Good morning, good afternoon, and good evening to everyone. Thank you for joining Bureau Veritas H1 2018 results call. Nicolas Tissot, our CFO, is here with me to present the financial review. Let's move to page five. I'm going to go through a few key highlights for H1 2018. Our OPEX services business signed its largest ever contract with Qatargas. In digital, we accelerated our collaborative BIM initiatives by partnering with Autodesk. On the M&A side, we successfully completed a number of acquisitions, on track with our 2020 plan, and we further strengthened our group's organization. For the first half, we achieved a robust set of numbers. This confirms the acceleration of our organic growth compared to last year. Our five growth initiatives continue to deliver strong growth. Revenue for the quarter was EUR 2.34 billion, up 6.1% at constant currency, with organic growth at 3.5%.
On the M&A side, acquisitions continued to support our growth, adding 2.6%. As anticipated, the currency impact was negative 7%. Adjusted operating review increased by 20 basis points at constant currency, in line with our full-year guidance. Adjusted net profit was up 12.9% at constant currency. Free cash flow improved. Our full year 2018 outlook is confirmed. Our transformation plan continues on track. Move to page six. Since the start of 2018, we have added around EUR 85 million of annualized revenue with six acquisitions, all supporting our growth initiatives. More recent M&A has been oriented towards the Agri-Food space in order to complete our footprint, notably in Asia. Early July, we made the acquisition of Permulab in Malaysia, a leader player in food, water, and environmental testing services.
This means that we are fully on track with our 2020 plan, with nearly 50% of our external growth ambition already achieved. Page seven. A few words now on the large Qatargas contract, which we are very pleased to have been awarded. Qatargas is the world's largest LNG producer. We are now their primary supplier for inspection, NDT, and asset management services for all their assets in Qatar. The estimated total value of the contract is EUR 64 million over a fixed term of five years, with a two-year extension option. This contract illustrates the success of our OPEX strategy growth initiative. It has been awarded as a result of the newly developed integrated solution approach. The aim is to replicate this across Bureau Veritas globally. Page eight. In H1, we made further significant steps in the rollout of our digital strategy for buildings and infrastructure.
Building information modeling is now a prerequisite to winning most B&I tenders. As China is the most mature ongoing market for collaborative BIM, we have chosen to set up our BIM center of expertise in Shanghai. To support the deployment of this strategy, we are pleased to announce the global partnership with Autodesk, leader in 3D software. Its tools enable automated verification from the earlier stages of building project design. As an illustration, page nine, of how BIM is critical for our B&I project management. We are currently working on the Shanghai Planetarium, where we provide technical and management services for the whole life cycle of the asset. The benefits are numerous, quicker, safer, and cheaper for the customer. For instance, it enables a 70% reduction in design changes to be resolved by the BIM technology. Now, I'm going to hand over to Nicolas. Nicolas for the financial review.
Thank you, Didier. Starting with the revenue bridge for H1 on slide 11. Organic growth reached 3.5%. Acquisitions had a 2.6% contribution to top-line growth, net of a negative impact of 0.3% following the 2017 divestment of non-strategic entity activities in Europe. Forex had a negative impact of 7%. This is due to the appreciation of the euro against the USD and basket of currencies, as well as the depreciation of several emerging country currencies. For the full year, we still expect our client to be negatively impacted by around 4%, and adjusted operating profit by around 6%. The recent strengthening of the USD versus euro to the 1.15, 1.20 level is offset by the weakening of many emerging countries' currencies. All in all, revenue growth accelerated to 6.1% at constant currency. In Q2 2018, on slide 12, organic growth accelerated to 4.4%.
Acquisitions had a 3% contribution to top-line growth. Forex had a more limited 6.1% negative impact. All in all, revenue growth moved up to 7.4% at constant currency. Turning to growth by business on slide 13. The first point is that five out of six businesses representing 93% of the group's revenue, reached a solid pace of organic growth of 4.3% on average. Three businesses grew mid-single digit and Industry confirmed its return to positive organic growth. Certification recorded double-digit growth thanks to the ongoing standards revision impact. As expected, only Marine & Offshore is still suffering from the past market downturn. Secondly, B&I achieved double-digit growth at constant currency, boosted by a strong contribution of recent acquisitions, including EMG in the U.S. since February 2018. Moving to slide 14, in H1 2018, growth was fueled by both the base business and the five growth initiatives.
The base business is up 2% organically year-on-year with an acceleration to 3.1% in Q2. Most of the activities performed well, with the exception of Marine & Offshore and oil and gas CapEx related activities. Excluding these, the base business grew organically at 4% in H1. Our growth initiatives continued to deliver up 6.6% organically and 7% in Q2. Looking further at the five growth initiatives on slide 15, B&I performed strongly, up 9.7%. After a slow start, OPEX grew 4.2% with an improvement in Q2. Agri-Food grew 3.2% with strong performance in food, while Agri was impacted by volatile market conditions. Automotive recorded 7.2%, led by connectivity testing. Smartworld achieved double-digit growth. The contribution from acquisition was strong as all our M&A efforts are focused on the growth initiatives. Overall, our total growth continues as planned, up 15.5% at constant currency.
A few key points regarding these robust H1 results on slide 16. An adjusted operating margin of 14.9%, up 20 basis points at constant currency. Adjusted EPS up 2.3% year-on-year and 13.1% at constant currency. Free cash flows stood at EUR 62.9 million, up 182% at constant currency year-on-year. This is from low levels last year, and I'll go further into the details later in the presentation. Adjusted net debt is up 8.5%, mainly due to higher acquisitions versus last year. Turning to adjusted operating margin of 14.9% in H1 2018 on slide 17. It reflects a 10 basis points organic improvement to 15.3%, a 10 basis points accretive impact of acquisitions, so margin at constant currency is up 20 basis points. At 50 basis points negative Forex impact on a full year basis, we still expect Forex to impact negatively our margin by around 30 basis points.
Two-thirds of the portfolio have stable or improving margins, adding 40 basis points to group organic margin. This is led by a significant improvement in certification and by a high margin in consumer product. This improvement is the result of a combination of operating leverage, strict cost management, lean efforts, and restructuring payback. A third of the portfolio has a minus 30 basis points impact on the group's organic margin, with minus 10 basis points coming from Marine & Offshore due to lower volume of activity, notably for new construction and offshore services, minus 20 basis points resulting from negative mix and price effects in Buildings & Infrastructure. Looking at the operating profit bridge on slide 18, our half-year operating profit is slightly up compared to last year at EUR 291 million.
Restructuring costs of EUR 19.5 million were significantly lower than last year, allowed the continuation of our proactive cost management and efficiency improvements. Actions were taken in government services, buildings in-service operations in France, Marine & Offshore in-service activity and Commodities. This restructuring will continue to support our margin. Under net financial expenses on slide 19, we have first a decrease of financial charges due to lower average gross debt, while our average cost of debt is stable year-on-year at 3.2%. Secondly, the depreciation of several emerging country currencies reduces the ForEx impact from minus EUR 10.9 million to minus EUR 2 million. Moving to tax rate on slide 20. The adjusted effective tax rate of the group was down 110 basis points at 32.8%, mainly resulting from the absence of the 3% dividend contribution in France after this was canceled in 2017.
For the full year of 2018, we still expect our adjusted ETR to be in the 33%-34% range. The tax rate should be higher in H2 as a result of higher withholding taxes on internal dividends. Looking at cash flow on slide 21, there are several elements to mention. The increase in profit before income tax, mainly driven by less restructuring items and financial expenses. The reduction of the cash tax payment linked to the absence of the 3% dividend contribution in France and one-off payments in 2017 related to tax audits. Working capital outflow was contained versus last year while organic revenue growth accelerated in Q2. As a result, operating cash flow is at EUR 165.5 million, up 10.7% year-on-year. Net CapEx stands at EUR 59 million, showing a disciplined approach by the group at 2.5% of revenue.
For 2018, we still expect CapEx to be in the range of 3%-3.5%, notably to support our digital transformation. Lastly, the decrease in interest paid due to a lower average gross debt. All in all, free cash flow increased by 182% on a constant currency basis, benefiting from a favorable comparison base. Regarding our financial structure on Slide 22, the adjusted net debt stands at EUR 2.46 billion compared to EUR 2.09 billion in December 2017. This reflects a EUR 62.9 million free cash flow, EUR 123.7 million for the acquisitions and earn-outs paid in H1 2018, EUR 254.8 million of dividends distributed to shareholders in H1. EUR 24.1 million on share buybacks and a EUR 26.5 million negative ForEx impact. The net debt will be the ratio stands at 2.82 times, well below our 3.25 times bank covenant. Thank you. I now hand it back to Didier for the business review.
Thank you, Nicolas. Thank you. Starting with Marine & Offshore on page 24. As anticipated, the business was down 5.4% organically in H1 as a result of high single-digit decline in new construction, which eased in Q2 with activity in Asia remaining at a low level. Slight decline in current service due to the unfavorable timing of inspections and some price pressure, although the level of laid-up ships was stable. Mid-single digit decline in offshore-related activities due to the lack of deep sea projects and the reduction of risk assessment studies, notably in Asia and in the Americas. On the upside now. New orders amounted to 3.5 million gross tons at the end of June 2018, compared to 2.9 million a year ago, confirming the recovery of the market. The order book, which stood at 13.4 million gross tons at the end of the quarter, has now stabilized.
Commercial wins include passenger ships in Norway, FPSO in China, and bulk carriers in Japan. Margins were down to 21.3%, explained by the decline of volumes and by the negative FX impact. Further restructuring actions were taken in the in-service activity. Looking ahead in 2018, we still expect full-year organic growth to be slightly negative. The in-service activity should remain resilient. For new construction, we still expect H2 to be stable to positive, benefiting from the ramp-up of recent order wins. A word now on the upcoming IMO 2020 regulation, which will benefit a number of our businesses from 2019. Shipowners can meet the new standards using low sulfur compliance fuel oil. This will support our Oil & Petrochemicals business. An increasing number of ships are also using gas as a fuel, which will support the LNG segment for new construction, where we have a leading position.
Ships may also meet the SOx emission requirements with the installation of scrubbers, which will increase our accreditation work. Moving to Agri-Food and Commodities. The business continues to improve with revenue up organically in H1 and 4.8% in Q2. By such segments, Metals & Minerals confirmed sound recovery, up 11.4% in organic growth, supported by 18% growth for upstream activities across all geographies. Trade achieved low single digit with improvement over Q2. Agri-Food grew by 3.9% organically, thanks to a strong food performance. The agri segment was, however, more volatile, affected notably by weak trade volumes in Europe and the trucker strike in Brazil, which impacted exports. We expect the situation to normalize as we move into H2. Oil & Petrochemicals is up by 1.2% organically, reflecting mixed situation by geography.
Solid performance in Europe, thanks to new services and market share gains, while more difficult conditions continued in North America. Lastly, government services were down by 1.5%, though the organic growth rebounded in Q2, thanks to progressive ramp-up of VOC and single window contracts. The margin was stable on an organic basis as mix and operating leverage was offset by price pressure in Oil & Petrochemicals. The outlook for 2018. We expect improved growth versus 2017, fueled by recovery in Metals & Minerals market, healthy Agri-Food businesses, and stabilizing government services. Turning to Industry, page 27. The business confirms positive growth of 2.2% organically, with 2.8% in Q2 as a result of our successful diversification. Oil and gas CapEx related activities, 15% of divisional revenue, are now showing easing rates of decline being down 12% in Q2 after -17% in Q1.
Oil and gas OpEx was slightly up with solid volume increase, largely offsetting price pressure. We achieved a 20% organic growth in power and utilities OpEx, with the ramp-up of large contract wins in Latam. This segment is now as big as the Oil and gas CapEx business, accounting for 14% of divisional revenue. The margin was stable year-on-year. We expect the business to return to slightly positive organic revenue growth overall. Our strategy of diversification will continue to pay off. Through the year, we expect to see Oil and gas CapEx markets bottoming out. In B&I, Building & Infrastructure, page 28. Revenue increased by 4.1% organically, with a similar organic growth in both construction-related activities and buildings in service activities. Organic growth performance was mid-single digit in France, with uptick in Q2.
High single digit in Asia, driven essentially by China at 8% and by the more mature Japanese market, up 9%. Our geographical diversification is well underway. Chinese business now represents 15% of B&I revenue, and North America 14%, thanks to our recent acquisitions, including EMG. The margin was slightly down, primarily due to mix and price effects. Acquisitions contributed positively to the divisional margin. For the full year 2018, the outlook for the business remains positive overall, with strong growth in Asia, notably in China, improving growth momentum in Europe compared to last year, notably in France, driven by both CapEx and OpEx. Certification. Certification, page 29, was our top performing business in 2018, delivering 10.8% organic growth, with a strong performance spread across most regions and categories. Q2 was up 14%. Overall, the growth was fueled by renewed standards like ISO 9000, 14000, and IATF in the automotive sector.
Q2 benefited strongly from most customers anticipating audits ahead of the revised standard transition deadline. At the end of June, 96% of Bureau Veritas clients were in the transition process or already complied with the new QHSE standards. Supply chain and global certification grew by double digits. Margins were healthy, improving slightly to 17.9%. This reflects a strong organic increase, which mostly offset the significant negative ForEx impact. We expect the business to deliver robust growth on a full-year basis. This implies a slower pace in the second half due to the revised standards transition deadline in September. Consumer products. Consumer products recorded a robust organic growth of 5%, with growth across all regions and most categories. Electrical and electronics grew by high single digit organically, primarily driven by automotive and wireless. Hard lines also achieved a high single digit growth, while toys stabilized.
Soft lines delivered growth below divisional average despite robust performance in Asia. Commercial wins in the semester include contracts with Amazon and Spotify in the U.S. H1 margin progressed organically by 30 basis points to a strong 23.8%. Operating leverage and margin initiatives more than offset some price pressure on a negative business mix. In 2018, we expect consumer products to maintain mid-single digit growth, reflecting strong growth in electrical and electronics led by Smartworld and automotive initiatives. Solid growth for hard lines with stabilization in the toys sub-segment. I move to the outlook, page 32. For full year 2018, our outlook is confirmed. We expect an acceleration in organic growth revenue compared to full year 2017, a slightly improved adjusted operating margin at constant currency, and improved cash flow generation at constant currency.
To conclude, page 33, the first half of 2018 shows that the group transformation is well underway and that our 2020 ambition is on track. Thank you for your attention. This concludes our presentation. We can now open the Q&A session.
Thank you very much, sir. Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel that request, please press the hash key. That is star and one if you wish to ask a question. Your first question comes from the line of Paul Sullivan of Barclays. Please ask your question, sir.
Hello, good afternoon. Just two questions from me. Didier, I'm noticing you're mentioning price pressure, or the term price pressure is featuring in quite a number of your comments about the divisional performance. Is that something we should take note of? Are we seeing a step change or is that business as usual? In B&I in particular, I think you're talking about pricing pressure, I think for the first time. What's going on there? That's the first question. Secondly, in terms of restructuring, we're seeing it on an annual basis now for the last four or five years. Do you think we'll see more of it in the second half? Even as organic revenue growth is accelerating, I'm just not sure I get why we are still seeing quite heavy restructuring charges. Thank you.
Okay, Paul. Thank you for your question. I'm going to start, of course, with your question regarding the price pressure. I would say it's business as usual. There is nothing really special, of course, on oil and gas because of the conditions which are still challenging. There is probably more pressure than was the case three or four years ago. I would say now it has stabilized, and I could even see now a lot more stability for the future. Regarding the B&I, you noticed a very good point. In fact, I'm talking not about new construction. I'm talking essentially about some price pressure that we had, I hope, for one time here in France on big contracts regarding inspection in service. In fact, we had to renegotiate two contracts which are quite high, and because it was big contracts, we had, of course, some price pressure.
It's not something you should note of. It's really something which is business as usual, but these two contracts in France. Regarding the restructuring now, your question is very important because in the past two years, what we did is we had to adapt our workforce principally to the activities. We know that we had to adapt it in oil and gas, in particular in Latin America, in the U.S. We had to adapt also in Australia because of the metals and minerals crisis. We had to adapt in the marine division as well because construction was down. The restructuring we work on now is different. It's more aggressive restructuring, preparing the future to achieve our 17% margin in 2020. It's quite a different restructuring.
It's less adapting to the activity than clearly taking into consideration the fact that we have accelerated digitalization to improve productivity. The second point also is in some countries, in particular in Europe, the delaying, which had to be done and that we focus on now. To answer your question to the end, we imagine probably the same level of restructuring the second part of the year. We will discuss, of course, at the end of this year for next year, restructuring is going to decrease after 2019. It's going to decrease this year already compared to last year by probably EUR 17 million-EUR 20 million. Next year will be even lower because, again, the workforce is totally adapting now to our activity. What we do, we are refocusing now on potential productivity improvement, again, to deliver our 17% at 2015 constant currency in 2020.
Very clear. Thank you very much.
My pleasure, Paul.
Thank you. Your next question comes from the line of Aymeric Poulain of Kepler Cheuvreux. Please ask your question.
Yeah, thank you. Good afternoon. The question I have is on the construction, on B&I and the organic growth. You mentioned in Q1 some potential positive calendar effect in Q2 that don't seem to really appear. Here we see also a slowdown in China, which put more emphasis on the French turnaround and growth prospects. Could you give a bit more color on the situation in France and when we should start seeing the impact of some of the infrastructure projects you're involved with? That's the first question. Second question is on the free cash flow and the prospect in terms of the improvement of that free cash margin. I understand you mentioned in the past some effort that you would like to do on the working capital side of the equation.
I was wondering how you see that panning out in the second half in terms of cash collection and how you manage the growth and the balance between the growth prospect and the cash collection efforts. Thank you.
Thank you for your question, Aymeric. I'm going to start with your first question regarding Building and Infrastructure in France. In fact, to be very transparent with you, France was up 2% in organic growth in Q1 and 4% in Q2. We know on top of it that there were some strikes in France, in May in particular, which could have offset a part of this organic growth. Clearly we can see now we are moving back to organic growth in France. Again, and we had the opportunity to discuss it before, the real positive impact of infrastructure on Grand Paris is going to start really in 2019. It's coming from what I would say, the base business, meaning the inspection in service and new construction. Quite better news in France.
Now, regarding the other part of the world, China is still delivering very well. Of course, in China from a quarter to another, depending on the type of contract you work on, and we are talking about huge contracts. As you invoice and you record revenue, you can have a different from a quarter to another. We are still extremely optimistic with the backlog we have for the Chinese B&I business. Maybe some words about the two acquisitions we've made in the U.S., Primary Integration and EMG. We are, after just three or four months, very happy with these acquisitions. Of course, we record them in the scope, but the organic growth is very good.
I'm going to let Nicolas maybe say some words about the free cash flow and our Move for Cash, which are starting to pay off, Nicolas, that we are accelerating to deliver our cash at the end of the year.
Yeah, absolutely, Didier. We are actually rolling out the program. First, I want to remind that the free cash flow of H1 in 2018 is the best level of free cash flow generation of the last three years, if you look at the H1s of 2016 and 2017. There's a clear rebound. An element of satisfaction for us is that despite the acceleration of growth during the Q2, 4.4% organic growth, we see the movement in working capital very similar to last year. We believe that this is a first result of the Move for Cash initiative. Move for Cash initiative is now rolled out all over the world. The project was deployed in many countries. We trained around 400 managers. We have chosen more than 100, what we call, cash champions to implement the initiative. We start to feel it in the working capital evolution.
We strongly believe that more is coming because we are really full speed only in the last few weeks and months. More is coming, that's why we feel absolutely confident on the guidance we have given regarding free cash flow for this year towards an improvement compared to last year.
After maybe two important points that I should mention on top of Nicolas, if I may, is the fact that now 20% of the bonuses of the manager of the company is linked to cash flow. It's quite a change. Of course, the attention is very important on cash. The second important point is the fact that the pressure now on working capital and after 3 years saving all the cycles down, we can focus now on key metrics, margin and of course, working capital is very high. We have started to get some payoff, but we are very confident that we will get more for H2 and the years to come.
Okay. Thank you.
My pleasure, Aymeric.
Thank you. Your next question comes from the line of Rajesh Kumar of HSBC. Please ask your question.
Good afternoon, gents. Thanks for taking the question. If we look at the margin progression, 30 basis points pressure, do you think you are in a decent position now when half of it is coming from marine and it's been very difficult to predict what the marine business would do. If you look excluding marine, do you see the incremental pricing environment supportive of sequential improvement, or do you think there's a bit more to go or you need to cut more cost to stay where you are? Related to that, the second question is, could you give us some color on what was the impact of provisions on the margins? Also when we look at the EBITDA margin decline, that's more like 55 basis points, whereas the EBITDA margin decline is 30 basis points. What's driving that difference?
That would really help because assets haven't come down, depreciation and amortization have. Yeah.
Again, it's important, Rajesh, that you understand that again, in the last, let's say, three years, because of all the cycles being down, we had to restructure the company. We had to focus on digitalization and so on. Now, clearly we can see organic growth is coming back. [Selco's] Marine & Offshore included, is bottoming out. The focus of the company, even if it had been the case before, and we defended the margin very well in very challenging circumstances, is clearly to improve the margin and again, to achieve our 2020 plan at 17% and plus. We have a margin program in the company. We work on, let's say on four main topics. The first one is still some restructuring and what I call delaying. The second one is clearly lean management tools that we implemented five years ago, but still running.
Of course, when you do not restructure anymore because of the activity, you can accelerate. The third one is global purchasing. The fourth one, which is important for us today, again, accelerating in some countries, in particular in Europe, is digitalization to help us to improve productivity. These are the four main topics we are working on to achieve our commitment to the market in 2020. I let maybe you, Nicolas, to answer about some color about the impact of provision.
Yeah. I think there was also a question on the Marine & Offshore margin impact. Regarding provision movement, we had some movements. Two things to highlight. Firstly, we had the first implementation of IFRS 9, as you know, on bad debt, and we used some of the provision we have built at the end of last year, facing some bad debt issues. This is the first implementation of that new IFRS rule, which is happening, and it's going to be the case in the future because this provision will keep on being fueled and concerned, depending on the situation of some of our bad debt. The second significant element I can mention is linked to one litigation in Marine. I'm not going to mention it specifically.
We had an improvement of our position in that litigation, and we could release the provision, which we had taken on this litigation. That's the two key elements which explain the swing, compared to last year.
That's about, what, 40 basis points benefit combined?
Yeah, I think the total amount at stake is a small EUR 10 million in total.
Okay. Because you're saying constant currency, you have 20 basis points of margin improvement, but at actual currency, you had a 30 basis points decline. The 20 basis points improvement, almost all of it can be seen as depreciation as a proportion of sale, D&A as a proportion of sales, have declined. If I take that provision benefit, which is a real benefit because you won't be paying that cash in the future, then it looks like even on constant currency, the underlying margin declined by something like 30 basis points.
Yes.
No?
No. Maybe you could have outside this call, a conversation with Laurent Brunelle, but we will give you more details now because it's about a calculation, so I prefer that we do it outside this call. No, we confirm the 20 basis points improvement at constant currency with two activities, usually at a high level of margin, Marine & Offshore and CapEx oil and gas, which are today bottoming out. This is clear.
Okay. You think this trend can continue in the coming quarters?
We are working hard on it.
Yep.
We hope, of course, and I may have some question about it, to have Marine. We are confident that Marine is going to recover progressively because we have the backlog now, we can see already some CapEx around gas projects being back. Of course, we need to win them, but it's going to help us on top of the four action that I mentioned to you to continue to improve our margin.
Understood. Thank you very much.
My pleasure.
Thank you. Your next question comes from the line of Tom Sykes of Deutsche Bank. Please ask your question.
Good afternoon, everybody. Just firstly, coming back on the working capital, because your reported revenues were down, and organically you added about EUR 85 million-EUR 90 million of revenues. How do you then have EUR 150 million of working capital outflow? Why should we see that as an improvement? Sorry, I just don't quite see where the improvement is coming from, and which particular business lines or geographies are actually causing the biggest effect on working capital outflow at the moment, please? I also just had a question on, you mentioned that the certification growth might be a little bit slow in the second half of the year. What about the sustainability of the operating margin, please?
I'll let you maybe, Nicolas, answering the first question on working capital.
Yeah. I'm not sure I've completely understood your point on working capital. What we can say is that usually, the seasonality of working capital evolution in the group is an absorption of cash during the first half, which is the usual pattern, and then a generation of cash in the second half. This profile is confirmed. What we feel is that compared to last year, when we had an organic growth of 1.6% in the first half, we were able to deliver an absorption of cash through working capital, which is roughly at the same level, while the incremental, the extra growth we had in H1 this year should have, could have brought an extra consumption of several tens of millions of euros, which we did not get because of the actions through Move for Cash .
Well, I think either type of change of revenues, though, I mean, the change of revenues is actually down. Your reported revenue number H1 2018 is below your reported revenue number of H1 2017. Just setting aside the first half, second half seasonality, your revenues are lower, but your working capital is actually slightly higher through the cash flow statement. Even if I look at the organic growth, setting aside that the FX has probably reduced that working capital amount, organically you've only increased revenues by EUR 80 million-EUR 90 million. I just don't quite understand why year on year that would still consume so much working capital.
Yeah, you get that because actually I'm talking about the movement in working capital, all inclusive. If you take into account the Forex impact, it's a reduction of the absorption of working capital. You really get the impact of the Forex movement. I think the most interesting element is really the fact that at constant currency, we are not consuming more, and we are even at constant currency consuming less than last year.
Okay. Just on the French dividend issue and the operating cash flow, sorry, could you just remind us whether that is a full year effect as well? It's just a half year effect. I can't remember.
You mean the amount of the dividend?
Yeah, just.
benefit that you had in the cash flow from
The impact of the 3%.
The 3%.
On the dividend.
The impact of the 3% tax on dividend was EUR 7.2 million charge in 2017 in H1.
Okay, fine. Thank you. Then maybe just on the sustainability of the certification margin, if things slow down there, please.
Okay. On the margin, we are still optimistic because we are doing a good job. On top, of course, today, as we explained it to you, we are working on the updating, I would say, of the certification ISO, but at the same time, we are developing a lot of new certification schemes regarding particular bond protection and supply chain, which is growing, by the way, by double digits. The margin on this part of the business is quite good because usually it's voluntary decision from the client. The best way to answer this question is to confirm a slightly improved adjusted operating margin at constant currency for the year. After the mix can change a little bit knowing that Marine should recover, we will start to see a good impact, positive impact on what we have done in some countries thanks to digitization.
Overall, we will achieve our guidance. On the certification side, it's a little bit too early to tell you. Could be a small decrease, again, might be at the same level.
Okay. Thank you very much indeed.
My pleasure.
Thank you once again, ladies and gentlemen. If you do wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel the request, please press the hash key. Your next question comes from the line of Andrew Grobler of Credit Suisse. Please ask your question.
Hi, good afternoon. A couple of questions from me as well. Just on the industry division, when does the Qatargas contract start? I was also just trying to work out that with 2.8% organic growth in Q2, why you're only forecasting slight organic improvement for the full year. Is that not a bit conservative given the progression? Secondly, within consumer, looking at the Q2 growth rates For hard lines and E&E, the implication is that soft lines was down in Q2 organically. Is that correct? If so, where is the weakness within that part of the business coming from? Thank you.
My pleasure, Andrew. I'm going to start with industry. The Qatargas contract has already started. It started in May, and it's going to be a gradual ramp-up. It should bring EUR 10 million of revenue per year when it's going to be full speed. It's going to be a little bit progressive this year, but it should bring some good revenue next year. We are very pleased with this contract because on top of the size of the contract by itself, this is a combination of services. This is the way we want to move because this is not too much commoditized. The combination of services could be called risk asset management, asset risk management. Helping the client really to optimize its assets.
It's an opportunity for us to go and meet some of our clients, which we do today, to sell this type of contract. On the consumer business, last year, consumer product was quite strong in Q2. If there is a question of compare, we are still optimistic, and we feel that we will achieve the same level of organic growth for the year as the one we enjoyed for H1.
Within that, just going back to the specific part of the question, was soft lines down in Q2? If so, where was the weakness coming from?
No, it's more a question of compared to last year, we had a very, very strong June last year, in particular, on soft line. It's a real question of compare, but we are more or less on the same pace for the end of the year.
Okay. Thank you.
My pleasure, Andrew.
Thank you. Your final question comes from the line-- I'm sorry, I have no further questions, Rory McKenzie. If you do wish to ask a question, could you please press star and one again? Thank you. Your final question comes from the line of Rory McKenzie of UBS. Please ask your question.
Good afternoon. I got there in the end. Thanks for taking the question. Just on that certification slowdown you discussed, do you expect to see still strong growth all the way up to the deadline for the revision of standards in September? Should we be expecting double-digit growth again in Q3, then a sharp change, maybe even organic declines in Q4? Do you think the slowdown will be more gradual? Then my second question, again, is on the margin drags. You commented that building caused a 20 basis points drag on the margin in H1. Will that be still there or any easier in H2? Thank you.
I'm going to start with certification. We do not expect a double-digit growth, organic growth in Q3, neither in Q4. It is going to slow down because we have already done 96% of what the clients are expected. We still continue to foresee good growth in certification thanks to the new certification schemes that we have launched this year and the years before. We are still optimistic, not at the level we enjoy today, clearly. It's going to slow down for sure in Q3 and Q4. For the margin question, Nicolas, could you answer, please?
On the margin, I think we delivered a margin in H1 which is coherent with. I'm talking about the global margin. We are coherent with our full-year guidance, which is towards a slight improvement at constant currency. We are pleased to confirm that we expect H2 to allow for that guidance to be achieved.
Okay. No more question. I think there is no more question. Rory, thank you for this question, by the way.
Excuse me, sir. We do have one final question come in. Will you take this question?
Okay, yes, I'm going to take it.
Lovely. Thank you. It comes from the line of Rajesh Kumar of HSBC. Please ask your question. Hello, Mr. Kumar. Please ask your question.
Okay. Maybe what we could do is maybe Rajesh Kumar could call Laurent, because we need to end this call. Because it seems he's not on the line anymore, I wish you good morning, good afternoon, and good evening, and thank you for your attention. Bye-bye. Thank you