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Semcon

Semcon

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Semcon is an international technology firm that offers a unique combination of digital and physical solutions transforming its customer’s products, services and systems. New products, production units and aftermarket solutions are developed using the latest technology within digitalisation, and with a focus on sustainability. The operations are divided into two business areas: Engineering & Digital Services and Product Information. Customers are found on a global level, mainly in the life science, manufacturing, automotive, telecom and energy industries. Semcon offers both specialist competences and managed services, with offices in seven different countries.

Semcon operates in markets with significant trends that provide opportunities for growth. In the automotive industry, the main trends are sustainability, with focus on electrification, and autonomous driving, which includes other safety and communication technologies. In the industrial sector, the main trend is Industry 4.0, including connectivity, flexibility and efficiency. The life science sector is exposed to trends such as a growing global middle class and an aging population. In recent years, Semcon has started to move away from the dependence on automotive services and it is putting a greater focus on digital services.

Semcon is largely dependent on investment activities in its sectors, such as automotive, industry and life science, which can experience extensive drawdowns in recessions. In addition, Semcon needs to attract and retain qualified employees to sustain its operations. There is a growing shortage of engineers in Sweden, which could lead to higher salaries and difficulties employing and retaining staff as prospective employees have greater bargaining power.

Financials

SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) 4,1 4,5 7,1
Lease adj. ND/EBITDA -1,2 -1,1 -1,3
Sales 1711 1902 1992
Sales growth (%) 5,2 11,1 4,7
EBITDA 222 230 263
EBITDA margin (%) 13 12,1 13,2
EBIT adj 175 208 223
EBIT adj margin (%) 10,2 10,9 11,2
Pretax profit 171 183 218
EPS rep 7,45 8,12 9,68
EPS growth (%) 31,9 9 19,2
EPS adj 7,45 9,24 9,68
DPS 7 4,5 5
EV/EBITDA (x) 9,6 7,6 6,4
EV/EBIT adj (x) 12,2 8,4 7,6
P/E (x) 17 13,1 10,9
P/E adj (x) 17 11,5 10,9
EV/sales (x) 1,2 0,9 0,8
FCF yield (%) 5,6 6,2 8,7
Dividend yield (%) 5,5 4,2 4,7
Net IB debt/EBITDA -0,6 -0,7 -0,8
SEKm 2021 2022e 2023e
Depreciation and amortisation -47 -42 -40
Of which leasing depreciation -34 -32 -30
EO items 0 -20 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 188 218 232
EBITDA lease Adj margin (%) 11 11,5 11,7
Sales 1711 1902 1992
COGS -263 -293 -307
Gross profit 1449 1609 1685
Other operating items -1227 -1379 -1422
EBITDA 222 230 263
Depreciation on tangibles -9 -7 -7
Depreciation on intangibles -3 -2 -2
EBITA 175 188 223
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 175 188 223
Other financial items 0 0 0
Net financial items -4 -5 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 171 183 218
Tax -38 -38 -45
Net profit 133 145 173
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 133 145 173
EPS 7,45 8,12 9,68
EPS Adj 7,45 9,24 9,68
Total extraordinary items after tax 0 -20 0
Tax rate (%) -22,2 -20,6 -20,6
Gross margin (%) 84,7 84,6 84,6
EBITDA margin (%) 13 12,1 13,2
EBITA margin (%) 10,2 9,9 11,2
EBIT margin (%) 10,2 9,9 11,2
Pretax margin (%) 10 9,6 11
Net margin (%) 7,8 7,6 8,7
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 5,2 11,1 4,7
EBITDA growth (%) 22,2 3,7 14,2
EBIT growth (%) 34,7 7,1 18,6
Net profit growth (%) 33,1 9,4 19,2
EPS growth (%) 31,9 9 19,2
Profitability 2021 2022 2023
ROE (%) 17,8 17,3 18,6
ROE Adj (%) 17,8 19,7 18,6
ROCE (%) 20,1 19,7 21,8
ROCE Adj(%) 20,1 21,8 21,8
ROIC (%) 19,8 19,9 22,1
ROIC Adj (%) 19,8 22 22,1
Adj earnings numbers 2021 2022 2023
EBITDA Adj 222 250 263
EBITDA Adj margin (%) 13 13,1 13,2
EBITA Adj 175 208 223
EBITA Adj margin (%) 10,2 10,9 11,2
EBIT Adj 175 208 223
EBIT Adj margin (%) 10,2 10,9 11,2
Pretax profit Adj 171 203 218
Net profit Adj 133 165 173
Net profit to shareholders Adj 133 165 173
Net Adj margin (%) 7,8 8,7 8,7
Leasing payments -34 -32 -30
SEKm 2021 2022e 2023e
Lease liability amortisation -33 -32 -30
Other intangible assets 5 6 6
Right-of-use asset 91 87 87
Total other fixed assets 3 3 3
Leasing liability 91 86 86
Total other long-term liabilities 50 55 58
Net IB debt excl. leasing -217 -245 -301
Net IB debt / EBITDA lease Adj (%) -115,6 -112,4 -129,6
Other fixed assets 10 10 10
Fixed assets 620 634 635
Inventories 0 0 0
Receivables 313 349 360
Other current assets 168 182 198
Cash and liquid assets 254 251 298
Total assets 1355 1416 1491
Shareholders equity 797 883 977
Minority 0 0 0
Total equity 797 883 977
Long-term debt 24 8 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 51 55 59
Other long-term liabilities 0 0 0
Short-term debt 16 0 0
Accounts payable 66 73 50
Other current liabilities 312 310 320
Total liabilities and equity 1355 1416 1491
Net IB debt -126 -159 -215
Net IB debt excl. pension debt -126 -159 -215
Capital invested 720 779 820
Working capital 104 148 189
EV breakdown 2021 2022 2023
Market cap. diluted (m) 2260 1897 1897
Net IB debt Adj -126 -159 -215
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 2134 1738 1682
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 135,9 137,3 137
Capital invested turnover (%) 232,5 252,9 253,3
Capital employed turnover (%) 206,2 206,5 204,1
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 1,3 1,4 1,4
Payables / sales (%) 3,2 2,9 2,7
Working capital / sales (%) 7,1 6,6 8,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -15,8 -18 -22
Net debt / market cap (%) -6,2 -8,4 -11,3
Equity ratio (%) 58,8 62,4 65,5
Net IB debt adj. / equity (%) -15,8 -18 -22
Current ratio (%) 172 187 211,5
EBITDA / net interest (%) 5158,1 5070,6 6086,3
Net IB debt / EBITDA (%) -56,8 -69,2 -81,8
Interest cover (%) 4072,1 4134,9 5157,1
EBITDA 222 230 263
Net financial items -4 -5 -4
Paid tax -38 -38 -45
Non-cash items 15 1 0
Cash flow before change in WC 194 189 213
Change in WC 27 -39 -38
Operating cash flow 221 150 175
CAPEX tangible fixed assets -7 -10 -10
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -88 -23 0
Free cash flow 126 117 165
Dividend paid 0 -125 -81
Share issues and buybacks 0 0 0
Other non cash items -128 77 -7
Decrease in net IB debt 172 -1 55
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 498 518 518
Indefinite intangible assets 0 0 0
Definite intangible assets 8 8 8
Tangible fixed assets 23 21 21
SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) 4,1 4,5 7,1
Shares outstanding adj. 18 18 18
Fully diluted shares Adj 18 18 18
EPS 7,45 8,12 9,68
Dividend per share Adj 7 4,5 5
EPS Adj 7,45 9,24 9,68
BVPS 44,69 49,35 54,6
BVPS Adj 16,48 20,09 25,34
Net IB debt / share -7,1 -8,9 -12
Share price 113,43 106 106
Market cap. (m) 2022 1897 1897
Valuation 2021 2022 2023
P/E 17 13,1 10,9
EV/sales 1,25 0,91 0,84
EV/EBITDA 9,6 7,6 6,4
EV/EBITA 12,2 9,3 7,6
EV/EBIT 12,2 9,3 7,6
Dividend yield (%) 5,5 4,2 4,7
FCF yield (%) 5,6 6,2 8,7
P/BVPS 2,84 2,15 1,94
P/BVPS Adj 7,69 5,27 4,18
P/E Adj 17 11,5 10,9
EV/EBITDA Adj 9,6 6,9 6,4
EV/EBITA Adj 12,2 8,4 7,6
EV/EBIT Adj 12,2 8,4 7,6
EV/cap. employed 2,3 1,8 1,6
Investment ratios 2021 2022 2023
Capex / sales 0,4 0,5 0,5
Capex / depreciation 57,1 87,1 101,8
Capex tangibles / tangible fixed assets 31,4 45,1 47
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 64 44,5 39,4
Depreciation on tangibles / tangibles 41 39,1 34,9

Equity research

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Main shareholders - Semcon

Main shareholders Share capital % Voting shares % Verified
JCE Group 25.9 % 25.9 % 31 May 2022
Nordea Fonder 8.8 % 8.8 % 31 May 2022
Otus Capital Management 8.6 % 8.6 % 31 Mar 2022
Amiral Gestion 5.2 % 5.2 % 19 Apr 2022
Ennismore Fund Management 4.2 % 4.2 % 31 Mar 2022
Allianz Global Investors 3.8 % 3.8 % 31 Dec 2021
Dimensional Fund Advisors 3.1 % 3.1 % 30 Apr 2022
Semcon AB 2.7 % 2.7 % 31 May 2022
Avanza Pension 2.5 % 2.5 % 31 May 2022
Waag & Zübert Value AG 1.7 % 1.7 % 31 Mar 2022
Source: Holdings by Modular Finance AB

Insider list - Semcon

Name Quantity Code Date
Björn Strömberg + 1 334 ALTM 21 Jul 2021
Markus Granlund + 4 047 ALTM 21 Jul 2021
Björn Strömberg - 1 334 SELL 21 Jul 2021
Per Nilsson + 402 ALTM 21 Jul 2021
Karl Thedéen + 2 000 BUY 19 Jul 2021
Carsten Browall + 4 000 BUY 26 May 2021
Johan Per Vilhelm Ekener + 3 382 ALTM 4 May 2021
Carin Wiberg + 1 334 ALTM 4 May 2021
Markus Granlund + 6 138 ALTM 4 May 2021
Björn Strömberg + 2 025 ALTM 4 May 2021

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