BVRDF - Bureau Veritas SA (BVRDF) Full Year 2023 Results Earnings Call Transcript

2024-02-22 15:23:09 ET

Bureau Veritas SA (BVRDF)

Full Year 2023 Results Earnings Conference Call

February 22, 2024 9:00 AM ET

Company Participants

Hinda Gharbi – Chief Executive Officer

François Chabas – Group Chief Financial Officer

Conference Call Participants

Annelies Vermeulen – Morgan Stanley

Suhasini Varanasi – Goldman Sachs

Himanshu Agarwal – Bank of America

Geoffroy Michalet – ODDO BHF

Neil Tyler – Redburn Atlantic

Rory Mckenzie – UBS

Presentation

Hinda Gharbi

Good morning, good afternoon and good evening to everyone. I'm pleased to welcome you to the Full Year 2023 Results on the webcast and on the call. I'm joined by François Chabas, our Group CFO. We delivered excellent results in 2023, reflecting our robust business fundamentals, our consistent execution and our customer centricity around the globe. I would like to warmly thank all our colleagues around the world for their dedication and hard work to deliver this outstanding performance.

Looking at our financial highlights of the year. Revenue totaled €5.9 billion, up 9.1% at constant currency and up 8.5% organically, of which 9.4% in the last quarter. This is a combination of strong volumes with the conversion of our healthy backlog and a pricing impact as expected. This included more than a third of our portfolio producing strong double digit growth with all business lines delivering positive organic growth in Q4. Adjusted operating profit increased to €930 million, up 10.5% year-on-year at constant currency with a margin at 15.9%. Organically, our margin increased by 20 basis points to 16.2%.

Our adjusted earnings per share rose 7.4% to €1.27, a record high. At constant exchange rates, the growth was 17.4%. Free cash flow rose 5.5% at constant currency to €659 million. This reflects a strong operating performance and good working capital management. Consequently, a dividend of €0.83 per share will be proposed, up 7.8% year-on-year and corresponding to a payout ratio of 65%. In 2023, we have continued our efforts to be exemplary in terms of sustainability around all environmental, social and governance practices. Our greenhouse gas emissions targets has been approved by the science-based targets initiative, SBTi.

As a consequence, Bureau Veritas joined the CAC 40 SBT 1.5° index. We are very proud of the external recognition received. In fact, Bureau Veritas ranked first in the S&P Global Corporate Sustainability Assessment for the Professional Services Industry category. I would also like to share with you the progress in our CSR performance. In health and safety, our ongoing prevention programs further reduced our accident rate in the year. On gender diversity, we continued to improve the proportion of women in leadership positions, which increased to above 29%. Multiple programs have been rolled out last year to make sure we reach our long-term ambition.

Last year, we implemented a number of important organizational and governance changes. First, we have strengthened our management structure to support our future growth ambitions. Three new executive committees position were created to sharpen our focus, to improve execution and drive strategic priorities around innovation and growth. Second, a number of changes were made to our board of directors. Laurent Mignon, Chair of the Wendel Managing Board, was appointed Chair of Bureau Veritas. Pascal Lebard has been appointed Lead Independent Director and Vice Chair of the Board, in addition to his role as Chair of the Nomination and Compensation Committee. Third, the board created a CSR Committee to support the execution of the Group's CSR strategy. Three out of four leading committees are now shared by independent women directors.

I am pleased to report that we have exceeded all the objectives we set for 2023, showing predictability in our execution and resilience of our business model within a complex macro and geopolitical environment. 8.5% organic revenue growth in 2023, at the top end of our revised guidance range from July of mid to high single digit. This is the second year where we have delivered high single digit organic revenue growth, a record revenue. Our margin up 20 basis points year-on-year organically versus stable adjusted operating margin target set in July. A strong cash flow with cash conversion above 90%....

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