Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — FY2015 Earnings Presentation
57 slides from Bureau Veritas Sa's earnings presentation, Feb 25, 2016
Slide 1: Full-Year Results
FULL-YEAR RESULTS February 25, 2016 © Copyright Bureau Veritas
Slide 2: Agenda
Agenda Highlights Outlook Financial review Business review Conclusion Appendix February 25, 2016 / Full-year results 2015 / © Copyright Bureau Veritas
Slide 3: Highlights
Highlights February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 4: 2015 Highlights
2015 Highlights Solid revenue growth of 11.1%, +5.6% @cc Proactive cost management ● Organic growth: +1.9% ● O&G, M&M restructuring: €20.8m - Activities exposed to the drop in oil price (13% of ● M&M asset impairment: €100m 2015 Group revenue): -10% - Solid growth in the rest of the portfolio: +4% R
Slide 5: #9 Acquisitions in 2015
#9 Acquisitions in 2015 Date Footprint # of acquisitions SHANDONG CHENGXIN Jan. China 2013-2015 CHINA NINGBO HENXIN Jan. China 9 8 7 SHANGHAI XIETONG Jul. China CTS Jan. China CONSUMER CERTEST Dec. Italy 2013 2014 2015 NCC Dec. Brazil NORTH ISLAND LAB. Jan. Canada €480m IVS CIBV Jul. The Netherlands
Slide 6: Executing the transformation strategy
Executing the transformation strategy Increasing penetration of the €200bn TIC market 8 GROWTH INITIATIVES 2 PRIMARY COUNTRIES 4 LEVERS Account management Enhanced offering USA Excellence@BV Adjacent segments China Digitalization Portfolio expansion Human Resources MID/LONG TERM OUTLOOK Revenue grow
Slide 7: 4 divisions
Organization Deploying an efficient matrix model with market-centric service lines Marine & Offshore CIF 4 divisions Consumer Products North Global Africa, Middle Latin America Europe GSIT America Service line East, Asia Pacific CIF Market intelligence, Key account management Service Delivery Commod
Slide 8: Growth initiatives
Growth initiatives Building Opex Adjacent Agri-Food & Infrastructure Oil&Gas/Power/Chemicals Retail/Mining Acquisitions in China, Packaged offers, New services expansion in Latin Group key accounts key wins Key wins America Automotive Smartworld Certification Marine Global contracts & Offshore Tire
Slide 9: Opex in specific segments
Opex in specific segments Oil & Gas / Power / Chemicals 2015 developments Key wins • Asset integrity management offers: ConocoPhillips Inspection, technical centers, Indonesia non destructive testing EDF • South East Asia / Middle East / Europe France • Oil&Gas / Power OMV Austria Saudi Aramco Saudi
Slide 10: Agri-Food
Agri-Food 2015 developments Key wins • Organization, network expansion Givaudan • Leveraged key expertise: Ethical Audit programmes & Certification services Sustainable fishing Certification - top10 global food corp. Peruvian Ministry of Production Surveillance and control of fishing and Agric
Slide 11: Account management
Account management 2015 developments Key wins • 170 Key Accounts selected within the growth initiatives Leader in the food and dairy industry 20 Global Key Accounts Master agreement for all TIC services 20 Global Prospects 130 Local Key Accounts Airbus Energy efficiency audits • Investment on
Slide 12: Excellence@BV
Excellence@BV Lean action plan by 2020 Consumer products margin example Process ~35% Reengineering +90 bp 24.6% ~20% Dematerialization 24.0% (30) bp ~3/4 Lean ~20% Data management ~1/4 Purchasing ~15% Scheduling 5% Autonotification 2014 Excellence Rest of 2015 @BV business 5% Route Management Saving
Slide 13: Digital value creation
Digital value creation Operational plan Marine innovative approach Digital central team & Connected network community Assets Surveyors Digital factory & Partnerships 3D model of ship/offshore units BV data potential Design and operations data Strategic Partnership New digital models 13 February 25,
Slide 14: Outlook
Outlook February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 15: Outlook 2016
Outlook 2016 The global macroeconomic environment is likely to remain highly volatile in 2016, with persistent weakness in Oil & Gas and Minerals. Thanks to the diversified and balanced portfolio, the Group expects: ● Organic revenue growth ranging from 1 to 3% - Progressive improvement in H2 ● Acqu
Slide 16: Financial review
Financial review February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 17: Key financial metrics
Key financial metrics (in € millions) FY 2015 FY 2014 VLY Revenue 4,634.8 4,171.5 +11.1% Adjusted operating profit 775.2 694.0 +11.7% Adjusted operating margin 16.7% 16.6% +10 bp Operating profit 576.9 563.1 +2.5% Adjusted net profit 420.3 391.3 +7.4% Net profit 255.3 294.6 (13.3)% Adjusted EPS 0.96
Slide 18: 2015 revenue growth
2015 revenue growth (in € millions) +11.1% +5.5% 4,634.8 +3.7% +1.9% 4,171.5 FY 2014 Organic Acquisitions Currencies FY 2015 18 February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 19: 2015 Revenue growth by business
2015 Revenue growth by business % @ constant revenue currencies 9% Marine & Offshore 10.2% 9.8% +20.0% 12% Construction 1.3% 15.3% +16.6% 17% Commodities 3.3% 2% +5.3% 8% Certification 4.6% +4.6% 13% IVS 2.8% 0.8% +3.6% 14% Consumer Products 1.4% 1% +2.4% 22% Industry (1.6)% 2.2% +0.6% 5% GSIT (1.9)
Slide 20: Growth by geography
Growth by geography Revenue growth Headcount €4.6 bn 66,000 @Constant Organic Var. vs LY currencies 22 32 Europe +5.3% +6.0% +1.9% 14 Middle East, Africa, 12 +5.5% +6.8% (1.4)% Eastern Europe 37 Asia Pacific +0.5% +6.3% +6.4% 29 Americas (2.1)% +4.1% (10.6)% 27 27 Total +1.9% +5.6% (0.8)% % revenue
Slide 21: Adjusted operating margin
Adjusted operating margin Drivers Volume/ Excellence 2015 margin VLY FX O&G mix @BV Marine & Offshore 26.4% +140 + ++ + Construction 15.5% +70 + - + + Consumer Products 24.6% +60 + - ++ GSIT 16.6% +20 + - + Industry 14.2% (90) + --- + Commodities 11.3% (70) - - + IVS 13.8% (30) -- + Certification 17
Slide 22: Other operating expenses
Other operating expenses (in € millions) FY 2015 FY 2014 VLY Adjusted operating profit 775.2 694.0 +81.2 Amortization of intangibles (86.7) (106.2) +19.5 Restructuring (20.8) (20.0) (0.8) Acquisitions and disposals (0.8) (3.2) +2.4 Goodwill impairment (90.0) (1.5) (88.5) Operating profit 576.9 563.1
Slide 23: Net financial expense
Net financial expense (in € millions) FY 2015 FY 2014 VLY Net finance cost (80.0) (78.1) (1.9) Foreign exchange gain/loss (3.6) +3.3 (6.9) Interest charge on pension plans (2.8) (3.5) +0.7 Other financial expenses (2.9) (2.6) (0.3) Net financial expense (89.3) (80.9) (8.4) Increase in net financial
Slide 24: Effective tax rate (ETR)
Effective tax rate (ETR) ETR Adjusted ETR 2014 34.1% Variation in basis points (bps): Translation of currencies (110) Non deductibility of goodwill impairment Tax on dividends +90 Exceptional items Exceptional items +310 Adjusted ETR 2015 37.0% Non deductibility of goodwill impairment +560 Lower rat
Slide 25: Strong cash flow model
Strong cash flow model Operating cash flow (% of revenue) 15.2% Operating cash flow (€m) 14.5% 706 13.4% 607 78 505 528 61 166 43 63 144 2013 2014 2015 402 42 135 141 113 462 Net capex (% of revenue) 402 327 324 247 3.6% 3.6% 3.4% 2011 2012 2013 2014 2015 Free cash flow Net CAPEX Cash Interest 2013
Slide 26: Financial structure
Financial structure Adjusted net debt Leverage ratio 1,880 2.16 2.02 34 55 1,863 238 1.71 118 462 Dec-13 Dec-14 Dec-15 Leverage ratio = Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amortization and provisions) adjusted for all units acquired over the past 12 mon
Slide 27: Financial position
Financial position Working capital (% of revenue) Dec. 2015 Dec. 2014 VLY 10.2% 8.9% Goodwill 1,800.4 1,814.2 (13.8) 8.5% Net fixed assets 1,127.3 1,126.2 +1.1 Working capital (WC) 411.4 425.9 (14.5) 2013 2014 2015 Capital employed 3,339.1 3,366.3 (27.2) ROCE Equity 1,124.9 1,140.7 (15.8) 15.9% 12.4
Slide 28: Key takeaways
Key takeaways Revenue growth of 11.1% Adjusted operating margin at 16.7% Proactively adapting to slowing O&G and M&M activities Record cash flow generation Strong financial position Dividend up 6.3% at €0.51, 53% of adjusted EPS to be proposed at the AGM of May 17, 2016 28 February 25, 2
Slide 29: Business review
Business review February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 30: Marine & Offshore
Marine & Offshore Strong year driven by both in-service and new construction Key financials 2015 Highlights ● In-Service (60% of revenue) 405.3 - Fleet up 5% in GT / Special surveys 323.7 +25.2% +10.2% Revenue (€ m) organic ● New construction (40%) - Strong year for containerships, tankers - Moderat
Slide 31: Commodities
Commodities Strong growth in trade, offsetting upstream reduction Key financials 2015 Highlights ● Trade volume growth for O&P, M&M Trade 772.8 ● O&P reduction in oil sands in Canada 696.6 +10.9% Revenue +3.3% ● M&M upstream reduction in H2 (€ m) organic growth ● Agriculture: Europe strong growth 20
Slide 32: Industry
Industry O&G impact, growth in Power and Europe Key financials 2015 Highlights ● Oil & Gas approx.45% of the business 980.7 1 030.8 - Americas, Australia: double-digit decline Revenue +5.1% (1.6)% (€ m) organic ● Power: double-digit growth growth - Europe, Asia - OPEX 2014 2015 ● Margin: adapting co
Slide 33: In-Service Inspection & Verification
In-Service Inspection & Verification Robust growth in major geographies, O&G impact in Canada Key financials 2015 Highlights ● Robust growth in Europe 560.2 599.0 - Growth in France Revenue +6.9% +2.8% - UK new contracts ramp-up, Spain turnaround (€ m) organic growth ● Canada improvement at year end
Slide 34: Construction
Construction Geographical diversification Key financials 2015 Highlights 557.5 ● France growth driven by asset management 462.1 ● Japan recovery Revenue +20.6% +1.3% (€ m) organic ● Middle-East infrastructure: new contract ramp up growth ● Slowdown in Brazil in Q4 ● China platorm build up through ac
Slide 35: Certification
Certification Strong growth and commercial successes Key financials 2015 Highlights ● Good growth in all major regions 328.2 351.8 +4.6% ● Renewed ISO schemes : transition packages Revenue +7.2% (€ m) organic ● Sector schemes strong performance growth (automotive, transportation, aeronautics) ● Comm
Slide 36: Consumer Products
Consumer Products Two key accounts impacting growth, lean delivering Key financials 2015 Highlights 658.1 ● >4% organic growth excluding two key accounts 564.6 - product launch delays (E&E) Revenue +16.6% +1.4% - program reduction (Textiles, hardlines) (€ m) organic ● Price pressure and Chinese expo
Slide 37: Government Services & International Trade
Government Services & International Trade Lower volumes in Iraq, new contracts in ramp up phase Key financials 2015 Highlights ● VOC Iraq slowdown 255.4 259.5 (1.9)% ● Q4: end of Ghana PSI Revenue +1.6% (€ m) organic ● Auto growth despite Brazil growth ● Success of single windows : Benin, DRC, Laos
Slide 38: Conclusion
Conclusion February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 39: Roadmap for 2016
Roadmap for 2016 Capture Extend opportunities the market Capitalizing on the Company’ strong assets Transforming the Company Agility New matrix organization alignement Robust financials Strategic plan execution Diversified portfolio Integrated key account Active acquisition strategy new intensive ap
Slide 40: Appendix
Appendix February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 41: Geographical footprint
Geographical footprint 32% Europe 14,700 % of 2015 Group revenue 380 66,000 employees 29% 1,400 offices & labs Asia Pacific 24,500 400 27% 12% Americas Middle East Africa, Eastern Europe 17,900 8,900 330 290 41 February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 42: Portfolio of businesses
Portfolio of businesses Revenue Adjusted operating profit GSIT GSIT 5% 5% 14% 9% Marine Marine 21% 14% Industry Industry 17% IVS IVS 22% 11% Construction 19% Construction 8% Certification 8% Certification 12% 13% Commodities 11% 11% Commodities Consumer Products Consumer Products 42 February 25, 201
Slide 43: Revenue by business
Revenue by business Q4 2015 FY 2015 €m Organic Scope FX €m Organic Scope FX Marine & Offshore 101.5 9.4% 0.7% 2.7% 405.3 10.2% 9.8% 5.2% Industry 244.9 (7.6)% 1.2% (0.9)% 1,030.8 (1.6)% 2.2% 4.5% IVS 165.5 4.4% - 1.6% 599.0 2.8% 0.8% 3.3% Construction 141.7 0.5% 8.6% 0.2% 557.5 1.3% 15.3% 4.0% Certi
Slide 44: Adjusted operating profit by business
Adjusted operating profit by business Adjusted operating profit (€m) Adjusted operating margin (%) FY 2015 FY 2014 Var. (%) FY 2015 FY 2014 Var. (bp) Marine & Offshore 107.0 81.0 32.1% 26.4% 25.0% +140 Industry 146.5 147.9 (0.9)% 14.2% 15.1% (90) IVS 82.8 79.1 4.7% 13.8% 14.1% (30) Construction 86.4
Slide 45: Half-year adjusted operating margin
Half-year adjusted operating margin H1 2015 H2 2015 H1 2014 H2 2014 Marine & Offshore 27.1% 25.8% 26.7% 23.5% Industry 14.0% 14.5% 14.9% 15.2% IVS 10.8% 16.6% 11.4% 16.6% Construction 14.1% 16.8% 13.0% 16.4% Certification 16.8% 17.4% 16.6% 17.8% Commodities 11.5% 11.1% 11.0% 12.9% Consumer Products
Slide 46: Consolidated income statement
Consolidated income statement FY 2015 FY 2014 Revenue 4,634.8 4,171.5 Purchase and external charges (1,322.9) (1,178.6) Personnel costs (2,383.9) (2,149.9) Taxes other than on income (51.3) (56.4) Net (additions to)/reversals of provisions (25.5) (11.4) Depreciation and amortization (205.1) (215.2)
Slide 47: Adjusted net profit
Adjusted net profit FY 2015 FY 2014 Attributable net profit 255.3 294.6 Other operating expenses 198.3 130.9 Tax effect on other operating expenses (33.3) (34.2) Attributable adjusted net profit 420.3 391.3 Effective tax rate (ETR) 45.2% 36.3% Adjusted ETR 37.0% 34.1% 47 February 25, 2016 / FY 2015
Slide 48: Consolidated comprehensive income
Consolidated comprehensive income FY 2015 FY 2014 Net profit 267.7 307.5 Currency translation differences (16.9) 102.2 Cash-flow hedges 0.2 (9.9) Income tax on items reclassified to profit or loss (0.1) (1.9) Total of other comprehensive income reclassified to profit or loss (16.8) 90.4 Actuarial ga
Slide 49: Consolidated financial position
Consolidated financial position Dec. 2015 Dec. 2014 Goodwill 1,800.4 1,814.2 Intangible assets 629.4 650.6 Property, plant and equipment 497.9 475.6 Other non-current assets 218.6 188.0 Total non-current assets 3,146.3 3,128.4 Trade and other receivables 1,374.2 1,325.0 Other current assets 107.2 10
Slide 50: Statement of change in equity
Statement of change in equity Attributable to Currency Share Share Other Total Shareholders translation Minority capital premium reserves equity of the reserves interests Company December 31, 2014 53.1 73.0 (53.4) 1,068.0 1,140.7 1,108.0 32.7 Capital increase 0.1 - - - 0.1 0.1 - Capital reduction (0
Slide 51: Cash flow statement
Cash flow statement FY 2015 FY 2014 Profit before income tax 488.4 482.9 Elimination of cash flows from financing and investing activities 60.6 83.0 Provisions and other non-cash items 46.9 69.9 Depreciation, amortization and impairment 293.3 216.7 Movements in working capital attributable to operat
Slide 52: Adjusted net financial debt
Adjusted net financial debt Dec. 2015 Dec. 2014 Non-current borrowings and debt 2,311.0 1,944.8 Current borrowings and debt 66.8 144.1 Bank overdrafts 12.1 9.8 Gross financial debt 2,389.9 2,098.7 Total cash and cash equivalents 522.9 220.1 Net financial debt 1,867.0 1,878.6 Impact of currency hedgi
Slide 53: Earnings per share
Earnings per share FY 2015 FY 2014 Basic EPS 0.58 0.67 Basic adjusted EPS 0.96 0.90 Weighted average number of shares 437,776,451 437,183,943 Diluted EPS 0.58 0.66 Diluted adjusted EPS 0.95 0.88 Weighted average number of shares for diluted earnings 443,217,857 443,796,626 53 February 25, 2016 / FY
Slide 54: Ownership at December 31, 2015
Ownership at December 31, 2015 1.0% Treasury shares 40.1% Wendel 56.9% Managers and employees 2.0% Free float 54 February 25, 2016 / FY 2015 results / © Copyright Bureau Veritas
Slide 55: Revenue by main currency
Revenue by main currency 2015 revenue by functional currency 2015 vs 2014 @average rates Other 15% USD 19.7% Euro 28% CNY 17.4% COP 2% CAD 3.4% INR 2% KRW 2% GBP 11.1% SGD 2% BRL (15.7)% JPY 2% (0.4)% AUD ARS 2% CLP 4.2% CLP 3% 4.9% ARS AUD 4% JPY 4.5% SGD 10.3% BRL 4% KRW 11.3% INR 13.8% GBP 4% USD
Slide 56: Three absolutes @Bureau Veritas
Three absolutes @Bureau Veritas Financial Safety KPIs Ethics Safety control Total accident rate 0.85 0.75 Significant reduction in accident rates 0.64 through key actions • Strengthened training & awareness • Reinforced management accountability 2013 2014 2015 Fatalities 4 3 1 56 February 25, 2016 /
Slide 57: 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