Historical high Net Asset Value per share of €189.1,
up +18.9% vs.
Very strong and profitable rebound by portfolio companies in H1 2021, with activity levels often exceeding H1 2019
€260 million in capital deployed since the beginning of the year
Historically high Net Asset Value as of
Trading discount to Net Asset Value remains at a very high level (40.6%)
Since December 31, 2020 :
- Bureau Veritas’ value up +18.2%.
- Unlisted assets’ value up +23.6% driven largely by the rebound in listed peers’ multiples used for valuation, as well as an increase in companies’ actual and expected earnings following their good performance, enhanced by a mark-up (+60% in Q2) of the
Wendel Lab portfolio value following the IPO of a portfolio company held by one of our invested funds.
Consolidated H1 2021 sales of €3,997.4 million, up +11.3% overall
- Bureau Veritas posts strong first half and raises full-year 2021 outlook.
- Constantia Flexibles sales stable, profitability increased.
- Other companies achieve strong rebound in the first half:
Cromology sales up +27.7% year-over-year and +6.3% over H1 2019. EBITDA margin of 19.7%.- Stahl sales up +32.5% year-over-year and slightly above H1 2019. EBITDA margin of 26.0%.
- CPI’s sales up +68% year-over-year and +8% above H1 2019. EBITDA margin of 46.6%
Deployement of c. €260 million since the beginning of the year
- €216.7 million invested by
Wendel in partnership with the Deconinck Family to acquire Tarkett’s shares as ofJuly 28, 2021 Wendel Lab :$40.0 million committed and €18 million invested- €25 million of own shares bought back in the first half
Group companies: other noteworthy developments since
·On
·On
·On
·On
·Maarten Heijbroek started as new Stahl CEO on
·Stahl’s sustainability efforts have been rewarded in July with a Gold rating from
ESG:
Wendel’s financial structure has remained strong, with an improved debt profile and we are poised to further redeploy capital
- LTV ratio at 9.0% as of
June 30, 2021 1 - Total liquidity of €1.97 billion2 as of
June 30, 2021 , including €1,219 million in cash and €750 million in a committed credit facility (fully undrawn) - Average debt maturity3 extended to 5.5 years following the successful placement of €300 million 10-year bond at 1.0% interest on
May 26, 2021 . Proceeds from this offering have been used for the early repayment, onJuly 1 st, 2021, in whole of the bond maturing inApril 2023 . - Investment grade corporate ratings: Moody’s Baa2 with stable outlook / S&P BBB with stable outlook
Dividend of € 2.9 per share, 3.6% above last year
“We are very pleased with the performance of our companies in the first half of 2021. Sales have either continued to increase or have recovered from 2020 and generally exceed H1 2019. EBITDA grew across the board and some margin levels are at record highs, translating into additional cash flow generation and further strengthening of capital structures. This strong rebound comes with new challenges regarding the availability and price of raw materials but our companies have thus far demonstrated an ability to adapt to volatile market conditions .
Our Net Asset Value has strongly benefitted from our unlisted companies’ improved performance and prospects and also from increased stock market valuations of comparable companies. Bureau Veritas, our largest investment, also contributed to leading our NAV to a historical high.
As previously announced, we have actively resumed our search for new investments in line with the new strategic roadmap which was endorsed by Wendel’s Supervisory Board in the final quarter of 2020. A first transaction took place in April with the announcement of an investment in Tarkett in partnership with the founding family which illustrates the
We are making good progress on attracting new talent into our investment team and on continuing to help our companies accelerate their growth trajectories, organically or drawing on their strong balance sheets.”
While our dividend and NAV have grown from 2017, we observe that our share price remains significantly below levels prevailing at that time, with a very strong discount to underlying value. We have therefore continued to take advantage of this discount by opportunistically buying back some
Group consolidated companies Contribution to H1 2021 sales
(in millions of euros) | H1 2020 | H1 2021 | Δ | Organic Δ |
Bureau Veritas | 2,200.5 | 2,418.4 | + 9.9% | +14.3% |
Constantia Flexibles | 761.4 | 752.1 | - 1.2% | + 0.7% |
290.2 | 370.7 | + 27.7% | + 27.8% | |
Stahl | 316.8 | 419.8 | + 32.5% | + 36.4% |
CPI (1) | 23.7 | 36.5 | + 53.6% | + 59.0% |
Consolidated net sales | 3,592.6 | 3,997.4 | + 11.3 % | + 14.7 % |
- H1 2020 Sales included a PPA restatement impact of -
$1,5M , included in perimeter effect.
Group companies’ results
Figures are after IFRS 16
Bureau Veritas: Excellent H1 2021 operating and financial performance; 2021 Full Year outlook upgraded
(full consolidation)
Revenue in the first half of 2021 amounted to €2,418.4 million, a 14.3% organic growth, of which 22.5% in the second quarter, benefiting from improving end markets across most businesses and the return to a more normal operating environment compared to H1 2020.
More than half of the portfolio (including Certification, Consumer Products and Buildings & Infrastructure) strongly recovered, up +23.2% organically on average. Certification was the best performing activity, up +38.6% in H1 (including a +58.5% growth in Q2) benefiting from both catch-up of audits and strong momentum on CSR-related services. Consumer Products strongly returned to growth (up +23.4% in H1, with a +27.3% increase in Q2) fueled by
The scope effect was a negative -0.1%, reflecting the impact from prior-year disposals offset by the four bolt-on acquisitions realized in the first half of 2021. Currency fluctuations had a negative impact of -4.3% (of which -3.6% in Q2), mainly due to the depreciation of some emerging countries’ currencies, and the USD and pegged currencies against the euro.
Consolidated adjusted operating profit increased by +75.3% to
All business activities experienced higher organic margins due to operational leverage in a context of revenue recovery. This was supported by strong cost containment measures the prior year, and favorable business mix. The businesses that saw the best margin improvement were Consumer Products, Certification and Buildings & Infrastructure, that rebounded the most following the lockdown measures in the prior year. Together, they represented the bulk of the organic increase in Bureau Veritas’ margin in the first half of 2021.
Bureau Veritas continued to see a rising demand towards quality, safety, traceability and environmental stewardship which perfectly positions the company for a new step forward in its development. Through BV Green Line of services and solutions dedicated to sustainability, Bureau Veritas is uniquely positioned to help its clients across multiple sectors to implement, measure and monitor their ESG commitments in a more transparent, credible, and data driven way than self-declaration. Bureau Veritas also has the expertise to support them with their energy transition encouraged notably by the large-scale government investment programs around the world. Bureau Veritas now expects strong growth for 2021 and upgraded its full-year outlook accordingly.
Resumption of disciplined bolt-on M&A in 2021 in strategic areas (renewables, sustainability certification, cybersecurity and consumer in
During the first half of 2021, Bureau Veritas resumed its bolt-on M&A activities, completing four transactions in strategic areas, representing around €25.0 million in annualized revenues (or 0.5% of the 2020 Group revenues) with notably the acquisition of
The pipeline of opportunities is healthy, and Bureau Veritas will continue to deploy a very selective bolt-on acquisitions strategy, in targeted areas (notably
Strong free cash flow at €228.9 million
Half-year 2021 operating cash flow decreased by -9.7% to €328.9 million vs. €364.3 million in H1 2020 (down 8.2% on an organic basis). The increase in profit before tax was largely offset by a strong working capital requirement outflow of €68.5 million, compared to a
The Working Capital Requirement (WCR) stood at €367.2 million at
Free cash flow (operating cash flow after tax, interest expenses and capex) was €228.9 million, compared to €269.6 million in H1 2020, down 15.1% year on year. On an organic basis, free cash flow reached €233.0 million, down -13.6% year on year.
Bureau Veritas shareholders approved the distribution of a dividend for the 2020 financial year
At the Bureau Veritas Combined Shareholders’ Meeting, shareholders approved the distribution of a dividend of
Strong financial position
At the end of
The average maturity of Bureau Veritas’ financial debt was 4.8 years with a blended average cost of funds over the half-year of 2.4% excluding IFRS 16 impact (compared with 3.0% in the first half of 2020 excluding the impact of IFRS 16).
2021 Outlook upgraded
Based on the excellent half-year performance, considering tough comparables in the second half, and and assuming no severe lockdowns in its main countries of operation due to Covid-19, Bureau Veritas now expects for the full year 2021 to:
- Achieve strong organic revenue growth;
- Improve the adjusted operating margin;
- Generate sustained strong cash flow.
For more information: group.bureauveritas.com
Stahl – Strong sales rebound, back to 2019 sales levels, resulting in record EBITDA and EBITDA margin thanks to tight fixed costs management. Cash generation profile remains solid, generating outstanding net debt reduction.
(Full consolidation)
Stahl’s sales totaled €419.8 million in H1 2021, representing an increase of +32.5% over H1 2020 and +0.8% over H1 2019. Organic growth was +36.4% and foreign exchange rate fluctuations had a negative impact (-3.9%).
After a challenging 2020, Stahl continued its recovery that started in Q3 2020, but accelerated since the end of 2020, despite disruptions in supply markets. This was driven by a strong order book and broad-based volume growth across almost all regions and end markets, in part due to a restocking effect observed across several industries. Growth was particularly strong in
Stahl remained highly cash generative in both quarters, notably thanks to the high EBITDA level. As a result, as of
On
Stahl’s sustainability efforts have been rewarded in July with a Gold rating from
Constantia Flexibles – Resilient first half performance with modest organic growth (+0.7%), total sales impacted by negative FX impact. Continuous improvement in EBITDA margin despite difficult trading environment in
(full consolidation)
H1 2021 sales totaled €752.1 million, slightly up by +0.7% on an organic basis driven by a +3.0% increase in organic growth in the Consumer market due mainly to good performance in personal hygiene, coffee capsules and beverage. This was partially offset by a -5.7% decline in sales in the Pharma industry since the activity was affected by lockdown-induced mild flu and cold season and due to a very strong comparative period.
These growth figures are affected by the prior period which saw Consumer sales impacted by last year’s lockdowns, notably in
The first six months of the 2021 were also adversely impacted (-1.2%) by unfavorable FX, mainly from
Constantia renewed its efforts towards improving its profitability including a new cost reduction initiatives program since the beginning of the year. Despite a negative total topline growth (-1.2%) EBITDA was up +1.8% to €98.8 million7 representing a 30 bps year-on-year margin increase to 13.1%.
At the end of June net debt was at €477.28 million, vs. €362.2 million on
On
This acquisition enhances Constantia Flexibles’ presence in the growing film packaging market segment.
From peaks in activity level in March and
A new strategy called Vision 2025 has been prepared by
(Full consolidation)
During the first half of 2021,
Since the H1 2020 lockdown, paint sales have bounced back significantly, driven by strong end-consumer demand, which made organic growth turn positive in Q3 and Q4 2020. This trend continued into the first half of 2021, with strong performances in all of Cromology’s key geographies.
Cromology’s EBITDA was €72.9 million10 in H1 2021, up +80.4%, reflecting the combined effect of a favorable base of comparison, a positive mix in terms of customers, products and countries, and a favorable price trend, in addition to the cost-saving measures that have been implemented. EBITDA margin stood at 19.7%, significantly higher than in 2019, demonstrating the positive trajectory driven by Cromology’s management, despite tension in raw material prices, which have not yet had a significant impact on margins. In addition, structural cost reductions continued, with savings achieved in various line items.
As in 2020, the company generated high cash flow and reduced its already very low financial leverage by optimizing working capital and continuing to make use of factoring. The company’s net debt was €110.3 million11 as of
As a reminder, in
IHS Towers – As a listed bond issuer,
(equity method)
(full consolidation)
Crisis Prevention Institute recorded first half 2021 revenue of $44.0 million, up +68.3% in total from H1 2020 and +8.3% versus the same period in 2019. Since the resurgence of COVID-19 lockdowns in Q4 2020, CPI has reported an upward revenue trajectory quarter-to-quarter, with Q2 2021 revenue surpassing Q1 2021 figures by +38%. This continued improvement month-to-month and versus prior years is the result of several factors, including
- Heightened customer engagement since March as training activity (both new and existing Certified Instructor (“CI”) , as well as Learners) has increased with lessening restrictions on travel / gathering
- Stabilizing overall CI count;
- First half 2021 new CI volumes were nearly double 2020 levels;
- Continued mix shift toward digital solutions for both new and existing CIs, with programs retaining the required in-person components. Learner Material sales continue to hold a string virtual presence, with e-Learning delivery representing 34% of total Learner Material volumes.
Of this +68% half-year sales increase, +5.6% was related to a purchase accounting adjustment to deferred revenue (impact of -
CPI’s activity should continue to benefit from the positive near-term recovery trend in the market amidst accelerating vaccinations and warming weather in the U.S., which are lessening restrictions around travel and gathering and driving a more usual work environment for customers, notably in hospitals and schools.
Further, CPI generated EBITDA of $20.5 million12, representing an overall increase of +188% year on year. This result corresponds to a strong margin of 46.6% over the period. Compared to H1 2019, EBITDA is up by +20% and margin has also increased (+475 basis points versus H1 2019). H1 EBITDA benefitted primarily from the flow-through of higher sales to earnings, as well as effective cost management. It benefited to a lesser extent from temporary timing differences related to marketing spend and delayed hires in sales and administrative roles.
As of
NAV of €189.1 per share as of
Net asset value was €8,456 million, or €189.1 per share, as of
The increase results from the appreciation of Bureau Veritas’ value by 18.2% year to date and an increase of unlisted assets by 23.6%. Unlisted assets value growth is the result of multiples used for private companies as well as an increase in companies’ aggregates following their good performance during H12021 leading to certain upward budget revisions.
The Net Asset Value as of
Strong financial structure: Ample liquidity and improved debt profile
- Loan-to-value (LTV) ratio at 9.0% as of
June 30, 2021 14 - Total liquidity of €1.97 billion15 as of
June 30, 2021 , including €1,219 million of cash and €750 million committed credit facility (fully undrawn) - Average debt maturity16 extended to 5.5 years following the successful placement of a €300 million 10-year bond at 1.0% interest on
May 26, 2021 . Proceeds from this offering have been used for the early repayment, onJuly 1 st, 2021, in whole of the bond maturing inApril 2023 . - Investment grade corporate ratings: Moody’s Baa2 with stable outlook / S&P BBB with stable outlook
Significant events since the beginning of 2021
Integration of ESG targets into the financial terms of the undrawn €750 million syndicated credit facility
The three non-financial criteria selected to be integrated into the calculation of the syndicated credit’s financing cost are as follows:
- ESG due diligence must systematically be carried out on new investments made directly by
Wendel , and the controlled companies in its portfolio must each implement an ESG roadmap; - the main climate risks and carbon footprint associated with each controlled portfolio company must be evaluated and action plans developed;
- at least 30% of
Wendel Group representatives on the boards of directors of portfolio companies and of certain Group holdings must be women, by the end of 2023.
These criteria will be evaluated annually by an independent third party and will be factored into adjustments to the margin of the facility.
As part of its 2021-24 investment strategy,
On
Following the closing of the offer, TP holds directly 56,300,463 shares, representing 85.89% of the share capital and 84.98% of the voting rights of Tarkett, and in total 56,548,018 shares representing 86.27% of the share capital and 85.36% of the voting rights of Tarkett, taking into account the 247,555 shares held by Tarkett itself and thus held by assimilation by TP.
Since
As a result,
Return to shareholders and dividend
As announced on
Agenda
H1 2021 financial statements - Condensed Half-Year consolidated financial statements (pre-market release).
Q3 2021 Trading update - Publication of NAV as of
2021 Investor Day - Meeting to take place in the morning
2021 Full Year Results - Publication of NAV as of
Q1 2022 Trading update - Publication of NAV as of
Annual General Meeting
H1 2022 results - Publication of NAV as of
Q3 2022 Trading update - Publication of NAV as of
2022 Investor Day.
1 Adjusted for further investment in Tarkett and net of the incoming dividend from Bureau Veritas, LTV would stand at 9.5% as of
2 Before dividend payment of € 127 million from
3 Pro forma of early repayment of the bond maturing on
4 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was €107.7m.
5 Including IFRS 16 impacts. Excluding IFRS 16 net debt is €183.5m
6 Financing documentation definition
7 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was €94.3m.
8 Including IFRS 16 impacts. Excluding IFRS 16 net debt is €438.6m
9 As per bank covenant definition
10 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was €56.9m.
11 Net debt including the impact of IFRS 16. Excluding the impact of IFRS 16, net debt was €3.3m.
12 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was
13 Including the impact of IFRS 16, excluding the impact of IFRS 16 net debt was
14 Adjusted for the rest of the Tarkett investment and net of the upcoming dividend from Bureau Veritas, LTV would stand at 9.5% as of
15 Before dividend payment of € 127 million from
16 Pro forma of early repayment of the bond maturing on
17 The Tarkett Participations shares held by
Appendix 1: NAV as of
(in millions of euros) | |||||
Listed equity investments | Number of shares | Share price (1) | 4,352 | 3,599 | |
Bureau Veritas | 160.8/160.8 m | €26.4/€22.4 | 4,253 | 3,599 | |
Tarkett | 99 | - | |||
Investment in unlisted assets (2) | 4,831 | 3,910 | |||
Other assets and liabilities of | 105 | 74 | |||
Net cash position & financial assets (4) | 1,219(5) | 1,079 | |||
Gross asset value | 10,508 | 8,662 | |||
-1,925 (5) | -1,548 | ||||
Dividend approved to be paid | -127 | - | |||
Net Asset Value | 8,456 | 7,114 | |||
Of which net debt | -832(5) | -468 | |||
Number of shares | 44,719,119 | 44,719,119 | |||
Net Asset Value per share | €189.1 | €159.1 | |||
Wendel’s 20 days share price average | €112.2 | €97.9 | |||
Premium (discount) on NAV | -40.6% | -38.5% | |||
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 360 of the 2020 Universal Registration Document |
Attachment
- Wendel_EN_H12021
© OMX, source