Trigano may not be a household name, but it is a leading force in the expanding motorhome industry. With substantial insider ownership and a consistent track record of delivering strong returns on invested capital (ROIC), Trigano exhibits many attributes of a solid long-term investment. However, is now the right time to invest? Let’s delve deeper into this question in the analysis.
This is not a financial advice. I am not a financial advisor and I only do these post in order to do my own analysis and elaborate about my decisions, especially for my copiers and followers. If you consider investing in any of the ideas I present, you should do your own research or contact a professional financial advisor, as all investing comes with a risk of losing money. You are also more than welcome to copy me.
For full disclosure, I should start by mentioning that at the time of writing this analysis, I do not own any shares in Trigano. If you would like to see the stocks in my portfolio or copy my portfolio, you can do so on eToro, You can find instructions on how to do this here. Thus, I have no personal stake in Trigano. If you want to purchase shares (or fractional shares) of Trigano, you can do so through eToro. eToro is a highly user-friendly platform that allows you to get started with investing with as little as $100.
The Business
Trigano is a European leader in the design, manufacture, and distribution of leisure vehicles, specializing in motorhomes, caravans, mobile homes, and related accessories. Founded in 1935 and headquartered in Paris, France, the company operates with a vertically integrated business model. Its products are manufactured across factories in six European countries and distributed via a combination of company-owned and independent distributors. Trigano’s offerings range from compact camper vans to high-end luxury motorhomes, catering to a wide spectrum of consumer preferences and budgets. The company’s leisure vehicle segment accounts for 95 percent of its total sales, with motorhomes contributing nearly 80 percent of overall revenue. Trigano also offers complementary services such as financing, rentals, and maintenance, which enhance its overall value proposition. The company operates under a parent-subsidiary structure, where the parent company manages administrative and strategic decisions, allowing subsidiaries to focus on operational efficiency and customer engagement. Trigano’s moat is rooted in its scale and market leadership as Europe’s largest motorhome manufacturer, commanding roughly 30 percent of the market share. This leadership provides significant economies of scale, enabling cost efficiencies and competitive pricing. Even during challenging periods, such as the COVID-19 pandemic, Trigano maintained robust operating margins, outperforming its competitors. The company’s control over strategic components and ongoing industrial improvements enhances profitability and operational consistency across its subsidiaries. Trigano’s diversified product portfolio and adaptability to shifting market trends further bolster its position. For instance, the rising demand for compact camper vans and eco-friendly travel options aligns well with the company’s focus on innovation and sustainability. Majority family ownership provides long-term strategic stability, enabling the company to prioritize steady growth over short-term gains.
Management
Stéphane Gigou is the CEO of Trigano. He holds a degree in Economics and Commerce from La Sapienza University in Rome, Italy. Throughout his career, Stéphane Gigou has amassed extensive experience in the automotive industry, beginning with roles at Renault and later at Fiat Chrysler Automobiles. In 2017, Stéphane Gigou was appointed Managing Director of Fiat Professional, Fiat Chrysler's commercial vehicle division, overseeing a turnover of €5 billion. In 2020, Stéphane Gigou joined Trigano as Deputy CEO, with the intention of succeeding François Feuillet as Chairman of the Executive Board. He officially assumed the role of Chairman of the Executive Board on September 29, 2020. Under Stéphane Gigou's leadership, Trigano has reinforced its status as Europe's leading leisure vehicle manufacturer. Stéphane Gigou emphasizes Trigano's agility and adaptability in a constantly evolving environment. He has highlighted the company's resilience in overcoming supply chain disruptions and its commitment to offering competitively priced product ranges. Stéphane Gigou's strategic vision focuses on maintaining robust margins through cost-cutting measures and expanding market share while ensuring quality and customer satisfaction. Under Stéphane Gigou's guidance, Trigano continues to invest in both horizontal and vertical growth opportunities, seeking to enhance its competitiveness and operational efficiency. He has expressed a commitment to working closely with suppliers, while also considering vertical integration in areas where it could benefit the company's long-term interests. Stéphane Gigou's leadership is characterized by a focus on flexibility, customer-centric product development, and a strategic approach to navigating industry challenges. I believe that Stéphane Gigou's experience and results make him the right person to lead Trigano moving forward.
The Numbers
The first metric to investigate is return on invested capital (ROIC). Our criterion requires a 10-year history with all figures exceeding 10% annually. Trigano has successfully achieved a ROIC above 10% every year for the past decade, which is highly impressive. In fact, ROIC has only dipped below 15% twice during this period - once in 2015, which was a long time ago, and again in 2020, during the pandemic. Since then, Trigano has consistently delivered a ROIC of 17% or higher every year, an exceptional feat given the challenging macroeconomic conditions that have impacted many companies. This consistently high ROIC underscores Trigano's quality as a business and highlights its potential to be a long-term compounder for investors.
The following numbers represent the book value + dividend. In my previous format, this was referred to as the equity growth rate. It was the most important of the four growth rates I used in my analyses, which is why I will continue to use it in the future. As you are accustomed to seeing numbers in percentage form, I have decided to provide both the actual numbers and the year-over-year percentage growth. I don't have the growth rate from 2013 as Finbox only provides data for the past ten years. These numbers are truly impressive. Trigano is a textbook example of how a company should grow its equity. Not only has equity increased consistently every year for the past decade, but it has also grown by more than 10% annually - even during the challenges posed by the pandemic. This level of consistent growth highlights the company's strong financial management and resilience.
Finally, we will analyze the free cash flow. Free cash flow, in short, refers to the cash that a company generates after covering its operating expenses and capital expenditures. I use levered free cash flow margin because I believe that margins provide a better understanding of the numbers. Free cash flow yield refers to the amount of free cash flow per share that a company is expected to generate in relation to its market value per share. Trigano has delivered positive free cash flow in nine of the past ten years, which is a strong track record. The company benefitted significantly from the pandemic, as travel restrictions increased demand for motorhomes, leading to record-high free cash flow in 2020 and 2021. While free cash flow decreased in 2022 and 2023, Trigano still managed to achieve higher free cash flow in 2023 than in any year prior to the pandemic. However, Trigano reported negative free cash flow in 2024, largely due to supply chain disruptions stemming from changes in approval standards for chassis from OEMs, which resulted in higher factory inventories. To support its distributors facing surplus stocks, Trigano retained some of these inventories on its balance sheet, temporarily increasing working capital requirements. The company expects this situation to normalize by spring 2025, and it is anticipated that Trigano will return to delivering positive free cash flow in the full year 2025. The levered free cash flow margin reached its peak during the pandemic but has since decreased due to macroeconomic challenges. Encouragingly, it improved in 2023 compared to 2022, signaling a recovery. While the free cash flow yield has been volatile, historical figures prior to 2024 suggest that Trigano has generally traded at an attractive valuation. However, valuation will be revisited later in the analysis for a more detailed assessment.
Debt
Another important factor to consider is debt. It's crucial to evaluate whether a business can repay its debt within three years by dividing total long-term debt by earnings. For Trigano, the calculation reveals that the company currently has no debt, which is a highly favorable position. I appreciate companies with no debt, as it adds financial flexibility and reduces risk, especially during economic downturns or periods of uncertainty. Furthermore, when reviewing the past decade, Trigano has consistently maintained higher earnings than long-term debt, demonstrating a strong financial discipline. This track record indicates that it is unlikely debt will become an issue for Trigano in the future.
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Risks
Competition poses a significant risk for Trigano due to the structure and dynamics of the European leisure vehicle market. The market is highly competitive, with two dominant players, including Trigano, alongside a mix of medium-sized companies and car manufacturers. This intense competitive landscape is expected to persist, presenting ongoing challenges for growth and market positioning. A key risk stems from consolidation within the sector. While consolidation can offer opportunities for growth and efficiency, Trigano’s ability to participate in this trend is constrained by its already substantial market share in certain countries. This exposes the company to anti-trust regulations, limiting its ability to acquire competitors and expand its footprint further. Such restrictions could hinder Trigano’s efforts to strengthen its competitive position, especially in a market where economies of scale are crucial for success. Additionally, the rapid growth of the van and converted van segments presents another challenge. These vehicles are gaining popularity due to their practicality and appeal to a wider customer base, which has attracted increased competition from automobile manufacturers entering the leisure vehicle market. These manufacturers benefit from extensive resources, well-known brands, and established dealership networks, enabling them to compete aggressively on pricing and distribution. As a result, Trigano faces potential pressure on margins, pricing, and market share.
Supply chain risks pose a significant challenge for Trigano, given its heavy dependence on external suppliers for critical components used in manufacturing leisure vehicles. Any disruptions in the supply chain can directly affect Trigano’s operations by increasing costs, delaying production, and undermining its ability to meet customer demand in a timely manner. One primary risk is the potential failure of a supplier to deliver components on schedule. Such disruptions can create production bottlenecks, escalate operational costs, and hinder Trigano’s ability to maintain its production timelines. Delays in delivery can also damage Trigano's reputation among customers and distributors, particularly in a highly competitive market where timely fulfillment is a key differentiator. The concentration of the supply chain adds another layer of risk. The production of essential components is increasingly dominated by a small number of manufacturers, creating a more centralized supply base. This concentration exposes Trigano to the risk of monopolistic or near-monopolistic practices, where suppliers could significantly influence availability and pricing. In such scenarios, Trigano may face higher costs, not only from elevated component prices but also from managing potential supply shortages, which could impact margins and overall profitability.
Legislation restricting the use of leisure vehicles presents a significant risk to Trigano, as the appeal of motorhomes and similar products is closely tied to the freedom and flexibility they offer. Motorhomes are popular for providing an affordable, self-contained travel experience, allowing users to drive, park, and stay overnight in diverse locations across Europe. If this freedom is limited by regulatory changes, it could negatively impact customer demand and, consequently, Trigano's sales. A primary concern is the tightening of parking regulations in tourist-heavy areas. Many motorhome users rely on convenient and affordable parking to explore new destinations. Stricter parking rules or increased costs in popular tourist locations could deter potential buyers who view motorhomes as a cost-effective travel solution. Similarly, restrictions on access to cities or urban areas could discourage customers. Many European cities are introducing low-emission zones or similar restrictions to reduce environmental impact, and motorhomes, being larger and less fuel-efficient than regular vehicles, could face prohibitions or higher costs for entry. Another emerging issue is the potential reduction or elimination of free overnight parking for motorhomes. Legislation limiting free parking options could increase the cost of motorhome travel, making it less attractive compared to other vacation alternatives. These regulatory changes could alter consumer perceptions of motorhomes, shifting the balance toward other leisure options.
Reasons to invest
Positive trends in the motorhome market provide a compelling case for investing in Trigano, as these developments directly align with the company's core business and growth potential. The 2025 outlook is particularly favorable, with motorhome demand continuing to gain momentum and the market projected to grow by over 10%. Trigano is well-positioned to capitalize on these conditions, supported by strong order intake and increasing motorhome registrations across Europe. Demographic shifts are a significant driver of this growth. The over-50s population in Europe is projected to expand by 15 million by 2035, according to European Commission data. This group, particularly young seniors aged 55–65, is a key customer base for motorhomes. They often have the time, disposable income, and desire for flexible, off-season travel that motorhomes provide. The values associated with motorhome travel - freedom, independence, sustainability, and cost efficiency - align strongly with this demographic's preferences, ensuring sustained demand. Additional factors, such as increasing healthy life expectancy and a growing interest in outdoor leisure activities, are further boosting motorhome adoption. Europe's strong market position is reinforced by a large customer base, extensive availability of parking facilities, and a rising number of high-net-worth individuals seeking premium travel options. These trends position Trigano to benefit from long-term market growth and expanding customer demand.
Acquisitions are a compelling reason to invest in Trigano due to the company’s proven ability to strategically use mergers and acquisitions to expand its market leadership, enhance its distribution network, and unlock operational synergies. Over the years, Trigano has consistently demonstrated expertise in identifying, acquiring, and integrating businesses, even in challenging economic environments, making M&A a core component of its long-term growth strategy. A notable example of this is the acquisition of BIO Habitat, which underscores Trigano’s ability to target profitable companies and implement effective synergy plans to optimize operational and financial outcomes. Additionally, Trigano’s focus on acquiring financially distressed companies has solidified its dominance in the leisure vehicle market. By bringing struggling businesses under its umbrella, Trigano not only ensures their survival but also capitalizes on opportunities to consolidate the market and gain competitive advantages. This disciplined approach has enabled Trigano to sustain its M&A activity even during periods of macroeconomic uncertainty, such as rising interest rate environments when many other companies have reduced acquisitions. Since its IPO in 1998, Trigano has successfully executed numerous acquisitions, primarily in the motorhome sector, reinforcing its position as Europe’s leading producer of leisure vehicles. Trigano’s reputation as the most experienced acquirer in the sector adds further credibility, making it a preferred partner for companies seeking strategic alliances or looking to be acquired. The company’s ability to extract value from acquired businesses, enhance their performance, and integrate them seamlessly into its operations has been instrumental in driving sustainable growth and strengthening its competitive edge.
New product launches are a strong reason to invest in Trigano, as they demonstrate the company's ability to innovate, align with evolving market trends, and cater to emerging consumer preferences. Trigano’s focus on introducing innovative, competitively priced products has solidified its market leadership and broadened its appeal across diverse customer segments. A standout example is the launch of the ElectriX motorhome, the world’s first dual-mode combustion/electric leisure vehicle, introduced under the Chausson and Challenger brands. This revolutionary product highlights Trigano's commitment to sustainability and the energy transition. With a range of up to 100 kilometers in all-electric mode, the ElectriX series addresses the growing consumer demand for environmentally friendly travel solutions. By combining eco-conscious design with the practicality of a hybrid system, Trigano appeals to a rising demographic of buyers seeking to reduce their carbon footprint without compromising the flexibility and independence offered by leisure vehicles. This innovation aligns with broader industry trends, where electrification and fuel efficiency are becoming key growth drivers in the motorhome market. By investing in these advanced technologies early, Trigano positions itself as a pioneer in the transition to sustainable travel, distinguishing itself from competitors. As demand for eco-friendly and technologically advanced motorhomes grows, Trigano is well-positioned to capture market share and drive long-term growth.
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Valuation
Now it is time to calculate the share price. I perform three different calculations that I learned at a Phil Town seminar. If you want to make the calculations yourself for this or other stocks, you can do so through the tools page on my website, where you have access to all three calculators.
The first valuation method is the Margin of Safety price, which considers earnings per share (EPS), estimated future EPS growth, and estimated future price-to-earnings (P/E) ratio. The minimum acceptable rate of return is set at 15%. For this calculation, I used an EPS of €19,39, based on fiscal year 2024 data. I have selected a projected future EPS growth rate of 10%, which is conservative given that the motorhome market is expected to grow by more than 10%. Additionally, I have selected a projected future P/E ratio of 20, which is twice the growth rate. This decision is based on Trigano's historically higher price-to-earnings (P/E) ratio. Finally, our minimum acceptable rate of return has already been established at 15%. After performing the calculations, we determined the sticker price (also known as fair value or intrinsic value) to be €248,63. We want to have a margin of safety of 50%, so we will divide it by 2. This means that we want to buy Trigano at a price of €124,32 (or lower, obviously) if we use the Margin of Safety price.
The second calculation is known as the Ten Cap price. The rate of return that a company owner (or stockholder) receives on the purchase price of the company essentially represents its return on investment. The minimum annual return should be at least 10%, which I calculate as follows: The operating cash flow last year was 53, and capital expenditures were 58. I attempted to analyze their annual report to calculate the percentage of capital expenditures allocated to maintenance. I couldn't find it, but as a rule of thumb, you can expect that 70% of the capital expenditures will be allocated to maintenance purposes. This means that we will use 41 in our calculations. The tax provision was 124. We have 19,3 outstanding shares. Hence, the calculation will be as follows: (53 – 41 + 124) / 19,3 x 10 = €70,47 in Ten Cap price. However, it’s important to note that this calculation is based on a year where operating cash flow was significantly impacted due to inventory adjustments mentioned in the free cash flow section. If we were to use the 2023 numbers, the Ten Cap price would be €141,47.
The final calculation is called the Payback Time price. It is a calculation based on the free cash flow per share. Since Trigano recorded a negative free cash flow in fiscal year 2024—an outlier due to temporary supply chain disruptions - I’ve based this calculation on the 2023 numbers instead. With Trigano's Free Cash Flow Per Share at €7,76 and a growth rate of 10%, if you want to recoup your investment in 8 years, the Payback Time price is €97,62.
Conclusion
I find Trigano to be an intriguing company with strong management and a solid competitive moat as Europe’s largest motorhome producer. The company has consistently delivered a ROIC above 10% for the past decade, exceeding 15% in eight of those years, which demonstrates its operational efficiency and profitability. The negative free cash flow in 2024 appears to be an outlier, driven by supply chain disruptions and increased inventories to support distributors. Encouragingly, management expects free cash flow to return to positive territory in fiscal year 2025. However, competition poses a notable risk. The highly competitive European leisure vehicle market includes strong players, such as automobile manufacturers entering the van segment with substantial resources and well-established distribution networks. Additionally, Trigano’s reliance on external suppliers and the concentration of key component manufacturers create vulnerabilities to delays, cost increases, and monopolistic practices. Furthermore, restrictive legislation, such as low-emission zones and parking limitations, could reduce the appeal of motorhomes, potentially impacting demand. On the positive side, the motorhome market is supported by strong demographic trends, including a growing over-50s population and a projected market expansion of over 10% in 2025. Trigano’s proven track record in acquisitions has strengthened its market leadership and expanded its network, while innovative product launches, like the ElectriX motorhome with dual-mode combustion/electric capabilities, highlight its commitment to sustainability and technological advancement. With these favorable factors in mind, I believe buying Trigano shares below the margin of safety price of €124 could represent a compelling long-term investment opportunity.
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