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Embellence Group

Embellence Group

Embellence Group is a Swedish house of brands focused on premium wallpaper that is successively expanding into adjacent product categories (textiles, rugs, window film). It holds leading positions in the Swedish and Norwegian markets, and top-three positions in Italy and the UK. Embellence has over 100 years of history and today consists of the six brands Artscape Inc., Boråstapeter, Cole & Son, Wall & Decó, Pappelina and Perswall. The group aims to broaden its geographical footprint and grow both organically and through acquisitions, with a focus on the premium segment.

Embellence uses a variety of raw materials in its production, making it subject to potential cost inflation that could hamper margins and earnings. Other risks include production-related risks, but we view this risk as fairly low given that the majority of its production is in-house. Embellence also has exchange rate exposure, primarily to GBP, EUR, NOK and USD, which could have a significant impact if large fluctuations occur.

SEKm 2023 2024e 2025e
Sales 740 758 790
Sales growth (%) 2,8 2,3 4,3
EBITDA 115 127 137
EBITDA margin (%) 15,5 16,8 17,3
EBIT adj. 73 79 88
EBIT adj. margin (%) 9,9 10,5 11,2
Pretax profit 52 64 78
EPS 1,74 2,25 2,74
EPS growth (%) -31,5 29,5 21,4
EPS adj. 1,88 2,25 2,74
DPS 0 0,8 1
EV/EBITDA (x) 6,3 5,1 4,4
EV/EBIT adj. (x) 9,9 8,2 6,8
P/E (x) 13 10 8,3
P/E adj. (x) 12 10 8,3
EV/sales (x) 0,97 0,86 0,76
FCF yield (%) 9,5 17,3 17,6
Le. adj. FCF yld. (%) 6 13,4 13,7
Dividend yield (%) 0 3,5 4,4
Net IB debt/EBITDA (x) 1,8 1,1 0,6
Le. adj. ND/EBITDA (x) 1,5 0,7 0,3
SEKm 2023 2024e 2025e
Sales 740 758 790
COGS -308 -306 -316
Gross profit 433 452 474
Other operating items -317 -325 -338
EBITDA 115 127 137
Depreciation and amortisation -23 -25 -25
of which leasing depreciation -16 -13 -13
EBITA 92 102 111
EO Items -3 0 0
Impairment and PPA amortisation -22 -23 -23
EBIT 70 79 88
Net financial items -18 -15 -10
Pretax profit 52 64 78
Tax -13 -14 -16
Net profit 39 51 62
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 39 51 62
EPS 1,74 2,25 2,74
EPS adj. 1,88 2,25 2,74
Total extraordinary items after tax -3 0 0
Leasing payments -16 -13 -13
Tax rate (%) 24,1 21 21
Gross margin (%) 58,4 59,7 60
EBITDA margin (%) 15,5 16,8 17,3
EBITA margin (%) 12,4 13,5 14,1
EBIT margin (%) 9,5 10,5 11,2
Pre-tax margin (%) 7 8,5 9,9
Net margin (%) 5,3 6,7 7,8
Sales growth (%) 2,8 2,3 4,3
EBITDA growth (%) 2,4 10,3 7,5
EBITA growth (%) 4 11 9,1
EBIT growth (%) -1,5 13,3 11,5
Net profit growth (%) -31,5 29,5 21,4
EPS growth (%) -31,5 29,5 21,4
Profitability N/A N/A N/A
ROE (%) 9,7 11,6 12,7
ROE adj. (%) 15,8 16,7 17,4
ROCE (%) 11,5 11,9 13,4
ROCE adj. (%) 15,3 15,4 16,8
ROIC (%) 11,3 13,1 14,7
ROIC adj. (%) 11,7 13,1 14,7
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 118 127 137
EBITDA adj. margin (%) 16 16,8 17,3
EBITDA lease adj. 102 114 124
EBITDA lease adj. margin (%) 13,8 15,1 15,7
EBITA adj. 95 102 111
EBITA adj. margin (%) 12,9 13,5 14,1
EBIT adj. 73 79 88
EBIT adj. margin (%) 9,9 10,5 11,2
Pretax profit Adj. 77 87 101
Net profit Adj. 65 74 85
Net profit to shareholders adj. 65 74 85
Net adj. margin (%) 8,7 9,7 10,7
SEKm 2023 2024e 2025e
EBITDA 115 127 137
Goodwill 240 240 240
Net financial items -18 -15 -10
Other intangible assets 124 101 78
Paid tax -13 -14 -16
Tangible fixed assets 75 76 78
Non-cash items -4 0 0
Right-of-use asset 55 62 68
Cash flow before change in WC 80 99 110
Total other fixed assets 3 3 3
Change in working capital -19 3 -6
Fixed assets 496 482 467
Operating cash flow 61 102 104
Inventories 136 136 142
Capex tangible fixed assets -13 -14 -14
Receivables 110 107 112
Capex intangible fixed assets 0 0 0
Other current assets 22 23 24
Acquisitions and Disposals 0 0 0
Cash and liquid assets 38 56 58
Free cash flow 49 88 90
Total assets 802 804 803
Dividend paid -18 0 -18
Shareholders equity 415 466 510
Share issues and buybacks 0 0 0
Minority 0 0 0
Leasing liability amortisation -18 -20 -20
Total equity 415 466 510
Other non-cash items 16 0 0
Long-term debt 57 57 57
Pension debt 7 7 7
Convertible debt 0 0 0
Leasing liability 58 58 58
Total other long-term liabilities 17 17 17
Short-term debt 127 77 27
Accounts payable 53 53 55
Other current liabilities 68 70 73
Total liabilities and equity 802 804 803
Net IB debt 208 139 87
Net IB debt excl. pension debt 201 133 81
Net IB debt excl. leasing 150 81 29
Capital employed 664 665 658
Capital invested 623 605 597
Working capital 147 143 150
Market cap. diluted (m) 510 510 510
Net IB debt adj. 211 142 90
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity N/A N/A N/A
EV 721 653 601
Total assets turnover (%) 89,5 94,4 98,4
Working capital/sales (%) 18,5 19,1 18,5
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) 50,1 29,9 17,1
Net debt / market cap (%) 40,7 27,3 17,1
Equity ratio (%) 51,7 57,9 63,4
Net IB debt adj. / equity (%) 50,9 30,6 17,8
Current ratio 1,23 1,61 2,17
EBITDA/net interest 6,3 8,5 13,3
Net IB debt/EBITDA (x) 1,8 1,1 0,6
Net IB debt/EBITDA lease adj. (x) 1,5 0,7 0,3
Interest coverage 3,8 6,9 10,9
SEKm 2023 2024e 2025e
Shares outstanding adj. 23 23 23
Diluted shares adj. 23 23 23
EPS 1,74 2,25 2,74
Dividend per share 0 0,8 1
EPS adj. 1,88 2,25 2,74
BVPS 18,37 20,63 22,56
BVPS adj. 2,28 5,54 8,49
Net IB debt/share 9,34 6,31 4,01
Share price 22,6 22,6 22,6
Market cap. (m) 510 510 510
P/E (x) 13 10 8,3
EV/sales (x) 0,97 0,86 0,76
EV/EBITDA (x) 6,3 5,1 4,4
EV/EBITA (x) 7,8 6,4 5,4
EV/EBIT (x) 10,3 8,2 6,8
Dividend yield (%) 0 3,5 4,4
FCF yield (%) 9,5 17,3 17,6
Le. adj. FCF yld. (%) 6 13,4 13,7
P/BVPS (x) 1,23 1,1 1
P/BVPS adj. (x) 9,05 3,92 2,59
P/E adj. (x) 12 10 8,3
EV/EBITDA adj. (x) 6,1 5,1 4,4
EV/EBITA adj. (x) 7,6 6,4 5,4
EV/EBIT adj. (x) 9,9 8,2 6,8
EV/CE (x) 1,1 1 0,9
Investment ratios N/A N/A N/A
Capex/sales (%) 1,7 1,8 1,8
Capex/depreciation 1,8 1,1 1,1
Capex tangibles / tangible fixed assets 17 17,8 18
Capex intangibles / definite intangibles 0 0 0
Depreciation on intang / def. intang 0 0 0
Depreciation on tangibles / tangibles 9,53 15,8 15,77

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Media

Embellence Group - Company presentation with CEO Olle Svensk
Embellence Group - Company presentation with CEO Olle Svensk

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Peter Lindell 15.8 % 15.8 % 27 Dec 2023
JCE Group 12.5 % 12.5 % 27 Dec 2023
Ramhill AB 10.1 % 10.1 % 27 Dec 2023
Sellers of Artscape Inc 5.2 % 5.2 % 10 Mar 2022
Avanza Pension 4.9 % 4.9 % 27 Dec 2023
Henrik Nyqvist 4.6 % 4.6 % 8 Dec 2023
Swedbank Robur Fonder 4.0 % 4.0 % 31 Jan 2024
FE Fonder 3.5 % 3.5 % 31 Jan 2024
Erik Åfors 3.5 % 3.5 % 27 Dec 2023
T-Konsortiet AB 3.5 % 3.5 % 27 Dec 2023
Source: Holdings by Modular Finance AB