| NEUILLY-SUR-SEINE, FRANCE--(Business Wire / Korea Newswire)--Q3 2024 Key figures[1] Hinda Gharbi, CEO Bureau Veritas (Photo: Business Wire) › Strong organic growth from all businesses compared to the third quarter of 2023: with Industry at +23.8%, Certification at +17.7%, Marine & Offshore at +13.2%, Buildings & Infrastructure at +9.3%, Agri-Food & Commodities at +8.5% and Consumer Products Services at +7.5%, › Positive scope effect of 0.5% in the third quarter of 2024, reflecting the accelerated pace of acquisitions with multiple bolt-on deals (+1.1% contribution) realized net of disposals (-0.6% contribution), › Negative currency impact of 4.7%, resulting from the strength of the euro against most currencies. Q3 2024 Highlights › Active management of the portfolio in line with the LEAP | 28 strategy, › Consistent growth in every region (Americas, Middle East, Africa, Asia-Pacific), outperforming respective underlying markets, › Growth momentum maintained for sustainability services, both for Transition services and Green Objects, › An acceleration of the Group’s M&A programs with three transactions signed for a total annualized revenue of c. EUR 40 million in line with the LEAP | 28 portfolio strategy: the first one to expand leadership in the B&I stronghold, the second and third ones to create new strongholds in Renewables, and in Sustainability, › As the Group optimizes value and impact of some of its businesses it has signed an agreement to sell its Food testing business (EUR 133 million in revenue in 2023) to Mérieux NutriSciences for an Enterprise Value of EUR 360 million and net proceeds from disposals of around EUR 290 million. The deal is expected to be broadly neutral on EPS. 2024 Outlook upgraded Based on the 9-month performance, leveraging a healthy and growing sales pipeline and strong underlying market growth, Bureau Veritas now expects to deliver for the full year 2024: › 9 to 10% organic revenue growth (from “high single-digit” previously); › Improvement in adjusted operating margin at constant exchange rates; › Strong cash flow, with a cash conversion2 above 90%. Hinda Gharbi, Chief Executive Officer, commented: “We continued the execution of our LEAP |28 strategy in the third quarter, and we are actively managing our portfolio. We have completed three acquisitions, representing a total cumulative annualized revenue of c. EUR 40 million for the transactions signed this quarter, and of c. EUR 80 million for the total seven acquisitions signed this year. We have also entered into an agreement to sell our food testing business. The transaction strengthens our balance sheet and gives us greater flexibility in implementing our acquisition plans.” “In Q3, we maintained a strong growth trajectory with an organic growth of 13.0% driven by the entire portfolio. Year to date this equates to an organic growth of 10.5%.” “For the rest of the year and in light of our strong 9 months growth, our robust backlog and our focused operational execution, we are upgrading our 2024 revenue outlook for the second time this year.” Q3 2024 KEY FIGURES (To view the table, please visit https://www.businesswire.com/news/home/20241023040612/en/) › Strong organic revenue growth across the full portfolio and all geographies Revenue in the third quarter of 2024 amounted to EUR 1,547.9 million, an 8.8% increase compared to Q3 2023. Organic growth achieved a strong 13.0% which led to 10.5% on a 9-month basis. Three businesses delivered very strong organic growth: Marine & Offshore, up 13.2%, Industry, up 23.8%, and Certification, up 17.7%. Buildings & Infrastructure further recovered, up 9.3% organically in the third quarter (after 4.3% in the first half) while both Consumer Products Services and Agri Food & Commodities grew high-single digits organically, both reflecting improving market trends. By geography, the Americas (28% of revenue, up 18.3% organically) delivered strong growth led by a double-digit increase in both Latin America and in the US. Europe (33% of revenue, up 7.5% organically) recorded robust growth, primarily led by high activity levels in France and in Southern and Eastern European countries. Business in Asia-Pacific (29% of revenue, up 10.4% organically) benefited from robust growth in China, and double-digit growth for Australia and India. Finally, activity was also very strong in Africa and the Middle East (10% of revenue, up 23.4% organically), supported by Buildings & Infrastructure and energy projects in the Middle East. The scope effect was a positive 0.5%, reflecting bolt-on acquisitions (contributing to +1.1%) realized in the past few quarters and partly offset by the impact of small divestments completed over the last twelve months (contributing to -0.6%). Currency fluctuations had a negative impact of 4.7%, due to the strength of the euro against most currencies. › Solid financial position By September 30th, 2024, net financial debt was higher than that of June 30th, 2024, due to dividend payments in July 2024. The Group had EUR 1.2 billion in available cash and cash equivalents, and EUR 600 million in undrawn committed credit lines. The Group has a solid financial structure with most of its debt maturities beyond 2026 and 100% at fixed interest rates. FOCUSED PORTFOLIO In line with the LEAP | 28 strategy to focus its portfolio on businesses with top leadership market position, the Group is actively managing its portfolio, and it has activated a targeted M&A program to attain its objectives: › In Buildings & Infrastructure: - In October 2024, Bureau Veritas announced the acquisition of IDP Group, a leading independent provider of Building Information Modeling (BIM), Project Management Assistance and Digital Twin services for the public and private sector, with strong positioning in decarbonization and other high-value verticals. IDP realized revenues of c. EUR 30 million in 2023. This acquisition will expand Bureau Veritas’ B&I services by enhancing its global end-to-end operational capabilities, leveraging innovative BIM expertise, consulting and Digital Twin asset digitalization. › In Renewables and Sustainability related businesses: - The Group acquired ArcVera Renewables in September 2024, a specialized provider in finance-grade consulting and technical services for wind, solar, and battery storage projects worldwide. It generated revenues of c. EUR 6 million in 2023. - In October 2024, Bureau Veritas also acquired Aligned Incentives, a provider of Enterprise sustainability planning platform and aggregator, enabling companies to measure their Scope 3 GHG emissions and compute life-cycle analysis at industrial level. With tremendous potential for scaling up, Aligned Incentives combines top-tier ESG advisory services, and an extensive database supported by AI-Powered enterprise sustainability planning. It generated revenues of EUR 3 million in 2023. As it pursues its active portfolio management to optimize value and impact of its portfolio the Group entered into an agreement to sell its Food testing business (EUR 133 million in revenue in 2023) to Mérieux NutriSciences for an Enterprise Value of EUR 360 million and net proceeds from disposals of around EUR 290 million. This operation will slightly enhance the Group’s adjusted operating margin and is neutral on the attributable adjusted net profit as of 2025. The transaction is expected to close by the end of the fourth quarter of 2024 once customary closing conditions have been met, including regulatory clearance in certain geographies. The proceeds will help finance the accelerated M&A plans of the LEAP I 28 strategy. (To view the table, please visit https://www.businesswire.com/news/home/20241023040612/en/) Year-to-date, the Group acquired or entered into agreements for: · The acquisition of seven companies, representing an annualized cumulated revenue of c.EUR 80 million. · The divestment of two companies, representing an annualized cumulated revenue of c.EUR 165 million. For more information, the press releases are available by clicking here. CORPORATE SOCIAL RESPONSIBILITY COMMITMENTS › Corporate Social Responsibility (CSR) key indicators (To view the table, please visit https://www.businesswire.com/news/home/20241023040612/en/) › Bureau Veritas received Gold Medal from EcoVadis On October 11, 2024, Bureau Veritas was awarded the Gold Medal from EcoVadis, (with a score of 77/100) recognizing its commitment to Shaping a Better World. This distinction places Bureau Veritas in the top 5% of companies rated by EcoVadis, and highlights its efforts to uphold ethical labor practices, reduce environmental impact, and promote transparency and responsibility in business. › Multiple recognitions by non-financial rating agencies Bureau Veritas ranks second among 184 companies in the S&P Global Corporate Sustainability Assessment (CSA) for the Professional Services Industry category - encompassing the TIC sector - with a score of 84/100 for 2024. This achievement illustrates the engagement of its 83,000 Trust Makers, at all levels of the company, to advance its sustainability agenda. MSCI has rated Bureau Veritas AA for its environmental, social responsibility and governance (ESG) performance, the same level as in 2023, with a score of 6.3. The Group has the best score in Environment (10), improved its score in Social (6.3) and has a score of 5.8 in Governance. 2024 OUTLOOK UPGRADED Based on the 9-month performance, leveraging a healthy and growing sales pipeline and strong underlying market growth, Bureau Veritas now expects to deliver for the full year 2024: › 9 to 10% organic revenue growth (from “high single-digit” previously); › Improvement in adjusted operating margin at constant exchange rates; › Strong cash flow, with a cash conversion[7] above 90%. Q3 2024 BUSINESS REVIEW MARINE & OFFSHORE (To view the table, please visit https://www.businesswire.com/news/home/20241023040612/en/) Marine & Offshore delivered a strong 13.2% organic growth in the third quarter of 2024 (and 14.2% in the first 9 months), with the following trends: › A strong double-digit increase in New Construction (43% of divisional revenue), in a dynamic construction market, led by Asian countries, especially China. › Double-digit growth in Core In-service activity (44% of divisional revenue), benefiting from volume growth from increased classed vessels. As of September 30th, 2024, the fleet classed by Bureau Veritas included 11,913 ships, up 2.4% year on year and representing 152.3 million Gross Register Tonnage (GRT). Retrofitting and upgrades to meet new environmental regulations also contributed to growth. › Low-single-digit growth in Services (13% of divisional revenue, including Offshore), with an upturn in orders in Offshore activities. The division maintains strong growth momentum as the maritime industry decarbonizes, renews its fleet, invests in digitalization, and improves its performance. The Group secured 10.8 million gross tons year-to-date bringing the order book to 26.8 million gross tons, up 24.2% compared to 21.6 million gross tons at end-September 2023. This is driven by dual fuel ships, LNG carriers, container ships and specialized vessels. Sustainability achievements During the third quarter of 2024, Bureau Veritas contributed to the development of low carbon emissions technologies and issued an Approval in Principle (AiP) to French luxury cruises operator Ponant for its new wind assisted propulsion sailing passenger vessel. AGRI-FOOD & COMMODITIES |
