Gefco to get rid of PSA shareholder
The French group’s 2017 results show fourth consecutive year of revenue and margin growth
PSA Group will sell its left 25% stake in Gefco, its former logistics subsidiary.
The French carmaker, which owns Peugeot, Citroën and Opel/Vauxhall, said that Gefco’s operational performance and the diversification of its client portfolio no longer make it necessary to have a minority stake in the capital.
PSA sold a 75% stake in Gefco to Russian Railways (RZD) in 2012 for €800m to raise cash.
RZD said that Gefco would play an integral part in a new rail freight corridor linking Europe with Asia, while Gefco said it intended to further its geographic expansion, including in China, as well as in Eastern and Central Europe, particularly in Russia. In November last year Gefco handled its first dedicated block train of containerised automotive parts between China and France and since then, Gefco has indicated that RZD was considering selling a partial stake in the company though that is not currently under discussion, according to Gefco’s president and chairman, Luc Nadal.
Gefco remains PSA’s principal logistics provider and back in 2016 signed an €8 billion, five-year deal with the carmaker, with fourth-party logistics (4PL) services for global operations featuring prominently within the contract. The deal gave Gefco exclusive responsibility for managing the complete supply chain for wholly-owned PSA activities, including for inbound, finished vehicles and spare parts logistics.
It already had a deal with GM Europe to provide services for Opel/Vauxhall, signed in early 2013. That connection was strengthened when PSA bought the Opel/Vauxhall business from GM last year for €2.2 billion.
GEFCO Group announced 2017 full year results following a strong 12-month performance; revenue was €4.4bn, up 5.1% from €4.2 bn in 2016, with EBITDA accelerating 16% to €201m.
“2017 has been another strong year for GEFCO with progression in both our revenue and profitability, reflecting the strength of our offering to customers and our ongoing drive for operational excellence” Luc Nadal, Chairman of the Management Board of GEFCO, said. “Our strategy continues to deliver growth, as demonstrated by an improvement of over 8% year on year in revenue from Market Clients. Our operational excellence programme, commenced in 2014, has made strong progress in turning around the company’s historically loss-making divisions, and reached a milestone in 2017 with both our Overland and Freight Forwarding business returning to profit.”
GEFCO’s attractive offering made solid gains across all divisions, with a significant portion of the Group’s top line growth coming from a strong performance in the Market Clients segment (i.e. accounts outside of the historical and stable PSA and General Motors mandates).
The group increased these revenues by 8.1% with significant contract wins within the automotive market coming from Jaguar-Land Rover, Volkswagen, Tesla, Audi, Volvo, Renault-Nissan, and also Carglass and London Electric Vehicles.
The company also continued its rapid expansion in non-automotive with new contracts in Food, Retail and Fashion (Amazon, Baron de Rotschild, Kiabi, LC Waikiki and L’Oréal), Energy (Gazprom Neft-Supply), Aerospace (Safran), Industrial Manufacturers (Severstal), (Life Sciences and Healthcare (Fresenius, Procter and Gamble), recognizing unique skills and capabilities within the organization. Non-automotive sales now represent over a third of GEFCO’s [non-PSA revenue].