View Report. Company profile. Manutan International is one of the largest European groups involved in mail-order sales of industrial and office equipment to businesses and local authorities. The group also sells handling, lifting, and storage equipment, office and workshop furnishings and machines for production, maintenance, security, quality control, and shipping.

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Manutan MAN. Over every time frame, MAN. PA has shown an ability to grow at rates higher than inflation through a combination of organic growth, new country expansion, and select acquisitions. Most importantly, this growth has been achieved while maintaining double-digit ROEs despite a large net cash position. Distributors like Manutan help manufacturers reach a broader customer base, as many do not have the right personnel or infrastructure to do it alone.

Large accounts can negotiate product discounts due to volume, but these price concessions are mitigated by smaller customers purchasing at full price via online sales channels.

This through-cycle margin profile is likely from suppliers trying to push inventory through the channel when sales stall allowing MAN. PA to get better purchase prices , while at the same time allowing Manutan to hand out fewer volume discounts on the customer side. In addition, these kind of distributors benefit from positive working capital cycles during recessionary periods, as inventory is worked down and receivables are collected.

A big component of their procurement costs are the logistics of setting up purchase contracts and processing purchase orders across multiple vendors. Working through a distributor not only provides better pricing, but allows these companies to place one purchase order for hundreds of items versus placing hundreds of POs with multiple vendors, cutting down on transaction costs.

So scale becomes a big advantage MAN. PA is the European market leader , as customers look to rationalize all costs in the procurement process, not just the product price. This is illustrated in the graphic below:. True to their word, management was not shy about investing in the business during the recession, making large commitments in several key areas:.

The facility will be fully operational this year. This sounds like a long overdue project, and MAN. These investments have consumed significant free cash flow, depressed margins and impacted ROIC over the last several years. Very few management teams are willing to make these decisions in the face of the inevitable pressure on their stock price — this long-term thinking is a major positive.

These investments also setup the company for the core part of the thesis: reversion to the mean. In March , MAN. PA purchased Camif Collectivites, a distributor to the public i. PA bought Camif after the bankruptcy of its parent company not to mention during a terrible economic climate.

Check out the purchase multiples on the deal: 0. While the deal was done at a very attractive price, margins in Camif are structurally lower, and the continued problems in Europe have caused even greater pressure. Several other geographic regions are currently reporting margins below long-term trends, with mean reversion potential there as well.

Over the last five years, multiples have compressed sharply for both stocks. TAKKT arguably deserves to trade at a premium, but the current one seems far too wide.

However, in the long-term, this valuation disparity should close, as operating performance normalizes at MAN.

In addition, Manutan acquired Casal Sport in Oct. Casal offers complimentary products to Camif, providing synergy opportunities and increasing scale in the public market segment. PA offers an attractive risk vs. Going forward, margins are expected to improve and IC should grow at a much slower rate or even shrink , driving returns closer to the long-run average. While a return above 50 for the PMI signaling expansion is probably unlikely in , the eventual recovery will provide a boost to results.

In addition, many investors view family-control as a negative, a viewpoint I do not share assuming the family has a long history of prudent capital allocation, see my investments in TES.

PA , COM. Manutan is a rather boring stock with a solid business model and long-term track record. With excessively bearish forecasts already baked into the stock and several areas of potential reversion to long-run averages margins, ROIC, comp. Interesting find! I am a big fan of strong industrial distributors for their economies of scale, which you noted.

Grainger and Fastenal are in the US. This seems like a great place to look! Have you found any industrial distributors in Spain or Italy? You end up with very attractive long-term returns. Not bad. Not much trading on those exchanges lots of debt-heavy companies which I generally avoid , although could be some that trade elsewhere but are based there.

Great find and post. Thanks, Thomas. Thank you. Good point on Amazon Supply. I think it will take awhile to breakdown the existing customer relationships though. But for now, I like MAN.

Great write-up, as usual. Just wondering about the management, is it family controlled and family managed? Is there a person in the family who is more or less the mastermind of the business and do you expect that person or team to stick around for the foreseeable future?

The sons have been part of the management committee since Jean-Pierre is remaining on as the non-executive chairman of the board. So the company is technically in its 3rd generation, with the current CEOs being appointed during the depths of the financial crisis — a trial by fire appointment for sure.

I do indicate that trailing returns are lower than the LT average in the 1st point explaining why the stock is cheap. Very good post. However, what I somehow worry about is the availability of quarterly financial statements etc. The company only reports revenues on a quarterly basis, if I am correct.

Revenues in the second quarter decreased by approx. I do not really feel comfortable valuing the coy on the basis of 8 month old data… The economy moves fast in Europe currently — things can change very quickly. We have seen that at many companies and in many different countries in the past.

Manutan provides quarterly top-line updates, but only reports financial information on a semi-annual basis. Yes, recent results have not been great and the outlook for the next 12 months is murky — but that is exactly the reason why the opportunity exists.

I value companies based on a long-term history, which is why I tend to normalize earnings power over a full business cycle years.

In the long-run, I think the company will continue growing sales faster than inflation while earning mid-teens returns on capital. If that is true, the current price is too cheap. I plan to hold the stock for a long-time, so what happens in the next few quarters is likely a non-issue. Do you recommend buying stocks of Manutan now? I wonder if there is any expectation for their growth. Would it be a good investment? Would you consider this huge cash position a problem?

I prefer cash than debts, but it seems there is an excesive cash position even if more adquisitions are made. Do you think the company is considering any policy change according cash? Home About Philosophy Research Contact. Filed under Holdings Stock Analysis. So why is this a good business? This is illustrated in the graphic below: Performance Stems from Long-Term Thinking Another quote stuck out in the annual report compare it to W. Valuation Comp.

Why Is the Stock Cheap? Conclusion Manutan is a rather boring stock with a solid business model and long-term track record. Disclosure Long MAN. If you have enjoyed this entry. LOLTradez says:. April 17, at am. April 18, at am. Thomas Braziel says:. April 17, at pm. Tim says:. NoMeanSum says:. April 18, at pm. April 23, at pm. Darcy says:. April 24, at am. Drella says:. May 5, at am.



Inthe French distance selling operations of Manutan were transferred to caralogue subsidiary called Catalogue manutan SA. Inthe Group launched its strategy for the period to and designed its first European-wide offer. DA common technological communication platform for all Group companies was launched as early as July catalogue manutan , Manutan strengthened its presence in the trade sector by finalising a new acquisition in Great Britain: The holding company was then renamed Catalogue manutan International. The first e-business merchant sites were started up and e-procurement catalogue manutan were made available to Key Accounts. Manutan Group History Julyas part of its ambition to broaden its product range and strengthen its footprint in the United Kingdom, with its sights especially trained on the specialist customer segment, the Group acquired IronmongeryDirectan expert in delivering ironmongery products to tradesmen. Marchthe Group created its Digital Laba new entity to drive digital innovation.


Catalogue Launch

In June , Manutan enhanced its product range by acquiring Kruizinga, an expert in the online distribution of storage and handling equipment in the Netherlands. July , Manutan strengthened its presence in the trade sector by finalising a new acquisition in Great Britain: Essex Electrical Wholesalers , now ElectricalDirect. March , the Group created its Digital Lab , a new entity to drive digital innovation. June , the Group acquired Papeteries Pichon , a specialist distributor of school suppliers to nurseries and primary schools in France, thereby reinforcing its status as a leading player in the local authorities sector in France.

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