According to the analyst, organic growth of +4.5% came in slightly below expectations (forecast: +5.0%), driven by weaker-than-anticipated performance in the Industry sector (disrupted by Middle East operations) and Certification. This was partially offset by robust growth in the Marine, Business & Industry, and Consumer Products segments.

Growth prospects for fiscal year 2026 have also been revised downward due to an increasingly complex geopolitical landscape, general macroeconomic uncertainty, and the termination of contracts within the Government Services segment.

Jefferies notes that organic growth guidance for FY 2026 has been shifted from "mid-to-high" to "single-digit organic growth," alongside "improved adjusted operating margins at constant exchange rates" and "strong cash flow." (Organic growth at constant exchange rates: 5.7% / Margin: 16.4% (+10 basis points)).

Oddo BHF specifies that this revision follows the launch of a strategic review regarding exit options for the Government Services sub-segment (185 million euros).

According to Oddo BHF, this move is explained by the sub-division's low-margin profile as well as the discovery of irregularities (ethics and compliance) in the Middle East & Africa region. These findings led the group to report the matters to the authorities, terminate the relevant contracts, and cease further development of this division.

The analyst believes the downward guidance revision appears consistent given the situation in Iran and the surprise regarding Government Services. "However, in the absence of the latter, a guidance adjustment could likely have been avoided at this stage. Nevertheless, this is a marginal business in terms of size and has historically underperformed, which limits the negative impact of this decision," the research firm explained.

"At this stage, the reputational risk appears contained to us, and we appreciate that the group has taken a swift and proactive approach (including with the authorities)," Oddo BHF added in conclusion.