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


Our Profession : QHSE Compliance

Reference Standard Action Deliverable

Assessment

Full Independencefrom any

Design / Manufacturing / Contracting / Insurance


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


Extensive Geographic Footprint

Asia & Middle East

190 offices, including 58 laboratories

10,500 staff

France


7,200 staff

Americas


5,700 staff

Europe (excl. France)


8,600 staff

Africa


1,000 staff

Global network comprising more than 850 locations across 140 countriesGlobal network comprising more than 850 locations across 140 countries


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


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


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


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


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


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


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


►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.


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


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


► 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.


► 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


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


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


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)


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


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


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


► 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


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


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


► 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


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


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

corporate presentation march 2008 olivier richard

Documents

related testing services

consultancy services

government services

diligence services health

conformity assessment

safety systems

shop inspection

site inspection