Vinci SA

PAR:DG

Earnings Call Transcript 2020-Q1

[Operator]

Welcome to the VINCI Q1 '20 Revenue Conference Call. I will now hand over to Mr. Christian Labeyrie, Executive Vice President and CFO of VINCI; and Mr. Gregoire Thibault, Head of Investor Relations of VINCI. Sirs, please go ahead.

[Christian Labeyrie, CFO & Executive VP]

Thank you. Good evening, and thank you, everybody, for attending this conference call. So I am today with Gregoire, but also with Marie [indiscernible] and Thierry Mirville.First of all, we do hope that all of you and your beloved ones are safe and healthy in these tough times we are going through. So as usual, I will try to be brief so to have more time for the Q&A. So what are the key takeaways of the beginning of the year for VINCI? VINCI was performing well overall in both its concession and contracting business lines until mid-March. And obviously, since then, it has suffered a very severe drop in activity following the lockdown in France, in particular, and also in many other countries. Under these circumstances, we expect a pronounced decline in the group's revenue in the next few months. For the Q1 per se, revenue remained stable at EUR 9.7 billion. France accounting for 54% of the total was down 6.3%. Like-for-like, down 7.1%. International was up 8.5% and 1.6% like-for-like. As you know, revenue abroad was boosted by the latest acquisitions of VINCI Energies and also by the integration of London Gatwick Airport, which we acquired in May 2019. The currency impact was neutral in this quarter. So the percentage of the total business generated outside of France increased from 42% in Q1 2019 to 46% in the first quarter of 2020. This is due in part to the group's acquisition, which were mainly -- which we have made mainly outside France. But also, thanks to the organic growth in the international arena, which is in contrast to the decline recorded in France. Another takeaway is the dynamic order intake, plus 4% in Q1 '20 versus Q1 '19 despite high comparison and plus 9% on the rolling 12-month basis at the end of March, of which plus 6% in France and plus 6 -- plus 11% outside of France. Order book was up 8% year-on-year, reaching an all-time high of EUR 37.7 billion, which represents almost 12 months of activity and provides us with a good visibility. Please also keep in mind that the HS2 contract in the U.K. for GBP 5 billion, we won beginning of April in a 50-50 joint venture with Balfour BT, will enter the order book in April. So it is not included -- it was not included at the end of March in the order book. At the moment, about 1,000 people are already working on this project, which after the LGV high-speed train line to Bordeaux, is the second largest contract ever won by the group. In terms of financial position, you noticed that VINCI increased significantly its liquidity position to a very high level. Since at the end of March 2020, the group had a total liquidity of EUR 15 billion, comprising a net cash position of EUR 5.5 billion. But on top of that, we issued commercial paper for a total amount of EUR 1.6 billion, including EUR 400 million which were placed at the end of March following the ECB intervention with a maturity of 6 months. And since then, we have issued a further EUR 300 million, still under excellent conditions since we get a negative interest rate. And also, I remind you that we have an unused confirmed syndicated bank credit facility of EUR 8 billion, which is due to mature only in November 2024. But in addition to those EUR 15 billion, early April, VINCI arranged an additional EUR 2.5 billion credit facility which is due to expire in March 2021 with a syndicate of 6 banking partners. And this amount -- this facility -- the amount of this facility will be increased to EUR 3.3 billion, so EUR 900 million more, early May, with the addition of 5 more banks to the syndicate. So after all these transactions, the group will have a total liquidity of more than EUR 18 billion. I should mention also that on top of that, in April, London Gatwick obtained a new GBP 300 million bank loan due to mature in April 2022. You probably know that in April, Moody's confirm its A3 rating with stable outlook on VINCI SA, the holding company, and ASF. And meanwhile, S&P confirmed its A- rating on VINCI SA, ASF and Cofiroute, with stable outlook, so like Moody's versus positive outlook previously. So these decisions from the rating agencies reflect the confidence in our financial robustness, the prudence of the management of VINCI and the quality of our business model that brings together a wide diversity of complementary activities operating in an ever increasingly varied geographical universe. So as a conclusion, with the measures we have taken to adjust expenditures and revise investment programs across all our business lines, with the financial resources at our disposal and with our record-high order book, VINCI is well equipped to get through this major crisis even if it were to continue for a long time, which, obviously, we -- no one wants to see that happen. Looking further ahead, we are confident that we will bounce back strongly. Let's now have a closer look at the main divisions. VINCI Concession to start with. Q1 sales, EUR 1.7 billion, up 2.6%, but down 6.3% like-for-like. Autoroute, revenue of EUR 1.1 billion, down 5%. After a strong start of the year, season traffic was up 9% at the end of February, of which light vehicles, plus 10%, and trucks, plus 3%. The traffic fell sharply in March, down 39%, of which minus 44% for light vehicle and minus 14% for heavy vehicles, after the lockdown measures were introduced across France on March 17. The decline then accelerated and the trend in late March continued into early April. However, the fall in heavy vehicle traffic has been less severe than the drop in light vehicle traffic as France maintains the basic level of economic activity. So as a whole in Q1 versus Q1 '19, traffic was down 8.6%, minus 9.7% for light vehicles and minus 3% for heavy vehicles. VINCI Airport. VINCI Airport revenue was EUR 521 million for the quarter, up 24% on an actual basis due to the consolidation of London Gatwick, but down 10% like-for-like. In terms of traffic, passenger's numbers in the 45 airports managed by VINCI Airports were down 21% in Q1. Not surprisingly, the traffic fell sharply in March, down 56%, affected by travel restriction worldwide to limit the spread of the virus. The decline was particularly pronounced in late March. Air traffic is now running at very low levels and is being limited to threat and health-related and emergency transportations. Contracting. Contracting sales of almost EUR 8 billion, down only 0.3%, so almost stable on an actual basis, and down 2% like-for-like. Please note that for the first time, international business accounted for more than half of the total of contracting activity. In parallel with the impact of recent acquisitions, mainly by VINCI Energies, there was more than 3% organic growth outside France. But in the meantime, Contracting business levels fell by over 7% in France. This shows the average stop that followed the country's lockdown on March 17, while business continues -- continued to some degree in other countries and was even maintained to at almost 100% of the normal level in places like Germany, Northern Europe, Australia and the Middle East. So for VINCI Energies to start with. Revenue of EUR 3.2 billion, up 5%, stable like-for-like. Following a strong start of the year, VINCI Energies saw its activity in France fall after the lockdown. However, the business lines operation in certain essential sectors such health care, energy, telecommunications, pharmaceutical and food enabled it to maintain around 1/3 of its normal estimated business levels. Outside France, the situation remains better overall. Some regions in which VINCI Energy has a large presence, such as Germany, Scandinavia, Switzerland, are continuing to show activity levels close to normal. In the Q1 as a whole, the fall in business level in late March was offset by VINCI Energy recent acquisition in countries such as Netherlands, Germany, Spain and France. Eurovia. Eurovia revenue of almost EUR 1.7 billion, down 1.5% only, actual and like-for-like. In a nutshell, in France, after an excellent start of the year in which it benefited from both its strong order book and favorable weather conditions, Eurovia's business levels fell sharply after the lockdown. Its activities after having almost come to a halt are recovering very gradually. Outside France, however, activity has continued to at least some extent in most Eurovia's countries, with business level close to normal here as well, Germany and in the U.S. VINCI Construction. VINCI Construction revenue of EUR 3.1 billion, down 5%. Do bear in mind, in mid-March, like the other contracting business lines, VINCI Construction saw a sharp decline in its activity in France where most of its projects were shut down. Outside France, however, activity continuing to a varying extent in many countries depending on the region. The situation nevertheless remains changeable as the pandemic develops. Our analysis of how countries reacted to the pandemic reveals 3 major areas. One, Asia, Hong Kong, Singapore, Korea, which is used to pandemics, and it can deal with them while maintaining business levels at a high level by having the appropriate equipment and organization. Second area, the Anglo-Saxon world and the Germanic world where there was a pragmatic response to -- that maintain business level as much as possible while complying, of course, with health standards. And finally, the Latin world, which includes France, obviously, which had a knee-jerk reaction that led to business being suddenly and almost completely shut down. To end with, VINCI Immobilier. The revenue was 25% to EUR 238 million, thanks to a strong production in commercial property relating to several major projects, but like the one in the Gare de la Part-Dieu station in Lyon. However, revenue fell in late March as almost all contracting projects in France came to a halt. The number of homes reserved in France, including Urbat, our subsidiary in the south of the country, fell 29% to 1,041 apartments. So thank you for your attention. I'm now ready with my colleague to try to answer your question.

[Operator]

[Operator Instructions] The first question comes from Elodie Rall from JPMorgan.

[Elodie Rall, Research Analyst]

I hope you're well to you. First of all, so I have 3, if I can. The first one is on motorway traffic. I was wondering if you could share the views that you have on how you think traffic will recover once the lockdown is lifted. Because, on the one hand, presumably, people are going to be more comfortable driving than taking any thought of public transportation. But on the other hand, we hear government talking about potential travel restriction between regions. So I was wondering if you could share your views with us on this. The second question is on working capital. I know you don't like to comment on that, I know. But I was wondering if you could give us a little bit of your thinking and how we should think about the impact from this sharp fall in contracting activity right now and then the progressive recovery on the working capital requirement for this year. And lastly, you haven't mentioned anything on dividend. You officially still are maintaining it. Given you haven't mentioned anything else, I don't know if you could give us some more color. I how the AGM is delayed. So we've seen other peers postponing the dividend. So I was wondering if you could share a little bit of your views on that as well.

[Christian Labeyrie, CFO & Executive VP]

Okay, Elodie. So on the dividend, obviously, I'm not the one who takes the decision. The assembly has been postponed. The new date for gathering the shareholders has not been set up yet. In any case, it should take place for a legal reason before the end of June at the latest. So Board of Director will take the decision to organize a new meeting. This should take place, I think, beginning of May, let's say, during the first 2 weeks. And it will be up to the Board to decide about the dividend for the previous year. I have no more information at this stage. For the motorway, I cannot comment because I don't know and nobody knows at present what will be the detailed measures that will be implemented after the 11th of May, whether it will be possible or not to travel on the motorways. What I understand, it was a statement made by the President this afternoon. It doesn't intend to have different situation from one region to the other in terms of deconfinement. This doesn't mean that traveling will be authorized, so we don't know. I mean we have to wait until the government makes up its mind. Obviously, if things are -- if it's authorized again to run on the motorways, I think the traffic should be good because people will prefer definitely to take their car rather than taking a plane, providing it's possible, or taking a train. For the working capital, you know we have a variation -- a negative variation of the working capital during the first half, which varies from one year to another. But it's in the range of say -- let's say, EUR 1.5 billion to EUR 2 billion during the first half of the year. So this is, I would say, the normal change of working capital during the first half, which normally is reversed in the second half. And this is due to the fact that we have less collections in the first half than in the second half compared to the fixed cost we have to incur and pay. Surprisingly, the working capital has been quite good in the first quarter of the year, which is probably linked to the fact that we had a higher level than normal of activity, and as a result of collection during the first quarter due to, in particular, the weather, which was pretty good. And this has benefited to Eurovia, in particular, and the other contracting activities. But obviously, since the activity has almost been stopped since March 17, we will have no -- very little activity in April, and as a result, very little collection, let's say, in June, next June. So we might have more consumption of working capital than usual, but I cannot tell you how much because I have no idea. It will depend on the pace at which we will resume the work. And for us, it's clearly -- but not just for us, for most of our colleagues and most of the French companies, the priority is to resume the work as soon as possible, which means that we first have to address the sanitary constraints, obviously, and agree with our clients on the resumption of the work. So that's clearly what we are focusing on at this moment in all our activities in Contracting because, on the Concessions side, there is not much we can do at present.

[Operator]

The next question comes from Jean-Christophe Lefevre-Moulenq from CIC.

[Jean-Christophe Lefèvre-Moulenq]

Hello? [Foreign Language] I have 2 specific questions, if you don't mind. First one, in terms of U.S. activities of Eurovia, there is, I think, a lockdown in some states and even more countries, mainly in the Eastern Parts. Are you now impacted or not? Are you obliged to stop the works of Eurovia in U.S.? And the second issue, real estate, how is the situation of cash in and cash out with this very cyclical activity?

[Christian Labeyrie, CFO & Executive VP]

About Eurovia in the U.S., the activity is almost normal, like more than 90%. We have been obliged [Audio Gap] as a figure, which in any case, changes week after week. The bigger ones, in particular, the office buildings in the Paris area in particular, but also in Lyon, are not back to work yet. Because If you see, the logistics for organizing the protection measure is more complicated to implement on those big sites.

[Jean-Christophe Lefèvre-Moulenq]

Do you have the [ '19 ] ...

[Christian Labeyrie, CFO & Executive VP]

And to reduce the cash burn -- but this is not just in VINCI Immobilier, it's everywhere, we have implemented at a very large scale furloughing measures to -- which is possible in France and in some other countries also, but mainly in France, which means that our people who are unemployed are paid almost entirely more than 80% for the low salaries, low wages by the country, by the states, or are in vacation or in sickness situations. So the management objective being obviously to cut as much as we can the cash burns on the fixed cost.

[Jean-Christophe Lefèvre-Moulenq]

Okay. You also -- so you don't see any major risk [indiscernible] in the state? Also did your cash [indiscernible] change as we had 12 years ago, if you can remember? We also [indiscernible] generation with the experience. It's very [indiscernible] in terms of the cash position in all construction groups [indiscernible] a major risk.

[Christian Labeyrie, CFO & Executive VP]

Look, it's clear that a recovery in the real estate activity in France will take longer than in other businesses, like for instance, contracting. Because if you want to sell a project, you first need to build it. And during the summer, during the vacation period, but maybe we will have no vacation this year, but okay. During the vacation period, it's not the best moment to sell apartments. So we might have some delays compared to the normal situation to sell and to deliver our projects. But for the moment, it's -- for me, it's a one-off. It's a one-off problem to address, not an existential problem like the one we had to face in the mid-90s, if it's what you have in mind. And don't forget that VINCI Immobilier is not a very big player and is entirely owned by VINCI and financed by VINCI. And the treasury, the cash of VINCI Immobilier except when we buy new land is coming from its customers. So we know -- we are quite prudent. Like most French developers, we never launch a new project without having sold already 40% to 50% of the project to the customer. So we get paid before starting the work, which reduces also the risk you mentioned.

[Operator]

The next question comes from Stephanie [ Dart ] from Bank of Canada.

[Unknown Analyst]

I have 2 please. The first one is on cash burn specifically in Contracting. If we look at last year, I think excluding DMA, you were a bit less than EUR 35 billion. And about 30% of that was staff; 25%, purchased, consumed; then 24% in subcontracting; and 13%, external services. Could you please give us a little bit of flavor to which extent you believe each of those are variable? And to which extent you believe that you could avoid negative margins for this year within Contracting? And my second question, please, is on H2S, the new contract you just signed. Could you please let us know what the structure is? I don't think it's exactly a cost-plus fee. But if you could highlight if you have any risk there, any inflation hedge and raw material, in particular.

[Christian Labeyrie, CFO & Executive VP]

To answer the question about HS2, so it's not -- you're right. It's not a cost-plus contract. It's more sophisticated than that and more [Foreign Language]. It's what we call an incentivized cost model, which means that the fee we can get, the profit we can make on this project, obviously, it depends on the way we manage and we optimize the cost. So the more we optimize the cost, the more we make, but with some limitation in the worst case and in the best case. So it's quite a good system, I think, to -- it's a win-win system, I think, very intelligent, which has been negotiated with the customer. For the first question, it's obviously a very important question. The fixed cost proportion versus activity obviously depends on countries and type of businesses. But to make it simple, it varies between Construction, Eurovia and Energy. Between 30% for Construction, maybe 35% for Eurovia. So we have more fixed cost at Eurovia due, in particular, to the amount of equipments that we operate on our sites compared to Construction where more equipments are rent. And then you have Energy. It can seem surprising, but Energy is over 40% of fixed costs, which is due to the fact that Energy, it's essentially labor cost. Energy employs more people internally. So that's the amount, rough idea of the percentage on revenue of fixed cost. And of this fixed cost, what is important, it was -- it's the internal labor part, because this internal labor part, in most cases, in particular in France, which is a big portion, as you can imagine, can be, I would say, subsidized to a large extent. So this permits to reduce significantly the amount of fixed cost we would have to bear in case we would have little activity. So the proportion of labor cost within the fixed cost varies between, let's say, 45% at Eurovia to 75% at VINCI Energy, Construction being in the middle, around 60%. But this part of the fixed cost is, in reality, can be transferred, to some extent, to the social security or to the state financing system in big countries like France, the U.K., Germany, et cetera. The exception being the U.S., but as I said before, in the U.S., we work almost normally. And in case we would have a workload problem, we could -- that's a pity, but we would have to fire the people and then recruit them back. But it's clearly the area of focus. We have 2 main area -- we have 3 main area of focus. One is resume the work as soon as possible, providing that security conditions are met. Second, reduce our fixed cost as rapidly as possible to cope with the decreased level of activity. And obviously, get the cash in and reduce the cash out as much as we can. And it happens, that at this moment, as I said before, the cash situation is rather good because we benefit from the fact that we collected significantly at the end of March due to the high level of activity in January versus normally in January and February.

[Operator]

[Operator Instructions] The next question comes from Gregor Kuglitsch from UBS.

[Gregor Kuglitsch]

Same to you, I hope everybody is okay. So my questions are just to be very clear on the follow-up to the comment you've just made. So if we can just do very basic math to I understand correctly what you're saying. For instance, in Construction, you said 30% is fixed cost and 60% of that is labor. Therefore, 40% is nonlabor. So if I multiply the 2 out, that would beget me a 12%. So in other words, if you lose -- if you make no revenue of, say, last year, you made EUR 1 billion today at 0, you'd make EUR 120 million loss. Just so we're square on numbers. I think that's how I read it. Just maybe if you could confirm. If you could then help us on a second question. I think you mentioned deferral of CapEx and other nonessential expenditure. If you could just help us out a little bit. Anything maybe on the concession CapEx? Whether things are getting pushed out on the operating CapEx? Anything you could tell us sort of what you're planning for. And then maybe a final question on Airports. I think it's a point in the first quarter, but also, I guess, maybe going forward. But -- so your traffic was down fully consolidated subsidiaries, 19%, but your revenues were only down 10% like-for-like, I think, rounded. So obviously, there's a difference. And I wonder whether it's things like cargo or something like that. Obviously, inflation as well. Maybe putting the question differently. Going forward, if passenger traffic is basically virtually 0, what kind of revenue levels do you actually get? So I'm thinking maybe any fixed fees you get from any airport operators, any airlines, and then -- or cargo? That would be helpful.

[Christian Labeyrie, CFO & Executive VP]

Look, on the first question, I cannot add anything more to what I have said already because it's really a rough math. I think the reality will be much different because our people -- we are a very decentralized organization. So the guy -- the important guys at VINCI are not at the corporate level but on the field, and they are very -- they are reacting very fast. And I just discussed with one of my colleagues in charge of construction. And he visited 2 sites yesterday in the Paris area where we -- you could have thought that it was impossible to resume the work. One is the station at La Defense, the air station, which is located under a big commercial center. And the other one is a burrowing machine in the Grand Paris project in the southeast of the area. In both cases, the work is -- we are back to work. Already, 100 people are working at La Defense. But tomorrow, it will be 200 and then back to 500, which is a normal level. So we are -- they are really doing a fantastic job to try to limit as much as possible the time during which we will be under-optimized in terms of cost management. But the good question is the second one about CapEx, because, clearly, depreciation, there is not much you can do once you have acquired an equipment. But you can try to reduce the future CapEx, which is what we have done already. We have stopped or postponed significant amount of CapEx, both in the Concession and in the Contracting businesses. All together, I estimate the total reduction or postponing of CapEx in the area of magnitude, the order of magnitude is around EUR 700 million, which represents in the Concession business approximately 25% of what was forecast for this year. It doesn't mean that we will never do it, but we will do it later when the conditions will be back to normal. And in Contracting, we have reduced the CapEx program versus what was planned in our budget by almost 1/3. And all together, this represent the savings in cash of EUR 700 million. Then you asked a question about the Airport business. I don't know if we have all the answers, but Gregoire is going to try to answer your question.

[Gregoire Thibault]

So you're right. Finally, the revenue decrease in Q1 is a bit less pronounced than the traffic pax decrease. But I remind that the [ iron ] material revenue is not only linked, of course, to the number of passengers, but as well to the number of ATM, which decreased slightly less than the number of pax, because you had seen, at least in the part of March, some flights on was -- we were not very load, but still, I know as well we have some freight. So it can explain a bit of difference. And on the [ non-iron ] material parts, you -- we still collected some retail rents. We still collected some real estate rents. As well, for example, advertising revenues, we are still being paid for that. So that's why there is a kind of difference that you noticed between the trend of the traffic and the trend of the sales. From there, if your question is if we have 0 revenue for Q2, at the end of the day, don't dream. The impacts on revenue will be more material than what you can assume in Q1.

[Gregor Kuglitsch]

No, no, for sure. But if you have no pax, you still make some revenues. That was kind of the question in a way.

[Gregoire Thibault]

After -- if behind that, the question regarding is the margin...

[Christian Labeyrie, CFO & Executive VP]

These issues are dealt with on a case-by-case basis. There is no general answer to this question. If the question is, with 0 passenger in a particular platform, do you generate revenue? The answer is it depends on where, with what type of customers, et cetera, what type of partners. So there are very different situations, so we cannot give you a global answer to your question. I'm sorry.

[Operator]

The next question comes from Tobias Woerner from MainFirst.

[Tobias Alfred Woerner, Research Analyst]

Tobias Woerner here from MainFirst. 3 questions, if I may. Number one, maybe just confirm your exposure to the civil engineering side? And as a whole for the group and revenue terms, I get to around 47-or-something percent. That's number one. And number two, what do you expect in France, and let's say, the U.K. and Germany and the U.S. in terms of infrastructure spending programs? Do you have through your industry associations any sense of that? And then just lastly, I hear what you say in the airports. It's difficult to give a one-shot answer. But maybe take your big airports, let's say, Gatwick. What you're doing there to mitigate the severe impacts there?

[Christian Labeyrie, CFO & Executive VP]

Okay. Can you repeat the last question, please?

[Tobias Alfred Woerner, Research Analyst]

Yes. Obviously, with airports, it's difficult to give a one-shot answer in how you will mitigate the situation in the airport side in the shorter, also in the longer term. But if you could give us, using Gatwick as an example, what you're actually doing on the ground there now to mitigate the situation and what your thinking is going forward.

[Christian Labeyrie, CFO & Executive VP]

Okay. On this last question, I would like to mention the fact that the management of Gatwick is very soon going to issue a detailed presentation on its website explaining in detail the measures that have been implemented. So I don't want to interfere with this presentation. But to make it simple. It's a combination of many different things. OpEx reduction, quite significantly, including a layoff of people. Revision of the CapEx, as I mentioned before. But considering the fact that some CapEx on -- have been pursued, because when you don't have traffic, it's sometimes easier and more efficient to work on the site, and particularly when you work on the, as you say, the runway, it's an example, also in the building sometimes, if you don't have passenger, you can work more efficiently. But they will disclose more information. So if you can be a bit patient. This should be available very soon now, probably in the coming days. As for the civil engineering exposure of the group, if you add up the traditional civil engineering activity, which are made of many small and medium-sized projects, but also the major project division, which is essentially doing civil engineering jobs, VINCI Construction Grands Projets. And also Soletanche Freyssinet, which is done of many small entities, but performing civil engineering jobs in very specialized areas. All that together represent 2/3 of our total -- represented last year 2/3 of our total revenue. And I think this proportion shouldn't change much this year, maybe a bit more with the Grand Paris project which is developing and now with the HS2 project. So approximately 2/3 civil engineering, but it includes approximately 25% to 30% of specialized business. So building represents approximately 1/3 of the total activity of the VINCI Construction. And what are the projection, honestly, post confinement? Nobody has any idea of what is going to happen. Probably the government will have to re-dynamize the activity of the country. Will that be done through additional investment in civil engineering? Honestly, I don't know. And I think we have enough job to do at present. We don't really need more jobs in construction. We have plenty of -- we have the historical order book I mentioned before. So the important thing is maybe not to get more work, but already do the work we have on hand, at least in France.

[Operator]

The next question comes from Nicolas Mora from Morgan Stanley.

[Nicolas J. Mora, Equity Analyst]

Three quick questions for me. First one, on -- sorry, on net working capital. Do you expect, especially from VINCI Airports and Concessions, a bit more headwind in 2020, especially from airlines dragging their feet in paying fees? Second point, the order intake in the first quarter was -- I mean on our numbers, very strong, very reassuring. Can you explain us a little bit, especially in energy, what went on, why the order intake was so strong? And last point on liquidity. We thought you had plenty of cash. You just keep on panning up more. What's the plan? What are you going to do with EUR 18 billion? I mean there's plenty of things to buy, but we don't think that's really your priority right now. So just was wondering what -- where you would stop and what you expected to do with all this.

[Christian Labeyrie, CFO & Executive VP]

On liquidity, you understood that we don't have one -- EUR 18 billion on hand. The EUR 18 billion includes more than EUR 11 billion of available facilities. And if you add up the commercial paper, it's even more. It's EUR 14 billion. Of the EUR 18 billion, EUR 15 billion is credit facilities or borrowings, just in case the actual cash position is only, if I can say so, around EUR 5 billion, of which approximately half in the subsidiaries. That varies according to the moment in the year. And the rest, centralized at the holding company. So that's not that significant. The idle cash is not that significant, considering the size of the group, which is huge, and considering the variation of the working capital that we can expect in the coming months, considering that the first quarter position was abnormal, it was better than expected. So since we are prudent people, you know us quite well, and this is clearly a positive appreciation that the rating agencies have taken into account when they recently confirm our A- and A3 long-term rating. We are prudent. That's true. But we prefer to have too much cash than not enough cash like some of our colleagues or competitors. That was the first question. What was the other point, Gregoire?

[Gregoire Thibault]

[indiscernible]

[Nicolas J. Mora, Equity Analyst]

What's the net working capital from -- on the Concessions side?

[Gregoire Thibault]

The net working capital on the airport business and of the motorway business is obviously not the same. Probably the recovery of the airport business will take longer, will clearly take longer than the recovery of the motorway business. That's why also we think it was reasonable to have some liquidity available. And that's why Gatwick, in particular, which are bigger assets, Gatwick negotiated recently an additional GBP 300 million facility with its relationship banks, which should be sufficient to cope with those difficult times until the recovery takes place at Gatwick. What we believe? We don't -- obviously, we have no certainty. We believe that the recovery will be progressive. Logically, it should be progressive. Starting with flights within the country, for instance, we operate Nantes and we operate Lyon. And when you want to go from Nantes to Lyon, if you go, you can go by car, but it takes you some hours, a few hours. You can go by train. In such case, you have to go through Paris. So it's quite easier to take a plane, a direct flight from Nantes to Lyon. So that's the type of thing that could be implemented as soon as the government feels more comfortable with the security, the safety, the health and safety situation. And in the second one, we can expect opening flights within Europe. And we think that Portugal could be one of the first country which could benefit from the reopening of flights within Europe, between the U.K. and Portugal or Germany and Portugal, et cetera. What will take much longer, clearly, are the long hauls. So that's why the recovery will be progressive and it's preferable to be in a safe situation versus liquidity compared to the motorways.

[Christian Labeyrie, CFO & Executive VP]

I think your third or your second question, Nicolas, was regarding the order intake for VINCI Energy. Still quite strongly up in Q1 '20 versus Q1 '19. It's mainly due to some projects and contracts we won in Scandinavia, notably, which are at VINCI Energies scale, quite big. It's a few million euros, but it makes the difference in terms of the valuation. [indiscernible]

[Gregoire Thibault]

VINCI Energy was about to achieve a record year both in France and in its main markets like Germany, Northern Europe, the U.K. and now some more exotic places like the U.S., Brazil or Australia. But bad luck, we were hit in this fantastic improvement in mid-March. But at the end, the quarter remains quite satisfactory as a whole. Obviously, Q2 will be different.

[Nicolas J. Mora, Equity Analyst]

And just on that front, just to -- final question on -- can you remind us the exposure, especially to industrial investments within VINCI Energy? Because the mix has changed a lot. I mean what's your...

[Christian Labeyrie, CFO & Executive VP]

I'll just say, industry as a whole, but there are many different types of industries. So jobs in the factories represent almost 30% of the total VINCI Energy revenue. More or less like infrastructure, infrastructure meaning electrical lines, transportation and distribution, et cetera. And then you have building solution, which is obviously depending on the situation in the office buildings, representing around 25%. And the rest, so 20%, being the new information and communication technology business, which is resisting quite well in the present moment, especially the maintenance part, because it's very important that all the telecom networks work properly, and a lot of maintenance has to be done to achieve that.

[Nicolas J. Mora, Equity Analyst]

All right. And very last one, on the splits on private versus public demand once we start to get out of lockdown and look into the second half of the year. Have you had first hints from clients canceling initial projects, canceling initial talks? I mean I suspect not many people...

[Christian Labeyrie, CFO & Executive VP]

I don't have a global view on things to answer your question. Just maybe to say that the public clients are more supportive, I would say, are more supportive in order to resume the work. But that's really general talking. I mean you have some -- also some private customer who are supportive. But to make it simple, the example being the work we do for the Grand Paris, the company of the Grand Paris or the [indiscernible]. So the big public customer are really helping so that we can resume the work as soon as possible. Probably, they received some advice from the central government. I don't know. More questions?

[Operator]

The next question comes from Pierre Bosset from HSBC.

[Pierre Bosset, Head of French Equity Research]

I'm glad to see that you're all in good form. I have 3 question, if I may. So the first one is on the additional costs linked to the COVID-19 constraints. How easy do you think it would be easy to pass those additional costs to the final clients? My first question. My second question is on the margin for next year. Is there any reason to think that the margin for next year will be different from what you were expecting before because those margins are coming from your order book? So do you have any reason to change your expectation? And the last question is on airports. There is probably some situation where the drop in revenue will put in danger some covenant. I'm speaking about Gatwick, for instance. So what is the way out? Are you ready to inject some more money? Or do you think that the way out will be to get some waiver coming from the banks? So what do you expect here in term of financial situation for the airports?

[Christian Labeyrie, CFO & Executive VP]

On the last one, we have not identified any particular situation where we would be in danger. You know that most of our concession are financed out of project finance schemes. About Gatwick, I prefer to leave the management of Gatwick answer your question. And I think we'll have the answer in the documents that will be released soon. But obviously, everything depends on those matters on what scenario you take into account to make your projections. But so far, so good, I would say. But this obviously can change depending on how long it will take to recover the traffic. Projection for 2021, honestly, it's not really the thing on which we are focusing now. I mean we are in a very short-term focus at this moment on resuming work, cutting costs, postponing CapEx, trying to limit the cash burn as much as possible. And then we see where we are when we close the accounts at the end of June and how we can then project ourselves until the end of the year. 2021 is very long-term for the moment, not just for us, but for many, many corporate in France and in many countries.

[Pierre Bosset, Head of French Equity Research]

No, no. I accept that. I fully understand. But my question was more with -- because there is some margin which are embedded the order book that you have, which is very large. Is there any reason to think that those margins could be different because of the COVID-19 additional costs or whatever?

[Christian Labeyrie, CFO & Executive VP]

It's early. It's too early to say. It's too early to say because we are precisely working at present on how to organize ourselves to comply with the new constraints without deteriorating too much the productivity and the organization of the work, but we are learning day after day. I was discussing with Jerome Stubler, the head of VINCI Construction, just before this meeting. He was explaining to me some of the ideas that have been recently implemented on the sites to make the work done as efficiently as possible. So I don't have the answer to your question about what impact it could have on our productivity, and therefore, on our cost. And therefore, what would be the question to address eventually with our customers. It's too early to say.

[Operator]

[Operator Instructions] The next question comes from Jenny Ping from Citi.

[Jenny Ping, Director and Analyst]

Just 1 from me. ANA. Obviously, you've been negotiating with the government or have signed the MoU in terms of the CapEx and how you're going to be remunerated for that. Where are you on that negotiation process? And as you said earlier, presumably, a lot of it has been postponed. But should we be expecting any material CapEx outflow on ANA anytime soon? Or is the whole project now in question in terms of the spending, the additional CapEx on the runways, et cetera?

[Christian Labeyrie, CFO & Executive VP]

Okay. In Portugal, where we have one of our major asset, as you know, we have a long-term view on things. Like we have, in most cases, when you operate a long-term concession, you have to have a long-term view on things. But particularly in Portugal, where we operate all the airports of the country and where we have established with all the different governments of the country, close and productive relationships. And this is still the case, obviously, whatever the difficulty we encounter at this moment. So for Portugal, which has managed quite well so far, there is the virus crisis, we think we cannot change our way of behaving just because of that. We have to be constant in our approach of the situation. And that's why if we project ourselves in the medium term, there is no doubt about the fact that the capacity of lease bond will have to be improved and increased. That's why the Montijo project, we continue to work on it. It doesn't mean that we will spend huge amount of money in the short term because we are at an early stage of the project and we are essentially doing studies. So we do engineering work, not construction work and not before sometime. So we don't change the way of behaving on this one. It doesn't mean that we don't have a close dialogue with the authorities about how can we reduce some costs, some operating costs in the present moment. But we have to pay a lot of attention to the social situation of the country because we are a close partner of Portugal. I don't know if my answer is clear enough, but it's really what we think. We don't -- we mustn't have a short-term view on the way we manage the issue in Portugal.

[Operator]

[Operator Instructions] The next question comes from Nicolas Mora from Morgan Stanley.

[Nicolas J. Mora, Equity Analyst]

The last one before we go. Is it time for you to get back to the government and relaunch the idea of a stimulus plan in French toll roads?

[Christian Labeyrie, CFO & Executive VP]

No. The answer is no. I don't think it is a priority, Nicolas. We have paid a lot of attention in the way we manage our motorway during this difficult period. You probably don't know because you are not allowed to travel, but we have kept all the oil stations and the shops open, all of them, to make sure that the truck drivers could have a rest up whenever they have to fill in their tank, can take a shower, have a decent bathroom facilities, et cetera. This was very important for the image of VINCI Autoroutes. And I think it has been much appreciated by the authorities, by the Minister, Madam Borne. But now the question about a new planned or announced stimulus package is clearly not the issue for the moment. Again, we have plenty of work to do on our motorways. We have the previous stimulus plan. We have the investment plan. We have different things which have been stopped. We have the bypass of Strasbourg. All these works have been stopped. So now the priority is to resume the work. And it has started, I think, yesterday or the day before on the A62, which is in Tarn-et-Garonne in the southwest of France. So little by little, we resume the work. That's clearly our main focus.

[Operator]

There are no further questions in the conference call. I will now give back the floor to the speakers. Thank you.

[Gregoire Thibault]

Thank you. Thank you very much, everybody. And of course, the Investor Relation team is at your disposal to follow-up and to answer your question. So good luck with all the publication ahead. Good luck with the school at home for some of you. And have a great evening. Bye-bye.

[Operator]

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