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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 2020 2021e 2022e
Sales 5920 6097 6408
Sales growth (%) -13,7 3 5,1
EBITDA 289 396 473
EBITDA margin (%) 4,9 6,5 7,4
EBIT adj 125 195 262
EBIT adj margin (%) 2,1 3,2 4,1
Pretax profit 149 170 238
EPS rep 18,18 19,69 27,46
EPS growth (%) 1007,6 8,3 39,4
EPS adj 22,16 19,69 27,46
DPS 0 0 0
EV/EBITDA (x) 4,7 3,2 2,4
EV/EBIT adj (x) 11 6,6 4,4
P/E (x) 9,2 8,5 6,1
P/E adj (x) 7,5 8,5 6,1
EV/sales (x) 0,2 0,2 0,2
FCF yield (%) 43,2 7 9,7
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 0,8 0,4 0
N/A N/A N/A
DKKm 2020 2021e 2022e
Sales 5920 6097 6408
COGS -5450 -5549 -5783
Gross profit 470 548 625
Other operating items -180 -152 -152
EBITDA 289 396 473
Depreciation on tangibles -75 -78 -82
Depreciation on intangibles -45 -46 -48
EBITA 94 195 262
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 94 195 262
Other financial items 79 0 0
Net financial items 54 -24 -24
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 149 170 238
Tax -7 -17 -24
Net profit 142 153 214
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 142 153 214
EPS 18,18 19,69 27,46
EPS Adj 22,16 19,69 27,46
Total extraordinary items after tax -31 0 0
Tax rate (%) -4,7 -10 -10
Gross margin (%) 7,9 9 9,8
EBITDA margin (%) 4,9 6,5 7,4
EBITA margin (%) 1,6 3,2 4,1
EBIT margin (%) 1,6 3,2 4,1
Pretax margin (%) 2,5 2,8 3,7
Net margin (%) 2,4 2,5 3,3
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -13,7 3 5,1
EBITDA growth (%) 5,6 36,7 19,6
EBIT growth (%) 96,8 106,5 34,5
Net profit growth (%) 1007,6 8,3 39,4
EPS growth (%) 1007,6 8,3 39,4
Profitability 2020 2021 2022
ROE (%) 17,4 15,9 18,6
ROE Adj (%) 21,2 15,9 18,6
ROCE (%) 11,6 11,9 14,3
ROCE Adj(%) 13,6 11,9 14,3
ROIC (%) 5,8 11,6 14,9
ROIC Adj (%) 7,7 11,6 14,9
Adj earnings numbers 2020 2021 2022
EBITDA Adj 320 396 473
EBITDA Adj margin (%) 5,4 6,5 7,4
EBITA Adj 125 195 262
EBITA Adj margin (%) 2,1 3,2 4,1
EBIT Adj 125 195 262
EBIT Adj margin (%) 2,1 3,2 4,1
Pretax profit Adj 180 170 238
Net profit Adj 173 153 214
Net profit to shareholders Adj 173 153 214
Net Adj margin (%) 2,9 2,5 3,3
N/A N/A N/A
DKKm 2020 2021e 2022e
EBITDA 289 396 473
Net financial items 54 -24 -24
Paid tax -7 -17 -24
Non-cash items 0 0 0
Cash flow before change in WC 337 354 425
Change in WC 197 -32 -56
Operating cash flow 534 322 369
CAPEX tangible fixed assets -123 -127 -134
CAPEX intangible fixed assets -101 -104 -109
Acquisitions and disposals 250 0 0
Free cash flow 560 91 126
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -250 0 0
Decrease in net IB debt 310 91 126
Balance Sheet (DKKm) 2020 2021 2022
Goodwill 121 121 121
Indefinite intangible assets 0 0 0
Definite intangible assets 216 274 335
Tangible fixed assets 520 570 622
Other fixed assets 322 322 322
Fixed assets 1694 1724 1755
Inventories 420 433 455
Receivables 1571 1618 1700
Other current assets 0 0 0
Cash and liquid assets 449 540 666
Total assets 4134 4315 4577
Shareholders equity 886 1040 1254
Minority 14 14 14
Total equity 901 1054 1268
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 1474 1536 1624
Working capital -220 -187 -131
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1297 1297 1297
Net IB debt Adj 241 149 24
Market value of minority 0 0 0
Reversal of shares and participations -165 -165 -165
Reversal of conv. debt assumed equity 0 0 0
EV 1372 1281 1155
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 143,2 144,3 144,1
Capital invested turnover (%) 380 405,1 405,5
Capital employed turnover (%) 389,5 365,6 346,2
Inventories / sales (%) 7,5 7 6,9
Customer advances / sales (%) 11,4 10,1 10
Payables / sales (%) 5,4 5,2 5,2
Working capital / sales (%) -2 -3,3 -2,5
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 26,7 14,2 1,9
Net debt / market cap (%) 26,3 11,5 1,8
Equity ratio (%) 21,8 24,4 27,7
Net IB debt adj. / equity (%) 26,7 14,2 1,9
Current ratio (%) 98,7 103,7 110,8
EBITDA / net interest (%) 1191,3 1628,3 1947
Net IB debt / EBITDA (%) 83,1 37,8 5
Interest cover (%) 356,4 724 970,2
Short-term debt 261 261 261
Accounts payable 313 322 339
Other current liabilities 1897 1916 1947
Total liabilities and equity 4134 4315 4577
Net IB debt 241 149 24
Net IB debt excl. pension debt 241 149 24
N/A N/A N/A
DKKm 2020 2021e 2022e
Shares outstanding adj. 8 8 8
Fully diluted shares Adj 8 8 8
EPS 18,18 19,69 27,46
Dividend per share Adj 0 0 0
EPS Adj 22,16 19,69 27,46
BVPS 113,84 133,53 160,99
BVPS Adj 70,55 82,79 102,42
Net IB debt / share 30,9 19,2 3
Share price 117,56 166,5 166,5
Market cap. (m) 915 1297 1297
Valuation 2020 2021 2022
P/E 9,2 8,5 6,1
EV/sales 0,23 0,21 0,18
EV/EBITDA 4,7 3,2 2,4
EV/EBITA 14,6 6,6 4,4
EV/EBIT 14,6 6,6 4,4
Dividend yield (%) 0 0 0
FCF yield (%) 43,2 7 9,7
P/BVPS 1,46 1,25 1,03
P/BVPS Adj 2,36 2,01 1,63
P/E Adj 7,5 8,5 6,1
EV/EBITDA Adj 4,3 3,2 2,4
EV/EBITA Adj 11 6,6 4,4
EV/EBIT Adj 11 6,6 4,4
EV/cap. employed 0,9 0,7 0,6
Investment ratios 2020 2021 2022
Capex / sales 3,8 3,8 3,8
Capex / depreciation 187 187 187
Capex tangibles / tangible fixed assets 23,7 22,3 21,5
Capex intangibles / definite intangibles 46,9 38 32,7
Depreciation on intangibles / definite intangibles 20,8 16,8 14,5
Depreciation on tangibles / tangibles 14,5 13,6 13,1
N/A N/A N/A

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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 7.5 % 7.5 % 30 Nov 2020
Chr. Augustinus Fabrikker A/S 5.3 % 5.3 % 18 Feb 2020
Fundamental Fondsmæglerselskab A/S 1.5 % 1.5 % 30 Nov 2020
Morten Hansen 0.5 % 0.5 % 5 Mar 2020
Maj Invest 0.3 % 0.3 % 30 Nov 2020
Sydinvest 0.3 % 0.3 % 31 Aug 2020
Fourton Oy 0.3 % 0.3 % 30 Nov 2020
Source: Holdings by Modular Finance AB