Wendel : Bureau Veritas – Strong H1 2023 operating and financial performance

PRESS RELEASE

N e uil ly - su r- Seine, France - July 26, 2023

Strong H1 2023 operating and financial performance;

higher organic revenue growth expected for full-year 2023

H1 2023 Key Figures1

• Revenue of EUR 2,904.2 million in the first half of 2023, up 7.8% year on year and up 9.4% organically (including 10.3% in the second quarter)
• Adjusted operating profit of EUR 434.2 million, up 5.7% versus EUR 410.9 million in H1 2022, representing an adjusted operating margin of 15.0%, with year-on-year variances attributed to forex and mix effects
• Operating profit of EUR 372.9 million, broadly stable versus EUR 375.2 million in H1 2022
• Adjusted net profit of EUR 276.3 million (EUR 0.61 per share) up 11.1% versus EUR 248.6 million in H1 2022
• Attributable net profit of EUR 232.5 million, up 3.2% versus EUR 225.2 million in H1 2022
• Free cash flow of EUR 131.9 million, up 1.5% year on year with increased capex and a well- controlled working capital requirement in the context of the strong topline growth in Q2
• Adjusted net debt/EBITDA ratio reduced to 0.95x as of June 30, 2023 versus 1.10x last year

H1 2023 Highlights

• Growth driven by the vast majority of the portfolio across all geographies (Americas, Middle East, Europe, Africa and Asia Pacific) backed by good momentum on the sales pipeline
• Maintained traction for Sustainability and energy transition solutions across the entire portfolio, representing 55% of Group sales through the BV Green Line of services and solutions
• Bureau Veritas GHG emissions (mid-term) targets approved by the Science Based Targets initiative (SBTi) and progress towards the 2025 CSR ambitions

2023 New Outlook

Based on the half-year performance, a healthy sales pipeline and the significant growth opportunities related to Sustainability, Bureau Veritas now expects for full-year 2023 to deliver:

• mid-to-highsingle-digit organic revenue growth (up, from mid-single-digit organic revenue growth previously);
• a stable adjusted operating margin at constant exchange rates;
• strong cash flow, with a cash conversion2 above 90%.

Hinda Gharbi, Chief Executive Officer, commented:

"The strong organic revenue growth, resilient margin performance and very solid financial structure delivered in the first half of 2023 reflect the full engagement of all our teams and the strength of our diversified and growing portfolio of activities and our global geographical footprint. This excellent performance and our confidence in the overall trends in our businesses for the coming months allows us to revise our topline growth outlook upwards.

Looking further ahead, our worldwide leadership position in services focused on Sustainability, energy transition and supply chain evolution makes us a bellwether and thought leader for our sector and for society as a whole. We will continue to drive innovation and customer centricity with Sustainability at the core of what we do to take the Group to the next chapter of our history."

1. Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 8 of this press release.
2. Net cash generated from operating activities/Adjusted Operating Profit.

H1 2023 KEY FIGURES

The Board of Directors of Bureau Veritas met on July 25, 2023, and approved the financial statements for the first half of 2023 (H1 2023). The main consolidated financial items are:

IN EUR MILLIONS	H1 2023	H1 2022	CHANGE	CONSTANT
CURRENCY
Revenue	2,904.2	2,693.4	+7.8%	+10.9%
Adjusted operating profit(a)	434.2	410.9	+5.7%	+10.2%
Adjusted operating margin(a)	15.0%	15.3%	(30)bps	(9)bps
Operating profit	372.9	375.2	(0.6)%	+4.1%
Adjusted net profit(a)	276.3	248.6	+11.1%	+16.9%
Attributable net profit	232.5	225.2	+3.2%	+9.2%
Adjusted EPS(a)	0.61	0.55	+11.1%	+16.9%
EPS	0.51	0.50	+3.2%	+9.1%
Operating cash-flow	222.1	213.0	+4.3%	+7.1%
Free cash flow(a)	131.9	129.9	+1.5%	+5.1%
Adjusted net financial debt(a)	930.8	1,088.8	(14.5)%

(a) Alternative performance indicators are presented, defined and reconciled with IFRS in appendices 6 and 8 of this press release

H1 2023 FINANCIAL HIGHLIGHTS

Strong organic revenue growth in the first half, driven by solid demand and Sustainability and energy transition services

Group revenue in the first half of 2023 increased by 9.4% organically compared to the first half of 2022, including 10.3% in the second quarter, benefiting from solid underlying trends across most businesses.

This is reflected as follows by business:

• Two-thirdsof the portfolio (Marine & Offshore, Industry, Buildings & Infrastructure and Certification) delivered double-digit organic revenue growth in the first half, benefiting from strong decarbonization trends (Marine & Offshore, and Buildings & Infrastructure notably), energy transition (led by Renewables) and the rising demand for Sustainability and ESG-driven services (for Certification notably).
• Another fifth of the portfolio (with Agri-Food & Commodities) delivered mid-to-highsingle-digit organic revenue growth (up 6.5%). The growth was led by continued strong market conditions in government services and steady trends elsewhere.
• An eighth of the portfolio (with Consumer Products Services) declined organically, down 3.1%, impacted by continued high inventory levels and fewer new product launches.

Solid financial position

At the end of June 2023, the Group's adjusted net financial debt slightly decreased compared with the level at December 31, 2022. The Group has a solid financial structure with most of its maturities beyond 2024.

Bureau Veritas had EUR 1.7 billion in available cash and cash equivalents and EUR 600 million in undrawn committed credit lines at June 30, 2023. The adjusted net financial debt/EBITDA ratio was further reduced to 0.95x (from 1.10x last year) and the EBITDA/consolidated net financial expense ratio was 26.10x.

The average maturity of the Group's financial debt was 4.2 years, with a blended average cost of funds over the half year of 1.0% (excluding the impact of IFRS 16), compared with 2.5% in the first half of 2022 and benefitting from the increase in income from cash and cash equivalents.

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Bureau Veritas shareholders approved the distribution of a dividend for the 2022 financial year

At the Bureau Veritas Annual Shareholders' Meeting, shareholders approved the distribution of a dividend of EUR 0.77 per share for the 2022 financial year (3rd resolution, approved at 99.99%), paid in cash on July 6, 2023.

2023 NEW OUTLOOK

Based on the half-year performance, a healthy sales pipeline and the significant growth opportunities related to Sustainability, Bureau Veritas now expects for full-year 2023 to deliver:

• mid-to-highsingle-digit organic revenue growth (up from mid-single-digit organic revenue growth previously);
• a stable adjusted operating margin at constant exchange rates;
• strong cash flow, with a cash conversion3 above 90%.

BOARD CHANGES

On June 22, 2023, following the Annual Shareholders' Meeting, the Board of Directors decided the following:

• Laurent Mignon appointed Chairman of the Board of Directors of Bureau Veritas

Laurent Mignon was appointed Chairman of the Board. Prior to this, he was a non-executive director and had been nominated as Vice-Chairman of the Board of Directors and Chairman of the Strategic Committee on December 15, 2022.

• Pascal Lebard appointed Lead Independent Director and Vice-Chairman of the Board of Directors

On the recommendation of the Nomination & Compensation Committee, Pascal Lebard was appointed Lead Independent Director and Vice-Chairman of the Board of Directors. He has sat on the Bureau Veritas Board as an independent director since 2013 and is Chairman of the Nomination & Compensation Committee.

• Changes in Committees, including the creation of a CSR Committee

A CSR Committee was created and will be chaired by Ana Giros Calpe. It has also been decided to appoint Julie Avrane as Chair of the Strategy Committee, replacing Laurent Mignon.

All Bureau Veritas Board Committees are now chaired by an independent director, thereby strengthening the Group's governance.

For more information on these Board changes, the press release is available by clicking here.

3 Net cash generated from operating activities/Adjusted Operating Profit.

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ORGANIZATIONAL CHANGES TO THE EXECUTIVE COMMITTEE

• Hinda Gharbi appointed Chief Executive Officer of Bureau Veritas

On June 22, 2023, following the Annual Shareholders' Meeting, the Board of Directors appointed Hinda Gharbi Chief Executive Officer. She joined Bureau Veritas on May 1, 2022, as Chief Operating Officer and became a member of the Group Executive Committee. On January 1, 2023, she was appointed Deputy Chief Executive Officer of Bureau Veritas.

For more information, the press release is available by clicking here

In the first half of the year, the Executive Committee welcomed two new members reporting to Hinda Gharbi, Chief Executive Officer of Bureau Veritas:

• Vincent Bourdil appointed Executive Vice-President of Bureau Veritas Global Business Lines and Performance

On May 1, 2023, Vincent Bourdil became Executive Vice-President of Global Business Lines and Performance. He joined Bureau Veritas in 2016 to build and drive the Global Food Service Line. In 2019, he was promoted to Vice-President of Commodities, Industry and Facilities (CIF) South-East Asia. In 2020, Vincent became Senior Vice-President for the South-East Asia and Pacific regions.

For more information, the press release is available by clicking here.

• Marc Roussel appointed Executive Vice-President of Bureau Veritas Commodities, Industry and Facilities division in France and Africa

On March 1, 2023, Marc Roussel became Executive Vice-President of Commodities, Industry and Facilities (CIF), France and Africa. He joined Bureau Veritas in 2015 as Senior Vice-President, Commodities, Industry & Infrastructure, Africa.

For more information, the press release is available by clicking here.

COMMITMENT TOWARDS EXTRA-FINANCIAL PERFORMANCE

Bureau Veritas' GHG emissions targets approved by the SBTi

On June 1, 2023, Bureau Veritas announced that its near-term targets had been validated by the Science Based Targets initiative (SBTi).

The Group commits by 2030 (versus a 2021 base year) to:

• reducing absolute Scope 1 and 2 GHG emissions by 42%;
• reducing absolute Scope 3 GHG emissions by 25%.

This validation by the SBTi is an important step, in line with Bureau Veritas' Climate Transition Plan. It marks the Group's strong commitment to following a CO2 emissions reduction trajectory consistent with 1.5°C of global warming.

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Corporate Social Responsibility (CSR) key indicators

	UNITED					2025
	NATIONS'	H1 2023	Q1 2023	H1 2022	FY 2022
		target
	SDGS
SOCIAL & HUMAN CAPITAL
Total Accident Rate (TAR) 4	#3		0.23	0.27	0.24	0.26		0.26
Proportion of women in leadership	#5		29.7%	29.6%	29.2%	29.1%		35.0%
positions5
Number of learning hours per	#8		12.4	4.2	14.2	32.5		35.0
employee (per year) 6
ENVIRONMENT
CO2 emissions per employee (tons	#13		2.32	2.32	2.38	2.32		2.00
per year) 7
GOVERNANCE
Proportion of employees trained to the	#16		97.1%	96.6%	95.9%	97.1%		99.0%
Code of Ethics

Good CSR progress made in the first half of 2023

Over the first half of 2023, several CSR-related actions and initiatives have been implemented:

• Environment

Around the world, Bureau Veritas continues to review its sources of emissions, and maintain its efforts to reduce the carbon footprint, emphasizing three priorities:

1. conducting energy audits in its laboratories with the aim of identifying and quantifying projects that reduce energy consumption and carbon emissions;

• 1. actively working on the rationalization and greening of its vehicle fleet;
  1. accessing green energy whenever possible.
• Social
• 1. The Group began the implementation of a new system and approach for talent acquisition including the investment in new recruitment technologies that will help it hire more effectively and respond more quickly to local resourcing requirements;

1. key development programs for the Group's employees continued to be deployed at a group-wide level. Participants in these programs were identified as part of Bureau Veritas' overall approach to evaluating talent and succession planning and this approach was strengthened through more robust processes;

• 1. Bureau Veritas conducted a survey with its employees on Diversity, Equity & Inclusion to better understand key focus areas for strategies to achieve the Group's vision of a fully inclusive culture.
• Awards:

Bureau Veritas received several CSR-related awards in the first-half of 2023:

1. the S&P Sustainability Yearbook recognizes companies, grouped by industry, that have demonstrated strong corporate sustainability. This year, Bureau Veritas is in the Top 5% S&P Global ESG Score in the Professional Services industry;

1. Capital magazine in France recognized Bureau Veritas as an "entreprise engagée pour la diversité" (company committed to diversity) for 2023;

1. Bureau Veritas was included in the Financial Times' list of "Diversity leaders 2023".

1. TAR: Total Accident Rate (number of accidents with and without lost time x 200,000/number of hours worked).
2. Proportion of women on the Executive Committee in Band II (internal grade corresponding to an executive management position) in the Group (number of women on a full-time equivalent basis in a leadership position/total number of full-time equivalents in leadership positions).
3. Indicator calculated over a 6-month period compared to a 12-month period for FY 2022 and 2025 target values.
4. Greenhouse gas emissions from offices and laboratories, 12 months trailing tons of CO2 equivalent per employee and per year for Scopes 1, 2 and 3 (emissions related to business travel).

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