GEFCO now wishing to fly high
The French multinational of logistics considering an IPO to support its plan of growth
Confirming the rumours that its two main shareholders, Russian Railways (RZD) and Groupe PSA, want to reduce their commitment into the company, GEFCO have decided to explore the possibility of an Initial Public Offering (IPO) on the regulated market of Euronext Paris.
This transaction could take place in 2019, subject to market conditions and receipt of regulatory approvals and would allow the company to enhance its growth opportunities and increase its leadership position in the automotive and broader logistics sector.
Since the acquisition in 2012 of 75% of the share capital by RZD – today PSA still holds 24.96% -GEFCO has enjoyed continued support from its two main shareholders and delivered robust growth, both in its core automotive logistics business and in new verticals such as pharmaceutical, technology or industrials, in 2015 leveraging on the acquisition of specialized freight forwarde IJS Global, located in the Netherlands.
“An IPO would be a logical step in the life of GEFCO. While RZD is considering a partial reduction of its stake to potentially below 50% of capital at IPO (subject to final approval by the Russian Federation), we will continue to fully support GEFCO’s profitable growth strategy as it enters a new phase of its long history” Vadim Mikhaylov, RZD First Deputy Chief Executive Officer, declared.
Created in 2003, the Open joint stock company RZD is present in 40 countries with 750,000 employees, features 85,000 kilometers of railway lines, carries 1 billion people and 1.2 billion tons of freight annually.
“Through this transaction, Groupe PSA intends to reduce its stake to below 10% of capital but it will remain a shareholder and a key business partner of GEFCO” Philippe de Rovira, PSA Chief Financial Officer, stated.
Groupe PSA has five car brands, Peugeot, Citroën, DS, Opel and Vauxhall, and is also involved in financing activities through Banque PSA Finance and in automotive equipment via Faurecia.
“An IPO would enable us to increase our visibility vis-à-vis clients and partners and provide flexibility to pursue future growth opportunities” Luc Nadal, Chairman of GEFCO’s Management Board, commented.
GEFCO is a global leader in European finished vehicle logistics with 5 million vehicles delivered per year; the French company established can rely on a global multimodal network which spans 5 continents, 47 countries and 300 destinations, and reported consolidated revenues of €4.4 billion in 2017 (+5.1%).
The company provides integrated logistics solutions through 4 divisions: Finished Vehicle Logistics, Overland & Contract Logistics, Air & Sea and Industrial Services.
“While GEFCO continues to serve PSA’s logistics needs globally (including Opel-Vauxhall) from strategic planning support to final product delivery, the share of PSA (including Opel-Vauxhall) has decreased over the past years and represented 56% of 2017 consolidated revenues, showing the ability to successfully diversify customer base outside of its core historical client. This successful diversification strategy is also evidenced by the increase in non-auto revenues and the expansion into new end-markets: in 2017, 33% of the revenues from Value Key Accounts (international customers excluding PSA and Opel-Vauxhall) were generated from non-automotive end-markets” GEFCO pinpointed in a message published on its website. The management has also implemented a broad range of performance improvement measures which delivered meaningful increases in profitability, driving an improvement in the recurring EBIT margin from 2.0% in 2015 to 3.1% in 2017.
In the second half of this year GEFCO made three important strategic announcements that illustrate its ambitious strategy and will further support its strong growth momentum: in July GEFCO signed an agreement to establish a joint venture with Bergé, a leading player in multimodal logistics services in Spain, to create a leading company in the Finished Vehicle Logistics market in Spain; in August GEFCO completed the acquisition of GLT, the Europe-Morocco transport specialist, enabling to strengthen its position and expertise in the region while consolidating and expanding its customer portfolio, particularly in the automotive, fashion and retail sectors; in October GEFCO renewed its contract with Opel-Vauxhall, to continue to manage their supply chain for a 4-year period starting in January 2019. This contract covers all inbound and outbound logistics for the Opel and Vauxhall brands in Europe and Turkey. GEFCO will distribute parts to Opel and Vauxhall assembly plants from supplier sites worldwide and will also deliver finished vehicles to clients.