Wendel Se · EURONEXT:MF
Wendel — H1 2017 Earnings Presentation
57 slides from Wendel's earnings presentation, Sep 7, 2017
Slide 1: H1 2017 results
LONG-TERM INVESTOR H1 2017 results September 7, 2017 H1 2017 results | September 7, 2017 1
Slide 2: H1 2017 key figures
H1 2017 key figures Consolidated sales of €4.2bn, up +10.0% Consolidated net income of €125.8m, €31.3m Group share NAV as of August 25, 2017: • €165.8 per share, up +13.7% over 12 months • LTV ratio @ 11.5% and net debt of €1bn H1 2017 results | September 7, 2017 2
Slide 3: Group's main unlisted companies: performance in H1 2017
Group’s main unlisted companies: performance in H1 2017 IHS Constantia Flexibles +15.4% 545.9 +1.7% 734.3 +0.9% Sales, € 721.9 organic growth Sales, $ 473.0 +18.7 % 134.0 112.9 EBITDA, € 88.0 90.5 EBIT, $ 24.5% 12.2% +2.7% 12.3% 23.9% H1 2016 H1 2017 H1 2016 H1 2017 Allied Universal Stahl +11.3% 2,5
Slide 4: H1 2017 performance of Group's listed companies
H1 2017 performance of Group’s listed companies Bureau Veritas Saint-Gobain +6.2% +1.3% 2,360.1 +4.4% 20,409 +3.5% Revenue, € million 2,221.4 organic growth 19,549 like-for-like Revenue, € million Adj. Operating 350.5 359.4 Operating income, € 1,368 1,465 +6.6% profit(1), € million million like-for-
Slide 5: Cautious and very selective investment activity in an expensive market
Cautious and very selective investment activity in an expensive market In H1 2017, 451 opportunities identified o/w 66% in Europe and North America 75 opportunities brought to the regional dealflow meetings 19 new opportunities were discussed by the Investment Committee Acquisition of Tsebo closed o
Slide 6: Portfolio rotation and development to enhance value creation potential
Portfolio rotation and development to enhance value creation potential Sale of 3.9% of Saint-Gobain’s share capital in May-June 2017 • 21.7m shares sold, o/w a 20m block with a 0.7% discount • €1,085m total net proceeds 55 50 Average selling price: €50.113 per share 45 Saint-Gobain share price, € 40
Slide 7: Constantia Flexibles' Labels business to be sold to Multi-Color (1/3)
Constantia Flexibles’ Labels business to be sold to Multi-Color (1/3) Key figures On July 17, 2017, Constantia Flexibles signed an agreement to sell its Labels business to Multi-Color Corporation, a US based global leader in label solutions Enterprise value of c. €1.15bn ($1.3bn) The majority of the
Slide 8: Constantia Flexibles' Labels business to be sold to Multi-Color (2/3)
Constantia Flexibles’ Labels business to be sold to Multi-Color (2/3) Product portfolio rationalization: less complexity, more synergies Exposure to the growth of labels market retained through a 16.6% equity holding in MCC Product Examples Competitive environment Same technologies and competitive e
Slide 9: Constantia Flexibles' Labels business to be sold to Multi-Color (3/3)
Constantia Flexibles’ Labels business to be sold to Multi-Color (3/3) Additional ressources to step up investments in innovation and growth Upon completion of the transaction, Constantia Flexibles will generate: ~ € 1,470m of 2016 PF net sales ~ € 183m of 2016 PF EBITDA c. 2.4x 2016 PF Net Debt/EBIT
Slide 10: Wendel financials
Wendel financials H1 2017 H1 2017 results | September 7, 2017 10
Slide 11: Consolidated sales up +10.0%
Consolidated sales up +10.0% Consolidated sales, in €m Net income from operations, in €m +10.0% 4,168.4 3,789.5 +0.6% 237.1 235.6 H1 H1 2016 2017 H1 H1 2016 2017 H1 2017 results | September 7, 2017 11
Slide 12: H1 2017 consolidated results
H1 2017 consolidated results Positive net income in H1 2017 Financial & operating Total net income, in millions of euros 357.0 expenses and taxes 125.8 Non-recurring Impact of 237.1 income goodwill allocation -120.0 -24.4 H1 2016 H1 2017 125.8 -86.8 Contribution Net income Total from from operations
Slide 13: Debt optimization: gross financial costs target below €100m
Debt optimization over the last 18 months to take advantage of the low interest rate environment Gross debt, m€ Financial costs, gross, in €m 4,136 -30.6% 2,869 93.1 -35.9% 59.7 Dec. 31, 2015 Aug. 25, 2017 H1 H1 2016 2017 Average cost of bond debt 2017 target: 4.3% 2.7% Gross financial costs < €100m
Slide 14: Net Asset Value
Net Asset Value as of August 25, 2017 H1 2017 results | September 7, 2017 14
Slide 15: NAV of €165.8 as of August 25, 2017
NAV of €165.8 as of August 25, 2017 (in millions of euros) Aug. 25, 2017 Listed equity investments Number of shares Share price(1) 4,162 • Bureau Veritas 177.2 million €19.7 3,497 • Saint-Gobain 14.2 million €46.9 664 Unlisted investments and Oranje-Nassau Développement(2) 4,535 Other assets and lia
Slide 16: Main changes in Net Asset Value
Main changes in Net Asset Value In millions of euros Change in Bureau 8,146 Veritas value FX impact(1) +21 Holding & net financial -153 Change in costs Saint-Gobain value Other -120 7,824 -53 -17 NAV as of May 5, 2017 NAV as of Aug. 25, 2017 (1) Estimated FX impact excluding FX impacts on Bureau Ver
Slide 17: NAV per share multiplied by 6 in 8.5 years
Value creation NAV per share (€) NAV per share multiplied by 6 in 8.5 years €165.8 €28.0 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 8/25/17 H1 2017 results | September 7, 2017 17
Slide 18: A diversified geographic & sectoral exposure
A diversified geographic & sectoral exposure REBALANCED GEOGRAPHIC EXPOSURE (1) REBALANCED SECTORAL EXPOSURE (1) Energy Africa & other North America Telecom & 12% 20% 22% infrastructure 15% Industry 7% Automotive & transportation Health 9% 5% Eastern Europe 2% Gov ernment, administration Asia Pacifi
Slide 19: Double digit annualized shareholder return
Double digit annualized shareholder return Annualized TSR Annualized TSR since June 13, 2002 since January 1, 2009 19.1% 13.9% 7.4% 3.6% Euro Stoxx 50 Wendel Euro Stoxx 50 Wendel total net return total net return Source: FactSet average last 20 trading days TSR as prior to 08/25/2017 H1 2017 results
Slide 20: Conclusion
Conclusion H1 2017 results | September 7, 2017 20
Slide 21: 2017-2020 main targets
2017-2020 main targets DEVELOP & INVEST CRYSTALLIZE VALUE If Wendel invests €3-4bn total equity, Continue to develop our portfolio depending on markets conditions, in companies over the long-term: Europe, Africa, North America & South- DOUBLE-DIGIT TSR • Bureau Veritas East Asia in companies offerin
Slide 22: Appendix
Appendix H1 2017 results | September 7, 2017 22
Slide 23: Appendix 1: Group overview
Appendix 1 Group overview H1 2017 results | September 7, 2017 23
Slide 24: Portfolio structure
Portfolio structure GROSS ASSET VALUE: €10.7BN Unlisted assets Listed assets Cash1 Oranje-Nassau Développement Certification & verification Building materials 40.6% Equity stake 2.5% Equity stake €4.5bn sales €39.1bn sales €2.8bn Op. inc. €735m Adj. op. profit 7.2% margin 16.2% margin Date of first
Slide 25: Portfolio structure – unlisted assets
Portfolio structure – unlisted assets Mobile telephone Flexible packaging High-performance Manufacture & Security services Infrastructure in Africa coatings & leather distribution of paints finishing products • 21.4% Equity stake • 60.5% Equity stake • 75.3% Equity stake • 87.4% Equity stake • 33.2%
Slide 26: Portfolio structure – Oranje-Nassau Développement
Portfolio structure – Oranje-Nassau Développement CSP Technologies exceet Mecatherm High-performance plastics Design of embedded Industrial bakery equipment packaging electronic systems 98.3% 28.4% 98.6% Saham Group Nippon Oil Pump SGI Africa Tsebo Diversified insurance Market leader in Japan for A
Slide 27: So, why invest in Wendel?
So, why invest in Wendel? Undervalued best-in-class portfolio Overall portfolio quality & Diversification Access to African growth Access to unlisted assets & listed assets Long term trend exposure Mega America Africa Europe Trends IPO Assets North Clear and value creating South East Asia TSR Hidden
Slide 28: Appendix 2: Business activity
Appendix 2 Business activity H1 2017 results | September 7, 2017 28
Slide 29: Bureau Veritas
Bureau Veritas Organic revenue growth confirmed in H1 – FY 2017 outlook reaffirmed +6.2% 2,360.1 H1 2017 highlights Revenue, € million 2,221.4 Confirmed organic growth of 1.3% in H1 • All businesses apart from M&O on improving trends vs. FY 2016 • Growth Initiatives accelerating, up organically 7.1%
Slide 30: Saint-Gobain
Saint-Gobain Significant progress in results across the board +4.4% 20,409 +3.5% like-for-like 2017 priorities Revenue, € million 19,549 • Focus on sales prices amid a stronger uptick in inflation • Additional cost savings of more than €270m over the year (calculated on the 2016 cost base), includin
Slide 31: IHS
IHS Solid growth driven by portfolio expansion, increased LUR and price resets with customers +15.4% 545.9 Revenue, USD H1 2017 highlights million 473.0 Strong sales growth driven by: • Completion of HTN acquisition in June 2016 • Continued portfolio expansion • Increase in tenancy ratio • Price res
Slide 32: Constantia Flexibles
Constantia Flexibles Refocus on flexible packaging business +1.7% H1 2017 highlights 721.9 734.3 Revenue, € million Organic revenue growth impacted by Food Division’s activity in emerging markets 734.3 • +0.9% organic growth resulted from opposing trends: good volume growth in Pharma (+4% organic gr
Slide 33: Stahl
Stahl Profitable growth and leading role played in consolidating the leather chemicals market +7.1% H1 2017 highlights 354.3 330.7 Revenue, € million Sales growth (+7.1%) driven by volume growth and acquisitions • +2.6% organic growth thanks to solid to strong volume growth in all divisions • +3.6%
Slide 34: Allied Universal
Allied Universal Successful post-merger integration underway +11.3% 2,589.6 H1 2017 highlights 2,326.4 Strong pro forma sales growth driven by add-on acquisitions Revenue, $ million • +1.6% organic growth : One fewer day in H1 2017 versus H1 2016 offset the otherwise strong organic growth of busines
Slide 35: Cromology
Cromology Transforming plan launched to improve profitability in a difficult market environment +1.8% 375.9 382.6 H1 2017 highlights Revenue, € million Flat organic growth (+0.1%) • +2.3% total growth o/w +0.4% organic excluding Argentina • +1.1% in France • Small erosion (-0.4%) in sales in Souther
Slide 36: Mecatherm
Mecatherm Slight increase of order intakes in H1 2017 and significant decrease in revenue and EBITDA 62.1 -31.1% H1 2017 highlights 42.8 Slight increase of orderintakes (+3.2%) Revenue, € million • Growth in the Soft & Pastry segment • Slowdown of historical core “Crusty” bread segment • Record perf
Slide 37: CSP Technologies
CSP Technologies Good contribution from newly integrated Maxwell Chase +3.1% Key figures 62.6 64.5 H1 2017 highlights Total growth of +3.1% Revenue, $ million • Organic growth of -4.4% was anticipated. It was caused by a confectionary customer partially insourcing its production in Q2 2016 and an ex
Slide 38: exceet
exceet Operational results and business alignment moving ahead +8.7% 71.1 Revenue (1), € million 65.4 H1 2017 highlights Sales up +8.1% in H1, organically • Q2 sales at €35.7m, highest quartely level since 2013 EBITDA margin up 90 bps (6.3%) EBITDA (1), € million EBITDA margin, % 3.5 4.5 • Encouragi
Slide 39: Saham
Saham Solid organic growth in H1 2017 Insurance (Saham Finances): Consolidated revenues up Insurance: H1 2017 highlights +8.6% in MAD (1) million • All Saham insurance entities saw gross premiums rise in H1 6 165 2017 5 679 +8.6% • Organic growth was +10.9% in Morocco (41% of gross premiums), +34.2%
Slide 40: Nippon Oil Pump
Nippon Oil Pump Strong profitable growth in H1 2017 +9.3% 2,924 2,675 Revenue, ¥ million H1 2017 highlights Strong organic growth +9.5% due to strong demand in all geographies & products EBITDA (1), ¥ million • Trochoid pump sales +4.5% 635 • Hydraulic motor sales +19.2% EBITDA (1) margin, % 422 21.
Slide 41: Tsebo
Tsebo Strong performance, driven by compelling organic & external growth, and positive FX impact 269.3 H1 2017 highlights +25.0% Strong revenue growth of +25.0% Revenue, $ million 215.5 • Organic growth (+7.3%) driven by Facilities Management, Cleaning, Catering & Protection • Positive scope change
Slide 42: SGI Africa
SGI Africa Update • 2 shopping malls in operation, in Abidjan (Côte d'Ivoire) • PlaYce Marcory (opened in December 2015) is 100% commercialized, and welcomed over 1.5 million visitors during H1 • PlaYce Palmeraie (opened in June 2017) is over 95% commercialized, with traffic in line with expectation
Slide 43: Appendix 3: Financial information as of June 30, 2017
Appendix 3 Financial information as of June 30, 2017 H1 2017 results | September 7, 2017 43
Slide 44: H1 2017 consolidated sales
H1 2017 consolidated sales Consolidated sales in millions of euros H1 2016 H1 2017 Δ Organic Δ Bureau Veritas 2,221.4 2,360.1 +6.2% +1.3% Constantia Flexibles (1) 721.9 734.3 +1.7% +0.9% Cromology 375.9 382.6 +1.8% +0.1% Stahl 330.7 354.3 +7.1% +2.6% Oranje-Nassau Développement 139.7 337.1 +141.3% -
Slide 45: Sales of equity-accounted companies
H1 2017 consolidated sales Sales of equity-accounted companies in millions of euros H1 2016 H1 2017 Δ Organic Δ Allied Universal (1) n.a. 2,393.3 n.a. +1.6%(2) IHS 424.1 504.6 +19.0% n.a. Oranje-Nassau Développement exceet (3) 65.4 71.1 +8.7% +8.1% SGI Africa (4) n.a. 3.5 n.a. n.a. (1) Company accou
Slide 46: H1 2017 consolidated results
H1 2017 consolidated results In millions of euros H1 2016 H1 2017 Δ Contribution from subsidiaries 365.9 357.0 -2.4% Financial & operating expenses and taxes -130.3 -120.0 -8.0% Net income from operations (1) 235.6 237.1 +0.6% Net income from operations, Group share (1) 83.7 85.7 2.4% Non-recurring
Slide 47: Net income from operations
Net income from operations in millions of euros H1 2016 H1 2017 Bureau Veritas 201.2 197.8 Stahl 44.6 42.6 Constantia Flexibles 35.4 35.4 Cromology 11.4 7.9 AlliedBarton 17.1 - Allied Universal (equity accounted) - 5.7 Saint-Gobain (equity accounted) 56.6 40.7 Dividend from Saint-Gobain - 17.8 IHS (
Slide 48: Consolidated income statement
Consolidated income statement In millions of euros H1 2017 H1 2016 Net sales 4,168.4 3,789.5 Other income from operations 7.8 4.2 Operating expenses -3,822.4 -3,407.8 Net gain (loss) on sale of assets -0.5 -3.3 Asset impairment -17.8 -0.1 Other income and expenses -9.8 -24.5 Operating income 325.7 3
Slide 49: Consolidated balance sheet
Consolidated balance sheet In millions of euros 06/30/2017 12/31/2016 In millions of euros 06/30/2017 12/31/2016 Share capital 188.7 188.4 Goodwill 3,487.4 3,669.3 Premiums 46.9 36.3 Intangible assets, net 2,035.9 2,238.8 Retained earnings & other reserves 1,844.8 2,399.8 Property, plant & equipment
Slide 50: Conversion from accounting presentation to economic presentation
Conversion from accounting presentation to economic presentation Equity-method investments Wendel Bureau Constantia Group (in millions of euros) Cromology Stahl OND holding Veritas Flexibles Saint- Allied total IHS companies Gobain Universal Net income from operations Net sales 2,360.1 734.3 382.6 3
Slide 51: Appendix 5: Other financial information
Appendix 5 Other financial information H1 2017 results | September 7, 2017 51
Slide 52: Cash bridge
Cash bridge From August 26, 2016 to August 25, 2017 In millions of euros Net financial +1,085 costs 2017 bond @4.375% -65 repayment -120 Acquisition of Share Bureau Veritas buyback +300 shares -637 Investment -47 Other 1,814 in IHS 1,863 -507 Sale of -57 -41 6.5-y bond Bureau issue @1% Holding Verit
Slide 53: Bank and bond debt as of June 30, 2017
Bank and bond debt as of June 30, 2017 December 31, 2016 June 30, 2017 In millions of euros Nominal amount Maturity Nominal amount Maturity Bank debt related to Saint-Gobain Undrawn Mar. 2020/€500m - - Syndicated credit Undrawn Nov. 2019/€650m Undrawn Nov. 2019/€650m Wendel bond debt 3,377 3,377 507
Slide 54: Financial agenda
Financial agenda H1 2017 results | September 7, 2017 54
Slide 55: Financial agenda
Financial agenda 11/30/2017 2017 Investor Day / Publication of NAV and trading update (pre-market release) 03/22/2018 2017 full-year earnings / Publication of NAV (pre-market release) 05/17/2018 2018 Shareholders' Meeting / Publication of NAV and trading update (before Shareholders’ Meeting) 09/06/2
Slide 56: Disclaimer
Disclaimer • This document has been prepared by Wendel S.E. (“Wendel”) solely for use at the 2017 half-year results presentation, to be held on September 7, 2017. This document must be treated confidentially by attendees at such presentation and may not be reproduced or redistributed to any other pe
Slide 57: H1 2017 results | September 7, 2017
H1 2017 results | September 7, 2017 57