Investor Presentation • Dec 3, 2009
Investor Presentation
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Wendel announces on the occasion of its Investor Day in Paris on December 3. 2009, with the theme "Innovation: a springboard for recovery", the following items:
Frédéric Lemoine, Chairman of the Executive Board, said:
"Wendel is ahead of schedule on its action plan.
Our efforts in the last eight months to stabilize our financial situation are paying off. Wendel has abundant cash, has no debt to reimburse until 2011, and has now rescheduled all its bank financing with margin calls to between 2012 and 2015. This has allowed us to support the successful restructuring of Materis and Stahl, to confidently step up our involvement in Saint-Gobain, and to begin cautiously looking into new investments in long-term growth sectors from 2010 on.
With our full support, each of the Group's companies continues with determination to implement demanding and ambitious operating plans, in order to adjust to the economic context and to develop new growth strategies, based mainly on innovation. The most recent proof of this is the marketing approval for 23 European countries that Stallergenes obtained on November 27 for Oralair®, its pollen allergy tablet for adult and child use."
The proposal that Wendel presented to the banks early in the fourth quarter has already received the support of 95% of its senior and second-lien lenders and 100% of its mezzanine lenders. This proposal means that Wendel, which is reinvesting €60 million in Stahl, will hold around 92% of Stahl's equity once this process has been completed. Mezzanine lenders, second-lien lenders, and management will hold the rest.
This will reduce Stahl's debt by almost 40%, from €360 million to less than €200 million, which will give it a financial structure suited to fully exploiting the new business plan presented to the banks. The closing of the deal is scheduled for the first quarter of 2010.
On November 23 and 24, 2009, Wendel sold 15 million Legrand shares for net proceeds of €275.8 million, generating a capital gain of around €170 million. The transaction expanded Legrand's free float from 31% of its shares to 42%.
Wendel has been a Legrand shareholder since 2002 and intends to remain active and closely involved. It is a core shareholder, alongside KKR, with its stake now about 25% of the shares and 32.5% of its voting rights. Under their shareholders' agreement, the terms of which remain unchanged, the two shareholders jointly control the company and have majority representation on the Board of Directors.
8.551 million Saint-Gobain put options have been sold in recent weeks. This protection had been set up on part of the financing to acquire a stake in Saint-Gobain. As a result of these recent transactions, Wendel's exposure to fluctuations in the price of its 89.8 million Saint-Gobain shares has increased from 64% to 73%.
€163.4 million in proceeds from the sale was used to repay €462.5 million in financing without margin calls. The rest derived from Wendel's cash holdings. Following this transaction, the bank financing without margin calls contracted to finance the acquisition of Saint-Gobain shares comes to €1,632.7 million. It is guaranteed by Saint-Gobain shares and the puts that Wendel still owns. Maturities on all bank financing without margins calls now extend from March 2011 to March 2012, vs. December 2010 to March 2012 initially.
In the coming year, Wendel will continue to enhance the protection linked to this debt by using, together or separately, the three options it has selected: rollover of puts and the corresponding debt, sale of puts and repayment of the corresponding debt, resetting of strike prices of puts and adjustment of the corresponding debt.
As part of the drive towards greater financial flexibility that it began in April 2009, Wendel today announces new transactions undertaken in recent weeks that will allow it to improve its financial leeway even further:
of the contract, Wendel now has an undrawn line for Saint-Gobain financing of €300 millionwith maturity extended by two years and a half. It is composed of three €100 million tranches maturing in November 2013, May 2014 and November 2014.
In all, since the beginning of 2009, Wendel has extended all its bank debt with margin calls by more than two years, bringing the average maturity to four and a half years. Moreover Wendel has repaid or reduced bond and bank debt by €946 million, including repayment of financing without margin calls in connection with the sale of the puts. As a result of this major restructuring of its financing, the Group no longer has any debt maturities until February 2011.
(1) subject to implementation of the final contractual documentation
Net Asset Value came to €52,2 per share on November 30, 2009, vs. €37.2 on August 26, 2009. Note that the calculation methodology remains unchanged and complies with the recommendations of the European Venture Capital Association.
| (in €M) | 30/11/2009 | 26/08/2009 | ||
|---|---|---|---|---|
| Listed investments by company • Saint-Gobain • Bureau Veritas • Legrand • Stallergenes |
Number of shares 89.8 millions 56.3 millions 65.6 m (11/09) / 80.6 m (08/09) 6.1 millions |
Price (1) €37.19 €34.09 €19.29 €60.80 |
6,895 3,341 1,919 1,265 370 |
6,243 2,679 1,867 1,395 302 |
| Unlisted investments and others (2) | 336 | 180 | ||
| Cash (3) (5) | 2,248 | 2,562 | ||
| Gross Asset Value | 9,479 | 8,985 | ||
| Wendel bonds | (2,692) | (2,531) | ||
| Bank debt related to Saint-Gobain financing (5) | (4,645) | (5,418) | ||
| Net value of protection related to Saint-Gobain financing (4) (5) | 492 | 839 | ||
| Net Asset Value (5) | 2,633 | 1,875 | ||
| Number of shares | 50,436,175 | 50,436,175 | ||
| Net Asset Value per share (5) | €52.2 | €37.2 | ||
| Wendel share price: average of 20 most recent closing prices | €39.81 | €29.89 | ||
| Premium (Discount) to NAV | -23.8% | -19.6% |
(1) Average of 20 most recent closing share prices calculated as of November 30, 2009
(2) Including 590,005 Wendel treasury shares as of November 30, 2009
(3) Cash of Wendel and Saint-Gobain acquisition holding company, including €1.5bn in unpledged cash as of December 2, 2009
(4) The hedges (purchases and sales of puts) cover close to 27% of Saint-Gobain shares held as of December 2, 2009
(5) Proforma of puts sale and debt repayments made on December 1 and 2, 2009
Our Investor Day, which over the last eight years has customarily been held near year-end, will be given over in the morning to a review of Wendel by its Executive Board and to the presentation of unlisted companies and their long-term growth potential. Next, Pascal Morand, Dean of ESCP Europe, and Delphine Manceau, Professor at ESCP Europe, will present the report entitled "Pour une nouvelle vision de l'innovation" ("A new way to look at innovation"), which they have submitted to Christine Lagarde, the French Minister of Finance. Following these presentations, the afternoon will feature a round table on innovation with Frank Piedelièvre, Chairman and CEO of Bureau Veritas; François Rachline, Director of the Institut Montaigne and economics professor at "Sciences Po" Paris; Didier Roux, Saint-Gobain's Director of R&D and Innovation; Gilles Schnepp, Chairman and CEO of Legrand; and Albert Saporta, Chairman and CEO of Stallergenes.
The Investor Day will be held today from 10:30 a.m. to 4:30 p.m. at the Pavillon Cambon, 46, rue Cambon, in Paris, France.
All presentations will be available live and on a deferred basis by webcast on Wendel's website (www.wendelgroup.com).
Wendel is one of Europe's leading listed investment firms. The Group invests in France and abroad, in companies that are leaders in their businesses: Bureau Veritas, Legrand, Saint-Gobain, Materis, Deutsch, Stallergenes, Oranje-Nassau and Stahl. Wendel plays an active role as industry shareholder. It implements long-term development strategies, which involve boosting growth and margins of companies so as to enhance their leading market positions. Wendel's consolidated 2008 sales totaled €5.4 billion. Wendel is listed on Eurolist by Euronext Paris.
Anne-Lise Bapst: +33 (0)1 42 85 63 24 Laurent Marie: + 33 (0)1 42 85 91 31 [email protected] [email protected]
Christèle Lion: + 33 (0) 1 42 85 91 27 Olivier Allot: + 33 (0) 1 42 85 63 73 [email protected] [email protected]
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