Wendel SE (FRA:WIS) (FY 2024) Earnings Call Highlights: Strong Growth in NAV and Dividend ...
Net Asset Value (NAV) per Share: EUR 185.7, representing a 16.9% year-over-year increase.
Dividend Proposal: EUR 4.7 per share, up 17.5% from the previous year.
Principal Investment Value Creation: EUR 21.1 per share, driven by Bureau Veritas' performance.
Asset Management Contribution: EUR 6 per share, with a 24% growth in Assets under Management (AuM).
Revenue: EUR 8.64 billion, a 13% increase from the previous year, with 8.4% organic growth.
Net Income Group Share: EUR 294 million, double the amount from 2023.
Cash Flow Conversion: Bureau Veritas reported cash conversion above 90%.
EBITDA Margin: CPI maintained a high EBITDA margin at 49.3%.
Stahl EBITDA Margin: 22.2%, with a proforma margin of 23.7% after strategic refocus.
Debt and Liquidity: LTV ratio at 7.2%, with liquidity of EUR 1.2 billion.
Share Buyback: EUR 92.5 million worth of shares repurchased, creating EUR 1.4 per share in value.
Warning! GuruFocus has detected 5 Warning Signs with FRA:WIS.
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Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Wendel SE (FRA:WIS) reported a 16.9% year-over-year increase in fully diluted net asset value per share, reaching EUR 185.7.
The company proposed a EUR 4.7 per share dividend, up 17.5% from the previous year, reflecting strong financial performance.
Bureau Veritas, a key asset, delivered a 28% increase in share price, contributing significantly to value creation.
The asset management segment showed strong growth, with assets under management increasing by 24% and contributing EUR 6 per share to value.
Wendel SE's strategic transformation over the past two years has resulted in managing EUR 41 billion in assets, diversifying its portfolio and increasing cash flow generation.
Some unlisted assets, such as Stahl, Scalian, and ACAMS, faced challenges due to difficult market conditions and volatile multiples, negatively impacting overall value creation.
The company's LTV ratio increased to 23% after the acquisition of Monroe, surpassing the S&P ceiling for its current rating.
Scalian experienced a 1.2% decline in sales and a drop in EBITDA margin due to market slowdowns in the automotive and aeronautics sectors.
Despite strong performance in some areas, the overall contribution from unlisted assets was negative in 2024.
The company faces a substantial discount to its net asset value, which management attributes to the need for sustained performance improvement.
Q: XR announced a buyback given the large discount to reach NEV. Why not make such a smart capital allocation move? A: Laurent Mignon, Chairman of the Executive Board, Group CEO, explained that while Wendel has conducted buybacks, which created value, the company focuses on long-term value creation through strategic investments in asset management. Share buybacks are part of their strategy but not the sole focus.
Q: The financial press disclosed that Puerto Rico could sell more champagne. Would you have a look at it and make a bid? A: Laurent Mignon stated that Wendel is not interested in investing in the retail and consumer business as they lack expertise in that area.
Q: Can you make any additional comments on the discussions between SGS and Bureau Veritas? A: Laurent Mignon confirmed that discussions between SGS and Bureau Veritas have ceased without an agreement. Wendel supports Bureau Veritas's strategic plan and its transformative growth ambitions.
Q: Are you concerned about potential changes in the carry interest tax scheme in the US for private equity industries? A: Laurent Mignon mentioned that Wendel is not exposed to this issue, so it is not a concern for them. Their exposure to the US is through companies like CPI and ACAMS, and Monroe Capital in private credit, where the impact of carry interest is smaller.
Q: There is still a substantial discount to NAV. How do you explain that and what are you going to do about it? A: Laurent Mignon emphasized that performance is the remedy to the discount. Wendel aims to improve asset performance and provide significant returns to shareholders through dividends and strategic investments. They focus on long-term value creation rather than short-term fixes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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