The Thesis in Short

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The Thesis in Short

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The company I am going to discuss has the following key characteristics:

1. Operates in a cyclical industry - selling a commodity type product.

2. The product has some unique characteristics - inelastic in terms of demand. Cyclicality in price is caused by the supply side while the demand side is stable.

3. The company is following a disciplined approach of capital allocation - holding big net cash during distressed periods used for buying competitors.

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“From its inception in a barn of the Ain department to its international status, AKWEL has always remained true to its DNA: family-run, reliable, effective, innovative, simple and human. Our roots and the common sense that have guided us throughout our history led us to identify our mission early on: to be a trusted tier-one supplier for our customers and help them meet all their challenges. While it has evolved and adapted to the challenges of today and tomorrow, its fundamentals have remained unchanged.“

— MATHIEU COUTIER, Chairman of AKWEL

The Thesis in Short

Akwel makes plastic and metal parts for cars and trucks: cooling circuits, fuel lines, door hinges, locks. It is controlled by the Coutier family, which owns ~ 70% of it. It has just lost its biggest product line, and the shares have fallen accordingly.

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In the Name of God. Amen.
At the Rialto, under the protection of Saint Mark,
these accounts are opened for the trade
of bills of exchange, merchandise, and money,
with prudence, good faith, and just measure.
May every transaction increase reputation
more than gold, and trust more than profit.

When I invest and/or speculate with financial assets I follow one si…

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The Rathbone family traces to Gawsworth, Cheshire, where the first recorded William Rathbone was born in 1669. His son, William Rathbone II (1696–1746), left Gawsworth for the booming port of Liverpool before 1730, working first as a sawyer and establishing a timber business that became the family’s founding enterprise. The family became devout Quakers from 1731 onward, a faith that shaped generations of their social conscience.

From timber to global merchants

• William Rathbone III (1726–1789) expanded the timber trade into broader international merchanting, trading commodities like salt, iron, linen, tobacco, wheat, and rice.

• William Rathbone IV (1757–1809) pivoted the firm into cotton importing and is credited as the first merchant to bring slave-grown American cotton into Britain — even as he and his father were founding members of the Liverpool Society for the Abolition of the Slave Trade, a paradox historians still note given the family’s wealth ultimately rested on slave-produced commodities (Newnham College, lbhrg.com). In 1788 he took Greenbank House and its estate as the family’s country seat, which remained the Rathbone home until 1944.

• William Rathbone V (1787–1868) and his brother Richard formally founded Rathbone Brothers & Co. in 1824 together with James Powell, growing the firm into a major Liverpool trading house that by 1841 became the city’s principal agent for the East India Company, later trading in China tea, silk, and Brazilian coffee (clement-jones.com, PESTEL Analysis).

• William Rathbone VI (1819–1902), commemorated by a statue in Liverpool’s St John’s Gardens, used the family fortune for philanthropy — co-founding district nursing in 1859 and, with Florence Nightingale, opening the Liverpool Training School and Home for Nurses in 1862.

Beyond commerce, the Rathbones became one of Liverpool’s leading civic and reformist families across generations — active in education, healthcare, and social reform.

From merchant house to wealth manager

Financial difficulties by 1898 forced a restructuring, and in 1912 the firm abandoned trading altogether to focus on managing wealth — first for the Rathbone family, later for outside clients. It listed on the London Stock Exchange in 1988 after merging with Comprehensive Financial Services Ltd to become Rathbone Brothers plc, and rebranded as Rathbones Group plc on 1 December 2021 — today one of the UK’s largest wealth managers, still tracing its founding “establishment date” to a 1742 log book held in the University of Liverpool’s Special Collections.

Nowadays

Today, although no longer controlled by the founding family, Rathbones remains one of the rare financial institutions whose identity is still defined less by quarterly earnings than by nearly three centuries of accumulated reputation and trust. The evolution from a family-controlled merchant house to a publicly listed company did not fundamentally alter Rathbones' philosophy of stewardship. While the founding family has long since ceded ownership, the Board continues to measure success through a balanced framework that extends well beyond financial performance. Executive remuneration is linked not only to financial outcomes but also to client satisfaction, long-term net flows, culture, employee engagement and operational effectiveness. Rather than treating client trust as a by-product of earnings growth, Rathbones explicitly embeds it within the metrics by which the institution judges itself.

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

89% discretionary & managed accounts.

54% individual accounts (private clients + ISAs).

73% of AUM are from accounts > 1 million GBP.

53% from funds under management and advice (FUMA) are managed by the London office. 73% of FUMA are managed by offices from four cities in UK.

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

source:https://www.rathbones.com/sites/main/files/results_and_presentations/files/results-presentation-half-year-to-30-june-2026-rathbones-group.pdf

It is encouraging to see net flows of 0.2 billion in discretionary & managed accounts. This is the most important pillar for the group.

MOAT

Unlike Copart or Coloplast, Rathbones does not have a single overwhelming moat. Instead, it possesses a combination of reinforcing competitive advantages, each of which is moderate on its own but formidable together.

1. Trust and reputation (The primary moat)

This is the deepest moat.

People do not entrust millions of pounds to a wealth manager because it has the best mobile app. They do so because they believe the institution will still be worthy of trust decades from now.

Rathbones has advised families since 1742.

That history creates:

• credibility;

• confidence;

• intergenerational referrals;

• reputational capital.

It takes centuries to build and can disappear in a few years.

This is why the annual report repeatedly refers to “trusted relationships” and “long-term stewardship.”

The ledger itself has no value. The confidence placed in the ledger is everything.

2. Client switching costs

Changing wealth manager is psychologically difficult.

When a client changes a wealth manager it also often transfers:

• pension assets;

• family trusts;

• tax planning;

• charitable foundations;

• succession plans.

These relationships may have taken years to develop.

The financial cost of switching may be modest, but the emotional and practical costs can be high.

The moat is real but it is currently being tested — in 2025 gross outflows of 10.3% reflect adviser disruption from the IW&I integration, and the investment case rests on whether that normalizes or proves structural. In H1 2026 we can see net flows stabilizing.

3. Scale

Following the Investec Wealth integration,

Rathbones now manages approximately

£120 billion

making it one of Britain’s largest discretionary wealth managers.

Scale provides:

• compliance efficiency;

• technology investment;

• research capabilities;

• negotiating power;

• operating leverage.

However, this is not BlackRock-scale.

4. Brand

Among wealthy British families, Rathbones has a remarkably strong reputation. Outside Britain, far less so. Therefore, the brand is geographically concentrated.

5. Culture

This is underrated. The firm has spent nearly three centuries cultivating:

• prudence,

• discretion,

• fiduciary responsibility,

• conservative investing.

Culture becomes a competitive advantage because it influences:

• adviser behavior,

• client retention,

• risk management,

• hiring.

It is difficult to copy.

An institutional trust moat built upon nearly three centuries of reputation, reinforced by high client switching costs, deeply embedded advisory relationships, a culture of fiduciary stewardship, and the scale to deliver sophisticated wealth management without sacrificing a highly personal service model.

This is not the strongest moat in my universe — Copart's network effects and Coloplast's clinical switching costs are probably deeper — but it is an unusually durable moat because it rests on something competitors cannot quickly acquire: time. A rival can hire advisers, launch a platform or cut fees, but it cannot manufacture 280 years of accumulated trust overnight.

EXPECTED RETURNS

source: own calculations

I expect annual returns in the 14.5%-21% range. To be on the conservative side my expectations are around 15% returns annually. Those expected returns are quantitative, in the article below I will discuss the risks, the precedent transactions and the peers which will add another angle in the valuation process. The assumptions behind those expected returns are below:

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I planned to post this as a note but at the end decided it will be most appropriate to share as a free article.

One of the most value added exercises is to compare your potential buy with a competitor from the same industry. This can give you a competitive insight of the industry and the company.

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I. History and Creation

The scrapyard, 1982–1994

Copart was incorporated as a California corporation in 1982 and began as a single salvage yard in Vallejo, California, founded by Willis J. Johnson (source: Copart 8-K, 14 June 2007; Copart proxy statements). Johnson was not a financier. He was an auto dismantler — he had co-founded U-Pull-It, Inc., a self-…

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We have too much news and too little history. Every morning delivers a fresh verdict — a rate decision, an inflation print, an index at a record — and every evening it is revised or forgotten. Fernand Braudel had a word for this layer of experience: l’écume, the foam. It is what the sea throws up at the surface, and it tells you almost nothing about the…

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Coloplast A/S — Origins, Development, and Ownership

A nurse’s necessity (1953–1957)

The house was born not of capital but of need. In 1953 Thora Sørensen, a Dane of thirty-two, underwent an ostomy operation following colorectal cancer. The devices of the day — rubber bags, tape, glass and metal capsules — leaked, and the fear of public embarrassment confined her to her home. Her sister, the home-care nurse Elise Sørensen (1903–1977), resolved to end that confinement. Drawing on the new material of the age, plastic, she conceived the world’s first disposable, self-adhesive ostomy bag and, with a lawyer from the Danish Nurses’ Association, filed for a patent in 1954.

Manufacturers rebuffed her until she reached Aage Louis-Hansen, a civil engineer and plastics manufacturer. He at first declined; his wife, the nurse Johanne Louis-Hansen, persuaded him to reconsider. Together they combined her craft, his engineering, and Elise’s clinical insight into a working product — the first bags stitched by hand, with Thora among the earliest to test them. Roughly a thousand units went to hospitals to broad approval, and demand outran expectation. In 1957, Aage Louis-Hansen formally incorporated Coloplast in Humlebæk — the name fusing colo (colon) and plast (plastic). Within two years, the majority of production was exported.

From one product to five franchises (three grown, two acquired)

Coloplast did what durable custodial houses do: it compounded outward from a single irreplaceable product into adjacent necessities, each sharing the same clinical-relationship moat. Ostomy care was joined by continence care, then wound and skin care, interventional urology and voice and respiratory care — the five pillars that define the group. It listed on the Copenhagen Stock Exchange in 1983, converting a family workshop into a public company while the family retained voting command through a dual-class share structure. Manufacturing expanded beyond Denmark into Hungary, France, China, and the United States, and the products reached over one hundred countries.

Acquisition has been used sparingly and deliberately, and the record repays close reading — for the two large deals were not, as is commonly assumed, of the same kind. The urology division of Mentor Corporation, bought in 2006 for DKK 2,888m (USD 463m), built the interventional-urology pillar from nothing, establishing four franchises at a stroke — women's health, men's health, brachytherapy, and disposable surgical urology. Atos Medical (November 2021), the laryngectomy leader with more than 80% market share, was the largest acquisition in Coloplast's history at an enterprise value of EUR 2,155m (~DKK 16bn), structured as a 100% cash payment financed through debt. Kerecis (2023), the fish-skin biologics platform for US wound care, came at up to USD 1.3bn (~DKK 8.9bn) — but was funded through an equity capital raise of around DKK 9bn, diluting shareholders rather than levering the balance sheet. That distinction is the whole point: the net interest-bearing debt of DKK 21,692m and gearing of 2.4× EBITDA at FY 2024/25 are overwhelmingly Atos's legacy, not Kerecis's. In December 2024 the group pruned in the other direction, divesting its Skin Care portfolio (signed and completed 3 December 2024, terms undisclosed) — a low-margin business generating around DKK 400m in FY 2023/24 at profitability well below the group — to concentrate on the higher-return chronic-care core. The telling fact is not merely that Coloplast carries debt where the framework prizes net cash, but that at 2.4× it sits above management's own stated target band of 1.5× NIBD/EBITDA — the clearest single measure of how far the Atos bill still weighs on an otherwise fortress-quality franchise.

The house today

Coloplast now generates DKK 27,874m in revenue (FY 2024/25), earns a 28% EBIT margin before special items, and holds the global first rank in both ostomy care (35–40% share) and continence care (40–45% share). Seventy years on, it remains what it began as: a maker of intimate, clinically-fitted necessities, sold largely through reimbursement, defended by switching costs and relationships that do not transfer easily to a rival.

Ownership structure as of 30.09.2025:

source: annual report 2025

Who is Niels Peter Louis-Hansen?

Niels Peter Louis-Hansen, born 25 October 1947, is a Danish billionaire businessman. He is the son of the founders, Aage and Johanne Louis-Hansen. He is famously private and media-shy, and has spent nearly six decades bound to a single company.

How he came to it. This was inheritance under hard circumstances, not appointment. He became a board member of Coloplast when his father died in 1966 — while still a teenager — and the company was carried on by his mother, who remained active into the early 1970s. He took a commerce degree and grew into the role of deputy chairman as the firm went public in 1983 and became a multinational.

He chairs the foundation named for his late parents, which funds cultural and scientific work and itself owns around 11% of Coloplast. In 2023 he bound his personal stake and that foundation into Coloplast Holding ApS vehicle with a stated intention to route his shares into a new non-profit foundation over time. That single act is the constitutional-permanence pillar: the controlling owner deliberately converting personal control into a durable, bound structure meant to outlive him. He is, in the framework’s terms, the steward the whole custodial case rests on.

THE MOAT:

source: annual report 2025

What the moat is — four mechanisms, one dominant

The dominant source is switching costs of an unusually intimate kind. These are individually-fitted prosthetic devices for lifelong chronic conditions. A stoma appliance or intermittent catheter that fits one patient’s anatomy and does not leak is, to that patient, irreplaceable — because the downside of switching is not inconvenience but skin breakdown, infection, and social humiliation. The fit is established at surgery by a specialist (WOC) nurse, and the patient then reorders the same consumable for life. The result is annuity-like revenue with very low churn.

The tell is that the ongoing US Medicare fight proves the moat rather than threatening its competitive basis: the patient and clinician coalitions oppose competitive bidding precisely on the grounds that these are not commodity products but life-sustaining prosthetic devices that must be tailored to each person’s anatomy, skin, and clinical condition. The individualization CMS wants to override is the moat.

Three reinforcing mechanisms sit on top: recurring non-discretionary demand (chronic, lifelong, demographically growing with aging and cancer survival); reimbursement and clinical embedding (prescribed products, formulary positions, and nurse relationships — powerful, though double-edged, since it is also the payer-risk vector); and scale in precision manufacturing and incremental R&D (~4% of sales, funding a steady cadence — SenSura Mio, the Luja micro-hole catheter, Provox Life, Heylo digital leak detection).

How deep — very, on one axis; exposed on the other

The depth is demonstrable, not asserted. Pricing power: an EBIT margin before special items of 28% and an EBITDA margin of 31% in FY 2024/25, sustained for years. Share of a growing pool: 7% organic growth on markets growing around 4% in ostomy and 5–6% in continence means Coloplast is taking share while raising price and mix — the signature of a deep moat. Longevity: these leadership positions have held for decades.

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Essity is a high-quality global hygiene and health franchise wrapped in a governance structure that is respectable. It is not family- or foundation-controlled in the direct sense the framework rewards. Control runs through the Industrivärden/Lundberg sphere - a minority voting anchor, not a permanence structure. Strong business, strong balance sheet, weak constitutional moat. This is a Custodial Candidate / Tier B profile, not a Tier A foundation play. The redeeming feature is the Lundberg ownership ethos two layers up; the disqualifying feature is that nothing constitutionally prevents loss of control.

What is AB Industrivarden and who owns it?

Origins and wealth:

• The family fortune originates with Lars Erik Lundberg (1920–2001), who started a small construction company in Norrköping in 1944 that evolved into L E Lundbergföretagen.

• Early on, he shifted from pure contracting into owning and managing properties, building a recurring cash‑flow base and gradually reducing reliance on cyclical construction.

• From the late 1970s and 1980s, the group broadened into financial assets, acquiring stakes in listed Swedish companies and transitioning from an operating construction firm into a diversified investment company.

Today, the core wealth sits in the listed holding company L E Lundbergföretagen AB, which controls Lundbergs Fastigheter (real estate) and significant equity stakes in Industrivärden, Handelsbanken, Sandvik, Skanska, Alleima and others.

Key individuals:

• Lars Erik Lundberg: Founder; built the business from a small construction outfit into an integrated property and investment group.

• Fredrik Lundberg (b. 1951): Lars Erik’s son, Swedish businessman and billionaire, now president and CEO of L E Lundbergföretagen and the family’s chief capital allocator. He inherited a controlling stake and has compounded it through conservative leverage, real‑estate development, and long‑term stakes in listed companies.

• Next generation: His daughters, including Louise Lindh and Katarina Martinson, are involved in the family’s business sphere and associated boards (e.g. Industrivärden), forming the emerging third generation of active owners, though Fredrik remains the central figure.

In Swedish corporate life, Fredrik is seen as a counterpart to the Wallenberg sphere: quieter and more domestic, with a strong bias toward property, banks, and industrials rather than global private equity.

L E Lundbergföretagen as family office:

• L E Lundbergföretagen is effectively the family office, but in listed form: it is an investment company controlled by the Lundberg family, yet traded on Nasdaq Stockholm.

• The company’s strategy emphasizes financial strength, low risk of permanent capital loss, and active board‑level involvement in a relatively small number of holdings.

• A wholly‑owned subsidiary, Lundbergs Fastigheter, manages a significant Swedish commercial and residential property portfolio in cities like Stockholm, Gothenburg and Norrköping, providing stable, cash‑flowing ballast to the more market‑sensitive listed equities.

This structure forces mark‑to‑market transparency and a discipline around payout policy that is closer to a public investment company than a private family office.

Style as capital allocators:

• The family’s approach is long‑duration, low‑turnover, and governance‑focused: they take sizable minority stakes and exercise influence through chairs/board seats and nomination committees rather than frequent trading.

• They prefer strong balance sheets, industrial “national champions” and banks, and tend to add through cycles, particularly in periods of Swedish market stress (e.g., post‑crisis recap situations in banks and industrials).

• Real estate and core equity holdings are used in combination: property for stable, collateralizable cash flows; equities for compounded operational leverage in high‑quality businesses.

In the Industrivärden case, the Lundberg family uses Lundbergföretagen to hold a large block of Industrivärden, and then leverages Industrivärden’s blocks in Volvo, Sandvik, Handelsbanken, Essity, SCA, etc., creating a layered but still fairly transparent structure of industrial ownership in Sweden.

THE BUSINESS:

source: annual report 2025

Before continuing take in mind that the group decided go with four main business lines and in 2026 the reporting will be structured around the following business areas: Health & medical; Personal care; Consumer tissue; and Professional hygiene.

Another important caveat to take in mind is that the company issued and official statement about initiating a strategic review on the consumer tissue business:

source: https://www.essity.com/media/press-release/essity-initiates-strategic-review-of-the-consumer-tissue-business-area/4f1ae7af2e77f554/

This is quite a diversified group.

1. There are 3 main business areas with consumer goods > 50% (54%) while the smaller business lines represent 20% for the health & medical and 26% for the professional hygiene line.

2. In terms of category of products there are two Tier I pillars - consumer tissue with 32% of sales and professional hygiene 26% of sales. The other categories - Incontinence products health care 12%; Feminine care 9%; Medical solutions 8%; Incontinence products retail 8% and baby care 5%.

3. Most of the sales go through retail channels - 54% of total sales. B2B account for 26% of sales and the remainder 20% go through the healthcare sector.

4. In terms of operating profit measured by EBITA - the distribution is somewhat more balanced. The consumer goods business area is by far the leader in sales but is less profitable in terms of margin. This line represents 54% of net sales but 46% of EBITA. Professional hygiene accounts for 26% of net sales but 30% of EBITA. Health & medical is 20% of net sales but 24% of EBITA.

5. In terms of geographic spread, sales are heavily tilted toward Europe. 61% of total net sales come from Europe.

6. On a country level the markets are very diversified. There is no single market with higher than 15% exposure. Biggest market is US with 14% weight. Second comes Germany with 12%, next is UK with 8%, Mexico also with 8%, France with 7%, Spain with 7%.

What about cyclicality? I think cyclicality can address different key drivers in a business. In terms of demand I think the cyclicality of Essity business is very low. The strongest cyclicality component of the business is nested in the cost structure - the cost of pulp/paper:

source: annual report 2025

Where the moat sits? This is a company focused on brands, so the strength of the brands and the market position they are commanding can give a valuable insight for us:

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I plan to add some UK stocks and $PZC.L is the second one. I want a basket of 5-6 UK stocks which can serve as a satellite sub-part of my portfolio. What attracted me at first sight?

source: ft.com

It was the price action. The stock is literally devastated. From a 4 pound per share stock, it is currently quoted at around 87 pence.

source: TIKR.com

A quick snapshot from TIKR.com is hinting that the company is not going out of business.

I see that leverage is manageable for a FMCG business at 1.39x Net debt/EBITDA. After reading some presentation materials published in the investor section on the website I am glad that the trend is positive and the company is continuing to deleverage:

source: H1 2026 presentation

A binding agreement was signed and announced on 18 June 2025. PZ Cussons sold its 50% equity stake in PZ Wilmar, a Nigerian edible oils business, to its JV partner Wilmar International for cash consideration of $70 million (£51 million). Those proceeds will be used strictly for deleveraging as shown on the chart above.

Decent gross margins and EBIT margins:

Stable gross margins around 40%. stable EBIT margins around11%-12% but there was a big hit in profitability in 2024 —> Gross margin almost halved and EBIT margin plunged in the red (-10.46%). I will dig deeper to understand what happened in 2024.

Declining revenue combined with single digit growth expectations (crucial to confirm if the expectations will become reality):

Strong hit in the net profit (this is the primary goal - to understand what led to the net loss):

OWNERSHIP:

The Zochonis family and their trusts - the anchor. This is the founding family (George Zochonis co-founded the business as Paterson Zochonis in 1884). The largest single holder is the Zochonis Charitable Trust, with around 15% of shares outstanding, followed by the Estate of John B. Zochonis at roughly 12%, with further family vehicles (the JB Zochonis settlements for nephews and nieces) on the register. Taken together the family-linked holdings are around 30%, which gives the family strong informal control under a standard one-share-one-vote structure with no dual-class or golden shares. The Charitable Trust was founded by Sir John Zochonis in 1977, funded with his own PZ Cussons shares, and lives off the dividend stream to fund charities in North-West England and West Africa - which is why the dividend cut you saw earlier is not a trivial matter for that shareholder base.

This is the list with the more significant interests in the company:

source: annual report 2025

THE BUSINESS:

source: H1 2026 presentation

Nigeria is the second biggest market after the UK with a 23% weight vs 35% for the UK home market. Australia and Indonesia are number 3 and number 4 with 16.4% and 11.5% weight respectively. Top 4 markets have a total weight of 86%.

Nigerian Naira devaluation relative to the British Pound is for real.

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The thesis stated in simple language:

1. Priced for pessimism - UK equities trade near a 43% discount (on forward P/E basis) to the US - among the widest gaps in two decades. The bad news is in the price.

2. Smart money is buying - Record M&A: foreign and private-equity buyers are taking UK plc private at pace. The market is voting on the value.

3. The macro is tur…

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I. Identity & Heritage
II. Ownership & Governance (Qualitative)
III. Business Quality 
IV. Moat Analysis
V. SWOT Analysis
VI. Qualitative Framework
VII. Financials
VIII. Valuation

I. Identity & Heritage

Shimano Inc. was founded in February 1921 in Sakai, Osaka Prefecture, by Shozaburo Shimano (1894–1958). Originally Shimano Iron Works, then Shimano Industries, then Shimano Inc. The firm has compounded under continuous family leadership for 104 years across three generations:

• 1st–2nd presidents: Shozaburo Shimano and his sons (Shozo, Keizo, Yoshizo)

• 5th president: Yozo Shimano (grandson of founder; led for ~20 years; now Chairman & CEO)

• 6th president (since March 2021): Taizo Shimano (son of 3rd president Keizo; nephew of Yozo)

Headquartered at 3-77 Oimatsu-cho, Sakai-ku, Sakai City. Listed on Tokyo Stock Exchange Prime Market under code 7309. ADR SMNNY trades OTC.

Tokyo ordinary share (7309.T) = 10 ADRs (SMNNY).

Equivalently: each ADR represents one-tenth (1/10) of one underlying Tokyo common share.

II. Ownership & Governance (Qualitative)

The Shimano family remains effective steward. Forbes places the Shimano family among the top 20 wealthiest in Japan, estimated net worth approximately $2.4 billion.

Governance form:

• One-share, one-vote - no dual-class structure

• Six-generation continuity of family presidency: an unbroken chain of stewardship since 1921

• Taizo Shimano joined in 1991, began as a mechanic at a bike shop in Stuttgart, Germany - operational apprenticeship, not financial parachute

• President & Chairman both family; deputy president Takashi Toyoshima drawn from bicycle components - operational succession bench is internal

Capital discipline FY2025:

• Treasury share repurchases: ¥50,006 million during FY2025

• Cancellation of treasury shares: 2,590,000 shares (1,410,000 in May; 1,180,000 in November) - shares outstanding declined from 89,120,000 to 86,530,000

• Dividends: ¥339 per share (up from ¥309); forecast ¥363 for FY2026

• Stated policy: total return ratio of at least 50%

The combination - generational family control, share count actually shrinking, dividend rising into a profit downturn, fortress equity ratio - is the precise governance signature the framework rewards. There is no leveraged buyout culture here, no PE behaviour, no zaibatsu cross-shareholdings post-war (Shimano was never part of a zaibatsu). Japanese business conglomerate structures like Mitsui, Mitsubishi etc. were called zaibatsu and later transformed into keiretsu. This is a very interesting topic on which I plan to write some more.

III. Business Quality

Reportable segments FY2025

Europe - strong

Asia - weak

Germany alone: ¥67,403 million (14.5% of total). China: ¥78,576 million (16.9%) - down sharply from ¥116,438 million (25.8%) in FY2024. Europe was the bright spot; China was the drag.

The business is a Japanese-origin industrial premium-engineering franchise sold primarily into European and Asian recreational markets. It is not a Japanese domestic story.

Cyclically depressed earnings, structurally intact balance sheet (primary):

• Operating margin FY2025: 11.1% (down from 14.4% FY2024 and 19.9% in FY2023 implied from prior data)

• Shareholders’ equity ratio: 92.5% - among the strongest in the global industrial universe

• Interest-bearing debt: trivial - lease obligations only (~¥4,030 million combined)

• Cash and time deposits: ¥477,324 million — roughly 51% of total assets sit in cash

• Interest coverage: 580× (FY2025); 754× (FY2024); 413× (FY2023) - meaningless ratios in a practical sense, which is itself the point

The profit collapse (net income −55.5%) is overwhelmingly cyclical (post-COVID bike industry inventory unwind, China demand weakness) and FX-driven (foreign exchange losses of ¥19,626 million versus gains of ¥12,227 million the prior year - a ~¥31,853 million swing in the non-operating line). The underlying franchise is not impaired.

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I. Executive Verdict

Assystem is a clear and well-positioned nuclear-engineering franchise riding a genuine civilizational tailwind. The strategic narrative is one of the most coherent in European mid-cap industrials. The price is not punishing. But the framework verdict is unambiguous: this is not a custodial holding. Three structural defects disqualify it from custodial tier - an unaddressed founder succession, the €590M-net-debt Expleo overhang with 2027 maturities, and a free-share plan that has transferred material value from shareholders to management in 2024–2025. The thesis is a nuclear renaissance thematic exposure, not a multi-generational compounder.

II. Financial Snapshot

source: https://www.assystem.com/wp-content/uploads/2026/03/ASSYSTEM-Resultats-annuels-2025-CP-ENG-100326.pdf

One of the thigs that I don’t like in these numbers is the adjusted EBIT which is used as a headline profit number.

source: https://www.assystem.com/wp-content/uploads/2026/03/ASSYSTEM-Resultats-annuels-2025-CP-ENG-100326.pdf

Always focus on financial reports and not on headline numbers or some kind of adjusted summary tables.

source: https://www.assystem.com/wp-content/uploads/2026/03/ASSYSTEM-Resultats-annuels-2025-CP-ENG-100326.pdf

Revenue is rising, “EBIT-A” is rising which can give us a healthy picture on the core operating business.

The two cautious moments I want to learn more about are facts and figures related to the Expleo Group and what is with the aggressive share-based-payments.

Who are Expleo Group?

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INDEX:

I. Executive Verdict
II. History - Four Houses, One Defensive Merger
III. Ownership Structure - Total Free Float, No Owner
IV. Business Model - A Toll Road on Professional Decisions
V. Moat - Three Layers, Each Independently Defensible
VI. SWOT — Disciplined and Calibrated
VII. Valuation

I. Executive Verdict

Wolters Kluwer N.V. is a 190-year-old Dutch publishing house transformed, under twenty-three years of singular leadership, into an €6.1bn professional-information software franchise. Its products sit inside the workflows of physicians, tax accountants, lawyers, and CFOs across more than 180 countries. Eighty-three percent of revenue is recurring. Adjusted operating margin is 27.5%. Return on invested capital is 18.0%. Net leverage is 2.0x. The shareholder register is 100% free float, ~90% institutional, with no controlling blockholder.

Between February 2025 and May 2026, the equity has lost roughly 60% of its peak value. The cause is not operational - Q1 2026, released this morning (06.05.2026), showed +5% organic growth, +11% adjusted operating profit, +15% adjusted free cash flow, full-year guidance reiterated. The cause is a thesis: that artificial intelligence will eventually erode the editorial moats - UpToDate, CCH, VitalLaw - on which the franchise rests.

The question is not whether the panic is rational. The question is whether the moat is real.

II. History - Four Houses, One Defensive Merger

Wolters Kluwer’s roots trace to four 19th-century Dutch family publishing houses, each born from the same demand: a modernising legal and administrative state needed printed authority, and educated professionals needed textbooks.

- 1836 - Jan-Berend Wolters founds a schoolbook publishing house in Groningen.
- 1858- P. Noordhoff founds his publishing house, later joined to Wolters.
- 1886 - Nicolaas Samsom leaves the civil service to publish simplified administrative forms.
- 1889 - Æbele Kluwer establishes a bookselling-publishing business in Deventer.

The consolidation arc spans a century. Wolters and Noordhoff merged in 1968. Wolters-Noordhoff merged with the Information and Communications Union in 1972, eventually becoming Wolters-Samsom by 1983.

The decisive event arrives in 1987. Elsevier - then the largest Dutch publisher - launches a hostile bid for Kluwer. Kluwer’s board rejects on grounds of cultural incompatibility and instead executes a defensive merger with Wolters-Samsom. The combined entity, Wolters Kluwer N.V., is born as the Netherlands’ second-largest publisher and listed on Euronext Amsterdam.

The defining feature of this corporate origin must be understood clearly: Wolters Kluwer was constituted to remain independent. It exists because it refused to be absorbed.

The next two decades were a textbook expansion through acquisitions:

- 1990 - J.B. Lippincott (US medical publishing), $250m
- 1995–96 - CCH Inc. (US tax and business information), $1.9bn
- 1998 - Waverly, Ovid Technologies, Plenum Publishing (medical/scientific)
- 2016 - Enablon (EHS/ESG software), €250m

The final transformation arrives with Nancy McKinstry, appointed CEO on September 1, 2003. Over twenty-three years - the longest CEO tenure of any Dutch AEX company at her retirement - McKinstry executed three things:

1. Restructured the company around customer segments, not geography.
2. Committed 10%-11% of revenue annually to product development.
3. Pivoted from print publisher to digital “Expert Solutions” provider - a phrase formalised as enterprise strategy in 2015.

Market capitalisation grew more than tenfold during her tenure. By 2012, three-quarters of revenue came from online, software, and services. By 2025, expert solutions represented 59% of total revenue and cloud software 21%. McKinstry retired in February 2026 and was succeeded by Stacey Caywood, a thirty-year company veteran formerly running both the Legal & Regulatory and Health divisions, and an architect of the 2025–2027 strategic plan.

III. Ownership Structure - Total Free Float, No Owner

This is the most important governance fact, and it cuts both ways.

Wolters Kluwer N.V. operates with a 100% free float. There is no founding family, no foundation, no anchor shareholder, no government stake. Voting rights follow the strict one-share-one-vote principle. As of November 2025, approximately 90% of issued ordinary shares are held by institutional investors; the residual ~10% is unidentified, held in treasury, or distributed across intermediaries and retail investors.

Disclosed substantial holdings include BlackRock, Vanguard, FMR (Fidelity), Massachusetts Financial Services, and Mawer Investment Management - none individually exceeding ~6% of issued capital. No filing has triggered the Dutch 30% mandatory bid threshold.

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INDEX:
I. History
II. Ownership and the owning dynasty
III. Business model
IV. The moat
V. SWOT
VI. Ten-dimension assessment
VII. Verdict
VIII. Valuation

I. History - 218 years of continuity

Bucher Industries is the fourth-oldest listed company in Switzerland. Its origin is unremarkable, which is to say, typical of the Alemannic industrial tradition: a blacksmith’s forge.

1807 - Heinrich Bucher-Weiss (1784–1850) acquires a forge in Niederweningen, canton Zürich. Initial output: simple agricultural implements.

1850s–1871 - The second and third generations add slurry pumps, feed cutters, hand mills. In 1871, Johann Bucher-Manz (1843–1919) takes over and begins manufacturing fruit and grape presses — the product line that will anchor the firm for a century.

1901 - First hydraulic fruit press with high-pressure pump — the technological pivot.

1904 - Jean Bucher-Guyer (1875–1961) assumes leadership. The firm scales hydraulic press production.

1918 - Incorporated as Maschinenfabrik Jean Bucher-Guyer - 150 employees.

1923 - Maschinenfabrik Johann Bucher established in Griessen, southern Baden — the first cross-border footprint.

1934 - Walter Hauser-Bucher (1904–1967), son-in-law of Bucher-Guyer, assumes management. The name changes, the bloodline does not. Workforce approx. 230. First motorised agricultural machine (horse-drawn mower with auxiliary engine).

1945 - “Rekord” single-axle motor mower launched. 116,000 units delivered by 2003 — the product that made Bucher a household name in Swiss agriculture.

1946 - Bucher-Guyer acquires a stake in Kuhn, the French agricultural machinery manufacturer at Saverne. The seed of today’s largest division.

1951 - Reorganised as a public limited company under the name *Bucher-Guyer AG.

1967 - Hans Hauser (1935–1996) and Rudolf Hauser (b. 1937) assume management — the third generation of the Hauser line.

1972 - Thomas Hauser (b. 1940) joins the board of directors.

1984 - Group reorganised under Bucher Holding AG.

1986 - Initial public offering on the Swiss stock exchange. Sales at the time: CHF 430m; 2,730 employees.

1994–1998 - Modern identity takes shape: acquisition of Schörling sweepers (1994, future Bucher Municipal); hydraulic platform expansion (Beringer 1996, Hydrotechnik Frutigen 1997); entry into glass-container machinery via acquisition of Emhart Glass (1998).

2001 - Bucher Holding AG renamed Bucher Industries AG. Philip Mosimann appointed CEO, Rudolf Hauser chairman. Sales CHF 1.5bn, employees approx. 6,000.

2016 - Jacques Sanche appointed CEO; Mosimann becomes chairman. The present five-division architecture stabilised.

March 2026 - FY2025 results released. Sales CHF 2.91bn, employees 14,198. Founding family shareholding: 37.8%. Chairman transition announced for 16 April 2026 AGM.

Summary - Seven generations. Two world wars. The 1970s oil shocks. The 2008 financial crisis. The 2020 pandemic. The firm compounds. The family holds.

II. Ownership and the owning dynasty

The shareholder structure (primary source: company disclosure, 13 December 2025)

Descendants of the founding family form a group of shareholders organised under a shareholders’ agreement. Overall, the group holds a total 37.8% stake in the registered share capital of Bucher Industries AG.

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Forbo Holding AG is a 97-year-old Swiss industrial group headquartered in Baar, Canton of Zug - the apex of the framework’s jurisdictional hierarchy. The company operates two divisions of genuine structural durability: Flooring Systems, built around Marmoleum linoleum (world’s largest producer, climate-positive from cradle-to-gate), and Movement Systems, centered on the Siegling brand of conveyor and power transmission belts serving food processing, logistics, and precision applications. Michael Pieper (born 1946), owner of Artemis Holding AG, has been a board member since 2000 - 25 consecutive years, currently serving as Vice-Chairman - and holds 28.06% of the voting capital as of December 31, 2025, directly and indirectly through Artemis Beteiligungen I AG (Forbo Annual Report 2025, Corporate Governance Report, p. 110).

The investment thesis is straightforwardly cyclical: three consecutive years of revenue contraction (2023–2025) driven by the European construction downturn, combined with CHF appreciation, have compressed the EBIT margin from a peak of 14.3% (2021) to 8.1% (2025). The stock has declined approximately 65% from its August 2021 all-time high of CHF 2,040. The balance sheet has not been impaired: the company is debt-free, carries net cash of CHF 109.1 million (2024 audited), holds an equity ratio of 66.8% as of year end 2025 (64.1% in 2024), and has maintained its dividend at CHF 25.00 per share through three consecutive years of earnings decline.

The structural excellence - Swiss domicile, net cash, niche monopoly, heritage - is not in dispute. The primary constraint is governance: Pieper’s 28.06% is a strategic financial investment held through a private holding, not a founding-family stake embedded in corporate DNA. It lacks the structural permanence of a Stiftung or irrevocable family trust.

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The Company

Fenix Outdoor International AG is a Swedish-founded, Swiss-domiciled holding company listed on Nasdaq Stockholm, with a market capitalization of approximately €670 million (including both B and A shares; around 570 million euro only for the listed B shares) and revenues of roughly €700 million euros. It was born in 1960 from a single act of Nordic ingenuity and has grown, across two generations of the founding family, into one of Europe’s most concentrated portfolios of premium outdoor heritage brands. It operates three business segments: Brands (product development and global wholesale), Global Sales (distribution across 70+ countries), and Frilufts (six outdoor retail chains spanning Sweden, Norway, Germany, Finland, Denmark, and the UK — 106 stores in total). The company is currently navigating a post-COVID demand normalization cycle that has compressed earnings since early 2023. Q3 2025 marked the first quarter of year-on-year improvement. The balance sheet remains stable.

The Brands

The portfolio is not a collection of assets. It is a congregation of covenants - each brand a decades-long promise between a craftsman and a community.

Fjällräven (Swedish: Arctic Fox) was founded in 1960 by Åke Nordin and is the gravitational centre of the group. Its Kånken backpack - designed in 1978 for Swedish schoolchildren suffering from back pain - is now carried in over 70 countries, unchanged in substance, unreplicated in cultural weight. It has been voted the most sustainable brand in the outdoor industry for five consecutive years. It eliminated PFAS chemicals from its products years before regulators demanded it. It refuses to sell through fashion retailers despite persistent demand. The Kånken is not a product. It is a cultural object - and cultural objects compound without a marketing budget.

Hanwag, founded in Germany in 1921, makes alpine boots of such quality that clients resole and wear them for decades.

Primus, founded in Sweden in 1892, makes camp stoves that have been carried on polar expeditions and Everest ascents.

Royal Robbins was founded by the pioneers of technical rock climbing in Yosemite Valley.

Devold of Norway, acquired in March 2025 for €35 million, was founded in 1853 and is a pioneer of Merino wool performance clothing - the premium natural material of the next decade as synthetic fabrics face microplastic regulation headwinds.

Each brand is over 50 years old. Several are over 100. None were built through advertising. All were earned through the honest testimony of people who used them in conditions that demanded the truth.

The Ownership Family

The Nordin family has controlled this enterprise across two generations without interruption, without dilution of mission, and without the compromise.

Åke Nordin (1936–2013) was the founder - an outdoorsman from Örnsköldsvik in Northern Sweden who built his first backpack at age 14 on his mother’s sewing machine. He was not an entrepreneur in the modern sense. He was a craftsman who happened to build a company. He took Fjällräven public in 1983 but never surrendered control of its soul.

His son, Martin Nordin, has served as CEO and Executive Chairman since 2002. Educated at Boston University and Kellogg School of Management, he is the rare second-generation inheritor who carries both the founder’s covenant and the professional tools to execute it at scale.

The family holds directly in the listed entity - Fenix Outdoor International AG - through three dedicated holding companies: HAK Holding Ltd (17.62%), Liselore AB (15.04%), and Pinkerton Holding AB (14.73%), alongside Martin Nordin's personal stake and two further individual family members. Together, the family controls 61.5% (both A and B shares) of the company's nominal share value, representing 85.2% of voting rights at the Annual General Meeting. Three of the top four shareholders by share count are Nordin family vehicles. Susanne Dalsgaard Nordin sits on the board, representing the family's ongoing governance presence alongside independent directors.

Fenix Outdoor has two share classes - Series A and Series B. The B shares trade publicly on Nasdaq Stockholm. The A shares are not listed, do not trade, and are held entirely by the family. All shares of Series A are held directly or indirectly by Martin Nordin and the Nordin family entities.

Martin Nordin writes the quarterly shareholder letters himself. He called Q2 2025 “struggling.” He called Q4 2024 “disappointing.” A controlling shareholder who speaks that plainly to minority investors is not extracting capital from a public vehicle. He is building something he intends to hand to a third generation - and he wants partners who understand that.

The Succession Question

Martin Nordin, now 63, has been candid in a rare 2025 interview that he is preparing to transition. “I’m going to scale back a little on what I do. So we’re currently reviewing the situation so that we can establish good leadership. My daughter is involved and learning the ropes. My son has been involved in the company to some extent, but is currently studying. We’ll see what happens in the end.”

The third generation is in preparation. The daughter is active. The son is studying. The holding companies are structured. The governance architecture built in 2014 was not designed for Martin Nordin’s tenure - it was designed for the century.

The Nordin family does not own Fenix Outdoor. They are Fenix Outdoor. And they have built a legal, financial, and cultural structure to ensure that truth survives them.

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