FULL YEAR 2019 RESULTS · portfolio management to dispose ... 2019 PORTFOLIO BY NATURE OF SERVICES...

FEBRUARY 27, 2020

FULL YEAR2019 RESULTS

Disclaimer

2

This presentation contains statements related to our future business and financial performance and

future events or developments involving Bureau Veritas that may constitute forward-looking

statements. These statements are based on current plans and forecasts of Bureau Veritas’

management and may be identified by words such as “expect”, “forecast”, “look forward to”,

“anticipate”, “intend”, “plan”, “believe”, “seek”, “estimate”, “will”, “project” or words of similar meaning.

Such forward-looking statements are by their nature subject to a number of risks, uncertainties and

factors, including without limitation those described in the Document de référence filed with the

French Autorité des marchés financiers (“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, except to the extent required by law, to update or revise any of

them, whether as a result of new information, future events or otherwise.

FULL YEAR 2019 RESULTS

Agenda

HIGHLIGHTS

BUSINESS REVIEW

OUTLOOK

FINANCIAL REVIEW

Q&A

APPENDIX

HIGHLIGHTS

FY 2019 financial highlights


• Total growth of +6.3% (Q4 at +7.3%)

• Organic revenue growth of +4.3% (Q4 at +5.3%)

• External growth of +1.2% (Q4 at +1.4%) with 5 transactions completed

• Positive currency impact of 0.8% (with +0.6% in Q4 2019)

Year-on-year changes are calculated by comparing data for FY 2019 after applying IFRS 16 with data for FY 2018

1) Total progression of 50 basis points, including 25 basis points positive impact from IFRS 16

5

+6.3% y/y

€5.1bn

• Margin improving by 50bps year-on-year to 16.3% (after applying IFRS 16)1

• At constant currency, before applying IFRS 16, margin progressed by 20bps year-on-year to 16.0%

• Adjusted operating profit of €819m before applying IFRS 16, translating into a 16.1% margin (+25bps)+9.7% y/y

€832m

GROUP

REVENUE

ADJUSTED

OPERATING

PROFIT

• Earnings per share at €83 cents, +9.2% year-on-year

• Adjusted earnings per share at €1.02 cents (+6.3% year-on-year)+8.1% y/y

€451mADJUSTED

NET

PROFIT

• Full-year free cash flow stands at €618m, improving year-on-year by 29.2% (after applying IFRS 16)

• Further benefits from Move For Cash program visible on the reduction of the working capital requirement

• Adjusted ND/EBITDA ratio reduced from 2.3x at the end of Dec. 2018 to 1.9x at the end of Dec. 2019

• 2019 dividend of €0.56 per share (55% payout ratio), stable versus last year+29.2% y/y

€618mFREE

CASH

FLOW

Industry

Bureau Veritas achieves an excellent operational and financial performance


IMPROVED PORTFOLIO RESILIENCY

6

STRONG FUNDAMENTALS ACROSS THE BUSINESS ACTIVITIES

• Portfolio repositioned towards faster and

resilient businesses: more Opex services

& Consumer end-markets

• Selective M&A strategy and active

portfolio management to dispose

non-strategic assets

• Accelerated digital transformation

with new services and partnerships

(0.6)%

2.2%

4.0%

4.0% 4.0% 3.9%

5.3% 4.3%

SOLID ORGANIC GROWTH MOMENTUM

1) FY 2019 growth at constant currency (organic and scope)

Agri-Food

& Commodities

Marine

& Offshore

Buildings

& Infrastructure

+7.9%1

+6.3%1 +6.8%1

+5.0%1

Bureau Veritas’ strong fundamentals driving an excellent set of 2019 results


Solid organic revenue growth

Continued adjusted operating margin

improvement at constant currency

Sustained strong cash flow generation

ACHIEVEMENTS

+4.3%Organic growth

+20bpsOrganic + scope

before applying IFRS 16

12.1%of 2019 Group revenue

7

45%

33%

22%

Bureau Veritas portfolio repositioning provides for an enhanced resiliency


2019 PORTFOLIO BY NATURE OF SERVICES

8

Capex

Opex & Systems

Repeat business with long term

visibility and high retention rates,

mainly driven by regulation and

standards

B&I US

B&I China

B&I Europe

Products

=Oil & Gas

Marine

Offshore =

Agri-Food & Commodities

(volume driven)

Consumer Products

(innovation driven)

IN PERCENTAGE OF GROUP REVENUE

Bureau Veritas continues to support its clients in their Corporate Social

Responsibility commitments

FULL YEAR 2019 RESULTS 9

BUREAU VERITAS STRATEGY IS ALIGNED WITH UN’S

SUSTAINABLE DEVELOPMENT GOALS (SDG)

BUREAU VERITAS IS AMONGST THE INDUSTRY LEADERS

ACCORDING TO NON-FINANCIAL RATING FIRMS

• Fully integrated in the Group’s core operations above industry

average (B-)

Brating

75/100 vs. industry

average of 38/100

2nd

most responsible

company worldwide

in the Professional

Services industry

FINANCIALREVIEW

Bureau Veritas made significant progress in its financial profile


+7bpsscope impact on adj. op. margin

+29%free cash flow change year-on-year

2.8%average cost of debt

Sustained financing activity to lengthen the average maturity and optimize the cost of debt

Strong free cash flow improvement, with positive effects from the Move For Cash program still being deployed, contributing into a material decrease in the leverage

Active portfolio management with further disposals

11

KEY INDICATORS

FY 2019 total revenue growth of 6.3%


REVENUE EVOLUTION VARIATION ANALYSIS

(1) Organic growth represents the percentage of revenue growth (presented at Group level and for each activity) based on constant scope of consolidation (i.e. acquisitions excluded) and exchange rates over comparable periods

12

FY 2018 Organic Scope Currency FY 2019

4,795.5

+5.5% at constant currency

1

5,099.7+4.3% +1.2% +0.8%

FY 2019 revenue growth by business

13

Consumer Products

% of revenue

@ constant currency

100%

Industry

Buildings & Infrastructure


Total Group

Marine & Offshore

Certification

6.7%

3.2%

6.4%

4.9%

2.3%

(1.5)%

4.3%

1.2%

3.6%

(0.1)%

0.1%

0.2%

1.2%

Organic Acquisitions


14%

+5.0%

+2.3%

+7.9%

+6.8%

+6.3%

(1.3)%

27%

7%

22%

23%

7%

+5.5%

Q4 2019 revenue growth by business

14

Consumer Products

% of revenue

@ constant currency

100%

Certification


Industry

Total Group


9.3%

6.6%

6.7%

2.8%

2.8%

2.4%

5.3%

1.0%

0.5%

4.3%

(0.3)%

1.4%

Organic Acquisitions


13%

+7.1%

+2.8%

+9.3%

+7.6%

+7.2%

+2.1%

22%

7%

8%

22%

28%

+6.7%

Marine & Offshore

FY 2019 acquisitions adding €46m of revenue1

(1) Annualized revenue ; including Shenzen Total-Test Technology announced on April 18, 2019, which will be consolidated from Q2 2019 onwards

(2) Perimeter of full BVAQ joint-venture operations in South East Asia Pacific combined with DTS. Transaction closed on December 28, 2018 and announced on January 3, 2019


• Consulting business unit providing health,

safety and environmental services in

North America (c.USD 30m revenue in

2018)

HSE CONSULTING BUSINESS

IN NORTH AMERICAFRANCE, JANUARY

€23m

Agricultural products, processed food, additives, baby food,

animal feed and non-medical cosmetic testing services

Consulting and support services for white

certificate projects

Food testing joint venture created with AsureQuality in

Singapore providing services to South East Asian markets.

9 laboratories and more than 500 staff2

ASIA, JANUARY

€4m (additional revenue)

Asset management and project

compliance services

USA, MARCH

€7m

CHINA, APRIL1

€10m

ITALY, AUGUST

c.€2m

Organic certification services for food products against

national and international standards

BUILDINGS & INFRASTRUCTURE AGRI-FOOD DISPOSALS

• The purpose is to streamline the

organization

• Achieved in targeted geographies (North

America and Europe notably) and focused

on under-performing units

A NUMBER OF LABORATORIES

AND OFFICES DIVESTED

FY 2019 key financial metrics


FINANCIAL HIGHLIGHTS

(1) Year-on-year changes are calculated by comparing data for FY 2019 after applying IFRS 16 with data for FY 2018

(2) Adjusted operating profit and adjusted net profit exclude amortization of acquisition intangibles, goodwill impairment, restructuring, acquisition and disposal-related items

16

IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

y/y1

Change

y/y at

constant

currency1

Revenue 5,099.7 5,099.7 4,795.5 +6.3% +5.5%

Adjusted operating profit2 831.5 818.5 758.0 +9.7% +6.9%

Adjusted operating margin2 16.3% 16.1% 15.8% +50bps +45bps

Operating profit 721.3 708.3 637.2 +13.2% +12.3%

Adjusted net profit 451.0 454.5 417.2 +8.1% +12.9%

Attributable net profit 367.9 371.4 332.6 +10.6% +21.2%

Adjusted EPS 1.02 1.03 0.96 +6.3% +10.9%

EPS 0.83 0.84 0.76 +9.2% +19.9%

Operating cash flow 820.4 711.4 685.5 +19.7% +18.7%

Free cash flow 617.9 508.9 478.4 +29.2% +28.1%

Adjusted Net Debt 1,813.3 1,813.3 2,115.1 (14.3)%

Adjusted operating margin (1/2)


GROUP MARGIN EVOLUTION

17

FY 2018 Organic Scope Margin at Forex FY 2019 IFRS 16impact

FY 2019

+5bps

15.8%16.1%

+7bps+13bps

before

applying

IFRS 16

constant

currency

16.3%

+25bps

after

applying

IFRS 16

16.0%

+20bps at constant currency

Adjusted operating margin (2/2)


GROUP MARGIN EVOLUTION

18

FY 2019

after

applying

IFRS 16

FY 2019

before

applying

IFRS 16

FY 2018

Total

change1

y/y (bp)

Organic

y/y (bp)

Scope

y/y (bp)

Currency

y/y (bp)

IFRS 16

y/y (bp)

Marine & Offshore 22.1% 22.0% 21.1% +104 +55 +35 +4 +10

Agri-Food & Commodities 13.8% 13.4% 12.3% +153 +79 +39 (5) +40

Industry 12.7% 12.4% 12.5% +26 (9) (5) +8 +32

Buildings & Infrastructure 15.2% 15.1% 14.8% +45 +38 (8) +6 +9

Certification 17.4% 17.3% 17.8% (34) (50) +2 +0 +14

Consumer Products 24.6% 24.3% 24.9% (26) (53) +0 (8) +35

Group 16.3% 16.1% 15.8% +50 +13 +7 +5 +25


+20bps

From adjusted operating profit to operating profit


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

y/y1

Adjusted operating profit 831.5 818.5 758.0 +9.7%

Amortization of intangibles

assets resulting from

acquisitions(79.8) (79.8) (75.1) +6.3%

Restructuring costs (24.4) (24.4) (42.1) (42.0)%

Acquisitions and disposals (6.0) (6.0) (3.6) (66.7)%

Operating profit 721.3 708.3 637.2 +13.2%

Actions taken mainly

in Industry, Buildings &

Infrastructure and

commodities related-activities

ADJUSTMENT ITEMS


Net financial expenses


FINANCIAL RESULT

20

IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

y/y1

Net financial charges (100.2) (83.4) (82.5) +21.5%

Foreign exchange gains/(losses) (10.0) (8.9) (5.7) +75.4%

Interest cost on pension plans (4.4) (4.4) (2.3) +91.3%

Other financial products and

expenses(4.0) (4.0) (2.7) +48.1%

Net financial expenses (118.6) (100.7) (93.2) +27.3%

EUR16.8m impact from

IFRS 16 and slight

increase in average

indebtedness

Higher foreign exchange

loss thanks to the

appreciation of the USD

and the euro against most

emerging countries’

currencies


Tax / Tax rate


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

y/y1

Profit before Tax 603.3 608.2 544.4 +10.8%

Tax (210.7) (212.0) (189.3) +11.3%

Effective Tax Rate (ETR) 34.9% 34.9% 34.8% +10bps

Adjusted ETR 33.1% 33.1% 33.3% (20)bps

Decrease mainly

explained by the new

rules for the tax

deduction of interest

applicable in France from

2019


ADJUSTED EFFECTIVE TAX RATE EVOLUTION

Cash flow statement


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

y/y1

Profit before income tax 603.3 608.2 544.4 +10.8%

Elimination of financing and investing

activities134.9 117.0 87.4 +54.3%

Provisions and other non-cash items (13.4) (13.4) 25.8 n.m.

Depreciation, amortization and impairment 305.2 210.8 200.3 +52.4%

Income tax paid (192.4) (192.4) (176.5) +9.0%

Movements in working capital (17.2) (18.8) 4.1 n.m.

Net cash generated from operating

activities820.4 711.4 685.5 +19.7%

Net capex (122.7) (122.7) (124.1) (1.1)%

% of revenue 2.4% 2.4% 2.6% (20)bps

Interest paid (79.8) (79.8) (83.0) (3.9)%

Free cash flow 617.9 508.9 478.4 +29.2%

Strong increase in the free cash

flow driven by:

i. Profit before income tax

growth

ii. Disciplined capex

iii. Lower interest paid

iv. Positive impact from

IFRS 16

(1) Year-on-year changes are calculated by comparing

data for FY 2019 after applying IFRS 16 with data for

FY 2018

STRONG CASH IMPROVEMENT

10.0%

9.7%(1)

9.0%

8.8%

Dec. 2016 Dec. 2017 Dec. 2018 Dec. 2019

Improving working capital requirement ratio


WORKING CAPITAL REQUIREMENT / REVENUE RATIO

(1) EUR 453.2 million published in 2017, translating into 9.7% of Group revenue. After restatement for the

application of IFRS 9, WCR stands at EUR 426.7 million, translating into 9.1% of Group revenue

23

MOVE FOR CASH CONTINUING TO BE DEPLOYED

Operations and Finance cash champions network

• Global network of 140 “cash champions” across the Group within all

functions, not exclusively finance

Deployment of cash rules within the network, such as

• Payment terms renegotiation

• Upfront payments and settlement of milestones for long duration contracts

Concrete actions plans

• Local action plans, developed and implemented by operations

• Tailor-made action plans according to customer profile and services

Management incentives in place

• Part of the variable compensation

Leverage ratio improved to 1.9x from 2.3x


ADJUSTED NET DEBT EVOLUTION

24

(2,115.1) +617.9

(98.5)(97.3)

(109.0) (11.3) (1,813.3)

Dec. 31,

2019

Free

cash

flow

Acquis. Dividends

Lease

payments

(IFRS 16)

Other

(incl. FX)

Dec. 31,

2018

(1) Adjusted net financial debt / EBITDA adjusted for all businesses acquired over the past 12 months, as defined for the Group’s covenants calculation. Covenants’ calculation defined contractually and excluding IFRS 16

DEBT MATURITY PROFILE AS OF DEC. 31, 2019

(2) Proposed dividend, subject to Shareholders’ Meeting approval on May 14, 2020

IN EUR MILLIONS

PROPOSED DIVIDEND PAYABLE IN CASH IN 2020

• Dividend of EUR 0.56 per share2 for 2019

Successful dividend payment in shares in 2019

• Opted for by 78.47% of shareholders (66.45% excluding Wendel)

WELL MANAGED LEVERAGE RATIO

NET DEBT / EBITDA RATIO1 – BANK COVENANT AT 3.25x

2.37

2.82

2.34 2.25

1.87

Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019 Dec. 2019

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Already refinanced

358

589

147

500 500

678

200

138178

BUSINESS REVIEW

Unless specified otherwise, the information presented and discussed in this section

consists of financial data after the restatements resulting from the application of

IFRS 16 in the full-year consolidated financial statements.

Bureau Veritas’ portfolio is delivering resilient growth and expanding margins

(1/3)


Marine & Offshore Agri-Food & Commodities

2019

highlights

• High single-digit growth in New Construction

• Low single-digit growth in In-Service activities

• New orders up 7% to 6.5m (GRTm) vs. market decreasing

• Agri-Food: double-digit growth, led by new services and new lab openings; market share gain in Food

• M&M: high single-digit growth; led by Upstream & Trade

• O&P: low single-digit growth; weak US, solid elsewhere

• Strong fundamentals for the Agri-Food business

• Solid Metals & Minerals markets

• Resilient Oil & Petrochemicals markets (IMO 2020 small benefit)

• Good momentum in new construction activity thanks to its healthy backlog

• Resilient Core in-service activity

• Improving Offshore-related activities

• Strong dynamics for LNG as a fuel

2020

trends

+4.9%Organic growth

22.1%Adjusted operating margin1

+6.7%Organic growth


1) Data presented after applying IFRS 16


(2/3)


Industry Buildings & Infrastructure

2019

highlights

• Double-digit growth for Capex Oil & Gas activities

• Mid-single-digit growth for Opex Oil & Gas activities

• Double-digit growth for P&U – strong wins in Latam

• High single-digit growth in Asia Pacific (China and Japan)

• Mid-single-digit growth in the Americas; led by the US

• Stable in the largest country, France with improvement in Q4 (accelerating recruitment trend in H2)

• Good prospects for capex-related activities (infrastructure in China, data center commissioning in the US notably)

• Opportunities related to ageing assets in developed countries

• Healthy backlog for Opex-related services in France

• Focus on energy efficiency programs

• Covid-19: negative impact on operations

• Oil & Gas markets: further improvement

• Power & Utilities markets: strong growth opportunities

• Rising outsourcing for Opex related works

2020

trends

+6.4%Organic growth


+3.2%Organic growth




(3/3)


Certification Consumer Products

2019

highlights

• Slightly negative growth as expected attributed to the end of the 3-year standards revision period; Q4 positive

• Double-digit growth for social and customized audits, sustainability / CSR and organic food certification

• New products development continuing (Circular+)

• E&E: growth in Europe (mobile testing) and weaker in the US (effects of several bankruptcies and tariffs uncertainty)

• Hardlines: stable toys, strong cosmetics and social audits

• Softlines: strong momentum in South Asia & SEA; stable in China and weak in the US

• Strong momentum in South & South East Asia driven by an accelerated sourcing shift out of China

• Moderate growth in Europe

• More challenging conditions in the US and in China (tariffs discussion)

• Negative impact from Covid-19 in Q1 2020 due to containment measures

• More demand for brand protection and traceability all along the supply chain

• Strong dynamics for Sustainability & CSR schemes, Food Certification, specialized standards related to Risk Management, Cybersecurity and Medical device

2020

trends

(1.5)%Organic growth


+2.3%Organic growth



OUTLOOK

Impact on the business due to Covid-19


HOW DOES IT AFFECT THE BUSINESS?

30

SAFETY IS AN ABSOLUTE: ACTIONS WERE TAKEN TO PROTECT

OUR PEOPLE

• Closely monitoring the economic inactivity associated with the Covid-19 outbreak

• Direct impact on the Group’s operations: primarily in China (17% of Group revenue, 16,461 employees1), potentially elsewhere

• Both testing-driven consumer goods activities and audit and inspections activities are affected

WHAT IS THE FINANCIAL IMPACT?

• In the current circumstances, the impact on revenue is expected to be in the range of EUR 60 million to EUR 100 million

• The Group will provide further updates on the situation in due course

1) As of December 31, 2019

2020 Outlook


Achieve solid

organic revenue

growth

Focus on protecting

the adjusted

operating margin

at constant currency

Generate

sustained strong

cash flow

Option 2

The Group remains uniquely positioned considering the diversity and the resilience of its portfolio.

Given the negative impact of the Covid-19 force majeure, Bureau Veritas expects for the full year 2020 to:

In the current circumstances, Bureau Veritas expects the impact to be primarily in Q1 2020.

Conclusion: Bureau Veritas delivers


Full benefits of portfolio transformation & diversification

Resilient growth profile with good progress made on profitability

High free cash flow generation & deleveraged balance sheet

Q&A

2020 Financial Calendar & Contacts


Laurent Brunelle

Head of Investor Relations

+33 (0)1 55 24 76 [email protected]

Florent Chaix

Investor Relations Manager

+33 (0)1 55 24 77 [email protected]

INVESTOR RELATIONS DEPARTMENTBUREAU VERITAS HEAD OFFICE – 40/52 BOULEVARD DU PARC

92200 NEUILLY-SUR-SEINE, FRANCE• Barclays, TIC Conference, London – June 4, 2020

• Exane BNP Paribas, CEO Conference, Paris

– June 10, 2020

Q1 2020 revenue – April 23, 2020 (after market close)

Shareholders’ Meeting – 14 May 2020

H1 2020 Results – July 28, 2020 (after market close)

Investor Day in Paris – September 29, 2020

Q3 2020 revenue – October 22, 2020 (after market close)

2020 AGENDA

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APPENDIX

KEY FIGURES

• New Construction: high single-digit growth, driven

by the equipment certification business in North

East Asia

• Core In-Service: low single-digit growth, fleet

slightly up, stabilized pricing and small IMO benefit

• Services (incl. Offshore): low single-digit growth

led by the extension of services

• New orders up 7.3% to 6.5m (GRTm) versus a

global market being down double-digit

• Strong margin improvement (leverage, mix &

restructuring benefit)

Marine & Offshore (7% of revenue, 10% of profit)


KEY FINANCIALS1

36

2019 HIGHLIGHTS

2020 TRENDS

• Good momentum in new construction activity thanks

to its healthy backlog

• Resilient Core in-service activity

• Improving Offshore-related activities

• Strong dynamics for LNG as a fuel

IN EUR MILLIONS FY 2019 FY 2018 Var.

Revenue

Organic

368.5 348.6 +5.7%

+4.9%

Acquisitions +0.1%

Currency +0.7%

AOP 81.5 73.5 +10.9%

AOP Margin 22.1% 21.1% +104bps

40%

43%

17% New Construction

Core In-Service

Services(incl. Offshore)

Source: Bureau Veritas ; in millions gross tons


High single-digit growth

in New Construction

Low single-digit growth

in In-Service activities

6.1 6.5

14.0 14.2

119.8126.6

50.0

60.0

70.0

80.0

90.0

100.0

110.0

120.0

130.0

0

5

10

15

20

25

30

Dec. 2018 Dec. 2019

New orders Order book In-Service fleet

Marine market perspective


Source: Clarksons (September 2019, base case forecast)

37

0

20

40

60

80

100

120

IN MGT

20-year average

Source: Bureau Veritas data

Bulk

Tanker

Gas

Offshore

Passenger

Container

Other

IN NUMBER OF SHIPS, FOR SHIPS ABOVE 5,000 GT

• Very diversified order book with expanding shares for Bulk,

LNG vessels, Tankers, and Passenger ships

WORLDWIDE NEW SHIP ORDERS BUREAU VERITAS NEW SHIP ORDER BOOK

KEY FIGURES

IN EUR MILLIONS 2019 2018 Var.

Revenue

Organic

1,168.2 1,074.5 +8.7%

+6.7%

Acquisitions +1.2%

Currency +0.8%

AOP 161.4 132.0 +22.3%


Agri-Food & Commodities (23% of revenue, 19% of profit)


KEY FINANCIALS1

38

2020 TRENDS

• Strong fundamentals for the Agri-Food business

• Solid Metals & Minerals markets

• Resilient Oil & Petrochemicals markets (IMO 2020

small benefit)

Agri-Foodsub-segment

+10.8%*organic

36%

28%

22%

14% Oil & Petrochemicals

Metals & Minerals

Agri-Food

Government Services

*FY 2019 organic revenue growth including Food certification


• O&P: low single-digit growth

Strong growth in Europe and Africa (new services);

slightly negative growth in North America (difficult

competitive dynamics)

Double-digit growth for OCM and Marine fuels

• M&M: high single-digit growth led by both Trade and

Upstream related activities across most geographies

• Agri-Food: double-digit growth led by both Agri and

Food across all geographies

• GS: benefiting from the full ramp-up of VOC and

single window contracts in several African countries

• Significant margin improvement (leverage, mix

and restructuring)

2019 HIGHLIGHTS

Market share gains in Food

Geographic and services expansion

in Metals & Minerals

Industry (22% of revenue, 17% of profit)


• Oil & Gas Capex: low double-digit growth

confirming the recovery observed over the year

US, Latam & Africa (+) ; Asia (=)

• Oil & Gas Opex: mid-single-digit growth led by

Latam (Argentina & Colombia), South & West

Europe

• Non Oil & Gas: double-digit growth for Power &

Utilities – ramp-up of large contract wins in Latam

• Organic margin slightly down on mix

(Opex-led / mobilization costs)

• Oil & Gas markets: further improvement

• Power & Utilities markets: strong growth

opportunities

• Rising outsourcing for Opex related works

+14.6% OPEX P&U*

+7.3% OPEX O&G*

20%

16%

13%9%

9%

4%2%

27%

Oil & Gas Opex

Oil & Gas Capex

Power & Utilities

Manufacturing

Construction

Transport

Chemicals

Other


Revenue

Organic

1,111.1 1,052.8 +5.5%

+6.4%

Acquisitions (0.1)%

Currency (0.8)%

AOP 141.4 131.1 +7.9%



2019 HIGHLIGHTS

2020 TRENDS

KEY FIGURESKEY FINANCIALS1

Power & Utilities: a key growth engine

Recovery of the Oil & Gas markets

Growth led by Latam, US

and certain European countries

*FY 2019 organic revenue growth

Launch of BV Solutions to offer

more value added packages

Focus on energy efficiency programs

thanks to Capital Energy acquisition

Buildings & Infrastructure (27% of revenue, 25% of profit)


Construction-related activities (44% of

divisional revenue) mid-single-digit growth

• Spread across most geographies, particularly

strong in Asia Pacific, led by China and Japan

and strong in the US in data center

commissioning services (PI)

Building In-Service (56% of divisional revenue):

low single-digit growth

• Slightly up in Europe including France (2/3rd is

Opex); slow start due to recruitment issues,

partly addressed in the last quarter

Good margin improvement (efficiency and mix)

• Good prospects for capex-related activities

(infrastructure in China, data center commissioning

in the US notably)

• Opportunities related to ageing assets in

developed countries

• Healthy backlog for Opex-related services in

France

• Focus on energy efficiency programs

• Covid-19: negative impact on operations

23%

15%

4%

3% Europe

Asia Pacific

North America

Latam

Africa, Middle East55%

of which

France 42%

China*(15% of B&I rev.)

+9.5%**organic

*energy and infrastructure project

management assistance


Revenue

Organic

1,379.2 1,275.7 +8.1%

+3.2%

Acquisitions +3.6%

Currency +1.3%

AOP 209.7 188.2 +11.4%



2019 HIGHLIGHTSKEY FINANCIALS1

2020 TRENDS

KEY FIGURES

**FY 2019 organic revenue growth

Accreditation granted by UKAS for

CORSIA program (Carbon Offsetting &

Reduction Scheme for International

Aviation) to support airlines in verifying

carbon emissions levels

Launch of Circular+ to accompany

companies in the evolution towards a

circular economy model

Certification (7% of revenue, 8% of profit)


• Slightly negative growth as expected attributed to

the end of the 3-year standards revision period

• Decline of QHSE and Transportation Certification

markets (absence of transition man-days)

• Growth elsewhere supported by more demand for

brand protection and traceability

• Double-digit growth for Social & customized

audits, Sustainability / CSR and Food Certification

• Margin down (less volume and mix effects

cushioned by margin initiatives)

• More demand for brand protection and traceability

all along the supply chain

• Strong dynamics for Sustainability & CSR

schemes, Food Certification, specialized

standards related to Risk Management,

Cybersecurity and Medical device

41%

34%

25%QHSE

Supply Chain &Sustainability

CustomizedSolutions & Training

Portfolio diversificationnew products development

+25.5%*organic


Revenue

Organic

370.5 373.7 (0.9)%

(1.5)%

Acquisitions +0.2%

Currency +0.5%

AOP 64.5 66.4 (2.9)%

AOP Margin 17.4% 17.8% (34)bps


KEY FINANCIALS1 2019 HIGHLIGHTS

2020 TRENDS

KEY FIGURES


Tariffs discussion: still a “wait & see

attitude” from some customers

Investment in 5G equipment

to support the development

of its activities in

wireless technologies

Consumer Products (14% of revenue, 21% of profit)


• E&E: flat overall. Good growth in Mobile testing and

Europe; difficult trading conditions in the US

(bankruptcies)

• Hardlines: growth below divisional average driven by

South East Asia and Europe; Toys stable; double

digit growth for Cosmetics and social audits

• Softlines: growth in line with divisional average with

mixed situation: strong momentum in South & SE

Asia (benefiting from sourcing shift out of China)

while weak trading conditions in the US

• Slight margin decline (lower growth and mix)

• Strong momentum in South & South East Asia

driven by an accelerated sourcing shift out of

China

• Moderate growth in Europe

• More challenging conditions in the US and in

China (tariffs discussion)

• Negative impact from Covid-19 in Q1 2020 due to

containment measures

35%

32%

33%

Softlines

Hardlines, Toys,Audits

Electrical &Electronics


Revenue

Organic

702.2 670.2 +4.8%

+2.3%

Acquisitions -

Currency +2.5%

AOP 173.0 166.8 +3.7%

AOP Margin 24.6% 24.9% (26)bps

South East Asiamainly Softlines

+18.7%*organic


KEY FINANCIALS1 2019 HIGHLIGHTS

2020 TRENDS

KEY FIGURES


Full Year 2019 revenue by business


FY 2019

IN EUR MILLIONS €m Organic Scope Currency

Marine & Offshore 368.5 +4.9% +0.1% +0.7%

Agri-Food & Commodities 1,168.2 +6.7% +1.2% +0.8%

Industry 1,111.1 +6.4% (0.1)% (0.8)%

Buildings & Infrastructure 1,379.2 +3.2% +3.6% +1.3%

Certification 370.5 (1.5)% +0.2% +0.5%

Consumer products 702.2 +2.3% - +2.5%

Total Group 5,099.7 +4.3% +1.2% +0.8%

BREAKDOWN OF REVENUEREVENUE AND YEAR-ON-YEAR REVENUE GROWTH

7%

23%

22%

27%

7%

14%

Marine & Offshore


Industry


Certification

Consumer products

Q4 2019 total revenue growth of 7.3%


Q4 2018 Organic Scope Currency Q4 2019

1,260.6+5.3% +1.4% +0.6%

+6.7% at constant currency

1

REVENUE EVOLUTION

(1) Organic growth represents the percentage of revenue growth (presented at Group level and for each activity) based on constant scope of consolidation (i.e. acquisitions excluded) and exchange rates over comparable periods

1,352.4

Q4 2019 revenue by business

45

Q4 2019

IN EUR MILLIONS €m Organic Scope Currency

Marine & Offshore 96.2 +2.4% (0.3)% +0.9%

Agri-Food & Commodities 300.6 +6.6% +1.0% +0.8%

Industry 295.3 +9.3% - (1.5)%

Buildings & Infrastructure 377.0 +2.8% +4.3% +1.1%

Certification 102.4 +6.7% +0.5% +0.8%

Consumer products 180.9 +2.8% - +2.0%

Total Group 1,352.4 +5.3% +1.4% +0.6%

BREAKDOWN OF REVENUEREVENUE AND YEAR-ON-YEAR REVENUE GROWTH

7%

22%

22%

28%

8%

13%Marine & Offshore


Industry


Certification

Consumer products


Adjusted Operating Profit by business after applying IFRS 16


Adjusted operating profit (€m) Adjusted operating margin (%)

IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FY 2018Change

(%)

FY 2019

AFTER

APPLYING

IFRS 16

FY 2018Change

(bp)

Marine & Offshore 81.5 73.5 +10.9% 22.1% 21.1% +104

Agri-Food & Commodities 161.4 132.0 +22.3% 13.8% 12.3% +153

Industry 141.4 131.1 +7.9% 12.7% 12.5% +26

Buildings & Infrastructure 209.7 188.2 +11.4% 15.2% 14.8% +45

Certification 64.5 66.4 (2.9)% 17.4% 17.8% (34)

Consumer products 173.0 166.8 +3.7% 24.6% 24.9% (26)

Total Group 831.5 758.0 +9.7% 16.3% 15.8% +50

Adjusted Operating Profit by business before applying IFRS 16


Adjusted operating profit (€m) Adjusted operating margin (%)

IN EUR MILLIONS

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

(%)

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018Change

(bp)

Marine & Offshore 81.2 73.5 +10.5% 22.0% 21.1% +94

Agri-Food & Commodities 156.6 132.0 +18.6% 13.4% 12.3% +113

Industry 137.7 131.1 +5.0% 12.4% 12.5% (6)

Buildings & Infrastructure 208.4 188.2 +10.7% 15.1% 14.8% +36

Certification 64.0 66.4 (3.6)% 17.3% 17.8% (48)

Consumer products 170.6 166.8 +2.3% 24.3% 24.9% (61)

Total Group 818.5 758.0 +8.0% 16.1% 15.8% +25

Consolidated income statement


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FIRST TIME

APPLICATION

OF IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018

Revenue 5,099.7 5,099.7 4,795.5

Purchase and external charges (1,438.3) 107.4 (1,545.7) (1,418.0)

Personnel costs (2,596.8) (2,596.8) (2,507.1)

Taxes other than on income (45.8) (45.8) (46.2)

Net (additions to) / reversals of provisions (9.2) (9.2) (11.8)

Depreciation and amortization (305.3) (94.4) (210.9) (200.3)

Other operating income and expense, net 17.0 17.0 25.1

Operating Profit 721.3 13.0 708.3 637.2

Share of profit of equity-accounted companies 0.6 0.6 0.4

Operating profit after share of profit of equity-accounted

companies721.9 13.0 708.9 637.6

Income from cash and cash equivalents 2.1 2.1 1.8

Finance costs, gross (102.3) (16.8) (85.5) (84.3)

Finances costs, net (100.2) (16.8) (83.4) (82.5)

Other financial income and expense, net (18.4) (1.1) (17.3) (10.7)

Net financial expense (118.6) (17.9) (100.7) (93.2)

Profit before income tax 603.3 (4.9) 608.2 544.4

Income tax expense (210.7) 1.3 (212.0) (189.3)

Net profit from continuing operations 392.6 (3.6) 396.2 355.1

Net income (loss) from discontinued operations - - -

Net Profit 392.6 (3.6) 396.2 355.1

Non-controlling interests 24.7 (0.1) 24.8 22.5

Attributable net profit 367.9 (3.5) 371.4 332.6

Consolidated statement of financial position (1/2)

FULL YEAR 2019 RESULTS49

IN EUR MILLIONS

DEC. 2019

AFTER

APPLYING

IFRS 16

FIRST TIME

APPLICATION

OF IFRS 16

DEC. 2019

BEFORE

APPLYING

IFRS 16

DEC. 2018

Goodwill 2,075.1 2,075.1 2,011.6

Intangible assets 611.1 611.1 634.6

Property, plant and equipment 444.9 444.9 471.1

Right-of-use assets 369.0 369.0 - -

Other non-current financial assets 118.3 118.3 114. 8

Deferred income tax assets 132.1 9.9 122.2 135.3

Total non-current assets 3,750.5 378.9 3,371.6 3,367.4

Trade and other receivables 1,520.0 (2.0) 1,522.0 1,409.0

Contract assets 226.0 226.0 206.9

Current income tax assets 47.0 47.0 49.8

Current financial assets 23.4 23.4 13.1

Derivative financial instruments 4.4 4.4 3.8

Cash and cash equivalents 1477.8 1,477.8 1,046.3

Total current assets 3,298.6 (2.0) 3,300.6 2,728.9

Total assets 7,049.1 376.9 6,672.2 6,096.3

Share capital 54.2 54.2 53.0

Retained earnings and other reserves 1,209.6 (40.4) 1,250.0 906.3

Equity attributable to shareholders of the Company 1,263.8 (40.4) 1,304.2 959.3

Non-controlling interests 58.3 (1.0) 59.3 48.3

Total equity 1,322.1 (41.4) 1,363.5 1,007.6

Consolidated statement of financial position (2/2)

FULL YEAR 2019 RESULTS50

IN EUR MILLIONS

DEC. 2019

AFTER

APPLYING

IFRS 16

FIRST TIME

APPLICATION

OF IFRS 16

DEC. 2019

BEFORE

APPLYING

IFRS 16

DEC. 2018

Non-current borrowings and financial debt 2,918.5 2,918.5 2,655.7

Non-current lease debt 326.0 326.0 - -

Derivative financial instruments - - 6.7

Other non-current financial liabilities 115.7 115.7 125.0

Deferred income tax liabilities 122.9 122.9 127.4

Pension plans and other long-term employee benefits 192.8 192.8 185.6

Provisions for other liabilities and charges 72.2 72.2 105.1

Total non-current liabilities 3,748.1 326.0 3,422.1 3,205.5

Trade and other payables 1,098.6 (0.3) 1,098.9 1,024.8

Contract liabilities 197.2 197.2 158.0

Current income tax liabilities 137.4 137.4 71.2

Current borrowings and financial debt 369.0 369.0 499.0

Current lease debt 92.6 92.6 - -

Derivative financial instruments 4.9 4.9 4.4

Other current financial liabilities 79.2 79.2 125.8

Total current liabilities 1,978.9 92.3 1,886.6 1,883.2

Total equity and liabilities 7,049.1 376.9 6,672.2 6,096.3

Consolidated statement of cash flow (1/2)


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FIRST TIME

APPLICATION

OF IFRS 16

GY 2019

BEFORE

APPLYING

IFRS 16

FY 2018

Profit before income tax 603.3 (4.9) 608.2 544.4

Elimination of cash flows from financing and investing

activities134.9 17.9 117.0 87.4

Provisions and other non-cash items (13.4) (13.4) 25.8

Depreciation, amortization and impairment 305.2 94.4 210.8 200.3

Movements in working capital attributable to

operations(17.2) 1.6 (18.8) 4.1

Income tax paid (192.4) (192.4) (176.5)

Net cash generated from operating activities 820.4 109.0 711.4 685.5

Acquisitions of subsidiaries (69.9) (69.9) (141.5)

Proceeds from sales of subsidiaries and businesses 7.9 7.9 -

Purchases of property, plant and equipment and

intangible assets(127.9) (127.9) (130.9)

Proceeds from sales of property, plant and equipment

and intangible assets5.2 5.2 6.8

Purchases of non-current financial assets (18.3) (18.3) (18.6)

Proceeds from sales of non-current financial assets 12.8 12.8 9.9

Change in loans and advances granted (5.3) (5.3) (0.8)

Dividends received from equity-accounted companies 1.3 1.3 0.2

Net cash used in investing activities (194.2) (194.2) (274.9)

Consolidated statement of cash flow (2/2)


IN EUR MILLIONS

FY 2019

AFTER

APPLYING

IFRS 16

FIRST TIME

APPLICATION

OF IFRS 16

FY 2019

BEFORE

APPLYING

IFRS 16

FY 2018

Capital increase 3.1 3.1 2.6

Purchases / sale of treasury shares 14.5 14.5 (30.9)

Dividends paid (97.3) (97.3) (277.7)

Increase in borrowings and other debt 719.9 719.9 833.4

Repayments of borrowings and other debt (608.5) (608.5) (166.4)

Repayments of amounts owed to shareholders (36.5) (36.5) -

Repayment of lease liabilities (109.0) (109.0) - -

Interest paid (79.8) (79.8) (83.0)

Net cash generated from (used in) financing

activities(193.6) (109.0) (84.6) 278.0

Impact of currency translation differences (1.5) (1.5) (8.5)

Impact of changes in accounting method - - -

Net increase (decrease) in cash and cash

equivalents431.1 431.1 680.1

Net cash and cash equivalents at beginning of the

period1,034.6 1,034.6 354.5

Net cash and cash equivalents at end of period 1,465.7 1,465.7 1,034.6

o/w cash and cash equivalents 1,477.8 1,477.8 1,046.3

o/w bank overdrafts (12.1) (12.1) (11.7)

Adjusted net financial debt


IN EUR MILLIONS

DEC. 2019

AFTER APPLYING

IFRS 16

DEC. 2019

BEFORE APPLYING

IFRS 16

DEC. 2018

Non-current borrowings and debt (2,918.5) (2,918.5) (2,655.7)

Current borrowings and debt (356.9) (356.9) (487.3)

Bank overdrafts (12.1) (12.1) (11.7)

Gross financial debt (3,287.5) (3,287.5) (3,154.7)

Total cash and cash equivalents 1,477.8 1,477.8 1,046.3

Net financial debt (1,809.7) (1,809.7) (2,108.4)

Impact of currency hedging instruments (3.6) (3.6) (6.7)

Adjusted net financial debt (1,813.3) (1,813.3) (2,115.1)

Earnings per share


IN EUR MILLIONS

FY 2019

AFTER APPLYING

IFRS 16

FY 2019

BEFORE APPLYING

IFRS 16

FY 2018

Basic EPS 0.83 0.84 0.76

Basic adjusted EPS 1.02 1.03 0.96

Weighted average number of shares 442,259,428 442,259,428 435,786,895

Diluted EPS 0.83 0.83 0.76

Diluted adjusted EPS 1.01 1.02 0.95

Weighted average number of shares for diluted earnings 445,864,595 445,864,595 439,376,999

7%

23%

22%

27%

7%

14%

Marine & Offshore


Industry


Certification

Consumer products

Portfolio of business


REVENUE BY BUSINESS

55


ADJUSTED OPERATING PROFIT1

2019

10%

19%

17%25%

8%

21%

Marine & Offshore


Industry


Certification

Consumer products

2019

5.4%

2.6%

6.6%

4.8%

0.1%

2.8%

(0.2)%

0.8%

Americas Europe Africa,Middle-East

Asia Pacific

Organic growth

Acquisition growth

Revenue is growing in all geographies


REVENUE BY GEOGRAPHIC AREA

56

REVENUE GROWTH BY NATURE

Americas25%

Europe35%

Africa, Middle East9%

Asia Pacific

31%5.4%

6.4%

5.6%

5.5%

Forex impact in FY 2019


REVENUE CURRENCY EXPOSURE

• Large exposure to USD and emerging market currencies

(90+ currencies overall)

57

EUR 27.9%

USD (and pegged)19.4%

CNY 11.6%

CAD 4.0%

GBP 3.8%

AUD 3.8%

BRL 3.1%

CLP 2.3%

JPY 2.1%

INR 1.7%

SGD 1.5%TWD 1.4%KRW 1.4%

COP 1.3%RUB 1.0%

PEN 0.9%XOF 0.9%

OTHER11.9%

FY 2019

CURRENCY CHANGE Y/Y

+5.5%

+0.9%

+3.0%

+0.8%

(1.9)%

(2.4)%

(3.8)%

+6.9%

+2.4%

+4.3%

+2.8%

(0.5)%

(5.1)%

+2.2%

+3.8%

(0.0)%

USD (and pegged)

CNY

CAD

GBP

AUD

BRL

CLP

JPY

INR

SGD

TWD

KRW

COP

RUB

PEN

XOF

FY 2019 restructuring: EUR 24.4 million


BY BUSINESS

58

BY GEOGRAPHY

5%

32%

22%

29%

7%5%

Marine & Offshore


Industry


Certification

Consumer Products

59%

6%

7%

28%

Europe

Africa, Middle East

Asia Pacific

Americas

Well diversified sources of financing with a balanced maturity profile


DEBT MATURITY PROFILE AS OF DEC. 31, 2019

59

96%

4%

Fixed rate

Floating rate

75%

22%

3%

EURO

USD

Other

DEBT BREAKDOWN

67%

24%

6%

2%1%

Bond

USPP

Schuldschein

China Loan

Other

(1) At December 31, 2019, on the basis of the core debt adjusted for 2020 and 2021 maturities partially

refinanced during 2019, for a total amount of EUR 678 million.

• Gross financial debt of €3,287.5m

• Maturities spread over the years with average maturity at 5.8 years1

• Blended average cost of funds over the full year of 2.8%

• Strong liquidity position €1,477.8m cash and cash equivalents and

€600m undrawn syndicated facility

500 500 500

200

500

146

89

45

178

138 178

98

102

70

44

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Bond

USPP

Schuldschein

China Loan

Other

Already refinanced


INTRODUCTION

60

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 (1/2)

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.

Definition of alternative performance indicators and reconciliation with IFRS (1/5)

TOTAL REVENUE GROWTH

The management process used by the Bureau Veritas Group 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.


ORGANIC GROWTH (2/2)

61

SCOPE EFFECT


Organic revenue growth represents the percentage of revenue growth,

presented at Group level and for each business, based on a 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.

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.


ADJUSTED OPERATING PROFIT

62


Adjusted operating profit and adjusted operating margin are key indicators

used to measure the recurring performance of the business, excluding

material items that cannot be considered inherent to the Group’s underlying

intrinsic performance owing to their unusual nature. Bureau Veritas considers

that these indicators, presented at Group level and for each business, are

more representative of the operating performance in its industry.

Adjusted operating profit represents operating profit prior to adjustments for

the following:

• amortization of intangible assets resulting from acquisitions;

• impairment of goodwill;

• fees and costs on acquisitions of businesses;

• contingent consideration on acquisitions of businesses;

• gains and losses on disposals of businesses;

• restructuring costs.

When an acquisition is carried out during the financial year, the amortization

of the related intangible assets is calculated on a time proportion basis.

ADJUSTED OPERATING MARGIN

Adjusted operating margin expressed as a percentage represents adjusted

operating profit divided by revenue. Adjusted operating margin can be

presented on an organic basis or at constant exchange rates, thereby, in the

latter case, providing a view of the Group’s performance excluding the impact

of currency fluctuations, which are outside of Bureau Veritas’ control.

Since a measurement period of 12 months is allowed for determining the fair

value of acquired assets and liabilities, amortization of intangible assets in

the year of acquisition may, in some cases, be based on a temporary

measurement and be subject to minor adjustments in the subsequent

reporting period, once the definitive value of the intangible assets is known.

Organic adjusted operating profit represents operating profit adjusted for

scope and currency effects over comparable periods:

• at constant scope of consolidation: data are restated based on a 12-month

period;

• at constant exchange rates: data for the current year are restated using


The scope and currency effects are calculated using a similar approach to

that used for revenue for each component of operating profit and adjusted

operating profit.


ADJUSTED EFFECTIVE TAX RATE

63


The effective tax rate (ETR) represents income tax expense divided by the

amount of pre-tax profit.

The adjusted effective tax rate (adjusted ETR) represents income tax

expense adjusted for the tax effect on adjustment items divided by pre-tax

profit before taking into account the adjustment items (see adjusted operating

profit definition).

ADJUSTED ATTRIBUTABLE NET PROFIT

Adjusted attributable net profit is defined as attributable net profit adjusted for

adjustment items (see adjusted operating profit definition) and for the tax

effect on adjustment items. Adjusted attributable net profit excludes non-

controlling interests in adjustment items and only concerns continuing

operations.

Adjusted attributable net profit can be presented at constant exchange rates,

thereby providing a view of the Group’s performance excluding the impact of

currency fluctuations, which are outside of Bureau Veritas’ control. The

currency effect is calculated by translating the various income statement

items for the current year at the exchange rates for the previous year.

FREE CASH FLOW

Free cash flow represents net cash generated from operating activities

(operating cash flow), adjusted for the following items:

• purchases of property, plant and equipment and intangible assets;

• proceeds from disposals of property, plant and equipment and intangible

assets;

• interest paid.

Net cash generated from operating activities is shown after income tax paid.

Organic free cash flow represents free cash flow at constant scope and

exchange rates over comparable periods:

• at constant scope of consolidation: data are restated based on a 12-month

period;

• at constant exchange rates: data for the current year are restated using


The scope and currency effects are calculated using a similar approach to

that used for revenue for each component of net cash generated from

operating activities and free cash flow.

ADJUSTED ATTRIBUTABLE NET PROFIT PER SHARE

Adjusted attributable net profit per share (adjusted EPS or earnings per

share) is defined as adjusted attributable net profit divided by the weighted

average number of shares in the period.


FINANCIAL DEBT

64


Gross debt (or gross finance costs/financial debt) represent bank loans and

borrowings plus bank overdrafts.

Net debt (or net finance costs/financial debt) as defined and used by the

Group represent gross debt less cash and cash equivalents. Cash and cash

equivalents comprise marketable securities and similar receivables as well as

cash at bank and on hand.

Adjusted net debt (or adjusted net finance costs/financial debt) as defined

and used by the Group represents net debt taking into account currency

hedging instruments.

CONSOLIDATED EBITDA

Consolidated EBITDA represents net profit before interest, tax, depreciation,

amortization and provisions, adjusted for any entities acquired over the last

12 months. Consolidated EBITDA is used by the Group to track its bank

covenants.

Glossary


Operating Profit (AOP) excludes amortization of acquisition intangibles, goodwill

impairment, restructuring, acquisition and disposal-related items (adjustment items)

ASR: Accident Severity Rate

Adjusted Operating Margin (AOP Margin) is defined as Adjusted Operating Profit / Revenue

Adjusted Net Profit is defined as net profit adjusted for items after tax

Adjusted Net Debt is defined as net financial debt after currency hedging instruments, as defined in the calculation of banking covenants

AI: Artificial Intelligence

AIM: Asset Integrity Management

B&I: Buildings & Infrastructure

BIM: Building Information Modeling

CC: Constant currency

E&E: Electronic & Equipment

E&P: Exploration & Production

EMC: Electromagnetic Compatibility

FCF: Free cash flow

FOREX or FX: Foreign exchange

FPSO: Floating Production Storage and Offloading

FSO: Floating Storage and Offloading

GMO: Genetically Modified Organism

GRT or GT (Marine): Gross Register Ton or Gross Ton

GS: Government Services

IoT: Internet of Things

IMO: International Maritime Organization

LNG: Liquefied Natural Gas

LTR: Lost Time Rate

M&M: Metals & Minerals

NDT: Non-destructive Testing

O&G: Oil & Gas

O&P: Oil & Petrochemicals

Organic growth: increase in revenue versus last year, at constant

currency and scope (i.e. acquisitions excluded)

P&U: Power & Utilities

PMA: Project Management Assistance

PSI: Pre-shipment Inspection

QA / QC: Quality Assessment / Quality Control

SSC: Shared Service Center

TAR: Total Accident Rate

ULCS: Ultra Large Container Ships

VLCC: Very Large Crude Carriers

VOC: Verification of Conformity

y/y: year-on-year

WC / WCR: Working Capital / Working Capital Requirement

Ownership and market data at December 31, 2019


STABLE SHAREHOLDING STRUCTURE

66

MARKET DATA

1) As of December 31, 2019

• Listed on Euronext-Paris

• Ticker: BVI

• ISIN: FR0006174348

• IPO on October 2007: EUR 9.44/share

• Share Price1: EUR 23.26

• Market Cap.1: EUR 10.5bn

• Main indices: CAC Next 20, SBF 120, CAC large 60, EURO STOXX, EURO STOXX Industrial Goods & Services, STOXX Europe 600, STOXX Europe 600 Industrial Goods and Services Index, STOXX Global ESG

Leaders, STOXX Global ESG Impact Index, MSCI Standard, DJSI 2019 World & Europe (#2 in the Professional Services industry with a score of 75/100)

• Unsponsored ADR set up by Citi and Deutsche Bank; Ticker: BVVBY

35.6%

0.8%

62.6%

1.0%

Wendel

Managers & Employees

Free Float

Treasury shares

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