Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — FY2011 Earnings Presentation
57 slides from Bureau Veritas Sa's earnings presentation, Feb 23, 2012
Slide 1: 2011 Full-Year Results
2011 FULL-YEAR RESULTS February 23, 2012
Slide 2: 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 Document de
Slide 3: Agenda
Agenda HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW ACQUISITIONS OUTLOOK Q&A APPENDIX 3
Slide 4: Highlights
Frank Piedelièvre Chairman and Chief Executive Officer HIGHLIGHTS 4
Slide 5: Highlights
Highlights ► 2011 performance Revenue: €3.4Bn, +15% vs 2010 Adjusted operating profit: €544m, +11% Adjusted net profit: €348m, +10% Proposed dividend: €1.27, +10% ► Rightsizing plan in Spain: €25m of restructuring and impairment ► Completion of 11 acquisitions, positioned in fast growing markets ► A
Slide 6: A strong financial track record since IPO
A strong financial track record since IPO ► Key financial targets achieved Targets (€ millions) 2006 2011 CAGR “set at IPO” Revenue 1,781 (1) 3,359 +14% +15% Organic growth +7% +8% External growth +7% +7% Adjusted operating profit (2) 268 544 +15% % of revenues 14.5% 16.2% +170 bps (3) +150 bps (3)
Slide 7: A more balanced portfolio of businesses and geographies
A more balanced portfolio of businesses and geographies 2006 revenue breakdown 2011 revenue breakdown Government Services Marine Government Services Marine 8% 11% 7% 10% Consumer Products Consumer Products Industry 11% 14% 13% Industry 21% Commodities HSE 16% 10% In-Service inspection &Verification
Slide 8: Extensive geographic footprint with strong exposure to fast growing zones
Extensive geographic footprint with strong exposure to fast growing zones Americas (20% of revenue1) France (21% of revenue1) EMEA (31% of revenue1) Asia Pacific (28% of revenue1) 185 offices and 90 labs 170 offices and 10 labs 365 offices and 110 labs 220 offices and 130 labs 12,700 staff 7,600 sta
Slide 9: Financial Review
Sami Badarani Chief Financial Officer FINANCIAL REVIEW 9
Slide 10: Summary income statement
Summary income statement (€ millions) FY 2011 FY 2010 Change Revenue 3,358.6 2,929.7 +14.6% Adjusted operating profit (1) 544.3 490.5 +11.0% Adjusted operating margin 16.2% 16.7% (50)bps Other operating expense (64.0) (34.2) Operating profit 480.3 456.3 +5.3% Net financial expense (58.4) (45.7) Inco
Slide 11: FY 2011 revenue
FY 2011 revenue (€ millions) +9.5% 3,358.6 +6.2% (1.1)% 2,929.7 +15.7% FY 2010 Organic External Currency FY 2011 Revenue Growth Growth Revenue Q4 2011 +6.5% +1.4% (0.3)% © - Copyright Bureau Veritas February 2012 11
Slide 12: Financial performance
Financial performance Revenues & adjusted operating margin +170bps +14% (in € billion) Margin improvement Revenue CAGR(1) 16.4% 16.7% 16.2% 14.8% 15.1% 15.2% 14.4% 14.5% 13.2% 11.9% 10.4% 3.4 2.9 2.5 2.6 1.9 2.1 1.4 1.6 1.0 1.2 1.3 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Organic & ext
Slide 13: Adjusted operating profit
Adjusted operating profit (€ millions) FY 2011 FY 2010 Change Operating profit 480.3 456.3 +5.3% Amortization of acquisition intangibles 36.4 25.7 +€10.7m Goodwill impairment 16.1 1.8 +€14.3m Restructuring 9.4 - +€9.4m Transaction-related costs 2.5 4.3 €(1.8)m Discontinued activities (0.4) 2.4 €(2.8
Slide 14: Net financial expense
Net financial expense (€ millions) FY 2011 FY 2010 Change Finance costs, net (41.7) (36.5) €(5.2)m Foreign exchange gains / (losses) (8.0) 2.3 €(10.3)m Interest cost on pension plans (4.4) (5.1) +€0.7m Other financial income / (expense) (4.3) (6.4) +€2.1m Net financial expense (58.4) (45.7) €(12.7)m
Slide 15: Adjusted net profit
Adjusted net profit (€ millions) FY 2011 FY 2010 Change Attributable net profit 297.6 290.4 +2.5% Goodwill impairment - Spain 16.1 - “Other” 47.9 34.2 Total other operating expense 64.0 34.2 Tax effect on goodwill impairment - Spain - - Tax effect on “other” (13.5) (9.4) (1) Total tax effect on othe
Slide 16: Summary cash flow statement
Summary cash flow statement (€ millions) FY 2011 FY 2010 Change Profit before income tax 422.2 410.5 +€11.7m Elimination of financing and investing activities 44.8 42.2 Provisions and other non-cash items (4.9) 8.8 Depreciation, amortization and impairment 129.1 96.6 Movements in working capital (39
Slide 17: Adjusted net financial debt
Adjusted net financial debt(1) (€ millions) 1,051.8 131.2 7.2 983.9 70.2 29.5 247.0 Net Debt at Levered free Acquisition Dividends Capital Other Net Debt at Dec. 2010 cash flow spend Increase Dec. 2011 (1) Net financial debt after currency hedging instruments as defined for the Group’s covenants cal
Slide 18: Optimized leverage ratio
Optimized leverage ratio(1) 2.51 1.89 1.78 1.94 1.60 1.38 1.31 June 08 Dec 08 Dec 09 June 10 Dec 10 June 11 Dec 11 (1) Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amortization and provisions) adjusted for all units acquired over the past 12 months ► New debt fa
Slide 19: Summary financial position
Summary financial position (€ millions) Dec. 2011 Dec. 2010 Change Goodwill 1,378.3 1,329.3 +49.0 Net fixed assets 652.6 611.5 +41.1 Working capital 237.0 193.0 +44.0 Total Capital employed 2,267.9 2,133.8 +134.1 Total equity 1,084.2 859.9 +224.3 Adjusted net financial debt 983.9 1,051.8 (67.9) Prov
Slide 20: Earnings per share (EPS) and dividend
Earnings per share (EPS) and dividend Adjusted EPS(1) Dividend (€ / share) +10.4% +9.3% 1.27 3.18 1.15 2.91 2010 2011 2010 2011 Basic EPS 2.68 2.72 +1.5% A dividend of €1.27 per share (+10.4%) will be proposed to the AGM of May 31, 2012, representing 40% of Adjusted EPS (1) Calculated on weighted av
Slide 21: Business Review
Frank Piedelièvre Chairman and Chief Executive Officer BUSINESS REVIEW 21
Slide 22: Revenue by business
Revenue by business Q4 2011 FY 2011 €m Organic Scope FX €m Organic Scope FX Marine 82.8 +5.2% - +0.3% 318.7 +2.4% - (0.7)% Industry 194.3 +16.4% +1.7% (1.4)% 715.1 +17.1% +1.5% (1.0)% IVS 124.5 +2.3% - (0.3)% 440.5 +2.8% - (0.6)% 109.0 (2.9)% +0.9% +0.5% 413.9 (2.2)% (0.3)% (0.7)% Construction Certi
Slide 23: Adjusted Operating profit by business
Adjusted Operating profit by business Adj. Operating profit Adj. Operating margin FY2011 FY2010 Change FY2011 FY2010 Change Marine 93.9 90.5 +3.8% 29.5% 28.9% +60 bps Industry 82..0 70.0 +17.1% 11.5% 11.5% - 48.4 52.9 (8.5)% IVS 11.0% 12.3% (130) bps 45.2 44.1 +2.5% Construction 10.9% 10.3% +60 bps
Slide 24: Marine
Marine Conformity assessment of ships and marine equipment FY 2011 FY 2010 Change Revenue €318.7m €313.5m +1.7% Organic +2.4% Scope - Currency (0.7)% Adjusted operating profit €93.9m €90.5m +3.8% Adjusted operating margin 29.5% 28.9% +60bps © - Copyright Bureau Veritas February 2012 24
Slide 25: Marine
Marine 2011 Highlights BV new ships New ships and equipment certification (53% of revenues) (GRTm) 36 Slowdown in worldwide new orders <GRT 50m (vs GRT 70m 30 31 29 in 2010) BV market share up to 20.2% in nb of ships (vs 16.5% in 22 17 18 2010) and 13.7% in GRT (vs 13.5% in 2010) Surge in deliveries
Slide 26: Industry
Industry Conformity assessment of facilities/equipment FY 2011 FY 2010 Change Revenue €715.1m €608.1m +17.6% Organic +17.1% Scope +1.5% Currency (1.0)% Adjusted operating profit €82.0m €70.0m +17.1% Adjusted operating margin 11.5% 11.5% - © - Copyright Bureau Veritas 26
Slide 27: Industry
Industry 2011 Highlights Superior growth across markets and geographies 2011 revenue breakdown Oil&Gas: Large QA/QC1 inspection contracts awarded by majors: Others Shell, Chevron, Petrobras Retail 11% 2% Significant opportunities in Kazakhstan (Capex & Opex), Transport Brazil (drilling), Australia a
Slide 28: In-Service Inspection & Verification
In-Service Inspection & Verification Periodic inspection of equipment & facilities FY 2011 FY 2010 Change Revenue €440.5m €431.1m +2.2% Organic +2.8% Scope - Currency (0.6)% Adjusted operating profit €48.4m €52.9m (8.5)% Adjusted operating margin 11.0% 12.3% (130)bps © - Copyright Bureau Veritas 28
Slide 29: In-Service Inspection & Verification
In-Service Inspection & Verification 2011 Highlights 2011 revenue breakdown Organic growth at +5% excluding Spain Others Middle East & Africa Successful revamping of UK operations, growing revenues and 6% 3% operating margin Latin America 5% USA 5% France: moderate growth Strong growth in Latin Amer
Slide 30: Construction
Construction Conformity assessment of buildings and infrastructure FY 2011 FY 2010 Change Revenue €413.9m €427.8m (3.2)% Organic (2.2)% Scope (0.3)% Currency (0.7)% Adjusted operating profit €45.2m €44.1m +2.5% Adjusted operating margin 10.9% 10.3% +60 bps © - Copyright Bureau Veritas 30
Slide 31: Construction
Construction 2011 Highlights 2011 revenue breakdown Organic growth at +3% excluding Spain Others Good performance in France and Japan Middle-East 8% & Africa Increased level of activity in the Middle East, China, Africa and 3% India (acquisition of Civil Aid) France 50% US underlying construction ac
Slide 32: Certification
Certification Certification of QHSE management systems FY 2011 FY 2010 Change Revenue €321.6m €321.6m - Organic +0.1% Scope +0.5% Currency (0.6)% Adjusted operating profit €66.5m €66.5m - Adjusted operating margin 20.7% +20.7% - © - Copyright Bureau Veritas 32
Slide 33: Certification
Certification 2011 Highlights 2011 revenue breakdown +7.3% organic growth adjusted for the GSAC contract loss (French civil aviation authority) as of October 2010 Training Sustainability & & Others Continued growth in Climate and Sustainability Services: JI/CDM, Climate change 5% Biofuels, SA 8000,
Slide 34: Commodities
Commodities Commodities inspection and testing Oil & Petrochemicals - Metals & Minerals - Agriculture FY 2011 FY 2010 Change Revenue €542.1m €266.6m +103.3% Organic +10.1% Scope +93.2% Currency - Adjusted operating profit €69.1m €30.4m +127.3% Adjusted operating margin 12.7% 11.4% +130 bps © - Copyr
Slide 35: Commodities
Commodities 2011 Highlights 2011 revenue breakdown Successful integration of Inspectorate M&M: Strong organic growth in upstream segment despite industrial Agriculture (Agri) actions at clients’ sites (Chile and Australia) 9% Oil & Petrochemicals O&P: Growth acceleration in H2 fueled by recovery in
Slide 36: Consumer Products
Consumer Products Testing, inspection and certification of consumer goods FY 2011 FY 2010 Change Revenue €379.4m €382.3m (0.8)% Organic +1.5% Scope +0.5% Currency (2.8)% Adjusted operating profit €97.1m €105.5m (8.0)% Adjusted operating margin 25.6% 27.6% (200)bps © - Copyright Bureau Veritas 36
Slide 37: Consumer Products
Consumer Products 2011 Highlights Reduced volumes in Toys testing 2011 revenue breakdown Strategic partnership with Chinese government bodies (Textiles, Hardlines, E&E) for export and domestic markets Electrical & electronics (E&E) Textile: Strong growth and market shares gains in Bangladesh, India,
Slide 38: Government Services & International Trade
Government Services & International Trade Trade facilitation services FY 2011 FY 2010 Change Revenue €227.3m €178.7m +27.2% Organic +13.5% Scope +16.2% Currency (2.5)% Adjusted operating profit €42.1m €30.6m +37.6% Adjusted operating margin 18.5% 17.1% +140 bps © - Copyright Bureau Veritas 38
Slide 39: Government Services & International Trade
Government Services & International Trade 2011 Highlights 2011 revenue breakdown Strong performance despite political turmoil in the Middle Middle East Americas East and Ivory Coast & Asia 20% 19% New contracts: Iraq, single window in Benin Successful development of Automotive inspection in Africa E
Slide 40: Acquisitions
Frank Piedelièvre Chairman and Chief Executive Officer ACQUISITIONS 40
Slide 41: AcmeLabs – Minerals testing in America
AcmeLabs – Minerals testing in America Acme revenue breakdown Founded in 1971 and headquartered in Vancouver EMEA 4% Number 3 player in upstream mining in Canada, strong position in Latin America South America North Rapid expansion in Canada, Latin America and 37% America Europe 59% Very strong repu
Slide 42: HuaXia: breakthrough in Chinese construction technical supervision
HuaXia: breakthrough in Chinese construction technical supervision HuaXia operations Chinese private company founded in1993 and based in Beijing Provides construction technical supervision services Key supervision licences • Petrochemical plants • Buildings (residential and commercial) • Municipal p
Slide 43: Outlook
Frank Piedelièvre Chairman and Chief Executive Officer OUTLOOK 43
Slide 44: Outlook
Outlook ► Outlook In 2012, without further deterioration to current economic forecast, the Group should deliver strong growth in revenues (both organic and acquisitions) and adjusted operating profit, in-line with BV2015 strategic plan. ► BV2015 Financial objectives for 2012-2015 Revenue (1) : +9-12
Slide 45: Q&A
Q&A BUREAU VERITAS 45
Slide 46: Appendix
APPENDIX BUREAU VERITAS 46
Slide 47: Consolidated income statement
Consolidated income statement (€ millions) FY 2011 FY 2010 Revenue 3,358.6 2,929.7 Purchase and external charges (995.5) (843.4) Personnel costs (1,709,4) (1,479.4) Taxes other than on income (71.1) (60.8) Net (additions to)/reversals of provisions 8.4 2.1 Depreciation and amortization (112.9) (89.1
Slide 48: Consolidated financial position
Consolidated financial position (€ millions) Dec. 2011 Dec. 2010 Goodwill 1,378.3 1,329.3 Intangible assets 333.0 330.4 Property, plant and equipment 319.6 281.1 Other non-current assets 184.9 148.9 Total non-current assets 2,215.8 2,089.7 Trade and other receivables 974.4 929.7 Other current assets
Slide 49: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income (€ millions) FY 2011 FY 2010 Net profit 305.3 297.6 Cash Flow hedge instruments (1.5) 73.5 Actuarial gains / losses 2.2 (10.3) Currency translation adjustments 14.2 70.8 Income tax on other comprehensive income (5.0) (1.1) Total other comprehensive inco
Slide 50: Statement of change in equity
Statement of change in equity Attributable to Currency shareholders minority (€ millions) interests Share Share translation Other Total of the capital premium reserves reserves equity Company Dec. 31, 2010 13.1 117.8 26.3 702.7 859.9 844.4 15.5 Exercise of stock options 0.2 29.4 - - 29.6 29.6 - Fair
Slide 51: Cash flow statement
Cash flow statement (€ millions) FY 2011 FY 2010 Profit before income tax 422.2 410.5 Elimination of cash flows from financing and investing activities 44.8 42.2 Provisions and other non-cash items (4.9) 8.8 Depreciation, amortization and impairment 129.1 96.6 Movements in working capital attributab
Slide 52: Details of adjusted net financial debt calculation
Details of adjusted net financial debt calculation (€ millions) Dec. 2011 Dec. 2010 Bank borrowings (non-current) 999.4 1,185.8 Bank borrowings (current) 253.0 85.2 Bank overdrafts 13.2 23.6 Gross financial debt 1,265.6 1,294.6 Total cash and cash equivalents 244.1 225.0 Net financial debt 1,021.5 1
Slide 53: Currency exposure
Currency exposure Revenue currency split Key Sensitivities Others 22% Group Euro 1% Euro Group Operating Revenue 36% Change vs. Profit Impact Impact USD 0.16% 0.20% BRL 5% JPY AUD 0.07% 0.04% 2% CNY 5% CNY 0.05% 0.09% AUD 7% GBP BRL 0.05% 0.04% USD 3% HKD 16% 4% HKD 0.04% 0.08% © - Copyright Bureau
Slide 54: Earnings per share
Earnings per share (€ per share) FY 2011 FY 2010 Change Basic EPS(1) 2.72 2.68 +1.5% Diluted EPS(2) 2.67 2.63 +1.5% Basic adjusted EPS(1) 3.18 2.91 +9.3% Diluted adjusted EPS(2) 3.13 2.85 +9.8% (1) Calculated on weighted average number of shares of 109,354,907 in 2011 and 108,403,796 in 2010 (2) Cal
Slide 55: 11 acquisitions in 2011
11 acquisitions in 2011 > €50m in annual revenues Name Date Division Country 2011 Revenues (3) AutoReg AutoVis Jan. 11 Vehicle insurance damage inspection Brazil 28.9 Atomic technologies Feb. 11 NDT(1) focused on O&G Singapore 2.0 Scientige Mar. 11 AIM(2) Services Malaysia 8.2 Oceanic Développement
Slide 56: Shareholder structure
Shareholder structure Market capitalization of €6.5bn at February 22, 2012 Ownership structure Free float breakdown Treasury Individual shares investors 0.5% 6% Free Float 45.7% Wendel groupe 50.9% Instutitional Employees investors(1) Managers 0.8% 2.1% 94% (1) US: 36% France: 24% UK: 17% Continenta
Slide 57: Bureau Veritas – Move Forward with Confidence
BUREAU Move Forward with Confidence