Earnings call transcript: Bureau Veritas Q3 2025 beats revenue expectations

Bureau Veritas reported its third-quarter 2025 earnings, surpassing revenue forecasts with €1.6 billion, compared to the projected €1.57 billion. The company’s stock responded positively, increasing by 1.57% to €28.40, reflecting investor confidence in its strategic growth initiatives and market performance. According to InvestingPro analysis, Bureau Veritas currently appears undervalued, with a GOOD Financial Health Score of 2.53 out of 5, suggesting solid fundamentals despite market fluctuations.

Key Takeaways

• Bureau Veritas reported a revenue of €1.6 billion for Q3 2025, exceeding forecasts.
• Organic revenue growth stood at 6.3%, with total growth at 2.3% on a net reported basis.
• The company issued a €700 million bond to support its M&A strategy.
• Strong geographic performance, notably in Africa/Middle East with 15.7% organic growth.
• Stock price rose by 1.57% following the earnings announcement.

Company Performance

Bureau Veritas demonstrated robust performance in Q3 2025, with a focus on expanding its strategic assets such as data centers and entering high-growth markets like cybersecurity and renewable energy. The company’s organic revenue growth reached 6.3%, and it continued to strengthen its competitive position in Marine & Offshore, which saw a 16.2% organic growth. The strategic acquisitions in Spain and London further bolster its portfolio.

Financial Highlights

• Revenue: €1.6 billion, up 2.3% from the previous year.
• Organic Revenue Growth: 6.3% YoY.
• Nine-Month Organic Growth: 6.6%.
• Currency Impact: Negative 4.8%.

Earnings vs. Forecast

Bureau Veritas outperformed its revenue forecast of €1.57 billion by achieving €1.6 billion, marking a revenue surprise of 0.64%. This performance underscores the company’s effective growth strategies and operational efficiencies, despite currency headwinds.

Market Reaction

The stock price of Bureau Veritas rose by 1.57% to €28.40 in pre-market trading, signaling a positive investor response to the earnings beat. With a notably low beta of 0.12, the stock has demonstrated lower volatility compared to the market. This movement places the stock closer to its 52-week high of €31.54, reflecting optimism about the company’s strategic direction and financial health. InvestingPro subscribers can access detailed volatility metrics and comprehensive financial analysis through the Pro Research Report.

Outlook & Guidance

Bureau Veritas confirmed its 2025 financial outlook, anticipating mid to high single-digit organic revenue growth and an improvement in adjusted operating margin. The company aims to maintain strong cash flow conversion above 90% and continues its M&A strategy focused on bolt-on and mid-sized acquisitions.

Executive Commentary

Hinda Gharbi, CEO of Bureau Veritas, stated, "We are actively working on transforming our portfolio," highlighting the strategic focus on data centers and high-barrier markets. Gharbi emphasized, "Data centers are mission-critical assets with high barriers to entry," reinforcing the company’s commitment to growth in strategic sectors.

Risks and Challenges

• Currency fluctuations remain a challenge, impacting revenue negatively by 4.8%.
• Market stabilization in China, though showing signs of improvement, continues to pose risks.
• Competitive pressures in emerging markets such as Brazil and the Middle East.

Q&A

During the earnings call, analysts inquired about the organizational restructuring and its potential impact on efficiency. The company addressed growth prospects in the data center and nuclear sectors, while also discussing challenges in the Brazilian and Chinese markets.

Full transcript - Bureau Veritas SA (BVI) Q3 2025:

Conference Moderator: During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to the speakers. Hinda Gharbi, Chief Executive Officer, and François Chabas, Chief Financial Officer, please go ahead.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Good evening to everyone, and welcome to Bureau Veritas’s third quarter 2025 revenue presentation. Thank you for participating today through the webcam or the conference call. I’m joined by François Chabas, our Chief Financial Officer. Bureau Veritas has demonstrated another robust performance this quarter. We have continued to make significant progress in implementing our LEAP 28 strategic framework, leveraging Bureau Veritas’s diversified and resilient business portfolio and geographical footprint. I’d like to thank our colleagues around the world whose commitment and effort have contributed to our strong results. Starting with our revenue performance, our revenue in the third quarter reached €1.6 billion. Our organic revenue growth demonstrated remarkable resilience, progressing by a healthy 6.3% against challenging comparables. This performance demonstrates the effectiveness of our strategy and highlights our team’s strong execution capabilities.

Additionally, we continue to execute our LEAP 28 active portfolio strategy through targeted acquisitions, accounting for 3.1% of the growth and net of divestments contributing 0.8% to our revenue. These acquisitions are aligned with our portfolio objectives and contribute to further focusing our portfolio. As anticipated, the euro’s strength against most currencies resulted in a negative currency impact of 4.8% for the quarter. Based on our robust year-to-date performance and taking into account our consistent strategy execution, we confirm our 2025 financial outlook. If we look at our mix, there are several key elements I would like to highlight. All geographies and activities demonstrated resilient growth. Three of our core businesses representing 61% of our portfolio, including Buildings and Infrastructure, Industry, and Certification, grew mid to high single-digit organically, while Marine & Offshore grew a strong double-digit.

Geographically, Africa and the Middle East once again posted a strong organic growth of 15.7%, driven by Energy projects and by Buildings and Infrastructure activities in the Middle East specifically. In Asia-Pacific, we achieved an 8.6% organic growth with strong performance in South and Southeast Asia. Our performance in China recovered with a high single-digit expansion. Our European operations delivered an organic growth of 5.2%, led by activities in France and Southern Europe. Finally, the Americas region recorded a 1.9% organic growth. Our activities around Buildings and Infrastructure and Energy achieved very high growth, offsetting softness in Brazil. Excluding Brazil, our growth was over 10%. Let me now update you on our LEAP 28 strategy and the evolution of our largest business. We have been executing a strategic shift in our BNI portfolio development strategy, which is articulated in three folds.

First, geographically, we used to have three main growth platforms: Europe, the U.S., and China. Our Europe platform is well-established, mature, outperforming the market thanks to our resilient portfolio activity, predominantly geared towards the OpEx business. The U.S. is doing well in all subsegments, and we are building on this momentum to keep growing organically and to expand our capabilities inorganically. To offset China that continues to struggle from a lack of public investment, we are assessing new markets around the world. We identified growing opportunities in emerging markets in countries such as Australia, Indonesia, or the Middle East. These are growing markets where a buildup of infrastructure and urban facilities is ongoing and where we want to continue to expand our services organically and through M&A. Second, we are working on evolving our mix of services by increasing our exposure to infrastructure.

One strategic move that perfectly illustrates our growth approach is the acquisition of the APP Group in Australia last year. This transaction expands our geographical presence and enhances our capabilities, gaining critical expertise in project and construction management. Third, we are boosting our digital capabilities. The recent acquisition of IDP in Spain is a good example of what we are currently doing. This company provides building information modeling, project management assistance, and digital twin services for public and private companies. Finally, we consider that evolving market trends in the Buildings and Infrastructure space favor specific strategic and high-complexity assets that represent an opportunity for growth. Looking at some of these strategic assets, we would like to share with you the progress we have made with our data centers business. The data center construction market is growing significantly at double digits.

The overall need for data centers is driven, of course, by increasing demand for cloud services and the rapid AI technology and rapid AI technologies adoption. We are a key player for commissioning and QA/QC, quality assurance, quality control services around the electrical, mechanical, plumbing, and control systems that support data centers. The aim of these services is to ensure that the facilities deliver the expected performance and required uptime. Our strong technical expertise comes from the acquisition we completed late 2017. We have since multiplied our organic revenue by more than seven times, growing at a CAGR of 28.6%. Over the period, we expanded from 2 to 35 countries. Clients-wise, we are expanding from the hyperscalers to tier one, two, and three clients. As we look forward, we expect this business to become a critical driver of growth for BNI.

I also would like to say that we are looking very closely at such strategic assets as we consider that these are very important markets and target markets for us to expand our BNI activities. Looking now at our inorganic growth across the portfolio overall, we are showing good progress on the M&A front, with eight transactions signed or closed this year, representing an annualized revenue of €92 million. As you can see, we have been focused on the new strongholds and the expanded leadership streams in line with our LEAP 28 portfolio plans. Since the beginning of the plan in 2024, we have closed 18 acquisitions, adding over €270 million of annualized revenue. In October 2025, we signed two acquisition agreements. The first one, London Building Control, will help us strengthen our market leadership in code compliance in building and infrastructure CapEx operations in the UK.

It is a leading registered building control approver, adding €14 million of revenue. Solidas, a company specialized in technical advisory and project management assistance, grid connections mainly for wind and solar assets, will help us strengthen our capabilities in the fast-growing renewables market. This addition to our portfolio will create a global end-to-end CapEx platform serving our clients. This company generated €18 million in 2024. I will now hand over to François for the financial review of our Q3 revenue.

François Chabas, Chief Financial Officer, Bureau Veritas: Thank you, Linda. Good afternoon to everyone. Starting with the revenue bridge on the slide, as you can see, we delivered above €1.58 billion in the third quarter, with an organic growth of 6.3%. The scope part of the growth added 0.8% on a net basis. It reflects the impact of the bolt-on acquisition on the one hand, those ones realized in the past few quarters. We’re talking here about roughly plus 3.1% in accretion in terms of revenue. Second, the offset or the partial offset by the disposal of our food tasting business, which had been initiated at the end of last year, as you may remember, and that we have now completed in July this year. For rates represent a drag of minus 4.8%. This is mainly attributed to the strength of the euro versus most currencies.

In line with what we had already indicated in July to you on the call, we can model that the full-year fixed impact for 2025 should be negative by around 4%. No major changes on that front. Overall, in the quarter, we posted a total growth of 2.3% on a net reported basis. If we take a step back now on the first nine months of the year, we delivered robust organic growth for the period at 6.6%, reinforcing a commitment to consistent expansion across all markets. On a reported basis, the growth achieved 4.5%. Again here, taking into account on the scope parts, on the one hand, the acquisition, which have contributed 3.2%, and a partial offset by disposal at minus 2.1%. The net is the one you see on the page at 1.1% plus for the first nine months of the year.

If we look now at the growth by business, both on an organic point of view and a scope point of view, four divisions delivered double-digit growth at constant currency, which demonstrates the relevance and good execution of our strategy roadmap. I would like to focus on two main divisions here. First, the growth of our Buildings and Infrastructure division is particularly noteworthy, and it fully highlights the combined effect of, on the one hand, the solid earning growth momentum, coupled with the positive impact of our acquisitions. As I highlighted earlier by Linda, we delivered 10.8% growth, scope, and organic in the first nine months on some currencies. It’s starting to be the materialization of the change of our portfolio mix when it comes to Buildings and Infrastructure.

The second element I would like to draw your attention upon is the Agri-Food & Commodities division, which is in contraction at constant currency. Here again, it reflects the now fully completed divestment of our food tasting activity. Organic aggregates growth is 4.2% in the first nine months, and it reflects a different dynamic across the. Here again, we see the pivot between Buildings and Infrastructure on one end and Agri-Food & Commodities on the other hand. These two examples illustrate our active portfolio management success so far. This dynamic will continue as we execute our inorganic plans. On a side note, to support this M&A strategy, we’ve just completed a structuring financial operation. As at the end of September, we issued a bond for €700 million, leveraging on our A3 Moody’s rating to seize attractive market conditions at the time.

I will now hand over back to Hinda for the portfolio business highlights of the quarter.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thanks, François. Starting with Marine & Offshore, our top-performing division with 16.2% organic growth in the third quarter. The market remains strong, enabled by the modernization of the global maritime fleet. This growth dynamic is reflected in our year-to-date new orders reaching 12.3 million gross tons and expanding our order book to 32 million gross tons for the year, a significant 19.3% increase year to date versus last year. By segments, we have achieved double-digit growth in new construction, primarily driven by accelerated deliveries in key Asian markets, specifically here, China and Korea. Core in-service activities or OpEx activities have also shown robust growth, delivering high single-digit expansion from both volumes and pricing benefits.

In our commitment to sustainable maritime innovation, we were selected to classify and certify six dual-fuel utilizing LNG container ships for a major French shipping company, and we also secured four LNG carriers with dual-fuel systems for a Greek ship owner. Moving to the Agri-Food & Commodities segment, it delivered low single-digit organic growth at 2.5% this quarter, with contrasting trends among subsegments. Oil and petrochemicals showed low single-digit growth, with European markets gradually recovering and marine fuel assessments providing additional growth momentum. The metals and minerals, however, continue to deliver high single-digit expansion, driven by strong precious metals and on-site laboratory volume increases across the Middle East, Europe, and the United States. With a recent acquisition of GEO SA in Chile and with our existing network, we’re strategically positioned to capitalize on the copper market’s fast growth.

Agri activities experienced organic revenue contraction impacted by underperforming activities in Latin America and operational disruptions linked to the war in Ukraine. Government services achieved mid-single-digit organic growth through contract ramp-ups in Africa and Asia. Finally, I’m pleased to report, as François was mentioning, that the divestment of our food tasting activities is now complete. On the green object front, we have successfully secured an on-site laboratory outsourcing project for a sustainable aviation fuel producer in the United States. Turning to Industry, we have achieved robust 6.9% organic growth in the third quarter against what I would consider very tough comparable at over 20%, with our nine-month organic performance reaching 10.4%. In our oil and gas segments, we have delivered consistent double-digit organic growth. Our CapEx activities have shown strong performance with a solid backlog conversion of projects, mostly in the Middle East and Asia.

The power and utilities segments recorded double-digit organic revenue expansion. Our services for the renewable energy sector have been particularly strong in the North American and Asian markets. The nuclear power subsegment has delivered also robust organic results with emerging opportunities, especially as we progress in onboarding our new business, the Dorner Hindenburg acquisition we completed last quarter for decommissioning related services. For industry product certification, we posted high single-digit organic growth. This performance was powered by strong momentum in European and U.S. markets and the rollout of innovative digital tools for machinery or machine safety. For green objects, we were selected by a construction management services contract for a renewable energy developer delivering a 125 megawatt solar and 280 megawatt battery energy storage system in California. Additionally, we were awarded a three-year contract to help a Spanish energy company detect, quantify, and set up fugitive emissions reduction plans.

Moving on to Buildings and Infrastructure, this business was among the strongest performing ones within the portfolio this quarter, reaching an organic growth of 7.1% and achieving 4.1% growth in the first nine months. By subsegments, our CapEx building segment delivered high single-digit organic revenue increase. The U.S. platform was a critical growth driver in the quarter, with strong growth in data centers commissioning from the ongoing buildup of AI infrastructure. The U.S. activity was further strengthened by increased permitting for new buildings, positively lifting the code compliance activity. The Asia-Pacific region also delivers strong organic growth through increased code compliance activity in Northeast Asia, namely Japan, from favorable new buildings control regulations. On the OpEx building services segment side, performance was solid overall, up mid-single-digit organically in the third quarter.

France contributed significantly to growth through an increased volume of services, favorable pricing programs, and increased activity from energy efficiency-related projects. In the U.S., real estate transaction-related services performed very well, driven by a pickup in commercial real estate transactions. Lastly, Buildings and Infrastructure delivered high single-digit organic revenue increase in the quarter. Strong growth in Europe from sustained projects in Italy, where we have seen the government sustain their investments there. In the Middle East region, we also recorded very strong organic growth across key markets with the developments of numerous large-scale projects. Lastly, we’re building a good basis for sustained organic growth with the APP Group in Australia, where we secured in Q3 a major multi-year project management services contract with the Department of Defense.

In transition services, we are partnering with the International Finance Corporation, a member of the World Bank Group, to expand resilience verification services globally. Our Certification division delivered solid results in Q3, achieving 5.9% organic growth despite past comparables and a strong 7.7% growth year to date. This performance reflects the solid trends underlying assurance services. Risk management and mitigation imperatives are driving many services, specifically supply chain resilience activities, and overall specialized schemes are growing. Breaking down our different subsegments’ revenue growth, for the quality, health, safety, and the environment and specialized schemes, growth was high single digit on an organic basis, driven by customized Certification programs and robust public sector contracts, particularly in food safety inspections. Sustainability and digital solutions delivered double-digit growth through a high demand for greenhouse gas verification, forestry services, ESG audits, and cybersecurity services. We also continue to expand our customer base in cyber.

Recently, we secured a cybersecurity contract with a major social media company in the United States. In transition services, we secured a substantial lifecycle assessment contract with a major energy company in the Middle East. We also won a sustainability reporting contract for a large international pharma company, providing specialized consulting on scope three emissions and data management. Finally, our Consumer Products Services division posted a solid 3.5% organic growth in Q3 against very tough comparables, leading to a 4.1% year-to-date performance. By subsegments, soft line, hard lines, and toys recorded low single-digit growth, driven by South and Southeast Asia, as Western companies gradually shift their sourcing from China mostly. Our healthcare, beauty, and household delivered double-digit growth, driven by favorable dynamics in the United States and a strong performance in the Chinese domestic market.

Supply chain and sustainability services recorded high single-digit growth with CSR audits, benefiting from increased demand for new suppliers’ qualification as the sourcing shift progresses across Asia. Technology remains stable with mixed performance, facing challenges in wireless and mobility products, but benefiting from favorable trends in the electrical consumer area. The ongoing diversification of this business is progressing well as recent acquisitions start to contribute to organic growth. On the transition services front, we won in Q3. We had a strategic global partnership and the commitment to supply chain. We secured a significant contract with a multinational clothing retailer for supplier data management. We also won an eco-design and lifecycle assessment verification project with a global industrial technology leader.

Turning now to the outlook, considering our robust nine-month performance, the solid backlog, and taking into account the strong underlying market fundamentals, and again in line with the LEAP 28 financial ambition, we confirm our full-year 2025 outlook and expect to deliver mid to high single-digit organic revenue growth, improvement in adjusted operating margin at constant exchange rates, and a strong cash flow with cash conversion above 90%. Coming to the end of this present prepared remarks and to conclude, this is another quarter where delivering an excellent operational performance while navigating complex market dynamics and with challenging comparables versus last year. This performance is a testament to the consistent and reliable execution led by our teams and to the clear strategic priorities for the whole organization.

I’m also pleased on the strategy execution front as we progress with our portfolio pivots, while also modernizing our ways of working and while building a differentiated people model. We’re also fully committed to progressing on our portfolio transformation in the coming months and year as we accelerate our M&A program. Finally, we’ll continue to navigate an evolving macro and market conditions. We remain confident as to the strength of our market fundamentals, the superior capabilities of our people and teams, and the resilience of our portfolio. Thank you for your attention. François and I are now ready to answer your questions.

Conference Moderator: Ladies and gentlemen, if you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6. The next question comes from Annelies Vermeulen from Morgan Stanley. Please go ahead.

Hi, good afternoon, Hinda and François. I have three questions, please. Hello, hi. Three questions, please. Firstly, on the structural reorganization you announced at the H1, it sounds like that’s progressing, but any comments there on how that has progressed in the quarter? I think previously you spoke about starting to see some payback on that in the first half of 2026. Just curious if that’s still the case. Secondly, on BNI, it sounds like it was a fairly broad-based recovery, but are there any particular end markets or geographies that you would call out in terms of driving that very significant sequential improvement, such as data centers? Are there any one-offs that boosted that growth in Q3 in particular? Lastly, just on China, what you’re seeing on the ground across your divisions in China, if you’re seeing anything sequentially improve or deteriorate relative to the first half. Thank you.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: All right. Thank you, Annelies. Yeah, thank you for the question on the reorg. As we’ve mentioned, in July, we launched the first phase of the reorganization in June. That was for our Executive Committee. The team is in place. We launched the phase two for the next layer in September, and that team is basically in place. We worked through the summer. That team is in place and working on phase three. What’s really good is that there is clear alignment across the organization as to the value of this organization. Just to remind you, it’s about scale, structure, and speed. It’s about our capacity to make sure that we can actually execute even faster our organization. It’s about making sure we boost our cross-selling, our global sales, we scale faster new businesses, and we integrate better as we are in this dynamic of acquisition and portfolio pivoting.

So far, I would say so good. We will continue to monitor how that progresses. I think the payback is, as I said, actually, last time I believe you asked me that question. This wasn’t a new program. This is something we have thought through since we were building the strategy, and we have baked in the fact that we’ll have this organization done in 2025. Therefore, we consider that the impact is within the commitments and ambitions of LEAP 28. Going to BNI, we’re very pleased with the performance of BNI in Q3. You’re right, it’s a great recovery. I would say, first of all, I think the North American market has delivered really nicely. You have seen, right, it’s a high single-digit growth in CapEx overall. We’ve seen good performance on the infrastructure and also very decent performance on the OpEx.

The North American market has done very well. We have seen growth across all subsegments. Data centers are doing great. The market is growing double-digit, and we’re growing with the market. Code compliance started to recover now with the interest rates starting to come down. Commercial transactions picked up. I would say, overall, there is a good momentum on the BNI side in the United States. China is finally hitting a trough. As you recall, we have been suffering from a contraction, an ongoing contraction of that market. Finally, China now, we’re starting to stabilize. At the same time, we have the emerging markets I talked about picking up great performance in our Middle East business, Southeast Asia, some countries there as well. We’re seeing a very nice emerging markets growth. Finally, the mature business of Europe is actually doing well as well, as I mentioned earlier.

Good volumes, reasonable pricing, and some parts of it, particularly France, and some good projects on the energy management. I would say across, it’s a broad performance. Not a surprise, Annelies, for us, because we predicted this for the simple reason that we are executing our strategy on the BNI side and expecting to see this. What’s even nicer is now, if I look at, if I take the organic growth and the scope, we are basically growing 10.8% at constant currency. That really is going to be a very nice foundation for growth going forward. I’m going to ask François to comment on China.

François Chabas, Chief Financial Officer, Bureau Veritas: Yes. Good afternoon, Annelies. On China, I think, as you know, we are exposed when it comes to most of our product or business lines, so Certification, Industry, Marine & Offshore, Consumer Products, and BNI. From a sequential point of view, I think we are quite positive and optimistic about China. It used to be growing, you know, in H1 around mid-single. It now constitutes in Q3 between mid to high. We are actually seeing an acceleration of growth overall as a geography. Point one. Point two, very important to us, the solvability of clients is as good as it has been. Meaning we don’t see any cash restriction whatsoever coming from our client base, which is a very important element to us when it comes to operating in this country.

The dynamic by segments, very rapidly, you have obviously an outlier, which is the Marine & Offshore division, which the fact that the shipyards are concentrated in China is actually, if I say double digit, it’s almost an understatement. It’s very good. The Certification business as well is very solid. Industry in which we are very much exposed to renewable energy remains very, very strong. I think overall what we see is the BNI China remains a drag, but you know less and less as time goes by. Our Consumer Products business, despite all what you can read on the newspaper from supply chain shifts and so on, maintains a good growth on a year-to-date basis. Overall, I think we see China very positive.

Perfect. Thank you both very much.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thank you.

Conference Moderator: The next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead.

Hi, good afternoon. Thank you for taking my questions. A few for me, please.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Hi, Suhasini.

Hello. Hi. I’m excited to speak to you. I think the Q3 number, given the tougher comps, is actually a very strong print, and you’re having easier competitors going into Q4. Is there any reason to suggest that the underlying momentum that you’ve seen year to date should not continue over the next quarter? Maybe specifically on Marine & Offshore, it continues to surprise on the upside. Order book also continues to grow double digits. Can you maybe help us understand what has surprised you positively? I think previously you have been talking about a potential slowdown. Is that getting pushed out further and further, basically? Thank you.

Yes. Thanks, Suhasini. You’re absolutely right. I think this was a strong performance in Q3, considering that last year we grew 13% in Q3. Let’s remember as well, Q4 we grew 10%. Very, very strong performance last year. The comparables are quite tough. Having said that, I think we’re confirming our outlook because we think we have a solid basis with our backlog, with our projects, with the visibility on our execution, and with the teams that we expect that to. We’re reasonably confident on that. Of course, I cannot be very specific on the current trade, but we had a good exit of September. We have good visibility on the project. We expect that Q4 will deliver and confirm the outlook for the year, considering again that 10% growth last year. I would say we don’t expect surprises on that front.

On the M&O side, look, it has been good, very good performance, maybe a little bit beyond what we expected because we were modeling that the performance of the shipyards was not going to be as strong as what we expected, what we actually turned out to be. That’s why we’ve always modeled that we will see some moderation because at some point, two things will work against you. One, the capacity, you’re not going to keep converting. You don’t have that capacity. Two, your comparables are getting tougher, right? Actually, the performance of the shipyards has been very good to the point that the conversion was much faster than what we predicted. A few times I said I’ll expect it to happen in the next quarter, and it didn’t materialize.

I would say now we’re sitting in a space where we think that probably won’t be the same level of growth, but we will have to watch how the shipyards perform. We also are monitoring whether there will be some capacity addition for the shipyards in China. If that’s the case, then we could see some reasonable momentum maintained. I wouldn’t commit to exactly the same performance you’ve seen in Q3, but some reasonable momentum. It all depends how many yards are added, how quickly they come up to speed, and that’s really extremely hard to predict. Great performance this year from our M&O teams. The backlog, as I said, is 32 million gross tons, so it’s not going to go anywhere when we expect it to be executed at some point. It all depends on the shipyards.

Thank you very much.

Thank you.

Conference Moderator: The next question comes from Geoffroy Michela from AutoBHF. Please go ahead.

Yes. Hi. Thank you for taking my question and congratulations for those strong results. Three for me. The first one is on your consumer business. The tech division is rather subdued for quite a while now. My question is, when do you expect a turnaround? Do you think it will take more than one year? That was the first question. The second question is on Certification and notably the other solutions, including training, that were negative this quarter. Could you elaborate a bit on that? The third question is on capital allocation and the pipeline. We still haven’t seen mid to large M&A deals. Do you feel more pressure to bring back cash to shareholders with a new share buyback? Thank you very much.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Yes. Thank you. Thank you, Geoffroy, for the questions. Look, CPS Tech, I think we’ve been extremely clear that we had a portfolio that was misaligned with the trends of the market. If you recall, we talked about the fact that the wireless and automotive side, or the mobility side, as we call it, were really suffering from their own market conditions, and the demand has fallen. As we examined that and worked on the portfolio, we knew that we needed to do a few things. One, diversify geographically because we were quite heavy on the China-Asia mix. Two, we needed to diversify and ensure that we expand our capabilities in the electrical appliances side specifically around the world, which is what we have been doing. We made an acquisition in Mexico. We have made an acquisition more recently in Brazil.

We have acquisitions in Korea, and we have acquisitions in India. All these are coming together. My expectations on the turnaround, I think a good 12 months is probably a reasonable timeline to really work through as all these businesses get onboarded, integrated, and we start seeing some impact. It’s true, it has been a drag on the overall performance of CPS, of our Consumer Products Services division. We’re watching that very, very closely. Look on.

François Chabas, Chief Financial Officer, Bureau Veritas: François, you want to take specific?

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: No, no, no.

François Chabas, Chief Financial Officer, Bureau Veritas: You had a very good high here. Let’s say training to make your life simple. Training grew mid-single. The other section that you mentioned represents the contraction of $2.8 million out of a $1.6 billion business. We guarantee you a one-to-one with Laurent Brunel so that you have a full explanation of this slight contraction. I will not overread it if you see what I mean.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: All right. Thanks, François. Look, on the capital allocation side and M&A, thank you for that question. I think it’s a very important one. As you have seen, on the bolt-on side, we’re not into a number game. We’re really into a quality of target game where we have very, very specific gaps, both geographically and from a capabilities perspective. We are filling in these gaps very carefully and very deliberately. The bolt-on track, if you will, is working. We’re pleased with the acquisitions we’re making. The key thing with these small bolt-ons is the scaling across the group because that, for me, is a very important dynamic for us to profoundly change how the portfolio is working and to make sure we deliver on our commitment. That’s the first track. The second track of the mid-sized ones, the $100 million to $500 million, the pipeline is good.

There are opportunities we’re very focused on. We have engagements ongoing, and we have discussions ongoing. There are a couple of things to keep in mind when we talk about these targets. Mostly dealing, it is a very rich private equity space. The pace and the, I guess, the exit of these deals may vary, may take some time. That’s really what we are working on. You have seen us raise, the talks about the $700 million bonds we issued recently. We’re preparing ourselves for the ongoing discussion to make sure that as they materialize, we’re very well prepared to finance that. I think a good description of where we are today is quite, I would say, sure about what we’re doing on the bolt-ons. We’re working really to focus their integration and scaling. On the mid-size, we are preparing ourselves. We’re engaging with a number of targets.

As I said, in the coming months and year, we expect that we will materialize. All this is very important to mention. These are very important pivots we’re making with some of these mid-sized acquisitions we’re working on so we can prepare our portfolio to be future-facing. This is absolutely about remaking a portfolio that will be resilient in the future, building our new strongholds, be it in the renewable space, be it in low carbon, I would say, be it in very strategic space. In the BNI, I talked about strategic assets before, be it in cyber, be it in sustainability. This is really what we’re looking at or consumer tech potentially. These are the kind of things we’re focused on. There is no confusion as to what we want to do.

We have always also said, just to come back on the share buyback and the shareholder returns, that when the time is right, we will consider share buybacks. Just for kind of clarity, we have done two share buybacks in the last 18 months. I think it was 18 months. Those are the only two share buybacks the company has ever made. There is no shyness from our perspective to consider that, but we want to make sure that we’re really, at this point, privileging the M&A because we can profoundly remake the portfolio.

François Chabas, Chief Financial Officer, Bureau Veritas: Thank you very much. That’s very helpful. Thank you.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thank you. Thank you, Geoffroy.

Conference Moderator: As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from François Chabas from Kepler Cheuvreux. Please go ahead.

Good morning. Thank you for taking my question. Congratulations for all these figures. Sorry to just point on the only negative points. That is Brazil. It has been a drag on your performance in the Americas. Is this primarily driven by macro factors, or are there company-specific issues at play here? Thank you.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thank you. Thank you, François, for the question. It’s a fair question. Look, Brazil is a very important country in our portfolio. There are a number of dynamics. There are some operational issues we had specifically on our Agri-Food & Commodities activity. Market is good, really operational issues. The second one were more project delays. This is very important because on the sales front, we’re doing well. We’re securing deals, and we’re working on these deals. That goes from Buildings and Infrastructure to Industry. On the execution side, customers, for a variety of reasons, have projects being a little delayed. I don’t think it’s a trend overall in the market. We haven’t seen major economic concerns at this point, but we’ve seen some of these delays. We are, of course, working on mitigating, looking at other revenue streams, and trying to make sure we are managing all this.

I would say a bit of a disappointment for us, I have to say, this quarter, but an area we are extremely focused on, and we have a number of actions to address that.

Thank you very much.

Thank you.

Conference Moderator: The next question comes from Arnaud Palliez from CIC Market Solutions. Please go ahead.

Yes. Good afternoon. Thank you for taking my question. I have, in fact, just a last specific one regarding the nuclear segment that you mentioned as a solid performer in power and utilities. I would like to know what is your exposure to this business and in which countries you have some presence and how much of your total revenue does it represent because it’s a sector that is seeing a revival. I think it’s interesting to get your real exposure to this trend.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Yes. Thank you. Thank you for that question. I think you’re absolutely right. I think the nuclear space is a bit of a revival. Now, what’s nice about our portfolio, we have quite a broad portfolio in nuclear. Of course, we have a very nice anchor of our portfolio in France, right? We’ve been a long-term player in France, and that helps us build very nice capabilities. What we’re seeing here, what’s important though to keep in mind, it’s a long-cycle business. Today, it just represents circa 1% of the group. It’s not massive yet in scale, but definitely, we’re watching very carefully the pipeline that is being built up. We have already worked with other European countries. UK is one of them to mention.

What’s nice now is because of the needs in terms of energy and power and because of the concerns around decarbonization, nuclear is a bit in vogue at the moment. There are a number of countries that are building up plans. There are a number of companies that are coming up with investment proposals, and we are really engaging with all of these. Our idea here is, one, is to scale the capabilities we have in France, and two, to expand our capabilities. The first move we’ve made was the acquisition of the Dorner Hindenburg company in Germany, which gives us access to the decommissioning market. Very nice market in places like Germany and certainly others as we go forward. It also has capabilities and training. We are now looking geographically, how do we expand? Eastern European countries, there’s some South Indian continent countries.

There are also capabilities probably we can do in the U.S. It’s, I guess, it’s a long game, but it’s a business we’re very interested in. In a way, if I step back a little bit, nuclear is just part of the puzzle of energy that we’re trying to build. We have a strong position in oil and gas. We have a strong position. We are building a strong position in renewable. Nuclear is part of it, and we’re really expanding that. It’s not a surprise in a way. It’s going to take a while, though. I’m trying to be cautious in terms of time because these deals take, you know, from 5 to 10 years, I would say, rather than 5.

François Chabas, Chief Financial Officer, Bureau Veritas: Okay, thank you.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thank you.

Conference Moderator: The next question comes from James Roland Clark from Barclays. Please go ahead.

Hi. Good afternoon.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Hello.

Hello. Good afternoon. My first question is, once again, you sort of flagged some of the price opportunities that you’ve pushed through in a couple of segments. I just wondered if you could talk more broadly about price versus volume trends in the third quarter and how that compares year to date and what the opportunity looks like for pushing more price through onto clients in the near term. Secondly, on Consumer Products, you mentioned that in soft lines, hard lines, and toys, supply chain shifts have been a bit of a headwind to your growth. A key peer to you is saying that it’s actually a tailwind for them. I just wondered what it is about your mix that makes it a headwind for you. Finally, just on data centers, thanks very much for the color there.

I just wondered if data center work is accretive to your BNI margin. Thank you.

Yes, yes. Let me start with the data centers. Data centers for us are really what we call mission-critical assets, right? These are beyond all the hype on the AI. It’s basically objects that need very high performance specifications. Therefore, the kind of services we do and the specialization we have developed in services with commissioning are very high-tech intensity businesses. We are not, you know, we’re not peripheral to the data centers. We’re at the core of the performance delivery of these constructions. It’s a very important business. It’s high barriers to entry, very complex, and very specific expertise, and therefore highly accretive to the group margin, not only to BNI. Very, very good business there.

On the CPS side, on the consumer side, just to clarify, I think maybe it wasn’t clear that the supply chain is rather a tailwind for us because we see the sourcing shift as an opportunity to requalify suppliers. We had a lot of engagements with customers who actually see it as an opportunity to question some of their practices, some of their suppliers, some of their choices. I would say it’s not a headwind for us. In fact, the growth was high single digit on the supply chain side. Where we had lower growth was on the actual testing activity in terms of soft line, hard lines, and toys. First of all, the comparables are very, very difficult versus last year. That was one. We were quite, we’re not surprised by the performance there. We expect it to be in the kind of low single digit there this quarter.

We don’t consider supply chain as a headwind. It’s rather a tailwind at this time. The other thing to keep in mind is we have actually done some of these moves in the past, and we’re quite well-practiced to do them. We’ve done that in 2018 with the first Trump administration with the sourcing shifts. We were able to build a learning curve there on how to quickly come up to speed. We’re expanding today our capabilities in Southeast Asia, seeing that sourcing shift happening. We’re diversifying our services as well in the supply chain so we can help beyond the traditional kind of basic audits you do. It’s really, you know, it’s a normative performance, I would say, on CPS, but I expect it to be a good foundation for us as we build momentum and as we increase, as we actually develop our portfolio.

Just to be clear, we have been also acquiring companies. Year to date, the growth of consumer products at constant currency, including acquisitions, is 6.4%. I’m going to pause. François is going to talk about the price versus volume. Go ahead.

François Chabas, Chief Financial Officer, Bureau Veritas: Hi, James. On the price volume front, I would say very limited change compared to the H1 situation. Primarily, the growth is driven by volume, up to a third of it, one-third being price. Very limited contribution of high inflation in various geographies. Two-thirds, one-third remains where we sit at the end of September year to date. When it comes to further pricing adjustment or pricing opportunities, I think the situation is now well ingrained into our European and American operations when it comes to being able to price inflation. We are currently developing or, let’s say, rolling out pricing programs by segments or by division, by mitigate if you prefer. We did it two years ago in Marine & Offshore with good successes. We are now entering the game for Buildings and Infrastructure.

Whether it compensates for lower inflation at some point in one or two years, or whether it creates momentum on the top line, it’s too early to say at that stage. We are not giving up on being able to have a pricing component that is part and parcel of our growth trajectory.

Thank you. Very helpful.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: Thanks. Yes, all right. Thank you.

Conference Moderator: There are no more questions at this time. I hand the conference back to the speakers for closing remarks.

Hinda Gharbi, Chief Executive Officer, Bureau Veritas: All right. Thank you. Thank you, everyone, for your time and the questions. I think we delivered a very robust performance against very challenging comparables. I hope what we shared with you shows that we are actively working on transforming our portfolio, and we are really in the middle of that. I hope you understand now better how we are shaping this new portfolio and how we are building businesses that are resilient and will be future-facing. We will be in the coming months and year coming back with more clarity on that as we accelerate our M&A. Thank you very much.

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