Nicolas Valtille CFO Akka Technologies : “A group able to take global projects”.
Strategy and perspectives 2016
Nicolas Valtille, hello.
Nicolas Valtille – Deputy CEO of AKKA Technologies: Hello.
You are the Deputy CEO of AKKA Technologies. We’re at the ODDO Forum 2016 where you’re meeting with investors. Best wishes for this new year. How did 2015 go for AKKA?
Nicolas Valtille – Deputy CEO of AKKA Technologies: 2015 was a good year for AKKA. As we had announced, organic growth is now back on the agenda since all our business units have achieved growth. France is six months ahead of our projections while Germany is seeing solid growth, especially in its automobile diversification. With regards to what we call our international business, in the 22 other countries, we’re seeing double-digit growth. So we’re very happy with how the year went.
We remind that you are an engineering and technology consulting Group. The French market has been doing better – is this a steady trend? Would you say things are going to continue in this direction?
Nicolas Valtille – Deputy CEO of AKKA Technologies: Consumer confidence has certainly improved in France. The real stakes for a group such as AKKA are abroad. First in Germany, then Europe, China, Russia, North America. So all the groundwork we laid down, namely since the acquisition of MBtech, was done to become a global player to serve our customers such as Mitsubishi in Japan, BAIC in China or Chrysler in the US.
Speaking of MBtech, we talked about them during the acquisition and its overhaul. Today, what could you tell investors about MBtech’s positioning and its profitability? Do you feel that the key concerns have been taken care of at MBtech?
Nicolas Valtille – Deputy CEO of AKKA Technologies: The acquisition of MBtech was a major structuring event for the Group, because in barely two years the Group has shifted from being a company or group that was 90% French and mostly in aeronautics, to a group where the French business now accounts for only 48% and is strongly involved in the automotive industry, and the German automotive industry. Daimler – which includes Mercedes Benz, who sold us Mercedes Benz Technology – is the Group’s biggest customer. So this is an acquisition that has completely altered our structure. We passed through a phase of French/German integration. We’re very happy with how things are progressing. It’s highly complex. We’ve doubled our size: the Group has gone from 5,000 employees to 13,000. So this is where we are right now, and the MBtech acquisition was the vector that has enabled us to grow with Volkswagen, Audi in Germany and to accelerate growth in Asia and North America.
So today, we could say that you have a clear positioning.
Nicolas Valtille – Deputy CEO of AKKA Technologies: Our positioning is quite interesting and the advantage for the Daimler Group – our biggest customer – is that we can guarantee that they will have the engineering skills they need available for the many projects they have planned.
Innovation is a given in the automotive industry. What are the most striking advances today? We’ve seen a lot of development in connected cars. What do you consider as the major trends?
Nicolas Valtille – Deputy CEO of AKKA Technologies: It’s clear that driverless and connected cars are a major trend. You’ve seen this with our Link & Go car, which is a prototype of what we can do in this area and which draws from aeronautics, defence, and rail technologies we stimulate our biggest customers’ creativity. Some of this technology was then integrated into designs by major automotive players. This remains important over the long term and we can take things even further. We’re seeing our German customers put a lot of energy into automotive services, new vehicle transport modes. So we still have a few years’ work on these aspects.
Does the fact that there are other non-automotive players – like Google and Apple – who are joining make it more competitive? What effect will this have on the market?
Nicolas Valtille – Deputy CEO of AKKA Technologies: It set off automobile market questioning and carmakers know this. That’s why all of the German carmakers joined forces to buy the Nokia mapping unit. This is why, for different reasons, the various German carmakers are focusing on developing autonomous features. Renault is also working on this. In the end, the question is whether cars will still be considered as a product or a service that uses a basic product. Cars still have a very emotional dimension to them, and even if many people see them as simply a way to get from point A to point B, for many people, they’re much more than that.
This may take another generation, but we can see that the new generation…
Nicolas Valtille – Deputy CEO of AKKA Technologies: Like Pompidou said, “The French love their cars.” The new generation, definitely. For younger generations, when you go to car shows, you can see that there are still a lot young people who come to see the new cars and who are really excited about the new models.
AKKA has also implemented what it calls the PACT 17 programme.
Nicolas Valtille – Deputy CEO of AKKA Technologies: PACT 17, yes.
Is it working the way you planned?
Nicolas Valtille – Deputy CEO of AKKA Technologies: Earlier, I mentioned how our group has undergone this major transformation and doubled in size. We’ve supported these changes with an initial plan called PACT 17, which aimed to help the Group, which was French, become a global group that could take on global projects and execute them around the world. So that was the major objective of PACT 17, which enabled us to ensure revenue growth and increase profitability. We also launched another programme, the Margin Investment Programme, to be able to work more specifically on the company’s profitability.
What is the outlook in 2016 for your industry and for AKKA?
Nicolas Valtille – Deputy CEO of AKKA Technologies: Overall, 2016 should be smoother than 2015 for our industry, even if the early macroeconomic indicators this year may appear a bit rocky. This is really important. There are still a lot of projects in the works for the automotive industry, a lot of programmes and some very interesting possibilities, and rail also has a lot of ongoing programmes and orders, all of which will generate business activity. We’re also confident on energy and oil and gas.
One last question. Since we spoke about this structuring acquisition, will we perhaps see other acquisitions in 2016?
Nicolas Valtille – Deputy CEO of AKKA Technologies: Definitely. We already made four this past year. One in highly specialized areas related to infotainment or plug-in electric vehicles. One that will strengthen our mid-market positioning in France and in the main European countries, while the two others will make us a major player in the world of energy/oil and gas in terms of the technology and expertise that we need to meet the process requirements of our customers in manufacturing. So we’re going to keep going in this same direction.
Web TV www.labourseetlavie.com: Thank you, Nicolas Valtille.
Nicolas Valtille – Deputy CEO of AKKA Technologies: Thank you.