Wendel

Good morning ladies and gentlemen and thank you for standing by. Welcome to Vendor's full year 2024 results conference call and webcast. At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press star 1 1 on your telephone and wait for your name to be announced. You can also ask your questions on the webcast. Olivier Allot, Director of Financial Communication and Data Intelligence, will read them. I must advise you that this conference is being recorded today. I would now like to hand the conference over to Mr. Laurent Minot, Vendors Group CEO. Please go ahead, sir.

Thank you very much for this introduction. Good morning to everybody. Happy to have you on this call for the full year result 2024 of Vandell. I'm here with David Darmon and Benoit Driot. We will make the presentation, all three of us. We will be, as always, available to answer your questions also in the room. We have Olivier Allot, our investor relations officer, and Jérôme Michel in order to answer to your questions if any need. So let's start. I think the last year financial was a real achievement as our dual model is starting to deliver the growth we expected. Our fully diluted net asset value per share has reached €185.7 per share, which represents, if you take into account the dividend that was paid in 2024, 16.9% year-over-year value creation. Our principal investment activity contributed to 21.1 euro per share, and you will see that more in detail later on, thanks to a large part of the strong stock performance of Bureau Veritas. But also our new asset management activity contributed for the first time to 6 euro per share, thanks to the above expectation fee-related earnings generation and the strong growth of the AUM, 24% growth. As a result, we will propose a 4.7 euro per share dividend, up 17.5% compared to last year. And as I announced in our strategic roadmap, this dividend level takes into account the first partial integration of the asset management activity into Vendel in 2024. Keep in mind that this is just the beginning. And it will mechanically be higher in 25, thanks to the consolidation of a full year for IK and Monroe Capital. And Monroe, we expect to close transaction in Q1 this year. So, let's go to the next slide. And I think, as you see, we took some major steps to create a long-term value in 24. both on principal investment and asset management. Regarding principal investment, well, Bureau Veritas delivered strong results on the back of the quality of its LEED28 strategic plan, and this has been reflected in the performance of the share price, which has gone up 28% during the year. Our unlisted assets, and we'll come back in more detail on that, pursue their M&A activities to improve their medium, long-term value creation profile. But David will come back more in detail on that. As an investor, we've been very active in terms of portfolio rotation during the year with $2.3 billion of disposal and value creation or crystallization and the acquisition, as you know, on the other side of global decades to further improve our portfolio growth profile. And we strongly believe that global decades will bring a lot to us in the future. On the asset management side, 2024 has been a transformational year for Waddell and its shareholders. First, obviously, we had the closing of the IK transaction, which was initiated in 23, but really started and contributed to Waddell in this year. And it has been a very good start because the value of IKNR NAV has increased very significantly this year on the back of the fantastic growth it delivered above the estimated allowance in 2023. We continue to build our asset management platform, which we think will be a strong value creator in the future and with strong growth and level of dividend be distributed uh with the announcement of the acquisition of a new vertical in the private credit a monroe capital uh um will be the we expect to close the transaction in as i said q1 it will give our platform a critical mass and increase our exposure to the u.s economy These are really great achievements that improve Bandel's growth profile, increase our cash flow generation, and thus will increase our dividend payout to our shareholders. They are key to deliver, we think, stronger return to shareholders, and as I mentioned, it's just the beginning. Now, if you look to the transformation over the last two years, you see that today Vandel Group managed altogether 41 billion of assets, 41 billion pro forma, obviously of the acquisition of Monroe, which is made of 7.4 billion in the principal investment, excluding cash, and 33.4 billion of assets managed for third party in Europe and in the USA. Keep in mind that two years ago, we had only principal investment. So this is really a big, big change. At the end of the day, it, of course, gives Vandell a much more value-creative and cash-generative model, but it's also very interesting to note that our economic exposure today is made of three-thirds, one-third in Europe, one-third in the U.S., and one-third in the rest of the world. Now, let's go, because I think it's important that we understand well the drivers of the value creation in 2024. So we've created 27.4% euro per share in value during the year, which is, as I mentioned, 16.9% compared to the start of the year. This impressive growth is explained first by the strong growth of the listed assets by 29%, mainly due to better value of share price growth. It's interesting to note that we sold in 2014 1.1 billion euros of better value of shares, but thanks to the growth of its share price, its total value in our NAV is almost the same at the end of 2023. And on the other hand, our unlisted asset value for life basis, so without including global decades, which just came into the year, went down 7%. TPI, but we'll go back in more detail to that, and I will hand over to David for that. CPI had a very positive performance over the year, but Stahl, Acams, and mainly Scallion suffered overall from more difficult market conditions and volatile multiples. Our asset management GP value is strongly up by €6 per share in light of a very good performance of IKEA partners during the year 2024. Another element of the value creation or destruction is cost, financial results, and other elements. The impact is only one euro per share down this year, thanks to good control of cost, very positive carry, financial carry, and the positive impact of the dollar aging we have put in place at the time of the acquisition of Monroe Capital. In 2024, we bought back 92.5 million euros of shares, and that has created some value through accretion by our buyback, and that represents 1.4 euro per share of value accretion. So all of that leads to 27.4 euro per share, which includes 4 euro of dividend and 23.4 euro of the fully diluted NAV increase on the year. Now I pass over to David who will go into the detail of the principal investment performance and I will take back the lead to discuss about the asset management. David.

Thank you very much Laurent and good morning everyone. I am now on slide 8 where we're going to give you more details on the value creation on the principal investment you can see that over the year 2024, there was a plus 12.8% value creation from the principal investments. The value creation comes mainly from Bureau Veritas, as Laurent mentioned. It delivered an outstanding 2024 vintage, both from an operational point of view and on the stock market performance. Regarding the unlisted assets, the overall contribution to value creation was negative in 2024 with mixed performances. CPI performed very well, and contributed very positively. And so positively that CPI actually paid a 93 million euros dividend to Vendel early 2024. Regarding Stahl, Scagnon and Acamps, the contribution was negative over the course of the year as a reflection of those assets' performances and the multiples of their peers. And those offset the good performance from CPI, as Laura mentioned. Regarding Stahl, We value the company from the sale of its wet end division, which has reduced EBITDA in absolute value, without the full impact of the multiple re-rating we expect from this strategic refocus. We strongly believe that the new style that was presented during the investor day has now become a very attractive asset. I am now moving to slide 9, where you can see that the principal investment NAV was up 21.1 euros, led by the listed asset growth. As already mentioned, Bureau Veritas delivered an outstanding performance in 2024. The sales were up 6.4%, including a 10.2% organic growth. The profits were up 7.1%, and the margins are up 11 business points year-over-year. Bureau Veritas expects to deliver for the full year 2025 meet-to-high single-digit organic revenue growth and will show an improvement in adjusted operating margins at constant exchange rates. And also, the company announced a strong cash flow with cash conversion above 90%. We are very confident in the prospect of Bira Veritas, and we have been very involved in supporting the company in the definition of its Leap 28 strategic plans, which we fully support. Regarding Tarket, as of December 31st, 2024, it is valued according to its 20 days average share price end of 2024, which was 10.5 euros. As you saw, Tarket Participation, Tarket Controlling Shareholder, announced its intention to file an offer, followed by a squeeze-out on the target shares with an offer price of €16 per share, which is a fair version of target value, and thus we will use this price in our Q1 2025 NAV. I am now moving to slide 10, where you can see company by company, the private companies, I mean, the performance over the year. Regarding style, keep in mind that these figures are still including the wet-end division sales and EBITDA. On a NAV valuation standpoint, as I already mentioned, we did include the wet end. The positive sales growth despite market challenge that we saw in the automotive and luxury goods proved the resilience of the Stahl business model. The bid-down margin remains pretty strong at 22.2%, demonstrating a very effective cost control. 2024 was a transformation year for Stahl. It did become, over the year, a pure-play specialty coatings formulation and a radical change in its equity story. The sale of the wet and leather chemical division aligns with a strategic shift, and it's very worth emphasizing this transformational move. The performance of financials shows a stronger growth profile and an improved margin, which now stands at 23.7%. Regarding CPI, 2024 was another year of very strong performance, with revenue growth up plus 8.5%, and EBITDA up 7.8%. The company did maintain a high EBITDA margin at 49.3%, despite international expansion investments and some significant IT investments as well. Over Christmas, the company actually closed its first acquisition under Vandell's ownership, a small Norwegian leader in behavior intervention and training. Regarding ACAMS, 2024 had stable sales despite a very strong transformation in the company. The EBITDA margin went up 70 basis points, showing an effective cost management. 2024 was also a pivotal year for the company, a year of transformation under a new leadership and with some key investments in technology-driven growth. Regarding Scallion, you can see that the sales declined by 1.2%, reflecting a broader market slowdown, especially in the automotive in Europe and in the aeronautics. The EBITDA margin dropped by 60 basis points, mainly due to a lower utilization rate, and the market slowdown was partially offset by a strict SG&E control. The company had two acquisitions in 2024. One was Julin in Spain, and the other one was Manolo in Canada. Some very strategic and attractive targets, one in cybersecurity and the other one in high-end drone engineering software IT. So 2024 was a 27th year for Scalion as well, in a very tough market environment. We're working hard with the management to ensure that Scalion will fully benefit from the upcycle, building on the very strong OT business and an improving IT offering. Last, regarding global decades, you can see that the company enjoys a strong revenue growth, both organically and through M&A. The BIDA margin remains solid at 23.9% in line with our expectation. Early 2025, Global Decade will have three acquisitions in line with the management plan, and the M&A pipeline is still very strong. I hand over back the mic to Laurent for the rest of the presentation.