Eiffage SA

PAR:FGR

Earnings Call Transcript 2019-Q4

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Good evening, ladies and gentlemen. Thanks for being here for this presentation of the annual results of Eiffage. I'll get back to the highlights of this period that I will complete with the figures for the fiscal '20 -- future 2020 figures, and Christian will present to you the figures of 2019.Globally speaking, we are online with June 30, and 2019 will remain a very good year for the group. Our builder/concessionaire model show how relevant it is with beautiful successes in Works and in Concessions. The success of 2019 and of beginning 2020 will represent EUR 1.4 billion investment implemented by Works and are still not yet integrated in our book of orders. Regarding the highlights in Works, the traction is still there, since the growth is about 10% for the second consecutive year. We commend ourselves that the internal growth be the first engine of the growth of the group and works.Concession side, this year will remain highlighted by the several successes. They are the outcome of several years of work. According to our strategy, this development of our Concessions system in the territories in which we are really set in a sustainable way, echo the presentation of last year. I'll get back to some highlights of deployment, rolling out of our low-carbon strategy. Regarding the works. How not to mention the ramping up of all our projects on the Grand Paris Express that you see here on screen. We have currently over 2,500 employees involved on the various projects. On line -- underground Line 16.1, this was the year of foundation works. It's the tunnel borers that are moving forward in parallel are the civil engineering of all the works. [ Armelle ], the first tunnel borer, left Aulnay and trod already or dug already 400 meters. Since the Verdun Station that you see on screen, 3 tunnel borers will operate. The first named [ Ban Channels ] start to dig mid-March; the second [ Enesse ] 4 weeks later; [ the Reen ] will be installed in the same pit this summer while the 2 other tunnel borers will be in service operating. Hence, 3 tunnel borers that will work and evacuate landfill from the same pit, a configuration that have never met even in the major infrastructure projects in Asia. On Line 15 South, Lot T2B inception and first 2 tunnel borers, Camille and Aïcha, started to work in October -- December, they are now digging. Lot 14 North is totally completed. South, tunnel borer, Claire, has already trod 1.3 kilometers and is digging 35 meters a day in direction of the Orly Airport. On the Eole project, we started the tunnel works, Virginie, who dug 1.4 kilometers, went through the River Seine and is currently in Noé. We led the bowstring on the Bezons Bridge. The works of the Grand Paris Express, as you know, are works of roads and catenaries on the Eole line. We started the Nanterre on the new path outside of the operated railroad, and we went on with the reshuffling of the tracks on the operated networks. Eiffage Énergie Systèmes started on high- and low-voltage systems -- networks. We are also working on several other lots of the Charles de Gaulle Express. We started the works on the tracks on the operated network until 2024. 100,000 of hours have been already done in 2019.Beyond the Grand Paris Express, another large project is under way: The railway tunnel Lyon-Turin-Torino. Our teams implemented in September the first boring work. It's 9 kilometers of tunnel that are implemented traditionally and through tunnel borers. Many of the lots are being -- expecting the call for tender. We are glad to be fully involved in the preparation of Olympic Games in Paris in 4 years from now with all the lots of the Grand Paris Express and the athletes' village that you see here on screen, won by our teams last year; a marvelous challenge that we must absolutely fulfill.Another very large project is really occupying our energy systems: the ultimate diesel backups for 36 lots that we're making in the framework of the post-Fukushima program. It's 31 ultimate diesel backups that were transferred to the operators of EDF. We have been earmarked for the implementation of the first offshore wind park -- windmill park in Saint-Nazaire for a global amount of EUR 500 million with our partner, DEME. We're very present on this market in Northern Europe and United Kingdom. Eiffage Metal is the reference, the group of developers' knowhow now in France. Our teams started the sales of the first housing units in the eco-neighborhood of Châtenay-Malabry: as of February 14, 60% of the reservation of the 6 programs. This major program of urban design is very promising for the group. All of our business lines deliver the best of their know-how, so as to make it a real proof of concept of a sustainable city. Eiffage Immobilier implements, again, a record sale of housing units with 5,095 units. On screen, the Atlantis Heart in Massy. Eiffage Immobilier continues its progression and is really reaffirming its position in France, Belgium, Luxembourg, Poland and also in Switzerland. The dynamic of our property isn't limited to housing units. We have marvelous tertiary operations in offices and hotels, representing 30% of our sales in property. In our development close to the Grand Stade of Lille, we delivered the headquarters -- regional headquarters of Orange on -- here on screen. The motorway activity experienced a strong growth, especially due to the pre-election environment. Beyond the volumes, our motorway teams illustrate themselves in terms of low-carbon innovative products and prepare themselves to the change of their business, integrating the road as the main challenge of connection -- main channel of collection. Our program of R&D high street development has many innovations due to Eiffage Route, Eiffage Energy Systems, motorway concessions and sustainable development. On screen, 2 innovations showing the change of the motorway products towards the lower-carbon, Recytal-ARM laureates are the call for projects of the committee for road innovation and route 2017 and Biophalt, the vegetal recycled coating laureate of 2019. We laid the first, not cornerstone, but the first plank of the housing building in wood, Hypérion, Bordeaux. This project is at the core of the low-carbon system process of Eiffage. It's going to be the highest housing tower ever built in France. And a special mention for Goyer, who made a fantastic year in France and in Poland, becoming one of the unavoidable specialists of the façades, from left to right: Orange campus in Lyon; Pascal Tower in Puteaux; and the Warsaw Hub Tower in Poland. Internationally, Eiffage Énergie implemented in 2019 the equivalent of 3 solar farms of the size of Cestas, i.e., 900 megawatts installed, on screen, [indiscernible] Central Power Plant -- Solar Power Plant. Our Eiffage Métal teams in Spain go on manufacturing endlessly in our Albacete factory wind turbine stands used by our customers all around the world. Construction goes on being very dynamic in Benelux. On screen, the projects of the future headquarters of BNP Paribas Fortis in the center of Brussels. In the Netherlands, we have delivered a pharmaceutical laboratory in turnkey to Kropman, thanks to its recognized know-how in the area of white rooms. In Senegal, a magnificent example of sustainable implementation where all of our teams in Senegal maintain a goodwill activity in the country and are a major asset to roll out our knowhow when major structuring projects are on the table. For one of their Spanish customer, our teams of Eiffage Energía associated with Senegalese teams to implement the wind farm of Taiba Ndiaye this week -- delivered this week, 159 megawatts on 37 kilometers. 2019 was devoted to the preparation of the project Grand Tortue Ahmeyim, transport the project between Senegal and Mauritania for BP. Two highlights: development of the yard of 12 hectares in the Port of Dakar, as you see on screen, to implement the 21 caissons for the wave breaker; opening of the quarries in Mauritania that will produce the bedrock necessary for the implementation of the submarine embankment.In Germany, we commissioned the Hochmosel Bridge, major part of the Road B50, making a direct link with the Port of Antwerpen. Regarding the Concessions, before getting back to the 5 major elements of the year, some more current elements. We have acquired 9 micro power plants -- hydro-electrical power plants in the southwest of France. Works, we will make compliant the renewal and the increase of the power of those power plants and the building of a new power plant in Dordogne. We will also be in charge of the operation and maintenance of those power plants. This project is increasing our positioning on the renewable energy sector. After over 3 years of work and negotiation, we secured 7 years and 4 months of extension of the duration of the concession of the tunnels Prado Carénage in Marseille in exchange of the implementation of the connecting road, Schlœsing. We commissioned the new part of the road, 33 kilometers twice -- 2 parters within Pastetten and Heldenstein of the A94 in Germany; this partnership contract, public-private of 30 years, including maintenance and operation of the 77 kilometers of the road.And as I said in my introduction, from this year, we'll take out 5 major successes, perfectly on line with our strategic plan of 2016, enabling us to make the difference and to extend our portfolio of concessions at the heart of our territories. First, the strengthening in the capital of APRR, we will hold 52% as compared to 50% currently. You often asked me the question about our potential strengthening when we sold the Macquarie funds. When the sale was total, the governments on FRE gave us a central role without saying a word about the reputation of our teams with the excellency of their management. So we could negotiate this operation in good conditions and we will go on managing and deliver our knowhow for the duration of the concession. We will soon sign a concession contract of the Route Centre Europe Atlantique. Commission is foreseen for March. Project is about the widening and the compliance of the RN 79 between Sazeret in the Allier region and Digoin and the Saône-et-Loire department. This will be the major reference in terms of free flow in France. It was a major target for Eiffage and APRR. It's a greenfield construction, which is the model we prefer because it allies very important investments of works and a good knowledge of traffic. We are in compliance with the APRR network that will operate immediately as of March. Finally, with a span of 48 years of concession, it's going to be the longest one of our portfolio after Millau. Let's remain on the motorway with the good news of this beginning of the year, where we won in groupment (sic) [ consortium ] the public-private partnership of 30 years for the motorway A3, the most important PPP of infrastructure ever implemented in Germany. I talked to you about it for the first time 2 years ago. It's about the widening from 4 to 6 ways and the operation and maintenance of a section of 76 kilometers. Works will mobilize the teams of our German entities alongside our partner, the BUNTE company in Bavaria. The works contract is close to EUR 1.5 billion that will be performed 50-50. We have all the skills to come up with this PPP given our experience on the A94. It's an ambitious project, but it is at our scale. It will mobilize about EUR 50 million of share capital and EUR 850 million of debt and EUR 700 million of subsidies.According to our strategic plan and following a work of understanding and preparation of several years, we materialized our first success of PSD for the airport in the region of Ile-de-France where all our lines of business are present for quite a long time. We have been appointed concessionaire with Aéroport Marseille-Provence of the Lille Airport for a duration of 20 years as of January 1, 2020. The project includes renovation works, extension of the existing terminal to improve the welcoming condition of the customers and support the development of the platform. The concessionaire will have to work on the operation, maintenance and operation of the airport, the sales, the revenues of EUR 29 million -- or EUR 32 million and the EBITDA, EUR 7 million. Finally, we seize the opportunity of the sale of the 49.99% held by CASIL in the Toulouse-Blagnac Airport to secure a concession with an end in 2046 in Occitanie, but also a heavyweight reference in the management of an airport of the platform of near -- of 10 million passengers per year, an acquisition for an amount of EUR 502 million. Co-shareholder, CCI, Toulouse Métropole, the Region Occitania and the French Government -- French state. Sales 2019, EUR 161 million and EBITDA EUR 62 million. As you see, the 5 last major changes in concessions are fully in line of what we have told you in 2016 in our strategic plan, so as to renew our portfolio re-concessions while remaining on the territories where we are very present. Following those highlights of the year, I wish to get back with you on our low-carbon strategy that I presented in detail last August. In 2019, we started an ambitious policy to highlight the sensitivity of the company to the challenges of the carbon footprint. Low-carbon construction is an opportunity to make the difference, on the one side, on being proactive to significantly reduce our own carbon footprint; and also by innovating even more so to support our clients in their own process of reduction of their carbon footprint. By using the various levers of this policy, 2019 will be highlighted by the improvement of 2 notches by our rating carbon disclosure project, decrease of the carbon intensity of the group and refinancing of the banking facilities, EUR 2 billion at Eiffage and EUR 3 billion at APRR and Eiffarie, and the cost is for the function of the performance on 2 criteria, society and environment. In April 2020, we shall publish our first climate carbon report according to the reference TCFD, an open innovation we implemented with Impulse Partners, the first French platform devoted to materials and processes low carbon that we have named Sekoya. Since June 2019, 7 representative partners of all of the value chain of building and construction joined the initiative so as to deliver their expertise in terms of carbon and improve the implementation of decarbonated solutions. The first call for solutions was inviting startups, SMIs, SMEs and ETIs to candidate around 6 topics, new mobilities, design and implementation, low carbon, circular economy, biodiversity, environmental engineering, methods/tools, renewable energies and energy performance. Within a quarter, 57 solutions were proposed through the platform online, 10 pre-selected candidates and 5 laureates. Sekoya, various different members of the club, wishes to support the designers in an implementation at a larger scale, enabling them to integrate future call for tenders. Convinced by the necessity to reduce significantly the emission of CO2 when we evacuate the landfills of 61, we have a partnership with Volvo to buy a fleet of lorries working on LNG. On our motorways in France, we have 12 high-power stations and 17 very high-power stations. Within 2 years, we'll multiply by 4 the amount of very high-power stations and eventually, more than 80% of the servicing areas of the networks will be equipped. After the survey of our highlights in our low-carbon strategy, let's move to our figures. 2019 can be summarized in a revenues growth of 9.4%, driven by the Works; an increase of our operational profit and current activities of 8% stronger in the Works, supported by the volume of business; an increase of the net profit by 15.3% to the level of EUR 725 million; a good position of the WCR, 2019 has been a specifically good year because we materialized EUR 566 million of external growth, EUR 502 million for the Toulouse Airport; finally, the order intake was very sustained, and our order book is at EUR 14.2 billion, growth of 2% over a year in spite of the strong increase of our activity.This order book makes us anticipate the growth of the activity more limited than works and a progress of the revenues for 2020. We will hence suggest to the General Assembly to put the dividend at EUR 2.8, an increase of 16.7%. Thank you for your attention, and I invite Christian to give you the explanation and details of the financial elements.

[Christian Cassayre, Chief Financial Officer]

[Interpreted] Good evening, everyone. As we -- as usual, we shall go through the numbers, starting with revenue. This year, we have a 9.4% increase in revenue and that's evenly distributed between France, 9.2%, and international 10-plus 3% (sic) [ 10.3% ] growth. So revenue now stands at EUR 18.1 billion. You may remember that it was only EUR 14 billion back 3 years ago. So that's a EUR 4 billion increase in a matter of 3 years. Over the year 2019, what should be pointed out is that while increase in revenue is similar to that of last year, last year it was 9.5%, there's a different explanation this time around in -- well, in '18 -- 2018, we had a 6% increase -- 5.6% increase in Concessions compared to 2.9% this year. But in contracting work, we had a more external growth, 5% compared to 2% this year. So the key item there, of course, is organic growth in the Contracting business, and I will get back to the underlying trends. In geographic terms, we have 31% of contracting revenue international because we have an even distribution between France and the rest of the world. But you will find that most of the business now, the significant business is in 3 major countries that generate anywhere between EUR 800 million and EUR 1 billion in annual revenues. You have Germany and Belgium, just like last year, but Spain this time around enjoys significant development in 2019. Operating profit from ordinary operations was up 8%. You may remember that we had an 11.7% increase last year -- 12% [indiscernible] last year, 90 basis points in the Concession business. If you have Contracting plus Concession together, there is a significant improvement in the contribution to operating profit, EUR 69 million in Concessions and EUR 79 million in the holding and Contracting business. So you have, again, a good even balance, but you can see that both Concession and Contracting have seen their profitability improve. Looking at the details of each of the branches, you first have a good performance of the property development business, almost EUR 1 billion in revenue, up 16.5%; less so in the building business as such, we have 3.4% on works alone, but you may remember that in France, we had 5-point -- we were down 5.6% in 2018. So we are back to the levels we were at in 2017. The biggest market outside France was Belgium. We have a slight growth, but the base of comparison was quite high by then. Now we have EUR 600 million there. Property development also had a remarkable year, EUR 76 million in current -- in profit from recurring -- from ordinary operations -- operating profit from ordinary operations. You have, of course -- the builder and developer model is extremely favorable here because, of course, we have a set price on construction work, but also on the timetable, which is, of course, essential when there's high tension on both resources and construction costs. And, of course, we have fine work conducted by Eiffage Immobilier on works as such. This was a more challenging year. There was a scissors effect that I just mentioned, 2017 through 2019, but the profit margin stand is down, stands at 3.7%. We have an example here of a construction site in Avenue Marceau. 10,000 square meters, we are renovating a building there. Infrastructure is enjoying a good momentum, up 20%.Now the roadwork market has always been buoyant in pre-election periods, and roadworks became more profitable in 2019. And, of course, companies are very much present on the Grand Paris Express projects. We're looking at EUR 700 million in revenue, EUR 698 million, specifically. Of course, that explains the higher profit margin and income in that branch -- in that business unit. We have a strong presence in Germany and Spain, with sustained business. And outside Europe, Senegal is the main driver here. We're looking at EUR 220 million, if you look at the agencies and the major sites. This is a record for Senegal in the metal business. The wind turbine business is driving us. Here, we have a view of some of the equipment of the Grand Paris Express sites and projects. Energy Systems, we have an increased revenue, 7-point -- plus 7.7%. Most of the growth comes from the international business, plus 19%. Spain enjoyed a 50% growth. Our branches are very much present in the renewable energy business and have been exporting this know-how to South America and Africa. We have an improved business -- improved revenue of 50%, mostly in Spain. Kropman in Netherlands, which we bought back in 2018, had a great year, EUR 200 million in sales. France, growth is less so -- less significant, but still, 3.0% steady growth in the territories. And we have, of course, our 4 brands at the bottom corner -- bottom right corner of this slide, and we are always working on improving profit margins.Now here, we have our brands on uniforms and LCVs. We may remember the [indiscernible] concession now. There was a slowdown in heavy goods vehicle. It was only down 1%. Light vehicles on the contrary enjoyed a 1% growth -- 1.1% growth. Maybe this is especially at the end of the year whenever the rail strikes people went -- moved to highways instead. APRR has been continuing its investment programs on its network, keeping costs under control. EBITDA has now a -- EBITDA margin stands now at 74.4%. And there you have a product capacity. We are working here on keeping the cost on highway maintenance and services such as fuel stations.Revenue on roads is up 9%. And so this is an 18% contribution to the -- 18% growth in profit -- operating profits in Concessions and PPPs. And we also have maintenance services in our portfolio. You have here an example of the [indiscernible] -- [indiscernible], sorry, island in -- 5,600 meters in the heart of Paris. We'll have 3 stations for the fourth -- the first around this point of Paris, that's where the 3 stations will be centralized. So these are the business units. And so that these are the 2 indicators, of course, revenue and current -- profits from recurring -- from ordinary activities. Now we see that the other expenses -- operating expenses, EUR 68 million, includes transactions on a number of operations. We had fees, due diligence, especially for the Toulouse Airport. Net debt -- the cost of net debt is down for the fifth year running, minus EUR 101 million. Of course, the basis of comparison in 2018 included Eiffarie's rate swap. So there's a -- that was a favorable comparison basis, but now financial expenses are, now, down to EUR 135 million, including Eiffarie and APRR. And in other financial costs and income, we have the dividends from Getlink, about EUR 10 million. That explains the difference between 2019 and 2018. Income tax, mechanically increase, and that was -- that made sense. You may remember, I explained this back in June because the tax credit was turned into a deductible expense, and so that made a difference. And so now the tax rate is 33.7% instead of 32.5%. So net income, group share stands at EUR 725 million, up 15% compared to 2018. The 2 main reasons, the increase in operating profit from ordinary activities, both in Contracting and Concessions, and of course, lower financial costs. Regarding the cost of net debt. And if you look at the flow chart, at the end of 2018, the debt stood at EUR 10.5 billion. Now in order to be completely consistent, you may remember the leasing debt stood at EUR 359 million. That's the thing in the gray spot at the top of that first bar. Now that is no longer included at the end of the period because we analyze that not including the leasing debt because of the change in IFRS 16 standards and so, now we start at EUR 10.185 billion. So there was, of course, EBITDA that generated an increase in EUR 185 million. And if you -- well, that's when you restate for IFRS 16. Working capital requirements were stable, both in Concession and in Contracting, which is significant for Contracting because in road and property -- roadwork and property development, these are businesses that require a lot of cash. And so we were able to keep WCR under control. Interest and taxes were down EUR 73 million. Now that included also a significant decrease in financial interest and interest earned EUR 144 million. Then capital expenditure on the -- on capital goods was EUR 255 million. So that's an increase compared to 2018. You may remember that you have new machines that, of course, are part of the capital expenditure, but there was also additional investment for new launch plans with APRR, and we are looking at EUR 537 million. That's an increase compared to 2018 and that's because we have been ramping up these projects, especially at APRR. So free cash flow stood at EUR 102-point -- EUR 1.280 billion compared with EUR 992 million last year. So roughly, we're looking at an improvement in free cash flow to the tune of about EUR 300 million, most to do, 2/3 of it, EUR 200 million comes from EBITDA. But, of course, there's a EUR 100 million improvement in WCR -- changes in WCR. And so that enabled us to generate -- to spend EUR 566 million capital expenditure, including the Toulouse Airport. But of course, there's Meccoli, the railway service company. And then, looking at variations without cash flows, we have about EUR 130 million, but that's, of course, the debt for the Toulouse Airport -- the Toulouse-Blagnac Airport. This is not now consolidated. And so we're looking at -- the total cash out was EUR 566 million, and there was about -- EUR 566 million, including, of course, the investment in Toulouse. We have the dividends paid out by Eiffage. That's operations capital. And, of course, our direct shareholders, we're looking at an increase of EUR 37 million in dividends compared to 2018. And so if we stay to that -- on that slide, the net debt at the end of the year stood at EUR 10.2 billion. So it's pretty much -- I mean, not including the IFRS 16 change in accounting method, we have more or less the same free cash flow position, but we were able to pay for our own investment, for our own CapEx to the tune of EUR 566 million.Now, here, we have the 2 blocks, debt versus cash. Of course, they're not to scale. Debt without recourse for concession is pretty much the same as last year. But this year, we includes -- include the EUR 128 million for the blues -- Toulouse-Blagnac Airport. But in red you have the cash position of holding and contracting. So it is improved because of the new accounting method because we no longer have the leasing. It was about EUR 354 million. But you remember that we used that to pay out -- to pay for all of the EUR 566 million in external growth in acquisitions. And so that means that we have a pretty good cash generation at the end of the year when everything was said and done. One highlight regarding the debt position, we were able to refinance our credit lines for Eiffarie and APRR. These are undrawn credit lines. And, of course, we include a number of indicators, about EUR 100 billion in terms of safety and security. And so, we're one of the safest issuers of bond instruments in the country. If you look at the order book over a period of one year, it is up about 2% over the year. You have in 2018, of course, the major step, that's Grand Paris Express, plus 15%. But the great thing here is we were able to keep the order book high at EUR 14 billion having already produced EUR 700 million worth of projects in the Grand Paris Express projects. And one details, the deals that haven't been formalized regarding the RCEA concessions, the Lille Airport, PPP in A3 Highway in Germany, these are not included in the order book. If they were included, we would be looking at 12.3 months' worth of business. And that, as you can see on the left-hand side, is our standard level. So in absolute numbers, or indeed in relative value, we are very much in line with our usual figures. So that's for the numbers. And now we have time for questions. I believe that we -- you -- each speaker -- each of you will be entitled to 3 questions.

[Unknown Analyst]

[Interpreted] The 3 questions. If we can start with the construction. Contractor, civil engineering, there is an improvement of EUR 37 million of the current operational margin. Can we have the detail of this improvement? Is it mainly the railroad works or the motorway? Is it the part which is very leveraging the wind farms? Second question, risk equation in Bavaria on the works. Who is conducting the study, you, the Land of Bavaria? Is it on the border roadwork? It's a EUR 1.5 billion. And on the airport part, the importance is not the past, but the future. If you want the analysts to value those assets, could we have from a quality point of view the factors of improvement on Toulouse and on the Lille airports?

[Christian Cassayre, Chief Financial Officer]

[Interpreted] First question, the improvement was split in all the activities. We have an improvement of the performance of motorway in France due to the improvement of the way the works are being performed on the road. We have 10% of growth, which is quite a help. On civil engineering, also an improvement of the margin, more due to the volume than by the way of the works because on the Grand Paris Express, the lot 16.1, we manage cautiously the budget. Even if we hope a margin positive, even very positive at the end of the project, we manage it in a very cautious way. On metal, yes, on the windmills, onshore and offshore, we have a margin improvement. However, it's on a much more limited in France. So it's difficult to improve the profitability except on metal, which is very limited here in France, EUR 200 million more or less.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] On motorway A3, we are in a PPP, and we are bearing all of the responsibility of design and construction. It's been 2 years we've been working. It's a process where we receive from the state or the government, a very advanced project. And during all this period of offer tender, we have all our study bureaus who worked on the fine-tuning of this project. It lasts quite a long time because we're going to implement it in 5 years. And the conditions of this offer tender were required not to bother people on the 80 kilometers. We work on bits and pieces of 80 kilometers performed one after the other. But in terms of risks, it's a full-risk process, which is taken by the concessionaire and the risk of works and construction is handed back to the designer, constructor, and we're a 50-50 partnership there.

[Unknown Analyst]

[Interpreted] You confirm that your chairman partner is very profitable. If we look at the accounts, they have an unusual margin of profitability for a German group. I'm really amazed. Can we expect high margin on this project? Let's not forget that in Germany margins are much lower than in France.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Margins in Germany are lower, but they just improve for a certain amount of years, and we do not wish them to stop there. There will be positive fallbacks in terms of volume. Our assumptions from the beginning when we started the A94 were held until now. Today, it's delivered, we have no problems. We're on target. Those PPP in Germany are really relative in the global scheme of the German activity. I'll add that BUNTE is not a -- is a unicorn. You have several companies of -- like BUNTE doing margins above the historic margins in Germany -- or in Europe. On the airport issues -- or questions, the 2 schemes are totally different -- 2 process are different. On Lille Airport, the will of the concession giver is to change the duration of the public service delegation due to important investments to be made there in order to get the needed growth on the 20 years. Would they have remained on a PSD in 20 years, you cannot balance them, so you would get a much lower ambition. So they moved to a 20-year project, enabling us to come up with a global proposition of investment to support the development of this airport. And it's on this base that we have been chosen. Given the fact, as I said in June, the cost of acquisition is very low because it's just the non-amortized capital of the previous concessionaire, it's the investment plan that will make the historic value of this concession for the 20 years to come. We have to build everything in terms of receipt, improvement and change of functioning of operation of this airport. On Toulouse, it's a different project because CASIL was pushed a lot for the development of the airport. For those who go there in the past years, they did a property development with a hotel. They rethought the retail and trading zone. We think we have still many things to do on property development. The teams on location really wish to share with our planning teams. And on the improvement side and monitoring of what has been -- what is operational costs, we have a lot of discussion of good practices between the motorway concession teams and the airport teams. We are in a different process, and the ex cap -- capital expenditures will be lower than what they would be in Lille given what I said previously. Really, it's 2 different processes. And the platform is not the same size, as you know. One last element about Toulouse, what's interesting there is that it's a regional airport. Given its geographic situation, but its economic activity has a very sounder balance. You have the airspace cluster nearby, needs the airport and conversely so, which is interwoven into the airport and they're in a lot of development. You have investments made by the metropolitan city. We're glad to build that part as a builder, as a constructor -- contractor. There's an economic pull, the development is very strong and more traditional processes for those regional airports to develop new lines from a touristic point of view. But when you look at the passenger mix, it's one of the regional airports who has much more traffic, which is export. I mean, people from Occitanie going elsewhere for business reasons or tourism, and our partners of all of the local collectivities are absolutely sure that there's much more to do to improve the import part of the coming traffic.

[Pierre Bosset, Head of French Equity Research]

[Interpreted] Pierre Bosset, HSBC. I'll ask my 3 questions. About the airports, can you give us an idea of the returns you wish to have on the airports? And second question, EUR 1.4 billion of investment works on the Concessions. What will be the steps on the 3, 4 years to come and some negation of the CapEx of APRR? And my third question is about the preliminary studies on the future contracts of the Grand Paris. What can we expect? Will it have something to do about the margins in the near future?

[Christian Cassayre, Chief Financial Officer]

[Interpreted] CapEx, all of the PPP, small size adding the CapEx of the 2 airports of Toulouse and Lille, who can start on EUR 100 million 2020; EUR 120 million 2021, 2022; and then EUR 50 million after that 2023, but it will be reprocessed and restated outside of APRR. We'll have the A3 with 7 -- I mean, EUR 1.4 billion is the works, construction, not the CapEx. A3, EUR 750 million in works, construction, probably it will not be consolidated. It will not be translated by CapEx with the exception with our 1/4 share of shared equity, capital equity. And the phasing of A3 is linear on 5 years, taking half a year for 2020. And finally, RCEA very short works. Phasing is linked to the date of start. It has to be spread on 30, 3-0 months. We'll rediscuss it in June. Sensitivity on the year is very important. Today, I think it's difficult to anticipate a figure.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Guillaume about the Grand Paris. I didn't forget your first question.

[Guillaume Sauvé]

[Interpreted] On the processes of Grand Paris, it will keep us busy. The second phase of design, implementation will be launched very soon. The first call for tender by mid-March, with studies that will start -- that we think will be starting at the beginning of the summer, will keep us busy for the second half year. The studies will start this summer and go on 2020, 2021. So the workload will not be only 2020, but on 2020, 2021. We have announced in 2020, which are consistent with what we're doing in terms of volume, no major impact on the trends of the outcome for 2020.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Another element regarding the studies, there are discussions. The company of the Grand Paris asking us to study design, I mean, it's not amounts what we're used to. So there are discussions about who's paying for the study in case we don't win the project. Well, depending about the degree of advancement of the studies when they will start or issue the call for tenders. The only certainty is that there will be no impact as such in 2020 because it's going to be the first outcome are not expected between mid-2021 for the call for tenders. On the TRIs, I think we should look into it case-by-case because of the differences in risk profiles. We are not used to communicate by assets, so you won't be surprised that I will not answer with figures. However, you probably heard that there was a couple of tender of Toulouse-Castres. It's also elements of thinking and strategy in the competitive environment like ours. But we can give some elements of background that could help you in your own approach of the impacts of those concessions. If I take APRR, we disclosed an investment of EUR 200 million for 2% on market price, minored by a rest of EUR 60 million and the TRIs that you have in the models, they shouldn't be changed. On RCEA, it's an investment in France in a greenfield with a proven traffic and a continuity of flow. The historic -- the legacy model of concession of the motorways in France is well known. We have the principle of a revision of our schedule over the 48 years, and not in a regulation framework or dialogue year after year. It's in the classical system for the whole period of the concession 48 years. A3, it's an investment in Germany in the PPP without traffic risk. We enjoy the return of experience of A94. We have a return to debt, like in all our PPPs. And as I said previously in my presentation, EUR 100 million of shared equity, EUR 800 million of debt -- given the subsidies of the debt, the TRI impact on the final suggestion or proposal is less important as we see in our PPP of housing. Lille, we are below the amount of passengers getting into a regulated process by the regulator. We're in an investment plan with targets and with share above the limit. It was the model prevailing before this element. And Toulouse, the investment is implemented at the market price. I told you the EBITDA of 2019 and the sales of 2019. We acquired on 10x something multiple of EBITDA. We will go on the work that has been started by the management. For the levers of improvement, our classical new lines, work on the OpEx, it's rather classical. And I'll insist upon something that we will mainly pacify the relation within the monitoring board. We are legacy partners, and this is what's very important there. And all the rest, I said a word about it. A mix with the presence of the airspace cluster making this asset slightly different from what you may have in the other airport concessions. There are some elements that I wish to share with you for you to make your own assumptions.

[Nabil Ahmed]

[Interpreted] Good evening. I'm with Barclays and I have 3 questions as well. Number one, a follow-up question after what you said about the assets in IRR. Can you give us a reminder about the ATB regulations there? And the ART authority that is the highway authority should -- gave a ruling on tolls and rates. The second question, I get a feeling that all the big projects that you can bid for, I mean, the highway, A3 highway, the ATRR, I mean, are there new projects in the cards? And how are you developing your airports because this is something new to you? So is it the concept that you're learning the ropes now and you will start -- I mean, you can grow in earnest once you're more comfortable? Are you proposing to start growing here now in the airport business? And then about the Grand Paris project, can we have a timetable of what's coming in the next few years?

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Regarding ATB, that is the highways, there was a -- sorry, the airport, there was a 1-year extension on the existing contract. Now, talks are underway, conducted by ART, which is the airport authority. And the airport -- the civil aviation authority, we have to see what comes under what is regulated, what is not regulated. And so that makes a big difference. There have been exchanges with the management team at Toulouse Airport and the civil aviation authority, DGAC, to define the framework within which these regulation contracts will be worked out. So for the year 2020, we're waiting for this sort of generic framework so that we can have something to work with, but there will be direct talks regarding, well, for the year 2020. Now, of course, the company is doing well. The rates might come down. However, we are trying to arrive at a new contract for 2020 or that will be negotiated in 2020 to be implemented in 2021. So it's to define the new rates. So that's what's in the plan for Toulouse Airport ATB, Aeroport Toulouse-Blagnac, ATB. The second question about developing or growing our airport business. But was there another question in between? If you're looking at the pipeline of greenfield operations, there will be -- well, there will be others in Germany, but you can well imagine that, first, we are looking at the -- at rolling out the A3 Highway in Germany rather than looking for other projects. And of course, if something comes up too soon, we will have to leave it aside, and we can -- we'll have to wait until -- sorry, 2021 before we can look at new projects for Germany. In France, the only one where there's a call for bid, it's the Toulouse-Castres Road and that's not before 2021. So for the year 2020, right now, there are no major projects, which is just as well because having secured the highways that we have, we wouldn't have much room. When we got lot 16.1 of the Grand Paris, we had to bow out of a couple of contracts even though we had won the contracts, but because we had to focus our efforts on other business. Now there's been a rescheduling of capital expenditure, and that's just as well because, as I said, we are in a position now to address the projects that were left as it were aside, but nothing new will happen in this respect before 2021. So that's the existing projects and putting a cap on that. Regarding the airport business, we're not -- our hope is not just to grow our airport business and just add up or pile up airport assets. We do have a presence in a number of territories. And in any territory where we have a presence around the country, not just in France, but also Benelux, Germany, Spain and a few African countries, wherever we are, we do business, either there's some construction or that is contracting work, PPPs as well or concessions. But of course, ideally, when we have one, we'd like to have the others; if we have Contracting, we'd like to have Concessions. Of course, the major -- the only risk for Concessions is political risk. And there's -- I mean, we've been looking for ways to keep -- to manage risk. The best way to do this is to be an employer, to have a well asserted CSR, corporate social responsibility, so as to have good relations with the authorities in those areas where we do have projects underway, enable us to have a long-term vision along. And so this is exactly where we look for possible concessions because we know that we can keep political risk under control. And for instance, when we had hydropower plants and dams, even though we had just built them without a concession, we might get concessions there. But of course, natural concessions would be roads and airports. So if we have a regional airport in a German land where we are present and recognized or indeed, in Belgium, for instance, where -- or indeed in Spain, but now in Spain they're all privatized, I believe, but -- and that would be part of -- well, that would be a possible target for this group. It's simply because there's a good consistency between our Contracting and our Concession businesses. But the main asset in this company is human capital. That, I can assure you: if you look at the 3,000 people from the Occitanie region when they saw that our company took over the Toulouse-Blagnac airport, that was a very favorable factor for our employees from the region, from the Occitanie region and, of course, our clients as well because we enjoy this popularity. And of course, we may not have all the knowhow, and this is something where we have to learn because within an airport, there are lots of businesses. You have the operation of the airport, the maintenance, the building itself, the land, property development, franchises, hotels, parking lots, et cetera. There are many areas where we do have expertise and know-how. However, to run an airline, well, that's something we yet have to learn. But we are fortunate here in as much as we've had very good teams, people who have joined us. And on the strength of that, we will expect -- we will continue the business. But the idea is not acquiring an airport for the sake of acquiring airports. So we were not going to buy, say, an airport at the other end of the world just for the sake of acquiring a new airport. But there are in many countries where we have long-term presence. We do have a concession in Senegal that is doing extremely well. And had we not been in Senegal for 94 years, it would be a much riskier proposition in political terms to be concession holders in Senegal. It is thanks to our long-standing presence there that we can take a calculated risk. Yes, a further question.

[Eric A. Lemarié, Research Analyst]

[Interpreted] Good evening. My name is Eric Lemarié. I had 4 questions. Number one, on roadwork, are you looking at less business, less revenue in France because of the upcoming elections? And if so, by how much? Second, about the connected territories in the Brittany area, can you give us any clarification, any details? And in terms of revenue, are we looking at something significant? I mean, these connected territories, I can't quite figure it out. And then number three, can you tell us about your construction or your sites, I mean, civil works or building, to what extent are they digitalized, do you have a BMI type thing? And then with the Grand Paris Express thing, are you -- do you believe that somehow, there's a greater risk of performance? I mean, is there a performance risk on these things or higher performance risk for public works at Eiffage?

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Sorry, before I take this, there was a question by Nabil that I -- that Guillaume can take -- sorry, I mean, just a second. And then I'll get back to you, yes.

[Guillaume Sauvé]

[Interpreted] Yes, you're talking about the Grand Paris contract on 16.1 between Aulnay and Saint- Noé and on the 15 South Line, these are projects underway. There's a second wave of call for bids, and so we have put a number of bids. That is for Line 18.2, that's south of Paris. That's a line between Massy and the Atomic Energy building. And there's another one we'll be expecting where we have bid, that's Line 16 -- 16.3, that's the number of tunnels that will complete Line 16. That's northeast of Paris. That bid is underway. I mean, we'll get the answers at year's end. And then there's a final lot, and that is we were just applying. Now application means that we have -- before we know who wins it, we have about a year to wait. On Lot 17.2, that's the extension of Line 17 that will connect Saint-Denis Pleyel roadway to CDG Airport. Basically, you're looking at the area between the Bourget Gonesse and all the way to the Paris Airport area, the Roissy Airport area. So we are trying to position ourselves for that. And then after that, you have a number of design-and-build contracts. The city has decided to move from design and build for portions of Line 15. Now that will go from Pont d'Issy to -- all the way to the La Défense; that's the southwest segment. Then there will be an additional segment from La Défense all the way to Saint-Denis Pleyel; that's northwest. And then on the Eastern side, you have 2 segments that will be added, one from Champigny where TBM has just started work, going all the way to Bondy due north, and then the final segment from Bondy to go all the way back to Saint-Denis Pleyel. So there are 4 design-and-build contracts that are up for grabs. It's one where applications have to be sent in by March. And so this will be considered in the second half of 2020. And so we expect to have assignments by 2021, it's hard to tell, beginning of '22. And then for the 4 following contracts, I mean, we don't know for sure, but we're looking at 1 year or 1.5 years before these 4 contracts are awarded.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Thank you. Guillaume, can you give the microphone to Laurent, so he can take the question on roadworks?

[Laurent Girou, Managing Director at Eiffage Route]

[Interpreted] Yes, in 2020, we are not particularly concerned as regards business in 2020. If there's any decline, it will be -- it won't be much. The reason is that we're starting the year with a pretty good order book. We are looking at sustained business for at least 6 months. And if we look at our various clients, for local authorities, we can see that the financial condition of local authorities is better now than it was back 6 years ago, when -- with 2014, a big election year. For municipalities, we find that the finances were restructured because municipalities or small towns got together. And then we have big towns, these big, what you call, metropoles, that have grown outside the election schedule. By the way, the investment we're looking for metropolis [indiscernible] is the same as what we invest elsewhere in all of the country. For departments, now this is a pre-election year, because elections the departments, local elections will be -- in 2021, will be next year. So this is a rather good period. Now central government proposes to expand investment in 2020. Now we don't have many contracts with the central government. Private market is still healthy, and I believe there will be a few worthwhile operations with the highway companies for maintenance or needs for new highways, and so we have reason to believe that we will have a sustained business -- roadworks business in 2020. So if there's any decline, it will be very limited in 2020. It's certainly not the same order of magnitude as what we had in 2014. You have to remember that in 2014, local authorities were given -- suffered a big cut in their subsidies and that, of course, meant a big loss of business.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] And regarding the connected territories, this is one of these projects that -- well, they are not huge, they're not significant in terms of revenue, but, of course, in terms of image. And indeed, for our customers and indeed, for our own people, there's raised awareness as to the coverage of services we provide because they're all integrated connected services. And that helps our clients better drive their contracts, their own projects rather. And so instead of, say, sort of answering your question, we are there providing solutions just by compiling the best that is available and providing our clients with additional intelligence, so that they can be -- they can perform even better. So -- but there's more to come. The data analysis, the sort of thing that helps drive projects, and we can bring added value to our customers. And so they -- that's what the connected territory thing is all about. But of course, in terms of immediate revenue, there's nothing significant now. And there was a question regarding digitalization, yes, BMI or civil works -- civil engineering. Now, by the way, it's not just public works and we can start with highway concessions. You have digital developments there because, initially, the whole business was very much a process-driven business, but it was all paper process. Now the thing is when you have a process that is well run and has been like a well-oiled machinery from year-to-year, the nice thing is, it starts being all on paper, but you can very easily make it paperless, digitalize everything and that certainly makes life easier for all people working on the ground. We can have immediate knowledge on the whole supply lines, the -- anything to do with the accidents or incidents or anything along the line. I mean, I speak here under the supervision of Philippe, but by the end of 2020, I believe that 80% to 90% of all the trades on the road -- on the highway concession business will be digitalized. This is something we started back in 2017. And we find that we're in a good position to acquire and analyze data. That's regarding highway concessions, but there are other areas. For instance, we -- well, we've decided to set up a company that will enable us to drive all our long-term maintenance programs. And the idea is to collect not just data, but behavior, so that we are in a position to have a very accurate forecast of renewal investment and long-term capital expenditure. There's a lot of interest and synergies between our teams and the concession teams to deliver quality, but also return of experience and enrich the various elements. I talked about the company because we know how to sell the services with other contractors, knowing that we are -- we had contracts with several local authorities who don't even know what is the heritage. So to foresee the maintenance of the heritage is something different. If I get back to the businesses, it's 3 different various sites. One part, which is an interface with the final client, final customer, we're able today to capture information on the stakeholders in terms of property, to test the project, so to speak, upstream of its finalization because more and more, the first thing that a elected rep tells you, it's a major meeting, please present your projects. So better to capture the digital tools, enabling it to do so, so that our project upstream is already designed given the constraints of the various stakeholders. Many more examples on which we start to be able to interact with the end user and, so far, that the relation is contractual, and our core business remains B2B, but I'd say it's becoming B2B2C, since we are more and more able to capture this value information, reinject it in our decision-making processes. The second element is whatever is about really the core business. We're talking about the BIM, but I think that we move forward a lot. In the solutions, in the use, it's a cost more than an opportunity, let's be transparent about that. But the real change is not yet there, except in some places. If you go on our works, you don't see the fantastic change in the tool given to the worker for him to do what he has to do. When we'll be at the end of this chain, that we'll be able to say that we have strong impact of the digitization of our businesses. In some places, it's already implemented in some of our factories. When you have factory activities, for instance, the factory process of façade at Goyer is totally different from what it used to be some years ago. We have more and more, and we will deliver more and more tools of training which are immediately on the ground. A support to explain to the worker exactly what is expected of him what we -- like we did some years ago, but it's not very powerful yet, but we're already convinced that this is the right direction, if we want to see strong impacts. Then the other element on which we already progressed is in terms of HR, in term of training, because a good video makes things much easier and games, serious games learned by games, trained by games, it's things we're using more and more, and we'll progress there. And last element is whatever is relative to the IT systems and the support of the company, but Christian will say a word about that.

[Christian Cassayre, Chief Financial Officer]

[Interpreted] Well, we explained that on the accounting finance, we have an RP which is unique in France, unique to all the businesses that will be rolled out internationally, enabling to do that analysis and to progress. And we seized the occasion to create what other industries did before us, create a back office and a front office with shared services centers, enabling to mutualize the task, to digitize them, to automate them. We are not yet at the AI, maybe we'll rediscuss that, but we have robots. We have over 30 robots that are working in accounting. We are convinced that we're not at the end of the road. We didn't explore all the possibilities, and I'm sure we'll move fast on this topic. Indeed, it generates changes in way of doing a lot of more processes, but it makes us progress in terms of separation of tasks and be more rigorous relations with the projects. It's a project which is really moving very fast, and it will improve in terms of productivity, efficiency and savings. We start on the HR, the single RP 2013. We ramped up of the shared services, 2016, and of deployment. We shall derive all the benefits now. We start the same process on the HR, but we just start on the HR.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Last question was about the execution risk, right? We never had so many tunnels at the same place. Well, basically, keep in mind, we are very cautious, as Christian explained, on the acknowledgment of our margins. Whatever we're doing in the Grand Paris, we're not the designers. The risk levels and the functioning of the risk is very different. And so good because it will enable us to look forward to stage 2 where the Grand Paris asked us to be a designer and builder and risk will be more important. Then when you are in geology of Paris and Paris area or a tunnel borer, I won't tell you that there are no risks obviously, but we have very experimented teams who are used to do that. Those are grounds that we know, and we have an ecosystem with the society of the Greater Paris, and they have certain amount of teams and operators that know what's happening. We dig below the ground, between 20 and 50 meters, in very dense areas, so there are indeed risks. However, the sharing of those risks and the contracts that we are implementing are fully respectful of a right balance between the company and the client.

[Christian Cassayre, Chief Financial Officer]

[Interpreted] One point about digitalization. It's linked to accounting which is important, the procurement. We have a procurement base, which is administered centrally and we have a performing tool looking like what you have on the Amazon portal, enabling to order easily, which has not always been the case. It's not always easy to make the orders. So now we have it with the strength of managing a central database and no granularity, the configuration of our acquisitions in order to progress, optimize, orient the acquisitions. It's illusory to think that you can manage them centrally. But a tool enabling you to go into a article item base, I mean, it can be a tool which is very efficient in our businesses. And Philippe Nourry told me that we didn't answer to one question about the CapEx of APRR. I answered Pierre Bosset's question of the EUR 1.4 billion of concessions process and not listed in Germany and other concessions, maybe you can answer and get back to what I said about RCEA.

[J. Philippe Nourry, Chairman of Motorway Concessions in France]

[Interpreted] I can't remember who asked the question. I'll get back to 2019. In fact, we committed EUR 485 million investment. It's slightly less than the estimate I provided in our last meeting, last August, slight gap with some operations. And for the future, even if we commissioned 3 major operations at the last quarter 2019 [indiscernible] and third place, we'll be very active on the major operations of the motorway plan with our 2 operations, A75 Clermont-Ferrand and A480 in Clermont-Ferrand, a commitment of investment of EUR 500 million with a decrease that will start in 2021 because we're on the EUR 400 million on 2021 and EUR 350 million in 2022. This is the future that is taken into account as of today.

[Nicolas J. Mora, Equity Analyst]

[Interpreted] Nicolas Mora, Morgan Stanley. And I'll shoot in many directions. On M&A, 2019 was a devoted concessions. Will you change your ammunition, first question?Second, on property, a very good year, 2019. The competitors' is more moderate. What do you see at Eiffage in terms of perspective of reservation and margins? And about Construction, you talked about the scissor effect of the margins. The inflation is pacified. Is there a little bit of hope to see the margins to ramp up in 2021 -- 2020, 2021? Then on motorways, if there's no volume, will there be a rise in the margins in 2021? On services, in France in 2019, you are lagging behind your competitors. Since you -- are you more cautious about the cycle to grow the margin 20, 25 basis points per year? And last question, we can try it on the APRR traffic. What are you seeing since the beginning of the year? We hope for good news.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Let's start with Phillipe because he has the mic.

[J. Philippe Nourry, Chairman of Motorway Concessions in France]

[Interpreted] Naturally, I won't give you the figure, but the trends. We registered a very good beginning of the year. Within January, without a shadow of a doubt, the ongoing effect or impact of the strike of the railway -- French railway, a very good beginning of winter season with sequences, Friday, Saturday, Sunday, Monday very dynamic on the APRR and the other network too; however, a heavy weight traffic, which is decreasing. We are on a growth close to the figures that Christian alluded to for 2019, plus 0.5% and plus 1%.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] Can you hand over to Olivier?

[Olivier Genis, Chairman of the Construction Division]

[Interpreted] Hello. For property, yes, we had a very good year. With 5,000 housing units when we talk about 400 more, it's block sales of student residencies. But however, it's a very good year. When you say about the competitors are really at pain, it's not true for everybody. In the results of our competitors in property, there are some good, very good and some bad. It's due to the capacity of renewal of the book of orders. Capacity is good with us. We have the capacity of having a good forecast, and we have nice tertiary operations in the pipes. There's no decrease in activity, neither in 2020, nor in 2021 regarding property. Regarding construction question, is there a hope to see the margins increase? If the question would have been shorter, then it would have been the answer, yes. There is a light hope to see the margins increase because the scissor effect will come to an end and there is volume, which is the first criterion for upturn of the margins.

[Benoit de Ruffray, Chairman & CEO]

[Interpreted] On the motorway part, decrease of volume, can we have the margins progress? We're working on that. Then it's very sensitive to the volume. It would need this decrease to be moderate. If the decrease would be more significant, it would possibly have an impact on the margin. Since we are today in a scenario of moderate decrease of volume, we can maintain the margin and why not improve it slightly. Another sensitive element, it's the industries. You have Page 22 of your booklet. The growth is not done through the industries because we had a lot of works with less industries and the mix beyond the sales can be very impacting one way or the other. On the Energy System line of business, the more the profitability rises, the more the margin is difficult. The work we led with a strategic plan of the line of business is delivering. We successfully found the operational function by keeping the proximity and by being ambassador of all our specialties and to mix this capacity to go on doing works and delivering value on all the territories where we are present. This is underlying our progression little by little of the profitability of this line of business. What I may add is there's no exceptional effect in the improvement of profitability. We are on long-run work little by little, notch by notch. There's a real pride of the team of the line of business to carry on. They're all convinced to go on at the same pace. It's tougher now, the more you climb is the gap, is the added value on excessively technological part be present for them to grow. Thanks to people who are on the ground and making more and more innovative offers and the time being, we have areas which are lagging behind, and we try to improve that. The improvement you have seen for the past years is mainly a -- how should I say, diminishing the gap. There's no reason why we couldn't reach 5%. Now if you look at our major competitors, some aren't doing that well at all. Some are doing better and for quite a long time, proving that those are projects of several thousands of euros, let's say, processed. There is a system to go up to a team of 2 or 3 people doing some maintenance somewhere. The major interest is when they're aligned, and they all got it, it's a win-win situation. But it takes quite a long time to get there and the best in business are there for quite a certain amount of years. Then we remain on our core business, European core business. We don't have -- while some markets in North America, where the brand mix are more important than in Europe. However, the acquisitions are without common measure. We don't want to get out from our ecosystem. However, we have capacity today. We'd like to grow in Belgium, in Germany, and we have already some, how should I say, structures existing, but we don't have the possibility of hitting hard there, but we are very present on other lines of business. There's an exception to what I said, it's Spain. And I see Ross Emmanuel, I think it's really -- we are leaders on the market in those businesses in terms of volume, geography, but also the economic performance. Yes, we will go on. I just hope that we'll be able to maintain this rhythm of base. On the M&A, yes, it was more Concession this year. Let me remind you that before we made some important acquisitions, Kropman in the Netherlands but also Priora in Switzerland and acquisitions, smaller ones adding to the Spanish geography. And we told you that 2019, we would focus more on integration and the only significant acquisition was Meccoli in railway -- railroad to start and come up with a real player of the railroad present in all the businesses. We do not have structuring and transforming projects on the short term. But we will remain open on the Energy System branch, a line of business, either for acquisition of technology on the French territory or add to our coverage in the major European countries I quoted previously. It will remain bolt-on so to say. And apart from energy and services, there's new -- there's nothing really new. We had 10% growth 2 years running in our contracting business. And so that has kept us busy, but that is also very much value creating, and that's why we're mostly focused on that. Are there further questions? Very good. Well, we shall leave it at that. Let me just remind you that since there were many of you this evening, it was a bit difficult to get you all down to visit the tunnel boring machine, one of our TBMs, but people working on lot 16.1 have come up with models and so they'll explain everything to you, and these TBMs will have no secrets for you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]