Earnings Call: Q1 2021

Apr 22, 2021

Hello, and welcome to the Bureau Veritas Q1 2021 Revenue Presentation. My name is Judy, and I'll be your coordinator for today's event. Please note that this call is being recorded. And for the duration of the call, your lines will be in listen only. However, you will have the opportunity to ask questions at the end of the call. CPAC to register your question. I will now hand you over to your host, Didier Machard Daniel, CEO, to begin today's conference. Thank you. Thank you, Judy. Good morning, good afternoon and good evening to everyone. Thank you for joining Bureauvitas' Q1 2021 revenue on the webcast and on the call. Francois Chabot, our group CFO, is Here with me to present the results along with Florent and Florent. Since the beginning of the year, we continue to operate on a crisis management footing, particularly as pandemic is Still very present in several parts of the world. We have continued to take every possible measure To ensure the health and safety of all our employees, this is paramount for me. In the Q1 of 2021, we accompanied and helped our clients in managing their risk And in restarting the operations. After last year's excellent cash generation performance, We have maintained the key measures in place to protect the financial solidity of the group. I would like to take the opportunity to thank again all our teams who remain highly mobilized and proactive. Before talking about the Q1 revenue, there have been some key developments of particular interest during this quarter. First, the strength of our organic development. Our organic revenue performance has shown the call. We are today reaping the fruit of our business and geographical diversification and market positioning. The growth of our Chinese engine has Congly resumed. Secondly, as expected, the focus on health, safety, Quality and environmental stewardship continues to gather momentum and prominence. We have seen accelerating demand for our BB Green line of services and solutions. Thirdly, Since the start of the year, we have also resumed the development momentum with 3 promising bolt on deals. One strengthens our expertise in cybersecurity compliance, a very promising long term market Another expense of our consumer products activities in the Chinese domestic market. And the third, Position the group in the U. S. Renewable Energy Market. Looking now at the figures. In Q1 2021, revenue for the quarter was €1,150,000,000 Up 6.2% at constant currency. Organic increase was 6.6%, showing a clear sequential improvement compared to the 2% decrease recorded in the last quarter of 20 It shows a solid underlying performance with an organic revenue growth of 5% compared to Q1 2019 level. Amongst our businesses, free grew Strongly, organically, certification by 21.6% Consumer Products by 18.7 percent and Buildings and Infrastructure by 13.3%. Our full year 2021 outlook is confirmed. Sustainability, One word on sustainability. Sustainability is at the heart of global data and is a key underlying driver To the group's future goal, I am aware of your need to comply with the EU taxonomy regulation And this additional information will be of help. The chart on this slide show the current weighting of sustainability in our portfolio. As a first step, the analysis of 65% of Doroveta's operations in 2020 Shows that approximately 2 thirds contributed towards sustainable development objectives. We expect a significant ramp up in the pace of growth of environment and social on the back of our BB Green line of services and solutions development, Health, safety, quality and environmental stewardship have particular growth potential in Emerging Markets as well. With this, I give the floor to Francois for the financial and business reviews. Francois? Thank you, Didier. Hello, everyone. So we posted a strong organic revenue performance in the Q1. 58% of the group revenue was on the growth path in this quarter. 3 businesses, As mentioned by Didier, B and I, Certification and Consumer Products were up double digits organically. This demonstrates the robustness of our portfolio and the quality of our mix. As shown on the chart on the right hand side of the slide, the momentum, as you can see, has improved sequentially Since the low point of Q2 last year. Looking at the revenue bridge on Page 11, We delivered €1,150,000,000 in the Q1 of 2020, up 1.3% and 6.2% at constant currency. Organic increase reached 6.6%, showing a strong recovery from the minus 2% achieved in the last quarter of 2020. ForEx had a negative impact of 4.9%, mainly due to the depreciation of some emerging countries' currencies and the USD against the euro. In the current situation, this should normalize from Q2 onwards. Turning now to the revenue growth by business for the quarter. As mentioned, 3 businesses delivered strong organic performance. First, the continued strong rebound in the Certification business, Benefiting from both catch up of audits and strong momentum on CSR rated services across most geographies 2nd, recovery of the Building and Infrastructure portfolio, mainly driven by the Chinese and U. S. Platforms And finally, strong return to growth for Consumer Products fueled by Asia. Marine and Offshore demonstrated a 33.4 of the business. Conversely, we had a mixed environment for Agri Food and Commodities and Industry, Both being impacted by subdued oil and gas markets. Regarding our bolt on M and A in 2021. We've continued a disciplined acquisition strategy year to date, adding a total of €25,000,000 of unrealized revenue. As Didier mentioned, we have recently acquired a U. S. Renewable Energy Service business. This is Bradley Construction Management, With €11,000,000 of revenue in 2020 and approximately 50 employees, Bradley provides construction and site management assistance for wind, solar and energy storage projects. This acquisition reinforces both our diversification and growth in the Renewable Energy sector in the United States. We also made a small acquisition of a certification business in Australia focusing on ESG rated services, adding another €2,000,000 of revenue. Moving to the business review to give you some more color, Let me share with you the highlights of the Q1 for each of our 6 businesses. First, on Marine and Offshore, 3.4 percent organic revenue growth in the quarter, mainly led by strong growth in the in service activity. We benefited from a favorable timing of inspections with a catch up from 2020. The order book stood at €14,200,000 at the end of the quarter, Up 0.7% compared to the end of 2020. So the book remains very well diversified. In 2021, the group is working on several key projects and initiatives for sustainable shipping, alternative fuel, carbon intensity assessment and research projects Such as the use of new fuel to support decarbonization on the next generation of cruise liners. For Agri Food and Commodities on the right Side of the chart. The business slightly improved from Q4 with a decline of organic revenue limited to 3.6% in Q1. Within this division, it is worth noting that our agri food business delivered robust growth. It is supported by Strong growth drivers around increased food profitability and outsourcing. In Asia, where the group has leading positions, we delivered double digit organic growth. For metals and minerals, our product mix geared towards gold, copper and iron ore and our increased exposure to outsourcing contracts Give us pretty good visibility and growth prospects. And finally, in Oil and Petroleum, the environment remains tough due to low oil consumption and high inventories. Moving to industry now. Revenue eroded by 0.4% organically in the Q1 of 2021. The strategy of diversification towards OpEx and Power and Energy Markets continue to bear fruit and cushion the further decline observed in Oil and FX. The Power and Energy segment continued to be a key growth driver of the portfolio with high single digit organic performance achieved in the quarter. This illustrates the good execution of our diversification strategy. In the long run, Renewable Energies are providing strong growth opportunities for the business. Across most geography, we are currently bidding for several wind and solar power generation projects, Europe, Asia and in the Americas. For Building and Infrastructure, revenue growth strongly improved organically to 13.3% In the Q1 from 2.8% in the last quarter of 2020, confirming the recovery of the activity. The group is well positioned, thanks to its 3 growth platforms across different geographies Europe, Asia Pacific and North America. Our performance was very strong for CapEx related activity, up double digit organically in the U. S. And in China. The growth was strong as well for OpEx related services, up single digit organically, benefiting here from a catch up of regulatory driven businesses not delivered at the end of 2020. By region, we delivered strong growth in Asia, led by the recovery of China, up 88%, Obviously, against favorable comparable last year. Here, the business remained driven by public transportation and energy infrastructure projects. Double digit growth was delivered in the U. S, led by a strong rebound of our U. S. Operation. It's a combination of large project management assistance And an acceleration of the data center commissioning services. Coming now to Certification has been the best performer within the portfolio, up 21.6% in the quarter. We continue to benefit from A catch up of 2020 postpone audit as well as from the success of new services, including restart your business with Bureau Veritas. Within this the group portfolio, high double digit growth was achieved in audits related to QHSE, Sustainable Development And CSR as well as Automotive. During the Q1, Bureau Veritas' assurance of CSR and Sustainability Reporting Services grew by more than 20%, driven by a strong demand for Greenhouse Gas Emission Verification and Wood Management System Certification. Food continued to perform strongly with double digit growth. Moving now to Consumer Products. The business strongly recovered with an organic growth of 18.7% in the Q1 of 2021, benefiting from a large pickup of activity In China, which was up 38% across all geographies. You remember, of course, that last year China was in lockdown at that time. Testing activities rebounded the most, while the inspection and audit services grew low double digits. By geography in this division, very high growth was achieved in China, as I mentioned, and Southeast Asia, whereas activity levels remain more muted elsewhere, disrupted still by Lockdown Measures and Restrictions on Mobility. Overall, the strategy of diversification by service, clients and markets has continued in the quarter With a more particular focus on domestic China and in addition to the soft client testing business acquired focusing on domestic brands and e shops, We have started to operate a wireless product testing lab to address the domestic market as well. So It's a good start to the year with some catch up, as you could see during the presentation. One should not forget that the situation remains Volatile. And I hand back now to Didier for the outlook for the rest of the year. Thank you, Francois. Regarding the 2021 outlook, we confirm that the group remains uniquely positioned with the diversity, The resilience of its portfolio and its numerous growth opportunities. Based on the current Uncertainties around the COVID-nineteen pandemic and assuming no severe lockdowns in our main countries of operation, we expect to achieve solid organic revenue growth, improve the adjusted operating margin, generate sustained strong cash flow. In this volatile environment, we have demonstrated a strong potential to recover, For sure, benefited from our platform transformation. This bodes well for the year. Moving forward, Bloor Veritas is well positioned to benefit from strong macro drivers such as sustainability. With the 2025 strategic plan, we will capitalize on our strength and continue our successful journey of delivering a value creating strategy for BD. Thank you very much for your attention. Francois and I are now ready to answer Your questions? Event. The first question in the queue is coming from the line of Paul Sullivan from Barclays. Paul, you're unmuted. I may now go ahead. Yes. Good afternoon, everyone. 2 from me. On Consumer, I'm sort of Intrigued by the bounce back given your relative previous caution on some of the structural dynamics that you saw Last year. So putting the comps aside, what's changed in your view there? And then secondly, in terms of the outlook, I mean, given the comparison and how it changes into the Q2, I mean, it would imply north of 20% growth in Q2. So how much of Q1's growth was catch up and shouldn't be extrapolated? And what's preventing you From being more specific in terms of guidance for the full year? Thank you. Okay. Thank you, Paul, for your questions. First on the Consumer, it's a very good question, of course. It's true that the Consumer division As clearly delivered a very strong quarter. When you look at it, in fact, it's Close to 2% less than Q1 2019, showing that we are clearly recovering. So it's coming from Several factors. The first one, because of the issue of some countries which are locked down In the south part of Asia, the testing of Softlines, hardlines, even technological products won back to China and we were very well equipped to just deliver the The second point here is, as you know, we decided to invest in 5 gs connectivity testing, And there is a clear ramp up, which is probably even stronger than what we anticipated on these type of testing. And the third one, we can see already the impact of the diversification, both geographical Diversification and product diversification strategy that we started already last year and even the year before. You remember, Paul, we had these discussions and the fact that we were very exposed to U. S, China channel. And we decided already a little bit more than 1 year to work on, Again, diversification strategy and it has started to pay off. On your second question, Clearly, there was a lot of catch up in the Q1, inspection and audits which were not conducted last year, In B and I, in certification and in marine. We may have a little bit more in Q2, but Honestly, I think that we did already a lot in Q1. So the Q2 will be more about the comparison with last year. A lot of countries were locked down last year in Europe in particular. So of course, we should have a good Q2. I'm not going to say the number that you proposed. We will see at the end of Q2. It's too early to talk about it. And there are still uncertainties as regard to the pandemic, and you know it. India, Very difficult situation in India at the moment. The LatAm situation in Brazil, Peru are going through very difficult times. So I am cautiously optimistic for the remaining of the year because of this Uncertainty, even if, of course, I'm very happy with the result that we are delivering at the end of Q1. That's very kind. And would you want to would you like to be sort of more specific on how much the growth in Q1 It's not as easy To be more specific, because, Paul, I would have to do it business by business. And again, to measure it is not really easy. What I can say for Marine, clearly, the catch up of inspection and audit is giving The organic growth that you are getting from Marine, this one is very clear. Now, I'm not sure I need for B and I With the geographical diversification, the countries and the number of services we are capable to deliver, it's just Absolutely, challenging. And the same for certification. You need to note, by the way, that we have 2 more working days in France in Q1 versus in Q1 2021 versus Q1 2020. Of course, even with these 2 days, it does not explain the very good performance of BV in Q1. That's very clear. Thank you and well done. Thank you, Paul. Thank you, Paul, for your question. And the next Question in the queue is coming from the line of Edward Stanley from Morgan Stanley. Edward, you're unmuted. I may now go ahead. Thank you, and thanks for taking my questions. Good evening. I've got 3, please. The first one, As growth has recovered pretty rapidly in consumer and certification, while I'm building an infra, obviously, are you having to reinvest in head Counts or are you able to operate with a leaner cost base for the time being, I guess, particularly in consumer would be useful? The second question, I know you're not too fussed about oil and gas, but in terms of the sort of Performance in the Industry division that's recovering in Q1, do you expect That growth to carry on and be mimic almost the underlying oil price? Or is it much more dependent on comps At this stage. And the third question, you've given a lot of detail on the BB green line, which is very helpful, and we know a portion of sales coming from ESG activities. And I guess in the release, you've also given a flavor for 20% growth coming from Greenhouse gas certification, for example. But it's difficult to know how much of that is comps or genuinely new business. So in actual €1,000,000 terms maybe, are you seeing meaningful growth contributions already from some of these ESG related activities? Or do you think that will come more gradually as you win these wind and solar contracts that you talked about, for example? Yes. Thank you, Edouard, for your question. Well, I'm going to start with your first question. Francois, maybe this one you could take it. Yes, sure. I go ahead. So I think the one line you need to keep in mind is the we remain very disciplined in the approach we have in terms of Start engagement. As Didier mentioned, the Q1, I think, has shown some good news. We are very cautious. 2021 is again a specific year. So we are driving the company quarter after quarter. So cautiousness is really our number one concern, which drives us to take several decision. First, to start to reengage in recruitment in activities where we have, I would say, a good visibility. So as an example, the B and I business in France, I think we are pretty confident here, and we are actually ramping up We're forced to re recruit, the same in the U. S. But obviously, the area has and especially in terms of Consumer Products, where we've made top decision last year, and I think we were right to do them early in the year 2020. And obviously, here, we've managed to deliver the service in the Q1 with, I would say lower cost base compared to the historical comparables in Q1 2020. So that's the way we are today. And we are gradually taking decision country by country, business by business. As soon as we see that we have a perspective that goes beyond the semester, then we start to re recruit, I think, at the right path. And again, we are very careful here not to overshoot and to take the decision at the right time. Thank you, Francois. Regarding your question, on the industry, I'm going to start with Oil and Gas CapEx. Now it's really meaningful for the company. Honestly, this is not the question anymore. Now when I'm thinking about What we need to work on, this is clearly not for me today. In terms Our strategy, where I want to go, if there are some new CapEx, we'll take it. But now it's down to 3%, even a little bit less Of the company revenue, in the past it was more than 10%. So this is not for me in the strategy anymore. In fact, in industry now we are focusing on hydrogen, new energy like wind, Solar, power and utilities, OpEx, so these are This is the focus of the company today, clearly, and we can see that it's paying off already. There are some new also new activities in the industry, For instance, the plastic tool, which is a new industry job, we can clearly see a shift now moving to renewable. And again, strategically wise today, I don't count on the oil and gas CapEx, which are again meaningful for the company. I am working on new businesses which are developing exponentially. A good example for me is wind. When you think that for instance that the UK, they want to be in win what Saudi Arabia is in oil, It shows something about a big challenge. And even today, the oil companies, we are used to work with them and we work we We'll work with them of course, moving all of them to renewables. So it's a trend, a mega trend which is accelerating And we want to be the leader on this market. This is what is going to give us the leadership in industry and also the organic growth in industry in the future. It is linked with your third question, which is about the BB Green Line. Because the BB Green Line, It is covering services and solutions all along the chain of sustainability, if I could say that. From construction, I'm talking about wind farm construction, offshore farm construction, New hydrogen plants, new green buildings, 2 Trustability, food Trustability and to the end which is CSR certification. For instance, I'm sure you read the same article As I did today, the European Union has decided to 250 companies which are delivering over €50,000,000 of revenue, These companies will be obliged to certify, I could say that, to be audited On their carbon footprint. And the norm they are working on the norm already. So we know that We can cover the whole channel regarding sustainability. So you talked about the 20% greenhouse gas certification. It's a good point. We are happy. Of course, we started now with 20% organic growth, but there is a ramp up to come. And again, if you think about our Q1 and probably our Q2, you can think that a part of our growth will come from it, But there is substantial growth to come longer term or I should say even mid term. And it's In Europe, clearly, with a green deal, it is in the U. S. Now because the President of the U. S, Mr. Biden has decided to accelerate also on the climate change initiatives And we will be part of course as a player in audit inspection and certification. We will be part of it. And by the way, we are very proud to be a business to business to society company and to lead the pack. That's very helpful. Thank you. I appreciate it, Edward. Thank you, Edward for your question. And the next question in the queue is coming from the line of David Rocks from Bank of America. David, you're unmuted and may now go ahead. Good evening, Judy and Francois. Congratulations on the strong update. I've just got three questions from my side. I think firstly, just to revert back to Slide 8, in which you split out The revenues from sustainable services. I just wanted to get your sense about the 35% of revenue not yet analyzed. Is this still to be analyzed? Or is this part of the business that you know for certain doesn't have exposure to Sustainable revenue. My second question is on the growth by region. I'm a bit surprised that the growth in the Americas region Wasn't a bit higher given the obvious strength in the U. S. Economy. Is this down to mix? And Can you please remind us of the sort of major end markets for that region? And then lastly for Francois, what was the exit rate In March, please, in terms of organic growth? Thank you. Francois, you can take the third question, please. The exit rate? Yes. For the month of March, again, let's be a bit careful here. The March 2020 was a bit particular. But I would say What we could say is low double digit for March this year, exit rate, organically. Thank you, Francois. On your first question, in fact, it is still to be analyzed. The reporting systems were not initially supposed to address these dimensions. And I can tell you this has been addressed Actively, because we want to measure the evolution and the organic growth coming from the green line. So we are working today to add codes, which will be specifically dedicated To this big initiative, it's not even not an initiative, it's a strategy. So in the future, we'll have more detail clearly about the potential incremental Organic growth that we can get from the green line. By the way, We know that there will be some conformity with the regulation and expectation from our stakeholders. So this is something which has to be measured, and we are working with Our system to be ready to deliver this type of measure in the future. In the near future, I'm not in We hope even before the end of this year. Regarding the U. S, in fact, we have strong growth in B and I, Strong growth in certification, strong growth in hydro food. The only issue is oil and petrol OEM product testing. And in fact, it is coming from the drag from the oil market. You have 2 phenomenon. The first one, because the price The oil was very low. The U. S. Built a lot of reserves. So meaning that We don't need to test these results. We did it in the past. The second point is the consumption has not restarted yet. So it's a real drag on the results of the U. S. If you exclude this drag, our organic growth in the U. S. Would be probably Closer to low double digit organic growth. Thank you. Very helpful. Thank you. Thank you, David, for your question. And the next question in the queue is coming from the line of Oscar Pharma from JPMorgan. Oscar, you're unmuted. I may now go ahead. Yes. Good afternoon, everyone. Two questions from me. The first one on a few competitors and you've talked about this as well about remote inspection and how you've been able to do that During COVID, how do you think that sticks when you reopen? Can you still have some more remote inspection in the future? And then the second question is just on M and A. What's the pipeline looking like and what are the areas of focus? I know you've talked about Cybersecurity in China domestic, but where do you think the opportunities are for M and A? So on the M and A side, we have a large pipeline. We want to remain extremely disciplined. When you think about our M and A track record in term of multiple, By going to bolt on acquisitions as we do, in fact, we are making some very Good acquisition in terms of organic growth potential and even in terms of margin at multiple which are affordable and not crazy. So for me it's very important and For Francois, it's the same. Maybe you want to comment on M and A because we knew you and I were I think it's important to comment on that one, and then we'll come back on the remote I think, Oscar, what you need to keep in mind for M and A is that we do not change anything. I mean, same approach, bolt on, good return on investments, focused on domestic China, cybersecurity, B and I and Agri Food. And for a bolt on M and A to be successful, the most important thing that you keep on doing the same for long enough, Otherwise, it's a waste of time, money and energy. So we'll keep on with this. And I think It has proven very efficient in terms of return to the shareholder. So we'll keep on that path. And as Didier mentioned, We have always a very rich pipeline. That's the nature of bolt on M and A. You need 10 to do 1. So don't worry about the pipeline. We will keep on closing those deals at good conditions. Thank you, Francois. Regarding remote inspection, in fact, you may remember, it's a very good We decided already in 2015 to move for digitalization and Of course, for remote inspection. Since then, remote inspection has developed strongly. It accelerated last year, of course, because of the pandemic. But to give you some numbers today, in certification, For instance, in Q1, 19% of our audits were done, 19%, 19%, Remotely. It's quite impressive. In Marine and Offshore, ad hoc surveys 20% With remote inspection, again, a very impressive number. Safeguard, for instance, and you remember Safeguard We start your business with Bureau of Etas, 25% of the audit are done remotely. And another for me very good example and this one is going to accelerate because not to be of the renewables. Today approximately 10% of remote inspections in industry, in particular of course in OpEx. So we can clearly see an acceleration. The fact that we had the pandemic last year, it's not over yet, He's accelerating it and we will continue in the future to work on remote inspection. Okay, great. That's perfect. Thank you. Thank you for your question. Thank you, Oscar for your questions. And the next question in the queue is coming from the line of Rajesh Kumar from HSBC. Rajesh, you're unmuted and may now go ahead. Hi, good evening. Thanks for taking the question. Just on Marine, You've shown that the new orders are up, but order book is down 3.8% year on year. Can you unpack that for us a bit? Are the order books down because you have delivered the service And you now need to build with new orders. And then just conjugate to that, How comfortable are you with the current market expectations for marine? The second question is a Follow-up on consumer, really super performance there. How much of that is You indicated earlier that there's a lot of change in the supply chain and you're adjusting with that. So The growth we have seen, is it coming purely from the old network and the Growth from the new locations is yet to come? Or is it that you're getting growth from both the areas and that is why The growth is so strong. Okay, Roger. Thank you very much for your questions. The order book, in fact, in Marine, I'm talking about new equipment, is up 0.7%, 0.7% This is December 2020. Okay. In fact, in Q1, we had quite good level of deliveries. This year, we expect flattish probably organic growth because as you know, last year, we had We won a lot of new orders in particular with LNG ships, which are in term of revenue very good ship for Borobeta, but it Takes longer for the ships to be built. The good news is probably for 2022 already because the This market as we started, it is strongly recovering clearly And we hope, of course, taking again the share that we enjoyed in the past, meaning that In terms of order, we should have and we will discuss it at the end of H1, a good year or at least a better year than last year, but I'm sure you know it. Now if you look at the footprint for Consumer division, it's important We explained it probably to you last year. We revisited the Chinese Laboratory footprint. So could I say it's the old network? I'm not sure. Because last year, We decided, I said we because we worked a lot with Francois and the Head of Consumer Product Division on that To our distributor, the lab footprint in China to optimize the cost And also, it had to be done after several years to be sure that we could deliver a better Turnaround time to our clients, but also again to optimize our cost. So today, we are mainly in Q1 Delivering our testing services from existing locations or locations that we Rebuilt, if I should say if I could say so, last year. This is the way we are organizing And we're Consumer Product division. We rationalized a lot last year, in particular in China, The number of laboratories, the organization and so on and so on, so we don't know if you remember well. At the end Over the year, we really turned around the margin level, thanks to this rationalization. Got it. Thank you very much. That's very helpful. And the third one, which I didn't pose earlier, Just on the labor cost inflation, how are you seeing that trend in Your delivery locations, are there any markets where you're worried about the level of inflation you're getting or You're excited about it? Okay. So except the U. S, I do not have any problem, 0. In the U. S, The market has restarted as you know. I'm talking about the labor market. So we have a very good backlog in the U. S. Our challenge today is to hire people and find the right people to deliver the services, meaning engineers. So it's not the market is not as easy in the U. S. Today. Of course, we are very attentive to monitor the But we do not have any problem elsewhere. Thank you very much. My pleasure. Thank you. Thank you, Rajesh, for your question. And the next question in the queue is coming from the line of George Gregory from Exane. George, you're unmuted. I may now go ahead. Good afternoon. I have 3, please. Firstly, starting with B and I, how should we read The trend in China, Didier, where you saw 88% growth in the Q1, I appreciate the comp is easy, but I presume it implies a level of activity that's well north of the Q1 of 2019. Secondly, thinking about the group exit rate you referenced, Francois, I believe March last year was down 5.5%, Which suggests you exited the quarter comfortably ahead of March 2019. Was that continued outperformance Due to the catch up effect, which fades from the Q2? Or are there any other variables at play there? And finally, one on Consumer, please. I think you highlighted in the release And that growth was stronger in testing than it was in inspection and audit. Could we assume that the inspection and audit Peace catches up towards that of testing in the coming quarters, thereby Strengthening the trend relative to the down 2% versus 2019 that you referenced, Didier? Thanks. Thank you, George, for your questions. The group exit rate, Francois, I'll let you answer in that one. Yes, sure. So comparable, I mean, you're doing your math correctly. The 2 elements to keep in mind when it comes to March 21, I think as Didier mentioned, there is 2 working days additional, especially in Europe that are Somewhat helping the comparable and this is as well. The months where most of the Accreditation bodies have given their deadline to perform 2020 audits. So especially in certification, that was really a big March. So it is not a reference for Q2. I think we're happy to have delivered those work, but Don't expect it to become the norm, I would say, for the Q2. Okay. Regarding your first question, Georgi, about B and I and the trend in China, Of course, growth will ease as comparable will get tougher, and there were already some catch up. But after and again, in terms of strategy, we decided to move To B and I China principally infrastructure and energy, that was a very good move, because this is where the Chinese government is putting And we know already that the organic growth, even if it's not going to be at the level of Fluent, of course, because the compare will be different, is going to be Good in the future. There is no doubt about it. And it's a factor of differentiation. We are the only one also, As you know, having the best expertise on building an infrastructure in China, not just in China, in the U. S. And in Europe. Now if I look at the if I answer your question about the Consumer Product Division, You are partly right because there are some countries today where we cannot do inspection on audit. I'm thinking in particular of India and Bangladesh, because these countries are locked down. And in this country, we have to do some inspection, particularly, again, linked to CSR And the green line, with the inspection on the social Children and so on and social but not just by the way social audit, but also more and more The working conditions, I'm talking about the building and so on. So clearly, in inspection on this, we are beyond where We were in 2019. It will accelerate along the way as long as, Of course, these countries open again. Thank you very much. Very clear. My pleasure. Thank you so much, George, for your question. And the next question in the queue is coming from the line of Neil Taylor from Redburn. Neil, you're on mute. I may now go ahead. Yes. Thank you. Good evening. 2 from me, please. Firstly, I'd like to stay with the topic of the consumer growth and Ask for a bit of clarification, are your thoughts on The migration that you said you saw back to China in terms of some production, whether you have any perspective on how long that might Last four or whether it literally is a case of once lockdowns are lifted, that business moves back elsewhere. And I know this isn't This is only a revenue call, but whether if you can help us understand whether there's been any meaningful margin effect of that migration, that would be helpful. Please. And then secondly, tying some of your previous comments together around your optimism on the green line And caution with regards to hiring plans. And I wonder whether there are Any limitations on your ability to hire to staff those obviously very growing areas and what your investment plans are or whether you're able to simply reallocate Existing resources primarily? Thank you. It's a good question. Regarding The Green Line, I have strong ability to hire. So I was talking about the U. S. Because in the U. S, it's more in the B and I business, it's challenging at that time. But for the rest of the world, I have zero problem in recruiting. In fact, it's exactly the opposite, Because younger people, millennials want to work for a company which is working around safety, hygiene, Environment and quality. So we are extremely attractive for young generation, because this is what they are looking for now, Protecting the world, working for business to business to society company, shaping a world of trust. This is what Dorovetas is about. So we are extremely attractive and we do not have any problem in finding people. U. S. Is a different story Today, because again the market is recovering, we are working on it and we will find the people That we need as we did in the past. Regarding the first question on the consumer, It's a migration today because some countries are locked down. I'm thinking about India again and Bangladesh, for instance. So this is a structural shift. After it's very interesting because You had also some issues and I'm sure you're aware of it with the supply chain because these countries were Lockdown, the supply chain that moved from China to these countries is now at risk. And you may wonder if some even American companies are not going to go back to China, because They are not capable now to deliver what the clients are looking for. So this is a very interesting situation. After whatever happens, we have the capacities today in Southeast Asia to deliver the service And we have strong capacities in China. Regarding the margin, as you know the margin is always impacted by the volume. We did a very good job last year in restructuring our footprint. So I'm not going to talk about margin today and this is not The call for today, we will at the end of H1, but should not have any issue with the margin In 2021 and the years to come. Again, as long as we are not all locked down for Any potential problem that we could have with whatever variant or it's still very uncertain. Okay. Thank you very much. That's helpful. Thank you so much, Neil, for your question. And the final question in the queue is coming from the line of Nicolas Tabore from Stifel. Nicolas, you're unmuted. You may now go ahead. Good afternoon. Congratulations again for the great results, and thank you for taking my questions. The first one, I wanted to come back quickly on certification. Just to sum up, you said that you had a lot of catch up in Q1, but does that mean that Because you had to push the 2021 audits and certifications into the next three quarters, but that means that this pent up demand Has to be caught up again in the remainder of the year. And how has the restart your business with DV been developing? Is it still accelerating as Lockdowns are ending. Is it transforming into new business, let's say, beyond the COVID one off? So that's for certification. And then just coming back on the consumer, is there a risk in the opposite side that once These Southeast Asian countries reopen then suddenly there's demand going away to this country in testing Or do you think it would mean that China is even more accelerating and you will not see a slowdown or any negative effect? It's just going to be more demand for everyone? And then on the third question, in terms of the infrastructure spending, where do you think You are. I mean, the impact in the Q1 was already quite significant. How much of that should Still continue to accelerate over the next 12 to 24 months, especially if we think about Europe and what Biden has talked about but not yet, let's say, spent? Thank you very much. Thank you, Nicolas, for your question. I'm going to start with Infrastructure. Your last question, move to Consumer, and Francois will cover certification. On the infrastructure side, you are absolutely right. We have A lot of opportunities with the Green Deal, mid term opportunities and long term. We are very well equipped in Europe to deliver the service on the infrastructure. In the U. S, it's a little bit a different story. And I must say that in the U. S, even if for instance we got a very nice More than $6,000,000 with LaGuardia Airport 2 years ago, showing that we are capable to deliver infrastructure projects. I would be very happy to find a potential acquisition helping Helping me to deliver the services in infrastructure and we are looking clearly already at doing it because There is a huge opportunity for the years to come. For the moment, it's too early. I don't think it's going to start before 2022, maybe end of 2021, but after for the next 4 or 5 years, I want to be a player in this domain In the U. S, no doubt about it, as we are and will be in Europe. On the consumer side, I do not see Any risk, I mean, again, it might be even opportunities in fact, Because of the supply chain issues that some even American clients had in front of them, they may stay As you are now with China, and we will use our capabilities in Southeast Asia for some other clients or Why not the same one? But for us, it's not going I mean, there is no risk there because Our footprint in that is there. We rationalize it. We are ready to take more volume. Now it's all about, As I said, diversifying our business geographically and also by products. So I see more opportunities and risk in this area. On certification, Francois, I'm going to let you answer in this question. Nicolas, so it's a simple question. It's a complex answer. I will try to be as clear as possible. The first part, Lee, the one on the sequencing and what is postponed, not postponed. Normally in a normal year, Q1, Q2 are small quarters in terms of activity. Q3, Q4 are very strong and very high in terms of activity. That's the way this business has been functioning for years. In 2020, Q2 2020, those audits which were due on that quarter Could not happen for obvious reasons and they have been moved partially to Q3 or to Q4. As those two quarters Q3 and Q4 2020 Well, by a sense, large ones already, we could not deliver everything due to capacity constraints. So a part of it has moved to Q1 2021, that's what we have been saying for since the beginning, a bit of a catch up of audit. Those ones were due mostly for Q4, crossed the line and moved into Q1 2020 because it's been allowed again. It's not a broader decision. It's been allowed by the accreditation body who are allowing us to perform those audit. They have allowed to extend the limit. Now what will that mean for 2021, if this is the core of your question? I would say if 2021 is a normal year, meaning no major disruption related to the pandemic In Q2, in Q3, in Q4, then normally in a normal year, we should be able to close the year 2021, having delivered Judy, that was due for 2021. The question mark we have right now is, Didier was just mentioning India and Bangladesh, and we had Japan earlier This year, we know 2021 will not be a normal year. So in those three countries I have mentioned, we are further pushing because in those three countries, we could not deliver most So I think the bulk of the catch up coming from 2020 has been absorbed in Q1. In countries where there is no disruption, we are back to delivering the usual level of audits we have been delivering on the satisfaction part. And we'll be able to tell you a bit more at the end of June, the how H2 will unfold and if We would expect some more pushing to 2022. I hope I've been cleared enough. And if not, I think You can reach out to Laurent and Florent. But in a nutshell, strong H1 2021 and Expected weaker H2. On restart your business, I think we had a first wave, very successful first wave Mid last year, as you remember. And what we see today is we are still delivering, Didier just mentioned, 25% this year in Q1 of the audits ready To this first wave has been done remotely. So we are we keep on delivering. We are moving from a one of a kind type of Contract to regular inspection now. And for me, the most interesting is we start to Giving you an example, we've contracted with Sodexo on the restart of business and we just announced I think publicly that, For example, the subsidiary in Spain has had a business extension with Sodexo to help them to monitor their waste management in terms of food. It would have never happened if we had not signed in the 1st place to restart your BV contract a year ago. So we are now entering in a phase where we start either to be in a regular inspection scheme. So we started a year ago with the new scheme, restarted the business and now we're delivering inspection on a regular basis and or Extension of scope, because we have entered those companies at the right level, meaning CEO or management level, and now they see the benefit of working with a company Like Bureau Veritas to convince their own stakeholders that they are caring about their employees, caring about their clients and caring about their environment. Thank you very much, Francois. We're at the end. Maybe 2 comments before we close the call. The first one, Of course, I believe we are happy with the results in Q1. This is pure consequence of the ProFound transformation that we started in 20 15. This is my first comment. The second one, there is still some uncertainty and some volatility Linked to the autonomy, which is not over yet, it's the reason why I remain cautiously optimistic. Thank you for your time, and I wish you good morning, good afternoon and good evening. Thank you everyone for joining us on today's call. You may now disconnect your handset.