Hello, and welcome to the SPIE nine months 2023 results call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. Today, we have Gauthier Louette, Chairman and CEO, Jérôme Vanhove, Group CFO, as our presenters. I will now hand you over to your host, Gauthier Louette, to begin today's conference. Thank you.
Yeah, good morning, ladies and gentlemen. Thank you for attending SPIE's results conference call for Q3. I keep saying that it is a good time to be an electrical engineer, and it shows in this quarter as well. So SPIE is definitely a key enabler for energy transition, and at the heart of the solution. We have highly valuable services for industry decarbonization, e-mobility, building efficiency, or Smart City, and a very strong model based on operational excellence, selective approach, and proven pricing power, delivering 100% cash conversion. So in Q3, the group reached, again, a very high level of organic growth, and we further improved our EBITDA margin. I will first start with a few examples showcasing our expertise. So on slide four, SPIE Facilities partners with the Department Council of Yonne for a 10-year energy performance contract.
We target a 25% reduction in energy consumption and a 43% cut in CO2 emissions. We cover 147 buildings, including secondary schools, tertiary sites, a museum, as well as historic locations, and this represents a major shift in energy mix. We will replace 22 outdated heating systems with efficient alternatives like wood-fired boilers and heat pumps. It does illustrate our strong know-how and expertise to support our customers in CO2 emission saving targets. On slide five, SPIE Industrie will oversee electrical and mechanical maintenance for the offshore substation and 80 turbine masts at the Saint-Nazaire Wind Farm. As the first French operator specializing in offshore wind turbine system maintenance, SPIE Industrie plays a key role in the buildup of the French marine renewable energy sector.
On slide six, SPIE Belgium is set to modernize the management of 54 tunnels and hoppers in Wallonia, covering nearly 11 kilometers, transitioning from manual to advanced technological solution. The new centralized software implemented by SPIE will provide real-time information to users, allowing drivers to make informed decisions, such as choosing alternative route or taking breaks, enhancing the overall driving experience. This should translate to significant time saving for user during tunnel-related disruption, which should improve the traffic flow by about 60%. On slide seven, SPIE collaborates with the UKA Group to plan and establish a transformer station in the Parchim region in Germany. UKA stands for Umweltgerechte Kraftanlagen. It's a green energy developer, and the Parchim area is known for its windy condition, so it's a focal point for renewable energy expansion in the northeast of Germany.
The decision to consolidate power from various renewable facilities at one transformer station pose design and implementation challenges due to the diverse power sources. SPIE's long-standing partnership with the UKA Group has been instrumental in the operational management of the developer's wind power transformer stations, showcasing again SPIE commitments to supporting the energy transition. Now moving to the nine-month highlights on slide eight. So we have a very high level of organic growth and significant EBITDA margin increase. We did deliver strongly on our M&A strategy, with two additional acquisition in Q3 in France and in Germany. We upgraded SPIE's rating, so very good ESG performance being evidenced, and we are revising upwards our organic growth outlook for the whole year of 2023. On slide nine, our key figures. So more than EUR 6 billion of revenue in the first nine months of the year.
9.5 organic growth over nine months, and 8.8% in Q3. Again, this is a very high level in our business and even a record level of organic growth, despite higher comps last year at the same period. The nine months EBITDA was up 15%, almost twice the growth in revenue. The nine months EBITDA margin is up 30 basis points despite the inflationary context. So we achieved five bolt-on acquisition year to date, representing around EUR 230 million of full year revenue acquired, and we enjoy a strong and active pipeline of opportunities. So definitely a good nine months performance. On slide 10, the very high level of organic growth evidences a good momentum in our markets and our proven pricing power in an inflationary context....
We have a buoyant organic growth in all segments, with an exceptional level at 9.5% at group level over nine months, and 8.8% in Q3. Oil and gas and nuclear at 15.9% over nine months, fueled by a very strong oil and gas segment. Northwestern Europe being the most dynamic region at 14.9% over nine months, with a record 18.3% in Q3. In Germany and Central Europe, we see a continued strong momentum at 8.6% over nine months. France at 6.1% over nine months, with a Q3 at 0.7%.
So speaking of France, on Slide 11, the Q3 organic growth was hampered by the anticipated decline in the fiber market, France being the most mature market in terms of optic fiber deployment, and also a phasing of a project in information and communication services. It pertains to delivering and installing computers for the region of Occitanie for colleges, and the contract is usually deployed in September. It was renewed for three years. There was objection from one player, so we had to postpone installation until October with, A, an impact on our production, and B, our few peers going back to school without a computer. Level of activity is up related to, indeed, high comparison basis in Q3, 2022, where we posted 7.8% organic growth.
The Q3 revenue reached a historic level of EUR 725 million, its highest ever for a third quarter. Over the first nine months, France recorded a solid organic growth at 6.1%. As you know, we have a very limited exposure to new construction. Our building solution activity did remain well-oriented. Technical facility management continued to be driven by our energy efficiency solution and building upgrade requirements, both in public and private sectors, in an environment where energy prices are still high and where regulation requires even more technical services. Clean mobility and smart public lighting solutions are key growth driver for city network segment. And finally, industry services remain well-oriented overall, except in some sub-sectors such as the food industry. On Slide 12, moving to Germany and Central Europe.
So starting first with Germany, where organic growth further accelerated in Q3 at +7.9%. So over nine months, we are now at 4.5%. As announced, the ramp up of the high voltage activity continued in Q3, and the record backlog provides with a good midterm visibilities. Technical Facility Management solutions and information and communication services remained dynamic and well-oriented. City networks and grid activity was stimulated by the growing need for smart solution in distribution grids. To conclude on Germany, we do benefit from our exposure, mainly related to energy efficiency and the massive structural change in energy mix. In Central Europe, we enjoyed a double-digit organic growth supported by energy-related activities in Poland, transport infrastructure installation in Austria, where we are the country's leader for road tunnel installation.
Central Europe is now a business of roughly EUR 500 million annual revenue. It does illustrate our capacity to successfully replicate speed model through a mix of bolt-on M&A and organic growth. Switzerland continued to benefit from a good level of activity, with no more supply chain delays in information and communication services. Moving to slide 13, Northwestern Europe. We did record an outstanding organic growth in Q3 at 18.3%. Over nine months, the organic growth was at 14.9%. The total revenue growth was impacted by the disposal of our U.K. operation in 2022. In the Netherlands, organic growth was at a record level. We also continued to have positive impact from Worksphere acquisition, where we do develop cross-selling activities among the client base on the back of the customer base of the historic Netherlands.
We saw a strong dynamic in industry services with a lot of investment in electrification. A growing demand for complex solutions associated with high sustainability challenges in large and sophisticated buildings, which is driving our operations in technical FM and building solutions activities. A further strong momentum in city networks and grids, supported by optic fiber rollout and data center activities. In Belgium, we have a strong dynamic, mainly driven by building renovation activities and significant investment made in the transmission grid with the M&A Now on oil and gas and nuclear. We did continue to enjoy a very good dynamic and a strong visibility on our market in oil and gas services. Overall, revenue was up 22.6% organically in Q3, and 15.9% over nine months.
We had in oil and gas services, a strong double-digit organic growth in Q3, with the ramp-up of pluriannual contracts, which do provide with a good midterm visibility. For nuclear services, as expected, the revenue growth was still constrained in the first nine months. We're already bidding for contracts related to the new generation of EPR. Moving to margin on slide 15. So the EBITDA margin increase is confirmed quarter after quarter. Over nine months, our margin is up 30 basis points, fully in line with our full-year target. Such performance does evidence our ability to pass on cost increases, and to further leverage on our strong positioning and operational know-how. We do spread our best practices across the group and in the newly acquired companies. In the context of a much higher demand for our technical solutions, we continue to be highly selective and to focus on operational excellence.
On slide 16, we had a strong delivery on our M&A strategy. Since the beginning of the year, we've continued to be very active on our on the bolt-on M&A front. We have done five acquisitions, representing about EUR 230 million of cumulative full-year revenue. In Q3, we did finalize two acquisitions, BridgingIT in Germany, a company with 700 highly qualified employees and nearly EUR 140 million of revenue. The company provides tailor-made digital transformation services across the full value chain, from consulting, system architecture, to software engineering, migration towards the cloud, cybersecurity, and managed services. This acquisition will create significant value, thanks to the anticipated high organic growth, combined with best-in-class margin levels and delivering high added-value services. Réseaux Environnement in France is a company with 120 employees and EUR 38 million of annual revenue.
It is a leading player in Normandy towards the rollout of energy, heating, and smart city networks. With this acquisition, we do strengthen our position in the energy transition market in France. Looking forward, we still have a rich pipeline of build opportunities. The markets, as you know, are highly fragmented. It gives us the opportunity to constantly consolidate our position in our key markets. A word on CSR on slide 17. As you know, it is at the heart of our model and increasingly important to our customer. So we are more than ever mobilized to deliver on our 2025 roadmap. Our commitments and achievements are widely recognized by external agencies, and SPIE's rating has been upgraded by Sustainalytics and EcoVadis in Q3. Our rating with Sustainalytics improved by two points to a score of 9.7.
We are now considered as negligible risk in the top 3% of companies rated in business support services. Our rating improved on better risk management in health and safety, and thanks to the good management measures taken to achieve our science-based based carbon footprint reduction targets. With EcoVadis, we obtained the gold category for the ninth consecutive year. We are now among the top 5% of companies rated in each sector. Our rating improved, thanks to better integration of CSR principles into our procurement processes, and the high attention given to the development of employees' competencies has also been rewarded. These upgrades confirm our significant efforts to achieve our ESG objective and our positioning as a key player in the energy transition. Every year, we launch an employee share plan, which is, was this year, so Share for You 2023.
It has been a tremendous success. Around 17,000 employees participated, up 55% compared to last year, for a total estimated subscription of around EUR 35 million. More than 5,000 employees invested for the first time, including a number stemming from just recently acquired companies. 14 countries were involved. Upon completion of this related capital increase, the share of employees would account for close to 7.5% of SPIE's capital. Loading our employees in the SPIE entrepreneurial mindset is really important to us, and it is a key factor of our success. We are a people business, and we are really very pleased with the take-up for this operation. Now, I will hand over to Jérôme, who will comment further on our financial performance.
Thank you, Gauthier, and good morning, everyone. I'm on slide 20, starting with the highlights of our income statements in Q3 and the nine months period. In Q3, we recorded a +8.8% organic growth, with a contributed EBITDA margin expansion. The EBITDA reached EUR 152 million for the quarter. The strong performance in Q3 enabled the group to reach, in the first nine months, EUR 6,259 million of revenue, with a very high level of organic growth at +9.5%. EUR 372 million of EBITDA, a year-on-year increase of +15%, achieved thanks to the combined effect of our top line growth and a +30 BPs increase of our EBITDA margin.
Moving to the revenue bridge, the exceptional +9.5% of organic growth benefited from the strong momentum across all our segments, as well as our proven pricing power. The net scope effect stands at -0.8%, reflecting on one hand, the positive +2.4% from acquisitions, notably with one additional months of contribution from Worksphere. It was, it is nine months, this year versus eight months in the previous year, and the contribution of our 2022 Bolt-on acquisitions. On the other hand, we have the scope effect of -3.2% being mainly explained by the deconsolidation of our U.K. operations since December 31st, of last year. Currency effect is negligible, -0.2%, primarily related to the oil and gas businesses foreign currencies.
Overall, our consolidated revenue was up +8.4%, at EUR 6,259 million in the first nine months of the year. In the next two slides, we wanted to provide you with some colors on SPIE's key success factors to further increase our margins and maintain best-in-class cash conversion levels across all our organization. First, starting with slide 22, regarding margin protection and increase despite the context of higher inflation. Our contracts are indexed to reflect the evolution of the actual cost components. The short cycle of the lion's share of our activities allows for real-time pricing based on permanently updated pricing tools. We are able to actively negotiate with our clients, thanks to our deep knowledge of their assets, and more importantly, our mission-critical service offering.
All this, combined with our unique positioning and a growing demand on energy-related markets, clearly provide us with a proven pricing power. Moving to slide 23. Since we had legitimate questions regarding cash conversion in the context of higher interest rates, let me first reiterate our confidence in our ability to deliver cash conversion at circa 100% for the full year. Here is how do we proactively manage such targets. Across the group, nearly 4,000 contract and project managers are closely monitoring their working capital KPIs on a daily basis. Obviously, also tracked by the whole management chain and including Gauthier and myself. First, the invoicing metrics, including the monitoring of the invoicing revenue gap level, to ensure that the production effectively realized trigger the corresponding amount of the invoicing, and this in a timely manner.
Second, the optimization of payment terms and conditions, including advance payments. Finally, the cash collection itself, with the very close monitoring of overdue, which remains at group level at a very stable and low level for the whole group. Last but not least, as you know, criteria of incentive at all levels at speed, remaining safety, margin, and cash. This concludes my presentation, and now I hand it over to Gauthier.
So thank you, Jerome. Before I move on to the outlook 2023, I would like to highlight the strong and unique positioning of SPIE across Europe, including a well-balanced business profile. The group benefits from a very sustained demand in energy transition, and we remain predominantly exposed to asset support. Let me mention, by the way, that our exposure to new construction of office building and residential is less than 3% at group level. Now moving to slide 26. So the outstanding nine-month performance has given us confidence to revise upwards our organic growth guidance, now at above 7%. Other targets are confirmed, EBITDA margin of circa 30 basis points, in line with nine months achievement. Continued high focus on Bolt-on M&A, with a good number of active deals in the pipeline. Continued dividend policy with a payout of circa 40% of adjusted net income.
With this, I thank you for your attention. Now, with Jérôme, we are pleased to take your questions.
Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Simona Sarli at Bank of America. Your line is open. Please go ahead.
...Yes, good morning, gentlemen, and thanks for taking my question. So first of all, if you could please remind us, you mentioned what is your exposure for construction at group level. So if you could please detail what is the exposure specifically for France. Also, you mentioned that in France, you had a slowdown related to optic fiber installations and data centers. So, if you could please specify how much the organic revenue growth in this country would have been, excluding those two headwinds. Thank you.
Regarding the slowdown, it is in optic fiber and not in data center. And the data center is a good business in France, and there's no change there. Not only in France, but also in other countries, as well. The optic fiber slowdown is anticipated, and it is linked with the maturity of the government in France. With regard to exposure to construction, figures are not very different from one country to the others, and so I will not give first the detail. But, there's not a big variance from one country to the other in this regard.
Thank you. Can I please squeeze one more question, if I may? So this year, so clearly, all the companies have been benefiting from very elevated price increases. Based on your discussions, probably for contract already for next year, is there any indication that you can give us in terms of prices, and what would be potentially the contribution to organic revenue growth? Thank you.
This is not possible at the moment. We're working on our budgets for next year, and as you know, at SPIE, it is a very thorough and bottom-up exercise, which is consolidated upwards. So we are in the midst of this exercise, so I'm not able to provide any color for next year yet.
Thank you. We'll now move on to our next question from Augustin Cendre at Stifel. Your line is open. Please go ahead.
Hello, thank you for taking my questions. I'd like first to come back on France with France. It seems like France has slowed down quite a lot faster than expected. And you mentioned the effect of the fiber market and the phasing in ICS. I was wondering if it was possible to split the impact of these two effects. What I really would like to understand also is how long this could last. It sounds to me like the ICS contract could resume in Q4. So I'm wondering what the impact of the fiber market could be over the next few quarters.
Well, first, no, we're talking of, you are talking of a slowdown, but we are talking very high comparison. We achieved an organic growth of, I think, 8.8% in Q3 last year. So we still are higher than a than a very high comp, huh? So we should keep this in mind. And we have, again, a record level of activity for a third quarter in France, this year, the highest ever. Regarding the two assets I've mentioned, I've mentioning about the, they are roughly half for this quarter.
We're talking for deep fiber, we're talking in the range of, let's say, to EUR 20 million compared to where it was... No, sorry, EUR 15 million compared to where it was last year, same time. But I think it will gradually continue to decrease over the next quarters. As we mentioned in the past, it is partly compensated by the growth in E-mobility, which is going to further ramp up over the next year. So, you know, it's not exactly balancing of quarter from quarter, but we see a good opportunity to compensate with E-mobility in the quarters going forward. The
When do you think-
Sorry, the other part is clearly a one-off, and we should see the production in Q4. So altogether, we expect probably a better level of organic growth in Q4 in France. Again, Q4 was really high at 13.3% organic growth, and so we are facing a very tough comparator for Q4. Nevertheless, I think we're going to beat it.
Okay. And just when you said EUR 15 million for the fiber effect, do you mean for Q3 or the whole nine months this year?
No, no, for the quarter. For the quarter.
For the quarter. Okay. Okay, and I've got just a second question on the nuclear division. I was wondering if there's any insight you could give us on the possible resumption of growth, both in terms of timing and of scale going forward?
I think it should at least stabilize, if not start to grow again in next year. But again, we're working on the budget right now. So that's where we are. The progress in repairing the wells in an issue at EDF and bringing the whole maintenance program in the shambles. This is progressing well, and so we expect a better situation next year.
Okay. I've got just one last question on the organic growth guidance. You raised it from 6%-7%. I believe this implies a Q4 growth of at least 0.7%, which to me remains extremely cautious given the Q3 performance. So is there any reason for that cautiousness? And or why haven't you raised the guidance further to, let's say, 7.5% or even 8%, for example?
Well, you know, we first this guidance shows more growth in Q4 as to maybe 4%-5%, huh? So it's not the zero point, say, you mentioned. We have a very high Q4 2022 to compare with. Altogether the growth for group in Q4 2022 was 10.2%. So it's again very steep comparable. But again, we'll have the organic growth for Q4 probably in the range I just mentioned. And so the basic reason is the head of comparative.
Let me stress it again, we are in very strong markets, and we do not see signs of a slowdown generally, except for some minor sectors. So clearly, the energy transition is at work, and we're looking at very favorable trends. And so, the main reason for lower organic growth is the height of the comparable, not the market.
Okay. Thank you very much for answering the questions.
Thank you. We'll now move on to our next question from Rory McKenzie at UBS. Your line is open. Please go ahead.
Good morning, it's Rory here. Just three questions, please. Firstly, in Northwest Europe, where there's been a significant step up in organic growth, how much of that revenue growth relates to multi-year contracts? Or are there any, you know, shorter term works that we should be aware of in modeling that, that division going forwards? Then secondly, there's been lots of headlines around, you know, delays or, or cancellations to some energy projects, specifically offshore winds. So could you comment on your exposure there and whether that's having any impact in your pipeline at all? And then finally, can you just talk about staff retention rates? Has that continued to, to, to track okay, into the end of the year? Thank you.
Hi, Rory. I didn't understand the last bit of your question, the very last bit, yeah.
Oh, the last one was, can you talk about staff retention rates on the-
Staff retention. Okay. Okay. Yeah. Well, let me start with that. Well, we were doing all right on staff retention. In fact, slightly, we see some decrease in the resignation rate, which is satisfying. So I think we, as you know, our resignation rate had moved from historical five-six to closer to eight, but now it tends to go down again, which is satisfying. With regard to offshore wind, we are very little exposed to offshore wind, so obviously no impact whatsoever for us or for what's taking place right now. Having said that, I think that it is an area where there will be growth in the future.
So, we have established, started to establish a position in France, as I just mentioned, and it is an area of interest for the future. But, presently, no impact of the projects that have been postponed, yeah. And, regarding the growth in Netherlands or in northwestern Europe, so Netherlands and Belgium, it is not linked to one of projects or multi-year contracts. It is a general trend, but we have a very good year in three. The Worksphere acquisition is proving absolutely excellent. And, we have also growth in infrastructure, obviously, with all the high voltage projects. So it is generally across the board a very strong growth in the Netherlands.
Could you, could you comment on how many contracts or what the revenue contribution has been from the technical FM business in the Netherlands once you bought Worksphere? So I guess, what were the revenue synergies you've unlocked, or how do we think about how you managed to drive growth into that business?
Well, it's still early days, but we have now revenue which will be achieved this year. So I'm not talking order intake, I'm talking production, which will be achieved this year, thanks to synergies, is in the range of EUR 10 million.
Great. Perfect. Thank you.
Thank you. Ladies and gentlemen, once again, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. And we'll now move on to our next question from Eric Lemari é at CIC. Your line is open. Please go ahead.
... Yes. Hi, hello, and thanks for taking my question. I got one actually, on Germany and in the high voltage business. You suffered this year, yeah, in Q1, if I'm not wrong, from some phasing issues in the high voltage business in Germany. Do you expect any similar kind of issues in 2024? Or do you think it will be more, it will be smoother in this season?
Well, we hope that it will be, and we think that it will be smoother next year, because now a number of large projects have been launched, and you know, the issue is always to start, because you have a last minute recourse, et cetera, and last minute administrative orders to overcome. So now we're in a better shape because these large projects are on the move. And then you have a bit of fluctuation with weather. Obviously, this can happen as well, but we have probably a better pattern in front of us.
And also, the backlog has improved tremendously as well, so we should be able also to work on more projects at the same time, which would probably allow for better distribution of resources.
Can I ask just a follow-up one, just a confirmation? So in Q4, in terms of organic top line growth, should we expect something around 4%-5%? Did I understand properly?
4%-5% would bring us to 8%, organic growth. So, you know, I'm not giving guidance for organic growth for a quarter. This is a very... This would be too risky a business, but this was to mention the order of magnitude.
Okay, thank you very much.
But again, this is not a quarterly guidance.
Okay. Okay, got it. Thank you.
Thank you. We'll now move on to our next question from Patrick at Société Générale. Your line is open. Please go ahead.
Hello, can you hear me?
Yes.
Okay. So thanks for taking my question. I have a quick one regarding oil and gas. There is a very strong negative Forex impact of 18% for Q3. Could you please explain and maybe tell us what are the moving parts there? What are the currency involved, and what should we expect for Q4 in this division?
Sorry, Patrick, I've not understood what your worry concern is here.
No, my question is about the 18% negative impact of products in the oil and gas and nuclear division in Q4. I wanted to understand what are the currency involved, and I wanted also to understand what we should expect, in Q4 for this, price impact in this division.
Well, I think we'll maybe we'll have separate two concerns, because in our view overall the exchange impact is negligible. And so I don't understand your 18%.
Okay. That's on page three on the price reading. So Q3, minus 18%, oil and gas in here. That's okay.
I think that we'll look into it separately, yeah.
Okay, no problem. Well, I think was on my only question I have here.
Okay, thank you.
Thank you, and we'll now take our next question from David Green at Boldh aven. Your line is open. Please go ahead.
Hi, good day. How are you?
Very well, thank you.
Just a couple of quick questions and clarifications. So with that EUR 50 million that you talked about in France, am I right in saying that your organic sales growth in France without the project phasing would have been closer to 5%? First part.
Yeah, we're talking. I think it's more in the range of 2x 15, something that's about 30. Yeah, we would have been in the range of three, well, 4%, I think.
And then more generally, how much has the fiber, specifically the fiber market, been as a percentage of France in total?
Well, in our best years, we were looking at business of above EUR 200 million, EUR 200... Maybe we, I think we peaked at EUR 230 million in optic fiber. But, this was two years ago.
In terms of thinking about just the ongoing runway, run rates of that business, is there still an underlying level of growth there, or is that really tapering down?
No, no, the optic fiber, it, it was linked with the deployment. So this, this is an underlying decrease in optic fiber. Definitely, it will continue to decrease over the years to come, to a point where it will be very small. So this is why I say it's really good that we managed to, to-
... compensate this trend with, for instance, with e-mobility, but also with things we do for transportation systems, et cetera.
And then just a final couple of questions on the sort of cash flow and any color you can give us on sort of working capital and the trends there? I think you were at 16 days at the H1. Are we seeing sort of stabilization there? 'Cause I think it had been declining a little bit. And then just finally on net debt levels, so you were at 2x at the H1, and I think you were talking about around 2x or less than 2x for the full year. Just to confirm that we're still on track for that.
Yeah, regarding the working capital, very clearly, we did not indicate clearly some normalized level of working cap. I think we stated again, and I'm pleased to confirm our confidence in reaching the cash conversion for the full year at circa 100%. So, historically, and we made a comment in H1, we have seen at December 2022 and June 2023, a slight drift, which was explained very clearly by a very high level of activity in the quarters preceding those closures. Again, going forward, we will not drive you through or guide you through working capital in number of days, but rather toward the cash conversion, which is most important and a key element of our free cash flow, obviously.
Regarding the net debt, we've said constantly below two over the last over the last over the last years. We did, we did 1.6x of leverage ratio at the end of December 2022. This is now heavily depending on, on how our Bolt-on M&A strategy will, will end for this year and with what level of, of cash out for, for M&A. But all in all, definitely below 2x at the end of the year.
Great. Many thanks.
There are no further questions in queue. As a final reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you.
Maybe before, unless there is any other question, Patrick, I would like to come back on your question regarding the foreign exchange impact on oil and gas. Obviously 18%. Sorry, we did not pick up the question immediately. As for the first nine months at the group level, it's very negligible as we said, on -0.2%. Understand that our oil and gas business in some of the countries is conducted on the basis of the US dollar. We had some fluctuation, plus other local currencies, notably in Africa.
When we do compare for the quarter three, especially the currency levels in those regions and euro against dollar, 2022 versus 2023, we came up with such an amount. Overall, for the nine months, and you will see for the year, it will lower much more.
Thank you. So I don't see if there are any further questions in queue. I will now hand it back to Gauthier Louette for closing remarks. Thank you.
Well, thank you all for your attention and for your interest in SPIE. As you see, the business is going strong, and we are re-enjoying a very good positioning. So we'll work very hard to deliver on our guidance for the year. And I'll just conclude in reminding you that it's a great time to be an electrical engineer. Thanks a lot. Have a good day.
Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.