Earnings Call: H2 2018

Feb 28, 2019

Good afternoon and good evening to everyone. Thank you for joining Bureau Veritas Full Year 2018 Results on the webcast and on the call. Francois Chabot, our Group CFO, is here with me to present our full year results. 2018 was a strong year of progress for the group. We made significant steps in the execution of our strategic plan with a focus on group diversification and digital transformation well underway. And we continued to improve financial performance. Indeed, we achieved all the objectives that we set at the start of the year. Bureau Verita has delivered 4% organic growth in 2018, nearly twice the 2.2% in 2017, A margin of 16.1%, up 20 basis points at constant currency. A major improvement in free cash flow, up 45.8 percent by €130,000,000 to nearly €480,000,000 I will leave Francois to go into the detail of the financials, but a couple more comments. Group revenue grew by 7% year on year at constant currency and our adjusted operating profit is up 8.4% at constant currency. Regarding the dividend, we will propose to shareholders a dividend of €0.56 with a payment option in cash or in shares. Wendel intends to opt for the dividend payment in shares. 2018 achievements were across the group. This can be highlighted in 4 key areas: a strong organization. Over the course of the last 12 months, the management team has been reinforced with several key appointments. Accelerating revenue growth, organic revenue growth of 4% led by our 5 growth initiatives, which grew 6.3% organically and by our base business, which grew 2.9%. Major improvement in our cash flow generation showing that our Move for Cash program is delivering results. And 4th, an overall acceleration of our transformation supported by digital initiatives and redesigned customer account strategy. The high added value and integrated solutions we propose to global customers is illustrated by our winning the Qatar Gas OpEx contract. Regarding our digital transformation, we have now deployed globally solutions to all end markets. It is supported by successful on promising partnerships with Avitas, Autodesk, Worldline. To this, we can now add the global collaboration with Microsoft on artificial intelligence, which we announced last night. Now turning to the benefits of the group's diversification, which has been strongly reinforced in the past years. Our portfolio is today very well balanced from a cyclical perspective. As you can see on the chart, we estimate that 45% of the group revenue is from OpEx and Systems derived from existing assets. Here, we are talking about high visibility, repeat business driven by regulations or standards. 33% is products related. It comprises our Agri Food and Commodities business, which is volume driven with notably healthy prospects in food and consumer products with high loyalty for obvious reasons, which relies on innovation and technological changes. Lastly, 22% of our revenue relies on our clients' CapEx decisions, a combination of new buildings and infrastructures, new energy projects notably in oil and gas and new ships. All these markets are today recovering. I will come back with comments on each of our businesses. But first, Francois will walk us through the excellent financial performance. Francois? Thank you, Didier. I think we all agree this is a very good set of numbers. Starting with the revenue bridge, we break out the 7% growth at constant currency. The group's full year 2018 revenue came in at €4,800,000,000 up 2.3%. Organic growth reached 4% compared with 2.2% in 2017. Acquisition contributed 3% to group growth on a net basis. And finally, ForEx had a significant negative impact of 4.7%, which is mainly attributed to the appreciation of the euro against the USD NPAC currency as well as emerging countries currency. In Q4, however, we saw a slight easing negative impact still at minus 2. Turning to the revenue growth by business. We delivered 4% organic growth with Certification, obviously, outperforming the average at 7.8%. 3 businesses within the 4% to 5% growth range: Agri Food and Commodities, up 4.5% Building Infrastructure and Consumer Products, both up 4.3% and industry accelerating throughout the year to reach 3.5%. It is the 1st year of organic growth since 2014 for industry. And only Marine and Offshore remain in negative territory organically, even though it recovered in the second half. Focusing on the last quarter, Q4, we delivered 4.4% organic growth. Bus performers were Marine and Offshore, up 6.9%, mainly driven by new construction activity in China industry up 6.2% benefiting from a successful OpEx diversification together with improving oil and gas CapEx activities. As anticipated, certification declined by 3.5% organically. It reflects the end of the 3 year standards revision period. Overall, organic growth was driven by both base business and Overall, organic growth was driven by both base business and growth initiative, which we see on the following slide. We saw an improvement over the year of the base business, up 2.9% organically with an acceleration to 4.1% in the last quarter. In addition, our growth initiatives have continued to perform steadily, up 6.3% organically with high single digit growth achieved in OpEx Services, B and I and Smart World and mid single digit growth for Agri Food and Automotive. I mean altogether, these growth initiatives now represent 36% of the group revenue. When it comes to M and A, we've completed 6 acquisitions in 2018 in different countries to strengthen our footprint. They represent around €85,000,000 of annualized revenue and support 3 out of the 5 growth initiatives. In 2019, we have already started the year adding around €30,000,000 of annualized revenue with 2 enhancements in support of Agri Food and B and I Growth Initiatives. 1st, BVAQ in Singapore, a joint venture created with a New Zealand company to provide food testing services and second, Capital Energy, a company providing consulting and support services for energy efficiency project in France. Now a few points on the 2018 results. Adjusted margin stand at 15.8percent16.1 organically, up 20 basis points. Adjusted EPS is up 0.4% year on year and 15.3% at constant currency. Free cash flow is up 45.8% at constant currency. I'll come back to the detail of cash flow in a minute. Moving to adjusted net debt. It is largely unchanged versus last year, except for a small FX impact. So turning to adjusted operating margin of 15.8%, it reflects both a 20 basis point organic improvement at 16.1% and a 30 basis point negative ForEx impact as expected. 4 out of our 6 business activities posted improving margins, adding 30 basis points to the Group organics margin. This was driven by a significant improvement in Certification and strong performances in both Consumer Product and Industry. This improvement is the result of a combination of operating leverage, strict cost management, lean efforts and restructuring payback. Agri Food and Commodities and Building and Infrastructure experienced lower margins due to price pressure and change of mix in these activities. Operating margin by business will be covered by Didier in the business review. So let's look at the operating profit on Slide 17, which is up 5.1 percent at €637,000,000 Our proactive cost management measures resulted in €42,000,000 of restructuring costs. These were mainly headcount reduction driven. Action were primarily taken in government services, building in service operation, commodities and marine and offshore in service activity. This restructuring was lower than last year and is marking the end of a period of material restructuring. For 2019, we would expect restructuring charges to be around half the amount of 2018. Under net financial expenses, we have first a decrease of financial charges, mainly due to lower average gross net, while average cost of debt is slightly down at 3%. 2nd, depreciation of several emerging country currencies reduces the ForEx impact from minus €12,000,000 to minus €5,700,000 Looking at the tax rate now, the adjusted effective tax rate of the group was up 150 basis points at 33.3. This increase is mainly explained by the exceptional item of 2017. The group benefited from the reform in 2017 of the 3% dividend contribution in France and benefited from the positive adjustment recognized in 2017 on deferred taxes as the result of the U. S. Tax reform. For the full year 2019, we expect our adjusted ETR to remain in the range of 33% to 34%. Moving now to the cash flow on Slide 20. There are several elements behind the significant improvement. First, the increase in profits before income tax, mainly driven by higher operating margin and less restructuring items 2nd, an improvement in working capital requirement led by a move for cash program and 3rd, favorable evolution on non cash items. As a result, operating cash flow is at €685,000,000 up 17.9 percent year on year. Net CapEx stand at 124 ,000,000 which represent 2.6 percent of the revenue. We expect this to be in the range of 3% for 2019. Lastly, the lower average gross debt enabled a decrease in interest paid. All in all, the free cash flow increased by 37% year on year and by 42% on an organic basis. I just want to say a few more words on the actions of our Move For Cash program that is beyond improvement in free cash flow. We deployed a network of 140 cash champions in both operation and finance across the group. We have formalized cash flows within the group, ensuring that best payment terms are set according to customer profile. It is supported by a tool dedicated to cash collection process. In 2019, we'll continue and reinforce our action on this domain. Finally, regarding our financial structure, the adjusted net debt stands at €2,100,000,000 largely unchanged from last year, with strong free cash flow generation of €478,000,000 has fully financed our acquisition and earn out program or dividend paid to shareholders and no share buybacks. In 2018, we undertook successfully 3 refinancing operation anticipating all of our 2019 debt maturities. We closed the year with a leverage ratio of 3 of 2.34, far below 3.25 bank covenant. The liquidity position at the end of 2018 was very strong with more than €1,000,000,000 in cash. To conclude, after the strong set of results in 2018, margin delivery and cash will remain on top of our priorities for 2019. And I now hand it back to Didier for the business review. Thank you, Francois. Thank you. Starting with Marine and Offshore. We are pleased that the long awaited recovery is now underway. New orders amounted to 6,100,000 gross tons at the end of December. 2018 compared to 5,100,000 a year ago, confirming the recovery of the market. Our order book progressed by 11% to €14,000,000 gross tons. For the full year, revenue was still slightly down, 0.9% organically. The recovery in new construction in the second half mainly driven by the equipment certification business in China was not quite enough to catch up the negative trends of the first half. A slight decline in core and service due to some price pressure and a stable fleet low single digit growth in offshore related activities driven by the rebound of risk assessment studies and the extension of services. Organically, the margin was up 10 basis points benefiting from restructuring measures. Even if total margin was down to 21.1% due to negative foreign exchange. Looking at 2019 perspectives. In the shipping market, which is recovering, we expect Marine and Offshore full year organic growth to be positive. This reflects a recovery in new construction notably led by China as shown on the slide. Our order book is very diversified by type of ships with bulk, cargo, tankers, passengers and cruise ships, LNG vessels, resilient in service activity, including the offshore related activities. Profitability wise, we expect margins to improve. For the Agri Food and Commodities business now, Revenue increased by 4.5% organically in full year and by 4.9% in Q4. By sub segments, Metals and Minerals confirmed its sound recovery, up 8.7% in organic growth. Upstream activities grew by 13.7% across all geographies. Trade achieved low single digit led by Europe and Africa. Agri Food. Agri Food grew by 4 0.4% organically, thanks to a strong food performance. The agri segment grew only slightly, affected notably by poor weather conditions and other external factors. Growth resumed in Q4 supported by contract wins and new services in Precision farming. Oil and Petrochemicals is up by 1.9% organically, reflecting robust performance in Europe and low in North America. In the U. S, the price pressure in traditional cargo inspection business is offset by strong performance for our strategic initiatives, marine fuels and oil condition monitoring. Lastly, Government Services achieved 4.1% organic revenue growth with an improvement in the second half with the ramp up of VOC and single window contracts. The margin was broadly stable on an organic basis. 2019 outlook. We expect similar organic revenue growth compared to 2018, fueled by solid metals and mineral markets, robust agri food businesses and improving government services. We also expect margin improvement led by restructuring and positive mix. Turning to industry. The business confirmed its recovery, up 3.5% organically with acceleration in Q4 at 6.2%. This results from our successful OpEx diversification together with improving oil and gas market conditions. Oil and gas CapEx related activities represent 15% of divisional revenue. It improved during the year with H2 up 3.6% after minus 15% in the first half. Oil and Gas OpEx was up mid single digit with strong volume increases partly offset by continuing price pressure. We achieved 17% organic growth in Power and Utilities OpEx with a ramp up of several contracts in Latin America. The margin. The margin gained 35 basis points organically thanks to restructuring actions and less negative mix effect of oil and gas CapEx decline. The outlook for 2019, we expect the business to achieve similar organic revenue growth versus 2018. Our strategy of OpEx Services diversification will continue to pay off. All uncas CapEx markets will improve skewed to H2. We expect a margin improvement led by restructuring benefit and positive mix. Further on Industry and specifically on Oil and Gas, two points to highlight. The first one, our OpEx business represents 60% of our revenue as a result of the success of our strategic OpEx growth initiative. Therefore, oil and gas CapEx is now less than 4% of group revenue compared to 10% at the peak in 2015. 2nd, we are geographically balanced. This recovery is at this stage driven by new small size CapEx project in North America. We are currently seeing signs of stabilization in Latin America and the tendering activity in Asia. In Building and Infrastructure, revenue increased by 4.3% organically with slightly stronger organic growth for OpEx Services. Organic growth performance was good in Europe, notably led by France. Here, OpEx related activities were strong as we gained market shares in the mass market and launched several growth initiatives. Solid growth in the United States, in particular for Code Compliance Services. The integration of EMG continued on track with several synergy opportunities underway. Finally, in Asia, the pace of growth was solid, driven by China, where our prospects remained strong in infrastructure projects and also by Australia, benefiting from the Mackenzie acquisition. The margin was slightly down primarily due to mix and price effects. For the full year 2019, the outlook for the business remains positive overall with strong growth in the U. S, solid in Asia and Latin America and resilient in France. Margin is expected to slightly improve. Investors have been asking a lot of questions about the dynamic of the French construction market. Thus, I would like to spend a moment on our French operations in Vienna. Bureau Veritas is in fact well diversified and balanced to various segments. We are very geared to OpEx related services, which represents 73% of our French revenue. Regulatory and service inspection with good visibility and high retention rates. Looking at the CapEx part of the business, we are very diversified by asset type with an exposure to the residential segment limited to 20% of the business. It means that the residential CapEx in France represents only 0 0.6% of group revenue. Our commercial exposure benefits from solid momentum. Moving to Certification. It was our top performance performing business in 2018, in 7.8% organic growth. We experienced high single digit growth in Europe, Asia and Latin America. Growth was primarily led by the revision of QHSE and transportation standards until Q3 2018. In the last quarter, organic revenue growth declined by 3.5%, reflecting the end of the 3 year standards revision period. We achieved double digit growth for Supply Chain, energy management, forestry, food management system and organic certification. Margin was strong, improving by 65 basis points to 17.7%. This reflects a strong organic increase, which mostly offsets the significant negative ForEx impact. The outlook for 2019 Certification business is expected to deliver a slightly negative organic revenue growth with the impact from the QHSE and transportation transition, which ended in September 2018 and of course creates challenging comparable for the 1st 9 months of the year. Solid growth elsewhere, primarily driven by food schemes, sustainability, training and customized audits. Profitability wise, we will focus on margin protection. Consumer Products recorded a 4.3% organic growth across all major service categories. Softlines delivered mid single digit growth. This was led by new contract wins in Europe and very strong momentum in Southeast Asia benefiting from the relocation of Chinese manufacturing activities. Hardlines achieved growth above divisional average, driven by China and strong momentum with key accounts. The electrical and electronics sub segment grew mid single digit, primarily driven by double digit growth mobile testing. In H2, we were slightly impacted in Electrical Products by the wait and see approach related to trade tariffs. Our margin improved by 25 basis points to a strong 24.9% as margin initiatives more than offset price pressure and mix evolution. We expect Consumer Products to maintain similar organic growth compared to 2018 with strong momentum in Southeast Asia, solid growth in Europe and resilient in the U. S. And China. We will focus on margin protection throughout 2019. The outlook now. For full year 2019, we expect the good momentum to continue with a solid organic revenue growth, a continued adjusted operating margin improvement at constant currency, a sustained strong cash flow generation. Also, we reaffirm our 2020 ambition. Regarding non financial ambitions, we have 3 that I would like to highlight. There are key commitments at the group level. Health and safety. Safety is an absolute for Bureau Veritas. By 2020, we aim to reduce accident rates by 50% at least. So far, we reduced our LTR by 51% since 2014. 2nd inclusion is a key ambition as well. We aim to achieve at least 25% female representation in the group's executive management team coming from 9% in 2015. We are now at 17%. And 3rd, concerning environment, we are targeting a reduction in CO2 emissions by 10% per full time equivalent employee. To conclude, we have delivered a strong set of results for 2018, completely in line with our commitments at the beginning of the year. The group's transformation is fully engaged with the new business profile and geographical footprint in place with the obsession to be even more resilient. The momentum will continue in 2019, ensuring that our 2020 ambition is achieved. Thank you for your attention. This concludes our presentation. Francois and I are now pleased to answer any question on the call. The first question comes from the line of Paul Sullivan from Barclays. Please go ahead. Yes, good afternoon, everybody. Firstly, just in terms of the organic growth guidance, do you have enough confidence to point to an acceleration in growth in 2019 versus 2018? And could you quantify the restructuring uplift that you would expect to margins for this year? And then also sort of tied to that, in terms of the FX impact, when you look at sort of movement to date, how do you see that impacting revenues and margins? Thank you. Yes. So thank you, Paul, for your question. Regarding, first, the organic growth, we are confident that we will keep the good momentum and we expect to continue at the same level in 2019 and we reaffirm our guidance of solid organic growth. Regarding restructuring and the impact on the margin, Francois? Question was on FX, I believe. There was one on FX and one on the potential impact of the restructuring. But FX first, if you want. FX first, it's always the most difficult one. We operate in 140 countries. We have close to 90 trading currencies. So we are very careful. Now to give you some kind of flavor, we expect the FX impact in 2019 to be more neutral than what we have suffered for the last 2 years. Obviously, it's subject to a lot of elements which are not in our control. What we see so far by the end of February is a more neutral impact on FX. Coming to your 3rd point on restructuring. As mentioned in the presentation, we have gone through now 3 years of heavy restructuring. The figure is as good as me. It was more than €50,000,000 in 2017, €42,000,000 in 2018. We will significantly reduce this number in 2019. However, we expect in most of our businesses to see in 2019 the impact, the positive impact about the work done over the last 2 years in terms of operating profit. Well, I mean, put it another way, would you be disappointed if the organic margin uplift was less than in 2018, I. E. Less than 20 basis points? I think we guide on a continuous momentum compared to what we have achieved in 2018. So I would say your guess is not too far off. Our ultimate goal, as you know, is to reach by the end of 2020, 17% at 2015 exchange rate, which means at current currency 16.4%. Okay. Very clear. Thank you. 50 basis points in 2 years to reach. And we are confident, Paul, that we could achieve this 16.4% at the end of 2020. Great. And just very quickly on the follow-up on the dividend. The scrip dividend you put in place for this year, do you think that's going to be an is that a one off? Or is that going to repeat next year? It's a good question, it's a board decision, as you know. So we've decided for this year, we'll see next year and discuss it for next year. Okay. Cool. Thank you very much. My pleasure. Okay. So the next question comes from the line of Edwin Stanley from Morgan Stanley. A couple, please. Following on from that restructuring point, there seems to be or it's a large step down next year, but H2 seemed to step up on H1. So for 2019, do you expect it to be sort of a bigger second half step down in the restructuring? Or is it likely to fade off pretty quickly in Q1 in H1, sorry? And then secondly, on the CapEx point, the CapEx seems to be coming down pretty steadily. I wonder whether that will begin to take back up to the sort of normalized percentage of sales in due course. I'm going to answer for the CapEx side and Francois, you will take the question about the restructuring. So the CapEx is expected in the range of 3% of revenue for 2019. And I must say that I'm very happy with the way we manage the CapEx and the investment in particular in lab on digitalization. Today, I must say that we have clearly a good discipline in managing these investments. Just to be sure and Francois is very vigilant on this point that we get the payback, the payback which could be of course, in term of margin and OP, but also in term of sales and revenue. Regarding the restructuring, Francois, would you? Yes, I'm taking this. So to give some flavor, I confirm we'll get overall an ambition to reduce restructuring effort to half of what we've done this year. The basic reason is what has been done in the past doesn't need to be redone now. We will try as much as possible to get those plan in motion as early as possible in the year. However, these are sensitive topics with a number of constraints. So if we had all labor in our hands, we would have done everything in January. You know for sure it will not happen. But we were pretty much convinced that the sooner, the better. Okay. So the next question comes from the line of Tom Sykes from Deutsche Bank. Please go ahead. Yes. Afternoon, everybody. Firstly, just on the cash generation and just your language on where you say sustainable strong cash flow. What are your expectations for further conversion improvement? And does the working capital improvement include any benefit from reducing the working capital in China yet? Or is that something that you still would see as a potential benefit to the working capital line? And then I suppose just following on from Ed's question just on the CapEx. You are CapExing at depreciation, but you're asking us to believe in accelerated organic growth and margin improvement. And so why should we believe that the 3% is sustainable, let's say, over the next 2 to 3 years? I mean, if you have spare capacity this year, you have spare capacity this year. But why should we remain at such a low level and believe you can win margin accretive business, please? I'm going to take the second question and of course Francois will answer your question about the cash generation. So regarding the second question, first, we are talking about next year, not the year after about CapEx and it's 3% for 2019. What is probably very important for you to understand after this very important transformation that we've engaged for the group is that we are much more exposed today to inspection than we are for laboratories. I am sure you know that. And by moving, for instance, to building an infrastructure and growing this business, moving to which is becoming now the biggest business of BB at 27% And moving to OpEx, Oil and Gas and Power and Utilities, we don't need so much CapEx. So in terms of percentage, in fact, the revenue is growing clearly, but CapEx that we need for new green building is not as much. And 3% of grower revenue, of course, of a bigger revenue is bigger. So Francois, you would like to answer the question, which is a very good one, about cash generation. Yes. Thank you for your question. I'll try to sum it up in saying, are we happy with the 2018 performance? Yes. Do we believe we've done all the work? No. You had the question on China. This is one of the moving parts. There have been a lot of effort there. So when we see in the 2018 figures some parts of the improvement coming from China, but by far the work is not over. We have engaged into a journey. It takes some time for a company operating in 140 countries to get an improvement and sustainable improvement in working capital. So as mentioned, we have focused on faster invoicing, on better payment term. We have now incentivized most of the management up to 30% of the variable remuneration onto operating cash flow figures. However, as mentioned a couple times, my goal is that we should be able ultimately to bring the level of working capital down to 8% of the revenue. Right now, you see we're at 9%. So I'll let you compute the difference. That's what that's the work we have ahead of us. Okay. And just with regards any timing differences in the second half of the year, is there anything one off at all in the working capital movement or materially one off in the working capital movement for H2 2018, which means we can't take that as a base for the cash the free cash generation going into 2019? I mean, I take your question as a knowledgeable that the performance is surprisingly good. To be very clear with you, there is not a single one off. We haven't done any factoring whatsoever. So no one off on AR, no one off on EP. This is good hard work, plain. This is a good consequence of you remember we discussed it before. We launched this initiative Move For Cash. Now it's probably 2 years ago. And the fact that Francois is on board and did very well managing finance for Europe, it was clearly a benchmark for the company. We have really accelerated this move for cash initiative and it has just paid off this year and will pay off in 20 I mean in 2018 and will pay off in 2019, of course. Okay. Great. Thank you very much indeed. Okay. So the next question comes from the line of George Gregory from Exane. Please go ahead. Afternoon, gentlemen. I will ask 2, please. Firstly, just on the cash flow, please, Francois. The positive noncash items, I just wondered, should we expect that to reverse in 2019 as perhaps you utilize restructuring provisions you created in this year or maybe there's another effect in there? And secondly, Didier, you gave us some useful color at the Q3 on your consumer business in China. I wondered if you could perhaps provide us with an update in terms of what you've seen since then, please? Thanks. Okay, Georges. If I may, Francois, I'm going to start with the second question from Georges. Yes, so as you could see, our Q4 was better than our Q3. Clearly, there was a position from our clients, mostly the one which are involved with electrical in Q3, which was a wait and see position, which disappeared in Q4. What is important to notice is clearly the fact that the soft lines are still doing very well because some manufacturing sites are now in Southeast Asia. And as you know, we have a very good footprint in Southeast Asia. The mobile testing was very strong still, so there is no slowdown, the opposite. In fact, it did very, very well. And I must say also the fact that our clients want to be sure that the quality is going to be at least the same than what it was before we discussed or tariff were discussed, so which probably also gave us at least as much business as we had in the past. Cosmetics, for instance, are performing very well in Q4. So you can see that, in fact, in Q3, we had this slowdown or a little bit of slowdown in electrics because of this white and see position. It disappeared in Q4, in fact. So it's the reason why we are optimistic to keep the same momentum in 2019 regarding Consumer Product division. Francois, the first question was? Yes. It was on the line provision in the free cash flow table. Well, thank you for the question. So you're right to some extent. There is a little chunk of this, which is coming from late restructuring program, which have been enforced at the end of the year, so building up a provision and which will reverse in Q1, H1 2019 in terms of cash. But by far, the biggest, biggest chunk of it is an increase in unrealized foreign exchange income on non operating items. So rest assured, the Investor Relations team is at your full disposal to give you all the details about this line. It's a little bit technical. I'm not sure it's at the level of the call today. But it's to make it simple, it's ForEx on non operating item, mainly financial driven. And the detail will be provided to you of this call. Thank you, Francois. Thank you. Okay. You can continue the 2 for me, please. Firstly, Francois, again, on the cash flow. Clearly, you came in as CFO in September. So just interested to hear more about the timing of when some of these efforts were implemented. For example, when did you summon these 140 cash champions to fight your working capital war? Or when did you change the incentives for management? And then secondly, I wanted to ask about the margin specifically in Certification. I think it was a bit stronger than what I had expected through H2 of last year. But given you talk about margin protection, are you confident you can sustain that to that quite high level into next year despite the current kind of run rate of organic revenue declines? Thank you. Okay. So Francois, both of these questions are for you, please. Thank you, Didier. Rory, so starting with the cash one. So as you know, Move For Cash has been started in November 2017, I believe. I mean, I made my part of the effort in Europe before being appointed in early September. I would say what has changed is not so much the team. I mean, the 140 guys that were here, what has changed is the drive and the momentum. What has changed is the fact that these 140 guys that are now summoned very often and all the management line from the Board down to the business unit manager have understood that this is critical. And then And we improved, as we said before Francois, sorry to interrupt, the incentive, of course, by giving 30% of the bonus. And of course, people pay more attention on the cash. This is for sure. So we entered into you. No. And the last point is what is, I think, to be seen as positive and is that we focus much more on the first initial step, which is invoicing faster, as simple as it is. And this is very powerful because it is a message that everybody understand, that everybody can roll out, that everybody can execute and this is paying off day 1. So I would say there is no special effect of me coming in. It would be very unamble from my It's been started much earlier. But I think we have accelerated the drive around this initiative throughout the group. And it's not a small job, as you know. We're in 140 countries. So I'll let you imagine the energy you need to put in this. Coming to your second question, margin of Certification. Certification is by a sense a very, very resilient business. Our cost structure in Certification is extremely flexible, meaning that a large chunk of our services are rendered through networks of subcontractors. So by that, when I mean, the times are good, you get good margin. When the times are bad, you stop subcontracting and you protect your margin. So it will be even and you're right to point this out, it's a point of attention for 2019. We know we'll embark into a slightly negative growth ambition, so to speak, for Certification due to extremely tough comparable. It's a point of attention, but I'm fully confident that we can remain with this best in class margin at 17%. Okay. So the next question comes from the line of Rajesh Kumar from HSBC. Please go ahead. Good evening, gents. Just a couple from me. Following up on the working capital cash generation, obviously, it was very good and that is why so many questions. Your cash balance is quite high. It's over EUR 1,000,000,000. Is that something you're planning to taper down through the year? Or should we expect a high level of gross cash balance through 2019? I mean, the other way you could answer that is, was there any difference in average net debt versus the period end net debt? That could take us to the answer. And the second question would be on the Consumer business. Is there a risk that because some of the customers and suppliers in the U. S. Were worried about tariff wars. You saw a bit of acceleration in trade in Q4, which might create difficult comps next year. Okay. So on the CPS business, it's very stable. And I do not feel with the information I have today and have quite detailed information about the Consumer Product division that there was specific action taken by our client. As you know, we are talking with our clients very regularly and have the same contacts with the management team of the Consumer Product division. And I couldn't see clearly our clients accelerating or that was not the impact in Q4. Clearly, an impact is coming from the fact that we have expanding our presence in Southeast Asia, which is now becoming a significant part of our business. And some clients have already decided to move their production from China to Southeast Asia. And of course, our labs in Southeast Asia are ramping up and it's giving us the opportunity to deliver such a good organic growth. The first question, Francois, is for you about this EUR 1,000,000,000 cash that we have in our Yes. Thank you. So very easily, the EUR 1,000,000,000 cash is coming, as you may remember, for half of it, so EUR 500,000,000 from an opportunity we took in October last year to fully refinance in average all of our 2019 debts. So all the repayments, if you refer to Slide 22, all our repayments, which are due for 2019, are already refinanced at an average cost of 3%. And we've been refinanced with a maturity of 7 years. So that explained, I would say, half of the €1,000,000,000 But in essence, we were managing our debts with a view to, let's say, usually get refinance in advance, not to have it as an issue at all on our radar. We have the chance to be able to say it's very good market opportunities, attract very interested investors. We've refinanced in basically in 3 hours, the €500,000,000 we wanted to. So we will continue on this path forward for next year. Thank you very much. Our pleasure, Rakesh. Okay. So the next question comes from the line of Ed Steele from Citi. Please go ahead. Good afternoon all. It's Ed here from Citi. Two questions, please. First of all, what's the thinking behind offering a scrip dividend? And what's your view of why Wendel have chosen that route to get their payout, please? And secondly, in the Consumer division, in the outlook, you talk about a focus on margin protection. What are the key pressures against which you are looking to protect yourself? And which of those are becoming more intense, please? Okay. Thank you for your questions. So the first point is very clear. I mean, Wendell has decided to support our strategy. And of course, by taking your opportunity of getting the dividends in shares, it gives more financial flexibility to Bureau Veritas for investment in particular for merger and acquisition. So it's helping Bureau Veritas to leverage and let's be transparent on that one. And of course, it gives us more firepower to invest, as I said, mostly in merger and acquisition and sustain our strategy. Your point about margin protection, it's mostly influenced by the fact that the mix is still evolving. And as you know, the Electronics part, in particular, from thinking about IoT and Mobile Product Testing had or still has a margin which is quite a little bit below the margin of the average margin of CPS. And the toys business, which had very high margin, is mature. The good news, as you could see, that we improved our margin again in 2018, And we will and we are working on protecting this margin in 2019. That's very clear. Thank you very much. If I could just follow-up on the first answer. Is the messaging then that you see a pretty buoyant pipeline for midsize acquisition opportunities, please? As you know, we have a good pipeline. We have bolt on mostly bolt on acquisitions. But since 2015, I decided to put a strict financial discipline. And I can tell you with Francois, it's even better. So meaning that I'm extremely happy with the acquisitions I have made in the last 3 years. I want to continue in that direction. We have a good pipeline. But again, the good news that we will get more firepower that we will use, but we will use it as long as we find very selected acquisitions. Thank you very much. Understood. Okay. Okay. We do not have any more questions. I'll hand over back to your host. Okay. So I would like to thank you for your attention, and I wish you good morning, good afternoon and good evening.