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Svedbergs

Svedbergs

Premium bathroom manufacturer

Svedbergs is a premium bathroom manufacturer with a market share of 7% of the Nordic market. The company supplies the complete bathroom through two brands, Svedbergs and Macro Design. The group’s strategy is to gain market share through both organic and inorganic growth. Svedbergs aims to achieve annual revenue growth of 10% (including M&A) and an adj. EBITA margin of 15%.

Svedbergs has an active M&A agenda, which the company aims to drive an average annual growth of the financial targets of 10%. Exercised correctly with conservative multiples, M&A can aid the company through 1) growth 2) purchasing synergies and 3) margin and EPS accretion.

Given the ambitious financial targets, M&A activities can be a risk to the company. With the ambitious EBITA margin target of 15%, we expect the criterion for acquisitions to be rather strict. With the M&A focus in place, this can lead to 1) high acquisition multiples 2) a price focus leading to a lower quality acquisition or 3) resources spent on M&A processes that ends up leading nowhere. Further, the company is exposed to FX and raw material prices, which have short-term effects on margins.

SEKm 2019 2020e 2021e
Sales 609 630 651
Sales growth (%) -2,1 3,4 3,3
EBITDA 82 96 105
EBITDA margin (%) 13,4 15,2 16,2
EBIT adj 56 76 79
EBIT adj margin (%) 9,2 12,1 12,2
Pretax profit 54 67 76
EPS rep 1,96 2,5 2,84
EPS growth (%) 2 27,3 13,4
EPS adj 2,05 2,84 2,91
DPS 0 1,3 1,5
EV/EBITDA (x) 8,3 7,7 6,8
EV/EBIT adj (x) 12,1 9,6 9,1
P/E (x) 11,6 11 9,7
P/E adj (x) 11,1 9,7 9,4
EV/sales (x) 1,1 1,2 1,1
FCF yield (%) 7,2 7,7 8
Dividend yield (%) 0 4,7 5,5
Net IB debt/EBITDA 2,4 1,6 1,3
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 609 630 651
COGS -351 -359 -369
Gross profit 258 270 282
Other operating items -176 -174 -177
EBITDA 82 96 105
Depreciation on tangibles -20 -20 -21
Depreciation on intangibles -2 -2 -2
EBITA 58 72 81
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 -2 -2
EBIT 56 71 79
Other financial items 0 0 0
Net financial items -3 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 54 67 76
Tax -12 -14 -16
Net profit 42 53 60
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 42 53 60
EPS 1,96 2,5 2,84
EPS Adj 2,05 2,84 2,91
Total extraordinary items after tax 0 -5,6 0
Tax rate (%) -22,4 -21,2 -20,6
Gross margin (%) 42,3 42,9 43,4
EBITDA margin (%) 13,4 15,2 16,2
EBITA margin (%) 9,5 11,5 12,4
EBIT margin (%) 9,2 11,2 12,2
Pretax margin (%) 8,8 10,7 11,6
Net margin (%) 6,8 8,4 9,2
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -2,1 3,4 3,3
EBITDA growth (%) 6,9 17,3 9,8
EBIT growth (%) 2,7 26,1 11,6
Net profit growth (%) 2,1 27,4 13,4
EPS growth (%) 2 27,3 13,4
Profitability 2019 2020 2021
ROE (%) 24,3 25,7 24,1
ROE Adj (%) 25,4 29,2 24,8
ROCE (%) 14,2 17 18,1
ROCE Adj(%) 14,6 18,7 18,5
ROIC (%) 11,3 13,8 15,1
ROIC Adj (%) 11,3 14,9 15,1
Adj earnings numbers 2019 2020 2021
EBITDA Adj 82 102 105
EBITDA Adj margin (%) 13,4 16,1 16,2
EBITA Adj 58 78 81
EBITA Adj margin (%) 9,5 12,4 12,4
EBIT Adj 56 76 79
EBIT Adj margin (%) 9,2 12,1 12,2
Pretax profit Adj 55 74 77
Net profit Adj 43 60 62
Net profit to shareholders Adj 43 60 62
Net Adj margin (%) 7,1 9,5 9,5
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 82 96 105
Net financial items -3 -4 -4
Paid tax 0 -10 -16
Non-cash items 0 0 0
Cash flow before change in WC 80 82 86
Change in WC -19 -11 -9
Operating cash flow 61 71 78
CAPEX tangible fixed assets -21 -20 -21
CAPEX intangible fixed assets -5 -6 -10
Acquisitions and disposals 0 0 0
Free cash flow 35 45 47
Dividend paid -25 1 -28
Share issues and buybacks 0 1 0
Other non cash items -11 1 0
Decrease in net IB debt -3 45 17
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 114 114 114
Indefinite intangible assets 0 0 0
Definite intangible assets 46 47 56
Tangible fixed assets 75 77 77
Other fixed assets 0 0 0
Fixed assets 245 248 257
Inventories 134 139 143
Receivables 120 129 133
Other current assets 5 0 0
Cash and liquid assets 36 35 52
Total assets 541 551 586
Shareholders equity 179 232 265
Minority 0 0 0
Total equity 179 232 265
Long-term debt 132 133 133
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 21 23 23
Other long-term liabilities 0 0 0
Short-term debt 93 46 46
Accounts payable 37 38 40
Other current liabilities 69 69 70
Total liabilities and equity 541 551 586
Net IB debt 198 153 136
Net IB debt excl. pension debt 198 153 136
Capital invested 398 409 424
Working capital 153 160 168
EV breakdown 2019 2020 2021
Market cap. diluted (m) 482 582 582
Net IB debt Adj 198 153 136
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 680 735 718
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 116,2 115,4 114,5
Capital invested turnover (%) 157,4 156,1 156,2
Capital employed turnover (%) 153,5 151 148,9
Inventories / sales (%) 20,7 21,7 21,7
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6,5 6 6
Working capital / sales (%) 24,5 24,9 25,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 110,8 66 51,5
Net debt / market cap (%) 40,9 26,4 23,4
Equity ratio (%) 33,1 42,2 45,2
Net IB debt adj. / equity (%) 110,8 66 51,5
Current ratio (%) 143,6 189,5 203,5
EBITDA / net interest (%) 3075,5 2596 3014
Net IB debt / EBITDA (%) 242,1 159,7 129,3
Interest cover (%) 2181,7 1955,4 2305,4
N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 21 21 21
Fully diluted shares Adj 21 21 21
EPS 1,96 2,5 2,84
Dividend per share Adj 0 1,3 1,5
EPS Adj 2,05 2,84 2,91
BVPS 8,46 10,98 12,52
BVPS Adj 0,88 3,35 4,47
Net IB debt / share 9,4 7,2 6,4
Share price 22,93 27,5 27,5
Market cap. (m) 485 582 582
Valuation 2019 2020 2021
P/E 11,6 11 9,7
EV/sales 1,12 1,17 1,1
EV/EBITDA 8,3 7,7 6,8
EV/EBITA 11,7 10,2 8,9
EV/EBIT 12,1 10,4 9,1
Dividend yield (%) 0 4,7 5,5
FCF yield (%) 7,2 7,7 8
P/BVPS 2,69 2,5 2,2
P/BVPS Adj 26,02 8,22 6,15
P/E Adj 11,1 9,7 9,4
EV/EBITDA Adj 8,3 7,2 6,8
EV/EBITA Adj 11,7 9,4 8,9
EV/EBIT Adj 12,1 9,6 9,1
EV/cap. employed 1,6 1,7 1,6
Investment ratios 2019 2020 2021
Capex / sales 4,3 4,2 4,7
Capex / depreciation 122 124,2 137,3
Capex tangibles / tangible fixed assets 27,9 26,2 26,7
Capex intangibles / definite intangibles 11,4 13,3 18,3
Depreciation on intangibles / definite intangibles 4,1 3,2 2,9
Depreciation on tangibles / tangibles 26,1 25,7 27,1
N/A N/A N/A

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Main shareholders - Svedbergs

Main shareholders Share capital % Voting shares % Verified
Stena 25.9 % 25.9 % 30 Sep 2020
Nordea Fonder 11.6 % 11.6 % 30 Sep 2020
If Skadeförsäkring AB 11.5 % 11.5 % 30 Sep 2020
Ernström & C:o AB 7.2 % 7.2 % 30 Sep 2020
JRS Asset Management AB 3.4 % 3.4 % 30 Sep 2020
Avanza Pension 3.1 % 3.1 % 30 Sep 2020
Sune Svedberg 2.3 % 2.3 % 30 Sep 2020
Ida Svedberg Sandström 2.1 % 2.1 % 30 Sep 2020
Nordnet Pensionsförsäkring 1.6 % 1.6 % 30 Sep 2020
Anna Svedberg 1.2 % 1.2 % 30 Sep 2020
Source: Holdings by Modular Finance AB

Insider list - Svedbergs

Name Quantity Code Date
Dan Petersson + 382 BUY 15 Sep 2020
Ingrid Osmundsen + 1 500 BUY 29 May 2020
Martin Svalstedt + 5 854 BUY 24 Apr 2020
Tony Arvidsson + 1 031 ALTM 26 Feb 2020
Dan Petersson + 928 ALTM 26 Feb 2020
Anders Wassberg +5 400 000 BUY 9 Dec 2019
Martin Svalstedt -5 400 000 SELL 9 Dec 2019
Kristina Laurelii + 250 BUY 5 Sep 2019
Kristina Laurelii + 2 485 BUY 5 Sep 2019
Kristina Laurelii + 265 BUY 5 Sep 2019

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