Earnings Call: Q2 2021

Jul 29, 2021

Good morning, ladies and gentlemen, the ATP twenty twenty one half year results. During this call, you can only listen, but you can put your questions at the end. To record your questions. For the operator. And now I give the floor to Mr. Augustin D'Ohamane, CEO, for today's conference. Please, sir. Ladies and gentlemen, hello. With Philippe, Pascal will be presenting results for the first half of twenty twenty one. It was a volatile half year once again, a bit more dynamic in airports outside of Paris as you can see on the slide. In blue, we can see traffic outside of Paris. You can see the Blue curve is continuous, translates into 2nd Indian wave that led to a sharp decline in April and a sharp pickup in May June. The traffic outside of Paris reached 30% versus 2019 down by 26%. It was sharper in part at minus 45% as compared to the first half of twenty twenty one and 20.7% of the half year level in 2019. So the first half was a bit chaotic, let's say, forecast or more difficult than ever before. The airline company's forecast were really upheld. And given the difficult circumstances, we try to take many steps for clients and for economic profitability that we described to you. So our Revenue is down by 50.3 percent, EBITDA is positive, but Philippe Pascal will explain the realities Organically, it was slightly negative and the positive figures are due to non reproducible effects. I would also say that our operating income from order activities declined, but not as much as last year. And operational income is negative by €172,000,000 The first source of satisfaction is that the quality of services. You know that in our business, when you reach 4, You can start to look at yourself in the mirror. During the crisis, 395 quality of service. We have to wait time at the for the police is what it is and that you'll need to comment on that. We know that It is volatile and increasing. So that's a great source of satisfaction. During the crisis, therefore, We thought 1st and foremost of passengers for health reasons to restrict the limited waiting times and working with the state services. So it had positive impact on passenger traffic. Let me take one example, you know that China accepted no passengers if they did not have a double test in the originating airport arriving in China. So Someone coming from Africa and transit into Paris had to do a double test in Paris. The same if they came from London or Frankfurt. So we were the 1st in Europe to use our experience with the partners we worked with to set up tests for 500 passengers coming from China every day that enabled us to make the Paris Hub the best hub for connecting with China. Moving on to the next slide, You can see that we continued to work on promoting brand loyalty by adjusting our terminals upon request and opening up enough terminals to make passengers satisfied, not all terminals. If we had and let all terminals open, which would have 2 negative effects. Heating, air conditioning, high taxes with a few from that and stores would be closed. A store in an airport and the circumstances cannot be profitable. So in some terminals, we managed to maintain a certain level of retail business. So we were very agile in Opening up Terminal 2 that was far more modern and it is totally renovated. That's what you find on the next page. You can see that we're agile in opening and shutting down terminals. We shut down several terminals. We opened up to BD and the savings linked to the shutdown of infrastructures in cars reached about 50 Media news for the first half only. A few comments about 2B in 2 d that new terminals we haven't presented yet, 77,500 square meters and 5,200 meters of additional retail services. It has 2 statuses. It can receive long haul flights than the medium haul flights and it was done for a good part of May June. In May, we decided to open up 2 A for registrations and We realized that we also needed to put planes in contact with these terminals. So in this first half, priority was given to passengers and we were committed with opening up the terminals and I must also say a few words about the employment situation. At the end of the first half, that was in the June 13, we reached an agreement with 2 trade unions. To change employment contracts and to reduce ADP compensation remuneration until We return the traffic, the normal traffic. There was solidarity. The company and the trade unions accepted to opt for solidarity by reducing pay for each and every one of us. We avoided several hundreds of dismissals. So 11.50 employees who've been leaving the company on a volunteer basis, The company will seek to reemploy them as far as possible, 450 to be reemployed in the coming years. We've also decided to slightly reduce pay by 5% maximum in 2021, 2022 and 4% maximum in 2023. As of the first of January 2024, we are committed to see that everyone returns to the level of pay in 2019. And if people refuse, We will replace them, of course. So the first half, So a lot of energy deployed by the company to reduce costs, to enhance the quality of service and to be agile in opening and shutting down terminals, a lot of effort had to be made by the teams and also solidarity since We set up something that was unique in a state owned company and quite unique amongst any companies with solidarity with employees. Philippe Pascal will now tell us about the financial statements. I will start with the 1st driver, traffic. On Slide 9, we have all the figures for platforms directly and indirectly held by ATB Group. You can note that the group Traffic is down by 26.6% as compared to the first half of last year, the first half where a half of this half year period was not impacted by COVID from the 1st January to the end of March. Traffic was also impacted by a sharper decline in Paris, minus 45.7% as compared to the first half of twenty twenty. All in all, when you look at the details for all the figures on the group's platforms. We can note that they reflect organic ways that are quite different around the world with different sequences of the pandemic and the recovery that is differentiated, fast recovery in Asia, relatively fast in the Middle East and in Turkey and far slower in a certain number of mature countries. And yet, there is no hard set rules. And Taoyao, for example, Traffic rose by plus 70% due to the massive return of Russian and German traffic. Other airports for tourism like Mauritius, once it's almost a legal impact, to the Persian Bank. For premise traffic, Virgin platforms are doing better than their peers, Madrid, Frankfurt, Amsterdam and London with a percentage of traffic of 20.5% compared to 2019. And yet despite the distortions between with Orly, Orly, we had good traffic and came back quickly due to domestic flights, European flights and also French overseas territories. In recent days, The French overseas period is slowing down a bit due to the health situation. What's noteworthy on this slide instead of to the corresponding rates that is quite significant due to a hub that is doing well with an interesting percentage of 27.5%, but the 58.5% was filled up because airline companies are maintaining, opening up at certain number of flights or destinations to occupy market shares, even though it's hard for them to fill up the planes at that period. Before moving on to Slide 11 and looking at the figures in detail. I must say that there were 4 major highlights in this first half And that should be important in mind to properly understand. First of all, the base effects with respect to 2020 and 2 factors that are one half. The first the 2 base effects, the first one I mentioned before is that in the first half of twenty twenty, There was no pandemic. The COVID-nineteen in the Q2 of 2020, We had a certain number of impairments for large amounts, especially for international global assets. These two factors are mirrored in the financial statements for the first half of twenty twenty one with the crisis, the health crisis that is that impacted the entire first half of twenty twenty one at the lag of an additional impairment in 2021 as compared to what was done in 2020. The 2 other factors are one off. On the one hand good opportunities on the real estate market where we took open full ownership and we'll be working on that in the coming weeks to take over certain buildings that are for Paris platforms, leading to a positive impact on our EBITDA at about 117 with their new orders in Paris and secondly, to major efforts in financial restructuring at international level. We have extended a certain number of our concessions and we're now working on the financial restructuring of the debt on some of our platforms. I'm referring to good news on restructuring the financial debt of TABB Tunisia leading to a favorable impact of over €100,000,000 in the financial results. Bear in mind these four important factors, We can move on to EBITDA and net revenue. You can see that our revenue was impacted negatively for SDA and Relay given less than dynamic operations in traffic and the shutdown of retail, but AIG's revenue was stable as compared to the first the half of twenty twenty with a decline in airport views linked to an increase in non rental fees for TAB. Revenue is up as compared to 2020, mainly due to the scope effect with the Integration of Almaty Airport generating US19 $1,000,000 In addition, you can see that without this revenue, and Matti's TAB's overall revenue would be declining. For EBITDA, all of EBITDA is rising due to the fact of keeping costs under good control. SDA and Relay EBITDA is positive, although its revenue was positively impacted. Now its revenue was declining rather as compared to the first half. AIG and AIG made major efforts in keeping expenses under control, thanks to furlough and to have with €31,000,000 in additional EBITDA and despite the Dalmati effect, the Dalmati effect as seen a positive effect on EBITDA. Paris alone has EBITDA that is rising due to good financial our opportunities and one off effects by taking over some buildings, as I pointed out, in full profit, under 17 €1,000,000 impact on EBITDA and less write backs of reversal of provisions in the first half of twenty to 2021. So the overall EBITDA for the group could have been slightly negative by the San Julian 5 €1,000,000 versus €55,000,000 on this chart for current operating income and net to revenue, we can see the base effect with an impairment of activities in the first half of twenty twenty. This did not lead to any new provisions in 2021 to large amounts. So net income was positively impacted in addition to the base effect by the restructuring of the Tunisian debt for just over €100,000,000 net. The last slide bears on cash flow, cash flow that is still secure, thanks to JPY 4,000,000,000 in bond issues in 2020. For the 1st last Month of 2020 cash flow was stable due to our plan for financial stabilization. But during 2021, cash flow will decline significantly by about US1 $1,000,000,000 over the year. You can to the first effects in the Q1. This is due to a continued investment policy and because traffic is below the 35% level with respect to overhead costs, 35% of traffic in 2019. And due to the repayment, bond repayments in 2021. Despite this decline in available cash though the situation is still under control and We can still cope with unexpected events in the future. That is for the financial data. And I will give the floor to Auguste Stander Romano. Philippe? Thank you very much, Philippe. So just a few words now for the outlook Concerning the future, we still have 3 main preoccupations. The first is our customers, quality of services and the way in which you are welcomed at the airport, also with other people at the borders, officers, etcetera. So it is even more delicate for us to Provide guarantee for this satisfaction. The second element is to provide efforts to control our assets abroad and in Paris, and this requires the redeployment of activities in Chile, India, Jordan and countries that we weren't able to visit as much as we would have liked during the crisis, the pandemic. We started again in Dubai. We have a partnership with India, and we worked on our industrial partnership since, as you know, it's an important part of our cooperation. And a third priority is to the recovery of our Parisian activities. The slide, I think it's Page 15, You have the first items there of the recovery relying on fixed access, the optimization of Operations, investments in terms of our real estate assets. 1st, the optimization of operations. So it is about Finding the balance between preserving our competencies, going back to activities and the sanitary situation as Well, and being agile and obtaining performances, by 2023, we want to reopen our different infrastructures and they will all be reopened except for Terminal 2 Si, which will have construction work to reach the European standards, number 3 standards. So the traffic will go back to the levels of 2019 by 2027, but probably not before 2024, 25. So what about the costs? I talked the cost structure. I talked about the realization of structural savings. It is at the origins of 2 thirds of the savings, structural savings, EUR 150,000,000 per year that we hope to cash in this with the measures to take into reduced cost base, that's ACP, And improve the OpExes also and our duty free, namely The recovery of Perrigian activities also requires investments. So on the same chart, you can see On Slide 15, we need to maintain our investments for maintenance, as I said. And at the same time, We must preserve keep all the investments for green and smart airports. And at the same time, we must take into account fact that we'd have no visibility on our tariffs on the and we must preserve our treasury, our cash flow. So This led us to decrease our investments and They will be reduced between EUR 50,000,000 in 2021 2022 and between EUR EUR 650,000,000 to EUR 750,000,000 per year in 2023 2024. This is confirmed more than ever. Now there's a lot of telework going on. So there's still a lot of demand for cargo. And In Orangley, as you know, it's close to the Grand Paris Express and the center of Paris. This will contribute to this development. Our strategy of recovery for recovery, Real Estate strategy has AOT. For the retail sector, Sure, more than ever, we have the ambition to develop in Paris and internationally what has been experimented in the 2E hall, okay, Emblematic is a global vision to have a 60 it represents 60 euros per passenger, and we still want to provide a better offer, more adapted offer as we as in Orly for domestic flights Or Charles de Gaulle for international flights. This last pillar of the restructuring plan is the recovery of regulated Have positive revenues in 2022, we will have and that's we're aiming at. And it will be all about finding a right balance between the tariffs that do create an exposure And the new conversions towards better security. So this done in good intelligence with the Transport Regulation and the stakeholders while increasing these adjusting these tariffs. The group remains totally mobilized to create value and to be ready at any time to grasp The recovery that is taking place, as I said, numerous times in periods of crisis, we underestimate the Size has been the importance of the crisis. And this is why since March 2020, we decided to borrow money because we know that the opening of the markets, which didn't in place, could We weren't surprised by the long lasting prices. We were had been ready since March 2020. We knew it would last for a long time, and it was probably longer than what many anticipated. In March 2020, we were explained that things would go very well in 2021, but we saw what the situation was and we could believe that things will be all right in November 2022. But the recovery, when it happens, has a tendency to be underestimated. When there's a crisis, we underestimate the crisis and then we underestimate the recovery. So now more than ever, we are determined to be mobilized fully mobilized on retail, on the quality provided. And it is not because we are determined to go and fight for what we want, but we mustn't be careful to the guidance. And In terms of traffic, for our forecast, we are our guidance is down by 5 points. And for in Paris airport, we're going to 35 to The ratio of EBITDA were decreasing our Average from 15 to 20 and our investments, I will give you the figure between 5.50 and EUR 650,000,000 in 2023, 2024. We are maintaining our objective of EBITDA ratio 6 times to 7 times by the end of 2022. And in terms of traffic, we hope to return to the 2019 level by 2024, 2027 and 2023, 75% and in 2024, 90% of the 2019 traffic. During this crisis, the reassertion of our engagements for the environment are more than ever topical. And for all of our airports and ADP are the objectives to reach carbon neutrality by 2,030 With a name of net 0 emissions by 2,050 at the latest. And yes, for 2,050, our objective is that for all the airports of the Airport of the group have net zero emissions. We have a strong program to help us reach these net objectives. We also underlined by the importance of biodiversity with the initiative on the protection of biodiversity, Act For Nature International and other initiatives that I could mention, if you like, Rosy Cedegy and Zagreb joined to answer to a call for a green airport in February 2021. We had a tender for a call for projects for Airbus to look at the sorry, we signed a partnership with Air Liquide and Airbus to study the reception conditions for hydrogen aircraft. And we had also a call for interest to select 11 projects out of 124 that will help develop the value chain of hydrogen in airports. This is what I am able to tell you. And now we are at your disposal for any questions you might have. Sure. You're not on silent mode. I will let you know when you're able to ask your question. First question comes from Mr. Jean Jacques Christophe Lefebvre. Mr. Lefebvre, you can speak. The next question from Mrs. Rousseau. Yes. Hello and thank you for taking my question. First question about the air traffic. We saw the improvement in May June. Could you give us indications on the dynamics In July for the moment that you might have. And second question about the CapExes. I So your new program, we see an increase of the level of CapExes in 2023, 2024. Could you give us some elements Concerning what you are going to do additionally to that, maybe compensations for what you haven't done before? And otherwise, in terms of environmental CapEx in the budgets that you mentioned? Mr. Des Romanes, you mentioned the adaptation of our infrastructures for the welcome of electric planes. Are there already elements in the CapEx programs that are mentioned? And if it's not the case, what could that represent in terms of investments? And lastly, about your agreement with Schiphol, I saw that you have Renowned to this agreement, what are the consequences, please? Perhaps I will ask But right answer to the Schiefel question, we decided that the agreement wouldn't be renewed. So therefore, it was terminated on the beginning of November on the 30th November, sorry. So we put in place a process for the different participations for 18 months, and this would get placed to the disposal First, by Chifol of AB and then on the base of the price, The disposal price, Alipay would sell its shares to Chifol, and it's a commonly agreed The separation, our economic models are quite different. And therefore, we agreed to find good profit from this alliance that we had for 12 years, and now it was time to part and to each become autonomous again. So this was for Schiphol. Maybe will answer to the question on green and air traffic. For traffic, the dynamics in July is in compliance In line with our trajectory, we indeed had a slow recovery, but a true recovery of the traffic to reach 50 Beginning of August. Today, we are at 49%. So we are on the right tracks. I would like the expected traffic is by 50% compared to that of 2019. So it's these 50% compared to 2019 that give an average Point of 35%. So the question, which consists in knowing and understanding whether our traffic will be between 30%, 40% and at what level it will be. We'll know more in September, October When the change is made towards so for the CapEx, The main explanation, the motive for the increase in the CapExes, these are regulated and non regulated in Paris, the main motivation which explains this increase in 2024 is due to 2 elements. The first is the compliance of our baggage sorting to realize the examining of this the baggage compartments in compliance with the number 3 And these had been delayed for 2024. The compliance, it's a mandatory compliance. So this has been done. And on the non regulated perimeter taken in charge by the airport, this is the first point. The second point Is a certain number of heavy maintenance measures for the aeronautics, which must be done every 8 to 10 years depending on the tracks on the trail. And in 2020 through 3, the runways, I'm sorry, so we will prepare our infrastructures for the full back to normal of the situation. And for the investments And the green aspects at this stage for green for the 2021 CapEx to 2024. They are not only translated by a change of an adaptation of our modalities. And there are very it is not any different from the previous investments or volume of investments that we had of the specific CapEx is in line with the environment. So these are elements that we are studying. There could be over costs, But for the investment as it is presented at this stage, they are not significant. So this is about traffic and CapExes. Thank you very much. The next question comes from the line of Ruxandra Haraldova from Kepler. Please go ahead. Yes. Good morning. Thank you very much for Roxandra, could I please check your audio as you are you cannot be heard? Yes. Hello. Sorry. Can you hear me now? Yes. Please go ahead. Okay. Sorry for this. So first on traffic, looking At the second half of the year, do you assume in your new guidance that August will be a big traffic month? Or do you and then traffic later this year will stabilize below the level of August? Or do you expect sequentially improving traffic trends relative to 2019 until the end of the year. And do you see signs of recovery of city tourism in Europe at this stage? And if not, do you expect this to happen later this year? Or is it something to be expected next year? 2nd, on costs. So in addition to the voluntary departure scheme, you mentioned some new personnel cost savings today. Just to make sure I understand correctly, you agree with labor unions on a change in remuneration terms of 4% to 5% over the next years. However, each employee still needs to approve a change of its employment contract. What is the flexibility of the employees to Septal rejects this change in remuneration. And what would be consequences if they reject these changes? And to which extent are the structural cost savings of EUR 100,000,000 to EUR 150,000,000 that you mentioned today, Sustainable post COVID, since you indicated that employees' remuneration will return to current levels at the beginning of 2024. And 3rd, considering the drastic Recoveries that you expect over the next years. When do you expect to return to dividend payment? Thank you very much. It's like we're on we heard you as if you were on the moon. And on Tampa, the bad sound, we heard the French translation. So we only heard about 15% of what you said, but Philippe Pascal is very brave and he will try to answer your questions. And then you will tell us if we have answered your questions from what we have understood in bits and pieces you have before. Philip? There were 2 questions, I believe. 1, on the recovery of fabric in the second half and the another question on costs. Starting with costs, The goal is to clearly sort out the notion of economics versus what's business due to the business environment and what structural environment. Starting with structural savings, the figures given $100,000,000 to $150,000,000 savings that will continue after the crisis and when We traffic recovers entirely. Savings basically due to 2 things. First of all, the non replacement of a certain number of departures with the 700 deposit that will not be replaced at ADB SA and additional savings on payroll due to the changes in some Provisions in the employment contracts of the first part regarding payroll covering about 2 thirds of our efforts. And the second point relates to savings in terms of procurement, procurement in the sense of buying at a lower cost and also buying less. All of these savings for ADPSA, structurally, including when traffic The recovery is entirely with the amount of RMB 100,000,000 to RMB 150,000,000 in savings. In addition to that, we have structural to events at group level, preparing for TAB as well as our other Parisian, subsidiaries in the group, you know that our engineering operations once the European BU in engineering is shut down. Regarding specific matters related to employment, to provisions. The first, we have a collective to amicable termination agreement signed by oil trade unions, the departure of 150 people, Operate 700 will not be replaced unless Augustin said, we will be gradually recruiting 15.50 people depending on how traffic recovers. Secondly, we have the employment contract adaptation plan with the drop in pay based on the business environment. And that means that employees will accept individually wage drop. If employees reject that wage drop, this will start the procedure. We will try to have them redeployed. And if that is not possible, they will be dismissed for economic on economic grounds in 2022. The company has pledged to replace all departures linked to the employment contract adaptation plan. So these are 1 shot savings from a financial perspective only. When you say that remuneration in 2019 will return to its same level as in well, by 2024 at the latest. That means that between 2019 2024, We will have generated structural savings. That's for the savings plan. In addition to the structural savings plans, we have 1 off saving plans, which are mainly linked to the shutdown of infrastructures or to decline in traffic in general, leading to less subcontracting. And as a result, in addition to these savings in 2021, 2022 and the following years, We will see a positive impact on our expenses. The second question relates to traffic in the second half. We're talking about 50% of traffic in 2019. So 50%, that's a percentage, which will be linked to the traditional drop in traffic in autumn. You know that traffic is far more dynamic in July, August for ADP with the end of the season, that's quite long in September. As of October, November, we have a decline in traffic before it picks up again in December. So 50% of that base in 2019 is modeled in our traffic equation. Now based on forecasts and information obtained from airline companies, It is on that basis that we have recorded these figures. So that was my attempt to reply to your question, which we did not understand. Thank you very much. Thank you very much for the answers. I had a third question with respect to the dividend policy. Could you maybe give us an update? And Given the traffic trajectory that you expect over the next years, when do you expect to return to dividend payments? Thank you very much. Hello. Listen, We have no reason and it stands today to believe that our dividend policy should change. As we speak today, there will probably be no positive results in 2021, no positive revenue. So there will be no need to address the issue of dividend in 2022. But Once you return to profitability, I believe that our shareholders were very much in favor of about to the 60% that we had before and my forecasts are based on that figure. Thank you very much. Thanks. The next question comes from the line of Christian Nadeaucu from UBS. Please go ahead. Hi. Thank you very much for taking my questions. The first one is on the OpEx In the first half of this year, despite the fact that the traffic is lower than the second half of twenty twenty, your OpEx It's higher. Could you talk a bit about the moving parts? The second question, You had this EUR 117,000,000 positive in real estate that you flagged. Did you know about this In your budgeting exercise at the beginning of the year? Or if you didn't, why didn't this increase Your EBITDA guidance for the full year, so is anything else deteriorating versus your initial plans? And the last one, if I may. Looking at net debt, I think you're roughly at around SEK 8,000,000,000 at the 30th June. What are your expectations for the full year? I think you talked about potentially EUR 80,000,000 financing for some of your Subsidiaries, could you talk about other moving parts in the second half? Thank you very much. So three questions. About OpEx in the first half, what we the guidance we gave last year and also when we announced to our annual results. We knew how to make our expenses variable up to 35% of traffic, the equivalent in 2019. When we fall below 35% of traffic, we had a certain number of fixed costs that could not be reduced. That is what took place in the first half of twenty twenty one. You can see that Traffic on average in Paris is below 35%. Due to the rigidity of our costs, this is what we noted. At the same time, a certain number of exogenous factors whether it's favorable. For example, the fact that state took charge of a portion of furlough. So all of that was anticipated in our budget. To reply to your second question on real estate. Real estate was in our budget, maybe not at the level of €117,000,000 but to a large extent, It was there to it was anticipated in the EBITDA margin as disclosed between 2018 and 23. Now the revision of this EBITDA margin is not linked to new operations, but it is due to the expected decline in traffic and cautious guidance. On the AOTs, you should bear in mind the mechanism. ADP for some 10 years now has granted construction leases that we call AOT in certain legal systems with a hangar that's construction leases from an accounting perspective has granted leases on land that led to the construction of buildings that were owned by the lessee at the end of the construction because the lease, the LESI could this was obliged to destroy it unless ADP wanted to take it over. Our strategy was announced 2 years ago at the Investors Day, and there's a specific slide stipulating potential gains expected on these AOTs. This strategy, So to try to recover as far as possible the different property for them to be re leased. It was assessed on a case by case basis to see if taking over these buildings would be compatible with our new layout at the airport or if the buildings could be re leased. Most of the AOTs that are being negotiated today as have led ADP Group to re lease to the lessee who built erected the building. So it's a good opportunity, opportunity to renew things in coming years. So that has been able to tell you exactly year by year, half year by half year, what amounts will be generated in terms of gains or improvement in EBITDA or when these AOTs will be finalized. Once again, that is negotiated on a case by case basis. So that's what we had to say about AOTs. About cash injections, what we can tell you is that we confirmed our goal in terms of net financial debt At the end of 2022, we did not give any transition point for the net venture debt at the end of 2021 because the situation is too volatile in our opinion. But at this stage, We believe that we can reach the target. This is why we confirm it in our guidance. Despite to certain number of factors. The decline in debt that was reported in this slide for our CapEx strategy, where we gave most of the group's CapEx by giving you the CapEx for Paris. Of course, there will be reinvestments, potential reinjection at international level, But they're not that will not lead to significant changes in the net debt to EBITDA ratio, but it could be interesting because New cash injections could enable us to reduce the overall cost of debt on a certain number of international platforms. So these are factors that we look into. The first half saw exceptional profitability in terms of financial results due to the restructuring of the Tunisian debt. A lot of work was done by TAB and that ultimately led to a certain number of lenders abandoning, relinquishing a part of the Tunisian debt, save exceptional conflicts. So this is what we like to keep confidential for the time being since most of them must still be negotiated. Thank you very much. Could I please add that the EUR 117,000,000 in real estate, does that is that cash Also, is it just an accounting and accounting has only an accounting character? It's an accounting where we recognize in our account The value given to a part of future flows linked to the final destination of the building and the residual lifetime of the building. But it's just an accounting effect and not a cash effect. Excellent. Thank you very much. That's very helpful. The next question comes from the line of Dario Maglione from Exane BNP Paribas. Please go ahead. Hello, good morning, everyone. Two questions. On retail Spend per packs, the target pre COVID was for €25, €500,000,000 per passenger in 2021. How do you think spend packs will evolve in the next 3 or 4 years? Any impact of Chinese passengers Not traveling to Europe or changing purchasing behavior for luxury products. 2nd question on your joint venture with partner Lagarde for detail. Are there any discussions to reduce rent for SDA NCLA? Thank you. To answer your first question on revenue per passenger. There's no public target. You spoke about the figures for the first half as we into the half year revenue. We're talking about the level of revenue per passenger in Paris. You must bear in mind though 2 important factors. Bringing down revenue per passenger and secondly, pushing up passenger revenue. What lowers revenue is due to the traffic mix. You can clearly see that the recovery of traffic will take place on domestic and European flights first of all, before a strong recovery of international traffic. This is the main reason why The trend is for SPP to decline. That is offset by certain number of important initiatives taken. Thanks to work and the strategic guidance for several years now. In particular, Changing the product mix per sale with move towards passion and luxury items. In particular, in the flagship, we have the laboratory at Terminal 2D, perfectly in line with revenue per passenger reaching about €58 per passenger in the first half. This is a hospitality model, 1st of all, and also commercial retail model based on luxury, and this is what will be deployed gradually in all the group's premium infrastructures. So with these two things, we can state that revenue per passenger in 2021 will be higher than in 2019 before the COVID crisis. Despite the dilutive aspects, think to to gradual return to a traffic mix with a balance between European domestic traffic and international traffic. Your second question. I think I understood that you're asking about our work with Lagardere. We have a JV called LGA with Lagardere. For the time being, We are very much focused on improving SDA's operating performance. It was hard hit by COVID, and we're working with Lagardere to improve the performance of SDA's operating performance. Do we have any other questions? The next question comes from the line of Martin Blutel from Bank of America. Please go ahead. Yes. Good morning. Thank you for taking my question, which is on your Economic Regulation Agreement, the ERA. My question is, do you still expect to have a new 5 year economic regulation agreement from 2023? Or could it be delayed further? Thank you. So in terms of economic regulation, So a point on the current situation indeed, we terminated the 2016 2020 contract and we stopped negotiations for the next to regulation economic contract planned at the time for 2021 2025. When we want to put in place an economic regulation contract, There is a very formal procedure, which takes a long time and this takes about 2 years' time. So this is the first point to prepare for this negotiation that will last 2 years. Internally, it takes Big year to define the investment plan and define our ambitions in terms of service quality, define our trajectory for OpEx and for the regulated perimeter, define our strategy and for our tariffs and the structure of our aeronautic taxes. 3 years of preparation for an economic contract that can last up to 5 years. So in order to establish this economic balance, this equilibrium, we need to have an 8 year visibility for traffic, for the composition of the traffic, for the needs of the capacity that this traffic induces and for our investment plan and our tariffs. With an absence of visibility for the 8 Future years, it is impossible to conclude a regulation economic contract. Currently, The situation hasn't provided the visibility that is necessary. If we start from the principle that we need 8 year visibility, And if we have it in 2022, it means we cannot have an economic regulation contract before 2025 at this earliest. So we need a year preparation and 2 years of negotiation. So if we have no visibility by 2022, This means and we don't have it in 2023, there will be a contract only after that. So But I prefer repeating it as such. So at this stage, what I can say is that an economic regulation contract is, 1st of all, a formal commitment for investment by the ADP Group. And it does seems unreasonable to take such an engagement or commitment for such a long period. And would it be Just by regard to our shareholders, we cannot take this commitment by without having the right visibility. Since I see no further question, I want to thank you all for being here during this And if you look at the statistics with the people I make, 62% of people leaving for Greece. So I see. I wish you a really good flight and good experience in our airports. And please, if you have other questions, you can