Bouygues SA (EPA:EN)

CMD 2018

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Oct 2, 2018

Good morning to all of you, and 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 plan launched in many mature country in which our construction activities are present. We, therefore, believe that we enter a long period of high demand at the worldwide level. And the good news is for each of our three business segments, we are well positioned on the market to take benefit from this promising outlook. Our second objective is to focus on two main strategic topics. The first, this 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 small road and smart mobility solution. Our third objective, as the construction sector is completely transforming due 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. So we won't answer any question related to Q3 or to the trend in 2018 or the result 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 Marion, Deputy CEO of Oui Group. During these days, there is coffee break and a cocktail buffet. We invite you to visit our booth in the lobby at the 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 Confucian businesses, the gentlemen, as well as senior executives from Bouygues Construction Colas et Bouygues Immobilier. Let me introduce briefly the group construction businesses. You know, Bouygues Group is a major player at the construction center in France and into international markets. The group is active in building and civil work, property development, transport and energy infrastructure in more than 90 countries. Our key figures, total sales stood at EUR 26,000,000,000 in 2017 and the backlog at end December was close to EUR 32,000,000,000. At June 2018, we reached EUR 33,700,000,000.0. Bouygues is one of the world leading construction firm, ranking sixth out of two fifty different company according to the last year and year release in August. Each of our three construction businesses has a leading position in this 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 3,500,000,000.0. At a worldwide level, Colas is the leader in roads. It's the biggest purchaser of B2Mon in the world, and it's a top 10 largest producer of construction aggregates. I'd like to highlight 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. And the third, passing, developing, sharing expertise, which are the driving force in relation between our people in our group. Offering high value added solutions 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 now in sustainable construction, for example, in solutions to help reduce energy consumption. But 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 chain leads to increased contract value and to have a stronger competitive positioning. It notably reinforces the direct relationship with customer, which is absolutely key in a construction sector, which faces the growing risk of disintermediation. We, as Bouygues Group, have always explained 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 Businessporter from all our sites, from the start up 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 standard. At the 2017, more than half of revenue were done internationally. Today, our group operates 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 areas where we generate revenue, North America, Northern And Central Europe and Asia and Australia, we benefit from lower stimulus plan in 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 fifteen years, you can see that the business model of our construction businesses is resilient. Construction activities constantly adapt to economic cycles, thanks to a highly variable cost structure. They have between 60% to 100% of 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 projects which may occur. The ability to constantly adapt as well as to offer higher value added services and to cover the entire value chain allowed 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 €3,800,000,000 at the 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 megatrends impacting our sector and at the same time, megatrends were a source of opportunities for our businesses. The first one is population growth and urbanization. In 02/1950, the world population will be close to 10,000,000,000 individuals. Two third of them will live in urban area. This leads 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 generates a strong need for innovative products and services adapted to environmental regulation. The third one is digital and technological revolution. New 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 wants to simplify their daily life with more personalized solution. In that context, the construction businesses' strategic priorities are: first, to control key resource like queries 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 and finally, to offer customers an enhanced personalized experience and scalable product they 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 these three businesses, Philippe Bonnard, Chairman and CEO of Bouygues Construction then Francois Bertier, Chairman and CEO of Bouygues Immobilier and Henri Le Bouques, 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 Macau, a hotel casino designed by Mrs. Zahadid, which is Macau's newest iconic landmark, a very complex venture with 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 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 specialty, hospitals residential building but also mechanical and electrical installations. Second sector is infrastructure on various topics. Tunnels, for example, the Tunun Shek Lapcock 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 Reignon 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, Jammal 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. And finally, we are a global construction group positioned on every step of the construction value chain. You can see the value chain. We have the necessary internal skills 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 markets. Building an increasing importance of innovation. Due to digitalization. In answer to the clients' requirements, the construction processes are more and more industrious. In infrastructure, the increasing urbanization leads to growing needs for large and highly technical underground infrastructures. The needs for high speed optical fiber networks will remain strong worldwide. And a new market for repair services is emerging with very strong prospects. In industry, the value of the Industry four point zero is not in the building, but essentially in the clients' 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 projects 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 Vagraeb. And 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 UK, 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 AS, including the Swiss based Alpiq Intech and the German Kraft and Wagen, 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 developed 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 energy and services. You can see the figures. This means work in progress. More precisely, our position and scope of activities in energy and services. Our position. We are a global leader in energy, digital and industrial transformation with an established presence in France, Switzerland, Canada, The UK, 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, energy, infrastructure, buildings, industry and telecom. Energy 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 project, maintenance and operating services, for instance. So differentiating capability to offer global and integrated solution answering to the most complex needs and hopefully contributing to higher profitability, more recurring and more profitable business, development of services and solution with high added value. All good reasons to pursue the rebalancing of activities of our activities towards energies and services. Now 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. Link City is a new umbrella brand name for Bouygues Construction Project 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 in our lean management processes Now focus on infrastructure. We intend to be a reference player in the major infrastructure market by this general repairs and in the power network in France and worldwide. In the channel 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 develop and implement the ideas, solution and tools of tomorrow, leading to higher productivity, robotics, navigation and driving simulator tools, faster execution and predictive capabilities. In the infrastructure repair market, the segments offer strong growth prospects with a large number of hedging infrastructures. We are present in the concession and PPP market. This activity offers an exceptionally wide combination of position in the construction of value chain. We have developed a strong expertise in this type of project, generating high returns on investments. 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, seen with the Bosch Group, to position Bouygues Construction as a strong player in the Industry four point zero. And we pursue our development in power generation projects. To conclude, a short look on our prospect of a new digital era. We digitalized 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 building 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 Systemes, a very ambitious project, 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, and I thank you for your attention. Good morning, ladies and gentlemen. I'm Francois Berthier, the Chairman and CEO of Bouygues Immobilier. Let me explain to you the strategy and markets of Bouygues Immobilier. So Bouygues Immobilier, the baseline will create a better life. Huawei, 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 are the 2017 figures. Revenue of €2,700,000,000 Reservation, euros 3,100,000,000.0. 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. And Urbanera is our brand to develop green neighborhoods. And we have more than 1,000,000 square meters under development now. Bouygues Immobilier operates on the entire real estate fair 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 and going from usage analysis, design, marketing and sales and construction to deliver housing and office space. Then some 15 ago, we moved up on the value chain to to go 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. Then 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. So now we are operating on the whole value chain of real estate. What are our strengths and assets? We have the producers, people and businesses want, the expertise to deliver them, and an approach to risk that guarantees our future. Why that? Because extensive geographic coverage in France. We have 45 business units in France on 39 sites. So 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, bicyclist properties, student and senior citizen accommodation, single family home and co living. Concerning commercial property products, turnkey buildings, green office positive energy office buildings, Reagreen office building rehabilitation and next door, collaborative workspaces. Acknowledged expertise in sustainable neighborhoods, where four eco neighborhoods already delivered and 16 under development. And finally, a robust business model that prioritizes risk management and guarantees a healthy financial structure. We have a land portfolio offering two to three two point five years visibility. The major parts of these lands are reserved as an option so that in case of a crisis or some problems, we can get out of the auction. And the purchase of the land is done only when achieved at least 30% of pre sales. That's through 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 coast and on the axis between Paris and the Mediterranean Sea. But 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 metaphorization, 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 conception and 25% of the GAG emission comes from construction businesses. So there is a strong demand from regulators and from our customers for green buildings and of course, digital transformation. So we are based on these trends, we have three strategic priorities. First, leader in customer experience, and we are focused on usage. Second, from single buildings shift from single buildings to neighborhoods. In fact, we see a major opportunity with local authorities to develop green neighborhoods. And third, digital transformation. So 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. So how do we look at that? Development in large French cities to improve market share gradually, notably with accelerating in Grand Paris area. Proposed differentiated and innovative offers to suit new usages. For example, we are the first developer to propose 100% connected and intelligent homes with our device, Flexo. You can see it in demonstration there. And with the app, Entre Boisin, which means from neighborhood to from neighbors to neighbor, and it's a collaborative app. Improve customer experience through digital and personalized approach. Develop data and 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 also can see this later. Maintain, of course, a strict quality policy. The picture on the right is the development in Neuilly. Neuilly is premium residential city in the West Of Paris between Paris and La Defense. And we are currently building more than 200 units on Bank Of The Seine River. How is the market 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, it's a very fast scheme. It means that the sales are done before completion and clients, the customers have staged payments according to the work promise. So it means that the square meter price in France is very resilient. Lending policies from the bank. Loans are granted according to the ability of the household to repay its obligations and not only on the value of the asset. Majority of the loans are fixed rate loans during all their duration. And history, the loan duration is very high in France. I think it's now between nineteen and twenty years fixed rate. So you see on the chart on the right the trend in average housing price between 2,007 and 2017. The red the orange line is France, green is Spain and blue is UK. So based on, say, the index 100 in 02/2007, you see that even the big crisis of the two of two thousand and seven, 02/2008, the prices have not diminished in France. They they still are still growing at a lower price lower price, but they are still growing. When you see in you see UK, UK, there was a drop, then they have reached the same level as we do in France ten years later. But the story is not exactly the same when you see the curve. And I can tell you, it's not the same story for the developers. And when you see the red the green line, you see that in Spain, there was a collapse in the prices and have not yet recovered their level 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. So this is a very resilient market. What are the trends in 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. The short term drivers are the following: interest rates remain at a low level Zero interest loan program and P and L tax incentive have been confirmed by our president until 2021 in dense areas. L'Oire 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 development. And 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 fifteen years. And 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. And 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 being while optimizing risk and profitability. Our strategies are to remain leader in green office positive energy buildings, to develop real green activity, office building regulation in obsolete tertiary market because the city is rebuilding itself in the same place. And the last point, which is very important, is to balance the portfolio of projects between turnkey, presold operations and speculative developments. Turnkey is low risk but lower profitability. Presold operation, mid risk, middle profitability. And of course speculative development of higher risk but higher profitability. So that impermanently, we balance our activity between these two 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. The market is the in the Paris region, have the largest commercial market in Europe, 54,000,000 square meters stock around 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, to Paris La Defense. From the chart on the right on the upright, we 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 present area, which means it's a very constricted supply. And you see that the take up office in the Paris region at the chart of the bottom is was at 2,600,000 square meters in 2017. It was record, and we have already broken this record for the six first months of twenty eighteen compared to the same period last year. Obsessence of commercial real estate in Grand Paris Aira, the stock is very important, but it would you must understand that it's very important to understand that more than 80% of the stock is below international standard and needing and these standards. So it needs renovation, and it's a very big large opportunity for us. And last of it, new customer expectation, cost optimization, pay per use, new working patterns, digitalization, normalization, connectivity, well-being at work and collaborative economy, mutualization of usages, services to individuals, those services can be opened to the neighborhoods. Last of our three strategic axes, digital transformation and new businesses. We recognize a threat in digital, but we also see major opportunities in terms of profitability and new businesses. I shall not develop in detail these points that 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 Boissin app, which is enabled from enable to enable then building information modeling marketplaces. We own a marketplace which is named Valorisimo, which is a market shop and housing for housing shop and housing units for buy to let. And we are developing a co design platform to create a housing program with future buyers and users' future buyers. New businesses, which we have developed new businesses based on digital transformation. Nextdoor, Nextdoor collaborative workplaces, CoLiving for young people and students. Desjardins Arcadis, our brand for senior citizens and AmbiX Aveltis, which are two new companies to manage energy either in office space or in neighborhoods. So in summary, Bouygues Immort is well positioned going forward throughout the value chain on resilient and growing markets with a strong brand and a capacity to innovate. Thank you. And I leave the floor to Herve Le Bouk, with chairman of Scolas. We 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, COLASP, short for cold asphalt. Innovation is at the heart of COLAZ, is in our DNA. And ninety years later, COLAZ 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. And our bitumen business has grown significantly during the recent years, particularly in Asia, Australia and more recently in Canada with the acquisition of McAshalt. And 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. And the challenge today is to invent new forms of mobility that take into account the stakeholders' expectations for customers, users, employees or public authorities. 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 British collapse in Genoa in August showed that it is very hard for many developed countries to maintain existing networks. And 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. And 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 constrained for our industrial activities, I mean aggregates and bitumen. But 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 and fourth, accelerating our digital transformation. As I said before, Colas was built on bitumen, one of the two ingredients to make growth. The other ingredient is aggregates from quarries or gravel pits. Since the 1970s, 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. And over the past two years, we have reinforced our quarry network in Denmark, in France, in The U. S. And in Canada. For bitumen, we reached major milestones in 2018 with the acquisition of McAshfal, the leader in bitumen distribution across Canada. McAshfal 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 project 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 P3 project for the Tramway Of Liege 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, and our services to improve mobility are now booked 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 thirty years, 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 McAshford in Canada. I spoke already about McAshford. But Miller completes the country network at Colas Canada with a strong foothold in Ontario. Second, with Bouygues Construction, the acquisition of Alpiq Engineering and Services Company. This acquisition completed last July reinforces Colas Ray's experience in Catenary Systems and strengthens its presence in Czech Republic and in UK and provides new position in Switzerland and Italy. Colas will pursue this external growth strategy. There are many, 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 holistic activities such as quarries or asphalt pollution can also be improved by digital technology. Digital technology is also now part of our construction project. BIM, a shortboard building information modeling, is being used on complex projects. And we just won a Golden BIM award for a major deconstruction and depollution project. It will be presented later this morning by Maude Grizon. Finally, digital technologies provide 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 clients. But 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. Now to conclude, you have seen our outlook at Colas is positive. We operate in well oriented markets, and we have all the resources, all the assets available locally to take advantage of this favorable environment. It will be illustrated by Louis Gabbana and Thierry Mellin, to whom I give the floor. Thank you for your attention. Good morning. My name is Louis Gabbana. 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 long standing model at Colas is based on vertical integration between material and construction. The material business is key to the construction segment and 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. And as for bitumen, the shortage experienced 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 stabilize the margin of construction activity. As Mr. Herrera Bock 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 product adapted to specific condition and various uses. Bitumen emulsion, binders, modified bitumen, asphalt mixes of all kind, resistant to very high and very low temperatures, noise reducing mixes, porous mixes, skid resistant mixes, colored mixes, sparkling mixes and more. Has more than 100 patents filed in France and around the world. Colas' leadership in bituminous product is backed by its campus for science and technique near Paris, a premier research center with an international reputation in bitumen based roll technique. 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 ninety years, often in partnership with many important players, including engineering school, transport administration, industrialists and scientists. Over the years, Colas has secured its supply and production of bitumen by building a network of storage depot and emulsion plant in most of the areas where the group operates. Colas is also a shareholder in a Thai company, Tepco Asphalt, which operate a refinery with a capacity of 1,200,000 tonne of bitumen asphalt per year. The site is on Kemaman in Malaysia. Typical markets, bituminous products throughout Southeast Asia. In total, the group Colas Group buys and produce annually more than 5,000,000 metric ton of bitumen, equivalent to 5% of the world market. By way of comparison, the largest producer of bitumen, Xenopec in China, produces 8,000,000 ton a year, and Shell worldwide production is 5,600,000 ton of bitumen. Colas has the benefit of very, very large and vast logistical network. We have 73 bitumen terminals, including 28 at McAsphalt in Canada 10 bitumen vessel in Asia with capacity ranging from 1,500 tonnes to 10,000 tonnes two large river barges in Canada with a capacity of 11,000 ton each, and 200 railcars in North America. Undeniably, Colas is a global leader in bitumen. Colas has grown this business and expanded its logical resources network primarily to serve its own needs and secure supplies. However, 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. Southeast Asia, TIBCO sells 1,600,000 tonne of bituminous product per year to third party customers. Also the case in Australia with SAMI, where 200,000 tonne of product are sold outside the group. And lastly, McAsphalt, the company just acquired by Collapse Canada in earlier in 2018, had third party sales of over 700,000 tonne in 2017 in Canada. Now let me tell you a little bit more about this acquisition. The Asphalt Industries was founded in 1970 by two gentlemen, Leo McArthur and John Carrick. They were former Esso Oil engineers, known as Exxon in the rest of the world. And they developed this Canadian diversified company committed to development, production, distribution and marketing 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 customers' requirements are met. Recognized as the industry leader, McAsphalt offered 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 market through coast to coast. McAsphalt's unique ability to receive by trucks, rail and marine allows for the sourcing of raw material throughout North America at a significant competitive advantage. Skilled and experienced personnel ensure that products 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. The cash vault 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 terms 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 05/01/2018. 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. Siri Merin will now present you the value of aggregate resources at Coas, and I want to thank you for your interest. Good morning, everyone. My name is Thierry Mellin, and I'm the Executive Vice President for France and Railways. So 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 seven fifty quarries. Today, with Miller's network in Canada, we now have more than nine fifty sites worldwide. Aggregate production has doubled in the last twenty years, illustrating our vertical integration strategy. In 2017, aggregate production amounted to 100,000,000 tonnes, making Colas the second largest quarry operator in France and among the top 10 in the global market. This equates to revenue of about EUR 1,000,000,000. Colas does not always own the land. Some deposits are leased and operated in the form of mineral rights contracts. Finally, Colas does not always own 100% of the capital of its quality 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 relationships 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 link 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 three and five years. They also help keep the permit up to date and ensure compliance with operations 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 2,900 tonnes of authorized reserves or thirty 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 1,900,000,000 tonnes 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, 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 queries 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 work 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 four point zero industries tools as well. Colas is part of a secular economy, which aims to develop the recycling of materials. Calculating the life cycle and carbon footprint helps measure the impact of activities at the local level. Colas operates under the name Premise 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 premise and perform 800 projects each year. In 2017, recycling at Colas represents a volume of 9,000,000 tonnes of materials, which means that we saved the production of dozen of quarries. For example, Colasseldorf 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, Colasse de France Normandie recycled nearly 1,500,000 tonnes of materials, including 200,000 tonnes of railway 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 this presentation, 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. Now let's take a trip around the world and see some Colas quarries in a short film. Thank you. Thank you. So this is the end of the first part of this day. Now this is time for Q and A session for a few minutes with Louis and Thierry. So who's the first one? There is a candidate. GRIFFINI:] you. Nawar Chryssini, JPMorgan. So 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 to rebalance the revenues toward more Energy and Services. Could you tell us a little bit more about the margin profile of this business? And importantly, in the long run, how should we think about the margins at Bouygues Construction given the increased mix on the Energy side? And my second question is about Africa. Africa ticks a number of boxes on the megatrends that you presented, growing population, increased urbanization and also the climate change. So there is 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. So 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. So 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 at 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 contract strategy. Clearly speaking, we are we answer to private customer. For private customer, we do a few things. There is few country where we are acting, Ivory Coast, Morocco, that it's very 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. So we look project by project if the environment is okay in term of legal contractual safety and 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 whom we have for which we have a general positive view of the country, legal environment, contractual environment, tax environment, and we're able to install a long term presence. Regarding your question on Energy and Services, as Philippe Bonnard 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. And 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. So it is the reason why we want to develop this business. In fact, in Energy and Services, you are more between 3.5% to 5% on a regular basis compared to a sustainable level at 3.5% in construction. If we are in a position to reach that, we are more in between 3% to 5%. So in fact, the mix to increase energy will increase the average margin on building and civil works to 3%, 3.5% to 3.5% in Energy and Services. Thank you. Thank you. Jacob 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 sort of 5% margin business. I think it was 02/2005. 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 Services that you're just talking about for the previous question. I mean 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? And 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 120,000 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 there UNIDENTIFIED on So to answer to the first one, when we have several discussion about this margin level margin, we remind you that we consider that a sustainable level of margin and we consider that on sustainable basis. We consider that for the Bouygues Construction business, it's something which is around 3.5%. For the Colas one, the normative margin is 4%. And for the real estate Bouygues Immobilier one, it's 8%. And we consider this is sustainable. It means that sometimes it could be beyond this, as you could saw on the slide. But on a regular basis, we consider that this is our normative level. Francois? FRANCOIS Concerning the real estate market, the fact is the figures remain quite high. That's true that there is a slight slowdown now in France. But 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 and in major cities in France. And when you see the figures, the individual houses are decreasing very sharply, and the collective housing dwellings are not decreasing so much and not in the big cities. And we're active in apartments, dwellings, and in the big cities. So we are quite confident on this 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 inquiries. So maybe it was very, very clear during presentation. I didn't have any more questions. But please take this opportunity to talk to them. They are really exporting this area. Usually, in August or February, we don't have such level of skill to answer those questions. And this is something really interesting to better understand what is the asset of Colas and the value of Colas. Nicolas de Colisson from HSBC. Sorry, it's not going to be specifically to Colas, but maybe you can have a view on this. But 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? And a more general question about how do you see the Chinese CHALENDAR:] and Indian market? Thank So to answer first to the second first and then Eric answer the first one. First, the Indian market, we had a trial a year ago, two years ago with Bouygues Construction. The global environment for the contractual aspect is not something we clearly understood. So this is the market we didn't stay in. And finally, we didn't finish the contract we were working on. We prefer to close operation over there. And in Chinese, there is a specific area, which is Hong Kong. As you know, there is two countries, one system two system, one country, sorry. 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 country a foreign operator in a such country. Yes. On the PBP, I don't know if your question is about Colas, PBP or Bouygues Construction. But for Colas, yes, of course, Colas is answering in the PBP projects, mainly in France. But we are also looking at very important PPP in Canada right now, mixing roads and railways. So we are entering through Colas Canada, Colas Project and Colas Rail. It's mainly in the region of Ontario, so Toronto and Ottawa. And yes, of course, we are always looking at we have also won recently a PPP Liege for Tram. So yes, of course, we are looking at project that can fit with Colas' skills in building, maintenance Just and financing. PIERRE to before Louis could give you some detail about Canada, just we win the presentation with Herve, we show you that we created COLASS project 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 because initially, we were working on very small projects according to the size of the branch office that we have in the territory. And we create this organization to be able to have a large view on this project and be able to answer it. But Louis, maybe more detail about what you've done in Ontario. This is a unique opportunity right now because the PPP and Ontario are rail related. So at Colas, we're able to put together what we call a winning team. We have Colas Project who has got experience in PPPs putting it together and managing it. We have Colas Rail who's got real 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. So by teaming three divisions 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 has two advantages. The first one is the fact that for the local authority decision makers or the governmental decision maker, ensure that the final price is known. So there is a lump sum price for the construction. That's the first advantage compared to another type of development. But the second advantage is clearly the fact that the maintenance will be done during the life of the PPP, which is very important. And 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. But on the other hand, they are sure that the maintenance will be done in the future for ten years, twenty years, fifty years. So clearly, we consider that even if there is some criticism around PPVs and 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 preferable scheme preferred scheme for infrastructure, which needs obviously maintenance after. And unfortunately, this Italian drama is the proof of the fact that infrastructure means maintenance. So we consider that we will have opportunity in Colas or in Bouygues Construction to continue to develop PPPs 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. Joseph 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, I would say, a big activity. Several of your competitors have a separate division. Would now make sense for you to treat it as a separate division or not? And in both cases, why? And my last question is about the 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 €1,000,000,000 dividend from Alstom, is there part of this, I would say, inflow that would go to those three activities and how much? Thank you. So there is several of them. So Hel, you start. Yes, Josep. On your first question about margin, so sorry, but we don't communicate on the very specific margins of queries and bitumen activities. So it's I know it's a bit frustrating, but so 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, so yes, we for Quarries, 70% of our sales made with third parties. And for bitumen, where we do this activity like in Australia, in Southeast Asia or in Canada, we sell mainly to third parties. So for example, Miller in Canada accounts for less than 20% of McAsphalt bitumen sales. So it's not marginal, but it's McAsphalt sales mainly to other rod companies or other wolf proofing industries. So in Australia, South Asia Southeast Asia and Canada, the bitumen sales are mainly towards third parties. Do 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're just self supplied. And there's other markets where we sell 70% or 80% of our total tonnage to third party. 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. So about your question about the organization for Energy and Services, we don't intend to separate the Energy and Services division. When Philippe Bonnard presented 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. But 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 CHALENDAR:] in a Bouygues Confucian area now. And the last one? So regarding investment, we remain with the same general idea. So 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. And we are able to spend according the opportunity, the amount we are able to spend. You know that we have bought Mila MacAsphalt for around C1 billion dollars 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 at an grade in investment grade situation. So obviously, we are able to pay huge amount of money if we have the good return to meet with investment grade rating requirement. So it depends on opportunity. For Colas, it's very clear. We start with very, very small carrier, a couple of million euros up to Mila MacAsphalt, euros 1,000,000,000. It's only dependent from the opportunities. We are totally open to seize any kind of opportunities. And obviously, part of the dividend coming from Alstom, part of the cash flow generated by the construction activity will be used to this to finance this opportunity if the opportunity are on the table. So I think it's the end of the first part. So twenty minute break and take the opportunity to see the booth and the various technological technologies that we have installed to show to you. So twenty minutes. Let's start again. We've lost few participants during the break. Anyway, so 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 and design and development of sustainable neighborhood in smart city. For example, we've got already 35 eco neighborhood already delivered or under development. As I told in the introduction, in property development, we are number one in France. Our sales are EUR 3,500,000,000.0 by adding what we will present now, Link City and Bouygues Immobilier. Because we've developed two complementarity approaches, one at Bouygues Immobilier called Urbanera and another one in Bouygues Construction called Link City. Urbanera relies on Bouygues Immobilier's promoter now with the B2C approach. Link City built its offer relying on its construction capability and its long term relationship with local authority with B2B approach. Link City's model bears no property market risk, whereas Urban Era carries limited risk related to the land in line with the cautious rule defined by the group. Both Link City and Eurobanera benefit from a buoyant market. Indeed, the context is positive due to demographic pressure and growing urbanization, decrease in local authority budgets that emphasize the need for them to cooperate with private sector and incentives that fosters renewal of socially isolated neighborhood. Emmanuel de Maisiere, Pascal Mino, will now present to you Urban Era and Nix City. I take this opportunity to tell you that Pascal Mino, former CEO of Bouygues Entreprise France Europe, will succeed Francois Berthier of next year beginning of next year as Chairman and CEO of Bouygues Immobilier. After them, you will see Francois Petit from Bouygues Construction will make a presentation of the smart city and Frederic Gardes will present you the smart mobility strategy at Colas. This presentation will be followed by a Q and A session. Emmanuel? Good morning. I'm Emmanuel Demetiere, Manager and Director of Urbana. I'm going to present to you the division of Bouygues Immobilier in charge of neighbourhood, eco neighbourhood projects. Urbanara provides a good example of the strategy of Bouygues Immobilier to shift the scale of its focus from buildings to neighbourhoods, as said for Saint Albertier. First, I'm going to describe you maybe the next one I'm going to describe you the concept and the duties of Urbanera and when and then I will talk about three concrete projects. Urban Air's purpose is to design EcoNebros in major French cities by developing urban projects, which often exceed 100,000 square meters. 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, Urban House activity has accumulated a total of nearly 1,200,000 square meters of building rights. That represents an expected turnover of EUR 4,300,000,000.0. 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 Urbanara. Urbanara then designs the project completely and sells the building rights to competitors with a majority stake going to Bouygues Immobilier. Urbanora 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. Urban Air has taken a strong position in neighborhood development at the 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. Urban Air's ambition is to bring our three businesses a volume of activity of approximately 250,000 square meters annually. This figure represents 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 orphan launches. It's important to note that each project includes management conditions that enable us to minimize our debt. To meet these expectations those expectations and differentiate ourselves from the competition, Urban Noir's approach consists of crafting specific tailored positioning for each project developed in response to local issues. For instance, we designed the LEE FABRIC project in Marseille based on the productive city concept. We included fab lab spaces where makers can carry out limited series production in shared workshop equipped with digital tools. Beyond the economic that generate, these spaces create an atmosphere, a state of mind that influences the whole neighborhood. Urbanora is able to design tailored neighborhood 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 Redriff, to name a few. In addition, our urban projects are designed to provide an offer of services such as a Neighborhoods Concert Service, a platform for connecting neighbors and special parking on 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 Ile De France. This project was designed and produced on the site of a former military fort built in the middle of the nineteenth 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 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 square meters of retail and office space and 20,000 square meters of facility public facilities, including two primary school and one middle school. It includes also 4.5 hectares of park, three canals and 12 kilometers of bike and walking pace. A neighborhood concierge provides personal services, housekeeping, tutoring, babysitting and sales as a post office role. It's also a space where residents can come together for a snack or fun events like after work or TV sports events. Around 80% of residents report in a survey that they felt satisfied or highly satisfied to live 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 Metropole 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 a high quality environment, thanks to green bridges secondly, a strong in identity for the whole neighborhood based on the video game industry and finally, nature in the city. This project is expected to earn revenue of EUR 2,200,000,000.0. Let's get the film. Thank you. This project is very ambitious, and 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's mixed use. It has hotel at its base and residential uses above. 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, so we're providing a new public school, a new public pool, a creche, as well as great urban gardens. Good morning, everyone. I'm Pascal Mino, and I'll speak for Construction this morning. And I'll say a few words to start with Link City and property development at Bouygues Construction. And thereafter, I'll expand on sustainable districts with a couple of examples out of Switzerland. So we see 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 ramp up of operations. So we position ourselves as a long term strategic 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 projects, individual buildings as well as whole blocks or larger urban districts. And 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, are talking about non recourse loans. We market ourselves as Link City 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 Link City brings its own expertise, references, know how. Link City in 2017 in France secured about 800,000,000 of new orders, 4,500 units of serviced accommodation or housing and employs more than 300 people. There's currently an exception to the use of the Link City name in Switzerland, where the established company Lozinger Maradzi has a long standing experience, track record in development of a sustainable neighborhood and has kept its own name. So 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 projects. They can come from public tender or private initiative. As I mentioned earlier, they require little or no upfront investment. There is no property market risk assumed. They are large projects with high profile and high impact. And they generate high volume and long term construction projects. As a matter of example, it may take up from three to five to ten years to develop such a project And thereafter, we will build it for another five to ten years. That means we are working today on projects which will generate turnover in five, ten, fifteen years' time and profit accordingly. To develop such projects requires a very extended skill set far beyond those of pure construction or design and construction. Again, example, we employ a biologist. We even recently employed a graduate of philosophy to help us work on those kind of projects. The counterpart is that there is limited competition and 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 in terms of and how the inhabitants will be living with them. We look after the energy, the mobility, the biodiversity and how those and what kind of services we'll provide to the inhabitants who live in these new districts. An example, one such project in Geneva on a former army barrack, 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. And that consortium of investor who was led by Bouygues Construction subsidiary, Losingeur Maradi, 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. So 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. And 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 design site. At that stage, we will enter into typically 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 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. So we're talking then about lease agreements, sales agreements and working with future tenants, operators and investors architects as well architects will come later, sorry, when we are working on the construction, when then we 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. And 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 stage, we'll draw on different skill set and expertise. 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, committee 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 long transactions. Construction is our core business, so it's about pricing engineering and then delivering construction. And all these activities we do in 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 square meter 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. Time line for development, again interesting. We started working on this project in 02/2004, completed development in 2013 with the acquisition of land through investors and 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 CHF 800,000,000 about CHF 700,000,000. And the second project, which I mentioned earlier, Casaen De Verne in Geneva, which was a public tender. The previous one was a private initiative, 150,000 square meter, 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 twenty thirteen, twenty fourteen. Early twenty fifteen, we were the winner of this tender. We developed we are currently developing the project until 2019. We are submitting our planning permit at the moment. We should start construction project in 2024. The consortium of investors which we led is made of eight investors: two insurers, Swiss Life and Mobileye three local pension funds and three housing cooperatives And the overall construction value is in the region of CHF 600,000,000. There are at Loisinger Marazzi other projects of this type large urban developments with a cumulative value of around 2,500,000,000.0. Good morning to everybody. I am Francois Petit. I'm in charge of Strategic Marketing for Bouygues Construction. And I would like to share a few insights in terms of the smart cities demand and also our positioning in this quite dynamic market. So if we 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. So 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. So 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 projects that are basically focusing on cities but also on parts of the districts, parts of the cities, but with very ambitious deployment goals overall. So a very good momentum that we're seeing in Europe but also globally. So 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? And topping the list clearly was user centricity. So you need to be relevant, contextual, understand the usage in the spaces to help design, build and service those spaces. So about two years back, we set up a number of think tanks around education, health care, work, mobility, housing with architects, urbanists, sociologists, citizens, of course, and cities, trying 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. And we've been also feeding this thinking with our own experience in the last decades around health care. We've been building close to 400 hospitals and clinics around the world. We've been building designing about 300 schools, universities, colleges also. So we've been also bringing that to the tables. And sharing that with our customers. We've 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. So 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 Le Vernet, Green City, the 2,000 watt approach, Air L'Evangeil 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. So 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 human 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. So this is really the framework that we put together to have 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 has been the smart building and the smart city. When missing was really something in between the smart district, smart neighborhood. And mainly for two reasons. One is that it can deliver proximity services that you don't get at the wide service level at 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. So with smart cities is where smart district dimension is where we put a lot of R and D in the last two to three years, and we are now operationally ready also to deliver on those R and 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. And there was a question earlier about Bouygues Energy and Services. We do see a lot of synergies between what doesn't move, the spaces, and what flows, information, the people, the energy, utilities. And that's a mix of those that is a fabric elasticity. And a lot of value will be unleashed through the combination of these two elements. And finally, in the way we address that, very concretely, is to build an ecosystem of partners with a long term vision, not to restart from scratch every time, have 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 other assets. We're bringing 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 the very few companies, 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. And it was announced a few weeks back, early July, five gs is coming up with very nice promises for smart cities. So within the group, lots of synergies. We also assembled an ecosystem of global partners and national partners like WWF, Cisco, Suez, Dassault Systems or Microsoft. Academics like MIT, we have very good partnership and interaction, for example, with Carlo Ratti, which is our leading figures internationally in the domain of smart cities, connection with Carlo and trying to get the full benefit both ways of this relationship. And locally, the local dimension, of course, to be contextual, is key. We have deployed and developed about 130 relationships with startups in the last two years in actual projects. And again, here, we're not looking at the project by project, we are looking at developing sustainable relationship with these players. So a global ecosystem. And concretely, this translates into the novel way to approach projects, which is not to be subcontracting. We are here working fully with 50 plus partners as well together to deliver both on the resource management, on the energy side, on the mobility side on this project, which has developed with Bouygues Immobilier. You see Colas is also a key player, trying on mobility, for example, to launch autonomous services in Lyon area. So this is a very ambitious project that was awarded the European Prize for Innovation last year. And also on services to get the full benefit of local services, especially in health care. 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 what in one of the biggest smart city projects in Europe, open data delivery for services to citizens, companies and cities themselves. So these are real projects as we speak. There is 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 city play, and you can test it. We'll be happy to share it to you. It's a way to engage in role playing some key stakeholders around the cities. And 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. And 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 reach and finally, last but not least, bridging the technologies, smart components and the usage to bring this meaningful improvement of ways of living. Thank you. I will hand over now to Frederic Fekolas. Good morning. I'm Frederic Gardis. 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. So as you will know by now, 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. And 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 word, and we're working hard to get there, but there are still a lot of things to be done. But 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. And this information is fed back up to us, and we use it in our innovation. That's really unique to Colas, I believe. Then 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. And then we are always and have to continue to meet the performance requirements of our clients, of our direct clients. But in the future, we will also have to take into account the requirements of the end consumer of infrastructure. So that's in terms of comfort, efficiency, fluidity, safety, etcetera. That's really new for us. So at COLAS, we dedicate significant resources to research and to innovation. We have over 130 employees working full time on innovation, and the total budget is in the tens of millions of euros. We have a big campus for science and techniques at Mani, West Of Paris, which is, we believe, the leading and biggest private research facility dedicated to roads. But that's not the only place where we do innovation. Innovation is happening everywhere locally in every country where we operate. And 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 developed 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 02/1950, 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 02/1950, the number of vehicles will have quadrupled and public funding will not be able to respond to this. So infrastructure will have to be shared. And in order to be shared, it will have to be connected. So 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. So 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, etcetera, then we are inventing mobility of the future. Examples of this are what way and flow well. 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 ANES, which I will present also in a few minutes, is really something that will help us drive maintenance of the future. But we've been working on maintenance for a long time. In 02/2005, Colas Limited in The U. K. Was awarded the Portsmouth City PFI contract, where they took upon themselves to maintain the whole infrastructure, road infrastructure of Portsmouth for a duration of thirty years. Now you can imagine the amount of data and know how that we are deriving from contracts like that and feeding back to the rest of the business. COLAZ, through its subsidiary, Axonen, has also developed digital auscultation and diagnostic techniques for roads and runways and data processing that goes with it and 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 MoveHub initiative at Paris Saclay, which I will present in more detail, but there's also other things we're doing. VMUs is a solution where we offer to optimize travel around our and other also 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 long standing 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 Watway. That's an example of a smart road and of new features that can be built into infrastructure. I guess you've heard of Watway, the solar road. Since it was started about three years ago. We have now over 30 trial sites around the world in very different climates in North America, in Europe, in Japan, in Morocco, in the Indian Ocean. We are at the sixth version of Watway, so we're doing a lot of development to improve the product. We've also looked at various ways of using Watway. So some examples are given here. We can use it to power up street lights, 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 that for the moment, Watuay is a research project. It's not commercial yet. But we have the ambition of having a first commercial launch next year. We're in pretty advanced discussions with seven Eleven in Japan. That's a grocery chain. They would like us to install a Watway on their parking lots to power up their stores. We're talking several hundreds of sites, 300 sites over three years for 45,000 square meters of Watway. And this would be the first commercially viable example of using Watway. 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 Flowwell, an innovative solution for interactive, dynamic, day to day road network management. Flowwell 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. 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 twenty four seven. Okay. So the video is pretty self explanatory. But this innovation is really piggybacked on Watway. A lot of the technology in there is identical to Watway. Now what's important here and interesting is that since we start to look at this, the number of applications of flow oil is just growing. It's incredible what you can do with it. There are some obvious things that were presented. But I mean with this, you can eventually, we'll 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. So 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 ANIS, which is an acronym in French for acquire, digitize, analyze, inform and secure. Now what we do here is we put sensors in cars. We don't do it ourselves because we need a large number of cars, so we have major partners in the automotive industry. And these sensors collect data on geo localized data on the behavior of the car, its speed, acceleration, vibration, etcetera. And 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. And then we can, based on that, propose various solutions, changes infrastructure or maintenance solutions to help improve things. For example, add skid resistance to the surface. And then the authority to measure with the system if this has had a positive impact on the problem. So this is something we're driving pretty hard at the moment and for which we see a lot of potential. And then finally, an example of solutions we can provide to end users. MoveHub 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 five year long innovation partnership has two phases. First, a two 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. So what's in this for Colas? Well, we're already benefiting from the entirety of Watway and Flowwell. Especially Watway has created an enormous buzz that has reinforced our brand and our productivity as an employer. The mobility environment is changing very fast. We need to anticipate this and position ourselves in the value chain. We all 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. Now of course, all this will inevitably lead to new businesses for us, but it's also a defensive move. You might you can call us paranoid, but we don't want to be uberized. So we might be a traditional business that has been around for a while. I mean people have been building roads since the Roman Empire. But that doesn't mean that we're immune to the current megatrends 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 and A session now. Is that all? Yes. So it's time again for Q and A session. I heard that in the previous session, we missed one question about aggregates, so please feel free to ask it again. And for the rest, you've got many subjects on sustainable neighborhood, smart cities, smart road, smart mobility. Who's the first? Ah, maybe yes, aggregates is the one. We see in English, I guess. Up to you. We see increasingly many projects, a wave of projects, so it's really increasing massively. The granularity is very scattered. So it could be from a few millions to more than EUR100 million euros if you look at the size of the smart component. Now if you look at the SmartCC size, you get estimate, and this is where we need to be a little bit more precise. The range vary between $200,000,000,000 if you look at four to seven years range to $3,000,000,000,000 So to make it more explicit, dollars 200,000,000,000 will be more the telecom infrastructure, software and services to trillion dollars will be if you look at all the construction pull through, if you will, okay? So if you look at Forrester and Grand View and so on, they look more at least $2,000,000,000,000 So to make a long story short, the service component telecom infrastructure will be in the range of €2,000,000 to 100,000,000 plus. The total pull through, you can multiply usually by a 10 ratio, the potential pull through in a project. And then on if you look in the dynamic CAGR, if you look at compound average growth at four to seven years outlook, 2022, 2025, we're looking at between 1417%. Of course, you've got dozens of analysis, but this is roughly the right. So it's re exponential growth overall. PIERRE 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's because we want to be sure also to remain the single interface for the customer. One main risk for us is disintermediation, and it's 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 wasn't a construction company. But for us, we have to be remains a single interface because we don't want to be in a position of subcontractor. We want to maintain the global relationship with the final customer. Nicolas Cote Colisson from HSBC. Sorry, just for Paris. Eric. You, Nicolas. This is Eric Larnier from Wahgnion. I've got three questions. 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 queries, Gareth, sorry. GARY GARY Yes. I will come back on queries. I come back. So go straight the second it was historical normative margin target. But now that you develop you have new ambition in energies with better margin, I suspect suspected you would take the opportunities to increase this normative margin target is my first question. The second question on aggregates on these queries. Maybe you can share 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? And the last question on smartest cities and digital projects 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 review this 8% target? So we could group the first and the last. What is important in construction is the sustainability of the margin. So for us, all our activities has only one purpose, sustainability in term of margin. So what we speak about 3.5% is the idea to be around this amount on a year on year basis. And 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. So 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. So clearly, we don't say to you all these things will increase our margin, but we say to you all these elements will create a better sustainability in term of margin. And that's the only answer regarding margin. Thierry? For your question about the value of quarries, it really depends on the location of the quarries, the kind of rocks, so the markets are 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 €0.10 a tonne of reserve until €1 per tonne of reserve. And we usually take an average value about $0.60 to $0.70 a tonne of reserve. And if you remember, we have 3,000,000,000 tonne of authorized reserves and a potential of extra reserve about 2,000,000,000 tonnes. Yes. Nicolas de Couillissons from HSBC. How often can you combine Bouygues Construction, Bouygues Immobilier and Colas when you develop a smart city? And when it is the case, can you really extract a better margin for each business? Or is that just about more revenue in general? And I guess my question can be extended to the general approach of the group on cross business synergies, if any? Thank you. CHALENDAR:] So if you look at the way we every time we work with the boss, different company to answer RFP for a customer, this is for us a way to get the better answer from each partner. And 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, and this is the way we won Marseille, for example, La Fabrique. This is also with this partnership that we won 11 projects out of 55 in Rieux Manton Le Grand Paris this year. So 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. And if you combine both, when you've got if you look at the way, for example, Bouygues Immobilier works with Bouygues Construction, there is no automatic process to choose every time WIG construction to build everything they want. But it's a way for us to be sure that this is the right answer to this to the need to the customer need to be sure that we could win and get the right proposal for the final customer. And if you look at the way we operate, for example, with Bouygues Immersion Services, if you look at Dijon, for example, for Dijon, the right way to answer to the customer need was to integrate in Bug Energi Service, they integrate Objenious solution to be able to offer connectivity answer. And with this, they were able to get the best solution overall for the customer and to be in position to win. But it's more this way coming from the customer. I mean if we want to win something, we need to start from the customer need. And after this, we build the best answer. Every time we just try to come start from us to build something, we don't have the right solution for the customer. That is not the way we work. You. Sven Edelfelt, ODDO. You just answered the question for valuation reserve, but I had one follow-up on asphalt. One of your competitors has moved into the lime business in Europe. I understood it might move as well in the same direction in The U. S. So 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. Lime is a there's two two different type of limes, but the lime you're referring to is probably, lime that, sometimes is used as a by a replacement for cement cementuous. And we are a user of lime but very, very small tonnage. Just 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, Lyme is a product that comes from a quarry, and it's hydrogenate. And it's it's milled. It's very fine. Thank you for the license. It can replace up to 15% of cement powder in in Bidotel Okay. And you. We're good. We're good. Thank you. The goal was to educate the financial community to Australian's advantage. The last one, please. To come back Fred Blond 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? And on the telecom side, do you think you can extract a competitive advantage because you can leverage smart cities, etcetera, you can leverage the assets you have in construction to deliver the whole project, whereas telco competitors will have only a very smaller or small chunk of the value chain. So is this a differentiating factor at this stage? Thank you. So FRANCOIS actually, the competitive landscape has been changing dramatically in the last two to three years. It's changing by the week almost with the announcement by likes of Google, Amazon, Alibaba, SoftBank. But indeed, what we feel is really key is what you described in term value chain, is the breadth of the value chain. It's a breadth of 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 in the last ten years around smart cities. And then servicing, meaning understanding this is why Bouygues Energies and Services, all the service assets, including telecom assets are really key. And finally, of course, technology and whether it's Objenious, IoT, IEA, big data and since it was announced in July 3, five gs in Bouygues Telecom, we indeed feel we bring a lot of these assets together, both from the technology side and the usage understanding side. And that's a combination that will be key. It's not one or the other. You need to get both entangled and get the unleash the value from those. Okay. Merci. No, we stop now, and we continue with the last part of this Investor Day. Thank you, gentlemen. So you have seen that there is many, many change due to digitalization in our world. So now the last part of this day will be dedicated to the way we innovate and maintain our leadership in our three businesses through concrete example using digitalization and technology. After this session, there will be another Q and A session. Thank you. Christophe? Thank you, Olivier. So I am Christophe Lennard, 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. But 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 sixty hours instead of four hundred hours in conventional training. The blockchain then has a technology for storing and transmitting information transparently and securely. First application could be traceability of contract management as well as for the application relative to the self consumption of energy for the building. Big data and Internet of Things. In 2018, we have already more than 15,000,000,000 connected or connectable devices collecting datas, huge amount of data and 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. And 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 another view of the organization of innovation in the group. Obviously, the R and D teams of each business segments carried out results in all the major domains that impact the group. And with our dedicated teams located in San Francisco for renovation and Tokyo with Bouygues Asia, the group learned a great deal from the work and thinking of its technology intelligence units in U. S. R. And Asia. We draw on outside expertise, research centers, universities and think tanks to create new and innovative products and services. For example, with SmartTT Alliance and the Industrial Liaison Programme from MIT. Convinced that the returns of open innovation are beneficial, we launched investment funds in each business segment for acquiring minority stakes in start ups when the launch. And we also stimulate enhanced exchange with start ups to accelerate commercial partnership. The digital is obviously one of the element of the re evolution 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. And the last axis concerns our efforts to boost digital culture within the group. This approach is structured around a digital committee sponsored by Olivier Rousseau and Henri LeBouk. This committee is the digital governance body for the group. It brings together representatives 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 de Transformer made up of 30 members from all business segments that feeds the digital committee on use cases such as blockchain or intelligence artificial. But also the program Innovate as a Start Up, which brings together each season we just achieved the third season right now, about 50 participants attribute coming from all business segments. Using agile methods, they find solutions 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 files for six months, then return to the accident for possible acceleration. R and 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 these three categories in our business segments for Construction. I will go quickly because Marie Luz, Maude and Natalie will explain more in detail a few examples. For the improvement of productivity and performance, the EXO skeleton 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 Herve three d startup designer of the ExoSculatum was supported by Colas Seat Fund. For the improvement of productivity and performance sorry, the Colas Seymour application create a deal rate 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 terms of disruptive offers, the ELSAR project 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 Marilles Godineau. 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 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. Projects are growing bigger and more complex with the number of players who is increasing. In this context, we must better manage the complexity. First challenge is the challenge of digitalization. Without any doubt, digital will offer us a lot of opportunities. And 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. Not so long ago, building a world of harmony came with quite a few twists. Lengthy parts, accuracy, interpretations, misunderstandings, and sometimes surprises. But 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 three 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. Is really fine to collaborate on buildings and structures. But 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 light 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 wider internal standardization. That's why we are creating a digital platform for project management with two external partners, Dassault Systemes 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 event 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 project 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. And for this part, we began to collect this information ten years ago for traceability purpose. 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 eight 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 two days. And we wanted to have the capability to understand in which type of soil we were borrowing between two samples, because this information has a great impact of the best borrowing 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 hundreds of data like soil pressure, energy consumption, engine effort, and 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 gives accurate advices to the production crew to optimize borrowing parameters. And 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 sites and conclude it's really relevant. We're now about to deploy this tool. Thank you. Good morning, everyone. My name is Maude Gisel, and I am in charge of BIM BAICO, which means BIM by COLAS. And today, I will talk about how BIM is organized at COLAS. BIM Micro has six main missions. The first one, governance. BIM deployment at Colas is headed by BIM Micro team, which is composed of five people. And BIM Baiko 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 Cooks. Innovations. Within the BIM by Co unit, we also work on innovations related to BIM, such as virtual reality or augmented reality. A part of BIM by CO activity is devoted to BIM production in every field: building, civil engineering, infrastructure, railways. And 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 COLA's projects go through BIM BiCO. 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 Danke Refinery for which we received the 2018 Golden BIM Award. This is a big project: 95 hectares, more than 50 kilometers of underground pipes and the equivalent of five FM towers in terms of steel tonnage. The site 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. And for this project, we made two digital models from nearly 60,000 plants. 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 paraotechnical risk. For this project, we created an innovative geostatic interpolation tool to calculate the concentration of polluting agents at each point on-site. Then it generates a map of pollutant impacts, 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 clients can control interpolation calculations, generate 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. And the last, and I hope so, not the least. Good morning, everybody. I'm Nathalie Wattin, in charge of digital transformation for Bouygues Immobilier. So construction and property development are perhaps one of the last business affected by the digital revolution, as have been mass media, telecoms, banking or retail industry. But the acceleration is striking, as old speakers have explained before and as shown by the evolution of investment in the real estate for two years, dollars 3,000,000,000 raise in 2016, dollars 12,000,000,000 in 2017. And CAPMJ forecast expect €20,000,000,000 in 2020. So 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 estate, today in France and especially in the field of real estate, it is already more than 400 startups created, and this was a very fast acceleration these last four years. So new technology as big data, data, BIM platform, marketplace, virtual and augmented reality, robotics, artificial intelligence, drones, IoT, give us a large opportunity to transform our business and propose new services. So in this context, Bouygues Immobilier accelerates its digital transformation, and we have set three priorities. First of all, that I named ADDBUSINESS. This is to address new services and new business opportunities brought by new technologies. For example, Nextdoor, our subsidiary in coworking, is an example of new businesses. And 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. And I know, if I name it adexperience, that's because we decided to focus on increasing the customer and employee experiences. And 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 a point on and so on and so on. And 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. Well, in this example, I want to show you the importance of the data in property search. Instead of having our 130 property developers work through 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 of municipal council reports to catch the last decisions about urbanist changes to be quickly alerted of last evolutions that increase the constructability of lands. It's a way to better anticipate and predict the future evolution of a territory in terms of population growth and predict risk taking. So crossing different source of information is a meaning for us to identify quickly lands and enhance the value of them. Other important contribution of the data obviously concerns commercial prospections. And two examples about that. The first one is about the prospect prospectprospection. And as you know, 90% of our prospects come from the Internet. And often because they have seen, consciously or not, poster campaigns that show our operations. And 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. And the analysis of these data highlights zones of flu, 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 fourteen days to withdraw from their contract. And based on more than twenty 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 resident, the type of the program and so on. And these criteria allow to score clients and to adapt our strategic sales. So these last examples, Land Prospecting Your Customers Scoring, illustrate the efficiency actions that we have undertaken by cross checking data. Well, you know 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 apartments in three d. And 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. So 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 well realizing immediately the different effects and get the estimate of any additional options they wish to have. So today, we already have 7,500 housing units 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 digitalize regular updates dealing with appointments online appointments, of course chatbots, dealing with customer queries. And in order to go further and always better understand the uses, the expectation and the satisfaction of our clients after the delivery of their home, we'll launch digital visits. So 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, you know, this is the first and a recent test of artificial intelligence in the service of satisfaction of the clients. But 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 residents, as we have just seen before. And 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 apartments before applying for building permits, so 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. And today, more than 5,000 Bouygues Immobilier housing units are connected with Flexholm. They are able to control energy use by remote control, things like shelters, lights or locks. But later, why don't you just stay just outside the Flexholm stand? In the same way, aware of the importance of social bond, we set up a special social media app, Entre Boisin. And currently, in more than 50 residences, families can now discuss on Entre Boisin exchange services, place ads and reserve common shared areas, shared room, reception area and so on. But the best is to have a look at the video. Thank you very much. So finally, we'll cover all the topics we wanted to cover. Now a last session for Q and A about mainly this subject. Yes? Digitalization, new technology. Jacob Luzano from Credit Suisse. I had a question on BIM and or, I guess, broadly in your sort of digitization. Can you maybe just help us understand how you monetize it? So 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 WACHSLER how do you make money from it. Thank you. Keith Sujete. So 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. So it's really good for the management. It was explained in the short video and really good on the quality. And for this main reason, this is something we improved finally the cost of the building. But you have to keep in mind also that without the BIM, we weren't able to build the first pictures that Philippe Bonhoeff showed us, Morpheus, was something was 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 in this new utilization of the tools. All these technologies for us is, first, more business because as Olivier said just before, building as the Morpheus was absolutely impossible without this tool. So more business, less costly, but the construction remains competitive. So 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. But 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, really I gave you the normative before. So now it's you are convinced, I guess. Yes? So Nicolas Souhan from Morgan Stanley. Just to we understand that actually, BIM is not a differentiator. That's what you were saying. You can't differentiate No, no, no. We didn't say this. We say that. No, you give back everything to the client. No, It's clearly a difference because without that, you are not able to build certain type of projects, and you are less competitive. And if you are less competitive, you lose the project because construction is always on a tender or bid scheme. So obviously, it's a competitive advantage. What I say, it's impossible to sell with a higher price because you have the BIM. But you win because you have the BIM. As you win because we have aggregate and carriers in Colas, because we have 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. And you are you must you have to be the lowest bidder with the product fitted with the client requirements. And all these technologies and all these elements are able to do that. So obviously, it's key to have this type of competitive advantage. But 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. Understood. if when we win a project, we don't win it because we explain to the customer we've got we use BIM to make it. Especially when the customer forces it on you. So public clients now increasingly force BIM on all bidders. Everybody is on the same UNIDENTIFIED starting No, no, no, no, no. It's not true. There is real big difference between all the competitors by using this. As Marie just told you, we are the first one in France to use on such scale. And the way we make it our competitors are not yet able to make it as we do right now. So but what 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, but not customer. For I mean, a customer, Morpheus owner didn't choose us because we were using Bing. He chose us because we were telling that we were able to build it. And we were the only one accepting to take 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. And maybe to other things on technology. Maybe on the margin? No, sorry. It's a joke. No, no. Know it's never going over. No. But I mean, on three d printing and on modular, so on modular homes and industrialization of the process, which also maybe at one point will help the margin. What where are you? I mean, in yes, on In these two topics? Three d printing, as usual as we showed, we have some example of three d printing. It's now R and D project for now with some universities. But the project we made in Nantes was a real project with real people who are living there inside this building now. And 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 three d. And it's the same for industrialization. We think that and it was explained that the future is certainly increasing in terms of industrialization and standardization. And if you don't have BIM, you can't put in place such a strategy. So BIM is necessary to do that. It's not sufficient, but it's necessary. And we have some example we have in prototypes in these different directions. FRANCOIS And for the modular construction, if you look at what we did in Singapore, with the Canopy project, I think. We have several projects in Singapore using modular technology. We have a Canopy project, but also Clementi project, which is a high building with modular construction. We also have nursing home, which is a project for elderly people in modular construction. And Singapore is really a place where modular construction is really appreciated and we opened this way in Singapore, but also in some other country, we want to implement this technology. We have now a good experience in that. But for example, in Singapore, this is the highest tower built in modular construction, and we did it with our local subsidiary. And if I may, last point. On the smart cities and the small homes, what's really the acceptability of the clients, so either public clients or us, the end users for homes to pay more because at the end of the day, today costs more. So your local authority clients in roads, are these guys ready now to open up the purse and pay pay the extra premium at the beginning for cheaper long term life cycle spending? I mean, it's always about the price. But is there are we at the limit where these guys are going to start to open up and spend the money? Francois, do you want to answer? For residential users, it's very difficult to sell higher price if the usage is less expensive But in commercial buildings, office buildings, you we often sell at better price because the the the management of the building is lower. For example, our green office buildings with our geo energy buildings, the yield is higher when you say it and the rents are a little higher because the energy consumption is lower. So the I mean, when you are new at the consumption the energy consumption and the rent, the total is lower. And so it's important so for us, as we sell the rent and the yield, we can sell better. So 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. It start always with the professional use. And after this, we could spread it to the mass market. Do no other questions, so 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 ASEA 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 iron 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 cyclicality. 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 will try to 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. And 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 in with the change of scale in urban development, for example, from a building to a district. The evolution of our backlog over the past fifteen 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 and I hope that you have understand that better sustainability of margin over the long term and higher cash generation. And this is obviously an opportunity for us. Indeed, our positioning and strength brings us strong competitive advantage within that context. We are able to realize complex and sophisticated projects, thanks to more than sixty five 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 clients 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 of 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.

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