Good morning to all of you. Thank you for joining us today for this capital market day, which is dedicated to our construction businesses. Today, we've got four objectives. First is to share with you our vision of the construction sector and the city of tomorrow. We'd like to present the strategy of our three construction businesses. The construction sector is a growing market over the long term, driven by urbanization and environmental challenges that require more sophisticated infrastructure, and in the short term, this sector is boosted by stimulus plans launched in many mature countries in which our construction activities are present. We, therefore, believe that we enter a long period of high demand at a worldwide level, and the good news is, for each of our three business segments, we are well positioned on the market to benefit from this promising outlook.
Our second objective is to focus on two main strategic topics. The first is the maximization of the value of industrial assets at Colas. The second is to show our leadership in sustainable neighborhood and smart city, as well as in smart road and smart mobility solutions. Our third objective, as the construction sector is completely transforming due to digitalization, we want to show you how we anticipate, how we innovate to maintain our leadership in our three businesses. Our last objective of this event is to educate financial community and explain our value-added and competitive advantages. With this small introduction, I think you've understood that the purpose of this day is not to comment on short-term results and 2018 outlook. We won't answer any question related to Q3 or to the trend in 2018 or the results of 2018.
Moreover, you will notice that we won't present in detail the energy and services strategy as we are currently integrating Alpiq Engineering Services. We will get back to you on that topic next year. This session will be concluded by Philippe Marien, Deputy CEO of Bouygues Group. During this day, there is coffee break and a cocktail buffet. We invite you to visit our booth in the lobby to see our innovative products. Our team will be pleased to make a demo of each product we present today. We have with us the CEO of our construction businesses, these gentlemen, as well as senior executives from Bouygues Construction, Colas, and Bouygues Immobilier. Let me introduce briefly the group construction businesses. As you know, Bouygues Group is a major player in the construction sector in France and in international markets.
The group is active in building and civil works, property development, transport and energy infrastructure in more than 90 countries. Our key figures: total sales stood at EUR 26 billion in 2017, and the backlog at end of December was close to EUR 32 billion. At end of June 2018, we reached EUR 33.7 billion. Bouygues is one of the world-leading construction firms, ranking sixth out of 250 different companies, according to last year's release in August. Each of our three construction businesses has a leading position in its market. Bouygues Construction is acknowledged for its strong expertise in complex and sophisticated projects and is notably the worldwide leader in tunnels. In property development, we are number one in France with sales of EUR 3.5 billion. At a worldwide level, Colas is a leader in roads.
It's the biggest purchaser of bitumen in the world, and it's a top 10 largest producer of construction aggregates. I'd like to outline the key strengths of our construction businesses. The first strength is our people. We can rely on 104,500 committed and skilled employees. Second, we stand out from the competition by offering high value-added products and services. Third, we are positioned on each step of the construction value chain. Fourth, we've expanded our presence into international markets in a very selective manner. Lastly, the business model of our construction businesses is resilient. With a sustainable generation of current operating profit and free cash flow, and a very high level of net cash. Our people. Our people are the most important resource. Their commitment, their motivation and skill are really key to our success and to our progress.
Our employees share the same values, especially respect, which is absolutely key for the group. Our management is also based on three different pillars. The first one, empowerment, to encourage self-reliance and initiative. Second, creativity, which drives each of the construction businesses to innovate. The third, passing, developing, sharing expertise, which are the driving force in relation between our people in our group. Offering high value added solution allow us to differentiate from the competition. Our construction activities benefit from a worldwide recognized technical expertise and are strongly committed to qualities that feed strong brands. This has made the group a benchmark in complex and sophisticated projects. Moreover, we have built a specific know in sustainable construction, for example, in solutions to help reduce energy consumption. More than that, we offer services to improve the user experience. Finally, this unique expertise is supported by constant innovation.
Our construction businesses historically aim at extending their positioning in the value chain in their respective markets. Covering the entire value chains leads to increased contract value and to have a stronger competitive positioning. It notably reinforce the direct relationship with customer, which is absolutely key in a construction sector, which faces a growing risk of disintermediation. We as Bouygues Group have always expanded our offer to remain the single interface for the client. Construction businesses have become skilled in integrating the best internal skill and external expertise, making it possible to offer a full service solution to our customer. We integrate business partner from all of size, from the startup to major group. The Bouygues Group has expanded into international markets since 1970 in a selective manner, seeking growth opportunities, but at the same time, maintaining our risk management standards.
At the end of 2017, more than half of revenue were done internationally. Today, our group operate in more than 90 countries, offering a low risk profile, growth, and supportive infrastructure plan. On the slide, as you can see, in the three main area where we generate revenue, North America, Northern and Central Europe, and Asia and Australia, we benefit from large stimulus plan in road, rail, building, and infrastructure. With a small picture you could see each activities. You will notice that we have a very little presence in Africa, as we have a very cautious approach and contract-by-contract strategy. This map shows that we are positioned on buoyant markets. Our business model. Looking at the last 15 years, you can see that the business model of our construction businesses is resilient. Construction activities constantly adapt to economic cycle, thanks to a highly variable cost structure.
They have between 60%-100% variable costs, depending on project and depending on countries. Our team also know how to manage and minimize the impact on their profitability of difficult project which may occur. The ability to constantly adapt, as well as to offer high value added services, and to cover the entire value chain, allow the construction businesses to generate a sustainable level of current operating profit and recurrent free cash flow. This sustainable growth model is in line with the Group ambition to create value over the long term. One of the major strengths of the construction businesses model is also the high and steady level of net cash, which stood at EUR 3.8 billion at the end of 2017. Within the Group portfolio, the construction businesses tie up the least amount of capital and generate a high level of cash.
To end this introduction, I would like to present the four mega trend impacting our sector, at the same time, mega trend were source of opportunities for our businesses. The first one is population growth and urbanization. In 2050, the world population will be close to 10 billion individuals. Two-third of them will live in urban area. This lead to a strong demand for infrastructure construction and renovation, traffic decongestion, or managing complex flows and networks. The second macro trend is climate change. It generate a strong need for innovative products and services adapted to environmental regulation. The third one is digital and technological revolution. New technology are changing the behavior at work, at home, and also changing the way company may conduct their business. The last one is changing user behavior, as the user want to simplify their daily life with more personalized solution.
In that context, the construction businesses' strategic priorities are first to control key resource, like quarries and bitumen for Colas, and we will cover this, and material recycling in all our construction businesses. Second, to be the market leader for construction and renovation of building and infrastructure. Third, to help customer control energy consumption and design less carbon-intensive construction method. To lead the market for urban design and development from the individual housing unit to the neighborhood and smart city. Finally, to offer customers an enhanced personalized experience and scalable product that can adapt to changing needs. This strategy will strengthen the positioning of the Group in the construction activities as a developer, builder, and operator.
I now give the floor to the CEO of the three businesses, Philippe Bonnave, the Chairman and CEO of Bouygues Construction, François Bertière, Chairman and CEO of Bouygues Immobilier, Hervé Le Bouc, Chairman and CEO at Colas. They will start the morning presenting their own strategy. Philippe.
Thank you, Olivier. Good morning to everyone. On the picture, you can see the Morpheus in Macao, a hotel casino designed by Mrs. Zaha Hadid, which is Macao newest iconic landmark, a very complex venture with a remarkable exoskeleton architecture. This hotel is the place to be if you want to lose money in good conditions. I propose the following agenda to present our business lines and main strategies. First, who we are. We are present in more or less 80 countries, and we are active in three sectors of expertise. The first one, building. All kinds of buildings and technical installation, mechanical and electrical. You see some references, high-rise building in Miami, prisons in France, a speciality, hospitals, residential building, but also mechanical and electrical installations. Second sector is infrastructure on various topics.
Tunnels, for example, the Tuen Mun-Chek Lap Kok tunnel in Hong Kong, the widest tunnel ever built in the world, 50 meters below the sea. Bridges, all kinds of bridges. As example, an amazing bridge under construction in La Réunion. Nuclear plant. We are the only company in Europe with an EPR reference, and also one of the leader in fiber optical networks or in cable cars infrastructure, which is becoming more than a niche. Third sector, industry, with data centers or solar farms, as well as facility management in factories, thermal power plant or electric vehicle charging station. We cannot explain who we are without mentioning our people. As previously said, our main asset is our people, sharing the same values worldwide. The figures are those of 2017. We have now 53,000 employees. Our first priority is health and safety with the same standards worldwide.
Finally, we are a global construction group positioned on every step of the construction value chain. We can see the value chain. We have the necessary internal skill services to address each link from land management to deconstruction. Clearly, our strategy is to minimize the number of projects in construction only. We have a selected approach, and we aim to bid on EPC projects, for instance. The best example of our strategy is our willingness to do more project development that addresses the whole value chain. We'll come back on this later. All segments of the value chain are deeply transformed and reinforced by the means and tools offered by the digital era. Before the strategic priorities, I would like to share with you the supportive trends in our market. Building. An increasing importance of innovation due to digitalization.
In answer to the client's requirement, the construction processes are more and more industrialized. In infrastructure, the increasing urbanization leads to growing needs for large and highly technical underground infrastructure. The needs for high-speed optical fiber networks will remain strong worldwide. A new market for repair services is emerging with very strong prospects. In industry, the value of the Industry 4.0 is not in the building, but essentially in the client's industrial process. An increasing technicity of the processes, automation, robotics, will lead to increasing needs for maintenance services. In all our activities and market, digitalization become key for the optimization of project and production processes. Now, our strategic priorities. Taking these trends into account, we want to act as a global player in stable countries with a low risk profile, where we want to have a long established presence.
Developing exceptional projects, we call those one-shot projects, in countries where we are not established. This is the case with Chernobyl or Zagreb. We want to pursue the rebalancing of our activities towards energies and services. Concretely, the geographies where we have established presence over the long term currently include France, Switzerland, Hong Kong, Australia, the U.K., Canada, and after the recent acquisition, Germany and Italy. Our global priorities in these long-established geographies are to target value-added projects while taking a highly selective approach. In these countries, we especially aim to progressively deploy the full scope of our activities, strengthen our market shares through innovative offers. Our development strategy also includes targeted external growth to strengthen or complement our long-term geographical presence. With regard to this, two major acquisitions have been completed in 2018.
The acquisition of AES, including the Swiss-based Alpiq InTec and the German Kraftanlagen, giving us a position of clear leader in the Swiss energy services market, and access to the promising German and Italian markets. The acquisition, the second one, of the Australian family group, AW Edwards, opening the Australian building market. We develop exceptional projects with local partners in our domain of expertise in countries where we are not established. We can rely on strong and well-acknowledged capabilities in large projects with exceptionally high complexity in different eras. We address these projects with local partners. This is the case in Miami, the Philippines, Egypt, Japan, and so on. In doing so, we mitigate the risks. Third priority is to pursue the rebalancing of our activities towards energies and services. You can see the figures. This means work in progress.
More precisely, our position and scope of activities in energies and services. Our position. We are a global leader in energies, digital, and industrial transformation, with an established presence in France, Switzerland, Canada, the U.K., Germany, Italy, Hong Kong, and Romania. We are in the top five European players and with export capabilities worldwide. Our scope of activities, we design, install, operate, maintain, decommission a large range of infrastructure and facilities. We provide a large scope of related services from early stage concept engineering studies to mechanical and electrical, IT, civil works, automation, technical maintenance, and in various environments, energies, infrastructure, buildings, industry, and telecom.
Energies and services is a key development era, a market with a strong growth in smart cities, in smart buildings, smart grid, smart industry, expanding our portfolio of solutions and increasing importance of energies and services in the global construction projects, maintenance and operating services, for instance. The difference, I think, capability to offer global and integrated solutions answering to the most complex needs, and hopefully contributing to higher profitability, more recurring and more profitable business development of services and solutions with high added value. All good reasons to pursue the rebalancing of our activities towards energies and services. Back to our strategy on building. We aim to further expand our project development activities, covering the widest range in the value chain, from land management, financial engineering, use analysis, eco-design, down to user services in some cases.
Linkcity is a new umbrella brand name for Bouygues Construction's projects development subsidiaries. The share of development in our building revenues has already reached 26% in 2017. We promote this approach in all countries where we are present. We aim to industrialize all aspects of our building activities. The key words are lean management processes and industrialization. Now focus on infrastructure. We intend to be a reference player in the major infrastructure market, bridges, tunnel repairs, and in the power network in France and worldwide. In the tunnel construction market, we aim to stay a major player worldwide in the underground infrastructure works, a well-oriented market in the context of a continually growing urbanization. We are innovation. We develop and implement the ideas, solution, and tools of tomorrow, leading to higher productivity, robotics, navigation, and driving similar tools, faster execution, and predictive capabilities.
In the infrastructure repair market, the segments offer strong growth prospects with a large number of aging infrastructures. We are present in the concession and PPP market. This activity offers an exceptionally wide combination of position in the construction value chain. We have developed a strong expertise in this type of project, generating high returns on investment. Industry. We aim to enhance skills and level of expertise in the industrial processes and maintenance, and develop cutting-edge skills in specific expertise such as robotics, automation, and control, smart buildings, and Internet. We also intend to develop strategic partnership with major technical players in the industrial market. For example, our two-year partnership signed with the Bosch Group to position Bouygues Construction as a strong player in the Industry 4.0. We pursue our development in power generation projects. To conclude, a short look on our prospect of a new digital era.
We digitalize our offers to aim to be the leading player in the design and operation of smart city, capitalizing on the emblematic Dijon project launched recently to develop innovative solution in the smart connecting buildings area. We digitalize our organization. We develop a digital culture in every aspect of our activities, client relationship, productivity, execution processes, way of working. Digitalize our operations through BIM technology, digital project management platform with Dassault Systèmes, a very ambitious project. We develop our open innovation and data management culture in all levels of our organization. This is, for us, more than an evolution. As a final conclusion, I propose you our so-called institutional film, I thank you for your attention.
Good morning, ladies and gentlemen. I'm François Bertière, the Chairman and CEO of Bouygues Immobilier. Let me explain to you the strategy and markets of Bouygues Immobilier. Bouygues Immobilier, créateur de mieux vivre. That's our brand baseline. We create a better life. Who are we? We are a leading French property developer in residential, commercial, and sustainable neighborhood. We are in constant development since 1956. Unique know-how in sustainable property development and diversification in new businesses to suit new customers, users. Our key figures, the 2017 figures. Revenue, EUR 2.7 billion. Reservation, EUR 3.1 billion. Housing units reserved, more than 15,000. Nextdoor site. Nextdoor is our co-working sites. 11 have been opened. Green Office, which are our positive energy office buildings, 12 are already delivered or under construction. UrbanEra. UrbanEra is our brand to develop green neighborhoods.
We have more than 1 million sq m under development now. Bouygues Immobilier operates on the entire real estate value chain, from building to neighborhood. At the beginning of our development in the 1950s, 1960s, and 1970s, we were a pure player in real estate development, going from usage analysis, design, marketing, and sales, and construction to deliver housing and office space. Some 15 years ago, we moved up on the value chain, to deal with urbanism and land management, because cities have no longer means, neither money nor expertise, to develop new neighborhoods they need, and they cannot do it themselves. Some five years ago, we moved down on the value chain, to deal with operation and management and user services, because our customers want not only products, but they want also services.
Now we are operating on the whole value chain of real estate. What are our strengths and assets? We have the products people and businesses want, the expertise to deliver them, and an approach to risk that guarantees our future. Why that? Extensive geographic coverage in France. We have 45 business units in France, on 39 sites. We are in all the major urban areas in France and in all the key mid-sized cities. Wide and diversified range of innovative products and services adapted to new usages. Residential, affordable, intermediate, and premium housing. For owner-occupiers, buy-to-let properties, student and senior citizen accommodation, single-family home, and co-living. Concerning commercial property products, turnkey buildings, Green Office, positive energy office buildings, ReGreen, office building rehabilitation, and Nextdoor, collaborative workspaces. Acknowledged expertise in sustainable neighborhoods. We have four eco-neighborhoods already delivered and 16 under development.
Finally, a robust business model that prioritizes risk management and guarantees a healthy financial structure. We have a land portfolio offering 2 to 3, 2.5 years visibility. The major parts of these lands are reserved as an option, so that in the case of a crisis or some problems, we can get out of the option. The purchase of the land is done only when achieve at least 30% of pre-sales. That's our rule. In fact, right now, it's 40%. Our strategy relies on five megatrends. It's already been said before. Demographic pressure. In France, demography is increasing, especially on the coasts and on the axis between Paris and the Mediterranean Sea.
Even in the places like the Northeast and the Center of France, where the demography is decreasing, the number of households is increasing because the size is smaller because of divorce and the fact that people live longer. Household is our market. One household is one unit. Urbanization and metropolitanization, that's a world phenomenon, which we have also in France. Collaborative economy. Energy transition. Energy transition is important for us because in France, 40% of the energy consumption and 25% of the GHG emission comes from construction businesses. There is a strong demand, from regulators and from our customers for green buildings. Of course, digital transformation. Based on these trends, we have three strategic priorities. First, leader in customer experience, we are focused on users. Second, shift from single buildings to neighborhoods.
Third, digital transformation. Let's begin by the strategic priorities in residential. Today, we are leader because of our technical strength. Tomorrow, we want to build on that leadership by magnifying our customer experience. How do we look at that? Development in large French cities to improve market share gradually, notably with accelerating in Métropole du Grand Paris area. Propose differentiated and innovative offers to suit new usages. For example, we're the first developer to propose 100% connected and intelligent homes with our device, Flexom. You can see it in the demonstration there. With the app, Entre Voisins, which means from neighbors to neighbor, and it's a collaborative app. Improve customer experience through digital and personalized approach. Develop data utilization to offer more value-added services to customers.
For example, we can manage and forecast energy consumption with a special tool in the apartment, and you also can see this a little later. Maintain, of course, a strict quality policy. The picture on the right is a development in Neuilly. Neuilly is a premium residential city in the west of Paris, between Paris and La Défense, and we are currently building more than 200 units on the bank of the Seine River. How is the residential market in France? In France, we have the great advantage of a residential market, which is structurally resilient for two major reasons. One is legal reasons, the second is a strong demand. Legal reasons first. Specific of the French residential market is a very fast scheme. It means that the sales are done before completion, and the clients, the customers, have staged payments according to the work progress.
It means that the square meter price in France is very resilient. Lending policies from the bank. Loans are granted according the ability of the household to repay its obligations, and not only on the value of the asset. The majority of the loans are fixed rate loans during all their duration. History, the loan duration is very high in France. I think it's now between 19 and 20 years fixed rate. You see on the chart, on the right, the trend in average housing price between 2007 and 2017. The orange line is France, green is Spain, and blue is U.K. Based on, say, the index 100 in 2007, you see that even the big crisis of 2007, 2008, the prices have not diminished in France. They are still growing at a lower pace, but they are still growing.
When you see U.K., there was a small drop, then they have reached the same level as we do in France, 10 years later. The story is not exactly the same when you see the curve. I can tell you, it's not the same story for the developers. When you see the green line, you see that in Spain, there was a collapse in the prices, and they have not yet recovered their previous level. The demand. The demand, we have a long-term growth potential. Strong demand related to demographic pressure and change in users' usage patterns. Consistent structural lack of supply. The market develops around major metropolitan areas where we operate, and obsolescence of the housing stock. This is a very resilient market. What are the trends, the short-term drivers?
We expect the market to perform well in the key cities where we operate for the next two to three years. Short-term drivers are the following: interest rates remain at a low level, zero interest loan program, and Pinel tax incentive have been confirmed by our president until 2021 in dense areas. Loi ELAN, which is a new law, which has just been voted, and I think it will be passed in the next weeks, is a very important law. It will support residential with development. Major urban developments are related to Grand Paris, to the Olympic Games, and on the ongoing expansion of regional key cities. On the chart, you can see the evolution of the French residential market, in 15 years.
You see that we expect the market to be around 125,000 units this year and to stabilize at a high level around 120,000 units per year in the next years. This level is rather high, when compared to the historic level. Let's go now to our strategic priorities in commercial. Today, we are leaders in green building. Our major strength is that we can offer these buildings while optimizing risk and profitability. Our strategies are to remain leader in Green Office positive energy buildings, to develop real green activity, office building renovation in obsolete tertiary market because the city is rebuilding itself in the same place. The last point, which is very important, is to balance the portfolio of projects between turnkey, presold operations, and speculative developments. Turnkey is lower risk but lower profitability. Presold operation, mid risk, middle profitability.
Of course, speculative development have higher risk but higher profitability. That permanently, we balance our activity between these three ways of doing our job, in order to optimize risk and to mitigate risk, to optimize our profitability, and also to optimize the working capital requirements. How is the market in commercial developments? We operate in market with strong fundamentals, which is in an upward cycle. In the Paris region, we have the largest commercial market in Europe, 54 million sq m stock, in the Grand Paris area, supported by major urban development related to Grand Paris and attractiveness of Paris following Brexit. For example, the bank HSBC has announced, and I think has begun, to move 1,000 people from London to Paris La Défense. From the chart on the right, on the upright, you have the vacancy rate and the market offer in greater Paris area.
You see that, in the beginning of 2018, the vacancy rate is under 5% in the Paris area, which means it's a very constricted supply. You see that the take-up office in the Paris region, at the chart of the bottom, was at 2.6 million sq m in 2017. It was a record, and we have already broken this record for the six first months of 2018 compared to the same period last year. Obsolescence of commercial real estate in Grand Paris around. The stock is very important, but you must understand that it's very important to understand that more than 80% of the stock is below international standard and needing in the standards. It needs renovation, and it's a very big, large opportunity for us.
Last of it, new customer expectation, cost optimization, pay-per- use, new working patterns, digitalization, nomadization, connectivity, wellbeing at work, and collaborative economy, utilization of usages, services to individuals. Those services can be open to the neighborhoods. Last of our 3 strategic axes, digital transformation and new businesses. We recognize a threat in digital, we also see major opportunities in terms of profitability and new businesses. I shall not develop in detail all these points. They will be presented and explained in the next speech. Customer experience, virtual reality, CRM, Flexom, the device to manage the housing units with a mobile phone, Entre Voisins, application which is from neighbor to neighbor. Building Information Modeling, marketplaces. We own a marketplace which is named Valorissimo, which is a market shop and housing units for buy to let.
We are developing a co-design platform to create a housing program with future buyers, and use as future buyers. New businesses. We have developed new businesses based on digital transformation. Nextdoor, collaborative workplaces, co-living for young people and students. Les Jardins d'Arcadie is our brand for senior citizens, and Cellnix/Abeltis, which are two companies to manage energy, either in office space or in neighborhoods. In summary, Bouygues Immobilier is well-positioned, going forward throughout the value chain on resilient and growing markets with a strong brand and capacity to innovate. Thank you. I leave the floor to Hervé Le Bouc, who is Chairman of Colas.
You are supposed to have a video, no? No? Good morning, ladies and gentlemen. The story of Colas began in the late '20s with invention of Cold Asphalt, an innovative pavement technique using bitumen emulsion. It gave us our name, Colas, a short for Cold Asphalt. Innovation is at the heart of Colas, is in our DNA. 90 years later, Colas is now a world leader in transport infrastructure in more than 50 countries with some 800 business units. Colas works on roads, highway, airport, railways, bus lanes, parking spaces, and more. We are also a major player in building materials and a world leader in the production of aggregates, which is essential for our businesses as well as bitumen. Our bitumen business has grown significantly during the recent years, particularly in Asia, Australia, and more recent in Canada with the acquisition of McAsphalt.
In the coming years, we have set a broader ambition, a new mission, promoting solutions for sustainable mobility. Promoting, because as a leader, our job is to pave the way to progress, to undertake, to dare, to invent. Mobility solutions, because in a world where mobility needs are constantly growing, we use our expertise and capacity for innovation to optimize mobility. Colas' range of solutions include engineering, financing, construction, maintenance, and services, and tomorrow, even more with data. For sustainable mobility, that is a big challenge today. The challenge today is to invent new forms of mobility that take into account the stakeholders' expectations for customers, users, employees, or public authorities. Colas is fully committed to this and will explore every path leading to tomorrow's sustainable mobility. Overall, the markets in which Colas operates are doing well.
Around the world, needs are very high for construction and especially in transport infrastructure maintenance. That is due to population growth and increased trade in a globalized economy. It is also the consequence of growing urbanizations, with an increased demand for public transport. The bridge collapse in Genoa in August showed that it is very hard for many developed countries to maintain existing networks. These countries are beginning to find special funding. Two concrete examples to illustrate this. First, in France, the Minister of Transport recently confirmed an increase in spending in maintenance. In the U.S., many states are creating new tax funds to fund road maintenance. Other fundamental trends should have a positive impact on medium and long-term businesses. First, stricter environmental requirements are a constraint for our industrial activities, I mean aggregates and bitumen.
These constraints are even tougher for potential newcomers in the industry. Second, the transition to a service economy gives new opportunities to expand our offering far beyond our traditional line of business. Last, the digital transformation will allow us to gain in efficiency and to invent new business. Now I'd like to talk about our strategy, which can be summed up in four points. First, promoting our industrial activities. Second, expanding our range of services. Third, continuing targeted development around the world. Fourth, accelerating our digital transformation. As I said before, Colas was built on bitumen, one of the two ingredients to make road. The other ingredient is aggregates from quarries or gravel pit. Since the '70s, Colas has expanded its quarry network to secure supplies and strengthen strategic position locally. Bitumen and quarries are today two essential segments for Colas.
Colas continues to expand. Over the past two year, we have reinforced our quarry network in Denmark, in France, in the U.S., and in Canada. For bitumen, we reach a major milestones in 2018 with the acquisition of McAsphalt, the leader in bitumen distribution across Canada. McAsphalt complements our already strong positions in this segment, including Southeast Asia and Australia. Our second strategic axis is expanding our offering to meet customer demands for complex and large project. The creation of Colas Projects in 2016 focuses resources and expertise for the benefit of our customer. Colas Projects also gives us the opportunity to capitalize on our experience, attract and train talent, and ultimately improve how we manage risk. For example, Colas Projects helped recently to secure the phase three project for the tramway of Liège in Belgium. We are also working to expand our offering by continuing to innovate.
Our research campus near Paris is a unique center dedicated to research on road techniques. Innovating also means anticipating the future with smart roads equipped to make them safer, more proactive, and sustainable. Digital technologies have made all this possible. Our services to improve mobility are now grouped under the name of Mobility by Colas. Our third strategic axis is not new. It is international growth. Today, we make about half of our revenue outside of France, mainly in low-risk countries, Europe, North America, and Australia. Over the last 30 years, Colas has grown by 50% through organic growth and 50% by external growth. As a result, Colas has demonstrated it can integrate companies of all sizes in the core businesses, roads, railway, and materials. In 2018, Colas made two major acquisitions. First, Miller McAsphalt in Canada.
I spoke already about McAsphalt, Miller completes the country network at Colas Canada with a strong foothold in Ontario. Second, with reconstruction, the acquisition of Alpiq Engineering Services. This acquisition completed last July, reinforces Colas Rail experience in catenary systems, strengthens its presence in Czech Republic and in U.K., and provides a new position in Switzerland and Italy. Colas will pursue this external growth strategy. There are many opportunities all over the world because markets are often still fragmented and held by local businesses. Digital transformation is also an important focus of our strategy. In appearance, our businesses are less likely to be upset or Uberized by digital transformation. In appearance only. In fact, more rustic activities such as quarries or asphalt production can also be improved by digital technology. Digital technology is also now part of our construction project.
BIM, a short for Building Information Modeling, is being used on complex project, we just won a Golden BIM Award for major deconstruction and deposition project. It will be presented later this morning by Maude Grison. Finally, digital technologies provides perspectives of new activities, new lines of business. Digital technology will also play an increasing important role in our organization. We are historically a multi-local group made up of profit center with strong decision-making autonomy. That is to best serve our client. Now with the rise of digital technology, it will allow us to put this profit center in a network, share experience, know-how, expertise, and data. To conclude, you have seen our outlook at Colas is positive. We operate in well-oriented markets, we have all the resources, all the assets available locally to take advantage of this favorable environment.
It will be illustrated by Louis Gabanna and Thierry Méline, to whom I give the floor. Thank you for attention.
Good morning. My name is Louis Gabanna. I'm the Executive Vice President for Colas in North America. Today, Thierry and myself will present you the value of Colas industrial assets. Let us start with bitumen products. The historical longstanding model at Colas is based on vertical integration between material and construction. The material business is key to the construction segment, conversely, the material activity is supported by the need of construction segment. This model offers a number of advantages to allow it to increase profitability compared to an activity focused solely on construction. First, it allows us to secure supply and guarantee the quality of material used on our sites. Industrial assets are also key to keeping our businesses competitive. As an example, transporting aggregates over a long distance is not economically viable. The price of a material is multiplied by two after only 25 kilometers of road transportation.
As for bitumen, the shorter the experience this summer in the French market reflects the importance of having storage and distribution capacity, being the essential ingredient in asphalt mix. Finally, vertical integration provides the resilience that stabilizes the margin of construction activity. As Mr. Hervé Le Bouc told you, the Colas Group was founded in 1929 to operate a patent using bitumen for road surfacing. Cold Asphalt, a bitumen-based product, gradually replaced coal tar. Subsequently, Colas has continued to design new bituminous products adapted to specific conditions and various uses. Bitumen, emulsion, binders, modified bitumen, asphalt mixes of all kinds, resistant to very high and very low temperatures, noise-reducing mixes, porous mixes, skid-resistant mixes, colored mixes, sparkling mixes, and more. Colas has more than 100 patents filed in France and around the world.
Colas' leadership in bituminous products is backed by its Campus for Science and Technique near Paris, a premier research center with an international reputation in bitumen-based road techniques. The campus boasts a staff of more than 130 experts who work in liaison with teams from laboratories from Colas subsidiaries around the world. Their focus on Colas expertise in bitumen capitalized over the last 90 years, often in partnership with many important players, including engineering schools, transport administrations, industrialists, and scientists. Over the years, Colas has secured its supply and production of bitumen by building a network of storage depots and emulsion plants in most of the areas where the group operates. Colas is also a shareholder in a Thai company, Tipco Asphalt, which operates a refinery with a capacity of 1.2 million tons of bitumen asphalt per year. The site is on Kemaman in Malaysia.
Tipco markets bituminous products throughout Southeast Asia. In total, the Colas Group buys and produces annually more than 5 million metric tons of bitumen, equivalent to 5% of the world market. By way of comparison, the largest producer of bitumen, Sinopec in China, produces 8 million tons a year, and Shell worldwide production is 5.6 million tons of bitumen. Colas has the benefit of very large and vast logistical network. We have 73 bitumen terminals, including 28 at McAsphalt in Canada, 10 bitumen vessels in Asia with capacity ranging from 1,500 tons to 10,000 tons, two large river barges in Canada with a capacity of 11,000 tons each, and 200 rail cars in North America. Undeniably, Colas is a global leader in bitumen. Colas has grown this business and expanded its logistical resources network primarily to serve its own needs and secure supplies.
In some areas, binders and emulsion are a separate business segment parallel to more traditional construction activity. In these regions, more sales are made to third party than to the Colas business units. In Southeast Asia, Tipco sells 1.6 million tons of bituminous products per year to third-party customers. Also the case in Australia with SAMI, where 200,000 tons of product are sold outside the group. Lastly, McAsphalt, a company just acquired by Colas Canada earlier in 2018, had third-party sales of over 700,000 tons in 2017 in Canada. Now, let me tell you a little bit more about this acquisition. McAsphalt Industries was founded in 1970 by two gentlemen, Leo McArthur and John Carrick. They were former Esso engineers, known as Exxon in the rest of the world, and they have developed this Canadian diversified company committed to development, production, distribution, and marketing of bituminous products.
Since its inception, McAsphalt has grown through a combination of strategic acquisition, new facilities construction, and formation of ventures with key industries in the construction business with transportation and energy sectors. In addition, McAsphalt in-house engineering service support every operational division, from initial product formulation to providing plant quality control and quality assurance. In keeping with the change of the bitumen industry, McAsphalt operation team is constantly upgrading bitumen terminal with the latest state-of-the-art equipment and technology to ensure the customer's requirements are met. Recognized as the industry leader, McAsphalt offer the widest range of bituminous product from 28 strategically located terminal, coast to coast across Canada, and it's a big country, I tell you. If you have to cross it every week, you understand it's a very big country. Today, McAsphalt is the largest producer of emulsions in Canada and the only emulsion marketer coast to coast.
McAsphalt unique ability to receive, by trucks, rail, and marine, allows for the sourcing of raw material throughout North America at a significant competitive advantage. Skill and experienced personnel ensure that McAsphalt product are delivered safely and on time. In addition, McAsphalt Marine Division specializes in the transportation of petroleum asphalt on the Great Lakes, the St. Lawrence Seaway, and the East Coast waterways. McAsphalt acquisition by Colas was just closed this February. Rapidly, we had to make a decision regarding the future of Colas Canada existing bitumen activity, operating through Canada as the Colasphalt brand, alongside McAsphalt, which was much bigger than Colasphalt. Today, where do we stand in term of integration of those two companies? Well, the first decision was to choose the brand that could best represent our new larger company to our customers. Therefore, everything was branded McAsphalt as of May 1st, 2018.
Therefore, all of Colas Canada bitumen asset and people are now part of McAsphalt. Today, Colasphalt is fully integrated in McAsphalt, and people coming from both original teams are delivering synergies. Thierry Méline will now present you the value of aggregate resources at Colas, and I want to thank you for your interest.
Good morning, everyone. My name is Thierry Méline, and I'm the Executive Vice President for France and Railways. Thank you, Louis, and after bitumen, let's talk about quarries. We have quarries around the world and as close as possible to our construction businesses. In 2017, we had about 750 quarries. Today, with Miller's network in Canada, we now have more than 950 sites worldwide. Aggregate production, sorry, has doubled in the last 20 years, illustrating our vertical integration strategy. In 2017, aggregate production amounted to 100 million tons, making Colas the second-largest quarry operator in France and among the top 10 in the global market. This equates to revenue of about 1 billion EUR. Colas does not always own the land. Some deposits are leased and operated in the form of mineral right contracts. Finally, Colas does not always own 100% of the capital of its quarry companies.
Partnering with other companies, especially for some of the larger quarries, helps spread out our investments and increase business opportunities. Recently, Colas has continued to grow its quarry business through acquisitions you see on the slides in France, North America, and Middle East. These acquisitions come after long-term relationship are established with shareholders and managers of the companies we acquired. Colas still has a high external growth potential in a market very fragmented. Needs for aggregates are high in the infrastructure market. Aggregates are the second most consumed resource in the world after water. In this context, controlling its supplies of aggregates is a fundamental issue for Colas in order to secure the supply of quality materials to its projects, supply industries, asphalt plants, ready-mix concrete plants, and generate business and profit through industrial activity. Dedicated operational teams manage quarries in line with the subsidiaries and areas.
They are in charge of land control by making sure that the reserves are more reliable, by analyzing possible extensions, by knowing the legal framework, and by ensuring acceptance of production sites. Teams also help obtain and maintain operating permits. Procedures are now more time-consuming and more complex, lasting between 3 and 5 years. They also help keep the permit up to date and ensure compliance with operating conditions. For example, in terms of dust, noise, and production schedules. Controlling these issues gives Colas a true competitive edge. Quarry assets are diversified both in terms of the nature of the deposits and the type of operation. Massive rocks, such as limestone, come from quarries. Soft rocks come from gravel pits. The market of these products is very widespread, from industrial activities to ready-mix and prefab concrete for building, public works, roadworks, and railways.
Colas' quarry assets are very long-term assets because, as you can see on the slide, Colas has 2.9 billion tons of authorized reserves or 30 years of production. Authorized reserves are calculated by multiplying the annual tonnages by the number of years remaining in the permit. To this, one can add 1.9 billion tons of potential reserves, which correspond to existing tonnage on controlled land with good probability of permit renewal. In your models, do you take the value of these assets into account? Colas' quarry strategy aims to optimize the value of its assets. In line with its vertical integration policy and recent acquisitions, Colas will continue to grow its quarry activities in a targeted manner consistent with the needs of its construction activities, particularly in places where the group does not currently have quarries. Partnerships can be formed to pool investments, especially on large sites.
At the same time, consolidating resources helps optimize quarry management in areas with a large number of sites. Internal sales helps reduce purchase of aggregates outside the group. Externally, market studies around our quarries allow us to create offers adapted to customer needs. For example, in most of our locations, we develop dedicated businesses to sell materials to building and public works professionals, even private individuals. We also have a more targeted price policy based on the type of materials, the type of customers, and the season. Lastly, the group's operational excellence drive aims for constant progress in cutting production costs and optimizing investments. They use production data and Industry 4.0 tools as well. Colas is part of a circular economy, which aims to develop the recycling of materials. Calculating the life cycle and carbon footprint helps measure the impact of activities at a local level.
Colas operates under the name PREMIS in the deconstruction sector. Deconstruction activity ranges from the stripping of a building, when we remove everything but the structure, to full dismantling, including asbestos. Some 600 people work at PREMIS and perform 800 projects each year. In 2017, recycling at Colas represents a volume of 9 million tons of materials, which means that we saved the production of dozen of quarries. For example, Colas Île-de-France Normandie is positioned as a leading player in the circular economy to meet the challenges of construction sites in Le Grand Paris. It works on excavation and construction site and has a network of recycling platforms, professional waste disposal facilities, storage facilities for inert waste. In 2017, Colas Île-de-France Normandie recycled nearly 1.5 million tons of materials, including 200,000 tons of railways ballast.
As part of its social and environmental responsibility policy, Colas gives great importance to societal acceptability of its production sites. Each unit maintains a strong local foothold through regular communication with residents, administrations, schools, and the social sector. Colas also implements measures to preserve and develop biodiversity through targeted programs, such as facilitating the living condition of remarkable animal and plant species on site, installing beehives in more than 50 sites. More than 70 protected species now live on the group's extraction sites. As a conclusion to these presentations, I would like to restate a few key ideas. Backed by vertical integration, today, Colas is a world-class player in aggregates and bitumen products. These activities are essential to our core business, but they also have their own logic and dynamic. They contribute to the operating margin alongside the margin generated by our contracting activity.
Despite the fact that they are more capital intensive than our traditional roadwork business, they provide Colas with an additional lever to improve operational and financial performance in the future. In other words, Colas can deliver a good mix between operational margin and return on capital, thanks to an optimized balance between industrial activities and contracting. Let's take a trip around the world and see some Colas quarries in a short film. Thank you. Thank you. This is the end of the first part of the day. This is time for a Q&A session for a few minutes with Louis and Thierry. Who is the first one? There is a candidate.
Thank you, Nawal Kristini, JP Morgan. I have two questions on Bouygues Construction, please. The first one is on energy and services. Clearly, one priority for the business is to increase and rebalance the revenues toward more energy and services. Could you tell us a little bit more about the margin profile of this business? Importantly, in the long run, how should we think about the margins at Bouygues Construction, given the increased mix on the energy side? My second question is about Africa. Africa ticks a number of boxes on the mega trends that you presented. Growing population, increased urbanization, and also the climate change. There's an opportunity on power generation through solar farms, for instance. At the same time, the risk profile of Africa is different from the different-
You've got the answer
businesses. I was just interested to understand, you talked about selective approach in Africa, just to understand a little bit how you pick and choose the different projects and how basically you're thinking about seizing the growth opportunity in Africa. Thank you.
To start with the second answer, and Philippe takes the first one. For the second answer, definitely, and you answered partially during your question, the risk profile in Africa is not the same as the main country we present when we present Europe, Australia, Asia and North America. The risk in the country lead us to have a very contract by country strategy. Clearly speaking, we answer to private customer. For private customer, we do a few things. There is few country where we are acting, Ivory Coast, Morocco, but it's much more private customer and only very small number of countries that we answer to the RFP.
Just to add, in fact, the approach in Africa is totally based on a project by project basis. We look project by project if the environment is okay in term of legal, contractual, safety. Then we decide to follow the tender or not, but always on a case-by-case basis, which is absolutely not the case for all the mature countries for which we have a general positive view of the country, legal environment, contractual environment, tax environment, and we are able to install a long-term presence. Regarding your question on energy and services, as Philippe Bonnave said, we consider that we have two advantages to grow in energy and services. The first one is to complete and to expand our offers.
You have seen that for, and you will see in the second part of the presentation that for smart cities, for eco-neighborhoods, we need this expertise in terms of energy and services. So it's good for the development of our various offers. The second reason, obviously, and you said that, is the fact that clearly the margin in this business is better than the average margin in the building and civil works. It is the reason why we want to develop this business. In fact, in energy and services, you are more between 3.5%-5% on a regular basis, compared to a sustainable level at 3.5% in construction. If we are in the position to reach that, we are more between 3%-5%.
In fact, the mix to increase energy will increase the average margin on building and civil works to 3.5%-5% in energy and services.
Thank you.
Okay. Thank you. Jakob Bluestone from Credit Suisse. If I can ask two questions, please. Firstly, just staying on the margin, you showed right at the beginning that your construction activities overall used to be a 5% margin business. I think it was 2005, and these days it's more like 3.5%. You described in the presentation a number of things which should improve the mix and hence the margin, like energy and services that you were just talking about for the previous question. Where do you think margins can get longer term for these activities overall? Do you think you can get back to this being a 5% margin business? If not, why not?
Secondly, if I can maybe just ask on the real estate business, I think you said you expected a sort of slowdown in the market from 125,000 units in 2018 to sort of 120 for 2019 and 2020. Can you maybe just talk through why do you expect a slowdown in the market? I appreciate it's at a high level, but just maybe if you can sort of clarify your thinking on I mmobilier.
To answer the first one, when we have several discussion about this margin level, we remind you that we consider that the sustainable level of margin, and we consider that on the sustainable basis, we consider that for the Bouygues Construction business is something which is around 3.5%. For the Colas one, the normative margin is 4%. For the real estate Bouygues Immobilier one, it's 8%. We consider this is sustainable. It means that sometimes it could be beyond this, as you could saw on the slide. On a regular basis, we consider that this is our normative level. François? For the second part of the same question.
Concerning the real estate market, the fact is the figures remain quite high. That's true that there is slight slowdown now in France. The slowdown is concentrated on the small cities and the places where the demography is decreasing. In fact, we're active mainly and almost totally in the Great Paris Area, in major cities in France. When you see the figures, the individual houses are decreasing very sharply, the collective housing dwellings are not decreasing so much, and not in the big cities. We're active in apartment dwellings and in the big cities. We are quite confident on our share in the market because of that.
Thank you. Just to remind you that we wanted to focus on this very specific asset with bitumen and quarries. Maybe it was very clear during presentation, you don't have any more question. Please take this opportunity to talk to them. They are really expert in this area. Usually in August or February, where I don't have such level of skill to answer those question. This is something very interesting to better understand what is the asset of Colas and the value of Colas.
Hi, Nicolas de Gondeville from HSBC. Sorry, it's not going to be specifically to Colas, but maybe you can have a view on this. You mentioned a few times PPP in your presentations. I was wondering if you can give us more color on the PPP trends in the different regions and across businesses, what is the proportion of the business currently under PPP? A more general question about how do you see the Chinese and Indian market? Thank you.
To answer to the second first, Eric answer the first one. First, the Indian market, we had a trial a year ago, 2 years ago.
With Bouygues Construction, the global environment for the contractual aspect is not something we clearly understood. This is the market we didn't stay in. Finally, we didn't finish the contract we were working on. We prefer to close operations over there. In Chinese, there is a specific area, which is Hong Kong. As you know, there is two system, one country. In Hong Kong, we operate. For the rest of the country, we are not operating at all because it's not really possible when you are a foreign operator in a such country. Eric?
Yes. On the PPP, I don't know if your question is about Colas PPP or Bouygues Construction. For Colas, yes, of course, Colas is answering on PPP projects mainly in France. We are also looking at a very important PPP in Canada right now. Mixing roads and railways. We are entering through Colas Canada, Colas Projects, and Colas Rail. It's mainly in the region of Ontario, Toronto and Ottawa. Yes, of course, we have also won recently a PPP in Liège for a tram. Yes, of course, we are looking at projects that can fit with Colas' skills in building, maintenance, and financing.
Before Louis could give you some detail about Canada, just we, in the presentation with Hervé, we show you that we created Colas Projects two years ago. The idea of this division was to be able to answer better on the PPP project because it was another way for us to work. Initially we were working on very small projects, according to the size of the branch office that we have on the territory. We create this organization to be able to have a large view on this project and be able to answer it. Louis, maybe more detail about what you've done in Ontario.
This is a unique opportunity right now because the PPP in Ontario are rail-related. At Colas, we're able to put together what we call a winning team. We have Colas Projects, who has got experience in PPPs, putting it together and managing it. We have Colas Rail, who's got rail experience in building maintenance, and we have Colas Canada, who's a civil construction company with ballast and ability to construct either the rail beds or the stations. By teaming three division of Colas, we think we have a winning team in both performing the work and maintaining the rail or the tram service for the years to come in that PPP.
Generally speaking, the PPP have two advantages. The first one is the fact that for the local authority decision-makers or the governmental decision maker, he's sure that the final price is known. There is a lump sum price for the construction. That the first advantage compared to another type of development. The second advantage is clearly the fact that the maintenance will be done during the life of the PPP, which is very important. Especially after the Genoa problem and drama, we are pretty sure that definitely, local decision-makers will take into account the fact that through PPP, even the PPP reduce their budget flexibility, obviously. On the other hand, they are sure that the maintenance will be done in the future for 10 years, 20 years, 50 years.
Clearly, we consider that even if there is some criticism around PPPs, mainly because of this lack of flexibility for the decision-makers, we are pretty sure that PPPs will remain a possible scheme and probably a preferred scheme for infrastructure which need obviously maintenance after. Unfortunately, this Italian drama is the proof of the fact that infrastructure means maintenance. We consider that we will have opportunity in Colas or in Bouygues Construction to continue to develop PPP despite the financing problem, which is at the end of the day, the financing aspect of the PPP is clearly the third and the less important aspect. The more important aspect are clearly the lump sum of the construction budget and the fact that maintenance will be realized.
Hello, Josep Pujal from Kepler Cheuvreux. I had two questions, please. Could you tell us the level of margins that you do in the aggregates business? The sales to third parties, this 70%. Also, I would like to understand bitumen. You also have an activity of sale to third parties. What percentage of the total, I would say, production of bitumen that represents, and also the level of margins of these third-party sales? A second question is on energies. Now with the acquisition of Alpiq, this starts to be a, I would say, a big activity. Several of your competitors have a separate division. Would it now make sense for you to treat it as a separate division or not, and in both cases, why?
My last question is for those three activities that you presented today, about the expansion plans you have for them, if they are very ambitious or not. For example, if you receive the EUR 1 billion dividend from Alstom, is there part of this, I would say, inflow that would go to those three activities, and how much? Thank you.
There is several of them. Eric, you start.
Yes, Josep, on your first question about margin, we don't communicate on the very specific margins of quarries and bitumen activities. I know it's a bit frustrating, generally it's better than construction or maintenance activity, but more capital intensive than our contracting activity. That's what Thierry explained. As regards sales to third parties, for quarries, it's 70% of our sales made with third parties. For bitumen, where we do this activity, like in Australia, in Southeast Asia or in Canada, we sell mainly to third parties. For example, Miller in Canada accounts for less than 20% of McAsphalt bitumen sales. It's not marginal, but McAsphalt sells mainly to other road companies or other roof-proofing industries. In Australia, Southeast Asia and Canada, the bitumen sales are mainly towards third parties. You want to add something?
Very simply, it all depends on the market you're in. Some markets we don't sell at all to third party, we just sell supplied. There's other markets where we sell 70% or 80% of our total tonnage to third party.
As an aggregate?
As an aggregate, it would probably be, if I mix Southeast Asia, Australia and North America, it'd probably be over 50% to third party.
Okay. About your question about the organization for energy and services, we don't intend to separate the energy and services division. When Philippe Bonnave present his activity, he told you that it was a way for him, of course, to increase the operating profit because it's a better activity for this. This is also for us a way to better understand and better answer to the customer need, and for this reason, we consider that it could be located in the Bouygues Construction area now. The last one?
Regarding investment, we remain with the same general idea. External growth will be totally focused on for Bouygues Construction energy and services and for Colas external growth to expand the network, mainly in aggregates, bitumen or asphalt plants and in the country in which Colas has already a network. We are able to spend according the opportunity, the amount we are able to spend. You know that we have bought McAsphalt for around CAD 1 billion, so we are able to put a large amount of money on the table. It depends on the return because you know that our financial guidance is always at the group level to remain in investment-grade situation. Obviously, we are able to pay huge amount of money if we have the good return to meet with investment-grade rating requirement. It depends on opportunity.
For Colas, it is very clear. We start with very small carrier, a couple of million EUR up to McAsphalt, EUR 1 billion. It is only dependent from the opportunities. We are totally open to seize any type of opportunities. Obviously,
Part of the dividend coming from Alstom, part of the cash flow generated by the construction activity will be used to finance this opportunity if the opportunity is on the table. I think this is the end of the first part. 20-minute break and take the opportunity to see the booth and the various technologies that we have installed to show to you. 20 minutes.
[Foreign language] Let us start again. We have lost few participants during the break. We are now beginning the second part of this investor day. As I told you during the introduction, we are the leader in the market for urban design and development of sustainable neighborhood. In smart city, for example, we have got already 35 eco-neighborhood already delivered or under development. As I told in the introduction, in property development, we are number 1 in France. Our sale are EUR 3.5 billion by adding what we will present now, Linkcity and Bouygues Immobilier. We have developed two complementarity approaches. One at Bouygues Immobilier called UrbanEra, and another one in Bouygues Construction called Linkcity. UrbanEra relies on Bouygues Immobilier's promoter know-how with the B2C approach. Linkcity builds its offer relying on its construction capability and its long-term relationship with local authority with B2B approach.
Linkcity's model bears no property market risk, whereas UrbanEra carries limited risk related to the land, in line with the cautious rule defined by the group. Both Linkcity and UrbanEra benefit from a buoyant market. Indeed, the context is positive due demographic pressure and growing urbanization, decrease in local authority budget that emphasize the need for them to cooperate with private sector, and incentives that fosters renewal of socially isolated neighborhood. Emmanuel Desmaizières and Pascal Minault will now present you UrbanEra and Linkcity. I take this opportunity to tell you that Pascal Minault, former CEO of Bouygues Entreprises France-Europe, will succeed François Bertière beginning of next year, as chairman and CEO of Bouygues Immobilier. After them, you will see François Pitti from Bouygues Construction will make a presentation on the smart city, and Frédéric Gardès will present you the smart mobility strategy at Colas.
This presentation will be followed by a Q&A session. Emmanuel.
Good morning. I'm Emmanuel Desmaizières, managing director of UrbanEra. I'm going to present to you this division of Bouygues Immobilier in charge of eco-neighborhood projects. UrbanEra provides a good example of the strategy of Bouygues Immobilier to shift the scale of its focus from buildings to neighborhoods, as said, François Bertière. First, I'm going to describe you. I'm going to describe you the concept on the duties of UrbanEra, and then I will talk about three concrete projects. UrbanEra's purpose is to design eco-neighborhoods in major French cities by developing urban projects which often exceed 100,000 sq m. These projects provide a variety of uses, including residential, commercial, and retail facilities. They are exemplary in terms of sustainable development due to their optimized energy performance, economical management of water or natural resources. They also have a strong focus on biodiversity.
They are designed to optimize mobility, services, and comfort for our customers. Since 2015, UrbanEra's activity has accumulated a total of nearly 1.2 million sq m of building rights. That represents an expected turnover of EUR 4.3 billion. For local authorities, we play the role of urban assembler, working directly with them. We can work either via a development concession from the local authority or in partnership with a public developer. In the latter case, the developer determines the necessary public facilities for the community, defining the neighborhood agenda on the project scale in conjunction with UrbanEra. UrbanEra then designs the project completely and sells the building rights to competitors, with the majority stake going to Bouygues Immobilier. UrbanEra also assists elected officials in public consultation by organizing events such as neighborhood meetings, where we can present and explain the project to local stakeholders.
UrbanEra has taken a strong position in neighborhood development at a moment when large cities are expected to see an increase in their need of urban renewal. Development will increasingly take place at the neighborhood level in response to customer expectations and city needs. UrbanEra's ambition is to bring our 3 businesses a volume of activity of approximately 250,000 sq m. This figure annually. These figures represent nearly 2,000 homes for the residential activity. This activity should unlock a strong level of profitability, benefiting from economies of scale achieved through the vast size of our projects and powerful market cycles on which we can base our launches. It's important to note that each project includes management conditions that enable us to minimize our debt.
To meet these expectations and differentiate ourselves from the competition, UrbanEra's approach consists of crafting specific, tailored positioning for each project, developed in response to local issues. For instance, we designed the Les Fabriques project in Marseille, built on the productive city concept. We included FabLab spaces where makers can carry out limited series production in shared workshops equipped with digital tools. Beyond the economic that generate, these spaces create an atmosphere, a state of mind that influences the whole neighborhood. UrbanEra is able to design tailored neighborhoods like this, thanks to our vast network of external partners. We can count on numerous digital startups, as well as leading industrial partners like Carrefour or EDF, to name a few. In addition, our urban projects are designed to provide an offer of services such as a neighborhood concierge service, a platform for connecting neighbors and special parking, and soft mobility solutions.
To further illustrate this presentation, I propose to address three concrete projects, each at a different phase of development, stage of development. Let's begin with an eco-neighborhood we finished in 2013, located in Issy-les-Moulineaux in Île-de-France. This project was designed and produced on the site of a former military fort, built in the middle of the 19th century to defend Paris. It now offers breathtaking views of the Eiffel Tower from nearly all of its 1,600 apartments. It is characterized by its ambitious design in terms of sustainable development, notably demonstrated by the geothermal heating system that meets 75% of the neighborhood's needs. Another sustainability highlight is the automatic waste collection network, which removes the need for garbage collection trucks. Residents love their neighborhood. 95% of people surveyed said they are proud to live there.
Another emblematic eco-neighborhood project by Bouygues Immobilier, the Ginkgo neighborhood in Bordeaux, began in 2010 with its final segment scheduled for completion in 2021. Spread across 32 hectares, it comprises 3,000 homes, about 50,000 sq m of retail and office space, and 20,000 sq m of public facilities, including two primary schools and one middle school. It includes also 4.5 hectares of park, three canals, and 12 km of bike and walking paths. A neighborhood concierge provides personal services, housekeeping, tutoring, babysitting, and serves as a post office relay. It's also a space where residents can come together for a snack or fun event like after-work or TV sports events. Around 80% of residents report in a survey that they felt satisfied or highly satisfied living in this neighborhood.
At last, the third project I want to describe began in February when we were chosen as the winner of an international competition launched by Métropole du Grand Paris. The project is to develop a 12-hectare site on one of the most central gateway sectors in Paris. This project is part of the massive development of Eastern Paris. As you are going to see in the video that follows, we based our proposal on three pillars. Firstly, urban continuity with high quality environment, thanks to green bridges. Secondly, a strong identity for the whole neighborhood based on the video game industry. Finally, nature in the city. This project is expected to earn revenue of EUR 2.2 billion. Let's get the film. Thank you.
This project, I think, was selected as the winner because it creates unity around a district that today is subject to physical boundaries between the railway lines and Paris Bercy.
The metropolitan fact is there before our eyes. All that remains is indeed to make it operational.
The first necessity was to reconnect this site to its initial geography, to the Bois de Vincennes, to the Seine, to Paris. The whole aim was to take advantage of this 12-hectare area, a vast area in the heart of the metropolis, turn it into a real mixed district around a very strong economic activity, that of the virtual universe world, which will develop 15,000 jobs on this site and which will be the backbone of the district's identity." "This site, with its size today, is already 360,000 square meters that will be developed with 1,000 family homes, 40,000 square meters of residential and especially 160,000 square meters of offices. It is a real metropolitan district at the heart of the Grand Paris.
This project is very ambitious, this brings with it this great tall tower, which will be a local icon for the district, but also be seen from wider Paris.
It is a tower that exceeds 70% of its regulatory consumption. It is a tower that preserves environmental resources.
It's mixed use. It has a hotel at its base and residential uses above.
It is an ecological tower with greenhouses over its entire height, with a panoramic view of the entire metropolis and Paris in particular. Paris is an exceptional capital, known in the world for its creativity.
[Foreign language] Au nord de Paris, il y a la Cité du cinéma qui est centrée sur les tournages. À l'ouest de Paris, on a la production, la diffusion, les chaînes de télé, les agences de publicité. Il manque un troisième pôle. Charenton, c'est un environnement idéal pour les gens qui travaillent dans le domaine des univers virtuels.
We see this future district as a great mixed-use place. It'll have new workplace environments, new housing for families, and of course, shopping. The new community will also need its own services and amenities. We're providing a new public school, a new public pool, a crèche, as well as great urban gardens.
[Foreign language] C'est le retour de la nature en ville. Sur 12 hectares, on a 4 hectares d'espaces verts, de jardins et de parcs qui vont permettre aux habitants de profiter, à l'intérieur du quartier, d'agréments, la nature en ville, à proximité du Bois de Vincennes, de la Seine et du Parc de Paris Bercy.
[Foreign language] C'est la raison pour laquelle il me semblait nécessaire de pouvoir nous inscrire dans cette grande démarche de rééquilibrage de l'ouest vers l'est.
C'est un signal à l'échelle de la métropole qui positionne ce quartier dans une dimension internationale.
Good morning, everyone. I'm Pascal Minault, and I will speak for Bouygues Construction this morning. I will say a few words to start with, Linkcity and property development at Bouygues Construction. Thereafter, I will expand on sustainable districts with a couple of examples out of Switzerland. We see, at Bouygues Construction, property development as a sophisticated and differentiated approach to the market. Basically, it's about securing an option to buy a land, then developing a program and a project, finding a tenant or an operator, an investor, and going on with construction and a ramp-up of operations. We position ourselves as a long-term strategy partner to the local authorities, the utilities, the neighbors, the investors, the operators, and we position ourselves along the whole value chain from land management to operation throughout development and construction.
We use the whole range of internal design and construction skills from Bouygues Construction, which we complement with wider skills, cross-disciplinary expertise, which can range from sociology then to demographics as well. We have a capability to develop individual project, individual buildings, as well as whole blocks or larger urban districts. We consider this business as being very attractive in terms of risk profile because we don't take property market risk. We make no significant upfront financial investment. We don't buy land, and we don't start construction until the project is fully financed. We are B2B, no B2C, and whenever we need to have project financing, we are talking about non-recourse loans. We market ourselves as Linkcity, as a global brand, and it's an umbrella brand name which we use in conjunction with our permanently established construction businesses in different countries.
They bring their local knowledge network, their design and construction capability, and Linkcity brings its own expertise, references, know-how. Linkcity in 2017, in France, secured about EUR 800 million of new orders, 4.5 thousand units of service accommodation or housing, and employs more than 300 people. There's currently an exception to the use of the Linkcity name in Switzerland, where the established company, Losinger Marazzi, has a long-standing experience track record in development of a sustainable neighborhood and has kept its own name. The idea behind the development of sustainable districts is transforming existing abandoned urban areas like former factories or warehouses, former prisons, hospitals, and transform them into new, vibrant, sustainable mixed-use districts. These are very attractive project. They can come from public tender or private initiative. As I mentioned earlier, they require little or no upfront investment. There's no property market risk assumed.
They are large projects with high profile and high impact. They generate high volume and long-term construction projects. For example, it may take from three to five to 10 years to develop such a project, and thereafter, we will build it for another five to 10 years. That means we are working today on projects which will generate turnover in five, 10, 15 years' time and profits accordingly. To develop such projects requires a very extended skill set far beyond those of pure construction or design and construction. For example, we employ a biologist. We even recently employed a graduate of philosophy to help us work on those kinds of projects. The counterpart is that there is limited competition. Naturally, we expect from that, and from the high human investment, upfront investment in terms of time spent to work on those projects, a higher margin.
Our approach is also more and more inclusive. We're not talking about individual buildings, but how those buildings will work together and how the inhabitants will be living with them. We look after the energy, the mobility, the biodiversity, and what kind of services we'll provide to the inhabitants who live in these new districts. For example, one such project in Geneva, on a former army barracks, which was not anymore in use in central Geneva. The ambition of the Geneva State was to create a new sustainable housing district there. They launched a public tender to select investors, to then develop and build and start operating this district. That consortium investor was led by Bouygues Construction Swiss subsidiary, Losinger Marazzi, to lead and coordinate the tender, and thereafter, the development and the construction of the whole project. I'll come back to this project later.
To develop this kind of very long-term, large-scale project, requires different stages from the urban development stage, thereafter, to individual development of projects, the construction, and thereafter, the start of operations. At each stage, you will meet with different contractual arrangements. For the very first stage of the urban development, it's about meeting an ambition and taking an opportunity which exists with a disowned site. At that stage, we will enter into, typically, a development partnership with the stakeholders, which are the landowners, which are the public authorities, the utilities. That's how we'll work in these early stages. Once all the urban planning is done, the basic infrastructure defined, the land being secured, we'll work on the development of individual projects, where it's about meeting a market or creating a market with individual properties, which we'll then build.
We're talking then about lease agreements, sales agreements, and working with future tenants, operators, and investors. Architects as well. No, architects will come later, sorry. When we are working on the construction, when we then found a client, there is a project. We'll work with the designers, with the architects, and obviously have design and build contracts with Bouygues Construction companies. Last point, when we come to the end of construction, stage by stage, it will be about agreeing urban service level agreements with urban services providers. You can think of waste, mobility, energy, facilities management, as well as those tenants which will provide retail, for instance, or cultural activities. In terms of expertise, again, at each of these stages, we'll draw on different skill sets and expertise. At the very beginning, the local knowledge is key, the contact with the administrations and the city executives as well.
As I mentioned, we'll work on sociology, demographics, community management, urban planning, mobility, energy, biodiversity, are issues which need to be addressed at that stage for the project to go through. Project development is about knowing the market and obviously having established good relationships and understanding the investors' and operators' needs, and working with architects, going through the permitting process and the land transactions. Construction is our core business, it's about pricing, engineering, and then delivering construction. All these activities we do obviously in close cooperation with our ecosystem of partners at each stage. Two examples now. In Zurich first, Green City project, which is halfway through construction at the moment. It's 165,000 sq m of built area, roughly 60% housing, 40% with offices, a hotel, a senior house, and also a primary school.
This eco-neighborhood is 2,000 watt certified, which is a very interesting label, which has been developed in Switzerland and also can be used worldwide. Basically projecting into a low carbon, low energy society. 2,000 is about one-third of the average energy consumption in France or in Switzerland at the moment. Timeline for development, again, interesting. We started working on this project in 2004, completed development 2013 with the acquisition of land through investors, started construction in 2014, and we plan to complete it in 2021. Overall investment value, there's a series of investors there, institutional investors, about 800 million CHF, about 700 million EUR. The second project, which I mentioned earlier, Caserne des Vernets in Geneva, which was a public tender. The previous one was a private initiative, 150,000 sq m, 1,500 housing units. Again, on top of units, offices, hotels, some retail, and public facilities.
It was a tender organized by the Geneva State. We bid it in 2013, 2014. Early 2015, we were the winner of this tender. We're currently developing the project until 2019. We are submitting our planning permit at the moment. We should start construction in 2020, complete the whole project in 2024. The consortium investors, which we lead, is made of eight investors, two insurers, Swiss Life and Mobiliar, three local pension funds, and three housing cooperatives. The overall construction value is in the region of 600 million CHF. There are, at Losinger Marazzi, other projects of this type, large urban developments, with a community value of around 2.5 billion CHF. Thank you.
Good morning to everybody. I am François Pitti. I'm in charge of the strategic marketing for Bouygues Construction. I would like to share a few insights in terms of the smart cities demand, and also our positioning in this quite dynamic market. If you look at the last decade or so, what has been striking is global disappointment, I would say, in terms of smart cities, especially when it comes to what was perceived as a very technocentric approach, with very little real-life benefits. As a consequence, what we saw for ourselves, but also in the sector, is a growing demand for commitment. Commitment on results, commitment on performance, commitments also on an approach that will be very contextual and therefore very relevant. With this in mind, we've been looking at how can we address what we feel is a second wave of smart city project.
Many more projects globally that we are seeing, project that are basically focusing on cities, but also on parts of the districts, parts of the cities, but with very ambitious deployment goals overall. A very good momentum that we're seeing in Europe, but also globally. With this in mind, we've been reaching out to customers, partners, stakeholders, and asking them: "What do you expect from a company like Bouygues Construction? What do you want from us in this domain?" Topping the list, clearly, was user centricity. Saying you need to be relevant, contextual, understand the usage in the spaces to help design, build and service those spaces. About two years back, we set up a number of think tanks around education, healthcare, work, mobility, housing, with architects, urbanists, sociologists, citizens, of course, and cities.
Try to get a better grasp at what could be the global trends next few years and see what could be the local implication of these trends in spaces, buildings and districts. We've been also feeding this thinking with our own experience in the last decades around healthcare. We've been building close to 400 hospitals and clinics around the world. We've been building, designing about 300 schools, universities, colleges also. We've been also bringing that to the tables and sharing that with our customers. We got close to 700 customers, clients attending these sessions. We've been discussing those trends, get that feedback, and eventually, this has been very precious into another approach of co-designing smart city and smart urban projects. It helped us develop a three-pronged approach to smart urban projects that you can see here.
The first one around services and usages and getting all the assets there to deliver this differentiated value to residents and city stakeholders. A second dimension where we've been also capitalizing on projects such as the one described by Pascal on Les Vernets, Green City, the 2000-watt approach, Éole Évangile , and a few dozen others, where we looked at resource management from a broad scope, not only at energy, which is very important in itself, but also water, waste management, materials, circular economy as a whole. Looking at how can we bring value, unleash value, get better efficiency there, and get a performance and commit to that. The last pillar is around smart assets. Of course, we're talking about smart urban project, but we don't see technology as an end in itself.
We see that as a powerful means to deliver on services and to deliver on efficiency here on resources. This is really the framework that we put together to really have a real capitalization on what we did with dozens of projects and try to really bring repeated value in the short term, mid, and long term. One key dimension also in the feedback we got from our customers is that been historically in the smart field, two dimension and a missing link. There's been the smart building and the smart city. Missing was really something in between, the smart district, smart neighborhood. Mainly for two reasons. One is that it can deliver proximity services that you don't get at the wide service level and cities level.
The second reason. In 2018, the technology, its power and its price that came down offer unbelievable possibilities to get synergies we don't necessarily get at a building level. A smart district dimension is where we put a lot of R&D in last two to three years, and we are now operationally ready also to deliver on those R&D through actual projects. Last, in terms of the way we operate, is get synergies within the group, of course, downstream and upstream in co-designing with customers and residents. Getting the synergies, there was a question earlier about Bouygues Energies & Services, we do see a lot of synergies between what doesn't move, the spaces, and what flows, the information, the people, the energy, utilities. That's a mix of those that is the fabrics of the city.
A lot of value will be unleashed through the combination of these two elements. Finally, in the way we address that, very concretely, is to build an ecosystem of partners with a long-term vision. Not that we start from scratch every time. A really long-term vision of what an ecosystem could be around the three pillars of services, resource, smart assets, but also at three dimensions. We are fortunate within the group to have Colas alongside with the smart solutions, infrastructure roads, solar road. Many of our assets will bring a lot to these projects. Bouygues Immobilier, as Emmanuel was saying, working together on a few major projects with a fine understanding of usage, promotion, real estate development.
Bouygues Telecom also, we are one of a very few company, I believe, around the world to have this combination of construction and telecom, and we get the benefit of these telecom services and start to see the great synergies using big data, AI, IoT from the Objenious subsidiaries. It was announced a few weeks back, early July, 5G is coming up with very nice promises for smart cities. Within the group, lots of synergies. We also assembled an ecosystem of global partners and national partners like WWF, Cisco, Suez, Dassault Systèmes or Microsoft. Academics like MIT. We have very good partnership and interaction, for example, with Carlo Ratti, which is a leading figures internationally in the domain of smart cities. Many exchange with Carlo and trying to get the full benefit, both ways of this relationship.
Locally, the local dimension, of course, to be contextual is key. We have deployed, and developed about 130 relationship with startups in the last two years in actual projects. Again, here, we're not looking at a project by project, we are looking at developing sustainable relationship with these players. A global ecosystem, and concretely, this translate into the novel way to approach projects, which is not to be subcontracting. We are here working fully with 50 plus partners as a whole together to deliver both on the resource management, on the energy side, on the mobility side. This project was developed with Bouygues Immobilier. You see Colas is also a key player trying on mobility, for example, to launch autonomous services in the Lyon area. This is a very ambitious project that was awarded the European Prize for Innovation last year.
Also on services to get the full benefit of local services, especially in healthcare. A second very concrete example that was awarded last year, very ambitious project in Dijon, where we are seeing also all these assets around fiber, around mobility, around traffic lights, energy, with committed savings of about 65%. At the same time, you can see on the top of the picture, in one of the biggest smart city project in Europe, open data delivery for services to citizens, companies, and cities themselves. These are real project as we speak with a vision of going there, but this is actually happening. Finally, we are having this new way of listening, caring, co-designing. One example is around CityPlay, and you can test it. We'll be happy to share it to you. It's a way to engage in role-playing, some of the key stakeholders around the cities.
It's tying up to our global platform of innovations, where we try to get the best of a local approach, but also a global reach and experience. It's a mix of these two that we think is bringing value. As a conclusion, we feel a lot of value in the smart urban project will come from bridging different domains. Bridging scales, as we mentioned, between the building and the city. Bridging skills, upstream, construction, downstream. Bridging competence in a very wide ecosystem. Bridging, as we mentioned, the local dimension and the global reach. Finally, last but not least Bridging the technology, the smart components, and the usage to bring this meaningful improvement of ways of living. Thank you. I will hand over now to Frédéric for Colas.
Good morning. I'm Frédéric Gardès. I'm heading the international division at Colas. I'm also in charge of Colas Projects, but my little keynote this morning will be about innovation at Colas and how we're trying to respond to, anticipate, and I hope even shape tomorrow's markets for us. As you will know by now, I hope, Colas is a leader in all aspects of infrastructure construction. We have a very local and closely knit business network that enables us to offer the whole range of services. From core materials, bitumen supply and retail, to large civil works projects spanning roads, rails, and even pipelines. However, we believe that constructing high quality infrastructure, whilst very important and it will remain very important, will not be sufficient in the future as our clients and stakeholders will be looking for more global mobility solutions.
In this context, more and more cities and communities are expecting mobility as a service. That can be defined as a multimodal, door-to-door, personalized, seamless mobility service that is made available on a single digital platform. Now that's the ideal world, and we're working hard to get there. There's still a lot of things to be done. Whilst doing this, there are a few things that are very specific to Colas. The first one is that whilst being a sizable company, we're very local. We have a network of local subsidiaries that are tightly connected to what's happening in the territory where they work. This information is fed back up to us and we use it in our innovation. That's really unique to Colas, I believe.
We have the good side of being a big company, and that's that we can devote a lot of resources to research and to innovation. This is even more important, in the context where pressure on budgets in terms of infrastructure are higher and higher. We are always and have to continue to meet the performance requirements of our clients, of our direct clients. In the future, we will also have to take into account the requirements of the end consumer of infrastructure. That's in terms of comfort, efficiency, fluidity, safety, et cetera. That's really new for us. At Colas, we dedicate significant resources to research and to innovation. We have over 130 employees working full time on innovation. The total budget is in the tens of millions of EUR.
We have a big campus for science and techniques at Magny-les-Hameaux, west of Paris, which is, we believe, the leading and biggest private research facility dedicated to roads. That's not the only place where we do innovation. Innovation is happening everywhere, locally, in every country where we operate. We've put together a governance for this through the Colas Innovation Board that funnels this innovation and then it gets screened and selected, and we spread it out again towards all the places where we work. In the field of digital transformation, we created Mobility by Colas in 2017. They develop a digital offering for infrastructure based on new users and services for sustainable connected mobility. I'll give examples of that later. We've defined priorities for our innovation. The first one is to make roads safer. Too many road accidents are still happening, and we can help improve this.
Second one is to make roads more sustainable. By 2050, 65% of the world's population will live in towns and cities and will be responsible for the majority of greenhouse gas emissions. We have also a role to play in this. The third and fourth priorities are really linked together. Mobility needs will continue to grow. By 2050, the number of vehicles will have quadrupled, and public funding will not be able to respond to this. Infrastructure will have to be shared, and in order to be shared, it will have to be connected. Those are also priorities for us. Roads are becoming a service. They are changing, and we believe that technology will help create urban spaces that are more practical, more modular, more personal. Colas must play a role in this change.
What I've told you so far might sound a little bit generic and theoretical. I'll try to make it more practical. There are three main categories of things we can do with infrastructure to achieve mobility of the future. First one is take infrastructure. It takes a lot of space. It's everywhere. If we can invent ways to put it to better use, that's what we call smart roads, to make them shared, connected, et cetera, then we are inventing mobility of the future. Examples of this are Wattway and Flowell. I will present them in more detail later. The second one is that whilst constructing roads is important, maintaining them is even more important. That takes the better part of the budget, and that's something that we've been focusing on for a long time.
Our current project, called ANAIS, which I will present also in a few minutes, is really something that will help us drive maintenance of the future. We've been working on maintenance for a long time. In 2005, Colas Ltd in the U.K. was awarded the Portsmouth City PFI contract, where they took it upon themselves to maintain the whole road infrastructure of Portsmouth for a duration of 30 years. Now, you can imagine the amount of data know-how that we are deriving from a contract like that and feeding back to the rest of the business. Colas, through its subsidiary Aximum, has also developed digital auscultation and diagnostics techniques for roads and runways, and data processing that goes with it, that we can then use in our research to derive new techniques. As I said earlier, so far, we've not been very involved with the end user.
This is changing, starting to offer new solutions to road users is something we want to do. We have the Moov'Hub initiative at Paris-Saclay, which I will present in more detail, but there's also other things we're doing. VMU is a solution where we offer to optimize travel around our and other construction sites, urban construction sites. We also have a system that automatically checks the number of passengers in vehicles that are traveling, for example, in a pool sharing lane, in carpool lanes. I agree some of this might seem far from our traditional businesses, but we really prefer to be proactive on digital technologies and data use. We want to protect Colas from disintermediation, Uberization, on our conventional longstanding business lines, and we prefer to invent a new type of business to business to consumer type of business than to have it imposed upon us.
Now to Wattway. That's an example of a smart road and of new features that can be built into infrastructure. I guess you've heard of Wattway, the solar road. Since it was started about 3 years ago, we have now over 30 trial sites around the world in very different climates, in North America and Europe and Japan, in Morocco, in the Indian Ocean. We're at the sixth version of Wattway, so we're doing a lot of development to improve the product. We've also looked at various ways of using Wattway. Some examples are given here. We can use it to power up streetlights, dynamic signage, power charging stations for bikes or other electric vehicles, and also, of course, for the consumption of buildings. The picture here, what you must remember is that for the moment, Wattway is a research project. It's not commercial yet.
We have the ambition of having a first commercial launch next year. We're in pretty vast discussions with 7-Eleven in Japan. That's a grocery chain. They would like us to install Wattway on their parking lots to power up their stores. We're talking several hundreds of sites, 300 sites over 3 years for 45,000 sq m of Wattway. This would be the first commercially viable example of using Wattway. There's another innovation also that we have that was launched a year ago that is called Flowell, and I think the best way to present it is a small video we have.
Growing urban populations and more diversified transportation modes mean that we need to improve the way we share public space. This is why Colas has imagined Flowell, an innovative solution for interactive, dynamic, day-to-day road network management. Flowell will make for smoother traffic flow during rush hour, thanks to a dynamic lane management system. It will also help improve safety in sensitive areas by lighting up bus stop markings and pedestrian crosswalks. Flowell road markings are illuminated by LEDs embedded in a heavy-duty, skid-resistant surfacing placed on the existing roadway. Currently in a trial phase, Flowell will be available for all road users to ensure more fluid mobility and a safer route. It will provide a number of benefits for communities. It does not require any major construction work, is modular, optimizes infrastructure, and can be controlled remotely 24/7.
Flowell, a scalable solution we can build together for more welcoming public space.
The video is pretty self-explanatory, this innovation is really piggybacked on Wattway. A lot of the technology in there is identical to Wattway. What's important here and interesting is that since we started to look at this, the number of applications of Flowell is just growing. It's incredible what you can do with it. There are some obvious things that were presented, with this, you eventually will be able to guide planes on the taxiway. The final use we see is, of course, the ability to have dynamic traffic lane allocation on highways, which can help reduce traffic and smoothen sharing of the infrastructure. We have the first official uses of this that are being developed and will be implemented by the end of the year. We believe very strongly that this is something that will bring business to us.
The next one is ANAIS, which is an acronym in French for acquire, digitize, analyze, inform, and secure. What we do here is we put sensors in cars. We don't do it ourselves, because we need a large number of cars, we have major partners in the automotive industry. These sensors collect geo-localized data on the behavior of the car, its speed, acceleration, vibration, et cetera. That creates a data lake that our data scientists then use to derive information like, for example, where we have near misses on roads, certain sections of roads where there are no accidents but near misses. We can, based on that, propose various solutions, changes to the infrastructure or maintenance solutions to help improve things. For example, add skid resistance to the surface.
The authority can measure with the system if this has had a positive impact on the problem. This is something we're driving pretty hard at the moment, and for which we see a lot of potential. Finally, an example of solutions we can provide to end users. Moov'Hub, by Colas, was selected by the Paris-Saclay Public Development agency to develop intelligent shared parking on its urban campus. This choice is part of the developer's ambition to create a smart, sustainable city. On this project, we're not working alone. We're co-contracting with ParkingMap, which is a software publisher specializing in connected car parks, Zenpark, a shared car park operator, Nokia, and Opendatasoft, a software publisher specializing in open data.
This solution will allow users to be informed at all times of the availability of parking spaces and to be guided dynamically to a place corresponding to their needs. This 5-year-long innovation partnership has 2 phases. First, a 2-year research and development phase designed to develop the parking service and define a sustainable business model. After that, the operations phase will test this economic model and roll out the parking service on a larger scale. For Colas, this success is a first step towards mobility as a service. Now to conclude. What's in this for Colas? Well, we're already benefiting from the notoriety of Wattway and Flowell. Especially Wattway has created an enormous buzz that has reinforced our brand and our attractivity as an employer. The mobility environment is changing very fast. We need to anticipate this and position ourselves in the value chain. We don't want to follow.
We want to lead and have the right partners to do that. This is what is happening at the moment as we speak. Of course, all this will inevitably lead to new businesses for us, but it's also a defensive move. You can call us paranoid, but we don't want to be Uber-ized. We might be a traditional business that has been around for a while. I mean, people have been building roads since the Roman Empire. That doesn't mean that we're immune to the current mega trends like digitalization and so on. We're very conscious of this at Colas, and we're doing everything we can to be ready for what the future has in store for us. Thank you. I think there's a Q&A session now. Is that so? Yeah.
It's time again for Q&A session. I heard that in the previous session, we missed 1 question about aggregates, please free to ask it again. For the rest, you've got many subject on sustainable neighborhood, smart cities, smart road, smart mobility. Who's the first? Maybe, yes, aggregates. Is there one?
[Foreign language]
Could you pass the mic?
[Foreign language]. Stéphane Beziau, Raymond James.
Sorry, Stéphane.
Pardon. A question about smart cities. Can you give us an idea of the budget that this could represent for a city? In this case, the city of Dijon, but perhaps a city of a similar size. What share can [Foreign language] go to the Bouygues Group, since we saw that there were different partners in such a project? Thank you.
The volunteer for the answer is perhaps Pascal? Perhaps. Only perhaps. François? No?
[Foreign language] The budget will obviously vary depending on the size. What we see is that there is. We see I'll answer in English. In English, I guess?
As you wish. Up to you.
Maybe in English. We see increasingly many projects, a wave of projects. It is re-increasing massively. The granularity is very scattered, so it could be from a few million to more than EUR 100 million if you look at the size of the smart component. If you look at the smart city size, you get estimates, and this is where we need to be a little bit more precise. The range varies between $200 billion, if you look at 4-7 years range, to $2 trillion. To make it more explicit, $200 billion will be more the telecom infrastructure, software, and services. $2 trillion will be if you look at all the construction pull-through, if you will.
Okay. If you look at Forrester and Grand View Research and so on, they look more at least $2 trillion. To make a long story short, the service component telecom infrastructure will be in the range of EUR 2 million to EUR 100-plus million. The total pull-through, you can multiply usually by a 10x ratio, the potential pull-through in a project. If you look in the dynamic, the CAGR, if you look at compound average growth at the 4-7 years outlook, 2022-2025, we are looking at between 14%-17%. Of course, you have got dozens of analyses, but this is roughly the range. It is really exponential growth overall.
Maybe just to add something. If you look at the amount of the contract, I think there is another thing that you need to look at. If we do this, and as mentioned in the introduction at the beginning, it is because we want to be sure also to remain the single interface for the customer. One main risk for us is disintermediation, and it is very important for us to be on this kind of project. This is for us, new competitors. For example, in Dijon, our competitor was Engie. It was not a construction company. For us, we have to remain the single interface because we do not want to be in a position of subcontractor. We want to maintain the global relationship with the final customer.
Hi, Nicolas de Gondeville from HSBC.
No, maybe.
Sorry. For the quarries.
Sorry, just.
Not for quarries.
Voilà.
Eric.
Thank you, Nicolas. This is Eric Marlier from One. I only have got three question. Actually, the first one, I would like to come back on Bouygues Construction, the normative margin you mentioned, the 3.5%.
I thought it was about quarries, Eric. Sorry.
Well, look, I will come back on quarries.
You will come back. Go straight to the second one.
I understood it was historical normative margin target. Now that you have new ambition in energies with better margin, I suspected you would take the opportunities to increase this normative margin target. This is my first question. The second question on aggregates and on these quarries. Maybe you could share with us your view on the value of your reserve in aggregates. What could be the value of this reserve for Bouygues? The last question on smart cities and digital project in general. Do you expect this new project to have positive impact on your normative margins for Bouygues Construction, for Colas, and especially for Bouygues Immobilier? Maybe it could be an opportunity for you again to
Okay
We need to review this 8% normative target. Thank you.
We could group the first and the last. You know what? What is important in construction is the sustainability of the margin. For us, all our activities has only one purpose, sustainability in term of margin. What we speak about 3.5% is the idea to be around this amount on a year-on-year basis. All the activities, so the move in smart cities, the development of energy and services, all these new development lead to maintain this sustainable level. In construction, what is difficult is sustainability. To have a fantastic quarter is very easy. To have a very difficult quarter is also possible because a project is not only a computer exercise. For us today, the target is sustainability around 3.5%.
Obviously, all these elements we show to you, smart cities, eco-neighborhood, development in term of smart cities and so on, are means to reach this sustainable level. Clearly, we don't say to you all these things will increase our margin. We say to you all these elements will create a better sustainability in term of margin. That the only answer regarding margin. Thierry?
Okay. For your question about the value of quarries, it really depends on the location of the quarries, the kind of rocks, the market dedicated, and the accessible market. It depends on if the quarry is close to a big city or not. We have differences to value our quarries between EUR 0.10 a ton of reserve until EUR 1 per ton of reserve. We usually take an average value about EUR 0.60 to EUR 0.70 a ton of reserve. If you remember, we have 3 billion ton of authorized reserves and a potential of extra reserve about 2 billion tons.
Thank you. Nicolas, now.
Yes. Nicolas de Gondeville for HSBC. How often can you combine Bouygues Construction, Bouygues Immobilier, and Colas when you develop a smart city? When it is the case, can you really extract a better margin for each business, or is that just about more revenue in general? I guess my question can be extended to the general approach of the group on cross-business synergies, if any. Thank you.
If you look at the way, every time we work with the Bouygues Group, different company, to answer RFP for a customer, this is for us a way to get the better answer from each partner. For example, if you look at the way we answer for the sustainable neighborhood, we have two different approach. One in Bouygues Immobilier, one in Bouygues Construction. Sometimes we answer together because we consider that collecting all the answer, making our proposal better than the other one, this is the way we won Marseille, for example, Les Fabriques. This is also with this partnership that we won 11 project out of 55 in the Inventons la Métropole du Grand Paris this year.
The idea of this is not a question of margin, it's a question of better answering to the customer need and be able to have the right answer for the final customer. If you combine both, if you look at the way, for example, Bouygues Immobilier works with Bouygues Construction, there is no automatic process to choose every time Bouygues Construction to build everything they want. It's a way for us to be sure that this is the right answer to the need, to the customer need to be sure that we could win and get the right proposal for the final customer. If you look at the way we operate, for example, with Bouygues Energies & Services, if you look at Dijon, for example.
For Dijon, the right way to answer to the customer need was to integrate in Bouygues Energies & Services, they integrate Objenious solution to be able to offer connectivity answer. With this, they were able to get the best solution overall for the customer and to be in position to win. It's more this way, coming from the customer. If we want to win something, we need to start from the customer need. After this, we build the best answer. Every time we just try to start from us to build something, we don't have the right solution for the customer. That is not the way we work.
Thank you. Sven Rudolf, ODDO. You just answered the question for valuation reserve, I had one follow-up on asphalt. One of your competitors has moved into the lime business in Europe. I understood he might move as well in the same direction in the U.S. I just wanted to know, to what extent lime is key to road construction for Colas, and is it a strategy you want to follow, buying some lime businesses?
Louis?
Lime is not essential for road-building. There's 2 different type of limes, but the lime you're referring to is probably a lime that sometimes is used as a replacement for cement. We are a user of lime, but very small tonnage.
Could you give us just a small explanation of lime? Because I'm not sure all of us understand everywhere. I understand it's not essential. Good.
Yes. Well, a lime is a product that comes from a quarry, and it's [Foreign language].
Oh, okay.
it's milled, it's very fine.
Thank you for the lesson
it can replace up to 15% of cement powder in the compound product.
Okay. Thank you.
We're good?
We're good. Thank you. Much clearer. The goal was to educate the financial community to our strength advantage. The last one, please.
Hi. Frederic Blanc from Bank of America. Just to come back on smart cities. I'm trying to understand, if you look at the projects from connectivity to the whole data management, who are your competitors you're seeing in RFPs against you? On the telecom side, do you think you can extract a competitive advantage because you can leverage smart cities, et cetera, you can leverage the assets you have in construction to deliver the whole project, whereas telco competitors will have only a very small chunk of the value chain. Is this a differentiating factor at this stage? Thank you.
François? French micro.
Actually, the competitive landscape has been changing dramatically in the last two to three years. It's changing by the week almost with announcement by likes of Google, Amazon, Alibaba, SoftBank. Indeed, what we feel is really key is what you described in term value chain, is the breadth of the value chain. It's the breadth both upstream, meaning understanding the usages, because this is at the core of what is expected. This was at the core of the disappointment we've been seeing the last 10 years around smart cities. Then servicing, meaning understanding this is why Bouygues Energies & Services, all the service assets, including telecom assets, are really key. Finally, of course, technology and whether it's Objenious, IoT, AI, big data, and since it was announced on July 3rd, 5G in Bouygues Telecom.
We indeed feel we bring a lot of these assets together, both from the technology side and the usage understanding side. That's a combination that will be key. It's not one or the other. You need to get both entangled and unleash the value from both.
Okay, merci. We stop now, we continue with the last part of this investor day. Thank you, gentlemen. Yes. You have seen that there is many change due to digitalization in our world. Now the last part of this day will be dedicated to the way we innovate and maintain our leadership in our three businesses through a concrete example using digitalization and technology. After this session, there will be another Q&A session. Thank you. Christophe?
Thank you, Olivier. I am Christophe Yénac, head of innovation for Bouygues. As Olivier said earlier, we have identified four major trends. I will not get through the detail you already saw. Mainly, moreover, there is a close link between innovation and digital. We have identified four key technologies that will impact our activity. Virtual, augmented, or mixed reality devices. The system will allow or already allow new interaction with our customers, but also with our teams in the field. For training, for example, a crane operator can be performed in 60 hours instead of 400 hours in conventional training. The blockchain then, as a technology for storing and transmitting information transparently and securely. First application could be traceability of contract management, as well as for the application related to the self-consumption of energy for the building. Big data and Internet of Things.
In 2018, we have already more than 15 billion connected or connectable devices collecting data, huge amount of data. Of course, the stakes associated with storage, security of devices, and data themselves. All this in relation with the huge progress on voice recognition, Google Home and Alexa for the public. Finally, artificial intelligence. It's still the very beginning with mainly deep learning. Of course, we already see some use cases in our business. This slide will give you an overview of the organization of innovation in the group. Obviously, the R&D teams of each business segment carry out research in all the major domains that impact the group. With our dedicated teams located in San Francisco for innovation and Tokyo with Bouygues Asia, the group learns a great deal from the work and thinking of its technology intelligence units in USA and Asia.
We draw on outside expertise, research centers, universities, and think tanks to create new and innovative products and services. For example, with Smart City Alliance and the Industrial Liaison Program from MIT. Convinced that the returns of open innovation are beneficial, we launched an investment fund in each business segment for acquiring minority stakes in startups when they launch. We also stimulate enhanced exchange with startups to accelerate commercial partnership. The digital is obviously one of the element of the reinvention of the group. We develop it according three axes. The first is focus on transformation of our processes and work method. The second is the improvement of the user experience for what we can call the customer, the consumer, the citizen, and the collaborator. The last axis concern our efforts to boost digital culture within the group.
This approach is structured around a digital committee sponsored by Olivier Roussat and Hervé Le Bouc. This committee is the digital governance body for the group. It brings together representative of different business segments. Our collaborators are, of course, actors and at the center of this transformation. They participate in many ways within the business line, but also through transverse action in the group. For example, the Club des Transformeurs, made up of 30 members from all business segments that feeds the digital committee on use cases such as blockchain or artificial intelligence. Also the program Innovate as a Startup, which bring together each season, we just achieve the third season right now, about 50 participants contributing from all business segments. Using agile methods, they find solution on themes such as positive economy with buildings, rethinking the city, or productive city.
Each season, five to six projects are presenting to an action tank composed of the top business managers. The action tank can support projects that then enter the maturation phase for six months, then return to the action tank for possible acceleration. R&D and innovation are indeed accelerators of this transformation by improving the productivity and performance of our activities, improving the customer experience, but also to bring out disruptive activities to counter potential new entrants. I will give you now some example illustrating the three categories in our business segments for construction. I will go quickly because Marie-Luce, Maude, and Nathalie will explain more in detail a few example. For the improvement of productivity and performance, the exoskeleton you will see in the lobby facilitates the works of companions on road construction for Colas. Exopush is now in the field deployment phase.
The RB 3D startup designer of the exoskeleton was supported by Colas seed fund. For the improvement of productivity and performance, sorry. The Colas et Moi application create a direct link with residents near the job site to improve their experiences and inform them of the progress of our operation. This approach is quite well perceived by our customers and international expansion is forecast. Lastly, in term of disruptive offers, the ELSA is an European project in which we are associated with various industrial or academic players, from five European countries, including Renault and Nissan. It's about being able to store electrical energy in building using second life batteries, which reduce costs, of course, and increase self-consumption. Thank you. I will let now the floor to Marie-Luce.
Good morning, everybody. I'm Marie-Luce Godinot. I'm in charge of digital transformation, innovation, and sustainable development for Bouygues Construction. The first example of digital innovation I want to focus on is our approach of digitalization of project activities. We're really convinced, as Christophe just mentioned, that our data from products, but also from projects, are really a great source of innovation and of value creation. Nowadays, we are facing several challenges in our business activities. The challenge of efficiency both at project level but also at company level. We have to boost productivity to increase our collective efficiency with our partners and to better manage our risks and opportunities. The second challenge is the challenge of complexity. Project are growing bigger and more complex with the number of player who is increasing. In this context, we must better manage the complexity. First challenge is the challenge of digitalization.
Without any doubts, digital will offer us a lot of opportunities. We want to be a leader in the digitalization of construction. We are convinced that digital will allow more efficient work modes, not only internally, but also with our partners, our clients, our supply chain. This is why Bouygues Construction decided to launch in 2014 a very ambitious project around the digital transformation of its project activities. This project has two main axes. First axis is BIM deployment, on which we are very active internally but also within the industry. BIM allows to manage data from buildings and from structures. Just a short video to explain what BIM is.
The BIM minute. Not so long ago, building a world of harmony came with quite a few twists, lengthy parts, accuracy, interpretations, misunderstandings, and sometimes surprises. Times have changed. There's no ding with the BIM. The Building Information Modeling helps each stakeholder, client, architect, expert, and end user of a project to share the same vision from the design to the usage of a building. BIM with 3 M's for model, modeling, and management. Model, thanks to a three-dimensional digital mock-up displaying details on every single component's feature. Managing, thanks to a structured layout that follows every step of the project's life cycle. Modifying and improving the project together with all its stakeholders, thanks to this brand new joint multi-display process. With BIM, construction enlivens the ways of designing, constructing, and operating efficient buildings and infrastructures, fulfilling the customers' and end users' expectations.
BIM is really fine to collaborate on buildings and structures. To address our business challenges and the needs of our staff, BIM is not enough. We also have to manage more efficiently the information of the life of the projects, players, dates of schedules, requirements, events, all of what is useful for capitalization and knowledge-sharing. We want to have a better collaboration with our supply chain and support the evolution towards industrialization of our businesses and a wider internal standardization. That's why we are creating a digital platform for project management with two external partners, Dassault Systèmes and Accenture, in order to federate internal and external players around the same source of information. This data, once they are gathered and structured, we will be able to use them. We already identified several use cases at project level.
A better answer to the needs of the client by implementing a real requirement management, a support for activities management, and even traceability in relation with risks and opportunities. We can connect BIM modelization software with this platform and have a single source of information shared in real-time between all the players of the project. We also identify use cases bringing global efficiency across the company. For this major project, we decided to launch an experimentation phase. We started six months ago to test and to use the platform on several real projects to test different use cases. For example, digital bid or management of risk. It's really the beginning of a major innovative adventure. We are the first in our industry to launch a program at this size. This will certainly last quite a few years, but the value expected is really important. A second example.
This second example aims to illustrate how artificial intelligence can be tremendous useful in our activities, and this example is focused on tunnels. Three years ago, we decided to create a specific organization around big data for tunnels with two challenges for these activities: safety and productivity. What is completely obvious is that you need data, to implement big data. It's very often a major issue in data projects. In the case of tunnels, we've implemented data collection on work site, and we're collecting various types of information coming from geotechnical investigation, trucks, rotation of cranes, energy consumption, but also coming from the tunnel boring machine itself. For this part, we began to collect this information 10 years ago for traceability purpose. We aggregate the inputs coming from each site in a global data lake. All this information are used to produce algorithm helping staff in safety and productivity.
We have more than 10 data scientists within the company and more than 8 terabytes of data, which is a great amount of data for us. To be more concrete, this is an example of how we are using information coming from the tunnel boring machine to create a tool helping staff to drive the TBM. TBM for tunnel boring machines. When you are on a tunnel site, you're having geotechnical information coming from investigation every 50 to 100 meters, which means every day or every 2 days. We wanted to have the capability to understand in which type of soil we were boring between 2 samples. Because this information has a great impact of the best boring parameters. Three steps for achieving that. The tunnel boring machine is very sophisticated and is equipped with a great amount of sensors.
Every second, we receive many hundred of datas, like soil pressure, energy consumption, engine effort. We store all of them to do analysis. For this use case, we select 50 relevant information. With specific algorithm, we search correlations between all these data coming from the TBM to create coherent and homogeneous sets, giving indications of the type of soil. For each configuration or classification, the application give accurate advices to the production crew to optimize boring parameters. To check the robustness of the model, we use the geotechnical investigations we are doing every 50 meters. At the end, we repeat on different operations to evaluate the robustness on different site and conclude it's really relevant. We're now about to deploy this tool. Thank you.
Good morning, everyone. My name is Maude Grison, and I am in charge of BIMbyCO, which means BIM by Colas. Today I will talk about how BIM is organized at Colas. BIMbyCO has six main missions. The first one, governance. BIM deployment at Colas is headed by BIMbyCO team, which is composed of five people, and BIMbyCO leads a network of more than 30 BIM representatives around the world. Our second mission, training. To ensure that everyone at Colas has a single shared definition of BIM, we have designed and rolled out a single set of shared tools along with an e-learning training program in the form of MOOCs. Innovations. Within the BIMbyCO unit, we also work on innovations related to BIM, such as virtual reality or augmented reality. A part of BIMbyCO activity is devoted to BIM production in every field, building, civil engineering, infrastructure, railways.
This production is essential because it allows us to remain aware of reality on construction sites and also to redirect our global BIM strategy. Concerning technical assistance, all Colas projects go through BIMbyCO. It allows us to keep a global vision of BIM and to gain expertise on BIM technical subjects. Solutions integration corresponds to BIM engineering, that is to say, defining BIM users or new BIM users with associated processes prior to production. This business provides added value and allows us to accompany our customers. For example, we worked as a consultant for EDF to define BIM deployment strategy for nuclear dismantling. Another example is the deconstruction and decontamination project of the Dunkerque refinery, for which we received the 2018 Golden BIM Award.
This is a big project, 95 hectares, more than 50 km of underground pipes, and the equivalent of five Eiffel Towers in terms of steel tonnage. The site that dates back to before World War II, and we have even found some traces of bombs, like you can see on the third picture with red points. For this project, we made two digital models from nearly 60,000 plans. The first one for superstructure is made from a scan of the existing structure, and this model is used to manage the asbestos risk and to monitor the deconstruction work. A second digital model for infrastructure is made for pollution cleanup and to manage pyrotechnical risk. For this project, we created an innovative geostatistical interpolation tool to calculate the concentration of pollutant agents at each point on site.
It generates a map of pollutant impact, like you can see on the fifth picture, and it simulates decontamination scenarios. It is a new way to work with our customers with full transparency. Our client can control interpolation calculations, generates a multitude of scenarios, and optimize the numbers of surveys. They can control directly risks and costs on a project full of unknowns in the subsoil. Thank you.
The last, and I hope so, not the least. Good morning, everybody. I'm Nathalie Watine, in charge of digital transformation for Bouygues Immobilier. Construction and property development are perhaps one of the last businesses affected by the digital revolution, as have been mass media, telecoms, banking, or retail industry. The acceleration is striking, as all speakers have explained before and as shown by the evolution of investment in the real estate for two years. EUR 3 billion raised in 2016, EUR 12 billion in 2017, and KPMG forecasts expect EUR 20 billion in 2020. In this digital tsunami, real estate is no longer stopped but has begun to transform. Well, according to the first real estate parameters established by KPMG and Real Estech, today in France, and especially in the field of real estate, it is already more than 400 startups created.
This with a very fast acceleration these last four years. New technology as big data BIM, platform, marketplace, virtual and augmented reality, robotics, artificial intelligence, drones, IoT, give us large opportunities to transform our business and propose new services. In this context, Bouygues Immobilier accelerates its digital transformation, and we have set three priorities. First of all, that I name hashtag 'Our Business.' This is to address new services and new business opportunities brought by new technologies. For example, Nextdoor, our subsidiary in co-working, is an example of new businesses. Well, this is why Bouygues Immobilier is not only a big player in property development, but making a big shift to new digital services in residential, commercial areas for buildings, neighborhoods or city, and so much in terms of products, but also in services. The second priority is, digitize the core business.
I know if I name it, hashtag 'Ad Experience,' that's because we decided to focus on increasing the customer and employee experiences. This is a real transformation whose first step is that of a full digital developer: online booking, virtual visits, configuration of living space online, remote control home automation solutions, community needs, co-working, co-living, co-design with BIM, making appointments, and so on. The last priority is about culture, the mindset of the company, because it's absolutely necessary to change ourselves if we want to be competitive, attractive, aware of digital opportunities. Afterwards, I will focus on the first two priorities, and how about I show you some concrete examples about the innovation we have implemented. As you know, land is the first necessity for real estate development. No land, no operation, no clients.
In this example, I want to show you the importance of data in property search. Instead of having our 130 property developers walk those sidewalks in search of land, we are using the power of the data. We use cartographic solutions that allow us to save time in identifying and valuing plots. We cross different sources of information, open data that we can dispose, data about the attractiveness of the territory, for example, the establishment of shops or the quality of schools. We also use intelligent document reading. For example, we use municipal council reports to capture the last decisions about urbanist changes, to be quickly alerted of last evolutions that increase the constructability of our lands. It's a way to better anticipate and predict future evolution of a territory in terms of population growth and predict risk taking.
Crossing different sources of information is a means for us to identify quickly lands and enhance the value of them. The other important contribution of the data obviously concerns commercial prospections. Two example about that. The first one is about the prospect prospection. As you know, 90% of our prospects come from the internet, and often because they have seen consciously on that poster campaigns that show our operations. To better determine the location of these advertising billboards for an operation, we sometimes use the data generated by the BTS antenna provided by telecoms operators. The analysis of these data highlights zones of flow, home to work and work to home, and determines area to install our traditional physical campaigns. The second example is about contract withdrawal controls. Our clients, just after their reservation, have 14 days to withdraw from their contract.
Based on more than 20 years of experience of property sales, we are able to determine what are the criteria of fragility of a client reservation, depending on, for example, the type of the client, the price of the residence, the type of the program, and so on. These criteria allow to score client and to adapt our strategy sales. These last examples, land prospecting or customer scoring, illustrate the efficiency actions that we have undertaken by cross-checking data. Well, the purchase of an off-plan property can be stressful for our clients, mainly due to the difficulty for them to visualize themselves into their future home. That's why virtual reality holographic visits allow to propose virtual and immersive visits for their future apartment in 3D. Coupled with drone shots, the client can also see what he will see from his windows once the building is built.
Well, just imagine if Coca-Cola puts customers' names on their cans. The need of customization become a basic client expectation, and even more so in property development. That's why with the online configurator, the customer can discover the different collections and fitting that we propose, set up on the internet, quietly from home, their future apartment, and while realizing immediately the different effects, and get the estimate of any additional options they wish to have. Today, we already have 7,500 housing unit configurable online. Throughout the customer journey, the CRM and the dedicated teams ensure a personalized, digital, and friendly relationship. Contracts and parts of the customer digitalized, regular updates, dealing with appointments, online appointments, of course, chatbots, dealing with customer queries.
In order to go further and always better understand the users, the expectation, and the satisfaction of our clients after the delivery of their home, we'll launch digital visits. Each visit is recorded and using audio capture tools, semantic analysis, emotional recognition, we identify improvement, access client by client, and what they are real feeling. Well, this is the first and a recent test of artificial intelligence in the service of satisfaction of the client. The ultimate dream of personalization for clients is to be able to design themselves their future home. This is why we will propose to reverse the marketing model. As you know, currently, after its design and after obtaining its building permit, building and its apartments are put on the market. Our customers buy and customize already designed residence, as we have just seen before.
By the end of the year, Bouygues Immobilier will offer a new co-design service. An online platform will allow future customers to create their digital apartment before applying for building permit. They will be able to design their dream home. After delivery, we still are with our clients. In particular, we offer them two digital applications they can use on their smartphone. Today, more than 5,000 Bouygues Immobilier housing units are connected with Flexom. They are able to control energy use by remote control, things like shutters, lights, or lux. Later, why don't you just step just outside the Flexom stand? In the same way, aware of the importance of the social bond, we set up a special social media app, Entre Voisins.
Currently, in more than 50 residences, families can now discuss on Entre Voisins, exchange services, place ads, and reserve common shared areas, shared room or reception area, and so on. The best is to have a look at the video. Thank you very much.
How can I get by now? Left me all alone. How can I get by now?
Finally, we cover all the topics we wanted to cover. Now, last session for Q&A about mainly this subject. Yes. Digitalization, new technology.
Hi. Jakob Bluestone from Credit Suisse. I had a question on BIM and/or, I guess, more broadly in your sort of digitization. Can you maybe just help us understand how you monetize it? Is this something that allows you to charge a higher price against your competitors? Is it sort of a loss leader that you embed to win contracts? Is it meant more as a way to reduce your production costs? Just to sort of help us understand how do you make money from it. Thank you.
Okay, Jakob. Before they could detail a little bit more what I will say, the first key thing for us with the BIM is to improve quality. Because, for example, when you are able to modelize everything before, you could detect some conflict, and it's very costly to solve them after we built everything. It's really good for the management, as it was explained in the short video, and really good on the quality. For this main reason, this is something we improve finally, the cost of the building. You have to keep in mind also that without BIM, we weren't able to build the first pictures that Philippe showed us. Morpheus was something impossible to build without such tool. This means that the BIM will help us to create new thing and to have new ability to build something which is different.
This is why it's very important for us to be ahead in this new utilization of the tools. No? Good.
Just to.
si. Yes.
All these technologies for us is first, more business. As Olivier said just before, a building as the Morpheus was absolutely impossible without this tool. More business, less costly, but the construction remains competitive. In any case, we have competitors, and it's not a sufficient technology to increase our price or our margin. It reduce our cost. It's possible for us to have another job because of the BIM, but it's always very difficult to sell a technology as a technology in the construction environment. Again, it's productivity and more business. In any case, no extra price because we use the BIM.
I think the message was very clear about the sustainability of the profit.
Is it clear? After a few session, I think it's really I gave you the normative before, now you are convinced, I guess. Yes.
Hi. Nicholas from Morgan Stanley. We understand that actually BIM is not a differentiator. That's what you were saying. You can't differentiate-
No, we didn't say this. We say that-
No, you give back everything to the clients-
No, it's clearly a difference because without that, you are not able to build certain type of projects and you are less competitive. If you are less competitive, you lose the project because construction is always on a tender or bid scheme.
Okay.
Obviously it's a competitive advantage. What I say, it's impossible to sell with a higher price because you have the BIM. You win because you have the BIM. You win because we have aggregate and carriers in Colas, because we have a smart city offer and so on. In construction, you don't sell something because you have a technology, but the technology is able to win against competitors. In the construction business, you have competitors. You have to be the lowest bidder, with the product fitted with the client's requirements. All these technologies and all these elements are able to do that. Obviously it's key to have this type of competitive advantage. This competitive advantage doesn't lead to have an extra price or more price, and you don't win because you are the highest bidder. That's the rule.
I just see what-
Well, even when we win a project, we don't win it because we explain to customer we use BIM to make it.
No, especially when the customer forces it on you. Public clients now increasingly force BIM on all bidders. Everybody's on the same starting point.
No, it's not true. There is real big difference between all the competitor by using this. As Marie-Luce told you, we are the first one in France to use on a such scale. The way we make it, our competitor are not yet able to make it as we do right now. We are reasonable. We know that this is something where our competitor will come, and this is why we continue to increase our knowledge of this and the way we could make it something differentiating. Not for the customer. A customer, Morpheus owner, didn't choose us because we were using BIM. He choose us because we were telling that we were able to build it, and we were the only one accepting to take a such building. No one accept it. All the competition, all the competitor refused to build it.
We accept to do it because we have the key to do it, thanks to this.
Okay. Maybe two other things on technologies or.
Maybe on the margin? No, sorry. It's a joke.
We know it's never going to go up. On 3D printing and on modular, so on modular homes and industrialization of the process, which also maybe at one point will help the margin. Where are you? On these two topics
3D printing, as we showed, we have some example of 3D printing. It's now a R&D project for now with some universities. The project we made in Nantes was a real project with real people who are living there inside this building now. BIM is really an important technology to offer the opportunity to print in three dimension. If you don't have BIM, you can't print in 3D. It's the same for industrialization. We think that, and it was explained that, the future is certainly increasing in terms of industrialization, standardization, and if you don't have BIM, you can't put in place such a strategy. BIM is necessary to do that. It's not sufficient, but it's necessary. We have some example and we have in prototypes in these different directions.
For the modular construction, if you look at what we did in Singapore-
Yes
with the Canopy project, I think.
We have several projects in Singapore using modular technology. We have Canopy project, but also Clement Canopy.
Clementi
Which is a high building with a modular construction. We also have nursing homes, which is a project for elderly people in modular construction. Singapore is really a place where modular construction is really appreciated, and we open this way in Singapore, but also in some other countries. We want to implement this technology. We have now a good experience in that.
For example, in Singapore, this is the highest tower built in modular construction. We did it with our local subsidiary.
If I may, a last point. On the smart cities and the smart homes, what is really the acceptability of the client? Either public clients or us, the end users for homes to pay more, because at the end of the day, today costs more. Your local authority clients in roads, are these guys ready now to open up their purse and pay the extra premium at the beginning for cheaper long-term lifecycle spending? It is always about the price. Are we at the limit where these guys are going to start to open up and spend the money?
François, do you want to answer?
For residential users, it's very difficult to sell a higher price, if the usage is less expensive for long years. In commercial buildings, office buildings, we often sell at a better price because the management of the building is lower. For example, our Green Office buildings, with our zero energy buildings, the yield is higher when you sell it, and the rents are a little higher because the energy consumption is lower. When you add the energy consumption and the rent, the total is lower. For us, as we sell the rent and the yield, we can sell better. For commercial users, you can sell higher price if the management of the building is lower, but not from residential.
This kind of usage start always when there is this kind of new technology, start always with the professional use. After this, we could sell it to the mass market. No other questions, Conclusion.
Yes. Let me now to briefly conclude this presentation dedicated to our construction businesses and activities. First, I would like to summarize our vision of the construction market. You may have heard recently on the financial market that we are at the end of a worldwide construction cycle. We don't share this view at all. On the contrary, we think that we have entered a long period of high demand at worldwide level. Three factors underpin this conviction. First, the four megatrends, notably the growing urbanization and the environmental challenges, represent a long-term opportunity of construction sector. On a shorter term, many major countries have launched large stimulus plans to expand roads and railways networks and to build new infrastructure aiming at revitalizing their economy. This is notably true in the main areas in which we are located, France, Northern and Eastern Europe, North America, and Asia and Australia.
Third, there is a strong need for renewal and maintenance of existing infrastructure of buildings at a worldwide level. Unfortunately, I say that the Genoa disaster recalls the need to maintain infrastructures. This terrible event has resulted, for example, in the announcement by the French Ministry of Transport of higher investments for the maintenance of secondary road network until 2023.
Those three drivers make us confident that we have entered a long period of high demand at a worldwide level. Another good news is the deep evolution of the construction sector leading to higher barriers, exactly what we just explained, to entry and less cyclicity. The megatrends generate higher demand for more complex and sophisticated projects like tunnels, bridges, high buildings, or eco-neighborhoods to adapt to increasing urbanization and demographic pressure. Offers with enhanced services for both client and end users demanding expensive innovation capabilities. We have tried to explain that to you. Integrated offers like smart city, eco-neighborhoods, or smart mobility requiring the building up and the management of large ecosystem of partners. Finally, maintenance of infrastructure, building, and industry. On the one hand, projects are becoming larger and longer, requiring more and more expertise.
As you have seen with the change of scale in urban development, for example, from a building to a district. The evolution of our backlog over the past 15 years reflects a general trend towards expansion of our projects. On another hand, recurring maintenance businesses are growing, driven by the need to maintain existing infrastructures, notably in energy and services and in roads. This evolution leads to two positive effects: higher barriers to entry and less cyclicality. A less competitive environment coupled with a better visibility on activity ensure, I hope that you have understand that, better sustainability of margin over the long term and higher cash generation. This is obviously an opportunity for us. Indeed, our positioning and strengths brings us strong competitive advantage within that context. We are able to realize complex and sophisticated projects thanks to more than 65 years of expertise.
We are notably the leader in tunnels at a worldwide level. We have specific know-how in sustainable construction with tangible achievements in positive energy building, eco-neighborhood, solar road, smart grid, building renewal, reuse of materials. We offer full service solutions to customers at each step of the value chain, as we have extended the value chain of each of our construction businesses upstream and downstream. We know how to manage a large ecosystem of partner of different sizes as we have extensive experience as a general contractor. Lastly, our positioning allows us to keep the direct relationship with client. That is key in a construction sector, which faces the growing risk of disintermediation. The last slide sum up what I just told you. Before ending that Capital Day, I would like to thank you for joining us today. I hope you have increased your knowledge of our construction businesses.
I would also like to thank all our speakers for their commitment and the passion they have shared with you. Don't forget to visit our booth during the cocktail. Thank you very much, and have a good day. Bye.