00:00First of all, your share price is actually higher, so congratulations on that.
00:04But your company really provides testing and certification across a range of industries.
00:09So what are you seeing in terms of economic outlook?
00:12Are you positive? Are you worried? Who's doing what?
00:19Good morning. Good morning, Francine.
00:22Look, we're very pleased with the results for the first half.
00:26The business environment is obviously complex.
00:28I just listened to this segment before.
00:31But what distinguishes Bureau Veritas in this market is we're a very diversified, desyclicalized group,
00:38and we've been working to continue to do so.
00:41So we are rather balanced in our view of how the market will evolve.
00:46We think our market fundamentals are particularly strong,
00:49even if the backdrop of the macro environment is complex.
00:52And we have been pivoting our portfolio and rotating our portfolio to align it with the fast-growing resilient segments
01:01of this market.
01:01So our view is to continue to cautiously monitor situations like the Gulf, of course, the conflict we see in
01:09the Gulf.
01:10But what's important for us is to continue to control what we can, which is executing on our strategy.
01:18When you look at the Middle East, how are these renewed tensions actually affecting your clients?
01:23And has there been an impact on your business there?
01:27Well, there was some impact, of course, once the flows of oil couldn't leave the Gulf.
01:35There were some impacts on our oil and petrochemicals activity.
01:39But what we have seen, we've seen resilience in capital projects where plans have been maintained,
01:45a bit more softness on any of the OPEX activities where there is a little bit more discretionary decision-making
01:53there.
01:53But overall, I would say this is a very important region for oil production, of course,
02:00and a number of projects continue to be maintained.
02:03But, of course, some cautious on whatever could be controlled in the short-term term to preserve cash.
02:09I mean, given all of these geopolitical uncertainties, what do you think happens to inflation?
02:15And how are you projecting your own growth in the next year?
02:21So it's an important question because inflation, of course, is something we monitor very closely.
02:26And we have built a good, I would say, response program to deal with that from a pricing perspective.
02:35So we work in over 140 countries, Bureau Veritas, and therefore we're exposed to inflation in different parts of the
02:44world.
02:44And we've developed, as I said, a response plan to manage pricing with regard to inflation.
02:51The service we do is an essential service and, therefore, very necessary for projects, for companies to operate.
03:00You've also acquired Lotus Work.
03:02I think it's the biggest acquisition that Bureau Veritas has done in the last 10 years.
03:06And it really specializes in critical tech facilities like data centers and semiconductor plants.
03:12I mean, this is the thing we talk about every day.
03:15So how important will that business be to your growth?
03:21It's very, very important.
03:23We're part of our strategy to develop our buildings and infrastructure segment, which represents 30% of our business, is
03:32to move towards more complex assets.
03:35And data centers, semiconductor fabs are these kind of assets.
03:40Lotus Work specializes in commissioning and quality assurance and quality control in the semiconductor space and also in the data
03:49center space.
03:50So we've been really developing our portfolio around this mission critical assets.
03:54And we think that will be highly accretive in terms of growth to the company.
03:59And they allow us to be in spaces that have high barrier to entry because the expertise is very deep.
04:07And the capabilities, you need a long time to develop these capabilities for commissioning.
04:14So in five years, if you look at some, I mean, there's, you know, questions about AI infrastructure, of course,
04:20but also, you know, volatility, valuations, potential bubble.
04:24If I speak to you again in five years, how much will testing of AI infrastructure be within your portfolio?
04:30How much will that grow compared to other businesses?
04:34I think I'm more optimistic on the AI, on the AI development.
04:39We work in so many sectors of the economy.
04:42The adoption is real.
04:44The capabilities of the technology are unusual in a way and very fast adoption we have seen.
04:52So therefore, we consider that the underlying market continues to be strong.
04:56And we think that the growth is going to be strong.
05:00Just to give you a perspective, we started this activity of data center since 2017.
05:06We have multiplied the small acquisition we've made by seven times since then.
05:12So you can see the kind of growth we've seen, and we think it will continue.
05:17Of course, the capabilities will be developed further to ensure we are expanding across the full services needed for these
05:28assets.
05:30You also announced last month that you were in talks to sell off some of your oil and petrochemical operations.
05:36Are you any closer to sealing off that deal and sell them off?
05:42Look, we've signed an agreement with Triton Partners to pursue this deal.
05:47I think we are on a good path.
05:48Of course, it's not done until it's done.
05:50But it's definitely a key element of our strategy to rotate our portfolio.
05:55And we consider that this activity for the future is not an activity we would like to keep.
06:01And that's why we've been working quite a bit now to achieve that.
06:06So, yes, I'm rather positive that we should be progressing.
06:11I mean, it's going to be a big year politically in France over the next 12 months.
06:14Do you worry about volatility?
06:16Do you think clients in France will delay decisions until the presidential election next year because they don't really understand
06:22what will happen?
06:25Well, look, France is a historical position for us.
06:30It's our home country.
06:32We have expertise.
06:34We have a good position.
06:35But it represents, you know, it represents around less than 20 percent of our business, rather 16 percent of our
06:43business when we operate in the rest of the world.
06:45So we monitor the situation very closely and we prepare for ourselves, ourselves for how the market will evolve.
06:52But at the end, it's not as big as one would think being a French heritage company.
07:02So we're cautious.
07:03We monitor how things will progress.
07:05But we have a very resilient business in France.
07:07Exposure to OPEX and regulatory activities, which tend to be stable.
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