Slide 1: Full-Year 2019 results
Full-Year 2019 results 2020 March 19, 2020 LONG-TERM INVESTOR 1 Annual Results 2019 | March 19, 2020
Slide 2: 2019 in Brief
2019 in Brief Conservative portfolio management Emphasis on Engagement & ESG Good 2019 results, mainly driven by Bureau Veritas’s performance & a large capital gain from the sale of most of our stake in Allied Universal Solid financial structure, €1.9bn liquidity and modest overall leverage 2 Annual
Slide 3: 2019 achievements: Conservative portfolio management
2019 achievements : Conservative portfolio management Disposals : €1.2bn in proceeds Sale of c. 79% of our stake in Allied Universal: $721m in proceeds, IRR of c.30%(1) Total exit from Saint-Gobain for a total amount of €468m Sale of PlaYce for €32.2m Capital deployment: €946m Acquisition of CPI in
Slide 4: 2019 Achievements: Emphasis on engagement & ESG
2019 Achievements : Emphasis on engagement & ESG Engagement ESG & digital focus 17 acquisitions by Group companies 3 significant refinancings (IHS, Allied Universal, Cromology) Senior appointments in our companies (Constantia Flexibles, Allied Universal, Stahl, Tsebo, Bureau Veritas) Building an amb
Slide 5: A solid financial structure and strong liquidity
2019 Achievements : A solid financial structure and strong liquidity Modest LTV Ratio : 6.0% Corporate cash balance : €1.14 billion Total liquidity of €1.9bn €750m RCF available, fully undrawn Solid dual credit rating : BBB & Baa2 Long debt tenure: 5.5 years, no maturity before 2023 As of December 3
Slide 6: Full-Year 2019 key figures: Good financial performance
Full-Year 2019 key figures: Good financial performance NAV : €166.3 per share, up 12.8% YoY (as of December 31, 2019) Consolidated sales of €8.6bn, up 2.1%, most of growth attributable to Bureau Veritas Consolidated net income of €625.6m, €399.7m Group share, positively impacted by a large capital g
Slide 7: Accelerating roll-out as a key factor in our investment strategy
Accelerating roll-out as a key factor in our investment strategy 2019: Developped a comprehensive ESG 2020: Accelerating roll-out to make ESG a strategy key factor in our investment strategy • For Wendel and our portfolio companies • New ambitious ESG strategy to be unveiled shortly in our Universal
Slide 8: Covid-19: Wendel and portfolio exposure
Covid-19: Wendel and portfolio exposure Bureau Veritas (as published on Feb. 27, 2020): • Closely monitoring the economic effect resulting from the Covid-19 outbreak • Initially impacted on the group’s operations in China (17% of Group revenue, 16,461 employees(1) and now elsewhere • Both testing-dr
Slide 9: Performance of Group companies
Performance of Group companies FY 2019 Figures are before IFRS 16, unless otherwise specified 9 Annual Results 2019 | March 19, 2020
Slide 10: Bureau Veritas
Bureau Veritas ▪ Revenues of €5.1bn, up 6.3% year-on-year, ▪ Organic growth reached +4.3% in H1 2019, of which +5.3% in Q4 ▪ Adjusted operating margin up +25bps to 16.1%(1) (16.0% at constant currency, up 20 bps) ▪ Strong improvement in free cash flow +29.2% YoY(2) ▪ Adjusted year-end net debt / EBI
Slide 11: IHS Towers
IHS Towers +5.4% annual growth ▪ +7.5% organic growth driven by new lease amendments (such as 3G and 4G upgrades), new tenants, new towers and price escalation mechanisms ▪ USD/local currency exchange rate fluctuations had a negative impact of 2.1% over total revenues EBIT(1) margin at 22.4% ▪ EBIT
Slide 12: Stahl
Stahl Sales down 6.6%, Leather division impacted by difficult market conditions in the automotive and shoe sectors ▪ Double digit volume decline partly compensated by positive price/mix effects translating into negative 7.8% organic growth ▪ Performance coatings division less affected by challenging
Slide 13: Constantia Flexibles
Constantia Flexibles -0.3% total growth: (-2.4% organic growth, +1.4% scope, +0.7% FX impact) ▪ Organic growth impacted by lower volumes in Consumer and Pharma divisions ▪ Consolidation of the Indian company Creative Polypack and the Russian company Constantia TT contributed positively to growth ▪ P
Slide 14: Tsebo
Tsebo Organic growth down 4.6% ▪ Sluggish South African macro situation (South Africa fell into a recession in the fourth quarter when GDP contracted by 1.4%) resulting in heightened local competition. Depressed local business environment which impacts companies and consumers alike ▪ Tsebo is contem
Slide 15: Cromology
Cromology +0.4% total growth ▪ Organic growth of +0.4% coming from international activities and integrated network in France but slowdown on DIY segment in France. ▪ -0.2% scope effect notably due to the disposal of integrated stores in Italy in 2018, +0.2% FX impact. EBITDA up 43% ▪ Benefitting fro
Slide 16: Crisis Prevention Institute (CPI)
Crisis Prevention Institute (CPI) On December 23, 2019, Wendel announced the completion of the Crisis Prevention Institute acquisition ▪ This acquisition will be consolidated starting from January 1st, 2020 2019 revenues of $87.7m(1), +7.8% year on year ▪ 2019 reported revenue is negatively impacted
Slide 17: Limited leverage gives a good level of financial resilience
Limited leverage hopefully gives a good level of financial resilience Net debt to EBITDA (as of december, 31, before IFRS 16) Bureau Veritas 1.9x Constantia Flexibles 2.0x Stahl 1.9x Cromology 2.7x CPI 7.2x(2) Tsebo 4.7x (1) IHS does not disclose its EBITDA (2) As per credit documentation 17 Annual
Slide 18: Balanced exposure to geographies, sectors, but COVID-19 is a global problem
Balanced exposure to geographies, sectors, but COVID-19 is a global problem We are relatively under-invested in several very hardest hit industries (leisure and hospitality, travel, commodities, oil & gas, retail for example) % OF GROSS ASSET VALUE Unlisted assets 45% Listed assets 42% Cash 13% AS O
Slide 19: Wendel financials
Wendel financials Full-Year 2019 19 Annual Results 2019 | March 19, 2020
Slide 20: Consolidated sales up 2.1%, net income from operations down 12.2%
Consolidated sales up 2.1%, net income from operations(1) down 12.2% Consolidated sales (in €m) Net income from operations (in €m) (1) +2.1% Organic +1.0% 8,562.2 Scope +0.4% -12.2% 8,389.2 FX +0.7% Bureau Veritas +6.6% 512.1 Other companies -24.4% 449.7 and disposals Wendel operating +5.6% and fina
Slide 21: Total net income Group share at €399.7 million
Total net income Group share at € 399.7 million, boosted by the capital gain on Allied Universal in millions of euros 2018 2019 Contribution from subsidiaries 680.5 589.5 Financial & operating expenses and taxes -168.4 -139.8 Net income from operations (1) 512.1 449.7 Non-recurring income 35.9 442.2
Slide 22: Net Asset Value & Return to Shareholders
Net Asset Value & Return to Shareholders 22 Annual Results 2019 | March 19, 2020
Slide 23: Dec. 31, 2019 Net Asset Value of €166.3, up 12.8% YoY
Dec. 31, 2019 Net Asset Value of €166.3, up 12.8% YoY Dec. 31, 2018 €147.4 €+18.9 Bureau Veritas: Unlisted assets: €+19.3 €+4.2 +12.8% Dividend & other: €-3.9 As per the valuation methodology, the following values have been taken into account in the NAV calculation as of December 31, 2019: • Allied
Slide 24: NAV of €166.3 as of December 31, 2019
NAV of €166.3 as of December 31, 2019 (in millions of euros) Dec. 31, 2019 Listed equity investments Number of shares Share price(1) 3,775 • Bureau Veritas 160.8 million €23.5 3,775 Investments in unlisted assets (2) 4,026 Other assets and liabilities of Wendel and holding companies(3) 101 Cash and
Slide 25: Improved debt profile as of December 31, 2019
Improved debt profile as of December 31, 2019 €1.14 bn cash + €750m undrawn credit facility Oct. 2024 Average cost of bond debt: 2.09% Average maturity: 5.5 years 500 500 €1.9 bn total liquidity 300 300 Moody’s credit rating: Baa2/stable Since September 5, 2018 S&P credit rating: BBB/stable Since Ja
Slide 26: Leverage – Net debt at low level and strong resilience of LTV
Leverage – Net debt at low level and strong resilience of LTV Improved LTV 63.5% Strong resilience of LTV in spite of 30- 47.5% 52.0% 35% market fall 36.7% 32.6% 31.9% 34.4% 22.9% 12.2% 6.1% 6.0% 8-9%(1) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pro forma market fall € billions 4.6 Net
Slide 27: Dividend
Dividend • Proposing a €2.90 per share dividend, up 3.6% 2.90 € 2.80 € 2.65 € Dividend increasing every year 2.35 € 2.15 € 2.00 € 1.85 € 1.75 € 1.25 € 1.30 € 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 In euros per share, ordinary dividend The 2011 ordinary dividend included an exceptional dis
Slide 28: Key takeaways
Key takeaways LONG-TERM INVESTOR 28 Annual Results 2019 | March 19, 2020
Slide 29: Key takeaways
Key takeaways Portfolio simplification now completed resulting in significant deleverage across the Group Increased focus on companies operating performance and their strategic moves, to 2018 enhance their ability to face difficult market conditions and to seize opportunities Tightened compliance, d
Slide 30: Q&A session
Q&A session 30 Annual Results 2019 | March 19, 2020
Slide 31: Appendix 1
Appendix 1 31 Annual Results 2019 | March 19, 2020
Slide 32: 2019 performance of Group's main unlisted companies
2019 performance of Group’s main unlisted companies EBITDA, Op. profit Organic Margin Sales Δ for BVI, growth EBIT for IHS(1) Bureau Veritas 5,099.7 +6.3% +4.3% €818.5 16.1% Constantia Flexibles €1,534.3m -0.3% -2.4% €176.8m 11.5% Crisis Prevention $87.7m +7.8% +7.8% $38.9 44.4% Institute(2) IHS $1,
Slide 33: Net Asset Value bridge in 2019
Net Asset Value bridge in 2019 In euros +1.6 -2.8 +2.6 -1.8 +1.1 Sharebuyback(1) 166.3 +18.2 Dividend paid Unlisted Saint- Others Assets Gobain 147.4 Bureau Veritas NAV per share NAV per share as of as of Dec. 31, 2018 Dec. 31, 2019 (1) 1,645,338 shares canceled in 2019 33 Annual Results 2019 | Marc
Slide 34: Appendix 2: Financial information as of Dec. 31, 2019
Appendix 2 Financial information as of Dec. 31, 2019 34 Annual Results 2019 | March 19, 2020
Slide 35: FY 2019 consolidated sales
FY 2019 consolidated sales in millions of euros 2018 2019 Δ Organic Δ Bureau Veritas 4,795.5 5,099.7 +6.3% +4.3% Constantia Flexibles 1,538.3 1,534.3 -0.3% -2.4% Cromology 665.1 667.8 +0.4% +0.4% Stahl 866.9 808.7 -6.7% -7.7% Tsebo (1) 523.4 451.8 -13.7% -4.6% Consolidated sales 8,389.2 8,562.2 +2.1
Slide 36: FY 2019 sales of companies accounted for by the equity method
FY 2019 sales of companies accounted for by the equity method in millions of euros 2018 2019 Δ Organic Δ IHS 989.6 1,099.7 +11.1% +7.5% 36 Annual Results 2019 | March 19, 2020
Slide 37: Summary table of main aggregates before and after IFRS 16
IFRS 16 - Summary table of main aggregates before and after the application of IFRS 16 Sales EBITDA (EBIT for IHS) Net debt (in millions) FY 2019 FY 2019 FY 2019 FY 2019 FY 2018 FY 2019 FY 2018 before after before after IFRS 16 IFRS 16 IFRS 16 IFRS 16 IHS $1,168.1 $1,231.1 $248.3 $276.0 $284.1 $1,15
Slide 38: Net income from operations
Net income from operations In millions of euros 2018 2019 Bureau Veritas 443.7 477.7 Stahl 110.3 94.3 Constantia Flexibles 83.2 44.2 Cromology (1) -5.2 -19.2 Tsebo 7.4 -9.2 Allied Universal (equity method) (2) 11.9 58.5 Saint-Gobain dividend 18.4 4.1 IHS (equity method) (3) 5.8 -60.9 Mecatherm 2.0 -
Slide 39: Consolidated income statement
Consolidated income statement In millions of euros 2018 2019 Net sales 8,389.2 8,562.2 Other income from operations 16.2 19.2 Operating expenses -7,638.1 -7,809.8 Net gain (loss) on sale of assets -11.0 -3.6 Asset impairment -59.1 -134.7 Other income and expenses -21.2 -9.8 Operating income 676.0 62
Slide 40: Consolidated balance sheet
Consolidated balance sheet In millions of euros 12/31/2019 12/31/2018 In millions of euros 12/31/2019 12/31/2018 Share capital 178.7 185.1 Goodwill 4,112.0 3,339.8 Premiums 53.3 50.9 Intangible assets, net 1,769.0 1,903.9 Retained earnings & other reserves 1,791.5 1,879.0 Property, plant & equipment
Slide 41: Conversion from accounting presentation to economic presentation
Conversion from accounting presentation to economic presentation Equity-method Wendel Bureau Constantia investments Group (in millions of euros) Cromology Stahl Tsebo holding Veritas Flexibles Allied total IHS companies Universal Net income from operations Net sales 5,099.7 1,534.3 667.8 808.7 451.8
Slide 42: Financial agenda
Financial agenda 42 Annual Results 2019 | March 19, 2020
Slide 43: Financial agenda
Financial agenda 04/30/2020 Q1 2020 Trading update / Publication of NAV as of March 31, 2020 (pre-market release) 06/04/2020 2020 Annual General Meeting 07/30/2020 H1 2020 results / Publication of NAV as of June 30, 2020, and condensed Half-Year consolidated financial statements (post-market release
Slide 44: Disclaimer
Disclaimer • This document has been prepared by Wendel S.E. (“Wendel”) solely for use at the 2019 annual results presentation, to be held on March 19, 2019. This document must be treated confidentially by attendees at such presentation and may not be reproduced or redistributed to any other person.
Slide 45: Annual Results 2019 | March 19, 2020
45 Annual Results 2019 | March 19, 2020