Geodis: Ready for a change of image (Interview)
Mr. Blayau, Geodis may be the leading logistics provider in France and may have plans to become one of the top European companies in this field, but, in fact, the group is in the red. How do you intend to lead the company back into the profit zone?
The group has undergone substantial restructuring over the last few months, and I am confident that we will achieve a positive net result very soon. But our figures are not really as bad as they may appear at first glance. We made considerable provisions to finance the measures needed for the reorganisation. At the same time, we have invested a great deal of capital in the development of new IT systems, which has helped us to draw ahead of our competitors in the indsutry in this respect. Our new interactive track & trace system for express and breakbulk cargo, l’e-spa@ce, is the most user friendly tool currently on offer in the market. Try it out!
In any case, our gross margin (Ebitda) is positive. Unfortunately, our image is more negative than the real picture. I hope that in the course of this interview I can improve the image you have of our company.
In the first nine months of this year, the group’s consolidated net sales came to EUR 2605 million, a 3.1% increase compared to the year-earlier period. And although we may have generated some additional earnings from the sale of our shares in Extand at the end of May 2000 and in Feron at the beginning of the year. it should not be forgotten that we had the expense of having to fully integrate ZUst Ambrosetti (Italy) by January 1,2001.
At the end of June, however, you announced a growth rate of 4.2%.
That is true, but the decline in the growth rate over the three quarters reflects the global economic situation and also the effect of the events of September 11. Nevertheless, we were able to in-
crease our net income in France by 5.7% by the end of September. We attribute this success to the good performance achieved by our groupage services (Calberson).
In Europe (excluding France), however, our net sales dropped by 0.5%, and outside Europe by as much as
9.2%. The business results of our UK subsidiary United Carriers are still unsatisfactory. Moreover, growth rates in the Italian economy declined sharply, and intercontinental air and seafreight. particularly in the Latin American trades, also slumped. We are naturally hard hit by these negative market trends, since we generated almost 34% of our turnover outside France.
Have you now completed your restructuring process?
It will be completed next year, but we have already made a great deal of progress. From now on, we intend to concentrate on profitable business segments which show good prospects for the future.
Amid what business segments do ou have in mind?
Contract logistics, for example. and domestic and pan-European groupage services as well as express products. Courier/express/parcel services form another important pillar of our operations in France. I believe that these three market segments have good prospects for growth.
The trend towards outsourcing many services continues unabated and will gather momentum while the overall economic situation deteriorates. However, our organisation must become more dynamic and more aggressive and make more of an effort to win customers here in Europe. Reference projects prove that we are among the best when it comes to developing supply chain solutions and optimising logistics processes. We must make better use of these excellent assets in future.
Another objective for the next few months is to improve the integration
and incorporation of our domestic consolidat ion services into a pan-European network.
As chairman of Geodis, it is my task to discover the potential for svnergies in the various divisions of the group (groupage, complete loads, air and seafreight, logistics) and its subsidiaries and to improve the cooperation between the different units so that this potential can be hilly exploited.
All companies worldwide are faced with the same problem: how do they motivate their staff and mohilise their energy to the benefit of the company as a whole?
Why did Geodis take over only a 15% share in Sernam (a groupage subsidiary of SNCF), instead of the 60% that was originally planned?
For the reasons I already mentioned above. We want to concentrate on healthy businesses. In other words, we do not want to acquire a majority shareholding in Sernam at the moment. Sernam must first solve its problems. and then we can discuss whether we would like to increase our share. But of course we are interested in expanding our market share in the consolidation business in France as well.
Geodis has been operating in Germany since 1998, but is still in the retL
Germany is a very difficult but interesting market. Here we work for IHI and Nestle, among other companies. With
them and other contract partners we can grow steadily throughout Europe. ‘c provide services for IR1 in Spain. hut IBM works for us. too. It operates our communications systems and helps us develop IT solutions which set us apart from our competitors and give us an advantage in the market.
We operate our own branches in fifteen locations in Germany. More than 400 dedicated employees generate a turnover of about EUR 80 million. However, we are still looking for a good partner for consolidation services a
considerably expand our trade between (ermanv and France. This trade has enormous potential, and we have so far only managed to win a small portion of the available freight volumes.
Our teams in Paris and Frankfurt are constantly talking with each other, discussing ways and means of how we can expand our market position in this trade and how we can exploit the strengths that we already have in the French market in Germany as well. So we aim to considerably increase our marketing efforts in Germany over the next few months.
What about the situation in Italy and
Spain, where ou have bought Züst
A nibrosetti and Teisa?
We must improve the performance of our national consolidation services in these markets and widen our portfolio of products.
What plans do you have for a closer partnership with La Poste? Both of your companies provide express and parcel logistics services.
The talks have been put on hold for the moment. But I am sure that we will resume our discussion about equity participation some time in the future, in order to increase our synergy potential.
So will Geodis continue with its shopping spree?
We are currently going through a phase of consolidation and prefer to grow organically in cooperation with our subsidiaries and partners throughout the world. However, if we want to survive in the world market and attract major customers that operate worldwide, we must form new partnerships and enter new alliances in the medium term, and thus improve our international position. But we will proceed very carefully and choose only healthy com panies. We are
aiming to create a comprehensive global air and seafreight network in close cooperation with our partners and to add even more routes to our European overland transport network on the basis of our own company branches on this continent.
About fifteen different hrandnames are associated with the Geodis holding. Do you intend to keep it that way?
In company takeovers and shareholding agreements. brandnames represent an important bargaining counter which you do not want to waste or sell too short. So we intend to retain our old brandnames. Each of these brands has its place in the market and its own loyal customer base. On the other hand, in time we will reduce the number of brandnames for marketing reasons and build up the image of (icodis as a central brand.
What are your expectations for the coming year?
It will not he easy, But we aim at presenting a good business result as soon as possible and at achieving a level of profitability that corresponds to our own good position in the market.
Geodis Group
Main shareholders: SNCF, Socièté Générale
Turnover: EUR 3.4 billion (2000) EUR 2.6 billion (9 mths 2001)
Staff: 25,000 in over 40 countries
Warehousing: 2 million sqm
Vehicle fleet: 17,000
Customers: more than 70,000
Brands:
Geodis Calberson
Geodis Calberson Belgium
Geodis Calberson Europa BV
Geodis Calberson G.E
Geodis Calberson Greece
Geodis France Express
Geodis CA VE WOOD
Geodis TEISA
Geodis United Distribution
Geodis ZUst Ambrosetti
Geodis bm
Geodis Logistics (Contract logistics)
Geodis Logistics VITESSE
Geodis Overseas (Sea/airfreight
Geodis Setcargo
