Bureau Veritas Adjusted Operating Income Rises 7.9%

The Tip Desk · June 30, 2019 · 2 min read

The testing and certification company saw organic growth in five of its six business activities during the first half of 2019.

Bureau Veritas, the testing and certification company, reported adjusted operating income of 375.5 million euros for the first half of 2019, a 7.9% increase compared to the same period in 2018,. The company said this result was supported by an adjusted operating margin that improved by 30 points of base to 15.2%.

Growth was driven by a diversified portfolio, with organic growth reaching 4.0% for the first half. The Agro-food & Commodities activity recorded organic growth of 7.9%, while the Industry activity grew 4.8% organically. The company said the Industry segment's recovery was supported by improving market conditions in Oil & Gas and a diversification strategy toward Opex markets. Within the Industry division, Opex activities grew 7.6%, with the Power & Utilities segment seeing Opex growth of 16.8% due to contracts in Latin America.

Other segments showed varying trajectories. Marine & Offshore recorded organic growth of 5.4%, while Building & Infrastructure grew 3.1% organically. The Consumer Goods activity experienced a slowdown to 2.2% organic growth, which the company attributed to the timing of new product launches in the second quarter. In contrast, the Certification activity saw organic revenue decline 4.1% in the first half, a result the company said was due to a high comparison base following the end of a three-year QHSE and Transport standards revision period.

Profitability varied across these segments. The Agro-food & Commodities adjusted operating margin rose 230 points of base to 13.5%. Consumer Goods saw its margin increase 70 points of base to 24.3%. However, the Industry margin fell 60 points of base to 10.9%, and the Certification margin decreased 110 points of base to 16.8%.

Financial stability remained consistent, with the company reporting that all banking covenants were respected as of June 30, 2019. The adjusted net financial debt stood at 2,128.1 million euros. The company's total gross debt was 2,926.5 million euros.

Looking forward, Bureau Veritas expects positive organic growth for its Marine & Offshore activity in 2019. The company said this outlook is based on a recovery in new constructions, particularly in North Asia, and the resilience of ships in service.