TAKE OFF S.P.A. EQUITY RESEARCH - FY23 Update April 23rd, 2024
OUTPERFORM
Current Share Price (€): 0.75
Target Price (€): 1.90
Take Off - 1Y Performance
120 | |||
100 | |||
80 | |||
60 | |||
40 | |||
20 | |||
0 | |||
24/04/23 | 24/07/23 | 24/10/23 | 24/01/24 |
Take Off Share Price | FTSE Italia Growth Index | |
Source: S&P Capital IQ - Note: 24/04/2023 = 100
Focus on profitability
Trading update
The bearish trend hitting Take Off share price since 2023 is still ongoing so far, resulting in -78% LTM, while in the same period the FTSE Italia Growth index lost 13%.
FY23: sales stable, profitability over expectations
Take Off group FY23 sales were €29.9m, in line with previous year, driven by Take Off at €24.6m (+3.9% YoY) while Over sales went down by 13.1% at €5.3m. Total revenues at €32.3m, +5% YoY, including €2.2m gain from settlement agreement with supplier. We recall that according to management sales have been affected by the high inflation framework which is shrinking customers disposable income and by weather conditions shifting in seasons. Trade margin decreased, slightly under 50% on sales from 55%. EBITDA slowdown at €4.9m, -32% YoY, due to higher cost of sales and personnel from unperforming stores; profitability margin at 16.5% from 24% but over previously announced management expectation (15%). Net income at €1.0m. Net cash almost stable, €6.4m from €6.9m as of December 2022, after €0.9m FY22 dividends distribution and €4.2m working capital and capex outflow.
Company data
ISIN number | IT0005467425 |
Bloomberg code | TKF IM |
Reuters code | TKF.MI |
Industry | Apparel retail |
Stock market | Euronext Growth Milan |
Share Price (€) | 0.75 |
Date of Price | 23/04/2024 |
Shares Outstanding (m) | 15.6 |
Market Cap (€m) | 11.7 |
Market Float (%) | 39.1% |
Daily Volume | 53,950 |
Avg Daily Volume YTD | 93,128 |
Target Price (€) | 1.90 |
Upside (%) | 154% |
Recommendation | OUTPERFORM |
Share price performance
1M | 3M | 6M | 1Y | |
Take Off - Absolute (%) | -6% | -22% | 1% | -78% |
FTSE Italia Growth (%) | -1% | -3% | 6% | -13% |
1Y Range H/L (€) | 3.40 | 0.69 | ||
YTD Change (€) / % | -0.22 | -23% |
Source: S&P Capital IQ
Analysts
Luigi Tardella - Head of Research ltardella@envent.it
Mauro Durante mdurante@envent.it
EnVent Italia SIM S.p.A.
Via degli Omenoni, 2 - 20121 Milano (Italy) Phone +39 02 22175979
This Note is issued by arrangement with MIT SIM, Issuer's Specialist
This document may not be distributed in the United States, Canada, Japan or Australia or to U.S. persons.
Current trading: stores relocation strategy
As commented in our prior note, Take Off is following with the stores repositioning strategy, resulting in 12 closedowns, of which 9 located in department stores in northern and central Italy. Accordingly with stores reduction, Q1 2024 results recently disclosed by management are lower than previous year: sales at €6.2m from €8.4m in Q1 2023 (-25% YoY), from Take Off sales at €5.3m (-21%) and Over at €0.9m (-43%). According to management, average transaction price in Q1 2024 rose close to €6 from €4.3 in the same period of 2023 for Over, while decline from €27.9 to €25.6 for Take Off, resulting in an average transaction price for Take Off group of €17.1, +28% YoY. We recall that management focus for 2024 will be preserving a healthy financial profile and profitability through cost containment measures; furthermore, management reach an agreement to sale stock of past years inventories during 2024.
Target price and OUTPERFORM rating confirmed
From our previous flash note, we have updated our mid-term estimates factoring in Q1 results, resulting in lower sales in 2024-25E, and we fine-tuned cost, working capital and capex dynamics in line with 2023 results and ongoing relocation strategy; we also add 2026 to our estimates period. Take Off stock value drop might look disproportionate considering the retail network value. Moreover, analytical and market valuation methodologies converge in potential value upside, even applying substantial discounts to larger market peers. Our valuation confirms the €1.90 target price per share, +154% on current share price, with OUTPERFORM rating.
KEY FINANCIALS AND ESTIMATES | |||||
€m | 2022 | 2023 | 2024E | 2025E | 2026E |
Sales | 29.8 | 29.8 | 26.5 | 29.5 | 31.0 |
YoY % | 13% | 0% | -11% | 11% | 5% |
EBITDA | 7.3 | 4.9 | 4.1 | 5.3 | 6.2 |
Margin on Sales | 24% | 17% | 16% | 18% | 20% |
EBIT | 5.0 | 1.5 | 0.8 | 1.9 | 2.6 |
Margin on Sales | 17% | 5% | 3% | 7% | 9% |
Net Income | 3.5 | 1.0 | 0.5 | 1.2 | 1.7 |
Net (Debt) Cash | 6.9 | 6.4 | 9.7 | 12.4 | 16.4 |
Equity | 24.4 | 24.4 | 24.8 | 26.1 | 27.8 |
TP - IMPLIED MULTIPLES | |||||
EV/Revenues | 0.7x | 0.9x | 0.8x | 0.7x | |
EV/EBITDA Adj | 9.7x | 15.5x | 8.7x | 6.8x |
Source: Company data 2022-23A, EnVent Research 2024-26E
The Issuer is a corporate client of EnVent Italia SIM S.p.A., thus this Note is to be intended as a marketing communication, not an independent research. See final two pages for important disclosures.
Trading price range €0.69-3.40 per share
-78% for Take Off, vs
-13% of the Italia Growth Index
Market update
Take Off - 1Y Share price performance and trading volumes
120 | 900,000 | |||||
100 | -78% | 800,000 | ||||
700,000 | ||||||
80 | 600,000 | |||||
TKF ending | 500,000 | |||||
60 | price €0.75 | |||||
400,000 | ||||||
TKF beginning | ||||||
40 | price €3.40 | 300,000 | ||||
20 | 200,000 | |||||
100,000 | ||||||
0 | 0 | |||||
24/04/23 | 24/06/23 | 24/08/23 | 24/10/23 | 24/12/23 | 24/02/24 | |
Take Off Volumes | Take Off Share Price | FTSE Italia Growth Index |
Source: EnVent Research on S&P Capital IQ - Note: 24/04/2023=100
Industry peers - 1Y Market performance
160 | |||||
140 | |||||
120 | |||||
100 | |||||
80 | |||||
60 | |||||
40 | |||||
20 | |||||
0 | |||||
Apr-23 | Jun-23 | Aug-23 | Oct-23 | Dec-23 | Feb-24 |
Take Off | Mean of industry peers |
Source: EnVent Research on S&P Capital IQ - Note: 23/04/2023=100
Take Off - Liquidity analysis and velocity turnover
66%
Record trading volumes with 2023 bearish trend
18%
2022 | 2023 |
Source: EnVent Research on S&P Capital IQ - Velocity turnover=ratio of tot. traded shares on tot. ordinary shares
1
Fair correlation among industry players
Industry peers - Regression analysis and Take Off target positioning
4.5x | y = 26.181x + 0.045 | Fast Retailing | ||||||||||||||||||||
4.0x | R² = 0.9014 | |||||||||||||||||||||
(Uniqlo) | Inditex | |||||||||||||||||||||
EV/Revenues | 3.5x | |||||||||||||||||||||
3.0x | ||||||||||||||||||||||
2.5x | Ross Stores | |||||||||||||||||||||
2024E | 2.0x | Burlington Stores | TJX | |||||||||||||||||||
1.5x | H&M | Take Off TARGET | ||||||||||||||||||||
1.0x | OVS | PRICE | ||||||||||||||||||||
Gap | Take Off CURRENT | |||||||||||||||||||||
0.5x | ||||||||||||||||||||||
0.0x | MARKET PRICE | |||||||||||||||||||||
0% | 2% | 4% | 6% | 8% | 10% | 12% | 14% | 16% | 18% | |||||||||||||
Avg. 5Y EBIT margin |
Source: EnVent Research on S&P Capital IQ, April 2024
The Italian fashion outlet
Geographically focused
Differentiated business model
Strategy
Investment case
Take Off, listed on Euronext Growth Milan since November 2021, is an Italian fashion value-for-money retailer which operates through a chain of 49 stores selling women and men apparel and 114 stores selling childrenswear. Central-Southern Italy is presently the core geolocation scope and organic growth over the medium term will be supported also by increasing territorial coverage.
The Group operates with a joint business model, being an off-price retailer of products from designer brands and a typical vertically integrated apparel retailer with an internal team in charge of development of own brands and merchandise mix through external suppliers, with in-house logistics management.
Take Off intends to pursue its store portfolio development in current market areas and unexplored geographies, especially Northern Italy regions, also through acquisition of small retail fashion networks.
40 | 40% | |||
31% | ||||
30 | 36% | 30% | ||
20 | 24% | 17% | 20% | |
10 | 10% | |||
21.2 | 26.4 | 29.8 | 29.8 | |
0 | 0% | |||
2020 | 2021 | 2022 | 2023 | |
Sales (€m) | Margin on Sales % |
Source: Company data
2
Drivers
Industry and company drivers
- Fashion goods is a market driven by both need and impulse
- Resilient demand for value and quality goods: a countercyclical and defensive market segment
- Making the most of apparel inventory, a burden typical of manufacturers and other retailers
- Diversified and balanced brand portfolio
- Selling proposition to serve a wide category of customers
- Growth without huge capex
- Opportunistic merchandise acquisition
- Customers' preferences analytics
- Efficient franchising network
Challenges
- Brand awareness and reputation buildup
- Market competitiveness and price pressure within the industry
- Geographic presence time to market
- Rise of e-tailers offering branded products at discount
- Inventory requirement
Sales breakdown,
Over 18%
Source: Company data
Take Off 82%
Historical aggregated revenues | ||||||||||||
40 | ||||||||||||
35 | 30.1 | 29.8 | ||||||||||
26.4 | ||||||||||||
30 | ||||||||||||
26.9 | 10.2 | 22.3 | 5.3 | |||||||||
25 | 24.2 | 10.3 | 33.2 | 6.1 | ||||||||
6.5 | ||||||||||||
20.0 | 9.6 | |||||||||||
20 | ||||||||||||
9.1 | 6.8 | |||||||||||
15 | 7.9 | |||||||||||
8.8 | 23 | 23.7 | 24.6 | |||||||||
10 | ||||||||||||
19.8 | 19.9 | |||||||||||
4.6 | 15.1 | 17.3 | 15.5 | |||||||||
12.1 | ||||||||||||
5 | ||||||||||||
8.8 |
0.6 4.6
0 | |||||||||||||||||||||||||||||
Euro m 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||
Take Off | Over | ||||||||||||||||||||||||||||
Source: Company data
3
Risk profile | ||||||||||||||||
Competitive forces | ||||||||||||||||
Force | Factors | |||||||||||||||
Competitive | • High rivalry among retailers | Higher | risk | |||||||||||||
• | Competition on price vs | |||||||||||||||
rivalry | ||||||||||||||||
• Brand concept dominant | ||||||||||||||||
• Well informed, tech savvy, can choose | ||||||||||||||||
Customers | and switch between vendors | Competitive | ||||||||||||||
rivalry | ||||||||||||||||
• Consumer experience is key | ||||||||||||||||
Lower | Customers | |||||||||||||||
• | Low barriers to entry | |||||||||||||||
impact | ||||||||||||||||
• | ||||||||||||||||
New entrants | Main barriers: investment in | brand, | ||||||||||||||
Higher | ||||||||||||||||
marketing, product differentiation | New | impact | ||||||||||||||
• | ||||||||||||||||
High number of material suppliers and | entrants | Overall risk profile | ||||||||||||||
outsourcing manufacturers; | ||||||||||||||||
rules set | MEDIUM-LOW | |||||||||||||||
Suppliers | by buying brands and retailers | Suppliers | ||||||||||||||
• | Excess inventory endemic to the | Substitutes | ||||||||||||||
apparel industry | Lower risk | |||||||||||||||
Substitutes | • | No substitute products | ||||||||||||||
Source: EnVent Research
Business update
- As of April 2024, Take Off has 163 stores, of which 49 are Take Off stores and 114 are Overkids stores. Overall, the retail network is composed of 42 own stores and 121 franchised stores.
- During the second exercise period between November 14-25, 2022 (strike price of €5.20) no warrant has been exercised, being out of the money
Resilience in the luxury fashion industry, uncertainties for other segments
Industry outlook: uncertainty
According to consulting firm McKinsey, in 2023 the fashion industry overall faced persistent and deepening challenges: Europe saw slow growth throughout the year, while China's performance faded in the second half; even the resilient luxury segment recorded slow sales and uneven performance in the latter part of the year. The prospect of subdued economic growth, persistent inflation, and weak consumer confidence makes 2024 landscape uncertain: 2-4% growth is predicted for the year ahead globally, in line with 2023. Once again, luxury segment is expected to record higher growth (+3-5% vs 5-7% in 2023), even if companies will be challenged by the tough economic environment, as consumers hold down expenses. European market will likely expand only by 1-3%, in line with H2 2023 but lower than H1 performance (5%). Slumping consumer confidence and declining household savings are expected to
4
be the most probable causes of restrained spending. In an uncertain world, consumer discretionary spending will be addressed toward hard luxury goods from trusted brands, reflecting their potential investment value in tough economic times, also preferring emotional connections and authenticity over celebrity endorsements (source: BoF and McKinsey, The state of fashion 2024, November 2024).
Estimates revision
Based on FY23 results, Q1 2024 current trading and repositioning strategy, which include reduction of stores, we restate our projections of store openings and sales per stores, resulting with a 6% to 12% decrease in 2024-25E sales expectation. We factor in 2023 higher operating costs, fine tuning profitability expectation to moderate performance, working capital and capex dynamics. We also introduce 2026E to the forecasting period.
Change in estimates
Previous vs Revised Revenues and EBITDA estimates (€m)
40 | 20% | ||||
17% | 16% | 18% | |||
16% | |||||
30 | 15% | ||||
15% | |||||
15% | |||||
20 | 10% | ||||
29.6 | 29.8 | 31.5 | |||
30.2 | 26.5 | 29.5 | |||
10 | 5% | ||||
0 | 0% |
Euro m | 2023 | 2024E | 2025E | ||||||||||
Previous Sales (left) | Revised Sales (left) | ||||||||||||
Previous EBITDA (right) | Revised EBITDA (right) | ||||||||||||
Source: EnVent Research | |||||||||||||
Revised | Previous | Change % (Rev vs Prev) | |||||||||||
€m | 2023 | 2024E | 2025E | 2023E | 2024E | 2025E | 2023 | 2024E | 2025E | ||||
Sales | 29.8 | 26.5 | 29.5 | 29.6 | 30.2 | 31.5 | 1% | -12% | -6% | ||||
Revenues | 32.3 | 27.0 | 30.0 | 29.9 | 30.5 | 31.8 | 8% | -12% | -6% | ||||
EBITDA | 4.9 | 4.1 | 5.3 | 4.4 | 4.6 | 5.0 | 12% | -10% | 6% | ||||
Margin on Sales | 17% | 16% | 18% | 15% | 15% | 16% | |||||||
EBIT | 1.5 | 0.8 | 1.9 | 1.4 | 1.7 | 2.0 | 12% | -51% | -3% | ||||
Margin on Sales | 5% | 3% | 7% | 5% | 6% | 6% | |||||||
Net Income | 1.0 | 0.5 | 1.2 | 0.8 | 1.1 | 1.3 | 21% | -58% | -2% | ||||
Net (Debt) Cash | 6.4 | 9.7 | 12.4 | 4.2 | 6.9 | 10.5 | 51% | 40% | 19% |
Source: EnVent Research
5
Financial projections
Consolidated Profit and Loss
€m | 2022 | 2023 | 2024E | 2025E | 2026E | |
Sales | 29.8 | 29.8 | 26.5 | 29.5 | 31.0 | |
Other income | 0.8 | 2.5 | 0.5 | 0.5 | 0.5 | |
Revenues | 30.6 | 32.3 | 27.0 | 30.0 | 31.5 | |
YoY % | 9.4% | 5.3% | -16.3% | 11.2% | 4.9% | |
Cost of sales | (14.3) | (17.5) | (15.0) | (14.9) | (15.6) | |
Trade margin | 16.4 | 14.8 | 12.0 | 15.1 | 15.9 | |
Margin on Sales | 54.8% | 49.5% | 45.4% | 51.3% | 51.4% | |
Personnel | (5.6) | (6.5) | (5.6) | (6.4) | (6.5) | |
Retail cost | (2.3) | (1.8) | (1.1) | (2.0) | (1.9) | |
Store margin before lease | 8.4 | 6.4 | 5.4 | 6.8 | 7.6 | |
Margin on Sales | 28.3% | 21.6% | 20.4% | 23.0% | 24.5% | |
Services | (0.9) | (1.1) | (0.9) | (1.1) | (1.1) | |
Other operating costs | (0.2) | (0.4) | (0.3) | (0.4) | (0.2) | |
SG&A | (1.2) | (1.5) | (1.3) | (1.5) | (1.4) | |
EBITDA | 7.3 | 4.9 | 4.1 | 5.3 | 6.2 | |
Margin on Sales | 24.4% | 16.5% | 15.5% | 18.0% | 20.0% | |
Retail leases | (1.8) | (2.5) | (2.6) | (2.7) | (2.8) | |
D&A | (0.5) | (0.9) | (0.7) | (0.7) | (0.8) | |
EBIT | 5.0 | 1.5 | 0.8 | 1.9 | 2.6 | |
Margin on Sales | 16.8% | 5.1% | 3.2% | 6.6% | 8.5% | |
Interest | (0.4) | 0.0 | (0.2) | (0.2) | (0.2) | |
EBT | 4.6 | 1.5 | 0.6 | 1.7 | 2.4 | |
Margin | 15.0% | 4.8% | 2.4% | 5.8% | 7.7% | |
Income taxes | (1.1) | (0.6) | (0.2) | (0.5) | (0.7) | |
Net Income (Loss) | 3.5 | 1.0 | 0.5 | 1.2 | 1.7 | |
Margin | 11.4% | 3.0% | 1.7% | 4.2% | 5.5% | |
Source: Company data 2022-23A, EnVent Research 2024-26E |
Consolidated Balance Sheet
€m | 2022 | 2023 | 2024E | 2025E | 2026E |
Inventory | 13.9 | 12.3 | 11.3 | 12.1 | 12.3 |
Trade receivables | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 |
Trade payables | (6.2) | (2.9) | (2.9) | (3.1) | (3.1) |
Trade Working Capital | 8.1 | 9.7 | 8.7 | 9.5 | 9.6 |
Other assets (liabilities) | (0.3) | (0.1) | (0.1) | (0.1) | (0.1) |
Net Working Capital | 7.8 | 9.5 | 8.6 | 9.3 | 9.4 |
Intangible assets | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Retail leases - Right of use | 8.9 | 7.6 | 5.3 | 3.1 | 0.8 |
Property, plant and equipment | 1.9 | 2.2 | 2.3 | 2.4 | 2.5 |
Non-current assets | 10.8 | 9.8 | 7.7 | 5.6 | 3.3 |
Provisions | (1.0) | (1.3) | (1.1) | (1.3) | (1.3) |
Net Invested Capital | 17.5 | 18.0 | 15.2 | 13.6 | 11.4 |
Net Debt (Cash) | (6.9) | (6.4) | (9.7) | (12.4) | (16.4) |
Equity | 24.4 | 24.4 | 24.8 | 26.1 | 27.8 |
Sources | 17.5 | 18.0 | 15.2 | 13.6 | 11.4 |
Source: Company data 2022-23A, EnVent Research 2024-26E
6
Consolidated Cash Flow
€m | 2022 | 2023 | 2024E | 2025E | 2026E | |
EBIT | 5.0 | 1.5 | 0.8 | 1.9 | 2.6 | |
Current taxes | (1.1) | (0.6) | (0.2) | (0.5) | (0.7) | |
D&A | 2.3 | 3.4 | 3.3 | 3.4 | 3.6 | |
Provisions | 0.1 | 0.3 | (0.2) | 0.2 | 0.0 | |
Cash flow from P&L operations | 6.2 | 4.6 | 3.7 | 5.0 | 5.5 | |
Trade Working Capital | (2.8) | (1.6) | 1.0 | (0.8) | (0.1) | |
Other assets and liabilities | (0.5) | (0.2) | (0.0) | 0.0 | 0.0 | |
Capex / disposal | (1.0) | (1.2) | (0.8) | (0.8) | (0.8) | |
Retail leases - Right of use | (4.0) | (1.2) | (0.4) | (0.4) | (0.5) | |
Operating cash flow after WC and capex | (2.1) | 0.4 | 3.5 | 3.0 | 4.2 | |
Interest | (0.4) | 0.0 | (0.2) | (0.2) | (0.2) | |
Dividends | (2.8) | (0.9) | 0.0 | 0.0 | 0.0 | |
Change in equity | 0.0 | (0.1) | 0.0 | 0.0 | 0.0 | |
Net cash flow | (5.2) | (0.5) | 3.3 | 2.8 | 4.0 | |
Net (Debt) Cash - Beginning | 12.1 | 6.9 | 6.4 | 9.7 | 12.4 | |
Net (Debt) Cash - End | 6.9 | 6.4 | 9.7 | 12.4 | 16.4 | |
Change in Net (Debt) Cash | (5.2) | (0.5) | 3.3 | 2.8 | 4.0 | |
Source: Company data 2022-23A, EnVent Research 2024-26E |
Ratio analysis
KPIs | 2022 | 2023 | 2024E | 2025E | 2026E |
ROE | 14% | 4% | 2% | 5% | 6% |
ROS (EBIT/Revenues) | 16% | 5% | 3% | 6% | 8% |
DSO | 4 | 3 | 4 | 4 | 4 |
DPO | 105 | 41 | 50 | 50 | 50 |
DOI | 170 | 151 | 155 | 150 | 145 |
TWC/Sales | 27% | 33% | 33% | 32% | 31% |
NWC/Revenues | 25% | 30% | 32% | 31% | 30% |
Net Debt/EBITDA | cash | cash | cash | cash | cash |
Net Debt/Equity | cash | cash | cash | cash | cash |
Net Debt/(Net Debt+Equity) | cash | cash | cash | cash | cash |
Cash flow from P&L operations/EBITDA | 86% | 94% | 91% | 94% | 89% |
FCF/EBITDA | -28% | 9% | 85% | 56% | 67% |
Source: Company data 2022-23A, EnVent Research 2024-26E
Valuation
We have updated our Take Off valuation through the Discounted Cash Flows and market multiples methods.
Discounted Cash Flows
Updated assumptions:
-
Risk free rate: 3.3% (Italian 10-year government bonds interest rate - last 30
days average. Source: Bloomberg, April 2024) - Market return: 11.9% (last 30 days average. Source: Bloomberg, April 2024)
- Market risk premium: 8.6%
7
- Beta: 1.2 (judgmental)
- Cost of equity: 13.6%
- Cost of debt: 5.0%
- Tax rate: 24% (IRES)
- 40% debt/(debt + equity) as target capital structure
- WACC 9.7%, according to above data
- Perpetual growth rate after explicit projections (G): 2.5%
- Terminal Value assumes a 8.5% EBITDA margin
DCF Valuation
€m | 2023 | 2024E | 2025E | 2026E | Perpetuity |
Revenues | 32.3 | 27.0 | 30.0 | 31.5 | 32.3 |
EBIT | 1.5 | 0.8 | 1.9 | 2.6 | 2.7 |
Margin on Sales | 5.1% | 3.2% | 6.6% | 8.5% | 8.5% |
Taxes | (0.4) | (0.2) | (0.5) | (0.7) | (0.8) |
NOPAT | 1.1 | 0.6 | 1.4 | 1.9 | 2.0 |
D&A | 0.9 | 0.7 | 0.7 | 0.8 | 0.8 |
Provisions | 0.3 | (0.2) | 0.2 | 0.0 | 0.0 |
Cash flow from operations | 2.2 | 1.1 | 2.3 | 2.7 | 2.8 |
Trade Working Capital | (1.6) | 1.0 | (0.8) | (0.1) | (0.2) |
Other assets and liabilities | (0.2) | (0.0) | 0.0 | 0.0 | 0.0 |
Capex | (1.2) | (0.8) | (0.8) | (0.8) | (0.8) |
Retail leases - Right of use | (1.2) | (0.4) | (0.4) | (0.5) | 0.0 |
Yearly unlevered free cash flow | (2.0) | 0.8 | 0.3 | 1.3 | 1.7 |
Free Cash Flow to be discounted | 0.8 | 0.3 | 1.3 | 1.7 | |
WACC | 9.7% | ||||
Long-term growth (G) | 2.5% |
Discounted Cash Flows | 0.8 | 0.2 | 1.0 | |
Sum of Discounted Cash Flows | 2.0 | |||
Terminal Value | ||||
Discounted TV | 18.4 | |||
Enterprise Value | 20.4 | ||||
Net cash as of 31/12/23 | 6.4 | ||||
Equity Value | 26.7 | ||||
DCF - Implied multiples | 2023 | 2024E | 2025E | 2026E | |
EV/Revenues | 0.6x | 0.8x | 0.7x | 0.6x | |
EV/EBITDA Adj | 8.5x | 13.5x | 7.6x | 6.0x | |
EV/EBIT | 13.3x | 24.0x | 10.5x | 7.7x | |
P/E | 27.4x | 58.5x | 21.4x | 15.3x | |
Discount of current market price vs DCF | -74% | ||||
Current market price - Implied multiples | 2023 | 2024E | 2025E | 2026E | |
EV/Revenues | 0.2x | 0.2x | 0.2x | 0.2x | |
EV/EBITDA Adj | 2.2x | 3.5x | 2.0x | 1.6x | |
EV/EBIT | 3.5x | 6.3x | 2.7x | 2.0x | |
P/E | 12.0x | 25.6x | 9.4x | 6.7x |
Source: EnVent Research
24.2
8
Market multiples
Company | EV/REVENUES | ||
2023 | 2024E | 2025E | |
TJX | 2.2x | 2.1x | 2.0x |
Ross Stores | 2.5x | 2.3x | 2.2x |
Burlington Stores | 1.8x | 1.6x | 1.4x |
Inditex | 3.6x | 3.8x | 3.6x |
H&M | 1.5x | 1.5x | 1.4x |
Fast Retailing (Uniqlo) | 3.7x | 4.0x | 3.6x |
Gap | 0.8x | 0.8x | 0.8x |
OVS | 1.1x | 1.2x | 1.1x |
Monnalisa | 0.9x | 0.7x | 0.7x |
Giglio.com | 0.4x | 0.2x | 0.2x |
EV/EBITDA
2023 | 2024E | 2025E |
19.5x | 17.3x | 15.9x |
19.7x | 17.4x | 15.6x |
24.6x | 17.9x | 14.6x |
17.4x | 14.0x | 12.9x |
16.6x | 8.1x | 7.7x |
24.0x | 18.4x | 17.0x |
26.1x | 11.1x | 9.0x |
11.2x | 7.8x | 9.1x |
10.7x | 5.4x | 4.6x |
neg | 8.2x | 4.9x |
EV/EBIT | ||
2023 | 2024E | 2025E |
23.1x | 23.7x | 18.5x |
23.6x | 20.8x | 18.7x |
nm | 27.9x | 22.0x |
21.2x | 20.3x | 18.5x |
25.4x | 17.1x | 15.5x |
26.5x | 26.6x | 23.9x |
neg | 22.6x | 15.5x |
18.9x | 14.4x | 13.5x |
neg | neg | 36.5x |
neg | nm | 7.9x |
P/E | ||
2023 | 2024E | 2025E |
30.0x | 24.9x | 23.1x |
30.3x | 25.1x | 22.8x |
nm | 30.8x | 23.9x |
29.7x | 26.8x | 24.4x |
33.5x | 20.5x | 18.4x |
36.7x | na | na |
neg | 17.9x | 14.7x |
15.2x | 8.5x | 7.8x |
neg | neg | neg |
neg | nm | 13.5x |
Mean | 1.9x | 1.8x | 1.7x | 18.9x | 12.6x | 11.1x | 23.1x | 21.7x | 19.1x | 29.2x | 22.1x | 18.6x |
Median | 1.7x | 1.5x | 1.4x | 19.5x | 12.5x | 11.0x | 23.3x | 21.7x | 18.5x | 30.1x | 24.9x | 20.6x |
Take Off | 0.2x | 0.2x | 0.2x | 2.2x | 3.5x | 2.0x | 3.5x | 6.3x | 2.7x | 12.0x | 25.6x | 9.4x |
Source: EnVent Research on S&P Capital IQ, 23/04/2024
We have applied to our 2024-25 estimates the corresponding median multiples from the peer group.
Multiples application
€m
Take Off (€m) | Market | EV | Net cash as | Equity value | Equity value | ||
Multiples | of 31/12/23 | per share (€) | |||||
2024E | Sales | 26.5 | 1.5x | 40.5 | 6.4 | 46.9 | 3.00 |
2025E | Sales | 29.5 | 1.4x | 42.0 | 6.4 | 48.3 | 3.09 |
Mean | 41.2 | 47.6 | 3.05 | ||||
2024E | EBITDA Adj | 1.5 | 12.5x | 18.9 | 6.4 | 25.3 | 1.62 |
2025E | EBITDA Adj | 2.7 | 11.0x | 29.3 | 6.4 | 35.6 | 2.28 |
Mean | 24.1 | 30.5 | 1.95 | ||||
2024E | EBIT | 0.8 | 21.7x | 18.4 | 6.4 | 24.8 | 1.59 |
2025E | EBIT | 1.9 | 18.5x | 36.1 | 6.4 | 42.4 | 2.72 |
Mean | 27.2 | 33.6 | 2.15 | ||||
2024E | Earnings | 0.5 | 24.9x | 11.4 | 0.73 | ||
2025E | Earnings | 1.2 | 20.6x | 25.7 | 1.65 | ||
Mean | 18.6 | 1.19 |
Source: EnVent Research
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Take Off S.p.A. published this content on 23 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 April 2024 09:39:03 UTC.
