GYG provides performance update
SuperyachtNews speaks with Remy Millott about the group's 2019 financial performance and its on-going strategies…
GYG, the market-leading superyacht painting, supply and maintenance business, today provides its audited final results for the year ended 31 December 2019. The group’s 2019 revenue increased by 41.8 per cent to €63.8m in comparison with its 2018 results, coatings (new build and refit) revenue increased by 51.1 per cent and supply revenue increased by 6.3 per cent. With an operating profit of €1.3m, SuperyachtNews speaks to Remy Millott, CEO of GYG, about the group’s operational highlights and outlook for the future.
“2019 was a transformational year for GYG and I am pleased that we ended the year with a record Order Book that provides both consistency and sustainability of earnings. Having signed six New Build contracts in the year and further wins in 2020, there is no doubt that management’s focus on the Northern European shipyards has delivered results and helped to offset the seasonality of the Refit market,” starts Millott.
“Having invested in systems and processes through 2019, the team’s focus for 2020 has been and remains on improving our gross margins to deliver a stronger Group EBITDA performance, along with improving cash flows and reducing debt.”
Focussing on the growth of its new build market share has broadly characterised GYG’s strategy for a number of years now. However, it wasn’t until 2019 that this strategy began to bear the fruits of the GYG’s labour. With €11.2m in new build revenue generated in 2019, this element of GYG’s business grew by €7.4m in a single year.
“Traditionally, the Northern European shipyards [manufacturing 70m-plus superyachts] have not tried to service superyachts for refit because of the potential risk to the new build business on account of limited infrastructure, available slots and potential scheduling issues,” continues Millott. “However, a number of these facilities, including Lürssen, Feadship and Oceanco, have invested heavily infrastructure and their refit businesses, which is, of course, beneficial to us as market leaders in this sector.”
As GYG increasingly focussed on the growth of its new build market share, northern European shipyards began to focus increasingly on the growth of their refit businesses, creating somewhat of a perfect storm for GYG. However, according to Millott, GYG’s appeal to these shipyards has little do with convenience and coincidence and far more to do with the group’s dedication to quality and development.
“I think that there are three distinct facets of our business that make us attractive to the Northern European shipyards,” explains Millott. “Firstly, we aren’t a company that simply provides labour to shipyards. It has become evident to these businesses that we come with a great deal of middle management and technology, as well as QA and QC documentation, and there is a lot of integrity behind what we are doing.
“Secondly, we have always been associated with specialist coatings. If you look at some of the world’s largest metallic-coated superyachts, we have done them successfully. We are known as a technical applicator with a huge resource of highly-skilled applicators within our group.”
Lastly, Millott alludes to the fact the GYG is becoming synonymous with innovation within a sector that was been typically been resistant to change and technological advancement. In 2019, it was announced that GYG had partnered with AkzoNobel to aid in the developing of a new sprayable filler product called Awlfair SF, a product that is now nearing being rolled out to the superyacht new build market at large after an extensive period of research and development.
“That we are trying to find a solution to a process that can be problematic for shipyards is appealing to our target market,” says Millott. “To have applicators on projects for the whole outfitting process, which is quite messy and labour intensive, is inefficient. We are reducing interruption and project time, providing a higher quality product, a more secure system and, all in all, de-risking the fairing process for large new builds. Shipyards have been trying to find solutions for a number of years, but existing applicators have not been forthcoming in showing enthusiasm for new products and technologies, whereas we have committed to the development of the market.”
Millott concedes that, as with many businesses, there has been an unavoidable slow down in business for H1 2020 in light of the COVID-19 pandemic. However, he reports that there has been no cancellation of projects as a result of the pandemic, as well as outlining that the group has almost double the amount of refit work scheduled for summer 2020 when compared to the same period in 2019. With a focus on the 70m-plus new build and refit market’s, GYG is benefitting from the superyacht industry’s most resilient pool of clients.
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