Bureau Veritas Sa · EURONEXT:BVI
Bureau Veritas Sa — H1 2014 Earnings Presentation
49 slides from Bureau Veritas Sa's earnings presentation, Aug 27, 2014
Slide 1: 2014 Half Year Results
2014 HALF YEAR RESULTS August 27, 2014
Slide 2: Disclaimer
2014 HALF 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 Q&A APPENDICES August 27, 2014
Slide 4: Highlights
2014 HALF YEAR RESULTS HIGHLIGHTS Didier Michaud-Daniel Chief Executive Officer April 29, 2014
Slide 5: H1 2014 Key highlights
KEY H1 2014 Key highlights HIGHLIGHTS EUR H1 2014 VLY VLY @ CC Revenue 1,967.4m +0.5% +7.0% Adjusted operating margin 15.8% (20) bps +10 bps Adjusted net profit 177.5 (7.8)% +3.7% Organic growth of 1.8%.... Europe, France, Metals & Minerals Strong contribution from acquisitions of 5.2%....Americas,
Slide 6: Portfolio of businesses
KEY Portfolio of businesses HIGHLIGHTS Revenue Adjusted operating profit 13% 6% 19% 6% Consumer Products GSIT 8% Consumer Products GSIT 13% Marine Marine 17% 12% Commodities Commodities 23% 22% Industry Industry 8% 9% Certification Certification 11% 14% 9% 10% Construction IVS Construction IVS IVS:
Slide 7: Geographical presence
KEY Geographical presence HIGHLIGHTS Americas Middle East Africa Eastern Europe % of revenue 26% % of revenue 12% Organic Organic +2.9% (2.9)% Growth* Growth* Headcount 19,600 Headcount 8,800 Europe Asia Pacific % of revenue 34% % of revenue 28% Organic Organic (1.3)% +6.8% Growth* Growth* Headcount
Slide 8: Maxxam
2014 HALF YEAR RESULTS Maxxam KEY HIGHLIGHTS HIGHLIGHTS Canada’s market leader in analytical services: environmental, petroleum and food safety and DNA/forensics Founded 40 years ago, headquartered in Toronto Best in class laboratory operations 22 labs in Canada, 2,400 employees 2013 Revenue: C
Slide 9: DTI
2014 HALF YEAR RESULTS DTI KEY HIGHLIGHTS HIGHLIGHTS US leader in inspection of offshore subsea/completion systems Founded 1989, headquartered in Houston, Texas 85 + people 2013 Revenue: USD 20.3m (EUR 15m) Strong position in the Gulf of Mexico (deep water) RATIONALE Strengthening the Group’s
Slide 10: Sistema PRI
2014 HALF YEAR RESULTS Sistema PRI KEY HIGHLIGHTS HIGHLIGHTS Founded 1982, Headquartered in São Paulo, Brazil 800 people 2013 Revenue: BRL 117m (EUR 40m) Project Management Assistance Transportation, building and energy sectors One IT tool for all kind of construction RATIONALE Booming Constr
Slide 11: Analysts Inc.
2014 HALF YEAR RESULTS Analysts Inc. KEY HIGHLIGHTS HIGHLIGHTS US specialist in lubricant oil analysis for vendors/users Founded 1960, headquartered in Los Angeles, California 190 people, 4 labs in the US + joint ventures in Mexico and Japan 2013 Revenue: USD 15m (EUR 11m) Power generation, mar
Slide 12: Financial Review
2014 HALF YEAR RESULTS FINANCIAL REVIEW Sami Badarani Chief Financial Officer April 29,27, August 2014 2014
Slide 13: Summary income statement
FINANCIAL Summary income statement REVIEW (EUR millions) H1 2014 H1 2013 VLY VLY @ CC Revenue 1,967.4 1,957.5 +0.5% +7.0% Adjusted operating profit 310.0 313.2 (1.0)% +8.0% Adjusted operating margin 15.8% 16.0% (20) bps +10 bps Other operating expenses (31.5) (30.1) Operating profit 278.5 283.1 (1.6
Slide 14: Revenue +0.5%
FINANCIAL Revenue +0.5% REVIEW (EUR millions) +7.0% +5.2% 1,957.5 +1.8% 1,967.4 (6.5)% H1 2013 Organic Scope Currencies H1 2014 Q2 2014 +0.9% +6.2% (6.0)% © Copyright Bureau Veritas / August 27, 2014 P 14
Slide 15: Q2 Organic revenue growth by business
FINANCIAL Q2 Organic revenue growth by business REVIEW Q2 2014 Marine 6.1% Consumer Products 4.9% Key drivers of Q2 « low » growth Industry 3.4% Europe IVS 1.6% M&M seasonality Construction 0.6% US client retailers Certification (0.2)% Commodities (3.1)% GSIT (8.7)% Total Group 0.9% © Copyrigh
Slide 16: 7 Acquisitions – EUR 290m revenue
#7 Acquisitions – EUR 290m revenue FINANCIAL REVIEW Date Description Footprint Maxxam Jan. Canadian leader in analytical testing (petroleum, Canada environment, food and DNA) Jyutaku Apr. Building conformity assessment Japan Quiktrak Apr. Vehicle/agricultural machinery stock audits USA Andes Apr. Ag
Slide 17: Adjusted operating profit
FINANCIAL Adjusted operating profit REVIEW (EUR millions) H1 2014 H1 2013 VLY VLY @ CC Operating profit 278.5 283.1 (1.6)% +7.6% Amortization of acquisition intangibles 30.2 26.4 Goodwill impairment 1.5 - Restructuring & disposals (0.3) 3.8 Acquisition related costs 0.1 (0.1) Total other operating e
Slide 18: Adjusted operating margin
FINANCIAL Adjusted operating margin REVIEW (EUR millions) H1 2014 VLY @ Margin % Driver EURm CC (bps) Marine 40.2 26.7% +50 Volume Consumer Products 59.9 22.9% +40 Lean, Mix Industry 67.9 14.8% +50 Mix Construction 27.8 13.0% +140 Lean, Mix IVS 30.3 11.4% +140 Lean Commodities 36.9 11.2% (20) Certif
Slide 19: Net financial expense
FINANCIAL Net financial expense REVIEW (EUR millions) H1 2014 H1 2013 VLY Net finance cost (37.6) (30.1) (7.5) Foreign exchange gain / (loss) (0.2) (1.2) +1.0 Interest cost on pension plans (1.6) (1.6) - Other financial expenses (1.1) (0.8) (0.3) Net financial expense (40.5) (33.7) (6.8) © Copyright
Slide 20: Summary cash flow statement
FINANCIAL Summary cash flow statement REVIEW (EUR millions) H1 2014 H1 2013 VLY Profit before income tax 238.0 249.3 (11.3) Elimination of financing and investing activities 37.7 31.4 Provisions and other non-cash items 11.3 2.4 Depreciation, amortization and impairment 86.2 73.8 Movements in workin
Slide 21: Adjusted net financial debt
FINANCIAL Adjusted net financial debt REVIEW (EUR millions) 213.6 23.1 11.7 1,985.5 479.9 1,328.4 71.2 Dec. 2013 Free cash-flow Acquisitions Dividends Stock options/ Other Jun. 2014 Share buybacks Adjusted net financial debt as defined for the Group’s covenants calculation © Copyright Bureau Veritas
Slide 22: Leverage ratio
FINANCIAL Leverage ratio REVIEW 2.51 1.89 1.78 1.83 2.48 1.6 1.59 1.71 1.38 Jun-08 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Jun-13 Dec-13 Jun-14 Leverage ratio = Adjusted net financial debt / EBITDA (earnings before interest, tax, depreciation, amortization and provisions) adjusted for all units acquired
Slide 23: Summary financial position
FINANCIAL Summary financial position REVIEW (EUR millions) June 2014 June 2013 Goodwill 1,663.1 1,457.6 Net fixed assets 1,051.0 752.4 WC as a % of LTM revenue Working capital (WC) 453.8 361.3 June 2013 9.0% Capital employed 3,167.9 2,571.3 Acquisitions +0.7% FX +0.2% Equity 937.5 992.1 Unfavorable
Slide 24: Business Review
2014 HALF YEAR RESULTS BUSINESS REVIEW Didier Michaud-Daniel Chief Executive Officer April 29,27, August 2014 2014
Slide 25: Marine
2014 HALF YEAR RESULTS Marine BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS In-Service (57% of revenues) 145.3 150.3 - Fleet up 4.5% in GRT - Market share gains Revenue 7.8% New construction (43% of revenues) 2012 2013 (EUR m) H1 13 H1 14 Organic - Order book: +3.8m GRT growth - Surge in equ
Slide 26: Industry
2014 HALF YEAR RESULTS Industry BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS 4 countries at -19% organic growth 465.6 458.8 France, Colombia, South Africa, Kazakhstan Other countries growing +11% Revenue 3.6% USA, Middle East, Asia 2012 2013 (EUR m) H1 13 H1 14 Organic Key Oil&Gas contrac
Slide 27: In-Service Inspection & Verification
2014 HALF YEAR RESULTS In-Service Inspection & Verification BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS Increased weakness in Europe 265.6 226.5 Slight recovery in the US post harsh winter conditions Revenue +3.5% Strong growth in the Middle East, Latin 2012 2013 (EUR m) H1 13 H1 14 Orga
Slide 28: Construction
2014 HALF YEAR RESULTS Construction BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS France not recovering 213.3 213.6 Strong growth in China, the Middle East Scope +1.5%: acquisitions in Asia Revenue +1.7% (EUR m) 2012 2013 Organic Margin improvement: lean management H1 13 H1 14 growth in
Slide 29: Certification
2014 HALF YEAR RESULTS Certification BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS End of Kyoto Protocol Program 170.2 160.4 Stable QHSE conventional schemes (1.0)% Growth in Supply Chain services Revenue 2012 2013 Automotive, Aerospace (EUR m) H1 13 H1 14 Organic growth Growth in Second
Slide 30: Commodities
2014 HALF YEAR RESULTS Commodities BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS Sustained O&P growth in Asia 340.8 330.7 Lower seasonal recovery in M&M Coal: Australia slowdown, Revenue (1.3)% South Africa strikes 2012 2013 (EUR m) H1 13 H1 14 Organic Agri: North America expansion, grow
Slide 31: Consumer Products
2014 HALF YEAR RESULTS Consumer Products BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS Mobile/Wireless strong growth 249.2 261.9 Softness in US retail market and toys Strong growth in retail business in Europe Revenue +5.4% (EUR m) 2012 2013 Organic Good momentum for inspection H1 13 H1
Slide 32: Government Services & International Trade
2014 HALF YEAR RESULTS Government Services & International Trade BUSINESS REVIEW KEY FINANCIALS H1 2014 HIGHLIGHTS Unfavorable comparable basis: 146.6 126.2 Angola, Ivory Coast government contracts Single Window development Revenue (8.4)% Automotive diversification: Quiktrak 2012 2013 (EUR m)
Slide 33: Outlook
2014 HALF YEAR RESULTS OUTLOOK Didier Michaud-Daniel Chief Executive Officer April 29,27, August 2014 2014
Slide 34: 2014 Outlook
2014 HALF YEAR RESULTS 2014 Outlook OUTLOOK The Group expects organic growth improvement in H2 2014, from favorable comparables, start of new contracts, catch up of delayed contracts and despite continuous softness in Europe and pending Metals & Minerals recovery. 2014 revenue growth at constant cur
Slide 35: Update on 2012-2015 Financial objectives
2014 HALF YEAR RESULTS Update on 2012-2015 Financial objectives OUTLOOK The Group confirms the objective to achieve revenue growth above 9% per year on average, at constant exchange rates, but with a different mix than the one initially contemplated: - Due to weakness in Metals & Minerals and Euro
Slide 36: Q&A
2014 HALF YEAR RESULTS Q&A April 29,27, August 2014 2014
Slide 37: Appendices
2014 HALF YEAR RESULTS APPENDICES April 29,27, August 2014 2014
Slide 38: Revenue by business
Revenue by business APPENDICES Q2 2014 H1 2014 EURm Organic Scope FX EURm Organic Scope FX Marine 77.9 +6.1% - (4.0)% 150.3 +7.8% - (4.4)% Industry 239.6 +3.4% +4.6% (9.2)% 458.8 +3.6% +5.0% (10.1)% IVS 136.0 +1.6% 20.8% (1.7)% 265.5 +3.5% 15.4% (1.7)% Construction 108.3 +0.6% 2.6% (3.0)% 213.6 +1.7
Slide 39: Adjusted operating profit by business
Adjusted operating profit by business APPENDICES (EUR millions) Adjusted operating profit Adjusted operating margin H1 2014 H1 2013 Var. H1 2014 H1 2013 Var. Marine 40.2 39.5 +1.8% 26.7% 27.2% (50) bps Industry 67.9 67.9 - 14.8% 14.6% +20 bps IVS 30.3 23.6 +28.4% 11.4% 10.4% +100 bps Construction 27
Slide 40: Adjusted net profit
Adjusted net profit APPENDICES (EUR millions) H1 2014 H1 2013 VLY Profit before income tax 238.0 249.3 (4.5)% Income tax expense (77.1) (73.0) Non controlling interests (6.9) (6.1) Attributable net profit 154.0 170.2 (9.5)% Other operating expenses 31.5 30.1 Tax effect on other operating expenses (8
Slide 41: Adjusted net financial debt
Adjusted net financial debt APPENDICES (EUR millions) June 2014 Dec. 2013 Bank borrowings (non-current) 1 933.3 1,407.1 Bank borrowings (current) 191.5 71.3 Bank overdrafts 31.3 32.9 Gross financial debt 2,156.1 1,511.3 Total cash and cash equivalents 176.8 190.6 Net financial debt 1,979.3 1,320.7 I
Slide 42: Earnings per share
Earnings per share APPENDICES (EUR per share) H1 2014 H1 2013 VLY @ CC Basic EPS 0.35 0.39 +2.6% Basic adjusted EPS 0.41 0.44 +4.5% Weighted average number of shares 437,061,389 438,925,614 Diluted EPS 0.35 0.38 +2.6% Diluted adjusted EPS 0.40 0.43 +4.7% Weighted average number of shares for diluted
Slide 43: Currency exposure
Currency exposure APPENDICES As of June 30, 2014 Revenue currency split Translation impact - Key currencies EUR 31% Other 1% Euro Revenue Operating Profit 33% Change vs. Impact Impact USD 0.12% 0.12% CNY 0.07% 0.14% BRL AUD 0.05% 0.01% 3% USD JPY 12% HKD 0.04% 0.06% 2% CNY HKD BRA 0.03% 0.03% 7% AUD
Slide 44: Consolidated income statement
Consolidated income statement APPENDICES (EUR millions) H1 2014 H1 2013 Revenue 1,967.4 1,957.5 Purchase and external charges (553.1) (560.4) Personnel costs (1,030.4) (1,018.0) Taxes other than on income (27.4) (25.3) Net (additions to)/reversals of provisions 0.3 (5.5) Depreciation and amortizatio
Slide 45: Consolidated comprehensive income
Consolidated comprehensive income APPENDICES (EUR millions) H1 2014 H1 2013 Net profit 160.9 176.3 Currency translation differences 21.4 (98.9) Cash-flow hedges 2.4 (2.5) Income tax on items reclassified to profit or loss (0.9) 0.9 Total of other comprehensive income reclassified to profit or loss 2
Slide 46: Consolidated financial position
Consolidated financial position APPENDICES (EUR millions) Jun. 2014 Dec. 2013 Goodwill 1,663.1 1,412.1 Intangible assets 607.1 374.5 Property, plant and equipment 443.9 401.3 Other non-current assets 185.0 168.5 Total non-current assets 2,899.1 2,356.4 Trade and other receivables 1,261.3 1,122.5 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, 2013 53.0 64.5 (155.6) 1,020.2 982.1 956.1 26.0 Exercise of stock options 0.1 2.2
Slide 48: Cash flow statement
Cash flow statement APPENDICES (EUR millions) H1 2014 H1 2013 Profit before income tax 238.0 249.3 Elimination of cash flows from financing and investing activities 37.7 31.4 Provisions and other non-cash items 11.3 2.4 Depreciation, amortization and impairment 86.2 73.8 Movements in working capital
Slide 49: Ownership at June 30, 2014
Ownership at June 30, 2014 APPENDICES Treasury shares 1.3% Wendel 50.9% Free Float 45.8% Employees & Management 2.0% © Copyright Bureau Veritas / August 27, 2014 P 49