Svedbergs finished off the year on a high note, growing sales 52% y-o-y to SEK 281m (16% organic, 36% M&A, 0.5% FX). The acquisition of Roper Rhodes, consolidated on 1 December ‘21, constituted 17% of the sales growth in Q4. EBITA came in at SEK 33m (-4% vs ABGSCe), yielding a margin of 11.7%, which is an expansion of 0.7pp y-o-y. The core growth drivers in Q4 were 1) continued strong end-market, 2) positive effects from price increases that offset cost inflation, and 3) successful product launches yielding higher volumes. For the full year, the group reported an EBITA margin of 14.7%, excluding acquisitions, which is just below its target of 15%. Lastly, we note that all brands improved their profitability in 2021, compared to the previous year.
Strong end-market should drive demand in 2022e
Although PTP took a hit in Q4, we stress that this was due to costs related to the acquisition of Roper Rhodes. As highlighted in our preview, we argue that the acquisition should contribute valuable additions to the group from 2022 onwards. We are impressed by Svedbergs’ ability to stay resilient to cost inflation and supply chain disruptions and argue that this presumably is due to its vast share of in-house production coupled with a successful price/volume mix. Going forward we expect this to continue as the group implements further price increases while scaling well from its in-house production. However, we note that Roper Rhodes has outsourced production and consequently is more exposed to e.g., increased freight costs. On the back of this (and Q4 report deviations) we lower our EBITA estimates for ‘22e-‘23e by ~1%, but raise our sales estimates by 2% as we expect continued momentum in the underlying market to drive demand ahead.
Share is trading at 12x-11x EV/EBITA in ‘22e-‘23e The Svedbergs share is trading at 12x-11x EV/ ... Läs mer på Introduce
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