MT Højgaard Holding: Power of visibility cannot be underestimated - ABG
Q4’21 on track to be another strong quarter…
…and ending ‘21e with a ~DKK 22bn order backlog
Guidance set for ’21-‘22, we maintain FVR
ANNONS
Ajos divestment could lead to opportunities in Scandibygg
Despite market turbulence, MTHH has delivered steady guidance throughout 2019-21. Prior to its Q3, the company on 13 October lifted its organic guidance for ’21 and provided guidance for ‘22. On 6 December, MTHH announced the divestment of Ajos, which we include in this report. We thus lower our FY’21 revenue estimate to DKK 7bn (7.1bn) and EBIT to DKK 179m (192m). MTHH’s Scandibygg business will continue to develop and produce environmentally friendly ‘swan labelled’ pavilions for Ajos, whereas the new owner, Adapteo, will manage the rental business. Adapteo is already a market leader and we believe that Scandibygg could gain market share following the consolidation. For Q4’21, we estimate 22% sales growth, 32% underlying order intake growth and an EBIT margin of 3.1% (vs. Q4’20 of 0.5%).
An impressive order tailwind in ’21, execution on the agenda
On page 3, we show a breakdown of MTHH’s order book exiting ‘21e. Despite no significant orders in Q4’21e, we estimate 32% underlying order intake growth to DKK 2.3bn for a total of DKK 10bn in FY’21e. We thus believe MTHH will end FY’21 with an order book of DKK 11.1bn, DKK 4.2bn in non-consolidated contracts and DKK 6.4bn in framework agreements, for a total of DKK 22bn, almost 4x the company’s 2020 revenue. In our pre-close meeting, it was clear that management continues to see operational leverage options in overhead costs, overall cost scalability and a tailwind in demand from pension funds, where it is well positioned. With established index contracts, inflation risk is low and appetite for more orders and execution remains high moving into 2022. A strategic update is expected at YE’22, when the company’s ‘sustainable >22’ strategy ends, where the focus is on execution.
Tax deductible and non-core divestment, we reiterate FVR
Alon
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