Earnings Call: H1 2021

Jul 29, 2021

Good morning and afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Vandel's 20 21 Half Year Trading Update Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today. I would now like to hand the conference over to Mr. Andre Francois Ponce, Vandell's CEO. Please go ahead, sir. Thank you very much. Ladies and gentlemen, this is Andre I'm here with David Darmond, the other member of the Executive Board and Deputy CEO Jerome Michels, Our Group CFO and Executive Vice President as well as our Investor Relations team, Olivier Leau and Lucille Rocque, welcome to the call. We'll present our half year trading update and take questions. First, we'll present the main items for the half, and then we'll get on with the dialogue. If you wish to ask questions, you can submit them directly through the web platform. You can use the telephone number you've been provided with as well. As a reminder, Hello. So I don't know if people hear us, but the line went dead, and we're waiting to hear that we actually have folks You are connected now. Please go ahead. Okay. Sorry for this brief interruption, Which is telecoms related, and you don't be hearing otherwise. So apologies. And I'm now on Slide 2, half year trading update, key figures. At the end of June, Wendell registered its highest NAV in the history of our company, an increase of roughly 19% since the beginning of the year and around 36% over the last 12 months. Our net asset value strongly benefited from improved performance and prospects of our unlisted companies and also from increased Valuations of comparable companies. Bureau Veritas, our largest investment, also contributed to leading our NAV to historical high. Consolidated sales are up 11.3 percent overall with strong organic growth across the portfolio companies with EBITDA growing as well across the board. Wendell LTV remains at the low level, 9% at the end of June, and most portfolio companies have very low leverage levels, especially for the unlisted companies. As already mentioned in the past, in spite of the COVID crisis, our companies kept on generating cash And reduced our net debt when not realizing external acquisitions. Moving to Slide 3. During the first half, We deployed EUR 260,000,000 of capital at Vadel, EUR 216,700,000 through target participation, EUR 18,000,000 in the Vanel Lab. In addition to these investments, we also bought back EUR 25,000,000 of our own shares in the first half. We increased our investment team with 5 new colleagues joining recently, including 3 investors With the experience or the background, 1 operating partner and an Expert in fund investment, VC fund investment. We signed the principles for responsible investment and decided to align our financial policy With our ESG commitments by integrating ESG targets into our revolving credit facility. At portfolio level, Bureau Vietas posted a strong first half and revised upwards its outlook for the full year 2021. At Stahl, Martin Heiberg started as the new CEO on July 1. Beginning in June, Constancia announced the closure of the acquisition of ProPak, a packaging producer located in Turkey and a leading player in the European packaging industry for snacks. IHS announced 2 acquisitions expanding its footprint in South America and the successful flip up of its bond debt Thus triggering 2 credit rating updates on its upgrades, I beg your pardon, on its senior unsecured notes, meaning credit updates by 2 agencies. Turning to Slide 4, the performance of group companies taken individually. I will start and David will take over for me. On the first slide, Slide 5, Bureviritas. Bureviritas published its first half twenty twenty one figures yesterday. It posted revenue of SEK 2,400,000,000, up 9.9 percent year on year and plus 14.3 percent organically, Benefiting from improving end markets across most businesses and the return to a more normal operating environment compared to H1 2020. More than half of the business portfolio, including Certification, Consumer Products, Buildings and Infrastructure, strongly recovered up 23.2 percent organically on average. Certification was the best performing activity, up 38.6% in H1. Consumer Products strongly returned to growth, up 23.4% in half 1, fueled by Asia, the resumption of product launches and helped by favorable comparables. Turning to sales in H1, also being more specific relative to 2019, They were up 4.1% on an organic basis, which is really what I look at is how we're doing versus 2019. I'm sure you do too. Adjusted operating profit increased by 75.3 percent to €378,200,000 The first half 2021 adjusted operating margin rose 5 83 basis points to 15.6%. Bureau Veritas continued to see a rising demand towards quality, safety, traceability and environmental stewardship, which perfectly positions the company for a new step forward in its Development. Through the BV green line of services and solutions dedicated to sustainability, Bureau Veritas is uniquely positioned to help its clients During the first half of twenty twenty one, Bureau Veritas resumed its targeted bolt on M and A activities, completing 4 transactions in strategic areas, representing around €25,000,000 in annualized revenues, with notably the acquisition of Secur BV, specialized in security testing, audit and cybersecurity, As well as Bradley Construction Management, a provider of construction management services for the renewable energy sector. BV's financial position remains strong with net financial debt to EBITDA ratio further reduced to 1.3 times from 2 times last year, its lowest level since the IPO of Bureau Veritas in 2007. And I now turn the mic to David. Thank you, Andre, and hi, everyone. Before I'm now on Slide 6. Before going into details of each private company performance, I would like to give you a quick and global overview of this 1st semester. Our private companies delivered outstanding results, highlighting the quality of the business model, management and team. We are really proud of being the controlling shareholder of companies which have been able to work the COVID storm Thanks so much, Agility. All our private assets delivered in H1 2021, EBITDA performances above H1 2019 And for most of them reaching record high levels of profitability with record low leverage. For Stantia, which has been strongly resilient during the crisis improved its margin. Promodry is beating its best performances quarter after quarter. STAAR, which has been able to keep its margin above 20% during the pandemic, Delivered in H1 2021 a record 26 percent EBITDA margin. And CPI, which was the hardest hit during the crisis during Tuzo lockdown, Already this 2019 levels of EBITDA. We are thrilled to see all the efforts deployed to be rewarded with such results. On Slide 7, regarding Constancia, you can see that H1 2021 sales totaled €752,100,000 Slightly up by 0.7% on an organic basis, driven by the first 3% organic growth in the consumer market, mainly due to a good performance in personal hygiene, coffee capsules and beverage, which was partially offset by the minus 5.7% decline In sales in the pharma industry, the activity was affected by lockdown induced mild flu and cold season and due to a very strong comparative period. The 1st 6 months of the 2021 period were also adversely impacted by minus 1.2% by unfavorable FX. Constancia renewed its efforts towards improving its profitability collecting a new cost reduction incentive program since the beginning of the year. Despite a negative total top line growth, EBITDA was up plus 1.8%, representing a 30 bps year on year margin increase to 13.1%. Significant increases across all raw material categories since the beginning of 2021 is likely to impact performance in the second half of twenty twenty one as there is usually a temporary time lag Between changes in raw material and adjusting prices to customers. At the end of June, net debt was at €477,200,000 The increase is due to the ProPak acquisition closed in June 2021. I'll come back on this on the next slide. The strong cash flow generation capacity combined with increased profitability resulted in leverage standing today at 2.2 LTM EBITDA. A new strategy called Vision 2025 has been prepared by Tim Dervat, our first year new CEO. This strategic roadmap refocuses priorities primarily towards boosting growth and profitability. This is predicated on both growth via acquisitions and internal improvement measures. It also implies a focus on sustainable products and in particular the EUC E Collision Solutions of Sustainable Products. Let's talk now about the acquisition of ProPaks that I just mentioned on Slide 8. On June 9, 2021, Constancia announced the closing of its Pro Pack acquisition, a packaging position located in Stusu in Turkey. The purchase Price is based on an EV, a certain price value of €120,000,000 representing an EBITDA loss of 6.4x 2020 actual EBITDA. ProPak is a leading player in the European packaging industry for the snacks market, operating out of one plant with approximately 360 employees and Confluence from Concert Flexibles Packaging Solutions portfolio. These significant acquisitions elevate Concert Flexibles to one of the leading players In the European snack market, this acquisition enhancement from Concha Flexibles presents in the growing spin packaging market segment. ProPak has delivered a very strong historical financial performance. It is highly complementary to Consulta Flexible's existing site in Turkey, adding flexo printing capabilities and access to the adjacent market segments. It significantly reinforces Constantia Flexibles position with the key customers in this market and furthermore increases potential for future business growth. I'm turning now on Slide 9 on Chromologina. During the first half of twenty twenty one, Chromologina sales totaled €370,700,000 Up 27.7 percent compared with H1 2020, which was heavily impacted by the 1st lockdown measures instituted in Europe. Compared with 2019, chromologie sales were up by 6.3%. Since H1 2020 lockdown, paint sales have bounced back significantly driven by strong demand from the end consumer, which made organic growth still positive in Q3 and Q4 2020. This trend continued into the first half of twenty twenty one Strong performances in all of Commodity's key geographies. Commodity's EBITDA was €72,900,000 in H1 2021, 80.4 percent reflecting the combined effect of a favorable base of comparison, a positive mix in terms of customers, Products and countries and a favorable price trend in addition to the cost saving measures that have been implemented. EBITDA margins stood at 19.7% Much higher than in 2019, demonstrating the positive trajectory driven by Prologist Management is by tension in raw material prices. The tensions in raw material prices have not yet had a significant impact on margin. In addition, structural cost reductions continued with savings achieved in various line items. As in 2020, the company reduced its already very low financial leverage by optimizing working capital In continuing to make use of factoring, the company's net debt was €110,300,000 as of June 2021 and the financial leverage ratio as defined in the bank documentation is now near 0 at 0.05 terms. Let's remind you that in May 2019 at the time of Promogy's debt renegotiation and Vanel's EUR 125,000,000 equity injection, Promogene received significant concessions from its lenders. Promogene is focusing its efforts on planning and managing operations amid a resurgence of this pandemic As well as pursuing the transformation plan it has launched since 2019 and implementing sources of value creation, It is also monitoring its supply chain closely, notably in tight material supplies and increases in the price of raw materials. Given its sound financial structure and the successful reorganization of the company, Promolgy is well positioned to look for potential bolt on asset issues. I'm turning on Slide 10 to talk about STAAR. STAAR's sales totaled €419,800,000 in H1 2021, Representing an increase of 32.5 percent over H1 2020 and 0.8% over H1 2019. Organic growth was 36% and foreign exchange rate fluctuation had a negative impact by minus 3.9%. After a challenging 2020, STAHL continued its recovery that started in Q3 2020, but accelerated since the end of 2020 despite disruptions in supply This was driven by a strong order book and broad based volume growth across almost all regions and end markets, in part due to restocking effects observed across several industries. Growth was particularly strong in Asia Pacific. In addition, Stal's Automotive business continued its good rebound. The restocking effect could ease labor in 2021, although timing even clearer. In 2020, thanks to the management focus on the resilient business model, STAHL took swift measures and quickly adjusted its fixed cost base to the market conditions. STAHL was still able to largely maintain this low level of fixed cost in the first half of twenty twenty one. Therefore, EBITDA for the half year totaled €109,300,000, translating it to a retail EBITDA margin of 26%. The full year EBITDA margin is expected to adjust to more normative levels in H2 2021. STAAR's net debt was €199,000,000 There's a EUR 46,000,000 reduction year to date and almost halving over the last 12 months. Leverage was reported at 0.96x EBITDA as of June 30, 2021. On March 11, 2021, STAHL announced the appointment of Martin Haybrook as the new CEO of STAHL. Martin Haybrook who joined STAHL. He started at STAHL on July 1. STAHL's sustainability efforts have been rewarded again in July with a gold rating from EcoVadis, placing it within the top 5% of companies assessed by EcoVadis. In 2020, STAHL has been awarded a silver award, so they are keeping and making good progress. STAHL's 2030 target is to maintain the EcoVale Score rating through continual improvement. Earlier this year, STAHL has taken another important step In its sustainable development strategy, after achieving certification for the highest level of the new VHC compliance For multiple performance coating products, the new Level 3 certification demonstrates STAHL's commitment to rigorous product viewership. I'm turning now to slide 11 to talk about CPI, Crisis Prevention Institute. CPI is a company which has been the most strongly impacted by the lockdowns last year in our group. Today's rebound demonstrates the underlying demand for this mission based company and the resilience of its business model. CPI recorded first half twenty twenty one revenue of $44,000,000 up 68.3 percent from H1 2020 and plus 8.3% versus the same period in 2019. Since Q4 2020, CPI has reported an upward revenue trajectory quarter to quarter With Q2 2021 revenue surpassing Q1 2020 figures by 38%, this continued improvement month to month And versus prior years is the result of several factors including higher customer engagement since March as training activity has increased with Lessening restrictions on travel and gathering, stabilizing overall certified instructor count, first half twenty twenty one new Certified instructor volume, which nearly doubled 2020 levels and continued mixed shift towards digital solutions for both new and Existing certified instructors. Loader material sales continue to hold a strong virtual presence with e learning delivery representing 35% of total lower material volumes. Of this plus 68% half year sales increase, Plus 5.6 percent was related to a purchase accounting adjustment to deferred revenue, which had an impact of minus $1,500,000 in H1 2020. This sales increase is also related to FX movements for plus 3.5% And for plus 59% for organic growth. CPI's activities will continue to benefit from the positive near term recovery trend in the market Amid accelerating vaccinations and warming weather, especially in the U. S, which are lessening restrictions around travel and gathering and driving a more usual environment for customers, especially in hospitals and school. Furthermore, CPI generated EBITDA of $20,500,000 representing an overall increase of +188 percent year on year. That's a pretty strong result. This result corresponds to a strong margin of 46.6% over the period Compared to H1 twenty nineteen, EBITDA is up plus 20% and margin has also increased by over 4 75 bps versus H1 2019. H1 EBITDA benefited primarily from the flow through of higher sales to earnings as well as effective cost management. It did benefit to a lesser extent from temporary timing differences related to marketing spend and delayed hires in sales and administrative rules. As of June 30, 2021, net debt totaled $333,600,000 or 7.86 times EBITDA as defined in CPI's loan documentation. Liquidity has increased to $24,500,000 in line with the company's total liquidity level at the time of the 2019 transaction. I'm now turning to slide 12 to talk about IHS Towers. As you probably already know in June IHS Towers Successfully split up its listed bonds, effectively expanding the bonds restricted group to include the IHS Holding Group, The feeling to upgrade from both NMC and Sitch on its clear unsecured notes. As a The company now reports on a quarterly basis its financial results on a fully consolidated scope. It will publish its Q2 2021 results next month. That's why we cannot yet update you on its first half results. You can find now a very granular financial information on the company's website. In Q1 2021, the company posted strong results with sales up 14.5% organically And adjusted EBITDA up 15.5 percent and a group EBITDA margin over 59% at 59.4%. IHS Towers has also been very active in terms of external growth with 2 additional acquisitions in South America, enhancing its portfolio diversification. On April 12, 2021, IHS Towers announced the acquisition of the Centennial Towers Brazilian and Colombian Tower Operations, bringing an additional 602 towers in Brazil and 217 towers in Colombia. In May 2021, IHS DOR announced it has entered into an agreement with TIM to acquire a controlling interest in its fiber operations, which will include select thin fiber assets and provide fiber optic infrastructure services as an open fiber network service provider. Let's move on to Slide 13 and talk about the VandaLab. Our VandaLab initiative is growing Moving forward with the hiring of Christopher Witherspoon to lead this activity on our behalf. In H1, We've been quite active with $40,000,000 newly committed to 4 different funds and EUR 80,000,000 of capital hold. The lab value in our NAV is today €130,000,000 and it has grown significantly with a 60% growth in NAV since March 2021. Most of this growth is following the IPO of an indirect portfolio company in 1 of our current for 2 years. As you know, we expect the van and lab to represent 5% to 10% of our NAV by 2024 through fund and direct to investment. Moving to Slide 14 to talk about Taked now. On July 15, 2021, We closed the offer initiated by Target Paribas Passions. We now held directly 56,300 1,463 shares, representing 85.89 percent of the shares. Since July 20, 2021 And as of July 28, 2021, Takeda Passi Passient increased its share in Takeda's capital to 88.4% including treasury shares. As a result, Randell has invested a total of €216,700,000 Total stake of 25.5 percent of Taked Participations capital. With the current level of holding as expected, Zaden will have 2 seats at target 30% board. Before giving the floor to Jerome, one more thing about another great results we can be proud of. On Slide 15, we can here see the evolution of our company's leverage throughout COVID, which is quite impressive as you can see. Despite this COVID crisis, our companies have been able to reduce dramatically the leverage ratio through strong increase of their EBITDA, But also thanks to cash generation profile. Chromology has virtually no more debt. STAHL leverage is either 1 and also achieved an impressive deleveraging. Regarding Constancia, the ratio increased because of the acquisition of ProPak. And CPI, which leverage was at 11.5 times only 6 months ago, did demonstrate the quality of its business model with a net debt to EBITDA ratio, which is today below 8 times as of June 30, 2021. Our company has delivered outstanding results and benefited from very, very solid financial structure to and can now finance their future growth. Thanks for your time, and I now leave the floor to Jerome. Thank you, David. Good afternoon, ladies and gentlemen. Let me start by giving you a bit more color on our net asset value as of June 30. I am now on Page 17, and I'm glad to report that with a level of €189,100,000 per share, Glendale posts The highest net asset value in its history. I think it reflects the fact that our portfolio is of good quality, That our businesses have performed well over the past 12 months, bouncing back from the pandemic while improving their balance sheet. And that multiples, of course, have also increased compared to 15 months ago. Bear in mind that Vandel also distributed a EUR 2.9 Dividend per share, in the meantime, meaning that our net asset value would have been actually €192,000,000 before the payment of this dividend. Now let's have a look at the main components of our net asset value on Page 18. Listed Equity Investments represents a total of €4,300,000,000 Within this category, you will have noted that we added a line And included our investments in target participation, which was representing €99,000,000 as of the end of June. We have invested further since then. And as of July 28, our total investment in Taked has reached €217,000,000 The value of our unlisted assets and Vandel Lab Investments is at €4,800,000,000 at the end of June, significantly above the level of March. Our net debt at the end of June stood at €832,000,000 taking into account the dividend paid a few days later after June 30. However, it does not include the dividend received from Bureau Veritas on July 1, which was roughly €58,000,000 and our additional investment in Tarkett of €118,000,000 since June 13. Overall, the net asset value of €189 €0.1 per share exhibits roughly 40% discount when compared to the average 20 day share price as of this date. Given the good performance of the portfolio, the increase in our net asset value over the past 12 months, the decrease In our cash burn and in our level of indebtedness, this level still strikes us as being overly wide and unwarranted. On Page 19 now. Sequentially, our net asset value has increased by €30 per share year to date. And again, That is after having paid the dividend of €46,400,000 at the end of June. Speakers, you are connected. Please go ahead. Now on Slide 20, Showing the net debt and loan to value ratio, as you will have seen with regards to the past 10 years, our TV ratio stands at a low level 9%. Adjusted for the additional investments made in target since the end of June and taking into account Dividend received from Bureau Veritas, our LTV would stand at 9.5%. This is in line with our objective to retain a Strong and flexible financing structure, which can withstand sudden brutal market shocks, whilst retaining an investment grade rating profile. Thank you very much. I now hand it over to Andre for the conclusion. Okay. I get to apologize as well for The second interruption that we've undergone, we think it's because everybody is reporting at the same moment, the same day. So probably overwhelmed the network. So So apologies again for that. So to conclude, we're very pleased with the performance of our companies in the first half of twenty twenty one, Showing that collective intense efforts deployed are paying off. Sales have either continued to increase or have recovered from 2020 and generally exceed half one twenty 2019. EBITDA grew across the board and some margin levels are at record highs, translating into cash flow generation and further strengthening of capital structures across our portfolio. This strong rebound comes with new challenges regarding the availability and price of raw materials, But our companies have thus far demonstrated an ability to adapt to volatile market conditions. We are more than ever well equipped To weather any extraordinary times and as previously announced, we have actively resumed our search for new investments in line with the new strategic road map, which was endorsed by our Supervisory Board in the final quarter of 2020. The first transaction took place in April with the announcement of an investment in Taked in partnership with the founding family, which illustrates our team's ability to identify investment opportunities, which fit our long term investor profile. We also made additional investments in the Vale Lab, which was recently reinforced by the arrival of an experienced professional to run this investment department dedicated to high growth companies. While our dividend NAV have grown from 2017, we observed that our share price remains significantly below levels prevailing at that time with a very strong discount to underlying value. We have therefore continued to take advantage of this discount by opportunistically buying back some vendor shares on the market, EUR 25,000,000 in H1, and we intend to continue doing so in the second half of twenty twenty one, while focusing on diversifying and repositioning our portfolio toward Thank you for your time. So we'll now enter the Q and A phase, hoping that we can continue uninterrupted Until the end of the allotted time. Thank you. So I turn it back to the operator. Thank You can also submit your questions via the web. Your first question is from the line of Patrick Yes. Okay, Patrick. Hello, Francois. Yes. So first, on Slide 19 And Slide 18, on which there was some sound interruption. Could you explain or reexplain How you deal with the valuation of CPI given the good performance of the first half? Have you reduced the provision that you have applied previously on CPI? 2nd, On in analyst assets, as far as I understand, you have a Wendel lab, which is in it. Could you give us an idea of the value that you have retained for Wendel Lab? 3rd question. So Stal, obviously, made a very strong EBITDA margin in the first half. To what extent is this sustainable for the next half, especially with our material price increases? And finally, regarding Constancia, could you share with us the revenue of ProPak on a full year basis, please? Okay. Hello, Patrick. I'm going to address your first two questions, and then I'll And let maybe Andre David cover the other 2. I can we'll jump in obviously for the figures. So the first one on CPI. In the net asset value, what we do is that we use market multiples that multiply Past year's and current year's EBITDA, so that's what we have done as of the end of June. We've used the 2020 EBITDA, which It has been audited, and we have used current year EBITDA with EBITDA, which is the landing for this year. What we do on the accounting side is slightly different. We actually I've depreciated the value of our investments in our balance sheet by €87,000,000 at the end of 2020. And as per the accounting rules, you cannot reverse this depreciation charge, which is based on an impairment test. And To make it simple, this is based on the DCF valuation. If ever there is a difference between the DCF valuation and the net book value of your assets In the accounts, then you need to depreciate, which is what we have done. But that's not the same for the net asset value, which is based on multiples. So currently, we have the benefit of the good performance of 2021, which results in a good level of EBITDA anticipated for this year. But I guess we will have, obviously, to take into account the 2022 EBITDA, And that would be at the end of this year when we will get the budget from CPI and then we will transition to 2021 2022. So said differently, there's been some uplift in the NAV, but not a full uplift because we still have the full 2020 in the calculation. And there's no provisioning. It's the strict application, as we always do, of our methodology. On your second question, so Van de Lamb, you remember, we've committed $125,000,000 And actually, given the good performance that we've had, as we have said, we are Close to that, although we have only deployed €70,000,000 The value of the €70,000,000 deployed is actually close to €125,000,000 But bear in mind that it's because we've had A very good performance of 1 portfolio company in one particular fund. So not to Say that this is a one off, but just bear in mind that a large part of that is actually accounted for by this good performance of One company. And in terms of valuation, we are using the valuations provided by the funds in which we invest. We don't do anything, Any retreatments, we just choose the valuations that are given to us. So just to provide further clarity, The VanderLab investments in funds usually as most fund investments follow a J curve, so you start by incurring fees and costs. And the increases in value only happens after 1 or several years. So usually, you have this J curve. So you don't expect There will be a big uptick. The uptick comes back later as companies in the underlying portfolio do further financing rounds and get up marked or exits. This is what's happened here in part. So that's how it works. On STAHL, do you want would you like to Yes. So on STAHL, if you go back to Slide 6, Where we have showed up the trend on margin for each of our private companies, you can see that STAHL now It's trending at a 26% EBITDA margin. And as you've mentioned, this is pretty exceptional. And long term, we expect the company to get back to the low 20s where it has been trending for 4 years. So We are benefiting from low raw material prices that we had in our books, but There's a lot of one off here. So for several of our businesses, it's sort of a race between, as you can imagine, the Uptake or the significant increase of raw materials on the one hand and volumes, which entail reversing some of the savings that have been taken over in the past And on the other hand, improved volumes. So the for instance, the auto industry is still held back in production because of the Lack of semiconductors. So if you read the publications from the auto sector, you get the sense that there's like to be further upside. There are also some significant parts of the world where there's The lockdowns or activity has not fully recovered. So we look at the balance of the 2. We are always cautious because it's rather unpredictable where it ends Most of our companies have been either pushing through product price upticks, upgrades or temporary surcharges and the like, Sometimes more than once a year. So we've got that with a few of our companies. So far so good though. And last on your last question on Pro The annual sales are around €75,000,000 Thank you. Can I ask a follow-up question on CPI and VandaLab because I am a bit lost? Should I understand that the value that you retain for CPI is somewhere between the €520,000,000 that you paid And the €550,000,000 that you paid minus I think €270,000,000 that you mentioned before and or in previous presentation. And for VandelLab, should I understand that the value retained is $125,000,000 So on your second question, we are close to that, yes, for the van der LAB. With regards to the value of CPI, in the net asset value, we are still below the investment value, okay? And in the accounts, the investment value, what you said, was €520,000,000 and the depreciation was €87,000,000 So in the books, in the accounting, it's EUR 500,000,000 minus EUR 90,000,000. So we are talking maybe EUR 430,000,000. But that's accounting. And as you know, that's not really something that we look at. What we look at is the net asset value, and we are not yes, We have not yet recovered the value of CPI in the net asset value. It's higher than it was at the last publication and it's less than the price we paid, Right. I think that was your question. Right. Thank you. Thank you. The next question is from the line of Troj Gerard from DAC. Please go ahead. Yes. Good afternoon, gentlemen, and congratulations for that good set of numbers. A few questions on my side. The first one relates to target participation. Can you give us the indebtedness of the holding company? And are there any liquidity options for you In the future to sell back your stake to the family or to dispose in some way of your 26% stake? So that's my first question on target parcel. 2nd question, Constancia Flexibles, I mean, You said that a 2025 strategy had been designed. Can we know more about the long term margins that you target? It's been pretty stable in the past around 12% or 13% EBITDA margin wise, what level of margin do you target going forward? And maybe On the asset rotation side for the second half of the year, can we expect Can we expect acceleration of your asset rotation? And also, can you give us examples of deals apart from target attrition that you considered Okay. A lot of questions which are Obviously, a bit tricky here. On target participation, I turn it to Olivier to comment on I don't know what we are able to Close on the leverage at target participation? Not much as public in the Yes, company is listed. There's information in the offer document. It's published on the site. If you call Olivier, he can pass on to you the information that's on the site, but there really Nothing more to say. Options for liquidity, we don't have a foot to the family, if that's the question. There are obviously, as any investment we do, There are some options for liquidity at some point or another, but not options in the sense of call options, put options. Options, there are routes to achieve ways to achieve Liquidity over time after an initial lockup. On Constancia Flexibles, fortunately, another difficult question for us to answer, but we don't want to give The long term margin target, I will venture to say that the targets are higher as you would expect that we would want Higher than the current level of profitability. And on the asset rotation in half 2, We don't have that many, how to say, investment lines. We only have 7 with Tarkett. So if I start saying It's going to be high rotation. You might read more into it than I would like to say, but and then on the buy side, we are looking at several situations with no indication, too early to tell, nothing imminent again. But I think in December, we said nothing imminent and then targets surfaced in April. So these things can happen quicker than one says. So Really not much I prepared to disclose right now except please rest assured that we're not sitting on our hands And that everybody is extremely busy at the firm. Maybe we can illustrate with a few recent opportunities we have reviewed to give you some kind of flavor The sectors we're looking at, so we did spend time on education and training on various opportunities in Europe and in the U. S. We spent time in the Health Care Services and Animal Health as well, and we're currently spending a bit of time on our iron Manufacturing company as well. So diversified type of assets we're looking at, but growth It's a key focus on all those opportunities. Yes. As we said at our shareholders meeting, we did turn in a number of firm and financed offers in the last few months. Okay. Can I just maybe add a last question regarding North America? So you said that the revenues for the full year were close to €75,000,000 On the EBIT margin on the EBITDA margin side, [SPEAKER JOSE RAFAEL FERNANDEZ:] Can you can we have an idea also, please? [SPEAKER JOSE RAFAEL FERNANDEZ:] The $75,000,000 was The propac annual sales, sorry, maybe I misunderstood what you were asking for. But we're not going to give the detail. I'm sorry, we already gave more than We thought we were going to give, so well done. But we're not breaking down the profitability of either our Divisions, profit we're not giving that level of detail, sorry. Thank you. The next question is from the line of Francois Michellet from ODDO. Please go ahead. Hello, gentlemen. Can you hear me? Yes. Hello, Jean Francois. Hello. Thank you. My question has to do with Tarkett. Since the takeover, you have increased your It is now to a bit less than 90%. Could you remind us the rules that you need to follow before maybe trying to launch a new takeover or going up more than 90% the 90% threshold on target? Thank you. Yes. There is a period of time Which we could not do a new offer or reopen, but that's not on the table anyway. So it's kind of irrelevant. We can if we wish to Buy more shares on the market at prices equal to or below the price that has been offered. So we might do that opportunistically because After all, we were bidders recently, but we're watching what's going on in the rest of the world. It's everywhere we may or may not do it. And I might also add, we are not the As you know, we're not the sole decision maker here. It's also with the family. Like we said before, we were very happy to increase make this investment with the company. As you know, we have a minimum Around EUR 150,000,000, we are over that. We have the rights we have the full rights that we wished we had. And so now it's c'est primond la margin, you say we don't really care. And the technical threshold in France today is 90%. Yes, exactly. But so that's the way it is. So people Some people forgot to tender, some people may not have wanted, probably did not want to tender, whatever, CIV, and we move on. Okay. Thank you. Thank you. Thank you. If we have no more questions, There are no further questions. Again, for anyone who is there another question? The question is the written questions. Okay. Great question. So from Murad Lamidi. The first one is, is the impairment written in full year 2020 on PPI prevails or will be taken back? So Jerome answered that one, Jerome Michels, our CFO. Accounting rules do not allow for a take back of the accounting impairment. The second question is how IHS Yes, it's valued in your NAV at end of H1 2021. So the answer to that is the same method has been methodology has been consistently applied, We have taken a basket of comparables, which, as we said in the past, are in a basket of emerging market comparables. We have taken into account 2 years. Last year and this year, we have taken into account EBITDA. It's IHS on EBITDA only, given the state of development of the company, and then we've deducted the debt, applied our percentage, and that was the value. So that's all I'm prepared to say now. We cannot give the number. 3rd question is, is 20% EBITDA margin at Homology, the new norm for the company? Well, it's a pretty good margin, I'd first like To say, and is it the new norm? Tell me how much people will be painting, and I'll tell you what the likelihood of that being. So the company continues to feel they have plenty to the sales side is dependent on markets. And We're very positively inclined to think that it will continue to be good markets out there. But obviously, that's We are in uncertain times in Europe, but I think there might be. There is pressure on raw materials like there is in Other sectors of the economy, but the company also looks at what it can do on the pricing side, and so that's ongoing. In terms of cost, They're still focusing very much on costs, and management feels that there still is plenty to go for with Chromology, which We feel over time since the new management team came in, there was just a lot of low hanging fruit and other things to do. So that's all I that's why I'm not going to make any forecasts. But again, we feel there's plenty to be done inside the company, and we need to be helped by what is the situation outside in the product market. The last question is about target, but we already answered to it. Several target shareholders have not tendered The shares to the offer, do you intend to leave target listed? Well, we like we said, we Our intention was to do a squeeze out. It will remain to be seen what happens next, but For those who didn't tender, they're now our partners. And I have a question as well from Samarth Agrawal from Citi. So congratulations on the strong set of results. I have 3 questions. 1, first one around Gross runway in H2, is it fair to expect normalized growth rate from second half of twenty twenty one Following the strong rebound since past few quarters, the second question is around input Prices and the impact on EBITDA Margins, how much of any future raw material price increases can be passed on to Customers, short question, last one, on current market environment. Do you see a recovery In earnings and valuation multiples could accelerate timing of potential disposals. Okay. Those questions, trying to take them. Number 1, growth runway normalization. Look, we don't know. I mean, I wish I could say I include BV, Chromology, all the various companies. There's been a lot of stuff going on underlying. There's been some catch up in some areas where people have either under stocked or under in the case of BV, have been under certified Or needed to comply with some deadlines. So it's clearly been in some sectors, in some places, some recovery. In other places, It hasn't happened. There's still some hard hit industries, whether it's commercial, often anything All retail, consumer, sales in certain areas, etcetera, traditional channels. So it's really hard to stop and say we've got a full now when we look at the month, it's a fully Even in the case of a CPI providing its training, there's some moments it would slow down, they might be catching up. So we have to be very prudent in terms of Determining what is a normalized level, input prices, how much can be passed on, I don't know. That's the same thing. There is a lot of increase In the cost of raw materials, salaries in the U. S, up salaries in Europe, not particularly sometimes in Europe, scarcity of manpower. So that's for a big input, which is cost of labor, and then you've got the raw materials, they're up. And we are and our companies are pushing through price increases everywhere they can and where And their clients are doing it as well. So as well have to be very cautious on that. Do we feel that there will be more divestitures if earning valuation multiples continue to go high, etcetera? We've now reached a balance where we want to add assets. That's the main work here is adding assets, but we also know we want to keep our leverage Contained, so we're looking also at disposals. But we don't want to be if you think about what is driving the cart, what is the horse and what is the cart, I'd say the first 2018, 2019, it was the disposals dragging the investments. I'd say at this point, It's more the investments dragging the disposals, if I may try to find a way to describe it. I don't, David, if you'd like to add. I see you Agreeing and nodding. Yes. No, no, no, I agree with all those. Just on the visibility on H2 on sales, it's very hard to project where we'll be on Q4. I think In Q3, we can see the order books in some companies and where they stand in terms of booking for training for CPI and the order book for deliveries for Stal. And so we have a decent activity for the next 2 months, and we don't expect a change in the level of service for those companies. But it's true that for end of the year, it's clear as mud. So it's hard to know. Yes. The general tone is pretty confident. I mean people are fired up. They're working hard, and they're reasonably positive. And the trend in budgeting and sort of forecast It has been rather on the uptick. It's been positive momentum. Having said that, everybody when you look at the heat map of Countries against the delta strain, COVID, etcetera, you will see that as you look east, there is a Very significant still pressure on COVID, including in Asia, including the question marks regarding Shanghai. So it's a moment of uncertainty also in terms of the epidemic, although I really don't think we're going to have a shutdown experience like we had last Which was horrible, but it's not completely gone away. We have a biased view, all of us who sit in some of the better countries in terms of vaccination, I'm afraid. So anyway, we feel cautiously optimistic, happy with the first half. We have plenty of means to carry out our strategy. We will not do it all at once. We'll not do it all in one vintage, And we'll continue doing it very energetically. We're very happy with the people we've added. We've expanded our investment team further. It looks like the numbers we put 5 people, it looks like not a lot. But for us, it's a 25% increase in our teams, so We can process more opportunities, and we feel that the fact that we're working out of just Paris and New York means that our team is Continuing to gain experience, cohesiveness, drive experience. So We're ready to go on holiday, exhausted, but we'll come back with a lot of energy. Thank you. Very last question. This one is in French, so I will say it in French. Good afternoon. The consolidation on the Market is accelerating and multiples are reaching new highs. Isn't that the best context to divest from Chromology after the recovery of EBITDA over the last few years. Is this a good time isn't this a good time To dispose of Chromology, given valuations of recent transactions, the stepped up level of activity and also the improvements in the company. Well, it's a good question. Certainly, something that we have to think about. We have not made any decision, but I can see the way the question is being asked, and all I can say is, yes, it's a good question. Whether we will or we will not Is the answer everybody would like to have and we'll be considering. So no more questions. Thank you very much. Thanks everyone. Have a good break, good holidays. See you soon. Thank you. That does conclude the conference for today. Thank you for participating and you may now disconnect.