Bureau Veritas Sa · EURONEXT:BVI

Bureau Veritas Sa — FY2008 Earnings Presentation

51 slides from Bureau Veritas Sa's earnings presentation, Mar 26, 2009

  1. Slide 1: 2008 Full-Year Results

    Frank Piedelièvre Chief Executive Officer 2008 Full-Year Results François Tardan March 26, 2009 Chief Financial Officer Copyright©2009 Bureau Veritas - All rights reserved.

  2. Slide 2: Agenda

    Agenda ► Highlights ► Financial review ► Business review ► Outlook ► Q&A ► Appendix March 26, 2009 Copyright©2009 Bureau Veritas - All rights reserved. 2

  3. Slide 3: Highlights

    Highlights Frank Piedelièvre Chief Executive Officer Copyright©2009 Bureau Veritas - All rights reserved.

  4. Slide 4: Bureau Veritas at a glance

    Bureau Veritas at a glance 2008 revenue breakdown Government Services & Marine International Trade 6% 11% ► A global leader in conformity assessment Consumer Products services in the areas of quality, health 12% and safety, environment and social Industry responsibility (QHSE) 19% Certification Reve

  5. Slide 5: Extensive geographic footprint

    Extensive geographic footprint Americas (15% of revenue) France (27% of revenue) EMEA (1) (35% of revenue) Asia-Pacific (23% of revenue) 153 locations, including 165 locations, including 388 locations, including 205 locations, including 31 laboratories 14 laboratories 45 laboratories 66 laboratories

  6. Slide 6: 2008 financial highlights

    2008 financial highlights ► Strong financial performance in 2008 above guidance In excess of 20% increase in revenue and adjusted operating profit (vs a guidance of 15%), at 2007 exchange rates and excluding any contribution from 2008 acquisitions ► Revenues up 23% to €2.5bn ► Adjusted Operating Pro

  7. Slide 7: Four key drivers of financial performance

    Four key drivers of financial performance 2. Contribution from acquisitions to top- 1. Organic top-line growth line growth 13% 14% 10% 7% 5% 5% 2006 2007 2008 2006 2007 2008 4. Net cash generated from operating 3. Adjusted operating margin activities CAGR: +25% €m +140bps at constant perimeter 315 1

  8. Slide 8: Financial review

    Financial review François Tardan Chief Financial Officer Copyright©2009 Bureau Veritas - All rights reserved.

  9. Slide 9: Summary income statement

    Summary income statement (in € millions) 2008 2007 Change Revenue 2,549.4 2,066.9 +23.3% Adjusted EBITDA 431.6 344.5 +25.3% Adjusted operating profit (1) 387.6 312.1 +24.2% Adjusted operating margin 15.2% 15.1% +10bps Other operating expense (19.1) (46.6) (59.0)% Operating profit 368.5 265.5 +38.8%

  10. Slide 10: FY 2008 revenue

    FY 2008 revenue +14.2% 2,549.4 (in € millions) +12.8% (3.7)% 2,066.9 Total growth of 23.3% FY 2007 revenue Organic External Currency FY 2008 Revenue Growth Growth Impact ► Organic growth of 12.8% ► Growth from acquisitions of 14.2% (mainly ECA in Spain, Amdel and CCI in Australia) ► Negative currenc

  11. Slide 11: 15 acquisitions in 2008 – c. €150m of annual revenues

    15 acquisitions in 2008 – c. €150m of annual revenues Name Date Business Country Revenues (1) Ziller Ass Jan. 08 Fire safety equipment inspection services Germany 2.1 Tecniter Jan. 08 Construction code compliance Italy 0.4 Codde Jan. 08 Energy efficiency auditing tools France 0.4 Cesmec April. 08 In

  12. Slide 12: Adjusted operating profit

    Adjusted operating profit (in € millions) 2008 2007 Change Operating profit 368.5 265.5 +38.8% Amortisation of business combination intangibles 17.9 9.6 +€8.3m Goodwill impairment 1.2 0.3 +€0.9m Management fees (1) - 1.6 €(1.6)m Costs related to the IPO - 35.1 €(35.1)m Total other operating expense

  13. Slide 13: Net financial expense

    Net financial expense (in € millions) 2008 2007 Change (€m) Finance costs, net (52.3) (34.5) (17.8) Other financial income (expense) (17.4) (13.2) (4.2) Fair value adjustments on current financial (4.3) (2.9) (1.4) assets (1) Foreign exchange gains (losses) (7.1) (8.3) +1.2 Interest cost on pension

  14. Slide 14: Adjusted net profit

    Adjusted net profit (in € millions) 2008 2007 Change Adjusted operating profit 387.6 312.1 +24.2% Net financial expense (69.7) (47.7) +46.1% Adjusted income tax (1) (80.2) (66.7) +20.2% Net income from activities held for sale - 0.6 Share of profit of associates 0.1 - Adjusted net profit 237.8 198.3

  15. Slide 15: Earning per share (EPS) and dividend

    Earning per share (EPS) and dividend EPS (1) Adjusted EPS (2) +33.8% +16.8% 2.15 2.02 1.84 1.51 2007 2008 2007 2008 A A dividend dividend of of €72 €72 cents cents per per share share will will be be proposed proposed to to the the AGM AGM of of June June 3, 3, 2009, 2009, representing one third of

  16. Slide 16: Summary cash flow statement

    Summary cash flow statement (in € millions) 2008 2007 Change Profit before income tax 298.9 217.8 +37.2% Elimination of cash flows from financing and investing activities 54.3 36.0 Provisions and other non-cash items 27.6 5.2 Depreciation, amortisation and impairment, net 63.2 42.3 Movements in work

  17. Slide 17: Net financial debt

    Net financial debt 44.7 907.7 66.2 318.8 2008 2007 667.3 189.3 Leverage ratio(1) 1.89(3) 2.07 (covenant: <3) Interest Cover ratio(2) 8.80(3) 9.37 (covenant: >5.5) Net Debt at Dec. Levered free Acquisition spend Dividend Others Net Debt at Dec. 2007 cash flow 2008 ► 2009-2011: repayment of €63m each

  18. Slide 18: Summary balance sheet

    Summary balance sheet (in € millions) Change Dec. 08 Dec. 07 (€m) Goodwill 769.7 569.4 +200.3 Net fixed assets 348.3 242.5 +105.8 Other non current assets (1) 161.4 115.4 +46.0 Working capital requirements 216.5 149.7 +66.8 Total investment 1,495.9 1,077.0 +418.9 Total equity 283.8 165.5 +118.3 Othe

  19. Slide 19: Shareholder structure

    Shareholder structure ► Market capitalization of €2.9bn at March 20, 2009 ► Free float of 43% (€1.3bn) ► Number of shares outstanding: 108,606,905 ► High proportion of institutional investors (USA, UK, France) Ownership structure (1) Free float breakdown Treasury Individual shares investors 1% 8% In

  20. Slide 20: Business review

    Business review Frank Piedelièvre Chief Executive Officer Copyright©2009 Bureau Veritas - All rights reserved.

  21. Slide 21: Marine

    Marine Conformity assessment of ships and marine equipment throughout their life cycle 2008 2007 Change Revenue €293.5m €247.2m +18.7% Organic growth 23.8% Contribution from acquisitions 0.0% Currency impact (5.1)% Adjusted operating profit €87.5m €70.1m +24.8% Adjusted operating margin 29.8% 28.4%

  22. Slide 22: Marine

    Marine 2008 highlights BV market share in worldwide new orders ► Sustained growth in new ships and equipment 25.1% 25.0% in GRTm in Nb of ships certification services (57% of 2008 revenues) (Asia and Europe). BV market share continues to grow 18.5% 20.0% 15.5% ► Diversified year-end ‘08 order book o

  23. Slide 23: Industry

    Industry Conformity assessment of facilities/equipment throughout their life cycle Minerals testing 2008 2007 Change Revenue €482.0m €311.1m +54.9% Organic growth 24.4% Contribution from acquisitions 35.7% Currency impact (5.2)% Adjusted operating profit €62.4m €35.7m +74.8% Adjusted operating margi

  24. Slide 24: Industry

    Industry Service offering covering the whole 2008 highlights asset life cycle ► Strong growth coming from CAPEX in oil & gas and power generation in Latin America, Asia, Russia and Middle East ► Growth in OPEX services: Asset Integrity Management, Reliability Centered Maintenance and Asset Life Cycl

  25. Slide 25: In-Service Inspection & Verification

    In-Service Inspection & Verification Periodic inspection of equipment & facilities to assess conformity with regulations 2008 2007 Change Revenue €330.2m €267.8m +23.3% Organic growth 6.6% Contribution from acquisitions 19.4% Currency impact (2.7)% Adjusted operating profit €36.9m €25.1m +47.0% Adju

  26. Slide 26: In-Service Inspection & Verification

    In-Service Inspection & Verification 2008 highlights ► Sustained growth in all geographies Inspection of individual gas installations in Spain, ► Scope extension of mandatory periodical inspections Mexico, Argentina and Columbia (€10m per year) ► Pricing initiatives ► Production tool roll-out in Fra

  27. Slide 27: Health, Safety & Environment

    Health, Safety & Environment Inspection, audit, measurement & testing services in the area of environment and occupational health and safety 2008 2007 Change Revenue €248.0m €206.1m +20.3% Organic growth - Contribution from acquisitions 25.3% Currency impact (5.0)% Adjusted operating profit €11.5m €

  28. Slide 28: Health, Safety & Environment

    Health, Safety & Environment 2008 highlights ► Satisfactory occupational health & safety activity ► Underperforming environment services with a decrease in preliminary building inspections (US and UK) ► HSE advisory services holding strong ► Growth prospects: carbon emission, energy efficiency, sust

  29. Slide 29: Construction

    Construction Conformity assessment of buildings and infrastructures 2008 2007 Change Revenue €464.4m €391.7m +18.5% Organic growth 5.9% Contribution from acquisitions 14.5% Currency impact (1.9)% Adjusted operating profit €48.4m €45.9m +5.4% Adjusted operating margin 10.4% 11.7% March 26, 2009 Copyr

  30. Slide 30: Construction

    Construction 2008 highlights Revenue breakdown by end market Industrial building 9% ► Good performance in infrastructures inspection markets (Spain) and in asset management services (France) Residential building Commercial building 30% ► Building technical control and code compliance: high 15% growt

  31. Slide 31: Certification

    Certification Certification of management systems in the area of QHSE and second party auditing services 2008 2007 Change Revenue €273.3m €243.6m +12.2% Organic growth 8.9% Contribution from acquisitions 4.9% Currency impact (1.6)% Adjusted operating profit €50.5m €45.3m +11.5% Adjusted operating ma

  32. Slide 32: Certification

    Certification 2008 highlights 2008 revenue breakdown by scheme ► Dynamic new sales On global contracts, ISO 22000 (Food chain), ISO 27001 (Information security management) Customized In industry specific schemes (Aeronautics, audit Forestry) Food schemes 5% 6% Large companies customized audits Train

  33. Slide 33: Consumer Products

    Consumer Products Testing, inspection and certification of consumer goods to comply with regulations or standards across the supply chain 2008 2007 Change Revenue €306.4m €259.2m +18.2% Organic growth 23.6% Contribution from acquisitions 0.4% Currency impact (5.8)% Adjusted operating profit €70.8m €

  34. Slide 34: Consumer Products

    Consumer Products 2008 highlights 2008 revenue breakdown by product ► Substantial growth coming from children’s product testing for US retail in anticipation of the US Consumer Electrical & electronics Product Safety Improvement Act (CPSIA) 21% ► Strong growth in analytical testing on textiles in Ge

  35. Slide 35: Government Services & International Trade

    Government Services & International Trade Trade facilitation services and commodities inspection and testing 2008 2007 Change Revenue €151.6m €140.2m +8.1% Organic growth 10.0% Contribution from acquisitions 0.4% Currency impact (2.3)% Adjusted operating profit €19.6m €20.7m (5.3)% Adjusted operatin

  36. Slide 36: Government Services & International Trade

    Government Services & International Trade 2008 highlights ► Government Services 3 new contracts • Guinea (PSI and scanner) • Mali (scanner) • Yemen (VOC) New services: Transit tracking and Smart Lane (Risk Management) ► International Trade New commodities laboratory in New-Orleans Award of 25 year c

  37. Slide 37: Outlook

    Outlook Frank Piedelièvre Chief Executive Officer Copyright©2009 Bureau Veritas - All rights reserved.

  38. Slide 38: Outlook

    Outlook ► Perspectives for 2009 Although it is difficult to provide estimates in the current economic environment, Bureau Veritas' business should continue to grow in 2009, albeit at a slower pace than in 2008 The group aims to maintain its operating margin Bureau Veritas’ resilience is due to the m

  39. Slide 39: Q&A

    Q&A Copyright©2009 Bureau Veritas - All rights reserved.

  40. Slide 40: Bureau Veritas – Move Forward with Confidence

    BUREAU VERITAS Move Forward with Confidence

  41. Slide 41: Appendix

    Appendix Copyright©2009 Bureau Veritas - All rights reserved.

  42. Slide 42: Income statement

    Income statement (in € millions) 2008 2007 Revenue 2,549.4 2,066.9 Purchase and external charges (747.9) (619.8) Personnel costs (1,292.4) (1,050.7) Taxes other than on income (54.4) (46.2) Net (additions to)/reversals of provisions (23.6) (9.4) Depreciation and amortization (61.9) (42.0) Other oper

  43. Slide 43: Balance sheet

    Balance sheet (in € millions) Dec. 2008 Dec. 2007 Goodwill 769.7 569.4 Intangible assets 154.9 108.5 Property, plant and equipment 193.4 134.0 Other non-current assets 140.8 87.0 Total non-current assets 1,258.8 898.9 Trade and other receivables 800.8 686.8 Other current assets 55.2 80.6 Cash and ca

  44. Slide 44: Statement of changes in equity

    Statement of changes in equity (in € millions) Currency Attributable to Attributable Share Share Other Total translation shareholders to minority capital premium reserves equity reserves of the Company interests January 1, 2008 13.9 409.7 (29.3) (228.8) 165.5 155.6 9.9 Capital reduction (0.9) (301.0

  45. Slide 45: Cash flow statement

    Cash flow statement (in € millions) 2008 2007 Profit before income tax 298.9 217.8 Elimination of cash flows from financing and investing activities 54.3 36.0 Provisions and other non-cash items 27.6 5.2 Depreciation, amortisation and impairment, net 63.2 42.3 Movements in working capital (62.5) (10

  46. Slide 46: Detail of operating charges

    Detail of operating charges (in € millions) 2008 2007 Revenue 2,549.4 2,066.9 Purchases and external charges (747.9) (619.8) Personnel costs (1,292.4) (1,050.7) Taxes other than on income (54.4) (46.2) Net (additions to) / reversals of provisions (23.6) (9.4) Depreciation and amortisation (61.9) (42

  47. Slide 47: Detail of adjusted EBITDA calculation

    Detail of adjusted EBITDA calculation (in € millions) 2008 2007 Adjusted operating profit 387.6 312.1 + Depreciation and amortisation 61.9 42.0 - Amortisation of business combination intangibles (17.9) (9.6) Adjusted EBITDA 431.6 344.5 March 26, 2009 Copyright©2009 Bureau Veritas - All rights reserv

  48. Slide 48: Detail of net financial debt calculation

    Detail of net financial debt calculation (in € millions) Dec. 2008 Dec. 2007 Bank borrowings (non-current) 973.2 735.2 Bank borrowings (current) 79.9 66.2 Bank overdrafts 8.0 8.8 Gross financial debt 1,061.1 810.2 Total cash and cash equivalents 153.4 142.9 Net financial debt 907.7 667.3 March 26, 2

  49. Slide 49: Earnings per share (EPS)

    Earnings per share (EPS) (in € millions) 2008 2007 Change Basic EPS (1) 2.02 1.51 33.8% Diluted EPS (2) 1.99 1.50 32.7% Basic adjusted EPS (1) 2.15 1.84 16.8% Diluted adjusted EPS (2) 2.12 1.83 15.8% (1) Calculated on weighted average number of shares of 107,426,200 in 2008 and 104,899,525 in 2007 (

  50. Slide 50: Currency exposure

    Currency exposure Revenue Currency Split Key Sensitivities(1) Others 16% CNY 3% JPY Group Group 1% Euro 2% Revenue Operating Profit Change vs. AUD Euro Impact Impact 6% 47% USD 0.16% 0.18% GBP 5% HKD 0.06% 0.10% HKD 6% GBP 0.05% 0.01% USD AUD 0.06% 0.05% 16% Moderate Moderate impact impact on on adj

  51. Slide 51: Disclaimer

    Disclaimer This presentation contains forward-looking statements which are based on current plans and forecasts of Bureau Veritas’ management. Such forward-looking statements are by their nature subject to a number of important risk and uncertainty factors such as those described in the documents fi

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