WENDEL: Q1 2023 activity is increasing ; Implementation of new
strategic directions
press release - APRIL 27, 2023
Q1 2023 activity is increasing
Implementation of new strategic
directions
Net asset value as of March 31, 2023:
€7,662 million or €172.5 per share, up +2.8% YTD
Q1 2023 consolidated net sales:
€2,181 million, up +10.4% overall and up +8.4%
organically
- Strong growth of Constantia Flexibles (+21.8%), CPI (+18.0%)
and Bureau Veritas (+8.9%)
- Stahl sales (-8.6%) impacted by a soft start of the year in the
global coatings industry
- ACAMS first quarter down -14%, impacted by timing effects.
Sales up +9.6% excluding timing effects
Good momentum for Wendel’s portfolio and
strong M&A activity
- Stahl acquired ICP Industrial Solutions Group (ISG), a leader
in high-performance packaging coatings. ISG reported sales of
approximately $140 million in 2022.
- Constantia continued its selective acquisition strategy with
the acquisition of the Polish company Drukpol Flexo and Lászlópack
Kft in Hungary. Both acquisitions represent estimated annualized
sales of c. €45 million in 2023.
Implementation of new strategic
directions
- Successful issue by Wendel of bonds exchangeable into shares of
Bureau Veritas due 2026, generating €750 million of additional
liquidity for Wendel.
- Wendel entered into exclusive negotiations with the intent to
acquire the Scalian Group, a leading European consulting firm in
digital transformation, project management and operational
performance. Wendel would invest c. €550 million.
Strong financial structure
- Total liquidity of €2.4bn as of March 31, 2023, including
€1.6bn of cash and €750 million available under the committed
credit facility (fully undrawn).
- LTV ratio of 6.4% as of March 31, 20231.
Laurent Mignon, Wendel Group CEO, commented:‘The first
quarter of 2023 was very dynamic for Wendel and its portfolio
companies. Consolidated net sales rose by a total of 10.4% over the
first three months of the year, driven in particular by the good
performances of Bureau Veritas, Constantia Flexibles and Crisis
Prevention Institute. Our companies also pressed ahead with their
targeted external growth strategies.We embarked on the new
strategic directions announced in March, with the completion of an
issue of bonds exchangeable for Bureau Veritas shares, providing us
with an additional €750 million in cash, and the announcement
of exclusive negotiations to acquire the Scalian Group. This
significant majority investment in an unlisted company is fully in
line with our ambition to invest around €2 billion over the
next 24 months, and marks Wendel’s return to the French
market.’ |
Q1 2023 sales of Group
companies
Q1 2023 consolidated sales
(in
millions of euros) |
Q1 2022 |
Q1 2023 |
Δ |
Organic Δ |
Bureau Veritas |
1,290.1 |
1,404.5 |
+8.9% |
+8.5% |
Constantia Flexibles |
432.6 |
526.7 |
+21.8% |
+19.0% |
Stahl |
224.9 |
205.5 |
-8.6% |
-12.5% |
Crisis Prevention Institute |
20.8 |
24.6 |
+18.0% |
+14.9% |
ACAMS(1) |
7.2 |
19.9 |
n.a |
n.a |
Consolidated net sales(2) |
1,975.6 |
2,181.2 |
+10.4% |
+8.4% |
- ACAMS accounts have been consolidated since March 11,
2022.
- Comparable sales for Q1 2022 represent €1,975.6 m vs. 2022
published sales of €2,007.2 m. The difference of €31.6m
corresponds to Indian activities from Constantia Flexibles,
classified as asset held for sale in accordance with IFRS 5.
The contribution of these activities has been reclassified in ‘Net
income from discontinued operations and operations held for sale’
since 2022.
Q1 2023 sales of equity accounted
companies
(in millions of euros) |
Q1 2022 |
Q1 2023 |
Δ |
Organic Δ |
Tarkett |
684.7 |
698.4 |
+2.0% |
-0.9% |
Sales of Group companies
Bureau Veritas – Strong start to the year;
2023 outlook confirmed.
(full consolidation)
Bureau Veritas’ revenue in the first quarter of
2023 amounted to €1,404.5 million, an +8.9% increase compared
with Q1 2022. Organic growth was +8.5%, led by sustained strong
momentum for sustainability and energy transition across all
businesses. During the quarter, Bureau Veritas launched a
certification scheme for renewable hydrogen (whose objective is to
ensure that it is produced under safe and sustainable practices,
and from renewable energy sources) and obtained the accreditation
for a new ‘anti-food waste’ label certification.
Growth was driven by the vast majority of the
portfolio across all geographies (Americas, Middle East, Europe,
Africa and Asia Pacific) with a strong organic growth from Marine
& Offshore +13.5%, Industry +12.5%,
Certification +11.2%, Buildings &
Infrastructure +9.0% and Agri-Food &
Commodities +7.7%. Less than a sixth of the portfolio
(Consumer Products Services) declined 3.5% organically due to fewer
new product launches and volumes.
The scope effect was a positive +1.5%,
reflecting bolt-on deals realized in the past few quarters. The
currency impact was negative by -1.1%, mainly due to the
depreciation of some emerging countries’ currencies against the
euro.
2023 Outlook confirmed
Based on a healthy sales pipeline and the
significant growth opportunities related to Sustainability, and
taking into account the current macro uncertainties, Bureau Veritas
expects for the full year 2023 to deliver:
- Mid-single-digit organic revenue growth;
- A stable adjusted operating margin;
- A strong cash flow, with a cash conversion2 above 90%.
For more information:
https://group.bureauveritas.com
Constantia Flexibles – Total growth of
+21.8% with organic growth of +19.0% and improved
profitability.
(full consolidation)
Q1 20233 sales totaled €526.7 million, up
+19.0% on an organic basis driving a strong business performance in
terms of both profitability and cash generation. The sales growth
was driven by (i) strong volume growth in the Pharma markets and
low single digit growth in the Consumer markets and, (ii) further
price increases compensating the impact of cost inflation. Total
sales growth was +21.8%. The acquisition of FFP Packaging Solutions
(FFP) in August 2022 contributed positively to the top line growth
(+1.4%) and FX had a positive impact of +1.4%.
Constantia Flexibles continued its selective
acquisition strategy: on March 2, 2023, Constantia Flexibles
announced the signing of an agreement to acquire the Polish company
Drukpol Flexo and on April 6, 2023, Constantia Flexibles announced
the acquisition of Lászlópack Kft., a Hungarian flexible packaging
producer. These two acquisitions represent an estimated additional
annualized sales of c.€45 million in 2023. These acquisitions
in combination with the Propak (June 2021) and FFP acquisitions has
significantly enhanced Constantia’s flexo printing capabilities
whilst adding valuable local customer bases.
As a reminder, throughout 2022, margins were
protected by a successful passthrough of unprecedented cost
inflation and good management of the sales mix. The margin trend
remains positive in the first 3 months of 2023 with a positive
outlook for Q2.
Stahl – Total sales down -8.6% in Q1
2023, impacted by lower than expected volumes. Successful
completion of the acquisition of ICP Industrial Solutions
Group.
(full consolidation)
Stahl, posted total sales of €205.5 million
in Q1 2023, representing a decrease of -8.6% versus Q1 2022.
Organic growth was at -12.5% over the quarter, while FX was
positive (+1.5%) and scope effect contributed positively for +2.4%,
following the acquisition of ICP Industrial Solutions Group in
March 2023.
Activity in the global coatings industry was
generally muted during the first quarter of the year. Stahl
experienced low volumes across its divisions, only partly
compensated by favorable price trends and FX. The orderbook started
to recover towards the end of the quarter. Stahl expects a
progressive rebound starting in Q2 2023 and continuing towards the
end of the year, in the wake of a normalization along the supply
chain and the end of customers’ destocking.
On March 16, 2023, Stahl completed the
acquisition of ICP Industrial Solutions Group (ISG), a leader in
high-performance coatings for packaging and labelling applications.
This acquisition reinforces Stahl’s position as the global leader
in the field of specialty coatings and treatments for flexible
substrates.
Crisis Prevention Institute – Revenue
growth of +12.8% as compared with Q1 2022, +14.9%
organically.
(full consolidation)
Crisis Prevention Institute recorded first
quarter 2023 revenue of $26.4 million, up +12.8% vs. Q1
2022. Of this increase, +14.9% was organic growth, offset by -2.1%
impact from FX movements.
Growth was underpinned by continued expansion of
the installed base of Certified Instructors (CIs), as well as the
related growth in renewals and peer training. In addition, Q1
growth was also driven by the expansion of program offerings,
providing Certified Instructors with even more options for
specialized, topic-specific training.
CPI continues to experience a mix shift toward
digital solutions for both new CIs and renewals, with programs
retaining the required in-person components. CPI is focused, as
well, on expanding its product outreach with ‘verbal intervention’
trainings in adjacent markets.
ACAMS – Total sales down -14% in Q1,
impacted by Conferences & Training timing effects,
to be offset in Q2.
(full consolidation since March 11, 2022)
ACAMS, the global leader in training and
certifications for anti-money laundering and financial-crime
prevention professionals, generated total revenue of
$21.3 million, down 14.1% vs. Q1 2022. The year-over-year
decline in the first quarter was anticipated due to the benefit of
an unusually large enterprise contract booked in Q1 2022, and
ACAMS’s second-largest annual conference that was held in Q1 2022
and scheduled for Q2 2023. The large contract that benefited Q2
2022 was initiated in response to regulatory requirements and
required corrective actions to improve its compliance culture,
which can often produce higher revenue at the beginning of a
contract than in subsequent years.
Excluding the benefit of these events on the
prior year, ACAMS would have reported +9.6% year-over-year growth
for the first quarter, reflecting momentum in the Company’s
enterprise sales efforts, notably in the U.S. and Europe, and
increased adoption by Chinese banks in preparation for a planned
upcoming regulatory evaluation.
ACAMS anticipates the current momentum and
conference bookings to produce accelerated growth through the rest
of 2023, recognizing the uncertainty related to the timing of
certain large enterprise contracts and developments in the banking
industry that could impact actual results.
Tarkett – Sales growth +2.0% upheld by
price increases implemented in 2022. Excellent performance of Sport
offsetting slower demand in flooring
(Accounted for by the
equity method)
Net revenue for the Group was €698 million,
up by +2.0% compared to the first quarter of 2022. Organic growth
was ‐0.5% including the sales price increases in the CIS region.
The total effect of the sales price increases implemented across
all segments is +7.3% on average compared to the first quarter of
2022.
The EMEA segment achieved a turnover of
€230 million, down ‐3.4%, the North America segment reported
revenue of €214 million, an increase of +4.9% and revenue in
the CIS, APAC and Latin America segment has reached
€122 million, down ‐8.8%. As expected, the Sport segment
continued to show very strong growth. Revenue amounted to
€132 million, up by +22.0%, with +17.8% organic growth. The
market remains dynamic in North America for both artificial turf
sports fields and athletic tracks, two segments where Tarkett
benefits from its leadership, and the order book remains
strong.
For more information:
https://www.tarkett-group.com/en/investors/
IHS Towers (not consolidated) –
IHS Towers will report its Q1 2023 consolidated sales in May.
Wendel’s net asset value: €172.5 per share as of
March 31, 2023
NAV as of March 31, 2023, was prepared by Wendel
in compliance with its methodology4.
Net Asset Value was €7,662 million
or €172.5 per share as of March 31, 2023 (see detail in
Appendix 1 below), vs. €165.8 on March 31, 2022,
representing an increase of 4.0%. Since December 31, 2022, Net
Asset Value is up 2.8%. The increase is fully attributable to
listed assets.
The discount to NAV was 42.6% as of March 31,
2023.
Wendel further improves its debt profile and
structure
Gross debt as of the end of March 31, 2023,
stood at €2,150 million, with, net cash position of
€1,638 million resulting in a net debt of €521 million.
LTV ratio was 6.4%.
On March 22, 2023, Wendel successfully issued a
€750 million of bonds exchangeable into Bureau Veritas’ shares
at a premium of 25% above the reference share price and a coupon of
2.625%.
As of March 31, 2023, Wendel’s total liquidity
was €2.4 billion, including €1,638 million of cash and a
€750 million committed credit facility (fully undrawn).
2023 other significant events:
Wendel enters into exclusive negotiations
with the intent to acquire the Scalian Group, a leading European
consulting firm in digital transformation, project management and
operational performance.
On April 17, 2023, Wendel announced entering
into exclusive negotiations with the intent to acquire the Scalian
Group for an enterprise value of €965 million. As part of this
transaction, Wendel would invest up to around €550 million in
equity alongside the management team and hold a large majority
stake of the company’s capital. Subject to the ongoing process and
satisfaction of the conditions to closing, including obtaining
regulatory clearances, the transaction is expected to be finalized
in the second half of 2023.
Founded in 1989, Scalian is ranked among
France’s Top 10 engineering consulting firms, is also active
internationally, providing industrial project management services
for issues pertaining to supply chain (costs, quality, deadlines,
performance), the architecture and development of embedded digital
systems and information system applications, big data and AI.
Scalian also addresses project optimization and organizational
performance issues, as well as providing digital transformation
support for industry and service sector leaders.
The group expects to reach c. €510 million
in revenue, an adjusted EBITDA5 of c. €74 million as of June
2023 LTM, and will total c. 5,000 employees in nine countries at
this date. Since 2015, the company has delivered average annual
growth of around +30% of its revenues, including +12% of organic
growth, amplified by a selective external growth strategy, in
France and internationally, with nine acquisitions completed over
the same period.
Appendix 1: NAV as of March 31, 2023:
€172.5 per share
(in millions of euros) |
|
|
March 31, 2023 |
Dec. 31, 2022 |
Listed equity investments |
Number of shares |
Share price (1) |
4,767 |
4,460 |
Bureau Veritas |
160.8/160.8 m |
€26.4/€24.8 |
4,241 |
3,990 |
IHS |
63.0/63.0m |
$7.5/$6.5 |
437 |
382 |
Tarkett |
|
€12.0/€11.9 |
89 |
88 |
Investment in unlisted assets (2) |
3,402 |
3,440 |
Other
assets and liabilities of Wendel and holding companies(3) |
14 |
15 |
Net
cash position & financial assets (4) |
|
1,638 |
961 |
Gross asset value |
|
|
9,821 |
8,876 |
Wendel
bond debt |
|
|
-2,159 |
-1,420 |
Net Asset Value |
|
|
7,662 |
7,456 |
Of
which net debt |
|
|
-521 |
-459 |
Number
of shares |
|
|
44,407,677 |
44,407,677 |
Net Asset Value per share |
|
|
€172.5 |
€167.9 |
Wendel’s 20 days share price average |
|
€99.0 |
€88.2 |
Premium (discount) on NAV |
|
|
-42.6% |
-47.5% |
|
|
|
|
|
|
|
- Last 20 trading days average as of December 31, 2022, and March
31, 2023
- Investments in unlisted companies (Stahl, Constantia Flexibles,
Crisis Prevention Institute, ACAMS, Wendel Growth). Aggregates
retained for the calculation exclude the impact of IFRS16. As per
Wendel methodology, on March 31, 2023, ACAMS valuation is weighted
at 33.3% on acquisition multiple and 66.7% on listed peer group
multiples. Wendel Growth direct investments valued at acquisition
cost or last funding round.
- Of which 983,315 treasury shares as of December 31, 2022, and
963,406 treasury shares as of March 31, 2023
- Cash position and financial assets of Wendel &
holdings.
Assets and liabilities denominated in currencies
other than the euro have been converted at exchange rates
prevailing on the date of the NAV calculation.
If co-investment and managements LTIP conditions
are realized, subsequent dilutive effects on Wendel’s economic
ownership are accounted for in NAV calculations. See page 332
of the 2022 Universal Registration Document.
1 Pro forma of Scalian acquisition project
realization, LTV would stand at 12.3%
2 Net cash generated from operating
activities/Adjusted Operating Profit
3 In accordance with IFRS 5, Indian
activities are classified as discontinued operations and are
reclassified. Figures are excluding Indian activities in 2022 and
2023.
4 See page 302 of the 2022 Universal
Registration Document for the NAV methodology.
5 Adjusted EBITDA after IFRS 16 calculated
according to Wendel's usual methodology
- PR_Wendel_Q1 2023 Activity_270423
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