Earnings Release • Nov 6, 2013
Earnings Release
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Neuilly-sur-Seine, France, November 6, 2013
Activity in the first nine months of 2013:
Didier Michaud-Daniel, CEO of Bureau Veritas, stated:
"Revenue to end-September was up 6.4% on a constant currency basis. In the third quarter, activity improved in the Marine, Construction and In Service Inspection & Verification businesses. The Industry and Consumer Products businesses continued to post high growth levels. In contrast, activities related to upstream minerals deteriorated further while Government Services suffered from demanding comparison with the year-earlier period. Sources of new growth from new single window contracts are expected to start in Q4 2014.
In view of the ongoing challenging economic environment in Europe and the reduction in upstream minerals, organic growth is unlikely to rebound before 2014. The priority is to continue improving profitability. The Group expects an improvement starting 2014 and a gradual return to organic growth levels in order to achieve the BV2015 financial targets."
| (EUR millions) | 2013 | 2012 | % growth | |||||
|---|---|---|---|---|---|---|---|---|
| Overall | Organic | Acquisitions | Disposals | Currencies | ||||
| 3rd quarter | 969.7 | 999.2 | (3.0)% | +3.3% | +1.7% | (0.6)% | (7.4)% | |
| 9 months | 2,927.2 | 2,860.8 | +2.3% | +4.2% | +3.1% | (0.9)% | (4.1)% |
Nine-month 2013 revenue came in at EUR 2,927.2 million, up 2.3% relative to the year-earlier period. Constant currency growth stood at 6.4%.
Organic growth totaled 4.2% over nine-months and 3.3% in Q3, reflecting an improvement in the Marine, Construction and In Service Inspection & Verification businesses, high growth in the Industry and Consumer Products businesses and a decline in Metals & Minerals (Commodities business) and Government Services.
Acquisitions contributed 3.1% of growth. These concerned the full-year consolidation of companies acquired in 2012, primarily Tecnicontrol (Industry), TH Hill (Industry), AcmeLabs (Commodities) and the acquisitions made in 2013, namely 7Layers (Consumer Products), Sievert (Industry), LVQ (Industry) and KBI (Construction).
Disposals of activities represented a 0.9% decline in revenue and concerned infrastructure control in Spain (Construction), Anasol in Brazil (IVS) and laboratories in New Zealand (Industry).
Currency fluctuations had a 4.1% negative impact on revenue, due to the decline in the majority of currencies against the euro, especially those in emerging markets (Brazil, Argentina, South Africa, Columbia and India) and a number of major countries (US, Australia, Japan, UK).
Q3 revenue in the Marine business was virtually stable on a constant currency basis, reflecting healthy growth in the ships in service segment and a more limited decline in the new construction segment. New order volumes rose 84% and suggest a recovery in new construction activity over the medium term.
Organic growth in the Industry business (+8.7% in Q3) remained underpinned by construction of new energy infrastructure in fast-growing countries. Activities in Europe were virtually stable while those in North America grew.
The In-Service Inspection & Verification business bounced back in Q3 with organic growth of 7.1%, driven by development in fast-growing countries, especially Bangladesh, as well as by Europe, with a stabilization in Spain.
In Construction, the high growth seen in Asia and especially China, Japan and India, as well as a stabilization in France and a recovery in code compliance activities in the US, enabled the business to post organic growth of 10.4% in Q3.
Organic growth in Certification stood at 3.3% in Q3, reflecting a sluggish European market, especially for conventional QHSE schemes, and growth in emerging markets affected by the end to carbon certificates required by the Kyoto protocol program.
Q3 revenue in the Commodities business fell 6.5% on a constant scope and currency basis, due to the deterioration in activities related to upstream minerals and despite a surge in revenue from oil & petrochemicals products. Performances and growth prospects for this segment are solid, but visibility on the recovery in upstream minerals remains limited.
Organic growth in the Consumer Products business was healthy in Q3 (+7.2%), especially in electronic toys, wireless technologies and textiles.
The Q3 revenue decline in the GSIT business (-5.0% on a constant currency basis) stemmed from a high basis of comparison versus last year. Two new single window concessions awarded recently in the Democratic Republic of Congo and in Togo are to be operated in Q4 2014.
| 2013 | % growth | ||||||
|---|---|---|---|---|---|---|---|
| (EUR millions) | 2012 | Overall | Organic | Scope | Currencies | ||
| Marine | 73.7 | 77.6 | (5.0)% | (0.8)% | +0.1% | (4.3)% | |
| Industry | 235.8 | 233.9 | +0.8% | +8.7% | +2.6% | (10.5)% | |
| IVS | 114.5 | 111.4 | +2.7% | +7.1% | (1.3)% | (3.1)% | |
| Construction | 108.8 | 107.8 | +0.9% | 10.4% | (3.6)% | (5.9)% | |
| Certification | 74.9 | 77.6 | (3.4)% | +3.3% | - | (6.7)% | |
| Commodities | 161.9 | 192.9 | (16.1)% | (6.5)% | +0.2% | (9.8)% | |
| Consumer Products | 132.7 | 121.3 | +9.4% | +7.2% | +7.2% | (5.0)% | |
| GSIT | 67.4 | 76.7 | (12.1)% | (5.0)% | - | (7.1)% | |
| Total 3rd quarter (Q3) | 969.7 | 999.2 | (3.0)% | +3.3% | +1.1% | (7.4)% |
| 2013 | % growth | ||||||
|---|---|---|---|---|---|---|---|
| (EUR millions) | 2012 | Overall | Organic | Scope | Currencies | ||
| Marine | 219.0 | 238.3 | (8.1)% | (6.1)% | - | (2.0)% | |
| Industry | 702.5 | 634.4 | +10.8% | +10.1% | +6.9% | (6.2)% | |
| IVS | 346.2 | 349.3 | (0.9)% | +1.9% | (1.3)% | (1.5)% | |
| Construction | 322.1 | 331.9 | (3.0)% | +4.4% | (3.7)% | (3.7)% | |
| Certification | 245.1 | 247.7 | (1.0)% | +2.7% | - | (3.7)% | |
| Commodities | 501.8 | 527.4 | (4.9)% | (0.7)% | +1.3% | (5.5)% | |
| Consumer Products | 376.7 | 328.6 | +14.6% | +9.4% | +7.7% | (2.5)% | |
| GSIT | 213.8 | 203.2 | +5.2% | +8.1% | +1.8% | (4.7)% | |
| Total 9 months (9M) | 2,927.2 | 2,860.8 | +2.3% | +4.2% | +2.2% | (4.1)% |
IVS: In-Service Inspection & Verification
GSIT: Government Services & International Trade
On September 30, 2013, the Group's adjusted net financial debt had increased slightly relative to the level on June 30, 2013 following the acquisitions of Sievert and KBI.
In view of the ongoing challenging economic environment in Europe and the reduction in upstream minerals, organic growth is unlikely to rebound before 2014. The priority is to continue improving profitability. The Group expects an improvement starting 2014 and a gradual return to organic growth levels in order to achieve the BV2015 financial targets.
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:
Wednesday, November 6, 2013 at 6 p.m. CET
The conference call in English 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.
March 6, 2014: publication of Full-Year 2013 Results (before trading) April 29, 2014: publication of Q1 2014 Financial Information (after trading) May 21, 2014: Shareholders' meeting August 28, 2014: publication of 2014 First Half Results (before trading) November 6, 2014: publication of Q3 2014 Financial Information (after trading)
| Claire Plais | +33 (0)1 55 24 76 09 |
|---|---|
| Domitille Vielle | +33 (0)1 55 24 77 80 |
Véronique Gielec +33 (0)1 55 24 76 01
Bureau Veritas is a world leader in conformity assessment and certification services. Created in 1828, the Group has more than 60,000 employees in around 1,330 offices and 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 Euronext Paris and belongs to the Next 20 index.
Compartment A, code ISIN FR 0006174348, stock symbol: BVI.
www.bureauveritas.com
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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