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VBG Group

VBG Group

Long-term industrial group

VBG Group acquires and develops industrial companies with strong brands and good growth potential. It aims to have growth of 10% p.a. over five years, of which 5% organic and 5% acquired, with an op margin of 12%+. It offers friction springs for aircraft and buildings (45% market share), drawbar couplings for trucks with heavy trailers (55%), sliding roofs for tarpaulin-covered trailers, tipper vehicles and railway cars (40%), automatic tyre chains (65%) and climate control systems for buses, off-road, utility and defence vehicles (40%). It has 4 divisions: Truck Equipment, Edscha Trailer Systems, Mobile Climate Control and Ringfeder Power Transmission.

VBG’s strong market positions allows for pricing power and an ability to maintain, or even increase, profitability. Its historical ability to obtain high free cash flows (conversion historically above net profit) could allow for future profitable investments and M&A opportunities while its end-markets, such as climate control products for North American buses, could provide a strong growth profile for VBG.

The company is heavily exposed to the automotive industry, both through trucks, trailers and other commercial passenger vehicles. These markets are historically cyclical and both the European and North American truck markets have been strong in recent years. The large acquisition of MCC from Ratos in 2016 could still prove to be worse than expected in terms of revenue and/or profitability potential.

SEKm 2020 2021e 2022e
Sales 3161 3264 3380
Sales growth (%) -15,1 3,2 3,6
EBITDA 458 506 561
EBITDA margin (%) 14,5 15,5 16,6
EBIT adj 350 386 439
EBIT adj margin (%) 11,1 11,8 13
Pretax profit 324 361 416
EPS rep 9,27 10,4 12,16
EPS growth (%) -22,7 12,2 16,9
EPS adj 10,55 11,66 13,41
DPS 4,6 4,8 4,8
EV/EBITDA (x) 9,8 8,4 7,2
EV/EBIT adj (x) 12,8 11,1 9,3
P/E (x) 17,6 15,7 13,4
P/E adj (x) 15,4 14 12,2
EV/sales (x) 1,4 1,3 1,2
FCF yield (%) 7,2 8,4 8,8
Dividend yield (%) 2,8 2,9 2,9
Net IB debt/EBITDA 0,9 0,4 0
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 3161 3264 3380
COGS -2099 -2139 -2220
Gross profit 1062 1125 1159
Other operating items -603 -619 -598
EBITDA 458 506 561
Depreciation on tangibles -42 -54 -55
Depreciation on intangibles 0 0 0
EBITA 382 418 471
Goodwill impairment charges 0 0 0
Other impairment and amortisation -32 -31 -31
EBIT 350 386 439
Other financial items -10 0 0
Net financial items -26 -25 -23
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 324 361 416
Tax -92 -101 -112
Net profit 232 260 304
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 232 260 304
EPS 9,27 10,4 12,16
EPS Adj 10,55 11,66 13,41
Total extraordinary items after tax 0 0 0
Tax rate (%) -28,5 -28 -27
Gross margin (%) 33,6 34,5 34,3
EBITDA margin (%) 14,5 15,5 16,6
EBITA margin (%) 12,1 12,8 13,9
EBIT margin (%) 11,1 11,8 13
Pretax margin (%) 10,2 11,1 12,3
Net margin (%) 7,3 8 9
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -15,1 3,2 3,6
EBITDA growth (%) -16,4 10,5 10,9
EBIT growth (%) -19,6 10,4 13,8
Net profit growth (%) -22,7 12,2 16,9
EPS growth (%) -22,7 12,2 16,9
Profitability 2020 2021 2022
ROE (%) 9,1 9,5 10,5
ROE Adj (%) 10,4 10,7 11,6
ROCE (%) 9,3 10 10,9
ROCE Adj(%) 10,1 10,8 11,7
ROIC (%) 7,6 8,5 9,9
ROIC Adj (%) 7,6 8,5 9,9
Adj earnings numbers 2020 2021 2022
EBITDA Adj 458 506 561
EBITDA Adj margin (%) 14,5 15,5 16,6
EBITA Adj 382 418 471
EBITA Adj margin (%) 12,1 12,8 13,9
EBIT Adj 350 386 439
EBIT Adj margin (%) 11,1 11,8 13
Pretax profit Adj 356 393 448
Net profit Adj 264 291 335
Net profit to shareholders Adj 264 291 335
Net Adj margin (%) 8,3 8,9 9,9
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 458 506 561
Net financial items -26 -25 -23
Paid tax -92 -101 -112
Non-cash items 0 0 0
Cash flow before change in WC 340 380 426
Change in WC -2 39 9
Operating cash flow 338 419 435
CAPEX tangible fixed assets -35 -52 -51
CAPEX intangible fixed assets -9 -23 -27
Acquisitions and disposals 0 0 0
Free cash flow 294 344 357
Dividend paid 0 -115 -120
Share issues and buybacks 0 0 0
Other non cash items 0 0 0
Decrease in net IB debt 264 198 204
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 1143 1143 1143
Indefinite intangible assets 0 0 0
Definite intangible assets 775 766 762
Tangible fixed assets 374 373 369
Other fixed assets 67 67 67
Fixed assets 2510 2496 2485
Inventories 601 620 608
Receivables 522 483 504
Other current assets 0 0 0
Cash and liquid assets 736 934 1138
Total assets 4369 4533 4735
Shareholders equity 2659 2804 2988
Minority 0 0 0
Total equity 2659 2804 2988
Long-term debt 743 743 743
Pension debt 230 230 230
Convertible debt 0 0 0
Deferred tax 220 220 220
Other long-term liabilities 24 24 24
Short-term debt 0 0 0
Accounts payable 167 188 198
Other current liabilities 169 167 175
Total liabilities and equity 4369 4533 4735
Net IB debt 394 196 -8
Net IB debt excl. pension debt 163 -34 -239
Capital invested 3297 3244 3224
Working capital 787 748 739
EV breakdown 2020 2021 2022
Market cap. diluted (m) 4076 4076 4076
Net IB debt Adj 394 196 -8
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 4469 4272 4067
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 73,8 73,3 72,9
Capital invested turnover (%) 95,4 99,8 104,5
Capital employed turnover (%) 86,1 84,5 83,9
Inventories / sales (%) 19,6 18,7 18,2
Customer advances / sales (%) 5,6 5,1 5,1
Payables / sales (%) 6 5,4 5,7
Working capital / sales (%) 24,8 23,5 22
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 14,8 7 -0,3
Net debt / market cap (%) 11,1 4,8 -0,2
Equity ratio (%) 60,9 61,9 63,1
Net IB debt adj. / equity (%) 14,8 7 -0,3
Current ratio (%) 514,8 535,4 564,8
EBITDA / net interest (%) 2784,1 2024,8 2441
Net IB debt / EBITDA (%) 85,9 38,7 -1,5
Interest cover (%) 2320,6 1670,4 2047,1
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 25 25 25
Fully diluted shares Adj 25 25 25
EPS 9,27 10,4 12,16
Dividend per share Adj 4,6 4,8 4,8
EPS Adj 10,55 11,66 13,41
BVPS 106,36 112,16 119,52
BVPS Adj 29,66 35,8 43,33
Net IB debt / share 15,7 7,8 -0,3
Share price 142,01 163 163
Market cap. (m) 3551 4076 4076
Valuation 2020 2021 2022
P/E 17,6 15,7 13,4
EV/sales 1,41 1,31 1,2
EV/EBITDA 9,8 8,4 7,2
EV/EBITA 11,7 10,2 8,6
EV/EBIT 12,8 11,1 9,3
Dividend yield (%) 2,8 2,9 2,9
FCF yield (%) 7,2 8,4 8,8
P/BVPS 1,53 1,45 1,36
P/BVPS Adj 5,5 4,55 3,76
P/E Adj 15,4 14 12,2
EV/EBITDA Adj 9,8 8,4 7,2
EV/EBITA Adj 11,7 10,2 8,6
EV/EBIT Adj 12,8 11,1 9,3
EV/cap. employed 1,2 1,1 1
Investment ratios 2020 2021 2022
Capex / sales 1,4 2,3 2,3
Capex / depreciation 104,6 140 142,4
Capex tangibles / tangible fixed assets 9,3 14 13,7
Capex intangibles / definite intangibles 1,2 3 3,5
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 11,3 14,4 14,8
N/A N/A N/A

Equity research

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Media

VBG Group - Interview with CEO Anders Birgersson (in Swedish)
VBG Group - Company presentation with CEO Anders Birgersson

Main shareholders - VBG Group

Main shareholders Share capital % Voting shares % Verified
Herman Kreftings Stiftelse för Allergi & Astmaforskning 22.6 % 27.6 % 31 Dec 2020
Stiftelsen SLK-anställda 4.3 % 23.6 % 31 Dec 2020
SEB Fonder 11.1 % 6.0 % 31 Dec 2020
Lannebo Fonder 10.6 % 5.8 % 31 Dec 2020
Nordea Fonder 7.4 % 4.0 % 31 Dec 2020
Swedbank Robur Fonder 5.8 % 3.1 % 31 Dec 2020
VBG Group AB 4.6 % 2.5 % 31 Dec 2020
If Skadeförsäkring AB 4.2 % 2.3 % 31 Dec 2020
Didner & Gerge Fonder 4.0 % 2.2 % 31 Dec 2020
Fjärde AP-fonden 3.9 % 2.1 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - VBG Group

Name Quantity Code Date
Fredrik Jignéus + 300 BUY 23 Jul 2020
Bror Anders Erkén + 426 BUY 26 Oct 2018
Bror Anders Erkén + 681 BUY 25 Oct 2018
Bo Hedberg + 7 500 BUY 9 Oct 2018
Clas Gunneberg + 15 000 ALTM 8 Oct 2018
Claes Wedin + 10 000 BUY 5 Oct 2018
Anders Birgersson + 20 000 BUY 5 Oct 2018
Bror Anders Erkén + 15 000 ALTM 4 Oct 2018
Claes Wedin + 500 BUY 24 Aug 2017
NILS HEDBERG + 130 BUY 7 Feb 2017

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