Vestum: A Deep Dive into the Swedish Industrial Giant

Vestum, a Swedish conglomerate with a diverse portfolio of companies in sectors such as construction, installation, and pump equipment, has been making waves in the business world. With a stock price of 11.30 kr and a market value of 4,247 Mkr, Vestum is a significant player in the Swedish market, generating over 80% of its revenue domestically.

Led by CEO Simon Göthberg and Chairman Conny Ryk, Vestum operates a decentralized structure common among serial acquirers. Ryk, the largest shareholder with 17.8% of the company’s shares, founded the company and previously served as CEO. Göthberg, the CEO, is also a significant shareholder, holding an ownership stake worth 154 Mkr.

With insiders owning 43% of the company, many of them former owners of businesses acquired by Vestum in stock transactions, the company has a strong internal ownership structure. This ownership model has helped fuel Vestum’s growth trajectory, allowing it to acquire over 50 companies and expand its operations rapidly.

Looking ahead, Vestum’s financial projections indicate steady revenue growth, with estimates for 2023 showing a 11.6% increase in sales. The company’s focus on operational efficiency and strategic acquisitions has positioned it for continued success in the coming years.

Despite facing challenges in the past, including a high debt load and a slowdown in the construction industry, Vestum has managed to navigate these obstacles effectively. By divesting non-core assets, renegotiating loan terms, and streamlining operations, the company has strengthened its balance sheet and improved its financial performance.

In terms of business segments, Vestum’s operations are divided into three main categories: Water, Services, and Infrastructure. Each segment plays a crucial role in the company’s overall revenue generation, with Water accounting for 15% of sales and 28% of Ebita, Services contributing 31% of sales and 24% of Ebita, and Infrastructure making up the remaining 54% of sales and 48% of Ebita.

One of the key drivers of Vestum’s profitability is its diverse portfolio of companies, each with unique business models and customer segments. From pump suppliers and installation services to infrastructure maintenance and repair, Vestum’s subsidiaries cover a wide range of industries, providing stability and resilience in a competitive market.

Looking at Vestum’s financial performance, the company has demonstrated strong revenue growth and profitability, with an Ebita margin of 11.5% in 2022 and 10.8% in 2023. Despite challenges in the market, Vestum’s commitment to operational excellence and financial discipline has helped it weather the storm and emerge stronger.

As Vestum charts a course for the future, the company remains focused on strategic acquisitions and organic growth opportunities. With a recent acquisition in the UK market and plans to expand its Water segment, Vestum is positioning itself for long-term success in the competitive industrial landscape.

In conclusion, Vestum’s journey from a startup on the brink of collapse to a thriving industrial conglomerate is a testament to the company’s resilience, innovation, and strategic vision. With a strong leadership team, a solid financial foundation, and a clear growth strategy, Vestum is well-positioned to continue its upward trajectory and deliver value to shareholders for years to come. Infrastructure-sektorn har blomstrat, med en nästan tredubbling av omsättningen jämfört med vatten-sektorn, som har en pro forma-omsättning på en miljard. Trots den höga skuldsättningen ser Vestum potential i sitt fria kassaflöde på cirka 380 miljoner kronor, vilket kan finansiera en vinsttillväxt på 65 miljoner kronor per år. Detta skulle kräva förvärv till lägre multiplar än vad bolaget betalade för PDAS.

Vestum värderas med en viss rabatt jämfört med andra förvärvsbolag som har större inslag av tjänster eller byggexponering. Bolaget ligger i en grupp av bolag som förväntas ha sjunkande vinster mellan 2023-2024, inklusive Volati och Fasadgruppen.

I en jämförelsestabel kan man se att Vestum har en kurs-utveckling på 229,8% under ett år, med en EV/Sales på 1,1 och en rörelsemarginal på 11,1% år 2025. Jämfört med andra bolag som Bergman & Beving, Fasadgruppen, Green Landscaping, Netel, Norva24, Sdiptech, och Volati, ligger Vestum relativt sett bra till.

I vårt huvudscenario för Vestum antar vi en vändning från en negativ tillväxt på 7% i år till en organisk tillväxt på 4% år 2025 och 7% år 2026 när de mer sencykliska bolagen återhämtar sig. Vi förutser en omsättning på 6,1 miljarder år 2026, i linje med konsensus. Vi förväntar oss även att nettoskulden minskar med ökad kassagenerering.

Vår modell antar att marginalen ökar till 10,5% år 2026, medan konsensusprognosen pekar på en ännu högre lönsamhet på 11,7% år 2026. Vi använder en EV/Ebita på 10,5x och motsvarande P/E på 14 i vår värdering. Enligt vårt huvudscenario finns en uppsida på cirka 20%.

Det finns även ett intressant optimistiskt scenario där Vestum återställer marginalen till nivån år 2022, genomför förvärv som marknaden uppskattar, och aktien får en högre multipel. Detta skulle kunna innebära en dubbling av aktiekursen. Insiders har inte sålt några aktier trots kursrallyt det senaste året.

Även om det finns potential i det optimistiska scenariot, är vi försiktiga och inser att det finns risker kvarstår. Ett par svaga kvartal behöver vändas, skuldsättningen är hög, och det är oklart hur expansionsmöjligheterna ser ut inom Water-segmentet. Med det dramatiska vinsttappet och den smala verksamheten kan Vestum möta utmaningar framöver. The world of finance is a complex and ever-changing landscape, where billions of dollars are won and lost every day. From Wall Street to Main Street, the decisions made by financial institutions and investors can have far-reaching implications for the global economy.

One of the most powerful players in this high-stakes game is the Federal Reserve, the central bank of the United States. Established in 1913, the Fed is responsible for setting monetary policy, regulating banks, and maintaining the stability of the financial system. Its decisions can influence interest rates, inflation, and employment levels, affecting the lives of millions of people.

But how does the Federal Reserve actually work, and what factors influence its decision-making process? To understand this, we must first delve into the history and structure of the Fed.

The Federal Reserve is composed of 12 regional banks located throughout the country, with the Board of Governors in Washington, D.C. overseeing their operations. Each regional bank is responsible for regulating banks in its district, conducting research on economic conditions, and implementing monetary policy.

At the helm of the Federal Reserve is the Federal Open Market Committee (FOMC), which is responsible for setting the target range for the federal funds rate. This rate influences the interest rates that banks charge each other for overnight loans, which in turn affects borrowing costs for consumers and businesses.

The FOMC meets eight times a year to assess economic conditions and determine whether to raise, lower, or maintain the federal funds rate. Its decisions are based on a variety of factors, including inflation, unemployment, and economic growth.

In recent years, the Federal Reserve has come under increased scrutiny for its role in responding to the COVID-19 pandemic. As the virus spread rapidly around the world, governments imposed lockdowns and restrictions that caused a sharp economic downturn. In response, the Fed took unprecedented actions to support the economy, including cutting interest rates to near zero and purchasing trillions of dollars in government bonds.

These measures helped to stabilize financial markets and prevent a deeper recession, but they also raised concerns about the long-term impact on inflation and financial stability. As the economy begins to recover, the Federal Reserve faces the challenge of unwinding its stimulus measures without causing a sharp increase in inflation or destabilizing the financial system.

The Federal Reserve’s actions have far-reaching implications for the global economy, as its decisions can influence the value of the U.S. dollar, the price of commodities, and the stability of financial markets. Investors around the world closely watch the Fed’s statements and economic data releases for clues about future policy actions.

In conclusion, the Federal Reserve plays a crucial role in shaping the global economy, with its decisions impacting millions of people around the world. As the central bank of the United States, the Fed must navigate a complex and ever-changing financial landscape to promote economic growth and stability. Its actions are closely watched by investors, policymakers, and the public, as they can have far-reaching implications for the future of the global economy.

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