PRESS RELEASE —
Half-year 2023 trading update and results
Solid start of the year across portfolio
Net Asset Value overall stable year-to-date, restated from dividend
Dynamic implementation of new strategic directions
& Active portfolio management
Net asset value as of
- Restated from the €3.2 dividend per share paid in
June 2023 , NAV is overall stable year-to-date (-0.9%) and down 3.6% sinceMarch 31, 2023 .
Consolidated1 H1 2023 sales of €3,443.6 million, up +6.5% overall and +6.0% organically
- Constantia Flexibles: following the binding offers received to acquire the company, it is no longer included in consolidated sales. The company delivered a very strong first half
- Very strong first half for Bureau Veritas and CPI
- Rebound as expected in Q2 for ACAMS
- Resilient margin for Stahl in a mixed environment
H1 2023 net income Group share of €39.6 million, down from the €479.8 million net income of H1 2022, which had been boosted by the base effect resulting from the €589.9 million capital gain on the disposal of
- Net income from operations of €348 million, slightly down 1.9%.
- Non-recurring income of €-56.8 million, impacted primarily by portfolio companies’ non-recurring items.
- H1 2023 consolidated net income of €218.8 million, and net income Group share of €39.6 million
Strong financial structure : Ample liquidity and increased maturity
- Loan-to-value (LTV) ratio at 8.5%2 as of
June 30, 2023 - Syndicated Credit Facility (fully undrawn) increased to €875 million with maturity in extended to
July 2028 - Total liquidity of c.€2.6 billion3 as of
June 30, 2023 , including €1.7 billion in cash and €875 million in committed credit facility (fully undrawn) - Average debt maturity extended to 5.1 years with a weighted average cost of 2.4% following the successful placement of a €300 million 7-year bond at 4,50% interest realized on
June 12, 2023 , and the repurchase for a total amount of €90.8 million of its bonds maturing inApril 2026 .
- Syndicated Credit Facility (fully undrawn) increased to €875 million with maturity in extended to
New strategic Orientations: a very active start of the year
Active portfolio rotation
- On
July 25, 2023 , Wendel received several binding offers to acquire Constantia Flexibles:- Value of Constantia Flexibles in NAV as of
June 30, 2023 is based on binding offers received, resulting in a higher value thanMarch 31 st, 2023 level
- Value of Constantia Flexibles in NAV as of
- €557 million equity invested to acquire Scalian, deal closed on
July 27, 2023 - Wendel Growth: €37 million invested or committed into 3 direct assets in H1 2023 bringing the total to c.€206 million of commitment (including funds)
- Issue of a €750 million exchangeable bonds into shares of Bureau Veritas issued by Wendel in
March 2023
Active commitment from Wendel & acquisitions in portfolio companies for value creation
Laurent Mignon appointed Chairman of the Board of Directors of Bureau VeritasMaud Funaro is appointed Operating Director, Digital transformation- Ongoing dialogue with IHS to improve the company’s corporate governance, aiming to improve towards the best practices of
U.S. -listed companies - Stahl acquired ISG, a leader in high performance packaging coatings (c.
$140 million sales in 2022) - Constantia acquired Drukpol Flexo in
Poland and Lászlópack Kft inHungary (combined estimated annualized sales of c.€45 million in 2023)
Strengthened organization to deploy strategic orientations announced in
- Jerôme Michiels, Executive Vice-President takes on third-party asset management activity
Cyril Marie appointed Executive Vice-President Strategy and Corporate Development at Wendel
Wendel SE commits to SBTi
- Wendel announces today having committed to set near-term company-wide greenhouse gas emission reductions in line with climate science with the SBTi. Wendel’s targets will be submitted to SBTi for approval by the end of 2023.
- Wendel’s near-term targets will be set at 2 levels:
- Greenhouse gas emissions from Wendel's offices (scopes 1 and 2)
- Greenhouse gas emissions from eligible companies4 in Wendel’s portfolio, using the “portfolio coverage approach” from SBTi guidelines (scope 3)
- These targets are in addition to the SBTi commitments already approved for portfolio companies: Bureau Veritas, Constantia Flexibles, Stahl and Tarkett.
“The first half of 2023 was very dynamic for Wendel and its portfolio companies. Consolidated net sales rose by a total of 6.5%, driven in particular by the very good performances of Bureau Veritas and We embarked on the new strategic directions announced in March, with a strong portfolio rotation, with the acquisition of a majority stake the Scalian Group, and today’s announcement of several binding offers to acquire Constantia Flexibles. We are strongly involved in our companies to support the implementation of their ambitious value creation plans, through stronger governance and active support in their operational and external growth. We also further strengthened Wendel’s organisation and expertise to develop our future third-party asset management activity while we continue to consistently enhance our ESG profile. These first six months are showing that Wendel’s value creation journey for all shareholders is well on track.” |
Group companies Contribution to H1 2023 sales
H1 2023 consolidated sales(1)
(in millions of euros) | H1 2022 | H1 2023 | Δ | Organic Δ |
Bureau Veritas | 2,693.4 | 2,904.2 | +7.8% | +9.4% |
Stahl | 470.9 | 443.0 | -5.9% | -14.3% |
CPI | 48.2 | 53.9 | +11.8% | +11.2% |
ACAMS (1) | 19.8 | 42.5 | n/a | n/a |
Consolidated net sales(2) | 3,232.3 | 3,443.6 | +6.5% | +6.0% |
(1) ACAMS accounts have been consolidated since
(2) Constantia Flexibles is classified as assets held for sale and discontinued operations.
H1 2023 sales of equity-accounted companies
(in millions of euros) | H1 2022 | H1 2023 | Δ | Organic Δ |
Tarkett | 1,564.0 | 1,608.2 | +2.8% | +3.9% |
Discontinued operations – IFRS 5
(in millions of euros) | H1 2022 | H1 2023 | Δ | Organic Δ |
Constantia Flexibles(3) | 917.9 | 1,039.6 | +13.3% | +11.7% |
(3) 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”. Comparable sales for H1 2022 represent €917.9M versus 2022 published sales of €985.2M. The difference of €67.3M corresponds to Constantia Flexibles’ Indian operations, classified as assets held for sale and discontinued operations at the level of Constantia Flexibles in accordance with IFRS 5.
H1 2023 consolidated results
(in millions of euros) | H1 2022 | H1 2023 |
Consolidated subsidiaries | 414.1 | 402.1 |
Financing, operating expenses and taxes | -59.3 | -54.1 |
Net income from operations (1) | 354.9 | 348.0 |
Net income from operations, (1) Group share | 127.9 | 115.3 |
Non-recurring net income, loss | 533.6 | -56.8 |
Impairment | -154.0 | -8.1 |
Impact of goodwill allocation | -61.6 | -64.3 |
Total net income | 672.6 | 218.8 |
Net income, Group share | 479.8 | 39.6 |
(1) Net income before goodwill allocation entries and non-recurring items.
H1 2023 net income from operations
(in millions of euros) | H1 2022 | H1 2023 | Change |
Bureau Veritas | 262.0 | 290.6 | +10.9% |
Stahl | 77.2 | 41.8 | -45.8% |
Constantia Flexibles | 69.0 | 68.9 | -0.2% |
CPI | 4.0 | 1.7 | -57.4% |
ACAMS | 0.5 | -2.0 | n/a |
Tarkett (equity accounted) | 1.5 | 1.1 | -26.7% |
Total contribution from Group companies | 414.1 | 402.1 | -2.9% |
of which Group share | 187.1 | 169.3 | -9.5% |
Total operating expenses | -40.6 | -48.5 | +19.3% |
Total financial expense | -18.7 | -5.6 | -70.0% |
Net income from operations | 354.9 | 348.0 | -1.9% |
of which Group share | 127.9 | 115.3 | -9.8% |
The Supervisory Board met on
Wendel Group’s consolidated sales for the first half of 2023 reached €3,443.6 million, up +6.5% overall and up +6.0% organically.
The overall contribution of Group companies to net income from operations amounted to €402.1 million, down 2.9% from the first half of 2022. Financial expenses, operating expenses and taxes recorded by Wendel represented €54.1 million, down €5.2 million from the €59.3 million reported in H1 2022. Non-recurring net result was a loss of €56.8 million in H1 2023 versus a gain of €533.6 million in H1 2022. This decrease is mainly due to the base H1 2022 comparison basis, which was marked by the sale of
Group companies’ results
Figures are presented including the impact of IFRS 16
Bureau Veritas: Strong H1 2023 operating and financial performance; higher organic revenue growth expected for the full-year 2023.
(full consolidation)
Revenue in the first half of 2023 amounted to €2,904.2 million, a 7.8% increase compared with H1 2022. The organic increase was 9.4% compared with H1 2022, of which 10.3% in the second quarter of 2023, benefiting from solid market trends across most businesses and geographies. Four businesses delivered very strong organic growth: Marine & Offshore, up 15.6%, Industry, up 15.5%, Certification, up 11.2%, and Buildings & Infrastructure (B&I), up 10.8%.
The scope effect was a positive 1.5%, reflecting bolt-on acquisitions realized in the past few quarters.
Currency fluctuations had a negative impact of 3.1% (including a negative impact of 4.9% in Q2), mainly due to the strength of the euro against most currencies.
Adjusted operating profit increased by 5.7% to €434.2 million. First half 2023 adjusted operating margin was organically resilient as the Group managed to deliver broadly the same margin at constant currency (15.2%) as last year (15.3%) despite inflationary pressures and the mixed performance of Consumer Products Services. The adjusted operating margin was 15.0%.
At
2023 New Outlook
Based on the half-year performance, a healthy sales pipeline and the significant growth opportunities related to Sustainability, Bureau Veritas now expects for the full year 2023 to deliver:
- mid to high single-digit organic revenue growth (up from mid-single-digit organic revenue growth previously);
- a stable adjusted operating margin at constant exchange rates;
- a strong cash flow, with a cash conversion5 above 90%.
For more information: group.bureauveritas.com
Stahl – Total sales down -5.9% in the first half, impacted by lower volumes, as observed generally in the chemicals industry. Solid EBITDA margin at 20.8%. Successful completion of the acquisition of
(full consolidation)
Stahl posted total sales of €443 million in the first half of 2023, representing a decrease of -5.9% versus H1 2022. Organic growth was down -14.3%, and FX impact was nil. The acquisition of
Activity in the global coatings industry was generally muted during the first half of the year in line with continued customer destocking and the reduction in industrial production globally. As a result, Stahl experienced lower volumes across its divisions, only partly compensated by favorable price trends. Effective margin management and strict cost control contributed to a solid EBITDA margin of 20.8%.
Stahl expects the destocking of global supply chains to come to an end at some time in H2. In combination with cost containment and improving margins this should lead to an improved performance in the second half of the year.
H1 2023 EBITDA6 amounted to €92 million, translating into an EBITDA margin of 20.8%, in line with Stahl’s historical levels.
Net debt as of
Constantia Flexibles—Total growth of +13.3% with a strong EBITDA margin at 16.1% resulting from topline and operational performance as well as an accretive M&A strategy.
In accordance with IFRS 5, Constantia Flexibles activities are reclassified to discontinued operations and operations held for sale and have been reclassified in Wendel’s consolidated financial statements.
H1 20239 sales totaled €1,039.6 million, up + 11.7% on an organic basis driven by strong performance of the Pharma markets and sustained sales growth in the Consumer markets despite a somewhat more challenging macroeconomic environment. Total sales growth was +13.3%. The acquisitions of FFP Packaging Solutions (FFP) in
EBITDA stood at €167.0 million10, up +24.4%, resulting in a strong 16.1% margin, up 144 bps year on year. This is the result of (i) a positive price and mix effect (ii) pricing discipline and continuous efforts on cost reduction and (iii) an accretive M&A strategy.
Constantia Flexibles continued its selective acquisition strategy: on
The leverage ratio11 has been improved to 1.02x EBITDA compared to 1.2 at the beginning of the year, pro forma of recent acquisitions. Net debt stood at €315.8 million12 at the end of
(full consolidation)
Growth was underpinned by continued expansion of the installed base of Certified Instructors (CIs), as well as the related growth in peer training. Despite the staffing challenges facing both the education and healthcare industries in the
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 generated EBITDA of $26.0 million13, representing a very slight decrease of 0.8% and margin of 44.7%. H1 EBITDA reflected planned growth investments in people and systems and, to a lesser extent, increased costs in travel and venues used for the company's in-person training, and slowing adoption of special topic certifications and renewals that benefited margins in 2022. Management expects second half revenue growth and limited additional cost increase to produce higher profitability.
As of
ACAMS – Total revenue up +1% in H1 2023, with 17% growth in Q2 2023 impacted by Conferences timing effects. EBITDA margin in the first half of 19.9%, up 150bps.
(full consolidation since
In the first half of the year, the revenue of ACAMS, a global leader in training and certifications for anti-money laundering and financial-crime prevention professionals, totaled
As of
Tarkett – Sales growth driven by Sport and price increases implemented in 2022. Stable EBITDA and good free cash flow generation.
(Accounted for by the equity method)
Net revenue in H1 2023 was €1,608 million, up by 2.8% compared to the first half of 2022. Organic growth reached 3.9%. The total effect of the selling price increases implemented in 2022 across all segments is +5.5% on average in 2023 compared to H1 2022. Over the period, volume fell by ‐2.1%. The strong Sport activity largely offsets the volume shrinkage in flooring, which is particularly pronounced in EMEA against a backdrop of weakness in the Residential segment. The currency effect contributed negatively, notably due to the depreciation of the Russan ruble, the Norwegian krone and the pound sterling in EMEA and the dollar.
Adjusted EBITDA amounted to €126.1 million, i.e., 7.8% of revenue, compared to €126.2 million in H1 2022, i.e., 8.1% of revenue.
Net financial debt amounts to €649 million at the end of
For more information: https://www.tarkett-group.com/en/investors/
NAV of €163.2 per share as of
Net asset value was €7,246 million, or €163.2 per share, as of
Strong financial structure: Ample liquidity and maturity further extended
- Loan-to-value (LTV) ratio at 8.5% as of
June 30, 2023 - Syndicated Credit Facility (fully undrawn) increased to €875 million with maturity in extended to
July 2028 - Total liquidity of €2.6 billion18 as of
June 30, 2023 , including €1.7 billion in cash and €875 million committed credit facility (fully undrawn) - Average debt maturity extended to 5.1 years with a weighted average cost at 2.4% following the successful placement of a €300 million 7-year bond at 4.50% interest on
June 12, 2023 , and the repurchase for a total amount of €90.8 million of its bonds maturing inApril 2026 . - Investment grade corporate ratings: Moody’s Baa2 with a stable outlook/S&P BBB with a stable outlook
- Syndicated Credit Facility (fully undrawn) increased to €875 million with maturity in extended to
Significant events since the beginning of 2023
Wendel acquired the Scalian Group, a leading European consulting firm in digital transformation, project management and operational performance.
On
Founded in 1989, Scalian is ranked among
The group expects to reach c. €515 million in revenue, an adjusted EBITDA19 margin of c. 14% as of
Since 2015, the company has delivered average annual growth of around +30% of its revenues, including +12% of organic growth despite Covid, amplified by a selective external growth strategy, in
Scalian has implemented a ESG policy having resulted in several certifications (ISO 9100, 9001,14001, 27001). The Group has obtained an
The Science Based Targets initiative (SBTi) is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is focused on accelerating companies across the world to halve emissions before 2030 and achieve net-zero emissions before 2050.
Wendel has committed to set near-term company-wide emission reductions in line with climate science with the SBTi. Wendel’s targets will be submitted to SBTi for approval by the end of 2023.
Wendel’s near-term targets will be set at 2 levels:
- Greenhouse gas emissions from Wendel's offices (scopes 1 and 2)
- Greenhouse gas emissions from eligible companies in Wendel’s portfolio20, using the “portfolio coverage approach” from SBTi guidelines (scope 3)
These targets are in addition to the SBTi commitments already approved for portfolio companies: Bureau Veritas, Constantia Flexibles, Stahl and Tarkett.
1 Constantia Flexibles is classified as assets held for sale and discontinued operations (IFRS 5), and is no longer included in consolidated sales
2 Before closing of Scalian and disposal of Constantia Flexibles. Pro forma of these transactions and dividend received from Bureau Veritas, LTV would be non-material.
3 After dividend payment of €139 million from Wendel to its shareholders and before €123.8 million dividend received from Bureau Veritas on
4 "Eligible companies” are those in which Wendel holds more than 25% of the shares and 1 seat on the board of directors (or 15% of the shares for Wendel Growth companies) according to SBTi guidelines.
5 Net cash generated from operating activities/Adjusted Operating Profit.
6 EBITDA including IFRS 16 impacts, EBITDA excluding IFRS 16 stands at €89.2m.
7 Including IFRS 16 impacts. Net debt excluding the impact of IFRS 16 was €275.2m.
8 Leverage as per credit documentation definition.
9 In accordance with IFRS 5, Indian activities are reclassified as assets held for sale and discontinued operations . Figures are excluding Indian activities in 2022 and 2023.
10 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was €161.2m.
11 According Credit documentation
12 Including IFRS 16 impacts. Net debt excluding the impact of IFRS 16 was €267.3m.
13 EBITDA including the impact of IFRS 16. EBITDA excluding the impact of IFRS 16 was
14 Including IFRS 16 impacts. Net debt excluding the impact of IFRS 16 was
15 Revenue excludes PPA restatement impact of
16 EBITDA including IFRS 16 impacts, EBITDA excluding IFRS 16 stands at
17 Including IFRS 16 impacts. Net debt excluding the impact of IFRS 16 was
18 After dividend payment of € 139 million from Wendel to its shareholders and before €123.8 million dividend received from Bureau Veritas on
19 Adjusted EBITDA after IFRS 16 calculated according to Wendel's usual methodology.
20 Portfolio companies over 25% owned with at least one seat on the board (15% threshold for Venture Capital)
Agenda
Q3 2023 Trading update – Publication of NAV as of
2023 Investor Day
FY 2024 results – Publication of NAV as of
Q1 2024 Trading update – Publication of NAV as of
Annual General Meeting
H1 2024 results – Publication of NAV as of
Q3 2024 Trading update – Publication of NAV as of
2024 Investor Day
About Wendel
Wendel is one of Europe’s leading listed investment firms. The Group invests in
Wendel is listed on Eurolist by Euronext Paris.
Standard & Poor’s ratings: Long-term: BBB, stable outlook – Short-term: A-2 since
Moody’s ratings: Long-term: Baa2, stable outlook since
Wendel is the Founding Sponsor of Centre Pompidou-Metz. In recognition of its long-term patronage of the arts, Wendel received the distinction of ‘Grand Mécène de la Culture’ in 2012.
For more information: wendelgroup.com
Follow us on LinkedIn @Wendel
Press contacts | Analyst and investor contacts |
Olivier Allot: +33 1 42 85 63 73 | |
c.anglade@wendelgroup.com | o.allot@wendelgroup.com |
c.decaux@wendelgroup.com | l.roch@wendelgroup.com |
Primatice | |
olivierlabesse@primatice.com | |
huguesschmitt@primatice.com | |
Kekst CNC | |
todd.fogarty@kekstcnc.com |
Attachment
- PR_H12023_Wendel_27072023
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