Bureau Veritas SA (BVI) Earnings Call Transcript & Summary

Welcome to Bureau Veritas Half Year 2026 Results Presentation. Now I will hand the conference over to the speakers Hinda Garbi, Chief Executive Officer; and Francois Chabas, Chief Financial Officer. Please go ahead.

Good morning, good afternoon and good evening to everyone. Thank you for joining us for our half year 2026 results. I'm joined by Francois Chabas, our group CEO. The first half of '26 demonstrates disciplined execution and the accelerating impact of our LEAP 28 strategy. Operationally, we delivered 5% organic growth in the first half with a sequential acceleration in the second quarter to 5.5% in a complex geopolitical environment. We also expanded margins, increased adjusted EPS and maintained solid cash generation. Regarding the compliance deviations that we disclosed in April '26, we have completed our review, informed the authorities and stopped the contracting questions. Based on our current assessment, we recorded a EUR 32 million provision as of June 30, 2026, reflecting our best estimate to date of the full financial impact we may safe. Our portfolio transformation is on track. During the first half of '26, we continued to reshape our portfolio. We announced the acquisition of Fotis Works, a leading specialist in mission-critical assets and signed an agreement to divest our Oil & Petrochemicals and coal ports. We confirmed our decision to exit the legacy Government Services segment. The exit process is already underway, and it will be almost completed by year-end. This will be done in strict adherence with our contractual commitments to our clients. When sharing our full year 2025 results end of February, we have committed to complete a portfolio rotation of approximately 20% compared to 2023 baseline. I'm pleased to report that we reached this milestone in the first half. Bureau Veritas is now gearing its portfolio towards high growth, higher margin and more resilient market. As a result of this portfolio rotation and aligning with our organization, our reporting structure will evolve. Excluding the activity planned for exit, namely the oil and petrochemical and Government Services, our 2026 organic growth outlook is upgraded. We now expect mid- to high single-digit organic revenue growth, and we maintain our commitment to margin improvement and strong cash generation. Before moving to financial highlights, I would like to thank all our colleagues worldwide for their dedication and contribution to the strong results. Let me start with our financial highlights for the half year. In this first half, we delivered revenues of EUR 3.3 billion with 5% organic growth, growth accelerated in the second quarter to 5.5%. We also delivered margin expansion with adjusted operating margin reaching 15.5% up 29 basis points at constant currency and up 15 basis points on a reported basis. Adjusted EPS increased by 9.8% at constant currency supporting our objective of delivering double-digit shareholder returns over the LEAP 28 plan period. Cash generation remained healthy and leverage is within our 1 to 2 range even after the early dividend payment was completed this year in Q2 compared to Q3 last year. Moving now to our revenue performance by business and by geography. In this first half '26, we delivered an acceleration in the second quarter. Organic growth increased 100 basis points to 5.5%, bringing first half organic growth to 5%. This improvement confirms the positive momentum we anticipated and reflects both favorable market trends and disciplined execution across the group. All regions contributed positively. Asia Pacific remains the fastest-growing region. Mature Europe continued to deliver solid growth, well above GDP, the Americas benefited from sustained investments in energy and digital infrastructure in North America. The Middle East and Africa remains resilient in a challenging geopolitical environment. Looking at our businesses, we maintained a strong momentum in Marine & Offshore and in Buildings and Infrastructure. Mixed performance were recorded in our commodities activities, reflecting the disruption from the Middle conflict to the oil and petrochemical business. As expected, both Industry and Certification had a slow start this first half and are projected to pick up in the second half. What is important to keep in mind is that a number of new strongholds in mature subsegments continued to perform above expectations. As you can see on the slide, we delivered double-digit organic revenue growth in data centers, oil and gas CapEx and Metals and Minerals. When we launched LEAP 28, we committed to actively reshape the portfolio, increasing our exposure to high-growth and high-margin markets while exiting activities with lower strategic relevance. Today, we're doing exactly that. Year-to-date, we completed or announced 5 acquisitions totaling EUR 138 million of revenue and signed an agreement to complete a major disposal. Total divestment amounted to EUR 489 million of revenue. The acquisition of LOTUS Work significantly strengthens our position in mission-critical assets, 1 of the most attractive growth markets. At the same time, the planned divestment of oil and petrochemicals and coal activities represents a decisive step in optimizing our portfolio. Since the launch of LEAP 28, we have now executed approximately a 20% portfolio rotation. This is accelerating our exposure to businesses with better structural growth prospects and stronger margins. This planned disposal of oil and petrochemicals and coal activities is fully aligned with our LEAP 28 strategy. This business generated approximately $450 million of revenue in 2025, but operated below the group average in terms of growth rate and profitability. At a natural price value of EUR 470 million and enterprise value to EBIT multiple of 11x, this transaction represents an attractive valuation. Most importantly, proceeds will be redeployed into high-growth and higher-margin markets. The transaction also reflects a disciplined approach to capital allocation, strengthens our portfolio quality and enhances our growth profile. As mentioned in my third slide, our portfolio and organization are evolving in line with the B-28 strategy. Our reporting framework is also being adapted accordingly, reducing our reporting lines from 6 to 4. The new structure provides a clearer representation of the group's business mix and strategic focus and aligns our external reporting with our new organization. From July 1, 2026, our portfolio will be organized around 4 key reporting lines and excludes the activities of oil and petrochemicals and coal and government services. Both of these activities are planned for exit. Industrials and commodities supports the development of economies. It contains energy, minerals and shipping businesses. Buildings & Infrastructure will benefit from structural trends around urbanization and infrastructure buildup, both physical and digital. Business Assurance will bring together certification solutions and digital assurance. It is a transverse business across all sectors, managing existing risks and emerging digital risks. Product testing and services is centered around products that feed consumption and industrial activities with an increasing focus on technology. Francois will be providing some more information on this new reporting. Moving now to business highlights. I'm starting with the Marine & Offshore Division. The division delivered a strong performance in the first half with an 8.7% organic growth. New construction remains very strong, benefiting from sustained activity across most vessel categories and an ongoing conversion of our strong backlog of new ships. In service, ships in service activity or OpEx, also delivered stable growth against challenging comparables, driven by regulatory inspections and increasing demand for decarbonization-related services. In this segment, Market fundamentals remain supportive with a strong order book and continued investments in new and more efficient shifts. For Agri-Food & Commodities, this business delivered a 3.3% organic growth in Half 1, 2026. Metals & Minerals was the standout performer, growing double digits in the low teens organically supported by higher exploration activities and sustained mining investments, particularly in precious metals and copper. These positive trends were partly offset by weak activity in oil and petrochemicals impacted by the conflict in the Middle East, while agri activities remains soft. Moving now to Industry. We delivered a slight sequential improvement in quarter 2, resulting in a 1% organic growth in the first half. Growth at constant currency reached 3.3%, supported by the contribution of recent acquisitions in renewables and nuclear. Within the business, we have different growth dynamics by soft selling. Oil & Gas delivered low single-digit growth overall. CapEx activities remained very strong, however, growing at double digits, reflecting the supportive investment environment. We recorded a strong momentum in North America and resilience in some key projects in the Middle East. Power and Utilities were slightly down overall, continued growth in power distribution, storage and renewable projects in Asia and Europe was more than offset by weak OpEx activities in the Middle East and Latin America. Industrial Product Certification delivered high single-digit growth, supported by strong demand in transport and logistics and pressure vessels across Europe and the Americas. For buildings and infrastructure, this business was 1 of the group's best-performing businesses, delivering 8.7% organic growth in the first half with a sequential acceleration to 10.2% in the second quarter. Growth was broad-based, reflecting the successful execution of our LEAP 28 strategy in this space. Visiting CapEx delivered double-digit growth led by vision critical assets. Data center activities remained very strong with QA, QC and commissioning services growing by more than 40% supported by continuous investments from hyperscalers and cloud providers. Other services such as cost compliance and project management continued to grow on par with the divisional growth. OpEx Building achieved mid-single-digit growth driven by demand for building safety, compliance, environment and HSE services. The activity was strong across Europe, supported by regulatory requirements and sustainability-related services. Infrastructure also grew mid-single digits, benefiting from transportation projects in North America major projects in the Middle East and public infrastructure investments across Southern Europe. Overall, the Building & Infrastructure business continues to benefit from powerful market structural trends, including digital infrastructure buildup urban development and climate programs. In Certification, we had a slow start with 1.9% organic growth in the first half against very challenging comparable. The business recorded a strong momentum in sustainability solutions or transition services as we call them, and digital assurance activities, which achieved high single-digit growth. Environmental and carbon services remains a key growth driver, supported by increasing demand for decarbonization, carbon footprint assessment and climate-related compliance services. On the digital insurance front, we continue to expand our cybersecurity services and geographical footprint. This reflects growing customer focus on cyber resilience and operational continuity. QHSE and specialized schemes delivered a low single-digit organic growth. Activity was softer in some developed economies, while demand continued to grow in emerging markets, particularly in Latin America, the Middle East and Africa. We're not pleased with the performance of this division, and we have initiated since Q2 sales plans and operations reviews to ensure steady pickup in half 2 of this year. Lastly, for Consumer Products Services. The division delivered a 5.1% organic growth in the first half, including 5.7% in the second quarter. Performance was led by technology as the subsegment benefits from our strategy diversification. Services were related to product innovation cycles and increasing testing requirements across consumer electronics. Growth was high single digit organically. Supply chain and sustainability also delivered high single digits, driven by strong demand for supply chain resilient services. Within Softline Midlines employees, growth was low to mid-single digits despite energy supply disruptions across several sourcing markets. Performance was driven by China as major brands and retailers reverted back to the country, leveraging its scale, speed and flexible manufacturing ecosystem. Overall, the business benefits from 3 structural trends, product innovation, supply chain reconsideration and rising sustainability requirements. I will now hand over to Francois for the financial review.

Thank you, Hinda. Good afternoon to everyone. So let's have a look now a bit more in the detail on our financial performance for the first semester. We have delivered 5% organic growth overall, so it's an acceleration compared to the first quarter. And we continue to expand margins, both at constant currency as well as on a reported basis. . As you can see, the adjusted operating margin improved by 29 basis points at constant currency. The adjusted EPS increased by almost 10% at constant currency as well. Annual leverage remains comfortably within our target range despite the impact of the early dividend payments in the second quarter compared to the usual third quarter over the last few years. So taken together, these results confirm that DuoPass remains fully on track to deliver the ambition that we set out for the planned 2028 mid-2028. Having a look at the revenue -- the group generated EUR 3.2 billion of revenue in the first half. Organic growth reached 5%. Scope was slightly negative as the contribution from acquisition was offset by recent portfolio exits. As a reminder, from obviously the first lots works will be included to the scope onwards, and it will coined to the positive effect, which is not the case yet. We've just closed that deal a few days ago a range. Foreign exchange impact is improving quarter-to-quarter from 5.2% in the first quarter to minus 0.6% in the second quarter. And even for the first time, I think, for the last 2 years, the month of June in isolation was reporting a slightly accretive amount in term of ethics. So which I think brings us to some more positive outlook for the rest of the year on FX. Overall, revenue grew 2.1% on a reported basis and 4.8% at constant currency. Again, it's a good demonstration of the resilience of the portfolio and the quality of the underlying market trend. If we zoom on the second quarter, which is on the next page, organic growth improved compared to the first one. So we moved from 4.5% in the first quarter to 5.5% in the second quarter. And this is supported by continued strength in our services related to data centers, energy investments and mining-related activities. If we take a bit of a closer look by division, as mentioned previously by Hinda, all divisions grew with delivering very strong performance. including scope, 4 businesses posted double-digit growth, reflecting both solid organic trends and the impact of our disciplined M&A execution. If we go through that briefly, building infrastructure first, together with Marine Offshore where the 2 strongest contributors. Bidding infrastructure, which is the largest segment of the group by the size, grew at 10% in the second quarter. It's again a sequential acceleration versus the first one. And the 2 main drivers remained sustained strong activity in data center rated services and the sustainability transition services that we offer to our clients more broadly. Marine maintained its growth factory and capitalized again on favorable shipping market dynamic and vessels investments. Consumer Products delivered solid growth supported by the expected rebound of technology-related activities, especially in Asia and the development of our supply chain diversification throughout the segment. Agri-Food & Commodities, sustained growth momentum, especially in Metal and Minerals, which has got traction over the first semester. Moving now to Industry. I mentioned before, the growth was somewhat soft due to the impact linked to the Middle East conflict and some weaker OpEx activities, both in that region and in the Americas. Growth at constant currency of 3.3% reflects the positive impact of 2 acquisitions made in Europe in the renewable sector and the nuclear sector, which both are developing as planned and will from most probably a year and Q4 will start to get into the organic development of the business. If we turn now to the margin bridge, -- so as you can see here, on a reported basis, we delivered 15% -- 15 basis points or of margin improvement. So we closed the half year at 15.5% versus 15.4% at the end of H1, 2025. Organically, it's a 7 basis point improvement. Here it's a combination of the benefit of our 2024 restructuring, tight cost discipline, and it largely offsets some of the Middle East impacts, especially in our Oil & Petroleum division. Scope had a positive impact of 22 basis points. So it does reflect the portfolio pivot in that I was mentioning, exiting less profitable activities and acquiring more profitable ones. In line with our LIP commitment, we delivered altogether 29 basis points of margin uplift at constant currency compared to the same semester last year. If we look at the division margin now on the next page, Marine Offshore another strong improvement. It's a story of favorable expansion of our CapEx activities and the end of some low-margin consulting activity that we've decided to stop. Building & Infrastructure, the margin expansion of 132 basis points on the largest segment of the group. -- is actually a blend of 3 limits: One, the operational leverage, driven by our performance programs, especially in Europe. They have been started at the end of last year and full effective over the first semester this year. Two, the positive mix effect of our commissioning services related to assets such as data centers; and three, the accretive contribution from M&A, especially the acquisition made now for the last 2 years, which are slowly getting into organic numbers and are here in average, having a higher margin than the average of the division. So overall, we are pleased with the development of this division, which is the largest again of the group. As far as consumer products is concerned, the margin continues to improve. We will benefit from 2 years of our growth and performance strategy execution. We have expanded the geographical coverage, restructured several sites delivered multiple performance programs, and we now start to see the positive outcome of recent acquisitions, notably in Latin America. So the picture is as well pretty encouraging. Finally, Agrifood & Commodities & Industry. So Agri-Food & Commodities here, the main adverse impact is a conflict in the Middle East and the contraction of our oil and petrochemical activities. We have deployed several programs to retain staff and preserve margins. We are ready to resume operations when conditions will allow, of course. And to close, Industry H1 reflects the impact of lower volume from softer activity in the Middle East and delays in the ramp-up of several OpEx contracts. And then finally, this time, Certification experienced temporary pressure on margin led to softer growth in H1 and slower-than-expected ramp-up of recent acquisitions. We expect the revenue to pick up from Q3 and the margin to recover from H2 onwards. Several programs are being put in place, as Linda just mentioned in the first comments. So overall, as you can see, the company continues to deliver on margin expansion semester after semester, and it reflects indeed mix effect and the result of our performance program at large. If we now have a look into the other financial metrics, -- so bottom line, the adjusted earnings per share continued to grow regularly. It grew 9.8% at constant currency, which is again encouraging and in line with our LEAP 28 trajectory. Net financial expense remained broadly stable, EUR 55.5 million as the higher cost of refinancing from October 2025 were largely offset by significant lower adverse foreign exchange effect. And on the tax front, the adjusted effective tax rate was broadly stable at 29%. If we turn now to cash flow generation, we delivered another solid cash performance in the first half. Free cash flow amounted to EUR 158 million, up 3.2% organically. is shown on the chart, we maintain a disciplined management of working cap. I t represents 6.8% of the revenue at the end of June 2026 and reflects what is very important, the sustainability of the efforts we have deployed over the group for a number of years to optimize cash collection and working capital management. So turning now to the new 2026 reporting perimeter. So we put here some numbers to help you manage those changes. So as announced by Linda just a few minutes ago, we are updating our reporting structure. This view provides first a clearer picture of the group in terms of future operating perimeter and obviously, the underlying performance of Bureau Veritas going forward. So it highlights the fact that this new parameter would enhance both the group growth profile, as you can see here and its profitability. So we will concentrate further on businesses with stronger structural growth drivers and higher value-added services. This change will be effective starting July 1 and will be reflected in our Q3 revenue publication, both on a quarterly and year-to-date basis. So to allow you to update your models, you will find in the appendix in the annex some qualitative and quantitative elements on the few moving pieces from the 6 divisions to the 4 divisions. Obviously, Laurent, Colin and the entire Investment Relations team is here to help you to get your numbers right. It's simple in relative. And these numbers here give you already an illustrative view on what the new Bureaueritas is looking like once we have taken into account the discontinued activities, which are both government services on the one hand and two, our OLE petrochemical and coal testing activities for which we have announced a few weeks ago that we will divest to a third party. Most probably, we expect this to be completed at the very beginning of 2027 at the latest. I now hand over back to Linda for the outlook for the year.

Thank you, Francois. An update on our outlook. Our first half performance was robust, and demand across our businesses remains healthy. We continue also, as you have seen, to make good progress. Now as we actively reshape our portfolio to increase our exposure to high growth and higher value businesses, we are essentially enhancing the group's growth profile. Taking out the oil and petrochemical and coal and government services, we have now in new scope. And on this new scope, we are upgrading our full year 2026 outlook as follows. We now expect to have a growth mid- to high single-digit organic revenue growth. We will maintain margin improvement as a guidance, margin improvement at constant currency and we will maintain our strong cash flow generation targets. In conclusion, we have delivered a solid performance in House '26 -- and as we have forecasted a sequential quarterly acceleration in quarter 2. We also recorded margin improvements at constant currency and on a reported basis. This was achieved in a volatile business environment and with geopolitical uncertainties in key geographies and disruptions in energy markets. As we have shared earlier, the LEAP 28 strategy is on track. Our portfolio rotation is progressing at pace and we are continuing our M&A programs to meet our portfolio reshaping goals. We remain fully committed to our LEAP 28 ambitions of growth and performance, and we will take the opportunity of the Capital Markets Day update in September to share with you our progress in terms of portfolio, performance and people programs. We have elected in this busy call not to discuss AI matters as the next phase of development for LEAP 28 will integrate AI, and we will give you then a comprehensive update. Before opening the Q&A session, I wanted to remind you that we will be looking forward to welcoming you to our Capital Markets Day on September 22 in Paris. This will be an opportunity to update you on the next phase of LEAP28 strategy. Thank you. And Francois and I are now happy to take your questions.

[Operator Instructions] The next question comes from Annelies Vermeulen from Morgan Stanley.

I have 2 questions, please. So firstly, on the margin guidance, which is unchanged. -- despite the higher growth guidance and the exit of those lower-margin businesses. So what are the other moving parts within the margin guidance? And I appreciate the wording hasn't changed, but do you actually now perhaps a bit more margin improvement versus before? And then secondly, on certification, where you mentioned you're not happy with the performance, and you're doing in operations review. Could you expand on what that involves? And could that review ultimately end with contract exits or divestments? .

Annelies, could you repeat the second question, please? .

Yes, of course. It was just on certification, where you mentioned you're doing an operations review. Could you expand on what that is expected to evolve? And could that review ultimately end with any contract exits or divestments? Or is it more of a sales program.

Yes. Thank you. I think we -- our margin guidance in general, when you look at since the inception of the LEAP 28 program is based on 2 things. One, on our performance programs. If you recall, we have talked about our operational level programs that includes some process improvement, but also performance management in a very granular and rigorous way and then functional scalability and there are a number of programs there. And we have also talked about our portfolio reshaping and the mix that we wanted to have at the back end of the strategy. And I think we're doing both and that's what we are executing at this point. The 1 point I want to make, and then I'll pass to Francois on this point. Is that part of our performance programs output was improvements in margin that will allow us to invest in the modernization of our business. And that's a very important point to keep in mind. And we continue to invest, and you will see when we talk about our update in September, we've been talking about investments in AI, in particular, that will help us accelerate some of those programs. So keep that in mind as you think about the margin, but our guidance indeed didn't change in terms of continuous improvement. And we haven't really given a specific quantum on that. But on the trajectory, we're not reliant. Francois? .

Just to add 1 thing, Andy, we try and that all the size of the 28 to time everything, whether it is the M&A, but what will be what the investment, the growth performance. So that ultimately, we reached the 17% margin kind of while you guys will not see ups and downs during the job. And I think you could recognize that from 2024 onwards. We've managed to put everything together. But year-on-year, you get incrementals in margin. One, we don't see suddenly a big investment in year or 2, and we expect a recovery in your 4. That's not the way we are doing that plan. So just reinforcing the message of Hinda here. There is a number of investments happening are necessary, and we're going to use whatever room we have from sometimes performance, as we've seen, for example, in DNI for some time, both for reshaping to make sure that at the end of the day, by 2028 as you you have a stronger as well equipped, well structured and capable to sustain its performance for the years to go.

Thanks Francois. On the second question, Annelies the Certification. What we meant by operations review is really around sales efforts. And just to give you a bit more color on that. The mature markets, I talked about mature markets and emerging markets. So in emerging markets, our growth is on track. Can we do better Yes, that is -- we're trying to get the team to capitalize on possible upsides there. On the mature markets, that's where we have seen radio performance that we don't like. Keeping in mind that mature markets tend to be large in terms of HSE and voluntary, but the traditional themes that we had, and that's where we're pushing the sales efforts we're aggressively doing that in key markets. And across both mature markets and emerging markets, we're pushing new services, in particular, transition services -- that's in the sustainability space, everything from decarbonization solutions to supply chain resilience to life cycle assessment. So we are going on all fronts, but -- as I said, we weren't pleased with the performance and all hands on deck on this going forward. And we are planning on delivering on that pickup in half.

The next question comes from Suhasini Varanasi from Goldman Sachs. .

Two for me as well, please. Can I just clarify? I know that at the time of first quarter results, you had indicated that 1Q would the low point on organic growth and that growth should improve through the rest of the year. Clearly, 2Q has delivered on that. Is that still your expectation for 3Q and 4Q? And specifically maybe on industry, the growth was a little bit weakened first half, do you expect projects to start again in second half and therefore, help with the sequential improvement. My second question is on margins and certification place, which did lag a little bit. Can you help us understand what changed there beyond just the slowdown in growth? And is part of your portfolio review, et cetera? Is that something that's going to help deliver margin expansion in second half of the year?

Yes, thanks for the question. I'm going to let Francois answer after the margin on sensification, but let me start with the growth side. You're absolutely right. We did expect a to be a low point, certainly in half 1, and we work to make sure with our teams to deliver a sequential improvement in Q2. As you can see with our guidance, of course, we expect half 2 to be a sequential improvement over half 1. Now I'm not going to give by quarter, we remain in a somewhat complex environment. But what is clear is that we are working on delivering a Health to improvement over half one. Now for industry, I think important support a vital industry to explain the dynamic in half 1. Half 1, what's important to understand is we actually had a good resilient performance across our CapEx activities, I'm going to say generally like that, both in oil and gas and power and utilities. For the simple reason, these tend to be long-term projects. People don't pull the plug on capital projects for any disruptions, they have to take their time and decide. So -- so very resilient you've seen the oil and gas is growing double digits. The P&U CapEx also is doing well. Where we have seen indeed a reaction and some of it actually was predating the House 1, particularly in OpEx oil and gas in the Middle East. What we have seen is we have seen 2 dynamics in OpEx. We have seen the Middle East that slowed down in OpEx initially because this requires a lot of people on site and there were concerns on safety and all that. And then after that, it was a matter of capacity to deploy versus with the flow stopping preserving cash. And if you could delay some of that discretionary spend, you could you would do it. For other parts of the world, what we have seen is people really wanted to rather keep up time. So you don't want to shut down your facilities when you can produce at those kind of prices we've seen for a number of months. So that dual dynamic there impacted, in particular, our oil and gas but I would say OpEx in general for PMU, for power utilities and oil and gas was slow in our 2 key markets, Middle East and Africa and Latin America. Those are the 2 markets where we have seen that. Now if I look at half 2 for me, industry in house expecting a pickup for 2 things. And the other thing to add for half 1, we're really going against very tough comparables in half, double-digit growth last year. Now as we move to host the comparables are easier for sure, but also there is a pickup, why we believe in that. Our backlog is clear. We have a huge focus on this activity. Our teams on the ground are prepared to execute those backlog. And ultimately, we are not building on our health to an industry, banking on some rebound in activity or rebound from the world. We're building this on existing backlog, existing execution capacity and clear oversight from our managers to deliver on our plans. So that's really our plan for industry. Francois, would you like to comment on that?

Yes. So on margin of certification, so we're not super pleased about it. That said, clearly, I think we should not over-interpret it. 2 things which differ from just being slow in H1 in term of revenue. One, we have a couple of acquisitions that took more time to scale a couple of years ago, we're expecting them to be a higher level -- they are not yet there. And two, we have a couple of operational very localized situation that we need to solve. I think that is very clear on the time that this would be addressing it. So they do not draw a definitive conclusion on this, but a little bit of a accident in good French. So we will recover in H2. .

The next question comes from Geoff Michalet from ODDO BHF. .

Yes. Congratulations for the good set of results. Two questions for me. the first 1 on the exit of government service. You mentioned that you will have ended it by the end of '26 in respect with your contract commitments. Can you elaborate a bit on that? -- since some of your contracts are multiyear contracts with duration above the end is it about, let's say, paying an exit early termination fee or something else? . The second question is on Marine & Offshore and on the margin, is there a kind of limit on the margin you can reach. Can you come back a bit on what the Roviready? And is it somehow sustainable this kind of margin in marine shore?

Thank you, Geoff, for the questions. On the exit of government services, you are correct that a number of contracts, in fact, most contracts are multiyear contracts, but they also have closes for us to exit contracts at some point, not follow them, but most of them -- and generally, when we're saying strict adherence to customer expectations and contractual expectations, we are essentially working with the customers as we express our desire to exit these activities -- we work with them to make sure that there is business continuity that they have plans with other players that they might onboard the activity themselves. So it's not a 1 go transaction. You have to engage with the customers, understand the parameters that we'll work with, understand the sensitivity of the activity. But in general, I would say where I sit today and with the plans we have in place by end of 2026, we pretty much would have done most of the contracts. So there's 1 or 2 that might have to flow to early in the year with the understanding that it would be completed and it wouldn't surpass quarter 1 at the latest. And we have a team, a tough force fully focused on this, working with the regions, working with the countries, working with the customers. We have very clear effort to stay on committee driving this. So we have full visibility on what's happening, and we take the business continuity of our customers very, very seriously. Francois, you want to comment on the Marine & Offshore margin .

Sure. So you know the company for a while. So you know that the limit for Marine Offshore term of margin has been achieved a couple of years ago at this one. So that's a way to answer your question. The second way to answer your question is to say, I mentioned recognized rapidly the fact that we've stopped some micro consulting businesses that were nice to have and not pretty much value in terms of bottom line. So it does help a little bit here. I would say that the picture at the end of June, and we'll continue to have the picture at the end of the year. So -- what we try here to balance is the necessary need to recruit engineers, marine engineer to be able to feed the level of service our clients expect. We don't have a specific objective. But I would say, you would expect that this type of margin is the 1 of an MNO business that is in full swing in terms of business cycle and in terms of the deployment of resources. And for the MAX number, I just encourage you to look back at your CAGR when you see you would find it somewhere in 2010 or '11.

The next question comes from Virginia Montorsi from BofA.

I just had 2 quick ones. One is on the margins for Agri-Food & Commodities as the division in I appreciate you're changing the reporting structure, but now that we are considering oil and petrochemicals and government services out of the scope, can you help us understand how to think about the margins for the remaining part of the business for the second half? And then the last question would be, can you talk a little bit more about your decision to change the reporting structure now? And kind of what are your priorities? And what do you think you can get out of this into the Capital Markets Day and then obviously into the medium term?

Thank you for the questions, Virginia. Francois do you want to cover the margins and how to mobile over.

So I agree margin H1, as I mentioned, have been heavily impacted by our oil and petrochemical activities, which are to make it super simple in terms of impact of the crisis in the Gulf. This is the 1 activity that is the first for obvious reasons, we have leveraged around the coast and they have that their business someone to test on. So you need order to flow the contest, there is no flow. There is not a thing that's very simple to get -- so this activity on driving the margin of agri company H1 a significant plan. . When we look now on the head, I think, as I mentioned, we have in the appendix, the moving faces from other communities that would go into the industrial -- and you can read here that roughly at the end of H1, we have EUR 250 million of Metals & Minerals and agriculture, which have respectively, a margin of for Metals & Minerals, margin is in line with the agri-food commodity division margin and agriculture a bit below. Those 1 will flow into next year. There is no reason that those 2 subsegments changed dramatically the margin on H2. So I think with you to have a look at Page 43 and reach out to for more color. But I think that should help you to directionally being able to translate where the remaining part of vehicle food communities are good segment will land in terms of margin over the end of the year, H2.