Solutions 30 SE

PAR:S30

Earnings Call Transcript 2021-Q3

[Operator]

Hello, and welcome to the Solutions 30 SE 2021 Q3 Revenue Call. My name is Lydia, and I will be your coordinator for today's event. Please note, this conference is being recorded. [Operator Instructions] Your presenters today are Gianbeppi Fortis, Chief Executive Officer; and Amaury Boilot, Chief Financial Officer. Gianbeppi, please begin.

[Gianbeppi Fortis, Co]

Thank you, Lydia. Good afternoon, everybody, and thank you for being with us today for this conference call. I'm here with Amaury Boilot, our CFO, to present our third quarter revenue. As usual, we are going to take you through the presentation. It's going to be about 20 pages, and then we will be available to answer your questions. Lydia, please go to Slide #4. At the end of September '21, our revenues were up 12.9% to EUR 653 million. And this overall growth is driven by excellent sales momentum. Compared to the first 9 months of fiscal 2019, the 2021 revenues were up by nearly 35%, which confirms our -- the strong strengths that are driving our markets. In the third quarter 2021, revenues amounted to EUR 212 million, flat compared to the same period of 2020. The basis of comparison is particularly high in the second half 2020 because of the catch-up effect that followed the COVID lockdowns. The ongoing inventory shortages caused some interventions and projects to be postponed in the second half of 2021. And then when we look at our markets, we see that they are in different stages of maturity. France is the most mature market, and growth is naturally slowing down. That is because FTTH deployment are slowing. And also the Linky bar meters installations are slowing, as was expected. At the same time, maintenance activities keep growing and the number of new subscriptions, FTTH subscriptions had a peak in second half 2020, in particular, in the last quarter of 2020 with more than 1 million new connections. And then shortages in equipment and materials slowed down the ramp-up of new activities in the second half of 2021 in France. As a result, the French revenues are down by about 13%. Elsewhere in Europe, the duplication of the French model is proving successful and is beginning to materialize in all of the other geographies. Growth is linked to the ramp-up of the new contracts, is very strong and covers in almost all markets, the effect of the shortages of inventory. So basically, we had these problems of supply chain all across Europe. But in countries other than France, the ramp-up of the new activity is so strong that you don't see it. The supply chain issues have a temporary impact on revenues. It's important to note that the business is not lost, but just delayed. Our activities are activities that are needed by people. So if they don't get them this year, they will get them some time next year. It's not lost. The other good news is that we are resuming our M&A activities with one acquisition realized just a few days ago. And we will continue with our usual M&A trend in the coming weeks and months. Amaury, please continue with the rest of the presentation.

[Amaury Boilot, Group CFO & Member of Executive Board]

Thank you, Gianbeppi. Good afternoon, everyone. As you can see on Slide #6, revenue reached EUR 653.5 million for the first 9 months of 2021, up 12.9%. On a like-for-like basis, revenue is up by 9.3%. I remind you that mainly due to the COVID situation, we had to put our M&A activities on hold in 2020. The group's maintenance business, which is recurrent in nature, represents 61% of the group revenue, an increase compared to 60 -- sorry, 58% in H1 2021. Compared to the first 9 months of 2019, revenue is up by nearly 33%. On the next slide. In the third quarter of 2021, Solutions 30 posted a revenue of EUR 212 million. This is a 0.7% decline or minus 4.2% like-for-like. This, as Gianbeppi said, is due to a particularly high basis of comparison and ongoing difficulties in the supply of material, which caused some call-outs and projects to be postponed. Compared to Q3 2019 pre-COVID activity level, Q3 2021 is up by nearly 26%. The group's recurrent maintenance business represents 68% of the group's quarterly revenue. Next slide. On the next slide, you will know the quarterly trend and several things should be pointed out. One, the current level of activity is actually high compared to historical performances with quarterly revenue above EUR 200 million. Two, the impact of COVID was limited on our top line and the extremely strong performance of Q3 2020 underlines this high basis of comparison. And three, historically, the Q3 is stronger than Q2, thanks to back-to-school offers in the telecom activity. However, in 2021, that was not the case due to shortage in components. Growth is, therefore, taking a breath, but the outlook remains extremely positive with exponential ramp-ups in new geographies and businesses. Next slide, please. On a year-to-date basis, the growth remained strong at 12.9%. On a quarterly basis, the graph on the right stresses the disparity in the quarterly performance with France down by nearly 13%, while other regions are offsetting the decline. The rebalancing of our revenues between the different countries has actually begun. France will clearly remain an important region for the group, and the potential for growth is still there, but we can see that the other geographies are growing faster and faster, and especially Belgium, which confirms the strategy that we have implemented there. Let's now go to Slide 11, please. For the first 9 months of 2021, revenue in France reached EUR 391.8 million, up 8%. Revenue for the third quarter amounted to EUR 121.5 million, down 12.7% compared to the same period of 2020. Compared to pre-COVID revenue in Q3 2019, it is up by 15.4%. We will now take a closer look at the quarterly evolution in the next slide with Gianbeppi.

[Gianbeppi Fortis, Co]

Thank you, Amaury. So here is the slide that presents the -- well, basically, what happened in the third quarter in France. Let me start with energy first. As you can see, the revenues from the energy business amounted to about EUR 20 million in third quarter 2021 compared with EUR 25 million in 2020. So revenues were down by about EUR 5 million. That is a 20% decrease. But the revenue from the smart meters dropped by 40%, because the deployment of the Linky smart meters decreased very significantly in the second part of 2021. But what you see there is a drop of only 20% because new activities, in particular charging stations for electrical vehicles and solar panels, have offset at least partially the decrease of Linky. And if we didn't have the problems of supply chain, the new activities would have overcome the drop of Linky and would have been growing. The IT business is back to growth, and then the remaining activities, which are very small, are almost flat. Now let's go to the most important driver, which is telecom. That was down by almost EUR 13 million in this quarter. Let's go to the next slide to provide the details. In this slide, you see on the left side, the graph and the top line, the light gray line is the deployment of fiber in France. Deployment, meaning bringing the fiber in front of the houses. As you can see, there has been a spike in the deployment in the fourth quarter 2020 with almost 2 million new houses where the fiber passed in front of the door. That is particularly high. And also, overall, the penetration rate of fiber being in front of the door of the houses is now quite high in France with about 2/3 of the households, French households, passed by France -- by fiber, sorry. So in France, we are expecting a slowdown of the deployment after a peak reached at the end of 2020. Now if you go below, you see a dark black line that represents the installation of new clients. Again, you see a bump in Q3 and Q4 2020. And that was because just after the lockdowns, people began buying fiber connections very strongly with a lot of them working from remote. The orange line is our revenues. And as you can see, there is a strong correlation between new connections and our revenues because it's an activity that is pushing our overall telecom revenues. At the moment, the last number available is end of June 2021. There is 12 million houses that are connected with fiber. And in France, there is a total of 40 million houses. And remember, 27 million houses already have the fiber in front of the door. So what we are expecting in terms of new customer installation is that the trend will continue to be growing. So we expect still growth on that side and growth for many years. Then, of course, the activity will stabilize. But there is work for many, many years to come. And the most interesting part is the bottom line, which is the maintenance activities. These maintenance activities are still not above the line of the new customer connections, but the line is growing. The line is growing because the maintenance activities are simply correlated to the size of the customer base of the telecom operators. And that keeps growing year-after-year. So at a certain point in time, I believe, very soon, the maintenance activities would be bigger than the installation of clients. And that will remain forever in France, like for other similar activities that are more mature like the DSL-related activities. Amaury, if you want to continue with the next slide, please.

[Amaury Boilot, Group CFO & Member of Executive Board]

Yes. Thank you, Gianbeppi. I will now comment on the development of the revenue in Benelux. For the first 9 months of 2021, revenue in Benelux reached EUR 114 million, up by 14% and growth is actually accelerating in this region. Third quarter revenue amounted to EUR 39.3 million, up by 16% in this region. The telecom business grew purely organically by 3.5%. The rollout of ultra high speed networks just began and the contracts signed by the group in September will be contributing to the revenue as from the fourth quarter. Revenue from the energy business amounted to EUR 6.6 million compared with EUR 1.2 million a year before. And this growth is driven by the installation of smart meters in Flanders on behalf of Fluvius, but also by the group's other business segments, notably charging stations for electric vehicles and renewable energy activities. The IT business posted a revenue of EUR 2.1 million compared to EUR 2.6 million last year. And the security and retail business generated a revenue of EUR 1.8 million compared to EUR 2.3 million in September 2020. Next slide, please. In all the other countries, the group revenue at the end of September 2021 grew by 28% compared to the first 9 months of 2020 and third quarter revenue was up by 27%. In Germany, revenue amounted to EUR 15 million in the third quarter of 2021 compared to EUR 17 million in 2020. In Germany, we were actually organized to capture the last digital mile market. But like we did in Italy, we will have to position ourselves on the deployment side when fiber deployments begin to truly ramp up. As a consequence, we adapt our organization so that we find the right partners and subcontractors to serve this market. In Italy, revenue doubled in the third quarter of 2021 up to EUR 12.5 million, driven by the ramp-up of the FTTH infrastructure deployment in the north of the country. In Spain, we are still gaining market share and benefiting from the contracts that were signed earlier this year. The business actually grew organically by almost 30% to EUR 13.4 million. In Poland, the issues with the supply chain had a strong impact on the activity. And the group posted revenue of EUR 5.8 million compared with EUR 6.4 million last year. However, the underlying trends remain very positive in this country. Finally, in the U.K. Solution 30 posted a revenue of EUR 4.6 million. We are still in the implementation phase. We only started our operations in the country with the acquisition of Comvergent last December. On top of that, we have just announced the acquisition of Mono Consultants Ltd. This acquisition is actually a considerable asset for the group, especially in the U.K. market as it allows us to improve our territorial coverage, our client portfolio and our skills. We are clearly building a strong offering in the U.K. and especially in the 5G segments. I now hand over to Gianbeppi for the next slide.

[Gianbeppi Fortis, Co]

Thank you, Amaury. Let's go to Slide 17. What you see here is the different building blocks that are underlying our growth. The first one is the fiber-related activities, where you see in the column for different countries, 2 numbers, 2 percentages. The first one is the number of homes of the countries that are passed by fiber. And the higher the number, the more the deployment is already done. As you can see, in France, 64% penetration rate, quite high. Extremely high in Spain, 88%. And then lower in the other countries. The second number is the more important and the most important for us which is the number of homes actually connected. And as you can see, with the exception of Spain, there is a huge potential for us on customer-facing activities related to fiber. So clearly, fiber is going to be a very [ nice ] driver for us in all of the geographies, with the exception of Spain, France included. The second important building block is 5G. Mobile networks are a segment where there is going to be a lot of investments in the coming years. Everybody is expecting many important things from 5G networks. And I must remember that we were not a mobile network up until a couple of years ago. And this year, we're going to have about EUR 30 million of revenues in mobile network. So it's clearly becoming a segment that's important for us and is growing this year and growing for the years to come. So important source of growth. The third block, which is extremely important, is always related to the energy transition. For us, that is in particular, charging station for electrical cars. And also solar panels. This is particularly true now with the cost of energy that is going through the roof. And I've actually seen a couple of articles, one this morning, concerning the sales of electrical cars in Western Europe. We are in the first 9 months of 2021 at more than 1.5 million vehicles sold, electrical vehicles sold, compared to 1.3 million sold for the total for the full year 2020. So a very strong growth of electrical vehicles. And in parallel, the infrastructure that is needed to charge them is not there. I remember that the French government had a very bold stance towards this infrastructure saying, we want to have 100,000 charging stations in public places at the end of '21. Well, we are at 40,000, 4-0. So we are really behind, and there is a very strong push towards electrical vehicles and the related infrastructure. So a very important driver for us. Same is with renewable energy, in particular, solar panels. An article there in France appeared a couple of days ago with the French government pushing solar panels, which can be a very good alternative for people in particular, in relation with electrical vehicles. If you have an individual house and you have solar panels on the roof, basically, you are capable to load your car and travel for free. So we expect very good things in this sector. For this year, we have already, I would say, maybe EUR 25 million, EUR 30 million of revenues related to these activities. And these activities will grow strongly all across the geographies next year and for many years to come. And then on the right side of the slide, there is another column where we remember the amounts that are provided by the European community to foster the economy after COVID. The total bill is EUR 700 billion. I think it's really the largest one after World War II, after the Marshall Plan, and this money is arriving now in the countries, in the countries in which we operate. The largest beneficiaries are Italy and Spain that are seeing about EUR 70 billion coming. It's happening certainly now. And then for the other countries, it's a bit less, but still a huge amount of money. And a very significant part of that is going into the sectors that are important for us, in particular, telecommunications and energy transition. And this money must be spent in the coming 5 years. So there is a huge political tension, a huge political drive to make this infrastructure project happen. So we are very confident with the growth potential that we are going to have in the coming years because the money is there and the political drive to make it happen is extremely strong. Let's go to the next slide. Now that we have seen that the potential is there, what are the things that we as a company have in place to capture those opportunities? But first of all, we have an extensive experience to support very fast ramp-ups in new markets. It's something that we have already done, that we are doing, and we are capable of doing. We have a European footprint. It's not the case of many other companies. So we are capable to propose to our client services with the same level of quality all across Europe. It's something that not many companies are capable of doing. We have very strong and long standing relationships with major telecommunication operators, utilities and technology groups. We are securing a strategic partnership with new players, especially in the energy sector. We are packaging new turnkey solutions to be capable to serve our clients with new service offers. And we have the expertise that is required to deploy these new offers all across Europe, using the skills that we have already. Next slide, please. In the next slide, you see all of these concentrated in one slide with colors to give you the possibility to see a summary of all of these other plans. Basically, what you see is countries and then different activities: fiber, 5G, smart meters, charging stations and energy transition. And then there is other -- 2 things that are important for us. The opportunity to increase our density in a certain geography and the opportunity for us to concentrate the market in that geography. Red means that the market is mature or that topic is mature, so less opportunity for growth. And green means opportunity, important opportunity for growth. There is different shades of green, means opportunity is there now, opportunity is coming soon and opportunities for a little bit later. As you can see at the glance, for fiber, with the exception of France and in particular, Spain that are more mature, there is opportunities all across Europe. 5G is definitely a great opportunity in all of the geographies. Smart meters are already done in several geographies, but there is still a good potential for us, in particular in Benelux, in Poland and in Germany. Charging stations, energy transition, definitely a great opportunity in all the geographies. Then we still need to focus on increasing our density in all of the geographies with the exception of France and Benelux. The last point is that we still have huge opportunities in terms of being capable to concentrate the markets in each of the geographies in which we are. Remember that most of our competitors are small companies, and the tendency on the client side is to reduce the number of players. Of course, they don't want to put all the eggs in the same basket, but they do not want to deal with tens of different small companies that are too difficult to manage. In particular, when they have big money to spend, and then it's just much easier to deal with the company that has the financial strength to follow the investments that these clients are happy to do. So in a nutshell, what I'm trying to say here is that we are extremely confident in the opportunities that we have all across Europe to keep growing, as you have seen in the past. We are done with the presentation. We are now available for the questions you may have.

[Operator]

[Operator Instructions] Our first question comes from the line of David Cerdan of Kepler.

[David Cerdan, Equity Research Analyst]

I have a few questions for you, please. My first question is regarding the shortage of component. Can you explain which kind of component you are facing shortage? Secondly, do you expect the situation to improve in the next quarters? And the third question. Are you confident in the catch-up effect of this lack of activity for the next quarters? And I have a last question. It's regarding your quest of a large shareholder. Can you have an update on that?

[Gianbeppi Fortis, Co]

Okay. Let's take the question one after the other. So what kind of equipment was missing in this quarter and then what we expect for the quarters to come. The problems are on active equipment. So it's 5G equipment. It is charging stations. It is smart meters. We have problems with smart meters provisioning for Fluvius in Flanders, for example. But it's also passive components. So we have problems with fiber cables, boxes that are related to fiber deployment. And also some accessories, some connectors. So if the problem that is generalized, it's all across Europe. It's basically related to semiconductors and what is made in China, basically. So it's really a supply chain problem. You don't see it in countries other than France because the drivers that are there in terms of growth are so strong that we are growing 15% in Benelux, and we are growing 30% in the other countries, no matter what. And that will continue. So even if there is a shortage there, the drive is so strong that we could continue to grow. In France, it's a different story because we have these deployments that are now mature and we have the new activities that should replace them, but they are not growing as fast as we would like to because of this lack of material and components. Now what's going to happen in the coming future? The honest answer is that we do not know. It's a complex problem. We, of course, we ask questions to our clients, but we do not have clear answers. And our feeling is that the less mature the value chain -- the supply chain is, so for new activities, the more difficult the problems -- the more difficult are the problem to solve. We -- as I said before, we are sure that this business is not lost because our clients need this kind of activity. They must have them. If you have a car, you need to load it, no matter what. If you work from home, you need to have a good internet connection, no matter what. So if it's not done this year, it's going to be done some time in the future. But again, I cannot tell you if this was missed in the third quarter, is going to be recovered in the fourth quarter or first quarter of '22. We do not know. What we are sure of is that we are seeing a slowdown now. Well, we are going to see a faster growth sometime in the future. Now the last question...

[David Cerdan, Equity Research Analyst]

Maybe just a clarification, Gianbeppi to rebound on what you said. Regarding the product, do you have an inventory? Is it the inventory of your client? And which kind of visibility do you have on this backlog?

[Gianbeppi Fortis, Co]

It's inventory [ labor ] side. The largest part is equipment that is provided by our clients, and they provide us on a weekly basis. So we do not have a very long-term view on the equipment they have. We have some forecast, but then there is adjustments that come. And basically, we have just to adapt ourselves to the capability the clients have to provide equipment and work. The good thing is that we have quite a lot of flexibility on our side, so we are capable to adapt to these fluctuations. What we are not capable of is to anticipate exactly the impact that the supply chain will have in the equipment that is supposed to come in 3 months or 4 months, 5 months. Now I go to the last question, which is the one related to the anchor investor. As you know, we have awarded Rothschild before the summer. The mandate to help us find an anchor investor, we have spent the summer to do the preparation work. So we have prepared quite a lot of information, quite a lot of data. And now we are entering the active phase. So beginning this month, there is going to be contacts and exchanges with third parties. And then the process will continue, will continue certainly into next year.

[David Cerdan, Equity Research Analyst]

And have you already met some potential key shareholder?

[Gianbeppi Fortis, Co]

We have some marks of interest because, as you have seen, there is a lot of money that is going into our sector. So -- well, there is a lot of money available overall across Europe. Private equity funds have lots of money available to spend. And our sector is a sector that is interesting for many investors. So yes, we have some mark of interest, and we believe we will have more in the following weeks and months.

[Operator]

We'll move on to our next caller on the line, we have Julien Fouché, Societe Generale.

[Julien Fouché, Equity Analyst]

Gianbeppi and Amaury, just a few questions for me, please. Maybe first, a follow-up on the supply chain issues. So the growth was strong in Benelux and in other regions. I understand that these regions were also impacted by the shortage. Maybe could you quantify that? And should we expect any catch-up there? And secondly, regarding your telecom business in France. Fourth quarter of 2020 was also strong. So do you expect the activity to be down year-on-year in the fourth quarter? And also, how should we look at this going into 2022? And maybe lastly. Just a follow-up on the process to find an anchor investor. You mentioned private equity. So maybe -- have you defined any strategic priorities in terms of type of investors?

[Gianbeppi Fortis, Co]

Okay. Let me -- maybe I keep aside the first question that is related to supply chain when you asked for the quantification. I leave it then later to Amaury, if he's capable. It's not easy to assess, but he may be able to give you some hints. I'll take the one related to the French telecom market. As you've seen, in this market, there is 3 parts. One is deployment. So putting the fiber in front of houses. That is clearly an activity that is slowing down because there is already 27 million houses with fiber in front of the door, out of a total of 40 million. So 2/3 of the work is done. Of course, we are on a descending phase, but it's not an activity that is our core business. So we are marginally impacted by that activity because what we care is the customer-facing activities. So on the customer-facing activities, there is 2 parts. One is new client installation and then maintenance. New client installation, as you've seen in the last quarter 2020, there was, for the first time in the history of France, 1 million new homes connected, 1,100,000 connected on the third quarter 2020. But overall, at the end of June 2021, there is only 12 million houses connected out of the total of 40 million. And when 27 million already have the fiber in front of the door. So of course, the heavy investment for the operators is to take the fiber in front of the door. Once the fiber is there, they push, they push quite hard to get the country, because that is what generates revenue for them. So we are 12 million, 27 million past. We believe that on that part, there is going to be a good push, a strong push for many years. '20 has been really something exceptional because what you can see in our slide, there was the COVID lockdown phase where everybody was scared. Certain shops -- several shops of telecom operators closed down. And as a result, the sales in the first part of 2020 of Internet connection was quite low. And then lots of people were working from home, and everybody rushed to buy good internet connections in the second part of the year. So we have this big bump in the second half of 2020, that is something exceptional. If you take the average of the growth in that segment between '19 and '21, probably you have something realistic that is representative of the future of France for a certain number of years. The last part, which is actually the most interesting, is the maintenance part. And that is something that is growing steadily because it's just a percentage of the customer base of the operators. And since that customer base keeps growing, the maintenance activity will keep growing. And at a certain point in time, the volumes of that activity will be higher than the one of the new installations. And maintenance will replace the new installation. I continue with the question on the anchor investor. I mentioned PE just because it's mind blowing the kind of money we are talking about. So there is really a lot of money in the system. And of course, we believe we can benefit from that. But of course, there is also industrial investors, industrial partners that are interested in what we are doing. To the question, what are the strategic priorities. The strategic priority for us with all of this money that is available in our sector is to have an anchor investor that is in full agreement with our strategy that we have proved to be right in 20 years of work because we had a strong growth for many, many years. And we believe we can have still very strong growth for many years. We just want to have an anchor shareholders that allows us to put our head down and just working without being bothered with all sorts of noise and continue to work to create value. So that's the main objective. So we are going to be very careful having a partner that is absolutely aligned with the strategy of the company and allows us to work without asking any useless questions. Amaury, you want to take the question on the supply chain?

[Amaury Boilot, Group CFO & Member of Executive Board]

Yes. Thank you, Gianbeppi. Your question, Julien, was about the quantification of the impact of the difficulties in supply chain. So first of all, we had made a kind of...

[Julien Fouché, Equity Analyst]

Maybe just more specifically in Benelux and in other regions.

[Amaury Boilot, Group CFO & Member of Executive Board]

Yes. Well, I would say that [ we assess ] that the impact was around EUR 15 million to EUR 20 million on this quarter. And obviously, the impact is more visible in the countries where we have major activities. So in Benelux, currently, we are just in a ramp-up phase, so volumes are going up month after month, but not as fast as expected because of the shortage of equipment. So hard to quantify only in these regions, but we are talking about several millions. But your second part of the question was, can we expect the catch-up effects related to this shortage? Well, actually, if you lack the chip in order to provide the smart meters for your technicians, then you would not have an acceleration of the supply chain in the coming months. It will just be delayed a little bit. Once you receive the equipment, then you can install it. So it's just delayed. But you can take a rule of thumb and assume that Benelux, which accounts -- which is our second largest geography and accounts for 15% to 20% of our revenue is actually representing 3 -- has been impacted by EUR 4 million of [indiscernible].

[Operator]

And at this time, we have no further questions on the phone, and we will move on to questions from the webcast.

[Amaury Boilot, Group CFO & Member of Executive Board]

Okay. So we have a question about the certification of the accounts 2020. Well, I remind you that our financial statements have been audited, that our auditors spent several thousands of hours on our accounts. And they did not identify any anomaly on our accounts. Our financial statements for 2020 were approved during the shareholders' meeting and have been filed, so they cannot change anymore. And I would take the opportunity to state very clearly once again and without any ambiguity that our financial statements 2020 were prepared with the integrity by our financial teams and that they do reflect and do give a true and fair view of our financial performance in 2020. On top of that, as EY took the decision not to give an opinion on our 2020 financial statements, our new auditor, PKF, had to do -- had to perform their own diligence on our opening balance sheet 2020. And they confirmed that there was absolutely no anomaly in this balance sheet. So you can take our financial statements as the final ones. And I confirm that they are [ absolutely ] correct.

[Gianbeppi Fortis, Co]

Okay. We have another question, which is, are you seeing any labor cost inflation? Would you expect this to impact second half '21 or '22? No. At the moment, we do not have issues on the people side. The issue is more on the material, as we said before. So we do have the people. No major problems in terms of salaries. The problem is more the material. But we hear lots of companies, especially in tourism and other sectors that were more affected by COVID that are having problems. So we may have problems in '22. At the moment, we do not see it. Another question is for the EUR 500 million of new contract value that we have won, what should we expect for the revenue contribution from these new contracts in fiscal year 2022? Okay. So the EUR 500 million that were won in the last 2 quarters, we begin to produce some revenues around the end of this year and then next year, of course. What we are expecting next year, I put on the side problems on supply chain that we are not [ ready ] to assess. But next year, we are going to be back to double-digit growth, as you have seen in the past. So no exception from what you're already seeing in the previous years. So out of the basis of EUR 900 million or more, it's going to be double-digit growth, for sure, in '22, no matter what. And then last question is of the EUR 19.7 million of France energy -- of revenues in Q3, how much was related to smart meter rollout? How much revenue should we expect from France smart meter rollout next year? I think that's for you, Amaury, if you can answer to this.

[Amaury Boilot, Group CFO & Member of Executive Board]

Yes, sure. Thank you. Well, actually, the installation of the Linky and the Gazpar smart meters in France accounting for EUR 9.5 million out of this EUR 19.7 million of revenue in Q3. And for next year, you can expect approximately EUR 20 million to EUR 25 million of revenue related to this activity in France.

[Gianbeppi Fortis, Co]

Thank you, Amaury. And then we have another question for you. How is your relationship with your banks?

[Amaury Boilot, Group CFO & Member of Executive Board]

Good question. Well, our banks have always been very supportive with us and trustful. As a very -- as a mark of trust, I would use the fact that the group resumed M&A recently, notably with the acquisition of M&A. This acquisition has been possible thanks to the support of all our banks, which unanimously supported this transaction. And I would like to take the opportunity to thank them for their support. So I would say that the relationship is good, and we are now in the mid phase of the conciliation with them.

[Gianbeppi Fortis, Co]

Okay. We have another question. Telenet and Fluvius signed an agreement to create an ultrafast broadband network in Flanders. What will be the impact for Solutions 30? Yes, that's something important for us. So the impact is going to be positive. That is going to be yet a new activity related to fixed networks that is going to become important for us in that region. So very good news for us from that joint venture. Other question. You have resumed your M&A strategy with the acquisition of Mono. Is there any planned acquisition in the energy segment? Have you identified targets? When can we expect new acquisitions? So yes, we are back to normal, I would say, on the M&A side. So we have a pipe that is quite full with opportunities in all of the geographies. So yes, you should expect new acquisitions certainly in 2022. I would say, from now onwards, we will be back to our normal M&A strategy in the energy sector but also in the other sectors. We still want to concentrate the markets in which we operate to be the dominant player. That's going to be done by organic growth, but also by external growth. Could you please clarify what does 10% maintenance, 10% churn and 5% new construction mean on Slide 13? Yes. Okay. 10% maintenance means that when you have an installed base of clients on a telecommunication network, fiber network, you have about 10% of them that has one problem per year. It's a quite conservative figure because in reality, especially at the beginning when a network is new and is not stable, we have actually more failure. But we have taken an assumption 10% maintenance rate. When you think about it, that means that you have 1 problem every 10 years. And I'm sure at your place, I don't know where you're based, but me personally I have more than 1 problem in 10 years. So I think it's quite common to more than 1 problem every 10 years. So that's one thing. The second thing, churn is clients that change operator or clients that move. There is moving from one apartment to the other. On average, that is about 10% of the customer base. And then there is new construction. That is a little bit rough. But if you take a country like France, they have about 400,000 new flats that are built per year. And of course, each of them needs a new connection to the telecommunication network. So that explains the 5% of the installed base that is related to new construction. These are the 3 components. Can you please give us more information on the complaints that you have filed? Well, as you know, we have filed complaints with the French regulator and also with the French administration. And they are going ahead with their procedure. But of course, we -- it's independent from us. So that goes on. And at the moment, we do not have any particular news to give on that side. Do you plan to expand your activities in new geographies? No. No. Now the geographies -- the geographical coverage is good. So we are covering the countries we want to cover. And our focus now is to increase the size we have in these geographies and duplicate the French model all across Europe. Can you please comment on the new organization in Germany? Okay. I'll try to do that. In Germany, the potential of the new activities is very significant. But at the same time, Germany is and has always been traditionally in our sector, quite slow. So what we have seen picking up in geographies like Benelux or the U.K. are not picking up at the same pace in Germany. But we see it coming. The organization we have in place is an organization that has been built around the coax technology and maintenance activities. So fiber is something that we need. Now we have to implement in Germany, a new organization that is able to capture the potential of the FTTH deployment. So it's not exactly the same organization. It's not exactly the same skills, the same technology. So we are doing now a transfer of knowledge from the countries that master already this technology to Germany. And we are beginning in Germany to have some pilot projects related to fiber. Basically, we are preparing ourselves to capture the growth that is going to come in fiber in Germany. Given this publication, what are the forecasts for Q4 2021 and '22? Well, for Q4 '21, we wrote it in the press release, and we said it before, we expect growth at around 10% for the year 2021. And in '22, as I said before, we expect to be back at a normal double-digit profitable growth, as it was in the past. I do not see other questions. If there is no other questions, I think we are done. So thank you, everybody, for your participation and look forward to hearing from you soon. Thank you.

[Amaury Boilot, Group CFO & Member of Executive Board]

Good afternoon. Thank you.

[Operator]

Thank you, everyone, for joining today's event. You may now disconnect your lines. Hosts, please remain connected.