Eurazeo portfolio's revenues dragged down by travel & leisure assets in Q1

The relatively modest impact of the Covid-19 outbreak on overall portfolio revenues was mainly down to the majority of assets being in what Eurazeo classed as two broad categories: resilient activities (35-40% of NAV), with a "high level of recurring income or limited exposure to the consequences of the epidemic"; and companies "indirectly impacted by the lockdown" as a result of the economic environment (20-25% of NAV). The first category saw revenues rise by 5% year-on-year in the first quarter, while the second posted growth of 8% (mainly due to stronger performance in January and February, offsetting a stalling of growth in March).

This was, however, dragged down by revenues falling in the other two categories identified by Eurazeo: companies "directly impacted by the widespread lockdown but expected to recover fairly quickly once lockdown is lifted" (15%-20% of NAV) saw a -12% fall in revenue; and companies "directly impacted by the widespread lockdown, where business recovery is expected to be more gradual" (20-25% of NAV), encompassing companies exposed to the travel and leisure sector, suffered a 16% drop in revenues year-on-year (including a steep 50% reduction in March).

Eurazeo pointed out that the turnover of Eurazeo Growth companies, mainly falling into the "resilient assets" category given their digital-focused business models, is not consolidated and was therefore excluded from the aggregate portfolio revenue figure. These companies reported a weighted average growth rate in excess of 60% in the quarter, Eurazeo said.

The impact of the outbreak on the valuation of Eurazeo's PE investment will not come to light until Q2 results are out later in the year: only cash and listed assets were revalued in the quarter (altogether accounting for less than 2% of NAV), while Eurazeo's unlisted assets are revalued every six months.

Eurazeo retained cash and cash equivalents of €746m as of 31 March, including €400m on a €1.5bn syndicated credit facility. The group still has €3.5bn in dry powder for investments.

In a quarter marked by limited fundraising activity on the private equity side, the group also stated that, due to macroeconomic uncertainties, it is "probable" that fundraising scheduled for 2020 will be pushed back by six to nine months.

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• Topics
• Performance
• France
• Consumer
• Eurazeo
• coronavirus