Earnings Call: Q4 2017

Mar 1, 2018

Okay. Good morning, everyone, and thank you so much for joining us in this presentation of results for ACS for the year 2017. I am here with Marcelino Fernández, whom you all know, who is ACS's CEO, and on my left, Ángel García-Altozano, who is corporate director general. We are going to go through our results. Then, as usual, we will have a Q&A at the end to clear up any additional information that you might require. Let me start with the highlights for the year. First, I should underscore the very solid results obtained in 2017, with net profit at EUR 802 million, which is 6.8% up, even though it would have been 17% more than the previous year in like-for-like terms. That is without considering the Urbaser contribution, which we divested last year, and the currency impact because of the appreciation of the euro versus most foreign currencies. Second, I should mention very strong cash generation as a result of excellent growth in operations, together with very strong management of working capital and lower financial expenses. We generated EUR 1.49 billion in cash, which is 43% more than the previous year. As a result, we have been able to reduce our debt down to record lows, with net debt at EUR 153 million at the end of the year, which is less than 0.1 times EBITDA. Actually, 0.06 times EBITDA. If we subtract project finance for EUR 195 million, debt with recourse puts us with a net cash position of EUR 42 million. Also in 2017, we have reinforced our leadership in strategic markets like North America and Australia, growing our backlog at double-digit rates. So we are in the best position to focus on guaranteeing long-term growth and value generation by taking advantage of investment opportunities. As well as our current backlog, we have identified over EUR 200 billion in potential PPP projects in our strategic regions for the next four years, where we are in a leading position and therefore uniquely positioned to undertake many of these projects. Key operating figures, sales were EUR 34.89 billion. That is 9% higher than the previous year or 10.7% in like-for-like terms, and that is taking into account the impact of exchange rate. This growth is due mostly to growth in construction, particularly the CIMIC sales figures. Our EBITDA was EUR 2.279 billion. That is 12.6% higher than the previous year, 13.9% in like-for-like terms, with an EBITDA margin of 6.5%, which is up five basis points versus the previous year. Our EBIT is at EUR 1.62 billion, which is up 12.5% in the year of 14.2% like-for-like terms. Net attributable profit was EUR 802 million, which is 6.8% higher than that of 2016 and 17% in like-for-like terms, taking into account the impact of foreign exchange and subtracting the Urbaser contribution the previous year. Net cash flow, as I have said, is EUR 1.49 billion, which is 42% more than the previous year. Finally, our backlog is at EUR 67.08 billion, which is practically the same as the previous year because of the Forex impact due to the appreciation of the euro versus the main foreign currencies. Taking that into account, our backlog would have grown 8.8%. So the Forex impact has subtracted over EUR 5 billion from the backlog. As for net debt and its evolution, I should, of course, underscore that our net debt has come down over EUR 1 billion in comparison to the previous year as a result of solid cash generation from operations. Our current debt level is at record lows. Our debt net at year-end was EUR 153 million with a ratio, as I mentioned before, of 0.06 times EBITDA. I should also mention that excluding debt without recourse of EUR 195 million, we are actually in a net cash position of EUR 42 million. Going into more detail about our sales in different markets, I should explain that our sales are highly diversified, essentially concentrated in developed economies, as you know. The regions where we carry out most of our activity are North America, with approximately 45% of the total, Asia-Pacific with 29%, and Europe with 20%. Sales in South America represented 5%, whilst Africa represents just over 1%. By countries, the most important markets were the U.S. with 38% of our sales, Australia with 20%, Spain with 13%, Hong Kong with 4%, Canada with 3.5%, Mexico with almost 3%, and Germany just over 2.5%. These represent close to 85% of the total together. This geographic diversification guarantees the stability of our sales as a result of potential changes in the economic cycle in some of these markets. As for construction, our sales were EUR 27.2 billion. That is up 12.4% or 14.1% if we subtract the Forex impact. This evolution is due mostly to the recovery of CIMIC sales, up 24% in local currency, and also driven by very positive performance of Hochtief, particularly in the U.S., where sales have grown over 11% in local currency. Main regions in construction are Asia-Pacific and North America, adding up to 86% of our sales, Europe with 12%. Spain is only construction 5% of the total, although it has grown 7.2% in the year, and Southern America is also up 23.2%. Moving on to services now. Service sales were EUR 6.26 billion. The recovery of the domestic market and growing volumes in Asian and South African markets offset the slowing down of Mexico and the negative impact of the Forex impact. Without the Forex impact, sales would have gone up 1.5%. I should mention excellent growth of our domestic sales were up 6% with respect to the previous year, as well as the increasing penetration in the Asian market, which now represents 16% of the total, up 9.5%. Also, there has been increased diversification with greater African contribution, which is now 8% of our total sales. North America, which is 21% of our sales, is mostly the Mexican market, down 16.6% due to the slowing down of the Mexican economy as well as the impact of the exchange rate. Southern America and the rest of Europe, which represent 20% and 6% respectively, down 7.8% and 3.1%. Sales from services sector in 2017 were EUR 1.446 billion. Like for like terms, and without taking into account the Sintax contribution the previous year, as well as the not very significant impact of foreign exchange, sales would have gone up 3.1%. I should remind you that the Sintax and Urbaser divestments were completed in December 2016, February 2017, with only Clece's activity remaining in this area, which is our service business. Clece sales in Spain represent 94%, up 1.5%, and international sales have grown significantly, 29%. The group's operating results also show great improvement. Our EBITDA in construction was EUR 1.62 billion, which is 15.8% higher than in 2016, adjusting for the exchange rate impact. Margin went up 20 basis points up to 6%. Gross operating profit for industrial services was EUR 633 million. That is up 3.7%, adjusting for the exchange rate effect. The margin on sales is 10.1%, which is the same as the previous year, confirming the sustainability of margins in this business. EBITDA at Clece was EUR 76 million. That is up 4.9%. The margin over sales was 5.3%. That is 20 basis points higher than the previous year. Net profit for the group, I have already mentioned, was EUR 802 million, up 6.8% versus the previous year and 15.5% more than the previous year if we subtract the contribution of Urbaser's net profit in the previous year. If we also subtract the impact of foreign exchange, net profit would have been up 17%, which shows that it has been a really good year. I should mention particularly the construction activity, up 24.4%, with excellent performance in all areas, particularly in Hochtief, whose net profit has risen a double digit rate in every market. Net profit from the services business, the industrial services business, up 4.6%, and net profit from services excluding EUR 57 million from Urbaser the previous year, up 38% because of the excellent performance of Clece and also the capital gains obtained from the sale of Sintax. As I mentioned before, the group has had very strong cash generation, particularly operating cash flow, gross operating cash flow. That is, cash flow generated purely by the businesses have increased by 23% up to EUR 2.35 billion, thanks to an excellent performance of the different operations, supported by very effective operating working capital management. Additionally, our net cash flow after financial expenses and CapEx have risen up to EUR 1.49 billion, which is 43% more, as I said before, thanks also to reduction in financial expenses. Our net operating investment in the year 2017 was EUR 372 million. Net CapEx in construction was EUR 284 million. They were basically the purchase of machinery for mining contracts and tunneling by CIMIC. Net operating CapEx in industrial services was EUR 65 million, while net operating CapEx at Clece was EUR 21 million. As for other financial project investments, the group had a net balance of EUR 63 million. The total investment in financial assets and concession projects was EUR 371 million, of which the most relevant were 126 million in renewable energy, 87 million in transmission lines, and 35 million in other energy projects by Cobra. 52 million in several investments in Hochtief, particularly in Australia and America, and 20 million for the acquisition of UGL. Finally, 48 million in Iridium concessions, including the border crossing of Libertadores in Chile. Financial divestments and concessional divestments were 434 million, of which the most relevant, the sale of Iridium concessions for EUR 177 million, including the hospitals in the Balearic Islands and several highways in Chile and Greece. The sale of wind farms in Portugal for 116 million, sale of Sintax for EUR 55 million, and our divestment in PPPs and other assets by Hochtief Europe for a total of EUR 37 million. Free cash flow for our shareholders was EUR 1.5 billion. That is 57% more than the previous year, without taking into account the Urbaser divestment, and that has enabled us to greatly improve shareholder remuneration, which overall is up 8%. Let us talk about debt now. As I said earlier, the excellent performance of our funds from operations has allowed us to bring our debt down to an all-time low, EUR 153 million, EUR 42 million in net cash, if we solely and exclusively consider recourse debt. I would also like to highlight the financial improvement in our accounts, thanks to our tremendous efforts to bring down our debt level as of early 2012. When we decided to reduce the level of risk in the financial structure of the group because of the crisis at the time over recent years, we have been able to bring down our net debt by more than EUR 9 billion, thanks to a determined strategy that combines the thrust of our productive activity, the disposal of non-strategic assets, and also disciplined management of our working capital, as well as close control of our operating investment, bringing down financial expenses, and improving our financing conditions through different refinancings of our bank debt too. In this last year, we have also managed to obtain an investment-grade category rating with a BBB that has been granted by Standard & Poor's. This more robust financial structure, and with a low risk profile compared to other companies in the sector, will now allow us to focus on new opportunities for investment to ensure the growth in the long term for the group and continue to create value for our shareholders. Overall, our activities have a net cash position of EUR 1.86 billion. Construction has EUR 1.42 billion. Industrial services, EUR 602 million. The group's net debt is mainly at the corporate level, where our net debt totals EUR 2.01 billion. Essentially, this debt comes from the acquisition of our stake in Hochtief. As I have just explained to you, the group's net debt has been reduced by EUR 1 billion this very year. Starting off in late 2016 with a net debt figure of EUR 1.21 billion to the close in the previous year, the performance has been as follows. The new cash that has come in from operating activities, which before working capital and CapEx, total EUR 1.67 billion, 20% up compared to the previous year. Together with positive variation in working capital, which stands at EUR 192 million, confirming the trend that we have achieved over the recent years. Moreover, total net investment mean cash outlays of EUR 308 million, whilst our remuneration to shareholders has been net cash figure of EUR 492 million. All of this takes us to a position with a reduction of our net debt from EUR 1.06 billion to EUR 153 million. That is at the end of 2017, which is an all-time low for the group debt figure. Moreover, as part of this financial improvement, I'd like to highlight to you the substantial reduction in our net financial expenses, which have been reduced by 70% over the last year and 55% over three years. As for the corporation's financial expenses, these have come down by 29% over last year as a result of a lower average gross debt figure and improved financing terms and conditions. Let me talk about the performance of our commercial activity. Our backlog at the end of 2017 stood at EUR 67.08 billion. That's 8.8% more in like-for-like terms. In other words, adjusted because of the currency impact. This is perhaps where we've seen most impact there of currency changes. The breakdown according to our business areas as follows: Construction was up 7.6% in like-for-like terms to EUR 55.52 billion, supported mainly because of the awards of concessions in Asia-Pacific and North America. Industrial services grew by 15% in like-for-like terms to EUR 9.28 billion, underpinned by the upsurge in business in our backlog in Mexico. Lastly, the Clece backlog increased by 13.6%, like-for-like terms, to EUR 2.26 billion, thanks mainly to good performance of contracts awarded in Spain. Turning to the key countries and talking about the backlog again, U.S. with EUR 20 billion as a backlog, that represents 30% of the total, up 17.8% in like-for-like terms. Australia, with close to EUR 18 billion in backlog, represents 26% of the total backlog, up 14.4% in like-for-like terms. Thirdly, Spain with close to EUR 7 billion in the backlog, that's up 1.8% and representing 10% of the total figure. Canada, EUR 3.4 billion, up 17.2%. The fifth country in the country breakdown, Germany, with EUR 2.7 billion. Lastly, let me underline the leading position that the group has in all of these solid markets and the potential for attractive growth that we have with the competitive advantage we already enjoy in the sector. Now, I have for you a list of the key contracts awarded to us in construction that have helped to grow the backlog. Construction services, and also industrial services. I think perhaps you could allow me not to read the whole list for you, and I'm sure you'll be very thankful if I don't. So what I'd like to highlight now is the key factors in 2016. We have outperformed our goals. One, was to increase the remuneration for our shareholders. Two, was to keep on the track for growth in our net profit and to reinforce and strengthen our leadership position. Specifically, we said that we wanted to increase our annual production by around 10% on average each year over the next two years. In 2017, we have achieved a like-for-like increase of 11%. We also said that our intention was to make the net profit figure for the group in like-for-like terms grow in a range of between 5%-8%. in 2017, we achieved a 15% growth if we strip out the contribution made by Urbaser in the previous period. Secondly, we also wanted to improve our operating and financial margins in 2017. Our improvement was 20 basis points in our EBIT and EBIT margins and a reduction of 17% in financial expenses, and we have managed to increase our return to shareholders by 4% over the year. Lastly, we made a commitment to continue to improve our financial structure, and a result, we have brought down our debt figure by more than EUR 1 billion, and we have managed to obtain a credit rating in the investment-grade category with a BBB that it was granted to us by Standard & Poor's. All in all, we have outperformed our own targets, and we will continue to work hard to grow and to offer our shareholders a project that will continue to perform excellently in the future with the solid base that has allowed us to generate value in a sustainable way for them. That is why we believe that in 2018, we will grow in like-for-like terms above all in our estimated net profit. We think it will be slightly more than EUR 850 million. You all know, of course, that currency factors do influence that figure, but we do believe that we will continue to perform and achieve the targets we set last year because of the backlog and because of the projects that we're already building up. Before I conclude and finish this presentation, I would like to thank each and every one of the 182,269 people who have made their contribution to the excellent results of the group in 2017. 182,269 people who are working in more than 60 countries all over the world. 75,000 of them are women, 22,000 of them are graduates, and more than 7,500 people on our workforce are from disadvantaged groups of society, people with disability or victims of gender violence or people in risk of exclusion because ACS, and we've always said this, believes in diversity and equal opportunities. We make a commitment to people with talent and ability to work hard irrespective of their gender, race, or other circumstances. That is why this year we have passed our own in-house diversity policy to make sure that we continue to implement the necessary measures to ensure equal opportunities, avoid any kinds of discrimination in recruitment processes. I'm not just talking about the level of corporate bodies or governance bodies, but in any job in the company and to support cultural diversity that characterizes us as a global group. In addition to the excellent commercial work that we have done, we will continue to work hard to ensure the growth of the group in the long term. Here, I would like to give the floor to Marcelino, who has that overall vision of the group all over the world. We have more than 150 projects that we've identified, more than 200,000 billion in the PPP market, and this will ensure our future. Thank you very much. I'm just very quickly going to talk you through those opportunities that we have identified. These key figures have been worked out by our own in-house teams. These are contracts that are still under awarding procedures, or we are bidding for, or we are looking ahead to bid for in the future. In total, the number of projects in our backlog go here in our markets, strategic markets. We have to remember, as you know, Australia, Asia, Pacific, North America, Europe, U.S.A., and Canada. We're talking about over the next few years, and essentially I'm talking about the next four years here, EUR 500 billion. Out of that figure, EUR 200 billion have been identified as PPP projects. That is public-private sector participation contracts. The distribution there, the EUR 200 billion, 40%, this is the split in U.S. market, the American market, 25% in Canada, 25% in Australia, and 10% in Europe. What does this mean? It means that out of the EUR 200 billion of those projects, 80 have been identified as PPP projects in U.S.A., 50 in Canada and Australia, and 20 in Europe for the next four years. This means that these are now specific targets for us as a group, and we are now currently tracking the progress of these projects. Just to give you a better idea of what these projects are, 88% are transportation projects and 12% of these projects are social infrastructure projects. Transportation, transport, that means highways, freeways, railroads. Social infrastructure would include schools, prisons, any other type of social projects. That's the EUR 200 billion figure, and it's split for you. As for the remaining EUR 300 billion, the organic growth figure, about 35% would be in the Americas. The total number was EUR 500 billion, including the PPPs, EUR 175 billion in current processes that are ongoing. 50% and 80%, EUR 200 billion. I'm giving the figures in euros. On some of the slides, you may see that local currency is used for the figures. But to give you a good picture in like terms, I'm putting it all in euros, 15% in Europe, that's EUR 75 billion. That, of course, includes Spain. We all know that Spain is starting to get on the growth track again. For a number of years, the growth prospects were more conservative, but growth in Spain will certainly help us here with our position in Spain and also in the German market, where there are new plans, as you'll see in the next few slides in Europe. In Germany, there is a development plan, EUR 14 billion there is the value. That's 11 roads, highways. In Spain, we have an extraordinary road plan for EUR 5 billion. In Australia, there is also a state infrastructure plan. In Canada, there is a state plan. It's EUR 120 million there. I think you have the figure in Canadian dollars there. But you can see these are key figures, very big figures for these projects. And we right now have the right local structure that we need to be able to continue to be competitive when going for these contracts. We've said before that our penetration rate is already a high rate. It's over 30%. That means that we already are a success in these markets. As the Chairman has said to you this morning, we will be able to continue to grow, thanks to the momentum in these markets. Lastly, I'm not sure I really need to read through these projects for you, but here we have some selected and recently awarded PPP projects in the U.S. and Canada and Europe and Australia. On the next slide, the most important ones, more than EUR 7 billion in the U.S. We have the automated people mover in International Airport, L.A., California, EUR 1.9 billion. We have for the California Angels Flight, we have the Express. Portsmouth, Ohio, we've got EUR 0.6 billion for that one. The list goes on. These new pre-awarding stage contracts, the US 181 Harbor Bridge to Texas. We have the car rental facility also in California at the International Airport. We also on the right-hand side for Canada, starting, we have the A30 in Canada. We have Highway 427, that's Ottawa Stage 2 with bridges. Gordie Howe International Bridge, Ontario, the Light Train Finch West, Toronto, Hamilton LRT is another project. In Europe, we're in the pre-award stage for the Silvertown Tunnel, London. Berlin, Federal Ministry of Health. This would fall under that category of social infrastructure I was talking about before. In Australia, we are in the pre-qualification stage for the Cross River Rail, which is a railway in Brisbane. That's AUD 4 billion in this case. WestConnex is a 51% stake in a project for the ring road around Sydney. AUD 9.3 billion is the value of that project. I think with those examples for you, I think I've given you a good idea of the fact that in our strategic market where we already have a footprint, there is growth. There are some excellent opportunities for us to continue on the track for growth and consolidation according to the presentation we just made to you. Well, thank you very much to Marcelino. It's time for Q&A. I believe you'll be moderating it, won't you, Mr. García? As for now, questions. Well, if you have no questions, we can leave it right there. I'm sure there's some. Yeah, there's one. Go ahead. Good morning. You didn't say anything about the impact of a potential rate hike and what your sensibility would be or your sensitivity to that would be. Second, could you give us an update on your industrial services business? Whether you could give us some bit of guidance for that. Okay, just to start with the second, speaking about industrial services, you will have noticed that this year was a reasonably flat year. That was basically due to the performance in Mexico, which was a lot more sluggish than we had all expected. First, because there were fewer contracts in the first part of the year, but still with oil very cheap. Plus, it's an election year when there's always less activity. Second, then there's the currency impact because the Mexican peso has been depreciating throughout the year. However, as you will have noticed, the industrial services backlog has grown, but particularly in Mexico, grown 12.5%. Mexico is a very stable market for our industrial services business. We think that this year, first, because of the backlog, which is going into operation, and also with the recovery of oil prices, some of the contracts that had been awarded, we were asked to delay. There's two offshore platforms with crude oil prices back then, they said we should delay. Now they've reactivated those projects, and so we're quite confident that that market will recover. Plus, as you will have noticed, the fall in the Mexican market has been offset greatly by growth in Asia and Africa with industrial services. That's the great advantage we have with these products, which can be transferred very easily from one market to another because the main suppliers are the same, combined cycle plants and water treatment plants and so on. You can just go to wherever there's more demand, and so that's why we're quite optimistic about this year. The margins we expect to be reasonably similar. They will go up a little bit because Mexico is quite a good market. Could you remind me what your other question was? Could you update us on how you see the situation in Abertis? Also the impacts given the rate hikes in some of your areas? How you see that. Okay. What we have looks good because since we have practically no debt, it doesn't really bother us whether rates are going to go up or not. As for the other question, as you know, we put in a bid, and right now our bid is the best one, but there's still a ways to go, because first they have to approve the brochure, then it'll take a month, and then I guess we'll all have a chance to see how it will all evolve before coming up with. It's just been very recent that we've produced the prospectus and all these recent developments, I think we'll be able to interpret and probably turn around over the next month and a half. We still have ahead. I really can't say anything about Abertis right now. I don't know about you. I agree. I think we can only speculate at this point. It's true that circumstances have changed a bit, but it's also true that in our bid, we always said that we wanted that to be a bid that would always be within the context of an investment grade rating. We will look into it over the next few weeks if we have to. But right now, we don't really have any visibility. As our chairman has said, our bid is still waiting for approval. We expect that it will be approved over the next few weeks. Its parameters are based on what we feel are what we needed to feel comfortable in this context. Yes, perhaps. With respect to what you're asking about the impact of rate hikes for Abertis, there is tremendous speculation in the market, because of course, the outlook for long duration assets, which would be hardest hit by rising rates, would actually reduce market prices. But actually, it's rising. Really, there's all kinds of speculation going on in the market, and we'll have to wait and see what happens with the price. Because it doesn't make sense that with rates expected to rise, the share price should go up. So there is some speculation going on, which has nothing to do with the business itself. Another question about traffic. Traffic is growing. Traffic volumes are growing. Any further questions? Yes, go ahead. Good morning. Miguel Reyna from JB Capital. I have two questions. First, about the approval of the prospectus. Are you just waiting because of CNMV red tape? Or do you actually need the competition authority's approval and that's what's delaying the process? Of course, it's not within your control, but could you be a bit more specific with respect to what you said about the coming weeks? And a more specific question about industrial services. The backlog, the PV contracts that you got in the last auction were not included, but how are you going to integrate those plans given the prices in that auction? And the question marks that have been raised by rating agencies with regards to your ability to finance that through project finance. Or given your cash position, whether you're willing to fund it yourselves fully. Well, just to start with this last question. First, we did not include in our backlog these megawatts that have just been awarded, because actually they've been awarded to build. We're not actually, on December 31st, we hadn't actually signed the construction contract. But now, of course, we have. Now that the construction contracts are in place, it's in the backlog. But the prices we paid, as you know, were pretty standard. We always pay the same per megawatt. There is a lot of appetite for renewable energy projects, particularly PV projects, which is where prices have come down a lot, and it is by far the most competitive renewable energy source right now. We're not particularly concerned about how to finance it because we've had quite a lot of offers, both from partners who want to participate in the equity as well as banks through project finance. Really, it's not an issue how to finance it. Luckily, we've gotten these 1,500 megawatts, but there's a very active secondary market, as you've noticed. Actually completely unconnected, there was a recent announcement of a bid to buy 100% of Saeta on the part of investment fund. So there's really a lot of appetite for renewable energy assets. And the PV plants are the most efficient and economically the cheapest to invest in. So we're really not concerned about our ability to finance it, that project. And your other question, it is just red tape. There's nothing particularly complicated that's delaying the approval. It's just the normal procedure. In fact, if you compare it with the previous bid, I think it's actually moving a bit faster. But there are some formal procedures, like the results presentation last week by Hochtief, which mean you have to update the documentation, you have to send the new Hochtief financial statements that have to be translated and then filed straight away. And after that, it's just standard procedure. There were some clarifications that were requested. We're constantly in touch with them. On a construction in the U.S., motorways, where there's some demand elements and some managed lanes. I wonder if your strategy there or, well, what the degree of completion is of that construction, and if your strategy is to divest as soon as it's completed, or whether you're planning to follow up the ramp-up and play with those and try and profit from those demand clauses. Well, we can give you a general answer. Right now, as you know, what we're doing always is to work on the greenfield part of the process. What we do is to take part from the start of the project in the bidding, construction, and ramp-up. But as soon as it goes into operation, normally, we just wait for the best moment to divest. In this case, we follow our usual process with these two assets as we did with the previous ones. So we're not particularly focused on any of these specific aspects, demand-related aspects. Any other questions? Okay, there's no more questions from the room. Okay. Oh, actually, Luis, go ahead. Yes. From the internet, we've gotten a couple of questions. One from Juan Garcia Compain, who's asking, given the excellent results we've obtained, whether we're going to raise the dividend. Well, that's actually something that in the next board meeting in March, we will raise that issue, and I think it will go up a bit. But of course, it has to be approved by the board. Then Mr. Mustafa Cairo from APB International is asking why you adjusted in the Hochtief offer over Abertis, you adjusted for the dividend that's going to be paid in March. But it's not that it was adjusted, it's just that our offer had not considered that dividend. When you put in an offer, you specify the conditions in that offer. This dividend was not included. The only thing we have done is simply to inform the market of the fact that that dividend was not included in the offer. You can call it an adjustment or you can call it what you like. It's just something that was already explicit in our offer, and the only thing we have done is to underscore that fact to avoid any confusion. Any questions? Oh, actually, sorry. There's somebody over there. Good morning, everyone. Good morning. I want to ask about your working capital. I was wondering about factoring and how important that is there, and in the working capital. What about your projects? So what projects were profit. Oh, the legacy projects about recovery then, yes. How about its impact? Let me answer that one, if you wouldn't mind. Factoring. Factoring, what is it? It's a tool to manage your working capital. We've been using it in different opportunity, and basically, its use varies depending on degree of activity. There's not a specific objective for it or target there. There are some times, because of certain receivables, it's useful to use it and others it isn't. We have a figure about EUR 1 billion that we have there to use, and that's right across the board. IFRS 15 has been more or less 3% of our net sales, about EUR 1.09 billion. This really is a change in an accounting standard. It has no financial impact. It is about derecognizing certain recoverables, but they are still there. We feel that there is no real actual impact on cash flows because it is about whether you are likely to actually collect in the receivable or less likely or more likely. But the clients are there, the receivables are there. These are sales that we have already given the full cost for, and that we are likely to recover at some point. Yes. Yes, for the minority shareholders. Yes. Any other questions? Luis, you had some more? Someone at the back of the room, I believe. Thank you. Yes. Yes. The EUR 200 billion in concession opportunities that you give, and you gave us in even the geographical breakdown, the IRRs that you get geographically for similar projects, are they similar, or would you prefer to actually earn more in Australia and less Europe, or it does not really matter? We always prefer to earn money, yes. That is the basic premise. We never compare the IRRs. It depends on the markets, because they are very different as markets. Even the competitors, our competitors are different in different markets. We have a global worldwide presence, so we have that global footprint, and we are always competing against two or at most, three other groups, but they are never the same groups because there are no other companies in the world that have that local representation in all of those markets at the same time to compete against us. However, as they are all developed markets with very specific projects that are IT projects, high volume projects, then the competition for us is always limited. Sometimes the profitability. We have to have the IRR that works out for us no matter what the market is. Any other questions? Well, thank you very much for joining us as ever, and as usual, we will be able to invite you to join us and continue talking here. We do not always have to put up about the company or the economy, but join us and stay on here. Thank you.