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Wendel announces growth despite legal issues

Family-controlled investment company Wendel announced on 24 March that its revenues for 2010 saw an increase of 17.5%, despite a run of bad luck with French regulators earlier this year.

The Paris-based company, 35% owned by Wendel family members through the holding company Wendel-Participations, said in a statement that all of Wendel’s units saw growth for 2010 beyond expectations. The company’s commodities unit Bureau Veritas saw a rise in revenue buoyed by sales in emerging economies. Wendel’s stake in building materials company Saint-Gobain also paid off with a growth of around 6%.

The company attributed its growth to financial discipline and stringent cost control, accompanied by a strong position in emerging markets. But a spokesperson for the company said that despite the profits, Wendel’s cash balance remains at the same level of €2 billion as two years back during the worst of the financial crisis.

The positive results will be a welcome relief to the founding family, which was hard hit by the recession and had its credit rating downgraded by Standard & Poor’s in 2008.

To add to their troubles, the company had been fined €1.5 million in January by French regulators for providing insufficient information about how it built its share in Saint-Gobain (Continue reading here). The group, which has five family members on the supervisory board, said that it will appeal against the fine. When asked for an update, the spokesperson refused to comment.

Wendel was founded in 1704 by Jean-Martin Wendel in Lorraine. Originally focused on industry and services, the group later diversified to invest in companies dealing with steel, electronics, health, and construction. According to the spokesperson, what sets family-controlled Wendel apart from other private equity firms is that the company makes investment through its own capital, and not through borrowings.

Today, more than 1000 Wendel family members are shareholders and hold 46.4% of the company’s voting rights. Family member Ernest-Antoine Seilliere (pictured) serves as chairman of the supervisory board.

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