Ladies and gentlemen, welcome to the Alstom conference call. I now hand over to Henri Poupart-Lafarge. Sir, please go ahead.
Thank you. Good afternoon, everybody. Welcome to our half year results conference call for the year ending March 2021. I will start by a few highlights, then I will go through a market update, the business update, some updates on the Bombardier transaction, and then I will hand over to Laurent, who will detail for us the financial results, and then we'll come back for the conclusion, and we will have time, of course, for the questions and answers. As far as the highlights of the first half are concerned, as you know, some order intake has shifted to the second half of the year, and therefore, the level of order intake of the first half, even though it is quite sustained, is at a relatively low level as compared to historical basis.
We are extremely comfortable with the second half, which helps us to confirm guidance of the book-to-bill above one for the year, as we see a very important pipeline of tenders coming in the coming period. Also, as we have announced quite recently, a number of wins, which are comforting our vision for the full year. That's for the full year. For the midterm, we confirm as well very positive midterm outlook for our market. As you have seen, there are numerous stimulus packages, governmental plans to relaunch the economies in general, and in particular, rail transportation and the green economy and the sustainable economy. This has been confirmed, and we have seen recently, and we'll come back to that later on, that the industry has totally confirmed our vision of the market.
Sales are down and have been down, of course, during the first quarter due to the lockdown, and we discussed that in July, during our call in July. The very good news is that it has come back to a normal level as soon as the second quarter, which means that we have been agile enough to restore our industrial supply chain quite rapidly after the lockdown. This has enabled us, together with a good project execution, a sound project execution during this first half, to have a resilient adjusted EBIT with continuous, and we will see that improvement of the gross margin. Clearly, a good half year in terms of project execution, which has enabled us to, I would say, mitigate the impact of the COVID-19. The free cash flow has been impacted by the COVID-19, definitively.
We have ramped up our Rolling Stock facilities, a number of inventories which are there, and we have had some delays in some of the deliveries due to this first quarter of difficulties in our supply chain. Bombardier transaction, major milestones have been reached. As you know, we have now almost all the regulatory approval, as we are in a very good way to finalize this acquisition. The closing is definitively confirmed for the first quarter 2021. In terms of market, and before the market, sorry, I want just to highlight our sustainable policy and corporate social responsibility on different fronts.
On this green supply chain and green production, we have inaugurated a new site in Morocco, and I should say also that it is a good industrial strategy, where we are more and more investing in best cost countries, more and more putting some industrial capacity in the bast cost countries. This site is to assemble harnesses, cables, and we have installed a number of solar panels to the site. Hydrogen, we come back to that. Of course, hydrogen has taken a lot of momentum during the last period. The fact that we have been pioneer in that technology is, of course, a great differentiator as compared to the rest of the industry, which is now moving in the same direction.
Caring for people, I think we are not talking a lot about it, but I'm quite proud to say that "The Wall Street Journal" has ranked Alstom number one in human capital for the sustainable management out of the 100 top sustainable companies. We have worked, of course, after the COVID crisis on healthier solutions for transportation, ranging from antivirus materials, contactless doors, and things like that to make sure that people and passengers are safe traveling within Alstom products. Market update. Actually, nothing really new on this market. There is a strong confirmation of all the plans in favor of rail, as we had already discussed in July. Strong support from the European Union, a gigantic number of EUR 622 billion of recovery plan. Germany, close to EUR 90 billion of spending for rail and a huge deployment, not only of rolling stock.
There are immense pipeline of tender and Rolling Stock, there is also a huge program of deployment of Signalling activity, which also gives a lot of momentum to the Bombardier acquisition, because Bombardier has the traditional legacy interlocking technology in Germany, which we don't have in Alstom. In France, as you've seen, what we call the France Relance, with EUR 4.7 billion directly directed to the operators. In India, huge work on electrification of the network. A lot of momentum as well here on the locomotives and our project of e-locomotives is now putting us in an excellent position to benefit from this electrification effort, which will require a lot of substitution from diesel to electrical locomotives. As you know, in the U.S., we have $60 billion funding for rail. I have to say that Joe Biden election on that respect is also a good news.
I've not put the picture, but we have a picture of him looking at our new [Avelia] train. Next. In terms of business, order intake, as I said, EUR 2.7 billion. Some tender activities that have been shifted from H1 to H2 as anticipated. The good news is that it's confirmed for H2. We have an answer to a very large number of tenders, as I said. What has been won, nevertheless, some trams in Nantes, systems in Taipei, confirming our strong leadership in metro systems, because after Taipei, we have announced recently two turnkey metro systems in Athens and in Toulouse, which really confirm our strong leadership there. Signaling, important. Re-signaling in France of ARGOS. As I said, Signaling in Germany to come. Good mix of orders during the first half, and some good prospects for the second half.
With, again, a guidance of a book-to-bill of one. Sales, similar story with Q2 being back to a normal level. If you look at our Q2 numbers, which are more, I would say, meaningful, for momentum perspective and the midterm perspective, things are happening exactly as planned. We have a strong growth in rolling stock. We know, I've announced it last year and the year before that there is a ramp-up of rolling stock while Systems was going down, exactly as planned as well, particularly in the Middle East. With the new Systems orders in Athens, in Toulouse, in Asia, we will have Systems going back again positively. That's very good news. Services continuing its nice growth and recovery of train operations.
It has been impacted during Q1 due to the lack of train operation, but the recovery is very good and Signalling is there and has grown on Q2. Next one. Some update on our strategy at Alstom in Motion. Growth, a small acquisition, but extremely important for us and which is already bearing a lot of fruits, which is the acquisition of braking systems. You know that braking systems are extremely important for the service business, service components. This company is very much capable of providing some discs for brakes, and this will equip a lot of our trains, so very nice acquisition. On the technology, of course, we have Mastria, which is progressing in Panama. Hydrogen train, I said a little bit everywhere. Come back to that. In terms of execution, a lot of milestones have been reached.
In Dubai, complete delivery of the metros, but locomotives in India are well delivered. Trains in South Africa are well delivered. The regional trains in Italy are well delivered. Amtrak is ramping up, so Avelia Liberty train in Amtrak. Actually a good half year in terms of delivery despite the COVID-19. Next. In terms of hydrogen, I was mentioning. We have lots of hydrogen solutions now being tried all over Europe. It has started in Germany, as you know, but we have contracts in Italy, we have contracts in the U.K. We are discussing some orders in France. We have some trials in Netherlands, in Austria. I see it positively, the fact that a number of our competitors are now announcing some development in hydrogen.
I think that clearly proves that we were right in launching that in anticipation and gives us a significant advantage on the market, which will be there definitively. As you know, most of the networks in Europe have announced that they will completely ban diesel technology in the coming years. As far as Bombardier is concerned, so very well on track. As you know, we have signed the SPA in September. The proceeds are now expected up to EUR 5.3 billion. All the guidance that we gave to you in the past are being confirmed. The balance sheet structure with a stronger investment grade has been confirmed. The clearance process is now well underway. The shareholder, as you know, have approved to a very large extent on the last AGM, the transaction. The next steps are relatively straightforward.
We have the closing first quarter of the next calendar year. Calendar year, sorry. Calendar year. The right issue to finance the transaction between now and the first half of the next calendar year. Now, I will hand over to Laurent for the financial results.
Thank you, Henri. Good evening, everyone. Let's start with our P&L for our first half 2021. With an adjusted EBIT which proves to be resilient indeed at 7.5%, and this despite the volume impact linked to the COVID-19 crisis. To go straight below adjusted EBIT, we had limited restructuring charge at EUR 7 million, and also classified COVID-19 incremental and inefficiency costs for an amount of EUR 68 million. We remind that we booked EUR 24 million back in March for around two weeks of disruption. Impairment cost and others reach EUR 26 million, including mainly positive one-off, such as reversal of asset impairment for EUR 47 million and a legal proceeding provision adjustment for EUR 30 million, together with a one-off cost related to the Bombardier Transportation acquisition for an amount of EUR 44 million.
Finally, we have the usual CASCO mechanical reversal impact in our EBIT, which accounts for -EUR 24.
On all these bases, our EBIT reach 5.4% and our net income, EUR 161 million. Moving to the EBIT bridge. As indicated, we reached this 7.5 LC EBIT from 7.7% last year. What are the drivers on this adjusted EBIT? First, continuous improvement of the gross margin by 0.7%, benefiting first from, I have to say, solid project execution, and as well improved mix in Services and Signalling. We have as well a reduction in absolute value in terms of selling and administrative cost, thanks to the cost mitigation measures we've been implementing and controlling, of course, our R&D investment and protecting, of course, our innovation capabilities. These both factors leading to a negative 1.1%, which is volume related. Finally, we have a small positive contribution of CASCO, our Signalling activities in China, which is still benefiting from excellent momentum.
On backlog, we are pleased to see again this year, this half year, continued improvements of our backlog average profitability, driven by the flawless execution and our competitiveness step-up. If we look ahead for H2, we expect a further uplift of our adjusted EBIT, driven by increased volume and a continued step-up on our gross margin. Moving to free cash flow. As anticipated, we had a cash usage in H1 of around EUR 250 million, driven first by, of course, an EBIT, which has been impacted by the volume and the COVID-19 specific cost.
Depreciation and amortization amounting to EUR 101 million, classical, I would say, contain CapEx at EUR 54 million, and as expected, working capital increased by around EUR 430 million, which is linked to a drift in cash-in due to the sanitary situation, lower down payment level due to the shift of order intake from the first half to the second half. Finally, what we anticipated back in the capital market day, anticipated inventories increase related to the ramp-up of our large rolling stock project. We know Coradia Stream in the Netherlands, Amtrak in the U.S., e-loco in India. Looking at H2, we firmly expect to be back to a sound cash generation thanks to cash-in acceleration from deliveries and as well down payment out of our very strong commercial order pipeline for the second half of the year. Moving to the liquidity position.
We have end of September 2020, strong liquidity position above EUR 4 billion, as you see, including two credit revolving facilities of EUR 400 and EUR 1.7 billion, which are both fully undrawn. Our target remains obviously to stay in a strong Baa2 rating. Henri, back to you for the conclusion. Thank you.
Thank you. Thank you, Laurent. Just as a conclusion, I would say that the results of the first half are totally in line with our expectations. Of course, we have been impacted by the COVID-19. The first half, nevertheless, has shown a very strong execution, which has allowed us to benefit from a good profitability of the execution of this backlog. We have managed again to have operations back to normal level in Q2, which frankly, I think it's a very nice achievement from the business and from the supply chain. That gives us a lot of comfort to be positive for the full year. One, on commercial outlook, because of, again, the strong pipelines of orders notably across Europe, but not only.
The sales should be, I would say, returning to their growth pattern after, again, Q1 disrupted, but Q2 we're back to the normal situation, and Q3 and Q4 would continue to grow. The sound execution of the backlog should allow us to get to a margin between 7.7%-8% for the full year. Good adjusted EBIT margin considering the situation, and more importantly, to get to a given to positive, actually, free cash flow generation. We are, I think, well on track to integrate Bombardier colleagues. We are impatient and excited by this perspective. I think Bombardier is taking some steps to control and to improve and to turn around their situation. We confirm that we are extremely positive by this acquisition and looking forward to it. Thank you, ladies and gentlemen. I think now we can take some questions, if I may, operator.
Thanks a lot.
If you want to ask a question, please press star one. Our first question comes from Guillermo Peigneux at UBS.
Hi, good evening. It's Guillermo Peigneux at UBS. I wanted to ask first a question maybe regarding the next year outlook. I guess, the European Union has named 2021 as the year of rail, and you are now targeting for book-to-bill above one this fiscal year. I was wondering, first, are you seeing any reactivation of existing projects? Second, maybe looking into 2021 calendar, are you seeing the European Union meeting their commitment on the railway industry, despite the fact that the network operators are going through difficult times? Thank you.
Yeah, absolutely. What we see clearly, and this is the very good surprise, if I may say, or very good news of the last period, that all the tenders which were on the pipeline and which have been postponed for a few months are now totally rejuvenated, if I may say, totally launched, and totally pushed by the different operators. Which means that yes, we have a very good order momentum, and we see as well some very large orders next year coming. Some of them were forecasted and others are triggered by the new packages coming from the different countries, like the signaling in Germany, which has been accelerated a lot due to that. We have a number of activities in Italy that we are pursuing, which are related to that as well.
We have a lot of activities which are related to the plan, but they will come only next year. What will come during the second half are clearly orders intake or order pipeline, which was estimated a few months ago, which has just been pushed, and now we are waiting for the answers to these tenders. Thank you.
If you find that your question has been answered, you may remove yourself from the queue by pressing star two. The next question comes from Gael De Bray at Deutsche Bank.
Oh, thanks very much. Can I get a follow-up on this? Perhaps on the more cautious side of things. In your discussions with rail operators, I understand that some of the large ticket items that had been decided before will probably go through. Do you see some of your clients starting to get a bit more concerned about the development of work from home on the rail passenger traffic in the longer term? If everyone decides to stay one day per week at home, that would mechanically imply a 20% reduction in the commuting patterns going forward, at least compared to the pre-COVID-19 situation. That's question number one. Question number two is about the good growth in Services this quarter, + 8%.
How do I reconcile this with the fact that some rail operators have apparently taken the decision to reduce the number of trains expected to run, especially during the winter period? Thanks very much.
Yeah. To your first point, actually, the cities have done some analysis on the traffic generated by a commuter. It's actually relatively low. Only 20% of the traffic, for example, in Paris, is related to people going to work. This is happening mostly at peak period. If there is a slight decrease or a decrease during this peak period, this will not decrease the need for rail transportation for the cars themselves. I don't expect any major change on that perspective. What is true, nevertheless, is that inside the financial model for the main line, this is where there are some discussions on business trips rather than working from home.
People are maybe concerned, some operators may be concerned of fewer business trips, not because it will have a huge impact on the traffic, but because these business trips are usually the most lucrative ones, if I may say. On the other hand, we could say that people who are now working away from their office may use these mainline trains to come, for example, to Paris or to London once, twice, or three times a week. No, there is not a huge, I would say, concern by our operator, by our customers on this issue. On Services, I would say it's a little bit the same answer, you have seen the passenger traffic going back again slowly. It's true. In terms of number of trains, and we are talking about Q2, we had in Q2 a normalized level of activity in Services.
The number of trains which were running were quasi equivalent to the normal level. We have our own growth, and we are growing service year after year. In addition, we had no real impact of the fact that passenger traffic was, for example, at 60% or 70% or 80%, because actually, even if passenger traffic was at 60%, there were 100% of the trains.
As a reminder, only one question is allowed. The next question comes from Daniela Costa at Goldman Sachs.
Thank you. I'll keep it to one then, and then I'll go back in the queue. I wanted to ask you about the hydrogen. You had a couple of wins, and I wonder how real, how many tenders are there in the industry, whether you're seeing a real pickup on this, if you could give us a little bit on the latest and what to expect going forward. Thank you.
No. Thank you. Today it will not be massive in terms of order intake this year. We have some wins in Germany, as you see. Both at that moment in Italy and in the U.K., these are more prototypes. We see the first commercial tender in France that we are finalizing. There is one in Spain, there is one in Italy that's going on. These are tenders which are coming. These are not yet orders. Again, the orders that we did get in these countries are more prototypes at that stage. It will come mostly next year. It will not be massive numbers. I would expect it to become massive numbers mostly in three, four years from now, when will come the time of the full replacement of the diesel fleet.
If they want to have the replacement of the diesel fleet by 2030, 2035, it means that orders should start to flow 2023, 2024.
The next question comes from James Moore at Redburn.
Oh, yes. Hi, everybody. Thanks for taking my question. If it's just one, I wondered if we could talk about the timing of the rights issue, Henri. You've obviously not said anything. I wondered if you could talk to us how you're thinking about that and what the different factors could be to change the timing.
There is nothing yet to say that the market conditions. Today, as I said, we have closed most of the orders for the completion of the transaction. We are totally sure of our sales on this transaction. It's really a question of good market condition to make sure that our shareholders can participate in the best conditions as possible. There is no preconceived idea.
The next question comes from Akash Gupta at JP Morgan.
Thank you. Hi, Henri and Laurent. My first question, or my only question is on if you can talk about how much of this rolling stock demand in pipeline is driven by replacement versus capacity expansion or greenfield demand. Maybe, is it fair to think that your customer may have a bigger incentive to replace the trains and order quickly given the savings they will achieve by replacing old, inefficient trains with more efficient new trains? Thank you.
Yes. Most of them, both replacement and capacity expansion. What we see, that we see a wave of double-deckers coming, I can quote in Austria, in Spain, in Germany. These are replacing single-deck trains. There is a capacity constraint on the lines, and now the operators, they have to accelerate the replacement, not only for energy saving or not only because of the quality of the train, the availability. Partially because of that, but also and mainly because of their need to increase the capacity of the different lines. If you talk about regional trends, it's very interesting to see how double-deckers are taking the first priority in the investment, private investment in the operators.
The next question comes from William Mackie at Kepler Cheuvreux.
Good evening, Henri, Laurent, everybody. Thank you. My question is a broad question about emerging market conditions and situation. Could you update us with your thoughts on China and its relevance to crossing the regulatory hurdle for approval in China and also the conditions? When we stick with emerging markets, perhaps your thoughts on how India is coping with the COVID situation and when you'll be up to full speed there. Lastly, in emerging markets, Russia, would you share any thoughts on your holdings in Transmash, TMH, or Transmash Holdings, and how core that is to Alstom? Thank you.
On China, first on the regulatory approval. We are still waiting for the Chinese regulatory approval. Things are progressing normally. I would say that I don't expect any major difficulty there. I think we are discussing with the Chinese authorities. Things are so far so good, I would say, as far as the Bombardier transaction. In terms of market, China has rebounded. Clearly, there have been a slowdown during some periods, but they were earlier in the COVID crisis. There was a small slowdown in urban. We can see that, for example, from our business of Signalling in urban. This is coming back, and the market is coming back at its historical levels. Even though, as you know, we are less exposed to this market. We are more exposed to the urban Signalling or the traction equipment.
India, in that case, they are launching huge investment plans. True to say that they have been very much impacted by the COVID-19. Some of our metros, like Mumbai Line 3, are a little bit delayed because of that. In the main, all the tender activities, and as I said, for example, on a lot of locomotive tenders, some suburban train tenders, some regional train tenders as well. The tendering activity is going nicely, and I think that they are coping quite well with the situation, managing to sustain their economy and sustain their operation despite the impact of the COVID-19. I would say in India, here as well, I would say that the situation is, if I may say, quasi-normal situation. In Russia with Transmashholding. It's a good question. The Russian market is quite sustained.
There was a huge boom of locomotives and metros recently, it may slow down a little bit in the coming years, but at a relatively high level. As I said in the past, Transmashholding is very good in financial investment. We had a very nice dividend flow of dividend from Transmashholding. We have not done as much as we could have done. We are benefiting from the relatively low labor rate in Russia. We are supplying, sourcing some components from Russia. I hope that in the future, we could do more in terms of technology, which is not totally the case today. We have good relations with Transmashholding, but it's true that it's not intense relationship at that moment from an operational standpoint.
The next question comes from Alfred Glaser at Oddo.
Yes, good evening. I wondered if you could give us some update on Bombardier Transportation, since you have renegotiated the acquisition price, and then you disclosed that actually there will be a little bit of net debt in Bombardier Transportation when you take over the company. Could you tell us where exactly the company stands now in terms of execution, and how do you view the margin improvement potential from this starting point?
Clearly, the Q3 results of Bombardier were totally in line with our expectations. After Q2, as you know, there were some discussions, but Q3 were in line. They reached a number of milestones in their execution. Still some orders to come, definitively. I'm not neglecting that. In the main, it's going in the right direction. Basically, their portfolio of projects is maturing, and they are not taking on board too many complex projects, so it helps them to progressively overcome some of their engineering difficulties. They get homologation, partial homologation. They still have this backlog of difficult contracts and low-margin contracts, and I'm not changing a word on what I was saying in the past regarding the full guidance on Bombardier and their margin in the backlog and so forth.
Q3 was totally in line with our expectation and in terms of cash as well, in line with our expectations. Nothing to be added as compared to what we said when we have renegotiated the price.
The next question comes from Katie Self at Morgan Stanley.
Hi, good afternoon. Thanks for taking my question. I just had one on the additional compensation in relation to the deal that was mentioned and approved at the EGM. Can you give us any detail on that? Who does it cover? What are the relevant KPIs or criteria that need to be met? Timeline, any details would be great.
Yeah. Thank you for the question. Helps me to clarify. I was personally against any kind of bonus related just to the acquisition. I don't think that this is relevant from a shareholder perspective. What I've asked is that we have some shares, some LTIs, some performance shares, which will be at four years. After four years, which I think is a good duration to verify and justify the turnaround of the company. We need to define the indicator precisely, but there will be some external indicators which will show the success of this integration, the success of this acquisition, as well as internal indicators such as synergy development, turnaround of Bombardier projects, and so forth. It's not something which is for rewarding the acquisition itself.
It's something which will reward the good execution of the integration, and it only will be triggered, of course, if the share price is reflecting such a good integration.
The next question comes from Iris Zheng at Credit Suisse.
Great. Thank you for taking my question. I've got one on the free cash flow, because if we are looking for breakeven for the full year, then this would imply quite some good cash generation in the second half. You've mentioned that it is going to be driven by the down payment and also the delivery of projects. I wonder, could you give some additional color maybe on how much visibility you have onto this? For example, which are the large projects that you plan to deliver in the second half, and how much reduction of inventory that you are expecting from that?
Yes, thank you for the question. Maybe I'll ask Laurent to take this one for more details on the balance sheet.
Sure. Good evening, Iris. Thanks for your question. To give you some color on the drivers for the cash for the H2. Number one, we will have more volume, more sales, more EBIT, driven by the acceleration of the activities as we indicated. That's driver number one. Second, we of course will be delivering the trains that we have been, I would say, building up in the first half, and that has been shifted to the right due to the COVID-19 crisis. There is an element into this, which is related to the progress milestones. Here we can put, in terms of key drivers, the e-Loco in India, PRASA in South Africa, ICNG in terms of continued development, Régiolis contract in France, or TGV as well in France, just to quote a number of our key contracts.
Finally, we will have, as I said, down payment coming from the large order intake and the market, which is very positive, which will as well support overall a positive working capital contribution in H2. Last word, we are as well benefiting from our cash focus program with very positive results, just to quote 20% cycle time reduction, which has been achieved as expected and as communicated back in our last CMD. That's very positive subjects. Thank you.
The next question comes from Guillermo Peigneux at UBS.
Thank you for taking my second question. It's Guillermo from UBS again. I was thinking about your 80% free cash flow conversion target, medium-term, and then obviously the Bombardier potential acquisition, and obviously the closing of the deal is still pending and so on. I wanted to ask that, is it philosophically fair to assume that 80% conversion ratio will stay even if you acquire Bombardier, which has been suffering from free cash flow conversion? Thank you.
Yes, Guillermo. Thank you for the question. We will, of course, update all our guidance, and we'll probably do that a few months after the full integration, considering the new Bombardier scope with the new size of the company. This target, obviously, should be sustained. There is no reason why the business model should be different. On the contrary, I would say that the fact that we will have a larger scale will decrease the amount of volatility of our cash flow, because of course we will have it on a much larger number of projects, so the volatility should decrease.
The next question comes from James Moore at Redburn.
Oh yeah. Thanks for taking the follow-up. I wondered if I could ask too, on PRASA, e-loco and Amtrak, would it be possible to say how many you've now delivered? Secondly, on the rail operators, coming back to that topic, it's a conceptual question, really. If you look at the top 20 rail operators in the world for the last decade, they've collectively lost negative free cash flow every single year, and then they're underwritten by governments that subsidize their CapEx. The degree of free cash burn this year has gone to record levels. When we see all of these separate government stimuli to drive incremental investment, do you think there's a possibility that some of that government money just goes in to fill the COVID hole for day-to-day activities? Do you think that on top of the incremental investments, governments are going to fill the day-to-day hole?
Thank you for the question. On the first question, I don't want to enter each call exactly on where we stand there, but I want to tell you that the projects are progressing normally. Just to give you an order of magnitude, and by coincidence, it's roughly the same number, we're around 40 trains being delivered in PRASA, 42, I think, locomotives as well. For Amtrak, on the contrary, Amtrak, they are just starting the ramp-up. We are producing, as you know, we have just tested the train number one and two, and we're producing the train number three and four. This project, it will be a very short, it will be a fast-track project, if I may say. We are ramping up, but we are train number three and four.
For PRASA and for e-loco, we are around 40 for each of the projects. The locomotives will be produced at close to 80-100 per year. It's going to be a very fast production as well. Your question on rail operators is a good one. What we have seen so far is that the first priority of the states has been actually to provide liquidity to the different operators in different forms. In the U.K., it has been up to the point of nationalizing again the franchises. In France, some debt from SNCF, for example, have been taken by the government. In Germany, they want also to take some debt of the DB. In the U.S., we had some packages. The first priority was to ensure that the operators could continue to operate, and therefore they provide a lot of liquidity to the operators.
The second priority are the investment. There are not necessarily a link between the two, because in a number of countries, the operators are actually not our customers. If you take in Germany, in some instances, it's DB, but in most instances, it's the PTA. These are the regions. In France, the regions are also acquiring the train or the states directly. It depends on the region, country by country. In most cities, it's not the operators. These are directly the cities which are really acquiring the rolling stock. It's not exactly the same financing, the same funding. What is true is that most of the operators need to renegotiate with the public authorities their contracts. They usually have a concession or depends on the scheme, but they have a kind of concession in order to sustain their business.
I don't see a kind of trade-off between liquidity on one hand and investment on the other hand.
It appears there are no further questions at this time. Mr. Poupart-Lafarge, I'd like to turn the conference back to you for any additional or closing remarks.
No, thank you. Thank you a lot for your attention tonight. As a conclusion, I think we are very pleased with this first half, considering the environment in which we are. I think the company has well performed, and we are very positive on the coming market. I think that we'll continue to implement our strategy and again, looking forward to welcoming our colleagues from Bombardier to be a very nice addition to our portfolio. Thanks a lot. Thanks to all of you, and talk to you very soon. Bye-bye.
This conference is now over. Thank you for your participation.