Quarterly Report • Aug 28, 2013
Quarterly Report
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This document is a non-certified free translation of the French language of the 2013 Half-Year Financial Report drawn up in accordance with Article L.451-1-2(III) of the French Monetary and Financial Code. In all matters of interpretation of information, the original French version takes precedence over this translation. It includes a Business Report for the half-year running from January 1, 2013 to June 30, 2013, the Consolidated Financial Statements of the Bureau Veritas Group as of June 30, 2013, the Statutory Auditor's Report and the declaration by the persons responsible for the document.
| 1. | 2013 half-year business report | 2 |
|---|---|---|
| 1.1. | Preliminary note | 2 |
| 1.2. | Highlights of the period | 2 |
| 1.3. | Change in activity and half-year results | 3 |
| 1.4. | Cash flows and sources of financing | 9 |
| 1.5. | Risks factors for the remaining six months of the 2013 financial year | 14 |
| 1.6. | Related-party transactions | 15 |
| 1.7. | Outlook | 15 |
| 1.8. | Events after the end of the reporting period | 16 |
| 2. | 2013 condensed half-year consolidated financial statements 17 | |
| 2.1. | Condensed half-year consolidated financial statements | 17 |
| 2.2. | Notes to the 2013 condensed half-year consolidated financial statements Note 1 : General information Note 2 : First-half 2013 highlights Note 3 : Summary of significant accounting policies Note 4 : Seasonal fluctuations Note 5 : Segment reporting Note 6 : Operating income and expense Note 7 : Income tax expense Note 8 : Goodwill Note 9 : Acquisitions and disposals Note 10 : Share capital Note 11 : Share-based payment Note 12 : Financial liabilities Note 13 : Contingent liabilities Note 14 : Movements in working capital requirement attributable to operations Note 15 : Earnings per share Note 16 : Dividend per share Note 17 : Additional financial instrument disclosures Note 18 : Related-party transactions Note 19 : Events after the end of the reporting period Note 20 : Scope of consolidation |
22 22 22 23 24 25 25 25 26 27 29 30 30 32 32 33 34 34 37 38 39 |
| 2.3. | Statutory Auditor's review report on the interim financial information (January 1 to June 30, 2013) |
56 |
Readers are invited to peruse the information set out herein on the Group's financial position and results together with the Group's consolidated half-year financial statements and the notes to the consolidated half-year financial statements as of June 30, 2013 set out in Chapter 2 of this 2013 halfyear financial report, as well as the Group's consolidated financial statements and the notes to the consolidated financial statements as of December 31, 2012 set out in paragraph 4.1 of the 2012 Registration Document.
Pursuant to Regulation (EC) 1606/2002 of July 19, 2002 on the application of international accounting standards, the consolidated accounts of Bureau Veritas for the first half of 2013 (H1 2013) and the first half of 2012 (H1 2012) were drawn up in accordance with IFRS (International Financial Reporting Standards) guidelines, as adopted by the European Union. Percentages may be calculated using nonwhole numbers and consequently they may be different from those calculated using whole numbers.
During the first-half of the year, Bureau Veritas has announced three acquisitions with combined annual turnover of more than EUR 60 million, enabling the Group to develop its technical expertise in fast-growing market segments.
The combined annual shareholders' meeting has approved the appointment of the three board members proposed, namely Lucia Sinapi-Thomas, Nicoletta Giadrossi and Ieda Gomes Yell, thereby increasing the percentage of women on the Bureau Veritas Board of Directors to 33% (four out of 12).
During the Board of Directors' meeting held following the combined annual shareholders' meeting, Frank Piedelièvre and Frédéric Lemoine were both renewed in their respective positions as Chairman and Vice-Chairman of the Board of Directors.
So far, the Board of Directors has 12 members, seven of which are independent.
On June 12, 2013, Bureau Veritas' share capital was increased by EUR 39,793,414.56, including:
Following these operations, the Bureau Veritas' share capital amounted to EUR 53,053,250.88.
As an extension of this capital increase, the Company proceeded to divide the nominal value of each Bureau Veritas share by four, with effect from June 21, 2013.
The nominal value of the Bureau Veritas share was reduced from EUR 0.48 to EUR 0.12 and the number of outstanding shares multiplied by four. On June 30, 2013, the share capital of the Company was made up of 442,190,424 shares.
| (EUR millions) | H1 2013 | H1 2012 | Change |
|---|---|---|---|
| Revenue | 1,957.5 | 1,861.6 | +5.1% |
| Purchases and external charges | (560.4) | (542.4) | |
| Personnel costs | (1,018.0) | (954.2) | |
| Other expense | (95.9) | (105.3) | |
| Operating profit | 283.1 | 259.7 | +9.0% |
| Net financial expense | (33.7) | (28.2) | |
| Share of profit of associates | (0.1) | - | |
| Profit before income tax | 249.3 | 231.5 | +7.7% |
| Income tax expense | (73.0) | (65.4) | |
| Net profit | 176.3 | 166.1 | +6.1% |
| Minority interests | 6.1 | 5.3 | |
| Attributable net profit | 170.2 | 160.8 | +5.8% |
Revenue for the first half of 2013 (H1 2013) totaled EUR 1,957.5 million, up 5.1% relative to H1 2012. On a constant currency basis, revenue rose by 7.5%.
Five businesses posted similar growth levels in both quarters. The Industry, Consumer Products and Government Services & International Trade (GSIT) businesses continued to drive growth. The Marine business remained in decline; however new orders more than doubled. The Commodities business showed slight growth, with the decline in revenue from mining exploration related activities having been offset by higher than expected growth in oil products.
Growth was more modest in activities highly exposed to Europe, especially In-Service Inspection & Verification (IVS) and Certification. In contrast, revenue in the Construction business increased during the second quarter on the back of strengthened exposure to Asia.
During the first half, revenue generated in fast-growing geographies (Latin America, Asia-Pacific excluding Japan, Eastern Europe, Middle-East and Africa) increased further to account for 55% of overall revenue. Momentum showed no signs of slowing, since activities in these regions are associated more with the strengthening of regulations and investments in energy infrastructure than with growth in domestic product alone.
The Group's operating profit rose by 9.0% to EUR 283.1 million in H1 2013 compared with EUR 259.7 million in H1 2012.
Adjusted operating profit is defined as operating profit before income and expenses relative to acquisitions and other non-recurring items.
The table below shows the calculation of adjusted operating profit in H1 2013 and H1 2012:
| (EUR millions) | H1 2013 | H1 2012 | Change |
|---|---|---|---|
| Operating profit | 283.1 | 259.7 | +9.0% |
| Amortization of acquisition intangibles | 26.4 | 27.2 | |
| Goodwill impairment and restructuring (Spain) | 3.5 | 8.0 | |
| Acquisitions and disposals | 0.2 | 0.7 | |
| Adjusted operating profit | 313.2 | 295.6 | +6.0% |
Amortization of acquisition intangibles corresponds to amortization of intangibles resulting from business combinations (mainly customer lists). The level decreased slightly in H1 2013, despite the recent acquisitions of 7Layers and LVQ-WP since the amount booked in H1 2012 included faster amortization for Spain (Construction and IVS).
Adjusted operating profit rose by 6.0% to EUR 313.2 million in H1 2013 compared with EUR 295.6 million in the year-earlier period. Adjusted operating margin, expressed as a percentage of revenue stood at 16.0% in H1 2013, up 10 basis points relative to the 15.9% reported in H1 2012. Adjusted operating profit increased in all businesses, with the exception of the Marine and Commodities businesses.
| (EUR millions) | H1 2013 | H1 2012 |
|---|---|---|
| Finance costs, gross | (30.7) | (25.0) |
| Income from cash and cash equivalents | 0.6 | 1.1 |
| Finance costs, net | (30.1) | (23.9) |
| Foreign exchange losses | (1.2) | (0.7) |
| Interest cost on pension plans | (1.6) | (2.3) |
| Other | (0.8) | (1.3) |
| Net financial expense | (33.7) | (28.2) |
Net financial expense of EUR 33.7 million in H1 2013 showed an increase on the EUR 28.2 million reported in the year-earlier period.
Net finance costs rose by EUR 6.2 million, from EUR 23.9 million in H1 2012 to EUR 30.1 million in H1 2013. This was due to an increase in the average cost of debt following the extension of maturities, and the rise in average financial debt over the period.
Foreign exchange rate losses rose to EUR 1.2 million from EUR 0.7million in H1 2013.
Consolidated income tax expense stood at EUR 73.0 million on June 30, 2013, compared with EUR 65.4 million on June 30, 2012. The effective tax rate (ETR), calculated by dividing income tax expense by the pre-tax profit, worked out to 29.3% on June 30, 2013 compared with 28.2% on June 30, 2012. The adjusted effective tax rate stood at 28.9%.
The increase relative to the year-earlier period was primarily due to the fact that losses generated in Spain did not lead to the recognition of deferred tax assets.
H1 2013 attributable net profit rose 5.8% to EUR 170.2 million. Earnings per share rose 8.3% to EUR 0.39, compared with EUR 0.36 in H1 2012 (adjusted for the four-for-one stock split undertaken on June 21, 2013).
Attributable adjusted net profit is defined as attributable net profit adjusted for other operating expense after tax.
| (EUR millions) | H1 2013 | H1 2012 |
|---|---|---|
| Attributable net profit | 170.2 | 160.8 |
| EPS (a) (EUR per share) | 0.39 | 0.36 |
| Other operating expenses | 30.1 | 35.9 |
| Tax effect on other operating expenses (b) | (7.8) | (7.5) |
| Attributable adjusted net profit | 192.5 | 189.2 |
| Adjusted EPS (a) (EUR per share) | 0.44 | 0.43 |
(a) Calculated using the weighted average number of shares of 438,925,614 in H1 2013 and 440,670,804 in H1 2012 (adjusted to take account of the four-for-one share split on June 21, 2013).
(b) Calculated using a specific tax rate for each adjustment.
H1 2013 attributable net profit totaled EUR 192.5 million, up 1.7% relative to H1 2012. Adjusted earnings per share rose by 2.3% to EUR 0.44 compared with EUR 0.43 in H1 2012 (adjusted for the four-for-one share split undertaken on June 21, 2013).
| % growth | ||||||
|---|---|---|---|---|---|---|
| (EUR millions) | 2013 | 2012 | Overall | Organic | Scope | Currencies |
| Marine | 145.3 | 160.7 | (9.6)% | (8.6)% | 0.1% | (1.1)% |
| Industry | 466.7 | 400.5 | 16.5% | 10.9% | 9.4% | (3.8)% |
| IVS | 231.7 | 237.9 | (2.6)% | (0.5)% | (1.2)% | (0.9)% |
| Construction | 213.3 | 224.1 | (4.8)% | 1.5% | (3.8)% | (2.5)% |
| Certification | 170.2 | 170.1 | 0.1% | 2.4% | (0.1)% | (2.2)% |
| Commodities | 339.9 | 334.5 | 1.6% | 2.7% | 1.9% | (3.0)% |
| Consumer Products | 244.0 | 207.3 | 17.7% | 10.6% | 8.0% | (0.9)% |
| GSIT | 146.4 | 126.5 | 15.7% | 16.0% | 2.9% | (3.2)% |
| Total first half (H1) | 1,957.5 | 1,861.6 | 5.1% | 4.7% | 2.8% | (2.4)% |
IVS : In-Service Inspection & Verification
GSIT: Government Services & International Trade
| (EUR millions) | Adjusted operating profit | Adjusted operating margin | ||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | Change | 2013 | 2012 | Change (basis points) |
|
| Marine | 39.5 | 47.4 | (16.7)% | 27.2% | 29.5% | (230) |
| Industry | 68.1 | 53.1 | +28.2% | 14.6% | 13.3% | +130 |
| IVS | 24.4 | 22.5 | +8.4% | 10.5% | 9.5% | +100 |
| Construction | 25.4 | 24.1 | +5.4% | 11.9% | 10.8% | +110 |
| Certification | 30.4 | 29.8 | +2.0% | 17.9% | 17.5% | +40 |
| Commodities | 39.7 | 44.2 | (10.2)% | 11.7% | 13.2% | (150) |
| Consumer Products | 55.9 | 47.4 | +17.9% | 22.9% | 22.9% | - |
| GSIT | 29.8 | 27.1 | +10.0% | 20.4% | 21.4% | (100) |
| Total first half (H1) | 313.2 | 295.6 | +6.0% | 16.0% | 15.9% | +10 |
Revenue fell by 9.6% and 8.6% on a same structure and exchange rate basis.
The ships in service activity (57% of H1 2013 revenue in the division) benefited from growth of 2.7% in the fleet classed by Bureau Veritas. On June 30, 2013, the fleet was made up of 10,325 ships and represented 94.8 million gross tons (GRT).
Revenue from the classification and certification of new ships activities (43% of revenue) was in decline. The order book totaled GRT 14.4 million, down 20% relative to June 30, 2012. However, new order intake more than doubled relative to H1 2012 to stand at GRT 4.3 million.
Adjusted operating margin fell to 27.2%. The impact of lower volumes was partly offset by restructuring and by the optimization of central costs.
In the second half of 2013, the Marine business should post growth in the ships in service segment, but expects no recovery in revenue from new construction. The recovery in new orders nevertheless suggests that revenue from new construction should pick up over the medium term. The Group is also continuing its strategy to expand in the offshore and liquefied natural gas (LNG) segments.
H1 2013 revenue rose by 16.5%, including organic growth of 10.9% and growth of 9.4% stemming from acquisitions (Tecnicontrol in Colombia, TH Hill in the US and LVQ-WP in Germany) as well as a negative impact from exchange rates of 3.8%.
Performances in the Industry business were driven by investments in new energy infrastructure in fastgrowing geographies as well as the ramp-up in major contracts signed in 2012.
Adjusted operating margin widened by 130 basis points to 14.6% on the back of higher volumes and an improvement in the business mix.
In 2013, organic growth should remain robust in the Industry business, driven by structural growth factors stemming from strengthening of regulations and outsourcing in a number of sectors, especially in oil & gas and power.
Revenue fell 2.6%, including virtually stable organic growth (-0.5%), the impact of the Anasol disposal in Brazil (-1.2%) and exchange rate effects (-0.9%).
Business in Europe (82% of H1 2013 revenue in the business) resisted the economic crisis, except in Spain. Development in fast-growing geographies continued, especially in the Middle East (new activities in elevators), in Latin America (inspection of lifting equipment) and in Bangladesh.
Adjusted operating margin widened by 100 basis points to 10.5%, on the back of lean management initiatives in France and improved profitability in Brazil (disposal of Anasol) and in Italy.
For the rest of 2013, the business should benefit from a recovery in organic growth, especially in France and ongoing development in fast-growing geographies.
The 4.8% decline in revenue stemmed from the disposal of the infrastructure business in Spain (- 3.8%) and exchange rate fluctuations (-2.5%), with a positive 1.5% impact from organic growth and some recovery in Q2 (+3.4%). The deterioration in France (52% of revenue) was more than balanced by high growth in Asia, especially China, Japan and India, whereas activities in the US picked up gradually.
Operating margin widened by 110 basis points to 11.9%, primarily following the exit from infrastructure activities in Spain.
For the rest of 2013, the decline in revenue in France should be contained thanks to the diversity of the services portfolio. The Group is continuing its strategy to expand in fast-growing geographies, which now account for 18% of revenue.
Revenue was virtually stable with organic growth of 2.4% offset by a 2.2% negative impact from exchange rates.
Business slowed in Europe, especially in the conventional QHSE schemes. Fast-growing geographies continued to grow at a healthy pace but were affected by the end to carbon certificates required by the Kyoto protocol program.
Adjusted operating margin widened by 40 basis points to 17.9%, on the back of improved operating efficiency.
Over the rest of 2013, the business should benefit from a recovery in organic growth, prompted especially by the development of major contracts, sustainable development services and sector schemes (agri-food, aviation and timber supply chain).
Revenue growth of 1.6% was made up of organic growth of 2.7%, a 1.9% contribution from acquisitions stemming from the consolidation of Acme, and a negative impact from exchange rates of 3.0%.
The diverse nature of activities helped cushion the decline in revenue in Metals & Minerals. Oil & Petrochemicals segment (38% of revenue in H1 2013 in the business) posted high revenue growth, prompted by new laboratories and the development of new services as well as a favorable market conditions.
Revenue in the Metals & Minerals segment (39% of revenue) was in decline due to lower capex in exploration of mining companies, especially in Australia and Canada.
Revenue growth in the Coal segment (14% of revenue) remained solid, with growth in South Africa and Indonesia helping to offset the slowdown in Australia.
Revenue from the Agriculture segment (9% of revenue) also increased on the back of robust activity in South America.
Adjusted operating margin narrowed to 11.7% of revenue from 13.2% in H1 2012 due to the decline in volumes in exploration activities and restructuring costs. Headcount reductions in Australia and Canada as well as initiatives to reduce back-office costs were also implemented.
Growth prospects for the second half remain robust for Oil & Petrochemicals and Agriculture segments, driven by new services and new geographies. A recovery in mining exploration activities is unlikely to take place before 2014.
Revenue growth of 17.7% broke down into organic growth of 10.6%, an 8% positive impact from acquisitions (mainly 7Layers) and a 0.9% negative impact from exchange rates.
The Textiles & Softlines segment (41% of revenue in the business in H1 2013) posted sharp growth primarily from testing activities in northern China and South-East Asia as well as inspections and social audits.
Electrical & Electronics segment (30% of revenue) also generated high revenue growth. The acquisition of 7Layers has positioned the Group among the world leaders by doubling in size its wireless technologies activities (SmartWorld).
Revenue from the Toys & Hardlines segment (29% of revenue) also increased, thereby confirming a stabilization in the toys testing activity and growth in other consumer goods (Hardlines).
Adjusted operating margin remained at 22.9%, with higher volumes and productivity initiatives having helped offset the disadvantageous mix effect and wage inflation in Asia.
In H2 2013, the business should continue to post growth in all these segments.
H1 2013 revenue rose 15.7%, including organic growth of 16.0%, a 2.9% contribution from acquisitions and a negative exchange rate impact of 3.2%.
The business benefited from growth in Verification of Conformity programs and activities for the automotive sector, which now account for more than half of revenue.
Adjusted operating margin totaled 20.4% and compared to the high level of 21.4% posted in H1 2012. The narrowing was due to the diversification in the business portfolio (automotive).
Revenue growth is likely to be more mixed in the second half of 2013 due to demanding comparison base and a slowdown in the traditional pre-shipment inspections activities.
| (EUR millions) | H1 2013 | H1 2012 |
|---|---|---|
| Profit before income tax | 249.3 | 231.5 |
| Elimination of cash flows from financing and investing activities | 31.4 | 28.2 |
| Provisions and other non-cash items | 2.4 | (9.4) |
| Depreciation, amortization and impairment | 73.8 | 78.8 |
| Movements in working capital attributable to operations | (71.1) | (98.1) |
| Income tax paid | (64.3) | (87.6) |
| Net cash generated from operating activities | 221.5 | 143.4 |
| Acquisitions of subsidiaries | (60.2) | (216.8) |
| Proceeds from sales of subsidiaries | 4.3 | 6.4 |
| Purchases of property, plant and equipment and intangible assets | (71.8) | (56.9) |
| Proceeds from sales of property, plant and equipment and intangible assets | 4.7 | 4.4 |
| Purchases of non-current financial assets | (8.8) | (15.8) |
| Proceeds from sales of non-current financial assets | 4.1 | 3.4 |
| Net cash used in investing activities | (127.7) | (275.3) |
| Capital increase | 1.3 | 8.4 |
| Purchase / sales of treasury shares | (57.1) | (20.7) |
| Dividends paid | (207.6) | (143.9) |
| Increase in borrowings and other debt | 258.8 | 895.0 |
| Repayment of borrowings and other debt | (102.5) | (592.6) |
| Interest paid | (42.9) | (22.2) |
| Net cash generated from (used in) financing activities | (150.0) | 124.0 |
| Impact of currency translation differences | 0.8 | 2.7 |
| Net decrease in cash and cash equivalents | (55.4) | (5.2) |
| Cash and cash equivalents at beginning of period | 234.8 | 230.9 |
| Net cash and cash equivalents at end of period | 179.4 | 225.7 |
| o/w cash and cash equivalents | 226.1 | 245.0 |
| o/w bank overdrafts | (46.7) | (19.3) |
Cash flows before changes in working capital requirements (WCR) and income tax paid rose 8.4% to EUR 356.9 million on June 30, 2013 compared with EUR 329.1 million on June 30, 2012.
On June 30, 2013, WCR stood at EUR 361.3 million, or 9.0% of revenue over the past 12 months adjusted for companies acquired, compared with EUR 352.2 million on June 30, 2012 (or 9.4% of revenue). Note that WCR is higher at the end of June than at the end of the year given the seasonal nature of certain payouts (employee bonuses, insurance policies).
After changes in WCR and income tax paid, net cash generated from operating activities stood at EUR 221.5 million in H1 2013 up 54.5% relative to the EUR 143.4 million reported in H1 2012.
| (EUR millions) | H1 2013 | H1 2012 |
|---|---|---|
| Net cash generated from operating activities | 221.5 | 143.4 |
| Purchases of property, plant and equipment and intangible assets | (71.8) | (56.9) |
| Proceeds from sales of property, plant and equipment and intangible assets | 4.7 | 4.4 |
| Interest paid | (42.9) | (22.2) |
| Levered free cash flow | 111.5 | 68.7 |
Levered free cash flow (cash flow available after tax, interest expense and capital expenditure) stood at EUR 111.5 million in H1 2013 compared with EUR 68.7 million in H1 2012.
In general, Bureau Veritas' inspection and certification activities are not particularly capital-intensive, whereas analysis and laboratory testing activities require investment spending. These activities concern the Consumer Products and Commodities businesses as well as a number of customs-based scanner inspection activities (GSIT business).
The overall amount of capital expenditure net of disposals (net capex) undertaken by the Group stood at EUR 67.1 million in H1 2013, up 27.8% relative to the EUR 52.5 million reported in H1 2012. The Group's capex-to-revenue rate stood at 3.4%, similar to the level seen in the full-year 2012.
Interest paid in H1 2013 rose to EUR 42.9 million, mainly due to the first annual payment of interest on the May 2012 bond issue (EUR 500 million), which was paid during the period.
A description of the main acquisitions made during H1 2013 is presented in Paragraph 1.2 "Highlights of the period" of this first-half report.
| (EUR millions) | H1 2013 | H1 2012 |
|---|---|---|
| Purchase price of acquisitions | (49.8) | (275.6) |
| Cash and cash equivalents of acquired companies | 4.6 | 11.0 |
| Contingent consideration outstanding at June 30 in respect of acquisitions in H1 2013 |
3.5 | 52.4 |
| Purchase price paid in relation to prior periods acquisitions | (16.5) | (0.9) |
| Impact of acquisitions on cash and cash equivalents | (58.2) | (213.1) |
| Acquisition fees | (2.0) | (3.7) |
| Acquisition of subsidiaries | (60.2) | (216.8) |
After consolidating the debt of the acquired companies (EUR 3.6 million), the financial impact of acquisitions worked out to EUR 63.8 million.
In H1 2013, in order to serve stock-options and performance shares plans, the Company carried out share buybacks net of capital increases of EUR 55.8 million.
In H1 2013, the "dividends paid" line item mainly included the payment made to shareholders for the 2012 financial year, for an amount of EUR 200.4 million (dividend per share of EUR 1.83 or EUR 0.46 based on the new number of shares).
Financial debt increased by EUR 156.3 million during H1 2013.
On June 30, 2013, the Group's gross debt totaled EUR 1,604,0 million and consists of loans contracted with banks and other parties:
Non-bank financing:
Bank financing:
The Group's gross financial debt breaks down as follows:
| (EUR millions) | June 30, 2013 |
Dec. 31, 2012 |
|---|---|---|
| Bank borrowings due after one year | 1,284.3 | 1,282.7 |
| Bank borrowings due within one year | 273.0 | 119.6 |
| Bank overdrafts | 46.7 | 8.7 |
| Gross financial debt | 1,604.0 | 1,411.0 |
The table below shows cash and cash equivalents as well as the Group's net financial debt:
| (EUR millions) | June 30, 2013 |
Dec. 31, 2012 |
|---|---|---|
| Marketable securities and similar receivables | 7.3 | 8.0 |
| Cash at bank and on hand | 218.8 | 235.5 |
| Cash and cash equivalents | 226.1 | 243.5 |
| Gross financial debt | 1,604.0 | 1,411.0 |
| Net financial debt | 1,377.9 | 1,167.5 |
Adjusted net financial debt (after currency hedging instruments as defined in the calculation of banking covenants) totaled EUR 1,386.0 million on June 30, 2013, compared with EUR 1,150.7 million on December 31, 2012.
The Group's cash on hand is spread over more than 500 units located in more than 140 countries. In countries where the setting up of loans or financial current accounts is difficult or impossible (especially in China, Brazil, South Korea and Turkey), cash is pooled upon payment of dividends or upon payment of amounts due under the franchise agreements within the Group.
The majority of the Group's financings, the main exceptions being the bond issue and the commercial paper program, require compliance with a number of commitments and financial ratios. On June 30, 2013, all of these commitments were respected and can be resumed as follows:
On July 16, 2008, the Group implemented a private placement in the United States (USPP 2008) for USD 266.0 million and GBP63.0 million. The characteristics of this financing contract (USPP 2008) are the following:
| Maturity | Amounts drawn down (EUR million) |
Currency | Amortization | Rate |
|---|---|---|---|---|
| July 2018 | 145.4 | GBP & USD | On maturity | Fixed |
| July 2020 | 131.5 | GBP & USD | On maturity | Fixed |
This issue was carried out in the form of four "senior notes" repayable on maturity. The 2008 Private Placement is 100% drawn down.
The Group confirmed the use of this multi-currency credit line with a US institutional investor in June 2010 after the acquisition of Inspectorate. The terms of the financing contract (USPP 2010) are as follows:
| Maturity | Amounts drawn down (EUR million) |
Currency | Amortization | Rate | |
|---|---|---|---|---|---|
| July 2019 | 184.1 | EUR | On maturity | Fixed |
On June 30, 2013, the 2010 US Private Placement was 100% drawn down by EUR 184.1 million.
In October 2011, the Group set up a three-year, unconfirmed, multi-currency financial line of USD 200 million with an investor.
The Group confirmed that it had used part of this line for an amount of USD 100.0 million.
| Maturity | Amount drawn down (EUR millions) |
Currency | Amortization | Rate |
|---|---|---|---|---|
| October 2021 | 76,5 | USD | On maturity | Fixed |
On June 30, 2013, the 2011 US Private Placement was 50% drawn down in US dollars for an amount of USD 100 million.
In 2011 and 2012, the Group set up Schuldschein private placements in several tranches on the German market for an overall amount of EUR 193.0 million redeemable on maturity. Margins on the SSD vary depending on the duration of the loans.
The Group has undertaken an inaugural, unrated bond issue for an amount of EUR 500.0 million, maturing on May 24, 2017 (five years) with a fixed-rate coupon of 3.75%.
The has implemented a commercial paper program for an overall amount of EUR 300.0 million in order to optimize its short-term cash management when possible and to limit the use of other financing sources. Maturities on the commercial paper are less than one year.
On June 30, 2013, the program's outstanding amount stood at EUR 126.0 million.
In June 2010, the Group set up a five-year bank credit line with French institutional investors for EUR 200.0 million (maturing in June 2015). On June 30, 2013, the 2010 French Private Placement had been drawn down by an amount of EUR 50 million (facility C).
On July 27, 2012, the Group set up a new revolving syndicated loan of EUR 450.0 million for a five year period. On June 30, 2013, the 2012 Syndicated Loan has been drawn down by EUR 110.0 million.
Off-balance sheet commitments can include adjustments and increases in acquisition prices, one-off rental agreement commitments and guarantees and pledges granted.
Guarantees and pledges granted as of June 30, 2013 and for the full-year 2012 are set out below:
| (EUR millions) | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|
| Due within one year | 94.8 | 67.5 |
| Due between one and five years | 106.3 | 119.5 |
| Beyond five years | 17.7 | 9.2 |
| Total | 218.8 | 196.2 |
Guarantees and pledges include bank guarantees and parent company guarantees:
institutions in connection with the Group's business activities and rental payment guarantees. By granting guarantees for rental payments, the parent company undertakes to pay rent to the lessor in the event of default by the subsidiary concerned.
On June 30, 2013, guarantees and pledges granted broke down as follows:
| (EUR millions) | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|
| Bank guarantees | 109.9 | 105.2 |
| Parent company guarantees | 108.9 | 91.0 |
| Total | 218.8 | 196.2 |
The presentation of off-balance sheet commitments in this document does not omit any significant offbalance sheet commitment in accordance with the applicable accounting standards.
On June 30, 2013, the Group had no significant off-balance sheet commitment related to external growth (such as adjustments and increases in acquisition prices).
The Group estimates that its financing needs for operations will be fully covered by its operating cash flows.
As of June 30, 2013, in order to finance acquisitions, the Group had the following resources stemming from:
The readers are invited to refer to the 2012 Registration Document of the company registered with the French Financial Markets Authority on March 22, 2013 under the number D.13-0205 (paragraph 1.12. Risk Factors).
This paragraph includes information concerning the risk factors, the insurance and coverage of the risks as well as the method used for the provisioning of the risks and legal disputes.
A detailed description of the financial and market risks for this six-month period is provided in Note 17 of the Notes to the Consolidated Half-Year Financial Statements, presented in Chapter 2 - 2013 Half-Year Consolidated Financial Statements of this Half-Year Financial Report.
With the exception of these points, no other risks or concerns are anticipated other than those presented in these documents.
In the normal course of business, the Group is involved in a large number of litigation or pre-litigation proceedings seeking to establish the Group's professional liability in connection with services provided. Although the Group pays careful attention to managing risks and to the quality of the services provided, some services may give rise to claims that could result in adverse financial judgments.
The costs resulting from such proceedings form the amount given as a provision. These amounts are the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The costs ultimately incurred by the Group may exceed the amounts set aside as provisions due to a variety of factors such as the uncertain nature of the outcome of the dispute.
At the date of this half-year financial report, the Group is involved in the following principal proceedings:
As far as the dispute regarding the construction of a hotel and business complex in Turkey is concerned, there has been no significant development since the publication of the 2012 Registration Document, whose statements remain valid, as the experts are yet to file their report.
In this dispute, concerning the Gabon Express airline accident in 2004, the Libreville Supreme Court issued its decision on June 18, 2013, surprisingly dismissing the appeals lodged by Bureau Veritas Gabon and its former chief executive officer. These appeals were filed before the Libreville Court of Appeal on July 21, 2011 and aimed mainly to point out procedural errors request the involvement of the insurers and insurance intermediaries (brokers) of Gabon Express in the proceedings as well as the presentation of the documents seized in 2004.
Bureau Veritas Gabon is considering with its insurers the possibility of a further "appeal".
There are no other government, administrative, legal, or arbitration proceedings or investigations (including any proceedings of which the Company is aware, pending, or with which the Group is threatened), likely to have or to have had a material impact on the financial position or profitability of the Group within the last six months.
Readers are invited to refer to Note 18 - Related-party transactions represented in Chapter 2 - 2013 Half-Year Consolidated Financial Statements of the present 2013 half-year financial report.
In 2013, Bureau Veritas should deliver solid growth in revenue and adjusted operating profit, and despite an ongoing challenging economic environment in Europe and the decline in mining exploration. Organic growth in H2 2013 should be in line with the H1 level. The priority is to continue improving profitability.
The Group confirms the 2012-2015 financial targets set out in the "BV2015: Moving forward with confidence" strategic plan:
On July 22, 2013, the Board of Directors decided to award stock purchase options and performance shares to 578 Group employees including the Chief Executive Officer, corresponding to a total of 3,387,500 shares (2,146,700 performance shares and 1,240,800 stock purchase options), or 0.77% of the share capital.
The purchase price for the stock options was set at EUR 21.01, reflecting the average undiscounted quoted opening price for the Company's shares on the 20 trading days preceding the grant date.
The stock purchase options and performance shares awarded are subject to a number of performance conditions and also require a minimum period of service.
At the beginning of the third quarter of 2013, Bureau Veritas completed the acquisition of Sievert, a leading provider of non-destructive testing and industrial inspection services in India, South-East Asia and the Middle East. The company has 1,600 employees and reported revenue of USD 42 million for the year ended March 31, 2013.
On August 21, 2013, Bureau Veritas announced the acquisition of Kanagawa Building Inspection (KBI), a Japanese company specializing in building inspection and certification services. KBI has a broad customer base of individual home builders. It primarily provides conformity assessment services for buildings, ranging from design review to building inspection. Its services also cover housing quality assurance and structural assessment calculations. KBI has the necessary accreditations to provide these services, which are required for verifying the quality of buildings and their conformity with national regulations.
KBI has 146 employees located in five different offices in the Greater Tokyo Area. For the year ended March 31, 2013 it generated revenue of around EUR 7.5 million (JPY 913 million).
In Japan, Bureau Veritas already has a significant presence in the construction business through the approval of plans in compliance with urbanism and construction codes. The acquisition of KBI extends Bureau Veritas' geographical presence in the country, while strengthening its client base and increasing its market share in building conformity assessment services.
| (in millions of euros, except per share data) | Note | First-half 2013 | First-half 2012 |
|---|---|---|---|
| Revenue | 5 | 1,957.5 | 1,861.6 |
| Purchases and external charges | 6 | (560.4) | (542.4) |
| Personnel costs | 6 | (1,018.0) | (954.2) |
| Taxes other than on income | (25.3) | (34.5) | |
| Net (additions to)/reversals of provisions | 6 | (5.5) | 4.4 |
| Depreciation and amortization | (73.8) | (70.7) | |
| Other operating income and expense, net | 6 | 8.7 | (4.5) |
| Operating profit | 5 | 283.1 | 259.7 |
| Income from cash and cash equivalents | 0.6 | 1.1 | |
| Finance costs, gross | (30.7) | (25.0) | |
| Finance costs, net | (30.1) | (23.9) | |
| Other financial income and expense, net | (3.6) | (4.3) | |
| Net financial expense | (33.7) | (28.2) | |
| Share of profit (losses) of associates | (0.1) | - | |
| Profit before income tax | 249.3 | 231.5 | |
| Income tax expense | 7 | (73.0) | (65.4) |
| Net profit for the period | 176.3 | 166.1 | |
| Attributable to: | |||
| owners of the Company | 170.2 | 160.8 | |
| non-controlling interests | 6.1 | 5.3 | |
| Basic earnings per share (in euros) | 15 | 0.39 | 0.36 |
| Diluted earnings per share (in euros) | 15 | 0.38 | 0.36 |
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Net profit for the period | 176.3 | 166.1 |
| Other comprehensive income | ||
| Items to be reclassified to profit or loss | ||
| Currency translation differences(1) | (98.9) | 37.2 |
| Cash flow hedges(2) | (2.5) | 2.3 |
| Tax effect on items to be reclassified to profit | 0.9 | (0.8) |
| Total items to be reclassified to profit | (100.5) | 38.7 |
| Items not to be reclassified to profit or loss | ||
| Actuarial gains/(losses)(3) | 2.3 | (0.9) |
| Tax effect on items not to be reclassified to profit | (0.8) | 3.1 |
| Total items not to be reclassified to profit | 1.5 | 2.2 |
| Total other comprehensive income (expense), after tax | (99.0) | 40.9 |
| Total comprehensive income | 77.3 | 207.0 |
| Attributable to: | ||
| owners of the Company | 71.3 | 201.3 |
| non-controlling interests | 6.0 | 5.7 |
(1) Currency translation differences: this item includes exchange losses of EUR 41.0 million arising on net investments in foreign operations and the impact of translating into euros the financial statements of subsidiaries with a different functional currency.
(2) The change in cash flow hedges results from changes in the fair value of derivative financial instruments eligible for hedge accounting.
(3) Actuarial gains and losses: these reflect the impact of changes in valuation assumptions (discount rate, salary inflation rate, rate of increase in pensions and expected return on plan assets) regarding the Group's obligations in respect of defined benefit plans.
| (in millions of euros) | Note | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|---|
| Goodwill | 8 | 1,457.6 | 1,486.3 |
| Intangible assets | 361.8 | 385.4 | |
| Property, plant and equipment | 390.6 | 379.4 | |
| Investments in associates | 0.6 | 0.7 | |
| Deferred income tax assets | 116.0 | 110.4 | |
| Investments in non-consolidated companies | 1.6 | 1.8 | |
| Derivative financial instruments | 1.8 | 22.4 | |
| Other non-current financial assets | 48.6 | 43.9 | |
| Total non-current assets | 2,378.7 | 2,430.3 | |
| Trade and other receivables | 1,137.9 | 1,060.5 | |
| Current income tax assets | 39.2 | 55.0 | |
| Current financial assets | 6.0 | 7.7 | |
| Derivative financial instruments | 1.5 | 2.6 | |
| Cash and cash equivalents | 226.1 | 243.5 | |
| Total current assets | 1,410.6 | 1,369.3 | |
| Assets held for sale | - | 5.4 | |
| TOTAL ASSETS | 3,789.3 | 3,805.0 | |
| Share capital | 53.1 | 13.3 | |
| Retained earnings and other reserves | 916.0 | 1,131.2 | |
| Equity attributable to owners of the Company | 969.0 | 1,144.5 | |
| Non-controlling interests | 23.1 | 23.3 | |
| Total equity | 992.1 | 1,167.8 | |
| Bank borrowings | 12 | 1,284.3 | 1,282.7 |
| Derivative financial instruments | 26.8 | 21.5 | |
| Other non-current financial liabilities | 1.5 | 2.7 | |
| Deferred income tax liabilities | 89.2 | 89.6 | |
| Pension plans and other long-term employee benefits | 126.1 | 124.6 | |
| Provisions for other liabilities and charges | 67.7 | 71.2 | |
| Total non-current liabilities | 1,595.5 | 1,592.3 | |
| Trade and other payables | 12 | 776.6 | 787.7 |
| Current income tax liabilities | 71.7 | 75.8 | |
| Bank borrowings | 319.7 | 128.3 | |
| Derivative financial instruments | 0.7 | 3.3 | |
| Other current financial liabilities | 33.0 | 48.8 | |
| Total current liabilities | 1,201.7 | 1,043.9 | |
| Liabilities held for sale | - | 1.0 | |
| TOTAL EQUITY AND LIABILITIES | 3,789.3 | 3,805.0 |
| (in millions of euros) | Share capital | Share premium |
Currency translation reserves |
Other reserves |
Total equity | Attributable to owners of the Company |
Attributable to non-controlling interests |
|---|---|---|---|---|---|---|---|
| December 31, 2011 | 13.3 | 147.0 | 103.9 | 820.0 | 1,084.2 | 1,065.4 | 18.8 |
| Exercise of stock options | - | 8.3 | - | - | 8.3 | 8.3 | - |
| Fair value of stock options | - | - | - | 7.3 | 7.3 | 7.3 | - |
| Dividends paid | - | - | - | (143.3) | (143.3) | (139.6) | (3.7) |
| Treasury share transactions | - | - | - | (19.7) | (19.7) | (19.7) | - |
| Additions to the scope of consolidation | - | - | - | 2.6 | 2.6 | - | 2.6 |
| Other movements | - | - | - | (0.2) | (0.2) | - | (0.2) |
| Total transactions with owners | - | 8.3 | - | (153.3) | (145.0) | (143.7) | (1.3) |
| Net profit for the period | - | - | - | 166.1 | 166.1 | 160.8 | 5.3 |
| Other comprehensive income | - | - | 37.2 | 3.7 | 40.9 | 40.5 | 0.4 |
| Total comprehensive income | - | - | 37.2 | 169.8 | 207.0 | 201.3 | 5.7 |
| June 30, 2012 | 13.3 | 155.3 | 141.1 | 836.5 | 1,146.2 | 1,123.0 | 23.2 |
| December 31, 2012 | 13.3 | 115.3 | 83.9 | 955.3 | 1,167.8 | 1,144.5 | 23.3 |
| Capital increase(1) | 39.8 | (39.8) | - | - | - | - | - |
| Exercise of stock options | 0.0 | 1.3 | - | - | 1.3 | 1.3 | - |
| Fair value of stock options | - | - | - | 10.3 | 10.3 | 10.3 | - |
| Dividends paid(2) | - | - | - | (207.5) | (207.5) | (200.4) | (7.1) |
| Treasury share transactions | - | (0.1) | - | (57.0) | (57.1) | (57.1) | - |
| Acquisition of non-controlling interests | - | - | - | (0.3) | (0.3) | (0.4) | 0.1 |
| Additions to the scope of consolidation | - | - | - | 0.6 | 0.6 | - | 0.6 |
| Other movements | - | - | - | (0.2) | (0.2) | (0.4) | 0.2 |
| Total transactions with owners | 39.8 | (38.6) | - | (254.1) | (252.9) | (246.8) | (6.2) |
| Net profit for the period | - | - | - | 176.3 | 176.3 | 170.2 | 6.1 |
| Other comprehensive income | - | - | (98.9) | (0.1) | (99.0) | (98.9) | (0.1) |
| Total comprehensive income | - | - | (98.9) | 176.2 | 77.3 | 71.3 | 6.0 |
| June 30, 2013 | 53.1 | 76.7 | (15.0) | 877.4 | 992.1 | 969.0 | 23.1 |
(1) On June 12, 2013, Bureau Veritas SA increased its share capital to EUR 53.1 million by incorporation of
EUR 39.8 million levied on the issue premium account. This was achieved by increasing the par value of each share.
(2) On June 6, 2013, Bureau Veritas SA paid out dividends to eligible shareholders in respect of the 2012 financial year. The dividend payout totaled EUR 200.4 million, corresponding to a dividend per share of EUR 1.83 (2012: EUR 1.27).
| (in millions of euros) | Note | First-half 2013 | First-half 2012 |
|---|---|---|---|
| Profit before income tax | 249.3 | 231.5 | |
| Elimination of cash flows from financing and investing activities | 31.4 | 28.2 | |
| Provisions and other non-cash items | 2.4 | (9.4) | |
| Depreciation, amortization and impairment | 73.8 | 78.8 | |
| Movements in working capital attributable to operations | 14 | (71.1) | (98.1) |
| Income tax paid | (64.3) | (87.6) | |
| Net cash generated from operating activities | 221.5 | 143.4 | |
| Acquisitions of subsidiaries | 9 | (60.2) | (216.8) |
| Proceeds from sales of subsidiaries | 9 | 4.3 | 6.4 |
| Purchases of property, plant and equipment and intangible assets | (71.8) | (56.9) | |
| Proceeds from sales of property, plant and equipment and intangible | |||
| assets | 4.7 | 4.4 | |
| Purchases of non-current financial assets | (8.8) | (15.8) | |
| Proceeds from sales of non-current financial assets | 4.1 | 3.4 | |
| Net cash used in investing activities | (127.7) | (275.3) | |
| Capital increase | 1.3 | 8.4 | |
| Purchases/sales of treasury shares | (57.1) | (20.7) | |
| Dividends paid | (207.6) | (143.9) | |
| Increase in borrowings and other debt | 258.8 | 895.0 | |
| Repayment of borrowings and other debt | (102.5) | (592.6) | |
| Interest paid | (42.9) | (22.2) | |
| Net cash generated from (used in) financing activities | (150.0) | 124.0 | |
| Impact of currency translation differences | 0.8 | 2.7 | |
| Net decrease in cash and cash equivalents | (55.4) | (5.2) | |
| Net cash and cash equivalents at beginning of period | 234.8 | 230.9 | |
| Net cash and cash equivalents at end of period | 179.4 | 225.7 | |
| Of which cash and cash equivalents | 226.1 | 245.0 | |
| Of which bank overdrafts | (46.7) | (19.3) |
Since it was formed in 1828, Bureau Veritas has developed recognized expertise for helping its clients to comply with standards and/or regulations on quality, health and safety, security, the environment and social responsibility. The Group specializes in inspecting, testing, auditing and certifying the products, assets and management systems of its clients in relation to regulatory or self-imposed standards, and subsequently issues compliance reports.
Bureau Veritas SA ("the Company") and all of its subsidiaries make up the Bureau Veritas Group ("Bureau Veritas" or "the Group").
Bureau Veritas SA is a joint stock company (société anonyme) incorporated and domiciled in France. The address of its registered office is 67-71 Boulevard du Château, 92571 Neuilly-sur-Seine, France.
At June 30, 2013, Wendel held 50.92% of the capital of Bureau Veritas and 66.16% of its theoretical voting rights.
These condensed consolidated financial statements were adopted on August 27, 2013 by the Board of Directors.
In the first half of 2013, the Group forged ahead with its external growth strategy with the purchase of:
Further details of these acquisitions along with their impact on the half-year financial statements can be found in Note 9 – Acquisitions and disposals.
In February 2013, Bureau Veritas set up a commercial paper program for EUR 300 million. This program allows the Group to optimize its management of short-term cash and limit its use of other available financing sources.
On June 6, 2013, the Group paid out dividends on eligible shares totaling EUR 200.4 million in respect of financial year 2012.
On June 12, 2013, the Company's share capital was increased to EUR 53,053,250.88 following the exercise of stock options and the fourfold increase in the par value of each share by incorporation of sums levied on the issue premium account.
On June 21, 2013, the par value of each Bureau Veritas share was divided by four. Each shareholder therefore received four new shares for every old share previously held.
The 2013 condensed half-year consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the European Union. They should be read in conjunction with the annual financial statements for the year ended December 31, 2012, which were prepared in accordance with IFRS as adopted by the European Union.
The Group applies the following standards effective for accounting periods beginning on or after January 1, 2013:
With the exception of IFRS 13, Fair Value Measurement, which has resulted in new disclosures about how the fair value of financial instruments was calculated (see Note 17 – Additional financial instrument disclosures), these new standards and interpretations do not have a material impact on the condensed consolidated financial statements at June 30, 2013.
The following standards, amendments and interpretations have been adopted by the International Accounting Standards Board (IASB) but were not applied by the Group at June 30, 2013:
Standards dealing with methods of consolidation:
■ IAS 32 (amended), Offsetting Financial Assets and Financial Liabilities
Bureau Veritas is currently analyzing the potential impacts and practical consequences of applying these new and amended standards and interpretations.
The accounting policies used to prepare the 2013 condensed half-year consolidated financial statements are consistent with those used to prepare the 2012 annual financial statements, except in the case of income tax expense, which is calculated based on a projection for the full year, and costs relating to pension plans and other long-term employee benefits.
The preparation of financial statements in compliance with IFRS requires the use of certain key accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies.
The preparation of half-year financial statements requires the use of estimates and assumptions for the same items as those described in the consolidated financial statements for the year ended December 31, 2012, with the exception of income tax expense and pension plans and other long-term employee benefits, for which the following estimation methods were applied:
Revenue, operating profit and cash flows are sensitive to seasonal fluctuations, with the Group typically recording a stronger performance in the second half of the year.
Seasonal fluctuations in revenue and operating profit essentially concern the Consumer Products, In-Service Inspection & Verification, and Certification businesses. In the Consumer Products business, seasonality arises from the fact that end-consumers tend to concentrate the bulk of their purchases in the closing stages of the calendar year. For the In-Service Inspection & Verification and Certification businesses, this phenomenon results from clients' wish to obtain certification before the end of the fiscal and corporate year (typically December 31). Profit is more sensitive to seasonal fluctuations than revenue, due to a lower absorption of fixed costs in the first half of the year.
Cash flows are affected by:
The following table provides a breakdown of revenue and operating profit by business segment:
| Revenue | Operating profit | ||||
|---|---|---|---|---|---|
| (in millions of euros) | First-half 2013 | First-half 2012 | First-half 2013 | First-half 2012 | |
| Marine | 145.3 | 160.7 | 39.5 | 47.2 | |
| Industry | 466.7 | 400.5 | 61.2 | 50.6 | |
| In-Service Inspection & Verification | 231.7 | 237.9 | 17.6 | 12.2 | |
| Construction | 213.3 | 224.1 | 26.8 | 18.5 | |
| Certification | 170.2 | 170.1 | 27.6 | 27.9 | |
| Commodities | 339.9 | 334.5 | 28.5 | 31.2 | |
| Consumer Products | 244.0 | 207.3 | 53.1 | 46.3 | |
| Government Services & International Trade | 146.4 | 126.5 | 28.8 | 25.8 | |
| Total | 1,957.5 | 1,861.6 | 283.1 | 259.7 |
Some industrial activities were reallocated to different businesses in the first half of 2013 (see the section on Results by business in section 1.3 of the 2013 half-year financial report).
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Supplies | (28.1) | (30.1) |
| Subcontracting | (142.3) | (125.0) |
| Lease payments | (62.8) | (61.0) |
| Transport and travel costs | (184.7) | (172.2) |
| Service costs rebilled to clients | 39.2 | 30.2 |
| Other external services | (181.7) | (184.3) |
| Total purchases and external charges | (560.4) | (542.4) |
| Salaries and bonuses | (795.1) | (758.6) |
| Payroll taxes | (185.2) | (167.8) |
| Other employee-related expenses | (37.7) | (27.8) |
| Total personnel costs | (1,018.0) | (954.2) |
| Provisions for receivables | (10.2) | (6.5) |
| Provisions for other liabilities and charges | 4.7 | 10.9 |
| Total (additions to)/reversals of provisions | (5.5) | 4.4 |
| Gains on disposals of property, plant and equipment and intangible assets | 3.3 | 4.0 |
| Goodwill impairment | - | (8.0) |
| Other operating income and expense | 5.4 | (0.5) |
| Total other operating income and expense, net | 8.7 | (4.5) |
Consolidated income tax expense amounted to EUR 73.0 million for first-half 2013 versus EUR 65.4 million for the same prior-year period.
The effective tax rate (ETR), corresponding to the income tax expense divided by pre-tax profit, was 29.3% for the six months to June 30, 2013 and 28.2% for the six months to June 30, 2012.
The year-on-year increase in the ETR chiefly reflects the tax losses incurred in Spain for which no deferred taxes were utilized.
At both December 31, 2012 and June 30, 2013, deferred tax assets and liabilities were offset at the level of each tax consolidation group.
Deferred taxes before offsetting at the level of taxable entities mainly relate to pension obligations, tax loss carry forwards, customer relationships and non-competition agreements acquired within the scope of business combinations, as well as provisions for disputes and accrued payables and fair value adjustments on financial instruments.
The breakdown of the tax effect on other comprehensive income is as follows:
| First-half 2013 | First-half 2012 | |||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Before tax | Tax | After tax | Before tax | Tax | After tax |
| Currency translation differences | (98.9) | - | (98.9) | 37.2 | - | 37.2 |
| Actuarial gains/(losses) | 2.3 | (0.8) | 1.5 | (0.9) | 3.1 | 2.2 |
| Cash flow hedges | (2.5) | 0.9 | (1.6) | 2.3 | (0.8) | 1.5 |
| Available-for-sale financial assets | - | - | - | - | - | - |
| Total other comprehensive income/(expense) |
(99.1) | 0.1 | (99.0) | 38.6 | 2.3 | 40.9 |
Changes in goodwill in first-half 2013
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Gross value | 1,544.2 | 1,410.9 |
| Accumulated impairment | (57.9) | (32.6) |
| Net goodwill at January 1 | 1,486.3 | 1,378.3 |
| Acquisitions of consolidated businesses | 30.6 | 178.8 |
| Disposals of consolidated businesses | - | (0.5) |
| Impairment for the period | - | (8.0) |
| Exchange differences and other movements | (59.3) | 23.6 |
| Net goodwill at June 30 | 1,457.6 | 1,572.2 |
| Gross value | 1,515.4 | 1,612.8 |
| Accumulated impairment | (57.8) | (40.6) |
| Net goodwill at June 30 | 1,457.6 | 1,572.2 |
In 2011, Bureau Veritas identified cash-generating units (CGUs) for its Construction, Certification and Industry businesses. Its In-Service Inspection & Verification business continues to be dominated by local markets and is divided into country-specific CGUs. Goodwill is allocated to:
■ groups of CGUs for the Industry, Construction, Certification and Commodities businesses;
■ CGUs for the Consumer Products and In-Service Inspection & Verification businesses.
The net carrying amount of goodwill is assessed at least yearly as part of the annual accounts closing process. At June 30, only the In-Service Inspection & Verification business in Spain was tested for impairment.
The other CGUs were not tested since no evidence of impairment arose from a comparison of revised projected earnings with forecasts.
The method used to determine the recoverable amount of a CGU is the same as that described in the consolidated financial statements for the year ended December 31, 2012, except as regards the process of preparing budgets and long-term forecasts, which are approved by management at the end of the year for all businesses.
The present value of future cash flows was revised to take into account the latest available earnings forecasts and any changes in estimates over the mid- to long-term for each CGU concerned. The growth rates used for long-term estimates remained unchanged from December 31, 2012, at 2%.
These assumptions are based on past experience and are consistent with the data used to prepare the BV2015 strategic plan, published in September 2011.
The discount rate used for the test on Spanish operations was 9.5%. This includes a specific country risk premium which takes into account Spain's general economic climate. The discount rate is a posttax rate applied to net-of-tax future cash flows before external borrowing costs.
The long-term operating margin rate for the In-Service Inspection & Verification business in Spain was 4.46%. The useful life of customer relationships carried in assets for the In-Service Inspection & Verification business was reduced from ten to six years in 2012, as the net carrying amount of these assets at the end of 2013 is estimated to be zero. The impact of this change in estimate pursuant to IAS 8 was EUR 1.1 million for the In-Service Inspection & Verification business at June 30, 2013.
The table below compares recoverable amounts to carrying amounts for the business tested for impairment at June 30, 2013:
| (in millions of euros) | ||||
|---|---|---|---|---|
| Business | Recoverable amount |
Carrying amount | Impairment | |
| In-Service Inspection & Verification | Spain | 32.1 | 31.5 | 0 |
The table below shows the amounts of impairment on all tested intangible assets resulting from the sensitivity of the Group's In-Service Inspection & Verification business in Spain to a one-point rise in the discount rate and a one-point fall in the long-term growth rate and margin:
(in millions of euros)
| Business | 1 point rise in | 1 point fall | 1 point fall in | |
|---|---|---|---|---|
| discount rate | in growth rate | margin rate | ||
| In-Service Inspection & Verification | Spain | (3.6) | (2.6) | (3.4) |
NB: Theoretical write-down of all intangible assets subject to sensitivity tests in millions of euros based on changes in one input only at any one time.
The tables below provide details of acquisitions in first-half 2013.
| Month | Company | Business | Country |
|---|---|---|---|
| April | LVQ-WP Werkstoffprüfung GmbH | Industry | Germany |
LVQ-WP is a German group specializing in non-destructive testing and industrial inspection services. Founded in 1994, LVQ-WP is headquartered in Mülheim in the Rhein-Ruhr area, which is a strategic industrial cluster in Germany, and provides services to the power, processing and manufacturing sectors in Germany and Eastern Europe. LVQ-WP has 120 employees and its 2012 revenues totaled around EUR 9 million.
| Month | Company | Business | % acquired | Country |
|---|---|---|---|---|
| January | 7Layers | Consumer Products | 97% | Germany |
7Layers is a German company specialized in mobile and wireless electronics testing and certification. Based in Ratingen, Germany, 7Layers boasts engineering centers and accredited laboratories in Germany, China, South Korea and the United States, as well as representative offices in Japan, Taiwan and southern Europe. The company has 220 employees and had estimated revenue of EUR 24 million in 2012.
| Month | Company | Business | BV interest | Country |
|---|---|---|---|---|
| March | Inspectorate Italia Srl | Commodities | from 90% to 100% Italy |
The table below was prepared before completing the final accounting for companies acquired in the first half of 2013.
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Purchase price of acquisitions | 49.8 | 275.6 |
| Acquisition of non-controlling interests | (0.3) | |
| Cost of assets and liabilities acquired/assumed | 49.5 | 275.6 |
| Assets and liabilities acquired/assumed | Carrying amount |
Fair value | Carrying amount |
Fair value |
|---|---|---|---|---|
| Non-current assets | 6.9 | 21.7 | 29.7 | 126.2 |
| Current assets (excluding cash and cash equivalents) | 9.4 | 9.4 | 52.6 | 52.6 |
| Current liabilities (excluding borrowings) | (8.1) | (8.1) | (48.2) | (48.2) |
| Non-current liabilities (excluding borrowings) | - | (5.1) | (1.0) | (30.0) |
| Borrowings | (3.0) | (3.0) | (12.3) | (12.3) |
| Non-controlling interests acquired | (0.6) | (0.6) | (2.6) | (2.6) |
| Cash and cash equivalents of acquired companies | 4.6 | 4.6 | 11.0 | 11.0 |
| Total assets and liabilities acquired/assumed | 9.2 | 18.9 | 29.3 | 96.8 |
| Goodwill | 30.6 | 178.8 |
The following table shows the goodwill and customer relationships arising on these acquisitions in the period:
| (in millions of euros) | 7Layers | LVQ | Total |
|---|---|---|---|
| Goodwill | 26.5 | 4.1 | 30.6 |
| Customer relationships | 13.0 | 1.8 | 14.8 |
The residual unallocated goodwill is chiefly attributable to the human capital of the companies acquired and the synergies expected to result from these acquisitions.
The Group's acquisitions were paid exclusively in cash.
The impact of these acquisitions on cash and cash equivalents for the period was as follows:
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Purchase price of acquisitions | (49.8) | (275.6) |
| Cash and cash equivalents of acquired companies | 4.6 | 11.0 |
| Contingent consideration outstanding at June 30 in respect of acquisitions in first-half 2013 |
3.5 | 52.4 |
| Purchase price paid in relation to acquisitions in prior periods | (16.5) | (0.9) |
| Impact of acquisitions on cash and cash equivalents | (58.2) | (213.1) |
The amount of EUR 60.2 million shown on the "Acquisitions of subsidiaries" line of the consolidated statement of cash flows includes EUR 2.0 million in acquisition-related fees.
Disposals made in the first half of 2013 concern the assets and liabilities classified as held for sale at December 31, 2012:
■ In the Construction business, mainly in Spain, the Paymacotas subsidiaries managing Infrastructure activities were sold on February 21, 2013, while in the In-Service Inspection & Verification business, the subsidiary Analytical Solutions, which manages Environmental operations in Brazil, was sold on January 11, 2013.
These disposals had a positive EUR 3.1 million impact on the income statement in first-half 2013.
Contingent consideration for acquisitions carried out prior to January 1, 2013 expired during the first half of 2013. This had a positive EUR 2.2 million impact on the income statement in first-half 2013.
On June 12, 2013, Bureau Veritas SA increased its share capital to EUR 53.1 million by incorporation of EUR 39.8 million levied on the issue premium account. This was achieved by increasing the par value of each share to EUR 0.48.
On June 21, 2013, Bureau Veritas SA divided the par value of the Bureau Veritas share by four, thereby increasing the number of shares comprising the share capital fourfold. Each shareholder received four new shares for every old share previously held. Following this operation, the number of shares stands at 442,110,424, each with a par value of EUR 0.12.
Following the exercise of 195,880 stock options (new share equivalents), the Group carried out a share capital increase representing a share premium of EUR 1.3 million.
The total number of shares comprising the share capital was 442,190,424 at June 30, 2013 and 110,498,636 at December 31, 2012 (before the four-for-one stock split).
All shares have a par value of EUR 0.12 and are fully paid up.
At June 30, 2013, the Group owned 4,417,598 of its own shares. The carrying amount of these shares was deducted from equity.
No new stock option or performance share plans were awarded in the first half of 2013. The net sharebased payment expense recognized by the Group in the period was EUR 8.9 million (first-half 2012: EUR 6.2 million).
The fair value of stock appreciation rights (SARs) granted further to the Shareholders' Meeting of June 18, 2007 and the Management Board's decision of December 13, 2007 was revised based on the Black-Scholes option pricing model. The fair value came out at EUR 15.43 for each SAR, based on the following key assumptions:
The four-for-one stock split resulted in a fourfold increase in the number of rights.
| (in millions of euros) | Total | Due within 1 year |
Due between 1 and 2 years |
Due between 2 and 5 years |
Due beyond 5 years |
|---|---|---|---|---|---|
| At December 31, 2012 | |||||
| Bank borrowings (long-term portion) | 782.7 | - | - | 164.2 | 618.5 |
| Bond issue | 500.0 | - | - | 500.0 | - |
| Other non-current financial liabilities | 2.7 | - | 2.7 | - | - |
| Non-current financial liabilities | 1,285.4 | - | 2.7 | 664.2 | 618.5 |
| Bank borrowings (short-term portion) | 119.6 | 119.6 | |||
| Bank overdrafts | 8.7 | 8.7 | |||
| Other current financial liabilities | 48.8 | 48.8 | |||
| Current financial liabilities | 177.1 | 177.1 | |||
| At June 30, 2013 | |||||
| Bank borrowings (long-term portion) | 784.3 | - | 57.4 | 109.6 | 617.3 |
| Bond issue | 500.0 | - | - | 500.0 | - |
| Other non-current financial liabilities | 1.5 | - | 1.5 | - | - |
| Non-current financial liabilities | 1,285.8 | - | 58.9 | 609.6 | 617.3 |
| Bank borrowings (short-term portion) | 273.0 | 273.0 | |||
| Bank overdrafts | 46.7 | 46.7 | |||
| Other current financial liabilities | 33.0 | 33.0 | |||
| Current financial liabilities | 352.7 | 352.7 |
| Total | Due within Due between 1 year 1 and 2 years |
Due between 2 and 5 years |
Due beyond 5 years |
||
|---|---|---|---|---|---|
| Estimated interest payable on bank borrowings | 303.1 | 58.1 | 58.5 | 145.7 | 40.8 |
| Impact of cash flow hedges (principal and interest) | 5.1 | (0.1) | (0.1) | (0.2) | 5.4 |
The EUR 192.9 million increase in debt between December 31, 2012 and June 30, 2013 chiefly reflects financing for acquisitions carried out in the first half of the year.
Future interest payments due were calculated by reference to the contractual maturity of the 2012 Syndicated Loan, i.e., July 2017.
The Group's financing consists of loans contracted with banks and other parties.
At June 30, 2013, the 2008 US Private Placement facility (USPP 2008), the 2010 US Private Placement facility (USPP 2010), the 2010 French Private Placement facility (French PP 2010), the 2011 US Private Placement facility (USPP 2011), the Schuldschein facility (SSD), the inaugural May 2012 bond issue, the 2012 Syndicated Loan and the 2013 commercial paper program accounted for virtually all of the Group's debt.
The amounts still available under these facilities are detailed below.
An amount of EUR 50 million has been drawn down from the French PP 2010 facility, with EUR 100 million still available.
Half of the available unconfirmed funds (USD 100 million) have been drawn down from the USPP 2011 facility.
An amount of EUR 110 million has been drawn down from the 2012 Syndicated Loan of EUR 450 million, leaving a total of EUR 340 million undrawn under the facility at June 30, 2013. A total amount of EUR 214.0 million is available under this facility after taking into account the EUR 126.0 million drawn down from the commercial paper program.
At June 30, 2013, the same financial covenants were in force as at December 31, 2012. The Group complied with all such covenants at end-June 2013 and end-December 2012.
Short- and long-term bank borrowings can be analyzed as follows by currency (taking into account currency hedging):
| Currency (in millions of euros) | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|
| US dollar (USD) | 280.8 | 232.7 |
| Euro (EUR) | 1,266.7 | 1,162.4 |
| Other currencies | 9.8 | 7.2 |
| Total | 1,557.3 | 1,402.3 |
The USPP debt whose tranches in pounds sterling were converted into euros using a currency swap is included on the "Euro (EUR)" line.
At June 30, 2013, gross debt can be analyzed as follows:
| (in millions of euros) | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|
| Fixed rate | 1,256.8 | 1,140.4 |
| Floating rate | 300.5 | 261.9 |
| Total | 1,557.3 | 1,402.3 |
The contractual repricing dates for virtually all floating-rate borrowings are within six months. The interest rates are referenced to Euribor.
The interest rates applicable to the Group's floating-rate borrowings and the margins at the end of the reporting period are detailed below.
| Currency | June 30, 2013 | Dec. 31, 2012 |
|---|---|---|
| US dollar (USD) | - | 0.54% |
| Euro (EUR) | 1.67% | 1.90% |
Effective interest rates approximate nominal rates for all financing programs.
Analyses of sensitivity to changes in interest and exchange rates as defined by IFRS 7 are provided in Note 17 – Additional financial instrument disclosures.
The amount and maturity of guarantees given can be analyzed as follows:
| (in millions of euros) | Total | Due within 1 year |
Due between 1 and 5 years |
Due beyond 5 years |
|---|---|---|---|---|
| At June 30, 2013 | 218.8 | 94.8 | 106.3 | 17.7 |
| At December 31, 2012 | 196.2 | 67.5 | 119.5 | 9.2 |
Guarantees given include bank guarantees and parent company guarantees.
At June 30, 2013, the Group considered that the risk of a cash outflow on these guarantees was low. Accordingly, no provisions were recorded.
Provisions for other liabilities and charges recorded in the statement of financial position at June 30, 2013 take into account the major claims discussed in section 1.5 – Description of the main risks and uncertainties for second-half 2013.
Based on the insurance coverage in place and/or amounts currently provisioned, and in light of the latest available information, Bureau Veritas does not believe that these disputes will have a material adverse impact on its consolidated financial statements.
There are no other government, administrative, legal or arbitration proceedings or investigations (including any proceedings of which the Company is aware that are pending or with which the Group is threatened) that could have, or have had over the last six months, a material impact on the Group's financial position or profitability.
Movements in working capital requirement attributable to operations totaled a negative EUR 71.1 million in first-half 2013 and a negative EUR 98.1 million in first-half 2012 and can be analyzed as follows:
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Trade receivables | (73.2) | (65.7) |
| Trade payables | 16.7 | 6.8 |
| Other receivables and payables | (14.6) | (39.2) |
| Movements in working capital requirement attributable to operations | (71.1) | (98.1) |
Details of the calculation of the weighted average number of ordinary and diluted shares outstanding used to compute basic and diluted earnings per share are provided below.
Following the four-for-one stock split, the number of shares used to calculate basic and diluted earnings per share was determined as though the split had been effective in all periods presented, i.e., first-half 2013 and first-half 2012. This ensures a meaningful comparison between the two periods.
| (in thousands of shares) | First-half 2013 | First-half 2012 |
|---|---|---|
| Number of shares comprising the share capital at January 1 | 441,995 | 442,104 |
| Number of shares issued during the period (accrual basis) | ||
| Performance share grants | - | - |
| Exercise of stock options | 70 | 928 |
| Number of treasury shares | (3,139) | (2,360) |
| Weighted average number of ordinary shares in issue | 438,926 | 440,672 |
| Dilutive impact | ||
| Performance share grants | 5,161 | 4,828 |
| Stock options | 2,576 | 2,336 |
| Weighted average number of shares used to calculate diluted earnings per share |
446,663 | 447,836 |
Basic earnings per share is calculated by dividing net profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period.
| First-half 2013 | First-half 2012 | |
|---|---|---|
| Net profit attributable to owners of the Company (in thousands of euros) | 170,163 | 160,827 |
| Weighted average number of ordinary shares outstanding (in thousands) | 438,926 | 440,672 |
| Basic earnings per share (in euros) | 0.39 | 0.36 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to reflect the conversion of dilutive potential ordinary shares.
The Company has two categories of dilutive potential ordinary shares: stock options and performance shares.
For stock options, a calculation is made in order to determine the number of shares that could have been issued based on the exercise price and the fair value of the rights attached to the outstanding stock options. The number of shares calculated as above is compared with the number of shares that would have been issued if the stock options had been exercised.
Performance share grants are potential ordinary shares whose issue is contingent on beneficiaries completing a minimum period of service as well as meeting a series of performance targets.
| First-half 2013 | First-half 2012 | |
|---|---|---|
| Net profit attributable to owners of the Company (in thousands of euros) | 170,163 | 160,827 |
| Weighted average number of ordinary shares used to calculate diluted earnings per share (in thousands) |
446,663 | 447,836 |
| Diluted earnings per share (in euros) | 0.38 | 0.36 |
On June 6, 2013, Bureau Veritas SA paid out dividends to eligible shareholders in respect of the 2012 financial year. The dividend payout totaled EUR 200.4 million, corresponding to a dividend per share of EUR 1.83 (2012: EUR 1.27).
The table below presents the carrying amount, valuation method and fair value of financial instruments classified in each IAS 39 category at the end of each reporting period:
| IAS 39 category |
Carrying amount |
IAS 39 measurement method | Fair value | ||||
|---|---|---|---|---|---|---|---|
| (in millions of euros) | Amortized cost |
Cost | Fair value through equity |
Fair value through profit or loss |
|||
| At June 30, 2013 | |||||||
| FINANCIAL ASSETS | |||||||
| Investments in non-consolidated companies | FVPL | 1.6 | - | - | - | 1.6 | 1.6 |
| Other non-current financial assets | HTM | 48.6 | 48.6 | - | - | - | 48.6 |
| Trade and other receivables | LR | 1,097.8 | 1,097.8 | - | - | - | 1,097.8 |
| Current financial assets | LR | 3.9 | 3.9 | - | - | - | 3.9 |
| Current financial assets | FVPL | 2.1 | - | - | - | 2.1 | 2.1 |
| Derivative financial instruments | FVPL/FVE | 3.3 | - | - | 1.8 | 1.5 | 3.3 |
| Cash and cash equivalents | FVPL | 226.1 | - | - | - | 226.1 | 226.1 |
| FINANCIAL LIABILITIES | |||||||
| Bank borrowings | AC | 1,557.3 | 1,557.3 | - | - | - | 1,605.7 |
| Bank overdrafts | FVPL | 46.7 | - | - | - | 46.7 | 46.7 |
| Other non-current financial liabilities | AC | 1.5 | 1.5 | - | - | - | 1.5 |
| Trade and other payables | AC | 776.6 | 776.6 | - | - | - | 776.6 |
| Current financial liabilities | AC | 33.0 | 33.0 | - | - | - | 33.0 |
| Derivative financial instruments | FVPL/FVE | 27.5 | - | - | 26.8 | 0.7 | 27.5 |
| At December 31, 2012 | |||||||
| FINANCIAL ASSETS | |||||||
| Investments in non-consolidated companies | FVPL | 1.8 | - | - | - | 1.8 | 1.8 |
| Other non-current financial assets | HTM | 43.9 | 43.9 | - | - | - | 45.7 |
| Trade and other receivables | LR | 1,021.3 | 1,021.3 | - | - | - | 1,021.3 |
| Current financial assets | LR | 5.5 | 5.5 | - | - | - | 5.5 |
| Current financial assets | FVPL | 2.3 | - | - | - | 2.3 | 2.3 |
| Derivative financial instruments | FVPL/FVE | 25.0 | - | - | 22.6 | 2.4 | 25.0 |
| Cash and cash equivalents | FVPL | 243.5 | - | - | - | 243.5 | 243.5 |
| FINANCIAL LIABILITIES | |||||||
| Bank borrowings | AC | 1,402.3 | 1,402.3 | - | - | - | 1,477.8 |
| Bank overdrafts | FVPL | 8.7 | - | - | - | 8.7 | 8.7 |
| Other non-current financial liabilities | AC | 2.7 | 2.7 | - | - | - | 2.7 |
| Trade and other payables | AC | 787.7 | 787.7 | - | - | - | 787.7 |
| Current financial liabilities | AC | 48.9 | 48.9 | - | - | - | 48.9 |
| Derivative financial instruments | FVPL/FVE | 24.8 | - | - | 21.5 | 3.3 | 24.8 |
NB: The following abbreviations are used to represent IAS 39 financial instrument categories:
With the exception of the items listed below, the Group considers the carrying amount of the financial instruments reported on the statement of financial position to approximate their fair value.
The fair value of current financial instruments such as SICAV mutual funds is their last known net asset value (level 1 in the fair value hierarchy).
The fair value of cash, cash equivalents and bank overdrafts is their face value in euros or equivalent value in euros translated at the closing exchange rate. Since these assets and liabilities are very short-term items, the Group considers that their fair value approximates their carrying amount.
The fair value of each of the Group's fixed-rate facilities (USPP 2008, USPP 2010, USPP 2011, SSD and the bond issue) is determined based on the present value of future cash flows discounted at the appropriate market rate for the currency concerned (euros, pounds sterling or US dollars) at the end of the reporting period, adjusted to reflect the Group's own credit risk. The fair value of the Group's floating-rate facilities (2012 Syndicated Loan, French PP 2010, and certain tranches of the SSD facility) approximates their carrying amount. This corresponds to level 2 in the fair value hierarchy (fair value based on observable market inputs).
The fair value of exchange derivatives is equal to the difference between the present value of the amount sold or purchased in a given currency (translated into euros at the futures rate) and the amount sold or purchased in this same currency (translated into euros at the closing rate).
The fair value of currency derivatives (mainly in pounds sterling) is determined by discounting the present value of future cash flows (interest receivable in pounds sterling and payable in euros, along with the future purchase of pounds sterling against euros) over the remaining term of the instrument at the end of the reporting period. The discount rates used are the market rates that correspond to the maturity of the cash flows. The present value of the cash flows denominated in pounds sterling is translated into euros at the closing exchange rate.
The fair value of exchange derivatives and other currency instruments is calculated using valuation techniques with observable market inputs (level 2 of the fair value hierarchy) and generally accepted pricing models.
The nature of the gains and losses arising on each financial instrument category can be analyzed as follows:
| Adjustments for | Net | Net | ||||||
|---|---|---|---|---|---|---|---|---|
| (in millions of euros) | Interest | Fair value | Amortized cost |
Exchange differences |
Accumulated impairment |
gains/(losses) in first-half 2013 |
gains/(losses) in first-half 2012 |
|
| Held-to-maturity assets | HTM | - | - | - | - | - | - | - |
| Loans and receivables | LR | - | - | - | 0.8 | - | 0.8 | (2.1) |
| Financial assets and liabilities at fair value through profit or loss |
FVPL | 0.6 | 1.5 | - | - | - | 2.1 | 3.8 |
| Debt carried at amortized cost | AC | (32.2) | - | - | (2.0) | - | (34.2) | (25.6) |
| Total | (31.6) | 1.5 | - | (1.2) | - | (31.3) | (23.9) |
Due to the international scope of its operations, the Group is exposed to currency risk on its use of several different currencies.
In general, hedges arise naturally with the matching of income and expenses in most countries in which the Group operates, since services are provided locally. The Group's exposure to currency risk arising on transactions carried out in foreign currencies is therefore relatively low.
Over two-thirds of the Group's revenue is generated in currencies other than the euro, including 12% in US dollars, 6% in Australian dollars, 5% in Chinese yuan, 4% in Brazilian real and 4% in Hong Kong dollars. Taken individually, other currencies do not represent more than 5% of the Group's revenue. The Group's evolving currency mix reflects the fast-paced development of its activities outside the eurozone, in Asia and particularly in US dollars in the United States and in other dollar-linked currencies. As the Group's presentation currency is the euro, it must convert into euros any assets, liabilities, income and expenses denominated in other currencies at the time of preparing its financial statements. The results of the Group's foreign currency operations are consolidated in its income statement after being converted into euros using the average exchange rate for the period. Assets and liabilities are converted at the period-end rate. As a result, changes in the value of the euro against other currencies affect the corresponding amounts in the consolidated financial statements, even if the value of the items concerned remains unchanged in their original currencies.
The impact of a 1% rise or fall in the euro against a number of different currencies is described below:
If it deems appropriate, the Group may take out currency hedges to protect itself against the impact of currency risk on its income statement.
The table below shows the results of the sensitivity analysis for financial instruments exposed to currency risk on the Group's main foreign currencies (euros, US dollars and pounds sterling) at June 30, 2013:
| Non-functional currency | |||
|---|---|---|---|
| (in millions of euros) | USD | EUR | GBP |
| Financial liabilities | (666.4) | (51.4) | (127.2) |
| Financial assets | 746.7 | 63.3 | 69.4 |
| Net position (assets - liabilities) before hedging | 80.3 | 12.0 | (57.7) |
| Currency hedging instruments | 24.6 | 57.9 | |
| Net position (assets - liabilities) after hedging | 104.9 | 12.0 | 0.2 |
| Impact of a 1% rise in exchange rates | |||
| On equity | - | - | (0.4) |
| On net profit before income tax | 1.0 | 0.1 | 0.0 |
| Impact of a 1% fall in exchange rates | |||
| On equity | - | - | 0.5 |
| On net profit before income tax | (1.0) | (0.1) | (0.0) |
The Group is exposed to currency risk inherent to financial instruments denominated in foreign currencies (i.e., currencies other than the functional currency of each Group entity). The sensitivity analysis presented above shows the impact that a significant change in the value of the euro, US dollar and pound sterling would have on earnings in a non-functional currency. The analysis for the US dollar does not include entities whose functional currency is strongly correlated to the US dollar, for example Group entities based in Hong Kong. The impact of a 1% change in exchange rates on hedges is shown in the table above. Financial instruments denominated in foreign currencies which are included in the sensitivity analysis relate to key monetary statement of financial position items and in particular, current and non-current financial assets, trade and other receivables, cash and cash equivalents, current and non-current financial liabilities, current liabilities, and trade and other payables.
The Group's interest rate risk arises primarily from assets and liabilities bearing interest at floating rates. The Group seeks to limit its exposure to a rise in interest rates through the use of interest rate instruments where appropriate.
Interest rate exposure is monitored on a monthly basis. The Group continually analyses the level of hedges put in place and ensures that they are appropriate for the related underlying exposure. The Group's policy is to prevent more than 60% of its consolidated net debt being exposed to a rise in interest rates over a long period (more than six months). The Group may therefore enter into other swaps, collars or similar instruments for this purpose. No financial instruments are contracted for speculative purposes.
The table below shows the maturity of fixed- and floating-rate financial assets and liabilities at June 30, 2013:
| (in millions of euros) | Due within 1 year |
Due between 1 and 5 years |
Due beyond 5 years |
Total June 30, 2013 |
|---|---|---|---|---|
| Fixed-rate bank borrowings | (123.9) | (535.6) | (597.3) | (1,256.8) |
| Floating-rate bank borrowings | (149.1) | (131.4) | (20.0) | (300.5) |
| Bank overdrafts | (46.7) | (46.7) | ||
| TOTAL - Financial liabilities | (319.7) | (667.0) | (617.3) | (1,604.0) |
| TOTAL - Financial assets | 226.1 | 226.1 | ||
| Floating-rate net position (assets - liabilities) before hedging | 30.3 | (131.4) | (20.0) | (121.1) |
| Interest rate hedges | ||||
| Floating-rate net position (assets - liabilities) after hedging | 30.3 | (131.4) | (20.0) | (121.1) |
| Impact of a 1% rise in interest rates | ||||
| On equity | ||||
| On net profit before income tax | (1.2) | |||
| Impact of a 1% fall in interest rates | ||||
| On equity | ||||
| On net profit before income tax | 1.2 |
At June 30, 2013, the Group considers that a 1% rise in short-term interest rates across all currencies would lead to an increase of around EUR 1.2 million in interest payable.
Debts maturing after five years, representing a total amount of EUR 617.3 million, are essentially at fixed rates. At June 30, 2013, 78% of the Group's gross debt was at fixed rates.
Parties related to the Company are its majority shareholder Wendel as well as the Chairman of the Board of Directors and the Chief Executive Officer (corporate officers of the Company).
Amounts recognized with respect to compensation paid in France (fixed and variable portions) and long-term compensation plans (stock option and performance share grants) are as follows:
| (in millions of euros) | First-half 2013 | First-half 2012 |
|---|---|---|
| Wages and salaries | 1.5 | 1.1 |
| Stock options | 0.3 | 0.2 |
| Performance share grants | 0.6 | 0.3 |
| Total | 2.4 | 1.6 |
The amounts in the above table reflect the fair value for accounting purposes of options and shares in accordance with IFRS 2. Consequently, they do not represent the actual amounts that may be paid if any stock options are exercised or any performance shares vest. Stock options and performance shares require a minimum period of service and are also subject to a number of performance conditions.
Shares are measured at fair value as calculated under the Black-Scholes model rather than based on the compensation effectively received. The performance shares require a minimum period of service and are also subject to a number of performance conditions.
Key management personnel held a total of 896,580 stock options at June 30, 2013 (June 30, 2012: 660,000), with a fair value per share of EUR 1.88 (June 30, 2012: EUR 2.29).
The number of performance shares granted to executive corporate officers amounted to 300,000 at June 30, 2013 and 140,000 at June 30, 2012.
On July 22, 2013, the Board of Directors decided to award stock purchase options and performance shares to 578 Group employees including the Chief Executive Officer, corresponding to a total of 3,387,500 shares (2,146,700 performance shares and 1,240,800 stock purchase options), or 0.77% of the share capital.
The purchase price for the stock options was set at EUR 21.01, reflecting the average undiscounted quoted opening price for the Company's shares on the 20 trading days preceding the grant date.
The stock purchase options and performance shares awarded are subject to a number of performance conditions and also require a minimum period of service.
At the beginning of the third quarter of 2013, Bureau Veritas completed the acquisition of Sievert, a leading provider of non-destructive testing and industrial inspection services in India, South-East Asia and the Middle East. The company has 1,600 employees and reported revenue of USD 42 million for the year ended March 31, 2013.
On August 21, 2013, Bureau Veritas announced the acquisition of Kanagawa Building Inspection (KBI), a Japanese company specializing in building inspection and certification services. KBI has a broad customer base of individual home builders. It primarily provides conformity assessment services for buildings, ranging from design review to building inspection. Its services also cover housing quality assurance and structural assessment calculations. KBI has the necessary accreditations to provide these services, which are required for verifying the quality of buildings and their conformity with national regulations.
KBI has 146 employees located in five different offices in the Greater Tokyo Area. For the year ended March 31, 2013 it generated revenue of around EUR 7.5 million (JPY 913 million).
In Japan, Bureau Veritas already has a significant presence in the construction business through the approval of plans in compliance with urbanism and construction codes. The acquisition of KBI enables Bureau Veritas to extend its geographic presence in the country, to strengthen its client base and to increase its market share in building conformity assessment services.
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Algeria | BV Algeria | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Angola | BV Angola | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | BIVAC Argentina | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | BV Argentina | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | BVQI Argentina | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | Servicios Internacionales Cesmec SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | Inspectorate de Argentina SRL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | ACSA Loss Control SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Argentina | Acme Analytical Lab. (Argentina) SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas Australia Pty Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas HSE | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas Asset Integrity & Reliability Services Australia |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas Risk & Safety Pty Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas Asset Integrity & Reliability Services |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Bureau Veritas International Trade | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | CCI Holdings | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Amdel | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Amdel Holdings | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | IML | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Ultra Trace | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | LabMark Pty Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Amdel Holdings Finance | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Inspectorate Australia Holdings Pty Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Australia | Leonora Laverton Assay Laboratories Pty Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Austria | Bureau Veritas Certification Austria (formerly Zertiefizierung Bau) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Azerbaijan | BV Azeri | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Azerbaijan | Inspectorate International Azeri LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bahamas | Inspectorate Bahamas Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bahrain | Inspectorate International (Bahrain) Ltd WLL |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Bahrain | BV SA – Bahrain | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Bangladesh | BVCPS Bangladesh | S | 98.00 | 98.00 | 98.00 | 98.00 |
| Bangladesh | BV CPS Chittagong Ltd | S | 99.8 | 99.8 | 99.8 | 99.8 |
| Bangladesh | BIVAC Bangladesh | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bangladesh | BV Bangladesh Private Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belarus | BV Belarus Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | BV Certification Belgium | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | AIBV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | BV Marine Belgium & Luxembourg | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | Inspectorate Ghent NV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | Gordinne General International Surveyors NV |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | Inspectorate Antwerp NV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | Unicar Benelux SPRL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | Euroclass NV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Belgium | BV SA – Belgium | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Benin | Société d'exploitation du guichet unique du Bénin (SEGUB) |
S | 100.00 | 90.00 | 100.00 | 90.00 |
| Benin | BIVAC Benin | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Benin | BV Benin | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bosnia | BV Sarajevo | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bosnia | Inspectorate Balkan DOO | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brazil | BV do Brasil | S | 99.96 | 99.96 | 99.96 | 99.96 |
| Brazil | Autoreg | S | 100.00 | 99.96 | 100.00 | 99.96 |
| Brazil | Autovis | S | 100.00 | 99.96 | 100.00 | 99.96 |
| Brazil | Tecnitas do Brasil | S | 100.00 | 99.99 | 100.00 | 99.99 |
| Brazil | BVQI do Brasil | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brazil | Loss Control do Brasil S/C Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brazil | Inspectorate do Brasil Inspeçöes Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brazil | Acme Analytical Laboratorios Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brazil | TH Hill do Brasil Servicos, Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Brunei | BV SA – Brunei | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Bulgaria | BV Varna | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Bulgaria | Inspectorate Bulgaria EOOD | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Burkina Faso | Bureau Veritas Burkina S.A.U | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Burma | Myanmar BV Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cambodia | Bureau Veritas (Cambodia) Limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cameroon | BV Douala | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | BV Canada | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | BV Certification Canada | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | BV I&F Canada | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | BV Ontario | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | RM Inspect Canada Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | Chas Martin Canada Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | Inspectorate Exploration and Mining Services Limited |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | Acme Analytical Laboratories Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | Acme Analytical (Labs.) Vancouver Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Canada | TH Hill Canada Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cayman Islands | Inspectorate Group Holdings Limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Central African Republic |
BIVAC RCA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chad | BV Chad | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chad | BIVAC Chad | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | BV Chile | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | BVQI Chile | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | BV Chile Capacitacion Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | ECA Chile Formación | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | ECA Control y Asesoramiento (formerly ECA Chile) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | Cesmec Chile | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | Geoanalitica | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | Servicios de Inspección Inspectorate Chile Ltda |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | Acme Analytical Laboratories SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Chile | Panamerica de leasing | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BVCPS Jiangsu Co (JV) | S | 60.00 | 51.00 | 60.00 | 51.00 |
| China | Beijing Huaxia Supervision Co | S | 70.00 | 70.00 | 70.00 | 70.00 |
| China | NDT Technology Holding | S | 71.00 | 71.00 | 71.00 | 71.00 |
| China | BV-Fairweather Inspection & Consultants |
S | 100.00 | 71.00 | 100.00 | 71.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| China | BV Bosun – Safety Technology | S | 90.00 | 71.10 | 90.00 | 71.10 |
| China | Safety Technology Holding | S | 79.00 | 79.00 | 79.00 | 79.00 |
| China | BV Shenzen | S | 80.00 | 80.00 | 80.00 | 80.00 |
| China | BVCPS Shanghai (formerly MTL Shanghai) |
S | 85.00 | 85.00 | 85.00 | 85.00 |
| China | Inspectorate (Shanghai) Ltd | S | 85.00 | 85.00 | 85.00 | 85.00 |
| China | Bureau Veritas Hong Kong | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BV Consulting Shanghai | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | LCIE China | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BV Certification Hong Kong | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BV Certification China (formerly Falide International Quality Assessment) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BIVAC Shanghai | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BV HK Ltd branch Marine | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BVCPS HK (mainly Taiwan branch) | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | Tecnitas Far East | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | Guangzhou BVCPS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | Bureau Veritas Marine China | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | ADT Shangai | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | NS Technology | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | BV Quality Services Shanghai | S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | Shanghai Davis Testing Technology Co. Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| China | Aces Champion Group Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | BV Colombia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | BVQI Colombia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | ECA Colombia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | Inspectorate Colombia Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | Acme Analytical Lab. Colombia S.A.S. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | TH Hill Colombia, branch | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Colombia | Tecnicontrol SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Congo | BV Congo | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Congo | BIVAC Congo | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Costa Rica | Inspectorate Costa Rica SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cote d'Ivoire | BIVAC Scan CI | S | 100.00 | 99.99 | 100.00 | 99.99 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Cote d'Ivoire | BV Côte d'Ivoire | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cote d'Ivoire | BIVAC Cote d'Ivoire | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cote d'Ivoire | Bureau Veritas Mineral Laboratories | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Croatia | BV Croatia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Croatia | Inspectorate Croatia Ltd Doo | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Cuba | BV SA – Cuba | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Czech Republic | BV Czech Republic | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Democratic Republic of Congo |
BIVAC RDC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Denmark | BV Certification Denmark | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Denmark | BV HSE Denmark | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Denmark | BV SA – Denmark | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Dominican Republic |
Inspectorate Dominicana | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Dominican Republic |
Acme Analytical Laboratories SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Dubai | Inspectorate International Ltd (Dubai branch) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ecuador | BIVAC Ecuador | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ecuador | BV Ecuador | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ecuador | Inspectorate del Ecuador SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Egypt | BV Egypt | S | 90.00 | 90.00 | 90.00 | 90.00 |
| Egypt | Watson Gray limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Egypt | BV SA – Egypt | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Equatorial Guinea |
BV Equatorial Guinea | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Estonia | BV Estonia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Estonia | Inspectorate Estonia AS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Finland | Unicar Finland OY | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Finland | BV SA – Finland | B | 100.00 | 100.00 | 100.00 | 100.00 |
| France | GIE Sécurité Aviation Civile - France | G | 90.00 | 90.00 | 90.00 | 90.00 |
| France | Guichet unique commerce extérieur Bénin (GUCEB) |
S | 90.00 | 90.00 | 90.00 | 90.00 |
| France | Coreste | S | 99.60 | 99.60 | 99.60 | 99.60 |
| France | BVCPS France | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BIVAC International | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV Certification France | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV Certification Holding | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| France | CEP Industrie | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV International | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV France | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Sedhyca | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Tecnitas | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | LCIE France | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | SSICOOR | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | ECS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV Diagnostic SAS (formerly Arcalia) | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Ecalis | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Laboratoires | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | CODDE | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Logistique (formerly BV Opérations France) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Infrastructures (formerly Payma Cotas France) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | SAS Halec | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Inspectorate SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BIVAC MALI | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Arcalia France | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Océanic Developpement SAS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Medi-Qual | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | AMCR | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | ACR Méditerranée | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | ACR Atlantique | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Unicar France SAS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Unicar Group SAS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Holding 1 | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Holding 2 | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | Bureau Veritas Holding 3 | S | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV SA – France | B | 100.00 | 100.00 | 100.00 | 100.00 |
| France | BV SA Mayotte | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Fujairah | Inspectorate International Ltd (Fujairah branch) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Gabon | BV Gabon | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Georgia | Inspectorate Georgia LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | One Tüv | S | 66.67 | 66.67 | 66.67 | 66.67 |
| Germany | Wireless IP | S | 100.00 | 96.50 | ||
| Germany | 7Layers Germany AG | S | 100.00 | 96.59 | ||
| Germany | BV Certification Germany | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | BVCPS Germany | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | BV Construction Services | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | BV Germany Holding GmbH | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Bureau Veritas Industry Services | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Inspectorate Germany i.L. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Inspectorate Deutschland GmbH | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Pockrandt GmbH Technische Qualitatskontrolle |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Technitas Central Europe | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | Unicar GmbH | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Germany | LVQ Werkstoffprüfung | S | 100.00 | 100.00 | ||
| Germany | LVQ Prülabor | S | 100.00 | 100.00 | ||
| Germany | BV SA – Germany | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Ghana | BIVAC Ghana | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ghana | BV Ghana | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ghana | Inspectorate Ghana Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Greece | BV Certification Hellas | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Greece | Inspectorate Hellas SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Greece | BV SA – Greece | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Guatemala | BVCPS Guatemala | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Guiana | Acme Analytical Lab. Guyana Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Guinea | BIVAC Guinea | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Guinea | BV Guinea | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Hungary | BV Hungary | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Iceland | Bureau Veritas Iceland | S | 100.00 | 100.00 | ||
| India | BVIS – India | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | BVCPS India Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | Bureau Veritas India | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| India | BV Certification India | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | Inspectorate Griffith India Pvt Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | Environmental Services India Private Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | Civil Aid | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | Bhagavathi Ana Labs Private Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| India | BV SA – India | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Indonesia | BVCPS Indonesia | S | 85.00 | 85.00 | 85.00 | 85.00 |
| Indonesia | BV Indonesia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Indonesia | PT IOL Indonesia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Iran | Inspectorate Iran (Qeshm) Ltd | S | 51.00 | 51.00 | 51.00 | 51.00 |
| Iran | BV SA – Iran | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Iraq | BV Iraq | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ireland | BV Ireland Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ireland | BV SA – Ireland | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Italy | BV Italy | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Italy | BV Italia Holding SPA (formerly BVQI Italy) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Italy | Nexta | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Italy | Inspectorate Italy SRL | S | 100.00 | 100.00 | 90.00 | 90.00 |
| Japan | 7Layers US | S | 100.00 | 96.59 | ||
| Japan | BV Japan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Japan | Bureau Veritas Human Tech | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Japan | Inspectorate (Singapore) Pte. Ltd, Japan Branch |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Japan | Japan Certification Services | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Japan | BV SA – Japan | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Jordan | BV BIVAC Jordan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Kazakhstan | BV Kazakhstan Industrial Services LLP | S | 60.00 | 60.00 | 60.00 | 60.00 |
| Kazakhstan | BV Kazakhstan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Kazakhstan | BVI Ltd Kazakhstan | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Kazakhstan | Kazinspectorate Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Kazakhstan | BV Marine Kazakhstan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Kenya | BV Kenya | S | 99.90 | 99.90 | 99.90 | 99.90 |
| Kuwait | Inspectorate International Limited Kuwait |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Kuwait | BV SA – Kuwait | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Latvia | Bureau Veritas Latvia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Latvia | Inspectorate Latvia Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Lebanon | BV Lebanon | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Lebanon | BIVAC Branch Lebanon | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Liberia | BIVAC Liberia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Libya | Inspectorate International Limited, Libya Branch |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Lithuania | BV Lithuania | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Lithuania | Inspectorate Klaipeda UAB | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Luxembourg | Soprefira | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Luxembourg | BV Luxembourg | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Malaysia | BV Malaysia | S | 49.00 | 49.00 | 49.00 | 49.00 |
| Malaysia | Inspectorate Malaysia SDN BHD | S | 49.00 | 49.00 | 49.00 | 49.00 |
| Malaysia | BV Certification Malaysia (formerly BVQI Malaysia) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Malaysia | BV Inspection | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Malaysia | Scientige Sdn Bhd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mali | BV Mali | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Malta | Inspectorate Malta Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Malta | BV SA – Malta | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Mauritania | BV SA – Mauritania | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Mauritius | BV SA – Mauritius | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | BVQI Mexico | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | BV Mexicana | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | BVCPS Mexico | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | Inspectorate de Mexico SA de CV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | Chas Martin Mexico City Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | Acme Analytical Lab. (Argentina) SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | TC Engineering & consulting SA de CV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mexico | Unicar Automotive Inspection Mexico | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Monaco | BV Monaco | S | 99.96 | 99.96 | 99.96 | 99.96 |
| Mongolia | Bureau Veritas Inspection & Testing Mongolia LLC |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Morocco | BV Morocco (formerly BV Certification Morocco) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Morocco | BV SA – Morocco | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Mozambique | TETE Lab | S | 66.66 | 66.66 | 66.66 | 66.66 |
| Mozambique | Bureau Veritas Controle | S | 90.00 | 90.00 | 90.00 | 90.00 |
| Mozambique | BV Mozambique Ltda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Mozambique | BV SA – Mozambique | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Namibia | Bureau Veritas Namibia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | BIVAC BV (formerly BIVAC Rotterdam) | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | BV Inspection & Certification the Netherlands BV |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Risk Control BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | BV Marine Netherlands | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | BV Nederland Holding | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Investments BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Netherlands BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspection Worldwide Services BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate International BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Griffith Holland BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | IOL Investments BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | National Oil and Inspection Services Rotterdam BV |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Hoff BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inpechem Inspectors BV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Bonaire NV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Curaçao NV | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Netherlands | Inspectorate Curaçao NV - Aruba | S | 100.00 | 100.00 | 100.00 | 100.00 |
| New Caledonia | BV SA – New Caledonia | B | 100.00 | 100.00 | 100.00 | 100.00 |
| New Zealand | BV New Zealand | S | 100.00 | 100.00 | 100.00 | 100.00 |
| New Zealand | Amdel Holdings | S | 100.00 | 100.00 | 100.00 | 100.00 |
| New Zealand | AMDEL Holdings (New Zealand) Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Nicaragua | Inspectorate America Corp. - Nicaragua |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Nigeria | BV Nigeria | S | 60.00 | 60.00 | 60.00 | 60.00 |
| Nigeria | Inspectorate Marine Services (Nigeria) Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Norway | BV Norway (formerly Chemtox-Norge AS) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Norway | Inspectorate Norway | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Norway | BV SA – Norway | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Oman | Inspectorate International Limited Oman |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Oman | BV SA – Oman | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Pakistan | BVCPS Pakistan | S | 80.00 | 80.00 | 80.00 | 80.00 |
| Pakistan | BV Pakistan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Panama | BV Panama | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Panama | Inspectorate de Panama SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Papua New Guinea |
BV Asset Integrity and Reliability Services Pty Ltd Branch |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Paraguay | BIVAC Paraguay | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Paraguay | Inspectorate de Paraguay SRL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | BIVAC Peru | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | BV Peru | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | Cesmec Peru | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | Inspectorate Services Peru SAC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | Acme Analytical Lab. Peru | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Peru | Tecnicontrol Ingenieria | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Philippines | Toplis Marine Philippines | S | 80.00 | 80.00 | 80.00 | 80.00 |
| Philippines | Inspectorate International Ltd (Philippines branch) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Philippines | BV SA – Philippines | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Poland | BV Poland | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Poland | Acme Labs Polska sp. z.o.o. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | BV Certification Portugal | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | Rinave Registro Int'l Naval | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | Rinave Consultadorio y Servicios | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | BV Rinave ACE | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | BIVAC Iberica | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | ECA Totalinspe | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | Inspectorate Portugal SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Portugal | BV SA – Portugal | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Puerto Rico | Inspectorate America Corporation | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Qatar | Inspectorate International Limited Qatar WLL |
S | 49.00 | 49.00 | 49.00 | 49.00 |
| Qatar | Inspectorate Watson Grey, UAE - Qatar Op |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Qatar | BV SA – Qatar | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Romania | BV Romania CTRL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Romania | Inspect Balkan SRL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Russia | BV Russia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Russia | Bureau Veritas Certification Russia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Russia | Inspectorate Russia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Russia | Unicar Russia LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Saint Lucia | Inspectorate America Corporation | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sainte Croix | Inspectorate America Corporation | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Saudi Arabia | BV SATS | S | 60.00 | 60.00 | 60.00 | 60.00 |
| Saudi Arabia | Inspectorate International Saudi Arabia Co Ltd |
S | 65.00 | 65.00 | 65.00 | 65.00 |
| Saudi Arabia | BV SA – Saudi Arabia | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Senegal | BV Senegal | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Serbia | Bureau Veritas D.O.O. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | 7Layers Asia | S | 100.00 | 96.50 | ||
| Singapore | BVCPS Singapore | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | Tecnitas | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | BV Certification Singapore (formerly BVQI Singapore) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | BV Marine Singapore | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | Atomic Technologies Pte Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | Inspectorate (Singapore) PTE Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Singapore | BV SA – Singapore | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Slovakia | BV Certification Slovakia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Slovenia | Bureau Veritas D.O.O. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Slovenia | BV SA – Slovenia | B | 100.00 | 100.00 | 100.00 | 100.00 |
| South Africa | Inspectorate Marine (Pty) Ltd | S | 51.00 | 37.38 | 51.00 | 37.38 |
| South Africa | BV South Africa | S | 70.00 | 70.00 | 70.00 | 70.00 |
| South Africa | Inspectorate Gazelle Testing Services (Pty) Ltd |
S | 70.00 | 70.00 | 70.00 | 70.00 |
| South Africa | Inspectorate Chemtaur (Pty) Ltd | S | 73.30 | 73.30 | 73.30 | 73.30 |
| South Africa | Inspectorate M&L (Pty) Ltd | S | 100.00 | 73.30 | 100.00 | 73.30 |
| South Africa | Inspectorate Metals & Minerals (Pty) Ltd |
S | 100.00 | 73.30 | 100.00 | 73.30 |
| South Africa | M&L Laboratory Services (Pty) Ltd | S | 100.00 | 73.30 | 100.00 | 73.30 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| South Africa | ACT | S | 100.00 | 100.00 | 100.00 | 100.00 |
| South Africa | BV SA – South Africa | B | 100.00 | 100.00 | 100.00 | 100.00 |
| South Korea | BV KOTITI Korea Ltd | S | 51.00 | 51.00 | 51.00 | 51.00 |
| South Korea | 7Layers Korea Ltd | S | 100.00 | 96.59 | ||
| South Korea | BV Certification Korea (formerly BVQI Korea) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| South Korea | BVCPS ADT Korea Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| South Korea | BV SA – South Korea | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | BV Formación (formerly ECA Instituto De Tecnología Y Formación, SA) |
S | 95.00 | 95.00 | 95.00 | 95.00 |
| Spain | BV Iberia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | BV Certification Spain | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | IPM Spain | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | BV Inversiones SA (formerly Inversiones Y Patrimonios De ECA Global, SA) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | ECA Global'S Investments, Heritage And Assets, SLU |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | ECA Entidad Colaborada De La Administración, SAU |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Servi Control SL | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | BV Comercio Internacional (formerly ECA Control Engineering International SA) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Activa, Innovación Y Servicios, SAU | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Instituto De La Calidad, SAU | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Gimnot Innovación Y Servicios, SAU | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Inspectorate Andalucia SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Inspectorate Española, SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Spain | Unicar Spain Servicios de Control S.L. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sri Lanka | BVCPS Lanka | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sri Lanka | BV Lanka Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sudan | Inspectorate International Ltd Sudan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sweden | BV Certification Sweden | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sweden | LW Cargo Survey AB | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Sweden | BV SA – Sweden | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Switzerland | BV Switzerland | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Switzerland | BV Certification Switzerland | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Switzerland | Inspectorate Suisse SA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Syria | BIVAC Branch Syria | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Syria | Bivac BV Branch | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Tahiti | BV SA – Tahiti | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | 7Layers Taiwan | S | 100.00 | 96.50 | ||
| Taiwan | Advance Data Technology | S | 99.10 | 99.10 | 99.10 | 99.10 |
| Taiwan | MTL TAIWAN Branch of BV CPS HKG | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | BV Certification Taiwan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | BV Taiwan | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | BVCPS HK, Taoyuan Branch | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | Inspectorate (Singapore) Pte. Ltd, Taiwan Branch |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Taiwan | BV SA – Taiwan | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Tanzania | BV Tanzania | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Thailand | BV Thailand | S | 49.00 | 49.00 | 49.00 | 49.00 |
| Thailand | BV Certification Thailand | S | 49.00 | 49.00 | 49.00 | 49.00 |
| Thailand | Inspectorate (Thailand) Co Ltd | S | 75.00 | 75.00 | 75.00 | 75.00 |
| Thailand | BVCPS Thailand | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Togo | BV Togo | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Trinidad and Tobago |
Inspectorate America Corporation | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Tunisia | STCV - Tunisia | S | 49.98 | 49.98 | 49.98 | 49.98 |
| Tunisia | Inspectorate Tunisia | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Tunisia | BV SA – Tunisia | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Tunisia | BV SA – MST - Tunisia | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkey | Inspectorate Uluslararasi Gozetim Servisleri AS |
S | 80.00 | 80.00 | 80.00 | 80.00 |
| Turkey | BV Gozetim Hizmetleri | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkey | BVCPS Turkey | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkey | BV Deniz Ve Gemi Sinif | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkey | Kontrollab | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkey | Acme Analitik Lab. Hizmetleri Ltd Sirk. | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Turkmenistan | Inspectorate Suisse SA Turkmenistan branch |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Uganda | BV Uganda | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ukraine | BV Ukraine | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Ukraine | BV Certification Ukraine | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Ukraine | Inspectorate Ukraine LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Arab Emirates |
BV SA – Abu Dhabi | B | 100.00 | 100.00 | 100.00 | 100.00 |
| United Arab Emirates |
BV SA – Dubai | B | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Pavement Technologies Limited | S | 75.00 | 75.00 | 75.00 | 75.00 |
| United Kingdom | BV Certification Holding | B | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV Certification LTD – UK | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV UK Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV Inspection UK | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Weeks Technical Services | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Bureau Veritas Consulting | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Bureau Veritas Laboratories Limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Bureau Veritas Consumer Products Services UK Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | LJ Church Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Tenpleth UK | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Bureau Veritas Consumer Products Services Holding UK Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Casella consulting Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV HS&E | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Winton | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Casella Science & Environment | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Casella Analytic | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV B&I Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Winton Holding | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV UK Holding Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JMD Group Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JMD Fabrication Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JMD International Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JMD Software solutions Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JMD Rotordynamics Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | JM Dynamics Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Inspectorate Holdings Plc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Inspectorate Holdings (U.S.) Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Inspectorate International Limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| United Kingdom | Inspectorate (International Holdings) Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Daniel C Griffith Holdings Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Inspectorate Worldwide Services Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Watson Gray Limited | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | Inspectorate Investments America Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United Kingdom | BV SA – United Kingdom | B | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | BVHI – USA | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | BV Marine Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | BV Certification North America | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | BVCPS Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | BIVAC North America | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | US Laboratories Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Bureau Veritas North America | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | One Cis Insurance | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Curtis Strauss | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | NEIS | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate Pledgeco Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate Holdco Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate America Corporation | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate Investments (US) Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Chas Martin Montreal Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Petroleum Fuel Consultants Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate America Investments LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate US Holdings 1 LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate US Holdings 2 LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Inspectorate US Holdco LLC | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | Unicar USA Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | 7Layers US | S | 100.00 | 96.59 | ||
| United States | Acme Analytical Laboratories USA, Inc.k. |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | TH Hill Colombia Llc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | TH Hill Associates II Llc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| United States | TH Hill Associates Inc | S | 100.00 | 100.00 | 100.00 | 100.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| United States | Loma International Corp | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Vietnam | BV Vietnam | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Vietnam | BV Certification Vietnam (formerly BVQI Vietnam) |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Vietnam | BV Consumer Product Services Vietnam Ltd |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Vietnam | BV CPS Vietnam (formerly Kotiti) | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Vietnam | Inspectorate Vietnam Co Ltd | S | 100.00 | 100.00 | 100.00 | 100.00 |
| Yemen | BIVAC Branch Yemen | B | 100.00 | 100.00 | 100.00 | 100.00 |
| Yemen | Inspectorate International Limited Yemen |
S | 100.00 | 100.00 | 100.00 | 100.00 |
| Zambia | BIVAC Zambia | B | 100.00 | 100.00 | 100.00 | 100.00 |
In accordance with IAS 27.13, the aforementioned entities are all fully consolidated since they are controlled by Bureau Veritas, i.e., the Group has the majority of the voting rights in these entities or governs their financial and operating policies.
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| Canada | Acme Mettalurgical Limited | S | 50.00 | 50.00 | 50.00 | 50.00 |
| China | 7Layers Ritt China | S | 50.00 | 48.30 | ||
| United Kingdom | Unicar GB Ltd | S | 50.00 | 50.00 | 50.00 | 50.00 |
| United Kingdom | UCM Global Ltd | S | 50.00 | 50.00 | 50.00 | 50.00 |
| June 30, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Country | Company | Type | % control | % interest | % control | % interest |
| France | ATSI - France | S | 49.92 | 49.92 | 49.92 | 49.92 |
| United Kingdom | BV EM & I Limited | S | 50.00 | 50.00 | 50.00 | 50.00 |
This is a free translation into English of the Statutory Auditors' review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
67 - 71 Boulevard du Château 92571 Neuilly sur Seine Cedex
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on:
These condensed interim consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.
We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements have not been prepared, in all material respects, in accordance with IAS 34 – Interim Financial Reporting, as adopted by the European Union.
We have also verified the information given in the interim management report on the condensed interim consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and its consistency with the condensed interim consolidated financial statements.
Neuilly-sur-Seine and Paris, August 27, 2013
The Statutory Auditors
PricewaterhouseCoopers Audit Bellot Mullenbach & Associés
Christine Bouvry Eric Seyvos
I declare that to the best of my knowledge the condensed Half-Year consolidated Financial Statements appearing in Chapter 2 – "2013 Half-Year Consolidated Financial Statements" – have been drawn up in accordance with applicable accounting standards and provide a faithful picture of the capital, financial position and results of the company and all the businesses included in the consolidation, and that the Half-Year Business Report appearing in Chapter 1 – "2013 Half-Year Business Report" – has a table which faithfully presents the important events which took place in the first six months of the financial period, their effect on the consolidated accounts as at June 30, 2013, the principal related-party transactions and a description of the main risks factors for the remaining six months of the 2013 financial year.
Neuilly-sur-Seine, August 28, 2013
Didier Michaud-Daniel Chairman and Chief Executive Officer of Bureau Veritas
67/71, boulevard du Château – 92200 Neuilly-sur-Seine – France Tél. : +33 (0)1 55 24 70 00 – Fax : +33 (0)1 55 24 70 01 – www.bureauveritas.com
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