"Saur will embody a new business model which will be based on a profitable and responsible growth"
Saur continues to focus on purchases and acquisitions as the basis of the company’s internationalisation strategy, where the concession market and industrial water are key cornerstones, and the Iberian Peninsula a hub of operations.
Before joining Saur as CEO in 2019, Patrick Blethon held management positions for a long time at U.S. company Otis, world leader in the manufacture and maintenance of elevators. After a radical change to the water industry, we could say he continues to like to rise. In little more than a year, the French group has successfully overcome the pandemic, has consolidated its industrial water business with the acquisition of Nijhuis Industries, and has made the podium of water operators in the Iberian Peninsula with the purchase of Portuguese company Aquapor. Blethon looks to the future with optimism, and expects Gestagua to be one of the pillars of the growth sought by EQT since their 2018 investment. He shares his thoughts with us in this interview.
Question: What is your assessment of your first year as CEO of Saur?
Answer: Undeniably, this has been a year as difficult as it was promising for the future of our group.
As everyone else, we have had to face the Covid-19 crisis. For our clients, due to the nature of our activities, we have been on the front line to guarantee the continuity of water and wastewater services.
Even so, it has been a challenging year, but one of great achievements of which I am very proud!
First, we established a new strategic framework based on 4 pillars: reinforce our competitiveness and our positioning in the French market, our historical market; accelerate the roll-out of our industrial roadmap; growing in key geographies and consolidate our Engineering activities.
In this regard, we acquired strong companies such as Nijhuis Industries, Unidro and Econvert to build an international industry platform and consolidate our expertise and our industrial activities. We also acquired Aquapor, a leading player in management of municipal water concessions in Portugal, a real game changer for us that enabled us to accelerate the internationalization of Saur.
We also won major new contracts in France and Saudi-Arabia (in the North Western Region that is approximately the size of Italy!).
We launched the NextGen’Voices, a new program dedicated to millennials, to continue building with the future generations of Saur’s leaders and the Executive Committee Members a winning, meaningful and sustainable company.
And last but not least, we launched the reorganization of our activities in France to support our strategic objectives.
One year after my arrival, I can therefore say that 2020 has been a decisive year for Saur. Once again, we have demonstrated our unfailing commitment in times of collective challenges, all the while opening a new page in our Group’s history which portends a sustainable growth of our activities in the coming years.
Q: What trends do you see in public-private participation in water services and infrastructures around the world?
A: The main issue for me can be summed up in one word: cooperation. National and local authorities cannot do without the expertise of private players, and private players need local authorities to push them to constantly improve with a view to meeting the challenges of sustainability and ecological transition on the field.
Basically, whether we are in systems of delegated public service or direct public management, the issue remains the same: mobilizing the best expertise to meet water challenges. In all the countries where Saur operates or wishes to operate, we therefore follow a single guideline: providing the community with what it needs in order to better serve their expectations, and better address the specificities of the territory.
Can you comment on the performance of the group in the Iberian market during 2020?
The Iberian Peninsula is the group's second largest market, after France, where there are great opportunities, and where we are looking forward to seizing each of them. we are focusing our efforts to reinforce our positioning. Firstly, thanks to organic growth with new concessions and new contracts, which we are already looking for, not only in large cities but also in small and medium-size towns. Secondly, external growth will come with acquisitions in Spain, Portugal, and Italy. As things stand, Spain is at the heart of our objectives in terms of development around the Mediterranean: the objective is to double our revenues there over the next four years to reach 200 million euros.
How do you assess the performance of the public-private partnership in the Empresa Mixta de Aguas de Las Palmas, EMALSA?
As it faces an unprecedented challenge to modernize its infrastructure, the city of Las Palmas de Gran Canaria has clearly recognized the magnitude of what lies ahead. The € 700 million investment plan announced by the mayor as part of the 20-30 Green Pact equals the significance of the challenge and should serve as an example for many territories with similar problems.
Spain is central to our development goals: the aim is to double our income in the next four years
Clearly, the case of EMALSA is an example of the potential and value of close public-private partnerships in the field of water management. It is towards this kind of approach that I want us to go as water companies and communities, hand in hand.
With the recent acquisition of Aquapor, you have become the third largest operator in the Iberian Peninsula. What will the Portuguese company contribute to the Saur Group?
This operation represents a turning point in Saur's internationalization strategy, with a €120 million gain in revenues and the integration of 1,300 new employees mobilized to serve 1.3 million people. It is also another decisive step in the deployment of our roadmap launched in 2020, aimed at making the Group a leading pure player of water which stands for water, and dedicated to ecological transition in all territories. By bringing together within the same group Aquapor in Portugal, Gestagua and Emalsa in Spain, Saur has become the third largest operator on the Iberian Peninsula with revenues of around €250 million.
"By bringing together within the same group Aquapor in Portugal, Gestagua and Emalsa in Spain, Saur has become the third largest operator on the Iberian Peninsula with revenues of around €250 million"
Q: In 2019, Saur seems to have changed its strategy in Spain with the arrival of Rogério Koehn –with a long track-record and extensive knowledge of the water sector– as the new CEO of Gestagua. What is your opinion on these changes made in the management of Gestagua and in respect of the challenges faced by the company during the COVID-19 crisis? what would you expect from Gestagua in 2021?
A: For more than 30 years, Gestagua has been exploiting the full water cycle, based on their experience and technology and on the strong commitment of a personalized customers satisfaction. Rogerio Koehn has volunteered to accompany Gestagua and Saur to meet the challenges of the water sector that await us: bringing together innovation and ecological commitment in the service of the quality of service provided to citizens. I have full confidence in his qualities and his sense of the field.
2020 was the year of a new beginning for the Saur Group and for all its business units, including Gestagua which occupies a prominent place in our new roadmap. This is because it is a company with proven expertise, and because Spain is a very promising market for many reasons: the forecasting of a possible concentration of operators, the tendering of several water concessions due to the expiry of their contracts, the greater specialization of the industrial water market, the synergies of the Latin American market with the Spanish market and the acceleration of digitalization.
The Covid-19 crisis and the way Gestagua dealt with it confirmed my beliefs: the team is able to meet all the challenges to grow while resisting troubled times.
"2020 was the year of a new beginning for the Saur Group and for all its business units, including Gestagua"
Q: In recent months we have seen significant additions to Gestagua's Board of Directors. What is the purpose of incorporating these new members?
A: Gestagua bases its actions on a commitment to good management, customer satisfaction and continuous improvement. The management team, high qualified and trusted people, reflects this engagement to keep serving more than half a million citizens in more than fifty municipalities. Gestagua is integrated into the social and economic life of the municipalities served, of which we are a reliable partner for public services.
All the decisions taken by the board aim to be the most appropriate to ensure that action in the field meets the expectations of local communities and the needs of the territories.
Q: In 2021, we are optimistic about the EU recovery plan funds for Europe. What impact do you think they will have on the water sector?
A: I am a convinced European, and Saur is by definition a European Group with regards to its ambition and organization. From the outset, we have welcomed the ambition of the Recovery Plan, which responds to our challenges: to finally reconcile economy and ecology in order to build a sustainable and desirable future for the generations to come.
Water companies and local authorities must seize the historic opportunity presented by this plan to invest massively, whether in infrastructure renovation to limit network losses, or in the creation of industrial water treatment platforms with sufficient performance to both restore and defense the European productive fabric while meeting sustainability challenges.
Q: What is Saur's position concerning the digital transformation of the water industry?
A: Digital transformation for the sole purpose of digital transformation does not make sense. This is true for any company in general, and even more so in our field of activity. The digital transformation must have a meaning for our activity and represent more than just a proof of modernity.
I believe innovation and digitalization will revolutionize the performance of water and wastewater services. The issue at stake is much more than just a budgetary one. It is a matter of standing for water resources at a time when human activities, pollution and climatic events threaten it as never before.
Digital transformation is embedded in the transformation of our activities. For instance, we have set up a partnership with Capgemini, through the creation and deployment of a "Data & Digital Center", a digital factory dedicated to the industrialization of innovation opportunities in the digital and data fields.
Ultimately, we want to use the data to reduce water loss as much as possible from one end of its cycle to the other and we want to detect problems on the networks that could threaten it. There is a real business and responsibility issue about protecting water resources for future generations.
Can you describe the importance of the Nijhuis acquisition and the creation of a new industrial division in the group?
"I believe innovation and digitalization will revolutionize the performance of water and wastewater services. The issue at stake is much more than just a budgetary one"
Nijhuis Industries, a leading Dutch group specialized in advanced industrial water and wastewater treatment solutions with a worldwide footprint, will bring Saur’s Industrial Water activities to a step-changing level with a complete portfolio of advanced technologies and a strong growth profile.
This new Industry platform, resulting from the combination of Nijhuis Industries with Saur industrial businesses, namely Saur Industries, Unidro and Econvert, and located outside of France, will become a leading player in Industrial Water sector with a complete range of technologies and a capacity to serve its customers worldwide.
I am convinced that only a clean industry can meet the ecological and reindustrialization challenges that are at the heart of the current concerns of our territories. And I want Saur to participate, together with industrialists and local authorities, in meeting the challenge of the European industrial autonomy.
"I am convinced that only a clean industry can meet the ecological and reindustrialization challenges that are at the heart of the current concerns of our territories"
Q: What is your opinion on the merger process between Veolia and Suez, and what role may Saur play if water assets are sold?
A: It is not up to me have an opinion on this issue, the matter is in the hands of the shareholders of both groups. In any case, I can say that I understand the desire to create a world champion for ecological transition in the current context.
Anyway, it is certain that the situation between the two market leaders in France is set to create international opportunities for our Group over the next few years.
Undeniably, we embody another type of company, essentially focused on a relationship of proximity and trust with our partners, and with the sole concern of providing the best possible service for the benefit of the needs of the territories and water issues thanks to our know-how and advanced technologies.
We intend to be extremely responsive in exploiting this potential and propose to our customers innovative solutions which meet competitiveness, performance and service quality requirements, and thus become the most attractive, innovative and responsible global player in the water sector.
Q: Finally, what are the next steps in the transformation that Saur is undergoing since the acquisition by EQT in 2018?
A: The challenges of the water sector call for us to increase our commitment towards a sustainable growth. The group is transforming itself as it pursues a strong and ambitious objective: champion and support the ecological transition of our customers in all territories.
In terms of strategy, we wish to refocus on our added value, around 4 areas of development in the service of a long-lasting and responsible growth: Water Management, Industrial Water and Engineering and Works. With the support of EQT, which is investing heavily in our development, we have the means to create a growth model that creates value for all, and for a long time.
Tomorrow, Saur will embody a new business model which will be based on a profitable and responsible growth to create a positive impact for all our communities and our planet earth.