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GARO

GARO

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Products and systems for the electrical installations industry

GARO develops and manufactures innovative and solution-oriented products and systems for the electrical installations industry under its own brand. The product areas are Electrical distribution products, Project business, Temporary power and E-mobility. GARO has a broad product assortment and is a market leader in several product areas. The corporate culture strives for common sense and willingness to move ahead, which it says allows it to offer truly user-friendly solutions with continuous innovation.

Continued product development and new launches have the potential to achieve organic growth exceeding market growth. Potential for geographical expansion and new business areas. Also, on the back of GARO's very solid balance sheet, there are opportunities to grow through value-added acquisitions.

Weaker construction market and lower industry growth. Unexpected competition in the EV charger segment.

Financials

SEKm 2021 2022e 2023e
Sales 1296 1562 1863
Sales growth (%) 24,6 20,5 19,3
EBITDA 243 275 335
EBITDA margin (%) 18,7 17,6 18
EBIT adj 207 235 294
EBIT adj margin (%) 16 15,1 15,8
Pretax profit 208 236 296
EPS rep 3,33 3,71 4,62
EPS growth (%) 74,8 11,4 24,4
EPS adj 3,39 3,77 4,68
DPS 1,4 1,86 2,31
EV/EBITDA (x) 44,4 25 20,6
EV/EBIT adj (x) 52,1 29,3 23,5
P/E (x) 64,8 37,5 30,1
P/E adj (x) 63,7 36,9 29,7
EV/sales (x) 8,3 4,4 3,7
FCF yield (%) 0,7 1,9 1,3
Dividend yield (%) 0,6 1,3 1,7
Net IB debt/EBITDA 0 -0,2 -0,1
Lease adj. FCF yield (%) 0,6 1,8 1,2
Lease adj. ND/EBITDA -0,2 -0,3 -0,2
SEKm 2021 2022e 2023e
Sales 1296 1562 1863
COGS -649 -768 -913
Gross profit 647 793 950
Other operating items -404 -518 -615
EBITDA 243 275 335
Depreciation on tangibles -27 -30 -29
Depreciation on intangibles 0 0 0
EBITA 210 238 297
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 207 235 294
Other financial items 0 0 0
Net financial items 1 1 2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 208 236 296
Tax -42 -51 -65
Net profit 167 186 231
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 167 186 231
EPS 3,33 3,71 4,62
EPS Adj 3,39 3,77 4,68
Total extraordinary items after tax 0 0 0
Tax rate (%) -20 -21,5 -22,1
Gross margin (%) 49,9 50,8 51
EBITDA margin (%) 18,7 17,6 18
EBITA margin (%) 16,2 15,3 16
EBIT margin (%) 16 15,1 15,8
Pretax margin (%) 16,1 15,1 15,9
Net margin (%) 12,9 11,9 12,4
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 24,6 20,5 19,3
EBITDA growth (%) 48,9 13,4 21,8
EBIT growth (%) 52,2 13,6 25
Net profit growth (%) 74,8 11,4 24,4
EPS growth (%) 74,8 11,4 24,4
Profitability 2021 2022 2023
ROE (%) 33,9 30,5 31,4
ROE Adj (%) 34,5 30,9 31,8
ROCE (%) 36,2 34,2 36,1
ROCE Adj(%) 36,7 34,7 36,5
ROIC (%) 33,3 31,9 33,5
ROIC Adj (%) 33,3 31,9 33,5
Adj earnings numbers 2021 2022 2023
EBITDA Adj 243 275 335
EBITDA Adj margin (%) 18,7 17,6 18
EBITA Adj 210 238 297
EBITA Adj margin (%) 16,2 15,3 16
EBIT Adj 207 235 294
EBIT Adj margin (%) 16 15,1 15,8
Pretax profit Adj 211 239 299
Net profit Adj 170 189 234
Net profit to shareholders Adj 170 189 234
Net Adj margin (%) 13,1 12,1 12,6
Depreciation and amortisation -33 -37 -38
Of which leasing depreciation -8 -9 -10
EO items 0 0 0
Impairment and PPA amortisation -3 -3 -3
EBITDA lease Adj 243 275 335
EBITDA lease Adj margin (%) 18,7 17,6 18
Leasing payments 0 0 0
SEKm 2021 2022e 2023e
EBITDA 243 275 335
Net financial items 1 1 2
Paid tax -42 -51 -65
Non-cash items 0 0 0
Cash flow before change in WC 202 226 272
Change in WC -81 -4 -57
Operating cash flow 122 221 215
CAPEX tangible fixed assets -18 -47 -75
CAPEX intangible fixed assets -27 -39 -47
Acquisitions and disposals 0 0 0
Free cash flow 77 135 94
Dividend paid -48 -70 -93
Share issues and buybacks 0 0 0
Other non cash items 1 0 0
Decrease in net IB debt 26 60 -3
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 46 46 46
Indefinite intangible assets 0 0 0
Definite intangible assets 94 94 91
Tangible fixed assets 106 124 171
Other fixed assets 6 6 6
Fixed assets 256 313 403
Inventories 242 265 317
Receivables 357 375 447
Other current assets 0 0 0
Cash and liquid assets 82 136 126
Total assets 937 1089 1293
Shareholders equity 552 667 805
Minority 0 0 0
Total equity 552 667 805
Long-term debt 27 27 27
Pension debt 6 6 6
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 4 4
Short-term debt 10 10 10
Accounts payable 166 187 224
Other current liabilities 141 156 186
Total liabilities and equity 937 1089 1293
Net IB debt -3 -58 -48
Net IB debt excl. pension debt -9 -64 -54
Capital invested 548 609 757
Working capital 293 297 354
EV breakdown 2021 2022 2023
Market cap. diluted (m) 10800 6950 6950
Net IB debt Adj -3 -58 -48
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 10797 6892 6902
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 154,2 154,2 156,4
Capital invested turnover (%) 250,7 246,3 240,1
Capital employed turnover (%) 223,1 203,8 192,7
Inventories / sales (%) 17 17,2 17,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 22,2 22 22,9
Working capital / sales (%) 19,2 18,9 17,5
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -0,6 -8,7 -5,9
Net debt / market cap (%) 0 -0,8 -0,7
Equity ratio (%) 58,9 61,2 62,2
Net IB debt adj. / equity (%) -0,6 -8,7 -5,9
Current ratio (%) 208,7 213,9 207,3
EBITDA / net interest (%) -22081,8 -27536,4 -16763,8
Net IB debt / EBITDA (%) -1,3 -21 -14,2
Interest cover (%) -19109,1 -23836,4 -14863,8
Lease liability amortisation -12 -11 -11
Other intangible assets 63 99 142
Right-of-use asset 39 40 41
Total other fixed assets 4 4 4
Leasing liability 36 36 36
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing -39 -94 -84
Net IB debt / EBITDA lease Adj (%) -16 -34 -24,9
SEKm 2021 2022e 2023e
Shares outstanding adj. 50 50 50
Fully diluted shares Adj 50 50 50
EPS 3,33 3,71 4,62
Dividend per share Adj 1,4 1,9 2,3
EPS Adj 3,39 3,77 4,68
BVPS 11,03 13,34 16,1
BVPS Adj 8,87 10,46 12,35
Net IB debt / share -0,1 -1,2 -1
Share price 158,35 139 139
Market cap. (m) 7917 6950 6950
Valuation 2021 2022 2023
P/E 64,8 37,5 30,1
EV/sales 8,33 4,41 3,71
EV/EBITDA 44,4 25 20,6
EV/EBITA 51,4 28,9 23,2
EV/EBIT 52,1 29,3 23,5
Dividend yield (%) 0,6 1,3 1,7
FCF yield (%) 0,7 1,9 1,3
P/BVPS 19,58 10,42 8,63
P/BVPS Adj 24,36 13,29 11,26
P/E Adj 63,7 36,9 29,7
EV/EBITDA Adj 44,4 25 20,6
EV/EBITA Adj 51,4 28,9 23,2
EV/EBIT Adj 52,1 29,3 23,5
EV/cap. employed 17,1 9,2 7,8
Investment ratios 2021 2022 2023
Capex / sales 3,4 5,5 6,5
Capex / depreciation 179,8 306,8 432,4
Capex tangibles / tangible fixed assets 17 37,6 43,6
Capex intangibles / definite intangibles 42,3 39,6 32,7
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 23,4 22,5 16,4
Lease adj. FCF yield (%) 0,6 1,8 1,2

Equity research

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Media

GARO - Company presentation with CEO Patrik Andersson
GARO - Company presentation with CEO Patrik Andersson

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Main shareholders - GARO

Main shareholders Share capital % Voting shares % Verified
Lars Svensson 35.7 % 35.7 % 31 Mar 2022
Swedbank Robur Fonder 9.4 % 9.4 % 31 Mar 2022
Svolder 8.7 % 8.7 % 31 Mar 2022
Nordea Fonder 4.9 % 4.9 % 31 Mar 2022
SEB Fonder 4.5 % 4.5 % 30 Apr 2022
Stefan Jonsson 3.5 % 3.5 % 31 Mar 2022
Spiltan Fonder 3.5 % 3.5 % 30 Apr 2022
Tredje AP-fonden 2.6 % 2.6 % 31 Mar 2022
Rickard Blomqvist 1.2 % 1.2 % 1 Jan 2022
AXA 0.9 % 0.9 % 31 Mar 2022
Source: Holdings by Modular Finance AB

Insider list - GARO

Name Quantity Code Date
Jan Larsgaard - 5 000 SELL 13 Apr 2021
Stefan Jonsson - 5 000 SELL 2 Mar 2021
Stefan Jonsson - 5 000 SELL 1 Mar 2021
Lars-Åke Rydh - 2 500 SELL 15 Feb 2021
GARO Aktiebolag - 2 500 SELL 15 Feb 2021
Rickard Blomqvist - 10 918 SELL 7 Jan 2021
Rickard Blomqvist - 9 082 SELL 5 Jan 2021
Rickard Blomqvist - 10 000 SELL 4 Jan 2021
Stefan Jonsson - 20 000 SELL 17 Dec 2020
Stefan Jonsson - 10 000 SELL 15 Dec 2020

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