Bulten (AO) | Buy | Some China moves ahead of the 10 July Q2 report

Research evidence excerpt

Bulten (AO) | Buy | Some China moves ahead of the 10 July Q2 report

Bulten Buy | Target Price: SEK58.00

Company description Management

Bulten is one of the leading suppliers of fasteners to the European automotive Axel Berntsson, CEO

industry. The company's product range includes everything from customer- Anna Åkerblad, CFO

specific standard products to specialist, customised fasteners. The company also Key shareholders

provides technical development, line-feeding, logistics, material and production Free float 75.00%

expertise. Bulten offers a Full Service Provider (FSP) concept, which could AB Axel Granlund 24.81%

include procurement, development, production and delivery to the customers. Nordea Funds 5.95%

Avanza Pension 5.03%

Investment case Valuation methodology

Bulten's Full Service Provider (FSP) offering for fasteners Our TP is based on a mix of peer multiples and a DCF valuation.

represents a growth opportunity, which could support sales in Peers are normally found in the automotive OEM supplier

the future. segment.

The electrification trend in the automotive industry creates The DCF valuation is based on a WACC of 11%, an EBIT margin of

opportunities. First, the entrance of new car producers with 7%, and a terminal growth rate of 2%.

limited fastener knowledge can benefit the FSP offering, and Risks to our rating

second, EV powertrains have fewer parts, which probably makes With two-thirds of sales to light vehicle producers, Bulten is

it less risky for car producers to outsource the fastener affected by changes in light vehicle demand. A slowdown in

operation. economic growth and demand for light vehicles could affect

Bulten has an acquisition-based growth strategy. The earnings negatively.