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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 2021 2022e 2023e
Sales 3664 4306 4458
Sales growth (%) 10,9 17,5 3,5
EBITDA 474 550 548
EBITDA margin (%) 12,9 12,8 12,3
EBIT adj 382 460 460
EBIT adj margin (%) 10,4 10,7 10,3
Pretax profit 335 437 432
EPS rep 10,63 14,25 14,02
EPS growth (%) 0,1 34 -1,6
EPS adj 11,8 15,41 15,18
DPS 6 7,12 7,01
EV/EBITDA (x) 12,5 9,3 9
EV/EBIT adj (x) 15,5 11,1 10,7
P/E (x) 21 13,4 13,6
P/E adj (x) 18,9 12,4 12,6
EV/sales (x) 1,6 1,2 1,1
FCF yield (%) -1,1 5,3 9
Dividend yield (%) 2,7 3,7 3,7
Net IB debt/EBITDA 1,5 1,3 0,9
Lease adj. FCF yield (%) -2,4 4,2 7,9
Lease adj. ND/EBITDA 1,4 1,1 0,7
SEKm 2021 2022e 2023e
Sales 3664 4306 4458
COGS -2622 -3089 -3190
Gross profit 1041 1217 1268
Other operating items -567 -667 -721
EBITDA 474 550 548
Depreciation on tangibles -47 -48 -48
Depreciation on intangibles 0 0 0
EBITA 410 488 488
Goodwill impairment charges 0 0 0
Other impairment and amortisation -20 -20 -20
EBIT 382 460 460
Other financial items 0 0 0
Net financial items -47 -23 -28
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 335 437 432
Tax -78 -94 -95
Net profit 256 343 337
Minority interest 0 0 1
Net profit discontinued 0 0 0
Net profit to shareholders 256 343 338
EPS 10,63 14,25 14,02
EPS Adj 11,8 15,41 15,18
Total extraordinary items after tax 0 0 0
Tax rate (%) -23,4 -21,5 -22
Gross margin (%) 28,4 28,3 28,5
EBITDA margin (%) 12,9 12,8 12,3
EBITA margin (%) 11,2 11,3 10,9
EBIT margin (%) 10,4 10,7 10,3
Pretax margin (%) 9,1 10,1 9,7
Net margin (%) 7 8 7,6
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 10,9 17,5 3,5
EBITDA growth (%) 4,6 16,1 -0,4
EBIT growth (%) 13,2 20,6 -0,1
Net profit growth (%) 1,3 33,7 -1,8
EPS growth (%) 0,1 34 -1,6
Profitability 2021 2022 2023
ROE (%) 17,9 22,1 19,5
ROE Adj (%) 19,9 23,9 21,1
ROCE (%) 16,3 18,3 17
ROCE Adj(%) 17,5 19,4 18
ROIC (%) 14,3 15,2 14,6
ROIC Adj (%) 14,3 15,2 14,6
Adj earnings numbers 2021 2022 2023
EBITDA Adj 474 550 548
EBITDA Adj margin (%) 12,9 12,8 12,3
EBITA Adj 410 488 488
EBITA Adj margin (%) 11,2 11,3 10,9
EBIT Adj 382 460 460
EBIT Adj margin (%) 10,4 10,7 10,3
Pretax profit Adj 363 465 460
Net profit Adj 284 371 365
Net profit to shareholders Adj 284 371 366
Net Adj margin (%) 7,8 8,6 8,2
Depreciation and amortisation -64 -62 -60
Of which leasing depreciation -55 -57 -64
EO items 0 0 0
Impairment and PPA amortisation -28 -28 -28
EBITDA lease Adj 406 500 498
EBITDA lease Adj margin (%) 11,1 11,6 11,2
Leasing payments -68 -50 -50
SEKm 2021 2022e 2023e
EBITDA 474 550 548
Net financial items -47 -23 -28
Paid tax -43 -94 -95
Non-cash items 102 9 -28
Cash flow before change in WC 486 442 397
Change in WC -266 -37 83
Operating cash flow 220 405 479
CAPEX tangible fixed assets -77 -52 -53
CAPEX intangible fixed assets -6 -13 -13
Acquisitions and disposals -198 -98 0
Free cash flow -61 242 413
Dividend paid -244 -143 -172
Share issues and buybacks -20 0 0
Other non cash items -80 -25 0
Decrease in net IB debt 382 -89 93
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 952 952 952
Indefinite intangible assets 75 65 56
Definite intangible assets 0 0 0
Tangible fixed assets 375 520 577
Other fixed assets 133 164 196
Fixed assets 1810 1949 2006
Inventories 609 603 553
Receivables 509 554 531
Other current assets 3 3 3
Cash and liquid assets 227 276 467
Total assets 3158 3385 3559
Shareholders equity 1451 1651 1817
Minority 9 9 8
Total equity 1460 1660 1825
Long-term debt 776 801 801
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 52 52 52
Accounts payable 257 258 267
Other current liabilities 373 373 373
Total liabilities and equity 3158 3385 3559
Net IB debt 712 688 497
Net IB debt excl. pension debt 712 688 497
Capital invested 2296 2471 2445
Working capital 492 529 446
EV breakdown 2021 2022 2023
Market cap. diluted (m) 5371 4600 4600
Net IB debt Adj 677 653 462
Market value of minority 9 9 8
Reversal of shares and participations -122 -138 -166
Reversal of conv. debt assumed equity 0 0 0
EV 5935 5124 4904
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 121,7 131,6 128,4
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 (%) 10,2 11,8 10,9
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 48,8 41,5 27,2
Net debt / market cap (%) 15,5 15 10,8
Equity ratio (%) 46,2 49 51,3
Net IB debt adj. / equity (%) 46,4 39,3 25,3
Current ratio (%) 197,7 210 224,2
EBITDA / net interest (%) 1008,1 2361,7 1956,9
Net IB debt / EBITDA (%) 150,4 125 90,7
Interest cover (%) 871,7 2095,6 1742,6
Lease liability amortisation -68 -50 -50
Other intangible assets 225 210 196
Right-of-use asset 116 109 95
Total other fixed assets 142 158 186
Leasing liability 111 111 111
Total other long-term liabilities 129 129 129
Net IB debt excl. leasing 566 542 351
Net IB debt / EBITDA lease Adj (%) 139,4 108,3 70,4
SEKm 2021 2022e 2023e
Shares outstanding adj. 24 24 24
Fully diluted shares Adj 24 24 24
EPS 10,63 14,25 14,02
Dividend per share Adj 6 7,1 7
EPS Adj 11,8 15,41 15,18
BVPS 60,25 68,56 75,46
BVPS Adj 20,72 29,03 35,93
Net IB debt / share 29,6 28,6 20,6
Share price 190,88 191 191
Market cap. (m) 4597 4600 4600
Valuation 2021 2022 2023
P/E 21 13,4 13,6
EV/sales 1,62 1,19 1,1
EV/EBITDA 12,5 9,3 9
EV/EBITA 14,5 10,5 10,1
EV/EBIT 15,5 11,1 10,7
Dividend yield (%) 2,7 3,7 3,7
FCF yield (%) -1,1 5,3 9
P/BVPS 3,7 2,79 2,53
P/BVPS Adj 10,76 6,58 5,32
P/E Adj 18,9 12,4 12,6
EV/EBITDA Adj 12,5 9,3 9
EV/EBITA Adj 14,5 10,5 10,1
EV/EBIT Adj 15,5 11,1 10,7
EV/cap. employed 2,5 2 1,8
Investment ratios 2021 2022 2023
Capex / sales 2,2 1,5 1,5
Capex / depreciation 903,3 1291,9 -1671,9
Capex tangibles / tangible fixed assets 20,4 9,9 9,3
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 2,4 1 -0,7
Lease adj. FCF yield (%) -2,4 4,2 7,9

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

Main shareholders - Nordic Waterproofing

Main shareholders Share capital % Voting shares % Verified
Kingspan Group PLC 24.1 % 24.1 % 10 Aug 2022
Handelsbanken Fonder 6.6 % 6.6 % 31 Jul 2022
Alcur Fonder 5.0 % 5.0 % 2 Aug 2022
Tredje AP-fonden 5.0 % 5.0 % 27 Jul 2022
Carnegie Fonder 4.0 % 4.0 % 27 Jul 2022
Cliens Fonder 3.0 % 3.0 % 27 Jul 2022
Danske Invest 2.7 % 2.7 % 30 Jun 2022
Länsförsäkringar Fonder 2.7 % 2.7 % 31 Jul 2022
ODDO BHF Asset Management 2.6 % 2.6 % 31 Jul 2022
Avanza Pension 2.2 % 2.2 % 27 Jul 2022
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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