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Transcript of Corporate Presentation March 2008 Olivier RICHARD.
Corporate Presentation
March 2008
Olivier RICHARD
Group Identity Card
3Bureau Veritas Corporate Presentation – March 2008
Bureau Veritas at a Glance
Marine 12%
Inspection & In-Service
Verification
13%
Certification
12%
HSE
10%
Industry
14%
Government Services and
International Trade 7%
Consumer Products
13%
Construction
19%
Asia Pacific & Middle East
24%
Europe
23%
Americas
16%
France
32%
Africa 5%
► Created in 1828
► A global leader in conformity assessment services in the areas of quality, health and safety, environment and social responsibility (QHSE)
2007 revenue: €2.07bn
2007 adjusted operating profit: €312m
More than 850 offices in 140 countries
► Over 33,000 skilled employees
► Eight global businesses providing a complete set of services
Inspection, testing, audit, certification, risk management, outsourcing, consulting and training services
► Servicing 300,000 customers across a wide range of end markets
Broad Geographical Presence
Eight Global Businesses
4Bureau Veritas Corporate Presentation – March 2008
Our Profession : QHSE Compliance
Reference Standard Action Deliverable
Assessment
Full Independencefrom any
Design / Manufacturing / Contracting / Insurance
5Bureau Veritas Corporate Presentation – March 2008
A Balanced Portfolio of Activities
Marine► Ship classification, ship and marine equipment certification, technical assistance and outsourcing
services
Industry
► Conformity assessment of industrial equipment and installations to regulatory or client specifications from feasibility stage to de-commissioning
► Services include design review, shop inspection, site inspection, asset integrity management, product certification and related testing services such as non-destructive testing
Inspection & In-Service Verification (IVS)
► Periodic inspection of equipment and installations to assess conformity with regulations or client-specific requirements. Services apply to electrical installations, fire safety systems, lifts, pressure equipment, lifting equipment and machinery
Construction
► Conformity assessment of construction projects to local regulations and construction standards, from design stage to completion
► Services include design review, code compliance, technical control, on-site safety coordination, testing of construction materials, asset management and technical due diligence services
Health, Safety and Environment (HSE)
► Inspection, audit, measurement and testing services in the fields of environment / health & safety ► Technical assistance and consultancy services to help companies define their HSE management
strategy and improve their performance
Certification► Certification of management systems and processes in the areas of quality, health and safety,
environment and social responsibility based on public standards► Second party auditing services based on customer-specific or Bureau Veritas standards
Consumer Products► Testing, inspection and certification of consumer goods including textile, hardlines, toys, electrical
and electronic products► Factory audits, social responsibility audits and training services
Government Services and International Trade(GSIT)
► Government Services: Pre-Shipment Inspection, X-Ray Scanning, Verification of Conformity of imported products
► International Trade: Commodity quantity/quality assurance, automotive services
Eight global businesses providing strong growth and cross-selling opportunitiesEight global businesses providing strong growth and cross-selling opportunities
6Bureau Veritas Corporate Presentation – March 2008
Extensive Geographic Footprint
Asia & Middle East
190 offices, including 58 laboratories
10,500 staff
France
175 offices, including 12 laboratories
7,200 staff
Americas
140 offices, including 26 laboratories
5,700 staff
Europe (excl. France)
290 offices, including 41 laboratories
8,600 staff
Africa
55 offices, including 9 laboratories
1,000 staff
Global network comprising more than 850 locations across 140 countriesGlobal network comprising more than 850 locations across 140 countries
7Bureau Veritas Corporate Presentation – March 2008
I&FAustralia
Bureau Veritas History
1910 1929 1984 1988 1995 1998 2002 2004
Wendel gains full control of
Bureau Veritas
MarineIndustry
Construction
GSIT
ConsumerProducts
Buildingglobal HSE
platform
Wendel makes initial investment in Bureau Veritas
IPO
Certification
2007 1828
ConsumerProducts
US and China
Expansion to Asia and Eastern Europe
I&FUSA
I&F Germany
1993 2001 2006
Expansion to Africa
I&FChina
I&FUK
Note: I&F = Industry & Facilities division.
1996
Merger with CEP
(France)
Reputation, network and portfolio of businesses built over 180 yearsReputation, network and portfolio of businesses built over 180 years
LeaderIn Spain
8Bureau Veritas Corporate Presentation – March 2008
MarineGovernmentServices and International
Trade
Organisational Structure
CEO
►8 global businesses, managed through four global divisions
►All units managed through matrix organisations
An organisation designed to support
growth and drive operational excellence
An organisation designed to support
growth and drive operational excellence
Organisation & Human Resources
Finance, Legal, Risk Management,
Information Systems
Certifica-tion
Cons-truction
HSEIVSIndustry ConsumerProducts
Europe
USA
GreaterChina
South Asia
Europe
Middle East and Africa
Americas
Asia Pacific
South Europe
Northern & Eastern Europe
Middle East, India, Russia and Africa
North America
Latin America
Asia Pacific
Europe
North America
Latin America
Asia
MiddleEast
Industry & Facilities
Strat. Markets & KA Dpt. Technical Dpt.
Group Business Highlights
10Bureau Veritas Corporate Presentation – March 2008
8 Global Businessesin a €50bn + market…
… Supported bystrong tailwinds
Addressing Markets with Strong Growth Potential
Inspection & In-Service Verification
Inspection & In-Service Verification
IndustryIndustry
Health, Safety & EnvironmentHealth, Safety & Environment
MarineMarine
GSITGSIT
Consumer Products
Consumer Products
CertificationCertification
ConstructionConstruction
QHSERegulations
QHSERegulations
Globalisationof Standards
Globalisationof Standards
SustainableDevelopmentSustainable
Development
QHSE RiskMitigation
QHSE RiskMitigation
Growing UrbanPopulations
Growing UrbanPopulations
PrivatisationPrivatisation
OutsourcingOutsourcing
Trade GrowthTrade Growth
Industrial GlobalisationIndustrial
Globalisation
Investments in Infrastructure
Investments in Infrastructure
11Bureau Veritas Corporate Presentation – March 2008
Global No. 2 by number of vessels,global No. 6 by tonnage
Global Top 3
Europe Top 3
Global No. 4
Global No. 1
Global No. 1
Global No. 1 in toys and hardlines, No. 2in textiles, recently built E&E platform
Top 4 in Government Services,niche position in International Trade
Leadership Positions in the Most Compelling Segments
1. Excludes growth through outsourcing and privatisation.
Industry
HSE
IVS
Construction
Certification
GSIT
ConsumerProducts
Marine
Business PositionMarket
Size (€bn)¹
> 2
> 7
> 7
10 – 15
> 10
> 3
3.5
> 4
% Outsourced
Market Fragmentation
High Low
12Bureau Veritas Corporate Presentation – March 2008
Strong Competitive Advantages
Broad Service Portfolio
► Ability to cover all QHSE requirements of a project / customer► Cross-selling potential
Brand and Reputation
► Strong brand built over 180 years of service: Technical excellence Integrity Independence
► Ability to push for high value-added services► Ability to recruit talents► Attractiveness for acquisition targets
Efficient International Network
► Unique combination of international and local networks► Consistency of service delivery across the globe► Reactivity to deploy new service capabilities
Acquisition Track Record
► Bolt-on acquisition experience► Disciplined integration process
Skilled Employee Base
► Strong technical expertise: Electricity, metallurgy, electronics, corrosion, hydrodynamics, etc.
► Entrepreneurial and client-driven culture
Unmatched Expertise
► Comprehensive portfolio of accreditations► Thorough knowledge of regulations, reference frameworks and standards► Extensive knowledge of industrial markets
13Bureau Veritas Corporate Presentation – March 2008
Resilient Revenue Base
Diversified Revenue Streams
► Balanced portfolio of activities and locations
► Eight global businesses positioned on different investment cycles
► Mix of investment-related (capex) and life-cycle-related services (opex)
Recurring Revenue
► Multi-year contracts (Marine, Certification, Inspection & In-Service Verification, Industry, Government Services)
90% of Certification revenue and 60% of IVS revenue covered by multi-year contracts
► High degree of customer loyalty (Consumer Products, Construction, Industry): “repeat business”
39 of top 40 Consumer Products customers in 2001 are still doing business with Bureau Veritas today
► Long-term order book in Marine and Oil & Gas Order book in Marine providing multi-year visibility on new construction activity
Fragmented Customer Base
► 300,000 active customers
► Top ten customers account for less than 10% of group revenue
14Bureau Veritas Corporate Presentation – March 2008
53 59 62
86106
137
171
204
244
268
36
0
50
100
150
200
250
300
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Ad
just
ed O
per
atin
g P
rofi
t (€
m)
455
619695 722
850
1 012
1 846
1 145
1 283
1 422
1 647
200
500
800
1 100
1 400
1 700
2 000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Rev
enu
e (€
m)
A Solid Growth Track Record
Adjusted Operatin
g Profit CAGR: 2
1%
Revenue CAGR: 1
5%
Revenue Growth: Last 12 Years Adjusted Operating Profit Growth: Last 12 Years
12 years of continuous growth and profit improvements Revenue expanded by a multiple of 4.5 and adjusted operating profit by 9
12 years of continuous growth and profit improvements Revenue expanded by a multiple of 4.5 and adjusted operating profit by 9
2 067 312
Group Business Strategy
16Bureau Veritas Corporate Presentation – March 2008
►Double 2006 revenue►Average annual net income growth between 15 and 20%
►Double 2006 revenue►Average annual net income growth between 15 and 20%
Vision: Become the global QHSE leader and a major player in each of our eight businesses
DriveOrganicGrowth
DevelopTalent Pool
ImproveOperatingPerformance
PursueAcquisitions
Group Strategy
2011 Objectives
2. 3. 4.1.
17Bureau Veritas Corporate Presentation – March 2008
1. Drive Organic Growth
Reinforce Sales & Marketing Organisation
► Increase sales & marketing resources
► Set up dedicated sales forces in platform countries
Focus on High- Growth Areas
► Invest in tailwind markets Oil & gas, energy, mining
► Focus on geographies and businesses with superior potential Marine, Consumer Products, Industry Asia Pacific, Latin America, Middle East, India and Russia
► Anticipate new regulations, privatisations and market opportunities to gain first mover advantage
Drive Cross-Selling and Key Accounts
► Leverage service portfolio and global network to enhance cross-selling and cross-border contracts
► Increase share of international customers
Geographic Expansion
► Expand global network across eight businesses
► Optimise size in each platform country
Develop New Services
► Identify and develop new services
► Focus on value-added and customised solutions
Expected 8% average annual organic growthExpected 8% average annual organic growth
18Bureau Veritas Corporate Presentation – March 2008
1. Drive Organic GrowthGeographic Expansion
Bureau Veritas aims to achieve critical size in each platform country, to provide better service to clients and foster growth
Bureau Veritas aims to achieve critical size in each platform country, to provide better service to clients and foster growth
Marine
Consumer Products
Government Servicesand International Trade
Industry
In-Service Verification
Construction
HSE
Certification
Industry&
Facilities
FranceRest of Europe
North America
Central& Latin
America Asia PacificMiddle East/ India/Russia Africa
Mature network / Scalable presence
Presenceto be built
Network to be completed / Presence to be reinforced
Not a platformregion
19Bureau Veritas Corporate Presentation – March 2008
► Technical due diligence of 290 hotels in 10 European countries for Starwood Capital (2005)
► Audits and reports provided in four weeks
© Musée du quai Branly Photo Antoine Borgeaud
1. Drive Organic GrowthDevelop New Services
Competitive Advantage
► Global player capable of mobilising European network in very short timeframe
► Consistent assessment of property conditions from structure to technical installations
► Advised on selection of facility manager and definition of KPIs1 for the Quai Branly Museum in Paris
► Independent supervision of quality and safety performance of all outsourced services
► Customised inspection programme and reporting tool
Competitive Advantage
► Breadth of services portfolio and expertise Knowledge of building background (CTC and IVS services
provided during construction)
► Ability to replicate methodologies used in existing services (IVS)
Selected Example: Quai Branly MuseumSelected Example: Starwood Capital
Property condition assessment services now provided in Western Europe, Asia, Middle East, Eastern Europe and North
America
Property condition assessment services now provided in Western Europe, Asia, Middle East, Eastern Europe and North
America
Service offering to be deployed in Europe
Cross-selling potential with energy consumption optimisation services
Service offering to be deployed in Europe
Cross-selling potential with energy consumption optimisation services
Construction: Asset Management Services Assistance to Maintenance Supervision
1. Key Performance Indicators.
20Bureau Veritas Corporate Presentation – March 2008
► Comes into force in 2007 and phased through 2018
► Requires traceability and identification of chemicals substances within products
► Aim: Improve protection of human
health & environment from hazardous chemicals
Enhance competitiveness of EU chemicals industry.
1. Drive Organic GrowthDevelop New Services
Bureau Veritas Service Offering► Consulting & technical assistance► Auditing of chemical management systems► Testing► Data base management of compliance documents
► Context Increasing concern around ship
recycling Maritime authorities preparing
issuance of a “Green Passport” (2009 onwards)
► Full-scale assistance needed in the preparation of hazardous materials inventory
Bureau Veritas Service Offering► Design of audit procedure for assessment of potentially
hazardous products used on board of ships to be recycled
► Ability to leverage expertise of HSE business
Selected Example: Audit procedure for assessment of hazardous materials on Clemenceau ship
“Registration, Evaluation, Authorisation and Restriction of Chemicals”
Services proposed starting June 2007 in Europe and Asia
Synergies with industrial HSE clients
Services proposed starting June 2007 in Europe and Asia
Synergies with industrial HSE clients
New regulations and breadth of in-house competence driving potential for new
service offering
New regulations and breadth of in-house competence driving potential for new
service offering
Consumer Products: REACH Directive Marine: Audit Procedure for Ship Recycling
21Bureau Veritas Corporate Presentation – March 2008
Significant cross-selling opportunities throughout the life cycleof a building / facility
Significant cross-selling opportunities throughout the life cycleof a building / facility
1. Drive Organic GrowthExample: Cross-Selling in Industry & Facilities
Design Commissioning Operation Dismantling
+
+
Construction
Buildings
Certification / Training
Health, Safety & Environment
Occupants/Users
=
Technical Equipment
IndustryInspection & In-Service Verification
22Bureau Veritas Corporate Presentation – March 2008
1. Drive Organic GrowthExample: Cross-Selling at Carrefour Group
1. Explosive atmosphere directive.
Second largest retailer in the world €87bn revenue in 2006 Operations in 29 countries
► Construction technical control► Safety on site
France, Spain, China
► Site inspections to comply with EU directives (ATEX1) France
Industry
► Traceability / food supply chain inspection
► Supplier assessment► ISO 9000 and 14000
certification
Certification
► Increase presence in: Consumer Products HSE
Future
► In-service inspection of fire safety, electrical installations and lifting equipment France, Spain, Turkey
IVS
Construction
Bureau Veritas' broad business portfolio and geographic presence offers cross-selling opportunities to key accounts
Bureau Veritas' broad business portfolio and geographic presence offers cross-selling opportunities to key accounts
23Bureau Veritas Corporate Presentation – March 2008
1. Drive Organic GrowthExample: Cross-Selling at Petrobras
► Ship classification and equipment certification of nine tankers and 11 offshore floating units
► Offshore rigs classification► Technical consulting
Marine
► ISO 9000 and 14000 certification
Certification► Shop inspection of
equipment used on offshore platforms
► Site inspection► Pipeline and offshore
platform asset integrity management
Industry
► Regulatory watch► OHS1 performance► Environmental performance
HSE
8th largest oil company in the world $73bn revenue in 2006 $15bn invested in 2006
1. Occupational health and safety.
Future► New service offering?
IVS Construction GSIT (oil testing)
24Bureau Veritas Corporate Presentation – March 2008
2. Pursue AcquisitionsRationale and Focus
►Accelerate growth strategy
Access new geographies
Reinforce position in high-potential areas (countries, markets)
►Acquire new capabilities
New fields of technical expertise
Customer base
►Reinforce skilled employee base
►External growth mainly driven by bolt-on acquisitions
Target spend of about €100m p.a. for bolt-ons
►Target small and mid-size companies:
Increase footprint in key platform countries: USA, Germany, Japan, Eastern Europe, Asia Pacific, Latin America
Expand position in high-growth markets: oil & gas, power, mining, retail
Develop new technical skills: HSE, Electrical & Electronics
►Selective approach towards larger acquisitions
Rationale Focus
Bureau Veritas will continue to actively pursue acquisitions to accelerateits growth and development
Bureau Veritas will continue to actively pursue acquisitions to accelerateits growth and development
25Bureau Veritas Corporate Presentation – March 2008
2. Pursue AcquisitionsExample: Building Global HSE Platform
Successful track record of building global businessesthrough acquisitions in platform countries
Successful track record of building global businessesthrough acquisitions in platform countries
2005:Clayton Group
ServicesUSA
2005:Casella
ConsultingUK
2006:KilPatrickAustralia
2006:International
RiskConsultants
Australia
2005:NATLSCO
Risk & SafetyUSA
2005:CPV
Slovenia
2005:KW2
Netherlands
2006:ECS
France
2006:Alert Solutions
Australia
2002:WEEKS
UK
26Bureau Veritas Corporate Presentation – March 2008
2005:Clayton
Group ServicesHSE
2005:NATLSCO
Risk & SafetyHSE
2. Pursue AcquisitionsExample: Building Industry & Facilities in the USA
2002:US Laboratories
Construction
2004:Berryman & Henigar
Construction
2004:Graham Marcus
Construction
2005:Linhart Peterson
Powers Associates Construction
2004:OneCISIndustry
2006:PVI
Industry 2006:NEISIVS
Successful track record of building global businessesand establishing presence in platform countries
Successful track record of building global businessesand establishing presence in platform countries
27Bureau Veritas Corporate Presentation – March 2008
► Systematic focus on underperforming units (quarterly review)
► Establish action plan for performance improvement Dedicated team and Key Performance Indicators (KPIs)
► Current initiatives in the UK, Spain and Germany
Turn Around Under-performing Units
LeverageGroup Scale
► Back-office Purchasing Office / network rationalisation IT infrastructure
► Operations Utilisation rate of inspectors Industrialised processes
Continuously Re-engineer Production Processes
► Performance optimisation process Mapping and re-engineering of key processes Internal benchmarking Identification of best-in-class practices Integrated IT production tools Centralised scheduling
3. Improve Operating Performance
28Bureau Veritas Corporate Presentation – March 2008
4. Develop Talent PoolBureau Veritas’ Employee Base is its Main Asset
► Number of employees x4 since 1996
► Strong technical expertise
► Bureau Veritas culture Entrepreneurship Client orientation Integrity and ethics Accountability Cash focus
► On-the-job training programs available to all technicians and managers
► Widespread knowledge management practices
Over 100 communities that share good practices and technical expertise
20 52423 683
33 01826 207
2004 2005 2006 2007
Evolution of Employees
Total Employees as of 31-Dec-2007: 33,018Total Employees as of 31-Dec-2007: 33,018
Asia Pacific & Middle East
33%Europe 25%
Americas18%
France 22%
Africa 3%
Geographic Breakdown
Execution of Strategy
30Bureau Veritas Corporate Presentation – March 2008
Management Levers
Bureau Veritas Operating Model
Define strategic positioning and identify value creation
opportunities
Define and review organization
Optimize network and
matrix organizations
Optimize sales
process
Optimize produc-
tion process
Ensure quality and technical
excellence, HSE and ethical
compliance
Set objectives
and ensure performance accountabilit
y
Manage people
Develop customer relation-
ships
Expand and increase
density of network
Share and leverage
knowledge
Develop brand,
image, and reputation
Vision and Mission
Values
Leadership Principles
BV FoundingPrinciples
Our way to
Excellence
Build assets
Execute
Set targets and align
organization
To ensure successful execution of strategy, Bureau Veritas has implemented a unique business model defining 12 management levers with associated
methodologies, tools and KPIs
To ensure successful execution of strategy, Bureau Veritas has implemented a unique business model defining 12 management levers with associated
methodologies, tools and KPIs
31Bureau Veritas Corporate Presentation – March 2008
► Bureau Veritas’ business model provides a common framework across eight businesses to deliver growth and improve performance
Develop common language and culture Help focus on key priorities, with selected KPIs Strengthen accountability
► Strategic priorities defined at budgeting for each business unit / country/ region
Local priorities specified in managers’ objectives
Quarterly follow-up of key priorities
Bureau Veritas Management Cycle
► Strategic workshops and portfolio reviews
► Budget process on business unit level
► People review
► Quarterly reviews and action plan monitoring
1
2
4 4
3
4
Quarter1
3
Quarter2
Quarter3
Quarter4
4
1
2
3
4
Annual Management Cycle
32Bureau Veritas Corporate Presentation – March 2008
Geo
grap
hies
Services
Objects *
Markets
Co
nti
nu
um
of
serv
ices
Conformity Assessment
Technical Assistance
andConsultancy
IntegratedSolutions
* Assets, Products, Systems
The Bureau Veritas PyramidA Playing Field for Executing the Strategy
33Bureau Veritas Corporate Presentation – March 2008
Specialists
Sponsor Board
Management
SiteContractorsSuppliers
SurveyorsAuditors
Technicians
Client
Project Manager(s)
KA ManagerSenior Management
Data(inspection, audit, testing)
Programme/ Campaign
QHSEStrategy
Special projects
RoutineCompliance
Governance
Robust KPIs
Solutions
BVNet
RiskSust. Devt.Compliance
IntegrityPerformance
Large Account ApproachIntegrated QHSE Compliance & Performance