(AOF) – Bureau Veritas achieved turnover of 1.424 billion euros in the third quarter of 2023, up 6.1% at constant rates, including 5.8% on an organic basis. The testing, inspection and certification specialist highlights that the third quarter was “particularly strong in the previous year”. Internal growth was supported by the Marine & Offshore activity (+13.4%), Industry (+16.2%) and Certification (+11.7%). Revenues fell by 2.3% in published data.
“Based on the performance of the first nine months, the solid sales pipeline and the significant growth opportunities linked to Sustainability and the energy transition”, Bureau Veritas expects for the full year 2023 to deliver moderate organic growth to high single-digit turnover; a stable adjusted operating margin at constant exchange rate and cash flow at a high level, with a cash conversion rate above 90%.
AOF – LEARN MORE
Key points
– Group born in 1828, world number one (5% of the market) in the market for inspection and certification of products and laboratory testing;
– Turnover of €5.65 billion generated by six divisions: construction & infrastructure (29%), agri-food & raw materials (22%), industry (21%), consumer goods (13%), certification (8%) and marine&offshore;
– Turnover distributed between Europe for 34%, Asia-Pacific for 30% (including China, the group’s leading country in terms of workforce and turnover, for 18% of the total), America for 27% and Africa-Middle East;
– Business model based on the exploitation of the value of existing activities and technological changes and on the selectivity of growth opportunities;
– Capital controlled 35.48% by Wendel, Aldo Cardoso chairing the board of directors of 12 members, Didier Michaud-Daniel, general manager, leaving his place to Hinda Gharbi on June 22;
– Solid balance sheet with €1.9 billion in equity, €975 million in net debt with leverage of 0.97 and €2.3 billion in cash, the borrowings all being at fixed rates with maturities beyond 2024 .
Challenges
– 2025 strategy based on 3 growth drivers:
– scale (standardization of the offer), expand (energy transition and sustainability issues) and lead (in connectivity, cybersecurity and traceability),
– single-digit annual revenue growth and operating margin of +16%;
– Innovation strategy broken down into 2 aspects:
– ICT technology digitalizing the core of operations via global and vertical transversal platforms, improving the profitability of existing ICT services,
– ICT for technology identifying the best additional revenue opportunities – traceability, asset monitoring, cybersecurity compliance diagnostics, etc.
– accelerated via incubation programs, Data lab, research or industrial partnerships;
– Environmental strategy driven by the internal Clarity solution and validated by the SBTi:
– by 2030, reduction of 42% vs. 2021 in CO2 emissions for scopes 1 and 2 and 25% for scope 3,
– 55% of sales from BV green line services;
– support for customers with the provision of Clarity solutions;
– Resistance of the business portfolio, 45% coming from long contracts;
– 3 assets: reputation for integrity, public approvals and accreditations, network density.
Challenges
– Reduction of presence in China-Ukraine (1% of revenues) and negative impact on operating margin of end-of-year closures in China;
– Differences in margins between divisions, with construction and industry activities having the lowest margins;
– Impact of inflation on salaries mainly, passed on to sales prices;
– After an 8.9% increase in revenues at the end of March, 2023 objectives of moderate revenue growth and stable operating margin;
– 2022 dividend up 45% to €0.77, or 65% distribution rate.
Sector sheet – Business services
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