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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 2021 2022e 2023e
Lease adj. FCF yield (%) -14,6 1 1,8
Lease adj. ND/EBITDA 2 1,1 0,5
Sales 769 1181 1380
Sales growth (%) 219,9 53,6 16,9
EBITDA 202 323 394
EBITDA margin (%) 26,3 27,3 28,5
EBIT adj 199 293 363
EBIT adj margin (%) 25,9 24,8 26,3
Pretax profit 174 281 351
EPS rep 1,2 1,88 2,35
EPS growth (%) 114,1 57,1 24,7
EPS adj 1,34 1,88 2,35
DPS 0,48 0,75 0,94
EV/EBITDA (x) 59,9 39,2 31,7
EV/EBIT adj (x) 60,9 43,1 34,4
P/E (x) 86,3 54,9 44
P/E adj (x) 77,2 54,9 44
EV/sales (x) 15,7 10,7 9,1
FCF yield (%) -14,5 1,1 2
Dividend yield (%) 0,5 0,7 0,9
Net IB debt/EBITDA 2,5 1,3 0,7
SEKm 2021 2022e 2023e
Depreciation and amortisation -19 -29 -31
Of which leasing depreciation -9 -13 -13
EO items -16 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 209 309 381
EBITDA lease Adj margin (%) 27,2 26,2 27,6
Sales 769 1181 1380
COGS -327 -521 -596
Gross profit 442 660 785
Other operating items -239 -337 -391
EBITDA 202 323 394
Depreciation on tangibles -4 -5 -7
Depreciation on intangibles 0 0 0
EBITA 183 293 363
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 183 293 363
Other financial items 0 0 0
Net financial items -9 -12 -12
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 174 281 351
Tax -39 -59 -74
Net profit 134 222 277
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 134 222 277
EPS 1,2 1,88 2,35
EPS Adj 1,34 1,88 2,35
Total extraordinary items after tax -15,9 0 0
Tax rate (%) -22,7 -21 -21
Gross margin (%) 57,4 55,9 56,9
EBITDA margin (%) 26,3 27,3 28,5
EBITA margin (%) 23,8 24,8 26,3
EBIT margin (%) 23,8 24,8 26,3
Pretax margin (%) 22,6 23,8 25,4
Net margin (%) 17,5 18,8 20,1
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 219,9 53,6 16,9
EBITDA growth (%) 210 59,6 22,2
EBIT growth (%) 203 60,4 23,7
Net profit growth (%) 177,1 65,3 24,7
EPS growth (%) 114,1 57,1 24,7
Profitability 2021 2022 2023
ROE (%) 8 8,8 10,3
ROE Adj (%) 8,9 8,8 10,3
ROCE (%) 8,6 9,1 10,7
ROCE Adj(%) 9,4 9,1 10,7
ROIC (%) 7,5 7,7 9,3
ROIC Adj (%) 8,1 7,7 9,3
Adj earnings numbers 2021 2022 2023
EBITDA Adj 218 323 394
EBITDA Adj margin (%) 28,4 27,3 28,5
EBITA Adj 199 293 363
EBITA Adj margin (%) 25,9 24,8 26,3
EBIT Adj 199 293 363
EBIT Adj margin (%) 25,9 24,8 26,3
Pretax profit Adj 190 281 351
Net profit Adj 150 222 277
Net profit to shareholders Adj 150 222 277
Net Adj margin (%) 19,6 18,8 20,1
Leasing payments -9 -13 -13
SEKm 2021 2022e 2023e
Lease liability amortisation -9 -13 -13
Other intangible assets 197 197 197
Right-of-use asset 76 76 76
Total other fixed assets 0 0 0
Leasing liability 89 89 89
Total other long-term liabilities 19 19 19
Net IB debt excl. leasing 411 342 205
Net IB debt / EBITDA lease Adj (%) 196,7 110,4 53,9
EBITDA 202 323 394
Net financial items -9 -12 -12
Paid tax -39 -59 -74
Non-cash items 0 0 0
Cash flow before change in WC 154 251 308
Change in WC 37 -91 -44
Operating cash flow 191 161 265
CAPEX tangible fixed assets -18 -22 -26
CAPEX intangible fixed assets -1 0 0
Acquisitions and disposals -1857 0 0
Free cash flow -1685 139 239
Dividend paid -69 -54 -89
Share issues and buybacks 1165 0 0
Other non cash items -52 -28 -12
Decrease in net IB debt -38 65 90
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 2360 2360 2360
Indefinite intangible assets 141 141 141
Definite intangible assets 0 0 0
Tangible fixed assets 152 158 166
Other fixed assets 0 0 0
Fixed assets 2785 2791 2799
Inventories 84 130 152
Receivables 130 200 234
Other current assets 44 67 79
Cash and liquid assets 207 276 413
Total assets 3250 3464 3676
Shareholders equity 2434 2600 2788
Minority 0 0 0
Total equity 2434 2600 2788
Long-term debt 618 618 618
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 0 0 0
Accounts payable 43 67 78
Other current liabilities 46 71 83
Total liabilities and equity 3250 3464 3676
Net IB debt 500 431 294
Net IB debt excl. pension debt 500 431 294
Capital invested 2953 3050 3102
Working capital 168 259 303
EV breakdown 2021 2022 2023
Market cap. diluted (m) 11601 12205 12205
Net IB debt Adj 500 431 294
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 12101 12636 12499
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 34,9 35,2 38,7
Capital invested turnover (%) 64 68,7 77,7
Capital employed turnover (%) 50,3 54,4 58,4
Inventories / sales (%) 9,4 8,1 8,8
Customer advances / sales (%) 0 0 0
Payables / sales (%) 2,9 2,3 2,3
Working capital / sales (%) 15,8 18,1 20,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 20,5 16,6 10,6
Net debt / market cap (%) 3,9 3,5 2,4
Equity ratio (%) 74,9 75 75,8
Net IB debt adj. / equity (%) 20,5 16,6 10,6
Current ratio (%) 402,5 410,5 467,9
EBITDA / net interest (%) 2237,8 2688,2 3283,9
Net IB debt / EBITDA (%) 247,3 133,6 74,7
Interest cover (%) 2025 2444,9 3023,9
SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) -14,6 1 1,8
Shares outstanding adj. 112 118 118
Fully diluted shares Adj 112 118 118
EPS 1,2 1,88 2,35
Dividend per share Adj 0,5 0,8 0,9
EPS Adj 1,34 1,88 2,35
BVPS 21,67 22,01 23,6
BVPS Adj 0,66 2,03 3,63
Net IB debt / share 4,5 3,6 2,5
Share price 113,19 103,3 103,3
Market cap. (m) 12712 12205 12205
Valuation 2021 2022 2023
P/E 86,3 54,9 44
EV/sales 15,74 10,7 9,05
EV/EBITDA 59,9 39,2 31,7
EV/EBITA 66,2 43,1 34,4
EV/EBIT 66,2 43,1 34,4
Dividend yield (%) 0,5 0,7 0,9
FCF yield (%) -14,5 1,1 2
P/BVPS 4,77 4,69 4,38
P/BVPS Adj 156,08 50,85 28,5
P/E Adj 77,2 54,9 44
EV/EBITDA Adj 55,5 39,2 31,7
EV/EBITA Adj 60,9 43,1 34,4
EV/EBIT Adj 60,9 43,1 34,4
EV/cap. employed 3,9 3,8 3,6
Investment ratios 2021 2022 2023
Capex / sales 2,5 1,8 1,9
Capex / depreciation 191,4 135 145,1
Capex tangibles / tangible fixed assets 11,7 13,7 15,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 6,6 10,1 10,8

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Media

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

Main shareholders - Swedencare

Main shareholders Share capital % Voting shares % Verified
Håkan Svanberg 19.5 % 19.5 % 31 Dec 2021
Symrise AG 12.9 % 12.9 % 31 Dec 2021
JCC Group Invest Sweden AB (Johan Bergdahl) 6.4 % 6.4 % 31 Dec 2021
Mastan AB (Håkan Lagerberg) 4.7 % 4.7 % 31 Dec 2021
AMF Pension & Fonder 4.1 % 4.1 % 31 Dec 2021
DNCA Finance S.A 3.6 % 3.6 % 31 Dec 2021
Handelsbanken Fonder 3.3 % 3.3 % 31 Dec 2021
SEB Fonder 2.5 % 2.5 % 31 Dec 2021
Swedbank Robur Fonder 2.0 % 2.0 % 31 Dec 2021
Aktia Asset Management 1.7 % 1.7 % 31 Dec 2021
Source: Holdings by Modular Finance AB

Insider list - Swedencare

Name Quantity Code Date
JCC Group Invest Sweden AB + 15 000 BUY 29 Jul 2021
Håkan Svanberg +11 954 200 Received loan 19 Jul 2021
Håkan Svanberg -11 954 200 Received loan 29 Jun 2021
Håkan Svanberg - 30 000 SELL 3 May 2021
JCC Group Invest Sweden AB - 15 000 SELL 2 May 2021
JCC Group Invest Sweden AB - 15 000 SELL 2 Apr 2021
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

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