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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 are Electrical distribution products, Project business, Temporary power and E-mobility. GARO has a broad product assortment and is a market leader in several product areas. The corporate culture strives for common sense and willingness to move ahead, which it says allows it to offer truly user-friendly solutions with continuous 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 1048 1217 1372
Sales growth (%) 3,7 16,2 12,8
EBITDA 163 217 232
EBITDA margin (%) 15,6 17,8 16,9
EBIT adj 138 185 202
EBIT adj margin (%) 13,2 15,2 14,7
Pretax profit 123 178 191
EPS rep 9,53 14,08 14,88
EPS growth (%) 11,2 47,7 5,7
EPS adj 10,04 14,44 15,29
DPS 4,75 7,04 7,44
EV/EBITDA (x) 39 28,6 26,6
EV/EBIT adj (x) 46 33,5 30,5
P/E (x) 66,6 44,3 41,9
P/E adj (x) 63,2 43,1 40,8
EV/sales (x) 6,1 5,1 4,5
FCF yield (%) 0,7 1,6 1,7
Dividend yield (%) 0,7 1,1 1,2
Net IB debt/EBITDA 0,1 -0,2 -0,2
Lease adj. FCF yield (%) 0,6 1,4 1,5
Lease adj. ND/EBITDA -0,1 -0,3 -0,4
SEKm 2020 2021e 2022e
Sales 1048 1217 1372
COGS -529 -600 -684
Gross profit 519 617 689
Other operating items -356 -401 -457
EBITDA 163 217 232
Depreciation on tangibles -27 -30 -29
Depreciation on intangibles 0 0 0
EBITA 139 189 206
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 136 185 202
Other financial items 0 0 0
Net financial items -13 -7 -11
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 123 178 191
Tax -28 -37 -42
Net profit 95 141 149
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 95 141 149
EPS 9,53 14,08 14,88
EPS Adj 10,04 14,44 15,29
Total extraordinary items after tax -2,3 0 0
Tax rate (%) -22,5 -20,8 -22,1
Gross margin (%) 49,5 50,7 50,2
EBITDA margin (%) 15,6 17,8 16,9
EBITA margin (%) 13,3 15,5 15
EBIT margin (%) 13 15,2 14,7
Pretax margin (%) 11,7 14,6 13,9
Net margin (%) 9,1 11,6 10,8
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 3,7 16,2 12,8
EBITDA growth (%) 20,8 32,8 7,1
EBIT growth (%) 20,9 36 9,3
Net profit growth (%) 11,2 47,7 5,7
EPS growth (%) 11,2 47,7 5,7
Profitability 2020 2021 2022
ROE (%) 24,6 29,5 26,4
ROE Adj (%) 26 30,3 27,2
ROCE (%) 28,8 33,1 31,5
ROCE Adj(%) 29,8 33,8 32,2
ROIC (%) 25,2 31,3 30,4
ROIC Adj (%) 25,6 31,3 30,4
Adj earnings numbers 2020 2021 2022
EBITDA Adj 165 217 232
EBITDA Adj margin (%) 15,8 17,8 16,9
EBITA Adj 141 189 206
EBITA Adj margin (%) 13,5 15,5 15
EBIT Adj 138 185 202
EBIT Adj margin (%) 13,2 15,2 14,7
Pretax profit Adj 128 181 195
Net profit Adj 100 144 153
Net profit to shareholders Adj 100 144 153
Net Adj margin (%) 9,6 11,9 11,1
Depreciation and amortisation -24 -28 -26
Of which leasing depreciation -8 -10 -8
EO items -2 0 0
Impairment and PPA amortisation -3 -4 -4
EBITDA lease Adj 165 217 232
EBITDA lease Adj margin (%) 15,8 17,8 16,9
Leasing payments 0 0 0
SEKm 2020 2021e 2022e
EBITDA 163 217 232
Net financial items -13 -7 -11
Paid tax -37 -37 -42
Non-cash items 0 0 0
Cash flow before change in WC 113 172 178
Change in WC -26 -31 -23
Operating cash flow 87 142 155
CAPEX tangible fixed assets -15 -16 -22
CAPEX intangible fixed assets -25 -25 -27
Acquisitions and disposals 0 0 0
Free cash flow 47 100 106
Dividend paid 0 -48 -70
Share issues and buybacks 0 0 0
Other non cash items -3 6 0
Decrease in net IB debt 26 60 -3
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 46 40 40
Indefinite intangible assets 0 0 0
Definite intangible assets 94 94 91
Tangible fixed assets 102 100 104
Other fixed assets 6 6 6
Fixed assets 240 255 285
Inventories 183 212 232
Receivables 251 291 328
Other current assets 0 0 0
Cash and liquid assets 69 111 136
Total assets 743 869 982
Shareholders equity 430 524 602
Minority 0 0 0
Total equity 430 524 602
Long-term debt 30 25 25
Pension debt 4 4 4
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 4 4
Short-term debt 12 12 12
Accounts payable 192 145 164
Other current liabilities 36 121 137
Total liabilities and equity 743 869 982
Net IB debt 15 -33 -57
Net IB debt excl. pension debt 11 -36 -61
Capital invested 446 491 545
Working capital 206 236 260
EV breakdown 2020 2021 2022
Market cap. diluted (m) 6350 6230 6230
Net IB debt Adj 15 -33 -57
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 6365 6197 6173
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 149,6 150,9 148,3
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 (%) 17,9 18,2 18,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 3,5 -6,2 -9,5
Net debt / market cap (%) 0,4 -0,5 -0,9
Equity ratio (%) 57,9 60,2 61,3
Net IB debt adj. / equity (%) 3,5 -6,2 -9,5
Current ratio (%) 201,1 212,6 215,6
EBITDA / net interest (%) 1245 2954 2041,5
Net IB debt / EBITDA (%) 9,2 -15,1 -24,7
Interest cover (%) 1060,3 2573,8 1816,5
Lease liability amortisation -11 -11 -11
Other intangible assets 48 70 93
Right-of-use asset 39 40 42
Total other fixed assets 6 6 6
Leasing liability 38 38 38
Total other long-term liabilities 1 1 1
Net IB debt excl. leasing -23 -71 -95
Net IB debt / EBITDA lease Adj (%) -13,9 -32,6 -41
SEKm 2020 2021e 2022e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 9,53 14,08 14,88
Dividend per share Adj 4,8 7 7,4
EPS Adj 10,04 14,44 15,29
BVPS 43,03 52,36 60,2
BVPS Adj 33,67 41,41 46,92
Net IB debt / share 1,5 -3,3 -5,7
Share price 403,6 623 623
Market cap. (m) 4036 6230 6230
Valuation 2020 2021 2022
P/E 66,6 44,3 41,9
EV/sales 6,07 5,09 4,5
EV/EBITDA 39 28,6 26,6
EV/EBITA 45,8 32,8 29,9
EV/EBIT 46,8 33,5 30,5
Dividend yield (%) 0,7 1,1 1,2
FCF yield (%) 0,7 1,6 1,7
P/BVPS 14,76 11,9 10,35
P/BVPS Adj 18,86 15,05 13,28
P/E Adj 63,2 43,1 40,8
EV/EBITDA Adj 38,5 28,6 26,6
EV/EBITA Adj 45,1 32,8 29,9
EV/EBIT Adj 46 33,5 30,5
EV/cap. employed 12,4 10,3 9,1
Investment ratios 2020 2021 2022
Capex / sales 3,8 3,4 3,6
Capex / depreciation 240 228,1 283,4
Capex tangibles / tangible fixed assets 14,7 16,1 21
Capex intangibles / definite intangibles 51,1 36,4 29,4
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 16,2 18,2 16,7
Lease adj. FCF yield (%) 0,6 1,4 1,5

Equity research

Read earlier research

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 Mar 2021
Svolder 9.5 % 9.5 % 31 Mar 2021
Swedbank Robur Fonder 8.9 % 8.9 % 31 Mar 2021
SEB Fonder 5.3 % 5.3 % 30 Apr 2021
Stefan Jonsson 4.8 % 4.8 % 31 Mar 2021
Nordea Fonder 4.7 % 4.7 % 5 May 2021
Spiltan Fonder 3.2 % 3.2 % 30 Apr 2021
Tredje AP-fonden 2.5 % 2.5 % 31 Mar 2021
Carnegie Investment Management (DK) 1.3 % 1.3 % 31 Mar 2021
Rickard Blomqvist 1.2 % 1.2 % 7 Jan 2021
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Jan Larsgaard - 5 000 SELL 13 Apr 2021
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

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