BUREAU VERITAS: Improving performance in the third quarter of 2020
PRESS RELEASE
Neuilly-sur-Seine, France – October 22, 2020
Improving performance in the third
quarter of 2020
Q3 2020 Key Figures1
- Revenue of EUR 1,148 million in the third quarter of 2020, down
4.4% organically, and down 9.6% year on year (of which an external
growth net of divestment of -0.3% and a currency impact of
-4.9%)
- Organically, 3 out of 6 businesses grew at 1.9% on average:
Certification +7.0%, Marine & Offshore +1.9% and Buildings
& Infrastructure +0.6%
- The 3 other businesses were down: Agri-Food & Commodities
-7.5%, Industry -8.2% and Consumer Products -11.0%
Q3 2020 Highlights
- Evidence of enhanced resilience through diversification. Nearly
half of the Group’s portfolio grew organically in the quarter
- Strong rebound in the Certification business, benefiting from
both “Restart Your Business with BV” and Safeguard missions as well
as catch-up of audits
- Continued outperformance in New Construction and In-Service
activities in Marine & Offshore
- Return to growth of the Buildings & Infrastructure
portfolio mainly driven by Opex
- Mixed environment for Agri-Food & Commodities (solid trends
in Agri-food and Metals & Minerals were largely offset by weak
Oil markets) and Industry (where the resilient Opex contracts were
offset by the freeze in Oil & Gas Capex projects)
- Consumer Products’ diversification further strengthened against
a backdrop of weak sector trends
- Divestment of non-core business unit in the US (USD 12 million
of annual revenue) that provided fugitive emissions detection and
measurement services on industrial assets
2020 Outlook
·Amongst the different scenarios considered by
Bureau Veritas, for the full year 2020, the “Slow & gradual
recovery” scenario is the scenario retained to date considering the
latest available information and assuming the absence of lockdown
measures in the Group’s main countries – see page 3
Didier Michaud-Daniel, Chief Executive Officer,
commented:
“During the third quarter, the Group continued
to face some very exceptional circumstances. In this historically
challenging context, Bureau Veritas demonstrated remarkable
resilience with an organic revenue decline limited to -4.4%. These
results were driven by an excellent performance in Certification,
Buildings & Infrastructure, Marine & Offshore and in Food
businesses.
This reflects both the relevance of our strategy
and the effectiveness of its implementation. The very good health
of all the financial markers is the result of several years of
transformation that have led Bureau Veritas to become a resilient
company, perfectly positioned to take a new step forward in its
development.
Our expertise in quality, health and safety, and
sustainability is at the very heart of the challenges faced today
by businesses and by society as a whole.
We offer today a green line of services and
solutions to all clients and stakeholders. We partner with them in
their efforts to improve their performance in both the transparency
and trustworthiness of all their actions and across all areas
notably sustainability.
I believe that our role as an independent third
party is already essential to build trust between economic players.
This has now become a vital link in the chain of actions towards
making our economy more transparent and more responsible for our
planet and its inhabitants.”
Q3 2020 key revenue figures
|
|
|
GROWTH |
IN EUR MILLIONS |
Q3 2020 |
Q3 2019 |
TOTAL |
ORGANIC |
SCOPE |
CURRENCY |
Marine
& Offshore |
89.3 |
91.4 |
(2.3)% |
+1.9% |
- |
(4.2)% |
Agri-Food & Commodities |
252.5 |
293.3 |
(13.9)% |
(7.5)% |
- |
(6.4)% |
Industry |
235.1 |
281.4 |
(16.5)% |
(8.2)% |
(0.5)% |
(7.8)% |
Buildings & Infrastructure |
327.6 |
337.5 |
(2.9)% |
+0.6% |
(0.8)% |
(2.7)% |
Certification |
88.5 |
85.5 |
+3.5% |
+7.0% |
+0.3% |
(3.8)% |
Consumer Products |
155.3 |
181.6 |
(14.5)% |
(11.0)% |
+0.1% |
(3.6)% |
Total Group revenue |
1,148.3 |
1,270.7 |
(9.6)% |
(4.4)% |
(0.3)% |
(4.9)% |
Revenue in the third quarter of 2020 amounted to
EUR 1,148.3 million, a 9.6% decrease compared with Q3 2019. Organic
decline was 4.4%, compared to a 15.6% decrease in the second
quarter.
By geography, activities in Europe strongly
outperformed the rest of the Group (37% of revenue; up 1.3%
organically), with notably robust performances in France (up 4.6%)
and in South Europe (up 5.3%). Asia Pacific (32% of revenue; down
4.8% organically) was primarily affected by weak activity levels in
Greater China for consumer products, strong decline in South Korea
(due to a major contract completion in Industry) and India (impact
from lockdown measures), while solid trends were achieved in
Australia led by the agri-food and commodities markets.
Activity in the Americas (23% of revenue)
decreased by 10.2% organically, mostly dragged down by North
America (the US and Canada); while Latin America (Brazil, Argentina
and Colombia) showed a good level of resistance (down 1.0%
organically), where it continued to benefit from the successful
diversification strategy towards Opex, in Power & Utilities
notably, and solid Agricultural activities. Finally, in Africa and
the Middle East (8% of revenue), the business declined by 6.3%,
driven down by the energy sector.
External growth was a negative 0.3%, reflecting
the impact from the disposal of the Emissions Monitoring business
unit in the US.
Currency fluctuations had a negative impact of
4.9%, mainly due to the depreciation of some emerging countries’
currencies against the euro.
M&A Transactions
There have been no acquisitions in 2020
year-to-date. Bureau Veritas placed its M&A activity on hold
early in the year to protect its cash position and reassess
potential targets in light of the pandemic. This forms one of the
measures deployed to maintain a tight rein on costs and cash.
Disposal of the Emissions
Monitoring business in the US
On September 2, 2020, Bureau Veritas divested a
non-core business unit from the Industry activity based in the US.
The Emissions Monitoring business providing fugitive emissions
detection and measurement services on industrial assets, was sold
to Alliance Source Testing, LLC (AST), one of the largest air
emissions testing companies in the US. The business had 130
employees and generated USD 12 million in revenue in 2019 however
margins weighed on the overall divisional performance. It has been
deconsolidated from Q3 2020 onwards.
This transaction is another step in focusing on
core quality assurance for Oil & Gas capital projects and asset
integrity businesses in North America and to invest in the
expansion of its Energy business including renewables.
Financial position
At the end of September 2020, the Group's
adjusted net financial debt slightly decreased compared with the
level at June 30, 2020. The Group has a solid financial structure
with no maturities to refinance until 2023. At September 30, 2020,
Bureau Veritas had EUR 1.9 billion in available cash and cash
equivalents and EUR 500 million in undrawn committed credit lines.
2020 Outlook
Amongst the different scenarios considered by
Bureau Veritas2, for the full year 2020, the “Slow & gradual
recovery” scenario is the scenario retained to date considering the
latest available information and assuming the absence of lockdown
measures in the Group’s main countries.
“Slow & gradual recovery” scenario –
retained to date
Organic revenue |
Adjusted operating margin |
Net cash generated from operating activities |
- Mid to high single-digit decline in 2020
- Improvement from H1 onwards
|
·Low double-digit margin
|
- Focus on cash generation
- Capex of c. 2% of revenue
- Working Capital Requirement (WCR) / revenue ratio of c. 9%
|
“Muted recovery” scenario – ruled out to
date
Organic revenue |
Adjusted operating margin |
Net cash generated from operating activities |
- High single-digit decline in 2020
- H2 in negative territory
|
·Low double-digit margin |
- Focus on cash generation
- Capex of c. 2% of revenue
- WCR / revenue ratio of c. 9%
|
“Worsening pandemic throughout H2” scenario –
ruled out to date
Organic revenue |
Adjusted operating margin |
Net cash generated from operating activities |
- Double-digit decline in 2020
- H2 worse than H1
|
·Low double-digit margin |
- Focus on cash generation
- Capex below 2% of revenue
- WCR / revenue ratio above 9%
|
Q3 2020 Business
Review
MARINE & OFFSHORE
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
89.3 |
91.4 |
(2.3)% |
+1.9% |
- |
(4.2)% |
9M revenue |
274.3 |
272.3 |
+0.7% |
+2.9% |
- |
(2.2)% |
The Marine & Offshore business demonstrated
a solid 1.9% organic revenue growth in the third quarter from +3.4%
in the first half of 2020. The Group continued to deliver essential
services. driving the organic performance as follows:
- Mid-single-digit growth in New Construction (42% of divisional
revenue), notably driven by South Korea, against challenging
comparables;
- Low single-digit growth in the Core In-service activity (43% of
divisional revenue), a reflection of the fleet’s modest growth and
still relatively low level of laid‑up ships. After a weak second
quarter, the Group benefited from favorable timing of inspections
during Q3. At September 30, 2020, the fleet classified by Bureau
Veritas comprised of 11,443 ships, representing 129.8 million of
Gross Register Tonnage (GRT), up 0.6% year on year (based on the
number of ships);
- High single-digit decline for Services (15% of divisional
revenue, including Offshore) dragged down by the Offshore business
(7% of divisional revenue) which continued to be penalized by the
impact of low oil prices, essentially for marine warranty survey
services, and the impact of travel restrictions. This was partly
offset by the expansion of the portfolio of resilient services
(i.e. cybersecurity, water ballast management, inventory of
hazardous materials).
New orders totaled 4.1 million gross tons at the
end of September 2020, from 4.9 million gross tons in the prior
year period, This brings the order book to 14.4 million gross tons
at the end of the quarter, up 1.5% compared to December 31, 2019
(14.2 million gross tons), and remains very well diversified with
LNG vessels and specialized ships (such as dredging, naval, fishing
and expedition cruise) representing a significant share of the
orders.
This reflects the Group’s continued significant
outperformance against a market down high double-digit
year-to-date. Bureau Veritas continues to benefit from its strong
positioning on the most dynamic market segments, namely
LNG-propelled and LNG bunkering vessels segment.
The Group continues to pursue its strategy to
develop innovative services for alternative fuels, including fuel
cells and hydrogen, as well as digital solutions. As an example of
innovative smartship solutions, Bureau Veritas has been closely
collaborating with the French Flag Register to enhance and enable
the SeaOwl Group to roll out its innovative remote-operated vessel
project (Remotely Operated Services at Sea). In concrete terms, it
allowed a Paris-based captain to take full remote-control command
of a vessel navigating in the Mediterranean off the port of
Toulon.
AGRI-FOOD & COMMODITIES
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
252.5 |
293.3 |
(13.9)% |
(7.5)% |
- |
(6.4)% |
9M revenue |
769.6 |
867.6 |
(11.3)% |
(7.6)% |
+0.2% |
(3.9)% |
Revenue decreased 7.5% organically in the third
quarter of 2020, with the following performance across the
business:
Oil & Petrochemicals
(O&P) (32% of divisional revenue) reported a double-digit
organic decline, with similar trends in both Trade and Upstream
activities. The competitive environment in the O&P Trade market
remained challenging with intense pricing pressure as some major
oil companies are cutting costs in response to the reduction in
demand and price of oil. By region, above average performance was
achieved in Asia and in Europe while the activity was more severely
hit in Americas, reflecting an ongoing challenging competitive
environment together with weather constraints caused notably by the
hurricane season affecting the Gulf Coast. Non-trade activities
(marine fuels testing and Oil Condition Monitoring) recorded
resilient performance: Verifuel bunker quantity services returned
to growth in Q3, mainly in Asia where markets opened up earlier
than Europe or Americas following the lockdown measures. The Group
identified several opportunities and triggered actions to diversify
into non trade-related activities.
Metals & Minerals (M&M)
(30% of divisional revenue) achieved a resilient organic
performance in the quarter, led by a 2.1% growth for Upstream
activities (65% of M&M) while Trade-related activities
continued to recover from Q2 but still down 7.5% against very
strong Q3 2019 comparables. Upstream delivered solid growth in all
geographies with the exception of the Americas. Gold exploration
and mining activity continued to be very buoyant and is driving
significant growth in the upstream minerals testing market. New
mine site outsourcing contract wins (Australia, Asia and West
Africa) contributed to growth.
Agri-Food (24% of divisional
revenue) recorded a solid performance with a low single-digit
organic improvement, with food activities and Agricultural testing
and inspection services remaining critical to the food supply in
the current context of Covid-19. The Food business delivered a
healthy 4.4% organic revenue growth primarily fueled by Asia
(growing double-digit, including China) and the Pacific region
(with Australia growing mid-single-digit), a region where the Group
is gaining market share. The Agri Upstream business was stable as
the Agricultural inspection activities remained strong in Brazil,
while the pandemic continued to reduce volumes for harvest
monitoring services (in Chile, Peru and Argentina notably).
Government services (14% of
divisional revenue) recorded a low double-digit organic decline in
the third quarter as a result of the pandemic in some African
countries (South Africa, Nigeria and DRC) and in the Middle East
(Saudi Arabia, Iraq), and due to unfavorable comparables in the
prior-year period. This was partially offset by the ramp-up of
Single Window contracts in DRC and the VOC (Verification of
Conformity) in Morocco, Tanzania, and Zimbabwe notably. In the
medium term, the Group identified numerous opportunities such as
fuel marking services in African countries.
INDUSTRY
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
235.1 |
281.4 |
(16.5)% |
(8.2)% |
(0.5)% |
(7.8)% |
9M revenue |
708.7 |
815.8 |
(13.1)% |
(7.3)% |
(0.2)% |
(5.6)% |
Industry revenue declined by 8.2% organically in
the third quarter of 2020, showing a gradual improvement from the
15.8% decline recorded in the second quarter. This reflects the
various market situations in the context of the Covid-19 pandemic.
The Power & Utilities segment continued to be a key contributor
to growth. Conversely, Oil & Gas activities dragged down
the divisional performance as many projects were frozen, although
their weight to the Group revenue has significantly reduced to
c.7%, of which 3% are Capex-related.
By geography, growth was very strong in China
and in certain European countries, including Spain. Performance was
solid in Latin America (led primarily by Chile, Argentina, and
Brazil) thanks to strong commercial development (P&U activities
notably) and in Australia, whilst the pressures on the oil industry
resulted in significant declines in the US (exposed to drilling)
and in the Middle East.
Opex-related activities continued its resilient
performance in Q3 2020 with ensuring the continuity of services
being “business critical”. The growth was supported by the Power
& Utilities segment (16% of divisional revenue), for which
Opex-related activities grew double-digit organically, with the
ramp-up of several contracts with various Power distribution
clients (notably in Argentina and Chile). They also benefited from
a solid momentum in Europe.
In Oil & Gas (28% of divisional revenue),
the market conditions remained very difficult in the third quarter:
Capex-related activities declined double-digit organically,
essentially attributed to Asia (with South Korea impacted by a
large contract completion) and the Middle East (with projects being
put on hold). The business grew however in China, Latin America
(led by Peru and gas-related projects) and in South & West
Europe. While Oil opportunities remain muted (with decision process
on hold in many countries), the prospects are materially better for
gas-related projects. In the meantime, business opportunities in
Opex services remained good overall.
Elsewhere, business has been impacted in varying
degrees. Critical infrastructure projects have continued to
progress. Non-essential operational monitoring projects were put on
hold during the lockdown period and have gradually restarted since
restrictions have been lifted. Growth was achieved in the Chemicals
sector, while Construction and Transportation were slightly
down.
In the medium term, the Group will strongly
benefit from the growth opportunities related to renewables and
alternative energies. The European Green Deal will accelerate
previously identified trends towards energy transition and targets
of carbon neutrality.
BUILDINGS & INFRASTRUCTURE
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
327.6 |
337.5 |
(2.9)% |
+0.6% |
(0.8)% |
(2.7)% |
9M revenue |
939.0 |
1,002.2 |
(6.3)% |
(3.4)% |
(1.8)% |
(1.1)% |
Buildings & Infrastructure (B&I) revenue
improved organically to 0.6% in the third quarter from -5.4% in the
first half of 2020, confirming the gradual recovery of the
activity. B&I posted a total revenue decline of 2.9% in Q3 2020
resulting from the 0.8% negative scope effect, and the negative
currency impact. The three growth platforms across different
geographies (Europe, Asia Pacific and North America) form the
foundation to B&I’s resilience.
The performance was strong for the Buildings
In-service activities (57% of divisional revenue), which were up
low double-digit organically, benefiting from a catch-up of
regulatory driven activities not delivered during the first half.
Conversely, Construction-related activities (43% of divisional
revenue) declined significantly.
Growth in Europe (56% of divisional revenue) was
robust, with similar performance by country: France (44% of
divisional revenue) grew 4.2% organically, strongly benefiting from
a catch-up of regulatory-driven business primary led by HSE and the
execution of its healthy backlog of Opex-related works (around
three-quarters of the French business). Capex-related works
remained under pressure though the situation improved compared to
Q2 which saw many projects being paused. Spain, Italy, the UK
recorded mid-single-digit growth while the Netherlands grew high
single-digit. In the medium term, the Group expects to benefit from
the numerous investment programs in the EU (including the Green
deal in France and in other countries such as Germany) aiming at
supporting the green economy.
The Group recorded solid organic growth in Asia
Pacific (25% of divisional revenue) led by China; in the continuity
of the previous quarter, its Chinese operations delivered 10.1%
organic revenue growth supported by positive prospects in energy
and transport infrastructure project management assistance. Looking
forward, Bureau Veritas expects to benefit from the Chinese
government’s support to the domestic economy through long term
infrastructure spending.
In the Americas (17% of divisional revenue), a
high single-digit organic decline was recorded primarily dragged
down by Latin America apart from Brazil (down 12.3% led by
Colombia, Argentina and Mexico). The United States (negative 7.6%
organic growth) showed a mixed performance: it continued to benefit
from strong dynamics in data center commissioning services which
partly offset other markets hit by restrictions on movement and
projects being put on hold. In Q3, organic growth achieved 25.3% as
the Group’s clients accelerated data center commissioning
requirements to support the increase in homebased working.
CERTIFICATION
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
88.5 |
85.5 |
+3.5% |
+7.0% |
+0.3% |
(3.8)% |
9M revenue |
230.5 |
268.1 |
(14.0)% |
(12.7)% |
+0.5% |
(1.8)% |
In the third quarter of 2020, the Certification
business recovered by 7.0% organically, benefiting from both
initiatives related to restarting the business at the end of the
lockdown (“Restart Your Business with BV”) and from a catch-up of
postponed audits. During the third quarter the Group demonstrated
its strong agility with the rescheduling of a significant number of
man-days that had been initially planned in H1.
Most geographies experienced a rebound in
organic growth with the exception of a few countries that were
still affected by lockdown measures and restrictions on movement
(Brazil, India) or decision of delaying certificates validity (in
the food and automotive industry). The strongest recovering
countries were France, Spain, Canada, Italy, all growing
double-digit organically, and to a lesser extent, Japan, Australia
and China (the latter having stabilized already in Q2).
Within the Group’s portfolio, the services and
schemes that outperformed the most were those most impacted by H1
postponements by clients and where remote audits were less used or
not authorized during the lockdowns: Food Certification
(double-digit growth led notably by organic products), Transport
schemes (growing high single-digit organically), and Supply chain
& Sustainability services (growing high single-digit) led by
Environmental Certification and Wood management systems
certification. Conversely, training services remained impacted due
to restrictions on movement (cancellation of face-to-face training
sessions, replaced in some cases by digital training).
The Group’s portfolio diversification continued
with new products development being up 4.3% in the third quarter of
2020 compared to the prior year. In risk management, Bureau Veritas
continued to develop the portfolio of solutions dedicated to
companies around Anti-bribery, Asset Management, and Business
Continuity.
In Sustainability, Bureau Veritas provides
companies with solutions to measure and verify the different
aspects of their energy, climate change, social responsibility
commitments and objectives. In the third quarter, the Group
certified the first Climate Bonds emission worldwide for an
Agriculture project in Brazil.
During the quarter the Group continued to
deliver services remotely through digital solutions. 12% of man
days were delivered remotely, at a similar level to in the first
half.
In the medium to long term, the Group expects
the Sustainability and ESG related topics to be amongst the key
growth drivers for the Certification business.
CONSUMER PRODUCTS
IN EUR MILLIONS |
2020 |
2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Q3
revenue |
155.3 |
181.6 |
(14.5)% |
(11.0)% |
+0.1% |
(3.6)% |
9M revenue |
426.7 |
521.3 |
(18.1)% |
(17.4)% |
+0.1% |
(0.8)% |
The Consumer Products business posted an organic
revenue decline of 11.0% in the third quarter of 2020, being an
improvement compared to the Q2 performance (down 22.8%). This
reflected less disruption generally from lockdown measures across
the Group’s operations as well as persistent low activity levels
remaining with American and European clients (new product launches
on hold). Testing activities continued to be under pressure (down
double-digit) while the Inspection and Audit services reached
quasi-stability during the quarter.
By geography, the Group experienced robust
growth in South Asia, South East Asia (led by Vietnam, Bangladesh
and Sri Lanka essentially) as well as Latin America while activity
levels remained weak in Greater China, Europe and the US.
Softlines (32% of divisional
revenue) performed broadly in line with the divisional average,
with a mixed performance by region: Solid growth in South Asia and
South East Asia (excluding India still highly impacted by the
lockdown measures) continuing to benefit from the sourcing shift
out of China; return to growth in Europe and very weak trends in
Greater China (though improving sequentially) due to a reduced
level of new product launches. Overall, the activity continued to
suffer from difficult trading conditions with large US retailers,
and the effects of further bankruptcies.
Hardlines (33% of divisional
revenue) performed below the divisional average, dragged down by
most geographies, China and the US in particular. Toys remained
under pressure owing to reduced activity amongst key clients.
Conversely, inspection and Audit services (14% of divisional
revenue) proved to be very resilient with strong growth experienced
in China, as it notably benefited from a continued solid momentum
on CSR services (social audits). The international e-commerce
platform for mass market supplier audits (inSpec-bv.com), which was
launched two years ago, continued to gain traction amongst the
Group customers and contributed to the growth.
Electrical & Electronics
(35% of divisional revenue) performed better than the divisional
average, with a contrasted situation by sub-segment: resilient
performance in Mobile testing (wireless technologies / Internet of
Things (IoT) products) while very challenging in Automotive
(reliability testing and homologation services), dragged down by
China. Growth was solid in South Korea and Latin America while it
was significantly negative in the US (difficult trading conditions
with brands and OEM) and in Europe (France notably). In Asia,
5G-related products and infrastructures continued to show good
momentum with the Group’s Asian test platforms (South Korea and
Taiwan in particular) now running at full capacity and backed by a
good backlog. The Group will pursue its investment plan to fully
seize the 5G opportunity and consolidate its leadership in the
connectivity testing services.
The Group continues to pursue its
diversification strategy towards new geographies (in South and
South East Asia, Latin America and Africa in particular but also
China to address the domestic market), new product lines by
expanding its Electric & Electronics platform to new countries
(such as Vietnam and Indonesia) and new clients (towards online
players and middle market).
For the rest of the year, the Group sees no
change in trends and remains cautious given the uncertainty
relating to the economic conditions from Covid-19 and the impacts
from trade tariffs discussions.
Presentation
- Q3 2020 revenue will be presented on Thursday, October 22,
2020, at 6:00 p.m. (Paris time - CEST)
- A video conference will be webcast live. Please connect to:
Link to video conference
- The presentation slides will be available on:
https://group.bureauveritas.com
- All supporting documents will be available on the website
- Live dial-in numbers:
- France: +33 (0)1 70 37 71 66
- UK: +44 (0)20 3003 2666
- US: +1 212 999 6659
- International: +44 (0)20 3003 2666
- Password: Bureau Veritas
2020 Financial
Calendar
- Full-Year 2020 Results: February 25, 2021
- Q1 2021 revenue: April 22, 2021
- H1 2021 Results: July 28, 2021
- Q3 2021 revenue: October 26, 2021
Investor Day (to be held in Paris, France) will
take place during H2 2021 (the exact date remains to be
confirmed).
About Bureau
Veritas
Bureau Veritas is a world leader in laboratory
testing, inspection and certification services. Created in 1828,
the Group has more than 75,000 employees located in more than 1,500
offices and laboratories around the globe. Bureau Veritas helps its
clients improve their performance 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, ISIN
code FR 0006174348, stock symbol: BVI.For more information, visit
www.bureauveritas.com, and follow us on Twitter (@bureauveritas)
and LinkedIn.
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ANALYST/INVESTOR CONTACTS |
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MEDIA CONTACTS |
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Laurent Brunelle |
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Véronique Gielec |
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+33 (0)1 55 24 76 09 |
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+33 (0)1 55 24 76 01 |
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laurent.brunelle@bureauveritas.com |
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veronique.gielec@bureauveritas.com |
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Florent Chaix |
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DGM Conseil |
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+33 (0)1 55 24 77 80 |
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+33 (0)1 40 70 11 89 |
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florent.chaix@bureauveritas.com |
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This press release (including the appendices)
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 Universal Registration Document (“Document d’enregistrement
universel”) filed by Bureau Veritas with the French Financial
Markets Authority (“AMF”) 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.
Appendix 1: Q3 and 9M
2020 Revenue by business
IN EUR MILLIONS |
Q3 / 9M 2020 |
Q3 / 9M 2019 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Marine
& Offshore |
89.3 |
91.4 |
(2.3)% |
+1.9% |
- |
(4.2)% |
Agri-Food & Commodities |
252.5 |
293.3 |
(13.9)% |
(7.5)% |
- |
(6.4)% |
Industry |
235.1 |
281.4 |
(16.5)% |
(8.2)% |
(0.5)% |
(7.8)% |
Buildings & Infrastructure |
327.6 |
337.5 |
(2.9)% |
+0.6% |
(0.8)% |
(2.7)% |
Certification |
88.5 |
85.5 |
+3.5% |
+7.0% |
+0.3% |
(3.8)% |
Consumer Products |
155.3 |
181.6 |
(14.5)% |
(11.0)% |
+0.1% |
(3.6)% |
Total Q3 revenue |
1,148.3 |
1,270.7 |
(9.6)% |
(4.4)% |
(0.3)% |
(4.9)% |
Marine
& Offshore |
274.3 |
272.3 |
+0.7% |
+2.9% |
- |
(2.2)% |
Agri-Food & Commodities |
769.6 |
867.6 |
(11.3)% |
(7.6)% |
+0.2% |
(3.9)% |
Industry |
708.7 |
815.8 |
(13.1)% |
(7.3)% |
(0.2)% |
(5.6)% |
Buildings & Infrastructure |
939.0 |
1,002.2 |
(6.3)% |
(3.4)% |
(1.8)% |
(1.1)% |
Certification |
230.5 |
268.1 |
(14.0)% |
(12.7)% |
+0.5% |
(1.8)% |
Consumer Products |
426.7 |
521.3 |
(18.1)% |
(17.4)% |
+0.1% |
(0.8)% |
Total 9M revenue |
3,348.8 |
3,747.3 |
(10.6)% |
(7.4)% |
(0.4)% |
(2.8)% |
Appendix
2: 9M 2020 REVENUE BY QUARTER
|
2020 REVENUE BY QUARTER |
|
IN EUR MILLIONS |
Q1 |
Q2 |
Q3 |
|
Marine
& Offshore |
94.4 |
90.6 |
89.3 |
|
Agri-Food & Commodities |
272.7 |
244.4 |
252.5 |
|
Industry |
253.3 |
220.3 |
235.1 |
|
Buildings & Infrastructure |
318.2 |
293.2 |
327.6 |
|
Certification |
76.6 |
65.4 |
88.5 |
|
Consumer Products |
124.3 |
147.1 |
155.3 |
|
Total revenue |
1,139.5 |
1,061.0 |
1,148.3 |
Appendix 3:
Definition of alternative performance indicators and reconciliation
with IFRS
The management process used by Bureau Veritas is
based on a series of alternative performance indicators, as
presented below. These indicators were defined for the purposes of
preparing the Group’s budgets and internal and external reporting.
Bureau Veritas considers that these indicators provide additional
useful information to financial statement users, enabling them to
better understand the Group’s performance, especially its operating
performance. Some of these indicators represent benchmarks in the
testing, inspection and certification (“TIC”) business and are
commonly used and tracked by the financial community. These
alternative performance indicators should be seen as a complement
to IFRS-compliant indicators and the resulting changes.
GROWTH
Total revenue growth
The total revenue growth percentage measures
changes in consolidated revenue between the previous year and the
current year. Total revenue growth has three components:
- organic growth;
- impact of changes in the scope of consolidation (scope
effect);
- impact of changes in exchange rates (currency effect).
Organic growth
The Group internally monitors and publishes
“organic” revenue growth, which it considers to be more
representative of the Group’s operating performance in each of its
business sectors.
The main measure used to manage and track
consolidated revenue growth is like-for-like, or organic growth.
Determining organic growth enables the Group to monitor trends in
its business excluding the impact of currency fluctuations, which
are outside of Bureau Veritas’ control, as well as scope effects,
which concern new businesses or businesses that no longer form part
of the Group’s existing activities. Organic growth is used to
monitor the Group’s performance internally.
Bureau Veritas considers that organic growth
provides management and investors with a more comprehensive
understanding of its underlying operating performance and current
business trends, excluding the impact of acquisitions, divestments
(outright divestments as well as the unplanned suspension of
operations – in the event of international sanctions, for example)
and changes in exchange rates for businesses exposed to foreign
exchange volatility, which can mask underlying trends.
The Group also considers that separately
presenting organic revenue generated by its businesses provides
management and investors with useful information on trends in its
industrial businesses, and enables a more direct comparison with
other companies in its industry.
Organic revenue growth represents the percentage
of revenue growth, presented at Group level and for each business,
based on constant scope of consolidation and exchange rates over
comparable periods:
- constant scope of consolidation: data are restated for the
impact of changes in the scope of consolidation over a 12‑month
period;
- constant exchange rates: data for the current year are restated
using exchange rates for the previous year.
Scope effect
To establish a meaningful comparison between
reporting periods, the impact of changes in the scope of
consolidation is determined:
- for acquisitions carried out in the current year: by deducting
from revenue for the current year revenue generated by the acquired
businesses in the current year;
- for acquisitions carried out in the previous year: by deducting
from revenue for the current year revenue generated by the acquired
businesses in the months in the previous year in which they were
not consolidated;
- for disposals and divestments carried out in the current year:
by deducting from revenue for the previous year revenue generated
by the disposed and divested businesses in the previous year in the
months of the current year in which they were not part of the
Group;
- for disposals and divestments carried out in the previous year,
by deducting from revenue for the previous year revenue generated
by the disposed and divested businesses in the previous year prior
to their disposal/divestment.
Currency effect
The currency effect is calculated by translating
revenue for the current year at the exchange rates for the previous
year.
1 Alternative performance indicators are presented, defined and
reconciled with IFRS in appendix 3 of this press release.
2 As presented at the H1 2020 results publication on July 28,
2020.
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