EuroBusiness Media (EBM): Wendel, one of Europe’s leading listed investment firms, reports results for the first half. Frédéric Lemoine hello, you are the Chairman of the Executive Board of Wendel. The results were up for this first half and the first half also saw you make a number of major announcements and the news flow was very rich. What are you main highlights and takeaways from this first half?
Frédéric Lemoine: It’s been a great, great first half because we went from the US to Africa and to Austria, making four major investment decisions, which is quite a stretch for an organization of our size, because we are very focused on each of them. We started just before Christmas with CSP Technologies in Alabama, which we closed at the end of January. Packaging for the pharmaceutical industry. Then, just before Christmas we announced - in the packaging industry again - the acquisition of Constantia Flexibles in Austria. It’s a much larger company and at a prize value of €2.3 billion. We closed it end of March and immediately after we launched some new programs at Constantia and we notably acquired a company in Africa for them. And precisely in Africa we have developed IHS, our tower co, again further with the new capital increase, a new capital injection of €109 billion from us and this has boosted IHS very high in terms of valuation and in terms of activity. And at the end of the half year we went back to the US to acquire AlliedBarton, a leading security service provider there, which was again a major deal, so quite an active time.
EBM: The group’s portfolio companies had some good operational performance also in the first half. Would you care to comment on some of these companies?
Frédéric Lemoine: Most of them have been growing nicely, which is quite remarkable in the global environment, notably in Europe which has not been so dynamic as a whole and there have been here and there some worries about the continuous growth, be it in China or all the questions around oil prices. Those companies were probably well positioned, their business model is resilient. Bureau Veritas for instance grew by 3.64% organically which is a good achievement, much ahead of the pack in the industry. Saint-Gobain, in spite of the situation in France and Germany which was sluggish, grew 0.5% and improved significantly their profitability and at the same time launched very important strategic moves with the disposal of their Verallia, their glass packaging business, and all their moves to take control of Sika in Switzerland. We also had a great half year at Stahl, where the merger with Clariant Leather Services last year produced this year a lot of synergies, much more than expected. We expected 15 per year and we are much ahead of 20 and it materializes in the numbers with a margin of above 20% for the first time in Stahl’s history. Not all companies performed the same way. We had a bad first half with Mecatherm which is a perfectly small company and we are fixing it actively whereas in Parcours we had another very good year. So it depends on the market, we are very diversified, but overall it’s been a great first half.
EBM: Wendel just completed, this last quarter, all of its 2013-2017 investment objectives, a whole two years ahead of schedule. What are your comments on that?
Frédéric Lemoine: Obviously we are pleased to have succeeded in investing more than €2 billion of equity. But the real satisfaction is to have been able to take control of great companies that are really platforms on which we can build success for years and years for long-term investors and being invested in HIS with the mobile telephony in Africa as an underlying trend, Constantia with the flexible packaging revolution in the food and pharmaceutical industry and AlliedBarton with all the trend towards more security services in the US, really there we have companies with a lot of potential, fragmented markets where there are targets to compliment the offering of those companies. So really this is a great satisfaction. Beyond our investment objective we have also completed all our 2013-17 financial objectives, which is a good achievement.
EBM: You recently announced that you plan to open an office in London. What should we read into that?
Frédéric Lemoine: Actually, we are reopening an office in London. We used to have one, we closed it during the financial crisis, but London is a must. We have to be there. It’s really a hub for the investment industry, not only for the UK market but for the European market as a whole, for the financing, for the sourcing of deals, for partnering with family offices or investment firms that are located there. So it’s a little bit an extension of our Paris office and clearly it’s in the continuity of our internationalization which led us to open an office in New York City, in Singapore, in Casablanca, but we are not going to cover the whole planet with offices, but clearly London was something that we had to do.
EBM: And finally, with the reevaluation again of your net asset value, you must be quite satisfied this semester?
Frédéric Lemoine: Yes, of course, we grew by 13% our net asset value. It could be higher. Maybe I could seem to be demanding, but I see the value that we are about to create in all these companies, it’s not in our NAV yet so it’s our job now to focus on the operational development of our company and to try to bring more value and to materialize it. So that’s what all our teams are dedicated to doing.
EBM: Frédéric Lemoine, Chairman of the Executive Board of Wendel, thank you very much.
Frédéric Lemoine: Thank you.
