Capgemini SE

PAR:CAP

Earnings Call Transcript 2019-Q3

[Operator]

Ladies and gentlemen, welcome to Capgemini 2019 Q3 Revenues Conference Call. I now hand over to Mr. Paul Hermelin, Chairman and CEO. Sir, please go ahead.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Thank you. Hello, everyone, and thank you for attending the presentation of our third quarter results. As usual, I will give you the highlights of these results. Then Carole Ferrand, Group Chief Financial Officer, will guide you through the details of our Q3 performance. And I am of course assisted by Aiman Ezzat and Thierry Delaporte, the 2 Chief Operating Officers. They will participate to our Q&A session at the end of the presentation. Now we start with the first slide. The good dynamic we had seen in the first half continued in the third quarter, and we delivered a performance this quarter absolutely in line with our objective. The revenue growth is plus 5.9% at constant currency. Our revenues amounted to EUR 3.468 million this quarter. And for the first 9 months, the growth stands at 6.1%. The growth momentum continues in several quarters. Next, our bookings amounted to EUR 3.411 million this quarter, growing by plus 19.6%. We continue to strengthen our leadership in Digital & Cloud, which is our main growth engine. Our activities in this field grew by about 20% year-on-year, and we believe that strong growth in digital is a long-term trend. We continue to see a strong appetite from our clients everywhere. About some clients. One of Capgemini's strengths is our ability to deliver value to our clients through business-focused and innovative solutions. And this is demonstrated in many of our third quarter wins where we are often positioned as the bridge between business and IT for our clients. I'm very pleased to say that Capgemini will continue as a strategic supplier to Her Majesty's Revenue & Customs, primarily providing data, digital and cloud technologies alongside application management service until June 2022. For Accor, the single-largest hospitality company in Europe and the sixth largest worldwide, we are bridging the gap between technology and business with a new cloud-native data warehouse, unlocking new customer insights through artificial intelligence. At Farmers, the insurance company in North America, we have been chosen as the new implementation partner for Guidewire ClaimCenter. And our hand in manufacturing with Baker Hughes, Capgemini industrial IoT solution connects machine, manufacturing, operations and people. Looking at the revenue and the balanced growth. As I told you, we see an increasing demand for Digital & Cloud driving our growth and increase in profitability. In terms of geography, as announced in the first half call, our performance in North America has improved with a constant currency growth of plus 3.5%. Continental Europe remains structurally strong in all countries. Even if it is a little less buoyant market than previously, we achieved a very satisfying growth of around 6%. Once again, the growth in APAC and Latin America is strong at 16.6%, notably driven by very healthy Asia-Pacific region. Moving forward in Q4, we see softness developing in the market, which is being amplified by some unusual year-end tightening in some places and sector. For example, in the U.K., we now see a slowdown in both public and private sector due to the Brexit uncertainties. We hope this wait-and-see attitude will not last long. Banking subsector remains tight among others due to end-of-year budget management. However, we know how much investment in IT is key to the bank's production environment and it cannot last during many quarters. Outside of banking, we see that Continental Europe is solid and remains our growth driver. Outlook. Given the softer environment developing in this year-end and our views of the market, we update our constant currency revenue growth outlook for 2019. That will be now around 5.5%. This 5% rate was the low end, as you well know, of our initial guidance. And we confirm our operating margin and organic free cash flow through -- outlook, operating margin between 12.3% and 12.6%, organic free cash flow for the year in excess of EUR 1.1 billion. This will represent a solid performance for 2019. And considering our excellent bookings momentum and the growth of our activities in Digital & Cloud, we can look to the year 2020 with ambitions. At last we are on Altran. You all understand the rationale of the acquisition of Altran, an opportunity to accelerate our ambition in Intelligent Industry. Since our last call, end of July, we moved several steps forward. After the clearance of the French financial market authority, the offer at the price of EUR 14 per share opened on October 16. We just issued a press release earlier today. As we obtained the merger control clearance from the European Commission, we have now obtained all the required regulatory clearance. As you might be aware, a claim against the AMF clearance has been filed. Anyhow, we are confident in our ability to complete the transaction and create a world leader in digital transformation of industrial companies. In addition to Altran, we will continue to execute our raison d'etre of targeted acquisition. We acquired Finexsi consulting, a leading strategy and management consultancy for the energy industry in the German market. They advise major energy companies, municipal utilities, mobilities and new digital player. Aim said that I made a mistake. The guidance, of course, 5-point -- around 5.5% and not around 5%. To avoid any misunderstanding, I repeat, our new guidance is around 5.5%, which is why I said the low end of the guidance. I now hand over to Carole who will guide you through the details of our revenue.

[Carole Ferrand, CFO & Member of Group Executive Board]

Thank you, Paul. And I start with the key trends of the third quarter of 2019. We delivered another solid performance in Q3 with revenues of EUR 3.468 million. Organic growth came in line with our expectation at 5%. Taking into account the scope effect of 0.9 points, the constant currency growth reached 5.9%. While a still strong U.S. dollar, the overall impact from currency fluctuation reached 1.5 points, leading to a reported growth of 7.4% for this quarter. On a year-to-date basis, the organic growth stands at 4.9% and 6.1% at constant currency. 2 additional comments on scope and FX impact going forward. The scope effect will mechanically come down to around 0.5 point in Q4. This would lead to a full year impact of around 1 point. This excludes any potential contribution coming from Altran. The impact from currency is expected to stop around 1.5 points on a full year basis. Let's move now on to our revenue by region. And as usual, I will focus my comments on constant currency valuation. First, North America, which represents 1/3 of our group revenues, has recorded a sequential improvement as planned with 3.5% growth in Q3 versus 0.8% in Q2. This is primarily a reflection of a more favorable comparison basis, and we target these regions to get to group average in 2020. Our activity there was mainly driven by TMT and service sector. While not as dynamic as in H1, U.K. and Ireland, which represents 12% of group revenue, remains robust in Q3, with a 6.3% increase in revenue. Manufacturing, Financial Services and Energy and Utilities were the most dynamic sector in the past quarter. France, which with 20% of group revenues, delivered a growth of 5.6%, which is a solid performance after a strong H1. This growth was mainly fueled by the Services and Manufacturing sectors. The Rest of Europe, which accounts for 26% of group revenues, kept its momentum with a 6.1% growth. In that region, Nordics and Italy proved to be dynamic. The Manufacturing and Consumer Goods sectors were the main growth drivers during the past quarter. Finally, Asia-Pacific and Latin America enjoyed a steady growth of 16.6% in Q3. This performance was primarily driven by the contribution of the Financial Services and Manufacturing sectors in Asia-Pacific. Overall, it's worth noting that all the devolutions came as anticipated. Let's look now at our revenue by business line. Let me remind you first that since January 1, we measure our activity level by -- the constant currency growth of the total revenues generated by each business line. So before the elimination of internal billing between business lines. Strategy & Transformation Services reported another strong quarter with a growth of 14.6% to the total revenue in Q3. As in H1, these performances was mainly driven by Manufacturing and Energy & Utility sectors. Application & Technology services, our core business line, increased their total revenues by 4.7% with pretty good growth drivers spanning from Energy & Utilities to Services, Consumer Goods & Retail and Manufacturing sectors. Lastly, Operations and Engineering services, so their total revenues grew by 7.7%. It's worth noting that all companies of this business line contributed to the solid growth. More specifically, total revenues of Digital Engineering & Manufacturing Services recorded double-digit growth while the growth recorded in Infrastructure Services was further boosted by the Leidos Cyber acquisition. Moving on now to our revenues by sectors. Financial Services revenue grew by 3.1% in the last quarter. The banking sector remained quite contracted in Q3 but investment growth is faster than in the first half of the year. On the other hand, insurance grew nicely. In the wake of H1, Energy & Utilities was posting another robust performance with the growth of 8.2% in Q3 with strong performance in the U.K. and in the Nordics. The Manufacturing sector reached a peak in Q3 at 11.2%. While auto, as expected, start to be affected in some region by market conditions, we continue to develop strong performance in manufacturing globally. This has been fueled by France, Germany and the U.K. but also Asia. Consumer Goods & Retail grew 6.6% with a very solid performance in the Rest of Europe. Public Sector and TMT posted muted growth stemming from contracted performance across all geography. Finally, in Services, we grew by 13.9% with very strong performance across our geography, most notably in transport services. A quick look at our bookings now. Bookings amounted to EUR 3.411 million in Q3, up 19.6% at constant currency. This bring our 9 months bookings to EUR 10.5 million, which represents a steady 9.2% growth at constant currency. We feel that this strong growth in bookings is a true achievement in the context of a softer economic environment. This performance also reflects our ability to sign larger deals. And finally, moving on to the headcount evolution. The total headcount reached 219,500 employees at the end of September, up 5.1% year-on-year. The offshore leverage remained stable at 58%. Our attrition stands at 20.5% year-to-date, and I remind you that we have updated our methodology since Q1 so as to be closer to industry practices. With this, I hand over back to Paul to open the Q&A session.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

So operator, can you collect the first questions?

[Operator]

Yes, we have a first question from Mo Moawalla from Goldman Sachs.

[Mohammed Essaji Moawalla, Equity Analyst]

I'm wondering, Paul, if you can just talk us through just the nature of the slowdown. I know you commented on the U.K. and Financial Services in North America. Do you expect this sort of -- to be a more short-term slowdown, meaning several quarters? Or how should we think about sort of 2020 in terms of the organic growth implication? Because I think kind of what's implied in Q4 is sort of significantly below the sort of 5% to 7% growth rate that you had been targeting. So just may be help us understand the shape? And then may be a bit more detail in terms of sort of, at the customer end, what the customers are saying and how their kind of spending plan may kind of evolve.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

So what we pointed at might look temporary because of -- we could hope that the Brexit uncertainty will one day be behind us. They are now generating election convenes. So we should expect -- we should hope that U.K. get back to normal. I would say the banking pressure is probably something where there is a temporary dimension because banks are accustomed to squeeze spend in the last quarter. But we believe that it should get better. I don't say banking will become back a very good segment, notably as long as the interest rates will be pretty low. But we think there is a temporary dimension to that.

[Mohammed Essaji Moawalla, Equity Analyst]

And just to follow up on the digital side of the business, which obviously still grew quite well in Q3. Are you seeing digital projects coming under scrutiny? Are customers potentially discovering [indiscernible] smaller pieces?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

What I will just say is our renewed prudence on the fourth quarter is mainly depending on the traditional core. The digital remains untouched because it's probably strategic and vital for the client. But when there is a possibility, people tried to weigh on more traditional core IT projects. But so far, we haven't seen delays or doubts about digital projects.

[Operator]

We have the next question from Charlie Brennan from Crédit Suisse.

[Charles Brennan, Research Analyst]

I've got 2 actually. The first is when I look at the third quarter bookings, the trends look very healthy. And I'm just wondering how we square that with your Q4 caution. Is this third quarter bookings growth merely because it's against an easy comp in the prior year? Or does that mean that the deals that you signed are due to start in 2020? And then just as a follow-up, I guess normally, when we see revenues struggling to match expectations, we would normally expect to see some margin pressure. But you're obviously maintaining your existing margin guidance. Are you doing anything with the cost base in Q4 to manage that margin profile?

[Aiman Ezzat, COO & Member of Group Executive Board]

Charles, it's Aiman. On the first question, yes, definitely the Q3 bookings momentum was good, and we do expect a good one in Q4. I think that would be a good baseline for 2020. But it doesn't capture basically some of the tightening of the budgets in Q4 that we see from some of the clients, which to be frank, sometimes, I find it a bit unusual. There's always some, but I think some clients we have seen is really big tightening on the discrete spend, try to make up then probably on a softer year for some of them. And the -- it doesn't capture some of the issues that we see around Brexit, et cetera. So this is some temporary aspects of Q4 that we cannot compensate with stronger, bigger bookings in Q3. We really focus on closing the deals we have in the pipeline in Q4 to really set a good baseline to start 2020.On the margin side, this is part of you testing our resilience. We did say that the company has become much more resilient, and it's not some slowdown in Q4 that will basically will have an impact on our margin. The agility of the company, the flexibility of this model is today allow it to be able to absorb some slowdown, and we are definitely going to deliver our guidance on the margin side.

[Operator]

We have the next question from John King from Bank of America.

[John Peter King, Research Analyst]

So just in terms of the weakness, obviously, now you're at the low end of your guidance through the start of the year. I'm just wondering, is it -- are you confident that what's happened here is simply just a budget tightening and the projects have been halted? Is there any -- have you lost any clients at all that you can see? Or have you lost any deals? Just how much clarity do you have on that? And then -- go ahead.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

We haven't lost any clients, and we have not lost -- with our bookings record, it's clear that we haven't lost pursuit. We have good bookings. And Aiman just told you that Q4 bookings should be nice, too. So it's absolutely not a turn on existing group framework agreement, the ability for some client to tighten and reduce what they spend with us.

[John Peter King, Research Analyst]

Okay. And presume -- at the risk of asking another question that's kind of already been asked, just on the point on the margin. So obviously, you've got a corridor there. I guess there's a truism that less revenue will mean that you've -- presumably, that we should be -- do we need to be thinking about the low end of the range? Or is this something where perhaps a lot of this work was being done offshore, and there's more flexibility in the cost base with some of this missed revenue?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

We did not adjust the margin guidance. We have a margin guidance with a range, and we chose to be explicit about the revenue. We have chosen to maintain the margin guidance as we should.

[Aiman Ezzat, COO & Member of Group Executive Board]

Yes. In terms of French. Just to be very clear because to be precise, we do see some softness in the market beyond the exceptional thing that we see in Q4, which are a bit unusual. There is a bit of softness in the market compared to what we saw before. So...

[John Peter King, Research Analyst]

Okay. And I guess maybe I'll just squeeze one last one in, in that case. Again on 2020, I guess I'm not asking you to give a guidance. But just to get a framework for how uncertain the environment is for you, are we saying you can't say at this point this could get worse and we could be looking at very minimal growth? Or is this a case of, well, we are not yet ready to say we'll be 4%, 5% or 6% but we're going to be more or less in the mid-single digit range. Maybe just help us with what's, I guess, on the table in scope for you as you look into 2020.

[Aiman Ezzat, COO & Member of Group Executive Board]

Two things. I do believe that the bookings momentum for Q4 -- for Q3 and Q4 will set a bit the pace for the beginning of the year. But to be honest, it's a bit early. I mean clients haven't finalized their budget for next year, et cetera. But again, enough. It's -- what we're focusing on is the booking momentum we have. But looking for in Q4, that set the pace for next year and that basically gives resilience on the growth side. And we continue to see -- we find good momentum around Digital & Cloud. So that really should set a reasonable pace going into 2020. A bit early, as you imagine, to look at the full year impact or guidance.

[Operator]

We have the next question from Michael Briest from UBS.

[Michael Briest]

A couple for me as well. Just in terms of the inorganic contribution in the quarter, it was a bit more than I had in my model. But I'm assuming Leidos is a U.S. business, so the vast majority of that contribution should be attributed to North America, in which case I'm assuming not much over 1% organic growth. You've talked before about getting back towards mid-single digits next year. Is that still the plan as of today?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Just on -- you said on Q3 or Q4, Michael, your question?

[Michael Briest]

Q3, just the contribution in this quarter.

[Carole Ferrand, CFO & Member of Group Executive Board]

On the contribution of M&A, I mean, it's not only U.S. It's spread. I mean you tend to always overstate the U.S. portion.

[Aiman Ezzat, COO & Member of Group Executive Board]

There's some in the rest of Europe. There was several acquisitions, and there are impacts.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

You should remember last year, there was Doing, which was...

[Aiman Ezzat, COO & Member of Group Executive Board]

Yes, around June 21.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

There's June 21, there is Adaptive Lab in the U.K. So you're not right to say that most of the acquisition impact is for the U.S., not right. It wasn't right.

[Michael Briest]

Okay. But would you still say that the mid-single-digit North American recovery sometime next year is not past?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Our target is to -- I'll say that we've proven our target is to have North America growing in par with the rest of the group. It's too early to say mid-single digits. Our target is to bring North America growth to be aligned with the group organic growth.

[Aiman Ezzat, COO & Member of Group Executive Board]

And if you say mid-single digits, I'm giving you guidance for next year, which is better.

[Carole Ferrand, CFO & Member of Group Executive Board]

Exactly.

[Michael Briest]

I'm not that clever, Aiman. Don't worry.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

And we all understand that Aiman feels quite comfortable for 2020.

[Michael Briest]

Sorry. My last one is have you noticed any change in the pricing environment then as I'm sure your competitors are seeing the squeeze as well. Is that changing dynamics? And equally on a cost point of view, does it mean you're more cautious on your investments or hiring or something like that?

[Aiman Ezzat, COO & Member of Group Executive Board]

So 2 things. I mean there's always -- certainly, it's a bit more price competitive because there are larger deals, and there's always more price competitiveness on the large deals. So -- but overall if I look at the same type of deals, the pricing competitiveness has not changed. But because we have more large deals, we've seen most price competitiveness on these large deals. On the recruitment, when we see a bit softer market in some places, of course, we are more careful on recruitment and on cost management because we want to confirmation on certain things before we are able to spend more. But on the other side, on what you consider as being critical in some of the resources and some of the investments we continue because we are quite confident on the growth in Digital & Cloud, and there, we continue to invest. But in some other areas, in terms of overall recruitment pace, et cetera, we of course have to adapt to somewhat softer market.

[Operator]

We have the next question from James Goodman from Barclays.

[James Arthur Goodman, Research Analyst]

Two questions as well, please. The first is more of a slightly pedantic clarification, actually, just on exactly where you're guiding for Q4. I mean if we take exactly 5.5% growth, and I think it comes out about 3.5% organic growth for Q4. I guess my question is, is that what you're saying? Or is that overly harsh and really we should think more about this as being towards the 5.5% at the low end of the previous range and, therefore, perhaps be slightly less specific in terms of how we interpret that Q4 guidance? That's the first question.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

We carefully crafted what is written in the press release that I repeated. We now guide you for around 5.5%.

[Aiman Ezzat, COO & Member of Group Executive Board]

For the full year.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

For the full year.

[Carole Ferrand, CFO & Member of Group Executive Board]

At constant currency.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

At constant currency, of course.

[Aiman Ezzat, COO & Member of Group Executive Board]

And I think we're clear that the impact of acquisition is much less in Q4.

[James Arthur Goodman, Research Analyst]

Yes, it's 1%. That's clear. And I guess more interestingly, I wanted to ask you about the last quarter. I think you announced that you were Partner of the Year with SAP on Microsoft Azure. Of course, we saw a very large deal announced by SAP and Microsoft recently. Microsoft have committed to a certain sort of license volume from SAP there. Just curious if that is potentially of significant benefit to you over the coming period. How you would play into that? And how that might affect your sort of bookings or outlook?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Maybe Thierry on the...

[Thierry Delaporte, COO & Member of Group Executive Board]

Yes. Certainly, SAP and Microsoft are among our most closest partners where we have developed significant relationship over the last years and very strong leadership position. So great growth coming from these 2 partners. And for sure, S/4HANA is a big driver of it as it relates for SAP.

[Aiman Ezzat, COO & Member of Group Executive Board]

So we should benefit.

[Thierry Delaporte, COO & Member of Group Executive Board]

Yes, definitely.

[Operator]

We have the next question from Neil Steer from Redburn.

[Neil Steer, Partner of Software and IT Services Research]

Just tuning in. Obviously you highlighted and have been quite specific that the -- your cautiousness is driven by banking in North America and then public and private sector in the U.K. Is it just those areas? Or are you flagging a more general slowdown in other parts of the sort of activity levels elsewhere within the group?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

I think good question, actually. But I think I said that Continental Europe, net of banking, is quite resilient. But the demand is there.

[Thierry Delaporte, COO & Member of Group Executive Board]

But we did say, we did say clearly that there is some softness overall. And with something more acute in the U.K. and in banking. And banking is not just North America. Banking is global.

[Neil Steer, Partner of Software and IT Services Research]

Okay. And then sorry to ask this question. It's probably a little bit unfair. But in any sense, has there been a little bit of management distraction over Q3 given the Altran acquisition and all of the necessary administration that's gone on towards that?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

No. Because frankly, the 2 COOs are fully on operation and I deal with Altran mainly with a law firm, with the help of Pierre-Yves Cros. So all the attention was truly on legal detail and legal games. So it was really managed. Pierre is now sitting next to me. So neither Aiman nor Thierry spent time on Altran. So no distraction there.

[Neil Steer, Partner of Software and IT Services Research]

Okay. And once again, a slightly unfair question, but it's already been flagged that if we reverse engineer the guidance as it now stands for the full year, it kind of implies organic growth in Q4 sort of 3%, 3.5%. As things stands today, if we were looking out over the next year or so, that's the kind of -- with the current macroeconomic scenario you see at the moment, that's the kind of growth you would expect? Or would the order intake that you've achieved in Q3 and your expectations for Q4 lead you to be more optimistic than that?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

It's a good try to come back to the discussion about the guidance for next year.

[Operator]

We have the next question from Laurent Daure from Kepler Cheuvreux.

[Laurent Daure, Head of IT Software and Services Research]

A few questions as well from my side. First coming back on the margin resistance. Could you give us more color on the buffer that you have? And also confirm that your restructuring charge for the year is unchanged at EUR 8 million, I think? The second point is on the great bookings you had in the third quarter. Just wanted to check that the speed between the new wins and the renewals is similar to the previous year. And my final question is I'm struggling to see how much of the issue is the U.K. when we talk about the deceleration of 1.5%. Can we say half of it is coming from the U.K. and could be just a short-term issue? Or is it just more spread for other regions?

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

I never could get from Carole her buffers. So we will see if she'd share them more with you, Laurent. No doubt. I would just say we do not plan to add an extra round of restructuring. So we maintain the restructuring. What are your buffers, Carole?

[Carole Ferrand, CFO & Member of Group Executive Board]

Nothing. We are maintaining our indication of level of restructuring around EUR 8 million. But confirm that our profile has drastically changed, as you know. So as we mentioned at the end of H1, Digital & Cloud project, where they add scaled do bring some resilience because the price point is higher. Additionally, as you know, in terms of cost base, that 2/3 of our cost base, which are in flexible geographies. So that helps and that makes quite a big difference.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

And on the Q3 bookings, Aiman, renewal versus new?

[Aiman Ezzat, COO & Member of Group Executive Board]

I haven't dived into that, Laurent. I haven't seen anything unusual. But I think that someone can get back to you on this one, but I really don't have -- I haven't looked at it.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Nothing spectacular, but we will come back.

[Laurent Daure, Head of IT Software and Services Research]

And on the U.K. impact.

[Aiman Ezzat, COO & Member of Group Executive Board]

Yes. We're not going to size impact U.K. versus banking versus the softness versus this one. And that we flag today what we see as being the main drivers of the slowdown we see coming into Q4. [indiscernible] in February when we announce the full year to see what has been the actual impact of some of the drivers, should be Thierry.

[Paul Benjamin Hermelin, Chairman, CEO & Member of the Executive Board]

Okay. Thank you. I take a last one if there is one. If not, we stop there because I think we start to repeat. You try to get more from us about 2020, try to get more from us and the guidance, and I think we should stop there. So thank you, everybody, and we will meet some of you during a conference road show. And actually, I will be in London. Thank you.

[Carole Ferrand, CFO & Member of Group Executive Board]

Thank you.

[Operator]

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.