Earnings Call: Q1 2023

Apr 26, 2023

The results of the first quarter 2023. I'll hand over to Monsieur Desruelles. Monsieur Desruelles. Monsieur Desruelles, you have the floor. Thank you. Good evening, everybody. Thanks for being present. We're now going to talk about Q1 2023. I assume that you all received the release, and I got it by email. This was done in due form. As you may have seen, the growth was quite sustained despite two consecutive high growth years. The year was quite buoyant and perhaps more outside of France. The overall performance is quite satisfactory. Our turnover figure is EUR 1.354 billion, increasing by 16% versus last year. EUR 894.6 million last year. Our business is going up by 12.2% in France and 17.5% outside of France. 14.4% increase of business on the like-for-like basis, 12.2% in France and 15.5% outside of France. Let me just remind you that we sold out a company in the United States last year. Actually growth of the group in euros is lower than it would have been if we had just actually kept the company. This is a truism, still. There is a difference, a relatively little difference between the company's growth on a like-for-like basis and the company's growth on an equal currency level. Arc group contributed to the total 30% growth. The Forex negative impact is quite insignificant. The activity rate was 91.7% in Q1, and it is quite similar to the first quarters in 2018 and 2019. Now, you may remember, but last year, for example, in 2022, our business rates were beyond normative rates. Especially in Q1, we had some 92.5% activity rate. Our engineering went up by 2,500 people. 1,762 in an organic organic group, 4,550 in France, and 1,312 outside of France, and acquisitions represented 96 engineers. I mean, on that basis, the group on January 1, 53,650 people were working for the group, including 47,240 engineers. End of March, 56,300, including 49,500 engineers scattered the following: 11,350 in France and 37,950 outside of France. Let's actually talk about our worldwide activities in France. Despite an unfavorable base effect, where business went back up 12.2% as to 10% last year. This rebound is due to the acceleration of the recovery in the second quarter in the automotive sector last year. 30% growth in France, in the defense and security went up by 20%. Civil aeronautics keeps going up as well. The dynamic is quite strong because we're going up by 35%. This is a ballpark, I mean, a rough estimate. In Europe, outside of France, global business is growing quite significantly, way beyond 10%, with the exception of Switzerland that represents a very low, little contribution. In the Iberian Peninsula, the growth of business, well, it did not slow down at the beginning of the year. It's about 20%, all sectors are now going up. In Germany, growth is driven by aeronautics. It went up after it did in France in 2022. It's about 30% growth in Germany. The automotive sector is also going up quite significantly, but actually slowed down. Growth slowed down in the first quarter. The energy sector represents 5%-6% of German turnover, is also going up by 60%. Germany displayed a good organic performance level. The aeronautics sector, for example, keeps going up, and it is. Well, the automotive growth rate is slightly slowing down. In the U.K., growth is still quite sustained, but also slowed down by 17% because of the civil aeronautics sector, which represents 30 some percent of the U.K. business. Why? Because this is mostly due to one OEM. In Italy, growth is still above 25% and has been so for over 36 months. All of the sectors are going up in Italy, quite significantly, most especially, the financial sector, the automotive sector, defense and security, and telecommunication. In the Benelux, growth is 18% and also went up, actually sped up this quarter in the Netherlands with the very strong growth dynamic in the last 2 years, kept going up by over 20%, thanks to the semiconductors and electronics. Belgium, which had a growth rate, much lower growth rate also, went up by over 15%, thanks to the recovery of pharmaceutical accounts. In Scandinavia, growth that had rebounded, belatedly in the third quarter 2022, well, remains the same. Over 12% thanks to the automotive and heavy duty sector. In Eastern Europe, growth is still sustained at 35%, which is about quite similar to last year's quarter. Over 40% in Poland and 65% in the zone. Romania went up by about 30% in the tertiary sector. For example, let's leave Europe and let's go to North America. The United States represent a lower contribution to turnover than last year. The United States, 75% of the region versus 82 last year. Growth has slowed down 4%, on a like-for-like basis. Siprom actually, excluding Siprom. The United States slowed down for a very simple reason. We had to cope with the end of projects, oil and gas, project terminations, and oil and gas went down by over 20% in North America. Conversely, all of the other sectors in the automotive sector, service sector, the aeronautics sector, life sciences that represent roughly 70% of turnover in North America are going up quite significantly. In Canada, this represents over 20% of the region, growth went up by 18% thanks to the aerospace and the banking sectors. The performance in North America, which are probably quite disappointing, but actually when you think about it's relatively negatively impacted by oil and gas. In Asia Pacific, growth reached 7.6%. As you may remember, it slowed down in the last quarter, 2022. China actually slowed down 7.5% because of telecommunications, which are slightly going up, they represent about 30% of our business in China. India behaved quite adequately, 30% in the region. 18% growth thanks to local activities. Whereas Japan and Korea that each represented about 10% of the region, growth of the respective is 20% and 40%, respectively. As you can see, growth is quite sustained in all of the geographical areas. Slowed down in some places and went up in other places. From a general standpoint, growth was still quite satisfactory and sustained in the first quarter of this year. The business sectors obviously are all going up. I mean, the rates are different. The automotive sector is going up by 22%, and all of the manufacturers are going up quite significantly, including French manufacturers that have been going up since the first quarter, 2022. Growth has been going down among OEMs. The railroads sector, which was stable last year because of Alstom integration, went back up this year by over 10%. The aerospace sector is going up by over 30%. The defense and security sectors and naval services or sectors representing 6% of turnover went up by over 23%. This is no surprise this sector will keep growing quite strongly. The energy sector, 7.6% of turnover, went 4% down. Well, given the oil and gas activities that are contracting and now this business, oil and gas, which represented up to 9% of Alten's turnover, only represents 2.3% of our businesses versus 3.9% last year, and it went down by 30%. Why? Well, we had numerous major plural annual projects and some terminated. Some of those terminated in Africa, hence negative growth in the U.S. We just talked about it. The Gulf region. Russia withdrew last year because we terminated our activities at the end of the first semester. As most of our activities in Russia were related to oil and gas activities, it condensed to a withdrawal of EUR 20 million in terms of turnover last year. This business went down quite significantly as a result. Will it start off again? To be honest with you, we got no tangible signs here. The company that is now positioned of those businesses will have to focus on other activities. Because it's got a good know-how in the deployment of teams throughout the world. In other energy sectors, whether nuclear, energy equipment and chemicals go up by 12%. The life sciences are going up by 6% in the equipment as well as the pharmaceutical sectors. All of the industrial intermediate industrial equipment and semiconductors is about 10% of turnover going up by 15%. Telecommunications are also slightly going up at the group level among operators as well as OEMs. The financial sector, 9.5% of turnover went up by 9%, and growth is weaker than last year. We're now witnessing a slower growth this year in this sector. This is quite heterogeneous because this is actually related to budget restrictions in France. Conversely, this sector kept going up in Southern Europe and Canada, most especially. The retail business services and public sectors, they're going up by over 10%. As you can see actually with the exception of oil and gas, that represents less than 2.5% of turnover. All of the business sectors within the group kept going up quite significantly this quarter. So far as external growth is concerned, Alten acquired a small company early this year in software testing in North America, a turnover of $18 million, 185 consultants. We have numerous other projects. We also had an important project which I had referred to in the last call. This company of several thousand people scattered between India and the U.S. We reached the finals with others, with one other contender, and we decided not to carry on after the due diligence for tax-related reasons, which, well, we believe the risks were just too high, and so far as that company was concerned. Today, we got other companies in mind. Some of the companies are located in Europe, others are located in the United States. We started out with the discussions or a due diligence processes, and I do harbor the hope that announcements will be made and so far as new acquisitions by the end of this quarter. In the second quarter, I'm sorry. Now, as far as 2023 is concerned, and so far as growth indicators, while the first quarter did not display any disruptions, when it comes to 2022 trends, of course our growth is slowing down in terms of pace and will keep slowing down because organic growth rates in 2021 and 2022, as I had already referred to, are not gonna be reiterated. From a general standpoint, the business is heading in the right direction and we're gonna be clocking a 2-figure growth rate in 2023. Although this rate will be lower than last year's growth rate. We'll give you further information when the situation will be clear. Now, I'm done now with the first quarter related comments. If you can actually open up the conference for the participants to ask questions. Ladies and gentlemen, if you would like to ask a question, please dial 50 on your phone, and please give us your name before giving your question. I repeat, if you would like to ask a question, please dial 50 and followed by the hashtag if you have a question to ask. We have a first question. Hello, Bruno. Can you hear me? Frédéric. I have a question on the acquisitions in North America. Something that is new for us. What does this amount to? Is it comparable to what Inno had done in when they did an acquisition of company in Germany that already did software testing? That's my first question. The second one is on Q2. I know you gave the figures for January 2023 and the goal for March 2023. Could you do this quarter-to-quarter between for France and the international? For the first quarter, we did EUR 450 of the gross was outside of in France and the rest was outside for a total of EUR 1,300. That's 100% of organic, and 496 is integrating acquisitions. We need to rebase the data on the 1st of January after the C Prime. 417, 47,240 consultants. To answer the 1st question, yes, we do a bit of software testing on all the domains for banking, and services, but also in industry. It's an activity that is part of our business. We don't. So we have a couple in France, couple in Germany, couple in Spain, Italy, et cetera. I wouldn't be able to tell you exactly how many we have in total, even though it's not the largest part of our activity in services. It strengthens our IT business in Canada and U.S., where there is a demand, a strong demand for this type of business, 'cause we've been seeing for the last years a steady growth in the demand. Would you say that it's more about bank services and tertiary sectors or industries? No, it's more to do with banks, services, tertiary. Also we do have some demand in the industry. Last question, a follow-up on the state of client demand. For the beginning of Q2, do you see indicators on the ongoing trend, or maybe some weaknesses that we weren't able to see in Q1 that could show up in Q2? How do you see this second quarter? Are you taking... What's your stance on all of this? Are you showing a bit more reserve? Are you quite optimistic? The recruitment, we haven't given any instructions on us slowing down with that, but we obviously want to keep it under control. The strong recruitment in Q1 is linked to the rebound that we saw. There's no indication was given on that regard. For the slowing down of the activity, I as I showed you, automotive is slowing down in Germany 'cause that was an extraordinary growth in 2022. Aerospace is also slowing down. Banking in France slowed down. Telecoms, it is what it is. Oil and gas, we've talked about it. All of this is. Let's say that there's not a general trend on a specific, either on a specific country or a specific sector. The business stay is well-oriented. For China, you didn't mention. You didn't saw it as a weak signal. Was it because something that you expected? It wasn't expected. There were big projects that were ongoing that were grinding to a halt regarding 5G, mostly in Chassinet, the, which we acquired last year. There was a lot of interruptions, project grinding to a halt. So this has consequences on the telco business in China. We knew that the projects were gonna stop. In the end, 5G, the main investment had been done already, we were expecting the portfolio of new projects, we were expecting it to be smaller than what was initially planned. Maybe not to that level though. That was what was that linked to? I think it's linked to the fact that investments in 5G, on the equipment side, I think that they There's more to do, but I think most of it was done. I think that the activity level of telco in China should decrease or maintain the level it's currently at. We'll see what the future is made of, when we talk with the people. 'Cause when we do talk with people in telecom or they see things in the same way. For OEMs, that's for sure. For operators, it's, it might be different for. Thank you very much. Hello, Bruno. I wanted to go back on net recruitments for Q1. They're very significant. Was it where you wanted to be? Where you were aiming to be? Were you surprised by the change in activity levels or was everything piloted in the way you wanted? This brings me to the second question. How did attrition change? Has it gone down already? Yes, attrition did go down. It's still high but is going down. Tension on salaries are still high. We can feel the context of the market. It has improved for our side at least, but it's far from fixed. For net recruitments for Alten, because attrition went down, the recruitments allowed us to generate, to lead, to recruit more engineers, which is what we were imagining, but we're a bit higher than what we were imagining for Q1. We weren't expecting the business to collapse for 2023. This echoes to the question that was asked before. Today, we're not putting out restrictive measures on recruitment. Recruitment is handled in real time by sourcing that are working with the business managers. Business managers pilot two things. First of all, their contract rate, 'cause we can recruit, but if it's to have to go through inter-contract. There are some profiles where we want to recruit 'cause we have needs on the market, but they do pilot this. Depending on this rate, the recruitment either compensates for the high turnover or it can be here to answer the growing demand. That's how it is for now. The recruitment is adjusting permanently depending on our needs. For the automotive industry in France, in the past, there was issues with pricing with the clients. They weren't very enticing for us. With inflation, they were smarter and more comprehensive, and so this allowed us to. Does this allow us to move into this business and make it more interesting, or is it still not ideal or low margins? In France especially, in the automotive sector, the margin is lower than average. I mean, that's been the case since 2008 to 2009. Last year in 2022, business, the activity rebounded in the French automotive sector. It wasn't very apparent in turnover because we were recovering from COVID, and for most projects, not all of them, but I'd say 60% to 70% of the projects that did start in this period, were mostly done offshore, so a great spike in Morocco. It was partially outsourced. For the 3rd quarter of 2022, I'm not gonna go into too much details. This is concerning our clients, but a couple of projects were launched. For the first semester, the French. Morocco did continue its growth. Most of the projects were here, done here in France. For the rates, there were increases. For one of the two, we did get a price increase. It's not the case for everyone, but you need to keep in mind that for Alten, in the rest of the more and more projects that is sold, are sold as work package. We have prices per engineer categories, seniority level. In France, on top of that, we have the training, which isn't the case on the international level. This allows us to build our pricing list and to build these work package offers. When we do operate in work packages, the client is gonna come with their needs. We're gonna build a team with maybe 10 people. Some people from Morocco, India, et cetera. We're gonna use these rates to. We use this to give a pricing for the client. We don't do this person by person. When we're competing with others, which happens all the time, they also offer a price. If you wanna win, if you wanna get the projects, you need to have a product that is suited to the client's needs, and it has to be competitive in regards to pricing. When you have competitors where you see some that are bringing their prices further down, that's something I have to play with. We're not on a B2C logic where we can raise the prices. That's not how it works anymore for most of our business. It's for us then to be smart enough to build something that makes sense and that is suitable to the client. If we increase our prices by 10% on a work package, we're pretty sure that there are gonna be competitors that won't increase prices or maybe 2% or 3%. It's not as mechanically simple as a revision of our prices. There's no major impact on the gross margin. No major impact to be expected. We'll see at the end of the year how it's gonna go, 'cause there's gonna be rate adjustments for the rest of the year, and we're gonna see how the salaries are gonna evolve. I don't know what's gonna happen for 2023. What's sure is that the market, the job market is breathing again, there are salary restructures, changes in salary requirements, but it is calming down. Precision on outlooks, you talked about a two-digit growth. It's yes, it's organic. Published. I can't anticipate the acquisitions to come, so giving indications on what we're seeing today, so it's always is organic. Okay. Thank you very much. Congratulations for the, for this fantastic quarter. Bruno is my name. Actually, I had two little points here to mention in so far as M&A and given the macro developments. Do you have perhaps some more numerous cases popping up and perhaps lesser pressure over the prices? The second element in so far as oil and gas is concerned and the contract deliveries. Now, engineers that are now reaching project termination dates, are they gonna be actually remaining in the energy sector or redeployed in other sectors? If so, which sectors, in so far as M&As are concerned? Not only are there more vendor flows than last year or the year before, but prices right now are holding out against the situation pretty well, actually, quite consistent in the deal we signed with a company that was quite big, a gate company. The company was interestingly positioned. It was an Indo-American company with a model representing 40%-50% externalized R&D in the U.S. This was acquired by the other finalist. He accepted to pay cash. We accepted to pay the price with including earn-out and on the basis of ambitious objectives. The tax rate was amounting to tens of millions of EUR. We're somewhat gobsmacked, but that was a market reality. We could sign contracts whereby VDD could be done on retired people. 15 times EBIT was the vendor's objective. This gives you a good idea of the market today. There's a major paradox. The non-listed market is more expensive than the rated market. Well, whereas the credit situation is more difficult, but this has no impact on the prices. The M&A in so far as France is concerned is as usual. Things have not changed versus the last two years. Let's talk about oil and gas. Most engineers that are working on those activities. Well, we got a few of them in France because there's little oil and gas business in France. What else is new? Most of them are working outside of France, and they're working on work site equivalent contracts. In other words, when projects terminate, either we get another project popping up or the contract just terminates it. Okay. Okay, thank you, Bruno. No problem. Good evening, Bruno. Laurent here on the phone. I got several items I'd like to talk to you about. The first one. I know. Is the price negotiation transfer terminated in 2023 and the tier 1, what this represents on turnover? It's not fully finalized. It is finalized among customers and in time and material businesses. I cannot really tell you what it represents because of those mixed parameters in terms of turnover. Well, anyway, what I can see here, what we gauge today, the price remuneration ratio, this is the only way we can see whether the situation is consistent and so far as prices and resource costs. Price increases have the impact on turnover. The mix evolution, the supply offer and HR mix evolution can perhaps give us some information. Otherwise, it's very complicated when you have a look at the sales price developments, they tend to level off because with offshore developments, the average price goes down, obviously. Furthermore, we also have resource costs that are lesser in India and Morocco. It's really, you know, answering the question is mission impossible. I'd like to get back to the item. You were saying that if a headcount levels off or stabilizes, excluding the price effect, if memory serves me right, you have the on-site or field headcount 2%-3% now with respect to 3 months ago. Do we have a slight peak effect? Even though if the average Q2, Q3, Q4 headcount were not to move, let's have a look at the contribution of each country to the turnover figure. For example, we lost in the U.S. Why? Because average sales prices were extremely high and organic growth, no. We got mixed effect. As a result, turnover is now being stymied by prices, not because prices are not going up. No, no, because turnover just does not go up enough because offshore headcount in Southern Europe, Spain, Italy, Portugal, the very strong growth rates. The Asian portion, Asia Pacific, 8%. Contribution should go down because it's the other way around. Sales prices are lower. In those countries where sales prices are really that high. We got the U.S., Canada. Growth is about 7% lower than the group growth. Germany. Well, 110,000 per people, that's the ratio in the Benelux. About 100,000 per people. Switzerland actually is less significant. All of the geographical zones are rather revolving around the group's average or below average. This has some sway over turnover development. Actually, let's talk about the budget. Now, what are your hypotheses? More recruitment in Q2? I'm sorry. Yeah. We actually took on annual growth hypotheses. We did not consider that we're just going to come to a grinding halt. The growth rates were defined on the basis of the objectives and business rates going down was also another hypothesis versus last year. Business rates going down that could represent up to 1.1 turnover percentage point. Okay, I understand. I had a question on M&A because today you can have a scope, a neutral scope effect. In your M&A pipeline, do you have significant deals in terms of size or we're just back to EUR 10 million-EUR 20 million deals? For the time being, all the deals are about revolving around that size, those sizes. The most important deals right now are under negotiation. We still haven't started the new deal phase because we have no LOIs. I mean, those, well, are more important in size. Right now, insofar as M&As are concerned, we're talking about bolt-on acquisitions more than anything else. The impact, the M&A impact throughout the year by the time you close is very low. Yes, absolutely. It's going to be offsetting C Prime. Well, it's we're getting close to offsetting it. Yeah, we're not that far away. I'm making an aside on the deviation on current and constant figures because we have quite a number of acquisitions that offset the withdrawal of C Prime. Perhaps you'll have 1-2 points at the end of the year on M&A, but it's not going to be as beefed out as the previous years. Yes, absolutely. With EUR 150 million turnover. The last point, I was actually quite positively baffled by the growth in the financial sector. Thought that a few weeks ago, your message was perhaps about stability, not France, but globally. This positive message, where does it come from? Where does it stem from? Well, the vertical is not clobbered in France. In France, well, business perhaps is zero plus, but you also have other geographical areas in Southern Europe, for example, in Canada, where things really worked out quite well. That's the reason we need to scrutinize the sector from the whole sector. There are sector more boring than others, depending on the geographical zone and that boring sector in terms of services. I mean, what are those sectors? Could you describe them? Construction assistance, support. Cloud. Digital. Internal process, digitalization processes in the banking sector. Okay, perfect. Congratulations to that on this very good performance level early this year. No problem, Laurent. Hello. Good evening. It is my name. I would like to get back to the anticipated two-figure organic growth for this year. I believe that this year is marked by a slightly negative impact. Could you tell us about. Well, the day related impact and perhaps talk about this impact in the various quarters. In the Q1, there was a slightly positive impact that we had 1 additional day. The other, the second quarter, there's like 1 day less. Well, it depends. I'll give you the exact information. At the group level, you got France in the group. France, versus last year's less 2 days less. We had it 252 days. We're now at 251 days, minus 1 in the first half, in H1 and minus 1 in H2. At the group level, minus 1 workday. Well, they're not worth the same whether you're in China, India, the United States. I'm not going to get into the nitty-gritty for each one of the countries. Well, in some countries. Well, it depends on the states and the number of hours. 248 days this year, and last year, 249 days. 248 point something. Generally speaking, we're going to be losing a little over 1 day, but not 2 days. On a European scope, 1 workday is roughly speaking 1% turnover. Of course, you have to weigh this on the basis of the geographical zone and the office because, well, anyway. Generally speaking, it works pretty well. That's 0.6% EBIT. 0.6%-0.7%, depending on the company's structure. Rather 0.7%, closer to 0.7% than 0.6%. Those are the rules. Thank you. Bruno, Frédéric, I'm sorry. I got 2 questions. I'm gonna make it snappy. Forex is the 1st question. The impact of Forex in Q4, very positive. Q1, it is negative. Is this related to we got less euro-dollar exposure than before because of C Prime's withdrawal and then a negative impact of, and so forth, the Chinese and Indian currencies? Absolutely, yes. You're dead right on that one. In France, and the points listed out with the slowdowns in Q1, you mentioned France and the banking sector. In the French landscape, we have a feeling that in some sectors, such as the aeronautics, they were pretty strong, plus 450 recruitments. My question is, do you think that France that has already paced up in Q1 2025 versus Q4 2022, can we still pace up in the following quarters? You mean, pace up, you know, Q2 above 12% in France? Is that what you're saying? No, of course not. Okay. Because of the day related effects and impacts, we're gonna be witnessing some slowdown. Okay. Thank you very much. No problem, Frédéric. Well, listen, if you have no questions, I wish you. Oh, perhaps. Yes, you got a question in English. I'm not going to ask the question, but the interpreters. Well, the person can ask the question in English. Everybody understands. Hello, Bruno. This is Louis from BNP Paribas. Thank you for taking my question. Just two quick ones. In your remarks, you're anticipating slowing growth this year. How has the outlook changed since you entered this year? Just want to understand in the conversations with your clients, are you kind of seeing clients becoming more nervous spending or just taking a bit longer on decision cycles? What kind of visibility do you have into your pipeline? Finally, I'm not sure if this was mentioned, but what's the utilization rate for Q1? Thank you. The utilization rate in Q1 is 91.7%, and I said that it had gone back to the normative level, the pre-COVID normative level, which we had experienced in Q1 2018 and Q1 2019. Now growth. Now, just to answer the question on growth. Growth will necessarily be lower in terms of rate for two different reasons. The first reason, since we generated a lot of growth in the previous years. In relative values, Well, the growth rate is gonna be slowing down. Now, the reason number two, Well, in terms of R&D budget, growth is closely linked to two factors. The first one is the development of R&D budgets, and factor number two is the externalization rate of research and development. The externalization rate goes up on a regular basis, but very slowly. Surely, but slowly. There's no significant increase in this externalization rate. This cannot be offsetting the volume effect. Number two, the budget. If we factor in the fact that the our customers increased their R&D budget by 15%-20% in the last two years, of course, there was a COVID offset factor which we need to factor in, and growth rates in the last few years were atypical by definition. Once we set those aside, our clients invested quite massively, and they keep investing as massively. If they keep increasing their R&D budgets, the top line needs to blow it up because top line is has an important impact on the customers, even though there might be very important challenges in all the other industries or stakes. If they maintain their investment levels, as in 2022, or it's gonna be increasing slightly, then the growth rate is gonna go down. In the meantime, they'll have increased their R&D budgets. This is something we can see among some customers, because I mentioned the German automotive sector, which represents a good example, which increased its budgets quite significantly in 2021 and 2022, and keeps increasing those budgets versus 2022, but not as much as in the two previous years. We need to expect a slowdown in the growth rate increase. It is a little too early to give you more information in 2023 because we are in April. What we know is that our growth rate is gonna be lower than last year's rate. We had already mentioned this last time. Bruno, I saw you didn't give us a date for the consolidation of the acquisitions you mentioned tonight. 1st of July. 1st of July, hopefully. Thank you very much. The questions have been answered. We have no questions left. Well, in that case, if there aren't any other questions, thank you very much for being here. I wish you a very pleasant evening. The next call, which will be the 27th of July, this will be done. This will be for the 1st semester. We'll see if Q2 lives up to its promise, even though we are expecting France to slow down. We believe it will still be a good half year nevertheless. Have a wonderful night. Thank you very much. See you soon.