilities 282 282 282
Capital invested 1608 1769 1905
Working capital -39 152 285
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1323 1572 1572
Net IB debt Adj 600 660 573
Market value of minority 0 0 0
Reversal of shares and participations -124 -119 -113
Reversal of conv. debt assumed equity 0 0 0
EV 1799 2114 2032
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 146,1 165,9 172,1
Capital invested turnover (%) 366,2 408,5 424,8
Capital employed turnover (%) 413,7 457,5 440,2
Inventories / sales (%) 8,5 8,3 8,2
Customer advances / sales (%) 12 11 11,6
Payables / sales (%) 5,8 5,7 5,6
Working capital / sales (%) -0,5 0,8 2,9
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 96 91,2 60,4
Net debt / market cap (%) 65,5 42 36,4
Equity ratio (%) 15,6 17,3 21
Net IB debt adj. / equity (%) 96 91,2 60,4
Current ratio (%) 105,7 111,2 119,7
EBITDA / net interest (%) 516,7 1283,8 1909,3
Net IB debt / EBITDA (%) 225,3 198,6 115,9
Interest cover (%) 252,8 569,7 1025,9
Short-term debt 37 37 37
Accounts payable 372 378 417
Other current liabilities 1826 1894 1972
Total liabilities and equity 4010 4184 4524
Net IB debt 600 660 573
Net IB debt excl. pension debt 600 660 573
Lease liability amortisation 0 0 0
Other intangible assets 217 204 227
Right-of-use asset 513 451 382
Total other fixed assets 701 695 690
Leasing liability 0 0 0
Total other long-term liabilities 384 384 384
Net IB debt excl. leasing 600 660 573
Net IB debt / EBITDA lease Adj (%) 199,4 198,6 115,9
DKKm 2020 2021e 2022e
Shares outstanding adj. 8 8 8
Fully diluted shares Adj 8 8 8
EPS 12,98 12,85 28,78
Dividend per share Adj 0 0 0
EPS Adj 28,58 17,88 29,47
BVPS 78,32 91,17 119,94
BVPS Adj 22,61 37,79 64,28
Net IB debt / share 77 84,8 73,6
Share price 117,56 202 202
Market cap. (m) 915 1572 1572
Valuation 2020 2021 2022
P/E 13,1 15,7 7
EV/sales 0,3 0,31 0,27
EV/EBITDA 6,8 6,4 4,1
EV/EBITA 12,9 12 6,3
EV/EBIT 20,6 15,4 6,4
Dividend yield (%) 0 0 0
FCF yield (%) 40,8 -4,5 4,9
P/BVPS 2,17 2,22 1,68
P/BVPS Adj 7,52 5,35 3,14
P/E Adj 5,9 11,3 6,9
EV/EBITDA Adj 6 6,4 4,1
EV/EBITA Adj 10,3 12 6,3
EV/EBIT Adj 13,1 14,8 6,3
EV/cap. employed 1,3 1,4 1,2
Investment ratios 2020 2021 2022
Capex / sales 0,4 2,5 2,5
Capex / depreciation 31,3 181,2 181,2
Capex tangibles / tangible fixed assets 0 185,2 97,1
Capex intangibles / definite intangibles 0,8 33,3 33
Depreciation on intangibles / definite intangibles 17,5 23 22,7
Depreciation on tangibles / tangibles 0 85,2 44,7
Lease adj. FCF yield (%) 40,8 -4,5 4,9

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Main shareholders - MT Højgaard Holding

Main shareholders Share capital % Voting shares % Verified
Knud Højgaards Fond 37.1 % 37.1 % 18 Feb 2020
Emtf Holding P/S 10.5 % 10.5 % 18 Feb 2020
Ejnar og Meta Thorsens Fond 9.9 % 9.9 % 18 Feb 2020
Nordea Fonder 8.1 % 8.1 % 31 Jul 2021
Chr. Augustinus Fabrikker A/S 5.3 % 5.3 % 18 Feb 2020
Lærernes Pension 2.0 % 2.0 % 31 Dec 2020
Fundamental Fondsmæglerselskab A/S 1.5 % 1.5 % 31 May 2021
MT Højgaard Holding A/S 1.0 % 1.0 % 1 Sep 2021
Morten Hansen 0.6 % 0.6 % 26 Feb 2021
Maj Invest 0.4 % 0.4 % 31 Jul 2021
Source: Holdings by Modular Finance AB