Bureau Veritas

51,1% Bureau Veritas
Provider of compliance and certification services

BUREAU VERITAS REINFORCES ITS GLOBAL LEADERSHIP STRATEGY

BUREAU VERITAS  in brief

Why did we invest in Bureau Veritas?

Bureau Veritas is ideally positioned in markets driven by long-term, structural trends, such as the proliferation and toughening of QHSE regulations and standards, the privatization of certification and inspection activities, increasingly stringent health and environmental protection standards, and the globalization of trade. The market that Bureau Veritas addresses has numerous barriers to entry, including mandatory operating certification and approval in each country, as well as the need to offer dense geographical coverage both locally and internationally, a wide range of inspection services (in particular for major clients), high-value solutions through firstrate technical expertise and a reputation of independence and integrity.

What were the highlights of 2010?

Amid the general economic recovery following a global crisis of unprecedented proportions in the post-war period, Bureau Veritas continued to demonstrate its operational quality and ability to pursue growth. Despite a slight decline early in the year, full-year revenue grew 10.6% (2.8% in organic terms) to €2.9 billion. Organic growth became positive again in the first half of 2010 and then rose more significantly in the second half. Attributable adjusted net income increased by 15.2%. In this environment, Bureau Veritas’ businesses performed well overall, supported by recurring revenue and continued expansion in high-growth economies, where the group now generates 45% of its sales. Its operating margin, which has risen steadily for 16 years, reached a record 16.7%. Thanks to high cash flow generation, net debt totaled less than two years of EBITDA, despite the £450 million Inspectorate acquisition. In June 2010, Bureau Veritas announced the purchase of Inspectorate, a major step forward in its leadership strategy. This transformative deal positions Bureau Veritas among the top three global leaders of commodities inspection and testing, an estimated potential market of over €5 billion offering solid growth opportunities. The acquisition, accretive the first year, offers promising potential for growth and margin improvement. It is an excellent complementary fit, in terms of businesses and geographical coverage, and steps up the group’s presence in high-growth regions

What is the outlook for development?

For 2011, Bureau Veritas expects the trends observed in the majority of its markets to improve. The group should benefit from its increased exposure in high-growth regions and from the incorporation of Inspectorate. The group’s strategy is to invest in highpotential market segments, such as commodities testing, nuclear energy, offshore energy and building efficiency, and to keep operational performance high. In 2011, the Group expects strong growth
in its revenue and adjusted operating income, thanks to the impact of the fullyear consolidation of the acquisitions made year-to-date and organic growth exceeding that of 2010 and consistent with H2 2010.