Earnings Call: Q1 2019

Apr 25, 2019

Hello, and welcome to the Bureau Veritas Q1 2019 Revenue Call. My name is Mahan, and I'll be your coordinator for today's event. During the call, you'll be on listen only. However, you have the opportunity to ask questions later on the call. I am now handing you over to your host, Didier Michel Daniel, Chief Executive Officer to begin today's conference. Thank you. Thank you. Good afternoon and good evening to everyone. Thank you for joining Bureau Veritas Q1 2019 revenue call. Francois Chabad, our group CFO is here with me to present the financial review. In Q1 2019, I'm on Page 5. In Q1 2019, revenue for the quarter was 1 point €18,000,000,000 up 5.8 percent at constant currency. We continue to progress on the group's transformation. 5 out of 6 businesses are growing at 4.5% organically on average, bringing our overall organic revenue growth up to 4%. Among our best performers, we have agri food and commodities at 7.8%, consumer products at 4.1% and industry at plus 3.7%. In Q1, the external growth was 1.8%. Concerning currency, the impact is positive, 1%. Our full year 2019 outlook is confirmed. Taking a closer look at merger and acquisitions. In 2019, we started the year adding around €45,000,000 of annualized revenue with 4 acquisitions notably reinforcing our footprint in the U. S. And Asia. Supporting growth in buildings and infrastructure, we made the acquisition of Capital Energy, the company providing consulting and support services for energy efficiency projects in France and the O1 Group, a U. S. Regional leader in buildings and infrastructure compliance services, including accessibility compliance for disabled people. In supporting agri food growth, we announced BVAQ in Singapore, a joint venture created with Azure Quality, a New Zealand company to provide food testing services. And as announced last week, the acquisition of Shenzhen Total Test Technology, a food testing company in China. Moving to the financial review, Francois will now take us through the numbers. Francois, please? Thank you, Didier. Starting with the revenue bridge on Page 8. The EUR 1,175,000,000 achieved in the Q1 2019 with an overall growth of 6.8 percent, breaks down as follows: 1st, organic growth reached 4%, in line with the full year 2018. 2nd, external growth contributed plus 1.8% on a net basis. And finally, as mentioned by Didier, ForEx had a slightly positive impact of +1%, which is mainly attributed to the appreciation of the USD and Chinese renminbi against the euro, while mitigated by the weakness still of some emerging countries' currencies. To be noted, this is the first time in 2 years that foreign exchange is positive. Turning to revenue growth by business and the split between organic and external. We see that 5 out of our 6 businesses reached a solid pace of organic growth of 4.5% on average. They altogether represent 93% of the group's revenue. Focusing on the key areas, Agri Food and Communities outperformed the average at +7.8 with good growth across the board. Consumer Products achieved a healthy plus 4.1 percent in Q1. And at the same time, late cyclical activities are gradually recovering. Marine and Offshore is up 3.2 percent, industry starting to benefit from improving oil and gas CapEx markets and is up 3.7%. As expected, obviously, certification declined 1.9%, which is a reflection of a transitional year post provision of standards. Moving now to the split of organic growth between base business and growth initiative on Page 10. We can see that the base business, representing 63% of group revenue, is up 2.5% organically in Q1. On the one hand, it benefited from improving trends in both oil and gas CapEx and marine offshore markets. On the other hand, it was impacted by the end of the 3 standard revision payers in certification. In terms of our growth initiatives, they have continued to perform steadily, up 6.9% organically in Q1. They now represent 37% of the group revenue. Within this growth initiative, performance was as follows: double digit growth for Smart World high single digit growth for agri food and OpEx services, high single digit growth again for B and I, despite a high comparison base year on year, while automotive experienced an organic decrease in Q1 due to the end of the revision of standards in the automotive industry. So to recap, our Q1 revenue is fully aligned with our full year's expectations. With that, I will now turn it back to Didier for the business review. Thank you, Francois. Starting with Marine and Ophir on Page 12. For Q1, organic revenue is up 3.2% organically with new orders increasing to 1,900,000 gross points at the end March 2019 compared to 1,800,000 a year ago. Overall, our order book progressed by 8.9 percent year on year, up to 13,900,000 gross tons. A slow recovery is underway in this sector with growth further highlighted by new construction, driven by the equipment certification business in China and impacted by a timing issue in the scheduling of deliveries by shipowners and for core in service benefiting from favorable timing of inspections, plus for services, including offshore, led by a gradual improvement of risk assessment studies and the extension of services provided to customers. For 2019, we continue to expect organic growth to be positive in Marine and Offshore due to recovery in new construction, notably led by China, along with our resiliency in in service activity, including offshore related activities. Looking now at the 2019 marine market perspective. We see that the latest Clarksons data for worldwide new ship orders has been revised downward for 2019, primarily as a result of a higher number of newbuild contracts signed up in Q4 2018, representing a shift of projects expected to materialize in Q1 2019 back to Q4 2018. However, given that BV is outperforming the market, we view this as further validation that we have good dynamics in place relative to the market. We consider this a result of our focus on diversifying our exposure and on building a strong position in attractive segments. As shown on the slide, our new order book is very diversified with expanding shares for bulk, LNG vessels, tankers and passenger ships. Moving on the Hydro Food and Commodities business. Revenue accelerated to a robust 7.8% organically in Q1 with strong performances in 3 out of 4 sub segments. Oil and petrochemicals is up by 1.3% organically, reflecting mid single digit growth in Europe, thanks to new services, while slightly negative in North America explained by the bad weather in the Gulf Coast region and persistent price pressure in traditional cargo inspection business. Metals and Minerals continued its sound recovery, up 15.5% in organic growth. Upstream activities grew by 15.9% led by Africa, Americas and Pacific. Trade activities achieved 14.8% led by non coal trade minerals with particularly high growth in the UK, China and in West Africa. Agri Food. Agri Food recorded a 9.1% organic increase, led by strong performances for Agri and strong growth in Food Products. The Agri business recovered benefited from new contract wins, notably in Precision Farming and from favorable comps. And lastly, Government Services achieved 9.2% organic revenue growth as it fully benefited from the ramp up of VOC and single window contracts as well as favorable comparables. On the 2019 outlook, we anticipate similar organic revenue growth compared to 2018, fueled by solid metals and mineral markets, robust agri food businesses and improving government services. Covering industry. The business confirms its recovery that started in 2018, up 3.7% organically. This results from our successful OpEx diversification together with improving oil and gas market conditions. Oil and Gas CapEx related activities represent 16% of divisional revenue, growing 4.6% in Q1, confirming the trend observed in H2 2018. Growth was led by the U. S, LatAm and South Korea. Projects were primarily focused on gas and onshore activities. Oil and Gas OpEx grew 15% with strong volume increases in LatAm and Middle East. We achieved 4.1 percent organic growth in Power and Utilities OpEx with the ramp up of several contracts in Latin America mitigated by weaker trends in Europe. For the 2019 outlook, we still expect the business to achieve similar organic revenue growth versus 2018. Our strategy of OpEx Services diversification will continue to pay off and we anticipate oil and gas CapEx markets to improve in the second half. In Buildings and Infrastructure, revenue increased by 3% organically with slightly stronger organic growth for construction related activities. Organic growth performance was strong in Asia, driven by 12.7 percent organic growth in China, where our prospects remain healthy and in infrastructure project and also by Australia benefiting from the Mackenzie acquisition. Robust growth in Americas with the recovery in Brazil and solid performance in the United States, in particular for Code Compliance Services. Resilient growth in Europe, including France. Here, OpEx related activities started slowly as a result of tough comparables and CapEx related activities remained subdued. In the quarter, the business was impacted by one less working day. For full year 2019, we expect the business to achieve similar organic revenue growth versus 2018 with strong growth in Asia, solid growth in the U. S. And Latin America and resiliency in France. Covering certification. Here, against challenging comparable, the business recorded a negative organic growth of minus 1.9% in Q1. This is attributed to the end of the 3 year revision period on QHSE and transportation standards. QHSE and transportation certification market declined as expected as a result of the absence of transition mandate. Double digit organic growth was achieved elsewhere, in particular, social and customers' audit, sustainability and CSR and food certification. High double digit growth was also recorded in the enterprise risk management offering including anti bribery, business continuity, cybersecurity and GDPR data privacy certification. Our outlook for 2019 is that we still anticipate a slightly negative organic revenue growth in certification, again due to the impact from the QHST and transportation transition, which ended in September 2018, creating challenging comparables for the 1st 9 months of the year. However, we expect solid growth elsewhere to continue, primarily driven by food schemes, sustainability, training and customer audits. For Consumer Products, the business delivered a 4.1% organic growth in Q1 across all major service categories. Growth in Electrical and Electronics was led by double digit growth in mobile testing, primarily in Southeast Asia and Europe, with automotive facing challenging comparables in the quarter. Hardlines performed slightly above the divisional average, driven by new contract wins in Europe. Toys grew slightly compared to last year, while cosmetics achieved high double digit growth. With the growth in soft lines being led by solid growth in Europe and a very strong momentum in Southeast Asia that continues to benefit from the relocation of Chinese manufacturing activities. In Q1, we opened a new soft line testing laboratory in Hanoi to cope with the rising demand in the country. In 2019, we expect consumer products to maintain similar organic growth compared to 2018 with strong momentum in Southeast Asia, solid growth in Europe and resiliency in the U. S. And China. That said, we expect some quarterly fluctuations with a stronger organic revenue performance in H2 compared to H1. We anticipate a slower Q2 than Q1 by gathering information from some of our customers on new product launches. We have, however, a solid backlog of opportunities that should support a pickup in both Q3 and Q4. Outlook for full year 2019, we maintain our guidance confirming solid organic revenue growth with continued adjusted operating margin improvement at constant currency and sustained strong cash flow generation. In conclusion, 2019 is off to a solid start. Our 2019 outlook is confirmed, and we will continue to vigorously build on this positive momentum throughout 2019. Thank you for your attention. With that, Francois and I are now pleased to answer any questions on the call or through the webcast that you may have. And the first question comes from the line of Edward Stanley from Morgan Stanley. Please go ahead. Evening. I've got 3, please. In Agri Food, you talk about metals and doing very well at 15%, Agri Food doing well Agri Food doing well at 9%. Both benefited seemingly from quite large contract wins. I'm wondering how much of the divisional growth was boosted by new clients and contracts rather than underlying growth. So what was the growth in the division excluding those big contracts? Secondly, in the pipeline and CapEx commentary you talk about, it sounds like a few small contracts. But collectively, I'm wondering how large that opportunity is for CapEx opportunities and when that will convert into the order book. And finally, on you mentioned on net debt slightly increasing. Is that simply a seasonality thing of cash or is that M and A related? You could take the last question, Francois, and I will answer the first and the second one. So starting with the 3rd point on debt. It's a pure seasonality effect. As you know, we're most of our flexible part of the remuneration, the bonuses of our managers are paid in March. So it's a large cash outflow that we have every year. So no other elements at that stage when it comes to debt. So our collections are working fine and the same for working capital. So on your first question, Edouard, I mean, on the Ivory Foot business, it's true that we are quite happy with the strategy that we decided to launch 3 years ago. And we are clearly getting some good news from the launch of our approach with, I would say, large accounts. And of course, we clearly won some contracts even if we cannot dissociate this type of business because of a very large range of services, as you know. So but whatever, we won some very good contracts, in particular, in Latin America when we talk about Agri. Regarding food, we have now such a good footprint between our acquisitions and the green lab that we established across the world, 75 labs now. So it's quite a nice footprint that now of course we get quite a good organic growth in food. Regarding the metals and minerals, as you know, the market is doing a lot better, thanks to the recovery of the gold price. I should say copper and we got also some very good contracts on some basic, I would say, metals and minerals business in Africa. So it's also the fact that there is some outsourcing done both in Australia and Africa, and we won this contract. So it's the reason why we have such a good performance in metals and minerals. Regarding now the CapEx, I imagine that you are talking about the CapEx oil and gas. So it's true that there are multiple contracts, multiple bids, multiple opportunities. Probably these contracts are not as big as they were in the past. There are small and medium contracts, but when you aggregate the potential, it's becoming something quite substantial. We already won some contracts and I will give you more details in at the end of H1 that should impact our industry results revenue positively this year. But it's true that there is quite a large pipeline of small and medium contracts, both on gas and onshore oil. Excellent. Thank you. My pleasure. Okay. The next question comes from the line of Andy Grobler from Credit Suisse. Please go ahead. Hi, good evening. Just 2 for me, if I may. Going back to Agri Food and Commodities, after a very good start to the year with 7.8%, you're guiding towards similar kind of growth rates to last year. Which bits of that portfolio are you expecting to slow down through the year? And kind of what are the moving parts? And then within Consumer, you noted that Southeast Asia was very strong. Can you give a bit more color around how Southeast Asia relative to China performed during the period? And kind of what your expectations are for the next few months would be great? Thank you. Thank you, Andy, for your question. So taking your first one about the Agri Food business, we do not change guidance at Q1 stage, as you can imagine, of course, and we might adjust it after the end of Q2. But it's clear that when you look at this very good performance that we record in Agri Food and Communities, the comps might get tougher along the year. But the point you are making is a good one. It's clear it's a very good start in this business. And in fact, the strategy that we implemented again on food and agri is way paying off. And now we can clearly see that we are taking market share and we are growing at a good pace in this very, I would say, very important business for broad data because somewhere I'm talking about food, less cyclical and more resilient for the future. And we know that we will be 9,000,000,000 people on earth, who are 7,000,000,000 in 2,050, meaning that people will need more agri and more food. So this is clearly a very good business. On the consumer side, again, a very good question. It's clear that we can see a shift in particular on soft lines from China to Southeast Asia. It's the reason why we decided to open a lab in Hanoi in Vietnam because today our I could give you a good example. In Vietnam, we grew approximately by 20% in Q1 on Softlines. And if you take Southeast Asia as a whole, it's probably something like 15%. So clearly, the shift is happening. The good news is that we have we anticipated it 3 years ago and we have a very good footprint of consumer product labs in this region. Does that imply that China is was flat or negative in the quarter? No, China was not negative. China is stable, meaning a little bit positive, but less positive than what it were in the past. But of course, as you know, the supply chain, in particular on SoftIron, is moving progressively to services Asia. And again, so China is not moving down, but it's quite stable and we benefit from our good footprint in Southeast Asia. Okay, excellent. Thank you very much. My pleasure, Andy. The next question comes from the line of Heinrich Poulain from Kepler. Please go ahead. Yes, thank you. Good evening. My question is a follow-up of Andrew's question on your guidance for organic growth being same as last year when you're starting a sort of both the full year of last year and you have weaker comps in certification in Q4. You have the oil CapEx picking up and obviously the agro food you mentioned already. So what makes you prudent at this stage? What are the main areas of concern in your portfolio at present? That's the first question. And second, you mentioned the first pickup in GDPR certification and some cybersecurity certification. Do you have now a better visibility on the size of the opportunity? And how big this segment could become over the next few years? Thank you. Okay. Very good question, Marie. So first point, I have no real concern because I confirm the guidance for the year. So we start at 4% and I guided for a solid organic revenue growth. So I confirm this guidance. It's a little bit too early to move, why not in a positive way as we will see after Q2 and even in a negative way. What I can confirm now is that I'm cautiously optimistic about this year and the fact that we should achieve this guidance. So do I have a particular concern? The answer is no. I do not have a particular concern. We are clearly on our guidance, quite on each of the activity. On the GDPR and cybersecurity, we will come back on that one. We are trying to evaluate the market. You may know that we are working already on our next strategy, we call it for the month 2020X. And of course, this market is a market which is moving fast, which is going fast and we are already working on evaluating what could be the size of this market. We are talking about data protection, we are talking about cybersecurity. Clearly, we have more and more clients asking us to support them on these major issues for them. And again, I will come back on this major question. It's a little bit too early for the moment. Okay. Thank you. The next question comes from the line of Rory McKenzie from UBS. Please go ahead. Evening. 3 for me, please. Firstly, in Marine, obviously, you had a really strong end to 2018 in growth there and it slowed in Q1. It sounds like some of that was maybe phasing. Is there anything else we should be aware of over the coming quarters for the growth rates in Marine? Any tough comps or any orders being shifted around there? Then secondly, in Building and Infrastructure, can you talk more about the growth in China? Is that the ramp up of existing projects? Or are you still signing more and more contracts? And then lastly, in Consumer, you talked about accelerating growth in Southeast Asia. Is that requiring much incremental investment? Things like opening this new lab in Vietnam, does that kind of growing shift make the aim to protect margins a little bit harder for you in Consumer? Thank you. Okay. Thank you for your question. Maybe Francois, you could take the as we are talking about investment and Yes. Thank you, Didier. Well, we'll start with the third question on the as you mentioned, right, we saw the redeployment of our capabilities towards Southeast Asia. So first, it's not new. So as Didier mentioned, if we take Vietnam, if we take Cambodia, we've done it. We started actually more than 3 years ago. Overall, Consumer Product division, the CapEx that we have for the year remains similar to the one of the last 2 years, which is in the range of 4% to 5% for the Consumer Products division. And for the group, it doesn't impact the total level of the group that we keep at 3%. So I would say it's more less investment in China, more investment in Southeast Asia, but that doesn't change overall the balance of our financial profile when it comes to those activities. Especially, as Didier mentioned, the activities moving or which have been moving now for a couple of years, activity that we really know and we have been operating for more than 15 years. Soft lines, laboratory is an area where we know exactly how to operate, we know the machines, we know Thank you, Francois. So Thank you, Francois. So I'm going to take your second question, which is on building and infrastructure. You're right and we are doing very well in China. Our organic growth is between 12% to 13%, showing again that the strategy that we decided to launch 3, 4 years ago is paying off. And I do not see any slowdown. As you may know, the existing has decided to invest massively in infrastructure. We decided at Glorovetas to be on infrastructure and energy. These are the markets which are growing fast in China. So I'm quite optimistic for the future and we are clearly winning some good contracts and the backlog is good. Regarding demand in Offshore, 2 0.0 organic growth is aligned with our full year guidance. Our full year guidance is positive organic revenue growth. So we are fully aligned with the guidance for the year. Great. Thank you very much. My pleasure. The next question comes from the line of Tom Sykes from Deutsche Bank. Please go ahead. Thank you. Good evening, everybody. Some follow ups, if I could do, just on the Consumer business again. So when you say you talk about growth improving in the second half of the year, do you think that your domestic China business will improve a little in the second half of the year? Or are you just expecting the improvement to come through in Southeast Asia? And are you seeing any acceleration in the relocations due to the trade effects? Or is this just ongoing trend? And I suppose in terms of your comments on the margin there, is the domestic China margin, can you protect that? Or should we be thinking about positive margins from growth outside, but China margin under a bit of pressure? Another question just on Industry, please. You mentioned lots of bits that are growing more quickly than the division, but I just wondered what was slower. And then just finally on cash flow, I know it's a revenue call, but you answered cash flow question before. The consensus has flat free cash flow this year. Do you think you can do better than that? So on the cash flow, it's too early to answer your question, and we will come back on this question, which is an important one after our publication in H1. The only thing I can tell you is that we are focusing on cash as you could imagine. We did quite well last year and with Francois with NextMe. Cash is a clear priority for the company. Again, we will give you some news at the end of H1. It's not, of course, for today, it's not the topic of today. So the other questions now, the first one is on consumer business. We expect in fact a similar organic revenue growth as last year. As you know, we have quite a best in class margin at 25%. We do not see even if again, this call is not about margin, we do not see any deterioration for the year. The fact that the business is quite stable in China and we are doing well in Southeast Asia where the cost base is lower makes me quite optimistic regarding the at least keeping the margin where it is today. On the now industry, on the industry, so maybe I should come back on the consumer product because in my comments, I said that Q2 is going to be quite lower than Q1. It's just because of the way the backlog is organized this year. But overall, H2 is going to be above H1. And again, we should achieve the same similar organic revenue growth as last year. On the industry, so your question was about the organic growth for Q1, which is at yes, sorry. Yes, sorry. It was just that I think you picked out several bits that were growing more quickly than the division. So I just wondered what part of the division was slow? Is it just the European business that's been impacted? It's very simple. And again, I can have a quite clear answer on this one. In fact, it's a P and U CapEx business in Europe. We have not lost any contract, but 2 contracts ended at the end of last year. Okay, okay. Thank you. And sorry, one other question would just be, can you make any comments on your domestic China business sort of ex consumer? Obviously, we're seeing some slightly better data out of China. Does that imply that your growth might be able to accelerate a bit there? It's too early to talk about it, but it's again a good question. As you know, we are doing very well in China, both of course, on infrastructure. We do very well on commodities. We do well on food as well. It's a little bit too early to talk about the consumer product. Again, we can foresee stability and we will take any opportunity to grow our business regarding the domestic market. Okay. Thank you very much indeed. My pleasure. The next question comes from the line of George Gregory from Exane. Please go ahead. Evening. Just one for me, please. Thinking about the phasing of growth into the second quarter, Didier, you obviously flagged the slightly softer growth in Consumer, The certification comparative is pretty tough in the second quarter. Just wondering, is there anything that could offset that at a group level? Or should we be expecting the 2nd quarter to be softer than the Q1 before perhaps improving in the second half of this year, please? We don't as you know, we don't give any quarterly guidance. I confirm the guidance for the whole year. After you are talking about consumer and certification, as you know, we have a good mix of activities now, much more resilient than the one we had in the past. So we will give you the Q2 results at the end of Q2. Okay. Thank you. Okay. The next question comes from the line of Rajesh Kumar from HSBC. Please go ahead. Hi, good evening. Just on the consumer business, you made very helpful comments explaining how business was moving away from China into Vietnam, into Southeast Asia. Do you think how do you see the competitive landscape shape up in these geographies compared to the traditional Chinese supplier base? And also, if we look at the impact on the numbers, do you see a higher profit contribution coming from a lower revenue base? And then are you billing, say, if you're billing $100 in China, are you billing $90 in Vietnam, but you're making a bigger margin because of a lower cost base? If you could throw some light on the mechanics without going into the actual numbers, but just on the dynamics involved in there. Okay. So as you know, today it's not a margin call clearly, but it's important for you to understand that this move to Southeast Asia is accelerating. And what I can tell you is that our competitive positioning in these countries is very good. I'm talking about mostly Vietnam, Cambodia, India. And again, when I look at the organic growth that we are recording and that we recorded in Q1 last year. Clearly, the decision we made by having more labs in this country was a good one and are paying off. And you can see it, we have decided to open another lab in Vietnam in Illinois because we are growing close to 20%. So we need to continue to expand our footprint there. But in terms of competition and step, we are quite well positioned. That's helpful. Just in terms of the billing rate, is it lower in Vietnam than China? In fact, as you know, our clients are mostly U. S. And U. S. And Europe based. So no, it's not. There is no difference. In fact, we are selling a service and we have no reason to decrease the price because the manufacturing sites are in a different location. So the good news for us is you are right about the cost base, which is lower than China. But after you know the business, we are clearly having more opportunities in the Smart Roll business, which has a little bit lower margin than the traditional business. So one is compensating the other. Understood. No, that's very helpful comment. Thank you. And just the last one on going for larger contracts. That strategy seems to be bearing fruit, especially in Agri Food Metals division, you're recording better growth. Going forward, should we expect a bit more chunkier growth unlike the past where it was a slightly more continuous pattern. Should we expect step ups and step downs as contracts come and go? Not really because what you need to know that you mentioned 2 types of contracts, Metals and Minerals and Agri Food. I could have mentioned as well contracts in OpEx Oil and Gas. For instance, we won a contract of more than €60,000,000 largest contract ever in Qatar Gas last year. This type of contract has for many years, we won a contract on power and utilities, OpEx in Brazil, €26,000,000 This contract is going to be 3 to 5 years. And in Agri Food, if you deliver a good service to your clients, you keep the contracts for a long time. The attrition rate is not as high. On the commodities side, of course, if you are working in a mine, you most of the time, the mine company is not moving from a supplier to another every year. So when you think about the cyclicality of the business, we are much more resilient and a lot less cyclical. And it's true for all of these businesses now. And this is what I like. In the past, we had large contracts, as you know, which were CapEx oil and gas. You work on a very large offshore platform with a very huge contract. When it's over, it's over. Now it's not anymore the case. We are much more oriented on OpEx, production and again, Agri Food, if we deliver a good service, clients are quite loyal. Thank you very much. Okay. So we have a few questions in the queue. And the next question comes from the line of Bruno De La Roche Poschiere from Bryan and Garnier. Please go ahead. Good morning. Good evening, everyone. Just a quick follow-up regarding late cyclical activities, I. E, Marine Sand Industry. After a strong recovery in quarter 4 and despite positive comps in Q1, Organic seems to be a bit low. Are you as confident as before regarding the recovery of both businesses? And finally, regarding organic for the full year, are you confident with the consensus of 3.8%? Thank you. No, I have not changed my guidance. As I told you, the guidance is organic growth for the year. You asked questions about Marine and offshore, the guidance is positive organic revenue growth, I confirm it. Regarding Industry, I confirm similar organic revenue growth versus 2018. Okay. Thank you. The next question comes from the line of Ed Steele from Citi. Please go ahead. Good afternoon, good evening, everyone. Just one question for me, please. Given this quite important revenue shift within consumer from China into Southeast Asia, could you give us a rough feel for the proportion of revenue within Consumer that those that China and Southeast Asia respectively contributes today, please? Let me have a look. 20% is coming from Southeast Asia today. But of course, you should consider the fact that all electronics part are I don't know if you consider it as Southeast Asia, but the testing is done in Taiwan. So I include for non Taiwan, it should be on top because there is no issue in this I mean, issue. There is no slowdown on this very important business that we have in Taiwan because we are really testing the electronics there. And it's the reason why you should consider SCEA represented today, approximately 20% of the ore revenue of the Consumer Products division. Okay. Thank you. So 20% is Southeast Asia and China today is how much, please? Thank you for the question. Usually, we don't disclose this number. I think you said in the past that Asia is about 70%, 75%. You are right. So you can make the calculation. Okay. I suppose you got India on top, right? No, but India is not as big. India is not as big. No. So you are close to what China is with just with the number that you just leave to me. Okay. Thank you very much. My pleasure. The next and final question comes from the line of Alex Mees from JPMorgan. Please go ahead. Good evening and thanks for taking my question. Just 2, the first one with regard to oil and gas CapEx, as activity levels improve, I wonder if you are seeing pricing improve as well and whether you see an opportunity for further improvements. And secondly, 4 deals done so far in terms of acquisitions. I just wonder if you can update us on which sectors you're prioritizing for further acquisitions as the year goes on. Thank you. Okay. We're going to start with your second question. Francois, you would like to cover that one, please? Yes, thank you. When it comes to the deals, so we haven't changed so much. I mean, we keep a very disciplined approach to M and A. So with the focus that we have on our 5 growth initiative and a second focus, which is more geographically driven, which is U. S. And China. When it comes to what has been achieved so far this year, if I understand this is your question, When you look at the 4 acquisitions made by the end of actually, there is a bit more of March because we've done the last one almost last week. So until mid April, we have a focus on agri food in Southeast Asia. So it relates to a strategy to improve our footprint when it comes to laboratory and food testing in laboratory. 1 is BVAQ, which is a joint venture and bringing a large laboratory capacity in Singapore. The second one is a company that we've purchased in Shenzhen, which brings us more capacity and larger capacity in food testing in China, where you know the testing of food products has been privatized now recently and we are strengthening our position there. The second pillar of the 4 acquisition is the 2 others are building infrastructure related, 1 in France around energy efficiency and one in the U. S. Around asset management, which is basically B and I OpEx Services. And it goes within the couple of acquisition we've made last year in the U. S, same field like EMG, like Premier Integration, all of them building or contributing to further build the platform of our B and I business in the U. S. So in a nutshell, we keep on our disciplined way of doing acquisition with those focuses in mind. Okay. Coming back now on your Oil and Gas CapEx question on the pricing, it's a little bit too early to talk about the evolution of the price. But as you know, we are not so many companies which are capable to deliver service. So of course, if there is more volume, you could imagine that it's again too early, the price at least would be stable. And again, we might discuss it in the future and probably after H1. But the good news for us that BV is there are 2 good news. In fact, the fact the CapEx on gas as we started clearly and we can see and we anticipate some good wins. And the second good news is there are not too large contracts, meaning that we will be less dependent on large contracts, which could end and impact negatively in the future our organic growth. So two good news and clearly the industry and with the barrel at $75 today, this part of the industry is going to help us to deliver the guidance for the year. Thank you for your question, by the way. That's very clear. Thank you very much. So there is no further questions. I'll turn the call back to your host for any closing remarks. Okay. So thank you very much for your questions and for your attention. I wish you good afternoon and good evening. Thank you for joining today's call. You may now disconnect your handsets.