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December 1, 2009updated 12 Apr 2017 4:29pm

Ready for 2010

Jason T Hesse speaks with Jean-Marc Mignerey and Ccile Andr about what 2010 holds for Europes biggest equipment finance company

By Jason T

Jason T Hesse speaks with Jean-Marc Mignerey and Cécile André about what 2010 holds for Europe’s biggest equipment finance company

Jean-Marc Mignerey, SG Equipment Finance’s (SGEF) CEO, sees three growth engines for his business in the future: the US, Brazil and China.

“Our rationale is our international vendors – we offer them one of the most complete networks that enables us to accompany them throughout the world,” he explains.

Although SGEF is a fairly new entrant into the US market, having set up its business there at the end of 2007, it is already ranked 59th in terms of new business volume (NBV) – a strong result, with $213.6 million (€143.8 million) of NBV last year.

“We wanted to grow our equipment and vendor finance business until we become a European leader with worldwide presence – we’re not too far from our aim,” Mignerey says.

In terms of equipment finance specifically, SGEF is already ranked number one by Leaseurope, with €10.3 billion NBV in 2008, although BNP Paribas Lease Group’s merger with Fortis Lease will likely change this in 2010.

“At the end of the day, we don’t write volume for volume’s sake. Next year we will focus even more on profitability rather than volume. Profitability is more important to us, despite our continued growth,” Cécile André, SGEF’s deputy CEO, adds.

Mignerey adds: “We have never focused on volumes, but on profit.”

2010 will certainly be an important year for SGEF, as it continues to focus on a range of sectors across Europe. André points to the hi-tech and agricultural sectors in particular, which have bucked recessionary trends: “We managed to grow our agricultural business in a number of countries, particularly in the CEE region, but also in more mature markets such as the UK and Germany.”

Mignerey believes 2010 will bring the start of the end of the recession.

“It will take years before we regain the volumes of pre-recession, but I believe that in the course of 2010 we should see a return to ‘normal’. The industry’s biggest problems will be behind it during 2010,” he says.

One of SGEF’s benefits, he says, is to be part of a large bank, Société Générale. He believes this has given SGEF a level of continuity for its funding lines which customers have recognised.

“Vendors are looking for ‘safe’, reliable partners – many have been affected by a lack of funding by their financing partners, so we’ve seen strong demand for our services this year. We’ve benefited from the attention of customers looking for security, and have launched a number of new international vendor operations in 2009,” Mignerey says.

The vendor channel is very important for SGEF, making up 39 percent of business, followed by the direct channel (30 percent), banking network (27 percent) and intermediaries (4 percent).

In order to manage the business more efficiently, André spearheaded the overhaul of SGEF’s management information system, bringing it in line with Basel II requirements.

“We’ve improved our in-house management information system and installed a new customer relationship management system. In addition, we are refining our business line application lifecycle management by setting up a new common treasury/ALM system. This is giving us the necessary tools to meet Basel II requirements,” she explains.

André believes that with the right tools in place, SGEF is now in a position to scale up the business across Europe and internationally, working closely with Société Générale.

“We do need the bank for support – we are well integrated into the bank, and this has given us a centralised, global and well-supported organisation to meet the challenges of 2010,” she says.


 

SG Equipment Finance’s leaders

Jean-Marc Mignerey – CEO

Mignerey started his career in the banking sector in 1976, before joining the specialised financial services department of Société Générale in 1982.

In 1989, when SG merged all of its subsidiaries specialising in consumer and business finance, he set up the vendor finance business.

In 2001, after SG acquired Deutsche Bank’s financial services, Mignerey was named MD of GEFA (SG Equipment Finance Germany) before becoming CEO of the newly-created SG Equipment Finance.

Mignerey has been a board member of Leaseurope since 2002, was vice-chairman and then chairman of Leaseurope until October 2007. He remains on the board today.

Cécile André – deputy CEO

After graduating from HEC in Paris and getting her MBA from Wharton, André started her career as a consultant at Bain & Company and moved to McKinsey & Company in Asia.

In 2000, André joined Société Générale as deputy strategic management director, where she looked after the acquisition of Deutsche Bank’s financial services in 2001 and then Elcon in 2004. After working for SG’s investment bank arm, André finally joined SG Equipment Finance as deputy CEO at the start of 2009.


Latest results

In the third quarter, SG Equipment Finance experienced a slowdown in activity, seeing new financing fall by 19 percent year-on-year, to €1.7 billion.

According to the French lessor, the slowdown concerned most of the regional operations. In Germany and Italy – two of SG Equipment Finance’s key markets – new financing fell by 23.2 percent and 32.4 percent respectively.

However, in France the lessor only experienced a small decline of 1.6 percent, which “testifies to the group’s constant commitment to support the French economy”, it said.

At €19.1 billion at the end of September 2009, outstanding loans – excluding factoring – continued to grow, by 3.6 percent, against the same period last year.

 

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