Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — FY2013 Earnings Presentation
52 slides from Bureau Veritas Sa's earnings presentation, Mar 6, 2014
Slide 1: 2013 Full-Year Results
2013 FULL-YEAR RESULTS March 6, 2014
Slide 2: Disclaimer
2013 FULL-YEAR RESULTS 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 descri
Slide 3: Agenda
Agenda HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW OUTLOOK APPENDICES Q&A March 6, 2014
Slide 4: Highlights
2013 FULL-YEAR RESULTS HIGHLIGHTS Didier Michaud-Daniel Chief Executive Officer March 6, 2014
Slide 5: 2013 key highlights
2013 FULL-YEAR RESULTS 2013 key highlights KEY HIGHLIGHTS EUR FY @constant 2013 VLY currencies Revenue 3.9Bn +0.8% +5.5% Adjusted operating margin 16.7% +30bps +60 bps Adjusted EPS 0.91 - +8.8% • 3.5% organic revenue growth… Metals & Minerals • Acquisitions… 7 bolt-ons completed + Maxxam • Margin ex
Slide 6: Portfolio of businesses
KEY Portfolio of businesses HIGHLIGHTS Revenue Adjusted operating profit 13% 7% 18% 8% Consumer Products GSIT Consumer Products GSIT 7% 12% Marine Marine 17% 11% Commodities Commodities 24% 22% Industry Industry 9% 9% Certification Certification 11% 12% 10% 10% Construction IVS Construction IVS IVS:
Slide 7: Geographical exposure (excl. Maxxam)
KEY Geographical exposure (excl. Maxxam) HIGHLIGHTS Americas Europe Middle East Africa 24% 16,300 employees 35% 14,000 employees 14% Eastern Europe 270 offices & labs 380 offices & labs 9,600 employees 290 offices & labs Asia Pacific 27% 21,700 employees 390 offices & labs Fast growing countries 54%
Slide 8: Acquisitions: EUR 285m of revenues
2013 FULL-YEAR RESULTS Acquisitions: EUR 285m of revenues KEY HIGHLIGHTS 7Layers: Global leadership in wireless testing • Germany, China, South Korea, US Sievert / LVQ-WP: Expertise in non destructive testing • India and the Middle East / Germany and Eastern Europe KBI / CKM: Expansion in Constructi
Slide 9: Maxxam: the leader in Canada
2013 FULL-YEAR RESULTS Maxxam: the leader in Canada KEY HIGHLIGHTS KEY FINANCIALS HIGHLIGHTS Founded 40 years ago 246 269 Headquartered in Toronto Best in class laboratory operations Revenue March March Recognized technical excellence (CADm) 13 14 E 22 labs in Canada, 2,500 employees Acquisition com
Slide 10: Operational excellence initiatives
2013 FULL-YEAR RESULTS Operational excellence initiatives KEY HIGHLIGHTS Portfolio optimization • Focus on high value added services • Disposals/discontinuation Lean management • Expansion of the Lean culture and expertise • Mobilization across the network with 140 projects • Advanced initiatives: F
Slide 11: Financial Review
2013 FULL-YEAR RESULTS FINANCIAL REVIEW Sami Badarani Chief Financial Officer March 6, 2014
Slide 12: Summary income statement
FINANCIAL Summary income statement REVIEW (EUR millions) @ constant FY 2013 FY 2012 VLY currencies Revenue 3,933.1 3,902.3 +0.8% +5.5% Adjusted operating profit 656.9 639.2 +2.8% +9.4% Adjusted operating margin 16.7% 16.4% +30bps +60 bps Other operating expenses (67.3) (120.9) Operating profit 589.6
Slide 13: Revenue growth
FINANCIAL Revenue growth REVIEW (EUR millions) +5.5% +2.8% (0.8)% +3.5% 3,902.3 3,933.1 (4.7)% FY 2012 Organic Acquisitions Disposals Currencies FY 2013 Q4 2013 +1.6% +2.0% (0.5)% (6.5)% © Copyright Bureau Veritas / March 6, 2014 / P 13
Slide 14: FY 2013 Organic growth
FINANCIAL FY 2013 Organic growth REVIEW 2013 Revenue split (%) FY 2013 Organic 88% of portfolio +7.3% 12% Oil & Petrochemicals (Commodities) +14.4% Consumer Products +9.7% Industry +8.3% Construction +5.2% Others (1) +5.1% 12% of portfolio (16.7)% 88% Marine new construction (14.8)% Metals & Mineral
Slide 15: Q4 2013 Organic growth
FINANCIAL Q4 2013 Organic growth REVIEW Q4 2013 Revenue split (%) Q4 2013 Organic 89% of portfolio +5.4% 11% Oil & Petrochemicals (Commodities) +11.5% Consumer Products +10.7% Industry +3.7% Construction +7.7% Others (1) +3.1% 11% of portfolio (20.6)% 89% Marine new construction (4.5)% Metals & Mine
Slide 16: Currency impact
FINANCIAL Currency impact REVIEW 2013 Revenue by currency (%) Currency impact EURm % 12 currencies EUR with strong drop 32% 29% • 12 currencies with strong drop (140) (12.2)% AUD, BRL, ARS, JPY, ZAR, COP, INR, CLP, GBP, TRY, IDR, RUB • USD & correlated currencies (22) (3.3)% CNY 7% USD & • Other cur
Slide 17: Adjusted operating profit
FINANCIAL Adjusted operating profit REVIEW (EUR millions) FY 2013 FY 2012 VLY Operating profit 589.6 518.3 +13.8% Amortization of acquisition intangibles 51.1 53.9 Goodwill impairment - 25.3 Restructuring & disposals 12.8 38.4 Acquisition related costs 3.4 3.3 Total other operating expenses 67.3 120
Slide 18: Adjusted operating profit
FINANCIAL Adjusted operating profit REVIEW (EUR millions) +77.1 656.9 +6.8 639.2 (42.1) (24.1) FY 2012 Spain Infrastructure Metals & Minerals Rest of business Currencies FY 2013 disposal Margin 16.4% +20 bps (40) bps +80 bps (30) bps 16.7% +60 bps margin ~EUR 60m adjusted operating profit © Copyrigh
Slide 19: Adjusted operating margin drivers
FINANCIAL Adjusted operating margin drivers REVIEW (EUR millions) Key drivers Y-o-Y profit 2013 VLY Volume Operational excellence growth Margin bps +29 Industry 15.3% +90 Portfolio optimization +22 Construction 14.7% +420 Spain disposal +17 Consumer Products 24.1% (40) Lean, mix +16 IVS 13.9% +300 =
Slide 20: Net financial expense
FINANCIAL Net financial expense REVIEW (EUR millions) FY 2013 FY 2012 VLY Net finance cost (60.8) (54.3) (6.5) Foreign exchange gain / (loss) 2.2 (6.5) +8.7 Interest cost on pension plans (3.2) (4.8) +1.6 Other financial expenses (2.2) (3.7) +1.5 Net financial expense (64.0) (69.3) +5.3 © Copyright
Slide 21: Effective tax rate (ETR)
FINANCIAL Effective tax rate (ETR) REVIEW (EUR millions) Adjusted ETR ETR 2012 Rate 31.6% 27.7% Variation in basis points: Spain exceptional items (350) - France +260 +230 No deferred tax on Losses +100 +80 Withholding tax on affiliates dividends +30 +20 Other +20 +10 Total variation +60 +340 2013 R
Slide 22: Summary cash flow statement
FINANCIAL Summary cash flow statement REVIEW (EUR millions) FY 2013 FY 2012 VLY Profit before income tax 525.6 449.0 +76.6 Elimination of financing and investing activities 57.1 61.1 Provisions and other non-cash items 25.8 31.1 Depreciation, amortization and impairment 149.4 167.9 Movements in work
Slide 23: Adjusted net financial debt
FINANCIAL Adjusted net financial debt REVIEW (EUR millions) 101.6 10.8 1,328.4 216.8 1,150.7 172.8 324.3 Dec. 2012 Free cash-flow Acquisitions Dividends Stock options/ Other Dec. 2013 Share buybacks Adjusted net financial debt as defined for the Group’s covenants calculation © Copyright Bureau Verit
Slide 24: Leverage ratio
FINANCIAL Leverage ratio REVIEW 2.51 1.89 1.78 1.60 1.59 1.71 1.38 Jun-08 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Leverage ratio = Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amortization and provisions) adjusted for all units acquired over the past 12 months
Slide 25: Summary financial position
FINANCIAL Summary financial position REVIEW (EUR millions) Dec. 2013 Dec. 2012 VLY Goodwill 1,412.1 1,486.3 (74.2) Net fixed assets 775.8 764.8 11.0 Working capital (WC) 334.5 272.8 61.7 Capital employed 2,522.4 2,523.9 (1.5) Equity 982.1 1,167.8 (185.7) Adjusted net financial debt 1,328.4 1,150.7 1
Slide 26: Earnings per share (EPS)
FINANCIAL Earnings per share (EPS) REVIEW (EUR / share) Adj. EPS +8.8% Basic EPS +16.2% @ constant currencies 0.91 0.91 0.79 0.68 2012 2013 2012 2013 A dividend of EUR 0.48 per share will be proposed at the AGM of May 21, 2014 +4.9% vs 2012 (0.46 adjusted for the 1-to-4 split) 53% of adjusted EPS ©
Slide 27: Business Review
2013 FULL-YEAR RESULTS BUSINESS REVIEW Didier Michaud-Daniel Chief Executive Officer March 6, 2014
Slide 28: Industry
2013 FULL-YEAR RESULTS Industry BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Oil&Gas projects in Latin America, 939.4 Asia Pacific and the Middle East 875.7 Q4 organic growth impacted by one-offs/seasonality Revenue FY 12 FY 13 +8.3% Acquisitions growth +6.1% (EUR m) organic - Non destructive test
Slide 29: Consumer Products
2013 FULL-YEAR RESULTS Consumer Products BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS 7.5% external growth: 7Layers acquisition 505.3 442.9 Global leadership in wireless testing Recovery in toys Revenue FY 12 FY 13 +9.7% (EUR m) organic Strong growth in softlines: growth US recovery Margin 24.5% 2
Slide 30: Commodities
2013 FULL-YEAR RESULTS Commodities BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS O&P +14.4% organic growth 713.6 laboratory expansion, new services 664.5 M&M (17.5)% Reduction in exploration in all regions Revenue (1.7)% FY 12 FY 13 Restructuring (EUR m) organic growth Coal +4.1%, Agriculture +6.7%
Slide 31: Construction
2013 FULL-YEAR RESULTS Construction BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Stabilization in France 425.9 439.7 US code compliance recovery PF 12 FY 13 Strong organic growth in Asia, Revenue +5.2% 2 acquisitions: Japan, Singapore (EUR m) organic Spain infrastructure disposal, growth geographi
Slide 32: In-Service Inspection & Verification
2013 FULL-YEAR RESULTS In-Service Inspection & Verification BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Resilient organic growth in Europe, stabilization confirmed in Spain 478.8 477.4 Development in fast growing countries: South Asia, Middle East Revenue FY 12 FY 13 +2.7% (EUR m) Lean management
Slide 33: Certification
2013 FULL-YEAR RESULTS Certification BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Slowdown in Europe in conventional 344.9 schemes (ISO 9K, 14K, OHSAS 18k) 335.0 Expansion in sector schemes and large contracts Revenue FY 12 FY 13 +1.3% (EUR m) organic End of the Kyoto Protocol Program growth Margi
Slide 34: Government Services & International Trade
Government Services & 2013 FULL-YEAR RESULTS International Trade BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Strong growth in Verification of 281.8 277.6 Conformity (Kurdistan) Expansion in Automotive +2.7% Reduction in Pre-Shipment Revenue FY 12 FY 13 (EUR m) organic Inspection (Angola, Ivory Co
Slide 35: Marine
2013 FULL-YEAR RESULTS Marine BUSINESS REVIEW KEY FINANCIALS 2013 HIGHLIGHTS Stabilization in H2 317.0 294.2 In-service (57% of revenue) – Fleet up 7.1% in GRT Revenue FY 12 FY 13 (4.6)% – New regulations (Labor convention) (EUR m) Organic growth New construction (43% of revenue) Margin 26.9% 26.6%
Slide 36: Outlook
2013 FULL-YEAR RESULTS OUTLOOK Didier Michaud-Daniel Chief Executive Officer March 6, 2014
Slide 37: Outlook
2013 FULL-YEAR RESULTS Outlook OUTLOOK 2014 Outlook The Group expects a gradual increase in organic growth momentum and further margin expansion. BV2015 financial targets for 2012-2015 Revenue: +9-12% / year on average @constant exchange rates Two-thirds from organic growth: +6-8% / year on average
Slide 38: Q&A
2013 FULL-YEAR RESULTS Q&A March 6, 2014
Slide 39: Appendices
2013 FULL-YEAR RESULTS APPENDICES March 6, 2014
Slide 40: Revenue by business
Revenue by business APPENDICES Q4 2013 FY 2013 EURm Organic Scope FX EURm Organic Scope FX Marine 75.2 (0.3)% +0.1% (4.2)% 294.2 (4.6)% +0.1% (2.7)% Industry 236.9 +3.7% +3.8% (9.3)% 939.4 +8.3% +6.1% (7.1)% IVS 131.2 +4.8% (1.1)% (2.4)% 477.4 +2.7% (1.2)% (1.8)% Construction 117.6 +7.7% (1.3)% (4.8
Slide 41: Adjusted operating profit by business
Adjusted operating profit by business APPENDICES (EUR millions) Adjusted operating profit Adjusted operating margin FY 2013 FY 2012 Var. FY 2013 FY 2012 Var. Marine 78.2 85.3 (8.3)% 26.6% 26.9% (30) bps Industry 143.3 125.8 +13.9% 15.3% 14.4% +90 bps IVS 66.2 52.4 +26.3% 13.9% 10.9% +300 bps Constru
Slide 42: Half-year adjusted operating margin
Half-year adjusted operating margin APPENDICES H1 2013 H2 2013 H1 2012 H2 2012 Marine 27.2% 26.0% 29.5% 24.2% Industry 14.6% 15.9% 13.3% 15.3% IVS 10.5% 17.0% 9.5% 12.4% Construction 11.9% 17.3% 10.8% 10.2% Certification 17.9% 16.4% 17.5% 18.2% Commodities 11.7% 10.0% 13.2% 14.5% Consumer Products 2
Slide 43: Adjusted net profit
Adjusted net profit APPENDICES (EUR millions) FY 2013 FY 2012 VLY Profit before income tax 525.6 449.0 +17.1% Income tax expense (169.1) (141.8) Non controlling interests (11.4) (9.6) Attributable net profit 345.1 297.6 +16.0% Other operating expenses 67.3 120.9 Tax effect on other operating expense
Slide 44: Consolidated income statement
Consolidated income statement APPENDICES (EUR millions) FY 2013 FY 2012 Revenue 3,933.1 3,902.3 Purchase and external charges (1,120.5) (1,136.3) Personnel costs (2,017.1) (1,966.9) Taxes other than on income (53.8) (69.3) Net (additions to)/reversals of provisions (19.4) (10.5) Depreciation and amo
Slide 45: Consolidated comprehensive income
Consolidated comprehensive income APPENDICES (EUR millions) FY 2013 FY 2012 Net profit 356.5 307.2 Currency translation differences (239.4) (20.1) Cash-flow hedges (6.9) (11.0) Income tax on items reclassified to profit or loss 3.5 1.6 Total of other comprehensive income reclassified to profit or lo
Slide 46: Consolidated financial position
Consolidated financial position APPENDICES (EUR millions) Dec. 2013 Dec. 2012 Goodwill 1,412.1 1,486.3 Intangible assets 374.5 385.4 Property, plant and equipment 401.3 379.4 Other non-current assets 168.5 179.2 Total non-current assets 2,356.4 2,430.3 Trade and other receivables 1,122.5 1,060.5 Oth
Slide 47: Statement of change in equity
Statement of change in equity APPENDICES (EUR millions) Attributable to Currency Share Share Other Total Shareholders translation Minority capital premium reserves equity of the reserves interests Company December 31, 2012 13.3 115.3 83.9 955.3 1,167.8 1,144.5 23.3 Capital increase 39.8 (39.8) - - -
Slide 48: Cash flow statement
Cash flow statement APPENDICES (EUR millions) FY 2013 FY 2012 Profit before income tax 525.6 449.0 Elimination of cash flows from financing and investing activities 57.1 61.1 Provisions and other non-cash items 25.8 31.1 Depreciation, amortization and impairment 149.4 167.9 Movements in working capi
Slide 49: Acquisitions
Acquisitions APPENDICES (EUR millions) LTM 2013 Date Description Footprint revenues Germany, USA, 7Layers Jan. 2013 Global leader in SmartWorld / Wireless testing 31.1 Korea, China LVQ-WP Apr. 2013 Non Destructive Testing (NDT) Germany 7.4 India and the Sievert July 2013 Non Destructive Testing (NDT
Slide 50: Adjusted net financial debt
Adjusted net financial debt APPENDICES (EUR millions) Dec. 2013 Dec. 2012 Bank borrowings (non-current) 1,407.1 1,282.7 Bank borrowings (current) 71.3 119.6 Bank overdrafts 32.9 8.7 Gross financial debt 1,511.3 1,411.0 Total cash and cash equivalents 190.6 243.5 Net financial debt 1,320.7 1,167.5 Im
Slide 51: Earnings per share
Earnings per share APPENDICES (EUR per share) FY 2013 FY 2012 Basic EPS 0.79 0.68 Basic adjusted EPS 0.91 0.91 Weighted average number of shares 438,576,063 440,779,231 Diluted EPS 0.77 0.66 Diluted adjusted EPS 0.89 0.90 weighted average number of shares for diluted earnings 446,293,888 448,032,488
Slide 52: Ownership at December 31, 2013
Ownership at December 31, 2013 APPENDICES Treasury shares 1.0% Wendel 50.9% Free Float 46.0% Employees & Management 2.1% © Copyright Bureau Veritas / March 6, 2014 / P 52