Earnings Call: H2 2019

Feb 26, 2020

Good evening, ladies and gentlemen. Thanks for being here for this presentation of the annual results of the first. I'll get back to the highlights of this period that I'll complete with the figures for the fiscal 2020. Future 2020 figures. And Christian will present you the figures of 2019. Globally speaking, We are online with June 30, 2019 will remain a very good year for the group. Our builder concessionaire model showed how relevant it is with beautiful successes in works and in concessions. Though success of 2019 and of beginning 2020 will represent 1,400,000,000 investment implemented by works and are still not yet integrated in our book of orders. Regarding the highlights in works, the traction is still there since the growth is about 10% for the 2nd consecutive year. We commend ourselves that the internal growth be the 1st engine of the growth of the of the group in works. Concession side, this year will remain highlighted by the several successes throughout the outcome of several years of work. According to our strategy, this development of our concessions is done in the territories in which we are really set in a sustainable way. Echo of the presentation of last year, I'll get back to some highlights of deployment rolling out of our low carbon strategy. Regarding the words, how not to mention the ramping up of all our projects on the Grand Paris Express that you see here on screen. We have currently over 2500 employees involved on the various projects. On line and the ground line, 161 This was a year of foundation works. It's the tunnel boras that are moving forward in parallel of the civil engineering of all the works. Armail, the first tunnel borrower, left Old Nae, and trot already a devil really four hundred meters Since the devastation that you see on screen, 3 tunnel bores will operate the first named Bantan was are to dig mid March, 2nd ines, 4 weeks later, the rain will be installed in the same pit this summer while the 2 other tunnel bores will be in service operating. Hence, 3 tunnel bores that will work and, evacuate landfill from the same pit, a configuration that I've never met even in the major infrastructure projects in Asia. On line 15 South Lot T2B, inception and the first two tunnel bores, Kaminay Shah started to work in October. In December, they are now digging. Lot 14 North is totally completed. South, Turnbull, Claire, has already trod 1.3 kilometers and is digging thirty five meters a day in direction of the Ollie airport. On the AR project, we started the tunnelworks, Virginia, who dug 1.4 kilometer, went through the river seine and is currently in Na Yi. We led the Bowstring on the Bizon bridge. The works of the Grand Paris Express, as you know, works of roads and cattenaries on the Aeol line. We started a non tear on the new part outside of the operated railroad, and we went on with the reshuffling of the, tracks on the operated networks. If Raja and the Abhijit system started on high and low voltage systems networks. We are also working on several other lots of the Chaldegall Express which started the works on the tracks on the operated network until 2024. 100000 of hours have been already done in 2019. Beyond the Grand Paris Express, another large project is underway. The railway tunnel Leon to run. Tarino, our teams implemented in September is the first boring work. It's 9 kilometers of tunnel that are implemented traditionally and through tunnel bores. Many of the lots are being expecting the call for tender. We are glad to be fully involved in the preparation of Olympic Games in Paris in 4 years from now with all the lots of the Grand Paris and the athletes village that you see here on screen won by our teams last year. Marvelous challenge that we must absolutely fulfill. Another very large project is really occupying our energy systems, the ultimate diesel backups for 36 lots that we're making in the framework of the post Fukushima program. It's 31 ultimate diesel backups that were transferred to the operators of EDF. We have been earmarked for the implementation of the 1st Offshore Wind Park, Windmill Park in San Jose for a, global amount of 500 €1,000,000 with a partner Demi. We're very present on this market in Northern Europe and United Kingdom. Efashmetal is a reference the group of delegates know how now in France. Our teams started the sales of the first housing units in the eco neighborhood of Chatney Malabury. As of February 14, 60% of the reservation of the 6 programs. This major program of urban design is very promising for the group. All of our business lines deliver the best of their know how, so us to make it a real proof of concept of the sustainable city. A first immobileier implements, again, a record sale of housing units with 5095 units on screen the Atlantis heart in Massey Efaggio Babilier continues its progression and is really reaffirming its position in France, Belgium, Luxembourg, Poland, and also in Switzerland. The dynamic of our properties is limited to housing units, We have marvelous of tertiary operations in offices and hotels, representing 30% of our sales in property. In our development, close to the grand state of Liele, we delivered the headquarters, regional headquarters of Orange. On here on screen. The motorway activity experienced a strong growth, especially due to the pre election environment beyond the volumes are Motorway teams illustrate themselves in terms of low carbon innovative products and prepare themselves to the change of their business integrating the road as a main challenge of connection, main channel of collection, our program of R&D Ice through development, has many innovations due to a fast route, a fast energy systems, motor concessions and sustainable development, and screen two innovations showing the change of the motorway products towards a lower carbon Recital RM, low rate of the call for projects of the committee for road innovation in Route 2017. And by default, the vegetal recycled coating, low rate of 2019. We laid the first, not cornerstone, but the first plank of the, housing building in Wood Hyperion Bordeaux, the Project is at the core of the low carbon system process of the fire. It's gonna be the highest housing tower ever built in France. And a special mention for Gauier who made a fantastic year in France and in Poland becoming one of the unavoidable specialists of the facade from left to right, Orange campus in Lyon, Pasckell Tower in Puto and the Warsaw hub Tower in Poland. Internationally, Efash Energia implemented in 2019 the equivalent of 3 solar farms of the size of Systas, I. E. 900 megawatts installed on screen, Taurus the Cotilia Central. Power plant, solar power plant. Our FS Metal teams in Spain go on manufacturing endlessly in our Albasente factory wind turbine stands used by our customers all around the world. Construction goes on being very dynamic and Benelux on screen. The projects of the future headquarter of PNP Paragas Fortis and the center of Brussels. In the Netherlands, we have delivered a pharmaceutical laboratory, a return key to Cropman, thanks to its recognized know how in the area of white rooms. In Senegal, a magnificent example of sustainable implantation where all of our teams in Senegal maintained a good activity in the country and are a major asset to roll out our know how when major structuring projects are on the table. For one of their Spanish customer, our teams of Efrajernetriar, associated with Senegalese teams to implement the wind, farm of Taiban DI this week, integrated this week, 159 megawatts on 37 kilometers. 2019 was devoted to the preparation of the project Grand Tortue, AMAN, transport the project between Senegal and Mauritania for BP to highlights Development of a yard of 12 hectares in the part of the car, as you see on screen, to implement the 21 quesad for the wave breaker. Opening of the queries in Mauritania that will produce the bedrock necessary for the implementation of the submarine embankment In Germany, we commissioned the Hawk Mosel bridge major part of the Rogue B50 making a direct link with the port of Antwerpon. Regarding the concessions, before getting back to the 5 major elements of the year, some more current elements. We have acquired 9 micro power plants, hydroelectric power plants, in the southwest of France. Works, we will make compliant the renewal and the increase of the power of those power plants and the building of a new power plant in Doordone. We'll also be in charge of the operation and maintenance of those powers. Power plants. This project is increasing our positioning on the renewable energy sector. After over 3 years of work and negotiation, we secured 7 years 4 months of extension of the duration of the concession of the tunnel spread of Karinaaj and Marseille in exchange of the implementation of the connecting road Schlossing. We commissioned the new part of the road 33 kilometers twice two partners between Pastor Ten and Eldenstein of the A 94 in Germany. This partnership contract, public private of 30 years, including maintenance and operation of the seventy 7 kilometers of the road. And as I said in my introduction, from this year, we'll take out 5 major successes perfectly online with our strategic plan of 2016, enabling us to make the difference and to extend our portfolio of concessions at the heart of our territories. First, the strengthening in the capital capital of APR will hold 52% as compared to 50% currently. You often ask me the question about our potential strengthening when we saw the Macquarie funds. When the sale was total, the governments on FRE gave us a central role without saying a word about the reputation of our teams with the excellency of their management. So we could negotiate this operation in good conditions and will go on managing and deliver our know how for the duration of the concession. We will soon sign a concession contract of the Rogue Saint Europa Plantique Commission is, foreseen for March. Project is about the widening and the compliance of the RN 79 between Sazeray and the Alier region and Tiguan in the Southern Luale department. This will be the major reference in terms of free flow in France. It was a major target for Afage and APRR. It's a greenfield construction, which is the model we prefer because it allows very important investments of work and a good knowledge of traffic, we are in compliance with the APRR network that will operate immediately as of March. Finally, with a span of 48 years of concession, it's going to be the longest one of our portfolio after Let's remain on the motorway with the good news of this beginning of the year, where we won in a group the public private partnership of 30 years for the Motorway A3, the most important PPP of structure ever implemented in Germany. I talked to you about it for the first time 2 years ago. It's about the widening from 4 to six ways and the operation maintenance of a section of 76 kilometers. Works will mobilize the teams of German entities alongside our partner, the Gupta company in Bavaria, the works contract is close to 1,000,000,000 that will be performed 5050. We have all the skills to come up with this PPP given our experience on the 894. It's an ambitious project, but it is at our scale. It will mobilize about €50,000,000 of share, capital, and 850,000,000 of debt and 700,000,000 of sub subsidies. According to our strategic plan and following a work of understanding and preparation of several years, We materialized our first success of PSD for the airport in the region of the old France where our lines of business are present for quite a long time. We have been appointed concessionaire with Aeropur Marce Provence of the Lille Airport for a duration of 20 years in of January 1, 2020. The project includes renovation works extension of the existing terminal to improve the welcoming condition of the customers and support the development of the platform. The the concessioner will have to work on the operation maintenance and operation of the airport The sales, the revenues of 2019, were 1,000,000 and the EBITDA, 1,000,000. Finally, we seized the opportunity of the sale of the 49.99 percent held by Kyzyl in the Toulouse Blanak Airport to secure concession with an end in 2046 in Oxitania, but also a heavyweight reference in the management of an airport of a platform of near of 10,000,000 passengers per year in acquisition for an amount of 1,000,000 Co shareholder CCI Toulouse Metropole, the region of Sitani and the French government, the French state. Sales, 2019, 161,000,000 in EBITDA, 1,000,000. As you see, the 5 last major changes in concessions are fully in line of what we have told you in 2016 in our strategic plan. So as to renew our portfolio concessions, while remaining on the territories, where we are very Following those highlights of the year, I wish to get back with you in our low carbon strategy that I've presented in detail last August. In 2019, we started an ambitious holiday to highlight the sensitivity of the company to the challenges of the carbon footprint. Low carbon construction is an opportunity to make the difference on the one side on being proactive to significantly reduce our own carbon footprint and also by innovating even more so to support our clients in their own process of reduction of their carbon footprint. By using the various levers of this policy, 2019 will be highlighted by the improvement of 2 notches rating carbon disclosure project, decrease of the, carbon intensity of the group and refinancing of the banking facilities, €2,000,000,000 at the Farj and €3,000,000,000 at APR R and Defari. And the cost to spot the function of the performance on 2 criteria, society, and environment. In April 2020, We shall publish our 1st Climate Carbon Report, according to the reference TCFD. In open innovation, we implemented with impulse partners, the 1st French platform devoted to materials and processes low carbon that we have named Sequoia since June 2019 7 representative partners of all of the value chain of building and construction joined the initiative So as to deliver their expertise in terms of carbon and improve the implementation of decarbonated solutions. The first call for solutions was inviting startups, SMIs, SMEs, and ETIs to candidate around 6 topics, new abilities, design and implementation, low carbon Circular Economy, biodiversity, environmental engineering, methods, tools, renewable energies, and energy performance within a quarter 57 solutions were proposed through the platform online, 10 preselected candidates, and 5 laureates. Sikoya, various different members of the club wishes to support the designers in an implementation at the larger scale enabling them to integrate future Convinced by the necessity to reduce significantly the emission of CO2 when we evacuate the landfills of 61, we have a partnership with Volvo to buy a fleet of lorries working on LNG. On our motorways in France, we have 12 high power stations and 17 very high power stations within 2 years will multiply by 4 the amount of very high power stations and eventually more than 80% of the servicing areas of the networks will be equipped. After the survey of our highlights and our low carbon strategy, Let's move to our figures. 2019 can be summarized in a, revenues growth of 9.4 percent, driven by the works. An increase of our operational profit and current activities of 8% stronger in the works, supported by the volume of business, an increase of the net profit by 15.3 percent to the level of 1,000,000. A good position of the WCR. 2019 has been a specifically good year because we materialized 1,000,000 of external growth, 1,000,000 for the Toulouse airport. Finally, the order intake was very sustained, and our order book is at 14.2 1,000,000,000 growth of 2% over year in spite of the strong increase of our activity. This order book makes us anticipate a growth of the activity more limited than works and a progress of the revenues for 2020. We will hence suggest the general assembly to put the dividend at 2 point EIGHT euro, an increase of 16.7 percent. Thank you for your attention and I invite Christian to give you the explanation in details of the financial Good evening, everyone. As we, as usual, we shall go through the numbers starting with the revenue. This year, we have a 9.4% increase in revenue, and that's evenly distributed between France, 9.2% and International 10+3 percent growth. So revenue now stands at 1,000,000,000. You may remember that it was only 1,000,000,000 back 3 years ago. So that's a 1,000,000,000 increase in a matter of 3 years. Over the year, 2019, what should be pointed out is that, while increase in revenue is similar to that of last year, last year was 9.5%, there's a different explanation this time around, in well, in 2018, you had a 6 point increase 5.6% increase in concessions compared to 2.9% this year. But in contracting work, we had a more external growth, 5% compared to 2% this year. So the key item there, of course, is organic growth in the contracting business, and I will get back to the underlying trends. In geographic terms, we have 31% of contracting revenue international, because we have an even distribution between France and the rest of the world that you will find that most of the business now the significant business is in 3 major countries that generate 1,000,000,001,000,000,000 in annual revenues. You have Germany and Belgium just like that last year, but Spain this time around enjoy significant development in 2019. Operating profit from ordinary operations was up 8%. You may remember that we had an 11.7% increase last year, 12% versus a bigger 7% last year 90 basis points in the concession business. If you have contracting plus concession, together, there is a significant improvement in the contribution to operating profit, 1,000,000 in concessions and 1,000,000 in the holding and contracting business. So you have, again, a good even balanced, but you can see that, both concession and contracting have seen their profitability improve. Looking at the details of each of the branches, you first have a good performance of the property development business, almost 1,000,000,000 in revenue, up 16.5% less so in the building business as such, we have 3.4% on, works alone. But you may remember that in France, we had we were down 5.6% in 2018. So we're back to the levels we were at in 2017. The biggest market outside France was Belgium. We have a slight growth but the basic comparison was quite high back then. Now, we have 1,000,000 there, Properties Development also had a remarkable year, 1,000,000 in a current in profit from recurring from ordinary operations operating profit for ordinary operations, you have, of course, the, the builder and developer model is extremely favorable here because, of course, we have a set price on construction work, but also on the timetable, which is, of course, essential when there's higher tension on both resources and construction costs. And of course, we have a fine work conducted by Afagimobilier on works as such This was a more challenging year. There was a scissors effect that I just mentioned 2017 through 2019. But the, profit margin stand is down stands at 3.7%. We have an example here of a construction site in, Avenue Mazzo, 10,000 square meters, we are renovating a building there. Infrastructure is enjoying a good momentum, up 20%. Now, the roadwork market has always been buoyant in pre election periods, and works became more profitable in 2019. And of course, companies are very much present on the Grand Paris Express projects. We're looking at 1,000,000 in revenue, 698 specifically. Of course, that explains the higher profit margin and income in that branch in that business unit. We have a strong presence in Germany and Spain with sustained business And outside Europe, Senegal is the main driver here. We're looking at 1,000,000, if you look at the agencies and the major sites, this is a record for Synagogue in the metal business, the wind turbine business is driving us. Here we have a view of some of the equipment of the Grand Paris Express site. And projects. Energy Systems, we have an increased revenue 7.+7.7 percent Most of the growth comes from the international business, plus 19%. Spain enjoyed a 50% growth Our branches are very much present in the Renewable Energy business and have been exporting this know how to South America and Africa We have an improved business, if this improved revenue of 50% mostly in Spain. CropMAN in Netherlands, which bought back in 2018 had a great year, 1,000,000 in sales. France growth is less so less significant, but still 3% steady growth in the territories and we have, of course, our 4 brands at the bottom corner bottom right corner of the slide and we are always working on improving profit margins. Now, here we have our brands on uniforms and, and LCVs. We may remember the Pereira concession now. There was a slowdown in a heavy goods vehicle, it was only down 1%. Live vehicles on the contrary enjoyed a 1% growth, 1.1% growth, maybe this is especially at the end of the year when there were the rail strikes people went moved to highways instead. APR has been continuing its investment programs on its network keeping costs under control. EBITDA has now, EBITDA margin stands now 74.4% And then you have a product that has to see, we are working here on keeping the costs on highway maintenance and services such as fuel stations. Revenue on roads is up 9% and so this is an 18% contribution to the 18% growth in profit good operating profit in concessions and PPPs. And we also have maintenance services in our portfolio, you have here an example of, the Perre Perre, sorry, islands in five thousand six hundred meters in the heart of Paris, we'll have police stations for the 4th the 4th the 4th 1st AROUND des sponsored Paris that's, where the police station will be centralized. So these are the business unit business units, and so that these are the 2 indicators, of course, revenue and current profits from recurring from ordinary activities Now we see that, the other expenses operating expenses, CHF 68,000,000 includes transactions on a number of operations. We had, fees due diligence, especially for the Toulouse airport, net debt because of net debt is down to the 5th year running minus 1,000,000, of course, the basis of comparison in 2018 included the rate swap So there's a that was a favorable comparison basis, but now financial expenses are now down to 1,000,000, including FRA and APRR. And in other financial costs and income, we have the dividends from Getling, about 10,000,000 that that explains the difference between 20192018 income tax mechanically, increase, and that was that made sense. You may remember, I explained this back in June because the tax credit was turned into a, a deductible expense. And so that made a difference And so now the tax rate is 33.7 percent instead of 32.5 percent. So net income group share stands at 1,000,000, up 15% compared to 2018. The two main reasons they increased in operating profits from ordinary activities, both in contracting and concessions and of course, lower financial costs. Regarding at the cost of net debt. And if you look at the flow chart, at the end of 2018, the debts stood at 10 point 1,000,000,000. Now, in order to be completely consistent, you may remember the leasing debt stood at 1,000,000. That's the thing in the gray spot at the top of that first part. Now, that is no longer included at the end of the period because we analyze that it not including the leasing debt because of the change in IFRS 16 standards. And so now we start at 10.1 $85,000,000,000. So there was, of course, EBITDA that generated an increase in $185,000,000. And if you, well, that's when you restate for IFRS 16, working capital requirements were stable both in concession and in contracting, which is significant for contracting because, in road and property roadwork and property development, these are businesses that require a lot of cash and so we were able to keep WCR under control, interest and taxes were down 73,000,000. Now, that included also a significant decrease in financial interest, an interest of 100 and 44 Then capital expenditure on the on capital goods, was 1,000,000 So that's an increase compared to 2018. You may remember that you have new machines that, of course, are part of the capital expenditure, but there was also additional investment for new launch plans with APRI. We're looking at 1,000,000 that's an increase compared to 2018, and that's because we have been ramping up these projects, especially at APR. So free cash flow stood at 1000000 compared with 1000000 last year. So roughly, we're looking at an improvement in free cash flow to the tune of about 1,000,000, most to do 2 thirds of it, 1,000,000 comes from EBITDA, but of course, there's a $100,000,000 improvement in WCR changes in WCR. And so that's enabled us to generate to spend $156,000,000 capital expenditure, including the, to lose airport, but of course, there's, there's Nikkelly, the railway, railway service company. And then looking at variations without cash flows, we have about 1,000,000 but that's, of course, the debt for the Toulouse airport, the Toulouse Blinnake airport. This is not now consolidated. And so we're looking at, the total cash out was 1,000,000, and there was, 566, including, of course, the investment in to lose. We have the dividends paid out by Efraj, That's operations capital. And of course, our direct shareholders, we're looking at an increase of 1,000,000 in dividends compared to 2018. And so if we stay to that on that slide, the net debt at the end of the year stood at 1,000,000,000. So it's pretty much I mean, not including the IFRS 16 change in accounting method, we have more or less the same free cash flow position, but we were able to pay for our own investment, for our own CapEx to the tune of 566 1,000,000. Now here we have the Two Blocks debt versus cash, of course, and not to scale, debt without recourse for concession is pretty much the same as last year, but this year, we include the 1,000,000 for the Blues to lose Venac Airport but in red, you have the cash position of holding and contracting. So, it is improved because of the new accounting method because we no longer have the leasing, it was about 1,000,000, but you remember that we use that to payout to pay for all of the 566,000,000 in external growth in acquisitions. And so that means that we have a pretty good cash generation at the end of the year when everything was said and done. One highlight regarding the debt position we were able to refinance our credit lines, for F. A. P. R. These are undrawn credit lines and, and of course, we include a number of indicators about 1,000,000,000 in terms of safety and security. And so we we're one of safest issuers of bond instruments in the country. If you look at the order book over a period of 1 year, It is up about 2% over the year. You have in 2018, of course, a major step that's Grand Paris Express plus 15%. But the great thing here is we were able to keep the order book high at 1,000,000,000 having already produced 700,000,000 worth work worth of projects in the Grand Paris Express project. And one details, the the deals that haven't been formed as regarding the RCEA concessions, the Lille Airport, the PPP in A3 Highway in Germany, these are not included in the order book. If they were included, we would be looking at 12.3 months worth of business and that, as you can see on the left hand side, is our standard level. So in absolute numbers, or indeed in relative value, we are very much in line with our usual figures. So that's, for the numbers. And now we have time for questions, I believe that we you each speaker each of you will be in time to three questions. Indeed, three questions. If we can start with the construction contractor, civil engineering, there is an improvement of 37,000,000 of the current operational margin. Can we have the detail of this improvement? Is it mainly the, railroad works? Or the, motorway, is it the part which is very, leveraging the, Wind Farms. 2nd question, risk equation in Bavaria on the works Who's conducting the study you, the land of Bavaria? Is it on the border road work? It's a, a €1,500,000,000 And on the airport part, the importance of the past with the future if you want the analysts to value those assets, could we have from a quality point of view the factors of improvement on on to lose and on the little airports. Thank you. First question, the improvement was split in all the activities. We have an improvement of the performance of a motorway in France due to the improvement of the way the, works are being performed on on the road. We have 10% of growth which is quite a help. And civil engineering also an improvement of the margin more due to the volume then by the way of the works because on the Grand Paris Express, the Lot 16.1 we manage cautiously the budget. Even if we hope a margin positive, even very positive at the end of the project, we manage it in a very cautious way. On metal, yes, on the windmills onshore and offshore, We have a margin improvement. However, it's only much more limited in France. So it's difficult to improve the profitability, except on metal, which is very limited here in France, €100,000,000 more or less. On motorway A3, we are in the PPP and we are bearing all of the visibility of design and construction. It's been 2 years we've been working. Process where we received from the state or the government, a very advanced project. And during all this period of call for tender with We have all our study bureaus who worked on the fine tuning of this project. It lasts quite a long time because we got implemented in 5 years. And the conditions of this call for tender were required not to bother people on 80 kilometers. We work on on bits and pieces of 80 kilometers performed well after the other. But in terms of risk, it's a full risk process, which is taken by the concessionaire. And the risk of works and construction is handed back to the designer constructor. And we're at 5050 Partnership there. To confirm that your Chairman partner is very profitable. If we look at the accounts, they have a unusual margin of profitability for a German group. I'm really amazed Can we expect high margin of this project? Let's not forget that in Germany, margins are much lower than in France. Margins in Germany are lower, but they just improved for a certain amount of years. And we do not wish them to stop there. There will be positive fallbacks in terms of volume. Our assumptions From the beginning, when we started the a 94, we're held until now. Today it's delivered. We had no problems. We're on target. Those PPP in Germany are really relative in the global stream of the German activity. I'll add that Bunta is not a unicorn. You have several companies of, like, Bunta doing margins above the historic margins in in in Germany or in Europe. On the airport issues, are questions. The two schemes are totally different. The process are different on Lille Airport. The will of the, concession giver is to change the, duration of the Public Service delegation due to important investments to be made there in order to get the needed growth on the 20 years. What they have remained on a PSD in 20 years, you cannot balance them. So you would, get much lower ambition. So they moved to a 20 year project, enabling us to come up with a global proposition of investment to support the development of this airport. It's on this space that we have been chosen given the fact, as I said in June, the cost of acquisition is very low because it's just the non amortized capital of the previous concessionaire. It's investment plan that will make the historic value of this concession for the 20 years to come. We have to build everything in terms of receipt improvement and change of functioning of operation of this airport. On to lose, it's a different project because Kazil was, pushed a lot for the development of the airport for those who go there. In the past years, they did a property development of the hotel. They rethought the retail and trading zone We think we have still many things to do on property development. The teams on location really wish to share with our, planning teams And on the improvement side and monitoring of what has been or what is operational costs, we have a lot of discussion of good practices between the motorway concession teams and the airport teams. We are in a different process and the, X Cam capital expenditures will be lower than what they would be in Lille given what I said previously. Really, it's 2 different processes. And the platform is not the same size, as you know, One last element about to lose. What's interesting there is that, it's a regional airport. Given its geographic situation, but its economic activity has a very sounder balance. You have the airspace cluster nearby needs the airport and conversely so which is interwoven into the airport and bearing a lot of development. You have investments made by the Metropolitan City. We're glad to build that path as a builder as a constructor contractor. There's an economic pole of development that is very strong and more processes for those regional airports who develop new lines from a touristic point of view. But when you look at the passenger mix, one of the regional airports who has much more traffic, which is export. I mean, people from Moxetania, going elsewhere, for, business reasons or tourism. And our partners of all of the local collectivities are absolutely sure that there's much more to do to improve the import part of the coming traffic. I will say, HSBC, I'll ask my three questions about the airports. Can you give us an idea of the returns you wish to have on the airports? And, second question, 1,400,000,000 of investment works on the concessions what will be the, steps on the 3, 4 years to come and some mitigation of the CapEx of APR And my third question is about the preliminary studies on the future contracts of the Grand Paris. What can we expect? Will it have something to do about the margins in the near future? All of our PPP small size, adding the CapEx of the two airports of Toulou and Lille we can start on 1,000,000 of 2020, 120, 2021, 2022 and then 50 known as after day in 2023. But it will be repossessed, restated, outside of APR. We'll have the a 3 with 7 I mean, 1,400,000,000. The works construction not the CapEx, A3,750,000,000 in works, construction, Probably it will not be consolidated. It will not be translated by CapEx with the exception with our quota share of, share equity. Capital equity, and, the phasing of a 3 is linear on 5 years, taking half a year for 2020. And finally, RCEA, very short works. Phasing is linked to the date of start It has to be spread on 30, 3 0 month. We'll already discuss it in June. Sensitivity on the year is very important. Today, I think it's difficult to anticipate a figure. I didn't forget your first question. Hello? And the processes of Grand Paris, it will keep us busy. The 2nd phase of design implementation will be launched very soon. The first call for tender by mid March with studies that would start that we think we'll be starting at, the beginning of the summer, who'll keep us busy for the second half year. The studies will start the summer and go on 2020, 2021. So the workload will not be on 2020, but on 2020, 2021, we have amounts in 2020, which are consistent with what we're doing in terms of volume. No major impact on, the trends of the outcome for 2020. Another element regarding the studies, there are discussions the company of LeGrand Paris asking us to study a design I mean, it's not amounts what we're used to. So there are discussion about who's paying for the study in case we don't win the project will depending about the degree of advancement of the studies when they will start are issued to call for tenders. There are only certainties that there will be no impact at session 2020 because it's gonna be The first outcome are not expected between mid 2021 for the call for tenders. On the TRIs, I think we should look into it case by case. Because of the differences in risk profiles. We're not used to communicate by assets, so you won't be surprised that they will not answer figures. However, you probably heard that there was a coffin tender of to lose cast It's also elements of, thinking a strategy in the competitive environment like ours. But we can give some elements of background that could help you in your own approach of the impacts of those conditions. If I take APR, we disclosed investment of 1,000,000 for 2% on market price. Minored by a, rest of €60,000,000 and the TRIs that you have in the models, they shouldn't be changed. On RCEA, it's an investment in France, in a greenfield, with a proven traffic and a continuity of flow, the historic, the legacy model, our concession of the motorways in France is Well, known. We have the principle of a revision of our schedule over the 48 years and not in a regulation, framework or dialogue year after year is in the classical system for the whole period of the concession 48 years. A3, it's an investment in Germany in a PPP without traffic risk, will enjoy the return of experience of A94. We have a return to debt, like in all our PPPs, And as I said previously, my presentation, €100,000,000 of, shelled equity, 800,000,000 Given the subsidies and the debt, the TRI impact on the final suggestion of proposal is less important as we see in our PPP of housing. Lille, we are below the amount of passengers getting into regulated, process by the regulator or in an investment plan with targets and we share above the limit. It was the model prevailing before this element. And to lose, the investment is implemented At the market price, I told you the EBITDA of 2019 and the sales of 39. We acquired on ten times something multiple of EBITDA. We will go on with the work that has been started by the management for the levers of improvement to our classical new lines, work on the OpEx, it's rather classical. And, I'll insist upon something that we will mainly pacify the relation within the monitoring board. We are legacy partners, and, this is what's very important there. And all the rest I said a word about it. A mix with the presence of the airspace cluster making this asset slightly different from what you may have in the other airport concessions. There are some elements that I wish to share with you for you to make your own assumptions. Good evening. I'm with Barclays and I have three questions as well. Number 1, a follow-up question after what you said about the assets and IRR. Can you give us a reminder about the ATB regulations and the ART authority, that is the highway authority should give a ruling on, tolls and rates The second question, I get a feeling that all the big projects, that you can bid for, I mean, the highway A3 Highway, the ATR, I mean, are there new, projects in the cards and how you develop in your, airports because this is something new to you. So is it the concept that you're learning the ropes now and you will start I mean, you can grow in earnest once you're more comfortable. Are you proposing to start growing here now when the airport business And then about the Grand Paris project, can we have a timetable of what's coming in the next few years? Regarding, ATB, that is the highways. There was a sorry, the airport, there was a 1 year extension on the existing contract now talks are underway, conducted by ART, which is the airport authority and and the airport, the Civil Aviation Authority, we have to see what comes under, what is regulated, what is not regulated. So that makes a big difference. There have been exchanges with the management team at Toulouse Airport and the Civilidation Authority, GAC, to, define the framework within which these regulation contracts will be worked out. So for the year 2020, we're waiting for this sort of generic framework so that we can have something to work with, but there will be direct talks regarding well, for the year 2020, now, of course, the company is doing well. The rates might come down However, we are trying to arrive at a new contract for 2020 or that will be negotiated in 2020 to be implementing in 2021, so it's to define the new rates. So, that's what's in the plan for to lose airport ATB. I hope not to lose Blenak ATB. The second question about developing our or growing our airport business, but was there another question in between? If you're looking at the pipeline of greenfield operations, there will be well, there will be others in Germany, but you can only imagine that, first, we are looking at the at rolling out the A3 Highway in Germany rather than looking for other projects. And of course, if something comes up too soon, we will have to leave it aside and we and we'll have to wait until 2020 sorry, 2021 before we can look at new projects for Germany. In France, The only one, whether, there's a call for bits, it's the to lose gas road and that's enough before 2021. So for the year 2020, right now, there are no major, projects, which is just as well, because having secured the highways that we have, we wouldn't have much room when we got Lot 16.1 of Grand Paris, we had to bow out of a couple of contracts, even though we had won the contracts, but because we had to focus our efforts on, on other business. Now there's been a rescheduling of capital expenditure, and that's just as well, because, as I said, we are in a position now to, address the, the products that were left as it were, aside, but nothing new will happen in this respect before 2021. So that's the existing projects putting a cap on that. Regarding the airport business, we're not our hope is not just to grow our airport business and just add up or pile it up airport assets. We do have a presence in a number of territories and in any territory where we, we have a presence around the country, not just in France, but also Benelux, Germany, Spain, in a few African countries, wherever we are, we do business, either there's some construction or that is contracting work, PPPs as well, all concessions. But of course, ideally, when we have one, we'd like to have the others. If you have contracting, we'd like to have concessions, of course, the main the major the only risk for concessions is political risk. And there's I mean, we've been looking for ways to keep, to manage risk, the best way to do this is to be an employer to have a well asserted CSR corporates, social responsibility, so has to so has to have good relations, with the authorities and those areas where we do have projects underway enable us to have a long term vision along, and so this is exactly where we look for possible concessions because we know that we can keep political risk under control. And for instance, when we had hydro power plants and dams, even though we had just built them without a concession, we might get concessions there, but of course, natural concessions would be roads and airport. So if we have a regional airport in a German land where we are present and recognized or indeed in Belgium for an where orange Egypt Spain, but I mean, now in Spain, they all privatized, I believe, but and that would be part of well, that would be a possible target for this group, but simply because there's a good consistency between our contracting and our concession businesses, but the main asset in this company is human capital. And I can assure you if you look at the 3000 people from the Oxitan region, when they saw that our company took over the Toulouse Bania Airport, that was a very favorable factor for, employees from the region, from the Occitan region and of course, our clients as well, because we, we enjoy this popularity and, of course, we may not have all the know how And this is something where we have to learn, because within an airport, there are lots of businesses that you have, the operation of the airport, the maintenance, the building itself, the land, property development, franchises, hotels, parking lots, etcetera, there are many areas where we do have for cheese and know how. However, to, run an airline, well, that's, something we have, we yet have to learn. But we are fortunate here in as much as we've had very good teams, people who have joined us and on the strength of that. We will expect we will continue the business, but the idea is not acquiring an airport with the stake of acquiring airport, so we will not going to buy, say, an airport at the other end of the world just for the sake of for the for the sake of acquiring a new airport, but there are many countries where we have long term, long term presence. We do have a concession in Senegal it's doing extremely well, and had we not been in setting up for 94 years, it would be a much riskier proposition in political terms to be, concession holders in Senegal. It is thanks for a long standing presence there that we can take a calculated risk. Yes, a further question. Good evening. My name is, Eric Lemay. I had four questions number one on road work, are you looking at less business, less revenue in France because of the upcoming elections And if so, by how much? 2nd, about the connected territories in the Finister, Britney area, can you give us any clarification? Any details? And, in terms of revenue, are we looking at something significant? I mean, these connected territories, I can't quite figure it out. And then, number 3, can you tell us about our your constructions, oh, your sites, I mean, civil works or building to what extent are they digitalized, do you have the BMI type thing? And then for the Grand Paris Express thing, are you do you believe that somehow there's a greater risk of performance? I mean, is there a performance risk on these things high performance risk for public works at Efraj. Ah, sorry, before I take this, there was a question by Nabil that Guillaume can take sorry, I mean, just a second, and then I'll get back to you. Yes. Yes. You're talking about the Grand Paris contract on 16.1 between Olene and San Lee and on the 15 South line, these are projects underway. There's a second wave of call for bids, and so we we have put a number of bids. That is for line 182. That's the south affairs. That's the line between messy and the atomic energy building. And there's another one where we're expecting where we have bid, that's line 16.16.3, that's a number of tunnels that will Complete Line 16, that's Northeast of Paris. That bid is underway. I mean, it will get the ounces at year's end. And then there's a final lot and that is, that we were just applying. Now application means that we have before we know who wins it, we have about a year to wait on Lot 17.2. That's the extension of Line 17 that will connect Sandy Sunday play a long way to CedarG Airport. Basically, you're looking at the area between the barge in Ghana and all the way to the Paris airport area, the Wazee airport area. So, we are trying to position ourselves for that. And then after that, you have a number of design and build contracts that the city has decided to move from design and build for portions of line 15. Now that will go from point of sale or to all the way to the la defense that's the Southwest segment, then there will be an additional segment from La Defense on the way to Sardany Playll, that's Northwest, And then on the Eastern side, you have two segments that will be added, one from, where TBM has just started work. Going all the way to bondy due north and then the final segment from bondy to go all the way back to Southern New player. So, they have 4 design and build contracts that are up for grabs. 1, where applications have to be set in by March. And so, this will be considered in the second half of twenty twenty. And so we expect to have assignments by 2021, it's hard to do or beginning of 'twenty two, And then for the 4 following contracts, I mean, we don't know for sure, but we're looking at a year or a year and a half before these 4 contracts are awarded. Thank you. Guillaume, can you give the microphone to Laurent so he can take the question on roadworks. Yes, in 2020, we are not particularly concerned as regards, business in 2020. If there's any decline, it would be it won't be much. The reason is that we're starting the year with a pretty good order book, we are looking at, sustained business for at least 6 months. And if we look at our various clients. For local authorities, we can see that the well, the financial condition of local authorities is better now than it was 6 years ago when, with 2014 and a big election year, for municipalities, we find that the finances were restructured because municipalities or small towns got together. And then we have big towns, this big what you call metropolis, that have grown outside the election schedule. Ah, by the way, the investment we're looking for Metropolares is the same as what we invest elsewhere in all of the country. Election year, or because elections, the department of local elections will be in 2021, will be next year. So this is This is a rather good period. Now, central government proposes to expand investment in 2020. Now, we don't have many contracts with the central government. Private market is still healthy, and I believe there will be a few worthwhile operations with the highway companies for maintenance or needs for new highways. And so we have reason to believe that we will have a sustained business, roadworks business in 2020. So if there's any, decline, it will be very limited in 2020, certainly not the same order of magnitude as what we had in 2014. You have to remember that in 2014, local authorities were given suffered a big cut in their subsidies, but of course, meant a big loss of business. And regarding the connected territories, this is one of these projects that well, they are not huge and not significant in terms of revenue, but, of course, in terms of, image, I mean, for and indeed for our customers and indeed for our own people, there's raised awareness as to the the coverage of services we provide because they are all integrated, connected services and that helps our client better drive their contracts, their own projects rather. And so, instead of, say, sort of answering a question, where they are providing solutions just by compiling the best that is available and providing our clients with additional intelligence so that they can be, they can perform even better. So, but there's more to come, the data analysis, the sort of thing that helps drive projects and we can bring added value to our customers. And so they that's what the connected, territory thing is all about. But of course, in terms of immediate revenue, there's is nothing significant now. And there was a question regarding digitalization, yes, BMI or or civil works, civil engineering. No, by the way, it's not just public works and, we could start with with highway concessions there, you have digital developments there because initially, the whole business was very much a process driven business, but it was all paper process. Now, the thing is when you have a process that is well run and has been that could well oiled machinery from year to year, the nice thing is if it starts being all on paper, but you can very easily make it paperless, they neutralize everything and that certainly makes life easier for all people working on the ground. We can have immediate, knowledge on the whole supply lines the or anything to do with the accidents or incidents or anything along the the line I mean, I'm speaking under the supervision of Philippe, but by the end of 2020, I believe that 80% to 90% of all the trades on the road on the highway concession business will be will be digitalized this is something we started back in 2017, and, we find that we're in a good position to acquire and analyze data. That's regarding highway concessions, but there are other areas. For instance, we, well, we've decided to set up a company that will enable us to drive all our long term maintenance programs and the idea is to collect not just data, but behavior so that we are in a position to have a very accurate forecast of renewal investment and long term capital expenditure. A lot of interest and synergies between our teams and the concession teams to deliver quality, but also return of experience and enrich the various elements I talked about the company because we know how to sell the services with other, contractors knowing that we are we had contracts with several local authorities who don't even know what is the heritage. So to foresee the maintenance of the heritage is something different. If I get back to the businesses, it's 3 different various sites. One part, which is an interface with the final client, final customer, We're able today to capture information on the stakeholders in terms of a property to test the projects, so to speak, upstream of its finalization because more and more, the first thing that a elected rep tells you It's a major meeting. Please present your projects so it's better to capture the digital tools and then let you introduce us so that our Project Upstreams is already designed given the constraints of the various stakeholders. Many more examples on which we start to be able to interact with the end user. And so far that the relation is contractual and our core business remains b to b, but I'd say it's becoming b to b to c. Since we're more and more able to capture this daily room information, reinjected in our decision making processes. The second element is whatever is about really the core business. We talk about the beam, But I think that, we move forward a lot in in the solutions, in the use. It's a cost more, than an opportunity, let's be transparent about that, but the real change is not yet there except in some places if you go on our works. You don't see the fantastic change in the tool given to the worker for him to do what he has to do when we'll be at the end of this chain that will be able to say that we have strong impact of the digitization of our businesses. In some places, it's already implemented in some of our factories when you have factory activities, for instance, the factory process of facade at Goye is totally different from what it used to be some years ago. We have more and more, and we will deliver more and more tools of training which are immediately on the ground, a support to explain to the worker exactly what is expected in what we like we did some years ago, but it's not very powerful yet, but we're already convinced that this is the right direction if we want to see strong impacts. Then the other element on which we already progressed is in terms of HR in terms of training because a good video makes things much easier. And games, series games, learned by games, trained by games. It's things we're using more and more. And we'll progress there. And last element is whatever is relative to the IT systems and, the support of the company, but Christian will say a word about that. Well, we explained that on the accounting finance, we have an RP, which is unique in France, unique to all the, businesses that will be rolled out internationally, enabling to do, that analysis and to progress. And, we seize the occasion to create what other industries did before us, create a back office and a front office with the shared services, centers enabling to mutualize the task to digitize them, to automate them. We are not yet at the AI. Maybe we'll discuss that, but we have robots. We have over 30 robots that are working in accounting. We are convinced that we're not at the end of the road we didn't explore all the possibilities and I'm sure we'll move fast on this topic. Indeed. It generates changes in way of doing lot of more processes, but it makes us progress in terms of separation of tasks and be more rigorous. Relations with the projects. It's a project which is really moving very fast, and it will improve in terms of productivity efficiency and savings. We start on the HR, the single RP, 2013. We ramped up of the shared services 2016 and of deployment. We shall derive all the benefits now. We start the same process on the HR, but we just start on HR. Last question was about the execution risk. Right? We never had so many tunnels at the same place. Well, basically, keep in mind, we're very cautious as Christian explained on the, acknowledgment of our margins Whatever we are doing in the Grand Paris, we are not the designers. The risk levels and the functioning of the risk is very different and so good because it will enable us to, look forward to stage 2 where the Grand Paris asked us to be a designer and builder, and the risk will be more important. Then when you are in geology of Paris and Paris area, or a tunnel borrower, I won't tell you that there are no risks, obviously, but we have very experimented teams who are used to do that Those are grounds that we know, and we have a ecosystem with the society of the Greater Patis, and they have certain amount of teams and, operators that know what is happening. We dig below the ground between twenty and fifty meters in very dense areas. So there are indeed risks. However, the sharing of those risks and the contracts that we are implementing are fully respectful of a right balance between the company and the client. One point about digitization. It's linked to accounting. It's important. The procurement we have a procurement base, which is administered centrally. And, we have a performing tool looking like what you have on the Amazon portal enabling to order easily, which has not always been the case. It's not always easy to to make the orders. So now we have it with the strength of, managing a central database and no, Grammarly, the configuration of our acquisitions in order to progress, optimize, orient the acquisitions. It's illusory to think that you can manage them centrally, but a tool enabling you to go into a article item based, I mean, can be a tool which is very efficient in our businesses. And, Philip Nouri told me that we didn't answer to one question about the CapEx of APRR, I answered Pierre was this question of the 1,400,000,000 of concessions process and not listed in Germany and other concessions, maybe you can answer and get back to what I said about RCEA I can't remember who asked the question. I'll get back to 2019. In fact, we committed $485,000,000 investment. It's slightly less than the estimate I provided in our last meeting, last August, slight gap with some operations. And for the future, even if we commissioned 3 major operations at the last quarter tonight in Ocea, Macomb, or the 3rd place, will be very active on the major operations of the motorway plan with our 2 operations, a 75 Kilmoffiram, a for I00 and Termo Ferron, a commitment of investments of 1,000,000 with a decrease that will start in 2021 because we're on the €400,000,000 on 2021 and €350,000,000 in 2022. This is the, future that is taken into account as of today. Good evening. Nicolas Morang, Morgan Stanley, I'll shoot in many directions. M And A2019 was devoted to concessions. Will you change your ammunition? First question, second. On property, very good year 2019. The competitors is more moderate. What do you see at the fashion terms of perspective of reservation and margins And about, construction, you talked about the scissor effect of the margins, the inflation is pacified. Is there a little bit of hope to see the margins to ramp up in 2021, 2020, 2021, then on motor, Motorways, if there's no volume, will there be a rise in the margins in 2021 on services In France, in 2019, you are lagging behind your competitors. Since you are you more cautious about the cycle to grow the margin 2025 basis points per year, And last question, we can try it on the AP to R traffic. What are you seeing since the beginning of the year? We hope for good news. Thank you. Let's start with Philly because he has the mic. Naturally, I won't give you the figure, but the trends. We registered a very good beginning of the year. With in January, without the shadow of a doubt, the ongoing effect or impact of the strike of the, railway, French or railway. Very good beginning of, winter season with sequences Friday, Saturday, Sunday, Monday, very dynamic on the APRR and the other network too. However, a heavyweight traffic, which is decreasing, we are on a growth close to the figures that SGL alluded to for 2019, plus 0.5% and plus 1%. Can you hand over to Olivier? Hello? For property, yes, we had a very good year. With 5000 housing units. When we talk about 400 more, it's, block sales of, student residences. But, however, it's a very good year when you say that the competitors are really at pain. It's not true for everybody in the results of our competitors in property. There are some good, very good, and some bad. It's due to the capacity of renewal of the book of orders, capacity is good with us. We have the capacity of having a good, forecast, and we'll have nice tertiary operations in the pipes. There's no decrease in activity. Neither in 2020 nor in 2021 regarding property. Regarding construction question, is there hope to see the margins increase. If the question would have been shorter, that would have been the answer. Yes. There is a light hope to see the margins increase because the SISSA effect will come to an end and there is volume, which is the first criterion for, upturn of the margins. On the motorway part, decrease of volume. Can we have the margins progress? We're working on that. Then it's very sensitive to the volume. It would need this decrease to be moderate if the decrease would be more significant it would possibly have an impact on the margin since we are today in a scenario of moderate decrease of volume we can maintain the margin and why not improve it slightly. Another sensitive element, it's the industries, you have page 22 of your booklet. The growth is not done through the industries because We had a lot of, works with less industries and the mix beyond the, sales can be very impacting one way or the other. On the energy system and line of business, the more the profitability rises, the more the margin is difficult. The work will led with strategic plan of the line of business is, delivering. We successfully found the operational function by keeping the proximity and by being ambassador of all our specialties. And to mix this capacity to go on doing works and delivering value on all the territories where we are present, this is underlying our progression little by little of the profitability of this line of business. What I may add is there's no exceptional effect in the improvement of profitability. We are on long run work, little by little, not by notch. There's a real pride of the team of the line of business to carry on. They're all convinced to go on at the same pace It's tougher now. The more you climb. It's the, gap. It's the added value on excessively technological part be present for them to grow, thanks to people who are on the ground and making more and more innovative offers. And the time being, we have areas which are lagging behind and we try to improve that The improvement you have seen for the past years is mainly a, How should I say diminishing the gap? There's no reason why we couldn't reach 5%. Now, if you look at our major competitors, some aren't doing that well at all, some are doing better and for quite a long time, proving that those are, projects of, several 1000, 0 to 8, processed that as a system to go up to a team of 2 or 3 people doing some maintenance somewhere The major interest is when they're aligned and they all got it. It's a win win situation, but it takes quite a long time to get there. And the best in business are there for quite a certain amount of years, then we remained on our core business, European core business. We don't have what some markets in North America where the, brand mix are more important than in Europe. However, the acquisitions are without common measure. We don't want to get out from our ecosystem. However, we have capacities today. We'd like to grow in Belgium in Germany, and we have already some, how should I say structures? Existing, but we don't have the possibility of hitting hard there, but we are very present on other lines of business. There's an exception to what I said. It's Spain Nancy Rose Emmanuel, I think it's really we are leaders on the market and those businesses in terms of volume, geography, but also economic performance, yes, we will go on. I just hope that we'll be able to maintain this rhythm our pace. On the M and A, yes, it was more concession this year. Let me remind you that before we made some important acquisitions, crop man in the Netherlands, which also priority in Switzerland, and acquisitions, smaller ones, adding to the Spanish geography. And we told you that 2019 we would focus more on integration, and the only significant acquisition was McCully in Railway Rail Road. To start and come back with a real player of the railroad present in all the businesses. We do not have structuring and transforming, projects on the short term, but we will remain open on the energy system branch, a line of business, either for acquisition of technology on the French territory or add to our coverage in the major European countries. I quoted previously. It will remain Bolton, so to say. And on apart from energy and services, there's new there's no nothing really new. We had 10% growth 2 years running in our contracting business. And so that has kept us busy, but that is also very much value creating, and that's why we're mostly focused on that. Are there further questions? We shall leave it at that. Let me just remind you that since there were many of you this evening, it was a bit difficult to get you all down to visit the tunnel boring machine, one of our TBM. So, but, people working on, Lot 16.1 have come up with models, and so they'll explain everything to you and, these TBMs will have no secrets for you.