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Wendel — Investor Day (December 2013)
51 slides from Wendel's investor day presentation, Dec 5, 2013
Slide 1: Investor Day 2013
Investor Day 2013 December 5, 2013
Slide 2: Investor Day 2013 Agenda
Investor Day 2013 Agenda Wendel’s strategy • Key Strategic orientation & Value Creation Frédéric Lemoine • Carrying on our development in Africa & Bernard Gautier • Establishing in North America • Consolidating our position in Europe Break Wendel’s companies Bureau Veritas, Saint-Gobain, Frédéric Le
Slide 3: Deploying 2013-2017 strategy
Deploying 2013-2017 strategy €2bn to be invested over 4 years in Africa, North America and Europe ► Managing Director in charge of Africa based in Casablanca ► Opening of the New York investment office ► Reinforcement of our German team ► Building long term franchise in Asia: Business development of
Slide 4: 2009-2013 deal activity portfolio
2009-2013 deal activity portfolio €979 M of equity invested or committed of which €335M in 2013 Reinvestment in Reinvestment Investment Reinvestment Reinvestment Acquisition in Acquisition in in in of of 13% of IPO of Reinvestment Acquisition in of Acquisition Acquisition of of Stahl + Clariant Leat
Slide 5: Group structure
Group structure 3 listed Assets 11 Unlisted Assets Listed c. 36% 17.5% Materis Holding Exit underway 51.4% 75.5% 92.2% 16.4% Oranje Nassau Développement Subject to closing 98.1% 98% €51 M 13.3% 28.4% 95.7% 8% % net of treasury shares *There could be a dilutive impact of Wendel’s ownership interest i
Slide 6: Enhanced dealflow and many attractive opportunities under review
Enhanced dealflow and many attractive opportunities under review since September 2012 c. 500 opportunities 51 proposals 131 opportunities reviewed by rejected the investment committee 25 proposals 80 proposals in first-level analysis rejected 55 proposals in second-level analysis 15 proposals droppe
Slide 7: Value creation: Net asset value, Share price, Dividend
Value creation: Net asset value Share price Dividend
Slide 8: NAV of €140.3 as of November 25, 2013
NAV of €140.3 as of November 25, 2013 (in millions of euros) 11/25/2013 8/20/2013 Listed equity investments Number of shares (millions) Share price(1) 8,395 8,237 • Bureau Veritas 225.2 €21.8 4,910 5,061 • Saint-Gobain 89.8 €38.8 3,485 3,176 Unlisted equity investments(5) (Materis, Stahl & IHS) & Or
Slide 9: Share price over the last 12 months
Share price over the last 12 months Share price rebased on Wendel price as of 11/26/2012 110 105 Wendel: +47.3% 100 95 90 85 CAC 40: +22.9% 80 75 70 65 60 11/26/12 12/26/12 01/26/13 02/26/13 03/26/13 04/26/13 05/26/13 06/26/13 07/26/13 08/26/13 09/26/13 10/26/13 Total Shareholder Return Share price
Slide 10: Ordinary dividend to increase regularly
Ordinary dividend to increase regularly 1,75€ 1,30€* 1,25€ 1,00€ 1,00€ 2008 2009 2010 2011 2012 (*) 2011 : excluding the exceptional distribution of 1 Legrand share for every 50 Wendel shares held. Wendel Investor day 2013 – December 5 2013 10
Slide 11: Carrying on our development in Africa
Carrying on our development in Africa
Slide 12: Paradigm on Africa has changed over the last decade
Paradigm on Africa has changed over the last decade… 2000 2012 Wendel Investor day 2013 – December 5 2013 12
Slide 13: Generating an outstanding GDP & population growth
…generating an outstanding GDP & Population growth 3 000 Africa’s GDP USD bn, current 2050 : More than 2 billion people 2 500 2 500 000 2002-2018 : Growth of African population +10.7% per 2 000 2 annum 2 000 000 Billions of inhabitants 1 500 1 5001.5 000 1995-2002 : 1 000 +1.7% per 1 1 000 000 annum
Slide 14: Driven by…
Driven by… Infrastructure Demographics «Peace dividend» investment Reforms and Ressource Urbanization economic policies Exports Private Labor Productivity Trade Consumption Wendel Investor day 2013 – December 5 2013 14
Slide 15: …and representing a real promising opportunity
…and representing a real promising opportunity 1 billion people, 7 African countries among the 10 300 million people classified in fastest growing economies in the world 2011-15 middle-class, bigger than Europe 35 African countries ahead of China on the Economist $2 trillion Africa’s collective GDP,
Slide 16: Why Wendel can be successful in the region
Why Wendel can be successful in the region A geography known by Wendel Benefitting from Bureau Veritas presence in Africa, with more than 3,000 people and key government contracts Growing presence of other Group companies: • Bureau Veritas just announced small acquisition in South-Africa • Saint
Slide 17: Wendel investment strategy in Africa
Wendel investment strategy in Africa Focus on sectors that require growth capital and represent the ‘backbone’ of the economy Investment criteria Equity investment from €100M to €500M (over time); scalable investment Multi country companies in order to diversify country risk Partnership with e
Slide 18: An additional and diversified presence built within months
An additional and diversified presence built within 18 months Middle-east 20 countries Morocco Lebanon Saham Group Algeria IHS Covering 49.6% Mali Niger Senegal Ghana Guinea Nigeria of African Togo GDP Cote d’Ivoire Kenya Gabon Madagascar Angola Mauritius Does not take into account Saint-Gobain, Bur
Slide 19: Activities of Wendel's investment team in Africa
Activities of Wendel’s investment team in Africa since September 2012 > 80 opportunities 10 reviewed by 6 opportunities the Investment Committee rejected 4 opportunities in No opportunities first-level analysis rejected 4 in 2 opportunities second-level analysis still active 2 investments realized
Slide 20: Saham Group's investment rationale
Saham Group’s Investment rationale A partnership with an entrepreneur with a unique track record of value creation in the region through organic growth and relutive M&A An entrepreneurial team who demonstrated its ability to build partnerships with first-class partners The opportunity to inves
Slide 21: Saham Group's company profile
Saham Group’s company profile Overview Key figures Pan-African multi services group, founded in 1995, 2012 IFRS Saham Group SA key financials strongly involved in insurance business • Consolidated revenues: €674 M Diversification into businesses enjoying favorable • Gross earned premium : €640
Slide 22: A strong potential for growth in insurance and healthcare related businesses
A strong potential for growth in insurance and healthcare related businesses Insurance penetration rate in % of GDP Medical services availability Insurance is a superior good, growing faster than GDP 61 World Average 6.9% Physicians per 10'000 population (2005-2011) Hospital beds per 10'000 populati
Slide 23: Establishing in North America
Establishing in North America
Slide 24: Access to world's largest market allows us to maintain strong selectivity
Access to world’s largest market allows us to maintain strong selectivity Global PE buyout in value (EUR billion) 21 2 countries < EUR 500 M 25 > EUR 500 M Covering 13 60 24% 35 of World 27 GDP Rest of the world Western Europe North America Source: Capital IQ - 2011 Wendel Investor day 2013 – Decemb
Slide 25: A highly competitive but fragmented market
A highly competitive but fragmented market Total number of investments >$500 M made per annum (PE investorsTotal only)Num ber of Deals Many different players, Rank Sponsor 2008 2009 2010 2011 2012 2013 YTD Total such as private equity 1 TPG 2 - 4 6 2 - 14 2 Canada Pension Plan 1 3 2 2 3 1 12 houses,
Slide 26: Facing the competition, Wendel has specific assets
Facing the competition, Wendel has specific assets… Long term / no time horizon Permanent capital vehicle Family ownership culture Name with more than 300 years of history Strong track record in particular in business services, healthcare, discrete manufacturing Gateway to Europe & Africa Wendel can
Slide 27: A recent successful track record: Deutsch
A recent successful track record: Deutsch 2006 Wendel acquires the Californian Deutsch from Carl Deutsch, son of the co-founder Achievements during ownership Financial support from Wendel's $90M additional equity >22% growth in sales despite the downturn >500 bp improvement in EBITDA margin 2012 Sal
Slide 28: Strong knowledge of North America through Group companies
Strong knowledge of North America through Group companies Well established companies… …backed by Famous brands… • Wendel portfolio companies made c. $1.7bn sales in North America (~ 12% of total sales(1)) • c. 500 offices & manufacturing sites & (2) over 25,000 employees …with Leading positions… …an
Slide 29: What we look for
What we look for Specific situations Entrepreneurs or families seeking to sell or to raise capital for expansion Mid-sized buy out Private-equity backed management teams seeking longer-term partner Corporate joint-ventures and/or orphaned assets Specific businesses Fragmented industries with opportu
Slide 30: Activities of Wendel's investment team in North America
Activities of Wendel’s investment team in North America since September 2012 > 200 opportunities 24 opportunities reviewed by 9 opportunities the Investment Committee rejected 4 opportunities 15 opportunities in first-level analysis rejected 11 opportunities in 6 opportunities second-level analysis
Slide 31: Wendel North America team profile
Wendel North America team profile David Darmon Mel Immergut CEO of Wendel North America Senior advisor to Wendel Group since 2013 Joined Wendel in 2005 Former Chairman of Milbank, Former Wendel Board Secretary Tweed, Hadley & McCloy Previously with Apax and Goldman Sachs Adam Reinmann Vi
Slide 32: Consolidating our position in Europe
Consolidating our position in Europe
Slide 33: An organization focused on key countries
An organization focused on 5 key countries Wendel Headquarters Since 1704 in industry Oranje-Nassau & 1977 in investment Since 1908 Led by Dirk J. van Ommeren Team of 8 people in Benelux 5 Wendel Germany EU countries Since 2007 Led by Roland Lienau Team of 5 people Covering 60% of Luxembourg Operati
Slide 34: Wendel's analysis of European PE market
Wendel’s analysis of European PE market MARKET ACCESS ATTRACTIVENESS Attractive Presence/ Wendel Family Size of LBO Wendel Track Competition owned Non attractive market network record business France Germany Benelux EU buyout deal value €80 bn Western Europe buyout deal value 100% Private €60 bn 80%
Slide 35: Activities of Wendel's investment team in Europe
Activities of Wendel’s investment team in Europe since September 2012 > 200 opportunities 97 opportunities reviewed by 36 opportunities rejected the Investment Committee 21 opportunities 61 opportunities in first-level analysis rejected 40 opportunities in 11 opportunities dropped or second-level an
Slide 36: Establishing Wendel's franchise in Asia
Establishing Wendel’s franchise in Asia
Slide 37: Establishing a Wendel franchise in Asia, for the long term
Establishing a Wendel franchise in Asia, for the long term Building a network Supporting group companies in the region Wendel Japan Established since 2008 Installing Wendel as Wendel Singapore long term player Business Developpement office Opened mid 2013 Seizing investment opportunities, when excep
Slide 38: Investment in Nippon Oil Pump
Investment in Nippon Oil Pump Investment thesis Ideal candidate for the very first investment in Japan: Small deal, in size (€24M); Showcase to demonstrate Japan’s industrial strength in global competitive landscape; Majority holding: 98%; Company’s growth strategy includes benefitting from the grow
Slide 39: Bureau Veritas, Saint-Gobain, Materis & Parcours
Bureau Veritas, Saint-Gobain, Materis & Parcours
Slide 40: Bureau Veritas: an outstanding asset
Bureau Veritas: an outstanding asset Expecting an improvement starting 2014 and a gradual return to strong organic growth A lot of opportunities for external growth – 6 acquisitions in 2013 2012-2015 financial targets unchanged: – +9-12% of growth per annum, of which 2/3 organic, 1/3 external – Impr
Slide 41: Wendel in full support of Saint-Gobain's key priorities
Wendel in full support of Saint-Gobain’s key priorities for the next five years Strengthen Saint-Gobain’s profile to raise the potential for organic growth Reduce the Group’s capital intensity in developed countries; focus investments outside Western Europe; exit Verallia; and accelerate acquisition
Slide 42: Materis
Materis EBITDA up 4.8% on emerging markets growth and margin improvement Q3 organic (in millions of euros) FY 2012 H1 2012 H1 2013 Δ growth Chryso 11% Net sales 2,072.5 1,043.1 1,042.2 -0.1% +6.7% EBITDA (1) 258.2 129.7 135.9 +4.8% Materis Paints Kerneos 36% % of net sales 12.5% 12.4% 13.0% +60 bps
Slide 43: Materis Paints
Materis Paints Positive results of management action plans Emerging countries 7% Rest of ■ Market improvement leading to progressive upturn in organic growth Europe 26% ► Positive Q3 organic growth: +2.8%, confirming progressive improvement France 67% since the beginning of 2013 (over the nine first
Slide 44: ParexGroup
ParexGroup Strong performance driven by emerging markets and US recovery ■ Strong organic growth trend at the end of Q3 (+10.1%) driven by emerging markets North ► Organic growth: +7.8% over the nine first months America 8% ► Emerging market organic growth: +18% (+21% in Asia and + 15% in Latam) ► S
Slide 45: Chryso
Chryso Continued expansion into emerging markets Western ■ Acceleration of organic growth during Q3 2013: +11.2% Europe Emerging 40% ► Organic growth: + 4.9% at the end of 9 first months (versus 1.7% for H1 2013) countries 54% ► Continued expansion of Chryso into emerging markets (+16% organic growt
Slide 46: Materis enters exclusive negotiations with a view to selling Kerneos
Materis enters exclusive negotiations with a view to selling Kerneos ■ Materis has received a firm offer from Astorg to acquire Kerneos ■ Considering the quality of Astorg’s proposal, Materis has decided on December 4th to enter into an exclusivity period to finalize the transaction ■ Key terms: E
Slide 47: Materis enters exclusive negotiations with a view to selling Kerneos
Materis enters exclusive negotiations with a view to selling Kerneos ■ The completion of the transaction should take place during the first half of 2014, subject to customary regulatory and anti-trust approvals ■ Following the disposal of Kerneos, proceeds will be used for debt repayment ■ In additi
Slide 48: Parcours
Parcours Strong rebound in activity Fleet breakdown Fleet below 5 vehicles (€M) FY 2012 H1 2012 H1 2013 5% Sales 292.9 141. 0 149.7 Pre-tax income (1) 20.2 9.7 10.6 Fleet from 5 to 200 As a % of sales 6.9% 6.9% 7.1% vehicles Fleet above 52% Vehicle fleet 47 400 46 431 48 625 200 vehicles 43% Net fin
Slide 49: Parcours
Parcours Growth prospects A European market which has not already reached its maturity stage ► Market penetration of 33% in France (rate above 55% in the UK and Benelux) ► Development prospects in Germany and Netherland A market more and more sensitive to “services” ► Strong integration of “serv
Slide 50: Parcours
Parcours 2013-2015 roadmap Creation of a branded network PARCOURS ► Generalization of the “3D model” in France ► 2013 : Bordeaux, Saint Priest, Nanterre ► 2014/2015 : Tours, Lille, Nantes, Strasbourg ► Development of new branches in Europe (Spain, Luxemburg…) Outstanding operational quality serv
Slide 51: Disclaimer
Disclaimer • This document has been prepared by Wendel S.A. (“Wendel”) solely for use during the presentation of its investor day, to be held on December 5, 2013. This document must be treated confidentially by attendees at such presentation and may not be reproduced or redistributed to any other pe