In this equity report, analyst Olle Göransson assess Mr Green & Co. The company is valued at a 30 % discount compared to the peer-average. Mr Green has turned weak margins by a more efficient marketing strategy and is expected to grow 20 % organically 2018. Furthermore, the analyst narrate how exposed Mr Green is to the upcoming Swedish regulation, as well as how the new acquisition strategy will contribute to better margins. This report is written in English. If you want to get in touch with the analysts, please send an email to analysgruppen@linclund.com. Please click here or on the picture in order to access the full report.

Growth of 30 % is expected to be maintained while EBITDA margin increases from 16 % 2017 to 18% in 2018E. Mr Green was between 2014 and 2016 struggling with a negative trend regarding both revenue growth and EBITDA margin. The trend was reversed in 2017 due to a more efficient marketing strategy when the company reached an EBITDA margin of 16 %, compared to 10 % in 2016, and is expected to increase to 18 % in 2018E. This is primarily due to a more efficient marketing strategy.

Recent acquisition and Net Debt/EBITDA of -3.22x in an industry that is undergoing consolidation. Increased regulations and squeezed margins forces the industry to face consolidation, which gives a positive outlook for Mr Greens recently introduced acquisition strategy. The Company acquired Evoke Gaming for 7 MEUR in February, at EV/S 0.68x. This shows that Mr Green’s acquisition strategy is on track and expects to deliver short-term sales growth and positive EBITDA from 2019. Furthermore, Mr Green has a strong net cash that opens for more acquisitions in the future.

DCF indicates 72.5 SEK, which corresponds to a 44 % appreciation potential. This is forecasted to be driven primarily by further revenue growth, both organically and through acquisitions. The margins is expected to improve due to economies of scale, as well as a more efficient marketing strategy.

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