Herve Gastinel Proud of Beneteau Group’s Global Growth
CEO Herve Gastinel has steered Beneteau Group to over €1 billion in annual revenue – and is looking to Asia for production facilities.
HervéGastinel was CEO of Beneteau Group from September 18, 2015, until June 2019. A graduate of ENA (National School of Administration), IEP (Institute for Political Studies – Paris) and ESSEC Business School, Gastinel also has a postgraduate Master 203 diploma from Universite Paris Dauphine in financial markets, commodities markets and business administration. In March 1993, he began his career at the Ministry of Finance. In March 1997, he became a technical adviser to the President of the French Senate in charge of Economic and Financial affairs as well as New Technologies. In January 1998, he joined Saint-Gobain as Director of Corporate Planning and Strategy. He was appointed General Manager of Saint-Gobain Terreal in September 2000 and then Chief Executive in September 2001. He served as Chairman and CEO of Terreal from 2003 to 2015 under three leveraged buyouts successively conducted by the investment funds Carlyle/ Eurazeo, LBO France and Goldman-Sachs/Park Square. He owns and races a Beneteau Sense 55, Enigma.
Herve, now that you’re in your fourth year of your ‘dream job’ as CEO of Beneteau Group, is it still what you hoped it would be, considering the pressures of heading a listed company with 7,400 employees?
You have some amazing moments. For example, this year I had an incredible dinner with a very good friend and customer on an MCY 86 in Hong Kong harbour and those are memorable moments I’ll never forget. Such moments really are part of the thrills of leading this company.
Most of it is a dream job, but you also have to do what has to be done and sometimes it can be quite harsh. I stopped some businesses, in the housing business, and also the boatbuilding operation in Brazil because I thought it was the right thing to do. These are tough decisions. It’s not a dream job when you make those types of decisions and you have to lay off people.
But overall, it’s very rewarding if the company keeps growing, if I can feel the momentum and the spirit of conquest, of leadership, an increasing level of expertise. After some years now, it’s still a dream job because the results are there. I can see what I seeded and I can feel the first results of that plan. I find that personally encouraging and that drives me on to the next steps.
How is the Transform to Perform plan for 2017-2020 progressing and are you hitting targets for growth and profitability, your main responsibilities upon taking the role?
All of the key points of Transform to Perform have been launched and are in progress, so I’m happy because I think everybody within the company knows what it means.
From a financial standpoint, we’re also on track. When I arrived, the operating margin was 3.5 per cent. It was seven per cent last year so we doubled. Our commitment is to be between eight-nine per cent next year, so we still have this year plus the next to make the next move and gain these additional margin points.
We also achieved what I was expecting, which was to grow twice as fast as the market. We have done that consistently. We expect to be the same this year, even if the growth is slowing down a little bit. We are still on the same track of gaining market shares with increasing profitability.
The plan is to bring innovation to the top of our list and to grow quickly in size and profitability. So far, Transform to Perform is croissance durable, sustainable growth, and also profitable growth, so we’re on track.
The Group announced €1.287 billion of revenue for 2017- 18, with the boat business making up 85 per cent (€1.094 billion) and the housing 15 per cent. How does the company compare with Brunswick Group as a boating business?
Honestly, we are neck and neck. That’s the only other company with a boatbuilding business of this size, although it’s a bit difficult to read their exact size after they decided to discontinue the larger Sea Ray models.
The big difference is that the vast majority of Brunswick Group’s turnover is in North America, whereas we only have 15 per cent in our domestic market, France. We are more international and they are obviously very strong in their core market, United States, which is a huge market.
Which have been your best-performing boat brands recently?
There have been quite a few, but I’ll highlight three main brands and segments where I’ve seen very nice developments recently. I’m very pleased with Lagoon, of course. That’s one of our major growth drivers and we’re launching a second brand of catamarans, Excess.
The second one is the outboard business. That has been performing very well in all markets: US, Europe, even Asia. I’m positively surprised by the results and we have two very strong brands. Jeanneau is a very strong brand for outboard and more recently Beneteau is catching up.
And Beneteau is probably the third best news among our brands. From my point of view, it was a bit slow when I joined the company, but it’s catching up with a remarkable growth rate, especially for sailboats. Beneteau is really the leading brand in sail boats, with some brilliant new models and more to come, especially now we are relaunching First. We started with smaller models (14-27ft), the Seascape models we transformed and adapted, and in September the First Yacht 53 will debut at the Cannes Yachting Festival.
We’re also working on a First model between 30-40ft, one between 40-50ft, and then two models between 50-60ft, so that’s a complete range that’s changing the image of Beneteau sail boats alongside Oceanis, which remains a strong cruising leader.
We also innovated with the Figaro Beneteau 3 foiler, which has been popular. The Sardinha Cup (in April) had amazing interest from the top sailors in France in particular, so there has been a lot of good news driving the growth of Beneteau.
Carla Demaria’s departure from Monte Carlo Yachts put Beneteau Group in the headlines late last year. Is there an element of disappointment considering her prominent roles within the Group and what used to be a strong bond with Madame Roux?
For sure. As you know, Madame Roux herself pushed for Carla to join and decided to bring the resources needed at that time to launch the Monte Carlo Yachts brand. She trusted Carla very deeply, so much that she also gave her the responsibility of an iconic brand, as General Manager of Beneteau (from 2011-17).
It was a very strong symbol for us having the founding lady of this industry partnering with Carla, who also has an impressive background in this industry, but two strong characters.
The truth is Carla had too much to do, because she was also President of UCINA (Italian Yachting Federation), so was travelling all over the world and dividing her time across too many roles. The result was that she didn’t hit her targets, both for Beneteau and Monte Carlo Yachts.
Then there were some strategic differences between her and us – Madame Roux, the Board and myself. She’s a very determined person and wouldn’t change her way, and her departure became inevitable. Sadly, it all ended in a state of extreme tension.
The good news is she’s moved on to another role with her long term friend Massimo Perotti (Chairman and CEO of Sanlorenzo). I’m happy for her and for Beneteau Group, because honestly it’s better for each party.
You’ve talked about how inspiring it was for you to join a family company. Are you still frequently in touch with Madame Roux and doing your job of ‘shaking the coconut tree’ as she requested?
I like that expression (laughs). Madame Roux now really wants to pass more over to her son, Louis Claude Roux, who is the Vice Chairman [of Beneteau Group’s Board of Directors] and the fourth generation of the family owning Beneteau. She has to force herself not to be involved too much, so she pushes him more. He’s also Chairman of Beri 21, the family holding company.
Now, I’m mostly interacting with him and that’s quite interesting because he’s a young gentleman of 36, so has a different mindset, a different experience in life, and the way to ‘shake the coconut tree’ is a bit different with him. We are more into digital things, shared economy, innovation and technology, which is quite interesting.
How important has it been to upgrade the product range within the Group?
It was one of the major changes I brought in and we’ve changed 44 per cent of boat models since I started. I wanted to speed up the pace of innovation. When I joined, we were launching around 15-20 new boats per year and now we’re between 30-40, so that’s major acceleration. There have been some massive resources invested, but it helps us regain some traction in the market and gain market shares. We’re growing twice as fast as the competition.
In contrast to many yacht builders, you focus on connecting with the bottom of the boating pyramid and expanding it. Why?
It’s a real differentiating factor with most of our competitors. They are all targeting the ultra-high net worth individuals, which is not our case in general. The idea is to focus on segments where we can be better and already are better. Above that, we are ready to access the high-end part of the market with Monte Carlo Yachts or CNB or even Prestige to some extent.
The idea is really to start from young, first time boaters and bring them up across our different brands. It’s also why we added Seascape, a very nice company focused on young sailors, family sailors, accessible sailing.
When I joined Beneteau, I was concerned that the average age of our customers was stepping up, so that’s why it’s very important for me to grow the base of the pyramid, because these are our future high end customers, and they are more diversified.
You always hear that ultra-high net worth individuals are more resilient, that this sector is more resilient, which in my opinion is not true judging by the superyacht business, especially since the last economic crisis. I think it’s better to target a larger, more diversified base of consumers and clients.
How has Beneteau Group been performing in Asia?
We’ve been developing pretty nicely in Asia-Pacific over the past year, with 27 per cent growth. We reached €100 million in sales, which is not bad for the region, because we have no facility here and it’s quite remote.
It’s a decent result as it’s around 10 per cent of our turnover. North America is 30 per cent, about a third, and we have two big plants there. Asia-Pacific is becoming significant and we’re ready to push further here. And I’m still looking for an opportunity to manufacture products in Asia.
It’s only an option because the labour costs in China are more expensive than Poland. It’s not a cheap option any more, although it’s potentially a huge market. It’s just one option. I’m also considering Southeast Asia.
Finally, whenever you leave Beneteau Group, how do you want your time in charge to be remembered?
As a breath of fresh air. In 2015, they were still a bit shocked by the crisis, so it was a bit slow, and I would be proud if they remember me for rejuvenating this old company, bringing new energy, innovation and further growth. I strongly believe in growth because it’s really stimulating and lifts the energy of employees.
The Group has a fascinating story since 1884, with ups and downs, but all in all, it’s kept growing and now generates over €1 billion a year. That was a nice achievement and I think there’s much more to come.
The full interview appears in Yacht Style Issue 47. Email [email protected] for print subscription enquiries or subscribe to the Magzter version at: www.magzter.com/SG/Lux-Inc-Media/Yacht-Style/Fashion/