A new company is listing in our western neighbor.
EBIT (2021) H1 was 13.7%, revenue is growing all the time. Exit of the main owners.
Prospectus in English and Swedish here: https://www.nordnet.fi/fi/kampanjat/listautumisannit/synsam/synsam-listautumisanti
Has anyone had a chance to look into this more closely? I’m very interested myself, because I just switched to Synsam as a customer - I got my glasses effortlessly “as a service”, i.e. with a monthly fee, and the contract always includes new lenses if my vision changes, I can change one frame once a year + insurance against breakage/loss. The customer experience has been excellent so far.
This video really boosted my confidence; customer-centricity is extremely important in this kind of business. As @Makkominister shared from their experience 
Everyone has misunderstood SaaSh (Spectacles as a Service) 
But yeah. The industry doesn’t really spark my interest. There’s plenty of competition, which will surely keep margins under pressure. All SaaSes can, of course, be marketed to wealthy clients, but competitors will surely launch their own services if it gains traction.
Were there sales figures for a longer period, by the way? Numbers from only the past couple of years seem useless.
Valuation 741 million, EBITDA around 100 million. And I have contributed over €3000 to that company in the last 3 years. I subscribed for 1000 shares.
https://www.reuters.com/breakingviews/nordic-optical-ipos-fortune-is-tied-essilux-2021-10-20/
Other companies in the sector have a P/E ratio of 20-60, Synsam has a P/E ratio of 9
“Give a few concrete examples of companies in the same industry with a P/E of 20-60.”
For example, the competitor mentioned in the article, Grandvision
The glasses manufacturer’s P/E, on the other hand, is 55
Grandvision is being delisted from the stock exchange, and it’s a very successful international company. Therefore, a premium is included in the takeover bid.
EssilorLuxottica is not comparable in any way.
That said, Synsam’s valuation seems reasonable.
Highly competitive industry in the Nordics.
Essilor manufactures a large proportion of the world’s frames and lenses, and as of July 1, 2021, it has been part of the same organization as GrandVision (Instrumentarium and Nissen in Finland - expensive and affordable glasses).
Synsam certainly has some in-house production, but most of its glasses come from Essilor or are manufactured by them.
Here are the stores owned by GrandVision from the listing prospectus:
My own question and suspicion is: Can Essilor, if it wishes, ask for a different price for products going to Synsam than for products going to GrandVision stores within the same organization? And thus, of course, hinder Synsam’s growth and increase in market share?
This is purely my own musing out loud, and it is very possible that Essilor/GrandVision keeps these businesses completely separate, and such a scenario would not even be possible.
In other Nordic countries, Synsam has a larger market share and has gained market share more rapidly compared to GrandVision’s stores. Finland is, however, still the smallest market for Synsam, but in addition to Sweden, it is the only country where sales grew by 19-20:
With the same P/E, it was traded long before the takeover bid. And I was talking about companies in the same industry; EssilorLuxottica is in the same industry. Whether it’s comparable or not is a matter of opinion; in my opinion, it partially is, even if it’s not a direct competitor.
Essilor, of course, is a company in a completely different industry than Synsam, and Essilor’s high multiples are reasonable. Sales ≠oligopolistic manufacturing.
Something striking was that Synsam doesn’t have a common system - for example, if an item isn’t found in one store, they can’t see if it’s available at a neighboring Synsam. I personally called optician stores on Friday looking for an eye doctor’s appointment; they didn’t even know in Tampere which day of the week the doctor was at the neighboring Synsam.
On the other hand, the customer service was an absolute plus. They told me places where I should ask for an appointment. They even checked if Mehiläinen had an open slot on the same day.
Looking back, it just occurred to me, why aren’t the chain’s systems integrated? That would be a definite help in directing a customer to the next Synsam where they could find, for example, frames x, which we don’t have 
I don’t have read access behind the headline, but it seems to have been oversubscribed quickly.
Are there any other sources for this?
In Sweden, their stores are in really good locations in several cities and look good, which I’ve noticed over the years – a completely different level than Specsavers, for example, which mainly competes on price, which isn’t a significant factor for most people.
That monthly payment has also been heavily marketed in Sweden; it’s almost unique in the industry. Cash flow runs continuously year after year, versus a normal store where glasses are changed every two or three years.
It’s an interesting concept, and I’m in if they give shares to Finns.
Another observation: my son wears glasses, and since he’s 5, we quite often take them to the optician’s to get them straightened (because they won’t replace them if I try to fix them myself, I’ve tried, I can’t).
Nissen’s shop is open from 9:30 AM to 5 PM, not on weekends. Synsam’s shop is always open, even on Sundays, and on weekdays, maybe until 8 PM?
Today, I had to take the morning off work so we could get the glasses bought from Nissen repaired a couple of weeks after they broke. My son has glasses from Specsavers, Nissen, Synsam, and Instrumentarium, all in varying use. In the future, I will only and exclusively go to Synsam, purely because of the quality (and availability) of their service, and by far the best selection.
As an addition, whenever we go to other shops to get glasses repaired, I usually have to check that they fit well, and point out that they are crooked, and then they fix them again with a frown. At Synsam, the sales assistants make sure they fit perfectly and keep adjusting until they are satisfied themselves.
PE 9? Doesn’t that make a loss: 200-300 MSEK per year for the last three years?
Now you’re ignoring that, for example, in 2020, interest expenses amounted to over 330 mSEK for shareholder loans. These will be converted to equity upon listing.
This is a very common pattern in a private equity-owned company. The Luxembourgish parent company doesn’t want profits to be paid as taxes to Sweden, so the earnings are siphoned off into the owner’s income statement using shareholder loans. In these cases, it’s better to look at EBIT (Earnings Before Interest and Taxes) or adjust for shareholder loan interest to avoid distorting the results.
