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![skfiresafetygroup.com
SK FIRESAFETY
SK Products: mobile fire protection equipment
SK Systems: bespoke first intervention fire
safety systems for commercial sites
SK Oil, Gas & Petrochemicals: specialist first
intervention fire safety Oil & Gas assets
SK Aviation: aircraft maintenance and safety
# ORGANISATION CHART
SK FIRESAFETY GROUP GROWTH
SK FireSafety group ranked 4th
in the Dutch Financial Times’ ranking
of the fastest growing companies
in the Netherlands.
# AWARD
The group has expanded its
regional presence to Scandinavia,
the Middle-East, Africa and The Caspian
in the last three years.
# INTERNATIONAL
CEO of SK FireSafety Group
with EWALD DRAAIJER
What underpins SK FireSafety’s
impressive growth history?
Our success is founded on innovation.
Ten years ago we developed a digital
work flow model that radically improved
the efficiency of our service engineers
and logistics. That early shift to digital
enabled us to develop key management
skills and systems that are not easily
replicated, particularly given that many
of our competitors still operate on
inefficient, paper-based systems.
EBITDA margins at our products and
services units are over 20%, double that
of analog competitors. That provides
an advantage in terms of reinvesting
for further growth and positions us to
grow through acquisitions. We know
from experience that our digital model
delivers significant efficiency and
cost benefits when applied to analog
companies.
Acquisitions have been a key
growth driver for SK FireSafety,
will that continue?
We are looking at acquisition
opportunities in Europe and they could
come to fruition quickly. Yet we are
not reliant on deals. We have posted
double digit organic growth over the
last couple of years and that can be
replicated.
Our Oil & Gas business is well positioned
to benefit from the significant demand
for upgrading equipment and fire safety
solutions on the North Sea platforms,
which are old but still in use as
advances in recuperation technology
extends their life.
Our aircraft maintenance and safety
unit, SK Aviation, is also poised to
grow following a complete operational
review and we will pursue acquisitions
of smaller rivals in Europe, the Middle
East and Asia.
Why did you choose to work
with Apax Partners?
From our first meeting, we formed
a really good impression of Apax
Partners. They came with a strong
team, including five partners and
Eddie Misrahi, which was proof of
their interest. Subsequent discussions
were always positive and they clearly
understood our project and philosophy.
With Bertrand Pivin, and the team as a
whole, what you see is what you get
and I really appreciate that.
# INTERVIEW
SERVICES
SK FIRESAFETY GROUP GROWTH
# REVENUES CHART
40
2011
100
2014
200
to
250
Target
[medium-term]
3 €m
Apax Partners2014 Annual Report 55](https://image.slidesharecdn.com/apx2014raenbdsans-trait-150409094959-conversion-gate01/85/Apax-Partners-2014-Annual-Report-56-320.jpg)
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Apax Partners 2014 Annual Report
- 1.
- 2. 2014 ANNUAL REPORT ApaxPartners2014 Annual Report 1
- 3. Content 04 32 55 Interview withEddie Misrahi, Chairman and CEO Focus on debt strategy with Annick Bitoun Interview with Ewald Draaijer, CEO of SK FireSafety Group MESSAGE FROM THE CHAIRMAN AND CEO 4 APAX PARTNERS 7 Fundamentals 8 Investment strategy 13 Responsible investing 18 Our investors 24 2014 A YEAR OF VALUE CREATION 27 2014 highlights 28 Portfolio activity 29 Portfolio performance 34 Fund performance 36 SNAPSHOT OF OUR PORTFOLIO COMPANIES AT 31 DECEMBER 2014 39 TMT (Technology-Media-Telecom) 40 Retail & Consumer 44 Healthcare 48 Services 51 15 PORTFOLIO COMPANIES AT 31 DECEMBER 2014 56 CONTACTS 57 This report covers the activities of funds managed by Apax Partners SA and Apax Partners MidMarket SAS. €158mproceeds across all funds 17%gross portfolio return €80minvestments and commitments 15portfolio companies at 31 December 2014 Apax Partners2014 Annual Report2
- 4. Profile Portfolio companies’ keyfigures There are many entrepreneurs in France and elsewhere in Europe aiming to make their companies champions of their industries, both at home and abroad. To succeed, these entrepreneurs need the backing of a committed investor who can provide vital resources and support. Realising the potential of these companies and developing them is what motivates Apax Partners. Our 40 years of experience and sector specialisation represent the key strengths that make us the right choice. They enable us to identify the most promising companies in our specialist sectors, understand their growth drivers and support their management as they work to achieve their ambitions. Our strong values and ethics also set us apart. We pride ourselves on being a professional, respectful, exacting and bold partner. By selecting Apax Partners, entrepreneurs are choosing a committed, supportive and stimulating investor who will share their vision, their strategy and their long-term development. Our success is built on the close, trust-based relationships that our teams have with our entrepreneurs and investors alike, and on our desire to succeed as a team. Apax Partners is an established, leading private equity firm both in France and in Europe. We assist entrepreneurs who have ambitious growth plans for their business. Apax Partners réussit à ceux qui veulent réussir. Ambitious expansion explained by Jean-Pierre Chantrel WHO WE ARE? WITH FOUR DECADES OF EXPERIENCE, APAX PARTNERS RANKS AMONG THE LEADING PRIVATE EQUITY FIRMS IN FRANCE AND EUROPE. OUR MISSION IS TO HELP AMBITIOUS ENTREPRENEURS GROW THEIR BUSINESSES. 33 4.3%average revenue growth 9.2% average EBITDA growth 63,600people employed 13build-up acquisitions Apax Partners2014 Annual Report 3
- 5. Internationalisation, digitalisation and build-ups drovevalue creation in 2014 Apax Partners posted strong results for 2014, characterised by the excellent performance of our funds and underpinned by robust portfolio company growth. Over the course of the year, Apax Partners’ funds took in €158m from two realisations and a recapitalisation. Portfolio companies increased revenues by an average 4.3% and grew average EBITDA by 9.2%. Those gains translated into a robust 17% increase in the total value of our funds. The year was particularly notable for the increase in the value of Apax Partners’ funds. It was a very positive year from the standpoint of value creation. Our portfolio companies grew strongly, both in terms of sales and earnings. Companies in our Apax France VIII fund led the way with revenue growth of 13% and EBITDA growth of 14%. The result was a gross portfolio return of 26.5% for Apax France VIII. That performance was supported by strong Interview with Eddie Misrahi Chairman and CEO Apax Partners2014 Annual Report4
- 6. “2015 has started witha flurry of work and we have deals in the pipeline.” “Private equity also has a role to play in digital transformation of SMEs. We are determined to be at the forefront of that change.” growth in our other funds, leaving us with a global gross portfolio return of 17%. Credit for that performance rests with our outstanding CEOs and the effectiveness of their partnerships with our investment teams. It also validates Apax Partners’ talent at identifying and driving growth opportunities through our focus on internationalisation, consolidation and digitalisation. Over the course of 2014, you formalised three themes as Apax Partners’ main levers of growth: internationalisation, consolidation and digitalisation. Can you talk more about that? We have long viewed them as the key drivers of value creation and as our core, differentiating talents. That is evident in our activity over many years, and again in 2014 when six companies secured bolt-on deals or significant commercial contracts in foreign markets; four companies were active in consolidating their existing markets through build-up activity; and six companies instigated major digital initiatives to drive sales and improve service quality. Over 2014, we developed a framework that formally imbedded those three levers of growth at the heart of our activities, ensuring they drive our acquisitions and are systematically pursued at our portfolio companies. Why have you focused on digitalisation as a driver of company growth? The world is becoming digital, yet many businesses, and sectors, still fail to fully grasp the implications of that. Our experience across all our investment sectors has convinced us that an effective digital strategy is an essential growth driver and key to companies’ long-term survival. That is why digitalisation is a core element of our value creation strategy. A CEO’s awareness of digitalisation is the key factor in implementing an effective digital strategy. There are three types of CEOs: those who are fully aware of the shift to digital and acting accordingly; those who are aware of the issue but don’t have an effective action plan; and those who are unaware or dismissive of digital. We love the first type, believe we can help the second and won’t back the last. Private equity is also facing a digital transformation. We are determined to be at the forefront of that change and use it to our advantage. In 2014, we instigated several digital projects and expect to begin to see the fruits of those endeavors in 2015. During 2014, Apax Partners nominated a new Partner and recruited its first Debt Manager. What were the reasons for those appointments? Apax Partners has always evolved with its investment environment and the two appointments are part of that evolution. In September, we recruited Annick Bitoun to fill our newly created role of Debt Manager. Her appointment establishes a single coordinating function for debt financing activities and the provision of financing support to portfolio companies. At the end of the year, we nominated Franck Hagège as a Partner in our Retail & Consumer team. Franck is the fourth partner to have been appointed from within the firm. We are one of the very few French, middle-market firms that are able and determined to foster future partners and we see that as a real strength. It means we create partners who understand our culture, helping to ensure that our successful investment processes are repeatable. What are your expectations for 2015? The year has started with a flurry of work and we have deals in the pipeline. Our current fund is 60% invested and we hope to raise that to 80% or 90% by the end of 2015. We also expect to finalise two or three sales. In terms of our portfolio companies, we remain positive. The companies are forecasting organic EBITDA growth in the region of 10% and revenue growth of about 6%. Those figures exclude build-up deals, which are not budgeted but which should be expected. Apax Partners2014 Annual Report 5
- 7. Apax Partners2014 AnnualReport6
- 8. Fundamentals 8 Investment strategy13 Responsible investing 18 Our investors 24 Apax Partners A leading player in private equity in the French-speaking world Apax Partners2014 Annual Report 7
- 9. Apax Partners isan independent investment company specialising in financing for SMEs in France and abroad. We are a leading player in private equity in the French-speaking world. Our investment strategy is to take significant equity stakes in innovative, fast-growing companies in our sectors of specialisation. Apax Partners’ success is built on: • the collaborative relationships we develop with our entrepreneurs; • our desire to succeed as a team; • close, trust-based relationships with our investors. An independent company, wholly owned by its Partners Apax Partners is authorised by the AMF (Autorité des Marchés Financiers - the French Financial Markets Authority) and benefits from a short and efficient decision-making process: • decisions are made in Paris by the seven Partners; • Partners meet weekly to manage the support strategies of the portfolio companies and to identify investment opportunities. (management company) Financial institutions Insurance companies Pension funds Private investors Apax Partners Investors Companies supported Allocate funds Manages Provides performance reporting Identifies investment opportunities Supports entrepreneurs Develops companies Distribute proceeds Apax Funds Provide long term equity financing Fundamentals APAX PARTNERS TAKES EQUITY STAKES IN FAST-GROWING, INNOVATIVE COMPANIES IN OUR SECTORS OF SPECIALISATION. Apax Partners2014 Annual Report8
- 10. Fundamentals Private Equity pioneerin Europe One of the largest and most experienced teams in the French-speaking mid-market “Our independence is our strength: decisions are made in Paris, directly and efficiently. As entrepreneurs ourselves, we understand the needs of the business owners who come to us.” Eddie Misrahi Key dates The Apax France VIII fund is more than 60% invested 2014 Apax Partners in France decides to maintain its mid-market focus and independence from the other Apax Partners entities 2006 Maurice Tchenio and Ronald Cohen found Apax Partners’ predecessor Multinational Management Group (MMG) in France and the UK 1972 Apax Partners initiates France’s first venture capital fund, or FCPR (Fonds Commun de Placement à Risque), with francs 100m. 1983 The firm adopts a sector-focused strategy 1990 Apax Partners’ founder passes control of the firm to its partners 2010 MMG and Alan Patricof Associates (US) join forces 1976 Co-foundation of the French private equity association (AFIC) 1984 MMG is renamed Apax Partners 1991 Apax Partners is a pioneer of the private equity industry in Europe and in particular in France. In 1983, it raised the first fund exclusively targeting French investments, which became the first FCPR (Fonds Commun de Placement à Risque) to be launched in France. The French private equity association (AFIC) was created in 1984, co-founded by Apax Partners’ founder Maurice Tchenio and Apax Partners is led by Eddie Misrahi. He is assisted by six other Partners with an average of 16 years with the company. The investment team totals more than 20 professionals. It is organised into sector-teams of three to five professionals, many of whom have long- term experience working or investing in four other investment professionals. Since then, eight funds have been raised by Apax Partners in France, totaling more than €2.4bn. Today, Apax Partners is one of the most dynamic private equity firms operating in the French speaking mid-market, with more than €1.8bn invested over the past 10 years. their respective sectors. The sector-teams are supported by a dedicated business development team responsible for screening investment opportunities and developing privileged relationships with intermediaries. Our team of multidisciplinary investment professionals combine financial, operational and industry expertise. To manage and strengthen our highly-effective teams, Apax Partners applies rigorous internal processes for recruitment, training and promotion, with a long-standing policy of promoting from within. Apax Partners2014 Annual Report 9
- 11. Partners Thomas de Villeneuve TMT Bertrand Pivin BUSINESSSERVICES AND HEALTHCARE Eddie Misrahi CHAIRMAN AND CEO Monique Cohen BUSINESS & FINANCIAL SERVICES Gilles Rigal TMT Franck Hagège RETAIL & CONSUMER Bruno Candelier RETAIL & CONSUMER Apax Partners2014 Annual Report10
- 12. Eddie Misrahi Chairman andCEO Eddie’s time is divided between investor relations, various investment committees and managing the firm. He started his career at McKinsey in Paris before working in the United States in an American telecommunications group. He joined Apax Partners in 1991 as Partner in charge of TMT investments, before becoming General Manager in 2007. EddiewasPresidentoftheAFIC(Frenchprivateequity association) from 2007 to 2008. École Polytechnique,Harvard Business School. Lived 11 years in the US and SouthAmerica. LaunchedApax Partners’ digital initiative. Monique Cohen Partner Business & Financial Services, Head of Business Development MoniquebeganhercareeratParibas,wheresherose to head of Equity Capital Markets and then Senior Banker. Later, at BNP Paribas, she was Global Head of Equity. Since joiningApax Partners,Monique has concluded six investments,notably in business services (Faceo, Alma Consulting) and financial services (Buy Way Personal Finance,TEXA) Monique is an Independent Director on the Board of Directors of Safran and BNP Paribas and an independent member of the Supervisory Boards of JCDecaux and Hermès.She was a Board member of the AMF (Autorité des Marchés Financiers) France’s financial regulatory authority from 2011 to 2014. École Polytechnique. Lived three years in London. Worked on Alma Consulting’stransitionfromalocalcompanyinto a Europe-focused SME. Participated in Faceo’s build-up acquisitions in the UK,Germany and the Netherlands. Continued the digital transformation ofTEXA. International Build-up Digital transformation Bertrand Pivin Partner Business Services and Healthcare, ESG policy Bertrand started his career conducting advanced research in signal processing for Alcatel in Paris, France, before moving to the USA to oversee R&D projects for North American Telecom companies. He joinedApax Partners in 1993. Bertrand’s recent activity has included acquisitions, divestmentsandbuild-upsinprivateeducation,safety and security services,and healthcare. He is a Board member of Capio (Sweeden), Unilabs (Switzerland),SK Firesafety (Netherlands),Amplitude (France),and Groupe INSEEC (France). École Polytechnique, Telecom ParisTech, Harvard Business School. Lived several years in Germany and the US, speaks five languages. Oversaw 50 build-ups for Unilabs and Capio; Vizada’s transformative acquisition of Telenor Satellite Services, which created a worldwide leader in Mobile Satellite Services. Foster transformation of Groupe INSEEC through digital learning models. Gilles Rigal Partner TMT Gilles started his career as an entrepreneur with the creation of IGL, a software and services company which was sold five years later to Thales. He then joinedMcDonnellDouglasInformationSystemswhere he became Division manager, and Systar, a French- basedinternationalsoftwarecompanywherehewas successively General Manager for France, Europe and worldwide operations. In 1995 he joined BMC Software, the world’s 5th largest software vendor, as GeneralManagerFrance,risingtothepositionofVice President of EMEA. Since joiningApax Partners,Gilles has been involved in many investments including Altran, Cartesis, Gfi Informatique,Odyssey,andVocalcom. ENSEEIHT,University ofToulouse. 10 years of managing businesses worldwide. Managed around 30 build-ups directly and as an investor. 100%ofhisinvestmentshavebeeninthedigital space. Bruno Candelier Partner Retail & Consumer Bruno started his career in 1996 as a consultant for McKinsey & Company in Paris, London and Johannesburg. He joined Apax Partners as an AssociateandwaslaterelectedPartnerin2010.Since then,he has realised three transactions:Maisons du Monde,THOM Europe and Europe Snacks,and he is aBoardmemberofTHOMEuropeandEuropeSnacks. École Nationale des Mines,INSEAD. Lived six years in South Africa, the United Kingdom and theWest-Indies. Realised the merger between Histoire d’Or and Marc Orian. Developed the digital distribution channel (e-commerce and CRM) of Maisons du Monde. Franck Hagège Partner Retail & Consumer SincejoiningApaxPartnersin2004,Franckhasbeen involved in a number of transactions includingALAIN AFFLELOU, where he is a Board member, Europe Snacks,Maisons du Monde,Rue du Commerce and THOM Europe. Previously, Franck worked for five years as a managementconsultantwithA.T.Kearneywherehewas involvedinseveralassignmentsforcorporateandprivate equity players.He also worked at NetsCapital where he managed M&A transactions in the Internet field. HEC Business School,Stern Business School. LivedinNew-Yorkandworkedoverseveralyears on projects in Denmark and Belgium. Supported Rue du Commerce during the implementation of its marketplace strategy. Thomas de Villeneuve Partner TMT ThomasstartedhiscareerwiththeBostonConsulting Group at its Paris and New York offices, focusing on telecom and media clients. He joined Apax Partners as an Associate and was elected Partner in 2010.Thomas has participated in nineTMTtransactions,mostrecentlyinNumericable Belgium and Luxembourg, Cabovisão and Infopro Digital. He is a Board member of Altran and Infopro Digital. HEC Business School. Lived seven years in the US, Belgium and London. Supervised 12 build-ups for Infopro Digital, including the acquisition of Groupe Moniteur which doubled the company’s size. Participated in Infopro Digital’s successful transition from a print to digital model. “Partners each boast an average of 16 years with the company. The team combines extensive international, build-up and digital transformation experience.” Fundamentals Apax Partners2014 Annual Report 11
- 13. Fundamentals Front row, fromleft to right: • Nicolas Essayan • Aida Ben Lamine • Eddie Misrahi • Vincent Colomb • Francesco Revel-Sillamoni Second row, from left to right: • Thomas de Villeneuve • Qiongyan Shao • Julien Birman • Monique Cohen • Bertrand Pivin • Damien de Bettignies • Franck Hagège • Annick Bitoun Third row, from left to right: • Henry Capelle • Brahim Ammor • Edouard de Beaufort • Guillaume Cousseran • Bruno Candelier • Thomas Simon • Gilles Rigal • Christian Pimont The Apax Partners investment team “21 professionals dedicated to our sectors of specialisation.” Apax Partners2014 Annual Report12
- 14. Investment strategy Mid-size companies Companieswith growth potential Value Creation Healthcare Build-ups Retail & Consumer Digital transformation Business & Financial Services Trust relationship Financial optimisation TMT (Technology- Media-Telecom) Internationalisation OUR INVESTMENT STRATEGY IS TO TAKE SIGNIFICANT EQUITY STAKES IN INNOVATIVE, FAST-GROWING COMPANIES IN OUR SECTORS OF SPECIALISATION. Apax Partners2014 Annual Report 13
- 15. Investment strategy * LBO andgrowth only, since 1990. Technology-Media-Telecom Retail & Consumer 33% 19% 19% 14% 14% France UK Netherlands Germany Other 36% 32% 11% 11% 8% 2% UK Other France Switzerland Netherlands Germany 3 EUROSTOXX 600 TECH (by number of companies) 3 EUROSTOXX 600 RETAIL, FOOD & BEVERAGE (by number of companies) 3 TMT DEALS IN EUROPEAN FRENCH SPEAKING COUNTRIES FROM 2003 TO 2013 3 RETAIL & CONSUMER DEALS IN EUROPEAN FRENCH SPEAKING COUNTRIES FROM 2003 TO 2013 France leads the way France, a major player numberofdeals 0 2 4 6 8 10 12 14 Apax Partners outdistances the competition numberofdeals 0 2 4 6 8 Apax Partners outdistances the competition (source:Apax Partners,Mergermarket) (source:Apax Partners,Mergermarket) 25deals €918minvested* 22deals €596minvested* A SECTOR-FOCUSED MODEL PROVIDES APAX PARTNERS WITH A COMPETITIVE ADVANTAGE THANKS TO ITS IN-DEPTH UNDERSTANDING OF SPECIFIC INDUSTRIES. Apax Partners Competitor Apax Partners Competitor Sector specialisation Apax Partners2014 Annual Report14
- 16. Investment strategy numberofdeals 0 1 2 3 4 5 (1) Only servicescompanies have been selected within the Industrial Goods & Services Index. Healthcare Business & Financial Services 33% 19% 17% 17% 11% 3% Other Germany Switzerland UK France Netherlands 49% 21% 12% 11% 4% 3% UK Other Switzerland France Netherlands Germany 3 EUROSTOXX 600 HEALTHCARE (by number of companies) 3 EUROSTOXX 600 INDUSTRIAL GOODS & SERVICES, FINANCIAL SERVICES(1) (by number of companies) 3 HEALTHCARE DEALS IN EUROPEAN FRENCH SPEAKING COUNTRIES FROM 2003 TO 2013 3 BUSINESS & FINANCIAL SERVICES DEALS IN EUROPEAN FRENCH SPEAKING COUNTRIES FROM 2003 TO 2013 France, a significant player France, a major player Apax Partners is among the leaders numberofdeals 0 1 2 4 3 6 5 7 Apax Partners’ outdistances the competition (source:Apax Partners,Mergermarket) (source:Apax Partners,Mergermarket) 5deals €186minvested* 10deals €605minvested* Apax Partners Competitor Apax Partners Competitor Apax Partners2014 Annual Report 15
- 17. Growth focused Apax Partnersinvests primarily in companies with strong fundamentals and a potential for accelerated growth through strategic and operational change. Apax Partners’ portfolio companies are characterised by key criteria: • ambitious growth-driven entrepreneurs and management teams, that operate in a fully- aligned partnership with Apax Partners; • differentiated product offerings and market positions, providing downside protection and significant barriers to entry; • market leadership potential, either on a domestic, European or global level. Partnership approach Apax Partners’ relationship with the management teams is based on a shared enterprise vision, strictly aligned financial interests, and clearly defined respective roles. While corporate management is responsible for day-to-day operations, Apax Partners’ team challenges them to deliver profitable growth and provides ongoing advice on strategic issues, as well as assistance in support functions when requested (e.g. finance, human resources, IT and communications). Investment strategy Apax Partners focuses the growth strategy of its portfolio companies on three specific areas: internationalisation, build-ups and digital transformation. Implementing these strategies is made possible thanks to the trust-based relationships between entrepreneurs and the Apax Partners teams (see portfolio activity section). Value creation Internationalisation Entrepreneurs know that often the most promising growth opportunities can be found overseas. We have strong experience in implementing international strategies in our portfolio companies. Digital transformation Businesses that want to succeed must change their models to meet the expectations of millennials and embrace the major transformation that implies. In France, this generation will constitute half of the labour force by 2020 and its entrepreneurs will be the people Apax Partners will support in the future. The hyper connectivity of this generation has an impact on their consumption and how they act as employees. It is our mission to help prepare dynamic French SMEs to take advantage of this change by supporting their digital transformation. Build-ups With 70 operations between 2012 and 2014, build-ups have always been an integral part of accelerating the growth of our portfolio companies. Trust relationship We are strongly committed to the entrepreneurs that we back. When these entrepreneurs choose to partner with us they choose a committed, supportive and stimulating investor that will share their vision, their strategy and their long term development. Apax Partners2014 Annual Report16
- 18. Minority or majority investor ApaxPartners typically takes majority or significant-minority stakes and has systematic representation on the Boards of its portfolio companies. That enables it to participate in all major decisions and actively support the growth strategy implemented by its companies. Moreover, controlling positions enable Apax Partners to better negotiate investment and exit conditions. We also accept minority positions if the transaction is based on a genuine partnership with the management team, which confers us certain rights. Long-term investor Apax Partners typically operates on a five- year investment horizon, though this depends on the specific business plans and value creation objectives. An investment may be exited after just three to four years if a company outperforms its goals. Conversely, Apax Partners can hold an investment for six to seven years, for instance, when a business plan needs more time, or because of an economic downturn. Exit timing and routes (trade sale, secondary buy-out, IPO) are selected on the basis of their ability to best serve the twin interests of maximising exit values for Apax Partners’ investors and supporting portfolio companies’ future growth. Mid-cap Apax Partners targets LBO and growth capital investments in mid-size companies located primarily in French- speaking countries. We focus on businesses with enterprise values up to €500m. That incorporates an abundance of investment opportunities in the mid-market, including family-owned companies, non-core divisions of large corporations, undervalued listed businesses and private equity-owned companies where growth opportunities remain unexploited. France is the second largest private equity mid-market in Europe. 3 MIDCAP TRANSACTIONS (€50M-€1,000M) WITHIN APAX PARTNERS’ FOUR SECTORS (2010-2013) 200 100 0 UK NetherlandsFrance GermanyScandinavia SpainItaly Belgium Switzerland Scandinavia includes: Sweden, Finland, Norway and Denmark Source: Mergermarket Investment strategy Apax Partners2014 Annual Report 17
- 19. Apax Partners actsas a responsible investor, throughout our investment process and through the monitoring of our investments. Our approach includes: • Conducting systematic due diligence based on key criteria; • Establishing a “responsible” roadmap with our entrepreneurs, and following it throughout the investment; • Performing vendor due diligence when the investment is sold. Regulated management company Apax Partners is a portfolio management company regulated by the Autorité des Marchés Financiers (AMF), France’s financial regulatory authority. Within the framework of the agreement obtained from the AMF, Apax Partners has committed to respect certain standards of management and follow rules of good behaviour. The principles of internal control and business ethics are written, circulated and regularly checked and updated. The firm manages regulated funds known as Fonds Professionnels de Capital Investissement (FPCI) and is fully compliant with the EU’s Alternative Investment Fund Managers Directive (AIFMD). Apax Partners is also a member of Association Française des Investisseurs pour la Croissance (AFIC), the French private equity association. AFIC members must comply with the association’s code of ethics. Governance The company is managed by committees at the strategic, operational and investment levels. Two committees oversee the firm’s management. The Strategy Committee including all the Partners meets four times a year to discuss matters of strategic importance to the firm. In particular, it reviews fund performance, investment strategy, team performance, and sets overall business development goals. All Partners meet on a regular basis to take key operating decisions. Transparency Apax Partners has adopted corporate governance best practices across its management process including a commitment to transparency for all stakeholders. The company continuously provides comprehensive and extremely detailed reporting to its investors on the performance of investment funds and portfolio companies. These reports are updated on an on-going basis. Investment and value creation processes Apax Partners applies rigorous and consistent investment-selection and value-creation processes. Four committees scrutinise each investment at different stages of the investment life cycle: • Approval Committee. Monitors investment opportunities and works with the deal team to ensure that opportunities comply with the firm’s investment strategy and that due diligence is properly conducted. • Investment Committee. Makes all investment decisions based on very detailed information regarding the targeted business (market position, competitive analysis, risks, opportunities, management quality, etc.), as well as investment issues (business plan, financial structure, expected returns, etc.) • Portfolio Monitoring Committee. Monitors the operational and financial performance of portfolio companies on a formal basis. This process is in addition to monitoring carried out by deal teams, which meet regularly with portfolio companies’ management at Board meetings or reporting meetings. In addition to monthly reviews of portfolio company performance, full portfolio reviews, involving all the Partners, are held twice yearly to monitor and analyse each investment, update the business plan, and study growth or exit opportunities. • Exit Committee. Makes all exit decisions. Professional and responsible investor Apax Partners has always been committed to being a professional shareholder, and fully assumes all the responsibilities that entails. The firm consistently seeks to innovate to be ahead of major developments and in this spirit decided, in 2011, to embrace socially responsible investment and develop a comprehensive environmental, social, and governance (ESG) strategy, which is set out in the following sections. “Apax Partners is one of the few private equity companies that publishes an annual report, and has been a pioneer of that practice”. Eddie Misrahi Responsible investing APAX PARTNERS TAKES PRIDE IN ITS CORPORATE GOVERNANCE AND TRANSPARENCY POLICIES, AS WELL AS ITS INVESTMENT APPROVAL AND OVERSIGHT PROCEDURES. Apax Partners2014 Annual Report18
- 20. A voluntary ESGapproach Apax Partners’ commitment to excellence and innovation led it to define a set of environmental, social and governance (ESG) principals that are fully integrated into the firm’s investment strategy. The ESG approach is guided by two factors: risk management and the identification of opportunities to create value. Apax Partners signed the first social and environmental charter of the French Private Equity Association (AFIC) in 2008. A three-phase strategy We defined a three-phase approach that set out objectives for short, medium, and long-term action plans: 2011-2012: Apax Partners defined the strategy and took first measures at its own level • Signed the PRI (Principles for Responsible Investment). • Defined Apax Partners strategy with the help of Sustainable Development consultants. • Launched a review with investors, adressing their particular ESG concerns. • Allocated dedicated resources: a Partner and support staff were made responsible for the application of ESG policy. • Trained all Apax Partners staff in ESG. • Awarded the inaugural “GP Responsible Investing Award” by Pantheon. 2012-2013: Apax Partners launched implementation at portfolio company level • Implemented ESG due diligence in our investment process on a systematic basis. • Defined ESG specific principles and criteria to be monitored. • Contributed to specific ESG studies. • Carried out France’s first ESG vendor due diligence when selling Maisons du Monde. 2014-2015: Apax Partners reinforces its ESG efforts and implements its ESG strategy throughout France VIII portfolio companies At the Apax Partners’ level • Contribute to the development of ESG within the private equity sector: • signatory of AFIC’s new charter; • active member of AFIC’s ESG commission, participation in AFIC’s first ESG annual report; • panelist at conferences: PEI (Responsible Investment) in London, AFIC (Governance and ESG) in Paris; • contribution to PRI guide “Integration ESG in private equity” with a dedicated Apax Partners case study. • Offsetting carbon emissions: Since our carbon-balance footprint assessment in 2011, Apax Partners has offset its emissions. In 2014, our team voted to support two projects: “Wind power in New Caledonia”, a registered project conforming to Gold Standard criteria (GS n° 566), and “Efficient cooking stoves in Mali”, a registered project conforming to Gold Standard criteria (GS n° 414). • Our internal social policy: • competitive compensation policy (each staff member with at least three years of tenure is entitled to carried interest); • a minimum of two annual appraisal interviews and a structured career path with four milestones (four of the seven Partners started as Senior Associates); • training: individual and collective; • stability of the team: more than 16 years of seniority for the 7 Partners. • Reinforcement of dedicated resources: a Partner and the recruitment of a full time experienced ESG manager. • Half-yearly ESG updates to investors. “We are convinced that ESG topics contribute to creating value well beyond the improvement of financial performance.” Bertrand Pivin, Partner & ESG Policy and Mathilde Bonnans, ESG Manager Responsible investing Apax Partners2014 Annual Report 19
- 21. Responsible investing Pragmatic andconcrete support at the portfolio companies’ level We are convinced that Environmental, Social and Governance topics contribute to creating value well beyond the improvement of financial performance. This conviction has led to the implementation of a tailor- made ESG action plan for each company. Scope We offer close guidance and support to our most recently acquired companies. This position ensures that we have enough time to define and implement an ESG action plan over several years, for each company. Apax Partners ESG strategy is present throughout the investment process: At exit, Apax Partners: • Provides ESG vendor due diligence. Wind power in New Caledonia, one of the projects supported by Apax Partners to offset its carbon emissions. During the holding period, Apax Partners: • Defines a specific roadmap with management; • Encourages the appointment of a company project leader; • Supports implementation of the action plan; • Regularly follows ESG implementation and results via appropriate governance. Before an acquisition, Apax Partners: • Systematically conducts ESG due diligence; • Integrates ESG principles into offers and shareholder agreements. Apax Partners2014 Annual Report20
- 22. Responsible investing Actions takenby our portfolio companies in 2014 • In accordance with its strategy of providing biomass renewable resources that offer alternatives to fossil fuels, Albioma is testing the use of sugarcane straw, green waste and sorghum cultivated on unfarmed lands, at an industrial scale. • Embarked on the Solar Impulse adventure, aiming to complete a round-the-world flight relying only on solar energy, Altran defined the best routes to fly, the autopilot program, the safety and reliability analysis to obtain permits to fly. • Amplitude constituted its ethics committee and created its ethics charter. • Europe Snacks has stepped up efforts to improve the nutritional profile of its products by using sunflower oil instead of palm oil and by reaching a new sodium target. • Gfi Informatique established its “Sustainable Purchasing Charter” integrating the social and environmental criteria to its Purchasing Policy and expressing these expectations towards its suppliers. By signing this Charter, the supplier commits to respect in full its provisions. • Groupe INSEEC published its first CSR report setting out an overview of both existing practices and commitments for the following months. • SK FireSafety Group considers itself to be a social responsible company, and since the beginning, has developed a range of products that now lead the market regarding eco-friendliness. • After defining its core values, TEXA formalised its charter of ethics and conduct with concrete examples. • THOM Europe included requirements in terms of respect for environment, child labor, employees’ rights, workplace health and safety in its supplier charters. CHRISTOPHE BÉESAU Head of “Advanced Modelling and Simulation”, Altran engineer and member of Solar Impulse MCC “A mathematical theory of complexity was developed and we now apply it to the Solar Impulse route determination and flight plans. The Mission Control Center (MCC) in Monaco is at the core of Solar Impulse. The solar plane will be guided from this control tower for the 2015 round-the-world trip by the Altran engineers who are at the heart of the flight preparation, control and monitoring.” BÉNÉDICTE BOUCHÉ Director of Human Resources, TEXA “Security is important and it is a shared concern. To avoid accident such as experts falling from height while inspecting roofs, we tested a camera mounted on a telescopic pole linked to a smartphone. Therefore, the roof can be visualised from the ground, without risk. The test has proven successful and we are currently equipping our experts. Thus, innovation is at the service of security.” JEAN-PIERRE CHANTREL General Manager and CFO, THOM Europe “As a leading jewellery and watch retailer, THOM Europe is focused to reinforce responsible purchasing policy.” EWALD DRAAIJER CEO, SK FireSafety Group “People are key in achieving our goals. Next to the continuous attention for the safety of our own employees, it explains our efforts to educate and train people in (fire) safety. Or why we co-founded an extinguishing equipment maintenance company consisting of people with a disadvantage to the job market, or why we create awareness by annually sponsoring the Child & Burn Foundation.” Apax Partners2014 Annual Report 21
- 23. Responsible investing CATHERINE LESPINE CEO,Groupe INSEEC “We are convinced that our willingness and our exemplarity will ensure that the future leaders we train, integrate economic, social and environmental impacts in their decisions. In other words, that they demonstrate their belonging to a CSR vision.” SAKINA SEDJARI CSR Advisor within the Quality Department, Gfi Informatique “The Sustainable Purchasing Charter allows Gfi Informatique to express its engagement and social development values through its purchasing policy involving its suppliers in a common-progress approach aimed at ensuring clients’ long-term satisfaction.” JACQUES PÉTRY CEO, Albioma “Our corporate responsibility cannot be carried out without a high level of transparency and a regular dialogue with all our stakeholders. In order to answer their questions as best as possible, we launched an action plan aiming to better identify, know, and understand their expectations, in 2014. Our strong industrial culture is complementary to our wish to be a citizen company perfectly integrated into its ecosystem.” OLIVIER JALLABERT CEO, Amplitude “With our business, we are constantly striving for excellence. The charter and the ethics committee bear witness to the importance attached to this topic, and enable Amplitude to improve further.” ALINE MAYSSE Quality, Safety and Environment Manager, Europe Snacks “Europe Snacks wishes to be a reference company in its French and European markets through its firm commitments to quality, safety, environmental and ethical issues. We attach great importance to meeting consumer expectations, notably on health topics. It is a key priority for us.” Apax Partners2014 Annual Report22
- 24. Responsible investing “Apax Partnersis one of a handful of private equity firms to publish a corporate social responsibility report covering the companies in its portfolio.“ (1) ALAIN AFFLELOU, Albioma, Altran, Amplitude, Capio, Europe Snacks, GÞ Informatique, Groupe INSEEC, Groupe Royer, Infopro Digital, SK FireSafety, TEXA, THOM Europe (Histoire d’Or, Marc Orian and TrésOr), Unilabs, and Vocalcom. Corporate social responsibility report Our reporting on human capital includes workforce evolution, distribution of created jobs, and an analysis of social policies. All of our portfolio companies’ General Managers and Human Resources Directors participated in the report, ensuring the data provides a complete overview of Apax Partners’ 2014 year-end portfolio of 15 portfolio companies (1) . In this report, the 2014 human capital results are compared with the 2013 data, so as to preserve a constant base. In 2014, the total average workforce at our portfolio companies was 63,600 people. That represented an 8% increase year-on-year, with internal growth and external growth contributing nearly evenly to the increase. Our portfolio companies added a total 5,300 jobs, of which 2,800 were newly created positions and 2,500 were due to external growth. Overall, our portfolio companies increased net employment by 5,080 jobs. The total value of wages and salaries increased to €3.4bn, up 6% year-on-year. The bulk of that growth was due to individual wage increases, while growth in the headcount also contributed across 11 companies. Employment in France increased 6% over the course of 2014, to represent a total 54% of our portfolio companies’ workforce. By the end of 2014, 13 portfolio companies had established wage agreements and profit-sharing schemes (Intéressement & Participation). Those companies distributed a total of €18m to employees, up 21% on 2013, a clear sign of their robust health. Over the course of the year, 12,040 employees received training, up 9% over 2013. A total of 273,800 hours of training were provided, representing a total €22m of investment in improving the talents of the workforces. Further efforts were made to improve social policies within the portfolio companies during the year. In 2014, 101 collective agreements were signed, up 14% over 2013. Most of those were wage agreements, profit-sharing and savings schemes. 5,080net employment increase +6% employment in France +21% distributed through wage agreements and profit-sharing Social report 63,600 employees +6%average wages and salaries +8%employment Portfolio companies report 15 portfolio companies +4.3%average revenues +9.2%average EBITDA Apax Partners2014 Annual Report 23
- 25. Our investors THE APAXFUNDS HAVE BEEN RAISED FROM A WIDE RANGE OF INTERNATIONAL INVESTORS (LIMITED PARTNERS), INCLUDING PENSION FUNDS, FUNDS OF FUNDS, SOVEREIGN FUNDS, INSURANCE COMPANIES, BANKING COMPANIES AND PRIVATE INVESTORS. Diversified investor base Apax Partners has raised and managed a total of more than €2.4bn through eight successive private equity funds (Fonds Professionnels de Capital Investissement - FPCI), both individually and together with Altamir, a publicly traded company. 3 INVESTORS IN APAX FRANCE VIII 40% 27% 20% 6% 4% 2% 1% Investment companies Pension funds Funds of funds Sovereign funds Insurance companies Apax Partners High net-worth individuals By type 51% 23% 20% 6% France (including Altamir) North America Other Europe Rest of the world By geography 3 FUNDS RAISED BY APAX PARTNERS IN FRANCE (€m - Includes funds raised with Altamir from Apax France IV to Apax France VII) 400 600 800 1,000 200 0 1983 1986 1990 1996 1998 2000 2006 2011 Apax CR 15 Apax CR II 49 Apax CR III 96 Apax France IV 82 Apax France V 300 Apax France VI 700 Apax France VII 900 Apax France VIII 704 Altamir no longer co-invests with the funds managed by Apax Partners. It is now an investor in the Apax France VIII fund (further information on Altamir is available at www.altamir.fr). Apax Partners2014 Annual Report24
- 26. Our investors “Apax Partnersmanages a total of more than €2.4bn.” Investor relations Apax Partners maintains regular contact with investors, providing them with very detailed reports and meeting with them several times a year. Investors in each of the Apax Funds are invited to an Annual General Meeting. Each of the Apax Funds has a Board of Advisors, comprised of its main LPs, who meet at least twice yearly. The Boards of Advisors discuss fund transactions, the biannual valuation of investments (which are stated in the fund accounts) and any potential conflicts of interests. The firm has one professional dedicated to investor relations. Together with the Partners, the Investor Relations Officer meets regularly with existing and potential investors from across the world, with a view to updating them on Apax Partners’ activity and portfolio, and preparing the next fundraising process. Fully-aligned and transparent compensation policy Like most private equity firms, Apax Partners’ revenues include an annual management fee that covers the company’s operating costs (staff salaries, rent, etc.). This fee has declined over time, as a percentage of funds under management, as larger funds have been raised. At an individual level, the Apax Partners team invests significantly into the company’s funds, on the same terms and conditions as other investors. This serves to align their interests with those investors and incentivise long-term value creation in portfolio businesses. 3 COMPENSATION POLICY Management fee 3Fees received from portfolio companies (including transaction and monitoring fees) are deducted from the annual management fee. 3The management fees are used to invest in one of the largest private equity teams in the French market, enabling Apax Partners to fully implement its sector-focused strategy. Carried interest 3Carried interest is linked to overall fund performance after fees, and not on a deal-by-deal basis. 3Carried distribution is paid only after investors have been fully repaid their principal and their hurdle return. 3Carried interest is distributed widely to the team: each staff member with at least three years of tenure is entitled to carried interest. 3Apax Partners has one of the most stringent vesting policies in the industry. Co-investments 3Partners typically make significant investments in each of the Apax Funds, on the same terms and conditions as other investors. 3Partners are prohibited from co- investing directly in any single investment made by an Apax Fund. Finally, all Apax Partners staff receive a performance-based incentive in the form of a 20% carried interest payment. This is paid when, and only if, a fund has generated a return to investors in excess of 8% per annum over its life (known as a hurdle rate). A fund typically has a 10-year life and carried interest is generally paid in later years when most of its investments have been sold and investors have recovered their capital. In order to fully align its interests with those of its investors, Apax Partners also has a number of longstanding, investor-friendly policies. Apax Partners2014 Annual Report 25
- 27. Apax Partners2014 AnnualReport26
- 28. A YEAR OFVALUE CREATION Backed by Apax Partners, companies in the portfolio continued to expand and create jobs. The growth strategy focused on three specific areas: internationalisation, build-ups, and digital transformation. 2014 2014 highlights 28 Portfolio activity 29 Portfolio performance 34 Fund performance 36 Apax Partners2014 Annual Report 27
- 29. 2014 HIGHLIGHTS Follow us everyday! Blog www.apax-talks.fr T Twitter @ApaxFrance l LinkedIn Apax Partners MidMarket Scoop It Apax Partners January #Arrival of Julien Birman and Vincent Colomb as senior associates. #BrahimAmmorandHenryCapellearepromoted to the position of Principal. February #MathildeBonnansisappointedESGManager. April #Buy Way Personal Finance, one of the leading consumer credit institutions in Belgium and Luxembourg, is sold. May #Monique Cohen is appointed independent director of BNP Paribas’ Board of Directors for three years. #Apax Partners MidMarket is launched on LinkedIn. June #Acquisition of SK FireSafety Group, the fire safety specialist in Northern Europe. #EddieMisrahiwasonthecoverofPrivateEquity Magazine: “I found the best job in the world. Consultants think, operatives materialise, but the investor enjoys the best of both worlds.” July #Apax Partners created a Scoop It press watch on fundamental issues for SMEs: international growth, digital transformations, and build-up strategy. September #Three of our past and present portfolio companies (Sephora, Maisons du Monde and Histoire d’Or) were ranked in Challenges’ top 30 favourite retail brands in France. #Annick Bitoun, debt manager, and Qiongyan Shao, senior associate, joined Apax Partners. October #In the AFIC 2013 ESG report, Apax Partners was one of the 18 investment funds to voluntarilypresenttheresultsofitsESGpolicy. Apax Partners also provided examples of initiatives by its portfolio companies Maisons du Monde, Groupe INSEEC and TEXA. #Eddie Misrahi spoke at the École Polytechnique alumni club on the subject: “Is it really impossible to create a giant digital player in France?”. December #Portfolio companies controlled by investment funds added a net 36,000 jobs in 2013, of which 5,150 were attributable to Apax Partners’ portfolio companies. #Apax Partners was awarded “Best French Mid & Upper Mid LBO Fund” at the Private Equity Exchange & Awards. #@ApaxFrance arrived on Twitter. #Franck Hagège was promoted to Partner in the Retail & Consumer sector team. Apax Partners2014 Annual Report28
- 30. Divestments and investments ApaxPartners generated €158m in proceeds in 2014, compared to €327m in 2013, and made €80m of investments and commitments in 2014, compared to €214m in 2013. In addition to the new acquisitions, €10m of follow-on investments were made to fund build-up acquisitions and support portfolio companies. Divestments: Buy Way Personal Finance, one of the leading consumer credit institutions in Belgium and Luxembourg Apax Partners sold its stake in April 2014 to Chenavari Investments Managers. Buy Way, which was previously a subsidiary of BNP Paribas, manages a loan portfolio of approximately €400m and employs around 250 people. During the four-year partnership, Apax Partners significantly reorganised the firm and supported its successful growth. DBV Technologies, a clinical-stage specialty biopharmaceutical company In September 2014, Apax Partners sold its stake in the last venture company of its portfolio. Investment: SK FireSafety Group, the fire safety specialist in Northern Europe This new investment is a typical Apax Partners deal involving a company with strong growth prospects, a high-quality entrepreneurial team, and market leadership positions. The Apax France VIII fund, together with SK FireSafety’s management, acquired 100% of SK FireSafety in July 2014. For the full presentation of the company and the interview with Ewald Draaijer, CEO of SK Fire Safety, see page 55. 3 PROCEEDS ACROSS ALL FUNDS 2005 – 2014 (in €m) Portfolio ACTIVITY 2014 WAS A GOOD YEAR FOR APAX PARTNERS. COMPANIES IN THE PORTFOLIO TURNED IN STRONG RESULTS. THE FIRM MADE ONE NEW ACQUISITION AND TWO DIVESTMENTS. New investments Follow-on investments Number of investments 246 2005 3 336 2006 7 261 2007 7 241 2008 5 37 2009 2 210 2010 0 280 2011 2 121 2012 3 214 2013 2 Total investments80 2014 1 Apax Partners2014 Annual Report 29
- 31. Portfolio activity Value creation ApaxPartners focuses the growth strategy of its portfolio companies on three specific areas: internationalisation, build-ups and digital transformation. Generating growth sometime requires financial optimisation. Of course, implementing a strategy is possible thanks to the trust-based relationship between company management and the Apax Partners teams. Build-ups With more than 70 operations between 2012 and 2014, build-ups are an essential strategy to accelerate the growth of our portfolio companies. In addition to the many acquisitions listed in the international section, some examples of 2014 build-ups within our portfolio companies included: • ALAIN AFFLELOU continued to screen acquisitions in Southern Europe; • Gfi Informatique made four acquisitions in France during the year generating an additional €60m in revenues; • THOM Europe acquired a network of 31 stores in France; • TEXA successfully developed a newly acquired company that specialises in “building damages” expertise, and completed another acquisition in 2014. Internationalisation Entrepreneurs know that often the most promising growth opportunities can be found overseas. We have strong experience in implementing an international strategy in our portfolio companies and continued to leverage that experience in 2014 to accelerate growth at our portfolio companies: • Albioma entered the Brazilian biomass electricity market with the acquisition of a 60MW cogeneration plant; • Altran completed two significant acquisitions in China and Germany/ Austria to strengthen its presence in these countries; • Amplitude focused its international development on six promising countries. It acquired a distributor in Brazil, developed its newly acquired distributor in Australia, initiated FDA registration of its products in the US, created a joint venture in Japan and launched operations in Switzerland and in Belgium; • Europe Snacks signed a major contract with the largest Spanish food retailer and continues to screen potential build-ups in Europe; • Groupe INSEEC opened a training school in China and acquired a school in Switzerland; • Vocalcom opened a US subsidiary to develop its presence in the world’s largest contact center market. • Groupe INSEEC, which made digital marketing one of its key areas of strategic focus and started developing its on-line education services; • TEXA used digital technology to improve both quality of its service to insurers and productivity of its organization; • Retail companies THOM Europe and ALAIN AFFLELOU continued to grow their e-commerce businesses; • Gfi Informatique developed new services, including cloud solutions for mobility and payments, and big-data business intelligence solutions for its blue chip customer base; • Infopro Digital’s digital business now accounts for 61% of its direct margin (excluding trade-shows and events) due to the launch of regular internet and digital initiatives. Digital Transformation Businesses that want to succeed must change their models to meet the expectations of the millennials and embrace the major transformation that implies. In France, this generation will constitute half of the labour force by 2020 and its entrepreneurs will be the people Apax Partners will support in the future. The hyper connectivity of this generation has an impact on their consumption and how they act as employees. It is our mission to help prepare dynamic French SMEs to take advantage of this change by supporting their digital transformation. Some examples of digital transformations within our portfolio companies in 2014 included: Apax Partners2014 Annual Report30
- 32. Portfolio activity Relationships basedon trust We are strongly committed to the entrepreneurs that we back. When these entrepreneurs choose to partner with us they choose a committed, supportive and stimulating investor that will share their vision, their strategy and their long term development. They said it in 2015 “Our relationship is based on trust and is extremely professional. They have helped me through the different stages of our strong growth, ensuring that the company felt supported and secure. Affording Apax Partners the option to challenge our strategic ideas always yielded extremely rich results. Because of all that, I am thankful to Apax Partners and the teams with which I have worked.” Olivier Jallabert, CEO of Amplitude “Interaction with the Apax Partners’ team is practical, rapid and fruitful. Our investment-projects, whether financial, technological or in human resources have received Apax Partners’ full support. We really feel supported to remain “one step ahead” and so build the long-term future of Groupe TEXA.” Bruno Vesval Chairman, and Pierre-Antoine Lagé, Managing Director of TEXA “I have found at Apax Partners’ people who are in complete agreement with our media digitalisation strategy. Their knowledge of this digital transformation allows us to invest aggressively. This is a strong differentiating factor for a fund.” Christophe Czajka, founder and Chairman of Infopro Digital “We have been working together for a year. I wanted to thank you and tell you how much I enjoy sharing this experience and INSEEC’s projects with the Apax Partners’ team. I had a good feeling from the start and it hasn’t diminished.” Catherine Lespine, CEO of Groupe INSEEC “The most successful people in the world didn’t make it on their own. Apax Partners’ team is the best partner I have found. I strongly recommend them to anyone.” Anthony Dinis, founder and CEO of Vocalcom “According to a famous saying: performance matters for only as long as it lasts. What can I say then about our almost-intimate relationship with Apax Partners, which has lasted 15 years! Always with us, especially in the testing periods, I have always appreciated the regular contact and the advice of Apax Partners’ teams.” Frédéric Poux, President of the Executive Board of ALAIN AFFLELOU “The management team of our medium size company is naturally under permanent pressure from short-term pressing challenges. Thanks to Apax Partners and their stimulating inputs, we can think out of the box and go faster and further”. Jacques Pétry, CEO of Albioma “This first year alongside Apax Partners has validated my decision to trust them to accompany the transformation of Europe Snacks from a national champion into a European leader. The breadth of their vision, their exacting standards and speed of execution, all coupled with their unwavering confidence, have contributed to a partnership that is aligned to the interests of everyone.” Christophe Fenart, CEO of Europe Snacks “Apax Partners has always been by our side in each key moment in the development of the company. The team includes both reliable and knowledgeable business partners that trust and support the management, but who also knows when to challenge us! It is always profitable to discuss the strategic moves of the company with the team.” Eric Belmonte, Chairman of THOM Europe Apax Partners2014 Annual Report 31
- 33. Financial optimisation The firstand fundamental objective of any financial optimisation is to enable our portfolio companies to pursue an internal or external growth opportunity. That could include obtaining complementary equity to finance a strategic development, conducting a structural build-up that requires rethinking the company’s entire financing, or providing flexibility when existing conditions are impeding the firm’s development. Amplitude – Refinance to support an annual growth of 25% Amplitude set up a unitranche debt of €65m to support the accelerated growth profile of the company. This operation will finance overseas subsidiaries, notably in Brazil, Australia, and the US. It will also allow the company to win new customers, providing them with implants and instruments, in key markets like France. Finally, the transaction will allow Amplitude to continue its efforts in innovation, in particular the development of new navigation systems for surgeons and 3-D printed patient specific instrumentations. Our new debt expert ANNICK BITOUN What is your vision of a debt manager’s role? The best debt agreements are partnerships, where the ambition of a company, its equity backer and its lender are in harmony. My goal is to create those partnerships by sourcing solutions suited to each transaction’s particularities of size, complexity and the needs of the enterprise. I aim to create relationship with lenders that are equitable and based on mutual trust. It is always my aim that they should endure over numerous transactions. What are the dominant characteristics of the current debt market? T h i s i s a p a r t i c u l a r l y advantageous moment in which to raise debt. Rates are historically low and there are relatively few transactions. The result is that lenders are actively seeking new opportunities and ready to support refinancing for companies that have good growth opportunities. There is also a growing diversity of actors in the debt market, meaning there is greater opportunity to find a partner whose profile suits each transaction. After more than a decade working for lenders, what led to you to join Apax Partners? In my role as a banker I was often involved in negotiations with Apax Partners and was always impressed by their business philosophy, vision and professionalism. When the opportunity arrived to switch sides of the table I had no hesitation! APAX PARTNERS, IN SEPTEMBER, EXPANDED ITS TEAM AND EXPERTISE WITH THE APPOINTMENT OF ANNICK BITOUN, THE COMPANY’S FIRST SPECIALIST DEBT MANAGER. # FOCUS “This is a particularly advantageous moment in which to raise debt. Rates are historically low and there are relatively few transactions.” Annick Bitoun “Amplitude’s international expansion includes Brazil, Australia and the United States.” Portfolio activity Apax Partners2014 Annual Report32
- 34. ALAIN AFFLELOU –Flexibility to finance growth In May 2014, the group refinanced its senior and mezzanine facilities with €440m of high-yield notes. This refinancing allowed the group to lower the overall weighted cost of debt to 6.1% from 7.9%, delivering almost €8m of annual cost savings. The new financing structure also provides greater flexibility to fuel organic and potentially external growth by removing certain restrictions inherent in the previous facilities. THOM Europe – Unlock store network expansion The group raised €347m in high-yield financing in 2014. In addition to refinancing the acquisition debt and repaying part of the shareholders’ bonds, this refinancing will enable THOM Europe to pursue its store-network expansion, which had been constrained by the onerous nature of the acquisition debt documentation requirements. The group now has full access to the cash generated by the operations to fund new stores openings. In the short-term, this refinancing enabled THOM Europe to acquire 31 stores from a regional chain. General Manager and CFO of THOM Europe JEAN-PIERRE CHANTREL Why did you choose to refinance your debt in 2014? It was the right time for the business and a good time in the debt market. THOM Europe was created from the combination of Histoire d’Or and Marc Orian in 2010. Our first task was to integrate the businesses, train the teams and position the brands. With that work completed, we were ready to move to a development phase for which our debt arrangement wasn’t suitable. The documentation requirements were too onerous and would have taken up time and energy better focused on expanding the business. And rates had come down since 2010. How did you find the process of refinancing? It was smooth, though a lot of work. We launched the process at the end of April, quickly found a bank in Goldman Sachs that was willing to take the lead, and by July 18 the new loans were in place. It was a real team effort between the banks, our lawyers, our shareholders and our in-house team. And we very much appreciated the support we received from Apax Partners team to prepare the new documentation and the roadshow. What are your plans now that you have the new debt in place? The key benefit of the refinancing is the flexibility it gives us to pursue our growth plans. Very soon after we secured the loan we added 31 new outlets with the acquisition of a small rival in the South of France. We will continue to look for acquisitions and pursue our objective to develop a greater presence in city-centers. THOM EUROPE, FRANCE’S LEADING JEWELRY RETAILER, REFINANCED ITS DEBT IN JULY WITH €347M OF HIGH-YIELD NOTES, SECURING A MORE FLEXIBLE FINANCIAL PLATFORM FOR ITS AMBITIOUS EXPANSION PLANS. # FOCUS “Our refinancing deal was a real team effort between the banks, our lawyers, our shareholders and our in-house team. And we very much appreciated the support we received from Apax Partners team to prepare the new documentation and the roadshow.” Jean-Pierre Chantrel “New financing helped THOM Europe acquire 31 stores.“ “Refinancing will save ALAIN AFFLELOU €8m a year.“ Portfolio activity Apax Partners2014 Annual Report 33
- 35. Operating performance The 15companies within the unrealised LBO and growth capital portfolio posted a 9.2% increase in their aggregate EBITDA. This performance can be benchmarked against the aggregate EBITDA of the 35 non-financial companies included in the CAC 40, which posted a 1.2% decrease in their aggregate EBITDA. Reasonable and stable leverage ratios The average debt multiple of the portfolio (represented by the ratio of total net debt to EBITDA) was stable at 3.74x at the end of 2014, against 3.75x at the end of 2013 and 3.7x at the end of 2012. The LBO debt multiple averaged 2.82x, while the average operating debt multiple was 0.91x. Regarding the repayment schedule, amortising debt (tranche A) represented 6.4% of the total LBO debt, while the remaining 93.6% is bullet debt. The portion of LBO debt with maturity dates prior to 2017 represented only 3.17% of the total. Portfolio PERFORMANCE “The portfolio’s average debt multiple at the end of the year remained stable at 3.74x, roughly the same level as in 2012 and 2013.“ 3 CHANGE IN AGGREGATE EBITDA CAC 40 companies (excluding financial institutions) Apax Partners’ LBO & growth capital portfolio +15% +18% 2010 +6% +17% 2011 -1% +8% 2012 -4.6% +11.3% 2013 -1.2% +9.2% 2014 +14% +82% 5 years combined 3 LEVERAGE RATIO (Net debt / Last 12 months EBITDA) 3.8x December 2011 3.7x December 2012 3.8x December 2013 3.7x December 2014 Apax Partners2014 Annual Report34
- 36. Gross portfolio return Grossportfolio return (GPR) measures the change over the year in portfolio valuation, including both realised and unrealised value. It is calculated on a mark-to-market basis and is expressed as a percentage of the opening portfolio value. In 2014, the 9.2% EBITDA growth of our 15 LBO/Growth companies allowed Apax Partners to generate a GPR of 17% across all its funds, compared with a GPR of 23% in 2013. “Apax Partners unrealised portfolio has continued to demonstrate sales and earnings growth over 2014.“ Eddie Misrahi 17% gross portfolio return Portfolio performance 3 GROSS PORTFOLIO RETURN (in %) 42 2005 50 2006 73 2007 -40 2008 20 2009 5 2010 8 2011 25 2012 23 2013 17 2014 Apax Partners2014 Annual Report 35
- 37. 3 STRONG OUTPERFORMANCEOF APAX FUNDS COMPARED TO STOCK MARKETS: 2000 to 2014(1) Our growth and sector-focused strategy is coherent with our investment objective of maximising return multiples, while maintaining internal rates of return within the top-quartile of our peer group. The strategy has proven successful across the fully-invested funds managed by Apax Partners. Over the past three years the firm has completed a significant number of divestments, accruing more than €1.1bn in proceeds. In this section, fund performance is first presented globally for all funds invested since August 2000 and then individually for each fund managed by the firm since 1990. Global Performance Fund performance figures are based on results at 31 December 2014 and are benchmarked against key stock indices over the period from 2000 to 2014. The chart below presents the performance of all funds since August 2000, the date at which Apax France VI started investing. The performance is measured as the IRR (internal rate of return) of all investing and divesting cash-flows, using the portfolio value at the end of December 2014 as the terminal value. The IRR of 19% is compared to the performance of various indices applying the same stream of cash-flows over time. This allows the performance of Apax Funds to be compared to investments in each stock market index, based on the premise that the same amounts had been invested and divested. 19% Apax France VI, VII and VIII Gross IRR(2) 0.6% CAC 40 1.3% S&P 500 2.5% MSCI World 2.8% MSCI Europe 4% FTSE 100 (1) Source: Euronext, MSCI, Yahoo! Finance. (2) Gross IRRs do not reßect management fees, carried interest, taxes or transaction costs and other expenses borne by investors that reduce net returns Note: return Þgures for public indices generated using gross cash ßows for Apax France VI, VII and VIII. The analysis assumes that cumulative drawdowns are invested in and distributions are withdrawn from the index. “Divestments have garnered €1.1 billion in the last three years.“ Fund PERFORMANCE Apax Partners2014 Annual Report36
- 38. Fund performance Performance perfund Apax CR III Apax CR III’s performance was achieved through investments in renowned companies such as Aigle, Frans Bonhomme, Nicox, and Sephora. Other successful investments included Celio, Coletica, Effik GSI, Urologix, and Xpedite. Apax France IV Apax France IV’s performance was achieved through investments in high-growth companies such as GiFi, Histoire d’Or and Prosodie. Other investments included Dagard, Erard, Lehmann, and The Future Network. Apax France V Apax France V’s performance was the result of major investments in companies including ALAIN AFFLELOU, Hubert, Séché Environnement. Other investments included BFM, Travelprice.com/Lastminute.com, Symphony on Line, CCMX/Cegid and Rue du Commerce. Apax France VI Apax France VI’s performance, to date, is the result of investments in market-leading companies, such as Antalis-TV, Aprovia, Arkadin, Cartesis, Medimedia, Outremer Telecom, Parkeon and Vizada (TMT); Frans Bonhomme (Retail & Consumer); Alma Consulting Group, Corevalve and Vedici (Services). At the end of 2014, the fund is still invested in Albioma (Services). Apax France VII Apax France VII (€900m) started investing in November 2006. By the end of 2014, six investments had been sold (Buy Way Personal Finance, Equalliance, Faceo, Maisons du Monde, Prosodie, U10) and 54% of the fund had been returned to investors. The fund is still invested in eight companies, including Altran, Gfi Informatique and Infopro Digital (TMT); ALAIN AFFLELOU, Groupe Royer and THOM Europe (Retail & Consumer); Capio and Unilabs (Services). Apax France VIII Apax France VIII (€704m) closed in 2011. By the end of 2014, more than 60% of the fund was invested in seven companies covering all our sectors of specialisation: Amplitude, Europe Snacks, Groupe INSEEC, SK FireSafety Group TEXA, and Vocalcom. One investment has been sold: Codilink. 3 PERFORMANCE PER FUND Launched Investment period Fund size Net Multiple Net Distribution Net IRR CR III* 1990 7 years €96m 2.6x 2.6x 15.7% Benchmark 1st quartile 2.3x 1.9x 15.9% Apax France IV* 1996 3 years €82m 2.0x 2.0x 21.6% Benchmark 1st quartile 1.8x 1.7x 17% Apax France V* 1998 2 years €300m 1.2x 1.2x 2.7% Benchmark 1st quartile 1.4x 1.2x 8.4% Benchmark median 1.0x 0.6x -25% Apax France VI 2000 6 years €700m 1.7x 1.5x 11.7% Benchmark 1st quartile 1.8x 1.6x 18.2% * Funds fully realised Source: Apax Partners / ThomsonONE.com database / Cambridge Associates. • Gross multiple refers to the total proceeds received by a private equity fund, before management fees and carried interest, and the residual value of the investments, as a percentage of the committed capital. • Gross IRR (internal rate of return) is the return on all investments made by a fund in its portfolio companies. It is calculated as an annualised effective compounded rate of return using monthly cash flows to and from a fund before management fees and carried interest, and includes the residual value of the fund’s assets as terminal cash flow to investors. • Net multiple is equivalent to the gross multiple net of management fees and carried interest. • Net IRR is the return earned by investors, net of management fees and carried interest. It is calculated as an annualised effective compounded rate of return using monthly cash flows to and from investors, and includes the residual value of the fund’s assets as terminal cash flow to investors. • Top quartile refers to the point at which 25% of all returns in a group of private equity funds are greater and 75% are lower (top-quartile performers are private equity funds whose return is above top quartile). • Median refers to the point at which 50% of all returns in a group of private equity funds are greater and 50% are lower. DEFINITIONS OF PERFORMANCE INDICATORS Apax Partners2014 Annual Report 37
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- 40. PORTFOLIO COMPANIES AT 31DECEMBER 2014 By selecting Apax Partners, entrepreneurs are choosing a committed, supportive and stimulating investor who will: share their vision and strategy; provide long-term support. Snapshot TMT (Technology-Media-Telecom) 40 Retail & Consumer 44 Healthcare 48 Services 51 Apax Partners2014 Annual Report 39
- 41. Gilles Rigal andThomas de Villeneuve Philippe Salle (Chairman and Chief Executive of the Altran group) Altran’s strategic objective remains to focus on developing its high value added business services and further develop operations in growth geographies, both organically and through selective acquisitions. On 19 January 2015, the Board of Directors of Altran announced that Philippe Salle, Altran’s CEO since June 2011, had decided to take on new professional challenges and that he would not seek a renewal of his appointment as a Director during the Annual General Meeting to be held on 30 April 2015. He will remain in his position until this date. Altrafin Participations, a company controlled by Apax Funds, is a major shareholder of Altran, with 17% of its capital and slightly below 30% of its voting rights. Created in 1982, Altran is the Global leader in innovation consulting. The company employs more than 18,000 engineers, operates in 20 regions, is listed on Euronext Paris and is part of the SBF 80 index. 2014 has been a very positive year for Altran. The company posted revenues of €1,756m, up 7.6% over 2013 on a reported basis and up 3.5% on an economic basis. Altran posted EBIT of €165m in 2014, an increase of 15.1% over 2013, driven by both organic growth and recently completed acquisitions. Altran acquired Foliage, a US-based innovative- product development company. This major and strategic acquisition will allow the group to further address the US market, which is the most significant market in outsourced Research & Development. It will also reinforce Altran’s offer in embedded software, a core business of Foliage and a tactical development area for Altran. Finally, with about 200 engineers in India, Foliage’s acquisition will significantly increase Altran’s delivery capacity in India. altran.com Strategic acquisitions made the headlines in the Technology, Media & Telecom portfolio. MAJOR EVENT OF THE YEAR TMT (TECHNOLOGY-MEDIA-TELECOM) €1,756mrevenues 15.1%EBIT growth over 2013 Apax Partners2014 Annual Report40
- 42. Itefin Participations andInfofin Participations two companies controlled by Apax Funds and Boussard & Gavaudan jointly hold 78.4% of the capital of Gfi Informatique a company listed on the Paris Stock Exchange. Gfi Informatique is the fourth largest French IT services firm with a leading position in France and Southern Europe. It employs over 10,000 people. The company has two core businesses: IT services and software products. It is organised by sector-focus and its six main industry sectors are banking, telecom, public sector, energy/ utilities, industry/aerospace/transport, and distribution services. Founded under the guidance of CEO, Vincent Rouaix, the plan to transform Gfi Informatique from a “body shopping” company to a value-added technology group is now achieved. 2014 was a strong year for Gfi Informatique, notable for its solid momentum in the French IT Services market, where sales grew to €804m, up 8.3% over 2013. The company continued to increase its software based revenue, launched a new account management strategy for its TOP35 clients, developed new differentiating offers (cloud solutions, digital offers and big data), and continued its strong M&A activity. Gfi Informatique is well positioned to build on its record of growth and margin improvement. gfi.fr €804msales (+8.3% over 2013) €52mEBIT (+16% over 2013) TMT Gfi Informatique acquired ITN, a leading management-software editor that has around 110 employees and €15m of annual revenues. ITN designs, develops and markets insurance solutions for the life and non-life businesses of insurers and bancassurers, mutual companies and brokers in France and Europe. The bolt-on purchase is part of the “IP 20” plan announced at the beginning of 2014, which aims to increase the group’s “Solutions” sales to 20% of its total turnover in three years, up from 12%, and position Gfi Informatique higher up the value chain. As a result of the acquisition, Gfi Informatique expects to boost sales at its software business by close to 20%. Because external growth had recently focused on services (Ares, Thalès BUS, Cognitis notably), the purchase of ITN is the first significant software acquisition for Gfi Informatique in France since Apax Partners’ investment. MAJOR EVENT OF THE YEAR Vincent Rouaix (CEO of Gfi Informatique) Apax Partners2014 Annual Report 41
- 43. Apax Funds holdthe majority of Infopro Digital, a leading provider of professional information. Infopro Digital is one of the few B2B information players to have successfully transitioned from print to digital. Digital business now represents 61% of its direct margin (excluding trade-shows and events). The company is also an efficient acquisition platform, having completed more than 30 acquisitions since 2001. infopro-digital.com 61%of direct margin is digital (excluding trade-shows and events) 21%annual growth since acquisition 2014 was Infopro Digital’s first full year following the acquisition of Groupe Moniteur in December 2013. The corporate governance of the group was modified, Christophe Czajka, CEO, appointed Julien Elmaleh as Managing Director.The objective is to focus on accelerated investments overseas while generating organic growth in the Group. MAJOR EVENT OF THE YEAR Christophe Czajka (CEO and founder of Infopro Digital) TMT Apax Partners2014 Annual Report42
- 44. Apax Funds holda majority stake in Vocalcom, a software and technology provider for customer contact centers and call centers. Vocalcom’s global software offering allows companies to manage their customer contact center, improve their contact center’s customer service quality, and optimise the productivity of customer service teams. Vocalcom also enables and brings major innovations to enhance customer service management on e-commerce websites or at points-of- sale. Vocalcom employs 210 people and generates 53% of its sales outside France, particularly in fast-growing emerging markets such as Brazil and North Africa. 2014 has been a transforming year in which Vocalcom continued its positive evolution both in terms of management renewal and business model migration towards SaaS/Cloud. The company posted revenues of €36.3m down 4% on 2013. The product mix continued to evolve favourably with software and related services flat compared to last year and resale of hardware down by 17%. That is in line with the strategy to progressively phase- out this low margin offering. Thanks to its innovative software solutions, the company is ideally positioned to capture strong industry fundamentals and realise its growth potential in 2015. vocalcom.com 550,000daily users 3,500call centres Vocalcom signed its first private cloud governmental project with Abu Dhabi Distribution Company (ADDC), which is responsible for distributing high-quality water and electricity services in the emirate of Abu Dhabi. The 5-years contract provides 24/7 managed services for 500 agents. Vocalcom’s software provides best-in-class agent workspace by integrating all core business, GIS, knowledge management and business process guidance. The project will transform ADDC’s emergency centre into a multi-channel customer experience, thus perfectly integrating ADDC’s smart city strategy. It will also improve customer experience and quality assurance through live speech analytics combined with big data and historical speech analytics. MAJOR EVENT OF THE YEAR Anthony Dinis (CEO and founder of Vocalcom) TMT Apax Partners2014 Annual Report 43
- 45. E-commerce reinforcements and strong partnershipsand licensing made the headlines in the Retail & Consumer portfolio. RETAIL & CONSUMER Bruno Candelier and Franck Hagège 12%revenue growth 21,000tons produced in 2014 In 2013, Apax Funds acquired a majority stake in Europe Snacks, the leading French private-label player in the savory snacks market. Europe Snacks develops, produces and markets about 200 product references of savory snacks in three product ranges: extruded products, stacked crisps and crackers. It makes about 21,000 tons of savory snacks per year from its four state-of-the-art sites, located in Vendée (France). Europe Snacks achieved sales of €95m over 2014, up 12% on 2013. In December, it signed a large contract with a major European food retailer as part of its international development. europesnacks.com Europe Snacks developed, in 2014, a new segment of activity with the introduction of its first licensed products. The launch of licensed products, initially in partnership with the football team PSG, enables the group to add diversification away from its traditional activity of producing products under food retailers brand names. MAJOR EVENT OF THE YEAR Christophe Fenart (CEO of Europe Snacks) Apax Partners2014 Annual Report44
- 46. RETAIL & CONSUMER In2011, ALAIN AFFLELOU launched a hearing-aid activity on the same model as the optical activity. While still in start-up mode, the number of hearing- aid points of sales, as of 31 December 2014, was already 137 across France and Spain, mainly under a franchise model. For its financial year ending 31 July 2014, optical sales reached €323.9m, down 1.6% year-on-year, and the Group opened 26 stores. In 2012, Apax Partners and Lion Capital joined forces to acquire a majority stake in ALAIN AFFLELOU alongside the founder and namesake Alain Afflelou and the management team. Founded in 1972, ALAIN AFFLELOU is Europe’s leading network of franchise optical stores. At the end of 2014 the group operated an international network of 1,171 stores in 11 countries. alainafflelou.com The Affleloustore.com store was launched in March 2014. The launch of this e-commerce site is the first stage of the group’s deployment of an innovative multi-channel strategy. In November 2014, the group agreed a three- year collaboration with the actress Sharon Stone, who will become the face of ALAIN AFFLELOU. In addition to benefiting from her global public popularity, the group is proud to support Sharon Stone’s commitment to several charities, notably involved in AIDS research. The screening of an advertisement shot by Luc Besson began in the first quarter of 2015. MAJOR EVENT OF THE YEAR Moi c’est Afflelou ! Sharon Stone Nouvelle Collection optique et solaire PrixTTCdesmonturesoptiquescercléesdelacollectionTonic.Dispositif médicalCE.Demandezconseilàvotreopticien.Février2015.RCSParis304577794. 1,171stores €323.9moptical sales Frédéric Poux (President of the Executive Board of ALAIN AFFLELOU) Apax Partners2014 Annual Report 45
- 47. RETAIL & CONSUMER ApaxPartners and Bridgepoint Capital joined forces to acquire jewellery retailers Histoire d’Or and Marc Orian, investing alongside the management team of Histoire d’Or and Qualium, the former majority shareholder of Marc Orian. The acquisition was completed in October 2010. Apax Funds and Bridgepoint Capital together hold a majority stake in THOM Europe. The combination of the two groups resulted in the creation of THOM Europe, a leading jewellery retailer in Europe. The group operates in France, Italy and Belgium, through a network of 566 company-owned stores, primarily located in shopping centres. THOM Europe operates three chains: Histoire d’Or and Marc Orian, offering mid-range generalist jewellery, and TrésOr, offering “everyday low price” jewellery. For financial year ending on 30 September, 2014, THOM Europe’s sales were €354m, up 3% on 2013. Sales performance was driven by the opening of 45 new stores over the last twelve months and the ramp- up of e-commerce sales following the website launch in April 2013. tresor-bijoux.fr marc-orian.fr histoiredor.com €354msales 566company-owned stores Histoire d’Or, the group’s main brand and a reference actor among generalist jewellery retailers, had a strong year marked by the great success of its new e-commerce site. Its sales continue to grow robustly, driven by a multi- channel strategy founded on the e-commerce site and its 370 boutiques. MAJOR EVENT OF THE YEAR Eric Belmonte (CEO of THOM Europe) #ReadtheinterviewwithJean-PierreChantrel,GeneralManagerandCFOofTHOMEuropepage33. Apax Partners2014 Annual Report46
- 48. RETAIL & CONSUMER Thegroup designs, sources, markets and distributes branded and unbranded footwear products for the mass-market. It posted sales of €282m in 2014, up 6% on 2013. The increase in sales was primarily a result of the growth of the Sport business unit and notably the strong success of the New Balance license. Apax Funds hold 15% of the capital of Groupe Royer, a leading brand manager in the footwear industry. Apax Funds invested in Groupe Royer in 2007. grouperoyer.com 2014 was a year of strong growth for the New Balance license, which is distributed by Groupe Royer in France, Germany and the Benelux region.This growth, which can now be added to the significant gains made in 2013, has enabled Groupe Royer to significantly increase turnover from the license in just two years. MAJOR EVENT OF THE YEAR Jacques Royer (CEO of Groupe Royer) €282msales 6%sales growth Apax Partners2014 Annual Report 47
- 49. Innovation and strategic internationaldevelopment made the headlines in the Healthcare portfolio. HEALTHCARE more than 500 surgeons in public and private hospitals across France via a unique network of commercial agents. Internationally, Amplitude established strong relationships with independent distributors early on, and now generates over 25% of its revenues in 30 countries outside of France. Amplitude demonstrated robust growth in the first half of its financial year ending June 30, 2015. Sales were up 27% on the same period in 2014. Exports performed very well up 102% over the first half of 2014, driven by strong results from its Australian and Brazilian subsidiaries and ongoing organic growth in selected European countries. Over the last 12 months, Amplitude achieved significant milestones towards the realisation of its value creation plan by refocusing on selected export markets and through ongoing innovation that resulted in the successful launch of three new implants. For 2015, the company plans to maintain a double digit growth as it benefits from a full-year contribution from its new subsidiaries and the commercial success of new knee products. Apax Funds hold a majority stake in Amplitude, France’s leading hip and knee prostheses specialist and a strong challenger to US majors. The remaining capital is held by management. Founded in Valence (France) by Olivier Jallabert in 1997, Amplitude designs, manufactures, and markets a complete range of high quality hip and knee prostheses. Over the years, Olivier has assembled a team of highly-seasoned executives to build a differentiated business model. This model combines reliance on outsourcing and tight control over strategic competencies (R&D, quality control). Today, Amplitude provides and guarantees the highest standards of service to Amplitude launched a new subsidiary in the fast growing extremities market (foot and ankle). Sales began in France in July 2014, and products were also successfully registered in the US, where Amplitude commenced sales in late 2014 through a white-label distribution agreement. This new business, created with industry veterans, is the fruit of two years of research and development. amplitude-ortho.com 27%sales growth 102%export sales growth MAJOR EVENT OF THE YEAR Olivier Jallabert (CEO and founder of Amplitude) Bertrand Pivin Apax Partners2014 Annual Report48
- 50. Apax Funds hold11% of the capital of Capio, a leading provider of private healthcare services in Europe. Capio was acquired in 2007 by funds managed by Apax Partners SA, Apax Partners LLP and Nordic Capital. Following this acquisition, Capio shares were withdrawn from the Stockholm Stock Exchange. In February 2011, the Spanish subsidiary Capio Sanidad was sold to CVC Capital Partners. Capio is one of the largest independent providers of acute care services, and is active in both the provision of privately and publicly funded care. The company is unique within the private acute services sector in having a pan-European footprint, and enjoys leading positions in France (where it is No.3), Sweden (No.1) and Norway (No.1). Capio continues to perform in line with its plan, developing its leading positions in Sweden, Norway and France. The company achieved 3.7% organic growth in 2014, mainly driven by positive volume development. Revenues reached €1,444m for the year, representing 1.5% year-on- year growth (including acquisitions). Going forward, Capio will focus on optimising its product mix while improving cost structure. capio.com HEALTHCARE Capio continues to invest in France and launched a program to construct new clinics that will result in the opening of three establishments by 2017. In Bayonne, the 270- bed Belhara clinic will be built at a cost of €70m. Near Toulouse, the Croix du Sud clinic will cover 33,000 square meters and will employ 700 staff and 150 doctors.The €100m clinic will include 29 operating theatres, an emergency service and a maternity ward. Finally, Capio will create a major medical branch, with 700 beds, near Lyon by regrouping six existing clinics at a cost of €150m. Capio’s treatment strategy is based on improving the quality and effectiveness of modern medicine. Advances in treatment allowed the Swedish group to carry out 56% of its procedures on an outpatient basis across its 25 French establishments, well below the national average of 39%. Thus, at each new facility, the number of beds has been reduced by 20% to 30%. This innovative new model responds directly to the challenge of reducing healthcare spending. MAJOR EVENT OF THE YEAR 179hospitals and care centers 4.6 millionpatient visits in 2014 Thomas Berglund (President and CEO of Capio) Apax Partners2014 Annual Report 49
- 51. Since the companyhas publicly traded debt securities, only publicly available information will be disclosed in this report. During the first nine months of 2014, Unilabs generated revenues of €451m. Excluding acquisitions and foreign exchange movements, organic sales grew by 4% year-on-year. Strong volume growth, particularly in the Imaging Business, drove the positive revenue performance. Going forward, Unilabs will maintain its focus on productivity and cost savings to provide quality driven diagnostics at a competitive price. Apax Funds hold 11% of the capital of Unilabs, a leading pan-European, quality- driven diagnostics company. Unilabs provides laboratory and radiology services to public and private healthcare providers, county councils, insurance companies, directly to outpatients as well as to the pharmaceutical industry, and clinical research organisations. Unilabs is active in 12 countries with strong market positions in Switzerland, France, Iberia and the Nordic countries. unilabs.com The management team was significantly strengthened in 2014 with the appointment of a new CFO, a new CEO France and a new CEO Switzerland. Karl-Erik Clausen, the new CFO, will contribute his business vision and healthcare expertise while unifying Unilab’s reporting. Patrice Ferran, new CEO France, and Andreas Gattiker, new CEO Switzerland, will take on the challenges faced by these two major countries for Unilabs: acting to develop commercial activity, address prices cuts and improve productivity. 171laboratories and radiology centers 101 milliontests in 2014 HEALTHCARE MAJOR EVENT OF THE YEAR Jos Lamers (CEO of Unilabs) Apax Partners2014 Annual Report50
- 52. International expansion led theway in the services sector portfolio. SERVICES and €129m in EBITDA, up 5% on 2013. This performance has been driven by excellent results at its newly acquired Brazilian operations and solid performance of solar activities, which outweighed the negative effects of the planned decrease of fixed premiums, the normalisation of the calling rate at a peak power plant and several technical incidents in its thermal activities. After one year of intensive work, Albioma entered the Brazilian market in March 2014 with the acquisition of Rio Pardo Termoelétrica. The French Energy Regulation Commission (CRE) approved, in December 2014, a 30-year contract for the supply of electricity from the future power plant in Martinique. Albioma also won a tender for a peak turbine- plant in La Réunion. This peak plant is 51%-owned by Albioma, has a 25-year contract with EDF and is expected to be operational in 2016. The new facility will be the first French peak plant operating mainly with biomass. We have confidence in Albioma’s outlook and value creation potential, given the extremely strong resilience of its business model in the current environment, as well as its strong management team and the upside potential in its share price. Apax Funds and Altamir hold 42.5% of the capital of Albioma, both directly and through the holding company Financière Hélios. Albioma is a leading designer and operator of power plants in France, Mauritius, and Brazil with a strong focus on renewable energy. The company has world-class expertise in biomass and significant operations in solar energy, with a total installed capacity of 700MW. The company is listed on the Paris Stock Exchange. Albioma reported a strong performance for 2014. For the year ending 31 December, 2014, Albioma posted €354m in revenues, down 3% on 2013, albioma.com MAJOR EVENT OF THE YEAR Albioma acquired RioPardo Termoelétrica, a cogeneration unit in Brazil, a country that is the group’s international priority. The transaction made Albioma the first company to assume responsibility for the outsourcing of a Brazilian sugar mill’s energy production, thus confirming its status as a strategic partner for the sugar industry. After this successful first international investment,Albioma is in active discussion with other sugar companies in Brazil to acquire or build cogeneration units. €354mrevenues €129mEBITDA SERVICES MAJOR EVENT OF THE YEAR Jacques Pétry (CEO of Albioma) Bertrand Pivin and Monique Cohen Apax Partners2014 Annual Report 51
- 53. of advising andproviding executive education for corporates and offering a Career Center in China for students and alumni of the group. The Groupe INSEEC also strengthened its partnership with China, signing two agreements: one with the Chinese Ministry of Culture to enable Chinese students to pursue a six-month double-training programme in France and China; and the second with the Jiaotong University for an executive programme in China. Groupe INSEEC also opened a new location in Switzerland, in 2014, with the acquisition of management school CREA Genève. The purchase will enable Groupe INSEEC to develop projects in the digital realm and in luxury goods management, in cooperation with the International University of Monaco. Finally, Groupe INSEEC announced the creation of a new San Francisco-based campus, which is scheduled to open in April 2015. Apax Funds hold a majority stake in Groupe INSEEC, the leading for-profit post-secondary education provider in France, with close to 15,000 students and a large alumni network. The Groupe INSEEC operates 12 colleges in France (Paris, Bordeaux, Lyon, and Chambery) and abroad (Monaco, London, Chicago, Geneva, Shanghai). It offers students a broad range of programmes in business and communications, from non- degree courses to Doctoral programmes. Building on its French roots, the Group’s strategy is to develop world-class programmes and distinctive expertise in three domains of management education: Luxury & Hospitality, Wine & Spirits, and Communication, Design & Digital Marketing. The group’s focus for 2014 was notably international. Groupe INSEEC inaugurated the Luxury Business Institute in Shanghai, targeting its double-objective groupeinseec.com In 2014 Groupe INSEEC defined a clear strategy to position itself along three major axes: Luxury & Hospitality,Wine & Spirits and Communication, Design & Digital marketing. To realise this ambition, the entire visual brand identity was reviewed with the assistance of global brand specialist Jean-Noël Kapferer, a former HEC professor who joined Groupe INSEEC. 15,400 students in 2014, up from 3,500 in 2004 78 nationalitiesrepresented MAJOR EVENT OF THE YEAR SERVICES Catherine Lespine (CEO of Groupe INSEEC) Apax Partners2014 Annual Report52
- 54. In 2012, ApaxFunds acquired 71% of the equity of TEXA. The remaining capital is held by the former controlling shareholders and the company’s management. TEXA is one of France’s leading loss adjusters. Created in 1987 through the merger of 6 insurance expertise offices, the company has grown through a mix of organic growth and active consolidation of its sector. In 2009, TEXA diversified its activities by acquiring AlloDiagnostic, one of the few national players in the emerging real estate diagnostic sector. In 2014, TEXA posted revenues of €125m, up 17% on 2013, mainly due to organic growth and the consolidation of Groupe CLE. 2014 was marked by the acceleration of the digital transformation of TEXA. Having developed mobile tools to facilitate the work of our experts in the field, TEXA launched a video-expertise solution dubbed “Visiotex.” This tool affords the group a new way to provide expertise services that place the insured at the heart of the operation. Before proceeding with an expertise by video-conference, the insured party is able, through an application downloaded onto their smart phone or tablet, to add or complete the relevant information and to enrich their dossier with photos or other digital documents. texa.fr During 2014 TEXA integrated Groupe CLE, the third largest player in construction expertise. This acquisition positioned TEXA as a multi- sector expert. The integration of the new personnel was successful and created many synergies along the way. On the financial side, Groupe CLE continued to grow and maintain its profitability. MAJOR EVENT OF THE YEAR SERVICES 17%revenue increase 410experts Pierre-Antoine Lagé (Managing Director of TEXA) and Bruno Vesval (Chairman of TEXA) Apax Partners2014 Annual Report 53
- 55. Apax Funds holda majority stake in SK FireSafety Group, a Northern Europe leader in fire safety. SK FireSafety Group specialises in the protection of people and assets in three key areas: sale and maintenance of first intervention products, design and maintenance of fire detection and suppression systems for high-value assets in critical environments, and maintenance of cabin safety equipment specific to the aviation sector. The group is headquartered in Breda (Netherlands), has operations in The Netherlands, Belgium, the United Kingdom, Norway and United Arab Emirates, and employs 650 people. Installed base of more than 750,000 fire protection units 650 employees 2010 2011 2012 2013 2014 Total 290 317 427 637 650 # NUMBER OF EMPLOYEES In 2014, SK FireSafety Group implemented a PDA-based service work-order automation system. The engineer receives on his PDA the planning for the week, the route for the day and schematics of the client’s building. Products and spare parts are delivered overnight to the service engineers’ vehicle at his home. The main benefits are: shorter travel time, efficient logistics, knowledge retained in the digital system, and fast and effective invoicing. MAJOR EVENT OF THE YEAR SERVICES Ewald Draaijer (CEO of SK FireSafety Group) Apax Partners2014 Annual Report54
- 56. skfiresafetygroup.com SK FIRESAFETY SK Products:mobile fire protection equipment SK Systems: bespoke first intervention fire safety systems for commercial sites SK Oil, Gas & Petrochemicals: specialist first intervention fire safety Oil & Gas assets SK Aviation: aircraft maintenance and safety # ORGANISATION CHART SK FIRESAFETY GROUP GROWTH SK FireSafety group ranked 4th in the Dutch Financial Times’ ranking of the fastest growing companies in the Netherlands. # AWARD The group has expanded its regional presence to Scandinavia, the Middle-East, Africa and The Caspian in the last three years. # INTERNATIONAL CEO of SK FireSafety Group with EWALD DRAAIJER What underpins SK FireSafety’s impressive growth history? Our success is founded on innovation. Ten years ago we developed a digital work flow model that radically improved the efficiency of our service engineers and logistics. That early shift to digital enabled us to develop key management skills and systems that are not easily replicated, particularly given that many of our competitors still operate on inefficient, paper-based systems. EBITDA margins at our products and services units are over 20%, double that of analog competitors. That provides an advantage in terms of reinvesting for further growth and positions us to grow through acquisitions. We know from experience that our digital model delivers significant efficiency and cost benefits when applied to analog companies. Acquisitions have been a key growth driver for SK FireSafety, will that continue? We are looking at acquisition opportunities in Europe and they could come to fruition quickly. Yet we are not reliant on deals. We have posted double digit organic growth over the last couple of years and that can be replicated. Our Oil & Gas business is well positioned to benefit from the significant demand for upgrading equipment and fire safety solutions on the North Sea platforms, which are old but still in use as advances in recuperation technology extends their life. Our aircraft maintenance and safety unit, SK Aviation, is also poised to grow following a complete operational review and we will pursue acquisitions of smaller rivals in Europe, the Middle East and Asia. Why did you choose to work with Apax Partners? From our first meeting, we formed a really good impression of Apax Partners. They came with a strong team, including five partners and Eddie Misrahi, which was proof of their interest. Subsequent discussions were always positive and they clearly understood our project and philosophy. With Bertrand Pivin, and the team as a whole, what you see is what you get and I really appreciate that. # INTERVIEW SERVICES SK FIRESAFETY GROUP GROWTH # REVENUES CHART 40 2011 100 2014 200 to 250 Target [medium-term] 3 €m Apax Partners2014 Annual Report 55
- 57. 15 Portfolio COMPANIES at 31december 2014 Sector/company Investment year Business description 2014 revenues TECHNOLOGY-MEDIA-TELECOM Altran* (Altrafin Participations) altran.com 2008 Global leader in innovation and high-tech engineering consulting €1,756m Gfi Informatique* (Itefin Participations & Infofin Participations) gfi.fr 2007 Major European player in value-added IT services and software €804m Infopro Digital infopro-digital.com 2007 Leading French provider of professional information services (databases, websites, trade shows & publications) €288m Vocalcom vocalcom.com 2011 Software and technology solutions provider for customer contact and call centres €36m RETAIL & CONSUMER ALAIN AFFLELOU alainafflelou.com 2012 Europe’s leading network of franchise optical stores €324m(1) Europe Snacks europesnacks.com 2013 Leading manufacturer of savoury snacks under private label brands €95m Groupe Royer grouperoyer.com 2007 Leading footwear wholesaler in France €283m THOM Europe (TrésOr, Histoire d’Or/Marc Orian) tresor-bijoux.fr; histoiredor.com; marc-orian.fr 2010 Leading European jewellery retailer €354m(2) HEALTHCARE Amplitude amplitude-ortho.com 2011 Designs, develops and markets orthopaedic implants for hips and knees €58m(3) Capio capio.com 2006 Leading European private healthcare provider €1,444m Unilabs unilabs.com 2007 Major pan-European company in the field of medical laboratory testing €451m(4) SERVICES Albioma* (Financière Hélios) albioma.com 2005 Independent energy producer €354m Groupe INSEEC groupeinseec.com 2013 Private higher education leader in France €122m SK FireSafety skfiresafetygroup.com 2014 The fire safety specialist in Northern Europe €100m TEXA texa.fr 2012 French leader in loss adjustment, specialising in fire, accident, and other risks, and in large technical risks €125m (1) Fiscal year ending 31 July 2014 (2) Fiscal year ending 30 September 2014 (3) Fiscal year ending 30 June 2014 (4) First nine months of 2014 * Listed company Apax Partners2014 Annual Report56
- 58. Chairman and CEO EddieMisrahi eddie.misrahi@apax.fr Partners Bruno Candelier bruno.candelier@apax.fr Monique Cohen monique.cohen@apax.fr Franck Hagège franck.hagege@apax.fr Bertrand Pivin bertrand.pivin@apax.fr Gilles Rigal gilles.rigal@apax.fr Thomas de Villeneuve thomas.de-villeneuve@apax.fr Investor Relations Guillaume Cousseran guillaume.cousseran@apax.fr Business Development Guillaume Cousseran guillaume.cousseran@apax.fr Aida Ben Lamine aida.benlamine@apax.fr Funds Administration Dominique Parent dominique.parent@apax.fr Communication Coralie Cornet coralie.cornet@apax.fr Contacts Editorial Director: Coralie Cornet - Editorial consultant: Paul Whitfield - Conception: Labrador Photo credits: Serge Verglas, Bruno Paget, Petri Bakker. For this annual report, Eddie Misrahi, Partners and Coralie Cornet would like to thank all the portfolio companies’ teams for their participation, availability and enthusiasm. Let’s stay in touch! l Apax Partners MidMarket T @ApaxFrance www.apax-talks.fr
- 59. 1 rue PaulCézanne – 75008 Paris France +33 (0)1 53 65 01 00 partners@apax.fr www.apax.fr Come visit lApax Partners MidMarket T@ApaxFrance www.apax-talks.fr 10-31-2711 Certifié PEFC Ce produit est issu de forêts gérées durablement et de sources contrôlées. pefc-france.org This document is printed in France by an Imprim’Vert certified printer on PEFC certified paper produced from sustainably managed forest.