Alten S.A. (0O1S.IL) Earnings Call Transcript & Summary

Welcome to the ALTEN conference on the turnover figures for the second half of 2022, giving the floor to Bruno Benoliel, who is the deputy CEO. Mr. Benoliel, you have the floor.

Thank you. Hello, everyone. And thank you for your presence at this conference for the results of the second half of '20 -- the first half of '22, excuse me, and you've received the press release, and I'm sure that you saw with the figures that the first half of '22 did not show any change in relation to the end of last year. For a year now, the operations have so sustained growth in spite of macroeconomic risky environments and the war in Ukraine. Headquarter figures end of June '22 is at EUR 1.825 billion, 31% in compared to end of June '21, it was at EUR 1.395 billion. In France, the operations progressed by 36% and 32 outside of France. So with constant scope and ForEx, operations have progressed significantly, progressing by 19.8%, which is plus 14.5% in France and 23.5% -- 22.5% outside of France. Acquisitions have contributed to 30% of overall growth for this semester and representing 30% of our turnover figures. The ForEx effect contributed positively because of depreciation of euro compared to most currencies. As of today, a little over 30% of turnover of the group is conducted outside of the Eurozone, and International represents now plus 67% of operations of the group. At the second semester, our turnover figure is EUR 931 million. This is 30.7 -- 30.4% increase compared to June '21. Similar scope is a 30% growth, 18.9% in France and 21.5% outside of France. The activity rate is still high. It was 92.9% at the second quarter above our normative rate of 92%. A consequence is the for the second semester, the activity rate of the group is 92.7%. And logically, the turnover was also high. The 2 factors are usually connected. So activity rates that are high and the turnovers that are high mean that the operations are doing very well. Our turnover rate is 28%. It is higher than what we would want it to be, of course, as you know, because our target turnover rate is 20% to 22%. However, the engineers have been increased by 6,500 people, including 940 organically, 430 in France and 1,290 outside of France, acquisitions represented 3,060 engineers. As a consequence, while ALTEN had 2000 -- 4003 -- 42,300 people at the end of last year, including 30,000 engineers. We are now 46,600 people, including 3,600 -- 30,660 engineers including 8,800 in France and 32,500 outside of France. Activities, per geographical -- so before we look at them per sector in France, our progression was mostly due to the civil aeronautics representing 1/4 of figures in France, increasing by 47% and now has gone beyond the level before crisis. Progression is due to nuclear and energy infrastructure, representing altogether 10% of sales figures and growth above 20%. Automotive is 10% of sales figures, only increasing by 6%. It was at 0, the first quarter, and so growth accelerated in the second quarter, but growth was conducted mostly with the following back on nearshore and offshore projects for car manufacturers in France, which is still under the pre-covid levels in France. In Europe, outside of France, activities are going -- undergoing growth, as you've seen in the slides that were distributed in most geographic zones, except for Scandinavia and Switzerland. In Iberia, our activities increasing by 23%. All sectors are undergoing strong growth, in particular, similar Aeronautics, Civil Services, Industry and Telecom. In Germany, the picking up of activities that was seen at the first quarter was so more -- even more consistent than second quarter. And so increase of activities in Germany, increasing by 22.3% organically. Aeronautics progressing by plus 30%, 16% of German sales figures, but still under the level that it was at the beginning of '21, while automotive that represents practically half of sales figures in Germany progressing by 32% and has also really gone far beyond the precrisis levels. All other main activity sectors are also driving strong growth in Germany. In Italy, growth is consistent at plus 26% for the third consecutive years with all sectors growing without exception at Benelux, growth confirmed acceleration seen at the end of '21 at the beginning of '22, reaching 17.1% at end of June '22, thanks to the Netherlands where the growth is practically at 60% in activities, increasing strongly with electronic semiconductors, energy and industrial product lines, but Belgium growing much more slowly. In the U.K., activity is growing by 26%. This bounced back strongly in aeronautics, growing by plus 100% and representing 1/3 of the sales figures, Automotive increasing by plus 30%, 50% of sales figures, Defense and Electronics. In Scandinavia, our growth had bounced back at the first quarter, but slowed down in the second quarter to reach 5%. And going more strongly and more historic factors such as rail and route transportation in Eastern Europe, there's a managerial issue, just like in Switzerland, which is linked to market and activity constraints. In Eastern Europe, progression is still strong with 40%, thanks to Poland, increasing by 50% over all sectors and Romania representing 40% of the zone where you see that activities are increasing by plus 5%, thanks to Automotive and Energy sectors. That was for Europe. Now moving on to Northern America and the U.S.A., plus 23% activities representing 40% of that zone in Canada, so representing a 20%, growth is higher at 30%, thanks to services and Aeronautic sectors. In Asia Pacific, a growth rate that progressed again in the second quarter to reach over 40% for the first half of the year in current -- constant figures, China increasing by 30%, thanks to Automotive, India by 40%, thanks to Services, Semiconductors and Automotives. Japan, 10% of the zone plus 50%. And finally, Singapore that we didn't talk about very much but representing about 10% of Asia Pacific and growing by plus 60%, thanks to Finance, Tertiaries Services and Energy. Growth that is strong this half of the year in all geographic zones. So if you analyze the activity now, if you take the different verticals, you can see that all the different sectors are growing, even though the rhythm of growth are a bit different. So the automotive sector is still bouncing back. It is now representing 70% -- 17% of the turnover with an organic growth of about 30%. So it grows a bit more for the equipment pilot rather than for the manufacturing part. We have a bit of a lower activity for the [indiscernible] sector. For the Aerospace, it's about a growth of over 55%, which is a great recovery, especially for the Aeronautics that is over 60%, driven especially thanks to Airbus. And the recovery for the OEM is rather good, especially for Thales and so on. So in the [ Space ] sector, the growth is a bit more moderate, even though there is still growth at least. So for now, everything that we were missing in 2020 is back on. So for Defense & Security, we're at 5% of the turnover. The energy market is growing by 6% with different type of situation depending on whether -- depending on the different provider. And so for now, we are getting out of Russia represented 21% of the turnover. So we're supposed to be going out of Russia by the end of 2022. So we should shrink when it comes to growth here. We also have a shortage in terms of engineers. So here, Energy is basically driven -- thanks to the energy that is growing by 20%, especially thanks to renewable energy. For Life Sciences, which represents 9% of our turnover is growing by 10% in all sectors, whether it's pharmaceutical or equipment. And for the other industries in the same sector, we have a growth of about 5.4%. For Telecoms, we have a growth of over 3%. When it comes to Media & Electronics, we have a growth of over 30%, especially thanks to the different activities for e-commerce or semiconductors, for example, and for Tertiary Services, which is 25% of the turnover. It is growing, especially in banks and insurance with a growth of over 17%, especially in North America and South Europe. So to sum up, despite -- if you take out telecom, the Automotive and Rail and Naval industry, that represent less than 10% of the turnover. Well, ALTEN has about 9% of its activity that is made out of sectors in which we have a lot of growth. When it comes to external growth, we had acquired 4 companies in this first semester. 3 companies were already announced in the previous publications. We've added 1 more company in Australia, specialized in project management. You can see this is a rather small company. And the idea here is trying to reinforce our presence in Australia. So we have a lot of different affairs upcoming in different countries such as Romania, India, Germany, the U.S. and so on. For 2022, I'm reading the presentation just as you are. So what I can tell you is that up to date, we don't see our activities slowing down, maybe you'll say different things -- well, different things in September once we publish the results. But for now, we're doing quite good. So for the Aeronautics and Automotive sector, we can see that we are above the level we've had precrisis. So it's much better than we had anticipated. The context has changed and so organic growth for the second semester of 2022 will be much over 10%. So I'm now going to give the floor to the participants to this meeting. So if the moderator can now open the conference so that people can ask that question would be great.

[Operator Instructions] So we have a question from Emmanuel Parot.

I have a question regarding recruitment policy for the third trimester. So we can see that the demand is rather high, but the context is a bit uncertain here. So I wanted to know what it would be in terms of recruitment for the third trimester? And I was also wondering, for my second question, it's a bit more usual, but I had questions regarding the inflation. Is it going to impact the prices? On the last call, if I remember correctly, you said that it was going to take a little time to make sure that the inflation wouldn't have an impact on prices that you could compensate. So I wanted to have your opinion on that point.

All right. So regarding the recruitment policy that we have for now, we haven't really thought about it. So for now, we're trying to maintain the turnover at an acceptable level. So we haven't noticed or observed any spike in people quizzing. So the idea for now is to try and maintain that, we have the same number of -- same number of offers. And so the idea here is to try and slow down the turnover to try and recruit more so that we can fulfill the needs that we have. So for now, we're not planning on slowing down the recruitment process because that would put our activity in jeopardy. And if the situation is -- if it's going to change. Of course, we'll change our strategy as well. But for now, we would have been able to do more in terms of growth if we would have been able to recruit more. Unfortunately, we haven't been able to recruit as much as we needed. So our growth is -- was limited. And so now if you want to answer to the different corporate tenders that we've received, especially in the U.S. Well, we see that the projects are not going to shrink either. So we are not going to change our recruitment strategy or recruitment process. When it comes to the inflation, well, unfortunately, this is increasing as well. So we've tried to anticipate as much as we could. So we're trying to anticipate wage raises. Usually, we do this on the dates -- on the anniversary date of the contract, but we're trying to duty pay raise now so that we can try and compensate inflation. So we know that there will be increase in salaries here. But the issue that we had is that we have major differences in between the different countries, especially when we're acquiring companies from countries that usually have lower salaries. So we are going to try and do our best to compensate, but we're going to do this on a case-by-case process. So this year, the average salary is going to increase. Even though we've acquired company in countries that are still -- in developing country at the moment. So here, we'll see that will have some stability or at least we'll see a decrease in the average pay. But for the first time in a very long time, you'll see that all salaries are going to increase for a while in order to compensate. So of course, we're trying to make sure that these raising salaries will be impacting the different prices and tariffs. But apart from the Automotive sector in France and the Airbus account in which the pricing is a bit more complicated, we've been able to compensate -- 2/3 of the increase in salaries are being compensated things to the increase in our pricing for our different accounts. So what we can analyze here. We can try and see the ratio in between the price and salaries that take all of these factors into consideration. And so we'll see that a bit more in the second semester because we do have increased campaigns that we that will implement the idea here is to get a better gross margin.

We have a question from Gregory Ramirez.

I will now I have a question regarding the fact that we are going to withdraw from Russia. You were talking of several millions of euros in terms of turnover in Russia. And so if we're withdrawing from that country, and we'll finalize that if I'm just understood properly for the second semester, what should we expect in terms of the impact it will have on the turnover? Is it only a couple of million euros? Is it going to be really important? I imagine that this will also have an impact on 2023 rates. Even though we know that turnover has already decreased.

Well, we already lost half of our activity in Russia for now compared to the first semester. And so basically we'll be completely withdrawing from Russia on the second summer of 2022. So it won't really have an impact in terms of growth here. So of course, if we take into consideration all of the different factors. We know that everything was already divided by 2 by the end of June.

We have another question from Aditya Buddhavarapu from Bank of America.

This is Aditya from Bank of America. Two for me. You mentioned that second half of the year should exceed 10% organic growth. Can you maybe talk about the -- some of the underlying assumptions within that? Is there any assumptions baked in around macro or what customers are saying? And second, given your comments on the wage inflation and price increases, I mean, should we still think about the full year margin as sort of being above the 10%? Or do you think you maybe -- you have a bit more visibility on margins now compared to maybe a few months ago?

Okay. If the participants don't mind, I'll try to answer in English. Said that the organic growth will be much above 10% for H2. Of course, we have taken into account different assumptions regarding the economic evolution. So when we mean above 10%, of course, it's not 10%. It could be 12%, could be 13%, could be 14% or 15%. 12% is unlikely to be achieved since that -- the fact that we have an embedded growth for H2. So it should be above. It's difficult to know exactly because everyone is expecting a recession in H2 that, to be frank, we do not see at all today. So -- but we have to be cautious reason why we said that. But you can consider that the growth in H2 should be comprising between, I think 12.5%, 13%. I mean, if the situation is deteriorating rapidly after summer, which is not our main assumption today, up to 15% if the situation is, I mean, stabilizing or slightly declining in H2, also taking into account that we have a comparison basis, which is less favorable of course, in H2 than in H1, as Q1 2021 was weak because of the COVID crisis. Regarding our margins, of course, we have some view regarding the margin. H1 will be good, probably that you're much better than H2 because we have just 2 working days difference between H1 and H2, which is not enough to offset the vacation as people are on holidays. I mean, not all but most in many countries during July or August. Also, we're going to have an average wage, which will be higher in H2 compared with H1 as we are leaving to our employees wage increase at their anniversary date. So for all these reasons, we expect H2 to be weaker than H1. H1 will be good I mean, really good. And of course, we are very confident, expected there is a crush of course in H2. Again, this is not our assumption. It will be above 10%, as we said, comprising probably between 10-point-something and 10.5% over 2022.

Okay. Just to confirm your comment on above 10% margins for the second half, right, not for the full year, just for the second half, so it will be above 10%.

So what I said is that the margin rate is good for H1 and for H2, we'll have a margin rate that would be less good than for H1 for the reasons that I explained. But that, however, should remain above 10%. And that overall, for the full year, we'll have a margin rate except for any -- so very substantial modification of the world economics in the second half of the year, will that be comprised between 10.2% and 10.5% with the -- so more optimistic or less optimistic assumptions with that being the bracket.

Next question from Axel Stasse from Berenberg.

I have a question concerning Scandinavia that was a little bit more complicated in terms of growth, if I understand correctly. Could you just explain what you mean by a managerial issue as opposed to a market issue?

So actually, we're talking about operations here where the market dynamics is crucial, but where the ability of management to drive its organization and go fetch customers and win over projects is also very crucial. And we see for a country such as Italy, and Southern Europe in general, where management is very good, including during the COVID crisis. Well, the group at that -- in that area maintained very high growth rates. And what I mean by this is that we have an underlying market in Scandinavia, which is good in the automotive and heavy-duty road transportation, that's good, a little bit less in other means of transport. And this is true for Switzerland as well, by the way. And so as management is not sufficiently high performing, well, necessarily, our performances will not be as good. And what I mean by this is that the -- it's not necessarily the Scandinavian market that's not going well. It's maybe that we are not good enough in the Scandinavian market.

We have another question from Laurent Daure from Kepler Cheuvreux.

I have several questions. First question, on headcount, which is sequentially increasing in organic figures for the second quarter between France and international. So what's the dynamic here?

So France is plus 125. And international, plus 1,000 -- 1,365.

So this is a slightly higher rate than what I noticed. So you are higher up in the bracket, I would say. And so -- this is a rhythm -- the pace that you're going to pursue in the 3 to 6 next months, except for exceptional circumstances?

Of course, yes. if operations are going well enough. So usually, we do have a trough in Q3 obviously, because you have many departures in July, end of June and just like at the end of December, as you know, and the July and August or months that are lower in terms of recruitment because people are not there to hire and so it picks up again in -- so at the end, so mid-September to the end of October, so we have the seasonal trough in Q3. And then if operations are going well, usually speaking, we have a good Q4. And so we'll have less recruitment in Q3. That's most probably for a certain than in the first 2 quarters. And then potentially, we'll go back to a recruitment level that's equal to Q2 and Q4.

And between offshore and onshore, so more -- so acceleration on the offshore part, I'm assuming.

Yes. Well, we've recruited a lot in the first half, and we didn't only do offshore far from it. We recruited a lot in other countries as well.

So I had a second question regarding the withdrawal of Russia. So in terms of restructuring, for example, is there anything specific that we have to expect? Or is it marginal.

Now it's going to be at marginal it's going to be nonrecurring. So if we decide to provision anything, but I mean, we are finalizing the details at the moment. So that we'll be under EUR 5 million whatever happens.

And so how many people were working there?

Well, at first, there were 120 people, and now they are over 60 of us.

And are there any people that you can recycle outside of Russia, does that mean that we have to let them go.

Well, it's a bit -- the situation is quite complex because we have some clients -- customers that are not Russian. Most of our customers are actually European clients that are based in Russia. And so there are base there just because it's easier in their sector, especially when it comes to petrol, for example. And so sometimes we have even consortium that are Russian consortiums. So here, I mean, as you can see, the situation is a bit complex here, and we have different types of contracts that we had as well. So the easiest thing that we can do for now is exactly when you're riding a bike, so you stop pedaling at some point, it just stops by itself, right...

What about the turnover then?

Well, -- the fact that we're withdrawing from Russia, it doesn't mean that we are going to terminate the different contracts because we need our customers right. There are big customers as well. So it's important for us to keep them, and we just can't let them go overnight. And again, they are not Russian customers here. So what we can do if we decide to withdraw from Russia is to inform our clients and then to see what kind of solution we can find, alternative solutions. But we can't just let them go overnight and just never speak to them again.

But can't you deliver that service in another geographical area.

No. It's on site. So it has to be in Russia. It's -- we're talking about different types of customers that we have, and we have a lot of consultants working on that.

Okay. And so last question regarding sector that is usually the first one to suffer when we have macroeconomic issues. So if we go deeper into details when it comes to the Automotive sector, as of today, on this specific vertical here, I'm thinking of specific customers as well because we know that some customers are having a couple of issues -- I was wondering if the contracts would be deferred.

Absolutely not. So this is why we have a difference in between the macroeconomics and what markets say and the reality in the field for now and maybe this will change in September as well. But for now, figures are usually based on facts and based on the past. But for now, we also have operational factors that are the indicators that we use to recruit and to try and anticipate what's going to happen, but also looking to have in terms of activity, talking about the size of projects, the different consulting processes, the duration of the activity and so I'm not going to the whole list of the different steering tools that we use. But for now, we don't have any specific alarm signal or any red flags. Maybe in September, we'll see different things. But for now, we're doing good. And if you look at the numbers, the figures that we have in June, it's been great.

And so regarding the different -- the past recessions that we've had, we've seen, first, a decrease in the attrition rates. And then it was increasing. Where are we at for now?

No, for now, no change. And even, this is also the reason why -- and this is what I was trying to explain during the conference. This is why we've decided to anticipate the wage -- wage raises to make sure that we could contain that turnover because usually people are being raised at the end of the year, so trying to anticipate that by a quarter or maybe those that should be raised in October, November, we're going to raise them in September to try and motivate the engineers as well to stay in.

And is it usually clients that come and take people that we have, mainly?

Yes, mainly clients.

So it's not always the client rate, right?

It's not always the clients where engineers or project managers are working on a specific project can be other clients. But most often, yes, they are being hunted and they usually leave us to go and work in a bigger industry.

We have another question from Derric Marcon from Societe Generale.

I have a couple of questions. The first one is that I wanted you to be a bit more precise. When you're talking about the gross margin, were you talking about the margin that we have today?

No. I was talking about gross margin, and I'm talking about the direct gross margin that we have on projects.

Okay. Perfect. And I was also trying to understand in the scenario that you've mentioned. So we've seen that -- because you said you were going to compensate. And so I was wondering on what assumptions did you say to base yourself off? In terms of percent of turnover, as you said earlier on that you thought that we would see a decrease by the end of 2021 -- to 2021.

Sorry, I understand your question. But we can see that we observe impacts everywhere, especially it comes to the margin. I am not talking about gross margin, I'm talking about the one that's directly based on the project. And then compared to 2021, we have a wage rate that is much better. So this is going to compensate this loss in terms of gross margin linked to the fundamentals. We have ex impacts as well that are based on -- so we got mixed factors coming from the geographical area and some from other types of indicators as well that make the margin vary. We have a gross margin that is made of the margin that comes from the project, but also composed of different types of elements that we need to be able to achieve those projects, and we have a lot of buildings at the moment because we have a lot of people working on site. We have the different tools that we use as well. We have different types of technical structures in place, we have skill centers and expertise center as well and all of this is part of the gross margin, but it does not evolve based on the turnover. So this is also used as a buffer basically. But as opposed to that, our SG&A are going to be superior. And when it comes to sales and recruitment and so everything that we need for the activity, obviously, that we had communication fees that had disappeared at time in 2021, but we have now more expenses when it comes to recruitment, so we'll get back to the same levels of SG&A that we've had in the past, those are normal SG&A. And sometimes it's going to be a bit superior, especially because of the growth that we have. So once we've seen all of that and we just mix all this up because the equation is not that simple. And once we've mixed this up, we have different assumptions, especially regarding the wage rate. I'm taking [indiscernible] wage rate that is a bit inferior to the first semester, but it's not degraded either. And so we took the scope factor, different country factor as well to and see what's going to happen in the second half of the year. So I'm not going to give you figures for now for H1. And so compared to last year, we have 1.7 working day less. So we are going to have a gap in between H1 and H2 that will be around 1 point. So we have a 1 point gap in the total 2 semesters. Unless we are going through a really rough phase in the second semester, I don't want to be always optimistic, but I'm not pessimistic for the second semester that's for sure because the third quarter has now started, and we don't see anything slowing down, which would mean that we would have to go through a very rough situation on the fourth quarter. But as I told you, we are going to be above 10%, that's for sure. And so maybe we'll be able to reach 10.5 million. But for now, this is what we are expecting. So depending on our forecast, I might say otherwise, in September. But for now, this is where we're at. We're quite confident in the future.

So when you say 10.5, are you basing yourself on H1?

Well, H1 will be superior to H2.

Did you say in the call that H2 would necessarily be above 10%?

Yes, H2 will be at 10%. And I was talking about growth in terms of the 10%. I said we would be way above 10% growth. And in H2.

So in terms of the EBIT margin, did you say that?

Yes, it would be way above 10%, but H2 will be at 10% indeed or above.

Okay. So my second question I had to do with the net staff increase in France. I know that there's the offshore - nearshore effect in France. But is this figure something that you projected? And how would you qualify something that surprised you happy or unhappy? And do you have any idea to the departures of the -- so turnover at the end of June, the attrition rate?

For the time being, I don't have any visibility for people leaving the company at the end of June. But for France, Q2, we believes that in net figures, we would have a higher progression. We have a certain number of sectors, including nuclear, not to name it, where we are under what we need. And for France, we have a departure rate that is high. And so we are affected by the hiring momentum that's very complicated in France for the time being.

So you had a turnover rate that was very high last year as well, so what changed?

Well, nothing changed except that we -- so the momentum was about the same. But for Q2, we recruited not as many people as we wanted to recruit, and we lost a few more people than we hoped. And so overall, in net figures, it's a discrepancy of 200 people. But at the scale of France, it's not that considerable either, but the fact is that it is disappointing.

So if I may, one last question. For several years now on work packages, you had an increase of your productivity levels. And so is this a trend that's ongoing? Or do you think that it's maybe slowing down. And how does it play into this new environment with business levels that are more standard? Is it 1 basis points that we're gaining every year? Or could it be higher than that? Or -- and what are the those where you have more to gain? And is it more international? Is it spread out more evenly?

Okay. So productivity on projects is an ongoing challenge, I would say, because on projects you have to gain in terms of efficiency, on management of premises, on the makeup of the staffing of the teams, et cetera, and we're improving year-by-year. We're going to gain in terms of project productivity in this current year compared to the previous years. And we're going to continue. So making -- so increases in the years to come. So we're not going to gain so 100%. But as you said, it's around what the range that you mentioned. It's about 20 basis points from 1 year to the next. It's not spectacular. But when you look 4 years back, we did improve our project management significantly.

Thank you. We don't have any questions for the time being. [Operator Instructions] We have a question coming in from Mr. Marcon.

Yes. Sorry, I forgot one. So you said between -- so minus 70 to minus 80 basis on direct margins. And so what's the price hypothesis, the price assumption that you took for 2020 to calculate this? And the price effect you said -- you said something about the prices and you are not reaping out the benefits for 2022 in this respect. And so is this a positive effect in 2022 that you're going to still take advantage of in 2023? Are you going to take advantage of the efforts that you're making now in '23 as well?

Okay. So the way we work is a bottom-up approach. And so we are not taking assumptions of price increases just like that or salary increase assumptions either. The fact is that there is a process in which -- so from a snapshot of the situation to date, which is a mix of remuneration and so financial sales prices because in sales prices, you have the financial and commercial sales prices that are not necessarily the same for projects. And so all companies have operations projections. And so calculate ultimately a gross margin on these projects that take into consideration the embedded elements. So we have 6 months of embedded operations. And when you see what happened over the 6 first months, there is necessarily -- so what's going to happen in the 6 following months, so putting aside the utilization rate issues, et cetera, but a big part of the business for the H2 is already engaged. But -- so this could have an effect so quite peripherally on the remuneration to price mix. And so we're not -- we don't say we reduced the prices by such going to look at what happens. We have an increase of average prices per type of offerings. And when we have price increases on work packages, the translation into the gross margin is not the same as in technical assistance projects materials, for instance. So this is the way it works. From there to answer the second part of your question, the prices that increased this current year are going to also have an effect next year, but the remuneration rate has increased as well. And so in reality, if the result of our price to remuneration negotiations. And again, we haven't managed to put through price increases everywhere, even though we did put us through -- a few through and for significant customers. But if the end result is a degradation, well, this degradation of the gross margin is going to be embedded for 2023. And so for this to be improved in '23, we'll have to manage to put through price increases. So additionally, and this should be done because some customers are a little bit reluctant in the first year, but end up having to face reality because otherwise, they have trouble finding resources. And from there, the question that was going to be -- the question to come about next year is what's going to happen for remuneration. So if the activity slows down, there's going to be less sales figures, less hires and less momentum. And customers are very touchy on prices, but on remuneration, they are quite as sensitive. And so in terms of the slowing down of activities could be almost something that we to cool down this momentum. And so if we manage to put through pricing in 2023 and that we have remuneration increases as well, it will bring back gross margins to where it was in '21. And let me remind you that in '21, we have 11 basis that I reminded you at the time that it wasn't standard over a full year because we had an increase of gross margins with fundamentals that improved because we had a few price improvements, not generally, but we did have price increases at the end of last year and especially quite rarely for certain customers when there was a salary freeze in 2021. And then salary started increasing again as of -- so H2, Q3 of '21, but at the beginning of the year was -- COVID was full swing, and the time was not to salary increases. And so going back to gross margin levels that are more consistent to our standard gross margin levels. And so we do have a mix effect. It's not the price remuneration effect, if I may. There's the [ JO ] effect.

No. Are you talking about the Olympic Games or there's a misunderstanding here?

So we do measure this, and we weed out the different factors to have as a clean figures as possible.

We don't have any more questions.

Okay, so we can bring this conference to a close. Thanks to all for participating and for listening to this conference of results so end of June 22 by ALTEN, and we'll have the next publication. So on 22nd or before opening on the 21st. And so let's meet again end of September, have a very good summer.

Thank you, ladies and gentlemen. Thank you for your participation. You can now log out. [Statements in English on this transcript were spoken by an interpreter present on the live call.]