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Embellence Group

Embellence Group

Embellence Group is a Swedish brand collective focused on premium wallpaper that is expanding into adjacent product categories (textiles, rugs, window film). It holds leading positions in Sweden and Norway, and top-3 positions in Italy and the UK. It has over 100 years of history and today consists of the 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.

Sustainability information

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 740 790 825
Sales growth (%) 2,8 6,8 4,3
EBITDA 119 139 148
EBITDA margin (%) 16 17,6 18
EBIT adj. 73 93 98
EBIT adj. margin (%) 9,9 11,7 11,9
Pretax profit 52 74 87
EPS 1,74 2,51 2,96
EPS growth (%) -31,5 44,1 18,1
EPS adj. 1,88 2,51 2,96
DPS 0 0,8 1
EV/EBITDA (x) 7,5 6 5,3
EV/EBIT adj. (x) 12,1 9,1 8
P/E (x) 17,2 12 10,1
P/E adj. (x) 15,9 12 10,1
EV/sales (x) 1,2 1,06 0,95
FCF yield (%) 7,2 10,1 13,3
Le. adj. FCF yld. (%) 4,5 7,7 10,9
Dividend yield (%) 0 2,7 3,3
Net IB debt/EBITDA (x) 1,8 1,1 0,7
Le. adj. ND/EBITDA (x) 1,4 0,8 0,4
SEKm 2023 2024e 2025e
Sales 740 790 825
COGS -308 -319 -329
Gross profit 433 472 496
Other operating items -314 -333 -348
EBITDA 119 139 148
Depreciation and amortisation -27 -28 -29
of which leasing depreciation -16 -13 -13
EBITA 92 111 119
EO Items -3 0 0
Impairment and PPA amortisation -22 -18 -21
EBIT 70 93 98
Net financial items -18 -19 -11
Pretax profit 52 74 87
Tax -13 -17 -20
Net profit 39 57 67
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 39 57 67
EPS 1,74 2,51 2,96
EPS adj. 1,88 2,51 2,96
Total extraordinary items after tax -3 0 0
Leasing payments -16 -13 -13
Tax rate (%) 24,1 23,4 23
Gross margin (%) 58,4 59,7 60,1
EBITDA margin (%) 16 17,6 18
EBITA margin (%) 12,4 14 14,4
EBIT margin (%) 9,5 11,7 11,9
Pre-tax margin (%) 7 9,4 10,5
Net margin (%) 5,3 7,2 8,1
Sales growth (%) 2,8 6,8 4,3
EBITDA growth (%) 5,5 17,1 6,6
EBITA growth (%) 4 20,2 7,4
EBIT growth (%) -1,5 32,3 5,6
Net profit growth (%) -31,5 44,1 18,1
EPS growth (%) -31,5 44,1 18,1
Profitability N/A N/A N/A
ROE (%) 9,7 12,4 12,8
ROE adj. (%) 15,8 16,4 16,9
ROCE (%) 11,5 13,6 14
ROCE adj. (%) 15,3 16,2 17
ROIC (%) 11,3 13,3 14
ROIC adj. (%) 11,7 13,3 14
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 122 139 148
EBITDA adj. margin (%) 16,5 17,6 18
EBITDA lease adj. 106 126 135
EBITDA lease adj. margin (%) 14,3 16 16,4
EBITA adj. 95 111 119
EBITA adj. margin (%) 12,9 14 14,4
EBIT adj. 73 93 98
EBIT adj. margin (%) 9,9 11,7 11,9
Pretax profit Adj. 77 92 108
Net profit Adj. 65 75 88
Net profit to shareholders adj. 65 75 88
Net adj. margin (%) 8,7 9,4 10,7
SEKm 2023 2024e 2025e
EBITDA 119 139 148
Goodwill 240 240 240
Net financial items -18 -19 -11
Other intangible assets 124 124 103
Paid tax -13 -17 -20
Tangible fixed assets 75 81 84
Non-cash items -8 8 0
Right-of-use asset 55 57 61
Cash flow before change in WC 80 111 117
Total other fixed assets 3 3 3
Change in working capital -19 -22 -7
Fixed assets 496 506 491
Operating cash flow 61 89 110
Inventories 136 142 148
Capex tangible fixed assets -13 -21 -19
Receivables 110 130 136
Capex intangible fixed assets 0 0 0
Other current assets 22 24 25
Acquisitions and Disposals 0 0 0
Cash and liquid assets 38 40 46
Free cash flow 49 69 90
Total assets 802 842 846
Dividend paid -18 0 -18
Shareholders equity 415 496 545
Share issues and buybacks 0 0 0
Minority 0 0 0
Leasing liability amortisation -18 -16 -16
Total equity 415 496 545
Other non-cash items 16 -2 0
Long-term debt 57 55 55
Pension debt 7 7 7
Convertible debt 0 0 0
Leasing liability 58 58 58
Total other long-term liabilities 17 16 16
Short-term debt 127 81 31
Accounts payable 53 55 58
Other current liabilities 68 73 76
Total liabilities and equity 802 842 846
Net IB debt 208 158 102
Net IB debt excl. pension debt 201 151 95
Net IB debt excl. leasing 150 100 44
Capital employed 664 698 696
Capital invested 623 655 647
Working capital 147 168 176
Market cap. diluted (m) 678 678 678
Net IB debt adj. 211 162 106
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 889 839 783
Total assets turnover (%) 89,5 96,2 97,7
Working capital/sales (%) 18,5 19,9 20,9
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) 50,1 31,9 18,8
Net debt / market cap (%) 30,7 23,4 15,1
Equity ratio (%) 51,7 59 64,4
Net IB debt adj. / equity (%) 50,9 32,5 19,4
Current ratio 1,23 1,61 2,15
EBITDA/net interest 6,5 7,5 13,5
Net IB debt/EBITDA (x) 1,8 1,1 0,7
Net IB debt/EBITDA lease adj. (x) 1,4 0,8 0,4
Interest coverage 3,8 5,9 10,9
SEKm 2023 2024e 2025e
Shares outstanding adj. 23 23 23
Diluted shares adj. 23 23 23
EPS 1,74 2,51 2,96
Dividend per share 0 0,8 1
EPS adj. 1,88 2,51 2,96
BVPS 18,37 21,98 24,14
BVPS adj. 2,28 5,87 8,96
Net IB debt/share 9,34 7,15 4,68
Share price 30 30 30
Market cap. (m) 678 678 678
P/E (x) 17,2 12 10,1
EV/sales (x) 1,2 1,06 0,95
EV/EBITDA (x) 7,5 6 5,3
EV/EBITA (x) 9,7 7,6 6,6
EV/EBIT (x) 12,7 9,1 8
Dividend yield (%) 0 2,7 3,3
FCF yield (%) 7,2 10,1 13,3
Le. adj. FCF yld. (%) 4,5 7,7 10,9
P/BVPS (x) 1,63 1,37 1,24
P/BVPS adj. (x) 12,01 4,83 3,23
P/E adj. (x) 15,9 12 10,1
EV/EBITDA adj. (x) 7,3 6 5,3
EV/EBITA adj. (x) 9,3 7,6 6,6
EV/EBIT adj. (x) 12,1 9,1 8
EV/CE (x) 1,3 1,2 1,1
Investment ratios N/A N/A N/A
Capex/sales (%) 1,7 2,6 2,4
Capex/depreciation 1,2 1,3 1,2
Capex tangibles / tangible fixed assets 17 25,6 23,1
Capex intangibles / definite intangibles 0 0 0
Depreciation on intang / def. intang 0 0 0
Depreciation on tangibles / tangibles 14,23 19,05 19,56

Equity research

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Media

Embellence Group - Company presentation with CEO Olle Svensk & CFO Karin Lidén
Embellence Group - Company presentation with CEO Olle Svensk

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Peter Lindell 15.8 % 15.8 % 26 Mar 2024
JCE Group 12.5 % 12.5 % 26 Mar 2024
Ramhill AB 10.1 % 10.1 % 26 Mar 2024
Sellers of Artscape Inc 5.2 % 5.2 % 10 Mar 2022
Avanza Pension 5.0 % 5.0 % 26 Mar 2024
Henrik Nyqvist 4.6 % 4.6 % 8 Dec 2023
Swedbank Robur Fonder 4.0 % 4.0 % 30 Apr 2024
FE Fonder 3.5 % 3.5 % 30 Apr 2024
Erik Åfors 3.5 % 3.5 % 26 Mar 2024
T-Konsortiet AB 3.5 % 3.5 % 26 Mar 2024
Source: Holdings by Modular Finance AB