Family Holdings #37 - From stock market plans for Belron to Berkshire's AI ambitions

This week's topics:

In Brief:

3i Group (London: III) has announced that it has acquired an additional stake of approximately 0.3% in Peer Holding I B.V., the parent company of Action. 3i is financing the acquisition with its own shares, issuing around 3 million new shares for the purpose. Together with the 1.8% acquisition announced earlier, 3i's stake in Action rises from 65.4% to 67.5%.

Constellation Software (Toronto: CSU) has, through Vesta Software Group, part of the Jonas operating group, acquired the Belgian company Aucxis. Based in Stekene, the company supplies software and hardware for auction markets and RFID tracking. It offers an electronic auction platform with real-time processing, an ERP solution for fish auctions, and middleware for tracking reusable assets. Its customers include auction operators in fish, horticulture and fresh produce, as well as customers in industry, logistics, pharmaceuticals and healthcare.

Markel Group (New York: MKL) announced a leadership reshuffle this week. Steve Markel is stepping down as chairman after more than fifty years and will not stand for re-election at the 2027 shareholders' meeting. Chief executive Tom Gayner has been appointed chairman with immediate effect, in addition to his existing role. Michael O'Reilly remains the lead independent director. In addition, Simon Wilson and Andrew Crowley have been promoted to co-presidents, leading Markel Insurance and Markel Ventures respectively, and a Leadership Council is being established comprising both co-presidents, the chairman and the lead independent director.

Brookfield (New York: BN) has been selected by the UK's Nuclear Liabilities Fund for a multi-year investment mandate, with an initial commitment of $1 billion (approximately £750 million). The fund is intended to cover the decommissioning costs of eight British nuclear power stations without placing undue burden on taxpayers. The mandate is managed by the Investment Solutions Group, chaired by Oaktree co-chairman Howard Marks and led by Alper Daglioglu, and invests broadly across Brookfield's strategies in infrastructure, energy, private equity, real estate and private credit.

Mixed to good half-year for D'Ieteren Group, with promise of a listing

The Belgian family holding company D'Ieteren Group (Brussels: DIE) published its half-year results after market close on Wednesday evening, doing so with two press releases. The Board of Directors announced that Eric Machiels will take the helm in December from Francis Deprez, who is leaving after seven years as chief executive and ten years with the group. In addition, D'Ieteren officially confirmed for the first time that Belron's shareholders are exploring strategic options for the minority shareholders' stakes, "including a possible stock market listing".

The figures themselves were roughly in line with expectations. Adjusted profit before tax, group share, the holding company's main performance indicator, came in at €482.4 million, an increase of 6.6%, or 8.4% at constant exchange rates. Trading cash flow rose by 12.0% to €539.0 million. All divisions contributed to that growth, bar one.

Automotive: the expected setback
That D'Ieteren Automotive is under pressure comes as no surprise to anyone following the sector. This is not so much due to the company itself, but is a logical consequence of the broader signals within the European car industry. Nevertheless, the scale disappointed. Revenue fell by 10.8%, the number of vehicles delivered dropped by 8.3%, and net market share slipped from almost 23% to 21.5%, a loss of 153 basis points in a Belgian market that itself already contracted by 2.4%. As a result, adjusted operating profit fell back by 58.7% to €47.3 million, pushing the margin down from 4.5% to 2.1%. Asked whether this margin represents the low point, management was unable to give an answer.

Cooling business market and fiscal uncertainty: Belgian company car fleets are gradually becoming saturated. In the first quarter, the share of professional registrations in Belgium fell from 58.3% to 51.2%. Companies are holding back due to increasingly stringent taxation around company cars: in 2026, for instance, tax deductibility for fossil-fuel cars will be scrapped entirely, and the deduction for electric cars will also be phased out gradually from 2027 onwards. On top of this tightening for employers, an increase in the Voordeel Alle Aard (VAA, the Belgian benefit-in-kind tax for, for example, a company car) for employees also looms during the upcoming budget negotiations.

Shift towards the private market: As the business market slows down, market weight is relatively shifting towards private customers. During the results presentation, CFO Edouard Janssen pointed out that there is a "normalisation of the buyer mix towards a larger share of private customers", precisely the segment in which D'Ieteren has traditionally been less strongly represented.

Rise of new competition: CEO Francis Deprez explicitly pointed to the growing pressure from Chinese car brands on the Belgian market. Whereas they previously reached private customers, in the past half-year they have finally gained a foothold with B2B customers as well: "They got hold of the B2B market a bit later than other markets, but it's starting to happen now", said Deprez.

Margin pressure across the chain: On the supply side, increased competition is leading to considerable price pressure. Deprez noted that Volkswagen is increasingly squeezing distribution margins further down the chain for new models. Moreover, fiercer competition for customers means D'Ieteren itself must offer more discounts to secure orders.

For the second half of the year, management is bracing for a continued difficult market. To turn the tide, D'Ieteren is on the one hand focusing on new, keenly priced EV models to restore market share, although the exact delivery timeline remains uncertain. On the other hand, management is taking action on costs through a recently announced transformation plan, under which up to 344 jobs (10% to 15% of staff) may be cut. Because the consultation procedure is still ongoing, the financial impact cannot yet be quantified, and management does not expect improvement before 2026.

Belron impresses on margin, but leans heavily on price and mix
Whereas Automotive accounted for 7.5% of total group profit in H1, Belron delivered 63.9% of the result. Revenue at the windscreen repair specialist rose by 4.7% to €3,573.5 million (8.3% at constant exchange rates), driven by 7.3% organic growth and 0.7% from acquisitions, despite a 3.3% currency headwind from dollar exposure. Adjusted operating profit climbed by 16.5% at constant exchange rates to €820.3 million, lifting the margin from 21.4% to 23.0%. This is fully in line with management's expectations, which are targeting mid-to-high single-digit revenue growth and a margin improvement towards 25% by 2028.

The quality of that growth does, however, call for some nuance. The number of interventions on passenger vehicles rose by just 0.4%. Including recalibrations, volume growth stood at 3.9%, meaning that as much as 7 percentage points of growth came from price and mix (higher rates and a shift towards more expensive, more complex repairs). This pricing power, however, has a less sustainable component. Deprez attributed the US price increase to a rise in the NAGS index (the American benchmark for auto glass prices), which may include import tariffs baked in, and called that index "always a bit of a black box".

Regionally, North America (55% of revenue) stood out with 9.4% organic growth, partly thanks to the recovery of insurance claims that motorists had previously postponed. Deprez tempered expectations, however: "Are we now fully back to normal? I wouldn't say that yet", stressing that further predictions are pure speculation. Janssen added that the recovery is uneven and that the comparison base becomes considerably tougher in the second half of the year. On the other hand, free cash flow was strong this half-year thanks to a one-off tax benefit that will not recur.

Finally, a possible listing of Belron continues to occupy minds, although management is deliberately keeping its cards close to its chest. D'Ieteren reiterated that an IPO is seen as a logical option to unlock value, but stressed that the priority for now lies with further operational execution of the 2028 plan and debt reduction. No concrete timing for a stock market listing was given, meaning investors will have to remain patient for the time being.

PHE and TVH impress
In the shadow of giant Belron, the two smaller holdings delivered a strong half-year. PHE and TVH together quietly contribute 31.3% of total group profit.

At PHE revenue rose by 10.4% (of which 6.0% organic) and profit climbed by 18.4% to €106.8 million, helped by a record margin of 9.6%. Strong international expansion more than offset the slower French home market, where higher fuel prices are weighing on kilometres driven. Analysts on the call focused in particular on the debt ratio, which rose to 3.5x EBITDA on the back of the Spanish acquisitions of Polaris and Regueira, putting pressure on free cash flow. However, around 3x is the comfortable baseline, though a temporary peak to 3.5x for strategic acquisitions is accepted, according to Janssen. Deprez also stressed that there is still plenty of room in Spain to keep building towards nationwide coverage.

TVH is showing a clear recovery curve after a more difficult period. Revenue rose by 5.3% (6.6% organic) and profit rebounded by 16.9% to €44.2 million. In conversation with analysts, Deprez underlined that this recovery is structural: by expanding its catalogues and inventories for construction and agricultural machinery in a targeted way, TVH has definitively secured these new customer segments for itself. The anticipated margin pressure (from 14.3% to 13.7%) caused by higher freight costs and inventory write-downs was well absorbed by analysts, although pricing power remains a point of attention. Deprez clarified that genuine price increases are currently only succeeding in the US, through passing on import tariffs, which is in itself margin-dilutive.

Conclusion
Belron, PHE and TVH all delivered figures that leave little to be desired, offsetting the disappointments at D'Ieteren Automotive. Of these three, Belron remains the decisive factor: the windscreen repair and replacement specialist contributes almost two-thirds of the group's profit and roughly three-quarters of total enterprise value.

With a formal IPO process on the agenda, every quarterly performance strengthens the investment case. The longer Belron keeps up its margin improvement and steady debt reduction, the stronger the foundation will be by the time shareholders make their final decision. A stock market listing would immediately anchor the true value of this crown jewel in the market, whereas it currently exists only in analysts' models. This holds considerable potential for value unlocking for D'Ieteren, although ultimate success will still depend on market conditions and on timing that management is, for now, deliberately leaving open.

CEO Greg Abel on Berkshire's AI exposure

Last week we already wrote about the Japanese holdings of Berkshire Hathaway (New York: BRK.B) following an interview with CEO Greg Abel. The press naturally took the opportunity to also discuss the most recent developments at Berkshire Hathaway with him. Watch the full CNBC interview with Greg Abel here:

First, the relationship between Greg Abel and Warren Buffett. The "Oracle of Omaha" celebrated his 96th birthday last Sunday. CEO Abel attended the birthday party before departing for Tokyo, and even discussed the investments in Japan with Buffett on his birthday. On the morning of the CNBC interview, Abel called Omaha again to report on every individual company visit and on the performance of the businesses involved.

Buffett still comes into the office daily and regularly discusses the portfolio and developments with his successor. Although decision-making authority now rests entirely with Abel, Buffett's influence is thus still clearly present.

The investment in Alphabet
The largest new position in Berkshire's portfolio is Alphabet (New York: GOOGL), the holding company above Google, YouTube, Gemini and Waymo, among others. Abel confirmed that Buffett himself initiated the first purchases of the shares roughly fifteen months ago, after which the positions were expanded further in consultation. At the end of May, Abel received a call on a Sunday morning asking whether Berkshire wanted to participate in a share issuance by Alphabet. In keeping with the distinctive way the holding company is run, he called Buffett directly to put the opportunity for a large block of shares to him. Alphabet indicated that an amount of USD 10 billion or more could be considered. Abel proposed asking for a 6.5% discount to the prevailing share price at the time. On those terms, the block was taken up.

As a matter of principle, Berkshire Hathaway does not comment on the substantive considerations behind individual investments. In broad terms, however, CEO Abel was willing to explain what sparked the interest in this case.

"We all see and feel the impact of AI. Through our own businesses we have a lot of visibility into how we use AI and what benefits that delivers. That generated additional interest. And then we saw Google as an important player."

The interesting thing is that the wide range of subsidiaries the holding company comprises forms its own source of information that also informs the investment selection.

Energy is the limiting factor
In addition to the direct position in Alphabet, Berkshire also has exposure to AI infrastructure through its subsidiary Berkshire Hathaway Energy. Greg Abel built his career in energy infrastructure, first at construction group Kiewit and later at Berkshire's own energy arm. Asked where the construction of data centres currently stands, he gave a clear answer.

"I have always held the strong conviction that energy would be the constraint. We can produce the energy. It's about how long it takes to get the sites ready so they can serve the data centres."

In Iowa, data centres accounted for roughly 8% of total electricity demand last year. Moreover, demand is growing; customers are coming forward with new requests, and Berkshire has the capacity to serve those requests. The energy division applies three clear conditions in doing so, which have been agreed with the state, the governors and the regulators and which have also been shared with the so-called hyperscalers, the large providers of cloud services and computing power.

1. Rates for other customers may not rise, and there must even be a benefit for those customers in return;
2. The community must be given insight into the effects on water consumption; and
3. The community must want the data centre to come.

So far, the construction of a data centre has not been rejected at any location. Incidentally, the holding company only builds the energy infrastructure, not the data centres themselves.

The narrative around data centres
CNBC presenter Joe Kernen pointed out to Abel that others will define the narrative around data centres if the sector does not tell that story itself. Abel agreed with him and showed how the discussion in the United States keeps shifting focus. Initially, the debate centred on whether the arrival of data centres would raise other customers' energy bills. Attention then shifted to water consumption, with the data centres themselves demonstrating the technology they use to reduce that consumption. In Iowa, still a distinctly agricultural state, a third topic is now being added. As soon as both the energy infrastructure and a data centre are built in a municipality, property taxes fall sharply and that municipality receives additional revenue for schools, police and fire services. According to Abel, these benefits in particular need to be communicated much more emphatically, because resistance to data centres in American communities is growing.

The state of the US economy and the consumer
Since the previous conversation with CNBC, Berkshire Hathaway acquired homebuilder Taylor Morrison for USD 6.8 billion and increased its stake in peer Lennar. Abel led the discussions on this with Taylor Morrison CEO Sheryl Palmer, taking a very long-term view. He assumes that the American dream of homeownership will endure and that Taylor Morrison will be a valuable part of Berkshire Hathaway in five to ten years' time. Fifteen construction businesses from existing Berkshire subsidiary Clayton Homes are now being folded into Taylor Morrison. Abel does not expect a swift recovery in the housing market. For now, he is bracing for a difficult period, although the holding company does want to be invested in this sector for the long term.

On the economy as a whole, Abel struck a moderately positive tone. In Tokyo he sensed a great deal of dynamism, and the five trading houses are posting strong results, including in the divisions that have nothing to do with commodities. Within the group itself, second-quarter results were also strong, including at the industrial businesses, pointing to persistently robust demand. At the same time, the figures show that a section of American consumers are under pressure and finding it increasingly difficult to make ends meet on the same income. Nevertheless, Abel describes the fundamentals of the economy as undiminished in strength.

Chapters Group raises the bar once again

Chapters Group (Frankfurt: CHG) published its preliminary half-year figures on 8 September and raised its guidance for the second time this year. Total output — revenue plus capitalised own work and changes in inventories — climbed 26% in the first half to around €106 million (compared with €84 million a year earlier).

Operationally too, the group delivered a strong performance: adjusted EBITDA rose 68% to around €32 million. As a result, the operating margin jumped from just over 22% to more than 30%, an improvement of 8 percentage points within twelve months.

This translates directly into higher annual targets. Chapters started the year with expected organic EBITDA growth of around 15%. In July this was raised to just over 22%, and management is now targeting growth of 35% to 40%. In addition, Chapters has raised its full-year guidance for total revenue and recurring income from high single-digit to low double-digit organic growth.

Financial Technologies as growth engine
In her commentary, CFO Marlene Carl left no doubt as to the source of this acceleration. The outlook for the Public Sector & Enterprise division remains unchanged at high single-digit growth. This arm is driven by familiar operational priorities, including artificial intelligence, automation, a simpler organisational design and better value-based pricing.

The entire guidance upgrade at group level is therefore attributable to the Financial Technologies segment. According to Carl, this arm is running considerably ahead of plan, both in terms of revenue and in achieving merger synergies. The segment was created in May 2025 from the combination of Fintiba, Expatrio and Coracle: three providers of financial services to foreign students and skilled workers in Germany.

CEO Jan-Hendrik Mohr views this particular cluster as the ultimate blueprint for the entire group. The model is built on bringing together multiple companies around a single niche market, broadening the customer offering, capturing cost synergies and accelerating software development through technology.

Vulnerability in the earnings model
Yet this growth acceleration is a double-edged sword, and that vulnerability is baked into the figures themselves. Of the total output, around €54 million (just over half) was recurring in nature. However, the split between the divisions is extremely skewed:

• Public Sector & Enterprise has a predictable software model, with recurring income of around 63%.
• Financial Technologies lags at a share of only around 15%, owing to its heavy reliance on transactions and migration.

The segment currently driving growth therefore has the least predictable revenue base. Demand is highly dependent on the number of foreign students and skilled migrants moving to Germany, and thus indirectly on German migration and education policy. Moreover, merger synergies are one-off in nature: a cost base that has already been streamlined cannot be consolidated a second time. The current growth rate of nearly 40% at the EBITDA level is an impressive achievement, but by no means a structurally sustainable level for the long term.

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This article was translated automatically from Dutch using AI. In case of any difference, the Dutch original prevails. Read the original in Dutch.