Good morning, ladies and gentlemen, and welcome to the Peugeot Invest half-year result presentation. Your hosts for this session are Jean-Charles Douin, Chief Executive Officer, and Sébastien Coquard, Deputy Chief Executive Officer. Their presentation will be followed by a Q&A session. We invite you to use the chat box on the webcast page to submit your questions. Without any further ado, I will now hand over to them to take you through the presentation.
Okay, good morning. My name is Jean-Charles Douin. I'm pleased to present our first half results. These results really tell two very different stories. On the one hand, we delivered a solid performance from our investments, with a total return of 9.2% at constant currency. On the other hand, we faced continued pressure from the decline in Stellantis' share price, as well as negative foreign exchange impact of about €160 million. This was linked to the depreciation of the U.S. dollar. As a result, as you can see, our NAV per share stood at just below €158. During the first half, we have been also very active in executing our revised investment strategy. At the time of our year-end results on this call, we announced that we would begin repositioning the portfolio, and it's exactly what we have done.
Through a significant number of disposals, first, we sold three listed investments, including SPE, at very attractive conditions. We also divested nearly a third of our investment funds portfolio, which enabled us to focus on strategic relationships. At the same time, we reinvested part of these proceeds into two direct transactions, Novitud and Broad Street, which we find align perfectly with our strategic priority. We will tell you more about all these transactions in a moment, but before we do so, I will hand over to Sébastien for a presentation of the results.
Thank you, Jean-Charles. Good morning, everyone. Let me walk you through the performance highlights for the first half of the year. NAV stood at €3.9 billion, or €157.9 per share, down 11.8% over the period.
As Jean-Charles just mentioned, this decline reflects a significant performance of our investment strategy at constant exchange rate, offset by currency effects and a 33% drop in Stellantis' share price. Focusing on our investment activity, at constant forex, performance was 9.2%, driven by the strong gains in our listed shareholdings, particularly SPE and Lizzie. Our investment funds delivered a positive performance of 3.2%, and private assets' valuations remained broadly stable. The sharp depreciation of the U.S. dollar had a significant impact on our NAV, given the 45% of our assets that are dollar denominated. This exposure is a strategic choice aligned with our aim to diversify geographically and increase exposure to the U.S. economy.
Even if the impact can be important in a single year, looking at the impact over the past six years, it's clear that currency effects tend to even out over the long term. Peugeot Invest's share price was resilient despite the drop of Stellantis shares following Liberation Day. Including the dividend, our share was up 5% in H1, outperforming the NAV. As a result, the discount started narrowing to 53%. Cash flow was positive in the first half, allowing us to fund the €81 million dividend we paid to our shareholders. Following three years of exceptional dividend from Stellantis, its dividend was halved this year. Our SG&A costs were reduced by 5% compared to last year, first half, and the tax outflow increased due to last year's gain on forex. We expect to recover part of this in 2026.
Our P&L net profit was €157 million, lower than last year due to the reduction in dividends and negative currency effects. We divested €322 million worth of assets and invested €106 million in H1. With additional activity in Q3, 2025 will see the highest portfolio turnover in the past four years, and investment volumes remain broadly in line with historical average. The main disposal in the first half was the sale on the market of half of our stake in SPE in March, capitalizing on the stock's strong performance, which was 60% in 17 months. We sold the second half in July at an even higher price. The total proceeds amount to €358 million, of which €165 million were recognized in the first half.
We were a SPE shareholder for seven and a half years, actively contributing at the board levels, supporting management for its M&A strategy, disciplined operational execution, and enhanced financial communication. Over this period, the company delivered consistent growth, with EBIT increasing by 9% per year on average. Our performance was a 10% IRR and two times on invested capital. Our investment in SPE demonstrates our long-term involvement, targeted double-digit returns, and agility to seize market opportunities. Two of our co-investments, IHS and GDE Peats, became listed and performed strongly in 2025, as you can see on this slide. We sold our position, crystallizing value and generating €53 million in proceeds, which will be reallocated to new opportunities. Another major transaction was the partial disposal of our investment fund portfolio.
As part of the strategic rebalancing, we sold 35 private equity funds managed by 22 general partners on the secondary markets for €221 million. As part of this transaction, we also reduced our on-call commitments by $78 million. The payment was scheduled in three installments, the first of which was received last June for $55 million. The sold portfolio delivered a high single-digit performance. This operation illustrates the refocus and active management of the Peugeot Invest portfolio. Now turning to our credit profile. Net debt was reduced by $212 million to a low level of $339 million at the end of the first half, and further down to $254 million pro forma of the third quarter transaction we will come back on at the end of the presentation. This is a record low level of net debt. The loan-to-value ratio decreased to 7.5%.
With $1.2 billion liquidity and only one major maturity due next year, we have strong investment capacity to seize opportunity when we find one. That concludes the activity overview for the first half. Jean-Charles, I now hand it back to you to speak about our updated investment strategy, which we adopted earlier this year and have already begun executing.
Thank you. Yeah, we thought it would be interesting to share our revised investment strategy with you. Really, before diving into investment criteria, our first step as a team was to reaffirm what unites us, that is our mission, the mission that drives our investment approach. That's what came out of this work. First, we want to create long-term sustainable value. By that, we mean growing our assets, supporting our share price, and delivering consistent dividend yield. Second, we want to diversify with discipline.
What we mean by that is both diversification of the automotive exposure, but also to keep a balanced investment portfolio. Third, we want to make the Peugeot Invest name resonate with pride by choosing responsible investment with strong reputation. It is this mission that guided the development of our strategy. This strategy was subsequently approved by the board of directors and presented at the AGM in May. The new investment strategy should be seen as an evolution, not a revolution, but it comes with clear choices. It is built around five main pillars, which I'm going to explore very quickly. First, it's clear to us that our core business remains the equity market, with a particular focus on these three asset classes. They already represent a significant share of our gross assets, and we have a proven track record in those three asset classes.
Importantly, we also have existing expertise and legitimacy in-house, which means we won't need to strengthen our team to play in those three asset classes. Focusing also means stopping certain strategies. This can be for different reasons, either an unsuitable risk profile, this was the case for gross equity. It could be due to poor timing or maybe a limited understanding of certain asset classes, such as real estate. Or simply, it could be strategies that failed to deliver on their promises, as was the case in Nigeria and Africa. In any case, these strategies did not meet our performance levels, our performance standard, and they negatively impacted our returns. The multiple of invested capital was about 0.1 times in venture capital and real estate, and 0.6 times in Africa and Asia. That said, we will not exit hastily, but we will divest very progressively.
We will try to seize market opportunities, as we have done with IHS. Sébastien talked about it, where the share price increased by more than 50% this year. In parallel, within our asset classes, we will aim to concentrate by investing significant tickets of between €75 million and €250 million. This represents roughly 2.5% to 7.5% of our gross ABR, and we think that strikes a balance between sufficient diversification, but also good productivity. On the fund side, before the secondary sale, we had about 60 general partner relationships, many of which managed multiple funds. This is too many in our views. The objective is to narrow this to a number in the 20s, which will mean roughly doubling our average ticket size to each fund. Alongside our ticket size, we also want to increase our level of influence.
This will be particularly true in private equity, where in Europe, we will target stakes of between 15% and 50% of the capital, always with a board seat, and where possible, with governance and exit rights. Also, a very important point is we will not engage in syndicated co-investments. Instead, we will enter into deals before they are signed, with the ability to conduct our own due diligence. Finally, we want to become sector-focused. This would enable us to be much more proactive in our origination and to bring expertise to our diligence process, which would also allow us to make investment decisions with conviction. This would also bring true synergy with our funds program, as we will seek at least one strategic partner per vertical. Why have we chosen these four sectors? They're supported by good growth trends, and they make a major contribution to the economy.
They also make a major contribution to the deal flow. In Europe, over the last 10 years, they represented about 70% of the private equity transactions. Importantly, between 2010 and 2023 in Europe and North America, our two core geographies, these sectors not only returned the highest return, on average between 1.7 and 2 times invested capital, but they also showed the lowest volatility in returns. We think those four sectors, for us today, bring the best risk-return profiles. The final pillar, we think that greater influence means active portfolio management. Each investment in our portfolio will have a clear value creation plan, which will be co-designed with our partners and our management teams. We will continue to manage our portfolio actively. We will reinforce, rebalance, or maybe even exit when the time is right, following completion of these value creation plans. That's our strategy in a nutshell.
Let's say a word on the post-closing events. I covered the main transaction for the first half, which marked the initial phase in the execution of this new strategy, with the rebalancing of the fund portfolio, disposal of non-strategic co-investments, and crystallizing the strong performance of SPE. Execution continued post-June 30. We completed the sale of our entire SPE stakes, benefiting from a further 17% performance since the March transaction for an additional €192 million. In September, we also sold 5.8% of Lizzie, following a doubling of the share price in 2023. Shares were sold at €39, representing a 2% discount on the three-month average price. We resigned from the board of directors. We retain 4.5% stakes and are under a 120-day lockup.
Lizzie has been one of the oldest shareholders for Peugeot Invest, as the Peugeot family backed its cousin, the Kohler family, and also the Viella family to expand into aerospace. This has been a success story with the aerospace division now driving Lizzie's results. Over nearly 50 years, this investment has generated a 10% IRR. Thank you.
As Sébastien mentioned, we've also made some new investments during the first half. I won't come back on Novitud and Broad Street as we communicated around these deals when we made them, but I really want to highlight two things. One, both deals were proactively sourced within our core sectors. Insurance brokerage and healthcare training are core sectors for us, and those deals were sourced long before we signed them and closed them.
Two, we had the ability on both deals to conduct our own autonomous and rigorous due diligence, and we secured governance and exit rights in Novitud. What we didn't communicate too much on is the three commitments we made on the fund side, but they're equally important. They're a good illustration of how we will interact between the direct program and the funds program, with two new partners in strategic sectors for us: Poland Street in financial services and Charter House in business services. With that, let me conclude by saying that really this semester was all about positioning Peugeot Invest for growth. We delivered a robust investment performance, and we began repositioning the portfolio with intent. We made disposal at attractive valuations, we brought a sharper focus in our fund book, and we made two direct investments in strategic assets.
In parallel, we carried out a successful governance transition, and we significantly reduced our net debt. We expect that all of this contributed to the reduction of the discount to NAV, and it certainly positions us perfectly to capture future opportunities. Maybe with that, I'd like to open the floor for questions.
We will now take a short break ahead of the Q&A session. Again, we invite you to use the chat box on the webcast page to submit your questions. Thank you. The first question is, you mentioned during the presentation the partial sale of your portfolio funds, that you are planning to reduce further, but could you give us more color on your exposure and the benefits of direct investment?
Thank you. It's really important to clarify that the secondary sale we made of the funds portfolio is not a signal that investment funds are not core to us. You've seen they're one of the three asset classes we want to focus on. Really, the reason to do this sale was to focus on relationships that were strategic for us. Therefore, what we sold were either funds which were too small, too large, or in the wrong geographies for us. Following that, as Sébastien said, we will focus on about 30-plus relationships, so still slightly more than what I mentioned, our goal is of about something in the 20s. For the rest, I think we will probably wait for these relationships to run off their course, as we didn't find the opportunity to sell them on the secondary market attractive.
The next question: are the recent exits in your listed assets a signal that you may discontinue this asset class?
No. They're a signal that we want to be very agile in our investment activity, and we want to be able to seize opportunities when they present themselves. Listed investments remain a core part of our investment program. I think we have a strong track record and a strong credibility in this sector. We made an investment not so long ago in Robertet in December 2024. When we look at the pipeline, we still see a number of opportunities to continue positioning ourselves in listed investments.
Our next question is: where should we put Novitud and Broad Street? Are they under co-investments or under listed shareholders? Also, I remember from your presentation in May that investment in real estate would be discontinued. I was quite surprised to see that you committed a couple of million to real estate projects with ELV. Even though ELV has been a partner for about a decade, I would like to understand this type of investment. I was in the understanding this type of investment would stop. Could you give us your reasoning behind this one?
All right, so Novitud and Broad Street will be put under the unlisted shareholding. As we said, co-investment is not anymore core in our new strategy, and we are thinking about the way to maybe present our NAV a bit differently, to focus on the three core pillars that Jean-Charles described, which are listed assets, unlisted assets, and investment funds. Concerning the very small commitment or investments in the ELV real estate that we made, we have, as you said, a strong relationship with this team and commitments to continue to invest at the moment when we sign some commitments.
You mentioned an acceleration of the strategy. Looking at your pipeline, can you tell us what you are seeing? Overall, I hear a lot of noise that high-quality assets still get quite high valuation. Is that also your experience? Any color would be great.
Thank you. On the pipeline side, look, we still are seeing a number of opportunities. We think it's generally a buyer's market, and we have the benefit of being very selective in what we pursue. Overall, I think you are probably correct. High-quality assets still deserve multiples, but I would say these multiples are probably lower than they used to be a couple of years ago. Importantly, we always look at this multiple in the context of not only past transactions, but also the delta between private and public transactions, and we've seen that this delta has very narrowed. We're quite optimistic. We have a pipeline that's filling up nicely. We will make sure that we focus on investments between €75 million and €250 million in our core sectors and where we have time to do our own due diligence.
That's the case at the moment, and we see interesting opportunities across Europe.
Our next question is about private debt and whether you are invested in private debt or do you plan to do it.
Today, we're not invested in private debt. As you probably heard, we want to focus on equity investments for now: public shareholdings, private equity, and private equity funds. We think this is the best for us to focus on in the medium term, which obviously doesn't mean that, you know, one day in the future we'll decide to look at private debt, but that's not in the plans for now.
The next question: Is Italy a country where you are looking for new investment opportunities? They are low valuation, especially on the listed market.
From a geographic perspective, our focus is clearly on two regions: Western Europe and North America. Therefore, yes, Italy is definitely part of that. At the moment, I would say we probably don't have a huge pipeline in Italy, but we are very interested in looking at opportunities there. Actually, we do have a number of opportunities for bolt-on acquisition of our portfolio companies in Italy, which look quite attractive.
Our next question: how do you see the second half of the year in terms of portfolio rotation?
Okay, as I started the second half with many disposals that I have commented earlier, as you've seen, as of today, the amount of portfolio rotation will be probably one of the highest in the last four years. We don't expect significant new portfolio rotation before the end of the year, even though, you know, we are also always keen to seize opportunities, if any.
The next question: how does Peugeot Invest position itself in the face of global geographical and economic uncertainties, and how does the evolving macroeconomic context affect your plans and your focus for 2025? What are your expectations for the NAV in 2025?
Okay, it's true that the global geopolitical environment has been quite tough, but you know, we have been able to seize opportunities, attractive opportunities to create crystallized value since the beginning of the year with the SPE disposal, the Lizzie disposal, our co-investment disposal, and the secondary also. In this environment, we managed to find liquidity and also to find attractive opportunities. We are managing our assets even in this global geopolitical environment that is not that easy, it's true.
Our next question: can you elaborate on the cost base of Peugeot Invest? Do you plan to expand the team, or are they currently well-sized?
On the first question, as I mentioned, we have our cost base that has been reduced in this first half, mainly after the reduction of the fee we pay to our shareholder and also a reduction of the cost of the team. Maybe on the size? Yeah, on the team size, there's no plan to expand the team. I think we have a team today that's sufficient to execute on the strategy that we discussed earlier. Actually, if anything, we've slightly reduced the size of the team. We had two departures that we decided not to replace. You can probably expect stable team size.
The next question is: do you have a lockup on Lineage?
In fact, we don't have the shares of Lineage on our balance sheet. We are invested in a fund that is managed by general partners. This company has been introduced on the market last year, but the liquidity process is still in the hands of the general partners that is managing this company.
Our next question is: how do you reconcile the strategy not to invest in real estate and the very recent commitment to reinvest in Immobilière d'Assaut?
Yeah, look, it's a good question, and I think it's probably a similar answer to the one that Sébastien Coquard gave on ELV. I think we want to be true to our strategy, but we also want to be good and predictable partners. When we've had discussions with our partners pre-investment strategy to commit to something, we want to stand by that commitment. This is probably the way you should read that small reinvestment in both ELV and Immobilière d'Assaut. That being said, it's clear that those two investments do not fit our focus on equity. As I said, you know, we won't exit hastily, but we will definitely look at options about the future of these two investments.
Our next question is: under what condition could you refinance the October 2026 bond of €300 million?
We will see what are the conditions on the markets to refinance this line. Obviously, we have a large amount of cash at the moment, and we have also a large amount of undrawn credit lines, which can be drawn anytime and which are there to refinance this maturity if necessary. We have a very large liquidity position, and we are quite confident that there's no issue about this maturity.
Our next question is: Jean-Charles Douin and Édouard both have a strong track record in private equity. Will this asset class be a priority for your new strategy? How do you see the PE market today?
Thank you. Clearly, private equity is one of those three asset classes we want to focus on. We think it remains an attractive category. The key for us is to be selective and make sure, it sounds obvious, but make sure you have the right risk-adjusted returns. What that means for us is investing in sectors that we find resilient, which is why we picked the four sectors in technology, business services, financial services, and healthcare, but also ensuring that we invest at the right price. I feel that's what we've done with Broad Street and Novitud, where on both deals, our entry multiple were below the listed comparables. That said, I said clearly earlier that listed investments remain a priority sector for us. We've made a recent investment in Robertet, and we think that it's got an interesting profile both in terms of valuation and liquidity, of course.
Therefore, we're still looking at opportunities to invest in listed markets.
Our last question: would you be open to a change in the holding of Peugeot 1810? Would it be more rational for this structure to be controlled by EPF?
Thank you. Yeah, it's a question we've had before. Look, I think as we said in previous calls on Peugeot Invest, on the one hand, there's no taboo about it, and I think we're happy to explore all options to create value. On the other hand, there's no current plan to do anything about it. This is a question that we should also tackle with our shareholder in EPF, of course.
This was our last question. Thank you very much for your participation. We wish you a good day. Goodbye.