Bureau Veritas Sa

Hello and welcome to Bureau Veritas Q3 2023 Revenue. My name is Alicia and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keyboard to register your question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I will now hand you over to Hinda Garbi, CEO, and François Chabat, CFO, to begin today's conference. Thank you.

Thank you, Alicia. Good morning, good afternoon, and good evening to everyone. I'm pleased to welcome you to the third quarter revenue conference call. I'm joined here by François Chabat, our group CFO. The revenue growth delivered in the third quarter reflects the continued strong performance since the start of the year. This is a great credit to the work of all our teams around the world, and it allows us to confirm our guidance for the full 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 shareholders. To that effect, we are reinforcing Bureau Veritas' leadership in sustainability services by augmenting our capabilities through partnerships that I will share with you during the call. Looking at the quarter highlights, in Q3 2023, revenue was 1.4 billion euros, up 6.1% at constant currency. The organic increase was 5.8%, showing a very solid underlying performance year to date at 8.1%. This is achieved after a very strong Q3 last year and while navigating a complex macro and geopolitical environment. Three of our businesses delivered particularly strong organic revenue growth ranging from 11.4% to 15.8%. Consumer products stabilized as expected. We remain confident about the fundamentals of our addressable B&I market space, although the division was affected this quarter in percentage terms by challenging comparables. The scope effect was a positive 0.3% reflecting the impact of the Voltron acquisitions realized last year, partially offset by recent small disposals. Forex had a significant negative impact of 8.4% in Q3, primarily due to the appreciation of the Euro against most currencies. We continue to benefit from our portfolio leadership position in our served markets and from the development of new solutions in sustainability, decarbonization, and energy transition. They played a key role in driving our organic growth. Looking at the mix over the first nine months of 2023, marine and offshore, industry, and certification continued their strong growth momentum. The robust performance year-to-date in BNI and agri-food and commodities was moderated in Q3 by challenging comparables. Following the challenging first health and consumer products, our activity stabilized as expected in the third quarter. From a geographical standpoint, the Americas, Middle East, and Africa are leading the pack alongside a very robust performance in Europe. Before passing on to Francois for the financial review, I'd like to share with you our progress in CSR performance at the end of September 2023. We are committed to health and safety by continuing our prevention programs and reducing accidents. On the gender diversity front, we remain committed to our 35% target by 2025. On decarbonization, our plan has been validated last June by the Science-Based Target Initiative, or SBTI, in line with the one and a half degree goal of the Paris Agreement. Additionally, we were recently included included in the cac sbt 1.5 index we are on target with the 2025 co2 reduction goals and we are aligned with our sbti plans we note that china lockdown skewed last year's metrics favorably i would like now to hand over to francois for the financial review thank you inda good afternoon good evening to all uh taking now a closer look at the revenue bridge

1.4 billion euros were generated in Q3, with an overall contraction of 2.3% on a reported basis, mainly attributable to negative currency effect of 8.4%. This is mostly due to the strength of the euro against US dollar and most currencies. The solid organic revenue growth of 5.8% has been achieved against a particularly strong Q3 last year. External growth contributed to 0.3% on a let's go basis, reflecting the impact of recent disposals as part of our active portfolio management strategy, and the fact that most of the Bolton acquisitions realized in the past few quarters are now annualized. On the acquisition side, we continue to have some promising projects in the pipeline. On a nine-month basis, Buretas delivered $4.3 billion, We achieved a 9.1% growth at constant currency, with organic revenue increasing by 8.1%, while the acquisition net of disposal contributed to 1%. The strong performance highlights the momentum around those secular growth drivers. Forex, in fact, presents a drag of 4.8%, leading to a total growth of 4.3% on the net reported basis by the end of September. When it comes to the performance of the different businesses in the last quarter, Q3, three activities led the growth, namely marine and offshore, industry, and certification. They all delivered double-digit organic growth on the back of a continued momentum in sustainability and ESG drivers, including marine decarbonization and renewable energy projects. Agri-food and commodities delivered a low single-digit organic revenue growth driven mostly by agri-food markets, notably in Brazil, and the ongoing good momentum in government services. Building infrastructure and consumer product services recorded a flat performance over the quarter, as expected. For CPS, I think, as we told you in June, we're in the ramp-up phase for CPS. After H1 being negative, we'll have a flat H2, with Q3 already stabilized. For B&I, it's linked to tougher comparables and seasonality specific to Q3. You will hear more about it in the business review by Hinda. The M&A impact of 0.3% reflects the Bolton acquisition last year in B&I and consumer products and the recent disposal of a non-core automotive business, which was part initially of our industry division. Moving on now to the nine months, where organic growth of 8.1% is fueled by industry, again, marine offshore, and certification. So the three strong growth engines, which are currently the best performing division, the three of them recording double-digit growth. Building infrastructure and agri-food communities are displaying mid-to-high organic growth. And when it comes to the consumer product segments, as expected, it's showing a low single-digit contraction with the ramp-up phase I've just mentioned. I now pass back to Inda for the detailed business review.

Thank you, François. Starting with marine and offshore, Q3 is another strong quarter for this business with a 13.4% organic growth progression. It ranks among the best performing divisions within our portfolio. Strong secular trends here continue to fuel growth with our order book benefiting from the renewal dynamic of the global fleet and from decarbonization regulations. Year-to-date new orders reached 6.8 million gross tons contributing to a backlog of 21 million gross tons showing 14.3% growth year-on-year. The double-digit growth of OPEX revenue, our core in-service activity, was fueled by the sustained level of occasional surveys and pricing. Organic growth in Q4 is expected to moderate on a tougher comparable considering the exceptional growth last year primarily driven by regulatory one-offs. In terms of business highlights, the division issued a classification approval in principle to an Asian shipbuilding group for the largest liquefied natural gas carrier ever built. One of our strategic focuses is also on helping the sector to decarbonize. We have invested in capabilities and are now investing in digital enablement so we can create new solutions for our customers. To this effect, we established a strategic new partnership with the US-based maritime software company Orbit MI. This collaboration represents a strategic innovative investment for Bureau Veritas. Orbit MI delivers a decarbonization enabling solution at the heart of the top priorities of the maritime sector. It provides players of the industry a digital platform which enables better performance monitoring and optimization of navigation journeys. The combined expertise of OrbitMI on digital solutions and BFE regulatory knowledge will drive synergies that we believe will open new opportunities and expand customer reach. Moving on to the agri-food and commodity division. It represents 21% of our global revenue, delivered a 2.6% organic progression with different dynamics among the sub-segments. Oil and petrochemicals and agri-food businesses recorded low single-digit growth. For the ONP, it benefited from market share gains with key customers in Europe and from the global sustained demand for biofuels and oil condition monitoring. Agri-activities, on the other hand, reap the benefits of exceptionally good harvests and record exports of agricultural products from Brazil. Metals and minerals saw a low single-digit contraction on an organic basis against tough comparables with last year's quarter. The group continued to benefit from the success of its on-site laboratory strategy with important wins this quarter. Robust revenue growth and trade volumes were recorded in Asia. Finally, government services maintained strong high single digit organic revenue growth with a solid ramp up of recently signed contracts. Moving to industry, this was the highest growing business in the quarter, up 16.2% organically in line with previous quarter growth. Our growth was broad-based across subsegments and most geographies, with the Americas and the Middle East and Africa outperforming. Government energy security and transition needs and customers' decarbonization plans are driving investments across the energy sector. Specifically, we continue to see an increase in clean energy investments that are driving our momentum of growth. By market, we delivered double-digit organic performance for CAPEX activities in power and utilities. Within that, for renewables, the momentum remains buoyant during the quarter, with a particularly high performance in solar, onshore wind, and high-voltage transmission projects in the U.S. In OPEX, our growth was moderated by our selective approach to contracts awards. In oil and gas, new projects across many geographies, including gas project startups, drove double-digit organic revenue growth in Q3. The other industry activities also performed well, led by OPEX services. These benefited from multiple drivers around aging assets, tightening regulations, and demand for decarbonization of industrial assets. In terms of sustainability achievements, in the quarter we have been awarded a major contract in South Korea with Anma Offshore Wind Energy. Here we provide, we provided integrated quality assurance, quality control services during the fabrication, manufacturing, and installation of all major components of a .5 gigawatt offshore wind farm. For BNI now. Overall, we continue to benefit from sector drivers around green buildings, energy efficiency, and an increase in infrastructure spend to support population expansion and urbanization. The stable organic revenue performance of the quarter reflects very challenging comparables versus last year and different dynamics by region. Strong growth in the Middle East and Africa, moderate in Europe, and a slight contraction in Asia and North America. On our three main platforms, The U.S. activity was lower after strong numbers in Q3 2022 and our decision this year to improve revenue mix with rigorous contract selection. The activity in France was broadly stable with OPEC's seasonality on energy efficiency projects. The rest of the OPEC's portfolio remains steady thanks to increased volumes and price increases. The Chinese activity suffered from tougher comparables due to China reopening in 2022, in Q3 2022, and to lower spend on transport infrastructure projects. The power-related construction activities remained robust and benefited from the energy transition projects ramp up. In the quarter, I would like to share with you a few business highlights to illustrate our growing portfolio of solutions. On the infrastructure side, we have been awarded the project management scope for a major road interchange improvement in California. We also secured process engineering consulting for the road network from the Shenzhen Bureau of Public Works. In terms of sustainability achievements, we are co-developing with an NGO, a sustainability standard for Unibuy, Rodamco Westfield in Europe. The aim is to measure the CSR commitments and progress of tenants in their shopping centers. For certification, the division recorded strong organic growth of 11.7% in Q3, a similar growth trend to the last two quarters. This was supported by both volume and price increases. The growth was broad-based across the schemes and the geographies, showing the value creation from portfolio development and diversification. Comprehensive brand and reputation protection, as well as commitments to the sustainability agenda, remain key secular trends and are driving customer demands. In the quarter, QHSC schemes, supply chain, and food safety grew double digits. Our sustainability solutions increased by 21%, fueled by continuing high demand for verification of greenhouse gas emissions and ESG-related supply chain audits. Cybersecurity is another key growth driver. We posted stellar performance in Q3, building on our H1 momentum with strong sales and rising demand for improved cybersecurity frameworks. During the quarter, we won numerous contracts in the sustainability field. We have been selected, for example, by the Dubai Legal Affairs Department to annually train and audit law firms on their sustainability and quality practices. And lastly, with regards to consumer product services, we delivered a stable performance in the third quarter with varying geographical and service dynamics. During the period, our Asian operations remained the most impacted region by delayed product launches and consumer spending shifts, while the Americas and other regions continued to benefit from our ongoing diversification strategy. For soft lines, China returned to growth, and Southeast and Southern Asia maintained a strong momentum benefiting from the structural sourcing shifts. Health, beauty, and household recorded solid double-digit organic growth in Q3, led by the US and Asia. Advanced testing laboratory and goal-break laboratories, which were both acquired last year in the US, progressed well with a promising sales pipeline. We maintained a strong momentum for sustainability services over the course of the third quarter, This includes organic verification, recycling, social audits, and green flame assurance across most geographies. For technology, as expected, our revenue continued to contract as it is still affected by the global decrease in demand for electrical and wireless equipment and the resulting postponement of new product launches. By contrast, our new mobility subsegment delivered double digit growth. During the quarter, Key sustainability achievements include a contract with one of the world's leading sportswear and footwear brands to help them with their supply chain decarbonization plan. I would like to share with you now the progress of our CPS diversification strategy. As I have mentioned previously, our diversification strategy is based on the following pillars. Sector expansion to build new revenue streams. Services diversification, mostly driven by sustainability. and expansion of our geographical footprint beyond our traditional strongholds. In terms of sector expansion, health, beauty, and household is an area of focus. The top-line growth for the year to date has stayed resilient at constant currency thanks to the three Bolton acquisitions from this space realized last year. These deals contributed to 4.2% of the divisional growth over the last nine months. A word now around our continued innovation in the sustainability space. Sustainability and energy transition are important drivers of our group's growth potential. The BV Green line of solutions and services is a good proxy for our development in this field. It represents today 55% of the last 12 months' sales. Continuing the trend from past quarters, our sustainability-centered solutions remain in high demand. We continue to expand and innovate to address new needs. A few highlights in Q3. First, we launched a renewable ammonia scheme which helps assure safe, sustainable ammonia production from renewable energy. This follows the launch of our hydrogen scheme early 23. A second highlight relates to the partnership we recently signed with Capgemini to help companies build transparent and credible ESG programs. Through our proprietary ESG solution, Clarity, and with the support of our partner, Digital Tools, we provide customers with comprehensive digitalization plans for the collection and the monitoring of their ESG data. Finally, in Q3, we partnered with the subsidiary of Petronor in Spain to bring together all activities related to Petronor's decarbonization and energy transition. Under this contract, we'll be operating the first hydrogen laboratory in Spain and Portugal positioning us as a reference in this field. Moving on to the outlook, we confirm that based on the nine-month performance and a healthy sales pipeline, we expect for the full year 2023 to deliver mid to high single-digit organic revenue growth, a stable adjusted operating margin at constant currency, and a strong cash flow with cash conversion above 90%. Before taking your questions with Francois, I would like to close by saying that our performance in the third quarter is as expected. Our operations continue to deliver consistent and robust contract execution while we continue to identify and develop growth opportunities for the future. Our strategy is firmly focused towards high-growth markets such as sustainability and low-carbon energy projects. ensuring that our business mix and investments generate long-term value for the company and our stakeholders. We consider that the tick market is benefiting and will benefit from major secular trends. Bureau Veritas will continue to create value by investing and taking advantage of the growth opportunities that are key to building the next chapter for the group. A capital market day will be held on March 20th, 2024, where we will provide you with an update on our strategy and plans. Thank you all for your attention. Francois and I are now ready to take your questions on the call or on the webcast.

As a reminder, if you would like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. To withdraw your question, please press star 2. We'll take our first question now from Simone Laitre from Stifel. You can go ahead now. Your line is open. Thank you.

Yes, good evening, Sri, if I may. First of all, thinking about Q4, comps will be slightly tougher at the group level. So would you expect the organic growth to decelerate further in the last quarter? Secondly, looking at BNI, so it seems there are several pockets of weakness in Q3. So could you give us your thoughts on what you expect for the coming quarter then? Particularly, when do you expect the momentum in the U.S. and in China to improve so the division return to growth? And lastly, just looking at your full year margin guidance, what sort of FX impact do you expect? I mean, it seems to expect a negative FX impact of 30 bps. So is it a fair assumption? Thank you.

All right. Thank you, Simo, for the questions. So first of all, we don't obviously guide for the quarter, but it's suffice to say that we have confirmed our guidance for the year. And we, again, we are quite comfortable with the secular trends that are underpinning our growth. And we do recognize, of course, that there are unfavorable comparables, but we are very clear on our plans of growth. The second question is on BNI and what do we expect going forward. So I think it's important to clarify that while the sector of building and infrastructure might be complex to read, for us, the fundamentals are stable for the markets we actually address and serve. And simply because we have designed our portfolio on three axes, if you want. The first one is We have balanced our portfolio between CAPEX and OPEX, which allows us then to manage variations of spend in this sector. And we have reduced over the years the residential exposure. And most of the remaining residential mostly tends to be around recurring regulatory activity. Second, we have diversified geographically, and we continue to diversify geographically. And we moved into the U.S. and built the U.S. platform, but we continue to build other emerging market platforms. And the third one is our plans, and we continue to diversify the different capabilities in BNI. So having said that, we expect that the Q3 performance, which came from challenging comparables and some decision we've made, as I mentioned in my prepared remarks, in the U.S. to be more rigorous with the contracts we take. We, in France, it's mostly comparable and some seasonality, and in China, We recognize that there is some softness in the market there simply because we are active mostly around infrastructure, local infrastructure projects, and we know that local governments today have difficulties with spend. So that is the picture of Q3. We expect to reconnect with growth in Q4. I'll let Francois take the question on the FFS.

Yes. Hi, Simon. Well, look, FX is always a pretty unpredictable stuff, especially as Brutus operates in more than 90 currencies. But I think, you know, what the consensus has in mind, which is 25 to 30 bps, is pretty close to our own expectations. So we'll tell you more, obviously, in February, but it is not disconnected with what we see from Orchair as well.

Okay, thank you.

Thank you. We'll take now our next question from Suhasini Baranasi from Goldman Sachs. Your line is open now, thank you.

Hi, good afternoon. Thank you for taking my questions. The first one is actually on your exposure to commercial real estate in the U.S. What's your percentage exposure to that? The second one, on the quarterly performance, did you see any sharp slowdown in September 2021? I think some of the companies in business services or generally across a global basis have talked about some slowdowns. In September, we're going to check if you've seen that. And the last one is on your partnership with Capital Nightly. What aspects, services, or geographies does it cover, and how does the revenue benefit to you basically accrue? Thank you.

All right. Thanks, Sahasrini, for the question. In the U.S., we have some business where we are exposed to transactions, real estate transactions, which is not a very big business for us. But we have actually talked in previous calls on the slowdown we've seen there since last year, the minute the interest rates went up. Our exposure is quite limited. We will be monitoring how those transactions will evolve. They really slowed down quite a bit, but our exposure is quite limited. François, are you going to take the question?

Yeah, on the exit rates, you know, usually we do not comment so much, but I would say no sharp slowdown whatsoever. So we cannot confirm what you may have heard from others, not for us.

Yeah. Thanks, François. And the third question on the Capgemini partnership, the line was quite bad, so I hope I caught the question well on Capgemini. What we are trying to do in the sustainability space is to partner or develop solutions to be able to address customer needs. Any time we are handling sustainability information, Traceability, visibility, credibility of the data is very, very important. So you are bound anytime you're looking at that space to build a digital solution to address those needs alongside, of course, the regulatory knowledge and the rest of it. So we have been seeking different partnerships. Capgemini is a new one. We have in the past partnered with companies in the supply chain for traceability, digital players, digital natives. Capgemini is obviously a large company and a very important partner for us. And what we are going to do here is to work to develop integrated solutions for our customers where we can facilitate, if you will, the collection of the data, the monitoring of performance, and the ability to essentially assure the sustainability claim for our customers. We are at the start of this partnership, so it's a bit too premature to share specifically where the markets are, but suffice to say that of course this partnership allows us to utilize our global footprint and find synergies on that front. Thank you. Thank you.

We'll take now our next question from Karl Reinsford from Bernberg. Your line is open now. Thank you.

Hi, both. Thank you. Two questions from me, both regarding growth. The first is on the marine segment. Obviously growing very well this year. What does that mean for growth next year? We're clearly going to be coming off a strong base. Of course, you've alluded that people will be impacted by that. So is there anything new regulation-wise or other reasons that means growth can be sustained at a good level going into next year? And the second one is on the B&I segment. The North American side has been a growing portion of that, clearly. So how much of an impact will interest rates alluded to in the release have on growth in the midterm? Are you seeing delays in starts or purely just sort of less demand for that? And also, I know you alluded to more selected contract selection. So should we expect margins to be a bit higher given that? Thank you very much.

Thank you. The line was not great, but thank you for the questions. But I'll enter and you let me know if I caught your question. So for marine, I think it's important to highlight that the marine sector today is going through this renewal of the global fleet. And so the underlying dynamic there is a build phase. There is a build phase going on in the marine sector, and that is really providing us with a good baseline of growth that will continue to be there. And the reason we are confident of that is because of the backlog we have today. We have 21 million growth tons. of backlog. We have been having record years last year and the year before to build up that backlog and we are executing that. We also see that the shipyards today are fully booked until late 26. And you put with that the need for ship owners to modernize their fleet to be in compliance with with decarbonization regulations, we expect that this build phase will continue for a little while. So the dynamic of growth in our classification activities or the CAPEX phase is solid. A lot of our growth as well is in the ship and service, the OPEX activity, which benefited last year, late last year, and we had very large growth from a catch-up from the COVID opening. And increasingly, we're seeing occasional surveys and some regulatory compliance dynamics that is providing additional work there. We expect that the baseline of construction will continue, as I mentioned. The ship and service, of course, will grow. But these occasional surveys, we can't really predict. and we have benefited from them. But overall, I think the dynamic growth will moderate in Q4 this year owing to the very challenging comparables Q4 last year. The second question is on how are we looking at the interest rates and their impacts on BNI in the U.S.? ? I think it's important to think of our portfolio in the US as a very diversified portfolio. I mentioned earlier the transaction business, which is quite small, and that is very sensitive to interest rates. Our residential exposure is actually not very, very large, and we have a portfolio of activities in OPEX that are regulatory and recurrent. We have activities in data center, for example, that gives us a completely different exposure. We have code compliance I mentioned in different states and in high growth. high growth states where we see migration of population, therefore massive need for new construction. So we have deliberately designed the portfolio to be balanced that way. So we believe that this performance that I talked about in Q3 is mostly from the comparable.

Okay, thanks. So do you mind just touching on the contract selection? I don't know if you missed that, just the contract selection and potentially the impact and margin.

Yeah, I think on contract selection, we've run over H1 a couple of analyses on sub-segment where I think due to the fact that we were enjoying a good growth momentum, we could be a bit more selective with a view to to improve our margin on those sub-segments. And it happens that one of these sub-segments is in the BNI portfolio in the US, where we have discontinued a number of contracts at the end of Q2, which has one-off impact that we see in Q3 and will normalize over Q4. So that's our own decision. I think it's a good sign. It shows that the platform we have put in place enables us to be selective, which I think it's a luxury we haven't had over the last few years. So we are managing the portfolio simply.

OK, great. Thank you very much.

Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star 1 now. To withdraw your question, please press star 2. We'll take now our next question from Neil Tyler from Redburn Atlantic. Your line is open now. Thank you.

Thank you. Yeah, good evening.

Can you please, sorry, the line is really, really difficult to hear. Can you please state your name? Thank you.

Yeah, hi, it's Neil Tyler from Redburn Atlantic. Can you hear me?

Yes, yes, thank you. Thank you, Neil. Okay, good. Go ahead.

Um, okay. Yeah. So, um, three questions, um, uh, still left on my list. Um, coming back to the topic of, of contract selectivity, I wonder if you could, um, um, frame in, in a group context, um, to what extent, um, you know, there, there remain revenues or contracts within the business, um, that you're sort of less satisfied with. And is that, is it in any way a material part of, um, of the revenues currently, and not just in BNI, but anywhere else where you've conducted those reviews, or perhaps you've yet to conduct those reviews. Second question comes back to, previously you've described your business as an order book business, which has given you good visibility in terms of being able to staff it, you know, ahead of, ahead of new business coming in. I wonder, you know, you've touched on Marine in some detail. I wonder if you could talk around the, you know, the broader business and whether there's been any significant inflection upwards or downwards in, in, in orders elsewhere that you would like to call out. And then finally, a more specific question within the, industry. Can you just help me understand, you talk about the renewables business and the very, very strong momentum there. Can you help us understand some sort of quantum around the size of that if you're willing to do that? Thank you.

Thank you. François, did you want to talk about contracts too?

Yeah, on contracts, so let's try and frame it indeed. To make it simple, there are two lines of activity, namely some sub-segment of the BNI activity, building infrastructure, and some sub-segment of the industry activities, where we recognize that some of the contract we had there did not have the attributes we wanted to have in terms of margins. So we've made this screening, as I just mentioned, and to frame it and help you just get a sense of it, we are talking about, on a yearly basis, I'd say something around 40 to 50 million altogether. So not material at group level, not in material in the sub-segment, put it like this. And I think most of the decision have been taken between Q2, well, in Q2 de facto, and we see the impact in Q3. There will be a little bit left in Q4, and we'll be back to normal in Q1. I think that's a one-off exercise that we've run. on the back again of a strong growth momentum that allows us to be more safe. But to sum it up, industry a little bit, OPEX part, and a bit of BNI in the U.S.

Thanks, Francois. So on the two other questions, the third question on renewable, renewable today is growing high double digits and has been doing that for a number of quarters. We are... As we look at this market and think about it in terms of trends, what we are seeing is there is a momentum around spend in this area, both from governments. A lot of governments are pushing for renewable shifts within their energy transition plans. We're seeing companies as they decarbonize particularly hard to evade sectors. They are also contributing to the growth in this area and pushing the dynamic on renewables. So this has been the kind of growth dynamics that we have seen in renewable. Just to give you an idea, today the low carbon uh energy the power low carbon power business is actually bigger than our oil and gas capex uh today so that is just give you an idea how we are growing uh this new business the second question i didn't catch very well but um my understanding here you're asking about have we seen any inflection in our markets yes essentially just you know um given that given the sort of

more distant line of sight you have through order books. I mean, you've already mentioned in some detail, you know, how that gives you good planning capability in marine, but, you know, you obviously have quite long duration order books in some other businesses. So I was wondering if you could sort of share any insights that those provide you with.

Yeah, no, no. Okay, fair enough. Thank you. I think, you know, if you look at some of the projects, particularly in the energy space, these are long cycle projects. So you have a bit more visibility. And as I mentioned on the renewables, The order book is a good, the sales we are actually securing give us a good idea on the dynamic of this growth. And you see that in energy, all sectors together, be it oil and gas or renewable or any other low carbon energy projects, right? So we have visibility on that, and that's why if we think about it in terms of trends, That is our position on some of these secular trends, particularly on the energy space.

Thank you. That's very helpful.

Thank you.

We'll take our next question from Suhasini Baranasi from Goldman Sachs. You can go ahead now. Thank you.

Hi. Sorry. I just have one more question, please. I think in the first half of those, you had a split of price versus volume, which was maybe 2%-ish price, 7%-ish, you know, volume. Just to check what it was for Q3. Thank you.

Yeah, go ahead François, go ahead.

Yeah, good afternoon. Again, the line is not great, but I think the question was about price volume of a Q3, if I got it right. I don't want to disappoint you, but for obvious competitive reasons, we don't disclose in much detail our pricing impact. I would say by and large, you remember our guidance on this, we delivered 1.8% to 2% last year, we said this year we will be above and Q3 is clearly above. So I would say we have our pricing machine working properly. There isn't much I can say frankly beyond this. We're happy with the momentum we have, especially in North America and Europe, which were the two geographies where the surge of inflation was the tougher for teams which were perhaps historically not prepared to face inflation.

Thank you very much.

Thank you. We'll take now our next question from Harry Martin from Bernstein. Your line is open now. Thank you.

Good evening, everyone. I've got a couple of questions on consumer products and then one final clarification as well. Within the consumer segment, I wondered if I could get a bit more color on the technology part and the comment about product launches. Your peers have seen better growth in the electrical side than the soft line and hard line side and have suggested that that's because innovation cycles are a little bit longer in those tech-related products. So I was interested in why you seem to be seeing the opposite there. And then also within consumer, in the slides, you have the comment about the focus on M&A, but we're still having to point to acquisitions from 2022. There have been a few small acquisitions by peers in this sector. So I wonder if I could get your thoughts on how the transaction market is in consumer products today. You have the balance sheet to do deals. So is it something that if the right deals come along, you'll be able to do them in the near term? Or do we need to wait for the capital markets day in March there? And then the final clarification I had, one of your peers suggested that the impact of working days as a headwind was quite material in Q3, about one working day fewer than this quarter last year. Did you have any impact at all from a change in the number of calendar and working days this quarter? Thanks.

We tend to keep operations to ourselves, but I'll let François comment on that.

I think on the calendar day, frankly, we're operating in 140 countries. then those type of approach to us are completely neutral. So no calendar day effect at all.

Thanks, Francoise. So maybe to come back to on the consumer, and then I'll get back to your first question. On the consumer side, you're absolutely correct. We have reported on the health and beauty acquisitions we've made last year. We have been very active looking at the market, and we have a pipeline of opportunities we're looking at. We should be able to announce in the coming quarter or so acquisitions in the consumer space. And then the first question is on the tech. Yes. So the tech, look, I cannot comment on the competitors, but what I can explain for us, the current footprint we have today and the current portfolio mix we have today is such that we have actually, we're seeing this delay of product launches. We're seeing movements. We have seen some geographies where volumes have reduced. particularly in Asia. And again, this is how we are today and how our portfolio is behaving. And that's why we are reporting this contraction in technology. Now, again, part of our strategy is to diversify geographically. three pillars of our strategy of diversification cps as you recall on sectors on services and on geographies for tech we need to to to diversify our geography and our services and that's what we are working on uh harry i hope it answers your question yeah great thank you very much thank you

We currently have no questions coming through. As a final reminder, if you would like to ask a question, please press star one now. We've got no further questions, so I will hand you back to to conclude today's conference. Thank you. Yes.

All right. Thank you. I think we will stop there. Thanks, everyone. Thank you very much, Alicia.

Thank you. You may now disconnect.

Thank you. Bye.