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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 2018 2019e 2020e
Sales 902 956 1015
Sales growth (%) 13,4 6 6,2
EBITDA 129 136 144
EBITDA margin (%) 14,3 14,2 14,2
EBIT adj 114 120 127
EBIT adj margin (%) 12,6 12,5 12,5
Pretax profit 106 118 126
EPS rep 8,27 9,17 9,81
EPS growth (%) -3,4 10,9 7
EPS adj 8,27 9,17 9,81
DPS 4 4,6 5,2
EV/EBITDA (x) 13,8 16,6 15,4
EV/EBIT adj (x) 15,6 18,9 17,5
P/E (x) 21 24,5 22,9
P/E adj (x) 21 24,5 22,9
EV/sales (x) 2 2,4 2,2
FCF yield (%) 2,9 3,4 3,6
Dividend yield (%) 2,3 2 2,3
Net IB debt/EBITDA 0,4 0,1 -0,2
SEKm 2018 2019e 2020e
Sales 902 956 1015
COGS -457 -486 -516
Gross profit 445 470 499
Other operating items -316 -335 -355
EBITDA 129 136 144
Depreciation on tangibles -15 -16 -17
Depreciation on intangibles 0 0 0
EBITA 114 120 127
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 114 120 127
Other financial items 0 0 0
Net financial items -8 -2 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 106 118 126
Tax -23 -26 -28
Net profit 83 92 98
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 83 92 98
EPS 8,27 9,17 9,81
EPS Adj 8,27 9,17 9,81
Total extraordinary items after tax 0 0 0
Tax rate (%) -21,8 -22 -22
Gross margin (%) 49,3 49,2 49,2
EBITDA margin (%) 14,3 14,2 14,2
EBITA margin (%) 12,6 12,5 12,5
EBIT margin (%) 12,6 12,5 12,5
Pretax margin (%) 11,7 12,3 12,4
Net margin (%) 9,2 9,6 9,7
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 13,4 6 6,2
EBITDA growth (%) 16,9 5,3 6,2
EBIT growth (%) 16,1 5,1 5,9
Net profit growth (%) -3,4 10,9 7
EPS growth (%) -3,4 10,9 7
Profitability 2018 2019 2020
ROE (%) 30,1 28,5 26,2
ROE Adj (%) 30,1 28,5 26,2
ROCE (%) 35 34,2 34,7
ROCE Adj(%) 35 34,2 34,7
ROIC (%) 27,8 27,2 27,5
ROIC Adj (%) 27,8 27,2 27,5
Adj earnings numbers 2018 2019 2020
EBITDA Adj 129 136 144
EBITDA Adj margin (%) 14,3 14,2 14,2
EBITA Adj 114 120 127
EBITA Adj margin (%) 12,6 12,5 12,5
EBIT Adj 114 120 127
EBIT Adj margin (%) 12,6 12,5 12,5
Pretax profit Adj 106 118 126
Net profit Adj 83 92 98
Net profit to shareholders Adj 83 92 98
Net Adj margin (%) 9,2 9,6 9,7
SEKm 2018 2019e 2020e
EBITDA 129 136 144
Net financial items -8 -2 -1
Paid tax -23 -26 -28
Non-cash items 0 0 0
Cash flow before change in WC 98 108 115
Change in WC -22 -16 -15
Operating cash flow 73 92 100
CAPEX tangible fixed assets -22 -16 -18
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 51 76 82
Dividend paid -40 -40 -46
Share issues and buybacks 0 0 0
Other non cash items 0 0 0
Decrease in net IB debt 10 36 36
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 55 55 53
Tangible fixed assets 100 101 103
Other fixed assets 10 10 10
Fixed assets 166 166 167
Inventories 162 173 178
Receivables 230 219 229
Other current assets 0 0 0
Cash and liquid assets 8 44 80
Total assets 566 603 655
Shareholders equity 296 348 400
Minority 0 0 0
Total equity 296 348 400
Long-term debt 54 54 54
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 212 197 197
Other current liabilities 0 0 0
Total liabilities and equity 374 534 566
Net IB debt 46 10 -26
Net IB debt excl. pension debt 46 10 -26
Capital invested 335 351 367
Working capital 180 195 211
EV breakdown 2018 2019 2020
Market cap. diluted (m) 1736 2250 2250
Net IB debt Adj 46 10 -26
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 1782 2260 2224
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 164,1 163,7 161,5
Capital invested turnover (%) 281,7 278,6 282,7
Capital employed turnover (%) 277,3 273,4 277,6
Inventories / sales (%) 16,9 17,5 17,3
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,3 21,4 19,4
Working capital / sales (%) 18,7 19,6 20
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) 15,4 2,8 -6,6
Net debt / market cap (%) 2,7 0,4 -1,2
Equity ratio (%) 52,4 57,7 61,1
Net IB debt adj. / equity (%) 15,4 2,8 -6,6
Current ratio (%) 188,9 221,8 247,7
EBITDA / net interest (%) 1591,4 6382,7 14510,2
Net IB debt / EBITDA (%) 35,5 7,2 -18,2
Interest cover (%) 1406,2 5628,5 12764,8
SEKm 2018 2019e 2020e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 8,27 9,17 9,81
Dividend per share Adj 4 4,6 5,2
EPS Adj 8,27 9,17 9,81
BVPS 29,62 34,79 40
BVPS Adj 24,11 29,28 34,67
Net IB debt / share 4,6 1 -2,6
Share price 171,09 225 225
Market cap. (m) 1711 2250 2250
Valuation 2018 2019 2020
P/E 21 24,5 22,9
EV/sales 1,97 2,36 2,19
EV/EBITDA 13,8 16,6 15,4
EV/EBITA 15,6 18,9 17,5
EV/EBIT 15,6 18,9 17,5
Dividend yield (%) 2,3 2 2,3
FCF yield (%) 2,9 3,4 3,6
P/BVPS 5,86 6,47 5,62
P/BVPS Adj 7,2 7,68 6,49
P/E Adj 21 24,5 22,9
EV/EBITDA Adj 13,8 16,6 15,4
EV/EBITA Adj 15,6 18,9 17,5
EV/EBIT Adj 15,6 18,9 17,5
EV/cap. employed 5,2 6,3 5,9
Investment ratios 2018 2019 2020
Capex / sales 2,4 1,7 1,8
Capex / depreciation 146 101,4 105,4
Capex tangibles / tangible fixed assets 21,8 16,2 17,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 14,9 15,9 16,8

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Main shareholders

GARO

Main shareholders Share capital % Voting shares % Verified
Lars Svensson 35.7 % 35.7 % 31 Dec 2018
Svolder 14.9 % 14.9 % 28 Feb 2019
Nordea Fonder 8.7 % 8.7 % 28 Feb 2019
Stefan Jonsson 5.9 % 5.9 % 31 Dec 2018
Tredje AP-fonden 4.8 % 4.8 % 31 Dec 2018
SEB Fonder 4.3 % 4.3 % 28 Feb 2019
Spiltan Fonder 3.9 % 3.9 % 28 Feb 2019
Rickard Blomqvist 2.2 % 2.2 % 1 Nov 2018
Lannebo Fonder 1.1 % 1.1 % 28 Feb 2019
Avanza Pension 0.7 % 0.7 % 31 Dec 2018
Source: Holdings by Modular Finance AB

Insider list

GARO

Name Quantity Code Date
Per John Christer Holmstedt + 45 BUY 10 Apr 2019
Per Holmstedt + 25 BUY 3 Apr 2019
Per John Christer Holmstedt + 40 BUY 2 Apr 2019
Per John Christer Holmstedt + 85 BUY 1 Apr 2019
Per Holmstedt + 40 BUY 29 Mar 2019
Per Holmstedt + 30 BUY 26 Mar 2019
Per Holmstedt + 30 BUY 20 Mar 2019
Rickard Blomqvist + 2 500 BUY 1 Nov 2018
Volador AB + 8 623 BUY 1 Nov 2018
Volador AB + 8 623 BUY 1 Nov 2018

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