BUREAU VERITAS - Early impact of the new LEAP | 28 strategy
boosting revenue and improving margins in the first half; 2024
revenue outlook upgraded
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).
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.
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
- H1 2024 revenue
will be presented on Thursday, July 25, 2024, at 6:00 p.m. (Paris
time)
- A video conference
will be webcast live. Please connect to: Link to video
conference
- The presentation
slides will be available on:
https://group.bureauveritas.com/investors/financial-information/financial-results
- 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
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.
- 2024 07 25_Press Release_H1 2024 Results
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