Earnings Call: H1 2021

Aug 25, 2021

Good evening. Thanks for being present today for the presentation of our half year results. Thanks especially to those who are present with us in this audience and those who follow remotely. We could not be very numerous in this audience. With us today, the ExCom members, Please allow me to introduce Cecile Camblier, who became Head of Concessions last spring. She started her career at Efrage in 2003 and then joined VINCI in 2008. She was leading previously the Societe Marseillais du Tunel Prado Carrenage and Prado Sud Companies are Efizer's shareholder of this company. Thank you, Cecile, for having accepted to leave Marseille, this marvelous area, to lead the portfolio of the concessions of the group. First half of twenty twenty one is back to growth after 2020 impacted by the health crisis. Supported by historic order book. The contracting record a revenue which is higher than 2019. Concessions go on being impacted by the limitations of the movements, but less than in 2020 given the upstart of economy. Globally speaking, in construction as well as in concessions. Our results are increasing over the half year. I suggest to go over the highlights of the half year before giving you the perspectives for in fiscal 2021. Christian Kasser will introduce the financial elements in detail. In contracting, the half year was highlighted by a dynamic order book. Even if it doesn't reach the first half of twenty twenty, where we have recorded, as you remember, 3 very important construction sites. This is proof of the upstart of construction. In France, Efrage Construction, together with Eiffage Energy System, won the last leg of the rebuilding project of the Panel institution of Beaumetz in Marseille for over €190,000,000 of euros Our teams won the tender for the implementation of a new building of 20 7,600 square meters of Dassault Systemes in Velizy. Since 2008, we have built already the four previous buildings. To be noted, development by Goye of an alternate concept of windows whose analysis of life cycle enables a reduction of the carbon footprint of the building. End of 2019, the government decided to streamline its park of 39 administration areas. Most of them wouldn't are not offering any more working conditions, satisfactory working conditions. In 2021, Efaz won 2 contracts in the framework of this program. First program that you see on screen for the renewal of the Administrative area of Colmar, including the renovation of 8 building, construction of a new building and the operation and maintenance for 8 years of all those. Those works will enable to save 70%, seven-0 percent of energy. We have been earmarked to lead the first leg of the rebuilding work of the administration city of Lyon in the core of La Pardieu neighborhood, including a building of offices and a building of apartments for €88,000,000 high environmental quality and we'll use bio sourced material. We already launched the works of the e sector of the village of athletes in Saint Trois, assembled with Paris. Projects will mobilize over 4,000 people will enable to welcome slightly more than 2,500 athletes in the summer of 'twenty four and as of 'twenty five, inhabitants of Saint-1. It has been designed to meet the environmental and social challenges through a Saving Construction System, Mixing Wood and Low Carbon Concrete, a smart energy steering and a solar energy with a storage of energy with cells. We'll leave a large room for vegetables to bring some freshness. We have a unique model of Contractor promoters, it's the teams of Efaj Construction that will build for Efaj Immobilier and all the promoters, constructors. The beginning of the year has been highlighted by the delivery of the Hyperion Tower in Bordeaux. The tower has been acknowledged by the government as industrial demonstrator for the sustainable city and was awarded the prize low carbon, residential low carbon. As an example for Many operations this operation of the E3, C2 level is really illustrating this low carbon strategy of the group. Hyperion over its life cycle will store 1400 tons of CO2, meaning a volume comparable to 9 years of energy consumed by a building of this size. Other operations are underway like a isolated with straw. Eiffelage a menagement was appointed for the tender of the urban design concession of L'Alier, Garde du Troiscomun in Les L'Heroes. In Belgium, our teams won the contract for the transformation of the train station of Grand Saint Pierre and the renewal of the tracks and the banks and appears for €86,000,000 for Efage. In Switzerland, Our teams launched the works of the apartment tower Artisa in Zurich. This 80 meter high tower and 26 stores We'll welcome 140 units as well as the restaurant and stores. In the property, reservations for units are reaching 2,194 Apartments, above the number of 2020, but below to the tune of 13% as compared to 2019. The decrease of property market in France is offset by the starting of several projects in such this activity that we created in Poland. I discussed that in the previous years. On screen, You see a building of 450 apartments in Warsaw sold as a whole to a northern investor. Our facade builder, Goye, signed a memorandum of understanding for the implementation of the 98,000 square meters of the facade of the V Link tower that will welcome the future headquarters of Total at Lab Defense. As you know, the group is committed on the program Grand Paris Express. We employ over 2,700 people on the various operations which were awarded to the group. Since the beginning of the year, we won several new contracts. We have been appointed laureate for the works of the station La Cornue, Sirut and Blomen Hill for an amount of €97,000,000 and we have been notified for the train station of Arduan and Arcoil. Together with Equans, We want 2 markets for the implementation of the ventilation, smoke and the compression of the Line 15 and the extension of Line 14 for a global amount of €56,000,000 As a reminder, this expertise, state of the art, enabled the same group to win in July 2020 a contract of the same kind for the Lines 1617. Outside of Paris, we were awarded as a group the works to increase the capacity of Joannes Cuvert embankment in the Port of Le Havre, which is due to welcome a manufacturer of wind turbines and blades. We have also won beginning of July one of the 2 major contracts with implementation of the base tunnel French side in the framework of the project railway tunnel Lyon Turano for a total amount of 1,000,000,000 €470,000,000 that is €660,000,000 for the group, namely more than 700 employees. Our civil engineering teams are working since 2014 and the implementation of recognition works in Savoy on over 12 kilometers. In Germany, we will build a new bridge in Leverkusen for a total amount of $180,000,000 namely $116,000,000 for Efage. Efraj Metal, with its implementation in Germany, Belgium and France, will build the future bridge twice 3 lanes that should double the capacity of the existing bridge, which is not sufficient enough. Through this project, Efaz participates to the program of improvement of the quality of the bridges in Germany. In Senegal and in Mauritania, Efaz goes on working on the Grand Tortue, our main projects for BP. Since July, 6 of the 21 concrete boxes, there's only 5 on the picture because the 6 has been launched yesterday. 33 meter high, that will be the breakwaters of the GNL terminal, were installed 10 kilometers from the coast between Muratane and Senegal, the building of the boxes mobilizes over 1500 people. In Djibouti, we launched the desalination factory of Dorali. It will feed 250,000 inhabitants in drinking water and sweet water, thanks to renewable energy. In the U. K, works go on, on HS2. As you may see, the groundwork started on the project. 15,000 freight trains will be used to transport 10,000,000 tons of granulates and they're being to reduce to the tune of 30,000 tonnes the release of carbon. On Roads, The activity hasn't reached the level of 2019, but one has to remind that this was then a pre election year, which is always favorable to strong volumes. However, The 1st month of 2021 showed a better traction of the shops, proximity shops. Always innovative, our teams developed BioClare, a coating which is ecological and aesthetic devoted to the improvement of the standard of life. 100% recyclable, this coating uses a vegetable ligand Instead of bitumen, it reduces the release of carbon by decreasing the temperature of of our fabrication. Bikelay was used in the area of Gironde on footpath and cycling path to create Freshness Island in Schools School Grounds. We restarted our works on the ring road of Paris, a large site on which our teams are working at night For over 20 years now, with an average yearly of 8,000 tons of coated, including 20% of our sound coating since 2013. Steel activities, Very intense on the offshore. In Germany, we worked together with Fabrikam for this electric substation of the wind farm offshore of Baltic Eagle, a structure of 7,150 tons similar to the one you see on the screen. This will be the largest station on the Baltic Sea and will provide renewable energy to 475,000 households. In France, we take part to the development of the wind farms offshore through several projects. Smulders and Fabrikon are building a substation of electrical transformation for the wind farm of Saint Briljeux. The substation total height of over 100 meters includes a jacket of 1630 tonnes and a topside structure of 3,400 tonnes. We implement the design and creating of monopiles and transition pieces of the 80 farms wind farms of Senesia, the linking by cables to the electric terminal. We build also the maintenance base of the park of Fican, and we are stakeholders in the pilot projects of floating offshore wind farms in the Gulf of the Line in Mediterranean Sea. For Energy Systems, the activity remains very dynamic in France as well as international level. The organization by markets implemented in the framework of the strategic plan is bearing fruits and enables its branch to go on its path of increase of activity and improvement of profitability To support the preparation of the decommissioning of Fessendheim Nuclear Power Plant, EDF asked us to work together with Endel and Omixa. Starting last March, the contract could go on until the and of the decommissioning of the power plant. 35,000 Sun panels have been installed for the sun farm of Aerosol in the Geneva in the land area, Southwest of France. Those Solar cells can also use the solar reflection from the ground. In Belgium, at the heart, in the core of Brussels, Efrage Energy System will light the Church Notre Dame de Laken. 4000 hours of work were needed to install more than 400 parts 100 percent LED. In Senegal, we implemented the project of Boucle de Ferlot, a 2 25 kilovolt line of 2 75 kilometers. The aim of the project is to develop the transportation network to secure the energy for the zones of Tuba and Jum in Senegal, increase the transit capacity to Dakar and improve the quality of service. We implement also 4 contracts of electrification in Benin and Ghana and the framework of a program of development of Africa. Sum total. On contracting, We could have feared a decrease of our activity, but the good traction of the Proximity shops, as we can see in the book of orders, is very reassuring. We are very, very watchful about the property. As you have seen, The request for public equipment, new or renewed, is very strong. We can hope and awareness raising by the government to facilitate the property because the request for housing is very important. Even it's not being felt as of today, the recovery plans of the various European countries will be an element in support as well as the activity generated by the major sites. They enabled the order book to remain at a high level while not integrating yet the EUR 660,000,000 of our share in the Lyon Turin Railroad. You have noted our very important positioning on all of the renewable energy. Wind farms, Terrestrial with the masts, Offshore with the foundations, transition pieces and substations. Sunfarms, where the French and Spanish teams are recognized for the construction of the wind farms, we ensure also the maintenance for 5 to 20 years. Hydraulic, with the works and operations of micro PowerPoints for IFRS concession. In Renewable Energies, our subsidiaries works implement €800,000,000 of activity, €800,000,000 All this enabled us to get back faster than foreseen to the level of activities we had in 2019. In the concessions, we go on diversifying our portfolio on territories where we are implemented implanted located. We acquired 2 new hydroelectric power points on the Taron, enabling us to increase our portfolio of assets in the micro power points power stations that we started in 2019 with the acquisition of 8 micro power points. We Installed also sunfarms on the unused parts of adjusted lens to the motorways. The widening and net to standards of the motorways of our National Road 79 are in the full peak of production with a presentation on-site of all of our businesses business lines, mobilizing over 1300 people. The site was sped up during the summer, all along the 88 kilometers of the projects to be implemented by the second half of twenty twenty two. The bridge of Aliyah, the most iconic A part of the site is moving quickly. On the roads, half of the quotas have been implemented 25 kilometers, we're open to traffic at the beginning of the year. After 3 years of works, We implemented the new turnpike of Mont Maro at the core of Vallier, totally financed by APRR. This infrastructure enables to fluidify the circulation, the traffic and to increase the security of the clients on the A71, totally connected now to the A79. Beyond those elements, we have already noticed an upturn of the circulation during June. I am pleased to confirm that the summer traffic has even went above the one of 2019 2020. But Philippe will give you more details answering your questions. After the summary of the highlights, contracting concessions, allow me to get back to the low carbon strategy of the group I present in details during the annual results of 2020. According to our commitments, we have published this year our second climate report. We stated our commitment to go on with the 1.5 strategy adopted by the Paris Agreement, committing ourselves to reducing by 2,030 at least 40% of our gas release compared to year 2019. Efaz committed to reach the carbon neutrality by 2,050. As you have seen previously in my presentation, with our partners, we put forward action plans of offering of low carbon offers in all the business lines of the group, so our clients can hold their commitments too. Among the various actions, let's remind our participation announced June in the third Fonds, Bois and Eco Matrayo of BPI France in the framework of the support of the French line of business in this kind of development. The success of the group is linked to the consistency of all the employees through strong values for over 30 years. We are all collectively committed in the success of the group through the salary shareholding. This year, all the indexes are in progression with 73% of the employees who subscribed, which is the token of a major trust of our employees and their company. I cannot conclude this Overview without our pride and supporting since 2015 high level athletes, franchise leads. 5 of them were at the summer in Tokyo. On these pictures, you recognize Clarisse Abgeignenu, Gold Medal in Judo individuals by teams, Hermandine Bouchard, Silver Medal in Judo Valentin Belo, Penn Flatland Gabriel Bordier, athletic walk and Manon Valentino, BMX. I'm not forgetting the Belgium Male Team of HOKA, supported by our activities in Belgium, who won the Golden Medal. After this summary of our highlights of the year, Let's get back to the major figures of the half year. Return to growth of the revenue, Very strong increase to the tune of 25.8 percent, the first half year twenty twenty being impacted by the containment in France, like in the major countries where we are located. Even more important, we are growing by 1.9% compared to 2019. The operational result that is of €679,000,000 with the contribution of the contracting slightly above 2019. It's a very good news. The concessions remains impacted by the limitations of the moves. This leads to an increase of the net share of the group result to EUR 260,000,000 close to its level of 2019 than to the one abnormally low in 2020. The debt net is at €10,200,000,000 so a very important decrease of €700,000,000 thanks to a good cash flow of the group. And the book of order maintains itself at a very high level. The order intake is more solid than expected. As you will notice by turning on your phones, we have We have decided to exert our right of preemption on the 35% of the capital of the motorway A65 between Po and Langan, which were held by Sanef, co shareholder of Efraige. We are in discussion for the acquisition of Sanef AquiPen, detained 100% by Sannev. Once finalized, those transactions will make Efaz the only shareholder of the motorway A65. Due to those elements, we anticipate an activity of are contracting in a significant rise compared to 2020, slightly above 2019, and activity of concession still impacted by the limitation of the moves but less than in 2020 and group results in sensitive of Greece. Thank you for your attention, and I leave the floor to Christian for in detail financial elements. Good afternoon, good evening, everyone. Let us go through the numbers again. Revenue, as was just pointed out, was significantly up compared to H1 2020, up 25.8%, almost 28% in Contracting, you can see that in France, the bounce back is Twice as high as the rest of the world, plus 3% commitment with 16%. That's because, of course, in 2020, everything ground to a halt. Let's look at the next charts using 2019 as references to see just how back to normal we are. The good news is that We revenues up 1.9% compared to 2019, up 3.8% in contracting. You have to remember that there were 2 years of strong growth, both in 2019 2018. And so the Basis of comparison was high, and yet we are up 3.8% compared to that. Concession is still suffering because, of course, people are not allowed to move about so much. And so here, we're still looking at a decline, 7.3% decline in revenue. In contracting, infrastructure and energy have had a very dynamic half year. Construction is slightly down. On the right hand side, you can see that business in France has been buoyed, up 4.3%, Even though there were no significant acquisition, any external growth. In the 3 countries that generate In pro form a, upwards of €1,000,000,000 in revenue. Germany has enjoyed a 26% growth compared to 2019. Spain is up 16% and Belgium 7%, up. So again, a good momentum in 3 sorry, in 3 Flagship countries. Operating profit is, well, understandably High up compared to 2020. The good news is that contracting I have displayed a profit margin slightly better than 2019 And an additional €13,000,000 in profit. Concessions is still below 2019 even though well, Because we didn't have, of course, the negative contribution of airports. All in all, operating profit is the margin is 7.8% versus 19 9.8% in 2019 and 3.8% in 2020. So here, we have the breakdown branch by branch. We're still using 2019 as a comparison. In construction, most of the business is done Internationally, mostly in Poland, at the beginning of the year, we've seen a resumption of growth that should continue in 2020. There is a slight growth in France where we had some significant businesses in Commercial property and public buildings, and that is doing rather well, whereas residential It is down. Reservation for property development is slightly down, down 13% compared to 2019, but it's minus 30% in France And that is in line with the contraction of the market. But you have to compare this with Poland, where you had 500 reservations or 100% Of all the properties were actually pre sold. Operating profit From current operation in property development, it's €29,000,000 compared with €39,000,000 in 2019. In 2019, there was capital gain because of the So sale of an office building, operating profit Operating margin is back at 3.4%, so in line with 2019. But there's a lesser contribution of property development And an improvement a €10,000,000 improvement in profits from building operations. There's Extension of the public baths in Strasbourg, and that is modernizing this listed monument. You can see nice pictures. The Rotonda, the Roman Bath work is well underway and it will be completed in November. In Infrastructure, Revenue has been pulled, thanks to civil engineering in France, in particular Grand Paris Express. That was 370,000,000 euros in the half year compared with EUR 313,000,000 in 2019 and EUR 300,000,000 in 2020. And the growth in metals Because of the project in San Nazaa, there is a Wind farm being built there and in roads, there's a slight decline, but that's because there was a high comparison basis in 2019. In 2019, of course, there are municipal elections in 2019. We see that there are new businesses where we are bidding, Which was not the case a year ago. You have, in particular, some businesses in for local authorities around the country. Internationally, we've got a positive momentum in Germany with work on the motorway A3 In the U. K, again, the building of the high speed railway track, HS2 is, of course, gaining grounds. Profit margin at the beginning of the year is not representative of the figure for the whole year. Here, you can see that Efage will be building the A pedestrian bridge linking the island of Sunnay to the village of Hafiz for the Olympics. This is a bridge made of Concrete and Steel. And so that it's 140 meters long, 16 meter wide and that will bring together Efage Geni Civil Engineering and Efage Metal for the structure. It's worth EUR 26,000,000 should be completed in March 2023. Energy Systems has enjoyed significant growth, up 7% Without external growth, there's got just good momentum both in France, up 5.4% and internationally, 10.6 And in France, Efage Energy Systems has been involved in most of the projects for building the railway stations of Grand Paris So Concessions PPP being completed. We're also in a good position for renewable energies. There are quite a few Projects in France and in Spain. In Spain, our business is up 30% compared to 2019. In Germany, it's up 16% and both in that's in both countries only organic growth. In Germany, we have Been developing a new business, electricity distribution, and we were we had no Presence in Germany before that, but we are building on Ethage Energy's expertise. Operating margin for the half year is Up compared to 2019, homogeneously in France I mean and in the rest of the world. I did not mention the activities outside Europe. This is in Benin, in Africa. We're building a solar plant, a solar farm. This we also have a high tension connection linking it to the grid And that is financed funded by the EU, the French Development Agency and SBE. Regarding APRR, so the motor works in session, Because traffic was down 7%, especially with the 3rd lockdown, we had, of course, less business, also less business from ski stations. But traffic has improved in the since the beginning of May, and we're close now to the levels of 20 EBITDA margin actually was able to stand its ground compared to 2019, Even though there was a 17% decline in traffic, but of course, we kept expenditure well under control. And so the performance is still Rather good. Let me look at a new line of business. This is a low carbon business So APRR, we are providing charging stations for electric cars. This is these are being rolled out at a sustained rate. We have now a number of high power charging points. We have we propose to have all of the Service stations equipped with these by 2022. We have also what is known as the key we pass for electric cars, which is which will Enable cars to have access to as many as 35,000 charging points in France and 90,000 in Europe. We look at the revenue for other businesses. We have the Milo Viaduct Down 14.9 percent, the A65 down 18.1%. But for the Senegal motorway, We're looking at an increase in traffic, up 8%. Airports, of course, have been suffering considerably Because there hasn't well, there has been some resumption of traffic, but we are far cry from the levels of 2019. Let's look at PPP's revenue, €83,000,000 That, of course, does not suffer from ups and downs in traffic. And on the bottom right corner, you can see the Operating profit of concessions, the losses in airports does include goodwill amortization to the tune of €16,000,000 for The half year. So a few words about BPL. Here, we're trying to avoid animals being hit by trains. And so we have These protections are for railway crossings, so we cannot have fences there. And what we've done there is a sort of A rubber crossing with rubber spikes that should stop animals from crossing the tracks. So much for the numbers. Let's look now at other Income and expenditure, EUR 14,000,000. So that's a net charge, EUR 14,000,000 charge. The cost of net financial debt is down, down only EUR 5,000,000 compared to previous years, but still down. That includes the additional financial charge for the bond that was issued in June 2020. But financial costs for concessions is as much as as high as EUR 9,000,000. So there's EUR 9,000,000 savings right there. For other Financial income and expenditure, we have EUR 5,000,000 funding from non consolidated Stakes, that is where we companies where we have a stake. And then the tax is down because we had a positive outcome in a dispute to the tune of €16,000,000 but not including this. We are close to the usual level of taxation. And so the net profit group share stands at EUR 260,000,000. If we look at the debt position now, you can see the transition from 1 year to the next. You can see that EBITDA well, We wanted to look at the numbers of both 2019 2020. EBITDA is close to the level of 2019, EUR 1,287,000,000 compared to EUR 1,338,000,000. Change in working capital requirements, Of course, it's higher than in 2020, but it's still below the level of 2019, EUR 518,000,000 even though the construction business is higher than in 2019. So that's good news. Taxes and interest is down compared to both 2019 And 2020. And so if you add them all at the 3 boxes, you have EUR 525,000,000 compared to EUR 287,000,000 in H1 2019. So operating cash flow is positive. Operating CapEx, €216,000,000 close to 2020, slightly higher than 2019. For the concessions, This includes EUR 200,000,000 for APRR. That's The second item of capital expenditure, EUR 130,000,000 for the building of the new motorway, A79, compared €71,000,000 in 2020 for the same period. And then the next item is Reimbursement of PPP debt. And so that includes lease, the rentals and the fact that we well, we sold an office building as part of the partnership for Stade for the Pierre Marois Stadium. So all in all, we have net CapEx at €536,000,000 So this is higher In both 2019 2020, well, that's mostly because of the building of the A79 motorway and that is, of course, a growth This is a factor of growth for the company. So you can see that free cash flow on the one hand is just about Breakeven, normally, we're in the red at this time of the year. Last year In 2019, we were we stood at €135,000,000 minus €135,000,000 So that means cash flow is looking very good. Finally, capital operations. And so we have the dividend that was paid out by APAR to its minority shareholder. The dividend paid by Efaj in 2021, that's because to make up for the previous year. There's capital increase for employees and Share buybacks and then that there's the shares being canceled when they will be bought back. And so the net debt at early June is up only EUR 345,000,000 to €10,200,000,000 which is rather low considering the significant increase in business. Now you can see that debt was down EUR 700,000,000 over 12 months. On the red part of the box, you can see that You have a high cash position for the holding company. The gross cash position is EUR 2,900,000,000 And you have the details on Page 40. So cash is up EUR 350,000,000 over 12 months even though we paid out a higher dividend. And of course, there was, as I said, a significant amount of capital expenditure for €879,000,000 And so we've been keeping our debt well under control. So Our order book stands at EUR 16,600,000,000 which is still high, as Benoit pointed out, even though no major contracts entered the order book. If you look at the various businesses, we have an increase in Construction and Energy Systems for core businesses. In infrastructure, We've been consuming the order book, the big operations of Grand Paris Express, the A79, the HS2 and A3 in Germany Without equivalent orders, but in our core business, the business is still stable. So the order book is only down 3% over 1 year, which is perfectly acceptable. We will now take questions. We'll have questions from the audience right here and then online, starting with the questions in French, Jean Christophe Lefebvre, Moulenc. Jean Christophe Lefebvre, Moulenc. We have 2 questions. 1, a strategic question And a question about concessions, a strategic question. We've talked about Equance and Fabricom. Benoit mentioned them Three times. So are you going to is the merger with EK France Coming any closer, is Efage going it alone or with partners? That was question number 1. 2nd question about Concession, that's a standard question. But could we have the capital expenditure budget for 2021, 2022 for the A79 and APRR and also the budget for PPPs. Regarding Egg France. You should note that This is part of the group's strategy. In February 2017, we gave you the outline of the strategic plan. In 2019, we gave you a progress report. You may remember that I referred to the group's Development, but we're looking on the right balance between contracting and concessions. We wanted to pursue Efage development on both fronts, both contracting and concessions. It should be pointed out that we are fundamentally European, our concessions well. There's a political risk for concession. So we are very much committed to those territories where we do have an active presence, and that does include contracting. And on contracting proper, there are a number of items where we decided that we should focus on our, Well, core region. And so because, of course, that is what makes the Business viable that is having the right people and that business can be Attractive if we can promote if we can propose a long term perspective for the business, that will attract The best people. So that's one thing. And then so we don't propose to branch out into To many different businesses, but of course, the energy transition and the digital transition does mean that both our all our businesses will necessarily change over time. Now when we were asked about Possible acquisitions of contracting companies that is you have to know that Mergers in this business never really work out internationally because what you do need to have is a common base of values, a common cultural base. Now Equinox, well, 86% of its business in Europe, it's mostly In the energy business, and most of the business is in France, Equin's activities are mostly in France, Belgium, the Netherlands, Switzerland. And of course, Efaj is already very much present in this country. So And these are businesses at the core of the energy and the digital transition. So of course, It stands to reason that we should look into Equants as a possible target. So that's part of our strategic development plan. Indeed, a number of developments have occurred in concessions. We have increased APRs capital. We had a Stake in Gatling. There is APV. We have been investing in the A79, so that is, of course, a Significant investment in the future. And we are now acquiring 100% of Alenor, the A65 operating company. So we do believe that We will forge ahead. And indeed, Equance is still very much in the picture. Having said all that, We believe that there you have a A significant operation. There are the stakes are high, but I think we can take this Using our own resources, but of course, we have to work with our teams. This is not an easy matter. Taking on board Another company is not easy, but we have to make a move. ENGIE is expecting us to make an offer by September. That was question number 1, Tristan. On question number 2, on APRR, we said that we would be investing €400,000,000 both in 2021 2020. I beg your pardon. €450,000,000,000 That's what we announced. We announced EUR 450,000,000 EUR 350,000,000. So in fact, it will be EUR 404,000,000,000. So we'll be investing somewhat less Then announced for this year, but somewhat more next year. Regarding the A79, we still propose to I have about EUR 340,000,000 in contracting, The balance being about EUR 100,000,000. If you look at the existing facilities, we have EUR 100,000,000 in CapEx for Projects being built and the PPPs now in operation. So that is about EUR 100,000,000 in CapEx. Thank you. Further questions from the audience? Yes. Eric, La Marie, I have 3 questions, if I may, about the growth in revenue for Contracting in H1, are we basically looking at a volume effect? Or is there a price effect as well? That's on revenue. On road work in France, well, the Business is looking better. Have you found price pressure? Or do you believe that competition is, as it were, It's healthy or is it getting out of control with too much pressure on price? And what about Road traffic, do you have any numbers for the past few months on that? Regarding question number 1, the growth in revenue, it's not just volume. Well, of course, you do have a volume effect, but there are price effects. Part of our revenue is index linked. And so necessarily, there will well, there will be a mechanical increase because of that. And of Since 2019, there have been significant increases in it just as well because, of course, we have to be able to take on board price inflation in raw materials and such like and be in a position to pass on that cost to our customers. But another point is that demand is high. Indeed, one of our concerns has been To make sure that before we can bid for a project, we have to be able to pull it through. Should we be selected, That is a concern. That was question number 1. Question number 2 regarding price pressure, Competitive pressure as well. We could go around our businesses, but by and large, There hasn't been any fundamental change. Business is pretty much the same, at least. The competition scene is pretty much The same. There are areas where we have to be to watch developments very carefully. I mentioned raw materials, But there are no particular concerns, and we believe that The market is still pretty buoyant even though we have to be careful and I'll pay a close look at issues of profitability, but Philippe can give you details about Question number 3 on road traffic figures. Well, this summer, road traffic was pretty high on the APRR Motorway network compared to 2019, that is the pre COVID baseline, in July, we've We've seen growth to the tune of about 6% compared to July 2019, indeed slightly upwards of 6%. August well, we're still in August, but we're looking at about a 5% growth compared to 2019, Again, slightly upwards of 5%. We'll give you the final figures at the end of the month. Question is regarding trucks and We're looking at numbers for July August in line with the numbers of 2019 For the heavy goods vehicles, the HGVs, of course. Eric Lemarie. If I may, Follow-up question. Could we have your view on property development, The outlook for this year and next year, should there be a deal on equants? I mean, are there red lines? I mean, regarding things such as debt over EBITDA, just how much You could how much money can you put on the table should you decide to make a move and acquire Equants? Maybe Olivier can give you an answer to that. Regarding residential property, one thing is for sure, as soon as we put something in the market, it is Grabbed and sold. The real concern is getting building permits. The French government is aware of this. And indeed, Francois Repsolen is now chairing a special committee looking into these issues of delivery of building permits and the report should be completed by September. Having said that, residential property development is not going to turn around overnight, but there are a number Of commercial property developments, which will sort of make up for the decline in residential property development. We also have a business in rehabilitating buildings. And of course, we have this good business going on in Poland. So even though there may be a slight decline right now in France overall, I'm very confident. Regarding Equance, well, one thing is for sure. We will not increase capital in order to acquire Equance. The financial package is part of our own competitiveness. And so I cannot Give you details about the bidding, but one thing is important is to keep both a good Gross cash position and our overall position, not just for the holding company, all these items, of course, are significant, but I cannot give you more details. Of course, all the bidding process is highly confidential. Well, I didn't escape you that there are some sites in the U. K. And the Benelux that are really raising issues. I suggest that more than the commitments that were made with the unions. I think those little hurdles will be taken into account for the prices of Lafarge. It's the base principle when you have something, we'll look into it and given that we decide. I try to reframe why it was natural for us to look into it, its interest and then we'll be aware about this intrinsic quality to see how we progress. Maybe we can move to the questions over the phone in French first. Hello, good evening, Benoit, Christian. Three questions. First, about I think you're much more confident that you were in the past month and the possible impact on the margins on the contracting margins. What has changed and your vision of those risks? 2nd question about the Grand Paris and the news information we had about the delays. Can you confirm the impact it might have on Efage? Especially, can you confirm that the extra costs will be attached to the company of the Grand Paris? And third question, if ever Equant would not come out, what would be the other opportunity of external growth that you could consider and which would be of interest to you. Thank you. On your first question regarding the impacts, Obviously, on the provisions, We were worried half a year ago because we see that after the crisis, the procurement chains were not working, and it was worrying. And behaviors that were not very rational on sudden increases in the prices on wood, for instance, in a very significant way without first notice. Half a year later, we remain very vigilant, very aware that no construction sites were stopped for a procurement system or procurement issue. Teams are mobilized. Think ahead of time. We have a dialogue with our providers to avoid negative impacts. And 6 months have elapsed and Things didn't go too bad. It's very unrational. The issue was on the Equipment, someday on something different, another day. We have to notice that the flows are not back to normal, but it's been half year that we operate without a major impact on our activities. So we're less worried, less concerned, but we remain very aware, very vigilant. The profitability of the works, sum total, the Demand on next door shop was more important than expected in our property where there's more volume, it's easier. Greater Perry, Guillaume, please be kind to him. It's his birthday today. Hello. I hope I'll be able to answer the question on the Grand Paris Greater Paris. They redefined their schedule, especially on Lines 1516. Delay of 2 years on the civil engineering, which we're committed, 15 South since 2017 Line 16 since 2018 and 14, where do we are now. The tunnel borer are out On 15, 2 internal borrowers are out and 16, 2 third are being bored. We had some delays on the schedule due to the COVID. The Society of Grand Paris mentioned those problems of borrowing due to COVID when you had to remobilize the various German teams in spring 2020 couldn't come to France, to Paris. As you know, The two other elements that were put forward by Grand Paris is the necessity to start total lines and beyond the system and the capacity to mobilize also the operator so that the implementation, the commissioning was being done nominally and the Greater Paris has recalculated and worked a lot on this issue. So it goes beyond civil engineering. And second element, it's the need That was made even more crucial to make sure that the works would be done in densely populated areas and should be accepted by most of the population. This has been integrated in the schedules so as to answer your question. And to get back about civil engineering, are there financial impacts? As of today, discussions for the impact of the COVID we had with the Society of Grand Paris. Negotiations are on. We're still negotiating, still discussing in the correct manner, and I think we should really have a proper outcome as it has been done until now. Thank you, Guillaume. You can make comments on procurement and inflation. Last question was regarding Aquant and the possible other opportunities. As we said, a year ago before the strategic review of ENGIE, we wouldn't Imagine that Equant was on sale and the strategy of Ephas was already implemented. I think that we will remain focused in our will to develop works like concessions rather in a European framework because it's exactly what is the the right scale for us, and we have a lot to do. In a certain amount of business lines, especially on the energy line. We have an activity in Germany that remains very low compared to what we do in the other business lines. If you take Belgium, where we are one of the major actors of contracting in Belgium, the energy part of Belgium is relatively low compared to all what we do in the other business lines. So we have a lot on our hands to go on densifying our presence and progress. It wouldn't be with operations of this size, but many things are to be done in the concentration of the market to develop our works, not forgetting our concessions, obviously, on those territories. Next question. Yes? Nabil Hammad, Barclays. Good evening. Three questions. A65 Motorway. It's been a long time you have a majority of shares beyond this participation of 35%. Why did you make this decision now? Are there things that made it mandatory to be done now? 2nd question. Can you update us on the second part of your activity? 1 of your competitors talked about a mini investment plan on the motorways and there was a discussion with the government. Do you have any information about that. Thank you, Nabil. On your first question regarding motorway 865, it's simply that the co share Holder became selling. There was a decision, Navatist, to sell their minority participation. They understood that we would not sell our majority share, so they were interested in selling the minority share. What was important to us was to take hold of the operational society. And it's simply the fact that there was suddenly someone to sell because they were talking about that quite a long time. It was the first time that they really decided to make an arbitration on this asset. On the Energy Systems line, we are at half year. We do not despair to have margins in full year that would be above the ascented. I always considered that there was no reason When a line of business is working well, why shouldn't we reach the 5% of profitability? It's not 4, 4.5, but it's 5, and this is the target. About the government, Philippe? Yes. I alluded to this issue last February. We are indeed discussing with the services of the transport ministry for the building of a new investment plan, Smaller than what we thought at the origin, this investment plan would have a large part of the decarbonated part and to the environmental investments. The scope and the volume of the plan are being discussed for the time being before the ART would be are questioned and before the State Council and a decision by the end of the Q1 end of Q1 2022. No more questions French, however. We have one question that has been recorded from Nicolas Mora, Morgan Stanley. Yes, I'll do it in French rather. First, contracting margin. Beginning of May, you surprised the market with an announcement. And suddenly, you announced a margin which is better and this line of business than in the past month. With your volumes, Can we dream about a resumption of the margins following several difficult years. 2nd point, the results are good. One negative point from my point of view is the lack of progression in the infrastructures. Your neighbors Came out with very strong margins. And the roads, what prevents you on the infrastructure margin less than 1%, even negative. So last point, on sessions, The Lille Stadium, the property Around Lille, you've pocketed EUR 80,000,000 in term of the gain of the boost. I wanted to know if this is the size of the or the envelope of the budgets. Now on the last point, Nicolas, we usually have a Repayment of BVP of €30,000,000 we have €90,000,000 this year, so 16 session. We communicated on the session of the sale of the building inhabited by Orange. There's a capital gain but much smaller than what you say. Is the total flow of session, 35 in normative? Very good. Rhodes, Laurent, recommend. Good evening. A short comment on what has been said, especially on the announcement that were made by Vinci. And Vinci tells about the outcome. He talks about the Eurovia World results. We are very Franco French, so The figures cannot be compared. This being said, regarding the activity on the first half year, as being said, We have an activity that is slightly decreasing compared to 2019, which was not really expected at the beginning of the year. We thought to have a first half of the year rather weak and a stronger second half of the year, but we're surprised by the level of the activities and the orders, The major operations, I mean, major operations, all the electric train have not resumed yet. The 4th project has been acted. We are really on the run of the mill, and it has answered or went over our expectations. We have an order intake, which is rather good, and an activity which is according to what we had at the first half year with a profitability, which is equivalent, so to speak. This is my short comment on the outcome of Road. Thank you, Laurent. There's something else that is Important to be said, 2 elements. We always told you that we were very cautious on the recognition on the margins of the sites of Grand Paris Express. This part of the very large works is very important for Efage, and we'll manage them at 0. So it has an impact, a direct impact on the profitability of the line of business, even if it's not the margins that are expected when we'll be through. And we will be through all the risks of operation. And like Laurent said, our scope of growth is 100% French, so the effects are different. I can confirm there is no return to good fortune as compared to the past. It's the operation the way it is happening day after day for the infrastructure line of business. Your first question is on the contracting. 1.5 years ago, you had a lighter question. You asked if you could expect The margin of the construction go back come back? My answer was yes. On a much more ambitious question of today, I'll tell you that we have a large awareness about the order intake. We See this about the stable revenue and this awareness will bear fruit. We are very focused on our structural expenses, and we have a work on our productivity. All this put together should make it that we should progress. Also the raw materials. Raw materials, as Benoit said, for the time being, it's managed day after day on the sites, on the construction sites. Some of our markets are on indexed prices, set prices. Globally speaking, it will offset the rise of the raw materials. What we wouldn't talk about is the lack of talents and of manpower, which Appears to be a real issue. Efaz has a very good image, but this is an issue of worry and concern that will not be over tomorrow morning or overnight. Are there risks contracting Energy System? Is there a risk to see a rebound on the increase of the salaries? Are those things you take into account already? Is it anticipated in your tenders? Yes, we are very aware about that. The inflation of the prices of raw materials and the impact of the cost of manpower, of staff. There is a non negligible element in the energy system. We are on a domination of short term contracts. So the update of the pricing is done very quickly, and it helps us a lot. The real issue today is not I mean, not to take too much activity and not to be able to put up the right teams. Whether it's our own teams or whether it's subcontractors, it's not the same thing. And we have to be very selective, added to the fact that the customers are our customers for quite a long time, which is wish asked to serve them with the same quality of service. So we have to be very aware. And the intrinsic growth would be more important if we had more staff today. It's rather good news, and we focus more on high added value offers, which are relutive. Super, one last for crucial about the acquisition of the 35% of the A-thirty five motorway. EUR 222,000,000 It's above what we had in mind what I had in mind. What does it mean for you in terms of acquisition? What's the level of assumption? How do you think to have a return on investment about this acquisition? You know the asset. Are there opportunities to improve the profitability because the entrance ticket seems very high. You have to have in mind that the global price is the price of the asset and the price of the operator. You had in mind the price of the asset. It's an aggregated value for the operator. You have to keep in mind that the operator was 100% held by Sanif and had its operational margin that was good quality, let's say. And today, when we take the margin of the asset and the margin of the operator, we aim at a little small 10%, something which is reasonable, slightly below 10%, to give you a good idea of what we're thinking of. Thank you. With optimization and the work that will be done by the teams of Philips, which shall neutralize the means and optimize the structure. We will take another question from the line of Gregory Brookshis from UBS. Please go ahead. Hi, can you hear me? Yes. Excellent. Thank you. Two questions. Maybe can I just be clear on the A65, what you just said there? What did you mean? Or maybe putting the question Differently. Obviously, we don't see exact numbers, but if you could give us sort of maybe the 2019 EBITDA margin Of the asset and how that changes with the in sourcing, I guess, or the buyout of the operator, if that makes sense. That's first thing. The second question is on contracting margins. Can I just be clear what you're actually saying for this year, So for 2021, I think you previously said your margins will still be a bit below the 2019 level? Is that still the case today? Or are you increasing that guidance? I think I heard you say Energy Systems 5% this year. Correct me if I'm wrong. So I'll leave it there. Those are my two questions. Thank you. Concerning the A65, what we just said is that if you combine The acquisition of the 35% of the assets together with the acquisition of 100% Of the maintaining an operating company, we believe that the target here will be close to 10. On the contracting, we have no idea about the margin. We have no ideas about the margins. We had an idea about the volumes. We're aiming at the level of activity, Revenue is slightly below or close to 2019. What we say today will be slightly above 2019 on the activity. Our margins are improving, but the margins are weak. We would talk about the global outcome that we'll be raising, and we confirm the guidance we gave at the first half year. The only thing that changes the volume of activity in works contracting, which is slightly above the one of 2019. Does that answer your question? Okay. So you're are you Can you give us some indication whether you think you can recover to the 2019 margins or you don't want to commit to that? At this period of the year, we'll try to get back to the margins of 2019, but it's too early to give a guidance. You see that the difference is 10 basis number We'll have the increase of a result in contracting and in concession. Okay. Thank you. You have a good trend given the outcome of the quarter of the half year, sorry. Okay. Thank you. The next question from the line of Tobias Werner from Stifel. Yes. Thank you for taking the questions. Two questions, if I may. Number 1, Let me ask the question slightly differently about margins for the contracting side, I. E. Construction and Infrastructure in particular. Do you feel that in the first half you've seen an abnormal effect in terms of normalization or In other words, catch up. On top of that, actually, when you look back at 2019 in the first half, your order book looked weaker than it looks today. So why are you so conservative on the margin side with regards to the full year? What sort of costs could be in there over and above the costs which were discussed, labor and And input costs or raw material costs or building materials, whatever you want to call them, which could hold your confidence back? That's the first question. The second question is about the EBITDA margin at the APR. It's not a big difference to what we expected around it, but it's still a difference in In terms of the outcome, you achieved a good margin, but we would have expected a little bit more on a drop through of 80% to 90% of Top line. Is there anything in there on a one off basis we should be aware of or Any other costs which we should be aware of where we simply wrong? I think in general pardon, Dominions General By and large, for these two questions, There's no specific issue. There are no particular one off effects. As we saw it for APRR, the EBITDA margin proved resilient because we kept costs It's well under control. Now having said that, it will all depend on road traffic and of course, we can't bank on that. But what happened in H1, As Christian said, it's indicative of what we're expecting for the rest of the year. Now regarding Contracting, are there catch up effect compared to 2019? I don't believe so. I don't believe so because Our order books were quite full by then, and our teams have been well capable of taking onboard COVID issue because in any case, on the construction side, people wear hard hats and masks And so they wear this sort of uniform, so one more mask doesn't make much difference. There is a cost included. That comes at a cost We can pass on that, Carlos. So no big deal. COVID is no longer an issue, and indeed, we've been able to work normally ever since the end of the first lockdown. So now it's pretty much business as usual, and that is why we were able to continue with the trend of a big order book. And the pleasant surprise is that demand kept Rising, so even though we have substantial business, but we've not been sort of Yes, consuming our order book because there's more new orders coming up coming in to replenish the order book. So We are back to business, as usual, in a very dynamic environment, I should say. Having said, of course, Having said that, we have to be very we have to keep a watchful eye on property development is this business of The delivery of building permits. And then, of course, there are 2 things: issues of inflation for raw materials and the availability of people to work for us because looking at talent and labor are in short supply. I hope that answers your questions. Thank you. But maybe one follow-up, if I may. Apologies. If you look at your order book, the backlog, is there anything in there compared to 2019, the Composition, which should make the margin structure different. Honestly, I don't think so. Excuse me, Jean Marc. No, I don't believe so. Now going back, I mean, I can go over the structure of the order book or the backlog business by business. Regarding public orders, well, we have more now than we did back then because there's less residential and more public buildings and the public buildings are index linked, but It doesn't make a significant difference, honestly. But maybe one of my colleagues can add something to that. Maybe not well, Of course, we are always selective when we take when we accept an order. We have to be very selective. Projects have got to be profitable. And of course, there's the real issue of being able to deliver. We need human resources and human resources are in hard supply. So we have to be careful. Further questions in English maybe? There are no further questions. Well, we may There may be a final question. Yes, a final question from the audience. Yes, well, Construction and Property Development, you can see that its contribution to H1 was not quite as high as usual. Do you think this they will make up for this in H2? Or are there other factors sort of well, for instance, the Hyperion project might make a difference at least in numbers. Well, Christian said that in H1, there's a big difference compared to 20 And that is the disposal of an office building in Portugal. That took place in 2019. But other than that, in H2, There are no expected developments. There are a number of Commercial property operations. And of course, depending on whether the sale is finalized in January or December. Well, that would make a difference to the numbers for the year. I mean, they are either in 2020 or 2021. Right. Well, look, if there are no further questions, I would like to thank you all for attending. Thank you for your questions, and we'll look forward to seeing you again. Hopefully, next time, there will be more people allowed in the auditorium. Thank you.