Message from the Chief Executive Officer & from the Chairman of the Board of Directors

Patrick Ballu, you appointed a new Chief Executive Officer from outside the family a year ago. What is your assessment of the new situation?

Having a Chief Executive Officer who is not from my family is a profound change, but it avoids mixing professional and family relationships. Yves Belegaud brings us his fresh and experienced perspective, both in industry and in the agricultural sector, with which he has proven affinity. I like his way of managing: he’s a decision-maker, but at the same time friendly and consensual; he also knows how to listen and how to make our teams work in a network. In this period of a pandemic and significant transformation of our agricultural spraying activity, he is showing courage and is proving himself capable of quickly embracing major issues. It’s impressive: he’s been so quick to adopt our DNA and embrace our family business values that you could be forgiven for thinking he’s been with us for many years. Lastly, while remaining the Group’s lead decision-maker, he keeps me regularly informed of the direction he wishes to take, and does not hesitate to ask me for advice, taking advantage of my experience and knowledge of our business.


Yves Belegaud, what has impressed you the most since your arrival at EXEL Industries?

I knew Patrick Ballu’s reputation as a captain of industry from afar. On closer inspection, this family business has achieved an extraordinary track record of sustained growth since the 1980s, entirely self-financed. Managing a group with such a track record is reassuring, but it also makes for a lot of pressure. It’s no secret that I’m a believer in rigorous management of spending and investment. I also like the leanness of the holding company, focused on the big picture, with a small headcount. I was also impressed by the agility in decision-making, an asset for the Group’s growth, and the teams’ ability to adapt to the COVID-19 crisis.

Patrick Ballu, EXEL Industries is a family-owned group, but nevertheless publicly traded. Why continue with a free float of just 16%?

In 1997, we went public to be able to raise capital quickly to finance further growth. Indeed, since 1980, through acquisitions and organic growth, we have doubled our sales every six years – six times in a row! Thanks to the confidence of our bankers, we were able to take on a lot of debt to acquire companies that were sometimes loss-making, but the rapid recovery in their profitability and the sharp drop in their working capital requirements has consistently allowed our cash position to become positive again. All things considered, this know-how meant that we never needed to increase our capital over that period. So why stay public with a free float of just 16%? It’s true that the disclosure requirements imposed on our business and earnings may have prompted a desire among some new competitors to enter our highly specialized and, in principle, profitable businesses. That’s one of the drawbacks of being public. At the same time, the stock market requires greater rigor: precision, compliance with schedules and procedures, risk management and internal control, and more. On top of that, at the time of the IPO, I was personally able to give shares in the Group to all our employees so that they could feel like the owners of the public Group. The synergy and sense of belonging has been tremendous. Lastly, to improve our governance, we have brought two independent directors into the Board of Directors: one chairs the Audit Committee and the other chairs the Remuneration and Appointments Committee. They enrich the Board with their approaches, ideas and personal experiences.

Yves Belegaud, how can you extract synergies within a group that is a federation of autonomous companies?

First of all, you should bear in mind that EXEL Industries is a holding company. Each activity is managed by a responsible CEO. The holding company provides advice and manages some cross-cutting functions such as legal, consolidation, financing and financial communication. The holding company also manages industrial property, which is one of the Group’s important levers. It helps the activities to grow and promotes the Group’s development. My role is to initiate or carry out certain projects such as the transformation of the agricultural spraying activity, which is entering its final phase in 2021. We are taking advantage of this to optimize the support and purchasing functions. But I have to take into account the specific nature of our organization, because on top of having quite different business lines, we are highly international. Finally, we are setting up a Group policy on security and internal control. A little time and accomplishment can make for significant synergies.

Patrick Ballu, public opinion is highly critical of agricultural spraying. What are your arguments to defend it?

The issue goes beyond agricultural spraying; what’s really at stake is crop protection. Our sprayers make it possible to apply products available to farmers to protect and care for plants (against pests, fungi, weeds) and to feed them (nitrogen, regulators, etc.). Let’s call them medicaplants, because they treat plants, not pesticides (which is an Anglicism). Like medicines for humans, medicaplants are essential to make crops healthy and productive. We know exactly how to apply the right dose, in the right place and at the right time, whether chemical or biological. Our new technologies, with vision and artificial intelligence, will soon make it possible to reduce quantities to very small doses by targeting only the strictly necessary areas. I don’t believe that all-organic farming can feed the world. Nor do I believe in a brutal ban on all products currently in use. Let’s apply the long-term approach of farming to testing. We will always need time to anticipate new techniques ahead of the trends. Our sprayers will be more precise, more technological, more powerful and always ready to react as soon as a health risk appears. They will therefore be more sophisticated, adding more value.

Yves Belegaud, you are transforming the agricultural spraying sector. How far have you come?

EXEL Industries has been the leader for many years, with a multi-brand policy that has paid off. Faced with competition, full liners and long liners, we needed to pool our offer by creating skills centers that improve our industrial productivity. We are renewing our approach to direct marketing. We have contact with almost half of French farmers. We must make the best use of this potential and improve the service to make them want to buy equipment from the EXEL Industries Group. And we have specific ideas for improving our overall offering, whether it be financing or services. Creating skills centers enables us to strengthen our capacity for product innovation while maintaining each brand’s specificity. Our recognition extends far beyond France. As a spray liner with BERTHOUD, EVRARD, TECNOMA and MATROT from France, and with acquisitions such as HARDI, AGRIFAC and ET WORKS, we deploy our machines worldwide. We also occupy a strong position in viticulture/arboriculture, especially in France, and are currently revisiting our offer. The French sprayer fleet has an average age of ten years, and a lot of it needs to be replaced. Technological solutions are changing, as are regulations, so I am confident about the level of future demand.

Patrick Ballu, on several occasions, you have mentioned the Group’s acquisition-led growth. Tell us why are you looking into a fifth business line.

We specialize in three complementary sectors, which have different annual and business cycles. For example, agricultural spraying was doing well when industrial spraying was struggling. Now it’s the other way around: industrial spraying and garden watering and spraying are doing nicely, while things are tougher in agricultural spraying. Having at least three feet on our stool makes us stable, having one more will make us even more so. That is why we are seeking to strengthen each of our business lines, for example with the recent acquisition of iNTEC, complementary to SAMES KREMLIN, or the probable addition of other garden watering and spraying products. On top of that, we are looking into a possible fifth business line with different cycles and markets, but nevertheless matching our skills and our international objective.

Patrick Ballu, Chairman of the Board of Directors Yves Belegaud, Chief Executive Officer