Earnings Release • Nov 6, 2012
Earnings Release
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Neuilly-sur-Seine, France, November 6, 2012
Bureau Veritas: continued growth in Q3 2012
Didier Michaud-Daniel, CEO of Bureau Veritas, stated:
"Third-quarter growth at Bureau Veritas was very robust, in line with the first-half performance. Growth was driven by the variety of our services and our global presence. Almost 60% of our business portfolio posted double-digit growth rates (Industry, Commodities, Government Services & International Trade, Consumer Products). However, as expected, the Marine and Construction businesses and the economic backdrop in Europe continued to weigh on the Group's growth.
The nine-month 2012 performance enables us to confirm that Bureau Veritas should post strong growth in full-year 2012 revenue and adjusted operating profit, in line with the targets set out in the BV2015 strategic plan".
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 999.2 | 830.3 | 20.3% | 8.1% | 6.6% | 5.6% |
| TOTAL 9M | 2,860.8 | 2,453.1 | 16.6% | 8.1% | 4.4% | 4.1% |
Nine-month 2012 revenue rose by 16.6% to EUR 2,680.8 million and broke down as follows:
The Group's activity is diversified both by market and by region. Over the first nine months of 2012, revenue generated in fast-growing regions (Latin America, Asia-Pacific excluding Japan, Eastern Europe, the Middle-East and Africa) increased further to account for 54% of overall revenue.
The Group is continuing to restructure its activities in Spain and is considering reshaping the portfolio of services and adapting the structure of its operations and its headcount to market conditions. As in 2011, the costs associated with this reorganization will be booked as exceptional items at December 31, 2012.
The healthy level of operating cash flow booked in Q3 2012 helped reduce the Group's adjusted net financial debt as of September 30, 2012 relative to June 30, 2012.
Considering 9M achievements and despite challenging economic environment, the Group should, as expected, deliver strong growth in 2012 revenue and adjusted operating profit, in line with the targets set out in the BV2015 strategic plan (1) .
(1) 2012-2015 financial targets set out in the "BV2015 : Moving forward with confidence" strategic plan
Revenue growth: + 9-12% on average per year, on a constant-currency basis:
Date: Tuesday November 6, 2012 6 p.m. CET The conference call will be broadcast live and after the event on the Group's website: http://finance.bureauveritas.com The presentation document will also be available on the website.
February 27, 2013: publication of full-year 2012 results (before trading)
April 30, 2013: publication of Q1 2013 financial information (after trading)
May 22, 2013: Shareholders' Meeting
August 28, 2013: publication of H1 2013 results (before trading)
November 6, 2013: publication of Q3 2013 financial information (after trading)
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 77.6 | 76.2 | 1.8% | (3.2)% | - | 5.0% |
| TOTAL 9M | 238.3 | 235.9 | 1.0% | (2.9)% | - | 3.9% |
Revenue growth in the Marine business stemmed from:
Over the full-year 2012, growth in the fleet in service and the roll-out of new regulations concerning energy efficiency and working conditions on the ships should help partly offset the decline in new construction activity. In addition, growth opportunities have been identified in Liquefied Natural Gas and the offshore segment.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 233.7 | 171.1 | 36.6% | 14.3% | 17.2% | 5.1% |
| TOTAL 9M | 633.7 | 483.3 | 31.1% | 16.4% | 10.7% | 4.0% |
Performances in the Industry business remained driven by demand in the Oil & Gas and Power segments, and more specifically in fast-growing regions. Over the first nine months, the Group notably won major contracts in Colombia, Australia and China.
The apparent slowdown in Q3 2012 organic growth was due to the halt to certain unprofitable activities in France and Australia with the aim of improving overall profitability in the business.
Over the full-year 2012, the Industry business should continue to post high organic growth, underpinned by the number of new projects in the Oil & Gas segment, ageing assets in mature countries, tougher regulations and client aims to reduce their number of inspection and certification suppliers.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 111.8 | 107.5 | 4.1% | 0.9% | 0.4% | 2.8% |
| TOTAL 9M | 350.6 | 332.5 | 5.4% | 3.2% | 0.3% | 1.9% |
In fast-growing geographies such as Latin America and China, the In-Service Inspection & Verification business posted double-digit organic growth over the first nine months. In mature countries, with the exception of Spain, revenue increased albeit more modestly.
For the full-year 2012, the Group expects growth in revenue, stemming from the recurring nature of the business in mature economies and development in new geographies.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 107.8 | 107.3 | 0.5% | (7.6)% | 4.4% | 3.7% |
| TOTAL 9M | 331.9 | 325.7 | 1.9% | (4.5)% | 3.5% | 2.9% |
While activity has been slowing down in France (52% of revenue), this was offset by healthy growth in Japan and an increase in fast-growing regions (14% of revenue).
In view of the lasting deterioration in the Spanish infrastructure and construction market, the Group is continuing to restructure and is considering reshaping the portfolio of services and adapting the structure of its operations and its headcount to market conditions.
The Group expects a further slowdown in Europe and is adapting its operations accordingly. It is also pursuing growth initiatives in emerging markets.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 77.4 | 71.1 | 8.9% | 5.2% | (0.2)% | 3.9% |
| TOTAL 9M | 247.1 | 227.6 | 8.6% | 5.8% | 0.2% | 2.6% |
Revenue growth in the Certification business was primarily driven by performances in fast-growing economies and new certification schemes. In mature countries, with the exception of southern Europe (Spain and Italy), activity remained satisfactory especially thanks to the signing of large global contracts.
For 2012, growth prospects remain robust, not only thanks to the recurring nature of activity but also new schemes and momentum in fast-growing regions.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 192.9 | 142.9 | 35.0% | 14.6% | 11.5% | 8.9% |
| TOTAL 9M | 527.4 | 406.8 | 29.6% | 14.1% | 8.7% | 6.8% |
The Commodities business enjoyed a robust performance over the period driven by:
For the full-year, growth in this business should remain buoyant in view of the diverse nature of its activities. Analyses undertaken in O&P and agricultural products activities are robust and resistant to cyclical effects. Growth in Metals & Minerals is set to slow with the expected decline in exploration spending by junior mining companies.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 121.3 | 99.5 | 21.8% | 9.4% | 1.6% | 10.8% |
| TOTAL 9M | 328.6 | 283.4 | 15.9% | 6.7% | 1.1% | 8.1% |
The Consumer Products business turned in a healthy nine-month 2012 performance with faster organic growth in Q3.
In the Electricals & Electronics segment (E&E), the Group benefited from demand for network compatibility testing and the proliferation of new products (tablets, mobile phones etc) as well as increased capacity at its laboratories located in Korea, Taiwan and Mainland China.
Growth was also robust in the textiles segment with the development of new supply regions in India, Bangladesh and northern China, as well as the rapid ramp-up of the JC Penney contract.
In contrast, testing of toys and hardlines continued to suffer from the loss of exclusivity with a number of US retailers and deteriorated market conditions.
For the full-year 2012, organic growth ought to be robust with on-going growth initiatives in E&E and the automotive segment.
| 2012 | 2011 | % change | ||||
|---|---|---|---|---|---|---|
| (in millions of euros) | Overall | Organic | Scope | Currencies | ||
| Q3 | 76.7 | 54.7 | 40.2% | 34.3% | 4.4% | 1.5% |
| TOTAL 9M | 203.2 | 157.9 | 28.7% | 25.8% | 2.1% | 0.8% |
The outstanding performance in the Government Services & International Trade business was driven by higher inspected volumes for existing contracts, especially in the Ivory Coast, Guinea-Conakry, the Congo and Angola, as well as the rising momentum of new verification of conformity contracts in Iraq and Kurdistan.
The business should benefit from robust revenue levels albeit with more demanding comparison with the year-earlier period in Q4.
Bureau Veritas is a world leader in conformity assessment and certification services. Created in 1828, the Group has almost 59,000 employees in 940 offices and 340 laboratories located in 140 countries. Bureau Veritas helps its clients to improve their performances by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.
Bureau Veritas is listed on the Euronext Paris and belongs to the Next 20 (Compartment A, code ISIN FR 0006174348, stock symbol: BVI). www.bureauveritas.com
| Bureau Veritas | +33 (0)1 55 24 76 09 |
|---|---|
| Claire Plais | +33 (0)1 55 24 77 80 |
| Domitille Vielle | [email protected] |
| Bureau Veritas | Véronique Gielec | +33 (0)1 55 24 76 01 |
|---|---|---|
| [email protected] |
***
This press release contains forward-looking statements, which are based on current plans and forecasts of Bureau Veritas' management. Such forward-looking statements are by their nature subject to a number of important risk and uncertainty factors such as those described in the registration document filed by Bureau Veritas with the French Autorité des marchés financiers that could cause actual results to differ from the plans, objectives and expectations expressed in such forward-looking statements. These forward-looking statements speak only as of the date on which they are made, and Bureau Veritas undertakes no obligation to update or revise any of them, whether as a result of new information, future events or otherwise, according to applicable regulations.
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