1. Profile
    1. Business
      1. Help people adopt a Wellness lifestyle whenever and wherever the are
      2. Mision: To spread wellness lyfestyle. Wellness benefits: improving people's quality of life, reducing governenmt expenditure healthcare, boosting corporate productivity
      3. Vision: To be wellness solutions leading. Providing customized solutions for consumers and professional operators (products, services, content..) combining technology and sport
      4. Values: See Wellness Lifestyle Pyramid
    2. History: Nerio Alessandri run Technogym in 1983, designed and built his first machine in a garage. End of 1980's launched partnerships in football (AC Milan) and Formula One, becoming the official supplier of athletic equipment. In 2002 launched the wellness TV, first screen integrated into fitness equipment. 2012 launched My wellness cloud: first platform in the fitness sector
    3. Headquarters: Cesena Italia
    4. Sales Scope: Sales in Europe consolidated, growth double digit in Asia and North America
    5. Channels: Strategy omni-channel: Retail, Filed sales, wholesale (USA) and inside sales
    6. Figures
      1. Revenue: 634 m€ in 2018
      2. Employees: 2133 employees growth 10% 2017
      3. ROE: 45%, but ROE /equity value: 5%
      4. Growth: 8% revenues last five years
      5. Dividends: 0,18€/share doubling last year paid fully CFO
    7. Shareholders: 51% Nerio Alessandri founder
  2. Segments
    1. 4 segments: Fitness and Wellness clubs, Hospitality and Residential, Health, Corporate&Performance, Home and consumer
  3. How it makes money?
    1. Canvas
      1. Customers: 4 kind of customers: 1- Gym (franchises clubs) big segment in volume. 2- Hospitality & Residential: Hotels, big apartment buidings, cruise ships. 3- Corporates: Examples: Santander, Facebook, Google...4- Home and consumer: Private consumers
      2. Channels: Field sales (Technogym sales personnel and sales agents); Inside sales (Telemarketing and online sales); Retail (7 directly-flagship stores); Wholesale (channel used go into new markets)
      3. Cost structure: Gross margin: 60%; Personnel expense: 20%; Amortization: 4%; Finance expense: 1%; Fixed costs: 25%.
      4. Revenues: Regional distribution: Europe: 50%; North America: 7%; APAC: 15%; Channel distribution: Field sales: 74%; Wholesale: 20%; Retail and Inside sales: 6%; Revenues/sale products and services: 85%; Revenues / after sales: 15%
    2. Marketing: Participation in sports industry, taking part in numerous reference events in sectors like fitness, sports, rehabilitation, design and technology: Olimpic games...
    3. Process Overview: Manufacture in Italy and Poland equipment fitness high brand, price is about 30% higher than average. Sell through sales agent and wholesale for hotels, gyms and corporates. Sell through the online and retail channel for private customers
    4. Ratios: ROCE average last 5 years: 35%; ROE: average last 5 years: 50%; Operating margin: average last 5y: 14%
    5. Competitors: Many competitors very fragmented. Most competitors are usa companies: Brunswick: 1000M (MO: 2%) sale KPS Capital Partners; Johnson health tech: 600 M$; Amer Sports: 400M$ (MO:3%); Nautilus: 450M$ (low range). Market global USA 10 B$. Technogym just sell 70 M€ in USA
    6. Moats: There are 2 moats: 1- Brand, Neri is obsessed quality of brand, not just an equipment manufacturer, more value added, online personal training, experience consumer. 2- R&D: Employ 200 persons (10%) in R%D areas and R&D expense: 15 M€ yearly (2% revenues)
    7. Dividends: It started to pay dividend in 2016: 0,06€ (2016), 0,09€ (2017), 0,18€ (2018)
  4. Will it make it in the future?
    1. Growth
      1. Geographically: TGYM started in 2017 a plan to increase its presence in North America, in 2018 its market share in USA is 0,07%
      2. New Products: Its focus is working multimedia services, apps personnel training and wellness
      3. Favorable Trends: It a macrotrend the health.
    2. What a competitor should do for stealing it quota: In USA there are a startup called Peloton, in 2019 want IPO in USA. It manufacture fitness equipment home (good quality) and also a subscription of 39$ /month for training courses since the bike in home
  5. Management
    1. Founder Neri Alessandri is the CEO, owns 50% of the company, it a crazy with the expansion of wellness. SKIN IN THE GAME
  6. Rough Valuation
    1. PER 2019: 20; In a bad scenario 3 years forward: Price 7€, Good scenario 3 years forward; 14 €
  7. CONCLUSION
    1. +: Good investment but the buy price would be about :7€
    2. -: Right now the prize is 9€, expensive
  8. References
    1. Profile
      1. Wikipedia
      2. Investor Relations
      3. Reports
      4. Morningstar
      5. https://www.macrotrends.net/stocks/research
      6. https://www.dividend.com/
  9. Pending Tasks
    1. Improve Model