Wendel : Sales and NAV rose over the first nine months of the year - 656.04 KB - PDF

P R E S S R E L E A S E , D E C E M B E R 1 , 2 0 1 6

Sales and NAV rose over the first nine months of the year

• Agreement signed with a view to acquiring Tsebo, the leading pan-African facilities services provider.

• Successful transactions to reduce gross debt, extend maturities and reduce average cost of debt.

• 2.8 million shares of Bureau Veritas purchased in the last month at an average price of €17.05 per share.

• Agreement reached with a view to refinancing Stahl, so as to enable it to pay a dividend of €320 million to its shareholders, including €235 million to Wendel.

"2016 has been a year of integration and continued transformation for the companies in Wendel's portfolio. Specifically, we have stepped up our diversification efforts with new investments in two excellent African companies, SGI Africa and Tsebo. We have also supported our companies in their acquisition transactions and their integration into the portfolio. Among the most noteworthy transactions was our follow-on investment in IHS to support its growth, which has included the first consolidation transaction in the telecom towers sector in Africa. We also supported AlliedBarton in its transformative merger with Universal to create the US leader in security services, which has already made three additional acquisitions since the merger. Finally, we supported our companies, such as Bureau Veritas, Stahl, Constantia Flexibles and CSP Technologies, in their value-creating acquisitions."

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1. From April 1, 2015.

2. Organic growth over 9 months.

3. Excludes Parcours group, presented in "Net income from discontinued operations and operations held for sale" in 2015 and 2016, in accordance with IFRS 5.

4. From February 2015.

5. Excluding organic growth of Constantia Flexibles in Q1 and CSP Technologies in January.

1. Following the agreement with Apollo, the Packaging business is presented under "Net income from discontinued operations and operations held for sale" for 2015, in accordance with IFRS 5.

2. In accordance with IFRS 5, AlliedBarton's activities in the first seven months of the year, until the merger with Universal Services of America, are presented in the income statement under "Net income from operations to be accounted for by the equity method".) The new company, Allied Universal, has been recognized using the equity method, since August 2016. The information presented consists of estimates.

3. In accordance with IFRS 5, the results of the IDMS division for 2015 and 2016 have been included in "Net income from discontinued operations and operations held for sale" in exceet's financial statements, following the sale of this division.

4. Company accounted for by the equity method since August 2016.

(1) Excludes Parcours group, presented in "Net income from discontinued operations and operations held for sale" for 2015 and 2016, in accordance with IFRS 5.

1. Following the agreement with Apollo, the Packaging business is presented under "Net income from discontinued operations and operations held for sale" for 2015, in accordance with IFRS 5.

2. In accordance with IFRS 5, AlliedBarton's activities in the first seven months of the year, until the merger with Universal Services of America, are presented in the income statement under "Net income from operations to be accounted for by the equity method".) The new company, Allied Universal, has been recognized using the equity method, since August 2016. The information presented consists of estimates.

3. In accordance with IFRS 5, the results of the IDMS division for 2015 and 2016 have been included in "Net income from discontinued operations and operations held for sale" in exceet's financial statements, following the sale of this division.

4. Company accounted for by the equity method since August 2016.

(Full consolidation)

Revenue for the nine months ended September 30, 2016 totaled €3,357.7 million, a 1.0% increase versus the same prior-year period at constant currencies. Third-quarter 2016 revenue came out at €1,136.4 million, up 1.7% compared to the same period one year ago at constant currencies.

Organic growth came in at a negative 0.8% for the first nine months of 2016, including a contraction of 1.0% in the third quarter. The slowdown versus the first six months of the year primarily reflects an earlier-than-expected deterioration in the Marine division, due to the Offshore business, a fresh construction slowdown in Asia and particularly challenging comparatives. On a positive note, several businesses are showing strong resilience, notably the less cyclical part of Bureau Veritas' portfolio, including Consumer Products, Certification, IVS and the Commodities business, which is recovering led by Agri-Food and a Metals & Minerals activity back in positive territory.

In the first nine months of 2016, the activities falling under the eight Growth Initiatives represented incremental revenues of €71 million and contributed 2.1 points to group organic growth, broadly in line with the momentum of the first six months of the year despite the drag from Marine (€-9.4m in Q3). The other activities made a negative 2.9 points contribution to group organic growth, including a negative 1.6 points impact from Oil & Gas capex-related activities. The latter activities, which represent 6% of group revenue, declined by 21% in the first nine months of 2016.

Changes in the scope of consolidation contributed 1.8% to growth in the first nine months of 2016 and 2.7% in the third quarter.

In October 2016, Bureau Veritas signed its third Chinese acquisition of the year, Shanghai Project Management, a company specialized in mandatory construction project supervision for infrastructure and non-residential high rise buildings with leading position in China, in particular in the Shanghai area. Its revenue in 2015 was around €50 million. This acquisition fits perfectly the 2020 strategic ambitions to expand the group's presence in China, and reinforce its position in Building & Infrastructure. The completion is pending local authorities' approval.

Currency fluctuations had a smaller negative 2.3% impact in the third quarter, and represented a negative 4.0% impact in the first nine months of the year.

On August 31, Bureau Veritas announced it had successfully placed an unrated €700 million bond issue composed of two maturities: seven years for a €500 million tranche and 10 years for the remaining €200 million tranche. Taking advantage of favorable market conditions and strong demand, BV issued the bonds with attractive coupons of 1.25% and 2%, respectively.

As to the full-year 2016 outlook, due to an earlier-than-expected deterioration in the Marine business and persistent Oil

& Gas capex weakness, Bureau Veritas now anticipates organic revenue growth to be slightly negative. This will negatively impact the adjusted operating margin, which Bureau Veritas now expects to be in the 16.0%-16.5% range for FY2016, and the cash flow generation, which it still sees being strong, below last year's record level.

Bureau Veritas remains highly committed to executing our 2020 strategic plan as presented in October 2015.

(Full consolidation since April 1, 2015)

For the first nine months of 2016, Constantia Flexibles' sales stood at €1,542.2 million, up 8.1% over the year-earlier period. Constantia Flexibles' sales grew organically by 2.3%, and changes in the scope of consolidation had a positive impact of 6.9%, deriving principally from the acquisitions of Afripack and Pemara. Fluctuations in exchange rates, however, had a negative impact of 1.1%.