Danish construction and building materials — laying the foundation

Danish non-residential construction market continues to look robust. Weather data points to a wet start to the year, causing some project delays. We see a less volatile FX environment ahead.

Improving bottom line but visibility still limited

EBIT before special items raised by 4-16%. Slightly below '24 guidance on sales, in line on EBIT. TP unchanged at DKK 77; HOLD reiterated.

Nearing 10Y low, do not see guidance as trigger

We expect guidance of flat organic growth and EBIT before special items of DKK 80-90m. TP DKK 77 (85) , HOLD.

Continued high mortgage activity in Poland in November

Amid depressed market, German mortgage activity ticked up a bit

Permits, starts up 24 and 63% in Poland in October

Xella raises list prices by ~9% in Germany

Another round of estimate cuts

Sales forecasts lowered by 3-5%, EBIT between 8-55%. More confidence needed that consensus has bottomed out. HOLD, TP DKK 85.

2024e forecasts cut by 6%

Lower 2024-25e EBIT forecasts by ~6%. Expect Q3e sales, EBIT to decline by 21 and 58%. HOLD, TP of DKK 85.

Travis Perkins downgrade and recent events

Early sign of spring in Poland?

Looks cheap on '24e but still risks to forecasts

2023-2024 forecasts lowered by 10-77%. Further downside risk cannot be ruled out. HOLD – TP maintained at DKK 85.

Deteriorating conditions in Q3 triggers downgrade

Model update following downgrade

2023e EBIT before special items lowered from DKK 256 to DKK 155m. 2024e-2025e earnings lowered by 14-22%. HOLD. TP lowered to DKK 85 (110).

Finally downgrades, but deeper than expected

Bellway reports uptick in reservations end May but market still tough

No signs of imminent improvement

2023e sales and earnings cut by 9% and 83% due to lower volumes, higher restructuring and impairment charges. TP lowered to DKK 110 and we keep HOLD.

Volume decline of 42% in Q1

Lowered volume outlook for Germany

We forecast 3.4% revenue decline in Q1'23. Volumes down by 16%, pricing a positive 17%. We are below guidance, but do not expect changes in outlook - HOLD, TP DKK 121.

We take a cautious stance on guidance

'23e-'24e sales and EBIT (BSI) up by 4-7%. We are 7-9% below 2023 guidance. TP up to DKK 121 (108), HOLD.