2019-08-30

Action !

In “Driving Miss Daisy”, a 1989 American comedy-drama film starring Jessica Tandy, Morgan Freeman, and Dan Aykroyd, the story defines Daisy, a 72-year old widow and her point of view through a network of relationships and emotions by focusing on her home life, synagogue, friends, family, fears and concerns over a 25-year period.

Driving Miss Daisy was a critically acclaimed and commercial success and at the 62^nd Academy Awards in 1990, the film received nine nominations and won four: Best Picture, Best Actress (for Jessica Tandy), Best Make-up and Best Adapted Screenplay.

Cut! 

25 years ago, a Swiss Miss Daisy didn’t exist! It bloomed in 2006, as the result of a graft between Zschokke & Batigroup, and was baptized Implenia, the company with the Daisy logo. 

Implenia really flourished under former CEO Tony Affentranger & his crew, the driving force behind the merger & the expansion abroad into Norway, Germany, etc.  It was “Working on the highway” (Bruce Springsteen) forcefully and, similar to the movie, Swiss Miss Daisy suffered a car crash and lost some petals (the stock lost almost 50% last year).

Implenia Board of Directors do not deserve flowers (daisies?) for the way they handled the end of an era that necessitated some changes in the organisation. Nevertheless, the new crew, under the helm of CEO André Wyss (former Head of Novartis Operations) & CFO Marco Dirren (former CFO of Swiss Railways Infrastructure division & Compass group in London) took over a short while ago.  I met both gentlemen recently. From what I can see, they appear to be smoother drivers and after some major repairs (hefty provisions made in FY2018 & CHF 20 mn strategy implementation costs in 2019), Swiss Miss Daisy is on track to deliver a decent operating profit in 2019, a year that CEO Wyss labelled as a “transition year”.

What about Swiss Miss Daisy’s short-term future? Well, first of all, expect a better management of risk, through Value Assurance.  Thereafter, through a complete ERP & Building Information Modelling roll-out and a new organization & operating model implemented, the group will have more clarity for all stakeholders.

Last but not least, the valuation is undemanding with an EV (Entreprise Value) of CHF 400 mn and Owners’ earnings (EBITDA ./. Maintenance Capex) of CHF 80 mn (after strategy implementation costs). In my view, the intrinsic value lies at least 50% above the current level.

As in the movie, when grumpy Miss Daisy took the map, the driver just said:

“Well now, Miss Daisy you got the map”.

In other words: if you’re the navigator and give wrong directions, you can’t really blame the driver for getting you lost.

Bon voyage Swiss Miss Daisy, but do drive carefully now!