Global automation trends act in Troax’s favor. Automation in the manufacturing industry has increased the industrial robot-per-employee ratio. This trend will most likeley increase the demand for Troax’s products and offer a continued market growth. Troax currently holds 15% of the global market share.

Troax can expect an organic revenue growth of 9% 2019-2023. Troax is the market leader with the highest revenue and largest market share in their industry. Together with an in-general strong market growth, a well established brand and a bigger sales force, Troax is expected to increase its market share and grow with a CAGR of approximately 9% to 2023. This gives Troax a global market share of 17,5% by 2023.

In a market with an average EBIT-margin of 10%, Troax stands out with their 20% EBIT-margin. Troax local production plants reduce shipping costs. With multiple orders and bigger production plants, Troax can benefit from economies of scale unlike most of their competitors. With an estimated EBIT-margin of 10% amongst Troax’s competitors. Troax’s 20% EBIT-margin displays Troax’s ability to continue a strong growth whilst maintaining high margins.

The DCF model indicates a moderate upside of 1,9% in share price.  In a base case scenario the discounted cash flow model has projected a share price of 320 SEK, indicating an upside of 1,9%. In a bull case scenario the projected share price is 370 SEK, with an upside of 17,8% and in a bear case scenario the projected share price is 238 SEK signaling a downside of 24,2% in share price.

Analysts: Carl-Fredrik Gärtner & Sebastian Bechmann

Troax.190318.vF