Alten S.A. (ATE) Earnings Call Transcript & Summary

Hello, everyone. Thank you for being here for this conference to present the results of the first half of 2025. I hope I will be able to answer any question you may have to provide clarification on what to expect by the end of the year and our objectives for next year. As published last night, you saw that the results and the turnover was EUR 2.084 billion, down by 1.1%, but actually 5.6% organic. In terms of head count, you can see on the right, 51,340 employees engineers, that's about minus 1,500 engineers, which we also had in the second half of 2024, which was also difficult. We hope that H2 '24 and H1 '25 will be the end of this difficult circumstances we've been going through for more than a year. Ventilation of this organic decrease 5.6% was particularly important abroad but also in France, 6.2% organic internationally, including 0.3% ForEx, and 3.5%, in France, 3.8%. The industries that were most impacted were automotive, but also aviation, which also suffered last year, that was the main reason for the decrease in '24. Regarding the results, 7.3% of revenue, of turnover, minus 1% -- 1.1% compared to '24. But there was also a decrease of working days. If you compare the first half of '24 with '25, minus 1.3% of working days, which has an impact of 0.8% of EBITDA with the same calendar, minus 0.8% EBITDA, minus 0.3% like-for-like rather. With the reduction of the SG&A if you compare it with the decrease of revenue, which is very difficult to do, but we must do it, and a decrease of margins, which is rather low, mainly internationally, but not in France. We maintain the margins, but mainly due to the increase of the inter-contract and also an increase of the 6 days total. This is for the figures. On the last column, you can see that between December '24 (sic) [ '23 ] and today, we have had an increase of 1,300 engineers working on our projects, so productive headcount, but this must be compared with the acquisitions who led to about 2,000 FTEs. Overall, the situation is the same, if not better than 2 years ago, thanks to the M&A, which is not satisfactory, of course, because this leads to an organic decrease. And this over 2 semesters, led to a decrease of 1,500 project engineers, 1,500 in each half, total 3,000. Should or had this been a crisis like COVID in 2020 or subprime in 2008, we could accept this, and say it's over. The difference compared to those crisis is that we have less certainty on the fact that this is a temporary crisis due to external events. Is this a structural crisis? We can hope so because those costs seem to be stabilizing, but we'll have to wait until the end of the year to be sure of this. Of course, the political or geopolitical context are not going to help. If you compare with this map that you can see with the breakdown at international level, given that we have more or less stable headcount with the M&A, most geographies had similar variations, a slight drop in North America, in France, in the rest of Europe. Only Asia had some slight growth. We are speaking about engineers here, but the growth in Asia can also be interpreted by an increase in the offshore needs where we're using engineers in India, China and Vietnam for European projects. If this is calculated based on the turnover or number of projects, there might not be such an increase in Asia, and there would be less decrease in Europe. But overall, it's quite similar throughout the world. Regarding the breakdown of turnover per sector, as you can see, automotive suffered slightly more than other industries that are increasing like defense, security and naval. Aerospace has not increased. Defense was the one increasing in this end. Automotive decreased and IT services, which mainly impacts bank and finance in yellow. Public services and retail media slightly decreases, just like automotive. The other sectors such as energy, life science, industrial equipments, med tech, IoT and telecommunication more or less remain stable. On the next slide, you can see some comments that are much more detailed on what is happening for each of those markets. Automotive, of course, well, I'm not going to provide lots of details per sector, it would take too long, but just a general comment per sector. Automotive, there was a struggle not mainly due to the reduction of number of engineers, but mainly due to pressure to delocalize from most automotive stakeholders, be it in France, the U.S. or Germany. Nowadays, there's massive delocalization to low-cost countries. No automotive manufacturer considers themselves as a national entity, be it Daimler, Volkswagen, Stellantis, BMW or Renault, everybody is turning to low cost today. In addition, our partnerships needed to develop R&D in China. We will develop and grow, I believe, and you'll see this in next publications in China in order to provide support to Chinese and Western automotive manufacturers. We will continue to grow in India because we'll need more and more headcount for automotive, and unfortunately, we will have a massive strip down in Germany, a country that resisted more than France. Renault and Stellantis delocalized earlier, but right now, Germans are delocalizing massively low cost mainly to India. Rail has gained a lot of market share, especially Alstom, and things are stable. For civil aeronautics, one of our flagship activities, we suffered, and it's mainly due to aeronautics that we have most of the reduction of headcounts, more than 1,000 new engineers in '24. This decrease started to slow down in '25. And we are seeing interesting signs of new programs that should start in '26 and allow rather for very interesting growth in '26, but I won't be too optimistic given the current context. That being said, there are some encouraging signs emerging. In this era of stopping lots of projects over from '24 and '25, it looks like significant projects will start again in '26. Space is going pretty well. There are interesting projects, it's stable. For Defense and Security, given the budgets invested by states and the geopolitical context, there are very important needs. However, not everything can be captured by us. There are certain countries where we are not ready or habilitated like the U.S. So it's mainly in Europe, where Airbus Defense, Naval Group, where we have great growth in defense, which compensated with the civil aeronautics' struggles, and naval is also around military as well. So it impacts defense as well. Regarding energy, the acquisition of Worldgrid in December of '24 clearly starting to have an impact in '25 and it's making us a significant actor in EPR2 and also former EPR, when it comes to maintenance, so in terms of percentage, the participation share has increased both for organic and with the acquisition of Worldgrid, which gave us presence in energy in Spain and Germany way less than France. Life sciences, which is an important sector. Let me remind you that it's broken down into two main activities, studies, statistics, clinical studies and agreements with FDA, that one. And on the other end, what we call CRO, which are data analysts and statistics engineers with quality control and production optimization with all the constraints of productivity that relate to life sciences. This activity is stable, but it's currently suffering from new delocalizations because all the European stakeholders are starting to look into the U.S. where the price of drugs is way higher, sometimes 3x the price of France. So we are seeing a trend of medical research and biological research being transferred to the U.S. And as a result, since the U.S. have a lot of subcontractors in India for statistics and analysis, we must support this movement. So this is a warning. We'll have to support this in '26. About telecommunications. It's very flat. Most of the needs are over. We are now running existing activity and supervising networks, be it 5G or fiber that have already been installed. Finally, industrial equipments have helped us open an interesting door onto a sector that we had little footprint in, that is IoT. [indiscernible] has used different names depending on the application, but overall, IoT means control equipments for factories, Siemens, Schneider, Bosch. This also includes electrical grid rollouts, control of nuclear plants. We are starting to be interested in working in these equipments much more strongly, and we have significant partnerships with those stakeholders that I just mentioned. So we hope we will develop in those electronic industrial equipments. Let's move on to IT services, bank, finance, insurance. We struggled a lot since '23 and that continued in '24. It looks like it's starting to stabilize in '25. Our stakes in terms of referencing stakeholders slightly later than in the industry and engineering. The customers are starting to drastically reduce the list of their suppliers, the objective being, as always, to give them value and get them to delocalize to low-cost countries for the same time zone Portugal or Morocco for France, India or Eastern Europe for Germany, and just like automotive, we will be facing delocalizations that resisted quite well in Europe. In the U.S., it's been a long time, of course. Since India speaks English, this took place a while ago. For public sector, we're almost not present, which is a shame because it's a stable sector, and that could have helped us mitigate those two painful semesters. H2 '24, we lost 1,500 FTEs, H1 '25, another 1,500, and we hope this will be the end of the cycle, but it won't happen in the public sector, but we have almost no presence in this sector. Just a word on our investments in AI. To summarize, there are three types of projects that use AI. Everything around analytical capacities improvement, processing and usage of data in order to analyze research. At Alten for IT services, it's used for marketing studies, customer end market studies, but we also have market finance research, predictive maintenance for nuclear, space and aeronautics, where we use AI for more advanced analysis, but also forecasting for project management. Our subsidiary PMO, global leader. This AI won't lead to a reduction of cost. We won't be saving money minus 10%, 20% or 25%. But with the same head count, we will improve the quality of the analysis produced. This is very important. AI does not mean a decrease in terms of labor for AI analysis. For gen AI, automated generation of works that could be done by engineers or other types of employees, especially for software development, creating documents, maintenance documents, and also to create design mechanics parts. Overall, we consider after analyzing 3,000 projects that we have globally, with our customers really appreciate the work we're doing with them in this area, that this could lead to product activity increase by 5% to 15%. Thankfully, we're not very present in software. I was complaining about this over the past 5 years. But in this regard, we are less impacted, when it comes to automated creation of software because we are mainly present in system architecture and design. With like-to-like production, there will be a decrease in the number of engineers which accounts for 20% to 25% of our activity. But we should be cautious. We have gone through technological revolutions over the past few years -- over the past 30 years, object-oriented languages, computing power, big data, the Internet, access to global data, et cetera. And this never led to a decrease in the need for engineers. And I'm convinced that this decrease due to further efficiency, thanks to AI, will be compensated by new needs and demands on other topics or architectures, leading us to need other types of engineers, just like in the past. Finally, AI has much more impact on automation of certain tasks, where we're not very present, can be testing and testing automation for equipment and software, technical support, where we can automate. We can save up to 25%, and we could even go further when it comes to technical support on the phone. It can be up to 60% or 70%, but we are not present in this sector. This goes to show that there are three types of AI. We worked on all of our existing projects. We're working with our customers on new projects coming, about 15 people in average. It's rare that we have 100 or 200 people. We do not provide global services to our customers. We do R&D on specific projects about 15 people over 1.5 years. We are starting to integrate AI into all new projects, and we do this in partnership with our customers, and they are very happy with our approach. Of course, we are investing in a significant team. We have trained 20,000 of our engineers on all of those projects, and we are fully ready and aligned. Regarding external growth, except for the acquisition of Worldgrid in December '24, we are little disappointed with the difficulties we faced in '25. As you can see, we bought a small entity, which is in line with what I said earlier about life sciences, developing CRO and statistics data for life sciences, and that's it. So it's really at zero for '25. However, of course, there is the impact of the acquisition of two companies, Worldgrid and a Polish company that came with us end of '24. This has an impact on turnover. However, we did work a lot with the M&A teams. We have two teams, one in charge of America and Asia and another one in charge of Europe. And we have 20 ongoing negotiation cases and a significant part have already been signed as a letter of intent. And they will be under a due diligence study. It could be a good surprise from 3,000 to [ 500,000 ] FTEs depending on the due diligence and finalization of the case, which could happen in the second half of '25. In terms of number of FTEs, not turnover, because it needs to be divided by 3 in Asia, this is about 50% for Asia. Of course, the turnover depends in Asia, but this also includes Spain, France, North America, and we are also starting to be present -- upon request of certain clients, especially automotive, to have a presence in Latin America, Brazil, Colombia in order to provide support to Renault, Stellantis and Volkswagen and other customers. This is new as well, which means that overall, if we start the year at 51,500 engineers, in average, it could very well be that just through external growth, we could be above 50,000. And as you know, we always have well controlled prices at Alten. And if organic growth starts again, fingers crossed, we could hope we could get close to 60,000 FTEs by the end of the year. And if we reach 56,000, we'll be happy. This is for the trend at Alten. Regarding capital ventilation, nothing has changed. I've been telling you for three years, but I'm always surprised by events, but I want to sell 5% of my shares, of my 15% participation to charities, at least 5%, and I always get surprised by crisis, COVID, the war in Ukraine, and I will, hopefully, when the shares is back up. And now I'm giving the floor to Bruno who is going to detail the financial results.

Half of the erosion is due to the automotive sector, important to note. The headcount of the group went from 51,000 engineers in December 2024, including Worldgrid, which was included on the 31st of December, to [ 51,000 ] in June 2025. Without any integration of other companies because we haven't considered any other companies this semester, the headcount have come down by about 500 engineers in an organic way, 280 of them are from international level. Almost about 39,000 engineers outside of France at the end of June, and 11,850 in France. Alten has 1/3 of its revenue in foreign currencies, and it's been the case for about -- for a few semesters now in 22 different currencies. However, the foreign exchange was only 0.2%. The impact on the revenue was 0.9% related of 1.3 less working days than in 2024. The calendar should be better next year. Let me remind you that the automotive sector going down by 15% on a like-for-like basis has weighed down on the activity significantly. So to put it differently, on a like-for-like exchange rate and working days and beyond the automotive drop, which was very specific, it was only -- we only had a 2.5% negative growth organic for the group. Breakdown by geographies. We'd already communicated in July the revenues but let me give you a quick update on our activities in France and outside of France. In France, 4.3% down, 1 less working day in France, which has a 0.5% impact on growth, significantly penalized by automotive then down 24% year-on-year but only down 1% in sequential, which is important to mention because it means that there's a stabilization in terms of the automotive sector. Telecommunications were also impacted, bank as well, aeronautics as well, but stable. However, the defense and railways sector have remained quite dynamic. Iberia, Iberic growth is still positive, 5% up in the first half of the year, when it slowed down in the second quarter, a big cause of the slowdown in the automotive sector as well while the other sectors remained -- still had growth. Italy the activity continue to grow across the different sectors, but they've all slowed down. Germany a slowdown as well, 18%. Automotive sector accounts for 40% of the German revenue, and was heavily impacted, down 25%, down 15%. Manufacturers and also OEMs -- or Bosch said that they were going to reduce headcount by thousands in Germany. This is something that was published yesterday in the media. Civil aeronautics is down in Germany, which is not the case in France, while defense is significantly growing, up 50%, but it's still only represent 6% of the revenue in Germany. The U.K. now. Negative growth continued, down 12% over the semester, but it's stabilizing in the public sector, but automotive and the public sector, and the aeronautics is still very much down. Benelux, down 12%. Belgium, tertiary and automotive were heavily impacted while life sciences has gone back to a growth. Netherlands, the activity has continued to have negative growth because of energy and tertiary sectors, but it's stabilized for semiconductors. Eastern Europe, activity has slowed down but not as much. In the end of the first semester, Poland is back to growth, up 7%. Romania, activity has continued to have a negative growth because of automotive and tertiary sectors, Scandinavia down as well, 20% down for the semester for the same reasons as Germany, automotive and heavyweight. And tertiary in Finland and in Sweden are down. North America, down 6% because of the automotive sector, which has hit not only the U.S. but also Mexico. Canada is growing. Life sciences and tertiary activities are also slightly impacted. APAC, which accounts for 8% of Alten's revenue, has started to grow again in the second part of the semester, so only down 1.4% in the semester. China, which accounts for 33% of the area, is up 3% all the sectors, including automotive, except for telecommunications. India, which accounts for the 27% of the area is down 3% because of the tertiary sector. Japan is up significantly because Japan is 1/4 of our activity in Asia and is up 15%, thanks to the automotive sector this time. And we've lost a major client in the automotive sector in Korea, so down 25%, but it only accounts to 6% of the area, of the geography. So we still have a few geographies that are growing, Southern Europe and activity and the business is starting to be back to growth in APAC in the end of the semester and three areas, three geographies where we're still down, Germany, U.K. and Scandinavia, where business is still showing a negative growth. Operating margin for the first semester, it was largely anticipated. We'd already discussed it during our July call, and it was confirmed, the 7.3% were confirmed for operating margin. As Simon has just explained, it was heavily impacted by an unfavorable calendar, 0.9% growth, 1.3 working days less. It has had an impact on our margin. However, the drop in activities has led to more pressure on competition and our clients are looking for more efficiency, including in the automotive sector, which has gone -- which has made the dip gone -- go down for 30% -- bps. SG&A have gone up 10% in relative value. Let me also remind you that this includes social charges -- social fees in the U.K. and in France for 10 bps. So operating margin is down 110 bps, mainly for structural reasons. EUR 11.5 million in share-based payments, EUR 11.4 million. So for EUR 25 million given the plan that will be allocated at the end of October, but it will have very little impact on the 2025 results. There's a new line that we've included in our P&L, amortization of intangible assets related to acquisitions. Up until now, Alten was booking as a goodwill all of the intangible asset for small acquisitions, given the price paid for Worldgrid and the amount of the goodwill for intangible assets, applying IFRS -- sorry, we've proceeded to a price allocation to intangible assets on our order bookings and customers relations. You have as an appendix, the different elements. I'm not going to get into the details here, but the goodwill was split into two, EUR 144 million in pure goodwill, and there is purchase price allocation, which for the coming years, in the next 5 years for EUR 157 million is going to be EUR 12 million. Earn-out EUR 1 million. EUR 2.2 million contribution for acquisitions and a nonrecurring profit. Restructuring costs of EUR 7 million, EUR 4.4 million only for Germany. The second semester will need an envelope for restructuring, but it should not exceed the first part of the semester. It should be actually lower. The financial income will be detailed on the next slide, EUR 37.1 million income tax expense because of a 28% tax rate, 28.6%, and should be slightly lower than 28% for the full year. Let's focus on the financial income analysis outside of the IFRS 16 standards, that's not in the analysis. So minus EUR 3 million with interest on leasing contracts, other net financial income, and EUR 5 million are related to foreign exchange income, either in affiliates or accounts that are not in U.S. dollars. It's important to mention the ForEx income because the EUR 5 million -- the losses are not EUR 5.9 million. It's actually EUR 5 million that are only related to strategies of currency placements. If we include IFRS 16, the financial income is EUR 5.1 million. Now if we look at the geographies. The group's results can be analyzed in the following way. France, where the operating results should not include allocated tangible assets, 5.5% in operating results for the business, but the truth is it's actually 7.6% and it was 8% last year. Again, if we remove the non-allocated corporate cost, and if we include the fact that we had one less working day between first half of the year 2024, 2025, that leads to 40 bps and the increase of social charges for 20 bps and an improvement of the coverage ratio of SG&A, the operating margin in France has actually significantly improved. In France, the tax rate is 26%. Now outside of France, however, the operating margin has gone down 150 bps because a result of difficulties that we've encountered in several countries. Germany, Northern America and the Nordics, the difficulties in the automotive sector have related -- have led to significant difficulties in the operating margin between 0 and 3% in these three geographies. The U.K. despite the methods, company is still struggling to improve its operating profitability, now reaching 7%. Eastern Europe and APAC, operating profitability of the business is slightly below 10%, and Southern Europe and Benelux have operating margin higher than 10%. Outside of France, our effective tax rate is 29.4% and can be explained by deferred tax that we decided not to activate. The balance sheet of Alten, I'm not going to comment, it's the same from one year to the other or from one semester to the other. Just a few comments here. On non-current assets here, you have the -- an additional line. You had the goodwill, of course, related to IFRS 16. So now we've added an intangible line for EUR 147.11 million at the end of the first semester. No more earn outs because most of them were finalized in the first semester. They did -- do earn out at 1.21. As for our cash flow, it remains stable between the end of 2024 and June 2025, EUR 78.4 million this semester. It includes operating cash flow outside of IFRS 16 of EUR 140 million (sic) [ EUR 144.7 million ], which accounts to 6.9% of our revenue, slightly lower than our NOI. Paid taxes for EUR 49.11 million, slightly lower because of the loss in revenue this semester. Working capital variation is positive, but quite low for EUR 9 million because of seasonality, and CapEx, EUR 7.7 million, still low and accounts for 4.4 -- 0.4% of the revenue. How can we explain the variation in working capital? Well, client basis is up 9% because of the sequential DSO increase, 4 days between end of 2024. It was 89 days in June. The DSO is slightly better than June 2024 by 2 days because it had 95 days at the end of 2024. And despite an unfavorable variation in the country mix because the evolution of our revenue now leads us to developing countries where the DSO is structurally more high or higher. The U.S., Northern Europe, Germany, where it was lower structurally. And cash generation related to organic negative growth. Unfortunately, that's not good news, but no, it does generate cash, but it's for EUR 45 million. As far as expenses, EUR 16 million. This is also related to a Worldgrid that was consolidated in June 2024. Net social subsidies were -- have increased by EUR 38 million, and you also have the VAT impact. Net financial investments are almost exclusively related to earn-outs payment for the period for EUR 51.1 million out of the EUR 52.2 million as items and the other financial flows are related to the reduction in euros of the net cash flow in foreign currencies for companies of the group who have their balance sheet in foreign currencies, mainly dollars because it went down 15% compared to year-end. So the cash flow remains stable, is down EUR 275.5 million to EUR 275.91 million. You are used to it. I'm not going to get into the detail of the evolution of free cash flow compared to the first semester in 2024. On a like-for-like period in terms of seasonality, you can see that the free cash flow level has gone down because of ROA and a like-for-like basis, you can see that we're still generating 8% of our revenue in free cash flow. You have a recap here with a summary in the presentation. And to summarize, the key highlights of the first semester is that we've had a slowdown 5.6% on a like-for-like basis, and it's actually been continued also impacted by 1.3 fewer working days and the automotive sector was significantly impacted. So excluding the automotive decline, the contraction in the activity was limited to 2.5%, which is satisfactory, especially given the markets that we're on. Operating margin was impacted mainly by the calendar effect and a decline in gross margin in some geographies, also a lower coverage of SG&A costs. France has delivered a satisfactory performance while challenges were encountered in Germany, the Nordics and North America that have weighed down on the operating profitability. Self financing of all the earn-outs and dividends that have allowed Alten to maintain a stable cash position and a gearing around 12.6%. Visibility, as Simon has said, is still reduced for the second semester. However, if the economic environment is unchanged, we have not modified our guidance for the end of the year. We're still planning on having organic decline between 5.2% and 5.5% and operating margin around 8% to 8.1% of the revenue, that is related not only to an improvement of the activity in the second semester or an improvement of the operating margin, but only due to the seasonality of our business. Now a little bit about our CSR policy and if Simon wants to take this part of the presentation?

All right, you can do it.

Okay. The CSR policy of the group relies on three pillars; human, environment and innovation. As you can see on the slide, you have the detail here. But what you need to understand is that Alten wants to have this continuous improvement approach, and this has been recognized by most of rating agencies. We're around 1.2% of the best ranked companies in the sector in terms of performance, be it on the environmental, social or sustainable development elements. Our road map and successes for the first semester beyond the scores that we've achieved in the first half of the year which, again, are a recognition of the fact that we have the right policy and that is a continued success. We've had additional certifications with sustainable report -- sustainability report that was published in first semester, and that is aligned with the CSRD requirements, and that's identified the material challenges due -- following the analysis of our too much double materiality that was done last year. And our carbon trajectory is actually better than initially planned. We've reduced by 60% our greenhouse gases compared to 2019 already. So we're moving forward based on the trajectory that was validated last year by SBTi covering Scopes 1, 2 and 3 of the reduction plan. Our projects for 2025, you see them on the screen. In sustainability, a feminization plan, a transition plan and business life-cycle analysis. So we're planning on reducing our carbon footprint even more, and we have a road map for the next years that we're already rolling out. I'm giving back the floor to Simon for the growth strategy and development strategy for the coming years.

Thank you, Bruno. Now looking at our strategy for the coming year. Quick reminder, despite the break between 2024, 2025, because of crisis, we've doubled our headcount over 5-year period between 2019 and 2023. And we've also extended our presence in our international footprint. And on top of that, a lot of our clients in our top 50 has become international clients as well. What does this mean? Well, it entails organizational changes within the Alten Group, mainly based on three pillars, but also always related to size extension and international ventilation, which means that we need to continue to strengthen our training capacity and mobility of our middle management and executives. This is important, but it's one key for success as you can see on the first column. When you want to grow to develop Japan, Australia or the U.S., of course, you can do so with M&A, you can support existing clients such as what we're doing in China. But for that, you need to have the right management people to foster this growth, which is due to Alten's culture must be mainly organic growth. Acquisitions rarely generate management. It's mainly the size of the company that we acquired, only between 200 and 500 employee companies that have been developed by our founders by -- and they're limited in their capacity and in their skills. So after that, we need to also renew management across the countries. We also have an HR machine then in Europe, in France and in Germany and the U.K., that's part of our talent. We're recruiting 150 junior engineers, which -- who, after 3 years seniority become -- or even 2 years, become business managers. But for that, we need to have the critical size to be able to reach that in the different countries. So HR, human resources are a key element if we want to go beyond the 70,000 FTEs worldwide quickly. But for that, we also need a mobility policy and mobility at Alten is really low. It may sound -- it may come as a surprise, but it is one of the key drivers for success for the development and for the successful development. We can buy out companies. We could make 10,000 people acquisitions. There are a few on the market, but we're not interested in it. And it won't solve our HR issues. Secondly, we need to support our customers in their international development, in defense, aeronautics, automotive, life science, we mentioned it in the past, but even now in tertiary sectors or financial sectors such as bank, finance where we have clients that are cross-border clients, and to be able to successfully remain in the top list of the suppliers for these clients, top 5, we need to be able to showcase our capacity to be present at least across 4 or 5 key countries for them. I talked about Brazil, offshore in India, of course, Morocco, we're being asked to work in Senegal as well, or Eastern Europe, but also we need to have business in the U.S. and Canada, China or Japan for some clients. Now this is something new for the Alten Group as well. So we've implemented a structure, which we call the headcount department -- the key accounts department rather. It comes at a cost, but it ensures coordination of the top 120 key accounts focusing on the main -- the first 50 key accounts to have a global interface for all our clients and to have a client-based strategy, not only at a national scale, but also international scale for the main ones. This is a challenge because this is something that we didn't have before COVID, and it was implemented right after COVID. Now thirdly, we must capitalize on our knowledge, our know-how and our offers. Alten in its organization and based on its geographies because we have BUs by country is capitalizing and tapping into the different offers that we've been able to offer to our local clients in the different countries. If you're in France, working for Airbus, Thales or going to use the different offers available in one city, we should really tap into this to also tackle Boeing or other clients. And this is the case in a lot of different offers. So we're really working on this, and in the past few years, we've been creating a catalog of our capacity, and we are actually quite surprised, we have nuggets. We have incredible marvelous technological innovations in the group. And now what we need to do is we need to be able to use it at global level, global scale. And we've created a presales -- pre-sell structure to be able to deploy our different offers across different countries. Now for that, we need to find the right people, it comes at a cost, but the return on investment is going to be very significant. So you see this change from Alten with 20, 25 people to 50 or 55 is a different scenario, and we have to capitalize and change our sectorial offer. And we are training all our managers to what we call global sales and not just managers of their local business unit. Add to this the integration of all AI capacity that we've included in all projects with the AI management, a member of [ COMEX ], we used to manage a significant perimeter, has now a mission to roll out AI in all of our projects. Finally, I'll mention this. Organic growth will be an accelerator for us. If we find companies that are compatible with our business model, most were often taken over by private equities, who are now suffering because they thought it was an easy business, which it's not. So we need to identify companies that are free. In terms of their shareholders, we have new competition for M&A, which is the Indians who are trying to buy an entrance ticket in Europe, buying double the price, sometimes even 20x the price of companies where EBIT was already improved. So M&A is difficult these days. We will manage to do what I said earlier, that is 3,000 to 5,000 additional FTEs in '26, but I hope these will be complemented by a good organic growth. The strategy is to have critical size, both in Western or Asian countries, where the business must be at least 5,000 to 10,000 people like Japan, Germany, the U.S., China, et cetera, and also developing low-cost delivery centers, where we get more and more demand. That's about 10,000 people today. I think it will be up to 20,000 in the next three years, given the requests we're getting, but this will come with a global growth of the group. That's 1/3 of the turnover per FTE for a project locally done in West. We are investing in all these elements. We are very optimistic, the market is here. We're not worried about the market, but mainly our organization, and I hope you're convinced of this. Alten has all the assets to ensure the success and move to the next step. The 50,000 step is behind us, the 70,000 is ahead of us and I hope much more because this will be virtuous circle. I'm done with this presentation, and I suggest we can now answer any questions you may have. Thank you for your attention.

Well, I suggest we move to the Q&A session. The operator will ask the questions. I've received a few live, but we can start answering questions verbally. And if there's any left, we can also take written questions, some might overlap.

2 hands raised already. I'm going to give the floor to Nicolas David. Over to you.

Quick questions actually, the growth sequence in the second half. When you look at the guidance and seasonality with the number of working days, is it right to say that the third quarter year-on-year growth should be similar to the second quarter or less good before a potentially better fourth quarter? My second question about the U.K., an area where the growth is not only related to the market, it might be one of the few geographies where there might be a specific Alten issue. You have a precise -- it's negative growth rather. We have a plan. Could it be a quick solution? Or do you think it's going to be a lasting problem? With the current share price, are you considering a significant share buyback program?

Regarding what's happening, what will happen in the fourth quarter, what we expect is that with the fourth quarter, there's the phenomenon of August. So usually, the second quarter even if it's a good one, usually has an effect due to holidays. People usually take their holidays in July or August. So there is low production in the third quarter even when the context is good. On top of this, with a flat situation, but not as bad as the 2 previous quarters, we should have a slight decrease in production headcount for the third quarter, but we hope we will catch up in the fourth quarter. So we'd like to have a flat second semester with a low peak in August or September. That will be good news because it means that we would have stopped this downwards spiral in '24, and we can hope this is the end of this cycle. And this applies to all countries. In the U.K. this is not due to context, but to an acquisition. We had an earn-out with Methods, and it was a management disaster. The founders left, the managers were not great. and we didn't manage to quickly find a replacement. We hired a director a year ago, and it didn't work out. And I hope we found the right one this time. So it could be back up very quickly. It's about 600 people. But when they had 9 or 10 points of EBIT and now zero, it has a huge impact on the results of that country. It could turn around quickly if management is at the right level, and I hope it will be. But it's basically just a management issue. Finally, yes, Bruno is telling me you're not the only one asking this question. This is a question that everybody is asking me, including Bruno every morning. Why don't we take advantage of the decrease of the share? Alten is worth EUR 1.2 billion or EUR 3 billion, and we have hard equity of EUR 1 billion. So Alten is rich of EUR 1 billion after eliminating super values and intangible assets, which means that Alten's goodwill is assessed at EUR 1.3 billion. I would love to buy companies on this basis but unfortunately, it's impossible. That's how it is. I'm not worried at all. So why aren't we rushing to use these availabilities to do share buyback? I'm not saying we won't do it. But as you saw, we have M&A projects. And I hope we will find new ones with larger sizes potentially, not EUR 1 billion companies, but those availabilities. Instead of improving the value of our shares -- I'm a shareholder myself so I'm interested, which could help us earn 10% with the dilution very quickly. I would rather take some time to continue to observe, and that's the direct decision of the Board to see if we cannot have an interesting structural acquisition. Else, we would indeed consider a share buyback program if there's no better usage for a significant M&A. I hope my answer was clear That's where we are standing today. Just to complement and to answer the first question. Yes, there will be a Q3 that is similar to Q2 and Q4 should be better, mainly for base effects reasons.

Very clear. And about this, can we say that September is not as bad as July or not?

Yes. As I was saying earlier, it's flat. We are entering a stabilization period. On the organic and outside of M&A., the first half of '24 was flat after good growth in '23. The second half in '24 was a loss of 1,500 FTEs, same for the first half of '25. And for the second half in '25, a slight drop and a slight catch-up. So I hope it will be stable from July to December after a loss in August, which we hope we will catch up at the end, outside of M&A, just organic. There will be an impact of the calendar as well, minus 1.3 days of the first half compared to the first half of '24, which also had a calendar deficit compared to the first half of '23. So over 2 years, we lost 2.5 days of billable days between '23 and '25. We were penalized 2 years in a row. And if you look at the number of working days in '26 and '27, it will be the opposite. So you can do the simulation. Now we have a question from Laurent Daure.

I had a question. The first one, I would be interested in an update on Worldgrid now that you've integrated the company. And beyond just short-term performances, there has been comments on massive investments required by EDF in the nuclear area. What exposure do you think you would need for those massive investments in the next 5 to 10 years? Secondly, the return to a 10% margin. Just to understand the main drivers, we only need to stabilize revenue and continue to adjust costs? Or do you still need a recovery in volumes in order to get back to at least 10%? Finally, on automotive. I guess, by the end of the year, you should be at 15% or 16%. Based on the discussions you're having with the customers in this sector, by 18 to 24 months, do you think there's still a risk of a drop, not 5% but 25% to 30%? Or do you think we're close to a lowest peak, lowest point?

Regarding Worldgrid, we really bet on this, and this is why we paid for the company such a high price in December '24. We have visibility, which is rare for Alten. Almost over 20, possibly 30 years of a growing business that control, command and command interfaces for nuclear plants, so the new EPR 2. We did have some price when people were discussing to stop or continue or who's investing. The EUR 70 billion plan has been validated for EPR2. And one of the benefits of Worldgrid, which is unique, and there's no such thing in any of the Alten structures is that in general, for all of our customers, there are 5 to 10 referenced ones, 3 years. And for each business, 15 to 20 people is fighting against the 4 other reference entities. for 10 or 20 years. Sometimes you can lose due to prices or competitiveness or technical qualities, et cetera. In this case, there's about 20 industrialists who are positioned over 20 or 30 years to get those 12 nuclear plants quickly, EPR2s. The only risk is that if we are not competent, if we're not working well, we can be taken out, of course. But we are basically in a partnership. We are not in a competition for each micro project, which makes this company very valuable. And the growth should allow us to double the turnover for Control Command and for EPR 2s within 3 to 4 years. So that's interesting. As for the margins, they are pretty much similar to the alternative ones. So we are rather happy and optimistic regarding the turn of events and the consolidated budgets. Laurent, I don't know if you have more questions or ideas on what's happening with Worldgrid or if I correctly answered your question.

Yes. Just for control command, at the end of last year, how much was that, Worldgrid?