Earnings Call: Q1 2020

May 14, 2020

Ladies and gentlemen, welcome to the Bouygues First Quarter twenty twenty Results Conference Call. I'll now hand over to Corine Adam, Head of Bouygues Investor Relations. Please go ahead. Thank you. Good morning, ladies and gentlemen. I would like to remind everyone that you can find on the company website @www.big.com the earnings press release, the presentation we will be commenting on during this conference call, an Excel file with historical key figures for the group and each business and the company financial statements. Statements made on this call are forward looking statements. Such statements reflect objectives that are based on management's current expectations or estimates and are subject to a number of factors and uncertainties that could cause actual figures to differ materially from those described in the forward looking statements. I will now turn the call over to Pascal Bouranger, Chief Financial Officer of Bouygues. Thank you, Karine. Good morning to all of you, and thank you for joining us. I would like to welcome everyone to our conference call to discuss Bouygues' three months 2020 results. First of all, in these unprecedented times, I hope that you, your family and your friends are all well. With me in the room is Christian Le Coque, CFO of Bouygues Telecom. Following our comments, we will be answering your questions. We are currently facing a situation that we have never experienced before and doing our best to act as a responsible player during this COVID-nineteen crisis, as highlighted on Slide four. In France, our businesses are mobilized to ensure that essential services to the population are maintained, such as communication, the ability to work from home in good conditions, information and entertainment, as well as the maintenance of critical buildings. The Group recognizes the major efforts of its stakeholders and has taken actions to act responsibly and support these efforts. It has already announced that Martin Adolie de Bouygues decided to relinquish 25% of their 2020 fixed and variable remuneration. The Board withdrew the dividend payout proposal at the latest Annual General Meeting and will reassess the situation in late July or early August. And Bouygues Telecom supported its small and medium enterprises partners by promptly paying their invoices in April and May without waiting for the legal deadline. Bouygues has also taken actions to support caregivers in this crisis. The group distributed 1,000,000 European standard surgical masks to the French health authorities. Donations and financial contributions were made, notably to the Red Cross and hospitals. Furthermore, Acxiom, which is a subsidiary of Colas, partly reorganized one of its plants to produce hydrochloric gel, as you can see in the picture on the right of the slide. Moving to highlights for the quarter on slide five, the initial effects of the COVID-nineteen pandemic were evident in lower results. However, in these challenging times, the Group has maintained a strong financial position with €10,300,000,000 of available cash at end March. At the end of the quarter, the backlog in the Construction businesses remained at the high level of €33,500,000,000 It's important to note that Bouygues Telecom proved resilient as it has been less affected by COVID-nineteen in its commercial and financial results. As a reminder, as announced on 04/01/2020, outlook for the Group, the construction businesses and TF1 was withdrawn and twenty twenty objectives for Bouygues Telecom were suspended. Let's now turn to group key figures on Slide six. Q1 twenty twenty results reflect the usual effect of seasonality and the impact of the lockdown in France since mid March. Group sales of €7,200,000,000 in the 2020 were down 9% and down 8% like for like and at constant exchange rates compared to the same period last year. The resilience of Bouygues Telecom, as well as the good start of the construction activities on TF1 in January and February, did not offset the significant decrease in activity from mid March, mainly due to the decision of the French government to lockdown the country. The sales decrease of €714,000,000 year on year is entirely due to the COVID-nineteen crisis. Indeed, we estimated that the 2020, COVID-nineteen had an impact of around €750,000,000 of which €600,000,000 was in France. Several items explain this decrease. First, in construction activities, we experienced an almost complete interruption of work in France from mid March and, to a lesser extent, a slowdown or shutdown of activity in around 10 other countries. Second, at TF1, we faced a gradual cancellation of advertising campaigns since March. And finally, at Bouygues Telecom, we suffered from the mid March closure of all stores. Current operating loss was €242,000,000 in the first quarter twenty twenty, an increase of €184,000,000 year on year. This change is mainly due to COVID-nineteen despite the early mitigation measures implemented by the businesses. The estimated impact of COVID-nineteen on current operating loss is around €170,000,000 It reflects both a loss in current operating margin and unavailable costs in the three activities such as employee fixed costs and amortization expenses. Net loss attributable to the group was $2.00 €4,000,000 in the first quarter twenty twenty. It included a contribution from Alstom of €35,000,000 versus €33,000,000 one year ago. Finally, let me remind you that, like every year, first quarter earnings are strongly impacted by COLA seasonality on IFRIC twenty one. Let us now turn to Slide seven that shows that the group maintained a strong financial position. The chart highlights that at end March twenty twenty, available cash stood at €10,300,000,000 with €4,100,000,000 in cash and €6,200,000,000 of undrawn medium and long term facilities that contain no financial covenants. Moreover, the debt maturity schedule is well balanced with no debt wall. Please also note that, first, this schedule has yet to include the €1,000,000,000 bond issued in April carrying a fixed coupon of 1.125% with a redemption date in 2028. This new bond issue brings available cash to €11,300,000,000 at mid April. And second, Bouygues will redeem €1,000,000,000 of bonds due in July 2020. Moving to Slide eight, you can see that the COVID-nineteen had no material impact on the €3,600,000,000 net debt at end March twenty twenty. The change between end December twenty nineteen and end March twenty twenty is explained by the usual seasonal effects. The positive change in net debt between end March twenty nineteen and end March twenty twenty is mainly due to the inflow of €1,400,000,000 related to Alstom. This robust financial position is key, particularly in this crisis. Let's now turn to Slide nine to see the net debt evolution between the end December twenty nineteen and end March twenty twenty. You can observe that the increase over year end is explained by three items. First, a moderate outflow of €37,000,000 in acquisition and disposals, resulting mainly from the acquisition of Granite contracting by Colas in The U. Second, an inflow of €8,000,000 linked to capital transactions and other, including the share buybacks, the exercise of stock options and the remainder of the Bouygues Construction capital increase reserved for employees. And third, an outflow of €1,300,000,000 from operations, stable year on year that we will detail in the next slide. Turning to the breakdown of operations for the first quarter on slide 10, you can observe that net cash flow including leases expenses was down €69,000,000 year on year. This decrease was led by the three construction business segments and tf1. Net CapEx was up €21,000,000 mainly due, as expected, to Bouygues Telecom and to a lesser extent TF1. Net CapEx for construction activities were down, reflecting early adjustments due to COVID-nineteen. Last, change in the working capital requirement and other improved by €75,000,000 mainly explained by the positive change in working capital requirements related to operating activities. We expect the pandemic to have an impact on the group's working capital requirement and net debt for the full year 2020. It is too early to quantify amount since feasibility remains very low and it will depend on how customers react to a situation we have never encountered before. In the second quarter, we should see a distortion of working capital requirement related to the shutdown of activities that should recover over time. I will now turn to the review of operations starting with the Construction businesses. Let's begin with the backlog on Slide 13. At €33,500,000,000 the backlog in the construction businesses remains at a high level at end March twenty twenty. As you can see on the chart, it is the second highest level in the past five years. The commercial momentum at Colas and to a lesser extent at Bouygues Construction remained good in the first quarter twenty twenty. Colas backlog at end March was up 3% year on year, restated from main disposals and acquisitions and at constant exchange rates. It remained stable in Road and improved strongly in Rail. Bouygues Construction backlog does not include the C1 stretch of the high speed rail line project in The UK worth €1,100,000,000 which will be taken into orders in the second quarter. Last, Bouygues Immobilier's backlog suffered, as expected, from a decline in reservations. Residential reservations were down 16% year on year as delays in obtaining building permits linked to municipal elections resulted in a lower supply. The overall backlog at end March twenty twenty was down 3% compared to the same period last year. Let's now look on Slide 14 at a few major contracts won by the construction activities. In the first quarter, Bouygues Construction gained several contracts. On the upper left of the slide, we show the construction of the control center for Line sixteen and seventeen of the Grand Paris Express worth €141,000,000 Just below that picture, we see the completion of a housing complex in Monaco worth €115,000,000 On the upper right of the slide, we display the building of a combined cycle gas and steam power plant in Leuna, Germany worth over EUR100 million. Furthermore, as shown on the bottom right of the slide, Colas notably won the construction of two highways and a taxiway in Alaska worth EUR75 million. Let's now look at the construction activities key figures on slide 15. Q1 twenty twenty results of the three business segments were impacted by the sharp decline in activity since the lockdown in France and in neighboring countries such as Belgium, Switzerland and Italy. Despite the good start of activity experienced by Colas and Bouygues Construction in January and February, sales were down 12% year on year at €5,200,000,000 in the 2020 and eleven percent like for like at constant exchange rates. This €686,000,000 decrease was entirely explained by the COVID-nineteen as we estimate its impact to be around €700,000,000 in the first quarter. Since the lockdown started mid March in France, the decrease was particularly strong at 18%, whereas international activities proved more resilient with a decline in sales of 4% despite the slowdown or shutdown of activity in about 10 countries. We expect international sales to be further impacted in the second quarter, in line with the spread of the pandemic. Bouygues Immobilier was also penalized by the low supply in residential property development resulting from delays in obtaining building permits linked to the twenty twenty municipal elections, which are not yet over. The situation has worsened since the COVID-nineteen crisis. The current operating loss was €140,000,000 larger than last year despite early mitigation measures implemented through cost savings and the use in France of partial unemployment for an average of almost one third of Bouygues Construction and Colas working hours in March. We estimate that the impact of COVID-nineteen on current operating loss was around €150,000,000 in the first quarter, more than the increase in the loss compared to last year. Let us now turn to slide 16. Before the end of the lockdown, the construction activities have been planning on organizing to progressively restart their activity in France. They have capitalized on Bouygues Construction experience in Hong Kong, which restarted its business in February after an interruption of fifteen days, before resuming work from some essential requirements must be satisfied. Personal protective equipment, clients' agreement and the availability of the supply chain and of employees. Since mid March, the business segments have gradually relaunched their activities in France. By mid May, about 90 of sites have been restarted at Bouygues Construction at Bouygues Immobilier and 85% of Roads' Worksites at Colas. The productivity is affected by the safety precautions, particularly in buildings due to limits on people from different trades working simultaneously. Outside of France, the situation is mixed depending on how affected the countries are by the COVID-nineteen prevention measures. Measures. We expect the activity to gradually resume when the relevant conditions are satisfied. Finally, a number of external factors could foster a recovery of the construction businesses, such as the introduction of economic stimulus plans and the launch of sustainable construction projects to deal with the outcome of the crisis. Now let's talk briefly about TF1 as its results have been released on April 19. First, turning to Slide 18, TF1's audience share was maintained at a high level during the first quarter. Nevertheless, IF1's financial performance was hit by the COVID-nineteen crisis as sales year on year were down 9% like for like and at constant exchange rates. These were affected by the gradual cancellation of advertising campaigns since March and the discontinuation of production shooting activities since the lockdown. Current operating profit reached EUR42 million, including cost savings on programming of EUR23 million. In the first quarter, we estimated that the COVID-nineteen impact on current operating profit was around €13,000,000 from both loss of current operating margin and unavoidable costs. As stated on April 1, TF1 withdrew its 2020 outlook and expect that the COVID-nineteen crisis will have a very strong impact on second quarter twenty twenty results. Now let me turn the call to Christian Lecock. Thank you, Pascal. Starting with Slide 20, you can that we benefited from a dynamic commercial performance during the first quarter twenty twenty despite the slowdown in net growth since the mid March lockdown. In mobile, we won 113,000 new plan customers excluding M2M. In FTTH, net adds continued to grow with 117,000 new customers joining us during the 2020. With a total of 1,100,000 subscribers, FTTH customers represented 28% of the fixed customer base at end March twenty twenty compared to eighteen percent one year ago, closing the gap with its competitors. Overall, at end March twenty twenty, Bouygues Telecom serviced 11,700,000 mobile plan customers, excluding M2M, and 4,000,000 fixed customers. As you can see on Slide 21, COVID-nineteen had a strong effect on usage. First, in mid March, we saw a sharp increase in mobile and fixed usage compared to the beginning of the month. Average voice usage per day in mobile increased by 50%, while average Internet usage per day in fixed was up 30%. Since the entry into lockdown, Bouygues Telecom demonstrated its ability to maintain the quality of its network to support a sudden and massive traffic increase. Second, starting in February, we observed usage tied to the closures of the borders of China followed by The U. S. And lastly, the Europe. Roaming usage in the next quarters remains uncertain. It will depend upon borders reopening and clients' willingness to travel abroad, notably outside Europe. Turning to Slide '22. Sales from services were up 10% year on year in the first quarter twenty twenty. The significant growth in both mobile and fixed cell phone services relatively unaffected by COVID-nineteen. Mobile revenues was up 9% year on year, driven by growth in the customer base and ABPU as well as the positive impact of incoming calls on SMS, in line with an increase in voice and SMS usage. This did not translate into EBITDA after leases gain as interconnection costs were proportionally higher. Fixed sales from services were up 13% benefiting from customer growth in B2C and B2B. In the first quarter, mobile ABPU and fixed ABPU were up year on year. Mobile ABPU increased by EUR 0.4 and fixed ABPU by EUR 1.3, reflecting both the success of our pricing strategy in a less competitive environment. As shown on Slide 23, Bouygues Telecom delivered solid results in the first quarter twenty twenty. Sales were up 2.5% year on year with a 10% increase in sales from services, partially offset by a 21% decline in other revenues. Two factors explain the decrease in other revenues: first, an unfavorable basis of comparison in B2C revenues and second, lower handset sales due to the mid March store closures in France. We estimate that COVID-nineteen had an impact of EUR20 million on Q1 sales. EBITDA after leases for the first three months was stable year on year at €299,000,000 I will come back to this in the following slide. At €68,000,000 the current operating profit was down €23,000,000 year on year due to stable EBITDA after leases and higher amortization costs related to higher CapEx as expected. We estimate that COVID-nineteen had an impact of around €10,000,000 on the current operating profit in the quarter. This amount notably reflects the cost of protective personal equipment, the cleaning of premises and specific safety processes put in place for the stores to reopen after the lockdown. Operating profit of EUR 70,000,000 was down compared to the same period last year due to lower current operating profit and the lower volume of site disposals versus last year. Let's now focus on the changes in 2020 EBITDA after leases on Slide 24. The waterfall on Slide 24 highlights the change between Q1 twenty twenty and Q1 twenty nineteen EBITDA after leases. Please note that all figures have been rounded. The changes year on year are explained by several items. First, an increase in sales from services of EUR100 million, including around EUR10 million for higher incoming calls and SMS revenue. Second, the perimeter impact of Nerim on sales and costs as Nerim was consolidated as of Q2 twenty nineteen. Third, an increase in costs related to ongoing activity. This includes €10,000,000 of additional interconnection costs, resulting from the growth in mobile and voice usage and a €50,000,000 increase in recurring OpEx related to the rental of site and FTTH premises and expenses linked to customer experience improvement. This increase of EUR 50,000,000 year on year should be similar in the next three quarters. Fourth, the reporting of higher tax notably related to the densification of the network six IFRIC 21 taxes are recorded every first quarter only. And finally, around €30,000,000 of nonrecurring OpEx, consisting mainly of brand and advertising expenses and costs related to COVID-nineteen. This increase of EUR30 million year on year should not occur again in the next three quarters of twenty twenty. Therefore, excluding NeurIm and incoming calls on SMS, revenue would have been up around EUR90 million compared to an increase of around EUR50 million in recurring operating expenses. As a conclusion, as shown on Slide 25, I would like to give you some colors on the progressive reopening of our business activity in France. First of all, the lockdown did not prevent us from continuing to manage our infrastructure partnership projects. As a reminder, we concluded a partnership with Senex Tower International to deploy 4,000 sites in London's areas. The closing of this transaction was concluded during the first quarter and we began implementation of the rollout. As we already shared with you, we also signed two agreements regarding our projects, Samalo and Asterix. One agreement is with CENEX for the rollout of a fiber backhauling network whose financing is now almost completed. The closing should be done by end June. The second agreement is with Vobor Infrastructure Partners for the rollout of FTTH in medium dense areas, whose financing process is on track. Since Monday, we started the progressive reopening of our activities and four seventy stores out of 500 are already back in service. All the necessary safety measures have been put in place to protect our employees and customers. However, at the beginning, we do not expect a customer rush in our stores as was seen in other European countries. We have also gradually restarted our FTTH rollout and we expect a strong increase in FTTH. B2B growth should be supported by the increasing importance given by companies to the reliability and quality of telecommunication networks. It could also depend upon the pace of the recovery. However, many uncertainties remain regarding roaming, depending on the timing of the country borders reopening and the clients' willingness to travel abroad. Thank you, Christian. Now I would like to briefly comment on the financial statements starting on Slide 27. We have already discussed Q1 twenty twenty revenues and current operating profit at the beginning of this call. Other operating income and expenses were down €13,000,000 compared to the 2019. This change is mainly explained by the lower volume of site disposals of Bouygues Telecom with EUR3 million in the first quarter twenty twenty versus EUR12 million in the first quarter of last year. Cost of net debt decreased by €11,000,000 year on year due to lower interest expense on our bonds as we reimbursed a bond issue in October 2019. Regarding income tax, we benefited from a higher tax saving resulting from the increase in operating loss in the first quarter. The effective tax rate was 28% in Q1 twenty twenty compared to twenty five percent one year ago. Lastly, the share of net profit of joint ventures and associates was €25,000,000 a decrease of €12,000,000 year on year. It included a contribution from Alstom of €35,000,000 which was nearly stable with the previous year despite the sale of part of our stake last September. We will now turn our attention to the group priorities in this changing context on Slide 29. Bouygues is in a good position to face this unprecedented crisis, thanks to its strategic choices and its strong culture founded on social dialogue. First, the group benefits from a portfolio of diversified activities with Bouygues Telecom more resilient in the current environment. Second, all activities are well positioned in markets with positive medium to long term prospects as they respond to essential needs. Third, as I have already mentioned before, the Group benefits from a strong balance sheet and a solid financial position. And above all, Bouygues can count on 130,000 committed men and women. In France and abroad, their dedication is notably established to social relationships based on a permanent and fruitful dialogue. As shown on Slide 30, ensuring the safety and security of all employees, subcontractors and clients remain our first priority. This is a crucial starting point to resume our activities. We put in place a widespread application of work from home since mid March, and in the past several weeks, we have implemented all the necessary procedures to provide our employees a safe return to work. Mitigating the impact of the crisis on the sales and profitability of our group is our everyday job. To achieve it, we benefit from the variable cost structure of the construction activities, but it is not enough. The business segments also need to execute a strict discipline on costs, launching saving plans and adjusting CapEx spending. Our business segments have been very proactive in planning and reorganizing the business for reopening. In France, thanks to an agreement signed with the unions, employees' paid vacation have been partly allocated to April to facilitate the catch up of activity during the summer. Lastly, in order to maintain a high level of available cash, we have renewed our medium and long term credit lines without covenants and issued €1,000,000,000 bonds in mid April with attractive financial conditions. To conclude this presentation, let's now turn to Slide 31. Let me remind you that on the first of April, Bouygues announced first the withdrawal of the 2020 guidance for the group's Construction businesses and TF1 second, the suspension of Bouygues Telecom 2020 objectives and third, we confirm the Group 2,030 greenhouse gas emissions reduction objective with the definition of a target compatible with the Paris Agreement and drafted an action plan for the group side business segments. As highlighted on Slide 32, as of today, the full year impact of COVID-nineteen on the group, the construction businesses and TF1 remains uncertain. Due to the lack of visibility on business reopening, the catch up of activity and the outcome of the current crisis, it is too early to give any new guidance. Furthermore, Bouygues Telecom maintains the suspension of its twenty twenty objectives, notably due to the lack of visibility on roaming usage and revenues related to reduced travel outside Europe on confinement measures. While first quarter twenty twenty reflects results reflected the initial effects of the COVID-nineteen pandemic, we expect a greater impact on Q2 results for the group and in each activity due to the ongoing health crisis in France and restrictive measures expanded to new countries. Before I finish, I would like to stress that the group has reacted very quickly to face unprecedented crisis. Our first priority has been to secure the health and safety of our employees, subcontractors and customers. We promptly started to organize return to work in all our activities, beginning even before the end of the lockdown. We made mass purchase of personal protective equipment. We also negotiated with the government and professional organizations to ensure that with the protocol put in place, our employees were safe on work site to restart the activity under the best possible conditions. Furthermore, we signed a group wide agreement with our unions to facilitate catch up, at least part of the activity shortfall during the summer. Finally, while obtaining the consent of our clients, we made sure that our supply chain allowed us to restart. At the same time, we renegotiated our credit facilities and issued a bond with attractive terms to secure our liquid HD, which remains at a very high level. Three days after the end of the lockdown, 90% of Bouygues Construction on Bouygues Immobilier sites and 85% of Colas Roads' work sites have been restarted. All Bouygues Telecom stores have reopened with the exception of those in large shopping malls which are not authorized to do so. Bouygues Immobilier will reopen its sales office on Monday and TF1 is also restarting its shooting. Moreover, productivity is constantly improving after some initial setbacks due to the implementation of health protection measures. Our next steps are to return to a normal level of productivity, to catch up the shortfall in activity as much as we can during the second half of the year, to negotiate with our clients in order to minimize the impact of COVID-nineteen, and last, to keep a tight control of our costs, reducing structural costs and identifying new sources of savings in each of our business segments. In conclusion, this crisis will allow us to improve our approach to working and to strengthen our agility. I firmly believe that the group is well prepared to handle this situation and that we will be able to bounce back thanks to the dedication and creativity of all our people. This concludes my presentation. Please, operator, open the floor for questions. Okay. So our first question comes in from the line of Nicholas Cott Collison calling from HSBC. Please go ahead. Thank you. Good morning. My first question is on construction and related to the high order book in the construction business. Obviously, you've signed some contracts, but you have now extra safety cost and certainly lower productivity. So how do you protect the margins for 2021? Were you actually able to pass some of the cost to your client in Hong Kong, for example? My second question is on telecoms and the B2B market. First, on the current situation, are you experiencing any issues with payment delays? And how do you assess the risk of SMEs going out of business? And maybe for the medium term, with the COVID crisis, does it make you reassessing the B2B strategy, maybe offering more services and security or cloud services, possibly through more acquisitions in that field? Thank you. Hi, Nicolas. I will this question I will answer to your two questions about telecom. First, I would like to remind you that our exposures, the B2B to SMEs is very, very low because our market share is very small. Given the exceptional context of COVID-nineteen, that's right that we have adjusted our collection procedures so to as to not to cut customers' lines during the crisis. And this could lead, of course, to an increase of human default at the end of the year, but we think that, that could remain very at a very low level. And about bankruptcies, we do not see, for the moment, any bankruptcies in Essence. Your second question was about B2B strategy. We are working to of course, we during the crisis, we have been able to propose to some companies some new services. I don't know exactly the kind of services, but I know that the marketing guys do that. And we are working also for the period after holiday period, so it's back to school period, sorry, to push on the B2B. Back to your first question concerning construction and extra costs related to the COVID-nineteen. What I can say, first of all, we are quite early in the process. Obviously, we have started the discussion with all our clients in France and abroad. It is I would say that it is a one by one discussion, except in France, where we have a discussion with the public authorities concerning these impacts of extra costs and the lack of productivity less productivity due to the measures we have taken. So we are starting the process. Let's say also that at Colas level, we will be able to pass through these extra costs to the clients very rapidly because the backlog is the duration of the contracts are quite short. So when we are bidding now, we take into account these impacts. And by Bouygues Construction, we will try to get compensation from our clients. It is negotiated at the present time, but we have a global discussion for public clients in France. Okay. Thank you. That's clear. The next question comes in from the line of Matthew Robilliard calling from Barclays. I had a question on the telecom service revenues first. You posted a very impressive performance with a 10% growth, which was much higher than previous trends and also higher than the guidance you had initially released. And I was wondering whether this number was a surprise to you to some extent? Or were you actually expecting a very strong Q1? Or were you just being conservative in your guidance for the full year? I understand there's a bit more SMS and voice as you pointed out, but it doesn't seem to be explaining the variance there. And then I had a second question on the construction side. You mentioned that around 90% of the sites at Bouygues Construction and Montevilliers have reopened as well as 85% at Colas. But can you give us an indication as to what kind of level of capacity utilization they are at? Because, obviously, reopening is not the same thing as opening at full capacity. And I don't know if it is too early for you to communicate on that, but if you could give us a sense of of today, what is the kind of capacity utilization versus ex COVID world situation? Thank you. So about your first question about telecom, keep in mind that in Q1, we had two specific effects. The first one, as you mentioned, the SMS and call incoming call on SMS revenue. The second one is the Nerim. Nerim was not consolidated in Q1 of last year. But except these two items, that's right that the performance was very good during the first quarter for the revenue. This is due mainly to the, of course, the increase of number of subscribers and better ABPU than it was last year or even, I think, at the end of last year. So it's a good performance. We are very happy of that. It's a bit better than expected to bias. Thank you. Concerning your question related to construction, I would say that in terms of productivity, we are progressing very rapidly every week. In fact, the April the April, when we restarted activities, the productivity were was very low. The level of activity was very low. So sites were started, but we were learning. In fact, we were in a learning curve approach, productivity was quite low. In terms of civil works, the lack of productivity exists, but is not so important. In terms of building activity is lower due to the fact that there is a lot of coactivity in the building site. So it's more difficult to organize, but we are also progressing every week significantly. Let's say that as of today, I would globally, in civil works, we will be in the at about eighty, ninety in the for the building around 50%. I am I I clear? Yes. Thank you. The next question comes in from the line of Eric Lemery calling from Bryan Garnier. Please go ahead. Yes. Good morning, and thanks for taking my question. First question regarding Bouygues Energy and Services. Could you tell us the level of the operating margin in Q1? And could you remind us still for Bouygues Energy and Services, the key end markets? Did you observe some specific resilience for some end markets? I am thinking about, for instance, hospital or nuclear sites. I don't know if Bouygues Energy works with these markets. And I got a second question on your on the breakdown between fixed and variable cost within the construction activities again. You mentioned the benefit of variable cost structures for construction. But could you remind us the split between fixed and variable cost for each of your key construction division, please? Thank you. Yes. Of course, concerning your first question was related to the profitability of our Energy and Services division. Globally during the period, the profitability has been of 0.9%, but excluding the COVID impact, it would have stood at 2.8%, which reflects the improvement of this business margin as already initiated last year and that we have which is our plan, in fact. So we are at this level we were expecting excluding COVID. The second idea you had is resilience concerning activities. You mentioned precisely these activities which has not been locked down, which are the maintenance and of equipment for essential buildings. You mentioned public buildings, hospitals and nuclear plants. Obviously, these activities has continued. But in our mix of activity, it's not so huge part. So this is the reason why the impact of profitability is what it is. Thank you. The third question was related to the fixed and variable part of our construction activities. Let's say that we have to divide by activity. In the introduction, I would say that our structure of cost is variable, but the situation we are facing is very particular. This is very particular because when we generally, when we say that our activity is variable, that means that when the market goes down, we are able to adapt our structure to make sure that our level of structure is adapted to the actual level of activity. In the present situation, we are facing a situation in which we have to maintain the structure to be able to resume activity at the level which was expected before. So this is we are covering a period in which, for a very specific reason, we have suspended activity. In this context, what we pay, what we don't pay. Obviously, we pay the structure even if we have partial unemployment, but we pay also amortization and we pay also renting of equipment and so on and so forth. And in that particular context, obviously, the variable part is lower than it is generally when we see when we say that the activity is variable. We have been very proactive to manage that period, and we have put people under unemployment during the March, essentially within Bouygues Construction and Colas. And the variable we can say that for this period, let's say that the variable part is two two third of the global activity. You. Am I clear? Yes. Yes. Thank you very much. The next question comes in from the line of Giovanni Montalte calling from UBS. Can I ask if you can share some comments with us about the ongoing competitive dynamics in the French telco market? In particular, there have been some, let's say, up and down with pricing for entry level data in mobile. I don't know if you can share with us some thoughts there. And also on your EBITDA analysis in slide 24, for the telecom unit, I see you do not include, the revenue change for others. So I was wondering if that means that you see no profitability from this type of revenue line. Thank you. Yes. So about your second question, as usual, the other the other revenues did not do not generate any profitability. This kind of revenue is handset revenues. So this is a cost for us. This is a subsidies. And we taken in account directly the net impact for the subsidy, which is the revenue minus the cost of the handset. And the other part mainly is the build to suit revenues. And the margin for the build to suit revenues is very small. So no impact coming from that. Your second question was about Sorry if I interrupt that because I mean, you're never given any clear indication on what's the level of profitability of the No. No. Say, bid to suit. Zero. Smaller. Smaller. Very small. So I should have considered 70,000,000 less. I mean, obviously, big parties answered, but there is something on the project as well. Yes. We we should think at it at the profitability of this project as something immaterial. Let's say, is this the right way of looking at it? This is immaterial. Nothing. Nothing taken. Thank Thank you. Your second question was about the competition in competitive environment. So before the lockdown, the competitive environment was the same as last year, so very good competitive environment, price going up, no of little level of promotions, small level of promotions. Since the lockdowns, the situation has been quite different for the low end part of the market because we saw some a bit more promotions than before, but we are not at the same situation than in 2018 or before. The impact is very, very limited. For example, we didn't see any pricing at EUR 5 for Life than before, just that what was probably at EUR 15 is we had some promotion at EUR 12, for example, during three weeks. This is so the impact is very limited and we expect that we will come back to the situation before the lockdown now as the shops are now reopening. So so sorry. Apologies. The the line was breaking down. You you said you you think you you the market may go back to the situation pre lockdown? Yes, yes, yes. Because the level of promotion was very a bit higher during the lockdown, but the impact is very limited. It's only a few amount of your promotions and not big promotions at €5 for Life two years ago or even €1 during twelve months in 2015 or before. So we did not see that during the lockdown. Thank you. The next question comes in from the line of Josef Puja calling from Kepler. Josef, please go ahead. Yes, good morning. My first question is on the €150,000,000 of costs that you consider had the COVID in Q1 for you. I wanted to know if the impact. Yeah. I I wanted to know if we are talking here simply of the lower sales and the impact that it has to yeah. It becomes more difficult to absorb fixed costs. Or on those 150 where there's some, I would say, one off costs, like, I don't know, maybe buying computers to accommodate, teleworking for for your employees or buying one off a lot of, I don't know, masks or either alcoholic. Is there something which was done, let's say, once and for all? Or we can extrapolate this 150,000,000 and consider that two weeks of lockdown means €150,000,000 and we can apply that to April and so on? That's my first question. The second question is regarding what you said before that in the new bidding process in construction, you are passing these extra costs to the customers. My question is, on average, how much in percentage do you increase the bill by division, yeah, at COLAs, at construction? And if you can give more flavor on that, what is generating those extra costs and so on? Thank you. Concerning your first question, how we evaluate how we did to estimate the amount of the impact of COVID during the first quarter. During the first quarter, in fact, it's quite easy to understand what we did. We included in that the cost of stoppage of which we have of activity, of which we have already compensated with 16%. We have included the 16% of extra costs for people which were under partial unemployment. You know that people are generally paid 84% of their wages when they are under unemployment scheme, and we have decided to compensate our people for that. So it is obviously an extra cost. We have the cost of slowdown of the activity. Obviously, we have the cost of purchase of masks, gloves, thermometers and so on, and we have the cost to which is related to the gradual restart of activity. So this is a mix of all these items which are not totally linear, I would say. Obviously, the cost of masks will be linear during the period during which we will be obliged to have masks and so on, but some are one off. But our figure is a cumulative figure. The second question you have were related to for the future, how we bid. In fact, as many of the sectors are uncertain, when we bid, we have it depends on each contract, we can say in general that it is not a lump sum price that we indicated for that. What we aim to do it's not always the case, but what we aim to do is to say, okay, we'll we'll have have during a certain period, but we don't know how long it will last. During period during which we will have some extra costs. We'll have a compensation close, in fact, for that. You know, it's not not a lump sum. So I can't say what will be the the the the the the how how much it will represent because we don't know how long how long it will last. Yes, yes, it's very clear. If we assumed a contract which is short enough that all during all the life of the contract, you are impacted by these extra costs. How much would it increase, yeah, if we talk, for example, COLAs? A COLAs average contract, how in percentage, how much more expensive it becomes. Does it increase by 3%, by 10%? It's just to to have the order of magnitude. Yeah. I do not ask you to be very precise, but, yeah, to to give some flavor on that would be appreciated, please. I'm very sorry that it's strictly impossible at that stage. Please remind that the confinement has stopped three days ago. So it's very, very too early to give any flavor on that in that respect. Respect, I'm sorry. We are unable to do so. It depends on each contract, on each activity. Obviously, I told you the activities are quite different. Obviously, when we have a man, just a man who working in an equipment, it's very small. If we have many people at different in a very small area, obviously, the amount will be far far more important. No. Sorry. I have no average figure for that. No. No. I I fully understand. It's it matches the figures that we have heard here and there, which go from 3% to 15%. So I I fully agree with you that it's very difficult at that stage to see what will be the reality. Thank you very much. Thank you. The next question comes in from the line of Andrew Lee calling from Goldman Sachs. Please go ahead. Yes. Good morning, everyone. I had a couple of questions. The main one was really on the telco business and why you felt you couldn't reintroduce guidance on that part of the business when we've seen your peers do that or Engineerly add in recent weeks. Is it due to your B2B exposure? I thought that your B2B exposure was lower than peers and particularly your SME portion of that. Or is it a difficulty in mitigating the impact of the COVID revenue impact with reduction. Just any color on that uncertainty would be really great. And then secondly, I wondered if you could just give a bit more of an understanding on the Immobilier trend in Q1. It looks a bit worse than what your competitors have been showing, which has been an improvement. Any kind of color on the difference and why we should be confident in an improvement in immobilier through the rest of the year will be great. Thank you. So about your question about telecom. First of all, I will remind you what are the financial impact of COVID-nineteen for Bouygues Telecom. The first one is lower net adds due to the slowdown in market growth and also in for our growth. So this could lead to less revenue in the future. Third on impact will be a deferred price increase in our More For More strategy. So we have decided to delay some price increase during the lockdown. These two effects will be compensated by lower acquisition and retention costs during the lockdown. So the impact on the EBITDA of these two effects will be very small. However, I remind you that the impact of handset subsidy cost will not be immediate since they are spread out over twenty four months due to IFRS 15. But you have to add to that the impact on Roaming represents today 3% of our total revenue, so it's a quite big portion. And we have a lot of lack of visibility on our roaming revenue. And in face of this roaming revenue, we have no cost or small cost, no possibility to offset this kind of flows. Of course, it would have been theoretically possible to maintain the guidance by cutting the CapEx. But by doing that, we would have been we would have taken risk on the quality of our network in a period when this quality is very important for our clients, in a period when the need of capacity is much higher than in the past. And so we decided to not to do that. We will see in the future if we need to invest more or not in the capacity of our network. During the lockdown, we benefited from the slowdown of cost on the construction of sites. So we saved some CapEx during this period. But now we have to think and to see if we need to invest more capacity on network. We don't want to take any risk on the quality of our network because I remind you that the quality is a key point of our strategic point of our strategic plan and we do not want to lose all the benefit of our strategic plan that we began two years ago just to save a few dozen million euros this year. That makes That's helpful. This is a strategic. This is not to it would have been very easy for us to keep the guidance by cutting CapEx, but strategically, it's not the good solution. Thank you. As far as your question related to Bouygues Immobilier, commercial residential reservations are effectively down. In fact, it was expected. We knew perfectly before the COVID crisis that before elections, we will have very few reservations due to the fact that we have a low available supply. So so we we are we are we are not surprised about that. The the COVID nineteen has worsened that situation. I said that there is two periods, and there is a period before municipal before elections, for which obviously we have lands, we have applied for permits, but we know perfectly that we won't have the permits before the election. So obviously, the COVID-nineteen is for two reasons bad news, but it's life. The first reason is the fact that during the the the confinement period, the reservations has been have been very low. And secondly, we know perfectly that our supply will be higher when after the elections, and the election are supposed are are postponed postponed. We don't know if it will be in in June or or later. Obviously, if it is later, it's not a good news for Bouygues Immobilier. So we will see we will see after the election. We have lands. We have we we have applied for permits, and and we we we have the opportunity to to to restart on being in a situation which is far better. Thank you. That's very helpful. The next question comes in from the line of Steven Bejesen calling from MainFirst. Please go ahead. Yes. Thank you. Could you make a word? I know it's very difficult, but is there anything you see in terms of tenders and pipeline Are we starting to see anything yet on the momentum for infrastructure plans or what's happening with the hospitality industry for instance? And is that very significant in the pipeline? So any color you could put around the construction pipeline would be appreciated. And just a word also on telecoms, just sorry to come back on this one, but just to understand if the deceleration in EBITDA growth, you would say, is entirely therefore due to the roaming that you mentioned. The reason I'm asking the question is because the slowdown at Bouygues Construction despite, you know, the the strong network sales, you know, some savings you've made in marketing and and the furlough of employees, it it's it's probably greater than what we've seen with some of the telecom operators. So I just wanna make sure I'm I'm not missing something there such as, you know, consolidation of Nerim that could be, you know, negative margins or, you know, anything anything special. And just to start, if I could, anything you could say on the impact of oil prices for Colas? Thank you. So just to remind you that the impact of EBITDA is the fact that our EBITDA is stable is mainly due that we add this quarter EUR 30,000,000 of nonrecurring OpEx. We won't have this OpEx the next coming quarter. About Nerim, you saw on the Slide 24, I think, that the margin for Nerim is quite near zero for the first quarter. So plus 10,000,000 in sales and around minus EUR 10,000,000 in cost. So about the rest, I think the slide is quite clear. And the roaming impact is very small during Q1 because at the beginning of the lockdown, we still had some people abroad trying to come back in France and not able to do it. So they used a lot of their phone. And the forming the level of forming Q1 twenty twenty compared to Q1 of last year, the level of roaming is stable for Q1. And it represents around 20% of our roaming revenues, Q1. Back to your question related to construction. As far as our backlog our pipeline is concerned, let's say that the infrastructure needs remain very high, so both in France and abroad. Obviously, during the confinement period, there is some delays which has been introduced in the procedures in order to award the contracts. But generally speaking, the pipeline is not as of today affected by the COVID-nineteen. We will see what happened later, but because there will be two impacts, obviously, there will be probably budgeting issue for certain people, but I remind that our business is quite important because when a government want to do a stimulus plan, you have to the major activity which is concerned is generally infrastructure and building because they have some levies in order to accelerate the global activity in that respect. In France, nothing very important has been decided yet, but there is already EUR 1,000,000,000 for sustainable infrastructure, which has been announced. In Europe, there are some other stimulus plan. If you consider, for instance, UK, in which they have decided to do the HS1 project, I mentioned before that we have been awarded a EUR 1,000,000,000 contract this month in that respect in April, sorry. And I would say that in The US, it's totally massive. So we are sure that we will benefit from all these stimulus plans. But frankly speaking, it's quite early. So it's it's my favorite answer today, but, you know, we are in the middle of the of the sanitary crisis. So we people we are managing first resumption of activity, but government do so. So it's not very surprising. The second question was related to the oil price here, we have combined impacts in that respect. For construction, obviously, it's a good news because public budgets, for instance, are not extensive, if we pay a lower price for bitumen, it's a good thing. And if we have already contracted with our client and we pay lower price for bitumen, it's a good news for us, so good double good news. The sole impact we have is the impact in the activities of producing and trading bitumen. And in that respect, it's for we are in specific situation at the March because the price was probably at the worst period for evaluating stocks. This is the reason why we had a slight impact we had an impact in TIPCO, but this impact will be probably compensated at least for part of it during the forthcoming quarters. But there is no impact at the MacAsphalt for the MacAsphalt activity as the index is remained very stable in this area. Thank you. Thank you. The next question comes in from the line of Nabal Khristini calling from Morgan Stanley. I have questions, please. Firstly, just a quick follow-up on B2B. Could you help us have a better view on the B2B exposure? How much of the revenue is exposed to B2B? And then on the dividend, could you please discuss the main elements you'll be looking at when assessing the dividend around July, August time? A bit of color on the thinking process would be much appreciated there. Thank you. So about your first question, I'm sorry, but we do not disclose our part of B2B revenue in the total revenue. Just to give you some flavor, our market share is around 30% in the mobile for the high end part of the market, for the big companies, I would say, in the mobile. For the SME, we are around 10% in the mobile. And in the fixed business, we are around 5% either for the SMEs and the big companies. So you see that our market share is quite small, especially for the SMEs. Concerning dividends, I remind you that the decision we took during the month of April was not related to the financial structure of the group. As I explained before, the structure of the group is very solid, we do not have any hesitation or question concerning this in the forthcoming period. So our decision Martin decided to propose to his board not to propose this dividend due to the fact that we were in the middle of the sanitary crisis. So with with some very, very sad news every day on the on the newspaper, on this, and so on and so forth. So so this is this was the driver of this decision. So what we what we will do July or beginning August is that we will reconsider where we will stand in terms of resumption of activity, where will be the sanitary crisis, in which countries, where we will be affected, not in the past, but what what what will be the future visible at that date. And we will decide on that with that with these elements. Thank you very much. The next question comes in from the line of Jerry Darlis calling from Jefferies. Please go ahead. Yes. Good morning. Thank you for taking my questions. My first question has to do with productivity. You mentioned that on building sites, productivity is currently running at around 50%. And I just wanted to understand how we translate that into your financials. Does 50% productivity imply that revenues are falling are running 50% below normal levels on the basis that revenue is presumably generated or linked to delivery milestones. And on the cost side, I mean, what does 50% productivity sort of really mean? The costs still run at sort of a 100% of of of of normal levels, or or what would the the linkage be, please? And and you mentioned getting back towards sort of full productivity, and I wondered what you think has to be achieved in order to get there. Given that the additional safety costs and social distancing measures are unlikely to go away, you know, how realistic is full productivity? Would there be an incremental ongoing cost associated with that? And then very finally, if I may, would it be possible on telecoms to comment as to how much your churn is down during the period of lockdown, please? Thank you. Will okay. I will answer briefly to your question on telecommunication. Of course, the churn was much lower during the lockdown. So the sales was lower and the churn was also lower. As far as productivity in construction is concerned, let's say that obviously, the figure which we just mentioned is a combination of all factors. Obviously, there are the health and safety measures which are taken in order to protect our employees, but it integrates also, it's very, very important, the availability of the supply chain and subcontractor. I told you that we organized reconstruction to restart as soon as possible and our construction as soon as possible. But we have been very proactive. We have been buying some masks in China during the March, which has been delivered at March in France, but I would say that it was blocked by the French authorities, which have taken part of this for their own needs. But if you consider this situation for us, it's not always the same for our supply chain and for our subcontractors. This is part of the reason for which the profitability is productivity is quite is affected at that stage. But this is progressing very deeply week after week. And we expect from the end of confinement, which is very recent, that this will boost rapidly the activity of our building activities. So and this is what we have seen during the past weeks. There is no reason specifically to have a curve which not is which will be better week after week. This we are convinced about that. The second question you had in that respect was how to convert this lower activity with our turnover. Obviously, we are paid when we can invoice when we deliver. So, obviously, this is directly linked to to our turnover. Sorry. And thank you for that. And on the on the cost side, how how are the costs related to lower productivity? What sort of protect savings are available relative to the normal cost that's when you're running at 50% productivity given your earlier comment that you are maintaining the capacity to get back to normal? No. We have not an we have not an impact on productivity of 50%. This is a current level of activity on-site. But this is the activity is low, for instance, because subcontractors are not there. So so when we we don't have the turnover, but we don't have the the charges which are related to that. You you understand what I mean? Yeah. Are back to the question I ensure I answer I answered before, which was related to the part of a variable on the fixed cost And the part which is related to the productivity is far lower, unfortunately. Got it. Thank you. The next question comes in from the line of Frederic Boulan calling from Bank of America. Please go ahead. Hi, good morning. Two questions on my side. Firstly, in terms of free cash flow. So can you go through the measures you're taking in terms of free cash flow preservation? Your working cap was not that different to last year. So it doesn't seem like there is a big impact at this stage. But if you can go through what you expect and if you can give us I mean, it's probably a bit early for a specific guidance. But considering what you've seen March, April, May, do you have a kind of a range of different scenarios you've done in terms of free cash flow or net debt for this year? And then secondly, following on Nawaz's question on the dividend. If you could explain a little bit what are the criteria for you to take that decision? And what's the framework for the ordinary dividend, special dividend? Can you actually do that considering the French government is asking every company to get dividend by onethree? So what's the criteria? Is it based on free cash flow generation in the year? Or is it based on your confidence in free cash flow generation in the next year? So if you can help us a bit on your decision tree here. Thank you. Okay. Starting with working capital question. Let's say you have seen that there is absolutely no impact of COVID during the 2020, which is related as far as the working capital is concerned, so no impact, no impact for a reason which is very simple. The fact that when we work, we invoiced at the end of the month, let's say, and at the end of the month, the activity was lower. But as we have always delayed the period to be paid, there is no impact and it is too early. We think that we will have an impact on working capital a sort of distortion during the coming period because we will have the impact of the lockdown period in which we have nothing to invoice and we will have to pay suppliers and contractors for work they perform before. So we will have a distortion over time. This distortion will be corrected, I'm unable to say today what will be the period for regularization of that, but for sure, at the June, we will have a significant impact, which is related to the lockdown. As you as I mentioned before, we have abandoned our guidance. We didn't give a new guidance because we are not at the end of same time crisis. So it would be quite surprising to be able to give a new guidance as we don't know on which scenario we can base that guidance. May someone mentioned before that some people are doing some guidance, fair enough, but we don't have that price table, so we are unable to do so. It's too early. Frankly, it's too early. We are managing the sanitary crisis. We are managing the resumption of the activity. And then when we will be later, we will be able to tell you more about that. But obviously, we will have as we mentioned, the result of the year is affected, so there will be impact on that. And there will be an impact on working capital, but it's we are unable to manage to tell you that today. So this is the reason why we do not give any guidance in terms of free cash flow. Your question related to dividends, I mentioned before what was the criteria. And if I have to choose when you mentioned several ideas, obviously, this will be guided by our ability to generate cash flow on medium or long term because you see the year will be affected. Okay. Thank you very much. Okay. Thank you. Have another question apologies, please go ahead. Just you mentioned also what what I've said the French government in terms of of of in terms of dividend. I I I remind you that they said precisely that unemployment measures was not the measure which will induce the impossibility to pay dividends. This is related to tax postponement payment postponement and credit lines which has to be guaranteed by the government, which is absolutely not the case for the with the Bouygues Group. I mentioned that our situation is very strong. Obviously, we didn't seek any help from the government in order to support our financing. So we are not in that case. So we have no this is not a criteria for us. Okay, clear. Okay. Thank We have another question coming through from the line of Eric Lemaree calling from Bryan Garnier. Please go ahead. Yes. Thanks. Just two quick follow-up questions for me, please. So first one, you mentioned that currently two third of your costs are variable due to the pandemic situation. Was that Yeah. In average. And what was that figures before the pandemic, let let's say, last year? This is my first question. And and and the second question, I understand that actually a lot of mayor in France have been elected after the first round of election in France and that city councils should be able to be put in place as soon as the May 18, so very soon. Do you expect some positive impact from that, let's say, for instance, as soon as June? You. I'm sorry, your second question first. Obviously, the fact that we will have a municipal council, is a good news, but if you have to take in mind two different things. First, generally, people which are elected at the first round are small municipalities where we don't have the major part of our activity. And so second part, even after election, it will take a bit time to restart, so no massive impact related to that decision. Okay. Secondly, concerning the cost structure, there is no difference, major difference in our cost structure before and after COVID crisis. This is general. What I mentioned before is the interruption of activity related to COVID allows us less flexibility than when the activity is decreasing due to a market factor because when we are adapting our structure for our markets, we are able to adapt our structure for our market factor. But in the precise case, the interruption of works during some weeks, we have no impact on our backlog. So we'll have to deliver the backlog, which is at a high level. So we we obviously, we we couldn't we adapt our structure to a level of activity, which will be maintained. Do you understand what I mean? Yeah. Yeah. Yeah. Yeah. Yeah. Think so. What what we do, we we we are making efforts in order to select our we have some spendings which are related to some projects. Obviously, this year, we will suspend some projects which are not strategic. We will maintain strategic projects. And Christian, for instance, mentioned that before. So we will be very selective this year, I would say, a bit more than selective than usually. The next question comes in from the line of Thomas Cowdry calling from Bryan Garnier. Please go ahead. Yes. Thank you very much. Two questions on telecom, please. The first one is a quick follow-up on the COVID-nineteen impact on the telecom business. You mentioned that you have a €20,000,000 revenue impact and €10,000,000 current operating profit impact. I just want to understand what part exactly falls into the as an EBITDA impact over the quarter. And that seems like, let's say, a higher conversion ratio from revenue to current operating margin of 50%, in spite the fact that you said that roaming did not have an impact on the quarter. So I'm trying to understand how we should extrapolate that over Q2 as the revenue impact will be higher. Should we expect like at least a 50% impact falling right down into the current operating profit? And my second question is on network sharing agreements. Actually, Iliad requested lately an extension of its roaming agreement, national roaming agreement with Orange. I'd like to know what's what's your reaction to it. And, more generally speaking, do you think that the the the COVID the the COVID crisis, might have an impact on the regulate regulatory stance and politics as far as network sharing And would you expect, I mean, regulation to be lighter on this point with the objective of having wider network sharing agreements over the French territory? Thank you very much. About your third question, about roaming agreement, the extension of roaming agreement between free and orange is about two gs and three gs technology. So the impact is no impact for us, I would say. Of course, we would have preferred that this roaming agreement stopped, but it is not the case, but it is not a problem. About regulation, we will see. I don't know about that. Today, the government is mainly managing the sanitary crisis, and I don't think they have any time to think about that. The beginning was about the impact of other revenues, I think, on EBITDA. So I remind you that the other revenues have no impact on EBITDA, so or very small, right? Sorry. Excuse me. My impact was on the COVID related impact. Sales is negative EUR 20,000,000. It turns out into current operating profit of 10,000,000, so specific more or Yes, yes, yes, that's exactly that. The minus EUR 20,000,000 is about other revenues, not on sales from services. Impact on sales from services is, in fact, positive because we had more incoming calls due to during the lockdown. So the minus 20% is minus 30% in other revenues plus 10% in sales from services. And the minus 30% in the other revenues is coming from handset sales. And so the margin is, of course, negative on handset handset sales because this is a subsidiary, okay? And about the EUR 10,000,000 impact on current operating profit or EBITDA. So this is mainly cost, this EUR 10,000,000 of cost. This is EUR 5,000,000 of buying of safety equipment for our employees and for the reopening of the shops. And this is also EUR 5,000,000 we have taken in precaution because we decided at Bouygues Telecom to to pay sorry, our suppliers quickly. And also, we have pledged to pay the invoices for the micro business. And that's why we precautionary, we took EUR 5,000,000 expenses on that. Okay. Very clear. Thanks. The final question comes in from the line of Matthew Rubilliard calling from Barclays. Matthew, please go ahead. Hello, Matthew. Is your line muted? Oh, sorry for that. Can you hear me now? Yes. Please go ahead. Yeah. Thanks for taking a follow-up question. Very quickly on the costs again. You highlighted in slide 24 higher costs that you qualify as nonrecurring for brand and advertising. And if we take out maybe 10 for COVID, that's that's 20 for for for those advertising and brand. It seems like a very large amount for a quarter, so I was wondering if you basically entered into contracts and recognized some spending that will be actually spent really during the whole year. Because, I mean, living in France, I haven't seen anything particularly strong in terms of of new commercial push certainly in the last few months. And so is it really what I just said? And and second, when we look at this at the end of the year, you will be saying or you the the the right presentation would be, well, we spent EUR 30,000,000 EUR 20,000,000 more throughout the whole year and that's kind of much more normalized. So it's not a one off. Hopefully, that's clear. Yes. The EUR 30,000,000 is a one off. I don't know if you are in France or not, but we launched a very big advertising company in January for our new brand signatures, which is on a FAPE Poet Ensemble. And this is the launch of our new not exactly a new brand, but this is a new marketing positioning. So we did that in January and February, a very big, big, big campaign. And this campaign is here to support our quality program. At the same time, the quality program will, of course, continue. But usually, we do not have big marketing expenses for communication and bond in the first quarter. And this year, this is the case with this big marketing campaign. Okay. Thank you very much. Thank you. That does conclude today's question and answer session. So I shall turn the call back across to yourselves for any final closing remarks. Thank you very much for joining us today. We will be announcing half year twenty twenty sales and earnings on 08/27/2020. Should you have any questions, please contact our Investor Relations team. Their contact information is on the press release on our website. Thank you. Ladies and gentlemen, this concludes Bugui First Quarter twenty twenty Results Conference Call. Thank you all for your participation, and you may now disconnect.