Bureau Veritas: 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
› Adjusted operating profit of
› Operating profit of
› Adjusted net profit of
› Attributable net profit of
› Free cash flow of
› Adjusted net debt/EBITDA ratio kept at a low level of 1.06x as of
H1 2024 Highlights
› Ongoing execution of the new strategy LEAP | 28, announced on
› Strong growth recorded in most regions (
› Growth momentum maintained for sustainability services across the entire portfolio
› Acquisition of four bolt-on companies for a total cumulated annualized revenue of c.
› Completion of the
› Inaugural rated issuance of a
2024 Outlook upgraded
Leveraging a healthy and growing sales pipeline, high customer demand for ‘new economy services’ and strong underlying market growth,
› 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.
“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
H1 2024 KEY FIGURES
The Board of Directors of
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 (
› Half of the portfolio, including Buildings & Infrastructure and
› Solid financial position
At the end of
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
›
At the Bureau Veritas Annual Shareholders’ Meeting, shareholders approved the distribution of a dividend of
› 2024 share buyback program
The Group executed the
› an acquisition of c. 0.8% of the Group’s shares or the equivalent of
› an additional acquisition of the remaining
As of
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
› First A3 long-term credit rating by Moody’s and inaugural A3 rated bond issuance of
On
Subsequently, on
This issuance allows
FOCUSED PORTFOLIO
In line with the LEAP | 28 strategy of active portfolio management and to focus the portfolio on market leadership positions,
› in Cybersecurity: in
› in Consumer Technology Testing: the Group signed definitive agreements to acquire three players in
|
ANNUALIZED REVENUE |
COUNTRY/ AREA |
SIGNING DATE |
FIELD OF EXPERTISE |
|
Cybersecurity |
|
||||
Security Innovation |
|
|
July 2024 |
Software security services company focused on software testing, SDLC advisory & training |
|
|
|||||
|
|
|
|
Testing and certification services for Electrical and Electronics consumer products |
|
|
|
|
|
Testing and certification services for Electrical and Electronics consumer products |
|
Hi Physix Laboratory India Pvt. |
|
|
|
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
CORPORATE SOCIAL RESPONSIBILITY COMMITMENTS
› Corporate Social Responsibility (CSR) key indicators
|
UNITED NATIONS’
|
H1 2024 |
2023 |
2028
|
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% |
›
On
› Strong recognition by non-financial rating agencies
On
› 2024 Transparency Awards
On
OPERATIONAL APPOINTMENTS
›
On
For more information, the press release is available by clicking here .
›
On
As
2024 OUTLOOK UPGRADED
Leveraging a healthy and growing sales pipeline, high customer demand for ‘new economy services’ and strong underlying market growth,
› 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
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
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%.
By geography, growth in the
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
First half adjusted operating profit increased by 4.1% to
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,
Other adjustment items slightly increased to
-
EUR 21.5 million in amortization of intangible assets resulting from acquisitions (fromEUR 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 toConsumer Products Services and commodities-related activities (compared toEUR 18.6 million in H1 2023). -
EUR 32.8 million in net losses on disposals and acquisitions (net loss ofEUR 0.2 million in H1 2023), mainly linked to the ongoing divestment of non-core B&I activities inChina .
Operating profit totaled
› Adjusted EPS of
Net financial expense amounted to
The improvement in net finance costs to
In H1 2024, the Group recorded higher unfavorable exchange rate effects compared to the previous year, with a loss of
The interest cost on pension plans amounted to a negative
Consolidated income tax expense stood at
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
Earnings per share (EPS) was
Adjusted attributable net profit totaled
Adjusted EPS stood at
› Strong Free Cash Flow at
The half-year 2024 operating cash flow increased by 18.1% to
The working capital requirement (WCR) stood at
Purchases of property, plant and equipment and intangible assets, net of disposals (Net Capex), amounted to
Free cash flow (operating cash flow after tax, interest expenses and capex) was
CHANGE IN FREE CASH FLOW |
|
IN EUR MILLIONS |
|
Free cash flow for the period ending on |
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 |
189.9 |
As of
twelve-month EBITDA, compared to 0.92x at
› free cash flow of
› dividend payments totaling
› acquisitions (net) and repayment of amounts owed to shareholders, accounting for
› net share buyback totaling
› lease and interest payments (related to the application of IFRS 16), accounting for
› other items that increased the Group's debt by
H1 2024 BUSINESS REVIEW
MARINE & OFFSHORE
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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
› 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
› 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
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,
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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
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
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
In the first half of 2024,
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
The adjusted operating margin for the
Sustainability achievements
In the first half of 2024,
INDUSTRY
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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
Within Power & Utilities,
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
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
Elsewhere, the Environmental Testing business (10% of divisional revenue) grew high-single digits organically. In
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
BUILDINGS & INFRASTRUCTURE
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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 serviceactivity.
The
Business in
The
Lastly, in the
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
Sustainability achievements
In the second quarter of 2024, in
CERTIFICATION
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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,
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
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,
IN EUR MILLIONS |
H1 2024 |
H1 2023 |
CHANGE |
ORGANIC |
|
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
By geography,
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
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
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
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 -
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
PRESENTATION
› H1 2024 revenue will be presented on
› 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:
-
-
- US: +1 786 697 3501
- International: +44 (0) 33 0551 0200
- Password:
2024 & 2025 FINANCIAL CALENDAR
› Q3 2024 Revenue:
› FY 2024 Results:
› Q1 2025 Revenue:
ABOUT
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.
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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
APPENDIX 1: Q2 AND H1 2024 REVENUE BY BUSINESS
IN EUR MILLIONS |
Q2/H1
|
Q2/H1
|
CHANGE |
ORGANIC |
|
CURRENCY |
Marine & Offshore |
129.2 |
115.6 |
+11.8% |
+15.8% |
- |
(4.0)% |
|
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)% |
|
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 |
|
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) |
|
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 |
|
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
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 |
|
|
|
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% |
|
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
|
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 |
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 |
262.4 |
ADJUSTED NET FINANCIAL DEBT |
||
IN EUR MILLIONS |
|
|
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
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.
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.
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
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240725825440/en/
ANALYST/INVESTOR
L
aurent Brunelle
+33 (0)1 55 24 76 09
laurent.brunelle@bureauveritas.com
+33 (0)1 55 24 77 80
colin.verbrugghe@bureauveritas.com
karine.ansart@bureauveritas.com
MEDIA
+33 (0)6 69 79 84 88
anette.rey@bureauveritas.com
+33 (0) 6 14 46 79 94
martin.bovo@bureauveritas.com
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