Eurobusiness Media (EBM): Hello, and welcome to the Global Headquarters of Bureau Veritas, a world-leading provider in Testing, Inspection and Certification services. I am joined by Bureau Veritas CEO Didier Michaud-Daniel, to talk about the full annual results. Didier, hello.
Didier Michaud-Daniel: Hello Nadia. Welcome to Bureau Veritas.
EBM: Let’s take a look at these full-year results. Give us an overview and perhaps a few highlights.
Didier Michaud-Daniel: Yes Nadia, 2017 was a solid year for Bureau Veritas. We delivered on our financial commitment.
With a good 2.2% organic growth, our performance was in line with guidance, even a bit better. We made significant progress in the execution of our Strategic Plan with a good focus on Group diversification, and Digital transformation is well underway.
EBM: Could you give us a few more details on that?
Didier Michaud-Daniel: We have achieved a revenue of around 4.7 billion euro in 2017, up 3.1% year-on-year. We completed 9 targeted acquisitions, all supporting our Growth Initiatives - Buildings and Infrastructure, OPEX, Food & Agri, Automotive & SmartWorld.
Our operating profit reached 746 million euro, bringing our margin to 15.9%. We posted a good level of Free Cash Flow, up 3.2% organically.
Our 5 Growth Initiatives are now representing a third of Group revenue, and generated almost 7% organic growth in 2017. The Group diversification is progressing well.
Let me take a minute to thank the 74,000 people of Bureau Veritas. They have been truly instrumental in achieving these results. Our efforts, collectively, are putting us in the best position to see our revenue growing in 2018.
EBM: You just mentioned transformation there. Can you share with us what is behind the transformation of the Group?
Didier Michaud-Daniel: Transformation is about moving the Group from a heavy dependence on Oil & Gas to a more resilient and diversified company.
So we decided to focus on 5 growth initiatives and on two specific geographies: US & China.
In 2017, this transformation strategy delivered very good results. Let me share with you 2 examples reflecting this:
Latin America was historically one of the most Oil & Gas exposed regions in the BV’s network. Today, the region is posting strong organic growth thanks to the perfect execution of our plan. We focus on OPEX, Agri Food, Buildings and Infrastructure.
Our Consumer Products Division is also delivering excellent results: strong growth, very high margin, excellent positioning with significant developments in Automotive and in the Internet of Things.
EBM: And how is this transformation reflected internally?
Didier Michaud-Daniel: Significantly! After streamlining the Group’s organization, our decision-making process is much quicker. We have reinforced our focus on our client’s challenges. And a company-wide digital shift is well advanced with already tangible solutions deployed in the field. All the strategic choices we made in 2015 are delivering results. We are in the right direction to achieve our target for 2020.
EBM: Didier, let me pick up on your last point: digitalization. In Dec 2017, you unveiled your digital strategy. Can you give us more color on this crucial topic for all companies around the world today?
Didier Michaud-Daniel: In this fast-changing economy, companies are faced with new challenges and risks linked with digitalization. This is why digital is at the forefront of the Group’s strategy.
Our 3 pillars are:
First, improvement of our own efficiency: digital is helping us to be more efficient internally and in the way we deliver services to our clients.
Second, development of new digital-related TIC services: apart from the daily usage of connected glasses or drones, we are focused on 3D modelling, on predictive maintenance based on Artificial Intelligence and precision farming thanks to satellite technology.
And third, new operating models: at BV, we are at the forefront of Data Privacy, Cybersecurity and Blockchain. These are the current challenges to be tackled by the TIC industry.
Strategy is important but Execution is crucial. We have already implemented several initiatives, around the world to serve our clients.
EBM: You recently announced the acquisition of EMG, a leading provider of Construction technical assessment and project assistance in the US. What is the rationale behind this acquisition?
Didier Michaud-Daniel: Before talking about EMG, let me give you a little bit of context: because of aging infrastructures in most of western countries and booming urbanization across the world, there will be, in the coming years, massive investments in Buildings and Infrastructure. This is an area of expertise for BV. We started with leading positions in France. Then, I decided to go full-speed in the Chinese market. 5 years later, BV is the leader in China for Buildings and Infrastructure.
Recently, we strengthened our position in Latin America which has a fantastic potential for development.
And last year, I decided to focus on North America. We acquired 2 companies in the US and 1 in Mexico.
Now with the acquisition of EMG, we have expanded our local footprint in the US.
On a personal note, I must say that I am very pleased to welcome the EMG team on board sharing our common passion for excellence and client-oriented mindset.
EBM: Along with the US, China is a strategic geography for BV. Can you update us on your Chinese operations and latest performance?
Didier Michaud-Daniel: China is now the first country of Bureau Veritas both in terms of people with 14,000 employees and in terms of Revenue.
In China, we have 2 main activities.
First, Consumer Products division is performing very well with the development of strong positions in Automotive and Smart World.
Secondly in Commodities, Industry & Facilities, we are growing significantly, supporting major Chinese companies on huge projects in Power and Utilities and also in Infrastructure.
Imagine ! In China, around 250 airports and tens of thousands of kilometers of highways are under construction, or in the planning phase. BV is very well positioned to bring its expertise in this field.
All in all, in China, which is the first market for our industry, Bureau Veritas is progressing very rapidly and we are ahead of our plan.
EBM: Do you have anything to add?
Didier Michaud-Daniel: Yes, Nadia. 2 messages. First, I am thinking about our 3 absolutes – Safety, Ethics, Financial Controls, which are not negotiable for anyone who works at BV.
Second, BV is helping to improve quality, health, safety, and social responsibility, while also safeguarding the environment. We are a Business to Business to Society Company. Our 74,000 employees are proud that, their work makes a positive impact every day on the lives of millions of people around the world.
EBM: Didier Michaud-Daniel, thank you very much.
Didier Michaud-Daniel: Thank you, Nadia.
