Didier Michaud-Daniel – CEO, Bureau Veritas – France
The global CEO of France’s leading supplier of testing, inspection and certification services discusses Bureau Veritas’ strengthening position in North America and China, while examining his response to the current slowdown in the oil and gas industry.
How do you assess your recently published quarterly results?
Bureau Veritas achieved very good results last quarter with 19.1 percent growth including a 4.4 percent organic growth rate, which was mostly driven by our Marine & Offshore, Commodities and Consumer goods businesses. The acquisitions we completed last year also explain this outstanding performance.
Your portfolio is composed of more than 400,000 clients spread across eight global businesses. How would you define the importance of the oil and gas industry to your overall activity and what types of services do you provide?
The oil and gas sector represents 23 percent of our turnover and comprises various segments including trade, commodities, Capex and Opex projects. Bureau Veritas provides services across the full supply chain, from the early stages to the execution of a project. We assist operators on the field but also during the downstream phases. Bureau Veritas is present across the value chain irrespective of the type of asset and setting whether offshore or onshore. It is fair to say that we are the only player in our field to deliver such a wide range of solutions, which is probably not known enough among our customers.
Innovation constitutes an essential component of our strategy for technology and development. We are qualified to address new environmental situations, particularly in the arctic, offshore and onshore. We are currently dedicating a research team working specifically on these parameters. Bureau Veritas gathers very sensitive and critical information, which it in turn submits to its clients, who consistently welcome our expertise.
How is Bureau Veritas affected by the current slowdown in the oil and gas industry?
Although Bureau Veritas is impacted by low hydrocarbon prices, we recognize the importance of economic fluctuations as an incentive for operators to re-define their investments and strategies. We assist our clients along the supply chain to determine the nature of their repositioning. On our side, Bureau Veritas has decided to further increase its presence in Opex-related services and assist operators to further improve operational efficiency.
In the last 10 years, QHSE has prevailed as a core value within the oil and gas sector. What is your perception of this transformation and its implications for Bureau Veritas?
QHSE is the core activity of our company. The operators have unanimously expressed their commitments to continue their efforts in this field. Our clients understand the importance of QHSE to their businesses’ long-term sustainability and profitability. The impact of QHSE within the deployment of their projects is undeniable and has encouraged Bureau Veritas to accompany and adapt to these new trends and developments in mentalities and business philosophies.
One of the driving forces of your growth is the emergence of new regulations worldwide. Is this very relevant in the oil and gas sector? Moreover does this explain the importance of emerging markets, which now represent 54% of your turnover?
Indeed, the emergence of new standards and regulations constitutes a significant driver of growth for our certification and conformity assessment lines of business. However, Bureau Veritas provides services meeting clients’ needs beyond regulatory demands. Even if a reinforcement of regulations occurs, we assist clients in many different aspects. The advent of new regulations and norms is taking place in emerging markets, where Bureau Veritas is striving to position itself as a partner of choice for global operators. Our excellent results in emerging markets are equally fueled by the increase in demand from local players.
Bureau Veritas is renowned for its proactive acquisitions strategy. How successful has the acquisition of DTI DiversiTech been so far?
This acquisition was strategic as it completed our portfolio and enables us to address the very early stage of exploration. Overall, thanks to this transaction, Bureau Veritas is truly capable of providing solutions across the entire value chain. Acquisitions symbolize Bureau Veritas‘ DNA. In the last 10 years, we have achieved more than 100 acquisitions, across all our businesses and zones. From a strategic point of view, these external growth ventures have enabled us to integrate new forms of expertise or emphasize our presence in new markets. In China for instance, we have completed three acquisitions this year alone on the construction side to establish a lasting presence. Markets such as China cannot be penetrated via organic growth only, therefore we seek external growth to build a platform. I like to think of Bureau Veritas as an integration machine, working all over the world since 1828 and historically developing an expertise in mergers and acquisitions and integration processes, which is probably unmatched in the industry.
You have consistently centered the company’s international development on China as you just mentioned, but also North America. How do you evaluate the company’s internationalization strategy today?
A considerable number of clients are unaware of our extensive global network. Ever since my appointment as CEO, I have indeed pushed to strengthen our presence internationally, particularly in North America and China. I am confident that I will achieve my objective of balancing our footprint between three equal geographies: Europe, Asia and the Americas.
Our activity in China is driven by local and national authorities’ decision to liberalize product testing in order to improve quality controls; a decision, which has granted us access to a market of an unparalleled size.
Our objective is to become as important in the United States as we are in France. The market is extremely fragmented in the United States because regulations fall under the jurisdiction of states. There is subsequently no American player of our size, which deals with testing and inspection in such a wide array of industries. In the oil and gas sector, we have established a strong presence organically and thanks to successful acquisitions. Today we are present across the full supply chain and capitalize on our technical center located in Houston, which addresses the engineering aspects of our services related to verification and design. We produce a full range of services covering manufacturing of equipment, industrial asset monitoring and capabilities. There has been an undeniable reinforcement of our activities in light of the advent of shale oil and gas.
Could you define the vision that you have tried to instill in the company since your appointment as CEO back in 2012?
Keeping up to date with technological development is deeply enshrined in our philosophy. We have strong operating strategies, which address local needs and organizations working on developing competencies on a worldwide basis. We manage competencies and develop innovation and training on a full-scale basis, which amounts to large and complex organizations. Since I joined Bureau Veritas, we have developed leadership development reviews, which are now implemented globally. Secondly, I strengthened the Group’s executive committee, now a team composed of 18 people who make and execute decisions consensually. Thirdly, we introduced lean management processes in the company to enhance our productivity and profitability.
After three years in the company, I strongly believe that Bureau Veritas transformed, moving from a French company operating internationally into a genuine global group. Another key element of evolution resides in our ability to address clients’ needs beyond regulatory requirements, which fosters greater added value to the industry.