Catana Group analysis + Special article 1Q23 Superyachts Earnings
Sunday 14th May 2023
This week, all the superyacht companies that we have analyzed on our website in recent months have reported their earnings (The Italian Sea Group, Sanlorenzo, Ferretti). As a result, we have published a special article analyzing the situation of each company, including their earnings, financials, backlog, order intake, strategy changes….
Additionally, we have analyzed the results of Good Times Restaurants and plan to follow up with a new interview with their CEO in the next two weeks. We also highlight the upward revision of guidance from Vysarn Ltd, a company we analyzed in January.
As our main article, we have focused on the analysis of Catana Group (talking also about its peers Beneteau and Fountaine Pajot, plus some American companies such as Malibu Boats and Mastercraft Boat Holdings).
Before moving on to the articles, as you already know, last week we launched our premium service for retail investors to complement our B2B side (mainly aimed at Fund Managers and Family Offices). To promote its launch, and until Monday, May 22, we are offering a 10% discount on the price of the 2023 and annual subscriptions, with the code Welcome10 .
The 2023 subscription option will close in June. Additionally, we believe it makes sense to reward the confidence of those who support us from the beginning. Therefore, for subscribers in this first month, we will maintain the monthly price forever.
Catana Groupe analysis
What is Catana Group?
Catana Group is a family-owned company that specializes in the construction of catamarans, but also operates a marina on the French Riviera (Saint Mandrier). This small cap company, which held its IPO in 2014 and has a market capitalization of €225 million, is 30% owned by the Poncin family (holding 44% of voting rights).
Catana is currently the second largest catamaran manufacturer in the world. The company offers two distinct catamaran lines: the premium Catana and the versatile Bali. Since its launch in 2014, BALI has been the main driver of the company's growth, which has grown at a CAGR of 22% in last 5 years. The price of their boats averages at €0.6 million for the BALI range and 2 million for the Catana range, which makes their main target high net worth individuals (HNWIs), not ultra-high net worth individuals (UHNWIs) as opposed to companies such as The Italian Sea Group, Sanlorenzo or Ferretti (theses available on our website). Therefore, we consider Catana having a more cyclical aspect than the Italian ones. In fact, 80% of Catana's customers are charter companies reliant on tourism, (the interesting point is these charter companies have to renew their fleet every 5-6 years on an ongoing basis). France, Turkey and USA are its 3 main markets (16%, 15% and 14% of its sales respectively)
Within the growth of the yacht industry over the last decade, catamarans have especially outpaced monohulls. This trend has stabilized within the industry due to the advantages catamarans offer over their counterparts, such as greater stability, speed, and living space. It is estimated that catamarans will continue growing at a CAGR close to 6% (depending on the study) over the next decade.
This is a niche industry with very few specialized players. Most manufacturers, like Beneteau / Lagoon, Fountaine Pajot, Leopard and Outremer, diversify their production (contrariary to Catana that it is a catamaran Pure player). This is where the impact of the BALI brand (more affordable) has become significant. Since its launch in 2014, BALI has grown from selling 15 catamarans a year to 250 this year. Catana has been investing in facilities in the last years and currently has the capacity to produce around 300 yachts per year. To achieve this, the company operates three production sites: Canet-en-Roussillon in the South of France, which is the company's historic headquarters; Marans, located near La Rochelle on the Atlantic coast; and El Haouaria, situated in Cap Bon, Tunisia (50% ownership).
Also noteworthy to highlight that the payment structure for Catana Group's different yacht models, Catana and Bali, differs significantly. For the Catana line, a more premium offering, customers typically make three to four payments of similar amounts throughout the process. The first payment is made as a deposit prior to the start of production, with subsequent payments disbursed at various stages, and the final payment made upon delivery. On the other hand, for the Bali line, which targets a broader market, the payment structure is simpler: customers make an initial payment of 10% of the total cost as a reservation fee, with the balance paid upon delivery. As for delivery timelines, once an order is placed, the estimated delivery time is around 1.5 years for Catana and around 4-5 months for Bali.
Why do we believe that Catana could be an interesting idea?
Growth of Catamaran Industry and Catana's Dominant Market Position: Catana Group operates in the catamaran industry, a niche market witnessing significant expansion. Over the past two decades, catamarans have grown from making up a mere 5% of charter boat portfolios to over 50% today, with expectations of continuing this growth trajectory at an annual rate of 6% over the next decade. In this booming sector, Catana has successfully carved out a dominant position. The company has not only emerged as the second most important brand in the industry, largely due to its popular and more accessible Bali brand, but it has also experienced significant revenue growth as we will see in the finance section.
Success of the Bali Brand: The Bali brand, strategically designed to fill a gap in the market, offers an open concept design with a solid bow, quality, and reliability - all attributes that charters and casual users were actively seeking but couldn't find elsewhere. While competitors scramble to replicate Bali's successful strategy, many continue to focus on the higher-end segment, leaving Bali as a dominant force in its targeted market segment. Furthermore, Catana Group's cost advantage, largely due to its in-house production in Tunisia, allows the company to price Bali catamarans competitively.