Q1 2022 Trading update
Good start of the year across portfolio
Q1 2022 consolidated net sales: €2,007.2 million, up 14.9% overall and up 9.9% organically year-on-year
· Strong growth across portfolio in Q1 2022
· Double digit organic growth for ACAMS, CPI, Constantia Flexibles and Tarkett
· Strong organic growth for Bureau Veritas (+8.0%) and Stahl (+5.0%)
· Positive FX impacts across the portfolio (+2.9% consolidated)
Net asset value as of
Active portfolio rotation and capital deployment since the start of 2022
- Disposal of
Cromology closed onJanuary 21, 2022 , generating €896 million in proceeds forWendel - c.€3041 million equity invested to acquire ACAMS on
March 10, 2022 Wendel Lab : €30.5 million new commitments in Q1 2022 bringing the total to €145 million- €15 million of
Wendel shares bought back in Q1 2022
Strong financial structure
- Successful issue of €300 million 12-year bond at 1.375% coupon on
January 16, 2022 - LTV ratio of 5.8% as of
March 31, 2022 - Further optimization of the cost and maturity of Wendel’s debt: exercise on
April 19, 2022 , of the make-whole redemption of bonds maturing inOctober 2024 , resulting in an average maturity extended to 7.12 years and an average weighted cost lowered to 1.7% - Pro forma total liquidity of €1.7 billion3 as of
March 31, 2022 , including €960 million of cash and €750 million available under the committed credit facility (fully undrawn)
Return to shareholders and 2021 Dividend
Wendel to cancel 377,323 of its treasury shares (0.84% of the share capital) onApril 29, 2022 . Cancellation of these shares will have a pro forma positive impact of +€0.7/share on theMarch 31 , 2022’s NAV due to the current significant share discount to NAV. Following the cancellation, the number of outstanding shares will be 44,370,620.
· Ordinary dividend of €3.0 per share for 2021, up 3.4%, to be proposed at the Annual Shareholders’ Meeting on
“The first quarter of 2022 confirmed the overall organic trends observed at the end of last year in sales across our portfolio. This strong growth comes with challenging conditions regarding raw materials availability and price, but our companies have clearly shown their ability to adapt to fast changing environments. Our net asset value has been quite resilient, despite the first quarter stock market turmoil, and we opportunistically took advantage of the sizeable discount to NAV to buy back some We have continued our objective of capital redeployment in line with our roadmap with the acquisition of ACAMS which further enhances the growth profile of our portfolio, following the acquisition of CPI. This transaction was creative, illustrating our team’s ability to carry out complex projects as the buyer of choice. As we look forward, our robust balance sheet with relatively little corporate and portfolio company leverage overall and our long-term perspective should allow us to continue to execute our roadmap capitalizing on acquisition opportunities which will likely result from current volatile circumstances.” |
Q1 2022 sales of Group companies
Q1 2022 consolidated sales
(in millions of euros) | Q1 2021 | Q1 2022 | Δ | Organic Δ |
Bureau Veritas | 1,154.7 | 1,290.1 | +11.7% | +8.0% |
Constantia Flexibles | 366.7 | 464.2 | +26.6% | +17.8% |
Stahl | 210.1 | 224.9 | +7.0% | +5.0% |
15.3 | 20.8 | +35.8% | +27.2% | |
ACAMS(1) | n.a | 7.2 | n.a | n.a |
Consolidated net sales(2) | 1,746.9 | 2,007.2 | +14.9% | +9.9% |
- ACAMS accounts have been consolidated since
March 11, 2022 . - Comparable sales for Q1 2021 represent €1,746.9m vs. 2021 published sales of €1,912.8m. The difference of c. €166.0m corresponds to
Cromology group, classified as asset held for sale in accordance with IFRS 5. The contribution of this portfolio company has been reclassified in "Net income from discontinued operations and operations held for sale” sinceNovember 2021 .Cromology was sold by the Group beginning of 2022.
Q1 2022 sales of equity accounted companies
(in millions of euros) | Q1 2021 | Q1 2022 | Δ | Organic Δ |
Tarkett | 558.8 | 684.7 | +22.5% | +19.2% |
Sales of Group companies
Bureau Veritas – Strong organic revenue growth in the first quarter of 2022; Solid 2022 outlook confirmed
(full consolidation)
Bureau Veritas’ revenue in the first quarter of 2022 amounted to €1,290.1 million, a 11.7% increase compared with Q1 2021. Organic growth was 8.0%, compared to a 2.5% increase in the last quarter of 2021 and benefited from a catch-up effect following the cyber-attack which occurred in Q4 2021.
Three businesses delivered strong organic growth, Industry 11.9%,
By geography, activities in
The scope effect was a positive 0.5%, reflecting bolt-on acquisitions realized in the past few quarters. Currency fluctuations had a positive impact of 3.2%, mainly due to the appreciation of the USD and pegged currencies against the euro, which was partly offset by the depreciation of some emerging countries' currencies.
2022 outlook confirmed:
Based on a healthy sales pipeline and the significant growth opportunities related to Sustainability, and assuming there are no severe lockdowns in its main countries of operation due to Covid-19, for the full year 2022, Bureau Veritas still expects to:
- Achieve strong organic revenue growth; mid-single-digit organic revenue growth;
- Improve the adjusted operating margin;
- Generate sustained strong cash flow with a cash conversion5 above 90%.
For more information: https://group.bureauveritas.com
Constantia Flexibles –Record organic growth of 17.8% mostly driven by price increases, to compensate input cost inflation, as well as robust volume growth
(full consolidation)
Q1 2022 sales totaled €464.2 million, up 26.6% compared with Q1 2021 (€366.7 million). Constantia’s sales were up by 17.8% organically over the period, driven mostly by waves of price increases to compensate for the inflationary pressure input costs, notably raw materials and energy. It is worth noting that Q1 2022 has marked an encouraging return to organic volume growth, confirming the good momentum instilled by the new management team’s commercial initiatives. However, the market in
Consumer market revenues grew organically by 20.0% driven by price increases and volume growth, notably in snacks and baked goods. The Pharma division posted +11.5% organic growth driven mainly by prices. Q1 2022 is not completely comparable with Q1 2021, benefiting from the acquisition of
Constantia is carefully managing the inflationary cost environment as well as the availability of raw materials, particularly aluminum, focusing its efforts on preserving the profitability of the company working both on the passthrough of input costs as well as pursuing its cost control program.
On the sustainability front, Constantia is actively developing and promoting its Ecolutions portfolio in line with the industry transformation towards recyclable packaging. With the above-mentioned
Stahl – Sales up 7.0 % in Q1 2022, with organic growth of 5.0%
(full consolidation)
Stahl, the world leader in coating layers and surface treatments for flexible materials, posted total sales of €224.9 million in Q1 2022, representing an increase of +7.0% versus Q1 2021. Organic growth stood at +5.0% over the quarter while FX was positive (+2.0%).
Activity over the first quarter of the year was above expectations at group level, with a strong performance in Performance Coatings offsetting lower than expected volumes in Leather Chemicals. Across all segments, price increases were implemented at the beginning of the year to mitigate the strong impact of rising input costs. Management continues to closely monitor the inflationary environment and is ready to take additional measures to protect its margin where needed.
Orderbook increased in Q1 2022, and is close to the all-time high, as new intakes remained solid in volumes and benefited from price increases measures. This gives good visibility on the topline performance in Q2 2022.
(full consolidation)
CPI continues to enjoy a mix shift toward digital solutions for both new CIs and renewals, with programs retaining the required in-person components. Virtual Learner Materials continued to expand in the share of delivery representing 45% of Learner Materials sales and 34% of total Learner Material volumes, above the 30% and 11% volume levels in 2020 and 2019.
ACAMS – Strong start to the year for ACAMS, with year-to-date revenue growth of +31.2%
(full consolidation since
ACAMS, the global leader in training and certifications for anti-money laundering and financial-crime prevention professionals, generated total revenue of
Tarkett – Solid performance driven by sustained activity and the acceleration in selling price increases
(Mise en équivalence depuis le 07/07/2021)
Net revenue was €685 million, up by +22.5% compared to the first quarter of 2021. Organic growth reached +19.2% including selling price increases in the CIS countries implemented to offset the inflation in purchasing costs and the devaluation of the rouble6. The total effect of the selling price increases implemented across all segments is +12.9% on average compared to the first quarter of 2021.
The EMEA segment achieved revenue of €238 million, an increase of +8.1% compared to the first quarter of 2021 due to the acceleration of selling price increases.
The
Revenue in the CIS, APAC and
In
As expected, business grew strongly in the Sports segment. Revenue was €109 million, up by +66.0% and including +55.7% organic growth compared to the first quarter of 2021.
Actions to reduce the cost structure are well underway and Tarkett is forecasting around €30 million of annual structural savings in 2022.
The significant increase in oil and energy prices will contribute to the increase in purchasing costs now valued at €250 million compared to 2021 (against an estimated €220 million at the beginning of the year).
Tarkett continues to implement selling price increases across all its geographies to offset the effect of increased purchasing costs over the year. At the current level of purchasing prices, the company is targeting a neutral inflation balance over the year (selling price effect compared to 2021 minus purchasing price effect).
For more information: https://www.tarkett-group.com/en/investors/
Wendel’s net asset value: €165.8 per share as of
NAV as of
Net Asset Value was €7,420 million or €165.8 per share as of
The discount to NAV was 46.4% as of
Gross debt as of the end of
On
On
As of
2022 other significant events:
Announced on
ACAMS is the global leader in training and certifications for anti-money laundering (“AML”) and financial crime prevention professionals. ACAMS has a large, global membership base with more than 90,000 members in 175 jurisdictions, including over 50,000 professionals who have obtained their CAMS certification-an industry-recognized AML qualification- that promotes ongoing education through participation in conferences, webinars, and other training opportunities.
The Company has approximately 275 employees primarily located in the
Sale of
After obtaining the necessary authorizations,
This transaction is a milestone in Wendel’s 2021-24 roadmap, and its target to accelerate the redeployment of its capital toward growth companies.
Return to shareholders and Dividend
An ordinary dividend of €3.0 per share for 2021, up 3.4%, will be proposed at the Annual Shareholders’ Meeting on
€15 million of
Agenda
Shareholders’ Meeting
H1 2022 results – Publication of NAV as of
Publication of consolidated first-half financials (pre-market release)
Q3 2022 trading update – Publication of NAV as of
Investor Day 2022
About
Standard & Poor’s ratings: Long-term: BBB, stable outlook – Short-term: A-2 since
Moody’s ratings: Long-term: Baa2, stable outlook – Short-term: P-2 since
For more information: wendelgroup.com
Follow us on Twitter @WendelGroup
Appendix 1: NAV as of
(in millions of euros) | ||||||
Listed equity investments | Number of shares | Share price (1) | 4,864 | 5,559 | ||
Bureau Veritas | 160.8/160.8 m | €25.9/€28.7 | 4,162 | 4,616 | ||
IHS | 63.0/63.0m | 592 | 748 | |||
Tarkett | €13.2/€18.6 | 110 | 195 | |||
Investment in unlisted assets (2) | 2,901 | 3,732 | ||||
Other assets and liabilities of | 108 | 97 | ||||
Net cash position & financial assets (4) | 1,498 | 650 | ||||
Gross asset value | 9,370 | 10,038 | ||||
-1,950 | -1,619 | |||||
Net Asset Value | 7,420 | 8,419 | ||||
Of which net debt | -453 | -969 | ||||
Number of shares | 44,747,943 | 44,747,943 | ||||
Net Asset Value per share | €165.8 | €188.1 | ||||
Wendel’s 20 days share price average | €88.9 | €102.3 | ||||
Premium (discount) on NAV | -46.4% | -45.6% |
- Last 20 trading days average as of
December 31, 2021 , andMarch 31, 2022 - Investments in non-publicly traded companies (
Cromology (as ofDecember 31, 2021 ), Stahl, Constantia Flexibles,Crisis Prevention Institute , ACAMS (as ofMarch 31, 2022 ),Wendel Lab ). Aggregates retained for the calculation exclude the impact of IFRS 16. ACAMS investment being valued for the first time in the Net Asset Value, calculation is weighted at 100% on acquisition multiple and 0% on listed peer-group multiples, as per methodology. - Of which 1,116,456 treasury shares as of
December 31, 2021 , and 1,278,422 treasury shares as ofMarch 31, 2022 - Cash position and financial assets of
Wendel & holdings. As ofMarch 31, 2022 , this comprises €1.2 bn of cash and cash equivalents and €0.3 bn short term financial investment.
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 374 of the 2021 Universal Registration Document.
1 c.
2 As of
3 Proforma the early repayment in whole of the bond maturing in
4 Based on Wendel’s share price of €105.4 as of
5 Net cash generated from operating activities/Adjusted Operating Profit
6 Price adjustments in the CIS are historically implemented to offset currency fluctuations and therefore excluded from organic growth. Excluding those price adjustments, organic growth reached +15.2% (please refer to the company’s press release).
7 See page 332 of the 2021 Universal Registration Document for the NAV methodology.
8 As of
9 Proforma the early repayment in whole of the bond maturing in
10 Based on Wendel’s share price of €105.4 as of
Attachment
- Wendel_Q1_2022
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