Wendel Se · EURONEXT:MF

Wendel — FY2014 Earnings Presentation

62 slides from Wendel's earnings presentation, Mar 26, 2015

  1. Slide 1: 2014 Annual results

    2014 Annual results March 26, 2015

  2. Slide 2: 2014: A transformational year

    2014: A transformational year Strategic shift to unlisted assets Return to investment grade IHS becomes EMEA leader in the industry Materis fully refocused to paints business Stahl deploys successful merger 2014 Annual Results – March 26, 2015 2

  3. Slide 3: Accelerated diversification since 2014

    Accelerated diversification since 2014 €1.2bn(1) invested in Africa, North America & Europe Additional $503m invested in IHS Acquisition of CSP Technologies in the USA Acquisition of the Austrian group Constantia Flexibles Optimized ownership of listed assets Adjustment of our stake in Saint-Gobain

  4. Slide 4: Acceleration in asset rebalancing

    Acceleration in asset rebalancing Gross asset value, in € million 12,000 Unlisted assets 3 11,344 11,000 x 30.4% 10,000 9,862 3,448 9,000 976 9.9% (2) 8,000 1,753 1,628 7,000 6,000 5,000 7,133 4,000 6,268 3,000 2,000 (1) 12/03/2012 16/03/2015 Listed equity investments Cash and marketable securities

  5. Slide 5: Most of 2013-2017 Strategic goals already achieved

    Most of 2013-2017 Strategic goals already achieved Ready to invest €2bn: c. 1/3 in Africa and other high-growth regions  c. 1/3 in Europe  c. 1/3 in North America  Diversify sectorally  and geographically,  with priority on unlisted companies  Return to investment grade status  Pay an increas

  6. Slide 6: New acquisitions

    Nn Cc 2 _— D =) Oo O 'e) 5 LO) Zz

  7. Slide 7: Constantia Flexibles

    Constantia Flexibles A major acquisition right in line with our strategy  Investment thesis ► Constantia Flexibles, a global leader in flexible packaging with Food: 57% of sales leading positions: European #2, Global #4 ► A €60bn global market whose growth is driven by secular trends such as urbani

  8. Slide 8: Large and growing market

    Large and growing market Secular trends drive demand for flexible packaging applications Global trend Demand drivers Flexible packaging solutions  Demand for packed food with longer Urbanization shelf lives Packaged food  From large to small families Growing middle Premium brand  Purchase based o

  9. Slide 9: Constantia Flexibles: Healthy growth in sales

    Constantia Flexibles Healthy growth in sales Long-term trend of sales, in € million 1,691 1,712 1,314 1,213 1,029 1,026 1,047 977 745 766 713 711 - (1) (2) FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 (1) Like for like financial statements (2) Pro forma sales 2014 Annual Results – Mar

  10. Slide 10: Constantia Flexibles: Healthy growth in EBITDA

    Constantia Flexibles Healthy growth in EBITDA Long-term trend of EBITDA, in € million EBITDA 256 240 x 3 188 170 158 143 139 136 105 108 97 15.1% 83 14.0% 14.3% 14.2% 14.9% 13.9% 14.0% 14.0% 13.9% 13.5% 11.6% 13.7% (2) (3) FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 (1) Adjusted EBIT

  11. Slide 11: Ability to drive market consolidation suggested by M&A track-record

    Ability to drive market consolidation suggested by M&A track-record Tobepal, Spain Globalpack, Mexico /USA Parikh, India Revenues: ~€100m Revenues: ~€20m Food Revenues: ~€180m Food Food Employees: 407 Employees: 1,500 Employees: 500 Rationale: Entry into Spanish flexible Rationale: Consolidation of

  12. Slide 12: CSP Technologies

    CSP Technologies Oranje Nassau Développement Wendel’s first deal in the U.S. since 2006 Healthcare products: 75% of sales  CSP Technologies  Produces specialized and patented polymer containers primarily for the healthcare industry  Leading provider of vials for blood glucose test strips  Strong

  13. Slide 13: Ongoing diversification

    Ongoing diversification Economic exposure in value as of 03/16/2015 Regions End-user markets Economic exposure of Wendel's gross asset value **(Entreprise Value), weighted by the breakdown of companies' 2014 sales *Neutral: cash & other diversified assets / ** Constantia Flexibles investment (€640m)

  14. Slide 14: Net asset value

    Net asset value

  15. Slide 15: NAV of €147.4 as of March 16, 2015

    NAV of €147.4 as of March 16, 2015 (in millions of euros) Nov. 24, 2014 March 16, 2015 (1) Listed equity investments Number of shares (millions) Share price 6,677 6,268 • Bureau Veritas 225.2 in Nov. 14 / 177.2 in Mar. 15 €20.3 4,410 3,602 • Saint-Gobain 65.8 €40.5 2,267 2,666 Unlisted equity invest

  16. Slide 16: Sound financial structure

    Sound financial structure Sustainably improved LTV ratio 45% 40.9% 40% 38.5% 36.7% 36.6% 34.6% 35% 32.6% 32.4% 31.9% 30.8% 30.3% 30% 28.0% 30.5% Investment grade LTV 25% 24.7% 21.4% 20% Pro forma LTV ratio of Constantia Flexibles acquisition @ 26.7% (1) (1) €640m of equity investment before any new

  17. Slide 17: Improved debt profile, maturity and cost

    Improved debt profile, maturity and cost No bank debt drawn, €1.5bn undrawn facilities Debt structure further simplified: 6.1m puts on Saint-Gobain fully unwound in March 2015 @ an average share price of €40.19 March 17, March 16, 2014 2015 Average bond debt maturity 3.5 4.8 +1.3 year (in years) Ave

  18. Slide 18: Robust business activity in 2014

    Robust business activity in 2014

  19. Slide 19: Strong performance of Group companies

    Strong performance of Group companies Organic growth Growth in EBITDA or operating income(1) Bureau Veritas +2.5% +5.6% Saint-Gobain +2.2% +1.6% Materis Paints +0.8% +9.1% Stahl +4.0% +41.3% IHS +129% (1) Adjusted EBITDA for Materis Paints and Stahl; operating income for Bureau Veritas and Saint-Gob

  20. Slide 20: Strong performance of Group companies

    Strong performance of Group companies Oranje-Nassau Développement Organic growth Growth in EBITDA or pre-tax income (1) Parcours +9.7% +15.6% Mecatherm +8.9% -13.3% exceet -3.4% +4.3% Nippon Oil Pump +10.2% +5.1% (1) Adjusted EBITDA for all companies except Parcours (adjusted ordinary pre-tax ordina

  21. Slide 21: Start of 2015: Slow momentum in Europe mitigated by favorable macroeconomic conditions

    Start of 2015: Slow momentum in Europe mitigated by favorable macroeconomic conditions Cost of Energy € / FX Low interest rates & Oil Bureau Veritas Saint-Gobain Stahl Constantia Flexibles Materis Paints IHS Parcours Mecatherm CSP Technologies Wendel 2014 Annual Results – March 26, 2015 21

  22. Slide 22: Bureau Veritas

    Bureau Veritas Organic growth improvement in Q4 and strong cash flow generation Δ GSIT In € million 2013 2014 Δ @ constant Consumer products 6% Marine & 14% Offshore currencies 8% Revenue 3,933.1 4,171.5 +6.1% +9.4% (1) Operating income 656.9 694.0 +5.6% +9.7% Commodities Industry % of net sales 16.

  23. Slide 23: Saint-Gobain

    Saint-Gobain Acceleration of diversification strategy (1) 2013 2014 Δ Δ (2) In € million Like-for-like excluding VNA +7.4% 1,103.0 1,027.0 Net sales 41,761 41,054 -1.7% +2.2% Operating income 2,754 2,797 +1.6% +7.0% % of net sales 6.6% 6.8% +20bps n.a. Recurring net income (3) 1,027 1,103 +7.4% n.a.

  24. Slide 24: Materis

    Materis Full refocus on Paints business achieved Closing of Successful Parex sale Fully Kerneos refinancing process refocused sale; Parex of Chryso & announced on Paints sale Materis in August business announced Paints 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Kerneos Firm offer Closing of Closing of sal

  25. Slide 25: Materis Paints

    Materis Paints Strong profitability improvement Emerging countries 8% In € million 2013 2014 Δ (1) Net sales 757.7 747.6 -1.3% (2) (3) EBITDA 61.5 67.1 +9.1% Rest of % of net sales 8.1% 9.0% +90 bps Europe 26% France (2) (3) Operating income 43.3 48.0 +10.8% 66% % of net sales 5.7% 6.4% +70 bps (1)

  26. Slide 26: Stahl

    Stahl Very successful integration of Clariant Leather Services In € million 2013 2014 (2) Δ Net sales 356.3 512.6 +43.9% Wet end EBITDA (1) 64.7 91.4 +41.3% 23% % of net sales 18.2% 17.8% -40 bps +6.2% Leather finish Operating income 56.0 76.2 +36.1% 49% -0.6% % of net sales 15.7% 14.9% -80 bps Perf

  27. Slide 27: IHS delivers outstanding growth

    IHS delivers outstanding growth Acquisitions Deal with MTN Deal with Etisalat c.9,100 towers in Nigeria Deal with MTN c.2,100 towers in Nigeria c.1,300 towers in Deal with Airtel Rwanda & Zambia c.1,100 towers in Rwanda & Zambia 2013 2014 2015 April-May. Integration of c.1,300 towers from MTN deal i

  28. Slide 28: IHS

    IHS The largest TowerCo in EMEA c.22,900* c.10,100 c.11,800 In US$ million 2013(3) 2014 Δ c.8,500 Net sales(1) 159.7 312.5 +95.7% c.5,700 Adj. EBITDA(2) 43.8 100.8 +129.9% % of net sales 27.5% 32.3% +480 bps Net financial debt / (cash) 260.2 84.9 NS c.22,900* towers in portfolio Estimated portfolio

  29. Slide 29: IHS has gained global recognition

    IHS has gained global recognition Over the last 2 years, IHS has increased its global public profile with its extensive growth. Its efforts have been rewarded with a number of high profile international awards. AFRICAN COMPANY OF THE YEAR 2015 Africa CEO Forum Awards 2015, in Geneva. IHS received th

  30. Slide 30: Mecatherm

    Mecatherm Oranje Nassau-Développement Record activity & group reorganization in 2014 Record order intake €132m In € million 2013 2014 Δ €104m Net sales 96.1 104.7 +8.9% Maintainable EBITDA(1) 16.6 14.4 -13.3% % of net sales 17.3% 13.8% -350 bps Net financial debt 49.9 46.1 -7.6% (1)Excluding managem

  31. Slide 31: Parcours

    Parcours Oranje-Nassau Développement Strong sales and profitability growth 56,500 50,763 in € million 2013 2014 Δ Net sales 309.6 339.7 +9.7% (1) Pre-tax ordinary income 21.8 25.2 +15.6% % of net sales 7.0% 7.4% +38 bps Gross operating debt 450.5 519.4 +€68.9m (1) Adjusted pre-tax income before good

  32. Slide 32: Nippon Oil Pump

    Nippon Oil Pump Oranje-Nassau Développement Solid revenue growth 2013 2014 Δ 2014 in m¥ JGAAP in m¥ JGAAP in m€ IFRS Net sales 4,844.4 5,338.7 +10.2% 38.2 (1) EBITDA 847.9 891.4 +5.1% 6.4 % of net sales 17.5% 16.7% -80bps 16.7% (1) OUT Operating income 638.4 736.9 +15.4% 4.9 % of net sales 13.2% 13.

  33. Slide 33: Consolidated results 2014

    Consolidated results 2014

  34. Slide 34: 2014 Net income from business sectors

    2014 Net income from business sectors (in millions of euros) 2013 2014 Δ Bureau Veritas 408.4 404.2 -1.0% Stahl 31.3 52.0 +66.2% Positively impacted by merger with CLS Materis 13.0 21.5 +65.4% Saint-Gobain (24m shares sold in 2014 - equity accounted) 171.4 139.3 -18.7% 2014 contribution reduced by €

  35. Slide 35: 2014 Non-recurring income

    2014 Non-recurring income (in millions of euros) 2013 2014 Gain on sale of Legrand shares 369.0 - Gain on sale of Kerneos, Parex & Chryso - 329.6 Gain (loss) on sale of Saint-Gobain shares 6.7 -106.7 Dilution gain (loss) -97.0 8.0 Change in fair value of Saint-Gobain puts 42.7 -22.5 Asset impairment

  36. Slide 36: 2014 consolidated results

    2014 consolidated results (in millions of euros) 2013 2014 Consolidated subsidiaries 653.7 599.0 Financial & operating expenses -244.0 -226.5 Net income from business sectors(1) 409.7 372.5 Net income from business sectors,(1) Group share 199.3 154.9 Non-recurring income 186.5 -56.0 Impact of goodwi

  37. Slide 37: Dividend and return to shareholders

    Dividend and return to shareholders

  38. Slide 38: Dividend to increase every year

    Dividend to increase every year €2.00 €1.85 €1.75 €1.30* €1.25 €1.00 2009 2010 2011 2012 2013 2014 proposed to shareholders at June 5, 2015 AGM (*) 2011: excluding the exceptional distribution of 1 Legrand share for every 50 Wendel shares held. 2014 Annual Results – March 26, 2015 38

  39. Slide 39: Total shareholder return

    Total shareholder return Annualized TSR from 6/13/2002 Annualized TSR from 1/1/2009 23.4% 15.0% 23.4% 5.4% 5.5% 5.5% CAC 40 Wendel CAC 40 Wendel Source: FactSet as of 3/16/2015 2014 Annual Results – March 26, 2015 39

  40. Slide 40: Investment strategy

    > ©) O + 1e) = Nn _— Cc oO ‘= + NY O > &

  41. Slide 41: What we have done since 2009

    What we have done since 2009 €2bn c. €480m to be invested by 2017 with priority on North America €640m invested in Europe Constantia Flexibles 2 €1bn €160m invested in North America CSP Technologies Investments in Acquisitions €720m invested in high Group companies 2009-2013 growth regions since 200

  42. Slide 42: What’s next?

    What’s next? Value creation in Group companies Build-up acquisitions Crystallization of value Leveraging our global presence in North America, Africa & Asia Enhancing our companies’ footprint Monitoring new investment opportunities Financial discipline Commitment to maintain durably LTV ratio <35% O

  43. Slide 43: 2015 Agenda

    2015 Agenda

  44. Slide 44: 2015 Agenda

    2015 Agenda Shareholders' Meeting / Publication of NAV and trading update Friday, June 5, 2015 (pre-market release) Thursday, September 10, H1 2015 earnings / Publication of NAV (pre-market release) 2015 2015 Investor Day / Publication of NAV and trading update (pre- Thursday, December 3, market rel

  45. Slide 45: Appendix 1: Oranje-Nassau Développement business activity

    Appendix 1: Oranje-Nassau Développement business activity

  46. Slide 46: exceet

    exceet Oranje Nassau-Développement Continous improvement in profitability in million € 2013 2014 Δ Net sales 190.8 185.3 -2.9% Health Security EBITDA 18.3 19.0 +4.3% 31% 33% % of net sales 9.6% 10.3% +70 bps Operating income 7.8 8.9 +14.5% Industry 36% % of net sales 4.1% 4.8% +70 bps Net financial

  47. Slide 47: Saham

    Saham Oranje-Nassau Développement Strong growth in 2014  Saham Finances: 2014 net premium growth  M&A activity in MAD (1) million (2014 unaudited) +10.4% ► Insurance: Saham is pursuing its external growth strategy with the acquisition of Unitrust in Nigeria, Corar in Rwanda and Elite in Saudi Arab

  48. Slide 48: Appendix 2: Group structure

    Appendix 2: Group structure

  49. Slide 49: Group Structure

    Group Structure 3 listed assets 11 unlisted assets 40.1% c. 26% 75.3% 81.0% 73.0% 17.5% A world leader in Testing, Inspection & Certification 11.7% African leader World leader in high- A European leader performance coatings & A global leader in inTelecom towers in decorative paints leather-finished

  50. Slide 50: Appendix 3: Financial information as of 12/31/2014

    Appendix 3: Financial information as of 12/31/2014

  51. Slide 51: 2014 consolidated sales

    2014 consolidated sales Consolidated sales Organic (in millions of euros) 2013 2014 Δ Δ Bureau Veritas 3,933.1 4,171.5 +6.1% +2.5% Materis Paints(1) 757.7 747.6 -1.3% +0.8% Stahl 356.3 512.6 +43.9% +4.0% Oranje-Nassau Développement 405.8 482.5 n.s. n.s. Parcours 309.6 339.7 +9.7% +9.7% Mecatherm 96.

  52. Slide 52: Consolidated income statement

    Consolidated income statement In millions of euros 2014 2013 Net sales 5,914.2 5,452.9 Other income from operations 3.5 4.3 Operating expenses -5,298.7 -4,829.6 Income from ordinary activities 618.9 627.6 Other operating income and expenses -94.8 -50.1 Operating income 524.1 577.5 Income from cash a

  53. Slide 53: Consolidated balance sheet

    Consolidated balance sheet In millions of euros 12/31/2014 12/31/2013 In millions of euros 12/31/2014 12/31/2013 Share capital 191.2 194.5 Goodwill 2,701.2 2,595.6 Premiums 23.2 114.6 Intangible assets, net 1,254.9 1,229.0 Retained earnings & other reserves 2,229.6 1,892.7 Property, plant & equipmen

  54. Slide 54: Conversion from accounting to economic presentation

    Conversion from accounting to economic presentation Oranje-Nassau Equity method investments Holding Total In millions of euros Bureau Veritas Materis Stahl Développement companies Opérations Saint-Gobain IHS Net income from business sectors Net sales 4,171.5 747.6 512.6 482.5 - 5,914.2 EBITDA N/A 67

  55. Slide 55: Bank and bond debt as of December 31, 2013 and 2014

    Bank and bond debt as of December 31, 2013 and 2014 12/31/2013 12/31/2014 Bank debt related to 425 Maturity - Maturity Saint-Gobain 425 Jan. 2016 to Jan. 2017 Undrawn March 2020 /€500m - July 2017 Undrawn December 2019 /€350m Syndicated credit - May 2018 Undrawn November 2019 /€650m Wendel bond debt

  56. Slide 56: Appendix 4: NAV as of 12/31/2014

    Appendix 4: NAV as of 12/31/2014

  57. Slide 57: NAV of €123.2 as of December 31, 2014

    NAV of €123.2 as of December 31, 2014 (in millions of euros) 12/31/2014 Number of shares Listed equity investments Share price(1) 6,388 (millions) • Bureau Veritas 225.2 €18.2 4,102 • Saint-Gobain 65.8 €34.7 2,286 Unlisted equity investments (Materis Paints, Stahl & IHS) & Oranje-Nassau Développemen

  58. Slide 58: Appendix 5: IHS value creation potential

    Appendix 5: IHS value creation potential

  59. Slide 59: IHS: high value creation potential for Wendel

    IHS: high value creation potential for Wendel IRR for Wendel by end of 2018 20% 25% 30% 35% 1,783 2,081 2,415 2,787 Potential value of Wendel's $892m NAV value as of 03/16/2015, in $m* Potential value creation per Wendel 17.7 23.7 30.3 37.8 share, in €* EUR/USD = 1.1 This is not a forward looking st

  60. Slide 60: Appendix 6: Cash bridge from March 17, 2014 to March 16, 2015

    Appendix 6: Cash bridge from March 17, 2014 to March 16, 2015

  61. Slide 61: Cash bridge

    Cash bridge From March 17, 2014 to March 16, 2015 (1)Including bond buy back for a total amount of €33m 2014 Annual Results – March 26, 2015 61

  62. Slide 62: Disclaimer

    Disclaimer • This document has been prepared by Wendel S.A. (“Wendel”) solely for use at the presentation of the Company. This document must be treated confidentially by attendees at such presentation and may not be reproduced or redistributed to any other person. • No representation or warranty, ex

Wendel — FY2014 Earnings Presentation on 6ix