From its beginnings in 2001, our French business has risen to become a leader in the home assistance market.
Total revenue increased by 5% to €118.7m
Adjusted operating margin 32%, in line with prior year
Adjusted operating profit grew 6% to €37.8m
France had a strong year as it once again returned the highest retention rate in the Group, up one percentage point to 89% (FY18: 88%), and total customers increased by 2% to 1.1m. For the third year running, France’s focus on maintaining high customer service standards was reflected in the award of Élu Service Client de l’Année.
A key component of HomeServe’s success in France has been its partnership with Veolia. The partnership began as a joint venture when HomeServe first entered France in 2001, continued as a 10 year affinity marketing agreement after HomeServe bought Veolia’s share in 2011 and has now been extended early until 2026. The deal secures ongoing support for direct mail and renewal activities and also introduces new channels and opportunities to drive further growth through Veolia’s HomeFriend initiative. As well as new telephony and digital channels, Veolia, through HomeFriend, will sell HomeServe’s products directly in its own call centre, giving rise to similar partner payments within capital expenditure as seen with Suez (also in France) and previously Endesa in Spain.
The French business now works with the top three French water utilities having signed a new partnership with the third largest provider, Saur, in December 2018. The Saur relationship will enable marketing campaigns under a fresh brand to c.4.0m households. Having signed the partnership in December, test campaigns were quickly launched in the final quarter of FY19 with encouraging early results.
Approximately 10m French households receive their water supply from small to mid-sized municipals and the French team has now commenced attempts to access this channel by learning from the successful programme in North America where HomeServe already works with a large number of municipals.
Deregulation in the Energy sector in France is accelerating with more than 40 energy retailers taking market share from the larger incumbents and the French business has started to build a strong business development pipeline to partner with the new challengers.
Following the acquisition of Electrogaz, an HVAC business in the south of France, last financial year, the French business made two further HVAC acquisitions in FY19, Société V.B. Gaz and Etablissements Descamps. Descamps adds to HomeServe’s HVAC presence in the South of France and complements last year’s acquisition of Electrogaz whilst V.B. Gaz is based just outside Paris. Annual domestic boiler services are mandatory in France, so the HVAC market is a particularly attractive opportunity and the two acquisitions represent a further step in HomeServe’s buy-and-build strategy to capture more of the revenue generated in the HVAC lifecycle from installation to annual service contract and one-off repairs.
France performance metrics
|Affinity partner households (m)||15||18|
|Income Per Customer (€)||106||109|
|Policy Retention Rate||88%||89%|
France performance metrics
|Affinity partner households (m)||15||15|
|Income Per Customer (€)||101||106|
|Policy Retention Rate||89%||88%|