This section illustrates the Group’s solid financial profile, with information on debt structure and financing policy.
Bureau Veritas has access to well-diversified sources of financing including bond issues, US Private Placements and bank loans with a balanced maturity profile.
The Group has the policy to finance its assets in the concerned currencies allowing a natural hedge of currency risk. Currency swaps are used to hedge subsidiaries’ cash surpluses and requirements in other currencies.
The Group monitors interest rate exposure so that less than 60% of its consolidated net debt can be exposed to a rise in interest rates. The Group may enter into hedging instruments for this purpose. No financial instruments are contracted for speculative purposes.
On May 17, 2018, Bureau Veritas SA signed a EUR 600 million multicurrency Revolving Credit Facility. This syndicated credit facility has a five-year maturity, with 2 one-year extension options, exercised in 2019 and 2020.
On April 30, 2020, Bureau Veritas SA signed an additional liquidity credit line of EUR 500 million, with a one-year maturity and a six-month extension option at Bureau Veritas’ discretion.
This new credit line strengthened the Group’s liquidity position, added to the EUR 600 million syndicated credit facility maturing in May 2025.
Both credit facilities and US Private Placement (USPP) require compliance with certain bank covenants and ratios. At June 30, 2020, the adjusted net financial debt/EBITDA ratio was further reduced to 2.00x (from 2.25x last year) and the EBITDA/consolidated net financial expense ratio was 8.71x. As a precaution against a worsening pandemic, Bureau Veritas obtained a waiver from its banks and USPP noteholders to relax its financial covenants at June 30, 2020, December 31, 2020 and June 30, 2021. As a consequence, the adjusted net financial debt/EBITDA ratio stands at 4.5x, 6.25x and 5.5x versus 3.25x previously at the test dates and for USPP only, the EBITDA/consolidated net financial expense ratio stands at 5.5x (unchanged), 2x and 3x versus 5.5x previously at the same dates.
At June 30, 2020, 83% of Group’s financial debt was fixed rate. The average maturity of the Group’s financial debt was 5.6 years (on the basis of the gross debt adjusted for 2020 and 2021 maturities refinanced during 2019, for a total amount of EUR 679 million). The blended average cost of funds over the first half of the year was 3.0% excluding IFRS 16 impact. The blended average cost of funds was 2.5% excluding IFRS 16 impact and excluding early repayment costs over the first half of the year. Debt is primarily denominated in Euro (77%) and US dollars (21%).
At June 30, 2020, bond issues break down as follows:
|In euros millions||Maturity||Coupon (%)||Nominal amount||Currency|
|2014||Jan. 2021||3.125%||500 million||EUR|
|2016||Sep. 2023||1.250%||500 million||EUR|
|2016||Sep. 2026||2.000%||200 million||EUR|
|2018||Jan. 2025||1.875%||500 million||EUR|
|2019||Jan. 2027||1.125%||500 million||EUR|
US private Placements
At June 30, 2020, US Private Placement break down as follows:
|In currency millions||Maturity||Coupon (%)||Nominal amount||Currency|
|2008 USPP||Jul. 2020
|2017 USPP||Sep. 2027
|2018 USPP||Jan. 2029||Fixed||200 million||USD|
|2019 USPP||Jan. 2030||Fixed||200 million||USD|
At June 30, 2020, bank facilities break down as follows:
|In currency millions||Maturity||Drawn amount||Available amount||Currency|
|2018 Syndicated Credit Facility||May 2015||600 million||-||EUR|
|2020 Credit Facility||Apr. 2021||-||500 million||EUR|
|CNY bank financing||Sep. 2020||545 million||205 million||CNY|
Financial operation Press Releases
|12 Nov. 2019||Bureau Veritas successfully completes a bond issuance:
EUR 500 million non-rated maturity January 2027
|28 Sep. 2018||Bureau Veritas successfully issued
a EUR 500 million non-rated new bond issue maturity January 2025
|4 Sep 2017||Bureau Veritas successfully raises
USD 355 million 10-year USPP
|31 Aug. 2016||Bureau Veritas successfully raises
EUR 700 million through a 7-year and 10-year non-rated new bond issue
|16 Jan. 2014||Bureau Veritas successfully launches a second bond issue|
|14 Nov. 2019|
|2 Oct. 2018|