Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — Q3 2018 Earnings Presentation
36 slides from Bureau Veritas Sa's earnings presentation, Oct 25, 2018
Slide 1: Q3 revenue
2018 Q3 revenue October 25, 2018
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: Q3 2018 revenue agenda
Q3 2018 revenue agenda ► Highlights ► Financial Review ► Business Review ► Outlook ► Q&A ► Appendix
Slide 4: Highlights
7 Ff Highlights
Slide 5: Q3 2018 highlights
Q3 2018 highlights ► Group revenue at €1.20bn, up 8.6% y/y at constant exchange rates (9M at +6.9%) ♦ Organic revenue growth of +4.8% (9M at +3.9%) with all businesses growing, and Growth Initiatives up 7.9% organically in Q3 (+7.0% in 9M) ♦ External growth of +3.8% (9M at +3.0%): 6 acquisitions YTD
Slide 6: Financial Review
Financial Review
Slide 7: 9M 2018 revenue growth
9M 2018 revenue growth (in € millions) +6.9% at constant currency +3.0% (5.7)% 3,492.8 +3.9% 3,535.0 9M 2017 Organic 1 Acquisitions Currencies 9M 2018 (1) Organic growth is the increase in revenue versus last year, at constant currency and scope (i.e. acquisitions excluded) Q3 2018 revenue – October
Slide 8: Q3 2018 revenue growth
Q3 2018 revenue growth (in € millions) +8.6% at constant currency +4.8% +3.8% (2.9)% 1,196.7 1,132.7 Q3 2017 Organic 1 Acquisitions Currencies Q3 2018 (1) Organic growth is the increase in revenue versus last year, at constant currency and scope (i.e. acquisitions excluded) Q3 2018 revenue – October
Slide 9: Q3 2018 revenue growth by business
Q3 2018 revenue growth by business % @ constant revenue currency 26% Buildings & Infrastructure 4.6% 13.1% +17.7% 7% Certification 14.9% +14.9% 23% Agri-Food & Commodities 5.3% 1.0% +6.3% 22% Industry 3.5% 1.3% +4.8% 15% Consumer Products 3.2% 0.8% +4.0% 7% Marine & Offshore 1.0% 0.2% +1.2% 100% Tot
Slide 10: 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 Q3 2018 performance 4% 3.2% 2.0% 2% 1.3% ► Base Business continues to grow 66% organically at +3.2% in Q3 0% (1.1)% (2.2)% ♦ The Base Business grew 2.4% -2% (3.7)% organically in 9M
Slide 11: 5 Growth Initiatives maintained solid growth
5 Growth Initiatives maintained solid growth Buildings & Infrastructure +5.7% Opex services +15.1% Q3 2018: Agri-Food +1.9% +15.4% growth overall of which +7.9% organic vs. +7.0% organic in Q2 2018 Automotive +9.9% SmartWorld +0.9% 0 Q3 2018 total revenue for all Growth 200 Initiatives (€m) and orga
Slide 12: Business Review
Business Review
Slide 13: Marine & Offshore (7% of revenue)
Marine & Offshore (7% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► New construction: mid single-digit growth (in € millions) Q3 2018 Q3 2017 Var. benefiting from improvement in the new Revenue (1.2)% equipment certification services 84.8 85.8 ► Core In-Service: low sin
Slide 14: Agri-Food & Commodities (23% of revenue)
Agri-Food & Commodities (23% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES ► O&P (+2.4%): mid single-digit growth in (in € millions) Q3 2018 Q3 2017 Var. Europe (market share gains, new Revenue +2.7% services), stable in North America (price 272.8 265.7 pressure) Organic
Slide 15: Industry (22% of revenue)
Industry (22% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) Q3 2018 Q3 2017 Var. ► Oil & Gas Capex turning positive in Q3 2018 at +1.7% (-10.0% in 9M 2018) Revenue (0.1)% benefitting from easier comps 265.7 265.9 Organic +3.5% ♦ US & S.Korea (+) ; Australi
Slide 16: Industry: successful focus on Opex delivers diversification
Industry: successful focus on Opex delivers diversification OIL MAJORS FOCUS ON OPEX CAPEX SPENDING GROWTH Capex Majors Capex (2-year average) 15% Opex 10% 5% 0% 47% 57% 2011 2012 2013 2014 2015 2016 2017 2018E 2019E (5%) (10%) 2015 2017 (15%) (20%) 53% (25%) 43% ► Oil Majors Capex expected to incre
Slide 17: Buildings & Infrastructure (26% of revenue)
Buildings & Infrastructure (26% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) Q3 2018 Q3 2017 Var. ► Construction-related activities (65% of divisional revenue) mid single-digit growth: Revenue +16.7% 311.4 266.8 ♦ Spread across all geographies, Organic +4
Slide 18: Certification (7% of revenue)
Certification (7% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) Q3 2018 Q3 2017 Var. ► Growth spread across all regions and most services categories Revenue +11.4% 88.6 79.5 ► Double-digit growth in Europe, Asia and Organic +14.9% North America Acquisition
Slide 19: Certification bolstered by the revision of standards
Certification bolstered by the revision of standards Certification organic revenue growth Y/Y Organic Growth Confirmed 2018 Outlook 16% 14.2% 14.9% 14% ► H2 to be much lower than H1 12% 10% ► Q4 expected to be down with 6.8% 6.7% 8% 5.2% the end of the transition period 6% 4% 2.3% on Sept. 15, 2018
Slide 20: Consumer Products (15% of revenue)
Consumer Products (15% of revenue) KEY FINANCIALS Q3 2018 HIGHLIGHTS 2020 AMBITION / KEY FIGURES (in € millions) Q3 2018 Q3 2017 Var. ► E&E: low single-digit growth primarily driven by Automotive, South Asia, Revenue +2.6% South-East Asia and Europe; slowdown in 173.4 169.0 Organic +3.2% China and t
Slide 21: Tariffs increase: limited impact expected
Tariffs increase: limited impact expected Assuming current Group revenue by business market conditions, Outside c.5% of Consumer Consumer Products scope of Products business 14% US tariffs c.95% within the scope of tariffs increases 9M 2018 ► Monitoring closely, proactive engagement with customers ►
Slide 22: Outlook
Outlook
Slide 23: 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 Q3 2018 revenue – October 25, 201
Slide 24: Q&A
Q&A
Slide 25: 2019 Financial Calendar and Contacts
2019 Financial Calendar and Contacts ► Full-Year 2018 results – February 28, 2019 ► H1 2019 results – July 25, 2019 ► Q1 2019 revenue – April 25, 2019 ► Q3 2019 revenue – October 24, 2019 Investor Relations Information Bureau Veritas Head Office – 40/52 Boulevard du Parc 92200 Neuilly-sur-Seine, Fra
Slide 26: Appendix
Appendix
Slide 27: Revenue by business
Revenue by business Q3 2018 Q3 2017 (in € millions) €m Organic Scope FX €m Organic Scope FX Marine & Offshore 84.8 +1.0% +0.2% (2.4)% 85.8 (1.8)% 0.0% (4.9)% Agri-Food & Commodities 272.8 +5.3% +1.0% (3.6)% 265.7 +3.1% +3.4% (3.3)% Industry 265.7 +3.5% +1.3% (4.9)% 265.9 (0.7)% (2.6)% (4.5)% Buildin
Slide 28: Revenue by business
Revenue by business 9M 2018 9M 2017 (in € millions) €m Organic Scope FX €m Organic Scope FX Marine & Offshore 255.2 (3.4)% +0.1% (4.4)% 276.6 (5.7)% +0.8% (1.5)% Agri-Food & Commodities 796.5 +4.4% +1.0% (6.7)% 806.6 +1.6% +6.9% +0.1% Industry 785.2 +2.6% 0.0% (7.5)% 825.5 (0.9)% (0.8)% 0.0% Buildin
Slide 29: 9M 2018 revenue growth by business
9M 2018 revenue growth by business % @ constant revenue currency 26% Buildings & Infrastructure 4.3% 11.4% +15.7% 8% Certification 12.0% +12.0% 23% Agri-Food & Commodities 4.4% 1.0% +5.4% 14% Consumer Products 4.4% 0.7% +5.1% 22% Industry 2.6% +2.6% 7% Marine & Offshore (3.4)% 0.1% (3.3)% 100% Total
Slide 30: 5 Growth Initiatives maintained solid growth
5 Growth Initiatives maintained solid growth Buildings & Infrastructure +8.3% Opex services +7.7% 9M 2018: Agri-Food +2.8% +9.0% growth overall of which +7.0% organic vs. +6.6% organic in H1 2018 Automotive +8.0% SmartWorld +7.4% 0 9M 2018 total revenue for all Growth 600 Initiatives (€m) and organi
Slide 31: Portfolio of businesses
Portfolio of businesses Revenue by business 7% Marine & Offshore 14% Agri-Food & Commodities 8% 23% Industry 9M 2018 Buildings & Infrastructure 26% Certification 22% Consumer products Q3 2018 revenue – October 25, 2018 31
Slide 32: Sharp negative forex impact in 9M 2018
Sharp negative forex impact in 9M 2018 Revenue currency exposure Currency change y/y OTHER USD (and pegged) (6.7)% 11.6% MXN 0.8% CNY (2.6)% PEN 0.9% EUR ARS 1.0% CAD (5.4)% COP 1.2% 28.2% KRW 1.4% GBP (1.2)% TWD 1.4% AUD (7.8)% SGD 1.5% BRL (17.7)% INR 1.5% CLP (2.9)% JPY 2.0% JPY (4.8)% CLP 2.6% 9
Slide 33: Core debt maturity profile at September 30, 2018
Core debt maturity profile at September 30, 2018 (in € millions) NEU CP Bond Schuldschein USPP 86 184 60 500 500 500* 206 151 200 200 173 98 102 134 50 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 (*) New 500 m€ bond issued on October 4th, 2018 Q3 2018 revenue – October 25, 2018 33
Slide 34: 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 35: 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) Q3 2018 revenue – October
Slide 36: 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