Investing.com -- Shares of Bureau Veritas SA (EPA:BVI) edged up 1.1% following the announcement of its first-quarter revenue growth, which slightly surpassed consensus expectations.
The company reported an 8.3% increase in revenues, with organic growth at 7.3%, marginally ahead of both consensus and RBC (TSX:RY) estimates. The gains were attributed to strong performance in the Marine & Offshore division, robust organic growth in the Oil & Gas sector, as well as significant revenue increases in the Certification business due to volume growth and substantial price hikes.
Despite warnings of a potential slowdown, the New Construction segment delivered faster than anticipated growth. However, the Consumer Products division experienced weaker organic growth, particularly in the Technology sector, which saw a mid to high single-digit organic contraction in the first quarter. This was due to a global decrease in demand for electronics, wireless products, and new mobility equipment, primarily in China and Taiwan.
Regionally, Europe, representing 35% of revenues, showed the slowest organic growth rate at 3.0%, while Africa & the Middle East, accounting for 11% of revenues, enjoyed a 24.9% organic increase, benefiting from emerging market inflation rates.
In addition to the revenue report, Bureau Veritas announced a new share buyback program worth €200 million to be completed by the end of the second quarter, which is equivalent to approximately 1.6% of the current market capitalization.
The company also maintained its outlook for the fiscal year 2025, expecting mid-to-high single-digit organic revenue growth, an improvement in adjusted operating margin at constant exchange rates, and strong cash flow with a cash conversion above 90%.
RBC commented on the results, stating, "We see BVI as a well-managed TIC operator with best-in-class disclosure and some supportive longer-term megatrends. However, we think fluid geopolitics and macro uncertainty risk undermining global trade activity to which the organic growth of the TIC majors has been historically directionally correlated.
In addition, BVI faces tough comps in some of its largest divisions in FY25, and a highly competitive M&A market could make the group’s targeted step change in earnings momentum tougher to deliver than more optimistic observers appreciate. We currently see the shares as broadly fairly valued."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.