2018 Registration Document
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2018 Registration document Annual Financial Report CONTENTS Group overview 3 Company financial statements 297 1 The strength of a unique model 20 5 5.1 Balance Sheet 298 A multi-expertise strategy 26 5.2 Income Statement 300 Scope of a global group 38 5.3 Notes to the Company financial statements 301 5.4 Statutory Auditors’ report on the financial statements 327 Eurazeo’s Corporate Social 5.5 Five-year financial summary (Article R. 225-102 of the French Commercial Code) 330 Responsibility 77 5.6 Customer and supplier settlement periods 331 2 2.1 A proactive CSR strategy 78 2.2 Non-Financial Performance Statement 92 Information on the Company 2.3 Methodology 117 and the share capital 333 2.4 Statutory Auditors’ reports 120 6 6.1 Information on the Company – Bylaws 334 6.2 Information on the share capital 340 6.3 Shareholding structure 344 Governance 125 6.4 Shareholders’ agreements 348 3 3.1 Management and Supervisory Bodies 126 6.5 Transactions in the Company’s shares 351 3.2 Compensation and other benefits received 6.6 Factors affecting a potential takeover bid 354 by corporate officers 165 6.7 Additional information 357 3.3 Interests held by members of the Supervisory and Executive Boards in the Company’s share capital and transactions in the Company’s shares by members of the Supervisory and Executive Boards 187 3.4 Risk management, internal control and main risk factors 189 Shareholders’ Meeting 361 3.5 Commitments under co-investment plans 204 7 7.1 Special Report on share subscription and purchase options (Article L. 225-184 of the French Commercial Code) 362 7.2 Special Report on the grant of free shares prepared Consolidated financial statements 207 in accordance with Article L. 225-197-4 of the French Commercial Code 368 4 4.1 Consolidated Statement of Financial Position 208 7.3 Agenda 371 4.2 Consolidated Income Statement 210 7.4 Presentation and draft resolutions 372 4.3 Consolidated Statement of Other Comprehensive 7.5 Observations of the Supervisory Board on the Executive Income 211 Board’s report 397 4.4 Consolidated Statement of Changes in Equity 212 7.6 Statutory Auditors’ special report on related-party 4.5 Consolidated Statement of Cash Flows 214 agreements and commitments 398 4.6 Notes to the Consolidated Financial Statements 216 7.7 Other Special Reports of the Statutory Auditors 407 4.7 Statutory Auditors' report on the consolidated financial statements year ended December 31, 2018 290 2019 Cross-reference tables 412 Registration Document Cross-Reference Table 412 Annual Financial Report Cross-Reference Table 414 Executive Board Management Report Cross-Reference Table 415 Social, environmental and societal Information Cross-Reference Table 417 2018 Registration Document Eurazeo REGISTRATION DOCUMENT ANNUAL FINANCIAL REPORT Eurazeo is a leading global investmentcompany. With its considerable private equity, venture capital, real estate, private debt and fund of funds expertise, Eurazeo accompanies companies of all sizes, supporting their development through the commitment of its 235 professionals and by offering deep sector expertise, a gateway to global markets, and a responsible and stable foothold for transformational growth. Its solid institutional and family shareholder base, robust financial structure, and flexible investment horizon enable Eurazeo to support its companies over the long term.” This label recognizes the most transparent Registration Documents according to the criteria of the Annual Transparency Ranking. The English language version of this report is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, as in all matters of interpretation, views or opinions expressed in the original language version of the document in French take precedence over the translation. This Document is a free translation of the Registration Document that was filed with the French Financial Markets Authority (AMF) on March 20, 2019 pursuant to Article 212-13 of its General Regulations. It may be used in support of a financial transaction if supplemented by a prospectus approved by the AMF. This document contains all information relating to the Annual Financial Report. It was drawn up by the issuer and is binding upon the persons who signed it. Eurazeo 2018 Registration Document 1 2 2018 Registration Document Eurazeo 1 GROUP OVERVIEW Profil 4 The strength of a unique model 20 Message of Michel David-Weill, Chairman The dual model 24 of the Supervisory Board 6 Stakeholders 8 A multi-expertise strategy 26 Challenges 10 Vision by Virginie Morgon, Chief Investment divisions 30 Executive Officer 12 2018 highlights 36 Management team 16 Business model 18 Scope of a global group 38 Multiple expertise 42 Governance 50 Financial and stock market indicators 54 Non-financial indicators 64 Eurazeo 2018 Registration Document 3 GROUP OVERVIEW Profil OUR ORIGINS ARE FRENCH OUR DYNAMIC IS EUROPEAN OUR AMBITION IS GLOBAL A SPECIFIC APPROACH We provide our investments with our industry expertise, transformation OF HISTORY experience and our exceptional 130 YEARS access to global markets A UNIQUE AND FLEXIBLE ORGANIZATION Asset 2 4 Investment 5 8 classes divisions 2017 2018 2017 2018 Private debt 19% Private Equity 61% 16% Private funds 4% Real assets Assets under managment breakdown by categories as of 12/31/2018 4 2018 Registration document Eurazeo Offices dedicated to investment Offices dedicated to development Luxembourg London Frankfurt 1 Paris New York Shanghai Madrid São Paulo 235 Buenos Aires 20 EMPLOYEES NATIONALITIES IN DIVERSIFIED €6 BN €11 BN in Net on behalf ASSETS Asset of investor €17 BN Value partners SUPPORTED COMPANIES* 161 158 Small start-ups 55 & Mid-cap 374 Growth * as of 12/31/2018 Eurazeo 2018 Registration document 5 GROUP OVERVIEW Message from the chairman of the supervisory board Michel David-Weill, Chairman of the Supervisory Board MESSAGE FROM THE CHAIRMAN OF THE SUPERVISORY BOARD FROM THE CHAIRMAN OF SUPERVISORY MESSAGE 6 2018 Registration document Eurazeo GROUP OVERVIEW Message from the chairman of the supervisory board THE ERA IN WHICH WE LIVE, MARKED BY SURGING 1 TECHNOLOGICAL PROGRESS AND THE DISRUPTIONS THUS GENERATED, is reminiscent of the late 19th century. We live in a period in which growth and opportunity go hand in hand with uncertainty and disarray. This context explains why Western countries are in relatively good shape DIVIDEND economically, with a true resurgence in the United States and a cautious renewal in Europe, while experiencing a social and PER SHARE* political situation that is cause for concern. The stock market correction at the end of 2018 partially reflects this trend. IN THIS STATE OF UNCERTAINTY, where liquidity is abundant, private equity is enjoying growing success, justified by its ability to obtain higher returns – even though, and the nuance is significant, investment opportunities remain dear. 1.25€ I believe that this asset class still represents the best form of investment, provided it targets demanding companies whose actions are guided by prudence, which is the case with Eurazeo. OUR COMPANY IS UNDERGOING A TRANSFORMATION AS IT OPENS TO THE WORLD: while diversifying its business lines, it strives to preserve its entrepreneurial spirit, gradually bringing in ever greater external resources. This diversification has its advantages: Eurazeo can benefit from permanent capital combined with funds from loyal external partners, while securing greater stability for its shareholders, achieving more permanence through management results than capital gains. Our challenge for the future will be to generate sustainable and profitable growth for shareholders and all stakeholders. To accomplish this, Eurazeo must continue to invest in companies that have potential, and whose development will be assured through Eurazeo’s expertise and multiple contacts. TO MEET THIS CHALLENGE, our Company has solid foundations, based on trust. I am especially happy to note that my rapport with Virginie Morgon, whom I have known for BONUS more than 25 years and who has contributed so much to our 1 Company’s development over the last ten years, is as strong as it was with the former Chairman of the Executive Board. I am also delighted with the atmosphere of total trust and SHARE exchange with Jean-Charles Decaux, who became a major shareholder two years ago alongside my family. We share the FOR 20 SHARES HELD same view of Eurazeo’s future and believe in its success. This is illustrated by the Board’s decision to propose an ordinary dividend of €1.25 per share, in addition to a one-for-20 bonus share issue, to the Shareholders’ Meeting. * proposed to the Shareholders’ Meeting of April 25, 2019 Eurazeo 2018 Registration document 7 GROUP OVERVIEW Stakeholders A PERMANENT DIALOGUE WITH OUR STAKEHOLDERS Civil society • Ecosystem of our portfolio companies (including consumers) • Professional associations • Opinion leaders, Media & think tanks Information • NGOs and transparency Government & regulatory authorities d AMF c Regulators, policymakers • National and local authorities • Standard-setting bodies Appeal (Other economic sectors) and talent retention Suppliers c Investment banks c Senior Advisors c Rating agencies • Service providers, technical advisors Financial and non-financial Financial community economic performance c Lenders (banks) c Financial and non-financial analysts KEY • One-off or ad hoc interactions c Long-term interaction, mutual influence d Significant