Today I shared this French Microcap (€166M market cap) that designs and builds luxury catamarans. I found out about it because two funds I follow—Independence AM and Amiral Gestion—have positions in it, which seems like a good sign.
Financial Overview
The company’s revenue has grown every year (except for 2009 and 2020). From 2018 to 2024, it saw a 17% CAGR in growth, with a stable EBITDA margin of 13%–15% and an EPS growth of 20% CAGR.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|
| Revenue MM | 136,81 | 207,11 | 172,87 | 202,31 | 219,86 | 276,82 | 351,30 |
| EBITDA | 21,66 | 26,93 | 27,41 | 32,70 | 34,19 | 42,49 | 67,00 |
| EBITDA Margin % | 15% | 13% | 15,8% | 16% | 15,5% | 15,3% | 19% |
| 6,66 | 8,41 | 4.86 | 10.06 | 9.79 | 6,89 | 20,10 |
Of course, this kind of luxury product is cyclical and requires consistent CAPEX investment, with an average Sales/CAPEX ratio of around 5%. On top of that, the company can generate free cash flow every year.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|
| Free Cash Flow | 27.92 | 15.19 | 13.05 | 51.25 | 46.36 | 19.11 | -9.69 |
In 2024, FCF was impacted by increased working capital investments to prepare for next year’s order book.
Regarding debt, the company consistently holds a strong cash position (exceeding its market cap) and keep a low level of debt.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|
| Net Debt / EBITDA | 0.13x | -0.17x | -0.97x | -2.17x | -3.11x | -2.83x | -1.54x |
The company pays dividends almost every year, usually between 1%–2%, and do a small amount of buybacks. The issue with the buybacks is the low number of outstanding shares and the lack of liquidity.
So, the company has a history of growth, has a lot of cash in balance (even more than its market cap), avoids dilution, does buybacks, and pays dividends… but why is it still so cheap?
I think several things comes together: Europe microcap, low liquidity and expected drop in sales for next two years due to high post-covid sales.
Next years
The company expect a slowdown of this sales for the next years and it can be inferred due to they highly investment on working capital this year (this going to help FCF next year). The company doesn’t give any guidance butd the analyst expect (17%) 2025E – (6%) 2026E.
But to help to improve the efficiency and partially offset the expected drop sales, the company announce a plan in they last communication:
The new 2028 plan is based on the following major pillars:
- Product innovation, with the launch of 11 new models: 6 catamarans and 5 monohulls;
- Enhanced customer service, aimed at improving the experience and satisfaction;
- A capacity investment and modernization plan, with a total budget of nearly €19 million over four years;
- Human capital development, through skills enhancement, talent retention, and continuous improvement of working conditions;
- Environmental commitment, by continuing technical innovations and implementing a zero-carbon trajectory.
Let’s talk about valuation
Comparable companies valuation:
| Company | NTM EV/EBITDA | NTM MC/FCF | NTM P/E |
|---|---|---|---|
| San Lorenzo SpA | 6.37x | 18.41x | 10.90x |
| Beneteau SA | 8.29x | 11.27x | 16.19x |
| SA Catana Group | 5.15x | 8.92x | 9.26x |
| Fountaine Pajot | 1.66x | 46.11x | 7.90x |
SA Catana Group is the closest as it focuses on catamarans and has similar ROE, ROIC, and ROA. Plus, it’s also a French microcap.
| ROE | ROIC | ROA | |
|---|---|---|---|
| SA Catana Group | 32% | 26,4% | 10,9% |
| Fountaine Pajot | 35,2% | 34,3% | 10,6% |
For this reason, I think Fountaine Pajot’s valuation is ridiculous.
Now, back to valuation—I’d still be very conservative, expecting:
- 2025-2026: I will use analysts’ estimates of a -10% CAGR revenue and then back to 3% Growth (average catamaran market expected)
- FCF should improve as the company starts benefiting from positive working capital and customer payments (as it always has).
| 2025 | 2026 | 2027 | 2028 | 2029 | |
|---|---|---|---|---|---|
| Revenue (M) | 289 | 262 | 270 | 278 | 286 |
| EBIT Margin % | 15% | 15% | 15% | 15% | 15% |
| EBITDA (M) | 44,4 | 42,1 | 43,4 | 4,7 | 46 |
| Net Income (M) | 18 | 16 | 17 | 17 | 18 |
| FCF (M) | 22 | 20 | 21 | 21 | 22 |
| Shares Outstading (M) | 1,6 | 1,6 | 1,6 | 1,6 | 1,6 |
Target Price
For this valuation, I’m expecting some multiple expansion, but still at a discount compared to peers due to low liquidity.
- EV/EBITDA = 4x
- MC/FCF = 7x
- PER = 7x
- Dividend Yield = 2%
| 2025 | 2026 | 2027 | 2028 | 2029 | |
|---|---|---|---|---|---|
| EV/EBITDA | €183 | €180 | €187 | €193 | €199 |
| PER | €152 | €146 | €151 | €152 | €162 |
| MC/FCF | €167 | €163 | €169 | €175 | €180 |
I see an interesting opportunity here, with high expectations for multiple expansion and maybe even an offset to declining revenues!
I opened a 5% weight position at 98.40
I do not hold a position with the issuer such as employment, directorship, or consultancy.
I hold a material investment in the issuer’s securities.
