WENDEL: Q1 2022 Trading update - Good start of the year across
portfolio
Q1 2022 Trading update Good start of the year
across portfolio
Q1 2022 consolidated net sales: €2,007.2
million, up 14.9% overall and up 9.9% organically
year-on-year
· Strong growth
across portfolio in Q1 2022
· Double digit
organic growth for ACAMS, CPI, Constantia Flexibles and
Tarkett
· Strong organic
growth for Bureau Veritas (+8.0%) and Stahl (+5.0%)
· Positive FX
impacts across the portfolio (+2.9% consolidated)
Net asset value as of March 31, 2022: €7,420
million or €165.8 per share, down 1% vs. March 31, 2021 (€167.4 per
share) and down 11.9% YTD (€188.1), impacted by market fall
Active portfolio rotation and capital
deployment since the start of 2022
- Disposal of Cromology closed on January 21, 2022, generating
€896 million in proceeds for Wendel
- c.€3041 million equity invested to acquire ACAMS on March 10,
2022
- Wendel Lab: €30.5 million new commitments in Q1 2022 bringing
the total to €145 million
- €15 million of Wendel shares bought back in Q1 2022
Strong financial structure
- Successful issue of €300 million 12-year bond at 1.375% coupon
on January 16, 2022
- LTV ratio of 5.8% as of March 31, 2022
- Further optimization of the cost and maturity of Wendel’s debt:
exercise on April 19, 2022, of the make-whole redemption of bonds
maturing in October 2024, resulting in an average maturity extended
to 7.12 years and an average weighted cost lowered to
1.7%
- Pro forma total liquidity of €1.7 billion3 as of March 31,
2022, including €960 million of cash and €750 million available
under the committed credit facility (fully undrawn)
Return to shareholders and 2021
Dividend
- Wendel to cancel 377,323 of its treasury shares (0.84% of the
share capital) on April 29, 2022. Cancellation of these shares will
have a pro forma positive impact of +€0.7/share on the March 31,
2022’s NAV due to the current significant share discount to NAV.
Following the cancellation, the number of outstanding shares will
be 44,370,620.
· Ordinary
dividend of €3.0 per share for 2021, up 3.4%, to be proposed at the
Annual Shareholders’ Meeting on June 16, 2022, representing a yield
of 2.85%4 .
André François-Poncet, Wendel Group CEO, commented:
“The first quarter of 2022 confirmed the overall organic trends
observed at the end of last year in sales across our portfolio.
This strong growth comes with challenging conditions regarding raw
materials availability and price, but our companies have clearly
shown their ability to adapt to fast changing environments. Our net
asset value has been quite resilient, despite the first quarter
stock market turmoil, and we opportunistically took advantage of
the sizeable discount to NAV to buy back some Wendel shares. We
have continued our objective of capital redeployment in line with
our roadmap with the acquisition of ACAMS which further enhances
the growth profile of our portfolio, following the acquisition of
CPI. This transaction was creative, illustrating our team’s ability
to carry out complex projects as the buyer of choice. As we look
forward, our robust balance sheet with relatively little corporate
and portfolio company leverage overall and our long-term
perspective should allow us to continue to execute our roadmap
capitalizing on acquisition opportunities which will likely result
from current volatile circumstances.” |
Q1 2022 sales of Group companies
Q1 2022 consolidated sales
(in
millions of euros) |
Q1
2021 |
Q1
2022 |
Δ |
Organic Δ |
Bureau Veritas |
1,154.7 |
1,290.1 |
+11.7% |
+8.0% |
Constantia Flexibles |
366.7 |
464.2 |
+26.6% |
+17.8% |
Stahl |
210.1 |
224.9 |
+7.0% |
+5.0% |
Crisis Prevention Institute |
15.3 |
20.8 |
+35.8% |
+27.2% |
ACAMS(1) |
n.a |
7.2 |
n.a |
n.a |
Consolidated net sales(2) |
1,746.9 |
2,007.2 |
+14.9% |
+9.9% |
- ACAMS accounts have been consolidated since March 11,
2022.
- Comparable sales for Q1 2021 represent €1,746.9m vs. 2021
published sales of €1,912.8m. The difference of c. €166.0m
corresponds to Cromology group, 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” since November 2021.
Cromology was sold by the Group beginning of 2022.
Q1 2022 sales of equity accounted
companies
(in millions of euros) |
Q1
2021 |
Q1
2022 |
Δ |
Organic Δ |
Tarkett |
558.8 |
684.7 |
+22.5% |
+19.2% |
Sales of Group companies
Bureau Veritas – Strong organic revenue growth
in the first quarter of 2022; Solid 2022 outlook confirmed
(full consolidation)
Bureau Veritas’ revenue in the first quarter of
2022 amounted to €1,290.1 million, a 11.7% increase compared with
Q1 2021. Organic growth was 8.0%, compared to a 2.5% increase in
the last quarter of 2021 and benefited from a catch-up effect
following the cyber-attack which occurred in Q4 2021.
Three businesses delivered strong organic
growth, Industry 11.9%, Agri-Food & Commodities 9.5%, and
Buildings & Infrastructure 7.1%. The rest of the portfolio saw
mid-single-digit growth, with Marine & Offshore, up 6.5%
organically, Consumer Products up 4.6% and Certification up
4.0%.
By geography, activities in Americas strongly
outperformed the rest of Bureau Veritas (26% of revenue; up 17.1%
organically), led by a 10.0% increase in North America (Buildings
& Infrastructure driven) and by a 29.7% increase in Latin
America (led by Brazil notably). The activity in Asia Pacific (29%
of revenue; up 4.5% organically) benefited from robust growth in
China and in Australia as well as strong growth in India. Europe
(36% of revenue; up 3.9% organically) was led by robust performance
in France, strong growth in Italy and the Netherlands. Finally, in
Africa and the Middle East (9% of revenue), business increased by
13.9% on an organic basis, essentially driven by Buildings &
Infrastructure and energy projects in the Middle East.
The scope effect was a positive 0.5%, reflecting
bolt-on acquisitions realized in the past few quarters. Currency
fluctuations had a positive impact of 3.2%, 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.
2022 outlook confirmed:
Based on a healthy sales pipeline and the
significant growth opportunities related to Sustainability, and
assuming there are no severe lockdowns in its main countries of
operation due to Covid-19, for the full year 2022, Bureau Veritas
still expects to:
- Achieve strong organic revenue growth; mid-single-digit organic
revenue growth;
- Improve the adjusted operating margin;
- Generate sustained strong cash flow with a cash conversion5
above 90%.
For more information:
https://group.bureauveritas.com
Constantia Flexibles –Record organic growth
of 17.8% mostly driven by price increases, to compensate input cost
inflation, as well as robust volume growth
(full consolidation)
Q1 2022 sales totaled €464.2 million, up 26.6%
compared with Q1 2021 (€366.7 million). Constantia’s sales were up
by 17.8% organically over the period, driven mostly by waves of
price increases to compensate for the inflationary pressure input
costs, notably raw materials and energy. It is worth noting that Q1
2022 has marked an encouraging return to organic volume growth,
confirming the good momentum instilled by the new management team’s
commercial initiatives. However, the market in India remains very
challenging and management is reviewing several options for this
division in order to address the challenges there.
Consumer market revenues grew organically by 20.0%
driven by price increases and volume growth, notably in snacks and
baked goods. The Pharma division posted +11.5% organic growth
driven mainly by prices. Q1 2022 is not completely comparable with
Q1 2021, benefiting from the acquisition of Propak in June 2021
(impact of +6.8%). The quarter is also positively impacted by
favorable FX (+2.0%).
Constantia is carefully managing the
inflationary cost environment as well as the availability of raw
materials, particularly aluminum, focusing its efforts on
preserving the profitability of the company working both on the
passthrough of input costs as well as pursuing its cost control
program.
On the sustainability front, Constantia is
actively developing and promoting its Ecolutions portfolio in line
with the industry transformation towards recyclable packaging. With
the above-mentioned Propak acquisition, Constantia has resumed
acquisitions in the fragmented and consolidating flexible packaging
market and is actively reviewing a number of bolt-on
opportunities.
Stahl – Sales up 7.0 % in Q1 2022, with
organic growth of 5.0%
(full consolidation)
Stahl, the world leader in coating layers and
surface treatments for flexible materials, posted total sales of
€224.9 million in Q1 2022, representing an increase of +7.0% versus
Q1 2021. Organic growth stood at +5.0% over the quarter while FX
was positive (+2.0%).
Activity over the first quarter of the year was
above expectations at group level, with a strong performance in
Performance Coatings offsetting lower than expected volumes in
Leather Chemicals. Across all segments, price increases were
implemented at the beginning of the year to mitigate the strong
impact of rising input costs. Management continues to closely
monitor the inflationary environment and is ready to take
additional measures to protect its margin where needed.
Orderbook increased in Q1 2022, and is close to
the all-time high, as new intakes remained solid in volumes and
benefited from price increases measures. This gives good visibility
on the topline performance in Q2 2022.
Crisis Prevention Institute – Revenue growth
of +26.4% as compared with Q1 2021, a result of ongoing demand for
new Certified Instructors and successful new programs
(full consolidation)
Crisis Prevention Institute recorded first
quarter 2022 revenue of $23.4 million, up +26.4% vs. Q1 2021. Of
this increase, +27.2% was organic growth, offset by -0.8% impact
from FX movements. Despite the Omicron COVID surge in early 2022,
CPI continued to see volume growth in new Certified Instructors
(CIs) and uptake of new program launches, like Special Topics.
Growth was tempered by COVID-related delays of onsite programs
(which were rescheduled into Q2 2022), but compared to Q1 2021, the
number of affected programs were less, as the previous year’s Q1
experienced more widespread COVID restrictions.
CPI continues to enjoy a mix shift toward
digital solutions for both new CIs and renewals, with programs
retaining the required in-person components. Virtual Learner
Materials continued to expand in the share of delivery representing
45% of Learner Materials sales and 34% of total Learner Material
volumes, above the 30% and 11% volume levels in 2020 and
2019.
ACAMS – Strong start to the year for ACAMS,
with year-to-date revenue growth of +31.2%
(full consolidation since March 11, 2022)
ACAMS, the global leader in training and
certifications for anti-money laundering and financial-crime
prevention professionals, generated total revenue of $24.8 million,
up 31.2% vs. Q1 2021. Certifications, Memberships, and Training
sales each grew at double-digit rates vs. Q1 2021. Conferences
generated the highest growth of any segment as a result of both a
return to in-person events with growing attendance and also a
timing benefit as ACAMS’ second-largest conference took place in Q1
2022, while the previous year’s event was held in Q2 2021. Organic
growth for the quarter ending in March was 31.0%, and the impact of
foreign exchange was 0.2%.
Wendel completed the acquisition of ACAMS on
March 10, 2022.
Tarkett – Solid performance driven by
sustained activity and the acceleration in selling price
increases
(Mise en équivalence depuis le 07/07/2021)
Net revenue was €685 million, up by
+22.5% compared to the first quarter of 2021. Organic growth
reached +19.2% including selling price increases in the CIS
countries implemented to offset the inflation in purchasing costs
and the devaluation of the rouble6. The total effect of the selling
price increases implemented across all segments is +12.9% on
average compared to the first quarter of 2021.
The EMEA segment achieved revenue of €238
million, an increase of +8.1% compared to the first quarter of 2021
due to the acceleration of selling price increases.
The North America segment reported
revenue of €204 million, an increase of +27.3% compared to the
first quarter of 2021, reflecting solid like-for-like growth of
+18.1% and a positive exchange rate effect.
Revenue in the CIS, APAC and Latin America
segment was €134 million, an increase of +18.7% compared to the
first quarter in 2021 despite a negative foreign exchange effect
linked to the rouble, partially offset by the appreciation of the
Brazilian real.
In Russia, Tarkett has been producing flooring
for the Residential market for over 20 years. Aware of its
responsibility as an employer, particularly to its 1,550 local
employees, the company continues to operate in the country in full
compliance with local and international regulations. However,
Tarkett has frozen all significant new investments in Russia.
Anticipating a fall in demand and increase in supply restrictions,
the company expects a marked slowdown in the second quarter,
although it is currently impossible to quantify.
As expected, business grew strongly in the
Sports segment. Revenue was €109 million, up by
+66.0% and including +55.7% organic growth compared to the first
quarter of 2021. North America is the strongest geographical region
thanks to sustained demand and success of the Tarkett range.
Backlog remains at a particularly high level.
Actions to reduce the cost structure are well
underway and Tarkett is forecasting around €30 million of annual
structural savings in 2022.
The significant increase in oil and energy
prices will contribute to the increase in purchasing costs now
valued at €250 million compared to 2021 (against an estimated €220
million at the beginning of the year).
Tarkett continues to implement selling price
increases across all its geographies to offset the effect of
increased purchasing costs over the year. At the current level of
purchasing prices, the company is targeting a neutral inflation
balance over the year (selling price effect compared to 2021 minus
purchasing price effect).
For more information:
https://www.tarkett-group.com/en/investors/
IHS Towers – IHS Towers will report its Q1
2022 consolidated sales in May.
Wendel’s net asset value: €165.8 per share as
of March 31, 2022
NAV as of March 31, 2022, was prepared by Wendel
in compliance with its methodology7.
Net Asset Value was €7,420 million or €165.8
per share as of March 31, 2022 (see detail in Appendix 1
below), vs. €167.4 on March 31, 2021, representing a decrease
of 1.0%. Since December 31, 2021, Net Asset Value is down 11.9%,
following markets fall over the period.
The discount to NAV was 46.4% as of March 31,
2022.
Wendel further improves its debt profile and
structure
Gross debt as of the end of March 31, 2022,
stood at €1,950 million, with, net cash position of €1,498 million
resulting in a net debt of €452 million. LTV ratio was 5.8%.
On January 16, 2022, Wendel successfully issued
a €300 million 12-year bonds at 1.375% coupon.
On April 19, 2022, Wendel achieved the exercise
of the make-whole redemption of its bonds maturing in October 2024
with outstanding principal of €500 million and bearing interest at
2.750% at a price determined in accordance with the terms and
conditions of the bonds. This initiative further optimized the cost
and the maturity of Wendel’s debt. Wendel average maturity was
extended to 7.1 years8 and its average weighted cost of debt
lowered to 1.7%.
As of March 31, 2022, Wendel’s total liquidity
was €1.7 billion9, including €960 million of cash and a €750
million committed credit facility (fully undrawn).
2022 other significant events:
Wendel acquires ACAMS, the world’s largest
membership organization dedicated to fighting financial
crime
Announced on January 24, 2022, Wendel has
completed the acquisition of the Association of Certified
Anti-Money Laundering Specialists (“ACAMS” or the “Company”) from
Adtalem Global Education (NYSE: ATGE) on March 10, 2022. Wendel
invested c.$338 million of equity for a c. 98% interest
in the Company, alongside ACAMS’ management and a minority
investor.
ACAMS is the global leader in training and
certifications for anti-money laundering (“AML”) and financial
crime prevention professionals. ACAMS has a large, global
membership base with more than 90,000 members in 175 jurisdictions,
including over 50,000 professionals who have obtained their CAMS
certification-an industry-recognized AML qualification- that
promotes ongoing education through participation in conferences,
webinars, and other training opportunities.
The Company has approximately 275 employees
primarily located in the U.S., London and Hong Kong that serve its
global customers.
Sale of Cromology completed
After obtaining the necessary authorizations,
Wendel announced on January 21, 2022, the completion of the sale of
Cromology to DuluxGroup, a subsidiary of Nippon Paint Holdings Co.,
Ltd. For Wendel, the transaction generated net proceeds of €896
million or €358 million above Cromology’s valuation in Wendel’s net
asset value published before the transaction announcement, i.e., as
of June 30, 2021.
This transaction is a milestone in Wendel’s
2021-24 roadmap, and its target to accelerate the redeployment of
its capital toward growth companies.
Return to shareholders and Dividend
An ordinary dividend of €3.0 per share for
2021, up 3.4%, will be proposed at the Annual Shareholders’ Meeting
on June 16, 2022, representing a yield of 2.85%10. Ex-date will be
on June 20, 2022, and payment date will be on June 22,
2022.
€15 million of Wendel shares were repurchased in
Q1 2022. Wendel will cancel 377,323 of its treasury shares (0.84%
of the share capital) on April 29, 2022. The cancellation of these
shares will have a pro forma positive impact of +€0.7/share on the
March 31, 2022’s NAV due to the current significant share discount
to NAV. Following the cancellation, the number of outstanding
shares will be 44,370,620.
Agenda
06/16/2022
Shareholders’ Meeting
07/29/2022
H1 2022 results – Publication of NAV as
of June 30, 2022 (pre-market release)
08/03/2022
Publication of consolidated first-half
financials (pre-market release)
10/28/2022
Q3 2022 trading update – Publication of
NAV as of September 30, 2022 (pre-market release)
12/01/2022
Investor Day 2022
About WendelWendel is one of Europe’s
leading listed investment firms. The Group invests in Europe
and North America in companies which are
leaders in their field, such as Bureau Veritas, ACAMS,
Constantia Flexibles, Crisis Prevention Institute, IHS Towers,
Stahl and Tarkett. Wendel often plays an active role as a
controlling or significant shareholder in its portfolio
companies. Wendel seeks to implement long-term
development strategies, which involve boosting growth and margins
of companies so as to enhance their leading market
positions.
Wendel is listed on Eurolist by Euronext
Paris.
Standard & Poor’s ratings: Long-term: BBB,
stable outlook – Short-term: A-2 since January 25, 2019
Moody’s ratings: Long-term: Baa2, stable outlook
– Short-term: P-2 since September 5, 2018
Wendel is the Founding Sponsor of Centre
Pompidou-Metz. In recognition of its long-term patronage of the
arts, Wendel received the distinction of “Grand Mécène de la
Culture” in 2012.
For more information: wendelgroup.com
Follow us on Twitter @WendelGroup
Appendix 1: NAV as of March 31, 2022: €165.8
per share
(in millions of euros) |
|
|
03/31/2022 |
12/31/2021 |
Listed equity investments |
Number of shares |
Share price (1) |
4,864 |
5,559 |
Bureau Veritas |
160.8/160.8 m |
€25.9/€28.7 |
4,162 |
4,616 |
IHS |
63.0/63.0m |
$10.4/$13.5 |
592 |
748 |
Tarkett |
|
€13.2/€18.6 |
110 |
195 |
Investment in unlisted assets (2) |
2,901 |
3,732 |
Other assets and liabilities of Wendel and holding
companies(3) |
|
108 |
97 |
Net cash position & financial assets (4) |
|
|
1,498 |
650 |
Gross asset value |
|
|
9,370 |
10,038 |
Wendel bond debt |
|
|
-1,950 |
-1,619 |
Net Asset Value |
|
|
7,420 |
8,419 |
Of which net debt |
|
|
-453 |
-969 |
Number of shares |
|
|
44,747,943 |
44,747,943 |
Net Asset Value per share |
|
|
€165.8 |
€188.1 |
Wendel’s 20 days share price average |
|
€88.9 |
€102.3 |
Premium (discount) on NAV |
|
|
-46.4% |
-45.6% |
- Last 20 trading days average as of December 31, 2021, and March
31, 2022
- Investments in non-publicly traded companies (Cromology (as of
December 31, 2021), Stahl, Constantia Flexibles, Crisis Prevention
Institute, ACAMS (as of March 31, 2022), Wendel Lab). Aggregates
retained for the calculation exclude the impact of IFRS 16. ACAMS
investment being valued for the first time in the Net Asset Value,
calculation is weighted at 100% on acquisition multiple and 0% on
listed peer-group multiples, as per methodology.
- Of which 1,116,456 treasury shares as of December 31, 2021, and
1,278,422 treasury shares as of March 31, 2022
- Cash position and financial assets of Wendel & holdings. As
of March 31, 2022, this comprises €1.2 bn of cash and cash
equivalents and €0.3 bn 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 374 of
the 2021 Universal Registration Document.
1 c. $338 million at 1.112 EURUSD
2 As of March 31, 2022
3 Proforma the early repayment in whole of the
bond maturing in October 2024, achieved on April 19, 2022
4 Based on Wendel’s share price of €105.4 as of
December 31, 2021
5 Net cash generated from operating
activities/Adjusted Operating Profit
6 Price adjustments in the CIS are historically
implemented to offset currency fluctuations and therefore excluded
from organic growth. Excluding those price adjustments, organic
growth reached +15.2% (please refer to the company’s press
release).
7 See page 332 of the 2021 Universal
Registration Document for the NAV methodology.
8 As of March 31, 2022
9 Proforma the early repayment in whole of the
bond maturing in October 2024, achieved on April 19, 2022
10 Based on Wendel’s share price of €105.4 as of
December 31, 2021
Wendel (EU:MF)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Wendel (EU:MF)
Historical Stock Chart
Von Mai 2023 bis Mai 2024