The value of a company What is it that sets the value of a company in the food supplement industry? Which are the reasons why this sector is witnessing an ever-growing number of takeovers or mergers? Interview with Ludovic Beaulieu, Partner in the investment banking firm Oaklins France, where he is one of the Well-being and Nutrition experts but also a fine connoisseur of the ‘eco-system’ of food supplements through a ‘vertical’ approach to health. Actif’s Mag: Which are the reasons why the food supplement sector is attracting an ever-higher number of investors? Ludovic Beaulieu: There are several factors explaining the interest in food supplements. On the one hand, we are talking about a high-growth market. In France, but also in Europe, the food supplement market is lagging behind as compared to the United States. And I am referring to the US market be- cause unarguably it is a pioneer in this sector and because the functional dimension of food supplements has present- ly become an essential factor. On the other hand, there are very few barriers to the entry of food supplements—that means that product launches can be very quick, with a rapid pre-emption capacity if referring to the active ingredients offered by ingredient suppliers. All the more so when com- pared to pharmaceuticals, where drug developments are lengthy and expensive, or medical devices, whose regulation seems to have become even stricter in the last weeks. Finally, This food this food supplement sectors stands out through exceptio- supplement sectors nal gross margin rates of over 70% and even of over 80% with stands out through some brands. exceptional gross Actif’s Mag: Are these investments a worldwide spread margin rates of over phenomenon or is it limited to certain geographical DID YOU SAY 70% and even of areas? EBIDTA? EBIDTA refers to the profits of over 80% with some Ludovic Beaulieu: Western consumption models are being a company before interests, brands replicated in India and China. We are therefore witnessing taxes, depreciation and the migration of French practices towards these geographi- amortization. cal areas. Sport was a driver that paved the way for the pene- Ludovic Beaulieu tration of food supplements in Europe. Also, it is sport that Oaklins France allows brands to penetrate certain markets. We are currently working on a project that will support the entry of a sports brand into the Indian continent. Actif’s Mag: Arethere any common grounds for the investors that ‘enter’ this food supplement market (i.e.: funds, pharmaceutical or agri-food groups)? Ludovic Beaulieu: Investment funds are entering these markets because, apart from start-ups, the companies here are SMEs that are profitable, with growth strategies that tar- get the improvement of margins and profitability. The goal of the investments made by such funds is to create synergies xoB eht fo tuO — xoB eht fo tuO- 281 -