INTEGRATED REPORT 2017 Unlocking THE tal nts IN OUR SMEs 2017 HUMAN CAPITAL FINANCIAL CAPITAL INDUSTRIAL CAPITAL INTELLECTUAL CAPITAL ENVIRONMENTAL CAPITAL HIGHLIGHTS Eurazeo PME III Acquisition of 4 new talents In’Tech Medical 3 new digital AROUND €3 M in the Eurazeo €658 M projects at in avoided costs were raised for the Eurazeo PME team PME III fund: €408 million from Redspher The portfolio companies are Eurazeo and €250 million from stepping up the roll-out of their The 3 digital projects Alexis, Florent and Charles third parties, including €20 million CSR strategies rolled out in 2017 enabled have joined the investment from private investors that chose Redspher to generate team and Margaux has French private equity additional revenues joined the corporate of €7 million team. In 2018, Anne will boost our competencies in management & organization Sale of Colisée Group 15 57% deals Eurazeo PME became a 57% shareholder completed SOCIAL & RELATIONSHIP 2.5x of In’Tech Medical, 2 acquisitions multiple achieved on the sale of at Eurazeo PME III CAPITAL 500 Colisée Group to IK Investment leader in the (Smile, In’Tech Medical) hirings at Smile Partner for €236 million, three manufacture of years after the acquisition 11 build-ups orthopedic surgical over the next EF Express (Redspher Group), €3 instruments. Jacques Boulard BILLION 4 years (Odealim Group), The ambition we shared Upela (Redspher Group), in socio- P.12 (Colisée Group), Following the 2017 acquisition with management is Netwave (Orolia) economic of Smile, a French Open to develop the product Touvet (Odealim Group), Source leader, Eurazeo PME offering and expand its Schwerdtfeger impacts approved the Open Arrow (Redspher Group), 2021 strategic plan with an worldwide coverage Envie de Fraise In 2017, we analyzed for the objective to attract more (MK Direct Group), first time the socio-economic than 500 talents in 4 years Pyxidis (In’Tech Medical) footprint of Eurazeo PME and its Insor (Odealim Group) investments worldwide Virtua (Smile) 2 disposals Colisée Group, Fondis Bioritech eurazeo PME ¢ INTEGRATED REPORT 2017 CONTENTS Eurazeo PME has embarked on a new sustainable 01 EURAZEO PME growth cycle 2017 Highlights combining 01 Editorial 02 Business model innovation and 04 Joint interview talent development. Virginie Morgon/ Olivier Millet 02 WORKING IN CONCERT 09 Ecosystem 10 Material topics 12 Team and organization 16 Governance 18 Portfolio of SMEs 2017, mary of the study available on our partner last year, we are delighted a thrilling year! website. to welcome Anne Dousset as Se- In addition to the successful launch Other new features this year: we nior Advisor in Management & Or- 03 ACCELERATING INNOVATION 03 of the Eurazeo PME III fund, we car- have promoted for a digital version ganization in 2018. 21 Strategic ambition ried out two major acquisitions - Smile for our integrated report (www. At the same time, we wish to boost 22 Growth drivers and In’Tech Medical -, sold Colisée rapport-integre-eurazeo-pme. our international coverage in the 24 Risk management and completed 11 external growth com/2017), and completed our next few years in Germany, Spain transactions and 2 refinancings. The materiality analysis by consulting and Italy to better identify and results, in line with our goal (16% NAV our main stakeholders. Many of analyze potential acquisitions. growth on a comparable scope ba- you took the time to respond to our In the same vein as Eurazeo PME II, BE A COMMITTED PLAYER sis), and the Colisée sale price reflect survey and we would like to thank the €658 million raised will enable us 04 the outstanding contributions of our you. 27 Responsible commitment to support the growth of about ten teams and those of our investments. French SMEs over the next 5 years. 28 Socio-economic footprint French SMEs/SMIs are awakening; Eurazeo PME footprint: 89,000 Talent innovation and we are ready to support them! jobs and €3 billion per year acceleration are crucial to the transformation process FINANCIAL AND NON- For the first time, we measured the Convinced that our added value Olivier Millet FINANCIAL INFORMATION socio-economic footprint of our lies above all in our ability to inno- Chairman of the Eurazeo PME Executive Board 05 activities. With our co-investors, we and Member of the Eurazeo Executive Board 33 Financial information vate and accelerate the sustai- support over 89,000 jobs worldwide 34 Non-financial information nable transformation of our com- and generated nearly €3 billion in panies, we continue to expand our economic impacts in 2016. This in- internal expertise. Following the ar- tegrated report* contains a sum- rival of Patrice Henry as Operating * For further information on the integrated reporting approach: www.integratedreporting.org 01 eurazeo PME ¢ INTEGRATED REPORT 2017 eurazeo PME ¢ INTEGRATED REPORT 2017 OUR BUSINESS MODEL ur growth over these past 10 years illustrates the robustness of Oour business model. SPEED UP THE GROWTH OF In addition to injecting capital, we pool together talents to ensure sustainable and shared growth. FRENCH SMEs EURAZEO PME RESOURCES* HUMAN EMPLOYEES Within 3 teams 19 Executive Board and investment team Operational support Corporate functions with the support of the Eurazeo teams FINANCIAL €658M €550M 16% 84% €277M Invested capital 84% 16% Available capital BUSINESS MODEL IMPACTS ON OUR ECOSYSTEM EZ PME I EZ PME II EZ PME III HUMAN FINANCIAL INTELLECTUAL For the 7 companies sold: DEALS acquisitions, build-ups, disposals - have 6,109 the average investment strengthened recognized know-how since 2006 2.3x 68 JOBS multiple on divestment in portfolio companies SOCIAL & RELATIONSHIP in 2017 average annual 23% PARTNERS return over the transformation banks, legal firms, consulting firms, 01 02 03 04 period (IRR) 80 communication agencies, etc WIN THE DETECT ACT AS A MONETIZE CONFI- HIGH- MAJORITY AND SHARE MANUFACTURING INTELLECTUAL LABOR & SOCIETAL DENCE OF GROWTH SHAREHOL- THE VALUE DER M INVESTED FRENCH COMPANIES CREATED since 2006, including €121M in 2017 AND INTER- €8.3M €753M €785 in purchases that contributed to NATIONAL devoted by the companies to research & development economic activity and job growth INVESTORS ENVIRONMENTAL programs in 2017 in 2017 tons of CO2 eq.* MANUFACTURING emitted in 2017. A carbon ENVIRONMENTAL 10 footprint mainly generated by Eurazeo PME offices and travel €238M *Scope 1 and 2 7,500 INVESTED tons of CO2 eq.* the total by the companies for their emissions from all companies in 2017 development in 2017 *Scope 1 and 2 * Excluding portfolio companies 02 03 eurazeo PME ¢ INTEGRATED REPORT 2017 eurazeo PME ¢ INTEGRATED REPORT 2017 OUR VISION “WE WORK TO TRANSFORM TRANSFORM OUR COMPANIES AND, TO A GREATER Olivier Millet EXTENT, Chairman of the Eurazeo PME OUR COMPANIES SOCIETY ITSELF.” Executive Board and Member of the Eurazeo Executive Board WITH PASSION Olivier Millet AND ENTHUSIASM INTERVIEW VIRGINIE MORGON & OLIVIER MILLET Chairwoman of Chairman of the Eurazeo PME the Eurazeo PME Supervisory Board Executive Board With the change in its midcap champions. The successful O. M. } Our exceptional growth governance, Eurazeo has Eurazeo PME III fundraising has en- has not changed our DNA, which redefined its strategic abled us to further our substantial is based on 4 fundamental beliefs: priorities. How does Eurazeo growth and boost our socio-eco- strict investment discipline, patience PME fit into your strategy? nomic impact, while remaining to support the long-term vision in very selective in terms of our invest- our companies, cutting-edge ex- Virginie Morgon } Eurazeo has radi- ments. We have already invested pertise, and close relations with our cally transformed itself over the past in 2 companies in 2017: Smile and stakeholders. few years based on three primary In’Tech Medical, two high-potential •/•• thrusts: internationalization, business investments with committed mana- diversification and third-party fund gement teams. management. Eurazeo PME, which V. M. } Eurazeo PME, which now dovetails perfectly with these strate- comprises 19 professionals, is still the gic priorities, is a major division for best illustration of what we hope to the Group, as its creation was the achieve when we transform a com- first phase in our business expansion. pany. In 8 years, it has grown sixfold, Olivier Millet } Within Eurazeo, Eu- the team has completed over 58 razeo PME’s role is to ramp up the high added-value deals, and it has transformation of French SMEs/ been a pioneer in third-party fund SMIs to turn them into international management. 04 05 eurazeo PME ¢ INTEGRATED REPORT 2017 eurazeo PME ¢ INTEGRATED REPORT 2017 “WE ARE ETHICAL AND COMMITTED, AND WE EXPECT THE SAME HIGH STANDARDS FROM THE MANAGEMENT OF OUR COMPANIES AS WE DO FROM OURSELVES.” Virginie Morgon Virginie Morgon Chairwoman of the Eurazeo PME Supervisory Board and of the Eurazeo Executive Board Beyond your skills as issue for our companies. We have that we also fill our companies and an investor, isn’t it the to anticipate and manage disrup- partners with enthusiasm. Many of ability to offer experts to tions caused by Big Data, artificial the companies in which we invested, support companies in their intelligence or the omnichannel chose us because they were keen transformation that makes all approach. to join the Eurazeo Group. This is the difference? the greatest symbol of Eurazeo’s In an increasingly competitive success! V. M. } We do not simply provide private equity industry, how do capital. We are entrepreneurs who, Eurazeo and Eurazeo PME stand on behalf of our shareholders or out from other investment commissioning agents, are com- companies? mitted to management teams over the long term. Our common goal: V. M. } We are ethical and com- develop the necessary human and mitted, and we expect the same financial resources to transform our high standards from the manage- companies and seize investment ment of our companies as we do opportunities to support their future from ourselves.