(News Bulletin 247) – The State shareholder is present in the capital of more than 80 companies including 11 companies listed through the Agence des participations, such as EDF, Thales, Engie or ADP to name but a few. And over one year, the portfolio of listed holdings of the State Holdings Agency did better than the CAC 40.

The Court of Auditors has devoted numerous reports to the management of the State in listed companies. In one of these documents, dating from 2017, the famous institution wondered: is the state a good shareholder?

The performance of the portfolio held by the Agence des participations de l’Etat (APE) can give a small idea, even if it should be remembered that the State is more indirectly a shareholder of other groups via the Caisse des dépôts and Bpifrance. .

11 listed companies in the State portfolio

The State Participation Agency embodies the State shareholder and recalls that it is an “equity investor in companies deemed strategic by the State, to stabilize their capital or support them in their development or transformation” . The APE is under the supervision of the Minister of Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire.

It should be recalled that the State holds, through the State Participation Agency, stakes in 11 listed companies (EDF, Engie, Eramet, ADP, Air France – KLM, Airbus, Safran, Thales, Renault, Orange and FDJ). As of February 23, the latest publication of the APE, the value of these 11 listed companies is estimated at 92.65 billion euros – a figure which falls to 48.42 billion if we exclude the State’s share in EDF.

How has this portfolio performed over one year? On February 23, it appreciated by 47.46%, where the CAC 40 only rose by 7.99% and the SBF 120 by 6.81%.

A large part of this outperformance must be put into perspective because it is explained by EDF. Over one year, the value of the State’s stake in the energy company has thus climbed by nearly 50%. A large part of the rise in the share price, ie 30%, is explained by the simplified takeover bid (public purchase offer) on the EDF shares remaining in circulation.

Weakened by an abysmal debt inherited from risky investments over the last decade, the energy company was going through a difficult time. To guarantee the future of EDF, the State announced last July a simplified takeover bid for the shares of the energy company that it did not own. The goal is to withdraw the company, which was partially privatized in 2005, from the financial markets with a lot of communication. Seventeen years later, small shareholders who subscribed to EDF’s IPO at 32 euros per share will remember their investment for a long time. The state offered them 12 euros per share to bring EDF back into its fold.

Excluding EDF from the portfolio, the listed portfolio of the armed wing of the State shareholder posted a performance of 13.95%, still superior to the two leading indices of the Parisian market (+7.99% for the CAC 40 and +6, 81% for the SBF 120).

This superiority of the State’s portfolio compared to these two indices is partly explained by the stock market rise of companies linked to defense and aeronautics, Thales and Safran in the lead. The Ukrainian conflict has put these defense stocks back on the radar of investors, previously neglected by operators more sensitive to ESG themes. Thales saw its share price jump by more than 50%, ending 2022 at the top of the CAC 40 when Safran appreciated by 15.60%.

Only Air France-KLM disappointed over the period with a decline of 25%. The title experienced some market turbulence after the announcement in May of a capital increase allowing it to strengthen its equity to the tune of more than 2 billion euros.

A fine performance over three months, driven by Air France-KLM and Eramet

If we look at the shorter term, the “EDF effect” has faded, the title now evolving not far from the 12 euros proposed by the State to withdraw it from the rating. Over six months, the State’s listed portfolio rose by 12.95%, doing almost as well as the SBF 120 (+14.00%). Excluding the energy company, the listed portfolio posted respectable performances over the period (+11.92%) in comparison with the star indices of the Paris market, including the CAC 40, which rose by 15.10%.

And over the last three months, the APE portfolio has particularly shone thanks to the good performance of Safran (+15.86%), Renault (+24.28%) driven by solid results in Europe and the easing of relations with Nissan. Along with Air France-KLM (+39.36%), the mining company Eramet was the major contributor to this performance with an increase of 26.76% over the period after a mixed stock market performance in 2022 given its exposure. to traditional metals. For Oddo BHF, 2023 will be the year of the mining group. Analysts expect an increase in Eramet’s results from the second half of 2023, thanks to an improvement in the economy.

If for the design office Eramet has “everything great”, Pascal Quiry and Yann Le Fur, the two authors of Vernimmen, are not very enthusiastic about the idea of ​​holding shares in a company with the State in its capital. “Being a shareholder alongside a State is rarely an enviable situation because of its dual role of political power and shareholder, logically leading to choices that are not always in the interest of the company” deplore the two specialists in reaction to the EDF operation.

The two authors add that this situation may explain the existence of value discounts for companies listed on the stock exchange with state shareholders, as Renault or Eramet can testify, the elimination of the risk of bankruptcy induced by state shareholders not compensating for strategic concerns. posed by the presence of a government.

Energy sector predominant

If we look at the profile of the APE portfolio, in terms of sector distribution of value, the dominance of the energy sector, which accounts for 57.36% of the market capitalization of the listed portfolio, is particularly marked, far ahead of the aeronautics/defense sector (26.5%), then infrastructure/air transport (8.7%) while the rest is divided between telecommunications with Orange, services & finance with FDJ and automotive with Renault .

As of February 23, the first sector (EDF, Engie and Eramet) alone weighs more than 53 billion euros while the second (Airbus, Safran and Thales) represents just over 24.5 billion euros. Finally, infrastructure is valued at 8 billion euros. These three key sectors of the economy account for 90% of the State’s stock market investments.

EDF, which it owns more than 95% after its simplified public offer, is logically its largest stake. This is valued at 44.2 billion euros, which represents more than half of its portfolio. Airbus (10.9% of the capital) and Engie (23.6%) complete the podium with stakes valued respectively at 10.61 and 8.14 billion euros.

Beyond the portfolio listed on the stock exchange, the State through the APE holds stakes in 68 unlisted companies operating in different business sectors, from La Poste to SNCF via RATP, La Monnaie de Paris, France Télévisions, Naval Group, the Chantiers de l’Atlantique, or even the Autonomous Port of Paris. The other companies in the portfolio, four in number, are “defeasances or entities in extinction”.