Earnings Call: H1 2019

Aug 28, 2019

Good evening all. Thanks for being here for this presentation of the results of the first half year twenty nineteen of Efash. As you've seen in the movie, with the acquisition of McCauley, a major actor in the French rail, Efeng Zhai has now the whole array of skills to answer to the major challenges of the French rail network. It enables us to answer to all the challenges of Grand Paris Express of Charles DeGould Express. To get back to the first half twenty nineteen, regarding contracting activity remains dynamic, ramping up of the projects of Grandpa Express, but also road and international. Regarding concessions, the traffic is slightly subsiding knowing that the first half twenty eighteen enjoyed the windfall effect of the strike of the railroads in France. Globally, our results are in line with the perspectives we have described during the presentation of our results in 2018. Let's have a look first of the highlights of the half year starting by France, and international before focusing on the low carbon strategy of the group and give you some elements of perspective for all of the fiscal 2019. Then Christian Cassel will present the financial elements in detail. In France, half year has been highlighted by several deliveries on Grand Hotel De Leon Lyon on screen. After 4 years of work and the delivery of a first slot in 2018, we have delivered the CP internacional de la gastronomy 5 Star InterContinental Hotel will be inaugurated in some days, 12th September. Other major delivery, the first phase of the renovation of Otter Du Pallet in Biritz. It didn't escape you This hotel just welcomed the heads of States of the G7 meeting. This first lost heart in October 2018 mobilized 200 people without interruption to renew the facade, the roofs, the swimming pool, the restaurant, 40 rooms, seaside. The 2nd phase of work to finalize the restoration of the hotel, the 80 other rooms, will restart October 1st. After a year and a half of works, a fresh construction of Azure Energy System, an aggregate on July 1, 2019, in the lab of medical biology of the hospital of NOCE And Institute of Cancer in Laren. This building is an illustration of the know how of Ephage and the realization of health buildings of high-tech necessity. In Monaco, if Jeanie Seville took part in the town planning on sea of the hours report T. Our teams implemented the 2018 concrete quesons of 10% to 12 1000 tons under protection. It's an extension of 6.5 hectares, one on the sea. On the picture, you can see the closing of the belt of quissons that took place in 2018 January July. The delivery of infrastructure of the launching pad in Ariancis in Peru took place in July this operation was signed 3 years later with the launching pad, the 2 fluid ducts and the mobile gantry. In July, we implemented the implementation of the 10th ultimate power backup 5 years after EDF asked our group to deliver the studies, the qualification, the provision, the assembly and the tests for the ultimate power backups for 36 location of the nuclear power plants. It's the largest contract underway for our energy system with more than 550 employees. In property, Housing Reservations reached 25004 units as compared to 2237 first of 2018. Given some block sales during this first half year, preservation are regarded to be stable on all of the fiscal. On screen, the new neighborhood, Ambrasion, Pontoires, for the creation of 370,000 units and the revamping of the Cartier, of the neighborhood of the train station. In Chattanooga, on the location of the 4 Medical Santal, Efraj Aminagemont started the works of the eco neighborhood La Valle with housing units, shops and offices. It's a true demonstration of our know how in terms of innovation and secular economy from the deconstruction of the school up to the design, management and the various uses. Dynamic activity for our facade builder Go Ye, half year was highlighted by the development of its equity in region and several projects of refurbishment. On screen, top left, Orange headquarters in Lille, the refurbishment of the Cylix tower, Abar Gardin in Lyon, bottom left, Pascale Towers at Plattice, the Kaombo Street and the Island Gettison, Mucanas, in Paris. Motorway activity is on the rise. You can see here the works performed on the strips at the Lille Airport, 17 snow obliged 200 people to implement the 100,000 tons of coating in 35 hours without interrupting the schedule of the planes. And the continuity of the presentation of the results 2018, Activity generated by all of our projects at Grand Paris Express is still ramping up. Those major projects are mastered. Let's look at it quickly in pictures. On line 61, the first of the 6 tunnel bores is being assembled and we start work from the former site of Peugeot at Olne Subbois. You can see the delivery of the cutting wheel in August. Line 15 South Lot T2B 100 of convoys enabled to bring the elements of the first tunnel borrower on the side of the Station Crite De Shah. In parallel, the diaphragm walls of Samo De Foursil, the largest of Grand Paris, have been achieved in June. Regarding still on line 15, the infrastructures, electrical infrastructure of all of the line, the energy system line is studying the dimensioning. Line 14 North has been commissioned, delivered. Part of the teams and the machine has been allocated on line 14 South, the starting of the digging started in May. Six 360 meters have been already bored. On Airline, on the project of tunnel going from Osman, San Jose Tule De France, after several months of assembly on on-site, Avaniga, the tunnel board named Vigeni, dug already two hundred meters and will be in the final configuration as of September. Works on the bridge of Bezun go on until delivery in 2021 on screen The Bowstring has been led during the bank holiday end of May. On the AO line, we go on with the program of heightening of the trucks, and we have a new contract for the catenary and metal work of 28 kilometers between Osman Station, Sanazai, notte. On the same line, a fashion energy system won in March the contract for high voltage, low voltage for the stations of Portmaiola Defense and the 9 pits of ventilations. The group is active on the Chardigold Express. The overhaul works on the tracks have been started in various zones between Publish Appen and Maki Marie since the beginning of the year. For the major campaign this year, in the area of Boucher with the institution realizing time to hand back the railroads and the trucks for the circulation of the local train. As you have seen, the group is very implied involved in the project of Grandpa Express, on which are working currently 3000 turn people and more than 4400 in peak time. Regarding the order intakes, Efazimobirdier, won the concession of, revamping of the 65,000 square meters of the area, Otkritville at the city of Laley Rose, on an area of 3 hectares, the project encompasses 900 Apartments 1800 Square Meters of shops and services and the new school. This is a very ambitious environment that anticipates on the regulation environment 2020 and aims at a simplification E3C1. Eefarge Immobilier will create a mixed group with a wooden tower of twenty five meters, a three star hotel and an ownership program housing in the Lo1. This operation adds to several wooden projects underway like the Hyperion Tower in Bordeaux and Council flats in Cerro De Popos. Efaj Ruth will implement the earth's work and access roads of the future European center devoted to Kubota tractors, Japanese constructor of tractors and construction machines on a side of 30 actors in crepierre, it's over 450,000 square cubic meters of earthwork. As said this morning, after years of studies, we want the design fabrication and implementation of the IT monopiles steel foundation of the Wind Farm Offshore of 180 Megawatt in San Nazir. It's going to be the 1st in France. Concession side, the half year has been highlighted by 3 breakthroughs within our strategy of diversification and extension of the length of our portfolio of concessions, focusing on territories on which we are sustainably implemented. We have been appointed bitter in Marseille, province, Airport of Lille. We will do the missions of investment maintenance and operation for 20 years as of January 2020. The project includes works of renovation extension of the terminal to improve the welcome of the customers quality of service will be improved, thanks to a ramping up of many digital tools. All this will be implemented by the teams of the group. In June, we have been appointed preferred bidder for the road Sartorius Atlantic in the region of LEE. The project of 1,000,000 is about the widening and up to standard of the highways of part of the National Road 79 between Sesli and DIGuan. This illustrates perfectly the relevance of our constructor money. We started a exclusive negotiation to the acquired the 49.91 percent owned by Casi Le Rob and the capital of the Iowa Portoulouse Blanyak, which is the concession owner of the 3rd regional airport, French airport with the traffic of 9,600,000,000 passengers in 2018. This transaction has to be approved by the state council on the compliance and the sale in 20 14 of the State Park's shares to Casidiopp. We also look into small hydroelectricity project when they need upgrading to standards in the areas where our teams of Efrajeri Civil And Efraj Energy Systems are implanted. Efresch Kosessio also won the refurbishment market for the reciprocation of the building Ilo Perre in the 3rd arrondissement of Paris that will welcome the police station of Paris Hunt, a first construction will provide the works for this Prestige Building built first in 1908. And for the past 4 months on the area of Draasi, On the motorway A6, APRR, offers to the customers a new service area fully offering fuel at the prices equal to those outside of the motorway. Customers understood what was the interest and this, station welcomed its 100,000 customer on August 13. And as of next year, this station will also be extended as a pleasure break. Group goes on developing Internationally on 2 modes. The dynamic and organic growth and the support of the recent acquisition of our substantial implantation in Europe. And on the other side, our teams of energy systems infrastructure go on export mode projects, especially in Africa. In Poland, we have, as you see on screen, we have finished the building half the Welding factory of Volkswagen and Antoninik near Postnan after only 9 months of work in Belgium after 3 years and half of work, the teams at Fivash Construction delivered the mix that were the 1 of 94 Meta high in Brussels. The one offers a mix of uses with housing, offices and shops within the same build And in the Port of Antwerpon, the teams of energy system, Infashire Mittal finalize the flyover of the skilled by a new high voltage line, which needed the implementation of 2 pilots of 192 meter high, In Senegal, a fashion energy system implemented the extension of an electric ring of 225 kilo volt between Fatic and Kalab, west of the country. Projects implemented the construction of a transformation of fatigue, extension of the station of Caulac and the aerial construction of 225 kilowatt of 47 Kilometers between the two stations. In Switzerland, we started the residential work of Upgrade, Wallace Land, New Zurich, Total Surface of 23,000 square meters for housing units and commercial buildings that will be implemented by summer 2020. Efajmetel, very active on offshore wind farms and on North Sea. John, many projects of sound muffling walls have been implemented, as you have seen here, also in the picture near Hamburg. In Spain, our teams are implementing the Sun Farm of Nunez in Belboba with 500 megawatts. It's the largest Sun Farm in Europe unable to deliver a clean energy to 250,000 people. It will be commissioned in September 2020. Beyond the sustained activity, order intakes remain important with some major projects lies the EPCI contract of marine infrastructures of the gas terminal of Chantotou Aminim off the Senegal and Mauritania coast, but also the offshore wind farm of Moray East Scotland, which is mobilizing several factories in the UK, France, Belgium and Poland. Projects compares the design, provision and laying of 100 jackets foundations of 85 meters high and 1000 tons each. In Spain, our teams won the contract for the implementation of technical lots of the new hospital in Cairoil. In Germany, a contract of over 1,000,000 for the modernization of the Royal Track Emberhausen in Renani, North West Vale. Germany still regarding concessions, we finalized the works on the motorway A94, that will be commissioned delivered in October. In Senegal, the motorway of the future toward Delvenir. It's very successful. The growth of the traffic was 150,000 transaction per day teams that re mobilized on improving the service, security and flow. In export mode, in Berlin, a fast energy system implemented 2 transformation, a total transformation stations north of the country in Calgary and Mamanville 800 kilometers away from Kota Nudi capital city. This will enable implementation of a high voltage line feeding all the country that up to now was subjected to several cutoffs In Ghana, we delivered the port platform of 100 hectares in the port of Tema, north of Chile, the Sunfarms of Watacondo, our 103 Megawatts, implemented by our teams, the Fresh Energy Systems, and it's been delivered in April. It's one of the most important of the country, one of the 10 most important of the country. Was visited by Mrs. Susanna Jimenez, cabinet minister of Energy in Chile. Gbouty the teams of Efesh, Jenny Seville, go on with the works of desalination factory with the production of 35 1000 square cubic meters per day. This will be the main source of sweet water for the inhabitants of giblets And code D'ivoire, the teams of efficiency energy system won 3 contracts, strengthening our sustainable situation in the country. 9 electric stations in the city of Abijon, restructuring of high voltage of Abijon. To enable the inhabitants to have an access to all the electric services and the conception design construction of the dam of Singapore Aowati at a capacity of 44 megawatts. Following this 12 France international activity of our various departments, I wish to focus on the topic which is dear to us. For the CF 2019, we choose to strengthen our engagement and commitment to low carbon strategy. Beyond the digital transition I alluded to, we are convinced that the environmental transition, which is a fantastic opportunity for our different businesses. So more projects are still acting as a catalyzer of solutions by all of our businesses. It's in this continuity that we have oriented our policy of innovation and our R and D investments toward the low carbon economy. It's in this view that the group inspired of the TCFD process task force on climate related financial disclosure its extra financial reportings as of this year. We signed a new facility of credit of 1,000,000,000 and margin of credit depends on the performance of the group in 2 social criteria and environmental criteria. We aim at a global reduction of a greenhouse gas effects reduction on all our businesses. We have to be proactive to reduce our carbon footprint, as you see on the left side of the screen, but also as a player of construction, our role is to support our clients in their own process of reduction of their carbon footprint by developing alternate solution and deploying our solution low carbon in our office, as you can see, on the right side of this slide. I suggest to share very quickly some pillars of the commitments of this carbon strategy put forward by the group. This slide summarizes the levers enabling to act on our strategy, low carbon, bearing on innovation, training, demonstration, support funds and all this framed by a very mobilized governance. Allow me to put forward 2 concrete examples. The strengthening of the off-site line at the first construction through internal innovation but also acquisitions such as Bathroom's HVA concept, totally set up and factory with all the wiring and types, reducing the construction delays, reducing the waste on location and all are recyclable. The last one on the left hand side is called wowed because it's in wood. The acquisition on 3 production sites of Chapon Fontainez, specialized in the implementation of industrial frames and traditional frames, beams and walls under the Brown Savar. It enables to have a vertical integration to better understand in-depth those businesses. Finally, the acquisition of the company B3 echo design, specialized in the transformation of containers, out of use, in places of habitation and housing units, a technique which is within a rationale, our Circular Economy. Second example, the implementation with our partner impulse partners of the 1st French platform, totally dedicated to materials equipment and low carbon processes that we have named Sequoia. Sequoia aims at enriching in all the solutions and the city and sustainable infrastructures, the array of low carbon solutions available to us and to our partners To gain efficiency and consistency but also in rapidity, we have started the creation of a French industrial club of low carbon, open to all those who contribute by their innovative capacity to the urgent mutation toward a low carbon economy. Let's get back to the major figure revenue up by 11.6 percent. Operating profit at 1,000,000 3.7% progression, combined with a new decrease, significant increase of our financial debt leading to a progression of 33.6 percent of net profit group share, FND 1000000000, intake is up 3% up to 1,000,000,000 we confirm the perspective of progression of activity and results for 2019. Thank you for your attention and Vice Christian to give you the detail of our financial elements. Francois? Good evening. Good evening to you all. So, I'll be commenting on the major figures that have just been given, beginning with our revenues, you see here that despite sluggish growth, of all the concessions, the group's revenues up by 11.6% thanks to the dynamic of the contracting work and essentially organic growth close to 11% due to an internal in house growth is remarkable. On the right hand side, do you see that the performance is well balanced between its national plus 13% and France plus 11% course, you remember that in 2017, 2018, it was the international development that was driving our business. But today, we have a more balanced growth. The increase of business concerns all our construction sectors. Now we'll be commenting on these And on the right hand side, you see the balance that I was referring to that plus 13% international plus 11%. So no difference in the share has been growing by the acquisitions that we undertook last year in the Netherlands and in Switzerland revenues is given on Page 37 by country. The highlight in addition to these acquisitions is the strong operating results per branch are representative of course of what we're expecting for the year concessions is up 11% and works 16% with a 14% growth. Operation performance is driven by the dynamic. The volumes, more than by the results of operations, in particular, case for construction, where margins are slightly down, whereas it is growing in other branches. The slowdown of the group's margin is essentially due to a change in the the mix of constructions. So we're up on construction, and you see that the 2 sets are significantly improving their contribution to the group operating profit plus 1,000,000 and plus 1,000,000. So by sectors, we're up by 115%. With the acquisition of Efa, Switzerland, In France, plus 20% growth you see on the slide, 8% growth in France. Actually, it's 20% in property development and 5 point in the, in the works and construction. And plus 5.8% in the construction work, you see that we benefit from an easy construction because last year, we were down 10%. You can see that in residential, that is still bullish, And we commercial centers, data center in Orange, and we could have had the teaching hospital embraced and also This is a new structure in our work. These midsize developments, Construction in France is still suffering from the scissor effect, which is with the prices, which are increasing in the Greater Paris region. The operating has an EBITDA of 38% in growth. And what we note is that in this period of significant price of construction costs, we can actually rely on sticking by our commitments and promote have been greater difficulty in mobilizing construction companies. And this is the strength of our integrated model of within a first construction. We begin this delivery of the Ruval Office Complex in the 8th Street of Paris. 7000 square meters and has already received 3 architectural awards. And, in particular, hosting today, the law of law of Xiid. We also have very good momentum in front wind infrastructure with the ramping up of the Grand Paris Express, as we saw in pictures earlier, contributing to over 1,000,000 for the first time. Compared to through periods and hence, the growth of 30%. Slower growth international with a market that is still strong for public road transport in Germany. We're seeing also a startup to the rotor in Carriere in Spain. Slight slowdown of the offshore activity as well, but because of the phasing of of the contracts with Schmalders, this is typical of this period of the year. So the traditionally negative result of the branch in this first half sorry, the margin in the first half is down by minus 1%, but has benefited from the increased activity. We'll have a look now at the Paris ring road where we undertaking major work for the noise reduction bitumen on the Paris Orbital road. Energy growth is still strong with a growth of 8.6 percent, driven by 20% and by 12% organic. The capital being coming from KropMAN in the Netherlands which was included in the but our export margins are not quite as strong, even though we have seen some successful growth as well. In France, the growth is limited, but still robust at 3.8%. And our businesses quite stable across the regions and specialities as we are traditionally producing. In Brussels, we are undertaking the junction of the tunnels between the node media station And we're providing also the electrical supply, the fiber optic network and fire detection center and the dynamic signaling and ventilation of the tunnel. And this was put into service commissioned on 10th April last. For our concessions, Let's begin with APRR, which continuing to grow with traffic that is suffering in the half in the slowdown of light vehicles. The EBITDA margin comes to 76.4 percent, and we're continuing our program for investment for the motorway restructuring with the A75 in and the A-four eighteen kronobel. And we shall see this in the financial investment flows And our concessions in France are slowing down slightly at -2 percent, but growing on the 65. The Avenir Motorway in Senegal is still a great success and overall profitability of our concessions. Is improving. We've talked about our construction PPPs, We have, on the right hand side here, the arena in reims, and We also are an aquacenter in Amia, which went ahead very well and was delivered. So to summarize, I've given you on our income statement. I've given you the main figures for other operating expenses down with also reduction of our net debt essentially with APRI. And this is essentially due to the comparison to new June 2018 when we still had a hedging, a hedging contract and the financial charges now properly standardized other financial income expenses go from minus 1,000,000 to plus 1,000,000, essentially driven by the dividend received for GatLink for 1,000,000, which has not yet consolidated. And so this is a financial income. We have, the negative impact of the transformation of CIC the special French government measures for taxing corporate profits. Impacted also by the inclusion on the 30th June of a 30.02% charge, whereas in full year, we would have a rate of 34%. So the corporate tax is slightly down there for in France. For the full year period, we need to take into account a higher tax rate than in 2018. It was 32.5 percent because it will be degraded the transformation of the CICE tax. That our net income is 1,000,000, and the good performance of the first half, but also let me remind you that there are specific factors In particular, the corporate tax and also the decline of the FRA June 2018, there will no longer be any involvement to that. And also the impact link, which is fully included in the first half of 2019. For our balance sheet, no major change in aggregates. We have 1000000 for 1,000,000,000 the main change is the presentation of accounts of the new IFRS 16, which needs to be taken to a passive financial debt for our intangible assets. And you see, we have, we have a debt for, of under IFRS 16 was 1,000,000, whereas in the past, it would have been a period of some 1000000 to 1000000 this IFRS 16 debt, non being a nonback 1, is not contracted with bankers. We have chosen to analyze our net debt, excluding IFRS 16 as most of our competitors have been doing. And so in the bridge of the evolution of our debt that we are presenting, we have 10 point 1,000,000,000 net debt. To be clear and consistent, we remind you that leasing debt which was stood at 1,000,000. It's in the gray colors here. And So the net debt figures at 1,000,000,000, which is going to 1,000,000,000 The generation of EBITDA for the half is growing by 13% restated for the impact of IFRS 16. The working capital requirement variation is close to what it was in the 1st September 2018, slightly down 1,000,000. If we look at out contracting only, which was 1,000,000 in 20.18. Interest and taxes goes down with the significant decline of the financial interest paid and investments in, of production tools in contracting at 1,000,000, up slightly up because of mobilization of the Grand Paris Express and the acquisition of the tunneling borrowing machines. The investments and concessions of 1,000,000 compared to 1,000,000 last year, essentially at APRR. And this leads us to a free cash flow of negative 1000000 And it is traditionally negative in the first half. It was negative by 1,000,000 first half last year. And then in terms of acquisitions, we've had relatively limited external growth as we announced, we said we want to give 2019 for dedicating it to the integration of our acquisitions And with that, with the Mickoly Rail company, as we saw in the introductory remarks, variations outflow are not significant, but operations in capital include moving some securities and dividends paid by Efraj to minority shareholders in the control companies. And also, of course, an increased dividend to its shareholder of 1,000,000 compared to last year, and this leads to an increase of 1,000,000. And this leads to a net debt to 1,000,000,000 compared to 1,000,000,000 restated at the introduction. Remind you here on the left, debt in full year with the historical figures that have been posted. And on 30th, we generally see the debt of 10,000,000 with the black that is detailed on Page 38, Now if you look at the evolution over 12 months, restating the leasing debt, We published at the end of June a debt of 1,000,000,000, of which 1,000,000 for leasing So we had a stable debt compared to the between the two periods in this. This stability is still includes the increased investments, in particular, the increased stake in Get Link and the quarries in France and And at the beginning of the year, the 1,000,000 for Mikaeli. And this is our buyback program for the 12 month and of course, this have counterpart on the free cash flow of the group and leads to this stable debt at 1,000,000,000. I was a bit long on airfare 16, but I think it was necessary. The order of magnitude in the data are significant to compete at it. And in particular, the variation of debt and and the cash generation over a year, but the standard doesn't have any significant impact on our results with the exception of EBITDA, as mentioned in the bridge. And we will conclude with our Order book at 1,000,000,000 is historically high, stable in construction. We haven't had any new major contracts, but our ongoing contracts, irregularly being renewed. An increase in infrastructure is due to the road contract in France, but also the major contracts Murray in particular. And in energy systems, as in construction, we are renewing our log book. And you can see this is growing by 3% in total despite the consumer of the contracts under the Grand Paris Express And with that, I've finished with the detail on the figures and now leave it open to you to ask your questions. Good afternoon. I have two questions. The first concerns the Lille Lesca, the airport, Lille airport. You were rather squeak the figures. Could we have some elements about the amount of the investment passenger flows and also maybe the fees that you've had to pay back to your predecessors SunF who used to pay fees and what are your commitments of Efraj concession And also, could we have figures your outlook for investment for the full year 2019. And in particular that of P2R, thank you. Maybe first on the first question on the Lille Airport, the call for tender was designed that we merely bought the part of the non amortized capital over the last year. So the acquisition itself is very limited, less than 1,000,000. But to that, we are committed to an investment program of some 1,000,000, and we're expecting some 1,000,000 in the 1st years. And then 3 years with after that. And then Also, because that depend of course on the increase in traffic over the 20 years, we will still need some additional extension CapEx. Now the first fundamental commitment is 1,000,000 spread out over 4 years, 1 year 20 and 3 years taking the balance. And the principle after that is that beyond a certain threshold of revenues. We share that with smelling, and these will be under the same conditions as previously The turnover is roughly 1,000,000 We don't communicate by asset. That was as much information as we can give you at this stage. Well, we can suppose that if Fersh is going to be improving the industrial performance of its assets, Well, look, there are various settlements. We have prepared this bid with a lot of precision to define what were the investments that we felt were important to support the growth and we were involved core with the experience of the teams at the Masse airport. And based on this development plan, we're undertaking these investments. And as I said earlier, these investments 100,000,000 will be undertaken by the group's contracting teams. And then the historical value of our concessions are essentially light in the work that we undertake to begin with. That's how But for your budgets of investment well, for work, it's $110,000,000,000, but to doubling up with Grand Paris and the acquisition of the tunneling machines It should be some in excess of 1,000,000, excluding the IFRS 16 impact. But outside of ABPRR that Philippe will be referring to. We only have, building construction PPPs some 1,000,000, so something quite limited therefore. Philippe, would you like to add to this? Good evening to you all. Well this year 2019 corresponds to the peak of investments And I think when we met in February, we said that we reckon the investment for 2019 1,000,000, and I confirmed today this budget envelope of 1,000,000. And I can show you that we will be slowing down next year with an estimate of 1,000,000 and some 1,000,000 in 2021. Just to be exhaustive, of course, this does not include new concessions, of course, which case, of course, they would be. And if we do sign the RCEA contract at the end of the year, you could really mention that we'd have an investment of 1,000,000 additional 1,000,000 in 2020. Good evening. Pierre Rossell, HSBC. I have two questions. The first is on the volitional margins in construction. Particularly in France last year because of the electoral period and the disappearance of certain fiscal niches, what how do you see the margins moving in construction for H2 and next year. And my other question is, I've seen that you had to bring down your prices from 3,000,000 Frank's CFA and to 2,000,000 Frank's CFA. So where do we stand now exactly? Yes, good evening. On the margins in construction, Christian was saying that we were still suffering on a number of contracts at the end of the scissor effect. But for some time now, we're saying that the market is competitive and this is still the case. Despite the fact that we're seeing some signs of take up in certain regions and In particular, with the electoral period, our revenues only consists of some 30% of that public contracts and we feel that the electoral cycle will not have much or any effect at all on our year is yes, we've had a request from the government, but that was already the case when we met last time in February. And we undertook this line and we have a proposal for compensation that is currently being discussed and which obviously would imply the extension of our concession. But you've seen that in fact, the traffic has been very positive in reaction to this lower tariffs. David Demet, Barclays. I have three questions. 2 on concessions. The first one I'd like to come back to the lowering of the margin of EPE ARR and it seemed that you had, you expect a higher impact in this first half and I'm somewhat surprised by the evolution of margin. Do you have any explanations for this slower growth, even though the fact the traffic is lower, but I have another question on MEO. It's been several quarters that we've seen traffic slowing down, what's happening there? What are you doing to try and counteract this trend? And my last question concerns on your road business. How do you see 2020? I know we're still early. And obviously, there'll be changes after the municipal elections, but are you expecting a take up of new business? Or are you hoping that the decline will be slower than in previous cycles. Philip, maybe? Well, concerning our EBITDA margin, the progress over the this first half is consistent with that of past years. The extension was quite significant country to what to use it and not maybe not the same level of 'twenty, but it is, one of the longest winter season years. So these recent years, so EBITDA margin for the first half is not necessarily significant of what it will be at the end of the year, even though we are already anticipating growth for the full fiscal period concerning the traffic on the MEO via duct Indeed, the you've noted that there is a downturn of the traffic and must say that the summer traffic is not better. It's still at the same order. And so we are currently studying this. We are looking at the issue. And we would like to understand if this is a just a local issue or rather a transfer of people traveling on other motorways. We're currently studying these different trends. Laurent, could you give us some news about the motorway structure? You haven't often met him, but I'd like to introduce Laurent Bijou, who is the chair of our motorway division Just concerning the growth of business in 2020. Today, we are reasonably optimistic. Now let me explain why. You know that our business depends a lot on local authorities. And you know that the the general fiscal health and budget health of our local authorities has significantly improved. People now have cash. They have a capacity to invest. And the general layout has changed because now we have major accommodations that are less sensitive to municipal election effects. And because of this, We are expecting 2020 to be slightly up compared to 2019. And in fact, the forecast today in terms of investment of local authorities is +1.5 percent increase in 2020 compared to 2019, and then there's the rest of the business. And we have these major projects such as Grand Paris, which is going to have direct impact on our business. I mean, it's very underground, of course, which goes without saying, but it clearly is advancing well. And so we're relatively optimistic for 2020. We could also add to this that we are far more flexible than in the asked. And we have kept lower headcount than in their path. And I think that the general organization is much more capable Stephanie Datta, Royal Bank of Canada. Three questions. First, regarding the targets of NDA remaining slightly vague. Could you elaborate on that on the margins of the various lines of business? And can we expect the trends of the first half year to be carried down to the second half year? 2nd question is the scissor effect, you mentioned for the construction, how we arrived for the projects of Grand Paris, you have contracts that are adjusted properly. And third question is about your investment in the Get Link. You paid over are you interested in acquiring more shares and the watch price. Easy, easy, your last question, right? On the ceasar effect, you're absolutely correct. We suffer a lot more in private markets and in building because they are on longer periods and they are non, changeable. And in the major markets on civil engineering, it's indexed markets. So we have lighter smaller effects. On the NDA targets, you understood the trends, the fact that our intake order is positive. We see no major reversions. The major problems we have with the slight subsidence of the construction will not be finished in the few months. However, we go on improving on infrastructure, we enjoy the volumes. But remember, I explained in the past by on the major project of Grand Paris, we're enjoying volumes, but we have still a lot of risks. So the recognition of profitability is in the future, but the volume is positive and enables to improve profitability. And energy system, we go on working because we're not still the best. We're not yet the best. We are still working to improve our profitability. On GetLINK, you're right. And your question about the average price at which we acquired GetLINK I insist again. It's a concession for 2086 long term the entrance price seems important compared to the creation of value. We didn't change the terms of our communicate of last December, which are still right. And at the scale of a concession for 2086. It's okay. We're still ready to improve our participation, but it will depend on the price of the share. Two question, one quick one about the motorway traffic in summer. 2nd quarter, as expected, was decreasing according to the base effects. What happened in July August? Next question, more strategic and wider question. You wish to make 2 operations in airports on the half year. Who could be surprised by this timing. Some of your competitors invested earlier The price of assets is rather high. What's interesting you in this kind of assets on Legal who understand the works part on to lose. How do you think you will create a value? And more globally, you were saying That would be interested in investing in geographies where you are present for quite a long time. Does it mean to say that you could acquire airports in Senegal in Belgium or elsewhere? Fini? On the summer traffic on the motorways? Yes. 2019 is slightly special in terms of traffic analysis. Last year, we had 2 exceptional elements with the as the railroad strike and the yellow jackets at the end of the year. So we have to be very cautious regarding the gross figures appearing, especially the one in June. August is not over yet. We still have one very important weekend, which is the weekend of the people coming back to work. And if you look, July, August, we are on traffic that will be slightly inferior to the 1 of last year. It's mainly July, which was disappointing. Probably because of a heat wave, right smack at the middle of the month. So we had a very low traffic by July 14th, and July 14th was a base effect due to the strike of the railway. Because of reservation upstream to have attractive prices, people, in spite of all, took the road instead of taking the train. So we have a negative impact on July To get back on the concession strategy, I alluded to it earlier. I don't wish to talk about the airport strategy. No. It's to get back to the positioning of the group and the balance of the group, which is at the same time, concession on the one hand works construction on the other hand. What's of importance to us is to focus on elements so that the whole of the value chain could be mobilized easily. And for us, the first risk of the concession bidder is a political risk. It's not a risk we can eradicate, just like that, but we're convinced of being a player on the territory an important employer, an important player in the economy of the region in charge of a social economy responsibility strengthen its presence and make it more understand this balance between concession and works on the other hand. Hence, the political risk for a concession, which is in the place where we are a recognized player for quite a long time, like in Senegal is totally different from the fact that if we would be a financial investor from far away, a remote one. This being said, we wish on the medium long term maintain this balance between works and concessions. A very significant part, and we're close to this balance and contribution net result of the group by our 2 activities, works in concessions. In the territories where we are, for quite a long period of time, we can also be a concession owner if you do some works. You have motorways, you have airports, you have small hydroelectric concessions, And this is the approach we led. And if I resume with the example of the Lille Airport, there's the work aspect, which is right away, for the territory. Of this region to be basically the partner and the basic contractor for the development of the airport of the region. It has a very strong impact for the region for all our lines the region and the collaboration is everyday clients when you do housing units and all that. The fact of working and be part of a basic part of the work in the region is very important. And our first wealth is the men and women of the company. Having a company present in concession and in works in the given territory makes it very attractive for the people in this territory. I think that Senegal proves it every day as the vision of Evaj and Senegal is totally different since we built this Ottero Delania this motorway and conversely, this position of the concession owner of the motorway is justified by the fact that IFA is a major employer and the economy of Senegal with a clear social responsibility and it will go on. What you're right is that in the future, the assets in concession and lenders in Germany were very present because we have to look Germany, you have to look at the lenders, not at Germany as a whole. We would be interested in that. Same as for Belgium. I hope I was clear enough in my explanations. Hello, Jose Poujerd, Kepler Cheuvreux. Three questions. One on the scissor effect of construction. Can you be more specific? From the items, around the costs, have there been specific costs for, materials, salaries, something specific, or is it all the costs that were submitted to inflation? My second question is on the margin of infrastructure, which is improving in margin. But when you come up with a ratio between the growth of the revenue, 1,000,000 more than first half year last year and that the Net profit decreases, is there something else? Is it the right way to look at things or should it be seen on an annual basis? And another question the railroad activity, which is expanding, has margins which are superior or inferior to the infrastructure line of business. And last one, we read recently that there was a lack of bituminous material in France. Is it impacting you? On your first question regarding the scissor effect, I'll give you an example. First example, what's happening in either France and certain amount of provision of equipment of small rental of equipment. You have the boom of activity, which is very important by the projects of Grand Paris Express. Anything involves inflation on the costs. And it makes it that building sulfur. Construction suffers because of the boom of other businesses in the same area. So that explains that. And some businesses intention, you have also precious from a salary point of view. And the 3rd element on construction, a certain amount of providers in the chain of provision are working on shorter periods. And during the bid, the call for tender, They said they would be able to do something for some price after half a year. Their capacity is to have better markets And since there's an increase of activity, you lose a certain amount of subcontractors who will go on more recent contracts with better prices. If you look at what's happening with the building contractors, they all suffer due to an increase in the prices, but today, the real issue and we're not there yet is to successfully report the costs onto our final customers. And we are lagging slightly behind hence the ceaser effect. On the margin infrastructure, I think that the on the half year, it's not representative. Were still on negative margins. And the only element I'd like to put forward, but we alluded to that is that the enormous part of this growth in revenue comes from the works on the Grand Paris we do not push on the margins. It's revenues that are with 0 margin and they have a direct effect on the calculation you're making. But what's important is to look at Rail is still a specialty sector. It's very demanding. We were looking to to reinforce our capacities now because we didn't have certain resources that were fundamental required to be a strategic partner for SNCF Riso, the network manager. And of course, it's a very specialist word, and it's but it's also a business in which there are not that many clients. And so we have to be totally dedicated to those clients day night and above all at night. In order to be capable of delivering the margins required for this type of business, which are highly specialized and where we expect for higher profitability. And for the bitumen aspect let me ask Laurent to give you the answers. Well, for bitumen, it's true. The situation is somewhat tense. But we have peak periods. It's June, July, and then September, October. That's when you have the highest consumption of bitumen, some 300 tons, a bit less maybe in June of 2. And we had a lot of problems in the refineries in France in the first half. And you know that there are not that many refineries in France because they've been reduced in half over the past 10 years. And so this immediately creates problems. We were rather concerned for July But then pretty much it turned out, really noble. We just had to offset certain projects, which will push back to August, maybe. But we are keeping our eye open because if a refinery were to stop again a shutdown for technical maintenance in September, it obviously would have negative repercussions for us. And so we could still encounter a tense situation in September. So we will remain very watchful here and very close breathing on down the necks of our suppliers to make sure that we have what we need. Yes. Good evening, Ernie Marnier. Just one question on HS2. There's been a lot of articles in the British press and also in the French press concerning this project, which according to some competitors might be even canceled or at least amended by the Johnson government you've had a study and contract effects and they fences, what would be the compensation for you, where the project to be actually canceled? Let me take the opportunity also to introduce Gil Savi, who is in charge of a French City and Defense Metal to give you an about HS2. Yes, good evening to you all. Yes, it's true. There have been a lot of comments in the press on HS2. It's a project in which we are extremely cautious. We've been advancing for some two and a half years with teams working on this very carefully in the study of this British contract and today, in our order book, we're only taking what is guaranteed. So for the moment, this gives us a visibility that is cautious, but, I'd be depressed like you do, but it's true that we're also in contact with the client who was expecting the announced audit following the change in the British government. So it's not a surprise as such. And they confirmed last Friday, that way they were ready to face the audit. And well, that's where we stand for the moment. They even confirmed that, to ask us to keep our study teams on the ball for a few additional months. Good evening, Nicola Maurer, Morgan Stanley. I have a few questions concerning your property development first half the year was relatively good with a market that seems to be slowing down in France. And there's a slightly lower supply, but I know it's very volatile, but is this basically a growth year that you expect and where we could expect good years for in terms of revenues. So the second question is again to come back on your margins in infrastructure. In particular, roads, where you are historically lagging behind, the people like, Nicholas and Derovia, And the activity is in full boom. So this would seem to be the good year to come out with acceptable margins. Could we expect that you will contemplate the 0 margin projects in the Greater Paris Express. And then could you give us some ideas on what you have in the pipeline or for your major projects? Who we saw the information this morning concerning the off shore project in San Nazir, but are there others like Grand Paris or in Africa where there's a constant need for renewing the order book. We see that it's somewhat sluggish. So is there any anything moving in that area? Well, Olivier may be for the property development. Well, yes, percentages are important, but you need to come back to the actual figures. We did 300 additional housing units by theendofJune. So and whether you do them in June or July, of course, changes the percentages. But whereas I wasn't worried for work, but for electoral periods, for in electoral periods unnecessary slowdown because we are no longer receiving any construction permits. And so we're expecting some decline in the reservations for 2020, 2021, and even maybe already in 2019. I've already had an option to say that with some 45,000 Housing units per year, we only pay way 4% in the market. And so the idea is more a question of renewing our portfolio and creating new business rather than trying to find out whether the macro market is growing by plus or less 10%. So It's not what's going to impact us so much. All the more so as I'd already explained on other occasions. That our developer activity gives us medium term visibility that other promoters don't necessarily have, and so much then for our vision of the property development market. For roads, well, there's something that you need to bear in mind that the margin of road manufacturer is very dependent on their industrial power and Afaz root doesn't have the same industrial Cloud as Cola and Erovia now. And we don't have the we don't have the same fallout coming from quarries and the bitumen, but Laurent is absolutely right when we say that it's a year when we should be able to produce significantly better than usual. I would have, let him answer, but, I could have done it in his place. Now another comment on our order book. The 3% may seem low as such. But don't forget that last year, we brought in the order line 16, batch, which we did the 1,000,000. And so Now we have lower orders in terms of infrastructure today, but we're doing it for much smaller projects And we haven't at all lost that 1,700,000,000, which could have had a 1 off scale effect, whereas, today, We're continuing to add to our order book. Now of course, We've had the offshore wind farms that we're talking about this morning. And we don't know what may appear in the UK, but our two contracts in the UK that weigh over 1,000,000,000, not included. We are on the A3 motorway in Germany, which relates to 1,000,000,000. And you know, we have buffer again, the end of October. It's we should get a decision by the end of the year or beginning of next year. And in Africa, with contractors not quite as large, But for us, in the short term, what was important was to have a new dynamic in the Energy Systems branch where as you've seen, there was a sluggish order intake intake in distribution post in Africa, but we have renewed a lot of contracts in the first half and even a few others, which are currently in conclusion phase. But I think that the real issue behind your question is the factors do not affect the base effect of the billion for the line 16 last year. We have more problems in ensuring that we'll continue to grow the headcount and train people and make our workers happy than actually finding new contracts. That is our very positive dynamic today. And then we under Guillaume's leadership, the teams are going to be working on the new phase of the new call sur tender for the Grand Paris Express and Guillaume in September. Will be involved in this. Yes, the Grand Paris company has redefined its projects and they have selected their contract managing consultants on the end of July. And at Systra, and they will be providing this assistance. And this is now going to lead to large calls for tender at the beginning of 2020. So we are monitoring these and it's going to be a design and and so forth. Line 16, as we already said, which is the largest batch currently in work, is truly an asset that will be lies already on this new phase of tenders in 2020 and it's going to be enabling us to stay very present very close to the ground in funds and also for RCA as well. If I may, at a last comment on M and As, you talked about a year, digestive year with the acquisitions recent acquisitions. Now do you not feel capable of continuing to feed the acquisition flow in particular in energy? Because it's a market that is still quite splintered. I mean, you have Lille now, you have Toulouse, And you get we get the feeling that you would be strong enough to add more in the energy division. Well, that is indeed the case. The problem is having the right women, the right men to do this, the right teams to do this, And we want to make sure that the people joining us share the same values. We're a family. We're not just a big anonymous machine. And we felt it was important. We're still doing some small acquisitions there still are some, but not as significant as what we did in 2018. In 2018, they were more significant acquisitions, but also entering new countries. And we thought it was all the more important to actually settle them properly and be able to show that we were indeed creating value with these acquisitions, and we are extremely pleased with what's happening. And of course, we will be willing to but which, as I said, not as significant as the ones you've seen in the past. But in energy, in particular, we are continuing to we are keen to continue and making sure that we have the fair value of these acquisitions rather than going through non or illogical acquisitions. Any other question? In such case, thank you. You've been invited as well as the drink to have some recent innovations delivered by the teams of the motorway concessions and we'll meet in the upper room. Thank you again.