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    HANZA   SE0005878543

HANZA HOLDING AB (PUBL)

(HANZA)
  Report
Delayed Quote. Delayed Nasdaq Stockholm - 10/28 05:02:31 am
33.2 SEK   -0.60%
03:41aRedeye research note
PU
10/26HANZA's subsidiary management buys shares for approx. 15 MSEK
AQ
10/26HANZA : Buys German Electronics Manufacturer Helmut Beyers
MT
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Hanza : External analysis ABG Sundal Collier

07/28/2021 | 03:44pm EDT

Equity Research - 28 July 2021 12:07 CET

HANZA

Cluster strategy playing out

  • Q2 EBITA 12% better than ABGSCe on high margins
  • EBITA estimates up 13-15% for '21e-'23e
  • Fair value range raised to SEK 24-39 per share

A solid quarter despite shortages

Sales were in line with our estimates at SEK 634m (1% vs. ABGSCe of SEK 625m, 13% y-o-y and up 10% organically). While most of the end-markets have recovered to pre-pandemic levels, sales to its largest customer, active in the textile the industry, remained low, and even fell short of the corresponding quarter of FY'20. Hanza exceeded its pre-announced EBITA guidance with adj. EBITA of SEK 40m (12% vs. ABGSCe of 36m), resulting in a record adj. EBITA margin of 6.4% (2.7%) vs. ABGSCe of 5.8%. Both segments contributed to the margin expansion, explained by strong markets driving operational leverage. The mature manufacturing clusters achieved low double-digit operating margins, while the clusters that are in the build-up phase had lower margins, resulting in approximately 70% of HANZA having an operating margin of around 10% in Q2'21 (implies that the other 30% had a margin of about -0.2%). Hanza said that without the current component shortages, both sales and earnings would have been slightly higher.

Raised margin assumptions on solid cluster synergies

We leave sales for '21e-'23e relatively unchanged, and expect near-term sales growth to be driven by recovering volumes from its largest customer (textile industry in Germany) and broadly supported by the general industrial recovery seen in Q2'21, which we expect to persist at a high level throughout 2021. We raise '21e-'23e EBITA by 13-15% on higher margin assumptions following the highlighted margin potential in mature clusters. We note some downside risks relating to component shortages in H2'21e.

9x '22e EV/EBITA, 9% FCF yield and 9% '21-'23e EBITA CAGR

The share is trading at 9x '22e EV/EBITA, while offering a 34% '20-'23e adj. EBITA CAGR. In addition, the company says that assessments of acquisition targets are ongoing and will likely lead to more M&A, which would add to our estimates. We increase our fair valuation range to SEK 24-39(22-34) per share based on higher EBITA assumptions and reduced financial risk from the decreasing ND/EBITDA.

Analyst(s): erik.cassel@abgsc.se, +46 8 566 286 25 max.bacco@abgsc.se, +46 708 448 688

SEKm

2019

2020

2021e

2022e

2023e

Sales

2,068

2,155

2,403

2,645

2,823

EBITDA

149

139

227

250

270

EBITDA margin (%)

7.2

6.4

9.4

9.5

9.6

EBIT adj

76

56

131

145

157

EBIT adj margin (%)

3.7

2.6

5.5

5.5

5.6

Pretax profit

32

9

99

108

118

EPS rep

0.72

-0.04

2.16

2.36

2.58

EPS adj

1.63

1.22

2.73

2.80

3.05

Sales growth (%)

14.2

4.2

11.5

10.1

6.7

EPS growth (%)

-3.2

-106.0

5,157.3

9.0

9.5

Source: ABG Sundal Collier, Company data

Reason: Post-results comment

Company sponsored research

Not rated

Estimate changes (%)

2021e

2022e

2023e

Sales

0.3%

0.3%

0.3%

EBIT (rep)

13.9%

16.0%

15.9%

EPS (rep)

24.9%

27.5%

27.0%

Source: ABG Sundal Collier

Share price (SEK)

27/07/2021

24.5

Fair value range (per share)

24-39

Capital Goods, Sweden

HANZA.ST/HANZA SS

MCap (SEKm)

877

MCap (EURm)

86

Net debt (EURm)

46

No. of shares (m)

35.8

Free float (%)

70

Av. daily volume (k)

13

Next event

Q3 report: 09 Nov

Performance

26.0

24.0

22.0

20.0

18.0

16.0

14.0

12.0

10.0

8.0

Sep 18 Nov 18

Sep 19

Nov 19

Jul 20 Sep 20

Nov 20

Jul 18

Jan 19

Mar 19 May 19

Jul 19

Jan 20

Mar 20

May 20

Jan 21 Mar 21

May 21

HANZA

OMX STH PI

1m

3m

12m

Absolute (%)

13.4

33.9

75.6

Source: FactSet

2021e

2022e

2023e

P/E (x)

11.3

10.4

9.5

P/E adj (x)

9.0

8.8

8.0

P/BVPS (x)

1.52

1.38

1.25

EV/EBITDA (x)

5.9

5.2

4.6

EV/EBIT adj (x)

10.2

8.9

7.9

EV/sales (x)

0.56

0.49

0.44

ROE adj (%)

18.6

16.5

16.3

Dividend yield (%)

1.0

3.0

3.2

FCF yield (%)

2.9

8.9

8.4

Lease adj. FCF yld (%)

2.9

8.9

8.4

Net IB debt/EBITDA

2.1

1.7

1.4

Lease adj. ND/EBITDA

1.3

1.0

1.2

Please refer to important disclosures at the end of this report

This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to

constitute an acceptableDocumentminor nondownloaded-monetary benefitby Maria(i.e. notANDERSSONinvestment research)(Hanza)s defined in MiFID II.

HANZA

Company description

HANZA is a manufacturing company founded in 2008 with the vision "all you need is one". This means that it aims to provide a complete manufacturing solution for its clients.

The company's manufacturing expertise spans over solutions within mechanics, electronics, cabling and assembly. HANZA's production sites are formed as clusters serving customers at a local level, with operations in the Nordic, Baltics, Asia and Central Europe.

Risks

HANZA's biggest risk is its exposure towards the overall economic cycle. In a recession, we expect that it will be difficult for HANZA to maintain its 10% sales growth target. Increased competition and consequent price pressure might affect the group negatively. Furthermore, it could be difficult for the company to find and hire the right competence during high-growth periods.

Annual sales and adj. EBIT margin, SEKm

Quarterly sales and adj. EBIT margin

3,000

6.0

700

2,500

5.0

600

2,000

4.0

500

1,500

3.0

400

300

1,000

2.0

200

500

1.0

100

0

0.0

0

2015

2016

2017

2018

2019

2020

2021e

2022e

2023e

Sales (LHS)

Adj EBIT margin % (RHS)

7.0

6.0

5.0

4.0

3.0

2.0

1.0

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

0.0

Q3'21e

Q4'21e

Sales (LHS)

Adj EBIT margin % (RHS)

Source: ABG Sundal Collier, Company data

Source: ABG Sundal Collier, Company data

EPS estimate changes, 2021e, SEK

2.2

2.1

2.0

1.9

1.8

1.7

1.6

1.5

1.4

1.3

1.2

20

20

20

20

20

20

21

21

21

21

21

21

21

Jul

-

Aug

-

Sep

-

Oct

-

Nov

-

Dec

-

Jan

-

Feb

-

Mar

-

Apr

-

May

-

Jun

-

Jul

-

ABGSC

FactSet Consensus Mean

Source: ABG Sundal Collier, FactSet

EPS estimate changes, 2022e, SEK

2.4

2.3

2.2

2.1

2.0

1.9

1.8

1.7

1.6

20

20

20

20

20

20

21

21

21

21

21

21

21

Jul

-

Aug

-

Sep

-

Oct

-

Nov

-

Dec

-

Jan

-

Feb

-

Mar

-

Apr

-

May

-

Jun

-

Jul

-

ABGSC

FactSet Consensus Mean

Source: ABG Sundal Collier, FactSet

Lease adj. net debt and ND/EBITDA

12-monthforward-looking P/E

400

12.0

24.0

350

10.0

22.0

300

8.0

20.0

250

18.0

200

6.0

16.0

150

4.0

14.0

100

12.0

2.0

50

10.0

0

2022e

0.0

8.0

2014

2015

2016

2017

2018

2019

2020

2021e

2023e

Jul-16

Net IB debt excl. leasing (LHS)

Net IB debt/EBITDA lease adj. (RHS)

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

P/E f12m

5y avg

Source: ABG Sundal Collier, Company data

Source: ABG Sundal Collier, Company data

j

28 July 2021

ABG Sundal Collier

2

Document downloaded by Maria ANDERSSON (Hanza)

HANZA

Deviation table

(SEKm)

Last year

Actual

ABGSC

Q2 20

Q2 21

Q2 21e

Dev (%)

Net sales

559.0

633.8

625.5

1%

EBITA

-12.6

40.4

36.1

12%

Adj EBITA

14.9

40.4

36.1

12%

EBIT

-16.1

36.2

32.7

11%

Adj EBIT

11.4

36.2

32.7

11%

Net profit

-19.6

26.0

19.4

34%

EPS

-0.60

0.73

0.54

35%

EBITA margin

-2.3%

6.4%

5.8%

0.6%

Adj EBITA margin

2.7%

6.4%

5.8%

0.6%

EBIT margin

-2.9%

5.7%

Adj EBIT margin

2.0%

5.7%

EO

-27.5

0.0

0.0

Growth y-o-y

Last year

Actual

ABGSC

Dev (%)

Sales

10%

13%

12%

1%

adj. EBITA

-31%

171%

142%

29%

Net Profit

-342%

-233%

Per segment

Last year

Actual

ABGSC

Dev (%)

Sales

Key Markets

306

339

360

-6%

Other Markets

253

295

266

11%

Business Development

0.3

0

0

n.m.

adj. EBITA

Key Markets

10

27

24

13%

Other Markets

5

15

13

11%

Business Development

0.3

-1.1

-1

22%

EBITA margin

Key Markets

3.2%

7.9%

6.6%

1.3%

Other Markets

1.9%

5.0%

5.0%

0.0%

Business Development

Source: ABG Sundal Collier estimates, company data

28 July 2021

ABG Sundal Collier

3

Document downloaded by Maria ANDERSSON (Hanza)

HANZA

Estimate changes

Old

New

Change (%)

Change (SEKm)

2021e

2022e

2023e

2021e

2022e

2023e

2021e

2022e

2023e

2021e

2022e

2023e

Net sales

2,394

2,636

2,813

2,403

2,645

2,823

0%

0%

0%

8

9

9

COGS

-1,278

-1,424

-1,514

-1,271

-1,428

-1,519

0%

0%

0%

6

-5

-5

Gross Profit

1,117

1,213

1,300

1,131

1,217

1,304

1%

0%

0%

14

4

4

Opex

-1,007

-1,088

-1,164

-1,006

-1,072

-1,147

0%

-1%

-1%

1

16

17

EBIT

110

125

136

125

145

157

14%

16%

16%

15

20

22

Adj EBIT

116

125

136

131

145

157

13%

16%

16%

15

20

22

D&A

-102

-105

-113

-102

-106

-113

0%

0%

0%

0

0

0

ow depreciation

-89

-91

-97

-88

-90

-96

-1%

-1%

-1%

1

0

1

ow amortization

-14

-15

-16

-14

-16

-17

6%

6%

6%

-1

-1

-1

EBITDA

212

230

248

227

250

270

7%

9%

9%

15

20

22

EBITA

123

140

152

139

160

174

13%

15%

15%

16

21

22

Adj EBITA

129

140

152

145

160

174

12%

15%

15%

16

21

22

Net financials

-28

-37

-39

-26

-37

-40

-5%

0%

0%

1

0

0

Tax

-20

-22

-24

-21

-23

-26

6%

8%

8%

-1

-2

-2

EO

-6

0

0

-6

0

0

Net profit

62

66

73

77

84

92

25%

27%

27%

15

18

20

EPS diluted (SEK)

1.74

1.85

2.03

2.17

2.36

2.58

25%

27%

27%

0.43

0.51

0.55

Gross margin

46.6%

46.0%

46.2%

47.1%

46.0%

46.2%

0.4%

0.0%

0.0%

EBITA margin

5.2%

5.3%

5.4%

5.8%

6.1%

6.2%

0.6%

0.8%

0.8%

Adj EBITA margin

5.4%

5.3%

5.4%

6.1%

6.1%

6.2%

0.6%

0.8%

0.8%

EBITDA

8.9%

8.7%

8.8%

9.4%

9.5%

9.6%

0.6%

0.7%

0.7%

Source: ABG Sundal Collier estimates, company data

28 July 2021

ABG Sundal Collier

4

Document downloaded by Maria ANDERSSON (Hanza)

HANZA

Detailed financials, quarterly

Quarterly overview, SEKm

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

Sales

498

507

516

548

599

559

503

494

567

634

590

612

COGS

-272

-280

-280

-288

-321

-322

-292

-265

-307

-336

-311

-318

Gross Profit

225

226

236

260

278

237

211

229

260

298

279

294

SG&A

-208

-209

-221

-252

-262

-254

-196

-213

-241

-262

-245

-258

EBIT

17

17

14

8

17

-16

15

15

19

36

34

36

Non-recurring items

-6

-2

-7

-5

0

-28

0

3

-6

0

0

0

Adj. EBIT

23

19

21

13

17

11

15

13

25

36

34

36

Amortisation

-2

-2

-3

-4

-4

-4

-6

-3

-4

-4

-3

-3

Adj. EBITA

25

22

24

17

20

15

21

16

29

40

38

39

Net financial expenses

-6

-5

-8

-5

-7

-4

-6

-5

-7

-6

-7

-7

PTP

11

12

6

3

10

-20

9

11

12

31

28

29

Taxes

-2

-4

-5

3

-3

1

-3

-5

-3

-5

-7

-7

NCI

0

0

0

0

0

0

0

0

0

0

0

0

Net Profit

9

8

1

5

6

-20

7

5

9

26

21

21

Margin and growth metrics

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

Sales growth

13%

0%

20%

27%

20%

10%

-2%

-10%

-5%

13%

17%

24%

Gross margin

45.3%

44.7%

45.7%

47.4%

46.5%

42.5%

41.9%

46.3%

45.9%

47.0%

47.3%

48.0%

EBIT margin

3.5%

3.4%

2.8%

1.5%

2.8%

-2.9%

3.0%

3.1%

3.3%

5.7%

5.8%

5.8%

Adj. EBIT margin

4.6%

3.8%

4.1%

2.4%

2.8%

2.0%

3.0%

2.6%

4.4%

5.7%

5.8%

5.8%

Adj. EBITA margin

5.0%

4.2%

4.7%

3.0%

3.4%

2.7%

4.3%

3.3%

5.0%

6.4%

6.4%

6.4%

Tax rate

20.2%

31.4%

85.2%

-83.3%

32.6%

3.4%

27.5%

50.9%

22.9%

15.3%

25.0%

25.0%

EBIT y-o-y

-6.0%-21.2%-16.4%

n.m

-2.9%

n.m

n.m

n.m

n.m

n.m

125.4%

131.6%

Sales per segment, SEKm

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

Key markets

249

268

287

308

338

306

266

255

301

339

334

349

Other markets

248

239

229

239

261

253

239

238

267

295

255

263

Group

498

507

516

547

599

559

505

494

567

634

590

612

Segment adj. EBITA SEKm

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

Key markets

17

19

28

8

19

10

11

11

19

27

26

28

Other markets

8

2

-1

9

2

5

10

10

10

15

12

12

Business Development

0

0

-3

-1

-1

0

0

-3

-1

-1

-1

-1

Group

25

21

24

16

20

15

21

19

29

40

38

39

NRI

-6

-2

-7

-5

0

-28

0

3

-6

0

0

0

adj. EBITA-margin

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

Key markets

6.7%

7.1%

9.7%

2.7%

5.6%

3.2%

4.3%

4.3%

6.3%

7.9%

7.9%

7.9%

Other markets

3.3%

0.8%

-0.5%

3.8%

0.8%

1.9%

4.3%

4.4%

3.9%

5.0%

4.7%

4.7%

Group

5.0%

4.0%

4.7%

3.0%

3.4%

2.7%

4.2%

3.8%

5.0%

6.4%

6.4%

6.4%

Other metrics R12m

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21e

Q4'21e

FCF conversion

-141%

552%

-5100%

-25%

719%

n.m

74%

1144%

304%

-83%

-434%

35%

ND/EBITDA

3.0

2.7

4.5

3.6

3.4

3.7

3.7

3.2

3.6

2.9

2.3

2.0

NWC / Sales

9%

8%

15%

14%

13%

12%

12%

9%

10%

12%

16%

16%

ROE

5%

4%

2%

5%

4%

-1%

0%

0%

0%

9%

11%

13%

ROIC

5%

5%

3%

4%

4%

2%

2%

3%

3%

7%

8%

9%

Source: ABG Sundal Collier estimates, company data

28 July 2021

ABG Sundal Collier

5

Document downloaded by Maria ANDERSSON (Hanza)

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Hanza Holding AB published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 19:43:07 UTC.


ę Publicnow 2021
All news about HANZA HOLDING AB (PUBL)
03:41aRedeye research note
PU
10/26HANZA's subsidiary management buys shares for approx. 15 MSEK
AQ
10/26HANZA : Buys German Electronics Manufacturer Helmut Beyers
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10/25Hanza Holding AB Expands in Germany - Acquires Electronics Manufacturer
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10/25HANZA : expands in Germany - acquires electronics manufacturer
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10/25HANZA HOLDING AB (OM : HANZA) acquired Helmut Beyers Gmbh from Wolfgang Beyers, Chief Exec..
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10/19HANZA : invites to Q3 presentation on November 9 at 11.oo am
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10/14HANZA : Nomination Committee for the 2022 AGM appointed
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10/14Hanza Holding AB Appoints Nomination Committee
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09/09HANZA : To Invest $3.5 Million In Production Equipment In Finland
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More news
Financials
Sales 2021 2 381 M 277 M 277 M
Net income 2021 77,0 M 8,97 M 8,97 M
Net Debt 2021 467 M 54,4 M 54,4 M
P/E ratio 2021 15,5x
Yield 2021 0,75%
Capitalization 1 195 M 139 M 139 M
EV / Sales 2021 0,70x
EV / Sales 2022 0,62x
Nbr of Employees 1 876
Free-Float 40,7%
Chart HANZA HOLDING AB (PUBL)
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Hanza Holding AB (publ) Technical Analysis Chart | MarketScreener
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Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 0
Last Close Price 33,40 SEK
Average target price 31,50 SEK
Spread / Average Target -5,69%
EPS Revisions
Managers and Directors
Erik Ivar Bertil Stenfors President & Chief Executive Officer
Lars ┼kerblom Chief Financial Officer & Executive Vice President
Francesco Charles FranzÚ Chairman
Andreas Nordin Chief Operating Officer & Senior Vice President
Hňkan HalÚn Director