(News Bulletin 247) – The leisure vehicle specialist published annual results above expectations, improving its margins despite the impact of dilutive acquisitions. The company expects “good progress” in its activity for the financial year which has just begun.

Trigano has successfully negotiated the shift in publishing its results for the 2023-2024 financial year. The leisure vehicle specialist delivered a copy praised by analysts on Tuesday evening after the market closed. The stock advanced 1.3% around 12:05 p.m. on the Paris Stock Exchange, after having gained nearly 4% at the start of the session.

Portzamparc evokes “a publication of very high quality” and a “positive” speech from management.

Already published, the group’s turnover for the entire 2022-2023 financial year, completed at the end of August, increased by 9.5% with growth of 12.1% in the main division, namely sales of recreational vehicles.

“Demand has been growing for 20 years for leisure vehicles throughout Europe and Covid has been an accelerator of this trend. The camper van gives the opportunity to enjoy your leisure time with complete peace of mind, it was a health bubble during Covid”, explained this Wednesday on BFM Business Stéphane Gigou, the chairman of the board of Trigano.

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Record profitability

The market was therefore waiting for the actual results. Trigano’s current operating profit amounted to 423.4 million euros, up 23.7% year-on-year. A figure described as “robust” by Berenberg who notes that the consensus was only 400.5 million euros. The corresponding margin stands at 12.2%. This profitability equals Trigano’s previous record and is “driven by a record margin of 12.7% for motorhomes, despite the dilutive impact of recently acquired distribution activities”, notes Berenberg.

“This performance was made possible by the accuracy of the policy of adapting sales prices practiced last year and at the start of the financial year, as well as by the control of the evolution of production costs and overheads” , explains Trigano for his part.

Portzamparc estimates that this profitability reflects “a clear increase in the gross margin (34.2%, up 2.3 percentage points) which reflects price effects and, in our opinion, a beginning of relaxation in the group’s purchasing conditions notably steel, wood and certain composites”, as well as “an optimized opex structure (operational expenses, editor’s note) with in particular the improvement of the productivity of the sites under the improvement” of the supply chain “.

Net profit increased by 10.8% to 208.3 million euros.

Cheap value

Potzamparc points to a single, small downside: cash generation, with a cash flow from operational activities of 201.7 million euros where the design office expected more than 400 million euros. This is explained by an increase in the need for working capital itself driven by higher stocks, representing 2.8 months of activity compared to 2.2 months on average over the last five years, develops the financial intermediary . According to Portzamparc, management has put in place a plan to liquidate two-thirds of these “overstocks” during the first half of the 2023-2024 financial year.

Regarding its prospects, Trigano explains that “the results of the autumn shows and fairs have confirmed the keen interest of consumers in the acquisition of Trigano motorhomes, with an increase in sales to non-renewing customers”.

“The new ranges of products repositioned and introduced for the 2023-2024 season have largely contributed to this result. The high level of order books, and the confirmation of the clear improvement in the delivery of rolling bases from all suppliers make it possible to envisage good growth in activity in 2023-2024″, continues the company.

In light of these comments, Portzamparc increased its volume growth forecast for the current financial year, from +6.7% to +11.1%, while retaining in its model a negative price impact of 1 %.

Berenberg, for its part, anticipates like-for-like growth for the company of 7% over the 2023-2024 financial year and notes that the value trades at 8.1 times the expected profit for the current financial year and 4 .8 times gross operating income.

Multiples which, according to the German bank, lack generosity. “Despite the market’s understandable concerns about the prospects for a relatively expensive discretionary consumer product (camper van, editor’s note), this valuation seems too cheap, particularly given the strength of the balance sheet (net cash of 195 million euros) and the potential for accretive mergers and acquisitions, including the static house activity of Bénéteau (BIO Habitat), which is currently awaiting competition authorization, expected by the end of the first half of the year”, develops Berenberg.