André François-Poncet, Group CEO.
You have been in your position now for over a year. How do you view 2018?
AFP. 2018 was a very active year for Wendel. We worked hard to simplify our business model. Our strategy is to construct a portfolio of sizeable, leading companies which we can support over the long-term, backing talented executives whom we consider as partners and who are also equity-holders. This has led us to first sell small shareholdings at good prices. Streamlining our portfolio has allowed us to focus our team and our capital on our largest investments, i.e., to play our role of active shareholder. For example, we supported the very large acquisition of USSA by Allied Universal which allowed the company to consolidate its leading position in security services in North America. We invested additional equity in Allied Universal to fund this transaction. We also rebalanced Wendel’s exposure to listed shares last year through the sale of 4.73% of Bureau Veritas while remaining the company’s long-term and controlling shareholder. Lastly, Wendel’s Investment Committee has been renewed and we strengthened our corporate functions.
What is the common thread to these actions?
AFP. The common thread is the pursuit of performance and excellence. We work on this every day with particular emphasis on governance and on monitoring performance. Our companies must constantly differentiate themselves from competitors, innovate, strengthen customer loyalty, control or lower costs and build their positions through acquisitions. Their focus on sustainable development, the engagement of their combined staff of over 350,000, integrity, compliance and environmental preservation are becoming clear competitive advantages. Such is the case, for example, for Stahl which promotes sustainability as one of its key growth drivers with great success. Wendel’s operating partners and the Boards of our companies - which include talented individuals outside Wendel - help management teams achieve their goals.
The Group has a significant amount of available cash. What types of investments do you foresee?
AFP. After raising over €1.5 billion(1) from disposals, Wendel now has a concentrated portfolio, a solid balance sheet and the benefit of time. In an uncertain macroeconomic environment, our firepower puts us in an excellent position to take advantage of the best acquisition opportunities, i.e., where we believe we can create sustainable long-term value for shareholders.
(1) Including 2018 disposals: CSP Technologies, Saham Group, Mecatherm and Nippon Oil Pump and 4.73% of the capital of Bureau Veritas for a total of almost €1 billion, along with €480 million in 2019 currently expected from the disposals of PlaYce, Saint-Gobain shares and the partial disposal of Allied Universal.
Credit: Henrike Stahl