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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 five 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 ~1,100 FTEs 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 2021 2022e 2023e
Sales 7203 8094 8014
Sales growth (%) 21 12,4 -1
EBITDA 151 383 471
EBITDA margin (%) 2,1 4,7 5,9
EBIT adj 136 213 303
EBIT adj margin (%) 1,9 2,6 3,8
Pretax profit 41 228 298
EPS rep 8,49 22,57 29,46
EPS growth (%) -0,6 165,8 30,5
EPS adj 16,37 17,06 26,38
DPS 0 0 0
EV/EBITDA (x) 13,3 3,4 2,4
EV/EBIT adj (x) 14,8 6,2 3,7
P/E (x) 25,7 5,7 4,4
P/E adj (x) 13,3 7,5 4,9
EV/sales (x) 0,3 0,2 0,1
FCF yield (%) -26,3 4,7 21,2
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2,8 1,2 0,6
Lease adj. FCF yield (%) -26,3 4,7 21,2
Lease adj. ND/EBITDA 2,1 1,2 0,6
DKKm 2021 2022e 2023e
Sales 7203 8094 8014
COGS -6669 -7455 -7297
Gross profit 534 639 717
Other operating items -383 -256 -246
EBITDA 151 383 471
Depreciation on tangibles -75 -86 -92
Depreciation on intangibles -75 -86 -92
EBITA 0 213 303
Goodwill impairment charges -16 -5 -5
Other impairment and amortisation -37 -34 0
EBIT 127 256 327
Other financial items 0 0 0
Net financial items -34 -28 -29
Associated income 0 0 0
Other EO items -35 0 0
Pretax profit 41 228 298
Tax 41 -52 -68
Net profit 82 176 229
Minority interest -16 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 66 176 229
EPS 8,49 22,57 29,46
EPS Adj 16,37 17,06 26,38
Total extraordinary items after tax -104,2 0 0
Tax rate (%) 100,7 -23 -23
Gross margin (%) 7,4 7,9 9
EBITDA margin (%) 2,1 4,7 5,9
EBITA margin (%) 0 2,6 3,8
EBIT margin (%) 1,8 3,2 4,1
Pretax margin (%) 0,6 2,8 3,7
Net margin (%) 1,1 2,2 2,9
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 21 12,4 -1
EBITDA growth (%) -34,7 153,3 22,9
EBIT growth (%) 140,8 102,1 27,6
Net profit growth (%) 496,1 113,5 30,5
EPS growth (%) -0,6 165,8 30,5
Profitability 2021 2022 2023
ROE (%) 9,9 21,7 22,7
ROE Adj (%) 19,2 16,4 20,3
ROCE (%) 5,6 17,4 19,5
ROCE Adj(%) 9,9 14,5 18,1
ROIC (%) 19,6 14,4 16,6
ROIC Adj (%) 21 11,9 15,4
Adj earnings numbers 2021 2022 2023
EBITDA Adj 203 383 471
EBITDA Adj margin (%) 2,8 4,7 5,9
EBITA Adj 52 213 303
EBITA Adj margin (%) 0,7 2,6 3,8
EBIT Adj 136 213 303
EBIT Adj margin (%) 1,9 2,6 3,8
Pretax profit Adj 102 185 274
Net profit Adj 144 133 205
Net profit to shareholders Adj 127 133 205
Net Adj margin (%) 2 1,6 2,6
Depreciation and amortisation -151 -170 -168
Of which leasing depreciation -61 -68 -67
EO items -52 0 0
Impairment and PPA amortisation 43 43 24
EBITDA lease Adj 203 383 471
EBITDA lease Adj margin (%) 2,8 4,7 5,9
Leasing payments 0 0 0
DKKm 2021 2022e 2023e
EBITDA 151 383 471
Net financial items -34 -28 -29
Paid tax 41 -52 -68
Non-cash items 43 43 24
Cash flow before change in WC 202 346 398
Change in WC -343 -96 15
Operating cash flow -141 250 413
CAPEX tangible fixed assets -108 -121 -120
CAPEX intangible fixed assets -72 -81 -80
Acquisitions and disposals -126 0 0
Free cash flow -447 47 213
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 419 -86 -48
Decrease in net IB debt -49 4 233
Balance Sheet (DKKm) 2021 2022 2023
Goodwill 265 307 331
Indefinite intangible assets 0 0 0
Definite intangible assets 217 165 145
Tangible fixed assets 0 70 140
Other fixed assets 701 695 690
Fixed assets 1453 1571 1651
Inventories 356 632 626
Receivables 2278 2256 2234
Other current assets 0 0 0
Cash and liquid assets 252 213 378
Total assets 4339 4673 4889
Shareholders equity 721 896 1126
Minority 16 16 16
Total equity 737 912 1142
Long-term debt 670 670 670
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 102 102 102
Other long-term liabilities 282 282 282
Capital invested 1267 1481 1546
Working capital 184 280 265
EV breakdown 2021 2022 2023
Market cap. diluted (m) 1697 1000 1000
Net IB debt Adj 419 458 293
Market value of minority 0 0 0
Reversal of shares and participations -104 -147 -171
Reversal of conv. debt assumed equity 0 0 0
EV 2012 1311 1123
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 172,5 179,6 167,6
Capital invested turnover (%) 366,2 408,5 424,8
Capital employed turnover (%) 413,7 457,5 440,2
Inventories / sales (%) 8,5 8,3 8,2
Customer advances / sales (%) 12 11 11,6
Payables / sales (%) 5,8 5,7 5,6
Working capital / sales (%) 1 2,9 3,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 56,9 50,2 25,7
Net debt / market cap (%) 26,1 45,8 29,3
Equity ratio (%) 17 19,5 23,4
Net IB debt adj. / equity (%) 56,9 50,2 25,7
Current ratio (%) 117,8 118,9 124,7
EBITDA / net interest (%) 450,2 1373,2 1629,8
Net IB debt / EBITDA (%) 277,3 119,5 62,3
Interest cover (%) 10,9 678,9 929,7
Short-term debt 1 1 1
Accounts payable 363 450 446
Other current liabilities 2087 2158 2149
Total liabilities and equity 4339 4673 4889
Net IB debt 419 458 293
Net IB debt excl. pension debt 419 458 293
Lease liability amortisation 0 0 0
Other intangible assets 265 294 324
Right-of-use asset 256 188 121
Total other fixed assets 668 711 735
Leasing liability 0 0 0
Total other long-term liabilities 481 481 481
Net IB debt excl. leasing 419 458 293
Net IB debt / EBITDA lease Adj (%) 206,2 119,5 62,3
DKKm 2021 2022e 2023e
Shares outstanding adj. 8 8 8
Fully diluted shares Adj 8 8 8
EPS 8,49 22,57 29,46
Dividend per share Adj 0 0 0
EPS Adj 16,37 17,06 26,38
BVPS 92,59 115,16 144,63
BVPS Adj 24,63 37,84 60,41
Net IB debt / share 53,9 58,8 37,7
Share price 206,78 128,5 128,5
Market cap. (m) 1609 1000 1000
Valuation 2021 2022 2023
P/E 25,7 5,7 4,4
EV/sales 0,28 0,16 0,14
EV/EBITDA 13,3 3,4 2,4
EV/EBITA 0 6,2 3,7
EV/EBIT 15,9 5,1 3,4
Dividend yield (%) 0 0 0
FCF yield (%) -26,3 4,7 21,2
P/BVPS 2,35 1,12 0,89
P/BVPS Adj 8,85 3,4 2,13
P/E Adj 13,3 7,5 4,9
EV/EBITDA Adj 9,9 3,4 2,4
EV/EBITA Adj 38,6 6,2 3,7
EV/EBIT Adj 14,8 6,2 3,7
EV/cap. employed 1,4 0,8 0,6
Investment ratios 2021 2022 2023
Capex / sales 2,5 2,5 2,5
Capex / depreciation 198,4 198,4 198,4
Capex tangibles / tangible fixed assets 0 172,4 85,8
Capex intangibles / definite intangibles 27,2 27,5 24,7
Depreciation on intangibles / definite intangibles 17,2 17,3 15,6
Depreciation on tangibles / tangibles 0 72,4 36
Lease adj. FCF yield (%) -26,3 4,7 21,2

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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 9.2 % 8.0 % 31 Mar 2022
Chr. Augustinus Fabrikker A/S 3.2 % 3.2 % 10 Feb 2022
Lærernes Pension 1.6 % 1.6 % 31 Dec 2021
MT Højgaard Holding A/S 1.5 % 1.5 % 25 Feb 2022
Fundamental Fondsmæglerselskab A/S 1.5 % 1.5 % 31 Jan 2022
Morten Hansen 1.3 % 1.3 % 1 Apr 2022
Maj Invest 0.6 % 0.6 % 31 Mar 2022
Source: Holdings by Modular Finance AB