Bureau Veritas Sa · EURONEXT:BVI

Bureau Veritas Sa — FY2014 Earnings Presentation

61 slides from Bureau Veritas Sa's earnings presentation, Feb 26, 2015

Slide 4: 2014 key highlights
2014 key highlights @constant EUR FY 2014 VLY currencies Revenue 4.17Bn +6.1% +9.4% Adjusted operating profit 694m +5.6% +9.7% Adjusted EPS 0.90 (1.1)% +3.3% Free cash flow 402 +24.0% +27.8% 2.5% organic revenue growth… Metals & Minerals and Europe 6.9% growth from acquisitions… 7 bolt-ons + Maxxam
Slide 5: Geographical footprint
Geographical footprint % of 2014 Group revenue 66,500 employees 33% Europe 12% Africa (2) pts VLY (1) pt VLY Middle East 1,400 offices & labs FAST GROWING COUNTRIES 51% 14,400 Eastern Europe 400 9,000 260 28% Asia Pacific 27% Americas (-) pt VLY +3 pts VLY 23,000 20,100 410 330 Fast growing countrie
Slide 6: Portfolio of businesses
Portfolio of businesses Revenue Adjusted operating profit GSIT GSIT 14% 6% Marine & Offshore 6% Marine & Offshore 8% 20% Industry 12% Industry 17% IVS IVS 23% 12% Construction 21% Construction 8% Certification 8% Certification 11% 13% Commodities 10% 11% Commodities Consumer products Consumer produc
Slide 7: Acquisitions in 2014
#8 Acquisitions in 2014 DATE DESCRIPTION FOOTPRINT Canadian leader in analytical testing (petroleum, MAXXAM Jan. Canada environment, food and DNA) JYUTAKU Apr. Building conformity assessment Japan QUIKTRAK Apr. Vehicle/agricultural machinery stock audits USA ANDES Apr. Agri-food testing Chile, Peru
Slide 8: Accelerated development in China in 2015
Accelerated development in China in 2015 3 acquisitions year to date 1,300+ employees Combined revenue c. EUR 60m  Broaden range of services  License to operate  Domestic market Shandong Ningbo CTS Chengxin Henxin Construction Industry Consumer Products Power NDT E&E/Toys & Hardlines testing © Co
Slide 9: Operational excellence
Operational excellence Strengthening our lean culture… to become the operating system of BV  Process re-engineering  Lean tools deployment: Value Stream Mapping, Scorecard Taking advantage of our size  Purchasing: manageable and actionable supply base  Shared service centers: IT, finance, operat
Slide 10: A new commercial organization
A new commercial organization Opportunities Our DNA • Added-Value Based • Solutions Oriented • Impartiality • Technical Expertise Global Account Management • Quality of Service Local Business Development Service & Customer Centric © Copyright Bureau Veritas / February 26, 2015 / p 10
Slide 12: Summary income statement
Summary income statement @ constant (in EUR millions) FY 2014 FY 2013 VLY currencies Revenue 4,171.5 3,933.1 +6.1% +9.4% Adjusted operating profit 694.0 656.9 +5.6% +9.7% Adjusted operating margin 16.6% 16.7% (10)bps 16.7% Other operating expenses (130.9) (67.3) Operating profit 563.1 589.6 (4.5)% (
Slide 13: Revenue growth
Revenue growth (in EUR millions) +9.4% +6.9% 4,171.5 +2.5% (3.3)% 3,933.1 3,933.1 FY 2013 Organic Acquisitions Currencies FY 2014 Q4 2014 +3.4% +8.8% +1.0% © Copyright Bureau Veritas / February 26, 2015 / p 13
Slide 14: 2014 revenue growth analysis
2014 revenue growth analysis % Group FY 2014 Organic Acquisitions revenue Marine & Offshore 8% +7.1% +4.8% Industry 23% +5.8% +4.3% Consumer Products 14% +5.4% +5.0% Commodities 17% +1.5% +9.3% IVS 13% +1.2% +19.0% Construction 11% +0.1% +6.5% Certification 8% +0.8% - GSIT 6% (7.6)% +4.1% Total Grou
Slide 15: Quarterly organic revenue growth
Quarterly organic revenue growth Q4 2014 Industry +8.2% Certification +4.9% Consumer Products +4.5% 3.3% 3.4% 3.2% 2.7% Commodities +4.0% 1.6% Marine & Offshore +2.8% IVS (0.4)% 0.9% GSIT (1.5)% Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Construction (1.9)% © Copyright Bureau Veritas / February 26, 2015 /
Slide 16: Organic growth by geography
Organic growth by geography FY 2014 Q4 2014 % Group Organic % Organic % Europe 33% (1.0)% (0.3)% Asia Pacific 28% +6.5% +4.2% Americas 27% +5.0% +7.5% Middle East, Africa, Eastern Europe 12% (0.6)% +4.9% Total Group 100% +2.5% +3.4% © Copyright Bureau Veritas / February 26, 2015 / p 16
Slide 17: Adjusted operating profit
Adjusted operating profit (in EUR millions) +48.1 694.0 +29.4 656.9 (26.6) 656.9 (13.8) ~EUR 64m adjusted operating profit FY 2013 Minerals & GSIT Rest of business Acquisitions Currencies FY 2014 Margin 16.7% (20) bps 10 bps 10 bps (10) bps 16.6% © Copyright Bureau Veritas / February 26, 2015 / p 17
Slide 18: Adjusted operating margin drivers
Adjusted operating margin drivers (in EUR millions) 2014 VLY @cc Profit VLY Key drivers Margin bps +18 Commodities 12.1% +150 Acquisitions (+) +16 IVS 14.2% +50 Lean (+) +13 Consumer Products 24.0% - Lean (+), mix (-) +12 Industry 15.0% (20) Volume (+), price pressure (-) +6 Marine & Offshore 25.0%
Slide 19: Other operating expenses
Other operating expenses (in EUR millions) FY 2014 FY 2013 VLY Amortization of acquisition intangibles (106.2) (51.1) (55.1) Restructuring & disposals (19.8) (12.8) (7.0) Acquisition related costs (3.4) (3.4) - Goodwill impairment (1.5) - (1.5) Total other operating expenses (130.9) (67.3) (63.6) 20
Slide 20: Net financial expense
Net financial expense (in EUR millions) FY 2014 FY 2013 VLY Net finance cost (78.1) (60.8) (17.3) Foreign exchange gain / (loss) 3.3 2.2 1.1 Interest charge on pension plans (3.5) (3.2) (0.3) Other financial expenses (2.6) (2.2) (0.4) Net financial expense (80.9) (64.0) (16.9) Key driver: average ne
Slide 21: Effective tax rate (ETR)
Effective tax rate (ETR) ETR VLY (bps) Adjusted ETR 2013 31.1% Variation in basis points (bps): Translation of currencies +80 Tax on dividends repatriated from subsidiaries +80 Non deductible interest (15% to 25%) +40 Exceptional Items +100 Adjusted ETR 2014 34.1% +300 Lower tax rate on other operat
Slide 22: Summary cash flow statement
Summary cash flow statement (in EUR millions) FY 2014 FY 2013 VLY Profit before income tax 482.9 525.6 (42.7) Elimination of financing and investing activities 83.0 57.1 Provisions and other non-cash items 69.9 25.8 Depreciation, amortization and impairment 216.7 149.4 Movements in working capital (
Slide 23: Adjusted financial debt
Adjusted financial debt (in EUR millions) 70.6 1,879.9 41.6 216.0 625.3 1,328.4 402.0 Dec. 2013 Free cash-flow Acquisitions Dividends Stock Other Dec. 2014 options/buybacks Adjusted net financial debt as defined for the Group’s covenants calculation © Copyright Bureau Veritas / February 26, 2015 / p
Slide 24: Leverage ratio
Leverage ratio 2.51 2.16 1.89 1.78 1.60 1.59 1.71 1.38 Jun-08 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Leverage ratio = Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amortization and provisions) adjusted for all units acquired over the past 12 months, as
Slide 25: Summary financial position
Summary financial position (in EUR millions) Dec. 2014 Dec. 2013 VLY Goodwill 1,814.2 1,412.1 402.1 Net fixed assets 1,126.2 775.8 350.4 Working capital (WC) 425.9 334.5 91.4 Capital employed 3,366.3 2,522.4 843.9 Equity 1,140.7 982.1 158.6 Adjusted net financial debt 1,879.9 1,328.4 551.5 Other 345
Slide 26: Adjusted EPS
Adjusted EPS (in EUR cents) +7 91 90 (4) (4) 3,933.1 +3.3% FY 2013 Profit before tax Tax Currencies FY 2014 and minorities EPS 79 (3) (5) (4) 67 Dividend of EUR 48 cents/share to be proposed at the AGM of May 20, 2015  Stable vs 2013  53% of adjusted EPS © Copyright Bureau Veritas / February 26, 2
Slide 28: Lower oil price environment
Lower oil price environment Bureau Veritas’ Oil&Gas exposure % 2014 REVENUE BUSINESS DRIVERS REVENUE IMPACT  Consumption  Resilience (=) PRODUCT 9% Commodities  Volumes / Trade flows  Oil sands (-)  Production (Maxxam) Industry  Exploration spending CAPEX 8% Marine & Offshore  Midstream/downs
Slide 29: Marine & Offshore
Marine & Offshore Key financials 2014 Highlights  Q4 organic growth +2.8%  In-service (57% of revenue) • Fleet up 6.3% in GT in 2014 +7.1% Revenue • Market share gains FY 13 FY 14 organic (EUR m)  New construction (43%) growth • Order book +3.3m GT in 2014 • Surge in equipment certification Margi
Slide 30: Industry
Industry Key financials 2014 Highlights  Q4 Organic growth of +8.2%  Driven by USA, Middle-East, Asia  Strengthening operations: +5.8% Revenue FY 13 FY 14 organic • Global Key Account Management (EUR m) • Global network production systems growth  Key win: Yamgaz  Acquisitions +4.3%: DTI (USA) M
Slide 31: In-Service Inspection & Verification
In-Service Inspection & Verification Key financials 2014 Highlights  Q4 Organic growth (0.4)%  Europe still challenging  Commercial initiatives in the US +1.2% Revenue FY 13 FY 14 organic  Acquisitions +19%: Maxxam (EUR m) growth  Lean management deployment Margin Revenue breakdown 2015 outlook
Slide 32: Construction
Construction Key financials 2014 Highlights  Q4 Organic growth of (1.9)%  Tough markets: France, Japan  Growth engines: China, +0.1% Revenue FY 13 FY 14 organic the Middle-East (EUR m) growth  Acquisitions +6.5%: Sistema PRI (Brazil)  Portfolio rationalization, Margin Lean management Revenue br
Slide 33: Certification
Certification Key financials 2014 Highlights  Q4 organic growth +4.9% • European key accounts • Supply chain services +0.8% • Second party audits Revenue FY 13 FY 14 organic (EUR m) FY 13 FY 14 • Training growth  Subdued growth in FY: end of Kyoto Protocol program (CDM) Margin  Slight improvement
Slide 34: Commodities
Commodities Key financials 2014 Highlights  Q4 Organic growth of 4%  O&P: strong in US and Europe  M&M: favorable base, Latam +1.5% Revenue FY 13 FY 14 organic contracts offset by Coal Indonesia (EUR m) growth  Agri: Eastern Europe harvest  Acquisitions +9.3%: Maxxam, Analysts, Andes Control Ma
Slide 35: Government Services & International Trade
Government Services & International Trade Key financials 2014 Highlights  Q4 organic stabilizing (1.5)%  FY 2014 impacted by Iraq, and 2013 termination of contracts (7.6)% (Angola, Ivory Coast) Revenue FY 13 FY 14 organic (EUR m) growth  Commercial success: new contracts, renewals, expansion  Ac
Slide 36: Consumer Products
Consumer Products Key financials 2014 Highlights  Q4 organic growth of +4.5%  Good growth in Softlines  Strong growth in Wireless/Food +5.4% Revenue FY 13 FY 14 organic  Toys stabilizing in Q4 (EUR m) growth  Inspection: large accounts gains  Acquisitions +5%: Maxxam  Lean, productivity, proc
Slide 38: Outlook
Outlook Outlook for 2015  In 2015, Bureau Veritas expects a slight improvement in organic growth over 2014, taking into account the current oil market conditions.  The operating margin should also improve moderately thanks to ongoing operational excellence initiatives.  The Group will continue to
Slide 39: Growth acceleration
Agenda Highlights Financial review Business review 2015 Outlook GROWTH ACCELERATION Q&A Appendix Ambitions stated for these growth initiatives are indicative of the order of magnitude of each initiative, they are not however to be viewed as a cumulative set of guidance; a detailed and consolidated u
Slide 40: Growth engine model
Growth engine model Organic growth External growth  Regulations / Sustainability concerns / Brand  Market consolidation protection  New expertise  Industrialization of fast-growing economies  Privatization  Aging assets in mature economies  Geographical expansion  International / Intra-regio
Slide 41: OPEX in specific markets
OPEX in specific markets 1  Resilience EUR 55bn Why TIC market  Proven track record in Marine & Construction Oil & Gas Mining Chemicals Power  Cross sell in Mining and Oil & Gas Market Breakdown  Capitalize on completed Capex projects by Type of Service How  Replicate in Chemicals & Power, solu
Slide 42: Focus on key accounts
Focus on key accounts 2  Outsourcing and privatization trend Why ~40% of  Relatively low penetration of large corporations global TIC In-house  Align commercial organization Penetration within  Leverage long-term client relationships Global Top 2000 companies1 How  Pro-actively develop outsourc
Slide 43: Chinese domestic market
Chinese domestic market 3  Potential TIC market comparable to US / Europe  Domestic market seen as an engine of Chinese Why growth by authorities in China Become a key  Increasing Consumer awareness for safety and domestic player sustainability  Targeted partnerships, Joint Ventures or CTS Testi
Slide 44: Focus on Agri / Food
Focus on Agri / Food 4  Growing number of safety and control standards Why  Complexity of global supply chains  Increasing brand protection requirements  End-to-end service offering: from “farm to fork” How  Local development in major exporting countries  Deployment of global contracts  McDon
Slide 45: Focus on E&E / Smart World
Focus on E&E / Smart World 5  Increasing electronic content in consumer Why goods BV Global Leader  Explosion of connectivity between objects in wireless and connected objects  Increasing business with Global brands and Western retailers How  Strengthening E&E capabilities in developing countrie
Slide 46: Illustrating the magnitude of these initiatives
Illustrating the magnitude of these initiatives 1 2 3 4 5 OPEX in Chinese specific Key accounts domestic Agri / Food E&E markets market AMBITION 1 Opex > 50% of c.2pts of organic Become a key Double revenue #1 in fast growing Industry revenue growth domestic player within five years segments SUPPORT
Slide 49: Revenue by business
Revenue by business Q4 2014 FY 2014 EURm Organic Scope FX EURm Organic Scope FX Marine & Offshore 90.1 2.8% 15.3% 1.7% 323.8 7.1% 4.8% (1.8)% Industry 263.0 8.2% 3.4% (0.3)% 976.4 5.8% 4.3% (5.9)% IVS 156.1 (0.4)% 19.9% 1.8% 560.0 1.2% 19.0% (0.3)% Construction 129.6 (1.9)% 11.2% 0.9% 462.1 0.1% 6.5
Slide 50: Adjusted operating profit by business
Adjusted operating profit by business (in EUR millions) Adjusted operating profit Adjusted operating margin FY 2014 FY 2013 Var. FY 2014 FY 2013 Var. Marine & Offshore 81.0 78.2 3.6% 25.0% 26.6% (160) bps Industry 146.6 143.0 2.5% 15.0% 15.3% (30) bps IVS 79.3 64.5 22.9% 14.2% 13.8% +40 bps Construc
Slide 51: Half-year adjusted operating margin
Half-year adjusted operating margin (in EUR millions) H1 2014 H2 2014 H1 2013 H2 2013 Marine & Offshore 26.7% 23.5% 27.2% 26.0% Industry 14.8% 15.2% 14.6% 15.9% IVS 11.4% 16.6% 10.4% 17.0% Construction 13.0% 16.4% 11.9% 17.3% Certification 16.6% 17.8% 17.9% 16.4% Commodities 11.2% 12.9% 11.6% 10.0%
Slide 52: Adjusted net profit
Adjusted net profit (in EUR millions) FY 2014 FY 2013 Profit before income tax 482.9 525.6 Income tax expense (175.4) (169.1) Non controlling interests (12.9) (11.4) Attributable net profit 294.6 345.1 Other operating expenses 130.9 67.3 Tax effect on other operating expenses (34.2) (15.4) Attributa
Slide 53: Consolidated income statement
Consolidated income statement FY 2014 FY 2013 (in EUR millions) Revenue 4,171.5 3,933.1 Purchase and external charges (1,178.6) (1,120.5) Personnel costs (2,149.9) (2,017.1) Taxes other than on income (56.4) (53.8) Net (additions to)/reversals of provisions (11.4) (19.4) Depreciation and amortizatio
Slide 54: Consolidated comprehensive income
Consolidated comprehensive income (in EUR millions) FY 2014 FY 2013 Net profit 307.5 356.5 Currency translation differences 102.2 (239.4) Cash-flow hedges (9.9) (6.9) Income tax on items reclassified to profit or loss (1.9) 3.5 Total of other comprehensive income reclassified to profit or loss 90.4
Slide 55: Consolidated financial position
Consolidated financial position (in EUR millions) Dec. 2014 Dec. 2013 Goodwill 1,814.2 1,412.1 Intangible assets 650.6 374.5 Property, plant and equipment 475.6 401.3 Other non-current assets 188.0 168.5 Total non-current assets 3,128.4 2,356.4 Trade and other receivables 1,325.0 1,122.5 Other curre
Slide 56: Statement of change in equity
Statement of change in equity (in EUR millions) Attributable to Currency Share Share Other Total Shareholders translation Minority capital premium reserves equity of the reserves interests Company December 31, 2013 53.0 64.5 (155.6) 1,020.2 982.1 956.1 23.3 Capital increase 0.1 - - - 0.1 0.1 - Exerc
Slide 57: Cash flow statement
Cash flow statement (in EUR millions) FY 2014 FY 2013 Profit before income tax 482.9 525.6 Elimination of cash flows from financing and investing activities 83.0 57.1 Provisions and other non-cash items 69.9 25.8 Depreciation, amortization and impairment 216.7 149.4 Movements in working capital attr
Slide 58: Adjusted net financial debt
Adjusted net financial debt (in EUR millions) Dec. 2014 Dec. 2013 Bank borrowings (non-current) 1,944.8 1,407.1 Bank borrowings (current) 144.1 71.3 Bank overdrafts 9.8 32.9 Gross financial debt 2,098.7 1,511.3 Total cash and cash equivalents 220.1 190.6 Net financial debt 1,878.6 1,320.7 Impact of
Slide 59: Earnings per share
Earnings per share (in EUR / share) FY 2014 FY 2013 Basic EPS 0.67 0.79 Basic adjusted EPS 0.90 0.91 Weighted average number of shares 437,183,943 438,576,063 Diluted EPS 0.66 0.77 Diluted adjusted EPS 0.88 0.89 weighted average number of shares for diluted earnings 443,796,626 446,293,888 © Copyrig
Slide 60: Ownership at December 31, 2014
Ownership at December 31, 2014 1.2% Treasury shares Wendel 46.1% 50.8% Managers and employees 1.9% Free float © Copyright Bureau Veritas / February 26, 2015 / p 60
Slide 61: Revenue by main currency
Revenue by main currency 2014 Revenue by functional currency 2014 vs 2013 variations @ average rates / year-end rates Other 0.0% 20% Euro USD 13.6% 29% CNY (0.3)% 10.8% KRW AUD (6.4)% 4.0% 2% JPY CAD (6.7)% 4.3% 2% COP BRL (8.1)% 1.1% 3% GBP 5.3% CLP 7.0% (13.0)% 3% CLP (1.4)% GBP 3% COP (6.4)% BRL

Bureau Veritas — FY2014 Earnings Presentation on 6ix

Bureau Veritas Sa — FY2014 Earnings Presentation

Slide 1: 2014 Full-Year Results

Slide 2: Agenda

Slide 3: Highlights

Slide 4: 2014 key highlights

Slide 5: Geographical footprint

Slide 6: Portfolio of businesses

Slide 7: Acquisitions in 2014

Slide 8: Accelerated development in China in 2015

Slide 9: Operational excellence

Slide 10: A new commercial organization

Slide 11: Financial review

Slide 12: Summary income statement

Slide 13: Revenue growth

Slide 14: 2014 revenue growth analysis

Slide 15: Quarterly organic revenue growth

Slide 16: Organic growth by geography

Slide 17: Adjusted operating profit

Slide 18: Adjusted operating margin drivers

Slide 19: Other operating expenses

Slide 20: Net financial expense

Slide 21: Effective tax rate (ETR)

Slide 22: Summary cash flow statement

Slide 23: Adjusted financial debt

Slide 24: Leverage ratio

Slide 25: Summary financial position

Slide 26: Adjusted EPS

Slide 27: Business review

Slide 28: Lower oil price environment

Slide 29: Marine & Offshore

Slide 30: Industry

Slide 31: In-Service Inspection & Verification

Slide 32: Construction

Slide 33: Certification

Slide 34: Commodities

Slide 35: Government Services & International Trade

Slide 36: Consumer Products

Slide 37: 2015 Outlook

Slide 38: Outlook

Slide 39: Growth acceleration

Slide 40: Growth engine model

Slide 41: OPEX in specific markets

Slide 42: Focus on key accounts

Slide 43: Chinese domestic market

Slide 44: Focus on Agri / Food

Slide 45: Focus on E&E / Smart World

Slide 46: Illustrating the magnitude of these initiatives

Slide 47: Q&A

Slide 48: Appendix

Slide 49: Revenue by business

Slide 50: Adjusted operating profit by business

Slide 51: Half-year adjusted operating margin

Slide 52: Adjusted net profit

Slide 53: Consolidated income statement

Slide 54: Consolidated comprehensive income

Slide 55: Consolidated financial position

Slide 56: Statement of change in equity

Slide 57: Cash flow statement

Slide 58: Adjusted net financial debt

Slide 59: Earnings per share

Slide 60: Ownership at December 31, 2014

Slide 61: Revenue by main currency