BVI Bureau Veritas

BUREAU VERITAS - Excellent 2023 performance: strong growth and record earnings; Confident of strong growth in 2024

PRESS RELEASE

Neuilly-sur-Seine, France – February 22, 2024

Excellent 2023 performance: strong growth and record earnings; Confident of strong growth in 2024

2023 Key Figures1

• Revenue of EUR 5,867.8 million for the full year 2023, up 8.5% organically and up 3.8% on a reported basis (including a positive 0.6% scope effect and a negative 5.3% currency fluctuations)
• In the fourth quarter, organic revenue growth achieved 9.4%
• Adjusted operating profit of EUR 930.2 million, up 3.1% versus EUR 902.1 million in 2022, representing an adjusted operating margin of 15.9%, down c.10 basis points on a reported basis, and up 20 basis points organically at 16.2% (of which +c.50bps in H2 2023)
• Operating profit of EUR 824.4 million, up 3.1% versus EUR 799.3 million in 2022
• Attributable net profit of EUR 503.7 million, up 7.9% versus EUR 466.7 million in 2022
• Adjusted net profit of EUR 574.7 million (adjusted EPS of EUR 1.27 per share), up 7.6% versus EUR 533.9 million in 2022 and up 17.6% at constant currency
• Free cash flow of EUR 659.1 million (11% of Group revenue), up 0.3% year-on-year and 5.5% at constant currency, led by disciplined capex policy and working capital management  
• Adjusted net debt/EBITDA ratio2 reduced to 0.92x as of December 31, 2023, versus 0.97x last year
• Proposed dividend of EUR 0.83 per share3, up 7.8% year-on-year, payable in cash

2023 Highlights

• Appointment of a new CEO and strengthening of the Executive Committee to support future growth ambitions
• 2023 financial targets exceeded on all metrics
• Over 80% of the portfolio delivered at least mid-to-high single digit or double-digit organic revenue growth driven by good momentum in the sales pipeline
• Strong growth in every region (Americas, Middle East, Europe, Africa and Asia-Pacific), substantially outperforming many underlying markets   
• Strong momentum maintained for Sustainability and energy transition solutions across the entire portfolio
• Acquisition of two bolt-on companies further diversifying Consumer Products Services adding annualized revenue of c. EUR 28 million. This includes ANCE, the leading player in Mexico for Electrical and Electronics products (c. EUR 21 million of revenue), announced today
• Good progress towards the achievement of the 2025 CSR ambitions; commitment recognized by several non-financial rating agencies, including a first ranking in the 2023 S&P Global rating (DJSI); mid-term GHG emissions targets approved by the Science Based Targets initiative (SBTi)

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

• Mid-to-high single-digit organic revenue growth;
• Improvement in adjusted operating margin at constant exchange rates;
• Strong cash flow, with a cash conversion above 90%.

The Group expects H2 organic revenue growth above H1 (with stronger comparables in H1).

Hinda Gharbi, Chief Executive Officer, commented:

“We delivered very strong results in 2023, reflecting our robust business fundamentals, our consistent execution and our customer centricity around the globe. We achieved organic growth of 8.5%, a healthy organic margin of 16.2%, and record earnings per share of EUR 1.27, up over 17% at constant exchange rates.

I would like to warmly thank all our colleagues around the world for their dedication and hard work to deliver this outstanding performance.

I also want to thank our shareholders for their continued support. As a result of our robust cash flow generation and financials, the Board is recommending a dividend increase of 8% compared to last year.

I am convinced that we can take Bureau Veritas to higher levels of performance and achievement. Our portfolio of leading global business lines, strong execution track record and exposure to positive secular trends are key contributors to our current performance and a great foundation for future outperformance.

Specifically, we expect powerful demand for services supporting transition to sustainable development models, evolving buildings integrity needs, growing infrastructure investment and increased spending in low-carbon energy development. Our current pipeline of opportunities in these business areas is a testament to this durable growth dynamic. I look forward to updating the market with our vision and new strategy at our Capital Markets Day on March 20th.

For 2024, we expect Bureau Veritas to deliver another strong year of organic revenue growth, margin expansion4 and strong cash conversion.”

• 2023 KEY FIGURES

The Board of Directors of Bureau Veritas met on February 21, 2024, and approved the financial statements for full year 2023. The main consolidated financial items are:

IN EUR MILLIONS	2023	2022	CHANGE	CONSTANT CURRENCY
Revenue	5,867.8	5,650.6	+3.8%	+9.1%
Adjusted operating profit(a)	930.2	902.1	+3.1%	+10.5%
Adjusted operating margin(a)	15.9%	16.0%	(11)bps	+21bps
Operating profit	824.4	799.3	+3.1%	+10.8%
Adjusted net profit(a)	574.7	533.9	+7.6%	+17.6%
Attributable net profit	503.7	466.7	+7.9%	+18.1%
Adjusted EPS(a)	1.27	1.18	+7.4%	+17.4%
EPS	1.11	1.03	+7.7%	+17.9%
Operating cash flow	819.7	834.9	(1.8)%	+3.7%
Free cash flow(a)	659.1	657.0	+0.3%	+5.5%
Adjusted net financial debt(a)	936.2	975.3	(4.0)%
Adjusted net debt/EBITDA ratio(b)	0.92x	0.97x	+5.2%
(a) Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 7 of this press release.
(b) Ratio of adjusted net financial debt divided by consolidated EBITDA (earnings before interest, tax, depreciation, amortization and provisions), adjusted for any entities acquired over the last 12 months.

• 2023 FINANCIAL HIGHLIGHTS

Strong organic revenue growth in the full year

Group revenue increased by 8.5% organically in 2023, benefiting from very solid trends across most businesses and geographies. In the fourth quarter, organic growth stood at a strong 9.4%.

This is reflected as follows by business:

• Half of the portfolio (Buildings & Infrastructure and Agri-Food & Commodities) achieved mid-single- digit revenue growth. Buildings & Infrastructure (up 6.3% organically) was driven by both in-service and new build activity. Agri-Food & Commodities (up 5.7% organically) was supported by strong growth in both Agri-Food and Government services;
• More than a third of the portfolio (Industry, Certification and Marine & Offshore) delivered double digit organic revenue growth, benefiting from strong decarbonization trends (Marine & Offshore), energy transition (led by Renewables) and the rising demand for Sustainability and ESG-driven services (for Certification notably);
• An eighth of the portfolio (Consumer Products Services) was broadly stable organically, down 0.5% (including a 3.8% organic revenue recovery in the fourth quarter), attributed to fewer new product launches, and high inventory specifically in consumer electronics.

Solid financial position

At the end of December 2023, the Group's adjusted net financial debt decreased compared with the level at December 31, 2022. Bureau Veritas has a solid financial structure with most of its maturities to be refinanced after 2024. The Group had EUR 1.2 billion in available cash and cash equivalents and EUR 600 million in undrawn committed credit lines.

At December 31, 2023, the adjusted net financial debt/EBITDA ratio was further reduced to 0.92x (from 0.97x at December 31, 2022) and the EBITDA/consolidated net financial expense ratio was 44.33x. The average maturity of the Group’s financial debt was 3.7 years, while the average gross cost of debt during the year was 2.7% excluding the impact of IFRS 16 (compared to 2.1% in 2022, excluding the impact of IFRS 16). On September 7, 2023, the Group redeemed at maturity a €500 million bond program issued in 2016.

Proposed dividend

The Board of Directors of Bureau Veritas is proposing a dividend of EUR 0.83 per share for 2023, up 7.8% compared to the prior year. This corresponds to a payout ratio of 65% of its adjusted net profit.

This is subject to the approval of the Shareholders’ Meeting to be held on June 20, 2024, at 3:00pm at the Bureau Veritas Headquarters, Immeuble Newtime, 40-52 Boulevard du Parc, 92200, Neuilly-sur-Seine, France. The dividend will be paid in cash on July 4, 2024 (shareholders on the register on July 3, 2024, will be entitled to the dividend and the share will go ex-dividend on July 2, 2024).

• ACTIVE PORTFOLIO MANAGEMENT IN 2023

During 2023, Bureau Veritas has redefined its M&A strategy, rebuilt its acquisition pipeline and added dedicated resources to resume acquisitions and support its growth in the near future.

Resuming selective bolt-on M&A

In the second half of the year, the Group completed two transactions in strategic areas to further diversify its Consumer Products Services business line representing c. EUR 28 million in annualized revenue.

	ANNUALIZED REVENUE	COUNTRY/AREA	DATE	FIELD OF EXPERTISE
Consumer Products Services
Impactiva Group S.A.	c. EUR 7m	Asia	Nov. 2023	Quality assurance for the footwear industry
ANCE S.A de C.V (Associacón de Normalización y Certificación)	c. EUR 21m	Mexico	Dec. 2023	Testing and certification services for electrical and electronic products

Bureau Veritas also announced a strategic collaboration and investment in OrbitMI (more information by clicking here). Aimed at accelerating the development of both existing and new data-driven solutions, the collaboration will leverage combined strengths to address the dual opportunities of the digital transformation and the decarbonization of shipping.  

Consumer Products Services

• Impactiva Group S.A.

Since its establishment in 2003, Impactiva has become a strategic partner for its broad portfolio of top-tier footwear, apparel and leather goods retailers and brand owners. The company provides support and guidance to hundreds of factories and tanneries across Asia, Europe and Africa, ensuring the highest levels of quality in production. Known for its innovative solutions, Impactiva optimizes the use of raw materials, minimizes waste, and eliminates finished product defects through process improvements at its clients’ third-party factories. This acquisition marks a milestone for Bureau Veritas' Consumer Products Services division, as it strengthens its presence in upstream services to the footwear and apparel manufacturing industry, augmenting its capacity to deliver supply chain services in line with economic, quality, and sustainability objectives. The acquisition of Impactiva by Bureau Veritas signifies a key move in the realm of quality assurance for the footwear and apparel industry.

• ANCE S.A de C.V. (Asociación de Normalización y Certificación)

ANCE is the Mexican leader for conformity assessment covering many segments including electrical products, household appliances, lighting products, electronic products, wireless products. ANCE is a strategic partner to a wide portfolio of domestic clients including manufacturers, retailers, importers, and brands in Mexico, but also worldwide. The company employs around 400 people across its various laboratories in the country. This acquisition significantly enhances Bureau Veritas’ Consumer Products Services presence in the Americas, entering a large and growing domestic market with increasing regulatory requirements for quality. It positions Bureau Veritas Consumer Products Services as the market leader in Mexico. It could also serve as a springboard for expansion into North America.

Divestments

In July 2023, the Group sold its non-core automotive inspection business in the US, representing less than EUR 20 million of annualized revenue.

• STRENGTHENING OF THE EXECUTIVE COMMITTEE TO SUPPORT FUTURE GROWTH AMBITIONS

Hinda Gharbi appointed Chief Executive Officer of Bureau Veritas

On June 22, 2023, following the Annual Shareholders’ Meeting, the Board of Directors appointed Hinda Gharbi as Chief Executive Officer. She joined Bureau Veritas on May 1, 2022, as Chief Operating Officer and became a member of the Group Executive Committee. On January 1, 2023, she was appointed Deputy Chief Executive Officer of Bureau Veritas.For more information, the press release is available by clicking here

Key operational appointments

In 2023, Bureau Veritas also announced the reshaping and strengthening of its Executive Committee. Designed to align the organization with its strategic imperatives, this evolution ideally positions Bureau Veritas to seize key future growth opportunities. First, the Group aims to leverage the full potential of regional market opportunities, and to facilitate scaling of solutions and improved resource utilization. Second, it embeds Sustainability at the very heart of Bureau Veritas and accelerates the development and execution of its strategy. Third, these changes will further drive innovation through broad digital enablement to capture increased efficiency and productivity, and to develop new solutions and provide differentiated customer experience.

• Marc Roussel appointed Executive Vice-President Commodities, Industry and Facilities division in France and Africa

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

• Vincent Bourdil appointed Executive Vice-President Global Business Lines and Performances

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

• Juliano Cardoso appointed Executive Vice-President Corporate Development & Sustainability

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

• Surachet Tanwongsval appointed Executive Vice-President Commodities, Industry and Facilities division in Asia-Pacific

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

• Philipp Karmires appointed Executive Vice-President, Group Chief Digital Officer

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

• COMMITMENT TOWARDS NON-FINANCIAL PERFORMANCE

To support the execution of the Group’s CSR strategy, the Board of Bureau Veritas has created a CSR Committee to oversee Sustainability issues. The Committee reviews CSR strategic directions and monitors CSR programs implementation and policy effectiveness, in line with Bureau Veritas' strategic plan.

In addition, Bureau Veritas continued its efforts to be exemplary in terms of Sustainability, around all environmental, social and governance practices.

Bureau Veritas’ GHG emissions targets approved by the SBTi and enrolled in the CAC 40 SBT 1.5° index

On June 1, 2023, Bureau Veritas announced that its near-term targets had been approved by the Science Based Targets initiative (SBTi).

This approval is an important step, in line with Bureau Veritas’ Climate Transition Plan. It marks the Group’s strong commitment to following a CO2 emissions reduction pathway consistent with global warming of 1.5°C.

As a consequence, Bureau Veritas joined the CAC 40 SBT 1.5° index on September 18, 2023.

Strong recognition by non-financial rating agencies

Bureau Veritas ranks first among 184 companies in the S&P Global Corporate Sustainability Assessment (CSA) for the Professional Services Industry category - encompassing the TIC sector - with a score of 83/100 for 2023. This achievement illustrates the engagement of its 82,000 Trust Makers, at all levels of the company, who are having a positive impact on Society and the planet.

The Group is also listed in the S&P Global Sustainability Yearbook 2024, in the Top 1% S&P Global CSA Score in the Professional Services industry.

Finally, Bureau Veritas has been recognized by research and advisory firm Verdantix as a “specialist” for environmental, social and governance (ESG) services and sustainability consulting services. Bureau Veritas is listed in its latest report “Green Quadrant: ESG & Sustainability Consulting 2024”.

Corporate Social Responsibility (CSR) key indicators

	UN SDGs	FY 2023	FY 2022	2025 TARGET
SOCIAL & HUMAN CAPITAL
Total Accident Rate (TAR)5	#3	0.25	0.26	0.26
Proportion of women in leadership positions6	#5	29.3%	29.1%	35%
Number of training hours per employee (per year)	#8	36.1	32.5	35.0
NATURAL CAPITAL
CO2 emissions per employee (tons per year)7	#13	2.42	2.32	2.00
GOVERNANCE
Proportion of employees trained to the Code of Ethics	#16	97.4%	97.1%	99%

• 2024 OUTLOOK

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

• Mid-to-high single-digit organic revenue growth;
• Improvement in adjusted operating margin at constant exchange rates;
• Strong cash flow, with a cash conversion above 90%8.

The Group expects H2 organic revenue growth above H1 (with stronger comparables in H1).

2024 Capital Markets Day

Bureau Veritas will host a Capital Markets Day on March 20th, 2024, in Paris. This will be an opportunity to reveal the Group's new strategy and ambitions. This event offers attendees to gain insights into Bureau Veritas’ business and to engage with the company’s leaders (contact the IR Team to register: cmd2024@bureauveritas.com).

• ANALYSIS OF THE GROUP'S RESULTS AND FINANCIAL POSITION

Revenue up 3.8% year on year (+9.1% at constant currency)

Revenue in 2023 amounted to EUR 5,867.8 million, a 3.8% increase compared with 2022. The organic increase was 8.5%, benefiting from very solid trends across most businesses and most geographies.

Three businesses delivered double-digit organic revenue growth, with Industry up 16.5%, Marine & Offshore 14.4% and Certification 12.4%. Two businesses delivered mid-single-digit organic revenue growth, with Buildings & Infrastructure (B&I) up 6.3% and Agri-Food & Commodities up 5.7%. Consumer Products Services saw a nearly stable organic revenue growth, down 0.5% (including a 3.8% recovery in Q4 2023).

By geography, activities in the Americas strongly outperformed the rest of the Group (28% of revenue; up 10.3% organically), led by a 24.0% increase in Latin America. Europe (35% of revenue; up 7.3% organically) was primarily led by strong activity levels in Southern Europe. Activity in Asia-Pacific (28% of revenue; up 5.2% organically) benefited from robust growth in Australia and South Asia. Finally, in Africa and the Middle East (9% of revenue), business increased by 18.2% on an organic basis, essentially driven by energy investments in the Middle East.

The scope effect was a positive 0.6% reflecting the bolt-on acquisitions realized in the previous year partly offset by a small disposal in the third quarter (explaining a negative impact of 0.4% in the last quarter).

Currency fluctuations had a negative impact of 5.3% (including a negative impact of 6.4% in the fourth quarter), mainly due to the strength of the Euro against the US dollar and pegged currencies and some emerging countries’ currencies.

Adjusted operating profit up 3.1% to EUR 930.2 million (+10.5% at constant currency)

Adjusted operating profit increased by 3.1% to EUR 930.2 million. The 2023 adjusted operating margin decreased by 11 basis points to 15.9%, including a 32 basis-point negative foreign exchange impact and a 1 basis point positive scope impact. Organically, the adjusted operating margin increased by 20 basis points to 16.2% (of which c.50 basis point was delivered in the second half of 2023). This illustrates good progress in operational excellence programs, and the disciplined execution of pricing programs.

CHANGE IN ADJUSTED OPERATING MARGIN
IN PERCENTAGE AND BASIS POINTS
2022 adjusted operating margin	16.0%
Organic change	+20bps
Organic adjusted operating margin	16.2%
Scope	+1bp
Adjusted operating margin at constant currency	16.2%
Currency	(32)bps
2023 adjusted operating margin	15.9%

Four businesses experienced higher organic margins thanks to operational leverage in a context of strong revenue growth, contract selectivity and a positive mix effect: Industry (14.0%, margin up 250 basis points organically), Marine & Offshore (23.8%, margin up 94 basis points), Agri-Food & Commodities (14.9%, margin up 70 basis point) and Certification (18.9%, margin up 26 basis points). Two businesses saw a margin decline, namely Consumer Products Services and Buildings & Infrastructure, respectively impacted by lower consumer demand and mix effects.

Other operating expenses increased to EUR 105.8 million versus EUR 102.8 million in 2022. These include:

• EUR 57.1 million in amortization of intangible assets resulting from acquisitions (EUR 65.7 million in 2022);
• EUR 22.1 million in write-offs of non-current assets related to laboratory consolidations (EUR 10.2 million in 2022);
• EUR 30.3 million in restructuring costs (EUR 31.2 million in 2022);
• EUR 3.7 million in net gains on disposals and acquisitions (net gains of EUR 4.3 million in 2022).

Operating profit totaled EUR 824.4 million, up 3.1% from EUR 799.3 million in 2022.

Adjusted EPS reached EUR 1.27, up 7.4% year on year (up 17.4% at constant currency)

Net finance costs decreased to EUR 46.0 million (vs. EUR 72.4 million in 2022), reflecting mainly the increases in the income from cash and cash equivalents and interest rate increases.

The foreign exchange impact is a positive EUR 6.9 million (vs. a positive EUR 4.6 million in 2022) due to the depreciation of the US dollar against the Euro and the appreciation of the US dollar and the Euro against most emerging market currencies.

Other items (including interest cost on pension plans and other financial expenses) stood at a negative EUR 29.4 million, from a negative EUR 13.6 million in 2022.

As a result, net financial expenses decreased to EUR 68.5 million in full-year 2023 compared with EUR 81.4 million in 2022.

Income tax expense totaled EUR 240.7 million in 2023, compared with EUR 233.4 million in 2022.

This represents an effective tax rate (ETR - income tax expense divided by profit before tax) of 31.8% for the period, compared with 32.5% in 2022. The adjusted ETR is down 50 basis points at 31.1%, compared with 2022. The decrease is mainly due to the decrease in the contribution on added value of enterprises (CVAE - Cotisation sur la valeur ajoutée des entreprises) in France.

Attributable net profit in 2023 was EUR 503.7 million, up +7.9% vs. EUR 466.7 million profit in 2022.

Earnings per share (EPS) stood at EUR 1.11 vs. EUR 1.03 in 2022, up +7.7% year on year.

Adjusted attributable net profit totaled EUR 574.7 million, up +7.6% vs. EUR 533.9 million in 2022.

Adjusted EPS stood at EUR 1.27, a 7.4% increase vs. EUR 1.18 in 2022.

Very robust free cash flow at EUR 659 million (up 5.5% at constant currency)

Full year 2023 operating cash flow decreased by 1.8% to EUR 819.7 million vs. EUR 834.9 million in 2022. The increase in profit before income tax was largely offset by higher income taxes. Despite the strong revenue performance in the fourth quarter, the working capital outflow remained under control (at EUR 53.6 million, compared to a EUR 12.5 million outflow the previous year).

The working capital requirement (WCR) stood at EUR 379.8 million on December 31, 2023, compared to EUR 341.1 million on December 31, 2022. As a percentage of revenue, WCR increased slightly by 50 basis points to 6.5%, compared to 6.0% in 2022, which was a record low. This showed the continued strong focus of the entire organization on cash metrics, in a context of rapid topline growth. Key initiatives were implemented under the “Move For Cash” program (optimizing the “invoice to cash” process, accelerating billing and cash collection processes throughout the Group reinforced by a central task force, and daily monitoring of cash inflows).

Purchases of property, plant and equipment and intangible assets, net of disposals (Net Capex), amounted to EUR 143.5 million in 2023, an increase compared to EUR 125.4 million in 2022. This showed disciplined control, with the Group’s net capex-to-revenue ratio of 2.4%, broadly stable compared to the level in 2022.

Free cash flow (operating cash flow after tax, interest expenses and capex) was EUR 659.1 million, compared to EUR 657.0 million in 2022, up 0.3% year on year, notably led by operating performance, offset by currency moves. At constant exchange rates, growth was 5.5%. On an organic basis, free cash flow increased by 4.9% year on year.

CHANGE IN FREE CASH FLOW
IN EUR MILLIONS
Free cash flow at December 31, 2022	657.0
Organic change	32.3
Organic free cash flow	689.3
Scope	4.1
Free cash flow at constant currency	693.4
Currency	(34.3)
Free cash flow at December 31, 2023	659.1

At December 31, 2023, adjusted net financial debt was EUR 936.2 million, i.e. 0.92x EBITDA as defined in the calculation of the bank covenant, compared with 0.97x at December 31, 2022. The decrease in adjusted net financial debt of EUR 39.1 million versus December 31, 2022 (EUR 975.3 million) reflects:

• Free cash flow of EUR 659.1 million;
• Dividend payments totaling EUR 396.3 million;
• Acquisitions (net) and repayment of amounts owed to shareholders, accounting for EUR 71.0 million;
• Lease payments (related to the application of IFRS 16), accounting for EUR 141.9 million;
• Other items that increased the Group's debt by EUR 10.8 million (including foreign exchange).

• 2023 BUSINESS REVIEW

MARINE & OFFSHORE

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	455.7	418.3	+8.9%	+14.4%	-	(5.5)%
Adjusted operating profit	108.6	100.7	+7.8%
Adjusted operating margin	23.8%	24.1%	(24)bps	+94bps	-	(119)bps

The Marine & Offshore business was among the best performing businesses within the Group’s portfolio in the full year 2023 with organic growth of 14.4% (including 13.4% in the fourth quarter) led by all geographies and activities:

• Double-digit organic revenue growth in New Construction (40% of divisional revenue), reflecting the solid backlog and acceleration of new order conversion over the year, boosted by sector trends across the shipping industry (renewal of the world’s ageing fleet and decarbonization regulations). Activity from shipyards in China and South Korea was particularly strong in Q4.
• Double-digit organic revenue growth in the Core In-service activity (45% of divisional revenue), still led by a sustained high level of occasional surveys, especially on old ships, combined with price increases and the growth of the classed fleet. On December 31, 2023, the fleet classified by Bureau Veritas comprised 11,705 ships (up 0.8% on a yearly basis), representing 148.7 million of Gross Register Tonnage (GRT).
• Double-digit organic revenue growth for Services (15% of divisional revenue, including Offshore) was driven by the good commercial development of non-classification services, including consulting services related to energy efficiency.

Bureau Veritas new orders reached 9.3 million gross tons at December 31, 2023, bringing the order book to 22.4 million gross tons at the end of the year, up 11.4% compared to 20.1 million gross tons at end 2022. It is composed of a variety of LNG-fueled ships, container ships and specialized vessels.

Marine & Offshore continued to focus on efficiency levers through digitalization and high added-value services. In September 2023, the Group announced a strategic partnership with OrbitMI, a New York-based maritime software company, formalized through Bureau Veritas investment in OrbitMI. Aimed at accelerating the development of both existing and new data-driven solutions to optimize ships journey the collaboration will leverage combined strengths to address the dual opportunities of the digital transformation, and the decarbonization of shipping (access more information by clicking here).

Adjusted operating margin for the full year declined by 24 basis points to a still healthy 23.8% on a reported basis compared to FY 2022, negatively impacted by foreign exchange effects (119 basis points). Organically, the margin rose by 94 basis points, benefiting from a positive mix and operational excellence.

Sustainability achievements

In 2023, Bureau Veritas continued to address the challenges of Sustainability and energy transition by providing rules and guidelines for the safety, risk and performance requirements for innovation in fuels and propulsion systems. The Group helped its clients comply with environmental regulations, implement sustainable solutions on board, and measure progress in decarbonization.

Among the services and solutions delivered, in the last quarter of 2023, Bureau Veritas was selected to class the world’s largest ammonia carriers for Naftomar Shipping to be built by Hanwha Ocean in China. It will support the adoption of carbon-neutral fuels by the shipping industry, and the development of supply chains for green hydrogen.

The Group also issued its Approval in Principle (AiP) to Greek company Erma First for its Blue Connect system. This system has been designed for a specific maximum load capacity according to individual vessel specifications and to meet specific port requirements. Connection to shore power will be a requirement for containerships and cruise ships in European ports from 2030 and may be requested by other customers looking to eliminate or reduce emissions while in port.

AGRI-FOOD & COMMODITIES

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	1,233.6	1,224.8	+0.7%	+5.7%	-	(5.0)%
Adjusted operating profit	184.0	176.0	+4.6%
Adjusted operating margin	14.9%	14.4%	+55bps	+70bps	-	(15)bps

The Agri-Food & Commodities business delivered organic revenue growth of 5.7% over the year 2023, with progress across all activities. The fourth quarter recorded organic growth of 7.5%.

Oil & Petrochemicals (O&P, 31% of divisional revenue) recorded mid-single digit organic revenue growth overall in 2023, with a robust performance in the fourth quarter. Europe was driven by market share gains, while the Middle East benefited from stronger activity at the end of the year on the back of beneficial shifts in routes. O&P Trade was impacted in North America and Asia by tough competition. Non-trade related services and value-added segments continued to expand across O&P. The Group maintained strong traction around its new initiatives such as biofuels and OCM (Oil Condition Monitoring) especially in the USA and in Benelux.

Metals & Minerals (M&M, 32% of divisional revenue) achieved low single-digit organic growth over the full year including mid-single-digit growth in Q4. Upstream activity (nearly two-thirds of M&M) benefits from solid underlying trends, with good momentum in gold and green metals (copper, nickel, etc). The on-site laboratories’ strategy remains a strong growth driver with important wins in the Asia-Pacific region during the last quarter. In mining-related testing, the Group started to benefit from its recent investment and diversification in the Middle East. Trade activities recorded high-single digit organic revenue growth, led by sustained strong volumes in Asia.

Agri-Food (22% of divisional revenue) activities achieved high-single-digit organic growth, including a stellar double-digit performance in the fourth quarter. This growth was mainly driven by Agricultural products, as the year was marked by exceptionally good harvests for different food commodities in South America (mainly Brazil, with a record production in soybean) and for corn overall.

The good momentum on biodiesel in Latin America also supported growth. Within the Food business, which grew mid-single digit organically, testing activities in Australia improved as they gradually diversify their customer base. The North America and Middle East regions also strongly benefited from the ramp-up of new labs.

Government services (15% of divisional revenue) recorded another strong year in 2023 with high single-digit organic revenue growth. The growth was broad-based and driven by the solid ramp-up of new VOC (Verification of Conformity) contracts in the Middle East, in Africa and the Caspian area.

The adjusted operating margin for the Agri-Food & Commodities business rose to 14.9%, up 55 basis points compared to last year, and up 70 basis points on an organic basis. This was driven by operational leverage and a positive business mix.

Sustainability achievements

In the second half of 2023, the Group provided cargo inspection and sampling services on biofuel products made from multi-seed crush and vegetable oils on behalf of an American global food corporation in Belgium. The Group was also awarded a Sustainability data assurance contract for one of the world’s largest Food companies. In the last quarter, Bureau Veritas was selected to deliver carbon-related services for a large crop science company in Germany to improve its agricultural practices.

INDUSTRY

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	1,249.5	1,181.0	+5.8%	+16.5%	(1.0)%	(9.7)%
Adjusted operating profit	174.8	139.1	+25.6%
Adjusted operating margin	14.0%	11.8%	+217bps	+250bps	+9bps	(43)bps

Industry was the best performing business within the Group’s portfolio in 2023, with very strong organic revenue growth of 16.5% in the year including 18.7% in the fourth quarter.

All segments and most geographies contributed to the divisional growth, with Americas, Middle East and Africa outperforming. Energy transition commitments and policies remained a key growth catalyst overall and triggered low carbon energy investment and the creation of decarbonation solutions which benefited the division.

By market, Power & Utilities (14% of divisional revenue) remained a growth driver for the portfolio with a double-digit organic performance. In Latin America, the Group continues to benefit from its leading grid Opex platform and contract wins with various Power Distribution clients, although growth was moderated by the Group’s focus on profitable contracts. In Europe, the nuclear power generation segment enhanced growth, primarily driven by new projects in the UK and the EDF power plants renovation programs in France.

Renewable Power Generation activities (solar, wind, hydrogen) maintained strong momentum during the whole year, with a high double-digit organic performance delivered across most geographies. Strong growth was recorded in the US, fueled by Bureau Veritas’ Bradley Construction Management for solar, onshore wind and high-voltage transmission projects. In 2023, Bureau Veritas launched two certification schemes dedicated to renewable hydrogen and Ammonia, ensuring such products are produced with safe and sustainable practices, using renewable energy sources.

In Oil & Gas (33% of divisional revenue), double-digit organic revenue growth was maintained in 2023. Two-thirds of the business related to Opex services recorded an organic growth of 20.4% led by the conversion of a solid sales pipeline. Capex-related activities, including Procurement Services, grew double-digit organically, benefiting from the startup of new projects in the gas sector (LNG). Large contracts ramped up in Australia, Middle East, Africa and Latin America through 2023.

The non-energy activities performed well in both Opex and Capex services. These activities benefited from a number of drivers including ageing assets, tightening regulations, and the adoption of more sustainable and decarbonized asset management practices in different industries. During the year, as part of its active portfolio management, the Group further reduced its exposure to the Automotive business through the disposal in July 2023 of its non-core automotive inspection business in the US, representing below EUR 20 million of annualized revenue (3.7% of divisional revenue).

Adjusted operating margin for 2023 increased by 217 basis points to 14.0% (of which 250 basis points is organic). This is attributable to more contract selectivity, and some operational leverage through the ramp-up of contracts.

Sustainability achievements

During 2023, Bureau Veritas continued to develop and execute many new services to support its industry customers as they transition and decarbonize from co-developed plug-and-play decarbonization solutions to quality control services for various offshore windfarm construction projects (during the fabrication, manufacture and installation phases). In the last quarter, the Group was selected for the engineering and Quality Assessment support on Woodside Energy’s H2OK hydrogen plant in the US. The Group was also involved in a Project management assistance (PMA) mission for the creation of a 125 miles green energy transmission line connecting California and Arizona.

BUILDINGS & INFRASTRUCTURE

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	1,753.3	1,664.0	+5.4%	+6.3%	+1.4%	(2.3)%
Adjusted operating profit	229.3	228.7	+0.3%
Adjusted operating margin	13.1%	13.7%	(63)bps	(70)bps	+12bps	(5)bps

The Buildings & Infrastructure (B&I) business achieved an organic growth of 6.3% in 2023 against strong comparables in the previous year. This included a fourth quarter organic revenue growth recovery as expected to 4.4%.

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

The Americas region (27% of divisional revenue) delivered different performance by geography. In Latin America, strong growth was recorded, led by Brazil and Mexico, driven by wins of large Capex contracts in the transportation sectors. In North America, activity was slightly lower after strong results in 2022 and efforts to improve revenue mix through selectivity on some contracts. While the commercial real estate transactions business remained subdued due to high interest rates, the Group benefited from its very diversified portfolio (by service, asset and driver). Double digit growth was achieved in data center commissioning services thanks to continued geographical expansion and growth in cloud computing services. In addition, code compliance activities remained robust as the business benefits from exposure to the high population growth in Southern states (including Texas and Florida).

Europe (50% of divisional revenue) delivered strong growth across the board with particularly high performances in Italy, the UK and the Netherlands. More stringent regulation continued to benefit both Opex and Capex activities around energy efficiency and building safety. Mid-single-digit growth (including a strong fourth quarter) was achieved in France (39% of divisional revenue) led by its Opex business (three quarters of the country’s revenue) thanks to continued price increases and productivity gains. The capex related activities grew slightly against a declining market, as they are more weighted towards infrastructure and public works (including the Olympic Games 2024) versus residential buildings. The French government stimulus plan ‘Plan de relance’ also contributed to the growth.

The Asia-Pacific region (19% of divisional revenue) reached high-single digit organic growth in 2023. While outstanding performances were delivered in India, Southeastern Asia, Australia and Saudi Arabia, Chinese activity only slowly recovered from unfavorable comparables (following the reopening of the Chinese market the previous year). In China, the energy transition drive stimulated power-related construction activities while the spend for infrastructure projects in the transportation field remained low.

The Middle East & Africa region (4% of divisional revenue) was the best-performing area, recording a strong double-digit organic revenue increase in 2023. In the Middle East, the performance was led by the roll-out of numerous development projects. In Saudi Arabia, the Group is still strongly engaged in delivering QA/QC Services for the NEOM smart city project.

Adjusted operating margin for the full year declined by 63 basis points to 13.1% from 13.7% in the prior year mainly driven by a negative mix effect.

Sustainability achievementsIn the fourth quarter of 2023, the Group was awarded several contracts in the field of energy audits and sustainability requirements. This ranges from Green Building audit campaigns according to internal Sustainable Construction standards for a leading retail real estate owner and energy audits for Michigan schools.

CERTIFICATION

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	465.0	428.3	+8.6%	+12.4%	-	(3.8)%
Adjusted operating profit	88.0	81.4	+8.0%
Adjusted operating margin	18.9%	19.0%	(7)bps	+26bps	-	(33)bps

The Certification business recorded strong organic growth of 12.4% in the full year 2023 (including 15.1% in the fourth quarter).

This was supported by both volume and price increases. The acceleration of the Group’s portfolio diversification also continued to drive growth.

The growth was broad-based across schemes and geographies. Americas, Asia-Pacific and the Middle East and Africa region delivered the strongest organic revenue performances thanks to business development efforts and exposure to new services including Sustainability and CSR-driven solutions.

During the period, the business continued to be led by increased client demand for more brand protection, traceability, and social responsibility commitments all along the supply chains. Double-digit growth was recorded for QHSE schemes, Supply Chain & Sustainability and Food Safety. Bureau Veritas also won a public outsourcing contract with the Direction Générale de l’Alimentation to provide services around food safety inspections in France.

Sustainability-related services delivered strong double-digit organic revenue growth in 2023 fueled by a continuing high demand for verification of greenhouse gas emissions and supply chain audits on ESG topics.  In the medium term, the business is expected to benefit from several regulatory changes (CS3D -Corporate Sustainability Due Diligence Directive, EU Deforestation Regulation, EU CSRD -Corporate Sustainability Reporting Directive) which will require more audits and certification services than today.

Momentum remained strong for solutions dedicated to companies around IT Service Management and information security. The Cybersecurity business posted very high double-digit organic performance. This is due to extremely robust business development and rising demand for more verifications around enterprise cyber risks.

The adjusted operating margin for the full year was a very healthy 18.9%, compared to 19.0% in the previous year. This reflects a 26 basis points organic increase, attributed to productivity gains, offset by a negative foreign exchange effect of 33 basis points.

Sustainability achievements

During 2023, Bureau Veritas won numerous contracts in the Sustainability field. For instance, in the last quarter, the Group was selected by Mondelez International for sustainability data assurance and social audits. The Group was also awarded a contract by a European power company for the measurement of the organizational level carbon footprint and commitment to SBTi.

At COP 28 in Dubai, Bureau Veritas, Environmental intelligence services company Kayrros, and one of the world's leading suppliers of traceability systems OPTEL, announced the signing of a strategic partnership to provide companies with a solution to combat deforestation. The partnership is designed to help companies comply with the European Union Deforestation Regulation (EUDR), which aims to combat deforestation caused by the import of certain products. A first contract has been signed with a wood importer to ensure the traceability of its products and comply with this directive, which came into force on January 1st, 2024. For more information, the press release is available by clicking here.

CONSUMER PRODUCTS SERVICES

IN EUR MILLIONS	2023	2022	CHANGE	ORGANIC	SCOPE	CURRENCY
Revenue	710.7	734.2	(3.2)%	(0.5)%	+3.1%	(5.8)%
Adjusted operating profit	145.5	176.2	(17.5)%
Adjusted operating margin	20.5%	24.0%	(355)bps	(258)bps	(51)bps	(46)bps

The Consumer Products Services division recorded an organic revenue contraction of 0.5%, including a recovery in the fourth quarter of 2023 (+3.8% organic growth) with varying geographical and service trends.

During 2023 (including Q4), Asia remained the region most impacted by the weak consumer spending backdrop, while the Americas (US and Latin America) continue to benefit from the diversification strategy implemented over the recent years (especially in healthcare in the US).

Softlines, Hardlines & Toys (49% of divisional revenue) recorded low-single-digit organic growth in full year 2023. Softlines showed good resilience throughout the year and benefited in the fourth quarter from a restart of goods production as stocks deplete. Hardlines & Toys posted a low-single-digit organic contraction in 2023, with a rebound in Q4 which is expected to continue in the first quarter 2024 as toy sales and new contracts resume. China improved sequentially, and Southern Asia maintained a strong momentum (in Bangladesh, India and Indonesia) -led by the sourcing shift outside of China. Growth was moderate in South-Eastern Asia.

Health, Beauty & Household (8% of divisional revenue) recorded solid double-digit organic growth in 2023 (including Q4), led by the Americas and new contract wins. Advanced Testing Laboratory (ATL) and Galbraith Laboratories Inc., which were both acquired last year in the US, progressed well with a promising sales pipeline.

Inspection & Audit services (13% of divisional revenue) maintained their growth thanks to strong momentum for Sustainability services over the course of 2023, which grew 17% organically. This includes organic products, recycling, social audits and green claim verification across most geographies.

Lastly, Technology9 (30% of divisional revenue), as expected, recorded a mid-single-digit organic contraction, and is still affected by the global decrease in demand for electrical and wireless equipment, as well as the resulting temporary reduction in new product launches. The New Mobility sub-segment however delivered double-digit growth, led by both Asia and the US, thanks to the ramp-up of a new lab in Detroit, Michigan. This reflected good traction of testing on electric vehicle systems and associated components. During the year, the Group opened a new lab in Hanoi fully dedicated to connectivity and wireless testing. It also opened an electronic ATEX (European Directives for controlling explosive atmospheres) regulated lab in Brazil.

During the fourth quarter of 2023, the Consumer Products Services division continued its diversification strategy:

• Services diversification with the acquisition of Impactiva, a leader in quality assurance for the footwear industry, positioned upstream in the value chain;
• Geographic diversification with the acquisition of ANCE, the leader in testing and certification services for electrical and electronic products in Mexico.

Adjusted operating margin for the full year declined by 355 basis points to 20.5% from 24.0% in the prior year. Organically, it decreased by 258 basis points. This was attributed to negative operational leverage.

Sustainability achievements

During 2023, Bureau Veritas was awarded numerous contracts in the Sustainability field. For instance, in the last quarter, the Group was selected for contracts ranging from social audits, CSR compliance to environmental testing and chemical social audits. The Group also entered into a contract with one of the world's leading sportswear and footwear brands to help them in their supply chain decarbonization efforts through SBTI & greenhouse gas reduction programs.

• PRESENTATION
  • Full year 2023 results will be presented on Thursday, February 22, 2024, at 3:00 p.m. (Paris time)
  • An audio conference will be webcast live. Please connect to: Link to audio conference
  • The presentation slides will be available on: https://group.bureauveritas.com
  • All supporting documents will be available on the website
  • Live dial-in numbers:

- France: +33 (0)1 70 37 71 66

- UK: +44 (0)33 0551 0200

- US: +1 786 697 3501

- International: +44 (0)33 0551 0200

- Password: Bureau Veritas

• FINANCIAL CALENDAR
  • Capital Markets Day: March 20, 2024
  • Q1 2024 revenue: April 25, 2024
  • Shareholders’ Meeting: June 20, 2024
  • Half Year 2024 Results: July 26, 2024
  • Q3 2024 revenue: October 23, 2024

About Bureau Veritas Bureau Veritas is a world leader in laboratory testing, inspection and certification services. Created in 1828, the Group has circa 82,000 employees located in nearly 1,600 offices and laboratories around the globe. Bureau Veritas helps its 400,000 clients improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.Bureau Veritas is listed on Euronext Paris and belongs to the CAC 40 ESG, CAC Next 20, CAC 40 SBT 1.5, and SBF 120 indices. Compartment A, ISIN code FR 0006174348, stock symbol: BVI.For more information, visit www.bureauveritas.com, and follow us on Twitter (@bureauveritas) and LinkedIn.

	Our information is certified with blockchain technology.Check that this press release is genuine at www.wiztrust.com.
ANALYST/INVESTOR CONTACTS			MEDIA CONTACTS
Laurent Brunelle			Anette Rey
+33 (0)1 55 24 76 09			+ 33 (0)6 69 79 84 88
laurent.brunelle@bureauveritas.com			anette.rey@bureauveritas.com
Colin Verbrugghe
+33 (0)1 55 24 77 80
colin.verbrugghe@bureauveritas.com
Karine Ansart+33 (0)1 55 24 76 19karine.ansart@bureauveritas.com

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: Q4 AND FY 2023 REVENUE BY BUSINESS

IN EUR MILLIONS	Q4/FY 2023	Q4/FY 2022(a)	CHANGE	ORGANIC	SCOPE	CURRENCY
Marine & Offshore	117.1	109.0	+7.4%	+13.4%	-	(6.0)%
Agri-Food & Commodities	316.5	312.9	+1.2%	+7.5%	-	(6.3)%
Industry	322.2	313.7	+2.7%	+18.7%	(2.1)%	(13.9)%
Buildings & Infrastructure	470.7	459.0	+2.6%	+4.4%	-	(1.8)%
Certification	130.5	117.9	+10.6%	+15.1%	-	(4.5)%
Consumer Products	182.8	187.6	(2.5)%	+3.8%	-	(6.3)%
Total Q4 revenue	1,539.8	1,500.1	+2.6%	+9.4%	(0.4)%	(6.4)%
Marine & Offshore	455.7	418.3	+8.9%	+14.4%	-	(5.5)%
Agri-Food & Commodities	1,233.6	1,224.8	+0.7%	+5.7%	-	(5.0)%
Industry	1,249.5	1,181.0	+5.8%	+16.5%	(1.0)%	(9.7)%
Buildings & Infrastructure	1,753.3	1,664.0	+5.4%	+6.3%	+1.4%	(2.3)%
Certification	465.0	428.3	+8.6%	+12.4%	-	(3.8)%
Consumer Products	710.7	734.2	(3.2)%	(0.5)%	+3.1%	(5.8)%
Total full year revenue	5,867.8	5,650.6	+3.8%	+8.5%	+0.6%	(5.3)%

(a) Q4 and FY 2022 figures by business have been restated following a c. €4.0 million reclassification of activities previously reported in Industry to the Buildings & Infrastructure business.

• APPENDIX 2: 2023 REVENUE BY QUARTER

	2023 REVENUE BY QUARTER
IN EUR MILLIONS	Q1	Q2	Q3	Q4
Marine & Offshore	113.1	115.6	110.0	117.1
Agri-Food & Commodities	302.7	308.9	305.5	316.5
Industry	295.3	323.0	309.0	322.2
Buildings & Infrastructure	431.6	437.2	413.8	470.7
Certification	106.9	120.9	106.7	130.5
Consumer Products	154.9	194.2	178.8	182.8
Total revenue	1,404.5	1,499.8	1,423.8	1,539.8

• APPENDIX 3: ADJUSTED OPERATING PROFIT AND MARGIN BY BUSINESS

	ADJUSTED OPERATING PROFIT				ADJUSTED OPERATING MARGIN
	2023	2022	CHANGE(%)	2023		2022	CHANGE
IN EUR MILLIONS							(BASIS POINTS)
Marine & Offshore	108.6	100.7	+7.8%	23.8 %		24.1%	(24)bps
Agri-Food & Commodities	184.0	176.0	+4.6%	14.9 %		14.4%	+55bps
Industry	174.8	139.1	+25.6%	14.0 %		11.8%	+217bps
Buildings & Infrastructure	229.3	228.7	+0.3%	13.1 %		13.7%	(63)bps
Certification	88.0	81.4	+8.0%	18.9 %		19.0%	(7)bps
Consumer Products	145.5	176.2	(17.5)%	20.5 %		24.0%	(355)bps
Total Group	930.2	902.1	+3.1%	15.9 %		16.0%	(11)bps

• APPENDIX 4: EXTRACTS FROM THE FULL YEAR CONSOLIDATED FINANCIAL STATEMENTS

Extracts from the full year consolidated financial statements audited and approved on February 21, 2024by the Board of Directors. The audit procedures for the full year accounts have been undertaken and theStatutory Auditors’ report has been published.

CONSOLIDATED INCOME SATEMENT
IN EUR MILLIONS	2023	2022
Revenue	5,867.8	5,650.6
Purchases and external charges	(1,642.3)	(1,620.5)
Personnel costs	(3,061.8)	(2,929.4)
Taxes other than on income	(48.9)	(53.4)
Net (additions to)/reversals of provisions	(22.4)	0.5
Depreciation and amortization	(291.5)	(297.1)
Other operating income and expense, net	23.5	48.6
Operating profit	824.4	799.3
Share of profit of equity-accounted companies	0.7	0.1
Operating profit after share of profit of equity-accounted companies	825.1	799.4
Income from cash and cash equivalents	45.0	12.5
Finance costs, gross	(91.0)	(84.9)
Finance costs, net	(46.0)	(72.4)
Other financial income and expense, net	(22.5)	(9.0)
Net financial expense	(68.5)	(81.4)
Profit before income tax	756.6	718.0
Income tax expense	(240.7)	(233.4)
Net profit	515.9	484.6
Non-controlling interests	(12.2)	17.9
Attributable net profit	503.7	466.7
Earnings per share (in euros):
Basic earnings per share	1.11	1.03
Diluted earnings per share	1.10	1.02

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN EUR MILLIONS	DEC. 31, 2023	DEC. 31, 2022
Goodwill	2,127.4	2,143.7
Intangible assets	360.0	392.5
Property, plant and equipment	389.0	374.8
Right-of-use assets	391.5	381.3
Non-current financial assets	108.9	108.1
Deferred income tax assets	136.6	122.6
Total non-current assets	3,513.4	3,523.0
Trade and other receivables	1,584.5	1,553.2
Contract assets	325.9	310.3
Current income tax assets	33.5	42.2
Derivative financial instruments	4.1	6.3
Other current financial assets	9.1	22.1
Cash and cash equivalents	1,173.9	1,662.1
Total current assets	3,131.0	3,596.2
TOTAL ASSETS	6,644.4	7,119.2
Share capital	54.5	54.3
Retained earnings and other reserves	1,881.6	1,807.8
Equity attributable to owners of the Company	1,936.1	1,862.1
Non-controlling interests	57.7	65.9
Total equity	1,993.8	1,928.0
Non-current borrowings and financial debt	2,079.7	2,102.0
Non-current lease liabilities	319.7	308.4
Other non-current financial liabilities	73.7	99.1
Deferred income tax liabilities	85.0	88.1
Pension plans and other long-term employee benefits	147.2	141.7
Provisions for other liabilities and charges	72.2	72.9
Total non-current liabilities	2,777.5	2,812.2
Trade and other payables	1,273.4	1,267.4
Contract liabilities	257.2	255.0
Current income tax liabilities	98.5	103.7
Current borrowings and financial debt	31.2	535.4
Current lease liabilities	107.5	99.4
Derivative financial instruments	3.3	6.3
Other current financial liabilities	102.0	111.8
Total current liabilities	1,873.1	2,379.0
TOTAL EQUITY AND LIABILITIES	6,644.4	7,119.2

CONSOLIDATED STATEMENT OF CASH FLOWS
IN EUR MILLIONS	2023	2022
Profit before income tax	756.6	718.0
Elimination of cash flows from financing and investing activities	30.8	50.5
Provisions and other non-cash items	35.7	11.8
Depreciation, amortization and impairment	291.5	297.1
Movements in working capital requirement attributable to operations	(53.6)	(12.5)
Income tax paid	(241.3)	(230.0)
Net cash generated from operating activities	819.7	834.9
Acquisitions of subsidiaries, net of cash acquired	(58.9)	(76.6)
Impact of sales of subsidiaries and businesses, net of cash disposed	17.5	(1.2)
Purchases of property, plant and equipment and intangible assets	(157.6)	(130.1)
Proceeds from sales of property, plant and equipment and intangible assets	14.1	4.7
Purchases of non-current financial assets	(11.7)	(11.5)
Proceeds from sales of non-current financial assets	5.8	15.0
Change in loans and advances granted	2.8	(0.3)
Dividends received from equity-accounted companies	-	0.1
Net cash used in investing activities	(188.0)	(199.9)
Capital increase	5.7	8.6
Purchases/sales of treasury shares	(1.9)	(49.8)
Dividends paid	(396.3)	(280.9)
Increase in borrowings and other financial debt	0.9	201.8
Repayment of borrowings and other financial debt	(500.4)	(82.9)
Repayment of debts and transactions with shareholders	(29.6)	(17.3)
Repayment of lease liabilities and interest	(141.9)	(139.0)
Interest paid	(17.1)	(52.5)
Net cash used in financing activities	(1,080.6)	(412.0)
Impact of currency translation differences	(36.7)	22.3
Net increase (decrease) in cash and cash equivalents	(485.6)	245.3
Net cash and cash equivalents at beginning of the period	1,655.7	1,410.4
Net cash and cash equivalents at end of the period	1,170.1	1,655.7
o/w cash and cash equivalents	1,173.9	1,662.1
o/w bank overdrafts	(3.8)	(6.4)

• APPENDIX 5: DETAILED NET FINANCIAL EXPENSE

NET FINANCIAL EXPENSE
IN EUR MILLIONS	2023	2022
Finance costs, net	(46.0)	(72.4)
Foreign exchange gains/(losses)	6.9	4.6
Interest cost on pension plans	(5.1)	0.3
Implicit return on funded pension plan assets	1.4	0.4
Other	(25.7)	(14.3)
Net financial expense	(68.5)	(81.4)

• APPENDIX 6: ALTERNATIVE PERFORMANCE INDICATORS

ADJUSTED OPERATING PROFIT
IN EUR MILLIONS	2023	2022
Operating profit	824.4	799.3
Amortization of intangible assets resulting from acquisitions	57.1	65.7
Impairment and retirement of non-current assets	22.1	10.2
Restructuring costs	30.3	31.2
Gains (losses) on disposals of businesses and other income and expenses related to acquisitions	(3.7)	(4.3)
Total adjustment items	105.8	102.8
Adjusted operating profit	930.2	902.1

CHANGE IN ADJUSTED OPERATING PROFIT
IN EUR MILLIONS
2022 adjusted operating profit	902.1
Organic change	88.8
Organic adjusted operating profit	990.9
Scope	6.3
Adjusted operating profit at constant currency	997.2
Currency	(67.0)
2023 adjusted operating profit	930.2

ADJUSTED EFFECTIVE TAX RATE
IN EUR MILLIONS	2023	2022
Profit before income tax	756.6	718.0
Income tax expense	(240.7)	(233.4)
ETR(a)	31.8%	32.5%
Adjusted ETR	31.1%	31.6%
(a) Effective tax rate (ETR) = Income tax expense / Profit before income tax

ATTRIBUTABLE NET PROFIT
IN EUR MILLIONS	2023	2022
Attributable net profit	503.7	466.7
EPS(a) (€ per share)	1.11	1.03
Adjustment items	105.8	102.8
Tax impact on adjustment items	(27.7)	(26.2)
Non-controlling interest on adjustment items	(7.1)	(9.4)
Adjusted attributable net profit	574.7	533.9
Adjusted EPS(a) (€ per share)	1.27	1.18
(a) Calculated using the weighted average number of shares: 453,009,724 in 2023 and 452,140,348 in 2022

CHANGE IN ADJUSTED ATTRIBUTABLE NET PROFIT
IN EUR MILLIONS
2022 adjusted attributable net profit	533,9
Organic change and scope	94,0
Adjusted attributable net profit at constant currency	627.9
Currency	(53.2)
2023 adjusted attributable net profit	574.7

FREE CASH FLOW
IN EUR MILLIONS	2023	2022
Net cash generated from operating activities (operating cash flow)	819.7	834.9
Net purchases of property, plant and equipment and intangible assets	(143.5)	(125.4)
Interest paid	(17.1)	(52.5)
Free cash flow	659.1	657.0

CHANGE IN NET CASH GENERATED FROM OPERATING ACTIVITIES
IN EUR MILLIONS
Net cash generated from operating activities at December 31, 2022	834.9
Organic change	26.5
Organic net cash generated from operating activities	861.4
Scope	4.3
Net cash generated from operating activities at constant currency	865.7
Currency	(46.0)
Net cash generated from operating activities at December 31, 2023	819.7

ADJUSTED NET FINANCIAL DEBT
IN EUR MILLIONS	DEC. 31, 2023	DEC. 31, 2022
Gross financial debt	2,110.9	2,637.4
Cash and cash equivalents	1,173.9	1,662.1
Consolidated net financial debt	937.0	975.3
Currency hedging instruments	(0.8)	-
Adjusted net financial debt	936.2	975.3

• 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 a complement 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, or 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 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 businesses 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.

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 in the period.

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 Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 8 of this press release.

2 Ratio of adjusted net financial debt divided by consolidated EBITDA (earnings before interest, tax, depreciation, amortization and provisions), adjusted for any entities acquired over the last 12 months.

3 Proposed dividend, subject to Shareholders’ Meeting approval on June 20, 2024.

4 At constant currency

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 Greenhouse gas emissions from offices and laboratories, tons of CO2 equivalent net emissions per employee and per year corresponding to scopes 1, 2 and 3 (emissions related to business travel).

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

9 The Technology segment comprises Electrical & Electronics, Wireless testing activities and Automotive connectivity testing activities.

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• BUREAU VERITAS - 2024 02 22_Press release FY 2023_vDEF