Bureau Veritas S.A.

Didier Michaud-Daniel - CEO Nicolas Tissot - CFO Philippe Donche-Gay - Senior EVP

Paul Sullivan - Barclays Edward Stanley - Redburn Josh Puddle - Berenberg Emira Sagaama - Oddo Andy Grobler - Crédit Suisse Bruno de la Rochebrochard - Bryan Garnier Tom Sykes - Deutsche Bank Ed Steele - Citi George Gregory - Exane

Good morning, good afternoon, and good evening to everyone. Thank you for joining Bureau Veritas Full-Year 2017 Results.

Nicolas Tissot, our CFO; and Philippe Donche-Gay, Senior Executive Vice President in charge of driving the implementation of the Group strategic plan are here with me to present our full-year results. 2017 was a solid year for the Group.

Not only did we deliver on our financial commitments, we made significant progress in the execution of our strategic plan. With the focus on Group diversification and digital transformation well underway.

We delivered on our commitment, achieving our goals set out in February 2017, reaching 2.2% organic growth, a margin of around 16%, and improved cash flow. Further highlights for the year include improvements in an increasing Group revenue, up 3.1% year-on-year.

Organic revenue growth accelerated in H2 including plus 3.8% in the last quarter. That growth is primarily led by our five growth initiatives which is are up 6.9% organically, while our base business is now stable.

Our adjusted operating profit is up 1.4% which is 16.1% margin organically. Free cash flow improved by 3.2% year-on-year on an organic basis.

The proposed dividend of €0.56 is an increase of 9.8% over two years. On the M&A front.

We completed nine acquisitions in 2017 out of 50 selected companies’ assets. They represent around €150 million of unrealized revenue.

This is an acceleration from the previous year 2016. All the acquisitions carried out in 2017 support our growth initiatives, primarily focused on enhancing our footprint in Buildings & Infrastructure and our expertise in SmartWorld.

In 2018, we have started the year adding around €75 million of annualized revenue with two acquisitions, in support of our OpEx and B&I growth initiatives, Lubrication Management specialized in oil conditioning monitoring, EMG which we closed this week. EMG brings to Bureau Veritas new expertise in the U.S.

with a flexible platform in construction, technical assessment and project management assistance. This enhances our growth profile and resiliency by increasing our OpEx exposure as 90% of EMG is OpEx-related services.

One last important point on M&A is that we are on track with the plan regarding our 2020 external growth ambition. We have reached around 50% of our target.

With that, I hand it over to Nicolas to walk us through the financial review. Nicolas?

Thank you, Didier. Starting with the revenue bridge, the Group’s full-year 2017 revenue came in at €4.69 billion, up 3.1% versus 2016.

Organic growth reached 2.2% compared with minus 0.6% in full-year 2016. Acquisitions contributed 2.5% to Group’s growth on a net basis including the divestment of non-strategic NDT businesses in Europe with a 0.4% negative impact.

ForEx had a 1.6% negative impact. All-in-all, the growth was plus 4.7% on constant currency.

Looking at the revenue growth for the last quarter of the year 2017. Organic growth reached 3.8%, our best quarter since Q2 2015.

Acquisition had 1.8% contribution to topline growth. ForEx had a 5.2% negative impact, which is mainly attributed to the appreciation of the euro against the USD currencies as well as emerging countries currencies.

This trend is continuing in 2018 and if spot rates remain as of today, ForEx will significantly impact negatively our top-line, notably in H1. All-in-all, revenue growth accelerated to 5.6% at constant currency.

Turning to the revenue growth by business. More than two-thirds of the Group grew organically in 2017 at 4.2% on average with Certification up 6.1%, Buildings & Infrastructure up 5.1%, Consumer Products up 4.7%, these three being our best performers, and Agri-Food & Commodities accelerating throughout the year to 2.4%.

The two businesses that remained in negative territory organically representing less than a third of Group revenue are Marine & Offshore, down 5.3% year-on-year, impacted by the market downturn and new construction; Industry down 0.8% with persistent depressed conditions in the Oil & Gas CapEx markets not yet fully compensated by our push on OpEx related services, diversity of markets. Going through the 5.6% growth at constant currency in Q4, four out of six businesses were presenting more than two-thirds of the Group’s portfolio delivered strong organic growth of 6.2% on average.

Best performers in Q4 are Building & Infrastructure up 8% and Certification up 6.8%. Growth is now supported by both the base business and our five growth initiatives.

In 2017, we stabilized the base business that is up 0.1% organically, gradually improving throughout the year and with an exit rate of 2.6% in the last quarter. Apart from Marine & Offshore, and Oil & Gas CapEx related activities which remained under cyclical pressure, the other activities performed well.

In addition, our growth initiatives have continued to perform strongly, up 6.9% organically to be compared to 4.9% in 2016. These growth initiatives now represent one-third of Group revenue.

Looking further at our five growth initiatives, they have all delivered a sustained pace of organic growth with Automotive up 17.4%, and SmartWorld up 15.7% being the best performers. Also worth keeping in mind that with our M&A being entirely focused on our growth initiatives, total growth reached a strong 14.6%.

We are progressing well with the deployment of these growth initiatives and their contribution to our 2020 revenue ambition. Reviewing other key financial metrics, a few points to highlight.

Margin of 15.9% stands at the high level, nearly flat organically at 16.1%. Adjusted EPS up 1.1% year-on-year and 6.7% at constant currency.

While free cash flow is down 3.6% it’s up 5.3% at constant currency. And I’ll go further into the details of cash flow later in the presentation.

Turning to adjusted operating margin of 15.9%. It reflects as expected a 9 bps negative effect of acquisitions linked to the initial dilutive impact of Schutter, a 12 bps negative ForEx impact.

Moving forward, ForEx will impact negatively margin if spot rates remain as of today. On an organic basis, the Group adjusted operating margin is basically flat at 16.1%, down only 5 bps.

About two-thirds of the portfolio are stable or improving margin, adding 40 bps to Group organic margin. This is driven by a significant improvement in Agri-Food & Commodities, and in Building & Infrastructure, and maintaining high margins in both Certification and Consumer Products.

This improvement is the result of a combination of operating leverage, strict cost management, lean efforts, and restructuring payback. Less than a third of the portfolio has a minus 45 bps impact on Group margin with minus 20 bps coming from Marine & Offshore due to lower volume of activity, not only for new construction and offshore services, minus 25 bps resulting from price pressure in Oil & Gas and change of mix in industry.

Operating margin by business will be further covered in the business review. Adjusted from nonrecurring items, our full-year operating profit broadly similar to last year, at €606.3 million.

A point to highlight is our continued focus on proactive cost management and efficiency improvement, which translated into a €57 million restructuring charge with further restructuring in Marine & Offshore, significant restructuring in government services and further cost adjustment in Industry and commodities. This restructuring has and will continue to protect our margin.

Under net financial expenses, we have first, a decrease of financial charges due to lower average cost of debt, which is down from 3.4% to 3.1% driven by active liability management, partly offset by average net debt increase; secondly, a €12.1 million ForEx loss linked to significant depreciation of currencies in some emerging countries. Moving to tax rate.

The adjusted effective tax rate of the Group was down 2.8 points up 31.8%, mainly resulting from a combination of exceptional elements, the refund at the end of 2017 of the 3% dividend contribution after it was cancelled by the French Constitutional Council. The Group’s deferred taxes were revalued as a result of the decrease of the U.S.

tax rate voted at the end of 2017. For 2018, we expect our adjusted ETR to be in the 33% to 34% range.

Ending the P&L review, the adjusted attributable net profit comes up €416.1 million, up 1.1% versus last year. Looking at cash flow, there are several elements to mention.

The decrease in a profit before income tax mainly driven by ForEx movement, the reduction of the tax cash-out linked to the exceptional items mentioned previously, the increasing working capital linked to the revenue rose in Q4 up 3.8%. As a result, operating cash flow is up €581.2 million.

Net CapEx stands at €133.4 million, showing a disciplined approach by the Group at 2.8% revenue. For 2018, we expect CapEx to increase to 3% to 3.5% to support our digital transformation.

The increase in interest paid at a significantly higher level than in the P&L is due to timing differences. All-in-all, free cash flow improved by 3.2% organically and adjusted from unfavorable timing differences in interest payments by 6%.

On our financial structure, the adjusted net debt stands up €2.09 billion, a €98 million increase from December ‘16. This reflects €168.7 million in acquisitions completed in 2017 and earn-outs strong prior acquisitions; €295.4 million of dividends which were distributed in H1 2017; €33.4 million on share buybacks to cover the LTIPs of BV managers and €68.4 million favorable ForEx impact.

The net debt to EBITDA ratio stands at 2.37 times, well below all 3.25 times. Thank you.

I will now turn it back over to Didier for the business review.

Thank you, Nicolas. Thank you.

Starting with Marine & Offshore. The business down 5.3% in 2017 as a result of double-digit declining in new consumption impacted by Asian market; slight growth in core In-service, led by the growth of the feet partly mitigated by price per share; single-digit decline for services due to offshore related activities still driven by the lack of deep-sea projects.

This business showed some stabilization at the end of 2017. On the upside, new orders increased to 5.1 million gross tons at the end of December 2017, up from 1.9 million gross tons in the prior year period.

We are moving in the right direction to rip in this, the order book which at the end of December stood at 12.6 million gross tons. Margin remains under pressure, a combination of negative leverage and mix.

We are restructuring to adapt our cost base to the level of activity. On BV 2020 digital transformation, we signed a strategic partnership with Bourbon to co-develop automation and real time monitoring of fleet.

The Group will also cybersecurity certifications for the Bourbon fleet. In 2018, we expect organic growth to be slightly negative with the focus on margin protection.

This reflects further decline in new construction, given the lead time with H1 being negative and H2 2018 expected to be stable to positive, and resilience in In-service activity. Looking further at the Marine & Offshore market, we can observe some positive trends in new construction in particular dry bulk and containers as well as LNG carriers.

In addition, the world fleet continues to grow at a steady 2%, thanks to the international trade growth, thus supporting our In-service activity. For the Agri-Food and Commodities the business is improving.

Revenue accelerated during the year, up 2.4% organically including 4.8% in the last quarter. By sub-segments segments Agri-Food were 6.8% increased inorganic growth for the year.

The performance was driven by contact wins in the agri segment is centered in Americas alongside sustained solid growth in the food space across most geographies. The Metal & Minerals segment confirmed its recovery, up 5.7% in organic growth, supported by both trade across all geographies, and upstream activities excluding coal with significant uptick in Q4.

The Oil & Petrochemicals segment is up by 3% organically, reflecting strong growth in China and in Africa notably and double-digit growth in non-trade activities OCM and marine fuel. Government Services were down by 7.1% still affected by the end of a PSI contract.

Guinea, Ivory Coast and further decline in the Iraqi program. For 2018, thanks to the ramp-up of several contract wins, the situation should stabilize.

Margins increased 90 basis points as a result of the mix, lean efforts and the operating leverage. We expect the Agri-Food & Commodities business to improve its growth compared to 2017fueled by a recovery in Metals & Minerals markets, healthy Agri-Food businesses and stabilizing government services.

Turning to Industry. Organic growth was slightly down by 0.8% for the year and nearly stable in the last quarter at minus 0.2%.

Oil & Gas CapEx-related activities remained under pressure with the end of large contracts. It has been partly compensated by growth in Oil & Gas OpEx and sold performance in another end markets such as Power & Utilities and Automotive.

Growth was strong in Africa and the Middle East, robust in Latin America, primarily led by Brazil due to geographic and sectoral diversification. Margins declined 100 basis points due to two factors, the negative mix effect of Oil & Gas CapEx decline and the push towards OpEx; and second some persistent price pressure in Oil & Gas OpEx activities.

In line with BV 2020, we continue to gain solid traction in OpEx relative services already delivering 18% organic growth in Power & Utilities. We expect the business to return to slightly positive organic revenue growth overall.

Our strategy of diversification will continue to pay off given our initiatives in Power & Utilities and Automotive. Throughout the year, we expect to see Oil & Gas CapEx markets bottoming out with decline in H1 and stabilizing in H2.

Further on Industry, we can clearly see that our strategy of diversification to OpEx is paying off. Over a two-year period, we have increased our OpEx exposure in Oil & Gas and Power & Utilities by 10 points to 57% of our revenue.

In terms of Oil & Gas CapEx, we will button out on this activity in 2018 before returning to growth in 2019 if the improving trend is confirmed. In Buildings and Infrastructure, revenue increased by 5.1% organically with slightly higher organic growth in construction related activities.

The building in-service segment benefited from contract wins in the mass market and increased recruitment in France and in the UK. In construction related activity, we saw double-digit organic growth in Asia and in Latam excluding Brazil.

Our Chinese business now represents 17% of the B&I division. It is growing at double-digits, thanks to the energy on infrastructure project management sectors.

France grew at a low single digit due to a slow start but Q4 showed a nice uptick. CapEx work is on an upward trend.

We saw good level of sales including the Grand Paris project. Margin slightly improved on mix and volume.

Supporting our 2020 initiatives, we have made five strategic acquisitions in the Building &Infrastructural space. CCC and Primary Integration for an expansion in the U.S.

as mentioned completed by EMG this week; McKenzie in Australia; INCA in Mexico; and SPM in China. The Outlook for the business remains positive overall with sustained solid growth on both CapEx and OpEx related services.

This outlook reflects the expectation of strong growth in Asia, notably China and Latam; improving growth momentum in Europe, notably in France, driven by both CapEx and OpEx. Certification: Certification is again our top performing business in 2017, delivering 6.1% organic growth with a good performance spread across all regions and categories.

Growth was supported by renewed standards like ISO 9001 and 14001, along with new products and services launched. These include enterprise risk taking in cybersecurity, anti-bribery and business continuity.

The Group has also developed a referential for Data Privacy ahead of all the European General Data Protection Regulation coming this May 2018. Overall, three activities grew double-digit organically.

Customized audits, training activities and large certification contracts signed with international companies. Margin was maintained at a high level about 17%.

We expect the business to remain robust and deliver a sustained growth with stronger first half than second half due to the transition of revised standards with a deadline of September 2018. Consumer Products recorded a solid organic growth of 4.8% with growth across all regions in nearly all categories.

Electrical & Electronics grew by high single-digit organically, driven by Automotive and connected object testing. We realized a 17% growth in Automotive and 16% in the activities covered our SmartWorld initiative.

Hardlines performed strongly, up low double-digits organically led by China and strong momentum with key accounts notably in Europe. Softlines grew in line with the divisional average despite a challenging environment with retailers.

Our margin improved by 30 basis points to a strong 24.7% as margin initiatives more than offset price pressure and negative mix. In 2018 ,we expect Consumer Products to maintain mid single-digit growth, reflecting strong growth in Electrical & Electronics led by SmartWorld and Automotive initiatives, solid growth for Hardlines helped by stabilization in the toys sub-segment.

This concludes the business review. Before moving on to the overall outlook for 2018, as digital is a key lever to achieving our 2020 ambition and is significant game-changer in the transformation of business today, Philippe will address the focus of our digital strategy.

Philippe?

Thank you, Didier. In 2017, we have gained solid momentum in our digital transformation.

We have launched new services and tools to support our clients as they also face new challenges and risks associated with digitalization. As a reminder, to achieve our 2020 digital ambition, our strategy is focused on three main pillars.

First, improving on our own internal efficiency. Digital is helping us to be more productive in the way we deliver services to our clients.

Second, launching new operating models to modernize the way we engage with our clients through e-commerce platforms, marketplaces. And also to leverage our deep technical expertise with digital platforms.

We are currently focusing areas such as 3D modeling, predictive maintenance based on artificial intelligence. In Agri-Food, we’re experiencing precision farming made possible with satellite technology.

And third, we are developing new digital-related tech services such as data privacy, cybersecurity, sensors and IoT, connectivity testing. Of course, we maintain a prominent focus on digital innovation to leverage emerging technologies such as connected glasses and drones, blockchain for traceability, virtual reality for remote inspection services.

To accelerate our digital transformation we are actively pursuing innovative alliances. And we have recently concluded partnership with several global players.

Today, we are announcing a partnership with Worldline, a division of the Atos Group, the European leader in the payments and transaction-related services market. Together, we are launching Origin, a complete blockchain solution for food traceability.

Ultimately, Origin will enable in-store shoppers to see the full history of each product using QR code. As a first step, it will enable food industry players to have a complete visibility on their supply chain.

The solution will be presented on March the 5th in Tokyo at the Annual Global Food Safety Conference. As mentioned by Didier previously, we made also step forward in the digital control of vessel operations Bourbon, the world leader in marine services for Oil & Gas offshore.

We have announced the strategic partnership covering initially the real time verification of dynamic positioning operations, and we will also believe classification of onboard connectivity systems encompassing cyber risk assessments. During our last Investor Day, we shared with you, our global strategic alliance with Avitas Systems, GE venture.

Together, we are building the next generation of inspection services, based on advanced analytics. As announced, we are currently progressing with final clients in the Power & Utilities sector.

Didier, back to you for the outlook.

Thank you, Philippe. The outlook now.

For full-year 2018, we expect an acceleration in organic revenue growth compared to 2017; a slightly improved adjusted operating margin at constant currency compared to full-year 2017; an improved cash flow generation at constant currency compared to 2017. Reaffirming our 2020 ambition.

As communicated during our Investor Day early December, the plan is to generate revenue growth of €1.5 billion at constant initial plan rate with 50% from organic growth and 50% from external growth to achieve overall 17% adjusted operating margin and to generate continuous high free cash flow. That concludes our presentation.

I’d like to thank you for your attention. And we are now ready to take your questions on the call or through the webcast.

Hi, everybody. Good afternoon.

A couple for me, firstly on your organic growth outlook. When you talk about acceleration, shouldn’t that be off the fourth quarter as opposed to full year?

That’s the first question. Secondly, in terms of your slight margin improvement guidance, given revenue acceleration and this recovery drive through that we should starting seeing through and all the restructuring charges you’ve taken, shouldn’t that be more than just slight on an organic basis?

And how should we view M&A and FX impact on margin this year? And then, finally, on the leverage point, I mean how much further are you prepared to push leverage in terms of net debt to EBITDA?

Thank you.

Okay. Paul, thank you for your question.

First, I’m going to start with the organic growth. So, we foresee an acceleration in 2018.

Q1 is expecting to be better than Q1 last year, even if we have one day less than last year. And you know that there is an impact when we have one day less than the year before.

Overall, for the year, the number of days will be similar. And we expect again an acceleration.

Is it going to be at the level of Q4, too early to say it. But for sure, we will accelerate compared to full-year 2017.

Regarding the slight margin improvement, clearly, and you’re right, we decided last year to adjust our cost base with quite significant restructuring, but it was also to protect our margin. Clearly, this restructuring will have an impact this year and will probably accelerate next year.

But for now we foresee a slight margin improvement at constant currency. Regarding the FX, Nicolas, I’m going let you answering this question.

Yes, sure. Obviously, FX is going to play against us this year, I mean following the appreciation of the euro against in particular U.S.

dollar and other pegged currencies. If the currencies remain as of today, we expect the top-line to be impacted around 3% to 4% negatively.

And of course with the mix of activities and the mix of the currencies and you have some details in the annex in that respect, we expect adjusted operating profit to be impacted a little bit more between 4% and 6% if rates remain as of today.

And there was another question from Paul, which was regarding the leverage point, Nicolas.

Yes. And I guess, Paul was focusing was our main credit ratio, net debt to EBITDA, which as we said, reached 2.37 times at the end of ‘17.

We want the leverage moving forward to remain well inside our covenant of 3.25. And basically we want to control it to similar levels at the end of ‘17.

As clearly, Paul, as you know, we want to add on the top line from 2015 to 2020, approximately €750 million of revenue coming from M&A, sorry. We’ve started the year, as you could see, very well, and we expect it in the same level this year, I mean in approximately €150 million [on the top-line.

Thank you for your question Paul. Any other question?

Yes. Hi, guys.

Could you answer couple on -- the first one on China. It says in your B&I slide that China has strong dynamics.

But, can you give us any more information on what you are seeing in China, is that expected to continue to grow and just as strongly from what you are seeing already in 2018? The second question is GS.

Can you give us the exact timings on the contracts that have been difficult for you and when we should see them fully roll-off? And finally, are there any more NDT divestments to be made during 2018 that could that -- have been margin dilutive?

Regarding China, as you could see, we had a very good year in 2017. The strategy that we implemented now three years ago with the acquisitions mostly focused on energy and infrastructure, are paying off.

And in fact, when you look at our B&I evolution in 2017 goals, it was at plus 16%. So, it’s quite a great result.

The good news is that -- and we discussed it before, I decided to really focus on energy and the infrastructure, not on residential. And we know that China is going to be probably something like 250 airports and thousands and thousands of kilometers of highways in the near future.

So, we still expect the double-digit growth in 2018. Your second question was about the government services.

It’s true that we’ve signed three new contracts. It will take a little bit of time before these contracts ramp up.

We will not probably see first impact, I’m talking about positive impact, in Q1; it will accelerate along the year. We do not have any plan for the moment to divest any other NDT activities, knowing that the other NDT activities are mostly concentrating today in the Middle East, and in this part of the world the margin is not dilutive to the margin of Bureau Veritas.

[Technical difficulty] color on your relative caution on margin?

Paul, we hear you but we do not have your question?

It was just following up on margin and your relative question on the outlook given the restructuring, given accelerating revenue growth. And is it a function of new business or new contracts coming in at lower margin?

I’m just trying to get a bit more color on that.

No, it’s not the case. And in fact, it’s coming quite exclusively from the fact that marine will recover a progressively but we still foresee 22% margin for marine.

And need to continue to clearly restructure. So in fact it’s coming from a negative mix, I’d say, because again this high level of margin which will come back in the future, because clearly our backlog is seeming up again, Philippe.

It will take a little bit of time. So, it’s clearly a consequence of first the mix.

And the second one is the continuous price pressure that we still have today on Oil & Gas OpEx because clearly even with the oil price at something $63, $64, $65 is not enough to push our price again in OpEx. And last but not least, as you know, we have decided to go for more OpEx in Power & Utilities, we won very nice contract, quite big contracts notably in Latin America and we put our lean tools in place.

It will take a little bit of time before we see -- we bear the fruit and we increase the margin on these contracts. So, it’s a mix of these three factors.

So, my first question just following up on those comments you made on OpEx pricing in Oil & Gas. Is there anything you can say that on expectations for 2018 or give us what you think the pricing growth rate was year-on-year in Q4?

Then secondly, what are your expectations for restructuring costs for 2018? And then finally, can you just give us a bit of detail on the how exactly the business model of Origin works and how you earn a return from that initiative?

I’m going to answer the first two questions, and Origin will be taken by Philippe. On the OpEx where we can clearly see a similar price pressure in OpEx on gas.

The good news is as you can imagine, when you want to save cost on you are one of our clients, you want to reduce the number of superiors. So it’s clearly an opportunity for us.

We’ve talked about it in the past, but we can sit. But the price pressure is there.

I do not see it to be relieved this year. We want to offset this price pressure by putting a lot of lean efforts.

We have started to do so and we will continue in 2018. Regarding the restructuring costs, the restructuring costs, maybe Nicolas would like to answer.

On restructuring, as you saw from our release, we have restructured a lot last year and we plan to have some additional restructuring to do but at a far lower level than last year.

By the way, we have some details on restructuring, Josh, on slide 52, if I remember one. And And last question on Origin, Philippe, could you answer this question, please?

Yes, of course. So, we combine capabilities between Origin and BV, so basically Worldline will host -- I will say to simplify the value chain.

And we picked this partner because they have today activities in transactional services, B2C. So, we know that definitely with them we’ll be able to provide possibility, as I mentioned for shoppers in supermarkets to access through QR code and traceability and the history of the product thereby.

What BV provides here is of course all the integrity of the information entered into the blockchain. And this is our role, not only just setting up the design but also ensuring that the information entered at each step of the process is verified under one form or another by Bureau Veritas.

In terms of financials, this will be transactional services and we basically share the revenue in a format that depends on each project. We will have the first live pilot first half of the year.

So, of course a few elements would be fine-tuned with this one.

Hi, this is Srini from HSBC. A couple of questions from me, please.

First on marine division. I see that the order intake has improved.

But how is pricing pressure doing there in that segment? And on the second, Oil & Gas, do you see any improvement sequentially or is it soft comps that will help your growth in 2018?

And also, could you give us some color on how transactional impact from weaker USD on margins in 2018?

Okay. So, we will start with your first question, I think it was on marine, the order intake.

Philippe, so could you answer this question please, as you are in charge of the Marine & Offshore division?

Yes. Thank you for the question.

So, indeed there is an improvement in the order intake. May be we will not see the height of the 2009, 2010 years, but it’s been picked up.

And the bulk ship owners came back to the market and ordered, and we have seen also order intake for the large containerships, after I’d say, a two-year pause from these dry operators. LNG continues to have a sustained demand, and it’s likely to continue.

So, this is good. We would expect the same trend.

And so far so good for the year. Price pressure is there, no doubt.

And it has mainly played into the shipping service activity, which we would help now the bulk of it I would say that’s been absorbed. So, we will continue of course to have pressure trend but we believe that reorganization and restructuring that we will put in place will help us to restore profitability in that field too.

Thank you, Philippe for this very complete answer. Your point about the Oil & Gas CapEx, so clearly today we can see some oil companies which have already decided to relaunch some CapEx.

We do not see them really at mean today, but it will and after as you know between the moment the oil company decides to invest and the moment Bureau Veritas starts to inspect the equipment and the deliver the service, it takes between 9 to 15 months. So, I do not see a real positive impact of these new investments before 2019 on the Oil & Gas CapEx point of view.

Nicolas, could you answer the last question, please?

Yes, I think we can elaborate a bit on the impacts of ForEx going forward in 2018. As we said before, we expect ForEx to play against more or less all the KPIs of the group whether topline, margin or cash flow generation.

You have some details in the appendix of the slide deck, which is number 51, if I’m not mistaken where you have some details of our exposure. Keep in mind that our exposure to USD, not only USD per se, but also all the pegged currencies and you know that we have some businesses invoicing in USD not only in the Oil & Gas universe and other regions of the world and same thing goes for our Consumer Products business.

So, keep that in mind when you try to do your math on our exposure. We said that we expected the topline to be impacted if rates remained as of today around 3% to 4% negative.

We expect adjusted operating profit to be negatively impacted 4% to 6%. So, you can expect an impact on margin of several tens of basis points on the margin.

And obviously, we have a number of -- I talked about invoicing, but we have a number of costs in euros, which is an explanation for such an impact. Thank you.

Thank you. If I may ask one more question on GDPR regulation.

Do you see any increase in certification demand or training or audits, when do you see it start helping your growth?

We have started to work on it. As you know there is going to be a quite gradual -- in fact, if I’m right, the law should be totally in September of this year.

So, we will see a gradual clearly orders in the GDPR area. It has started a little bit.

It should accelerate right from now to the end of the year.

Hi. This is Emira from Oddo BHF.

I just had two follow-up questions, first one on marine. The margin dropped quite significantly in the second half despite restructuring.

I just wanted to have your view on the margin for this year, and if there is a chance of stabilization? And on B&I growth was quite significant in the Q4.

Do you see this sustainable this year? And in particular regarding the Grand Paris project, do you see any risk of deferral from the sales you expect from this projection in this year and next year?

Thank you.

Okay. Thank you for your question, we’re going to start with marine and the question about margin, Philippe.

Yes. I think the main component of the margin here and fluctuations are due to the mix, between new constructions and shipping service.

So, we would expect this mix to improve in second half of the year, as we stop getting the benefits of the new orders that we got in 2017. So, that would help.

And the improvement will have the same root cause than the degradation we have seen in H2 of this year. Remember that between the order and the full recognition of the project, it takes about 18 months.

So, this drop in H2 comes to the lack of orders beginning of 2016.

On the Building & Infrastructure side, we did very well, as you noticed, in Q4. So, it came from two factors.

The first one, very good organic growth in China as we discussed before and the second one came from in fact what we call service or OpEx in building in France and it’s mostly in that market. In fact, we recorded a lot of order last year at the beginning of the year and we recruited enough people to deliver the service both by the way in the UK and in France.

Regarding now the Grand Paris. Today, for us the expectation, not affected by the recent news, we recorded approximately €20 million of orders, of course and we discussed before it will be ramping up positively.

Maybe part of it could be extended from 2022 to 2024. We can clearly foresee revenue coming.

But again, and we discussed it before, more in 2019 than in 2018, even if you will start to have some more revenue recorded at the end of this year.

Just a couple for me. In terms of the AFC margin, that improved very significantly in the second half.

Can you just talk through the constituent part of that vision and where the real operational leverage and improvement came from? And then, secondly within consumer, you mentioned pricing pressure.

Again, can you talk through, which areas of that division you’re seeing most pricing pressure and where is it coming from? Is it competition or clients or combination of the two.

So, thank you for your question, I’m going to start of course by the Agri-Food Commodities business. As you know metals and minerals business is recovering.

We decided to launch lean management tools some years ago and it is starting to pay off. The second point is we made the acquisition of Schutter which had quite a low margin when we made that acquisition and which is will improving now because we put again good practices in place.

And last year, it’s important in Agri-Food to say that Brazil are the real at the record level in term of production, both in soy and in mace and in corn. So, of course, thanks to that we have more volume.

And as you know when you have more volume in your labs and more volume in terms of inspection, you improve the margin. So, it’s a combination of all of these factors.

Pricing pressure is coming essentially from our clients in two domains, the first one is marine clearly because the market today, even if it has restarted, I would say was still last year and the year before that they put pressure on us. They put pressure on us on new equipment but also on service.

The second pricing pressure is again coming from client, and it’s mostly in Oil & Gas both are the small what I call maintenance CapEx and for the OpEx side. So, it’s clearly the two markets which are today, I would say, suffering for lower volume, which are affected by this price pressure.

So, it’s mostly coming from our clients, on these two markets.

Could you mention pricing -- some pricing pressure in Consumer Products as well? I just wanted to know what segment…

As you could see, last year, on the Consumer Products, we improved our margin by 30 basis points to achieve a margin which is at 24.7%. So, it has always been a competitive environment in this business with traditional retailers.

It is very interesting to see that now we focus on what we call mega vendors. And by doing so, we can clearly at least keep the margin at the level it were because these mega vendors are what we call, tier 2 and instead of negotiated with big retailers we are working with mega vendors, of course mostly in Asia while the suppliers of these retailers and they need certificates from the Bureau Veritas to sell their products to the retailers.

So, it is also -- we protect the margin and we improve it also because we have clearly a strategy in the Consumer Products division which is paying us.

Just a follow-up on your guidance. I would like to know if you are currently confident with 2018 numbers, i.e.

3.5% organic growth on the top line and 20 basis point improvement on your adjusted definitive margin. Secondly, you gave us a guidance for the income tax rate for 2018 of between 23 and 24, is it the level we have to take into account for the medium-term?

And finally, after the launch of Origin, you are saying the blockchain technology is now ready to be launched to a wider range. Can you elaborate a bit more, even if it is at the early stage, as you quantify the benefit of such a technology, are there any risks?

Thank you for your very god questions, of course. And as you know, it’s a good try by the way.

And I do not comment the consensus numbers. But I will go directly to the tax rate question.

Nicolas, could you answer this question, please?

Just to remind the situation in ‘17, we have a relatively lower than usual effective tax rate in 2017, 31.8%. This is mainly linked to two exceptional items.

The reimbursement, which we obtained as early as December ‘17 and which we recognized in the P&L of the 3% back from dividend, which was cancelled by the Constitutional Council. And secondly, we also recognized in the P&L the impact on deferred tax of the change in tax rate in the U.S.

which was lower, as you heard from the vote of the Trump tax package at the very end of the year. So, this is explaining why we end up with a low ETR in 2017.

Looking forward in 2018, we expect to go to a more usual low level of 33%, 34% ETR with those exceptional items no longer being here, and we tax reform in France being deferred, not impacting 2018. And tax reform in the U.S., we have to use system having a more or less neutral impact.

A good question on blockchain. Philippe, if you could answer this very important question by the way.

Yes, I’ll try. You notice that I put blockchain in the innovation category because it is still at least for companies like us at the early stages of adoption.

But we certainly can see some traction in the markets we serve where the traceability or visibility of the supply chain and the integrity of that vision is important. So, certainly, retail and above all, food safety, which has become a real societal issue, we can see interest in the marine sector for the big liners where they need to trace their goods and these goods from the point of shipment to the finally delivery go through many hands and signatures.

So, we have seen big liners establishing the partnerships to establish blockchains. So, at least for those two sectors, we can see an interest for us to test it.

Perhaps Industry will come later and it’s been very massively used today in other sectors like financials for the currencies but this is less a sector for us immediately. With the Origin initiative that we serve a sub segment of retail would be very interesting for us in these markets.

And we had already Philippe lot of demand about this Origin, knowing that clients want to understand where the product is coming from?

There is a long-term need that’s for sure and now there is a short-term necessity to test this technology by many players. And this is where we can start doing interesting pilots and prepare the future.

First of all on the scale of cash flow generation or conversion improvement, just saying your CapEx will tick-up a little bit as its sensitive sales. What’s the scale of working capital gains you think you can maintain with 2018?

So obviously that seems to have working capital outflow as the organic growth is improved. And then, just going back to the margin question, I think Paul referenced whether some new contracts were lower operating marginal or not.

It does took a bit like this growth has picked up in Certification and B&I that the margin has come off a little, and I think Certification was actually down slightly sequentially in profit half on half. So, do you think the margins specifically in B&I and Certification will be up year-on-year in ‘18?

Okay. We will start with your scale of cash flow, Nicolas?

Cash flow and also on CapEx.

Yes, please.

So, basically obtained, thanks to very stringent discipline on CapEx spending in 2017, a rather low level in percentage of scales, 2.8% €133 million in 2017. Looking forward, as we said, we expect our level of capital expenditure to return to above 3% due to the push we plan to help the digital transformation, which requires some investment.

So, we may return to region around €150 million of CapEx for 2018. You also focused your question on working capital.

Regarding working capital, as you heard during our last Investor Day, we have started a specific initiative called Move for Cash to reduce our working capital. We expected to get some benefits.

If you look into 2017 during the second half, the end of the year which helped the lending last year. And we will obviously continue with this initiative with a goal to improve working capital as much as possible, knowing that as we see our growth accelerating, this has a mechanical and favorable effect on working capital.

So, the goal is to counter that effect. And obviously we wish to grow in ‘18, and we want to keep on with the high cash conversion rate.

Okay. Thank you.

But if we look at your DSOs, would you venture a level or a number which you think you would be able to improve this year?

That’s a nice try but we won’t unfortunately guide on -- specifically on this component of cash flow generation. We really don’t guide on such a deep level of detail.

Sorry.

Thank you for the try. On the margin side.

So, you asked about these new contracts, clearly on the OpEx side with some new contracts in Power & Utilities, at first, we have a margin which is dilutive to the margin of the Group. But, as we discussed before, again, with the ramp up of the contract, we will clearly improve positively the margin.

And of course, in this case, we are talking of quite large contracts which is good news for us because it’s a way to diversify knowing that these contracts are long-term contracts. So, it’s also a way for us to become more and more resilient.

On the Certification, it’s a very easy answer, in fact, because the margin was negatively impacted last year by investments made in the U.S. and in Latam where we did study to develop new services.

So, it’s clearly coming from geographic mix, margin is still at a good level, little bit more than 17%. But, it’s coming from the fact that we have decided to launch for instance new services in Certification on the food supply chain in particular in the U.S.

and also in Latin America. So, it is the reason why the margin is slightly down and honestly, I encourage the operations to continue to develop these types of new services in the U.S., Canada and also in Latin America to increase our presence there.

On the B&I side, if we continue to have China delivering such a good organic growth, it should help us to continue to improve the margin because the margin we make in China is better not because it’s China, it’s just because we work on highly technical type of services, both in the infrastructure and also in energy. And we should clearly see a French recovery B&I which has today still a negative mix effect on the average of the B&I margin.

I’ve got two areas I’d like to ask about, please. The first is in Agri-Food & Commodities, you’ve sized again in the oil and petroleum market a tough competitive environment.

Is that the case in just North America or is that now rolled across into Europe as well? How are you dealing with what seem like quantitative mid size players, particularly North America, how can you respond and hold your market share against quite aggressive price discounting please?

And then the second question is around marine. The margins fell sequentially quite a lot, 300, 400 bps first half to second half despite a very heavy second half restructuring charge, which is stripped out.

Quarterly orders have fallen, but the fourth quarter was a weakest order inflow for the year and the order book has fallen for two quarters. Would it be fair to say that your perception for trajectory of recovery of marine has softened in recent months, please?

Okay. Philippe, if you’re okay, we can start with marine and after we’ll to the Agri-Food and Commodities business?

Yes. So, the question is our perception of recovery marine has softened in the latest months.

I would respond in two ways. The challenge in terms of maintaining to profitability appropriate restructuring is still there, it’s not finished.

So, that we’d say is on the negative side. But, on the positive side, I was not expecting on the replenishment of the order book that level of orders in 2017, which seems too soon to say now to follow the same trend into ‘18.

And if this is confirmed, then I think our expectation of the recovery of the marine business is justified at this stage.

Excellent. So, regarding your Agri-Food & Commodities business, I would say three answers.

The first one on Agri-Food, thanks to the acquisition, we have made in particular in Latam, we’re now one of the largest player in particular on agri. Do we have -- we always have some challenges in terms of course but we’re still doing very well and we’re happy with the type of margin we deliver in this case.

On the metals and minerals, the business has restarted, clearly both in terms of trade and upstream. So, it’s more again opportunities, as you could see in 2017, we improved our margin.

The only market which is today a little bit under attention is oil and petrochemicals product testing. The good news for us is that we have very limited exposure in Europe.

And this is where the competition is the toughest. So, this is my answer regarding the Agri-Food & Commodities business.

Thank you. Just as a follow-up, what about in North America in oil and petroleum cargo testing?

Are you not seeing quite pronounced competitive price pressures there, and what are you doing about it, please?

I cannot see how a lot of pressure on purely the pricing. I has stabilized in North America.

I think I know why you’re asking the question is probably by the fact that the reserves are less and less and there could be less trade in 2018. But, in North America, things have stabilized in 2017 and we could see the same trend for this year.

After we have competitors as we have everywhere but as you know we are quite large player in the U.S. And you know it very well, clearly, the business has stabilized.

Is it going to be the growth we had the last two years, honestly on purely oil and petrochemicals, I don’t think so. But it’s going to be quite stable, a little bit up in terms of growth.

Hi, there. It’s actually George Gregory using from Exane using Allen’s phone.

Just a couple, please. Firstly, just on the margin impact of M&A.

Nicolas, you gave us some commentary on the FX impact. Perhaps I missed it.

I think Paul asked, but if you could just clarify what impact you expect M&A to have on the margin, based on what you’ve already done of course? Secondly, we’ve touched on some of this already, but in terms of some of the decisional margin trends, the second half marine margin was I think less than what we had previously talked about in prior calls, whist AF&C was much better.

Aside from the underlying trends, I just wondered if there were any unusual contract movements in the second half?

So Philippe, we can start with you, unusual contract movements in the second half.

No, nothing exceptional, again, it was the mix, less deliveries and less new constructions which affected H2. The price pressure effect on shipping services is continuous, it was felt more in 2017, but nothing exceptional in H2.

And again, what we believe is that recovery of the new constructions will again reverse the trend in terms of mix and help us get back the margin where it should be.

Regarding your first point about margin in M&A, the dilutive impact is coming exclusively from Schutter. So, this is clear.

But, I can tell you I’m extremely happy that I made this acquisition. Thanks to this acquisition now, we are clearly one of the two largest player in the world regarding the agri business.

And I was in Latin America last week in Brazil in particular and I could see already the very good job done by Schutter and we are just ready to aggregate all of our agri businesses there. Thanks to these synergies we should continue to improve the margin in 2018 on the Agri-Food business.