216-8-5 SHARE PRICE (SEK): CAVOTEC 22,7 NASDAQ OMX Mid Cap Industrials Improving margins Continued restructuring Slow order intake Improving margins. Given a weak start of the year and bearish management comments our projections for Q2 were not very high. Sales in fact fell organicly by approximately 5%, which was more than we expected but the operating profit of EUR 7.5 m (2,3) was substantially higher than in our forecast. It should be said that EBIT includes positive non-recurring amounting to EUR 3.2 m but even excluding those items the operating margin improved to 8,% (3,9). Cavotec was able to compensate the lack of large order by a number of smaller ones, which obviously had a positive impact on gross margin. In spite of lower sales working capital increased, which led to a negative opertaing cash flow. Management is focusing closely on the subject Continued restructuring. In order to improve profitability management continues to focus on Cavotec s core products as its Alternative Maritime Power (AMP) supply systems for ships and Automated Mooring Systems MoorMaster. In the former product area Cavotec recieved orders amounting to approximately EUR 9 m. MoorMaster also announced two major breakkthroghs in the period. Parallel to this management is working to reduce the number of production units and taking a numbr of steps to lower the administration costs. Slow order intake. The order intake in Q2 fell by almost 2% y/y and management projects that the lack of large orders will continue in the months ahead. However the improved margins in the last quarter shows that some of the steps taken by management is starting to come through. In spite of the fact that we are lowering our sales estimates for the remaining part of the year we are thus keeping our operating profit forecasts unchanged. Our estimates for 217 and beyound is based upon a stronger world economy and shows the effect higher sales would have on profits. COMPANY DESCRIPTION Cavotec is a global engineering group delivering transmission, distribution and control technologies to Ports & Maritime, Airports, Mining & Tunneling and General industry sectors. All design and manufacture takes place in their nine Centres of Excellence. Cavotec has an extensive network of local sales companies in almost 4 countries. Analyst: Claes Vikbladh claes.vikbladh@remium.com, +46 () 8 454 32 94 KEY DATA Market Capitalization (MSEK SHARE PERFORMANCE 1 782 1 mon. (%) 1,2 Net Debt (MSEK) 477 3 mon. (%) 6,1 Enterprise Value (MSEK) 2 259 12 mon. (%) -18,6 Equity ratio(%) 55 YTD (%) -8,8 No of shares.(mn) 78,5 52-V High 29,4 No of shares (dil.mn) 78,5 52-V Low 2, Free Float (%) 83,5 Ticker CCC 214A 215A 216E 217E Sales (MEUR) 233 232 218 244 EBITDA (MEUR) 17, 12,4 21,3 25, EBIT (MEUR) 12,6 7,6 16,6 19,9 EBT (MEUR) 16,2 12,8 14,8 18,5 EPS (adj. EUR),13,9,8,16 DPS (EUR),4,3,3,4 Sales growth (%) 3-1 -3 9 EPS growth (%) -11-28 -11 93 EBIT-margin (%) 3,3 7,6 8,2 1,3 214A 215A 216E 217E P/E (x) 21,3 34,1 19,3 15, P/BV (x) 1,6 1,5 1,3 1,2 EV/Sales (x) 1, 1,,9,8 EV/EBITDA (x) 14, 18,9 9,6 7,7 EV/EBIT (x) 18,9 26,6 15,3 9,7 Div. Yield (%) 1,5 1,1 1,3 1,7 STOCK PERFORMANCE 3 28 26 24 22 2 18 215-7-31 215-1-23 216-1-22 216-4-19 216-7-15 CCC OMXSPI (rebased) Source: Infront, company reports, Remium Nordic, Holdings MAJOR SHARHOLDERS CAPITAL Bure Equity AB 16,5%,165 16,5% Fabio Cannavale 9,3% 9,3% LCL International Life Assurance Co. 9,2% 9,2% Stefan Widegren 7,4% 7,4% MANAGEMENT Chairman Stefan Widengren 3Q-report CEO Ottonel Popesco 4Q-report CFO Kristiina Leppänen FINANCIAL CALENDER VOTES 216-11-3 217-2-22 Viktig information: All information kring ansvarsbegränsningar och potentiella intressekonflikter finns att läsa i slutet av dokumentet Remium Nordic AB 1
INCOME STATEMENT MEUR 1Q15A 2Q15A 3Q15A 4Q15A 1Q16A 2Q16A 3Q16E 4Q16E 213A 214A 215A 216E 217E 218E Sales 41,3 58,8 53,3 78,8 46,1 53,9 51, 67, 227,7 232,8 232,2 218, 243,6 253, COGS -19,5-27,6-26, -4,5-22, -24,2-24,1-32,1-119, -116, -113,6-12,4-112,5-113,9 Gross revenue 23, 32,4 29,1 4,3 25,3 35,1 29,5 37,7 114,6 124,9 124,6 127,6 137, 145,2 Operating costs -25,5-28,7-27,8-3,3-26,6-26,5-25, -28,1-99,6-17,9-112,3-16,2-112, -113,9 EBITDA -2,5 3,7 1,3 9,9-1,3 8,6 4,5 9,5 15, 17, 12,4 21,3 25, 31,3 Depreciation -1,1-1,3-1,1-1,2-1,1-1,2-1,2-1,2-4,5-4,5-4,8-4,7-5,1-5,2 EBIT -3,6 2,3,2 8,8-2,4 7,4 3,3 8,3 1,5 12,6 7,6 16,6 19,9 26,1 Net financials 6,1,2 -,4 -,7-1,3,2 -,4 -,4-1,6 3,7 5,2-1,9-1,4-1,3 EBT 2,5 2,6 -,2 8, -3,7 7,6 2,9 8, 8,9 16,2 12,8 14,8 18,5 24,8 Tax & minorities -,7-1,8-3,6 -,5 -,2-1,6 -,9-2,4 1,5-6, -6,7-5,1-5,9-7,9 Net result 1,7,8-3,8 7,5-3,9 6, 2, 5,6 1,5 1,2 6,1 9,7 12,6 16,8 EPS (EUR),2,1 -,5,1 -,5,8,3,7,15,13,8,12,16,21 Adj EPS (EUR),2,1 -,5,11 -,5,4,3,7,15,13,9,8,16,21 Sales Growth Q/Q -44% 41% -8% 47% -41% 25% -1% 3% N/A N/A N/A N/A N/A N/A Sales Growth Y/Y 1% 1% -2% 7% 12% -1% -3% -14% 4% 3% -1% -3% 9% 4% Adj. EBITDA margin -6% 6% 2% 13% -3% 16% 9% 14% 7% 7% 5% 1% 1% 12% Adj. EBIT margin -9% 4% % 11% -5% 14% 6% 12% 5% 5% 3% 8% 8% 1% Adj. EBT margin 6% 4% % 12% -8% 8% 6% 12% 4% 7% 6% 5% 8% 1% CASH FLOW PER SHARE DATA & RETURN ON CAPITAL MEUR 213A 214A 215A 216E 217E 218E EUR 213A 214A 215A 216E 217E 218E Cash flow b.f. ch. in work.cap. 7 1 9 1 18 22 EPS,15,13,8,12,16,21 Change in working capital -8-11 -9 3 2-2 Adj. EPS,15,13,9,8,16,21 Cash flow from operating activities -1-1 13 2 2 BVPS (SEK) 13,48 16,48 16,35 17,88 19,2 2,68 Cash flow from investments -5-3 -2-4 -4-4 CEPS -,1 -,1,,17,25,26 Free Cash Flow -6-4 -2 9 16 16 DPS,4,4,3,3,4,4 Cash flow from financing 14 3 4 4-3 -3 ROE 1% 8% 4% 7% 8% 1% Net Cash Flow 8-1 2 13 13 13 Adj. ROE 8% 7% 5% 4% 8% 1% Solidity 57% 54% 54% 57% 56% 58% BALANCE SHEET MEUR 213A 214A 215A 216E 217E 218E SHARE STRUCTURE Intanglible Assets 66 69 72 71 71 71 No. of A-shares (m) - Via S. Balestra 27 CH-69 Lugano, Cash and cash equivalent 14 17 21 32 45 58 No. of B-shares (m) 78,5 Switzerland Total Assets Equity Net Debt Net Working Capital 22 242 26 26 279 295 Total no. of shares (m) 78,5 +41 91 911 4 1 19 138 14 148 157 171 www.cavotec.com 36 2 25 18 5-8 46 54 5 51 49 51 Sources: Infront, Company reports, Remium Nordic COMPANY CONTACT ESTIMATE CHANGES 2Q 216A 216E 217E MEURO Estimate Actual Diff (%) Before Now Diff (%) Before Now Diff (%) Sales 57, 53,9-5% 227, 218, -4% 244,6 243,6 % EBIT 2,6 7,4 nmf 1,4 16,6 6% 18,9 19,9 5%,2,8,5,8,15,16 Adj EPS (EUR) nmf 66% 7% Remium Nordic AB 2
INCOME STATEMENT SALES & EBIT, Y/Y (MSEK) SALES & EBIT-MARGIN, Q/Q (MSEK) 3 25 2 15 1 5 21A 211A 212A 213A 214A 215A 216E 217E 218E 3 25 2 15 1 5 9 8 7 6 5 4 3 2 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Q43EQ4E 212 213 214 215 216 15% 1% 5% % -5% -1% Sales EBIT Sales EBIT-margin GROWTH & BALANCE SHEET SALES GROWTH Y/Y NET DEBT & NET DEBT/EBITDA 4% 3% 2% 1% % -1% -2% -3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q43E Q4E 213 214 215 216 4 35 3 25 2 15 1 5-5 -1-15 21A 211A 212A 213A 214A 215A 216E 217E 218E Net debt Net debt/ebitda 3,X 2,5X 2,X 1,5X 1,X,5X,X -,5X MARGINS, ROLLING 12m GROSS MARGIN (R12m) EBIT-MARGIN (R12m) 6% 58% 56% 54% 52% 5% 48% 46% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q43EQ4E 9% 8% 7% 6% 5% 4% 3% 2% 1% % Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q43EQ4E 213 214 215 216 213 214 215 216 Gross margin EBIT-margin Remium Nordic AB 3
COMPANY SPECIFICS SALES BREAKDOWN MARKET UNITS (%)* ORDER BOOK BREAKDOWN MARKET UNITS (%)* Ports & Maritime Ports & Maritime Airports Airports Mining & Tunnelling General Industry Mining & Tunnelling General Industry * Per annual report 215 COMPANY DESCRIPTION Cavotec is a global engineering group that enables industries worldwide to improve productivity, safety and sustainability. The Group delivers power transmission, distribution and control technologies that form the link between fixed and mobile equipment in the Ports & Maritime, Airports, Mining & Tunnelling and General Industry sectors. All design and manufacture of Cavotec systems takes place at nine Centres of Excellence. Sales companies in 35 countries provide for a global network of engineering expertise. Among Cavotec s current innovative products MoorMaster provide for one of the highest potentials. The product is built upon a vacuum-based automated mooring technology that eliminates the need for conventional mooring lines. Remote controlled vacuum pads recessed in, or mounted on the quayside or pontoons, moor or release vessels in second. The financial goals incorporate an organic growth of 1% CAGR and an EBIT margin of 12% over the coming years. Remium Nordic AB 4
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