Chief Financial Officer, Gimv
Bolero Holdingevent met Ackermans & Van Haaren, Gimv en GBL
Herbekijk het online Bolero Holdingevent met Ackermans & Van Haaren, GIMV en GBL, dat plaatsvond op 9 december 2021.
KBC Securities-analist Michiel Declercq start de presentatie met een sectoroverzicht: hoe presteerden de Benelux-holdingaandelen die hij opvolgt het afgelopen beursjaar en wie waren de winnaars en verliezers?
Vervolgens krijgt u een bedrijfspresentatie van Ackermans & van Haaren-CFO Tom Bamelis, GIMV-CFO Kristof Vande Capelle en de CFO van GBL, Xavier Likin.
Tot slot legt analist Michiel Declercq de holdingbedrijven enkele vragen van beleggers voor.
Bolero Small & Midcapse...
Transcript (68 segments)
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Host0:02
Polio punt b. Invest online with insight. Good evening ladies and gentlemen, and welcome to the live Bollero holding event. We are pleased to see you all present. Today on the program: a sector overview given by chemical critical analyst Michiel de Klep, and we have the company Centra Cissé presented by the CFO Tom Amelie Akkermans, and their CFO Kristof Capelle from Gimv, and the JBL CFO. If you have questions, you can ask them via the icon at the bottom left of my screen. The analyst will then ask them to the CFOs, and so we have a Q&A moment planned for you. I would like to point out that Mr. Erica will present in English, but has provided Dutch-language slides, and the answers given will be briefly summarized in Dutch by Michiel de Klep. Share your findings on social media using the hashtag Bollere Holding 2020. And then all that remains is to wish you a pleasant and fascinating evening, and I give the floor to Michiel de Klep.
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Michiel de Klep1:11
Thank you. So indeed three speakers, soon three top speakers. But before we go to the speakers, we will briefly look at the holding landscape, how it performed in 2020. We start directly with the first slide of 2020. Certainly a turbulent year for many people, both private and at work, or if you are a student, it could also have been a difficult year. And also for the holdings, it was a very resilient year. If we look at the chart here on the left, we see the performance of the Euro Stoxx 50, the Nasdaq, and the S&P 500. We see of course the strong decline in March when the corona virus actually took over from China; European stock markets fell 36%. But what we see is a very rapid recovery in the following months. And the reason for this faster recovery is a very rapid response from the central banks, both the European Central Bank and the Fed. That is something that was less the case in 2008-2009; the Fed reacted somewhat faster, but Europe was later, which meant too little too late. Now they have decided to pump money into the system quickly to maintain liquidity, and you see that it has helped the stock markets. Also when we look at economic activities, we see that it is certainly not quiet. We do see a second dip in November, let's say a rise in the number of corona cases, but then we also had the positive vaccine news. So that we are currently only about 5% lower for the year, which is actually quite limited. And what we can certainly see is a big difference between Europe and America; America is doing much better, and that is mainly driven by the large share of technology and innovative companies that can benefit from the whole corona situation. Think of online payments, e-commerce, and so on. Many of these companies are in the S&P 500, think of Apple or Microsoft, which are doing very well, hence the outperformance of the US markets. Now, our holdings focus mainly on the European market. So if we look at how they have performed relative to that, in general, over the last ten years, holdings have traditionally always done better, and in 2020 that is certainly no different. Also the decline at the beginning of this year was less severe, and now we are barely 1% lower. I want to add that this is still without dividend payments, purely based on the stock price. Many of our holdings also have good dividends, they have a very solid and strong track record. So if we achieve that, we can expect a slightly positive return. Now these are the normal holdings, for the mono-rail holdings it is a bit the same, we are at -1% figures from the end of last week.
Now we are going to take a look back at the performance of the holdings themselves. It might be a bit of a busy chart, but I will show you why. We see a strong outlier at the top: Sofina. And what do we see? The rest, we see some holdings that have done well, they are in the green this year. I also see Brederode and Quest for Growth. But we see mainly that there are no extreme outliers downwards, and that is mainly because holdings are very diversified, active in different sectors, so the chance of huge outliers is much smaller, and that is precisely the nice thing about holdings, and it's nice to invest in holdings. Of course, for mono-rail holdings it is somewhat less the case, because they are only dependent on the underlying asset. And there we can note that Tubize has done very well, largely due to the resilient healthcare and pharma industry, but also very positive results from the CB. Now we will look at why some holdings are doing well or exceptionally well. I have Sofina, Brederode, and Quest for Growth; they are in the green for this year. If we look at what these companies are active in, it is somehow logical that this is the case. Starting with Sofina, a company that is normally active in defensive sectors, think of consumption, healthcare, education. But what makes Sofina do so well in 2020 is a strong focus on digital transformation, on more digital companies. It is not the entire portfolio, but they are very active in the venture capital world. They allocate money to venture capital funds that then invest. A large part of the portfolio consists of that. Sofina also has, through SofinaGraph and its own venture capital, the ability to invest directly. And there we see some companies that have done very well this year. Think of Byju's, which is online learning in India, booming very quickly, a trend that has been enormously accelerated during the corona pandemic in a country that was also heavily affected. Online learning was the only option at that time, and that has caused the valuation of Byju's to almost double from 5 to 10 billion dollars. If you consider that Sofina has a stake of about 7%, that can count. Additionally, they are also very active in e-commerce, they have the IPO of the Hun group, so those are positive elements that have driven the price up. For Brederode, a bit of an overlap story. What you see here is also a venture capital portfolio, but also a listed, diversified listed portfolio. What is special about Brederode is that the venture capital portfolio is large and largely invested in the US, and thus again a market that has been able to profit from the IPO climate today, and that is certainly positive for the venture capital funds. And then perhaps an outlier, an unexpected one: Quest for Growth in 2020. Why do I say unexpected? Well, Quest for Growth is actually a private equity company that has to meet certain conditions, to keep it short: they are mainly invested in Europe, and in the small and mid-cap sector. Small and mid-caps in Europe have not performed as well as other stock indices, but despite that, they have achieved very strong results. At the end of November, the underlying portfolio value had risen by 8.9% for listed companies and for the overall portfolio, so that is quite remarkable.
Why do I say unexpected? Well, Quest for Growth is actually a private equity that must meet certain conditions. To keep it short: they are mainly invested in Europe, and in the small and mid-cap sector. Small and mid-caps in Europe have not performed as well as other stock indices, but despite that, they have achieved very strong results. At the end of November, the underlying portfolio value had risen by 8.9% for listed companies and for the overall portfolio, so that is quite remarkable. Same foot? It rolls a bit behind, and then just a conclusion: they have shown resilient performance, the companies that have shown resilience in the crisis. Here we also see our three speakers, so I will not go into depth now, they will tell more extensively later. I do want to say once more that these are the returns of the stock prices, not taking into account the dividends paid, and they are really nice dividends, from all holdings. Perhaps a brief explanation of D'Ieteren: D'Ieteren is at -6% now since yesterday, but it is already in the green for this year. That is a bit deceptive because it is a company active in the automotive industry. That can give a distorted picture. D'Ieteren is an automotive company on the one hand, so its natural impact is the Belgian car market, which has fallen by about 23% in 2020 so far. But what you can see on the right chart is that the largest part of the value actually comes from the blue balloon. That is also somewhat influenced by the crisis because lockdowns lead to fewer cars on the road, so the chance that your windshield breaks, etc. But that is actually the parent company of Carglass. Despite the declining volumes, we have seen that they can benefit from rising margins. More complex windshields, they become more technical, for example with ADAS systems and such, which require calibration. The cameras placed on the windshield to support safety features like automatic braking, etc. So D'Ieteren is a holding that is a bit softer at the knees, but the impact is limited here as well. They have paid a nice dividend in 2020. Now I want to first show the reason why it was harder hit.
The reason why it was harder hit, the full impact, you can see in the chart on the right. That is because a large part of the value is in assets, so in Hal Trust, that is the Cremer Vision deal that was going to be taken over by EssilorLuxottica, which was already closed or sealed before the crisis. But then there were still some regulatory approvals needed, so the deal started to wobble, and that caused some price pressure on Hal. Nevertheless, it remains a very diversified holding, and then there are for example, the positive contribution from others. Same for Oase? The big steps now: BCM is a Belgian chocolate maker, more known for Neuhaus and Chef de Bruges. There, of course, less tourism, and chocolate is an important tourist product of Belgium, so there is some impact, especially the Christmas season and Sinterklaas is important for them, and with the new lockdowns, that can certainly come back. But also here, it remains a diversified holding. For example, Recticel in the portfolio is having a very strong year, so the impact is limited. Now, briefly look at the valuation: how do we value a holding? Well, what we normally do is look at the difference between the market value or the stock market value of the holding and the underlying value that we estimate ourselves, and that is called the discount. Traditionally, in a declining market, the discount becomes larger, and when the market rises, the discount becomes smaller, people are willing to pay more. Now, if we look over the last few months, in the chart here at the bottom left, the two-year average, we are around there. There has been some liquidity, it also has to do with the fact that the value of private assets is not always automatically estimated, so it can give a distorted picture. But in general, we return to the average. If we look at the holdings among themselves, we see some large differences. At the top we have Brederode and Sofina, those two are in the green, and we have seen a contraction of the discount, and that is not exceptional because those are companies that are active in venture capital in the US, where deals are taking place, there is a lot of IPO activity, and investors have seen that in the Nasdaq chart, they want to play on that and are willing to pay more. For other holdings, there are small increases in the discount. For example, KBC? Actually, I'm not sure. For hal trust, as I said, the Cremer Vision deal is uncertain, and for the mono-rail holdings, more cyclical sectors, you have KBC. Perhaps Quest for Growth, which had a good year, but we would expect a narrowing of the discount, which is not yet the case, but there is still room. So, that was it for our holdings. I suggest we move on to our speakers. So first, I would like to welcome Tom Amelie from Akkermans & van Haaren.
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Tom Amelie14:07
Yes, okay, look, I would say let's begin with the presentation of Akkermans & van Haaren. First, I want to say to the viewers: don't forget to submit your questions during the presentation so that we can answer them. But before we go on, it's up to you. Thank you, and also thanks to KBC for organizing this event. It would have been much nicer to meet you in person and to answer your questions in the room, but we will do it via this way today. And maybe it is also good, before going into the details of the portfolio and running through the different companies, to see the broader context, because we live in a not simple world, and we invest in a not simple world. I don't need to convince you today of the impact the pandemic has on daily life, including the life of an investment company. But besides that, there is also increasing geopolitical instability, the consequences of globalization. Climate change is perhaps less prominent in the news bulletins every day, but it is happening, we can see that in various places in the world, and it creates pressure on land, it creates pressure on a number of other resources. A world population that is increasing, aging, living together in large cities. In short, a number of things that are in themselves selective, and that's not even talking about the technological evolution. We, as a society, how do we stand against that? We try to play on the opportunities created by these challenges in the choices we make in the portfolio. We see technological innovation as a plus, as something interesting to play on and to create value. We are all too aware that we only have one planet, that there is no plan B, and that we must absolutely focus on sustainability and respect for our environment. I think that is nowhere better emphasized in our portfolio, and we will go deeper into that later. Nowhere is it better illustrated than with the whole development and investment we are doing in the direction of renewable energy. And all that, if we do it well, hopefully results in a good result and the creation of value at the level of the holding, but should also contribute to improving the quality of life of our family.
Even concretely, Akkermans & van Haaren is a story of 150 years of entrepreneurship. It indeed started with Mr. Akkermans and Mr. van Haaren, who came from the Netherlands to Belgium, started working on a barge, and laid the foundation of an investment company in which their descendants, the family members, still have an important share. Over those 150 years, there have been a number of red threads in the decisions and investments that Akkermans & van Haaren has made. The group has very consistently focused on innovation and diversification. If we go through the different companies in the portfolio, we will see various examples. We are an active shareholder, we believe in active ownership in our participations. We are not just someone who buys a few shares on the stock exchange and then sells them again. When we invest in a company, we take on the role of an active partner for the management team and for the other shareholders. We do that from an entrepreneurial spirit. As I said, it is a story of 150 years of entrepreneurship, and you will see several examples of that in the portfolio. We invest mainly for the long term. We are not short-term buyers and sellers of companies. Entering and exiting on the stock exchange is something that you as a private investor can do very well, but we focus on long-term investing and developing sustainable partnerships with the companies we invest in. Today, that leads to a portfolio of a small thirty companies in which we participate. If we add up all those different companies, they are present in almost all countries of the world, 155 if we have counted correctly. So what is the red thread? What we aim for when we invest is to create value by investing in shares of other companies in the long term, and thus increase the value of our own portfolio. I will not go into too much detail on the figures, but to give you an idea of the footprint of our company, here are some figures: we had a net profit of 395 million in 2019, our companies together represent a turnover of more than 5.6 billion, and that is only possible thanks to 21,500 people who contribute. I think our market capitalization today is around 4.1 billion.
That fluctuates a bit in a corona year like 2020. I saw the story of the discount on the chart, and also the discount as calculated on Akkermans & van Haaren. But there is one parameter that we as management focus on much more than the discount, and that is value creation. Value creation, according to us, is best measured by the creation of additional equity. Our company was introduced on the stock exchange in 1984. Since then, we have achieved a compound annual return in equity growth of about 15%, and over the long term, that has also been the case for the stock price. So over a period of more than three decades, more than 13% per year. Then I would like to take you through the different components of the portfolio, which are organized around five business lines. We start traditionally with construction and dredging, marine engineering, and contracts, with DEME still being the company we are most spontaneously associated with, and we don't mind that at all. The origin of our company lies in dredging, and even more, DEME today is one of those companies that is a world leader in its field and has its headquarters in Belgium, and there are not too many of those. When we think of DEME, we think of dredging, and you see two beautiful dredging ships here. But today, DEME is much more than that. 40% of the revenue is still generated in dredging, but meanwhile there is a second division, DEME Offshore, which also represents more than 40% of revenue, so about as large as the dredging part, and it realizes its revenue in offshore works, mainly in the construction of offshore wind farms, where DEME was one of the pioneers and has installed the most foundations for offshore wind farms. Additionally, DEME is also active in environmental services, building materials, and infrastructure works. I said it already: a global company, present in more than 90 countries, and in 2019, the last year before corona, it generated a turnover of 2.6 billion. Corona is of course responsible for some logistical problems and the fact that some projects are executed more slowly than under normal circumstances, but still, over the first half of the year, there was more than a billion in revenue. And perhaps more importantly, despite the fact that it is difficult to secure new contracts in the current circumstances, they can fall back on a particularly strong order book of nearly 4 billion euros, so that is all work that still needs to be executed in the coming period. That is of course only possible when the company continues to innovate and invest.
This has also happened this year. We put a new ship into service a few months ago, the 'Muur Ze Liever'? Actually, we are building a ship that will normally enter service in the first quarter of 2021, the 'Spartacus', which will be the most powerful dredger ever built. And we are in Taiwan building a new installation ship specifically designed for the offshore market in Taiwan and Asia. So even in a difficult corona year, the company continues consistently with innovation and investment in its fleet. But it does not stop there; it is not limited to current and traditional activities. DEME continues, just as they did 15-20 years ago with offshore wind, which did not exist then, and from which they have now developed a whole new business. So they continue to look for new applications, new diversification. Think that DEME, as an installer of offshore wind farms, is particularly well placed to play a leading role in the movement towards green hydrogen, and it is probably one of the ways to provide storage and transport of energy and a solution for the future. So perhaps if we can speak again at an event like this in many years, we will see what it has led to. Just like DEME is also doing, through a subsidiary called GSR, which is looking at how to pick up nodules from the ocean floor, going really deep, more than 4 km, to pick up nodules that are rich in certain metals and minerals that are specifically needed for the production of the batteries needed to electrify the whole world, as is the intention. So DEME, even after all these years, more than 100 years of existence, is still a wonderful company, a world leader in its field, and fully engaged in further innovation and diversification. And when you look at such a model over the long term, it can be very powerful. You see here the same figures that were mentioned earlier: turnover over 2019 of more than 2.6 billion, equity of almost 1.5 billion. If you see where we were in 1990, we were talking about a company with barely 100-200 million in turnover and equity. So if such a long-term effort is continued, a lot of value can be created. And that is exactly what we like to do, that is exactly in line with our ambition and our spirit. Further, within the portfolio, we are also a shareholder of CVT.
We are also a shareholder of CVT. 60% of CVT is a listed construction company that is a shareholder of DEME, but besides DEME, it also has activities in real estate development, classical construction, multi-technics, and track laying. I can only say that within the perception of CVT shares on the stock exchange, I have the impression that it is sometimes overlooked that since 2013, when we took control of CVT, quite a lot of work has been done. Where CVT in 2013 was a company that regularly had to book losses on foreign adventures or on certain projects, we see that in recent years a nice track record of profitability and stability in results has been built up. So I think the market sometimes underestimates this, because good work has been done there in recent years, and in my opinion, value has been created. A third activity within our portfolio of construction and dredging (or actually, I will not dwell on it too long, but it is important to show that besides DEME and construction, we also invest in sustainability. We are, through investments we make together with DEME, but also alongside, a direct shareholder in two offshore wind farms off the Belgian coast. I don't know if people realize that when they invest in Akkermans & van Haaren, they indirectly become co-owners of a piece of 155 megawatts of renewable wind energy generated off the Belgian coast. The second activity in our portfolio is private banking. Although today we are still spontaneously associated with our dredging activity, it is the case that for some years now, the private banking activity in terms of contribution to profit has become the most important asset. When we talk about private banks in our portfolio, it concerns two very nice institutions: Delen Private Bank on the one hand, which focuses on discretionary asset management for private clients, and which in Belgium, Luxembourg, the Netherlands, and the region has 42 billion in assets under management. And the sister bank, Bank van Breda, which has a more classic profile but is also evolving more and more towards a private bank or asset manager. I think I don't need to say too much about private banking, the figures speak for themselves. We started this activity in the 1990s, when there was 500 million in assets under management. On September 30, 2020, that had grown to 42.4 billion. Perhaps equally important or even more important is the fact that the assets of our clients were well protected even in a difficult corona year, and the clients in asset management also had a positive return after nine months in 2020. That is exactly what is expected from a party like Delen: a conservative, good, very good investment for a portfolio of private clients. As I said, the collaboration with Bank van Breda is also perhaps underestimated. Bank van Breda is a more classic bank model, as it takes deposits from the market and grants loans to clients. But what is probably unique, and if you hear the radio spots you are reminded of it, is that they focus entirely on entrepreneurs and liberal professions. Important in the collaboration with the sister bank Delen is that there is an increasing exchange between the clients of the two banks, and that the clients of Bank van Breda are also an important source of additional capital under management at Delen. Private banking, our third activity.
Private banking, our third activity, is in the real estate sector. There we have three things. We are with Extensa active as a developer on two large projects. One project is Tour & Taxis in Brussels, where you see a photo of the renovation of the Maritime Hall, which as part of the historic building complex at Tour & Taxis in Brussels is now being renovated into a completely new office complex. You see it with timber construction within the historic skeleton of the buildings of Tour & Taxis, a fantastic innovation also in terms of sustainability. Additionally, there is a large project in Luxembourg, of which you see an image. So those are the two large projects where Extensa focuses on real estate development. The second activity within real estate is a real estate investment trust, Leasinvest Real Estate, which we now do under GVV. With that, we are in real estate management with a portfolio of about 1.1 billion, concentrated in Luxembourg, Belgium, and Austria. The third activity is an activity in elderly care. Why is elderly care in real estate? Because here, not only the operation but also the ownership of the real estate is part of the business model. Here is an example of a recently opened residential care center in Anderlecht. Today, the network of Anima Care consists of 23 residences where we can accommodate more than 2,500 people. Why is Anima Care such a good example of what Akkermans & van Haaren stands for? Well, this started as an initiative in our offices in partnership with a full-blooded entrepreneur who came to us with a good idea. Over a period of 10 to 15 years, a portfolio of more than 2,500 beds has been built up from nothing. We have time; when the model is right, when the team is right, when the people are right, then a very nice result can be created in the long term. And that is exactly what we see here at Anima Care.
Our fourth activity in the portfolio is called Energy Resources. The most important asset in that is our participation in Super. Super is a listed plantation holding that focuses mainly on palm oil, but I want to say immediately: very important, sustainable palm oil, and exclusively sustainable. Because palm oil is a product that sometimes has some controversy, especially here in Western Europe, but Super is far from that, as they focus exclusively on the cultivation of sustainable palm oil. That is also evident from the figures: last year they were good for over 300,000 tons. The fact that Super has so explicitly focused on sustainable palm oil means that the expansion we want to realize naturally has its limitations, because it is not possible and not desirable to destroy forest to create new plantations. Yet we want the company to continue to grow and develop, and one of the ways to do that is to ensure that on the available hectares, a greater production can be realized. And that is exactly in that sense you must understand the investment we made earlier this year in a company in Singapore, together with an office in Indonesia, that is developing seeds of oil palms that will be able to produce a multiple compared to existing production. So that will make it possible to increase production without using new hectares.
And with that, we are actually not far from what our last activity in the portfolio of Akkermans & van Haaren represents, which is what we summarize under the term growth capital. There, we dare to look at sectors that are somewhat more opportunistic. We position ourselves as a partner for the longer term in various sectors, for management teams or for companies that are looking for a long-term investor. We can invest in larger, established companies, but in the past year we have shown that we are also willing to invest in still relatively young or promising companies. And that is it, really.
Not only limited to Belgium, we have a number of participations in our portfolio that are located in India, and this year additional investments were made in the HealthCat Fund, and these are funds that focus very specifically on opportunities in the Indian healthcare market. But we have invested small amounts, also in a start-up and a very young company that originated from the knowledge of Ghent University and from the team of Indigo Diabetes, who developed a special sensor, a very small sensor that can be applied under the skin and ensures that people with diabetes can continuously measure their values and no longer have to be constantly pricked. Just like with MRL and RMF, we also invested in a spin-off from Ghent University, focusing more on the microbiome, on gut flora, for developing new medicines. So you see that we also continue with initiatives in our growth capital portfolio, both towards a number of newer companies, like the three that just passed by, but also very recently we have... best 4 on this investment, and perhaps also a very progressive and technological company that is a bit further in development, which we were able to add to the portfolio. We took a 20% stake in OMP, based in Ghent, and it is a company that may not yet be well known in Belgium, but it is among the absolute world top in its field of supply chain software. When we made the investment, we were surprised how little resonance it received in the Belgian press and in Belgian cities. On the other hand, we were incredibly surprised at how many messages came from all over the world with congratulations. So we have been able to add a very nice company to our portfolio. Now, where will this all lead us for the year 2020? It is clear that 2020 is a year, but also our results will be impacted by corona. But I believe that precisely such a special and exceptional year 2020 with corona has demonstrated the soundness and strength of the business model of Akkermans and van Haaren. Because yes, our results in 2020 will be somewhat lower, but we announced that the second half of the year would be quite strong and much better than the first semester. We have a policy based on a strong balance sheet and low debt, and that has allowed us, in these exceptional circumstances, to not have to urgently repair the balance sheet. On the contrary, we had a very comfortable cash position of 800 million on June 30, and over the full year 2020, although it's not entirely over yet, I want to be a bit cautious, but we will have invested over 100 million in new initiatives and in strengthening the existing participations we already have in the portfolio. That concludes my presentation. If there are any questions, please feel free to ask.
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Host40:09
Hi Tom, thank you for the presentation. I think it was very good. I have maybe also... you run it out? We all still together? What can you... or that can still be crazy? That can still be today. I'll add a wing? No, I'll add that later.
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Co-Panelist40:30
Now, the world is in an exponential transformation. Despite the pessimistic view of the changing world, the policy associated with single globalization, political instability, and destruction due to technology, climate change, geopolitical tensions, and natural resources, the main solution for the challenges it brings is to address the challenges and renew the service for your time. It stands out from the masses. I prefer to look at the world in an optimistic way, and I really want to make a contribution. So I have the vision of a company that creates a better future for all by creating sustainable growth. For this reason, we invest in companies based on long-term partnerships. Our focus is on innovation and drive, and we switch from active ownership to an open mindset. For more than fifty years, we have been active in running the world. We have a global vision of growing environmental consciousness, sustainable projects and services, in the podium of life. We are active in five core industries: marine engineering and contracting, ranging from dredging to offshore construction, new energy, and deep sea minerals. Private banking for effective asset management, and we focus on two popular professions: real estate. Effective in real estate development to asset management, and senior care and assisted living providing help services. Energy resources, our main focus is on sustainable tropical agriculture and growth capital, where we serve the field with capital to families and for the stream competitive position and high growth. The family is renewed but he always remained... fundamentals overturned. This is about people.
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Host43:02
There are quite a few questions received, many questions that overlap a bit, so I'll try to combine them here and there. Let me start with Deme CV, and let's say a common question is how you look at the increasing competition from Chinese dredgers and perhaps a bit about the recapitalization you did of IHC in the Netherlands.
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Co-Panelist43:30
Yes, we see that as being of a completely different order. I will focus on IHC ships, but they are of a completely different order than what we are doing with Deme CV. I think the world, as I indicated at the beginning, is becoming more and more difficult globally. On the one hand, there are certain markets in the world that are becoming more difficult to access. There has always been a significant dredging capacity in China, historically concentrated or active in its own domestic market. We indeed see that in recent years they are also expanding into our traditional markets. Yes, we regularly compete with Chinese competition on certain bids, that's true. On the other hand, I think we should not be overly concerned about that. I indicated in the presentation a few times that Deme is very content and very deliberately continuing to innovate and invest. It is clear that in terms of technology, I think our company is better positioned than a number of Western competitors, but certainly also than the Chinese competitor. So that is an area where Deme distinguishes itself. This competition is in its diversification. Deme today is much more than just a dredging company. Looking at the last 15 years, we have built a leading position worldwide in the installation of offshore wind farms. That is something that, in my opinion, is not yet the case with Chinese companies today. And that ensures that, although we will get more competition over time, most other parties have seen that this is an interesting market. The potential increases. What we see is that on the one hand there is more competition, but on the other hand the market is also growing strongly. I will present that Deme is currently building a ship specifically for the Taiwanese and Asian market. With the new administration in the United States, we might also be able to look that way faster than before. So where offshore wind was previously a very strong European and even Northwest European phenomenon, it is now expanding all over the world. Okay, as for the recapitalization of IHC, we contributed a small part. At that time, IHC was going through difficult financial times. There were five ships under construction at GCN, and those ships were ordered because there were contracts and work for them. It was important that there would be continuity so that those ships could be delivered. I referred earlier to the Spartacus, the most powerful cutter that is under construction. They need that ship to execute the 4 billion backlog I mentioned. Yes, of course.
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Host46:10
Okay, good, that was a clear answer. Perhaps the next question is about something that has been in the news recently. I see you come back to it around Ieper? The recent changes in export duties imposed by the Indonesian government. Can you elaborate on that? It has surprised the market, I note, and it certainly surprised Sipef. We'll have to see what the effect will be in the long term.
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Co-Panelist46:58
I think the direct reason for that tax is the fact that the difference between the price of crude oil and palm oil has become too large. That is important in Indonesia because they have a program of mandatory blending of palm oil for biodiesel applications. As the price difference between the two becomes too large, the government has to contribute more. That fund was empty, so they found a solution by increasing the tax. I understand that there has been a reaction in Indonesia, also from local producers. So we will see what eventually happens. But it is clear that when an element like this higher tax comes out of the blue, it has a short-term impact on profitability. We will have to see how that translates into prices and margins. Perhaps it has to do with the fact that the price has risen quite strongly recently. We will also have to see in the long term how this affects the total production volumes. Some people may produce less or be less interested in producing. This is a pity. In the short term, it clearly takes away part of the value of Sipef. So we hope that at least some of it can be recovered. Then we will have to see in the longer term. But we are used to investing for the long term, and we have seen in Indonesia before that taxes are raised and then lowered again. So we are following this closely. We will not change our positions in the very short term because of such an element.
H
Host49:10
Now perhaps a more thematic question. People sometimes say that Akkermans & van Haaren is about traditional activities: dredging, banking, real estate, older sectors. But everything is undergoing digital transformation. People wonder how Akkermans & van Haaren deals with that. How do you handle that? How do you jump into the future with those new trends that certainly have a lasting impact on the world?
C
Co-Panelist49:43
We deal with that very intensively. But I find it interesting that you say 'old sectors'. No, I mean the more traditional ones, but innovation is certainly present within those sectors. I know few companies that are as high-tech as Deme, but that is obvious when developing new ships and using artificial intelligence to improve production results and so on. So I think you can easily imagine that. But also in our banks, you mention banks as traditional, and that may be so, but for the people who use the services, they will be convinced that in terms of technology, they are second to none compared to many other up-and-coming new situations. So it is not because a company has a certain size and history that it cannot be very intensively involved in searching for new technological applications. That is actually the case throughout our entire portfolio, and certainly also in the companies that are traditionally seen as older sectors. Yes, yes, that is a risk for all in transformation. You see it in the portfolio of Deme, the new things they do. Perhaps you have seen it, I mentioned at the end of the presentation that we also specifically invested in a number of more technology-driven companies. Let me start with the last one: OMP is supply chain software, which is truly high-tech, but also the Emmer, the Indigo, and the bioscience companies are all purely technology-driven. And is that not what you believe? That you are more directly present in the future? Or now, innovation is happening within the companies, but as we said, it is a strategy that we want to further develop. We will do this directly when we find the right opportunities, but equally important, or even more important given the size, is that within our existing portfolio, initiatives are taken and supported.
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Host52:18
Okay, thank you for that. Perhaps another question about the bank division. They are indeed not traditional banks, but also asset managers, and they fall under the ECB's banking regulations, which requested that no dividends be paid this year. Now, normally tomorrow there is another ECB meeting, so we might get more information. Suppose that restrictions remain or that there is a limited payout, could this have an impact on the dividend policy of Akkermans & van Haaren because that cash flow would be reduced?
C
Co-Panelist53:10
The value will of course remain in the group. It is difficult to anticipate what will be decided. I can only say that in 2020, in March when the corona crisis first hit, we said we would wait on the dividend. Eventually last month we proceeded to pay a dividend of 7 million to our shareholders, even though the banks were not allowed to pay dividends this year. But I think that with the portfolio we have, the depth of the portfolio, the financial resources we have, we felt it was important to give that signal, also because our results were there. It is true that the banks make an important contribution to the dividend, so it makes it easier for us to pay a dividend. We will have to see what the future brings. I think it is premature to make big statements now. I can only say that since our company Akkermans has been listed on the stock exchange, the dividend has never been cut or reduced, and only two or three times it was maintained, and in all other years we were able to increase the dividend. So we are very aware of the importance to both individual small shareholders and institutional shareholders. Whatever the ECB decides, we will hear. I can only say that in the meantime, the ratios of our banks only strengthen. I think at Delen Private Bank we are approaching 40% equity. That is very strong, and you will hardly find stronger. So perhaps if the restriction remains, there will come a time when our regulator also shows understanding. Yes, that is also a possibility. You see two very strong banks.
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Host54:40
I see that time is running out. Is there a final thought you would like to give to investors about why it is attractive to invest in Akkermans & van Haaren now?
C
Co-Panelist55:26
Well, I have done well earlier and from that, Isabel and the discount. I have all respect for that, and that is the work that analysts have to do, and they should keep doing it. We are happy with every interest and every analyst that covers the stock. But I would hope that the people who watched tonight will also remember the chart of the buildup of value and equity year after year after year. Because our portfolio, I think, is more than just a sum of a number of lines and a discount. It is also the ability to guarantee a return from such a portfolio, often realizing the minimum. I must say that. Well, I think that perhaps even more important is the capacity to do that, maybe even more important than the discount. We are here in one way or another that can be calculated.
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Host56:25
Okay, that is very clear. Thank you, Tom, thank you for this. I would say the presentations will be sent out so that investors can look at them in more depth. If there are any more questions, you can... (garbled) Thank you very much and have a nice evening.
Thank you. I would like to welcome our next speaker, and that is Kristof Capelle.
Kristof, nice to meet you. I will now give the floor to you. I want to say to the speakers... (some instructions) ... they say Kristof, begin.
K
Kristof Capelle57:09
Good evening, dear Bolero investors. It is a great honor and pleasure for me to take you through the Gimv story tonight. I understand that many of you are present, and thank you for your interest. Also thanks to Bolero for making this event possible and inviting us. What do we stand for? We have been in existence for 40 years this year, and when creating our annual report, we thought about what are the core concepts we need to look at when we talk about Gimv. You see them here: these are the three core concepts on our 40-year annual report: entrepreneurship, perseverance, and looking ahead. Let me briefly explain. Entrepreneurship: Gimv seeks out strong entrepreneurs to partner with them and build a growth story. That is the core of our method, what Gimv stands for. It is together with those strong entrepreneurs that we can create value for them and for the Gimv shareholder. It doesn't always go smoothly, hence perseverance. Together with the entrepreneur, we must persevere. In all our investments, we sometimes encounter problems and challenges, and then it is important not to give up but to continue supporting our entrepreneurs and investments towards a further growth story. Looking ahead is very important, especially today. At Gimv, we are forward-looking optimists. We look at innovative stories, we look at growth potential. From the strength of a certain company, we want to look at what it can further mean for growth and value. So looking ahead is something we do daily, not looking back but looking forward. These three core concepts summarize what Gimv stands for.
Now I will go into the numbers and details. Looking at what Gimv has meant over the past 40 years, it comes down to us being a company builder. 'Building leading companies' is our slogan, and we have made that true for almost 40 years. Here are a number of companies that are very well known to you, and we are very proud to have been able to contribute to this story and strong performance. But we don't look back too much, so we will stop looking back from now on. From now on, we look forward. What is Gimv today? Gimv is a company with 2 billion under management, of which 1.15 billion invested in portfolio. We are active in four countries, but we have no regional organization. We have an organization based on what we call investment platforms. They are listed here: Connected Consumer, Health and Care, Smart Industries, and Sustainable Cities. Seven years ago, we consciously made the choice to move away from a regional approach and to look at these four platforms. Platforms that try to detect trends in what is happening in the world and how we can capitalize on them through our investments. This ensures strong specialization of our teams. It ensures a different dialogue with the entrepreneur than if you look purely from a country or product approach. I have a portfolio of 1.14 billion invested today in 55 companies. So our portfolio today consists of 55 companies. I will come back to that later. Those companies together realize a turnover of 2.6 billion and employ 14,000 people today. Here you see our 50 companies. Some names may be familiar to you, others not. But we hope that within these 50 companies, there are certainly a number that we can take with us as beautiful, well-known growth stories in ten years at our 50th anniversary. Rather than saying too much about who we are, we like to show who we are by what we do. Hence, I would like to look at some of our more recent investments with you and also pause at some recently realized success stories.
Telefix is a new investment within the Gimv family, an investment we were able to announce with great pride this summer. It was also the most important investment on the Gimv balance sheet in Gimv's existence. Telefix is a Belgian company, a Flemish company active in modern communication solutions. They do this in a whole range of sectors. You see a number here: everything related to transport, but also in the healthcare sector and conferencing systems. They are actually world market leaders in some segments. This is a company that again starts from innovation, from technological strength. It is a manufacturing company in Belgium, something we should be proud of. It can use its global leadership in certain segments to look for further growth through targeted acquisitions. A new company you will hear more about. Another company I would like to mention is Cegeka. Cegeka is a company active in IT services, also one of our larger participations. We have been invested in Cegeka for three or four years now, and we see a very strong ambition among the people at Cegeka to continue growing. In today's times of digitalization, it is logical that Cegeka can continue to grow through the interest of many companies in a thorough digitalization project. So organic growth is supported by this trend, but at the same time, Cegeka is also looking at acquisitions in Europe to continue growing. A very nice company, probably already known to many of you, and it will mean a lot in the future. A completely different activity, but also one of the other large ones today, is Biotalys. Biotalys is one of our more early-stage investments in biotechnology, an activity where Gimv has been present for a very long time and has had much success. Biotalys is active in seeking biological solutions to make crops more resistant to certain diseases and fungi. They do this in a biological way, which is a very strong difference from the current techniques used, which are mainly chemical. This can really make a difference in improving crops and so on. This is a company with very strong technology, and you will undoubtedly hear much more about it in the coming years. So these are three strong names, strong companies, across a very different palette of activities in our portfolio.
New investments are something we seek, but more and more we also look from our existing portfolio through what we call 'buy and build'. That is essentially seeking, from the strength of the existing portfolio, to grow a portfolio company further through acquisitions. 'Buy and build' acquisitions: here are some examples in the healthcare sector. Biolang is a company in northwest France, actually a group of laboratories, test laboratories. I need not hide that this is a very successful activity today. But also within this activity, we are looking for further acquisition opportunities, and we recently made an important acquisition with the investment in Bio Océan. This company still has the ambition to grow further through targeted acquisitions in the region where it is active. Something completely different: GP and set is a chain of dentists we are building in Germany. Today, 11 dental practices; last year there was one. So we have already covered a nice growth trajectory, and there too the ambition is to grow further through buy and build. So new investments, making investments grow through targeted acquisitions, and thirdly, an important phase at Gimv: the exit story. Gimv is an investor that looks at rotation in its portfolio. We stand in the company, we guide it in its growth, we build it into a larger company together with management, very important. But at a certain point, we also realize that added value through an exit. And this year was an exceptional year, characterized by two very important exits that also make a very important contribution to Gimv's result. First example: Contralood. Contralood is a Flemish company active in pooling plastic pallets. The majority of pallets today are still wooden pallets that are used once and then destroyed. Contralood looks at circular reuse of those pallets. Very active in the food and pharma sectors, it has had a nice growth this year as well, following a very strong growth trajectory over the past six years. It has now become a European leader in its activities, and through the acquisition by Tosca, an American company, they will be able to develop further on a global scale. A story that has grown nicely within the portfolio, and we were able to realize a very nice return. The most recent exit story, dating from last week, is the sale of our largest participation on the balance sheet: Itho Daalderop. Itho Daalderop is a Dutch company active in everything related to climate-neutral living in residential construction. They have evolved from a product company to a solution-oriented company and offer for residential construction projects the total solution for an energy-neutral way of living. They do this through a combination of hardware and services. It has grown fantastically since our entry, doubled in turnover, and further expanded in its activities. We were able to sell it last week with great success, and again, like Contralood, a nice contribution to our result compared to both the last valuation and the investment cost. So these are the three phases: a number of investments in the portfolio, a number of buy-and-build activities in the portfolio, and a number of nice exits. The common thread through all these companies is growth in a sustainable way.
Some figures about Gimv itself. This is the evolution of our portfolio over the past ten years. You see that it comes down to a quasi-doubling from just under 600 million to 1.14 billion over 10 years. At the same time, you see that the number of companies has decreased from 92 to 55. In other words, Gimv is looking for larger tickets, for more impact, both in terms of figures and in terms of activities compared to what we did ten years ago. So today, the average investment ticket is around 20 million. That is one element. Another element is that we have a young portfolio: 80% of all our investments were made in the last four years. In other words, there is still a way to go in terms of value creation, but that potential is also there. It is not that today we have a large part of our portfolio ready to sell tomorrow. There is interest in companies in our portfolio, but with a significant part of our portfolio, there is still future potential and trajectories to follow.
The split of our portfolio: I have spoken about the four platforms: Connected Consumer, Health and Care, Smart Industries, Sustainable Cities, but also geographically. Let me show you that. You see a very diversified portfolio, very different activities, different sectors, different stages of development that the companies are in today. Also geographically, there is a nice spread across the four countries where we have our own offices.
Let me briefly pause at the past half year. Gimv closes in March, so the figures we show here for our first half year cover the period April to September. That was of course a very interesting and exceptional period, so I would like to explain what that meant for Gimv. Briefly on the figures: I will go into more detail on the underlying performance later. The portfolio grew by 12%, and we were able to invest more than 100 million euros in the first half year. We have an annual target of at least 200 million euros of new money to put to work. For the first six months, we were able to realize that target. At the same time, and this is at least as important, Gimv today has the financial strength to continue. We issued a long-term bond last year, raising 250 million in cash. We have a liquidity position of more than 300 million today. We have an unused credit line of 200 million. Together, that gives Gimv an investment capacity of more than 500 million today. In other words, both in supporting our portfolio, in further building our portfolio, and in seeking new investment opportunities, we are ready for the future financially.
And then of course we have COVID. It has an impact, we won't deny that. But I would like to point out that the impact is still relatively mild, and that throughout the crisis we have continuously received encouraging news from our portfolio companies. Briefly, our portfolio return target is 15% on an annual basis. We closed in March, which was the worst time regarding the impact of market valuations on our portfolio. The dip in the market in March translated into the unrealized result last year. But the recovery is already clearly noticeable for the first six months, with a return of 12%. And you see that in the years before, we were able to exceed our 15% portfolio return target each time.
Let me briefly pause at the performance of our companies and how we have seen them evolve over the past year. These are the actuals, both in terms of turnover and EBITDA, for 2019. I mentioned the figures: 2.6 billion turnover, about 270 million EBITDA. We saw that the budget ambitions of our entire portfolio were very high for 2020. The first block you see are the budgets we received from the management of all our portfolio companies, with growth of both turnover and profitability of more than 10%. The unfortunate part of the story over the past few months is that in January and February we saw that our companies were on track to achieve that. We even saw in a large part of our...
The portfolio companies were performing above budget. Then in March, something happened naturally, and we immediately sat down with the entire management of Gimv and all our investment managers. We immediately contacted all our portfolio companies to ensure they could continue operations as much as possible, keep their personnel safe in terms of health, and also secure a sufficiently strong financial position. That was the first action in March, April, and May.
Then in June, we asked the first management of our portfolio companies for their estimate for the full year. That resulted in these figures: compared to 2009, minus 2% in terms of profitability, minus 10%. We repeated that exercise in September, and we saw for the first time that it started to improve. Revenue became slightly positive compared to last year, and we saw encouraging signals. That gave us a positive feeling that the impact of COVID on our entire portfolio is relatively mild overall. We also see that when looking at the top 20 of our portfolio companies, which together represent about three-quarters of our portfolio, 13 of the 20 largest companies expect an increase in revenue in absolute terms this year. That gives us a comfortable feeling, meaning we are succeeding in continuing growth for a significant part of our companies.
If we translate that briefly to the four platforms—and I hope that is sufficiently readable on your screen—I would like to highlight the underlying developments. In Connected Consumer, we see the most negative impact today. A number of companies have been forced to close. We are invested in Burger King, a hamburger chain that was closed for a few months, and in La Croissanterie, a chain of sandwich shops in France that also closed. The impact is significant. If there is a segment or platform within our activities where we have seen the strongest impact, it is Consumer. In Health and Care, it is positive everywhere. A number of companies within that platform are performing even above budget. So we see a good impact there. Smart Industries is a mixed story. On one hand, we have portfolio companies in the automotive sector that face challenges, not only due to COVID but also the electrification of the car fleet and the slowdown in growth in Asia. On the other hand, within Smart Industries, we have companies like Cegeka and Televic, technologically innovative companies, and some software companies that are doing very well. So it's a dual story. Finally, Sustainable Cities are mainly companies active in energy solutions and logistics. There we see a neutral impact, but a number of companies have performed very well in the past months. So this gives us some confidence in how we see performance today and how we are dealing with COVID.
Return for shareholders. We did an analysis over the past fifteen years. Why fifteen years? Because it is a sufficiently long term to look at, and it covers two investment cycles and includes the impact of two global crises. Over that period, the Gimv shareholder realized a compound return of 8%. Another figure I would like to mention is that over the past fifteen years, we have paid out more than 1 billion euros in dividends. In other words, Gimv has paid out itself entirely to shareholders and has created a new portfolio of 1.15 billion euros with growth potential for the future. Where does that return come from? That is very important for us. It comes for more than 80% from growth. We need to read this graph: it compares our exits over the past five years—how much money we invested and how much cash came back. Then we analyzed the elements of value creation, and we see that growth in revenue and profitability accounts for more than 80% of the realized portfolio return. That confirms our strategy and our value creation approach in partnership with entrepreneurs.
Of course, we have to talk about ESG. It is very clear that this will be a leading theme for Gimv as an investment company in the coming years, and it already is today. I would like to briefly explain this. When we look at ESG at Gimv, we split it into two important aspects. First, Gimv must be a responsible company. We must consider our impact on environmental, social, and governance aspects of our operations. Those are things that are very important to us and that we prioritize daily. But at least as important, and probably more important, is that Gimv, from an ESG approach, can also be a responsible investor. Our four platforms, as shown here, are already linked to several of the United Nations Sustainable Development Goals. By choosing these platforms, it is clear that they also aim for societal improvements. At the same time, I want to mention that ESG is an integral part of our investment approach and strategy. It starts with screening, and I want to emphasize that it is certainly not only negative screening. It's not just about what we should not do because of ESG. No, we also look at which companies have opportunities to create value based on sustainable development. We do that in the research before we invest, and we also do it once we are invested through active shareholding. Both on our website and in this presentation, you can see a number of examples of companies and how they deal with energy and how we further develop that. There are some examples here, and on our website you will find more.
That brings me to the conclusions of my presentation. In the current times, it is clear that we have arranged support for our companies to help them get through this crisis. We engage with them to get through this crisis. We support them, and we will intervene when necessary. Let me make that concrete. Today, our financial intervention in our 55 companies is still limited to an amount lower than 5 million euros. When you compare that to a portfolio value of more than 1 billion, you see that the need for financial intervention today is still very limited. That also has to do with the resilience of our portfolio. On the contrary, we are even looking more at opportunities to accelerate. Hence the 'Excel' I mentioned and the 'buy and build' strategy. We are looking at that from our portfolio. We have a solid balance sheet, as I mentioned earlier. We are strong financially and in terms of portfolio. From that strength, we can continue to build for the future. We are continuously proactive to ensure our investment capacity. We do that in a proactive way. Our bond issuance last year of 250 million euros was an example. But we continue to be proactive in the current circumstances. Our sustainable partner model, building growth and value creation with entrepreneurs, together with the specialized teams we have in-house—our investment managers, experienced people who can look internationally—that model has shown its success through the previous crisis. And for future value creation, we are convinced we can continue to deliver. This is my story about Gimv. I am happy to listen to questions from the audience.
H
Host1:22:58
Then Kristof, of course, questions have come in. Perhaps the first one was a general question: how do you look at 2021 and 2022 as a private equity investment company, both in terms of new opportunities and also possible exits? And whether there might be a different view on opportunities from the portfolio and indirectly via the buy-and-build strategy.
K
Kristof Capelle1:23:26
There are many aspects to that question. 2021 and 2022 will be a very interesting period. We have seen what happened this year. We all hope that the recovery will start in 2021. But the story is not over. Many companies today may have some activities on hold, which also allows you to look at certain cost aspects on a more variable basis. There has also been government support in all the countries where we are active. When the recovery starts to pick up, we will have to be ready to support those companies, for example, in working capital. It may be that as companies resume activities, they need working capital that banks may not fully replace from day one. We will look at what we can do for our portfolio companies. Another story is that for some companies, the solvency position may need to be strengthened. So for a certain number of companies, we need to see how they stand relative to their bank financing. But what will be even more important for 2021 and the years after is that we will see strong performers in the recovery and how we can capitalize on that, either through new investments or, as Michiel rightly mentioned, through buy-and-build activities. So we will look for opportunities in all the different platforms and sectors where we are present. I want to emphasize that we are not going to favor a specific sector today. We think we can find strong performers and growth potential in all platforms. But it will be a special year, requiring a lot of reactivity. We expect many entrepreneurs to consider what the best future is for them, and we need to extend our feelers to be ready. So that is truly something. For us, the rotation of the portfolio is a continuous story. We had, for example, the successful exits of Itho and Daalderop. It's not that we are proactively putting a lot of our companies on display to exit, but what we do see is that there is a lot of quality in the market. The crisis today is totally different from 2009. There is a lot of liquidity in the market, not only from financial players but also from companies. Companies are sitting on a lot of cash and are looking for acquisitions and growth opportunities. We see a lot of interest from strong corporates in some of our portfolio companies. That is not a statement about when we will exit, but it is clear that the dynamics within our portfolio are very active.
H
Host1:26:25
Okay, thank you. Perhaps a follow-up question: you have made several successful exits in 2020 so far, in companies that are in full growth. What is the reason that you exit so early, if there is still more growth potential? Why not hold the participation longer to create more value?
K
Kristof Capelle1:26:52
Ultimately, we work with a rotation model. Every exit decision we make is a well-considered decision. It is a decision we take after looking at the trajectory of that company, how it has performed relative to the objectives we set at the beginning of our investment. If we assess that for the future development of the company, and also for realizing the value from our activity, the right combination exists, then we will make the decision to enable an exit. So we play an important role in the further growth and evolution of a company, but at a certain point we also have to assess what is the best phase of development for the company after our shareholding. That will be an important parameter for our exit decision. And of course, the financial aspect and value realization also play a role. You must also know that from that rotation, we generate resources that we can reinvest in other growth stories. Our motto is 'building leading companies.' When we receive cash, we can start again to build other leading companies. That is why we do not hold on to participations for very long term, but rather, from the realized value, we reinvest in new potential growth stories. Those 50 companies you see today are all companies that are not yet mega-known, but we hope to bring them to that level and then start again. So it is a continuous process of looking for beautiful growth stories, which we like to do and have done with some success for 40 years.
H
Host1:28:51
Okay, that is clear. On the portfolio of more than 50 companies, diversified, now linking to the latest news of the past weeks: Brexit is back on the agenda. Do you see an impact there? Some of your companies...
K
Kristof Capelle1:29:10
Regarding Brexit, what is striking is that today, in our portfolio, almost no entrepreneur feels comfortably worried about Brexit. Entrepreneurs are used to facing challenges, and they look for solutions. They look at how to deal with the new reality. But we don't see any entrepreneur today who is tearing their hair out because of Brexit. It is surprising to see that the impact seems really marginal based on current estimates. The future always remains uncertain, but it is reassuring to have a confirming answer.
H
Host1:30:00
On the dividend policy: Gimv is a solid dividend payer. Last year, the choice for a stock dividend. What are the prospects on that front?
K
Kristof Capelle1:30:12
Let me briefly repeat the dividend policy. The policy is: not to lower the dividend, except in very exceptional circumstances, and to increase it when possible in a sustainable way. Looking at our dividend record over the past 10-15 years, we have been consistent, even in the two critical periods I referred to. In March 2009, we closed our books, and in May 2009 we paid out a dividend. Last year, we had an important unrealized value loss in our portfolio leading to a negative result. This year, in our current fiscal year, which is the calendar year, we have maintained our dividend. So when you look at Gimv's dividend, you must consider it over a full investment cycle. That is an important point. The decision to offer a stock dividend and the possibility for our shareholders to reinvest the dividend in the further growth of Gimv via a capital increase is a choice that is made each year based on the prevailing circumstances. This year, given the very exceptional circumstances, we found it very appropriate to keep some of the cash outflow from the dividend payment within the company, to maintain financial strength for our companies and for future investment opportunities. We are very pleased that more than 60%, I think about two-thirds, of our shareholders chose to reinvest the dividend in Gimv. That confirms the confidence of our shareholders.
H
Host1:32:04
That is clear. Perhaps looking at the portfolio itself, overall it is very resilient. But are there specific companies where you say, 'Okay, here is a real problem, it will be difficult to create a turnaround'? Are there any cases where you are really worried?
K
Kristof Capelle1:32:28
Today, there is not a single company we are worried about that they will not survive this crisis. That is perhaps the first important finding. Of course, we have companies that are very impacted. Let me give an example I haven't mentioned yet: France Thermes, which has activities in France regarding thermal activity, essentially a combination of therapy and hotel facilities. For example, France Thermes in Vichy is in the portfolio. They have been closed, forced to close for a longer period. In that same period, they focused on preserving the financial strength of the company, which has a strong liquidity position. From that financial strength, they will now be able to restart when the thermal activities can open again. They will look at further opportunities for expansion. So very impacted, but we have hope that they can come out stronger. Another example is Kinepolis in our portfolio. The similarities are striking because France Thermes also owns all its real estate, so the cost base when closing activities is relatively limited. That is a company that is very impacted, but we have hope that it can emerge stronger. So it could also be a turn-around story.
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Host1:34:07
One more question about the life sciences position. You are one of the leaders in the capital round of Chinook Therapeutics, which is a quite well-known name in venture capital in life sciences. How do you build those relationships? They are quite a niche.
K
Kristof Capelle1:34:31
Thank you for saying that. Our life sciences activity is something we do from a very long-term track record that we have been able to build in that activity. It is an activity where you have to build a reputation. It is an ecosystem that is not geographically driven, but a global ecosystem. It is relatively limited, but you need to build a name. If you can build that name through the companies you have invested in—like Ablynx, Dov, UCB, Plan Genetics Systems in the past, and also today in the portfolio—from that track record, you create a reputation and get the chance to participate in strong syndicates. We do that primarily through our team, our life sciences team, which must continue to strengthen its network and, together with those syndicates, identify interesting investment opportunities. So it is a combination of track record, the right people with the right network, and that leads to a reputation that gives you the chance to do those investments. We did Chinook Therapeutics, and there was another recent investment in that context. Also in the recent past, we have made a number of exits. Today, that portfolio consists of about 10 to 12 of the 55 companies, which are in the earlier stages of development in life sciences, medtech, or technology. Agomab is also one of those examples.
H
Host1:36:03
Okay, thank you. Perhaps another question: How do you see the private equity market evolving in general? There is a lot of capital in the market today, as already mentioned. Will it become more difficult to make good investments?
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Kristof Capelle1:36:18
It is clear that the private equity market as a whole has attracted a lot of money in recent years. The current monetary policy leads to very low interest rates, and everyone has a hunger for return, a hunger for yield, so they look for other possibilities with their available funds. That has resulted in a lot of money flowing into the sector. Also, a number of family holding companies and others are developing their own private equity activities. So the market is very competitive. That is why we made the choice to work based on those platforms and not just come with a product: 'I am here with a buyout, I am here with growth capital, I am here with venture capital.' Instead, we go to the entrepreneur and look at what we can achieve with him or her in the future. In many cases, we already have a list of potential companies that could be attractive as future acquisition targets. We engage in dialogue with that entrepreneur about strategy and value creation. You can only do that in a credible way if you have built that experience within your team. We think we can make a difference, and we believe that, as shown by some investments we have been able to realize. We can make a difference against some of our competitors because, from the dialogue with the entrepreneur, we are sometimes chosen as a partner for future growth. In a very competitive market, that will not diminish. We do not expect a decrease in competition, and that also means that valuations and pricing of deals will remain at important levels. We try to make a difference. I can also say that in an investment committee at Gimv, the discussion about valuation usually comes at the very end of the discussion. We first look at the company, the management, the growth potential, the market position—what can it mean for our 'equity story' as we call it. Valuation is a determinant that comes at the end. It is not unimportant, but at the same time, I want to mention that it sometimes leads to us stepping away, as we have seen in recent months. We say, 'As far as we are concerned, we want to go this far and no further,' and then we lose deals, so to speak. But you can ask whether it is actually losing or rather a choice on our part not to go along with a certain valuation trajectory.
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Host1:39:10
That is a very clear vision. Thank you. I see we have a little time left. I asked Anton the same earlier: a final thought, a final vision to take the investors along. I checked earlier: for just under 50 euros you can buy a share of Gimv. What do you buy with a share of Gimv?
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Kristof Capelle1:39:26
I hope with a share of Gimv you actually buy 55 companies that have a common characteristic: growth potential. And we will try to realize that growth together with those companies. That is what Gimv stands for. For 50 euros, you have 55 growth companies in your hands, which you cannot buy on the stock exchange today, but you can buy Gimv. So that is the way to do it.
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Host1:39:50
Thank you very much. That is very well said. Thank you again for the presentation. The presentation will be online. If there are further questions, you can contact Kristof. Have a nice evening. Thank you very much for the invitation.
Okay, now we will welcome the CFO of GBL. I want to mention that this presentation is in English. Please use the portal to submit questions. During the presentation, you can also select to ask questions. Xavier, welcome.
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Xavier1:40:31
Thank you. Thank you for the invitation. I am pleased and honored to present GBL and the recent developments our group has experienced. I would like to thank Bolero and KBC for the invitation to speak tonight. Since I am currently busy with a number of important dossiers for GBL, I unfortunately did not have time to prepare to give this presentation in Dutch. So I will do it in English. I do invite you to remain a shareholder of GBL or to attend the next general meeting where I give the presentation in Dutch, as I do every year. Thank you for your patience. I will now switch to English. On the slide, the IMF has further lowered the forecast for the eurozone. GBL was at the time of the presentation, which is yesterday, with a market capitalization of about 8.7 billion euros. That was a starting point for how we look at our asset protection. Since the new management came into function in 2012, we have seen an asset protection of 20.7 billion euros. How is that? We have a significant liquidity profile. At the end of September, it was 5 billion euros. You might know that we sold our stake in NXP and put that into a cash position. That gave us a pro forma liquidity profile of 5.5 billion euros. Since the new management came into function, we have been very concerned about having too much leverage. In fact, we have a very conservative approach. We test the loan-to-value and basically the net financial position divided by the portfolio value. At the last time I checked, that was lower than 10%. That gives us a strong credit rating. Moody's and Standard & Poor's rate us A+ and A respectively. We have a buyback program. In fact, we have two buyback programs, one of which we recently finalized. The second one is ongoing. We have also executed a share buyback of 215 million euros. All these actions show our active approach. We are conservative in our approach. We manage the portfolio with a long-term view. We are active shareholders. We want to be active, not activist. We look at the strategy, the activities of the company, the programs for growth, and we also look at people. We want to have the right people in the board and in the management. We focus on the balance sheet, the leverage, and the ESG aspects. We have a significant rotation of activities since 2012. You might see why we have more than 13 billion euros of assets. Basically, we moved away from the utilities and energy sector and invested deeply in companies providing growth. We have a good example in Isw. Regarding the sectoral exposure, we are balanced across consumer goods, services, and also in healthcare. We have investments in global players. For example, we are a French-based company with a balanced geographical exposure. Here you can see a summary of the companies we are invested in. All these names are leaders in their sectors. We have a strong board and various committees. Now I will give you some highlights about the latest investments. We recently disclosed the acquisition of a 5% stake in a company. Another one of our latest investments was in a company called Caesar, a European leader in business process outsourcing and customer relationship management. This company was created in 2000 and has grown to become a French leader and now a global leader. We are very excited about their growth opportunities, especially in the US, where they are not yet present. The management team has a wonderful track record, and we are confident that we can help them finance their growth. Also, we have an alternative assets platform where we invest in private equity funds. We are an LP and co-investor in various funds. We are also active in Belgium and France. There is a lot of activity in Texas. We are very successful in investing in companies like Caesar.
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Host1:50:59
We'll show the level of the environment and the healthcare king establishes a website. A third of 15 million investments and a long site IKEA. In fact, from the field, the bare wood of the young spread activity. More to come.
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Kristof Capelle1:51:31
The new ferry to the most efficient, with C active tiers up to JBL. Although these clothing to 1020s wine activity, he wants to go into the tailor of bikes or of the points mentioned. He and those lessons from Zealand so that he has to cope with the cup. My team and these reaction have on the level of GBL. We were first on the sea to take care of all day and all the people and to ensure that sound. A half of the project, the amount and the method of investments and first point of attention for the house where access to pay attention to the liquidity profile for investments. You want them to be able to face the crisis, to face the consequences of the crisis. Therefore, our first focus was just on and sharing that the company will survive. And we have the ocean and the financial times to go to the prizes and get something like the first time in Martin Aprons. We got something like management meeting and free date. We have contacts with musicians over campaign site. At least, the first focus is on people, management, and youth. Sometimes the activity is across and the balance sheet can be filled some day. The campaigns are good for the crisis. And now they are in fact the seas. We need to be sure that every single company in the portfolio has the edge refinery. The code is obviously to ensure that the company will be in a better position after the crisis than before. And we are making choices about which activities can be undertaken. Regarding GBL, we simply white the other structure. In fact, GBL used to be held by a coach company in Switzerland with 50% of the capital. The park held it. Barclay held it with C investors. The Belgian fresh family and we are in fact testing the side. The structure is finalized. GBL uses 12-15% of floating, now 17% and rising. Sometimes people say that the treaty on angels' share is not sufficient to increase the floating to 50%. I think we are going in the right direction. So, bargaining the pest used to be a holding with just one investment in GBL. Now there are many more. Therefore, I got a culinary structure. Compared to the past, the first point is trying to read all the 20 checkpoints. We have a great perspective. You can see it all on the graph. We see the green maxima. For example, in October, we had a single-band into ears. We had a negative field. That's a great achievement. It helps that there are eight shows. The senior investor even in silicon 13 cm speakers. It's amazing the Kardashians and the golden market. Regarding active and politics, we claim that in March, just the beginning of the COVID crisis, we decided to have a high impact to increase the dividend. We granted 2.15 euros per share. That was a recurring dividend of 2.5%. Starting the crisis, we had a feeling. We had a very important point to fight. Therefore, we had a problem to distribute the dividend. In fact, currently, we have a treasure. For the first one, we have fully executed. The second one is fully executed. We speak about investments in 2020. We invested in February in a company. We have 15% in no way. We invested in the form of more into enthusiasm. We are also deeply invested in China capital. Coming back to the dividend policy, we decided to change the dividend policy. In the past, we used to surface the stable dividend. In fact, I feel over the last ten years, the dividend has been around 5% of the NAV. The impact will be that to do 2026 will be impacted by the fact that some companies had to cancel their dividend to finance their business. This is due to the fact that some of them have been awarded by stay greenpeace and are no longer allowed to distribute dividends in some countries. Basically, we revised our forecast and were able to announce a recovery. In July, we closed the books. We will distribute a dividend of 2.5 euros per share. We had a significant cash position. We think it's wonderful to be able to give some quality for the investor. We will distribute the green 75% and also when we speak about carnegie's to realize their language cash, it's very easy. The difference is that we see less interest. We decided to be very conservative. We will distribute what we get, maybe a little bit more or less. We can keep out of the money. We are focusing on value creation for the shareholder. We let go to invest in large campaigns. The reasoning is that we will distribute 75% and possibly an exceptional dividend based on school captions. In the future, we will speak about each one. We have a dry powder to be able to invest in a significant way. The profile shows the sum of the cash on the balance sheet plus the credit line we have with financial institutions. We are speaking about a buyback of 5% by the end of September. This is due to the fact that we have a high amount of nearly half of the family. The return basically is something that is rainbow dash. The return to shoulder makes sense. In fact, we have a goal of 50% of the index. The index also includes companies based in Switzerland. Our companies are coaching in Switzerland. The indicator shows that we are delivering more than the reference index. The overperformance of GBL was 35% over the period from 2012 to 2020. This is very significant. When speaking about GBL, the discount has increased significantly. If you look at the historical discount, it was reaching 30% and I remind you that the discount is the difference between the NAV of GBL and the share price. The discount has been more than 30% sometimes. This can be understood. First, the discipline is simplification of the structure. The love of R&D and technical elements hollowing the discount to increase the share price. In crisis times, the discount usually widens. My brother is fine. It means that if you buy GBL shares, you buy at a discount of 30%. That's a good deal. GBL decides to step up activities and ever employees who are deep in the Gulf. I am pretty convinced that the discount will never be good. Speaking about a very good strategy, for every single FCD, I can tell you that speaking about the investments, speaking about a few, the potential is great. Regarding 2020, that's it. Everyone stay in the training. Download yes yes. You are correct. For the presentation, we will create a section. The people at home, just get to the city channels. If you have questions, just make up. So this is 5. You so medifirst in regards to the stake in Moby. It was not officially closed by GBL. It was the debt that was written off. Maybe you can before the summer get information about the investment in the overall strategy of the bio. Thank you for raising. Basically, I flew to say that we did at the sewerage loss. It was free. Speaking about investments of around 100 million euros, how can you compare? It is not the same. The investments are ticking along. Lots of pauses for investment criteria. Speaking about the protein bar, it was a new sort. This is one of the best products if you take into account the years. I am just out of the SDS. The trash out and show that Moby was a great company. The best intentions. I know that like to talk about megatrends. The increase of new classes in the lat of countries and the rating. We are aiming for investments in Moby. It's a combination of sector and nutrition. These megatrends are perfect. The price is often volatile. The cost decrease has a 3D effect. The professor is close. He does what is needed. At what point in time, the export to write to shine. The risks are shared. People were thinking that the import into the country. The price was significant. We have been in this company for a long time but once again, the selection of multi-inn. The coffee crisis was a thumping. The company had a lot of advisors and makes the market since. I witnessed this. Why is it here for private? I assure you that for each ideal basis, he had an interview with GPL at that time. 10 years ago, the company was a normal one. A lot of things get high grade. You can disclose already. The company in extension at the crash course of the motor. The risk was sorry for 10 years ago. That's my example. The seven ex like give you the menu in the US. Yes, it was a new restless. That's why we are eating tree week. The company was on the radar. It was just aggression. At the time, we wanted to set up the studio. It works.
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Sophie2:13:15
The train is here in Dutch now. The company is a provider of nutrition. It has a lot of protein. It is a top international player. They can play on the long-term growth trend. Due to COVID, there was a temporary drop in demand because restaurants were closed. So there was an opportunity to step in. The systematic they use to involve many participations. We have an investment steam that constantly seeks opportunities. When there is a shift in the market, we can intervene immediately because we know the case. The second thing is that they are correct. Something is right. Now we get some questions about the song. This is a company that is in trouble at the moment. We expect a turnaround. Sure, your watch has senses. They have a fantastic just one person. The facts in Belgium are something like one. This is a super budget. You see something like quashy growth and care company. Notifications and we take the correct facilities. The quality is always correct. A little bit bat pod. The activity for X number of misrepresentation in Brazil. The market was disappointed by the company's performance. So, we left. A new chairman was appointed. New board members. It could be easy. We want to squeeze the lemon. The investor wants to see victims. The strategy is to focus on that. We are forced to finance and management. It might be on track. The work is in progress. It's fair to say that there are still tremors. We are working on it. You can be sure. History believes. We don't want to land. Thank you, Margo. It is your conquest. In general, it has a small impact on the portfolio value of GBL, about 1% of the underlying value. So, it can be easily handled. It will not have a big impact. But as an active shareholder, we take care in bad times to ensure a turnaround. It has had some setbacks. The video is now new. The management team is working hard to get back on track.
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Tom Amelie2:30:15
Furthermore, I want to add to that. The culture is important. Maybe one part of your question was about private assets. The founder was in relation with a French CFV. They wanted to invest to be early in China. The competition was high. The provider was the student angle. That's why it worked. The chef de cuisine. The question is that you will never see the investment risk. It was shorter than almost everyone. The new port is unique. So, in the future for further investments in private companies, we have seen the same story as with China. The opportunities come at the right time and place. There was competition for the stakes. But they are a long-term investor. Every company prefers long-term relationships. Just for you, maybe a visit to the studio. The CFO says that the inventory is watching. The marketing and ask if they put something. Investing in GBL and the discount offer. It is something. Knowing that the archaeology is very good higher than 2% for 30 years. Having a low leverage. The prices are very wet. The fiscal. The portfolio is attractive. It has a healthy balance sheet with opportunities for the future. Something to watch.
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Host2:33:06
Okay, the portfolio is attractive. It has a healthy balance sheet with opportunities for the future. Something to watch. Thank you very much. Everyone for the questions. The final answer is 3. Thank you everyone for being present. The presentations will be sent. If there are any questions, you can send them. We thank our three guest speakers: Sophie, Tom, and Kristof. Have a nice day. Thank you. Poor open been beleg online met inzicht.