Welcome to the Bureau Veritas Q1 2025 Revenue Conference Call. My name is Allen, and I will be your coordinator for today's event. Please note, this call is being recorded and for the duration your lines will be on listen-only mode. However, you will have an opportunity to ask questions at the end of the call. [Operator Instructions] I will now hand over the call to your host, Hinda Gharbi, CEO, to begin today's conference. Thank you.

Thank you, Allen. Good morning, good afternoon and good evening to everyone. Welcome to the Bureau Veritas’ first quarter 2025 revenue presentation. I'm joined on this call by Francois Chabas, our Group CFO. Bureau Veritas delivered a robust quarter, leveraging the group's resilient business and geographical mix, while navigating and monitoring the current macroeconomic environment. I'd like to thank our colleagues for all their contributions to our results around the world. Starting with our revenue performance, I'm pleased to report that our revenue reached EUR 1.6 billion in the first quarter of 2025, reflecting an 8.3% increase compared to the same period last year. Our organic revenue growth progressed by a healthy 7.3%. This performance demonstrates resilience, clear business plans, and shows strong execution. CapEx activities benefited from a solid backlog, while OpEx services were derived from sustained and recurring customer spending. Additionally, we continued to advance our LEAP 28 active portfolio strategy through targeted acquisitions accounting for 3%, which then net of divestment contributed 1.4% to our revenue. This enables us to further pivot our portfolio. Finally, as the euro remains strong against most currencies, the currency impact was a negative 0.4% for the quarter. Bureau Veritas continues to build on its promising opportunities pipeline with strong mid- to long-term market fundamentals. Leveraging its backlog and building on these strengths, the group maintains its financial outlook for 2025 unchanged. We are confident in the resilience of our business model and want to capitalize on the current share price level. To that effect, Bureau Veritas will implement a new EUR 200 million share buyback program set to be completed by the end of June 2025. Now looking from a divisional and regional standpoint, let's start with the divisions. Three of our core businesses representing almost 40% of our portfolio, industry, marine and offshore, and certification grew double-digit organically. Agri-food and commodities reported a mid-single digit increase of 6%, while both consumer products, services, and buildings and infrastructure recorded low single-digit organic growth. Regionally, we recorded organic growth across the board. The Middle East and Africa region led the way with a 25% organic revenue increase derived from strong activity in energy and in buildings and infrastructure. The Asia-Pacific region grew 7.5% organically, led by robust performance in China, Australia, and in the broader South and Southeast Asian markets. The Americas grew 6.4% organically, with high single-digit increase for the United States business. Finally, Europe grew 3% on an organic basis with strong expansions in buildings and infrastructure in Southern Europe and in certification activities across the region. In the current environment, it is important to highlight why our portfolio is well positioned to navigate the ongoing volatility. Let me elaborate on the key factors that contribute to our growth resilience. Our portfolio is currently well balanced between three types of services. First, around 37% of our business is composed of recurring, OpEx, and systems-related services. This part of our operations is by essence resilient, as it addresses regulatory and voluntary requirements that are essential for our clients' business continuity. These services are not discretionary, and they provide a stable and recurring revenue stream. Second, more than a third of our portfolio is focused on products. This business is built on long-term partnership and long-established contractual frameworks with our clients. These offer us good visibility to plan and anticipate movements in the market. Finally, the CapEx side of our portfolio, which represents 26% of our revenue, we benefit from a solid backlog of projects. In the last decade, we have diversified our CapEx portfolio and decyclicalized it. We believe our balanced and diversified portfolio gives us a high level of resilience and capacity to anticipate the current business environment. Now, let me provide you with an update on our inorganic growth. Over the past quarter, we have completed two strategic bolt-on acquisitions. These transactions added EUR 38 million in annualized revenue to our top line and are fully aligned with the strategic imperatives of LEAP 28. First, in January, we announced the acquisition of Contec, an Italy-based provider of services in the construction and infrastructure markets. Contec counts public authorities, infrastructure operators, and private manufacturing companies as customers. This acquisition is fully in line with our infrastructure growth plan. Today, infrastructure for the B&I division represents 20% of its revenue. Additionally, we have also reinforced our presence in the copper testing industry through the acquisition of GeoAssay, completed this past March. This transaction strengthens our leadership in metals and minerals in Chile, the world's largest copper-producing country. This past quarter, we have progressed with the divestment of our non-core food testing business, and we expect to conclude the divestment of our last subsidiaries in Australia and Latin America in the second quarter of this year. We are now deriving a significantly higher proportion of our revenue from acquisitions compared to our previous strategic plan. While small bolt-on acquisitions allow us to fill critical gaps in our portfolio, we might consider very selectively medium-sized bolt-on deals. These are targets with revenues between EUR 100 million and EUR 500 million. Our M&A program exists within a disciplined framework that balances strategic fit with well-defined returns expectations. I will now hand over to Francois for the financial review of our first quarter revenue.

Thank you, Hinda. And good afternoon to everyone. So, let's look at the revenue. This quarter, we delivered EUR 1.5 billion in revenue, representing a total growth of 8.3% compared to the same period last year. If we break this down, organic growth stands at 7.3%. In addition, we have a positive scope effect of 1.4% in the quarter. It reflects the accelerated pace of our acquisition program, with multiple bolt-on deals as we realized last year. They contribute around 3% to our top line. And this was partially offset by the pivot that Hinda has been talking about on the disposal we've executed, accounting for minus 1.6%, so a total of 1.4%. So, when it comes finally to foreign exchange, the impact is less significant than in 2024 and the last quarter of that year, as we registered only a slightly negative 0.4% in the quarter. If we take now a closer look at the revenue dynamics of our different business lines in this quarter, while we posed an overall organic growth of 7.3% and an inorganic growth limited to 1.4%, I wanted to spend a bit of time to illustrate the reshaping of the portfolio, which starts to materialize when we have a look at the business-line level. Indeed, divestment and investments are concentrated on different segments in order to execute a pivot of the Bureau Veritas’ portfolio as has been presented to the market back in March 2024. The inorganic Q1 revenue increase reflects three main areas of investment aligned with the LEAP 28 strategy. First, on CPS, the diversification services and geography contribute to 4.4% inorganically at the division level, complementing the 3.4% organic growth of the quarter. Second area of investment, cyber compliance and supply chain sustainability under certification has 3.7% inorganically, to an already strong organic component of both 10%. And finally, the investment in B&I infrastructure under the B&I division has 5.2% at the division level. Simultaneously, the divestment is concentrated on one single division, agri, food and community, and reduces the segment by almost 6%, which is kind of offset by the organic growth of the division. So as you see, we are over on track with our plans to combine both an organic growth momentum and being able to build a more resilient portfolio. A word on capital allocation now. Today, we have a healthy balance sheet that gives us flexibility to execute our M&A strategy, to allocate CapEx and to provide steady return to shareholders. We aim to operate within a debt leverage of 1x to 2x. So it provides us with a sound financial structure and the right financial flexibility. So we maintain a disciplined and prudent framework when it comes to how we deploy our capital. This includes the sound and unchanged cash dividend policy, as well as a well-managed CapEx spend targeting 2.5% to 3% of our revenue. Second, while executing our M&A program, focusing on small bolt-on acquisitions, and we will be opportunistic and consider very selectively medium-sized bolt-on deals revenue in the range of EUR 100 to EUR 500 million. Finally, we consider it an opportune time to initiate a new share buyback program. Given our confidence in the resilience of our business model and the current level of our share price, we are implementing a EUR 200 million share buyback to be completed by the end of June 2025. Let me now hand over to Hinda for the portfolio business highlights.

Thank you, Francois. Let me start with the marine and offshore division. It delivered a strong 11.8% organic increase. Once again, the performance benefited from the marine sector drive to reduce emissions, the fact that the sector is renewing its fleet, and also what they expect in terms of energy efficiency. Looking at our activities in more detail, we recorded strong growth in our new construction segment with a double-digit increase, with Asian shipyards' delivery actually was faster than we expected. Our core in-service business is back in line with historical and rather normative levels, with somewhat unfavorable comparable, delivering a low single-digit organic growth. Other services delivered a mid-single digit growth with a gradual pickup in orders in some of the offshore activities. In the first quarter of 2025, we secured 3.9 million gross tons in sales. This has boosted our backlog to 27 million gross tons, up 16% year-on-year. New orders included contracts for new dual fuel ships, LNG carriers, container ships, and specialized vessels. The marine industry is modernizing its fleet, and we have a solid and large backlog. These two factors cushion us in this moment of uncertainty around global trade. As we mentioned in our February results presentation, we anticipate that shipyards will be fully utilized in 2025, which may slow the conversion of our backlog compared to 2024. Lastly, I would like to highlight marine and offshore adoption of AI and machine learning technologies. This is for the purpose of gaining efficiency and to improve customer experience. The division has put together a technical helpdesk that is now using AI to quickly access vast amounts of rules, regulations, and guidance information, allowing engineers to respond rapidly to customer queries without compromising quality. Moving on to agri-food and commodities, we delivered 6% organic growth in Q1 2025, driven by the oil and petrochemical segment, which achieved low single-digit organic growth with strong performing Middle East activities. The metals and minerals business recorded an acceleration, posting high single-digit organic revenue growth. This is a result of our on-site laboratory's growth in Australia and Latin America and of the ramp-up in the Middle East gold and copper projects. Now, in line with our objective to maximize value and impact from mature businesses, and specifically for this business, the group recently acquired GeoAssay to strengthen our position in Chile, the world's largest copper producer. Agri-food grew low single-digit, driven by strong upstream performance from a good soybean crop production in Brazil. In our food subsegment, we continue the disposal of the different assets, and we have just completed the disposal of the Asian and African food testing businesses. Finally, government services recorded high single-digit organic growth, fueled by contract ramp-ups in the Middle East-Africa region and scope expansions in Southeast Asia. In the quarter, we secured two strategic transition services contracts, highlighting our sustainability expertise. First, we gained market share and expanded our verification and control services for sustainable fishing and aquaculture in Peru. We also secured the mandate to certify seven Danish fish farms in line with the ASC Aquaculture Stewardship Council standards. Let's move to the industry division. Industry was the best-performing division in the first quarter of this year, delivering 14.3% organic growth. The oil and gas subsegment maintained its double-digit organic growth trajectory in the Middle East and Asia, benefiting both the CapEx and OpEx activities. The power and utilities business recorded another very strong double-digit organic increase, driven by robust activity for renewable energy and battery storage projects, particularly in North America and Asia. Nuclear activities in the UK were also strong. Additionally, our industry product certification units sustained double-digit organic progression. This was enabled by continued momentum in traditional services, but also with the successful rollout of new solutions. The consistent performance of our industry portfolio underscores the favorable market dynamics in the energy and power sectors. In the first quarter, we secured several strategic contracts that highlight the breadth of our expertise. A carbon footprint verification contract with a leader in industrial gas production. A construction management services contract for a North American power developer, demonstrating our large-scale project delivery capabilities. An emissions quantification mandate from an oil and gas firm in Brazil, showing our specialized monitoring and assurance skills. Let's review the performance of our building and infrastructure division. This business delivered 2.5% organic revenue growth, impacted by this quarter-reduced number of working days. Both construction and building and service work grew, and then infrastructure also continued its growth momentum, outperforming that of buildings. In the Americas, we achieved mid-single digit organic growth from strong activities in the U.S. in data centers, infrastructure projects, and real estate services. We also secured a special inspection contract for a critical rail infrastructure project in the most heavily used passenger corridor between New York and New Jersey. Europe delivered low single-digit growth. Italy, however, continued its robust performance from infrastructure spending. The recent Italian acquisition of Contec should help us sustain this performance. France's organic growth was muted due to one less working day. But overall, the OpEx business remained resilient there, benefiting from productivity gains and positive pricing. Asia-Pacific contracted slightly, primarily due to weak public spending in China. However, we recorded growth in South and Southeast Asia. In Australia, I'm happy to report that the recent APP acquisition is providing attractive medium-term opportunities in infrastructure. In the Middle East and Africa, we maintained strong double-digit organic growth driven by large projects in Saudi Arabia and the UAE. I'm also pleased to highlight two transition services-focused contracts secured this past quarter in the B&I side. The first one was a U.S. state agency to carry out building assessments and energy audits for a portfolio of housing assets. The second one related on airport green building LEED projects in Italy. Moving to certification. The division delivered a 10.9% organic revenue growth, making it one of the strongest performance across our portfolio. This was led by increasing volumes and robust price escalations across most geographies, with double-digit organic growth in Europe, the Middle East, and Africa, and high single-digit elsewhere. This reflects market-sustained momentum as customer demand for comprehensive brand protection, risk management solution, and supply chain resilience remain high. If we look at it by subsegments, our QHSE and specialized schemes solution posted high single-digit growth. This was achieved despite tougher comparable after a year of recertifications across various industries. The growth was primarily driven by high demand for customized and voluntary certification programs. The ramp-up also of large public outsourcing contracts for food safety inspections in France and food second-party audits and training services in Spain contributed to the growth. Sustainability-related solutions and digital solutions certification activities maintained their double-digit organic growth. This was fueled by high demand for greenhouse gas emissions verification, forestry services, and supply chain audits. Cybersecurity certification and assurance also grew double-digit from increased customer penetration and excellent market traction. During the quarter, transition services continued to develop, providing CSRD reporting advice and environmental product declaration verification for leading manufacturing clients in Europe and the UAE. On the performance front, we are modernizing our certification production tool, and in the coming weeks, we will be testing the new platform in multiple business units to confirm efficiency gains. Finally, before we get to the outlook, let's review the performance for our consumer product division. This business delivered 3.4% organic growth and 4.4% scope growth, as mentioned earlier by Francois. This is fully in line with our diversification strategy by service, by sector, and by geography. This performance is as expected. Our soft line, hard line, and choice segment posted mid-single digit organic growth. European customers fueled the growth in South Asia and Vietnam. In healthcare, beauty, and household, we recorded high single-digit organic growth fueled by volume increases and some pricing benefits, mostly in the U.S. domestic market. The development of this business is a direct result of our multi-year diversification strategy. Supply chain and sustainability services delivered a double-digit performance driven by strong demand for social audits and green claim verification, particularly in Asia. As an illustration, we delivered lifecycle analysis and eco-design certification services for a French wholesaler of electronic parts. We also carried out social audits for a German importer of non-food items for its hard line and soft line products, covering 500 suppliers in China. The technology business recorded a mid-single digit organic contraction impacted by reduced new product launches in electronics and wireless and a decrease in new mobility testing demand, primarily in China and Taiwan. As the U.S. tariffs continue to evolve and until we have a definitive view, we are closely monitoring the situation and studying different scenarios. That includes market sourcing shifts, new services development, and redeployment options. Moving now to the outlook. Our strong Q1 performance confirms the resilience of Bureau Veritas' diversified portfolio. We are monitoring carefully the evolving macro and we remain confident in the long-term and secular trends that underpin the growth of our market. As they face an evolving global trade system and geopolitics, our customers are adapting their business and their priorities. They're focused on risk management with the aim of protecting their brand, their reputation, and their competitiveness. They must assure the resilience of their supply chain, manage their growing digital exposures, and anticipate new risks. This increased emphasis on risk management, brand protection, and supply chain protection directly plays to our core competencies. Additionally, the trilemma of energy security, affordability, and scalability are crucial to global development and growth. Our expertise in both the build-up and OpEx phases of all energy sources, fossil fuels, and low carbon position us well to benefit from the ongoing cycle of investment. Similarly, urbanization and the renewal and expansion of urban infrastructure create significant opportunities for us to grow our services and business. We will be supporting the ongoing build-up phase of infrastructure and the rapidly developing cycle of renovation of existing buildings. The robustness of these trends provides us with a firm foundation for sustained growth. For the outlook, considering this new reality, our resilient pipeline of opportunities, and our solid backlog, we maintain our outlook unchanged and expect to deliver for the full year 2025 mid-to-high single-digit organic revenue growth, improvement in adjusted operating margin at constant exchange rates, strong cash flow with a cash conversion above 90%. In closing, Bureau Veritas navigates the current business environment endowed with several key strengths, a solid backlog, an engaged workforce, and a track record of reliable execution. Our business model is designed to be resilient with a well-balanced mix of activities and a healthy financial position. The changes around us are ongoing and it will take some time to settle. As always, in Bureau Veritas, we're working on what we control. First, we are vigilant to ensure we deliver on our commitment to our shareholders through the execution of our LEAP 28 strategy and by initiating a new share buyback program. Second, we are accelerating our performance programs, developing new opportunities, and securing new sales. We're also staying close to our customers as they adapt to this new environment. This disciplined approach positions Bureau Veritas well to navigate the evolving business environment and will create long-term value. Thank you very much and we'll now take your questions.

[Operator Instructions] We will take our first question from Suhasini Varanasi, Goldman Sachs.

Hi, Hinda. Hi, Francois. Hi, I'm asking on behalf of Suhasini, actually, and I have two questions, if I may. Firstly, given the growth rate you've seen in 1Q, can you discuss the phasing and expectations for 2Q and the rest of the year, especially as you face tougher comparatives? The second question is in consumer products, especially in soft lines and hard lines specifically, you mentioned in your press release that you saw some pull forward of demand initially in the quarter, which later unwound. Is it fair to say that then the growth rate at the end of the quarter was slower than 1Q of 3.5%? And then can you give us some color on what your customers are telling you at this point, given the tariffs and macro uncertainty? Thank you.

Sorry, could you repeat the final question here? We didn't catch that.

Yes, sure. It's just about the fact that you did 3.5% in consumer products during the quarter, but you mentioned that you saw pullback of demand towards the end. So can you give us some color on what the exit rate there was, and then also what customers are saying around the tariff and macro uncertainty?

Sure. Thank you for the questions. So first of all, let's start with the outlook for the year. I think what I said in my comments, and I will repeat because I think it's very important for the guidance of the year, is we have been designing a resilience mix for a number of years, and we have diversified the portfolio, and we continue to refocus it, as you know, in line with our strategy. And the whole idea here is to diversify and stay resilient so we can manage, actually, times like where we are today. That's the first point. The second point, our backlog is resilient, is solid, and mostly linked to long-term projects. I've talked about the fundamentals. I think it's very important to keep in mind that the fundamentals that underpin the growth of our markets remain solid, and these needs and these trends are not going to disappear. But, of course, customers have to adapt, and that's why we believe they are pivoting to this risk management and balancing focus, impact, and spend as they pursue this. The other thing that is very important is the execution pedigree of Bureau Veritas has been very strong, and we have been very reliable delivering through good time and a bit more difficult time. We are very clear that we need to stay close to our customers, and that proximity gives us a competitive advantage to be able to anticipate and be prepared. So, overall, as we look at the macro today, as we look at all these trends just enumerated, we're quite clear that, at this point, we believe we're not going to change our outlook, and we expect to deliver as per our commitment. Now, the second question on CPS. I think the key thing here, again, on CPS, we have said that, for this year, we expect CPS to connect rather with normative growth levels, and we've seen that in Q1. We're not surprised by the performance of CPS in the first quarter. We have been working on diversifying the portfolio for a while. Yes, there was a little bit of pullback, but that is not the biggest part of the performance. I think the key thing we're seeing, and I've mentioned it in the prepared remarks, is that we're seeing the sourcing shift taking place, and, therefore, we're seeing very robust performance in South Asia and Southeast Asia. The exposure to China, it's very important to mention, is actually only 2% of our global revenue. I mean, this is not the biggest part, and, therefore, we don't expect it to have massive impact. Of course, we're monitoring very closely, considering the level of tariffs on China, but the performance is as expected. We have seen, actually, good performance on the soft line, hard line, and toys. We've seen contractions in technology. Again, not surprised. We knew that this is still a difficult market for wireless products, for new product launches, and for new mobility or, rather, electric cars. So, performance as expected, and we expect that, as we move forward, we will stay aligned with those normative levels I talked about. Similar, maybe slightly higher than Q1.

We will take our next question from Carl Raynsford, Berenberg.

Hi, Hinda. Hi, Francois. And three from me, please. Just a B&I, firstly, just to clarify on the Americas. Is it fair to assume a contraption organically within Latin America, given the U.S. did high single digit? And, if that is the case, could you clarify exactly what's occurring there, please? I think we should have lapped the Argentina exit by now. So, if so, what should we expect for the rest of the year, really? And, also, on that note, how should we think about China sequentially? It's down year-on-year in terms of, probably due to COGS, I suspect, but sequentially, is that still getting worse, or can we think of it as stable, bad stable now? And then, secondly, on B&I, just on the working day impact, if I'm not mistaken, Q2, we should have sort of half a day less, I think, versus one day less in Q1. So, should we be thinking of that as an effect, again, on our tech activities? And then, lastly, on technology, I'm a bit surprised by the mid-to-high single digit contraction after Q3 and Q4 pointed to a fairly decent recovery. And I assume Q1 this year would be fairly easy comp. So, is that being impacted by confidence and tariffs? And, if so, do you think that's a short-term impact, or is that likely to last throughout the year, despite comps in theory, getting a bit easier in Q2? Thank you.

Yes, thank you. Thank you, Carl, for the question. So, let me start with the B&I in the Americas. You're right. We have seen very strong performance in the U.S. at high single digit. In Latin America, it's actually nothing to do with Argentina. We have activity in Brazil that has stopped. We also have seen Mexico with infrastructure projects that have delayed this year with the new administration in that country. So, it's really mostly there, nothing to do with Argentina for B&I specifically. What is really positive about the Americas is the performance in the U.S. has been very good, high single digit, and we've seen really a pickup. We continue to see very strong performance on the data center. We are seeing the infrastructure starting to pick up. Code compliance is doing very well. Asset managements are picking up. And what is quite telling is real estate transactions are also picking up, which is showing a lot more dynamic market. For the second question, on the working day, we do not expect that to repeat in Q2. So, this is an impact in Q1. I'm normally reluctant to mention these, but because it's important happening in France and it's mostly a mass market with a lot of volume, it is material. And that's why we're mentioning it at this point. But no, we don't expect that in Q2. For three, look, I think the technology piece here, this is not about tariffs. The tariffs haven't really hit yet. This is about what we knew would be a challenge with our technology portfolio. It's something we've been working on and talking about for a while. Our technology portfolio for a long time was exposed to few geographies and the mix of products. I mentioned wireless. I mentioned new mobility. It's too strong on those items. And what we've been doing in the last two years, I would say, and we will continue to do going forward, is to diversify geographically. We started with the acquisition of the Mexico business and the Korea business last year as well and a small business in India. And we continue to do that. We need to diversify geographically. We need to diversify in terms of type of products with a focus on electrical appliances that is not as prominent in our mix as perhaps what we would like to have. So, as we do that, it's going to take us a little while. But that's where we expect we start seeing sustained good performance in technology. So, nothing to do with tariffs.

Thanks. Just a quick one on China as well, just in terms of if that's getting sequentially worse or better. Sorry, on B&I specifically. I don't know if you caught that one.

Yes. So, look, B&I, I think, in China is very clear. It really is a difficult market. You've seen us last year divest one of the businesses we had there because we believe that the long-term trends are going to remain equally difficult. Despite the stimulus that the government put in place, we're not seeing spend on infrastructure or light infrastructure or what we refer to also urban infrastructure. So, we have seen a contraction definitely in B&I in China. And that's why our whole strategy around B&I is to develop other markets, particularly emerging markets. You've seen the markets of Middle East Africa were actually growing very nicely, double digits in B&I there.

We will take our next question from Annelies Vermeulen, Morgan Stanley.

Hi, good afternoon, Hinda. Good afternoon, Francois. A couple of questions as well. So, firstly, I wanted to talk a little bit about the mix of renewables and oil and gas. So, you've done, I think, strong double-digit growth in both of those. However, with more companies stepping away from decarbonization net zero targets, are you seeing your customers, or rather, have you seen any change in mix from your energy-focused customers between oil and gas and renewables? And also, if we think about things like drill baby drill in the U.S., do you think that there'll be, in the near term, stronger growth in oil and gas relative to renewables? That's the first question. And then, secondly, just on the 25% organic growth in Africa and the Middle East, I think you did a similar level last year, and you called out strong energy activity, buildings and infrastructure. Could you give a little bit more detail on that? I know you've talked about the opportunity in Saudi in the past. So, is it contract wins? Is it stronger pricing in that area? What are the building blocks of that 25% organic growth? Thank you.

All right. Thank you. All right. So, look, Annelies, I think there is a lot of rhetoric, of course, today on the renewables, the low-carbon energy versus the oil and gas. I think there is room for both. And what we see today is, I mean, not to mention some very prominent companies that are changing their plans. I think there is clarity that there is room for both because the oil and gas is affordable today, is available, and is scalable. And the renewable side is needed because we will never be able to fulfill all the demand needs that we see just by oil and gas. And just to give you a data point that is very important, in 2024, electricity demand was 1,100 terawatts. And that basically is twice the average we've seen in the last 10 years. So, massive, massive demand of energy. Oil and gas alone will not actually fulfill that. So, the need for other sources of energy is there. Now, of course, different regions of the world are looking at this in different ways. We've seen the U.S. starting to pull -- will be pulling from renewables. There is less support for the IRA, as you know. And therefore, we expect that probably from ‘26 onwards will have impact on new projects. We're not seeing that today because these are long-cycle projects, and we are executing projects that are not going to be stopped now. But new projects approvals are not going to take place. So, you see that in the U.S. specifically on renewables. On other parts of the world, in countries where oil and gas are not available, actually, renewable options are very important. Now, renewable has its own kind of set of technical challenges and limitations that need to be taken into account. But what is interesting today is people are talking a lot more on the supply chain and how that will affect the project. So, to me, renewable and our position in Bureau Veritas is a key source of energy that will develop. And the supply chain is actually improving, even if there are limitations today, possibly with tariffs for some parts of the world. But we expect that a lot of the production is actually coming from China that will be proposed to many parts of the world as producers try to find markets if the U.S. market is closed for them. So, rather positive on the renewable is just going to move around. If we look at how we ourselves look at oil and gas and what we think is happening today. First of all, just to remind us all where we are. In the last 10 years, we have fully de-risked oil and gas in our portfolio. Just today, our exposure to oil and gas, including petroleum, which is particularly the lab work we have, is only 14% of group revenue. And when we look at those 14%, two-thirds of those 14% are actually behaving like an OpEx. They are OpEx and other services that are behaving like OPEX. So, very resilient. And then when we look at forward plans as the futures of oil and gas are looking, prices looking low, actually not every part of the world will fully reduce investments because there's still long-term projects they need to do. The nice thing with our position footprint geographically, we are very well represented in key provinces in the Middle East, in Latin America, in Asia. And therefore, we will benefit from the pickup of spend in some of these or rather the fact that they maintain their spend there. The drill baby drill in the U.S. is a very specific thing. I think reality of the U.S. market, as we all know, it's a shale oil market that will depend on the price of the commodity rather than anything else. Now, there might be opportunities in new acreage opened by the new administration, possible. But at this time, I think it will really, it's the economics that will decide whether the investments will continue. The positive thing about the U.S. is gas projects will proceed. We're very positive about that. We're quite long on gas and LNG is picking up. After the Biden administration stopping things late last year, we're seeing a pickup this year. And therefore, we're quite positive on that. I'm going to ask Francois if he wants to comment on the MCA growth breakdown.

Good afternoon, Annelies. So in the Middle East and Africa, just to set the scene, it accounts for roughly 10% to 12% of our revenue, depending on the quarter. Indeed, we confirm overall we grow double digits on that segment from the geography. Here, the view we have, it's a geography that is very much geared towards either resource, so typically mining and commodity or energy, oil and gas or certain main infrastructure. In those three segments, we grow double digits. From a price volume approach, this is heavily driven by volume. These are most of them are new contracts, new projects where Bureau Veritas is to gain market share. So if we used to say that within the overall mix and that's what we've seen already in Q1 as well, we said two third volume, one third price. I think it's fair to say that on Middle East and Africa, it would be more 80

20. It's much more geared towards volume as we gain, again, market share. We grow business. We grow the footprint over there.

We will take our next question from Arnaud Palliez, CIC Market Solutions.

Yes. Hello. Good afternoon, Hinda. Good afternoon, Francois. I have just two questions, please. The first one is for the product part of your business, which accounts for 37% of your revenues. What is your exposure to international trade and the tariff, basically? And the second question is regarding capital allocation. For the EUR 200 million share buyback, how the size of this share buyback has been fixed and what is your current acquisition pipeline? How have you made a choice between making acquisitions or buying back your own shares?

Thank you, Arnaud, for the questions. I'm going to let Francois start with the capital allocation. Then I'll take your question on the product. Go ahead, Francois.

Yes. Good afternoon, Arnaud. So again, putting that a bit into a frame, the capital allocation policy of Veritas has not changed. It will remain globally low in terms of intensity of capital investment for the nature of a business. It's mainly driven by inspection, which, again, as a reminder to everyone, requires less than 1% over a new CapEx investment. So we remain low intensity here. We pay dividends in cash, and these dividends increase in a fashion with earnings. And we have the M&A component. Overall, and it's very important to remind ourselves this, overall, the Veritas commitment when it comes to our LEAP 28 plan is to deliver a double-digit increase in shareholder returns, EPS plus dividend yield. So this has not changed. And the second thing that has not changed is the financial disciplines by which we commit to remain between in the range of 1x to 2x in terms of leverage. So that, just again, for those who know it by heart, it may be painful to re-listen, but I think that's very important to us. That's the way we look at things. The current context is, as you've seen, the December numbers in terms of leverage. We have a very solid balance sheet, 1.06x at the end of December. It hasn't materially changed right now. Two, we are very confident in the outlook we've put for the rest of the year. Three, we have an opportunistic view when it comes to our share price. I think let's face it, it's currently cheap. So if you combine the three of those and what we want to achieve at the end of the year, which is, again, double-digit increase in shareholder return, we thought it was opportune to carefully design a program that is at EUR 200 million, respect everything that I've said before, doesn't put into danger our financial discipline, doesn't put into danger or put at risk our M&A ambitions. But it's fair to say that in the current context, most probably a couple of deals may take a few months more because just uncertainty. So we may have seen a few deals close earlier in the year that would be close perhaps in Q3 instead of Q2, this type of thing. So we thought that was the right time for the reason of it's a bit opportunistic from the share price point of view. It remains within our financial policy, doesn't endanger our M&A program. And that's the way we size these EUR 200 million share buybacks.

Thank you, Francois. Arnaud, on the question of the product, the 37%, reality is we have the consumer products, it's a business that is probably the most frontally exposed to tariffs. And I just explained earlier that things as they stand today, we will see how it progresses. But we know that our customers are shifting to some other geographies, for example, when it pertains to China and the producers in China and elsewhere are thinking of other customers and thinking of other geographies where they can invest. When you look at all that, this is actually rather there are opportunities there because we'll be able to help the new customers who are going to new locations so they can test and build the resilience of their supply chains. And the producers who are looking for new markets, we're helping them access new markets. So consumer, which is 13% of our revenue, is probably having that exposure I just talked about. The rest of the products, they tend to be commodities. And these are flows that will continue to take place. Of course, there will be some, we'll see how the tariffs will progress. But whether it's oil and petrochemicals or whether it's metals and minerals, whether it's an agri product, these are long term frameworks. These are exchanges that are essential to different economies. And the flow, the visibility is there. And I think that's the important thing. These are visible long term contracts that we will monitor how maybe some of the tariffs in the future might impact things. But frankly, our exposure is quite limited. It's really the supply demand of these commodities that determines how they evolve at this point more than anything else.

We will take our next question from Allen Wells, Jefferies.

Good afternoon, Hinda. Good afternoon, Francois. A couple of clarification ones from me, please. Just in terms of the pull forward on the soft lines business that you call out, did you, I'm not sure if I missed it, but did you quantify the net impact, like the pull forward and the reversal versus the 3.4% in consumer organic growth? And then maybe just in that vein, when you think about the 90 day delays to a bunch of tariffs, tariff implementation, when you think about April or at least what you're seeing in April, are you seeing any kind of further pull forward in particular areas in relation to that delay?

Yes. Thank you, Alle, for the question. No, we did not quantify the pull forward. I think it's for transparency, we wanted to mention that there is a bit of behavior that way, but no, we did not quantify. Look, I'm quite actually clear on what's taking place in consumer. We're not surprised with what's taking place. We said that this year it will reconnect with its normative levels of growth. Last year, we grew 7%. We said this year we will reconnect with lower values and that we knew. And actually, the good news is in April, we haven't seen a drop. It's a robust performance. And the other point, which is very important, Francois mentioned it, but I want to reiterate, we are actually growing 4.4% on scope, on CPS, on consumer business. And that's very important. This is a long-term strategy to continue to diversify the portfolio, to diversify services and to diversify in new sectors. So when you look at, it's true we're looking at the organic growth, but reality is we are transforming this portfolio. So the growth actually is rather in the almost 8%, right, 7.5%, 8%. And we expect to continue to refashion and re-engineer this consumer business. I hope that answers your question, Allen.

Yes, great. And maybe just a quick second one, just on the B&I business and the high single-digit growth on the US platform that you call out in the comments. When you look at the backlog as it sits today, that's sustainable through the rest of the year. I'm just mindful of, I guess, the general uncertainty, broader slowing macro recessionary concerns. Is that something that you, that would impact that business this year, or given the backlog, that kind of strong high single-digit growth in the US can be sustained? Thank you.

Yes, look, I think in the US, a few things there. I think the backlog is there, and we see it in multiple businesses, right. We see it in our data center business. We see it in our infrastructure business. We see it in our asset management business. We see it in our code compliance business. And we're seeing growth in all these subsegments quite regularly. We also need to keep in mind that the infrastructure spend in the US is expected to go up. The administration, the current administration, is not touching that, which is actually quite positive. The other thing I didn't mention, and I think I ought to mention, is we're seeing reindustrialization in the US. And there is manufacturing coming back. We see a lot of projects around different states where they are building new facilities, new plants, new manufacturing sites. And that's an area we are focusing on. So I think the market is rather positive. We also looked quite closely at the exposure of B&I to foreign construction materials. And actually, that is not too bad either. A lot of the construction materials are actually sourced within the United States, which was a major concern. So all-in-all, we consider that the US has a rather strong year ahead of it on the B&I front.

We will take our next question from Karl Green, RBC.

Yes. Thank you very much. Good afternoon to you. Just two questions. Circling back to the share buyback announcements, I think you talked about it being opportunistic. But noting that your shares are only down 4% year-to-date, what is the logic of announcing that buyback now rather than waiting until perhaps later in the year when you've got a better handle on what the implications of trade frictions are? And then the second question, just a broader question about the framework that you use to set your guidance. How are you testing the integrity of that guidance in terms of looking at internal KPIs, conversations with external customers? I suppose putting it a different way, what would it take for you to adjust your guidance later in the year? Thank you.

Look, let me start with the second question. I think it's important. We are sitting in a period where there are so many changes every day. And it would be purely speculative to think about what -- there is no end state today is what I would like to say. And therefore, we are looking at the information we know for certain today. We're assessing our exposures to what we know today. And we have determined based on that assessment, based on the strengths I mentioned in terms of our mix, our backlogs, the opportunity pipeline, and what our customers are doing and are saying. And we consider that today the best course of action is to keep our outlook unchanged. I think once we settle, and hopefully after the 90 days we will see some stability in the outlook, then one can do a proper assessment. I think today with everything we know, with everything we have, we're quite solid with our outlook unchanged. On the first question, I think it's really interesting, the shared buyback question, because it's sometimes why we don't do it. Now, why are we doing it? Look, for us, it's very clear. We have said it many times, and I think Francois said it earlier. We said it's a tool in our toolbox for our return to our shareholders. We look at the different allocations of our capital, and we said when we feel it's the right time, and without jeopardizing the strategy execution, we will consider a shared buyback. We think at this point it's an opportune time to do that, considering what we believe about our business outlook, the programs we have in place in terms of our capital allocation to inorganic growth, and the levels of the share price. Francois, did you want to add to that?

No. I think the comment on us, the share price being down only minus 3%, to me is not really a valid comment. We believe the share price is worth much more, so no doubt about it.

We will take our next question from Sylvia Barker, JPMorgan.

Hi. Good afternoon, everyone. Three for me, please. Just a similar question, I guess, to Allen's on backlogs and order books, but this time within industry. Could you maybe just discuss, I guess, what levels is your order book at? How much is that kind of up in a similar fashion to what you do for us for M&L? And what's kind of the length of these projects within the industry, order books specifically? How much visibility do you have in that business? And let me just come back to the comments on U.S. renewables and the projects, I guess, possibly drying up a little bit in a year or so. How much is that contributing to your growth today, that U.S. renewables piece? And then final question, just a quick one to check. Within certification, that food testing contract in France was still ramping up, I believe, into kind of Q2 this year. How much did that contribute still in the first quarter? Thank you.

All right. I'm going to take the M&L question. Francois, you take the certification question, okay. So look, on the M&L, we said we have EUR 27 million growth done today. And that is 16% growth year-on-year of our backlog. Generally, the project execution takes around 18 months. With that kind of backlog, we're looking at a two to three year visibility. What is very clear in the marine site is the global fleet is old, or at least a significant part of that global fleet needs to be modernized. So that is quite clear. Not only modernized because it's better for efficiency, but it's also better, of course, from an emissions perspective. Whatever is out there about the emissions, whatever we should do or not do, the marine sector is one of the hardest to abate sectors. And there is a real commitment to decarbonize. So for us, the fundamentals remain there in terms of the need to modernize. We have a very good backlog. The shipyards are actually operating at a very good pace. They are full. We will see how that pace evolves as they progress. But all-in-all, we consider it's quite a solid order book. On the renewable projects, look, I think we, first of all, the renewable business in the U.S. is growing fast, but it remains a small business. And it's not, at the group level, it's not material in terms of size. But in terms of growth, it's important because it's very, very fast growing. It's also a business that we are using to scale capabilities around the world. And that's this whole slowdown in the future of renewables we're expecting. What we think will continue in the U.S. is the transmission grid that is needed, whatever the source of power is, that is work in that area. Energy storage, storage systems, battery storage systems, that's also another area of focus in the U.S. And, of course, gas, if we consider gas a low carbon option versus oil, we're seeing projects that will pick up there. And then the other thing I want to say on renewables, the rest of the world is picking up renewables. Especially now, as we expect that some of the supply chain, as it eases out and as it potentially gets cut off or cut out of the American market, they will be looking for new markets. And that should drive some pricing down as well in different markets. We expect the Middle East, we expect Asia to ramp up on the renewable side, and we expect China to remain rather stable on that. Francois, did you want to take the certification question?

Yes, we are very happy to see your interest in the quality of the French restaurants. So I confirm to you that the ramping up is continuing over Q2, and the investor relations team is available for answering your question in more detail about the commas of growth which are related to this ramp up.

Okay, thank you. Sorry, it was my bad, probably not explaining very well my first question. It was actually on industry. I mentioned M&O, so you provided a lot of good information on M&O specifically. I was wondering if you have --

On industry, we don't publish numbers on these backlogs, but as you've shown a good interest in the French restaurant, we'd be kind enough to give you at least a bit of an idea. For you to keep that a bit in mind, when we start the year in this industry division, we have roughly half of the business in backlog, half of the revenue of the year signed 100% sure. And I would say roughly 25% that is being or in the process of being worn or subject to frame agreements. So two-thirds between hard and soft backlog is in hand. One-third remains to be found. But that's kind of the way the business is currently shaped, that the way we think about the business this year in 2025. But of course, we revisit this backlog every quarter, but we don't publish numbers on a quarterly basis.

There are no further questions on the line, so I will now hand you back to your host for closing remarks.

All right. Thank you very much, Alan. Thanks, everyone. Thank you. Bye. We'll close the call now.

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