Bureau Veritas Sa

For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, participants will be 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 Francois Chaba, Chief Financial Officer. Please go ahead.

Good morning, good afternoon, and good evening to everyone. Thank you for joining us for our Health Year 2026 results. I'm joined by Francois Chabas, our Group CEO. The first half of 2026 demonstrates disciplined execution and the accelerating impact of our LEAP28 strategy. Operationally, we delivered 5% organic growth in the first half, with a sequential acceleration in the second quarter to 5.5% in a complex geopolitical environment. We also expanded margins, increased adjusted EPS, and maintained solid cash generation. Regarding the compliance deviations that we disclosed in April 26, we have completed our review, informed the authorities, and stopped the contracting questions. Based on our current assessment, we recorded a $32 million provision as of June 30, 2026, reflecting our best estimate to date of the full financial impact we may face. Our portfolio transformation is on track. During the first half of 26, we continued to reshape our portfolio. We announced the acquisition of Lotus Works, a leading specialist in mission-critical assets, and signed an agreement to divest our oil and petrochemicals and coal activities. We confirmed our decision to exit the legacy government services subsector. The exit process is already underway, and it will be almost completed by year end. This will be done in strict adherence with our contractual commitments to our clients. When sharing our full year 2025 results end of February, we have committed to complete a portfolio rotation of approximately 20% compared to 2023 baseline. I'm pleased to report that we reached this milestone in the first half. Bureau Veritas is now gearing its portfolio towards higher growth, higher margin, and more resilient markets. As a result of this portfolio rotation and aligning with our organization, our reporting structure will evolve. Excluding the activity plan for exit, namely the oil and petrochemical and coal and government services, our 2026 organic growth outlook is upgraded. We now expect mid to high single-digit organic revenue growth, and we maintain our commitment to margin improvement and strong cash generation. Before moving to financial highlights, I would like to thank all our colleagues worldwide for their dedication and contribution to these strong results. Let me start with our financial highlights for the half year. In this first half, we delivered revenues of 3.3 billion with 5% organic growth. Growth accelerated in the second quarter to 5.5%. We also delivered margin expansion with adjusted operating margin reaching 15.5%, up 29 basis points at constant currency and up 15 basis points on a reported basis. Adjusted EPS increased by 9.8% at constant currency, supporting our objective of delivering double-digit shareholder returns over the LEAP28 plan period. Cash generation remains healthy and leverages within our 1 for 2 range, even after the early dividend payment was completed this year in Q2 compared to Q3 last year. Moving now to our revenue performance by business and by geography. In this first half 26, we delivered an acceleration in the second quarter. Organic growth increased 100 basis points to 5.5, bringing first half organic growth to 5%. This improvement confirms the positive momentum we anticipated and reflects both favorable market trends and disciplined execution across the group. All regions contributed positively. Asia Pacific remains the fastest growing region. Mature Europe continues to deliver solid growth well above GDP. The Americas benefited from sustained investments in energy and digital infrastructure in North America. The Middle East and Africa remain resilient in a challenging geopolitical environment. Looking at our businesses, we maintained a strong momentum in marine and offshore and in buildings and infrastructure. Mixed performances were recorded in our commodities activities, reflecting the disruption from the Middle East conflict to the oil and petrochemical business. As expected, both industry and certification had a slow start this first half and are projected to pick up in the second half. What is important to keep in mind is that a number of new strongholds and mature subsegments continue to perform above expectations. As you can see on the slide, we deliver double-digit organic revenue growth in data centers, oil and gas capex, and metals and minerals. When we launched LEAP28, we committed to actively reshape the portfolio, increasing our exposure to high growth and high margin markets, while exiting activities with lower strategic relevance. Today, we're doing exactly that. Here today, we completed or announced five acquisitions totaling 138 million euros of revenue and signed an agreement to complete a major disposal. Total divestment amounted to 489 million euros of revenue. The acquisition of Lotusworks significantly strengthened our position in mission critical assets One of the most attractive growth markets. At the same time, the planned divestment of oil and petrochemicals and coal activity represents a decisive step in optimizing our portfolio. Since the launch of LEED28, we have now executed approximately a 20% portfolio rotation. This is accelerating our exposure to businesses with better structural growth prospects and stronger margins. This planned disposal of oil and petrochemicals and coal activities is fully aligned with our LEAP28 strategy. This business generated approximately 450 million of revenue in 2025, but operated below the group average in terms of growth rate and profitability. At an enterprise value of 470 million, an enterprise value to EBIT multiple of 11 times, this transaction represents an attractive valuation. Most importantly, proceeds will be redeployed into higher growth and higher margin markets. The transaction also reflects a disciplined approach to capital allocation, strengthens our portfolio quality, and enhances our growth profile. As mentioned in my third slide, our portfolio and organization are evolving in line with the LEED28 strategy. Our reporting framework is also being adapted accordingly, reducing our reporting lines from six to four. The new structure provides a clearer representation of the group's business mix and strategic focus and aligns our external reporting with our new organization. From July 1st, 2026, our portfolio will be organized around four key reporting lines. and excludes the activities of oil and petrochemicals and coal and government services. Both of these activities are planned for exit. Industrials and commodities supports the development of economies. It contains energy, minerals and shipping businesses. Buildings and infrastructure will benefit from structural trends around urbanization and infrastructure buildup, both physical and digital. Business Assurance will bring together certification solutions and digital assurance. It is a transverse business across all sectors managing existing risks and emerging digital risks. Product testing and services is centered around products that feed consumption and industrial activities with an increasing focus on technology. Francois will be providing some more information on this new reporting. Moving now to business highlights. I'm starting with the Marine and Offshore Division. The division delivered a strong performance in the first half with an 8.7% organic growth. New construction remains very strong, benefiting from sustained activity across most vessel categories and an ongoing conversion of our strong backlog of new ships. Ships in service activity, or OPEX, also delivered stable growth against challenging comparables driven by regulatory inspections and increasing demand for decarbonization-related services. In this segment, market fundamentals remain supportive with a strong order book and continued investments in new and more efficient shifts. For agri-food and commodities, this business delivered a 3.3% organic growth in House 1, 2026, Metals and minerals was the standout performer, growing double digit in the low teens organically, supported by higher exploration activities and sustained mining investments, particularly in precious metals and copper. Expositive trends were partly upset by weak activity in oil and petrochemicals impacted by the conflict in the Middle East, while agri activities remained soft. Moving now to industry. We delivered a slight sequential improvement in quarter two, resulting in a 1% organic growth in the first half. Growth at constant currency reached 3.3%, supported by the contribution of recent acquisitions in renewables and nuclear. Within the business, we had different growth dynamics by subsegment. Oil and gas delivered low single-digit growth overall. CAPEX activities remained very strong, however, growing at double digits, reflecting the supportive investment environment. We recorded a strong momentum in North America and resilience in some key projects in the Middle East. Power and utilities were slightly down overall. Continued growth in power distribution, storage, and renewable projects in Asia and Europe was more than offset by weak OPEX activities in the Middle East and Latin America. Industrial product certification delivered high single digit growth supported by strong demand in transport and logistics and pressure vessels across Europe and the Americas. For buildings and infrastructure, this business was one of the group's best performing businesses delivering 8.7% organic growth in the first half with a sequential acceleration to 10.2% in the second quarter. Growth was broad-based, reflecting the successful execution of our LEAP28 strategy in this space. Visiting CapEx delivered double-digit growth led by mission-critical assets. Data center activities remained very strong, with QA, QC, and commissioning services growing by more than 40%, supported by continuous investments from hyperscalers and cloud providers. Other services, such as code compliance or project management, continued to grow on par with the divisional growth. OPEC's building achieved mid-single digit growth driven by demands for building safety, compliance, environment, and HSE services. The activity was strong across Europe, supported by regulatory requirements and sustainability-related services. Infrastructure also grew mid-single digit, benefiting from transportation projects in North America Major projects in the Middle East and public infrastructure investments across Southern Europe. Overall, the building and infrastructure business continues to benefit from powerful market structural trends, including digital infrastructure build-up, urban development, and climate resilience programs. In certification, we had a slow start with 1.9% organic growth in the first half against very challenging comparables. The business recorded a strong momentum in sustainability solutions or transition services, as we call them, and digital assurance activities, which achieved high single-digit growth. Environmental and carbon services remained the key growth driver, supported by increasing demand for decarbonization, carbon footprint assessment, and climate-related compliance services. On the digital assurance front, we continue to expand our cybersecurity services and geographical footprint. This reflects growing customer focus on cyber resilience and operational continuity. QHSE and specialized schemes deliver the low single-digit organic growth activity with software in some developed economies, while demand continued to grow in emerging markets, particularly in Latin America, the Middle East, and Africa. We're not pleased with the performance of this division, and we have initiated Since Q2, sales plans and operations reviews to ensure steady pickup in house two for this year. Lastly, for consumer product services, the division delivered a 5.1% organic growth in the first half, including 5.7% in the second quarter. Performance was led by technology as the sub-segment benefits from our strategy diversification. Services were related to product innovation cycles and increasing testing requirements across consumer electronics. Growth was high single-digit organically. Supply chain and sustainability also delivered high single-digit, driven by strong demands for supply chain resilient services. Within soft line, hard lines, and toys, growth was low to mid single-digit despite energy supply disruptions across several sourcing markets. Performance was driven by China as major brands and retailers reverted back to the country, leveraging its scale, speed, and flexible manufacturing ecosystem. Overall, the business benefits from three structural trends, product innovation, supply chain reconfiguration, and rising sustainability requirements. I will now hand over to Francois for the financial review.

Thank you, Inza. Good afternoon to everyone. So let's have a look now a bit more in the details on our threshold performance for the first semester. We have delivered 5% organic growth overall, so it's an acceleration compared to the first quarter. And we continue to extend margins both at constant currency as well as on a reported basis. As you can see, the adjusted operating margin improved by 29 basis points at constant currency. The adjusted EPS increased by almost 10% at constant currency as well. And whatever rate remains comfortably within our target range, despite the impact of the early dividend payments in the second quarter compared to the usual third quarter over the last few years. So taken together, these results confirm that Duritas remains fully on track to deliver the ambition that we set out for the Plan 2028B principle today. Having a look at the revenue, the group generated 3.2 billion of revenue in the first half. Organic growth reached 5%. Scope was slightly negative as the contribution from acquisition was offset by recent portfolio exits. As a reminder, from August the 1st, Lotusworks would be included to the scope onwards, and it would contribute indeed to the positive effect, which is not the case yet. We just closed that deal For an exchange impact is improving quarter to quarter from 5.2% in the first quarter to minus 0.6% in the second quarter. And even for the first time, I think for the last two years, the month of June in isolation was reporting a slightly accretive amount in terms of ethics. So, which I think brings us to some more positive outlook for the rest of the year on ethics. Overall, revenue grew 2.1% on a reported basis and 4.8% at constant currency. Again, it's a good demonstration of the resilience of the portfolio and the quality of the underlying market trend. If we zoom on the second quarter, which is on the next page, organic growth improved compared to the first one. So we moved from 4.5% in the first quarter to 5.5% in the second quarter. And it is supported by continuous strength in our services related to data centers, energy investments, and mining-related activities. If we take a bit of a closer look by division, as mentioned previously by Hinda, all divisions grew with several delivering very strong performance, including scope Four businesses posted double-digit growth, reflecting both solid organic trends and the impact of a disciplined M&A execution. If we go through that briefly, bidding infrastructure first, together with Marine Offshore were the two strongest contributors. Bidding infrastructure, which is the largest segment of the group by the size, grew at 10.2% in the second quarter. It's again a sequential acceleration versus the first one. and the two main drivers remained sustained strong activity in data center rated services and the sustainability transition services that we offer to our clients more broadly. Marine maintains growth trajectory and capitalized again on favorable shipping market dynamic and vessels investments. Consumer products delivered solid growth supported by the expected rebound of technology rated activities, especially in Asia. and the development of a supply chain diversification throughout the segment. Agri-food and commodities sustained growth momentum, especially in metals and minerals, which has got traction over the first semester. Moving now to industry, I mentioned before the growth was somewhat soft due to the impacts linked to the Middle East conflict and some weaker OPEX activities, both in that region and in the Americas. Growth at constant currency of 3.3% reflects the positive impact of two acquisitions made in Europe, in the renewable sector and the nuclear sector, which both are developing as plants and will, from most probably year MQ4, will start to get into the organic development of the business. If we turn now to the margin bridge, So as you can see here, on the reported basis, we delivered 15 basis points of margin improvements. So we closed the half share at 15.5% versus 15.4% at the end of H1 2025. Organically, it's seven basis point improvements. It's a combination of the benefit of all 2024 restructuring, tight cut discipline, and it largely offset some of the Middle East impacts, especially in our oil and petroleum division. Scope had a positive impact of 22 basis points, so it does reflect the portfolio pivot Hinda was mentioning, exiting less profitable activities and acquiring more profitable ones. In line with our lead commitment, we deliver altogether 29 basis points of margin uplift at constant currency compared to the same semester last year. If we look at the divisional margin now on the next page, Marine Offshore, another strong improvement. It's a story of favorable expansion over CAPEX activities and the end of some low margin consulting activity that we decided to stop. Building and infrastructure, the margin expansion of 132 basis points on the larger segment of the group is actually a blend of three elements. One, the operational leverage driven by performance programs, especially in Europe. They have been started at the end of last year and have proven effective over the first semester this year. Two, the positive mixed effect of commissioning services related to assets such as data centers. And three, the accretive contribution from M&A, especially the accretion made now for the last two years, Slowly getting into organic numbers and are here in average having a higher margin than the average of the division. So overall, we are pleased with the development of this division, which is the largest again of the group. As far as consumer products is concerned, the margin continues to improve. Here we've benefited from two years of our growth and performance strategy execution. We have expanded the geographical coverage, restructured several sites, delivered multiple performance programs and we now start to see the positive outcome of recent acquisition, notably in Latin America. So the picture is as well pretty encouraging. Finally, agri-food and commodities and industry. So agri-food and commodities here, the main adverse impact is the conflict in the Middle East and the contraction of our oil and petrochemical activities. We have deployed several programs to retain staff and preserve margins We are ready to resume operation when conditions will allow, of course. And to close industry certification, H1 reflects the impacts of lower volume from software activity in the Middle East and delays in the ramp up of several OPEX contracts. And then finally this time, certification experience temporary pressure on margin lean to softer growth in H1 and slower than expected ramp up of recent acquisitions. We expect the revenue to pick up from Q3 and the margin to recover from H2 onwards. Several programs are being put in place, as Hinda just mentioned in her first comments. So overall, as you can see, the company continues to deliver on margin expansion semester after semester, and it reflects indeed mixed effects and the result of our performance program at large. If we now have a look into the other financial metrics, so bottom line, the adjusted earning per share continue to grow regularly. It grow 9.8% at constant currency, which is again encouraging and aligned with our LEED28 trajectory. Net financial expense remained broadly stable, 55.5 million. And the higher cost of refinancing from October 2025 were largely offset by significant lower adverse foreign exchange effects. And on the tax front, the adjusted effective tax rates were broadly stable at 29%. If we turn now to cash flow generation, We delivered another solid cash performance in the first half. Free cash flow amounted to 158 million, up 3.2 organically. As is shown on the chart, we maintain a discipline management of working cap, represents 6.8% of the revenue at the end of June 2026, and reflects what is very important, the sustainability of the efforts. We have been growing the group for a number of years. to optimize cash production and work in capital management. So, turning now to the new 2026 reporting pairing method. So, we put here some numbers to help you, you know, manage those changes. So, just a few minutes ago, we are updating our reporting structure. This will provide first a clearer picture of the group. in terms of future operating frame parameter and obviously the underlying performance of BuenVetal going forward. So it highlights the fact that this new parameter would enhance both the group growth profile, as you can see here, and its profitability. So we concentrate further on businesses with stronger structural growth drivers and higher value added services. This change will be effective starting July 1st, and we'll be reflected in our Q3 revenue publication both on a quarterly and year-to-date basis. So to order you to update your models, you will find in the appendix, in the annex, some qualitative and quantitative elements on the few moving pieces from the sixth division to the fourth division. Obviously Laurent, Colin and the entire Investment Reaction Team is here to help you to get your numbers right. It's relatively simple in reality. And these numbers here give you already an illustrative view on what the new Veritas is looking like. Once we have taken into account the discontinued activities, which are both government services on the one hand, and to our oil and petrochemical and coal testing activities for which we have announced a few weeks ago that we will divest to a third party. Most probably we expect this to be completed at the very beginning of 2027 at the latest. I now hand over back to Linda for the outlook for the year 2027.