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Embellence Group

Embellence Group

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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.

Financials

SEKm 2022 2023e 2024e
Sales 720 721 751
Sales growth (%) 11,3 0,1 4,2
EBITDA 112 131 138
EBITDA margin (%) 15,6 18,1 18,4
EBIT adj. 85 83 91
EBIT adj. margin (%) 11,8 11,5 12,1
Pretax profit 70 72 86
EPS 2,54 2,5 2,97
EPS growth (%) -8,1 -1,5 18,5
EPS adj. 3,17 2,5 2,97
DPS 0,8 0,75 0,89
EV/EBITDA (x) 5,7 4,4 3,7
EV/EBIT adj. (x) 7,6 6,9 5,7
P/E (x) 7,5 7,6 6,4
P/E adj. (x) 6 7,6 6,4
EV/sales (x) 0,9 0,79 0,69
FCF yield (%) -11,4 25,5 21,5
Le. adj. FCF yld. (%) -14,3 21,1 17,1
Dividend yield (%) 4,2 4 4,7
Net IB debt/EBITDA (x) 1,9 1,1 0,6
Le. adj. ND/EBITDA (x) 1,5 0,9 0,3
SEKm 2022 2023e 2024e
Sales 720 721 751
COGS -297 -287 -299
Gross profit 423 434 453
Other operating items -311 -303 -314
EBITDA 112 131 138
Depreciation and amortisation -24 -28 -29
of which leasing depreciation -13 -19 -19
EBITA 89 103 109
EO Items -14 0 0
Impairment and PPA amortisation -17 -19 -18
EBIT 71 83 91
Net financial items -1 -11 -5
Pretax profit 70 72 86
Tax -13 -16 -19
Net profit 57 57 67
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 57 57 67
EPS 2,54 2,5 2,97
EPS adj. 3,17 2,5 2,97
Total extraordinary items after tax -14 0 0
Leasing payments -13 -19 -19
Tax rate (%) 18,5 22 22
Gross margin (%) 58,8 60,1 60,2
EBITDA margin (%) 15,6 18,1 18,4
EBITA margin (%) 12,3 14,2 14,6
EBIT margin (%) 9,9 11,5 12,1
Pre-tax margin (%) 9,8 10,1 11,4
Net margin (%) 8 7,8 8,9
Sales growth (%) 11,3 0,1 4,2
EBITDA growth (%) 4,8 16,1 6
EBITA growth (%) 0,5 16 6,7
EBIT growth (%) -11,3 17 9,4
Net profit growth (%) -3 -1,5 18,5
EPS growth (%) -8,1 -1,5 18,5
Profitability N/A N/A N/A
ROE (%) 16,6 13,5 14,5
ROE adj. (%) 25,7 18,2 18,5
ROCE (%) 17,6 11,8 12,2
ROCE adj. (%) 23 14,6 14,7
ROIC (%) 13,9 13,4 14,8
ROIC adj. (%) 16,2 13,4 14,8
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 127 131 138
EBITDA adj. margin (%) 17,6 18,1 18,4
EBITDA lease adj. 114 112 119
EBITDA lease adj. margin (%) 15,8 15,5 15,9
EBITA adj. 103 103 109
EBITA adj. margin (%) 14,3 14,2 14,6
EBIT adj. 85 83 91
EBIT adj. margin (%) 11,8 11,5 12,1
Pretax profit Adj. 102 92 104
Net profit Adj. 89 76 85
Net profit to shareholders adj. 89 76 85
Net adj. margin (%) 12,4 10,5 11,4
SEKm 2022 2023e 2024e
EBITDA 112 131 138
Goodwill 0 0 0
Net financial items -1 -11 -5
Other intangible assets 384 364 346
Paid tax -13 -16 -19
Tangible fixed assets 73 81 88
Non-cash items 47 0 0
Right-of-use asset 68 68 68
Cash flow before change in WC 146 104 114
Total other fixed assets 3 3 3
Change in working capital -38 23 -4
Fixed assets 527 515 504
Operating cash flow 108 126 110
Inventories 130 108 113
Capex tangible fixed assets -16 -17 -18
Receivables 113 110 114
Capex intangible fixed assets 0 0 0
Other current assets 18 22 23
Acquisitions and Disposals -140 0 0
Cash and liquid assets 66 139 195
Free cash flow -49 109 92
Total assets 853 893 949
Dividend paid -18 -18 -17
Shareholders equity 399 438 488
Share issues and buybacks 0 0 0
Minority 0 0 0
Leasing liability amortisation -13 -19 -19
Total equity 399 438 488
Other non-cash items -30 0 0
Long-term debt 75 75 75
Pension debt 6 6 6
Convertible debt 0 0 0
Leasing liability 70 70 70
Total other long-term liabilities 38 38 38
Short-term debt 133 133 133
Accounts payable 49 50 53
Other current liabilities 84 84 88
Total liabilities and equity 853 893 949
Net IB debt 215 142 86
Net IB debt excl. pension debt 209 136 80
Net IB debt excl. leasing 145 72 16
Capital employed 683 721 771
Capital invested 614 580 574
Working capital 128 105 109
Market cap. diluted (m) 428 428 428
Net IB debt adj. 217 145 89
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 645 573 517
Total assets turnover (%) 97,5 82,6 81,6
Working capital/sales (%) 15,1 16,1 14,3
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) 53,8 32,5 17,6
Net debt / market cap (%) 50,2 33,2 20,1
Equity ratio (%) 46,8 49 51,4
Net IB debt adj. / equity (%) 54,5 33,1 18,2
Current ratio 1,23 1,42 1,63
EBITDA/net interest 160,6 12,2 27,3
Net IB debt/EBITDA (x) 1,9 1,1 0,6
Net IB debt/EBITDA lease adj. (x) 1,5 0,9 0,3
Interest coverage 3,7 9,6 21,6
SEKm 2022 2023e 2024e
Shares outstanding adj. 23 23 23
Diluted shares adj. 23 23 23
EPS 2,54 2,5 2,97
Dividend per share 0,8 0,75 0,89
EPS adj. 3,17 2,5 2,97
BVPS 17,67 19,38 21,59
BVPS adj. 0,68 3,25 6,28
Net IB debt/share 9,63 6,42 3,93
Share price 18,95 18,95 18,95
Market cap. (m) 428 428 428
P/E (x) 7,5 7,6 6,4
EV/sales (x) 0,9 0,79 0,69
EV/EBITDA (x) 5,7 4,4 3,7
EV/EBITA (x) 7,3 5,6 4,7
EV/EBIT (x) 9,1 6,9 5,7
Dividend yield (%) 4,2 4 4,7
FCF yield (%) -11,4 25,5 21,5
Le. adj. FCF yld. (%) -14,3 21,1 17,1
P/BVPS (x) 1,07 0,98 0,88
P/BVPS adj. (x) 24,74 5,69 2,98
P/E adj. (x) 6 7,6 6,4
EV/EBITDA adj. (x) 5,1 4,4 3,7
EV/EBITA adj. (x) 6,3 5,6 4,7
EV/EBIT adj. (x) 7,6 6,9 5,7
EV/CE (x) 0,9 0,8 0,7
Investment ratios N/A N/A N/A
Capex/sales (%) 2,3 2,4 2,4
Capex/depreciation 1,4 1,9 1,8
Capex tangibles / tangible fixed assets 22,5 21,3 20,1
Capex intangibles / definite intangibles 0 0 0
Depreciation on intang / def. intang 0 0 0
Depreciation on tangibles / tangibles 15,59 11,25 11,34

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Media

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

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Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Acervo AB 16.1 % 16.1 % 28 Dec 2022
JCE Group 12.7 % 12.7 % 28 Dec 2022
Sellers of Artscape Inc 5.2 % 5.2 % 10 Mar 2022
Ramhill AB 4.9 % 4.9 % 28 Dec 2022
Avanza Pension 4.7 % 4.7 % 28 Dec 2022
Henrik Nyqvist 4.7 % 4.7 % 7 Oct 2022
Swedbank Robur Fonder 4.0 % 4.0 % 28 Feb 2023
FE Fonder 3.6 % 3.6 % 28 Feb 2023
Erik Åfors 3.6 % 3.6 % 28 Dec 2022
T-Konsortiet AB 3.5 % 3.5 % 28 Dec 2022
Source: Holdings by Modular Finance AB