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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 3682 3804
Sales growth (%) 5,8 11,5 3,3
EBITDA 453 510 509
EBITDA margin (%) 13,7 13,8 13,4
EBIT adj 350 400 389
EBIT adj margin (%) 10,6 10,9 10,2
Pretax profit 321 370 361
EPS rep 10,62 11,99 11,71
EPS growth (%) 29,2 12,8 -2,3
EPS adj 11,99 12,98 12,54
DPS 10 5,1 5,3
EV/EBITDA (x) 9 10,7 10,4
EV/EBIT adj (x) 11,7 13,7 13,6
P/E (x) 15,4 18,3 18,7
P/E adj (x) 13,7 16,9 17,5
EV/sales (x) 1,2 1,5 1,4
FCF yield (%) 10,2 4,2 6
Dividend yield (%) 6,1 2,3 2,4
Net IB debt/EBITDA 0,6 0,7 0,4
Lease adj. FCF yield (%) 9 3,2 5,1
Lease adj. ND/EBITDA 0,3 0,5 0,1
SEKm 2020 2021e 2022e
Sales 3303 3682 3804
COGS -2374 -2608 -2714
Gross profit 929 1075 1090
Other operating items -476 -565 -581
EBITDA 453 510 509
Depreciation on tangibles -47 -48 -48
Depreciation on intangibles 0 0 0
EBITA 357 424 409
Goodwill impairment charges 0 0 0
Other impairment and amortisation -20 -20 -20
EBIT 337 400 389
Other financial items 0 0 0
Net financial items -16 -30 -28
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 321 370 361
Tax -68 -84 -79
Net profit 253 286 281
Minority interest 3 3 1
Net profit discontinued 0 0 0
Net profit to shareholders 256 289 282
EPS 10,62 11,99 11,71
EPS Adj 11,99 12,98 12,54
Total extraordinary items after tax -13 0 0
Tax rate (%) -21,1 -22,7 -22
Gross margin (%) 28,1 29,2 28,7
EBITDA margin (%) 13,7 13,8 13,4
EBITA margin (%) 10,8 11,5 10,7
EBIT margin (%) 10,2 10,9 10,2
Pretax margin (%) 9,7 10,1 9,5
Net margin (%) 7,7 7,8 7,4
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 5,8 11,5 3,3
EBITDA growth (%) 22,4 12,5 -0,2
EBIT growth (%) 29,5 18,8 -2,9
Net profit growth (%) 29,3 13 -1,7
EPS growth (%) 29,2 12,8 -2,3
Profitability 2020 2021 2022
ROE (%) 19,7 20,2 18,4
ROE Adj (%) 22,2 21,9 19,7
ROCE (%) 15,5 17,3 16
ROCE Adj(%) 17 18,3 16,8
ROIC (%) 14,2 16,6 15,7
ROIC Adj (%) 14,7 16,6 15,7
Adj earnings numbers 2020 2021 2022
EBITDA Adj 466 510 509
EBITDA Adj margin (%) 14,1 13,8 13,4
EBITA Adj 370 424 409
EBITA Adj margin (%) 11,2 11,5 10,7
EBIT Adj 350 400 389
EBIT Adj margin (%) 10,6 10,9 10,2
Pretax profit Adj 354 394 381
Net profit Adj 286 310 301
Net profit to shareholders Adj 289 313 302
Net Adj margin (%) 8,7 8,4 7,9
Depreciation and amortisation -96 -85 -100
Of which leasing depreciation -49 -50 -52
EO items -13 0 0
Impairment and PPA amortisation -20 -24 -20
EBITDA lease Adj 418 460 459
EBITDA lease Adj margin (%) 12,7 12,5 12,1
Leasing payments -48 -50 -50
SEKm 2020 2021e 2022e
EBITDA 453 510 509
Net financial items -16 -30 -28
Paid tax -68 -84 -79
Non-cash items 0 -9 -28
Cash flow before change in WC 369 387 373
Change in WC 93 -107 2
Operating cash flow 462 280 375
CAPEX tangible fixed assets -53 -48 -46
CAPEX intangible fixed assets -2 -11 -11
Acquisitions and disposals -5 0 0
Free cash flow 403 221 318
Dividend paid 0 -241 -123
Share issues and buybacks 0 0 0
Other non cash items 13 -10 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 263 276 273
Other fixed assets 133 164 196
Fixed assets 1539 1558 1573
Inventories 392 471 472
Receivables 323 401 406
Other current assets 5 5 5
Cash and liquid assets 604 534 680
Total assets 2864 2969 3135
Shareholders equity 1407 1455 1614
Minority 11 9 8
Total equity 1418 1463 1622
Long-term debt 723 734 734
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 171 221 228
Other current liabilities 291 291 291
Total liabilities and equity 2864 2969 3135
Net IB debt 271 352 206
Net IB debt excl. pension debt 271 352 206
Capital invested 1797 1923 1936
Working capital 258 365 363
EV breakdown 2020 2021 2022
Market cap. diluted (m) 3950 5274 5274
Net IB debt Adj 238 319 173
Market value of minority 11 9 8
Reversal of shares and participations -110 -130 -158
Reversal of conv. debt assumed equity 0 0 0
EV 4089 5472 5298
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 122,3 126,3 124,6
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 9,6
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 19,1 24 12,7
Net debt / market cap (%) 10,3 6,7 3,9
Equity ratio (%) 49,5 49,3 51,7
Net IB debt adj. / equity (%) 16,8 21,8 10,7
Current ratio (%) 263 255 278,5
EBITDA / net interest (%) 2756,1 1687,3 1816,7
Net IB debt / EBITDA (%) 59,9 69 40,5
Interest cover (%) 2172,1 1405,5 1459,5
Lease liability amortisation -48 -50 -50
Other intangible assets 75 62 54
Right-of-use asset 116 116 114
Total other fixed assets 133 152 180
Leasing liability 111 111 111
Total other long-term liabilities 108 108 108
Net IB debt excl. leasing 127 208 62
Net IB debt / EBITDA lease Adj (%) 30,4 45,2 13,6
SEKm 2020 2021e 2022e
Shares outstanding adj. 24 24 24
Fully diluted shares Adj 24 24 24
EPS 10,62 11,99 11,71
Dividend per share Adj 10 5,1 5,3
EPS Adj 11,99 12,98 12,54
BVPS 58,41 60,4 67,01
BVPS Adj 18,88 20,87 27,48
Net IB debt / share 11,3 14,6 8,6
Share price 109,41 219 219
Market cap. (m) 2635 5274 5274
Valuation 2020 2021 2022
P/E 15,4 18,3 18,7
EV/sales 1,24 1,49 1,39
EV/EBITDA 9 10,7 10,4
EV/EBITA 11,5 12,9 13
EV/EBIT 12,1 13,7 13,6
Dividend yield (%) 6,1 2,3 2,4
FCF yield (%) 10,2 4,2 6
P/BVPS 2,81 3,63 3,27
P/BVPS Adj 8,68 10,49 7,97
P/E Adj 13,7 16,9 17,5
EV/EBITDA Adj 8,8 10,7 10,4
EV/EBITA Adj 11 12,9 13
EV/EBIT Adj 11,7 13,7 13,6
EV/cap. employed 1,8 2,3 2,1
Investment ratios 2020 2021 2022
Capex / sales 1,7 1,6 1,5
Capex / depreciation 116,2 167,9 118,9
Capex tangibles / tangible fixed assets 20,1 17,4 16,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 17,9 12,7 17,6
Lease adj. FCF yield (%) 9 3,2 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 15.5 % 15.5 % 10 Sep 2021
Swedbank Robur Fonder 8.7 % 8.7 % 31 Aug 2021
Handelsbanken Fonder 6.9 % 6.9 % 31 Aug 2021
Länsförsäkringar Fonder 4.6 % 4.6 % 10 Sep 2021
Mawer Investment Management 4.3 % 4.3 % 9 Sep 2021
Tredje AP-fonden 4.2 % 4.2 % 31 Aug 2021
Carnegie Fonder 3.8 % 3.8 % 31 Aug 2021
Alcur Fonder 3.7 % 3.7 % 31 Aug 2021
Canaccord Genuity Wealth Management 2.0 % 2.0 % 31 Aug 2021
Avanza Pension 1.9 % 1.9 % 31 Aug 2021
Source: Holdings by Modular Finance AB

Insider list - Nordic Waterproofing

Name Quantity Code Date
Thomas Zipfel - 975 SELL 18 Aug 2021
Thomas Zipfel + 5 894 ALTM 17 Aug 2021
Thomas Zipfel + 3 929 BUY 16 Aug 2021
Mats Lindborg - 5 000 SELL 26 Jul 2021
Paul Erik Rask - 11 885 SELL 21 Jul 2021
Esa Mäki - 2 500 SELL 21 Jul 2021
Esa Mäki + 6 012 ALTM 2 Jul 2021
Martin Tholstrup + 5 925 ALTM 1 Jul 2021
Mats Lindborg + 5 943 ALTM 28 Jun 2021
Paul Erik Rask + 2 061 BUY 10 Feb 2021

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