Wendel Se · EURONEXT:MF
Wendel — H1 2012 Earnings Presentation
42 slides from Wendel's earnings presentation, Aug 30, 2012
Slide 1: H1 2012 results
August 30, 2012 H1 2012 results
Slide 2: Highlights since the start of 2012
Highlights since the start of 2012 ► Sale of Deutsch on April 3, 2012 in excellent terms €960M net sale proceeds ► Further reduction in gross debt €889M in debt repaid as of August 21, 2012 ► Financial structure further optimized New undrawn financing of €700M on Saint-Gobain, maturity 2017 ► Contin
Slide 3: Summary of H1 2012 results
Summary of H1 2012 results ■ Consolidated sales up 12.9% at €3,260M Income ■ Net income from business sectors, Group share of €139M statement ■ Net income, Group share of €725M (up 60.2%) ■ Sound cash position of €918M as of June 30, 2012 Balance sheet ■ Reduction in gross debt of €879M as of June 3
Slide 4: Strengthened financial structure
Strengthened financial structure
Slide 5: Wendel has further strengthened its financial structure
Wendel has further strengthened its financial structure During the first half 2012: • Early repayment of €250M of the syndicated loan • Repayment of €560M in debt with margin calls • €800M in interest-rate hedges extended at favorable terms over 2014-15 • S&P rating upgraded from "BB-" to "BB, stabl
Slide 6: Bond and bank debt structure
Bond and bank debt structure (excluding accrued interest) 692 644 663 Bond debt ■ €79M in bond debt repurchased since beginning of 2012: 400 ► €49M of 2014 maturity 300 ► €30M of 2016 maturity ■ Average maturity of 3.8 years ■ No repayment before November 2014 2012 2013 2014 2015 2016 2017 2018 (€M)
Slide 7: Steady reduction in gross debt
Steady reduction in gross debt Gross debt reduced by €4.6bn €8,445M or 18% p.a. on average Cumulative reduction of €4.6bn since beginning of 2009 (down 55%), €7,266M including €889M in 2012 2,098 €6,315M 1,548 Average maturity remains long 729 €4,735M €3,838M (3.6 years as of August 21, 2012) 3,506
Slide 8: Sound cash position and substantial financing
Sound cash position and substantial financing €874M in cash as of August 21, 2012 including €739M 2.56 unpledged 1.95 1.96 Available cash less and less sensitive to margin calls 1.61 1.44 €1,150M in available lines of 1.25 1.40 1.05 credit 0.80 0.87 0.90 (average maturity of 4.5 years), 0.86 0.70 0.
Slide 9: LTV ratio sharply reduced
LTV ratio sharply reduced ► Rating upgraded by S&P on April 11, 2012 from "BB-" to "BB", with a stable outlook ► According to S&P: “The positive rating action reflects management's continuous efforts to reduce debt since late 2009, and the more recent, significant drop in Standard & Poor's loan-to-v
Slide 10: H1 2012 results
H1 2012 results
Slide 11: H1 2012 consolidated sales
H1 2012 consolidated sales Consolidated sales (2) (in millions of euros) H1 2011 H1 2012 Δ Organic Δ Bureau Veritas 1,622.8 1,861.6 14.7% 8.1% Materis 1,022.5 1,043.1 2.0% 0.2% Stahl 172.1 184.6 7.2% 6.2% Oranje-Nassau Développement (1) 69.4 170.6 n.s. n.s. Consolidated sales 2,886.7 3,259.9 12.9% 5
Slide 12: H1 2012 consolidated income
H1 2012 consolidated income (in millions of euros) H1 2011 H1 2012 Δ Consolidated subsidiaries 429.3 364.8 -15.0% Financing, operating expenses and taxes (159.4) (123.8) -22.4% Net income from business sectors (1) 269.9 241.0 -10.7% Net income from business sectors (1) Group share 174.8 139.0 -20.5%
Slide 13: H1 2012 net income from business sectors
H1 2012 net income from business sectors (in millions of euros) H1 2011 H1 2012 Δ Constant scope Bureau Veritas 168.6 194.5 +15.3% Materis 26.3 -0.8 Stahl 6.7 13.1 +93.7% Saint-Gobain (equity-accounted) 153.7 111.0 -27.8% Sub-total 355.4 317.8 -10.6% Change in scope Deutsch 33.9 24.9 Oranje-Nassau D
Slide 14: Non-recurring income
Non-recurring income (in millions of euros) H1 2011 H1 2012 Asset impairment (60.3) (42.3) Capital gains on sale 449.7 689.2 of which sale of Legrand block 426.7 - of which sale of Deutsch - 689.2 Dilution gain (loss) (11.4) (5.1) Impact of goodwill allocation (80.8) (87.5) Other (47.2) 5.3 Non-recu
Slide 15: Results of Group companies
Results of Group companies
Slide 16: Bureau Veritas
Bureau Veritas Strong growth in earnings (in €M) H1 2011 H1 2012 Δ GSIT Marine 7% 9% Consumer Net sales 1,622.8 1,861.6 +14.7% Products 11% Operating income (1) 259.5 295.6 +13.9% Industry 21% Commodities % of net sales 16.0% 15.9% -10 bps 18% IVS Net income, group share (1) 164.2 189.2 +15.2% 13% C
Slide 17: Saint-Gobain
Saint-Gobain More difficult environment than in H1 2011 (in millions of euros) H1 2011 H1 2012 Δ Verallia 9% Net sales 20,875 21,590 +3.4% Innovative Materials 22% Operating income 1,720 1,512 -12.1% % of net sales 8.2% 7.0% -120 bps Building Construction products distribution 25% Net income (1) 902
Slide 18: Saint-Gobain: Additional measures to deal with the economic situation
Saint-Gobain: Additional measures to deal with the economic situation ► Cost-cutting measures focused primarily on Europe: • €750M full-year impact, including: o €500M in 2012 (€170M in H1 2011) o €250M in 2013 (compared with 2012) ► Continued vigilance on cash generation • Reduction in capital expe
Slide 19: Legrand
Legrand 2012 objectives confirmed (in millions of euros) H1 2011 H1 2012 Δ Net sales 2,107.8 2,223.7 +5.5% Rest of France 23% World Adjusted operating income (1) 442.7 456.5 +3.1% 30% % of net sales 21.0% 20.5% -50 bps Italy 14% USA / Net income – group share 266.4 268.7 +0.9% (2) Canada Rest of 16%
Slide 20: Materis
Materis Brisk business in emerging markets (in millions of euros) H1 2011 H1 2012 Δ Net sales 1,022.5 1,043.1 +2.0% Aluminates 18% EBITDA (1) 140.7 129.7 -7.8% Paints % of net sales 13.8% 12.4% -140 bps 38% Admixtures 11% Operating income (1) 106.3 95.9 -9.8% % of net sales 10.4% 9.2% -120 bps Morta
Slide 21: Materis Paints
Materis Paints High-impact action plan ► Action plan focused on France and Southern Europe initiated end-2011 • Optimize purchases, including in low-cost countries for ancillary products • Rationalize distribution network • Simplify industrial footprint, in particular following acquisitions in Italy
Slide 22: Stahl
Stahl Robust organic growth (in millions of euros) H1 2011 H1 2012 Δ Wet-end (C&TP) Net sales 172.1 184.6 +7.2% 14% Picassian EBITDA (1) 25.1 27.8 +10.7% 4% Leather % of net sales 14.6% 15.1% +50 bps Finish Performance 46% Operating income (1) 21.2 24.4 +15.2% coatings 29% % of net sales 12.3% 13.2%
Slide 23: Oranje-Nassau Développement
Oranje-Nassau Développement Independent specialist in long-term European leader in embedded World leader in equipment for vehicle leasing electronics and security solutions industrial bakeries ■ H1 2012 sales of €141.0M, up 6.3% ■ H1 2012 sales of €90.6M, up 16.1% ■ H1 2012 sales: €29.6M ► 5.9% rise
Slide 24: Net asset value and Share price
Net asset value and Share price
Slide 25: NAV of €90.7 as of August 21, 2012
NAV of €90.7 as of August 21, 2012 (in millions of euros) 5/24/2012 8/21/2012 Listed equity investments Number of shares (millions) Share price(1) 7,021 6,898 • Bureau Veritas 56.3 €72.9 3,795 4,103 • Saint-Gobain 91.7 €26.3 2,828 2,409 • Legrand 14.4 (August 2012) / 15.4 (May 2012) €26.7 398 385 Un
Slide 26: Share price over the last 12 months
Share price over the last 12 months Share price rebased on Wendel price as of 8/21/2011 70 65 Wendel: +23.4% 60 CAC 40: +15.1% 55 50 45 40 Share price performance Total Shareholder Return (annualized) August 21, 2012 12 months Since 2002 (*) 12 months Since 2002 (*) Wendel +23.4% +149.7% 26.1% 12.1%
Slide 27: Additional buyback of Wendel shares
Additional buyback of Wendel shares ► Highest discount in the past three years -45% -40% -35% -30% -25% Over the last three years: -20% • NAV increased 2.4 times -15% • Wendel share price doubled -10% -5% 0% 2,244,561 shares held in treasury (4.4% of share capital) of which 450,000 were acquired in
Slide 28: Gross revalued assets as of August 21, 2012
Gross revalued assets as of August 21, 2012 €8.6bn in gross managed assets Bureau Veritas is the Group's largest asset. Its resilience and extensive diversification Bureau make it a mainstay of the portfolio. Veritas 48% Saint-Gobain is Wendel's second-largest asset and has a great deal of upside po
Slide 29: Wendel's growth strategy
Wendel's growth strategy
Slide 30: Wendel in the medium term
Wendel in the medium term New, value-creating flexibility €874M in cash New investments: Direct equity investments of €200-500M Continue to improve financial structure Oranje-Nassau Développement to continue pursuing its strategy Objective 1 Objective 2 Objective 3 Lasting access to Creating val
Slide 31: New investments
New investments Investment market structure Transactions very concentrated in Europe and the USA In number of transactions In total value (in billions of euros) Western Europe 35 35 Europe de l'ouest Western Europe Europe de l'ouest 1,031 25 41 North America 60 Amérique du Nord Amérique du Nord Nort
Slide 32: Wendel's growth strategy
Wendel's growth strategy New investments Oranje-Nassau Wendel Développement €200 – 500M Up to €200M of equity per investment in equity per investment In geographic regions well known All geographic regions to Wendel (Germany, Benelux, North America Diversification and growth and France) Exposure to
Slide 33: Appendix 1: Group structure
Appendix 1: Group structure
Slide 34: Group structure
Group structure Leading companies World leader in habitat and construction markets World leader in leather finishing products and 17.3% World leader in products and systems for low high-performance voltage installations coatings World leader in Leader in specialty 100% compliance chemicals for evalu
Slide 35: Oranje-Nassau Développement
Oranje-Nassau Développement Focus on growth, diversification and innovation opportunities 95.9% (1) 28.4%(1) 98.1%(1) 8.1% (1) Before diluted from financial instruments giving access to capital H1 2012 results – August 30, 2012 35
Slide 36: Appendix 2: Financial data as of 06/30/2012
Appendix 2: Financial data as of 06/30/2012
Slide 37: Income statement
Income statement In millions of euros H1 2012 H1 2011 Net sales 3,259.9 2,886.7 Other income from operations 3.1 1.0 Operating expenses (2,922.1) (2,559.5) Recurring operating income 340.8 328.3 Other operating income and expenses (12.3) (44.1) Operating income 325.5 284.2 Income from cash and cash
Slide 38: Consolidated balance sheet
Consolidated balance sheet In millions of euros 30.06.2012 31.12.2011 In millions of euros 30.06.2012 31.12.2011 Goodwill, net 2,980.1 2,787.8 Share capital 202.0 202.9 Intangible assets, net 1,546.3 1,489.4 Share premiums 248.2 252.5 Property, plan and equipment, net 1,448.8 1,434.9 Retained earnin
Slide 39: Conversion from accounting presentation to economic presentation
Conversion from accounting presentation to economic presentation Bureau Oranje- Equity method Holdings Total Materis Deutsch Stahl Veritas Nassau Saint-Gobain Legrand Opérations Net income from business sector Net sales 1,861.6 1,043.1 - 184.6 170.6 - 3,259.9 EBITDA N/A 129.7 - 27.8 N/A Adjusted ope
Slide 40: Bank and bond debt as of December 31, 2011 and June 30, 2012
Bank and bond debt as of December 31, 2011 and June 30, 2012 12/31/2011 6/30/2012 Bank debt linked to Saint-Gobain 1,385 Maturity 825 Maturity 560 Mar. 2014 to Mar. 2014 - 425 Jan. 2016 to Jan. 2017 425 Jan. 2016 to Jan. 2017 400 June 2015 400 June 2015 Maturity Syndicated loan 500 Sept. 2013 to Sep
Slide 41: Saint-Gobain financing and cash as of December 31, 2011 and June 30, 2012
Saint-Gobain financing and cash as of December 31, 2011 and June 30, 2012 12/31/2011 6/30/2012 Total cash(1) 855 918 Free cash(1) 708 766 Cash pledged 147 152 Listed securities(2) pledged as 2,159 1,313 Saint-Gobain, Bureau Veritas and Legrand collateral shares Unpledged, listed securities(2) 4,114
Slide 42: Disclaimer
Disclaimer • This document has been prepared by Wendel S.A. (“Wendel”) solely for use during the presentation of its first-half 2012 results, to be held on August 30, 2012. This document must be treated confidentially by attendees at such presentation and may not be reproduced or redistributed to an