EQUITY RESEARCH
TAKE OFF
INITIATION OF COVERAGE
Fasten your seat belts
Fashion becomes accessible to everyone
Be ready to Take Off !
Take off is the first fashion boutique at outlet prices. It offers the experience of the best fashion brands at the best price of the market. The group operates through its two divisions: Take Off, dedicated to adult's clothing, footwear and accessories, sells own and international fashion brands at outlet price; Over, specialised in children's clothing served through a widespread affiliates network.
Crisis Proof business model
In a current disrupted market, when consumption levels are at an all-time low and consumers became more price sensitive, Take Off stands out, offering the best price on the market. It is unique business model is based on an innovative discount method, which gives the customer the sensation of the "deal". Take Off has developed the "divided by" method, which applies a discount on a progressive basis. The product is displayed starting at the retail price "divided by 2" until it reaches "divided by 10". The splitting mechanism allows the customer to easily remark the extent of the discount and have a greater perception of the advantage offered.
Best in Class Profitability
Take Off's success also lies in a unique purchasing policy and an active inventory management, guaranteeing to the group the highest margins in the market. In 2021, Take Off reached an EBITDA margin of 36.1%, higher than both the largest "classic retailers", H&M, Inditex, FAST Retailing and the largest Off-price fashion players such as TJX, Ross, Burlington, Nordstrom.
Attractive Valuation
Supported by a positive Off-price fashion market outlook, Take Off should be able to generate CAGR revenue growth of about 19% over the 21-26E period.
From our analysis we have derived a valuation of €7.6/share, resulting in a EV/Sales 2022E of 3.2x, EV/EBITDA 2022E of 10.9x and P/E 2022E of 20.7x. We are strongly convinced the company current valuation is below its real intrinsic value. Based on this high upside potential, we are initiating our coverage with a Buy recommendation.
Document produced on
5 September 2022 at 5:31pm CET
Document published on
6 September 2022 at 8:52am CET
BUY, TP 7.6€
Up/Downside: 82%
Key data
Price (€) | 4.2 |
Industry | Retailers |
Ticker | TKO-IT |
Shares Out (m) | 15.625 |
Market Cap (m €) | 65.6 |
Next event | 1-22 - 30 September 2022 |
Ownership (%)
Summit S.p.A. | 64.1 | ||
A. Piccarreta | 5.5 | ||
G. L. Zanardi | 1.8 | ||
Free float | 28.5 | ||
EPS (€) | 12/22e | 12/23e | 12/24e |
Estimates | 0.37 | 0.51 | 0.60 |
Change vs previous | na | na | na |
estimates (%) | |||
Performance (%) | 1D | 1M | YTD |
Price Perf | -4.5 | -4.5 | -3.3 |
Rel FTSE Italy | -4.5 | -1.8 | 21.1 |
6.0 | 180 | ||||||||||||||||||
5.5 | 170 | ||||||||||||||||||
5.0 | 160 | ||||||||||||||||||
4.5 | 150 | ||||||||||||||||||
4.0 | 140 | ||||||||||||||||||
3.5 | 130 | ||||||||||||||||||
3.0 | 120 | ||||||||||||||||||
21 | 21 | 22 | 22 | 22 | 22 | 22 | 22 | 22 | 22 | ||||||||||
Nov | - | Dec | - | Jan | - | Feb | - | Mar | - | Apr | - | May | - | Jun | - | Jul | - | Aug | - |
TAKE OFF | Rel. to FTSE Italy |
TP ICAP Midcap Estimates | 12/21 | 12/22e | 12/23e | 12/24e | Valuation Ratio | 12/22e | 12/23e | 12/24e | Consensus FactSet - Analysts:1 | 12/22e | 12/23e | 12/24e | ||
Sales (m €) | 26.4 | 33.4 | 43.1 | 48.5 | EV/Sales | 1.5 | 1.1 | 0.9 | Sales | 35.0 | 44.8 | 54.1 | ||
Current Op Inc (m €) | 7.7 | 7.9 | 10.8 | 12.6 | EV/EBITDA | 5.2 | 3.8 | 3.0 | EBIT | 8.0 | 10.7 | 13.4 | ||
Current op. Margin (%) | 29.1 | 23.6 | 25.1 | 26.0 | EV/EBIT | 6.5 | 4.5 | 3.5 | Net income | 6.1 | 7.6 | 9.5 | ||
EPS (€) | 0.36 | 0.37 | 0.51 | 0.60 | PE | 11.4 | 8.2 | 7.0 | ||||||
DPS (€) | 0.18 | 0.18 | 0.26 | 0.30 | ||||||||||
Yield (%) | 4.3 | 4.4 | 6.1 | 7.1 | ||||||||||
FCF (m €) | 6.1 | 5.0 | 6.8 | 8.6 |
Analyst Simone Mieli simone.mieli@tpicap.com 33149241833
TP ICAP Classification: Public
EQUITY RESEARCH | TP ICAP MIDCAP | 42 rue Washington, 75008 Paris | More on www.midcapp.com
Document downloaded by Simone Mieli (TP ICAP (EUROPE) SA)
Document published on | |
6 September 2022 at 8:52am CET | |
A PATENTED DISCOUNT MODEL | 7 |
A PERPETUAL MARK-UP | 8 |
BEST IN CLASS IN TERMS OF PROFITABILITY | 10 |
VALUE CREATION NEEDS A GOOD RECIPE | 11 |
A STORE CENTRED EXPERIENCE | 13 |
STATE OF FASHION | 16 |
OFF-PRICE MARKET IS MASTERING FASHION | 20 |
FILLING A VACANT POSITION GIVES THE LEAD | 22 |
CASH IS KING | 24 |
BUSINESS PLAN | 28 |
OUTLOOK | 29 |
VALUATION: WHAT ARE YOU WAITING FOR? | 33 |
SHARE PRICE AND WARRANTS | 37 |
ANNEXES | 38 |
FINANCIAL DATA | 42 |
TP ICAP Classification: Public
EQUITY RESEARCH | TP ICAP MIDCAP | 42 rue Washington, 75008 Paris | More on www.midcapp.com2 Document downloaded by Simone Mieli (TP ICAP (EUROPE)SA)
Document published on
6 September 2022 at 8:52am CET
Description
Take Off S.p.A. is an Italian company, based in Monopoli (Bari), active in the fashion retail sector. It operates through its two divisions: Take Off, dedicated to adult's clothing, footwear and accessories sold at outlet price; Over, specialised in children's clothing served through a widespread affiliates network. It has a consolidated presence in the Italian territory, with 170 stores, of which 131 in affiliation. Its success lies in an innovative discount method, a flexible cost structure and active inventory management, leading to the highest margins in the market.
SWOT Analysis
Strengths
- Highest margins in the market
- Solid cash positive financial position
- Flexible and efficient cost structure
- Active inventory management leading to no unsold and constant mark-up
Opportunities
- Positive Off-price market outlook
- High expansion potential of the retail network
- Consumption level reduction leads consumer choose best value for money
Weaknesses
- Opportunistic purchasing strategy
- Small size compared to off price sector players
- Still low brand awareness
Threats
- Market disruption
- Covid-19new waves causing activity shutdowns
TP ICAP Classification: Public
EQUITY RESEARCH | TP ICAP MIDCAP | 42 rue Washington, 75008 Paris | More on www.midcapp.com3 Document downloaded by Simone Mieli (TP ICAP (EUROPE)SA)
Overview
Shareholders
Floating
28%
Summit S.p.A.
64%
G. L. Zanardi 2%
A. Piccarreta 6%
2021 Revenue breakdown by business unit
Over 24.6%
Take Off
75.4%
Take Off EBITDA evolution
7.0 | ||
35% | ||
5.0 | 22% | |
3.2 | ||
22% | ||
FY19 | FY20 | FY21 |
Take Off | % |
Document published on
6 September 2022 at 8:52am CET
Revenues and EBITDA evolution
32.1 | 36.1% | |
30.7% | 26.4 | |
21.2 | ||
19.3% | ||
6.5 | 9.5 | |
6.2 | ||
FY19 | FY20 | FY21 |
Sales | EBITDA | EBITDA Margin |
Revenue evolution by segment (€M)
9.3 | 21.2 | 6.5 |
6.7 | ||
22.8 | 14.5 | 19.9 |
FY19 | FY20 | FY21 |
Take Off | Over |
Over EBITDA evolution
3.3 | ||
49% | 2.5 | |
38% | ||
1.2 | ||
13% | ||
FY19 | FY20 | FY21 |
Over | % |
Source: Company, TP ICAP Midcap
TP ICAP Classification: Public
EQUITY RESEARCH | TP ICAP MIDCAP | 42 rue Washington, 75008 Paris | More on www.midcapp.com4 Document downloaded by Simone Mieli (TP ICAP (EUROPE)SA)
Document published on
6 September 2022 at 8:52am CET
Fashion accessible to everyone
Take off is the first fashion boutique at outlet prices. It offers the experience of the best fashion brands at the best price of the market.
The group operates through its two divisions: Take Off, dedicated to adult's clothing, footwear and accessories proposed with the outlet format; Over, specialised in children's clothing served through a widespread affiliates network.
Take off (75% of total sales in FY21)
It is the representative division of the group. It offers adult's fashion at unbeatable price, through the outlet format. It boasts a peculiar business model based on discount and an innovative inventory management to give the best value for money in the market. It has a consolidated presence all over Italy with a retail network of 46 stores, of which 39 direct PoS and 7 affiliated.
Take off proposition
Source: Company
It offers a wide range of solutions under its own and third-party brands, including the best international fashion brands (e.g. Prada, Burberry, Givenchy, Fendi, Valentino).
It has a portfolio of 7 own brands, well diversified in terms of style, price, in order to reach different target segments.
Take off own brand portfolio
HIGH PRICE
RANGEAdult
MID PRICE
RANGE
LOW PRICE
RANGE
Young
Source: Company, TP ICAP Midcap
TP ICAP Classification: Public
EQUITY RESEARCH | TP ICAP MIDCAP | 42 rue Washington, 75008 Paris | More on www.midcapp.com5 Document downloaded by Simone Mieli (TP ICAP (EUROPE)SA)
Questo è un estratto del contenuto originale. Per continuare a leggere, accedi al documento originale.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Take Off S.p.A. published this content on 06 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 September 2022 10:29:04 UTC.