Tag Archives: Moat

12 Ways how the “Ideal Company” should be run



Some years ago I introduced a 27 point  “beta version” of an investment check list. This check list contained a lot of quantitative aspects, such as P/E, P/B or other multiples as well as some qualitative aspects. I used this as a rough guideline for analyzing potential long-term holdings but I found out that the quantitative aspects in a check list are not very helpful, because it leads to discarding really well run companies at a very early stage.

On the qualitative side however some things were missing, especially how a company is run for me became more and more important over the past years.

I think this aspect is not well covered by many other investors as most concentrate (only) on the “what”:

  • What moat does a company have ?
  • What industry  are they in ?
  • What ROE/ROIC/EBIT Margin does the company generate ?
  • At what EPS/EBIT/Book multiples does the stock trade ?
  • What is the “Magic Formula” that generates Alpha without actually looking into the companies I invest

For me the “what” in many cases is actually only a secondary result of the “how”. Moats for instance are not created out of thin air.

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AQ Group (ISIN SE0000772956) – a 15 year “42- bagger” without a Moat ?

Would you consider to invest into a company which at every occasion states the following:

AQ possesses no amazing patents or other security, we rely on having the best crew.

For a “Buffett/Munger” style value investor, this would be tough as there is clearly no moat or anything close and according to Buffett, the business economics always win in the long run, no matter how well a company is run.

Welcome to AQ Group, a Swedish “non moat” manufacturing company



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EVS Broadcast Equipment (BE0003820371) – A super profitable market leader at a bargain price ?

The company:

EVS Broadcast Equipment SA is a Belgian company developing and selling state-o-the art equipment mostly to broadcasters and TV production companies, enabling them to store, edit and broadcast live camera images on a fully digitalised basis. They are especially strong in the area of live sporting events.

Growth and profitability

Looking at the current valuation multiples:

P/E (2013) 13,0
EV/EBIT 14,0
P/B 5,2
Dividend yield 7,0%

we can see that EVS is not super cheap. However if we look at past profitability and growth numbers numbers, we can see that EVS is still “super profitable” at levels which only can be explained by significant competitive advantages:

5 y avg 10 y avg
Profit Margin 30,8% 36,5%
ROE 55,2% 63,5%
Sales growth 3,30% 12,70%
EPS growth -5,40% 22,30%

However, if one looks at the growth figures we can clearly see that the “High growth” phase seems to be clearly over, but they are still incredibly profitable.

Why are they so profitable?

This is a quote from the 1999 annual report (which is by the way a very good report):

The EVS Group sells its equipment to radio and television channels as well as to people providing services to these channels. This is a professional market where quality and technical performance of the equipment is often more important than its price.

Plus another quote from the 2002 annual report:


Production of the equipment manufatured and marketed by ECS and NETIA does not require important tangible investment. Nor does R&D require any considerable investments, since engineers and programmers work directly on the machines to be sold or on PC type equipment for the sftware developement.”

So building “mission critical” equiment with low price sensitivity combined with low to no physical capital needs sounds like a pretty good business case. But how do you get into such a desirable position ?

Again, the best explanation is given in the 1999 annual report:

In 1994, most recorders used by television channels were tape recorders, although hard disks already had replaced tapes for recording purposes in the
computer area. Three factors have since then influenced the use of hard disks rather than tapes for professional video recording :
• the increased capacity and higher performance of hard disks,
• their lower cost,
• considerable progress has also been made in compression : for example, the JPEG system allows an average compression ratio as low as 5:1 in the memory space required to record a picture.

EVS strategy on the huge professional recorder market has been to pinpoint those applications for which hard disks would offer the user a substantial competitive advantage over tapes. By the end of 1996, the number of professional recorders installed throughout the world was estimated at about 352 000 units, for 60 000 users.
Among these, tape recorders accounted for about 340 000 units, compared to 12 000 disk recorders.

So what EVS did in the mid/late 90ties was a classical “disruption”: At that time, most broadcasts were recorded on physical tapes which had a lot of disadvantages. In sports for instance if you wanted to show a replay, the recording had to be stopped, rewinded and replayed. In between, no recording could be done,so often the consequent action on the field was unrecorded. EVS as one of the first companies offered a digital solution, which allowed continuous recording and easy access to slow motion etc.

The second boost came in the mid 2000s with the introduction of full HD and HDTV which sped up the change from tape to digital and required new generation of servers.

EVS became the defacto industry standard for most of the digitalised live TV production around the world, especially for sports. Somewhere I read that they claim a 95% market share in certain areas. With all the money pouring into professional sports these days, it still looks like a pretty good place to be a “niche market leader”.

Will EVS stay so profitable ?

This is a much harder question to answer compared to “why are they so profitable”. The question boils down to: Are the obvious competitive advantages sustainable ?

According to theory, two potential competitive advantages could e relevant for EVS: Size advantages and the network effect.

Network effect:

As far as I know, EVS did use mostly open source and industry standards, so in theory it should be relatively easy to replace EVS’s equipment. It seems however that the software implies a certain way to do things that doesn’t make it that easy to simply copy the stuff. EVS equipment seems to define work processes and many people in the field might prefer a known, working process to a new one even if its cheaper. The technicians are trained on the gear and might prefer this to any other gear. Nevertheless I would argue that there is no strong network effect at work here but maybe a “soft” one.

Size advantage

Although EVS is still a relatively small company, within its niche, it is huge. They had a big headstart into the current technology and have built up significant technical knowledge which is not easy to copy. Any small competitor who wants to compete with based on the same technology will have a big issue. Even if they would be able produce slightly better gear, they would still need to build up a sales and service organizition and spend a lot of money on getting access to all those potential clients. This would be different if a competitor would be coming into the market “vertically”, for instance guys like Sony who produce the cameras etc. but for some reason that didn’t happened. Maybe the niche overall is too small to justify a big investment by a “vertical” competitor.

For me, the biggest issue might be that once again the technology will change and allow another disruptor into the business. A small hint could be seen in a interesting research report from media technolgy research company Devoncroft (report is free but registration required).

For EVS, one of the most “dangerous” developments could be what is described on page 36: The move from specialised IT gear for real time processing to “generic” gear. EVS delivers “spezialised” gear and software. This is how a typical EVS “box” looks like:

I am not sure how solid their business would be if the “Boxes” were seperated from the software and this would clearly open the door for disruptors.

Limits to Armchair Investing

At this stage, there are clearly limits to Armchair Investing. With the time available for me, it is impossible to judge for me if EVS will be able to keep its high margins or not. If margins “normalize”, then the current price for the stock might be still high. If margins remain high and the market still grows then the stock would be a “high quality” bargain. However I do not feel comofrtable to make any judgement here.

Some other observations

– Founders sold down early, only one remaining (CTO)
In 1999, the three founders and their families owned around 57% of the company. Since then, 2 of the three left and the remaining one has reduced his ownership to ~6%. It seems that they were not fully convinced about the long term prospects of EVS.

– they are currently building crazy expensive heaquarters in Belgium.

Overall cost is expected to be around 60 mn EUR. This is from the 6 month report:

At the end of 2011, EVS started the construction of a new integrated building in the proximity of its current location in Liège, in order to gather all employees of EVS headquarters, split today in 6 different buildings. EUR 39.4 million have been invested by the end of June 2014 (less EUR 5.2 million of subsidies booked at the same date). The total budget for the project (including some higher investments in future-proof equipment) is estimated between EUR 55 and EUR 60 million.

EVS has in total 500 employees, with at least 1/3 outside Belgium. So spending ~200k EUR per employee for a new headquarter is absolutely insane in my opinion.

– current CEO is a “manager”, no ownership

The current CEO came from outside and has no stock ownership. He does have stock options and I have not seen a single share purchase of management ever.

– potential “diworsification”

The new strategy is to diversify “verticaly” into post production technology as the core sports area seems to be somehow saturated. EVS tried to diversify early on, but both attempts failed (digital radio, digital cinema). Maybe vertical diversification works better but if the high margins can be retained ?

– weak first half of 2014 indicates increasing pressure on margins

Normally, EVS always performs strongest in years with large sports events. 2014 with the Winter olympics in Sochi and the Football Worldcup in Brazil should have beenn a great year for them. However, despite rising sales, profit went actually down compared to the “non event year” 2013. 2015 with no events willbe even harder for them. So the trend clearly is negative at the

The stock price also shows that the market does not look that favourable at EVS’s prospects following the 6 month numbers:


EVS is an interesting company. As a clear niche market leader with fantastic historic profitability , it could be a great investment especially if the diversification strategy would work. On the other hand, there are several qualitative factors which i found distrubing, especially with rgeard to the new HQ and the lack of “ownership” within management and employees. On top of this, 2015 will be a tough year for them anyway so it might be the wrong time to invest in any case. So for me it is just a stock for the watch list with the next review in Q3 2015.

Thermador Groupe (ISIN FR000006111) – a true “hidden champion” from France ?

Back to my favourite hunting ground France, the country which, according to the “famous” Harvard professor Niall Fergusson, will burn this summer.

Thermador Groupe is (as many others) a result of my boss screener. The score is not super high but indicates that it might be a high quality company at an attractive price. So what are those guys doing ? According to Bloomberg the following:

Thermador Groupe wholesales plumbing supplies. The Company buys plumbing supplies primarily from manufacturers outside France and distributes them throughout France. Thermador distributes ball, butterfly, check, motor-operated and solenoid-operated valves, pneumatic actuators, central heating system components, plastic pipe, and domestic and small community pumps.

Doesn’t sound too exciting but that is usually a very good sign.

Valuation looks Ok, but not exciting:

Market cap: 247 mn EUR
P/E (2012) 11.7
P/B 1.9
P/S 1.2
Div. yield 5.4%

The company is debt free and showed 5.4 EUR net cash per share at year end 2012. So far so good, but why should this company be a “hidden champion” ?

A quick look at profitability over the last 11 years shows already, that those guys seem to do something right:

NI margin ROE ROE adj
31.12.2002 6.5% 12.7% 15.9%
31.12.2003 7.7% 15.4% 22.3%
31.12.2004 9.3% 18.4% 20.5%
30.12.2005 10.1% 19.5% 23.6%
29.12.2006 11.2% 22.6% 24.4%
31.12.2007 12.0% 24.5% 24.3%
31.12.2008 11.0% 22.2% 22.3%
31.12.2009 9.2% 15.9% 18.8%
31.12.2010 9.6% 15.8% 17.4%
30.12.2011 10.6% 17.8% 20.1%
31.12.2012 10.1% 17.0% 20.1%

High single digit margins and consistently ~20% return on investment implies that those guys know what they are doing.

But it gets even better. Despite good growth in those 11 years (sales doubled), the showed a very healthy free cashflow generation.


EPS FCF p. Share DIV
31.12.2002 1.66 1.09 1.51
31.12.2003 2.10 3.49 1.44
31.12.2004 2.70 1.40 1.44
30.12.2005 3.10 3.11 1.80
29.12.2006 3.96 0.94 2.06
31.12.2007 4.84 1.16 2.31
31.12.2008 4.96 2.27 2.61
31.12.2009 3.90 6.56 2.61
31.12.2010 3.99 0.97 2.61
30.12.2011 4.83 3.84 2.61
31.12.2012 4.98 4.25 3.05
Total 41.02 29.08 24.07

Around 75% of earnings have been converted into free cash flow and again, 90% of free cash flow has been paid out as dividends. Those are quite impressive numbers for a “traditional” business.

Business model

Again, the question here is: How do they do this ? On the surface, a wholeseller should not be able to make a net margin of 10%, so there must be a lot more to this story.

Thankfully, one doesn’t need to look around in the web to find out about them because they produce a fantastic annual report in English language.

If I understand correctly, the Thermador business model looks as following:

– they are basically the interface between a large number of manufacturers and DIY stores / local wholesale companies
– they are specializing on relatively complex pump systems where few if any manufacturers are able to produce the full range of components
– in effect they are a kind of “virtual” conglomerate which offers those system and guarantees availability of all relevant parts
– it looks like that they mainly source in Italy and China and then warehouse and distribute the systems in France
– according from their numbers, they buy stuff from around 200 producers and sell/distribute to up to 3000 customers per subsidiary

The last bullet is important: A “Normal” wholeseller, for instance in the food industry doesn’t have a lot of end clients. In such cases it is relatively easy to “cut out the middlemen”. For a wholeseller with a larger number of partners on each side, it is much easier to create value and extract higher margins.

Interestingly, they manage to do this (so far) by only 1 big distribution center in Southern France.

Uniqueness of the business models:

Despite having 8 subsidiaries which sometimes use the same providers and have the same clients, they are run completely independent. That is what they say in their annual report:

People sometimes ask us about the suitability of our organisation chart: why 8 subsidiaries with 8 management teams, 8 sales teams, 8 purchasing departments, 8 warehouses, etc. Wouldn’t we achieve economies of scale if they were aggregated? On the contrary, we think that the drawbacks this presents are more than counterbalanced by the efficiency inherent in small, specialised and highly motivated teams.

The 8 subsidiary directors do indeed have maximum freedom to develop their companies, and enjoy the support of the Group, which provides them with the financial, property and IT resources they need. They are very close to their markets, and have many years’ experience with the Group, with a sound knowledge of their businesses. Guillaume Robin looks to Marylène Boyer and Hervé Le Guillerm for day to day support in managing the Group. A more formal monthly meeting reviews cross-company issues and makes the decisions needed to ensure the Group works efficiently. Each week, the nine directors get together for lunch to talk about current topics. Twice a year, they spend a whole day off-site to discuss strategy and organisation. Finally, each January, fifty managers and supervisors from the Group get together for presentations of each subsidiary’s projects. The audience is then invited to ask the subsidiary directors about their visions, analyses, decisions and forecasts.

For anyone having “inside” experience in a large international company with a big HQ, this almost sounds too good to be true. Coincidently, I just read “The Outsiders” and I have to admit, that up until now I didn’t really think about organizational structures so much. But based on the book and my own “day job” experience, I believe that such a company without a big HQ has in itself a competitive advantage against competitors with a rigid hierarchies. Such companies are much faster and at the end of the day more efficient, because the big waste always happens at headquarters.

As a picture in the annual report shows, all the companies are located next to each other, however in different buildings.


What they seem to share (and what makes a lot of sense) is their IT system and of course the distribution center.

A few real “gems” from their annual report:

Since our teams are part of small companies, each person feels personally concerned: waste leads to an increase in costs and a drop in profits. We are therefore careful to turn out lights when we leave offices, close windows when the heating is on, recycle paper and to avoid heating (or cooling) excessively.

or this one:

Our travelling salespeople do not have “company” fuel cards. When they use their vehicle for professional travel, they are reimbursed on a per-kilometre basis. It is in their interest to drive economically. When they rent vehicles, they are limited to small cars which consume little fuel. Also, we ask all employees of the Group to live within 50 km of our head office.

Other positive facts:

– Management owns shares, management salaries are reasonable
– organic growth, no acquisitions
– clear structure, no minorities
– conservative discount rate for pensions (3%, below official guidance)
– all real estate owned, no signifcant leases

Profit sharing with employees

Again from the great annual report:

Variable component:
Since the beginning, Thermador Groupe subsidiaries’ profits have been shared with employees. Even before statutory profit sharing, we introduced our own brand of profit sharing in Thermador, the first company created in the Group’s history. This virtuous practice spread to the other subsidiaries subsequently. Profit sharing is the result of a year’s work, during which the management teams present the operating accounts of each subsidiary on a monthly basis. Everybody can understand how the annual result is put together, and what mass of profit sharing will be distributed. The distribution of that mass is decided by the management team, and takes into account each individual’s performance as fairly as possible.

In each subsidiary, the profit sharing amount therefore depends on profit, which means there are major differences between the companies of the
Group. It varies from 12 to 27 % of salary. The average for the Group is 22% of gross annual salary.

Again, this is something I have never read in such a clear and precise way in an annual report.

Funnily enough, a lot of this sounds exactly like in the Les Schwab autobiography I have reviewed a few days ago. Who would have thought that something like this can be found in “socialist” France ?

Stock price & valuation

The stock price is still far away from the highs in 2007:

From a valuation perspective, I don’t want to be too sophisticated. This is not a super cheap stock but a very high quality stock. Would this be a UK or US stock, it would trade at least at 8-10 EV/EBITDA. As this is a French stock, one should not expect a lot of “action”. Nevertheless I find it attractive at current levels as I am convinced that they will find ways to grow their business in the future.


Clearly, the economic situation in France is the biggest risk. Thermador started to expand interenationally. In their own style, they created of course a seperate entity for this. We will see if the business model works internationally as well. The unit Thermador International founded in 2007, grows quite quickly, but has yet to achieve the profitanility of the other subsidiaries.

Additionally, any consolidation, either on the manufacturer or client level might make Thermador’s business more difficult.

Finally, some very clever B2B internet company could try to compete with Thermador. However, I think Thermador is much more than matching producer and clients. There is a lot of distribution know how and facilities involved plus guaranteeing services and spare parts within a short time frame. But clearly, this is something to watch out for.


Thermador is in my opinion a true “hidden champion”. For me the reason why this company trades below its “true” value is the uniqueness of its business model combined with they way the company is run and organized. Together, this is what I would call a “Les Schwab moat”, the power of a highly motivated company in a competitive market.

Clearly, the current situation in France doesn’t make things easier for Thermador. Nevertheless I entered into a 2.5% portfolio position at EUR 58.20 per share. As this would bring my net France exposure above 20%, I sold out the Bouygues stock as a risk management measure.

Nintendo Co. – from “Moat Superstar” to Net-Net ?

There was an interesting article in Business Week about Nintendo, which is expected to book its first lost since a long long time.

One of the quotes were:

It’s hard to say whether Nintendo can regain its footing, says Melissa Otto, director of active equity at TIAA-CREF, the manager of retirement accounts for employees of nonprofit institutions. The company’s stock has fallen so far—shares reached a 52-week low on Jan. 27—that it’s approaching the company’s cash value, she says. “They have a fantastic track record,” Otto says. “They have a wonderful brand. But the question is: Does the consumer care now?”

A quick look into the balance sheet shows:

The company currently trades close to book value (P/B 1.2). Net current assets are only slightly lower, no goodwill, no financial debt.

Cash and marketable securities were around 6000 Yen per share per end of year 2011. There seems to have been a certain cash burn in the first 9 months of FY 2011, this is somthing to watch. However this could also be an FX conversion effect if the cash was held for instance in EUR.

Interestingly for the 9 Month 2011, tha largest part of the announced losses were currency losses.

The stock chart in YEN looks quite bad, we are back at 1989 levels:


The shares shares are widely held, no dominating shareholder. 10% are treasury shares. I wonder wether this would be a nice target for some shareholder activism….

Analyst sentiment is bad (which is good).

For the time being, I have no idea how to value Nintendo, but it is definitely something to watch. The “Intangible” value of the game franchises (Mario, Pokemon etc.) could be huge, however there are many well known headwinds like Mobile phone games etc.

If Nintendo again manages to reinvent itself like they did with the WII, then the upside could be huge. If they fail, at least they will not go bankrupt any time soon.

In any case, Nintendo is an interesting example how a “Moat” or “Gillette Razorblade” business model can dissappear through technological change pretty quickly, at least in the consumer electronics area. So watch out Apple.

Piquadro SpA – Competitors, market analysis and strategies

Normally it is quite difficult for a private investor to get hold of comprehensive market information. One could try to google and try to collect some articles, but “hard data” is usually only available if you pay.

However, many listed companies include some market and competitor info in their analyst presentations. Piquadro provides us with a nice graphic of competitors in its 2011 April Analyst presentation:

Interestingly, in it’s own presentation one can see that the “Premium / Performance” segment is also the most crowded one.

An even better source for market data are IPO filings. In an IPO prospectus, companies usually provide a lot more information than in annual reports, as they have to persuade new investors that this is a exciting market.

Luckily, competitor Samsonite actually was IPOed last year on the Hongkong stock exhange after filing bancruptcy in 2009 (and also in 2002 if I remember correctly). The Samsonite story also shows the biggest risk for those companies: Overexpansion and too much lease liabilites, in this case driven by a Private Equity owner.

Tumi, currently owned by PE firm Doughty Hanson is currently on the path to an IPO and has already filed its documents for an IPO. To make things more interesting, Samsonite already anounced its interest purchasing TUMI.

So we have to additional sources for market information in this case.

For Mandarina Duck, the other major competitor from the Piquadro Matrix, currently no financial information is available. It seems to be owned by a PE shop as well.

Let’s start with the “Competitor” section of the TUMI IPO prospectus:


We have a variety of competitors in the categories and geographic regions in which we operate. We believe that all of our products are in similar positions with respect to the number of competitors they face and the level of competition within each product category. Depending on the product category involved, we compete on the basis of a combination of design, quality, function, price point, distribution and brand positioning.

Our biggest global competitor in the travel goods category is Rimowa, a German company. We also compete with Samsonite in Europe, the Middle East, Africa and Asia-Pacific. In the premium luggage and business cases category, we compete with Bally, Dunhill, Ferragamo, Gucci, Louis Vuitton, Montblanc, Porsche and Prada. In the business case category, we also compete with smaller brands in specific markets. In the U.S., our main competitors are Victorinox and Briggs and Riley. In Europe, the Middle East and Africa, our key competitors are Mandarina Duck and Piquadro. In the Asia-Pacific region, competition is fragmented. In Japan, our two key competitors are Porter and Ace Brand. We also compete with Coach across the luggage, business cases and accessories categories.

We believe that our primary competitive advantages are favorable consumer recognition of our brand amongst our targeted demographic, consumer loyalty, product development expertise and widespread presence in premium venues through our multi-channel distribution. We may face new competitors and increased competition from existing competitors as we expand into new markets and increase our presence in existing markets.

So again, we do not see any “hard” moats but rather some fuzzy brand recognition and customer loyalty aspects.

Even more interesting is the very detailed IPO prospectus of Samsonite. This is a “treasue trove” of interesting market data.

The “1 million dollar quote” however can be found at page 95:

Barriers to Entry and Benefits of Scale and Leadership in the Luggage Market
Barriers to entry into the luggage market are generally low, which has contributed to the fragmented nature of the industry. Key challenges for an entrant or an existing company are investment in brand awarness, innovation in new products, access to quality producers, and developement of an effective national / local retail network.

So here the “market leader” tells us there are no barriers to entry. So no “moats”. Period.

The Industry overview section of the filing is really interesting and comprehensive (p-90).

The market itself is supposed to grow at quite an attractive overall rate:

Samsonite itself does not yet realise Piquadro as competitor, neither Mandarina Duck. Piquadro and Mandarina Duck are only mentioned among others which are shown having a combined market share of 74.5%.

Howver, Samsonite places itself directly into the “Premium” category in contrast to Piquadro and Tumi themselves:

Side remark: Anyone who had the problem at an Airport baggage claim to find out which of the 25 identical black Samsonites is the own bag knows that this is more “mass market” than anything else.

The luggage market according to Samsonite can be segmented into 3 product segments:

Samsonite also has an interesting “market share” slide for Europe which shows the high fragmentation:

So the big question is now: Should I stop now with analysing Piquadro because there is definitely no “objective” moat ? I would say, no, because for some reason, Piquadro has been able to grow, maintain high margins and produce free cashflow. When we continue to evaluate the company we should however incorporate a certain “normalisation” of returns anad margins.

Also the whole market segment seems to be quite attractive as even in “good old Europe” some nice growth is expected in the coming years as indicated before which can be incorporated int he valueation to a certain extent..


Tumi has a very interesting passage in its IPO filing regarding marketing:

We do not employ traditional advertising channels, and if we fail to adequately market our brand through product introductions and other means of promotion, our business could be adversely affected.
In 2010, we spent approximately 3% of our net sales on advertising and promotion expenses. Our marketing strategy depends on our ability to promote our brand’s message by using store window campaigns, product placements in editorial sections, social media to promote new product introductions in a cost effective manner and the use of catalog mailings. We do not employ traditional advertising channels such as newspapers, magazines, billboards, television and radio. If our marketing efforts are not successful at attracting new consumers and increasing purchasing frequency by our existing consumers, there may be no cost-effective marketing channels available to us for the promotion of our brand. If we increase our spending on advertising, or initiate spending on traditional advertising, our expenses will rise, and our advertising efforts may not be successful. In addition, if we are unable to successfully and cost-effectively employ advertising channels to promote our brand to new consumers and new markets, our growth strategy may be adversely affected.

Interestingly, the “Market leader” Samsonite spent almost 9% of revenues on marketing in 2010(see IPO fact sheet), Piquadro around 5%.

Samsonite focuses basically to almost 100% on the wholesale sales channel, Tumi has reached a 50/50 split between wholesale and single brand stores.

Very interisting is the fact, that Piquadro just hired a seasoned TUMI executive for international brand expansion.

Peer Group comparison

Let’s just make a quick comparison with regard to profitability. As one could expect for PE owned companies, both TUMI and Samsonite show quite a messy capital structure and “real profits” don’t really exist. So let’s work with what they call “adjusted” EBITDA (Samsonite & Tumi in USD, Pqiadro in EUR):

Samsonite TUMI Piquadro
Sales 1,215.0 252.8 61.8
Total assets 1,665.0 321.0 29.6
NWC 372.0 80.2 16.1
EBITDA adj 191.9 40.6 16.4
EBITDA/Sales 15.8% 16.1% 26.5%
EBITDA/Assets 11.5% 12.6% 55.4%
NWC/Sales 30.6% 31.7% 26.1%

This is really interesting. Piquadro is the most efficient and most profitable company of this “Peer group” based on “simple” metrics.

Summary: A quick view into the market and competitors show the following:
– the market is quite fragmented, no real barriers to entry exist and therefore no “classical” moats
– nevertheless all companies seem to be able to generate at least currently some decent returns on assets
– Picadro itself seems to be the most efficient of the 3 companies. It is therefore likely that no strong “economies of scale” exist in this market

I will follow up with a valuation approach in the next days.