Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — H1 2018 Earnings Presentation
47 slides from Bureau Veritas Sa's earnings presentation, Jul 26, 2018
Slide 1: H1 results
H1 results July 26, 2018 BUREAU VERITAS
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: H1 2018 results agenda
H1 2018 results agenda ► Highlights ► Financial Review ► Business Review ► Outlook ► Q&A ► Appendix
Slide 4: Highlights
7 FHighlights
Slide 5: H1 2018 highlights
H1 2018 highlights ► Group revenue at €2.34bn, up 6.1% y/y at constant exchange rates (Q2 at +7.4%) ♦ Organic revenue growth of +3.5% (Q2 at +4.4%) with 5 out of 6 businesses growing overall at 4.3% on average, and Growth Initiatives up 6.6% organically in H1 (+7.0% in Q2) ♦ External growth of +2.6%
Slide 6: H1 2018 acquisitions, adding c.€85m of revenue
H1 2018 acquisitions, adding c.€85m of revenue 1 Buildings & Infrastructure Agri-Food February Agri-Food testing and analysis c.€70m Technical Assessment and Project Management Assistance Services Food & Environment testing March & July1 Opex Total of Oil & Gas, Power & Utilities, Chem. Agri-Food €1
Slide 7: Qatargas: Opex services wins largest ever contract
Qatargas: Opex services wins largest ever contract A major win highlighting the success A few figures of Opex Services Growth Initiative estimated €64 ► Execution of a framework agreement, being the largest ever contract in single source solution provider to the Client, to the Middle East region ens
Slide 8: Bureau Veritas pushes the collaborative BIM further
Bureau Veritas pushes the collaborative BIM further B&I digital strategy reinforced with the Global alliance with Autodesk, used as a creation of a BIM1 Center of Expertise in China technical support for automated verification Technical control & safety coordination enhanced by BIM Inspection servic
Slide 9: Business case: BIM comprehensive services over lifecycle
Business case: BIM comprehensive services over lifecycle Shanghaï Planetarium ► Technical and Management services of whole lifecycle based The largest planetarium in the world on BIM to provide comprehensive services to Owner Examples of compliance tests in the model 100% under BIM Outdoor wind Evac
Slide 10: Financial Review
Financial Review
Slide 11: H1 2018 revenue growth
H1 2018 revenue growth (in € millions) +6.1% at constant currency +2.6% (7.0)% 2,360.1 +3.5% 2,338.3 H1 2017 Organic 1 Acquisitions Currencies H1 2018 (1) Organic growth is the increase in revenue versus last year, at constant currency and scope (i.e. acquisitions excluded) H1 2018 results – July 26
Slide 12: Q2 2018 revenue growth
Q2 2018 revenue growth (in € millions) +7.4% at constant currency +4.4% +3.0% (6.1)% 1,238.0 1,222.1 Q2 2017 Organic 1 Acquisitions Currencies Q2 2018 (1) Organic growth is the increase in revenue versus last year, at constant currency and scope (i.e. acquisitions excluded) H1 2018 results – July 26
Slide 13: H1 2018 revenue growth by business
H1 2018 revenue growth by business % @ constant revenue currency 26% Buildings & Infrastructure 4,1% 10,5% +14.6% 8% Certification 10,8% +10.8% 93% of the portfolio 15% Consumer Products growing 5,0% 0,7% +5.7% organically at 4.3% 22% Agri-Food & Commodities on average 4,0% 0,9% +4.9% 22% Industry1
Slide 14: Organic growth driven by both Base Business & Growth Initiatives
Organic growth driven by both Base Business & Growth Initiatives Organic revenue for the Base Business Organic Growth H1 2018 performance 4% 3.1% 2% 1.3% 0.9% ► Base Business improving Two-thirds 0% organically at +2.0% (1.1)% (2.2)% ♦ Q2 acceleration to 3.1% -2% (3.7)% ♦ Excluding M&O and O&G Capex
Slide 15: Growth Initiatives maintained solid growth
5 Growth Initiatives maintained solid growth Buildings & Infrastructure +9.7% Opex services +4.2% H1 2018: Agri-Food +3.2% +15.5% growth overall of which +6.6% organic vs. +6.9% organic in FY 2017 Automotive +7.2% SmartWorld +10.8% 0 H1 2018 total revenue for all Growth 400 Initiatives (€m) and orga
Slide 16: H1 2018 key financials
H1 2018 key financials (in € millions) y/y at constant H1 2018 H1 2017 y/y currency Revenue 2,338.3 2,360.1 (0.9)% +6.1% Adjusted operating profit1 348.1 359.4 (3.1)% +7.8% Adjusted operating margin1 14.9% 15.2% (30)bps +20bps Operating profit 291.0 286.2 +1.7% +14.3% Adjusted net profit 189.5 187.6
Slide 17: Adjusted operating margin
Adjusted operating margin ADJUSTED OPERATING MARGIN ADJUSTED OPERATING MARGIN EVOLUTION Y/Y BY BUSINESS Change Organic1 H1 2018 y/y (bps) y/y (bps) +10bps +10bps Marine & Offshore 21.3% (230) (120) (50)bps Agri-Food & 11.2% (10) - Commodities 15.2% 15.3% Industry 11.5% - - 14.9% Buildings & 13.6% (4
Slide 18: From adjusted operating profit to operating profit
From adjusted operating profit to operating profit (in € millions) H1 2018 H1 2017 y/y Adjusted operating profit 348.1 359.4 (11.3) Amortization of intangibles (35.8) (40.1) +4.3 Actions taken mainly in government services, Restructuring (19.5) (31.4) +11.9 B&I and commodities related-activities Acq
Slide 19: Net financial expenses
Net financial expenses (in € millions) H1 2018 H1 2017 y/y Due to average gross debt decrease Net financial charges (40.9) (46.7) +5.8 Foreign exchange gain/loss (2.0) (10.9) +8.9 Interest charge on pension plans (1.1) (1.3) +0.2 Linked to depreciation of currencies in several Other (1.1) (1.8) +0.7
Slide 20: Tax / Tax rate
Tax / Tax rate (in € millions) H1 2018 H1 2017 y/y Profit before Tax 246.5 226.0 +20.5 Primarily resulting from the absence of the 3% Tax (84.4) (80.0) (4.4) dividend contribution in France after this was ETR1 34.2% 35.4% (120)bps cancelled Adjusted ETR2 32.8% 33.9% (110)bps (1) Effective tax rate (
Slide 21: Cash flow statement
Cash flow statement (in € millions) H1 2018 H1 2017 y/y Profit before income tax 246.6 226.0 +20.6 Elimination of financing and investing activities 44.0 78.5 Resulting from the (34.5) absence of the 3% Provisions and other non-cash items 3.9 (16.8) +20.7 dividend contribution Depreciation, amortiza
Slide 22: Adjusted net debt
Adjusted net debt (in € millions) Dec. 31, Free cash Share Foreign June 30, Acquisitions Dividends Other 2017 flow buybacks exchange 2018 +62.9 (2,094.4) (123.7) (254.8) (24.1) (26.5) (2.4) (2,463.0) ► Adjusted ND/EBITDA1 ratio at 2.82 below bank covenant (3.25x) (1) Adjusted net financial debt / EB
Slide 23: Business Review
Business Review
Slide 24: Marine & Offshore (7% of revenue, 10% of profit)
Marine & Offshore (7% of revenue, 10% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► New construction: high single-digit (in € millions) H1 2018 H1 2017 Var. decline (low single-digit in Q2), improvement of new orders not yet Revenue (10.7)% Organic 170.4 190.8 impacting
Slide 25: IMO 2020: limiting sulphur oxides emissions
IMO 2020: limiting sulphur oxides emissions What is IMO 2020? What are the options for ship owners? ► IMO1 has set a limit for sulphur in fuel 1 ► Switch to low-sulphur fuel oil used on board ships of 0.50% Capex Opex m/m2 from January 1, 2020 (vs. 3.5% since 2012). This will significantly reduce th
Slide 26: Agri-Food & Commodities (23% of revenue, 17% of profit)
Agri-Food & Commodities (23% of revenue, 17% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► O&P (+1.2%): mid-single digit growth in (in € millions) H1 2018 H1 2017 Var. Europe (market share gains), more difficult Revenue (3.2)% in North America (price pressure) 523.7 541.
Slide 27: Industry (23% of revenue, 17% of profit)
Industry (23% of revenue, 17% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► Oil & Gas Capex easing rates of decline at (in € millions) H1 2018 H1 2017 Var. -15% of which -12% in Q2 Revenue 519.5 559.6 (7.2)% ♦ US & Korea (+) ; Australia & China (-) Organic +2.2% ► O&G Op
Slide 28: Buildings & Infrastructure (26% of revenue, 24% of profit)
Buildings & Infrastructure (26% of revenue, 24% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) H1 2018 H1 2017 Var. ► Construction-related activities (62% of divisional revenue): Revenue +11.3% Organic 609.6 547.5 +4.1% ♦ High single-digit growth in Asia (Ch
Slide 29: Certification (8% of revenue, 10% of profit)
Certification (8% of revenue, 10% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) H1 2018 H1 2017 Var. ► Growth spread across most regions and services categories Revenue +1.1% 190.9 188.8 ► Double-digit growth in Europe, Asia and Organic +10.8% North America
Slide 30: Consumer Products (13% of revenue, 22% of profit)
Consumer Products (13% of revenue, 22% of profit) KEY FINANCIALS H1 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► E&E: high single-digit growth led by (in € millions) H1 2018 H1 2017 Var. Automotive & Wireless Revenue (2.5)% ► Hardlines: high single-digit growth; 324.2 332.4 Organic +5.0% stabilized
Slide 31: Outlook
Outlook
Slide 32: Confirmed 2018 outlook
Confirmed 2018 outlook Full-year organic Full-year adjusted Full-year cash flow revenue growth to operating margin to generation accelerate slightly improve at to improve at vs. full-year 2017 constant currency constant currency vs. full-year 2017 vs. full-year 2017 H1 2018 results – July 26, 2018 3
Slide 33: Conclusion
Conclusion 1. FY 2018 guidance confirmed 2. Well underway with the Group transformation 3. 2020 ambition on track H1 2018 results – July 26, 2018 33
Slide 34: Q&A
Q&A
Slide 35: 2018 Financial Calendar and Contacts
2018 Financial Calendar and Contacts ► Field Trip Canada @ Maxxam – September 20, 2018 – CLICK HERE TO REGISTER ► Q3 2018 Revenue – October 25, 2018 Investor Relations Information Bureau Veritas Head Office – 40/52 Boulevard du Parc 92200 Neuilly-sur-Seine, France Laurent Brunelle Head of Investor R
Slide 36: Discover our new website
Discover our new website: https://group.bureauveritas.com H1 2018 results – July 26, 2018 36
Slide 37: Appendix
Appendix
Slide 38: Revenue by business
Revenue by business H1 2018 H1 2017 (in € millions) €m Organic Scope FX €m Organic Scope FX Marine & Offshore 170.4 (5.4)% +0.0% (5.3)% 190.8 (7.5)% 1.1% 0.1% Agri-Food & Commodities 523.7 +4.0% +0.9% (8.1)% 541.0 0.8% 8.7% 2.0% Industry 519.5 +2.2% (0.6)% (8.8)% 559.6 (1.1)% 0.1% 2.4% Buildings & I
Slide 39: Revenue by business
Revenue by business Q2 2018 Q2 2017 (in € millions) €m Organic Scope FX €m Organic Scope FX Marine & Offshore 86.8 (2.2)% +0.0% (5.2)% 93.7 (13.1)% +0.6% +0.9% Agri-Food & Commodities 273.6 +4.8% +0.7% (6.9)% 277.4 +1.0% +9.6% +0.8% Industry 269.3 +2.8% +0.1% (7.5)% 282.4 (0.4)% (1.2)% +1.2% Buildin
Slide 40: Adjusted operating profit by business
Adjusted operating profit by business Adjusted operating profit (€m) Adjusted operating margin (%) (in € millions) H1 2018 H1 2017 Var. (%) H1 2018 H1 2017 Var. (bp) Marine & Offshore 36.3 45.0 (19.3)% 21.3% 23.6% (230) Agri-Food & Commodities 58.6 61.4 (4.6)% 11.2% 11.3% (10) Industry 59.5 64.6 (7.
Slide 41: Q2 2018 revenue growth by business
Q2 2018 revenue growth by business % @ constant revenue currency 26% Buildings & Infrastructure 4,1% 12,1% +16.2% 8% Certification 14,2% +14.2% 93% of the portfolio 14% Consumer Products growing 4,3% 0,6% +4.9% organically at 4.9% 23% Agri-Food & Commodities on average 4,8% 0,7% +5.5% 22% Industry1
Slide 42: Portfolio of businesses (H1 2018)
Portfolio of businesses (H1 2018) Revenue by business AOP by business Marine & Offshore Marine & Offshore 7% 10% 14% Agri-Food & Commodities 22% Agri-Food & Commodities 8% 23% 17% Industry Industry 10% Buildings & Infrastructure Buildings & Infrastructure 26% 17% 22% Certification Certification 24%
Slide 43: Forex: sharp negative impact in H1 2018
Forex: sharp negative impact in H1 2018 H1 2018 revenue currency exposure Currency change y/y OTHER 11,7% TRY 0,8% USD (and pegged) (10.5)% PEN 0,9% CNY (3.4)% COP 1,2% EUR 28,8% KRW 1,4% CAD (6.5)% ARS 1,1% INR 1,6% HKD (11.2)% TWD 1,5% AUD (8.4)% SGD 1,5% BRL (16.9)% JPY 2,0% GBP (2.2)% CLP 2,7% C
Slide 44: H1 2018 restructuring: €19.5m
H1 2018 restructuring: €19.5m By Business Activity By Geography Agri-Food & Commodities 13% Europe 21% 27% Buildings & Infrastructure Africa / Middle East 13% Consumer products 4% Asia Pacific Marine & Offshore 9% 10% 64% Americas Industry 11% 28% Other (incl. HO) H1 2018 results – July 26, 2018 44
Slide 45: Ownership at June 30, 2018
Ownership at June 30, 2018 1.5% Wendel Group 40.1% Managers and employees 57.1% Free float Treasury shares 1.3% H1 2018 results – July 26, 2018 45
Slide 46: 2020 ambition
2020 ambition Add €1.5bn Above 17% Continuous of incremental adjusted high revenue1 operating Free Cash Flow Half organic margin1 generation Half acquisition 5-7% organic growth by 2020 (1) At 2015 plan initial exchange rates (as presented during October 2015 Investor Days) H1 2018 results – July 26
Slide 47: Glossary
Glossary Adjusted Operating Profit (AOP) excludes amortization of GRT (Marine): Gross Register Ton acquisition intangibles, goodwill impairment, restructuring, acquisition and disposal-related items (non-recurring items) GS: Government Services IoT: Internet of Things Adjusted Operating Margin (AOP