Tessenderlo: What else can I say?
overview results 2024
Short description
Tessenderlo Group is a diversified industrial group active in machinery, agriculture, food, energy, water management, and more.
Tessenderlo operates worldwide with over 7,000 employees, divided across five segments.
Machines & Technologies includes the activities of Picanol. First and foremost, this means weaving machines, which are among the best in the world. These machines operate using air-jet or rapier technology.
Also under this segment is Proferro, which handles foundry work and mechanical finishing. They produce castings, primarily for Picanol’s weaving machines, but also for other industries such as agriculture, earth-moving machinery, and compressors.
At Psi-control, they focus on controllers, software, and mechanical components. This too originated from services for Picanol’s weaving machines, but they now also serve third-party clients.
In the Agro segment, the group is involved in the production, trade, and marketing of crop nutrients and crop protection products. The companies under this division are global leaders in certain specialized fertilizers, such as liquid and solid water-soluble fertilizers based on potassium or sulfur.
The Bio-Valorization segment involves the processing of animal by-products into products used in the pharmaceutical industry, food, animal feed, fish and livestock feed, energy, biodiesel, and more.
Under Industrial Solutions, you’ll find products, systems, and solutions for water treatment and processing.
T-Power operates in the field of electricity and gas turbines. At the moment, this involves one gas power plant, but they have received approval for a second one. Whether or not it will be built is still uncertain; it will only go ahead if it proves to be economically viable.
Why we selected Tessenderlo
The reason Tessenderlo was selected is also the very one that keeps many people away from the company: CEO Luc Tack.
I’ve been a shareholder of Picanol since 2011 and of Tessenderlo since 2017. However, I’ve been following Tack since 2009, when I read an interview with him in the VFB (Flemish Federation of Investors) magazine. In that interview, he stated that he wouldn’t take a salary until all of Picanol’s losses had been recovered. Even after those losses were resolved, the board of directors had to push him to accept a reasonable salary.
He’s not interested in salary or dividends; he wants to turn his companies into powerful cash-generating machines. After first turning Picanol around, he used the free cash flow generated there to acquire Tessenderlo. His initial investment happened in 2013.
Like Picanol, Tessenderlo was a company with strong core activities but poor management, and money was being thrown out the window. Just like he did with Picanol, he’s now transformed Tessenderlo into a company with a rock-solid balance sheet, where free cash flow is used smartly for new investments.
Among investors, Tack is also known for being not very communicative and for offering little to minority shareholders. He was criticized for this during the first merger attempt between Picanol and Tessenderlo. Apparently, investors would also like to see a dividend. But as long as he continues to deploy capital wisely and delivers strong growth, he can keep as much money in the company as he wants, as far as I’m concerned.