Building leading companies through long-term engaged and responsible ownership H1 2020 results July 2020 1
Business update
H1 2020 highlights Within a Covid-19 crisis environment having required from GBL and its portfolio companies a full set of adhoc measures TSR Financial Capital Outlook outperformance robustness allocation Covid-19 impact 8.8% annualized TSR (1) Strong €1.1bn asset rotation (2) anticipated on liquidity profile • • Outperformance Share buyback the full year FY20 • in spite of the LTV ratio execution • Revised discount widening under control • FY19 dividend maintained dividend guidance Simplification of Portfolio Team the ownership structure resilience reinforcement Sector leaders with an Successful exchange offer leading to improved Recruitment of a international footprint transparency and a mechanical increase in GBL’s free float Head of ESG in support of our • • Conservative net Reaffirmed support from the families ambitions in terms of leverage and access to sustainable development • Technical impacts having led to the discount widening debt markets 3 (1) TSR on annualized basis with reinvested dividends, calculated as from December 31, 2011 until July 24, 2020 (2) Information as of June 30, 2020
GBL’s response 1. Crisis management Covid-19 2. Solid financial position 3. Solidarity measures Response from GBL 4. Close portfolio monitoring and its portfolio companies Response from the portfolio companies 1. Priority given to protecting employees 2. Particular attention given to the strength of the balance sheet and the liquidity profile 3. Operational monitoring 4. Action plans aimed at limiting the crisis’ impacts while enabling to strengthen the post-crisis competitive positioning 5. Solidarity measures 4
Revision of our dividend policy In support to growth acceleration From FY21 onwards FY20 €2.50 p.s. (1) Ordinary dividend pay-out ratio between 75% and 100% Supported by the strength of our balance sheet and liquidity profile of the cash earnings • • Providing visibility Possibility to distribute exceptional dividends to investors in a context of heightened uncertainty Continuing to deliver an Generating attractive dividend yield additional financial means with the prospect of: 3.3% (2) Accelerating net asset value growth • well-positioned Supporting our portfolio companies if needed within our peer universe • Further executing our share buyback program Unchanged TSR commitment towards investors 5 (1) Subject to the approval of GBL’s General Shareholders’ Meeting (2) Indicative dividend yield based on a FY20 dividend of EUR 2.50 per share and GBL’s stock price of EUR 74.68 as of June 30, 20 20
TSR outperformance Annualized TSR Outperformance relative to the reference index + 904bps 22.6% + 366bps 19.3% + 357bps + 487bps + 505bps + 466bps + 167bps 16.1% 16.0% 15.6% + 326bps 14.2% COVID-19 13.7% 13.6% + 367bps 12.5% 12.0% impact 11.1% 9.9% 9.1% 9.0% 8.8% 8.7% 7.2% 6.2% Europe 50 Stoxx 2011-12 2011-13 2011-14 2011-15 2011-16 2011-17 2011-18 2011-19 2011-20 Net asset value evolution relative to the reference index + 82% + 46% + 44% + 27% Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 6 Note: Annualized TSR with dividends reinvested, calculated as from Y/E 2011. GBL share price in dark blue vs. our reference StoxxEurope 50 index (rebased) in light blue . 1 • 2011 - 19 data extracted from Bloomberg as of 12/31/2019. 2 • 2011 -20 information extracted from Bloomberg as of 07/24/2020.
Financial robustness & capital allocation Liquidity profile LTV € 2.7bn 6.9% Asset rotation FY19 dividend € 3.15 p.s. or €508m €771m disposal of our residual stake maintained in full Acquisition of a €331m deployed in Total through in spite of the €374m block of in undisclosed forward sales, Covid-19 crisis shares assets with a €411m context capital gain Share buyback 66% executed New commitments Net asset value of €1. 9bn , € 475m Second share buyback program authorized Investments representing 11% of € 215m in October 2019 for up to €250m (1) Disposals GBL's net asset value € 84m • €161m bought back in H1 2020 • €560m treasury shares or 4.6% of GBL’s capital as of June 30, 2020 7 Note: Information as of June 30, 2020 (1) First share buyback program of €250m fully executed in 2018/19
World leaders 17.6% adidas 17.1% SGS 15.3% Pernod Ricard A resilient, 10.2% Umicore € 18.2bn high-quality and 10.0% LafargeHolcim Portfolio value 7.7% Imerys diversified As of June 30, 2020 4.7% Webhelp portfolio 7.0% GEA / Ontex / Parques Reunidos / other 10.5% Sienna Capital • Solid and resilient base of high-quality Sector breakdown Global presence (1)(2) Credit risk quality (3) listed companies, leaders in their sector and operating across all continents S&P / • Conservative net leverage of 1.3x (1) on Moody’s a weighted average across the listed ratings portfolio • Cross-asset agility with private & alternative assets representing 35% Consumer 37% Asia 64% Investment grade 16% of GBL’s portfolio goods 33% Europe, 34% Unrated 30% Industry Middle East 2% Sub-Investment grade (1) At year-end 2019 and excluding private & other assets and Sienna Capital and Africa 22% Business (2) Breakdown of the 2019 consolidated revenue of portfolio companies weighted by their contribution to GBL’s portfolio. services 30% Americas (3) As of July 24, 2020 and excluding private & other assets and Sienna Capital 13% Sienna Capital and others 8
A leaner capital ownership structure Resulting in a 40% increase in the free float Relations with the controlling shareholder GBL’s simplified shareholding structure as of year-end 2019, i.e. before the exchange offer Long-lasting partnership between the Frère and Desmarais families since • Frère family Desmarais family several decades Power Corporation of Frère group Canada group Current agreement effective until 2029, with the possibility of extension, • establishing a parity control in GBL Sound governance with efficient interactions between the families and the 50% Parjointco 50% • independent board members 56% (75%) Patrimonial DNA Through-the-cycle investor deploying permanent capital with a long-term • investment horizon 50% (52%) (1) Conservative approach towards leverage • Simplification of the ownership structure (2) % ownership 3.2% (% voting rights) Simplification of the existing dual holding structure by • Parjointco consolidating ownership of GBL and Pargesa Exchange offer launched by Parjointco Switzerland SA and • 97.4% (98.5%) declared successful on June 9, 2020 De facto control retained by the Desmarais and Frère family • groups (through their controlling vehicle Parjointco N.V.) as a result of the double voting right adopted at 85.7% (3) at GBL’s 29.5% (44.7%) (2) (1) Taking into account the treasury shares whose voting rights are suspended Extraordinary General Shareholders’ Meeting in April 2020 (2) Information as of July 6, 2020 (3) Vs. a 2/3 majority required for the adoption Increase in the free float from 50% to 70% expected to impact • 4.6% (2) favorably GBL’s trading liquidity 9
Focus on the discount widening Observed throughout H1 2020 100 35% V2X Index (lhs) Discount (rhs) Average discount 80 30% 60 40 25% 1 20 0 20% Jun-2017 Dec-2017 Jun-2018 Dec-2018 Jun-2019 Dec-2019 Jun-2020 Key highlights 100 35% The 3-year average discount amounted to 24% 24% 1 80 4 Widening of the discount to an average of 28% 8% driven by the • 3 2 outbreak of the Covid-19 crisis end February 30% 60 2 Further widening of the discount to an average of 31 31% • 3 under the combined effect of (i) bearish and unstable 40 markets with increased uncertainty and volatility and 25% (ii) technical impacts post-announcement of the exchange offer on March 11, 2020 20 End of index rebalancing • 4 0 20% Dec-2019 Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Jun-2020 10 Source: Bloomberg (V2X Index) and GBL (discount). Data until July 24, 2020
Financial update
Consolidated In €m H1 2020 H1 2019 Δ net result of Cash earnings 390 447 (57) € 385m Mark to market and other non-cash items 39 (7) + 46 Sienna Capital and operating companies 65 74 (9) Eliminations, capital gains, (109) (108) (0) impairments and reversals Consolidated net result 385 405 (21) Highlights H1 2020 consolidated net result at €385m, vs. €405m in H1 2019. This result stems • primarily from: €249m net dividends from investments - The change in fair value of the debt towards Webhelp’s minority shareholders - for €107m The change in fair value of Sienna Capital’s funds, not consolidated or - accounted for under the equity method, for a total amount of €23m The contribution of associated or consolidated operating companies for €13m - Cash earnings decreased by €57m ( - 12.8%), primarily as a result of: • Decreased net dividend contribution (- €94m) - Partially compensated by Sienna Capital’s contribution (+ €46m) - 12
Recommend
More recommend
