“We are a case study for business schools”

The three big French promotional products agencies, AFSO, BV l’Agence Objets Média and Lagardère have been operating on the French and international promotional products market together as Synneo since September 2022. According to own accounts, boasting a turnover of 38 million Euros, Synneo is the largest promotional products agency in its segment in France. Frédéric Misseri, the previous CEO of Lagardère and one of the five shareholders, spoke with eppi magazine about the merger and the strategy and future plans of the new enterprise.

Mr. Misseri, in the music business one would talk about a supergroup. How did the foundation of your promotional products supergroup come about?

Frédéric Misseri: The first plans arose around five years ago against the background of several larger mergers within our industry: For example, Jordenen, the leading French promotional products agency at the time was taken over by an investment fund, shortly afterwards several members of the Ippag cooperative merged into the Zinc Group. I consider this movement towards concentration in our very fragmented industry to be an important future trend and think it is decisive to be pro-active oneself at an early stage, because the options for courses of action are better then. The managers of AFSO, BV and I have been good friends for many years and the idea of a merger of the three of us came out, in this context, somehow naturally. Carrying out a merger between three companies is indeed a huge challenge, but above all an enrichment because all three companies complement each other perfectly.

There are three companies, but five owners altogether. Could you explain the shareholder structure?

Frédéric Misseri: From the very start we wanted all partners to be on an equal footing, in spite of different sales volumes. That means there are five shareholders, who all have the same voting rights so that none of the three former companies can take over control. The merger became legally valid around a year ago and we have only needed to go through a vote twice, although we meet up every week for a board meeting. We agree on most points (laughs). There is also an investment fund – IXO Private Equity – which bought shares in AFSO two years ago and which has confirmed his strong interest and support by remaining a shareholder in the new company. Whereby we only consult them on extremely strategic issues or investents, they trust us totally to take all other decisions ourselves.

You are based in Paris, Nice and Toulouse – how will you organise the future alignment, in terms of headquarters, offices and logistics?

Frédéric Misseri: There is only a headquarters for postal deliveries, not for the actual organisation itself. Most of our customers are in Paris, and our largest customer is based in Toulouse. Most of the accounting department is also located in Paris, which is why that is where our administrative centre is. Within the new organisation structure, the individual teams partly have new managers – for example part of the previous sales team in Nice now reports to a sales manager in Paris. We wanted there to be just one team and one “crossed” management in charge of the employees throughout the country.

How has it worked so far?

Frédéric Misseri: At the start it was challenging because the corporate cultures were partly very different. The wage level in Paris was different to that of Nice and Toulouse as well so we had to find a solution to ensure that everyone felt they were being treated fairly. The prerequisite for this was studying each individual position precisely so that the related demands could be subsequently taken into account as accurately as possible.

During that period we invited employees to take part in several open discussions, asked everyone exactly what was on their minds and what topics and worries they needed to openly discuss. There were to be no taboos. That was helpful and even if we weren’t able to fulfil everyone’s expectations 100%, we tried our very hardest to make the transition as fair, open and transparent as possible.

How many employees does the group have overall?

Frédéric Misseri: Around one hundred. We hired 15 new employees just a month ago. Not to forget the fact that we didn’t make a single person redundant in the course of the merger, which is probably what we’re the most proud of as company owners.

In addition to the three teams, you also had to align the logistics and the infrastructure. Was that also challenging?

Frédéric Misseri: It is still a challenge, especially in the IT sector, because we had three different ERP systems. If two companies merge they normally agree to adopt one of the two systems. We could have taken a similar approach and kept the most efficient system of the three, which was in operation at AFSO in Toulouse. However, AFSO wanted to install a forward-looking, more modern system, which is why we opted for Odoo. We have been implementing it for several months now and it still causes us a lot of headaches, but it is at the same time very promising and was definitely the right choice.

We have two logistics centres in Paris and onein Toulouse. We had an external warehouse service provider in Nice up until now and will soontransfer all our stocks into one or several of ourown logistic centres.

What is your strategy for the future, whichcustomer groups are you focusing on andwhat added value do you offer?

Frédéric Misseri: One of the motivations and prerequisites for the fusion was that our go-to-market strategy and customer structures complement each other perfectly. In that respect we are a real case study for every business school (laughs).

In Toulouse they have in-depth knowledge on fulfilment programmes, including product development, IT, international dispatch and customs clearance in 92 countries, they also have experience in B2C strategies. The staff in Paris on the other hand are experts in sourcing, product innovation and CSR themes. They also have an incredible sales dynamic, including in-house client events at their fantastic business premises. Finally, here in Nice we have developed extensive certified CSR solutions for our clients, have some of the highest CSR certifications and are also members of Ippag (International Partnership for Premiums and Gifts) and co-founders of the commercial arm of Ippag, Prominate. As shareholders of Prominate, one of the very few global solutions in our industry, we can continue supplying international customers at global level via Synneo. We have won three bids with Prominate over the past months, one of them has a volume of four million Euros in Europe alone. In the course of the following years Prominate could account for 10 to 15% of our turnover.

Regarding our future customer structure, as our main target group we are positioning ourselves in the direction of multinational groups, which need what we have to offer: IT solutions, international reach, CSR.

Talking about CSR: This is one of the topics you are responsible for as a member of the Board of Directors. Where do you place the focus when we talk about sustainability?

Frédéric Misseri: We have been investing in sustainable processes for many years and aligned our company and our products more sustainably than most even before sustainability became a mega trend within the industry. Even more than ten years ago when the term CSR didn’t even crop up in tenders, BV was one of ten companies in the French service sector to move into a passive building. Lagardère on the other hand developed a tracking tool that now enables us to work out the CO₂ footprint of every single product we sell to our customers. We additionally offer a CSR scoring tool that our customers can use to determine how sustainable the individual products are overall and in comparison to each other. Whereby the CO₂ footprint is only one of many aspects. Both tools are Bureau Veritas certified.

Sustainability is of decisive significance for us, not only for the daily business, but also for the entire future alignment of our group. Whilst Lagardère has already achieved the platinum rating of EcoVadis, next we intend to have Synneo also rated platinum by EcoVadis.

Do digital sales channels play a big role?

Frédéric Misseri: We have an online sales division that we took over from BV, which we will carefully further develop. However, our main focus doesn’t lie on eCommerce.

What are your short and mid-term goals?

Frédéric Misseri: Our first goal was to carry out the reorganisation in peace without losing market shares and turnover. Nevertheless we grew by 22% in the first year of the merger because our team did such a good job. The coming years will be characterised by internal and external growth.

Although it was not the goal of the merger to be the biggest on the French market, we actually are the leader on the key account segment. Indeed, turnover wasn’t and still isn’t the main objective. For us it is vital that we are profitable so we can secure the future of our group and its development. More important than being the biggest, we modestly but strongly aim and work at being recognised as the company bringing the highest added value to our clients.

// Till Barth spoke with Frédéric Misseri.

Photos: Synneo