EuroBusiness Media (EBM): Hello and welcome to all of you tuning in. My name is Nadia and you join us here at 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 Group’s half year results. Didier, a very warm welcome to you.
Didier Michaud-Daniel: Hello Nadia, thank you, it is a pleasure to see you again
EBM: With regards to the H1 results you just published, how did Bureau Veritas perform in H1 2018? Can you share with us some highlights?
Didier Michaud-Daniel: Sure Nadia, in H1 2018, Bureau Veritas made significant further progress with its transformation plan. The Group’s organic revenue increased by 3.5% with growth of 4.4% in the second quarter.
This reflected sustained growth for our 5 Growth Initiatives – Buildings & Infrastructure, OPEX, Agri-Food, SmartWorld and Automotive - and an improving trend for the base business.
We have pursued our external growth through 6 targeted acquisitions, all in support of the diversification of our portfolio. They will add around €85 million of annualized revenue
EBM: Could you give us more details on the financial results?
Didier Michaud-Daniel: We achieved revenues of 2.3 billion euros in H1 2018, up 6.1% year-on-year at constant currency.
Our adjusted operating profit reached 348 million euros, bringing our margin to 15.4% at constant currency
At 63 million euros, Free cash Flow improved versus last year over the same period.
EBM: So, what was the operating performance behind these results?
Didier Michaud-Daniel: Five businesses out of six grew overall at 4.3% on average.
Marine & Offshore was still impacted by the down cycle in shipping, but we expect some recovery by end of the year.
Industry, our second largest business after Buildings & Infrastructure, confirmed its return to organic growth!
I want here to highlight a recent key win: BV has been awarded a 5-year 64 million euros contract in OPEX Services in the Middle East with Qatargas. It illustrates the success of our OPEX Growth Initiative
EBM: You often refer to the 5 growth initiatives implemented a few years ago. Can you elaborate on this now?
Didier Michaud-Daniel: First, may I remind you of the objective of our 5 growth initiatives: it is to move the Group from an over dependence on Commodities to a more resilient and diversified company.
Two years and a half after the launch of our 2020 strategic plan, our 5 Growth Initiatives now represent one third of Group revenue: they generated almost 7% organic growth in the first half. The Group diversification is well underway.
Let me take a minute to thank the people of Bureau Veritas. They have been truly instrumental for us to achieve these results. Our efforts, collectively, are putting us in the best position to see our revenue growing this year onwards.
EBM: And can you share with us the performance of your base business?
Didier Michaud-Daniel: Base business represents 2/3 of Group revenues today. The good news is that it was up 2% organically in H1, and up 3% in the second quarter.
Marine & Offshore as well as Oil & Gas Capex related activities remain under pressure: nevertheless, it is very encouraging to see that the pipeline in CAPEX Oil & Gas is recovering; indeed, we have identified a significant number of new opportunities to target in the months to come.
Other activities performed well, notably Certification recording a strong growth thanks to the standards’ revision.
EBM: Now Didier, last time we met, you were very vocal on Digitalization. Can you update us on this topic and share the latest developments for Bureau Veritas in this field?
Didier Michaud-Daniel: Yes Nadia, our digital Transformation relies on 3 pillars:
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 Block chain. I truly believe that these are the current challenges to be tackled by the TIC industry.
We have already deployed several projects in the field around the world to serve our clients.
Recently, we announced a further move towards collaborative Building Information Modeling – BIM – notably through our partnership with Autodesk, leader in 3D software
This partnership will enable improvement to current building compliance practices through BIM from the earliest stages of building project design. Through this alliance, both companies are accelerating the digitalization of control processes during all phases of the project (design, construction & operation)
BIM has become a pre-requisite to win most of B&I tenders in many countries.
For BV, Nadia, it is also an effective way to raise barriers to entry and enhance efficiency.
We are very proud to participate, through BIM, in the design and in the construction of one of the next iconic building in Asia: the Shanghai Planetarium.
EBM: Now, along with the Buildings & Infrastructure, where else do you see digital progressing fast at Bureau Veritas?
Didier Michaud-Daniel: Of course, in Marine & Offshore with the connected surveyors, digital scheduling and digital twin already deployed since a while now.
And our Consumer products division has taken a quantum leap in Digital:
First the SmartWorld Initiative is delivering great results, growing fast with the testing of connecting objects. This is a huge market for us considering that in 2025 there will be around 75 billion connected objects on earth.
Second, we progressively invite our customers to use our digital platforms “One Source” and “Inspec by BV” to place orders and the follow up of their requests.
Now almost half of our revenue in our Consumer Product division is done through our digital client portals.
EBM: Didier, anything to add?
Didier Michaud-Daniel: Yes Nadia! 2 messages:
First, Of course a quick focus on our 3 absolutes – Safety/Ethics/Financial Control, which are the prerequisites for anyone who works at BV.
Second, I want to finish on the vision, the purpose of Bureau Veritas.
Today Consumers, Citizens, and Society as a whole asks for More Quality, Safety, Health and better environment: this is what BV is about.
Tomorrow, I want Bureau Veritas to be recognized as the Undisputed Digital Leader in the TIC industry bringing Trust between Companies, Governments & Citizens to produce, consume and live better.
Our 75,000 employees are proud to work every day for a Business to Business to Society company, contributing to transform the world we live in.
EBM: Didier Michaud-Daniel, thank you very much.
Didier Michaud-Daniel: Thank you Nadia.
