Ladies and gentlemen, welcome to the Peugeot Invest 2024 Annual Results webcast. Your hosts today are Jean-Charles Douin, Chief Executive Officer of Peugeot Invest, and Sébastien Coquard, Deputy CEO. Following the presentation, we will open the floor for a Q&A session. You can submit your question at any time by clicking the blue button on your screen. I'll now hand over to the Peugeot Invest leadership team. Gentlemen, the floor is yours.
Good morning, everybody. My name is Jean-Charles Douin, and I'm the CEO of Peugeot Invest. With Sébastien Coquard, I'm delighted to be here to present our annual results. Before we dive into the details, I thought I would take a few moments to introduce myself. I joined Peugeot Invest at the end of October 2024, after more than 20 years in the private equity industry. Before Peugeot Invest, I spent 16 years at Ontario Teachers' Pension Plan, which I guess you could describe as a sophisticated, long-term, and disciplined institutional investor. There I was leading the private equity team in the Europe, Middle East, and Africa region. As such, I've worked on a large number of transactions in pretty much all the sectors in most European countries. I've also built up the team in London, and I participated in the evolution of Teachers' Strategy.
At Peugeot Invest, I see the same fundamental principles at work: a long-term vision, a strong investment discipline, and a deep commitment to supporting companies. Over the past few weeks, I've had the opportunity to meet some of you, and I look forward to continuing those discussions and engaging further with you all. With that, let's dive into the details. Here are the results in a nutshell. We finished the year with a net asset value of EUR 4.6 billion. This is down 22% from the previous year. Obviously, this is a very disappointing result, and Sébastien will break it down for us in a moment. Suffice to say, the drop in NAV is mainly driven by the steep drop in the Stellantis share price last year. More positively, we have driven a high level of activities in 2024 with more than EUR 500 million of disposals.
This led to an improved financial situation with a net debt of EUR 550 million, down EUR 300 million from the previous year. Finally, despite the drop in net asset value and a significant reduction expected in the upcoming Stellantis dividend, our board has approved a stable dividend for Peugeot Invest at EUR 3.25 per share. With that, I'll hand over to Sébastien to drive us into the details of the results.
Thank you, Jean-Charles. Good morning, everyone. Let's dive straight into our performance for the year. Our gross asset value stood at EUR 5.3 billion, structured as follows. 58% comes from our diversified investment strategy, which is built on three underlying types of investments: direct shareholdings, investment funds, and co-investments. 42% comes from Peugeot 1810, which consolidates our holdings in Stellantis and Forvia. After reaching an all-time high close to EUR 6 billion in 2023, our net asset value declined in 2024. Specifically, the valuation of Stellantis has returned to its 2020 level. This evolution translates into a 25% decline in our share price and a 60% discount. At year-end, the NAV per share stood at EUR 182.7 per share. Looking at performance, the NAV posted a 22% decline, largely driven by the 40% drop in Stellantis share price, as illustrated on the slide. On the investment side, the activity remained stable.
However, the strong dividend inflow, primarily from Stellantis, covered our expenses, taxes, and the dividend payout to our shareholders, while also contributing to a reduction in net debt. Turning to Stellantis, 2024 has been a challenging year after Stellantis followed an exceptional record year in 2023. Volumes declined by 12%, largely due to lower production aimed at reducing inventories, which in turn impacted both margin and cash flows. As a result, revenue were down 17%, and AOI margin decreased to 5.5%. That said, product momentum remained strong, with 20 new models launched at the end of 2024 and 10 more planned for this year. It was also a year with significant shareholder returns, with dividends and share buybacks playing a major role. Looking ahead to 2025, the proposed dividend is set at half of the 2024 level. Finally, an important transition is underway.
A new CEO is expected to be appointed before the end of the first half of the year. The selection process is ongoing, with the Ad Hoc Committee, where Robert Peugeot sits, actively meeting with candidates. Looking now at our investments strategy, we saw positive momentum in shareholdings and investment funds, while co-investments decreased. Starting with the shareholdings, overall, they delivered a solid 7% performance. Our private shareholdings led the way with a 17% valuation increase, reflecting a strong year where EBITDA grew by double digits. SPIE share price started 2024 well, but later faced challenges due to the political turbulence in France and finished the year up 6%. Meanwhile, we disposed SEB and part of LISI at valuation below their end-of-2023 levels. Our investment funds performed well, posting a 6% increase. 40% of the portfolio consists of 2024 vintages, which are still largely valued at cost.
On the co-investment side, performance was disappointing. We sold two co-investments at a higher valuation than the one we had in our books. We now have three listed co-investments, each with different dynamics. Lineage, which went public last July, had a difficult start on the market, declining 30% since IPO. We also received the JDE's shares, which were held by JAB until the second half. While its share price decreased by 32% in 2024, it has rebounded 15% year-to-date. IHS share price decreased by 35% in 2024 but has since recovered strongly, rebounding 42%. Additionally, we increased provision on some already provisioned co-investments in real estate, China, where we have three co-investments, and food tech. That said, most of the negative news should now be behind us. Now let's look at our cash flow dynamics. 2024 was an exceptional year in terms of dividend received, reaching record high.
This reflects three years of strong profitability at Stellantis, coupled with high dividend payouts. However, looking ahead to 2025, the dividend proposed to the AGM, as we said, is set to be cut by half. On the cost side, our cash SG&A remained stable, though we incurred some exceptional expenses related to government changes. Turning to interest expenses, these remain very low thanks to profitable hedging, debt reduction, and strong returns on cash. After what has been a mixed year, the board has decided to maintain the dividend at the same level of last year. Looking at the long-term picture, our dividend has grown, an annual rate of nearly 8% over the last eight years. This reflects the commitment to providing shareholders with a regular level of dividend rather than exposing them to the volatility of the NAV linked to our listed assets.
On the P&L side, 2024 consolidated net profits attributable to equity holders stands at EUR 146 million, slightly above last year's level. While we benefited from a higher level of dividend inflows, this was partially offset by increased provision on co-investments. Let's focus now on the asset rotation. 2024 was another year of strong portfolio rotation. This marks the fourth consecutive year with around EUR 500 million of disposals, meaning that 63% of our 2020 investment valuation have rotated over the last four years. At the same time, we reinvested EUR 379 million into new opportunities that are positioned to create values in the next few years. On the shareholding side, we completed EUR 330 million in disposals, capitalizing on high multiples. The LISI, SEB, and TKO disposal were completed in the first half and have already been discussed and commented in our previous earning calls.
Earlier this week, we sold half of our stake in SPIE. We have been a shareholder in SPIE for the last seven years. Over this period, the company has delivered consistent growth, with EBIT increasing by 9% per year on average. SPIE continues to benefit from long-term structural tailwinds, including the energy transition, shifts in the energy mix, and digital transformation. While the share price is up 30% this year, we saw an opportunity to crystallize part of our gains. This transaction generated a 1.8 cash multiple and a 9% IRR over the holding period. In the second half of 2024, we built a new stake in Robertet, playing a key role in the restructuring of its capital and enabling the company to fully regain its independence.
We supported this 170-year-old family-owned group founded by the Maubert family, which is a global leader in flavors, fragrances, and natural ingredients, a market experiencing regular growth. With the transaction that aligns the main shareholders, we also increased significantly the free float. Thanks to a well-structured deal, we were able to invest at an attractive price. We now hold 7.6% of the company and will be joining the board at the next AGM. Looking ahead, we are committed to supporting the management team in its effort to increase Robertet's visibility in the financial markets. The Capital Markets Day planned for May is a step in the right direction. In our co-investment portfolio, we exited two co-investments, Ama Waterways and Transact, with a two-time return on initial investments, while also committing to two new co-investments in software companies with significant exposure to the U.S. markets.
First, in TradingView, a social media network, analysis platform, and mobile app designed for traders and investors. Then Springbrook, a U.S.-based provider in ERP software and payment solutions tailored for small and mid-sized municipalities. We continue to expand our private equity funds portfolio, which is now valued close to EUR 1 billion. In 2024, we made 11 new commitments totaling EUR 138 million spread across the buyouts, the tech, and the real estate funds. On the cash flow side, our funds called EUR 154 million in capital and distributed EUR 108 million over the year. Now turning to our credit profile. We reduced net debt by EUR 307 million, reinforcing our financial strength. Despite the NAV decline, our loan-to-value ratio is lower than last year, with a prudent 11% level. We maintain a strong liquidity position of EUR 1 billion, giving us the flexibility to seize new investment opportunities.
Finally, we have EUR 213 million Euro PP maturity in July, which will be partly refinanced through a new EUR 100 million U.S. PP with a seven-year maturity at 4.62%. Jean-Charles, I'll now hand it over to conclude the presentation.
Okay, thank you. Before we conclude the presentation, I wanted to mention a number of events that took place since the year-end. I really want to highlight three points. Number one, we continue to work hard with our investments to execute on the value creation plans. This is the case, obviously, at Stellantis, where, like Sébastien said, we are actively participating in the CEO search. This will also be the case with Robertet when we join the board in May. Number two, we have started to reposition the portfolio.
This was illustrated by the sale of half our stake in SPIE, where we took advantage of good market conditions, and we're looking at the rest of the portfolio, including our fund investments. Number three, we continuously seek to improve our own business, and we always strive for better governance. To conclude, what do I remain positive about the potential of Peugeot Invest? We have a number of assets, like our name, our heritage, our flexible capital, and a strong liquidity position. I also found a very engaged and professional team when I joined here a few months ago.
What that means is that we are in good shape now to reposition our portfolio on new investments, and we will do so by focusing on performance, by building on our strengths, having learned from the past, improving cross-fertilization between our programs, and especially between the funds and the direct investments, and managing our portfolio more actively, like you've seen us do recently. On this, I want to thank you for your attention, and we will now open for questions.
The Q&A session will begin shortly. In the meantime, you can submit your question at any time by clicking the blue button on your screen. Thank you. We have a first question, Mr. Jean-Charles Douin. You stepped into the role of CEO a few months ago. What key initiatives have you implemented so far? How do they align with your strategic vision for Peugeot Invest?
Okay, thank you, Leslie. Look, immediately coming in, my first priority was to get to know the team, the board, familiarize myself with the portfolio, and also change a few internal processes and systems when required. With Sébastien, we've also spent quite a lot of time actually trying to understand what has worked well for us and what has worked not so well. We will incorporate that into our thinking when we look at the investment strategy. Now my strategic priority as CEO clearly is to formulate an investment strategy that will restore net asset value growth. We're working on that at the moment. We will present it to our board in the coming weeks for validation.
What I can tell you is that this is a strategy which will be more focused, more meaningful, where we will be investing with conviction, with strong value creation plans, and we will be much more proactive in our sourcing and active in our portfolio management. Now, obviously, repositioning the portfolio will take time. We have started to do that. We talked about it during the presentation, obviously, SPIE and some of the other things we are looking at. We are starting to fill up the pipeline as well for new capital deployment, and I expect 2025 to be a capital deployment year. With that, maybe I will leave it to that. I am sure we will have more to discuss with you in the course of 2025.
Our next question. Peugeot Invest recently acquired a stake in Robertet. How does this investment align with your long-term strategy?
Yes, I can take that one as well. Look, Robertet, Sébastien talked about Robertet, and I think he explained the potential that we saw in the business. I think what is important and what is highlighted for us is public equity remains a core part of our investment strategy and will remain so. We see strong potential in public equities, and we think it has a benefit because we have a good track record in this asset class. We have a strong reputation. Obviously, the public equity market allows you to find liquidity pretty much when you want it. We saw that recently with SPIE. What matters to me is when we go into an investment like this, I want us to have a clear and specific value creation plan for each investment. For Robertet, for example, I think Sébastien touched on it.
What this involves is improving financial communication, improving visibility. For example, the upcoming capital markets day of Robertet is an example of that. We will continue to work with the Robertet team. We are joining the board in May. Again, we will be focusing on the core elements of value creation plan for that business.
Are you committed to keep the dividend at least stable also next year, even if Stellantis' dividend is lower?
I recall the dividend strategy for Peugeot Invest. Obviously, we will see next year what will be the situation and what Stellantis will do concerning its own dividend, and then we will decide what we will do. It is probably too early to talk about 2026.
At the last AGM, the question on the Peugeot name license plate was a hot topic. Any update on that?
Yeah, so the Peugeot brand is owned by Établissements Peugeot Frères, and any entity using the name is required to pay a legal licensing fee. This ensures the proper brand management and recognition within the investment space. The fee also allows Peugeot Invest to leverage the heritage, credibility, and reputation on the Peugeot name in its investment activity. The fee structure, we have 3% on the dividends we receive in Peugeot Invest on the investment part, which is capped to EUR 1 million. Peugeot 1810, the fee has been reduced significantly by 10 times as it was 1% before, and now it is 0.1%. For 2025, the total fee will be around EUR 1 million, which is more than three times lower than what was paid last year. Obviously, it is a subject that is behind us today.
You mentioned that in the context of the portfolio repositioning, that you are looking at the funds. What do you mean by that? Do you want to increase or decrease investment here?
Okay, yeah, thank you for the question. Look, to be very clear, investment funds will remain a core part of the strategy. There's no doubt about that. It's been a very successful program for us. I think the team here at Peugeot Invest has been very good at selecting funds that have delivered good alpha and good returns for the firm. What I mean by looking at the funds portfolio is probably a couple of things. I want us to be a bit more intentional about our funds program. So roughly speaking, the size is probably going to remain more or less the same, but the number of relationships I expect to decrease.
We probably have too many relationships today, and I expect the number of relationships to decrease. I also want us to be clearer about the expectation and the roadmap when we turn into a fund, when we go into a fund, which is either to deliver strong returns for us, and we see a number of strong performers in our portfolio, or to deliver deal flow for us on the direct side, which, again, we've seen historically, but we want to accelerate.
Do you plan to change the floating shareholding stake of the company?
Of Peugeot Invest, you mean?
Yes, by making share buybacks, for example.
Yeah, look, that's a good question. I think for us, we're looking at all the tools at our disposal. That includes share buybacks, that includes dividends.
The only thing I would note is share buyback could reduce the free float, which might not be the best thing to do in the context of our discount. This is always something we explore. At the moment, though, there's no immediate plan to do a share buyback.
Has the investment in Ynsect been written down to zero? Could you detail the shareholding? Maybe we'll take this one after that.
Yes, the investment made in Ynsect has been written to zero. Most of it, in fact, was done in 2023, but the rest was done this year.
Could you please detail the shareholding in IHS, JDE Peet's, and Lineage under listed asset rather than co-investment? How large is your shareholding in this company?
Yeah, those three co-investments, in fact, are in the co-investment total. It was, first private asset, but they went listed.
Now I can give you the valuation, of course. The valuation of IHS is EUR 14 million, the value of IHS is EUR 14 million end of last year. Of JDE, it's EUR 26 million, and Lineage, it's EUR 73 million.
What is the IRR target for co-investment and shareholdings? Do you see SPIE? Do you think SPIE is unable to deliver such IRR in the coming years?
Our targets for co-investment and shareholding is to produce regular high single-digit returns. That's clearly what we are focusing on delivering. This has been the case for SPIE, obviously. As you see, we have kept half of our stake in SPIE, so we believe that the company is well placed to continue delivering regular performance over the next few years.
Could you give us an update on the legal proceeding against the former administrators of Orpéa, including Peugeot Invest, and tell us if you have made any provision to cover this risk, and what is your insurance cover against this litigation?
Okay, as a former director of Emeis, formerly named Orpéa, Peugeot Invest has received three summons before the Tribunal des Activités Économiques de Paris. The shareholders or former shareholders of Emeis who initiated these summons are seeking to hold the former directors of Emeis liable for withholding information and communicating false information between 2016 and 2021. Peugeot Invest believes that it has always exercised its mandate as a director of Emeis diligently and that there is no basis for these actions. There has been no provision. At this date, the timetable of the proceedings is not yet known.
Maybe to finish, when I arrived, we did a review of the insurance policy, and I can confirm that we have appropriate D&O policy in place and that this would cover this matter.
Your discount to NAV remains significant. How do you plan to reduce it?
Thank you. Good question. Look, on our side, obviously, we can see that the discount to NAV has widened for us. It's widened for the whole of the industry. We see that pretty much all investment companies in recent years have had a discount that widened. Therefore, it must be a bit of a market trend, I guess. It's a bit difficult for us to comment on the rationale for the discount. I think everybody will have their view, and investors on this call might be actually better placed to comment on the reason for the discount.
What is clear, though, is clearly we're not satisfied with the level of the discount. We want it to return to a more normal level, if I can call it that. I want to clarify also that all our stakeholders clearly align with that goal. For management, this will be illustrated by the fact that Sébastien and I will have the reduction of the discount as a specific item of the performance criteria in our compensation package for 2025.
How do you perceive the decline in Stellantis' dividend, and what impact is it having on your organization, investment policy, and own dividend policy?
Okay, as mentioned, we had three years of very high level of profitability on Stellantis and high dividend. We improve regularly our own dividend. Our cash flow has been very positive those last few years.
We believe next year it will be approximately financing all our costs and probably financing most of the dividend we will pay. We have sold many assets, so we have a very healthy financial situation and balance sheet. We are able to seize any opportunities that we are actually working on at the moment. We will be able to continue to invest and to deploy our investment strategy, even though the dividend will be lower this year.
Are the losses on co-investment in China due to bad performances of the company or lower comparables?
We have three co-investments in China. Obviously, the economy has slowed down, so the performance of the assets has slowed down.
It is also true, as you said, that the multiples have reduced significantly, and that's probably most of the explanation of the reduction in valuation of those assets, which now represent a very limited amount in NAV.
Maybe just to add, we're obviously not actively looking to invest more in China.
Have you envisaged to distribute any shares of Stellantis to Peugeot Invest shareholders to reduce the discount and let minority shareholders free between Stellantis and the rest?
Okay, thank you, Jean-Pierre, for the question. Look, as we already mentioned in previous webcasts, Peugeot Invest will continuously evaluate its stake in all its companies, and that includes Stellantis. That said, our stake in Peugeot 1810 or in Stellantis is an integral part of our broader investment strategy. Any changes in our shareholding is quite a complex topic, actually.
It's quite multifaceted and it has repercussions for all the stakeholders. It has financial, governance, strategic, fiscal complications. At the moment, our priority has been on other events, the change of leadership, obviously, with myself in October and Édouard soon coming in, and focusing on adjusting the investment strategy to select attractive opportunities and deliver stronger performance.
Do you plan to raise or reduce exposure in certain sectors? Which ones? Also, does the ongoing geopolitical volatility make some areas more attractive, such as defense, or less?
Thank you. Yeah, look, this one is what I can say, we're looking to validate our strategy with our board in the coming weeks. It's a bit difficult for me to be too precise, unfortunately, today. What I can say is, yes, we will be more, and I've used this word before, but more intentional and more focused on certain sectors.
We will get back to you once this is approved by our board. Clearly, we will look at the trends in the sector, the level of valuations, the resilience of the sectors when choosing them, and we will incorporate the learnings from the past, what has worked for us, what has not worked for us. Defense might be one of the sectors, might not be one of the sectors. What I want to say, though, is we are long-term investors, and we will make sure to look at long-term trends, not invest on the basis of potential short-term blip. That is what will drive the selection. For sure, sectorization will become more important in our investment process.
Do you still have any assets in difficult situations?
We think that last year and this year, we reduced significantly the valuation of many unlisted assets that had, obviously, some specific situation. We believe that the bad news on the different, well, on some assets is behind us today.
The press disclosed that Pernod Ricard could put Mumm Champagne on sale. Any bid on this asset possible?
Okay, that's a very specific question. Look, obviously, I think we won't discuss or comment on our pipeline. I can say that our pipeline is filling up nicely, and we're hopeful and optimistic that we will start deploying according to our investment strategy. I can't comment on whether Mumm is part of this or not. What I can say is we are probably more likely to be users if the year goes well than investors in the asset.
One final question.
Regarding PE fund investment, do you expect any major distribution for 2025? Can you remind us the average maturity of your portfolio?
Yeah, look, I think this year, it's always difficult to predict this one because, obviously, the private equity industry for the last two to three years has seen less liquidity events and has been a net negative distributor of cash or user of cash, I should say, a net user of cash. What we are modeling, though, is for us to see our J-curve maturing this year and to be probably cash flow positive for the first time this year with our investment funds.
What we will do as well is we will look more closely at our fund partners because, as I said, we have quite a number of relationships and see if they still fit the criteria that we set for ourselves, either in terms of strategic value for us or in terms of returns. We are going through that exercise now.
Thank you very much. This closes the Peugeot Invest 2024 result webcast. Thank you for your attention. Have a nice day. Thank you.