Turning around fortunes

The Canmaker
August 2006

New management, higher can prices and a series of acquisitions are placing Impress back on track. Mónica Higuera reports

The agreement to purchase aerosol manufacturer USC Europe and food canmaker May Verpackungen by Impress is significant for two reasons. They willl be the biggest acquisitions that Impress had made since it was created almost ten years ago, adding $295m in sales. And the deal will probably make Impress the largest manufacturer of aerosol cans in Europe.

The move, along with Impress's earlier takeover of one of Europe's two plants with DWI food can manufacturing facilities (and with key customers such as Masterfoods and Premier Foods), must have been a satisfying result for chief executive Francis Labbé, who has been presiding over improving results since he took the helm almost three years ago.

Commenting on the deal, vice president of strategic development Richard Moore said, "The Impress-USC Europe acquisition is a very good fit because, in the aerosol sector, Impress will be extending its geographical coverage and becoming a truly pan-European player in this market, including eastern Europe. In food cans, the May facilities in Germany and Denmark fill a gap in our coverage of the northern European region and allow us to serve customers from highly efficient plants in this important market area."

Since 1997 Impress has made a number of acquisitions which have enabled it to realise synergies and raise its market share in certain niche areas. The company claims to be the world's leader in seafood cans, and Europe's number one in paint and coatings, and specialised consumer products such as milk and infant formula powders.

When London-based private-equity fund Doughty Hanson took over the European food and general canmaking interests of Pechiney and Schmalbach-Lubeca to form Impress, it planned to float the company in three to four years.
Today, and following an unsuccessful attempt to sell Impress at a satisfactory price at the end of 2005, more cash is being injected into the company.
Insiders suggest two key factors have been instrumental in turning around the company's fortunes: continued margin improvement through price recovery, and new management.

Labbé (pictured below) joined at the end of 2003 from Rexam's plastics and glass division, succeeding Dominique Damon. He's said to have applied a cool analysis to restructure the company while increasing its growth potential.
His strategy has produced results, including those at the bottom line. In 2005 Impress was back in the black with a net profit of 11.6m euros (US$14.7m), a first since 1998, on annual sales of 1.33bn euros ($1.7bn).

Being financed as a leveraged-buy-out, the original acquisition was accomplished mostly through debt, but Impress has cut debt from more than 600 million euros in 2000 to 394m euros in 2005.

The company has also juggled various loans to incrementally reduce debt while at the same time being able to finance a range of acquisitions. This has indeed been the strategy of the company - to streamline its operations in order to align capacity with demand, while looking for business opportunities with growth potential.

Sales in 2006 are forecast to reach 1.6bn euros ($2bn), mainly due to the addition of a series of companies to its portfolio: USC Europe; UK-based Alcan Packaging Sutton; Poland's largest supplier of general line and aerosol cans, PAK; Clover Leaf's sardine canmaking operation in Canada; and most recently, the signing of a jointventure agreement with Global Investment, a Russian food and aerosol canmaker.

And there are more acquisitions in the pipeline, which are expected to be funded by this year's recapitalisation.

In addition to streamlining its existing operations, Impress has dumped a number of assets in the last couple of years. These include its metal lithography and battery jackets plant in Belgium, sold to Indian canmaker Shetron; an Italian metal printing operation at Magenta sold to Metalprint; and the closure of its Grantham, UK, food can plant.

Along with a move of its headquarters from glitzy Schiphol Airport at Amsterdam to Paris, the leaner and meaner Impress looks in better shape than it has for many years.