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Swedencare

Swedencare

Premium animal health products

Swedencare is a high-growth, M&A-driven animal health company that develops, promotes and produces products mainly within Dematology, Neutraceuticals and Odontology for Pets, both under its multi-brand umbrella but also as a CDMO. Through an active M&A agenda, the company has gone from 2019 sales of SEK 127m to a PF Q3’21 LTM sales of SEK 1.6bn in two years, with an EBITDA margin of 29%. The products are sold globally, but after the M&A, the company is mainly active in the US, with >80% of PF sales coming from the region.

Having increased its size by roughly tenfold in two years through acquisitions, we see potential risks related to integration and extracting synergies. Furthermore, with the animal health space consolidating quickly, the sector is attracting increasing interest from financial and strategic buyers, pushing up M&A multiples. Being one of the consolidators, this risk also affects Swedencare if multiples continue to rise.

SEKm 2022 2023e 2024e
Lease adj. FCF yield (%) -38,1 2,5 3,4
Lease adj. ND/EBITDA 2,6 1,7 1
Sales 1882 2339 2653
Sales growth (%) 143,5 24,3 13,4
EBITDA 459 628 732
EBITDA margin (%) 24,4 26,9 27,6
EBIT adj 266 391 493
EBIT adj margin (%) 14,1 16,7 18,6
Pretax profit 209 371 473
EPS rep 0,96 1,65 2,16
EPS growth (%) 97,4 72 30,8
EPS adj 2,12 2,61 3,12
DPS 0,38 0,66 0,86
EV/EBITDA (x) 27,5 19,9 16,7
EV/EBIT adj (x) 47,6 32 24,8
P/E (x) 74,1 43,1 33
P/E adj (x) 33,6 27,2 22,8
EV/sales (x) 6,7 5,3 4,6
FCF yield (%) -37,9 2,8 3,7
Dividend yield (%) 0,5 0,9 1,2
Net IB debt/EBITDA 3,2 2 1,3
SEKm 2022 2023e 2024e
Depreciation and amortisation -86 -86 -88
Of which leasing depreciation -28 -28 -28
EO items -37 0 0
Impairment and PPA amortisation -145 -152 -152
EBITDA lease Adj 474 600 704
EBITDA lease Adj margin (%) 25,2 25,7 26,5
Sales 1882 2339 2653
COGS -826 -997 -1130
Gross profit 1056 1342 1523
Other operating items -597 -714 -791
EBITDA 459 628 732
Depreciation on tangibles -4 -5 -7
Depreciation on intangibles 0 0 0
EBITA 374 543 645
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 229 391 493
Other financial items 0 0 0
Net financial items -20 -20 -20
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 209 371 473
Tax -58 -110 -131
Net profit 151 261 341
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 151 261 341
EPS 0,96 1,65 2,16
EPS Adj 2,12 2,61 3,12
Total extraordinary items after tax -36,8 0 0
Tax rate (%) -27,9 -29,6 -27,8
Gross margin (%) 56,1 57,4 57,4
EBITDA margin (%) 24,4 26,9 27,6
EBITA margin (%) 19,9 23,2 24,3
EBIT margin (%) 12,2 16,7 18,6
Pretax margin (%) 11,1 15,9 17,8
Net margin (%) 8 11,2 12,9
Growth rates Y/Y 2022 2023 2024
Sales growth (%) 143,5 24,3 13,4
EBITDA growth (%) 231,9 36,8 16,5
EBIT growth (%) 249,9 70,6 26
Net profit growth (%) 176,2 73 30,8
EPS growth (%) 97,4 72 30,8
Profitability 2022 2023 2024
ROE (%) 3,3 3,9 4,9
ROE Adj (%) 7,4 6,2 7,1
ROCE (%) 4 4,7 5,8
ROCE Adj(%) 7,3 6,6 7,6
ROIC (%) 3 3,4 4,4
ROIC Adj (%) 3,5 3,4 4,4
Adj earnings numbers 2022 2023 2024
EBITDA Adj 496 628 732
EBITDA Adj margin (%) 26,4 26,9 27,6
EBITA Adj 411 543 645
EBITA Adj margin (%) 21,8 23,2 24,3
EBIT Adj 266 391 493
EBIT Adj margin (%) 14,1 16,7 18,6
Pretax profit Adj 391 523 625
Net profit Adj 332 413 493
Net profit to shareholders Adj 332 413 493
Net Adj margin (%) 17,7 17,7 18,6
Leasing payments -22 -28 -28
SEKm 2022 2023e 2024e
Lease liability amortisation -22 -28 -28
Other intangible assets 3364 3212 3060
Right-of-use asset 219 219 219
Total other fixed assets 7 7 7
Leasing liability 228 228 228
Total other long-term liabilities 795 795 795
Net IB debt excl. leasing 1238 1013 731
Net IB debt / EBITDA lease Adj (%) 261,3 168,7 103,8
EBITDA 459 628 732
Net financial items -20 -20 -20
Paid tax -58 -110 -131
Non-cash items 0 0 0
Cash flow before change in WC 381 499 581
Change in WC -136 -96 -66
Operating cash flow 246 402 515
CAPEX tangible fixed assets -69 -88 -101
CAPEX intangible fixed assets -1 0 0
Acquisitions and disposals -4418 0 0
Free cash flow -4242 314 414
Dividend paid -22 -60 -104
Share issues and buybacks 3533 0 0
Other non cash items -783 -37 -25
Decrease in net IB debt -38 65 90
Balance Sheet (SEKm) 2022 2023 2024
Goodwill 4495 4495 4495
Indefinite intangible assets 141 141 141
Definite intangible assets 0 0 0
Tangible fixed assets 380 410 452
Other fixed assets 0 0 0
Fixed assets 8465 8344 8233
Inventories 207 257 292
Receivables 370 461 522
Other current assets 130 162 184
Cash and liquid assets 122 347 629
Total assets 9294 9571 9861
Shareholders equity 6591 6792 7029
Minority 0 0 0
Total equity 6591 6792 7029
Long-term debt 1367 1367 1367
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 163 203 230
Other current liabilities 150 187 212
Total liabilities and equity 9294 9571 9861
Net IB debt 1466 1240 958
Net IB debt excl. pension debt 1466 1240 958
Capital invested 8057 8032 7987
Working capital 394 490 556
EV breakdown 2022 2023 2024
Market cap. diluted (m) 11183 11251 11251
Net IB debt Adj 1466 1240 958
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 12649 12491 12210
Capital efficiency (%) 2022 2023 2024
Total assets turnover (%) 29,5 24,8 27,3
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 (%) 16,3 18,9 19,7
Financial risk and debt service 2022 2023 2024
Net debt / equity (%) 22,2 18,3 13,6
Net debt / market cap (%) 13,1 11 8,5
Equity ratio (%) 70,9 71 71,3
Net IB debt adj. / equity (%) 22,2 18,3 13,6
Current ratio (%) 240,3 291,1 343,4
EBITDA / net interest (%) 2328,6 3141,7 3660,6
Net IB debt / EBITDA (%) 319,1 197,4 130,9
Interest cover (%) 1894,8 2714,2 3223,1
SEKm 2022 2023e 2024e
Lease adj. FCF yield (%) -38,1 2,5 3,4
Shares outstanding adj. 157 158 158
Fully diluted shares Adj 157 158 158
EPS 0,96 1,65 2,16
Dividend per share Adj 0,4 0,7 0,9
EPS Adj 2,12 2,61 3,12
BVPS 41,94 42,95 44,45
BVPS Adj 13,34 14,52 16,02
Net IB debt / share 9,3 7,8 6,1
Share price 71,16 71,16 71,16
Market cap. (m) 11183 11251 11251
Valuation 2022 2023 2024
P/E 74,1 43,1 33
EV/sales 6,72 5,34 4,6
EV/EBITDA 27,5 19,9 16,7
EV/EBITA 33,8 23 18,9
EV/EBIT 55,2 32 24,8
Dividend yield (%) 0,5 0,9 1,2
FCF yield (%) -37,9 2,8 3,7
P/BVPS 1,7 1,66 1,6
P/BVPS Adj 5,34 4,9 4,44
P/E Adj 33,6 27,2 22,8
EV/EBITDA Adj 25,5 19,9 16,7
EV/EBITA Adj 30,8 23 18,9
EV/EBIT Adj 47,6 32 24,8
EV/cap. employed 1,5 1,5 1,4
Investment ratios 2022 2023 2024
Capex / sales 3,7 3,8 3,8
Capex / depreciation 120,4 152,8 170,2
Capex tangibles / tangible fixed assets 18,2 21,4 22,4
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 15,3 14 13,2

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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 32.2 % 32.2 %
Mastan AB (Håkan Lagerberg) 13.3 % 13.3 %
JCC Group Invest Sweden AB (Johan Bergdahl) 13.3 % 13.3 %
Staffan Persson 5.1 % 5.1 %
AMF Försäkring & Fonder 4.8 % 4.8 %
Aktia 3.3 % 3.3 %
Handelsbanken Fonder 3.0 % 3.0 %
Avanza Pension 2.6 % 2.6 %
Nordnet Pensionsförsäkring 2.3 % 2.3 %
Martin Shimko 1.9 % 1.9 %

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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