Bureau Veritas: H1 results conference call: 2015 guidance lowered but already largely anticipated
BUY, Fair Value EUR24 vs. EUR26 (+21%)
After major adjustment during Q2 mainly due to the economic environment in Europe and especially in France and the exchange rate impact, no major surprises came from H1 results which were in line with forecasts. In advance and 18 months before the end of the BV2015 strategic plan launch in 2012, management stated that it would not be possible to achieve 6-8% organic growth per annum between 2012/2015 and lowered the EBIT margin target to around 17% by the end of 2015 i.e. an improvement of c.80bps vs. the objective of 100-150bps defined in 2012. Our top line forecasts already took into account this trend but we have now lowered our EBIT margin by around 40bps. Based on our DCF, we have reduced our FV to EUR24 from EUR26 and have removed the stock from our top list.