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Nordic Waterproofing

Nordic Waterproofing

Protecting and waterproofing roofs

Nordic Waterproofing is a market-leading supplier of products used to protect and waterproof roofs. It was founded in 2011 as a merger of Trelleborg’s and Lemminkäinen’s waterproofing operations and was listed on OMXS Mid Cap in June 2016. The market is highly consolidated in terms of suppliers, while the customer base is fragmented. The company both supplies (through its Products & Solutions division) and installs (through its Installation Services division) waterproofing products using the materials bitumen and EPDM, but also PVC. Recent acquisitions have also been into prefabricated façade elements and green roofing products.

High barriers to entry, the price-to-weight ratio of waterproofing products benefits local players, while NWG’s economies of scale are also beneficial. Besides a strong balance sheet with plenty of attractive M&A opportunities, the core business offers a high cash flow conversion.

Bitumen and synthetic rubber costs have an impact on the company’s margin. Although the product renewal in the roofing industry is low and the pace of technology advances is small, new product introductions have historically resulted in some small provisions. Furthermore, M&A activity always brings the risk of lower than expected operational synergies and performance of acquired businesses.

SEKm 2020 2021e 2022e
Sales 3303 3413 3564
Sales growth (%) 5,8 3,3 4,4
EBITDA 453 435 454
EBITDA margin (%) 13,7 12,7 12,7
EBIT adj 350 319 338
EBIT adj margin (%) 10,6 9,3 9,5
Pretax profit 321 287 306
EPS rep 10,62 9,32 9,93
EPS growth (%) 29,2 -12,3 6,6
EPS adj 11,99 10,31 10,93
DPS 10 5,1 5,3
EV/EBITDA (x) 9 10,4 9,7
EV/EBIT adj (x) 11,7 14,2 13
P/E (x) 15,4 19,2 18
P/E adj (x) 13,7 17,4 16,4
EV/sales (x) 1,2 1,3 1,2
FCF yield (%) 10,2 4,6 6,2
Dividend yield (%) 6,1 2,8 3
Net IB debt/EBITDA 0,6 0,8 0,6
Lease adj. FCF yield (%) 9 3,4 5,1
Lease adj. ND/EBITDA 0,3 0,6 0,3
SEKm 2020 2021e 2022e
Sales 3303 3413 3564
COGS -2374 -2482 -2589
Gross profit 929 931 975
Other operating items -476 -496 -521
EBITDA 453 435 454
Depreciation on tangibles -47 -48 -48
Depreciation on intangibles 0 0 0
EBITA 357 335 354
Goodwill impairment charges 0 0 0
Other impairment and amortisation -20 -20 -20
EBIT 337 315 334
Other financial items 0 0 0
Net financial items -16 -28 -28
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 321 287 306
Tax -68 -63 -67
Net profit 253 224 238
Minority interest 3 1 1
Net profit discontinued 0 0 0
Net profit to shareholders 256 224 239
EPS 10,62 9,32 9,93
EPS Adj 11,99 10,31 10,93
Total extraordinary items after tax -13 -4 -4
Tax rate (%) -21,1 -22 -22
Gross margin (%) 28,1 27,3 27,4
EBITDA margin (%) 13,7 12,7 12,7
EBITA margin (%) 10,8 9,8 9,9
EBIT margin (%) 10,2 9,2 9,4
Pretax margin (%) 9,7 8,4 8,6
Net margin (%) 7,7 6,6 6,7
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 5,8 3,3 4,4
EBITDA growth (%) 22,4 -4,1 4,3
EBIT growth (%) 29,5 -6,7 6
Net profit growth (%) 29,3 -11,7 6,6
EPS growth (%) 29,2 -12,3 6,6
Profitability 2020 2021 2022
ROE (%) 19,7 16 16,5
ROE Adj (%) 22,2 17,8 18,2
ROCE (%) 15,5 13,8 14,3
ROCE Adj(%) 17 14,8 15,3
ROIC (%) 14,2 13,4 13,8
ROIC Adj (%) 14,7 13,5 14
Adj earnings numbers 2020 2021 2022
EBITDA Adj 466 439 458
EBITDA Adj margin (%) 14,1 12,9 12,8
EBITA Adj 370 339 358
EBITA Adj margin (%) 11,2 9,9 10
EBIT Adj 350 319 338
EBIT Adj margin (%) 10,6 9,3 9,5
Pretax profit Adj 354 311 330
Net profit Adj 286 248 262
Net profit to shareholders Adj 289 248 263
Net Adj margin (%) 8,7 7,3 7,4
Depreciation and amortisation -96 -100 -100
Of which leasing depreciation -49 -52 -52
EO items -13 -4 -4
Impairment and PPA amortisation -20 -20 -20
EBITDA lease Adj 418 389 408
EBITDA lease Adj margin (%) 12,7 11,4 11,4
Leasing payments -48 -50 -50
SEKm 2020 2021e 2022e
EBITDA 453 435 454
Net financial items -16 -28 -28
Paid tax -68 -63 -67
Non-cash items 0 -32 -32
Cash flow before change in WC 369 312 326
Change in WC 93 -61 -4
Operating cash flow 462 251 322
CAPEX tangible fixed assets -53 -44 -43
CAPEX intangible fixed assets -2 -10 -11
Acquisitions and disposals -5 0 0
Free cash flow 403 197 269
Dividend paid 0 -241 -123
Share issues and buybacks 0 0 0
Other non cash items 13 0 0
Decrease in net IB debt 382 -89 93
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 952 952 952
Indefinite intangible assets 75 65 56
Definite intangible assets 0 0 0
Tangible fixed assets 263 259 254
Other fixed assets 133 164 196
Fixed assets 1539 1555 1570
Inventories 392 437 442
Receivables 323 373 381
Other current assets 5 5 5
Cash and liquid assets 604 510 606
Total assets 2864 2880 3005
Shareholders equity 1407 1390 1507
Minority 11 10 10
Total equity 1418 1401 1516
Long-term debt 723 723 723
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 102 102 102
Other long-term liabilities 5 5 5
Short-term debt 41 41 41
Accounts payable 171 205 214
Other current liabilities 291 291 291
Total liabilities and equity 2864 2880 3005
Net IB debt 271 365 270
Net IB debt excl. pension debt 271 365 270
Capital invested 1797 1874 1894
Working capital 258 319 323
EV breakdown 2020 2021 2022
Market cap. diluted (m) 3950 4316 4316
Net IB debt Adj 238 333 237
Market value of minority 11 10 10
Reversal of shares and participations -110 -142 -174
Reversal of conv. debt assumed equity 0 0 0
EV 4089 4517 4388
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 122,3 118,9 121,1
Capital invested turnover (%) 175,8 183,4 186,4
Capital employed turnover (%) 151,7 147,1 150
Inventories / sales (%) 11,7 12,2 12,4
Customer advances / sales (%) 7,5 8,1 7,8
Payables / sales (%) 4,9 5,5 5,9
Working capital / sales (%) 9,4 8,5 9
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 19,1 26,1 17,8
Net debt / market cap (%) 10,3 8,5 6,2
Equity ratio (%) 49,5 48,6 50,5
Net IB debt adj. / equity (%) 16,8 23,7 15,6
Current ratio (%) 263 246,5 262,4
EBITDA / net interest (%) 2756,1 1552,3 1619,8
Net IB debt / EBITDA (%) 59,9 84,1 59,4
Interest cover (%) 2172,1 1195,2 1262,6
Lease liability amortisation -48 -50 -50
Other intangible assets 75 65 56
Right-of-use asset 116 114 112
Total other fixed assets 133 164 196
Leasing liability 111 111 111
Total other long-term liabilities 108 108 108
Net IB debt excl. leasing 127 222 126
Net IB debt / EBITDA lease Adj (%) 30,4 57 30,8
SEKm 2020 2021e 2022e
Shares outstanding adj. 24 24 24
Fully diluted shares Adj 24 24 24
EPS 10,62 9,32 9,93
Dividend per share Adj 10 5,1 5,3
EPS Adj 11,99 10,31 10,93
BVPS 58,41 57,73 62,56
BVPS Adj 18,88 18,2 23,03
Net IB debt / share 11,3 15,2 11,2
Share price 109,41 179,2 179,2
Market cap. (m) 2635 4316 4316
Valuation 2020 2021 2022
P/E 15,4 19,2 18
EV/sales 1,24 1,32 1,23
EV/EBITDA 9 10,4 9,7
EV/EBITA 11,5 13,5 12,4
EV/EBIT 12,1 14,4 13,2
Dividend yield (%) 6,1 2,8 3
FCF yield (%) 10,2 4,6 6,2
P/BVPS 2,81 3,1 2,86
P/BVPS Adj 8,68 9,85 7,78
P/E Adj 13,7 17,4 16,4
EV/EBITDA Adj 8,8 10,3 9,6
EV/EBITA Adj 11 13,3 12,3
EV/EBIT Adj 11,7 14,2 13
EV/cap. employed 1,8 2 1,8
Investment ratios 2020 2021 2022
Capex / sales 1,7 1,6 1,5
Capex / depreciation 116,2 113,8 111,4
Capex tangibles / tangible fixed assets 20,1 17,1 16,8
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 17,9 18,5 18,9
Lease adj. FCF yield (%) 9 3,4 5,1

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Nordic Waterproofing - Company presentation with CEO Martin Ellis
Nordic Waterproofing - Company presentation with CEO Martin Ellis

Main shareholders - Nordic Waterproofing

Main shareholders Share capital % Voting shares % Verified
Svolder 14.3 % 14.3 % 31 Mar 2021
Swedbank Robur Fonder 8.8 % 8.8 % 31 Mar 2021
Mawer Investment Management 6.6 % 6.6 % 31 Mar 2021
Handelsbanken Fonder 5.9 % 5.9 % 31 Mar 2021
Länsförsäkringar Fonder 5.7 % 5.7 % 31 Mar 2021
Carnegie Fonder 5.3 % 5.3 % 31 Mar 2021
Alcur Fonder 4.6 % 4.6 % 28 Oct 2020
Tredje AP-fonden 4.2 % 4.2 % 31 Mar 2021
Avanza Pension 2.0 % 2.0 % 31 Mar 2021
Canaccord Genuity Wealth Management 1.9 % 1.9 % 31 Mar 2021
Source: Holdings by Modular Finance AB