PRESS RELEASE
Solid organic revenue growth in the third quarter;
2023 outlook confirmed
Q3 2023 Key Figures1
- Revenue of
EUR 1,423.8 million in the third quarter of 2023, up 6.1% at constant currency, of which 5.8% organic - Strong organic growth from Marine & Offshore +13.4%, Industry +16.2% and Certification +11.7% compared to the third quarter of 2022; growth of +2.6% for
Agri-Food & Commodities; and flat organic growth for both Buildings & Infrastructure and Consumer Products Services - Positive scope effect of 0.3% in the third quarter of 2023, reflecting bolt-on deals realized last year net of disposals
- Negative currency impact of 8.4%, resulted from the strength of the euro against most currencies
Q3 2023 Highlights
- Growth driven by all geographies (
Middle East ,Africa ,Americas ,Europe , andAsia Pacific ) - Strong momentum maintained for Sustainability and energy transition solutions across the portfolio, representing 55% of Group sales through the BV Green Line of services and solutions
- Strategic partnership investment with OrbitMI, a US based maritime software company, for shipping journeys performance management
2023 Outlook confirmed
Based on the 9-month performance, a healthy sales pipeline and the significant growth opportunities related to Sustainability and energy transition,
- mid-to-high single-digit organic revenue growth;
- a stable adjusted operating margin at constant exchange rates;
- strong cash flow, with a cash conversion2 above 90%.
“Our operations continue to deliver robust growth through consistent contract execution and to develop business opportunities for the future. Our performance in the third quarter is as expected, after a particularly strong Q3 last year. Our strategic focus is firmly on high growth markets such as sustainability and energy transition and on ensuring that our business mix and investments generate long-term value for the company and our stakeholders.
To that effect, we are reinforcing Bureau Veritas’ leadership in sustainability services, by augmenting our capabilities through partnerships. In Q3, we signed a promising partnership with Capgemini to provide our customers with ESG digital tools. We have also formed a strategic partnership and invested in a US software company focused on enabling shipping decarbonization through journeys performance management.”
- Q3 2023 KEY REVENUE FIGURES
GROWTH | ||||||
IN EUR MILLIONS | Q3 2023 | Q3 2022 | CHANGE | ORGANIC | CURRENCY | |
Marine & Offshore | 110.0 | 104.7 | +5.1% | +13.4% | - | (8.3)% |
305.5 | 323.9 | (5.7)% | +2.6% | - | (8.3)% | |
Industry | 309.0 | 305.0 | +1.3% | +16.2% | (1.4)% | (13.5)% |
Buildings & Infrastructure | 413.8 | 427.2 | (3.1)% | +0.1% | +1.4% | (4.6)% |
Certification | 106.7 | 101.2 | +5.4% | +11.7% | - | (6.3)% |
Consumer Products Services | 178.8 | 195.1 | (8.4)% | - | +0.9% | (9.3)% |
1,423.8 | 1,457.1 | (2.3)% | +5.8% | +0.3% | (8.4)% |
Revenue in the third quarter of 2023 amounted to
Leading the growth in Q3 were the three activities, Marine & Offshore, Industry and Certification, which delivered double-digit organic growth, driven by the continued momentum in Sustainability and ESG, including marine decarbonization and renewable energy projects.
By geography, activities in
The scope effect was a positive 0.3%, reflecting bolt-on acquisitions realized last year, largely offset by a minor disposal.
Currency fluctuations had a significant negative impact of 8.4%, mainly due to the strength of the euro against USD and pegged currencies and some emerging countries’ currencies.
- SOLID FINANCIAL POSITION
At
- 2023 OUTLOOK CONFIRMED
Based on the 9-month performance, a healthy sales pipeline and the significant growth opportunities related to Sustainability and energy transition,
- mid-to-high single-digit organic revenue growth;
- a stable adjusted operating margin at constant exchange rates;
- strong cash flow, with a cash conversion3 above 90%.
- COMMITMENT TOWARDS EXTRA-FINANCIAL PERFORMANCE
Corporate Social Responsibility (CSR) key indicators
UNITED NATIONS’ SDGS | 9M 2023 | FY 2022 | 2025 target | |
SOCIAL & HUMAN CAPITAL | ||||
Total Accident Rate (TAR) 4 | #3 | 0.24 | 0.26 | 0.26 |
Proportion of women in leadership positions5 | #5 | 27.5% | 29.1% | 35.0% |
Number of learning hours per employee (per year)6 | #8 | 22.9 | 32.5 | 35.0 |
ENVIRONMENT | ||||
CO2 emissions per employee (tons per year) 7 | #13 | 2.39 | 2.32 | 2.00 |
GOVERNANCE | ||||
Proportion of employees trained to the Code of Ethics | #16 | 96.8% | 97.1% | 99.0% |
Bureau Veritas’ joined CAC SBT 1.5° index
On
This announcement comes in the wake of the SBTi’s validation last June of the Group’s commitments to:
- Reduce its absolute scopes 1 and 2 greenhouse gas (GHG) emissions by 42% (from 2021 levels) by 2030;
- Reduce its absolute scope 3 GHG emissions by 25% over the same period.
The Group is also included in various Sustainability indices, such as the DJSI and Axylia’s Vérité 40, and features in S&P Global’s Sustainability Yearbook 2022.
- Q3 2023 BUSINESS REVIEW
MARINE & OFFSHORE
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 110.0 | 104.7 | +5.1% | +13.4% | - | (8.3)% |
9M revenue | 338.6 | 309.2 | +9.5% | +14.8% | - | (5.3)% |
The Marine & Offshore business was among the best performing businesses within the Group’s portfolio in the third quarter of 2023 with organic growth of 13.4% (9-month organic revenue growth of 14.8%) led by all geographies and activities:
- Double-digit organic revenue growth in
New Construction (41% of divisional revenue), reflecting the solid backlog and acceleration of new order conversion, pushed by sector drivers across the shipping industry (renewal of the world ageing fleet and decarbonization regulations). - Double-digit organic revenue growth in the Core In-service activity (45% of divisional revenue), still led by a sustained high level of occasional surveys, especially on old ships, combined with price increases and the growth of the classified fleet. Slower growth rate in percentage terms remains expected in Q4 after an exceptionally strong Q4 2022 linked to one-off regulatory benefits. At
September 30, 2023 , the fleet classified byBureau Veritas comprised 11,635 ships, representing 147.2 million of Gross Register Tonnage (GRT). - High-single digit organic revenue growth for Services (14% 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.
Marine & Offshore continued to focus on efficiency levers through digitalization and high added-value services. In
Sustainability achievements
This quarter,
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 305.5 | 323.9 | (5.7)% | +2.6% | - | (8.3)% |
9M revenue | 917.1 | 911.9 | +0.6% | +5.1% | - | (4.5)% |
The
Oil & Petrochemicals (O&P, 31% of divisional revenue) achieved low-single digit organic revenue growth overall. While
Throughout the third quarter, non-trade related services and value-added segments such as Verifuel bunker quantity services continued to expand across O&P. Elsewhere, the Group continues to benefit from sustained good demand for its new initiatives around biofuels and OCM (Oil Condition Monitoring).
Metals & Minerals (M&M, 32% of divisional revenue) faced contrasting trends. Upstream activity’s (nearly two-thirds of M&M) underlying trends are solid, but the growth rate was mitigated by the strong Q3 2022. The Group continued to benefit from the success of its on-site laboratories’ strategy with important wins this quarter. In mining related testing, the
Government services (15% of divisional revenue) recorded high single-digit organic revenue growth in the third quarter, with a sustained strong growth delivered in
Sustainability achievements
In the third quarter of 2023, the group provided cargo inspection and sampling services on biofuels products made from multi-seed crush and vegetable oils on behalf of an American global food corporation in
INDUSTRY
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 309.0 | 305.0 | +1.3% | +16.2% | (1.4)% | (13.5)% |
9M revenue | 927.3 | 867.4 | +6.9% | +15.8% | (0.5)% | (8.4)% |
Industry delivered strong organic revenue growth in the third quarter of 2023 with organic growth of 16.2%, in line with the previous quarters. This brought the 9-month organic revenue growth to 15.8%.
All segments and most geographies contributed to the divisional growth, with
By market, Power & Utilities (14% of divisional revenue) remained a growth driver for the portfolio with a double-digit organic performance for Capex activities during the third quarter. In
In Oil & Gas (33% of divisional revenue), double-digit organic revenue growth was maintained in the third quarter. The two-thirds of the business related to Opex services increased 22.9% led by the conversion of a solid sales pipeline. Capex-related activities grew double-digit organically, benefiting from to the startup of new projects in the gas sector (LNG). Large contracts ramped up in the US,
The non-energy activities performed well driven by both Opex and Capex services. They benefited from a range of drivers around ageing assets, tightening regulations, and willingness to manage assets in a more sustainable way from different industries (towards net zero targets). In
Sustainability achievements
In the third quarter of 2023,
BUILDINGS & INFRASTRUCTURE
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 413.8 | 427.2 | (3.1)% | +0.1% | +1.4% | (4.6)% |
9M revenue | 1,282.6 | 1,205.0 | +6.4% | +7.0% | +2.0% | (2.6)% |
The Buildings & Infrastructure (B&I) business achieved an organic growth of 0.1% in the third quarter of 2023 against very challenging comparables. This brought the 9-month organic revenue growth to 7.0%.
During the period, the building-in service activity outperformed the construction-related activities.
The
In
The
The
Sustainability achievements
In the third quarter of 2023, the Group was awarded several contracts in the field of energy audits and sustainability requirements. This ranges from implementing several energy audit campaigns according to the EU Energy Efficiency Directives for large asset owners to establishing a decarbonization pathway by performing energy assessments and simulating carbon trajectory for real estate owners. The Group was also selected to co-develop a sustainability standard for Unibail Rodamco Westfield, as part of its Better Places 2030 strategy, followed by audits and monitoring of the label on their european portfolio.
CERTIFICATION
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 106.7 | 101.2 | +5.4% | +11.7% | - | (6.3)% |
9M revenue | 334.5 | 310.4 | +7.7% | +11.4% | - | (3.7)% |
The Certification business recorded strong organic growth of 11.7% in the third quarter of 2023, a similar growth trend to the last two quarters (9-month organic revenue growth of 11.4%).
This was supported by both volume and price increases. The acceleration of our portfolio diversification also continued to drive growth with a quarter of the divisional revenue contributing to nearly half of the growth.
The growth was broad-based across the schemes and the geographies.
During the period, the business continued to be led by the increased client demand for more brand protection, traceability, and social responsibility commitments all along the supply chain. Double-digit growth was recorded for QHSE schemes, Supply Chain and Food Safety. Sustainability-driven solutions grew 21% fueled by a continuing high demand for verification of greenhouse gas emissions and supply chain audits on ESG topics. In the near future, it will benefit from the upcoming regulatory changes (CS3D -Corporate Sustainability Due Diligence-, EU Deforestation Regulation, EU CSRD -Corporate Sustainability Reporting Directive-) which will require more audit and certification services than done voluntarily today.
The momentum remained strong on solutions dedicated to companies around IT Service Management and information security. In particular, the Cybersecurity offering posted stellar performance similarly to H1 2023. This is due to an extremely robust commercial development and by rising demand for more control on security systems.
Sustainability achievements
In the third quarter of 2023,
During the period,
CONSUMER PRODUCTS SERVICES
IN EUR MILLIONS | 2023 | 2022 | CHANGE | ORGANIC | CURRENCY | |
Q3 revenue | 178.8 | 195.1 | (8.4)% | 0.0% | +0.9% | (9.3)% |
9M revenue | 527.9 | 546.6 | (3.4)% | (2.0)% | +4.2% | (5.6)% |
The Consumer Products Services division recorded a stable performance in the third quarter of 2023, a slight improvement compared to the first half of 2023, with varying geographical and service trends.
During the period,
Softlines, Hardlines & Toys (49% of divisional revenue) saw low-single-digit organic growth in the third quarter of 2023. Softlines showed mixed performance by country:
Health, Beauty & Household (8% of divisional revenue) recorded solid double-digit organic growth in Q3, led by the US and
Inspection & Audit services (13% of divisional revenue) maintained their growth thanks to strong momentum for Sustainability services over the course of the third quarter of 2023. This includes organic, recycling, social audits and green claim verification across most geographies.
Lastly, Technology8 (30% of divisional revenue), as expected, saw a single-digit organic contraction, 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
Sustainability achievements
In the third quarter of 2023, the Group won a contract with one of the world's leading sportswear and footwear brand to help them in their supply chain decarbonization efforts through
- PRESENTATION
- Q3 2023 revenue will be presented on
Wednesday, October 25, 2023 , at6:00 p.m. (Paris time) - An audio conference will be webcast live. Please connect to: Link to audio 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:
- Q3 2023 revenue will be presented on
-
-
- US: +1 786 697 3501
- International: +44 (0)33 0551 0200
- Password:
- FINANCIAL CALENDAR
- Full Year 2023 Results:
February 22, 2024 - Capital Markets Day:
March 20, 2024 - Q1 2024 revenue:
April 25, 2024 - Half Year 2024 Results:
July 26, 2024 - Q3 2024 revenue:
October 23, 2024
- Full Year 2023 Results:
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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: Q3 AND 9M 2023 REVENUE BY BUSINESS
IN EUR MILLIONS | Q3/9M 2023 | Q3/9M 2022(a) | CHANGE | ORGANIC | CURRENCY | |
Marine & Offshore | 110.0 | 104.7 | +5.1% | +13.4% | - | (8.3)% |
305.5 | 323.9 | (5.7)% | +2.6% | - | (8.3)% | |
Industry | 309.0 | 305.0 | +1.3% | +16.2% | (1.4)% | (13.5)% |
Buildings & Infrastructure | 413.8 | 427.2 | (3.1)% | +0.1% | +1.4% | (4.6)% |
Certification | 106.7 | 101.2 | +5.4% | +11.7% | - | (6.3)% |
Consumer Products | 178.8 | 195.1 | (8.4)% | - | +0.9% | (9.3)% |
Total Q3 revenue | 1,423.8 | 1,457.1 | (2.3)% | +5.8% | +0.3% | (8.4)% |
Marine & Offshore | 338.6 | 309.2 | +9.5% | +14.8% | - | (5.3)% |
917.1 | 911.9 | +0.6% | +5.1% | - | (4.5)% | |
Industry | 927.3 | 867.4 | +6.9% | +15.8% | (0.5)% | (8.4)% |
Buildings & Infrastructure | 1,282.6 | 1,205.0 | +6.4% | +7.0% | +2.0% | (2.6)% |
Certification | 334.5 | 310.4 | +7.7% | +11.4% | - | (3.7)% |
Consumer Products | 527.9 | 546.6 | (3.4)% | (2.0)% | +4.2% | (5.6)% |
Total 9M revenue | 4,328.0 | 4,150.5 | +4.3% | +8.1% | +1.0% | (4.8)% |
(a) Q3 and 9M 2022 figures by business have been restated following a c. €2.9 million reclassification of activities previously reported in Industry to the Buildings & Infrastructure business.
- APPENDIX 2: 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, 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.
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.
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 9-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.
Attachment
BUREAU VERITAS - 2023 10 25_Press release Q3 2023_vDEF
© OMX, source