Earnings Call: Q1 2026

Apr 28, 2026

Bonjour. Hello, everybody. Hello. I would like to thank you for being with us for our conference, and we will talk about the figures by end of March 2026. A first quarter which has revealed an activity in half nodes, not really good. The figures, you will see, have improved for some of them, and others are still decreasing. By the end of March 2026, we had EUR 1.7 billion turnover, which is a decline of 0.8% compared with the same period last year. In France, we progressed by 1.3%, and out of France, a minus 1.3%. We had bad conditions in terms of exchange rates and we have managed to come back to an increasing organic turnover by 1.6%, which is stable out of France. For this quarter, we have no calendar effect, and the activity is almost identical to the one last year. It is at stable perimeter. At the same constant perimeter, we have improved the turnover thanks to acquisition. Alten was having 54,000 people working for this company. Now we have altogether, we have 154,000 altogether, of which 51,851 engineers. The acquisition have contributed thanks to the increase of the engineers part. At constant perimeter, we have a better progression out of France. According to the different geographical zones, this is what the activity looks like, and it has developed the following way. In France, the activity is stable, plus 0.3% year-to-year. The automobile sector is not decreasing, but by -1.9%. Aerospace, security, defense are increasing slightly. However, for living sciences, tertiary, telecoms, this activity has decreased. In the Iberic zone, 85% for Spain, the rest of Portugal, the growth is still very positive. We have an increase of 6%, apart from the automobile sector, thanks to SEAT, and a slight decrease in the bank sector. In Italy, the activity has slowed down. We have 0.2% decline, apart from the bank and finances, which is declining more. All the other sectors are increasing, including the automotive activity. In Germany, we have a performance, which with them, turnover is decreasing, in particular because of the automotive sector. We had already the same phenomenon in 2024 and 2025. It seems that, as we had indicated during the last communication, that the activity is getting stable in Germany, year to year, minus 2%. In the sequences, we will have a look and take a close look at that during the next quarter, but it seems that the activity is going back to stable. The automobile is decreasing by 30% year-to-year, but at the same time, the whole activity is slowing down in this sector. The aerospace representing 22% of the German turnover is at +2% year-to-year. Same for safety and security. It represents now 7% of the turnover and is increasing by 1%. Still in Germany, the activity is from a qualitative point of view, has strongly increased. That's quality. We have started a sectorial development, but this policy really reveals to be fruitful. We have, we are hopeful, and we hope that the activity is going to stabilize completely and will turn back to growth by the end of the year. U.K., the activity is stable for this quarter. The automotive sectors representing 10% and aerospace, civil, is still declining, both activities. Defense is increasing by more than 1%. That represents 10% of the turnover, the same for energy. As regards to public sector, that represents 40% of the British turnover. The decline has stabilized now. Benelux, the activity is still declining but is improving by and by. In Belgium, the activity is stable, but it declines in the Netherlands because of the H1 semiconductors for ASML. In Eastern Europe, a decreasing activity of 5.6%. Poland represents the three-quarter of the zone, declines by 3%. Romania is losing 3% like because of the tertiary sector. Nordics, it remains the only geographical zone where the decline is still very important. In Nordics, the activity has, you know, drawn back by 6%, even if we know that overall it tends to reach the -5%. Still the same reasons. Automobile, life science and office activity. In Finland, it's a little bit better, close to 0 for machine tools. North America, the activity has decreased by 5%, we think that it's going to increase in the coming quarters. The United States of America represents a decline by 10%, that's because of automobile industry and life science. It is stable, progressively and stable as stabilizing in Canada, at +7%, thanks to aerospace and bank and finance. Asia Pacific, that is back to growth this quarter. The activity is stable in China, one-third of the zone, increasing more than 10% in India, another third, and 6% growth in Japan. Korea decreases strongly because of the automobile industry. Considering as we usually do, if we consider the activity by sector, the automobile industry represents 13% of Alten. It declines, it goes on by 2.6%, a little bit less in sequence, in a sequential analysis. OEMs are declining too, hopefully, by the second quarter, we will reach the balance, maybe at the third quarter. Rail. As we had indicated during the last conference, rail needs to tackle modernization. Growth is back during the first quarter, which represents 10% of this activity in a sector that should progress further on in 2026 over the whole year. We hope that the problems of Alstom, as you could read in the press, is not going to bring them about to decrease their investments. Aerospace has confirmed the growth of last quarter, last year. Even aerospace has really reacted very well. Defense, security and naval goes on to progress very strongly. We have almost 10% increase year to year. Energy, 10% of the overall turnover has progressed, thanks to nuclear energy. Life sciences are declining and go on declining. Only 7% of the turnover. Industrial equipment and pharma is also declining by 7%. That's still life science. Industrial equipment and electronics this time, as well as semiconductors, is declining by 8%. In the overall industries, we have a -6%. The activity tends to stabilize by and by, and we hope it will turn stable at the second or even third quarter. Telecoms, that's the only field of activities which is really at -18, a very strong decrease. It is a decline that has to be split up between operators and telecom. We have bank finances, insurance. Last quarter was positive of 25%, but now it slightly decreases during this first quarter because of France, Italy, Spain, and Southern Europe in general. There is one activity that has increased in other geographical fields where bank finance insurance is important. It is Portugal, Poland, as well as North America, or Canada. It has to be pointed out, public service and retail. This was decreasing over the last quarters, but during the first quarter 2026, it has rebounced, and we have a slight decrease only. We hope it's turning back to stability, and we hope we will grow again during this year of 2026. You see that globally, apart from the telecom sectors, all the activities are coming back to growth or are stable. This looks much better for all our activities than one year ago. As well as for this first quarter, that tends to confirm the stabilization of our activities. As M&A is concerned, we have signed, but not completely closed. It will happen in the coming days. A company for which we have, for which we have communicated about Itsclinic. We signed two and a half months a year ago. They have EUR 60 million turnover. A company that has 470 consultants, many external people working for this company. They are working on data, IT, cloud, software development. It's a company that reinforces our critical size in IT, in France, in particular, out of Paris, southeast of France, but not only. Our forecast for the year to come. Macroeconomic, geopolitical context is of a high uncertainty. It is extremely difficult to have a forecast. However, in this given environment we are working in, environment which is not taking into account a deterioration that could happen because of the war in Ukraine, we forecast an organic growth between 0% and -0.5% for the whole first half year. According to this hypothesis, the operating margin should increase compared with the one that we achieved in 2025. We have no precise guidance for this time. Of course, we talk about operating margin of the activity. We do not expect an explosion. The increase of margin is going to happen by and by, and will be strongly marked by what we are hoping for and the different sectors back to growth. We thought that the margin at 8.6% during the year 2025, this margin is going to be higher in 2026. Now I am going to hand over to you, participants to this conference. If you want to raise questions, you're very welcome, and I will answer your questions. Thank you very much. We open now for the question and answer. Nicolas David has a first question. He has raised his hand, and you have the floor, Nicolas David. Here I am. Hello, and hello, Bruno. I would like to come back on the guidance. I understood that it does not take into account a degradation, even at the bottom. I'm surprised because when we hear the comments, we hear a lot of increase or stability, automobile, but also within Germany. If there is an increase, if there is an improvement, do we have countries who are going to deteriorate or countries or activities? Is it possible to find out if it has a link with Iran? This is my first question. Well, data is being published on a year-to-year basis. You have to understand that there is a business dynamism. We have a first quarter, which is quite acceptable from an activity point of view. This can be explained by 2 different things. First of all, we had a first and second quarters of 2025 which were not good with the coming back to growth by the end of the last quarter. At the beginning of the 1st half year, 2026, it degraded again a little bit because you know that's how it is. It's the beginning of the year. We have projects that do stop on the 31st of December, it goes up again. During those activities and expansion periods, we again come to a crossroads with the loss that we had at the beginning of the quarter, which is going to be mixed with the growth that has been generated. Now, this year, I mean, this has come true again. For the 1st half year, 2026, we have lost a certain number of projects, we are still trying to catch up. We have not reached yet the end of 2025. It's going to happen. It was not done before. I think it is going to be achieved in 2026, except if we have a real degradation of our activity. The Q1 is going to be higher compared with the Q1 of 2025. We're not back to the situation end of 2025. To be clear, even if there is a certain dynamism, which is okay, and others which are less okay, I mean, we have countries that still decline and even sectors of activities that decline, we also have the contrary. That goes into the good direction where we are going to reach a certain stability, even if we do not go beyond, we will reach the zero level. This is why the uncertainty is about how will we regain projects, what about the amount of projects we're going to lose? This has nothing to do, if I may say, with the economic context that we are in. It has to do with this kind of cycle of our activities usually. It has always been like that. We will see what happens by the end of the first quarter, this will be the first trend, if I may say so, we have to wait. I don't know if this answers your question, but to be even more precise, what about the minus 0.5%? Well, first of all, you understand that, I mean, we have not put -2, +2. We have a gap which corresponds to our convictions today, to what we are hoping in and what we observe on the market. There is a growth dynamism which is very sensitive in particular as regards aerospace, defense, this should not be destroyed because this even if things are better in the automobile industry, I mean, it has dropped so much that at a certain point, you reach the bottom. There are other sectors that decline and decrease. What we can say today is that the war in Ukraine has so far no consequence on the dynamic of our customers. It is a zero effect. There is no effect. There is no consequence. we do not know because even our own customers are not able to deliver any kind of indication. We don't know if the consequence is going to be deferred in time, maybe summer, after summer, or never. According to what already happened, we have to wait to see the possible consequences. However, we can't say what is going to happen there. Maybe there is going to be a major oil shock. However, again, we do not know anything about the consequences, so we have no worst case. It is a worst case at, let's say, roughly around 0.5%. we are absolutely unable with this war in Iran to say anything better than that. That's quite clear. Thank you. it's far away, a lot of uncertainty. For the SPE, there is this open fight, and it's logical. For the second quarter, 2025. The second half year, 2025 even. We had a sequential worsening of the situation. No, it is the second quarter, 2025. I can't even understand how the year-over-year Q2 quarter of this year, 2026, could be better. Minus 20% would mean a scenario of strong degradation. I can't observe that. The -1% for the second quarter is careful, prudent. There will be a sequential degradation because the second quarter is always lower than the first quarter. The question is this the result because we have less days, working days, or is it because we have an additional decrease because of the internal functioning of our company? We also had a slight stop of projects by the end of the first quarter this year, a little bit more important than last year, but we are catching up with it. It hindered a little bit the whole mechanisms. We took that into consideration, we will see by the end of the quarter what we do. Organic growth, the second quarter will be identical or slightly inferior to the same quarter but last year. In the worst case, we would have a -1%, -1.2%. It's extremely difficult to proceed to a forecast at this detailed level at the beginning of this quarter. The drop in headcounts, does that reflect the degradation? Exactly. However, the activity levels are still okay. I mean, we do not anticipate on the loss of contracts for the second quarter. Okay? A last one before I hand over to others. How do we explain the decrease in electronics and semiconductors? How do you explain that? Is it specific to Alten? Is it specific to the market? Could it really go back to growth? STMicroelectronics are back to growth. This is an excellent question. We have exactly the same kind of question, by the way. Yes, we would like to understand. For reasons, for reasons that we all know, it is an expanding sector. Either the sector is less externally organized and the investments are about production and less on subjects that we are working on, like ASML. ASML we know very well. What we know, we can't speak for all the sector, but for ASML we know despite a backlog with a very positive year and investments, the investments will start again. For the time being, the subcontractors do not profit from it. Nor do we, nor do the competitors. Is it possible to extend out the whole sector? I don't know, and I'm not sure. In the sectors of semiconductors, we have ASML, Samsung, Micron, STMicroelectronics, et cetera. What is surprising is that on all of those accounts, we have a degradation of the turnover. Either it is a dynamic that has to be broken down sector by sector, or we are bad, and we do not have the same strategy to develop those accounts. They are still very important for Alten. We will have to investigate a little bit to better understand. I understand the question. I do not have the answer. I think it's probably better to remain quite cautious at this juncture anyway. We don't really have the comfort of a certain amount of visibility in order to be particularly confident at this stage. Okay. Thank you very much. You're welcome, Nicolas. Thank you. Let's move to another question. Laurent Daure, over to you. Hello. Well, good evening, Bruno. I have three questions. The first is related to the aeronautics section, which is slightly better after the last few quarters. You see what's happening with regards air traffic. Do you have any concerns about an eventual slowdown at the end of the year? You know, what have you heard from Airbus, et cetera? That'd be interesting to know. My second point, when we're talking about margins, increasing margins, I just wanted to make sure that we were still on this dynamic salary versus price with the increasing strength of AI. Thirdly, I want to talk about the acquisition that was announced. If you could share with us the profitability levels expected and see if the price paid is within, you know, standards, I suppose. Yes. The last question, yes, we're within the traditional standards. It's not going to be any burnout in this company. We have paid sums which are similar to other acquisitions in the past. In terms of profitability of the company, it's at 7.5% of operating margin, bearing in mind that this is a company for which the brute margin, the gross margin is pretty good. That means what? It means that there will be a potential improvement to 10% very quickly. When I say quickly, I'm talking about 2027. For margins overall, well, the dynamic is interesting, but let's bear in mind that we have less and less activity in classic time and material. The challenge, therefore, is to really maintain the margins for our projectors to ensure the internal production is up to par in order to improve it, so that the clients have calls for tender. They're going to consider the technical offer, but they're also going to look at the budgets that are allocated. Overall, we are managing to stay afloat and to hold our gross margins in a fairly satisfactory fashion. It's always a mixture, isn't it? There are areas where it's less good than others. At group level, the gross margin is holding up. With regards to aeronautic section, well, this is why I haven't really made any specific commentary on Iran. Because we really don't know what's going to happen. We haven't got much feedback from the field. However, in here I believe, I have some ideas, and I look at 2024, for example, where we had no warning or very slight warning before any crisis, and then suddenly we're face to face with a work stoppage, project stoppages, one after the other. That was in October 2024. Our clients, the traditional ones, people working in the field, don't have much information currently, which would allow us to anticipate any slowdown before the end of the year. Now, you know how it works. When the cashflow isn't there, well, the client might very well decide to walk and to invest elsewhere from one day to the next. It's not easy to predict this kind of information. Our direct clients are not necessarily informed of what's happening. Today, we can see that the last two and a half years, we are changing. We're moving in an environment which is much less sure in terms of prediction because our own clients are often as unsure of what's happening as we are, particularly in terms of their budget. Similarly as in 2024, we were caught off guard, and we weren't the only ones, let me tell you. In 2025, when we published our Q1, our H1, we were trying to anticipate a recovery of the aeronautic industry in 2026, but actually, we've gone much quicker than we expected. Even if the clients have been faced with certain problems because budgets fell after summer. Overall, it's generally satisfactory, but today we just don't have any slowdown included in our predictions for Airbus for the end of the year. We're not exactly forecasting an enormous expansion either. We have to remain focused, measured. We haven't forecast a slowdown or a decline in the activity. If we thought that the war in Ukraine was going to change everything, we would be obliged, of course, to change the way we interpret all of the information we receive. Today, I think it would be gratuitous to do that because we just don't have the information. The acquisitions are going to be consolidated at the beginning of Q2? No. No, no. It will be at the beginning of Q3. If they're within the scope, and by that I mean they're able to provide what's necessary to get into those figures. Failing that, it will be the first of October. Have you got many deals which have made great deal of headway? Yes. Yes, we have deals on the table. They're not major deals, but we do have deals there. We have deals in Asia, in North America, in Europe. Quite a few which are taking a long time to be developed, perhaps because of legal implications from the salespeople or because of the negotiations. Some who are waiting because the results in 2025 weren't quite what were announced, and they would like to wait and see how the first quarter fare, how they fare in the first quarter, rather than getting involved in any kind of embedded growth. We have 2 fairly advanced deals which are practically finished. We've got more than 5 deals underway. That's for the new deals. If you look at the files that we have, we have deals that are signed. We've got more than 10 of them, which are in the wings. It's much like February last year? Yes, it's exactly that. Okay. Thank you very much. You're welcome, Laurent. Let's move on. The next question, Derric de Marco. Marco. Over to you, Derric. Hello. Good evening, Bruno Benoliel. I hope you can hear me. My 1st question is how we can reconcile the performance of the 1st quarter with this embedded growth that you outlined at the end of January. The 2nd question is why in H2 is that equivalent to H1? H1, if you're going to continue to increase our staff hiring, the basis is going to develop at least in the 3rd quarter. The 3rd question is related to the auto contracts in Germany. Can you give us a clue, some information on the major frameworks that you've won or lost or which are underway? How you view, I suppose, what's your hypothesis, surrounding these deals that are won or hopefully going to be won. When you look at the organic growth of 2025, with regards to semis, in the hypothesis which you have announced when you look at commercial performance, et cetera, they haven't relaunched investment. Is there an offshore option? Because this is usually a part of the deals for semiconductor clients. Are there any particular deals that you are aware of that are traditionally onshore, which are now being sent offshore? Right. Well, if I take your question one by one. embedded growth, it's annual. Okay? How have we managed to reconcile it with the figures from H1? Well, you're talking about Q. We're not talking about the same standards. What we were saying, what I was saying anyway, is that the principle of embedded growth is if the year that's starting, let's say 2026, is a year which is particularly flat given the situation of 2025, then we're going to be less than 2.2. That's what we estimated, anyway. Then you are taking the ratio. You're looking from December to January? What are you talking about? Are you looking at the cut in this 2.2? No. I'm not concluding the cut. You were looking at annual performance. We're not just looking at the first quarter. How do we compare Q1 to the Q1 last year? We're not using the same standards when it comes to comparing the two things. Well, it should be worse then because we were above -2.2, weren't we? Yeah, this is an average, a yearly average. Based on last year's average. Last year, we fell, remember, at the beginning to then climb back up. We recovered. At the end, we were higher. What you have to do now is compare what? You have to compare the situation of average activity for the first quarter, 2025 with exactly the same period in 2026. You look at the current situation, which will consider the cut, which will include the cut. Just 'cause I can tell or control. You just have to compare what's comparable. It doesn't work in a direct fashion, so to speak. It's not simple because we're comparing two standards or two modes of reference that are not the same. You say H2 equivalent to H1. Can you recite again your question? Why do we say it was equivalent? Was that your question? Why is there no improvement compared to H2 and H1 when your basis for comparison was that it was going to improve the further along you get in the year? If you continue to look at positive staffing in Q2, well, or Q3, you're going to bring along growth, which wasn't included before that. That gives you two good reasons to consider organic growth in H2, which you didn't have in H1, I believe. In the hypothesis that we had, H2 in 2025, if you consider the period from September, the last quarter, then you have a basis of comparison, which is very high because that's where we had the strongest rate of growth, and we still haven't recovered. We're still not there at the level of the end of 2025. We're going to compare the two H2s. We can have organic growth in H2 2026. We're going to have to have recovered not only the growth that we saw in H2 2025, and we're not there yet. We're still underneath it. Our hypothesis is it's going to come back, but we're not there yet. We believe we're going to go beyond it even. The hypothesis adopted is that we're going to be at zero if everything goes well. That's why we communicate on zero and minus 0.5. This means that we have to continue growth throughout 2026. If you look at the situation today, it's not contradictory with the hypothesis that we held before. We haven't reached there yet, but we're looking at Q1 in 2026. We're going to catch up with what I managed to get, the few hundred engineers that are missing, I suppose, are lacking. We are going to recover that level throughout the course of the year. When you look at the figures, it's not very easy to understand because you're looking at Q1, Q2, Q3, Q4 in 2025. You look at negative staffing over the four quarters. Is that right? Yes. If you would be stepping down a staircase, for example, in 2025, you have to try and stabilize in 2026. How does it work? No. Hold on. Starting is one thing. People left the company last year because some projects were slowing down, but we've maintained a certain level of activity with a turnover in the last four quarters, which was well above what was anticipated. Today, it's purely mechanic. Today, we're still missing a few 100 projects or engineers. When I say projects, it's the number of engineers that work on these projects, obviously. A project might involve 5 people, 10 people, et cetera. A unit of measure is an engineer working on a project. Today, we are still below the average in the last quarter of 2025. Okay. I didn't see it like that. I didn't look at it like that, actually. When we look at the total headcount, that's the figure we have, so we don't necessarily see the number of staff allocated to each individual project. Of course, there are also, you know, subcontractors and external factors. We have the Phoenix effect. Over time, we've lost quite a lot of turnover. In Europe, this has been substituted by turnover generated elsewhere. When it comes to Germany, in reality, when you look at the contracts, these are contracts which are framework contracts. Within those framework contracts, using the guidelines of the OEMs, sorry. Once we sign them, we could be asked to, you know, carry out jobs for to the tune of EUR 100 million, it doesn't mean that you're going to see turnover. Immediately, we're looking at perspectives in Germany, I think the fact that we signed a certain number of contracts with, for example, BMW, Volkswagen, et cetera, today in the turnover, this allows us to answer calls for tender, to be a reference candidate, we try to win those contracts with the people in place. The people working for us, for example, in most parts in India. It doesn't surprise me today. It doesn't give me any certainty that that turnover is going to be made largely by the OEMs. A couple of months ago, you didn't know what you'd made, what you hadn't made. There were certain affairs pending. Is that right? Yes. There are some that we did not win, others which we won. When I say we won, once again, I'd like to mention the fact that I'd like to be very clear. These are framework contracts. There's no client commitments on stacks of EUR 300 million-EUR 500 million. The data has to come once this the turnover is there. They can play with the money, and we've adopted certain hypotheses regarding stability in the automotive industry in Germany today. It's time and material activity in BMW, for example, where the gross margins are very, very low. There, for example, we're still referenced, but we're not really competitive anymore. You have to understand that in Germany, if we maintain the automotive activity, we have to adopt a dynamic of changing the mix. You know, getting out of projects where the margins are very low, very weak. BMW, for example, has tightened its prices. We had to wonder, should we stay or should we go? We also could have decided quite simply to abandon this because there is turnover but very little margin. This could actually have a negative impact on the margin for these client accounts. We remained. I think the client understands the economics of it, but I think he might have reproached us for leaving and for maybe not responding to calls for tender on work packages for projects which are slightly more exciting. In Germany, we had to adopt a double hypothesis, maintain the auto activity as it is today, which is not bad, actually, because it's all slowing down. The other hypothesis, of course, has been this idea of modifying the mix, changing the mix, a gradual exit from activities which have a very weak margin at the time and material, for example, and try and boost activities related to work packages where there's going to be a stronger margin with these clients. There are extra costs which we have to assume. Oh, okay. 1 or 2 perhaps that you've lost, but can you quantify the number that you've won, that we've won? Just so we can have an idea of, commercially speaking, we've done the job and the doors are now open to us. Are there still things where there's a great deal of uncertainty, when not everything has been concluded and some doors are still shut? The calls for tender, for example, come in slowly. What about frameworks? Did you win the framework agreements that you won? We can lose 1 or 2, but there aren't that many of them out there. It's not, when you talk about loss, it's not neutral. There's not 1 call for tender per OEM. I'm not talking about individual projects. I'm talking about calls for tender. You can have many calls for tender in 1 OEM. There are always, you know, calls for tender for hybrid engines, electric engines, some for different software. You have calls for tender for different parts, different pieces of the software, some for platform, some for engineering, etc., etc., etc. It's not per client, no. No, no. It's not per client. Okay, thank you. "I want to know you anymore with that," says the gentleman. We haven't seen I don't know, maybe we're not seeing the switch to selling activities offshore. Other people are going directly offshore, looking for resources through local service providers, perhaps. We have to really investigate that in order to understand. We haven't been called upon, as we might be in the automotive or air industry, by our clients on any way to see if we could help them to produce. Offshore, the clients have their own activities, while most of the clients have their own contacts. Perhaps. Yes, it's possible, but I couldn't really say, to be honest. It's a real topic that has to be discussed, though. There is a market trend which is fairly counterintuitive with the business dynamic. Thank you. Thank you, Bruno. Thank you for your patience. Thank you for that question. Thank you for that debate. Are there any other questions? I don't see any other hands raised. If you don't have any more questions, I'd like to thank you for having participated in this webinar. Perhaps some people are on holiday. I don't know. I know that for the Paris district, people are on holiday. We shall meet again. I am always available. If you have any questions, please don't hesitate to send them to me. Failing that, I think the next publication is going to be the 28th of July, then we'll look at the first semester, the first half of the year and the results from the activity. We'll talk about the economic environment context. Perhaps I will be able to, I think, be able to be a little bit more precise in our vision of the operating margin and what we see, what we potentially see anyway between July and December. Have a lovely evening. I shall see you soon. Bye-bye. Thank you.