M&A Announcement

Feb 17, 2020

Ladies and gentlemen, welcome to the Alstom Analyst Call. I now hand over to Henri Pouffour Lafarge. Sir, please go ahead. Good morning. Good afternoon, everybody. Welcome to this conference call. Thank you for making yourselves available on a very short notice. I don't know when you were on call, but probably half an hour ago, something like that. I think we wanted to update you as fast as possible on the announcement, which we made again half an hour ago on the acquisition of Bombardier Transportation by Aston, which aims at accelerating our strategic roadmap, accelerating Astom in motion by taking advantage of the complementarity, both in terms of geographies and product and activities of Bombardier. So I'll go through the presentation quite happily with Laurent and then of course we'll open a Q and A session with Laurent. We have also Emmanuel Petrovic with us, our General Counsel, in case you have some more detailed questions. So as a summary of the announcements, but we'll go into the details of each of the sections, The idea is to accelerate our strategy. The number one item to keep in mind is a general context. As you know, train, air transportation is has a lot of tailwinds as we speak. The momentum in Europe is absolutely unprecedented. We have ridership increase all over Europe. As soon as I talk to customers, they always require more capacity. So we are in a situation whereby the world is increasing its need for rail transportation in general. This is extremely important. I don't think I would have done this transaction if it was not in this context. This transaction is here to accelerate our growth again in a booming market. It will significantly create value, I would say, both in terms of complementarities, but also in terms of turnaround. We know that Bombardier Transportation Margins are below standard levels. We know that they have experienced some difficulties on some projects. And I think, as Tom, with this taxi cord and as the means to turn it around and to achieve the recovery of Bombardier Transportation. Then of course, you will have synergies which are related to R and D, product development, industrial platform and so forth. But I would say that in addition to a classical deal, there is, I would say, an element of turnaround, which is important. In terms of numbers, and Laurent will come back to that, but we estimate that there will be a double digit EPS accretion from year 2, post closing, closing which should occur beginning of 2021. In terms of transaction, so the price is that I will come back to that is between €5,800,000,000 to €6,200,000,000 And we will finance mostly by equity either by paying directly in shares or by raising capital. The financing is fully committed and due to this payment in shares, CDPQ, Ecate de depot, Placemont du Quebec will become the first the long term first anchor shareholder, 1st shareholder of Astom. So going back to some of the elements I've just described. So going back to the market, frankly, as I said, unprecedented. A lot of actions in favor of rail transportations worldwide. We were used to this market for urban with a lot of actions in favor of trains, metros and against cars in cities. But it has now reached, if I may say, passenger traffic, main lines and you know the to quote an example, the green deal in Europe is very much favoring rail transportation. Germany has announced a very large investment plan in favor of rail transportation as well. So everything is pushing on the same direction and we see that now in ridership. We have a growth which is expected between 3% 5%. But if you see the immediate growth, whether we talk in Germany after the decrease of VAT, there is a boom in passenger growth and the need for new rolling stock. Germany, of course, is extremely important in our transaction because Bombardier is, as you know, extremely well positioned in Germany. Just a tactical of Alstom, because just to tell you that this is a step, a significant step, a meaningful step in long term strategy. It's not the change in our strategy. We are not entering into a new market, new activities, which is I think it's important to all what Bovari does is complementary to our activities, but it's not a new activity. And we want to accelerate our growth and our profitability going forward. And to do that, I think Bombardier will bring again nice product, nice geographies and nice margin enhancement potential. We have defined and I remind you our storm in motion, which is growth, innovation and efficiency. Clearly, these 3 pillars will be complemented by Bombardier, growth, of course, immediately by bringing new customers, new geographies innovation as we will have a larger scale, a larger platform in order to develop our products to launch more R and Ds and of course efficiency, we need to turn around Bombardier and then we will achieve we will have a larger footprint and also a larger scale in order to have a different type of relationship with suppliers and so forth. So important to see that it's not a change, it's an acceleration, a huge acceleration, but an acceleration. So about Bombardier, you know probably as much as I know Bombardier, it has its leader or reference in rail mobility. It has a strong products, very large product portfolio, a lot of expertise, very large industrial footprint, large installed base, which is a good basis for services, a large backlog and revenue this year of €7,400,000,000 So in terms of commercial and in terms of complementarity, traditionally, as you know, historically, Bombardier is more in Northern Europe. The roots of Bombardier are in Germany with AAD a long time ago. They bought in the UK the ex British Rail at the time of the privatization. They were very present in Scandinavia. Aston is more present in Spain, in Italy, of course, in France. So we have a good complement in terms of Europe. Asia is the same. They are Bombardier is very present in China with very successful joint ventures including in IP Trains, but also in Metro, very present in Thailand as well in Australia, where we are more focusing on India and we are more present in India than they are. We have a small presence in India, but we're much more present. They are present in Malaysia. We are present in Singapore. It's really a different type of geographies. U. S. And Canada, of course, they are more present than we are in U. S. And Canada. And we expect a lot of investment both in Canada and in the U. S. In terms of rail infrastructure. So it will be a significant potential for us to have access globally to this U. S. Market, which as you know, requires very specific holding stocks. So it's not something that you can develop easily. And also the industrial footprint is extremely complex to build. The supply chain is very different and all that requires a lot of expertise and competence. And of course, in Middle East Africa, they have other type of, I would say, footprint. In South Africa, they are represented in locomotives where we are in passenger trains. They are quite present in Turkey, in particular in Istanbul, where they are the traditional signaling player in Istanbul. So all in all, even though you could believe from a remote standpoint that we are in a similar type of countries, the strong points and the weak points are quite different from one company to another. In terms of rolling stock and not surprisingly, these weak points and strong points translate into different type of product portfolio. Specific products which are in Bombardier are not in our portfolio. We have the electrical locomotives, for example, where we are in heavy duty, but they are in classical, middle, power, range, European locomotives, monorail, very specific product, people mover, where they are extremely strong in people mover, they have a very, very large market share, where by the way they are doing some operation and maintenance. And there are products which are suited for their specific market, whether we talk regional trains in the UK, where we don't. They have Talent3, which is in Germany and Metro in San Francisco, which we don't have and bilevel coaches in the U. S. And Canada, which of course is a very, very specific metro products. If you look platform by platform, there are more in metros in very specific products. We are more present in the standard metros whereas there are very specific products dedicated to very specific network. For some of you in London, I know they are present in London. Are not. We were present a very, very, very long time ago. In TRYM and Nitrel, that specific product as well for Germany. For example, as you know, the German market is very scattered as far as Frameways is concerned. So there are a number of Frameways dedicated to different cities. We don't have. We have no we have very little time for Termini today. People know we have talked about it. As you know, trends are quite specific to different geographies. They have the Aventra, they have the Nordics as well and locomotives as I said. So in terms of services, extremely important point, extremely important point, they are extremely present in services, both in the UK and in the U. S. And in the U. S. They are even in the operation. So it opens up for us a huge potential and I think we will be uniquely placed to benefit from the growth of service, the growth of predictive maintenance. So they have their own predictive maintenance tool. We have our own predictive maintenance tool. So we can leverage both of them in order to build a very, I mean, a world class and a leading solution for our customers. And finally, as I said, for certain operations, so they do the operations not only in the airport, but also in certain dedicated network and this will give us as well a license there, which could open some potential. Signaling, signaling is a question as well of scale. And you know that signaling activities are quite synergistic in terms of scale. So they are smaller than we are. But nevertheless, they bring, as I said, some very specific technologies for specific countries. I would say Poland and Germany and Scandinavia is probably the most important one in Europe where we are not today as we speak, we are not present in Germany. And of course, Germany is by far the largest market in Europe in the coming years. We are talking about the market of roughly €1,000,000,000 per year, which is absolutely enormous. So it will give access to various assets to this market. There are some products in the U. S. As well. But I would say I would qualify the I would say what bring Bombardier by a few very strategic elements, which will open up a few strategic geographies. In terms of industrial footprint, so no surprise, They have also industrial footprint, which is quite different from ours. They are in China very much, so neither in India, but very much in China. There are a lot of activities in the U. S. Where we have one factory, there are large factories in Mexico and we are not present in Mexico. They are in Eastern Europe. So as we are in Poland, but they are also in Sesquilipa, in Czech Republic. They have a very large factory in UK, which obviously will be essential to penetrate the British market going forward. So it also complements our footprint. Finally, I mean, in terms of margin, as I said, they have experienced some difficulties on their projects. So we have to work to bring them back to standard margin. I think we will benefit from a strong cultural fit. We be in a position to rapidly dedicate and focus some of our efforts to turn them around. As you know and this was probably I should have started by that with the picture on the first slide. We are actually delivering a number of projects with them. So we know very well how they act and deliver the projects and we are here we will be there to help them. I have to say also that a number of transportation employees are extremely talented within Bombardier. So the question is really to help them to turn their own companies around, but they have a lot of talent and expertise. It's just a question of making and implementing the right processes, the right control mechanisms. In terms of synergies, I would say classically, mostly procurement, product platforms, R and D, small industrial synergies, but very limited. As I said, it's not an acquisition which aims at reducing the footprint. And again, the synergies will come between 4 to 5 years. 1st and foremost, because we are not in a hurry to implement all the synergies, again, the most important part is to better deliver the projects, to enhance the margin per se and progressively to, I would say, to re up the synergies and the profit coming from the synergies, but we are not going to implement them forcefully. What is extremely important on the first time is really to turn the project execution around. So as I would say as a conclusion, I would say on my side that this will be a strong value creating transaction. I think it's a unique moment in the rail industry where we benefit from this headwinds on our market. I think it's really a unique opportunity. Bombardier, as you know, Bombardier Group has its own strategy. So this Bombardier Transportation was foresaid. I can assure you that in if not for the global difficulties of Bombardier Group, this company would not have been foretold. So I think it was a unique opportunity for us. We thought thoroughly about this opportunity and we think it can be a historical leapfrog for us in order to achieve another dimension. So we will recover, we will work to recover Bombardier Transportation's EBIT. We work in order to achieve all the run rate cost synergies and this should bring us large values. In terms of numbers, we are targeting to be double digit EPS accretion for year 2. It's just a symbol to tell you that we are extremely confident in the value creation of this deal. Now I will hand over to Laurent, who will give you a little bit more flesh around the transaction itself. So good evening to all of you. So starting with the transaction considerations, the price of the acquisition will be in between the floor of €5,800,000,000 and the cap of €6,200,000,000 all of this subject to the Bombardier transport account. €1,000,000,000 all of this subject to the Montvard transport account and mechanism at closing. In addition, we will retain the net cash position at closing and we have a specific protection mechanism, which is granting a minimum 0 net cash balance as of end of December 2020. So just to illustrate this mechanism and again, EUR 5,200,000,000 to EUR 6,200,000,000 are the magic numbers. If we would have closed end of December 2019, we would have paid EUR 5,800,000,000 of proceeds to Bombardier Inc, but including in our hands €400,000,000 of net cash, which would be retained by us. And all of this is assuming pension liabilities of €900,000,000 In terms of multiples, the transaction reflects on a stand alone basis easy to EBIT before synergies between 11 and 12. After Synology, we are between 6.5 to 7 on the basis of, I would say, steady stage margin. This is, as you see, attractive economics if we compare with the sectors, which is between 12% 13% and our as well multiple which is in the range of 14 as we speak. Moving to the financing. We have financing which is fully committed. Our primary objective is definitely to keep a very strong balance sheet and of course to retain our Baa2 rating and we have been designing this our financing package as such. So as you see EUR 5,000,000,000 out of the EUR 5.8, EUR 6.2 billion will be financed with equity component EUR 500,000,000 provided by to Bombardier Inc, euros 2,600,000,000 to €2,800,000,000 to CDPQ and €2,000,000,000 which will be raised to the market. As a reminder, there will be a new debt and cash for $700,000,000 to $900,000,000 So this package is fully secured at signing of the MOU with a committed rich facilities for €2,400,000,000 for the equity to be right on the market and for the new debt. And we are as well have an agreement for a new SCF of €1,500,000,000 ensuring sound liquidity moving forward. So with again, with this financing package, we retain a very strong balance sheet, which is a top priority for us, but as well flexibilities to pursue bolt on M and A as part of our Alson In Motion strategy. Moving to the transaction structure, the transaction structures will take the form of an acquisition of 100% of Bombardier Transport Share Capital and Rotting Light, which are held as we speak by Bombardier and CDPQ. As we just said, €3,100,000,000 will come from CDPQ and Bombardier investing in new Alstom shares, which will take the form of a reserve capital increase, which will be completed at closing. As a result, as you see on the right hand side, CDPQ will become the Alstom First shareholders with 18% of share capital with 2 board members and 1 non voting board members together with 21 months lockup commitment from closing. So as you know, CLLIPQ is has a strong record as a cornerstone investors in Mobility and Infrastructure at Large and will be definitively an asset for the further development of Alstom. Bouygues is fully supportive of the transaction and will retain 10% of the share capital after closing. So let's move to the indicative timetable. So today is D Day with the signing of the MoU. As you know, as part of the usual process, we've been initiating work on self consultation procedures before the signings of the shares of the SPAs, the shares purchase agreement, which is expected to be signed in the second half of twenty twenty. EGM will approve the reserve capital increase by end October 2020, which and the right issues will occur post EGM approval and will be subject of course to market conditions. Finally, this transaction is as always I would say subject to the clearance of the relevant regulatory authorities including of course the antitrust authorities. And we are expecting, we are confident to close this transaction in the first half of twenty twenty one. I'll give the mic back to Henri for the conclusion. Thank you, Laurent. So again, as a conclusion, I think this was and this is a unique opportunity to accelerate at some strategic roadmap in a manner that we could not drive off. I think we are combining this very value creating acquisition with growing market. So we are investing, I believe, at exactly the right moment in the mobility world. We are acquiring a commercial presence, product, industrial assets. We are of course we leverage a large portfolio and we'll enhance our R and D capabilities. And as you know, mobility, sustainable mobility requires today increasingly some R and Ds and innovations. We will create value not only by having some synergies, but also by restoring Bombardier Transport's full potential, full margin potential. So I think it's a win win win situation. It will be a win for our customers, which will benefit from better innovation, better product. And having talked to a number of customers, they are all welcoming this deal, which will enhance our capabilities and enhance Mobile Transport's capabilities. This will be a value creator for our shareholders and for all the employees it will give of course immense potential and immense opportunities. So thank you for this call. Now we are ready to take your questions, Emmanuel, Laurent or myself. Thanks a lot. Thank you. We will now take our first question from Martin Wilke of Citi. Please go ahead. Your line is open. Thank you. This is Martin from Citi. You mentioned in the presentation just a bit about the antitrust dependency. Just from the experience of the Siemens portfolio transaction a few months ago, just what sort of pre work you've done beforehand, just so you could walk through some of the risks or where perhaps there's less risk with this transaction? Thank you. Thank you. Of course, as you can imagine, knowing what has happened, it was a key question for us and we already talked informally with the commission. The file is very different from the one with Cement. By far, the most difficult point with Cement was signaling. Was very difficult because it was basically the Commission said that there were 3 main players Thales, Cement and Avtom and the commission didn't want these 3 players to merge between each other. Here Bombardier is a relatively small player in Europe in signaling. So it's a completely different issue and we don't expect any issue in that respect. In terms of rolling stock, here as well, first, the commission was much more open at the time on rolling stock. There was an issue on VASP, but here as well, Bombardier is a much smaller player in VASP in Europe. Actually, it only serves the very ASP market through its consortium with Hitachi. Hitachi is leading the consortium as we speak. So it's a small activity. So it will be uniquely it will be a much simpler project than the one we had with cement. So we are much more confident that we have, of course, taken direct from the cement story. I would say that we would like also to discuss extremely rapidly with the commission. We benefit I remind you last time when we discussed about cement, there was a great level of uncertainty because it was and I think I told you that at the time, it was 20 years since the commission had not looked at any file in transportation. Here we are in a different situation. Commission is extremely knowledgeable about the rail transportation market. So we can have a very, very rapid discussion with the commission and come to an agreement extremely much faster. Finally, if I may say, it's also an acquisition from Alstom. So it will be from a governance standpoint much easier where we'll discuss Alstom and the commission. It will not be a 3 partite discussion, which was more complex at the time. We'll now take our next question from William Mackey of Kepler Cheuvreux. Please go ahead. Thank you very much. Congratulations. And my one question would be relating to the visibility that you have had during your initial due diligence phases on the backlog and the accounts for Bombardier. And specifically, what do you see in terms of the quality of the future gross margins and profits within the order backlog in the group? And whether you think that the 5 troubled contracts which they have had to manage in the last 18 to 24 months are really just the remaining problem and that as they have suggested in the public that looking forward, the profit improvement profile for the group in BT is all about working through those contracts and the rest of the business looking in pretty good shape? Thank you. I mean, it's difficult for me to go into the details of course of Bombardier backlog. We had access to Bombardier backlog. We made some due diligence. Some of the projects we know very well for being part of it. Some of the projects we were not so familiar with. If I had just to simplify, we have as you know, we have the rolling stock and the rest. So the rest is going perfectly well. So it's 50% of the business. On rolling stock, as you said, you have 5 projects. I would say it's even it's a little bit more than 5 projects per se that we have really looked at. It's I mean, we have looked at the entire portfolio, but we made some thorough review between 1015 projects very thoroughly. Most of these projects are at the turning point. So these projects have started to be delivered. So yes, it will take time. It will take time because it's a large backlog. So I don't count on any margin uplift of these projects, particularly. I think these projects now we need to they need 1st because closing in 1 year to stabilize them and to deliver with the current margin in the backlog. We have valued the risks, which are still embedded in this backlog, which as I said go a little beyond the 5 projects. We made a cautious analysis. So when we said that we want to turn around Bombardier, it's because of the new orders and the new ways of working and so forth. But we are not counting on particularly uplifting the margin of the existing orders. So that's why I'll just say that it will take time. Don't expect an immediate margin at least the turnaround of Bombardier. As it was for Alstom, the good comparison is for Alstom, we have gradually improved the margin over the last 5, 6, 7 years even. This will be the same for Bombardier. We gradually improve the margin of Bombardier. Of course, I'm not talking about this year margin because this year has been impacted by some very specific events. But as compared to, I would say, relatively low margin, which was the one off at the beginning and then we progressively go back to the 7%, 8%. We will take our next question from Akash Gupta of JPMorgan. Please go ahead. Your line is open. Yes. Hi, Ori. I have a question about targeted capital structure. So you are targeting that cash position after close of that transaction. And maybe if you can elaborate why you are not considering to lever EBIT up given recently you raised €750,000,000 at less than 1% interest. So we and then also a follow-up, is there any breakup fee involved that we should be aware of? So I think that's a lot of questions. The first one, I would say, in terms of balance sheet and then I will leave it to Laurent because it's the balance sheet as you know, it's one of my strong points. I always said that we want a very strong balance sheet. We are in a large project business. We need to make sure that we are financed by our customers. So we need to make sure that we give the necessary sustainability to our balance sheet. So, LoRa has structured the deal in a way that our, I would say, credit rating remains investment grade at the same notch actually, strong investment grade and this was the purpose. Even if we have a very low interest rates, I think that we are not going to take that advantage if I may say, I really want to keep this strong. So maybe Laurent, you say more on the structure and the solution. Yes. So you say it's all I think that Akash, good evening. So the strategy of the financing is very much to maximize the equity portion. There is a number of merit into it. Number 1 is a strong balance sheet and keep the Baa2 ratio. Number 2 as well is benefiting from the very strong market momentum we had in our evolution, which is of course translated into our share price. So that was the basics and this is why we have prioritized equity versus bonds despite the fact that indeed the money is quite cheap nowadays. So to the breakup fees, there was a question on breakup fees? Yes, I think we have classical breakup fees. What we have mentioned, we have breakup fees at the end if we cannot achieve the antitrust approval, for example, at the beginning, you know that in the French regulation, we cannot sign actually the SPA now. We need to first consult with the union representative, the working concern representative is extremely important and we of course this is a law and also it's the way to do business. So at the end of this process, before signing the SPA, so what we have signed is an MOU, as you can see in the documentation. Before signing the SPA, we have a breakup fee of €75,000,000 in case we are not signing the SPA. So this would be in 6 months now after having consulted the representatives here, Volaris, 75. We will take our next question from Konark Gupta of Scotiabank. Please go ahead. Your line is open. Thank you and thanks for hosting the call. Just wanted to understand, you talked about some markets where Bombardier is present and you don't have as much exposure and then the opposite. I just wanted to understand which markets would you need to work more on in terms of getting regulatory approvals and getting union or labor approvals? I mean, which markets you overlap a lot more than the other markets and which markets are the ones where you need to work with those guys? Thank you. Thank you for your question. I mean by far, it's Europe where we need to work the most. For the rest of the markets, we don't expect a huge issue. We need to file in a very large number of markets classically, but I don't I would not pinpoint beyond Europe any specific places. Next question please. We will take our next question from Gael Debre of Deutsche Bank. The first one is obviously a follow-up on the question you just had. Why do you think there will not be any antitrust issues for metros and regional trends in Europe? That's question number 1. And question number 2 is about the price you're going to pay. So between €5,800,000,000 €6,200,000,000 So on top of that, what shall we expect in terms of pension liabilities and in terms of any other kind of retained liabilities as well as in terms of the transaction cost for the transaction? Thank you. Give us a little more on the price, Helene. Yes. So good evening, Gael. So the price, as I said, and that is again the magic numbers, EUR5.8 billion to EUR6.2 billion including all the cash which will be sitting in the balance sheet of Bombardier at the time of closing. And if we take, I think that was published as well in the Bombardier presentation half an hour ago. Their target is $1,000,000,000 of cash sitting in the Bombardier Transportation at end of 2020, which will be, I would say, belonging to Alstom at closing. So that is one important point. Then we'll see what will be the outcome of the months and years to come until closing. To your second point on pension, indeed pension will be the main liabilities that we will take on board We are talking about €900,000,000 On antitrust Gael, we looked at the market share on Metro, Bombardier and ourselves, we have relatively low market share in Europe. I mean, it's far from being an issue. On regional trend, it's true that we are at a higher market share if you combine regional trend both from Alstom and Bombardier. We don't see it as a huge issue. And again, I'm not telling you that there will be no issue at all. I'm telling you that these are some issues that would be much easier to solve than the one we had with cement. So we've looked at all these different platforms and if there are some issues, it would be, I would say, marginal as compared to the deal. Like signaling, we are basically the commission wanted us to dispose the equivalent of Alstom in signaling. So they didn't want just to have any type of consolidation in signaling because of this sector. If the commission is asking something in a very specific product range and platform, it's not a problem, I would say, huge problem We will now take our next question from Akash Gupta of JPMorgan. Please go ahead. Your line is open. Yes. Hi. Thanks for follow-up. My question is about Bombardier joint ventures and particularly the ones in China. So because of this transaction, there may be a change of control close that might trigger. So have you can you talk about is there any risk that some of these joint venture, there is a risk that the end of your JV partner may have option to buy Bombardier portion in that in these ventures and that could trigger this scope of Bombardier Transportation being different at the time of closing than what it is today? Thank you. We've looked at that. This is not our anticipation. Now, of course, we are not going into all the details of all the closures and so forth. In China, anyhow, it's a question of change of control or not. You need to be welcome to work in China and we will work on that and we don't see any reason why the policy of China will change because it's Axsome and not Bombardier. So we don't expect a major issue there. We will take our next question from William Mackey of Kepler Cheuvreux. Please go ahead. Your line is open. Yes, good evening. Thank you again for the follow-up. Can we go back to your estimates for the synergies from the transaction? And could you just walk us I can see the main rationale that you make for the transaction, but could you walk us through your expected costs to realization of those synergies over the next 4 to 5 years? Or put another way, what assumptions have you incorporated within your calculation of the SEK 3,000,000,000 NPV related to the combination of the companies? Good evening, Will. So getting to the bottom of your question, the estimated, I would say, integration, transformation also to in cost is 400 is around 4, so I. E. 1 year of run rate of synergies. So this is what we have assumed in our overall synergies value creation. Now if I get into the buckets of these synergies, procurement represents a good serve of the synergies and there is limited cost associated to it, obviously, because it is a volume game. Everything which is product related around the designs, the project management, the platforming represents as well a good 25% of what we see in terms of synergies. R and D G and A is pulling on R and D projects and of course more efficiencies in terms of the support function. And finally, there is some synergies in terms of industrial elements. All of these in terms of this 1 year of transformation cost includes as well the IT integration and some of the process, I would say, deployment that we will basically enable and deploy in the years to come with Bombardier. We will take our next question from Guillermo Peigneux of UBS. Please go ahead. Your line is open. Hi, good evening, gentlemen. I hope you can hear me. The question The question that I have is related to your working capital expansion plans, whether with the complexities around this. Actually you may have to discuss some of those expansion plans that you basically have on the working capital as we speak. And then obviously, the similar question regarding to Bombardier. Are you aware of any plans of both actually either new CapEx or new plants being deployed by Bombardier and similarly any potential working capital expansion plans that they may have in front? Thank you. Good evening, Guillermo. Thanks for your question. So, on the working capital on the Alstom side, no change compared to the latest discussion we had for 2019, 2020 and 2021. So no surprise on this. If I look at the Bombardier side, there is in terms of CapEx, there is the footprint is existing. So there is nothing as major CapEx to be planned in the next years and we will have ample capacities to serve the booming market we have. In terms of working cat, there is definitively, I would say, expected deliveries in the year 2020 for Bombardier, which will should unwind the working capital as of end of 2019. So this is what we are expecting in the 12 to 18 months to come. Thank you for your time. Thank you for your attention tonight. We'll be happy to talk soon to update you on this transaction. Thanks a lot and talk to you soon. Bye bye.