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Allgon

Allgon

Manufacturer of industrial radio remote control solutions

Allgon is a world-leading manufacturer of radio remote control solutions for industrial production with customers in the material handling, construction and transport sectors. It develops, manufactures and supplies solutions for industrial radio control to customers around the world. The company also has a long history of working with wireless communication. In recent years Allgon has focused its business on industrial radio control, in which it is one of the five largest manufacturers globally after the acquisition of Tele Radio in 2018, adding 220 employees and SEK 250m in sales to the group.

Allgon has decided to focus its efforts on the segment for industrial radio control solutions, leading to the acquisition of Tele Radio. As a result, Allgon is looking for new homes for its subsidiaries in the Connectivity segment. By streamlining its operations, Allgon wants to gain more exposure to the underlying market for radio remote control solutions, potentially boosting its organic growth and earnings. Also, M&A is possible, as the market for radio remote controllers is highly fragmented with a diverse range of manufacturers around the world.

Allgon acquired Tele Radio in Q3 2018 and management will focus on integrating it into the Allgon group in 2019. However, implementing a relatively large acquisition carries risks in terms of delays, realising synergies and managing foreign subsidiaries. Also, Allgon is sensitive to macroeconomic developments so a downturn in the macro economy could hurt its financial performance. Finally, Allgon operates in a highly technical niche market with highly qualified staff. Potential employees can therefore be hard to find and quite costly to hire.

SEKm 2019 2020e 2021e
Sales 574 508 574
Sales growth (%) 78,2 -11,6 13
EBITDA 96 69 98
EBITDA margin (%) 16,8 13,6 17,2
EBIT adj 65 24 72
EBIT adj margin (%) 11,3 4,8 12,6
Pretax profit 41 -11 48
EPS rep 0,76 -0,38 0,58
EPS growth (%) 600,4 -149,5 253,2
EPS adj 0,76 -0,18 0,58
DPS 0 0 0
EV/EBITDA (x) 8,8 10,4 6,8
EV/EBIT adj (x) 13,1 29,5 9,2
P/E (x) 14,7 -23,9 15,6
P/E adj (x) 14,7 -50,9 15,6
EV/sales (x) 1,5 1,4 1,2
FCF yield (%) 4,2 4,1 9,3
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2,3 3,1 1,7
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 574 508 574
COGS -157 -141 -150
Gross profit 417 367 424
Other operating items -321 -298 -325
EBITDA 96 69 98
Depreciation on tangibles -11 -20 -8
Depreciation on intangibles -11 -28 -12
EBITA 65 13 72
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 65 13 72
Other financial items 0 0 0
Net financial items -24 -24 -24
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 41 -11 48
Tax 6 -8 -12
Net profit 47 -19 36
Minority interest -4 -2 -4
Net profit discontinued 0 0 0
Net profit to shareholders 43 -21 32
EPS 0,76 -0,38 0,58
EPS Adj 0,76 -0,18 0,58
Total extraordinary items after tax 0 -11,2 0
Tax rate (%) 15 72,2 -25
Gross margin (%) 72,6 72,3 73,9
EBITDA margin (%) 16,8 13,6 17,2
EBITA margin (%) 11,3 2,6 12,6
EBIT margin (%) 11,3 2,6 12,6
Pretax margin (%) 7,1 -2,2 8,4
Net margin (%) 8,2 -3,8 6,3
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 78,2 -11,6 13
EBITDA growth (%) 373,8 -28,2 42,5
EBIT growth (%) 700,7 -79,7 453,8
Net profit growth (%) 725,1 -140,8 290,1
EPS growth (%) 600,4 -149,5 253,2
Profitability 2019 2020 2021
ROE (%) 14 -6,7 10,1
ROE Adj (%) 14 -3,2 10,1
ROCE (%) 10,5 2 11,2
ROCE Adj(%) 10,5 3,8 11,2
ROIC (%) 13,1 3,9 9,6
ROIC Adj (%) 13,1 7,2 9,6
Adj earnings numbers 2019 2020 2021
EBITDA Adj 96 80 98
EBITDA Adj margin (%) 16,8 15,8 17,2
EBITA Adj 65 24 72
EBITA Adj margin (%) 11,3 4,8 12,6
EBIT Adj 65 24 72
EBIT Adj margin (%) 11,3 4,8 12,6
Pretax profit Adj 41 0 48
Net profit Adj 47 -8 36
Net profit to shareholders Adj 43 -10 32
Net Adj margin (%) 8,2 -1,6 6,3
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 96 69 98
Net financial items -24 -24 -24
Paid tax 6 -8 -12
Non-cash items 0 17 0
Cash flow before change in WC 79 54 62
Change in WC -18 -1 -11
Operating cash flow 61 52 51
CAPEX tangible fixed assets -6 -3 -3
CAPEX intangible fixed assets -3 -3 -1
Acquisitions and disposals -25 -25 0
Free cash flow 26 21 47
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -40 -17 0
Decrease in net IB debt -13 5 48
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 396 404 404
Indefinite intangible assets 0 0 0
Definite intangible assets 62 48 37
Tangible fixed assets 20 4 -1
Other fixed assets 14 19 19
Fixed assets 511 486 463
Inventories 109 102 115
Receivables 108 102 115
Other current assets 0 0 0
Cash and liquid assets 91 96 144
Total assets 819 784 836
Shareholders equity 325 304 336
Minority 12 14 18
Total equity 337 318 354
Long-term debt 281 281 281
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 9 9 9
Other long-term liabilities 27 27 27
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 65,9 68,3 47,7
Net debt / market cap (%) 49,6 42,9 33,4
Equity ratio (%) 41,2 40,6 42,4
Net IB debt adj. / equity (%) 65,9 68,3 47,7
Current ratio (%) 212,8 231 258,2
EBITDA / net interest (%) 403,7 285,6 410,4
Net IB debt / EBITDA (%) 230,6 314,2 171,8
Interest cover (%) 270,9 54,1 302,1
Short-term debt 13 13 13
Accounts payable 132 117 132
Other current liabilities 0 0 0
Total liabilities and equity 819 784 836
Net IB debt 222 217 169
Net IB debt excl. pension debt 222 217 169
Capital invested 596 572 560
Working capital 85 86 98
EV breakdown 2019 2020 2021
Market cap. diluted (m) 627 506 506
Net IB debt Adj 222 217 169
Market value of minority 0 0 0
Reversal of shares and participations 0 -6 -6
Reversal of conv. debt assumed equity 0 0 0
EV 849 718 670
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 73,8 63,3 70,8
Capital invested turnover (%) 101,4 86,9 101,4
Capital employed turnover (%) 93,1 79,3 88,4
Inventories / sales (%) 17,9 20,7 18,8
Customer advances / sales (%) 0 0 0
Payables / sales (%) 21,6 24,5 21,7
Working capital / sales (%) 13,3 16,9 16
N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 56 56 56
Fully diluted shares Adj 56 56 56
EPS 0,76 -0,38 0,58
Dividend per share Adj 0 0 0
EPS Adj 0,76 -0,18 0,58
BVPS 5,78 5,4 5,98
BVPS Adj -2,36 -2,64 -1,87
Net IB debt / share 4 3,9 3
Share price 7,97 9 9
Market cap. (m) 448 506 506
Valuation 2019 2020 2021
P/E 14,7 -23,9 15,6
EV/sales 1,48 1,41 1,17
EV/EBITDA 8,8 10,4 6,8
EV/EBITA 13,1 54,8 9,2
EV/EBIT 13,1 54,8 9,2
Dividend yield (%) 0 0 0
FCF yield (%) 4,2 4,1 9,3
P/BVPS 1,93 1,67 1,51
P/BVPS Adj -4,72 -3,41 -4,81
P/E Adj 14,7 -50,9 15,6
EV/EBITDA Adj 8,8 8,9 6,8
EV/EBITA Adj 13,1 29,5 9,2
EV/EBIT Adj 13,1 29,5 9,2
EV/cap. employed 1,3 1,1 1
Investment ratios 2019 2020 2021
Capex / sales 1,6 1,3 0,7
Capex / depreciation 43,3 13,8 20,7
Capex tangibles / tangible fixed assets 30 89,5 -223,7
Capex intangibles / definite intangibles 5,5 7 3,1
Depreciation on intangibles / definite intangibles 17,1 59,3 32,3
Depreciation on tangibles / tangibles 55,5 536,1 -596,6
N/A N/A N/A

Equity research

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Media

Allgon - Company presentation with CEO Johan Hårdén & CFO Sten Hildemar
Allgon - Interview with CEO Johan Hårdén (in Swedish)

Main shareholders - Allgon

Main shareholders Share capital % Voting shares % Verified
Verdane Capital 32.7 % 32.7 % 30 Jun 2019
Tibia Konsult AB 10.2 % 10.2 % 30 Jun 2020
Bertil Görling 4.2 % 4.2 % 30 Jun 2020
Futur Pension 4.1 % 4.1 % 30 Jun 2020
Avanza Pension 4.0 % 4.0 % 30 Jun 2020
Jan Robert Pärsson 2.5 % 2.5 % 30 Jun 2020
Ola Samelius 2.5 % 2.5 % 30 Jun 2020
AB Jier 1.7 % 1.7 % 30 Jun 2020
Nordnet Pensionsförsäkring 1.5 % 1.5 % 30 Jun 2020
Elvind LCE AB 1.5 % 1.5 % 30 Jun 2020
Source: Holdings by Modular Finance AB

Insider list - Allgon

Name Quantity Code Date
Per Johan Hårdén + 847 BUY 15 May 2020
Anna Stålenbring + 10 000 BUY 14 May 2020
Anna Stiwne + 339 BUY 27 Mar 2020
Anna Stiwne + 5 000 BUY 27 Mar 2020
Anna Stiwne + 3 000 BUY 25 Mar 2020
Anna Stiwne + 1 661 BUY 25 Mar 2020
Anna Stiwne + 3 000 BUY 19 Mar 2020
Per Johan Hårdén + 3 803 BUY 18 Mar 2020
Per Johan Hårdén + 4 000 BUY 18 Mar 2020
Anna Stiwne + 2 000 BUY 10 Mar 2020

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