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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 2020 2021e 2022e
Sales 630 651 670
Sales growth (%) 3,4 3,3 2,9
EBITDA 96 105 112
EBITDA margin (%) 15,2 16,2 16,8
EBIT adj 76 79 86
EBIT adj margin (%) 12,1 12,2 12,8
Pretax profit 67 76 82
EPS rep 2,5 2,84 3,09
EPS growth (%) 27,3 13,4 9,1
EPS adj 2,84 2,91 3,17
DPS 1,3 1,5 1,6
EV/EBITDA (x) 10,3 9,2 8,5
EV/EBIT adj (x) 12,9 12,2 11,1
P/E (x) 15,7 13,9 12,7
P/E adj (x) 13,9 13,5 12,4
EV/sales (x) 1,6 1,5 1,4
FCF yield (%) 5,4 5,6 6,2
Dividend yield (%) 3,3 3,8 4,1
Net IB debt/EBITDA 1,6 1,3 1,1
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 630 651 670
COGS -359 -369 -376
Gross profit 270 282 294
Other operating items -174 -177 -181
EBITDA 96 105 112
Depreciation on tangibles -20 -21 -21
Depreciation on intangibles -2 -2 -2
EBITA 72 81 88
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 -2 -2
EBIT 71 79 86
Other financial items 0 0 0
Net financial items -4 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 67 76 82
Tax -14 -16 -17
Net profit 53 60 65
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 53 60 65
EPS 2,5 2,84 3,09
EPS Adj 2,84 2,91 3,17
Total extraordinary items after tax -5,6 0 0
Tax rate (%) -21,2 -20,6 -20,6
Gross margin (%) 42,9 43,4 43,9
EBITDA margin (%) 15,2 16,2 16,8
EBITA margin (%) 11,5 12,4 13,1
EBIT margin (%) 11,2 12,2 12,8
Pretax margin (%) 10,7 11,6 12,3
Net margin (%) 8,4 9,2 9,8
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 3,4 3,3 2,9
EBITDA growth (%) 17,3 9,8 6,5
EBIT growth (%) 26,1 11,6 8,7
Net profit growth (%) 27,4 13,4 9,1
EPS growth (%) 27,3 13,4 9,1
Profitability 2020 2021 2022
ROE (%) 25,7 24,1 23,2
ROE Adj (%) 29,2 24,8 23,8
ROCE (%) 17 18,1 18,3
ROCE Adj(%) 18,7 18,5 18,6
ROIC (%) 13,8 15,1 15,8
ROIC Adj (%) 14,9 15,1 15,8
Adj earnings numbers 2020 2021 2022
EBITDA Adj 102 105 112
EBITDA Adj margin (%) 16,1 16,2 16,8
EBITA Adj 78 81 88
EBITA Adj margin (%) 12,4 12,4 13,1
EBIT Adj 76 79 86
EBIT Adj margin (%) 12,1 12,2 12,8
Pretax profit Adj 74 77 84
Net profit Adj 60 62 67
Net profit to shareholders Adj 60 62 67
Net Adj margin (%) 9,5 9,5 10
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 96 105 112
Net financial items -4 -4 -4
Paid tax -10 -16 -17
Non-cash items 0 0 0
Cash flow before change in WC 82 86 92
Change in WC -11 -9 -8
Operating cash flow 71 78 84
CAPEX tangible fixed assets -20 -21 -21
CAPEX intangible fixed assets -6 -10 -11
Acquisitions and disposals 0 0 0
Free cash flow 45 47 52
Dividend paid 1 -28 -32
Share issues and buybacks 1 0 0
Other non cash items 1 0 0
Decrease in net IB debt 45 17 18
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 114 114 114
Indefinite intangible assets 0 0 0
Definite intangible assets 47 56 65
Tangible fixed assets 77 77 77
Other fixed assets 0 0 0
Fixed assets 248 257 266
Inventories 139 143 148
Receivables 129 133 137
Other current assets 0 0 0
Cash and liquid assets 35 52 70
Total assets 551 586 621
Shareholders equity 232 265 299
Minority 0 0 0
Total equity 232 265 299
Long-term debt 133 133 133
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 23 23 23
Other long-term liabilities 0 0 0
Short-term debt 46 46 46
Accounts payable 38 40 41
Other current liabilities 69 70 70
Total liabilities and equity 551 586 621
Net IB debt 153 136 119
Net IB debt excl. pension debt 153 136 119
Capital invested 409 424 440
Working capital 160 168 174
EV breakdown 2020 2021 2022
Market cap. diluted (m) 832 832 832
Net IB debt Adj 153 136 119
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 985 968 950
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 115,4 114,5 111
Capital invested turnover (%) 156,1 156,2 154,9
Capital employed turnover (%) 151 148,9 142,5
Inventories / sales (%) 21,7 21,7 21,7
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6 6 6
Working capital / sales (%) 24,9 25,2 25,5
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 66 51,5 39,7
Net debt / market cap (%) 30,1 16,4 14,3
Equity ratio (%) 42,2 45,2 48,1
Net IB debt adj. / equity (%) 66 51,5 39,7
Current ratio (%) 189,5 203,5 217,5
EBITDA / net interest (%) 2596 3014 3210,3
Net IB debt / EBITDA (%) 159,7 129,3 105,6
Interest cover (%) 1955,4 2305,4 2501,7
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 21 21 21
Fully diluted shares Adj 21 21 21
EPS 2,5 2,84 3,09
Dividend per share Adj 1,3 1,5 1,6
EPS Adj 2,84 2,91 3,17
BVPS 10,98 12,52 14,11
BVPS Adj 3,35 4,47 5,64
Net IB debt / share 7,2 6,4 5,6
Share price 24,09 39,3 39,3
Market cap. (m) 510 832 832
Valuation 2020 2021 2022
P/E 15,7 13,9 12,7
EV/sales 1,56 1,49 1,42
EV/EBITDA 10,3 9,2 8,5
EV/EBITA 13,6 12 10,9
EV/EBIT 13,9 12,2 11,1
Dividend yield (%) 3,3 3,8 4,1
FCF yield (%) 5,4 5,6 6,2
P/BVPS 3,58 3,14 2,78
P/BVPS Adj 11,75 8,79 6,97
P/E Adj 13,9 13,5 12,4
EV/EBITDA Adj 9,7 9,2 8,5
EV/EBITA Adj 12,6 12 10,9
EV/EBIT Adj 12,9 12,2 11,1
EV/cap. employed 2,3 2,1 2
Investment ratios 2020 2021 2022
Capex / sales 4,2 4,7 4,8
Capex / depreciation 124,2 137,3 141,5
Capex tangibles / tangible fixed assets 26,2 26,7 27,4
Capex intangibles / definite intangibles 13,3 18,3 16,3
Depreciation on intangibles / definite intangibles 3,2 2,9 2,5
Depreciation on tangibles / tangibles 25,7 27,1 27
N/A N/A N/A

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Main shareholders - Svedbergs

Main shareholders Share capital % Voting shares % Verified
Stena 29.0 % 29.0 % 31 Dec 2020
Nordea Fonder 13.7 % 13.7 % 31 Dec 2020
If Skadeförsäkring AB 11.5 % 11.5 % 31 Dec 2020
Avanza Pension 3.9 % 3.9 % 31 Dec 2020
Sune Svedberg 2.6 % 2.6 % 31 Dec 2020
Nordnet Pensionsförsäkring 2.1 % 2.1 % 31 Dec 2020
Ida Svedberg Sandström 2.1 % 2.1 % 31 Dec 2020
Anna Svedberg 1.2 % 1.2 % 31 Dec 2020
Nordea Funds (Lux) 0.9 % 0.9 % 30 Nov 2020
Handelsbanken Fonder 0.6 % 0.6 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Svedbergs

Name Quantity Code Date
Michael Cassoe + 15 000 BUY 14 Dec 2020
Anders Wassberg + 650 000 BUY 8 Dec 2020
Dan Petersson + 741 BUY 2 Dec 2020
Henric Larsson + 5 000 BUY 2 Dec 2020
Michael Cassoe + 20 000 BUY 2 Dec 2020
Gitte Uldahl + 10 000 BUY 2 Dec 2020
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

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