How do you maintain your activity during the health crisis? What impact has it had on activity? And how do you adapt your growth strategy? Yannick Piacentini, Managing Director of Edea, a company specialized in earthworks and civil engineering, and Vincent Dejonghe, CEO of Proferm, a door and window manufacturer, both accompanied by Initiative & Finance, share their experience.
How did you react when lockdown was announced last March? What were your priorities?
Yannick Piacentini : The initial feeling was one of uncertainty. About how long lockdown would last but also about the State aid we might receive. We’re a family business: our priority was to maintain the salaries of all our employees. After three days’ stoppage, we quickly returned to work – asking people to come in on a voluntary basis and applying a protocol devised with the company’s environment, safety and quality manager. Because we usually wear masks in our work, we fortunately had the equipment we needed to reopen. And almost all our workers came back.
Vincent Dejonghe : When lockdown was announced, we decided to let everyone who could – mainly administrative staff – work from home, to stop the production side of our business and to furlough our sales staff. It then took us just under a month to organize our workshops and start production up again, in line with a health and safety protocol. Our clients’ reactions inspired us to return to work: even over the weeks that we were shut down, we continued to receive new orders – our clients just didn’t want to take delivery before the end of lockdown. It was reassuring and we knew things would pick up again quickly. And they did.
What support did Initiative & Finance offer with these matters?
YP : Initiative & Finance set up a legal unit who were able to answer our questions. They also helped us obtain the state-guaranteed loan. Finally, their staff were always on hand, providing moral support in dealing with the uncertainty and the decisions we needed to make.
VD : We also benefited from the state-guaranteed loan. There was a tightening of the conditions governing the credit insurance that protects us from customer defaults – something that could increase – but Initiative & Finance provided advice and support in changing broker, helping us obtain better conditions.
What have been the repercussions – good or bad – of the health crisis and the ensuing consequences on your business?
VD : Lockdown obviously complicated production and our sales staff’s work, and we saw a drop in revenue. Today, production has to maintain the pace as we deal with the backlog. But one thing is sure – we won’t shut down again. We’ll find solutions because the production shutdown dug a hole in our cashflow and starting up again after a month’s downtime was also tricky, with a temporary loss in productivity.
With the crisis, we also realized how important digital communication is, to make up for the number of trade fairs and events that were canceled, and we were forced to innovate in that respect, to try things out.
YP : Work was stopped on the big sites, but we were able to continue with small urgent jobs and recurring projects with local authorities, private companies and so on. With the spare time available, we seized the opportunity to develop and enlarge our site in Meyreuil, in the Bouches du Rhône département. Of course, the crisis has affected our finances, both in terms of revenue and profit. But we managed to maintain everyone’s salary and we’re very proud of that. We haven’t yet returned to the level of activity we had before lockdown but, from an organizational viewpoint, we’re ready for a second wave.
Lockdown speeded up the digital transition for us too. A lot of meetings now take place via video conferencing, especially since a lot of our clients are still working from home.
Has the health crisis brought about or accelerated changes to your growth strategy?
VD : Pre-Covid, we had embarked on an internal growth program, recruiting sales staff to extend our regional presence. We have decided to pursue this and continue our development to avoid any “downswing” after the catch-up period. It is thanks to growth that we’re managing to keep our head above water today.
In fact, the crisis has validated our strategy. From the outset, we have relied on distinctive products that set us apart from the competition, for example the Textural range focused on color and textures for home interiors.
YP : For the past year, we’ve been working on two acquisitions, Déco Jardins and Karenov, and we should have signed one deal two days after lockdown was announced. Against a background of crisis, with Initiative & Finance, we decided to suspend these projects for a few weeks. After discussing things together, we worked on the financing conditions to eliminate any cashflow risk but without compromising the operations, which were the outcome of several months of discussion, audits, and negotiation. The acquisitions then went ahead, via video conferencing.
How do you see things, post-crisis?
YP : We will continue to grow, to keep an eye on growth opportunities. We will no doubt be more cautious about certain purchases or hiring for certain positions, but we will continue to move forward.
VD : For us, the goal is to pursue our business growth and expand our network of Proferm-licensed experts to acquire national presence. And we will be making the most of digital communication and the opportunities that it brings. From a financial viewpoint, we have recovered our pre-crisis cashflow position and we are making our payments on time. We are keeping a close eye on payment terms and we are going to step up our recruitment efforts to come out stronger from this period of economic turmoil.