Annual report 2024
GROWING
Table of contents
Message to our shareholders 4
Highlights 2024 8
Strategy 10
Our business model 12
Strategic review 14
Investment strategy 18
Management report 20
Activity & performance 22
Sustainability statement 30
Our team 36
APM and other information 40
Portfolio 44
Direct Investments 46
Investment Funds 70
Corporate Governance 72
Statement of Corporate Governance 74
Shares and capital 75
General Meeting of Shareholders 77
Board of Directors 78
Specialised Committees 85
Group Executive Committee 88
Principles of Corporate Governance 92
Internal control and risk management 94
Remuneration report 98
Consolidated financial statements 104
Contents 106
Statutory annual accounts 152
Contents 154
Glossary 174
LUXEMPART ANNUAL REPORT 2024 - 1
GROWING TOGETHER
Luxempart is a leading investment company listed on the Luxembourg Stock Exchange. We are create long-term value through a thoughtfully selected portfolio of private and listed companies across Luxembourg, Belgium, France, and Germany, as well as investment funds in Europe and the US. Since 1988, we have combined strategic insight with a commitment to responsible investing, to enhance sustainable growth and resilience in every investment we make.
LUXEMBOURGISH INVESTMENT COMPANY | STRONG TEAM | STOCK LISTED, EVERGREEN | STEADY DIVIDEND POLICY |
€ 2.3bn NAV | ~ 30 | 30+ years | 3.3% |
INVESTMENT AND CORPORATE PROFESSIONALS | |||
AT 31/12/2024 | OF EXISTENCE | DIVIDEND YIELD IN 2024 | |
STRONG TRACK RECORD | DIRECT INVESTMENTS | FLAGSHIP INVESTMENT | INVESTMENT FUNDS |
~ 15% IRR | ~ 75% | 32% | ~25% |
OVER PAST 30 YEARS | OF OUR PORTFOLIO | OF FOYER GROUP | OF OUR PORTFOLIO |
INVESTED IN GROWING LEADER COMPANIES | INVESTED IN FUNDS MANAGED BY TOP CLASS TEAMS |
Message to our shareholders
Dear Shareholders,
2024 has been a demanding year for Luxempart. As highlighted in our previous reports, Europe's economic slowdown has weighed on some of our larger Direct Investments lines, while the private equity market con- tinues to evolve in response to higher post-COVID inter- est rates. Deal activity remained subdued, particularly in the European small to mid-cap space.
Despite these challenges, Luxempart has remained dis- ciplined and focused. We have supported our portfolio companies through changing conditions, and we con- tinue to seek attractive opportunities that align with our long-term investment philosophy.
SLIGHTLY POSITIVE PERFORMANCE IN A CHALLENGING ENVIRONMENT
Our Net Asset Value (NAV) declined slightly by 0.6% to EUR 2.3 billion, while performance remained slightly positive at 1.3%. The Investment Funds activity, which now represents a quarter of our NAV, generated a return of 8.5%, a solid outcome even if below last year's 11.6%.
Direct Investments, accounting for more than two-thirds of our portfolio, had a more complex trajectory. While most companies in this segment showed operational and financial progress, the Direct Investments performance of -0.1% was weighed down by a handful of holdings that struggled in their sectors.
Four portfolio companies - Kestrel Vision (inspection in glass production), Atenor (real estate development),
Crealis (wine & spirits), and MTWH (luxury) - were par-ticularly affected by sector-wide downturns, contribut- ing to a EUR 160m reduction in NAV and causing a neg- ative impact of 7% on our performance. Today, these businesses represent just 5% of our NAV, and less than half of their initial investment. That said, we are seeing signs that the worst may be behind us. Early indicators of stabilization or even of recovery are emerging, and we remain confident in their ability to regain in strength and contribute positively in the coming years.
Looking at the broader picture, Luxempart has deliv- ered an annualized return of 10% over the past four years, a strong result in comparison to our benchmark, the MSCI Europe Mid Cap, which generated 5.2% over the same period.
A THOUGHTFUL APPROACH TO INVESTMENTS
In contrast to the more active investment pace of 2023, we deployed EUR 152m in 2024. Direct Investments accounted for EUR 87m, with the addition of Medios, a German-listed specialty pharma group, as well as select follow-on investments in existing portfolio companies.
On the Investment Funds side, we deployed EUR 65m of capital and expanded our partnerships with four new US-based managers, bringing our US and global expo- sure to EUR 330m, now representing 39% of our total exposure (made of NAV and uncalled capital).
Looking ahead, we are gradually shifting our Investment
Funds portfolio toward a stronger US presence, aiming for a two-thirds US and one-third European balance. This will allow us to access high-quality opportunities abroad while maintaining a solid presence in our home markets.
"Luxempart's ability to structure and execute successful exits remains a defining strength, ensuring long-term value creation for our shareholders."
JOHN PENNING
DELIVERING MEANINGFUL EXITS
Our divestment activity in 2024 was a highlight, reaf- firming Luxempart's ability to execute strong and well- timed exits. The sale of ESG Elektroniksystem- und Logistik GmbH to Hensoldt AG, which was already reflected in our 2023 accounts, was closed in the first semester of 2024, generating EUR 138m in cash pro- ceeds and delivering an exceptional 7.2x MoM return. Later in the year, we supported TA Associates' takeover bid for Nexus, a portfolio company listed on the Frank- furt Stock Exchange and a leader in healthcare software.
This transaction, expected to close in the first semester of 2025, will generate EUR 123m for Luxempart, with an IRR of 14.4% and a 1.4x MoM return.
"Looking ahead, we believe that the strong fundamentals of our portfolio, combined with our entrepreneurial spirit and long-term investment philosophy, position us well to navigate uncertainty and seize new opportunities."
FRANCOIS GILLET
The Nexus transaction illustrates well our approach within our Direct Investments pillar - engaging as an active shareholder, backing strong management, and ensuring long-term value creation while positioning for the right exit. We entered Nexus in 2022 through a reserved capital increase, stepping in as an anchor shareholder to support its development. While the com- pany performed well operationally, its stock struggled in a weak mid-cap equity market with limited liquidity. When the opportunity arose for a strategic partnership with TA Associates, a specialist software investor, we backed management's decision, helping to structure an optimal outcome.
Luxempart's ability to structure and execute successful exits remains a defining strength, ensuring long-term value creation for our shareholders.
REFINING OUR STRATEGY
Between October 2023 and June 2024, we conducted a comprehensive strategy review, reaffirming our focus on our two core investment pillars: Direct Investments and Investment Funds. In Direct Investments, we con-tinue to invest in small to mid-sized private and listed companies in France, DACH, and Belux. Our Investment Funds activity remains centered on top-tier lower mid- cap buyout and late-stage growth funds in Europe and the US, where we maintain a selective approach to man- ager selection.
To strengthen our expertise and investment impact, we are increasing our focus on four priority verticals: healthcare, software, industrials, and B2B services.
We also continue to expand our team, welcoming Joy Verlé to the Group Executive Committee as Head of France in September 2024, reinforcing our presence in this key market.
A STRONG FINANCIAL POSITION TO CAPTURE OPPORTUNITIES
Our financial position remains robust. At year-end, our liquidities stood at EUR 184m, or 8% of NAV, excluding the EUR 123m expected from the Nexus transaction in early 2025. Additionally, we have EUR 200m in undrawn credit lines, giving us the flexibility to act decisively on attractive opportunities and to further support our port- folio companies when needed.
In early March 2025, we participated in Atenor's capi- tal increase, allocating EUR 7.5m in addition to our EUR 30m investment made in late 2023. Despite the ongoing pressures in the real estate sector, we are confident that
Atenor is well-equipped to navigate these challenges, supported by its broad project portfolio, strong refer- ence shareholders, and experienced management team.
Partnerships are at the heart of our strategy, both with exceptional entrepreneurs and managers, as well as with like-minded investors. In recent years, our sourc- ing efforts have been focused on identifying investment opportunities aligned with this approach, and we are currently in the process of closing two such transactions in the DACH region.
A SHIFTING GLOBAL LANDSCAPE
The geopolitical environment and macroeconomic con- ditions remain unpredictable. While interest rates in Europe have declined in recent months, it is unclear whether this trend will persist into 2025. At the same time, evolving trade policies could place renewed pres- sure on European competitiveness.
To ensure long-term economic stability and sovereignty, Europe must strengthen its industrial and technologi- cal base-particularly in defense. A more autonomous European defense sector would not only enhance secu- rity but also unlock significant long-term investment opportunities.
Looking ahead, we believe that the strong fundamen-tals of our portfolio, combined with our entrepreneur- ial spirit and long-term investment philosophy, position us well to navigate uncertainty and seize new oppor- tunities.
Aligned with this philosophy, we will become a signatory of the United Nations-supported Principles for Responsi- ble Investment (PRI) in 2025, underscoring our commit- ment to integrating sustainability into our investment approach and value creation framework.
A CONTINUED FOCUS ON SHAREHOLDER VALUE
We are pleased to announce that our Board of Directors is proposing a dividend of EUR 2.33 per share, repre- senting a 7.4% increase and a 3.3% dividend yield based on the year-end share price. Over the past four years, our dividend has grown at an average annual rate of 10%, reflecting our continued commitment to sustaina- ble shareholder value creation.
Our share price closed the year at EUR 70.50, increasing by 10.1% over the course of the year (incl. dividend).
Over the last four years, the Luxempart stock achieved a strong annualized performance of 13.1%.
We extend our sincere gratitude to our Board of Direc- tors for their guidance and support. We also thank our teams across Luxembourg, Munich, and Paris for their dedication and hard work. Finally, to our shareholders, we appreciate your continued trust and confidence. We remain committed to delivering long-term value and look forward to the opportunities ahead.
François Gillet & John Penning
Highlights 2024
€ 2,311m
NAV
€ 2.33
DIVIDEND PER SHARE PROPOSED TO THE AGM
+1.3%
GLOBAL PERFORMANCE IN 2024
+10.1%
STOCK PERFORMANCE IN 2024 (INCL. DIVIDEND)
Direct Investments
-0.1%
DIRECT INVESTMENT PERFORMANCE
€ 87m
INVESTED IN DIRECT INVESTMENT
€ 140m
PROCEEDS RECEIVED FROM DIRECT INVESTMENTS
€ 184m
LIQUIDITIES AVAILABLE TO INVEST
5
NEW JOINERS RECRUITED
€ 200m
UNDRAWN CREDIT FACILITIES
100%
NEW DEALS COVERED BY AN ESG DUE DILIGENCE
1+9
NEW AND ADD-ON INVESTMENTS
Investment Funds
+8.5%
INVESTMENT FUNDS PERFORMANCE
1
NEW AND ADD-ON INVESTMENTS
€ 65m
CAPITAL CALLED
€ 36m
PROCEEDS FROM INVESTMENT FUNDS
€ 77m
NEW COMMITMENTS IN INVESTMENT FUNDS
4
NEW RELATIONS WITH FUND MANAGERS
STRATEGY
Our business model
WHO WE ARE…
With a family and entrepreneurial history dating back more than 30 years, Luxempart has strongly anchored in its genes the commitment of value creation through long-term partnerships.
Luxempart ambitions to embark, next to passionate entrepreneurs and like-minded investors, into enthu- siastic growth journeys, bringing great companies to the next level of their development. We are proud when we can contribute to the creation of strong leaders in our home markets (Luxembourg, Belgium, France, and Germany), concentrating skills, deep know-how, and job creations into those countries.
Our core values emphasize strong partnerships, resil- ience, integrity, passion, and a results-driven mindset. We prioritize honesty and respect, maintain a solu- tion-oriented approach, and uphold rigor and dedication without complacency, even in challenging times. Those values were the key of our past successes, leading to a performance of Luxempart of around 15% IRR over the last 30 years, and we believe that they will remain fun- damental to pursue our ambitions in the future.
Luxempart S.A. is a listed investment company with strong family roots.
"Luxempart is deeply rooted in the principles of long-term value creation through enduring partnerships."
JOHN PENNING
…AND WHAT WE DO
Luxempart invests in companies with proven business models, positive cash flows and resilient sectors.
Our main strategic pillar is the Direct Investments activ- ity, where we seek investments and manage a diversi- fied portfolio of private or public companies, in mar- kets that are close to us, we know well and where we have our networks: Luxembourg, Belgium, France, and Germany.
We aim to be a long-term and trusted partner to suc- cessful entrepreneurs and families. Our situation in Lux- embourg, at the crossroads of the French and German cultures, provides us a privileged access to those two key European markets and constitute a clear differen- tiation factor for Luxempart.
Alongside Direct Investments, we are expanding our Investment Funds activity, with a strong focus on the US. Our team selects top-tier investment funds for long- term partnerships, ensuring market diversification and continuous benchmarking of our Direct Investments against world-class private equity managers.
Our growing team of about 30 investment professionals and corporate employees mainly based in Luxembourg actively covers those two pillars, building up extensive expertise in their respective fields, while enriching each other with market information and best practices. We foster an ambitious team spirit, including young and talented team members, that are close to our strategic markets, and that are empowered early on.
This mission accompanies us in our investment deci- sions and day-to-day work and makes that we enjoy every new day!
PRIVATE EQUITY PLATEFORM
A UNIQUE VALUE PROPOSITION TO OUR SHAREHOLDERS
Via the stock exchange
Ensuring diversification and impactful decisions
Dedicated teams based in Luxembourg, France and Ger-many
Long term, feet on the ground France, Germany, Luxembourg, Belgium, & Foyer Group Through best-in-class investment funds managers
Consistent over time, stable dividend policy
GROWING TOGETHER
A UNIQUE WAY TO PARTNER WITH OUR BUSINESS PARTNERS
Minority or majority stake, active support Available capital to foster growth initiatives
No exit pressure: Investment horizons beyond tradi-tional private equity funds
Tailor-made solutions for founders, family businesses and managers
Entrepreneurial business approach
Ability to help national companies to become truly European and develop worldwide
Strategic review
ACHIEVEMENTS (2020 - 2023)
PERFORMANCE AND BENCHMARKING
Direct Investments
19 12
28
€ 62m
12.2%
Portfolio streamlining
IRR EXITS REALIZED NEW INVESTMENTS PORTFOLIO COMPANIES REDUCED FROM 35
AVERAGE SIZE OF TOP 10 INCREASED FROM EUR 31M
LUX-BE 38%
Over the period 2020-2023, Luxempart achieved an annualized NAV performance (IRR), including dividends, of 12.2%, despite a challenging environment marked by the COVID crisis, the war in Ukraine, and sharply rising interest rates. All our activities contributed significantly to this strong overall performance.
DACH
26%
Development of the French market
20 years
10 years
4 years
Luxempart performance
INVESTMENTS DONE
OTHER 11% FRANCE 25%
Development of partnerships with like-minded investors
PARTNERSHIPS DEVELOPED WITH ARMIRA, COBEPA, DBAG…
8.2%
BENCHMARK INDEX OUTPERFORMANCE
Investment Funds
Change from a "European sponsored" to a "Global diversified" portfolio
The Luxempart four year performance compares favorably to our benchmark index, the MSCI Europe Mid Cap net Return index, that showed a 4.0% IRR performance over the same period.
49
US FOOTPRINT
MSCI Europe Mid Cap
Luxempart performance
INVESTMENT FUNDS INCREASED FROM 18
Luxempart performance compares favorably to other large listed indexes (in currencies) over the same period.
Team
Invest in internal resources
28
We also benchmarked our performance with other European listed holding companies, and we appear among the frontrunners on this sample as well.
0,3%
TEAM INCREASED FROM 20 TO 28
OPENING OF LOCAL OFFICES IN PARIS
- INVESTMENT 19
AND MUNICH
- CORPORATE 9
As a conclusion, without being a proof for the future, our past strategy has steadily shown its merits in terms of value creation for our investors.
MSCI World (USD)
MSCI USA
(USD) MSCI Europe (EUR)
MSCI Emerging
(USA)
12.6%
13.0%
12.2%
4.0%
9.4%
11.6%
6.1%
CHALLENGES AND OPPORTUNITIES
REFINED STRATEGIC PLAN
There are various trends or particularities we need to integrate into our model, in order to remain successful in a fast changing environment:
Our recent successes have shown the merits of our business model. We are convinced that there remains an attractive place for smaller investors in the broader, consolidating, private equity landscape, under certain conditions:
Focus
The private equity landscape is evolving Geopolitical uncertainties prevail
It remains a mature market with intense competition among highly professional players. High debt costs and slower GDP growth in Europe are creating a more challenging environment for value creation, leading to lower valuations, delayed exits, and a tougher fundraising climate. We observe a growing trend of capital flowing toward large platforms, while smaller managers face increasing difficulties in reaching their targets.
The war in Ukraine and rising tensions in various regions contribute to global instability and a shift toward reduced globalization. While this poses challenges for certain businesses, it also opens opportunities to reinternalize parts of the economy and strengthen local industries.
Luxempart's historical expertise lies in small and mid-sized buyouts-this is at the core of our DNA. We should remain committed to this strategy, concentrating on clearly defined investment verticals: Healthcare, Software, Industrials, and B2B Services. Applying the same playbook across both our Direct Investments and Investment Funds activities will enable us to leverage shared expertise and best practices, reinforcing our competitive edge.
Geographical diversification
Digitalization is a mega trend
Our core markets remain Belux, France, and DACH, where we have deep expertise and strong networks. We will continue to focus on these regions in our Direct Investments activity.
Europe at a turning point
In the face of evolving global challenges, Europe stands at a pivotal moment, with the opportunity to strengthen unity, refine policies, and revitalize essential industries. By embracing cohesive strategies and investing in critical sectors, Europe can enhance its resilience and assert its role on the global stage.
All segments of the economy will be affected by digital transformation and artificial intelligence. Re-thinking businesses, allowing to embrace this revolution is absolutely key, and should be an integral part of our investment processes.
For our Investment Funds activity, we have the flexibility to invest beyond these core markets, leveraging the expertise of local teams. In recent years, we have gained exposure to the US market and have now decided to accelerate our footprint there. This expansion will be pursued exclusively through third-party fund managers, ensuring access to high-quality opportunities while maintaining our disciplined investment approach.
Entrepreneurship
Climate change is ongoing
The strength of permanent capital structures like Luxempart resides in the fact that they can afford to enter into specific situations, with more flexible investment horizons, partnering with exceptional entrepreneurs or like-minded investors in a real value creation journey. Exit is not triggered by a contract or a fundraising, but by a sense of job done, via active ownership.
Climate change is a reality that is reshaping our world. In the long run, companies investing in sustainable solutions will be best positioned. A strategic sustainability approach in managing our portfolio will be a key driver of value.
Excellence
Build up top class internal teams in our investment activities and operations, shaped around the strong values of Luxempart that made our past successes: passion for the business, resilience, integrity and hard work.
Small and mid-cap buyout investor
Focus on what truly matters, strive for excellence on chosen areas
Home markets remain Belux, France, and DACH.
Increased exposure to the US, via third party fund managers
Active ownership, with flexibility as a differen-tiation factor
Human capital drives value creation and ex-pands opportunities.