EuroBusiness Media (EBM): Wendel, one of Europe’s leading listed investment firms, reports results for 2015. Frédéric Lemoine welcome. You are the Chairman of the Executive Board of Wendel. To begin, could you give us your comments on these 2015 results?
Frédéric Lemoine: Well, 2015 for Wendel has been quite a good year. We invested in three new companies that have joined our Group: Constantia Flexibles in Austria, CSP technologies and AlliedBarton security services in the US; they are three non-listed companies in very different sectors. And at the same time we sold close to €1 billion of Bureau Veritas shares, reducing our stake from 52% to 40% of Bureau Véritas, but still controlling this excellent company we like very much. But we have rebalanced our portfolio to watch more non-listed asset as planned, we have diversified our portfolio. The existing companies have had a very good year, increasing their contribution to our results by 13%. All in all, our net asset value has grown by 10,7% during the year, our net result from business sectors has grown by 24%. It’s true that our net result is less favorable, €25 million for the total Group, and Group share €-146 million, but this is without taking into account the very large capital gain we made on the disposal of Bureau Veritas shares for €727 million. So obviously for technical reasons this is not within the net result but €-140 vs. €+727 million of capital gain, it's quite a good year.
EBM: Are you satisfied with the operational performance of the Group's portfolio companies, given the challenging environment this year?
Frédéric Lemoine: Yes, most of our companies have done extremely well. You’re right, they were many turbulences during the year: exchange rates, oil prices, lower interest rates, all of this was quite complex to manage and we like the companies to be agile and adapt to the environment. They have all grown quite fast, organically, by acquisition, it’s true that foreign exchange effects helped in some cases. Only some minor ones had less favorable problems; we are turning the situation around at Mecatherm, exceet or Nippon Oil Pump. So yes we are quite satisfied. IHS should be mention particularly because they made a tremendous year, another tremendous year in the telecom tower arena in Africa.
EBM: Now the news flow was very rich all throughout 2015 and this continued in the first months of 2016. Notably you announced in February the sale of Parcours. Could you comment on that?
Frédéric Lemoine: Yes, Parcours is a great example of success in our investments. We invested quite recently, in 2011, and only 5 years later we received a proposal from Société Générale to buy Parcours at a very good price - €240 millions in cash for Wendel. We invested a little bit more than €100 million, an 18% IRR per annum. including [the fact that] in 2015 we grew the Parcours businesses by 9,5%, we opened new local agencies, so Parcours has been developed up to the point where a large bank, which now considers the car leasing activity as core in their development, proposed a price that they would never have proposed 5 years ago. So we are very happy to have grown Parcours by 150% in the meantime and to be able to materialize this capital gain.
EBM: You announced six months ago already that you had reached your 2013-2017 investment objectives. Do you have new investment objectives now?
Frédéric Lemoine: Well we set the course, the direction, we want to pursue in the same direction. It's true that with AlliedBarton we have reached the €2 billion objective that we had set for 2013-2017 well in advance. It doesn’t mean that we stop there. So we continue in Europe, in Africa, in North America to see many investment opportunities, maybe we have the financial means to seize them; we have gained our investment-grade status in July 2014 and we stick to it, and we will continue to look at many opportunities. I think for a long-term investor there can't be a stop-and-go policy.
EBM: How satisfied are you with the level of your net asset value?
Frédéric Lemoine: The level of net asset value at €128,2 per share mi-march 2016, the latest numbers that we published recently, is obviously linked to the level of the stock market, I will not comment the level of stock market it’s obviously very volatile, and we still have a discount on the net asset value, but what is really important is the potential of our companies and the hidden value in Wendel. We have new promising companies; we have also a methodology which is conservative on our net asset value. To give you a example, in Constantia Flexibles, IHS and Stahl, the valuation is still linked with the acquisition price, or for Stahl linked to bids that we received to acquire Stahl that we have not accepted. Our methodology takes that into account. By nature these are conservative figures that we will be kept for 12 months. When the 12-month period ends, it will free some increase in our NAV. So that may be technical, but that's quite significant in the months to come. Then you have the operational performance of the companies, they have all been growing, all our major assets have been growing, have started the year in a good situation, so we hope that it will materialize in the net asset value. So I believe that there is a much value to come in Wendel, thanks to the performance of our companies.
EBM: And finally, could you comment on your dividend payout?
Frédéric Lemoine: Well we have a very clear policy, we have increase the dividend year after year, that has been the case since 2009. This year again we are proposing at our General Meeting of shareholders to increase the dividend by 7,5% to €2,15 per share. That’s a record-high level, but we will continue later on, it’s a fair return to our shareholders.
EBM: Frédéric Lemoine, Chairman of the Executive Board of Wendel, thank you very much.
Frédéric Lemoine: Thank you for having me.
