Eurazeo NAV grows 16%(2)

The French firm’s 2012 annual results, released Wednesday, revealed an increase in investment capacity to more than €1bn and a continued acceleration in portfolio rotation.

Eurazeo, the Paris-listed group, on Wednesday revealed annual results that painted a positive year for the firm. 

The group recorded a 16 percent increase in net asset value in 2012, and a 4.2 percent growth in NAV between 31 December 2012 and 11 March 2013. 

This came despite a net loss of €198 million in 2012, which Philippe Audouin, chief financial officer, attributed to the impact of non-recurring events on the company’s results: portfolio company Accor sold Motel 6 to Blackstone last October, and Europcar, another company owned by the group, proceeded to a large scale refinancing last year. 

“Both were very good operations for the group: Accor reduced its debt by €780 million; Europcar reduced its annual financing costs by €34m and pushed maturity back from 2013 to 2017. But whilst the negative impact of these items is visible in our accounts straight away, the benefits of both moves will only be crystallised in the future,” Audouin told Private Equity International in an interview. 

The real focus should be on the net contribution of the group’s companies, he said, because the figure better reflects the prospects facing the portfolio. Companies contributed a net €238 million last year, a 73 percent increase from 2011. This progression amid difficult trading conditions was due to a number of factors, according to Audouin. 

Whilst we continue to look at opportunities with a very rigorous approach, we are willing to put money to work and are currently working on a number of new investments

Philippe Audouin

“Amongst our 21 companies, some are well-performing businesses located in resilient industries, whilst others are businesses with a strong potential for growth. This diversification has allowed our portfolio’s economic revenues to grow by 3.7 percent, outperforming eurozone growth by 4.3 percent.,” Audouin said.

He also saw the optimisation of operational teams and processes, as well as the improvement of overall debt levels for the group, as key in the portfolio’s improving fortune. Consolidated debt for the group was reduced by €300 million last year, allowing overall leverage to slump to 1.9x today from 3.2x three years ago. 

Another key point underlined by Audouin was a continued acceleration of portfolio rotation for the firm: sales totalled nearly €790 million between October 2012 and March 2013, exceeding total proceeds generated over the past three years. 

The firm divested €225 million worth of shares of electrical supplies distributor Rexel in February 2013. It also sold its entire stake in Edenred, a vouchers group, for €295 million in March. Both have boosted Eurazeo’s funds available for new investments to more than €1 billion, with a net cash position totalling €642 million. 

“Whilst we continue to look at opportunities with a very rigorous approach, we are willing to put this money to work and are currently working on a number of new investments. We’re also proposing a 5 percent increase in dividend distribution,” Audouin said. 

The firm has distributed dividends every year over the past decade, and held or increased their value even during the years of financial crisis, he observed. 

Shares in Eurazeo have yielded a 10-year total return of 98 percent, compared to 34 percent for the Paris’s stock exchange CAC 40 index, according to documentation released by the firm.