BUREAU VERITAS - Strong H1 2023 operating and financial
performance; higher organic revenue growth expected for full-year
2023
PRESS RELEASE
Neuilly-sur-Seine, France – July 26, 2023
Strong H1 2023 operating and
financial performance;higher
organic revenue growth expected for full-year 2023
H1
2023 Key
Figures1
- Revenue of EUR 2,904.2 million in
the first half of 2023, up 7.8% year on year and up 9.4%
organically (including 10.3% in the second quarter)
- Adjusted operating profit of EUR
434.2 million, up 5.7% versus EUR 410.9 million in H1 2022,
representing an adjusted operating margin of 15.0%, with
year-on-year variances attributed to forex and mix effects
- Operating profit of EUR 372.9
million, broadly stable versus EUR 375.2 million in H1 2022
- Adjusted net profit of EUR 276.3
million (EUR 0.61 per share) up 11.1% versus EUR 248.6 million in
H1 2022
- Attributable net profit of EUR
232.5 million, up 3.2% versus EUR 225.2 million in H1 2022
- Free cash flow of EUR 131.9
million, up 1.5% year on year with increased capex and a
well-controlled working capital requirement in the context of the
strong topline growth in Q2
- Adjusted net debt/EBITDA ratio
reduced to 0.95x as of June 30, 2023 versus 1.10x last year
H1 2023 Highlights
- Growth driven by the vast majority
of the portfolio across all geographies (Americas, Middle East,
Europe, Africa and Asia Pacific) backed by good momentum on the
sales pipeline
- Maintained traction for
Sustainability and energy transition solutions across the entire
portfolio, representing 55% of Group sales through the BV Green
Line of services and solutions
- Bureau Veritas GHG emissions
(mid-term) targets approved by the Science Based Targets initiative
(SBTi) and progress towards the 2025 CSR ambitions
2023 New Outlook Based on the
half-year performance, a healthy sales pipeline and the significant
growth opportunities related to Sustainability, Bureau Veritas now
expects for full-year 2023 to deliver:
- mid-to-high single-digit organic
revenue growth (up, from mid-single-digit organic revenue growth
previously);
- a stable adjusted operating margin
at constant exchange rates;
- strong cash
flow, with a cash conversion2 above 90%.
Hinda Gharbi, Chief Executive Officer,
commented:
“The strong organic revenue growth, resilient
margin performance and very solid financial structure delivered in
the first half of 2023 reflect the full engagement of all our teams
and the strength of our diversified and growing portfolio of
activities and our global geographical footprint. This excellent
performance and our confidence in the overall trends in our
businesses for the coming months allows us to revise our topline
growth outlook upwards.
Looking further ahead, our worldwide leadership
position in services focused on Sustainability, energy transition
and supply chain evolution makes us a bellwether and thought leader
for our sector and for society as a whole. We will continue to
drive innovation and customer centricity with Sustainability at the
core of what we do to take the Group to the next chapter of our
history.”
The Board of Directors of Bureau Veritas met on
July 25, 2023, and approved the financial statements for the first
half of 2023 (H1 2023). The main consolidated financial items
are:
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
CONSTANT CURRENCY |
Revenue |
2,904.2 |
2,693.4 |
+7.8% |
+10.9% |
Adjusted operating
profit(a) |
434.2 |
410.9 |
+5.7% |
+10.2% |
Adjusted operating
margin(a) |
15.0% |
15.3% |
(30)bps |
(9)bps |
Operating profit |
372.9 |
375.2 |
(0.6)% |
+4.1% |
Adjusted net profit(a) |
276.3 |
248.6 |
+11.1% |
+16.9% |
Attributable net profit |
232.5 |
225.2 |
+3.2% |
+9.2% |
Adjusted
EPS(a) |
0.61 |
0.55 |
+11.1% |
+16.9% |
EPS |
0.51 |
0.50 |
+3.2% |
+9.1% |
Operating cash-flow |
222.1 |
213.0 |
+4.3% |
+7.1% |
Free cash
flow(a) |
131.9 |
129.9 |
+1.5% |
+5.1% |
Adjusted net financial debt(a) |
930.8 |
1,088.8 |
(14.5)% |
|
(a) Alternative performance indicators are presented, defined and
reconciled with IFRS in appendices 6 and 8 of this press
release |
-
H1 2023 FINANCIAL HIGHLIGHTS
Strong organic revenue growth in the
first half, driven by solid demand and
Sustainability and energy transition
services
Group revenue in the first half of 2023
increased by 9.4% organically compared to the first half of 2022,
including 10.3% in the second quarter, benefiting from solid
underlying trends across most businesses.
This is reflected as follows by business:
- Two-thirds of the
portfolio (Marine & Offshore, Industry, Buildings &
Infrastructure and Certification) delivered double-digit organic
revenue growth in the first half, benefiting from strong
decarbonization trends (Marine & Offshore, and Buildings &
Infrastructure notably), energy transition (led by Renewables) and
the rising demand for Sustainability and ESG-driven services (for
Certification notably).
- Another fifth of
the portfolio (with Agri-Food & Commodities) delivered
mid-to-high single-digit organic revenue growth (up 6.5%). The
growth was led by continued strong market conditions in government
services and steady trends elsewhere.
- An eighth of the
portfolio (with Consumer Products Services) declined organically,
down 3.1%, impacted by continued high inventory levels and fewer
new product launches.
Solid financial position
At the end of June 2023, the Group's adjusted
net financial debt slightly decreased compared with the level at
December 31, 2022. The Group has a solid financial structure with
most of its maturities beyond 2024.
Bureau Veritas had EUR 1.7 billion in available
cash and cash equivalents and EUR 600 million in undrawn committed
credit lines at June 30, 2023. The adjusted net financial
debt/EBITDA ratio was further reduced to 0.95x (from 1.10x last
year) and the EBITDA/consolidated net financial expense ratio was
26.10x.
The average maturity of the Group’s financial
debt was 4.2 years, with a blended average cost of funds over the
half year of 1.0% (excluding the impact of IFRS 16), compared with
2.5% in the first half of 2022 and benefitting from the increase in
income from cash and cash equivalents.
Bureau Veritas shareholders approved the
distribution of a dividend for the 2022 financial year
At the Bureau Veritas Annual Shareholders’
Meeting, shareholders approved the distribution of a dividend of
EUR 0.77 per share for the 2022 financial year (3rd resolution,
approved at 99.99%), paid in cash on July 6, 2023.
Based on the half-year performance, a healthy
sales pipeline and the significant growth opportunities related to
Sustainability, Bureau Veritas now expects for full-year 2023 to
deliver:
- mid-to-high
single-digit organic revenue growth (up from mid-single-digit
organic revenue growth previously);
- a stable
adjusted operating margin at constant exchange rates;
- strong cash
flow, with a cash conversion3 above 90%.
On June 22, 2023, following the Annual
Shareholders’ Meeting, the Board of Directors decided the
following:
- Laurent
Mignon appointed Chairman of the Board of Directors of Bureau
Veritas
Laurent Mignon was appointed Chairman of the
Board. Prior to this, he was a non-executive director and had been
nominated as Vice-Chairman of the Board of Directors and Chairman
of the Strategic Committee on December 15, 2022.
-
Pascal Lebard appointed
Lead Independent Director and Vice-Chairman of the Board of
Directors
On the recommendation of the Nomination &
Compensation Committee, Pascal Lebard was appointed Lead
Independent Director and Vice-Chairman of the Board of Directors.
He has sat on the Bureau Veritas Board as an independent director
since 2013 and is Chairman of the Nomination & Compensation
Committee.
-
Changes in
Committees, including the
creation of a CSR Committee
A CSR Committee was created and will be chaired
by Ana Giros Calpe. It has also been decided to appoint Julie
Avrane as Chair of the Strategy Committee, replacing Laurent
Mignon.
All Bureau Veritas Board Committees are now
chaired by an independent director, thereby strengthening the
Group’s governance.
For more information on these Board changes, the
press release is available by clicking here.
-
ORGANIZATIONAL CHANGES TO THE EXECUTIVE COMMITTEE
-
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 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
In the first half of the year, the Executive
Committee welcomed two new members reporting to Hinda Gharbi,
Chief Executive Officer of Bureau Veritas:
-
Vincent Bourdil appointed
Executive Vice-President of Bureau Veritas Global Business Lines
and Performance
On May 1, 2023, Vincent Bourdil became Executive
Vice-President of Global Business Lines and Performance. He joined
Bureau Veritas in 2016 to build and drive the Global Food Service
Line. In 2019, he was promoted to Vice-President of Commodities,
Industry and Facilities (CIF) South-East Asia. In 2020, Vincent
became Senior Vice-President for the South-East Asia and
Pacific regions.For more information, the press release is
available by clicking here.
-
Marc
Roussel appointed
Executive
Vice-President
of Bureau
Veritas
Commodities,
Industry and
Facilities division in
France and
Africa
On March 1, 2023, Marc Roussel became Executive
Vice-President of Commodities, Industry and Facilities (CIF),
France and Africa. He joined Bureau Veritas in 2015 as Senior
Vice-President, Commodities, Industry & Infrastructure,
Africa.For more information, the press release is available by
clicking here.
-
COMMITMENT TOWARDS EXTRA-FINANCIAL PERFORMANCE
Bureau
Veritas’
GHG emissions targets approved by the
SBTi
On June 1, 2023, Bureau Veritas announced that
its near-term targets had been validated by the Science Based
Targets initiative (SBTi).
The Group commits by 2030 (versus a 2021 base
year) to:
-
reducing absolute Scope 1 and 2 GHG emissions by 42%;
-
reducing absolute Scope 3 GHG emissions by 25%.
This validation by the SBTi 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 trajectory consistent with 1.5°C of global warming.
Corporate Social Responsibility
(CSR) key indicators
|
UNITED NATIONS’ SDGS |
H1 2023 |
Q1 2023 |
H1 2022 |
FY 2022 |
2025 target |
SOCIAL & HUMAN CAPITAL |
|
|
|
|
|
|
Total Accident Rate (TAR) 4 |
#3 |
0.23 |
0.27 |
0.24 |
0.26 |
0.26 |
Proportion of women in leadership positions5 |
#5 |
29.7% |
29.6% |
29.2% |
29.1% |
35.0% |
Number of learning hours per employee (per year) 6 |
#8 |
12.4 |
4.2 |
14.2 |
32.5 |
35.0 |
ENVIRONMENT |
|
|
|
|
|
|
CO2 emissions per employee (tons per year) 7 |
#13 |
2.32 |
2.32 |
2.38 |
2.32 |
2.00 |
GOVERNANCE |
|
|
|
|
|
|
Proportion of employees trained to the Code of Ethics |
#16 |
97.1% |
96.6% |
95.9% |
97.1% |
99.0% |
Good CSR progress made in the first half of
2023
Over the first half of 2023, several CSR-related
actions and initiatives have been implemented:
Around the world, Bureau Veritas continues to
review its sources of emissions, and maintain its efforts to reduce
the carbon footprint, emphasizing three priorities:
- conducting
energy audits in its laboratories with the aim of identifying and
quantifying projects that reduce energy consumption and carbon
emissions;
- actively working
on the rationalization and greening of its vehicle fleet;
- accessing green
energy whenever possible.
-
Social
- The Group began
the implementation of a new system and approach for talent
acquisition including the investment in new recruitment
technologies that will help it hire more effectively and respond
more quickly to local resourcing requirements;
- key development
programs for the Group’s employees continued to be deployed at a
group-wide level. Participants in these programs were identified as
part of Bureau Veritas’ overall approach to evaluating talent and
succession planning and this approach was strengthened through more
robust processes;
- Bureau Veritas
conducted a survey with its employees on Diversity, Equity &
Inclusion to better understand key focus areas for strategies to
achieve the Group’s vision of a fully inclusive culture.
-
Awards:
Bureau Veritas received several CSR-related
awards in the first-half of 2023:
- the S&P
Sustainability Yearbook recognizes companies, grouped by industry,
that have demonstrated strong corporate sustainability. This year,
Bureau Veritas is in the Top 5% S&P Global ESG Score in the
Professional Services industry;
- Capital magazine in
France recognized Bureau Veritas as an “entreprise engagée pour la
diversité” (company committed to diversity) for 2023;
- Bureau Veritas was
included in the Financial Times’ list of “Diversity leaders
2023”.
-
ANALYSIS OF THE GROUP'S RESULTS AND FINANCIAL POSITION
Revenue up
7.8% year on year (up
9.4% on an organic basis)
Revenue in the first half of 2023 amounted to
EUR 2,904.2 million, a 7.8% increase compared with
H1 2022.
The organic increase was 9.4% compared with H1
2022, of which 10.3% in the second quarter of 2023, benefiting from
solid market trends across most businesses and geographies.
Four businesses delivered very strong organic
growth: Marine & Offshore, up 15.6%, Industry, up 15.5%,
Certification, up 11.2%, and Buildings & Infrastructure
(B&I), up 10.8%. Agri-Food & Commodities grew 6.5%
organically, led by all segments. Conversely, Consumer Products
Services declined 3.1% organically due to fewer new product
launches and lower volumes.
By geography, the Americas was amongst the best
performing region (28% of revenue; up 12.4% organically), primarily
led by a 25.9% increase in South America with a good performance in
Brazil and Chile notably. Growth in Europe (35% of revenue; up 8.6%
organically) was broad-based across most countries. Business in
Asia-Pacific (28% of revenue; up 6.3% organically) benefited from a
gradual recovery in China (concentrated in Q2), while double-digit
growth was delivered in Australia. Finally, Africa and the Middle
East (9% of revenue) outperformed the Group with organic revenue
growth of 14.4%, essentially driven by Buildings &
Infrastructure and energy projects in the Middle East.
The scope effect was a positive 1.5%, reflecting
bolt-on acquisitions realized in the past few quarters.
Currency fluctuations had a negative impact of
3.1% (including a negative impact of 4.9% in Q2), mainly due to the
strength of the euro against most currencies.
Adjusted operating profit
up 5.7%
to EUR 434.2
million
Adjusted operating profit increased by 5.7% to
EUR 434.2 million. First half 2023 adjusted operating margin was
organically resilient as the Group managed to deliver broadly the
same margin (15.2%) as last year (15.3%) despite inflationary
pressures and the mixed performance of Consumer Products Services.
Foreign exchange trends were a negative impact of 21bps on the
Group’s margin due to the strength of the euro against other
currencies, while scope only had a slight negative impact of
2bps.
CHANGE IN ADJUSTED OPERATING MARGIN |
|
IN PERCENTAGE AND BASIS POINTS |
|
H1 2022 adjusted
operating margin |
15.3% |
Organic change |
(7)bps |
Organic adjusted
operating margin |
15.2% |
Scope |
(2)bps |
Constant currency adjusted operating margin |
15.2% |
Currency |
(21)bps |
H1 2023 adjusted
operating margin |
15.0% |
The organic adjusted operating margin was
largely stable with revenue growth and operating leverage
delivering higher margins in Marine & Offshore, Industry and
Agri-Food & Commodities offsetting lower margins in Consumer
Products Services, Buildings & Infrastructure and, to some
extent, Certification.
Other operating expenses increased to EUR 61.3
million versus EUR 35.7 million in the first half of 2022, and
comprised:
-
EUR 21.1 million in amortization of intangible assets resulting
from acquisitions (down from EUR 22.0 million in H1
2022);
-
EUR 21.4 million in write-offs of non-current assets mainly related
to the Consumer Products Services and Agri-Food & Commodities
businesses;
-
EUR 18.6 million in restructuring costs, relating chiefly to
Consumer Products Services, Buildings & Infrastructure and
commodities-related activities (EUR 8.9 million in H1 2022);
-
EUR 0.2 million in net losses on disposals and acquisitions (net
loss of EUR 1.1 million in H1 2022).
Operating profit totaled EUR 372.9 million,
broadly stable versus EUR 375.2 million in the first half of
2022.
Adjusted EPS of EUR
0.61, up
11.1% year
on year
Net financial expense amounted to EUR 15.2
million in the first half of 2023, compared with
EUR 29.5 million in the same period one year earlier.
The decrease in net finance costs to EUR 24.6
million in H1 2023 (compared with EUR 38.9 million in H1 2022)
is mainly attributable to the impact of the increase in income from
cash and cash equivalents.
The Group posted foreign exchange gains of EUR
14.2 million in H1 2023 owing to the appreciation of the US dollar
and the euro against most emerging market currencies (stable vs. H1
2022).
The interest cost on pension plans amounted to a
negative EUR 1.5 million in H1 2023 compared with a positive
EUR 0.8 million in H1 2022.
Consolidated income tax expense stood at EUR
113.2 million for H1 2023, compared with EUR 111.1 million for
H1 2022.
This represents an effective tax rate (ETR) of
31.6% for the period, versus a 32.1% in H1 2022.
The adjusted effective tax rate decreased by 0.6
percentage points compared to H1 2022, to 30.7%. It corresponds to
the effective tax rate adjusted for the tax effect of adjustment
items. The decrease is mainly due to the reduction in dividend
distributions from countries subject to withholding tax during the
period.
Attributable net profit for the period was EUR
232.5 million, versus EUR 225.2 million in H1 2022.
Earnings per share (EPS) was EUR 0.51, compared
with EUR 0.50 in H1 2022.
Adjusted attributable net profit totaled EUR
276.3 million, up 11.1% versus EUR 248.6 million in H1 2022.
Adjusted EPS stood at EUR 0.61, a 11.1% increase
versus H1 2022 (EUR 0.55 per share).
Solid Free cash flow at
EUR 131.9 million
Half-year 2023 operating cash flow increased by
4.3% to EUR 222.1 million versus EUR 213.0 million in H1 2022. The
increase in profit before tax was largely offset by a working
capital requirement outflow of EUR 196.2 million, compared to a EUR
176.7 million outflow in the previous year. The change is explained
by the strong growth delivered in the second quarter (up 10.3%
organically).
Working capital requirement (WCR) stood at EUR
517.6 million at June 30, 2023, compared with EUR 517.2 million at
June 30, 2022. As a percentage of revenue, WCR decreased by 100
basis points to 8.8%, compared to 9.8% in H1 2022.
Purchases of property, plant and equipment and
intangible assets, net of disposals (Net Capex), amounted to EUR
76.4 million in the first half of 2023, up 46.9% compared to the H1
2022 figure of EUR 52.0 million. The Group’s net
capex-to-revenue ratio increased to 2.6% in order to finance growth
in its laboratory activities. It was up 70 basis points from the
low H1 2022 (1.9%).
Free cash flow (operating cash flow after tax,
interest expenses and capex) was EUR 131.9 million, compared to EUR
129.9 million in H1 2022, up 1.5% year on year. On an organic
basis, free cash flow reached EUR 133.0 million.
CHANGE IN FREE CASH FLOW |
|
IN EUR MILLIONS |
|
Free cash flow at June
30, 2022 |
129.9 |
Organic change |
3.2 |
Organic free cash
flow |
133.0 |
Scope |
3.5 |
Free cash flow at constant currency |
136.5 |
Currency |
(4.6) |
Free cash flow at June
30, 2023 |
131.9 |
At June 30, 2023, adjusted net financial debt
was EUR 930.8 million, i.e. 0.95x trailing twelve-month 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 44.5 million versus December 31, 2022 (EUR 975.3
million) reflects:
free cash flow of EUR 131.9 million;
dividend payments totaling EUR 13.3 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 14.2 million;
lease payments (related to the application of
IFRS 16), accounting for EUR 63.9 million;
other items that decreased the Group's debt by
EUR 4.0 million.
MARINE & OFFSHORE
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
228.6 |
204.5 |
+11.8% |
+15.6% |
- |
(3.8)% |
Adjusted Operating Profit |
56.5 |
50.1 |
+12.7% |
|
|
|
Adjusted Operating Margin |
24.7%% |
24.5% |
+22bps |
+113bps |
- |
(91)bps |
The Marine & Offshore business delivered
very strong 15.6% organic revenue growth in the first half of 2023
(including 17.7% in Q2), led by all geographies and activities:
- Double-digit
organic revenue growth in New Construction (39% of
divisional revenue), reflecting a solid backlog with the conversion
of new orders accelerating in Q1 and Q2.
- Double-digit
organic revenue growth in the Core In-service
activity (46% of divisional revenue), which benefitted from a
continuing high level of occasional surveys, combined with price
increases and the growth of the classified fleet. In the second
half, the Group expects slower growth in percentage terms as
compared to an exceptionally strong H2 2022 (catch-up effect post
lockdowns in China and one-off regulatory benefits in Q4 2022). At
June 30, 2023, the fleet classified by Bureau Veritas comprised
11,577 ships, representing 146.5 million of Gross Register Tonnage
(GRT).
- Double-digit
organic revenue growth for Services (15% of
divisional revenue, including Offshore) was driven by a combination
of strong commercial development for non-classification services,
including consulting services related to energy efficiency.
Bureau Veritas new orders reached 4.3 million
gross tons at June 30, 2023, bringing the order book to
20.4 million gross tons at the end of the semester, up 13.3%
compared to 18.0 million gross tons at end-June 2022. It is
composed of LNG fueled ships, container ships and specialized
vessels.
The division continued to benefit from its
market leader positioning on alternative fuels, mainly LNG and
methanol dual propulsion.
Marine & Offshore continued to focus on
efficiency levers through digitalization and high added-value
services. In April 2023, Bureau Veritas and Kongsberg launched a
digitally optimized machinery maintenance platform that enables its
Machinery Maintenance Application (MMA) to connect directly to a
vessel operator’s own maintenance management system, K-Fleet from
Kongsberg Digital (more information by clicking here).
Adjusted operating margin for the half year
improved by 22 basis points to 24.7% on a reported basis compared
to H1 2022, negatively impacted by foreign exchange effects
(91 basis points). Organically, it rose by 113 basis points,
benefiting from operating leverage, a positive mix and operational
excellence.
Sustainability achievementsThe
Group continues to innovate on future fuels and new propulsion
systems. In the second quarter of 2023, it has issued an Approval
in Principle (AIP) to Rotoboost’s thermocatalytic decomposition
process for carbon capture. Rotoboost’s technology converts natural
gas into hydrogen and solid carbon using a liquid catalyst. The
hydrogen can be used for fuel cells or as blend-in fuel for
combustion engines or gas fired boilers.The Group has also been
working on ship financing aligned with maritime’s decarbonization
goals. It has developed a tool to build realistic decarbonization
trajectories for shipping based on a bottom-up methodology. It also
supported a pool of banks in the definition of their own strategies
related to decarbonization.
AGRI-FOOD & COMMODITIES
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
611.6 |
588.0 |
+4.0% |
+6.5% |
- |
(2.5)% |
Adjusted Operating Profit |
82.3 |
76.2 |
+8.0% |
|
|
|
Adjusted Operating Margin |
13.5% |
13.0% |
+50bps |
+66bps |
- |
(16)bps |
The Agri-Food & Commodities business
delivered organic revenue growth of 6.5% in the first half of 2023,
with positive trends for all activities. In Q2, Group organic
revenue increased by 5.4%.
Oil & Petrochemicals
(O&P, 30% of divisional revenue) achieved mid-single digit
organic revenue growth overall. Steady growth was recorded for the
O&P Trade market, driven by higher volumes and pricing
initiatives. Particularly strong growth was achieved in Europe, led
by market share gains in key locations and increased activity
(Belgium, Greece). Throughout the first half, non-trade related
services and value-added segments such as Verifuel bunker quantity
services and sustainability-driven solutions continued to expand
across O&P. The Group is gaining momentum with its new
initiatives for biofuels and OCM (Oil Condition Monitoring), which
both grew high double digits organically.
Metals & Minerals (M&M,
33% of divisional revenue) grew mid-single digits on an organic
basis. The Upstream business (nearly two-thirds of M&M) showed
solid growth (up 3.1% organically). The Group continued to benefit
from the success of its on-site laboratories’ strategy with several
important wins in the period (including an iron ore mine in
Australia and a copper mine in Chile). In mining related testing,
the activity continued to be driven by a mix of gold, energy
transition metals and bulk minerals. Trade activities recorded
double-digit organic revenue growth (up 10.3% organically). This
was fueled by all the main commodities, with strong trade volumes
in Asia, the Middle East and Southern Africa as well as by pricing
initiatives.
Agri-Food (22% of divisional
revenue) achieved high-single digits organic growth in the first
half, led by Agricultural products. Agricultural inspection
activities grew strongly, benefiting from solid trends in Europe
and notably in the entire Danube corridor triggered by the changes
of routes. Activity in the Middle East was particularly strong
following the opening of a new laboratory and good sales
performance. The Food business grew mid-single digits organically,
with improvement achieved in the second quarter. Inspection
activities delivered stronger growth than testing activities,
benefiting notably from a favorable regulatory environment for
traceability services in Europe (EU Deforestation Regulation,
German Supply Chain Act). Growth was delivered in the Group’s
largest hubs, with Australia benefiting from its continued
diversification. New geographies also contributed to growth,
including the US (driven by the ramp-up of new greenfield lab
openings) and Southeast Asian countries (large government contract
on food safety).
Government services (15% of
divisional revenue) recorded high single-digit organic revenue
growth in the first half. Strong growth was delivered in Asia, the
Middle East and Africa led by a solid commercial development of VOC
(Verification of Conformity) contracts and Single Window contracts
in Africa and Central Asia.
The adjusted operating margin for the Agri-Food
& Commodities business rose to 13.5%, up 50 basis points
compared to last year. This was led by a topline recovery and a
positive business mix.
Sustainability achievements
Bureau Veritas was awarded a contract to deliver
services for biofuels from a large waste-based biofuels producer
including sampling and analyses for Fatty Acid Methyl Ester (FAME)
products in the Netherlands.
In the first half of 2023, the Group was awarded
a Food Safety and Quality Control contract in the Middle East to
support regional farmers and producers to comply with the standards
and regulations demand of a new sustainable city.
INDUSTRY
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
618.3 |
562.4 |
+9.9% |
+15.5% |
- |
(5.6)% |
Adjusted Operating Profit |
76.1 |
62.2 |
+22.4% |
|
|
|
Adjusted Operating Margin |
12.3% |
11.0% |
+125bps |
+147bps |
- |
(22)bps |
Industry was among the best performing
businesses within the Group’s portfolio in the first half of 2023
with organic growth of 15.5%, including 18.2% growth in the second
quarter.
All segments and most geographies contributed to
the divisional growth, with both Latin America and Africa
outperforming. Energy transition, which accelerated over the
period, remained a key catalyst overall and triggered clean energy
investment and decarbonation solutions which benefited the
division.
By market, Power &
Utilities (15% of divisional revenue) continued to be a
key driver of growth for the portfolio with a double-digit organic
performance for both Opex and Capex activities during the half year
(including Q2). Growth was driven mainly by Latin America thanks to
the ramp-up of contract wins with various Power Distribution
clients, although the Group is more selective on contracts
profitability. In Europe, the nuclear power generation segment
contributed greatly to growth, notably in the UK. There are
promising opportunities in the medium term for new nuclear power
plants (new EPRs in France and development of Small Modular
Reactors (SMR) projects in several countries) alongside dismantling
projects (such as Ignalinia in Lithuania).
Renewable Power Generation
activities (solar, wind, hydrogen) maintained strong momentum
during the period, with a high double-digit organic performance
delivered across most geographies. A strong path of growth was
recorded in the US, with a very dynamic performance from Bureau
Veritas’ Bradley Construction Management for solar, onshore wind
and high-voltage transmission projects. This benefited from easing
supply chain restrictions and early opportunities from Inflation
Reduction Act investment expectations. The Group is seeing
increased demand and activity in both Carbon capture and
Sequestration (CCS), notably in the US where it continues to
innovate.
In Oil & Gas (33% of
divisional revenue), double digit organic revenue growth was
achieved in the first half. The two-thirds of the business related
to Opex services increased 19.7% as they continue to benefit from
the conversion of a solid sales pipeline. Capex-related activities,
including Procurement Services, grew low double digits organically,
essentially attributable to the startup of new projects in the gas
sector. This was triggered by companies’ willingness to manage
their assets in a more sustainable manner (low carbon strategy
towards net zero target). Large contracts ramped up in the US,
Asia, Middle East and Latin America, in Brazil in particular.
Elsewhere, the Automotive
business (5% of divisional revenue) delivered high single-digit
growth amid easing in supply chain disruptions. In July 2023, the
Group sold its non-core automotive inspection business in the US,
representing below EUR 20 million of annualized revenue. This is
part of the Group’s active portfolio management.
Adjusted operating margin for the half year
increased by 125 basis points to 12.3%. This is attributable to
operational leverage through the ramp-up of contracts and more
selectivity when it comes to profitability.
Sustainability achievements
In Q2 2023, Bureau Veritas was awarded a major
contract to provide Integrated Site Services (including the quality
control of the construction works) for Scottish Power Renewables’
East Anglia THREE – one of the UK’s largest offshore windfarm
projects. Once complete, it will generate up to 1,400MW of power
via 95 wind turbines and power over one million homes in the
UK.
In the first half, the Group was also awarded
contracts with five utilities companies in California
(United States), to act as an independent evaluator for
Wildfire Mitigation program through audit and field inspection
services. These programs are required by the Public Utilities
Commission to reduce the probability for wildfires due to drier
conditions associated with climate change.
BUILDINGS & INFRASTRUCTURE
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
868.8 |
777.8 |
+11.7% |
+10.8% |
+2.3% |
(1.4)% |
Adjusted Operating Profit |
106.4 |
103.9 |
+2.4% |
|
|
|
Adjusted Operating Margin |
12.2% |
13.4% |
(111)bps |
(134)bps |
+21bps |
+2bps |
The Buildings & Infrastructure (B&I)
business achieved strong organic growth of 10.8% in the first half
of 2023, primarily fueled by the Asia-Pacific and by the Middle
East regions. In Q2, revenue grew 12.4% on an organic basis thanks
to double-digit performances in both CAPEX and OPEX activities.
Construction-related activities (55% of divisional revenue)
benefited from strong dynamics for new projects in
South America (notably Brazil) and the Middle East.
The Americas (27% of divisional revenue) posted
high-single-digit organic growth. In Latin America, a strong
performance was achieved thanks to the ongoing ramp-up of large
Capex contracts for project management assistance signed in the
second half of 2022, mostly focused on the energy and aluminum
fields. Low single-digit H1 2023 growth was recorded in Northern
America led by the datacenter commissioning market and the
resilience of the code compliance activity. Some of the Capex
business growth was moderated by longer decision processes and a
slowdown in the commercial real estate activities on the back of
rising interest rates. The pipeline remains very solid. Opex
activities delivered good growth thanks to the sustained momentum
on non-regulatory new services, primarily commissioned by insurance
companies.
In Europe (50% of divisional revenue), strong
growth was delivered on the back of a double-digit performance in
Italy, Spain and the UK thanks to more stringent regulation
benefiting both Opex and Capex activities. France, the region’s
largest contributor (with 39% of divisional revenue), delivered
mid- to-high organic revenue growth in H1 2023. This was once
again driven by a further good performance in In-service activity
backed by a solid pipeline (notably in white certificate project
services and inspections), and good pricing power on mass market
activity. The growth of Capex-related activities remained muted
despite a good backlog and the higher weighting towards
infrastructure and public works versus residential building. The
pipeline of sales related to the EU Green Deal and the upcoming
2024 Olympic Games in France continued to grow with opportunities
mainly focused on energy efficiency programs.
The Asia-Pacific, and the Middle East &
Africa regions (23% of divisional revenue) are the best-performing
areas, recording a double-digit organic revenue increase in H1 2023
(and in Q2). Asia is pushed by stellar performances in India and
Southeastern Asia. The Chinese activity is steadily picking up. In
the Middle East region, the Group continued to deliver very high
growth primarily led by the roll-out of new services linked to the
development of numerous projects. As an illustration, in Saudi
Arabia, the Group remained strongly engaged in delivering QA/QC
Services for the NEOM project, a smart city that will be powered by
renewable energy and become a center for biotechnology, media and
entertainment.
Adjusted operating margin for the half year
declined by 111 basis points to 12.2% from 13.4% in the prior year.
This was primarily attributed to unfavorable comparable following a
positive one-off in social liabilities in France in H1 2022 that
has mostly reversed in H2 last year.
Sustainability achievements
In the second quarter of 2023, the Group was
awarded several contracts in the field of energy audits, to help
clients across different industries (construction, banks,
transports) to comply with the Tertiary Decree imposing energy
consumption reduction commitments in the French tertiary
sector.
CERTIFICATION
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
227.8 |
209.2 |
+8.9% |
+11.2% |
- |
(2.3)% |
Adjusted Operating Profit |
41.7 |
40.0 |
+4.3% |
|
|
|
Adjusted Operating Margin |
18.3% |
19.1% |
(80)bps |
(63)bps |
- |
(17)bps |
The Certification business delivered strong
organic growth of 11.2% in the first half of 2023 (similar in the
first and second quarters). This good performance was enhanced by
the acceleration of the diversification of the Group’s portfolio.
Strong commercial development and solid price increases also
supported growth over the period, mostly led by very good traction
in South America and Asia-Pacific, where the offering has been
expanded with new schemes (with the shift from traditional QHSE
schemes towards new services). This is illustrated by the sustained
good performance in countries such as Brazil, Vietnam and India, on
the back of good momentum for CSR-driven solutions and customized
audits.
Double-digit growth was recorded for
QHSE schemes, Supply Chain and
Food
Certification (led by Food
Safety), with a strong momentum for Sustainability-related
solutions. Momentum was particularly strong on certifications
dedicated to companies for anti-bribery, IT service management,
information security and business continuity. Similarly to Q1 2023,
Cybersecurity solutions also
posted stellar performances. This is due to rising demand for more
control on security systems. In the United Arab Emirates, Bureau
Veritas recently won an important contract to provide cybersecurity
and penetration testing services on behalf of an energy
company.
Sustainability-driven solutions are in high
demand as the search for more brand protection, data transparency,
and social responsibility commitments all along the supply chain
drove a 17.3% organic growth performance. It reflected a high
demand for verification of greenhouse gas emissions and supply
chain audits on ESG topics.
The adjusted operating margin for the half year
was a very healthy 18.3%, compared to 19.1% in the prior year. This
reflects a 80-basis-point decrease against the record level,
attributed to negative forex and mix effects.
Sustainability achievements
In the second quarter of 2023, Bureau Veritas
partnered with Enhesa, a global regulatory and sustainability
intelligence provider in the UK, the Netherlands and Belgium. Based
on legal requirements identified through the Enhesa solution,
Bureau Veritas will provide end-to-end regulatory compliance and
services for organizations in these countries seeking to implement,
measure and achieve their ESG, HSE and Sustainability requirements
objectives.
During the first half of 2023, Bureau Veritas
was awarded numerous contracts in the Sustainability field. For
instance, the Group won a contract to help Valeo produce wiper
blades designed to reduce CO2 emissions by 61% compared to a
standard product commercialized in the European market.
Bureau Veritas also signed agreements with three
major datacenter companies based in Denmark to assess and verify
their compliance with the Self-Regulatory Initiative (SRI) as part
of the Climate Neutral Data Centre Pact (CNDCP).
CONSUMER PRODUCTS
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Revenue |
349.1 |
351.5 |
(0.7)% |
(3.1)% |
+6.0% |
(3.6)% |
Adjusted Operating Profit |
71.2 |
78.5 |
(9.3)% |
|
|
|
Adjusted Operating Margin |
20.4% |
22.3% |
(195)bps |
(67)bps |
(95)bps |
(33)bps |
The Consumer Products division posted a decline
of 3.1% in organic revenue over the first half of 2023 (including a
decline of 2.7% in the second quarter), with varying geographical
and service trends.
During the period, Asia remained the region the
most impacted by the global economic slowdown, while the Americas
(especially Latin America) and the Middle East & Africa (led by
Turkey) continue to benefit from the diversification strategy
implemented over the last years and from the structural
near-shoring market trends.
Softlines, Hardlines
& Toys (49% of divisional revenue) saw a
mid-single-digit organic decrease in the first half of 2023, due to
lower volumes and the resulting high inventory levels, even though
the activity improved a bit in the second quarter. Softlines showed
mixed performances by country: as expected, China delivered a weak
performance, while contrasting dynamics were observed between
Southeast and South Asian countries (Bangladesh, Pakistan, and Sri
Lanka) which benefited from the continuing structural sourcing
shift outside of China. Similarly, Turkey saw a strong increase in
testing volumes as it continued to benefit from nearshoring shifts
by European retailers. This supports the Group’s geographic
diversification strategy towards new production countries that are
closer to the countries of consumption.
Health, Beauty & Household
(8% of divisional revenue) recorded solid double-digit organic
growth in H1, led by Asia and the US. South Korea benefited from
its diversification into Cosmetics, Health & Beauty while Italy
remained fueled by luxury and leather products. The integration of
Advanced Testing Laboratory (ATL) and Galbraith Laboratories Inc.,
which were both acquired last year in the US, progressed well with
a promising sales pipeline. These acquisitions help Bureau Veritas
strengthen its position in this growing sector.
Inspection and Audit services
(12% of divisional revenue) maintained their growth momentum thanks
to strong growth for Sustainability services over the course of the
first half of 2023: this includes organic, recycling, social audits
and green claim verification across most geographies.
Lastly,
Technology8 (31% of divisional
revenue) performed below the divisional average, 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 delivered double-digit
growth, led by both China and the US, areas where the Group
invested significantly, and which benefited from the ramp-up of new
laboratories. This reflected good traction on testing on electric
vehicle engines, dashboards or charging stations. In the first half
of 2023, the Group continued to pursue its geographical
diversification strategy to take advantage of the structural
sourcing shifts currently unfolding in South and Southeast Asia. In
this respect, in the first quarter, Bureau Veritas opened a new lab
in Hanoi which will be fully dedicated to connectivity and wireless
testing.
Adjusted operating margin for the half year
declined by 195 basis points to 20.4% from 22.3% in the prior year.
This was primarily attributed to the decline in revenue and
negative scope and forex effects. The benefits of several cost
initiatives are expected to be felt in the second half of the
year.
Sustainability achievements
In the first half of 2023, the Group was awarded
a contract with a large American sportswear company to perform
regulatory audits and Sustainability services (Energy Efficiency
Directive, Energy Performance of Building Directive) across 40
countries where the brand is commercialized; through these
services, Bureau Veritas supports its client in managing its ESG
strategy and providing proof of its commitments.
-
PRESENTATION
- H1 2023 results
will be presented on Wednesday, July 26, 2023, at 3:00 p.m. (Paris
time)
- A video conference
will be webcast live. Please connect to: Link to video
conference
- The presentation
slides will be available on: 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
-
2023/2024 FINANCIAL CALENDAR
- Q3 2023 revenue:
October 25, 2023
- Full Year 2023
Results: February 22, 2024
- Q1 2024 revenue:
April 25, 2024
- Half Year 2024
Results: July 26, 2024
- Q3 2024 revenue:
October 24, 2024
About Bureau Veritas Bureau
Veritas is a world leader in laboratory testing, inspection and
certification services. Created in 1828, the Group has circa 84,000
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 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. |
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|
ANALYST/INVESTOR CONTACTS |
|
MEDIA CONTACTS |
|
|
Laurent Brunelle |
|
Caroline Ponsi
Khider |
|
|
+33 (0)1 55 24 76 09 |
|
+33 (0)7 52 60 89 78 |
|
|
laurent.brunelle@bureauveritas.com |
|
caroline.ponsi-khider@bureauveritas.com |
|
|
|
|
|
|
|
Colin Verbrugghe |
|
Primatice |
|
|
+33 (0)1 55 24 77 80 |
|
thomasdeclimens@primatice.com |
|
|
colin.verbrugghe@bureauveritas.com |
|
armandrigaudy@primatice.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: Q2 AND HALF-YEAR 2023 REVENUE BY BUSINESS
IN EUR MILLIONS |
Q2/H1 2023 |
Q2/H1 2022(a) |
CHANGE |
ORGANIC |
SCOPE |
CURRENCY |
Marine & Offshore |
115.6 |
103.1 |
+12.1% |
+17.7% |
- |
(5.6)% |
Agri-Food & Commodities |
308.9 |
307.3 |
+0.5% |
+5.4% |
- |
(4.9)% |
Industry |
323.0 |
293.8 |
+9.9% |
+18.2% |
- |
(8.3)% |
Buildings & Infrastructure |
437.2 |
388.7 |
+12.5% |
+12.7% |
+2.6% |
(2.8)% |
Certification |
120.9 |
111.9 |
+8.0% |
+11.3% |
- |
(3.3)% |
Consumer Products |
194.2 |
198.5 |
(2.2)% |
(2.7)% |
+5.2% |
(4.7)% |
Total Q2 revenue |
1,499.8 |
1,403.3 |
+6.9% |
+10.3% |
+1.5% |
(4.9)% |
Marine & Offshore |
228.6 |
204.5 |
+11.8% |
+15.6% |
- |
(3.8)% |
Agri-Food & Commodities |
611.6 |
588.0 |
+4.0% |
+6.5% |
- |
(2.5)% |
Industry |
618.3 |
562.4 |
+9.9% |
+15.5% |
- |
(5.6)% |
Buildings & Infrastructure |
868.8 |
777.8 |
+11.7% |
+10.8% |
+2.3% |
(1.4)% |
Certification |
227.8 |
209.2 |
+8.9% |
+11.2% |
- |
(2.3)% |
Consumer Products |
349.1 |
351.5 |
(0.7)% |
(3.1)% |
+6.0% |
(3.6)% |
Total H1 revenue |
2,904.2 |
2,693.4 |
+7.8% |
+9.4% |
+1.5% |
(3.1)% |
(a) Q2 and H1 2022 figures by business have been
restated following a c. €1.9 million reclassification of activities
previously reported in Industry to the Buildings &
Infrastructure business.
-
APPENDIX 2: HALF-YEAR 2023 REVENUE BY QUARTER
|
2023 REVENUE BY QUARTER |
IN EUR MILLIONS |
Q1 |
Q2 |
Marine & Offshore |
113.1 |
115.6 |
Agri-Food & Commodities |
302.7 |
308.9 |
Industry |
295.3 |
323.0 |
Buildings & Infrastructure |
431.6 |
437.2 |
Certification |
106.9 |
120.9 |
Consumer Products |
154.9 |
194.2 |
Total revenue |
1,404.5 |
1,499.8 |
-
APPENDIX 3: ADJUSTED OPERATING PROFIT AND MARGIN BY BUSINESS
IN EUR MILLIONS |
ADJUSTED OPERATING PROFIT |
ADJUSTED OPERATING MARGIN |
H1 2023 |
H1 2022 |
CHANGE(%) |
H1 2023 |
H1 2022 |
CHANGE |
(BASIS POINTS) |
Marine & Offshore |
56.5 |
50.1 |
+12.7% |
24.7% |
24.5% |
+22bps |
Agri-Food & Commodities |
82.3 |
76.2 |
+8.0% |
13.5% |
13.0% |
+50bps |
Industry |
76.1 |
62.2 |
+22.4% |
12.3% |
11.0% |
+125bps |
Buildings & Infrastructure |
106.4 |
103.9 |
+2.4% |
12.2% |
13.4% |
(111)bps |
Certification |
41.7 |
40.0 |
+4.3% |
18.3% |
19.1% |
(80)bps |
Consumer Products |
71.2 |
78.5 |
(9.3)% |
20.4% |
22.3% |
(195)bps |
Total Group |
434.2 |
410.9 |
+5.7% |
15.0% |
15.3% |
(30)bps |
-
APPENDIX 4: EXTRACTS FROM THE HALF-YEAR CONSOLIDATED FINANCIAL
STATEMENTS
Extracts from the half-year consolidated
financial statements audited and approved on July 25, 2023 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 2023 |
H1 2022 |
Revenue |
2,904.2 |
2,693.4 |
Purchases and external charges |
(828.9) |
(767.6) |
Personnel costs |
(1,532.6) |
(1,414.1) |
Taxes other than on income |
(29.1) |
(28.1) |
Net (additions to)/reversals of provisions |
(11.1) |
4.8 |
Depreciation and amortization |
(135.4) |
(128.7) |
Other operating income and expense, net |
5.8 |
15.5 |
Operating profit |
372.9 |
375.2 |
Share of profit of equity-accounted companies |
0.3 |
0.1 |
Operating profit after share of profit of equity-accounted
companies |
373.2 |
375.3 |
Income from cash and cash equivalents |
22.4 |
1.4 |
Finance costs, gross |
(47.0) |
(40.3) |
Finance costs, net |
(24.6) |
(38.9) |
Other financial income and expense, net |
9.4 |
9.4 |
Net financial
expense |
(15.2) |
(29.5) |
Profit before income tax |
358.0 |
345.8 |
Income tax expense |
(113.2) |
(111.1) |
Net profit |
244.8 |
234.7 |
Non-controlling interests |
(12.3) |
(9.5) |
Attributable net profit |
232.5 |
225.2 |
Earnings per share (in euros): |
|
|
Basic earnings per share |
0.51 |
0.50 |
Diluted earnings per share |
0.51 |
0.49 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
IN EUR MILLIONS |
JUNE 30, 2023 |
DEC. 31 2022 |
Goodwill |
2,115.3 |
2,143.7 |
Intangible assets |
366.7 |
392.5 |
Property, plant and equipment |
366.2 |
374.8 |
Right-of-use assets |
378.7 |
381.3 |
Non-current financial assets |
103.8 |
108.1 |
Deferred income tax assets |
103.4 |
122.6 |
Total non-current
assets |
3,434.1 |
3,523.0 |
Trade and other receivables |
1,588.0 |
1,553.2 |
Contract assets |
339.9 |
310.3 |
Current income tax assets |
56.3 |
42.2 |
Derivative financial instruments |
8.5 |
6.3 |
Other current financial assets |
15.2 |
22.1 |
Cash and cash equivalents |
1,687.7 |
1,662.1 |
Total current
assets |
3,695.6 |
3,596.2 |
Assets held for sale |
9.4 |
- |
TOTAL ASSETS |
7,139.1 |
7,119.2 |
|
|
|
Share capital |
54.4 |
54.3 |
Retained earnings and other reserves |
1,639.2 |
1,807.8 |
Equity attributable to owners of the Company |
1,693.6 |
1,862.1 |
Non-controlling interests |
71.0 |
65.9 |
Total equity |
1,764.6 |
1,928.0 |
Non-current borrowings and financial debt |
2,090.3 |
2,102.0 |
Non-current lease liabilities |
306.8 |
308.4 |
Other non-current financial liabilities |
92.9 |
99.1 |
Deferred income tax liabilities |
77.4 |
88.1 |
Pension plans and other long-term employee benefits |
141.0 |
141.7 |
Provisions for other liabilities and charges |
71.8 |
72.9 |
Total non-current
liabilities |
2,780.2 |
2,812.2 |
Trade and other payables |
1,156.0 |
1,267.4 |
Contract liabilities |
254.4 |
255.0 |
Current income tax liabilities |
113.6 |
103.7 |
Current borrowings and financial debt |
531.4 |
535.4 |
Current lease liabilities |
100.2 |
99.4 |
Derivative financial instruments |
5.3 |
6.3 |
Other current financial liabilities |
431.6 |
111.8 |
Total current
liabilities |
2,592.5 |
2,379.0 |
Liabilities held for sale |
1.8 |
- |
TOTAL EQUITY AND LIABILITIES |
7,139.1 |
7,119.2 |
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
Profit before income tax |
358.0 |
345.8 |
Elimination of cash flows from financing and investing
activities |
16.1 |
(4.0) |
Provisions and other non-cash items |
13.2 |
26.1 |
Depreciation, amortization and impairment |
135.3 |
129.0 |
Movements in working capital requirement attributable to
operations |
(196.2) |
(176.7) |
Income tax paid |
(104.3) |
(107.2) |
Net cash generated from operating activities |
222.1 |
213.0 |
Acquisitions of subsidiaries |
(14.0) |
(45.7) |
Impact from sales of subsidiaries and businesses |
- |
(1.2) |
Purchases of property, plant and equipment and intangible
assets |
(79.8) |
(53.7) |
Proceeds from sales of property, plant and equipment and intangible
assets |
3.4 |
1.7 |
Purchases of non-current financial assets |
(5.2) |
(6.4) |
Proceeds from sales of non-current financial assets |
5.1 |
11.3 |
Change in loans and advances granted |
1.8 |
2.4 |
Net cash used in investing activities |
(88.7) |
(91.6) |
Capital increase |
2.9 |
3.2 |
Purchases/sales of treasury shares |
(1.1) |
(50.8) |
Dividends paid |
(13.3) |
(9.8) |
Increase in borrowings and other debt |
- |
42.3 |
Repayment of borrowings and other debt |
(0.1) |
(2.9) |
Repayment of amounts owed to shareholders |
(0.2) |
- |
Repayment of lease liabilities and interest |
(63.9) |
(61.1) |
Interest paid |
(13.8) |
(31.1) |
Net cash generated used in financing
activities |
(89.5) |
(110.2) |
Impact of currency translation differences |
(16.5) |
12.5 |
Net increase/(decrease)
in cash and cash equivalents |
27.4 |
23.7 |
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 |
1,683.1 |
1,434.1 |
o/w cash and cash equivalents |
1,687.7 |
1,449.0 |
o/w bank overdrafts |
(4.6) |
(14.9) |
-
APPENDIX 5: DETAILED NET FINANCIAL EXPENSE
NET FINANCIAL EXPENSE |
|
|
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
Finance costs,
net |
(24.6) |
(38.9) |
Foreign exchange gains |
14.2 |
14.2 |
Interest cost on pension plans |
(1.5) |
0.8 |
Other |
(3.3) |
(5.6) |
Net financial
expense |
(15.2) |
(29.5) |
-
APPENDIX 6: ALTERNATIVE PERFORMANCE INDICATORS
ADJUSTED OPERATING PROFIT |
|
|
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
Operating profit |
372.9 |
375.2 |
Amortization of intangible assets resulting from acquisitions |
21.1 |
21.9 |
Impairment and retirement of non-current assets |
21.4 |
3.7 |
Restructuring costs |
18.6 |
8.9 |
Acquisitions and disposals |
0.2 |
1.1 |
Total adjustment items |
61.3 |
35.7 |
Adjusted operating profit |
434.2 |
410.9 |
CHANGE IN ADJUSTED OPERATING PROFIT |
|
IN EUR MILLIONS |
|
H1 2022 adjusted
operating profit |
410.9 |
Organic change |
36.8 |
Organic adjusted
operating profit |
447.7 |
Scope |
5.2 |
Constant currency adjusted operating profit |
452.9 |
Currency |
(18.7) |
H1 2023 adjusted
operating profit |
434.2 |
ADJUSTED EFFECTIVE TAX RATE |
|
|
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
Profit before income tax |
358.0 |
345.8 |
Income tax expense |
(113.2) |
(111.1) |
ETR(a) |
31.6% |
32.1% |
Adjusted
ETR(b) |
30.7% |
31.3% |
(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 2023 |
H1 2022 |
Attributable net profit |
232.5 |
225.2 |
EPS(a) (€ per share) |
0.51 |
0.50 |
Adjustment items |
61.3 |
35.7 |
Tax impact on adjustment items |
(15.6) |
(8.4) |
Non-controlling interest on adjustment items |
(1.9) |
(3.9) |
Adjusted attributable net
profit |
276.3 |
248.6 |
Adjusted EPS(a) (€ per share) |
0.61 |
0.55 |
(a) Calculated using the weighted average number of shares:
452,412,873 in H1 2023 and 452,052,884 in H1 2022. |
CHANGE IN ADJUSTED ATTRIBUTABLE NET PROFIT |
IN EUR MILLIONS |
|
H1 2022 adjusted attributable net
profit |
248.6 |
Organic change and scope |
42.1 |
Adjusted
attributable net profit
at constant currency |
290.7 |
Currency |
14.4 |
H1 2023
adjusted attributable net profit |
276.3 |
FREE CASH FLOW |
|
|
|
IN EUR MILLIONS |
H1 2023 |
H1 2022 |
|
Net cash generated from operating activities (operating cash
flow) |
222.1 |
213.0 |
|
Net purchases of property, plant and equipment and intangible
assets |
(76.4) |
(52.0) |
|
Interest paid |
(13.8) |
(31.1) |
|
Free cash flow |
131.9 |
129.9 |
|
CHANGE IN NET CASH GENERATED FROM OPERATING ACTIVITIES |
IN EUR MILLIONS |
|
Net cash generated from operating activities
at June 30, 2022 |
213.0 |
Organic change |
11.0 |
Organic net cash
generated from operating activities |
224.0 |
Scope |
4.3 |
Net cash generated from operating activities at constant
currency |
228.3 |
Currency |
(6.2) |
Net cash generated from operating activities
at June 30, 2023 |
222.1 |
ADJUSTED NET FINANCIAL DEBT |
|
|
IN EUR MILLIONS |
JUNE 30, 2023 |
DEC. 31 2022 |
Gross financial debt |
2,621.7 |
2,637.4 |
Cash and cash equivalents |
1,687.7 |
1,662.1 |
Consolidated net financial debt |
934.0 |
975.3 |
Currency hedging instruments |
(3.2) |
- |
Adjusted net
financial debt |
930.8 |
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 Net cash generated from operating
activities/Adjusted Operating Profit.
3 Net cash generated from operating
activities/Adjusted Operating Profit.
4 TAR: Total Accident Rate (number of accidents
with and without lost time x 200,000/number of hours worked).
5 Proportion of women on the Executive Committee
in Band II (internal grade corresponding to an 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).
6 Indicator calculated over a 6-month period
compared to a 12-month period for FY 2022 and 2025 target
values.
7
Greenhouse gas
emissions from offices and laboratories, 12 months trailing tons of
CO2 equivalent per employee and per year for Scopes 1, 2 and 3
(emissions related to business travel).
8 The Technology segment comprises Electrical
& Electronics, Wireless testing activities and Automotive
connectivity testing activities.
- BUREAU VERITAS - 2023 07 26_Press release H1 2023 (0.56
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