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GBL began redesigning its portfolio in 2012 in order to take into account changes in the market environment and to optimize its objective of long-term value creation for its shareholders. GBL’s strategy is based on three strategic priorities.

Three strategic priorities

  • Priority 1 - Further diversification of the portfolio aiming at a rebalancing between growth and yield

    investments variety

    investments

    The investment portfolio has significantly evolved and now has a geographic exposure profile and growth/yield balance in line with GBL’s objectives.

    Comparison 2011 vs 2017 by type of Investment and type of region

    GBL is pursuing its transformation, and aims at a progressive divestment of historic participations in order to strengthen the portfolio’s growth profile. GBL is looking for significant stakes in companies of lower size and with high growth potential. GBL has followed the same investment philosophy since 1982, based on clearly defined strategic and financial criteria. GBL thus seeks to invest, as a professional shareholder, in companies with a leading position in their sector and a business model focused on organic and external growth, led by an experienced management team and benefiting from the necessary financial resources.

  • Priority 2 - Being an active and responsible professional shareholder

    Priority 2

    GBL is an active holding company with a long-term investment outlook. As an investment vehicle financed by permanent capital, GBL is not constrained by an investment horizon. Investments are therefore held for as long as needed to optimize their value. Periodic assessment of the value creation potential of the different assets is performed in order to define a disposal strategy.

    GBL aims at holding significant stakes in order for it to play an active role within its portfolio participations. GBL’s objective is to share its experience, expertise, notably in M&A, and network with the Management of its participations in order to fully leverage on value creation and entirely fulfil its role as a professional shareholder. Its strategy is to adopt a friendly approach with the aim to build long-term relationships and to play an active role within governance bodies, notably in the context of strategic decision-making by the companies.

    An active and responsible professional investor
  • Priority 3 - Maintaining a solid and flexible financial structure

    Priority 3

    GBL’s objective is to maintain a sound financial structure, with a solid liquidity profile, ensuring readily available resources, and a limited net indebtedness in comparison to its portfolio value. This policy gives GBL the flexibility required to quickly seize investment opportunities. End of 2016, GBL’s Loan to Value ratio stands at 0% (4.7% at end-2015) and the company presents a solid liquidity profile of EUR 3.5 billion (corresponding to the cash and the undrawn portion of the committed credit lines). The evolution of the Loan to Value ratio results from the crystallization of investment opportunities for significant stakes in the capital of companies meeting GBL’s investment criteria, in the framework of the company’s portfolio rotation strategy.

    Loan to Value

    Loan to Value

Strategic objective

  • Value creation through continuous and sustainable growth of its intrinsic value and the dividends paid

    GBL’s objective is to continue to deliver above-average share price performance while ensuring regular dividend growth.
    Historically, the group has paid out less dividends than the amount received from its participations, generating a positive dividend gap after financial and overhead expenses. Following the partial disposal of high-yielding assets in the energy sector, this gap could temporarily narrow, even be temporarily negative, but without jeopardizing the objective of dividend growth.

    This pursued policy therefore aims at reaching a balance between an attractive dividend yield and a long-term growth potential with regards to the investment portfolio.

    GBL is committed to distinguishing itself from other listed investment companies by playing a role of active and professional shareholder within its participations. GBL is also committed to a regular portfolio rotation and a limited and optimized cost structure. Finally, the ultimate lever of value creation for shareholders is based on the reduction of the discount.

  • GBL’s investment model
    GBL's investment model
  • Clear investment criteria

    GBL invests in European companies with a worldwide footprint and exposure to high growth markets. Investments must meet the following main criteria:

    Strategic criteria

    • Leader in their field
    • European group but with an international scope
    • High quality management
    • Potential for organic and external growth
    • Dividend distribution capacity
    • Simple and solid, value-creating business model
    • Geographical and sectorial diversification

    Corporate governance criteria

    • Position of main shareholder (1st or 2nd)
    • Active contribution to value creation in close collaboration with the management
    • Active role within the governance bodies (Board of Directors and Committees)
    • Participation in strategic decision-making, nominations and remunerations of the management adequacy of the financial structure and the future development of the participations (M&A)

    Financial criteria

    • Strong cash flow generation
    • Financial flexibility allowing to exploit strategic opportunities