Earnings Call: H2 2020

Feb 24, 2021

Good morning, ladies and gentlemen. Welcome to the conference Alton twenty twenty Annual Results. Are working with you this morning coordinating the call. Please observe this call is being recorded. I'll give the floor now to Mr. Azulay, Chairman and Chief Executive Officer, who will begin our session this morning. You have the floor, sir. Thank you. Good morning to you one and all. Thank you for taking part in this call Unusual circumstances for the presentation of the 2020 annual results. I hope you're all doing well and that our next meeting will take place in person. We can at least be hopeful that will be the case. During our presentation, I'm going to try to summarize for you all the results for 2020 as reported, also the impact of the COVID crisis on 2021. I'll also talk to you about a vision which is becoming fairly clear today, I. E. Alton Group's overcoming this and recovery for the Alton Group in 2021 resumption of business. These figures were reported to revenue of 2,300,000,000.0 bringing us back to twenty seventeen's revenue figure. Unequal drops, France versus international areas. As you can see internationally, there was much less of an impact on France which jumps by around minus 4.4%, in France minus 20%. Now of course, France, we'll come back to the point later, highly impacted by the strong presence of Alteng Group in aerospace and automotive sectors. Now to talk to you about operating profit, 6.1%. Engineering headcount currently 29,400 engineers, three 33,800 employees overall. We lost since well, pre COVID, post COVID for the year, lost approximately 3,150 engineers. Usually, this figure would be a pretty good reflection of the name change in number of engineers is usually showing of change in alter group's potential. Usually, all of our engineers are working on projects, whether you're talking about work packages or technical assistance. Whereas here, we have to sort of tally this up differently. Their engineers, many of them were at extra bench, additional contracts due to the COVID crisis with or without subsidy. Another important point to observe is to take a look at how many engineers are currently working on projects today. Overall, as you see, we lost 3,150 engineers through one five zero. Currently, we've lost approximately well, the impact of the crisis will have been around 4,000 to 500 projects. So about 1,000 engineers are an extra bench and the 4,500 projects that were lost, so to speak, are mainly in aerospace and automotive sectors. We'll come back to the point later. And we can say henceforth that we've managed to make up for this through acquisitions underway or achieved the objective before the summertime to go beyond the situation where we stood at 2019 and we've almost achieved this. So those are the summary overview of our figures. Let's move on to slide number five, your map of the world, to take a look at the impact by geography that the COVID crisis has had. As I mentioned earlier, the impact is mainly to be seen in France where we lost more than 2,000 engineers, 2,290 engineers. And also, I think a similar point regarding Germany. It doesn't come as any surprise. That's where you find most of Airbus activities and aerospace activities more broadly. In Toulouse, Nantes, and Hamburg in Germany. Then automotive sector, a drop, but not due to COVID. We reduced well before starting in September 2019, before COVID, and the down continued during COVID. These are the main explanations for the changes that you see above and beyond other areas of change. All these events, well, let's move on to slide on page six. We've considered shifting the Alton Group's positioning and speeding it up. There are a couple of types of activities. This is how we categorize these at Alton. Blue engineering industry, industrial areas, design engineering, and the outsourced r and d engineering, manufacturing engineering, and technical support engineering. These are the things in the blue v. These are specific engineering areas where all 10 is present around 70% of us is design engineering. Five or 6% would be manufacturing engineering, making up all in approximately 75%. We say overall 70% now due to the COVID crisis and are refocusing to the right hand side of the screen in yellow. Here, we're not talking about r and d departments or production as such, but rather we're talking about working with IT departments at our various client premises regardless of activity, IT and IS departments. They need software, they need admin software, CRM, customer management software, so on and so forth. Infra, network, cloud, data, data management, so on and so forth. So this is a different target of clients. Here we've got, of course, the ESNs that are trying to capture big BPO software packages and full full CRM packages and so forth. We at Elton, as an engineering and design company, we try to capture what I'm showing is the central rectangle here, which is IS software and applications development, Infracloud, these are very technical areas that fit perfectly with our engineers that we have on board. Strategically, this has been our decision. The yellow area, we're carefully targeting design, infra, and cloud network as well as security. This should make up around 30% of the group which is far from the case in many countries currently. In France, the percentage is well below around 15%. In Germany, it's almost 0%. Sweden around 0%. In other countries we've already reached 30%, even more. So we're making efforts in this yellow area here which may mean we'll start competing with some other ASN companies. Everything we do, specific developments, data, and so forth isn't necessarily something where there's competition. CAP, GEMINI, ATOS and others aren't necessarily in this area. BPOs of six years, turnkey with turnkey support admin and so forth. So I hope that sounds right. Regardless, we're moving more into the yellow area here including acquisitions and including in France. Takeaway point is Ratio Alton. It's first and foremost a company of engineering. Over 70% of us is in engineering, 30% in IS and IT design. And even in the blue area, and of course, the yellow area, mainly, we're focusing on digital. So mechanical and electronics aspect, even under engineering as such, are very much in a minority. Under blue engineering, here, our focus is really mainly systems engineering, real time embedded systems for control and piloting, so digital. Now on to page seven gives you a breakdown of how our activity has evolved. Of course, there are two industries that were hard hit. As you can see here, aerospace, civil, aeronautics, and automotive. Broadly, these two sectors alone used to make up for this group around 35% pre COVID. Now they only make up twenty nine percent of our group. These are two sectors. I'm not talking of the entire aerospace and defense systems. Civilian aeronautics is a subset, 12.1%. Ditto. Regarding land and and navy transport, only automotive has gone down as much, which is also to say, we're gradually, slowly, but surely, I very much hope, as I said, before the summertime or even well before, We intend to reach, again, the situation of December 2019. The pictorial breakdown of l ten will change, however. We'll have a lot more business activity in other sectors such as life sciences, energy, rail, and naval, which are doing well. Also, bank and finance services, telecommunications. Diversification will be much fuller and much better distributed. That's a real strength of the Alten Group. We've seen this ever since the Internet bubble crisis in 02/2003 that impacted many sectors, telecommunications and so forth. The February mainly impacted IT services and finance as well as automotive. Twenty twelve automotive as well. There was a crisis to a lesser degree. But broadly, we can say that thanks to this multisectorial footprint that we are very sound and a very sound sustainable footing. That's not the only aspect, though. Our engineering positioning, our basic systematic refusal to work on other areas such as high level consulting, that's another business line, or providing levels one or two technical support which aren't in line with the population of employees we manage with engineers between zero and ten years experience. All of this helps Altair continue to be a highly sustainable, long lasting company. Let's move on to slides eight and following. Just a quick comment on the various sectors as such, going through them one by one. Page eight. To repeat, automotive was very hard hit and started well before the COVID health crisis. There was restructuring cost cutting as this often happens before resumption in business. We saw the rollout of new strategies by the car makers, decarbonization, electrification of vehicles and so forth. So we're expecting a resumption recovery at best in June and at the latest toward the end of the year, automotive recovery. We're already starting to see the preliminary signs of that. We've reached a trough, and we're very hopeful. We very much believe a good resumption recovery should take place before the end of the year. Now I'll move on to rail and naval. There are lots of new projects that were begun. Submarines to be exported by the navy. Modernization of various other vessels. This was something not very developed here at pace and we're also seeing developments in new countries such as Australia. Let's move on to slide page number nine, aerospace and space. Civil aerospace, unfortunately, I'd hoped of course that we did have some hope. There might be a recovery before the end of the year but you're also familiar with the announcements by Airbus and Boeing's difficulties. Our basic assumption here is we don't expect any recovery in this area before 2022 and even 2023. Nevertheless, we've reached a low point now. We're seeing a very, very slight uptick, nonsignificant. So we're not concerned. We've reached a trough. It can only go up from here. There's a great deal of pent up potential for growth in a couple years' time. Not 2021 and maybe not September 2022 either. To onto defense and security and space. These three sectors which suffered a few years back then grew in market share and we're gonna see that our clients are growing in this area. This is a good thing. It offsets difficulties in aerospace more specifically. Move on to page 10 which is energy first of all. Energy, we're very present firstly regarding oil and gas within and without engineering offices, locally platforms, supervision, platform architecture to operate to the engineers local. There was a slight dip here weakened do drops in oil prices. Regarding nuclear, our portion is buoyant. Renovation, security, and plant dismantling, these are opportunities for new projects. A lot remains undone. We're far from having to tap having tapped into all the potential we can get in the energy sector. Under renewable energy, we're not very present. Distribution and energy transportation were not very present either. So here as well, there's a great deal of potential growth that we can tap into mainly outside of France for the time that we're mainly present in France. Life sciences, our strategy of presence which we began six years ago now, we've got over 8.7% of our revenue in life sciences. We had none previously almost. If you're thinking of pharmaceutical laboratory support, regulatory projects, data processing, this is all a work for engineers. Think of manufacturing as well that requires engineers. We're talking about cutting edge processes as we're familiar with from space work. Now there will be further new projects in this area. There are many emergency projects due to COVID which means this bodes well. We think there's a great deal of potential for growth as well here. Now let's move on to slide page 11. Telecoms. We know that this is an important sector during COVID with and there are also more five g projects. We're active here as well. And infra and network projects, we're active on. Think of all the remote work and so forth people are doing lead to further projects in this area. BSA services public sector, we mentioned these earlier. We could have put this in the yellow rectangle I showed earlier. We're going out and seeking data processing and developing specific software for IT processing and finance, banking, and so forth. We're talking about customer management, customer marketing, the big data focus here, big network focus, real web focus. Here Alton has a position to take, which is about 20% of our revenue and I talked to you about our strategy and we very much intend to move towards 30%. We're going to be seeking further growth here. I hope that gives you a good overview of these various sectors, these various growth drivers for us. The only pink or reddish areas would be civil aeronautics but that won't be forever. Now to talk about our policy for external development, you can see this on this page. Button down the tally of number of engineers would say that we lost around 3,000 and then there's about a thousand engineers that are an additional contract to extra bench more than we usually have. Usually, the occupation rate is 92%, 93% for engineers including people off on training or off on sick leave. We've lost 3,100 engineers and we also lost approximately, well, 4,200 projects due date. There's been a slight improvement since December 2020, around 4,000 projects. We have to we have to find them again, catch up on this, make up for them. We've decided to step up our acquisitions policy, external development policy. You know that, conventionally, we move towards companies that have around 300 employees. We've used this crisis as an opportunity looking afield internationally. It's mainly internationally that we've sought external growth. As you can see, we're talking about around 3,000 engineers under project. All in all, this means we've got to catch up for h 01/2021 of around 3,000 project 1,000 projects. Sorry. One. We've almost already achieved that based on ongoing discussions. The 3,000 we bought in 2020 and then the last 20, February 21, as you can see, are mainly located outside of France, Europe, The US, and Asia. The next will be mainly in The US and Asia. And in 2021, a French company to bolster IT services. We divested two companies. One of them included only technicians, infra network business for telco operators. Also another company which was in levels tier one and two support, we had a relationship with a partner that's more positioned in tier one and tier two technical support. So we divested the company to them, a company of technicians that provided infra network tech support. We also shut down a company in China that was very focused on manufacturing and prototyping. If you think back, might remember a company we used to have in France way back when, it looked like them, resembled them. We decided to divest this one as well because it's not in line with Altan's positioning, this prototyping. So, of course, this didn't help out in the figures but no problem. It needed to be done. So let's take away a couple of figures or over a couple. We lost 3,000 engineers. We lost to date 4,000 projects. We've made up for almost all of them by a small organic assumption plus external development, 3,000 people. We've got about a thousand more engineers extra benched than usual. And as I said, it's highly likely we'll have resolved all of this before the summertime. Now, page number 13, shareholder base hasn't changed much. The free share system is available to employees so they can have all 10 shares. These shares are mainly for the 200 top managers of the Altium Group. There you have it. I've finished with the first portion of our presentation. I'd like to hand over now to Bruno. Bruno Benoliel, who will be giving you a better a more of a rundown of the specific figures in 2021. Good morning. So following up on what Simon just explained on Slide 15, as per usual, we've depicted the change in revenue and this time on the same slide, engineer headcount within the group. So it's more in number of projects that we must look at the numbers today than the numbers of engineers. Alten has lost 3,100 engineers between 2019 and 2020 owing to the crisis. Excluding acquisitions, in fact, we've lost about 3,500 engineers, the bulk in France, just over 2,000 and about 1,478 precisely outside France. Altene, is back at the end of 2020 to its end of the level twenty eighteen level, and we're kicking off, the year 2021 with, two and a half years of loss of activity, if I can put it that way, owing to the COVID crisis, loss of activity that's, being caught up both because we're counting on a recovery in organic growth. We're hoping for that as of h two, and the acquisition policy remains very dynamic. International, as you can see today, above 60% of revenue owing. Unfortunately, the crisis led France to lose more activity than internationally and the strengthening of acquisition on the international footprint. Slide 16. Now what you see is overall for the group, a loss of business in H1 that continued in H2, organic decrease of 12.9%, in line with the 13% that we anticipated back in the summer, an FX impact relatively low, essentially due to the rise in the euro at the 2020 versus The US and Canadian dollars, pound sterling also and Indian rupee. Activity level that these numbers reflect that dropped to 77%. Let me remind you in Q2 twenty twenty that began to pick up in H2 because it was of 80% in Q3 and 86.5% in Q4. So reflecting 92% of all 10 across areas of activity, essentially to lose 2020 very average activity rate of 84%, 0.6%, where it was at 92.1% in 2019. Just a point because the question is sometimes asked the activity rate includes the furloughed engineers because they are, in fact, engineers without activities. Slide 17 in France business, bigger organic drop than the group average because the organic, drop is minus 19.5%, as we said, by automotive and aerospace. Both sectors in France represent what they represented at group level, 35% of revenue in 2019. Today, contribution to revenue is close to 25%. Conversely, in France, energy represents 15% of France energies. Rail and naval activity, just over 7% overall in France. Life sciences, just over 10%, and telecoms, 10% of business areas that are still growing. Slide 18, international. I'll, detail by country. At a later slide, international is, of course, impacted by the crisis as you see in the figures less than in France because organic decreased minus 7.9%, very mixed bag. Decrease offset 50% by acquisitions achieved essentially international in 2020. Slide 19, which shows you as with every sequential trend in Altane's growth quarter by quarter. This year, slide depicts really the severity of the crisis in H2 France minus 28% business that continued against expectations to decline in Q3 slightly before beginning to pick up again across geographies as we can see in Q4. This year, an additional business day in 2020 versus 2019, but the marginal impact in terms of the crisis that accounted for point 6% of revenue. Slide '20, a more detailed view by geography. You'll find in the annexes an analysis of business growth sequentially quarter by quarter to give you gives a more dynamic approach of how the year unfolded, excluding France because we've already discussed France. International, if the average is minus 79%, see by geography, there's a big deviation. North America, US, in particular, representing over 80% of North America. The main sectors, automotive, oil and gas, and finance, rebounded slightly in q four after a strong decline in q two and three for lesser drop in the final quarter, average drop of 9% full year. Canada held up better, even grew 13% in '20, thanks to the service sector, grew over 15% accounting for over 50% of the business in Canada. Telecom's up sharply also as well as life sciences. Germany, where aero auto activities overrepresented represented in 202070% of German revenue. That's where activity dropped the most significantly, minus 25% in Germany, having reached a minus 28% during the year. Both sectors are struggling, of course, some diversification initiated in Germany a couple of years back beginning to bear fruit. All the other sectors, even if they represent minority share of revenue, all the other sectors are growing. Scandinavia business is down 20% on average like for like. Finland representing a quarter of Scandinavian revenue down only 7% essentially in industrial equipment. Sector Sweden, the decrease is the order of 28% constant ForEx because the sharp drop in the auto and truck sector representing one third in local revenue, down over 40%. Benelux business down slightly 3% decrease. Belgium business down 10% but stabilized in q four with service activity that dropped surprisingly offset by a strong growth in the pharma sector. Netherlands activity up 3%, thanks to semiconductors and electronics. Spain Spain that held up well during the first lockdown decreased in q four. Probably the only country that was slightly bucking the trend of the others at the end of the year because of the succession of lockdowns. Asia Pacific that encountered difficulties, that's where the crisis started back in early twenty. The scope grew organically by 6.5% with growth that leveled off in Q4. Growth driven by India where local activity grew 10%, representing over €40,000,000. China slightly down owing to auto accounts, but activity stabilized. Italy, that's truly an exception in the sector. Panorama to country up 12% performance that need to be underscored in this crisis with a country where all sectors are up including the auto, LCA. UK, lastly, activity down 5%. In fact, activity that grew in H1 dropped sharply in Qs two and three and up again in Q4 activity, heavily impacted by an aero and auto account that represent 40% of the total UK revenue, countries that posted very disparate performance levels and in fact, quite faithfully reflect the exposure of each country to the auto and aerospace sector. Slide 21 now, the income statement for this year. So no surprise, operating profit on activity down, primarily impacted by the drop in activity in the group that had recourse to partial unemployment furloughs. Altus has furloughed engineers that extra bench over and above the normative extra bench of the group that is we consider that must be furloughed, and she is that extra bench owing to the crisis. So the, Altan always finances its extra bench normative rate, and in fact, slightly beyond that to, answer questions that was raised as to be able to use the furlough scheme to, cushion to dampen the margin. That's the case, but it's the case only for what we call the extra bench people who are non normatively extra bench. Aptend, of course, resorted to furlough schemes in all countries where it was possible, France, Germany, essentially, but also Belgium, Italy, Spain. Remaining cost is never zero. It's at the minimum 20% for FOLLO. France and Germany can rise to 70% like in Sweden. So obviously, it had a dampening effect on the accounts, but it it substantially decreased the total gross margin. We have costs linked to local business software that owing to that were impacted. The fundamentals of gross margin at Alten were preserved. That is the cost to salary ratio remained unchanged. Alten took measures in the face of the crisis. We almost doubled the recruitment during Q2s two and three, heavily reduced SG and A level at the 2019. We planned EUR 2,900,000,000.0 revenue in 2020 to return to a far more reduced cost base and put in place a headcount reduction plan, layoff plans that were quite not that significant, but in The US, Sweden, Germany, UK, and in Spain. Lastly, we had to support additional costs linked to the the health crisis. The protective equipment, that was 4,000,000, the price tag on that. And our research tag credit in 2020 is lower than that in 2019 because of the lower level of activity and a smaller number of projects eligible to this tax credit. So overall, if we are to model the change in the margin between 2019 and 2020, gross margin dipped by 2.7 points. SG and A rose 100 bps, 20 points in relative value owing to the drop in revenue, 0.2% coming from the protective measure and the research tax credit down 10 bps, 0.1% of revenue. So our operating margin goes from 9.9% of revenue in 2019 to 6.1% in 2020. Share based payments, 7,900,000.0. Non recurring profit, 15,300,000, essentially restructuring costs in the country cited for EUR 7,000,000. Acquisition fees, about €6,000,000 fees. Those are the fees paid to the m and a companies or due diligence and tax adjustment costs abroad for just over €2,000,000. As a consequence, net income, one one nine million. That's 5% Financial income, 14,000,000. Corporate tax, 26.9. And company's consolidated equity, 1.6. Net income group share, million, that's 4.2% of revenue. Just a word on the tax rate, effective tax rate, 25.2 this year owing to the capital gains on divestments tax at a lower rate, the effective normative tax rate of the order of 28%. Slide 22, the detailed analysis of the financial income as you can see on the slide. Cost of net financial day, euros 500,000.0. Negligible interest on leasing contracts, IFRS 16, about €2,000,000 Cost of financial net debt, that's essentially to the capital gains on divestments. We divested the two small companies that C MORM, a minority stake that we also had in another company. And the exchange result, negative 4.6, essentially ForEx positions on the receivables in dollars. By geography, slide 23, you can see that France was heavily impacted by the crisis, 35% revenue in auto and aero activity rate, 78% full year, far lower than the average activity rate. It was up it was 92% last year. Type of furlough, the gross margin was actually significantly impacted, down five points versus twenty nineteen. We, of course, implemented SG and A reduction measures to reduce the cost in absolute terms versus nine terms, so an SGA rate up two ten bps in 2020 and COVID spend accounted for 40 bps in France, whereas they're very low internationally. So all in all, operating margin down from 11% to 3.6%. International, like the activity results are very mixed. Of course, furlough schemes were implemented in the country cited Germany, which is the most impacted by the crisis. It's posting a loss in 2020. Scandinavian spider problems encountered by Sweden, it maintains its EBIT above 6%. UK, Luxembourg, Netherlands, and Belgium, we managed to maintain an ROA above 10%. Southern Europe, Spain delivered a performance in the order of 5%, whereas Italy, in spite of all the good results, maintained operating income, operating profit about 10%. Lastly, North America, operating profit is down. No surprise. But nevertheless, above 5%, whereas in aspect where the situation improved. At the end of the day, the operating profit on activity is close to 9%. So international, you see that the numbers, the as as mixed as those on the growth front and overall, excluding Germany, our operating profit remains satisfactory, very close to its 2019. With Germany, it drops to 7.7% in 2020. In fact, you see that international, that's where the recurring costs are the most significant. That's where we had the acquisitions, and we implemented the restructuring plans mentioned previously. Balance sheet structure, I won't dwell too much on that paradoxically. The balance sheet is strengthened, in fact, after the crisis assets, the noncurrent assets, just over half the balance sheet, essentially goodwill, and the rights of use under IFRS 16, part of the noncurrent assets, but of course, change with the leases current assets, 40% of the total, 80% made up of customer receivables, liabilities, equity above half the total balance sheet. Important cash this year, over €200,000,000. Gearing comes in at minus 16%. Cash flow, net cash, Alton generated a 186.7, but 320% last year restated prior IFRS 16 provisions for buildings associated with the leases that we hold, the real cash flow that represents stands at 136,200,000.0 that's $5.80 of revenue. It was $272,000,000 last year. That 10.4% of the revenue is down half, which is normal because it trends in parallel with the reduction in operating profit. Conversely, our working capital change is EUR 168,000,000, a reduction due to the receivables. Diminution result of organic growth, 159,000,000 at DSO. DSO down six days versus December because it was eighty six days versus ninety two days last year, thanks to France primarily. So the improved in DSO generated EUR 43,000,000 additional cash. Drop in tax debt is EUR 25,000,000, and we have the social receivable EUR 6,200,000.0 for fellows, cross group. A word on decrease in DSO June. We noted slight increase in DSO, that's normal because of the seasonal impact. And we also anticipated an increase of DSO six days at the 2020 owing to the initiatives. Certain customers, some announced that they would defer payments. So in actual fact, in December, November, December, big clients in France paid their invoices on time or even for some slightly ahead of time. So change in behavior that was totally unexpected. We don't know whether that is set to continue or not and may reflect a desire to have a WCR in these big that is more attractive in '21. Be that as it may, we were paid, so we cash in on our DSO that last six days. I don't know if in 'twenty one, we'll be able to replicate that eighty six day DSO number, even if, of course, the cash in teams are really focused on that target after including the tax paid, 50,000,000 CapEx, 12,000,000, 0.5% lower this year than last year. IFRS says to EUR 49,000,000 of free cash flow, 2 and 46,800,000.0, that's EUR 10,600,000.0 of revenue, above 7%, the normative 6% for an EBITDA 10% that I've always explained to you, and it's higher this time owing to the decrease. Change in scope represented cash out of €122,200,000 in 2020 includes, of course, the amounts paid for acquisitions achieved in 2020, the integration of the treasury of companies acquired and the earn outs for earlier years as well as the cash in on the divestment of company's other financial flow, 3,900,000.0 essentially ForEx impact. And as Alten hasn't didn't pay a dividend in '20 net, treasury comes in €196,000,000 a gearing of minus sixteen and one. Just a clarification here, since we don't book in treasury the earn outs, but they represent at the close of 2020 an amount of EUR72 million, no surprise, more than doubled versus last year owing to the acquisition dynamic at a EUR72 million, five to EUR7 million will be dispersed in 'twenty one, the balance, the bulk beyond 'twenty one. Slide 26 shows the free cash flow by half versus 2019. I won't dwell on that. Slide 27, just the analysis of the balance sheet, income statement, cash flow statement of IO. That really is very time consuming in terms of tracking. Doesn't really enlighten much on the L10 accounts. I mean, makes them even more opaque, find, but the impact is almost zero on the accounts in the income statement and also in terms of the financing. IFRS lease debts are not included in the net cash position. They're excluded. They don't represent an economic reality. They account and €70,200,000 at the end of the year. Essentially, real estate, 87%. So takeaway on the activities in 2020 result all countries exposed to auto and aerospace sectors representing from 34% in 'nineteen, that's dropped to 25% revenue share in 2021, were heavily impacted both in their activity and their earnings. The resumption in activity is very gradual, started in q four and is continuing because we're seeing in q one twenty one that Alton has preserved its gross margin fundamentals. Fundamentals. That measures implement to limit the consequences of the health crowd on gross margin effective as of H2. H2 margin comes in better. They expect it identical to H1 since there are more business days that contributed to improving the margin structurally between H2, H1, but we anticipated a margin down, which didn't materialize. Free cash flow sharply up despite a decrease in profitability as a result of lower activity combined with improved DSO. There you have it. I'll take your questions after the presentation. Back to Simon, who'll discuss the growth strategy for Alton. Thank you, Bruno. We've made most of the points. Let me just recall the following. On page 13, we can see the impact of the crisis our strategy isn't a marketing strategy. It's a strategy of doing away with the 2020 losses due to COVID before the summertime. We may well be in a better position afterwards. Extra bench should be around 1,100 people, a little bit higher in December. We hope to achieve this before the summertime to bring AGNA back to normative levels. It would be good if 2020 were aside from operating profit which necessarily would be lower, but in terms of business activity, it were pretty much a reflection of the volumes that we had in the situation where we stood December 2019 or even better than that. Thanks to our being able to offset through external growth, fortunately, it's gone well. We've ended up where we wanted to be in the countries we wanted to be. Civil aerospace, as I said, has substantial potential for growth in 2022. We're not worried about it today. This couldn't go lower than a trough. Automotive will also see a recovery. Other sectors are very promising. It's up to us to tap into all of this. Currently the group is heading toward more international activity. ALTAN very clearly is an international group. We've got sectorial and geography diversification and this is quite uniform. We have issues to settle in various countries. We're not a critical size record number of engineers and projects And we have to be active in three sectors in each country so that we never jeopardize during this time of crisis in a given country. That's been our strategy and it's always been a win win strategy. The sector is doing well. I mentioned them to you, defense space, telecoms, life sciences, energy and services, banking, etcetera. Currently, we're in a good position to continue moving in these areas. We're in very good position. The competition in many of these sectors isn't yet consolidated and isn't yet organized. Now, move on to page 31. Of course, what's enabled us to achieve these results is first and foremost, Halton Group's excellent financial health, our balance sheet, our ability to have organic growth, plus giving us financial reserves so that we could buy what we wanted. We've always had excess cash and RWCR has always been very good. If you tally up everything, net profits in 2020, 2021, we will see the acquisitions we do will be in line with the net result that's generated. This will not in any way reduce our cash or our equity or in any way worsen our situation in our balance sheet, which is same more than ever before. We're remaining faithful to our strategy, compliant with our strategy. Sometimes we were criticized about acquisitions and so forth. We are who we are. This crisis makes us want to continue being who we are, that we're stepping up with strong growth. We continue organizing ourselves the way we do. 2022 therefore will be a year much better than the pre crisis time. We look at number of engineers, number of projects, number of contracts that we bring on board and a 21 for 2022. I very much hope this will be higher than it was the case in 2019. Three important subjects. I'll use the opportunity to mention these before wrapping up. Often I'm asked, is the business of engineering going to go off shore in a big way to India or elsewhere? Currently our off shore proportion is approximately 5%. That's around 2,500 engineers working offshore for countries. India, Morocco and Romania, that's the bulk of them. There may be other countries offshore in the future in Asia and elsewhere in Europe. But yes, we will offshore somewhat more, but it won't be a major shift. Maybe we'll double offshoring in three years going to 5,000 or 6,000 people, which will still continue to be reasonable in a group that will have gotten bigger in the interim. We're ready to rise to all these challenges and customer demands. Our competitors are often looking for this. It may not be as well structured as we are offshore and often not in the area of engineering. That was a parenthetical point just to say that more than ever before, this group is confident. Bolstering its position as a leader in engineering and technology consulting. We're there to hit the ground running. Everything is ready to recover quite significantly after COVID. For us, COVID is pretty much solved already. So thank you very much for your attention. We'll be happy now to field any questions you might have. Bruno and I will answer those questions. Ladies and gentlemen, if you'd like to ask a question, press star one on your key board. Make sure that you unmute while you ask your question. I will tell you so the operator, when you can ask your question, press star 1 for a question. Thank you. We have questions in our queue. The first one from Emmanuel Prad from Givaud du Monde. Go ahead, sir. Yes, hello. A couple of questions. Activity rates, you mentioned. I forgot the figures for each one of this year. What are you thinking in terms of numbers, natural departures, so forth in the various sectors? And now the question. 2021. You gave us some figures for 2021. Normative margin expectations this year. You have to think about what the landing might be. Another question, 2022. Operating profitability. You said gross margin hadn't been worsened due to crisis. Can we hope to reach the normative operating margin by that year? Thank you. Yes, to answer regarding activity rates, first of all, you for those questions. And let me say that those are very good questions. Extra venture activity levels, going beyond 92%, 93% current activity, as I mentioned earlier, hovering around 1,200 people, around 3%. This is very local, mainly four cities. Broadly in Germany, a little bit Munich, automotive. This will be absorbed though when there's recovery in automotive. We're not worried about that. What we're slightly concerned about what's remaining Our concentrations with people in aerospace that we have in Toulouse, in Nantes, and also Hamburg, and to a lesser degree, in Sofia Antipolis. We were highly present. So regarding post Airbus, these are the ones that are furloughed. This is due to the crisis. The others have not been furloughed. So as long as they're covered by a paid furlough, then there's some wait and see on both sides by the company and the engineers. They're not budging. They've received 100% compensation. They've got a mobility clause requiring them to work within France or Germany. This is in their contract. But we're not making use of that contractual possibility for the time being. This is an indirect answer to your question. Point being, if furloughing is halted, could happen actually in the near future. Then we'll ask for mobility. When there's resumption in other cities and other sectors, we'll ask these engineers to please transfer or leave. These will be discussions we have with the labor representatives. They understand full well that an engineer is expected to do that. Now outside of France and Germany, and I'd remind you, there are no layoff plans. They're only very marginal. None at all in France and in Germany. Very, very tiny ones. Outside of France, labor law is sometimes liberal, allowing us to let people off. Sounds cynical, but this is the case in The US and The UK. It's okay. Alright. So things went fairly well. Extrevenge was resolved in that in those countries. So I believe we will have solved this through natural departures, resumption in business, shifts to other sectors bringing engineers to accept to move and shift They wouldn't have to stay at home even with a 100% pay to accept to go outside of the aerospace sector or possibly to another city. That'll solve things. We've already seen this in the past. We've already divided this number by two, so that's on activity three. On to profitability 2022. Yes. Of course, if there's no hiccup, no hitch, we'd like to get near our customary profitability in 2022. Of course, with ExtraBench reduced overhead, that won't be the case in 2021 even though I would repeat before the end of the year will the equivalent activity, even greater activity than in 2019. IDE of revenue. Activity rate will come back to the normative level before the end of the year, even before the end of the summertime. But the impact of 2021, we won't see right away. I'm hoping it's 2022. Everything will depend, of course, on how easily Western companies and countries solve the COVID crisis. And it's possible. Now we're getting fresh and it's behind us. We hope it's not just fresh, As to free cash, Bruno will come in on this point. Bruno. Yes. I've always explained to you free cash flow at Allison with an operating margin of around 10%. Normatively and with no organic growth should be around 6%. Why? Because fairly mechanically, it's equal to net profit when you subtract investments, capital expenditure. I know you're right. Next year's free cash and this year's free cash will depend on our activity business margin. We don't know if today what it will be and the group's ability to resume organic growth, organic growth which will necessarily consume some cash. So, yes, we could be in a situation and we'd like this in 2021 where we've got a change in working capital on WCR, which would be negative or positive depending on how you view it, which would be due to the fact the group is beginning to consume cash because it resumes financing the client. I can't go further than that. It all depends on your working assumption in terms of growth and operating profitability. But, yeah, you can craft a model pretty easily looking at P and L and operating income with an assumption of CapEx of being 0.7% of revenues. You very much. Thank you. Next question comes from Laurent D'Or Kepler Cheuvreux. You have, your line is open. Hi, Simon, Bruno. Several quick ones. First point, I'd like to return to change of the margin h one, h two, and they improved international. There was a business day impact. There are certain geographies that have already structurally improved their margin and contribute in '21 to group improvement as the first point. Second point, could we have the amount of government support or a change between H1, H2 concerns essentially France in terms of margin impact? And lastly, return to the previous question about the furlough scheme, 1,100 engineers today without layoffs, with people leaving, but you'll still have, 700 by the summer. Won't you have to go implement a layoff plan? Is that, weigh a risk on, the change in group margin between, h one, h two this year? Answer, I'll respond to your last point on furlough. Well, from what we see in the markets and from what we see in terms of engineer movements, essentially France to a large extent, to a lesser extent, Germany elsewhere, everything's fine. The geography standpoint, no problems, elsewhere with a few marginal exception back to the normative rates, pretty much across the board, excluding France, Germany, to a lesser extent Sweden. But even in Sweden, things are fine overall. So geographically, the margin will be impacted because it's the main driver for the impact on the margin. The resorption of the 1,100 extra bench engineers that worsens the normative rate of 92, 93% occupancy rate, well, frankly, we believe that that will be resolved before June. It was before the end of the year, but I think that will be resolved. That's what we see coming today. Can't give you more details than that, but I gave the reasons why that will happen. In the previous question, that's to say at some point, engineers will accept to move. And if they don't accept, then they'll be we'll let them go. That I mean, our problem today may surprise you is to compel our business managers to return to an aggressive position on recruitment aside from the, areas, quote unquote, where we were hit by COVID. Aside from those areas, we must revert to recruitment full throttle, and our success criteria is one to always, be ahead of the game in recruitment as we were back in, 2004 and in 2010, and we were approved. Right. There's no reason young engineers, always tough people to attract. Today, we're really trying to boost recruitment and to leverage the crisis to attract engineers of a high level for the geography. I think I've answered both questions. Maybe, Bruno, you could speak to the gross margin and government support for the furlough scheme. Well, maybe on the furlough scheme, today, located France and Germany. That's, where all the engineers concerned are located. Government support in France continuing month by month. The government is extending those today through March in compensation means where it's kind of 20% out of pocket expense. As of April, the out of pocket expenses probably grow to 45% depending on the categories of personnel concerned. But once again, we can't rule out the government decides to extend that over time. Once the decision is taken in France by the government to revert to an ordinary law compensation system. The out of pocket of 45% will last six months because furlough scheme lasts six months. After six months, then companies will have to shoulder the full cost. Today, we'll continue to benefit in France from furlough schemes through the end of the summer at the very least. We'll see for for q four. We'll also see at that point how things will develop for the extra bench. Germany, German governments announced that it would maintain government support for FERZOL to keep skill levels in companies as long as necessary at the minimum through the '21. The out of pocket in Germany, that's about 20%. Have to live with that, but on the face of it, there's no risk of seeing that out of pocket expense increasing between now and the end. Yeah. That's to answer your point. That government support scheme and then a little bit in Belgium. It's really scattered here and there. But as to the margin, h one, h two, well, in July, I announced that we gave a margin guidance slightly above 4% in h H2 because, obviously, we have a half that's hurt by the crisis compared to H1 only one quarter. We took the pendulum effect into account this week, etcetera, one term, H2, you'll find that in the account differential number of business days between H1, H2 last year. We had about the same differential. There was an impact on the January '68. So we were at full capacity with an activity rate of 92%. We can't, transpose that pendulum effect, H one, H identically, but 1%, but that was factored into the guidance we gave. That improved the margin with the disclosure that we would exceed 5% by five as we move to the end of the year. The fact that cost reductions implemented went swiftly, were rolled out faster anticipated, and SG and A rate down, as I indicated, with SG and A rate in absolute terms identical to that of 'nineteen, in some places lower, whereas projected high also. A reduction in the extra bench swifter than expected. After the summer, Q3 was a good quarter when activity continued to decrease and there were more people leaving than expected, so that had an impact. Research tax credit, slightly better than expected also because it was lower in H1 than in H2. All that put together, and then there's some mix effects that account for the fact that reasons why we have an H2 two margin on a par with h one. That wasn't our initial scenario back in last last July. Thanks. For the geographies, I've given you the orders of magnitude for 2020. There'll be no what's the challenge today? Increase the margin in Spain because that's a low gross margin in Spain, so the margin is very sensitive. Breakeven is higher. As a consequence, margin sensitivity rate, very high compared to the activity rate. We had a layoff plant activity rates in our normative. Germany, where they're question mark today, and France, but the rest or the other geographies have returned, give or take, to their precrisis level with the exception of Sweden that still impacted even if we adjusted the activity resources, activity rate back above 90%, maybe US, where we have a profit level that's slightly lower. To to try, Laurent, to give you a number, you can imagine that the annual price, all costs included payroll for an engineer in France or Germany employee employer costs, €50,000 on an annual basis. To give you a round number, we have an average subsidy rate of around 70%. So remains when we had 2,000 for four months that gave an amount covered 70%. Now we have a thousand covered. We have a thousand on extra bench. That's going to decrease to 60, possibly 40%, gives you an idea of the support we'll be getting at 21. We're not really counting. It's not a problem for us for Alton. That's not an issue. It's it's the extra bench should no longer exist. We'll resolve it, not financially, but commercially. Thank you. That's very clear. Thank you. Thank you. The next question from Mr. Gregor Amiras. Go ahead, sir. Hello, good morning. I'd like to come back to the various parameters that you take into account. Operating margin 2021. Return to gross margin. Could you please give us further details showing us how we can evaluate the full impact of changes in activity, impact of a drop in furloughs. What about expenditures that will necessarily increase once again after recovery in activity? Questioner's voice is cutting in and out. And the speaker is just saying they cannot hear him. Should I repeat my question? Yes. Answer. You're asking about changes in the various scopes impact on operating margin 2021. Is that correct? Yes. Wondering about the impact in resumption in use rates and resumption of rate costs that have been halted due to the crisis and that will then resume again. Also wondering about the drop in inter contract coverage, so on and so forth. Answer. Okay. For the time being, we're not disclosing details on operating margin. We never do that at the beginning of the year. In usual times, would be early days in the year to do that. Usually we have clear assumptions as to growth and projections of cost trend. This year that's very complicated as you can well imagine due to the crisis due to the fact the crisis is still here. So we don't have a great deal of visibility. What I can say though, the impact of use rate generally 70 basis basis points gross margin in results gives us an order of magnitude as to the impact this could have as there's a resumption activity. The drop in furlough subsidy in use as modeling on 50,000 per annum I mentioned earlier. Out of pocket amount is between 2040% with seasonal effects. For the time being, 20%, that will shift up to 40% in Q4 depending on governmental decisions. Similar order of magnitude in Germany, you know that we've got around 1,400 currently. That's the day things this goes up and down depending on activity shifts and changes. But that enables us to project as residual costs and trends over time with residual costs. For the time being though, let me say that SG and A, structurally they're greater than what we usually have by an order of approximately 120 basis points. We're continuing to set up various organizations of the group to support the future, near Alia, support future growth. We decided to continue with various investments. For instance, as we start recovering more normative activity, these costs will be fairly diluted. This is also going be coordinated very dynamically. They're just sales and recruitment costs vary with activity levels. And with SG and A you saw in previous years, cost of SG and A was fairly stable. It's carefully monitored investments over time as business development activity increases. Currently, costs are 120 basis points group wide, which may last through 2021, will then be reabsorbed as revenues begin growing against organic growth. Those are basically the indications I could give you this juncture. Thank you. The next question is Mr. Jerich Marcant from Mark Gim. Go ahead, sir. Good morning. I hope you can hear me all right. Several questions. Firstly, to come back to Germany briefly, could you give us some comments on changes in direction, arrival of changes in management, a new manager for Germany? I was wondering, is this the run up of a transformation plan there may be in Germany? You've frozen this more or less with the arrival of COVID distribution between engineering and others? And you have someone from IFECO. Second question on Germany and follow-up to some degree. Due to the fact Germany is making losses in spite of government subsidy, It is somewhat surprising that it's only marginally that you've got a layoff plan, smallish one. After all, won't it be necessary to go more in this direction in 2021 without a bigger resumption activity, greater layoff? Should I continue with my questions now or later? Go ahead with your questions now. Ask all of them now. Okay. Fine. Thank you. Another question, more technical on M and A. Thinking of the company about in 2021 announced, has payment already taken place? Is this factored into the €120,000,000 Another point. Should we get further detail on the profile of that company, euros 38,000,000 in revenue at least? We didn't get comments on this. And I have another question on reducing carmaker panels. I think there's an automotive carmaker that reduced the panel from 13 to three companies. Are you in that panel? And is this an overall major trend you're seeing speeding up during COVID? It had already begun previously, but is it speeding up under COVID? Thank you very much. Thank you for those questions. First of all, Germany. Yes. Previously, Germany was organized to our close northern mainly around Hamburg. To the person in charge of Airbus Airbus Toulouse. That made sense since the bulk of their activity in the North was Airbus Hamburg. Then you have the Southern part of Germany where the manager member of the executive committee working almost exclusively for automotive. We decided considering what happened and we're in another crisis. We stopped splitting Germany in two. No. Sorry for saying it that way. But, we decided to bring Germany back together under one single management, and we sought someone for that. Someone had been at Edico briefly, but they're really fond of the company. Spent twelve years at another company previously. They're a trained engineer. He's a top level person. We announced him. Among other things, his mission statement will be to pull together Germany under one management and also move into areas where we hadn't been present previously, mainly in the South, in the narrow several problems in the North. So we, first of all, consolidating and then supporting the recovery in automotive. Germany and in France, we're seeing this now. It will also diversify into other sectors such as telcos and life sciences, services and energy, where we're not present currently or almost absent in Germany. For some reason, we're not present at all, such as Berlin. As you can see, we've still got a lot of potential for work in that country. The knock on effect I would have just said in terms of 2020 results. As you can imagine, we lost about 60% of aeronautics activity in the North in one month's time. So we made money. And then automotive wasn't doing well in the South either to make up for that. We didn't lose a lot, a little bit. We would have preferred at least breakeven. But in spite of subsidized furloughs, around 70% subsidy in Germany, that wasn't enough. So this year, I hope we'll breakeven again or do much better than that. We'll start seeing some very ambitious momentum, multisectoral momentum in Germany. No doubt about it. We waited a little bit too long to launch our multisectoral approach there. It should have been done a while back. That's why we needed a top notch manager to really move on the ambitions we have for Germany. Next. Just to add another point in the answer, I might interject. There was the split of activities in Germany, off-site management and then engineering packages and so forth. Well, the split from very national in Germany, we'll be trying to set up two separate legal entities because rules governing labor law negotiated by industry and labor are such that you have to pay penalties and or bonuses to people in technical assistance in Germany, which means you can't do this in the same way as in France. At the same time, technical assistance is covered by something different. We're not talking about temporary employees, but actual management of engineers careers. 30% margin varying from client to client. Added value. This can be under package or technical assistance. In Germany, they've changed the situation, changed the rules. Now there are penalties in some instances that can reduce 10 points of gross margin, which is to say, trying to deal with SG and A and HR models, time and material and technical assistance under work package is impossible. Can't hope to develop technical assistance in Germany using SG and A like you have in France in the work packages. Not feasible there. This is why it would be necessary to separate out technical assistance with SG and A 14%. We still have a fair few people there, all the while maintaining the financials under the work packages. So, yes, we will keep that separation. HR management and s g and a management. The models for s g and a and HR are not going to be the same in the two areas in Germany versus House Center France. Germany is now together under this answerable reporting to the same management. Our chief in Germany is the chief for the whole of Germany. Paid in 2020. It wasn't there. '19. Cash impact, not very significant. That won't substantially change our cash position. They work in IT services, general services, I. E, retailing, banking finance. The yellow business areas that I showed you earlier on the slide, try to increase the ratios there. The data and IT services ratio in France, was fairly lowish. We acquired one, mentioned earlier, in September, October. They were in that area as well under infrastructure and network. So we're completing all of this. We're reaching 30% in France as is the case in many other countries and in a very specific technical positioning. Engineers with added value, not BPO with software packages configuring, so forth. That's not our business area. Onto your question. The panel of the automotive suppliers. Follow-up question. Apparently, a French carmaker was talking about reducing their list of suppliers from 13 to three. Peugeot and Renault had already been doing that, having three, four, or five preferred suppliers. So I was wondering about you. First of all, are you in that panel of three that have been shortlisted? Answer, I have no information. I haven't seen that particular information. And for the time being, that's not our reality information point. Two makers in France, not dozens. We are well positioned with one of them. No problem. There's another one after recently, short listing suppliers. We're not in list one. We're in list two for them. But broadly, we're making every endeavor to get back into list one. Therefore, plus two or three and list two. If we do our job properly, I think we'll shift back up into list one fairly quickly. For the time being, That vehicle maker will not be changed overall policy, so we're not in any way concerned or worried about this. So my information is not exactly the same as yours. Okay. Follow-up question. Might I ask about automotive now? In the presentation, you emphasized the fact that German automotive auto ticked back up in Q1. In the press release, you talked about automotive saying a recovery in '21. Could you give us more specifics on this recovery in automotive that you're expecting? What countries are you sure about? This will be happening quickly, beginning of the year. Where are the countries that you've got some doubts and you're not sure of the recovery yet in terms of timeline? And what about the countries where at this juncture you're not seeing any improvement? Thank you. Broadly, overall. Yes. We've got indicators of a good recovery in h two twenty twenty one among all the vehicle makers broadly. They've got to step up their programs specifically in hybrid and electric vehicles. Currently, we're seeing growth. We're seeing calls for tender. We're not worried about negative. There are some vehicle makers where there's where things are speeding up, such as one in Northern Germany where there are lots of calls for tenders. Okay. Well, thanks a lot. Next question, Stefan Dovinsky from Exane BNP Paribas. Your line is open, sir. Thanks. Hi, Simon and Bruno. Two quick ones on '22. Hoping the year will normalize. When you look at the change in the market post COVID, if there is one maybe an acceleration in digitization, for example, change in Alten position, more IT services, more international presence, what can be the growth in the addressable market for Outen as of '22? Is there's change in the addressable market growth as compared to pre COVID? Second question on 2022, the acceleration of M and A that we see in 2020, 2021. Can that become the new normal? In other words, as of '22, can we will we continue to see this level of m and a the high now that we've become more used to making bigger acquisitions? Thanks. Answer. Well, you need to put into perspective that it's right level what I told you about the blue and the yellow hard and fast engineering and IT services. The aim is to return to interesting issues in IT services. Normative level in each country, 30% remain essentially an engineering company. It's not a, new strategy. It's just a lag to be caught up in certain countries such as France and Germany. And that delay, that lag corresponds to our sectoral diversity. We also have it in all countries in, particular sectors. I said it's Germany. It's not normal that we're not in energy or telecoms as as much In France, there's no reason for it to be low. Ditto for UK, several other countries where we need to have that sectoral diversity. And the IT services data segment is part of that. Like, you know, it's not a strategy of moving towards IT company or to involved in software packages with where an engineering company will take our share of software packages. What very often, I mean, for the reasons outlined, engineering companies, because they develop specific software packages. They don't do the contracting and installation with software packages for admin systems. We don't do that. So leaving that aside, the growth of Alton Group, well, just giving you the key, will reside firstly in growing in sectors where we're well positioned across geographies. And secondly, to open up all the sectors where we're not present. The goal is to have three or four sectors per country in engineering to a lesser extent IT services. Now the market in all that, well, is unlimited. Today, we have no market blockage. Everywhere we go, we can bring needs. We can conquer business organic growth. Our our only problem because we're a service company is a problem of training and supporting our business management and and technical management team with with good good HR. The only reason why we haven't doubled what we'd like to be in The US, so we didn't do what it took in Germany, etcetera, is solely down to management organization issues, be they business, technical, and HR enveloping that. The market for us is no limit. Look at France. You'll find pretty much the largest engineering companies. Why? Don't we have other similar multisectoral or multi country companies in Germany or The UK? If you have names to site in Germany, we have two or three Bertrand, Edag, but they're not positioned as engineering companies like Alten, Altran, Applause, etcetera. So the market is not consolidated. It's all for the taking, but to take it, we have to have the trained management resource. The pace of growth depends solely on that, not in the market. The problem so I really, addressed the question in that. Wait. We have no it's not a product that we wanna sell. We don't know whether it's going to be successful or not. There's a competitive product that will be better when needed. And the clients, I mean, see that Alten by consolidating their HR and technical strategy can better meet the needs for outsourcing that are indispensable, especially when there's a COVID crisis impacting all our clients. On m and a, second part of your question. Well, we really boosted things in 2021 with an eye to offsetting what we lost. But using the results generated between 2020 and 2021, balance, you'll see that net income 2021 equals price of acquisition. So we haven't impacted our balance sheet or our cash position. Now that continue in 2223. We took now a pace moving to 200, 500 people, but I'd already announced that well before COVID for those of you who recall that we're allowed allowing ourselves to do bigger, m and a deals, but these are not not companies of 10,000 people, at 1.9. These are add ons, bigger add ons. Three, 500 people will cost between $2,050,000,000, 70,000,000 will self finance. If we can continue into '22, well, of course, that will correspond. I hope that will be about a third account for about a third of our the ideal model. Two excluding COVID, two thirds organic growth and one third m and a as we did in the year seventeen, eighteen, nineteen, we're about 10% or 11% organic growth and 2% to 4% m and a, that's what it would have by acquired 3,000 people in years twenty twenty two, twenty twenty three. Thank you. Thanks. For the time being, there are no further questions. We have an additional question coming from Mr. Derek Marco from SocGen. Over to you. Sorry to return to one question that I omitted to raise earlier, but would you have the figure to hand, but to give us a more a clearer idea of the recovery we're seeing in your clients, have you could you discuss the number of calls for tenders that you're receiving for clients, excluding auto and aerospace early 'twenty one versus last year? Have we returned square to early 'twenty? Or is the sequential metric would make more sense? Could you give us more granularity on the KPIs, commercial activity that allow you to believe that the recovery is well underway in most plants aside from auto and aero because assume that that's where part of the extra bench will be, deployed if it's possible to redeploy them there. Answer, excluding auto and aero. We're not in the same, traction level that we had in nineteen o five. I would put it about 70% excluding auto and aero, what we had in '19. That gives you an idea. When auto returns, it will boost the ratio even further. There are needs there, given the fact that we've slowed the recruitment, the equation is done in terms of the extra bench. Thank you. You're welcome. Well, if there are no further questions, I'd like to thank you all for tuning in to the call in these unusual circumstances, and Bruno and I available to answer any additional questions. Have a good day. Stay safe, and, see you soon. Thanks for taking part. You can, now disconnect.