Wendel (MF) Earnings Call Transcript & Summary

Welcome to Wendel [23rd] Investor Day. As you can see, we have quite busy and rich agenda today. We hope this will help you to better understand what are the Wendel's value creation levers. For Q&A, there will be a Q&A session at the end of each presentation. For Wendel, the Q&A session will take place at the very end of this event. For those who are not in the room, you can ask questions from the web, and I will read them. Given today's rich agenda, I think it's time to start now with the first presentation by Laurent Mignon, our CEO; and David Darmon, our Deputy CEO and member of the Executive Board. Jingle please.

Great. Good afternoon to you all. Thank you for all the ones that have come here in this place where we have the Wendel team here, very happy to host you. And welcome to all the ones that are on the webcast and are viewing us on the web. Thank you all of you who have put some time and given some time to us to listen to this Investor Day. So we're very proud to have you. Very proud to host you with a great view of Notre-Dame. You can see, Notre-Dame is reopening tomorrow. So that's a great period to be here in Paris. So very happy. We're going to spend the day -- well, the afternoon to try to illustrate you how much the Wendel business model has evolved and how much it is more value-creating and will generate superior value to our shareholders. So that's very important. So you will hear some of our company's CEOs that will be here. Some of the companies that you already know, like Stahl and ACAMS, with the brand-new CEO of ACAMS is here. But also about new companies that you've not known like Globeducate and the principal investment part and also from Monroe Capital, which is a new partners that we've had on the asset management business. So I want to thank all the CEOs that have made themselves available to be here. I know they have a lot to do and we hope they have a lot to do. And -- but it's very -- we are very proud to have them and we know how much it is important for you to have a direct contact with them. And please take the opportunity to ask direct question to them during the Q&A session. That will be important. Okay. So let's move to this first slide. It's a pretty busy slide. So I'm not going to go through all of it, and it's, I think, our Investor Relations people love it because everything is on it, but I will only concentrate on a few numbers, but this is a great illustration of how much the Wendel model has evolved over 2 years. And I will concentrate on few numbers. Number one is asset under management. You've seen from the slide that we're managing close to EUR 40 billion. But if you take third-party asset management, we were 0, 2 years ago, we are EUR 31 billion today. If you think about fee-related earnings, FRE, we were 0, 2 years ago, we are EUR 160 million today on a consolidated basis. If we only take our shares from Wendel, it's EUR 101 million of fee-related earnings. And you remember that we have the objective to have EUR 150 million of fee-related earnings by '27. We can reach this number only with the 2 companies that we have based on their organic growth and capacity to develop themselves. So that's a big, big change. This change, I think, has allowed us also to create sustainable value and to increase our dividend significantly. We've increased our dividend from 33% last year, and we will continue on to reach midterm 3.5% of our NAV, as we stated in our strategic session. And one way to illustrate the last 2 years and how active we've been in terms of transforming this business model is a few numbers. Maybe we can go back, see them, yes, here it is. We have made EUR 2.6 billion of sales, asset rotation, dividends received. That's the money that we received or free or through selling assets, EUR 2.6 billion. And what did we do with this EUR 2.6 million? EUR 1.2 billion was invested in principal investment companies, Scalian, Globeducate, and I think David will come back to CEO and how much our principal investment portfolio has been reshaped strongly over the last 2 years in terms of delivering growth and superior profit. But also EUR 1.4 billion has been invested in asset management GPs in order to shape and transform the system, EUR 1.4 billion. And the rest EUR 420 million is for you. EUR 420 million has been distributed to the shareholders, either through dividend or through share buyback and we will do more in the future. So I will leave the floor to David. David, you will go through the principal investment reshaping, and I will be back on stage later on with Cyril Marie to explain you what we do on the asset management platform and where we go into that. Thank you very much, David, the floor is yours.

Thank you, Laurent, and good afternoon, everyone. So yes, let's spend a few moments to see how the portfolio of principal investment assets have changed since 2022. Actually, a lot has happened. We have sold a few companies, namely Constantia and Preligens in the growth portfolio. And obviously, we did a partial sale of Bureau Veritas shares. At the same time, we made some new significant investment in Globeducate and Scalian, and that has changed quite significantly our portfolio. If you look back in 2022, we used to have a 30%-ish of our assets in the industrial sectors with probably lower growth than the tech and business services part of our portfolio and with a higher capital intensity. We sold Constantia. Actually, we closed that divestiture early this year. And so the share of industrial assets was reduced to 18%. In the meantime, we grew our professional and education training and tech part of our portfolio from 19% to 30%. This part is obviously having a faster growth and a lower capital intensity. We're going to see that in a moment. And so you can see that the profile in terms of growth, in terms of capital intensity has changed quite dramatically over the last 2 years only. For some assets, which are on this chart, even if you don't see a change, a lot has happened. And for instance, Maarten will talk about Stahl. And really, we have a new Stahl here and the Stahl that you see in the right column is different from the one on the left column. So both by changing the mix and by doing a lot of things in our portfolio, we are changing the profile of this group of principal investments. Just before I turn to the next slide, I will just mention that the 3 sales that we did were done at -- with good returns. We sold Constantia for a 10% return over a long period of time, over 8 years. Preligens was actually on a short period of time, but showing a 28% return. And Bureau Veritas, which has been invested company for 29 years, the partial sale showed a 25% return over that long period. So a pretty good track record of divestitures over this period. I'm going to focus on Scalian because today, we don't have the Scalian team with us. Just a quick reminder of why we did invest during summer 2023 in Scalian. We think it's a very attractive space. It's a very large, growing with strong tailwind space and a very fragmented market with a lot of companies. So when we buy and invest in a strong company, we have plenty of opportunities to do M&A. And so we can grow both organically and in terms of M&A, which is really what we're looking for. So the digital engineering at this core is for us a good market. It is cyclical, but that's very strong and good fundamentals. The customer base of Scalian is of top quality. You can imagine the best engineering company, the Thales, the Safran of this world, our customers of Scalian and have a long-term project repeat book of business with Scalian. So we can work for years with these customers, which is very attractive as well. There is also a very strong entrepreneurial team, which grew the company sevenfold over the last 7 years, so equipped to large -- to drive very, very strong growth. So we were very excited back in 2023 when we invested in Scalian. We are still excited. But what we saw in 2024 was actually a bit of a different story because I mentioned that the digital engineering is a cyclical market. And almost as early as we made our investment, the markets actually enter a downturn. And so for 2024, both Scalian and its peers saw actually some headwinds, the listed peers showed some negative growth or flat growth. Scalian also had a flat organic growth during that period. The industrial customers, I mentioned earlier are facing some difficulties, namely the automotive industry is going through a tough period, especially in Germany. But other industries, which are also have some strong tailwinds and strong backlogs like the aeronautic industry have some supply chain disruption, and so some projects are delayed and this is hurting Scalian. So we still remain quite bullish on the long term, but we have to acknowledge that during 2024, we had some headwinds. And so we focus with the company on protecting the margin. There was some short-term action on cost containment, on obviously, on cash and DSO, but at the same time, we work with the company to continue to play the long term and deploy our value creation plan, expanding in the U.S., investing in some center of competencies. AI, sustainability, the IT/OT convergence to pave the way for future growth. At the same time, we also funded the company to make 2 acquisitions, 2 bolt-on acquisitions in some very interesting areas. Dulin is a cybersecurity specialist for the banking industry. It is based in Spain. And MANNARINO is based in Canada. It's focusing on drones basically. So it's seeing a lot of growth and very strong margins. So we are very happy with these 2 acquisitions, which are going to complement Scalian offer. I will briefly go through CPI as well, Crisis Prevention Institute, which is a company that you know well because we invested close to 5 years ago. We signed this investment in 2019. We closed early 2020. And then a few weeks later, COVID hit. So the -- you remember that the beginning of our investment was bit hectic for the safety of our customers and our staff. We actually shut down training for a couple of months. So 2020 saw a decline. But you can see that the rebound was in a V-shape format, and it came back to its natural growth trajectory. Overall, the company is growing double digits since we invested. We increased slightly the margin. And so you can see that the bottom line grew by roughly 15%. The company is with a low capital intensity, it's generating a lot of cash. And so we did this year, the first dividend recap for CPI and we distributed roughly EUR 100 million for Wendel share. 2024 is actually showing a slight slowdown. We believe we're going to be high single digits rather than double digit, but it's still a healthy growth from CPI. At CPI, the core program that we backed is still growing. It's called the -- sorry, the Non-Violent Crisis Prevention program, which is the core of what CPI is doing. But we're also developing new programs, and we are launching a new strategy for new customers. We mentioned last year that we were developing a prototype for the retail industry, and this is getting some traction. We are trying to address the social services as well in the U.S. at the same time, developing new products. So we are pushing and developing the core training of CPI, but we are also developing adjacent program and addressing new customer base. This is a new slide for this year. We wanted to give you a feeling of the performance of our investment companies. This is based on our latest NAV. So this is not an external fair market valuation. We took the valuation that we have in our books. But it gives you a sense of the performance of those investments as of today for the main assets. We only here put the control assets, which represent 94% of our gross asset value. As you know, we also have other holdings, but they account for roughly 5%. You can see that we have some very strong performer like Bureau Veritas, which is showing in our book a 25% return, but over a very, very long period, more than 29 years. We are probably at close to a 15x multiple on our initial investment. Scalian is very recent. It is slightly valued under the cost. The EBITDA has been growing since we acquired the business, but the public peers saw some multiple contraction over the last 18 months, and we took that into consideration in our valuation. CPI, as I mentioned, has its earnings growing mid-double digit. So with no surprise, you can see that as of today, it's showing a 15% return. ACAMS is also quite new in the portfolio, less than 3 years. So the return here is probably less meaningful than for a long period. But it is double digit at this stage. And Neil and Mariah will tell you more about the long-term prospect, but we believe we can increase this return. Globeducate, we just made investments. So obviously, it is at cost in our portfolio. And Stahl, a very exciting return of a very long-term period, 18 years, delivering 15% per annum through this very high cash generation, strong growth profile. So it has been delivering year-over-year for quite a long time. Very briefly, in terms of ESG performance in our portfolio, I'm going to be short because we have actually a new roadmap for our ESG strategy, and we're going to get back to you early next year. But suffice to say that our results in 2024 are of the same quality than 2023. In terms of rating, you can see that we have maintained some very high standard, even improving on some of them. So we're pretty proud of the work, which is done in every portfolio of companies to be a very good performer here. Now. Olivier I think that we -- yes, we're going to introduce Globeducate. So if you could send the jingle, please? So I'm very pleased to introduce you to Globeducate, our latest investment in our principal investment portfolio. As you know, Globeducate is a leading K-12 operator. So it's managing schools from Kindergarten to 12th grade. It's a global operator. It operates in many countries, and it's focusing on bilingual education. We have invested over EUR 600 million in the company. And today, we are the co-controlling shareholder with Providence Equity. I'm going to introduce now Luca and Julie. So Luca is the CEO of Globeducate. Luca joined in 2020 as CEO of Globeducate and Head of Italy. After a long career in fast-moving consumer good industry, both at I think Unilever and Barilla. And so we are very happy to have you to run Globeducate. And Julie is a more recent hire because you joined a few months ago. And Julie is heading France, Netherlands and Morocco for Globeducate. So with no further ado, the floor is yours.

Thank you. Good afternoon, everyone. [Presentation]

So good afternoon again, from my side. We are here to introduce Globeducate. As David was saying, Globeducate is a leading European K-12, so kindergarten up to the diploma, year-12 diploma of premium bilingual and international schools. We -- some key numbers, we serve more than 40,000 students across the globe actually in 11 countries with 127 nationalities. We have more than 4,000 teachers and -- that teach curricula. Some financial figures. We generate EUR 440 million revenues with EUR 96 million EBITDA. We have a cumulative annual growth of 16% like-for-like in the last 5 years with an EBITDA margin of more or less 22%. Cash conversion 90%. On the top right, you can see 3 very important numbers in the education industry. The first number is 8.2 years average student tenure. What does it mean? How many years each student stays in one of our schools. 8.2 years is a very high number. This is I would say, clear KPIs that shows how resilient is the business. If we deliver our promise, the students will be with us for a long period of time. The second number is the average student retention. So what is the percentage of the students that are with us and decided to stay with us also for the following year. So 88% of our students are with us also the following year. What does it mean? Our business is very predictable. So resilient, predictable. 7 years is the average staff tenure. So how many years each teachers, which are essential to our business to deliver the service, stays with us. This is -- these 3 numbers are well above the industry average. We talked about the picture. Now this is the journey, okay? And the journey is basically the past, the revenue growth. we started. So if you look at the COVID here, 2020, we were at EUR 260 million revenues. We are now at EUR 440 million. This was an exceptional growth, driven by both organic and not organic through M&A. To keep it simple, M&A is simply, we buy school. We do not buy companies. When we say acquisition is a new school that is a new partner for us.

Good afternoon. So to complete what Luca was saying, we have -- we are first a European company, and we have 41 schools across Europe, the biggest country being Spain and France. And then we have 10 schools in Canada, where we also have a strong position. And in India, we have 13 schools. You also see on the chart, Morocco. Morocco is a place where we have French bilingual schools. And we started a partnership with AEFE, so the Agency for French Education Abroad, and it's really a way for us to develop our schools and the group.

Yes. So the -- if we have to summarize what are the key messages that we would like you to take away. So we stands for a bilingual -- a group of bilingual schools, and we wanted to be the group of choice for parents, staff and school funders. And we will talk about it in a second. 3 numbers, we have already discussed it. We are primarily bilingual school. So that means that our target are not expat families that tend to move every 2, 3 years that are very attractive from a financial perspective, but are very volatile as a customer base. Our customers are local family that we wanted to invest to give their children a very, very good, very high-quality education. And this is a very, again, sustainable and reliable business. 60% of our graduating students eventually choose to graduate with a local curriculum. Of course, we manage the 67 schools and the different curriculum in brand cluster. Brand clusters are cluster of schools that can share a lot of learning, best practices, operating process. This helps also to reduce and improve the efficiency of each school. Last but not least, you need to consider that there are a lot of action, a lot of things that we do at the global level, at a group level that helps also each student to be part of a large organization and to have really great opportunities to learn. As you can see in the bottom right, these are 6 big events that we do globally and to make the story short, these are Olympics, okay? For music, for sports, for academics, where more or less 6,000 students every year, they meet in different parts of the world and they compete. It's not a national competition in France versus -- against Spain, but there are mixed group of kids that they share the experiences with other peers.

So in our industry, the quality of education is key. So we are achieving very good results in all of our schools. In average, we're always above the average of the diploma in all of various schools. To give you an example, for example, for IB, the IB succession rate -- not succesion -- success rate would be 80% across all the IB schools, and we achieved 91% in our IB schools. Or for example, in France, for the Baccalaureate, we have more than 36% of our students who graduate with the [Foreign Language] so the high honors when the average would be 9% total France. So we know -- we really deliver this high-level education, but this is not the only important thing for us. And as Luca was saying, what we really want to measure is how we build the citizens of tomorrow, these global citizens. And the most important figure in this chart would be the 87%. So 87% of our students are admitted into their top choice university. And this is really for us the key factor of our success. And when we say that choice, it's not only -- it can be anything, but it's also the top universities in the world. And as you can see just below we have students who go to all the major American university or the major European ones, and we can be very proud of their success. So how is our market growing. So it's quite -- it's a big market, but very fragmented one. We have a strong issue in this market. It's the demographic issue, especially in Europe. And as you know, the demographic trends are getting lower, especially for the kids. And for example, Paris has lost 10% of its kids in the last 10 years. So we know it's an issue in this market. But we are on the good side of the market, and we have really strong tailwinds like in the private education, which is growing in all of our markets, and we're taking a bigger share in this market with our international and bilingual schools. The market is fragmented. So it's a lot -- you know the catholic schools, for example, are a big part of the market. But there are a lot of really small schools that have been funded by former teachers, family who started the schools in there -- Luca used to say garden, but it can be in the kitchen also, and who have made this school grow year after year. And now there is this time where they want to change and try to do something else. And for us, it's a lot of opportunities. So it's a market where we see a lot of room for growth. So the key takeaways that we would like to share with you. So we are in a large and fragmented, but growing market. So even if demographic goes against us, we are on the right side of the market. We're strong in Europe, and we focus on this bilingual indication, and that makes a high difference with our competitors. We have a strong culture within the company, which is very good, it makes the students and the staff being satisfied and stay with us for a long time, and we are a people business. So this is key for us. Globeducate has built a platform. So we are very strong in some of the important aspects of education. The first one is safeguarding. So safeguarding and child protection is very important, and it's something we share all among the schools. And while we are strong on ESG, and we have a very strong management team, as you can see, for today. We also have, on the financial side, we have a high-quality infrastructure. And we own a part of our real estate and this accounts for EUR 325 million. So we have a strong asset. And we have been having a very attractive financial performance for the last years, especially in M&A, and Luca is going to comment on that.

Yes. So well, first of all, our priority still remains the organic growth, okay? So this is the most important thing and the revenue growth that you see -- that I showed you at the beginning of this presentation is a very clear result. But it is true also that we grew also by acquisition, and also greenfield. Acquisition is buying school, simple. On the other side, greenfield is very much about building capacity from scratch or building an expansion in the many schools. In terms of M&A, we did 23 acquisitions for both M&A and greenfield, we are -- we have delivered over the plan across all the different activities that we have done in the last 5 years. M&A formula, we have a very clear formula. We wanted to buy schools that, first of all, mainly in the countries where we already operate. Julie was saying that 83% of our EBITDA comes from Europe. So priorities #1 is to become stronger and stronger where we operate, where we have already an operational team that can look after a new business. We bought -- we acquired EUR 5 million EBITDA every year in the last 5 years, and we wanted to keep going with this pace or even faster. It's important to say that the reason why we are capable to do so many acquisitions is also because of our story. We -- when there is a school which is on the market, we know there is a lot of competition, but we tend to buy school because of our credibility in terms of what is the story that we tell. The potential, the founder that became also a seller. The reason why they should sell to us is because of the credibility and our reputation to protect the legacy and to offer the students of the school much wider opportunities, which are similar to what I discussed before. In terms of greenfield formula, we invested more or less EUR 30 million every year to build up new campus or to build that expansion to new campus. Imagine you have a primary school, we build up the middle and the high school, for example. Or sometimes, we enter the market with a new investment from scratch or in some cases, like Cyprus, we started with an acquisition and then we built a 5 years growth in expanding the capacity of the school in many, many cities. So basically, some numbers will look to generate 30% ROIC implying EUR 10 million, EUR 12 million run rate EBITDA potential per year. Even the business plans are self-funding and also in this case, across all the different investments that we did, that we didn't, we have done and we are doing, thanks also to Wendel, we will create 9 -- so 10,000 seats, which basically means seats, desks or students in the next 5 years that will represent 50% of the EBITDA in 2030. I don't think that we need to spend a lot of time on this. These are the number of acquisition and also give some color to the acquisition that we made in the last 5 years, the 23. As you can see, there are many, many acquisitions, mainly in Europe. So Italy, Portugal, Cyprus, where it was a new country or an expansion of the countries where we operate. Recently, we also bought some schools in Morocco. But in Morocco is not the country per se, as Julie was saying, are French school abroad, which is basically also a very good path for the future for our company. So conclusion, this is a sustainable business that has a real purpose because when we say that we prepare each student to become a global citizen who can shape the world, this is a very important purpose. Second is strong, predictable and largely protective from macroeconomic risk. It's a unique opportunity to invest behind the large international players. There are not so many players in the market. There are many small funders. So there is -- it's -- you see the value of some -- to be big. There is an attractive financial profile, as also Julie was pointing out with a long-term growth and well-appointed asset base. And we have a very highly committed team, and now we have also a very highly committed shareholders. Thank you.

Thank you, Luca and Julie for this presentation. So now it's time to turn to Q&A session. This session will last roughly 10 minutes. But let's start with 2 questions from the web to allow the mic to circulate around the room. First question from the web. Do you face a strong competition in M&A strategy?

So I will answer that. As Luca was explaining, we are in a market where M&A acquisition is really occurring a small school or bigger school, which has been founded by someone who is still there holding the school. And our first step is really to convey the founder that he can sell. So that's can take a lot of time. And I think that as being a big group of schools, we have a lot of stories to tell them. We know how to connect with them. We know how to talk about pedagogy, academics. So it makes this bond. So we convince them to sell and then we convince them to sell to us. So we are very good on doing these 3 steps. So there is a lot of competition, but we have strong assets to come back and to get more schools in our portfolio.

Thank you. Another question from the web. How does artificial intelligence impact the education industry?

I need to consult ChatGPT to give this answer, if you don't mind. No, this is a quite relevant and important topic. It's a hot topic. So at the beginning, when there was the boom of artificial intelligence, the big institution, even IBO, which is International Baccalaureate Organization in Geneva or Cambridge, they were very much against artificial intelligence because it was associated to the capability of students for cheating, very simple, okay? We think that the approach has to be totally different. That is always the good, the bad and the ugly. We need to promote the good. We need to protect from the bad and ban completely the ugly. The good is, you need to think about students and teachers. Students, artificial intelligence can be a booster for learning, okay? A stupid example because I've seen this in practice, in the school, if you have French student that has no contact with the Chinese members of family, when he or she go home, he can have the opportunity to have some counterparty that speaks Chinese. This is something that is not possible with other members of the family. On the other side, there is a good way to improve also the quality of teaching. Not all teachers are very good. and AI can really help to focus, for example, the lesson on the key points and also how to deploy it in a very good quality teaching session. It helps also from an efficiency standpoint because AI can provide you the tool to take care of the duties of the teachers so that the teachers will spend time in front teaching with the kids. So they don't need to spend time on the bureaucracy on duties, whatever, because the added value is in the classroom. So these are very simple experience on the good. The bad is that, of course, these -- someone can use artificial intelligence to create some short cut, which is not great. And there is also the ugly, the privacy. There is someone is the distortion of the using of AI at the school with small kids. So we are not completely against that, but we are very cautious. And of course, this is not a general rules depending on the different age of our students in the entire -- entire curriculum path.

So thank you. I think someone has the mic.

Arnaud Palliez, CIC. I have 2 questions. The first one is on location of school is, of course, very important. So I would like to know what is your real estate policy. And do you secure this at some point? So that's the first question. And the second one is, it seems that you keep the local brands of each school. So I would like to know what is shared between the different schools and how the Globeducate brand is shared between your schools?

I will try to answer some. Okay. So real estate matters, yes. Today, we have, I would say, only EUR 325 million, I would say, property million euros spent in properties in buildings, more or less, we rented. The location matters when we buy a school, but is not really the key selling point because, for example, in the vast majority of the international school across the globe are outside in the center of Paris because this is -- outside of not Paris -- outside of big cities, simply because there are more room for having outdoor learning, to have large campuses. It's difficult to have large campuses in the middle of the city. So I will say that the location is important because when we buy a local school, but in the future will be less and less important. It is also different between the primary and the high school. High school, if you ask your students to go to the school by -- with the family, they will hate you. So they need to take the buses or the subway because they don't want to see the parents around. So -- but with the small kids, it's much more important to be local in the cities. The second question was about the branding and the Globeducate. So every time that we buy a school or if we have a school, we needed to have a plan of shared resources to share also to explore the economy of scales. We have 6 to 7 brand clusters. That means, for example, the bilingual French-English schools, they are a cluster. So that means that they share resources, the share learnings, they share the operating processes, they share the same brand. When we buy, for example, in English school in Bilbao in Spain, and it is called Queen Mary, St. George's and sometimes other Prince-something, but this is more or less 90% of the names of the school. We converted into British school of Bilbao. British school with one single logo, one single brand. Globeducate is always in every communication that we do because this is a way to promote the culture of the company, not only the single brand cluster.

Geoffroy Michalet from BHF. Coming back on the economies of scales you mentioned, in the next 7 years, how would you quantify the economies of scales and where the kind of EBITDA margin could land in your view?

There is -- I would say there is a good path to growth. We -- I think that it'll go -- it will go up, okay? Now, it will go up. Good? I did it.

Okay. That's a good answer. We have no other questions from the room. So I have questions from the web. Have you reassessed the valuation of your real estate given the collapse of the value of real estate in Europe?

Yes, we did. Also because of the recent acquisition, we call the 50%, this was properly reassessed.

What is your company debt level today? And what is the average cost of debt?

So today, we have a net debt of EUR 610 million which leads to leverage of 6.5x.

Okay. And one last question from the room.

I had a quick one, please. The contribution of pricing to top line growth and maybe average pricing per year per , please?

So average price per student will be a misleading information because we have schools that have EUR 5,000, EUR 7,000 per annum to someone that is up to even to EUR 30,000 per annum. So it's going to be -- on average, it doesn't help to give you a real sense. In terms of organic growth, it's a 50% price increase, a 50% volume increase where volume is number of students. It's exactly 50%.

So very last question in the room. Sorry, we have 30 seconds left.

Alexandre Gerard, CIC. One question related to demographic trends. We can hear that in France, for example, the Ministry of Education is starting to cut the number of teachers in public schools because of negative demographic trends. Is it something that you also face?

Our students are growing. The number of students...

The demographic trends, can you see anywhere else in Europe also negative trends impacting your business?

Yes. So if you look at the market, it's clear that the demographic trend, especially for the little kids, is showing a negative decline, okay? If you look at our business, we are growing in terms of number of students. So this is, I will say, headwind that is, of course, that we need to look at. But in terms of market share, there are more kids that he decided to leave the public system to join the private system. But yes, to your question, the demographic trend negative is everywhere -- sorry, excluding Morocco and India.

Thank you. Time is over. Thank you for your time. We now welcome Neil Sternthal, CEO of ACAMS; Mariah Gause COO, introduced by David Darmon. Jingle, please.

Welcome, Neil. Welcome, Mariah. As you know, ACAMS is the leading membership and training organization for anti-financial crime professionals. We invested in 2022 in ACAMS, a bit over $338 million. And during 2023, most of our work, as you remember, was to carve out the organization from its former parent at Adtalem, which is a U.S.-listed education company. So that did take a lot of time from the management team. And so that was a story that we told you last year. It's all the efforts we made to create a stand-alone entity. The story of 2024 is going to be very different. You're going to hear from Neil and Mariah, a lot of exciting things about the future and what they're doing for growth. And so we are very pleased to have you. Just a quick word to present your background. So Neil joined the firm earlier this year, 11 months ago, I think, from Thomson Reuters, where he was leading the large law firm organization. And Mariah, as you know, has joined the firm 4 years ago, and today is the COO of ACAMS.

Good afternoon. It's such an honor to be here before our investors today. So thank you for this opportunity. I thought it might be helpful just to share what motivated me 10 to 11 months ago to join ACAMS. And the first aspect that was incredibly inspiring was just how mission-driven and purpose-driven this organization is in its efforts to help combat financial crimes. Second, it's a global business. And unfortunately and fortunately, it's in a growing market. And I say that because financial crime is predicated by horrible offenses like human sex trafficking, illicit arms trading, terrorist finance and fraud, of course, and a host of other things. So the bad is when our market gets bigger, it's because bad things are happening in France, in the United States and Canada internationally. The good as a business is we have a lot of important work to do for our community that we support. But we have a lot of opportunity to do far more for the community to help them be much more effective in combating financial crime. So that was really exciting for me, and it is for my colleagues at ACAMS. And as well, ACAMS represents best-in-class capabilities for the anti-financial crime community, both products and services. And that, too, is really important in terms of our growth strategy. So let me share just a little bit more closely about who we are. We're a trusted global membership organization whose market reach extends far beyond the 115,000 members. We have community members who consume our information, our thought leadership. They attend our conferences, they take our trainings. So the influence that we have is broad and vast, and that's a great responsibility of ours, but it's also a great opportunity. What we do is we provide best-in-class certification, training, education, thought leadership and conferences, opportunities for the community to gather both nationally and internationally. And that too, in some ways, we think we're in some ways the heart of the community, by bringing it together and providing best-in-class services. So who are our customers? They're regulated entities, a large portion of our customers are banks and financial institutions, but also cryptos and professionals. They're regulators all around the world. They're law enforcement agencies and professionals and technology vendors and consultants. And just to take it very close to an individual who Mariah and I meet regularly at conferences or in meetings, individuals want our training and certification to advance their careers and to demonstrate their credentials. Their managers or heads of department want their people to have these credentials from ACAMS because it engages their employees. It underscores their compliance organizations or agencies as a great place to work. And of course, it's evidenced to show that professionals are upholding a compliance culture to help prevent anti-financial crime. ACAMS is the gold standard in that regard and serves our membership very, very well. So why does the ACAMS matter? Well, I'm surrounded by 300 or so employees from around the globe who are incredibly passionate about what they do in terms of combating financial crime and serving our customer and our membership base. As well, our membership customers and community are equally passionate about combating financial crime. And cohesively, our missions are united and aligned. And when we're successful as a community, we're literally making the world a safer place. So that's why we matter and we're very, very proud of that.

So as Neil said, this is a growing space, and it's highly consequential. The anti-financial crime spend is estimated at more than $200 billion and is expected to grow 15% per year. This space is complex. The threats are evolving, the pace of regulatory change is fast. We are also seeing the expansion of the regulatory perimeter, meaning that we're covering industries today that we didn't yesterday, things like accountancies, consultants, lawyers. Geopolitics also directly impact our business. I think we can all agree that there's a lot of change in governments happening around the world. And when there's change, it comes with uncertainty. And when people are uncertain or navigating that change, they look to information and organizations that they trust. And in the AFC space, that's ACAMS. I'd also call your attention to the numbers on the right side of the page. The cost of non-compliance is expensive. But I'd also point out that these are just the fines. The cost can be even greater from a reputational or a brand perspective. So all of these factors together really create the opportunity for ACAMS. So how do we serve this community. Our business has 3 pillars that work together to create a toolkit for the AFC professional. If you start with educate, this hosts our industry learning -- industry-leading certifications and certificates in AML, sanctions, crypto and fraud. It also hosts the ACAMS' AFC Academy, which is a set of tailored learning paths that are structured for certain segments or role types that help an individual personalize their learning and development. In the middle, you have inform. As I've said, this is a rapidly evolving space. And so people need to stay current. And you can do that through our membership offering, where you gain access to webinars, white papers, toolkits. We also have a very prolific editorial and news program. And then finally, we have convene. And I would say that this is our greatest strength. It's our community. We have 115,000 members globally. But we don't think about that as the start and stop of our community. We think broader. It's our customers who aren't necessarily paying members. It's our future customers. It's people who are simply passionate about the cause. And so we look for ways to bring all of these different audiences together and find ways to serve their individual needs. We're also oftentimes known as neutral turf. And what we mean by that is we create a safe space at ACAMS, where non-traditional groups come together like public and private, or competing financial institutions, all in one room to share information, to share their challenges and maybe more importantly, problem solve. So together, all of these 3 pillars really create the foundation of value that ACAMS brings to the AFC community.

Just to emphasize the power of convening. I just wanted to share an experience that Mariah and I had several months ago. We had published our first Global Threats Report. And we had a closed session roundtable hosted by our Head of Thought leadership, bringing regulated entities, large global banks and regulators together. And the problem that we had hosted to help them resolve is effectively, at some point, the war in the Middle East, specifically in Gaza, is going to come to an end. And financial institutions, the regulators said, are going to be expected to help facilitate humanitarian reconstruction finance. And the banks in response said, well, we would love to be there to support that worthy and important cause. However, it's very risky for us because of the fear of finance winding up in the hands of bad actors, terrorist organizations. So basically bringing the 2 counterparties together as a community, as Mariah was explaining, hosted on ACAMS' turf was there to solve really serious consequential problems. And of course, our influence extends far beyond that because many members or employees in their respective organizations, be it public or private sector or professional services. So we have a great foundation to build upon. We're best-in-class at what we do. We're a trusted brand globally. We have community reach, as Mariah was sharing, and we also have subject matter expertise and mission-driven individuals, employees in our organization. This galvanizes our core of who we are, what we are today. But there's much more that we can do, and there's much more that we are doing and 2024 has been a big year for that, and we'll get to it in a moment. But when we look at our operational effectiveness, there's room for improvement. There's ways that we could scale, we could adopt technology, we could align groups to have greater impact to support our growth ambitions and aspirations. The content that we create, which is proprietary, today is supporting our training, our education, our thought leadership. But it's really hard to find beyond the confines of our specific products. So we believe we're sitting on extremely valuable proprietary information that can be accessed and exposed for greater benefit to our community, to our end users, our customers and our members, and that presents a very exciting opportunity for us. Of course, it's 2024 enabled by innovative technologies like machine learning and artificial intelligence. From a community perspective, Today, we feel entrusted and responsible for our convening function. And we have -- we protect that very, very carefully. But we believe there's far more we can do as well to serve the community and to provide new types of insights and services. So all of these new opportunities are really about leveraging our foundation and going beyond what we do today with it. And we're really, really excited about that. So let me share a little bit about what we've been focused on since I joined in early January to transform ACAMS and position it for greater growth and impact. First, talent is everything. We've looked very carefully at our talent, and we've invested in it as well as in our leadership team. And that -- and we're building our future on people who are very growth-oriented, customer-oriented and recognize the opportunity and the responsibility that ACAMS has to do more and to do bigger. We've also focused on our products. We're really proud of our recent release of fraud 2 weeks ago, which is a new market for us to explore. So it's a market expansion and the early indications from our customers has been extremely positive. So that's -- we see that an important development. But we've also been investing in our AML certification, which is really our franchise product, CAMs. So CAMS is -- our next-gen CAMS is in the process of being finalized and will be released in 2025. We've launched a new learning management system that helps our end users, both individuals and administrators have an easier user experience in terms of engaging with our solutions. And of course, we are committed to ESG, and we're very proud that our scholarship program has been extended to applicants in France, in Africa and also U.S. military veterans this year. And then finally, operational efficiency, which I mentioned a moment ago, we're investing in how we align around our best opportunities and also how we operate in ways that allow us to do more with less also applying technologies. And Mariah will share how we're looking at 2025.

So what we've started in 2024, we're continuing in 2025. We're really prioritizing driving cross-functional collaboration because we believe that that's critical and foundational to us being able to execute on the rest of these priorities. Technology innovation is another priority for us. And it comes in many forms from rethinking our e-commerce journey, to looking for other ways to realign our content into more navigatable, discoverable ways. As Neil said, there's a lot of opportunity that sometimes just can't be found. It also involves AI, which we know is really exciting. And we're looking to apply AI on top of our proprietary data in order to help support the AFC community. We are also using AI for internal productivity initiatives, and we are really excited about the art of the possible. From a market expansion standpoint, as Neil was talking about from a fraud market, we think it's a tremendous opportunity for us, as is the nonfinancial user communities. And then finally, from an APAC perspective, we have a new leader in the region who is helping us to develop a fresh vision for a very important region to us that's going through a tremendous amount of change. So we clearly have a lot going on at the moment. So how does that translate into our financials? So our revenue CAGR through June 2024 is 8%. And the growth has primarily come from a return to in-person conferences, memberships and certifications in the Americas and in Europe, Middle East and Africa. In 2024, we have seen a slowdown that's primarily driven by APAC and their economic headwinds. From an EBITDA perspective, as we separated from Adtalem, we were able to shed some of those outside costs and leverage operating efficiency in a much faster way than we had expected, resulting in our EBITDA CAGR of 18%. Now with that, as we've been saying, 2024 is a bit of a year of transformation. We have upgraded commercial roles. We have made changes to our broader go-to-market strategy. We've introduced new products like fraud. And with all of those changes, we believe that they are laying the foundation for future accelerated growth. These investments are also contributing to the relatively flat EBITDA fiscal '23 when compared to last 12 months, '24, June '24.

So to conclude, we have done a lot of change in 2024. But we have a lot more to do. And I think any successful company that just rests on its laurels, runs the risk of obsolescence or disruption. So we're very ambitious about -- we've been very ambitious about making moves and some tough moves in 2024 to position ourselves for growth to build off of that foundation of what we already do today, and we have every intention of only doing better and more profoundly. But with respect to our priorities to drive growth and profitability, as Mariah was saying, market expansion, fraud is a great example of it, but it goes beyond fraud. As the regulatory perimeters expand, more practitioners will be included and subject to regulatory review. We see that -- we see opportunity to grow within our existing markets, but to expand as well as the scope of regulatory change applies to more practitioners. So that we see as an important area for growth. Technology-enabled content. As we said, we believe we're in a unique position to have both brand -- trusted brand, global reach and proprietary information. And we could do much more for our customers and our members, and we could also do much more for our shareholders, we believe, by harnessing and exposing the scope and breadth of that corpus of information. The community, there's far more that we believe we could do to provide solutions and insights to help heads of -- to help practitioners understand more about themselves their effectiveness and to help them succeed and be more effective. So that's an area as well that we're excited to pursue. From a go-to-market perspective, we evolved as a B2C business. That was our muscle, that was our rhythm and our practice. Our client base is largely global and large enterprises. And that requires -- and is an opportunity for us to do far more efficiently and also a much better experience in terms of engaging with our customers. So we are actively focused on driving growth by shifting to business-to-business, and also focusing on enterprise subscription type commercial relationships with our largest customers. From an operational efficiency perspective, as Mariah was saying, technology is not just about what we do with our content. It's also what we do with our own operational effectiveness. How do we do more with less. How do we remove friction. How do we allow the organization to scale to align with our growth ambitions. That's critically important to us. And as part of that lens, it's really -- it's technology, it's business processes, but it's also best shoring, intelligently choosing where work should be done onshore in our core markets and elsewhere where it could be done more efficiently. We see that as one of our opportunities to drive margin growth. So to conclude, we believe we are sitting on a trusted platform, a trusted foundation that we are enriching and strengthening, but using to go further and farther, ultimately to help our customers succeed. And that, too, is something that I think is very special about our company and the previous company that I worked for. Our values and our mission to help combat financial crime are aligned with our customers and our members value and mission to combat financial prime. So a growing and stronger ACAMS is both good for our shareholders and our employees, it's also good for our stakeholders, which are both, as Mariah said, that broader perimeter of members, customers and employees. So with that, I thank you for listening to us. We're very proud to be here. Passionate about what we do and happy to answer questions.

So thank you, Mariah and Neil for this presentation. It's time to turn to Q&A session, roughly 10 minutes to do that. We'll start with a web question to let the mic circulate in the room. So the first questions from the web is, how do you expect the change in U.S. presidential administration to impact ACAMS?

Okay. So as Mariah shared earlier, we are passionately neutral because to be Geneva and to be the meeting ground, our tent needs to be wide for us to be effective because our common mission is combating financial crime. So with any change of administration -- well, first of all, Trump won was actually -- his administration was quite effective and diligent about upholding regulation, enforcement and penalties and fines with respect to financial crime and also sanctions evasion. So that's interesting. And with respect to the new administration, one thing that we're sure of is that there will be change, we're watching closely who the nominees are and how they will affect the policies of the new administration. But what we're -- so we're certain of change, but we're also certain that the core problem is not going away, which is financial crime, which causes tremendous loss, pain, undermines financial markets is even a risk to national security. And also sanctions, geopolitics and friction aren't going away. So we expect there to be lots of change. We expect the administration to have its own priorities with respect to managing the core, our core community problem. And as Mariah said, I think, very eloquently when there's a lot of change, parties turn to their most trusted advisers and sources of information and insight. And given our global brand of trust, we feel we're in a very strong position to help the community navigate these changes. I'd also ask this audience, keep your eyes open in early February, where we publish our Global Anti-Financial Crime Threats Report. And it will talk about the different changes based on our membership survey information in terms of how they're anticipating to navigate the next 12 months and beyond. But we think we're in a strong position, and it's incumbent on us to help the community navigate whatever change may come.

Are you worried about the competitive threat of disruptive technology?

Yes. Of course, I mean, anyone who's running a successful business should be worried about competition and worried about disruptive technologies. So the real -- the important question is, so what are you doing about it? And what we're doing about it is central to our growth vision and strategy, which is to leverage our core strengths and to apply technologies that competitors and disruptors will be using to support our own initiatives. And I might point out, disruption is -- we think about it perhaps too much from a competitive perspective, bad actors are the earliest adopters of disruptive technologies. Bad actors who are using all forms of artificial intelligence, most recently, large language models to perpetrate a tremendous amount of damage with respect to fraud vis-a-vis deep fakes and malware. That's part of our responsibility to our community to help educate, inform, train so that they're in a position to defend against those risks and threats.

Thank you. So I think we have a question in the room.

Joren Van Aken of Petercam. I spent 3 years of my life trying to get CFA behind my name. And I feel like the designation is losing a bit of value. Before it was almost a requirement to get certain jobs today, it's more of a nice to have, I would say. So my question would be, how would you try to keep your certifications prestigious, valuable and avoid them becoming a nice to have, so to say?

I think there are a couple of factors. So we do a lot to make sure that we protect the integrity of our exams, that we protect the integrity of our IP and that we ensure that we have an ongoing requirement. So when I talk about that membership for individuals to stay engaged and stay informed because it's not just about taking the certification once, checking the box and moving on. When you're associated with ACAMS, you're showing that you're committed to financial crime and that you are part of a bigger ecosystem that's going to support you in that career and that endeavor. So we know a lot of institutions use it also with the regulators. So when they're dealing with the regulators, part of how they can justify the strength of their compliance program is by identifying how many members they have at ACAMS, how many members are actually -- or how many employees I should say, are members of ACAMS or how many employees are ACAM certified. And that's really one of the ways we provide a lot of reporting for our corporates, our banking institutions as well as far as those numbers because it is valued by the regulatory community, which then in turn makes it important to everybody.

I would only add and just say that, that's a very, very good and important question. And to me, what my reaction to it is just how critical it is for us to listen to our customers. Understand what's value to them, what represents their investment in our training and solutions. And for us to move the bar forward or raise the bar on ourselves to not take that gold standard reputation, which I might add is unique in that it's global in scope and recognition, but not taking that for granted and being complacent. We need to listen to our customers, and we are.

Pierre Gauthier from AlphaValue. How much of a market share do you think you have in the U.S.? Is there any other market than the U.S. or the Western world to speak of, i.e., if we were to grow, can you ever contemplate growing in China, for instance?

Do you want to take it? Go ahead.

We don't -- we can't offer market share information. In the U.S., we have -- in North America, we have a very, very strong position as well as Europe and Asia Pacific as well. In all of our markets, there's growth opportunity. It takes different shapes and forms though. So for example, in Europe, we have a really great opportunity, not just with deepening our relationships with existing large financial institutions, but also there are many financial institutions that we have opportunity to do new business with. In North America, it tends to be -- we tend to be well established across the broader financial community. We have, as I was saying, our shift to business-to-business is an opportunity for us to move into adjacent groups within large financial institutions that we don't engage with, like with respect to fraud, but also to provide more scaled solutions to them. And in Asia Pacific, part of the exercise, as Mariah was sharing, is understanding how geopolitics are changing the region, understanding how -- well, how financial crime needs to be served -- anti-financial crime services and trainings need to be served to support the community as their shift. But all markets we see growth opportunity.

You are already in China?

We are in China, absolutely. In fact, we have a significant business in China, and it's very important as China is a critical international player and is also dealing with the same problems that other countries are.

If you look at your revenues...

Actually, our CEO just pointed out and he reminded me, one of our biggest competitors is actually a global competitor because typically, we don't really have -- we have strong competitors that are less global, is internal training and development amongst our customers. And the opportunity in that regard is for us to align with our customers to help build upon their own programs to provide our scaled solutions to allow them to have bespoke, but supported by our scaled solutions, internal training programs and particularly for global organizations because we have that global reach and knowledge base. Thank you, Laurent.

If you look at your revenues today, how much would you say is recurring, let's say, membership fees or certification renewal? And how much is transactional like conference attendance or things like that?

When you take a look at our financials and our different product portfolios, you're right to hone in on membership as our reoccurring component of our business. And I think that over time, we want to make sure that, that expands in thinking about a broader subset of how we package different products and think about different commercial structures to expand that to figure out ways to get more products into that subscription-based business.

What do you say [indiscernible]?

Okay. I would say it's fairly low today on a subscription base. I would say it's maybe 20%, 25%.

It is absolutely the direction of travel. And it's -- our sources of revenue is pretty stable. But we structure -- changing how we go to market and provide more of a subscription model is very much part of our go-forward plan, as we shared earlier. Conference is more transactional is more transactional. You want to -- our Hollywood or Las Vegas conference or in Paris in May, they are must-attend events for those who have budget or who are willing to invest, and they're purchasing on a transactional basis. But the core of our business is much more amenable to a subscription model -- commercial model.

And conferences are about 14%, 15%.

Thank you. One very last question, the last one. Okay. Thank you.

So one quick last question from ODDO BHF. You developed the elements of growth, but could you translate that into your growth algorithm with kind of figures or maybe comparison with last 3 years for the future?

I'm sorry, I didn't catch the question.

What kind of growth can you expect in the coming years?

We're definitely looking at double-digit growth over the next couple of years. I'm not sure what you want.

So thank you. Time is over for the questions. We now welcome Maarten Heijbroek, CEO of Stahl, introduced by David Darmon. Jingle, please.

This is going to be a very short introduction because, as you know, we have invested initially in Stahl in 2006. So it's been a Wendel portfolio company for 18 years now. Initially, it was a partnership with the Carlyle Group back in 2006. And today, we are shareholders with BASF and Clariant. We invested EUR 220 million back then. Since then, we have recouped almost 2x this initial investment. So it's obviously been a very successful investment for Wendel. And you could think that after 18 years, we have not anything new to announce or to talk about. But you will see with this presentation that 2024 might have been the most exciting year for Stahl. So many changes has happened. So internally, we call it the new Stahl because of everything that Maarten and Maarten's team have been through, which are pretty exciting. Very quickly on Maarten. So you know that Maarten joined 3 years ago as a CEO of Stahl succeeding Huub Van Beijeren. Maarten has been Executive Committee member of Croda International, one of the most brilliant chemical company in the world. And since then, you've been the CEO of Stahl and we thank you for that. You -- what you're going with the new Stahl is very, very exciting.

Okay. Thank you, David. Thank you for the introduction. Ladies and gentlemen, yes, it's a pleasure to be with you again and give you an update on Stahl because as David says, a lot has changed at Stahl happened at Stahl, so I'm very happy to share that with you. We are now at Stahl, the world's #1 in coatings for flexible materials. And in the future, that will be all that we will do. But to make that more specific, I suggest you have a look at this picture. This lady is solving a beautiful orange handbag, which also looks pretty expensive. Now where exactly the Stahl come in, Stahl provides the very last transparent coating layer that goes on the very outside of the bag. And it's only a few microns, so it's very, very thin. But this layer is very important, because it's protecting the handbag, it's protecting the underlying material. This lady wants this bag to stay beautiful over many years. Whatever she has on our hands, it should stay beautiful, whatever she spills over it, it should say beautiful. And she's holding the handbag. So it's also -- this last coating layer also makes this handbag feel great. So even though it's only a very thin layer over that handbag, it does make an important difference in how this lady perceives her handbag. So these Stahl coatings, they provide a final coatings layer over a wide variety of mainly consumer products. I know in the introduction that the David classified Stahl in the industrial category, but I think you should look at this more as a consumer company because we're coating mainly consumer products. And typically, the products that we are coating are more at the premium end of the consumer market. So as you see in the pictures, we are coating steering wheels and seats of cars and airplanes. We make packed consumer goods, look good and feel great. We protect many luxury goods, fashion products, home furnishing, and a wide range of other products, tents, parachutes, outdoor clothing, airbags, you name it. But it's always that very thin outer layer. And consumers, they very often touch flexible materials. Like the steering wheel in your car, which I hope when you're driving, you're holding it constantly. So you're constantly actually touching Stahl. So the Stahl coating enhance the consumer experience. Yet they only represent a tiny fraction of the total cost of the underlying product that it protects. Now every day, hundreds of millions and possibly billions of people around the world are touching Stahl. So that is why we have made it our purpose to make touching Stahl a great experience, and increasingly important also a responsible experience. So the consumer products that are typically coated with Stahl coatings tend to be more at the premium end of the spectrum. Now many of the world's most famous brands, trust Stahl coatings to provide that final protection layer around their products. And we innovate directly with these brands. Now confidentiality doesn't allow us to mention any specific brand names, but I can share with you that Stahl is used by the large majority of the luxury houses and in the interiors of most of the premium car brands. But for instance, also on the keyboard or the packaging of some of the world's most desirable consumer electronic products. Now all these famous brands, they trust Stahl. And we do make an impact on how their consumers perceive their brand. Now almost 100 years ago, Stahl started in the U.S.A. as a supplier of leather tanneries, supplying coatings, coatings for leather. Now fast forward to 2006, that is Wendel became a shareholder of Stahl, and under the Wendel ownership, Stahl has accelerated. First, very much by strengthening and broadening its position as a supplier to the leather tanneries with the acquisitions of Clariant and BASF Leather services, which also included Chemicals businesses. In recent years, however, our focus has shifted. We see our coatings formulation expertise, which can be applied not just to leather, but to a much wider range of flexible materials, we see this coating formulation expertise as the true core competency of Stahl. So we decided to make the change in the portfolio and to transform Stahl into the world's leading coating company for flexible materials. And to get there, we first acquired a Packaging Coating business in 2023. In the U.S., ICP Industrial. And this year, we added to that by buying Packaging Coating business in Germany called Weilburger Graphics. And these 2 together, they are adding almost EUR 200 million of coatings business to the Stahl Group. But at the same time, we looked at exiting our Chemicals business. Chemicals is a lower added value business than the rest of Stahl. And it's also more capital intensive and more carbon intensive. You may have seen the recent announcement that we've agreed to sell our Wet-End Leather Chemicals business to a Belgian investor. And in 2023, this business had sales of EUR 225 million. We're looking to complete this transaction in 2025 since we first need to carve out this business out of Stahl, which is a major operation. But after this, the transformation of Stahl will be complete. And then we will be a pure-play specialty coatings company of very high quality and better positioned for future growth. Now indicative sales of new Stahl, again, based on 2023, will be EUR 786 million with an EBITDA of around EUR 180 million. So profit margins well above 20%. Now as you saw in the previous slide, we started out about 100 years ago with coatings for leather. And on a new strategy, we are broadening the range of flexible materials that we are coating, since the leather coatings technology transfers very well to other materials. And we do this both organically as well as by acquisitions. So the recent acquisitions in Packaging Coatings have added paper to the range of flexible materials that we are coating. Now this broader range gives us a more diversified and robust portfolio. Our dependency in leather is much reduced to approximately 1/3 of sales next year. But only 2 years ago, this was more than 70%. But more importantly, as we broaden ourselves, the accessible market increases, so we are better positioned for future growth. So after the portfolio changes, we're now organized in a different way. Previously, we had 2 businesses, Leather and Performance Coatings. And they're both the clear #1 in their markets. But we now have a third leg, the Packaging Coatings division, which after 2 acquisitions already has the global #2 position in the market, and we have every ambition to develop this further. Now the slower growth Leather division is now much smaller. So we have a better balanced portfolio with 2 out of our 3 businesses, having strong organic growth opportunities. And as I mentioned before, due to the technology really across all the 3 divisions, they share the same manufacturing platform. Now the business model of Stahl is all about deep customer intimacy. We are physically very close to our customers with our technical experts, our application labs, and our innovation centers really close -- very local to our customers. So we co-innovate with our customers and we often develop custom-made formulations for them. But we also hold direct relations with the end users, the brands, luxury companies and the OEMs. As I said before, we only represent a tiny fraction of their product cost, but they are well aware that the Stahl Coatings is impacting their consumers' experience with the haptic properties and the protection that our coatings are providing. So they are keen to innovate directly with us, even when we do not supply them directly. The new Stahl will have approximately 1,700 employees. And as you can see from the numbers on this slide, we are highly R&D-intense company. So thanks to our high margins, we can afford to spend more on innovation than our competitors can. So we aspire to out-innovate the competition. And for its size, the new Stahl continues to be a very global company. Now Asia and the Americas, they each represent over 30% -- just over 30% of sales. And Europe, Middle East and Africa, just below 40%. So we're very well balanced globally. And in line with our business model, we want to be very local with our offices, with our labs and with our warehouses, physically close to our customers. And with manufacturing as close to customers as possible as well, but at least on a regional basis. And to support future growth, we have recently increased our investments. We opened a new manufacturing plant in Singapore. We are in the process of doubling our capacity in China. We've opened a new innovation center in Japan. And in February, we will be opening a brand-new center of excellence in North Carolina in the U.S. So we're confident about future growth. And we continue to make good progress on our ESG road map, which details the ambitions that we have for 2030 and 2050. And in previous years, I've shared a lot of detail on our program. So now I want to just touch on a few important items and achievements. First of all, in the new profile of Stahl, this comes with a significantly lower carbon footprint. Because our Leather Chemicals division represents almost half of our sales volumes and therefore also almost half of our carbon footprint. Even when in terms of sales, it only represents 1/4 of Stahl. So we will rebase our carbon emissions reduction targets that we have been externally validated by the science-based target initiative. And we're one of the few companies in our markets with a Scope 3 reduction target. We have well-developed decarbonization plans to hit the 25% Scope 3 reduction target that we've set for ourselves in 2030. Another achievement that we are very proud of is that we have been certified as a fair wage employer by the fair wage network. This certifies that we are paying every employee of Stahl globally, at least the so-called living wage. The living wage is substantially higher than the legally required minimum wage. Living wage should enable an employee to lead a decent life from only one full-time salary. And we are very proud of this certification and it's important for our employees and for our employers brand in an increasingly competitive labor market. And for the third time in a row, we have been awarded platinum status by EcoVadis with a higher score again. And this cements our position in the top 1% of most sustainable companies globally, out of more than 100,000 companies that have been assessed by EcoVadis. As Stahl is a leader in the space in many areas, but not in digital. So this is where we have catching up to do, but it's also where we see a great opportunity to strengthen the company further, particularly in areas like R&D, operations and in marketing. And in all these 3 areas, we started to lay the foundation -- to lay the digital foundation. In R&D, for instance, in every lab around the world, we will be logging every formulation we make, every application test we do. We will logging that in a laboratory automation system. And all our scientists globally will be able to see these experiments that we've done in all these countries in a different laboratories. So they don't have to reinvent the room, but they can build on what has been done elsewhere before. And we're taking similar steps in operations and in marketing. And in the second stage, in our digitalization, we'll start to optimize Stahl by applying things like artificial intelligence to the large amounts of data that we generate and are now capturing. And this year, in Stahl, we also introduced MyStahl, an employee engagement platform, which has contributed to the high scores that we saw in our most recent employee engagement survey. Now let's have a look at the numbers. As you can see on the left, we've made steady progress over the last years. Sales have grown 3% per year over period, which included some very challenging years like the pandemic, inflation and the geopolitical tensions. Now if you would strip out the Wet-End Chemicals Business that we are divesting from these numbers, and that is the red bar. You see even better development than the new Stahl perimeter has had sales growth of over 6% -- over 6% per annum over that same period, and that is the blue bar. Now the EBITDA on the right shows a similar steady growth pattern. These numbers still include the Wet-End Chemicals, and it's to be expected that's without Wet-End, also the underlying EBITDA growth of the new Stahl will review a stronger profit growth profile. I'd also like to draw your attention to the EBITDA margins. They are consistently above 20% in good times and in bad times and significantly higher than any other larger coatings company. And this underscores the premium character of Stahl. And the wide range of mainly consumer-driven applications that we sell into, makes for a very robust business with consistently good performance and very low cyclicality. And as you saw earlier, the new Stahl will be a bit smaller with sales of EUR 786 million and EBITDA of EUR 182 million, again, based on 2023 actuals, including the acquisition of Weilburger, which was done this year based on their 2023 actuals. So it's a smaller company, but it's higher profitability, and it can grow a lot faster. And as a specialty company, Stahl has a very high knowledge intensity. But unlike many other industrial companies, we have a very low capital intensity. And that combination of the low capital intensity with our high margins makes for a very strong cash conversion, which is typically above 80%. And we have, therefore, been deleveraging over the last 4 years even when we've done a larger acquisition, and we paid our shareholders a dividend last year of EUR 125 million. And at the midyear, our leverage stood at 1.4x. Please note that the Weilburger acquisitions only closed at the end of September this year. And obviously, the Wet-End divestment should close in 2025. Now let's unpick the portfolio to see what has happened over the last few years. So if you look at old Stahl, it was a financially very healthy business, which consisted of 1/3 chemicals and 2/3 formulated coatings. But 70% of sales were into leather, which is a relatively mature market with limited growth opportunities. So now column #2, we're exiting our Chemicals business, which is only selling into leather. It's a good business in itself, but its profit margins are well below the coatings part of Stahl and has a more mature growth profile. In the third column, we have now acquired ICP, Weilburger, which now form our Packaging Coatings division, and this fully adds to our coatings franchise. These margins are still a little bit lower than the rest of Stahl coatings, but clearly higher than the Wet-End chemicals margin. But it has significantly better growth opportunities in our Chemicals business and it gives us access to more consumer-driven end markets. So this makes for new Stahl to be much better positioned for growth since 2/3 of Stahl is now in faster growth markets. And as we're no longer in chemicals, we are a pure-play specialty coatings company with very premium margins. As I said, the new Stahl is a true high-end specialty company, and we have actually a pretty unique combination of a very high profit margin as well as a very high cash conversion. As I said before, our profit margins are well above other coatings companies. In fact, they are more at the level of some of the high-end specialty chemical companies, that for instance fragrance companies. But we are a lot less capital intensive than they are. So this quality metrics in combination with faster growth should also lead to a more premium valuation for Stahl. Now let me wrap it up with a quick look at the future. After the carve-out, the transformation of Stahl will be complete. We are very happy with the new Stahl and the new strategic direction that we have embarked on. Going forward, we want to further strengthen our position in premium flexible materials coatings. And we'll do this by accelerating innovation and to continue to invest in our footprint to support further growth. And like we've done in the previous years, we also want to continue to do further acquisitions. And finally, we will deliver on our ESG road map on a way to ultimately be making a net positive impact. Thank you for your attention.

So thank you, Maarten, for this presentation. We go directly to the Q&A session from the web. Your shift towards performance coating concerns, mainly flexible substrates. Can you also imagine targeting those kinds of surfaces to expand your business?

Thanks, Olivier. Yes, I think for now, we will definitely stay in the flexible space because that is where we're strong. And we see a lot of opportunity for further growth because we can still broaden this business within the flexible space. And so I think for the foreseeable future, we'll stay in that space. But we shouldn't be limited to that space only because the Stahl Technologies can also transfer to other materials that tend to be maybe more rigid or polar in their nature. But for now, we'll stay in flexibles because we see good growth opportunities there.

Okay. Thank you. How important is sustainability in your new product development?

Yes. I think sustainability in every conversation with our customers or with the brands or with the OEMs, I mean, sustainability feature is always #1. On the list, everybody wants to make their products more sustainable. So -- that is almost all of our innovation is actually sustainability driven. So we're looking to help the brands to reduce their carbon footprints. We're looking to help the brands with providing better information about our supply chain so they can make better declarations about their products. So yes, sustainability is super important, but that's also why we want to make sure that in our space, we want to be seen as the clear ESG leader that we are being seen as today.

Thank you. No question in the room so far. Okay? I continue on the web. Yes, [Florent].

If you look at auto and luxury, they have been struggling a bit in China. I was wondering, do you see any weakness in your orders from China? And then maybe a second question is, are you, for example, succeed in partnering up with maybe the more local Chinese premium brands that are now upcoming and taking some share from the other international brands?

Yes. Thank you. Certainly on a global basis, particularly in Europe, we see automotive is struggling, but in China actually is not going so bad. And we also see this in Stahl. We have a very strong business in China. We supply virtually all the new Chinese EV makers, their interiors are using the Stahl coatings because basically, our strategy is that we don't want to predict who's going to be the winners or losers in automotive. We just work with all the brands globally, and we'll see who will be the winner. But we started in China with dealing with these EVs very early on. So now we have a pretty significant position. And our Chinese business, in spite of what you read in the press today, our Chinese business this year is actually growing.

It's quite an interesting pivot that you have been organizing by dropping the heavy end of your business. Must it be read as keeping the client and concentrating on the high value-added part of the coating effort? Or is it a brand-new business, i.e., there might be risk attached that, obviously, you will discover maybe later on because so it sounds so positive in such a single move that is quite interesting to obviously discuss it a bit further. Or is the catching effect?

Yes. So just to better understand your question quite well. So you're asking now that we're separating the leather business into 2, will that have impact on the Coating business on our leather coatings business? Do I understand your correction?

My point is that you are a small change seen from outside in your business turned out to be very profitable in terms of strategy, and you cannot wonder but ask where could be the catching effect?

Yes. I think it's a different perspective because back in the day, Stahl is almost 100 years old. And back in the day, leather was a very profitable sector. It was a fast-growing sector. It was a high-end sector. So it was an attractive business to be in. And so therefore, also Stahl expanded its business in leather, in leather coatings, in leather chemicals, they wanted everything in leather. I think at that time, it was a logical move. But what we're saying now, seeing that actually the leather market is maturing. There's much less growth. So that made us rethink what are we going to -- what is our -- we cannot bet on leather anymore for our future growth. So we have to change. So -- but if you go back almost 100 years to see how Stahl started, at that time for the first decade, we only had leather coatings, and we were perfectly happy, existing and growing as a leather coatings only business. So we think it's perfectly possible to go back to that situation because we've been there and to in leather only concentrate on the best part of the leather business, which is the leather coatings, which is actually a very profitable business. But therefore -- but clearly, we're seeking the growth outside leather. But the interesting thing is the translation of the technology from leather to other flexible materials. That is where we see the growth. So yes, and you're asking where's the catch. I hope there's not a catch.

Question in the room.

What percentage of your product do you consider today as a premium. So, I mean, difficult to duplicate and with some kind of exclusivity?

Yes, we don't quantify or measure that. But let me answer by saying that for many of our customers, we are the sole supplier for the application. They only depend on Stahl as a supplier because we're the only ones who can make that certain performance in their coating. So I think for many of our customers, we're actually very premium. We are very important. And in terms of the end products, the consumer products that we coat, as I showed in my examples, the majority of them are very much at the premium end of the spectrum. So within, let's say, take the car industry, we -- that's more -- the expensive models that are having the car coatings than the cheaper models, and it's the same on the fashion products and what have you. So it's a well-protected business. That's -- it's bespoke formulations, it's custom-made formulations. We're often sole supplied. Customers are often sole supplied by Stahl, so that gives us a lot of protection. And that local co-innovation, clearly, we have all that deep technical operation where the customers make that we have super strong relation with our customers as well as with the brands.

And maybe a follow-up question on ESG issues. Your coating formula, do they contain some PFAS and how much are you exposed to this issue? And what are the risks for Stahl?

Yes, clearly, as a coating company, we formulate with chemicals. And we have a very active program in constantly making -- cleaning up our portfolio because the -- the legislation around chemicals is evolving. And clearly, PFAS was not an issue 10 years ago, but suddenly, it is a huge issue. It's not the only issue actually in chemicals. And clearly, as a company at Stahl, we're trying to stay ahead of the curve to make sure that we proactively move out if certain chemistries are proven to be -- problem chemistries, we want to get out of that as soon as possible. So at this moment, we do have in a minority of our formulation, we have a very low amount of PFAS. So we have a very active program where we completely want to formulate ourselves away from PFAS. For instance, in leather coatings, we're already there. But in Performance Coatings, we still have a little way to go. But we believe there -- we are well ahead on the rest of the market with trying to get us out of more difficult chemistries. And also quite important, in Coatings, one of the problem areas is solvent because most of the coatings tend to be or used to be solvent based. In Stahl, we've already replaced more than 90% of the solvents with water. So more than 90% of our product portfolio is water-based. And that has made a huge impact in making our range more sustainable, but also safer.

Thank you. Here and the very last question.

Super quick one. I just wanted to confirm that your local for local business and hence, that's impacted by your potential tariffs?

Yes. For a very large amount, we are local for local. So we are -- take for instance, China, everything that we make in China stays in China. And our strategy is, as I said in my presentation, is to try to be local for local. So with the manufacturing that is typically a little bit more in the regions. So I think we're reasonably well positioned for a world that seems to be fragmenting. How it ends up, we will see. But you saw we have about 15 manufacturing plants all around the world pretty local to our customer base. So we believe compared to any other -- to other companies, we're well positioned to, in case shifts are going to happen.

So thank you so much, Maarten, time is up.

Thank you. Yes.

So it's now time to turn to the next presentation, the Wendel Private Asset Management platform by Laurent Mignon, our CEO; and Cyril Marie, our EVP, Strategy and Corporate Development. Jingle, please. [Presentation]

Great. Well, thank you to all the CEO that made this presentation, and we still have Ted to come. Just one word before we start on the asset management platform is we didn't talk about Bureau Veritas at all because you know that Bureau Veritas is a listed company, so you already have had the opportunity to go to the investor. But a lot has happened in this year on Bureau Veritas. It was the launch of the LEAP28 plan, and most of you, I'm sure, have attended the Investor Day, where Hinda Gharbi presented the LEAP28 and the LEAP28 has resulted in significant growth and margin improvement at Bureau Veritas and has translated, as you've seen, in significant share price increase, which is I think, a great testimony to the quality of the strategy that is run and of the team of Bureau Veritas. So I wanted just to say that we don't present usually here very set informed presentation of Bureau Veritas because it's a listed company to which we have access and we prefer to put forward here the nonlisted company that you don't know. Now we're going to concentrate on what is really new, which is the creation of that new asset management platform, as we mentioned, that we focus on the mid-market landscape. Before we go into the platform, I would like to convey our key conviction on that sector. So maybe you can -- I don't know who is pushing that forward. Not me. We've got a few strong conviction in building up that platform and the way we see the asset management and the private asset management industry evolving. First of all, we do think that this is a market that has strong tailwind despite the fact that it has been harder for some players to raise fund in this period. Long term, this is a strong tailwind business where they will be needed of private capital for all the different class of assets. This is true for the private equity because we do think that listed company often doesn't offer the same quality of what a private owner can offer. But it is also true, obviously, for the credit business, private credit business, and Ted will come back to that on the big trend on that. But it's true for the infrastructure business where the amount of money that needed to be invested is tremendous and will need to have private capital to support those growth for the private credit, obviously, the regulation is a great help to see how the private credit is going to develop. This is to an industry that is maturing. This is a changing industry. And this change is absolutely crucial today. It is becoming a professional industry. I'm not saying it was not professional, but it was a little bit of a artisan like business that developed itself. Now it is structuring itself. It is changing completely. And it's also an industry that is going through a period where you have significant transitions because many of the founders or people that develop or that as the head of those companies and this industry are people that have developed and see the development back in the -- just after the great financial crisis, where there was strong growth of that industry. Now they are thinking about how do I transmit my company? How do I make my company a sustainable business for the long term, and this transition is key within the evolution of the industry. Three, it is an LP-driven transformation. The LP want to have and see their counterpart change and evolve. This is a global industry. It is not only there's local teams and person, but this is a global industry. And you have to be within the largest market in the world, which is the U.S., if you want to be a player in the global asset management industry and specifically in the private assets. Mid-market, we think is really the sweet spot where we have to be. We don't think that we can be as to our size, big player in a large market, on the mid market, whether this is PE, whether this is credit, whether this is infrastructure, we think we can play a key role. Alpha is a real scarce resources, talent, capacity to generate earnings to generate performance is not easy. We're not anymore in a period where just because interest rate go down, multiples go up and you make great performance. This has changed drastically, which means that you really have to focus on the great teams. And by the way, great teams raise funds. So this is really a scarce resource. And you have to make sure that concentrate yourself on the great teams. And finally, this is a people business, a talent business. And if you want the talent to do well in the business, you have to give them the right level of autonomy so that they can keep the entrepreneurial spirit. It doesn't mean that you don't have to be into a platform, into a larger organization so that you can benefit from the scale, but you have to keep that entrepreneurial spirit. You have to keep this thing. And we are a strong believer of that. Now once we've conveyed that, maybe we can work. I think this graph is pretty interesting. It shows where the revenue margin and the growth within the global asset management industry. And you see that -- the -- on the left -- I mean, whatever you call it, well, here -- you see that globally, you've got 2 markets that are growing, passive and private assets. That's where the assets are growing. And then in terms of revenue margin, you see obviously that the revenue margin is really on the private credit. So it is very interesting to see that if you look to that, you've got the growth market on the top, and you've got a big market here, which is all the listed companies. This market, by the way, is going through a big concentration, and you see transaction every day that are announced between insurers, asset management and so on because they need to cope up with their costing. And then you've got where we do want to invest, which is the one which is growing and will still be growing. By the way, the biggest actor in the ETF industry is moving the ladder is making acquisition in the private space, as you've seen recently by the transaction, they've announced. If we move to -- next slide. What do we want to do? We want to create a platform which this slide is really the slide we presented to you 2 years ago, exactly the same one. And we're delivering on exactly what we've said. And it's important that we've set a strategy, we're delivering on the strategy. And we've not changed anything to that, exactly the same. The only thing that changed is the name. There was new names here. We have 2 names now. This is not name. This is great teams. You've seen Chris Masek last year. You will see Ted later on. We are here to make sure that we can help this company grow by giving them sponsor money, by helping them in their strategy. We will bring them the benefit of a platform through better distribution, help them reaching more LP throughout the world by putting more money to make sure that we can invest in distribution, helping them moving to retail whenever needed, and that will generate superior region. And we think that if you have within all those vertical the right people, the right teams, you can generate a great platform. And as I said, we are in a changing industry. This is the right timing for us with what we can bring and the value proposition we have to do that. And I think we've been able to convince great people to join us, and we will be able to do more further to come. Our way to do transaction is very important because we're trying to make sure that this is -- we know this is a people business. So the way we do the transaction is to make sure that we can bring alignment of interest because you need to have alignment of interest in people business if you want to be successful. That's why we do only a transaction that align interest around 3 parties: the shareholder, the teams and the LPs. And we have to make sure that you have always this in mind whenever you do a transaction. That's how we've been structured that, and we're structuring our operations so that there's great alignment interest with the team that is motivated to develop the company as we are, together with some downtime protection if it doesn't work. That's really how we do the transaction. And the framework, the detail from one transaction to the other can change, the global philosophy is always the same. And that has turned to be, I think, very, very positive when we look to IK. IK is a year down the transaction now. We've done it a year ago and has been very successful. It is successful because we had no change in leadership team, very important. Leadership team is fully engaged with the new strategy, with the platform and they have been able to promote, incentivize new partners, make sure they retain everybody. And even hire new talent, we'll come back to that. Two, value creation is there. In 2024, EUR 1.4 billion of capital has been returned to the LPs with an exit multiple of 2.8x. That's very important. And that success has resulted in significant fundraising. Fundraising in 2024/2025, for IK will be above EUR 6 billion. Cyril will come back to that later on. And fourth, we're starting to see the benefit of doing the platform and helping them. We're helping them in growing, investing in new teams, new talent, investing in new offices. We opened an office in Munich. We're thinking about a new one, probably a little bit of Southern Europe to come. We're discussing about new product lines. So this is really, I think, a perfect illustration of the way it works. Now I will hand over the rest to Cyril. Well, you may not know Cyril. So Cyril Joined us 18 months ago? Is that Cyril?

Yes.

That's great. Cyril Marie is a great person, but a great professional. He's been in the asset management industry for the last 20 years. He was the Strategic Officer and CFO of a small asset management company called Natixis Investment Managers. It may be there whether we knew each other?

Yes.

I think so. And he's been very successful in helping us in developing that. So Cyril, please.

Thank you. Laurent for this intro. So now I have to deliver. so some key data points that I would like to share with you today just to show you now the quality of the platform we are building. So the first, I think, important that a point is the fundraising because the fundraising is the dynamic of GP. And here, you have our 2 partners, our 2 GP, IK partners. The deal has been announced last year. And you can see here the quality of the platform because they have been in a position to raise EUR 6 billion. So what EUR 6 billion means, it's 50% more than what they did 3, 4 years ago because the buyout firm, they launched money by vintages. And so after the announcement of the transaction, they have been in a position to enlarge the size of their fund raise with new client and with very high level from their existing client. And on top of that, what you see at the bottom of the page the diversification because they are growing, but also they are creating new verticals, new businesses in order to diversify their book of business. I think it's very interesting. It shows you the quality of the stand-alone growth of IT partners. Monroe Capital, I'll be short because Ted, will explain to you the dynamic of the in more detail, but the same message, strong growth and also a very high level of diversification. In the context of Monroe, they have a strong strategy. But you will see that they have been in a position to develop a large number of vehicles in order to tackle each market, each type of client and to deliver their product to those clients. And it's very interesting also in terms of diversification from a client standpoint and also from a geographical standpoint. So that's the stand-alone dynamic of our recent acquisition. On top of that, at Wendel, what we want is to foster their growth, to accelerate with our value proposition, to develop those firms. And for that, we have -- here you have a summary of the 4 potential levers we would like to use to accelerate their growth. The first one is capital. It's obvious, develop a private asset business require capital, some capital. And they need capital for sure to enlarge the size of their fund for sure, but that's not our priority. Our priority is really to use the capital to launch new strategy. When we invest EUR 1 in the fund it's to get the benefit of this investment, but it's also to create value at the level of the GP by creating new strategy, new vertical, new products. The capital also will be useful to enlarge the scope of our GPs. Let me take an example. Monroe is very strong in the U.S. If they have the intent to develop their business in Europe, we can help them to grow through acquisition or lift out the team. So capital is the first lever. It's obvious. The second lever is very important, its partnership. This business is becoming more and more concentrated. It's very competitive. You need to sign partnership when we have announced the Monroe transaction, as you may have seen that we have partners with AXA, one of the biggest life insurers in the world. We want to pursue this. We want to sign partnership. It's very important. You see partnership between private asset manager and insurers. You have also, for example, partnership with banks, and it's very important to be in a position to sign this type of partnership, and we think that we have the network to do so. Third lever is cross-selling. And for this, in the way we are designing the platform shown by Laurent, you have seen that we have IK, we have Monroe, no overlap in terms of product. That's the starting point. But also we try to find same with a good level of complementarity in terms of [LP] base. And we know that it's always more easy to sell a product to an existing client, a new product to an existing client than to get a new client. There is a lot you will see in the following slide that we have a lot of complementarity, and we can cross-sell our products. And the last thing is that where we are not in a market to enter into new markets, sometimes Monroe can do it or IK can do it. But we can also do it all together. It will be less -- it will be more efficient, less expensive and we can be more impactful to tackle those new markets, also could take the example of the Middle East or Asia and also for the retail market. To be more concrete, you can look at this map what you have here. And to me, this map, you have the target operating model presented by Laurent. And you have here also a very important slide to describe our platform is the way we are building the business. So here, you have the dark blue lines where you have, where we manage the asset, where we invest the money. So in Europe, EUR 13 billion, it's IK because they are really focused on what they do mid-market Europe, and you have in the U.S., EUR 18.5 billion, that's Monroe. But the way we distribute where we raised the money, it's different. For sure, the core market of IK is Europe and the core market of Monroe is U.S. But if I take the, for example, in the U.S., you have EUR 20 billion of assets that have been raised for the 2 GPs in the U.S., but you have already EUR 3 billion coming to IK. We want to enlarge this. On the other side, in Europe, as you can see, close to EUR 10 billion of asset raise, we have close to EUR 2 billion for Monroe. We want to enlarge this because there is more appetite for the dollar from European investors. And we would -- so that's cross-selling. And then also, you have the region MENA, APAC, where it's still the beginning for our 2 platforms. And here, we want to invest. We want to invest at their level, but also at our level to grow the business and get new clients and new money. So that's the way, even if we have already, as you can see, a global reach, that's really the way we want to develop the model with a global reach. The last message I would convey today. When we talk about the platform, the P&L is a good way to summarize. So here, you have the 2025 P&L on a pro forma basis, assuming that we have over 12 months 2 firms. So some key important data point. The AUM, EUR 31 billion. But more importantly, the revenues, close to EUR 0.5 billion of revenues, and we have already the management fees with an average margin of 140 basis points for the 2 businesses. And here, the diversification is important because we have commingled funds, we have SMAs, we have permanent vehicles. So it's a mix of a lot of things, and I think it gives a quite resilient base of revenues for our 2 businesses. Carried interest, it's the beginning. Here, we have just the existing carrying interest for Monroe, but you know also that we bought the future carried interest on IK. So this will grow over time, for sure. The second important message is the margin. So the ratio between the expenses and the revenues. If we take just the FRE margin, we are at 35%. If you compare this platform with the European competitor, I think it's a very good level 35%, and also the size because size matter to deliver dividend to you, but also to invest in the business with those 2 acquisitions, the FRE for next year will be at EUR 160 million. And if we take only the share owned by Wendel, meaning the 51% of IK and the 75% on Monroe, it's just above EUR 100 million, as Laurent said. So that's -- this indicator is the indicator that will be at EUR 150 million in 2027, as mentioned by Laurent at the beginning of the presentation. So that was the key messages I wanted to share with you on the asset management platform.

Thank you very much, Cyril. I think it gives you a little bit of a view of the size of what have been done and achieved, but it's still more to go, and we will further work on it to make sure that we can deliver on that platform coming. But now I think the most -- it is very important that we go and we present to you Monroe Capital. Monroe Capital is a great company that is just joining. I mean it's just joining, because it's not even close. We just announced it, but we will -- I mean we're not too worried about it and -- but -- and Ted is here, and so nice to have made the trip to come to us and to present this. Please, oh, jingle, sorry, I'm not good at that, jingle. [Presentation]

Great. So thank you, Ted, for making the trip to being here. Maybe we can show next slide is -- yes, thank you. So the Monroe Capital, the acquisition has been announced, as you know, a few months ago. It's above EUR 1.13 billion acquisition for us, 75% of Monroe and 20% of the legacy and future carried. Closing is expected to be in the first half 2025, hopefully, even in the first quarter. A partnership agreement, which is important, $800 million sponsor, $200 million of GP commitment to the firm. So a significant amount of capital that we are putting behind Monroe's strategy to make sure that we can faster the development of Monroe, but you will talk about it, Ted. This is a great company. One of the, I think, widely recognized best company in the middle market credit the U.S. And for us, it's what really makes the platform becoming live. IK was the first move with Monroe, we create the platform. We still have much to do, but we create the platform. And we are now, I think, a credible asset manager in Europe and we will do more. On Ted, well, too much to say. You see it's a long thing. So the only thing I want to say, Ted created Monroe Capital back in 2004. He's a great entrepreneur, and he's very much involved in the success of this company. And I can tell you he travels throughout the world to make sure that LPs are committing themselves behind Monroe and behind the great team that he has built over the years. Great. Ted, the floor is yours.

Thank you. Thank you, Laurent. David, Cyril, it's a pleasure to be here today. It's nice to see all of you. This is the most exciting thing I do is talk to people about our firm. I've been doing this for 23 years now, and I enjoy it every time I do it. It's one of the greatest entrepreneurial stories, and I'll share with you a little bit about why. First of all, my background, accounting and finance, CPA, law school, a lawyer, represented private equity firms, then represented banks. And I had a midlife crisis about 37 years old. And I decided I want to leave the practice of law representing banks and insurance companies and private equity firms and build a business. And I wanted to build a business and something that I thought we could do and win and it was credit. Banks historically, were not very flexible. They were not very creative. And I thought that if we built a creative, flexible business financing companies, we could win. And we started that about 25 years ago, and I'll show you some of the results since. So Monroe Capital is a firm that does private credit. What is private credit? Private credit is what banks used to do years ago because of capital requirements, because of regulatory issues, because of the entrepreneurial spirit, banks have become fee income businesses not lending businesses. There's a tremendous amount of pressure on banks throughout the world, primarily U.S. and Europe, where regulatory capital concerns are driving more and more regulatory capital. Banks are judged and evaluated today based on ROE, return on equity. In the old days, it used to be return on assets. ROE means the least amount of equity generates the most amount of return. Fee income generates return because with fee income, there's no regulatory capital required. The more regulatory capital required, the lower the ROE. So banks have done everything, but lend. And that is a continual trend and will be a continual trend both in the U.S. and Europe. So Monroe was founded in 2004, 20 years ago. We've invested $44 billion over that period of time. We have about 300 employees today. The slide is not correct. We have 10 offices, we manage about $20 billion of AUMs that's fee-paying AUMs, and we have about 130 investment professionals. We've won every award you can possibly win in private credit and asset management. Private Debt Investor, which is a London-based organization gave us last year, private credit firm of the decade because we won it every year, whether it's Creditflux, Merger and Acquisition, Magazine, M&A Atlas Inc, we've won every award, but awards are just symptomatic of performance. Our performance is what drives awards, generating the best return to limited partners, the best IRR on invested capital. So Laurent mentioned the reasons why Wendel did the transaction with Monroe. I'm going to mention a few reasons why Monroe did the transaction with Wendel. About 3 years ago, I looked at the market and decided that Monroe needed additional capital and a capital partner to continue to grow. I'll show you some slides later. We've grown at a 26% CAGR for the last 14 years. There's not many firms other than maybe [NVIDIA] that has grown at a 26% CAGR for 14 years. I needed a partner that would allow us to continue to grow our firm. In our business, there's a requirement that GPs management put up capital for each fund we raise, somewhere between 1% and 3% is the market. We were doing that every year. And if we are raising $1 billion of funds, that's $10 million at 1%, $20 million at 2%. If we're raising $4 billion a year, that's $40 million at 1% or $80 million of 2%. We've exhausted our ability as management to do that. We have somewhere between $50 million and $70 million invested of our money in the business as GP commitments. We can't continue to do that. So I talked to some of the biggest financial institutions in the U.S., in Europe and Asia. I talked to most of the insurance companies. And Wendel became on our radar screen. And I didn't know much about Wendel and I did some research. And at first, I didn't understand Wendel. I have to be honest. I've gotten a lot better understanding since. And what I like is the entrepreneurial spirit that Laurent and Cyril and David and others bring to the business, but I also like the history. 300 years, family owned, family managed, has a decision to tweak the business plan and become more involved in asset management and bring the resources that a long-term family-owned company can bring with some of the thoughtfulness, entrepreneurial spirit and creativity that Laurent and Cyril and their team can bring to us. Laurent was the CEO of Natixis Investment Management, built a reasonably good business there, and I'm excited about what we can do together with Monroe and with the Wendel platform. So I looked for a company that would allow the management team and the investment team to control the destiny of the firm. Check one. I looked for an investor that could commit significant balance sheet capital to our growth to cover the GP commitments that we need to make over the years, check 2. I was looking for a firm that could bring a significant amount of seed capital to the business that we could raise money around with LPs throughout the world. Seed capital is important because we can generally leverage 8 to 10x the amount of seed capital that we get with new LP capital. So that was check 3. And then I want an alignment of interest. I wanted a win-win ability to create value. And with Wendel and the management team, we found that. And while it wasn't -- wasn't our first decision early on, it became more compelling as time went on and the ease of doing business together and the spirit and the family nature of Wendel, I think, made it compelling for us to make that decision. So that's why we are here today with you. Private credit, the fastest growing investment class today is alternative assets. The fastest-growing asset class within alternative investments is private credit. And what's contributing to that growth? Well, number one, dry powder, private equity, we mentioned IK. IK is private equity. There's lots and lots of private equity in the U.S. There's about 6x as much dry powder in private equity as there is in private credit. So that means that the demand for private credit is going to be very, very significant over the coming years. Laurent mentioned tailwinds. We have a tail hurricane, not a tailwind. Number two, the banking sector has transformed over the last 20 years. When I first started this business, about 80% of the transactional finance, M&A finance, private equity buys were financed by banks. 20% was financed by nonbank organizations. Today, it's exactly flipped. About 90% of all transactional finance in the U.S. and almost Europe. Europe is about 75% today is financed by nonbanks versus banks, and that's because of the regulatory capital issues that we talked about. Regulators are forcing banks to hold more and more capital in their balance sheet to protect depositors. We have an advantage. We don't take deposits. We have no depositors, there's nobody to protect, except the most sophisticated institutional investors in the world. And the regulators don't deem that an appropriate use of their work to protect those types of investors. And number three, the tremendous rise in private wealth allocation to alternatives. We'll talk about this more later with some slides, but the amount of allocation to alternatives to private wealth, which is high net worth investors, individual investors, family offices is at the infancy stage. In the U.S., we call it a baseball analogy, we're in the second inning. There's 9 innings. So we have a long way to go. So let's talk about the marketplace. The middle market, where we play, not the big market, not the Fortune 1000 or Fortune 2000 companies, but the middle market. The middle market alone would be the third largest economy in the world in the U.S. if measured by GDP. 200,000 businesses, 1/3 of all private sector GDP in the U.S. and almost 50 million jobs. That's the market that we play in. That's the pool, the pond that we fish in. I talked about private credit as being the fastest-growing asset class of alternative assets, here's evidence. It's only going to increase over the next 5 years. We are situated as the largest player in this space in the lower middle market. Lower middle market means smaller companies, $35 million EBITDA and below. I think $150 million of revenue and below. Where does this product fit in portfolios. Here's a 10-year asset class expected return. Private credit comes in 2 flavors, leveraged and unleveraged. Some investors like unleveraged, Germans generally like unleveraged. Japanese generally like unleveraged. Why? Because they've been used to 0 interest rates for so long that a 7% or 8% return is heroic. Other investors, U.S. investors, Middle East investors, many European investors like the leveraged flavor. That's been 10% to 12%. That's as good of a return as you can get on a risk-adjusted basis from a safety standpoint. Just a perspective, I don't know if IK here or Chris is here or not, but the top quartile private equity returns are estimated to be somewhere between 12% and 13% going forward. We're generating a 12% return today to our funds with senior secured credit risk. So I mentioned the middle market. Here's how it stratifies. Lower middle market, $35 million, give or take, of EBITDA and below, traditional middle market, $35 million to $100 million; and then the large market, which is called the broadly syndicated market, it's $100 million of EBITDA and above. Average leverage. Our average leverage is about 4 turns, meaning that we leverage each company about 4x. So the presentation I heard earlier from Stahl at 1.4, I want to give another 3 turns of leverage. You guys should do a recap, take some money out distributes all the d*** shareholders traditional middle market, 400 to 500 basis points spread over SOFR. SOFR is about 4.5 points today. So think of that as an 8%, 8.5% business. Our business, 500 to 600 spread over SOFR, 4.5 points. So think of our business as kind of a 9.5% business. A lot of competition in the upper market. Less competition in the lower part of the market. There's competition, but less so. So what does our platform look like? We have a 20-year track record. That means when LPs want to do research or they want to look at platforms. We have 20 years of returns and information to provide to them. We've been around through inflation, through COVID, through recession, through financial crisis. It provides a really strong pool of analysis to review Monroe. Today, our business is divided up into direct lending and traditional middle market, that's upper market, direct lending, flagship direct lending, which is our private credit, private equity-backed buyout business. We have a STARR business, software technology and recurring revenue. 28% of the M&A deals that are done today are business services and software companies. We're very, very active in that. We have about a $6 billion portfolio. Alternative Credit Solutions, that's asset-backed. That's nontraditional credit. That's fintech. It's real estate. It's litigation finance. It's royalty finance. Venture debt is backing earlier-stage companies with venture debt so they don't have to raise equity, nondilutive financing. And then independent sponsor is equity financing for deals where we act as the sponsor. On the other side, traditional middle market side is the CLO business, capital markets business. We have about $6 billion today, a combination of CLO business and capital markets business. So if you look at our business today and why I say that there's a hurricane not a tailwind behind us is that our lower middle market direct lending business, we've got $13 billion of AUMs in that space. There's about $417 billion of potential AUMs. Our technology recurring revenue business, we've got about $5.5 billion today. There's almost $200 billion of capacity in that market. Alternative credit, we have $2 billion only today, and there's almost $300 billion. CLOs, we have about $5 billion today, actually. We just completed a CLO recently. There's about $133 billion market size venture debt, $1 billion, about $21 billion market size and an independent sponsor, which is non-PE private equity firms doing equity deals. These are management teams buying companies. So if any of you that made a presentation today, I want to buy your company out of Wendel, we finance those too about $0.5 billion of that in our portfolio to that, that's about a $20 billion business. So when I talk about growth, this is what we've done to date without a capital partner. That's why I'm so excited to have a good capital partner with us because I think we can do -- continue to do this. So over the years, that's our AUMs, we'll end the year a little north of $20 billion this year. I mean, just for those of you that put it in perspective, we're planning to put $1 billion to work in the ground in the next 3 weeks. Just to put that in perspective for you. We've got about 300 employees, as I said. We've grown our AUMs at about 26%, growing our employees about 19%. My hope is that will level off a little bit on the employee side from a growth rate only because we're getting to the point now where we're getting a lot of operational efficiencies but we have to. This is a people business. It's a relationship business. If you don't have the best people, you don't win. So we have offices based in Chicago. We're in New York, Boston, San Francisco, Los Angeles, Austin, Miami, Naples, South Korea Seoul, and we just opened an office recently in Abu Dhabi. My plan is to do much more in Europe. And that's another reason why we wanted to team up with Wendel. My hope and goal is that Wendel will be a very good partner for us in creating additional business development and resources for distribution. That's what we need. I need more distribution. Thank you. It's a long flight over. We need distribution. And part of the reason to do a strategic transaction for us was to increase our distribution and capital raising capacity. And Laurent knows my view on that, and we've talked about it, so we're going to work on that together. Also diversify more our investor background. So if you look on the left side, over 70% of our investors today are U.S.-based. We're doing a reasonably good job in Europe. It's about 17%. And I want that to be 1/3. And then I want Middle East and Asia to be another 1/3. So that's my goal. Breakout by investor type, insurance company and pension funds are 2 largest. Fast growing, however, is the family office, high net worth, the orange. You're going to see that orange get to be about 40% in the next few years. So we take a little bit differentiated approach. In the marketplace, we focus on inefficient areas of the market. We have a very established origination engine, which is sourcing, 27 direct originators. Control, 80% of our deals we're the sole lender, the sole agent, very conservative risk management, 2-plus covenants, at least in every deal, covenants, our leverage covenants, debt service ratio covenants, EBITDA covenants, and we generate premium returns alpha. If we can't generate alpha in an area or a business, it's not something I want to do. There's too much efficiency in the financial markets to mess around with beta credit. So I mentioned our different products, flagship, STARR lending, alternative credit venture lending independent sponsor. They're all growth areas. If you ask me to prioritize, from left to right will be our priority. We separate out our business, origination, underwriting, portfolio management and risk management. We have 4 sets of eyes on any different credit and it ensures that we manage the portfolio, and we align ourselves as best as we can with our investors. Scale matters in this business. As I said, we're the largest in our space. We look at 2,100 investment opportunities each year. We have relationships with about 300 private equity sponsors. We have 300 IKs for example, in the U.S. that we do business with. We're the lender of choice because we can hold $250 million per transaction in our space. 50% of our deals come from growth financings, add-on, tuck-ins, bolt-ons. We've done over 2,000 transactions since we've started our business. There's a tremendous amount of data and information that we have. As I said earlier, top quartile returns. We've done over a 10% return for over 20 years. Institutional investors love that. I'm going to move a little quickly here because they're telling me I'm almost done as much as I don't want to leave. The top part, this is what we're working on now, Private Credit Fund V and Private Credit Fund VI, our STARR Fund II, which is our software technology recurring revenue, our alternative credit fund II and III in our CLO XVII. The real magic is this slide. As I mentioned earlier, the high net worth individual channel. Institutional investors have about a 23% allocation to alternative investments. Individual investors on average have a 6% exposure to alternative investments. This is going to change. And as it changes, look at the statistics and look where the trend lines are. Non-traded BDCs, which is the vehicle of choice for individual high net worth investors, has grown at a consolidated compound annual growth rate of 47% over the last 12 years. We've done a lot better. At Monroe, we've grown our high net worth individual investor area in the last 5 years at 180% CAGR. And we're just starting. I'm going to leave you with that and then I'm happy to answer any questions.

Thank you, Ted, for this presentation. So it's time for Q&A. I will start again with a question from the web, and the mic will circulate in the room. Do you expect the change in the U.S. presidential administration to impact your activity?

2 things. Number one, Trump is crazy. There's no dispute of that. Number two, we're going to have the best year in M&A that we've had in 2025 over the last 10 years. And the reason why is because M&A is driven by private equity firms. Private equity firms have not been the seller for the last 5 years. Interest rates were high. Purchase price multiples were low, LPs have been clamoring to get money back from private equity funds. Average hold is about 8 years in the U.S. It's way too long, 3 years, 3.5 years was history. We're going to see a flood of deals in 2025, and we want to be ready for that. That's one of the reasons why I've been pushing around to kind of get going and help us with some of some of the capital raising and distribution because we're going to need -- next year is going to be a very, very good year next 2 years.

Thank you. What in your view are the gross areas of private credit in the coming years? And why?

As I mentioned earlier, private credit has a lot of tailwinds. And that, number one is the bank regulatory environment. Anytime banks increase regulatory capital, lending goes down. So that's number one. Number two, the market in general for M&A; and number three, investor demand. There is no better place if you're a pension fund or an insurance company. Think about this. If you're an insurance company, you're writing contracts for 30, 40, 50 years on people's lives. You're assuming a rate of return for those insurance contracts in order to generate the annuity premium for the insurance policy. If you're a pension fund, you've got health, education, welfare benefits, retirement benefits, you know that's a 6% or 7% cost. Pension funds are underwriting 6% to 7% and sometimes higher expense each year. Insurance companies are underwriting 5% to 6% growth assumptions in their portfolio in order to pay out insurance policies. There's no other asset class that will generate 8% to 10% returns, current returns on a consistent basis with little to no risk, senior credit risk than private credit. That's why institutional investors continue to invest in it. And that's why high net worth individual investors are going to find this asset class and pile into it over the next 5 years.

Thank you. I think we have questions in the room there. Yes.

[indiscernible], Investor Relations. I have 2 questions. First question regarding private equity, private credit. Second question regarding AXA. So first question regarding you've always been a pure private credit player. Can you imagine going one day into private equity?

Good question. The answer is no. And the reason why? We do $5 billion to $7 billion a year of investments in private debt. 90% of that is on behalf of private equity shops. I don't ever want to compete with our customers. However, what we will do is we'll do deals that are noncompetitive with private equity shops where management teams come to us with a deal and say, we'd like you to help us finance the deal and act as our sponsor. We call that independent sponsor finance. So I don't want to compete with the private equity firms.

Second question regarding AXA. So I've read somewhere that before going into contact with Wendel, you had some kind of partnership with AXA. Can you elaborate on this?

Yes. We manage today $1 billion currently for AXA. AXA has been a partner of Monroe since 2006. So we have a 20-year relationship with AXA. I've known all 4 of their last CIOs, people that run the business. I'm going to have cocktails with them 7:00 o'clock tonight after we finish here. So we've got a very close relationship with AXA. And hopefully, it will get better now.

[indiscernible] is here from ODDO BHF. You are willing to expand into the individual investor money. Is there a risk that at some point, regulators might put more scrutiny in that area, leading potentially to, let's say, lesser return at some point?

Question was about regulatory risk. Yes. It's a good question. For 20 years, people have been asking the same question. And so far, regulators haven't gotten involved in our space. Now again, regulators regulate where there's customer issues or depositor concerns. With banks, what happened in the financial crisis was banks closed. Government had a bailout. Thanks. Who does that hurt? Depositors. Our business, I've stayed away from any regulatory risk because historically, we've had interest from regulated banks to invest with us. I don't want anything to do with regulations. So as long as we don't have depositors, we don't take deposit money, I don't think we have a risk of regulation, and we haven't seen it in 20 years. Yes.

There's a lot of activity in your space. You have BlackRock buying, you've got TPG buying, Blue Owl is buying. I'm just wondering, looking back, your impressive growth was that mostly organically? Or was that M&A driven? And going forward, do you think you can keep doing it organically? Or would you also need to go into the consolidation phase?

This asset class, as I mentioned earlier, is very, very hot. And it's hot for good reasons because there's growth, growth, profitability, good margins. Our margins are better than the coatings business. That was really good that I heard earlier. So there's consolidation. Bigger firms that are not in private credit that are asset management firms need to be in private credit because it's the fastest-growing asset class within that space. So what's happened is you've seen big firms are buying smaller firms. We were the largest firm in our space. And we went through a process. We had a lot of interest. We had probably a dozen parties, and we got down to 4, and we made a decision based on that. 100% of our growth to date has been organic, which is really something interesting. I'm considering, as we go forward with Wendel, if the right opportunity comes up, we'll make an acquisition. It's going to have to be culture, product, performance, people, all the things that are important in integrating businesses, but I'm open to it. But there's plenty of white space on an organic basis to do it that way.

May I add to this answer, which I share is we consider today, and we want -- we make Monroe as being our credit -- private credit platform globally, which means that if we want to develop our business in Europe, we will do so through Monroe. And if we need to make acquisitions to do it, we will do so. But that's very important because that's how we want to develop. And as you've seen in our model, we want to have some verticals. We want to make sure that they don't compete into it. But throughout that vertical, I think the -- and specifically the private credit, I think it's Monroe is a great platform to start and to develop further.

What might be the consequences of the crypto money on your business?

I'm sorry, I didn't understand.

Cryptocurrency.

Currency. Currency. Another good question. We manage money in dollars for investors in the U.S. We manage money in dollars generally for our European investors and our Asian investors. Sometimes Asian investors have to hedge currency and sometimes European investors hedge currency. It's a cost basically of our business. As I mentioned earlier, German investors were covering basically a 3% hedging cost for our business and still generating acceptable returns. So I don't see that. It has not been a risk in the last 20 years. More and more institutions have dollar deposits that they invest with us. Middle East is all dollars, which is good, which is where a lot of the money is right now. Asia is one place where there are hedging costs associated with it. But as I said there, rates of return are so low that even with the hedging costs, they're still generating a 6% return. So I don't see that as a big risk.

[indiscernible]

Who knows. Right now, if you had told me that Bitcoin would be $100,000, I'd tell you, you're crazy. I'm in the Jamie Dimon School of Bitcoin.

And very last question.

Just one question related to spreads. How do you see spreads evolving going forward? Do you feel you can maintain such a high spread, 500 basis going forward? And where were they some 10 and 20 years ago when you started in the business? .

So it's interesting. Spreads have always been for our business since I started this 20 years ago, lowest spread that we did was probably 450, highest spread was probably 625. So somewhere between 450 and 625. And average spread has been about 525 to 550 over that period of time. And the reason why is because our asset class doesn't really work if spreads go down too low on an absolute basis. As I told you earlier, pension funds need 6%, 7%. Insurance companies need 6%, 7% absolute returns. And what happens is that depending upon where treasuries are and where government securities are, we have to generate an acceptable return for an institutional investor to put their money into an illiquid locked-up vehicle. And historically, unless those returns were between 6% and 7% to 8%, 9%, money would move into other asset classes, bonds, treasuries, high-yield securities. Our goal is always to be a couple of hundred basis points higher than high yield and corporate securities. So that's why there's almost a floor on where spreads can go in our industry. And as I said, 450 is the lowest I've seen. We play -- we were about 600, 600 and a quarter over the last couple of years. I tell investors today to anticipate kind of 5 to 550. That's where on a steady-state basis spreads will be. So take SOFR and about 525 to that, that's where our returns should be going forward.

So thank you so much for being with us today, Ted.

Thank you.

So time is over for question. We now welcome back to Laurence, Cyril and David for the closing remarks and then a Q&A session.

Well, thank you, Ted. Thank you, all of you to have been -- well, yes, we're just running a little bit late, but it's fine. Thank you to have been so patient during this day. Maybe we can -- I don't know, put the next slide to conclude. Well, the goal of today was really to illustrate the transformation of Wendel, and I think it's visible from the presentation you've seen and the transformation, which is well underway. We're not at it. Still some things to do, many things to add to create value. Everything we're doing is to make sure that we can create more value to our shareholders, that we can generate higher returns on our assets, generate more cash flow from our operation and generate higher dividend to our shareholders. And this is really our global goal of what we do. I think we've worked on our portfolio to increase the profile of growth of portfolio. We've acted to create an active strategy of developing an asset management platform at the right moment with the right people, and we have further to do. And I think that this dual model capital appreciation on one side, flow business on the other side will generate superior return, higher dividends, higher value and hopefully, low discount. So here, we're -- what we're doing, David and I, we're here to answer any other questions that you may have. And then for those who are in the room, we've got a great cocktail waiting for us, right. Great, well, your questions, if you have any or on the web. Maybe we will start with the room. Questions from the room? No?

Yes, there.

In your asset management business, are you going to organize the cross-selling between with IK and Monroe. And more generally speaking, are you going to create a kind of structure for managing your platform, your asset management platform? How the government is going to be put in place for this business?

So to answer, we're going to put 3 holding companies, 5 committees -- no, we're going to make it simple. Yes, we're going to do cross-selling and we've started to work on that already. We have meetings between the investor relations teams of the 2. We're starting to share the LP base and the work is done. Cyril has done the work. We have a dinner tonight with Chris, Ted and so on to start to get to work and see the working plan of what we can do. Yes, we are organizing ourselves. We are creating a little small superstructure to make things we can help, and we will invest in distribution, which means that we will have people in order to support that distribution. This is not yet done because we have to finalize the transaction with Monroe because we wouldn't had new people on the distribution of IK. But now that we start to have this thing, yes, we will have a few people in order to help us to create a true distribution platform, where we have some ideas of where we can and how we can source those people and make sure that we can develop that. And we will involve ourselves in making sure that we can open doors, making sure that the two teams create themselves that we can take benefit of the different networks. We've got an office in Abu Dhabi and in Korea, we may have other opportunities that we can offer to -- with all our offices in Europe for the Monroe investor relations team. So yes, we are trying -- starting to do that. We've got a great -- Monroe has offices in New York as we have, but also all over the place in the U.S., which is also a great way for to have the IK people to have business relationships. So we are starting to do that. Do we want to put a very strong and large structure at this stage? Let's try to keep the cost at the right level. So we're not going to create 10 holdings, and we're not going to create 10 executive committees at that stage. We're going to make it simple. A few key people, talented people that will devote their time to make sure that this works. Yes, there are questions from there.

Yes, Laurent. Yes, I'm here. Okay. So I'm very happy that Ted of Monroe Capital told us that he decided to partner with Wendel because of the family nature of Wendel, the 3, okay, the 3 centuries of Wendel. But I followed Wendel for many years. Before your arrival, Laurent, I remember that Wendel used to say that family Wendel, the family, the shareholders, the family were not so much in favor of starting asset management business. So it looks like after your arrival, the philosophy of the family changed. Can you explain this? Can you -- a little bit more about this?

Not explain, but I think it's -- if you look to the history of Wendel, I'm not a specialist, but I've gone through that is it's a family that has I think, illustrate itself the ability to reinvent itself. And I think it's part of it's a long maturity that you need to do and came to the conclusion that they have to do it. But maybe I've got 2 great representatives of, and they want to speak, both of them. So Priscilla de Moustier, who is the Chairman of Wendel-Participations, our majority shareholder and Nicolas ver Hulst as the Chairman of our Supervisory Board. Both are Wendel family.

Yes. Hello. I think it's an excellent question. And I think one of the great things of our history at Wendel has been the ability, as you said, Laurent, to reinvent ourselves. And a few years ago, we were not ready, and we did not think it was the right time to go into AUM, and we probably didn't have the right team. And we ask Laurent to come and join us because we felt there was a need to have a new strategy. And so -- and when Laurent developed and offered out this new strategy with the Board to provide the Board of Wendel and independent and the family members, we were completely convinced by his strategy, and we adopted it as a family -- this year of the family, and we had our family Investor Meeting last evening and the family's extremely convinced also with this necessity and with the absolutely positive aspect of this new strategy.

Well, hello, everybody. I'm the Chairman of the Board of the Supervisory Board. I would say a couple of things. First of all, Laurent, as you may have seen has exceptional convincing capabilities. He'll take you where you'd sworn not to go start with. But yes, the family has adapted over time. I mean we were in steel at a certain point in time. And obviously, things have changed, and we've changed as time did change. As far as investing is concerned, there has been, I think, a dramatic shift in the investment world in the sense that we've seen as an investment firm, formidable competitors rise. And if you look at what investment firms do, they source transactions. They execute transactions. They monitor companies, finally they exit. And when you look at what Wendel was doing, we were doing about 2 transactions a year. And when IK came around, we realized that if they do 20 transactions a year, and so actually, they're very seasoned investment firm. And so I don't think that the traditional type of investing that we were doing we should keep on doing or doing with the same, I'd say, the same objectives. And so in a sort of make or buy, we said, it's just a good to buy the know-how as it is to be doing it ourselves, not -- which isn't to say that we're not going to keep on investing ourselves the investing as a principle is key, and we do want to continue doing it because it's in our DNA. We don't foresee that the investments, our own investments will ever represent less than half of our gross assets but we thought it was a very good move to switch and consider third-party asset management. Then of course, there's a nicety of having fees come in. But one of the overriding things also is when we saw the quality of leadership at IK and Monroe Capital, we really were convinced that what Wendel had been able to source were probably the best investment firms that we could find, both in Europe and in the United States. And I hope that you are all convinced after -- well, you probably saw Chris some time ago and with Ted's booming presentation. And Ted, thank you so much for being with us, and thank you for a very convincing presentation. So those are all the factors that made us want to go into that direction.

Thank you.

I'm curious, how would you expect Monroe to go through a credit cycle? And what was the experience like in '09 please? I don't know if it's for.

Well, it's back to you and probably, you can. But as you say, it has gone through it, and we will experience. Ted, maybe you want to take a mic? You have a mic for. Yes. Thank you.

Every LP asked that same question. We've gone through 7 credit cycles in the last 20 years. The most severe was the financial crisis, 2007, 2009. We generated about a 20% return for our investors during that period because what we did is we decided not to originate new transactions, but we bought transactions in the secondary market from other lenders that needed to unload assets and we bought them at big discounts. So the key to any business in credit is good underwriting and good portfolio management. And about half of our investment team is made up of underwriting and portfolio management. We talked about doing deals. We'll do 80 to 100 deals in a year. So we do deals every week.

Well, I may join for some of you may know, but I've been a banker in my life and I've been going through many credit during this period, and I've been sharing the credit committee of the firm for 15 years. So I've been exposed to credit, and I've been discussing with many credit -- private credit firms since the last 2 years. I think that what I've seen at Monroe was the best structure into managing credit. They are doing the way banks do, which is a different set of eyes to look to it. And origination, underwriting, risk management that is very important. Many credit -- private credit firms make the same as a private equity, the man that originate own the credit also. And it's a lot of a committee where everybody says, I like it. I don't like it and so on. But it's not that structured organization where you've got origination underwriting risk management. And that's key. Second element, diversification. How many credit do you have per fund, Ted?

We don't like to see any individual credit more than about 3% of our portfolio. So we'll have in each fund, probably somewhere around 100 different credits.

Yes. That's the other elements. When you want to mitigate risk and credit risk, you need to have diversification, and that's key to the success of it.

Thank you I have a question from the web for David. David, it was about ACAMS. In your introductory -- I would say, in your introduction, you said the carve-out was long and difficult. What has been the most difficult thing to do? And what are the 2 most important lessons you learned from this process?

Yes. So it was a complex carve-out for many reasons. One, to build a stand-alone entity is difficult. But I think we have to remember that we did not bought out a company out of a listed company. We bought a division out of a listed company with another partner. So Adtalem sold its financial division, and we had to partner with another PE firm who was interested in an asset which was very different than ACAMS. So we had to do a sort of a double carve-out between -- from a Adtalem and from the financial division, it was quite complicated. And so we had to build, again, a new learning management system, we had to recreate the culture and that involved hiring new people as well, new talent. So I think we properly estimated the cost of this carve-out. We thought it would be like roughly a $12 million investment. And I think we ended up close to this number. So the amount of expenses was properly sized, but it took more time than we thought. We had the proper agreements with TSA, the service agreement with Adtalem that was well negotiated. But we thought we would be out of the wood in 6 to 12 months. And after 12 months, we were separated from a Adtalem, but there was still a lot of wood to chop to create this culture to align to the new business model, as Neil and Mariah mentioned, moving from B2C to B2B. So that -- to create the glue and the energy to go to where ACAMS is today took probably more time than we thought.

Thank you. And I have a very straight to the point question. Given your LTV today, what is the next asset for sale?

We are managing capital allocation, capital rotation. We'll keep that for us. You'll see. There's no asset for sale.

Right. Another question about private asset management. What will be the priority on your next vertical for private asset management, infra or private market solutions?

Well, it's a difficult one to say. Let's say that infra is an obvious one. Short answer.

Another question in the room. Okay.

[indiscernible] Management. Just maybe coming back on the previous question from the webcast. Can you just remind us the range of LTV ratio you seek as normative or you're being comfortable with, please?

Well, we are -- the target is to be below 20%. So we are at 20%. So the target is to be below that. Whether we are comfortable is -- I don't think there's 1 lever. 15% is probably an area where it's easy to manage because you have more flexibility when you are at 20%, you have to first sell before you buy, but that's the range, around 15%. Yes probably.

And as we've mentioned, a wide range of possible IRRs and investment classes in the previous presentations, how do you consider increasing share buyback today, considering the discount and the high return on equity it could generate for all shareholders, family and nonfamily members, of course?

Well, again, we've made a program last year and share buyback has been, I think, a positive in term of asset -- net asset value reduction. I think it was a contributor to that. That's the way to attract the value and to show it. What we want to do is to make sure that whenever we invest the money, we do it with taking into account the financial structure. And today, our priority is to make sure that we manage well the financial structure. So prior to do significant share buyback, we have to manage asset rotation.

So we did put on hold the share buyback program, the $100 million buyback program we announced with the 20% LTV as of today, it's on hold.

So if we have no more questions in the room, I think it's the end of this Investor Day. I would like to thank every speaker, every CEO who came to present to you their companies and help us to make you better understand where are the creation levers for Wendel. I would like, of course, to thank the IR team who organized this. It was not easy. But once again, thank you very much for attending. We have a cocktail for people who are there. For people on the webcast, sorry for you. Thanks very. Thank you very much. See you next year.