Ladies and gentlemen, welcome to the VINCI Conference Call. I will now hand over to Mr. Christian Laveri, CFO of VINCI. Sir, please go ahead.
Yes. Good evening, and thanks, everybody, for attending this conference call. So I am today, as usual, with Gregor Thibault and Marie and Melia Folt, and we will be brief You have more time for the Q and A. So what are the key takeaways of this publication? First, the momentum Continued to be good in most of our business lines in the Q3 of the year.
For VINCI Energies and VINCI Construction, the revenue was in excess of 2019 levels. For VINCI Autohout, the traffic was strong, above levels seen before the health crisis during the Q3. And this good trend continued in the first half of October twenty twenty one. For VINCI Airport, we saw the beginning Of a recovery in passenger numbers in the Americas and in Europe. So in the 1st 9 months 2021, revenue was €35,800,000,000 up 3% versus 2019 and up 16% Versus 2020.
France, accounting for 54% of the total, was stable versus 2019 And up 19% year on year. International, accounting for 46% of the total, Was up 6% versus 2019 and plus 14% year on year. 2, the order intake at VINCI Energies and VINCI Construction in the 1st 9 months of the year was almost unchanged year on year, Only down 2% despite the high base of comparison closed by major contracts win by the group last year. I will give you more granularity by division later in my presentation. As a consequence, the order book remains Solid at €45,400,000,000 up 6% year on year, providing us with a good visibility, Serenity and cherry pick capacity.
International accounts for 62% of the order book. 3, in terms of financial position, the net financial debt of the group at End of September amounted to €16,900,000,000 down €3,900,000,000 over 12 months, Down €1,100,000,000 since the start of the year and down €1,700,000,000 since the end of June. It shows that the cash flow generation remained very well oriented during the quarter. In addition, VINCI's liquidity is very high at €19,500,000,000 at the end of September. It comprised managed net cash of €11,500,000,000 almost double of the level of last Here, the same period, resulting from the good operating cash flow I just mentioned and also an unused Confirmed syndicated bank credit facility of €8,000,000,000 due to mature in November 2025 For almost all of that amount.
As a result, VINCI is well prepared to continue dealing with the unexpected and Continue its development, notably with the upcoming acquisition of ACSIS, Those closing is expected around the end of the year. Let's now have a look A closer look at the main divisions. So Vasyl told, in the Q3 2021, the traffic continued to rise, Up 9% year on year. Traffic is now back above its pre crisis level, up 4% Versus Q3 2019, both for heavy vehicles, plus 3%, due to firm Economic activity in France and growth of e commerce and live vehicle plus 4%. This performance reflects a strong and rapid rebound in traffic levels after the lifting of travel restrictions.
As a result, in the 1st 9 months of 2021, traffic posted a strong rebound relative to 20.29 plus 19% and showed a limited decline of 6% compared to the last period of 2019, Of which minus 8% for light vehicles and plus 2% for trucks. VINCI Autohot 9 months revenue was €4,200,000,000 minus 3% versus 2019, plus 18% versus 2020. Airport, VINCI Airport. You have already seen the traffic figures published last week. As you noticed, VINCI Airports passenger numbers in the Q3 2021 were almost 59% lower Than in the Q3 2019, which represents an improvement on previous quarter, I remember you, We were at minus 82% in Q1 and minus 79% in Q2, But trends varied between geographic areas.
In Portugal and France, passenger numbers benefited from the introduction Of the Health Pass and positive developments in intra European markets. Passenger numbers at some airports in the Americas, particularly in Dominican Republic, are now back At their pre crisis levels. In the UK, however, ongoing restrictions on foreign travel Have prevented passenger numbers from recovering. Passenger numbers remain very low in Japan, Limited by the decision to close the country's borders and did not recover in Cambodia because of travel restrictions Imposed by other countries in the region, especially China. As a result, in the 1st 9 months of the year, passenger numbers fell by 72.5 percent compared with the same period in 2019.
And 9 months 2021 revenue was down 60% relative to 2019. But the easing of travel restrictions announced by several countries recently, mainly the U. S. And the U. K, should help international Passenger numbers to recover gradually.
VANCI Energies, following on From its very good performance in the first half of the year, VANCI Energies achieved revenue growth of 8% In Q3 2021 compared with the Q3 2019, 9 months revenue of VINCI Energies at €10,900,000,000 was up 11% versus 2019 and plus 13% versus 2020. This growth is quite homogeneous between France, minus 45% of the total, Up 10% versus 2019. And international, which represents 55% of the total, up 12% versus 2019. Order intake was also strong in the 1st 9 months, up 14% on year, Homogeneous as well between France, order intake slightly above 14% and abroad Slightly below 14%, particularly sustained by international outside Europe with a contract of almost €300,000,000 to build 1500 kilometers of electrical lines in Benin, the largest contract ever won by VINCI Energies. All in all, this performance reflects VINCI Energies buoyant market, its wide geographical Foothold and range of expertise as well as the impact of acquisitions.
VINCI Energies Has completed 27 bolt on acquisitions so far in 2021, which represents a full year revenue of around €150,000,000 Essentially, in Europe, France, Germany, mainly in ICT, Industry and Building Solutions, but as well One acquisition in the Northeast of the U. S. Called Outbound Technologies, which is active in the industrial automation business. VINCI Construction. VINCI Construction, now including Erovir, since the beginning of the year.
VINCI Construction's revenue was higher than its pre crisis level in the Q3 2021, plus 3% versus Q3 2019. Growth was particularly strong outside France, driven by the ramp up of several large projects that have been won In the recent past, 9 months revenue of VINCI Construction was €19,200,000,000 Up 6% versus 2019 and plus 18% versus 2020. In France, which represents 49% of the total, business levels remained firm, But revenue was slightly lower than in 2019, down 4% because of the high base of comparison. Outside France, which represents 51% of the total, revenue was up 16% versus 2019, Driven by the ramp up of several large projects obtained recently, including 2 works packages on High Speed 2 in the United Kingdom. Revenue rose sharply in Road and Railworks as well as Earthworks.
Construction VINCI Construction order intake fell 10% year on year in the 1st 9 months of the year. It is due to high comps. Recall that the business line had won a number of major projects in the UK, France Canada and Oceania last year. In addition, given current market trends and its historically large order book, please note that VINCI Construction Maintain a particularly selective approach to seeking on new business. Priority is to improve margins rather than growing The volume.
Regarding the order intake for small and medium sized projects, the trend is positive, Both in 9 months and in Q3 versus last year, but still slightly down versus 2019. Regarding specifically the road building activity in France, the trend is similar, up year on year, slightly down versus 2019. VINCI Immobilier, the real estate development business of VINCI. 9 months revenue of EUR 1,100,000,000 Rose 23% versus 2019 and plus 44% versus 2020. If we exclude Urbat's promotion, a newly acquired company, which we acquired 100% in January this year Versus 49.9 percent on previously, revenue was up 21% versus 2019, thanks to a strong production level For nonresidential programs launched previously and the good number of signings of notarial deals for residential programs.
The number of homes reserved in France rose 3% over the period from its level in 2019, which represents Almost 5,000 units, including Urbat. This was the level, excuse me, 4,977 was the number of Reserved units in 2019, and we reached 5,118 new units In 2021, driven by strong demand. The continuation of this trend will depend on the time required to obtain building permits. In conclusion, we confirm and specify our 2021 outlook. VANSI Energy, which is well positioned in buoyant markets, expects to see growth in revenue and operating margin relative to 2019, for the record, the revenue of VINCI Energies in 2019 was €13,700,000,000 For an EBIT margin of 6%.
VINCI Construction, which benefits from a very strong order book, is expected to extend its recovery And anticipate an increase in revenue and operating margin compared to with 2019. For the record, Revenue of VINCI ECONSOUCHAN in 2019 was €25,100,000,000 for an EBIT margin of 3.3%. If we recalculate the addition of the previous the old VINCI construction under Rovia. Given the good trend in traffic levels Observe in recent weeks and following on from the increase in the Q3, VINCI Autodes now anticipates Revenue in 2021 close to that of 2019, which stood at €5,600,000,000 For VINCI Airport, passenger numbers in 2021 should be broadly similar to those seen in 2020. On this basis, VINCI's 2021 earnings net earnings should rise sharply relative to 2021 To 2020, while remaining lower than their 2019 level.
VINCI has strength that will enable it to get back rapidly onto a trajectory of sustainable growth since with its Energy Services, Construction And Mobility Businesses, the group is playing a central role in doing growth. We would like to thank you for your attention, We are now ready to take your questions with my colleagues here present.
Thank you. Question comes from Jean Christophe LeFebvre Moulin from CIC. Sir, please go ahead. Hello?
Hello. Good evening, everyone. I have 2 specific questions. So first one, VINCI Airport to come back to the guidance. The EBITDA was in slight loss Over the first half year, can we anticipate a recovery to a positive EBITDA over the second half?
And a specific question on VINCI Construction. Could we have a split of the growth Between the former Rovia and the former VINCI Procuremention, Merci et Trois, Christian.
So, Christophe, I'm sorry, but we don't we made a release on the activity of the group In the Q1, we don't comment on EBITDA of VINCI Airports nor other business lines. And as for the split between the former Aurelia and the SigVoncon, I remember I think that in the last release in July, And that we will not provide it any longer since the organization has been completely reshaped. We have now some Business line, which remains more or less unchanged, VINCI Construction Grand Project, Major Project Division or Sorry, Tange Bashir. But we have also changed the organization in France, both in France and in some other markets, We have the 2 former activities, which used to be separate, are now put together. That applies to Europe, Africa, France and America, so we will not provide any more between The road business, railway business and construction business from now on.
I'm sorry.
Okay. No problem. Thanks.
The next question comes from Louis Prieto from Kepler Cheuvreux. Sir, please go ahead.
Good afternoon. Luis Prieta from Kepler. Thanks a lot for taking my questions. I had a couple of questions. The first one is regarding The elephant in the room, cost inflation.
And I know you're focusing obviously on sales at the moment, but is there anything you can give us in terms of flavor Where cost inflation would be at the moment versus what the trends have been over the last few months, if there's been a worsening of the situation? And in particular, if we could look at labor, if labor costs So I'm going out meaningfully, meaning that that could affect at some point order intake over the 4 quarters? And the second question, and again, I know I'm going deeper into sort of full year results Sorry, 3. But is there any light you could provide us regarding where working capital contribution has been to the good performance of Net debt in the quarter? Thank you very much.
About the cost and availability of materials and labor, You will not be surprised if I say that it has not improved since the previous Release of information we made in July. It's a matter considering our organization, as you know, VINCI is very decentralized, Which is handled at the local level by the people in charge of the business units and obviously taking into account the contractual terms of our Commitments with a little bit of customers. What is maybe a little bit new is this Regarding availability of labor, which in some areas, especially at VINCI Energies, Could result in moving forward some activity. Since we lack of labor, we might be tempted to Execute the work when you are able to do it, so which could result in some activity pushed forward in 2022 instead of Doing it in 2021 without any negative impact on the bottom line. What else can I say?
If we look at the order intake also, the consequence of the situation is maybe Reinforce selectivity in the way we enter new orders, especially at VINCI Construction. And again, at VINCI Construction, the priority is clearly not to grow too much, but to be more profitable. We consider with revenue, which is in the area of €25,000,000,000 altogether, we are big enough. So We don't really look for more volume, but maybe we look for better orders, more better quality orders In order to continue to improve our profit margin. That's for the first question.
And as we precise our guidance for 2021, you understood that we are rather Slightly more positive on this guidance that we used to be than when we were previously. So It means that the situation I described has no negative impact on our bottom line. Now the second question It was about the working capital. No, we cannot go into too many details. You know we have quite a significant seasonality in our activity level, In our cash flow generation, in our working capital evolution during the year, so It's true.
And it's a fact that indebtedness is quite better than expected, if I can say so, at the end of September, Which means that clearly, the profitability is improving and the working capital management He's doing well. But don't forget that a large part of the free cash flow of the year is generated in the last Quarter and sometime in the very last months of the year. So we prefer to be still a bit prudent in Any forecast that we could make about the level of free cash flow or working capital level for the rest of the year, even if we are rather more Timestie than what we could be or rather more positive than what we were a few months ago.
That's excellent. Thanks a lot, Christian.
The next question comes from Elodie Rall from JPMorgan. Madam, please go ahead.
Sorry, I should have done in English. So the first question was on ATS closing and the second question is on tariffs in airports. If you're seeing some if you're having some With the regulators and the airlines in general to potentially rise I mean, we've seen a lot of that, especially in Israel, for example, more recently, but in other airports to try to compensate for the COVID situation. Any of that happening at the airport? Thank you.
I'm sorry for the French stop.
Yes. The process is under course. We are not able to say whether the closing can take place or not before year end. But in any case, If it takes longer than expected, which is not yet sure, Then we will take the decision probably end of November, something like that, to It's a delay until beginning of 2022. We don't want to pollute the end of the year, which is an important period for All companies for closing the account in particular.
So if we feel capable of closing the deal, You should know it by the end of November and then we do it. If we feel it might take longer, we will not take the risk To precipitate the closing before year end. So I am not able to answer the question precisely at this stage, But we will have a clearer view, especially when the European Union authorities will give their opinion about the deal, which is expected by the end of October, but they might also Decide to ask more questions, which will delay the process. As For the compensations and the tariffs, maybe you noticed that we recently obtained an approval From the Airtel in France to increase our tariff in Lyon by, I think, around 3%. And in other places, obviously, each case is specific, but it's a country by country analysis to be made.
We have already obtained some COVID compensations in countries like Japan, Brazil, the U. S, the UK, Costa Rica, And we are still trying to get more from other place from other authorities in other countries, but we cannot provide too many details about those compensation.
Okay, great. Thanks for that.
The next question comes from Nabil Ahmed from Barclays. Sir, please go ahead.
Yes, good evening. Thanks for taking my Questions. I have 2 actually. The first one is on the guidance regarding motorway traffic. If I do my math correctly, that implies a relatively significant growth in the Q4 in terms of traffic If you want to be close to 2019 level for the full year.
And I'm a bit surprised by that because from memory, I thought that Q4 2019 were relatively elevated comps. I think you benefited from railway strikes at that point. So could you clarify a little bit What are the drivers for your expectation of a very significant growth in Q4 or whether my math are wrong? And the second question on free cash flow. I mean, you're giving us a very, very good number in terms of your net Good position at the end of September.
And I remember last year, the difference between the end of December net debt and end of September was about €2,800,000,000 Could you help us understand whether that significant decrease in the Q4 was exceptional or whether we have Keep something in mind when we do our forecast for the end of the year. Thank you.
About the autohoots, you probably misunderstood my comment. I didn't say that the level of traffic It should be broadly similar to 2019. I said the level of revenue should be broadly in line with 2019. It's not the same. We will be obviously I don't know, but we should be below the traffic numbers On a full year basis this year compared to 2019, even if we have a very good, so far, October month of October.
But you are right to remember to remind that at the end of 2019, we benefited From a transfer of traffic coming from the train passengers. As for the cash flow, Remember, we had a very strong cash flow generation last year, I think something around €2,000,000,000 in the month of December, Which was really unexpected. I don't know if it's exceptional, but it was at least unexpected. If we look back In the last 10 years, we have never reached such a high level of cash flow generation in December. Even the mid December has always been a good month for us, Let's say around €1,000,000,000 on an average.
Something else which has to be highlighted is the fact that we have resumed the share buyback, which had been It took last year in March. So this will impact obviously the net debt level at the end of the year. But apart from that, I don't have any other particular element in mind to make any comment on the Cash flow generation between now and the end of the year. That's true that we are a little bit ahead at the end of September, Even versus 2019 in terms of cash flow generation. It doesn't mean that we will reach by year end the level of 2019, which was above EUR 4,000,000,000.
I would be pleased if we do it, but it's too early to say.
Okay, that's clear. Thanks, Christian.
The next question comes from Gregor Kuglitsch from UBS. Sir, please go ahead.
Hi, good evening. Thanks for taking my questions. Actually only one left for me. So specifically, can I push you a little bit On margins, I mean, I think I sort of heard I think you were implying, I think, that you became a little bit more optimistic perhaps Sequentially on margin, is that correct? And could you help us out a little bit perhaps on the quantum that you Spec versus, I think, the 2 segments combined contracting, I'm talking with 4.3% margin.
Do you think this I mean, are we talking 20 or 50 basis points just to give us the directional feel where margins are heading? That would be great. Thank you.
I cannot be more precise with what I have already been. So I'll just remind that VINCI Energies had a margin of 6% in 2019, and we should do better. And I remind that VINCI Constraint, including AUROVIA, generated in 2019 Margin, Moyen Ponta, I mean, Moyen Ponta, if I may, as you say, an average margin altogether of 3.3%, and we should do better That's all what I can say at this stage. Okay.
Thank you very much.
Okay. And okay, the improvement For VINCI Construction, New Look should mainly come from Construction, the old Construction division, which was not performing very well, if you remember, Especially VINCI Construction France, but not only the major division as well in 2019. So the recovery of VINCI Construction major project, Including Entre Coals, which is now part of the major projects division and the recovery, the turnaround and the restructuring of VINCI Constellation France are the 2 main drivers of the improvement of margin between 2019 2021 for the new division.
Thank you. That's helpful. Thank you.
The next question comes from Tobias Vermaier from Stifel.
Yes. Good afternoon, Christian and Thanks for taking my questions. Number 1, just very quickly, your order intake in France according to the FMP still Struggling quite a bit. Maybe you can give us a little bit more color on that. That would be helpful.
Secondly, International is an important part of your construction business as well. So it'd be interesting to hear what you make of your developments in the UK where we are versus 2019 and also in the U. S, what you're seeing there at this point in time? And then maybe just with regard to cost inflation, which was discussed Earlier, can you just remind us what your fixed contracts to variable contracts were in The 1st 9 months.
I am unable to answer the second question since We have hundreds of thousands of contracts, projects every year, and we don't make the statistics among those contracts In the fixed price project and the variable price projects. In the U. K, we are making a profit. Now the UK is under a single management for both the former AURELIA and Construction, but both parts are profitable. In the past, remember, we had some problem in the UK in construction.
Now we are profitable in construction as well and not only at Erovir. In the U. S, we clearly have a strategy of growth because our presence remains Limited, even if we make almost €2,000,000,000 of revenue altogether in the U. S. In contracting.
We clearly have a strategy of growth through acquisitions, The best way to grow because then you don't put pressure on prices. The only point is that we need to find the right targets. And generally, in the U. S, what we observe is that the prices for acquisitions, potential acquisition, are relatively higher than In Europe. But we are really motivated.
And I think I mentioned an acquisition which was made by VINCI ENERGY, excuse me, VINCI ENERGY, it could have been earlier, but it was VINCI ENERGY In the U. S. In the recent period. So we continue to look actively at opportunities in the road business, in the railway business, Not so much in construction except for specialty technological activities at Solentressinay. What was the other question about The small order intake are rather well oriented.
We were, remember, A bit anxious at the end of last year after the local elections about renewing the order book for Small orders, we were quite successful last year about big orders. So we were very anxious about small orders because we had the actions. And in some cases, The mayors in place were moved and replaced by, in particular, green guys, which is never good for our business, especially at the beginning of their mandate Because they tend to freeze the potential awards. But now this is a bit behind us. And in fact, The beginning of the year, so far, has been quite better than expected in terms of order intake for the small or medium Size order for both the Royal and VINCI Construction France.
But now the issue, as I mentioned it, is more Are we capable? Do we have the means, especially in terms of labor and manpower, To execute more orders, so we have to be careful because if we sign orders and we have no the capacity to execute them properly, then we can have Some problems. So we prefer to even if the it results in a slowing down of Order intake, we prefer to remain cautious in the present period because the business is there. The business is there. The stimulus packages have not so far impacted us.
We are, for the moment, Studying potential orders, especially in renovation, building, etcetera. But so far, nothing significant. It will probably not be the case next year, but so far not very significant. So the issue is not the business which is available. It's rather our Capacity to execute properly, and we prefer to be cautious and not sign too many orders if we don't feel comfortable about the execution.
Thank you. Can I just follow-up on the UK and the U? S? The question thanks for the strategic answers. But the question also I was aimed at understanding where we are versus 2019 in these markets and how you see that progressing.
I ask my colleagues, one moment. The volume of activity is clearly increasing in the UK. Just talking about HS2, which is the very beginning and which will last for 4 years. So volume is there And the margin, I would say, are there as well. They are positive altogether, but we don't want He tells about the margin at this stage.
Okay. Thank you very much.
And we have a very good guy, Scott Woodward, which is in charge of managing the 2 activities now in the UK. It's a Scottish guy. So you know he's very putting a lot of attention on money.
I'm Swabian. We've spelled the Scottish because they spend too much money. Thank you.
We have a new question from Nabil Ahmed from Barclays. Sir, please go ahead.
Yes. And then David Ahmed again. I'm using this opportunity to ask a follow-up. I was wondering If you would expect any change to the market situation, especially for VINCI Energies and especially in France Related to the disposal of Equance, do you think it's going to have an impact on pricing or market competition dynamics? Oh, that's not really the issue.
Everyone is short labor these days, so pricing is not really the concern.
Julie, we don't like to make comments about the competition. You know we are not interested in e commerce because it's a very big piece of the cake, €12,000,000,000 We have a large presence in France, Belgium and Netherlands, where we are already well established. You know also that the profitability of Equance is much lower than ours. So we don't see the benefit for us. We wouldn't see the benefit for us.
We try to get involved in such a deal. Now Whatever the one will win the competition, Bouygues, Bain Capital or FSAGE, I don't think it will make much it will not make much difference with the present market situation, Except that the guy who will win will have to spend a lot of energy turning around this operation. That's all what I can say Because the profitability of Liquorice at present is not satisfactory, but it will take some time before It gets closer to our level of profitability. What about a winner? It's a people business, I know.
It's a people business. It's a management business. So you need to have the management capacity, expertise and availability To get into the details of the different business units, not just one guy can turn around the operation. It's not the way we see this business. For us, To do that, you need a lot of people, a lot of good managers in the different business units in France, outside of France.
It's It's a very cumbersome process. It's not impossible, but it will take a lot of time to turn around Equinox into a very profitable activity. The ingredients are there, but you need time and management energy.
Okay. May I ask you as well, if the acquirer was to dispose some subsidiaries, I'm thinking about North America, for instance, is that something that VINCI could look at?
It's too early to say because we don't know whether it will be the case or not. So we'll see on due time. In the meantime, first, we don't rely on that for execution of our strategy. As I mentioned it, we already acquired more than 25 different new businesses since the beginning of the year. We are It's a permanent process of VINCI Energies to look at potential acquisitions.
We recently looked at 2 1, To 2 acquisitions, 2 potential acquisition in Europe, we finally decided not to pursue the process for because we consider that it was not reasonable. So we permanently look at new opportunities in the different markets where we are interested in, mainly Europe and North America. So whatever happens on the Equance, it will not change the way we execute our strategy and our criteria Of decision for costuming and acquisition.
Very clear. Thank you.
The next question comes from Sarah Mollin from Reuters. Madam, please go ahead.
Hello. Thank you, Javier. I was wondering if you could give us some more detail on the impact of energy prices and steel prices as well on your projects. And also, how are you planning to deal with costs going forward?
I am not Xavier, I am Christian. I am not the CEO. So your question relates
about cost, if I understand well.
Yes, the yes, energy prices And steel prices.
Steel prices, excuse me. What can I say? The steel prices are the same for All the players. So whenever we have to price a potential order, We take into account the cost of steel as it is or as we expect as it could evolve in the future. And then what can happen is a characteristic of the contract can differ from one case to the other.
When we are in, for instance, a contract with a potential contract with a public client in France, Usually, the contract states that the prices can be adjusted Depending on the evolution of the cost of materials, including steel, through some specific index, which are It will be month after month. So we in such case, we would adjust the price. In some other cases, it's not Possible because it's a fixed price contract. In such case, we make an estimation of what could be the cost the evolution of the cost of materials, And we include in our pricing in our price list the provisions to face potential increase of cost. In some other cases, we negotiate a cash payment in advance so that we can cover The cost of materials.
So we have certain ways to protect ourselves In order not to suffer at the very end the impacts the negative impact of inflation of costs. It's not a scientific approach, but it's a pragmatical approach. And we are pragmatical people and we are decentralized. And generally, the people on the field are in much better position to take the right decision to To protect themselves, to protect their P and L on which they are judged than the people at the head office. At least it's a way we see The most efficient way to deal with this issue.
Thanks. And are you delaying any projects To wait for a time when the prices will be lower or you just generally across the board This
can happen in some cases if we consider that Some components, not only steel, but some specific components Are presently suffering significant inflation because of the condition of the market presently. And if it can make sense to expect a Decrease in the coming period, then yes, we can take this type of decision. But again, The people who are in the best position to take the decision are not ourselves at the head office, but the people on the field in charge of their customers, The people, the supplies, the P and L.
Thanks. A quick follow-up
about any projects you're currently delaying because of that?
We take care of thousands of projects. So if I answered no, I would probably Not to the truth. So probably there are some which are delayed, but nothing significant, which has been reported to us.
Okay. That would
be a small amount.
I suppose so.
Thank you. The next question comes from Jean Christophe LeFebvre Monsoon from CIC. Sir, please go ahead.
Yes. Two follow-up questions. First one, in contracting, VINCI Construction, You had some difficult contracts, which were impacting your margin. Is that now completely over, 1st? And secondly, a follow-up question regarding the price versus cost.
For a lump sum building contract in France, do you, however, Have the possibility to introduce some pass through clauses? Many thanks.
On the second question, it's clearly a case by case issue to deal with. There is no general rule. For new contracts, for new potential contracts, clearly, and we are not the only one to do that. We look for ways of protecting
us as
we can, either as you mentioned, producing passing through clauses in the contracts or Putting in place any particular team protecting us. As for the loss making contract, I think I mentioned it before That's one of the reasons why the margin in VINCI Construction France are now positive. We have Negative 2 years ago, precisely the fact that some loss making projects are now behind us. They have been delivered. We have accounted for the losses.
In some cases, we have got some claims to reduce the loss, but that's behind us.
Okay. Anytime. So no claims over the second half?
Again, we manage thousands of projects. So normal cost of business to get some claim, Nothing very significant to my knowledge.
The next question comes from Mr. Labille from Kempen. Sir, please go ahead.
Hi, this is Charles Mendy from Kempen. I just have one quick question. Could you give us an update on your concession pipeline?
Thanks. No, because generally, we don't comment on our pipeline. We can only comment on the one we lost. We lost recently 2 deals, one in France. You probably noticed that We lost Castra Toulouse, a new section of motorway in the Southwest, which was won by NGE, the local delta probably Because they are based in not very far from Toulouse.
And probably, VINCI is considered as big enough in the motor locomotion business in France. The second we lost, which is not really a very big deal, was the dedication of the service committee for managing the airport of Papeete. I would have been pleased to win this project because I could have made some nice field trips. Unfortunately, we missed this deal. We lost it against Aegis and I think the local guys.
Okay. Thanks. And do you see any activity in the U. S. On the concession side, managed lanes,
Nothing, I would say, not big, but nothing achievable to us presently. But we are actively trying to pursue our commercial efforts. We are maybe more active Not on the pure concession business, but on the managing of tolls. We have a specific operation in the U. S, Which has won several contracts for managing tolls, electronic tolling in Texas, in California, which has been quite successful recently.
That's not concession. It's more service type of contracts. On behalf of either a public operator Our private operator, which has not the technology in order to manage the tolls and prefer to subcontract it to people like us. We also want this is not you. We also are starting an operation in Dublin, in Ireland, For managing the tall collection of the motorway around the city.
Thanks. And if I may add a follow-up actually, can you confirm you're not interested in ADP? ADP.
ADP, to my knowledge, is not for sale. And what is for sale is The shares of Schiphol, the 8% stake of Schiphol. And my understanding is that I don't know all the details, but I suppose that the French state and ADP and Schiphol have already arranged a way To monetize those 8% between them or on the market, but we are not part of such a potential deal.
All right. Thanks. And so what is the rationale now at this stage for you to keep your 8% stake? There's no path.
The rationale is very simple. We believe that the share price of ADP can continue to rise, To rise, I mean, it already did compared to the end of last year. So when the recovery It will be confirmed. The recovery of traffic numbers will be confirmed. I'm pretty sure that Many shares of airport operators will rise.
So ADP, INR, Fraport, VINCI, etcetera. So it's not the right moment to sell in my opinion. But
you will consider selling then once there's the recovery and then Traffic number 1.
We don't consider anything further than that. We are putting our attention on managing our operation and try to Keep the level of cost at the lowest level possible and pray for the recovery of the traffic and The restriction implemented by the different governments to be levied rapidly, like in the U. S. Or in the UK And potentially in Asia.
All right. Thank you very much.
The next question comes from Eric Lemarie from Bracken Garnier. Sir, please go ahead.
Yes. Hi, thanks. Just one question from my side. Would it be a concern for you if the raw material Energy inflation continues beyond 2021. In 2022, for instance,
could you be concerned by that?
As long as we factor in Such inflation potential inflation in our cost and price it properly to our customer? No. In theory, the answer is no. Now I think this could have consequences on the market if the inflation is not Sustainable for the client. At one point, we have a problem with volume activity, but that's not the scenario that we factor in at present.
We think that The thing will stabilize over a certain period of time when the different Factors of production worldwide, especially in China or in other countries, will find an equilibrium point of equilibrium.
Okay. That's clear.
Thanks, everybody.
That's the scenario that we which is one of the Big guys about Mondial, SME, etcetera. I'm just repeating what I read in the press every day. Okay. Next question maybe?
No, we don't have any further questions.
Good. We can have a drink now with my colleagues. Thank you very much for attending this conference, and we keep at your disposal, especially Gregoire and his team, for answering further questions that you might have.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.