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29.09.16

Paul Coulson impresses directors with Ardagh’s inside story.

Institute of Directors Autumn Lunch, September 16th - Proudly sponsored by Amrop     

Siobhan Walsh, Research Partner, Dublin

How do you get the undivided attention of 600 of Irelands leading directors?

These days, to compete with the slew of mediums bombarding busy business leaders, the headline has to be commanding. On Friday last, September 16th, the Irish Institute of Directors had its large audience completely absorbed when they put Paul Coulson on the podium as the keynote speaker for this year’s autumn lunch. 

There wasn’t an empty seat in the Double Tree Hilton hotel in anticipation of what this impressive Irish tycoon had to say. With the news of Ardagh’s recent M&A deals still fresh in people’s minds, and particularly as Mr. Coulson is noted for his avoidance of publicity, invitations to this rare opportunity were eagerly accepted. Among my guests were directors from wealth management, financial services, utility providers and healthcare, neither of whom would have given up her/his seat.

 

Ardagh’s future looks glittering

His speech was long and in-depth. We were taken through a thorough history of exactly how, since joining the company in 1998, Mr. Coulson has led Ardagh’s development and expansion, solidly and surely. The numbers in the story were impressive, like the substantial ongoing investment in research and development. He saw opportunities others didn’t and has been adept and astute in financing, restructuring debt and using bond markets to manage exposure comfortably.  

Private equity companies have been heavy investors in many sectors of Ireland’s economy over the past 9 years. Their mission is to look for opportunities for short-term, high-yield financing which comes with an inbuilt exit strategy.

I was struck by the noteworthy contrast in Ardagh’s modus operandi. Instead of looking for immediate, rich return, it has adopted a policy of taking the essence of a company and nurturing all possibilities for long-term growth in a global market. It felt like a return to old, but good, values behind a sure and able helm.

This stalwart entrepreneur is a true leader who has transformed Ardagh from a small Irish company to a giant in its field. With annual revenues of about $9bn, it is one of the largest and most successful companies to emerge from these shores.

Mr. Coulson’s sights are now on a 2017 floatation of his glass and metal packaging group on the New York Stock Exchange. And he says much of the success of the company is down to luck. Well, if it is, may the luck continue.

 

Brexit still an unknown

The second strand to the speech focused on Brexit. Many attendees were taken aback at the level of negativity from someone who had just shown the fruits of a positive outlook. He admitted that the tinge of personal sadness at seeing the country of his birth facing a potential crisis added weight to his objective assessment.

He used strong words in his criticism of British leaders: “One of the worst examples of bad governance in recent times …. to put out such an important issue to its people without itself having properly assessed what the real implications of a vote to leave the EU were.” “…an incredibly dangerous decision…” He worries about the nature of Britain’s future relationship with the EU and how much FDI in Britain may be at risk.

The surprise at the strength of his pessimism was palpable. Among the people I spoke to, the feeling of how things might turn out had been more optimistic. After initial shock waves, confidence stalled; many companies waited and watched for what would happen next. But, particularly over the past few weeks, there has been a noticeable increase in activity in recruitment for top positions in Ireland, and among Irish organisations abroad; proof of returned confidence in immediate future opportunities.

Mr. Coulson purports that Ireland must align itself more with the EU and less with Britain as our interests are now different. Is this how our government is thinking? The ruling on Apple’s tax liability here may have changed our relationship with Europe from top student to the recalcitrant one who refuses to be chastened. There aren’t many arguing against continuing to court multinationals with attractive tax regimes. Though it’s debatable how the benefits play out long term, it’s not something we’re likely to change course on. It will be a delicate process to keep a foot in both the EU and the global multinational camps.

The full picture of the workings of future trade relationships between Britain and Ireland is still an unknown to everyone. In the meantime, industrious companies are continuing to follow their raison d’être - giving their undivided attention to reinventing themselves in response to our changing world and seeking new opportunities to grow business. And we’re behind them all the way.