Good afternoon, ladies and gentlemen. We are very pleased to welcome you to this Bouygues Capital Markets Day, which is dedicated to Equans. Today, for us, it's particularly important. Equans, as you saw this morning in the presentation, is a key milestone in the Bouygues development. It will strengthen our resilience. It will increase our potential for value creation. Equans give us an opportunity to enter this market, very exciting market, energy and services. Thanks to this acquisition, if we consider the merger with Bouygues Energies & Services together totaling EUR 17.7 billion of sales in 2022, it's for us a huge opportunity. We knew this market has a huge growth potential. This is the main reason if we were considering Equans acquisition in November in 2021.
Since this acquisition, a lot of thing happen in the world, and finally our belief has grown even stronger with the growing need for sustainable world, energy-efficient world, and for supporting a customer as they switch to a low-carbon model. We undertook due diligence process and carefully analyzed countless documents to grasp the dynamics, the strengths, the weaknesses of Equans. Five months after the closing, I can confirm that Equans is already bringing critical strengths to Bouygues. Alongside a skilled management team, you will discover some of the managers this afternoon. We have a detailed plan. This plan is in place to make this integration a success, a success for all stakeholders, especially our employee, our customer, and our shareholders. Today, we want to share with you Equans strategic positioning. We want to better understand what is Equans, where they work, what they do.
We want to share with you our strategy to achieve our financial target, targets that I will show in a while. We want to demonstrate you today that everything is in order, that we are in the right place at the right time, and that we are executing our ambition to be able to double Equans margin by 2027. We are in Bouygues very enthusiastic about this acquisition. Our goal today is to let you come away with a clear idea of what we do and to give you the same confidence as we have about this amazing project. To be able to make it, today the main speaker will be Pascal Grangé, which is the Deputy CEO of Bouygues and CFO.
This is an opportunity for us to introduce part of the Equans senior management team, led by Jérôme Stubler, President of Equans. He will share with you his vision and his ambition for Equans. Some senior management from the Equans management team with Ana Giros, which is Executive Vice President of Equans in charge of Strategy, Development and CSR, and also CEO of Belux, Australia, and New Zealand. Thomas Jung, which is EVP of Equans, in charge of Operational Excellence, Innovation, and Procurement. Etienne Jacolin, which is Senior EVP in charge of Finance, IT, and Legal. After my short introduction, our idea is to share with you the content of Equans and the roadmap of what we plan to do in order we could achieve our financial targets. Jérôme will present Equans. He will present its strategic positioning.
Ana will describe Equans market environment and the macro trend on this market. Jérôme will return to the floor to explain the ongoing integration plan. After this, Thomas and Etienne will detail Equans plan to achieve optimal performance and profitability for Equans. Pascal and myself will conclude with Equans impact on the Bouygues group. Finally, we will be very pleased to answer any question you may have. I would like to emphasize a couple of important points. First of all, I would like to remind you that Equans is a very, very young company because it was formed by Engie, and it was composed of many entities who needed to be aggregated and consolidated. It was done in June 2022. Thanks to this consolidation, Equans is already a leader in energy and services business.
This is a company which is positioned on critical market transition that will sustain growth. We discover a management team which is robust, with a strategic vision which is perfectly aligned with Bouygues vision. We need to merge Bouygues Energies & Services and Equans, we know that the cultural roots based on service excellence and client satisfaction are shared by both entities. Within this company, we've got a potential to enhance operational excellence, to enhance profitability, and to enhance cash generation. All of this will help us to strengthen the group resilience, and we will show you this during this afternoon. As I mentioned earlier, Equans complement Bouygues in many way. I choose to highlight few of them on the page 7. Both company considers their people their top priority. Both company considers that skill, expertise, determination, responsibility, mindset makes a key difference in the people-intensive businesses.
Both company are committed to offer technical expertise, high-value-added solution to their customer to span the entire value chain in their respective fields. This is how we win the loyalty of our customer. Last, we share a common vision of the right place where we want to be. Therefore, we focus on countries with long-term economic prospect, political stability and strengthen ethics. In the future, in the presentation, when I refer to Equans, please note that this is a combination of Equans and Energies & Services as Bouygues Energies & Services became beginning of this year, a subsidiary of Equans. Let's come back to the new structure of the group after the Equans acquisition. We have now four business segments. A business that we call Construction, made of Bouygues Construction, where we could find building and civil work. Bouygues Immobilier, Colas for the road construction. Media with TF1.
Telecoms with Bouygues Telecom, Energy and Services represented by Equans, including Bouygues Energy and Services, as I mentioned earlier. Finally, if you look the new structure of the group, on the left part of that slide, we show you that before the acquisition, 75% of our group were oriented to construction. Only 10 points of this 75% was based on energy and services, and after the acquisition, we move the center of gravity toward asset-light activities. Finally, 33% of the revenue will be based with energy and energy and services. Finally, our portfolio of activities, it's very well-balanced through diversified businesses, developing the resilience of the group and help for federal position to provide solution to the environmental challenge that we face now.
On that slide, we show that we've got strong ambition for Equans. Strong ambition we believe in. We will demonstrate in the afternoon how we will achieve them. We want to double the COPA margin in five years and to convert as from 2023, 80% to 100% of our COPA into cash between working capital requirements. When I say we want to double the COPA margin in five years, it mean that we want to be at 5% in 2027. The management team of Bouygues and Equans are committed to reach this target together. We want this acquisition to be a complete success for our customer, for our employee, and for shareholders. It's my pleasure to welcome Jérôme. In order he will be able to show you a bit more about Equans.
Jérôme, the floor is yours.
There are signs that cannot be mistaken. Climate disruption, energy scarcity, and our ever-greater needs. The way we use resources and space needs to be reconsidered. There are so many equations to solve and answers to find. We have been underpinning progress in society for nearly 200 years. We participated in electrifying Europe, introducing nuclear energy, and installing telecommunication and internet networks. Now, as heirs to that industrial know-how, our teams are contributing in more than 20 countries to building a more efficient, resilient, and low-carbon world with our engineers and technicians, electrical, HVAC and mechanical engineering specialists, robotics, cooling, and fire protection experts. We design and implement innovative solutions for installations and infrastructure across thousands of businesses, industries, communities and institutions, thanks to our massive regional presence. In buildings, through heating, ventilation, lightning, maintenance, making them both greener and smarter.
In cities and regions, for rolling out electrical and internet networks and video systems, for developing low-carbon transportation. In industry, for improving processes, decarbonizing and optimizing performance thanks to robotics, digital solutions and artificial intelligence. With 90,000 people across the globe, we are a key player in energy and services thanks to our clients' trust. Everywhere, meticulously, we are performing actions that matter. Proud to make the three transitions real: energy, industrial, and digital. Every day, we are sending positive signals, thousands of solutions.
Now those signals are making a sign, a name, Equans.
Thank you, Olivier. Good afternoon, maybe good morning for some of you. I am Jérôme Stubler. I'm delighted to be with you to present Equans. I am an engineer by education. I was the chairman of VINCI Construction seven years before joining Equans. I participated to the carve-out, and now I'm delighted to do the integration of Bouygues Energy and Services within Bouygues. I will make the introduction of the speech trying to present Equans, its resilience, how do we engage with our people, our CSR roadmap, and then don't worry, we'll have a deep session on our performance plan. To start with, let's start by our mission. Our mission is quite simple. We are in fact contributing to the energy, the digital, and the industrial transition.
We are a technology integrator. For that, we need to be technology agnostic. In terms of energy transition, what we deliver is quite simple. Our value is to decarbonize the energy chain, meaning that we, in a world which is becoming a lot more electrical, if you think about it, the energy transition will be electrical. From the creation of the energy, its transportation, and its usage. In the industrial transition, we work in two elements. We are in the automation, the digitalization of the process to optimize production, to optimize the process by themselves, and also we are contributing to something which is happening at a scale which is accelerating right now in Europe and in North America, which is the relocation of critical industry in biology, in pharmaceutical, and in microelectronics. For the digital transition, we are first a builder.
A builder of fiber networks, a builder of data center with a key position in Europe. We are also plugging and a leader in the plugging of the lower level of the IT, which is the IoT, what govern the mechanics, and the IT. We are also producing data, making them more smart and intelligent at the level of the factory, the city, or, sometimes a grid. Regarding this, you can also represent what we do through the life cycle of the energy and the data. We are present in the production of the energy and the data. We are present on the transportation of the data and the energy, and we are present on the usage.
That's why you see a lot of the industry which is reporting to this graph, which is a big part of what make our resilience, because we are working for almost all kind of the industry, and I will come back on that. Regarding the figures, and those figures are the figures combined of what Equans plus Bouygues Energies & Services make Equans. In the rest of my speech, when I will say Equans, it is a sum of the two company which has been merged in the 4 January, as explained by Olivier. Our sales are EUR 17.7 billion. We're nearly 90,000 employee, and what make our resilience is the fact that 85% of our revenue is recurring, and I will detail how it is recurring in the next slide.
Our position in the market is that we are clearly now a leader in our market with a significant gap with the competition. What bring the size? The size bring mainly two things. Number one, an ability to anticipate the need in term of technology, because sometime we know a technology which is arising somewhere in the world, and we have the capacity to interconnect our team and be in advance to another market. Second, the size bring us a procurement power that of course we're going to try to secure very quickly. This slide is very important to understand because it's expressed in one page everything we do for our client. The first part of this wheel express the six expertise that we have in term of design, installation, and maintenance in six domain.
The first two big one, it need to be clearly understood, we are an electrician delivering 36% of our revenue in the total value chain of electricity. From the transportation, the high voltage, the medium voltage, and the usage of the electricity. We are an HVAC company. HVAC meaning heating, ventilation, and cooling. What make in fact heating, cooling, and all the airflow within the building. The combination of both of them is essential now because the change from gas fire to electricity is coming from that core competence that we can combine. The third element is mechanical and robotic. We are also present, and you will see through the example in deep process in what I call the fluidics. Cooling, negative cooling and fire protection are the two next, which are what we call critical services. Why critical services?
Because when they fail, production fail. Meaning, you will see that need to be very close to our client. Finally, technical facility management and digital businesses. Yes, it represent 18% and 7%. We are delivering EUR 1.3 billion of digital services to our client, so we are also a digital company. The second level of the wheel is the client for who we work. 70% of what we do is delivered as a local business, at the level of a building, at the level of a factory, at the level of a city, at the level of the interconnection between the city. The differentiation we make is coming from the density, the densification of our networks. We need to be at less than half an hour of any of our client. What guide our organization is in fact the regional organization.
We need to be organized by country, by region, by city, and sometime for the big city, by part of the city. We operate in all the components of the six specialties that we have. On the right, that's our specialty, which are representing 30% of what we do. The way we are organizing ourself is linked to the way we create our differentiation. Our differentiation is coming from our hyper specialization. When you are, for example, in transportation business, you don't have the same team to work on the signalization of a metro and the system which is used for high-speed train. It's two different technology, two different team, two different client. In fact, we mimic the way our client are organized, and that's how we organize ourself to create value.
Regarding our brand, we have, and it's another factor of differentiation, 80 powerful brand that we have been structuring in three level. Equans, the global brand, which bring the strengths of the company, which is meaning the equation of the answer to the three transition. We have local brand. Local brand which are powerful locally. They have a sense for our client, which are Axima, Ineo, Bouygues Energies & Services, Icomera, Conti. We have also specialist brand. Those brand create a value which is transversal to the company expressing a competence. We have created recently Equans Digital, Equans Nuclear. We have a brand called Powerlines, which is number one in the U.K., in Austria, in Germany for high-tension line and catenary.
We have some brand like Pierre Guerin , which is in the top three players in processes for the pharmaceutical and biological industry. We recently created Equans Data Center from the merge with Bouygues Energies & Services to strengthen our presence by merging the two team, and Equans Solar & Storage from the same reason. In term of geographical presence, our two big presence are Europe and North America. In Europe, even, we are in fact delivering more or less the entire scope of what we do in France, Belgium, the Netherlands, and Switzerland. We have also a strong presence in the U.K. as a leader of the zero carbon solution. We have a significant position in North America, in the U.S. and Canada, which is good because with the Biden plan, we see a lot of investment coming there.
Globally, 20 countries which are working sometimes on export mode in 50 countries. The motto is simple: no dispersion. We want to concentrate ourselves in the country where we are. IMPACT. IMPACT is in fact our manifesto, our performance and sustainability goal. That's in fact what we have been expressing between ourselves to demonstrate, first of all, our aim. Our aim to do what? Deliver excellence in operation. Deliver that with something which is a three must-have: safety, ethics, and cyber at the first row of our goals. Second, clear goals for the planet, for people, for the communities, the shareholders, and the employees that I will be telling later. Now let's talk about our resilience, the resilience of the model.
Our resilience are coming from three element: a very vast portfolio of offer, a quite complete geographical footprint. Thirdly, a vast series of customer with very long-term relationship. I will go through them. Going through, first of all, to explain the portfolio of expertise, the 6 expertise we have, explaining each time a project in the domain where we are. Of course, I start by electricity. As I said, electricity is important, 36% of our sales. To show that, just an explanation that we have the responsibility over the next 14 years to do the street lightning, the Wi-Fi, all the system which is going to bring street communication system in Washington, D.C. The purpose of this, of course, is to reduce the consumption of energy and to bring a smart city within Washington, D.C.
We are good in electrical in North America and in Europe. Mechanical, sorry, mechanical and robotic. We master mechanical and robotic in France, in Belgium, and in the U.S. To illustrate that example, a project we have been delivering in 14 months, which is a fully automatic plan to pack, store, and distribute the food ration for the French troops, the French army, troops. In the process, thousands of food ration per day automatically. To illustrate HVAC, I will go to an example with ASML. Before that, HVAC is absolutely a key differentiator to us.
We are number one by far in the critical HVAC in Europe, in nuclear, in all the clean room, simply because we have a very important engineering capacity based in Nantes, in France, which is serving our top specialist, as well as one in Brussels and one in Rotterdam. We serve ASML, not really as a client, but as a partner. ASML is a leader in the photolithographic machine. I'm reading when I say photolithographic. It's not so easy to say. What do they do? They do the machines that you see on the screen, which are in fact printing the wafer of the microelectronics. That's the top level in term of clean room.
What we do is that we install their machine, we install all the pipe which in there the machine, we deliver turnkey all the clean room for them. Next slide is on the cooling and fire protection, where for Eisberg, a client in Austria, we are delivering photovoltaic on their facade to power new type of heat pump using natural refrigerant to decarbonize also the system of heat pump using ammonia and carbon dioxide refrigerant. Next, the next one express the facility management. For the facility management, we have a positions which need to grow still, even if we have a very good position in the U.K. and in Canada. That's a contract we recently won for the University of Birmingham. What is important to be understanding that the FM business, the RFM business is changing. Why?
Our client are asking us not only to maintain their equipment, but to switch their equipment to a new system, which is low carbon. That's a huge opportunity when you are a multi-tech company having competence in energy, and you are positioned on the service business. Iftikhar Baig, the Project Manager, is going to explain what we do.
Here in Birmingham, improving infrastructure at the university's student village. We are operating in three areas. Firstly, building. We're constructing 496 new low-carbon student accommodation units. Regeneration with the refurbishment of 746 existing rooms, and the optimization and management of these facilities, and this is through implementation of a 50-year facilities management and lifecycle contract. The efficiency of the use of energy resources is also further enhanced, and this was through our decision to produce heat from 100% renewable sources. Pritchatts Park Student Village allows us to illustrate the quality of support that we can provide to clients like the University of Birmingham, and this is through cutting-edge infrastructure and a management which is crucial to the energy transition.
Thank you. If we come back on the slide, please. The system is blocked, apparently. No. Thank you. Yep. Yes. Thank you. Last example in terms of expertise is digital and ICT. For that, we have a project for which also at the far end of the high tech for SOITEC, which is the world leader in silicone on insulator. We are installing a system automatization of their plant, fully digital from A to Z, which in fact make 5% to 7% gain on their productivity. Abdelkarim Delassy, the Technical Leader, is going to explain what we do.
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Thank you. Going to the second factor of diversification, which is our geographical footprint, I will focus on six areas. Number one, France. The map is clear. You can see the density of our networks with more than 600 agencies corresponding to the fact that, yes, we are then an half an hour from any of our clients. It's a key factor of resilience. France, you understand that, is a core of the engine in term of the capacity to develop new technology, in term of pushing new solution. We are covering the entire chain of the value from design, installation, and maintenance. EUR 6.8 billion with more or less 83% of what we do, which are recurring. Our strengths are some very strong specialty, such as clean room, nuclear, transportation, data center, and recently, very good position in Europe in gigafactory.
We are positioned in most of the fast-growing markets that Ana Giros is going to explain in the next slide. In the U.K., we are positioned in 74 locations, 74 agencies, in fact, we work in hundreds of locations, which are the premise of our client. With two bus-main business, 50% of what we do is Hard FM, technical facility management, and 50% of what we do is low carbon transition of the building, mainly for the public sector. What does that mean? It means that we install solar panels, we install heat pump, we install system of insulation of the building to reduce the consumption and change the energy footprint of the building with a key position on that sector.
Regarding USA and Canada, where we deliver a little less than EUR 2 billion, with a strong capacity of growth, thanks to the Biden plan. We are in the U.S. organizing five type of activity. Electrical and HVAC in New York and New Jersey, clean room and pharmaceutical and electronics on the East Coast, which is good because we see a lot of reinvestment in that domain. There is a new reinvestment in the U.S. to make an autonomy in term of microelectronics. Transportation infrastructure in Florida, serving the automotive industry around the Great Lake, which is very good because there is a huge transformation right now of the chain going to the electrical vehicle in North America.
Of course, photovoltaic, where we are a player in Florida. In the West Coast of the United States, in California. In Canada, we are well-positioned in Hard FM, building, and industry. Belgium and Luxembourg. That's, of course, our most dense position. We are a company which is coming from Electrabel, and our company was doing everything for the industry, for Electrabel and the rest of the industry. Meaning that it is difficult to find something that Equans Belgium is not able to do in Belgium. In fact, this country has integrated in itself a huge level of engineering, allowing to take project from A to Z. It is our second country in term of capacity to deliver everything after France. What you need to understand is that we are 5x bigger than the second competitor in Belgium.
In Switzerland, we are present in the 26 canton with 110 agency. What is fantastic is that when we combine the position of Equans and Bouygues Energies & Services, which is in fact the ex Alpiq InTec, we have a very good combination geographically which fit very well. We are present now in HVAC, in the thermal energy, in electrical services, delivering EUR 1.4 billion in Switzerland, with more or less 65% of the market, which is recurring. In the Netherlands, we have also a very large presence, delivering EUR 1.2 billion of revenue. What is very good in the Netherlands is that their model is advanced. What do I mean?
I mean that the Netherlands have been deciding to get out of the gas quicker than the rest of Europe, which push some transformation in the energy chain. So everything we see in the Netherlands are four, five, six years in advance to any country of the rest of Europe. It is fantastic for us because they are key technology in the energy transition, in the industrial transition, microelectronics, bio food, which are in advance by five, six years that of course irrigate our knowledge. The third element, of course, is the vast and diverse customer base and the long-term relationship. To illustrate that, first of all, we are working for four main domains. 42% of what we do is for building: office, school, university, hospital, shopping center, factory.
What is important to be understood is that a large part of what we do is for the renovation of those building. The renovation is growing fast. Due to what? To the obsolescence of the building coming from the change of usage and the change of type of energy. When you renovate a building, sometimes you don't destroy the building, but you change the entire system which is in it. Second, the cities. 5%, which is growing fast thanks to the fact that people want to connect, protect power infrastructure and citizens. That's what we call smart city. Sorry. Intercities, which is 70% of what we do in all the link which are coming from the grid reinforcement and the data network reinforcement. Finally, that's important to understand Equans, 36% of what we do is for the entire industry.
We are very linked to the industry and the investment of the industry chain and their maintenance. 35%, 30,000 client every year. We work every year for 35,000 clients with 1 million contract signed a year. 70% of our contract are small, less than EUR 50,000. 85% of what we do is recurring. 30% are, in fact, long-term contract, maintenance long-term contract. 20% are framework agreements. That mean we sign a contract, which is a framework, and from that contract, every year we have a new work which is given following the framework. 35%, we don't have a long-term contract, we don't have a framework agreement, but the same client call us because we do the maintenance of their equipment, and they just call us because we are the people who know their installation.
We have a robust backlog, which is sound in two nature. The fact that it is bigger than the one we had at the same time last year, and because the margin inside is higher. The client love us. We have a NPS of 53, which is very high for our domain. Let's listen to a client of VIRTUS, which for whom we have been building several data center in London.
VIRTUS has been working with Bouygues as a partner with us for over 10 years now. We started at London One back in 2010, 2011. Since then we've worked together on VIRTUS LONDON 2, 4, 5, 6, 7, and currently we're working on LONDON 8. As a developer of data centers, we look for a partner that works with us to develop the scheme how we need it, how we see it. Bouygues have been very open and accommodating in learning the way VIRTUS works. They understand our business now like nobody else probably, and as such, they provide invaluable input into how we design and ultimately how we build our data centers. Our customers are very demanding, and Bouygues have been very good in accommodating that. They've helped us out with our contracts with our customers significantly over the years.
That's a really key thing that I think being flexible and being able to change at short notice is a real key attribute to have. I think working with the Bouygues team has been great fun for everybody that's been involved. We sit in the same office, we share the same problems, we share the same results. We all know each other, and we know each other well enough to be able to talk frank and open, and it just makes life so much easier to deliver our projects.
All that is possible simply due to the engagement of people. Now I'm going to explain why our people are our main asset and what do we do to drive the success of the company, its growth and its performance, which is totally linked to the capacity, the ability to recruit more people, the ability to train them, the ability to motivate them. First of all, a picture. We have 90,000 employee. We recruit more or less 10,000 employee every year, and this is growing. We have a large investment in training. Merging the two company, we have 2,000 training program in eight university, and 85% of our employee are trained every year because our skills are quite technical and need a lot of training. We heavily invest in apprenticeship, which is essential right now in Europe.
In terms of commitment to our employee. First of all, we are very strict in making safety our top priority. Ethics and cyber are two strong must-haves. In terms of system, which are fully set, and in terms of controlling the behavior. We invest in creating local employment with an important investment locally on local schools and with the agency. I can tell you it works. Thirdly, it's very important to us that we work with all to have an equal opportunity. As an example, we have the ambition by 2026 to increase by 20% the number of women in senior positions within the company. Finally, to create the motivation, the engagement, you will see that we are engaged to share the fruit of the success of the company. Our plan is simple. Three words: attract, develop, and care.
The plan are local, tuned to the need of each of the 900 profit center, and very practical. We also launched something which is absolutely important, which is the Compagnons de l'Energie guild worker. The Compagnons de l'Energie guild worker is in the continuity of the successful Minorange of Bouygues Construction. We have the ambition to have a powerful guild worker organized in our first five countries by 2026. The ambition is coming from the fact that we want to recognize our technician. We want them to transfer their knowledge from one generation to another, which is essential at the when the battle of talent is coming and to reach the excellence in operation. That's our executive committee coming from the merge of Equans and Bouygues Energies & Services. I can tell you a strong team, before, a team.
Experienced people having led similar company in the past. Having most of them an international expertise with a strong business transformation experience. The last part is our climate roadmap. First of all, starting with our own commitment for ourself, our Scope 1 and 2. Our objective is to quantify our footprint, our taxonomy compliance, our waste strategy by 2023 in order to be able to sign a letter to SBTi at the end of the year, in order to be able to submit that in 2024. The two key drivers, which are representing 90% of our footprint one and two are car and building. For car, we are committed to have 30% of electrical car by 2026 and 80% by 2031.
For the building, to have all our building by moving or changing our building, renovating our building to ABC consumption class by 2031. Regarding our external scope, 3A with our supplier and 3B with our client. With our supplier, our commitment is to be able to have a footprint of the 3A scope by 2024 and to reduce by 30%, that's our plan, our footprint by 2030 working with the supply chain. Regarding the 3B, most of what we do is in fact decarbonizing our client. That's our job, and it's a key driver of the growth of for, of the demand. What we want is to be more proactive in proposing low carbon solution to complete the offer and measure the quantity of project for which we create by proactivity the project that we are offering.
I hope that this first chapter give you a better understanding of who we are. Ana is going to explain the extensive opportunity and which are in front of us, but with one keyword: being selective.
Ana, the floor is yours.
Thank you, Jérôme. Good afternoon, ladies and gentlemen. My name is Ana Giros. I joined Equans very recently after 25 years in the industry, first in the transport, then in the environmental sectors, holding both first national and then large international positions. Joining Equans a few months ago, it is indeed very exciting, the many great opportunities we have ahead of us. What I would like to do now is to show you how this will allow us to drive the special word selectivity in sizable, fast-growing markets where we know we can create value. Turning to my first slide, on the left-hand side, you can see the projections of our traditional markets. It's in the range of 3%-6% growth year-on-year. On the other side, you can see some examples of double-digit fast-growing markets where we are well-positioned.
Let me now take you through some very concrete examples to illustrate. It doesn't need me to tell you that renewable energy production is ramping up very quickly and is taking over the energy mix. In respect of carbon objective in Europe, the target is to reach 65% of renewable production by 2030. You know, we have the collective carbon neutrality goal by 2050. By then, it is widely predicted that fossil and gas-produced energy will be almost nil. This fact, coupled with the increase of energy demand worldwide, the energy demand is projected to grow and to raise by 25% in 2030. All this is creating a huge acceleration of projects in the clean energy space. This is Equans' sweet spot.
At Equans, we are strong and trusted partner in renewable energy market worldwide. As you can see, we already have installed more than 5.5 GW capacity in solar. This is accounting for EUR 500 million of our sales. In parallel to that, nuclear is consolidating as low carbon energy, and it's complementing well the renewable. In this sector, we have leading expertise. It accounts already for EUR 350 million turnover, mainly in France and in Belgium. To support our customers, we intend to be involved in projects from the early beginning and from the engineering phase, like this one that you have in the slide on the U.K., where we have signed a frame contract on engineering to deliver 11 solar park projects, nine of which are already in execution.
These nine will account for 330 MW installed capacity, and just to give you the idea of the size, this is enough renewable energies to power 70,000 homes across the U.K. Moving to the next slide. Changes in production of power, it generates direct urgent adaptation needs in the grid infrastructure. Following the massive influx of renewable with on top decentralized production, the problem is now how to be able to bring this green energy to the industries, to the cities, and to the homes. This, without doubt, is causing considerable congestion in the transmission and distribution networks all across many countries. In Europe, Equans has a large footprint and robust capabilities in the T&D sector. We have leading position supporting operators in France, in the U.K., in Netherlands, and in the major countries.
We are also building capabilities in Latin, especially in Chile, where the energy market is developing fast. Let me show you what happens in Germany because it's very illustrative of what is happening in other nearing countries. Where today there is a strong grid congestion due to the mismatch between the wind energy generation in the north and the strong demand of energy in the industry of the south. The Wahle-Mecklar project for our client, TenneT, is a good example. We are building part of the high voltage line that will enable the German North-South electrical connection. With our 30 kilometer of overhead power lines, we are helping to increase the transition and the transmission capacity for wind energy all along the north and south exit of the country.
Now moving to the mobility field. As you know, transport is clearly shifting to electrical vehicles, from scooters, from cars, from buses, and now also electrical trucks. Everything is shifting to electric. This generates the need of EV infrastructure investments in cities, but also in main roads and all over the territories. Let me give you in this frame two example of areas where we work, where we see strong potential for growth. Example number one, it's the electrical vehicles charging infrastructure. We have a very good example in France because we have already installed 25,000 charging station, and 30% of which include supervision, maintenance, digital services, and even web application for support to payment. We are truly delivering end-to-end solution to our customer in this field. The example number two after the EV charging is the gigafactories Jérôme already mentioned, where the industry is producing batteries for automotive market.
Thanks to our commanding expertise in industrial processes, especially in the electric and the clean room design and build, at Equans, we are able to support these complex projects across Europe, and now you will see across the U.S. too. The example I give you here is Douvrin. Douvrin is the first battery plant being built by ACC in France, and we are an EPC contractor for the clean room and the HVAC systems. As you know, battery industry is the key for the future of electrical vehicles market and globally. We are present in 7 out of the 16 gigawatt factories under construction in Europe, and we are supporting Tier 1 developers like Envision and Northvolt.
More recently, we have also entered the U.S. market with three projects that we are building for our client, General Motors. In the next slide, I want to mention some of the specific markets strongly linked to decarbonization that have potential across all our geographies. First, the electrical heat pumps. The electrical heat pumps will replace the fuel and gas boilers for residents and industries. This market is projected to triple by 2030. Second, the acceleration of projects developed in the green hydrogen space, where this market is expected to quadruple in the coming 15 years. This is even a pessimistic projection. You see, hydrogen is everywhere. In both cases, we have the right footprint and the expertise. We already have solid projects under execution in Europe that show tangible results in term of performance, also in term of net reduction of CO2.
The example here is in the U.K., where housing association in Sunderland, where the installation of ground source heat pump allowed to significantly improve the carbon footprint of 364 homes. Our client, Gentoo Housing Association, is delighted that is able to contribute to tackling climate change, and we see these type of projects accelerating in business, but also in industry. Finally, let me touch on another key market for us which has enormous potential. Let me talk about the digital transformation, which has been accelerating already for many years in homes, cities and industries. We are present in this market with EUR 1.5 billion sales in digital solutions and EUR 500 million in data centers design, construction and also operation. There are many examples I could give you in this field, but one of my favorite ones is Marseille.
In Marseille, we are using our expertise and specifically the 3D digital modeling, the technology called BIM, to be able to transform this historical building in a city center into a modern iconic data center for our customer, Interxion. It has been in operation since 2021 and provides our client with more than 7,000 square meters of IT room. I do hope that these examples I've shown you give you the sense of passion and the sense of commitment to the exciting markets that we are addressing. As you have seen, all of them are based on solid macro trends, and all of them match very well our footprint and the expertise of Equans. With this in mind, let's move to innovation. In this field, the issue is not to find new subjects.
We have many subjects already that we are developing. Our challenge is to focus on few top priorities in the areas that are linked to the fast-growing markets I've just mentioned to you. You see them in the bottom of the slide. 95% of our innovation come from the field, so listening to our clients and developing concrete solutions that we are able to evolve and deliver to them. The other challenge is how to share this innovation across Equans between our own teams. To do this, we have created exchange forums such as thematic business clubs, such as innovation awards, that allows us to spread knowledge and ideas across the entire business.
Everything from high temperature heat pumps in Austria to inspection robots in the automotive industry in the U.S. This clear focus and collaboration across the business demonstrates our confidence that we are in dynamic, that we are in exciting, and that we are in solid growing markets. Again, we can be selective on what we drive forward.
Allow me to hand over to Jérôme, who will explain you how we make this effectively happen. Jérôme.
Thank you, Ana. You have seen that the market is there. The issue is not the market. The issue is how we're going to be selective on that market. For that, we show you this slide. On the left, how we're going to be selective on project, and on the right, how we are going to be selective, I would say, as a general behavior. We set what we call the alpinist rule. The alpinist, when he is on the rock, he's got his two hand on the rocks, his two feet on the rock, and he doesn't move. That's good. It is the same for business. You know, when you don't move, you take less risk. You work continuously for the same client. When you want to cope with those change, you need to be prudent.
As the alpinist, when he's moving, he only remove one hand or one feet at a time. In business, that's our fundamental rule for selectivity. We don't move two parameter. The parameter are what? First of all, the type of project, the skill which is required. Second, the size of the project. Fourth, the client we work for. Fourth, the location, the country we work for. We don't change two parameter at a site. No go if there is to change. To do that, we need to have a solid buyback with a solid expertise and a team which is dedicated, and a strong hope, which is our contract. What does that bring as a behavior in the company? We want to be selective and giving priority to margin over volume. We want to focus on existing geography.
We want to avoid dispersion in term of technology. We have enough technology in-house. Be very selective in the large project, concentrating ourself in large project which are where we master fully the specialty. Going to the third chapter of the presentation, Together. Together is a name we have given to what we call the Inclusive Integration Plan that we do between Equans and Bouygues Energies & Services. I can tell it is on track. Even we are in advance in our plan. First of all, the two company are fully complementary in term of skills, in term of specialty, and in term of geography. We define a motto which is simple: Take the best of both in order to make sure in this buoyant market that 1+ 1 is greater than 2.
Merging our HR, our financial, our IT performance so that we take the best of both. Before that, something which is fundamental. We define between ourselves the principles of management that we want to have in the company to make sure we work all together on the same page. First of all, a decentralized model with clear rules and governance, because when you have 1 million contract a year, you need to take your decision as close as possible to the field. For that, you need to have every day 100,000 of decision which are taken. To make sure that they are taken in a way which is understood, you need to have principles which are very clearly expressed within the company and systems which are in fact allowing us to see what is happening within the company.
Second element, single line of responsibility. To build with the operational manager a single line of people engaged, empowered, and responsible in order that they are delivering and they are responsible of the result that we are going to show in the next slide. Third, lean at the top. At the top of any top within the company to allow quick decision and optimize overhead. Four, something which is more different from what you hear, what we call servant leadership. Having, in fact, the project manager at the core of the company, so that all the manager which are above are there to serve the efficiency of our project manager so that they serve our client, so that they serve our EBIT and our cash. That's a simple model where in fact we want just to make the life of our people simpler every day by serving them.
Of course, with the three absolute must have that I have already explained. Where are we on the integration plan? I can testify that we have a very high level of engagement and motivation simply because it's coming from the fact that people are proud to build Equans. On both sides, if you look to their history, for the first time, they're becoming core of our business. Second, we have a clear action plan organized in four countries, France, Canada, U.K., and Switzerland, where there are some overlap between the two company, and then several functional work stream plan. Third, we are focused on delivery. We have a weekly meeting which is organized, and we are checking that it is delivered. Before all, 99%, even more than that of our people have no change.
Meaning that we are focusing ourselves on delivering the operation on a daily basis. We have a strong governance with a PMO team and two subjects that we are following in detail, our IT cost and delivering our purchase gain. Yes, we are on track. We have set the organization of the top co of France, of Canada, of the U.K. already. We are working on the last country, which is Switzerland. We have defined the IT architectures, we have been plugging Equans to Bouygues group, and we are aiming to plug Bouygues Energy Services before the end of June. Now, let's zoom on the IT. You have to understand that we did one of the biggest IT carve-out ever by creating Equans. We deliver that. We are now fully autonomous. When we did that, we created a clean organization.
We already removed 50% of the software which were used by the company, before that. Which give us a clean architectures w hich is very good to be able to simplify the way we're going to integrate Bouygues Energies & Services. We have a plan with a budget of EUR 85 million. EUR 50 million for the IT improvement CapEx over the next four years and EUR 35 million for the IT integration non-recurrent charge over the next three years, of which EUR 15 million are in 2023. Going to the fourth chapter, the one you are especially waiting for, PERFORM. PERFORM is before all a clear ambition. Our strategy is simple. We want to become the best in class of operational performance by improving significantly our result and match the result of the best player.
To achieve that, number one, repositioning the loss-making activities. Number two, resolving the legacy project, and we are very well on track on that. Third, working in detail on productivity, procurement, pricing, and cash. We set a strong performance plan called PERFORM. Thomas, which is in charge of excellence in operation, is going to explain that together with Etienne.
Thomas and Etienne, the floor is yours.
Good afternoon. I'm Thomas Jung, in charge of professional excellence, innovation, and purchasing. I'm in the energy and services for now 23 years, having led profit centers in facility management, utilities, and B2C services. I've also experienced two significant merge in my career. I'm going to detail the PERFORM plan, which aims to improve our profitability. Let's first have a look to what has been done in the past years. Bouygues Energies & Services had a plan called DIOGENE that has been launched in 2019. That gave good results because the improvement of the COPA margin was of 4 points, and the improvement of the cash was above EUR 700 million.
The plan of Equans was called 1ABCD2. It was launched 80 months ago. The result is an improvement of the margin by 0.8 points and an improvement on the cash too. In these two plans, the first priority was a cultural change with the implementation of fundamental pillars that are net margin focus. We no more talk of gross margin over volume, and it has been said, being more selective on the projects. All the base profit center, and we have 900 of them, have also built a bottom-up business plan, including a performance plan that has been described in a dedicated application that allowed us to have an aggregated view of the plan and, consolidating that and adding some additional ambition that I will describe, we've been able to build our PERFORM plan. Before presenting that plan, let's first detail what is the starting point.
Thank you, Thomas. Good afternoon. My name is Etienne Jacolin. I am the CFO of Equans, also in charge of legal and IT for the group. After eight year in Arthur Andersen and four year in a U.S. multinational, I worked 23 days for Engie. I, to different position in the group, mostly as CFO, but also as CEO, particularly in the energy and service businesses. I was part of five significant merger, which is an important point for our new project. In my last position at Engie, as CEO of the European business unit, I had a specific focus on renewable energy. Knowing the energy and service business and seeing the drive of Jérôme, I jumped as CFO into the Equans projects that I strongly believe in.
Very happy to be in Bouygues today and working on our integration that is going very well and on our smooth merger with our new talented friends of Bouygues Energies & Services. Let's move now to my presentation. This slide is an important one because it's the first time that we present you figures of 2022 of Equans, including Bouygues Energies & Services. Before looking at the figures, let me highlight that 2022 was a specific year for both entities. Both companies had to work on their carve-out from Engie or Bouygues Construction and prepare themself for the merger. Equans had to finalize the group setup, able to work as an independent company, prepare for the closing of the transaction, and initiate its first performance plan.
Coming back to the figures, Bouygues Energies & Services was previously consolidated within Bouygues Construction in 2022. As said this morning, sales amount to EUR 3.8 billion and CAPA reached EUR 137 million, confirming the improvement of profitability. The COPA margin was 3.6%, up 0.8 points compared to last year. The 2022 Equans pro forma figures incorporate Bouygues accounting principles. Sales reached EUR 13.8 billion and COPA was EUR 278 million representing a 2% margin. This 2% figures for the whole year seems quite low compared to the Q4 margin that was discussed this morning. Indeed, our activities have some seasonality leading to non-linear profile over the year. Q4 usually is the strongest quarter in terms of margin and particularly this year.
Finally, if you had Equans and BS together, 2022 pro forma revenues reached EUR 17.7 billion. COPA reached EUR 407 million and the COPA margin was 2.3%. This is the starting point of our PERFORM plan. Cash is positive at year-end and reflects a better than expected performance at Equans. Regarding BS, the year-end cash position includes an exceptional dividend of EUR 270 million in the preparation of the shares transfer to Equans. This transfer was closed on January 4th, 2023. Thomas?
As I told you, we decided to set a new performance plan, putting together the two previous one and to call it Perform. This plan is also supported by a package of incentives that will be presented later on. Perform has been built taking the best of the previous performance plan, aggregating, as I told you, all the profit center bottom-up action plan, and adding a top-down ambition on procurement because of course the base profit center cannot have a global overview of what is achievable. It's a very detailed plan, and we estimate that the order of magnitude of the potential margin improvement is around 3.5 points, and we are confident in that figure. The plan is based on five main programs on which we now communicate actively.
The first program is on procurement to deliver additional savings, combining the spend of Bouygues Energies & Services and Equans. There is one program on pricing with the objective to increase our order margin, our order intake margin. The two next program are about turning bad news into good news. The bad news is that yes, of course, we have some project that are at loss and some profit center that are at loss. The good news is that there is no fatality. It's fixable, sometimes very quickly. We know what to do, and we already had significant results on that.
As we are facing some legacies on some project, we decided to set a dedicated action plan that is called Bug Killer because just as in a software you may have a bug that you need to fix, we sometimes have bugs in the projects that we need to fix. This is about the name. How do we fix it? By being more selective. We already talked about it and by improving our project management teams. Concerning the profit center that are at loss, Bouygues Energies & Services already launched an action with very good results, we are going to use exactly the same recipe and we are quite confident that we'll have good results also.
The last program is on SG&A optimization and increasing the productivity on the field because we have room to improve the global efficiency of our project. There is always room for continuous improvement. Of course, in addition to these five programs that are concerning margin improvement, we have a program dedicated to cash improvement that Etienne will describe. This is PERFORM. Now I'm going to detail on each program what is our strategy, what we have done so far, and what are the next steps. The five next slides have the same structure. You can see on the left side what are the main actions on this program and some examples of actions that we've launched. Concerning procurement, we have a total addressable spend of EUR 9 billion, and we've already identified more than EUR 60 million of savings.
Our very first action was to build the tool that gives us a good understanding of our spend. Now the tool is built and we have a clear view of who are our main suppliers and where we need to work first. It allowed us to launch the very first negotiation and we are now negotiating with almost 100 main vendors. Taking into account of course the new size of the group and the best condition between the one that Bouygues Energies & Services had and the one Equans had. We are also building a global procurement performance plan in each country, helping them to identify performance levels that some countries hadn't seen so far.
One of the key action will be to develop catalogs so that we'll be able to widen the spend that is covered by purchasing team and to massify purchasing in order to increase the spend coverage. We need to be able to monitor the flow of order and to develop and deploy a e-tool. Sorry, a e-proc tool. We already mobilized a dedicated task force. We built a procurement plan in three countries, and we started, as I said, the negotiations. Of course, we have thousands of vendors, and it will take quite a while to renegotiate all contracts. It will take three to four years to get the full potential of the savings, but we'll have significant gains beginning 2024. Concerning pricing, we are quite confident in the fact that there is room to increase our price.
We did it last year. If we look to the large project that are reviewed in the group risk committee, now they are never below 6% of net margin. It was not the case previously. We already mentioned that we also increased our selectivity, looking only for project that we know will be able to deliver in good conditions. What we are also actively working on is to make a precise market segmentation in each profit center, and then on each segment to set very clear rules of what is the minimum margin that is expected, what is the average margin that we target, and what are the margin that we expect on additional work or variation orders. We started this exercise last year, and we are going to improve it this year.
The levels of margin will also be fine-tuned according to the size of the project and the customer urgency. We are also working on improving our quoting tools and of course on building dashboard that will allow us to monitor the order intake because of course we want to be sure that the pricing policy. Sorry, that the pricing policies that we set are well applied. Concerning our project performance plan, as I told you, we are facing some legacies and difficulties in some project. The good news is that some of our major bugs have already been fixed last year and that the list is decreasing. What have we done? For each bug, we define an action plan.
We set a dedicated team to help the project director, Most of the time we build a strong claim that is supported by the top management in the negotiation, As I said, we already sold a lot of them last year. Good news is the list of Bug is decreasing. This is the reactive part of the program. Of course, we prefer to work on the preventive part of the program, which is to prevent the problems before rather than solving them. When we look to our major projects, the three main causes of losses are: the first one, for 30% of them, the problem is the risk taken on the project. For 30% of them, it's mainly project management issues, For 15% of them, it's human resources capabilities.
What have we done to rectify this situation? Four main action. The first one, we already described it. We have strengthened our risk committee on several aspects, selectivity, the team. We want to be sure then that when we take a project, we have the team available, and then the methods, and we ask for clear technical details to be sure that the team is mastering what they are going to do. Secondly, we have strengthened our project methodology, writing the key principles of project methodology. We've written a book, and then we've set two dedicated trainings for our project management, Level 1 and Level 2. Already trained almost 1,000 of them, and by the end of the year, all our project directors will be trained.
Third, we defined what we call the Bug Killer methodology that should allows us to react quicker and stronger. The main point is that we ask for full transparency on the projects so that we can be informed at a very early stage when we face a problem, so that we can have a clear diagnostic, set a clear action plan, and have a dedicated team to support the project director. At last, as we want to have a very clear view on what is happening, we build a tool that is now connected to all the ERPs we have in the company. It's a project cockpit that allows us to have a very good view of what is the project margin, net margin, what is the cash position with automatic alerting in case of deviation.
It allows us to have robust monitoring and to make sure that regular and exhaustive reviews are made on each project with full transparency. Concerning the profit center that are at loss, you can see the figures. We have some of them. Bouygues Energies & Services has been very successful to turn around most of them. Why? Because most of the time it's quickly fixable, we are going to use exactly the same methodology at the Equans scale. What are we going to do? Set dedicated teams to work on that. Have specific management rituals to be sure that the action plan are ongoing. Have a strong monitoring and a strong communication on the program to share the success that we have. This year, we expect to reduce our losses by more than 40%. Last program on productivity.
On one hand, there are plans in each country to reduce the overheads working on the IT costs, the premises, simplification of the organization. I won't describe, it's quite classical. On the other hand, we are working on improving the productivity on our project. The main topics of this program are working on optimization on logistics, implementation of methods and tools to improve the work of our employees, improving the ergonomics of our workers on site, deployment of lean, industrialization of assembly by further developing pre-assembly and pre-fabrication in workshop. This is what you can see on the picture, where we assembly a heat pump on the workshop, and then we send it to the work site with a truck. Of course, sharing all the good practice, setting up standards with the creation of a documentary database.
We also decided to set specific team on that program, lots of initiatives have already been launched in different entities, of course. In the four first program, we have quick wins. Here it will take longer time to have significant results, we expect that program to bring results in 2025, 2026, 2027. That's all about the margin improvement of our PERFORM plan. You've seen that we know what we have to do. We have a clear and very detailed plan. We already launched lot of action, we have the first result, we have some quick wins to come again. We are quite confident that our target is reachable in five years.
Now Etienne is going to explain what we are going to do on the cash.
Thank you, Thomas. Oops. Our cash plan relies on two pillar. The first one is a structural improvement of the working capital need, and the second one is a spread of a strong cash culture to drive the cash conversion to best-in-class level. First, concerning the working capital need, we focus on working progress and outstanding receivable. Inventory is less a concern in our business. Even we will try to negotiate better payment terms with our suppliers. We always respect these terms. We define clear rules that must be followed during the project management process. Be more demanding in the negotiation phase, checking the financial health of our clients to decrease counterparty risk, obtaining advance payments and proper payment milestone to be always in a positive cash position throughout the life of the project.
As an illustration on the right side of the slide, you can see a data center project with good cash management practices where you see the green curve is always positive. We are also focusing our action plan to reduce the necessary time to invoice a client and the delay between issuing the invoice and receiving the payments. Finally, the permanent monitoring of our aged trial balance allow us to decrease overdue invoices. It's why we implemented an operational cash indicator of the project at the project level for the project manager that we call CLIFF for Client Free Financing, which measures the outstanding customer balance.
It can be considered daily through the project cockpit, that we just spoke about, by the project manager. That cash is everyone's concern in the company. Second, we need to reinforce and spread a strong cash culture to drive cash conversion to best-in-class level. We are taking benefit from what has been successfully done at Bouygues Energies & Services for the entire new company. Acculturate, train the teams to raise awareness on cash. Make cash visible everywhere and keep a permanent communication and animation through live events, newsletters, Comex regular communication and focus. Implement simple tools for operational staff to measure the cash performance, as I just said about the CLIFF KPIs, and integrate a cash incentive in the bonuses computation formula. This is what we do. Jérôme will tell you more about these bonus schemes about in a few minutes.
Before giving back the word to Jérôme, let me say a word on the synergies. A lot of workstream are already working in the field and at transversal group level to identify all potential synergies in each geography. We can confirm today the expected synergies integrated in our PERFORM plan. Synergy should deliver between EUR 120 million and EUR 200 million run rate. As described in the PERFORM plan presentation, the main lever will be procurement, real estate optimization, SG&A, but also sub-sized operational teams. The teams are already starting to execute the procurement synergy plan, as Thomas explained to you, in France, in Switzerland, in the U.K. Where both historical companies operates. We are currently working on the first real estate optimization also.
We made the first organization simplification at the top core level with a new organization in place. Lastly, we have defined the infrastructure and application IT roadmap. We have integrated around EUR 60 million cost envelope in the COPA over the plan to implement the synergies. As Thomas said, we will implement an e-proc tool for making the synergies on purchasing. Synergy will fuel gradually the COPA until reaching their full potential in 2027. We think that we'll be able to deliver around 75% of the synergies in 2025.
I will pass the word to Jérôme concerning the bonus plans.
Thank you, Thomas. Thank you, Etienne. You would appreciate that all that is a change. When you have a change like that in a company, first of all, you need to manage that change. Second, you need to change progressively the culture of the company. To power the change of culture, we have been deciding to set a system of incentive. First of all, a short-term bonus scheme made on two main KPI, COPA margin and cash generation. At the level of the profit center manager, at the level of the project manager, and of course, for the functional support function. We have also set a LTI, and this LTI is dedicated to a selected number of managers based on Equans global targets.
All that is fully in place and fully and will be fully implemented at the end of the first quarter. PERFORM is having the ambition to deliver 5% COPA within 2027. We will deliver it. I am very confident. Why I am so confident? Number one, we are already on track. As explained by Thomas, we have already delivered plus 0.8%, last year. When you make the math and you add the 3.5% which are represented into the plan, which are, when you look to each of the box, reasonable, it give a number which is beyond those 5%.
Second, we have a plan, this plan is already anchored in the 900 profit center who have built themselves on a bottom-up basis their plan from it with a tool to follow the implementation of this plan all across the 900 profit center. Third, we are setting the bar from now already above the 5% in the profit center and on the large project. As explained by Thomas, I have been reviewing 122 projects over the last year. None of them were below 6%. 4, we have a strong commitment of our teams, and the mindset is changing fast. Of course, it is helped by the incentive system. Number five, yes, the competition is above us, which is good. Which is good because we have to follow the tracks.
Because it's always better to be in competition with people making more money than yourself because you have a room for improvement. Which is different, think about it, of what they had to do a few years ago when they were first on the track. Now, Etienne is going to explain to us the financial outlook, and you need to get used in big communication to see more pipes unvalved.
Thank you, Jérôme. As explained during this presentation, Equans is particularly well-positioned in its markets that are facing growing demands. We are convinced that our selectivity strategy, our PERFORM performance plan, as well as the resilience of our business model, should enable us to achieve our objective of profitable growth and bring our margin and cash generation to the best-in-class level. I will enter into more detail about our guidance until 2027. Let's look at the top line first. Regarding our sales, we are planning two different period for organic growth path. A first phase where the growth should be slight. In 2023 and 2024, we will be focusing on integration and profitability improvements. Our market are dynamic and our backlog is strong, which will permit us to increase selectivity and focus on the high value creation segments.
From 2025 onwards, once the first stage of profitability improvement is achieved, we will concentrate our teams more on growth, and we plan to accelerate our development in specialties. Acceleration to growth while remaining focused on improving profitability should enable us to meet the revenue growth rate of our peers. Let's focus on COPA. As you know, the target is 5% in 2027, but let me show you the evolution trajectory. It will be gradual, supported by the strategy, the performance plans, and the synergy implementation. We also looked at our capacity to pass through cost increases due to the inflation or scarcity of resources in our contracts portfolio. We integrated this subject in our rules, and we checked that in the project approval process. In the first years, our team will focus to build a strong and more efficient company.
We'll complete the Equans autonomy plan and finalize the integration into the group. We will also implement the BS integration plan into Equans. In 2023, we expect COPA margin between 2.5% and 3% with the first positive impact of PERFORM's plan. The team will focus on more and more on growth and the COPA margin will continue to benefit from PERFORM as well as the development of the high-value segment. We expect COPA margin to be close to 4% in 2025 and then 5% in 2027. Moving to cash. Our Energy and Services asset-light activities are structurally a cash-generating business. The business model is resilient as well as profit, as explained previously. The gradual improvement of COPA in the years to come will support the improvement of our free cash flow position.
Our CapEx to sale ratio is around 1.2%, leading to a high structural cash conversion ratio. We expect cash conversion ratio before working capital improvement between 80% and 100% every year, starting in 2023. The good news is that the optimization of working capital need will come on top, thanks to the PERFORM cash plan, strengthening Equans cash generation. This makes us confident that we'll achieve our goal. We are also looking at our portfolio as we want to focus on our asset-light strategy. The first concrete output of this review is the disposal project of our asset-based historical businesses, district heating and cooling networks, and EV charging activities in both the U.K. and the Netherlands that are mainly concession contracts.
We expect to close transactions before the end of this year. This disposal of assets should not have a material impact on sales and COPA margin. We can anticipate, of course, a positive cash impact. To summarize this session, we are confident in our ability to deliver our guidance. Bouygues Energies & Services and Equans have already obtained result on margin and cash from their previous performance plan. We are building on these historical actions while enhancing their impact into Perform. We are implementing the new organization and are starting to implement the synergies. Integration is going well in line with our planning and with our bottom-up approach. Teams are very motivated. The key element of the success are in place.
With this last comment, I pass the words to Jérôme.
Thank you, Etienne, and I like your equation. Yes, our presentation coming to an end. I hope it was not too long and detailed enough. To summarize the key points, please re-remember three points. Number one, we are very strong driver. We are working for sectors which are the energy, the digital, the industrial sectors, and transition, which in fact help us to attract people because they are key for the planet. They are growing, which help us to do together with Bouygues Services, 1+1 greater than 2. Second, we have a wide portfolio of expertise, very well positioned in term of geography and in term of technology. Third, we have a plan, and this plan is reasonable. Reasonable in the context which help us to deliver it to the best-in-class of performance.
We are confident to comply with Martin Bouygues request to become the undisputed leader in our field within the next five years. I relish that challenge. Thank you.
Thank you, Jérôme. We are near the end of this session. Let me say a few words on the Bouygues DNA. First of all, on slide 90. We will act as a supportive and long-term shareholders of Equans as we do for the other business. I would like to tell that we have already began to introduce Equans employee to this vision as they have now the opportunity to become shareholder of the group, thanks to a subsidized employee shareholders plan. It's possible from the beginning of the year. The collective success for all business segment require a strong and very effective governance. That's why the governance of each segment is aligned with listed company best practice. Equans board will meet at least 4x each year. Specific committees for audit, remuneration, ethics, CSR, patronage are already in place. They are made up of either independent members or senior manager of Bouygues other business segment.
On top of that, a pragmatic set of incentive for Equans management has been settled with clear financial and non-financial objective. To be sure that the margin improvement is effective amidst the defined target in the set timing. I will cover this in a while. Coming to the page 91. I would like to add that Equans will benefit from Bouygues core value which led to success and longevity. Bouygues is a group made of businesses close to their customer. We foster entrepreneurial mindset and benefit from a global reach made of multi-local champions. Above all, we will promote the basic of our culture: respect, trust, creativity, and expertise. All our employee are at the core of our strategy, and we are committed to the promotion of a strong social model based on ensure health and safety, which is the top of our priorities.
Giving fair and equitable compensation, attracting and retaining talent, promoting diversity, developing fruitful relationship with employee representative, and involving employee in shareholder plans. I'd like now to detail more a very specific plan that we decide to implement in Equans for the motivation of the management team. As Equans profitability needs to be improved within a set of demanding timeframe, and because we are convinced that all our interests will be aligned to warranty success, we've decided to implement a dedicated management incentive plan that I want to detail. This scheme is structured around the following key principle.
First, we need to ensure the commitment of a large number of manager, so the plan is dedicated to a selected number of manager in all geographies, from executive committee member to business profit center manager with top manager investing their own money, which is very new for us. Second, incentive are aligned with Equans guidance and financial target are set on a annual basis based on profitability and cash flow generation. Targ et achievement will be measured every year.
Third, this plan will be active for a specified period of time between 2023 and 2027 in line with Equans margin improvement targets. Fourth, in term of structuration, the plan is mostly composed of free Equans shares attributed by Equans to its manager between 2023 and 2027, and gradually redeemed by Bouygues from 2025 onward. The last important principle, the plan will be only effective if certain threshold are met and if value is created for Bouygues.
Now with Pascal, we will detail the impact of the management incentive plan on financial statement, and you will be able to size it.
Thank you, Olivier. Good afternoon, ladies and gentlemen. On page 93, let's have a look at the cost of management incentive package. The P&L cost is estimated around EUR 60 million in 2023, as the cost will start in the second quarter of 2023. Between 2024 and 2026, we estimate the cost at around EUR 80 million per year. This P&L cost estimation is based on the assumption that the guidance is reached. The yearly cost will be split between Equans and Bouygues. Equans bearing the largest portion of it. Costs will be recorded as other operating expense than with no impact on COPA for both Equans and Bouygues. The total cash outflow for the group will be similar to the total P&L costs.
As Bouygues will be the entity redeeming the shares, it will bear most of the cash outflow of the plan, which will start in 2025 and will be spread over several years and beyond 2027. The cash outflow for Equans will be lower and spread over a shorter period of time between 2025 and 2027. Turning to page 94, let me give you few explanation on the PPA amortization profile. First, I remind you that we bought Equans shares for a total price of EUR 6.1 billion. After consolidation of goodwill and intangible assets recognized by Equans before acquisition by Bouygues and aligned Equans accounting practices to Bouygues practices, EUR 6 billion were recognized as excess of purchase price and were allocated as per the following.
EUR 5.2 billion have been recorded as goodwill, and EUR 0.8 billion have been recognized as intangible assets net of tax, so-called PPA. 50% of it, mainly consisting of customer relationship, is amortizable. The PPA amortization started in Q4 2022 and impacted the PNL of Bouygues and others for minus EUR 13 million. We estimate the PPA amortization to decrease from EUR 50 million in 2023 to EUR 40 million in 2027. It will decline progressively between 2028 and 2046. I should highlight that the PPA amortization has no cash impact and is only recorded at Bouygues level. Besides, I remind you that PPA amortization amounts are not representative of our financial performance, explaining why COPA, our key performance indicator, excludes the PPA amortization.
Another important thing to outline on page 95 is the financing of Equans. The impact of Equans acquisition on Bouygues net debt at the acquisition date was EUR 6.5 billion, including an estimated amount of EUR 0.4 billion of Equans debt. It was to say that Equans net debt was reduced to almost zero at the end of 2022, which is a great achievement of Equans team. As already explained several times, in 2022, we took some pre-hedging swaps in December 2021 and January 2022 to cover our interest rate risks. Thanks to this cautious strategy, we secured the cost of financing at a very reasonable economic cost over 13 years in average. For the seven first years, the economic cost is 2% before tax.
The amount is approximately EUR 130 million before tax, so around EUR 96 million after tax. I will come back on this on the next page, but considering the high cash generation profile of Equans, this acquisition is accretive in cash for the group from year one. Lastly, after Equans closing, our credit ratings have been remained strong both for Moody's and Standard & Poor's, taking into account, in particular, the favorable evolution of the business risk profile of the group and of course our good financial ratios. Page 96, you can see the group new profile as if Equans was acquired on the 1st of January 2022. Equans brings further diversification to our portfolio of activities.
It increases the weight of our asset-light activities and enhances the resilience of the group, as the energy and services business offers a nice potential of growth, as demonstrated today in our presentation, and is structurally cash generative. This acquisition is accretive for the group as detailed on page 97. First, Equans being positioned on promising markets offers a strong long-term growth potential. Second, we will convert this growth into current operating profit from activities as we plan to increase the COPA margin to 5% in 2027 and beyond, reaching best-in-class level. Third, Equans being an asset-light activity, it will structurally generate some cash, as confirmed by our guidance to convert at least 80% of COPA into free cash flow. Just a few words here on 2022 figures.
Equans, on a standalone basis, reported in 2022 on a pro forma basis, generates a COPA margin of 2% on EUR 221 million of cash flow. Before working capital requirement. This free cash flow generation already offset more than the EUR 96 million of financing costs and the EUR 80 million estimated cost of management incentive package. This acquisition is accretive for the group through free cash flow from year one. Fourth, thanks to our PERFORM plan, we will optimize the working capital requirement, as Etienne said previously. Last, we expect additional cash coming from asset-based activities disposal. As demonstrated, this makes us very confident in the free cash flow accretion for the group.
In addition, Equans acquisition was already accretive on the group net profit in 2022 before PPA amortization, and we expect a mid-single digit accretion in 2023 based on conservative assumptions and before PPA amortizations. 2023 being only the start of the journey in terms of profitability improvement and cash generation, we feel very confident in our capacity to create value for all our stakeholders in the coming years.
Olivier, I am giving you back the floor to finish off.
Before the conclusion, for those who didn't have the chance to attend our annual presentation this morning, I will remind you the group guidance. We explained this morning that the environment was unstable. There were some inflation, there were interest rate were rising, there were volatility on currency. When we took and when we take all of this, Bouygues is aiming 2023 sales close to those of 2022, as well as an increase in its current operating profit from activities, the COPA. The outlook is based on 2022 pro forma financial information that assumes that Equans acquisition was completed on 1st of January.
Last slide. When we started, I told you that I wanted that at the end, I wanted to let you come away with a clear idea of what Equans was and transmit our confidence in our ability to reach our financial targets. I'd just like to sum up what we told you within the last two hours. We have the conviction that we bought that company at the right time, and this is the right company with the size, with the geographical footprint, and a company which is positioned on growing market. As I told you before, the reason, if we made the acquisition in 2021, the reason are better, are just better now due to the situation of the world that we faced from beginning of last year. We have the right team. We have the right expertise. We have the right skill.
We have the right people to be able to operate and to execute the project we win with the customer. We made a diagnosis. We know exactly where we lose money. We know what we need to do to improve our margin. We identify the driver of the recovery. We have a relevant plan to achieve our targets. On top of that, to be sure that all the interests are aligned, we set up a very specific plan to be sure that the management team has a right incentive to reach our goal. For all these reason, we are really confident on the fact that we will be at 5% margin by 2027. All the planet align. I have no doubt on the fact that we succeed on the journey.
With Pascal and the representative of Equans, we will be very happy to answer your question. I invite all of them to come on the stage.
Thank you. Hi, Nicolas Cote-Colisson from HSBC. Thanks for the very dense but clear presentation. The longer, the more questions we may have, so I have three. The first one is a question on profitability by activity. I wonder if you have activities that have better returns than others or if it is just about the size that defines the margin and whether your business mix is a reason for eventually a lower margin guided in 2027 compared to what the market may assume for some of your competitors.
My second question is still about your margins and the targets. I was wondering what was the impact of inflation because I would assume that if you reflect higher costs in your tariffs, that may eventually dilute the margin. I wonder what type of inflation assumptions you have retained in your forecasts. I'm almost there.
The third question is about your detailed financials. I just want to make sure I got it right. You mentioned EUR 60 million of synergy execution costs for over three years. Earlier in the presentation, you also talked about EUR 85 million of IT-related costs. I just want to reconcile these numbers. Very last, the 3.5 percentage point of COPA improvement from your plan. Just trying to understand why the margin target or the target for the margin in 2027 doesn't reflect the full 3.5. If I understand well, the incentive plan is not within that, so this is not explanation. Anything you can add on that would be great. Thank you.
Maybe just beginning of the very first question you were asking, and it was a question that we had this morning, why we don't compare with the peers and don't what we are not targets, 6, because it was a question of 6 this morning. Just before joining 6, there is 5 on the path, so we fixed 5 for 2027. It doesn't mean that we won't exceed 5. It means that for 2027 we will target 5. For the detail, they will answer you very precisely.
The first part of the question is: Do we have more profitability on some of the activity or the other, and is it linked to the size of the company? In fact, it is linked to our capacity to differentiate ourself. Everywhere where we are having key technical differentiation, key geographical differentiation, you know, we have a higher margin. Sorry to tell you a broad answer, but of course, you know, when you speak about HVAC for the pharmaceutical, for the microelectronics, we have a lot of differentiation. When we speak about nuclear, we have a lot of differentiation, and there is less capacity in the market to deliver the same level of system and service.
When we are, you know, having a team which is very close to a factory, and delivering services very locally, yes, we have high level of differentiation and the margin follow. It's a question of building that capacity of differentiation. That's why we work, so that each of our 900 business unit make a segmentation of what they do and build the differentiation. You know, the differentiation is a bottom-up game. That's the first part of your question. Second part of your question is the inflation. The inflation, we have not incorporated the high inflation in the top line. We have been considering a small inflation in the top line.
However, you know, we have of course, a system which pass the extra cost of the inflation to protect ourselves by simply having contracts which protect ourselves or short-term contracts for which we know the value and we lock the value, when we sell. The third element on the inflation is that the inflation, especially on the energy price push decision of our customers to change their energy system. It's a driver to make decision to enhance, in fact, the change mainly, you know, to system like heat pump or economy of energy by a proper piloting of the system.
Concerning your questions about the synergy implementations, there are two components. You have the IT part and the performance part. IT parts, you have EUR 50 million+ of CapEx and EUR 35 million of non-recurring item for integration costs. For the PERFORM plans implementation, we have a EUR 60 million cost spread among the plan in the COPA, okay. To implement the performance plan. It is the two are integrated. Regarding 3.5 + 2= 5.5, I think Olivier answered already to that question. I think you have the answer.
We put the bar high, yeah. We will deliver the plan.
We made a survey to try to understand what you wanted to hear today and what kind of question you need an answer. One of them, when we want to be sure, you told us that you wanted to be sure that we won't overpromise is the thing. We don't overpromise. We say 5 by 2027.
Hello. Nicolas Mora from Morgan Stanley. Just a few. You talking about not a huge amount of growth in 2023, 2024. How much of that is you giving away business and shrinking? How much do you think you need to shrink and where especially? On when you shrink, you usually have costs. I think it's quite well known in the market some of your facilities management business is not great. I mean, it's great, but it's not, it's not making money. Usually you have to pay to exit these contracts. Do you have any cost embedded into COPA or below COPA, into this?
Last point, bigger picture, how much can Equans grow sustainably? Because we, when we look at, you provide plenty of numbers and we need some time to digest, but, you know, the exciting stuff, it's energy transition, you know, T&D, EV, data centers. It's actually quite small due to the scale of the group. How can you accelerate, really make the most of that growth? Do you need to change the mix? Can you do it quickly? Most likely not. I had a last point.
Are we ever going to have a split of margins by geographies? In order for us to track the progress, or said differently, can you help us understand where you really struggle right now and where you need to really push for restructuring and where things are much better advanced and I use that kind of lead margin, let's say, in the group?
It's many questions, but It's also many slides.
Thank you.
Let restart the two hours, huh? No. In fact, first of all, please take something which is important into account. We have a lot of contracts. This, EUR 1 million contract, a lot of small contract. That's the foundation of the company. That's the keel of the boat. That what bring the recurrence, the capacity to move because it's quicker to move from a small contract to a small contract. It's not a long-term element of backlog. We have been doing a lot already of the cleaning of the past contract. We don't have, you know, contract on which we want to exit, huh? Simply because we are in a situation in which we manage now the recovery of the long legacy project. We don't see any difficulty of that nature.
Of course, when you have in 2022 an average EBIT of 2%, you have company which are above 6%. You have company which are in the range of 4% to 2% to 6%, which demonstrate that if you have an average of that level, you have company which are still, as explained by Thomas, in a situation in which they need to improve their margin, and it came from below zero to above zero. First of all, that's a good news because the improvement of margin is quicker when you come from a very negative number to that number. We have been already been doing in 2021 and 2022 some important restructuring. Regarding the market, I give you an example, and, of course, this, I'm sure that was one of the example you have in your head.
Yes, we are not growing in our plan in the U.K. in the next year because we want to concentrate ourselves on where is the value, which is the zero carbon reduction footprint for which, yes, we can generate higher margin than other business simply because we are quite unique. Look to the market in the U.K. Who has the capacity of delivering RDFM, the capacity to understand the energy, the capacity to understand the building? We are at the intersection of these three domains, meaning that we have the capacity to deliver for the county in the U.K. offer which are tuned in order to take the existing carbon footprint which is existing for a county. That's how it works, huh?
They call us and they say, "Can you make a map of the carbon footprint of the county?" We describe a route, then we deliver that route turnkey in order to help them. We do that also for the British Army right now. I can tell you that the margin are good, margin that's in that in that positioning.
Eric Lemarié, CIC. I have three questions. First one is, could we have an idea of the part of revenues made in loss-making contracts and profit centers in 2022? Second question is on the commitment you took to create 10,000 jobs in the next five years, I think. How is it integrated in the plan? Last question is on inflation on wages. What is the part of revenues made with wages and the inflation assumption you have for the next five years on this cost?
We'll not give you any numbers about the revenue of a loss-making contract, neither loss-making company. What I can tell you is that we have set a system which enable us to know project by project, a project which is losing money and seeing through the EBIT and through the cash any profit center who could be becoming in such a difficulty, and we can keep track of any profit center which is getting out. I have been seeing in the question from some of you, a comparison with another company. I can tell you that we have been setting a system which is enabling us to follow closely the company project by project and company by company.
Regarding the 10,000 jobs creation, which has been expressed for the next five years. In fact, it is to follow what we have been explaining in the second part of our plan when we will be having overpass a certain threshold country by country to be able to deliver growth. We want to come above a certain threshold before we grow. Business unit by business unit, so that we deliver first the right level of performance before growing. How are we going to deliver that? Apprenticeship, which is key. As you know, Germany, Austria, Switzerland, three location where we are strong, are very good in that domain, and we are taking that in France, Belgium, Netherlands, U.K. progressively in order to progress on apprenticeship. Because to create a good electrician, you need two to three years.
We bring those people, by the mentoring, we create the workforce which enables through the plan to create that growth. Yes. Yes, we are very confident that we'll be able to create 10,000 jobs over the next five years. Regarding the inflation, we have been following the inflation on wage as most of the company over the year. I can tell you something, you know, is that our system are very mature, when we increase the cost of people, it plug into the system very quickly before it's done in fact, so that each of the selling price are moving in order to explain that into the system. Have we anticipated on inflation for the next year in our long-term contract? Yes.
Anyway, for all of our long-term contract, we are covered by revision formula.
Hi. It's Mollie from Citi. I have three questions, please. I'm gonna start with provisions. From looking at the Engie reporting and then also at your reporting, it looks like there's been an increase in provisions that come above COPA and therefore that your underlying margin is maybe slightly better than what's being implied by the 2.2% that you've got there. I wonder if you can comment on that.
My second question is on your definition of recurring revenue. You've said that 85% of the revenue in Equans is recurring, but I don't know if we can dive a little bit into what you mean by that. You've talked about, for example, the data centers in London, where it's LONDON 1, LONDON 2, LONDON 8, et cetera. Would you be counting that within your recurring figures? Or is it solely where, for example, there's highway charging points and you have maintenance contracts? Just a little bit more on that 85% would be great. Obviously we don't have the margins, but looking at the productivity on the U.S., it looks like there's quite a lot more in the U.S. and Canada.
I was just wondering if you could comment on perhaps your strategy in terms of optimizing that and in terms of what, you know, future strategy in the U.S., considering that seems to be an area where productivity is a lot higher. Thank you.
Okay. Three very different question. I propose to start with the second one and the third one. Let Etienne answer to the first one.
If I have not well understood the first one, sorry.
The recurring revenue is 85%, is coming from 30%, which are long-term contract. We sign typically five years, six years. Some of them are 15 years, some of them are 25 years, which is a long-term contract for RFM, where we are within a university and we deliver a contract over years. This long-term contract give us a capacity to fully understand the premise of our client and be able to implement some change with our client because we know exactly how it works. The second element is the framework contract. Typically, you are working for a factory and they give you a list of price, 100 unit price, which are changed everywhere through a revision formula, fully a full revision, no fixed part.
Then you deliver the work through this framework contract. Let's say 70% of what you do is as per this framework contract, and 30% is a new thing that you do, which is not part of the framework contract because it was not sought at the beginning. That's a second level of recurring. The third element, 35% is a client for who we are working regularly with them for a three years contract. You're right. When we work for VIRTUS in London, the math make them falling into this 35% because we have been working for VIRTUS all along the way with them.
That's true that, sometime we deliver LONDON 1, LONDON 2, LONDON 3, LONDON 4, simply because people understand each other and there is a capacity to have a recurrent business. Regarding your question about optimization of productivity, in the U.S., I don't know if you want to make an answer. I give you one example for which we, on which we work on it. There is still some room of productivity in the U.S., even if the productivity, you are right, is quite high in the U.S. We are an important electrical company in Manhattan downtown. When the wage are around $120 when you work within Manhattan. If you go 50 miles away, the price is more or less half price.
Yes, there is some room, and we are working right now in setting a prefabrication yard for electrical works in order to preassemble component outside of Manhattan in order to take benefit of h igher productivity, because when you work in a factory, you have a better productivity, and in setting also the capacity to have people who don't have all the constraint, of Manhattan.
Mollie, I will try to answer to your first question. I don't know exactly what you are referring to, and I will not comment on the Engie situation, huh? That's first. What we create Equans, we had to become an autonomous company. Okay? We had to recreate, for example, an IT infrastructure. We had to. When you are in a group, you cannot, and you respect the transfer pricing policy, you cannot charge also all the cost linked to your subsidiaries, to the subsidiary. You have to keep part at the center. You, when you became an autonomous company, you have to add all these costs within your financial statements. It's what--
Why-- when we said that we had a 0.8 point improvement of the margin of Equans compared to last year, we had also it was 0.3 + 0.5. 0.5 was the standalone cost and 0.3, but that's something forever, yeah? The 0.3 was the mathematic additional, but economically it's 0.8. I don't know if this is exactly the answer to the question.
Good afternoon. Mathieu Robilliard from Barclays. I had one question maybe a bit dry in terms of the financing costs. You mentioned what is the incremental financial costs linked to the new debt, but at the same time, you already recognized the fact that you had locked very attractive rates in your net debt figures in 2022. How do you avoid the double counting? I mean, how do you recover what you paid or what you recognized rather versus your guidance for financial costs of EUR 200 million?
You have to separate the P&L view on that and the cash flow view on that. In terms of P&L, we had no impact in 2022 related to these swaps. We will have it on the long term. In terms of cash, as we have already in the pocket the amount corresponding to these swaps, effectively, we will pay each year the nominal interest rate, which is higher.
Which is more than EUR 200 million then?
Yeah. That's right.
I probably missed it at the beginning of the presentation, but did you give a kind of average length of your contracts for the business? The third question, I was following up on Nicolas question previously about the fact that you may have restructuring costs and how do you account it for that. I'm not sure you gave an answer on that. Thank you.
I just make a calculation to answer to your question, dividing the backlog by the revenue. It give 1.5 years, which mean the result of a calculation, but nothing. Most of our project are very short-term project. It's three months, five months, six months to implement a small solution somewhere. Remember that 70% of our project are below 50,000. We have a few contract which are very long, and we incorporate this into the backlog. That mean the average doesn't mean anything because if you would make a graph of the lengths, you know, you would have a graph which is like that with a long queue which is modifying the average.
If I would say that most of our contract are delivered in the year, yeah.
Like 80% or something?
Yes.
Okay.
Concerning the restructuring costs, in the group accounting principle, restructuring costs are in the COPA, it is integrated in the guidance.
Thank you.
We can continue on very dry subjects. Just the net working capital. You've been very good at not giving any numbers. Obviously, I suspect it's quite a tough exercise. Can you help us from what's happened at Bouygues Energies & Services and at Equans, can you help us frame a little bit what is within the realm of possibilities on net working capital improvements?
Okay.
In days of sales outstanding, maybe, 'cause especially at Bouygues, some of the improvements is quite amazing. It's 20% of revenues. That, that looks quite a crazy number. Help us frame a little bit that. Number two, can you help us understand the, that cash conversion ratio? If we look at the footnotes, so it's EBITDA minus what? Tax, expenses. It's-- working capital. What, what is there left? There's, there's nothing, no? I mean, what's in between basically your EBITDA and, and the cash left? If you take out all the costs, there's not much left to your 100%.
First of all, what you need to understand is that we are not starting today on working capital. Bouygues Energies & Services, as you said, initiates the DIOGENE project plan before. And you saw the improvement of the cash position of Bouygues Energies & Services since four years. Equans initiate also its performance plan in 2021. If I look at the last two years, 2021 and 2022, where you remember that the Equans transaction was a lockbox mechanism. If we start at the date where the cash of Equans is belonging to Bouygues, okay? Over these two periods, we reduce the DSO of Equans by 4.6 days. Okay?
At the same time, Bouygues Energies & Services was able to improve its DSO by six days. If you make the average of the two, we improve the Equans, the new Equans DSO by five days. Okay? That's to give you a little bit of more color of what we are doing. Concerning the cash conversion ratio, we are just making the nominator and denominator coherent, you know. We have also the CapEx that you are not mentioning. For example, we have when we create the new IT infrastructure of Equans, we had to invest, and this is a maintenance CapEx that is below the 2%, okay?
That's the major subject, the cash, the CapEx to sales ratio and, of course, the work in progress process.
Just coming back on the net working capital. You've done six days in two years. I mean, that's the scope of the group. It's basically EUR 300 million-EUR 350 million over two years. Are you thinking about-- I mean, Philippe is looking at me like he's gonna kill me. I mean, are we talking big numbers in terms of opportunity or just kind of normal work in progress of improvement? Is there EUR 300 million to EUR 500 million net working cap to get from here over the next five years or the opportunity is much, much more limited?
We are structuring a strong cash improvement plan. Okay? That's, that's our aim. We, as we said, we need to inject a strong cash culture permanently in the company. We are planning to improve, to continue to reduce the DSO over the plan, okay? Progressively. I will not disclose the final target that we are setting because we are working on today. You can imagine that what we said for 2021 and 2022, we want to continue the same path. We are becoming through these investments that we are doing, progressively, fully asset light. We had some asset investment over the last two years.
Hi, Nicolas Cote-Colisson again. Question on M&A, 'cause I suspect there's always some good targets to complete or enhance your portfolio, and your competitors keep acquiring some assets. I wonder how you see your attitude toward M&A, given some balance sheets constraints eventually at your mother company level. How do you see the risk of missing out some opportunities, or do you think you have everything you need for delivering this plan for the next five years?
We have already quite important M&A ongoing, you know, since we have to deliver the inclusive integration of Bouygues Energies & Services. We, we need to absorb this reorganization of the company. As I explained, we are really well on track. However, we have not seen already all of what we can do in the combination of the competence of the company. We see a lot of things, but so do we need to work from taking the benefit of A + B is better than A and B alone. Yeah. So I think that's something which is important to be understood. We, we have seen that, you know, for example, on the data center, as I explained, we organize the way we serve this market.
Also the market is incredible, and it's part of the answer of the previous question. We say, "Okay, we have a unique organization for the Tier 1, Tier 1 of the market. Then, to serve at European level this market, we have now an organization for the Tier 2 market, which are the medium size, which is regional in each of the country. And then we have a local one for the data center of any banks. And if you want to have a new data center, please call us. We, we can serve you." There is a lot of benefit that need to be exchanged from that
Of course, we will look to some opportunities at the size which is compatible with our capacity of management, where we are making money at a level which is above a certain threshold. Could we just sum up one thing? The first M&A operation was EUR 4 billion. They just done it in January. They need time to absorb it. When you look what happened in the peers, EUR 4 billion is not so frequent. Let's hit the EUR 4 billion, let's fix everything, and we'll consider the future. We've got time.
Hello. It's Eric Lemarié from CIC, I got a couple of question. First one on your exposure to the U.S.-- to the United States. How much do you think you will benefit from the various plans, you know, the IRA or the plans to upgrade the electrical grid there? Do you think you are well placed to benefit from that? I got a second question regarding the presentation from Ana. you know, your exposure to traditional businesses like HVAC and your exposure to fast expanding markets like solar panel or data centers. Could you give--
I know you gave some figures, but could you give us the split of your top line between traditional businesses and fast expanding segments today and what it could be in the midterm, in 2025 or 2027? The last question. You explained that until at least 2025, the objective is to improve margin and not to have some strong top-line growth. What could be the growth once Equans will have reached this 4% COPA margin by 2025? Thank you.
I start with the first question about our positioning in the U.S. market. As I explained to you, we are not positioned on the grid market in the U.S., so we believe we are going to take benefit of the growth of the U.S. market, mainly from the industry. We have been winning several project for Ford and General Motors, who are pushing the transformation of their production chain in order to incorporate the new EV vehicle. We are also working right now on two gigafactory in the U.S. in that on that market.
In addition to that, we see a significant reinvestment on the East Coast, and what is good is one of our subsidiary called MEP, has been in fact working in depth at the good old days of the microelectronics of the U.S., working for IBM. They saw that the market was going to Asia, and they see very high level of reinvestment right now on the East Coast of the U.S. in the microelectronics, which is part of the autonomization of critical industry which is coming. They are also present because they switch to pharmaceutical and biology, when there were a drop of the microelectronics. We believe that we will have an important growth on that domain.
Just can I jump on that? This type of exposure, this type of businesses in the U.S., it's double-digit growth for you, right? At least double-digit growth, right? Okay.
Yes. Ana?
Maybe I can complement and make it a bit wider. On the traditional market versus the fast-growing. Traditional market, it's clearly today the priority in terms of margin improvement. We are not going to reinvest a lot in many things that will bring for sure potential for the future. Today we will focus on performance on the traditional market. Having said that, we need to prepare ourselves and the evolution of our top line linked to fast-growing market will be progressive. Some of them are already there because data centers, we are doing EUR 500 million on data centers with good margins and renewables are progressively also increasing in our, in our sales mix. Some of them will come very fast, some others will come more long-term.
What we don't want to miss now is how we get ready, how we get prepared to capture the future value on all this. We are not going to miss the focus on increasing margin on our base business for sure.
Sorry. In order to give you some color about gross pass of turnover, starting after 2025, we are not disclosing figures. What we are saying is that we, in 2027, we will reach our peers' growth rates. Okay? Starting from 2025, make a linear interpolation to the competition growth rates, and we will arrive to what we will be.
Another question? Wait. Yes.
Thank you. If we just take a step back and we look at the European level or the restructuring which have been going on at many peers, the odds are not very good. Have you done a benchmark exercise of why so many of your peers have failed in restructuring and bringing margin to 5%, 6%? The starting point is different. I have a few ideas. Why versus, you know, the markets of the 2010s? It's maybe more consolidated now. You know, the leaders are really not cutting prices and raising the margin of the overall market up. The starting point is low.
I mean, 2% it's a low margin and a low starting point. How confident are you in a market which is still competitive, you can get to 5%? I know you've given us, you know, the 5%, 6% levers, but many peers before you have gone there and have pushed out to the right the targets or dropped the targets, gone into profit warnings. Do you have two, three pitfalls you know you must avoid? The one, two key, like, success factors you need to implement so that you can get to 5%?
Maybe I will take it. Maybe you didn't saw when the presentation where we made a comparison with DIOGENE, who we start, this process start in 2019 in Bouygues Energies & Services. Maybe you saw on the slide also that finally at the end of 2022, we reached 3.6%. What we told in the, in the slide that we improved by 4 points the level of margin of Bouygues Energies & Services. What we explained today is this is Bouygues Energies & Services is a size around EUR 4 billion. Equans is a size about EUR 13 billions. We could say roughly this is the same kind of problem to solve.
What we explain and what Thomas explain is we took the good measures that we saw in DIOGENE the last three years, and we want to replicate them in at a global level of Equans. What we saw about the recovery of the profit center, we did it already in Bouygues Energies & Services. What we saw about the cash generation, we saw it already in the Bouygues Energies & Services. The evolution of the pricing also, that we know, that we observe. We observe that, for example, for the procurement and pricing, it takes time to raise the price first, to convince every profit centers that they have to focus on margin instead of volume. It takes time. We observe it in the last three years.
We know exactly that, for example, for procurement, it lasts nearly two years before that all the manager of the profit center use everything we set up for them. This is why we have this evolution. This is why we say it will be a progressive evolution. We saw a peer, a small peer, EUR 4 billion, where it works. As it works for Bouygues Energies & Services, I don't see any reason it won't work for Equans, assuming the fact that part of the manager of Bouygues Energies & Services are part of the management team that we set up. You saw few people on the slide of Comex coming from Bouygues Energies & Services, we really want to reuse what we observe in the past. We don't want to reinvent the wheel. We know there is very basic thing that works.
To give you just an example for the profit center, the first thing is to be sure that the profit center doesn't sell something it doesn't know how to execute. It's very simple. It's very reasonable. When you do it, you don't use subcontractor, you avoid to make losses. It's very simple, but when you try to make it, you get result. This is why we are really, really confident, and we have no doubt about the fact that we will succeed. Again, if we decide to be sure that all the manager will align our goal and to be sure that they choose to generate margin instead of volume, we put that MIP, and we think that with the level of MIP we set up, they are aligned with us.
You want me to say to complement?
No, I think. It's often so. Time is flying. From the telephone? The mic? You need a mic? In the meantime, no question in the room anymore? Armelle, do you want to read the question or?
I don't have it.
Okay. No any more question? Thank you for attention.
Thank you.
Made their own money and suppose that the Equans development is a good one or maybe, or inversely. How that, of that really work alongside the Equans management incentive plan, as well as the fact that Equans employee are now able to participate in the Bouygues employee shareholder plan, and also in the light of also the recent share buyback activity at the Bouygues group level. I think it'll be interesting if you can, you know, kind of clarify how you're thinking about employee ownership evolving over the next few years. Thank you.
Sorry, I didn't catch the beginning.
We didn't catch the beginning of the question.
No, I just want to ask about all the, all that we saw finally, what you said today in terms of programs to boost the participation of employees in the capital at the Equans week. How do you see the different parties advancing and playing together, in view of the fact that you mentioned, I think, in the presentation that the top managers of Equans must now invest their own money.
This is a way for us to be sure that, I mean, when If you look at what we need to change finally in this company, I told you before, we have the right skill, we have the right, we are on the right market. This is buoyant market. finally, we didn't get the right results. we need to change few of it. We need to change few of it in the pricing. We need to change few of it in the way we procure everything that when we set up a project. to be sure that it works correctly, we want to put a strong pressure on the manager in order they could change their habit of working. This is the reason of the MIP.
This is not the same thing as we do for the shareholder plan, for the employee shareholder plan, for the employee. This is as we do for the rest of the big group to be sure that people of the group will own part of the global group. This is for us. This is something which is not, we don't oppose these two system. This is something that we think really is that they can work closely in parallel because they don't address the same needs. For us, there is no problem to do both of them at the same time.
Okay. Thank you.
That's it.
Thank you.
Thank you for your attention.