Norbert Dentressangle has continued its record of profitable growth powered by successful acquisitions, with results for 2014 seeing an increase in revenue of 15.8% to €4.7bn and net income up by 8.3% to €75.9m.
Part of this growth was due to the purchase of Jacobson in the US, however this did not depress underlying earnings, with what is now the US arm of Norbert Dentressangle continuing to hit an EBITDA margin of over 10%. Organic revenue growth for the rest of the company was 4.1%.
As usual with Norbert, the expansion is being fuelled with debt, however leverage remains around 3 times EBITDA which is less than the high-point reached in 2007 after the purchase of Christian Salvesen.
Discussing the means of managing such an aggressive strategy of acquisition with Transport Intelligence Norbert Dentressangle’s CEO, Herve Monjotin, commented that the company views strength in operations as being central to successfully integrating new businesses, “The risk is that you lose the company culture, especially the excellence in operations”. Yet the company remains highly decentralised with just a small team of 40 people at the corporate headquarters and so, by implication, relies on the national businesses to remain true to the Norbert Dentressangle culture.
The company’s marketing strategy in contract logistics tends to be orientated towards consumer goods and retail. e-commerce is a particular focus with its UK business turning over €240m in this segment, something which Norbert is looking to use as the basis for expansion into continental Europe. The positioning in the US is slightly different, but the plan is to leverage the company’s existing European business with major OEMs in order to gain contracts from them in the US. This is a strategy that has worked in the UK, France and Spain, now Norbert is looking to apply it on an increasingly global scale.
Contract logistics is the largest part of Norbert’s business but it does not intend to neglect its road freight division in Europe. Heavily exposed to traffic between the UK and France it had an organic revenue growth of 2.6% in 2014 and EBITDA growth of 11.7%. This is a good performance in a tough market, made harder by the depressed nature of demand in much of the French economy. Even so the profitability in the business has been declining over the past decade. Despite the growing size of Norbert’s contract logistics activities, Herve Montjotin said that the transport business remains a key pillar in the company “delivering both growth but also free cash flow”, which is important in the company’s wider strategy.
Freight forwarding has been an area of particular focus for Norbert with 2014 seeing profits double to €3.5m on revenue up 42% at €206m. Norbert’s presence in freight forwarding is small yet it is clearly of strategic importance for the company. Herve Montjotin asserts that it is a “lever for globalisation, without which we would not have done the Jacobson deal”. The clear implication is that it will continue to look for purchases in the future, although possibly not until the Jacobson purchase is digested and the financial options are available.
Overall Norbert Dentressangle has ambitions to enter what Montjotin calls the “tier one” of global logistics providers. This is not an unusual sentiment among multi-billion dollar logistics companies. However what makes Norbert different is that, over the past fifteen years or more, it has demonstrated the ability to deliver the type of sustainable, profitable growth that could make it a presence alongside all but the very largest logistics companies. The next few years will decide whether the model that has delivered so well in national and European markets, will work at the global level.