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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 609 623 642
Sales growth (%) -2,1 2,3 3
EBITDA 82 87 101
EBITDA margin (%) 13,4 13,9 15,8
EBIT adj 56 66 76
EBIT adj margin (%) 9,2 10,6 11,8
Pretax profit 54 58 72
EPS rep 1,96 2,15 2,7
EPS growth (%) 2 9,3 25,9
EPS adj 2,05 2,45 2,76
DPS 0 1,3 1,5
EV/EBITDA (x) 8,3 8,4 7
EV/EBIT adj (x) 12,1 10,9 9,4
P/E (x) 11,6 12,6 10
P/E adj (x) 11,1 11 9,8
EV/sales (x) 1,1 1,2 1,1
FCF yield (%) 7,2 8,2 7,9
Dividend yield (%) 0 4,8 5,5
Net IB debt/EBITDA 2,4 1,8 1,3
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 609 623 642
COGS -351 -359 -367
Gross profit 258 264 275
Other operating items -176 -177 -173
EBITDA 82 87 101
Depreciation on tangibles -20 -21 -21
Depreciation on intangibles -2 -1 -1
EBITA 58 62 77
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 -1 -1
EBIT 56 61 76
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 58 72
Tax -12 -12 -15
Net profit 42 45 57
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 42 45 57
EPS 1,96 2,15 2,7
EPS Adj 2,05 2,45 2,76
Total extraordinary items after tax 0 -5,2 0
Tax rate (%) -22,4 -21,1 -20,6
Gross margin (%) 42,3 42,4 42,8
EBITDA margin (%) 13,4 13,9 15,8
EBITA margin (%) 9,5 10 12
EBIT margin (%) 9,2 9,8 11,8
Pretax margin (%) 8,8 9,2 11,2
Net margin (%) 6,8 7,3 8,9
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -2,1 2,3 3
EBITDA growth (%) 6,9 6 16,5
EBIT growth (%) 2,7 8,8 23,6
Net profit growth (%) 2,1 9,4 25,9
EPS growth (%) 2 9,3 25,9
Profitability 2019 2020 2021
ROE (%) 24,3 22,5 23,9
ROE Adj (%) 25,4 25,7 24,4
ROCE (%) 14,2 14,6 17,2
ROCE Adj(%) 14,6 16,2 17,5
ROIC (%) 11,3 12,1 14,8
ROIC Adj (%) 11,3 13,1 14,8
Adj earnings numbers 2019 2020 2021
EBITDA Adj 82 92 101
EBITDA Adj margin (%) 13,4 14,8 15,8
EBITA Adj 58 68 77
EBITA Adj margin (%) 9,5 10,9 12
EBIT Adj 56 66 76
EBIT Adj margin (%) 9,2 10,6 11,8
Pretax profit Adj 55 64 73
Net profit Adj 43 52 58
Net profit to shareholders Adj 43 52 58
Net Adj margin (%) 7,1 8,3 9,1
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 82 87 101
Net financial items -3 -4 -4
Paid tax 0 -10 -15
Non-cash items 0 0 0
Cash flow before change in WC 80 74 83
Change in WC -19 2 -7
Operating cash flow 61 76 76
CAPEX tangible fixed assets -21 -21 -20
CAPEX intangible fixed assets -5 -8 -10
Acquisitions and disposals 0 0 0
Free cash flow 35 47 46
Dividend paid -25 1 -28
Share issues and buybacks 0 1 0
Other non cash items -11 -2 0
Decrease in net IB debt -3 46 16
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 114 114 114
Indefinite intangible assets 0 0 0
Definite intangible assets 46 50 59
Tangible fixed assets 75 77 76
Other fixed assets 0 0 0
Fixed assets 245 251 259
Inventories 134 139 142
Receivables 120 128 132
Other current assets 5 0 0
Cash and liquid assets 36 47 62
Total assets 541 564 596
Shareholders equity 179 225 255
Minority 0 0 0
Total equity 179 225 255
Long-term debt 132 133 133
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 21 22 22
Other long-term liabilities 0 0 0
Short-term debt 93 57 57
Accounts payable 37 47 48
Other current liabilities 69 71 72
Total liabilities and equity 541 564 596
Net IB debt 198 152 136
Net IB debt excl. pension debt 198 152 136
Capital invested 398 399 413
Working capital 153 149 154
EV breakdown 2019 2020 2021
Market cap. diluted (m) 482 573 573
Net IB debt Adj 198 152 136
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 680 726 710
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 116,2 112,8 110,7
Capital invested turnover (%) 157,4 156,3 157,9
Capital employed turnover (%) 153,5 148,8 146,3
Inventories / sales (%) 20,7 21,9 21,9
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6,5 6,7 7,4
Working capital / sales (%) 24,5 24,2 23,6
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 110,8 67,5 53,5
Net debt / market cap (%) 40,9 26,5 23,8
Equity ratio (%) 33,1 39,9 42,8
Net IB debt adj. / equity (%) 110,8 67,5 53,5
Current ratio (%) 143,6 172,8 183,7
EBITDA / net interest (%) 3075,5 2480,7 2890,3
Net IB debt / EBITDA (%) 242,1 175,1 134,7
Interest cover (%) 2181,7 1783,6 2193,2
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 2,15 2,7
Dividend per share Adj 0 1,3 1,5
EPS Adj 2,05 2,45 2,76
BVPS 8,46 10,63 12,04
BVPS Adj 0,88 2,87 3,85
Net IB debt / share 9,4 7,2 6,4
Share price 22,93 27,1 27,1
Market cap. (m) 485 573 573
Valuation 2019 2020 2021
P/E 11,6 12,6 10
EV/sales 1,12 1,16 1,11
EV/EBITDA 8,3 8,4 7
EV/EBITA 11,7 11,6 9,2
EV/EBIT 12,1 11,9 9,4
Dividend yield (%) 0 4,8 5,5
FCF yield (%) 7,2 8,2 7,9
P/BVPS 2,69 2,55 2,25
P/BVPS Adj 26,02 9,45 7,04
P/E Adj 11,1 11 9,8
EV/EBITDA Adj 8,3 7,9 7
EV/EBITA Adj 11,7 10,7 9,2
EV/EBIT Adj 12,1 10,9 9,4
EV/cap. employed 1,6 1,7 1,6
Investment ratios 2019 2020 2021
Capex / sales 4,3 4,7 4,7
Capex / depreciation 122 131,9 138,1
Capex tangibles / tangible fixed assets 27,9 27,7 26,6
Capex intangibles / definite intangibles 11,4 15,6 17,2
Depreciation on intangibles / definite intangibles 4,1 2,6 2
Depreciation on tangibles / tangibles 26,1 27 27,3
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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