Bureau Veritas: Early Impact of the New LEAP | 28 Strategy Boosting Revenue and Improving Margins1 i

H1 2024 Key figures2

› Revenue of EUR 3,021.7 million in the first half of 2024, up 4.0% year on year and up 9.2% organically (including 10.4% in the second quarter)
› Adjusted operating profit of...

H1 2024 Key figures2

› Revenue of EUR 3,021.7 million in the first half of 2024, up 4.0% year on year and up 9.2% organically (including 10.4% in the second quarter)
› Adjusted operating profit of EUR 451.9 million, up 4.1% versus EUR 434.2 million in H1 2023, representing an adjusted operating margin of 15.0%, up 29 basis points organically year-on-year
› Operating profit of EUR 388.5 million, up 4.2% versus EUR 372.9 million in H1 2023
› Adjusted net profit of EUR 288.3 million, up 4.3% versus EUR 276.3 million in H1 2023
› Attributable net profit of EUR 234.3 million, up 0.8% versus EUR 232.5 million in H1 2023
› Free cash flow of EUR 189.9 million, up 44% year
› Adjusted net debt/EBITDA ratio kept at a low level of 1.06x as of June 30, 2024, versus 0.95x last year

H1 2024 Highlights

› Ongoing execution of the new strategy LEAP | 28, announced on March 20, 2024. The strategy intends to deliver a step change in growth and performance, built around three pillars: Focused Portfolio, Performance-led Execution and an Evolved People model
› Strong growth recorded in most regions (Americas, Middle East, Africa and Asia-Pacific)
› Growth momentum maintained for sustainability services across the entire portfolio
› Acquisition of four bolt-on companies for a total cumulated annualized revenue of c. EUR 41 million in line with the LEAP | 28 portfolio strategy of creating new strongholds in i) Cybersecurity (one acquisition); ii) Consumer Products Services Technology (three acquisitions)
› Completion of the EUR 200 million share buyback program (c. 1.6% of the Group’s shares) announced in March at the Capital Markets Day. The program was executed in two steps (phase one through the Wendel Group market placement and phase two directly on the market)
› Inaugural rated issuance of a EUR 500 million bond following the assignment of the first long-term A3 credit rating for Bureau Veritas (with a “stable” outlook) delivered by Moody’s

2024 Outlook upgraded

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

› High single-digit organic revenue growth (from mid-to-high single-digit previously).
› Improvement in adjusted operating margin at constant exchange rates.
› Strong cash flow, with a cash conversion3 above 90%.

The Group expects H2 organic revenue growth to be broadly in line with H1.

NEUILLY-SUR-SEINE, France -- (BUSINESS WIRE) --

Hinda Gharbi, Chief Executive Officer, commented:
“In the first half of the year, we kick started the execution of our LEAP I 28 strategy which was launched at the end of March 2024. Our H1 results confirm our commitment to a step change in growth and returns with organic growth of 9.2%, a solid organic margin improvement of 29 basis points and EPS growth of 16% at constant currency. I thank all my colleagues around the world for these excellent results. We are also actively managing our portfolio through an accelerated M&A program with four acquisitions completed since the beginning of the year. In addition, we have completed our EUR 200 million share buyback program announced in March 2024. Finally, in light of our strong first half performance, our robust backlog and considering our focused operational execution, we are upgrading our revenue outlook for 2024.”

H1 2024 KEY FIGURES

The Board of Directors of Bureau Veritas met on July 25, 2024, and approved the financial statements for the first half of 2024 (H1 2024). The main consolidated financial items are:

IN EUR MILLIONS	H1 2024	H1 2023	CHANGE	CONSTANT CURRENCY
Revenue	3,021.7	2,904.2	+4.0%	+9.3%
Adjusted operating profit(a)	451.9	434.2	+4.1%	+11.6%
Adjusted operating margin(a)	15.0%	15.0%	(0)bps	+33bps
Operating profit	388.5	372.9	+4.2%	+12.9%
Adjusted net profit(a)	288.3	276.3	+4.3%	+16.1%
Attributable net profit	234.3	232.5	+0.8%	+14.5%
Adjusted EPS(a)	0.64	0.61	+4.5%	+16.3%
EPS	0.52	0.51	+0.9%	+14.7%
Operating cash-flow	262.4	222.1	+18.1%	+32.6%
Free cash flow(a)	189.9	131.9	+44.0%	+65.0%
Adjusted net financial debt(a)	1,112.2	930.8	+19.5%
(a) Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 8 of this press release

H1 2024 HIGHLIGHTS

› Strong organic revenue growth across the board throughout the first half

Group revenue in the first half of 2024 increased by 9.2% organically compared to the first half of 2023, including 10.4% in the second quarter, benefiting from robust underlying trends across businesses and geographies.

This is reflected by business as follows:

› Over a third of the portfolio (Marine & Offshore, Industry, and Certification) achieved robust double-digit organic revenue growth in the first half, ranging from 14.7% to 17.5%. These divisions benefited from sustained trends in decarbonization and the energy transition, particularly for Marine & Offshore and Industry. Additionally, the Certification segment experienced strong demand for sustainability and ESG-driven services.
› An eighth of the portfolio (Consumer Products Services) delivered high single-digit organic revenue growth (up 7.3%). The growth was led by the consumer segment in most geographies and by its strategy of geography, sector, and services diversification.
› Half of the portfolio, including Buildings & Infrastructure and Agri-Food & Commodities, achieved mid-single-digit organic revenue growth (up 4.3% and 4.6% respectively).

› Solid financial position

At the end of June 2024, the Group's adjusted net financial debt increased compared to the level as of December 31, 2023, as a result of the use of cash and cash equivalents linked to the EUR 200 million share buyback program executed in Q2. The Group has a solid financial structure with most of its maturities beyond 2026.

Bureau Veritas had EUR 1.5 billion in available cash and cash equivalents, and EUR 600 million in undrawn committed credit lines as of June 30, 2024. The adjusted net financial debt/EBITDA ratio was maintained at a low level of 1.06x (from 0.95x last year).

The average maturity of the Group’s financial debt was 4.9 years, with a blended average cost of funds over the half year of 2.9% (excluding the impact of IFRS 16), compared to 2.7% at December 31, 2023.

› Bureau Veritas shareholders approved the distribution of a dividend for the 2023 financial year

At the Bureau Veritas Annual Shareholders’ Meeting, shareholders approved the distribution of a dividend of EUR 0.83 per share for the 2023 financial year (3rd resolution, approved at 99.99%), paid in cash on July 4, 2024.

› 2024 share buyback program

The Group executed the EUR 200 million share buyback program announced on March 20, 2024, as follows:

› an acquisition of c. 0.8% of the Group’s shares or the equivalent of EUR 100 million on April 5, 2024, completed under the Wendel placement.
› an additional acquisition of the remaining EUR 100 million, completed by the Group through the market in May and June 2024, of an additional c. 0.8% of its shares.

As of June 30, 2024, the entire program had therefore been completed.

In accordance with the purpose of the share buyback program approved by the Annual Shareholders’ Meeting, the shares bought back will be used for cancellation purposes and for any other purposes authorized by the Company’s shareholders at the Annual Shareholders’ Meeting of June 22, 2023.

› First A3 long-term credit rating by Moody’s and inaugural A3 rated bond issuance of EUR 500 million with a May 2036 maturity

On April 24, 2024, Bureau Veritas announced that it had been assigned its first long-term credit rating of A3 by Moody’s, with a “stable” outlook. This long-term credit rating will help Bureau Veritas in further diversifying its sources of funding, gaining enhanced access to capital markets, and managing debt maturities in line with the Group’s strategy. The full rating report is available on moodys.com.

Subsequently, on May 16, 2024, the Group announced the successful completion of a EUR 500 million A3 rated new bond issuance maturing in May 2036 and carrying a coupon of 3.5%. The final orderbook amounted to more than EUR 1.5 billion, which represents three times the targeted amount. Such a high level of oversubscription enabled Bureau Veritas to price with a final spread much below initial price indications. This underlines the strong confidence of investors in Bureau Veritas’ business model as well as the quality of its credit profile.

This issuance allows Bureau Veritas to seize attractive market conditions for general corporate purposes, including the refinancing of its bond maturing in January 2025, thereby lengthening the average maturity of its debt.

FOCUSED PORTFOLIO

In line with the LEAP | 28 strategy of active portfolio management and to focus the portfolio on market leadership positions, Bureau Veritas has activated an M&A program to develop new market strongholds:

› in Cybersecurity: in July 2024, the Group signed an agreement to acquire Security Innovation, a US-based player specialized in software security services focused on software testing, SDLC advisory (Secure Software Development Lifecycle) and training. It realized revenues of c. EUR 21 million in 2023.
› in Consumer Technology Testing: the Group signed definitive agreements to acquire three players in Asia. They will expand its position in testing and certification services for the Electrical and Electronics consumer products segment. The acquired companies’ revenue was a combined c. EUR 20 million in 2023.

	ANNUALIZED REVENUE	COUNTRY/ AREA	SIGNING DATE	FIELD OF EXPERTISE
Cybersecurity
Security Innovation	EUR 21m	USA	July 2024	Software security services company focused on software testing, SDLC advisory & training
Consumer Products Services
OneTech Corp.	EUR 12m	South Korea	March 2024	Testing and certification services for Electrical and Electronics consumer products
Kostec Co., Ltd	EUR 5m	South Korea	March 2024	Testing and certification services for Electrical and Electronics consumer products
Hi Physix Laboratory India Pvt.	EUR 3m	India	March 2024	Electrical and electronics products testing and certification services laboratory

For more information, the press release is available by clicking here.
As part of its active portfolio management strategy, the Group signed an agreement for the divestment of a non-core technical supervision business on construction projects in China in June 2024. This business represents less than EUR 30 million in annualized revenue.

CORPORATE SOCIAL RESPONSIBILITY COMMITMENTS

› Corporate Social Responsibility (CSR) key indicators

	UNITED NATIONS’ SDGS	H1 2024	2023	2028 TARGET
ENVIRONMENT / NATURAL CAPITAL
CO2 emissions (Scopes 1 & 2, 1,000 tons)4	#13	147	149	107
SOCIAL & HUMAN CAPITAL
Total Accident Rate (TAR)5	#3	0.25	0.25	0.23
Gender balance in senior leadership (EC-II)6	#5	28.4%	29.3%	36%
Number of learning hours per employee (per year)7	#8	13.9	36.1	40.0
GOVERNANCE
Proportion of employees trained to the Code of Ethics	#16	98.8%	97.4%	99.0%

› Bureau Veritas joins the United Nations Global Compact

On February 26, 2024, Bureau Veritas announced that it had joined the United Nations Global Compact, the world’s largest corporate social responsibility (CSR) initiative. With this move, the Group confirms its commitment to abiding by the Ten Principles of the voluntary initiative, which seeks to advance universal principles on human rights, labor, the environment, and anti-corruption.

› Strong recognition by non-financial rating agencies

On March 7, 2024, the Group was ranked first in its category by Morningstar Sustainalytics. With a 9.1 rating, the Group ranks first in the ‘Research and Consulting’ category out of 72 companies and is now classified in the “Negligible risk” category.

› 2024 Transparency Awards

On July 4, 2024, Bureau Veritas was awarded the 2024 Transparency Award by Labrador in the "CAC Large 60" category. This award acknowledges the CAC Large 60 company with the highest score across 337 evaluation criteria from three public information sources: the Universal Registration Document, the Notice of Meeting for the Annual Shareholders' Meeting and the company website. In addition, the Group made remarkable progress in the overall ranking of the most transparent companies, coming 3rd out of the 121 companies evaluated this year.

OPERATIONAL APPOINTMENTS

› Khurram Majeed appointed Executive Vice-President, Commodities, Industry and Facilities, Middle East, Caspian and Africa

On April 1, 2024, Khurram Majeed became Executive Vice-President, Commodities, Industry and Facilities, for the Middle East, Caspian and Africa. With this role, the Group aims to leverage the full potential of the growing market opportunities in this region. This is a dynamic region undergoing several developments in natural resources, construction and industrial sectors. This new regional organization will also allow Bureau Veritas to strengthen its customer intimacy, to scale solutions faster and to increase resource utilization.