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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 1008 1102 1182
Sales growth (%) 11,7 9,4 7,2
EBITDA 135 148 157
EBITDA margin (%) 13,4 13,4 13,3
EBIT adj 117 123 130
EBIT adj margin (%) 11,6 11,1 11
Pretax profit 110 120 128
EPS rep 8,6 9,37 10
EPS growth (%) 4 8,9 6,8
EPS adj 9 9,37 10
DPS 4,2 5 5,5
EV/EBITDA (x) 23 18 17
EV/EBIT adj (x) 26,6 21,8 20,5
P/E (x) 35,7 29,1 27,3
P/E adj (x) 34,1 29,1 27,3
EV/sales (x) 3,1 2,4 2,3
FCF yield (%) 2,7 3,4 2,4
Dividend yield (%) 1,4 1,8 2
Net IB debt/EBITDA 0,3 -0,4 -0,4
SEKm 2019 2020e 2021e
Sales 1008 1102 1182
COGS -518 -568 -606
Gross profit 490 535 576
Other operating items -355 -387 -419
EBITDA 135 148 157
Depreciation on tangibles -22 -25 -27
Depreciation on intangibles 0 0 0
EBITA 113 123 130
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 113 123 130
Other financial items 0 0 0
Net financial items -2 -3 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 110 120 128
Tax -24 -26 -28
Net profit 86 94 100
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 86 94 100
EPS 8,6 9,37 10
EPS Adj 9 9,37 10
Total extraordinary items after tax -4 0 0
Tax rate (%) -22 -22 -22
Gross margin (%) 48,6 48,5 48,7
EBITDA margin (%) 13,4 13,4 13,3
EBITA margin (%) 11,2 11,1 11
EBIT margin (%) 11,2 11,1 11
Pretax margin (%) 10,9 10,9 10,9
Net margin (%) 8,5 8,5 8,5
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 11,7 9,4 7,2
EBITDA growth (%) 4,7 9,9 5,8
EBIT growth (%) -1,1 9 5,4
Net profit growth (%) 4 8,9 6,8
EPS growth (%) 4 8,9 6,8
Profitability 2019 2020 2021
ROE (%) 26,9 24 21,7
ROE Adj (%) 28,2 24 21,7
ROCE (%) 29,2 26,2 24
ROCE Adj(%) 30,2 26,2 24
ROIC (%) 24,1 25 25,1
ROIC Adj (%) 24,9 25 25,1
Adj earnings numbers 2019 2020 2021
EBITDA Adj 139 148 157
EBITDA Adj margin (%) 13,8 13,4 13,3
EBITA Adj 117 123 130
EBITA Adj margin (%) 11,6 11,1 11
EBIT Adj 117 123 130
EBIT Adj margin (%) 11,6 11,1 11
Pretax profit Adj 114 120 128
Net profit Adj 90 94 100
Net profit to shareholders Adj 90 94 100
Net Adj margin (%) 8,9 8,5 8,5
SEKm 2019 2020e 2021e
EBITDA 135 148 157
Net financial items -2 -3 -1
Paid tax -24 -26 -28
Non-cash items 0 0 0
Cash flow before change in WC 108 119 127
Change in WC 18 -59 -27
Operating cash flow 115 60 100
CAPEX tangible fixed assets -33 33 -35
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 82 93 65
Dividend paid -40 -42 -50
Share issues and buybacks 0 0 0
Other non cash items -33 42 0
Decrease in net IB debt 8 93 15
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 67 67 65
Tangible fixed assets 146 87 98
Other fixed assets 8 8 8
Fixed assets 222 163 171
Inventories 170 196 207
Receivables 225 248 271
Other current assets 0 0 0
Cash and liquid assets 41 134 149
Total assets 657 741 798
Shareholders equity 343 437 487
Minority 0 0 0
Total equity 343 437 487
Long-term debt 78 78 78
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 3 3 3
Short-term debt 0 0 0
Accounts payable 233 223 229
Other current liabilities 0 0 0
Total liabilities and equity 657 741 798
Net IB debt 38 -56 -70
Net IB debt excl. pension debt 38 -56 -70
Capital invested 384 384 420
Working capital 162 221 249
EV breakdown 2019 2020 2021
Market cap. diluted (m) 3070 2730 2730
Net IB debt Adj 38 -56 -70
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 3108 2674 2660
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 164,8 157,6 153,6
Capital invested turnover (%) 276,4 287,1 294
Capital employed turnover (%) 261,3 235,5 218,9
Inventories / sales (%) 16,5 16,6 17,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,1 20,7 19,1
Working capital / sales (%) 17 17,4 19,9
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 10,9 -12,8 -14,4
Net debt / market cap (%) 1,4 -2 -2,6
Equity ratio (%) 52,2 58,9 61
Net IB debt adj. / equity (%) 10,9 -12,8 -14,4
Current ratio (%) 187,2 259,4 273,3
EBITDA / net interest (%) 5620,8 5372,7 12084,6
Net IB debt / EBITDA (%) 27,8 -37,6 -44,8
Interest cover (%) 4695,8 4453,7 9982,3
SEKm 2019 2020e 2021e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 8,6 9,37 10
Dividend per share Adj 4,2 5 5,5
EPS Adj 9 9,37 10
BVPS 34,3 43,67 48,67
BVPS Adj 27,56 36,93 42,21
Net IB debt / share 3,8 -5,6 -7
Share price 263,43 273 273
Market cap. (m) 2634 2730 2730
Valuation 2019 2020 2021
P/E 35,7 29,1 27,3
EV/sales 3,08 2,43 2,25
EV/EBITDA 23 18 17
EV/EBITA 27,6 21,8 20,5
EV/EBIT 27,6 21,8 20,5
Dividend yield (%) 1,4 1,8 2
FCF yield (%) 2,7 3,4 2,4
P/BVPS 8,95 6,25 5,61
P/BVPS Adj 11,14 7,39 6,47
P/E Adj 34,1 29,1 27,3
EV/EBITDA Adj 22,4 18 17
EV/EBITA Adj 26,6 21,8 20,5
EV/EBIT Adj 26,6 21,8 20,5
EV/cap. employed 7,4 5,2 4,7
Investment ratios 2019 2020 2021
Capex / sales 3,3 -3 3
Capex / depreciation 147,7 -131,8 130
Capex tangibles / tangible fixed assets 22,5 -38,3 36,1
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 15,2 29 27,8

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 14.8 % 14.8 % 29 Feb 2020
Nordea Fonder 12.0 % 12.0 % 31 Jan 2020
Stefan Jonsson 5.9 % 5.9 % 31 Dec 2019
Spiltan Fonder 3.6 % 3.6 % 29 Feb 2020
Tredje AP-fonden 3.1 % 3.1 % 31 Dec 2019
SEB Fonder 2.2 % 2.2 % 29 Feb 2020
Rickard Blomqvist 2.2 % 2.2 % 31 Dec 2018
Carnegie Investment Fund - Nordic Equity Fund 1.0 % 1.0 % 31 Jan 2020
Avanza Pension 0.8 % 0.8 % 31 Dec 2019
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Daniel Emilsson - 3 000 SELL 24 Feb 2020
Daniel Emilsson - 2 000 SELL 21 Feb 2020
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

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