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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 3292 3195 3302
Sales growth (%) 5,5 -3 3,3
EBITDA 463 424 433
EBITDA margin (%) 14,1 13,3 13,1
EBIT adj 361 312 321
EBIT adj margin (%) 11 9,8 9,7
Pretax profit 315 280 289
EPS rep 10,51 9,29 9,57
EPS growth (%) 27,9 -11,7 3,1
EPS adj 11,88 10,12 10,4
DPS 4,75 5,1 5,3
EV/EBITDA (x) 9,4 10 9,5
EV/EBIT adj (x) 12,1 13,6 12,8
P/E (x) 15,6 17,6 17,1
P/E adj (x) 13,8 16,2 15,7
EV/sales (x) 1,3 1,3 1,2
FCF yield (%) 6,7 6,8 6,9
Dividend yield (%) 2,9 3,1 3,2
Net IB debt/EBITDA 1,2 1 0,8
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 3292 3195 3302
COGS -2355 -2298 -2376
Gross profit 937 897 926
Other operating items -474 -473 -493
EBITDA 463 424 433
Depreciation on tangibles -49 -48 -48
Depreciation on intangibles 0 0 0
EBITA 366 324 333
Goodwill impairment charges 0 0 0
Other impairment and amortisation -19 -16 -16
EBIT 347 308 317
Other financial items 0 0 0
Net financial items -32 -28 -28
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 315 280 289
Tax -64 -56 -58
Net profit 251 224 231
Minority interest 2 0 -1
Net profit discontinued 0 0 0
Net profit to shareholders 253 224 231
EPS 10,51 9,29 9,57
EPS Adj 11,88 10,12 10,4
Total extraordinary items after tax -14 -4 -4
Tax rate (%) -20,4 -20 -20
Gross margin (%) 28,5 28,1 28,1
EBITDA margin (%) 14,1 13,3 13,1
EBITA margin (%) 11,1 10,1 10,1
EBIT margin (%) 10,5 9,6 9,6
Pretax margin (%) 9,6 8,8 8,8
Net margin (%) 7,6 7 7
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 5,5 -3 3,3
EBITDA growth (%) 25,1 -8,4 2,2
EBIT growth (%) 33,3 -11,2 3
Net profit growth (%) 28,1 -10,7 3,3
EPS growth (%) 27,9 -11,7 3,1
Profitability 2020 2021 2022
ROE (%) 20 16 15,3
ROE Adj (%) 22,6 17,5 16,7
ROCE (%) 16,3 13,6 13,4
ROCE Adj(%) 17,8 14,5 14,3
ROIC (%) 14 12,3 12,7
ROIC Adj (%) 14,5 12,5 12,8
Adj earnings numbers 2020 2021 2022
EBITDA Adj 477 428 437
EBITDA Adj margin (%) 14,5 13,4 13,2
EBITA Adj 380 328 337
EBITA Adj margin (%) 11,5 10,3 10,2
EBIT Adj 361 312 321
EBIT Adj margin (%) 11 9,8 9,7
Pretax profit Adj 348 300 309
Net profit Adj 284 244 251
Net profit to shareholders Adj 286 244 251
Net Adj margin (%) 8,6 7,6 7,6
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 463 424 433
Net financial items -32 -28 -28
Paid tax -64 -56 -58
Non-cash items -27 -27 -28
Cash flow before change in WC 340 313 320
Change in WC -19 10 2
Operating cash flow 321 323 321
CAPEX tangible fixed assets -43 -42 -40
CAPEX intangible fixed assets -13 -13 -10
Acquisitions and disposals 0 0 0
Free cash flow 265 268 272
Dividend paid -108 -114 -123
Share issues and buybacks 0 0 0
Other non cash items 0 0 0
Decrease in net IB debt 107 104 99
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 952 952 952
Indefinite intangible assets 127 124 118
Definite intangible assets 0 0 0
Tangible fixed assets 267 260 252
Other fixed assets 151 179 206
Fixed assets 1615 1631 1642
Inventories 412 409 409
Receivables 387 381 385
Other current assets 2 2 2
Cash and liquid assets 304 408 507
Total assets 2719 2830 2945
Shareholders equity 1340 1450 1557
Minority 12 12 13
Total equity 1352 1462 1570
Long-term debt 695 695 695
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 91 91 91
Other long-term liabilities 6 6 6
Short-term debt 44 44 44
Accounts payable 191 192 198
Other current liabilities 229 229 229
Total liabilities and equity 2719 2830 2945
Net IB debt 547 442 343
Net IB debt excl. pension debt 547 442 343
Capital invested 1996 2001 2011
Working capital 380 370 369
EV breakdown 2020 2021 2022
Market cap. diluted (m) 3945 3945 3945
Net IB debt Adj 547 442 343
Market value of minority 12 12 13
Reversal of shares and participations -129 -157 -184
Reversal of conv. debt assumed equity 0 0 0
EV 4374 4243 4117
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 125,3 115,1 114,4
Capital invested turnover (%) 166,5 159,9 164,6
Capital employed turnover (%) 154,5 141,5 139,5
Inventories / sales (%) 12,1 12,8 12,4
Customer advances / sales (%) 6,8 7 6,8
Payables / sales (%) 5,2 6 5,9
Working capital / sales (%) 11,3 11,7 11,2
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 40,4 30,3 21,9
Net debt / market cap (%) 20,7 11,2 8,7
Equity ratio (%) 49,7 51,7 53,3
Net IB debt adj. / equity (%) 40,4 30,3 21,9
Current ratio (%) 237,8 257,8 276,4
EBITDA / net interest (%) 1449,8 1514,4 1547,3
Net IB debt / EBITDA (%) 118 104,3 79,3
Interest cover (%) 1146,1 1157,3 1190,1
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 24 24 24
Fully diluted shares Adj 24 24 24
EPS 10,51 9,29 9,57
Dividend per share Adj 4,8 5,1 5,3
EPS Adj 11,88 10,12 10,4
BVPS 55,65 60,19 64,66
BVPS Adj 16,12 20,66 25,13
Net IB debt / share 22,7 18,4 14,3
Share price 109,41 163,8 163,8
Market cap. (m) 2635 3945 3945
Valuation 2020 2021 2022
P/E 15,6 17,6 17,1
EV/sales 1,33 1,33 1,25
EV/EBITDA 9,4 10 9,5
EV/EBITA 11,9 13,1 12,4
EV/EBIT 12,6 13,8 13
Dividend yield (%) 2,9 3,1 3,2
FCF yield (%) 6,7 6,8 6,9
P/BVPS 2,94 2,72 2,53
P/BVPS Adj 10,16 7,93 6,52
P/E Adj 13,8 16,2 15,7
EV/EBITDA Adj 9,2 9,9 9,4
EV/EBITA Adj 11,5 12,9 12,2
EV/EBIT Adj 12,1 13,6 12,8
EV/cap. employed 2 1,8 1,7
Investment ratios 2020 2021 2022
Capex / sales 1,7 1,7 1,5
Capex / depreciation 114,2 113,2 103,2
Capex tangibles / tangible fixed assets 16 16 15,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 18,4 18,4 19,1
N/A N/A N/A

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Media

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

Main shareholders - Nordic Waterproofing

Main shareholders Share capital % Voting shares % Verified
Svolder 12.7 % 12.7 % 31 Dec 2020
Swedbank Robur Fonder 8.8 % 8.8 % 31 Dec 2020
Mawer Investment Management 7.4 % 7.4 % 31 Dec 2020
Carnegie Fonder 6.8 % 6.8 % 31 Dec 2020
Handelsbanken Fonder 6.0 % 6.0 % 31 Dec 2020
Länsförsäkringar Fonder 5.8 % 5.8 % 31 Dec 2020
Alcur Fonder 4.6 % 4.6 % 28 Oct 2020
Tredje AP-fonden 4.4 % 4.4 % 31 Dec 2020
PriorNilsson Fonder 3.0 % 3.0 % 31 Dec 2020
Canaccord Genuity Wealth Management 2.0 % 2.0 % 31 Dec 2020
Source: Holdings by Modular Finance AB