• BUREAU VERITAS - Early impact of the new LEAP | 28 strategy boosting revenue and improving margins in the first half; 2024 revenue outlook upgraded

    Источник: Nasdaq GlobeNewswire / 25 июл 2024 11:45:00   America/New_York

    PRESS RELEASE

    Neuilly-sur-Seine, France – July 25, 2024

    Early impact of the new LEAP | 28 strategy boosting revenue and improving margins1 in the first half; 2024 revenue outlook upgraded

    H1 2024 Key figures2

    • Revenue of EUR 3,021.7 million in the first half of 2024, up 4.0% year on year and up 9.2% organically (including 10.4% in the second quarter)
    • Adjusted operating profit of EUR 451.9 million, up 4.1% versus EUR 434.2 million in H1 2023, representing an adjusted operating margin of 15.0%, up 29 basis points organically year-on-year
    • Operating profit of EUR 388.5 million, up 4.2% versus EUR 372.9 million in H1 2023
    • Adjusted net profit of EUR 288.3 million, up 4.3% versus EUR 276.3 million in H1 2023
    • Attributable net profit of EUR 234.3 million, up 0.8% versus EUR 232.5 million in H1 2023
    • Free cash flow of EUR 189.9 million, up 44% year
    • Adjusted net debt/EBITDA ratio kept at a low level of 1.06x as of June 30, 2024, versus 0.95x last year

    H1 2024 Highlights

    • Ongoing execution of the new strategy LEAP | 28, announced on March 20, 2024. The strategy intends to deliver a step change in growth and performance, built around three pillars: Focused Portfolio, Performance-led Execution and an Evolved People model
    • Strong growth recorded in most regions (Americas, Middle East, Africa and Asia-Pacific)
    • Growth momentum maintained for sustainability services across the entire portfolio
    • Acquisition of four bolt-on companies for a total cumulated annualized revenue of c. EUR 41 million in line with the LEAP | 28 portfolio strategy of creating new strongholds in i) Cybersecurity (one acquisition); ii) Consumer Products Services Technology (three acquisitions)
    • Completion of the EUR 200 million share buyback program (c. 1.6% of the Group’s shares) announced in March at the Capital Markets Day. The program was executed in two steps (phase one through the Wendel Group market placement and phase two directly on the market)
    • Inaugural rated issuance of a EUR 500 million bond following the assignment of the first long-term A3 credit rating for Bureau Veritas (with a “stable” outlook) delivered by Moody’s

    2024 Outlook upgraded

    Leveraging a healthy and growing sales pipeline, high customer demand for ‘new economy services’ and strong underlying market growth, Bureau Veritas now expects to deliver for the full year 2024:

    • High single-digit organic revenue growth (from mid-to-high single-digit previously).
    • Improvement in adjusted operating margin at constant exchange rates.
    • Strong cash flow, with a cash conversion3 above 90%.

    The Group expects H2 organic revenue growth to be broadly in line with H1.

         

    Hinda Gharbi, Chief Executive Officer, commented:

    “In the first half of the year, we kick started the execution of our LEAP I 28 strategy which was launched at the end of March 2024. Our H1 results confirm our commitment to a step change in growth and returns with organic growth of 9.2%, a solid organic margin improvement of 29 basis points and EPS growth of 16% at constant currency. I thank all my colleagues around the world for these excellent results. We are also actively managing our portfolio through an accelerated M&A program with four acquisitions completed since the beginning of the year. In addition, we have completed our EUR 200 million share buyback program announced in March 2024. Finally, in light of our strong first half performance, our robust backlog and considering our focused operational execution, we are upgrading our revenue outlook for 2024.”
    H1 2024 KEY FIGURES
    The Board of Directors of Bureau Veritas met on July 25, 2024, and approved the financial statements for the first half of 2024 (H1 2024). The main consolidated financial items are:

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE CONSTANT CURRENCY
    Revenue 3,021.7 2,904.2 +4.0% +9.3%
    Adjusted operating profit(a) 451.9 434.2 +4.1% +11.6%
    Adjusted operating margin(a) 15.0% 15.0% (0)bps +33bps
    Operating profit 388.5 372.9 +4.2% +12.9%
    Adjusted net profit(a) 288.3    276.3 +4.3% +16.1%
    Attributable net profit 234.3 232.5 +0.8% +14.5%
    Adjusted EPS(a) 0.64 0.61 +4.5% +16.3%
    EPS 0.52 0.51 +0.9% +14.7%
    Operating cash-flow 262.4 222.1 +18.1% +32.6%
    Free cash flow(a) 189.9 131.9 +44.0% +65.0%
    Adjusted net financial debt(a) 1,112.2               930.8 +19.5%  
    (a) Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 8 of this press release

    H1 2024 HIGHLIGHTS

    • Strong organic revenue growth across the board throughout the first half

    Group revenue in the first half of 2024 increased by 9.2% organically compared to the first half of 2023, including 10.4% in the second quarter, benefiting from robust underlying trends across businesses and geographies.

    This is reflected by business as follows:

    • Over a third of the portfolio (Marine & Offshore, Industry, and Certification) achieved robust double-digit organic revenue growth in the first half, ranging from 14.7% to 17.5%. These divisions benefited from sustained trends in decarbonization and the energy transition, particularly for Marine & Offshore and Industry. Additionally, the Certification segment experienced strong demand for sustainability and ESG-driven services.
    • An eighth of the portfolio (Consumer Products Services) delivered high single-digit organic revenue growth (up 7.3%). The growth was led by the consumer segment in most geographies and by its strategy of geography, sector, and services diversification.
    • Half of the portfolio, including Buildings & Infrastructure and Agri-Food & Commodities, achieved mid-single-digit organic revenue growth (up 4.3% and 4.6% respectively).

      • Solid financial position

    At the end of June 2024, the Group's adjusted net financial debt increased compared to the level as of December 31, 2023, as a result of the use of cash and cash equivalents linked to the EUR 200 million share buyback program executed in Q2. The Group has a solid financial structure with most of its maturities beyond 2026.

    Bureau Veritas had EUR 1.5 billion in available cash and cash equivalents, and EUR 600 million in undrawn committed credit lines as of June 30, 2024. The adjusted net financial debt/EBITDA ratio was maintained at a low level of 1.06x (from 0.95x last year).

    The average maturity of the Group’s financial debt was 4.9 years, with a blended average cost of funds over the half year of 2.9% (excluding the impact of IFRS 16), compared to 2.7% at December 31, 2023.

    • Bureau Veritas shareholders approved the distribution of a dividend for the 2023 financial year

    At the Bureau Veritas Annual Shareholders’ Meeting, shareholders approved the distribution of a dividend of EUR 0.83 per share for the 2023 financial year (3rd resolution, approved at 99.99%), paid in cash on July 4, 2024.

    • 2024 share buyback program

    The Group executed the EUR 200 million share buyback program announced on March 20, 2024, as follows:

    • an acquisition of c.   0.8% of the Group’s shares or the equivalent of EUR 100 million on April 5, 2024, completed under the Wendel placement.
    • an additional acquisition of the remaining EUR 100 million, completed by the Group through the market in May and June 2024, of an additional c. 0.8% of its shares.

    As of June 30, 2024, the entire program had therefore been completed.

    In accordance with the purpose of the share buyback program approved by the Annual Shareholders’ Meeting, the shares bought back will be used for cancellation purposes and for any other purposes authorized by the Company’s shareholders at the Annual Shareholders’ Meeting of June 22, 2023.

    • First A3 long-term credit rating by Moody’s and inaugural A3 rated bond issuance of EUR 500 million with a May 2036 maturity

    On April 24, 2024, Bureau Veritas announced that it had been assigned its first long-term credit rating of A3 by Moody’s, with a “stable” outlook. This long-term credit rating will help Bureau Veritas in further diversifying its sources of funding, gaining enhanced access to capital markets, and managing debt maturities in line with the Group’s strategy. The full rating report is available on moodys.com.

    Subsequently, on May 16, 2024, the Group announced the successful completion of a EUR 500 million A3 rated new bond issuance maturing in May 2036 and carrying a coupon of 3.5%. The final orderbook amounted to more than EUR 1.5 billion, which represents three times the targeted amount. Such a high level of oversubscription enabled Bureau Veritas to price with a final spread much below initial price indications. This underlines the strong confidence of investors in Bureau Veritas’ business model as well as the quality of its credit profile.

    This issuance allows Bureau Veritas to seize attractive market conditions for general corporate purposes, including the refinancing of its bond maturing in January 2025, thereby lengthening the average maturity of its debt.

    FOCUSED PORTFOLIO

    In line with the LEAP | 28 strategy of active portfolio management and to focus the portfolio on market leadership positions, Bureau Veritas has activated an M&A program to develop new market strongholds:

    • in Cybersecurity: in July 2024, the Group signed an agreement to acquire Security Innovation, a US-based player specialized in software security services focused on software testing, SDLC advisory (Secure Software Development Lifecycle) and training. It realized revenues of c. EUR 21 million in 2023.
    • in Consumer Technology Testing: the Group signed definitive agreements to acquire three players in Asia. They will expand its position in testing and certification services for the Electrical and Electronics consumer products segment. The acquired companies’ revenue was a combined c. EUR 20 million in 2023.
      ANNUALIZED REVENUE COUNTRY/

    AREA     		SIGNING DATE FIELD OF EXPERTISE
    Cybersecurity  
    Security Innovation EUR 21m USA July

    2024     		Software security services company focused on software testing, SDLC advisory & training
    Consumer Products Services
    OneTech Corp. EUR 12m South Korea March 2024 Testing and certification services for Electrical and Electronics consumer products
    Kostec Co., Ltd

          		EUR 5m South Korea March 2024 Testing and certification services for Electrical and Electronics consumer products
    Hi Physix Laboratory India Pvt. EUR 3m India March 2024 Electrical and electronics products testing and certification services laboratory

    For more information, the press release is available by clicking here.
    As part of its active portfolio management strategy, the Group signed an agreement for the divestment of a non-core technical supervision business on construction projects in China in June 2024. This business represents less than EUR 30 million in annualized revenue.

    CORPORATE SOCIAL RESPONSIBILITY COMMITMENTS

    • Corporate Social Responsibility (CSR) key indicators
      UNITED NATIONS’
    SDGS     		H1 2024  

    2023     		2028
    TARGET
    ENVIRONMENT / NATURAL CAPITAL        
    CO2 emissions (Scopes 1 & 2, 1,000 tons)4 #13 147 149 107
    SOCIAL & HUMAN CAPITAL        
    Total Accident Rate (TAR)5 #3 0.25 0.25 0.23
    Gender balance in senior leadership (EC-II)6 #5 28.4% 29.3% 36%
    Number of learning hours per employee (per year)7 #8 13.9 36.1 40.0
    GOVERNANCE        
    Proportion of employees trained to the Code of Ethics #16 98.8% 97.4% 99.0%
    • Bureau Veritas joins the United Nations Global Compact

    On February 26, 2024, Bureau Veritas announced that it had joined the United Nations Global Compact, the world’s largest corporate social responsibility (CSR) initiative. With this move, the Group confirms its commitment to abiding by the Ten Principles of the voluntary initiative, which seeks to advance universal principles on human rights, labor, the environment, and anti-corruption.

    • Strong recognition by non-financial rating agencies

    On March 7, 2024, the Group was ranked first in its category by Morningstar Sustainalytics. With a 9.1 rating, the Group ranks first in the ‘Research and Consulting’ category out of 72 companies and is now classified in the “Negligible risk” category.

    • 2024 Transparency Awards

    On July 4, 2024, Bureau Veritas was awarded the 2024 Transparency Award by Labrador in the "CAC Large 60" category. This award acknowledges the CAC Large 60 company with the highest score across 337 evaluation criteria from three public information sources: the Universal Registration Document, the Notice of Meeting for the Annual Shareholders' Meeting and the company website. In addition, the Group made remarkable progress in the overall ranking of the most transparent companies, coming 3rd out of the 121 companies evaluated this year.

    OPERATIONAL APPOINTMENTS

    • Khurram Majeed appointed Executive Vice-President, Commodities, Industry and Facilities, Middle East, Caspian and Africa

    On April 1, 2024, Khurram Majeed became Executive Vice-President, Commodities, Industry and Facilities, for the Middle East, Caspian and Africa. With this role, the Group aims to leverage the full potential of the growing market opportunities in this region. This is a dynamic region undergoing several developments in natural resources, construction and industrial sectors. This new regional organization will also allow Bureau Veritas to strengthen its customer intimacy, to scale solutions faster and to increase resource utilization.

    For more information, the press release is available by clicking here.

    • Maria Lorente Fraguas to be appointed Executive Vice President and Chief People Officer

    On July 25, 2024, the Group announces the appointment of Maria Lorente Fraguas as Executive Vice President and Chief People Officer, effective October 1, 2024.

    As Bureau Veritas embarks on a new journey with the recent launch of its strategy LEAP I 28, this appointment will play a key role in evolving the Group’s people model, ensuring the development of new strategic skills and developing new ways of working through tech augmentation.

    Maria Lorente Fraguas will be a member of the Group Executive Committee. She succeeds Kathryn Dolan who decided to pursue career opportunities outside Bureau Veritas.

    2024 OUTLOOK UPGRADED

    Leveraging a healthy and growing sales pipeline, high customer demand for ‘new economy services’ and strong underlying market growth, Bureau Veritas now expects to deliver for the full year 2024:

    • High single-digit organic revenue growth (from mid-to-high single-digit previously).
    • Improvement in adjusted operating margin at constant exchange rates.
    • Strong cash flow, with a cash conversion8 above 90%.

    The Group expects H2 organic revenue growth to be broadly in line with H1.

    LEAP | 28 STRATEGY

    On March 20, 2024, Bureau Veritas announced its new strategy, LEAP | 28, with the following ambitions:

    2024-2028  
    GROWTH CAGR High single-digit total revenue growth9
    With: Organic: mid-to-high single-digit
    And: M&A acceleration and portfolio high-grading
    MARGIN Consistent adjusted operating margin improvement8
    EPS CAGR8 + DIVIDEND YIELD Double-digit returns
    CASH Strong cash conversion10: above 90%

    Over the period of 2024-2028, the use of Free Cash Flow generated from the Group’s operations will be balanced between Capital Expenditure (Capex), Mergers & Acquisitions (M&A) and shareholder returns (dividends):

    ASSUMPTIONS  
    CAPEX Around 2.5%-3.0% of Group revenue
    M&A M&A acceleration
    DIVIDEND Pay-out of 65% of Adjusted Net Profit
    LEVERAGE Between 1.0x-2.0x by 2028

    ANALYSIS OF THE GROUP'S RESULTS AND FINANCIAL POSITION

    • Revenue up 4.0% year on year (up 9.2% on an organic basis)

    Revenue in the first half of 2024 amounted to EUR 3,021.7 million, a 4.0% increase compared to H1 2023.

    The organic increase was 9.2% compared to H1 2023 (including 10.4% in the second quarter of 2024) benefiting from solid underlying trends across most businesses and geographies.

    Three businesses delivered very strong organic growth: Marine & Offshore, up 14.7%, Industry, up 17.5%, and Certification, up 16.0%. Consumer Products Services further recovered, up 7.3% organically in the first half (including 8.3% in the second quarter) while both Agri Food & Commodities and Buildings & Infrastructure grew mid-single digits organically, both showing sequential improvement in the second quarter.

    By geography, growth in the Americas was strong (27% of revenue; up 10.3% organically), led by a double-digit increase in Latin America and high single-digit growth in Canada. Europe (35% of revenue; up 5.1% organically) benefited from high activity levels in Southern and Eastern parts of the continent. Business in Asia-Pacific (28% of revenue; up 8.7% organically) accelerated in the second quarter (up 10.3% organically) led by China, and thanks to sustained double-digit growth essentially for Australia, India and Vietnam. Finally, Africa and the Middle East were amongst the best performing regions (10% of revenue; up 23.5% organically), supported by Buildings & Infrastructure and energy projects in the Middle East.

    The scope effect was a positive 0.1%, reflecting bolt-on acquisitions realized in the past few quarters and offset by the impact of a non-core disposal last year.

    Currency fluctuations had a negative impact of 5.3% (including a negative impact of 5.0% in Q2), mainly due to the strength of the euro against most currencies.

    • Adjusted operating profit up 4.1% to EUR 451.9 million (organic margin up 29 bps)

    First half adjusted operating profit increased by 4.1% to EUR 451.9 million. This represents an adjusted operating margin of 15.0% stable compared to the first half of 2023. Organically, the Group’s margin increased by 29 basis points year on year to 15.3% while scope had a slight positive impact of 4bps. Foreign exchange trends were a negative impact of 33bps on the Group’s margin due to the strength of the euro against other currencies.

    CHANGE IN ADJUSTED OPERATING MARGIN  
    IN PERCENTAGE AND BASIS POINTS  
    H1 2023 adjusted operating margin 15.0%
    Organic change +29bps
    Organic adjusted operating margin 15.3%
    Scope +4bps
    Constant currency adjusted operating margin 15.3%
    Currency (33)bps
    H1 2024 adjusted operating margin 15.0%

    The organic adjusted operating margin improved by 29 basis points with revenue growth and operating leverage delivering higher margins in Marine & Offshore, Industry, Consumer Products Services and Certification, partly offsetting lower margins in Agri-Food & Commodities and Buildings & Infrastructure.

    Other adjustment items slightly increased to EUR 63.4 million versus EUR 61.3 million in the first half of 2023, and comprised:

    • EUR 21.5 million in amortization of intangible assets resulting from acquisitions (from EUR 21.1 million in H1 2023).
    • EUR 1.3 million in write-offs of non-current assets mainly linked to the commodities-related activities.
    • EUR 7.8 million in restructuring costs, relating chiefly to Consumer Products Services and commodities-related activities (compared to EUR 18.6 million in H1 2023).
    • EUR 32.8 million in net losses on disposals and acquisitions (net loss of EUR 0.2 million in H1 2023), mainly linked to the ongoing divestment of non-core B&I activities in China.

    Operating profit totaled EUR 388.5 million, up 4.2% compared to EUR 372.9 million in the first half of 2023.

    • Adjusted EPS of EUR 0.64, up 4.5% year on year and 16.3% at constant currency

    Net financial expense amounted to EUR 25.6 million in the first half of 2024, compared to EUR 15.2 million in the same period one year earlier.

    The improvement in net finance costs to EUR 19.8 million in H1 2024 (compared to EUR 24.6 million in H1 2023) is attributable to the impact of the redemption of EUR 500 million in September 2023 of the bond program issued in 2016 partially offset by a bond program of the same amount put in place in mid-2024.

    In H1 2024, the Group recorded higher unfavorable exchange rate effects compared to the previous year, with a loss of EUR 5.8 million (compared to a gain of EUR 9.4 million in the first half of 2023).

    The interest cost on pension plans amounted to a negative EUR 1.5 million in H1 2024, stable compared to H1 2023.

    Consolidated income tax expense stood at EUR 115.9 million for H1 2024, compared to EUR 113.2 million for H1 2023.

    This represents an effective tax rate (ETR) of 32.0% for the period, versus 31.6% in H1 2023.

    The adjusted effective tax rate decreased by 1.7 percentage points compared to H1 2023, to 29.0%. It corresponds to the effective tax rate adjusted for the tax effect of adjustment items. The decrease is mainly due to a reduction in the amount of withholding taxes incurred over the period.

    Attributable net profit for the period was EUR 234.3 million, versus EUR 232.5 million in H1 2023.

    Earnings per share (EPS) was EUR 0.52, compared to EUR 0.51 in H1 2023.

    Adjusted attributable net profit totaled EUR 288.3 million in H1 2024, up 4.3% versus EUR 276.3 million in H1 2023.

    Adjusted EPS stood at EUR 0.64, a 4.5% increase versus H1 2023 (EUR 0.61 per share).

    • Strong Free Cash Flow at EUR 189.9 million

    The half-year 2024 operating cash flow increased by 18.1% to EUR 262.4 million versus EUR 222.1 million in H1 2023. This was fueled by a lower working capital requirement outflow of EUR 168.1 million, compared to a EUR 196.2 million outflow in the previous year, despite strong revenue growth delivered in the second quarter (up 10.4% organically).

    The working capital requirement (WCR) stood at EUR 540.6 million as of June 30, 2024, compared to
    EUR 517.6 million as of June 30, 2023. As a percentage of revenue, WCR slightly increased by c.20 basis points to 9.0%, compared to 8.8% at the end of H1 2023.

    Purchases of property, plant and equipment and intangible assets, net of disposals (Net Capex), amounted to EUR 59.9 million in the first half of 2024, down 21.6% compared to the H1 2023 figure of EUR 76.4 million. The Group’s net capex-to-revenue ratio decreased to 2.0% as the growth was mainly fueled by non-laboratory driven activities. It is down 60 basis points from the higher level of H1 23 (2.6%).

    Free cash flow (operating cash flow after tax, interest expenses and capex) was
    EUR 189.9 million, compared to EUR 131.9 million in H1 2023, up 44% year on year. On an organic basis, free cash flow reached EUR 204.1 million.

    CHANGE IN FREE CASH FLOW  
    IN EUR MILLIONS  
    Free cash flow for the period ending on June 30, 2023 131.9
    Organic change +72,2
    Organic free cash flow 204.1
    Scope +13.5
    Free cash flow at constant currency 217.6
    Currency (27.7)
    Free cash flow for the period ending on June 30, 2024 189.9

    As of June 30, 2024, adjusted net financial debt was EUR 1,112.2 million, i.e. 1.06x trailing
    twelve-month EBITDA, compared to 0.92x at December 31, 2023. The increase in adjusted net financial debt of EUR 176 million versus December 31, 2023 (EUR 936.2 million) reflects:

    • free cash flow of EUR 189.9 million.
    • dividend payments totaling EUR 9.1 million corresponding mainly to dividends paid to
      non-controlling interests and withholding taxes on intra-group dividends.
    • acquisitions (net) and repayment of amounts owed to shareholders, accounting for EUR 76.9 million.
    • net share buyback totaling EUR 199.1 million, as part of the Group’s LEAP | 28 strategy
    • lease and interest payments (related to the application of IFRS 16), accounting for EUR 60.9 million.
    • other items that increased the Group's debt by EUR 19.0 million.

    H1 2024 BUSINESS REVIEW

    MARINE & OFFSHORE

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 251.3 228.6 +9.9% +14.7% - (4.8)%
    Adjusted Operating Profit 61.6 56.5 +9.1%      
    Adjusted Operating Margin 24.5% 24.7% (20)bps +88bps - (108)bps

    Marine & Offshore was among the strongest performing businesses within the Group’s portfolio in the first half of 2024 with organic growth of 14.7% (including 15.8% in the second quarter), with the following trends:

    • A strong double-digit increase in New Construction (41% of divisional revenue), in a buoyant construction market, supported by the conversion of the acceleration of new orders in Q1 and Q2 despite some capacity constraints in shipyards.
    • Double-digit growth in Core In-service activity (46% of divisional revenue), benefiting from volume growth led by the increase in the number of classed vessels, coupled with the retrofitting/upgrading activities to address the new coming environmental regulations. On June 30, 2024, the fleet classed by Bureau Veritas included 11,894 ships, up 2.7% year on year and representing 151.7 million of Gross Register Tonnage (GRT).
    • Mid-single-digit growth in Services (13% of divisional revenue, including Offshore), benefiting from good commercial development of non-class services, including consulting services around ship energy efficiency.

    The division continues to benefit from multi-year growth momentum as the maritime industry decarbonizes, renews its fleet and becomes more energy efficient. The Group secured 7.4 million gross tons at the end of June 2024, bringing the order book to 26.0 million gross tons, up 27.5% compared to 20.4 million gross tons at end-June 2023. This is driven by LNG fueled ships and specialized vessels.

    The adjusted operating margin for the half year was maintained at a healthy 24.5% on a reported basis compared to 24.7% in H1 2023, negatively impacted by foreign exchange effects (108 basis points). Organically, it rose by 88 basis points, benefiting from pricing, operating leverage and a positive mix.

    Sustainability achievements

    During the second quarter of 2024, Bureau Veritas issued an Approval in Principle (AiP) to China Ship Design & Research Centre (CSDC) for its latest ammonia-fueled medium-range chemical tanker design, leading the sector towards a greener and more sustainable future.

    AGRI-FOOD & COMMODITIES

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 613.9 611.5 +0.4% +4.6% - (4.2)%
    Adjusted Operating Profit 75.6 82.3 (8.2)%      
    Adjusted Operating Margin 12.3% 13.5% (115)bps (90)bps - (25)bps

    The Agri-Food & Commodities business delivered 6.0% organic revenue growth in the second quarter of 2024, thus achieving 4.6% revenue growth on an organic basis in the first half of the year.

    The Oil & Petrochemicals segment (O&P, 32% of divisional revenue) recorded a high-single-digit increase in organic revenue in the first half of the year, with the second quarter growth primarily stemming from focused business development with key accounts in North America and the Middle East. Strong momentum was also maintained in Europe, where the Group saw market share gains. Asian activities are gradually recovering, with favorable perspectives in the non-trade activities such as Oil Condition Monitoring-related services.

    After a stable performance in the first quarter, the Metals & Minerals segment (M&M, 31% of divisional revenue) showed signs of recovery in the second quarter with low–single-digit organic revenue growth. The Upstream business (which represents more than two-thirds of the divisional revenue) has been facing a slow start to the year on the back of a challenging macro environment. Early signs of recovery have been observed with high gold prices stimulating a pickup in exploration drillings. The Group continued to execute its on-site laboratory development strategy, with double-digit growth achieved in the first half and new contracts secured in Chile and West Africa. Trade activities delivered mid-to-high single-digit growth in the first half, with good traction in the second quarter especially in China and India.

    In the first half of 2024, Agri-Food (23% of divisional revenue) posted high–single-digit growth on an organic basis. The Agri sub-segment was boosted by growth in both Upstream and Trade activities. The growth was particularly strong in the Middle East in the second quarter, owing to sustained business development and key contract wins in many countries. Additionally, the Americas benefited from excellent crop yields despite floods in Brazil. The Food business grew mid-single digits organically, owing to the continued recovery of the Australian activities from the diversification strategy and price increases.

    Government services (14% of the divisional revenue) delivered a stable year –on year organic growth in the first half of the year, due mainly to unfavorable comparables and expected contract cycles. These were partly offset by the good performance of Verification of Conformity contracts in some Middle East countries in the second quarter of 2024, with a promising pipeline of new opportunities for Q3 onwards.

    The adjusted operating margin for the Agri-Food & Commodities business declined to 12.3%, down 115 basis points compared to last year. This was attributed to a negative business mix effect (due to the soft performance of Metals & Minerals) and negative forex impact.

    Sustainability achievements

    In the first half of 2024, Bureau Veritas delivered several sustainability services to its customers, ranging from services around fugitive emissions commodities, and Green Objects such as sustainable aviation fuel or traceability for wood products.

    INDUSTRY

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 624.0 617.4 +1.1% +17.5% (2.4)% (14.0)%
    Adjusted Operating Profit 79.3 76.1 +4.2%      
    Adjusted Operating Margin 12.7% 12.3% +38bps +92bps +14bps (68)bps

    Industry achieved a strong organic revenue increase of 17.5% in the first half of 2024, including 18.2% growth in the second quarter led by most businesses and geographies.

    Customer spending remains strong in all energy sectors, driven by energy security and transition needs. Across all industrial sectors, the Group sees good growth momentum.

    By market, the stability in Power & Utilities (13% of divisional revenue) continued to reflect the business transformation undertaken in Latin America, where the decision was made last year to exit low-profitability contracts. In Europe, the stable growth in the nuclear power generation reflects the ramp-up of QA/QC inspection projects in the UK and France offsetting the completion of the French EPR (European pressurized reactor) Flamanville 3 project.

    Within Power & Utilities, Renewable Power Generation activities (solar, wind, hydrogen) continued their growth momentum with double-digit organic performance in most geographies. The US led the growth with the execution of a large number of solar projects. China Renewables spending remains strong driving a sustained growth dynamic.

    In Oil & Gas (32% of divisional revenue), activity remained strong, with double digits organically in the first half. Both Capex and Opex services increased substantially across most geographies as they continued to capitalize on a favorable investment cycle, the Group’s recognized expertise and its global capabilities. The growth was broad across the United States, Latin America, the Middle East, and Asia.

    Industry Products Certification (18% of divisional revenue) grew double-digits organically. This growth was driven by price increases and increased activity in Pressure & Welding and Electromechanical & Advanced Technologies sub-segments. Growth was particularly strong in the Asia Pacific and Middle East regions.

    Elsewhere, the Environmental Testing business (10% of divisional revenue) grew high-single digits organically. In Canada, the remediation works benefited from favorable weather conditions during the first quarter, further bolstering the segment's performance.

    Industry’s adjusted operating margin for the half year increased by 38 basis points to 12.7%. Organically, it rose by 92 basis points benefiting from operational leverage and more selectivity when it comes to profitability.

    Sustainability achievements

    In the second quarter of 2024, the Group was awarded a contract in California (USA) to deliver Project Management services for the removal of obsolete wind turbine generators and the installation with 25 new ones as well as a new battery energy storage system. The Group was also selected for an offshore wind farm certification in Taiwan for a large French electricity producer. Lastly, the Group is expected to deliver a third-party evaluation of two hydrogen locomotive projects, capable of supplying power in the absence of a catenary for a large rail manufacturer.

    BUILDINGS & INFRASTRUCTURE

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 896.7 869.7 +3.1% +4.3% - (1.2)%
    Adjusted Operating Profit 104.3 106.4 (2.0)%      
    Adjusted Operating Margin 11.6% 12.2% (60)bps (53)bps - (7)bps

    The Buildings & Infrastructure (B&I) business recorded organic revenue growth of 4.3% in the first half (including 4.9% growth in the second quarter), with growth in most geographies.

    During the period, the construction-related activities outperformed the building-in service activity.

    The Americas region (27% of divisional revenue) recorded solid growth with noticeable improvement in the second quarter. The US platform delivered mid-single-digit organic revenue growth and continued to capitalize on its diversified portfolio of activities. The data center commissioning business maintained strong double-digit organic growth thanks to an uplift in demand for its services from both new and existing clients in most regions globally, combined with pricing initiatives. This is due to the ongoing growth in data generation, cloud computing and AI. Double-digit growth was also achieved in both Opex-related services and the Capex-infrastructure business. Code compliance maintained robust activity thanks to housing expansion in central and east regions. In Latin America, the strong growth in both Brazil and Chile was mitigated by contracts termination in Argentina.

    Business in Europe (50% of divisional revenue) was robust overall. Most countries contributed to the growth, with a leading Italy's performance from continued infrastructure spending of the National Recovery and Resilience Plan (NRRP). France continues to grow with Capex-related activities outperforming thanks to the group’s wins in infrastructure and public works (including the 2024 Paris Olympic Games), which largely offset the declining residential market segment. Opex services, representing three quarters of the country’s revenue, was resilient and grew from positive pricing and an uptake of new services.

    The Asia Pacific region (19% of divisional revenue) achieved a high single-digit organic revenue increase led by high growth in South and Southeastern Asian countries and Australia. China had a stable performance driven by energy-related construction activity. Weak public spending remains a constraint for growth in transport infrastructure.

    Lastly, in the Middle East & Africa region (4% of divisional revenue), the Group maintained its strong momentum, delivering double-digit organic revenue growth primarily driven by the performance in Saudi Arabia, where it benefited from the development of numerous megaprojects.

    Adjusted operating margin for the half year slightly eroded by 60 basis points to 11.6% from 12.2% in the prior year. This reflects the impact of low activity in China which was not fully offset by the US improvement.

    Sustainability achievements

    In the second quarter of 2024, in France, the Group signed an exclusive contract with the French National Housing Agency / ANAH (Agence Nationale de l'Habitat) to deliver energy performance and efficiency checks on projects financed under the French Energy management subsidies scheme, "Ma Prime Rénov’”. The Group was also selected for a multi-year program by the California Olympics Committee to provide project management services for the rollout of fast EV charging stations.

    CERTIFICATION

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 255.3 227.9 +12.0% +16.0% - (4.0)%
    Adjusted Operating Profit 50.0 41.7 +19.9%      
    Adjusted Operating Margin 19.6% 18.3% +128bps +154bps - (26)bps

    With another stellar performance in the second quarter of 2024, the Certification business posted a strong double-digit organic growth in the first half of the year at 16.0%, with a strong performance across all geographies. This was led by increasing volumes and robust price escalations.

    QHSE & Specialized Schemes solutions (50% of the divisional revenue) posted double-digit growth in the first half of the year, with strong traction from the recertification year occurring for several schemes across different industries. The certification market benefits from a dynamic of innovation in response to consumers’ needs for customized and voluntary schemes. As an example, Bureau Veritas recently delivered the “Origine France Garantie” label for two car models produced by the French car manufacturer Renault, making them the first full electric vehicles to obtain this certification.

    Sustainability-related solutions & Digital (Cyber) certification activities (31% of divisional revenue) also recorded very strong double-digit organic growth, with excellent ongoing momentum around carbon services. With double-digit growth in the second quarter of the year, the suite of services and solutions delivered by Bureau Veritas on forestry-related topics is developing strongly. This performance is driven by market share gains, primarily in the US and in China, as well as a favorable regulatory environment. For example, the soon-to-be implemented EUDR regulation is creating new business opportunities at the European level. Finally, cybersecurity certification and assurance services are still benefiting from excellent market traction driving double-digit growth in the first half of the year.

    Other solutions, including Training (19% of the divisional revenue) recorded broadly stable revenue growth in the first half of 2024.

    The adjusted operating margin for the half year strongly increased by 128 basis points to 19.6%, compared to 18.3% in the prior year. This reflects sound operational leverage and a favorable business mix.

    Sustainability achievements

    In the first half of 2024, Bureau Veritas continued to grow its assurance of sustainability reporting activities. In France, it helped an IT services provider to prepare for CSRD reporting, and to identify material sustainability issues associated with the firm’s activities, thus measuring gaps and developing mitigation plans for compliance. The Group was also selected by a global dairy products company to carry out ethical trade and responsible sourcing audits in 125 sites in Mexico.

    CONSUMER PRODUCTS SERVICES

    IN EUR MILLIONS H1 2024 H1 2023 CHANGE ORGANIC SCOPE CURRENCY
    Revenue 380.5 349.1 +9.0% +7.3% +4.9% (3.2)%
    Adjusted Operating Profit 81.1 71.2 +13.9%      
    Adjusted Operating Margin 21.3% 20.4% +92bps +134bps (31)bps (11)bps

    The Consumer Products Services division delivered a 7.3% organic growth performance over the first half of 2024, (including 8.3% in the second quarter), led by all sub-segments excluding Technology.

    By geography, Asia showed good improvement led by China and Southeast and South Asian countries such as Vietnam and Bangladesh. The Americas also continued to benefit from the geographical, sector and services diversification strategy.

    The Softlines, Hardlines & Toys segment (accounting for 48% of divisional revenue) delivered double-digit organic growth in the first half of 2024. This growth was driven by a recovery in volumes, which was attributed to the end of destocking and early shipments in response to logistics delays from the Red Sea shipping disruption. The growth was led by China and South East Asian countries exporting to the American market. The Hardlines business was particularly strong, benefiting from a global recovery and an increase in Stock Keeping Units (SKUs).

    Healthcare (including Beauty and Household) (8% of divisional revenue) posted solid double-digit organic growth during the first half of the year led by the US operations. This was driven by the performance of global accounts, particularly the recently acquired Advanced Testing Laboratory (ATL) which benefited from pricing initiatives and an expanded scope of services.

    Supply Chain & Sustainability services (14% of divisional revenue) delivered a very good double-digit performance with CSR audits and transition services leading, thanks to a global strong momentum around social audits and green claim verification services.

    Technology (30% of divisional revenue) saw a mid-single-digit contraction in the first half of 2024, still affected by a global decrease in demand for electronics, wireless products and new mobility equipment (electrical vehicles, notably in China). The second quarter showed an increase in the development and manufacturing of servers’ technologies to respond to AI market needs. Additionally, electrical appliances performed well and benefited from improved consumer spending.

    In line with LEAP I 28 strategy, the Group continued to invest in the new stronghold of Consumer Technology, with the closing of three acquisitions - OneTech Corp., Kostec Co. in Korea and Hi Physix Laboratory in India - to bolster its presence in Electrical and Electronics consumer products testing in the key markets of South Korea and India.

    Adjusted operating margin for the half year increased by 92 basis points to 21.3% from 20.4% in the prior year. Organically it rose by 134 basis points thanks to good operational leverage, offset by a negative scope (31bps) and limited forex effects.

    Sustainability achievements

    During the first half of 2024, Transition Services continued to grow as the Group accompanied clients’ ESG transformation. Services provided covered a wide range, including traceability Audits, Responsible Chemicals Testing, Materials Testing and Eco-Design to name a few. The Group was also awarded a contract with a DIY company in Portugal to deliver Sustainable Claims Certification services. It also secured several chemical RSL (Restricted Substances List) testing programs for different luxury brands.

    PRESENTATION

    2024 & 2025 FINANCIAL CALENDAR

    • Q3 2024 Revenue: October 23, 2024 (post market)
    • FY 2024 Results: February 25, 2025 (pre market)
    • Q1 2025 Revenue: April 24, 2025 (pre market)

      

    ABOUT BUREAU VERITAS
    Bureau Veritas is a world leader in inspection, certification, and laboratory testing services with a powerful purpose: to shape a world of trust by ensuring responsible progress. With a vision to be the preferred partner for customers’ excellence and sustainability, the company innovates to help them navigate change.
    Created in 1828, Bureau Veritas’ 83,000 employees deliver services in 140 countries. The company’s technical experts support customers to address challenges in quality, health and safety, environmental protection, and sustainability.
    Bureau Veritas is listed on Euronext Paris and belongs to the CAC 40 ESG, CAC Next 20, SBF 120 indices and is part of the CAC SBT 1.5° index. Compartment A, ISIN code FR 0006174348, stock symbol: BVI.
    For more information, visit www.bureauveritas.com, and follow us on LinkedIn and X/Twitter.

    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 Universal Registration Document (“Document d’enregistrement universel”) filed by Bureau Veritas with the French Financial Markets Authority (“AMF”) 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.

    APPENDIX 1: Q2 AND H1 2024 REVENUE BY BUSINESS

    IN EUR MILLIONS Q2/H1
    2024     		Q2/H1
    2023     		CHANGE ORGANIC SCOPE CURRENCY
    Marine & Offshore 129.2 115.6    +11.8% +15.8% - (4.0)%
    Agri-Food & Commodities 316.6 308.9    +2.5% +6.0% - (3.5)%
    Industry 328.4 322.4 +1.9% +18.2% (2.3)% (14.0)%
    Buildings & Infrastructure 455.7 437.8    +4.1% +4.9% - (0.8)%
    Certification 137.9 120.9 +14.1% +18.0% - (3.9)%
    Consumer Products 214.4 194.2 +10.4% +8.3% +4.4% (2.3)%
    Total Q2 revenue 1,582.2 1,499.8    +5.5% +10.4% +0.1% (5.0)%
    Marine & Offshore 251.3 228.6 +9.9% +14.7% - (4.8)%
    Agri-Food & Commodities 613.9 611.5 +0.4% +4.6% - (4.2)%
    Industry 624.0 617.4 +1.1% +17.5% (2.4)% (14.0)%
    Buildings & Infrastructure 896.7 869.7    +3.1% +4.3% - (1.2)%
    Certification 255.3 227.9 +12.0% +16.0% - (4.0)%
    Consumer Products 380.5 349.1 +9.0% +7.3% +4.9% (3.2)%
    Total H1 revenue 3,021.7 2,904.2    +4.0% +9.2% +0.1% (5.3)%

    (a) Q2 and H1 2023 figures by business have been restated following a reclassification of activities impacting mainly the Industry and Buildings & Infrastructure businesses (c. €0.9 million in H1)

    APPENDIX 2: HALF-YEAR 2024 REVENUE BY QUARTER

      2024 REVENUE BY QUARTER
    IN EUR MILLIONS Q1 Q2
    Marine & Offshore 122.1 129.2
    Agri-Food & Commodities 297.3 316.6
    Industry 295.6 328.4
    Buildings & Infrastructure 441.0 455.7
    Certification 117.4 137.9
    Consumer Products 166.1 214.4
    Total revenue 1,439.5 1,582.2

    APPENDIX 3: ADJUSTED OPERATING PROFIT AND MARGIN BY BUSINESS


    IN EUR MILLIONS

     

          		ADJUSTED OPERATING PROFIT ADJUSTED OPERATING MARGIN
    H1 2024

          		H1 2023

          		CHANGE
    (%)

          		H1 2024

          		H1 2023

          		CHANGE
    (BASIS POINTS)
    Marine & Offshore 61.6 56.5 +9.1% 24.5% 24.7% (20)
    Agri-Food & Commodities 75.6 82.3 (8.2)% 12.3% 13.5% (115)
    Industry 79.3 76.1 +4.2% 12.7% 12.3% +38
    Buildings & Infrastructure 104.3 106.4 (2.0)% 11.6% 12.2% (60)
    Certification 50.0 41.7 +19.9% 19.6% 18.3% +128
    Consumer Products 81.1 71.2 +13.9% 21.3% 20.4% +92
    Total Group 451.9 434.2 +4.1% +15.0% +15.0% +0

    APPENDIX 4: EXTRACTS FROM THE HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS
    Extracts from the half-year consolidated financial statements audited and approved on July 25, 2024
    by the Board of Directors. The audit procedures for the half-year financial statements have been undertaken and the Statutory Auditors’ report has been published.

    CONSOLIDATED INCOME STATEMENT    
    IN EUR MILLIONS H1 2024 H1 2023
    Revenue 3,021.7 2,904.2
    Service costs rebilled to clients 94.9 88.0
    Revenue and services costs rebilled to clients 3,116.6 2,992.2
    Purchases and external charges (948.8) (916.9)
    Personnel costs (1,598.7) (1,532.6)
    Taxes other than on income (23.3) (29.1)
    Net (additions to)/reversals of provisions (8.4) (11.1)
    Depreciation and amortization (127.2) (135.4)
    Other operating income and expense, net (21.7) 5.8
    Operating profit 388.5 372.9
    Share of profit of equity-accounted companies (0.2) 0.3
    Operating profit after share of profit of equity-accounted companies 388.3 373.2
    Income from cash and cash equivalents 22.6 22.4
    Finance costs, gross (42.4) (47.0)
    Finance costs, net (19.8) (24.6)
    Other financial income and expense, net (5.8) 9.4
    Net financial expense (25.6) (15.2)
    Profit before income tax 362.7 358.0
    Income tax expense (115.9) (113.2)
    Net profit 246.8 244.8
    Non-controlling interests (12.5) (12.3)
    Attributable net profit 234.3 232.5
    Earnings per share (in euros):    
    Basic earnings per share 0.52 0.51
    Diluted earnings per share 0.51 0.51


    CONSOLIDATED STATEMENT OF FINANCIAL POSITION
    IN EUR MILLIONS JUNE 30, 2024 DEC. 31 2023
    Goodwill 2,181.7 2,127.4
    Intangible assets 366.6 360.0
    Property, plant and equipment 418.4 389.0
    Right-of-use assets 372.0 391.5
    Non-current financial assets 99.3 108.9
    Deferred income tax assets 125.9 136.6
    Total non-current assets 3,563.9 3,513.4
    Trade and other receivables 1,664.9 1,584.5
    Contract assets 323.5 325.9
    Current income tax assets 78.5 33.5
    Derivative financial instruments 3.3 4.1
    Other current financial assets 7.1 9.1
    Cash and cash equivalents 1,522.4 1,173.9
    Total current assets 3,599.7 3,131.0
    Assets held for sale 38.0 -
    TOTAL ASSETS 7,201.6 6,644.4
         
    Share capital 54.6 54.5
    Retained earnings and other reserves 1,575.4 1,881.6
    Equity attributable to owners of the Company 1,630.0 1,936.1
    Non-controlling interests 67.8 57.7
    Total equity 1,697.8 1,993.8
    Non-current borrowings and financial debt 2,098.9 2,079.7
    Non-current lease liabilities 302.5 319.7
    Other non-current financial liabilities 59.7 73.7
    Deferred income tax liabilities 89.9 85.0
    Pension plans and other long-term employee benefits 143.8 147.2
    Provisions for other liabilities and charges 71.1 72.2
    Total non-current liabilities 2,765.9 2,777.5
    Trade and other payables 1,178.8 1,273.4
    Contract liabilities 269.0 257.2
    Current income tax liabilities 126.6 98.5
    Current borrowings and financial debt 535.4 31.2
    Current lease liabilities 109.0 107.5
    Derivative financial instruments 3.6 3.3
    Other current financial liabilities 480.1 102.0
    Total current liabilities 2,702.5 1,873.1
    Liabilities held for sale 35.4 -
    TOTAL EQUITY AND LIABILITIES 7,201.6 6,644.4


    CONSOLIDATED STATEMENT OF CASH FLOWS    
    IN EUR MILLIONS H1 2024 H1 2023
    Profit before income tax 362.7 358.0
    Elimination of cash flows from financing and investing activities 7.9 16.1
    Provisions and other non-cash items 53.7 13.2
    Depreciation, amortization and impairment 127.3 135.3
    Movements in working capital requirement attributable to operations (168.1) (196.2)
    Income tax paid (121.1) (104.3)
    Net cash generated from operating activities 262.4 222.1
    Acquisitions of subsidiaries and activities, net of acquired cash (70.0) (14.0)
    Purchases of property, plant and equipment and intangible assets (61.6) (79.8)
    Proceeds from sales of property, plant and equipment and intangible assets 1.7 3.4
    Purchases of non-current financial assets (4.8) (5.2)
    Proceeds from sales of non-current financial assets 4.3 5.1
    Change in loans and advances granted 0.2 1.8
    Net cash used in investing activities (130.2) (88.7)
    Capital increase 12.5 2.9
    Purchases/sales of treasury shares (199.2) (1.1)
    Dividends paid (9.1) (13.3)
    Increase in borrowings and other debt 492.0 -
    Repayment of borrowings and other debt (6.2) (0.1)
    Repayment of amounts owed to shareholders (6.9) (0.2)
    Repayment of lease liabilities and interest (60.9) (63.9)
    Interest paid (12.6) (13.8)
    Net cash generated from/(used in) financing activities 209.6 (89.5)
    Impact of currency translation differences 6.2 (16.5)
    Net increase/(decrease) in cash and cash equivalents 348.0 27.4
    Net cash and cash equivalents at beginning of the period 1,170.1 1,655.7
    Net cash and cash equivalents at end of the period 1,518.1 1,683.1
    o/w cash and cash equivalents 1,522.4 1,687.7
    o/w bank overdrafts (4.3) (4.6)

    APPENDIX 5: BREAKDOWN OF NET FINANCIAL EXPENSE

    NET FINANCIAL EXPENSE    
    IN EUR MILLIONS H1 2024 H1 2023
    Finance costs, net (19.8) (24.6)
    Foreign exchange gains 8.5 14.2
    Interest cost on pension plans (1.5) (1.5)
    Other (12.8) (3.3)
    Net financial expense (25.6) (15.2)

    APPENDIX 6: ALTERNATIVE PERFORMANCE INDICATORS

    ADJUSTED OPERATING PROFIT    
    IN EUR MILLIONS H1 2024 H1 2023
    Operating profit 388.5 372.9
    Amortization of intangible assets resulting from acquisitions 21.5 21.1
    Impairment and retirement of non-current assets 1.3 21.4
    Restructuring costs 7.8 18.6
    Gains and losses on disposals of businesses and other income and expenses relating to acquisitions 32.8 0.2
    Total adjustment items 63.4 61.3
    Adjusted operating profit 451.9 434.2


    CHANGE IN ADJUSTED OPERATING PROFIT  
    IN EUR MILLIONS  
    H1 2023 adjusted operating profit               434.2
    Organic change +49.1
    Organic adjusted operating profit 483.4
    Scope +1.5
    Constant currency adjusted operating profit 484.9
    Currency (32.9)
    H1 2024 adjusted operating profit 451.9


    ADJUSTED EFFECTIVE TAX RATE    
    IN EUR MILLIONS H1 2024 H1 2023
    Profit before income tax 362.7 358.0
    Income tax expense (115.9) (113.2)
    ETR(a) 32.0% 31.6%
    Adjusted ETR(b) 29.0% 30.7%
    (a)   Effective tax rate (ETR) = Income tax expense/Profit before income tax.
    (b)   Adjusted ETR = Income tax expense adjusted for tax effect on adjustment items/Profit before tax and before taking into account adjustment items.


    ATTRIBUTABLE NET PROFIT    
    IN EUR MILLIONS H1 2024 H1 2023
    Attributable net profit 234.3 232.5
    EPS(a) (€ per share) 0.52 0.51
    Adjustment items 63.4 61.3
    Tax impact on adjustment items (7.7) (15.6)
    Non-controlling interest on adjustment items (1.7) (1.9)
    Adjusted attributable net profit 288.3   276.3
    Adjusted EPS(a) (€ per share) 0.64 0.61
    (a) Calculated using the weighted average number of shares: 451,680,634 in H1 2024 and 452,412,873 in H1 2023.


    CHANGE IN ADJUSTED ATTRIBUTABLE NET PROFIT
    IN EUR MILLIONS  
    H1 2023 adjusted attributable net profit 276.3
    Organic change and scope +44.4
    Adjusted attributable net profit at constant currency 320.7
    Currency (32.4)   
    H1 2024 adjusted attributable net profit 288.3   


    FREE CASH FLOW      
    IN EUR MILLIONS H1 2024 H1 2023  
    Net cash generated from operating activities
    (operating cash flow)     		262.4 222.1  
    Net purchases of property, plant and equipment and intangible assets (59.9) (76.4)  
    Interest paid (12.6) (13.8)  
    Free cash flow 189.9 131.9  
    CHANGE IN NET CASH GENERATED FROM OPERATING ACTIVITIES
    IN EUR MILLIONS  
    Net cash generated from operating activities at June 30, 2023 222.1
    Organic change +65.2
    Organic net cash generated from operating activities 287.3
    Scope +7.1
    Net cash generated from operating activities at constant currency 294.4
    Currency (32.0)
    Net cash generated from operating activities at June 30, 2024 262.4


    ADJUSTED NET FINANCIAL DEBT    
    IN EUR MILLIONS JUNE 30, 2024 DEC. 31 2023
    Gross financial debt 2,634.3 2,110.9
    Cash and cash equivalents (1,522.4) (1,173.9)
    Consolidated net financial debt 1,111.9 937.0
    Currency hedging instruments 0.3 (0.8)
    Adjusted net financial debt 1,112.2 936.2

    APPENDIX 7: DEFINITION OF ALTERNATIVE PERFORMANCE INDICATORS AND RECONCILIATION WITH IFRS

    The management process used by Bureau Veritas is based on a series of alternative performance indicators, as presented below. These indicators were defined for the purposes of preparing the Group’s budgets and internal and external reporting. Bureau Veritas considers that these indicators provide additional useful information to financial statement users, enabling them to better understand the Group’s performance, especially its operating performance. Some of these indicators represent benchmarks in the testing, inspection and certification (“TIC”) business and are commonly used and tracked by the financial community. These alternative performance indicators should be seen as complementary to IFRS-compliant indicators and the resulting changes.

    GROWTH

    Total revenue growth

    The total revenue growth percentage measures changes in consolidated revenue between the previous year and the current year. Total revenue growth has three components:

    • organic growth;
    • impact of changes in the scope of consolidation (scope effect);
    • impact of changes in exchange rates (currency effect).

    Organic growth

    The Group internally monitors and publishes “organic” revenue growth, which it considers to be more representative of the Group’s operating performance in each of its business sectors.

    The main measure used to manage and track consolidated revenue growth is like-for-like, also known as organic growth. Determining organic growth enables the Group to monitor trends in its business excluding the impact of currency fluctuations, which are outside of Bureau Veritas’ control, as well as scope effects, which concern new businesses or businesses that no longer form part of the business portfolio. Organic growth is used to monitor the Group’s performance internally.

    Bureau Veritas considers that organic growth provides management and investors with a more comprehensive understanding of its underlying operating performance and current business trends, excluding the impact of acquisitions, divestments (outright divestments as well as the unplanned suspension of operations – in the event of international sanctions, for example) and changes in exchange rates for businesses exposed to foreign exchange volatility, which can mask underlying trends.

    The Group also considers that separately presenting organic revenue generated by its businesses provides management and investors with useful information on trends in its industrial businesses, and enables a more direct comparison with other companies in its industry.

    Organic revenue growth represents the percentage of revenue growth, presented at Group level and for each business, based on a constant scope of consolidation and exchange rates over comparable periods:

    • constant scope of consolidation: data are restated for the impact of changes in the scope of consolidation over a 12-month period;
    • constant exchange rates: data for the current year are restated using exchange rates for the previous year.

    Scope effect

    To establish a meaningful comparison between reporting periods, the impact of changes in the scope of consolidation is determined:

    • for acquisitions carried out in the current year: by deducting from revenue for the current year revenue generated by the acquired businesses in the current year;
    • for acquisitions carried out in the previous year: by deducting from revenue for the current year revenue generated by the acquired businesses in the months in the previous year in which they were not consolidated;
    • for disposals and divestments carried out in the current year: by deducting from revenue for the previous year revenue generated by the disposed and divested businesses in the previous year in the months of the current year in which they were not part of the Group;
    • for disposals and divestments carried out in the previous year: by deducting from revenue for the previous year revenue generated by the disposed and divested businesses in the previous year prior to their disposal/divestment.

    Currency effect

    The currency effect is calculated by translating revenue for the current year at the exchange rates for the previous year.

    ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING MARGIN

    Adjusted operating profit and adjusted operating margin are key indicators used to measure the performance of the business, excluding material items that cannot be considered inherent to the Group’s underlying intrinsic performance owing to their nature. Bureau Veritas considers that these indicators, presented at Group level and for each business, are more representative of the operating performance in its industry.

    Adjusted operating profit

    Adjusted operating profit represents operating profit prior to adjustments for the following:

    • amortization of intangible assets resulting from acquisitions;
    • impairment of goodwill;
    • impairment and retirement of non-current assets;
    • gains and losses on disposals of subsidiaries and businesses (including fair value adjustment when applicable) and other income and expenses relating to acquisitions (fees and costs on acquisitions of businesses, contingent consideration on acquisitions of businesses);
    • restructuring costs.

    When an acquisition is carried out during the financial year, the amortization of the related intangible assets is calculated on a time proportion basis.

    Since a measurement period of 12 months is allowed for determining the fair value of acquired assets and liabilities, amortization of intangible assets in the year of acquisition may, in some cases, be based on a temporary measurement and be subject to minor adjustments in the subsequent reporting period, once the definitive value of the intangible assets is known.

    Organic adjusted operating profit represents operating profit adjusted for scope and currency effects over comparable periods:

    • at constant scope of consolidation: data are restated based on a 12-month period;
    • at constant exchange rates: data for the current year are restated using exchange rates for the previous year.

    The scope and currency effects are calculated using a similar approach to that used for revenue for each component of operating profit and adjusted operating profit.

    Adjusted operating margin

    Adjusted operating margin expressed as a percentage represents adjusted operating profit divided by revenue. Adjusted operating margin can be presented on an organic basis or at constant exchange rates, thereby, in the latter case, providing a view of the Group’s performance excluding the impact of currency fluctuations, which are outside of Bureau Veritas’ control.

    Service costs rebilled to clients, that were previously included under the "Purchases and external charges" line item, are now presented separately, with no impact on operating profit and net profit in the first half of 2024 and 2023.

    ADJUSTED EFFECTIVE TAX RATE

    The effective tax rate (ETR) represents income tax expense divided by the amount of pre-tax profit.

    The adjusted effective tax rate (adjusted ETR) represents income tax expense adjusted for the tax effect on adjustment items divided by pre-tax profit before taking into account the adjustment items (see adjusted operating profit definition).

    ADJUSTED NET PROFIT

    Adjusted attributable net profit

    Adjusted attributable net profit is defined as attributable net profit adjusted for adjustment items (see adjusted operating profit definition) and for the tax effect on adjustment items. Adjusted attributable net profit excludes non-controlling interests in adjustment items and only concerns continuing operations.

    Adjusted attributable net profit can be presented at constant exchange rates, thereby providing a view of the Group’s performance excluding the impact of currency fluctuations, which are outside of Bureau Veritas’ control. The currency effect is calculated by translating the various income statement items for the current year at the exchange rates for the previous year.

    Adjusted attributable net profit per share

    Adjusted attributable net profit per share (adjusted EPS or earnings per share) is defined as adjusted attributable net profit divided by the weighted average number of shares outstanding in the period (excluding own shares held by the Group).

    FREE CASH FLOW

    Free cash flow represents net cash generated from operating activities (operating cash flow), adjusted for the following items:

    • purchases of property, plant and equipment and intangible assets;
    • proceeds from disposals of property, plant and equipment and intangible assets;
    • interest paid.

    Net cash generated from operating activities is shown after income tax paid.

    Organic free cash flow represents free cash flow at constant scope and exchange rates over comparable periods:

    • at constant scope of consolidation: data are restated based on a 12-month period;
    • at constant exchange rates: data for the current year are restated using exchange rates for the previous year.

    The scope and currency effects are calculated using a similar approach to that used for revenue for each component of net cash generated from operating activities and free cash flow.

    FINANCIAL DEBT

    Gross debt

    Gross debt (or gross finance costs/financial debt) represents bank loans and borrowings plus bank overdrafts.

    Net debt

    Net debt (or net finance costs/financial debt) as defined and used by the Group represents gross debt less cash and cash equivalents. Cash and cash equivalents comprise marketable securities and similar receivables as well as cash at bank and on hand.

    Adjusted net debt

    Adjusted net debt (or adjusted net finance costs/financial debt) as defined and used by the Group represents net debt taking into account currency and interest rate hedging instruments.

    CONSOLIDATED EBITDA

    Consolidated EBITDA represents net profit before interest, tax, depreciation, amortization and provisions, adjusted for any entities acquired over the last 12 months. Consolidated EBITDA is used by the Group to track its bank covenants.

    1 At constant currency.
    2 Alternative performance indicators are presented, defined and reconciled with IFRS in appendix 2 of this press release.
    3 (Net cash generated from operating activities – lease payments + corporate tax)/adjusted operating profit.
    4         Greenhouse gas emissions from offices and laboratories, tons of CO2 equivalent for net emissions corresponding to Scopes 1         and 2 over a period of 12 consecutive months (Q2 2023 to Q1 2024).
    5         TAR: Total Accident Rate (number of accidents with and without lost time x 200,000/number of hours worked).
    6 Proportion of women from the Executive Committee to Band II (internal grade corresponding to a management or executive management position) in the Group (number of women on a full-time equivalent basis in a leadership position/total number of full-time equivalents in leadership positions).
    7         Indicator calculated over a 6-month period for H1 2024, compared to a 12-month period for 2028 target values.
    8 (Net cash generated from operating activities – lease payments + corporate tax)/adjusted operating profit

    9 At constant currency.

    10 (Net cash generated from operating activities – lease payments + corporate tax)/adjusted operating profit.

    Attachment


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