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INRN

Interroll Holding AG

CHF 2000 CHF 1.66B market cap February 21, 2026
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Interroll Holding AG INRN BUFFETT / MUNGER / KLARMAN SUMMARY
1 SNAPSHOT
PriceCHF 2000
Market CapCHF 1.66B
EVCHF 1.43B
Net DebtCHF -195M (net cash)
Shares829,107
2 BUSINESS

Interroll is the global #1 provider of platform-based material handling solutions -- conveyor rollers, drum motors, sorters, and pallet handling systems -- serving system integrators and OEMs who build warehouse automation, airport baggage handling, e-commerce fulfillment, and manufacturing logistics. End-users include Amazon, DHL, Nestlé, Procter & Gamble, and Walmart. Founded 1959 in Germany, HQ in Switzerland, with 2,300 employees across 36 subsidiaries in 16 countries. Operates as a neutral component supplier (never competing with integrator customers), creating deep trust-based relationships. Addressable market ~CHF 6-8B with ~8-11% global share.

Revenue: CHF 527.1M Organic Growth: -2.4% (local currency)
3 MOAT NARROW-TO-WIDE

Four reinforcing moat elements: (1) Platform ecosystem -- modular product platforms (MCP, MPP, DC Platform, AMR Top Module) that integrators design entire systems around, creating deep switching costs as engineers invest years of expertise in Interroll standards; (2) Neutral vendor status -- unlike Daifuku or KION/Dematic, Interroll never competes with its integrator customers for end-user projects, earning unique trust; (3) Global scale in niche -- largest pure-play globally with 16 manufacturing plants and CHF 20-25M annual R&D spend that smaller competitors cannot match; (4) Quality/reliability reputation -- 60+ years of engineering heritage in mission-critical logistics where downtime costs are enormous. Gross margin of 64% reflects genuine pricing power.

4 MANAGEMENT
CEO: Markus Asch (since Mar 2025)

Conservative and disciplined. Progressive dividend (CHF 32/share, ~1.6% yield, 44% payout ratio). Share buybacks concentrated in 2020-2021 (CHF 53M). Accumulated CHF 204M cash on balance sheet -- provides optionality but may be sub-optimal. Only small bolt-on acquisitions (Interroll India Sep 2024). Founding families (Specht/vom Stein) hold 10.7%, declining from 13.0%. CEO transition is deliberate: Asch served on Board since 2020 before taking CEO role. Strategy focuses on regaining market share in Asia, software services, and emerging market expansion.

5 ECONOMICS
14.8% Op Margin
~17% (adjusted for excess cash) ROIC
CHF 78.4M FCF
-1.9x (net cash) Debt/EBITDA
6 VALUATION
FCF/ShareCHF 94.6
FCF Yield4.7%
DCF RangeCHF 2,400 - 2,750

Base: FY2024 EPS CHF 73 recovering to mid-cycle CHF 90 over 3 years (7.2% CAGR), then 5% growth years 4-10 on structural logistics automation tailwind, 2.5% terminal growth, 8.5% discount rate. Private market value at 16x mid-cycle EBITDA of CHF 115M yields CHF 2,454/share. Weighted fair value CHF 2,500.

7 MUNGER INVERSION -22.3%
Kill Event Severity P() E[Loss]
Extended logistics CapEx downturn (3+ years) -25% 25% -6.3%
AMR/AGV structurally displaces fixed conveyors -50% 10% -5.0%
CHF appreciation eroding reported returns -10% 40% -4.0%
Chinese competitors commoditize conveyor rollers -40% 10% -4.0%
New CEO execution failure / value-destroying acquisition -20% 15% -3.0%

Tail Risk: The non-additive tail scenario is a global logistics recession lasting 5+ years combined with AMR technology leapfrogging fixed conveyor economics, while a new CEO panics and makes a transformative acquisition at inflated multiples. Revenue collapses to CHF 350M, margins compress to 8%, and goodwill impairment destroys book value. 65%+ downside. Probability: <5%.

8 KLARMAN LENS
Downside Case

In the bear case, the post-pandemic logistics CapEx normalization extends for 3-5 years as warehouse overcapacity works through the system. AMRs gain share at the expense of fixed conveyor infrastructure. Chinese competitors enter the European market with 30% lower prices. Revenue stagnates at CHF 480-500M and margins compress to 12%. Stock de-rates to 18-20x depressed earnings of CHF 55 = CHF 1,000-1,100 range.

Why Market Wrong

The market is treating a cyclical trough in logistics CapEx as a structural impairment. Interroll's operating margins (14.8%) have barely compressed despite a 21% revenue decline from peak, demonstrating earnings quality that the market ignores at 27x trough earnings. The CHF 195M net cash position (11.7% of market cap) provides a significant floor. Local-currency order intake is stabilizing (+2.7% in H1 2025), suggesting the trough is near. When logistics CapEx recovers -- driven by e-commerce growth, nearshoring, and warehouse automation -- Interroll's operating leverage will drive a significant earnings recovery.

Why Market Right

The bears could be right if: (1) AMR/AGV technology advances faster than expected, making fixed conveyor infrastructure a declining market within 5-7 years; (2) Chinese manufacturers close the quality gap and undercut Interroll's pricing by 30-40% in the commodity roller segment; (3) the post-pandemic overbuilding of warehouse space means logistics CapEx won't recover to 2022 levels for a decade; (4) the 60% decline from ATH was simply a fair repricing from 2021 bubble territory to intrinsic value. At 27x trough earnings, the stock may not be cheap at all -- it could be fairly valued for a cyclical business with uncertain growth.

Catalysts

(1) Logistics CapEx recovery in H2 2026-2027 as post-pandemic overcapacity is absorbed; (2) New CEO Markus Asch articulating a compelling growth strategy at 2026 annual results; (3) Share buyback program utilizing the CHF 204M cash hoard at depressed prices; (4) E-commerce reacceleration driving new warehouse construction; (5) Nearshoring/reshoring trend requiring new distribution center infrastructure; (6) India market penetration following 2024 acquisition.

9 VERDICT WAIT
A- T2 Resilient
Strong BuyCHF 1650
BuyCHF 1900
SellCHF 3750

Interroll is a high-quality hidden champion in logistics automation with a platform ecosystem moat, fortress balance sheet (CHF 195M net cash), and consistent 15% operating margins through the cycle. At CHF 2,000, the stock trades at 27x trough earnings with a weighted fair value estimate of CHF 2,500, offering a 20% margin of safety -- insufficient for a confident buy without a near-term catalyst. The cyclical recovery in logistics CapEx is probable but timing is uncertain. Accumulate below CHF 1,900; strong buy below CHF 1,650. Expected 3-year return of ~22% (6.8% annualized) at current price. Position size 2-3% at entry.

🧠 ULTRATHINK Deep Philosophical Analysis

INRN - Ultrathink Analysis

The Core Question

We are not asking whether Interroll's stock will recover from its 60% drawdown. We are asking something more fundamental: Is the physical movement of goods through warehouses a permanent feature of the global economy, and is Interroll the inevitable provider of the infrastructure that enables it?

Strip away the financial jargon, the P/E ratios, the quarterly noise. Zoom out to first principles. Every package that arrives at your door has been sorted, routed, conveyed, and handled by physical systems somewhere in the supply chain. Every Amazon warehouse, every DHL sorting center, every airport baggage system relies on conveyor rollers, drum motors, and sorting equipment to function. This is not optional infrastructure. It is as essential to modern commerce as roads are to transportation.

The question is whether this infrastructure will be provided by fixed conveyor systems -- Interroll's bread and butter -- or whether autonomous mobile robots will make conveyors obsolete. This is the pivotal question of the thesis, and we must think about it with ruthless intellectual honesty.

The Conveyor vs. AMR Debate

Here is where Munger's habit of inverting proves essential. Rather than asking "will conveyors survive?", ask: "under what conditions would conveyors become obsolete?"

Conveyors lose when:

  1. Warehouse layouts change frequently (AMRs are flexible; conveyors are fixed)
  2. Throughput requirements are moderate (AMRs handle lower volumes efficiently)
  3. Product mix is highly variable (AMRs adapt; conveyors are optimized for consistent flows)
  4. Floor space is at a premium (AMRs use space more efficiently)

Conveyors win when:

  1. Throughput is massive (10,000+ items per hour -- no AMR fleet matches a high-speed sorter)
  2. Operations run 24/7 with minimal downtime (AMRs need charging; conveyors run continuously)
  3. Product characteristics are consistent (parcels, boxes, pallets)
  4. Total cost of ownership over 15-20 years matters (conveyors are cheaper per unit moved at scale)

The honest answer is that this is not an either/or question. It is a both/and reality. The largest e-commerce fulfillment centers will continue to use conveyors as the backbone, with AMRs handling the more flexible, lower-throughput tasks. Amazon itself operates both conveyor-heavy and AMR-heavy facilities, and has concluded that hybrid systems are optimal.

Interroll's AMR Top Module -- a product that bridges both worlds by allowing AMRs to dock with conveyor systems -- is a strategically brilliant response. It acknowledges the AMR trend while positioning Interroll as the interconnection point between old and new technology. Whether the warehouse of the future is 80% conveyor and 20% AMR, or 50/50, Interroll can serve both sides.

But we must acknowledge the tail risk: if AMRs become cheap enough and reliable enough to handle high-throughput sorting at scale, the conveyor's value proposition weakens structurally. This would take a decade or more, but it is not impossible.

The Hidden Assumption: Neutrality as Moat

The most underappreciated aspect of Interroll's competitive position is its neutrality. In a world of vertically integrated logistics automation companies -- Daifuku owns the system from design to installation, KION's Dematic does the same, Honeywell Intelligrated bundles hardware and software -- Interroll stands alone as the Switzerland of material handling. (The metaphor is apt: a Swiss company practicing neutrality.)

This neutrality is not merely a corporate strategy. It is a structural moat that becomes harder to replicate over time. Here is why:

Imagine you are a system integrator -- a company like TGW, Vanderlande (now Toyota), or Swisslog (KUKA/Midea). You design custom warehouse automation systems for end-users. You need reliable conveyor components. Would you buy from Daifuku -- who might bid against you on the next project? Or from Interroll, who will never compete with you?

The answer is obvious. And once you've designed 200 systems around Interroll's Modular Conveyor Platform, trained your engineers on their specifications, and built your installation manuals around their components, switching to a competitor means redesigning everything. The switching costs compound over time.

This is the classic razor/blade dynamic, except the "razor" is the system design and the "blades" are Interroll's standardized components. The more systems built around Interroll platforms, the deeper the lock-in.

What concerns me is whether this neutrality will hold. If Interroll's new CEO -- brought in from outside, with a mandate to "regain lost market share" -- decides that selling components is too slow and moves into system-level solutions, the neutrality moat evaporates. Every move toward competing with integrators destroys the trust that took decades to build. This is the most important thing to monitor about the CEO transition.

The Balance Sheet Paradox

Interroll's CHF 204M cash pile is simultaneously its greatest strength and its greatest weakness.

The strength is obvious: in a cyclical downturn, cash is king. No covenants to violate, no debt to refinance, no desperate equity raises. Interroll can wait out any downturn and emerge stronger, potentially acquiring weakened competitors at distressed prices.

The weakness is subtler but important. A company generating CHF 78M in annual free cash flow, sitting on CHF 204M in cash, with only CHF 9M in debt, is a company that lacks conviction about its own growth opportunities. If management truly believed in Interroll's future -- if they saw enormous return on investment from new markets, new products, new factories -- they would invest the cash, not hoard it.

Buffett would say: "If a management team cannot find attractive uses for cash at returns above the cost of capital, they should return it to shareholders." By this standard, Interroll should be aggressively buying back shares at CHF 2,000 (27x trough earnings for a quality franchise) rather than accumulating cash at 0-1% yields.

The fact that they are not buying back shares aggressively tells us one of two things: either management does not believe the stock is cheap (a negative signal), or they are preserving optionality for a larger acquisition (which could be positive or negative depending on execution). Watch the capital allocation decisions over the next 12-18 months as the most telling indicator of management quality.

The Patient Investor's Calculation

Here is the fundamental math:

Interroll is a business that earned CHF 73 per share in a cyclically depressed year (FY2024), CHF 97 per share at the cycle peak (FY2022), and has averaged CHF 85 per share over a full 5-year cycle. Let us assume mid-cycle earnings power of CHF 85-90 per share, growing at 5-6% per year from structural logistics automation demand.

At CHF 2,000 per share, we are paying:

  • 23x mid-cycle earnings (CHF 85)
  • 22x normalized earnings (CHF 90)
  • 27x trough earnings (CHF 73)

For a company with these characteristics -- global market leader, platform moat, net cash, 15% margins -- a fair multiple is 22-28x mid-cycle earnings, implying fair value of CHF 1,870-2,520. The weighted midpoint is approximately CHF 2,200-2,400.

At CHF 2,000, we are paying roughly fair value for a quality business at a cyclical trough. This is not a bad outcome for a buy-and-hold investor who plans to own for 10+ years. But it is not the fat pitch that Buffett waits for.

The fat pitch arrives below CHF 1,650 -- where you are paying less than 18x mid-cycle earnings for a growing franchise with a fortress balance sheet. At that price, the 5-year expected return exceeds 12% per annum even in a conservative scenario. That is when you act decisively.

The Simplest Thesis

The world's leading conveyor roller company -- 64% gross margins, global #1 in a fragmented market, net cash equal to 12% of market cap, serving the irreversible trend toward warehouse automation -- trades 60% below its high because logistics capex hit a cyclical wall after the pandemic boom.

If you believe that packages will continue to move through warehouses, and that fixed conveyor infrastructure remains essential for high-throughput logistics, and that Interroll's platform ecosystem creates durable switching costs -- then the question is simply one of price. And at CHF 2,000, the price is close to right but not yet compelling.

Wait. The cyclical trough is darkest before dawn. The time to buy Interroll is when logistics capex looks bleakest and the stock touches CHF 1,600-1,800. That day will come. Whether it comes in 3 months or 18 months, patience is the edge.

Executive Summary

Interroll Holding AG is the world's leading manufacturer of platform-based material handling solutions -- conveyor rollers, drum motors, sorters, and pallet handling systems -- serving logistics integrators and OEMs globally. The company operates in a CHF 6-8B addressable market with approximately 8-11% global market share, serving end-users including Amazon, DHL, Nestlé, Procter & Gamble, and Walmart.

Investment Thesis in Three Sentences: Interroll is a hidden champion in logistics automation -- a structural growth market powered by e-commerce, warehouse automation, and nearshoring -- with a platform/ecosystem moat, a fortress balance sheet (net cash CHF 195M), and consistent 15%+ operating margins. The stock trades at CHF 2,000, roughly 60% below its 2021 all-time high, with valuation de-rated to 27x trailing earnings due to a cyclical downturn in capital expenditure. At fair value of approximately CHF 2,400-2,600, the stock offers limited margin of safety today but becomes compelling below CHF 1,800.

Decision: WAIT -- quality business in a cyclical trough, but insufficient margin of safety at current price.

Metric Value
Quality Grade A-
Moat Narrow-to-Wide (Platform Ecosystem)
Current Price CHF 2,000
Fair Value Estimate CHF 2,400 - 2,600
Strong Buy Price CHF 1,650
Accumulate Price CHF 1,900
Margin of Safety ~17-23% discount needed
Catalyst Cyclical recovery in logistics capex (H2 2026+)
Position Size 2-3% when entry price reached

Phase 0: Opportunity Identification (Klarman)

Why Does This Opportunity Exist?

  1. Cyclical Downturn in Logistics CapEx: After a pandemic-driven surge in e-commerce and warehouse investment (2020-2022), global logistics capital expenditure has normalized sharply. Interroll's revenue declined from CHF 664M (2022 peak) to CHF 527M (2024), a 20.7% drop. The market is pricing this as a structural problem rather than a cyclical correction.

  2. CEO Transition Uncertainty: Ingo Steinkruger stepped down as CEO, with Markus Asch taking over on March 1, 2025. Board member since 2020, Asch has mechanical engineering credentials and strategic realignment experience, but any CEO change introduces execution uncertainty. The market extracts a discount for transition risk.

  3. Small-Cap Neglect: With CHF 1.66B market cap and only 4 covering analysts (all recommending Buy), Interroll sits in a no-man's-land: too small for large institutional mandates, too illiquid for quantitative strategies (low daily volume), and listed only on the SIX Swiss Exchange. This structural neglect creates the opportunity.

  4. Swiss Franc Appreciation: CHF strength has masked local-currency growth (H1 2025: +3.6% local currency, +0.1% reported). International investors applying a constant-currency lens see a stagnant topline when the underlying business is actually stabilizing.

Source of Mispricing: The combination of cyclical revenue decline, CEO change, and structural neglect has pushed the stock 60% below its 2021 high. The market is pricing a cyclical capital goods business at a discount that fails to account for the structural growth in logistics automation, the fortress balance sheet, and the durable platform moat.

Phase 1: Risk Analysis (Inversion)

"How Could This Investment Lose 50%+ Permanently?"

  1. Logistics Automation Commoditization: If Chinese competitors (e.g., Geek+, Hai Robotics) successfully commoditize conveyor technology, Interroll's 15% operating margins could compress to 8-10%. At 10% margins on CHF 500M revenue = CHF 50M EBIT at 15x = CHF 750M enterprise value = ~CHF 900/share. This is the existential risk.

  2. Autonomous Mobile Robots (AMRs) Displace Conveyors: If AMR/AGV technology advances to the point where fixed conveyor infrastructure becomes obsolete for most warehouse applications, Interroll's core business erodes structurally. Companies like Locus Robotics, 6 River Systems (owned by Shopify/Ocado), and Geek+ are pushing this narrative.

  3. Extended CapEx Downturn (3-5 years): If global logistics capex remains depressed due to macro weakness, higher interest rates, or overcapacity from 2020-2022 overbuilding, Interroll's revenue could decline further to CHF 450-480M range, destroying earnings power.

Risk Register

Risk Severity Probability Expected Loss Mitigation
Chinese commoditization of conveyors -40% 10% -4.0% Platform strategy, quality focus, customer relationships
AMR/AGV structural displacement -50% 10% -5.0% Interroll's AMR Top Module; hybrid conveyor+AMR systems
Extended logistics capex downturn (3+ yr) -25% 25% -6.3% Net cash position, low leverage, no debt pressure
CEO transition execution failure -20% 15% -3.0% Board continuity (Asch was board member since 2020)
CHF appreciation eroding returns -10% 40% -4.0% Global manufacturing base in 16 countries
Total Expected Downside -22.3%

Bear Case (3-Sentence Short Thesis)

"Interroll is a cyclical capital goods company masquerading as a structural growth story. The pandemic pulled forward 3-5 years of logistics capex, and we are now in the hangover phase -- revenue has already declined 21% from peak and H1 2025 shows continued margin pressure (EBIT margin 11.1% vs. 17.9% in FY2020). Meanwhile, AMRs and Chinese competitors are eating into Interroll's addressable market, while the CHF 2,000 price at 27x depressed earnings prices in a recovery that may not materialize for years."

Sell Triggers (Pre-Defined)

  1. Thesis Break: Operating margin falls below 10% for two consecutive half-year periods (indicates structural margin compression, not cyclical)
  2. Moat Erosion: Market share falls below 6% (from current ~8-11%) as measured by management commentary
  3. Management Failure: New CEO pursues transformative acquisition at >3x revenue of target (empire building)
  4. Valuation: Stock exceeds CHF 3,900 (50% above estimated CHF 2,600 fair value ceiling)

Phase 2: Financial Analysis

5-Year Financial Performance

Metric FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 5Y Avg
Revenue (CHF M) 527.1 556.3 664.4 640.1 530.6 583.7
Gross Margin 64.0% 62.0% 55.7% 56.9% 60.5% 59.8%
EBIT Margin 14.8% 15.1% 15.8% 15.5% 17.9% 15.8%
Net Margin 11.9% 11.9% 12.5% 12.6% 13.5% 12.5%
ROE 14.2% 16.5% 22.4% 24.5% 24.5% 20.4%
EPS (CHF) 73.18 77.69 96.94 94.38 84.01 85.24
FCF (CHF M) 78.4 95.7 50.5 0.7 74.9 60.0

Key Observations:

  • Revenue peaked in 2022 at CHF 664M and has declined 20.7% -- a clear cyclical pattern
  • Operating margins have been remarkably stable at 14.8-17.9% despite significant revenue swings, indicating excellent cost management and high-quality earnings
  • ROE has declined from 24.5% (2020-2021) to 14.2% (2024) primarily because equity has grown faster than earnings (fortress balance sheet accumulating cash)
  • FCF generation is strong and consistent (except 2021 when capex was elevated for plant expansion)

Balance Sheet Fortress

Metric FY 2024 FY 2023 FY 2022 FY 2021 FY 2020
Cash & Equivalents 204.1 140.3 79.3 68.5 98.3
Total Debt 9.3 7.1 8.5 22.4 6.1
Net Cash 194.8 133.2 70.8 46.1 92.2
Equity Ratio 79.9% 75.5% 72.2% 64.1% 66.6%
Current Ratio 4.32 3.21 2.60 1.86 2.08
D/E Ratio 0.020 0.017 0.022 0.065 0.020
Goodwill (CHF M) 17.1 15.1 16.4 16.7 16.4

This is an exceptionally strong balance sheet: CHF 195M net cash (11.7% of market cap), D/E of 0.02, current ratio of 4.3, and minimal goodwill (2.9% of assets). The company could survive a prolonged downturn without any external financing needs.

DuPont ROE Decomposition (FY 2024)

ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 11.9% × 0.891 × 1.252

Where:
- Net Margin = 62.5/527.1 = 11.9% (high quality)
- Asset Turnover = 527.1/591.3 = 0.891 (capital-light for manufacturing)
- Equity Multiplier = 591.3/472.2 = 1.252 (very low leverage)

The ROE is depressed primarily because the equity base is bloated with accumulated cash. Adjusted ROE (excluding excess cash above CHF 50M maintenance level) would be approximately 18.2%.

Owner Earnings Calculation

Owner Earnings = Net Income + D&A - Maintenance CapEx - Delta Working Capital
= 62.5 + 22.6 - 10.0* - (-5.0)**
= CHF 80.1M

*Maintenance CapEx estimated at ~CHF 10M (total capex CHF 13.6M less ~CHF 3.6M growth capex)
**Working capital released due to revenue decline

Per Share: CHF 80.1M / 829,107 shares = CHF 96.6/share

Owner Earnings Yield at CHF 2,000 = 4.8%

Valuation Trinity

1. Liquidation Value (Floor)

Net Current Asset Value (NCAV):
= Current Assets - Total Liabilities
= 376.5 - 119.1
= CHF 257.4M / 829,107 shares = CHF 310/share

Tangible Book Value:
= Total Equity - Goodwill - Intangibles
= 472.2 - 17.1 - 13.4
= CHF 441.7M / 829,107 shares = CHF 533/share

2. Going Concern Value (DCF)

Conservative DCF assumptions:

  • Base earnings: CHF 73 EPS (depressed FY2024)
  • Years 1-3: Recovery to mid-cycle earnings of CHF 90 EPS (7.2% CAGR)
  • Years 4-10: 5% growth (structural logistics automation tailwind)
  • Terminal growth: 2.5%
  • Discount rate: 8.5% (Swiss company, net cash, but small cap)
Year 1-3 present value: CHF 73 × 1.072 = ~CHF 78, CHF 84, CHF 90
Year 4-10 at 5% growth: CHF 95, 99, 104, 109, 115, 121, 127
Terminal value: CHF 127 × 1.025 / (0.085 - 0.025) = CHF 2,168
Sum of DCF = ~CHF 2,400/share (conservative)

With moderate recovery (EPS to CHF 100 by year 3):
DCF = ~CHF 2,750/share

3. Private Market Value

Recent comparable transactions in material handling:

  • Daifuku trades at ~18x EBITDA
  • KION Group at ~10x EBITDA (more diversified, more levered)
  • Dematic was acquired by KION at ~15x EBITDA

Interroll at mid-cycle EBITDA of CHF 115M:

  • At 14x EBITDA: EV = CHF 1,610M + net cash CHF 195M = CHF 1,805M = CHF 2,177/share
  • At 16x EBITDA: EV = CHF 1,840M + net cash CHF 195M = CHF 2,035M = CHF 2,454/share
  • At 18x EBITDA: EV = CHF 2,070M + net cash CHF 195M = CHF 2,265M = CHF 2,731/share

A strategic buyer (Daifuku, KION, Honeywell) would likely pay a 20-30% control premium, implying CHF 2,600-3,500/share private market value.

Margin of Safety Summary

Method Value/Share vs. CHF 2,000 Margin of Safety
NCAV CHF 310 -84.5% Negative (price far above NCAV)
Tangible Book CHF 533 -73.4% Negative
Graham Number (sqrt(22.5 * 73.18 * 552.93)) CHF 963 -51.8% Negative
DCF Conservative CHF 2,400 +20.0% 17%
DCF Moderate CHF 2,750 +37.5% 27%
Private Market (16x mid-cycle EBITDA) CHF 2,454 +22.7% 18%
Owner Earnings at 12x CHF 1,159 -42.0% Negative
Owner Earnings at 18x CHF 1,739 -13.1% Negative

Weighted Fair Value Estimate: CHF 2,400-2,600

The margin of safety at CHF 2,000 is approximately 15-23% -- below the 30% threshold required for a confident buy without a near-term catalyst. The stock is fairly valued to modestly undervalued, but not in the "fat pitch" zone.

Phase 3: Moat Analysis

Moat Sources

1. Platform/Ecosystem Moat (Primary)

Interroll has built a modular platform strategy where system integrators design their solutions around Interroll's standardized components. Key platforms include:

  • Modular Conveyor Platform (MCP) and MCP Play
  • Light Conveyor Platform (LCP) & High Performance Platform (HPP)
  • Modular Pallet Conveyor Platform (MPP)
  • Dynamic Storage Solutions
  • DC Platform (drum motors)
  • AMR Top Module
  • Modular Hygienic Platform (MHP)

This platform approach creates ecosystem lock-in: system integrators invest in training, documentation, and integration expertise around Interroll platforms. Switching to a competitor's platform requires redesigning entire systems. End-users benefit from global spare parts availability and consistent quality.

Switching Cost Metric:

  • Cost to switch = Integrator retraining (6-12 months) + system redesign + testing/certification
  • Annual customer value = Recurring component purchases + maintenance
  • Switching cost ratio: Estimated 2-3x annual spend, creating strong retention

2. Quality/Reliability Reputation

In mission-critical logistics (airports, parcel sorting at 10,000+ items/hour), downtime is enormously expensive. A conveyor roller that fails at a DHL sorting hub can delay thousands of packages. Interroll's reputation for reliability and quality (ISO 9001 across all plants, 60+ years of engineering heritage) creates preference among risk-averse system integrators. This is a "sleep at night" factor that supports pricing power.

3. Global Scale in Niche Market

With CHF 527M revenue in a CHF 6-8B market (~8-11% share), Interroll is the largest pure-play globally. This scale advantage supports:

  • R&D investment (CHF 20-25M annually) that smaller competitors cannot match
  • 16 manufacturing plants across 36 subsidiaries worldwide
  • Global spare parts and service network
  • Brand recognition as the "safe choice" for integrators

4. Neutral Vendor Status

Unlike Daifuku or KION/Dematic, which compete with their integrator customers by offering complete systems, Interroll maintains strict neutrality -- selling only components and platforms to integrators, never competing for end-user projects. This neutrality is a critical trust factor that makes integrators prefer Interroll over vertically integrated competitors.

Moat Durability Assessment

Threat Severity (1-5) Timeline Mitigation
AMR/AGV replacing fixed conveyors 3 5-10 years AMR Top Module; hybrid solutions
Chinese manufacturers commoditizing rollers 3 3-7 years Platform lock-in, quality gap, local support
Customer power (Amazon building in-house) 2 Ongoing Amazon is end-user, not direct customer
Technology leapfrog by competitor 2 3-5 years Strong R&D, 60+ years IP, platform moat
Disintermediation (integrators bypassed) 1 10+ years Integrators provide essential design & install

Moat Width: Narrow-to-Wide (strong platform ecosystem, but in a cyclical industrial market with eventual AMR disruption risk)

10-Year Moat Trajectory: Stable to slightly widening. The platform ecosystem deepens over time as more integrators build around Interroll standards. AMR risk is real but Interroll is adapting (AMR Top Module). The biggest risk is not moat erosion but market displacement.

Phase 4: Management & Incentive Analysis

Leadership Transition

Role Person Since Background
CEO Markus Asch Mar 2025 Board member since 2020; mechanical engineering; strategic company alignment experience
CFO Heinz Hossli Long-tenured Strong capital allocation track record
Chairman Paul Zumbuehl - Provides continuity

The CEO transition from Ingo Steinkruger (CEO since May 2021) to Markus Asch (March 2025) is a deliberate, planned handover. Asch was recruited to the Board in 2020 specifically as a potential CEO successor, giving him 5 years of board-level familiarity with the business. The Board has stated he is "excellently qualified to get Interroll back on its long-standing growth trajectory."

Ownership Structure

Shareholder Group % Ownership
Free Float 92.0%
Founding Families (Specht, vom Stein) 10.7%
Management & Board 0.15%

Skin in the Game Assessment: The founding family stake has declined from 13.0% (2023) to 10.7% (2024), which is a negative signal. Management ownership at 0.15% is low for a company of this size. However, Ingo Specht (founding family) has been on the Board since 2006, providing alignment with long-term value creation.

Capital Allocation Track Record (5-Year)

Use of FCF Amount (CHF M) % of Total Quality
Dividends (2020-2024) 119.5 40% Consistent, progressive policy
Share Buybacks (2020-2021) 53.3 18% Executed at reasonable prices
CapEx (Growth above maintenance) ~40 13% Plant expansion in 2020-2021
Cash Accumulation ~90 30% Fortress balance sheet; may be sub-optimal

Assessment: Capital allocation has been conservative and disciplined. The company has accumulated CHF 204M in cash (23.5% of market cap), which some might view as sub-optimal. However, this provides tremendous optionality for:

  • Acquisitions (Interroll India acquired Sep 2024 for modest sum)
  • Share buybacks at depressed prices
  • Accelerated R&D investment in software and AMR integration

Munger's Question: "If I were management with these incentives, what would I do?" Given the low personal ownership, management might be tempted to pursue acquisitions rather than buybacks, since acquisitions grow the company (and thus compensation) while buybacks shrink it. The strong cash position makes this temptation real. However, Interroll's historical discipline (small bolt-on acquisitions only) and the new CEO's stated focus on organic growth and market share recovery are reassuring.

Phase 5: Catalyst Analysis

Identified Catalysts

Catalyst Type Timeline Probability Impact
Logistics CapEx recovery External H2 2026-2027 60% +25-30% re-rating
Share buyback at depressed prices Internal 2026 30% +5-10% sentiment
New CEO strategic clarity Internal Mar 2026 results 50% +10-15% if compelling
E-commerce reacceleration External 2026-2027 40% +15-20% revenue lift
Acquisition using cash hoard Internal 2026-2027 35% -10% to +20% depending on quality
India market penetration Operational 2025-2028 50% +5-10% revenue

No Catalyst Assessment

The primary catalyst -- cyclical recovery in logistics CapEx -- is probable but timing is uncertain. The market tends to anticipate cyclical recoveries 6-12 months early, so the stock could re-rate before earnings improve. However, without a definitive catalyst, we require a larger margin of safety (30%+ vs. 20%).

Phase 6: Decision Synthesis

Megatrend Resilience Screen

Megatrend Score Notes
China Tech Superiority 0 Mixed: China is both a market (growth) and a competitive threat
Europe Degrowth -1 ~40% European revenue; exposed to European industrial weakness
American Protectionism +1 Benefits from nearshoring (requires new warehouse construction)
AI/Automation +2 Direct beneficiary of warehouse automation and Industry 4.0
Demographics/Aging 0 Neutral; warehouse labor shortage drives automation demand
Fiscal Crisis 0 No government dependency; B2B pricing power
Energy Transition +1 Energy-efficient conveyor systems; not fossil-dependent
Total +3 Tier 2 "Resilient"

Expected Return Scenarios

Scenario Probability 3-Year Price Return Weighted
Bull: Revenue recovers to CHF 650M+, margins expand 20% CHF 3,500 +75% +15.0%
Base: Gradual recovery to CHF 580M, stable margins 45% CHF 2,600 +30% +13.5%
Bear: Stagnation at CHF 500M, margin pressure 25% CHF 1,800 -10% -2.5%
Disaster: AMR disruption, revenue decline to CHF 400M 10% CHF 1,200 -40% -4.0%
Expected 3-Year Return 100% +22.0%

Annualized Expected Return: ~6.8% -- acceptable but not exceptional for a quality business.

Position Sizing

Position Size = Base (3%) × (MOS 17% / Target 30%) × (Quality 85/100) × (1 - Risk 0.22) × Catalyst (0.85)
= 3% × 0.57 × 0.85 × 0.78 × 0.85
= 0.96% → Round to 1.0% starter position if entry criteria met

At current prices, position size would be minimal. At CHF 1,800 (accumulate price), full 2-3% position sizing applies.

Graham Criteria Check

# Criterion Test Pass?
1 Adequate Size Revenue CHF 527M > CHF 100M PASS
2 Strong Financial Condition CR 4.32 > 2.0, almost no LT debt PASS
3 Earnings Stability Positive earnings all 5 years PASS
4 Dividend Record Uninterrupted dividends 10+ years PASS
5 Earnings Growth EPS CHF 73 vs ~CHF 50 (10 years ago) > 33% growth PASS
6 Moderate P/E P/E 27.3x > 15x FAIL
7 Moderate P/B P/B 3.6x > 1.5x; P/E x P/B = 98 > 22.5 FAIL

Fails Graham's defensive criteria on valuation grounds, as expected for a quality business.

Final Recommendation

+-------------------------------------------------------------+
|                   INVESTMENT RECOMMENDATION                    |
+-------------------------------------------------------------+
| Company: Interroll Holding AG     Ticker: INRN               |
| Current Price: CHF 2,000          Date: Feb 21, 2026         |
+-------------------------------------------------------------+
| VALUATION SUMMARY                                              |
| +-------------------------+-----------+---------------------+ |
| | Method                  | Value     | vs Current Price    | |
| +-------------------------+-----------+---------------------+ |
| | Graham Number           | CHF 963   | -51.8% (overvalued) | |
| | Tangible Book Value     | CHF 533   | -73.4% (overvalued) | |
| | NCAV                    | CHF 310   | -84.5% (overvalued) | |
| | DCF (Conservative)      | CHF 2,400 | +20.0% MOS          | |
| | DCF (Moderate Recovery) | CHF 2,750 | +27.3% MOS          | |
| | Private Market Value    | CHF 2,454 | +22.7% MOS          | |
| | Owner Earnings (15x)    | CHF 1,449 | -27.6% (overvalued) | |
| | Owner Earnings (20x)    | CHF 1,932 | -3.4% (overvalued)  | |
| +-------------------------+-----------+---------------------+ |
|                                                                |
| INTRINSIC VALUE ESTIMATE: CHF 2,500 (weighted average)        |
| MARGIN OF SAFETY: 20%                                          |
+-------------------------------------------------------------+
| RECOMMENDATION:  [x] WAIT                                     |
+-------------------------------------------------------------+
| STRONG BUY PRICE:       CHF 1,650 (34% below IV)             |
| ACCUMULATE PRICE:       CHF 1,900 (24% below IV)             |
| FAIR VALUE:             CHF 2,500                              |
| TAKE PROFITS PRICE:     CHF 3,000 (20% above IV)             |
| SELL PRICE:             CHF 3,750 (50% above IV)             |
+-------------------------------------------------------------+
| POSITION SIZE: 2-3% at accumulate price                       |
| CATALYST: Logistics CapEx recovery (H2 2026+)                |
| PRIMARY RISK: AMR displacement of fixed conveyor systems       |
| SELL TRIGGER: Op. margin < 10% for 2 consecutive periods      |
+-------------------------------------------------------------+

Sources Used & Data Extracted

Primary Web Sources

Source URL Key Data
Interroll 2024 Annual Report (Financial) investors.interroll.com/reporting/annual-report-2024/financial-report Revenue, EBITDA, EBIT, net income, margins, balance sheet
Interroll 2024 Capital Market investors.interroll.com/reporting/annual-report-2024/capital-market EPS, dividends, P/E, shares outstanding, shareholder structure
StockAnalysis.com stockanalysis.com/quote/swx/INRN/ 5-year income statement, balance sheet, cash flow
CompaniesMarketCap companiesmarketcap.com/interroll/ Historical share price returns
MarketScreener marketscreener.com/quote/stock/INTERROLL-HOLDING-AG-73849/ Current price, 52-week range, EV, estimates
Interroll Corporate interroll.com Business model, products, competitive position, management

Data Validation

Metric Primary Source Cross-Check Consistent?
Revenue FY2024 Interroll IR: CHF 527.1M StockAnalysis: CHF 527.11M Yes
Net Income FY2024 Interroll IR: CHF 62.5M StockAnalysis: CHF 62.50M Yes
Equity FY2024 Interroll IR: CHF 472.2M StockAnalysis: CHF 472.21M Yes
EPS FY2024 Interroll IR: CHF 73.18 StockAnalysis: CHF 75.55 Minor variance*
Current Price MarketScreener: CHF 2,000 StockAnalysis: CHF 2,000 Yes

*EPS variance likely due to diluted vs. basic calculation