Earnings Call: H2 2018

Feb 27, 2019

Good evening, all. As you may have seen, the launching pad of Allian 6, as well and progress according to the targets we have with the CNES infrastructure will be ready in 2019 for the first launching planned for 2020. Marvelous example of synergy among the 4 businesses of the group. Thanks for being present for this presentation For this presentation, I wished to come up with a milestone report on the deployment of a strategic plan a FaaS 2020. It's through its lens that we shall raise a certain amount of highlights of this period of time that I will complete with a certain amount of more recent elements and perspective for fiscal 2019. And Christian on the side, we'll present the financial elements. As I said 2 years ago, the group is resting on a solid organization over 4 businesses and 7 lines of businesses. We have contracting real estates, roads, civil engineering, metal, system energy alongside concession. The strategic plan reasserted the relevance of this organization and the strengths of the 2 major balances of our group, the balance between contracting and concessions and to know how to be a local player and a global player at the same time. Synthetically in contracting, we set as a target to be a global player in our countries our target grouping countries strengthen ourselves on specialty businesses and project ourselves internationally from our permanent basis. Concession side, we wish to be a player of the whole of the chain of value, explore new segments and lengthen extend the length of our portfolio of concession to remain a recognized player in that field. It's by strengthening ourselves in the countries where some of our businesses are already present that will be appearing as a global player of BT of contracting and attract the best talents of those countries. Well, in the middle of the road, it seemed interesting to get back on some of the important implementation of this period 2016, 2018. Contracting size, we implemented 12.6 percent of organic growth, slightly over 4% on annual rhythm. We strengthened in the specialty businesses, upgrading by organic growth of Groundworks strengthening on rail with the acquisition of Nicoli ramping up of the businesses of deployment of optical fiber, optic fiber, development in renewable energies, sun, onshore and offshore wind farms. Apparently, the group deployed strategy to grab the opportunities linked to the project of Grand Paris Express and won over 2.6 1000000000 in contracts. We experienced a very significant progression of our revenues in Europe outside of France Thanks to the momentum on our legacy markets by organic growth, strengthening of territorial knit in Belgium and Spain acquisition of specialty works in Germany and the entrance of the group in the Netherlands and Switzerland by external drills. Finally, in Energy System, civil Engineering, road and metal. Group goes on bearing on the skills of its Spanish French, Belgium and German teams, in order to implement projects, more and more numbers in export mode, Concession side, we have seized the opportunity to buy shares of A41 motorway North between ANSI and Jeanette. We deployed the recovery plan in 2015 and finalized a new investment motorway plan. We maintained our rotation portfolio strategy in PPP with 6 sessions and 6 new contracts over the period. We finalized with Efsh Amineshmo and Efsh Energy System Our 2 first concession of heating networks were very active on the opportunities offered on the Airports of Leer and Toulouse. And to add to that, this panorama suggests some illustrations Efage Groundworks in Nui Sjossen on the Yule project. The dam of Singhrabo Awatei on Cote d'ivoire secured summer 2018 and our position of concessioner builder it's a group, a fresh APR, who bid on the tender, of concession of the Center Europe Atlantic Road, CEAR. Our model of concessionary constructors mobilized on the PPP project of Motorway A3 in Germany for which we bid our offer, the decision is Efaj goes on strengthening itself as a private developer to up ramp the value chain and it's an excellent means to put forward all the innovative solutions, whereby all of the businesses of the group defers Amina Juman, one major project seen as La Valle at Chate Nibelabri. Nice and and the gastroponic city of Dijon. Thanks to the French and Spanish expertise of the group. With noticeable the success of the Sun Farm Sestas in Geron. Our teams go on rolling out their know how in Europe in Africa, South America and the Caribbean. It's close to 2 gigawatts that have been deployed and we make we maintain most of those power plants and you see on screen Chile. Another beautiful example of the strength delivered by the balance contracting concession is the motorway of the future in Senegal. After a first stage, we have built and commissioned the extension up to the new airport to Dakaal Success is there with a traffic constantly increasing with over 50,000 daily transaction on the toll of Thierroy. Beyond concessions, Our permanent installation in Senegal with over 2000 local employees combined with expertise of European installations enables us to grab the very large project of the structure of this country. The fast train of, the car As an example, we made the inaugural trip with the president on January 14, 2019. And very recently, we announced after a stage of study, we have signed a contract for marine infrastructure for the gas terminal of the Tortue gas fields for BP Offshore's of Mauritania Senegal. And as a last illustration of the implementation, important implementation over this 2016, 2018 period, enable me to focus on the Grand Prairie Express through this map illustrating all other projects in which the group is involved Civil Engineering after the pack 14 North, we secured the lot, south lot. On the E. O line, we have the rail teams and also the teams of civil engineering and metal work. And obviously, The civil engineering with the tunnel borrower, Virginia, from Gambita to Cobbebo started its way under the ground towards the train station Saint Lazar. For the energy system branch, it's also the first secured bundle on the line 15 south. And finally, the very big pack of 16.1 that will be necessary for the Olympic Games of 2024. It's the major challenge for the group for the 5 years to come. It's on the model of organization of Broteania Padeloir, that this project has mobilized over 1000 employees. Following those snapshots of our major implementations, I wish to get back to the development of the group by external growth over the past 3 years we strengthened ourselves in a progressive way. 2018 has seen the conclusion of several acquisitions in France as well as in Europe. Those acquisitions were done in majority on a negotiation base, following an analysis of our capacity to share a vision of culture and shared values. 2019 will be devoted to the integration of those entities and to the creation of value. All those acquisitions were made with a clear will to strengthen our specialties in a given country or to densify our European net. The second strong direction of development internationally is done by the projection and export mode of our No House. Beyond the examples that we have seen, you can see on the map here, the projects that we won Some of them implemented already in Africa and in Latin America. The territory of Western Africa is completed with the hour permanent settlements in Morocco and Senegal. This project have a size between 1,000,001,000,000 of euros involving recognize know how of the group. Electrical Lines And Station's renewable energy industrial engineering, power terminals, and bridges, and rules. They are implemented by secured financing and with, major industrial clients. You see the split of our revenues of the growth of our revenues over the past 3 years. As you may see, organic growth, proof of the momentum of the group and its employees, remains the first contributor for this growth, it represents the twothree of it. And now the vision of the momentum of the group is in the progressive development internationally. Over the period of time, the international share of the contracting activity moved from 23 to 31% while the activity in France is backed growth since 2016. This development is only possible if it is supported by the strengthening of the balance sheet and of the P and L of the group. As you may see over the period, the shareholder equity increased by 50% to reach 1,000,000,000 and the financial liability has decreased by 1,000,000,000 to following 1,000,000 of external growth and an increase of twothree of the dividend. The net cost of debt has decreased by 40% The increase of 20% of the revenue, the increase of 30% of the operating profit and the decrease of the financial expenses enabled the net profit of the group to double over the period. Before getting to the figures, some highlights, recent highlights In the line of our projects of groundworks for the wind farms offshore of Beatrice, I see on screen, we secured a contract of 1,000,000, including 1,000,000 for Efaj, to the Murray East And the Northern Sea. We won the PPP of Ilo Perre in the Center of Paris that will regroup the police station of the 4 Aroni Smart Paris for an amount of 1,000,000. Guitfage Real Estate, Tajjima BBA is very dynamic with new sales of housing units with 4700 sales. La Creek Marcea on screen, all the housing units were sold before delivery. To thank and gain the loyalty of our frequent customers, we have launched a new offer of subscription C230 customers with 2 round trips per month have a rebate of 30%. The motorway, if it's often, it's minus 30% Over seven thousand customers subscribed to this new offer, half of it were already benefiting a offer of proximity. Last but not least, as in French, the acquisition of 5.03 percent of the capital of Gatling we announced on 2017 December 2018. This movement is also within the vision, long run vision of the strategic plan of the group. To add to those are highlights, I picked some illustration on extra financial topics. Without being comprehensive, I picked 5 examples at the core of our strategy and proving our dynamism the dynamism of the employees of the group. The employees brand, our first capital is our human capital. To develop the Efash brand as an employer brand, reflecting our identity, our values our spirit of family, our culture in order to develop, gain loyalty and attract the best. This is how we got in the positioning of human perspective or up to you to invent a human size future through selfies. The employees of the group were invited to illustrate their vision of a human size future through their own vision. As you see on screen, many pick their own work location. Our projects are also a fantastic vector on promotion of the Afagao brand and contribute to strengthening the image and the awareness of our group. It's a driver for consistent implementation of our daily actions and the strengthening of the pride of belonging to our brand and to our teams. Through a fast connection, it's all of the fellows, all of the employees of the group, which are supported and the digital transition. I wish to give to each and every employee a email address and in access to the digital community, it's daily news, it's collaborative spaces its apps, its communities. It's also a way to make them aware of the new tools of our jobs, but also a way to strengthen the connection between all the employees of the group and 1st and foremost, to bring together the offices from the ground. At affairs, as you know, our employees are part and parcel of the shareholder employees it was something obvious to integrate them totally in our digital community and avoid us any risk of digital gap in our group. I know how to make a difference. It's through innovation. The group has implemented supporting funds for innovation, representing 1,000,000 in 20172018. Over 30 projects supported over the period of time, 15 dedicated to the low carbon offer It's also a start box and ID box with over 10,000 employees who contribute to it. On screen, the first shuttle driverless shuttle, following 2 years of experiments, the authorization has been obtained on 2018 January 2019 by our teams from the energy system the dry runs are underway. The operation is to start on 28th March 2019. Now how to make a difference by sustainable development and all its components, has always been part and parcel of our concerns. Some major projects, as you can see on screen, acted and still act as catalyzer of solutions supported by all of our LOBs. It's those innovation that sometimes enable us to secure this project and mainly make their performance even more remarkable. It's in this continuity that the group will inspire of the process TCFD task force on Climate related financial disclosure and its extra financial reportings as of this year. And before leaving the floor to Christian, the fiscal 2018 figures can be summarized with a revenue of stronger in contracting plus 12.7 percent, sustained by the sales. Included in this figure, the payment of a premium power purchase to 83% of the employees of the group in France an amount of 1,000,000 of euros, increase of net result by 22% to 1,000,000 variation of the WCR consuming in cash as expected at the outcome of the first half year. 2018 has been a special year because we have seen the concretization materialization of several external growth representing an investment of 1,000,000 to which should be added the 1,000,000 of get linked Some total, over 1,000,000 invested in our operation of growth, you see that our indebtedness has progressed only by 169,000,000. Then order taking have been sustained and our book of order is now up to 1000000000 growth of 15% over a year. It's a historic top for the group. This book of order makes us anticipate a progression of activity on the results for 2019. We shall then suggest to the general assembly to bring the dividend to and increase of 20%. Thank you for your attention. And I invite Christian to give you some figures. Good evening, everyone. So the main figures again sticking to 2018 revenue. For the 2nd year running, we have a robust close to the tune of about 10% Mostly the, our own organic momentum, it's still there. 5.8% in organic growth about the same as 2017, but there was a more significant contribution from external growth Revenues stood at 1,000,000,000, compared to 1,000,000,000 in 201714000000000 in the 3 previous years. So external growth, you're looking at mostly contracting. We have 3 major acquisitions at the end of 2017, EDC Marine, that was at the end of 2017. And at the end of H1 2018, we had prior Swiss and clear highness in Switzerland crop man in Netherlands. And so, revenue was up 11% including Flat 0.8 percent organic. So these acquisitions, of course, boosted our revenue overseas abroad, about 18% out of the 13% outside France and the balance 16% is due to our historic position on Boeing Markets in Spain, Belgium or Germany, As Benoit said, 31% of contracting is now achieved abroad. 5 years ago, it was only 19% abroad. And you can see that growth in France was not quite as had only 3% and I'll go through the well, going through the divisions, I will examine the various trends on the French market operating profit is up was up 7.2%. That include the special bonus and that was paid that was actually paid by the holding because it's a nonrecurring operation in contracting operating profit was up 12.7%. And so the profit margin was 3.6% in contracting and concession margin was up 50 basis points to 48.8 percent. And so all in all, the group operating profit margin was 11.2 percent. This is mostly due to the with a mix of business, whereas there was more growth in contraction, contracting than in concession But you can if you look at the 2 big families have become both profitable and indeed, increased revenue. But let's look at the details of these business these divisions looking at, construction in Switzerland, we have about 1,000,000 in revenue in Switzerland, almost 50% growth in the Benelux, but in France, revenue is slightly down. It was already the case in H1, if you look at, contracting business, not including property It was down 10% in H1. It was only down 5.6%, just talking about contracting here. So H2 was almost stable, it was 5.6% for the year as a whole. So H2 was about stable even though there was less PPP business. So there was less contribution from contracting although property contribution was increased by 1,000,000 to in revenue. If you look that there's less business in property and you'll find this in the press release, this is only due to the phasing out of some prompted us to recognize as much as 1,000,000 in revenue But if you restate this with the IFRS 16, 15, I beg your pardon, you will find it in fact, it is almost stable Profitability is 3.9% slightly down, but close to its 4% average over time. Looking at our various lines of business, this is Gjerlon at the fruit of the Matwood Stadium in Lyon, we had already renovated Jardan Deleeu, that's a property projects 28,000 square meters in 334 parking spaces, a big parking lot. And this is intergenerational. Here we are in Versailles, renovating Pradeau Moran, which is a in the Versailles Castle. We have a prestigious, a high standing hotel with three buildings, twenty rooms and a high class restaurant. Infrastructure now, you have 3 branches. International room was up 25.9 percent compared to 24% growth in 2017. We have the ramping up of the Grand Paris Express, and we are looking here at 1,000,000, and then the road market picked up to the tune of 9% on that explains the 17.7 percent increase in revenue. In terms of profitability, we were able to have a better control over fixed costs, good operating performance in roadworks, but also in France, but also in Spain, where we gain more volume in terms of business. And now we are profitable and that CivilWorks has generated more revenue abroad in metal smolders, you may remember that last year, we had reached a plateau, but we're still there at Smothers in offshore wind farms, we were only done by 3 or so percent. Now back to Peru, The launch pads at the top of the crane of the water tower is over 90 meters tall water tower with a superb view of the launching pad. And on the right hand side, you have the canal, the channel that connects the launching pad to the water tower and the reflection of the crane den. And to illustrate this high performance here, this is a quarry in Corbinier and we have stepped up that business because we acquired 2 assets that were already mentioned earlier on. Now then in Energy And Services, growth is significant 10% including 5.3% in organic growth, that again, our businesses abroad are growing nicely, up 34% well. Of course, it is due to acquisitions, but also internally, up 6 18% including Spain, Belgium and export projects, now especially in renewable energies and and solar panels more than transmission and distribution. Those projects are slightly down. In France, growth was more modest, 2% organically, 2.4% if you add the few acquisitions we make here and there. In France, you should note that in H2, we strengthened our order book with some major contracts in the telecom networks but also with Grand Paris Express. And indeed, we are continuing the improvement of profit margins in our various business assets. And the last highlight, if you remain on the last slide, you can see at the bottom right, corner, we finalized our dedicated brand policy. So each market has its own brand in our vehicles, you have Krensiq, Dorsalice, Xversity and Tarsio. This is the subway in Liele AFAS Energy System is conducting the work for new porticles, you have high and low voltage, and we also dredging gutters in the concrete slabs because the platforms have become bigger If you're looking at APR, we have more, heavy heavy goods of vehicles that have grown into the positive developments in H1 to compensate by negative in H2. The one big event is the the upgrading of major investments as part of the APRR and ARR investment 424,000,000 up 20% compared to 2017. This will continue because in the next few days, we'll be launching the side for the A480 motorway Grenault, the major 300,000,000 finance by IR 3300 direct or indirect jobs. And at the end of the day, this means that the driving time will be divided by 2 for most of the distances in And then the snowkill, this is a snow clearing vehicle that can clear snow on two lanes simultaneously because of the special positioning of the trailer. In looking at concession and PPP, we're looking at revenue up 5.6%. That includes high speed BPL Railway line and it's running smoothly on 1st year, we have refinanced Allianor's debt and so we have secured its financial expenditure for the next 10 years. And on the Pentagon Motorway, the Avenue of Senegal, Motherway, you may remember with the opening of a new airport in December, we had suddenly a surge in revenue as you find in the press release regarding operations, let's look at revenue and operating profit. We've been through that looking at other expenses, mostly restructuring costs, they were down to 1,000,000. They were already down in 20162017. The cost of net debt, as Benoit said, is down for the 4th year running. We have about a lowered a bigger decrease of 1,000,000 because that was there was the interest rate swaps of FRA about 1,000,000 there so that accounts for the lower cost of debt. Net financial expenses in H2 is well is now being normalized. Income tax is up because the net effective tax rate is about 32.5 percent and that is in line with the tax rates in those areas where our business is present net profit attributable to the group is 1,000,000. It's up. It's been going up the next past 5 years. And of course, earnings per share increased 21% just like the 22% increase in profit. If you look at the balance sheet, you have the listing on Page 61. You're looking at capital, this was commented by Benoit and so and I will not insist on the debt position, we have 2 items, while we have debt over the year, now let's go through the various bits and pieces, EBITDA about 1,000,000,000, so the debt was down by 1,000,000,000 Working capital requirements, up 125 including 107 on contracting and 18 on concession, interest and tax is 1,000,000. Now, this will bring normally this should normally bring debt down when we pay back interest, when we have holding and contracting, equipment of 1,000,000 in both branches we are present. And then we have statutory CapEx as part of the plans, all ongoing PPPs, 503,000,000 and that includes 424 for APR. I mentioned it earlier, and that is in line with our expectations. We said anywhere between 4 50 for APR and between 5.50 in all. Then we are paying back debts as part of the rents we received through PPCs. So free cash flow is about 1,992,000,000 exactly compared with 1,000,000 in 2017. Then we see how we use that free cash flow Part of it was for external growth, 220 for contracting, 1,000,000 for contracting, that figure does not include the cash from companies that we've acquired. That is the shares in companies that we have acquired that have their own cash, but we did not include that and Gettling is 1000000, so 1,000,000 for external growth acquisitions. Therefore, operations without flows, we have about 105. So that includes the accounting that is non bank debt. So there's no cash out, no actual bank debt, but that's call options on minorities, companies that we have control over. So we acquired them, but we don't have all the shares And then there's an additional price to be paid over the acquisitions that were made, and that is 1,000,000. So if you look at acquisitions, we have a cash out of 220 and accounting debt pay per bit of 1,000,000 looking at additional prices and call options. It's not much in terms of debt, but it's a lot of money if we look at cash variation over the year. Then the capital operations are 1,000,000. Now that capital transaction, 2 major payments, of course, the dividend paid by Efari to our co shareholder Efari, well, that's withdrawal of APRs, therefore, listed here. So million here then there's a dividend paid by 8 hours to 8 shareholders, 197,000,000 that's up 1,000,000 compared to 2017. And on the last flows, we have on our own shares, we have only 9,000,000 in actual cash out because what we do, we buyback and cancel the equivalent of those shares created for the benefit of employees. And on H2, we bought back about 1.1% of Afage's capitalization. And so that means that brings the total net debt at the end of the year at 1,000,000,000 Now we have a breakdown of that, the non recourse debt that's down about 1,000,000. That's a there was a bigger, of course, decrease in the year before because we sold off for PPPs and the net cash position of the holding of contracting 526,000,000 you have to remember that the 1,000,000 in external debt was paid with that cash and then you have in accounting terms the 1,000,000 I mentioned earlier on. In closing, looking at the order book, that's up 15%. That's there's an increase in the construction infrastructure, of course, through the Grand Paris Express accounts for most, I mean, you have this 29% box there, increase in the middle box there. And in energy, well, we filled back the order book in H1, we had actually consumed some of that order book on some major operations. So that completes the presentation on figures, but now we can have, oh, please give a hand to our employees at Efraj, who threw in their pictures with their smiles, their selfies with their smiles, to highlight this presentation. For the brand new. Microphone for the questions, please. Demi Clinever? No. I don't think we're gonna spend the night here. Could we have a split of the 140,000,000 of the other concessions, revenues of other concessions, What are the margin of progress in 2019? We had an important reduction of financing debt and increase of the operational result. On the $920,000,000 of external growth to the revenues, what is the magnitude of the operational result which seems to be relative on some branches of construction. Can we have a idea about the evolution of traffic since the beginning of the year and the investment of APRR in 2019. Philip, why don't we start by the last question the evolution of the traffic since the beginning of 2019. Hello? So on the investments, Christian said it, we committed million in 2018. It was the ramping up of investments linked to the major operations planned 2014, 2018 on the motorway independence, ramping up will carry on 2019. We'll have a peak investment because we anticipate on the growth and investment of 1,000,000 approximately and we'll get down as of 2020, 2021 will anticipate a bracket of 1,000,000 each and every year. Far for the investment, for the traffic beginning of the year, it's rather difficult to talk about the figure at the end of January and following the first, reports of February, no great meaning at the end of of this, I mean, now what we may say is that the HDV is on a good trend, dynamic trend, and the continuity of what we experienced in 2018 end of 2018. It's more complex of the lightweight vehicles, LVs, and so far that we have an unfavorable base effect due to the beginning of the year that was fantastic with the winter season, extraordinary very good snow in the ops. A lot of snow in the ops were also impacted by the, yellow vests, yellow jackets movement, less than what we experienced at the end of 2018. We have less, toll stations that are disturbed. We have some concentration on the demos on Saturday, as of last year, were impacted Saturday, Sunday, and sometimes weekdays. I wish to sales that will have a unfavorable base effect in March since the Easter weekend, which was positioned at the end of March last year, has been moved to April of this year and then will have a base effect unfavorable in March. This is what I may say about the traffic beginning of 2019. Christian, can you pick it up for the other questions? Yes, first question It's simple. It's no. We give no details per business or per infrastructure of the margin of concessions. You have the detail of the revenues of each motorway besides APRR and you have in your kits. And since we think you're not stupid, you have a good education and you can figure it out. And about the other concessions you have included what we set for BPL for the, rent and minus 100,000,000 last indication, we are expecting nothing significant in 2019, on the other concessions compared to 2018. We have no new entrants I mean, commissioning that would impact the margins. So besides the growth of the motorway traffic, and no session that will decrease the operational results. So there's going to be a stability of the portfolio of PPP. Margin of progression, you're referring to the financial costs, yes? As I said, the major lever this year was the end of the swap of FRE So compared to the first half year twenty eighteen, twenty nineteen, we'll have a saving And our debt is normalized. You have the detail of the cost of the debt Page 57 in the appendix, we have refunded the first stage that was at 5% replaced by the debt of 1.5%. Next one, which is floating had a very low cost close to 0, this will be replaced by the debt at the current rate. No major savings besides the swap FRE. Your last question was about the external growth. Several elements on the infrastructure side. We made small specialties and growth, which are relative As a specialty business in Germany, we had the excellent growth of the Mediterranean of CFPM. We discussed that earlier, and it's related. I do confirm. And on the part, energy system there to the elements we have are the strengthening of niche of specialty, which are reluutive compared to the, Brent itself. And Internationally, we're on markets with the level of March and I mean, the margin are very relative and relative also. Growth Switzerland with Priyora. Today, Priyora delivers, building a little bit of real estate we shall carry on increasing the share of housing, which is more relative, but we're very close to what we have in France currently. Hello, Pierre Jose, HSBC. Three questions. First on the concession in France against the current background. Do you expect or you hope changes on the concession contracts, a freezing of the amounts until an extension of the length of the concession, which could be a popular solution. 2nd question about the airports, when do we expect to answer on Leland to lose. What about the others like Marseille's and Bordeaux? And third question about Get Link. Do you have relation with the management of GetRINK? Did you start working groups on any topic? If I take your question in the right order, first about the concessions France. There's no, as you know, last summer, we had a report rather comprehensive on the situation of the rose in France. There is a clear will of the Ministry of Transport through the discussion on law and mobility to find ways to improve the situation of some roads in France There are some wills to try to look into possible venues. 1 of the possible venue and is part of the suggestion of as far is to put the contribution of some elements which are consistent with what we have seen in 2015 the recovery of the maintainment of some parts of the roads and also to be seen with the territories All this is not discussed anymore with the authorities, with the powers. But we understand there will be a will to improve the transportation on a daily basis and the motor operators can deliver part of the solutions, but it's going to be only part of the solution. The other element of your question is, What could be done between a freezing of the price is the tariffs and an extension of the length of the concession the government knows better than we do what the mechanism of the contract enable them to do and if they keep some balance for the concession holders, we're open to negotiation. This cannot be done separately from a more global solution, which is a take into account of some issues of maintaining the infrastructure. But here now, there's no discussion so far. Mark? On the airport. Well, I cannot make any comment on the processes underway. You talked about Lille and toulouse and give you the elements that we make know about the timeframe. What I can say is try to give you and state the interest we have for this negotiation if Fash has a know how enabling a Fash to intervene in the territories where we are located either as improvement of mobility, modernization of the infrastructure or development. In the case of the airport, we noticed that we have a certain amount of skills to proceed are the practice of concession concession with the state as the authority or works contracting, airports and landing strips or complex systems, we're also a developer. So there are synergies between our know how and the qualities, competencies required to work in the airport area. So on the face of it, we are interested to look into the issues of airports where we are located in our different lines of businesses. That's the case of Lille and Toulouse to name only certain figures in the region, in France, we do billion of business. 1,000,000 in Oxiteno might be the case on the other French platforms when and if their capital would be open to a private operator. Regarding GetLINK, we have seen, and we had some initial talks, I think the understanding of our movement and a favorable welcome of the management who are happy and glad the way this asset has been managed, and there's no discussion to die so to speak with the teams of Get Link. Nibula Met Barclays. Margins in the contracting construction outside of real estate 2.5 years that is decreasing. What is it? Loss and of projects, which are difficult, pressure on the tertiary movement, energy systems more 20 basis points. What is the limit? How high can you go? Do you have a path foreseen for 2019, a similar question about the infrastructure. There is a motorway cycle, which is favorable on 2019 in France, decrease of a, overheads and smothers has not been as high as foreseeing last year. Will it be this year? What kind of margin do you see for this line of business? Olivier? And margins of construction contracting. Decrease of margin on contracting is linked to a scissor effect in France and in Poland, as we noticed last semester, we had it over the whole year. Overheads, which are increasing strongly on sales for 2 years. We are in the private market with a firm pricing. Energy System line of business. We shared already on that. We're not yet at the profitability level reached by the best in class, we have size effects which are very important. We have to have a territory knit, an important one to deliver more value added value offer of the combination of both B generating margins. As of today, we reached 4.4 we don't want to stop. We are on a trend of increase. It will take some years, but it is not unthinkable in spite of our small size to get to 5% of profitability. The more you go up, the more it is difficult, takes some time, but be assured that all the teams of the line of business are committed to go on on this trend. On the infrastructure side We are on, business mix between, motorway, metal, civil engineering, the visibility on the road is very significant. The other element is that we had really an upturn of profitability over volume in our industries. It's very positive on the fundamental of this profitability. On the civil engineering, if you remember, I always said that the major projects of Grand Paris express will have very long tail effects to be recognized. The first effect is that the tremendous investments we had in study Well, today, we're not anymore on study. We're all mobilized on the project. We had very important successes on this project. We have a positive effect, which is a reduction of our investment of study. For the time being, those projects which are weighing 1,000,000 this year that will go on ramping up next year, which shall be with a 0 margin not recognized. We have a volume effect. We have a better, amortization of our overheads one will be at 40, 50 percent of progress and the risk will be better known, we will see. But it's a very long tail business and the weight of this project increasing year after year It is dilutive on the margin of the line of business, but it's because we're accomplishes in the recognition of the results on this kind of projects. On metal work, the market is variable. More and more competition on the, offshore Wind Farms, prices are more and more competitive. It's a market in which we do not wish to increase our volume, we can have a geographic diversification since in 2019. The 1st wind farms and France will start being built. We're still in a steady phase, but globally speaking, metal remains a contributed to the line of business because it's a specialty business, so to speak. It's quite difficult this makes as you may imagine, but globally speaking, our volumes will go on taking some importance and I think we can improve but it's longer. I get the microphone, Virgine Rousseau or Do. Several questions first. About what Nabil said, Vancy Construction. I understood the SISA effect. It's not the margin of Vancy Construction, I'm sorry. The lady says she's sorry. It's late. I was talking about Efraj, indeed, since this effect Can it be reverted? Can the price of last contract seem to you to be better than those you piled in last year. 2nd, on M And A, How? What do you think about the M and A on the envelope? What just the level of gearing you're comfortable with you talked about the airport of Lille to lose, getling, how do you prioritize those various projects. On the contracting, obviously, the scissor effect of decreasing in time we remain in a very competitive environment today in the last contracts, which are being presented and secured, we consider that we get to report in our price to delay in our in our accounts, the scissor effects we experienced, but there's no improvement of the margin even if the activity remains dynamic. On the M and A part, I'm not comfortable with the question since there's no will. The issue of constructing from one side and concession on the other side. On on on on the works, we do it often, but on, smaller amounts with managerial intensities, which are more important. Today, it so happens that several issues we worked on for some of them since 2016 were materialized in the beginning of 2018. One for the infrastructure, the other one for the energy system and another one for the construction So the conclusions on tracking conclusions came at the same year. We had a very significant year, but not We're not going to other significant acquisition. We worked a lot to be on consistency, and, we have to be sure that everything can be integrated to our values and our culture and our way of work in order to deliver the value we expect Regarding concession, it's different. In the short term, we are invested on the tender of RCE, which would be a significant investment, but it will be according to the length of the works, a concession 1 field is this is where we create the most value because we mobilize the contracting and concession know how of the group. On Get Link, our disclosure was quite clear. It's an option taking. We are in our territory, European territory, we are on a very long tail concession and asset would have very issues of restructuring, financial restructuring lately and we're convinced that an industrialist can deliver a lot because there will be a challenge of renewal of maintenance, of renewal of capital expenses, and it's in our geography on a very long maturity. However, it's something important. We have time, and we are against a long run operation if there is a opportunity we can strengthen our position. Each element is looked into as such And then the other element to better answer your question is the why we are used to present the cash flow separating what is non recurrent of what is our real capacity of investment and growth, which is the red part of the graph. Christian, you know, the balances, we always said in the past we didn't change our mind that we are comfortable with 1,000,000 cash flow on the holding contracted concession. Well, if there's an opportunity, we can go beyond but it's a normal level with which we're comfortable. And in a normative way, we get 300,000,000 our free floating cash flow post dividend. Those are the major equations. We are always be careful to have a disindebted with a positive cash flow of 1,000,000. Without, ruling out to move on the various opportunities you were, alluding to some could possibly be financed or refinanced with a nonrecurring debt by our bankers, and some of them are here with us. And have some ideas for us also sometimes. We move forward. I have a couple of questions. On airports, what's your feeling about the recent decisions by the authority, the ASI, the authority and airport, which rejected proposals to increase rates. Is this sort of dampen your interest. And regarding the property market in France, if you're looking at property development 2019, we feel like we are reaching the end of the cycle, but are you optimistic all the same? Marc will take the first question on airports, maybe. Regarding airport we have to see that the regulatory and legislative context is something we have to take on board. Of course, we have to take regulations into account We know more or less the the limits of the exercise within these limits, we can do what we can, but it is not for us to criticize the institutional mechanism. Having said that, we are familiar with the exercise. We said that as concession holders, we have regular exchanges with the authority and independent authorities and that is something we've been doing in other areas, especially for motorways. And so that is part of our business as a concession holder and so, we do things on a case by case basis with airports if an opportunity arises. Yes, well, if I may add to this. And Marc mentioned it early on, what counts for us is not so much having a we haven't got an airport strategy. Our strategy well, the overall strategic plan looks at the right balance between construction and between contracting and concession but we have to be very present in certain areas and in France certain parts of the country. If you recognize in an area, the country, that will give you legitimacy in particular for airports especially because those who operate airports are already involved in land development. And so if you're both doing concession and contracting, well, of course, an airport project, which will, of course, make a big difference to a territory, that stands to reason. But it's not so much an airport strategy as a territorial strategy. And if we are happy being both a contracting partner and a concession partner, that makes sense. I mean, we're not going, if we're not present in the country, we're not out of the blue going to, to an airport project. On property development, Well, real estate development, we have seen a, climb down in a number of units marketed. It started in 2018. We're looking at minus 5% in the market as a whole. And when we come close to an election, things tend to slow down. And it could be that the property market might shrink a little bit, but we had 4500 reservations in 2018, 4700 in 2018, And that only accounts for 3% of the entire market. And I already mentioned that in view of this small figure, we haven't got that much at stake. What is at stake is our ability to generate business we can generate business easily, but once, a project is completed selling the unit is not never an issue. Now we can generate new business because as land and property developers, we find that 30% of our property development, is in the in the France and the Paris area, And in land development, we don't have regulatory issues because they've already been given the go ahead by local authorities. So even if the market shrinks and it did start shrinking in 2018, I'm not concerned about our size and our visibility in that market both in property and land development. Jizette Pujard from Kepler Cheuvreux. I have a couple of questions. Number 1, regarding the 30% discount on AP 2 R, you mentioned a figure of 7000 people who have, who benefit from this discount, it's starting today. Well, starting this week is the answer. Okay, because the minister of transport, mentioned, I said, there are million people nationwide would be able to take advantage of this. I know there are 3 companies, but some companies are bigger than others. So just to give us some, guidance, could you tell us, the, say, the relative weight in euro revenue or AP2R or light vehicles, these the number of users that, go from home to work. I mean, what, in that portion, of drivers would have a lower rates. And so how much will it cost? I mean, the 30% discount, how much will it cost you? If you can give us an order of magnitude that would be very helpful. Another question on Get Link, because I mean reading your paper, we find that one of the one of the purposes here is to extend the duration of a concession, the terms of But if you have only a minority stake, only 5% or even 10% or 15% or 80%, 20% is that enough to obtain an extension of the duration. I think that we're running this jointly, this asset we have a major role to play and so therefore, we can define new terms. Philip, maybe you can take the first question. Well, the main thing for us when we started talks with the minister, there are high expectations in terms of purchasing power. And so we focused, working with the minister on the daily trips, the daily commutes. Between home and work. That commute now with a new subscription system, that means that people can accept the statutory increase, in the price in the toll price. But, it's almost impossible at this stage to work out the effect of this new offer on our revenue because we do not know precisely just how many subscribers there will be, at the end of the day. So, as we said, with this subscription offer, this produces a discount, right now, as we speak, we have anywhere between 78,000 subscribers, we do not know what the final share will be between people migrating from existing offers, existing subscriptions and new subscriptions. We know, for sure, on the basis of the past 3 weeks, Christian mentioned this, we're looking at 50% migrated from, existing contracts and 50% new subscriptions but we do not know what the positive effect will be on traffic with this new offer because you may have customers that are already there on a motorways. And so they will be decided to take advantage of this offer and drive more and use the free motorways more, or you may have drivers that are using the secondary, road network now, but with this new subscription, they'll start using our motorways instead. So all in all, it's pretty impossible to give you an idea of the total volume and let alone the impact on our revenue. Thank you, Philip. Regarding GetLINK, there is one immediate effect That, of course, when the dividend is paid out in Nick's a different a difference to the net profit, but, we might get a higher stake and get linked and get more dividends. But at this point, this is not a plan, but course, if we're in a position to do this, we might acquire a higher stake in Get Link. Fundamentally, we do believe in the asset. We spent a bit of money acquiring a stake in Get Link, and we are satisfied that in the long run, that the industrial return will be worthwhile. I believe there's someone in the middle of the room who has a question Good evening. My name is Gilaire Kathani from Paribas. I have two questions. Number 1, regarding your exports to South America and Africa, you're looking at regions, that have geopolitical risks attached to them have you, I mean, as part of your stress test, have you assessed the effects of possible destabilization in these regions, what the effect would be on revenue and business at large. In terms of CapEx, there's also, well, you have to have human resources as well. I mean, you innovate, you invest in innovation, but are you training? Are you hiring at IFA so that to upskill your people so that they can keep up with these development. Let me just remind you that this is, normally, this is a meeting for analysts, but but rest assured, as regards, exports development, we we do analyze this very carefully indeed and the country risk and geopolitical risk, is monitored on a constant basis, including the safety of our employees and whether we should go in a country to a country or not. Of course, we are highly aware of risks and indeed a number of operations didn't go through precisely because of that. Regarding our investment in human resources, The training program is, part of our program. We have a university, it's called Afage University, So that includes a sort of a virtual part, but also we do have the actual premises and we offer training courses in our facilities, but 50% of our trainers are in house, sort of our training, curricula, are driven in terms of well, teaching techniques, we involve, of course, outside consultants, but our own people work with the trainers so that the corporate culture is fully addressed. And so that that training is extended to site workers all the way up to our top managers. Good evening, Pierre Bose. I have still have two additional questions on the buyback of minority stakes in the A65 IU are there talks with the Atlantia group that is the minority stakeholder. And on 50%, I mean, you have half of the shares at APR Air APR are held by, Australian interests. You have the Macquarie Fund. I think it's Australia. Is now aging. Would it make sense for you, therefore, to buy back a minority interest there? I mean, that wouldn't make any difference to the duration of the portfolio, but might you do it? I imagine it's a matter of what price, but And then another question that had nothing to do. But on BIM, we talked about digital how advanced are you on BIM with your own contractors, have you gained, have you achieved any productivity gains, thanks to the IIM? So buying back, minority holders on A65, Right now, we, there aren't any talks, but, as you well know, this asset is consolidated because we own 65% The operating company is called Sanif Accutin, and they are part of the AdiFTs group. And you know, there have been all sorts of changes within that organization. And so if there are any opportunities we may well look at them, but as you well know, Christian mentioned it earlier, A65 was fully refinanced at least a refinancing is behind us already. So now, we can generate value out of assets without much concern, but there are no no talks right now. And we do have rights of 1st refusal, when if and when any portions of A65 were up for grabs. Regarding minority interest on APR, there are there have been changes at last RTIA in Australia. There have been changes in governance there, but until such time as, so the changes are completed at Macquarieou and Autourous de France, we have no preemption rights only if there were changes there might we get preemption rights. As this stays at this point, we're happy with the present organization, of course, this wouldn't make any difference in terms of extending the duration of our portfolio. But of course, for the price, it would be a purely financial reasoning if the price is right, but right now it's not on the agenda and it's not a priority. Ah, and regarding BIM and the digital developments, all sorts of things are happening. Focusing on BIM, this is, of course, part of our business, but we were very much involved in developing dialogues between engineers, but the site worker on the construction side hasn't seen much developments, thanks to because of digital tools. But should there be productivity gains, I believe, thanks to digital developments, that would be due to the way in which a site is planned or the way in which we can help a site worker achieve productivity gains. There are many initiatives right now, but they are a bit app hazard and not and not all focused in the same direction. Most of the BIM developments are concerned our engineers. And that's what prompted us to work, more closely with Final Cal, a startup company because they instead of going from the top down with engineers just started from the ground up with site workers. So it made well, part of the processes were to do with reversing reserves and such like, but now we are actually working with outside workers and seeing how they can use the digital tools to improve their or to facilitate their work, but we haven't achieved productivity gains. And in any case, When we do achieve productivity gains, of course, we have to be, as it were courageous enough not to pass it on immediately to our customers and keep some of the profits for ourselves. Any case, there will be developments, I'm sure, but that will happen when you can see our site workers work differently, but at this stage, it's not happening. And as Christian is telling me, there's a direct link between what I just told you about Afash Kinnexion, I do believe be prepared for new situations, new developments, and so we can build virtually because we build for real. Now that makes a difference, and that will help our site workers have a better idea of the project that can help them work more effectively and give more meaning to their work. And so that's an improvement in and of itself. Well, I don't know, one final question, one final question. I have two questions regarding airports. You said that you you wouldn't go out buying an airport in the country when you had no presence, but I didn't you didn't you bid for Belgrade Ah, yes, we did. And, that is close to Europe. Back then, there were no other airports, say, up for grabs as it were. And for our concession teams, it was worthwhile to see how such an airport work, but that was away from home, as you pointed out, And, and so we deliberately decided to work hand in hand with the Zurich app or and we were deliberately a minority partner. So we're not a major infrastructure partner, but which we were there to learn to see how things worked on such an airport and learn from that for the airports where we are present but could you do that again? I mean, could you, bid for sort of a minority stake in an international airport? I mean, you might use to honestly, What does happen every so often in the concession division is that we may act as a minority partner on the picture you saw of the solar farm in Chile, Watacondo, the concession teams A have a minority stake. They want to secure development or project development to as it were protect or to ensure that the work is conducted successfully, but it's just want me to make sure the work is completed, but we don't mean to hold the space indefinitely because having run the place for couple of years, then we'll sell back our stakes. So we are simply being there to support our teams, our building teams but we will focus on such territories as Belgium, France or Germany, that is, of course, where we have a daily presence in terms of, of construction and other contracting projects. To extend down airport, it's one of the reasons We're having seen, set aside Bigrade. This is because we're a minority and with the 3 and to lose with with whom are you are in majority position? Are there else some contracting work there? I would be very glad to know. Why we were we didn't do both grad. We always imagined things and the motivation is never delivered in a very implicit way. However, again, I'm sorry. I will give you no special details on the way We are proceeding with the operations underway. We are in the rational, which is totally different as it has been said, different from the one that led us to give it a try because nothing else was interested in France. We we we are in a logic and to lose in our presence in the region of Oxitany, in all the lines of business with synergies with the airport, with, as you know, at the board of the airport, you will have the government, with whom we're working local authorities, with whom we're working a important partner for the airport. It's Airbus. Who is an entity for whom we're working. So I'd say all the conditions are gathered so we can come up with an offer with a team of very high quality managing this airport. So we have all the means to come up with an offer or the bid. Well, seemingly, there's no more question. We'll be able to, share with a glass of wine of water. You'll be able to cover the Luminess, it's an improvement of our road teams. It's the new vision of the marking of the ground on the motorways, we are on a testing period in several places. You will see what it is about. We brought a sample. And as Christian showed, how to make a selfie, you have a certain amount of shades of glasses at hand, and we are interested to see the pictures you will take with the pictures on, wearing those, those glasses. Thank you.