PRESS RELEASE -
Q3 2021 Trading update
Net Asset Value as of
Consolidated net sales for first nine months of 2021 were €5,520.6 million, up 10.3% overall and up 12.0% organically year-on-year. All companies’ nine-month sales surpassed those of 2019’s on an organic basis.
- Strong organic growth generated by Bureau Veritas (+11.9%) and Stahl (+33.8%)
- At
Crisis Prevention Institute , the strong rebound has continued (+68.6%), with 9 months 2021 revenue significantly above pre-Covid levels (+17.6%) - Resilient organic growth for Constantia Flexibles (+1.5%)
- FX headwinds experienced across the portfolio (-2.3% consolidated)
Major milestones in Wendel’s portfolio in Q3 2021:
IHS Towers was listed on theNew York Stock Exchange onOctober 14, 2021 Wendel has granted exclusivity toDuluxGroup for the sale ofCromology , with net proceeds1 forWendel of c.€907 million. This valuation is c. €369 million above Wendel’s valuation in its net asset value as ofJune 30, 2021 , the most recent data point prior to the sale announcement
Deployment of c. €270 million since the beginning of the year:
- €221.7 million invested by
Wendel in partnership with the Deconinck Family to acquire Tarkett’s shares as ofOctober 26, 2021 Wendel Lab :$45.0 million committed in 2021 to date, reaching €108 million in cumulative commitments- €25 million in
Wendel shares bought back in the first half of 2021
ESG recent achievements:
- Further improvement of extra-financial ratings and awards:
Wendel has been awarded in October the French 2021 GrandPrix de la Transparence which ranks the firm number 1 among all SBF 120 companies on the basis of the quality and transparency of all its financial and non-financial communications practices- Upgrade from “Low Risk” to “Negligible Risk” at Sustainanalytics in
September 2021 Wendel won the “Diversity in management bodies” award from L’Agefi in October
Wendel has adopted the 10 Principles of the United Nations Global Compact- Financial terms of Wendel’s Revolving Credit Facility’s amended to incorporate ESG targets
Strong financial structure:
- LTV ratio at 10.2% as of
September 30, 2021 - Total liquidity of €1.4 billion as of
September 30, 2021 , including €685 million of cash and a €750 million committed credit facility (fully undrawn) - Investment grade corporate ratings: Moody’s Baa2 with stable outlook / S&P BBB with stable outlook
- ESG targets embedded in the financial terms of the undrawn €750 million syndicated credit
“Most of our companies continued to perform well in the first nine months of 2021. Their sales exceeded 2019 levels on an organic basis. This growth comes with challenges regarding raw materials, logistics, and labor costs. Thus far they have broadly demonstrated an ability to adapt to market circumstances.
Two major events took place in October: the IPO of
Beyond these two milestones in our roadmap, we are further intensifying our search for capital redeployment towards higher-growth companies, directly and through the
Nine months 2021 sales of Group companies
Nine months 2021 consolidated sales
(in millions of euros) | 9 months 2020 | 9 months 2021 | Δ | Organic Δ |
Bureau Veritas | 3,348.8 | 3,664.1 | +9.4% | +11.9% |
Constantia Flexibles | 1,143.0 | 1,168.3 | +2.2% | +1.5% |
Stahl | 474.6 | 624.4 | +31.6% | +33.8% |
40.4 | 63.9 | +58.3% | +62.8% | |
Consolidated sales (2) | 5,006.8 | 5,520.6 | +10.3% | +12.0% |
- The PPA effect corresponds to the PPA restatement impact of
$ -1.8M booked in 9M 2020. - Comparable sales for 9 months 2021 represent 5,006.8M€ vs. 2020 published sales of 5,477.6M€. The difference of 470.8M€ corresponds to sales of
Cromology , 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”.
Q3 2021 sales of Group companies
Q3 2021 consolidated sales
(in millions of euros) | Q3 2020 | Q3 2021 | Δ | Organic Δ |
Bureau Veritas | 1,148.3 | 1,245.7 | +8.5% | +7.5% |
Constantia Flexibles | 381.6 | 416.2 | +9.1% | +3.0% |
Stahl | 157.8 | 204.6 | +29.6% | +28.6% |
16.6 | 27.4 | +64.9% | +67.9% | |
Consolidated sales (2) | 1,704.3 | 1,893.8 | +11.1% | +9.0% |
- The PPA effect corresponds to the PPA restatement impact of
$ -0.3M booked in Q3 2020. - Comparable sales for Q3 2020 represent 1,704.3M€ vs. 2020 published sales of 1,885.0M€. The difference of 180.7M€ corresponds to sales of
Cromology , 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”.
Sales of Group companies
Bureau Veritas – Strong organic revenue performance in the third quarter of 2021; 2021
Full Year outlook confirmed
(full consolidation)
Note: Bureau Veritas published its Q3 2021 trading update on
Revenue in the third quarter of 2021 amounted to €1,245.7 million, a 8.5% increase compared with Q3 2020. Organic increase was 7.5%.
Four businesses delivered strong organic growth, Industry +10.4%, Consumer Products +8.7%, Buildings & Infrastructure (B&I) +8.0%, and
By geography, activities in the
The scope effect was a positive 0.2%, reflecting the five bolt-on acquisitions realized since the beginning of 2021.
Currency fluctuations had a positive impact of 0.8%, 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.
At the end of
2021 OUTLOOK CONFIRMED
Based on the excellent year-to-date performance, considering tough comparables in the fourth quarter, and assuming no severe lockdowns in its main countries of operation due to Covid-19, Bureau Veritas still 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: https://group.bureauveritas.com
Constantia Flexibles – Encouraging performance in first nine months’ with reported growth of +2.2%, driven by organic growth of +1.5%, and the acquisition of
(full consolidation)
Sales in the first nine months of 2021 totaled €1,168.3 million, up +1.5% on an organic basis driven by a +3.8% organic growth in the Consumer markets with a good performance in coffee capsules and beverages. The Pharma market was affected by lockdown-induced mild flu and cold season and destocking from customers leading to -5.1% YTD organic decline in sales against a strong comparison in 2020. Encouragingly the recent pharma market order intake has been improving.
These figures are affected by an exceptional base of comparison in 2020 due to the pandemic. For the record, in 2020, Consumer sales were negatively impacted with lower activity levels particularly in
The first nine months of the 2021 benefited from the integration of
As already mentioned in the first half-year results, Constantia Flexibles is facing an unprecedented increase in all raw material prices. This is impacting performance in 2021 as there usually is a temporary delay between changes in raw material prices and adjusting selling prices to customers. Constantia and its renewed management team accelerated their efforts towards profitability measures, including a new cost reduction initiatives program initiated at the beginning of the year. A dedicated taskforce set up in March has focused on price increase negotiations with customers as to limit the impact of raw material cost increases with good effect although there still will be a negative time lag impact for the full year.
On
Good overall progress has been made by the company in implementing its Vision 2025 strategy with a return to organic growth and an acceleration of internal performance improvement measures. With the aforementioned
Stahl – Strong sales rebound confirmed, surpassing 9 months 2019 sales levels
(Fullconsolidation)
Stahl’s sales totaled €624.4 million over the first 9 months of the year, representing an increase of +31.6% vs. €474.6 million sales over the same period in 2020. Organic growth was +33.8% and foreign exchange rate fluctuations had a negative impact of -2.3%.
This good activity in the first nine months of the year exceeded the 2019 sales level over the same period by 2.1%. Leather Chemicals sales were in line with 2019 levels while Performance Coatings reported growth of +8.2% vs 2019, driven by increases in volumes and average prices, thanks to market rebound and market share gains.
After a challenging 2020, Stahl continued its recovery which started in Q3 2020 and which has accelerated since the end of 2020. This recovery has been driven by a strong order book and broad-based volume growth across almost all regions and end markets, in part due to a general restocking effect. Stahl’s order book has declined slightly during Q3 2021, but remains high compared to pre-crisis levels, indicating that the rebound underway since the beginning of the year is, as expected, easing.
The solid performance in sales is, however, unsurprisingly mitigated by an unprecedented increase in raw material prices due to tight supply markets, which is impacting margin. This impact is expecting to continue into 2022.
Stahl’s sustainability efforts have been rewarded in July with a Gold rating from
(full consolidation)
- Increased customer engagement and training activity supported by reduction in travel and gathering restrictions and a heightened stress environment
- Overall new Certified Instructors (CI) and renewal volumes above 2019 levels
- Successful new program launches including specialty topics such as Trauma, Autism, and Advanced Physical Skills
- Continued mix shift toward digital solutions for both new and existing CIs, with programs retaining the required in-person components. Virtual Learner Material sales expanded in share, with year-to-date e-learning delivery representing 34% of total Learner Material volumes, above the 28% and 10% levels in 2020 and 2019.
Of the +68.6% nine-month sales increase versus the same period in 2020, +4.0% was related to a purchase accounting adjustment to deferred revenue (impact of -
CPI’s activity has benefited from the improved ability to gather in person as customers, notably in hospitals and schools, move towards an increasingly normalized work environment. As a result, CPI has leveraged an improved sales force strategy to continue to further penetrating these core US markets as well as expanding into new markets.
The overall heightened level of activity, combined with effective cost management, has led to continued deleveraging over the past few months, maintaining CPI’s leverage level at 6.5x, well below the 10.75x Q3 covenant.
IHS Holding Limited ordinary shares are now traded on the
Following the IPO, Mr.
(no longer fully consolidated as per IFRS 5)
Given the industrial and financial quality of DuluxGroup’s proposal,
The closing of the transaction should take place during the first half of 2022, subject to customary regulatory approvals.
Wendel’s net asset value: €184.5 per share as of
Wendel’s Net Asset Value as of
Net Asset Value was €8,252 million or €184.5 per share as of
Compared to
The discount to NAV was 33.8% as of
Strong financial structure: €1.4 billion liquidity and strong debt profile
- Loan-to-value (LTV) ratio at 10.2% as of
September 30, 2021
- Total liquidity of €1.4 billion as of
September 30, 2021 , including €685 million of cash and €750 million committed credit facility (fully undrawn) - Average debt maturity extended to 5.3 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, in whole of the bond maturing inApril 2023 onJuly 1, 2021 . - Investment grade corporate ratings: Moody’s Baa2 with stable outlook / S&P BBB with stable outlook
Other 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 directly made by
Wendel , and the controlled companies in its portfolio must 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 end of 2023.
These criteria will be evaluated annually by an independent third party and will as the case may be giving rise to adjustments to the margin of the facility.
As part of its 2021-24 investment strategy,
On
Tarkett Participation could contemplate a potential squeeze-out procedure, in accordance with the regulation, but this is not on the table at this time. Tarkett Participation is a company controlled by the Deconinck family, alongside
As a result,
Return to shareholders and dividend
As announced on
Agenda
2021 Investor Day - Meeting to take place in the afternoon
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.
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) | 5,655 | |
Bureau Veritas | 160.8 m | €28.0 | 4,506 | |
63.0 m | 928 | |||
Tarkett | €20.2 | 221 | ||
Unlisted investments (2) | 3,444 | |||
Other assets and liabilities of | 92 | |||
Cash and marketable securities (4) | 685 | |||
Gross asset value | 9,876 | |||
-1,625 | ||||
Net Asset Value | 8,252 | |||
Of which net debt | -939 | |||
Number of shares | 44,719,119 | |||
Net Asset Value per share | €184.5 | |||
Average of 20 most recent | €122.2 | |||
Premium (discount) on NAV | -33.8% |
- Last 20 trading days average as of
September 30, 2021 . ForIHS Towers , stock price is based on the averagebetween October 14 and October 20, 2021 . - Investments in non-publicly traded companies (
Cromology , Stahl, Constantia Flexibles,Crisis Prevention Institute ,Wendel Lab ). As ofSeptember 30, 2021 Cromology is valued in line with the offer received fromDuluxGroup . Aggregates retained for the calculation exclude the impact of IFRS16. - Of which 1,055,361 treasury shares as of
September 30, 2021 - Cash position and financial assets of
Wendel and holdings. As ofSeptember 30, 2021 , this comprises € 0.4 billion of cash and cash equivalents and € 0.3 billion 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 360 of the 2020 Universal Registration Document.
1 Net proceeds after financial debt, dilution to the benefit of the Company’s minority investors, transaction costs and other debt-like adjustments.
2Details of which are available in the prospectus
3 Enterprise value and EBITDA exclude the impact of IFRS 16
4 Net proceeds after financial debt, dilution to the benefit of the Company’s minority investors, transaction costs and other debt-like adjustments
5 See page 332 of the 2020 Universal Registration Document for the NAV methodology.
Attachment
- 2021_10_28_Q3_CP_Wendel_en
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