MT Højgaard Holding: ABGSC’s DK small/mid-cap Seminar feedback - ABG

CEO and CFO presented at our Seminar today

Focus on order-book contract mix (indexed / not indexed)

Has negotiated wage increases of 3%

More resilient order book compared to financial crisis
Today, the management of MT Højgaard presented at our small and mid-cap Seminar in Copenhagen. On the backdrop of a weakish market, the company expressed confidence in the resilience of its record high (DKK 12bn by end of Q222) order book which during the company’s strategy period has been increasingly tilted toward infrastructure-related projects compared to how it was positioned back in 2007/2008.

Has so far not experienced cancellations in Q322
Commenting on the current market situation, management in particular highlighted that the Danish construction market as a whole is negatively impacted by declining activity in the private contracting sector as well as lower tender activity but so far MTH has not experienced any order cancellations in Q322 and highlighted, on the contrary, the strong order intake so far communicated for Q322.
Key topics A recurring topic across today’s presentations has been future wage inflation ahead of collective bargaining agreements later this year. While most DK companies enter their wage regulation periods around the turn of the year, MTH stated that they concluded negotiations in July for a wage increase of 3% which, we could sense, was to the envy of other CEO/CFO’s attending the seminar. Another highly debated topic was the profitability of the order book as it pertains to the mix of cost-indexed versus non-indexed contracts. Not providing specific numbers, the company stated that the profitability issues reported for the Scandi Byg division (5% of group revenues) in Q22 could partially be attributed to fix-cost contracting but that overall, the company has during the currently strategy period focused on contract design in order to mitigate and that its collaboration agreements, due to their phased structure, have shown to be particularly ...
Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/mt-hojgaard-holding/Equity-research/2022/9/mt-hojgaard-holding---abgscs-dk-smallmid-cap-seminar-feedback/