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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 four 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 ~1,800 FTE 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 2019 2020e 2021e
Sales 6864 5900 5723
Sales growth (%) 1,6 -14 -3
EBITDA 274 319 367
EBITDA margin (%) 4 5,4 6,4
EBIT adj 83 124 178
EBIT adj margin (%) 1,2 2,1 3,1
Pretax profit 112 187 154
EPS rep 9,25 21,11 15,21
EPS growth (%) 112,2 128,3 -28
EPS adj 13,74 21,11 15,21
DPS 0 0 0
EV/EBITDA (x) 3,8 2,9 2,1
EV/EBIT adj (x) 12,5 7,3 4,4
P/E (x) 9 5,2 7,3
P/E adj (x) 6,1 5,2 7,3
EV/sales (x) 0,2 0,2 0,1
FCF yield (%) 16 69,3 16,5
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2 0,7 0,3
DKKm 2019 2020e 2021e
Sales 6864 5900 5723
COGS -6410 -5464 -5234
Gross profit 454 436 489
Other operating items -179 -118 -122
EBITDA 274 319 367
Depreciation on tangibles -87 -75 -73
Depreciation on intangibles -52 -45 -43
EBITA 48 124 178
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 48 124 178
Other financial items 88 88 0
Net financial items 64 63 -24
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 112 187 154
Tax -40 -23 -35
Net profit 72 164 118
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 72 164 118
EPS 9,25 21,11 15,21
EPS Adj 13,74 21,11 15,21
Total extraordinary items after tax -35 0 0
Tax rate (%) -35,4 -12,2 -23
Gross margin (%) 6,6 7,4 8,5
EBITDA margin (%) 4 5,4 6,4
EBITA margin (%) 0,7 2,1 3,1
EBIT margin (%) 0,7 2,1 3,1
Pretax margin (%) 1,6 3,2 2,7
Net margin (%) 1 2,8 2,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 1,6 -14 -3
EBITDA growth (%) 162 16,2 15,1
EBIT growth (%) 108,8 158,9 43,6
Net profit growth (%) 112,2 128,3 -28
EPS growth (%) 112,2 128,3 -28
Profitability 2019 2020 2021
ROE (%) 12,8 19,9 12,2
ROE Adj (%) 19 19,9 12,2
ROCE (%) 12,8 14 10,8
ROCE Adj(%) 16 14 10,8
ROIC (%) 2,5 7 9,2
ROIC Adj (%) 4,4 7 9,2
Adj earnings numbers 2019 2020 2021
EBITDA Adj 309 319 367
EBITDA Adj margin (%) 4,5 5,4 6,4
EBITA Adj 83 124 178
EBITA Adj margin (%) 1,2 2,1 3,1
EBIT Adj 83 124 178
EBIT Adj margin (%) 1,2 2,1 3,1
Pretax profit Adj 147 187 154
Net profit Adj 107 164 118
Net profit to shareholders Adj 107 164 118
Net Adj margin (%) 1,6 2,8 2,1
DKKm 2019 2020e 2021e
EBITDA 274 319 367
Net financial items 64 63 -24
Paid tax -40 -23 -35
Non-cash items 20 10 20
Cash flow before change in WC 318 369 327
Change in WC -465 201 32
Operating cash flow 265 570 359
CAPEX tangible fixed assets -143 -123 -119
CAPEX intangible fixed assets -26 -101 -98
Acquisitions and disposals 8 250 0
Free cash flow 104 596 142
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -139 -270 -40
Decrease in net IB debt -430 326 102
Balance Sheet (DKKm) 2019 2020 2021
Goodwill 121 121 121
Indefinite intangible assets 0 0 0
Definite intangible assets 159 216 270
Tangible fixed assets 472 520 566
Other fixed assets 322 332 352
Fixed assets 1664 1703 1752
Inventories 466 419 406
Receivables 1865 1566 1519
Other current assets 0 0 0
Cash and liquid assets 140 466 568
Total assets 4135 4154 4245
Shareholders equity 745 909 1028
Minority 14 14 14
Total equity 759 924 1042
Long-term debt 429 429 429
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 46 46 46
Other long-term liabilities 286 286 286
Capital invested 1642 1480 1497
Working capital -22 -223 -255
EV breakdown 2019 2020 2021
Market cap. diluted (m) 650 860 860
Net IB debt Adj 550 224 122
Market value of minority 0 0 0
Reversal of shares and participations -165 -175 -195
Reversal of conv. debt assumed equity 0 0 0
EV 1035 910 787
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 173,1 142,4 136,3
Capital invested turnover (%) 559,4 377,9 384,5
Capital employed turnover (%) 631,9 385,3 342,1
Inventories / sales (%) 7,1 7,5 7,2
Customer advances / sales (%) 10,2 11,4 10,4
Payables / sales (%) 5,3 5,4 5,4
Working capital / sales (%) -3,7 -2,1 -4,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 72,4 24,2 11,7
Net debt / market cap (%) 101,2 26 14,2
Equity ratio (%) 18,4 22,2 24,6
Net IB debt adj. / equity (%) 72,4 24,2 11,7
Current ratio (%) 94,5 99,3 102,1
EBITDA / net interest (%) 1142,5 1310,9 1509,5
Net IB debt / EBITDA (%) 200,6 70,3 33,2
Interest cover (%) 187,5 465,3 663,4
Short-term debt 261 261 261
Accounts payable 322 312 303
Other current liabilities 2032 1895 1877
Total liabilities and equity 4135 4154 4245
Net IB debt 550 224 122
Net IB debt excl. pension debt 550 224 122
DKKm 2019 2020e 2021e
Shares outstanding adj. 8 8 8
Fully diluted shares Adj 8 8 8
EPS 9,25 21,11 15,21
Dividend per share Adj 0 0 0
EPS Adj 13,74 21,11 15,21
BVPS 95,66 116,77 131,98
BVPS Adj 59,6 73,5 81,72
Net IB debt / share 70,6 28,8 15,6
Share price 69,82 110,5 110,5
Market cap. (m) 544 860 860
Valuation 2019 2020 2021
P/E 9 5,2 7,3
EV/sales 0,15 0,15 0,14
EV/EBITDA 3,8 2,9 2,1
EV/EBITA 21,6 7,3 4,4
EV/EBIT 21,6 7,3 4,4
Dividend yield (%) 0 0 0
FCF yield (%) 16 69,3 16,5
P/BVPS 0,87 0,95 0,84
P/BVPS Adj 1,4 1,5 1,35
P/E Adj 6,1 5,2 7,3
EV/EBITDA Adj 3,3 2,9 2,1
EV/EBITA Adj 12,5 7,3 4,4
EV/EBIT Adj 12,5 7,3 4,4
EV/cap. employed 0,7 0,6 0,5
Investment ratios 2019 2020 2021
Capex / sales 2,5 3,8 3,8
Capex / depreciation 121,4 187 187
Capex tangibles / tangible fixed assets 30,3 23,7 21,1
Capex intangibles / definite intangibles 16,2 46,7 36,2
Depreciation on intangibles / definite intangibles 32,6 20,7 16
Depreciation on tangibles / tangibles 18,5 14,4 12,9

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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 7.7 % 7.7 % 30 Apr 2020
Chr. Augustinus Fabrikker A/S 5.3 % 5.3 % 18 Feb 2020
Fundamental Fondsmæglerselskab A/S 1.5 % 1.5 % 29 Feb 2020
Morten Hansen 0.5 % 0.5 % 5 Mar 2020
Sydinvest 0.5 % 0.5 % 30 Apr 2020
Fourton Oy 0.3 % 0.3 % 30 Apr 2020
Maj Invest 0.2 % 0.2 % 31 Mar 2020
Source: Holdings by Modular Finance AB