Indutrade (AO) | Buy | Q2: Demand is back

Research evidence excerpt

Indutrade (AO) | Buy | Q2: Demand is back

Indutrade Buy | Target Price: SEK235.00

Company description Management

Indutrade AB is a Swedish industrial group that acquires and develops niche Bo Annvik, President and CEO

technology and industrial companies. The focus has been on acquiring quality Patrik Johnson, CFO

trading and manufacturing companies within a wide range of industries at Key shareholders

reasonable prices. With over 200 subsidiaries across Europe, it emphasizes long- Free float 71.45%

term growth and decentralised management. Since 2000, sales and earnings Lundbergföretagen AB 26.62%

have grown double digits annually, reflecting durable and profitable expansion. AMF Pension & Fonder 9.64%

Fidelity Investments (FMR) 6.54%

Investment case Valuation methodology

Indutrade has a long track record of margin accretive M&A We calculate our target price using an equal blend of a DCF and

growth. peer multiples on EV/EBITA.

The new group structure, with industrial verticals instead of We include only announced acquisitions in our estimates, but

geographical, improves visibility, makes M&A opportunities account for more M&A in our valuation.

easier to communicate, and is likely to speed up acquisition Risks to our rating

pace. A slowdown in acquisition pace could lead to Indutrade's shares

The group is organised into five business areas which deliver de-rating.

diversified revenues, reducing idiosyncratic risk in individual Slower organic growth than expected.

companies' underlying performance. Increased competition for potential targets and higher prices for

Catalysts acquisitions.

Recovery in operating margins.

The company delivering on its upgraded ambition of 30

acquisitions a year.

Recovery of the European industrial production.

Key data charts