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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
Lease adj. FCF yield (%) -10,4 -0,2 1,3
Lease adj. ND/EBITDA 0,2 -2,1 -0,8
Sales 240 574 677
Sales growth (%) 89,4 139 17,9
EBITDA 65 164 199
EBITDA margin (%) 27,1 28,6 29,3
EBIT adj 66 158 191
EBIT adj margin (%) 27,3 27,4 28,1
Pretax profit 59 154 187
EPS rep 2,8 5,83 7,08
EPS growth (%) 47,4 108,4 21,4
EPS adj 3,1 5,83 7,08
DPS 0,8 2,33 2,83
EV/EBITDA (x) 84,5 54,9 45,1
EV/EBIT adj (x) 84 57,2 47
P/E (x) 116,2 74,1 61
P/E adj (x) 104,9 74,1 61
EV/sales (x) 22,9 15,7 13,2
FCF yield (%) -10,4 -0,2 1,3
Dividend yield (%) 0,2 0,5 0,7
Net IB debt/EBITDA -2 -0,5 -0,8
N/A N/A N/A
SEKm 2020 2021e 2022e
Depreciation and amortisation -5 -7 -8
Of which leasing depreciation -2 -3 -3
EO items -5 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj -548 44 199
EBITDA lease Adj margin (%) -228,1 7,7 29,3
Sales 240 574 677
COGS -83 -229 -273
Gross profit 158 345 405
Other operating items -92 -181 -206
EBITDA 65 164 199
Depreciation on tangibles -3 -4 -5
Depreciation on intangibles 0 0 0
EBITA 60 158 191
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 60 158 191
Other financial items 0 0 0
Net financial items -2 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 59 154 187
Tax -10 -31 -37
Net profit 49 123 149
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 49 123 149
EPS 2,8 5,83 7,08
EPS Adj 3,1 5,83 7,08
Total extraordinary items after tax -5,3 0 0
Tax rate (%) -17,3 -20 -20
Gross margin (%) 65,6 60,1 59,7
EBITDA margin (%) 27,1 28,6 29,3
EBITA margin (%) 25,1 27,4 28,1
EBIT margin (%) 25,1 27,4 28,1
Pretax margin (%) 24,4 26,7 27,5
Net margin (%) 20,2 21,4 22
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 89,4 139 17,9
EBITDA growth (%) 62,7 152,1 20,8
EBIT growth (%) 63,5 161,1 20,9
Net profit growth (%) 62,2 153,2 21,4
EPS growth (%) 47,4 108,4 21,4
Profitability 2020 2021 2022
ROE (%) 9,1 12,5 13,7
ROE Adj (%) 10,1 12,5 13,7
ROCE (%) 9,9 13,8 15,3
ROCE Adj(%) 10,7 13,8 15,3
ROIC (%) 10,9 14,1 15,5
ROIC Adj (%) 11,9 14,1 15,5
Adj earnings numbers 2020 2021 2022
EBITDA Adj 70 164 199
EBITDA Adj margin (%) 29,3 28,6 29,3
EBITA Adj 66 158 191
EBITA Adj margin (%) 27,3 27,4 28,1
EBIT Adj 66 158 191
EBIT Adj margin (%) 27,3 27,4 28,1
Pretax profit Adj 64 154 187
Net profit Adj 54 123 149
Net profit to shareholders Adj 54 123 149
Net Adj margin (%) 22,4 21,4 22
N/A N/A N/A
SEKm 2020 2021e 2022e
Lease liability amortisation 1 -3 -3
Other intangible assets 141 141 141
Right-of-use asset 26 26 26
Total other fixed assets 0 0 0
Leasing liability 3 3 3
Total other long-term liabilities 20 20 20
Net IB debt excl. leasing -131 -93 -158
Net IB debt / EBITDA lease Adj (%) 23,9 -209 -79,7
EBITDA 65 164 199
Net financial items -2 -4 -4
Paid tax -10 -31 -37
Non-cash items 0 0 0
Cash flow before change in WC 53 130 157
Change in WC -21 -19 -27
Operating cash flow 32 111 130
CAPEX tangible fixed assets -1 -9 -13
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -619 -120 0
Free cash flow -587 -19 118
Dividend paid -11 -14 -49
Share issues and buybacks 683 0 0
Other non cash items -34 -34 -10
Decrease in net IB debt 85 -38 65
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 568 628 628
Indefinite intangible assets 141 141 141
Definite intangible assets 0 0 0
Tangible fixed assets 15 81 89
Other fixed assets 0 0 0
Fixed assets 750 876 884
Inventories 62 46 64
Receivables 49 103 122
Other current assets 5 12 14
Cash and liquid assets 284 246 311
Total assets 1150 1283 1396
Shareholders equity 933 1039 1139
Minority 0 0 0
Total equity 933 1039 1139
Long-term debt 118 118 118
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 20 20 20
Short-term debt 36 36 36
Accounts payable 19 14 17
Other current liabilities 23 54 64
Total liabilities and equity 1150 1283 1396
Net IB debt -128 -90 -155
Net IB debt excl. pension debt -128 -90 -155
Capital invested 825 969 1004
Working capital 74 93 120
EV breakdown 2020 2021 2022
Market cap. diluted (m) 5641 9108 9108
Net IB debt Adj -128 -90 -155
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 5513 9019 8953
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 37 47,2 50,6
Capital invested turnover (%) 52,6 64 68,7
Capital employed turnover (%) 39,3 50,3 54,4
Inventories / sales (%) 16 9,4 8,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 5,1 2,9 2,3
Working capital / sales (%) 19,7 14,6 15,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -13,7 -8,6 -13,6
Net debt / market cap (%) -5,1 -1 -1,7
Equity ratio (%) 81,1 81 81,6
Net IB debt adj. / equity (%) -13,7 -8,6 -13,6
Current ratio (%) 508,9 386,3 435
EBITDA / net interest (%) 3847,1 4109,5 4962,8
Net IB debt / EBITDA (%) -196,4 -54,6 -78,2
Interest cover (%) 3561,3 3939,8 4762,8
N/A N/A N/A
SEKm 2020 2021e 2022e
Lease adj. FCF yield (%) -10,4 -0,2 1,3
Shares outstanding adj. 17 21 21
Fully diluted shares Adj 17 21 21
EPS 2,8 5,83 7,08
Dividend per share Adj 0,8 2,3 2,8
EPS Adj 3,1 5,83 7,08
BVPS 53,75 49,28 54,02
BVPS Adj 21,03 19,49 24,24
Net IB debt / share -7,4 -4,3 -7,4
Share price 143,86 432 432
Market cap. (m) 2497 9108 9108
Valuation 2020 2021 2022
P/E 116,2 74,1 61
EV/sales 22,94 15,71 13,22
EV/EBITDA 84,5 54,9 45,1
EV/EBITA 91,3 57,2 47
EV/EBIT 91,3 57,2 47
Dividend yield (%) 0,2 0,5 0,7
FCF yield (%) -10,4 -0,2 1,3
P/BVPS 6,05 8,77 8
P/BVPS Adj 15,45 22,16 17,82
P/E Adj 104,9 74,1 61
EV/EBITDA Adj 78,2 54,9 45,1
EV/EBITA Adj 84 57,2 47
EV/EBIT Adj 84 57,2 47
EV/cap. employed 5,1 7,5 6,9
Investment ratios 2020 2021 2022
Capex / sales 0,4 1,6 1,9
Capex / depreciation 31,6 249,4 254
Capex tangibles / tangible fixed assets 6,4 11,7 14,3
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 20,1 4,7 5,6
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 22.0 % 22.0 % 28 Feb 2021
JCC Group Invest Sweden AB (Johan Bergdahl) 7.2 % 7.2 % 28 Feb 2021
DNCA Finance S.A 6.2 % 6.2 % 31 Jan 2021
Mastan AB (Håkan Lagerberg) 5.3 % 5.3 % 31 Jan 2021
Handelsbanken Fonder 4.7 % 4.7 % 31 Jan 2021
AMF Pension & Fonder 4.6 % 4.6 % 28 Feb 2021
SEB Fonder 4.1 % 4.1 % 28 Feb 2021
Aktia Asset Management 3.1 % 3.1 % 28 Feb 2021
Matthew Shaw 2.8 % 2.8 % 28 Feb 2021
Consensus Asset Management 2.2 % 2.2 % 28 Feb 2021
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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