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

Thank you for being with us today and for this presentation of the 2023 results. And -- with Bruno and myself, Simon Azoulay, we are now going to remind you of all the main events and results of the year 2023 and the future outlook for strategy and the development in the forthcoming years. Now first of all, as you may have already seen with respect to the publication of the results, turnover and so on and so forth. You already had the results in previous months, turnover went up by 9% non-organic but in the aftermath of a disposal in the United States, plus 7.6% in total and ROA for the year 2023 will actually be 9.3% -- 9.4% above our expectations somewhat because it had been 9.2% for reasons which we can get back to in the first 6 months of the year, went up by 9.6% in the second half, H2. Now to make it simple, the -- we were below 10%. We usually hope for in the H2 -- this was actually related to 3 parameters. One is unfavorable timelines with respect to 2023, important investments generated end of 2022, thinking that we would actually [indiscernible] in 2023 with recruitment problems, we had oversized -- overblown the HR teams from a general standpoint. And the situation got back to normal in the meantime. And very specific investments were made related to the change in the IT tool. We also had a deterioration -- 1 percent deterioration of [ intercorporate rate ] the -- and for all those different reasons that -- well, H1 was rather low 9.2%, and we corrected the trajectory in H2, although the timelines were also unfavorable in H2 2023, which will not be the case in 2024 and get back to 9.6%. This again, hopefully, go beyond 10% next year -- I mean this year in 2024. So we really need to take -- well, factor in the fact that the 2023 result -- I'm sorry, 2022 results was quite extraordinary. And we actually performed the 11% level because of incredible growth related to an important recovery. And I'm here talking about all of the 2020 projects and 2021 projects that have been coming to a grinding halt and this was a favorable position. And so far as SG&As are concerned and the occupation rates of our engineers. And this was quite good in 2023, 11.2%. Unfortunately, this is not a standard. The standard, as you may well know, is actually to outperform the 10% level, and we're very happy beyond [ 12.5% ] and below -- 9.6%. We're not happy -- so we got back to 9.2%. And hopefully, we'll get back to standard in 2024. Anyway, we're putting our best foot forward to do so. And so far as the embedded -- I mean, the number of engineers in 2024, we experienced something which does not weigh on the turnover, but the number of engineers was impacted in November, December 2023, an Indian client -- an important Indian client for whom we had 1,500 people in various IT issues, not an international client, but an Indian client, well, that client decided the [indiscernible] the 1,500 people and the impact is about EUR 25 million in terms of turnover. This is a major impact -- this is just an impact. Now this is too bad. Okay, but we're now -- got over 50,000 engineers. And with that 2,000 engineers more because of the 2 acquisitions we carried out that are going to have an impact on our headcount, one in Japan, another one in another Asian country which we are going to communicate on -- which means that we'll -- in the -- beyond 52,000 people. And as usual, the capital of the model hasn't changed the population of engineers, representing 88% of the headcount, 80% of the population, and -- well, the level -- the number because we're really aiming at plus 5%. Now the next slide. So this is the image of the geographical breakdown of our headcount per macro geographical zone and now here, let's take this with a grain of salt. There are quite a number of projects coming from the United States or Europe, which are being carried out in Morocco, India and Mexico, which means that when you see, for example, that 2,700 engineers in North America, true, but we also use over 4,500 engineers for [ corporates ]. And revenues generated in North America because we have over 1,700 of those people carrying out projects for the North America, in India or in Mexico and the same phenomenon in Europe. France, for example, we got 11,800 engineers working in France. But actually, but for France, we have at least 2,000 engineers more located either in Morocco or Romania or India contributing to the French project. So we're harnessing -- I mean 14,000 engineers are actually participating. And when you have to look at the Middle East, Africa. Actually, the 2,160 engineers are mostly working for Europe. And in India, 11,600 -- or in Asia, about 11,600 engineers. But you can see we got 3,000 working for Indian or for clients in India but they're not working for clients located in Europe or in the United States. So generally speaking -- so this is a geographical breakdown which has summed up here and talking about all of our engineers and when we'll be talking about strategy later on, now it just -- quite a -- given brief and a geographical standpoint with respect to this world map because we'll have at least 5,000 engineers -- we'll need to really develop in North America quite rapidly, and we'll carry on with our wrap-up in India and in some European countries as well. Some European countries will have to really be on standby although they really surpass the 2,000 engineered level. Now, same thing for Spain, Italy, and we need to make some progress in Benelux, for example. So much for the world map. Let's have a look at the next slide. It is quite an important slide because we're now talking about positioning. Beyond the geographical fact, as usual, we had a look at the engineering, representing the core business and the main brand image of Alten with -- Alten is actually #1 worldwide, #1 independent entity in this market with over 35,000 engineers dedicated to engineering, 70% of our headcount broken down mostly in 2 major blocks, which you can see on the left-hand side on both sides of the Alten [indiscernible] everything that's got to do with -- this is the product systems engineering in other words, design engineering studies, prototyping of new industrial equipment mostly in what we call the ASD; aeronautics, space, defense or TT -- or in other words, automotive, trucks and railroad engineering design on the left-hand side and engineering -- manufacturing engineering plant, optimization of IT. Now design engine is really the bulk of the matter. We also have businesses [indiscernible] businesses. Well, none of those engineering blocks, which are PMO activities, project management activities. I mean this is representing 3,000 consultants and which is quite a stand-alone activity because it is not in the base -- second block, but it's actually indispensable and so forth referencing. This is the world [ view ], that non-engineering activity, but all of the additional activities from design to manufacturing. In other words, the deployment of networks and energy and in transportation, telecommunication, and everything that's got to do with the participation in projects and customer services. In other words, it supports so on and so forth. So much for the engineering part, 70% of our turnover. But we are also a player -- an important player in the world. The IT services or IT enterprise services or [ SFTI ], you can actually pick up the name you want. But globally speaking, those are IT management activities and the administrative operations within the companies that has nothing to do with the design of the equipment and products, whether we're talking about the service sector and sometimes in the industrial sector. So we -- [indiscernible] activities. This is quite heterogeneous depending on which countries we're talking about. But generally speaking, we're talking about Europe -- up to 30% in Europe or North America and to a lesser extent in Asia. Now we are trying to position ourselves on those activities in the yellow portion, mostly and so forth, the development of software, of course. With the cybersecurity layers, which we need to really factor in, in our industrial equipment and a very strong development of success stories with over 3,000 consultants into force data analytics. In other words, we're also talking about business intelligence, so forth, the breakdown of our businesses and activities, we will be able to talk about this later on, if you have any further questions. Next slide. In terms of breakdown, the sectoral breakdown. Of course, the activities -- the IT service activities are going to be popping up among bank, finance, insurance, retail services, the media and public sectors, which you can see on the right-hand side and 30%, I mean, this is the essential bulk, here on the right-hand side, and we also have some of those -- the description of 27%, which you can see here on this pie, we also have 3% (sic) [ 3 ] which are related to the industrial sector. This is in blue, represented in blue. Now all the various sectors of the industrial activities. The automotive and railroads representing 21% and this is quite actually well supported. Although this sector is a very difficult and challenging. The railroads has a lot of demand. We have good referencing in this sector and the automotive sector is undergoing restructuring with electrical vehicles and decarbonization initiatives, but this is not the only issue here at hand, the thermal vehicles still have a rosy future for another 15 years at least. And today, we need to phase up to permanent and extreme research for enhanced productivity and savings. As a result, a lot of those activities in North America and Europe are being outsourced more and more in low-cost countries such as Morocco, Romania, India or Mexico. And we are supporting our customers in those -- and -- so far as those trends are concerned and we got a very nice reputation among customers that rather turn to us, not just to us, but I mean to us -- we're always among the references for those transformations because they appreciate the fact that we are already present in the front office so far as know-how is concerned, and we're talking about the countries of margins, such as Germany, the United States and France. And we got know-how to be able to really work on quality levels in low-cost countries. Now the equilibrium between the local and offshore is going to be 1/3, 2/3. 1/3 in local, 2/3 in low-cost countries and the local France, Germany, Sweden, for example, all this is going to be steering low-cost initiatives. We're not an inching entity and player. In other words, we do not have 100% of our activities and support functions in India. We're never going to have -- be at the same level as inching players because we've got a major front office which our customers appreciate. And that's why we can hope and so for those automotive activities not a rich 20%, but perhaps up to 12% to 13% EBIT, which we are able to generate. But with a turnover, which by definition is going to be reduced here because this is low cost. So much for the automotive sector and railroad sector and so far the aerospace and defense, security. Now there is no outsourcing here. There's a very strong demand here. And the world situation is such that quite a number of projects are now being developed. And of course, we would like now beyond Europe, we'd like to develop our activities in the United States -- in the United States for certification, defense confidentially related reasons and strategic reasons, the ramping up of aerospace activities based on defense activities are being impacted, and we're starting to have activities. But in the United States, where we have -- working in other things such as space, automotive and trucks, but this sector is quite healthy and is undergoing development. Other sectors, which call other industries, energy, telecommunications, industrial equipment and really, we're -- we will somewhat -- suffered. This was -- early signs, actually went down. It was actually a slowdown in H1 2023, it starts up at the end of the year, the other way -- with telecommunication and energy. Well, we're really focusing on major products into supporting EDF or EPRs, for example, so to us really keep developing our activities in 2024, 2025. And of course, on all the renewable energy sources, which Germany -- in Germany, mostly especially in which we're trying to develop our activities quite significantly. And so far as, the yellow sectors on the right-hand side of the slide of the pie. Now here, we experienced drastic reduction, investment reduction in the aftermath of hyper investments made in 2021 and 2022 and a grinding stop of new development projects in 2023 hints the stabilization of turnover in this sector. Now, this sector was clobbered in all of the countries in which we develop whether we're talking about France, Canada, Eastern Europe, Italy or Spain and Portugal. So we do not know whether this is going to be starting up once again in -- at the beginning of the year 2024. But right now, we don't really have a lot of information. It's quite flat and stable. It's not going down, but it's not growing. And this represents 9% of our turnover and so far as all of the other sectors, so-called retail, administrative sectors, public sector, retail and so on and so forth, representing 18% of our activities. Now in those sectors also get clobbered, less than the banking sector and the financing sector, but we need to position ourselves on very specific technical offers such as cybersecurity, the cloud migration and sales force development so much for the comments I wanted to make on the various sectors. I'm not going to reiterate this in the next slide, but you perhaps are going to be getting more details when -- now with the various events or referencing that actually took place or projects or initiatives, which customers are quite fond of in the automotive, aerospace, railroad space, life sciences, you'll have more details on the [ percentage ] for telecommunication, banks and retail. Now I'm not going to make any further comments here in this respect to just really gain time. Now I gave you the information, the necessary information, the most important information. So I'd like you to have a look at the slide so far as CSR policy. Now this investment -- is displayed here on the slide and which we really have been working on since 2012, we improved our ratios in the aftermath of various certifications, which you can see here, CDP, EcoVadis -- so on and so forth. Gaïa, which you can see here that we got -- I mean, we're really in a top notch here with respect to all of the various companies. In France, in 2023, one important point is related to CSRD where new demands, great demand are being put on the table. And this is going to be costing a lot of money with -- we need to really [indiscernible] people because this is going to have an impact on all of the companies of the group. So if we want to get the certification, we've got 1.5 years to achieve this process and -- so far as the CSRD project is concerned and for the validation. The decarbonization trajectory. Now I'm going to be available along with Bruno to answer any of your questions on those different and important issues. And the next slide, now this is actually an illustration of the various challenges we've been experiencing in the last few years, M&A. Now until -- before the COVID crisis, until 2019, Alten had a strategy. Okay, we were 30,000, perhaps 20,000 in previous years. And we did what we call add-on, in other words, companies from 100 to 300 people to be positioned in different countries. And this worked out pretty well for about 10 years. Now given the size we have in different countries, we decided to change sizes and strategies -- acquisition strategies and focus on companies with 300 to 500, 700 people. Now it could be 1,000 people or 200 people, but those would be exceptions. It may happen. Just because opportunities this might generate. I mean, prices went crazy because all of the companies -- 80% of all those companies with people -- over 400 people who are already contacted and we hooked up with some of the companies. We did sell through private equities whereby those private equities went into the capital or became majority stakeholders at times up to 80%, but usually 40%. And it is very difficult to talk with those companies because their timelines -- to sell out within 4 to 5 years. And there's a lot of buildup among those companies. Little synergies between different companies and the EBIT are totally customized at 3 to 5 points with multiples on the EBIT. With additional points being added with the tool ranging from 12 to 15 points. So this is a dilutive process here. This becomes very dangerous and dilutive to Alten because this will require a lot of unraveling and restructuring. We witnessed a few operations, which I would not mention. That occurred in France, for example, in our sector, really crazy prices levels -- crazy levels. We're not going to get involved in those, and we are going to keep hoping finding companies with 300 to 400 -- 700 people, I'm sorry -- that are still within the founder's hands, there are very few of those companies. And it's very difficult to identify those companies. We identified some of them in Eastern Europe and Asia, and that's where possible operations might be taking place, such as the ones you can see here for a software company in the United States, Canada. In Poland, we consolidated our presence in Warsaw because we were present in other cities with a company with 350 consultants. Another company for the development of engineering activities in India working a lot for the United States and Europe offshore. A small company in Spain and in Japan, a companies with 720 people consolidated -- consolidating the 600 people we already had. So we have over 1,300 in Japan, and we'd like to reach 2,000 quite fast, quite soon. Of course, there is an interesting potential. So we bought out EUR 94 million worth of revenues and 1,800 consultants. The ratio here -- the consultant ratio is less than what we have for the group because there is a company in Poland and another company in India. So we were hoping to reach [ EUR 3 billion. ] We are behind and I hope that we will manage with the disruption that might have -- seem not favorable with quiet times in 2024. So with companies with similar growth, some results which are not going as fast to find more targets. Unfortunately, it has not been the case. The M&A market and private and with financials is very active with a lot of enthusiasm for this activity sector, we have declined 3 [indiscernible] 1 in Germany, another 1 in the U.S., et cetera and the multiples were above [ 15 ] with EBITDA that we're customized. So it's become a little bit difficult and which is disappointing more than the other aspect, the revenue growth or the maintaining of the EBITDA. So this really is a point that is more of a problem. But I'm hopeful that we will be able to make more progress for over 2,500 people for 2024 and we hope to reach more than 3,500. That's the M&A policy. Now regarding the breakdown for the shareholders, before Bruno comes in and comments, the results more in detail. This hasn't changed since about 10 years, I believe. I did announce before COVID in 2019, that I was going to give away 5% for charities, but I did not do it because the share was not high enough. And there is still an important margin for progression. So I prefer to do it then. So I'll now give the floor to Bruno, he is going to comment more in detail the annual results for 2023.

As usual, I will start the presentation to show you the slide that shows our progression of our revenue and the headcount for the group, as you can see, plus 80% over 5 years with almost -- with more than EUR 4 billion of income. We started the year 2023 with 53,000 collaborators, 40,000 -- more than 40,000 engineers after the -- and then at the end of 2023 we have [ 57 ] collaborators. Most of them engineers with -- or maybe a more feeble progression than the previous years, but truly, this is a result of an organic growth plus 2,700 engineers, 700 in France. The rest of them outside of France, an organic growth despite a slow context, there is a sequence growth of our head count, which is a good performance to be noted. We also integrated 14 [Technical Difficulty].

Yes, we have lost our speaker Mr. Benoliel. Benoliel, yes, we can hear you again.

So M&A in that with more 15 engineers because of transfers and acquisitions. Okay, next slide then. As you can see, organic growth remains sustainable. This year, 9%, with a slowdown compared to 2022, which had been anticipated since announcing the year -- the end of last year, this was materialized later on, later than we had anticipated first semester. We had an organic growth 11.4%. And it went down to 7.6% for the second quarter. The growth dynamic is different depending on geographies. And this is the next slide. But overall, in France, France resisted pretty well with a growth -- a progression of 10.2% organic growth and overall, the rest of the world was 8.74% -- because of the exchange rate effect. Now if we look at geographies, I will try to do this in a [indiscernible] way. Okay. This was commented last month already. But overall, France had a good performance and accelerated its growth even for the last quarter. Southern Europe and Benelux did not slow down and all the other areas, geographies speeded up for the last semester. Now in France, we had 2 days less -- working days than the year before. The activity still progressed a lot, mainly because of the automotive, defense and cybersecurity areas. In the area of Spain and Portugal -- okay, 18% to minus 4% for the last quarter. Hence, an annual growth of 5% in Germany, that was Germany. Now the -- so some were surprised by the growth in U.K. Indeed, we have an organic growth below 10%, mainly because of the Methods company, an acquisition of last year representing 40% of the revenue which had a slight decrease in the last quarter. So that decreased the organic growth slightly. Now for the historical parameter, the growth is above 10% -- around 10% even though the main sectors, automotive mainly have gone down. In Italy, growth for the fourth year was about 25% progression in all the sectors. Benelux, the growth that is maintained at 15% going up in Belgium, but slowing down in the other countries. Scandinavia, the situation is about the same as in Germany for the same reasons, with an activity that went down or slowed down during the year, minus 4, minus 5 -- 5.4%. Now for Sweden and the equipment sector in Finland, each sector representing about 60% of the income in each country. Now in Eastern Europe, we have identical curve, it's satisfactory with a growth of 17%. In North America, growth has slowed down and especially, that was flat in the last quarter in the U.S., mainly the automotive, oil and gas that have slowed down. Also, in Canada, mainly the bank and finance, about 40% -- representing about 40% of the Canadian income. Finally, if we review our activities per zone in the Asia Pacific area, the growth is 3%. It was better for the second semester. I draw your attention to the fact that it has to consider the activities we had in Singapore, representing 12% of the Asia Pacific area and 3% in 2023 because of a number of oil and gas projects that were stopped and other projects that were stopped in the bank area. So if we look at the figures outside of Singapore, the growth of this region is 10% for this year, which is a figure you need to remember. Now China, representing 35% of the area has slowed down because of the telecom mainly, the automotive sector, about 30% of the income in China maintained its growth. India for local markets, 30% of the income, is growing by 12%, thanks to the automotive sector. And 2 countries, which are developing on a regular basis, Japan, 11% of the area has slowed down for the last quarter with a global growth of 30% thanks to electronics sector. And then South Korea, 10% of the area. Now next, if we look at the group results, with an operating margin that was already commented upon, 9.4% of the income for this year. We had anticipated in the last 2 years, a return on normal operating margins prior to COVID. In 2023 there was an unfavorable calendar effect with less working days, which had an effect on the margin. The activity rate back to the norm, 92%, so less -- a bit less than the year 2022, which had an effect on the margin. Now the margin per project have made progress throughout the year, thanks to the management of the productivity and the increase of the fees throughout the years. During the second semester, third quarter -- so overall, we were able to absorb, almost fully, all the over costs in France and also internationally, to support the development of the work packages. This is a good news, which means that the activities have not gone worse and contrary to what we had experienced in 2022 the production capacity has evolved in 2023. As was indicated, we had also reinforced a number of directorates, grouping some engineers. We have increased some investments for new IT systems, for example, or IS systems, a few exceptional costs also for new facilities but overall, the SG&A for 2023 and then the incidence of the M&A, of course, the integration of Method and other companies which were smaller, but had an impact on the group's margins and the M&A cost -- which helps us to understand how all of these elements that shows that it went from 11.1% to 9.4% of the sales revenues. Now first -- second semester of this year, it's quite rare actually. There was no big gaps between S1 and S2. So we've not seen an improvement in the operating margin. The margin has progressed from 9.2% to 9.6% of sales revenue, thanks to an improvement of the gross margin because of the increase of tariffs and the SG&A have gone down between the first and second semester. Now share -- this is, as you know, cash -- the share-based payments, EUR 32 million for this year. Fully aligned with the first semester, the nonrecurrent -- nonrecurring profit, EUR 32.3 million (sic) [ EUR 30.6 million ] this year, maybe a bit higher than what was expected but which can be explained as follows. More than half of this nonrecurring profit is due to M&A, EUR 13.4 million are bonuses as part of acquisitions, which are now part of the P&L. So we also have EUR 9.1 million of restructuring costs, mainly in Germany, Sweden and EUR 3 million for taxation and other costs. The financial results, and I will come back to that a bit later on, this is a separate slide. The tax -- income tax expenses is about EUR 87 million, about 25% which means that our net results reached about 6% of our income, EUR 233 million for the net income, group share. Now the financial results, quite easy -- okay, this is the results which you need to look at EUR 4,068 million. The exchange rate results and other net financial expenses, mainly to depreciation or for earn-outs, as you know, we have to update the earn-outs. So that was quite a charge compensated by some interest for EUR 1 million so the financial results of EUR 0.2 million, with a saving of EUR 4 million. Now if we look at geographical areas, our results are as follows. In France, the operating profit -- okay, as you know, in France, we have a number of corporates with operating profit. So if we were to reuse these costs, the operating profit would be 9% in France and 9.7% for the rest of the world. In France, the decrease of the operating profit, 92% in France. Okay, the basics have improved. However, we have improved our RAS ratio with the global impact of [ 90 ] bps. Now the increase of the G&A, we have about 30 bps for France. Now internationally speaking -- globally speaking, the M&A impacted the margin of 30 bps, where we had dilutive acquisitions. The margin was also impacted by the reasons that we explained before. Overall, per parameter, we have 3 main -- we have 3 main region, North American -- North America, U.K., Germany, with a step back of less than 10% the APAC and Eastern Europe, about 10% of operating margin and Benelux and Southern Europe, above 10%. Nonrecurrent -- nonrecurring profit, mainly international. As you can see, and the financial income tax expense per geography is superior to France. Okay, quickly the next income statement by region, hardly any incidents, just to say here that this is not taking -- [sorry, the interpreter is not hearing here very well. I did not hear that, sorry.] Now regarding cash flow, we have an operating cash flow, representing 9.4% of the income which is normal. We had very little CapEx. We generated an important cash flow last year -- or this year, which helped to pay our income tax EUR 23 million in -- which is an exceptional income tax on the added value. We financed the financing of our [ BFR ] and our CapEx, which were low, 0.5% of our income, total income. Our free cash flow, EUR 146 million 3.5% of our total income. The free cash flow would have been EUR 183 million -- the financial investments were important in 2023. Out of the EUR 217 million -- EUR 226 million, a bit more than what you have here on this slide. We've seen some reimbursement of loans. So out of the EUR 226 million, EUR 121 million were for payments and EUR 105 million for earn-outs. So as you can see, this has gone down, total amount. Now the dividend, EUR 1.5 per share as to the net financial interest compensated by the negative exchange rate effect for non-euro currencies. So you see the other financials, low as of -- EUR 0.6 million with some exchange rate effects, which are negative. Now because of seasonality factors, a lot more important than usually between H1 and H2, the seasonality factor was actually impacted by the slowdown of the organic growth in H2 with working capital increase representing -- well, it's justified here because of our business -- because of the customer number is going up EUR 80 million on a like-for-like basis, EUR 50 million related to organic growth and EUR 1 million related to [indiscernible]. Now after 97 day parameter in June. So this is highly localized program in Germany, in Netherlands and France, Netherlands for economic reasons. Now the other entries here, I mean, variations are not that significant related to the business conditions. The CapEx, as I said already, representing 0.5% of turnover, lower than the normative level, which is 0.7% to 0.8%. So we got a free cash flow -- economic free cash flow, EUR 183.7 million, 4.7% of turnover. Free cash flow, which is going up by 23% compared to -- [I did not hear the word.] Now in summary. What can we remember from all this organic growth, which is quite satisfactory, 9% despite the slowdown which we had anticipated. The operating margin, which was also satisfactory, although we would have liked to be above this figure at the beginning of the year related -- and this is related to the event which we already talked about with some over investments but it is close to what it used to be before, COVID, it was penalized by the business rate, which went down, which was related to unfavorable timelines of the restructuring events. The organic growth, a slight increase of DSO, which generated working capital increase be that as -- [indiscernible] free cash flow -- economic free cash flow represented by -- representing 5% of turnover went up by 25% compared to last year. And finally, as the year at -- Alten self-finances organic external growth, dividends we now have a net debt position of EUR 300 million for external operations external growth operations for future years. Now I am available to answer any questions at the end of the presentation. I'm going to kick it over once again to Simon's going to talk about our growth strategy for forthcoming years.

Thank you, Bruno. Now in the aftermath of those figures that's actually, remember that Alten is experiencing somewhat of a interesting craving financial situation, a very good one actually and it would be proper and fitting within our strategy to really know how to use our cash more effectively, and this very healthy financial balance to carry out further investments. But on the other hand, sometimes we're going -- we're being criticized. We're not going to rush and work on those projects, although we got 2 to 3 major projects, and we're very cautious about those because we don't want to jeopardize our business. We're highly attached to our business model and our strategic consistency. The general challenge for forthcoming years and so far as the Alten plan is concerned is about as follows. We need to really reach a critical size in all of the countries in the flagship countries such as Germany, the United States, India or the U.K. or Japan, and really get close to 7,000 to 10,000 engineers as we were able to do so in France. Now this is the quantitative aspect, which is about our model. We need to stick to our model and our profitability structure. And number two, we need to really face up to the globalization of our customers' business about 60%. There's no longer a local business. It's becoming international, clients such as [indiscernible] some back, some major international operators are no longer turning to Alten as French company or Italian company or a Polish company or Swedish company but as a world's company -- as a global player. And as I said, it is right to place Alten among the privileged subcontracting short list because we got a local presence and footprint and the ability to develop offshore activities when necessary, in countries which we already mentioned, in which we have over 8,000 people with low cost and qualitative deliveries in Morocco, India, Romania and Mexico. Now having said that, the key to this is the size of the countries to be able to deploy our....

which we have over 8,000 people with low cost and qualitative [indiscernible] in Morocco, India, Romania and Mexico. Now having said that, the key to this is the size of the country, so to be able to or our HR model. And number two, the ability to deal with customers in an international way. Now to help country managers got had the BUs within Alten, we generated cost-cutting [indiscernible] to coordinate in commercial organization in all of those key countries in which we're going to be facing up to customers touching 5 to 6 different countries in a very unexpected way of hands. The HR organization, we need to mobilize our managers for them to be able to switch from 1 country to the other and export the model as well as to be able to work on major projects, especially in the United States. We set off some French people over there in Canada as well. The HR structure, we need to internationalize this and another point -- this is to consolidate our positioning, it is no longer to -- we should not import even highly packaged resources. I'm sorry, the interpreter then I hear the first part of the sentence. As you may have already seen and so far as quality and margins. We are really one of the top players in engineering really represents over 60% and on the profit mode of the deployment of our technical management on an international level. And we actually almost finalized this, we're now integrating into and we're coordinating everything. But this is not surprise. So we also need to couple our technical abilities with very clear offers. Clients no longer want to fit out in as a company being able to carry out a profit with the 100 or 200 people in technical matters. They also want expertise on issues starting to stop capitalizing on because they can actually find it with a subcontractor. Now this entails an organization with very specific skills based on office. We identified about 12 different offers, whether a technical office or whether we're talking about sectoral office will set up in teams of exports. Now of course, all those different costs, HR coordination, international coordination, commercial coordination, major accounts and cost-cutting structures, and we need to coordinate those offers on an international level, and we need to depreciate those costs and surpass 8% EBIT with the improvement of our margins until now, we showed this to be done. It would be possible and as was already explained, I think we saw December 2023 is based on other considerations or SG&A considerations. So this is our challenge to get into really top players and really be able to compete with a major place, such as [indiscernible], customers want us provided. We got this international visibility. And this is a challenge. Let's now go on to the next slide. The 70,000 consultants end of 2026, with the hope of M&A, as I said, [ 6,000 ] over 2 years. Now we should be able to be able to attain 70,000 engineers in December 2026 and maintain our margin beyond -- [Technical Difficulty]. Yes. Okay. No Okay. Perfect. So I'm sorry for the technical glitch. Now so much for our strategy. It's very clear, the commercial coordination, technical coordination, HR coordination. In critical size countries, and because of all those reasons, I'm very optimistic. We are probably going to be reaching our objectives end of 2026, so to really surpass the 70,000 consultants. Thank you for your attention. And Bruno and myself are now available to entertain any questions.

Okay. Can you hear me?

We can't hear you now, but we could hear you before. Mr. David.

Yes, this is fine. I have 3 questions. First one. Can you hear me?

Yes, go ahead.

Okay. Fine. Coming back to the automotive sector, especially in Germany, we saw the manufacturers putting a lot of pressure on prices, with restructuring plans, et cetera. What has been the impact? What should be the impact for Alten -- they also want to go to the nearshore. Is this an opportunity for you to increase your market shares and to show your capacities? This is a question regarding the short-term vision, but also midterm vision in this particular sector of the [indiscernible] question pertaining to the 2024 margin profit. What will be the main blocks to foresee a greater profit in 2024 between prices, the calendar effect and other elements? My last question pertaining to the free cash flow. Do you envisage to implement some processes or initiatives in order to increase the cash collection. You have a very healthy assessment, so it's not really an issue, but could this be seen as a way to value again our own EBIT and to be more comfortable in the future to do more M&A we could envisage that the increase will continue over time, maybe a bit higher than what we saw 4, 5 years ago.

Okay. Thanks for your question for the 3 questions, actually. Now regarding the automotive sector in Germany. You're right. If we look in details to what happened in Germany, we managed to maintain our level in a difficult context. But there was phenomena up and down, down of a -- decrease of our income. For Bosch and other equipment, and they suffered a lot. They stopped their investment in CapEx they're working mainly with applicative software systems, either systems. And they are positioning themselves on massive offshoring, which is not the case in France. This is very local and like France. So for the main manufacturers, Volkswagen, BMW, Porsche, Audi, et cetera. Something important is happening, which should be useful for us, I believe, which is similar to what happened in France, maybe some 6, 7 years ago. So at the moment, the pressure, financial pressure and the international competition and the well management make people think -- make they manufacture things and they want to offshore massively. They were very conservative in the past, which was rare, which was fine. They like to keep their engineers, and we like to be the same in front, but that was not the case, our 2/3 offshore, 1/3 local. Now in Germany, it's not how much in offshore, and we are expecting in the year '24, '25, '26 to see a relocation, an important relocation to offshore and mainly to India, a little bit in Romania. But Romania is not as attractive as it was before. I think they want to go a bit further away. So we must support this movement, and we start thinking that -- feeling that the main Indian company -- major Indian companies are now really targeting Germany more than they are France. So that's what's coming up in Germany. Now it's up to us to really take on the debt, which we have managed to succeed with the manufacturers in Germany and see what will happen elsewhere. So that's for the first part of your question. Now I'll let Bruno answer the other 2 questions regarding the 2024 profit and the free cash flow.

Now '24, the hypothesis is that we will have a superior profit to '23 -- but for the moment, we don't have a precise figure, it is only the beginning of the year. We will see how it goes throughout the year. If this will be the case or not, we will -- we want to remain very careful. Our growth was only 2.5%. So the additional growth will come from the sequence growth of the group activities. We have reinforced and strengthened a number of structures, transversal structures for the commercial and offer part, which will continue in 2024. So the schedule is more favorable this year than it was last year. So that should have a positive effect on our profit on average. We have a bit less than 2 working days, one in France and other areas, but not the more profitable ones, but 2 days less working days. So we are confident to improve our operating profit. So we've not been communicating on specific figures. We never really do this at the time of the year. We do this later on in the year, either at the end or the beginning of the second quarter or the end of the second quarter. Now regarding the free cash flow. Yes, you're right. Alten has got cash flow. That's the reason. While the incentive is favoring added value, creation of value and development and not necessarily cash flow collection. The issue is not so much to collect cash flow most of our main customers, clients, we don't have a lot of depth with them, and we do get cash in. We have clients who force us to have quarterly payments. Otherwise, you cannot be Tier 1. So we have service providers, which are not Tier 1. You should give me some names, even though I don't like to give, [indiscernible], we have in quarterly payments with these customers. We also have customers who are in the telecom field. They're asking for payments 180 days. Recently, we had 2 of those which does not necessarily explain such a high DSO. Unlike others, we don't have particular incentives as to the payment delays, et cetera, over time, which means which we could probably improve our DSO by a few days. Even though our DSO is superior to what it should be by a few days. Overall, we have very little loss, and as soon as it is invoiced, usually people issue the payments. So we're working on this. We launched an improvement initiative. This is a process which starts with the negotiation of the referencing or the orders, prefinancing or the financing of some packages, which can last several months or some of them for which we have little financing per package. And when it comes to the payment, the admin sector has to play their part as well. So that's it for this question. Any other question?

That was very clear. Thank you.

Now for the German automotive sector, the answer was very clear. From a vision point of view, now regarding the timing or the impact on the top line for Alten for 24 '25, should we consider as what same as what happened in France, even though you managed to see this offshore opportunity, there will still be an issue of average cost -- or is this rather a new business and additional new business compared to things you did not have before.

So it will obviously be visible in the growth of the income. Now in Germany, this is a new business opportunity really. Historically speaking, we are not as well present as we were in France, for example. So I don't think it will show -- it will show a decrease of our income. I think it will be more an arrival or a new opportunity. It will be seen as new opportunities, new business rather than decrease.

Now another question regarding Germany as well? Is there a risk to be overstocked in Germany because of what you've just been saying with the offshore relocation.

So part of the activity, as we saw in France, which will be relocated in other geographies, not just in India, but the additional business that will come on top of that of the existing business will be new opportunities for development and more market shares. Unlike German -- local German stakeholders, we are able to offer a local offer with German engineers with a capacity of offshore activities. And because we already have stopped there, there is a high turnover. And we won't be facing the situation in Germany. We will be able to adapt our resources accordingly. As you know, we have -- we are steering weekly contracts with some very specific indicators. The intercontract is always monitored with a maximum level that is acceptable -- so we have the necessary resources.

That was very clear. Thank you very much. .

[Operator Instructions] I think there is a question from Mr. Aditya Buddhavarapu. We can't hear the question. We're not hearing anyone. I think there might be an issue with the mic maybe. I don't know. I will give the floor to number one, a second person. I don't know who is this person. If you would like to introduce yourself, what is your name?

Can you hear me now?

Yes, we hear you.

Great -- just a few from my side. Can you firstly talk about what are you seeing in terms of the demand environment? What are you hearing from your clients in terms of the willingness to start new projects or spend, especially as you head into 2Q and the second half of the year? That's the first question. Second, can you talk about just on the margins. I know you said it's too early. But there were a few things last year, I think, which may not repeat this year. I think when -- on the -- on some previous calls, you talked about G&A costs, HR and sales investment going down in 2024. So could you just maybe talk about some of those maybe margin drivers for this year? And then finally, could you also maybe comment on the working day impact, if any, at all on 2024 in each quarter and maybe for the full year?

Aditya, I'm sorry, I didn't catch the last question.

The last one or?

Yes, the last one.

Yes, could you just talk for the working day impact on 2024 from 1Q, 2Q, 3Q and 4Q?

Okay. So regarding your first question, there is no major trend regarding clients a bit heavier compared with Q4 or even Q3 '23. They are still cautious. Still, we know that we will face difficulties at the banking sector, especially in France, but not only because of budget cuts. Well, the auto industry is expected to still perform well with some concern as we say in Germany, but also in Scandinavia, where also the work package business would probably increase for the same reasons, the civil aeronautics is doing well like [indiscernible] and Defense & Security. We have good news coming from customers. But all in all, we know that H1 will remain, I will say, similar to H2 last year, and we don't really expect a recovery, I mean, in terms of trend before H2 '24, which is pretty consistent with what our competitors are saying a good market. They saw exactly the same situation. Regarding G&A, HR, spendings, et cetera, it's true that they were above normal in '23. Of course, we have a plan to reduce those costs at least as a percentage of the revenue in '24, but it will depend, of course, of our work achievement in terms of revenue. This is why I confirm that we will do better, but I cannot tell you now to what extent. And it's much too early to say whether it would be 9.6%, 9.8%, it's not -- It's too early to say. Regarding now '24, compared with '23, we are expecting at group level to have minus 0.5% in Q1, plus 0.5% in Q2. As a result, it will be a new impact in H1. And then we will have in Q3 and Q4, 1.2 and 1.1 additional days in '24. So roughly, both today, as I said, in H2 and currently on a yearly basis, knowing that the impact when we have 2 more days, our geographies where the revenue per head is much lower than in Europe. So this will have an impact also regarding that incremental revenue coming from those additional days. Just to tell you in France, for example, we have 2 more days, and they are today, we will have one more day and the one more day is just in H2.

Got it. Just one follow-up, if I can ask. You mentioned that in India, one of your customers decided to in-house the work they're doing. So it took about 1,400 engineers. Are you seeing that happening with other customers or can you talk about why that product or customer decided to move that in-house?

No. This was really a special case where that customer was trying to lower and we say, of course, the cost -- so we decided to [indiscernible] part of the business and to subcontract to a partner, but it is a very, very low margin the rest of the business. This is why we decided to transfer the people has no cost for us. I mean nothing runs, say nothing, but we decided not to pursue due to the low margin expectations that customer was asking for. But we don't see that in -- we have no other example -- on the contrary, we see more customers willing to outsource more and more in.

We've got a question from Mr. Marcon.

Can you hear me?

Yes, we can.

Great. Okay. It was a challenging, but we made it. I got a few questions, France. Very nice year 2023, perhaps we take stock of what really worked well in France we really ensure a 2023 growth in France. Is that sustainable in 2024. Number two, with an going down the sequential one is one. Now is this generated an embedded figure for 2024? And what is your visibility in this model? Is there perhaps an extra effort to be made in the CNA surely bring them up at a normative level. Now the interpreted and I hear the word burn out, EUR 105 million earn out in 2023, but when having a look at the top shop are 266 million and EUR 21 million had already been out first H1 2023. I'm not -- I'm having a hard time to understand why you get [indiscernible] turn to current and you get a lot more in H2. Why is this map in H2 so significant versus what we had already experienced at H1 last the [indiscernible] 2.5 points, which you mentioned. Now about the rationale would be to have to start out with this embedded growth this is supposed to generate more growth in the beginning of the year than end of the year modular would you spend in at H2 embedded growth over -- so forth, the French business is concerned, the sectors that really were positive most -- while it was actually the aerospace defense sectors Sales the automotive sector, where we actually sped up the transformation process and we're better positioned among manufacturers, the OEMs actually suffer just like in Germany. No, not always -- so I'm sorry, but I did not hear. And finally, energy for cost went down with EPA programs. And when I was making a few comments on tie of the sectorial side or cite service-related services or sectors, bank finance and so on and so forth, really slowed down and slightly went down so much for those sectors that really pushed up the activity in France and so forth, embedded, we did not have a nice growth in H2. In other words, 2024 embedded is not really great. We'll have to can things in 2024. And in January is perhaps too early to talk conclusions. But basically, we're going to be conquering and evolve, now not on the basis of the embedded, 23' embedded, knowing that growth was better in H1 than H2. So mathematically speaking, this more details now embedded growth at the beginning of the year. It's lower than what it used to be at the beginning of the year 2023 be that as it may. Of course, 2.5% amount of growth throughout the year is mechanically higher in the beginning of the year than it is at the end of the year because we actually base ourselves on the average, so we'll be above the 2.5% in terms of organic growth. I mean, that makes sense. But as I was Eric [indiscernible] was saying, the embedded growth of the year, 2.5% for list for sequential growth at the beginning of the year. to reach an acceptable and satisfactory growth objective. Now let's get back to the question or answer the question regarding the dynamics. The France growth 2023, [indiscernible] responded . Now the rates were reaching in 2020, we are not going to be reaching them in 2024, although the makes a good and the sectors which [indiscernible] mentioned, but we're not going to keep generating 30% on RO or 25% in 2024 after having retained those levels in 2023. The growth rates, no, are not going to be attainable in those sectors. Now and so forth, the financial aspect, G&A Well, we did less than in H2. We're going to be embedding them in 2024. with the objective of improving what we generated in H2 and do it in 2024. This is a daily work now earn-outs payments were made in H2, and there was some quite a time [indiscernible] because we negotiated with our sellers because earn-outs are calculated on the basis of EBIT that are subject to adjustment subject to negotiations on an agreement protocol signed by both parties. Now indeed, the earnout in 2023, which is more important than what we had in previous years. Now just to create a printer, we had EUR 160 million or EUR 165 million of earn-out at the end 2022, we actually now got 10 -- I'm sorry, EUR 46 million end of 2023. So we realized that proportionally speaking, it went down quite significantly.

Okay. We know this is core. But can you give us the breakdown of the EUR 45 million figure because this is info something we only have in the annual report.

Well, that's not really that hard. There should be 1 million of current or 0.8 million and the rest I did not hear interpreted here of the sound and muffled. 46.2 million is -- that's the total figure.

Okay. Thank you very much $40 million are going to be used to pay $40 million is going to be used to pay in Q1. And we're going to have to pay it in Q1.

We got another question from Mr.

Can you hear me? Okay. I had 3 points, which I wanted to get back to. Now let's -- let's talk about the automotive subcontractors almost of 18% of the revenues at the group level can we have perhaps the mix between manufacturers and subcontractors. And is there a risk in Germany, perhaps in other sectors. I also have some feedback on one client [indiscernible] express what they talked about their future spendings in R&D, this is quite a source of concern, but we have at on the size of the client. That's the first one. Number two, we did not talk about AI. Now the discussions you have on AI with your customers, what is the result? Is there a risk of reinsourcing because of AI? And finally, the third point with respect to the offshore process in the automotive sector, most especially, could that make it possible for some Indian companies to take part in bits for thender more so and perhaps put some price pressure -- additional price pressure and perhaps structure some new contracts as a result.

Now for -- and so far, the since my I would have said 3.5% in the tier one. So we're talking about OEMs here more than anything else. And as a matter of fact, with OEM and Tier 1, I mean, this was mostly in Germany, and that's where we suffered more in German and 50-50 between Tier 1 and OEM in Germany. This is how [indiscernible] really heard Germany and we had to really create some more pressure, exert and more pressure on manufacturers and makers. Now with respect to your question here, and so far as the Indians emerging, yes, they're ramping up and quite a lot in Germany. They're trying to take our markets and positions among major German manufacturers, and they're quite successful in this endeavor. One company carried out extraordinary performances in the software development for automotive makers, the [indiscernible] company. So we really are facing up to them systematically. They're referenced. And when I say that clients to be with European players and others, it doesn't mean that they're not but they're going to be setting Indian's side. No, no. And in a major market, we had to face 2 other major Indian entities in the U.S., centering in the U.K. in the Central in Germany, and we see them a lot and they're quite across and forceful on M&As in Germany. They really [indiscernible] their prices up in M&As in the automotive sector in Germany. Among OEMs. Why? Because what do they want? They want to buy the references. And local resorption entity local resources as unable to manage it really transfer everything back to India. So of course, to answer your question, yes, we need to really cope with them. But we're not concerned because if we are able to come up with a good response, sometimes -- well, our message is actually more positive. And so far as tier 1s and most especially for Asia, we're not that present, I believe, for 3% turnover. Now if this is a more interest on our side than what happened among Bosch or others in Germany.

AI artificial intelligence and the discussions in customers that are now using artificial intelligence. I believe that this is an early stage still, but in the medium term, in the next 5 years, the use for productivity gains among customers, could this jeopardize the outsourcing rate of R&D.

Now as usual, technological evolution. -- we saw -- we put the others in the last 5 years, never actually generated a lower I'm sorry, then I hear the word. I just change the nature of need and the type of services, for example, with a based on methods in the isomers, for example, with [indiscernible] and the emergence of data setters and a whole gamut of other things in the years 2000. This does not prevent that we need to engineering outsourcing and maintain -- Sorry to not hear. demand and go down. This is not the issue, will often be able to cope with the need. This is the issue at hand. And we have 2 ways of effects actually reacting to this. Yes, we will need to change our work methods and this perhaps Well, the software development process actually time will go down, but there are quite a number of other needs that we'll actually pop up here and there. I'm not concerned. We need to be coping with the new needs that will be emerging as a result. We're talking about all those different budgets, which major companies were spending few dollars here and there. investing in generative AI. Those budgets -- well, there are 3 ways of coping with those budgets. Number 1 budget, in other words, train people that are going to be working on those issues with generative AI. They need to be cognizant of those new methods and tools -- now if you consider a company that want to train 100,000 people in India or elsewhere and EUR 5,000 per person and delivery centers. Now all you got to do is do the calculus. This is going to be costing EUR 500 million? Yes, This is going to cost EUR 500 million in EUR 200,000, this is going to be costing EUR 1 billion. So we'll also have to train quite a number of people, and we evaluated the number 2,000 people and have updated them on existing projects. But as a matter of fact, in the other model people on a real senior average, age average is 30%. We recruited from people from major schools and those people don't really need to be trained. All they got to be -- all they need is experience and be more cognizant of our new projects and packages with offshore major engine companies. Now our investment and we really put our teams up to date -- will not be as important as the investments pay by ended companies, number one. The second investment we'll have to make is to convince our customers we are that we can develop that we are able to utilize the new jewels, and we already have demand and we already carry out projects either -- those are parts or tests, which customers are asking from us, and we'll have a lot more, and we'll also have to make those as training platforms to prove our customers that we are able to utilize those tools. Now this represents an investment, an important investment, which is going to really come with a price tag, not a very, very hot -- and we really -- all of our technical competencies on the table. And the third, which we're not going to do at Alten is we're going to be doing this with capacity. We're going to be developing our generated solutions or tools. Major companies again behaving as editors and publishers and have their own tools and pathway 2 major engine entities are gearing into that direction. So we're not going to necessarily be users of Microsoft accrual solutions we're just have their own offers -- we're going to be using and buying tools available on the market depending on what customers want. Because things might change from 1 customer to the other. And number two, we're going to be training our people. I don't know if I'm giving you a clear answer to the question, we'll have to work in this direction. We're not wholly that concerned. I mean this is not a major revolution.

The answer was very clear. Simon, perhaps of every last point here. Question with regards to the evolution here, the impact of the margins? That aerospace and defense will continue to develop further quicker than other sectors will there be a consequence on the mix and the margin profit mix.

So the answer is that it's not per sector, even though some sectors might be less profitable, but it's mainly per client actually. And in the aerospace sector, we have profits, which are not superior or inferior to other sectors. That was another question. So there will be no incidents on the profit. To answer that question.

There's another question from Mr. Blair.

Yes. Hello, can you hear me?

Yes, we do. I'm so sorry, I can't see you. It's not great yet, it's nice when -- you can see face to face. But during our last meeting, we -- there was a debate, a discussion about this, and we decided to have this as usual. But we saw so few people last time that we decided to go back to conference calls, but I think there was probably less than 15 people present -- maybe 15% to 20%. That's why we decided to go back to conference calls, but maybe a mix will be good.

Now 2 questions. First question. Acquisition, EUR 21 million, EUR 95 million of sales revenue with the amount to get to the acquisition price of those EUR 95 million.

Yes. But watch out, the figures which you mentioned do not pertain to acquisitions of 2024 or 2023, rather, it's also some earn-out periods over a period of 3 years, consecutive 3 years 23, like a major acquisition of 2021. So we're give you more detail about this. But the down payment. You don't talk about the amount.

Yes, exactly. Down payment is without the earnout. The earnout sometimes runs over 2 or 3 years. underlying the normative EBIT of the acquisitions, what will be the ratio?

Usually, we buy companies, we try we tried at least until 2021 to buy companies on a multiple of 8 or 6 for first payment and the equivalent of a multiple of for the earn-out part. Now we had to increase significantly of 10 -- multiple of 10%, 20%, 25% of earnout.

Thank you. Also, maybe a bit of a silly question now. Could we have a bit of granularity? I say silly because there are many regions which are also a different one to another.

Regarding the trend of salaries of the payroll of the teams, yes, in '21, '22, we had an explosion of turnover rate of the employees up to 33%, 34%. That was not homogeneous. This was mainly those who were between 2 to 5 years of experience, below 2 years. These are young people, we just joined our juniors. But after 5 years of experience, they were more cautious. So it was really people between 2 to 5 years of experience. So we implemented a new HR plan in 2022, '23 to retain people with an increase of salaries in a targeted way, especially for these people, those who had specialties and talents that we want people who wanted to keep at all costs. So we have reviewed this. And in 2023, there was a double effect with an investment of the plans which we had implemented in '22 and also the market, which come down a bit. So we went down to 30%, around 28% today, which is so high, high rate one over.

Yes, it's quite high, actually, very high.

Yes, the norm for Alten is between 25% to 27%. Less than 20% is and more than 30% is a concern. So our goal is to be between the 2, the engineers who are hiring 40% are juniors from schools coming out of the schools. They're around 25, 26 years old, and then the rest of them are people between 2 to 5 years of experience. Normally, they stay 4 years at Alten and we try to capture about 10% of the engineers who have 5 to 6 years of experience, who would be the more evolutive on to become head of project, project managers or experts within our Director of practices and offers. So that's only 10%. The rest of them is not so much simply because we can't pay them more. So we are slowing down the increase of these populations that have not been able to step up within Alten and that's the way it is.

So do they leave to go to our customers?

Yes. Often, they go there to find new outcomes.

What about the pay rises if we have an indicator that would be between young people who just left school, would they be paying more? Has it gone down a bit?

Or -- now if we look at '21, '22, '23, depending on the different levels of experience of the juniors, about 10%, 12%. We managed to catch up this with our customers, and this stabilized in 2023. So it was mainly in '21 and '22.

So it's no longer a topic for '24?

No. For '24, we will reach about 3%. When we will manage to ventilate this on the prices, on the costs and the productivity of our packages. -- our clients broke the ice before the goal was to decrease the daily tariff, but that was mainly for technical assistance. Now for projects, it's up to us really to have a good productivity and technical quality in order to have the best prices possible, and we managed to do that. So we were able to follow the market in terms of pay rises.

Last point, one -- one last point. Out of the -- regarding the pay rise, is there a trend to accelerating the salaries with offshore? I heard about a significant pay rise in Romania. I don't know about India.

Yes, in the offshore countries, mainly Romania, India, Morocco and Mexico as well in the U.S. Yes, of course. And also Portugal actually has been quite a bit of offshore. Yes, there is an increase of salaries, slightly more important, except for Romania which went much faster. But in the other countries, be it India, Morocco and Mexico. It was in the same level, same level than in the West. Romania is more of an issue. People who had targeted Romania now going to India.

One last question over the phone please identify who you are -- that will be our last question for today.

Yes, hello. Most of my points have been tackled already. Maybe one last thing. I did not quite understand the M&A pack, the visibility for S1, practically speaking, what kind of income are we talking about?

Okay. Overall, we are well ahead for at least 2,000 engineers for M&A with a bit less than EUR 20 million, sorry a bit less than -- Okay. One is an offshore company. so would be about a bit less than EUR 100 million of income revenue. I think we will stop now. So thank you all for taking part. Thank you for your questions. Win and I, as usual, are available even though there might have been questions, which were not raised here, please do not hesitate to come back to us. And I hope we've answered -- most of the questions answered the visibility, which you were expecting from us for 2024, 2025 and '26 in order to keep our targets. Thank you. Have a nice day and nice weekend. Thank you all. Bye-bye. [Statements in English on this transcript were Spoken by an interpreter present on the live call].