Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — H1 2011 Earnings Presentation
51 slides from Bureau Veritas Sa's earnings presentation, Aug 25, 2011
Slide 1: 2011 Half-Year Results
2011 Half-Year Results August 25, 2011 Frank Piedelièvre Chairman & Chief Executive Officer François Tardan Chief Financial Officer Sami Badarani Deputy Chief Financial Officer Copyright©2011 Bureau Veritas - All rights reserved.
Slide 2: Agenda
Agenda Highlights Financial review Business review Outlook Q&A Appendix Copyright©2011 Bureau Veritas - All rights reserved. August 25, 2011 2
Slide 3: H1 2011 Highlights
H1 2011 Highlights Frank Piedelièvre Chairman & Chief Executive Officer Copyright©2011 Bureau Veritas - All rights reserved.
Slide 4: Bureau Veritas at a glance
Bureau Veritas at a glance Revenue by business* Marine Commodities 10% 16% Founded in 1828 Government Services Industry A global leader in conformity assessment 7% 21% and certification services Consumer Products 11% Offering services and innovative solutions Certification to its clients to ensure t
Slide 5: Highlights
Highlights H1 2011 performance Revenues +20% Adjusted operating margin at 16% Attributable adjusted net profit +10% Completion of four acquisitions since January 1st 2011 generating €30m of annualized revenues: Auto Reg: vehicle insurance damage inspection in Brazil Atomic: non-destructive testing i
Slide 6: 47% of revenues in fast growing zones
47% of revenues in fast growing zones Asia Pacific (25%) (% of H1 2011 revenue) South America (11%) Middle East & Africa (8%) Russia & Eastern Europe (3%) 47% Fast Growing zones 53% Mature countries North America (8%) France (21%) Western Europe (22%) Japan (2%) Copyright©2011 Bureau Veritas - All r
Slide 7: Financial Review
Financial Review François Tardan Chief Financial Officer Sami Badarani Deputy Chief Financial Officer Copyright©2011 Bureau Veritas - All rights reserved.
Slide 8: Summary income statement
Summary income statement (in € millions) H1 2011 H1 2010 Change Revenue 1,622.8 1,349.1 +20.3% Adjusted operating profit(1) 259.5 225.6 +15.0% Adjusted operating margin 16.0% 16.7% (70) bps Other operating expense (17.5) (11.9) +47.1% Operating profit 242.0 213.7 +13.2% Net financial expense (28.4)
Slide 9: Q2 2011 revenue
Q2 2011 revenue (€m) +14.3% 847.8 720.2 +6.7% (3.3)% Total growth of +17.7% Q2 2010 Revenue Organic Growth External Growth Currency Impact Q2 2011 Revenue All businesses growing organically except Construction Copyright©2011 Bureau Veritas - All rights reserved. August 25, 2011 9
Slide 10: H1 2011 revenue
H1 2011 revenue (€m) +14.2% 1,622.8 +6.6% 1,349.1 (0.5)% Total growth of +20.3% H1 2010 Revenue Organic Growth External Growth Currency Impact H1 2011 Revenue All businesses growing organically except Construction and Certification Copyright©2011 Bureau Veritas - All rights reserved. August 25, 2011
Slide 11: Adjusted operating profit
Adjusted operating profit (in € millions) H1 2011 H1 2010 Change Operating profit 242.0 213.7 +13.2% Amortization of acquisition intangibles 17.9 10.7 +€7.2m Discontinued activities (0.5) (1.3) €(0.8)m Acquisition fees 0.1 2.5 €(2.4)m Total other operating expense 17.5 11.9 +47.1% Adjusted operating
Slide 12: Net financial expense
Net financial expense (in € millions) H1 2011 H1 2010 Finance costs, net (18.9) (18.1) O/w Fair value adjustments on interest rate hedges 2.6 (0.9) Foreign exchange gains / (losses) (6.7) 9.6 Interest cost on pension plans (2.1) (2.2) Other financial income / (expense) (0.7) (4.5) Net financial expe
Slide 13: Adjusted net profit
Adjusted net profit (in € millions) H1 2011 H1 2010 Change Adjusted operating profit 259.5 225.6 +15.0% Net financial expense (28.4) (15.2) +86.8% Adjusted income tax(1) (62.9) (57.6) +9.2% Share of profit of associates 0,1 (0.1) - Adjusted net profit 168.3 152.7 +10.2% Minority interests (4.1) (3.2
Slide 14: Summary cash flow statement
Summary cash flow statement (in € millions) H1 2011 H1 2010 Change Profit before income tax 213.7 198.4 +7.7% Elimination of cash flows from financing and investing activities 21.7 19.8 Provisions and other non-cash items (11.4) (7.3) Depreciation, amortisation and impairment, net 54.2 40.0 Cash bef
Slide 15: Summary financial position
Summary financial position (in € millions) June 2011 June 2010 Goodwill 1,301.8 936.2 Net fixed assets 610.0 396.4 Other non current assets 126.0 101.5 Working capital requirements (WCR) 289.4 241.9 WCR as a % of LTM revenues 9.0% 9.1% Total investment 2,327.2 1,676.0 Total equity 838.8 708.6 Other
Slide 16: Adjusted net financial debt
Adjusted net financial debt(1) (in € millions) 126.9 1,156.0 1,051.8 47.7 19.7 19.9 30.8 Net Debt at Levered free Acquisition Dividends Capital Others Net Debt at Dec. 2010 cash flow spend increase Jun. 2011 (1) Net financial debt after currency hedging instruments as defined for the Group’s covenan
Slide 17: Optimised leverage ratio
Optimised leverage ratio(1) 2.51x Inspectorate Inspectorate acquisition acquisition 2.07x 1.94x 1.89x 1.78x 1.38x 1.31x Amdel Amdel acquisition acquisition Dec 07 June 08 Dec 08 Dec 09 June 10 Dec 10 June 11 (1) Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amort
Slide 18: Business Review
Business Review Frank Piedelièvre Chairman & Chief Executive Officer Copyright©2011 Bureau Veritas - All rights reserved.
Slide 19: Revenue by business
Revenue by business Q2 2011 H1 2011 €m Organic Scope FX €m Organic Scope FX Marine 82.6 7.0% - (3.4)% 159.7 2.8% - (0.4)% Industry 178.0 17.3% 1.9% (3.5)% 337.2 16.7% 1.0% 0.2% IVS 109.1 2.6% 0.4% (1.5)% 214.5 3.1% (0.1)% (0.5)% Construction 102.7 (3.6)% (0.4)% (2.6)% 204.1 (0.5)% (1.3)% (0.8)% 84.1
Slide 20: Adjusted operating profit by business
Adjusted operating profit by business Adj. Operating profit Adj. Operating margin H1 2011 H1 2010 Change H1 2011 H1 2010 Change Marine 49.2 48.2 +2.1% 30.8% 30.9% (10)bps Industry 37.8 31.7 +19.2% 11.2% 11.1% +10bps IVS 20.6 22.7 (9.3)% 9.6% 10.9% (130)bps Construction 22.4 20.8 +7.7% 11.0% 9.9% +11
Slide 21: Marine
Marine Conformity assessment of ships and marine equipment H1 2011 H1 2010 Change Revenue €159.7m €156.0m 2.4% Organic 2.8% Scope - Currency (0.4)% Adjusted operating profit €49.2m €48.2m +2.1% Adjusted operating margin 30.8% 30.9% (10)bps Copyright©2011 Bureau Veritas - All rights reserved.
Slide 22: Marine
Marine +2.8% Organic growth BV new construction indicators New ships and equipment certification (54% of revenues) (GRTm) 35.6 New orders intake at GRT 3.9m +2.4% vs June 2010 30.2 31.0 Market share up at 12.4% in tonnage, 20.2% in number of ships 28.8 26.0 Key wins: Offshore: 2 FPSO conversion for
Slide 23: Industry
Industry Conformity assessment of facilities/equipment H1 2011 H1 2010 Change Revenue €337.2m €286.1m +17.9% Organic +16.7% Scope +1.0% Currency +0.2% Adjusted operating profit 37.8 31.7 +19.2% Adjusted operating margin 11.2% 11.1% +10bps Copyright©2011 Bureau Veritas - All rights reserved.
Slide 24: Industry
Industry H1 2011 revenue by zone +16.7% Organic growth North America 5% Latin America All major segments and geographies contributing 27% Oil & Gas including Offshore Europe Power: Fossil, Nuclear and Renewable 33% Process: Mining, Chemicals, Pharma and Food Fast growing geographies (Capex) Asia Pac
Slide 25: In-Service Inspection & Verification
In-Service Inspection & Verification Periodic inspection of equipment & facilities to assess conformity with regulations H1 2011 H1 2010 Change Revenue €214.5m €209.2m +2.5% Organic +3.1% Scope (0.1)% Currency (0.5)% Adjusted operating profit €20.6m €22.7m (9.3)% Adjusted operating margin 9.6% 10.9%
Slide 26: In-Service Inspection & Verification
In-Service Inspection & Verification H1 2011 Revenue by geography Middle East & Africa Others +3.1% Organic growth 3% 1% Latin America 4% New HVAC regulations in Europe USA 5% Growing in all geographies except South Europe (Spain, Portugal, Italy) France End of exclusivity in Catalonia 56% Europe 31
Slide 27: Construction
Construction Conformity assessment of buildings and infrastructure H1 2011 H1 2010 Change Revenue €204.1m €209.6m (2.6)% Organic (0.5)% Scope (1.3)% Currency (0.8)% Adjusted operating profit €22.4m €20.8m +7.7% Adjusted operating margin 11.0% 9.9% +110bps Copyright©2011 Bureau Veritas - All rights r
Slide 28: Construction
Construction H1 2011 revenue by geography -0.5% Organic growth Middle-East & Africa Others 4% 4% Progressive recovery in France Continuous deterioration in Spain and still negative in the US USA 16% France Asia growing (Japan, China, South East Asia) and 50% Africa and Middle East Asia 10% 11.0% Adj
Slide 29: Certification
Certification Certification of management systems in the area of QHSE and second party auditing services H1 2011 H1 2010 Change Revenue €156.2m €157.1m (0.6)% Organic (0.8)% Scope +0.1% Currency +0.1% Adjusted operating profit €31.7m €30.9m +2.6% Adjusted operating margin 20.3% 19.7% +60bps Copyrigh
Slide 30: Certification
Certification -0.8% Organic evolution H1 2011 revenue by geography +6.4% Organic growth when adjusting for the Asia Pacific GSAC contract (French civil aviation authority) 16% terminated in October 2010 North America Strong growth in HSE & Combined QHSE schemes, 4% Europe Food, Training and New Prod
Slide 31: Commodities
Commodities Commodities inspection and testing Oil & Petrochemicals – Metals & Minerals - Agriculture H1 2011 H1 2010 Change Revenue €258.7m €63.8m +305.5% Organic +11.7% Scope +292.0% Currency +1.8% Adjusted operating profit €31.0m €5.5m +463.6% Adjusted operating margin 12.0% 8.6% +340bps Copyrigh
Slide 32: Commodities
Commodities H1 2011 revenue +11.7% Organic growth Strong organic growth in upstream minerals Agriculture Oil & (Australia, Latin America, Africa) 10% Petrochemicals 36% US Oil & Petrochemicals ramp up in June after a weak start of the year Coal impacted by Queensland flood Metals & 12.0% Adjusted op
Slide 33: Consumer Products
Consumer Products Testing, inspection and certification of consumer goods H1 2011 H1 2010 Change Revenue €183.9m €182.7m +0.7% Organic +3.1% Scope +0.6% Currency (3.0)% Adjusted operating profit €46.8m €49.8m (6.0)% Adjusted operating margin 25.4% 27.3% (190)bps Copyright©2011 Bureau Veritas - All r
Slide 34: Consumer Products
Consumer Products +3.1% Organic growth (Q2 at +4.2%) H1 2011 revenue by product Electrical Toys & hardlines Slow start back from Chinese New Year & electronics 39% Reduced testing in a few key clients programs 22% (toys) Good growth in inspection and social accountability audits (increased presence
Slide 35: Government Services & International Trade
Government Services & International Trade Trade facilitation services H1 2011 H1 2010 Change Revenue €108.5m €84.6m +28.3% Organic +12.6% Scope +17.9% Currency (2.2)% Adjusted operating profit €20.0m €16.0m +25.0% Adjusted operating margin 18.4% 18.9% (50)bps Copyright©2011 Bureau Veritas - All righ
Slide 36: Government Services & International Trade
Government Services & International Trade H1 2011 revenue by geography +12.6% Organic growth Latin America Middle East 19% & Asia Increased volumes inspected, particularly in 18% mining countries (RDC, Guinea-Conakry) North America 1% Recovery in Ivory Coast since June Europe Sustained growth in Ver
Slide 37: Outlook
Outlook Frank Piedelièvre Chairman & Chief Executive Officer Copyright©2011 Bureau Veritas - All rights reserved.
Slide 38: 2011 Outlook
2011 Outlook The Group confirms strong growth in FY 2011 revenues and adjusted operating profit at constant currencies, matching with 2006-2011 objectives : Contribution from 2010 and year-to-date acquisitions Organic growth exceeding that of last year and consistent with H2 2010 As of today, the Gr
Slide 39: Q&A
Q&A Copyright©2011 Bureau Veritas - All rights reserved.
Slide 40: Bureau Veritas - Move Forward with Confidence
BUREAU |BUREAU_ VERITAS Move Forward with Confidence
Slide 41: Appendix
Appendix Copyright©2011 Bureau Veritas - All rights reserved.
Slide 42: Consolidated income statement
Consolidated income statement (in € millions) H1 2011 H1 2010 Revenue 1,622.8 1,349.1 Purchase and external charges (469.8) (387.3) Personnel costs (839.8) (699.1) Taxes other than on income (32.2) (28.8) Net (additions to)/reversals of provisions 12.4 7.7 Depreciation and amortization (54.2) (37.2)
Slide 43: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income (in € millions) H1 2011 H1 2010 Net profit 155.5 144.0 Cash Flow hedge instruments 7.9 22.7 Actuarial gain / (losses) - - Currency translation adjustments (75.5) 134.8 Financial assets held for sale - - Income tax on other comprehensive income (2.7) (7.
Slide 44: Consolidated financial position
Consolidated financial position (in € millions) Jun. 2011 Dec. 2010 Goodwill 1,301.8 1,329.3 Intangible assets 325.5 330.4 Property, plant and equipment 284.6 281.1 Other non-current assets 147.3 148.9 Total non-current assets 2,059.2 2,089.7 Trade and other receivables 995.6 929.7 Other current ass
Slide 45: Statement of changes in equity
Statement of changes in equity Attributable Currency Attributable to to minority (in € millions) Share Share translation Other Total shareholders interests capital premium reserves reserves equity of the Company January 1, 2011 13.1 117.8 26.3 702.7 859.9 844.5 15.5 Exercise of stock options 0.1 19.
Slide 46: Cash flow statement
Cash flow statement (in € millions) H1 2011 H1 2010 Profit before income tax 213.7 198.4 Elimination of cash flows from financing and investing activities 21.7 19.8 Provisions and other non-cash items (11.4) (7.3) Depreciation, amortization and impairment 54.2 40.0 Movements in working capital attri
Slide 47: Detail of adjusted net financial debt calculation
Detail of adjusted net financial debt calculation (in € millions) Jun. 2011 Dec. 2010 Bank borrowings (non-current) 1,184.4 1,185.8 Bank borrowings (current) 104.7 85.2 Bank overdrafts 36.4 23.6 Gross financial debt 1,325.5 1,294.6 Total cash and cash equivalents 168.2 225.0 Net financial debt 1,157
Slide 48: Earnings per share (EPS)
Earnings per share (EPS) (in € millions) H1 2011 H1 2010 Change Basic EPS(1) 1.39 1.30 +6.9% Diluted EPS(2) 1.37 1.28 +7.0% Basic adjusted EPS(1) 1.51 1.38 +9.4% Diluted adjusted EPS(2) 1.48 1.36 +8.8% (1) Calculated on weighted average number of shares of 108,951,467 in June 2011 and 108,091,142 in
Slide 49: Currency exposure
Currency exposure Revenue Currency Split(1) Key Sensitivities(1) Group 1% Euro Group Operating Revenue Others 22% Change vs. Profit Impact Impact Euro 37% BRL 5% USD 0.16% 0.21% CNY 5% CNY 0.05% 0.08% JPY 2% AUD 6% HKD 0.04% 0.09% GBP 3% HKD 4% USD 16% GBP 0.04% 0.02% AUD 0.07% 0.03% 1. As of May 31
Slide 50: Shareholder structure
Shareholder structure Market capitalization of €5.9 bn at August 24, 2011 Ownership structure(1) Free float breakdown(2) Treasury Individual investors shares 0.6% 9% Free Float 45.0% Wendel group 51.1% Institutional investors 91% Employees Managers o/w 26% US 0.8% 2.5% 24% France 21% UK 16% Continen
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 Document de