Slide 1: Full Year 2018 Results
FULL YEAR 2018 RESULTS FEBRUARY 28, 2019
Slide 2: Disclaimer
Disclaimer This presentation contains statements related to our future business and financial performance and future events or developments involving Bureau Veritas that may constitute forward-looking statements. These statements are based on current plans and forecasts of Bureau Veritas’ management
Slide 3: Agenda
Agenda HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK Q&A APPENDIX
Slide 4: Highlights
VERITAS HIGHLIGHTS
Slide 5: Bureau Veritas delivers a strong set of 2018 results
Bureau Veritas delivers a strong set of 2018 results ACHIEVEMENTS Full year organic revenue growth to accelerate vs. full year 2017 +4.0% Organic growth ✔ vs. +2.2% in 2017 Full year adjusted operating margin to slightly improve at constant currency vs. full year 2017 +20bps✔ y/y at 16.1% Full year
Slide 6: Full Year 2018 financial highlights
Full Year 2018 financial highlights Organic revenue growth of +4.0% (Q4 at +4.4%) GROUP REVENUE €4.8bn Growth Initiatives up 6.3% organically and Base Business up 2.9% organically (+4.1% in Q4 2018) External growth of +3.0% (Q4 at +2.9%) with 6 acquisitions completed +7.0% at cc Negative cur
Slide 7: Key 2018 achievements
Key 2018 achievements STRENGTHENED ORGANISATION GROUP’S TRANSFORMATION ACCELERATING Led by a reinforced Management team Supported by Key Account Management and Digital 5 new members in the Group’s Executive committee Key accounts strategy redesigned with increased coordination from Global Servic
Slide 8: Bureau Veritas further enhancing its cyclical resilience
Bureau Veritas further enhancing its cyclical resilience 2018 PORTFOLIO BY NATURE OF SERVICES IN PERCENTAGE OF GROUP REVENUE Capex B&I US Opex & Systems B&I China Repeat business with long term B&I Europe = 22% visibility and high retention rates, mainly driven by regulation and Oil & Gas standards
Slide 9: Financial Review
FINANCIAL REVIEW
Slide 10: Full Year 2018 revenue growth
Full Year 2018 revenue growth REVENUE EVOLUTION +7.0% at constant currency +3.0% (4.7)% +4.0% 4,689.4 4,795.5 FY 2017 Organic 1 Scope Foreign Exchange FY 2018 (1) Organic growth represents the percentage of revenue growth (presented at Group level and for each activity) based on constant scope of co
Slide 11: Full Year 2018 revenue growth by business
Full Year 2018 revenue growth by business % of @ constant revenue currency 27% Buildings & Infrastructure 4.3% 10.9% +15.2% 8% Certification 7.8% +7.8% 22% Agri-Food & Commodities 4.5% 1.1% +5.6% 14% Consumer Products 4.3% 0.7% +5.0% 22% Industry 3.5% +3.5% 7% Marine & Offshore (0.9)% 0.2% (0.7)% 10
Slide 12: Q4 2018 revenue growth by business
Q4 2018 revenue growth by business % of @ constant revenue currency 27% Buildings & Infrastructure 4.5% 9.5% +14.0% 7% Marine & Offshore 6.9% 0.4% +7.3% 22% Agri-Food & Commodities 4.9% 1.6% +6.5% 22% Industry 6.2% +6.2% 14% Consumer Products 4.0% 0.5% +4.5% 8% Certification -3.5% (3.5)% 100% Total
Slide 13: Organic growth driven by both Base Business & Growth Initiatives
Organic growth driven by both Base Business & Growth Initiatives ORGANIC REVENUE FOR THE BASE BUSINESS FULL YEAR 2018 PERFORMANCE 3.7% 2.1% 1.3% 64% Base Business grew 2.9% organically in FY 2018 Base Business is speeding up organically at (1.1)% +4.1% in Q4 benefiting from Oil & Gas Capex (2.2)%
Slide 14: 2018 acquisitions adding c.€85m of revenue
2018 acquisitions adding c.€85m of revenue1 2019 YEAR-TO-DATE ANNOUNCEMENTS B&I AGRI-FOOD JANUARY, JANUARY FEBRUARY c.€23m MARCH & JULY1 c.€70m Consulting and support services for total of €10m white certificate projects in France Technical Assessment and Project Management Agri-Food testing and Ass
Slide 15: Full Year 2018 key financial metrics
Full Year 2018 key financial metrics FINANCIAL HIGHLIGHTS y/y at IN EUR MILLIONS FY 2018 FY 2017 y/y constant currency Revenue 4,795.5 4,689.4 +2.3% +7.0% Adjusted operating profit1 758.0 745.5 +1.7% +8.4% Adjusted operating margin1 15.8% 15.9% (10)bps +20bps Operating profit 637.2 606.3 +5.1% +12.8
Slide 16: Adjusted operating margin
Adjusted operating margin GROUP MARGIN EVOLUTION MARGIN BY BUSINESS Change Organic FY 2018 FY 2017 y/y (bp) y/y (bp) Marine & Offshore 21.1% 22.0% (90) +10 +20bps 0bps (30)bps Agri-Food & Commodities 12.3% 12.5% (25) (10) Industry 12.4% 12.1% +20 +35 16.1% 15.9% 15.8% Buildings & Infrastructure 14.8
Slide 17: From adjusted operating profit to operating profit
From adjusted operating profit to operating profit ADJUSTMENT ITEMS IN EUR MILLIONS FY 2018 FY 2017 y/y Adjusted operating profit 758.0 745.5 +1.7% Amortization of intangibles (75.1) (77.1) (2.6)% Actions taken mainly in government services, Restructuring (42.1) (57.1) (26.3)% commodities related-ac
Slide 18: Net financial expenses
Net financial expenses IMPROVING FINANCIAL RESULT IN EUR MILLIONS FY 2018 FY 2017 y/y Decrease in average indebtedness, and to Net financial charges (82.5) (86.8) (5.0)% some extent the lower average cost of debt Foreign exchange gain/loss (5.7) (12.1) (52.9)% Interest charge on pension (2.6) (3.1)
Slide 19: Tax / Tax rate
Tax / Tax rate ADJUSTED EFFECTIVE TAX RATE NORMALIZING IN 2018 IN EUR MILLIONS FY 2018 FY 2017 y/y Variance of exceptional items in 2018 vs. 2017 Profit before Tax 544.4 503.2 +8.2% during which the Group benefited from the refund Tax (189.3) (164.8) +14.9% of the 3% dividend Effective Tax Rate (ETR
Slide 20: Cash flow statement
Cash flow statement STRONG CASH IMPROVEMENT IN EUR MILLIONS FY 2018 FY 2017 Change y/y Profit before income tax 544.4 503.2 +8.2% Elimination of financing and investing activities 87.4 103.8 (15.8)% Strong increase in the free cash flow (+42.2% on an organic Provisions and other non-cash items 25.8
Slide 21: Move For Cash program starting to pay off
Move For Cash program starting to pay off WORKING CAPITAL REQUIREMENT / REVENUE RATIO MOVE FOR CASH CONTINUING TO BE DEPLOYED Operations and Finance cash champions network 10.0% Global network of 140 “cash champions” across the Group within all 9.7%(1) functions, not exclusively finance Deployment
Slide 22: Solid financial structure
Solid financial structure ADJUSTED NET DEBT EVOLUTION DEBT MATURITY PROFILE AS OF DEC. 31, 2018 Bond 87 USPP Dec. 31, Share Dec. 31, 55 FCF Acquis. Dividends Forex Other Schuldschein 2017 buybacks 2018 60 Other 184 98 500 500 500 102 (144.4) 200 207 200 175 153 135 (277.7) (2,094.4) +478.4 (28.3) (3
Slide 23: Business Review
BUREAU VERITAS BUSINESS REVIEW
Slide 24: Marine & Offshore
Marine & Offshore (7% of revenue, 10% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 STRATEGIC INITIATIVES New Construction: low single-digit decline, with H2 IN EUR MILLIONS FY 2018 FY 2017 Var. New orders Order book In-Service fleet improvement led by new equipment certification Revenue (4.5)
Slide 25: Marine market perspective
Marine market perspective WORLDWIDE NEW SHIP ORDERS BUREAU VERITAS NEW SHIP ORDER BOOK IN MGT IN NUMBER OF SHIPS, FOR SHIPS ABOVE 5,000 GT 120 Bulk Cargo 100 Container 80 Tanker 20-year average Gas 60 Offshore Passenger 40 Other 20 Very diversified order book with expanding shares for Bulk, 0 Tank
Slide 26: Agri-Food & Commodities
Agri-Food & Commodities (22% of revenue, 17% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 STRATEGIC INITIATIVES O&P (+1.9%): high single-digit growth in Europe, IN EUR MILLIONS FY 2018 FY 2017 Var. and low growth in North America (price pressure Agri-Food Revenue +0.1% in traditional cargo in
Slide 27: Industry
Industry (22% of revenue, 17% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 STRATEGIC INITIATIVES Oil & Gas Capex improved throughout the year IN EUR MILLIONS FY 2018 FY 2017 Var. (-6.6%) skewed to H2 (+3.6%) Revenue (3.2)% US & S.Korea (+) ; Latam (=); Asia (-) +6.0% OPEX O&G* 1,061.3 1,096
Slide 28: Industry: diversification led by Opex Growth Initiative
Industry: diversification led by Opex Growth Initiative O&G REVENUE BY SPENDING TYPE O&G REVENUE BY REGION 8% 24% Opex Europe 40% Capex Africa, Middle East 34% Asia Pacific 60% Americas 34% 10 points increase in Opex share since the start of the 2020 Geographically balanced Strategic Plan Buil
Slide 29: Buildings & Infrastructure
Buildings & Infrastructure (27% of revenue, 25% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 STRATEGIC INITIATIVES Construction-related activities (42% of IN EUR MILLIONS FY 2018 FY 2017 Var. divisional revenue) mid-single digit growth B&I Revenue +13.2% Spread across all geographies, particu
Slide 30: Buildings & Infrastructure: Focus on Bureau Veritas French operations
Buildings & Infrastructure: Focus on Bureau Veritas French operations B&I FRANCE BY SPENDING TYPE B&I FRANCE CAPEX BY ASSET TYPE 20% 20% 27% Residential Opex Commercial Capex 10% Infrastucture Other including 73% office buildings 50% Very geared to Opex-related services Diversified portfolio wit
Slide 31: Certification
Certification (8% of revenue, 9% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES Growth spread across most regions and service IN EUR MILLIONS FY 2018 FY 2017 Var. categories Global Certification Revenue +1.6% High single-digit growth in Europe, Asia and Growth Initiativ
Slide 32: Consumer Products
Consumer Products (14% of revenue, 22% of profit) KEY FINANCIALS FY 2018 HIGHLIGHTS 2020 STRATEGIC INITIATIVES E&E: mid-single digit growth primarily driven by IN EUR MILLIONS FY 2018 FY 2017 Var. double digit growth in Automotive and high single Revenue +0.5% digit growth in Mobile testing; slowd
Slide 33: Outlook
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Slide 34: 2019 Outlook
2019 Outlook Solid organic Continued adjusted Sustained strong revenue growth operating margin cash flow improvement at generation constant currency FULL YEAR 2018 RESULTS 34
Slide 35: 2020 non-financial Ambition
2020 non-financial Ambition Health & Safety Inclusion Environment2 Safety is an “absolute” Achieve 25% female Reduce CO2 emissions Ambition is clear: 0 accident representation in the by 10% per FTE Group’s executive Increase the use of Reduce by 50% accidents rates management team renewable ener
Slide 36: Conclusion
Conclusion Strong set of 2018 results Group transformation fully engaged Momentum to continue in 2019 Delivery of 2020 ambition on track FULL YEAR 2018 RESULTS 36
Slide 37: Q&A
Q&A
Slide 38: 2019 Financial Calendar & Contacts
2019 Financial Calendar & Contacts 2019 AGENDA Q1 2019 revenue – April 25, 2019 INVESTOR RELATIONS DEPARTMENT Barclays, TIC Conference, London – June 6, 2019 BUREAU VERITAS HEAD OFFICE – 40/52 BOULEVARD DU PARC Exane BNP, CEO Conference, Paris – June 12, 2019 92200 NEUILLY-SUR-SEINE, FRANCE H1 2
Slide 39: Appendix
Te28 BUREAU VERITAS APPENDIX
Slide 40: Full Year 2018 revenue by business
Full Year 2018 revenue by business FY 2018 FY 2017 IN EUR MILLIONS €m Organic Scope FX €m Organic Scope FX Marine & Offshore 348.6 (0.9)% +0.2% (3.8)% 364.9 (5.3)% +0.6% (2.2)% Agri-Food & 1,073.7 +4.5% +1.1% (5.5)% 1,072.6 +2.4% +5.6% (1.2)% Commodities Industry 1,061.3 +3.5% +0.0% (6.7)% 1,096.3 (
Slide 41: Q4 2018 revenue growth
Q4 2018 revenue growth REVENUE EVOLUTION +7.3% at constant currency +4.4% +2.9% (2.0)% 1,260.6 1,196.6 Q4 2017 Organic 1 Scope Foreign Exchange Q4 2018 (1) Organic growth represents the percentage of revenue growth (presented at Group level and for each activity) based on constant scope of consolida
Slide 42: Q4 2018 revenue by business
Q4 2018 revenue by business Q4 2018 Q4 2017 IN EUR MILLIONS €m Organic Scope FX €m Organic Scope FX Marine & Offshore 93.4 +6.9% +0.4% (1.5)% 88.3 (4.2)% +0.0% (4.0)% Agri-Food & 277.2 +4.9% +1.6% (2.3)% 265.9 +4.9% +2.2% (5.5)% Commodities Industry 276.1 +6.2% +0.0% (4.2)% 270.8 (0.2)% (1.2)% (5.8)
Slide 43: Adjusted Operating Profit by business
Adjusted Operating Profit by business Adjusted operating profit (€m) Adjusted operating margin (%) IN EUR MILLIONS FY 2018 FY 2017 Var. (%) FY 2018 FY 2017 Var. (bp) Marine & Offshore 73.5 80.2 (8.4)% 21.1% 22.0% (90)bps Agri-Food & Commodities 132.0 134.6 (1.9)% 12.3% 12.5% (25)bps Industry 131.1 1
Slide 44: Consolidated income statement
Consolidated income statement IN EUR MILLIONS FY 2018 FY 2017 Revenue 4,795.5 4,689.4 Purchase and external charges (1,418.0) (1,394.1) Personnel costs (2,507.1) (2,449.0) Taxes other than on income (46.2) (46.4) Net (additions to) / reversals of provisions (11.8) (11.5) Depreciation and amortizatio
Slide 45: Consolidated statement of financial position
Consolidated statement of financial position IN EUR MILLIONS FY 2018 FY 2017 Goodwill 2,011.6 1,965.1 Intangible assets 634.6 640.2 Property, plant and equipment 471.1 486.3 Other non-current assets 250.1 269.6 Total non-current assets 3,367.4 3,361.2 Trade and other receivables 1,615.9 1,546.6 Othe
Slide 46: Consolidated statement of cash flow
Consolidated statement of cash flow IN EUR MILLIONS FY 2018 FY 2017 Profit before income tax 544.4 503.2 Elimination of cash flows from financing and investing activities 87.4 103.8 Provisions and other non-cash items 25.8 (0.3) Depreciation, amortization and impairment 200.3 203.7 Movements in work
Slide 47: Adjusted net financial debt
Adjusted net financial debt IN EUR MILLIONS FY 2018 FY 2017 Non-current borrowings and debt (2,655.7) (2,240.0) Current borrowings and debt (487.3) (199.2) Bank overdrafts (11.7) (9.8) Gross financial debt (3,154.7) (2,449.0) Total cash and cash equivalents 1,046.3 364.3 Net financial debt (2,108.4)
Slide 48: Earnings per share
Earnings per share IN EUR MILLIONS FY 2018 FY 2017 Basic EPS 0.76 0.71 Basic adjusted EPS 0.96 0.95 Weighted average number of shares 435,786,895 436,422,741 Diluted EPS 0.76 0.70 Diluted adjusted EPS 0.95 0.95 Weighted average number of shares for diluted earnings 439,376,999 439,934,069 FULL YEAR
Slide 49: Portfolio of business
Portfolio of business REVENUE BY BUSINESS ADJUSTED OPERATING PROFIT Marine & Offshore Marine & Offshore 14% 7% 10% 22% Agri-Food & Commodities Agri-Food & Commodities 8% 22% 17% Industry Industry 2018 9% 2018 Buildings & Infrastructure Buildings & Infrastructure 27% Certification 17% Certification 2
Slide 50: Revenue is growing in all geographies
Revenue is growing in all geographies REVENUE BY GEOGRAPHIC AREA REVENUE GROWTH BY NATURE 13.2% Organic growth Acquisition growth Americas Asia 25% Pacific 31% 8.9% 5.7% 0.2% Africa, 4.7% Middle East 1.8% 9% Europe 2.4% 5.5% 35% 4.3% 0.7% 2.9% 1.7% Americas Europe Africa, Asia Pacific Middle-East RE
Slide 51: Negative forex impact in Full Year 2018
Negative forex impact in Full Year 2018 REVENUE CURRENCY EXPOSURE CURRENCY CHANGE Y/Y OTHER 11.6% USD (and pegged) (4.3)% MXN 0.8% CNY (2.3)% PEN 0.9% ARS 0.9% CAD (4.2)% COP 1.2% EUR 28.4% KRW 1.4% GBP (0.9)% TWD 1.4% AUD (6.7)% SGD 1.5% BRL (16.3)% INR 1.5% CLP (3.2)% JPY 2.0% JPY (2.8)% CLP 2.5%
Slide 52: Full Year 2018 restructuring: EUR 42.1 million
Full Year 2018 restructuring: EUR 42.1 million BY BUSINESS BY GEOGRAPHY 14% 12% 15% Marine & Offshore Europe Agri-Food & Commodities 18% 16% Africa, Middle East Industry Asia Pacific 34% B&I 61% Americas Other 8% 22% FULL YEAR 2018 RESULTS 52
Slide 53: Oil & Gas exposure
Oil & Gas exposure <20% of 2018 Group revenue MARKET BV BUSINESS % OF 2018 REVENUE MAIN DRIVER CAPEX Industry, <4% National Oil Companies / Majors Capex / infrastructure projects Buildings & and construction activity c.10% Infrastructure OPEX Industry, 6% National Oil Companies / Majors Opex / i
Slide 54: Ownership at December 31, 2018
Ownership at December 31, 2018 STABLE SHAREHOLDING STRUCTURE 1.4% 35.3% Wendel Managers & Employees 61.9% Free Float Treasury shares 1.4% FULL YEAR 2018 RESULTS 54
Slide 55: Glossary
Glossary Operating Profit (AOP) excludes amortization of acquisition intangibles, goodwill IoT: Internet of Things impairment, restructuring, acquisition and disposal-related items (adjustment items) IMO: International Maritime Organization ASR: Accident Severity Rate LNG: Liquefied Natural Gas Adju
Slide 56: BV at a glance
BV at a glance FY 2018 Market % Revenue % AOP Margin FY 2018 Level of Business mix Business activities organic position FY 2018 FY 2018 FY 2018 revenue cyclicality2 growth Recurring Cyclical Opex: 61% Marine & Offshore Top 2(1) 7% 10% 21.1% 348.6 (0.9)% Capex: 39% O&P: 37% Recurring Cyclical M&M: 28
Slide 57: Well diversified sources of financing with a balanced maturity profile
Well diversified sources of financing with a balanced maturity profile DEBT MATURITY PROFILE AS OF DEC. 31, 2018 DEBT BREAKDOWN Bond 2% 87 8% 10% USPP 55 Schuldschein Bond 60 Other USPP Fixed rate 30% Schuldschein Floating rate 184 Other 60% 98 500 500 500 102 90% 200 207 200 175 153 135 2019 2020 2
Slide 58: A lean organisation: Executive Committee
A lean organisation: Executive Committee FULL YEAR 2018 RESULTS 58
Slide 59: Reaffirmed 2020 Ambition
Reaffirmed 2020 Ambition Add €1.5bn Above 17% Continuous high of incremental adjusted operating Free Cash Flow revenue1 margin1 generation Half organic Half acquisition 5-7% organic growth by 2020 (1) At 2015 plan’s initial exchange rates (as presented during October 2015 Investor Days) FULL YEAR 20
Slide 60: Bureau Veritas - Move Forward with Confidence
BUREAU PVERITAS | VERITAS Move Forward with Confidence