Welcome to the VINCI Q1 20 revenue conference call. I will now hand over to Mr. Christian Labieri, Executive Vice President and CFO of Finci and Mr. Greg Watival, Head of Investor Relations of Finci. Sir, please go ahead.
Thank you. Good evening and thank you everybody for attending this conference call. So I end today with Gregor, but also with Maria Meliar, Fork, and Thierrymirville, First of all, we do hope that all of you and your beloved ones are safe and healthy in these tough times we are going through. So as usual, I will try to be brief, so to have more time for the Q And A.
So what
are the key takeaways of the beginning of the year for VINCI? Vishi VINCI was performing well overall in both its concession and contracting business lines until mid March. And obviously since then, it has suffered a very severe drop in activity following the lockdown in France in particular and also in many other countries. And though this circumstances, we expect a pronounced decline in the group's revenue in the next few months. For the Q1 per C, revenue remained stable at EUR 9,700,000,000.
France accounting for 54% of the total was down 6.3 percent, like for like, down 7.1%. International was up 8.5% and 1.6% like for like. As you know, revenue abroad was boosted by latest acquisitions of VINCI Energies, and also by the integration of London Gatwick Airport, which we acquired in May 2019. The currency impact was neutral in this quarter. So the percentage of the total business generated outside of France increased from 42% in Q1 2019 to 46% in the first quarter of 2020.
This is due in part to the group's acquisition, which were mainly, which were made mainly outside France. But also thanks to the organic growth in the international arena, which is in contrast to the decline recorded in France. Another takeaways, the dynamic order intake plus 4% in Q1 twenty twenty versus Q1 twenty nineteen, despite high comparison, and plus 9% on the rolling 12 month basis at the end of March, of which plus 6% in France and plus 6% plus 11% outside of France. Orbbook was up 8% year on year, reaching an all time high of 1,000,000,000 which represents almost 12 months of activity and provides us with a good visibility. Please also keep in mind that the HS2 contract in the UK for GBP 5,000,000,000 we won beginning of April in a fifty-fifty joint venture with Valfour Beatty, we'll enter the order book in April.
So it is not included was not included at the end of March in the order book. At the moment, about 1000 people are already working on this project. Which after the LGV high speed train line to Obrado is the 2nd largest contract ever won by the group. In terms of financial position, you noticed that VINCI increased significantly liquidity positioned to a very high level. Since at the end of March 2020, the group had a total liquidity of EUR 15,000,000,000 comprising a net cash position of EUR 5,500,000,000, but on top of that, we issued commercial paper for a total amount of EUR 1,600,000,000, including EUR 400,000,000, which were placed at the end of March following the ECB intervention with a maturity of 6 months.
And since then, we have issued a further under excellent condition since we get a negative interest rate. And also, I remind you that we have an unused confirm syndicated bank credit facility of $8,000,000,000, which is due to mature only in November 2024. But in addition to those EUR 15,000,000,000 early April, Vansy arranged an additional EUR 2,500,000,000 credit facility, which is due to expire in March 2021, with a syndicate of 6 banking partners, And this amount, this facility, the amount of this facility will be increased to $3,300,000,000, so $900,000,000 more early May with the addition of 5 more banks to the syndicate. So after all these transactions, The group will have a total liquidity of more than EUR 18,000,000,000. I should mention also that on top of that, in April, London Gatwick obtain a new GBP 300,000,000 bank loan due to mature in April 2022.
You probably know that in the pre Moody's confirm its A3 rating with stable outlook on VINCI SA, the holding company and ASF. And meanwhile, S and P confirmed its A- rating on VINCI SA, ASF and Coffee Root with stable outlook, so like Moody's versus positive outlook previously. So these decisions from the rating agencies reflect the confidence in our financial robustness, the prudence of the management of the Xi and the quality of our business model, that brings together a wide diversity of complementary activities, operating in an ever increasingly varied geographical universe. As a conclusion, with the measures we have taken to adjust expenditures and revise investment programs across all our business lines, with the financial resources at our disposal and with our record high order book, Pansy is well equipped to get through this major crisis, even if it were to continue for a long time, which obviously we no one wants to see that happen. Looking further ahead, we are confident that we will bounce back strongly.
Let's now have a closer look at the main divisions. Vaseq concession to start with. Q1 sales, $1,700,000,000, up 2.6% but down 6.3 like for like. Auto route revenue of $1,100,000,000, down 5% after a strong start of the year, Since the traffic was up 9% at the end of February, of which light vehicles plus 10% and trucks plus 3%. The traffic fell sharply in March, down 39% of which minus 44% for live vehicle and minus 14% for heavy vehicles after the logon measures were introduced across France on March 17th.
The decline then accelerated and the trend in late March continued into early April, However, the fall in heavy vehicle traffic has been less severe than the drop in light vehicle traffic as France maintains a basic level of economic activity. So as a whole, in Q1 versus Q1 2019, traffic was down 8.6% minus 9.7% for live vehicles and minus 3% for heavy vehicles. Garcia Airport revenue was 1,000,000 for the quarter, up 24% on a natural basis due to consolidation of London Gatwick, but down 10% like for like. In terms of traffic, passenger's numbers in the 45 airports managed by Vancy Airport, we are down 21% in Q1, Not surprisingly, the traffic fell sharply in March, down 56% affected by travel restriction worldwide to limit the spread of the virus. The decline was particularly pronounced in late March.
Air traffic is now running at very low levels and is being limited to threats and health related and emergency transportations. Contracting. Contracting sales of almost $8,000,000,000, down only 3% almost stable on an actual basis and down 2% like for like. Please note that for the first time in international business, accounted for more than half of the total of contracting activity. In parallel with the impact of recent acquisitions, mainly by VINCI Energies There was more than 3% organic growth outside France, but in the meantime, Contracting's business levels fell by over 7% in France.
This shows the average stop that followed the country's lockdown on March 17, while business continues continued to some degree in other countries and was even maintained to at almost 100% of the normal level in places like Germany, Northern Europe, Australia and the Middle East. So for Vansi Energy to start with revenue of 3,200,000,000, up 5% stable like for like, following a strong start of the year by Synergy, so we had its activity in France fall after the lockdown. However, the business lines operation in certain essential sectors such health care, energy, telecommunication, pharmaceutical and food enabled it to maintain around what one third of its normal estimated business levels. Outside France, the situation remains better overall. Some regions in which Vinci Energy has a large presence, so such as Germany, Scandinavia, Switzerland are continuing to show activity levels close to normal.
In the Q1 as a whole, the 4 d business level in late March was offset by Vanci Energy recent acquisition in countries such as Netherlands, Germany, Spain and France. Erovia. Erovia revenue of almost 1,700,000,000, down 1.5% only actual and like for like. In a nutshell in France after an excellent start of the year in which it benefited from both its strong order book and favorable weather conditions, Arovia's business levels fell sharply after the lockdown. Its activities after having almost come to the halt Heart are recovering very gradually.
Outside France, however, activity has continued to place some extent in most Arabias countries. With business level close to normal here as well, Germany and in the U. S. Pasi Construction revenue of EUR 3,100,000,000, down 5 percent. To bear in mind, in mid March, like the other contracting business lines, Vassy construction saw a sharp decline in this activity in France, where most of its projects were shut down.
Outside France, however, activity continued to a varying extent in many countries depending on the region. Pandemic reviews 3 major areas: 1, Asia, Hong Kong, Singapore, Korea, which is used to pandemics and can deal with them while maintaining these levels at a high level by having the appropriate equipment and organization. 2nd area, the Anglo Saxon word and the Germanic world were there was pragmatic, pragmatic response to that maintain business level as much as possible, while complying, of course, with health standards. And finally, the Latin world, which includes France, obviously, which had a knee jerk reaction that led to business being suddenly and almost completely shut on. To end with RCM OIBDA, the revenue was 25% to EUR 238,000,000, thanks to strong production in commercial property relating to several major projects, but like the one in the Galapardia station in Lyon.
However, revenue fell in late March as almost all contracting projects in France came to a halt. The number of homes reserved in France, including Eurobatt, our subsidiary in the south of the country, fell 29% to 1041 apartments. So thank you for your attention. I'm now ready with my colleagues to try to answer your question.
The first question comes from Elodie Arad from JP Morgan. Please go ahead.
Everybody, Gregor Maria. I hope you're well to you. Thank you. Thanks for taking my questions. First of all, so I'll have 3, if I can.
The first one is on motorway traffic. I was wondering if you could share the views that you have on how you think traffic will recover once the lockdown is lifted? Because on the one hand, presumably are going to be more comfortable driving, than taking any sort of public transportation. But on the other hand, we hear government is talking about potential travel restrictions between regions was wondering if you could share your views with us on this. The second question is on working capital.
I know you don't like to comment on that. I know. But I was wondering if you could give us a little bit of your thinking and how we should think about the impact from this sharp fall in contracting activity right now and then the progressive recovery, on the working capital requirement for this year. And lastly, you haven't mentioned anything on dividend. You officially still are maintaining it given you haven't mentioned anything else.
I don't know if you could give us some more color. I know the AGM is delayed. So we've seen other peers postponing the dividend. So I was wondering if you could share a little bit of your views on that as well. Thank you very much.
Okay, Rudi. So on the dividend, obviously, I am not the one who fixed the decision. You know, the assembly has been postponed. The new date for gathering the shareholder has not been set up yet. In any case, it should take place for legal reason before the end of June at the latest.
So, both of the actor will take the decision to organize a new meeting. This should take place, I think, beginning of mail, let's say, during the 1st 2 weeks, and it will be up to the board to decide about the dividend for the previous year. I have no more information at this stage. For the motorway, I cannot comment because I don't know and nobody knows that present. What will be the detailed measure that will be implemented after the 11th May, whether it will be possible or not to travel on the motorways.
What I understand, it was a statement made by the president this afternoon it doesn't intend to, to have different situation from one region to the other in terms of the confinement. This doesn't mean that traveling will be authorized. So we don't know. I mean, we have to wait until the government makes up its mind. Obviously, if things are, if it's authorized again to run on the motorways, I think the traffic should be good because people would prefer definitely to take their car rather than taking a plane, providing it's possible or taking a train.
For the working capital, you know, we have, a variation, a negative variation of the working capital during the first half, which varies from 1 year to the to another, but it's in the range of 1, let's say 1,000,000,000 to 1,000,000,000 during the first half of the year. So this is, I would say, the normal change of working capital during the first half, which normally is reversed in the second half. This is due to the fact that we have less collections in the first half as in the second half compared to the fixed costs we have to incur and pay. Surprisingly, the working capital has been quite good in the first quarter of the year, which is probably linked to the fact that we had a higher level than normal of activity and as a result of collection during the first quarter due to, in particular, the weather, which was pretty good. And this has benefited to Aravia in particular and the other contracting activities.
But obviously, since the activity has almost been stopped since March 17th. We will have no very little activity in April And as a result, very little collection, let's say, in June next June. So we might have a more consumption of working capital than usual, but I cannot tell you how much because I have no idea. It will depend on the pace at which we will resume the work. And for us, it's clearly, but not just for us, for most of our colleagues and most of the French companies, the priority is to resume the work as soon as possible, which means that we first have to address the sanitary constraints, obviously, and agree with our clients on the resumption of the work.
So that's clearly what we are focusing on at this moment in all our activities but in contracting because on the concession side, there is not much we can do at present.
Great. That's very clear. Thank you.
Thank you. The next question comes from John Christophe Lefer Mollink from CIC. Please go ahead.
Hello?
Good evening. I have 2 specific question, if you don't mind. First, first one in the term of U. S. Activities of Eurovia, there is, I think, a look down in some, state and even more counties, mainly in the Eastern part, are you now impacted or not, are you obliged to stop the works of Rovia in the U.
S? And the second issue real estate, how is the situation of cash in and cash out with this is very cyclical activity. Many thanks.
About Orovya in the U. S, the activity is almost normal, very far more than 90% We had been, we have been obliged. I'll figure which in any case changes, changes week after week. The bigger ones, in particular, the office buildings, in the Paris area, in particular, but also in Lyon, are not back to work yet. Because if you see, the logistics for organizing the protection measure is more complicated to implement on those big sites.
And to reduce the cash burn, this is not just in vaccine OIBDA. It's everywhere. We have implemented at a very large scale, fair laughing measures. To which is possible in France and in some other countries also, but mainly in France, which means that our people who are unemployed are paid almost entirely more than 80% for the low salaries, the low wages by the country, by the states. Or are in vacation or in, sickness, situations.
The management main objective being obviously to cut as much as we can, the cash burns on the fixed cost.
Okay.
So you don't see any major risk for the United States. Of, did your cash of information as we had, 20 years of no exit in the winter, the absolute agreement failure generation that we experienced from the very important pride in terms of cash position in all construction groups converged the incidence. How major risk is it? Well, it's clear that a recovery in the real estate activity in France will take longer than in other businesses like for instance contracting. Because if you want to sell projects, you first need to build it, and during the summer, during the vacation period, but maybe we will have no vacation this year, but okay, during the vacation period, it's not the best moment to sell apartments.
So we might have some delays compared to the normal situation to, to sell and to deliver our projects But for the moment, it's for me, it's a one off, it's a one off problem to address not an existential problem, like the one we had to face in the mid-90s if it's what you have in mind. And don't forget that vaccine mobility is not a very big player. And is entirely owned by Vinci and financed by Vinci. And the treasury, the cash of RCMobilier, except when we buy new land, is coming from its customers. So we know we are quite prudent like most French developers.
We never launch a new project without having sold already to 40% to 50%. Of the project to the customer. So we get paid before starting the work, which reduces also the risk of the risk you mentioned.
The next question comes from Stephanie Dart from Bank of Canada. Please go ahead.
Hi. Thank you for answering my questions. I have 2 please. The first one is, on Cashburn Fifty in contracting, if we look at last year, I think excluding D And A, you were at a bit less than SEK 35,000,000,000. And about 30% of that was staffed, 25% purchased consumed and 24% of contracting and 13% external services.
Could you please give us a little bit of flavor, to which extent you believe each of those are variable? And to which extent you believe that we could avoid negative margins for this year losing contracting. And my second question please is on H2S as a new contract. You just signed, could you please let us know what the structure is, I don't think it's exactly a cost plus fee, but if you could highlight, if you have any risk there and inflation hedged and raw material in particular? Thank you so much.
To answer the question about HS2, so it's not you're right. It's not a cost plus contract. It's more sophisticated than that and more, it it's what we call an incentivized cost model, which means that the fee we can get, the profit we can make on this project obviously, it depends on the way we manage and we optimize the cost. So the more we optimize the cost, the more we make but with some limitation, in the worst case and in the best case. So it's quite a good system.
I think to a win win system, I think, very intelligent, which has been negotiated with the customer. For the first question, it's obviously a very important question. The fixed cost proportion, versus activity, obviously, depends on countries and and type of businesses. But to make it simple, it varies between construction, Orovya, and energy between 30 percent for construction, maybe 35% for Arovia. So we have more fixed cost at Arovia due in particular to the amount of equipment that we operate on our sites compared to construction where more equipments are rent And then you have energy.
It can seem surprising, but energy is over 40% of fixed costs, which is due to the fact that energy it's essentially labor cost, energy employs more people internally. So that's the amount rough idea of the percentage on revenue of fixed cost. And of this is cost, what is important, it was the internal labor part. Because this internal level part, in most cases, in particular in France, which is a big portion, as you can imagine, can be, I would say, subsidized to a large extent. So this permits to reduce significantly the amount of fixed costs we would have to bear in case we would have a little activity.
So the proportion of labor cost, within the fixed cost varies between, let's say, 45% at the Rovia to 75% at Banci energy construction being in the middle of around 60%. But this part of the fixed cost is in reality can be transferred to some extent to the social security or to the state financing systems in big countries like France, the UK, Germany, etcetera. The exception being the U. S. But as I said before, in the U.
S, we work almost normally. And in case we would have workload problem, we could, that's a pity, but we would have to file the people and then recruit them back. But it's clearly the area of focus. We have 2 main areas of our 3 main area of focus. 1 is reduce the work as soon as possible.
Providing the security conditions are met. 2nd, reduce our fixed costs as rapidly as possible to cope with the decreased level of activity. And you obviously get the cash in and reduce the cash out as much as we can. And it happens that at this moment, as I said before, the cash situation is rather good because we benefit from the fact that we collected significantly at the end of March due to the high level of activity in January versus normally in January February.
Thank The next question comes from Gregor Guglitsch from UBS. Please go ahead.
Thank you for taking my questions and same to you. I hope everybody is okay. So my questions are just to be very clear on the follow-up, to the comment you just made. So if we can just do very basic math, I understand correctly what you're saying. So for instance in construction, you said 30% is fixed cost.
And 60% of that is labor. Therefore, 40% is non labor. So if I multiply the 2 out, that would be getting me a 12%. In other words, if you lose if you make no revenue of, say, last year, you made $1,000,000,000 today at 0, you'd make $120,000,000 loss, just so but we're square on numbers. I think that's how I read it.
Just maybe if you could confirm. If you could then help us On a second question, I think you mentioned deferral of CapEx and other non essential expenditure. If you could just help us out a little bit, anything, maybe on the concession CapEx, whether things are getting pushed out, on the operating CapEx, anything you could tell us sort of what you're planning for? And then maybe a final question on airports. I think it's a point in the first quarter, but also, I guess, maybe going forward.
But your traffic was down fully consolidated subsidiaries 19%, but your revenues were only down 10% like for like, I think rounded. So obviously there's a difference. And I wonder whether things like cargo or something like that, obviously inflation as well. Maybe putting the question differently going forward if passenger traffic is basically virtually 0, what kind of revenue levels do you actually get? So I'm thinking maybe any fixed fees you get from any airport operators, any airlines, and then, or cargo?
That would be helpful. Thank you.
On the first question, I cannot add anything more to what I have said already because it's really a rough math, I think the reality will be much different because our people we are very decentralized organizations. So the guy, the important guys at Vichy are not at the corporate level, but on the field. And they are very they are reacting very fast. And I just discussed with my with one of my colleagues in charge of construction and he visited two sites yesterday in the Paris area, you could have thought that it was impossible to resume the work. 1 is the station at La Defense, the AeOL Station, which is located under a big commercial center.
And the other one is a boring machine in the Grand Prairie project in the southeast of the area. In both cases, the work is we are back to work already 100 people are working at La Defense, but tomorrow, it would be 200 and then back to 500, which is a number of levels. So we are really they are really doing a fantastic job to try to limit as much as possible the time during which we will be under optimized in terms of cost management. But the good question is the second one about CapEx because clearly, depreciation, there is not much you can do once you have acquired an equipment. But you can try to reduce the future CapEx, which is what we have done already.
We have stopped or postpone significant amount of CapEx, both in the concession and in the contracting businesses. Altogether, I estimate the total reduction or postponing of CapEx in the the area of magnitude, the order of magnitude is around EUR 700,000,000, which we present in the concession business approximately percent of what was forecast for this year. It doesn't mean that we will never do it, but we will do it later. When the conditions are will be back to normal. And in contracting, we have reduced the CapEx program versus what was plan in our budget by almost 1 third.
And altogether, this represents a savings in cash of 700,000,000. Then you asked a question about the airport business. I don't know if we have all the answer, but Gregua is going to try to answer your question.
It will be a goal. So, you're right. Finally, the revenue decrease in Q1 is a bit less pronounced than the traffic packs decrease. But as in mind that the aeronautical revenue is not only linked, of course, to the number of passengers, but as well to the number of ATM, which decreased slightly less than the number of stacks because you had seen at least in a part of the of March, some flights on was we were not very low, but still, I know as well you have some freight. So it can explain a bit of difference And on the non aeronautical part, you will still collected some retail rents We still collected some real estate trends
as
well, for example, advertising revenues. We have still been paid for that. So that's why there is a kind of a difference that you noticed between the trend of the traffic and the trend of the sale. From there, if your question is, if we have zero revenue for Q2 at the end of the day, don't dream. The impact on revenue will be more material than what you can have seen in Q1.
No, for sure. But if you have no PACs, you still make some revenues. That was kind of the question in a way.
After if behind that, the question is regarding the lag.
These issues are are deal with that wave on a case by case basis. There is no general answer to this question. The question is, with 0 passenger in a particular platform. Do you generate revenue? The answer is it depends on where with what type of customers, etcetera, what type of partners.
So there are very different situations. So we cannot give you a global answer to your question. I'm sorry. Okay.
Thank you very much. Thank you.
Thank you. The next question comes from Tania Zlona from MainFirst. Please go ahead.
Yes, hello. Good afternoon. Thanks for taking the questions. 3 questions. If I may, Number 1, maybe just confirm your exposure to the engineering side And as a whole, for the group and revenue terms, I get to around 47 or something percent.
That's number 1. And number 2, what do you expect in France and let's say the UK and Germany and the U. S. In terms of infrastructure spending programs do you have through your industry associations any sense of that? And then just lastly, I hear what you see on the airports.
It's difficult to give a one shot answer, but, maybe take your big airports. Let's say Gatwick, what you're doing there mitigate the severe impact there.
Can you repeat the last question, please?
Yes. Obviously, with airports, it's difficult to give a one shot answer in how you will mitigate the situation in the airport side in the short, also in the longer term. But if you could give us using Gatwick as an example, what you're actually doing on the ground there now to mitigate the situation and what you're thinking is going forward? Okay.
On this last question, I would like to mention the fact that the management of Gatwick is very soon going to issue, a detailed presentation
on its
website explaining in detail the measures that have been implemented. So I don't want to interfere with this presentation, but to make it simple, it's a combination of many different things. OpEx reduction, quite significantly. Including a layoff of people, region of the CapEx as I mentioned before, but considering the fact that some CapEx have been pursued because when you don't have traffic, it's sometimes easier and more efficient to work on the site and particularly when you work on the as you said, the runway, it's an example or in also in the building sometime. If you don't have passenger, you can work more efficiently.
But they will disclose more information. So if you can be a bit patient, this should be available very soon now probably in the coming days. As for the civil engineering exposure of the group, if you add up the traditional civil engineering activity, which are made of many small and medium sized projects but also the major project division, which is essentially doing civil engineering jobs that Construction, Jean Francois, and also Solletons, Fresina, which is done of many small entities, but performing civil sales engineering jobs in very specialized areas. All that together represent 2 third of our total represented year, 2 third of our total revenue. And I think, this proportion shouldn't change much this year, maybe a bit more.
With the Grand Paris project, which is developing and now with the HS2 project. Approximately twothree of an engineering, but it includes approximately 25% to 30% of specialized business. So building represents approximately 1 third of the total activity of the Versi Construction. And what are the projection, honestly, post confining nobody has any idea of what is going to happen? Probably the government will have to re minimize the activity of the country.
We really will that be done through additional investment in civil engineering? Honestly, I don't know. And I think we have enough job to do at present. We don't really need more jobs in the construction. We have plenty of we have the historical order book I mentioned before.
So the important thing is maybe not to get more work, but already do the work we have on hand. At least in France.
Thank
you. The next question comes from Nicholas Maurer from Morgan Stanley. Please go ahead.
Yes, good evening guys. 3 quick questions from me. First one on, sorry, on net working capital, just do you expect, especially from VINCI Airports and Concessions a bit more headwind in 2020, especially from airlines dragging the feet in paying fees. 2nd point, the order intake in the first quarter was, I mean, on our numbers, very strong, very reassuring. Can you explain us a little bit, especially in energy, what went on, why the order intake was so strong?
And last point on liquidity, we thought you had plenty of cash. You just keep on panning up more. What's the plan? What are you going to do 18,000,000,000. I mean, there's plenty of things to buy, but we don't think that's really your priority right now.
So just was wondering what where you would stop and what you expect it to do with all this.
On liquidity, you understood that we don't have EUR 118,000,000,000 on hand the $18,000,000,000 includes more than $11,000,000,000 of available facilities And if you add up the, commercial paper, it's even more, it's 1,000,000,000 of the 1,000,000,000, 1,000,000,000, its credit facilities or borrowings, just in case. The actual cash position is on only, if I can say so, around EUR 5,000,000,000 of which approximately half in the subsidiaries. That's that varies according to the moment in the year. And the rest centralized at the holding company. So that's not that significant.
The ideal cash is not that significant. Considering the size of the group which is huge and considering the variation of the working capital that we can expect in the coming months considering that the first quarter position was abnormal. It was better than expected So since we are prudent people, you know us quite well, and this is clearly a positive, appreciation that the rating agencies have taken into account when they recently confirmed our A- and S-three long term rating, we are prudent that that's true. But we prefer to have too much cash than not enough cash like some of our colleagues or competitors. That's for the first question.
What was the other point?
Was there a net working capital from on the concession?
The router IP tool on the airport business and of the motorway business is obviously not the same. Probably the recovery of the airport business will be will take longer, will clearly take longer. Than the recovery of the motorway business. That's why also we think it was reasonable to have some liquidity available in case and that's why Gatwick in particular, which are bigger assets, Gatwick negotiated recently an additional million facility with its relationship banks, which should be sufficient to cope with those difficult times until the recovery takes place at Gatwick. What we believe, we don't obviously, we have no certainty We believe that the recovery will be progressive.
Logically, it should be progressive, starting with flights within the country. For instance, you know, we operate north and we operate Leo. And when you want to go from north to Lyon, If you go, you can go by car, but it takes you some hours, a few hours. You can go by train. In such case, you have to go through Paris.
So it's quite easier to take a plane, a direct flight from none to Lyon. So that's the type of thing that could be implemented as soon as the government feels more comfortable with the security, the safety the health and safety situation. And in the second run, we can expect opening flights within Europe. And we think that Portugal could be one of the first country, which could benefit from the reopening of flights within Europe between the UK and Portugal or Germany and Portugal, etcetera. Will take much longer clearly are the long, long holds.
So that's why the recovery will be progressive and it's it's preferable to be in a safe situation versus liquidity compared to the motto is.
I think your 3rd or your second question Nicolas was regarding the order intake for VINCI energy, still quite strongly up in Q1 2020 versus Q1 2019. It's mainly due to some projects and contracts we won in Scandinavia notably. Which are at VINCIenergy scale quite big. It's a few €1,000,000, but it makes the difference in terms of a variation.
Our synergy was about to achieve a record year, both in France And in its main markets like Germany, Northern Europe, the UK and now some more exotic places like the U. S. Brazil or Australia. But bad luck, we were hit in this fantastic improvement in mid March. But at the end, the quarter remains quite satisfactory as a whole.
Obviously, Q2 will be different.
And just on that front, just to final question on can you remind us the exposure is basically to to industrial investments within VINCI Energies. I think it's the mix that changed a lot. What's the true factor?
I would say industry as a whole, but there are many different types of industries. So jobs in the factories represent almost 30% of the total Vansy energy revenue. More or less like infrastructure, International, meaning electrical lines, transportation and distribution, etcetera. And then you have building solution, which is obviously, depending on the situation at the in the office buildings. Representing around 25% and the rest.
So 20% being the new information and communication technology business, which is a resisting quite well in the present moment, especially the maintenance part. Because it's very important that all the telecom networks work properly and a lot of maintenance has to be done. To do to achieve that.
All right. And a very last one on the split. On private versus public demand, once we start to get out of lockdown and looking to the second half of the year, Have you had first hints from clients, canceling initial projects cancelling initial talks. I mean, I suspect not many people I don't think
I don't have don't have a global view on things to answer your question. Just maybe to say that the public clients, are more supportive, I would say, are more supportive in order to resume the work, but that's really general talking. I mean, you have some also some private customer who are supportive, but to make it simple, the example being the work we do for the Grand Paris, the company of Grand Paris or the, ERatePay at Aeile. So the big public customer are really helping so that we can resume the work as soon as possible Probably they received some advice from the Central Government, and I don't know.
Thank you, Krishna.
Thank you. The next question comes from Pierre Possette from HSBC. Please go ahead.
Good evening to all. I'm glad to see that you are all in good form. I have three questions, if I may. So first one is on the additional costs linked to the COVID-nineteen constraints. How is it?
Do you seem to be, easy to pass those additional costs to the final clients? My first question. My second question is on the margin for next year. Is there any reason to think that the margin for next year will be different from what you were expecting before because those margins are coming from your order book. So do you have any reason to change your expectation?
And the last question is on airports. There is probably some situation whereas the drop in revenue will, we'll put in danger some covenant. I'm speaking about category for instance. So what is the way out? Are you ready to inject some more money or do you think there's a way out will be to get some waiver from the banks?
So what do you expect in terms of financial execution for airports? Thank you.
On the last one, we have not identified any particular situation where we would be in danger. You know that most of our concession, our finance, out of project, finance schemes. About Gatwick, I prefer to leave the management of Gatwick answer your question And I think we'll have the answer in the documents that will be released soon. But you will see everything depends on those matters on what scenario you take into account to make your projections. But so far so good, I would say, but this obviously can change depending on how long it will take to recover the the traffic, the the traffic, projection for 2021, honestly, it's not really, It's not really the thing on which we are focusing now.
I mean, we are in a very short term focus at this moment on resuming work. Cutting costs, postponing CapEx, trying to limit the cash burn as much as possible. And then we see where we are when we close the accounts at the end of June. And how we can then project ourselves until the end of the year. 2021 is very long term for the moment.
Not just for us, but for many, many corporate in France and in many countries.
No, no, I accept that. I couldn't understand, but my question was more where because there's some margin embedded the order books that you have, which is very large, where any reason to think that those margin could be different because of the COVID-nineteen additional costs or whatever, yes?
It's too early to say. Too early to say because we are precisely working at present on how to organize ourselves to comply with the new constraints without deteriorating too much the productivity and the organization of the work, but we are learning day after day. Discussing with Gerald Stupler, the head of Vasey Construction just before this meeting, he was explaining to me some of the ideas that have been recently implemented on the size to make the work done as efficient as possible. So I don't have the answer to your your question about what impact it could have on our productivity and therefore on our cost. And therefore, what would be the question to address eventually with our customers.
It's too early to say.
Thank you. The next question comes from Jenny Pink from Citi. Please go ahead.
Hi, good evening. Just one from me. Anna, obviously, you've been negotiating with the government or have signed the MOU in terms of the CapEx and how you're going to be remunerated for that. Where are you on negotiation process. And as you said earlier, presumably a lot of it has been postponed, but should we be expecting any material CapEx outflow on Anna anytime soon or is the whole project now in question in terms of the spending, the additional CapEx on the runways, etcetera?
Okay. In Portugal, where we have one of our major asset. As you know, we have a long term view on things. We like we have in most cases, when you operate long term concession. You have to have a long term view on things, but particularly in Portugal where we operate all the airports of the country, and where we have established with all the different governments of the country, close and productive relationships.
And this is still the case, obviously, whatever the difficulty we encounter at this moment. So for Portugal, which has managed quite well so far. The, the virus crisis we think we cannot change our way of behaving just because of that. We have to be constant in our approach of the situation and that's why, if we project ourselves in the medium term, there is no doubt about the fact that the capacity of this bond will have to be improved and increased. That's why the Montigio project We continue to work on it.
It does mean that we will spend huge amount of money in the short term because we are at an early stage of the project. And we are essentially doing studies. So we do engineering work, not construction work and not before sometime. So we don't change the way of behaving on this one. It doesn't mean that we don't have a close dialogue with the authorities about how can we reduce some costs, some operating costs in the present moment, but we have to pay a lot of attention to the social situation of the country because we are a close partner of Portugal.
I don't know if my answer is clear enough, but it's clear really what we what we think. We don't have a short term view on the way we manage the issue in Portugal.
That's perfect. Thank you very
The next question comes from Nikolas Mora from Morgan Stanley. Please go ahead.
Hi guys, so that's one before we go. Is it time for you to get back to the government and relaunch the idea of a seamless plan in French store roads?
No. The answer is no. I don't think it is a priority, Nicole. We have paid a lot of attention in the way we manage our motorway during this difficult period. You probably don't know because you are not allowed to travel, but We have kept all the state oil stations and the shops open, all of them to make sure that the truck drivers could have a rest up whenever they have to fill in their tank, can take a shower, have a decent bathroom facilities, etcetera.
And that's this was very important, for the image of VINCI Autoroutes And I think it has been much appreciated by the authorities, by the Minister, and bond. But now the question about a new Plandro Lance stimulus package is clearly not the issue for the moment. Again, we have plenty of work to do on our motorways. We have the previous stimulus plan. We have the investment plan.
We have different things which have been stopped. We have the bypass of Strasbourg. All these works have been stopped. So now the priority is to resume the work and it has started, I think, yesterday or the day before on the A62, which is in Tanegaron in the Southwest of France. So little by little, we resume the work.
That's clearly our main focus. Thank
you very
much There are no further questions in the conference call. I will now give back the floor to the speakers.
Thank you very much, everybody. And, of course, the Investor Relations team is at your disposal to follow-up and to answer your question. So good luck with all the publications ahead. Good luck with the school at home for some of you and, have a great evening. Bye bye.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.