Earnings Call: Q4 2020

Jan 29, 2021

Ladies and gentlemen, good evening. Welcome to the Alten call for the Q4 financials twenty twenty. My name is Val. I'll be your coordinator for today's event. This call is being recorded. You'll be in listening mode during the presentation, then we'll open it up to Q and A after that. Over now to Mr. Bruno Benolial, Deputy CEO, to begin today's call. Over to you, sir. Yes. Good evening to you all. Thanks for joining us for the call on a review of 2020. At the end of the year, the situation has changed little versus Q3, as I indicated earlier during the October. Well, a lot of wait and see, a pretty sluggish and mixed uptake. Tech and aerospace heavily impact. We had organic decrease in 2020 of 13% and of 12.9%, thanks to a Q4, slightly better than expected. So Q4 turnover of Altene, to €167,400,000 down 17.5% versus Q4 last year. We anticipated 18.5%, hence the slight improvement that I mentioned. But you can see that activity remains markedly down versus last year at constant rates, down 17.4% minus 24.4% in France and 1224% in France. Full year 2020, $122,000,000,003 $49,000,000, down 11.1% versus '19. It was 2,624,000,000.000. Like for like, scope and forest activity is down 12.9%, down 19.5% in France and 7.9% international. Very sluggish response activity rate increased gradually remaining lows, 77.2% in Q2, 84% Q3, 86% for its final quarter, well below the normative rates. Year to date, it's 84.6% in 2020 is against 92.1% in 2019. Furlough schemes were reduced because of an improved activity rate. It's still present in many Europe, a few European countries, essentially France and Germany. All geographies headcount in furloughed was 13% in 2020, was brought down to 80% in Q3, thanks to leave taking and 5% in q four. Obviously, it's not added to the intercontract rate and taken into account in the activity rates I'm giving you. So they're part and parcel of the intercontract rate because it's an intercontract that subsidized. Headcount continued to decrease 37,200 at the end of last year, 32,000 engineers consultants December 2020, 33,000, 29,000 engineers. Excluding acquisitions, disposal engineer headcount would have been 29,000 headcount. That's an organic drop of 3,000 people, 2,017 in France and 2,418 outside France. By geography, at the December, the situation is as follows. France remain penalized by auto and aero. Auto represents 13% of France turnover, declined by 35% in Q4 after minus 40% in Q3. Aerospace, 21% of French sales, down 34% in Q4. After a peak, so to speak, of minus 50% in the Q3 Energy, thanks to new Clear Railways, Naval Life Sciences, Telecom in total, just over 40% of turnover is still growing. International, no change of trend in Q4 versus Q3 and changes by country, dissimilar activity is down 7.9 annual year to date, but 12.4% international in Q4 after minus 14% in Q3, minus 11% in Q2. North America, USA, 80% of, NORAMs, the main sectors, auto, oil and gas, and service finance picked up slightly. So, less decrease in q three, minus 20 versus 25 in q three. Canada resisted well, up 13 2020. Services, up 15%, telecom five life sciences plus 90%. All sectors in Canada are up except for aerospace, of course. Germany, country where activity decreased the most within the group. The organic drop reaches 24.5%, decrease that was slightly reduced in Q4, minus 30% versus 34 In Q3, activity didn't pick up in the auto aero sectors even if the decrease of Q4 in both those sectors is lower than in Q3. But it does remain very significant because in auto, minus 30% in Germany at Q4, whereas we were on levels higher than Q3. Auto, still 45% of turnover as to aerospace, only 25% of Chairman turnover. Let me remind you of the numbers, minus 4% in Q4, minus 60% in Q3, once again, 40% in Q4. The other sector, finance, energy, life science are up. Scandinavia at constant scope and ForEx activities down 19%. In Finland, a small quarter of Scandinavia activity improved in Q4, thanks to the pickup of industrial equipment preponderant in that country. In Sweden, activity stabilized. The decrease of 20% at constant scope and for on the back of the strong decrease in the auto and trucks, very major in Sweden. So the decrease full year is the order of 40%. Benelux activity decreased slightly, but in Belgium, it decreased by 10%, stabilizing in Q4, essentially owing to the service sector, whereas the pharma sector continues to grow significantly. In The Netherlands, activity grew 3%, thanks to semiconductors. All the other sectors up. Spain now activity down 5% but contracted slightly in q four owing to continued lockdown. Defense and space, automotive, civil aero are down, whereas activity is up across all the other sectors. Asia Pacific scope grew 65%, but leveled off overall in Q4. Growth driven by India where local activity grew, posted growth about 10%, notably in electronics, semiconductors and in the tertiary sector. In China, 7,000,000 in turnover. Activity is down by just under 10%, 8% to be precise. The auto accounts representing a significant part of the Chinese business. Activity had picked up as of Q2 and picked up more vigorously into Q3 and leveled off in Q4. Now Italy is a specific country in 2020 for Alten, double digit growth across sectors, safe telecoms, owing to the decrease of a client Vodafone. In The UK, activity began to pick up in the final quarter even if it's heavily impacted by the drop in aero accounts, minus 35%. Auto, minus 30%, both representing just under 40% of UK turnover, like what's happening in the rest of the world. Diversification of enterprise and other sectors in The UK grew significantly. If we look at the activity by sector, I won't repeat that auto and aero remain heavily impacted by the crisis. All the other sectors suffering from marked growth, for rail, naval, energy, thanks to nuclear and life sciences. If we home in sector by sector, automotive, 70% of turnover today, down 30% sequential improvement, minus 40% q two, '30 '6 for q three, '30 '3 for q four for OEMS a Ferrari all are down, and equipment supplies on e zed f is up. As I said last time, we don't anticipate real pickup before mid twenty one at best. Rail activity and nail activity is still growing by over 10% driven strongly by naval, but rail reaching 10% and activity that slowed obviously in Q2 that picked up in Q3 and accelerated in Q4 for long term projects. Aerospace now 12% of turnover, down 33% with a strong decrease in Q2 and amplified in Q3 and a slight uptick in Q4. Visibility remains reduced. And for us, no genuine uptick of activity will occur before '22 or even '23 in the aerospace sector. Within aerospace, the subsector of sec of space is less severely affected. It's only slightly down and should pick up faster. May we expect it to have picked up by the end of h one, what with new launches, Arianespace, and the SpaceX launches. Defense and security, 5% of our business, down 7%, severely impacted by Q2, minus 14%, has picked up slightly in Q3 and Q4. We expect that to remain the trend over 2021 because budgets haven't been brought down. The mix shows that oil and gas represents about half of the business industry. It's stable over the year, but down at the end of the year, having been effect affected by the crude oil impact. Nuclear steams are fairly stable given the projects that are long term projects from the main part. As for energy related equipment, it's still increasing more than 5%. Life Sciences, which account for some 88.7% of Alten's business, it's slightly up pharmacy, up 10% medical equipment, up 3%. This should go on growing over 2021, obviously. The other industries account for slightly less than 6% of our business, down some 10% over the whole year due to industrial goods mainly. Lastly, telecom, 7% of our business, down three percent on over the year. But with very different scenarios for our various customers, all growing apart from Vodafone in Italy and Ericsson in Sweden, but we expect this to be one off. And SFR Altice in France, given the fact that they want to bring these services back in house as they started to do in 2019, and this is a trend that has increased over 2020 with the crisis. We expect business to pick up over 2021, what with the switch to five gs. Electronics and multimedia, it's started to pick up again over Q4, even though it is down 20 points in Q3 and down over the whole year. As for Amadeus, we had 100 or so consultants there, and that has had an impact. But semiconductors and electronics have still grown gone up. Then services and finance, up 20%, thanks mainly to Retail and Services with Banking up 8.5% up 5%, sorry. So if you look at the various businesses by sector or by geography, even though the full year has been significantly down with two sectors having driven that in a number of countries. But on the whole, the other markets are resisting fairly well. External growth now, Many things have happened there with acquisitions, both in France and internationally, mainly outside France, actually. Nine acquisitions this year. Each of them fits in with the strategy of the group. And as I told you last time, the purpose is to speed up international growth on buoyant markets and or to achieve critical mass on submarkets. And in France, increase our position on data science, infra cloud and data security, which is will be growth drivers over the next few years. So let me maybe review the nine acquisitions over the full year, give you a few numbers and tell you when the consolidation occurred. I know that you always ask for that. So we purchased a Chinese, Japanese company only in the E380 consultants, IT and software development consolidated as of the first of April. Then a little later, a Korean company AP Solutions, 200 consultants, also specialized in software development, PM, 200 consultants. Sales, 18,500,000.0. Consolidation, much later due to the fact we wanted to get the information in the right kind of format. So it was consolidated on the 10/01/2020. In The US and with a Ukraine based delivery center, one company specialized in software development, 100 consultants, 7,500,000.0 in revenue also consolidated as of October 1. Germany now, two companies purchased, both in engineering consulting, mainly for the automotive industry, onboarded onboard software and an electronics environment. One of them is a company we'd already made an announcement for, 19,000,000 in sales, 200 consultants. We got a 70% stake and will consolidate it as of the January 1 year. The other company was purchased at the end of the year, 100% stake. We've been working on that for some time. There were significant losses in 2019 and 2020. Company was restructured, and we purchased it as it was undergoing final restructuring. It should get EUR 24,000,000 in sales for 2021 in the scope we've got, two zero five consultants consolidation 01/01/2021. In Italy now, one company for which there had been a specific press release, SDG, Data Science and Analytics. Headquarters are in Italy, but the business is also in Spain and The U. S. Their sales were EUR 76,000,000 for 2021, eight eighty five consultants. Consolidation, 01/01/2021. And the other company, IC Infra and Services, have purchased over the New Year, 300 consultants also consolidated as at the beginning of the year. In France, one IT infrastructure business, 100 consultants, 100 of them outsourced. Expected revenue for 2021, 32,000,000. And lastly, Portugal, still on IT infrastructure and data science. Company geared for the local market, but which might be a platform for near shore in Europe. The revenue for 2021 is expected to be 2020, sorry, is expected to be EUR 27,000,000. 400 consultants consolidation, January 1. So all in all, EUR 3 3,000 people acquired for EUR $240,000,000 in revenues. We have also divested. That's more unusual, I suppose. But we have decided to pull out from three nonstrategic businesses, one in China in the automotive industry, mainly on mechanical things or design, 6,000,000 in sales, 154 consultants when we sold it on. It has it was deconsolidated as of the April 1. In France, a telecoms company or doing business in telecoms that I mentioned last time, two sixty four consultants, 15,000,000, and that's been that was deconsolidated as of the September 1. And lastly, also in France, process manufacturing, 60 consultants, and we will deconsolidate it as of the December 31. Total revenue for those companies divested EUR 10,500,000.0. So if you do forward looking comparison, you'll have total sales of EUR $2,313,400.00001000000000 euros sorry. Outlook for 2021, we expect the automobile industry to pick up in the second half of the year, and we expect some insuring as, PSA or Renault have done. But the things things being what they are, there will be investments in, rail, naval, aerospace, aeronautics. These, will enjoy growth once more in 2021 with obviously, the visibility is not very sure, and, everything will depend on the state of the health situation. So Q1 should be fairly stable as compared to Q4 twenty twenty. Significant drop as compared to Q1 twenty twenty, which was a record high. And the gap will be bridged at the end of S1. And we expect or we hope some recovery will occur over the course of the year. However, we don't really expect that to happen before the 2021, and it's, therefore, much too difficult to say anything about when we will enjoy organic growth once again. Onboard growth is probably 5%, seasonality. The acquisitions for 2020 and 2021 will, at least in part, offset this drop in growth. So there you have it. I hope, that I was clear enough and, compact enough. If you do have any questions, I'll be happy to answer. Do ask participants if they have any questions. Yes. Thank you. Ladies and gentlemen, if you do have any questions, please press 1 on your devices. Please make sure We have a first question from Alexander Plot, PM6 Securities. Have the floor. Bruno. Hello. Just to make sure I understand, organic negative growth for 2021 to the tune of 5%, as you said, with some offset from the acquisitions. But what does it mean exactly as concerns the upcoming scope? What I've said is that the negative growth onboard is 5% or thereabouts. So the sales would be slightly below EUR 2,200,000,000.0. And I've told you about the acquisitions. I've told you what the sales figures are and the consolidation dates. Some of these were at least in part consolidated over 2020, and you can work on that to try and get a potential sales figure for 2021. It won't completely offset the negative growth. It will offset at least part of it, because some of it has already been consolidated over 2021. Unfortunately, the speakers are speaking over, one another. Question, second question. I'm not sure I fully understood sector's the pie chart on the, service IT, there's a growth over 2020, but I'm not sure I understood. So in fact, what we did, if I just revert for finance services, so all the data I'm giving you, it's, of course, like for like across these sectors. It's obviously like for like. I mean, otherwise, acquisitions, I mean, obviously, lead to misleading conclude down 4% essentially. Well, owing to retail and service activity. Insurance is flat. Banking plus five. Oh, okay. Great. That's clear. Thank you. Thank you. No further questions in the queue. Let me remind participants that you can use your keyboard by pressing star one to record your question. Thank you. We have a second question coming in from Derek, Marcant from SocGen. Over to you. Hi, Bruno. Best wishes for the New Year. We're still the twenty ninth, so let's hope that there are fewer COVID related announcements. Wishing you good health. First, on the furlough scheme, part time layoffs at the February. Do you think that the scheme will stop and be far less generous for corporates enjoying these furlough schemes? And if so, how do you plan to address the remaining stock of furlough schemes at the December? That's my first question. Now the second question is concerning the embedded growth on H2, the math for that. Obviously, if give or take your H2 is similar to Q4 twenty twenty, it means that you've basically taken up sequentially on the invoice volume of consultants, an increase at q four versus q three because it's true the staff hiring. I mean, when you remove people, I mean, people from the bench, I mean, maybe you could give the number of those billed in q four versus q three. And is there a substantial difference? And is there a kind of cumulative effect that needs to be taken into account to better read? And if we could just have the Q4 level alone, that'd be good. I think you gave it for the year 3000 RDAG minus 3,495, one minus $1.04 78 internationally. So let's start with the last question. So q, '4, we have a net staff minus seven zero four people. So that's, purely organic. Obviously, not taking into account the scope, exits, the disposal, minus seven zero four in the split. It'd be minus five five six for France and minus one four eight for international. The other question was on what was invoiced. Well, we've never really disclosed that in detail, but give or take what we can tell you between Q4 and Q3 is that we've increased, the invoiceable, headcount by about 2%, between 225%. That's what backs up the onboarded growth flat. And so then after that, there are impacts. I mean, we can't model everything on the rates, on the activity rates with activity rates that are fluctuating so sharply. We took also as an assumption that we'd be invoicing more because we invoiced, more. Improved invoicing, put, simply, isn't linked to recruitment. It's linked to the improved activity rate. So we took as an assumption that the activity remain remain flat. So what's on the onboarded rate, it's purely theoretical exercise. Activity rate rises, inevitably, if you reduce your stock. Well, we took as an assumption that if we take the same number of people with the same activity rate, consequently and an equivalent external volume with no inter contract, then the volume of revenue of projects invoiced consider on an onboarded reasoning remains flat because if mechanically, we dig we continue to decrease the headcount, consequently, the intercontract will shrink if we reduce the headcount on the intercontract. Not the case. There are people who resigned but are in project. We can't necessarily immediately replace them, in which case, we'll have a accretive impact on the activity, which won't have a knock on effect on the invoicing, level. And next, the question was on the furlough, the temporary, unemployment scheme. Well, we took the assumptions that, today are in our forecast even if we haven't finalized because I'm currently, looking at that again. In theory, we should have an end. I'm talking about France, an end of the furlough scheme for people who haven't opted for the scheme by the August. So for for 2021. Yep. Yep. By by '21. So so we have to exit for six months. We should have exited the compensation scheme for, partial, layoffs that's been lasting in France for a year getting, receiving 70% of your gross pay. We have to top that up because of the collective agreement that we've entered into. The day that system that scheme stops, we revert to a system in France, which is the ordinary law system in France, which basically would where where it's where where where compensated yeah. I said tax, actually, but we're we're actually only compensated for 38% of gross pay, and that lasts for six months. And today, the assumption is through the February, we'll continue to benefit from compensation of 60%. In March, we would that would drop to 36, percent. So that's for France. 36%. In other words, that's your out of pocket. No. Yeah. The out of pocket, obviously, skyrockets necessarily. But then there's, you have to do calculation and there are assumptions that really depend on the operating prospects of an uptick in activity or outsourcing transfer of skills to other projects. And to see if the curves can converge at some point if the furlough scheme is less, gonna less subsidize the p and l. And will, taper out at some point, then we'll we'll be converging towards an inter contract rate that's manageable and, and realistic for the time being. It's decreasing slowly but decreasing nevertheless. The other possibility is to have a redundancy plan affecting some few 100 people. Trouble is they are highly concentrated in places where the aerospace sector is, heavily, located. Costs, it costs a lot because, you know, there are, competitors who are putting in place that the ROP is of one year. It disrupts the company. And in terms of labor, relations, it's really the last decision to be taken when there's no other alternative. So for the time being, we expect that we will gradually get the intercontract curve to meet that at the end of the the furlough scheme. I don't know if you've listened to the transport minister the other day, day before yesterday. Well, she clearly contradicted the budget med minister by saying that the further the furlough scheme and the whatever it takes, mantra would continue at, as long as necessary. So this 60% compensation furlough scheme that in theory should have stopped September and is, carried over month by month will, linger for a lot of '21 as to Germany. Well, in Germany, we'll have a small redundancy plan, but really a mini one, about a 100 people in Hamburg. And as for the rest, that's to say Munich, the South, and for the rest of the other intercontracts in Hamburg, we're gonna operate with German furlough scheme with very generous with an out of pocket of the order of 20% max depending on the situation that will last for sure until the '21, probably into part of '22. And the third option, long long term, furloughs. Isn't that an option? Because you didn't mention that. Well, obviously, we looked at it, but for us, it's, not necessarily a good way of doing things because it requires a two year commitment. It requires not being able to, if necessary, make layoff for the time being, situation being what it is. And then, we have to give, activity over a two year period to 60% activity to all people, to all employees. So it's more kind of designed for industrial activities where we can get people to rotate on positions, but we can't on projects have someone 6040% on a furlough. It just doesn't work that way. Okay. That's clear. If I could add a quick one on the slowdown of international Q4, the base effect. I mean, those are those are base effects. I put you in the the annex the revenue change, organic growth rates quarter by quarter. It's clearer than on the year to date. And we compare Q3, Q4 even though Q4 was stronger than Q3, we should have had an unfavorable base effect that should perhaps have, amplified the comparison negatively. You'll see that across the board, the decrease rate is better in q four than it is in q three. With the exception of Spain. Spain went back into lockdown, oh, and Switzerland. You said Q1 twenty twenty one and Q4 twenty twenty, you're talking absolute terms, right, in number of projects. And so that means that isn't it the same rationale as, q three, q four twenty twenty? There's an increase in the number of people you're billing because q one, traditionally, historically, has always been slower than, q four. Well, that's why I'm, that's why I'm reasoning on number of projects that build or invoiced, number of people, build business days, and we don't have the same number of days, paid leave, paid holidays. But sequentially, you look at the number of projects, generally, in q one and December, there are a lot of projects that ended from the June that kind of step up quite strongly. And generally, we recover generally mid February, but usually towards the February this year, that step was smaller. These are projects that already ended. Those that continued did so. And January, number of projects build, well, the number began to increase again. So we expect to have as many in Q1 as Q4. But now it'll be a strong organic decrease in Q1. So January, you were already square. There's every likelihood that you'll do even better than that, right? Well, well, we recovered a few. We're not square yet. I thought that at the end of, January. Right. Okay. I'm with you. Thanks, Bruno. I'm sorry. You. Next question from Stefan Slavinski. You have the floor. Good evening, Bruno. Good evening. Two questions. One on the acquisition strategy. So you acquired nine businesses in 2020. What can we expect for 2021? Similar numbers or similar numbers of people acquired or similar sales? Or do you expect a step change compared to 2020? And on your offshore strategy, I expect that most of your acquisitions will be there. But what about Insure? Or is it going to be just organic growth? Right. So 2020 was big on acquisitions. And we are we have got a rather significant pipeline of due diligence or negotiations with LOIs being discussed. So sizable numbers, not all of that will lead to acquisitions. But I think we can expect I mean, at this point in the year, given the number of companies we're looking at, we can expect, as I was saying, probably to purchase a similar number of companies in 2021 as in 2020. Obviously, as concerns headcount and sales, there's not much we can say because some of them will only have 30 or so consultants, but makes sense to bolt on to what we have somewhere else. Others might be bigger. But at this point, you can't really say yet, which one of these two options might be more likely where you really are, either the very beginnings of the due diligence process or involved in a LOI already, but there's no way we can say yet. As for strategy, we're looking at companies both in France and outside France. Abroad, well, there are a number of companies working on onshore, mainly, incidentally, China and India. Okay. Yes. Obviously, these are companies we're looking at. But if there were to be a real increase of, in demand on, nearshore, say, with Renault, for instance, we won't have any, problem, ramping up our delivery centers in India or, Romania, say. We have recruitment processes in place. It wouldn't be much of a problem. Question. And that's not really underway for the moment. Bruno, what? Question. This is not, really happening on in Morocco or onshore or nearshore? Answer, no. Not really. And just another question about the state of lockdown in Europe and elsewhere. You said many businesses were still buoyant and had significant growth. And your numbers are sort of directly linked to the market. But, does that mean that if the health situation improves significantly, that would lead to projects picking up? Answer. Lockdown doesn't really have any impact direct impact on the way aero or automobile would pick up now. However remote working is fairly efficient and a fairly efficient form of work. People have grown used to it. The the slowdown is in business isn't so much due to, organization or practical issues. It's more for commercial reasons. So, actually, looking at prospects and potential clients, etcetera, You might be able to run a few on Teams or over the Internet, whatever app you want to use. But, clearly, fewer meetings means fewer biz and fewer and less business. Okay. Maybe one last question, more directly related to operating operational margins. Said it was slightly better than expected. Can you say anything about, s two h two, sorry. Are you able to say anything about profitability in H2? I think I said that last time. I think I said that profitability for H2 would be better than expected, and I can confirm that. Next question from Laurent Delhaire, Kepler Cheuvreux. You have the floor, sir. Question. Thank you. Can we mention government aid? 36%, is it regardless of sectors? Or is it different for aero and automobile? No difference. You don't expect a difference between the various sectors? Answer, no. It really is something that applies to all the businesses at business levels that are below standards. But in some sectors, automobile or aero, there are specific provisions, but that doesn't apply to us. Question. You said 5%, so 1,500 people. What about the, sort of normal attrition rate, so to speak, per month? How many people can we expect to go so we can forecast anything? Answer, well, I don't know. I mean, question, what happened over the last few months? Answer, look. There's some months where it might be a 150. Some other months, it might be a bit more, and other months, still, it's below 100. So question, over quarter, it's somewhere around 300 people. Is that right? Answer, yeah. Question, so that's 600 over the year plus the 100 people. So basically, you've got 700 or 800,007 or 800 people that you have to sort of reallocate and train. Is that right? And so, well, we've not actually said that like that because it's really something that's managed on a almost day to day basis depending on the various operation There might be 800 or a thousand people leaving, and then we want to be able to reallocate, so to speak, to various consultants. Or we might just decide to agree to people on downtown in between consultancies, in greater numbers than we usually would. And we might want to develop a different strategy. But in any case, it's just so long and so costly that it might not make sense to get to to do it because business might have picked up by the time we finished. Now, obviously, you can't, I mean, at some point in time, you'll get to the dregs, basically. Not the best, way of putting it, but still. Nowadays, an engineer might leave after a couple of months being paid doing nothing because that's not what their career prospects or expectations are. So some people might move on. Now rather unexpectedly, we had a few quite a few people resigning in and around Toulouse, and we didn't expect that because of the way the, aerospace business has been wrecked. But, in fact, we we saw that many people have either been relocating, moving to other parts of the country or changing industries. But there's no way you can forecast that. I mean, I'm sure that in the people who are still with us in sort of downtime might be people who are looking for a job somewhere else and and and staying with us until they find one and are not finding. So we'll have to see how how that goes. And as I was saying, it really is a a day to day management, basically. Question, you were talking also about the number of projects that were being invoiced and the numbers had been improving slightly from the beginning of the year. I suppose you meant organically here. So basically, you'd be saying that you have growth down for Q1, but still improvement over Q4. Double digit. Yes, double digit. Christian, outside the automobile and aero, have some customers in other industries tried to push prices down more than usual? Answer. Well, actually, not in auto and aero. No. Some people have, postponed their, call for and and their tenders because they're doing something else. Now there were there have been some, clients in the, banking and insurance sector who have asked for fairly significant, price drops. And I said asked. I didn't say they've got them. Question. And Excluding people in downtime, what about the gap between average salaries and average prices? Is it going to be a bit of a problem? No, it can be managed fairly easily. There are no salary increases apart from those who have been promoted. There are no further questions in line. Me just remind participants that if they do wish to ask a question, they should press star one. You have the floor. Sorry to come back. Just two quick ones, if I may. The first one, you were saying the visibility going forward is what it is. It's not crystal clear. But in terms of what the picture is six months back, do you have greater visibility on project launches than six months back on the Spirenting volume, what's expected going into 2021? And in your scenario for H2, have you factored in the auto pickup as an certainty? And that gives you kind of a a stock of the furlough numbers from '20. And on these 1,500 people, is there a profile emerging? Are these people who cannot really be reemployed aside from the auto aero sector because that's where the change is coming from. And if that's the case, given the very prudent tone that you have on the pickup short term, that's obviously a burden that you're carrying. Obviously, you cannot reduce some of them, but 300 per quarter, that's that's a load that you're gonna carry into '22. Well, visibility is when I said it's reduced, it's hugely reduced. We have no visibility on our client budgets for '21, and usually, they don't have any before February or even March. And here, when people who are managing the accounts talk to their counterparts, they don't have any either because the accounts, the budgets are kind of on unleashed run of the river. So most and in most industries today. So h two, as things stand, we've taken assumptions of an uptick in the auto business. But as I said, I haven't nailed down my 2021 budget, notably H2, what's interesting after all is to look at the perception of each operational, manager. There are some who think that things are gonna pick up strongly because vaccines will, crack the problem. Others are far more measured. So there's I would say in the numbers that we're, getting that are supplied to management, there's a strong personal bias that's linked to the context and the way how individuals respond to the context. My my take, my sense is that we'll pick up slightly in h two in auto, but we mustn't expect a spectacular rebound not in h two, unless things, are resolved spectacularly. And that the sanitary crisis gradually dissolve. But, I mean, that doesn't seem to be the course. For the next two, three months, there are some is the real issues for auto manufacturers of in of CapEx in in batteries. I mean, everything that revolves around electric vehicles of of investing in, in in fuel cells. And then, of course, there are, for for autonomous vehicles with a problem for the for the OEMs is that in electric vehicles, the price of the battery represents quite a significant portion of the price of the vehicle, so it poses a problem of value change. What we're seeing is that they're all investing, but also CapEx that needs to go into alternative technology. I said two years ago that lithium wouldn't be the solution. So the solutions around hydrogen, but not only. So those are big investments, but they don't have the top line to, to do that. But sooner or later, it's gonna have to happen. That will only operate when the virtuous circle of an uptick in sales volumes will kick in, etcetera. So but I mean, this is my personal view on auto. I see a slight increase in H two and then probably in '22 when we'll begin to really emerge from the crisis, a stronger, recovery. For people on furlough schemes, the remaining 1,500 people, well, they're not people who are unemployable or difficult to employ. I mean, if we keep them, people we decided to let go in Northern Germany. We looked at their skill set and fit with market needs. We said that it would be very challenging, so we're having a small a many redundancy plan in Northern Germany. For the rest, these are skills that we had difficulty in hiring these past two years. The they're young, well trained, working on automotive or aeronautics issues. So Germany, clearly, managers, see an upturn. They have a longer term visions because they're in a country where the perspective is more long term. That's why the German government has decided to maintain very favorable furlough terms at the '21, and there's talk even up until the '22. To preserve skills in companies. Germany, that's a real real issue for us in terms of furlough because we have several 100 people in Hamburg and Ditto in Southern Germany. In France, it's limited to Toulouse. We have an extra bench of the order of 350 people in Toulouse and, now to about a 150. And, Sofia, bit less. I mean, that's shrinking gradually. Next, we'll have to decide, but you have to get the right timing. Sometimes it's too late to launch heavy duty operations that are costly in labor terms, but, with the passage of time, the closer we'll get to the tipping point, the uptake. Well, what I don't understand, people I mean, you know, these people are linked to the geography. I mean, if you look auto and aero, I mean, it's actually growing in terms of the, drop of the furlough schemes. That should really, come from the fact that you gradually reassign these people where the market's growing. Right? Yep. Yeah. But the market elsewhere isn't sufficiently dynamic today in order to to absorb the surplus resources from the aero and auto sectors. That's just not gonna happen. So it's gonna manage gradually over time, and, it's just not it's not static. That is there'll be, people who resign, people who stay in furloughs in Germany, probably on a furlough scheme for over two years. But the question is, down the road, and is that in '21 or in '22, will activity in those sectors pick up to absorb the remaining slack of people on furlough. Well, I mean, it's it's it's a bet. It's a gamble. We maybe change change view during the course of '21 in light of events. But today in Germany, there's no reason whereas we have people who are competent. We know the auto industry will end up by, turning the corner, and they have big need no need to let people go when the residual cost is the order of 15%, 20%. If we reason in terms of HR focus. I mean, it's these are people obviously, if they serve no useful purpose, there's no point in keeping them because we know that if the market picks up, they'll remain idle. But for those, we decided, obviously, to call it a day, but for the others, not. Well, it's true when you look at all the sectors, you have two that are hurting badly. And that's, but that's not really sufficient to absorb the the those yeah. They're the two biggest sectors. Absolutely. I'm now going to hand this back to Mr. Benignol to wrap up today's call. Thanks. Well, thanks for joining the Alton call. Thanks for your questions. We'll meet again on the February 24 because that's the date on which we'll be publishing our 2020 results. Thanks again. Have a pleasant evening. Great weekend. See you soon. Bye. Thanks for joining today's call. You can now hang on. The organizers of, the call will remain connected.