Verisure IPO to Take Place in 'Next Few Weeks,' CEO Says

Bloomberg

Watch Verisure IPO to Take Place in 'Next Few Weeks,' CEO Says - Bloomberg on Dailymotion

Transcript

00:00You'll be Europe's largest IPO in three years. I mean, this is not nothing. It's quite a big deal.

00:04What gives you the confidence to launch such a large IPO in Europe when so many are going to the U.S.?

00:11I think for us, this is, you know, next logical step in the journey.

00:16I mean, we sold our first alarm system 35 years ago. Like, it's been quite a long march.

00:21I took over as CEO more than 11 years ago, and we always knew that one day we'd get to a level of scale,

00:28an international presence, where the natural home of the company would be public markets.

00:34You know, we're now 5.8 million customers, 17 countries.

00:39We're about to open Mexico, as you noted in your earlier remarks.

00:43So we've come a long way from, like, being a small Swedish alarm company.

00:47So we think this is just the logical step next.

00:49Do you have a date for your listing?

00:51Next few weeks.

00:52And what does that change for the investor base going forward?

00:56I think it's going to, in a way, diversify us.

01:00We're going to be exposed to a broad range of Swedish and institutional investors

01:03who hopefully will be with us for the long term.

01:06That's very important because Verisho has always been a long-term growth story.

01:10I mean, if you look at track record, you know, more than a decade of double-digit revenue

01:16and recurring revenue growth, we've actually guided to about 10% annualised revenue,

01:24recurring revenue growth in the medium term.

01:26That's going to continue.

01:28Again, the reason is because there's a basic penetration point.

01:32Penetration of monitored security systems in our footprint is about 4% approximately today.

01:37That compares to the U.S. at 23.

01:40So you look at that penetration and you say, well, there's just a big runway that we can go after.

01:45I mean, there's a number of, you have a number of competitors, right?

01:48There's a number, it's an industry where you have many entrants and many players.

01:52Why do you succeed, actually, in countries that matter?

01:55Like, what's the secret sauce to making it happen?

01:59I think there's three things that are in our playbook.

02:02I mean, the first one, which people often underestimate, is the importance of technology and innovation.

02:07So we're vertically integrated in our own technology stack.

02:10We spent last year about 150 million on our tech programme.

02:15That's about 1,700 staff.

02:18It's engineers, it's programmers, it's designers, it's product managers.

02:23We've got three technical centres.

02:25The largest is in Malmo, Sweden, where we started.

02:28Madrid and Geneva.

02:29What they're basically producing is, we believe, superior solutions.

02:35And, you know, we've got a relative scale.

02:37We're five times bigger than the number two player.

02:40We think, in a way, it makes it easier for us to afford that scale of technology investment.

02:46But is it pricing?

02:48Is it, again, is it marketing?

02:50There must be something that you're doing better.

02:51Well, I think it's better solutions.

02:53And we're therefore able to invest significantly behind those innovations with strong market and support.

03:01We spent about 240 million euros last year on demand creation.

03:05That's about 7% of sales.

03:06That turns into very strong levels of brand awareness across the key countries.

03:12But more importantly, what it means is that we take about two-thirds of the net category growth.

03:17We actually think of ourselves as like the market maker.

03:20And that's complemented with a very strong sales organisation.

03:23So, we have about 12,000 security experts in the field.

03:27I think it's the biggest sales force in Europe.

03:29You've, I mean, you have quite ambitious growth targets.

03:32We talked about the acquisition in Mexico.

03:34How much more acquisitions do you want to do compared to organic growth?

03:38I mean, the last piece of M&A I did was eight years ago.

03:42It's actually not really a core part of our plan.

03:46It's always been a tiny part of the growth.

03:49We view ourselves really as organic growth compounder.

03:51Mexico, actually, it's a bit of an outlier.

03:56We had been looking at Mexico as a greenfield entry.

03:59Already had a team.

04:01Already had leased a building.

04:03And then, you know, JCI created this process.

04:06And we looked at the Mexican asset.

04:08And it was a good quality asset.

04:11Generally, when we look at M&A opportunities,

04:14the companies that we look at, they tend to be less attractive.

04:17They tend to have lower profit.

04:18They tend to have higher attrition.

04:20The Mexican example was a bit of an outlier.

04:23So we've always told investors, you know,

04:26don't view the Mexican move as a change of strategy.

04:29We're still going to be very much focused on organic growth.

04:33So prior to this, you were 26 years at Procter & Gamble.

04:35I was.

04:36So how did that shape the leader you are today?

04:39I think I loved my time at Procter & Gamble.

04:43I loved the talent.

04:45I loved the culture.

04:46I loved trying to serve consumers, right, in a better way.

04:49I've tried to bring that consumer centricity to Verisure,

04:53along with an amazing team.

04:54And actually, I think my P&G colleagues would recognize the P&G playbook in Verisure.

05:01It's about innovation.

05:02It's about building a brand and advertising.

05:04And it's about great sales execution.

05:06And it's about having a great customer experience.

05:09What's been the hardest?

05:10Final question, because I know you have things to do after this.

05:12But I can speak to you for a long time.

05:14Is there, what's been hardest, actually, in preparation for the IPO?

05:18Have you had to change the boards?

05:20You know, have there been changes on the leadership level?

05:23I think, in fact, we've been preparing for this move for a long time.

05:27You know, we've had a lot of publicly traded debt.

05:29You know, I've done quarterly earnings calls for bondholders for a decade.

05:33I mean, I think I've done 44 of them.

05:35You know, we've always tried to prepare to one day be a public company.

05:39And so internal processes and so on, we're always geared at that level.

05:43Remember, although we're a private equity-backed company,

05:46we've had the same sponsor for a long time.

05:49I mean, this has been an 11 to 12-year relationship.

05:51So we've always had a long-term view.

05:54Now, board composition is changing.

05:57You know, we've increased the number of independent directors over the past few years.

06:01You know, we had Andrew Barron, Dominique Renish as our senior independent.

06:06We brought Graham Piquetley, the former Unilever CFO, on board as our audit committee chair.

06:12And we recently appointed Sarah Arval, highly respected Swedish executive and board member.

06:18So the board starts to get more independent.

06:20And obviously, as the institutional investors sell down over time,

06:25the board composition will change further.

Category

Transcript

Be the first to comment

Recommended