Increasing EBIT guidance by 16% for ‘21e

Guides sales of DKK 8bn and 3.5% EBIT margin for ‘22e

High visibility in cyclical company gives comfort

A more comfortable management on meeting milestones
This afternoon, MTHH increased its guidance for 2021 and published an early forecast for 2022. The company now guides 2021 revenue of DKK 7.1bn (ABGSCe: DKK 6.8bn, Cons. 6.9bn) (prev. DKK 6.8bn) and EBIT b.s.i. of DKK ~185m (ABGSCe: DKK 171m, Cons. DKK 196m) (prev. DKK 160m). This is a 4% and 16% increase in sales and EBIT vs. previous estimate. The margin is thus implicitly increased by 0.2pp to 2.6% and is 8% higher than our estimates and -6% vs. cons. The management says, they are more comfortable in the timing of projects (esp. in MTH DK) and have increased confidence in meeting the milestones of their troubled contracts of Niels Bohr, NAU and Gødstrup. E&P and MTH Project are expected by the management to deliver a solid H2’21, whereas MTH Int. remains in tailwind markets.

Guiding for a strong 2022, despite lower than expectations
As part of the strategic turnaround strategy from 2020 (“Sustainable >22”), the company guided 4% EBIT b.s.i. margin for 2022. However, following a solid order backlog development (DKK >3bn higher), the company now guides revenue of DKK 8bn (ABGSCe: DKK 7.5bn, Cons. DKK 8bn) and EBIT of DKK 280m, a margin of 3.5% and is -12% our estimates and -20% vs. cons. The mgt. notes the start-up of new construction projects on the large backlog dilutes margins as a result and the intake has been a lot stronger than previous assumptions and the company has decided to guide more conservatively as a result. This is especially for MTH DK and MTH Int.

Despite weaker 2022, visibility should give comfort
Despite a weaker earnings guidance for 2022, a strong upgrade for 2021 and higher visibility should give some confidence in the underlying business.

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