Special papers and security papers

Sequana rationalises its activities


In line with the announcements at the end of last April, Arjowiggins, a company controlled by the French paper group Sequana, has confirmed the completion of the sale of the Brazilian subsidiary Arjowiggins Ltda in Fedrigoni for an overall sum of 85 million Euros and a balance of the price of up to 5 million payable in 2016, subject to reaching certain performance conditions.

In this way the multinational group Fedrigoni (with its headquarters in Verona, in Italy) takes over 100% of the only South American producer of paper for bank notes, special papers and security paper, able to serve the markets of Brazil and Argentina and to generate a turnover, in 2014, of 70 million Euros. With this operation, furthermore, the Italian group, led by the CEO Claudio Alfonsi demonstrates its capacity for growth abroad, in particular in areas of strong development like the South American continent. It strengthens itself in one sector, that of the production and sale of paper with high added value, security products and self-adhesive products, which already sees the company in an excellent position at a global level with the production of bank notes both for the European Central Bank and for African and Asiatic countries.

Claudio Alfonsi, Ad Fedrigoni 1
Claudio Alfonsi, CEO of Fedrigoni.

Back to Sequana, the French group listed on the Paris stock exchange then formalised an agreement with the Impala group for the sale of 85% of its «Security Solutions» activities, specialising in security paper for tax stamps and identity documents, for a sum of 110 million Euros. Sequana will continue to take part in developing this business through its remaining holding.

Sell and restructure

Both the sales, that of the «Security Solutions» activities and that of Arjowiggins Ltda, will enable the French group to pay back all Arjowiggins’ syndicated credit line for a sum of 125 million Euros and will strengthen its financing capacity.

These sales will complete five years of financial and operational restructuring which has involved the redundancy of 10 thousand employees in the group and costs of one billion Euros. The financial situation is now much healthier and the group’s performance in the first few months of the current year is also improving.

Slight progress in operating performance

In fact, income in the first quarter of 2015 was 820 million Euros, down by 9.6% at constant exchange rates (-5.5% in the period reported) compared with the first quarter of 2014. The currency effects are mainly linked to the variation of the dollar and English sterling. The Group’s sales have been affected by a smaller quantity of paper for printing, particularly in the standard set, in a context of significant sales price pressure and following the announcement of Arjowiggins’ restructuring.

Against this, the Arjowiggins business related to their specialities has been particularly dynamic. Packaging business and the activities of Antalis, the branch which distributes office paper as reams and which supplies products for packaging and visual communication, have shown good resistance. The gross operating margin is 36 million compared with 35 million in 2014: the group has benefited from the positive impact of the cost of raw materials and energy, a greater control of fixed costs and an improvement in the product mix. The current operating result amounts to 23 million Euros compared with 20 million in the first quarter of the 2014 financial year. The improvement can be attributed mainly to the productivity gains made during the quarter with regard to distribution and production. Finally, the net income was positive with 2 million Euros against a loss of 6 million Euros in the first quarter of 2014.