Q4 EBITDA was SEK 106m vs. our SEK 113m (still a good quarter). The wood protection and joinery segments were below our estimates due to higher raw material costs and lower prices. The EBITDA margin declined q-o-q to 13% (22% in Q3’21) due to lower prices and seasonally weaker volumes. Note that Q4 and Q1 are usually seasonally weaker quarters for Bergs. Bergs sees a stable order intake (good order intake seasonally) and it also expects to compensate for higher raw material costs for the value-added wood product segments. Key sawn goods industry indicators have shown weakness. Inventory levels have increased and new export /domestic orders are down. However, the US prices have risen, and Bergs now sees a positive impact on European prices from higher prices in the US. We expect 2022 to be another good year for the company and we raise our ’22 estimates.
Targeting growth of 10% both organically and through M&A
Bergs is now a more downstream-focused company with less cyclicality in its earnings and exposure to structurally growing end-markets (building with wood is more environmentally friendly). Value added wood products are now 60-70% of its EBITDA. Its remaining assets are modern and well-invested, so cash flow generation will be strong. We see room to grow, both organically and inorganically. Bergs Timber targets growth of 10% p.a. (both organically and via M&A) and has identified organic growth investments of ~SEK 500m for 2021-2023. Bergs has announced several new investments including: 1) organic growth investment in its wood protection segment, 2) the acquisition of PTPG and P&P, and 3) organic growth investment in its Joinery segment. It also has an interesting partnership with OrganoWood and a 25% ownership in Wood Tube, which could enhance growth.
Trading at an EV/EBITDA of ~6.5x for ’22e We expect Bergs ... Läs mer på Introduce
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