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Investment strategy

Strategic directions

On March 16, 2023, Wendel’s Executive Board presented its new strategic directions.

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Implementation of an active portfolio management and investment policy with an intention to invest c.€2 billion of equity within two years, while optimizing Wendel’s financial flexibility

  • The unit amount of equity investments is expected to be between €300 million and €800 million, in Western Europe and North America;
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Reinforcement of our role as an active shareholder to create value in the portfolio

  • Investment in unlisted companies with priority given to majority stakes;
  •  Active involvement with the Bureau Veritas Management team to accelerate value creation;
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Ambition to develop an asset management business for third parties

  • leveraging the capabilities of Wendel’s investment platform and investing in new talent;
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New financial policy featuring

  • a dividend set at around 2% of Net Asset Value, on average, while having a minimum objective of annual stability; and
  • the optimization of Wendel’s financing capacity, while preserving an LTV ratio compatible with an Investment Grade financial rating.
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A target of double-digit average total shareholder return.

Wendel will seek to be an influential shareholder holding Board and key Committee seats, alongside like-minded partners.

Investment profile

Wendel seeks market leading businesses or growing sectors with long-term growth prospects and pricing power. Wendel generally avoids highly cyclical or capital-intensive assets and looks for companies with demonstrated resilience through economic cycles.

Attractive sectors meeting those criteria include technology services and software, business services, healthcare and industrial technology. Nevertheless, Wendel remains opportunistic and could position itself in other sectors that meet its criteria.

The Wendel Group has an investment model chiefly focused on companies with as many of the following characteristics as possible:

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companies that are in line Wendel’s ESG values and ethics and led by high-quality, experienced management teams with which Wendel shares a common vision;

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companies that are related to one or more major, long-term economic trends, enabling Wendel to plan to hold the investment over the long term;

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companies that are located in countries that are well known to Wendel: in Western Europe, particularly in France, and North America (United States and Canada), with strong international exposure or an international growth strategy;

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companies that ideally represent an initial investment generally between €300 million and €800 million. Smaller equity investments are also considered through Wendel Growth;

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companies that are among the leaders in their markets, operating in sectors with high barriers to entry, with sound fundamentals and, in particular, recurring and predictable cash flows;

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companies that offer high potential for long-term profitable growth, based on both organic growth and accretive acquisitions.

Wendel Growth

 

 

With Wendel Growth, Wendel aims to increase its exposure to the high-growth company sector. In the medium term, Wendel Growth’s exposure should represent €500 million.

Initiated in 2013, Wendel Growth has, to date, mainly made commitments to several high-quality technology and growth investment funds. Priority is now given to direct investments, while in parallel, Wendel Growth will continue to invest in funds.

Wendel Growth has multiple objectives. It diversifies the portfolio by increasing exposure to high-growth assets, generally with a digital component or with disruptive business models. Wendel Growth also develops the expertise of its team and that of its portfolio companies on technological innovations that could impact or enhance their value creation profiles.

Supporting

Success is teamwork

Wendel’s support is built around a relationship of trust whose ambition is to create sustainable leaders. The top management of our operating subsidiaries know that they can always count on Wendel’s advice and support in their projects.

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ESG COMMITMENTS

Building sustainable companies

Wendel has made important commitments to ensure that its internal operations are conducted according to its values and the ESG goals defined within the portfolio companies.

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David Darmon
Member of the Executive Board, Group Deputy CEO
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Investment phase

All investment opportunities are systematically assessed through a newly defined exclusion list and a business model resilience test. The ESG maturity of the companies is then assessed as part of an in-depth Sustainability due diligence.

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Holding phase

An ESG transformation roadmap is defined for each portfolio company, based on ESG due diligence carried out in advance. This roadmap systematically includes items related to operational eco-efficiency with a strong focus on climate change issues as well as the ESG innovation of products and services. Investment teams at Wendel and portfolio companies’ management teams are also held accountable for progress against this roadmap with an alignment of variable remuneration with performance.

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Exit phase

The transformation achieved within the company will be highlighted and showcased through an exit memo and presented to the Supervisory Board. When circumstances allow it, Wendel ensures wherever possible, that it associates the teams of the divested company with the value created.

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