Bouygues SA (EN) Earnings Call Transcript & Summary

Good morning to one and all. Thank you for joining us for this Presentation of Bouygues Interim Results, First Half of '21-'22. I'd be presenting with Pascal Grange who will do the financial part of the presentation just after me, and after that we will take your questions with the 5 heads of our business segments and members of general management. Let's begin by giving you an update on the acquisition of Equans. On this slide, which is Page 4, we've mapped out the various milestones. First of all, the 12th of May, 2022, we signed the share purchase agreement. So far as we received the go ahead from the employee representative bodies of both Equans and Engie. The second milestone was on the 19th of July, when we received the green light from the European antitrust body to authorize us to acquire Equans, subject to Bouygues complying with its commitment to divest Colas Rail Belgium within a maximum of 9 months. The third milestone was when the CMA, the U.K.'s Competition and Markets Authority, which handed down the decision on the 19th of July, underlining that this transaction would potentially worsen competitive conditions concerning the current tender relating to catenary systems for the High Speed 2 railway line, HS2 as it's known, north of London. So this morning, we reached a further milestone with the CMA decision authorizing us to -- agreeing to test to the remedies we have put forward. Again, remedies aimed at correcting the anomalies they've identified. So they have a few weeks to answer -- give us feedback after testing these remedies with the various stakeholders. So on this slide, we've mentioned that the closing of the acquisition is still expected to be completed in the second half of 2022, bearing in mind that the final milestone is the U.K. antitrust body known as the CMA. The second acquisition is the -- a proposed acquisition is a proposed merger between TF1 and M6. On the 22nd of July, we received the report issued by the French competition authority's investigation teams. It should be pointed out that the final decision will be taken by the college of the antitrust authority and not the investigation teams. Investigation teams will put forward proposals which the college will accept or reject. The college being a sovereign institution. But the investigation team has raised a number of significant competition authorities, especially in relation to the advertising market. Clearly, if the remedies we've put forward to the investigation teams were to be accepted or will not be accepted, the project would not be longer be relevant. For the moment, we intend to not make any changes to original plan and we'll inform the authority within the next 3 weeks, around the 15th of August. At which time we will comment item-by-item the points raised by the investigation teams. Then we will meet with the college of the authority or the authority's board next September 5 and 6. Moving on to Page 6, the main figures, main highlights of our interim results. The first half of 2022 was marked by the start of the war in Ukraine. We actually presented our annual results the very day the war started in Ukraine. The first half was also marked by continued health care restrictions in China, which of course had considerable impact on global trade and the supply lines. There are also macroeconomic and geopolitical effects that are quite complex and difficult to anticipate. So in this somewhat peculiar environment with a much stronger inflationary trend that we've had in the last 30 years, we've nonetheless succeeded in publishing good results with EUR 18.5 million in sales. So our half year sales are up 6%, mainly thanks to Colas sales. Without, on a like-for-like basis, that increase would have been 3%. Our current operating profit was EUR 492 million, up EUR 21 million on the same period last year. Media and telecom both improved significantly and improved their operational profitability. However, profitability in the construction and service businesses has been impacted by Colas, but I'll come back to Colas a little bit later on. The current operating margin was stable during the period at 2.7%. Net profit attributable to the group was EUR 147 million. And this year includes EUR 44 million in nonrecurring expenses, essentially costs relating to the 2 proposed acquisitions or the merger of TF1 and M6. But when we compare this with the previous year, the net profit for the first half of last year included a EUR 219 million contribution from Alstom mainly due to the disposal of share. And once they've been sold, they can't be sold the second time. And of course, nonrecurring income from the sale of data centers for a total of EUR 80 million. Again, once they've been disposed once they can't be sold again. So that said, we are now confirming the outlook -- the group's outlook for 2022. Page 7 of the presentation, a few words about the funding of the Equans acquisition. On the 17th of May, we received a very good welcome from investors with EUR 6 billion syndicated loan, which is a clear evidence of the quality of our signature. 2 tranches, a EUR 1 billion tranche over a period of 7 years at 2.25%. Now we took out pre-hedging instruments as a result of which the actual economic cost for the group was slightly below 0.95%. The second tranche is over a 15-year period with a coupon at 3.25%. Again, thanks to these pre-hedging instruments that we acquired, the economic cost for the group was slightly below 1.9%. Now these bond issues are the first step in refinancing of the syndicated -- EUR 6 billion syndicated loan that we subscribed in December 2021 with a view to the acquisition of Equans. I should say in passing that Bouygues has an A3 rating with a stable outlook with -- that's Moody's. And the Standard & Poor's have us at A- with a negative CreditWatch. These ratings have been unchanged since the 10th of November, 2021. I now propose to have a look at our SE initiatives that we have taken in our various business segments. We have continued to work for the climate and biodiversity. And on this slide, we just have 5 examples of initiatives we've taken in each of our segments. Let's begin with Bouygues Construction on the left, which rolled out its BYSprong offering which involves energy renovation. This is our R&D Department of Bouygues Construction, which has come up with very -- and our solutions which converts energy losing buildings into active energy buildings, while industrial working methods. On the photograph, you'll see what we did at Longueau near Amiens, north of Paris, where 12 houses from 1960 were renovated. The second example is with Bouygues Immobilier. Bouygues Immobilier launched its more sustainable, more comfortable and more modular housing called Coeur de Vie. But also it's a concept called Jardin pour la Vie. This is a concept which we apply on all Bouygues Immobilier projects being designed in 2022. The idea is to bring the nature back into our cities. These gardens are systematically designed with environmentalists and with the landscape gardeners. In June, Colas dedicated its second biodiversity day to broader initiatives in favor of biodiversity. Since 2012, the group has set itself the target of doing something for biodiversity in each and every one of its gravel pits and quarries by 2030. As for TF1, TF1 at the Deauville Green Awards, TF1 won 8 prizes. This is thanks to a number of films and documentaries raising awareness about sustainable development. Another initiative is in Bouygues Telecom, where we have applied for SBTi approval for our climate targets at Bouygues Telecom. Let's now take a look at our review of operations, beginning with construction and services. As at end June 2022, the backlog for construction and services is EUR 35.1 billion, up 6% on the constant exchange rate. And not including main disposals and acquisitions, it's only up 1%. You can see on the orange bar that there's a consolidation at Colas. Order book there is up 25%, 14% on an equal scope and exchange rate basis, which means that there's good business on -- while, the road business is thriving both in France and the U.S. But this business is also driven by Colas Rail with significant contract signed such as the Metro in Cairo, Egypt, in Q1, then the extension of a renewal and modernization of the railway tracks in the U.K. for another 5 years. The order book stands at EUR 20.5 billion for Bouygues Construction. Good visibility for the future, slightly down compared to 30th June, 2021. That's because there's no major public works contract on this order book, the major tunnel or metro, we didn't sign anything in H1. But conversely, there's a hike in Bouygues Energy & Services order book. Order taking is buoyant there, up 7%, and that includes the regular business below EUR 100 million. These contracts are doing well. And when there are -- while, these contracts -- while, there's more competition, and the fact that we are drawing them means that we are very competitive. Now on Immobilier property, residential property is doing well. Demand is high. The office buildings there are sort of more -- are less active. That's true for residential. Of course, we -- the reservations are down because -- down 14% because we have fewer building permits. The stock is low, so that's why there's less demand. But also there's a lag in the sale in blocks of apartments that will be done in H2 rather than H1. All in all, Bouygues Immobilier's order book is up 12% compared to -- sorry, it's down 12% compared to June '21, but stable compared to December 2021. Let's look at the key figures for the construction and services business. That takes us to Slide 13. Revenue for construction was EUR 13.7 billion, up 7%, including 3% on an equal scope and exchange rate basis and that's mostly driven by Colas. Colas' revenue is up 17% with the 9% on an equal scope and exchange rate basis, basically because of its international business, but also because of the increase in the price of raw materials and energy. Bouygues Construction's revenue was stable, whereas Bouygues Immobilier was down 11%, that's because, as I said, there was less sales in residential. And the lackluster aspect of the office building business for H1 2021, there was a significant operation with SUEZ, and that's, of course, not there this year. Current operating profit for the Construction business was EUR 41 million. You have to remember that H1 is not significant because for Colas in North America, that's a period where there's no business. We only have losses then. And so the current operating profit in H1 is not representative of the profit or the income for the year. Current operating margin stands at 0.3%, down 0.3 percentage points for that period. If you zoom in on the various profit margins, Bouygues Construction current operating profit margin is 2.9% compared with 2.6% in H1 2021. The good performance of Bouygues Energy & Services is why we were able to grow there because that profit margin was 3.2% compared with 2.3% in H1 2021. Building and public works was stable at 2.8%. Regarding Bouygues Immobilier, in spite of the lower sales, costs were kept under control. And that's why current operating profit was in line with that of last year, standing at 1.8%. Let's take a closer look at Colas' current operating profit, because that stands at minus EUR 160 million for H1. Now there are explanations -- well, regarding -- comparing to H1 2021. In H1 2021, we had businesses, because of the weather -- favorable weather in Canada, early spring or late spring meant that business started early in 2021, which is a -- well, a less favorable basis of comparison for 2022. There was a distortion effect of inflation. Colas was not in a position to pass on the increased price of raw materials and energy to its customers. You have to remember that in the -- our costs include bitumen and gas. Gas is needed to heat up bitumen. And because the price of gas went up, that means our own costs went up and we were not able to pass that on -- that is not all of it to our customers. Revenue that was locked in as orders, some of that did not include the price hikes. Some of the price increases can be passed on, some partially and some are index linked. But the indexes do not always reflect the actual reality of prices. Then of course, when prices go up, this is dilutive on profit margin because the clauses -- the cost indexing clauses enable us to revise the cost but not the profit margin and so that mechanically goes down. And for bitumen, especially the bitumen business works on a ton basis. And if you have a fixed margin on the ton when the price of the ton goes up, if the margin remains stable, well, that means the -- well, if the profit remains stable, the profit -- the percentage goes down if the price goes up. And then in H1, we generate losses, especially in North America. And on top of that, the exchange rate is punishing because if the price -- if the dollar goes up and the losses go up, well, then this combines -- this compounds the phenomenon. Let's -- well, Grange will give you the details of TF1. So I will go over that quickly. TF1 had a good operational performance in H1. Revenue was up 5%, reaching EUR 1.2 billion. There were 2 factors that involved there, media and Newen Studios were involved in that growth. The advertising revenue was up 2%. But you may remember that we had in June 2021 the Euro Football Cup, which created more revenue. So the base of comparison is less favorable. Newen Studios acquired the studios in Spain and Germany and that made a difference to its production. And current operating profit stood at EUR 189 million in H1 and that's because we probably kept the programming costs down. As a result, profit -- current operating margin was 15.9% higher than what it was in H1 2021. On Page 16 now you have the outlook for TF1. The macroeconomic environment inflation, the Ukraine has not made much of an impact on the financial performance on H1. However, for the second half, we'll have to remain cautious and we will have to keep our costs under control there. Let's move on to Page 18 and that is Bouygues Telecom's performance. Now regarding the sales performance, that was the momentum to get going in H1. We have as many as 15 million contract customers, not including machine-to-machine, that's an additional 193,000 new customers from H1 compared to H2 2021. And FTTH has also gained new customers, 315,000 new customers in H1 and there were 143,000 in Q2. You have to see that the premises marketed by -- FTTH premises marketed was higher than expected. We expected 27 million marketed premises by end 2022. And at end June 2022, we actually reached that figure. In fact, we had 27.2 million premises marketed. The addition of the 6.2 million new premises, 60% were in what are known as the PIN areas where there's less competition, and that's good for us. Now let's move on to Page 19. We had good sales performance, but we also had good unit income -- average bills per unit. That is what you actually bill to our customers. That's doing well. As you can see on this slide, mobile ABPU was up EUR 0.2 over 1 year, reaching EUR 19.8, not including roaming. We're not able to recover on roaming because this -- as it was in pre-pandemic times. In the fixed business, ABPU was up EUR 1 to EUR 28.7. In parallel, the entering messages revenue, that's voice messages and text messages, that was down. The rates are regulated, but there are 2 reasons why for the downside. Well, the regulated price was down and then there are -- there's increased uses of OTT apps, which do not generate any incoming income -- incoming revenue. But in any case, that makes no difference to the P&L, because what -- there may be revenue generated from incoming services. But then this is offset by outgoing expenses because when you receive a text message, you respond, and so it cancels out. Regarding the revenue of services, it was EUR 2.8 billion, up 3% over 1 year, less than expected. The overall revenue was up 5% for the period and that's mostly in the others line and that's the handsets business. Because costs were well kept under control, EBITDA after leases was up 9%. Mechanically, EBITDA after leases was 29.4% compared to 27.6% in H1 2021. Over the same period, capital expenditure was up EUR 115 million and that is in line with our investment, our CapEx strategy. Our annual objective was EUR 1.5 billion in capital expenditure. Disposals over the period were EUR 32 million and that is in line with the data centers compared to EUR 80 million in H1 2021. Next slide, that's Slide 20, move on to, well, a status report on 5G. Bouygues Telecom now has reached a new stage and that it signed a partnership -- a strategic partnership with Ericsson in June. And that means that we will be able to address a new core network, the standalone network. And that enables us to take -- to leverage the full benefits of 5G because we can bring together all the improvements of 5G, including those latency times that are reduced. And also, we can extend private mobile networks to companies and that's a bit technical. But it means we can address issues of criticality, security and performance using the benefits -- the gains on latency. Another aspect, in the spring, we launched the 5G Open Road project for mobility players, enabling to cars and vehicles to connect to each other, but to devices on the road that makes traffic more fluid in dense areas. In urban areas, we'll be looking at pedestrian safety. We're doing the carbon footprint of mobility, logistics of the last mile and using autonomous shuttle vehicles to reduce -- to control -- to regulate demand. Move on to Bouygues telephone's, well, other than financial objectives, we have -- we want to look more specifically. Instead of service revenue we look at revenue billed to the customer, so we restate this. We take out the incoming and outgoing tax message revenue. Now the services revenue, you have to remember whether incoming or outgoing -- well, incoming revenue is completely offset by outgoing charges. Whenever you receive an SMS, you use -- you respond and so incoming cancels that outgoing. In any case, we find that we expect revenue billed to the customer to be -- to grow 5% -- to increase by 5%. We've reached that objective. And so we've -- we do not -- we're not renewing that objective since it's been reached. Now because of its good half year performance of EBITDA after leases, Bouygues Telecom has revised upwards its annual growth rate to 8% for EBITDA compared to 7%. And we confirmed CapEx to EUR 1.5 billion. Now Pascal will give you details about the accounts. Thank you.

Thank you, Olivier. Good morning or good afternoon to you all. Just a few additional explanations on the accounts as of June 30. Concerning the income statement on Page 23, I'm not going to dwell on sales and current operating profit that have already been commented. Nonrecurring items are minus EUR 144 million, as explained -- or minus EUR 44 million, after a nonrecurring income of EUR 80 million last year. As Olivier explained, the amount at the end of June 2022 mainly includes expenses relating to the Equans acquisition or the proposed merger between TF1 and M6. Bouygues Telecom had nonrecurring income due to the data center disposals in this quarter 2 -- this half year I should say, but to a much lesser extent than in the first half of 2021. The net cost of debt or cost of net debt has been broadly speaking, stable between the 2 half years. Walking away down to the income statement, income tax was EUR 103 million, down from EUR 146 million in 2021. This calculation reveals an effective tax rate of 30% after 34% in 2021. This level of effective tax rate was because of losses abroad, which do not give rise to deferred taxes. The decrease of share of net profits of joint ventures between the end of June 2021, the end of June 2022 is due to the absence of any contribution from Alstom, which was EUR 219 million last year, just for the record. Overall, the net profit was -- of group share, that's EUR 147 million after EUR 408 million at the 30th of June last year. That's a decrease of EUR 261 million entirely due to nonrecurring income and losses and the absence of any contribution whatsoever from Alstom. Page 24, as you can see, the group's net debt at the end of June was EUR 3.705 billion after EUR 2.8 billion at the end of June 2021. Now the net debt ratio, gearing is still very low at 29%, even though it's up slightly by comparison with the end of June 2021. The next page, I'm going to talk to you about the change in net debt in the first half of the year; reminding you that the first half year is traditionally subject to the seasonality of our business. So Page 25. As I've said, our net debt totals EUR 3.7 billion or totaled EUR 3.7 billion at the end of June 2022, after net debt of EUR 941 million, and this same time last year, which was a record level. That variation over a 6-month period is explained as follows. Acquisitions for a total of EUR 172 million. This mainly includes the payment of EUR 130 million to Engie when we signed the share purchase agreement on the 12th of May last. This amount will be deducted from the amount to be paid to Engie at the date of closing of the deal. This also includes the buyback of TF1 shares, and of course the disposal of [indiscernible] to TF1 -- or at TF1. Buyback treasury shares for a total of EUR 104 million -- I'm sorry. Dividend payout at Bouygues mainly, but also the dividends paid to minority shareholders in TF1 and Colas, dividends for total of EUR 775 million. Variation in the value of swaps on interest rates that we acquired for the purchase of Equans totaled EUR 769 million -- the plus EUR 769 million and operations at a cost of EUR 2.48 billion, which I will explain in the next slide. At the end of June 2022, the adjusted fair value of these pre-hedging swaps was EUR 765 million after EUR 38 million at the end of December 2021 and EUR 429 million at the end of March 2022. Of course, this value fluctuates over time. On the 28th of July it was EUR 626 million, for example. So the fair value of the EUR 765 million in year-end swaps includes EUR 245 million in contingent swaps which have been engraved in marble since we issued our bonds on the 17th of May. Likewise, at this issue -- at the time of this issue, a EUR 42 million cash component was received for the swaps, which were not contingent swaps. Let's now look at the details in the change of -- this is Page 26, change in net debt, breakdown of operations. Net cash flow, including the payment of leases was over EUR 1 billion. So largely due to expenses paid for the Equans and TF1, M6 transactions. Net CapEx was EUR 1.064 billion, up EUR 264 million. This is a reflection -- mainly a reflection of the increase in investments made at Bouygues Telecom, in line with its Ambition 2026 plan. The change in operating working capital requirements and others was minus EUR 2.437 billion after a minus EUR 1.4 billion at the end of the first half 2021. This deterioration comes after 2 years of strong improvements in working capital requirements, as mentioned on numerous occasions over the last quarter. This change in WCR is quite logical, particularly in the first half, which was marked by Colas by an increase in the values of inventory, due to the increase in raw materials and trade receivables because of the substantial increase in sales during the quarter. That brings me to the end of my presentation of the financial statements. Thank you for your attention. And Olivier, I give you back the floor.

Okay. Let's wrap up this presentation with a review of the outlook for the group. You'll see here that this is based on information we have to date. And it excludes any further situation due to COVID-19 and does not include the acquisition of Equans or the merger between TF1 and M6. So once we factor all of these things out, in 2022, we expect a further increase in sales and current operating profit. In 2021, we received SBTi certification regarding our decarbonization targets. Well, in 2022, we aim to receive SBTi approval for the other segments. And given the macroeconomic changes and all the direct or indirect consequences this can have on our activities and results, we will be, as a result, very vigilant regarding any other changes. Now before moving on to questions and answers, let me remind you that our next communication will be for our results for the first 9 months of the year, which will take place on the 17th of November. This brings us to questions and answers, which we will take with all our senior managers.

[Operator Instructions] First question is from Mathieu Robilliard from Barclays.

I have a question concerning construction. In the first half year, a lot of provisions were written back. I was just wondering is there anything you'd like to tell us about this write-back of provisions and are we to expect anything in the second half year. Furthermore concerning the margin at Colas, I can see you're not giving us any guidance for 2022. But for the record, it was -- I think you were targeting 4% in 2023. But given the results of the first half year, do you feel that despite that the margin will be increased this year, will increase in 2022? I also have a question on telecommunication, good EBITDA growth. ARPU is also up, but EBITDA is up even better. I'd like to understand this increase in EBITDA. Could this be due to maybe better synergies, due to the acquisition made or will there be a substantial -- or was there a substantial contribution from other parts of the business?

I would explain this improvement in EBITDA. I'm going to ask Pascal to explain while Benoit is preparing the telecoms question.

The first question concerned the provisions in the construction business. Well, as you know traditionally, the provisions in construction have a number of explanations with -- particularly with the -- well the volume of provisions is high, fluctuations not so much. So there's no real phenomenon concerning how we provision for our construction activities in any of the 3 business, Colas, Bouygues Immobilier or Bouygues Construction, and so nothing unusual there. The second question concerns the guidance we gave regarding Colas for 2023. This is the 4% guidance we gave you. I'd like to stress the fact that there's nothing no real lesson to be learned from the first half year, except for the fact that the increase in sales, which isn't due to the volume effect, but due to inflation, actually dilutes margins. As Olivier Roussat explained inflation is compensated because we have an index formula or whatever. Obviously, this boosts our sales, but also our costs. But we're not increasing sales to increase or improve our margins. This is particularly notable in 2022. However, we haven't got the visibility we need to be able to tell you if this will have an impact on 2023. So it's too difficult to say. May be I should point out on this particular aspect that if you look at purchases consumed by Colas, we've increased from an average of 46% of sales to 52%, which is clear evidence of the fact that there's a sharp increase in the cost of raw materials. Benoit, if you'd like to answer that second question concerning Bouygues Telecom's EBITDA improvement and the reasons behind it?

Yes. Other revenue does not contribute significantly to our Bouygues Telecom's EBITDA. It's simply that we -- our costs have been well contained. Costs have increased slower than the sales. We've contained our costs very well. That's why our EBITDA has improved by over 8% at a time when sales only rose by 6%.

Next question Nicolas Cote-Colisson from HSBC.

My first question concerns construction deals concerns telecom. In construction, what about global demand for public works and infrastructure more generally speaking? The underlying question is; is your, positioning in more complex projects going to protect you against margin and volume effects? As for public works contracts, what about the impact of the increase in costs despite demand? And what we expect -- what proportion do you expect for PPP projects? Regarding telecoms, could you tell us a little bit more about your ability to increase your prices for new clients? How do you explain the slowdown in ABPU and mobile phones despite the fact that fixed ABPU is rising as the -- is this due to different timing in prices?

I'd just point out that prices have been increased in both cases, which is quite remarkable. But before talking about the increase, the first part of your -- first answer to your question will be from Pascal concerning market developments in construction.

Yes. Good afternoon. Regarding our markets and particularly the public works and public contracts market, yes, there is strong demand for large infrastructure projects, particularly in 2 areas: first of all transportation, particularly with large public transport infrastructure projects in a number of very large cities. The Greater Paris project, of course, Grand Paris, as it's called, but also in the U.K. with HS2, the high-speed line or Australians, Sydney and Melbourne, very, very large infrastructure projects where we're involved in construction but also involved in tendering. The second area is energy-related projects, low-carbon projects, nuclear projects, of course, as you know we're involved in the Hinkley Point project in the U.K. There are also tenders ongoing in France and elsewhere, for which we are the civil engineering partners for EDF. This is the EPO nuclear power plants. We're also involved in Sizewell C alongside EDF and other partners. So these are low-carbon projects in the nuclear sector are one thing. But there's also our wind power projects were involved in the offshore -- the Fecamp offshore that we built our first base camp of the 60 wind farms we're building. We're also working on projects in Asia and to a lesser extent, in France and the U.K. So the first type of business, low carbon energy projects and public transport. They are the 2 big areas. There are also projects emerging around maritime or coastline infrastructure or sometimes land extensions into the sea that were involved in other projects, the others in the pipeline. But so yes, a lot of demand for these projects throughout the world. Second part of the question, in terms of the share of PPP public/private partnerships, relatively, low proportion of PPP projects. They are handful out there, but it's very small. I think we have 3 concessions in the tender stage at the moment, but there's nothing else springs to mind in the public/private partnerships. Benoit -- concerning telecoms, concerning the increase in ABPU and telecoms?

Well, in recent years, we have -- we proposed what we call more for more. We offer additional services, additional data in mobile phones in exchange for a few euro cents. We will continue that more for more strategy. It's targeted by cohort at different times of the year as a result of which the increase in ABPU isn't always linear from one quarter to another. But it is regular over time, if you look at the growth of ABPU over the last year or 2. So there's constant growth, though sometimes it isn't always linear growth. So that's still the rationale. And we will pursue -- continue to pursue that. In fixed lines, it's a little sharper. Obviously, there is a seasonal effect. Sometimes, we have price increase campaigns in the course of the year. But in fixed lines, we also have the benefit over the long term of the penetration of fiber is at a higher price than ADSL. So when customers -- when customers finish their promotional period that's in year 2, the ABPU increases more substantially in fixed lines than in mobile. That will be -- continue to be our strategy. In particular, when you look at fixed lines, the ABPU of our competitors give us a reason to believe that we have some leeway. Next question?

The next question from Eric Ravary from CIC.

My name is Eric Ravary from CIC. I have 3 questions. One on Colas in its press release, Colas announces an action plan to address the rise in the price of raw materials. Just what is it about? On Energy & Services, we can see that profit margin was up in H1.

Can you -- sorry, you have to repeat your question.

Okay. We'd like to know about that. And then Equans, question #3, because of the reservation expressed by the antitrust British authorities, can you give us details about the closing -- you're talking about the closing in H1?

Sorry, we didn't get the beginning. On Bouygues Energy & Services.

Can you give us details on the potential profit margin having done well in H1?

All right. In CMA, the market authorities in July, they told us that the British authority told us there was a competitive impact on the HS2 line if we merged. So what we offered were remedies to address the weakened competition because of that, the British CMA will be publishing a press release this morning saying they have received our proposed remedies. They will test it out with various stakeholders. This is a call for bids. So there are not that many stakeholders. And so the response should come in before 28th September, 28 November. But that is the final stage because before we can conclude the Equans operation. And so we are confident that we will be able to complete that in H2. And I think that's what we said about this on the slides. That was a question about Equans. Frederic Gardes will address the question about Colas and then Pascal will tell you more about Bouygues Energy & Services. Pascal?

Yes. Well, on the -- can we pass on the increased cost of the customers? As things stand today, we need -- we only take contracts where there are clauses to revise prices. And unless there are exceptions decided at a higher level, we only take these revisable contracts. Likewise for private customers because, of course, if there are no clauses, to revise the prices, then, we have to find out the compensation. On the bitumen market, which is under pressure, thereon Bitumen worldwide bitumen strategy, which we started 2 years ago, is confidential because we will precisely be able to address a part of the problem. In particular, we've been investing in 2 bitumen ships that will be delivered early next year. And that means we will be able to seek bitumen at further field, where we can buy it at more competitive prices. So we need the logistics to do just that before -- until such time as we get these ships, we have been leasing smaller ships, and that enables us to address this to some extent.

And then, Pascal Minault.

Regarding the better profitability of Bouygues Energy & Services, this is because the markets have kept up. We were -- we had good profitability in France and U.K. and Italy and Canada. And we are very selective looking at dynamic markets. We keep our operational costs under control. And pricing is right, and that's the formula for good profitability in H1.

The Head of Bouygues Energy, Pierre Vanstoflegatte has started a plan to readdress the profit margins. And that -- well, he has an overall plan and action plan, which is also coming to attrition in terms of profit margins. And in fact, it's precisely because we've seen what we were able to do on that business, it is worth about EUR 4 billion, and we are able to increase the profit margins there. This now we're reaching about 5%. And that means that on the -- well, Equans, we're looking at EUR 12 billion. Well, hopefully, we should get the same or similar performance. And that means that when we are in a position to include these Energy & Services within Bouygues, the whole overall rate should be close to 5%.

And what is the revenue of Energy & Services?

About EUR 2 billion. Do you want an exact figure? EUR 1.9 billion. There you have it.

[Operator Instructions] Then we have Virginie Rousseau from ODDO.