A long-term investor
Wendel is a hands-on investor and shareholder that assists sector-leading companies in their long-term development. Wendel's business model combines the entrepreneurial passion born of a long family tradition with a culture of performance and accountability.
Deutsch
High-performance connectors
Present in 25 countries • 9 factories worldwide • 3,200 employees
| ($ million) | 2007 | 2008 | Δ |
| Net sales | 599.8 | 659.7 | + 10 % |
| Adjusted operating income (1) | 89.5 | 129.1 | + 44 % |
| as a % of net sales | 14.9 % | 19.6 % | |
| Dette financière nette | 694 | 714 |
(1) Adjusted operating income before accounting entries on
goodwill allocation, management fees and non-recurring items
How Wendel is involved
• Management Board:
Bernard Gautier, David Darmon,
Patrick Tanguy (members)
• Audit Committee:
Jean-Michel Ropert (Chairman),
Benoît Drillaud
• Strategic Committee:
Bernard Gautier (Chairman),
David Darmon
• Appointments and Compensation Committee:
Bernard Gautier (Chairman),
David Darmon
Why we invested
Founded in the US, Deutsch designs and custom-manufactures products in conjunction with its clients’ R&D departments. Its innovative products combine performance (aluminum and composite-material connectors, for example) with resistance to heavy stresses (a fire in an aircraft engine, for example). All its products meet the most stringent quality standards. Deutsch is among the world leaders on its markets, which have high barriers to entry, such as the long client-accreditation procedures and a high level of skills and experience gained in research and development. Deutsch has also developed numerous original connector solutions, such as aluminum cables for the Airbus A380. The Group’s growth is based on developing markets, such as civil and military aerospace and offshore installations, as well as targeted acquisitions.
How Wendel has helped Deutsch to expand
Since being acquired by Wendel in 2006, Deutsch’s teams have worked to merge three previously independent regional companies (US, France and the UK) into a global group that is structured market-by-market, and adapted to its environment and its new challenges. The group is now composed of three major integrated divisions of global scope: industry, aerospace and offshore. Numerous synergies have been generated, which have led to noteworthy operational improvements in fabrication, cost savings and organic growth. The new group’s scope of activities has been streamlined through the divestment of non-strategic activities (Relays) and targeted earnings-enhancing acquisitions (LADD, SERVO).
Strong improvement in the operating margin
In 2008, Deutsch’s net sales came to $659.7 million, with brisk organic growth of 5%, in spite of a difficult context, which hit fourth-quarter performances. Adjusted operating income rose 44% to $129 million. The operating margin improved by 450 basis points and is one of the highest in the sector. Net financial debt was almost stable, at $714 million, in spite of the acquisitions that were made.
*In equity and shareholder loans
Outlook
After two years devoted to streamlining its internal processes, which have helped it better withstand the recession, Deutsch plans to step up its programs for improving its industrial productivity and cutting its costs. It will leverage its R&D and global approach to major clients and main prospects, and it will focus its investment resources on strategic production facilities in Asia and Central America.
