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Swedencare

Swedencare

Premium animal health products

Swedencare is a high-growth animal health company that develops, promotes and sells OTC premium products within animal dental care. The company's main product, ProDen PlaqueOff, is proprietary, patented until 2021-2028 and sold in more than 50 countries. It reduces the amount of plaque, tartar as well as problems with bleeding gums and the target group is cats and dogs. Following acquisitions of its three largest distribution/sales partners in 2016, Swedencare has around 85% of its sales via direct sales and the remaining from external distributors.

Margin expansion from selling high margin ”PlaqueOff Powder ingredient” to food producers. Growth potential from continued launch of new products and/or products on new markets. We view China, Russia and Brazil as interesting growth markets. The net cash position and solid cash generation also leave room for more M&A and/or future dividends.

Strong dependency on the PlaqueOff formula, for which the patent runs out in 2021 in most markets. Increased competition from larger animal health care companies entering Swedencare’s niche in the animal dental care market. With a poor M&A track record, there are risks for acquisition integration issues and inflated acquisition multiples if Swedencare decides to embark on the M&A path. New product and market launches involve risk and Swedencare has a high release tempo.

SEKm 2020 2021e 2022e
Sales 234 436 504
Sales growth (%) 84,7 86,2 15,4
EBITDA 70 144 168
EBITDA margin (%) 29,7 33,1 33,3
EBIT adj 68 138 161
EBIT adj margin (%) 28,9 31,5 31,9
Pretax profit 64 135 158
EPS rep 2,88 5,34 6,25
EPS growth (%) 52 85,4 17
EPS adj 3,05 5,34 6,25
DPS 0,7 0,75 0,8
EV/EBITDA (x) 91,3 49,5 42,2
EV/EBIT adj (x) 93,7 52 44
P/E (x) 122,1 65,9 56,3
P/E adj (x) 115,4 65,9 56,3
EV/sales (x) 27,1 16,4 14
FCF yield (%) -9,2 1,2 1,5
Dividend yield (%) 0,2 0,2 0,2
Net IB debt/EBITDA 1,2 0,1 -0,4
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 234 436 504
COGS -80 -156 -182
Gross profit 154 280 321
Other operating items -85 -136 -154
EBITDA 70 144 168
Depreciation on tangibles -3 -4 -4
Depreciation on intangibles 0 0 0
EBITA 65 138 161
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 65 138 161
Other financial items 0 0 0
Net financial items -1 -2 -2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 64 135 158
Tax -12 -27 -32
Net profit 51 108 127
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 51 108 127
EPS 2,88 5,34 6,25
EPS Adj 3,05 5,34 6,25
Total extraordinary items after tax -3 0 0
Tax rate (%) -19,5 -20 -20
Gross margin (%) 65,9 64,2 63,8
EBITDA margin (%) 29,7 33,1 33,3
EBITA margin (%) 27,6 31,5 31,9
EBIT margin (%) 27,6 31,5 31,9
Pretax margin (%) 27,2 31 31,4
Net margin (%) 21,9 24,8 25,1
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 84,7 86,2 15,4
EBITDA growth (%) 73,5 107,7 16
EBIT growth (%) 75,5 112,3 16,7
Net profit growth (%) 71,5 111,1 17
EPS growth (%) 52 85,4 17
Profitability 2020 2021 2022
ROE (%) 13,4 15,9 16,2
ROE Adj (%) 14,2 15,9 16,2
ROCE (%) 15,1 17,9 18,4
ROCE Adj(%) 15,8 17,9 18,4
ROIC (%) 12,7 14,8 16,7
ROIC Adj (%) 13,3 14,8 16,7
Adj earnings numbers 2020 2021 2022
EBITDA Adj 72 144 168
EBITDA Adj margin (%) 30,9 33,1 33,3
EBITA Adj 68 138 161
EBITA Adj margin (%) 28,9 31,5 31,9
EBIT Adj 68 138 161
EBIT Adj margin (%) 28,9 31,5 31,9
Pretax profit Adj 67 135 158
Net profit Adj 54 108 127
Net profit to shareholders Adj 54 108 127
Net Adj margin (%) 23,2 24,8 25,1
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 70 144 168
Net financial items -1 -2 -2
Paid tax -12 -27 -32
Non-cash items 0 0 0
Cash flow before change in WC 56 115 134
Change in WC -10 -22 -18
Operating cash flow 46 93 115
CAPEX tangible fixed assets -2 -8 -10
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -622 0 0
Free cash flow -578 85 106
Dividend paid -11 -12 -15
Share issues and buybacks 464 0 0
Other non cash items -27 -21 -7
Decrease in net IB debt -125 67 86
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 351 351 351
Indefinite intangible assets 65 65 65
Definite intangible assets 0 0 0
Tangible fixed assets 264 268 274
Other fixed assets 1 1 1
Fixed assets 684 688 694
Inventories 21 35 48
Receivables 51 79 91
Other current assets 4 8 9
Cash and liquid assets 7 74 160
Total assets 768 883 1002
Shareholders equity 633 726 836
Minority 0 0 0
Total equity 633 726 836
Long-term debt 74 74 74
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 16 16 16
Short-term debt 13 13 13
Accounts payable 7 11 13
Other current liabilities 22 40 46
Total liabilities and equity 768 883 1002
Net IB debt 82 15 -72
Net IB debt excl. pension debt 82 15 -72
Capital invested 731 757 781
Working capital 48 70 89
EV breakdown 2020 2021 2022
Market cap. diluted (m) 6265 7133 7133
Net IB debt Adj 82 15 -72
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 6347 7148 7062
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 51,1 52,9 53,4
Capital invested turnover (%) 57,2 58,6 65,5
Capital employed turnover (%) 54,7 56,7 57,8
Inventories / sales (%) 7,8 6,4 8,2
Customer advances / sales (%) 0 0 0
Payables / sales (%) 2,7 2,1 2,3
Working capital / sales (%) 14,6 13,5 15,8
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 13 2 -8,6
Net debt / market cap (%) 3,2 0,2 -1
Equity ratio (%) 82,4 82,2 83,5
Net IB debt adj. / equity (%) 13 2 -8,6
Current ratio (%) 195,5 299,9 422,1
EBITDA / net interest (%) 6588,7 6562,2 7615,2
Net IB debt / EBITDA (%) 117,9 10,3 -42,8
Interest cover (%) 6141,2 6253,6 7297
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 18 20 20
Fully diluted shares Adj 18 20 20
EPS 2,88 5,34 6,25
Dividend per share Adj 0,7 0,8 0,8
EPS Adj 3,05 5,34 6,25
BVPS 35,56 35,82 41,27
BVPS Adj 15,84 18,5 23,95
Net IB debt / share 4,6 0,7 -3,5
Share price 143,86 352 352
Market cap. (m) 2560 7133 7133
Valuation 2020 2021 2022
P/E 122,1 65,9 56,3
EV/sales 27,08 16,38 14,02
EV/EBITDA 91,3 49,5 42,2
EV/EBITA 98 52 44
EV/EBIT 98 52 44
Dividend yield (%) 0,2 0,2 0,2
FCF yield (%) -9,2 1,2 1,5
P/BVPS 9,9 9,83 8,53
P/BVPS Adj 22,23 19,02 14,69
P/E Adj 115,4 65,9 56,3
EV/EBITDA Adj 87,6 49,5 42,2
EV/EBITA Adj 93,7 52 44
EV/EBIT Adj 93,7 52 44
EV/cap. employed 8,8 8,8 7,6
Investment ratios 2020 2021 2022
Capex / sales 0,8 1,7 1,9
Capex / depreciation 68,2 200,4 239,8
Capex tangibles / tangible fixed assets 0,7 2,8 3,5
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 1 1,4 1,5
N/A N/A N/A

Equity research

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Media

Swedencare - Company presentation with CEO Håkan Lagerberg
Swedencare - Interview with CEO Håkan Lagerberg

Main shareholders - Swedencare

Main shareholders Share capital % Voting shares % Verified
Håkan Svanberg 22.2 % 22.2 % 31 Dec 2020
JCC Group Invest Sweden AB (Johan Bergdahl) 7.5 % 7.5 % 31 Dec 2020
DNCA Finance S.A 6.6 % 6.6 % 31 Dec 2020
Mastan AB (Håkan Lagerberg) 5.3 % 5.3 % 31 Dec 2020
Handelsbanken Fonder 5.0 % 5.0 % 31 Dec 2020
AMF Pension & Fonder 4.8 % 4.8 % 31 Dec 2020
SEB Fonder 4.2 % 4.2 % 31 Dec 2020
Aktia Asset Management 3.3 % 3.3 % 31 Dec 2020
Matthew Shaw 2.8 % 2.8 % 31 Dec 2020
Consensus Asset Management 2.0 % 2.0 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Swedencare

Name Quantity Code Date
Håkan Svanberg + 750 000 Received loan 11 Jan 2021
Håkan Svanberg - 750 000 Received loan 16 Dec 2020
Håkan Svanberg +1 500 000 Received loan 24 Jul 2020
Håkan Svanberg -1 500 000 Received loan 23 Jun 2020
Håkan Svanberg + 5 000 BUY 25 Mar 2020
Håkan Svanberg + 1 945 BUY 18 Mar 2020
Håkan Svanberg + 2 054 BUY 18 Mar 2020
JCC Group Invest Sweden AB + 5 000 BUY 29 Nov 2019
Jenny Graflind - 5 000 SELL 29 Nov 2019
JCC Group Invest Sweden AB - 40 000 SELL 29 Nov 2019

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