Good afternoon and good evening to everyone. Thank you for joining Bureau Veritas full year 2018 results on the webcast and on the call. François Chabas, 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. We continued to improve financial performance. Indeed, we achieved all the objectives that we set at the start of the year. Bureau Veritas 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% by EUR 130 million to nearly EUR 480 million.
I will leave François to go into the detail of the financials, a couple more comments. Group revenue grew by 7% year-on-year at constant currency, our adjusted operating profit is up 8.4% at constant currency. Regarding the dividend, we will propose to shareholders a dividend of EUR 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 four key areas. A strengthened 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 five 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.
Fourth, 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 Qatargas OPEX contract. Regarding our digital transformation, we have now deployed globally solutions to all end markets. It is supported by successful and 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. 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 & Commodities business, which is volume driven with notably healthy prospects in food and Consumer Product 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, new ships. All these markets are today recovering. I will come back with comments on each of our businesses, first, François, will you walk us through the excellent financial performance, François?
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 EUR 4.8 billion, up 2.3%. Organic growth reached 4%, compared with 2.2% in 2017. Acquisition contributed 3% to group growth on a net basis. Finally, Forex had a significant negative impact of 4.7%, which is mainly attributed to the appreciation of the euro against the USD and pegged currency, as well as emerging countries' currency. In Q4, however, we saw a slight easing negative impact still at -2%. Turning to the revenue growth by business, we delivered 4% organic growth with certification, obviously outperforming their average at 7.8%.
Three businesses within the 4%-5% growth range, Agri-Food & Commodities up 4.5%, Building & Infrastructure and Consumer Product both up 4.3%, and Industry accelerating throughout the year to reach 3.5%. It is the first year of organic growth since 2014 for Industry. Only Marine & 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. Best performers were Marine & 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 three-year standards revision period. 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 initiative have continued to perform steadily, up 6.3% organically, with high single-digit growth achieved in OpEx services, B&I and Smartworld, 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&A, we've completed six acquisition in 2018 in different countries to strengthen our footprint. They represent around EUR 85 million of annualized revenue and support three out of the five growth initiatives. In 2019, we have already started the year adding around EUR 30 million of annualized revenue with two announcements in support of Agri-Food and B&I growth initiatives. First, BVAQ in Singapore, a joint venture created with AsureQuality, a New Zealand company, to provide food testing services.
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 margins stand at 15.8% and 16.1% organically, up 20 basis points. Adjusted EPS is up EUR 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. 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. Four out of our six business activities posted improving margins, adding 30 basis point 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 & Commodities and Building & 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. Let's look at the operating profit on slide 17, which is up 5.1% at €637 million, where proactive cost management measures resulted in €42 million of restructuring costs. These were mainly headcount reduction driven. Action were primarily taken in government services, building and service operation, commodities, and Marine & 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 our average cost of debt is slightly down at 3%. Second, depreciation of several emerging country currencies reduces the Forex impact from -€12 million to -€5.7 million. Looking at the tax rate now, the adjusted effective tax rate of the group was up 150 basis point 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%-34%.
Moving now to the cash flow on slide 20. There are several elements behind the significant improvement. First, the increase in profit before income tax, mainly driven by higher operating margin and less restructuring items. Second, an improvement in working capital requirement led by our Move For Cash program. Third, favorable evolution on non-cash items. As a result, operating cash flow is at €685 million, up 17.9% year-on-year. Net CapEx stand at €124 million, which represent 2.6% of the revenue. We expect this to be in the range of 3% for 2019. Lastly, the lower average gross debt enable 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 behind the 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 €2.1 billion, largely unchanged from last year, with strong free cash flow generation of €478 million, has fully financed our acquisition in our program, our dividend paid to shareholders, and our share buybacks. In 2018, we undertook successfully three refinancing operation, anticipating all of our 2019 debt maturities. We closed the year with a leverage ratio of 2.34, far below our 3.25 bank covenant. The liquidity position at the end of 2018 was very strong, with more than €1 billion in cash.
To conclude, after this strong set of results in 2018, margin delivery and cash will remain on top of our priorities for 2019. I now hand it back to Didier for the business review.
Thank you, François. Thank you. Starting with Marine & Offshore, we are pleased that the long-awaited recovery is now underway. New orders amounted to 6.1 million gross tons at the end of December 2018 compared to 5.1 million a year ago, confirming the recovery of the market. Our order book progressed by 11% to 14 million gross tons. For the full year, our 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 current 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 a shipping market which is recovering, we expect Marine & 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 & Commodities business now. Revenue increased by 4.5% organically in full year and by 4.9% in Q4. By sub-segments, metals and minerals confirm 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 4.4% 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 a 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 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 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. Oil and gas 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. First, 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. Second, we are geographically balanced. This recovery is at this stage driven by new small-sized CapEx project in North America. We are currently seeing signs of stabilization in Latin America and the turning 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 prospects remain 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.
I would like to spend a moment on our French operations in B&I. 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 0.6% of group revenue. Our commercial exposure benefits from solid momentum. Moving to certification, it was our top-performing business in 2018, posting 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 three-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 FX 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. Of course, creates challenging comparable for the first nine 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. Soft lines 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. Hard lines achieved growth above divisional average, driven by China and strong momentum with key accounts. The electrical and electronic sub-segment grew mid-single digit, primarily driven by double-digit growth in automotive and high single-digit growth in 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 Product 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. We reaffirm our 2020 ambition. Regarding non-financial ambitions, we have three that I would like to highlight. They 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. We reduced our LTR by 51% since 2014. Second, 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%. Third, 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. François and I are now pleased to answer any question on the call.
If you'd like to ask a question, please press star one on your telephone keypad, ensure your line remains unmuted locally. I'll then prompt you when to ask your question. The first question comes from the line of Paul Sullivan from Barclays. Please go ahead.
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? Could you quantify the restructuring uplift that you would expect to margins for this year? Also, tied to that, in terms of the FX impact, when you look at movement to date, how do you see that impacting revenues and margins? Thank you.
Thank you, Paul, for your question. Regarding first the organic growth, we are confident that we will keep the good momentum. We expect to continue at the same level in 2019. We affirm our guidance of solid organic growth. Regarding the restructuring and the impact on the margin, François?
Question was on FX, I believe.
There was one on FX and one on the potential impact of the restructuring. 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. 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 two 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 third point on restructuring, as mentioned in the presentation, we have gone through now three years of heavy restructuring. You know the figures as good as me. It was more than EUR 50 million in 2017, EUR 42 million in 2018. We will significantly reduce this number in 2019.
We expect in most of our businesses to see in 2019, the positive impact about the work done over the last two years in terms of operating profit.
Well, let me 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. 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, perfect. Thank you.
50 basis point in two years to reach.
We are confident, Paul, that we could achieve this 16.4% at the end of 2020.
Great. Just very quickly, one follow-up on the dividend. The scrip dividend you put in place for this year, 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. 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, the next question comes from the line of Ed Stanley from Morgan Stanley. Please go ahead.
Yeah. Hi, guys. A couple, please. Following on from that restructuring point, there seems to be, or you've put it to a large step down next year, but H2 seemed to step up on H1. 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 H1? Secondly, on the CapEx point, the CapEx seems to be coming down pretty steadily. I wonder whether that will begin to tick back up to the sort of normalized percentage of sales in due course.
I'm going to answer for the CapEx side, François, you will take the question about the restructuring. The CapEx is expected in the range of 3% of revenue for 2019. 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, François is very vigilant on this point, that we get the payback which could be, of course, in term of margin and OP, but also in term of sales and revenue. Regarding the restructuring, François, would you-
Yeah, I'm taking this
be happy to answer quickly?
To give some flavor, I confirm we 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. You know these are sensitive topics, with a number of constraints. If we had all levers in our hands, we would have done everything in January. You know for sure it will not happen. We were pretty much convinced that the sooner the better.
Thank you.
Okay, the next question comes from the line of Tom Sykes from Deutsche Bank. Please go ahead.
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? Does the working capital improvement include any benefit from reducing the working capital in China yet? Is that something that you still would see as a potential benefit to the working capital line? 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. Why should we believe that the 3% is sustainable, let's say over the next two to three years? If you have spare capacity this year, but why should we remain at such a low level and believe you can win margin-accretive business business, please?
I'm going to take the second question, and of course, François will answer your question about the cash generation. Regarding the second question, first, we are talking about next year, not the years 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. By moving, for instance, to building an infrastructure and growing this business, moving to which is becoming now the biggest business of BV at 27%, and moving to OpEx, oil and gas and power and utilities, we don't need so much CapEx.
In terms of percentage, in fact, the revenue is growing, clearly, but the CapEx that we need for new green building is not as much. 3% of grow our revenue, of course, of a bigger revenue is bigger. François, you would like to answer the question, which is a very good one about cash generation.
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. When we see in the 2018 figures, some parts of the improvement coming from China, but by far, the work is not over. We've 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. As mentioned, we have focused on faster invoicing, on better payment terms. 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 of 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 nine. I'll let you compute the difference. That the work we have ahead of us.
Okay, thank you. 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 free cash generation going into 2019?
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. No one-off on AR, no one-off on AP. 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. It's probably two years ago. The fact that François 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. It has just paid off this year and will pay off in 2018, and will pay off in 2019, of course.
Okay, great. Thank you very much indeed.
Please go on.
Okay, the next question comes from the line of George Gregory from Exane. Please go ahead.
Afternoon, gentlemen. I will ask two, please. Firstly, just on the cash flow, please, François. The positive non-cash 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. 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, George. If I may, François, may I start with the second question from George? 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 very good footprint in Southeast Asia. The mobile testing was very strong still, no slowdown. The opposite, in fact, it did very well. 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 our tariff were discussed.
Which probably also gave us at least or as much business as we had in the past. Cosmetics, for instance, are performing very well in Q4. You can see that, in fact, in Q3, we had this little bit of slowdown in electrical because of this wait-and-see position. It disappeared in Q4, in fact. It's the reason why we are optimistic to keep the same momentum in 2019 regarding Consumer Product division. François, the first question was?
It was on line provision in the free cash flow table. Well, thank you for the question. 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. By far, the biggest chunk of it is an increase in unrealized foreign exchange income on non-operating items. Rest assured, the investor relation 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 to make it simple, it's Forex on non-operating item, mainly financial driven. The detail will be provided to you off this call.
Thank you, François. Thank you.
Conversation with you, Laurent.
Okay. You will continue the conversation with Laurent, please.
He's already standing ready.
Okay. The next question comes from the line of Rory McKenzie from UBS. Please go ahead.
Afternoon, everyone. Two for me, please. Firstly, François, again, on the cash flow. Clearly you came in as CFO in September, 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? When did you change the incentives for management? Secondly, I wanted to ask about the margin specifically in certification. I think it was a bit stronger than at least I'd expected through H2 of last year. 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. François, both of these questions are for you, please.
Thank you, Didier. Rory, starting with the cash one. As you know, Move For Cash has been starting in November 2017, I believe. 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. 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 are now summoned very often, all the management line, from the board down to the business unit manager, have understood that this is critical.
We improved, as we said before, François, sorry to interrupt, the incentive, of course, by giving 30% of the bonus.
Correct.
Of course, people pay more attention on the cash, this is for sure. Sorry, I interrupted you.
The last point, what is, I think, to be seen as positive, is that we focus much more on the first initial step, which is invoicing faster. As simple as it is. This is very powerful because this is a message that everybody understand, that everybody can roll out, that everybody can execute, and this is paying off day one. I would say, there is no special effect of me coming in. It would be very unhumble from my side. It's been starting much earlier. I think we have accelerated the drive around this initiative throughout the group. It's not a small job, as you know. We're in 140 countries, so I let you imagine the energy you need to put in this. Coming to your second question, margin of certification. Certification is by essence, a 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. By that, when the times are good, you get good margin. When the times are bad, you stop subcontracting and you protect your margin. It will be, 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, great. Thank you very much.
Thank you, Rory.
Okay, 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 is over EUR 1 billion. Is that something you are planning to taper down through the year, or should we expect a high level of gross cash balance through 2019? 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? 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, on the CPS business, it is very stable and, I do not feel with the information I have today, and I 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 I have the same contact with the management team of the Consumer Product Division. I could not see clearly our clients accelerating, that was not the impact in Q4. Clearly, an impact is coming from the fact that we are expanding our presence in Southeast Asia, which is now becoming a significant part of our business. Some clients have already decided to move their production from China to Southeast Asia. Of course, our labs in Southeast Asia are ramping up, and it is giving us the opportunity to deliver such good organic growth.
The first question, François, is for you about this EUR 1 billion cash.
Yes, thank you. Very easily, the EUR 1 billion cash is coming, as you may remember, for half of it, EUR 500 million, from an opportunity we took in October last year to fully refinance, in average, all of our 2019 debts. 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 it's been refinanced with a maturity of seven years. That explains, I would say, half of the EUR 1 billion. In essence, we are managing our debts with a view to, let's say, usually get refinanced 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 basically in three hours, the half a billion EUR we wanted to. We will continue on this path for next year.
Thank you very much.
You are welcome.
Thank you.
The next question comes from the line of Ed Still 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? What's your view of why Wendel have chosen that route to get their payout, please? 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? Which of those are becoming more intense, please?
Okay. Thank you for your question. The first point is very clear. Wendel has decided to support our strategy, and of course, by taking the opportunity of getting the dividends in shares, it gives more financial flexibility to Bureau Veritas for investment, in particular for merger and acquisition. It's helping Bureau Veritas to deliver, and let's be transparent on that one. 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. As you know, the electronics part in particular, I'm thinking about IoT and mobile product testing, had or still has a margin which is quite a little bit below the average margin of CPS. 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 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.
Yes.
Is the messaging that you see a pretty buoyant pipeline for midsize acquisition opportunities, please?
As you know, we have a good pipeline. We have mostly bolt-on acquisitions. Since 2015, I decided to put a strict financial discipline, and I can tell you with François, it's even better. Meaning that I'm extremely happy with the acquisitions I've made in the last three years. I want to continue in that direction. We have a good pipeline, 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.
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