Bouygues SA (EN) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. We are very pleased to welcome you to this week's Capital Markets Day, which is dedicated to EQUANS. Today, for us, it's particularly important. EQUANS, as you saw this morning in the presentation, is a key milestone in the Bouygues development. It will strengthen our resilience. It will increase our potential for value creation. EQUANS give us an opportunity to enter this market, very exciting market, energy and services. Thanks to this acquisition, if we consider the merger with Bouygues Energy & Services, together totaling EUR 17.7 billion of sales in 2022. It's for us a huge opportunity. We knew this market has a huge growth potential. This is the main reason we were considering EQUANS acquisition in November 2021. Since this acquisition, a lot of things happened in the world. And finally, our belief has grown even stronger with the growing need for sustainable world, energy-efficient world, and for supporting a customer by this switch to a low carbon model. We undertook due diligence process and carefully analyzed countless documents to grasp the dynamics, the strengths, the weaknesses of EQUANS. 5 months after the closing, I can confirm that EQUANS is already bringing critical strengths to Bouygues. Alongside its skill management team, you will discover some of the managers this afternoon. We have a detailed plan. This plan is in place to make this integration a success, a success for all stakeholders, especially our employees, our customers and our shareholders. Today, we want to share with you EQUANS strategic positioning. We want to better understand what is EQUANS, where they work, what they do. We want to share with you our strategy to achieve our financial targets that I will show in a while. And we want to demonstrate you today that everything is in order that we are in the right place at the right time and that we are executing our ambition to be able to double Equans' margin by 2027. We are very enthusiastic about this acquisition, and our goal today is to let you come away with a clear idea of what we do and to give you the same confidence as we have about this amazing project. To be able to make it, today, the main speaker will be Pascal Grange, which is Deputy CEO of Bouygues and CFO. And this is an opportunity for us to introduce part of the EQUANS senior management team led by Jerome Stubler, President of EQUANS. He will share with you his vision and his ambition for EQUANS and some senior management from the EQUANS management team with Ana Giros, which is Executive Vice President of EQUANS in charge of Strategy, Development and CSR; and also CEO of BELUX Australia and New Zealand; Thomas Jung, which is EVP of EQUANS in charge of Operational Excellence, Innovation and Procurement; and Etienne Jacolin, which is Senior EVP, in charge of Finance, IT and Legal. After the short -- my short introduction, our idea is to share with you the content of EQUANS and the road map of what we plan to do in order we could achieve our financial targets. So Jerome will present EQUANS. He will present its strategic positioning, then Ana will describe EQUANS market environment and the macro trend on this market. Then Jerome will return to the floor to explain the ongoing integration plan. After this, Thomas and Etienne will detail EQUANS plan to achieve optimal performance and profitability for EQUANS. Pascal and myself will conclude with Equans' impact on the Bouygues Group. And finally, we will be very pleased to answer any questions you may have. Now I would like to emphasize a couple of important points. First of all, I would like to remind you that EQUANS is a very, very young company because -- it was formed by ENGIE, and it was composed of many entities who needed to be aggregated and consolidated. It was done in June 2022. Thanks to this consolidation, EQUANS is already a leader in Energy & Services business. This is a company which is positioned on critical market transition that will sustain growth. We discovered a management team, which is robust with a strategic vision which is perfectly aligned with Bouygues Vision. We need to merge Bouygues Energies and Services at EQUANS, and we know that the cultural roots based on service excellence and client satisfaction are shared by both entities. Within this company, we've got a potential to enhance operational excellence to enhance profitability and to enhance cash generation. All of this will help us to strengthen the group's resilience, and we will show you this during this afternoon. As I mentioned earlier, EQUANS complement Bouygues in many ways. I choose to highlight a few of them on the Page 7. Both company considers the people their top priority. Both companies consider that skill, expertise, determination, responsibility, mindset makes the key difference in people-intensive businesses. Both companies are committed to offer technical expertise, high value-added solution to their customer that span the entire value chain in their respective fields. This is how we win the loyalty of our customer. Last, we share a common vision of the right place where we want to be. And therefore, we focus on countries with long-term economic prospects, political stability and strengthen ethics. In the future, in the presentation, when I refer to EQUANS, please note that this is the combination of EQUANS and Energy & Services as Bouygues Energy & Services became beginning of this year, a subsidiary of EQUANS. Let's come back to the new structure of the group after the EQUANS acquisition. We have now 4 business segments, a business that we call construction made of Bouygues Construction, where we could find building and civil work. Bouygues Immobilier, Colas for the road construction; media with TF1; telecom with Bouygues Telecom; and Energy & Services represented by EQUANS, including Bouygues Energy & Services, as I mentioned earlier. Finally, if you look at the new structure of the group, on the left part of that slide, we show you that before the acquisition, 75% of our group were oriented to construction, only 10 points of this 75% was based on Energy & Services. And after the acquisition, we moved the center of gravity towards asset-light activities. And finally, 33% of the revenue will be based with Energy & Services. Finally, our portfolio of activities is very well balanced to diversified businesses developing the resilience of the group and out for a favorable position to provide solutions to the environmental challenge that we face now. On that slide, we show that we've got strong ambition for EQUANS, strong ambition we believe in, and we will demonstrate in the afternoon how we will achieve them. We want to double the COPA margin in 5 years and to convert as from 2023, 80% to 100% of COPA into cash between working capital requirements. When I say we want to double the COPA margin in 5 years, it means that we want to be at 5% in 2027. The management team of Bouygues and EQUANS are committed to reach this target together. We want this acquisition to be a complete success for our customers, for our employees and for our shareholders. Now it's my pleasure to welcome Jérôme in order, he will be able to show you a bit more about EQUANS. Jérôme, the floor is yours. [Presentation]

Thank you, Olivier. Good afternoon, and maybe good morning for some of you. I am Jérôme Stubler, I'm delighted to be with you to present EQUANS. I am an engineer by education. I was the Chairman of Vinci Construction, 7 years before joining EQUANS. I participate to the carve-out. And now I'm delighted to do the integration of [indiscernible] within Bouygues. I will make the introduction of the speech trying to present EQUANS, its resilience, how do we engage with our people, our CSA road map and then don't worry, we'll have a deep session on our performance plan. To start with, to start with, let's start by our mission. Our mission is quite simple. We are, in fact, contributing to the energy, the digital and the industrial transition. We are a technology integrator. And for that, we need to be technology agnostic. In terms of energy transition, what we deliver is quite simple. Our value is to decarbonize the energy chain, meaning that we -- in a world which is becoming a lot more difficult, if you think about it, the energy transition will be electrical from the creation of the energy, its transportation and its usage. In the industrial transition, we work in 2 elements. We are in the autonomization, the digitalization of the process to optimize production to optimize the process by themselves. And also, we are contributing to something which is happening at the scale, which is accelerating right now in Europe and North America which is the relocation of critical industry in biology, in pharmaceutical and in microelectronics. And for the digital transition, we are first a builder, a builder of fiber networks, a builder of data center with a key position in Europe. We are also [indiscernible] and a leader in the [indiscernible] of the lower level of the IT, which is IoT, what governs the mechanics and the IT. And we are also producing data, making more smart and intelligent at the level of the factory, the city or sometimes a grid. Regarding this, you can also represent what we do through the life cycle of the energy and the data. We are present in the production of the energy and the data. We are present on the transportation of the data and the energy, and we are present on the usage. And that's why you see a lot of the industry, which is reporting to this graph, which is a big part of what makes our resilience because we are working for almost all kinds of the industry, and I will come back on that. Regarding the figures, and those figures are the figures combined of what EQUANS plus Bouygues Energies and Services make EQUANS. And in the rest of my speech, when I will say EQUANS, it is a sum of the 2 company, which has been merged in the 4th of January, as explained by Olivier. Our sales are EUR 17.7 billion, we have nearly 90,000 employees and what make -- our resilience is the fact that 85% of our revenue is recurring. And I will detail how it is recurring in the next slide. Our position in the market is that we are clearly now leader in our market with a significant gap with the competition. So what brings the size? The size brings mainly 2 things. Number one, an ability to anticipate the need in terms of technology because sometimes we know a technology which is already somewhere in the world, and we have the capacity to interconnect our team and be in advance to another market. Second, the size brings us a procurement power that, of course, we're going to try to secure very quickly. This slide -- it's very important to understand because it's expressed in 1 page everything we do for our client. The first part of this wheel express the 6 expertise that we have in terms of design, installation and maintenance in 6 domains. The first 2 big ones, and it needs to be clearly understood, we are an [indiscernible] delivering 36% of our revenue in the total value chain of electricity from the transportation, the high-voltage, the medium voltage and the usage of electricity. And we are a HVAC company, HVAC meaning heating, ventilation and cooling. What makes, in fact, heating, cooling and all the air flow within the building. The combination of both of them is essential now because the change from gas fired to electricity is coming from that core competence that we can combine. The third element is mechanical and robotics. We are also present, and you will see through the examples, in deep process in what I call the [indiscernible]. Cooling, negative cooling and fire protection are the 2 next which are what we call critical services. Why critical services because when they fail, production fail, meaning and you will see that, that we need to be very close to our clients. And finally, technical facility management and digital businesses. Yes, it represents 18% and 7%. We are delivering EUR 1.3 billion of digital services to our clients. So we are also a digital company. The second level of the wheel is a client for who we work. 70% of what we do is delivered as a local business at a level of a building, at a level of a factory, at the level of a city, at the level of the interconnection between the city. The differentiation we make is coming from the density, the densification of our networks. We need to be [indiscernible] any of our clients. What guide our organization is, in fact, the regional organization, we need to be organized by country, by region, by city and some time for the big city by part of the city. We operate in all the components of the 6 specialties that we have. On the right, that's our specialty, which are representing 30% of what we do. There, the way we're organizing ourselves is linked to the way we create our differentiation. Our differentiation is coming from our [ hyper ] specialization. When you are, for example, in the transportation business, you don't have the same team to work on the installation of the metro and the system, which is used for high-speed train. It's 2 different technologies, 2 different teams, 2 different clients. So in fact, we mimic the way our clients are organized, and that's how we organize ourselves to create value. Regarding our brand, we have -- and it's another factor of differentiation, a powerful brand that we have been structuring in 3 levels: EQUANS, the global brand, which brings the strength of the company, which is meaning the equation of the answer to the [indiscernible] transition. Then we have local brands, local brands, which are powerful locally. They have a sense for our clients, which are Axima, Ineo, Bouygues Services, Icomera, Conti. And we have also a specialist brands, and those brands create a value which is [indiscernible] to the company, expressing a competence. We have created recently EQUANS Digital, EQUANS Nuclear. We have a brand called Powerlines, which is #1 in the U.K., in Austria, in Germany for high tension line and [indiscernible] And we have some brands like Pierre Guerin, which is in the top 3 players in processes for the pharmaceutical and biological industry. We recently created EQUANS data center from the merge with Bouygues Energies and Services to strengthen our presence by merging the 2 teams and EQUANS solar and storage from the same reason. In terms of geographical presence, our 2 big presents are Europe and North America. In Europe, even we are -- in fact, delivering more or less the entire scope of what we do in France, Belgium, Netherlands and Switzerland. We have also a strong presence in the U.K. as a leader of the 0 carbon solution. We have a significant position in North America, in the U.S. and Canada, which is good because with the Biden plan, we see a lot of investment coming there. So globally, 20 countries, which are working some time on export more in 50 countries, but the motto is simple. No dispersion. We want to concentrate ourselves in the country where we are. Impact is, in fact, our manifesto our performance and sustainability goal. That's in fact what we have been expressing between ourselves to demonstrate first of all, our aim. Our aim to do what? Deliver excellence in operations, deliver that with something which is [indiscernible] must have. Safety, ethics and Cyber are the first row of our goals. Second, clear goals for the planet, for people, for the communities, for the shareholders and the employees that I will be telling later. Now let's talk about our resilience -- the resilience of the model. Our residents are coming from 3 elements: a very vast portfolio of offer; quite complete geographical footprint; and thirdly, a vast series of customers with very long-term relationship. I will go through them. Going through first of all, to explain the portfolio of expertise, the 6 expertise we have, explaining each time a project in the domain where we are. Of course, I start by electricity. As I said, electricity is important, 36% of our sales and to show that just an explanation that we have the responsibility over the next 14 years to do the street lighting, the WiFi, all the system, which is going to bring street communication system in Washington this year. The purpose of this, of course, is to reduce the consumption of energy and to bring the smart city within Washington DC. We are good in electrical in North America and in Europe. Mechanical sorry, mechanical and robotics. We must sale mechanical and robotic in France, in Belgium and in the U.S. To illustrate that example, a project we have been delivering in 14 months which is a fully automatic plan to pack, store and distribute the food ration for the French troops, the French Army troops. In the process, 1000s of food ration per day automatically. To illustrate HVAC, I will go to an example with ASML. But before that, HVAC is absolutely a key differentiator to us. We are #1 by far in the critical HVAC in Europe, in nuclear, in all the clean room simply because we have a very important engineering capacity based not in France, which is [indiscernible] the top specialists as well as 1 in Brookvale and 1 in Rotterdam. We serve ICML, not really as a client but as a partner. ICML is a leader in the photo lithographic machine. I'm reading when I say photolithographic. It's not so easy to say. What do they do? They do the machines that you see on this screen, which are, in fact, printing the wafer of the microelectronics. That's the top level in terms of clean room. What we do is that we install their machine, we install all the pipe, which enters the machine, and we deliver turnkey, all the clean room for them. The next slide is on the cooling & fire protection, where for Eisberg, the client in Austria, we are delivering photovoltaic on their facade to power new type of heat pump using natural refrigerant to decarbonize also the system of heat pump using ammonia and carbon dioxide refrigerant. The next one, [indiscernible] facility management. For the facility management, we have a position which need to grow still, even if we have a very good position in the U.K. and in Canada. That's a contract we recently won for the University of Birmingham. What is important to understand is that the FM business, the [indiscernible] FM is changing. Why? Because our clients are asking us not only to maintain their equipment, but to switch their equipment to a new system, which is low carbon. And that's a huge opportunity when you are a multi-tech company, having competence in energy and you are positioned on the service business. [indiscernible], the Project Manager is going to explain what we do.

Here in Birmingham, improving infrastructure at the universities Student Village. We are operating in 3 areas. So firstly, building. So we're constructing 496 new, low-carbon student accommodation units, regeneration with the refurbishment of 746 existing rooms and the optimization and management of these facilities and this is through implementation of a 50-year facilities management and life cycle contracts. The efficiency of the use of energy resources is also further enhanced and this was through our decision to produce heat from 100% renewable sources, which is how student village allows us to illustrate the quality of support that we can provide to clients like the University of Birmingham and this is through a cutting-edge infrastructure and management, which is crucial to the energy transition.

Thank you. If we come back on the slide, please. Thank you. Yes. Thank you. So last example in terms of expertise is digital and ICT. For that, we have a project for which also at the far end of the [indiscernible] for Soitec, which is the world leader in silicon on insulator. We are installing a system automatization of their plant, fully digital from A to Z, which, in fact, make 5% to 7% gain on their productivity. [indiscernible], a technical leader, is going to explain what we do.

[Foreign language]

Thank you. Going to the second factor of diversification, which is our geographical footprint. I will focus on 6 areas. Number one, France. The map is clear. You can see the density of our networks with more than 6 [indiscernible] corresponding to the fact that, yes, we are [ then ] half an hour from any of our clients. It's a key factor of resilience. France. You understand that is a core of the engine in terms of the capacity to develop new technology in terms of pushing new solution. We are covering the entire chain of the value from design, installation and maintenance, EUR 6.8 billion, with more or less 83% of what we do, which are [indiscernible]. Our strengths are some very strong specialty such as clear room, nuclear, transportation, data center and recently very good position in Europe in Gigafactory. We are positioned in most of the fast-growing markets that Ana is going to explain in the next slide. In the U.K., we are positioned in 74 locations, 74 agencies. But in fact, we work in hundreds of locations, which are the premise of our client with 2 main business, 50% of what we do is [indiscernible] facility management, technical facility management, and 50% of what we do is low carbon transition of the building mainly for the public sector. What does that mean? It means that we install solar panels, we install heat pump, we install a system of insulation of the building to reduce the consumption and change the energy footprint of the building with a key position on that sector. Regarding USA and Canada, where we deliver a little less than EUR 2 billion with a strong capacity of growth, thanks to the Biden plan. We are in the U.S. organized in 5 type of activity. Electrical and HVAC in New York and New Jersey, clean room and pharmaceutical and electronics on the East Coast, which is good because we see a lot of reinvestment in that domain, there is a new investment in the U.S. to make an [indiscernible] in term of microelectronics; transportation infrastructure in Florida, serving the automotive industry around the Great lake, which is really good because there is a huge transformation right now of the change going to the electrical vehicle in North America. And of course, photovoltaic, where we are a player in Florida -- sorry, in the West Coast of the -- in California. In Canada, we are well positioned in RFM, building and Industry. Belgium and Luxembourg. That's, of course, our most dense position. We are a company which is coming from Electrabel and our company was doing everything for the industry, for Electrabel and the rest of the industry, meaning that it is difficult to find something that EQUANS Belgium is not able to do in Belgium. And in fact, this country has integrated itself a huge level of engineering, allowing to take project from A to Z. It is our second country in term of capacity to deliver everything after France. But what you need to understand is that we are 5x bigger than the second competitor in Belgium. In Switzerland, we present in the 26 cantons with 110 agency. And what is fantastic is that when you -- when we combine the position of EQUANS and Bouygues Energies and Services, which is, in fact, the ex Alpiq InTec, we have a very good combination geographically, which fits very well. We are present now in HVAC, in thermal energy, in electrical Services, delivering EUR 1.4 billion in Switzerland with more or less 65% of the market, which is recurring. In the Netherlands, we have also a very large presence, delivering EUR 1.2 billion of revenue. But what is very good in the Netherlands is that their model is advanced. What do I mean? I mean that the Netherlands have been deciding to get out of the gas quicker than the rest of Europe, which pushed some transformation in the energy chain. And so everything we see in the Netherlands are 4, 5, 6 years in advance to any country of the rest of Europe. It is fantastic for us because they are key technology in the energy transition in the industrial transition, microelectronics [ bev/food ], which are in advance by 5, 6 years that, of course irrigate knowledge. The third element, of course, is the vast and diverse customer base and the long-term relationship. To restate that, first of all, we are working for 4 main domains: 42% what we do is for building, office, school, university, hospital, shopping center, factory. But what is important to be understood is that a large part of what we do is for the renovation of those buildings. And the renovation is growing fast due to what? Due to the obsolescence of the building coming from the change of usage and the change of type of energy. When you renovate the building, sometimes you don't destroy the building, but you change the entire system, which is in it. Second, the cities 5% which is growing fast, thanks to the fact that people want to connect, protect, power infrastructure and citizens, that's what we call Smart City. And intercities, intercities, which is 70% of what we do in all the link which are coming from the grid reinforcement and the data network reinforcement. And finally, that's important to understand EQUANS, 36% of what we do is for the entire industry. We are very linked to the industry and the investment of the industry chain and their maintenance. 30,000 clients every year. Yes, we work every year for 35,000 clients with 1 million contracts signed a year. 70% of our contract are small, less than EUR 50,000. And 85% of what we do is recurring, 30% are in fact, long-term contract, maintenance long-term contract. 20% are framework elements that mean we sign the contract, which is a framework, and from that contract every year, we have a new work, which was given following the framework. And 35%, we don't have a long-term contract. We don't have a framework agreement, but the same client call us because we do the maintenance of their equipment, and they just call us because we are the people who know their installation. We have a robust backlog, which is sound in nature, the fact that it is bigger than the one we had at the same time last year and because the margin inside is higher. And the client of us we have NPS of 53, which is very high for our domain. Let's listen to our client or VIRTUS which for whom we have been building several data center in London. [Presentation]

So all that is possible simply due to the engagement of people. So now I'm going to explain why our people are our main asset. And what do we do to drive the success of the company is growth and its performance, which is totally linked to the capacity the ability to recruit more people, the ability to train them, the ability to motivate them. First of all, a picture, we have 90,000 employees. We recruit more or less 10,000 employees every year, and this is growing. We have a large investment in training, merging the 2 companies, we have 2,000 training program in 8 university and 85% of our employees are trained every year because our skills are quite technical and need a lot of training. And we heavily invest in apprenticeship, which is essential right now in Europe. In terms of commitment to our employees, first of all, we are very strict in making safety our top priority. Ethic and Cyber are 2 strongest most have. In terms of system, which are fully set and in terms of controlling the behavior, we invest in creating local employment with an important investment locally on local school and with the agency. And I can tell you, it works. Thirdly, it's very important to us that we work with all to have an equal opportunity. As an example, we have the ambition by 2026 to increase by 20%, the number of women in senior position within the company. And finally, to create the motivation, the engagement, you will see that we are engaged to share the fruit of the success of the company. Our plan is simple. Three words: attract, develop and care. The plan are local, tuned to the need of each of the 900 profit centers and very practical. And we also launched something which is absolutely important, which is the Compagnons de l'Energie Guildworkers. The Compagnons de l'Energie Guildworkers is in the continuity of the successful [indiscernible] of Bouygues Construction. And we have the ambition to have a powerful deal worker organized in our first 5 countries by 2026. The ambition is coming from the fact that we want to recognize our technician. We want them to transfer their knowledge from one generation to another, which is essential when the battle of talent is coming and to reach the excellence in operation. That's our Executive Committee coming from the merge of EQUANS and Bouygues Energy Services. I can tell you a strong team and before the team, experience people having led similar company in the past, having most of them an international expertise with a strong business transformation experience. The last part is our climate road map. First of all, starting with our own commitment for ourselves, our Scope 1 and 2. Our objective is to quantify our footprint, our taxonomy compliance, our waste strategy by 2023 in order to be able to sign a letter to SBTi at the end of the year. in order to be able to submit that in 2024. The 2 key drivers, which are representing 90% of our footprint 1 and 2 are car and building. For car, we are committed to have 30% of electrical cars by 2026 and 80% by 2031. And for the building, to have all our building by moving or changing our building, renovating our building to ABC consumption in class by 2031. Regarding our external scope 3A with our supplier and 3B with our clients. With our supplier, our commitment is to be able to have a footprint of the 3A scope by 2024. And to reduce by 30%, that's our plan, our footprint by 2030, working with the supply chain. Regarding the 3B, most of what we do is, in fact, decarbonizing our client. That's our job, which -- and is a key driver of the growth of the demand. What we want is to be more proactive in proposing low carbon solution to complete the offer and measure the quantity of projects for which we create by productivity, the project that we are offering. So I hope that this [indiscernible] give you a better understanding of who we are. Now Ana is going to explain the extensive opportunity which are in front of us. But with one key word, being selective. Ana, the floor is yours.

Thank you, Jérôme. Good afternoon, ladies and gentlemen. My name is Ana Giros. I joined EQUANS very recently. After 25 years in the industry, first, in the transport then in the environmental sectors, holding both first national and then large international positions. So joining EQUANS a few months ago, it is indeed very exciting. There are many great opportunities we have ahead of us. And what I would like to do now is to show you how this will allow us to drive the special word selectivity in sizable, fast-growing markets where we know we can create value. So turning to my first slide. On the left-hand side, you can see the projections of our traditional markets. It's in the range of 3% to 6% growth year-on-year. On the other side, you can see some examples of double-digit fast-growing markets where we are well positioned. Let me now take you through some very concrete examples to illustrate. So it doesn't need me to tell you that renewable energy production is ramping up very quickly and is taking over the energy mix. In respect of carbon objective, in Europe, the target is to reach 65% of renewable production by 2030. And you know we have the collective carbon neutrality goal by 2050. By then, it is widely predicted that fossil and gas produce energy will be almost nil. This fact, coupled with the increase of energy demand worldwide. The energy demand is projected to grow and to raise by 25% in 2030. All this is creating a huge acceleration of projects in the clean energy space. And this is EQUANS sweet spot. At EQUANS, we have strong and trusted partner in renewable energy market worldwide. As you can see, we already have installed more than 5.5 gigawatt capacity in solar. This is accounting for EUR 500 million of our sales. And in parallel to that, nuclear is consolidating as low carbon energy, and it's complementing well to renewable. In this sector, we have leading expertise. It accounts already for 350 million turnover, mainly in France and in Belgium. To support our customers, we intend to be involved in projects from the early beginning. And from the engineering phase, like this one that you have in the slide on the U.K., where we have signed a frame contract on engineering to deliver 11 solar park projects, 9 of which are already in execution. This 9 will account for 330-megawatt installed capacity and just to give you the idea of the size, this is enough renewable energies to power 70,000 homes across the U.K. Moving to the next slide. Changes in production of power, it generates direct originate adaptation needs in the grid infrastructure. And following the massive influx of renewable, with on top decentralized production, the problem is now how to be able to bring this green energy to the industries, to the cities and to the homes. And this, without doubt, is causing considerable congestion in the transmission and distribution networks all across many countries. In Europe, EQUANS has a large footprint and robust capabilities in the T&D sector. We have leading position supporting operators in France, in the U.K., in Netherlands and in the major countries. We are also building capabilities in data, especially in Chile, where the energy market is developing fast. Let me show you what happens in Germany because it's very illustrative of what is happening in other nearing countries. Where today, that is a strong re congestion due to the mismatch between the wind energy generation in the North and the strong demand of energy in the industry of the South. The Wahle-Mecklar project for our client, TenneT, is a good example. We are building part of the high-voltage line that will enable the German North South electrical connection. And with our 30 kilometers of our head powered lines, we are helping to increase the transition and the transmission capacity for wind energy all along the north and south exits of the country. So now moving to the mobility field. As you know, transport is clearly shifting to electrical vehicles, from scooters, from cars, from buses and now also electrical trucks. Everything is shifting to electricity. And this generates the need of EV infrastructure investments in cities, but also in main roads and all over the territories. Let me give you in this frame, 2 examples of areas where we work, where we see strong potential for growth. So example number one, it's the electrical vehicle charging infrastructure. We have a very good example in France because we have already installed 25,000 charging stations and 30% of which includes supervision, maintenance, digital services and even web application for support to payment. So we are truly delivering end-to-end solution to our customer in this field. The example number two, after the EV charging is the Gigafactories. Jérôme already mentioned where the industry is producing batteries for automotive market. And thanks to our commanding expertise in industrial processes, especially in the electric and the clean room design and build. At EQUANS, we are able to support this complex projects across Europe and now you will see across the U.S., too. The example I give you here is Douvrin. Douvrin is the first battery plant being built by ACC in France, and we are an EPC contractor for the clean room and the HVAC systems. As you know, battery industry is the key for the future of electrical vehicle market. And globally, we are present in 7 out of the 16 gigafactories under construction in Europe. And we are supporting Tier 1 developers like Envision and Northvolt. More recently, we have also entered the U.S. market with 3 projects that we are building for our client, General Motors. In the next slide, I want to mention some of the specific markets strongly linked to the decarbonization that have potential across all our geographies. So first, the electrical heat pumps. The electrical heat pump will replace the [indiscernible] gas boilers for residents and industries, and this market is projected to triple by 2030. Second, the acceleration of projects developed in the green hydrogen space, where this market is expected to quadruple in the coming 15 years, and this is even pessimistic projection as you see hydrogen is everywhere. In both cases, we have the right footprint and the expertise, and we already have solid projects under execution in Europe that showed tangible results in terms of performance, but also in terms of net reduction of CO2. So the example here is in the U.K. where housing association in Sunderland where the installation of ground source heat pump allowed to significantly improve the carbon footprint of 364 homes. Our client, Gentoo Housing Association, is delighted that is able to contribute to tackling climate change, and we see this type of projects accelerating in business but also in industry. Finally, let me touch on another key market for us, which has enormous potential. Let me talk about the digital transformation, which has been accelerating already for many years in homes, cities and industries. We are present in this market with EUR 1.5 billion sales in digital solutions and EUR 500 million in data centers is design, construction and also operation. There are many examples I could give you in this field, but one of my favorite ones is Marseille. In Marseille, we are using our expertise and specifically the 3D digital modeling, the technology called BIM, to be able to transform this historical building in a city center into a modern, iconic data center for our customer Interxion. So it has been in operation since 2021 and provides our clients with more than 7,000 square meters of IT room. I do hope that these examples I've shown you, give you the sense of passion and the sense of commitment to the exciting market that we are addressing. As you have seen, all of them are based on solid macro trends and all of them match very well our footprint and the expertise of EQUANS. And we -- this in mind, let's move to innovation. In this field, the issue is not to find new subjects. We have many, many, many subjects already that we are developing. Our challenge is to focus on a few top priorities in the areas that are linked to the fast-growing markets I've just mentioned to you. You see them in the bottom of the slide. 95% of our innovation come from the field. So listening to our clients and developing concrete solutions that we are able to evolve and deliver to them. The other challenge is how to share this innovation across EQUANS between our own teams. To do this, we have created exchange forums such as thematic Business Club, such as Innovation Award that allows us to spread knowledge and ideas across the entire business. Everything from high temperature heat bumps in Austria to inspection robots in the automotive industry in the U.S. This clear focus and collaboration across the business demonstrates our confidence that we are in dynamic that we are in exciting and that we are in solid growing markets. Therefore, again, we can be selective on what we drive forward. Now allow me to hand over to Jérôme Stubler, who will explain you how we make this effectively happen. Jérôme?

So you have seen that the market is there. This issue is not the market. The issue is how we are going to be selective on that market. And for that, -- we show you this slide. On the left, how are we going to be selective on projects and on the right, how we are going to be selective, I would say, as a general behavior. So we set what we call the alpinist rule. The alpinist when he is on the rock, he's got his 2 hands on the rock, his 2 feet on the rock and it doesn't move. That's good. It is the same for business. When you don't move, you take less risk. You work continuously for the same client. But when you want to cope with those change, you need to be present, as is the alpinist. When he's moving, he only remove 1 hand or 1 feet at a time. In business, that's our fundamental role for selectivity. We don't move to parameters. The parameter are what? First of all, the type of project, the skill which is required. Second, the size of the project. So the clients we work for and for the location, the country we work for. So we don't change to parameter as I said. No go, if there is to change. And to do that, we need to have a solid buyback with a solid expertise and a team which is dedicated and a strong rope, which is our contract. For the -- what does that bring as a behavior in the company? We want to be selective in giving priority to margin over volume. We want to focus on the existing geography. We want to avoid dispersion in terms of technology. We have enough technology in-house and be very selective in the large project, concentrating ourselves in large projects which are where we master fully the specialty. Going to the third chapter of the presentation, Together. Together is a name we have given to what we call the inclusive integration plan that we do between EQUANS and Bouygues Energy Services. And I can tell he is on track. Even we are in advance in our plan. First of all, the 2 companies are fully complementary in terms of skills, in terms of specialty and in terms of geography. So we define a motto, which is simple. Take the best of both in order to make sure in this buoyant market that 1 plus 1 is greater than 2. Merging our HR, our financial, our IT performance so that we take the best of both. But before that, something which is fundamental. We define between ourselves the principle of management that we want to have in the company to make sure we work all together on the same page. First of all, a decentralized model with clear rules and governance because when you have EUR 1 million contract a year, you need to take your decision as close as possible to the field. And for that, you need to have, every day, 100,000 of decisions which are taken. But to make sure that they are taken in a way which is understood, you need to have principle which are very clearly expressed within the company and system, which are, in fact, allowing us to see what is happening within the company. Second element, single line of responsibility. To build with the operational manager, a single line of people engaged, empowered and responsible in order that they are delivering and they are responsible of the result that we are going to show in the next slide. Third, lean at the top. At the top of any top within the company, to allow quick decision and optimize overhead. And four, something which is more different for what you hear, what we call servant leadership, having, in fact, the project manager at the core of the company so that all the managers, which are above are there to serve the efficiency of our project manager so that they serve our clients, so that they serve our EBIT and our cash. So that's a simple model where, in fact, we want just to make the life of our people simpler every day by serving them. And of course, with the 3 absolute must-have that I have already explained. So where are we on the integration plan? I can testify that we have a very high level of engagement and motivation simply because it's coming from the fact that people are proud to build EQUANS because on both sides, if you look to their history, for the first time, they're becoming core of our business. Second, we have a clear action plan organized in 4 countries: France, Canada, U.K. and Switzerland, where there are some overlap between the 2 companies and then several functional work stream plan. Third, we are focused on delivery. We have a weekly meeting which is organized, and we are checking that it is delivered. But before all, 99%, even more than that, of our people have no change, meaning that we are focusing ourselves on delivering the operation on a daily basis. And we have a strong governance with the PMO team and 2 subjects that we are following in detail, our IT costs and delivering our purchase gain. Yes, we are on track. We have set the organization of the topco of France, of Canada, of the U.K. already. We are working on the last country, which is Switzerland. We have defined the IT architectures, and we have been plugging EQUANS to Bouygues Group and we are aiming to plug Bouygues Energies & Services before the end of June. Now let's zoom on the IT. You have to understand that we did one of the biggest IT carve-out ever by creating EQUANS. We delivered that. We are now fully autonomous. And when we did that, we created a clean organization. We already removed 50% of the software, which were used by the company before that. Will give us a clean architectures, which is very good to be able to simplify the way we're going to integrate Bouygues Energy & Services. We have a plan with a budget of EUR 85 million, EUR 50 million for the IT improvement CapEx over the next 4 years and EUR 35 million for the IT integration nonrecurring charge over the next 3 years, of which EUR 15 million are in 2023. Going to the fourth chapter, the one you are especially waiting for, PERFORM. So PERFORM is, before all, a clear ambition. Our strategy is simple. We want to become the best-in-class of operational performance by improving significantly our result and match the result of the best player. To achieve that, number one, repositioning the loss-making activities; number two, resolving the legacy project, and we are very well on track on that; third, working in detail on productivity, procurement, pricing and cash. So we set a strong performance plan called PERFORM. Thomas, which is our in charge of Excellence Operations, is going to explain that together with Etienne. Thomas and Etienne, the floor is yours.

Good afternoon. I'm Thomas Jung, in charge of Professional Excellence, Innovation and Purchasing. I'm in the energy and services for now 23 years, having led profit centers and facility management, utilities and B2C services. And I've also experienced 2 significant merge in my career. So I'm going to detail the PERFORM plan, which aims to improve our profitability. So let's first have a look to what has been done in the past years. Bouygues Energies & Services had a plan called DIOGENE that has been launched in 2019, and that gave good results because the improvement of the margin was up 4 points and the improvement of the cash was above EUR 700 million. The plan of EQUANS was called 1ABCD2. It was launched 80 months ago, and the result is an improvement of the margin by 0.8 points and an improvement on the cash too. In these 2 plans, the first priority was a cultural change with the implementation of fundamental pillars that are net margin focus with no more talk of gross margin, margin over volume, and it has been said, being more selective on the projects. All the base profit center, and we have 900 of them, have also built a bottom-up business plan, including a performance plan that has been described in a dedicated application that allowed us to have an aggregated view of the plan and consolidating that and adding some additional ambition that I will describe, we've been able to build our PERFORM plan. Before presenting that plan, let's first detail what is the starting point.

Thank you, Thomas. Good afternoon. So my name is Etienne Jacolin. I am the CFO of EQUANS, also in charge of legal and IT for the group. After 8 years in Arthur Andersen and 4 years in a U.S. multinational, I worked [ 23 days ] for ENGIE. I had 2 different position in the group, mostly as CFO, but also as CEO, particularly in the Energies & Services businesses. I was part of a significant merger, which is an important point for our new project. In my last position at ENGIE, as CEO of the European business unit, I had a specific focus on renewable energy. Knowing the Energies & Services business and seeing the drive of Jerome, I jumped as CFO into the EQUANS projects that I strongly believe in. Very happy to be in Bouygues today and working on our integration that is going very well and on our smooth merger with our new talent and friends of Bouygues Energies & Services. So let's move now to my presentation. This slide is an important one because it's the first time that we present to you figures of 2022 of EQUANS, including Bouygues Energies & Services. But before looking at the figures, let me highlight that 2022 was a specific year for both entities. Both companies had to work on their carve-out from ENGIE or Bouygues Construction and prepare themselves for the merger. EQUANS had to finalize the group setup, able to work as an independent company, prepared for the closing of the transaction and initiate its first performance plan. Coming back to the figures. Bouygues Energies & Services was previously consolidated within Bouygues Construction in 2022. As said this morning, sales amount to EUR 3.8 billion and COPA reached EUR 137 million, confirming the improvement of profitability. The COPA margin was 3.6%, up 0.8 points compared to last year. So 2022 EQUANS pro forma figures incorporate Bouygues accounting principles. Sales reached EUR 13.8 billion and COPA was EUR 278 million, representing a 2% margin. This 2% figure for the whole year seems quite low compared to the Q4 margin that was disclosed this morning. Indeed, our activities have some seasonality, leading to nonlinear profile over the year. Q4 is usually the strongest quarter in terms of margin and particularly this year. Finally, if you had EQUANS and BYES together, 2022 pro forma revenues reached EUR 17.7 billion, COPA reached EUR 407 million and the COPA margin was 2.3%. This is a starting point of our PERFORM plan. Cash is positive at year-end and reflects a better-than-expected performance at EQUANS. Regarding BYES, the year-end cash position includes an exceptional dividend of EUR 270 million in the preparation of the shares transfer to EQUANS. This transfer was closed on January 4, 2023. Thomas?

So as I told you, we decided to set a new performance plan, putting together the 2 previous ones and to call it PERFORM. And this plan is also supported by a package of incentives that will be presented later on. PERFORM has been built taking the best of the previous performance plan, aggregating, as I told you, all the profit center bottom-up action plan and adding a top-down ambition on procurement because, of course, the base profit center cannot have a global overview of what is achievable. It's a very detailed plan, and we estimate that the order of magnitude of the potential margin improvement is around 3.5 points, and we are confident in that figure. The plan is based on 5 main programs on which we now communicate actively. The first program is on procurement to deliver additional savings, combining the spend of Bouygues Energies & Services and EQUANS. There is one program on pricing with the objective to increase our order margin -- our order intake margin. The 2 next program are about turning bad news into good news. The bad news is that, yes, of course, we have some projects that are at loss and some profit centers that are at loss. But the good news is that there is no fatality. It's fixable, sometimes very quickly. We know what to do, and we already had significant results on that. So as we are facing some legacies on some projects, we decided to set a dedicated action plan that is called BUG KILLER because just as in software, you may have a bug that you need to fix. We sometimes have bugs in the projects that we need to fix. This is about the name. And how do we fix it? By being more selective. We already talked about it and by improving our project management teams. Concerning the profit center that are at loss, Bouygues Energies & Services already launched an action with very good results. So we are going to use exactly the same recipe. And we are quite confident that we'll have good results also. The last program is on SG&A optimization and increasing the productivity on the field because we have room to improve the global efficiency of our project. There is always room for continuous improvement. And of course, in addition to these 5 programs that are concerning margin improvement, we have a program dedicated to cash improvement that Etienne will describe. So this is PERFORM, and now I'm going to detail on each program, what is our strategy, what we have done so far and what are the next steps. The 5 next slides have the same structure. You can see on the left side, what are the main actions on this program and some examples of actions that we've launched. Concerning procurement, we have a total addressable spend of EUR 9 billion, and we've already identified more than EUR 60 million of savings. Our very first action was to build the tool that gives us a good understanding of our spend. Now the tool is built and we have a clear view of who are our main suppliers and where we need to work first. It allowed us to launch the very first negotiation, and we are now negotiating with almost 100 main vendors. Taking into account, of course, the new size of the group and the best condition between the one that Bouygues Energies & Services had and the one EQUANS had. We are also building a global procurement performance plan in each country, helping them to identify performance levels that some countries haven't seen so far. One of the key actions will be to develop catalogs so that we will be able to widen the spend that is covered by purchasing team and to massify purchasing in order to increase the spend coverage. We need to be able to monitor the flow of order and to develop and deploy, e-tool, sorry, e-proc tool. We already mobilized a dedicated task force. We built a procurement plan in 3 countries, and we started, as I said, the negotiations. Of course, we have thousands of vendors and it will take quite a while to renegotiate all contracts. So it will take 3 to 4 years to get the full potential of the savings, but we'll have significant gains beginning 2024. Concerning pricing, we are quite confident in the fact that there is room to increase our price. We did it last year. If we look to the large projects that are reviewed in the Group Risk Committee, now they are never below 6% of net margin. It was not the case previously. We already mentioned that we also increased our selectivity, looking only for projects that we know we'll be able to deliver in good conditions. What we are also actively working on is to make a precise market segmentation in each profit center, and then on each segment, to set very clear rules of what is the minimum margin that is expected, what is the average margin that we target and what are the margins that we expect on additional work or variation orders. We started this exercise last year, and we are going to improve it this year. The level of margin will also be fine-tuned according to the size of the project and the customer urgency. We are also working on improving our quoting tools, and of course, on building dashboard that will allow us to monitor the order intake because, of course, we want to be served by the pricing policy -- sorry, that the pricing policies that we set are well applied. Concerning our project performance plan, as I told you, we are facing some legacies and difficulties in some projects. The good news is that some of our major bugs have already been fixed last year and that the list is decreasing. What have we done? For each bug, we defined an action plan and we set a dedicated team to help the project director. And most of the time, we build a strong claim that is supported by the top management in the negotiation. And as I said, we already solved a lot of them last year. So good news is the list of bug is decreasing. This is the reactive part of the program. But of course, we prefer to work on the preventive part of the program, which is to prevent the problems before rather than solving them. When we look to our major projects, the 3 main causes of losses are the, first one, for 30% of them, the problem is the risk taken on the project. For 30% of them, it's mainly project management issues. And for 15% of them, it's human resources capabilities. So what have we done to rectify the situation? Four main actions. The first one, we already described it, we have strengthened our risk committee on several aspects, selectivity, the team. We want to be sure that when we take a project, we have the team available and then the methods, and we ask for clear technical details to be served that the team is mastering what they are going to do. Secondly, we have strengthened our project methodology, writing the key principles of project methodology. We've written a book, and then we've set 2 dedicated trainings for our project management, Level 1 and Level 2, already trained almost 1,000 of them. And by the end of the year, all our project directors will be trained. Third, we defined what we call the BUG KILLER methodology that should allow us to react quicker and stronger. And the main point is that we ask for full transparency on the projects so that we can be informed at a very early stage when we face a problem so that we can have a clear diagnostic, set a clear action plan and have a dedicated team to support the project director. And at last, as we want to have a very clear view on what is happening, we built a tool that is now connected to all the ERPs we have in the company. It's a project cockpit that allows us to have a very good view of what is the project margin, net margin, what is the cash position with automatic alerting in case of deviation. So it allows us to have robust monitoring and to make sure that regular and exhaustive reviews are made on each project with full transparency. Concerning the profit center that are at loss, you can see the figures we have some of them. Bouygues Energies & Services has been very successful to turn around most of them. Why? Because most of the time, it's quickly fixable. And so we are going to use exactly the same methodology at the EQUANS scale. What are we going to do? Set dedicated teams to work on that, have specific management rituals to be served by the action plan ongoing, have a strong monitoring and a strong communication on the program to share the success that we have. And this year, we expect to reduce our losses by more than 40%. Last program on productivity. On one hand, there are plans in each country to reduce the overheads, working on the IT cost, the premises, simplification of the organization. I won't describe, it's quite classical. On the other hand, we are working on improving the productivity on our project. The main topics of this program are working on optimization, on logistics, implementation of methods and tools to improve the work of our employees, improving the economics of our workers on site, deployment of LEAN, industrialization of assembly by further developing preassembly and prefabrication in workshop. This is what you can see on the picture, where we assembly heat pump and the workshop and then we send it to the worksite with a truck. And of course, sharing all the good practice, setting up standards with the creation of documentary database. We also decided to set a specific team on that program, and lots of initiatives have already been launched in different entities, of course. In the first program, we have quick wins. Here, it will take longer time to have a significant results, but we expect that program to bring results in 2025, '26, '27. That's all about the margin improvement of our PERFORM plan. You've seen that we know what we have to do. We have a clear and very detailed plan. We already launched a lot of action, and we have the first results and we have some quick wins to come again. We are quite confident that our target is reachable in 5 years, and now Etienne is going to explain what we are going to do on the cash.

Thank you, Thomas. Our cash plan relies on 2 pillars. The first one is a structural improvement of the working capital need. And the second one is a spread of a strong cash culture to drive the cash conversion to best-in-class level. First, concerning the working capital need. We focus on work-in-progress and outstanding receivable. Inventory is less a concern in our business. And even we will try to negotiate better payment terms with our suppliers, we always respect systems. So we defined clear roles that must be followed during the project management process. Be more demanding in the negotiation phase, checking the financial health of our clients to decrease counterparty risk, obtaining advanced payments and proper payment milestone, to be always in a positive cash position throughout the life of the project. As administration on the right side of the slide, you can see a data center project with good cash management practices where you see the green curve is always positive. We are also focusing our action plan to reduce the necessary time to invoice clients and to delay between issuing the invoice and receiving the payments. Finally, the permanent monitoring of our aged trial balance allow us to decrease overdue invoices. Of course, to be successful, these actions must be carried out as closely as possible of the field. So it's why we implemented an operational cash indicator of the project at the project level for the project manager that we call CLIFF, for client free financing, which measures the outstanding customer balance. It can be considered daily for the project cockpit that we just spoke about by the project manager, so that cash is everyone's concern in the company. Second, we need to reinforce and spread a strong cash culture to drive cash conversion to best-in-class level. We are taking benefits from what has been successfully done at Bouygues Energies & Services for the entire new company. Acculturate trains the team to raise awareness of cash -- on cash, make cash visible everywhere and keep a permanent communication and animation for life events, newsletters, [indiscernible] communication and focus, implement simple tools for our personal staff to measure the cash performance, as I just said, about the CLIFF KPIs and integrate a cash incentive in the bonuses computation formula. This is what we do. Jerome will tell you more about these bonus schemes about in a few minutes. But before giving back the word to Jerome, let me say a word on the synergies. A lot of work streams are already working in the field in a transversal group level to identify all potential synergies in each geography. We can confirm today the expected synergies integrated in our PERFORM plan. Synergies should deliver between EUR 120 million and EUR 200 million run rate. As described in the presentation, the main lever will be procurement, real estate optimization, SG&A but also subsidized operational teams. So things are already work starting to execute the procurement synergy plan, as Thomas explained to you, in France, in Switzerland, in the U.K. and where both historical companies operate. We are currently working on the first real estate optimization also. We made the first organization simplification at the topco level with the new organization in place. And lastly, we have defined the infrastructure in the application IT road map. We have integrated around EUR 60 million cost of [indiscernible] in the COPA over the plan to implement the synergies. And as Thomas said, we will implement an e-Proc tool for making the synergies on purchasing. Synergy will fuel gradually the COPA until reaching their full potential in 2027. And we think that we'll be able to deliver around 75% of the synergies in 2025. Let me turn to Jerome concerning the bonus plans.

Thank you, Thomas. Thank you, Etienne. So you would appreciate that all that is a change. So when you have a change like that in a company, first of all, you need to manage that change. And second, you need to change progressively the culture of the company. And to power the change of culture, we have been deciding to set a system of incentive. First of all, a short-term bonus scheme main -- on 2 main KPI, COPA margin and cash generation at the level of the profit center manager, at the level of the project manager and, of course, for the functional support function. We have also set LTI and this LTI is dedicated to a selected number of managers based on EQUANS global targets. All that is fully in place and fully -- and will be fully implemented at the end of the first quarter. PERFORM is having the ambition to deliver 5% COPA within 2027. We will deliver it. I am very confident. Why I am so confident? Number one, we are already on track. As explained by Thomas, we have already delivered plus 0.8% last year. And when you make the math and you add the 3.5% which are represented into the plan, which are -- when you look to each of the box, reasonable, it give a number, which is beyond this 5%. Second, we have a plan, and this plan is already incurred in the 900 profit center who have built themselves on a bottom-up basis, their plan from it, with a tool to follow the implementation of this plan all across the 900 profit center. Third, we are setting the bar from now already above the 5% in the profit center and on the large project. As explained by Thomas, I have been reviewing 122 projects over the last year. None of them were below 5% or 6%. And four, we have a strong commitment of our teams. And the mindset is changing fast. Of course, it is helped by the incentive system. And number five, yes, the competition is above us, which is good, which is good because we have to follow the tracks because it's always better to be in competition with people making more money than yourself because you have a room for improvement, which is different. Think about it of what they had to do a few years ago when they were first on the track. Now Etienne is going to explain to us the financial outlook, and you need to get used in Bouygues Communication to see more pipes and valves.

Thank you, Jerome. As explained during his presentation, EQUANS is particularly well positioned in its markets that are facing growing demands. We are convinced that our selectivity strategy, our performance plan as well as the resilience of our business model should enable us to achieve our objective of profitable growth and bring our margin and cash generation to the best-in-class level. I will enter into more detail about our guidance until 2027. Let's look at the top line first. Regarding our sales, we are planning 2 different periods for organic growth path. A first phase where the growth should be slight. In '23 and '24, we will be focusing on integration and profitability improvement. Our markets are dynamic and our backlog is strong, which will permit us to increase activity and focus on the high-value creation segments. From 2025 onwards, on the first stage of profitability, improvement is achieved, we will concentrate our teams more on growth, and we plan to accelerate our development in specialties. So acceleration to growth while remaining focused on improving profitability should enable us to meet the revenue growth rate of our peers. Let's focus on COPA. As you know, the target is 5% in 2027 but let me show you the evolution trajectory. It will be gradual, supported by the strategy, the performance plans and the synergy implementation. We also looked at our capacity to pass through cost increases due to the inflation or scarcity of resources in our contract portfolio. We integrated this subject in our roles, and we checked that in the project approval process. In the first years, our team will focus to build a strong and more efficient company will complete the EQUANS autonomy plan and finalize the integration into the group. We'll also implement the BYES integration plan into EQUANS. In 2023, we expect COPA margin between 2.5% to 3% with the first positive impact of PERFORM plan. Then the team will focus on more and more on growth and the COPA margin will continue to benefit from PERFORM as well as the development of the high-value segments. We expect COPA margin to be close to 4% in '25 and then 5% in 2027. Moving to cash. Our Energies & Services asset-light activities are structurally a cash-generating business. The business model is resilient as well as profit as explained previously. And the gradual improvement of COPA in the years to come we'll see improvement of our free cash flow position. Our CapEx-to-sale ratio is around 1.2%, leading to a high cash conversion ratio. We expect cash conversion ratio before working capital improvement between 80% and 100% every year starting in 2023. And the good news is that the optimization of working capital need will come on top, thanks to the PERFORM cash plan, strengthening EQUANS cash generation. This makes us confident that we'll achieve our goal. But we are also looking at our portfolio as we want to focus on our asset-light strategy. The first concrete output of this review is the disposal project of our asset-based historical businesses, district heating and cooling networks and EV charging activities in both the U.K. and the Netherlands that are mainly concession contracts. We expect to close transactions before the end of this year. The disposal of assets should not have a material impact on sales and COPA margin. We can anticipate, of course, a positive cash impact. To summarize this section, we are confident in our ability to deliver our guidance. Bouygues Energies & Services and EQUANS have already obtained a result on margin and cash from their previous performance plan. We are building on these historical actions while enhancing their impact into PERFORM. We are implementing the new organization and are starting to implement the synergies, so integration is going well in line with our planning and with our bottom-up approach. Teams are very, very motivated. The key element of the success are in place. Is this last comment as pass the word to Jerome to...

Okay. Thank you, Etienne. And I like your equations. Yes. So our presentation is coming to an end. I hope that was not too long and detailed enough. And to summarize the key points, please remember 3 points: number one, we have a very strong driver. We are working for sectors which are the energy, the digital, the industrial sectors and transition, which, in fact, help us to attract people because they are key for the planet. They are growing, which help us to do together with Bouygues services, 1 plus 1 [indiscernible] 2. Second, we have a wide portfolio of expertise, very well positioned in terms of geography and in terms of technology. And third, we have a plan and this plan is reasonable. Reasonable in the context which help us to deliver it to the best-in-class performance. So we are confident to comply with [indiscernible] request to become the undisputed leader in our field within the next 5 years. [indiscernible] Thank you.

Thank you, Jerome. Well, at the end of this session, let me say a few words on the [indiscernible]. First of all, on Slide 90. Bouygues will act as a supportive and long-term shareholders of EQUANS as we do for the other business. And I would like to say that we have already begun to introduce EQUANS employee to this vision as we -- they have now the opportunity to become shareholders of the group, thanks to a subsidized employee shareholders plan. It's possible from the beginning of the year. Moreover, the collective success of our old business segment requires a strong and very effective governance. That's why the governance of each segment is aligned with listed company practice. As such, EQUANS Board will meet at least 4 times each year, specific committees for audit, remuneration, ethics, CSR, patronage are already in place. They are made up of either independent members or senior manager of Bouygues Other business segment. On top of that, a pragmatic set of incentive for EQUANS management has been settled with clear financial and nonfinancial objectives. To be sure that the margin improvement is effective amidst a differing target in the set timing, I will cover this in a while. Coming to the Page 91. I would like to add that EQUANS will benefit from Bouygues' value, which led to a success and longevity. Bouygues is a group made of businesses close to their customer. We foster entrepreneurial mindset and benefit from a global reach made of multi-local champions. Above all, we will promote the basic of our culture: respect, trust, creativity and expertise. All our employees are at the core of our strategy, and we are committed to the promotion of a strong social model base, based on ensure health and safety, which is the top of our priorities, giving fair and equitable compensation, attracting and retaining talent, promoting diversity, developing fruitful relationship with employee representative and involving employees in shareholder plans. I'd like now to detail more a very specific plan that we decided to implement in EQUANS for the motivation of the management team. At EQUANS, profitability needs to be improved within a set of demanding time frame and because we are convinced that all our interest might be aligned to warranty success, we've decided to implement a dedicated management incentive plan that I want to detail. This scheme is structured around the following key principles: first, we need to ensure the commitment of a large number of managers so the plan is dedicated to a selected number of managers in all geographies from executive committee member to profit -- business profit center manager with top manager investing their own money, which is very new for us. Second, incentives are aligned with EQUANS guidance and financial targets are set on an annual basis based on profitability and cash flow generation. Target achievement will be measured every year. Third, this plan will be active offer a specified period of time between 2023 and 2027, in line with EQUANS' margin improvement targets. Fourth, in terms of [indiscernible], the plan is mostly composed of free EQUANS shares attributed by EQUANS with manager between '23 and '27 and gradually redeemed by Bouygues from 2025 onward. The last important principle, the plan will be only effective if certain thresholds are met and if value is created for Bouygues. Now with Pascal, we will detail the impact of the management incentive plan on financial statement, and he will be able to sign it.

Thank you, Olivier. Good afternoon, ladies and gentlemen. On Page 93, let's have a look at the cost of management incentive package. The P&L cost is estimated around EUR 60 million in 2023 as the cost will start in the second quarter of 2023. Between 2024 and 2026, we estimate the cost at around EUR 80 million per year. This P&L cost estimation is based on the assumption that the guidance is reached. The yearly cost will be split between EQUANS and Bouygues, EQUANS bearing the largest portion of it. Costs will be recorded as other operating expense, then with no impact on COPA for both EQUANS and Bouygues. The total cash outflow for the group will be similar to the total P&L costs. As Bouygues SA will be the entity redeeming the shares, it will bear most of the cash outflow of the plan, which will start in 2025 and will be spread over several years and beyond 2027. The cash outflow for EQUANS will be lower and spread over a shorter period of time between 2025 and 2027. Turning to Page 94. Let me give you a few explanations on the PPA amortization profile. First, I remind you that we bought EQUANS shares for a total price of EUR 6.1 billion. After reconciliation of goodwill and intangible assets recognized by EQUANS before acquisition by Bouygues and aligned EQUANS accounting practices to Bouygues practices, EUR 6 billion were recognized as excess of purchase price and were allocated as per the following: EUR 5.2 billion have been recorded as goodwill and EUR 0.8 billion have been recognized as intangible assets, net of tax, so-called PPA. 50% of it, mainly consisting of customer relationship is amortizable. The PPA amortization started in Q4 2022 and impacted the P&L of Bouygues SA and others for maintenance, EUR 13 million. We estimate the PPA amortization to decrease from EUR 50 million in 2023 to EUR 40 million in 2027. Then it will decline progressively between 2028 and 2046. I should highlight that the PPA amortization has no cash impact and is only recorded at Bouygues SA level. Besides I remind you that PPA amortization amounts are not representative of our financial performance, explaining why COPA, our key performance indicator, excludes the PPA amortization. Another important thing to outline on Page 95 is the financing of EQUANS. The impact of EQUANS acquisition on Bouygues net debt at the acquisition date was EUR 6.5 billion, including an estimated amount of EUR 0.4 billion of EQUANS debt. Worth to say that EQUANS net debt was reduced to almost 0 at the end of 2022, which is a great achievement of EQUANS team. As already explained several times in 2022, we took some pre-hedging [indiscernible] in December 2021 and January 2022 to cover our interest rate risks. Thanks to this cautious strategy, we secured the cost of financing at a very reasonable economic cost over 13 years in average. For the second first years, the economic cost is 2% before tax, so the amount is approximately EUR 130 million before tax, so around EUR 96 million after tax. I will come back on this on the next page. But considering the high cash generation profile of EQUANS, this acquisition is accretive in cash for the group from year 1. Lastly, after EQUANS closing, I'm too long -- lastly, after EQUANS closing, our credit ratings have been remained strong both for Moody's and Standard & Poor's, taking into account, in particular, the favorable evolution of the business risk profile of the group, and of course, our good financial ratios. Page 96, you can see the group new profile as if EQUANS was acquired on the 1st of January 2022. EQUANS brings further diversification to our portfolio of activities. It increases the weight of our asset-light activities, enhances the resilience of the group as the Energy & Services business offers a nice potential of growth as demonstrated today in our presentation and this structurally cash generative. This acquisition is accretive for the group as detailed on Page 97. First, EQUANS being positioned on promising markets offers a strong long-term growth potential. Second, we will convert this growth into current operating profit from activities as we plan to increase the COPA margin to 5% in 2027 and then reaching best-in-class level. Third, EQUANS being an asset-light activity, it will structurally generate some cash as confirmed by our guidance to convert at least 80% of COPA into free cash flow. Just a few words here on 2022 figures. EQUANS on a stand-alone basis reported in 2022 on a pro forma basis, generates a COPA margin of 2% on EUR 221 million of cash flow before working capital requirements. This free cash flow generation already offset more than the EUR 96 million of financing costs and the EUR 80 million estimated cost of management incentive package. This acquisition is accretive for the group to free cash flow from year 1. Fourth, thanks to our performed plan, we will optimize the working capital requirement as Etienne said previously. And last, we expect additional cash coming from asset-based activities disposal. As demonstrated, this makes us very confident in the free cash flow accretion for the group. In addition, EQUANS acquisition was already accretive on the group net profit in 2022 before PPA amortization, and we expect a mid-single-digit accretion in 2023 based on conservative assumptions and before PPA amortizations. 2023 being only the start of the journey in terms of profitability improvement and cash generation, we feel very confident in our capacity to create value for all our stakeholders in the coming years. Olivier, I am giving you back the floor to finish off.

So before the conclusion for those who didn't have the chance to attend our annual presentation this morning, I will remind you the group guidance. We explained this morning that the environment was unstable. There were some inflation. There were interest rates were rising. There were volatility in currency. And when we took -- and when we take all of this, Bouygues 2023 sales close to those of 2022 as well as an increase in its current operating profit from activities, so COPA. And the outlook is based on 2022 pro forma financial information that assumes that EQUANS acquisition was completed on 1st of January. Last slide, when we started, I told you that I wanted that at the end, I wanted to let you come away with a clear idea of what EQUANS was and transmit confidence in our ability to reach our financial targets. So I'd just like to sum up what we told you within the last 2 hours. We have the conviction that we bought that company at the right time, and this is the right company with a size, with the geographical footprint and a company which is positioned on growing market. And as I told you before, the reason if we made the acquisition in 2021, the reason are better -- just better now due to the situation of the world that we face from beginning of last year. We have the right team. We have the right expertise. We have the right skill. We have the right people to be able to operate and to execute the project we win with the customer. We made a diagnostic. We know exactly where we lose money. We know what we need to do to improve our margin. We identified the driver of the recovery. We have a relevant plan to achieve the targets. And on top of that, to be sure that all the interests are aligned. We set up a very specific plan to be sure that the management team has the right incentive to reach our goal. For all these reasons, we are really, really confident and the fact that we will be at 5% margin by 2027. All the planet [indiscernible]. I have no doubt on the fact that we succeed on the journey. Now with Pascal and the representative of EQUANS, we will be very happy to answer your questions. So I invite all of them.

Nicolas Cote-Colisson from HSBC. Thanks for the very dense but clear presentation. The longer there were questions we may have. So the first one is a question on profitability by activity. I wonder if you have activities that have better returns than others or if it is just about the size that defines the margin? And whether your business mix is a reason for eventually a lower margin guidance in 2027 compared to what the market may assume for some of your competitors? My second question is still about your margins and the targets. I was wandering what was the impact of inflation because I would assume that if you reflect higher costs in your tariffs, that may eventually dilute the margin. So I wonder what type of inflation assumptions you have retained in your forecast. I'm almost there. The third question is about your detailed financials. I just want to make sure I got it right. So you mentioned EUR 60 million of synergy execution costs for over 3 years. But earlier in the presentation, you also talked about EUR 85 million of IT-related costs. So I just want to reconcile these numbers. And very last, the 3.5 percentage point of COPA improvement from your plan, just trying to understand why the margin target or the target for the margin in 2027 doesn't reflect the full 3.5. So if I understand well, the incentive plan is not within that. So this is not the explanation. So anything you can add on that would be great.

So maybe just seeing at a very first question you were asking, and it was a question that we had this morning, why we don't compare with the peers. They don't know what we are not targets 6, because it was a question 6 this morning. Just before joining 6, there is 5 on the past. So we fixed 5 for 2027. It doesn't mean that we won't exceed 5. It means that for 2027, we will target 5. For the detail, they will answer you very precisely.

So the first part of the question is, do we have more profitability on some of the activity or the other? And is it linked to the size of the company. In fact, it is linked to our capacity to differentiate ourselves. So everywhere where we are having key technical differentiation, key geographical differentiation, we have a higher margin. So sorry to tell you a broad answer. But of course, when you speak about HVAC for the pharmaceutical for the microelectronics, we have a lot of differentiation. When we speak about nuclear, we have a lot of differentiation, and there is less capacity in the market to deliver the same level of system and service. When we are having a team which is very close to a factory and delivering services very locally, yes, we have a high level of differentiation and the margin follow. So it's a question of building that capacity of differentiation. That's why we work so that each of our 900 business units make a segmentation of what they do and build the differentiation. The differentiation is a bottom-up game. That's the first part of your question. Second part of your question is inflation. The inflation we have not incorporated a high inflation in the top line. We have been considering a small inflation in the top line. However, we have, of course, the system which passed the extra cost of the inflation to protect ourselves by simply having contracts which protect ourselves or short-term contract for which we know the value and we lock the value when we sell. And the third element on depletion is that the inflation especially on the energy price push decision of our customers to change their energy system. So it's a driver to make decisions, to enhance, in fact, the change mainly to a system like it pump or economy of energy by a proper piloting of the system.

Concerning your questions about synergy implementation, so there are 2 components. We have the IT parts and the performance part. IT parts, you have EUR 50 million of CapEx and EUR 35 million of nonrecurring item for integration costs. For the performance plan implementation, we have EUR 60 million cost spread amongst the plan in the COPA, to implement the performance plan. So it is 2 [indiscernible] and regarding 3.5 plus 2 equals 5.5, I think Olivier answered already to that question.

But we will deliver the plan. We received some -- we made a survey to try to I understand what you wanted to hear today and what kind of questions you need an answer. And one of them when we want to be sure you told us that you wanted to be sure that we want over promises the thing. So we don't have our promises, say, 5 by 27.

Just a few -- you're talking about not a huge amount of growth in '23, '24. So how much of that is you giving away business and shrinking? And how much do you think you need to shrink and where, especially. Then on -- when you shrink, you usually have costs. I think it's quite well known in the market, some of our facilities management business is not great. I mean it's great, but it's not, it's not making money. You usually have to pay to exceed these contracts. Do you have any costs embedded into COPA or below COPA into this. And that's one bigger picture, how much can EQUANS grow sustainably because when we look at you provide plenty of numbers and we need some time to digest. But the exciting stuff, it's energy transition, T&D, EV, data centers, actually quite small due to the scale of the group. So how can you accelerate really make the most of that growth? Do you need to change the mix? Can you do it quickly, most likely not. And I had a last point, are we ever going to have a split of margins by geographies in order for us to track the progress, or say differently, can you help us understand where you really struggle right now and where you need to really push for restructuring and where things are much better advanced and now use that kind of lead margin, let's say, in the group. So it's many questions.

Yes, let me start the 2 of those. No. In fact, first of all, please take something which is important into account. We have a lot of contracts, 1 million contract, a lot of small contract. And that's the foundation of the company. That's the keel of the boat that what brings the recurrence, the capacity to move because it's quicker to move on a small contract. This is not a long-term element of backlog. So we have been doing a lot already of the cleaning of the past contract. We don't have contract on which we want to exit simply because we are in a situation in which we manage now the recovery of the long legacy project. So we don't see any difficulty of that nature. Of course, when you have in 2022 an average EBIT of 2%, you have companies which are above 6%, you have companies which are in the range of 4% to 6%, which demonstrates that if you have an average of that level, you have a company which are still as explained by Thomas in a situation in which they need to improve their margin and it came from below 0 to above 0. First of all, that's the good news because the improvement of margin is quicker when you come from a very negative number to that number, and we have been already been doing in '21 and '22, some important restructuring. Regarding the market, I give you an example. And of course, I'm sure that was one of the examples you have in your head. Yes, we are not growing in our plan in the U.K. in the next year because we want to concentrate ourselves on where is the value, which is a zero carbon reduction footprint for which, yes, we can generate higher margin than other business simply because we are quite unique. Look to the market in the U.K. who has the capacity of delivering RFM. The capacity to understand the energy, the capacity to understand the building. We are at the intersection of the 3 domains meaning that we have the capacity to deliver for the county in the U.K. offer, which are tuned in order to take the existing carbon footprint, which is existing for our country, and that's how it works. They call us and say, can you make a map of the carbon footprint of the county. We describe a route and then we deliver that route turnkey in order to [indiscernible]. We do that also for the British Army right now, and I can tell you that the margin are good margin in that position.

Eric Ravary of CIC. I have 2 questions. First one is could we have an idea of the part of revenues made in loss-making contracts and profit centers in 2022. Second question is on the commitment you took to create 10,000 shares in the next 5 years, I think. So how is it integrated in the plan? And next question is on inflation on wages, what is a part of revenues made with wages and the inflation assumption you have for the next 5 years on this cost?

So we'll not give you any numbers about the revenue of loss-making contract either loss-making company. What I can tell you is that we have set a system, which enabled us to know project by project, a project which is losing money and seeing through the EBIT and through the cash, any profit center could be becoming in such a difficulty, and we can keep track of any profit center, which is getting out. I have been seeing the question from some of you, a comparison with another company. And I can tell you that we have been setting a system, which is enabling us to follow closely the company project by project and company by company. Regarding the 10,000 jobs creation, which has been expressed for the next 5 years. In fact, it is to follow what we have been explaining in the second part of our plan when we will be having over past a certain threshold country by country to be able to deliver growth. We want to come above a certain threshold before we grow business unit by business unit so that we deliver first the right level of performance before growing. And how are we going to deliver that? Apprenticeship, which is key. As you know, Germany, Austria Switzerland, 3 locations where we are strong, are very good in that domain, and we are taking that in France, Belgium, Netherlands, U.K. progressively in order to progress on a partnership, because to create good recreation, you need 2 to 3 years. And so we bring those people and by the monitoring, we create the workforce, which enables the plan to create that growth. So yes, we are very confident that we'll be able to create 10,000 jobs over the next 5 years. Regarding the inflation, we have been following the inflation on wage as most of the company over the year, that I can tell you something is that our system are very mature. And so when we increase the cost of people, it plug into the system very quickly before it's the whole impact so that each of the selling price are moving in order to explain that into the system. As we anticipated on inflation for the next year in our long-term contract, yes. But anyway, for all 4 long-term contracts, we are covered by a revision formula.

It's Mollie from Citi. I have 3 questions, please. I'm going to start with provisions. So looking at the [ energy ] reporting and then also at your reporting, it looks like there's been an increase in provisions that come above COPA and therefore, that your underlying margin is maybe slightly better than what's being implied by the 2.2% that you've got there. I wonder if you can comment on that. My second question is on your definition of recurring revenue. You've said that 85% of the revenue in EQUANS is recurring. But I don't know what you -- I don't know if we can dive a little bit into what you mean by that. You've talked about, for example, the data centers in London where it's London 1, London 2, London 8, et cetera, would you be counting that within your recurring figures? Or is it solely where, for example, there's highway charging points and you have maintenance contracts? Just little bit more on that 85% would be great. And then obviously, we don't have the margins, but looking at the productivity on the U.S., it looks like there's quite a lot more in the U.S. and Canada. So I was just wondering if you could comment on perhaps your strategy in terms of optimizing that and in terms of what future strategy in the U.S. considering that seems to be an area where productivity is a lot higher.

Okay. 3 very good questions. I propose to start with the second one and the third one. And Etienne answers the first one.

I have not really understood the first one, sorry.

So the recurring revenue is the 85% is coming from 30%, which are long-term contract. We signed typically 5 years, 6 years, some of them are 15 years, some of them have 25 years, which is a long-term contract for RFM where we are within the university, and we deliver a contract over years. This long-term contract gives us the capacity to fully understand the premise of our client and be able to implement some change with our client because we know exactly how it works. The second element is the framework contract. So typically, you are working for a factory and they give you a list of price, 100 unit price, which change everywhere through a revision formula, a full revision, no fixed part. And then you deliver the work through this framework contract. And let's say, 70% of what you do is as per the framework contract and 30% is a new thing that you do, which is not part of the framework contract because it was not sought at the beginning. That's a secure level of recurring. The third element 35% is a client for whom we are working regularly with them for a 3-year contract. So you're right, when we work for Virtus in London, the match make them fall into this 35% because we have been working for Virtus all along the way with them. And that's true that sometimes we deliver London 1, London 2, London 3, London 4, simply because people understand each other, and there is a capacity to have a recurrent business. Regarding your question about optimization of productivity in the U.S., I don't know if you want to make an answer. I'll give you one example for which -- on which we work on it. So there is still some room for productivity in the U.S., even if the productivity, you are right, is quite high in the U.S. We are an important electrical company in Manhattan Downtown. When the wage of around $120 when you work within Manhattan, if you go 50 miles away, the price is more or less half price. So yes, there is some room, and we are working right now in setting prefabrication yard for electrical works in order to pre-assemble component outside of Manhattan in order to take benefit of higher productivity because when you work in a factory, you have a better productivity. And in setting also the capacity to have people who don't have all the constraint of Manhattan.

I mean, I will try to answer to your first question. I don't know exactly what you are referring to, and I will not comment on the energy situation. That's first. What you need to understand is when we created EQUANS, we had to become an autonomous company, okay? And so we had to recreate, for example, 19 infrastructure. We had to -- when you are in the group, you cannot -- and you respect the transfer pricing policy, you cannot charge also all of the costs linked to your subsidiaries -- to the subsidiary, [ a key part of the center ]. So when you became an autonomous company, you have to add all these costs within your financial statements. So it's why when we said that we had a 0.8 point improvement of the margin of EQUANS compared to last year, we had -- it was 0.3 plus 0.5. 0.5 was the stand-alone cost and 0.3 -- that's something forever, okay? And the 0.3 was the mathematic addition, but economically, it's 0.8. I don't know if this exactly answers the question.

Mathieu Robilliard from Barclays. I had one question, maybe a bit dry, in terms of the financing costs. So you mentioned what is the incremental financial costs linked to the new debt. But at the same time, you already recognized the fact that you had locked very attractive rates in your net debt figures in 2022. So how do you avoid the double accounting? I mean how do you recover what you paid or what you recognized rather versus your guidance for financial cost of EUR 200 million?

You have to separate the P&L view on that and the cash flow view on that. In terms of P&L, we had no impact in 2022 related to these swaps. So we will have it in the long term. In terms of cash, as we have already in the pocket the amount corresponding to these swaps, effectively, we will pay each year the amount as in the nominal interest rate, which is higher.

Which is more than EUR 200 million.

Yes. That's right.

Then I probably missed it at the beginning of the presentation, but did you give a kind of average length of your contracts for the business? And the third question, I was following up on Nicola question previously about the fact that you may have restructuring costs? And how did you account it for that? I'm not sure you gave an answer on that.

So I just make a calculation to answer your question, dividing the backlog by the revenue. It is 1.5 years, which means the result of the calculation got nothing because most of our projects are very short-term projects, 3 months, 5 months, 6 months, to implement a small solution somewhere. Remember that 70% of our projects are below EUR 50,000, and we have a few contracts which are very long, and we incorporate this into the backlog. So that means the average doesn't mean anything because, if you would make a graph of the length, you will have a graph which is like that, with a long due, which is modifying the average if, I would say, that most of our contracts are delivered in the year.

Like 80% or something.

Yes.

Concerning the [ restructuring ] costs, in the group accounting principle, restructuring costs are in the COPA. So it is integrated in the guidance.

So can I continue on very dry subjects? Just the net working capital, you've been very good at not giving any numbers. Obviously, it's quite a tough exercise. Can you help us -- from what's happened at Bouygues Energy & Services and at EQUANS, can you help us frame a little bit what is within the realm of possibilities on net working capital improvements? In days of sales outstanding maybe, especially at Bouygues, some of the improvements is quite amazing. It's 20% of revenues. So that looks quite a crazy number. But help us frame a little bit that. And number two, can you help us understand that cash conversion ratio. Because if we look at the footnotes, so it's EBITDA minus tax expenses and working capital. And what is there left? There's nothing. What's in between basically your EBITDA and the cash left? If you take out all the costs, there's not much left, [ 100% ].

So first of all, net working capital. So first of all, what you need to understand is that we are not starting today on working capital. Bouygues Energy & Services, as you said, initiated the [ integration ] project -- plan before. And you saw the improvement of the cash position of Bouygues Energy & Services since 4 years. EQUANS initiated also its performance plan in 2021. If I look at the last 2 years, '21 and '22, where you remember the EQUANS transaction was a lockbox mechanism. So if we start at the date, we have the cash of EQUANS that's belonging to Bouygues. Over these 2 periods, we reduced the DSO of EQUANS by 4.6 days, okay? At the same time, Bouygues Energy & Services was able to improve its DSO by 6 days. So if you make the average of the 2, we improved the EQUANS -- new EQUANS DSO by 5 days, okay? So that's to give you a little bit of more color of what we are doing. So concerning the cash conversion ratio, we are just making the numerator and denominator coherent. But we have also the CapEx that you are not mentioning. For example, we have -- when we created the new IT infrastructure of EQUANS, we had to invest and this is a maintenance CapEx that is below [indiscernible], okay? So that's the major, so the cash -- the CapEx to sales ratio and, of course, the working progress process.

You've done 6 days in 2 years. I mean that's the scope of the group. It's basically EUR 300 million, EUR 250 million over 2 years. Are you thinking about -- Philippe is looking at me, he's going to kill me. But is -- can we -- are we talking big numbers in terms of opportunity or just kind of normal work in progress of improvement? Is there EUR 300 million to EUR 500 million net working cap to get from here over the next 5 years? Or are the opportunity is much, much more limited?

So we are structuring a strong cash improvement plan, okay? So that's our aim. As we said, we need to inject a strong cash culture permanently in the company. So we are planning to improve, to continue to reduce the DSO over the plan, okay, progressively. And I will not disclose the final target that we are setting because we are working on today. But you can imagine that what we said for '21 and '22, we want to continue the same path.

We are becoming, through these investments that we are doing progressively, fully asset-light. We had some asset investment over the last 2 years.

Nicolas Cote-Colisson again. A question on M&A because I suspect there's always some good targets to complete or enhance your portfolio and your competitors keep acquiring some assets. So I wonder how you see your attitude toward M&A given some balance sheet constraints eventually at your mother company level. How do you see the risk of missing out some opportunities? Or do you think you have everything you need for delivering this plan for the next 5 years?

We have already a quite important M&A ongoing since we have to deliver the inclusive integration of Bouygues Energy & Services, so we need to absorb this reorganization of the company. And as I explained, we are clearly well on track. However, we have not seen already all of what we can do in the combination of the competence of the company. We see a lot of things, but so do we need to work from taking the benefit of -A plus B is better than A and B alone. So I think that's something which is important to be understood. We have seen that, for example, in the data center. As I explained, we organize the way we serve this market. The growth of the market is incredible, and it's part of the answer of the previous question. We say, okay, we have a unique organization for the Tier 1 of the market then to serve Europe at European level, this market. We have now an organization for the Tier 2 market, which are the medium-sized, which is regional, in each of the country. And then we have a local one for the data center of any banks. And if you want to have a new data center, please call us. We can serve you. So there is a lot of benefit that we need to be [indiscernible] from that. Of course, we will look to some opportunities at the size which is compatible with our capacity of management where we are making money at a level which is above a certain threshold.

Could we just sum up one thing? The first M&A operation was a EUR 4 billion, they've just done it in January. They need time to absorb it. And when you look what happened in the peers, EUR 4 billion is not so frequent. So let's hit the EUR 4 billion, let's fix everything and we'll consider the future that we've got time.

It's Eric Lemarie from CIC. I got a couple of questions. First one on your exposure to the U.S. -- to the United States. How much do you think you will benefit from the various plans, the IRA or the plans to improve -- to upgrade the electrical grid there, as you see you are well placed to benefit from that. I got a second question regarding the presentation from Ana. Your exposure to traditional businesses like HVAC and your exposure to fast-expanding markets like solar panel or data centers, could you give -- you gave some figures, but could you give us your -- the split of your top line between traditional businesses and fast-expanding segments today and what it could be in the midterm in 2025 or 2027? And the last question, so you explained that until at least 2025, the objective is to improve margin and not to have some strong top line growth. But what could be the growth once EQUANS will have reached this 4% COPA margin by 2025?

So I'll start with the first question about our positioning in the U.S. market. As I explained to you, we are not positioned on the grid market in the U.S. So we believe we are going to take benefit of the growth of the U.S. market, mainly from the industry. We have been winning several projects for Ford and General Motors who are pushing the transformation of their production chain in order to incorporate the new EV vehicle. We are also working right now on a giga factory in the U.S. on that market. In addition to that, we see significant reinvestment on the East Coast and what is good is what comes out of our subsidiary called NEP. It has been, in fact, working in depth as a good old days of the microelectronics of the U.S. working for IBM. They saw that the market was going to Asia and they see very high level of investment right now on the East Coast of the U.S. in the microelectronics, which is part of the autonomization of -- on [ critical ] industry, which is coming. They are also present because they switched to pharmaceutical and biology when there were a drop of the microelectronics. So we believe that we will have an important growth on that domain.

Can I just jump on that? Is this type of exposure, this type of businesses in the U.S., it's double-digit growth, sorry, right, at least double-digit growth?

Ana?

Maybe I can complement and make it a bit [ wider ]. On the traditional market versus the fast-growing, traditional market is clearly today the priority in terms of margin improvement. So we are not going to reinvest a lot in many things that will bring for sure, potential for the future. But today, we will focus on performance on the traditional market. Having said that, we need to prepare ourselves and the evolution of our top line linked to fast-growing market will be progressive. Some of them are already there because data centers, we are doing EUR 500 million on data centers with good margins, and renewables are progressively also increasing in our sales mix. So some of them will come very fast. Some others will come more long term. And what we don't want to miss now is how we get ready, how we get prepared to capture the future value on all this. But we are not going to miss the focus on increasing margin on our base business, for sure.

In order to give you some color about growth path of turnover starting after 2025, we are not disclosing figures, what we are saying is that, in 2027, we will reach our peers' growth rates, okay? So starting from '25, we'll make a linear interpolation to the competition growth rates, and we will arrive to what we will be.

Another question, yes.

Thank you. If we just take a step back and we look at the European level or the restructuring, which have been going on at many peers. The odds are not very good. Have you done a benchmark exercise of why so many of your peers have failed in restructuring and bringing margin to 5%, 6%? The starting point is different. I have a few ideas why versus the market of the [ 2010 ], it's maybe more consolidated now. The leaders are really not cutting prices and raising the margin of the overall market up. But what makes -- the starting point is low. I mean 2%, it's a low margin and a low starting point. How confident are you? In a market which is still competitive, you can get to 5%. I know you've given us the 5%, 6% levers, but many peers before you have gone there and have pushed out to the right the targets or dropped the targets, gone into profit warnings. Do you have 2, 3 pitfalls you know you must avoid? And the 1, 2 key success factors you need to implement so that you can get to 5%.

Maybe I will take it. Maybe you didn't -- so in the presentation where we made a comparison with [indiscernible], we start -- this process started in 2019 in Bouygues Energy & Services. And maybe you saw on the slide also that finally, at the end of 2022, we reached 3.6%. And what we told in the slide that we improved by 4 points the level of margin of Bouygues Energy & Services. What we explained today is this is -- Bouygues Energy & Services is a size of around EUR 4 billion. EQUANS is a size about EUR 13 billion. We could say roughly, this is the same kind of problem to solve. And what we explain and what Thomas explained is we took the good measures that we saw in [indiscernible] in the last 3 years, and we want to replicate them at the global level of EQUANS. And what we saw about the recovery of the profit center, we did it already in Bouygues Energy & Services, while we saw -- about the cash generation, we saw it already in Bouygues Energy & Services and the evolution of the pricing also that we know -- that we observe, we observe that, for example, for the procurement in pricing, it takes time to raise the price first, to convince every profit centers that they have to focus on margin instead of volume. It takes time. We observed it in the last 3 years. We know exactly that, for example, for procurement, it lasts nearly 2 years. Before that, all the managers of the profit centers used everything we set up with them. So this is why we have this evolution. This is why we say it will be a progressive evolution. But we show a peer, a small peer of EUR 4 billion, where it works. So as it works for Bouygues Energy & Services, I don't see any reason we won't work for EQUANS, assuming the fact that [indiscernible] as a manager of Bouygues Energy & Services are part of the management team that we set up. You saw a few people on the side of COMEX coming from Bouygues Energy & Services. And we really want to reuse what we observed in the past. We don't want to reinvent the wheel. We know there is very basic thing at work. To give you just an example, for the profit center, the first thing is to be sure that the profit center doesn't sell something it doesn't know how to execute. It's very simple. It's very reasonable. But when we do it, you don't use subcontractor, and you avoid to make losses. It's very simple that when you try to make it, you get result. This is why we are really, really confident and we have no doubt about the fact that we will succeed. And again, if we decide to be sure that the -- all the manager will align our goal and to be sure that they choose to generate margin instead of volume, we put that MIP, and we think that with the level of MIP we set up, they are aligned with us. In the meantime, no question in the room anymore. Okay, no more questions? So thank you for your attention. Thank you.

[indiscernible] universally and how that really work on your strategy on management incentive plan as well as the fact that EQUANS and Bouygues are now able to participate in Bouygues [ in relation to that ] and also in light of also the recent share buyback that Bouygues [indiscernible]. I think it would be interesting if you can clarify how you see that ongoing ownership evolving over the next few years?

Sorry, I didn't catch the beginning. Yes, we didn't catch the beginning of the question.

[Foreign Language]

If you look at what we need to change finally in this company, I told you before, we have the right skill, we have the right -- we are in the right market. This is buoyant market. And finally, we didn't get the right results. So we need to change a bit. We need to change a bit in the pricing. We need to change a bit in the way we procure everything that -- when we set up a project. And to be sure that it works correctly. We want to put a strong pressure on the manager in order they could change their habit of working. This is the reason of the MIP. And this is not the same thing as we do for the shareholder plan -- for the employee shareholder plan, for the employees, as we do for the rest of the Bouygues group to be sure that people of the group will own part of the global group. But this is something which is not -- we don't oppose these 2 systems. This is something that we think really that they can work closely in parallel because they don't address the same need. So for us, there is no problem to do both of them at the same time. That's it. Thank you for your attention.