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CTT Systems

CTT Systems

Systems for climate control in airplanes

CTT Systems develops climate control products for aircraft, including dehumidification systems to prevent condensation and humidifiers for crew and passenger wellbeing. CTT’s products are offered on the Boeing 787 and 777X as well as the Airbus A380 and A350. The company holds a majority market share within both dehumidification and humidification products and is a tier-1 supplier to the Boeing 787 and 777X.

CTT holds virtually a 100% market share in airplane dehumidification systems and a big majority share of the market for humidification systems. Its dehumidification products offer large fuel and cost savings while its humidification products increase humidity levels and comfort for passengers. Should the company be able to penetrate the market for narrow-body aircraft (Boeing 737 MAX/Airbus A320Neo), it would have a strong pipeline of sales and high profitability from aftermarket sales for 20-40 years ahead. The market also offers considerable barriers to entry due to customer relationships, certifications and proven reliability among OEM suppliers.

The high profitability in CTT’s systems could attract new competitors, or result in the OEM suppliers providing their own solutions. While CTT’s relationships with Airbus and Boeing are highly valuable, they have little influence over pricing and therefore are sensitive to contract renegotiations. Almost all revenues are dollar-based, implying a strong currency sensitivity. The main risks entail a lack of market penetration due to low willingness among airliners to have dehumidifiers and humidifiers installed.

SEKm 2021 2022e 2023e
Sales 151 243 368
Sales growth (%) -24,7 60,5 51,5
EBITDA 38 103 152
EBITDA margin (%) 25,1 42,4 41,2
EBIT adj 22 95 140
EBIT adj margin (%) 14,5 39,1 38
Pretax profit 18 86 136
EPS rep 1,13 5,46 8,6
EPS growth (%) -54,7 384,8 57,5
EPS adj 0,74 5,46 8,6
DPS 0,79 3,82 6,02
EV/EBITDA (x) 72 25 16,6
EV/EBIT adj (x) 124,8 27,2 18,1
P/E (x) 192,1 37,9 24,1
P/E adj (x) 291 37,9 24,1
EV/sales (x) 18,1 10,6 6,9
FCF yield (%) 0,8 1,9 4
Dividend yield (%) 0,4 1,8 2,9
Net IB debt/EBITDA 0,6 -0,2 -0,5
Lease adj. FCF yield (%) 0,8 1,9 4
Lease adj. ND/EBITDA 0,7 -0,2 -0,5
SEKm 2021 2022e 2023e
Sales 151 243 368
COGS 0 0 0
Gross profit 151 243 368
Other operating items -113 -140 -216
EBITDA 38 103 152
Depreciation on tangibles -4 -5 -4
Depreciation on intangibles -2 -2 -4
EBITA 27 95 140
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 27 95 140
Other financial items 0 0 0
Net financial items -9 -9 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 18 86 136
Tax -4 -18 -28
Net profit 14 68 108
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 14 68 108
EPS 1,13 5,46 8,6
EPS Adj 0,74 5,46 8,6
Total extraordinary items after tax 4,8 0 0
Tax rate (%) -20,8 -20,4 -20,5
Gross margin (%) 100 100 100
EBITDA margin (%) 25,1 42,4 41,2
EBITA margin (%) 17,7 39,1 38
EBIT margin (%) 17,7 39,1 38
Pretax margin (%) 11,8 35,4 36,9
Net margin (%) 9,3 28,2 29,3
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -24,7 60,5 51,5
EBITDA growth (%) -16 171 47,3
EBIT growth (%) -30,4 255,2 47,1
Net profit growth (%) -54,7 384,8 57,5
EPS growth (%) -54,7 384,8 57,5
Profitability 2021 2022 2023
ROE (%) 6,5 28,3 35,8
ROE Adj (%) 4,3 28,3 35,8
ROCE (%) 9,9 31,7 43,1
ROCE Adj(%) 8,1 31,7 43,1
ROIC (%) 9 30,8 43,2
ROIC Adj (%) 7,4 30,8 43,2
Adj earnings numbers 2021 2022 2023
EBITDA Adj 33 103 152
EBITDA Adj margin (%) 21,9 42,4 41,2
EBITA Adj 22 95 140
EBITA Adj margin (%) 14,5 39,1 38
EBIT Adj 22 95 140
EBIT Adj margin (%) 14,5 39,1 38
Pretax profit Adj 13 86 136
Net profit Adj 9 68 108
Net profit to shareholders Adj 9 68 108
Net Adj margin (%) 6,2 28,2 29,3
Depreciation and amortisation -11 -8 -12
Of which leasing depreciation 0 0 0
EO items 5 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 33 103 152
EBITDA lease Adj margin (%) 21,9 42,4 41,2
Leasing payments 0 0 0
SEKm 2021 2022e 2023e
EBITDA 38 103 152
Net financial items -9 -9 -4
Paid tax -7 -18 -28
Non-cash items 8 0 0
Cash flow before change in WC 31 76 120
Change in WC 0 -17 2
Operating cash flow 30 59 122
CAPEX tangible fixed assets 0 -1 -4
CAPEX intangible fixed assets -8 -9 -14
Acquisitions and disposals 0 0 0
Free cash flow 22 49 105
Dividend paid -22 -10 -48
Share issues and buybacks 0 0 0
Other non cash items -5 0 0
Decrease in net IB debt -93 65 32
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 73 86 91
Tangible fixed assets 48 45 43
Other fixed assets 2 2 2
Fixed assets 126 128 134
Inventories 77 109 129
Receivables 77 85 92
Other current assets 0 0 0
Cash and liquid assets 49 58 75
Total assets 329 380 429
Shareholders equity 213 271 331
Minority 0 0 0
Total equity 213 271 331
Long-term debt 71 41 1
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 6 6 6
Short-term debt 1 1 1
Accounts payable 40 63 92
Other current liabilities 0 0 0
Total liabilities and equity 329 380 429
Net IB debt 23 -16 -73
Net IB debt excl. pension debt 23 -16 -73
Capital invested 236 255 259
Working capital 114 131 129
EV breakdown 2021 2022 2023
Market cap. diluted (m) 2713 2594 2594
Net IB debt Adj 23 -16 -73
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 2735 2577 2521
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 47,5 68,5 90,8
Capital invested turnover (%) 97,2 88,1 151,3
Capital employed turnover (%) 75,8 72,2 104,1
Inventories / sales (%) 37,9 34,9 21,7
Customer advances / sales (%) 0 0 0
Payables / sales (%) 31,3 22,9 18,6
Working capital / sales (%) 75,1 50,4 35,3
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 10,8 -5,9 -22
Net debt / market cap (%) 0,9 -0,6 -2,8
Equity ratio (%) 64,8 71,3 77,2
Net IB debt adj. / equity (%) 10,8 -5,9 -22
Current ratio (%) 493,7 391,4 316,7
EBITDA / net interest (%) 426,6 1156,3 3790,3
Net IB debt / EBITDA (%) 60,3 -15,7 -48
Interest cover (%) 300,2 1066,4 3490,3
Lease liability amortisation 0 0 0
Other intangible assets 76 81 89
Right-of-use asset 0 0 0
Total other fixed assets 2 2 2
Leasing liability 0 0 0
Total other long-term liabilities 4 4 4
Net IB debt excl. leasing 23 -16 -73
Net IB debt / EBITDA lease Adj (%) 69 -15,7 -48
SEKm 2021 2022e 2023e
Shares outstanding adj. 13 13 13
Fully diluted shares Adj 13 13 13
EPS 1,13 5,46 8,6
Dividend per share Adj 0,8 3,8 6
EPS Adj 0,74 5,46 8,6
BVPS 16,99 21,67 26,45
BVPS Adj 10,93 15,22 19,37
Net IB debt / share 1,8 -1,3 -5,8
Share price 195,79 207 207
Market cap. (m) 2453 2594 2594
Valuation 2021 2022 2023
P/E 192,1 37,9 24,1
EV/sales 18,09 10,62 6,86
EV/EBITDA 72 25 16,6
EV/EBITA 102,4 27,2 18,1
EV/EBIT 102,4 27,2 18,1
Dividend yield (%) 0,4 1,8 2,9
FCF yield (%) 0,8 1,9 4
P/BVPS 12,74 9,55 7,83
P/BVPS Adj 19,8 13,6 10,69
P/E Adj 291 37,9 24,1
EV/EBITDA Adj 82,5 25 16,6
EV/EBITA Adj 124,8 27,2 18,1
EV/EBIT Adj 124,8 27,2 18,1
EV/cap. employed 9,6 8,2 7,6
Investment ratios 2021 2022 2023
Capex / sales 5,7 4,2 4,8
Capex / depreciation 76,4 127,4 147
Capex tangibles / tangible fixed assets 0,3 2,1 8,5
Capex intangibles / definite intangibles 11,1 11,4 15,8
Depreciation on intangibles / definite intangibles 7,2 5,5 6,8
Depreciation on tangibles / tangibles 12,1 7,9 13,9
Lease adj. FCF yield (%) 0,8 1,9 4

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Media

CTT Systems - Company presentation with CEO Henrik Höjer
CTT Systems - Company presentation with CEO Torbjörn Johansson

Main shareholders - CTT Systems

Main shareholders Share capital % Voting shares % Verified
Tomas Torlöf 13.4 % 13.4 % 27 Jul 2022
SEB Fonder 9.4 % 9.4 % 27 Jul 2022
ODIN Fonder 9.2 % 9.2 % 31 Jul 2022
Rockwell Collins / Collins Aerospace 9.0 % 9.0 % 30 Jun 2022
Nya Jorame Holding AB 4.3 % 4.3 % 27 Jul 2022
Catron Design AB 4.3 % 4.3 % 27 Jul 2022
If Skadeförsäkring AB 4.1 % 4.1 % 27 Jul 2022
Danske Invest 3.0 % 3.0 % 30 Jun 2022
Allianz Global Investors 2.5 % 2.5 % 30 Jun 2022
Christer Torlöf 2.1 % 2.1 % 27 Jul 2022
Source: Holdings by Modular Finance AB

Insider list - CTT Systems

Name Quantity Code Date
Tony Rosendal + 450 BUY 28 Jul 2022
Henrik Höjer + 3 000 BUY 28 Jul 2022
Tony Rosendal + 225 BUY 27 Jul 2022
Henrik Höjer + 500 BUY 25 Jul 2022
Henrik Höjer + 500 BUY 22 Jul 2022
Kaj Ola Häggfeldt + 153 BUY 25 May 2022
Markus Johan Berg + 125 BUY 25 May 2022
Tony Rosendal + 109 BUY 25 May 2022
Stefan Hammar + 86 BUY 25 May 2022
Henrik Höjer - 987 SELL 5 May 2022

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