Bureau Veritas Sa · EURONEXT:BVI

Bureau Veritas Sa — Debt Investor Presentation (August 2016)

44 slides from Bureau Veritas Sa's debt investor presentation, Aug 30, 2016

  1. Slide 1: Credit Investor Presentation: New Bond Issuance

    CREDIT INVESTOR PRESENTATION 30 AUGUST 2016 BUREAU VERITAS NEW BOND ISSUANCE © Copyright Bureau Veritas

  2. Slide 2: Agenda

    Agenda BV at a glance TIC market BV 2020 strategy Financial results / Key credit highlights Conclusion Appendix July 28, 2016 / H1 2016 results / © Copyright Bureau Veritas

  3. Slide 3: BV at a glance

    BV at a glance August 2016 / Credit Presentation / © Copyright Bureau Veritas

  4. Slide 4: BV: A global leader in Testing, Inspection and Certification

    BV : A global leader in Testing, Inspection and Certification Revenue GSIT 5% 14% 9% Marine Global leader Industry 18% 20% IVS • 8 global businesses Construction • 67,400 employees* 8% 13% Certification • 1,400 offices and laboratories 13% Commodities Adjusted operating profit 2015 key figures 4% •

  5. Slide 5: Geographical footprint

    Geographical footprint 34% % of H1 2016 Group revenue Europe 15,000 380 67,400 employees * 30% 1,400 offices & labs Asia Pacific 25,800 400 24% 12% Americas Middle East Africa, Eastern Europe 17,700 8,900 330 290 *As of June 30th, 2016 5 August, 2016 / Credit Presentation / © Copyright Bureau Verita

  6. Slide 6: Listing and ownership

    Listing and ownership Key market data 1,2% Treasury shares • Listed on Euronext-Paris Wendel ** 40,1% • Ticker BVI 56,8% Managers and • IPO on October 2007: EUR 9.44/share employees Free float • Share Price*: EUR 19,27 1,9% • Market Cap.*: EUR 8.5bn • Indices: CAC Next 20, SBF 120, DJ STOXX ** Repre

  7. Slide 7: TIC Market

    TIC Market August 2016 / Credit Presentation / © Copyright Bureau Veritas

  8. Slide 8: TIC market: a €200bn opportunity

    TIC market: a €200bn opportunity TIC market Mega-trends boosting growth prospects > €200bn ► Rise of the middle class in emerging countries and rise in demand for safety, as Government/ well as infrastructure investments insourced ► Use of complex technologies, shorter product lifecycles, complexity

  9. Slide 9: TIC markets: spanning across many sectors

    TIC markets: spanning across many sectors 2015 TIC market (€bn) > €200bn 23 23 20 19 19 17 16 14 13 11 6 6 5 4 4 Consumer Agri-Food Oil & GAs ConstructionChemicals Metals & Manuf. Transport Auto Power & Governments Marine Health Banking Other goods Minerals Utilities Source : IHS & Bureau Veritas es

  10. Slide 10: Competitive environment

    Competitive environment Key industry players (sorted by revenue, €m) 6 000 4 000 2 000 0 Source : Bureau Veritas estimates, companies, as of Dec 31st, 2015 10 August 2016 / Credit Presentation / © Copyright Bureau Veritas

  11. Slide 11: An industry-leading sector coverage

    An industry-leading sector coverage SGS BV Intertek Dekra DNV GL TUV Sud Eurofins TUV Rheinland Applus Exova ALS Source : Bureau Veritas estimates 11 August 2016 / Credit Presentation / © Copyright Bureau Veritas

  12. Slide 12: BV 2020 strategy

    BV 2020 strategy August 2016 / Credit Presentation / © Copyright Bureau Veritas

  13. Slide 13: Recap of BV 2020 ambition / Growth initiatives

    Recap of BV 2020 ambition / 8 Growth initiatives* Revenues Organic growth targeted at 5-7% by 2020 target by 2020 Building EUR Opex EUR Adjacent EUR Agri-Food EUR 540m 500m 400m 180m & Infrastructure O&G/Power/Chem. Retail/Mining Acquisitions in China (Chongqing), the UK Packaged offers New services

  14. Slide 14: Update on the progress of the Growth Initiatives

    Update on the progress of the 8 Growth Initiatives « 8 Growth Added 2.2pts to Group organic growth (EUR51m) in H1 2016 Initiatives » 8 Initiatives 2 Countries Certification Adj. segments (O&G, P&U, Chemicals) Smartworld Automotive Agri-Food Offshore Large accounts Marine& (Retail, Mining) China OPEX

  15. Slide 15: H1 2016: acquisitions to support growth initiatives

    H1 2016: 6 acquisitions to support growth initiatives Building Opex & Infrastructure O&G/Power/Chem. Agri-Food 5 initiatives covered, €105m • Chongqing + HCD • Summit • DTS of annualized revenue Automotive Marine Date Footprint 2015 Revenue & Offshore HCD February UK €10m • VEO • TMC Chongqing Lians

  16. Slide 16: Financial results & Key credit highlights

    Financial results & Key credit highlights August 2016 / Credit Presentation / © Copyright Bureau Veritas

  17. Slide 17: H1 2016 Key financial metrics

    H1 2016 Key financial metrics H1 2016 Highlights Constant (in € millions) H1 2016 FY 2015 FY 2014 currency • Moderate revenue Revenue 2, 221.4 +0.7% 4,634.8 4,171.5 growth at constant cur. (+0.7%) Adjusted operating profit 350.5 +0.5% 775.2 694.0 • Resilient margin Adjusted operating margin 15.8% ~0

  18. Slide 18: Outlook 2016

    Outlook 2016* As expected, after a slow start in H1 16, the Group still anticipates a progressive acceleration of organic growth in H2 leading to the low end of the 1 to 3% guidance for the FY16 The Group confirms high adjusted operating margin holding at the 16.5%-17.0% range The Group still expect

  19. Slide 19: Two growth engines organic and acquisitions

    Two growth engines organic and acquisitions 5 Revenue Growth Mid/long term drivers Revenue (€ billions) 4,6 Organic growth 4,5 • Initiative driven 4,2 • Resilience 3,9 • Portfolio diversification 4 3,9 Acquisitions 3,4 3,5 ~ 9,7% compound annual • New services and expertise growth rate of revenue •

  20. Slide 20: Continuous profitability improvement

    Continuous profitability improvement Profitability Mid/long term drivers (1) AOP (€m) Margin • Excellence@BV - Lean 16.7% 16.7% 16.6% 16,7% - Procurement, Shared Services 16.4% 16.4% 16.2% • Mix management • Scalability 15.2% 15.1% 14.5% 775 • Price pressure in downturn for 639 657 694 cyclical acti

  21. Slide 21: Strong FCF generation

    Strong FCF generation Operating cash flow (€m) Short - term drivers Free cash flow (1) • Operating profit evolution Net CAPEX 706 • Change in working capital Cash Interest 607 78 528 61 505 166 Mid/long term drivers 43 63 144 402 42 135 141 • High conversion ratio 113 • Low capital intensity: inspec

  22. Slide 22: Controlled net debt / EBITDA

    Controlled net debt / EBITDA Financial covenants : • Leverage Ratio Net debt / EBITDA ratio < 3.25x • Interest Cover Ratio > 5.5x. As of June 30th: 10,76x 2,48 2,44 2,31 2,16 1,93 2,02 1,83 1,71 1,59 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 • Seasonality effect on cash generati

  23. Slide 23: Financial structure

    Financial structure Adjusted net debt Financial position Jun. 2016 Dec. 2015 (in € millions) (in € millions) Goodwill 1,883.4 1,800.4 19 28 2,184 235 Net fixed assets 1,181.6 1,127.3 139 1,863 44 Working capital (WC) 579.1 411.4 Capital employed 3,644.1 3,339.1 Equity 1,043.1 1,124.9 Adjusted net fi

  24. Slide 24: A well balanced debt maturity profile

    A well balanced debt maturity profile Debt Maturity schedule (in € millions equivalent of drawn debt) Term Loan BT BOND SCHULDSCHEIN USPP 180 500 500 98 60 102 184 216 40 167 158 90 14 27 2016 2017 2018 2019 2020 2021 2022 24 August, 2016 / Credit Presentation / © Copyright Bureau Veritas

  25. Slide 25: Well diversified source of financing at June 30, 2016

    Well diversified source of financing at June 30, 2016 Gross financial debt: EUR 2,391.2M Debt breakdown Disintermediated debt : 90% Bank debt & other : 10% Floating rate • Bonds • USD Term Loan 23% • USPPs • Other bank loans, overdraft, • Schuldschein • accrued interest • BT (Commercial Paper) Fixed

  26. Slide 26: Ongoing changes in the legal reorganization of Bureau Veritas SA

    Ongoing changes in the legal reorganization of Bureau Veritas SA To respond to certain regulatory constraints and increase the visibility of the operational/support activities in France currently hosted by Bureau Veritas SA, it is planning to spin off, through asset contributions, such activities in

  27. Slide 27: A sound financial policy

    A sound financial policy 1 Cash management • Centralize all cash surplus from subsidiaries at Bureau Veritas SA level • Subsidiaries can take out loans and invest cash with no other third party than Bureau Veritas SA 2 Foreign exchange • Multi-currency financing policy enabling subsidiaries to borro

  28. Slide 28: Conclusion

    Conclusion August 2016 / Credit Presentation / © Copyright Bureau Veritas

  29. Slide 29: A resilient business model with a strong credit profile

    A resilient business model with a strong credit profile BV operates an attractive model Key credit strength ► Strong brand and high barriers to entry ► Strong financial profile ► Diversified portfolio of high quality ► High and recurrent cash flow generation businesses with leading market positions

  30. Slide 30: Appendix

    Appendix August 2016 / Credit Presentation / © Copyright Bureau Veritas

  31. Slide 31: Marine & Offshore

    Marine & Offshore Conformity assessment of ships and marine equipment Key financials (in € millions) H1 16 FY15 FY14 Revenue 203.7 405.3 323.8 Total growth 0.7% 25.2% 10.1% Organic 3.0% 10.2% 7.1% External growth 1.3% 9.8% 4.8% FX -3.6% 5.2% -1.8% Adj. Operating profit 54.5 107 81 Adj. Operating mar

  32. Slide 32: Commodities

    Commodities Oil & Petrochemicals, Metals & Minerals, Agriculture Key financials (in € millions) H1 16 FY15 FY14 Revenue 399.4 772.8 701.0 Total growth -4.4% 10.9% 5.2% Organic 1.3% 3.3% 1.5% External growth 0.8% 2.0% 9.3% FX -6.5% 5.6% -5.6% Adj. Operating profit 49.6 87.5 84.5 Adj. Operating margin

  33. Slide 33: Industry

    Industry Conformity assessment of facilities / equipment Key financials (in € millions) H1 16 FY15 FY14 Revenue 448.7 1030.8 976.4 Total growth -17.2% 5.1% 4.2% Organic -9.8% -1.6% 5.8% External growth 0.1% 2.2% 4.3% FX -7.5% 4.5% -5.9% Adj. Operating profit 59.2 146.5 146.6 Adj. Operating margin 13

  34. Slide 34: In-Service Inspection & Verification

    In-Service Inspection & Verification Periodic inspection of equipment & facilities in operation Key financials (in € millions) H1 16 FY15 FY14 Revenue 293.3 599.0 560.0 Total growth 2.1% 6.9% 19.9% Organic 5.2% 2.8% 1.2% External growth - 0.8% 19.0% FX -3.1% 3.3% -0.3% Adj. Operating profit 34.2 82.

  35. Slide 35: Construction

    Construction Conformity assessment of buildings and infrastructure Key financials (in € millions) H1 16 FY15 FY14 Revenue 283.2 557.5 462.1 Total growth 4.3% 20.6% 5.1% Organic 0.4% 1.3% 0.1% External growth 6.9% 15.3% 6.5% FX -3.0% 4.0% -1.5% Adj. Operating profit 37.9 86.4 68.6 Adj. Operating marg

  36. Slide 36: Certification

    Certification Certification of management systems Key financials (in € millions) H1 16 FY15 FY14 Revenue 172.5 351.8 328.2 Total growth 1.0% 7.2% -2.0% Organic 5.4% 4.6% 0.8% External growth - - - FX -4.4% 2.6% -2.8% Adj. Operating profit 29.2 60.0 56.5 Adj. Operating margin 16.9% 17.1% 17.2% Revenu

  37. Slide 37: Consumer Products

    Consumer Products Testing of Textiles, Toys, Electrical & Electronics Key financials (in € millions) H1 16 FY15 FY14 Revenue 300.3 658.1 564.6 Total growth 1.8% 16.6% 9.5% Organic 2.3% 1.4% 5.4% External growth 2.4% 1.0% 5.0% FX -2.9% 14.2% -0.9% Adj. Operating profit 72.6 162.0 135.6 Adj. Operating

  38. Slide 38: Government Services & International Trade

    Government Services & International Trade Trade facilitation services Key financials (in € millions) H1 16 FY15 FY14 Revenue 120.3 259.5 255.4 Total growth -8.9% 1.6% -8.1% Organic -4.2% -1.9% -7.6% External growth - 1.7% 4.1% FX -4.7% 1.8% -4.6% Adj. Operating profit 13.3 43.1 41.9 Adj. Operating m

  39. Slide 39: Consolidated income statement

    Consolidated income statement H1 2016 H1 2015 (in € millions) Revenue 2,221.4 2,318.7 Purchase and external charges (640.3) (652.6) Personnel costs (1,162.4) (1,209.7) Taxes other than on income (24.7) (24.0) Net (additions to)/reversals of provisions (12.5) (7.6) Depreciation and amortization (92.0

  40. Slide 40: Consolidated balance sheet

    Consolidated balance sheet (in € millions) June 2016 Dec. 2015 Goodwill 1,883.4 1,800.4 Intangible assets 684.6 629.4 Property, plant and equipment 497.0 497.9 Other non-current assets 233.1 218.6 Total non-current assets 3,298.1 3,146.3 Trade and other receivables 1,496.4 1,374.2 Other current asse

  41. Slide 41: 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 (in € millions) reserves interests Company December 31, 2015 53.0 43.9 (70.3) 1,098.3 1,124.9 1,095.3 29.6 Capital increase - - - - - - - Capital re

  42. Slide 42: Adjusted net financial debt

    Adjusted net financial debt (in € millions) June 2016 Dec. 2015 Non-current borrowing and debt 1 761.1 2,311.0 Current borrowing and debt 615.0 66.8 O/w 2012 Bond emission 500.0 Bank overdrafts 15.1 12.1 Gross financial debt 2 391.2 2,389.9 Total cash and cash equivalents 212.7 522.9 Net financial d

  43. Slide 43: Cash flow statement

    Cash flow statement June 2016 June 2015 (in € millions) Profit before income tax 260.5 288.3 Elimination of financing and investing activities 51.1 34.5 Provisions and other non-cash items 6.2 14.7 Depreciation, amortization and impairment 90.8 95.0 Income tax paid (102.4) (106.2) Movements in worki

  44. Slide 44: Disclaimer

    Disclaimer This document does not, and shall not, in any circumstances constitute a public offering nor an invitation to the public in connection with any offering of any securities. This document is provided for information purposes only without any warranty of any kind, express or implied, and is

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