Exclusive Q&A: Jerome De Metz, Chairman & CEO, Groupe Beneteau
De Metz has announced a bold, five-year strategic plan, Let’s Go Beyond, that aims to streamline operations by focusing on eight boat-building brands.
Can you outline Covid-19’s financial impact on Groupe Beneteau’s Boat Division and its boat building plants in France, Italy, Poland, USA and China?
Nearly 50 per cent less production time during the second quarter of 2020 led to a 43 per cent decrease in sales compared to the first quarter. This drop was simply a reflection of production being shut down for six weeks.
There have been no changes to our factories, but we have had to adapt our industrial footprint to the volume levels demanded by post-Covid markets. This forced us to put several plants on standby or in reduced activity for a while.
We must not lower our guard: the virus is still there, and we must remain careful and disciplined.
In July, you had to announce Groupe Beneteau’s new strategic plan for 2020-2025. Putting Covid-19 aside, how difficult was it for you to create a strategic plan for a boatbuilding and leisure homes group, which is so different to your experience as a private equity investor?
That is a good question. As a former private equity (PE) practitioner, I used to say that your finance skills are necessary in the PE industry. However, the real success factors for PE lie in your ability to exercise judgement based on context, strategies, organisations and, last but not least, people. This is exactly what I am doing in my new role.
Your predecessor had four years in the role and his strategic plan was called ‘Transform to Perform’. How does ‘Let’s Go Beyond’ compare?
The plan that we have built as a team is very different, although the Group’s improvements resulting from the previous plan will obviously remain in place.
Your plan mentions moving forward with eight global boat brands, compared with 12 currently, and for the ‘House of Brands to cover the same number of segments with less investment’. How will this be achieved?
Groupe Beneteau’s House of Brands is based on a core portfolio of eight brands that upcoming investments will focus on. It comprises four world leaders – Beneteau, Jeanneau, Prestige and Lagoon – and four high-potential brands – Four Winns, Wellcraft, Delphia and Excess.
By 2025, Groupe Beneteau will continue to cover as many market segments across four strategic markets – day boating, real estate on the water, monohull and multihull sailing – with eight international brands and 128 boat models compared to 12 brands and 183 models in 2019.
As well as covering as many market segments with eight brands as with 12, the plan aims to achieve as much turnover – or even more – with fewer models, less investment, shorter design and manufacturing times, and better productivity by our plants, which will maintain an irreproachable level of quality while being structured by segments, not by brands.
This will become possible with an organisation based around global functions instead of companies. There is no longer any overlap in the positioning of our brands or internal competition; there’s just healthy competition. In addition, this five-year plan will be adjusted twice a year to consider developments in our markets and the success of our products.
What will happen to the other four brands?
We envision that the life of the four brands concerned will continue in another form. In the meantime, the business life of these brands continues as usual, with them attending boat shows, production being fully operational and the Group working on the best-possible scenarios to guarantee an ideal future for each brand.
Your plan includes ‘achieving an operating margin of over 10 per cent when business has returned to 2019 levels’. How will you achieve this and when?
Achieving as much revenue with fewer brands is our challenge and key to the plan’s success. I am convinced that we will succeed because the product plan is very rich. All our customers will appreciate the personality and DNA of our historic brands Beneteau, Jeanneau, Lagoon and Prestige.
However, we are also going to conquer or win back new customers by giving a new start to the brands created or acquired recently – Four Winns, Wellcraft, Delphia and Excess – with completely redesigned ranges in line with new uses, such as outboard powercats at Four Winns or 9-14m yachts for inland waterways and coastal sheltered waters with Delphia.
When will the markets return to their 2019 volumes? We do not know and we are preparing for all eventualities, including one where our decline would be less than in the last crisis (2009) or a faster restart. Our plan provides a lot of flexibility.
Following your appointment as CEO last year, senior management changes included the promotions of Gianguido Girotti and Jean-Paul Chapeleau to Deputy CEOs, and this year’s appointment of Bruno Thivoyon as Group CFO. What qualities does each person bring to the management team and how do you complement each other?
The Executive Board also includes Corinne Margot, HR and Communications Director. The team is now stable and are in charge of executing the strategic plan, supported by taskforces made up of functional or operational managers.
We are overseeing 34 of the Let’s Go Beyond plan’s execution projects, in project mode. This is a huge job, but everyone knows what they need to do. Groupe Beneteau really does have high-quality teams.
By truly working together, in the best interests of the Group, we can and will disrupt the rankings in our market segments. You will see!
We read that the Asian market represented just 3.9 per cent of the Boat Division’s revenues in 2018-19, with China accounting for most of that, and that the regional market has been contracting for several years, predating Covid-19. What needs to happen for Asia to be as financially important to Groupe Beneteau as it is to other yacht builders?
We have been among the pioneers in China and Asia. We cannot hide that the level of our sales does not correspond to our ambitions on this continent. But we are maintaining our teams and our commercial investments because there is still very strong potential. As you know, unlike Europe or the US, Asia does not have a unique face when it comes to boating. The simplification of our product strategy will be very useful to penetrate these markets which are still emerging.
Can you outline some of the Group’s new boat models being unveiled this autumn?
We have many new models, some of which were going to be shown at the Cannes Yachting Festival. In the powerboat segment, we have the new Prestige X70, a revolutionary project that we are very proud to unveil because of its innovative architecture and use of space, as well as the extensive improvements achieved in interior and exterior quality.
In the sailing segment, we have the new Beneteau Oceanis Yacht 54. Following last year’s success with the First 53, the Oceanis Yacht 54 is another innovative model that will keep on pushing the brand’s leadership in the luxury cruiser segment. Smaller but no less important is the new Beneteau Oceanis 40.1, a key size in the cruiser market, with an innovative layout for charters.
Lagoon has introduced the Sixty 5, a truly luxurious sailing cat. On the other side of the spectrum, have also launched the Excess 11, which is the smallest cat offered by the Group.
Groupe Beneteau is scheduled to release its full-year earnings on October 27 and present a more developed financial breakdown of the strategic plan. What can we expect from a Group that has been generating over €1 billion in annual revenue from its boat sales?
Be patient: you will have the answer on October 27!
Finally, how often do you go boating and what do you like about it?
I love that feeling of freedom you get on the water. I used to boat in my small village in northern Brittany called Saint-Jacut de la Mer. I lived above its small harbour. Every year, I try to escape and spend a week sailing with my old friends. This year, I will try to sail in Croatia – if the borders are open.
JEROME DE METZ
Jerome de Metz has been Chairman and CEO of Groupe Beneteau since June 2019, having established himself as one of France’s private equity pioneers. A graduate of SKEMA Business School and a chartered accountant, he started in the auditing industry and later became CFO of IT company Econom, led by Jean-Louis Bouchard. In 1990, he entered the private equity sector at Initiative & Finance, becoming Chairman of the Board of Directors in 2000. With his team, he then founded MBO Partenaires and led it from 2002 to 2017. Keen on international business, De Metz opened offices in China, India and Brazil to pool the business development effort of the portfolio companies. He also developed business projects in sectors as varied as wine in China and the web industry in Morocco.
Yacht Style has released Issue 54 (July-August), its Charter Issue for 2020. Flying Fox, the world's largest charter yacht, stars on the front cover of the 208-page magazine, as the 136m megayacht prepares to return to Asia later this year.