The problem with Trigano relatively to Thor is that it requires much more working capital and has more difficulty as a result in generating the same FCF generation. What is your view on Trigano's working capital needs? They seem really high
I actually think the delta in working capital between Thor and Trigano is beyond the control of Trigano partly.
I believe this is due to the distribution segment of the market.
In Europe, Trigano is forced to hold more inventory than normal on its books as distributors don’t have access to floor plan financing as in the US i.e Thor distributors have access to financing to purchase Thor vehicles which helps Thor manage better its working capital as distributors can hold more inventory on their books due to their financial muscle, access to unique financing.
This comes with the disadvantage that if dealers default, Thor might have to repurchase the vehicles.
In Europe, distributors are more mom and pops with less / no access to this type of financing which affects Trigano who has to hold more inventory to avoid distributors going bankrupt in downturns
Thank you for sharing your knowledge, Spider. Excellent explanation!
Having reviewed Thor and Trigano's M&A activity, I have noticed that Trigano has made more acquisitions in the distributor sector. Perhaps that explains the more paternalistic attitude towards distributors, helping them in bad times.
Have you seen Knaus Tabbert lately? It is experiencing serious financial difficulties, is in debt and is not generating cash flow.
Could this be an opportunity for Thor or Trigano? As in other cyclical sectors, only the best companies are capable of withstanding pressure during difficult periods, thereby eliminating competition.
I really couldn't say. The results for the year are good. Its competitor Knaus Tabbert is also down and is performing well.
If you look at the share movement chart of Thor and Trigano over many years, you will see that they are behaving very similarly. It is as if the market is looking at something else and not at the results of the individual companies. I can't tell you if it is because of commodities or because it looks at these companies as if they were vehicle manufacturers.
The same happens with another completely different segment such as yachts with Sanlorenzo and Italian Sea Group. The movements of the stocks have been very similar over the last few years.
The problem with Trigano relatively to Thor is that it requires much more working capital and has more difficulty as a result in generating the same FCF generation. What is your view on Trigano's working capital needs? They seem really high
Hello Spider,
Thor is indeed more efficient at managing its working capital than Trigano, meaning that Trigano could improve in this area.
However, Trigano has cash available and virtually no debt, so this will not prevent it from continuing with its market consolidation strategy.
This is a point to consider, but not a cause for concern in my opinion.
Hi Robin,
Thanks.
I actually think the delta in working capital between Thor and Trigano is beyond the control of Trigano partly.
I believe this is due to the distribution segment of the market.
In Europe, Trigano is forced to hold more inventory than normal on its books as distributors don’t have access to floor plan financing as in the US i.e Thor distributors have access to financing to purchase Thor vehicles which helps Thor manage better its working capital as distributors can hold more inventory on their books due to their financial muscle, access to unique financing.
This comes with the disadvantage that if dealers default, Thor might have to repurchase the vehicles.
In Europe, distributors are more mom and pops with less / no access to this type of financing which affects Trigano who has to hold more inventory to avoid distributors going bankrupt in downturns
Thank you for sharing your knowledge, Spider. Excellent explanation!
Having reviewed Thor and Trigano's M&A activity, I have noticed that Trigano has made more acquisitions in the distributor sector. Perhaps that explains the more paternalistic attitude towards distributors, helping them in bad times.
Have you seen Knaus Tabbert lately? It is experiencing serious financial difficulties, is in debt and is not generating cash flow.
Could this be an opportunity for Thor or Trigano? As in other cyclical sectors, only the best companies are capable of withstanding pressure during difficult periods, thereby eliminating competition.
Interesting!
You should take a look at Lazydays (GORV)
What led to the sharp sell-off beginning in April? Was it just the rise in steel prices?
I really couldn't say. The results for the year are good. Its competitor Knaus Tabbert is also down and is performing well.
If you look at the share movement chart of Thor and Trigano over many years, you will see that they are behaving very similarly. It is as if the market is looking at something else and not at the results of the individual companies. I can't tell you if it is because of commodities or because it looks at these companies as if they were vehicle manufacturers.
The same happens with another completely different segment such as yachts with Sanlorenzo and Italian Sea Group. The movements of the stocks have been very similar over the last few years.