BUREAU VERITAS: Solid 2017 Full-year results, with 2.2% organic revenue growth

Solid 2017 Full-year results, with 2.2% organic revenue growth

Didier Michaud-Daniel, Chief Executive Officer, commented:

"In 2017, as presented during our Investor Days, we have made significant progress in the execution of our Strategic Plan, with a focus on Group diversification well underway.

Over the past year, we continued to deploy our ambitious transformation plan. We streamlined the Group's organization enabling a quicker decision-making process. We have reinforced our focus to place our clients' challenges at the heart of our marketing and sales approach. In addition, we are making good progress with the Group digital transformation.

Bureau Veritas' expansion strategy in targeted sectors and countries is delivering results and is making the Group more resilient. Our 5 Growth Initiatives, now representing a third of Group revenue, generated 6.9% organic growth in 2017. We have pursued our external growth through nine targeted acquisitions, all supporting our Growth Initiatives and adding around EUR 150 million of annualized revenue.

The accelerated growth in 2017, which we expect to continue in 2018, reinforces the management's confidence in achieving the 2020 ambition".

The Board of Directors of Bureau Veritas met on February 28, 2018 and approved the financial statements for 2017. The main consolidated financial items are:

Growth Initiatives up 6.9% organically while Base Business is stable

Group organic revenue growth achieved 2.2% in FY 2017, with an acceleration in H2 including 3.8% in the last quarter. This is explained by:

• Strong growth for the 5 Growth Initiatives (a third of Group revenue), up 6.9% organically and year-on-year (vs. +4.9% in FY 2016). High double-digit growth was achieved in both Automotive and SmartWorld and a mid-single digit for Agri-Food, Opex and Buildings & Infrastructure.
• Gradual improvement through the year for the Base Business (two-third of Group revenue), up 0.1% organically and year-on-year with an organic growth of 2.6% in the last quarter. Apart from Marine & Offshore (8% of Group revenue) and Oil & Gas Capex-related activities (less than 5% of Group revenue) which remained under cyclical pressure (down 5% and 16% respectively in 2017), the other activities performed well, with notably Metals & Minerals in a recovery mode, and Certification maintaining robust growth.

This set of figures supports the Group's emphasis on its targeted Growth Initiatives, which are delivering additional growth and intentional diversification.

M&A: nine acquisitions in 2017, all focused on Group strategic Growth Initiatives

In 2017, Bureau Veritas completed nine acquisitions, representing around EUR 150 million in annualized revenue (or 3.2% of 2016 Group revenue) which supported 4 of the 5 Growth Initiatives:

Since the beginning of 2018, the Group has made two additional acquisitions in support of its Opex and Buildings & Infrastructure Growth Initiatives:

• Lubrication Management (Spain, EUR 4m of revenue, specialized in oil conditioning monitoring)
• EMG (USA, EUR 70m of revenue), a provider of technical assessment and project management assistance services in Buildings & Infrastructure in the U.S. This acquisition: i) brings the Group in the US a new expertise with sizeable platform for technical assessment and project management assistance; ii) enhances its growth profile and resiliency by increasing its Opex exposure (90% of EMG is Opex-related services) and thus by reducing the Group's Oil & Gas weight.

At March 1, 2018, Bureau Veritas is on track with its 2020 plan with nearly 50% of its external growth ambition already achieved: since the start of the plan, 23 acquisitions (of which 19 support the Group's 5 Growth Initiatives) have added more than EUR 350 million of incremental revenue out of an ambition of around EUR 750 million of revenue over the period 2015-2020.

Proactive cost management

The Group continued to adjust its cost base in businesses faced with challenging market conditions, notably Marine & Offshore and commodities-related divisions (Oil & Gas, Upstream Metals & Minerals and Government Services). It also made structural efforts to improve its margin.

All in all, this led the Group to book a restructuring charge of EUR 57.1 million in 2017, essentially headcount reduction related.

Digital transformation acceleration supported by key partnerships

Digital is at the forefront of the Group's transformation and focuses on three dimensions:

• improving the Group's efficiency in delivering its core services portfolio
• leveraging digital technologies to implement new operating models
• launching new services to support client compliance needs in the digital world

Recently concluded partnerships with global players will support this program:

• Blockchain technology with Worldline

Bureau Veritas is launching today Origin, the world's first blockchain-based complete food traceability solution. Built in partnership with Worldline, a leader in securing digital transactions, it is first solution of its kind to leverage the technology.

• Digitalization of vessel operations with Bourbon

Early in 2018, Bourbon and Bureau Veritas have announced a strategic partnership,  covering initially the real-time verification of dynamic positioning (DP) operations.  Bureau Veritas will also provide classification of on-board connectivity systems, encompassing cyber risk assessments.

• Next generation inspection services with Avitas Systems

Through the partnership announced end of 2017, Bureau Veritas will deliver its independent inspection services with the Avitas Systems cloud-based platform, combining automated data collection and artificial intelligence techniques to bring continuous industrial risk management to a new level. The initial focus will be in the Power & Utilities sector.

Refinancing of USD 355 million 10-year US Private Placement

In September 2017, the Group successfully raised USD 355 million on the USPP market through a 10-year dual-issuance: the first USD 200 million tranche was issued by the Group's US subsidiary, Bureau Veritas Holdings, Inc.; the USD 155 million second tranche will be issued by Bureau Veritas SA with a one-year funding delay to July 2018. With this issuance Bureau Veritas anticipated the refinancing of its debts. The Group seized attractive market conditions with a debt cost equivalent to 1.68% in EUR fixed rate while lengthening the maturity of its debt to 5.1 years on average, post operation.

1 - Revenue up 3.1% year-on-year

Revenue in FY 2017 reached EUR 4,689.4 million, a 3.1% increase compared with FY 2016.

• Organic growth was +2.2%, with accelerating growth in H2 compared with H1 (3.0% vs. 1.3% respectively). Q4 2017 recorded a 3.8% organic growth rate.

Solid commercial wins spurred by the 5 Growth Initiatives, firmer upstream Metals & Minerals market as well as softer rates of decline in Oil & Gas capex enabled the Group to return to positive organic revenue growth in 2017 after -0.6% in FY 2016.

Activity wise, 4 out of 6 businesses posted organic growth, with Certification being the best performer (+6.1%) alongside Buildings & Infrastructure (+5.1%) and Consumer Products (+4.7%).

By geography, activities in Europe (34% of Group revenue), increased by 3.2% organically with a marked acceleration in H2 (at 5.5%) primarily driven by Certification, Buildings & Infrastructure and to some extent Industry, notably in France. Business in Asia-Pacific (31% of revenue; 0.8% organic growth) was impacted by the end of large contracts in Oil & Gas in Australia and Korea, and the decline in Marine & Offshore, however compensated by solid growth in China and Japan. Activities in the Americas showed an improvement (25% of revenue; 3.3% organic growth), driven by Latin America (up 5.9% organically) benefiting from the strategy of diversification outside of Oil & Gas.

• Acquisition growth was 2.5%, combining the contribution of acquisitions made in 2017, the acquisitions finalized in 2016 and mitigated by the disposal of non-strategic NDT^[3] activities in Europe (EUR 19.7 million of annualized revenue or -0.4% to Group revenue).
• Currency fluctuations had a negative impact of 1.6%, mainly due to the appreciation of the EUR against USD as well as some emerging countries' currencies.

2 - Adjusted operating profit of EUR 745.5 million, margin at 16.1% organically

FY 2017 adjusted operating margin was down c.25 basis points to 15.9% compared to 16.2% in FY 2016. Adjusted for foreign exchange (-c.10bp) and scope (-c.10bp) margin declined organically by c.5 basis points year-on-year at 16.1%.

Above two-thirds of the portfolio have stable or improving margins, adding 40 basis points to Group organic margin: this is driven by a significant improvement in Agri-Food & Commodities and in Buildings & Infrastructure, and maintained high margins in both Certification and Consumer Products. This improvement is the result of a combination of operating leverage, strict cost management, lean efforts and restructuring pay back.

Less than a third of the portfolio has a minus 45 basis points impact on Group margin with: i) -20 basis points coming from Marine & Offshore, due to lower volume of activity, notably for new construction and Offshore Services; ii) -25 basis points resulting from price pressure in Oil and Gas and change of mix in Industry.

Other operating expenses increased to EUR 139.2 million in FY 2017 vs. EUR 125.2 million in FY 2016. These include:

• EUR 77.1 million in amortization of acquisition intangibles (compared with EUR 79.5 million in FY 2016);
• EUR 57.1 million in restructuring charges, with actions taken mainly in Marine & Offshore, government services, Industry and commodities related-activities (compared with EUR 42.6 million in FY 2016);
• EUR 5.0 million in acquisition related items (EUR 3.1 million in FY 2016).

Operating profit came to EUR 606.3 million, down 0.6% compared to EUR 609.7 million in FY 2016.

3 - Adjusted EPS of EUR 0.95, up 6.7% at constant currency

Net financial expense stood at EUR 103.7 million compared with EUR 86.5 million in FY 2016, reflecting mostly foreign exchange losses (EUR 12.1 million vs. foreign exchange gains of EUR 8.7 million in FY 2016) due to significant depreciation of currencies in some emerging countries.

Net finance costs decreased to EUR 86.9 million (vs. EUR 89.9 million in FY 2016) due to a decrease of financial charges explained by the lower average cost of debt (3.1% vs. 3.4%) partially offset by average net debt increase.

Other items (including pensions and other finance charges) stood at EUR 4.8 million, marginally down from EUR 5.3 million in FY 2016. 

Income tax expense totaled EUR 164.8 million in FY 2017, compared with EUR 188.9 million in FY 2016. This represents an effective tax rate (ETR) of 32.8% for the period, compared with 36.0% in FY 2016.

The adjusted ETR is 31.8%, down 280 basis points compared with FY 2016, mainly resulting from a combination of exceptional items, including the refund in 2017 of the 3% dividend contribution in France following the decision of the Constitutional Council to invalidate this contribution. In addition, the Group's deferred taxes were revalued as a result of the reduction in the United States tax rate voted at the end of 2017.

Attributable net profit for the period was EUR 308.0 million, vs. EUR 319.4 million in FY 2016.

Earnings Per Share (EPS) stood at EUR 0.71, compared with EUR 0.73 in FY 2016. 

Adjusted attributable net profit totaled EUR 416.1 million, vs. EUR 409.0 million in FY 2016.

Adjusted EPS stood at EUR 0.95, a 1.1% increase vs. FY 2016.

4 - Improvement in Free cash flow on an organic basis

FY 2017 operating cash flow stood at EUR 581.2 million vs. EUR 594.4 million in FY 2016. This slight decrease is notably led by negative currency effects, and the increase in working capital linked to revenue growth in Q4 at +3.8%. These are partially offset by the organic increase in the net cash flows and the decrease in taxes paid in 2017.

Purchases of property, plant and equipment and intangible assets, net of disposals (Net Capex), amounted to EUR 133.4 million in FY 2017, a decrease compared to EUR 145.9 million in FY 2016. This showed disciplined control over the Group's net capex-to-revenue ratio at 2.8%, slightly below the level achieved in FY 2016 (3.2%).

Free Cash Flow (available cash flow after tax, interest expenses and capex) achieved EUR 349.6 million, vs. EUR 362.5 million in FY 2016. On an organic basis, the Free Cash Flow is increasing by 3.2% in 2017. Adjusted from unfavorable timing differences in interest payments, organically, the Group's Free Cash Flow progressed by 6.0% compared to the prior year.

At December 31, 2017, adjusted net financial debt was EUR 2,094.4 million, i.e., 2.37x last-twelve-month EBITDA as defined in the calculation of bank covenant, compared with 2.20x at December 31, 2016. 

The slight increase in adjusted net financial debt of EUR 98.0 million vs. December 31, 2016 (EUR 1,996.4 million) stems from:

• Free Cash Flow of EUR 349.6 million;
• Dividend payments totaling EUR 295.4 million;
• Acquisitions, accounting for EUR 168.7 million;
• Share buybacks net of the capital increase carried out to cover stock option plans and allocation of performance shares, amounting to EUR 33.4 million;
• Other items that reduced the Group's debt by EUR 49.9 million, mainly attributable to currency fluctuations.

For Full-year 2018, the Group expects:

• An acceleration in organic growth revenue compared to full-year 2017
• A slightly improved adjusted operating margin at constant currency compared to full-year 2017
• An improved cash flow generation at constant currency compared to full-year 2017

Bureau Veritas reaffirms its 2020 Ambition:

• Adding EUR 1.5 billion of incremental revenue based on the 2015 plan initial exchange rates, half organic and half through external growth
• Reaching 5% to 7% of organic growth by 2020
• Achieving above 17% adjusted operating margin in 2020^[4]
• Generating continuous high Free Cash Flow

Marine & Offshore

Revenue decreased by 4.7% on a constant currency basis, including 5.3% negative organic growth and 0.6% acquisition-led growth. Q4 2017 revenue fell -4.2% on an organic basis, being mainly affected by the new construction decline.

Revenue for the In-service ship segment (62% of divisional revenue) decreased slightly year-on-year, with a mixed situation by sub-segment: Core In-service grew slightly, a reflection of growth in the classed fleet, partly offset by price pressure while the level of laid-up ships stabilized. Offshore-related activities recorded a single-digit fall, still driven by the lack of deep-sea projects and further reduction of risk assessment studies. Nonetheless, services for offshore clients showed some stabilization towards the end of 2017.

At December 31, 2017, the fleet classified by Bureau Veritas comprised 11,299 ships and represented 118.0 million of Gross Register Tonnage (GRT), up 3.6% on a yearly basis.

While revenue from the New Construction segment (38% of revenue) decreased sharply over the full-year, the new order intake for the year represented 5.1 million GRT, compared to 1.9 million GRT a year ago. The order book reached 12.6 million GRT at the end of 2017 (compared to 13.6 million GRT as of December 2016) and remains well diversified with categories such as Tankers, Bulk and LNG vessels expanding their share.

The adjusted operating margin for the year came in at 22.0%, down 330 basis points compared to 2016, primarily explained by the downturn in new-build activity. The Group has undertaken restructuring actions to counteract the heavy pressure on Marine & Offshore operating margin.

Outlook: In 2018, Bureau Veritas expects organic growth in this business to be slightly negative. This reflects i) a further decline in New Construction given the lead time with a progressive rebound expected from H2 2018 onwards thanks to new orders won in 2017 ii) resilient In-Service activity including the Offshore-related activities.

AGRI-FOOD & COMMODITIES

Revenue moved up 8.0% on a constant currency basis, including organic growth of 2.4% and acquisition-led growth of 5.6%, driven primarily by the acquisition of Schutter Group (in March). Q4 revenue increased by +7.1% on a constant currency basis, of which 4.9% came from organic growth and 2.2% from scope effect. Oil & Petrochemicals (O&P) segment (38% of divisional revenue) achieved 3.0% organic growth, as a result of a good performance in O&P trade activities in the context of challenging price and competitive environment. Growth was particularly strong in China, high in Africa and robust in Europe. Non trade-activities (OCM, Marine fuel) achieved double-digit growth with an increased contribution.

Metals & Minerals segment (27% of revenue) achieved a good performance with organic growth of 5.7% in 2017, led by both Trade and Upstream (excluding coal) activities. Upstream activities, excluding coal which remains under pressure, recorded a significant uptick in the fourth quarter thereby confirming an acceleration in the second half. Trade activities experienced growth across all geographies with particularly steady growth in Europe, benefiting from continued focus on key accounts and market share gains.

Agri-Food (20% of revenue) reported a solid 6.8% organic growth for the full-year, benefiting from the double-digit growth in agricultural testing and inspection activities. This was notably led by the solid performance of Brazilian activities with soybean and corn achieving record production levels. Overall, the Group is enjoying increased depth and scope of Latin American capabilities provided by the acquisition of Schutter Group in the first quarter of 2017 as well as from KMA at the end of 2016.

Government Services (15% of revenue) revenue was down -7.1% organically. The revenue declined essentially as a result of lower volume and value of imports intended for West African countries, the end of a PSI (Pre-Shipment Inspection) contract in Guinea, the normal end of the Concession Scanner contract in Ivory Coast and further deterioration in the Iraqi VOC (Verification of Conformity) program. The latter, however, has been stabilizing in the fourth quarter. 2017 is characterized by the gradual disappearance of PSI in the revenue mix while VOC contracts increased at a sustained pace, notably in Q4 2017. In addition, the Group has expanded the offering of new services such as a one-stop-shop insurance offer in Armenia. This participates in the overall reduction of the risk profile from the Government Services activities.

The adjusted operating margin for the year gained 90 basis points at 12.6%, up from 11.7% in 2016 benefiting primarily from volume and mix effects across the various segments.

Outlook: In 2018, the Group expects its Agri-Food & Commodities business to improve its growth compared to 2017, fuelled by recovering Metal & Minerals markets, healthy Agri-Food businesses and stabilizing government services thanks to the ramp-up of several contract wins. 

INDUSTRY

Revenue decreased by 1.7% on a constant currency basis for the full-year with a slight organic decline of -0.8% (including -0.2% in Q4) and a -0.9% scope impact related to the disposal of non-strategic NDT activities in Europe (France and Germany).

This reflected a marked decline in Oil & Gas Capex-related activities (down 16% at Group level), partly compensated by low single-digit growth in Oil & Gas Opex and solid performances in other end-markets such as Power & Utilities and Transportation (including Automotive).

In Oil & Gas markets (38% of divisional revenue), the conditions remained challenging with persistently weak levels of activity in Oil & Gas Capex with continued reduced investments amongst the major oil companies and continuing pricing pressure. In this context the Group continued its push on Opex-related services, which grew slightly during the year.

Overall solid growth was achieved in Opex-related activities, including an 18% organic growth in Power & Utilities, which remains a key focus in the Group's strategic plan.

In the Automotive sector, the Group is working on several outsourcing projects: this includes Code'nGO launched during the year, which enables learners to take the written test for the French driver's license within a fully automated and digitalized process in over 100 tests centers operated by Bureau Veritas; further deployment is expected in 2018.

By geography, growth was strong in Africa and the Middle East, robust in Latin America (primarily led by Brazil) owing to country and sector diversification while more subdued in both Europe and North America. USA was back in positive territory in Q4. There was a marked decline in Australia and South Korea, as anticipated, due to large contracts ending.

The adjusted operating margin for the year declined 100 basis points to 12.1%, from 13.1% in 2016 due to i) the negative mix effect of Oil & Gas Capex decline and the push towards Opex-related services; ii) some persistent price pressure in Oil & Gas Opex activities.

Outlook: In 2018, Bureau Veritas expects a return to slightly positive organic revenue growth overall for the business as the strategy of diversification will continue to pay off (Power & Utilities, Automotive) alongside bottoming Oil & Gas Capex markets throughout the year.

BUILDINGS & INFRASTRUCTURE

The Buildings & Infrastructure business demonstrated solid revenue growth of 10.2% at constant currency, equally split between organic (5.1%) and external growth (with five acquisitions completed in 2017: Shanghai Project Management in China, California Code Check and Primary Integration in the US, INCA in Mexico and Mckenzie Group in Australia).

Slightly stronger organic growth was achieved in Construction-related activities (60% of revenue) than for Building in-service activities.

Double-digit organic growth was experienced in Asia (25% of revenue), including 16.4% organic growth for the operations in China (17% of Building & Infrastructure revenue) and 13.2% growth in the more mature Japanese market. China was driven by strong growth in energy and infrastructure project management, sectors where Bureau Veritas has built strong positions.

In the Americas (13% of revenue), the robust growth was driven, in particular, by regional expansion (Chile, Colombia, Argentina) through new construction projects.

Growth in Europe (59% of revenue) was below the divisional average, mainly due to a slow start in France (44% of revenue) although Q4 showed a nice uptick. Capex -related activities is on an upward trend with a good level of sales and opex-related activities benefited from acceleration in the recruitment phase and contract wins in the mass market, notably in France and in the UK. 

The adjusted operating margin for the year improved by 20bp to 15.2%, including a 75bp improvement organically thanks to volume and mix effects.

Outlook: In 2018, the outlook for the business remains positive overall with sustained solid growth on both Capex and Opex related services. This outlook reflects the expectation of strong growth in Asia (notably in China led by numerous infrastructure projects) and Latam, as well as improving growthin Europe, notably in France, driven by both Capex and Opex.

  
CERTIFICATION

The Certification business achieved solid organic growth of 6.1% for the full-year 2017 (of which 6.8% in Q4), with growth spread across all regions and categories.

Overall the growth was supported by renewed standards (ISO 9001, 14001, AS 9100 in the Aerospace and IATF in the Automotive sectors), along with new product and service launches. At the end of 2017, more than 50% of Bureau Veritas' clients have transitioned to the new QHSE Standards (ISO 9001: 2015 and ISO 14001: 2015). The transition effect is expected to continue until the first-half of 2018.

Double-digit growth was achieved for Customized Audits led by Supplier Risk Management, Brand Protection and Client Operations audits -, as well as for training activities, also benefiting from the transition to the new standards. Food Certification schemes recorded high single-digit growth, notably fuelled by Certification of Organic food products, while the growth of Supply Chain & Sustainability delivered mid-single digit (led by Energy management and Greenhouse Gases partly offset by a decline of Wood Management Systems Certification).

Global Certification contracts grew by 10% organically, with the ramp-up of new contracts signed with international companies, notably in Automotive, Aerospace, Food and Oil & Gas sectors.

Lastly, new products and services launched were also a major contributor to growth. This includes the Group's offering addressing Enterprise Risks: cybersecurity, anti-bribery and business continuity; in the field of cybersecurity, Bureau Veritas obtained in Q3 2017 the authorization to deliver Information Safety Certification in China. Also, the Group has developed its own referential for Data Privacy ahead of the implementation of the GDPR (General Data Protection Regulation) in May 2018 within the EU.

By geography, Eastern Europe and Latin America delivered a double-digit growth, high single-digit growth was achieved in Asia while the rest of Europe and Americas recorded a mid-single digit pace.

The adjusted operating margin for the year was stable at a healthy 17.1%. This reflects a strong increase in Latam and a decrease in North America due to significant investment while the other regions remained broadly stable.

Outlook: In 2018, the Certification business is expected to deliver a sustained robust growth with a stronger first-half than second-half due to the revised standards transition deadline in September 2018.

CONSUMER PRODUCTS

Revenue increased by 6.6% on a constant currency basis, of which 4.7% was organic, with a solid performance across nearly all services categories. Q4 2017 revenue was up 6.5% at constant currency, benefiting from a 4.9% increase on an organic basis.

High single-digit growth was achieved in the Electrical & Electronics segment (33% of divisional revenue) led by Automotive and Mobile testing, primarily in Europe and USA. Hardlines performed strongly, up low double-digit organically led by China and strong momentum with key accounts, notably in Europe; on the other side, Toys remained under structural pressure with a single-digit decline for the full-year although stabilization was achieved in Q4.

Lastly, Softlines (36%) grew in line with the divisional average in the context of a challenging environment with traditional retailers. This supports the Group's strategy of targeting mega-vendors and mid-tier accounts. North Asia and South East Asia was the region that reported the highest growth. China's domestic market contributed to the performance, with the Automotive sector spearheading growth.

The acquisition of Siemic early in 2017 enhanced Bureau Veritas' presence in the SmartWorld and Automotive sectors both in China and in the USA. Moving forward, the Group will leverage its homologation testing business in China (VEO acquisition) and expand the platform in Japan (IPS Tokai).

The adjusted operating margin for the year improved by 30 basis points to a strong 24.7% as margin initiatives (cost management/LEAN) more than offset price pressure and negative mix. 

Outlook: In 2018, the Group expects mid-single digit growth, similar to 2017, reflecting strong momentum in Electrical & Electronics supported by SmartWorld and Automotive initiatives as well as for Hardlines helped notably by stabilization in the toys sub-segment.

Full-year results will be presented on Thursday, March 1, 2018, at 3:00 p.m. (Paris time).
A video conference will be webcast live. Please connect to:  Link to video conference
The presentation slides will be available on: http://finance.bureauveritas.com
All supporting documents will be available on the website.

April 26, 2018:            Q1 2018 trading update
May 15, 2018:            Shareholders' meeting
July 26, 2018:             H1 2018 results
October 25, 2018:      Q3 2018 trading update

This press release (including the appendices) contains forward-looking statements, which are based on current plans and forecasts of Bureau Veritas' management. Such forward-looking statements are by their nature subject to a number of important risk and uncertainty factors such as those described in the registration document filed by Bureau Veritas with the French Financial Markets Authority that could cause actual results to differ from the plans, objectives and expectations expressed in such forward-looking statements. These forward-looking statements speak only as of the date on which they are made, and Bureau Veritas undertakes no obligation to update or revise any of them, whether as a result of new information, future events or otherwise, according to applicable regulations.

Extracts from the full-year consolidated financial statements audited and approved on
February 28, 2018 by the Board of Directors. The audit procedures for the full-year accounts have been undertaken and the Statutory Auditor's report has been published.