Let's talk about Transformation
Stéphane Courgeon, Journalist: "Hello and welcome to Rioz, in the Haute-Saône region of Eastern France, where we are meeting company on Olympic form. Today, Abéo is a world reference in sport and leisure equipment, gym materials, climbing walls and locker installations. Abéo is even going to be one of the official suppliers for the next Olympic Games in Tokyo, like it was in the past for London, Rio and Brazil this time. And yet, in 2009, Abéo used to make ¾ of its turnover in France. 10 years on, the trend has been completely reversed, as the group closed 2019 showing 77% of turnover produced internationally.How has such a transformation been possible?
I am just about to ask Oliver Estèves that question. He is the MD of Abéo, who took over the responsibility of the company almost thirty years ago.
Hello Olivier Estèves!".
Olivier Estèves, Managing Director:"Hello!".
SC: "Thank you for welcoming us here, to Rioz, at your company headquarters".
SC: "Tell us about 1992, when you took over the reins of the company, at a time when the company's business was mainly concentrated on the locker installation market for local authorities. Was that the first reason behind your deciding on an international strategy?".
OE: "Yes, that was effectively the first reason that we went in that direction. We were reliant on a system, the electoral system, and that was very uncomfortable to manage".
SC: "So would you say that in the end you implemented this strategy because you had to?".
OE: "We were a somewhat obliged to, yes. Somewhat obliged but, beyond that, we had the feeling that we were in a slightly restricted market, a niche market. It is a market comprising several million or tens of millions of euros in France and, if we wanted to develop the company, we were going to have to look for sources of growth elsewhere. And we found this source of growth quite naturally in the world of sport".
A new playing field
SC: "How do you choose these markets? Do you know which direction you should go in?"
OE: "We were in the world of locker installations and we were convinced that we had to change course and move out of the wings at last into sport training, and so we found an opportunity to get a foothold on this market in 2002. At that moment we recognized that we had the sufficient range required to approach international markets".
SC: "How do you select the companies you acquire, because isn't it mainly based on external growth, markets and companies?".
OE: "I'll correct you just a little here if I may, our growth model, our strategy, is in fact based on external growth".
SC: "Yes of course".
OE: "But we mustn't neglect organic growth either. And when we make an acquisition, we try to have the new company achieve organic growth in the following years".
SC: "How do you identify these companies?"
OE: "We are on a niche market where all the players can be easily identified at the end of the day. They are mainly small- or medium-sized companies, family-owned companies, and they are companies with a hold on the local market".
Collaborative and local decision-making
SC: "Today you have around 20 brands in your portfolio (21 brands in the group). How are you organized. How have you organized the group to manage as well, and as efficiently, as possible?"
OE: "Our organization is based on two principles: the first is collaborative decision-making, arranging things so that decisions are taken by a group made up of people who have as much expertise and know-how as possible. And when you work internationally you will require governance units which work using this international dimension. The second principal is local decision-making, meaning that we make sure that decisions are made as closely as possible to the market and the final customer".
SC: "Crédit Mutuel Equity has been working alongside you since 2009. What were your criteria at the time for choosing your partner?"
OE: "The first criteria is that we share values with the men and women that we meet, and that is fundamental. A stakeholder on your side has to be compatible as far as that is concerned. The company has its values, you lead and then your team implements things".
SC: "Would you say that it adds another viewpoint?"
OE: "It adds a lot in the way of, that is to say, sharing experiences is something fundamental for a company in a period of strong growth like ours. There are constant queries such as:
At the end of the day, where are we really?
- Is our strategy still right?
- Are we rolling it out in the right way?
- Couldn't certain people in our environment be useful for helping us with a tricky situation, analyzing difficulties or could they help us plan for the future more easily?".
SC: "What advice would you give to a company owner who would like to implement an international strategy, like you have been doing so well for over 10 years now?"
OE: "Firstly you have to prove that you are pragmatic and also humble, because international business is a constant discovery. You have to give clear objectives, of course. You have to focus on them and accept you're going adjust your ways of reaching them. You can never be convinced of what is really the case, and while that has always been so for your own market, it is even more true when you start to do business abroad".
SC: "Thank you very much Oliver Estèves".
OE: "You're welcome".