MT Højgaard Holding: ABGSC’s Investor day seminar feedback - ABG

Guidance for ‘21 includes pickup in H2, but looks doable
Next step for MTHH is to focus on balancing projects
CFO confirms a strong pipeline for the next 10+ years

At today’s seminar, MTHH’s CFO reconfirmed the company’s guidance for ’21 of revenue and adj. EBIT of DKK 6.8bn and DKK 160m, respectively, which will lead to a busy second half compared to the slow start with H1’21 revenue of DKK 3.3bn and adj. EBIT of DKK 41m. The CFO confirmed that all segments will contribute to the earnings, but a pick-up in margins is especially driven by the project-development business. The CFO also communicated that when the company has reached its ~4% 2022 EBIT margin target, this will serve as a baseline for the future margin level. This will be supported by the already announced 3 major partnerships and 3 major construction/renovation projects in 2021. It seems that the company is focused on balancing a mix of major projects (DKK 500m+ in rev.) and smaller orders (DKK 100-500m in rev.), along with being an attractive partner on long-term projects and offering a high focus on sustainability.

It is clear that there are a number of strong drivers in the Danish construction market with demand for early-involvement collaboration (e.g. DSB), high demand for renovations (DKK 30bn in Green Housing Agreements), high demand for sustainability (from both public and private customers) and overall large infrastructure plans. Post COVID-19, examples of infrastructure plans include DKK 160bn+ in government programmes including clear investment plans until 2035. The CFO thus announced at the conference that the market looks very interesting for at least the next 10 years with many important projects that the company will bid for. In addition, it seems that customers are willing to pay for higher sustainability standards, which can further support price structures of new contracts, especially in the event of further industry consolidation.

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