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GARO

GARO

Products and systems for the electrical installations industry

GARO develops and manufactures innovative and solution-oriented products and systems for the electrical installations industry under its own brand. The product areas consist of electrical distribution, project business, temporary power and EV charging. GARO has a broad product assortment and is a market leader within several product areas. The corporate culture strives for common sense and willingness to move ahead, which is translated to the success factors to offer truly user-friendly solutions and continuing innovation.

Continued product development and new launches have the potential to achieve organic growth exceeding market growth. Potential for geographical expansion and new business areas. Also, on the back of GARO's very solid balance sheet, there are opportunities to grow through value-added acquisitions.

Weaker construction market and lower industry growth. Unexpected competition in the EV charger segment.

SEKm 2019 2020e 2021e
Sales 1017 1114 1196
Sales growth (%) 12,8 9,5 7,3
EBITDA 135 149 159
EBITDA margin (%) 13,3 13,4 13,3
EBIT adj 118 126 134
EBIT adj margin (%) 11,6 11,3 11,2
Pretax profit 113 124 132
EPS rep 8,93 9,67 10,27
EPS growth (%) 8 8,2 6,3
EPS adj 9,33 9,67 10,27
DPS 4,6 5,2 5,5
EV/EBITDA (x) 29 25,8 24,1
EV/EBIT adj (x) 33,3 30,6 28,7
P/E (x) 43,3 40 37,7
P/E adj (x) 41,5 40 37,7
EV/sales (x) 3,9 3,5 3,2
FCF yield (%) 1,6 3,2 1,8
Dividend yield (%) 1,2 1,3 1,4
Net IB debt/EBITDA 0,4 -0,1 -0,3
SEKm 2019 2020e 2021e
Sales 1017 1114 1196
COGS -528 -573 -613
Gross profit 490 542 582
Other operating items -354 -393 -424
EBITDA 135 149 159
Depreciation on tangibles -22 -23 -25
Depreciation on intangibles 0 0 0
EBITA 114 126 134
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 114 126 134
Other financial items 0 0 0
Net financial items -1 -2 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 113 124 132
Tax -24 -27 -29
Net profit 89 97 103
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 89 97 103
EPS 8,93 9,67 10,27
EPS Adj 9,33 9,67 10,27
Total extraordinary items after tax -4 0 0
Tax rate (%) -20,8 -22 -22
Gross margin (%) 48,1 48,6 48,7
EBITDA margin (%) 13,3 13,4 13,3
EBITA margin (%) 11,2 11,3 11,2
EBIT margin (%) 11,2 11,3 11,2
Pretax margin (%) 11,1 11,1 11
Net margin (%) 8,8 8,7 8,6
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 12,8 9,5 7,3
EBITDA growth (%) 5,1 10,1 6,4
EBIT growth (%) -0,1 10,6 6,1
Net profit growth (%) 8 8,2 6,3
EPS growth (%) 8 8,2 6,3
Profitability 2019 2020 2021
ROE (%) 27,7 25,9 24,2
ROE Adj (%) 29 25,9 24,2
ROCE (%) 28,4 26,5 25,4
ROCE Adj(%) 29,4 26,5 25,4
ROIC (%) 23,9 24,9 26,3
ROIC Adj (%) 24,7 24,9 26,3
Adj earnings numbers 2019 2020 2021
EBITDA Adj 139 149 159
EBITDA Adj margin (%) 13,7 13,4 13,3
EBITA Adj 118 126 134
EBITA Adj margin (%) 11,6 11,3 11,2
EBIT Adj 118 126 134
EBIT Adj margin (%) 11,6 11,3 11,2
Pretax profit Adj 117 124 132
Net profit Adj 93 97 103
Net profit to shareholders Adj 93 97 103
Net Adj margin (%) 9,2 8,7 8,6
SEKm 2019 2020e 2021e
EBITDA 135 149 159
Net financial items -1 -2 -2
Paid tax -24 -27 -29
Non-cash items 0 0 0
Cash flow before change in WC 111 120 128
Change in WC -23 -29 -20
Operating cash flow 78 91 107
CAPEX tangible fixed assets -17 33 -36
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 61 125 72
Dividend paid -40 -46 -52
Share issues and buybacks 0 0 0
Other non cash items -32 0 0
Decrease in net IB debt -11 79 20
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 62 60 57
Tangible fixed assets 135 80 94
Other fixed assets 9 9 9
Fixed assets 206 149 160
Inventories 179 196 210
Receivables 227 252 274
Other current assets 0 0 0
Cash and liquid assets 46 124 144
Total assets 658 721 787
Shareholders equity 348 399 449
Minority 0 0 0
Total equity 348 399 449
Long-term debt 102 102 102
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 4 4
Short-term debt 0 0 0
Accounts payable 204 216 232
Other current liabilities 0 0 0
Total liabilities and equity 534 566 658
Net IB debt 57 -22 -41
Net IB debt excl. pension debt 57 -22 -41
Capital invested 408 380 411
Working capital 202 231 252
EV breakdown 2019 2020 2021
Market cap. diluted (m) 3870 3870 3870
Net IB debt Adj 57 -22 -41
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 3927 3848 3829
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 166,3 161,7 158,6
Capital invested turnover (%) 270 282,8 302,2
Capital employed turnover (%) 254,2 234,3 227,2
Inventories / sales (%) 16,8 16,8 16,9
Customer advances / sales (%) 0 0 0
Payables / sales (%) 20,4 18,8 18,7
Working capital / sales (%) 18,8 19,5 20,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 16,3 -5,5 -9,2
Net debt / market cap (%) 2,2 -0,6 -1,1
Equity ratio (%) 52,9 55,3 57,1
Net IB debt adj. / equity (%) 16,3 -5,5 -9,2
Current ratio (%) 221,7 264,4 270,5
EBITDA / net interest (%) 14803,3 7621 8817,2
Net IB debt / EBITDA (%) 41,8 -14,7 -26,1
Interest cover (%) 12437,3 6433,6 7420,8
SEKm 2019 2020e 2021e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 8,93 9,67 10,27
Dividend per share Adj 4,6 5,2 5,5
EPS Adj 9,33 9,67 10,27
BVPS 34,78 39,85 44,92
BVPS Adj 28,59 33,89 39,22
Net IB debt / share 5,7 -2,2 -4,1
Share price 263,43 387 387
Market cap. (m) 2634 3870 3870
Valuation 2019 2020 2021
P/E 43,3 40 37,7
EV/sales 3,86 3,45 3,2
EV/EBITDA 29 25,8 24,1
EV/EBITA 34,5 30,6 28,7
EV/EBIT 34,5 30,6 28,7
Dividend yield (%) 1,2 1,3 1,4
FCF yield (%) 1,6 3,2 1,8
P/BVPS 11,13 9,71 8,61
P/BVPS Adj 13,53 11,42 9,87
P/E Adj 41,5 40 37,7
EV/EBITDA Adj 28,2 25,8 24,1
EV/EBITA Adj 33,3 30,6 28,7
EV/EBIT Adj 33,3 30,6 28,7
EV/cap. employed 8,7 7,7 6,9
Investment ratios 2019 2020 2021
Capex / sales 1,6 -3 3
Capex / depreciation 76,6 -143,9 142,8
Capex tangibles / tangible fixed assets 12,3 -41,6 38,3
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 16,1 28,9 26,8

Equity research

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Media

GARO - Interview with CEO Patrik Andersson (in Swedish)
GARO - Company presentation with CEO Patrik Andersson & CFO Helena Claesson

Main shareholders - GARO

Main shareholders Share capital % Voting shares % Verified
Lars Svensson 35.7 % 35.7 % 31 Dec 2019
Svolder 14.9 % 14.9 % 31 Dec 2019
Nordea Fonder 12.1 % 12.1 % 31 Dec 2019
Stefan Jonsson 5.9 % 5.9 % 31 Dec 2019
Spiltan Fonder 3.6 % 3.6 % 31 Jan 2020
Tredje AP-fonden 3.1 % 3.1 % 31 Dec 2019
Rickard Blomqvist 2.2 % 2.2 % 31 Dec 2018
SEB Fonder 2.2 % 2.2 % 31 Jan 2020
Carnegie Investment Fund - Nordic Equity Fund 1.0 % 1.0 % 31 Dec 2019
Avanza Pension 0.8 % 0.8 % 31 Dec 2019
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Jan Larsgaard - 1 000 SELL 20 Jan 2020
Per John Christer Holmstedt - 1 000 SELL 15 Jan 2020
Per John Christer Holmstedt - 750 SELL 14 Jan 2020
Jan Larsgaard - 1 000 SELL 14 Jan 2020
Per John Christer Holmstedt - 250 SELL 13 Jan 2020
Per John Christer Holmstedt - 750 SELL 10 Jan 2020
Per John Christer Holmstedt - 750 SELL 9 Jan 2020
Per John Christer Holmstedt - 500 SELL 19 Dec 2019
Per Holmstedt - 20 SELL 16 Dec 2019
Per Holmstedt + 20 BUY 26 Aug 2019

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