Piazza Affari gets fit! The Technogym IPO

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About Technogym

Technogym is a manufacturer of equipment for sports and training based in Cesena. In 1983, the Italian entrepreneur Nerio Alessandri, founded Technogym at age of 22. Mr. Alessandri began building exercise equipment in the garage of his home. Today, Technogym is the leader in wellness and fitness in Europe and the second player worldwide. It employs more than 2000 people and it has branches in U.S.A., Brazil, Japan, U.K., Germany, Benelux, France, Spain and Switzerland. The company enjoys a very well diversified client-base, including about 65,000 wellness centres and 200,000 households. There are no crucial clients generating more than 10% in revenues for the Group, therefore Technogym is able to keep a great bargaining power with its sales partners. Notwithstanding its size and its global reach, Technogym maintains many features of the typical Italian family business. The founder and majority shareholder Nerio Alessandri is the President and the CEO while his brother and partner in business covers the role of Vice President of the Group. In 2015 Technogym made €511.786m of revenues, 90% of which coming from exports in more than 100 countries. Net income has been continuously growing during the last years: from €1.554m in 2013 it reached €28.345m in 2015.

Technogym was chosen as Official Supplier of five editions of the Olympic Games: Sydney 2000, Athens 2004, Torino 2006, Beijing 2008 and London in 2012 and it will be exclusive official supplier for the Olympic Games Rio 2016. In addition, many famous sports clubs around the world have been collaborating with Technogym for years.

Technogym S.p.A.; market cap as of 07/05/2016: €759.600m

Technogym Performance

During the last years, the company has been growing fast increasing at the same time margins and net income, dramatically over performing its peers. First of all, Technogym delivers an outstanding ROE figure that in FY2015 surpassed the threshold of 65%. The average ROE in the industry is in the range of 7% to 10% and one of the best performers is Nautilus Inc. with a FY2015 ROE of 23.57%. Secondly, Technogym has been able to grow faster than competitors both in sales and in operating margins: the industry average sales growth in FY2015 has been 7.09% compared to the Technogym’s 10%. Moreover, the firm’s EBITDA margin of 16.90% largely outperformed the industry average of 10.72%. There is an extremely positive market sentiment for the company and analysts are forecasting long-term growth for Technogym supported by focused capital expenditures. Finally, fundamentals are extremely positive and there is room for further expansion and growth worldwide. Analysts at Mediobanca estimated an exponential growth in the upcoming 5 years for Technogym. Revenues are expected to grow at a constant rate of 6% per year finally reaching €688m in sales in 2020. EBITDA is expected to grow from €86.681m in 2015 to an amazing €143.2m in 2020. Net income is estimated to grow by 24% on a yearly basis.

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