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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 2018 2019e 2020e
Sales 322 552 604
Sales growth (%) 62,2 71,2 9,5
EBITDA 20 77 89
EBITDA margin (%) 6,3 14 14,8
EBIT adj 19 56 67
EBIT adj margin (%) 6 10,1 11,1
Pretax profit -4 31 39
EPS rep -0,15 0,38 0,5
EPS growth (%) -330,7 351,2 31,3
EPS adj 0,05 0,38 0,5
DPS 0 0 0
EV/EBITDA (x) 24,4 7,3 5,8
EV/EBIT adj (x) 25,8 10,1 7,8
P/E (x) -33,6 18,2 13,9
P/E adj (x) 110,3 18,2 13,9
EV/sales (x) 1,5 1 0,9
FCF yield (%) -76,4 9,3 10,6
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 10,3 2,2 1,5
SEKm 2018 2019e 2020e
Sales 322 552 604
COGS -95 -126 -135
Gross profit 227 426 469
Other operating items -206 -349 -380
EBITDA 20 77 89
Depreciation on tangibles -4 -8 -8
Depreciation on intangibles -8 -14 -15
EBITA 8 56 67
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 8 56 67
Other financial items 0 0 0
Net financial items -12 -25 -28
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -4 31 39
Tax -3 -7 -8
Net profit -8 24 31
Minority interest -1 -3 -3
Net profit discontinued 0 0 0
Net profit to shareholders -9 21 28
EPS -0,15 0,38 0,5
EPS Adj 0,05 0,38 0,5
Total extraordinary items after tax -11,1 0 0
Tax rate (%) 85,4 -21,2 -20,7
Gross margin (%) 70,4 77,2 77,6
EBITDA margin (%) 6,3 14 14,8
EBITA margin (%) 2,5 10,1 11,1
EBIT margin (%) 2,5 10,1 11,1
Pretax margin (%) -1,3 5,6 6,5
Net margin (%) -2,3 4,4 5,1
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 62,2 71,2 9,5
EBITDA growth (%) 121,6 279,1 16,1
EBIT growth (%) 246,3 588,2 20,8
Net profit growth (%) -998,4 423 27,7
EPS growth (%) -330,7 351,2 31,3
Profitability 2018 2019 2020
ROE (%) -4,2 7,3 8,8
ROE Adj (%) 1,3 7,3 8,8
ROCE (%) 2,4 11,2 13,9
ROCE Adj(%) 5,7 11,2 13,9
ROIC (%) 4,2 8,5 10,5
ROIC Adj (%) 10 8,5 10,5
Adj earnings numbers 2018 2019 2020
EBITDA Adj 31 77 89
EBITDA Adj margin (%) 9,8 14 14,8
EBITA Adj 19 56 67
EBITA Adj margin (%) 6 10,1 11,1
EBIT Adj 19 56 67
EBIT Adj margin (%) 6 10,1 11,1
Pretax profit Adj 7 31 39
Net profit Adj 4 24 31
Net profit to shareholders Adj 3 21 28
Net Adj margin (%) 1,1 4,4 5,1
SEKm 2018 2019e 2020e
EBITDA 20 77 89
Net financial items -12 -25 -28
Paid tax -3 -7 -8
Non-cash items 8 0 0
Cash flow before change in WC 13 46 53
Change in WC -27 -5 -8
Operating cash flow -14 40 46
CAPEX tangible fixed assets -1 -3 -3
CAPEX intangible fixed assets 0 -1 -1
Acquisitions and disposals -204 0 0
Free cash flow -219 36 42
Dividend paid 0 0 0
Share issues and buybacks 127 0 0
Other non cash items -69 0 0
Decrease in net IB debt -161 36 42
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 371 371 371
Indefinite intangible assets 0 0 0
Definite intangible assets 69 56 43
Tangible fixed assets 16 11 6
Other fixed assets 14 14 14
Fixed assets 469 452 434
Inventories 96 106 117
Receivables 87 94 103
Other current assets 0 0 0
Cash and liquid assets 84 120 162
Total assets 737 772 815
Shareholders equity 283 304 332
Minority 8 11 14
Total equity 291 315 346
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 2018 2019 2020
Net debt / equity (%) 72 54,9 38
Net debt / market cap (%) 57,8 44,3 33,7
Equity ratio (%) 39,5 40,8 42,5
Net IB debt adj. / equity (%) 72 54,9 38
Current ratio (%) 207,8 229,6 251,6
EBITDA / net interest (%) 167,8 310,4 318,6
Net IB debt / EBITDA (%) 1029,8 224,4 146,9
Interest cover (%) 66,6 223,8 239
Short-term debt 13 13 13
Accounts payable 116 127 139
Other current liabilities 0 0 0
Total liabilities and equity 191 239 737
Net IB debt 209 173 131
Net IB debt excl. pension debt 209 173 131
Capital invested 523 511 500
Working capital 67 73 80
EV breakdown 2018 2019 2020
Market cap. diluted (m) 287 390 390
Net IB debt Adj 209 173 131
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 496 563 522
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 66,1 73,1 76,2
Capital invested turnover (%) 90,7 106,7 119,6
Capital employed turnover (%) 96,1 111,7 125,2
Inventories / sales (%) 20,3 18,3 18,4
Customer advances / sales (%) 0 0 0
Payables / sales (%) 23,1 22 22
Working capital / sales (%) 16,7 12,7 12,7
SEKm 2018 2019e 2020e
Shares outstanding adj. 56 56 56
Fully diluted shares Adj 56 56 56
EPS -0,15 0,38 0,5
Dividend per share Adj 0 0 0
EPS Adj 0,05 0,38 0,5
BVPS 5,03 5,41 5,91
BVPS Adj -2,8 -2,19 -1,45
Net IB debt / share 3,7 3,1 2,3
Share price 6,44 6,94 6,94
Market cap. (m) 362 390 390
Valuation 2018 2019 2020
P/E -33,6 18,2 13,9
EV/sales 1,54 1,02 0,86
EV/EBITDA 24,4 7,3 5,8
EV/EBITA 61,5 10,1 7,8
EV/EBIT 61,5 10,1 7,8
Dividend yield (%) 0 0 0
FCF yield (%) -76,4 9,3 10,6
P/BVPS 1,01 1,28 1,17
P/BVPS Adj -1,82 -3,17 -4,79
P/E Adj 110,3 18,2 13,9
EV/EBITDA Adj 15,8 7,3 5,8
EV/EBITA Adj 25,8 10,1 7,8
EV/EBIT Adj 25,8 10,1 7,8
EV/cap. employed 1 1,2 1,1
Investment ratios 2018 2019 2020
Capex / sales 0,4 0,7 0,7
Capex / depreciation 10,5 17,9 18,9
Capex tangibles / tangible fixed assets 8,3 25,6 50,8
Capex intangibles / definite intangibles 0 2 2,8
Depreciation on intangibles / definite intangibles 11,5 24,9 33,9
Depreciation on tangibles / tangibles 27,6 70 131,5

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Main shareholders

Allgon

Main shareholders Share capital % Voting shares % Verified
Verdane Capital 32.7 % 32.7 % 17 Aug 2018
Tibia Konsult AB 10.2 % 10.2 % 31 Dec 2018
Arne Wennberg 7.6 % 7.6 % 30 Jun 2018
Danica Pension 5.2 % 5.2 % 31 Dec 2018
Bertil Görling 4.2 % 4.2 % 31 Dec 2018
Jan Robert Pärsson 3.3 % 3.3 % 31 Dec 2018
Nordnet Pensionsförsäkring 3.3 % 3.3 % 31 Dec 2018
Avanza Pension 3.1 % 3.1 % 31 Dec 2018
Svenska Handelsbanken AB for PB 2.9 % 2.9 % 31 Dec 2018
Bo Lengholt 2.8 % 2.8 % 30 Jun 2018
Source: Holdings by Modular Finance AB

Insider list

Allgon

Name Quantity Code Date
Björn Lindblom + 43 194 TECKN 12 Jul 2018
Per Johan Hårdén + 61 326 TECKN 11 Jul 2018

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