Bureau Veritas targets a step change in growth and shareholder
returns
PRESS RELEASE
Neuilly-sur-Seine, France – March 20, 2024
Bureau Veritas targets a step change in
growth and shareholder returns
Today, Bureau Veritas hosts its Capital Markets
Day during which the Group will present its 2028 strategy and
financial ambitions:
- New
customer-centric vision, to be the preferred partner for customers’
excellence and sustainability
- New strategy
LEAP I 28 to
deliver a step change in growth and performance, built around three
pillars: Portfolio, Performance and People, with sustainability at
its core:
- Active Portfolio
management strategy designed to enhance leadership positions
through organic growth, accelerated M&A and portfolio
high-grading
- Performance
programs identifying meaningful efficiency and productivity
benefits from operational leverage, functional scalability and
innovation
- An evolved People
model, leveraging the Group’s deep-rooted knowledge and expertise
to train and develop strategic competencies needed for future
growth
- Staying true to its
purpose of “Shaping a world of trust by ensuring responsible
progress”, Bureau Veritas will be fully engaged to deliver on its
CSR commitments
- Ambition 2028: high
single-digit total revenue growth1 (with mid-to-high single-digit
organic), consistent adjusted operating margin improvement2,
double-digit shareholder returns based on EPS
CAGR1 and dividend yield, and strong cash
conversion2 (above 90%)
- In support of its
strategy, and reflecting its financial health, Bureau Veritas
intends to acquire its own shares for up to 200 million euro in
2024
Hinda Gharbi, Chief Executive Officer,
commented:
“For nearly two centuries, Bureau Veritas has
brokered trust between business and society. Building on our
long-standing reputation for technical expertise, high quality and
integrity, we are uniquely positioned to leverage our global reach
and broad capabilities. Our vision is to be the preferred
partner for our clients’ excellence and sustainability,
enabling our customers to navigate technological and societal
changes to transform and perform sustainably.
Our new strategy, LEAP
I 28, is a new chapter in our
history as we aim to achieve a step change in our leadership and
performance, both in terms of growth and shareholder returns.
By actively managing our Portfolio, we aim to be
the leader in the markets we serve where we already occupy a top
three leadership position, invest to build new growth strongholds
in strategic markets and optimize value and impact from the
remainder of the portfolio. Our new Performance-centric execution
model will enhance our customer value proposition through
technology and scalability and will enable opex investments to fund
our growth ambition and to drive margin improvement. Our People
model will evolve to ensure we attract and develop the strategic
competencies needed to enter new markets and sustain higher
growth.
We are targeting mid-to-high single digit
organic revenue growth, consistent adjusted operating margin
improvement and double-digit shareholder returns based on EPS CAGR
and dividend yield.
I would like to warmly thank all our colleagues
around the world for their dedication and commitment to delivering
on our new ambitions. We also thank our shareholders for their
continued support.
I’m proud to lead this great company towards its
bicentenary with a renewed sense of purpose, energy and ambition,
knowing that its best is yet to come.”
Bureau Veritas’ unifying vision is to be the
preferred partner for customers’ excellence and sustainability.
This vision translates into an ambitious, customer-centric
strategy, leveraging five secular trends: Sustainability, Energy
Transition, Connectivity & Digitalization, Supply Chain
Reconfiguration and Urbanization.
This new vision translates into a new strategy
based on three pillars: Portfolio, Performance and People.
-
Portfolio: Pursue undisputed market
leadership
Bureau Veritas will actively manage its
Portfolio to attain market leadership positions on prioritized and
focused businesses.
To this end, the Group will implement a
three-fold approach:
-
Expand leadership in existing
strongholds with established leadership positions, through a
combination of rapid organic scaling and inorganic expansion.
-
Accelerate growth in selected markets to create
new long-term strongholds, investing
early in fast growing strategic sectors (sustainability, energy
transition and cyber for instance), where the Group has a clear
path to market leadership.
-
Optimize value and impact from the remainder of
the portfolio in a granular and consistent way. Businesses that do
not meet stringent financial performance hurdles will be candidates
for performance improvement or portfolio high grading.
Portfolio ambition: Existing and new strongholds
account for c.55% of 2023 Group revenue and will deliver 80% of
incremental organic revenue over 2024-2028. In doing so, the Group
expects to reach a top three position in 90% of its portfolio by
the end of 2028 (versus 75% in 2023).
Acquisitions play a key role in Bureau Veritas’
strategy. Firmly aligned with its “expand leadership and new
strongholds” portfolio strategic directions, the Group is ready to
accelerate its M&A ambition. While carrying on its bolt-on
strategy, the Group will remain open and attentive to mid-size
opportunities (revenue above 100 million euro), in a very
disciplined way, consistent with its criteria of strategic fit,
price, profitability and value creation.
-
Performance: a technology-augmented and modernized
execution
The Group will accelerate performance through
programs designed to deliver meaningful efficiency and productivity
benefits. The objective is to entrench higher granularity in the
measurement and management of the day-to-day business. It expects
to also elevate customer experience, and service quality versus
competitors, and will modernize and scale select operational and
functional processes to extract operational efficiencies.
The two programs are Operational Leverage &
Functional Scalability and Innovation.
1/ Operational Leverage & Functional
Scalability. The Group is enhancing its delivery models,
to better serve its customers and ultimately to reduce its cost to
serve. Three key areas of focus have been identified to extract
operational leverage: i) improving performance management and
measurement; ii) modernizing operational and functional processes;
iii) developing tech augmented service models.
2/ Innovation. Innovation and
technology are the backbone of the Group’s strategy through a
three-layered approach. The Group has invested in scalable
enterprise systems, mostly cloud-based, to strengthen its global
operations across human resources, finance, and sales. Bureau
Veritas will also constantly capture data through modernized
operations systems, enabling its people in the field and in labs to
deliver superior customer service. The third layer enables the
Group to innovate with technologies including machine learning and
Artificial Intelligence (AI) to address customer needs and create
new revenue streams.
Performance Ambition: The Group expects to
accelerate growth through additional capacity from enhanced
productivity, with the ambition to deliver up to 100 bps of
operational leverage and up to 80 bps of functional scalability
within the 5-year period. Around half of these performance
programs’ savings are to be reinvested.
- People:
Evolve Bureau Veritas’ People model
Bureau Veritas is a technical knowledge company
with over two thirds of its 83,000 employees possessing specific
technical expertise: technicians, engineers, scientists, and other
specialists. It excels in attracting and developing capable talents
from all around the world. As a service company, Bureau Veritas’
people skills and knowledge are critical to its market
differentiation and business success.
Recognizing the new dynamics around people and
skills, Bureau Veritas will evolve its people model, leveraging its
deep-rooted knowledge and expertise to train and develop in-house
strategic competencies needed for future growth, enhancing its
competitive advantage.
The Group’s competitive advantage and ability to
outpace competition will come from:
1/ “New economy” and strategic
skills, around sustainability, energy transition and
digital, by developing a new and systematic approach to the way
employees’ skills are developed.
2/ “Tech Augmented ways of
working”: with the increasing role of technology, Bureau
Veritas will develop new tech-augmented service models that require
new skills and competencies. These enhanced service models will
free experts to focus on adding value, improving productivity, and
enhancing customer service quality.
-
SUSTAINABILITY AT BUREAU VERITAS’ CORE
SUPPORTING CUSTOMERS’ SUSTAINABILITY JOURNEY
As customers’ organizations transform into more
sustainable enterprises, the demand for associated services is only
increasing. These include a range of activities: corporate
strategy, operational transformation advisory, product stewardship
and supply-chain reassurance, as well as non-financial
reporting.
Bureau Veritas’ mission is to support its
customers in their transition journey to a new, sustainable state,
through the development of novel solutions, and an active network
of experts to support their transformation.
Capitalizing on its technical expertise, field
DNA, global reach and independent third-party role, Bureau Veritas’
ambition is to actively support its customers’ sustainability
journey from transition to transformation. The Group will leverage
its differentiating attributes to build leadership positions in two
complementary segments of the market:
-
Transition services: supporting clients’ move to more sustainable
business models, through two types of activity:
-
ESG transformation services, i.e. supporting the implementation and
monitoring of plans,
-
Compliance and reporting assistance services, supporting clients’
efforts to comply with and communicate on regulatory and voluntary
disclosures;
-
Green object services, supporting the build and maintenance of
green assets, green products, and green commodities – e.g.
renewables, new mobility, green fuels, etc.
Sustainability ambition: The more narrowly
defined subset of sustainability services – both transition
services and green objects combined, represents circa 5% of 2023
Group revenue and is targeted to grow to 15% of Group revenue by
2028.
2028 CSR AMBITIONS
Staying true to its purpose of “Shaping a world
of trust by ensuring responsible progress”, Bureau Veritas must be
exemplary in its own sustainability journey.
The Group’s CSR strategy addresses the three
dimensions of environment, workplace, and business practices, to
drive a positive transformation of Group activities and actions.
This is delivered through the engagement of its 83,000 dedicated
employees to shape a better environment, to shape a better
workplace and to shape better practices. Bureau Veritas will be
fully engaged to deliver on its CSR commitment. The Group will also
accelerate its efforts built around six priorities: climate,
circularity & biodiversity, health & safety, human capital,
diversity, and ethics.
The Group is committed to the achievement of
five key performance indicators through 2028:
|
UNITED NATIONS’ SDGS |
2023 |
2028 TARGET |
ENVIRONMENT / NATURAL CAPITAL |
|
|
|
CO2 emissions (scope 1 & 2, 1,000 tons) |
#13 |
149 |
107 |
SOCIAL & HUMAN CAPITAL |
|
|
|
Total Accident Rate (TAR)3 |
#3 |
0.25 |
0.23 |
Proportion of women in leadership positions4 |
#5 |
29% |
36% |
Number of training hours per employee (per year) |
#8 |
36.1 |
40.0 |
GOVERNANCE |
|
|
|
Proportion of employees trained to the Code of Ethics |
#16 |
97% |
99% |
Bureau Veritas is now a more resilient business
and capable of a step change in growth and profitability. The new
mid-term financial targets reflect this ambition:
2024-2028 |
|
GROWTH CAGR |
High-single digit total revenue growth5 |
With: |
Organic: mid-to-high single digit |
And: |
M&A acceleration and portfolio high-grading |
MARGIN |
Consistent adjusted operating margin
improvement5 |
EPS CAGR5 + DIVIDEND
YIELD |
Double digit returns |
CASH |
Strong cash conversion6:
above 90% |
CAPITAL ALLOCATION - AN ACCELERATED EXTERNAL
GROWTH POLICY
Over the period 2024-2028, the use of Free Cash
Flow generated from our operations will be balanced between Capital
Expenditure (Capex), Mergers & Acquisitions (M&A) and
shareholder returns (Dividend):
ASSUMPTIONS |
|
CAPEX |
Around 2.5-3.0% of Group revenue |
M&A |
M&A acceleration |
DIVIDEND |
Pay-out of 65% of Adjusted Net Profit |
LEVERAGE |
Between 1.0x-2.0x by 2028 |
In support of its strategy, and reflecting its
financial health, Bureau Veritas intends to acquire its own shares
for up to 200 million euro in 2024, within the share buyback
program approved by the shareholders meeting. This would be funded
through available resources.
-
CONNECTING TO CAPITAL MARKETS DAY
- Schedule (Paris
Time): Wednesday March 20, 2024 – 9:00am CET to 13:00pm CET
- The presentation
slides will be available at:
https://group.bureauveritas.com/capital-markets-day-2024
- Please register and
connect to https://investorday-bureauveritas.com/register to access
the live event.
-
FINANCIAL CALENDAR
- Q1 2024 revenue:
April 25, 2024
- Shareholders’
Meeting: June 20, 2024
- Half Year 2024
Results: July 26, 2024
- Q3 2024 revenue:
October 23, 2024
About Bureau Veritas Bureau
Veritas is a world leader in inspection, certification, and
laboratory testing services with a powerful purpose: to shape a
world of trust by ensuring responsible progress. With a vision to
be the preferred partner for customers’ excellence and
sustainability, the company innovates to help them navigate
change.Created in 1828, Bureau Veritas’ 83,000 employees deliver
services in 140 countries. The company’s technical experts support
customers to address challenges in quality, health and safety,
environmental protection, and sustainability. Bureau Veritas is
listed on Euronext Paris and belongs to the CAC 40 ESG, CAC Next
20, SBF 120 indices and is part of the CAC SBT 1.5° index.
Compartment A, ISIN code FR 0006174348, stock symbol: BVI.For more
information, visit www.bureauveritas.com, and follow us on Twitter
(@bureauveritas) and LinkedIn.
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Our information is certified with blockchain technology.Check that
this press release is genuine at www.wiztrust.com. |
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ANALYST/INVESTOR CONTACTS |
|
MEDIA CONTACTS |
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Laurent Brunelle |
|
Anette Rey |
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+33 (0)1 55 24 76 09 |
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+ 33 (0)6 69 79 84 88 |
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laurent.brunelle@bureauveritas.com |
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anette.rey@bureauveritas.com |
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Colin Verbrugghe |
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+33 (0)1 55 24 77 80 |
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colin.verbrugghe@bureauveritas.com |
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Karine Ansart+33 (0)1 55 24 76
19karine.ansart@bureauveritas.com |
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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 Bureau Veritas with the French Financial
Markets Authority (“AMF”) that could cause actual results to differ
from the plans, objectives and expectations expressed in such
forward-looking statements. These forward-looking statements speak
only as of the date on which they are made, and Bureau Veritas
undertakes no obligation to update or revise any of them, whether
as a result of new information, future events or otherwise,
according to applicable regulations.
1 At constant currency
2 (Net cash generated from operating activities
– lease payments + corporate tax)/adjusted operating profit
3 TAR: Total Accident Rate (number of accidents
with and without lost time x 200,000/number of hours worked).
4 Proportion of women from the Executive
Committee to Band III (internal grade corresponding to a management
or 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).
5 At constant currency.
6 (Net cash generated from operating activities
– lease payments + corporate tax)/adjusted operating profit.
- BUREAU VERITAS - 2024 03 20_Press release CMD
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