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Other investments
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1. Iberdrola
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(http://www.iberdrola.es)
Iberdrola is a major international player in the generation, distribution and commercialization of electricity and natural gas and is emerging as a global leader in renewable energy through its subsidiary Iberdrola Renovables. The group holds leading positions in Spain and Latin America and recently extended its activities to the United Kingdom and the United States through the acquisitions of Scottish Power (2007) and Energy East (2008) respectively.
In 2010, Iberdrola’s operating results rose despite a mixed economic environment that continued to improve gradually in terms of both demand and commodity prices. EBITDA and EBIT rose by 10.5% and 7.1% respectively from one year to the next, totalling EUR 7,528 million and EUR 4,830 million.
These performances reflected an overall increase in electricity generation (+ 8%) and a more favourable energy mix (hydraulic, nuclear, etc.). They were also the result of strict management of operating and structural costs as well as the solidity of regulated activities and renewable energy.
Net result, group share, stabilised at end 2010 at EUR 2,870 million (EUR 2,824 million in 2009). This profit was impacted by higher financial expenses related to the increase in average financial debt over the year and by a reduction in non-current elements. Recurring profit, group share, rose by 6% at EUR 2,582 million.
Net financial debt at end 2010 amounted to EUR 29.5 billion (EUR 28.5 billion at end 2009), representing 93% of shareholders’ equity (98% in 2009).
The group will propose to the General Meeting of shareholders to distribute a dividend balance of at least EUR 0.18 per share, bringing the total dividend payout per share for 2010 to a level at least equivalent to its 2009 level (EUR 0.326 per share). The contribution to GBL’s cash earnings for 2010 amounted to EUR 10.7 million (EUR 8.6 million in 2009), or the equivalent of 1.9%.
As a reminder, during the first half of 2007, GBL acquired a 3% stake in Iberdrola at a cost of nearly EUR 1.4 billion. This investment was partially divested at end 2007 and early 2008 at a sale price of more than EUR 1.3 billion, resulting in a total capital gain of EUR 184 million over these two years.
GBL’s residual investment in Iberdrola amounts to 0.6% of its capital and includes its investment of EUR 13 million in the group’s capital increase in June 2009 at the price of EUR 5.3 per share. This position was successively brought back to the investment’s market value at end 2008, end March 2009 and end June 2010, i.e. EUR 4.6 per share, leading to an impairment in its books of EUR 144 million, of which EUR 20 million in 2010. At end December 2010, Iberdrola share price was EUR 5.77. |
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2. Arkema
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(http://www.arkema.com)
Arkema group, created from the reorganization of Total’s Chemical business, operates in three business segments: Vinyl Products, Industrial Chemicals and Performance Products. It operates 80 industrial installations in Europe, North America and Asia, as well as commercial subsidiaries in every region of the world.
In an unprecedented economic context, Arkema’s turnover for 2009 decreased by 21% to EUR 4,444 million (EUR 5,633 million in 2008) under the double impact of lower volumes (- 13.9%) stemming from massive stock reductions by its customers and lower prices (- 7.7%) basically as a result of the evolution of the cost of raw materials and
of soda.
In this context, EBITDA totalled EUR 310 million (EUR 498 million in 2008) and profit margin reached 7.0% (8.8% in 2008), benefitting from a EUR 171 million reduction of fixed costs, over and above the initial target of EUR 110 million. Net income, group share, amounts to EUR - 172 million, resulting primarily from non-recurring restructuring costs.
Free cash flow generation of EUR 228 million over the year made it possible to reduce net financial debt to EUR 341 million (EUR 495 million at end 2008), i.e. 19% of shareholders’ equity (25% in 2008). Under these circumstances, the group proposes to pay a dividend of EUR 0.60 per share, unchanged from last year; its contribution to GBL’s cash earnings for 2009 comes to EUR 1.2 million.
Declaration of tresholds exceeded of 9 September 2011
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3. PAI Europe III
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GBL has paid up around 95% of its 2001 investment commitment of EUR 40 million in PAI (out of a total of EUR 1.8 billion). The sale of investments has allowed PAI to pay out to GBL cumulative distributions of EUR 83 million.
During 2010, PAI concluded a debt refinancing agreement with Yoplait and sold partially its investment in Chr Hansen on the Stock Exchange.
At 31 December 2010, the portfolio comprised five investments: Yoplait, GruppoCoin, FTE, Chr Hansen and Compagnie Européenne de Prévoyance. |
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4. Sagard Private Equity Partners
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In 2002, GBL agreed to invest in the initial Sagard fund (Sagard I) in the amount of EUR 50 million, out of a total commitment of EUR 536 million.
During financial year 2006, GBL invested in that fund’s successor, Sagard II, in the initial amount of EUR 150 million, reduced in 2009 to EUR 120 million.
Overall commitments to the Sagard II fund represent nearly EUR 810 million.
SITUATION OF SAGARD I FUND
The total amount paid out since the creation of the fund stands at EUR 47 million, virtually unchanged compared to end 2009.
On a cumulative basis, GBL has collected payouts of EUR 68 million from Sagard I.
The Sagard I portfolio comprised five investments at 31 December 2010: Hermes Metal Yudigar, Kiloutou, Souriau, Régie Linge Développement and Olympia.
SITUATION OF SAGARD II FUND
At 31 December 2010, GBL had invested a total of EUR 57 million in this fund.
In 2010, Sagard II disposed of its investment in SGD. It also invested in Ceva, the world’s eighth-ranked laboratory in the field of animal health, and reinforced its investment in Fläkt Woods group.
The Sagard II portfolio comprises four investments at end December 2010: Corialis, Vivarte, Fläkt Woods and Ceva. |
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5. Ergon Capital Partners (ECP)
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Ergon is a private equity fund set up in February 2005 by GBL in partnership with Parcom Capital, an ING subsidiary. These partners launched a second fund, Ergon Capital Partners II (ECP II), in December 2006. GBL decided in March 2010 to start up Ergon Capital Partners III (ECP III), which is entirely owned by GBL. ECP as a whole has investment capacity of EUR 775 million.
In 2010, ECP analysed some hundred potential investments and acquired through ECP III a controlling interest in ELITech Group, a first-rate independent player in the diagnostic medical market. ELITech produces and distributes in vitro diagnostic equipment, tests and reagents used primarily by medical and/or biological analysis laboratories. ELITech is active on 3 segments in the diagnostic market: biochemistry, microbiology and molecular biology. In addition to its industrial activity, the group distributes a number of products of third-party companies. It is comprised of 6 industrial sites in France, the United States, the Netherlands and Italy.
ECP’s portfolio continues its gradual upturn thanks to measures put in place in 2009 and continued in 2010 to cut costs and encourage cash generation and improved operating activities. Total debt of companies in the portfolio continued to decline significantly. One of the investments had to undergo a difficult restructuring process, namely Seves, world leader in the manufacture of glass insulators.
ECP and ECP II registered a consolidated accounting profit of EUR 33 million in 2010, with GBL’s share amounting to EUR 14 million. This result stemmed mainly from the change in the portfolio’s book valuation. ECP III registered a consolidated accounting loss of EUR 6 million in 2010. GBL group’s share in this loss, excluding the minority interest in ELITech group, amounted to EUR 3 million. ECP III’s consolidated accounting loss resulted mainly from expenses incurred with the acquisition of ELITech group.
At end December 2010, ECP’s portfolio comprised eight investments valued at EUR 328 million: La Gardenia, Seves, Stroili, Corialis, Joris Ide, Farmabios, Nicotra Gebhardt and ELITech. |
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