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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 1009 1036 1164
Sales growth (%) 11,8 2,7 12,4
EBITDA 136 137 157
EBITDA margin (%) 13,4 13,3 13,5
EBIT adj 117 112 124
EBIT adj margin (%) 11,6 10,8 10,7
Pretax profit 111 101 122
EPS rep 8,66 7,88 9,55
EPS growth (%) 4,7 -9 21,2
EPS adj 9,06 8,11 9,55
DPS 0 5 5,5
EV/EBITDA (x) 22,9 35,1 30,7
EV/EBIT adj (x) 26,5 42,9 38,8
P/E (x) 35,5 61,3 50,5
P/E adj (x) 33,9 59,5 50,5
EV/sales (x) 3,1 4,7 4,1
FCF yield (%) 2,7 1 1,3
Dividend yield (%) 0 1 1,1
Net IB debt/EBITDA 0,3 0 -0,1
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 1009 1036 1164
COGS -518 -526 -594
Gross profit 491 510 571
Other operating items -355 -373 -414
EBITDA 136 137 157
Depreciation on tangibles -22 -27 -33
Depreciation on intangibles 0 0 0
EBITA 113 110 124
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 113 110 124
Other financial items 0 0 0
Net financial items -2 -9 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 111 101 122
Tax -24 -22 -27
Net profit 87 79 96
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 87 79 96
EPS 8,66 7,88 9,55
EPS Adj 9,06 8,11 9,55
Total extraordinary items after tax -4 -2,3 0
Tax rate (%) -21,9 -22,1 -22
Gross margin (%) 48,6 49,3 49
EBITDA margin (%) 13,4 13,3 13,5
EBITA margin (%) 11,2 10,6 10,7
EBIT margin (%) 11,2 10,6 10,7
Pretax margin (%) 11 9,8 10,5
Net margin (%) 8,6 7,6 8,2
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 11,8 2,7 12,4
EBITDA growth (%) 5,1 1,3 14,2
EBIT growth (%) -0,5 -2,8 12,7
Net profit growth (%) 4,7 -9 21,2
EPS growth (%) 4,7 -9 21,2
Profitability 2019 2020 2021
ROE (%) 27,1 20,7 21,6
ROE Adj (%) 28,3 21,3 21,6
ROCE (%) 29,4 23,8 23,5
ROCE Adj(%) 30,4 24,3 23,5
ROIC (%) 24,3 21,4 22,3
ROIC Adj (%) 25,1 21,9 22,3
Adj earnings numbers 2019 2020 2021
EBITDA Adj 140 140 157
EBITDA Adj margin (%) 13,8 13,5 13,5
EBITA Adj 117 112 124
EBITA Adj margin (%) 11,6 10,8 10,7
EBIT Adj 117 112 124
EBIT Adj margin (%) 11,6 10,8 10,7
Pretax profit Adj 115 103 122
Net profit Adj 91 81 96
Net profit to shareholders Adj 91 81 96
Net Adj margin (%) 9 7,8 8,2
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 136 137 157
Net financial items -2 -9 -2
Paid tax -24 -22 -27
Non-cash items 0 0 0
Cash flow before change in WC 109 106 128
Change in WC 6 -47 -32
Operating cash flow 115 59 96
CAPEX tangible fixed assets -33 -9 -35
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 82 50 62
Dividend paid -40 0 -50
Share issues and buybacks 0 0 0
Other non cash items -33 -8 0
Decrease in net IB debt 8 41 12
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 67 82 79
Tangible fixed assets 146 115 120
Other fixed assets 8 7 7
Fixed assets 222 204 206
Inventories 170 189 204
Receivables 225 239 267
Other current assets 0 0 0
Cash and liquid assets 41 90 101
Total assets 657 721 778
Shareholders equity 343 419 464
Minority 0 0 0
Total equity 343 419 464
Long-term debt 78 86 86
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 233 215 226
Other current liabilities 0 0 0
Total liabilities and equity 657 721 778
Net IB debt 38 -4 -15
Net IB debt excl. pension debt 38 -4 -15
Capital invested 384 417 451
Working capital 162 213 245
EV breakdown 2019 2020 2021
Market cap. diluted (m) 3070 4830 4830
Net IB debt Adj 38 -4 -15
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 4826 4815
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 164,9 150,3 155,3
Capital invested turnover (%) 276,6 258,6 268,1
Capital employed turnover (%) 261,5 223,8 220,9
Inventories / sales (%) 16,5 17,3 16,9
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22 21,6 18,9
Working capital / sales (%) 17 18,1 19,7
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 10,9 -0,9 -3,3
Net debt / market cap (%) 1,4 -0,1 -0,3
Equity ratio (%) 52,2 58 59,6
Net IB debt adj. / equity (%) 10,9 -0,9 -3,3
Current ratio (%) 187,2 241 253,2
EBITDA / net interest (%) 5645,8 1544,2 10232,7
Net IB debt / EBITDA (%) 27,7 -2,9 -9,8
Interest cover (%) 4720,8 1238,1 8091,2
N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS 8,66 7,88 9,55
Dividend per share Adj 0 5 5,5
EPS Adj 9,06 8,11 9,55
BVPS 34,3 41,86 46,42
BVPS Adj 27,56 33,64 38,53
Net IB debt / share 3,8 -0,4 -1,5
Share price 263,43 483 483
Market cap. (m) 2634 4830 4830
Valuation 2019 2020 2021
P/E 35,5 61,3 50,5
EV/sales 3,08 4,66 4,13
EV/EBITDA 22,9 35,1 30,7
EV/EBITA 27,4 43,8 38,8
EV/EBIT 27,4 43,8 38,8
Dividend yield (%) 0 1 1,1
FCF yield (%) 2,7 1 1,3
P/BVPS 8,95 11,54 10,41
P/BVPS Adj 11,14 14,36 12,54
P/E Adj 33,9 59,5 50,5
EV/EBITDA Adj 22,3 34,6 30,7
EV/EBITA Adj 26,5 42,9 38,8
EV/EBIT Adj 26,5 42,9 38,8
EV/cap. employed 7,4 9,6 8,8
Investment ratios 2019 2020 2021
Capex / sales 3,3 0,9 3
Capex / depreciation 147,7 33,9 106,4
Capex tangibles / tangible fixed assets 22,5 8 29
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 15,2 23,7 27,3
N/A N/A N/A

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 % 30 Jun 2020
Svolder 14.8 % 14.8 % 31 Aug 2020
Nordea Fonder 11.7 % 11.7 % 31 Jul 2020
Stefan Jonsson 5.9 % 5.9 % 30 Jun 2020
SEB Fonder 5.0 % 5.0 % 18 Sep 2020
Spiltan Fonder 3.6 % 3.6 % 31 Aug 2020
Tredje AP-fonden 2.8 % 2.8 % 30 Jun 2020
Rickard Blomqvist 1.7 % 1.7 % 15 Sep 2020
Carnegie Investment Fund - Nordic Equity Fund 1.3 % 1.3 % 30 Jun 2020
Avanza Pension 0.7 % 0.7 % 30 Jun 2020
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Rickard Blomqvist - 5 862 SELL 15 Sep 2020
Rickard Blomqvist - 4 326 SELL 14 Sep 2020
Rickard Blomqvist - 10 000 SELL 31 Aug 2020
Rickard Blomqvist - 16 857 SELL 28 Aug 2020
Rickard Blomqvist - 15 816 SELL 27 Aug 2020
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
Jan Larsgaard - 1 000 SELL 14 Jan 2020

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