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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 2020 2021e 2022e
Sales 1040 1173 1324
Sales growth (%) 3,1 12,8 12,9
EBITDA 163 195 215
EBITDA margin (%) 15,7 16,6 16,3
EBIT adj 138 165 187
EBIT adj margin (%) 13,3 14 14,1
Pretax profit 123 153 176
EPS rep 9,52 12,05 13,69
EPS growth (%) 11,3 26,6 13,6
EPS adj 9,75 12,05 13,69
DPS 4,75 5 5
EV/EBITDA (x) 39 31,4 28,5
EV/EBIT adj (x) 46 37,2 32,9
P/E (x) 66,7 51,3 45,1
P/E adj (x) 65,1 51,3 45,1
EV/sales (x) 6,1 5,2 4,6
FCF yield (%) -0,6 1 3,4
Dividend yield (%) 0,7 0,8 0,8
Net IB debt/EBITDA 0,1 -0,3 -0,2
N/A N/A N/A
Lease adj. FCF yield (%) -0,6 1 3,4
Lease adj. ND/EBITDA 0,1 -0,3 -0,2
SEKm 2020 2021e 2022e
Sales 1040 1173 1324
COGS -529 -595 -671
Gross profit 511 578 653
Other operating items -348 -383 -437
EBITDA 163 195 215
Depreciation on tangibles -27 -30 -29
Depreciation on intangibles 0 0 0
EBITA 136 165 187
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 136 165 187
Other financial items 0 0 0
Net financial items -13 -11 -11
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 123 153 176
Tax -28 -33 -39
Net profit 95 120 137
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 95 120 137
EPS 9,52 12,05 13,69
EPS Adj 9,75 12,05 13,69
Total extraordinary items after tax -2,3 0 0
Tax rate (%) -22,5 -21,5 -22,1
Gross margin (%) 49,1 49,3 49,3
EBITDA margin (%) 15,7 16,6 16,3
EBITA margin (%) 13,1 14 14,1
EBIT margin (%) 13,1 14 14,1
Pretax margin (%) 11,8 13,1 13,3
Net margin (%) 9,2 10,3 10,3
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 3,1 12,8 12,9
EBITDA growth (%) 20,3 19,7 10,4
EBIT growth (%) 20,1 21 13,4
Net profit growth (%) 11,3 26,6 13,6
EPS growth (%) 11,3 26,6 13,6
Profitability 2020 2021 2022
ROE (%) 24,6 24,6 23
ROE Adj (%) 25,2 24,6 23
ROCE (%) 29,2 28,6 27,2
ROCE Adj(%) 29,7 28,6 27,2
ROIC (%) 25,4 27,2 26,4
ROIC Adj (%) 25,8 27,2 26,4
Adj earnings numbers 2020 2021 2022
EBITDA Adj 165 195 215
EBITDA Adj margin (%) 15,9 16,6 16,3
EBITA Adj 138 165 187
EBITA Adj margin (%) 13,3 14 14,1
EBIT Adj 138 165 187
EBIT Adj margin (%) 13,3 14 14,1
Pretax profit Adj 125 153 176
Net profit Adj 98 120 137
Net profit to shareholders Adj 98 120 137
Net Adj margin (%) 9,4 10,3 10,3
N/A N/A N/A
Depreciation and amortisation -27 -30 -29
Of which leasing depreciation 0 0 0
EO items -2 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 165 195 215
EBITDA lease Adj margin (%) 15,9 16,6 16,3
SEKm 2020 2021e 2022e
EBITDA 163 195 215
Net financial items -13 -11 -11
Paid tax -28 -33 -39
Non-cash items 0 0 0
Cash flow before change in WC 122 151 166
Change in WC -118 -43 -10
Operating cash flow 4 108 155
CAPEX tangible fixed assets -45 -48 54
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow -41 60 210
Dividend paid 0 -48 -50
Share issues and buybacks 0 0 0
Other non cash items 66 48 -163
Decrease in net IB debt 26 60 -3
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 94 94 91
Tangible fixed assets 140 158 241
Other fixed assets 6 6 6
Fixed assets 240 258 338
Inventories 183 220 232
Receivables 251 317 343
Other current assets 0 0 0
Cash and liquid assets 69 137 142
Total assets 743 933 1055
Shareholders equity 430 551 638
Minority 0 0 0
Total equity 430 551 638
Long-term debt 81 89 97
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 228 289 316
Other current liabilities 0 0 0
Total liabilities and equity 743 933 1055
Net IB debt 11 -49 -45
Net IB debt excl. pension debt 11 -49 -45
Capital invested 446 506 597
Working capital 206 248 259
EV breakdown 2020 2021 2022
Market cap. diluted (m) 6350 6180 6180
Net IB debt Adj 11 -49 -45
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 6361 6131 6135
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 148,5 139,9 133,2
Capital invested turnover (%) 250,7 246,3 240,1
Capital employed turnover (%) 223,1 203,8 192,7
Inventories / sales (%) 17 17,2 17,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,2 22 22,9
Working capital / sales (%) 17,7 19,4 19,2
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 2,6 -8,9 -7,1
Net debt / market cap (%) 0,3 -0,8 -0,7
Equity ratio (%) 57,9 59,1 60,4
Net IB debt adj. / equity (%) 2,6 -8,9 -7,1
Current ratio (%) 220,7 233,5 226,7
EBITDA / net interest (%) 1234,8 1749,6 1958,8
Net IB debt / EBITDA (%) 6,9 -25 -21,1
Interest cover (%) 1031,1 1476,2 1697,6
N/A N/A N/A
Lease liability amortisation 0 0 0
Other intangible assets 94 94 91
Right-of-use asset 0 0 0
Total other fixed assets 6 6 6
Leasing liability 0 0 0
Total other long-term liabilities 4 4 4
Net IB debt excl. leasing 11 -49 -45
Net IB debt / EBITDA lease Adj (%) 6,8 -25 -21,1
SEKm 2020 2021e 2022e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 9,52 12,05 13,69
Dividend per share Adj 4,8 5 5
EPS Adj 9,75 12,05 13,69
BVPS 43,03 55,08 63,77
BVPS Adj 33,68 45,73 54,71
Net IB debt / share 1,1 -4,9 -4,5
Share price 403,6 618 618
Market cap. (m) 4036 6180 6180
Valuation 2020 2021 2022
P/E 66,7 51,3 45,1
EV/sales 6,12 5,23 4,63
EV/EBITDA 39 31,4 28,5
EV/EBITA 46,7 37,2 32,9
EV/EBIT 46,7 37,2 32,9
Dividend yield (%) 0,7 0,8 0,8
FCF yield (%) -0,6 1 3,4
P/BVPS 14,76 11,22 9,69
P/BVPS Adj 18,85 13,51 11,3
P/E Adj 65,1 51,3 45,1
EV/EBITDA Adj 38,5 31,4 28,5
EV/EBITA Adj 46 37,2 32,9
EV/EBIT Adj 46 37,2 32,9
EV/cap. employed 12,4 9,6 8,4
Investment ratios 2020 2021 2022
Capex / sales 4,4 4,1 -4,1
Capex / depreciation 168,4 157,7 -188,9
Capex tangibles / tangible fixed assets 32,3 30,4 -22,5
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 19,2 19,3 11,9
N/A N/A N/A
Lease adj. FCF yield (%) -0,6 1 3,4

Equity research

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Media

GARO - Company presentation with CEO Patrik Andersson
GARO - Interview with CEO Patrik Andersson (in Swedish)

Main shareholders - GARO

Main shareholders Share capital % Voting shares % Verified
Lars Svensson 35.7 % 35.7 % 31 Dec 2020
Svolder 9.7 % 9.7 % 31 Dec 2020
Swedbank Robur Fonder 8.0 % 8.0 % 31 Jan 2021
Nordea Fonder 7.2 % 7.2 % 31 Jan 2021
SEB Fonder 5.2 % 5.2 % 31 Jan 2021
Stefan Jonsson 4.8 % 4.8 % 2 Mar 2021
Spiltan Fonder 3.2 % 3.2 % 28 Feb 2021
Tredje AP-fonden 2.5 % 2.5 % 31 Dec 2020
Carnegie Investment Management (DK) 1.4 % 1.4 % 31 Dec 2020
Rickard Blomqvist 1.2 % 1.2 % 7 Jan 2021
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Stefan Jonsson - 5 000 SELL 2 Mar 2021
Stefan Jonsson - 5 000 SELL 1 Mar 2021
Lars-Åke Rydh - 2 500 SELL 15 Feb 2021
GARO Aktiebolag - 2 500 SELL 15 Feb 2021
Rickard Blomqvist - 10 918 SELL 7 Jan 2021
Rickard Blomqvist - 9 082 SELL 5 Jan 2021
Rickard Blomqvist - 10 000 SELL 4 Jan 2021
Stefan Jonsson - 20 000 SELL 17 Dec 2020
Stefan Jonsson - 10 000 SELL 15 Dec 2020
Stefan Jonsson - 40 000 SELL 14 Dec 2020

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