Online Extra: Catering International & Services
At a time when many companies are bemoaning the upsurge in oil prices, Regis Arnoux is one happy man. With major clients involved in gas-and-oil drilling, his Marseille-based company, Catering International & Services, is flourishing.
CIS is a sort of commando catering business. It provides food, lodging, and management of residential bases in remote, often hostile places for oil, mining, and construction giants, including Halliburton (HAL ), Exxon (XOM ), and Total (TOT ). Unlike such better-known competitors as France's Sodexho (SDX ) or Britain's Compass, CIS works mainly in emerging markets.
It's a successful niche. In 2003, sales reached €57.5 million, an increase of 142% since 2000, and employee numbers were up 138%, to more than 3,300.
The peculiarity of CIS has a lot to do with its president's personality. A hardy adventurer, Arnoux started out as a corporate lawyer for a hotel group whose French Guyana branch he soon ran. He then opened up units in New Caledonia, Australia, and New Zealand. By the late 1970s, he created his first catering company, which was bought later on by Accor. In 1992 he founded CIS.
A licensed helicopter pilot, Arnoux has flown himself on business trips to such remote locations as Iran and Russia's Sakhalin Island. "Taste for extreme conditions is the core of my business," he says.
So far, CIS has self-financed all its new business units. Although the company is listed on the Paris stock exchange, only 21.3% of the capital belongs to public hands. To preserve his independence, Regis Arnoux remains the majority owner with 58% of the stock and doesn't seem willing to reduce his stake. He would rather rely on his cash in hand, a hefty $9.2 million, to finance buyouts he may be considering in the coming months.
BAD IN CHAD.
To reduce its geographical risk, CIS regularly moves into new markets. In 2000, Russia and Kazakhstan still accounted for more than 50% of sales. By the end of 2003, however, that share has been cut to 30%, in favor of African countries and new branches in Azerbaijan, Georgia, and Mongolia.
CIS has suffered some setbacks. After 10 years of steady growth, net profit halved to €1.7 million in 2003, and sales during the first semester of 2004 were 10% below the same period a year earlier. Company officials blame the poor performance of several African units, notably Chad, and on disappointing recruits. They also hold the Iraqi turmoil responsible for increased administrative burden in neighboring Iran.
CIS seems to be pulling out of its dive. In August, it announced that it had inked 15 new contracts worth €90 million, including new deals in Iran and Bolivia. "We even came close to considering a project in Iraq, but our client refused to take responsibility for the security of our employees," Arnoux says. His taste for adventure has its limits.